Exhibit 10.1


 


CREDIT AGREEMENT


 


dated as of


 


August 20, 2004,


 


among


 


US ONCOLOGY HOLDINGS, INC.


 


US ONCOLOGY, INC.,


as Borrower


 


The Lenders Party Hereto,


 


JPMORGAN CHASE BANK,


as Administrative Agent and
Collateral Agent


 


WACHOVIA BANK, NATIONAL
ASSOCIATION,


as Syndication Agent


 


and


 


CITICORP NORTH AMERICA, INC.,


as Documentation Agent


 










 


J.P. MORGAN SECURITIES INC.,


as Co-Lead Arranger and Joint
Bookrunner


 


WACHOVIA CAPITAL MARKETS, LLC,


as Co-Lead Arranger and Joint
Bookrunner


 


CITIGROUP GLOBAL MARKETS INC.,


as Arranger


 


[CS&M
Ref.  6701-324]


 





















 


 


 


	
  TABLE OF CONTENTS

  	
   

  
	
   

  	
   

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  	
   

  
	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION
  1.01.

  	
  Defined
  Terms

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.02.

  	
  Classification of Loans and Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.03.

  	
  Terms Generally

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.04.

  	
  Accounting Terms; GAAP

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  
	
   

  	
   

  
	
  The Credits

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.01.

  	
  Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.02.

  	
  Loans and Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.03.

  	
  Requests for Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.04.

  	
  Swingline Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.05.

  	
  Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.06.

  	
  Funding of Borrowings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.07.

  	
  Interest Elections

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.08.

  	
  Termination and Reduction of Commitments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.09.

  	
  Repayment of Loans; Evidence of Debt

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.10.

  	
  Amortization of Tranche B Term Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.11.

  	
  Prepayment of Loans

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.12.

  	
  Fees

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.13.

  	
  Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.14.

  	
  Alternate Rate of Interest

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.15.

  	
  Increased Costs

  	
   

  



 


i





















 


	
  SECTION 2.16.

  	
  Break Funding Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.17.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.18.

  	
  Payments Generally; Pro Rata Treatment;
  Sharing of Set-offs

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.19.

  	
  Mitigation Obligations; Replacement of
  Lenders

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 2.20.

  	
  Incremental Extensions of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
                                                                                                                                       ARTICLE III

  	
   

  
	
   

  	
   

  	
   

  
	
  Representations and Warranties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.01.

  	
  Organization; Power

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.02.

  	
  Authorization; Enforceability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
  Governmental Approvals; No Conflicts

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.04.

  	
  Financial Condition; No Material Adverse
  Change

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.05.

  	
  Properties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.06.

  	
  Litigation and Environmental Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.07.

  	
  Compliance with Laws and Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.08.

  	
  Investment and Holding Company Status

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.09.

  	
  Taxes

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.10.

  	
  ERISA

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.11.

  	
  Disclosure

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.12.

  	
  Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.13.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.14.

  	
  Labor Matters

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.15.

  	
  Solvency

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.16.

  	
  Senior Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.17.

  	
  Reimbursement from Third Party Payors

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.18.

  	
  Fraud and Abuse

  	
   

  



 


ii





















 


	
  ARTICLE IV

  	
   

  
	
   

  	
   

  	
   

  
	
  Conditions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.01.

  	
  Effective Date

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 4.02.

  	
  Each Credit Event

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  
	
  Affirmative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.01.

  	
  Financial Statements and Other Information

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.02.

  	
  Notices of Material Events

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.03.

  	
  Information Regarding Collateral

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.04.

  	
  Existence; Conduct of Business

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.05.

  	
  Payment of Obligations

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.06.

  	
  Maintenance of Properties

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.07.

  	
  Insurance

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.08.

  	
  Casualty and Condemnation

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.09.

  	
  Books and Records; Inspection and Audit
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.10.

  	
  Compliance with Laws

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.11.

  	
  Use of Proceeds and Letters of Credit

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.12.

  	
  Additional Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.13.

  	
  Further Assurances

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 5.14.

  	
  Interest Rate Protection

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  
	
   

  
	
  Negative Covenants

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.01.

  	
  Indebtedness; Certain Equity Securities

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.02.

  	
  Liens

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.03.

  	
  Fundamental Changes

  	
   

  



 


iii





















 


	
  SECTION 6.04.

  	
  Investments, Loans, Advances, Guarantees and Acquisitions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.05.

  	
  Asset Sales

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.06.

  	
  Sale and Leaseback Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.07.

  	
  Swap Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.08.

  	
  Restricted Payments; Certain Payments of
  Indebtedness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.09.

  	
  Transactions with Affiliates

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.10.

  	
  Restrictive Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.11.

  	
  Amendment of Material Documents

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.12.

  	
  Interest Expense Coverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.13.

  	
  Leverage Ratio

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 6.14.

  	
  Maximum Capital Expenditures

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  
	
   

  
	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.01.

  	
  Events of Default

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.02.

  	
  Borrower’s Right to Cure

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.03.

  	
  Exclusion of Immaterial Subsidiaries

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  
	
   

  
	
  The Agents

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  
	
   

  
	
  Miscellaneous

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.01.

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.02.

  	
  Waivers; Amendments

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.03.

  	
  Expenses; Indemnity; Damage Waiver

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.04.

  	
  Successors and Assigns

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.05.

  	
  Survival

  	
   

  



 


iv





















 


	
  SECTION 9.06.

  	
  Counterparts; Integration; Effectiveness

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.07.

  	
  Severability

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.08.

  	
  Right of Setoff

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.09.

  	
  Governing Law; Jurisdiction; Consent to Service of Process

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.10.

  	
  WAIVER OF JURY TRIAL

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.11.

  	
  Headings

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.12.

  	
  Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.13.

  	
  Interest Rate Limitation

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.14.

  	
  USA Patriot Act

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 9.15.

  	
  Release of Collateral

  	
   

  



 


 


	
  SCHEDULES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule 1.01 

  	
  — Mortgaged Property

  	
   

  
	
  Schedule 2.01 

  	
  — Commitments

  	
   

  
	
  Schedule 2.05 

  	
  — Existing Letters of Credit

  	
   

  
	
  Schedule 3.05

  	
  — Real Property

  	
   

  
	
  Schedule 3.06

  	
  — Disclosed Matters

  	
   

  
	
  Schedule 3.12 

  	
  — Subsidiaries

  	
   

  
	
  Schedule 3.13

  	
  — Insurance

  	
   

  
	
  Schedule 3.16 

  	
  — Physician Notes

  	
   

  
	
  Schedule 6.01 

  	
  — Existing Indebtedness

  	
   

  
	
  Schedule 6.02 

  	
  — Existing Liens

  	
   

  
	
  Schedule 6.04 

  	
  — Existing Investments

  	
   

  
	
  Schedule 6.09 

  	
  — Existing Transactions with Affiliates

  	
   

  
	
  Schedule 6.10

  	
  — Existing Restrictions

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  — Form of Assignment and Assumption

  	
   

  
	
  Exhibit B-1

  	
  — Form of Opinion of Ropes & Gray LLP

  	
   

  
	
  Exhibit B-2

  	
  — Form of Opinion of Local Counsel

  	
   

  
	
  Exhibit C

  	
  — Form of Collateral Agreement

  	
   

  
	
  Exhibit D

  	
  — Form of Perfection Certificate

  	
   

  
	
  Exhibit E

  	
  — Form of Borrowing Request

  	
   

  
	
  Exhibit F

  	
  — Form of Interest Election Request

  	
   

  
	
  Exhibit G

  	
  — Form of Subordination Provisions

  	
   

  



 


v





















 


CREDIT AGREEMENT dated as of August 20, 2004,
among US ONCOLOGY HOLDINGS, INC., a Delaware corporation, US ONCOLOGY, INC., a
Delaware corporation, the LENDERS party hereto, JPMORGAN CHASE BANK, as
Administrative Agent and Collateral Agent, WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent and CITICORP NORTH AMERICA, INC., as Documentation Agent.


 


Pursuant to the Agreement and Plan of Merger dated as of March 20,
2004 (the “Merger Agreement”), by and among US Oncology Holdings, Inc.,
a Delaware corporation (“Holdings”), Oiler Acquisition Corp., a Delaware
corporation (“MergerCo”), and US Oncology, Inc., a Delaware corporation
(the “Borrower”), (a) MergerCo will merge with and into the Borrower
(the “Merger”), with the Borrower surviving the Merger, (b) each
outstanding share of common stock (other than shares held by shareholders who
properly exercise appraisal rights and shares held by Holdings (including all
shares previously held by Welsh, Carson, Anderson & Stowe IX, L.P.
(the “Sponsor”) and contributed to Holdings)) of the Borrower will be
converted into the right to receive $15.05 in cash, (c) options and
warrants to acquire shares of common stock of the Borrower that are
“in-the-money” and all the Borrower’s “delayed delivery” agreements with
physicians will be canceled in exchange for lump-sum payments to be made after
the Effective Date (such payments, the “Delayed Equity Payments”) based
on the per-share merger consideration of $15.05 (the aggregate amount payable
under clauses (b) and (c) together, the “Merger Consideration”) and
(d) all shares of common stock of the Borrower owned by the Sponsor prior to
the Merger will be contributed to Holdings in return for shares of common stock
of Holdings and shares of Qualified Preferred Stock.


 


Immediately prior to or substantially concurrently with the
consummation of the Merger, (a) the Sponsor will contribute cash to
Holdings in an aggregate amount not less than the difference between
(i) $312,700,000 and (ii) the aggregate amount of payments made prior
to the Effective Date in respect of the Existing Synthetic Lease Facility (as
defined below) in exchange for shares of common stock of Holdings and shares of
Qualified Preferred Stock, (b) Holdings will contribute the aggregate
amount described in clause (a) to the Borrower as common equity in
exchange for all the issued and outstanding Equity Interests (as defined below)
of the Borrower (the steps described in clauses (a) and (b) of this paragraph
together, the “Equity Contribution”), (c) the Borrower and the
Subsidiaries will repay (i) all principal, interest, fees and other
amounts outstanding under the Borrower’s existing Credit Agreement dated as of
February 1, 2002 (the “Existing Credit Agreement”), by and among
the Borrower, the banks and financial institutions named therein as lenders,
First Union National Bank, as agent for the lenders, UBS Warburg LLC, as
syndication agent, and GE Capital Healthcare Financial Services, as
documentation agent, and the Borrower will terminate all commitments,
obligations and security interests thereunder and (ii) all principal,
interest, fees and other amounts outstanding under the Borrower’s existing
end-loaded lease facility created under the Amended and Restated Participation
Agreement dated as of February 1, 2002 (the “Existing Synthetic Lease
Facility”), by and among the Borrower, Wells Fargo Northwest National
Association, as owner trustee, and First Union Bank, as 


 





















 


agent, and the Borrower will terminate all commitments, obligations and
security interests thereunder, (d) the Borrower will consummate a debt
tender offer and consent solicitation in respect of the Borrower’s 9 5/8%
senior subordinated notes due 2012 (the “Existing Senior Subordinated Notes”),
pursuant to which the Borrower will (i) purchase not less than a majority
of the aggregate principal amount of the Existing Senior Subordinated Notes
outstanding on the Effective Date and (ii) amend the indenture governing
the Existing Senior Subordinated Notes (the “Existing Senior Subordinated
Notes Indenture”) to eliminate all significant negative covenants in such
indenture and to eliminate all rights of the holders of the Existing Senior
Subordinated Notes upon a “Change in Control” (as defined in the Existing
Senior Subordinated Notes Indenture), all in accordance with the Offer to
Purchase and Consent Solicitation Statement dated May 21, 2004, and the
related Consent and Letter of Transmittal dated May 21, 2004 (the steps
described in clauses (i) and (ii) of this clause (d) together, the “Debt
Tender Offer”), (e) the Borrower and the Subsidiaries will obtain senior
secured credit facilities having an aggregate principal amount of $550,000,000
pursuant to this Agreement, (f) the Borrower and the Subsidiaries will
issue (i) Senior Notes (as defined below) in an aggregate principal amount
of not less than $300,000,000 and (ii) Senior Subordinated Notes (as
defined below) in an aggregate principal amount of not less than $275,000,000,
in each case in a public offering or pursuant to Rule 144A under the
Securities Act of 1933, as amended, and (g) the Borrower and the
Subsidiaries will pay all fees, expenses and other costs incurred in connection
with the foregoing in an aggregate amount not to exceed $110,000,000 (the “Transaction
Costs”).


 


The Borrower has requested that the Lenders extend credit in the form
of (a) Tranche B Term Loans (as defined below) on the Effective Date in an
aggregate principal amount not to exceed $400,000,000 and (b) Revolving
Loans, Swingline Loans and Letters of Credit (each, as defined below) at any
time and from time to time during the Revolving Availability Period, in an
aggregate principal amount at any time outstanding not to exceed $160,000,000.


 


The proceeds of the Tranche B Term Loans will be used by the Borrower
on the Effective Date, solely (i) first, to pay the Transaction Costs,
(ii) second, to repay all loans and other amounts accrued and owing under
the Existing Credit Agreement and the Existing Synthetic Lease Facility,
(iii) third, to repurchase the Existing Senior Subordinated Notes tendered
(and not withdrawn) pursuant to the Debt Tender Offer, including any premiums
associated therewith and (iv) fourth, together with the Equity
Contribution, cash on hand at the Borrower and the proceeds of the issuance of
the Senior Notes and the Senior Subordinated Notes, to pay the Merger
Consideration.  The proceeds of Revolving
Loans, Swingline Loans and Letters of Credit will be used by the Borrower for
working capital and general corporate purposes (including Permitted
Acquisitions).


 


2





















 


The Lenders are willing to extend such credit to the Borrower, and the
Issuing Bank is willing to issue Letters of Credit for the account of the
Borrower, on the terms and subject to the conditions set forth herein.  Accordingly, the parties hereto agree as
follows:


 


ARTICLE I


 


Definitions


 


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


 


“ABR”, when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.


 


“Acquisition Documents” means the Merger Agreement, the other
agreements to be entered into in connection with the Merger, all schedules,
exhibits and annexes to each of the foregoing and all side letters, instruments
and agreements affecting the terms of any of the foregoing or entered into in
connection therewith.


 


“Additional Lender” has the meaning set forth in
Section 2.20.


 


“Additional Senior Debt” means unsecured Indebtedness of the
Borrower that (a) does not have a stated maturity date prior to the date that
is 180 days after the Tranche B Maturity Date, (b) does not require any
scheduled payment of principal (including pursuant to a sinking fund
obligation) or amortization prior to the date that is 180 days after the
Tranche B Maturity Date, (c) contains terms (including covenants, events
of default, remedies, redemption provisions and sinking fund provisions, but
excluding interest rate and redemption premiums) no less favorable to the
Lenders than the terms of the Senior Notes and (d) bears a market rate of
interest as determined by the Borrower’s Board of Directors, provided
that (i) the Borrower and the Subsidiaries are in compliance on a Pro
Forma Basis with the Financial Performance Covenants recomputed as of the last
day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available and (ii) the Borrower has delivered to
the Administrative Agent an officer’s certificate to such effect, together with
all relevant financial information reasonably requested by the Administrative
Agent.


 


“Additional Subordinated Debt” means unsecured Indebtedness of
the Borrower that (a) does not have a stated maturity date prior to the date
that is 180 days after the Tranche B Maturity Date, (b) does not require any
scheduled payment of principal (including pursuant to a sinking fund
obligation) or amortization prior to the date that is 180 days after the
Tranche B Maturity Date, (c) is subordinated to the Obligations on terms
no less favorable to the Lenders than the terms of the Senior Subordinated
Notes, (d) contains terms (including covenants, events of default,
remedies, redemption provisions and sinking fund provisions, but excluding
interest rate and redemption premiums) no less favorable to the Lenders than
the terms of the Senior 


 


3





















 


Subordinated Notes and (e) bears a market rate of interest as
determined by the Borrower’s Board of Directors, provided that
(i) the Borrower and the Subsidiaries are in compliance on a Pro Forma
Basis with the Financial Performance Covenants recomputed as of the last day of
the most recently ended fiscal quarter of the Borrower for which financial
statements are available and (ii) the Borrower has delivered to the
Administrative Agent an officer’s certificate to such effect, together with all
relevant financial information reasonably requested by the Administrative
Agent.


 


“Adjusted LIBO Rate” means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.


 


“Administrative Agent” means JPMorgan Chase Bank, in its
capacity as administrative agent for the Lenders under the Loan Documents.


 


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


 


“Affiliate” means, with respect to a specified Person, any other
Person that directly, or indirectly through one or more intermediaries, Controls,
is Controlled by or is under common Control with the Person specified.


 


“Affiliated Practice” means any physician practice entity that
is a party to, or employs, is owned by or whose member or members are
physicians who are party to, a Management Services Agreement.


 


“Agents” means the Administrative Agent, the Collateral Agent,
the Syndication Agent and the Documentation Agent.


 


“Agreement” means this Credit Agreement, as the same may be
renewed, extended, modified, supplemented or amended from time to time.


 


“Alternate Base Rate” means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Effective Rate in effect on such day plus 1⁄2 of
1%.  Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.


 


“Applicable Percentage” means, with respect to any Revolving
Lender, the percentage of the aggregate Revolving Commitments represented by
such Lender’s Revolving Commitment.  If
the Revolving Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Revolving Commitments most
recently in effect, giving effect to any assignments that occur thereafter.


 


“Applicable Rate” means, for any day with respect to
(a) any ABR Loan or Eurodollar Loan that is a Revolving Loan, (b) any
ABR Loan or Eurodollar Loan that 


 


4





















 


is a Tranche B Term Loan or (c) the commitment fees payable
hereunder in respect of the Revolving Commitments, as applicable, the
applicable rate per annum set forth below under the caption “Revolving Loan ABR
Spread”, “Revolving Loan Eurodollar Spread”, “Tranche B Term Loan ABR
Spread”, “Tranche B Term Loan Eurodollar Spread” or “Commitment Fee Rate”,
as applicable, in each case, based upon the Leverage Ratio as of the most
recent determination date, provided that until the delivery to the
Administrative Agent, pursuant to Section 5.01, of the Borrower’s
consolidated financial information for the Borrower’s fiscal year ended
December 31, 2004, the “Applicable Rate” for purposes of clauses (a),
(b) and (c) above shall be the applicable rate per annum set forth below in
Category 1:


 


 


	
  Leverage Ratio:

  	
   

  	
  Revolving 

  Loan ABR 

  Spread

  	
   

  	
  Revolving 

  Loan 

  Eurodollar 

  Spread

  	
   

  	
  Tranche B 

  Term Loan 

  ABR Spread

  	
   

  	
  Tranche B 

  Term Loan 

  Eurodollar 

  Spread

  	
   

  	
  Commitment 

  Fee Rate

  	
   

  
	
  Category
  1

  Greater than 4.00 to

  1.00

  	
   

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  0.50

  	
  %

  
	
  Category
  2

  Equal to or less than 

  4.00 to 1.00 but greater 

  than or equal to 3.75 to 

  1.00

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  1.75

  	
  %

  	
  2.75

  	
  %

  	
  0.50

  	
  %

  
	
  Category
  3 

  Less than 3.75 to 1.00 

  but greater than 3.50 to 

  1.00

  	
   

  	
  1.25

  	
  %

  	
  2.25

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.50

  	
  %

  
	
  Category 4

  Less than or equal to 

  3.50 to 1.00 but greater 

  than 3.25 to 1.00

  	
   

  	
  1.00

  	
  %

  	
  2.00

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.50

  	
  %

  
	
  Category 5

  Less than or equal to 

  3.25 to 1.00

  	
   

  	
  0.75

  	
  %

  	
  1.75

  	
  %

  	
  1.50

  	
  %

  	
  2.50

  	
  %

  	
  0.375

  	
  %

  



 


For purposes of the foregoing, (a) the Leverage Ratio shall be
determined as of the end of each fiscal quarter of the Borrower based upon the
Borrower’s consolidated financial statements delivered pursuant to
Section 5.01(a) or (b) and (b) each change in the Applicable Rate
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change, provided that the Leverage Ratio shall be deemed to be in
Category 1 (i) at any time that an Event of Default has occurred and
is continuing or (ii) at the option of the Administrative Agent or at the
request of the Required Lenders if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to 


 


5





















 


Section 5.01(a) or (b), during the period from the expiration of
the time for delivery thereof until such consolidated financial statements are
delivered.


 


“Approved Fund” has the meaning assigned to such term in
Section 9.04.


 


“Assignment and Assumption” means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.


 


“Available Amount” means, on any date after January 1,
2006, an amount determined on a cumulative basis equal to the amount of the
Borrower’s Portion of Excess Cash Flow for all fiscal years ending after
January 1, 2005, that has not been used to make a Restricted Payment pursuant
to clause (x) of Section 6.08.


 


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


 


“Borrower” means US Oncology, Inc., a Delaware corporation.


 


“Borrower’s Portion of Excess Cash Flow” means, on any date
after January 1, 2005, the portion of Excess Cash Flow for the immediately
preceding full fiscal year of the Borrower for which financial statements have
been delivered pursuant to Section 5.01 that has not been, or is not required
to be, applied to prepay Loans pursuant to Section 2.11(d).


 


“Borrowing” means (a) Loans of the same Class and Type,
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.


 


“Borrowing Request” means a request by the Borrower for a
Borrowing in accordance with Section 2.03, provided that a written
Borrowing Request shall be substantially in the form of Exhibit E, or such
other form as shall be approved by the Administrative Agent.


 


“Business Day” means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or
required by law to remain closed, provided that when used in connection
with a Eurodollar Loan, the term “Business Day” shall also exclude any
day on which banks are not open for dealings in dollar deposits in the London
interbank market.


 


“Capital Expenditures” means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of the
Borrower, the Subsidiaries and Permitted Joint Ventures that are (or would be)
set forth in a consolidated statement of cash flows of the Borrower for such
period prepared in accordance with GAAP and (b) Capital Lease Obligations
incurred by the Borrower and the Subsidiaries during such period, provided
that Capital Expenditures shall not include (i) expenditures to the extent
they are made with the Net Proceeds of the issuance of 


 


6





















 


Permitted Securities or Qualified Sponsor Notes, (ii) investments
that constitute a portion of the purchase price of a Permitted Acquisition,
(iii) expenditures that constitute a reinvestment of the Net Proceeds of
any event described in clause (a) or (b) of the term “Prepayment Event”,
to the extent permitted by Section 2.11(c), (iv) the purchase price
of equipment purchased during such period to the extent the consideration
therefor consists of any combination of (x) used or surplus equipment
traded-in at the time of such purchase and (y) the proceeds of a
concurrent sale of used or surplus equipment and (v) expenditures of any
Permitted Hospital Joint Venture in excess of the product of (x) the
expenditures for such Permitted Hospital Joint Venture calculated as set forth
in clauses (a) and (b) above and (y) the Borrower’s or its Subsidiaries’
percentage ownership of the equity interests in such Permitted Hospital Joint
Venture.


 


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


 


“Change in Control” means (a) the acquisition of record
ownership by any Person other than Holdings of any Equity Interests in the
Borrower, (b) prior to an IPO, the failure by the Permitted Investors to
own, directly or indirectly, beneficially or of record, Equity Interests in
Holdings representing at least 51% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in Holdings,
(c) after an IPO, (i) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934, as amended, and the rules of
the SEC thereunder as in effect on the date hereof) of Equity Interests in
Holdings representing more than 35% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in Holdings and
(ii) the ownership, directly or indirectly, beneficially or of record, by
the Permitted Investors of Equity Interests in Holdings representing in the
aggregate a lesser percentage of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests in Holdings than such
Person or group, (d) occupation of a majority of the seats (other than
vacant seats) on the Board of Directors of Holdings by Persons who were not
(i) nominated by the Board of Directors of Holdings, (ii) appointed
by directors so nominated or (iii) nominated by the Permitted Investors or
(e) the occurrence of a “Change of Control”, as defined in any of the
Notes Documents, any indenture or other instrument, agreement or other document
evidencing or governing the Qualified Sponsor Notes or any certificate of
designations relating to the Qualified Preferred Stock.


 


“Change in Law” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law,
rule or regulation or in the interpretation or application thereof by any
Governmental Authority after the date of this Agreement or (c) compliance
by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not 


 


7





















 


having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.


 


“Class”, when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Tranche B Term Loans or Swingline Loans and, when used in reference
to any Commitment, refers to whether such Commitment is a Revolving Commitment
or a Tranche B Commitment.


 


“CLO” has the meaning assigned to such term in
Section 9.04.


 


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


 


“Collateral” means any and all “Collateral”, as defined in any
applicable Security Document.


 


“Collateral Agent” means JPMorgan Chase Bank, in its capacity as
collateral agent for the Lenders under this Agreement and any Security
Document.


 


“Collateral Agreement” means the Guarantee and Collateral
Agreement among the Loan Parties and the Collateral Agent, substantially in the
form of Exhibit C.


 


“Collateral and Guarantee Requirement” means the requirement
that:


 


(a) the Collateral Agent shall have
received from each Loan Party either (i) a counterpart of the Collateral
Agreement duly executed and delivered on behalf of such Loan Party or
(ii) in the case of any Person that becomes a Loan Party after the
Effective Date, a supplement to the Collateral Agreement, in the form specified
therein, duly executed and delivered on behalf of such Loan Party;


 


(b) all outstanding Equity Interests of
(i) the Borrower and (ii) each Subsidiary owned directly by any Loan
Party shall have been pledged pursuant to the Collateral Agreement (except that
the Loan Parties shall not be required to pledge more than 65% of the
outstanding voting Equity Interests of any Foreign Subsidiary) and the
Collateral Agent shall have received certificates or other instruments
representing all such Equity Interests, together with undated stock powers or
other instruments of transfer with respect thereto endorsed in blank;


 


(c) all Indebtedness of Holdings, the
Borrower and each Subsidiary that is owing to any Loan Party shall be evidenced
by a promissory note and shall have been pledged pursuant to the Collateral
Agreement, and the Collateral Agent shall have received all such promissory
notes, together with undated instruments of transfer with respect thereto
endorsed in blank;


 


(d) all documents and instruments,
including Uniform Commercial Code financing statements, required by law or
reasonably requested by the Collateral Agent to be filed, registered or
recorded to create the Liens intended to be created 


 


8





















 


by the Collateral Agreement and perfect such Liens to the extent
required by the Collateral Agreement, shall have been filed, registered or
recorded or delivered to the Collateral Agent for filing, registration or
recording;


 


(e) the Collateral Agent shall have
received (i) counterparts of a Mortgage with respect to each Mortgaged
Property duly executed and delivered by the record owner of such Mortgaged
Property, (ii) a policy or policies of title insurance issued by a
nationally recognized title insurance company insuring the Lien of each such
Mortgage as a valid first-priority Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by
Section 6.02, together with such endorsements, coinsurance and reinsurance
as the Collateral Agent or the Required Lenders may reasonably request, and
(iii) such surveys, appraisals, legal opinions and other documents as the
Collateral Agent or the Required Lenders may reasonably request with respect to
any such Mortgage or Mortgaged Property; and


 


(f) each Loan Party shall have obtained
all material consents and approvals required to be obtained by it in connection
with the execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting by it of
the Liens thereunder.


 


Notwithstanding anything to the contrary in this Agreement or any
Security Document, no Loan Party shall be required to pledge or grant security
interests in particular assets if, in the reasonable judgment of the
Administrative Agent or the Collateral Agent, the costs of creating or
perfecting such pledges or security interests in such assets (including any
mortgage, stamp, intangibles or other tax) are excessive in relation to the
benefits to the Lenders therefrom.


 


“Commitment” means a Revolving Commitment, a Tranche B
Commitment, any Commitment in respect of an Incremental Extension of Credit or
any combination thereof (as the context requires).


 


“Consolidated Cash Interest Expense” means, for any period, the excess
of (a) the sum of (i) the interest expense (including imputed
interest expense in respect of Capital Lease Obligations) of Holdings, the
Borrower and the Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP, (ii) any interest accrued during such
period in respect of Indebtedness of Holdings, the Borrower or any Subsidiary
that is required to be capitalized rather than included in such consolidated
interest expense for such period in accordance with GAAP (less the amount of
such capitalized interest that is included in Capital Expenditures in
accordance with GAAP), plus (iii) any cash payments made during such
period in respect of obligations referred to in clause (b)(ii) below that
were amortized or accrued in a previous period, minus (b) the sum of
(i) to the extent included in such consolidated interest expense for such
period, non-cash amounts attributable to amortization or write-off of financing
costs paid in a previous period, plus (ii) to the extent included in such
consolidated interest expense for such period, non-cash amounts attributable to
amortization of debt discounts, capitalized interest or accrued interest
payable in kind for such period.  For
purposes of determining 


 


9





















 


Consolidated Cash Interest Expense, (a) Consolidated Cash Interest
Expense for the period of four consecutive fiscal quarters ending on December
31, 2004, shall be equal to the product of (i) Consolidated Cash Interest
Expense for the fiscal quarter ending on December 31, 2004, and (ii) four,
(b) Consolidated Cash Interest Expense for the period of four consecutive
fiscal quarters ending on March 31, 2005, shall be equal to the product of
(i) Consolidated Cash Interest Expense for the two consecutive fiscal
quarters ending on March 31, 2005, and (ii) two and (c) Consolidated
Cash Interest Expense for the period of four consecutive fiscal quarters ending
on June 30, 2005, shall be equal to the product of (i) Consolidated Cash
Interest Expense for the three consecutive fiscal quarters ending on June 30,
2005, and (ii) a fraction, the numerator of which is four and the
denominator of which is three.


 


“Consolidated EBITDA” means, for any period, Consolidated Net
Income for such period plus (a) without duplication and to the extent
deducted in determining such Consolidated Net Income for such period, the sum
of (i) consolidated interest expense of the Borrower and the Subsidiaries
for such period, (ii) (A) consolidated income tax expense of the Borrower
and the Subsidiaries for such period and (B) income tax expense of
Holdings for such period to the extent paid in such period using the proceeds
of Restricted Payments made by the Borrower pursuant to clause (v) of
Section 6.08(a), (iii) all amounts attributable to depreciation and
amortization expense of the Borrower and the Subsidiaries for such period,
(iv) any non-cash charges for such period (but excluding (A) any
non-cash charge in respect of an item that was included in Consolidated Net
Income in a prior period and (B) any non-cash charge that relates to the
write-down or write-off of inventory), (v) any non-recurring fees, cash
charges and other cash expenses (including severance, employee relocation and
facilities closing costs) made or incurred by the Borrower and the Subsidiaries
in connection with the Transactions that are paid or otherwise accounted for
within 180 days of the consummation of the Transactions in an amount not
to exceed the Transaction Costs, (vi)(A) any non-recurring fees, cash
charges and other cash expenses (including severance, employee relocation and
facilities closing costs) made or incurred by the Borrower and the Subsidiaries
in connection with any Permitted Acquisition that are paid or otherwise
accounted for within 180 days of such Permitted Acquisition and (B)
extraordinary cash losses, provided that the aggregate amount of fees,
expenses and charges added pursuant to this clause (vi) shall not exceed
$10,000,000 in the aggregate during the term of this Agreement, (vii)(A) any
non-recurring fees, cash charges and cost expenses incurred in connection with
the issuance of Equity Interests or Indebtedness or the extinguishment of
Indebtedness and (B) charges resulting from inventory-related purchase
accounting adjustments directly resulting from the Transactions, provided
that the aggregate amount of fees, expenses and charges added pursuant to this
clause (vii) shall not exceed $5,000,000 in the aggregate during the term of
this Agreement, (vii) other cash expenses incurred during such period in
connection with a Permitted Acquisition to the extent that such expenses are
reimbursed in cash during such period pursuant to indemnification provisions of
any agreement relating to such Permitted Acquisition and (viii) cash expenses
incurred during such period in connection with extraordinary casualty events to
the extent such expenses are reimbursed in cash by insurance during such period
minus (b) without duplication and to the extent included in determining
such Consolidated Net Income, (i) any cash payments made during such 


 


10





















 


period in respect of non-cash charges described in clause (a)(iv)
taken in a prior period and (ii) any extraordinary gains and any non-cash
items of income for such period, all determined on a consolidated basis in
accordance with GAAP and (c) (without duplication) plus unrealized losses
and minus unrealized gains in each case in respect of Swap Agreements, as
determined in accordance with GAAP , provided that solely with respect
to calculation of the Leverage Ratio, “Consolidated EBITDA” shall give pro
forma effect to each Permitted Acquisition and Material Disposition permitted
by Section 6.05 as if such Permitted Acquisition or Material Disposition had
occurred on the first day of the four consecutive fiscal quarter period for
which such calculation is being made (including cost savings to the extent such
cost savings would be permitted to be reflected in pro forma financial
information complying with the requirements of GAAP and Article XI of
Regulation S-X under the Securities Act of 1933, as amended, as interpreted by
the Staff of the SEC, and as certified by a Financial Officer).


 


“Consolidated Net Income” means, for any period, the net income
or loss of the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP (adjusted to reflect any charge, tax
or expense incurred or accrued by Holdings during such period as though such
charge, tax or expense had been incurred by the Borrower, to the extent that
the Borrower has made or is permitted under the Loan Documents to make any
payment to or for the account of Holdings in respect thereof), provided
that there shall be excluded from Consolidated Net Income (a) the income
of any Subsidiary to the extent that the declaration or payment of dividends or
other distributions by such Subsidiary of that income is not at the time
permitted by a Requirement of Law or any agreement or instrument applicable to
such Subsidiary, except to the extent of the amount of cash dividends or other
cash distributions actually paid to the Borrower or any Subsidiary during such
period (unless the income of the Subsidiary receiving such dividend or
distribution would be excluded from Consolidated Net Income pursuant to this
proviso), (b) the income or loss of any Person accrued prior to the date
it becomes a Subsidiary or is merged into or consolidated with the Borrower or
any Subsidiary or the date that such Person’s assets are acquired by the
Borrower or any Subsidiary and (c) any gains or losses attributable to
sales of assets out of the ordinary course of business, provided, further,
that, notwithstanding the foregoing, the income of any Permitted Joint Venture
shall be included in Consolidated Net Income during any four-quarter period to
the extent of the amount of cash dividends or other cash distributions of such
income actually paid to the Borrower or any Subsidiary prior to the date
financial statements are required to be delivered pursuant to
Section 5.01(a) or (b) for the most recent fiscal period (unless the
income of the Subsidiary receiving such dividend or distribution would be
excluded from Consolidated Net Income pursuant to this proviso).


 


“Consolidated Tangible Assets” means, as of any date, the total
assets of the Borrower and the Subsidiaries determined in accordance with GAAP
(less, to the extent not deducted in the determination of total assets,
accumulated depreciation and amortization, allowances for doubtful receivables,
other applicable reserves and other properly deductible items) after giving
effect to purchase accounting and, after deducting therefrom, to the extent
otherwise included, the amounts of (without duplication): (a) the excess
of cost over fair market value of real property; (b) any revaluation or other 


 


11





















 


write-up in book value of assets subsequent to the last day of the
fiscal quarter of the Borrower immediately preceding the Effective Date as a
result of any change in the method of valuation in accordance with GAAP;
(c) unamortized debt discount and expenses and other unamortized deferred
charges, goodwill, patents, trademarks, service marks, trade names, copyrights,
licenses, organization or developmental expenses, Management Services
Agreements and other intangible items; (d) minority interests in
Subsidiaries held by Persons other than the Borrower or any Subsidiary;
(e) treasury stock; (f) cash or securities set aside and held in a
sinking or other analogous fund established for the purpose of redemption or
other retirement of Equity Interests; and (g) investments in (and, for the
avoidance of doubt, assets of) Permitted Joint Ventures.


 


“Control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise.  “Controlling” and “Controlled”
have meanings correlative thereto.


 


“Debt Tender Offer” has the meaning set forth in the preamble to
this Agreement.


 


“Default” means any event or condition that constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.


 


“Disclosed Matters” means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.


 


“dollars” or “$” refers to lawful money of the United
States of America.


 


“Domestic Subsidiary” means any Subsidiary incorporated or
organized under the laws of the United States of America, any State thereof or
the District of Columbia.


 


“Effective Date” means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with
Section 9.02).


 


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


 


“Environmental Liability” means liabilities, obligations,
damages, claims, actions, suits, judgments, orders, fines, penalties, fees,
expenses and costs, (including administrative oversight costs, natural resource
damages and medical monitoring, investigation or remediation costs), whether
contingent or otherwise, arising out of or relating to (a) compliance or
non-compliance with any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous 


 


12





















 


Materials, (c) exposure to any Hazardous Materials, (d) the
Release or threatened Release of any Hazardous Materials or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.


 


“Equity Contribution” has the meaning set forth in the preamble
to this Agreement.


 


“Equity Interests” means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest from the issuer thereof.


 


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


 


“ERISA Affiliate” means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414 of the Code.


 


“ERISA Event” means (a) any “reportable event”, as defined
in Section 4043 of ERISA or the regulations issued thereunder with respect
to a Plan (other than an event for which the 30 day notice period is waived),
(b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of
ERISA), whether or not waived, (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan, (d) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability under Title IV of ERISA with respect to the termination of
any Plan, (e) the receipt by the Borrower or any ERISA Affiliate from the
PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan,
(f) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan or (g) the receipt by the Borrower or any ERISA
Affiliate of any notice, or the receipt by any Multiemployer Plan from the
Borrower or any ERISA Affiliate of any notice, concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.


 


“Eurodollar”, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.


 


“Event of Default” has the meaning assigned to such term in
Section 7.01.


 


13





















 


“Excess Cash Flow” means, for any fiscal year, the sum (without
duplication) of:


 


(a) Consolidated Net Income for such
fiscal year, adjusted to exclude any gains or losses attributable to Prepayment
Events; plus


 


(b) depreciation, amortization and other
non-cash charges or losses (including deferred income taxes) deducted in
determining such Consolidated Net Income for such fiscal year; plus


 


(c) the amount, if any, by which Net
Working Capital decreased during such fiscal year (except as a result of
reclassification of items from short-term to long-term); minus


 


(d) the sum of (i) any non-cash
gains or non-cash items of income included in determining Consolidated Net
Income for such fiscal year plus (ii) the amount, if any, by which Net
Working Capital increased during such fiscal year (except as a result of reclassification
of items from long-term to short-term); minus


 


(e) the sum of (i) Capital
Expenditures actually made by the Borrower and the Subsidiaries for such fiscal
year (except to the extent attributable to the incurrence of Capital Lease
Obligations or otherwise financed by incurring Long-Term Indebtedness) plus
(ii) cash consideration paid during such fiscal year to make acquisitions
(including Permitted Acquisitions) or other capital investments or to make any
investment permitted by clause (xv) or (xvi) of Section 6.04 (except to the
extent financed by incurring Long-Term Indebtedness); minus


 


(f) the aggregate principal amount of
Long-Term Indebtedness repaid or prepaid by the Borrower and its consolidated
Subsidiaries during such fiscal year, excluding (i) Indebtedness in
respect of Revolving Loans and Letters of Credit (unless there is a
corresponding reduction in the aggregate Revolving Commitments),
(ii) Tranche B Term Loans prepaid pursuant to Section 2.11(c) or
(d), and (iii) repayments or prepayments of Long-Term Indebtedness
financed by incurring other Long-Term Indebtedness; minus


 


(g) the amount of Restricted Payments made by
a Loan Party in such fiscal year pursuant to clause (iii) of
Section 6.08(a); minus 


 


(h) cash Taxes paid in such fiscal year
that did not reduce Consolidated Net Income for such fiscal year; minus


 


(i) cash payments made during such
fiscal year in respect of non-cash charges that increased Excess Cash Flow in
any prior fiscal year.


 


“Excluded Taxes” means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder,
(a) income or franchise taxes 


 


14





















 


imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above,
(c) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.19(b)), any withholding tax that
is in effect and would apply to amounts payable to such Foreign Lender at the
time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to any withholding tax pursuant to Section 2.17(a) and (d) any
withholding tax that is attributable to a Foreign Lender’s failure to comply
with Section 2.17(e).


 


“Existing Credit Agreement” has the meaning set forth in the
preamble to this Agreement.


 


“Existing Extension of Credit” has the meaning assigned to such
term in Section 2.20.


 


“Existing Lender” has the meaning assigned to such term in
Section 2.20.


 


“Existing Letter of Credit” means each letter of credit
previously issued for the account of the Borrower pursuant to the Existing
Credit Agreement that (a) is outstanding on the Effective Date and
(b) is listed on Schedule 2.05.


 


“Existing Senior Subordinated Notes” has the meaning set forth
in the preamble to this Agreement.


 


“Existing Senior Subordinated Notes Documents” means the
Existing Senior Subordinated Notes Indenture and all other instruments,
agreements and other documents evidencing or governing the Existing Senior
Subordinated Notes or providing for any Guarantee or other right in respect
thereof.


 


“Existing Senior Subordinated Notes Indenture” has the meaning
set forth in the preamble to this Agreement.


 


“Existing Synthetic Lease Facility” has the meaning set forth in
the preamble to this Agreement.


 


“Federal Funds Effective Rate” means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day that is a Business Day, the average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the quotations for such day
for such transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.


 


15





















 


“Financial Officer” means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.


 


“Financial Performance Covenants” means the covenants of the
Borrower set forth in Sections 6.12 and 6.13.


 


“Foreign Lender” means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located.  For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.


 


“Foreign Subsidiary” means any Subsidiary that is not a Domestic
Subsidiary.


 


“Funded Debt” means, as of any date, the sum of (i) the
aggregate principal amount of Tranche B Term Loans outstanding on such
date, (ii) the aggregate principal amount of the Senior Notes outstanding
on such date, (iii) the aggregate principal amount of the Senior
Subordinated Notes outstanding on such date, (iv) the aggregate principal
amount of the Physician Notes outstanding on such date and (v) the
aggregate principal amount of the Existing Senior Subordinated Notes
outstanding on such date.


 


“GAAP” means generally accepted accounting principles in the
United States of America, as in effect from time to time.


 


“Governmental Authority” means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.


 


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


 


“Guarantee” of or by any Person (the “guarantor”) means
any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party or applicant in respect of any letter of credit
or letter 


 


16





















 


of guaranty issued to support such Indebtedness or obligation, provided
that the term Guarantee shall not include endorsements for collection or
deposit in the ordinary course of business. 
The amount of any Guarantee of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which the Guarantee is made and (b) the
maximum amount for which such guaranteeing person may be liable pursuant to the
terms of the instrument embodying such Guarantee.


 


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


 


“Holdings” means US Oncology Holdings, Inc., a Delaware
corporation.


 


“Inactive Subsidiary” means a Subsidiary that (a) conducts
no business operations, (b) has total assets with a fair market value of
not more than $10,000 and (c) has no Indebtedness outstanding.


 


“Incremental Extensions of Credit” has the meaning set forth in
Section 2.20.


 


“Incremental Facility Amendment” has the meaning set forth in
Section 2.20.


 


“Incremental Facility Closing Date” has the meaning set forth in
Section 2.20.


 


“Indebtedness” of any Person means, without duplication,
(a) all obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all obligations of
others secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, but limited, in the event such secured obligations are
non-recourse to such Person, to the fair value of such property, (g) all
Guarantees by such Person of the obligations of any other Person, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent
or otherwise, of such Person as an account party or applicant in respect of
letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including 


 


17





















 


any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable
therefor.  Notwithstanding the foregoing,
in connection with any Permitted Acquisition, the term “Indebtedness” shall not
include post-closing payment adjustments, earn-outs or non-compete payments to
which the seller in such Permitted Acquisition is or may become entitled.


 


“Indemnified Taxes” means Taxes other than Excluded Taxes.


 


“Information Memorandum” means the Confidential Information
Memorandum dated May, 2004, relating to Holdings, the Borrower and the Transactions.


 


“Insurance Subsidiary” means a wholly owned subsidiary of the
Borrower established for the sole purpose of providing insurance benefits to
the Borrower, the subsidiaries and the Affiliated Practices (including members
of such Affiliated Practices).


 


“Interest Election Request” means a request by the Borrower to
convert or continue a Revolving Borrowing or a Tranche B Term Borrowing in
accordance with Section 2.07, provided that a written Interest
Election Request shall be substantially in the form of Exhibit F, or such
other form as shall be approved by the Administrative Agent.


 


“Interest Payment Date” means (a) with respect to any ABR
Loan (including a Swingline Loan), the last day of each March, June, September
and December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such
Interest Period.


 


“Interest Period” means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter (or nine or twelve months thereafter if, at the time
of the relevant Borrowing, all Lenders participating therein agree to make an
interest period of such duration available), as the Borrower may elect, provided
that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day
and (b) any Interest Period that commences on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.


 


18





















 


“IPO” means a bona fide underwritten initial public offering of
Equity Interests of Holdings after the Effective Date.


 


“Issuing Bank” means (a) JPMorgan Chase Bank and
(b) with respect to the Existing Letters of Credit only, Wachovia Bank,
National Association.  The Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.


 


“LC Disbursement” means a payment made by the Issuing Bank
pursuant to a Letter of Credit.


 


“LC Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet
been reimbursed by or on behalf of the Borrower at such time.  The LC Exposure of any Revolving Lender
at any time shall be its Applicable Percentage of the aggregate
LC Exposure at such time.


 


“Lenders” means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment
and Assumption or an Incremental Facility Amendment, other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Assumption.  Unless the context otherwise requires, the
term “Lenders” includes the Swingline Lender.


 


“Letter of Credit” means (a) any letter of credit issued
pursuant to this Agreement and (b) each Existing Letter of Credit.


 


“Leverage Ratio” means, on any date, the ratio of (a) Total
Indebtedness on such date to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters of the Borrower ended on such date (or, if
such date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter of the Borrower most recently ended prior to such date), provided
that until the expiration of the fifth Business Day subsequent to the date on
which financial statements are required to be delivered pursuant to
Section 5.01 for the fiscal quarter of the Borrower most recently ended,
if (i) Holdings issues Permitted Securities for cash or otherwise receives
a cash contribution from the Sponsor, (ii) such cash is contributed by
Holdings to the Borrower as a cash contribution or in exchange for common
equity of the Borrower and (iii) the Borrower applies such cash to prepay Tranche B
Term Loans pursuant to Section 2.11(a), then such prepayment shall be
deemed to have occurred on the last day of such four-quarter period for
purposes of calculating the Leverage Ratio solely for purposes of
Section 6.13 provided, further that nothing in this proviso
shall cure any Default that may exist until such time as the Tranche B
Term Loans are prepaid as set forth in clause (iii) above.


 


“LIBO Rate” means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Dow Jones
Market Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such 


 


19





















 


page of such Service, as determined by the Administrative Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately
11:00 a.m., London time, two Business Days prior to the commencement of
such Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period.  In
the event that such rate is not available at such time for any reason, then the
“LIBO Rate” with respect to such Eurodollar Borrowing for such Interest
Period shall be the rate at which dollar deposits for a comparable amount and
for a maturity comparable to such Interest Period are offered by the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two
Business Days prior to the commencement of such Interest Period.


 


“Lien” means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset or other arrangement to provide priority or
preference with respect to such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party (other
than customary rights of first refusal and tag, drag and similar rights in
joint venture agreements (other than any such agreement in respect of any
Subsidiary or any Permitted Real Estate Joint Venture)) with respect to such
securities.


 


“Limitation” means a revocation, suspension, termination,
impairment, probation, limitation, nonrenewal, forfeiture, declaration of
ineligibility, loss of status as a participating provider in any Third Party
Payor Arrangement, and the loss of any other rights.


 


“Loan Documents” means this Agreement, the promissory notes, if
any, executed and delivered pursuant to Section 2.09(e), any Incremental
Facility Amendment, the Collateral Agreement and the other Security Documents.


 


“Loan Parties” means Holdings, the Borrower and the Subsidiary
Loan Parties.


 


“Loans” means the loans made by the Lenders to the Borrower
pursuant to this Agreement or an Incremental Facility Amendment.


 


“Long-Term Indebtedness” means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.


 


“Management Services Agreement” means any agreement (including
any amendment, supplement, modification, extension, renewal, substitution or
replacement thereof) between the Borrower or any Subsidiary and any Affiliated
Practice or any owner, member or employee of an Affiliated Practice pursuant to
which the Borrower or Subsidiary provides services to physicians or physician
practices, including management 


 


20





















 


and financial services, medical oncology services, cancer care centers
and cancer research services.


 


“Material Adverse Effect” means a material adverse effect on
(a) the business, operations, assets, liabilities, financial condition or
results of operations of Holdings, the Borrower and the Subsidiaries, taken as
a whole, (b) the ability of any Loan Party to perform any material
obligation under any Loan Document or (c) the rights of or benefits
available to the Lenders under any Loan Document.


 


“Material Disposition” means the sale by the Borrower or any
Subsidiary of assets (including the capital stock of a Subsidiary or a business
unit) for aggregate consideration (including amounts received in connection
with post-closing payment adjustments, earn-outs and noncompete payments) of at
least $10,000,000.


 


“Material Indebtedness” means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Swap
Agreements, of any one or more of Holdings, the Borrower and the Subsidiaries
in an aggregate principal amount exceeding $15,000,000.  For purposes of determining Material
Indebtedness, the “principal amount” of the obligations of the Borrower or any
Subsidiary in respect of any Swap Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that the Borrower or
such Subsidiary would be required to pay if such Swap Agreement were terminated
at such time.


 


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


 


“Merger” has the meaning set forth in the preamble to this
Agreement.


 


“Merger Agreement” has the meaning set forth in the preamble to
this Agreement.


 


“MergerCo” has the meaning set forth in the preamble to this
Agreement.


 


“Merger Consideration” has the meaning set forth in the preamble
to this Agreement.


 


“Moody’s” means Moody’s Investors Service, Inc.


 


“Mortgage” means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. 
Each Mortgage shall be reasonably satisfactory in form and substance to
the Collateral Agent.


 


“Mortgaged Property” means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on
Schedule 1.01 and includes each other parcel of real property owned by a
Loan Party and improvements thereto with respect to which a Mortgage is granted
pursuant to Section 5.12 or 5.13.


 


21





















 


“Multiemployer Plan” means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.


 


“Net Proceeds” means, with respect to any event, (a) the
cash proceeds received in respect of such event including (i) any cash
received in respect of any non-cash proceeds (including any cash payments
received by way of deferred payment of principal pursuant to a note or
installment receivable or purchase price adjustment receivable or otherwise,
but excluding any interest payments), but only as and when received,
(ii) in the case of a casualty, insurance proceeds and (iii) in the
case of a condemnation or similar event, condemnation awards and similar payments,
net of (b) the sum of (i) all reasonable fees and out-of-pocket
expenses paid to third parties (other than Affiliates) in connection with such
event, (ii) in the case of a sale, transfer or other disposition of an
asset (including pursuant to a sale and leaseback transaction or a casualty or
a condemnation or similar proceeding), the amount of all payments required to
be made as a result of such event to repay Indebtedness (other than Loans)
secured by such asset or otherwise subject to mandatory prepayment as a result
of such event and (iii) the amount of all taxes paid (or reasonably
estimated to be payable) and the amount of any reserves established to fund
liabilities reasonably estimated to be payable, in each case during the year
that such event occurred or the next succeeding year and that are directly
attributable to such event (as determined reasonably and in good faith by a
Financial Officer), provided that no net proceeds calculated in
accordance with the foregoing of less than $500,000 realized in a single
transaction or series of related transactions shall constitute Net Proceeds.


 


“Net Working Capital” means, at any date, (a) the
consolidated current assets of the Borrower and the Subsidiaries as of such
date (excluding cash, Permitted Investments) minus (b) the consolidated
current liabilities of the Borrower and the Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness).  Net Working Capital at any date may be a
positive or negative number.  Net Working
Capital increases when it becomes more positive or less negative and decreases
when it becomes less positive or more negative.


 


“Notes Documents” means the Senior Notes Documents and the
Senior Subordinated Notes Documents.


 


“Obligations” has the meaning assigned to such term in the
Collateral Agreement.


 


“Other Taxes” means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies of the United States or any political subdivision thereof arising
from any payment made under any Loan Document or from the execution, delivery
or enforcement of, or from the filing or recording of or otherwise with respect
to the exercise by the Administrative Agent of the Lender of their rights
under, any Loan Document.


 


“Participant” has the meaning set forth in Section 9.04.


 


22





















 


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


 


“Perfection Certificate” means a certificate in the form of
Exhibit D or any other form approved by the Collateral Agent.


 


“Permitted Acquisitions” means any acquisition by the Borrower
or any  wholly owned Subsidiary Loan
Party of all the outstanding Equity Interests (other than directors’ qualifying
shares) in, all or substantially all the assets of, or all or substantially all
the assets constituting a division or line of business of, a Person if
(a) such acquisition was not preceded by, or consummated pursuant to, a
hostile offer (including a proxy contest), (b) such Person is organized
under the laws of, and substantially all of its assets are located in, the
United States of America, any State thereof or the District of Columbia,
(c) no Default has occurred and is continuing or would result therefrom,
(d) after giving effect to such acquisition, there shall be at least
$35,000,000 of aggregate unused and available Revolving Commitments,
(e) such acquisition and all transactions related thereto are consummated
in accordance with all applicable laws, (f) all actions required to be
taken with respect to such acquired or newly formed Subsidiary or assets under
Sections 5.12 and 5.13 shall have been taken (or shall be taken promptly
thereafter), (g) the Borrower and the Subsidiaries are in compliance on a
Pro Forma Basis with the Financial Performance Covenants recomputed as of the
last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, (h) the business of such Person or
such assets, as applicable, constitute a business permitted by
Section 6.03(b) and (i) the Borrower has delivered to the
Administrative Agent an officer’s certificate to the effect set forth in
clauses (a), (b), (c), (d), (e), (f), (g) and (h) above, together with all
relevant financial information for the Person or assets to be acquired.


 


“Permitted Encumbrances” means:


 


(a) Liens imposed by law for taxes that
are not yet due or are being contested in compliance with Section 5.05;


 


(b) carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law,
arising in the ordinary course of business and securing obligations that are
not overdue by more than 30 days or are being contested in compliance with
Section 5.05;


 


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


 


(d) deposits to secure the performance
of bids, trade contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature;


 


(e) judgment liens in respect of
judgments that do not constitute an Event of Default under paragraph (k)
of Section 7.01;


 


23





















 


(f) easements, zoning restrictions,
rights-of-way, minor defects or irregularities of title and other similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not either
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary, in each case in any
material respect; and


 


(g) landlords’ and lessors’ and other
like Liens in respect of rent not in default,


 


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


 


“Permitted Hospital Joint Venture” means any investment by which
the Borrower or any Subsidiary Loan Party acquires at least 30% but not more
than 80% of the Equity Interests of any Person, provided that the
primary business of such Person is to own, lease, operate or provide medical
oncology services, cancer center services, cancer research services or any
related services to a hospital or other healthcare facility.


 


“Permitted Investments” means:


 


(a) direct obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States of America (or by any agency thereof to the
extent such obligations are backed by the full faith and credit of the United
States of America), in each case maturing within one year from the date of
acquisition thereof;


 


(b) investments in commercial paper
maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, a credit rating from S&P or Moody’s of at least
A2 or P2, respectively;


 


(c) investments in certificates of
deposit, banker’s acceptances and time deposits maturing within 180 days from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof that has a combined capital and surplus and undivided profits of
not less than $500,000,000;


 


(d) fully collateralized repurchase
agreements with a term of not more than 30 days for securities described
in clause (a) above and entered into with a financial institution satisfying
the criteria described in clause (c) above; and


 


(e) investments in money market funds
that comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company Act of 1940, as amended, substantially all of whose assets
are invested in investments of the type described in clauses (a) through
(d) above.


 


“Permitted Investors” means the Sponsor and any Sponsor
Affiliate.


 


24





















 


“Permitted Joint Venture” means any Permitted Hospital Joint Venture
and any Permitted Real Estate Joint Venture.


 


“Permitted Real Estate Joint Venture” means any investment by
which the Borrower or any Subsidiary Loan Party acquires at least 51% but not
more than 80% of the Equity Interests of any Person that owns real property
used in cancer care services by the Borrower, any Subsidiary or any Affiliated
Practice, provided that (a) any Equity Interests of such Permitted
Real Estate Joint Venture not owned by the Borrower or any Subsidiary Loan
Party are purchased for cash consideration by one or more physicians who are
owners, members or employees of such Affiliated Practice, (b) such
Permitted Real Estate Joint Venture is not engaged in any business or activity
other than the ownership of such real property and activities incidental
thereto (which activities may not include operating or providing medical
oncology services, cancer center services or cancer research services),
(c) such Permitted Real Estate Joint Venture shall incur no Indebtedness
other than Indebtedness incurred to finance the acquisition of the property
from the Borrower or the Subsidiary and extensions, renewals and replacements
of any such Indebtedness that do not increase the outstanding principal amount
thereof (including the principal and any accrued but unpaid interest or premium
in respect thereof) and (d) solely in the case of any Permitted Real Estate
Joint Venture that acquires property from the Borrower or any Subsidiary
pursuant to clauses (i) or (j) of Section 6.05, if at the time of such transfer,
the Permitted Real Estate Joint Venture incurs no Indebtedness from a Person
other than the Borrower or any Subsidiary Loan Party, at least 35% of the
Equity Interests of the Permitted Real Estate Joint Venture shall be owned by
one or more physicians who are owners, members or employees of such Affiliated
Practice.


 


 “Permitted Security”
means (a) common stock of Holdings or (b) Qualified Preferred Stock,
in each case (i) (x) issued to the Permitted Investors for cash or (y)
issued to any other Person that makes an equity investment in Holdings in
connection with the Transactions and (ii) the proceeds of which are
contributed by Holdings to the Borrower in exchange for common stock or as a
capital contribution.


 


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


 


“Physician Equity Offering” means any issuance by Holdings of
its common stock to physicians who are parties to a Management Services
Agreement, or who are owners or members of or are employed by a physician
practice entity that is a party to a Management Services Agreement, in each
case at the time of such offering, or any employee or consultant of Holdings,
the Borrower or any Subsidiary at the time of such offering, provided
that (a) such offering shall be consummated not later than 180 days
following the Effective Date and (b) any proceeds not applied as permitted
in Section 6.08(a)(vii) shall be contributed to the Borrower as common
equity.


 


“Physician Notes” mean the notes issued by the Borrower to
physicians in connection with a Management Services Agreement and listed on
Schedule 3.16.


 


25





















 


“Plan” means any employee pension benefit plan subject to the
provisions of Title IV or Section 302 of ERISA or Section 412 of
the Code, and in respect of which the Borrower or any ERISA Affiliate is (or,
if such plan were terminated, would under Section 4069 of ERISA be deemed
to be) an “employer” as defined in Section 3(5) of ERISA.


 


“PPM Asset Disposition” means the sale of assets to any
Affiliated Practice that is a party to a Management Services Agreement pursuant
to the requirements set forth in or in connection with the termination of the
applicable Management Services Agreement in effect on the Effective Date.


 


“Prepayment Event” means:


 


(a) any sale, transfer or other
disposition (excluding pursuant to a sale and leaseback transaction permitted
under Section 6.06) of any property or asset of Holdings, the Borrower or
any Subsidiary, other than dispositions described in clauses (a), (b),
(c), (d), (i), (j) and (k) of Section 6.05; or


 


(b) any casualty or other insured damage
to, or any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of Holdings, the Borrower or any
Subsidiary with a fair value immediately prior to such event equal to or
greater than $1,000,000; or


 


(c) the issuance by Holdings, the
Borrower or any Subsidiary of any Equity Interests, or the receipt by Holdings,
the Borrower or any Subsidiary of any capital contribution, other than
(i) any Physician Equity Offering (ii) Permitted Securities or
(iii) any issuance by the Borrower or any Subsidiary of common Equity
Interests to, or receipt of any such capital contribution from, Holdings, the
Borrower or any other Subsidiary; or


 


(d) the incurrence by Holdings, the
Borrower or any Subsidiary of any Indebtedness, other than Indebtedness
permitted under Section 6.01 (other than 6.01(a)(xiii)) or permitted by
the Required Lenders pursuant to Section 9.02;


 


(e) 
any sale, transfer or other disposition of real property of the Borrower
or any Subsidiary described in (i) clause (i) of Section 6.05 and
(ii) clause (j) of Section 6.05;


 


(f) the repayment of any Indebtedness owed to
the Borrower or any Subsidiary by any Permitted Real Estate Joint Venture with
the proceeds of any Indebtedness owed to any other Person, to the extent that
such Indebtedness owed to the Borrower or such Subsidiary constituted
consideration for any sale, transfer or other disposition of real property
described in (i) clause (i) of Section 6.05 and (ii) clause (j) of Section
6.05.


 


“Prime Rate” means the rate of interest per annum publicly
announced from time to time by JPMorgan Chase Bank as its prime rate in effect
for dollars at its 


 


26





















 


principal office in New York City; each change in the Prime Rate
shall be effective from and including the date such change is publicly
announced as being effective.


 


“Pro Forma Adjusted EBITDA” means Consolidated EBITDA, as
adjusted (a) in accordance with Article XI of Regulation S-X
under the Securities Act of 1933, as amended, as interpreted by the SEC and
(b) to give effect to all changes and proposed changes to reimbursement
amounts that will be applicable on and after January 1, 2005 (or, if
later, after giving effect to any phase-in period for such changes and proposed
changes), as determined in a manner consistent with the statements in the
Borrower’s 10-K for fiscal year 2003 regarding the effect of such changes on
its Consolidated EBITDA for fiscal year 2003.


 


“Pro Forma Basis” means, with respect to the calculation of a
Financial Performance Covenant in connection with (a) a Permitted
Acquisition or (b) any issuance, incurrence or assumption of Indebtedness, that
such calculation shall give pro forma effect to such Permitted Acquisition, or
issuance, incurrence or assumption of Indebtedness, and all other Permitted
Acquisitions and issuances, incurrences or assumptions of debt and all Material
Dispositions that have occurred since the beginning of the four consecutive
fiscal quarters period for which such calculation is being made as if it
occurred on the first day of such four consecutive fiscal quarter period
(including cost savings to the extent such cost savings would be permitted to
be reflected in pro forma financial information complying with the requirements
of GAAP and Article XI of Regulation S-X under the Securities Act of
1933, as amended, as interpreted by the Staff of the SEC, and as certified by a
Financial Officer).


 


“Qualified Preferred Stock” means preferred stock of Holdings
that (a) does not require the payment of cash dividends, (b) is not
mandatorily redeemable pursuant to a sinking fund obligation or otherwise prior
to the date that is 180 days after the Tranche B Maturity Date (other
than upon an event of default or change in control, provided that any
such payment is subordinated (whether by contract or pursuant to the Holdings
charter or the certificate of designation of such preferred stock) in right of
payment to the Obligations on the terms set forth in the certificate of
incorporation of Holdings in existence on the Effective Date or such other
terms reasonably satisfactory to the Administrative Agent), (c) contains
no maintenance covenants, other covenants materially adverse to the Lenders or
remedies (other than voting rights) and (d) is convertible only into
common equity of Holdings or securities that would constitute Qualified
Preferred Stock.


 


“Qualified Sponsor Notes” means Indebtedness issued by Holdings
to the Permitted Investors for cash consideration that (a) does not
require any payment of principal prior to the date that is 180 days after
the Tranche B Maturity Date, (b) does not require any payment of cash
interest prior to the date that is 180 days after the Tranche B Maturity Date
other than, on or after the date that is five years after the date of issuance
of the applicable Qualified Senior Notes, payments by Holdings permitted by
clause (ix) of Section 6.08(a), (c) is not mandatorily redeemable
pursuant to a sinking fund obligation or otherwise prior to the date that is
180 days after the Tranche B Maturity Date (other than upon an Event of
Default or Change in Control, provided that any such 


 


27





















 


payment is contractually subordinated in right of payment to the
Obligations on the terms set forth in Exhibit G or such other terms
reasonably acceptable to the Administrative Agent), (d) contains no
maintenance covenants, other covenants materially adverse to the Lenders or
remedies (other than voting rights), (e) is contractually subordinated is
right of payment to the Obligations on terms reasonably acceptable to the
Administrative Agent and (f) is not supported by any Guarantee, provided
that (i) the Borrower and the Subsidiaries are in compliance on a Pro
Forma Basis with the Financial Performance Covenants recomputed as of the last
day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available and (ii) the Borrower has delivered to
the Administrative Agent an officer’s certificate to such effect, together with
all relevant financial information reasonably requested by the Administrative
Agent.


 


“Register” has the meaning set forth in Section 9.04.


 


“Reimbursement Approvals” means, with respect to all Government
Programs, any and all certifications, provider numbers, provider agreements,
participation agreements, accreditations and any other similar agreements with
or approvals by any Governmental Authority or other Person.


 


“Related Parties” means, with respect to any specified Person,
such Person’s Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person’s Affiliates.


 


“Release” means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.


 


“Required Lenders” means, at any time, Lenders having Revolving
Exposures, Tranche B Term Loans, Loans in respect of Incremental
Extensions of Credit, if any, and unused Commitments representing more than 50%
of the aggregate Revolving Exposures, outstanding Tranche B Term Loans,
outstanding Loans in respect of Incremental Extensions of Credit, if any, and
unused Commitments at such time.


 


“Requirement of Law” means, with respect to any Person,
(i) the charter, articles or certificate of organization or incorporation
and bylaws or other organizational or governing documents of such Person and
(ii) any statute, law, treaty, rule, regulation, order, decree, writ,
injunction or determination of any arbitrator or court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.


 


“Restricted Payment” means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Equity Interests in Holdings, the Borrower or
any Subsidiary or any option, warrant or other right to acquire any such Equity
Interests in Holdings, the Borrower or any Subsidiary.


 


28


















 


“Revolving Availability Period” means the period from and
including the Effective Date to but excluding the earlier of (a) the
Revolving Maturity Date and (b) the date of termination of the Revolving
Commitments.


 


“Revolving Commitment” means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum possible aggregate amount of such Lender’s Revolving
Exposure hereunder, as such commitment may be (a) reduced from time to
time pursuant to Section 2.08 and (b) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to
Section 9.04.  The initial amount of
each Lender’s Revolving Commitment is set forth on Schedule 2.01, or in
the Assignment and Assumption pursuant to which such Lender shall have assumed
its Revolving Commitment, as applicable. 
The initial aggregate amount of the Lenders’ Revolving Commitments is
$160,000,000.


 


“Revolving Exposure” means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender’s Revolving
Loans and its LC Exposure and Swingline Exposure at such time.


 


“Revolving Lender” means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.


 


“Revolving Loan” means a Loan made pursuant to clause (b)
of Section 2.01.


 


“Revolving Maturity Date” means August 20, 2010.


 


“S&P” means Standard & Poor’s Ratings Group, Inc.


 


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


 


“Scheduled Payment Date” has the meaning set forth in
Section 2.10.


 


“Security Documents” means the Collateral Agreement, the
Mortgages and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.13 to secure any of
the Obligations.


 


“Senior Notes” means the Senior Notes due 2012 to be issued by
the Borrower on or prior to the Effective Date in an initial aggregate
principal amount of $300,000,000 and the Indebtedness represented thereby.


 


“Senior Notes Documents” means the indenture dated as of August
20, 2004, among the Borrower, the Subsidiaries listed therein and LaSalle Bank
National Association, as trustee, in respect of the Senior Notes and all other
instruments,


 


29





















 


agreements and other documents evidencing or governing the Senior Notes
or providing for any Guarantee or other right in respect thereof.


 


“Senior Subordinated Notes” means the Senior Subordinated Notes
due 2014 to be issued by the Borrower on or prior to the Effective Date in the
aggregate principal amount of $275,000,000 and the Indebtedness represented
thereby.


 


“Senior Subordinated Notes Documents” means the indenture dated
as of August 20, 2004, among the Borrower, the Subsidiaries listed therein and
LaSalle Bank National Association, as trustee, in respect of the Senior
Subordinated Notes and all other instruments, agreements and other documents
evidencing or governing the Senior Subordinated Notes or providing for any
Guarantee or other right in respect thereof.


 


“Sponsor” has the meaning set forth in the preamble to this
Agreement.


 


“Sponsor Affiliate” means (i) each Affiliate of the Sponsor
that is neither an operating company nor a company controlled by an operating
company, (ii) each partner, officer, director, principal or member of the
Sponsor or any Sponsor Affiliate and (iii) any spouse, parent or lineal
descendant (including by adoption) of any of the foregoing who are natural
persons and any trust for the benefit of such persons.


 


“Statutory Reserve Rate” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the bank serving as the
Administrative Agent is subject with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board).  Such
reserve percentages shall include those imposed pursuant to such
Regulation D.  Eurodollar Loans
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. 
The Statutory Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.


 


“subsidiary” means, with respect to any Person (the “parent”)
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent’s consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held.


 


“Subsidiary” means any subsidiary of the Borrower, other than
(a) any Permitted Joint Venture, (b) any Inactive Subsidiary and
(c) any Insurance Subsidiary.


 


30





















 


“Subsidiary Loan Party” means any Domestic Subsidiary.


 


“Supermajority Lenders” means Lenders having Revolving
Exposures, Tranche B Term Loans, Loans in respect of Incremental
Extensions of Credit, if any, and unused Commitments representing more than 75%
of the aggregate Revolving Exposures, outstanding Tranche B Term Loans,
outstanding Loans in respect of Incremental Extensions of Credit, if any, and
unused Commitments at such time.


 


“Swap Agreement” means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions, provided
that no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.


 


“Swingline Exposure” means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Lender at any
time shall be its Applicable Percentage of the aggregate Swingline Exposure at
such time.


 


“Swingline Lender” means JPMorgan Chase Bank, in its capacity as
lender of Swingline Loans hereunder.


 


“Swingline Loan” means a Loan made pursuant to
Section 2.04.


 


“Syndication Agent” means Wachovia Bank, National Association.


 


“Taxes” means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.


 


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


 


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


 


“Total Indebtedness” means, as of any date, the sum of
(a) the aggregate principal amount of Indebtedness of the Borrower and the
Subsidiaries outstanding as of such date, in the amount that would be reflected
on a balance sheet prepared as of such date on a consolidated basis in
accordance with GAAP, plus (b) the aggregate principal amount of
Indebtedness of the Borrower and the Subsidiaries outstanding as of such date 


 


31





















 


that is not required to be reflected on a balance sheet in accordance
with GAAP, determined on a consolidated basis, provided that for
purposes of clause (b) above, the term “Indebtedness” shall not include
Guarantees or contingent obligations of the Borrower or any Subsidiary as an
account party or applicant in respect of any letter of credit or letter of
guaranty unless such Guarantee or letter of credit or letter of guaranty
supports an obligation that constitutes Indebtedness.


 


“Tranche B Commitment” means, with respect to each Lender,
the commitment, if any, of such Lender to make a Tranche B Term Loan
hereunder on the Effective Date, expressed as an amount representing the
maximum principal amount of the Tranche B Term Loan to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.08 and (b) reduced or increased from time to
time pursuant to assignments by or to such Lender pursuant to
Section 9.04.  The initial amount of
each Lender’s Tranche B Commitment is set forth on Schedule 2.01, or
in the Assignment and Assumption pursuant to which such Lender shall have
assumed its Tranche B Commitment, as applicable.  The initial aggregate amount of the Lenders’
Tranche B Commitments is $400,000,000.


 


“Tranche B Lender” means a Lender with a Tranche B
Commitment or an outstanding Tranche B Term Loan.


 


“Tranche B Maturity Date” means August 20, 2011.


 


“Tranche B Term Loan” means a Loan made pursuant to
clause (a) of Section 2.01.


 


“Transactions” means (a) the Merger and the other
transactions contemplated by the Acquisition Documents, (b) the Equity
Contribution, (c) the repayment in full of all obligations under the
Existing Synthetic Lease Facility and the termination thereof, (d) the
consummation of the Debt Tender Offer, (e) the repayment in full of all
obligations under the Existing Credit Agreement, the termination of all
commitments thereunder and the release of all liens in respect thereof,
(f) the execution, delivery and performance by each Loan Party of the Loan
Documents to which it is to be a party, the borrowing of Loans, the use of the
proceeds thereof and the issuance of Letters of Credit hereunder, (g) the
execution, delivery and performance by each Loan Party of the Notes Documents
to which it is to be a party, the issuance of the Senior Notes and the Senior
Subordinated Notes and the use of the proceeds thereof and (h) payment of
the Transaction Costs.


 


“Transaction Costs” has the meaning set forth in the preamble to
this Agreement.


 


“Type”, when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.


 


32





















 


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


 


SECTION 1.02. Classification
of Loans and Borrowings.  For
purposes of this Agreement, Loans may be classified and referred to by Class (e.g.,
a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class
and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and
referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g.,
a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar
Revolving Borrowing”).


 


SECTION 1.03.  Terms
Generally.  The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined.  Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms.  The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase
“without limitation”.  The word “will”
shall be construed to have the same meaning and effect as the word
“shall”.  Unless the context requires
otherwise (a) any definition of or reference to any agreement, instrument
or other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the
words “herein”, “hereof” and “hereunder”, and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset”
and “property” shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.


 


SECTION 1.04.  Accounting
Terms; GAAP.  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, provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision (including any definition) hereof to
eliminate the effect of any change occurring after the date hereof in GAAP or
in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.


 


33





















 


ARTICLE II


 


The Credits


 


SECTION 2.01.  Commitments.  Subject to the terms and conditions set forth
herein, each Lender agrees (a) to make a Tranche B Term Loan to the
Borrower on the Effective Date in a principal amount not exceeding its
Tranche B Commitment and (b) to make Revolving Loans to the Borrower
from time to time during the Revolving Availability Period in an aggregate
principal amount that will not result in such Lender’s Revolving Exposure
exceeding such Lender’s Revolving Commitment. 
Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Revolving
Loans.  Amounts repaid or prepaid in
respect of Tranche B Term Loans may not be reborrowed.


 


SECTION 2.02. Loans
and Borrowings.  (a)  Each Loan (other than a Swingline Loan) shall
be made as part of a Borrowing consisting of Loans of the same Class and Type
made by the Lenders ratably in accordance with their respective Commitments of
the applicable Class.  The failure of any
Lender to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder, provided that the Commitments of
the Lenders are several and no Lender shall be responsible for any other
Lender’s failure to make Loans as required.


 


(b)  Subject to
Section 2.14, each Revolving Borrowing and Tranche B Term Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower
may request in accordance herewith, provided that all Borrowings made on
the Effective Date must be made as ABR Borrowings.  Each Swingline Loan shall be an ABR
Loan.  Each Lender at its option may make
any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan, provided that any exercise of such option
shall not affect the obligation of the Borrower to repay such Loan in
accordance with the terms of this Agreement.


 


(c)  At the commencement of each
Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an
aggregate amount that is an integral multiple of $500,000 and not less than
$2,000,000.  At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $1,000,000.  Borrowings of more than one Type and Class
may be outstanding at the same time. 
There shall not at any time be more than a total of 20 Eurodollar
Borrowings outstanding.  Notwithstanding
anything to the contrary herein, an ABR Revolving Borrowing or Swingline Loan
may be in an aggregate amount (i) that is equal to the entire unused
balance of the aggregate Revolving Commitments or (ii) that is required to
finance the reimbursement of an LC Disbursement as contemplated by
Section 2.05(e).


 


(d)  Notwithstanding any other
provision of this Agreement, the Borrower shall not be entitled to request, or
to elect to convert or continue, any Borrowing if the Interest Period requested
with respect thereto would end after the Revolving Maturity Date or the Tranche
B Maturity Date, as applicable.


 


34





















 


SECTION 2.03. Requests
for Borrowings.  To request a
Revolving Borrowing or Tranche B Term Borrowing, the Borrower shall notify
the Administrative Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time,
three Business Days before the date of the proposed Borrowing or (b) in
the case of an ABR Borrowing, not later than 12:00 noon, New York
City time, one Business Day before the date of the proposed Borrowing, provided
that any such notice of an ABR Revolving Borrowing to finance the reimbursement
of an LC Disbursement as contemplated by Section 2.05(e) may be given not
later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing.  Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
signed by the Borrower.  Each such
telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:


 


(i) 
whether the requested Borrowing is to be a Revolving Borrowing or a
Tranche B Term Borrowing;


 


(ii) 
the aggregate amount of such Borrowing;


 


(iii) 
the date of such Borrowing, which shall be a Business Day;


 


(iv) 
whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;


 


(v)  in
the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of
the term “Interest Period”; and


 


(vi) 
the location and number of the Borrower’s account to which funds are to
be disbursed, which shall comply with the requirements of Section 2.06.


 


If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. 
If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. 
Promptly following receipt of a Borrowing Request in accordance with
this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the
requested Borrowing.


 


SECTION 2.04. Swingline
Loans.  (a)  Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrower
from time to time during the Revolving Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding $10,000,000
or (ii) the aggregate Revolving Exposures exceeding the aggregate
Revolving Commitments, provided that the Swingline Lender shall not be
required to make a Swingline Loan to refinance an outstanding 


 


35





















 


Swingline
Loan.  Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Swingline Loans.


 


(b)  To request a Swingline Loan,
the Borrower shall notify the Administrative Agent of such request by telephone
(confirmed by telecopy), not later than 2:00 p.m., New York City
time, on the day of a proposed Swingline Loan. 
Each such notice shall be irrevocable and shall specify the requested
date (which shall be a Business Day) and amount of the requested Swingline
Loan.  The Administrative Agent will
promptly advise the Swingline Lender of any such notice received from the
Borrower.  The Swingline Lender shall
make each Swingline Loan available to the Borrower by means of a credit to the
general deposit account of the Borrower maintained with the Swingline Lender
(or, in the case of a Swingline Loan made to finance the reimbursement of an
LC Disbursement as provided in Section 2.05(e), by remittance to the
Issuing Bank) by 3:00 p.m., New York City time, on the requested date
of such Swingline Loan.


 


(c)  The Swingline Lender may by
written notice given to the Administrative Agent not later than
12:00 noon, New York City time, on any Business Day require the
Revolving Lenders to acquire participations on such Business Day in all or a
portion of the Swingline Loans outstanding. 
Such notice shall specify the aggregate amount of Swingline Loans in
which Revolving Lenders will participate. 
Promptly upon receipt of such notice, the Administrative Agent will give
notice thereof to each Revolving Lender, specifying in such notice such
Lender’s Applicable Percentage of such Swingline Loan or Swingline Loans.  Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s
Applicable Percentage of such Swingline Loan or Swingline Loans.  Each Revolving Lender acknowledges and agrees
that its obligation to acquire participations in Swingline Loans pursuant to
this paragraph is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including the occurrence and continuance of a Default
or reduction or termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.  Each Revolving Lender shall
comply with its obligation under this paragraph by wire transfer of immediately
available funds, in the same manner as provided in Section 2.06 with
respect to Loans made by such Lender (and Section 2.06 shall apply, mutatis
mutandis, to the payment obligations of the Revolving Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so
received by it from the Revolving Lenders. 
The Administrative Agent shall notify the Borrower of any participations
in any Swingline Loan acquired pursuant to this paragraph, and thereafter
payments in respect of such Swingline Loan shall be made to the Administrative
Agent and not to the Swingline Lender. 
Any amounts received by the Swingline Lender from the Borrower (or other
party on behalf of the Borrower) in respect of a Swingline Loan after receipt
by the Swingline Lender of the proceeds of a sale of participations therein
shall be promptly remitted to the Administrative Agent; any such amounts
received by the Administrative Agent shall be promptly remitted by the
Administrative Agent to the Revolving Lenders that shall have made their
payments pursuant to this paragraph and to the Swingline Lender, as their
interests may appear, provided that any such payment so remitted shall 


 


36





















 


be repaid to the Swingline
Lender or to the Administrative Agent, as applicable, if and to the extent such
payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline
Loan pursuant to this paragraph shall not relieve the Borrower of any default
in the payment thereof.


 


SECTION 2.05. Letters
of Credit.  (a)  General.  Upon satisfaction of the conditions specified
in Section 4.01 on the Effective Date, each Existing Letter of Credit
will, automatically and without any action on the part of any Person, be deemed
to be a Letter of Credit issued hereunder for all purposes of this Agreement
and the other Loan Documents.  In
addition, subject to the terms and conditions set forth herein, the Borrower
may request the issuance of additional Letters of Credit for its own account
(or for the account of any of its subsidiaries so long as the Borrower is a
co-applicant), in a form reasonably acceptable to the Administrative Agent and
the Issuing Bank, at any time and from time to time during the Revolving
Availability Period.  In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.


 


(b)  Notice of Issuance,
Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of Credit),
the Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank (except that the Issuing Bank in respect of Existing
Letters of Credit shall not issue additional Letters of Credit and shall not be
required to renew or extend an Existing Letter of Credit unless agreed by it)
and the Administrative Agent (reasonably in advance of the requested date of
issuance, amendment, renewal or extension) a notice requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such Letter of
Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit.  If requested by the Issuing Bank, the
Borrower also shall submit a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of Credit.  A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension
(i) the LC Exposure shall not exceed $25,000,000 and (ii) the
aggregate Revolving Exposures shall not exceed the aggregate Revolving
Commitments.


 


(c)  Expiration Date.  Each Letter of Credit shall expire at or
prior to the close of business on the earlier of (i) the date that is one
year after the date of the issuance of such Letter of Credit (or, in the case
of any renewal or extension thereof, one year after such renewal or extension)
and (ii) the date that is five Business Days prior to the Revolving
Maturity Date.


 


37





















 


(d)  Participations.  By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender’s Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit.  In
consideration and in furtherance of the foregoing, each Revolving Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender’s Applicable Percentage of each
LC Disbursement made by the Issuing Bank and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section, or
of any reimbursement payment required to be refunded to the Borrower for any
reason.  Each Revolving Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever.


 


(e)  Reimbursement.  If the Issuing Bank shall make any
LC Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent an
amount equal to such LC Disbursement not later than 3:00 p.m.,
New York City time, on the date that such LC Disbursement is made, if
the Borrower shall have received notice of such LC Disbursement prior to
10:00 a.m., New York City time, on such date, or, if such notice has
not been received by the Borrower prior to such time on such date, then not later
than (i) 3:00 p.m., New York City time, on the Business Day that
the Borrower receives such notice, if such notice is received prior to
10:00 a.m., New York City time on the day of receipt, or
(ii) 3:00 p.m., New York City time, on the Business Day immediately
following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt, provided that the
Borrower may, subject to the conditions to borrowing set forth herein, request
in accordance with Section 2.03 or 2.04 that such payment be financed with
an ABR Revolving Borrowing or Swingline Loan in an equivalent amount and, to
the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline
Loan.  If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Revolving Lender
of the applicable LC Disbursement, the payment then due from the Borrower
in respect thereof and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice,
each Revolving Lender shall pay to the Administrative Agent its Applicable
Percentage of the payment then due from the Borrower, in the same manner as
provided in Section 2.06 with respect to Loans made by such Lender (and
Section 2.06 shall apply, mutatis  mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Issuing Bank the amounts so received by it from the Revolving
Lenders.  Promptly following receipt by
the Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to the
Issuing Bank or, to the extent that Revolving Lenders have made payments
pursuant to 


 


38





















 


this paragraph to reimburse the
Issuing Bank, then to such Lenders and the Issuing Bank as their interests may
appear.  Any payment made by a Revolving
Lender pursuant to this paragraph to reimburse the Issuing Bank for any
LC Disbursement (other than the funding of ABR Revolving Loans or a
Swingline Loan as contemplated above) shall not constitute a Loan and shall not
relieve the Borrower of its obligation to reimburse such LC Disbursement.


 


(f)  Obligations Absolute.  The Borrower’s obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall
be absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement under any and all circumstances
whatsoever and irrespective of (i) any lack of validity or enforceability
of any Letter of Credit or this Agreement, or any term or provision therein,
(ii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Bank under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit, or
(iv) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. 
Neither the Administrative Agent, the Lenders nor the Issuing Bank, nor
any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of
Credit or any payment or failure to make any payment thereunder (irrespective
of any of the circumstances referred to in the preceding sentence), or any
error, omission, interruption, loss or delay in transmission or delivery of any
draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in
interpretation of technical terms or any consequence arising from causes beyond
the control of the Issuing Bank, provided that the foregoing shall not
be construed to excuse the Issuing Bank from liability to the Borrower to the
extent of any direct damages (as opposed to consequential or punitive damages,
claims in respect of which are hereby waived by the Borrower to the extent
permitted by applicable law) suffered by the Borrower that are caused by the
Issuing Bank’s failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof.  The parties hereto expressly
agree that, in the absence of gross negligence or willful misconduct on the
part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each
such determination.  In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.


 


(g)  Disbursement Procedures.  The Issuing Bank shall, promptly following
its receipt thereof, examine all documents purporting to represent a demand for



 


39





















 


payment under a Letter of
Credit.  The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder, provided that any failure
to give or delay in giving such notice shall not relieve the Borrower of its
obligation to reimburse the Issuing Bank and the Revolving Lenders with respect
to any such LC Disbursement in accordance with paragraph (e) of this
Section.


 


(h)  Interim Interest.  If the Issuing Bank shall make any
LC Disbursement, then, unless the Borrower shall reimburse such
LC Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and including the
date such LC Disbursement is made to but excluding the date that the
Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Revolving Loans, provided that, if the Borrower fails
to reimburse such LC Disbursement when due pursuant to paragraph (e)
of this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to this paragraph
shall be for the account of the Issuing Bank, except that interest accrued on
and after the date of payment by any Revolving Lender pursuant to
paragraph (e) of this Section to reimburse the Issuing Bank shall be for
the account of such Lender to the extent of such payment.


 


(i)  Replacement of the
Issuing Bank.  The Issuing Bank may
be replaced at any time by written agreement among the Borrower, the
Administrative Agent and the successor Issuing Bank.  The Administrative Agent shall notify the
Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become
effective, the Borrower shall pay all unpaid fees accrued for the account of
the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term
“Issuing Bank” shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require.  After the
replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.


 


(j)  Cash Collateralization.  If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Revolving Lenders with LC Exposure representing greater
than 50% of the aggregate LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Collateral Agent, in the name of the Collateral Agent and for the
benefit of the Lenders, an amount in cash equal to 105% the LC Exposure as
of such date plus any accrued and unpaid interest thereon, provided that
the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with 


 


40





















 


respect to the Borrower
described in paragraph (h) or (i) of Section 7.01.  The Borrower also shall deposit cash
collateral pursuant to this paragraph as and to the extent required by
Section 2.11(b).  Each such deposit
shall be held by the Collateral Agent as collateral for the payment and
performance of the obligations of the Borrower under this Agreement.  The Collateral Agent shall have exclusive
dominion and control, including the exclusive right of withdrawal, over such
account.  Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower’s
risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such
investments shall accumulate in such account. 
Moneys in such account shall be applied by the Administrative Agent to
reimburse the Issuing Bank for LC Disbursements for which it has not been
reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrower for the
LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Lenders with
LC Exposure representing greater than 50% of the aggregate
LC Exposure), be applied to satisfy other obligations of the Borrower
under this Agreement.  If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.


 


SECTION 2.06. Funding
of Borrowings.  (a)  Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately
available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders, provided that Swingline Loans shall be made as
provided in Section 2.04.  The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated
by the Borrower in the applicable Borrowing Request, provided that ABR
Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the Administrative Agent
to the Issuing Bank.


 


(b)  Unless the Administrative
Agent shall have received notice from a Lender prior to the proposed Borrowing
that such Lender will not make available to the Administrative Agent such
Lender’s share of such Borrowing, the Administrative Agent may assume that such
Lender has made such share available on such date in accordance with
paragraph (a) of this Section and may, in reliance upon such assumption
and in its sole discretion, make available to the Borrower a corresponding
amount.  In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate
applicable to


 


41





















 


ABR Loans.  If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.


 


SECTION 2.07. Interest
Elections.  (a)  Each Revolving Borrowing and Tranche B
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request or as designated
by Section 2.03.  Thereafter, the
Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest
Periods therefor, all as provided in this Section.  The Borrower may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.  This
Section shall not apply to Swingline Borrowings, which may not be converted or
continued.


 


(b)  To make an election pursuant
to this Section, the Borrower shall notify the Administrative Agent of such
election by telephone by the time that a Borrowing Request would be required
under Section 2.03 if the Borrower were requesting a Revolving Borrowing
of the Type resulting from such election to be made on the effective date of
such election.  Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request signed by the Borrower.


 


(c)  Each telephonic and written
Interest Election Request shall specify the following information in compliance
with Section 2.02:


 


(i) 
the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof,
the portions thereof to be allocated to each resulting Borrowing (in which case
the information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);


 


(ii) 
the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;


 


(iii) 
whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and


 


(iv) 
if the resulting Borrowing is a Eurodollar Borrowing, the Interest
Period to be applicable thereto after giving effect to such election, which
shall be a period contemplated by the definition of the term “Interest Period”.


 


If any such Interest Election Request requests a Eurodollar Borrowing
but does not specify an Interest Period, then the Borrower shall be deemed to
have selected an Interest Period of one month’s duration.


 


42





















 


(d)  Promptly following receipt
of an Interest Election Request, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender’s portion of each resulting
Borrowing.


 


(e)  If the Borrower fails to
deliver a timely Interest Election Request with respect to a Eurodollar
Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest
Period such Borrowing shall be converted to an ABR Borrowing.  Notwithstanding any contrary provision
hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of the Required Lenders, so notifies the
Borrower, then, so long as an Event of Default is continuing, (i) no
outstanding Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted
to an ABR Borrowing at the end of the Interest Period applicable thereto.


 


SECTION 2.08.  Termination
and Reduction of Commitments.  

(a)  Unless previously terminated,
(i) the Tranche B Commitments shall terminate at 5:00 p.m.,
New York City time, on the Effective Date and (ii) the Revolving
Commitments shall terminate on the Revolving Maturity Date.


 


(b)  The Borrower may at any time
terminate, or from time to time reduce, the Commitments of any Class, provided
that (i) each reduction of the Commitments of any Class shall be in an
amount that is an integral multiple of $500,000 and not less than $2,000,000
and (ii) the Borrower shall not terminate or reduce the Revolving
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.11, the aggregate Revolving
Exposures would exceed the aggregate Revolving Commitments.


 


(c)  The Borrower shall notify the
Administrative Agent of any election to terminate or reduce the Commitments
under paragraph (b) of this Section at least three Business Days prior to
the effective date of such termination or reduction, specifying such election
and the effective date thereof.  Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof.  Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable,
provided that a notice of termination of the Revolving Commitments
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied.  Any termination or reduction of the
Commitments of any Class shall be permanent. 
Each reduction of the Commitments of any Class shall be made ratably
among the Lenders in accordance with their respective Commitments of such
Class.


 


SECTION 2.09.  Repayment of
Loans; Evidence of Debt.  (a)  The Borrower hereby unconditionally promises
to pay (i) to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Revolving Loan of such Lender on the
Revolving Maturity Date, (ii) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Tranche B Term
Loan of such


 


43





















 


Lender as provided in
Section 2.10 and (iii) to the Swingline Lender the then unpaid
principal amount of each Swingline Loan on the Revolving Maturity Date, provided
that on each date that a Revolving Borrowing is made, the Borrower shall repay
all Swingline Loans that were outstanding on the date such Borrowing was
requested.


 


(b)  Each Lender shall maintain
in accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.


 


(c)  The Administrative Agent
shall maintain accounts in which it shall record (i) the amount of each
Loan made hereunder, the Class and Type thereof and the Interest Period
applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender’s share thereof.


 


(d)  The entries made in the
accounts maintained pursuant to paragraph (b) or (c) of this Section shall
be prima  facie evidence of the existence and amounts of the
obligations recorded therein, provided that the failure of any Lender or
the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.


 


(e)  Any Lender may request that
Loans of any Class made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more
promissory notes in such form payable to the order of the payee named therein
(or, if such promissory note is a registered note, to such payee and its
registered assigns).


 


SECTION 2.10. Amortization
of Tranche B Term Loans.  (a)  Subject to adjustment pursuant to
paragraph (c) of this Section, the Borrower shall repay Tranche B
Term Borrowings on each date set forth below in the aggregate principal amount
set forth opposite such date (as adjusted from time to time pursuant to Section 2.10(c)):


 


	
  Date

  	
   

  	
  Amount

  	
   

  
	
  September 30, 2004

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 31, 2004

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2005

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2005

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 30, 2005

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 30, 2005

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2006

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 29, 2006

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 29, 2006

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 30, 2007

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 29, 2007

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 28, 2007

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  1,000,000

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  94,000,000

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  94,000,000

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  94,000,000

  	
   

  
	
  August 20, 2011

  	
   

  	
  $

  	
  94,000,000

  	
   

  
						



 


44





















 


(b)  To the extent not previously
paid, all Tranche B Term Loans shall be due and payable on the
Tranche B Maturity Date.


 


(c)  Any prepayment of a
Tranche B Term Borrowing shall be applied (i) first, to reduce, in
the direct order of maturity, the scheduled repayments of the Tranche B
Term Borrowings to be made pursuant to this Section on the four consecutive
scheduled payment dates next following the date of such prepayment unless and
until each such scheduled repayment has been eliminated as a result of
reductions hereunder and (ii) second, to reduce ratably to the remaining
scheduled repayments of the Tranche B Term Borrowings.


 


SECTION 2.11. Prepayment
of Loans.  (a)  The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to
the requirements of this Section.


 


(b)  In the event and on such
occasion that the aggregate Revolving Exposures exceeds the aggregate Revolving
Commitments, the Borrower shall prepay Revolving Borrowings or Swingline
Borrowings (or, if no such Borrowings are outstanding, deposit cash collateral
in an account with the Collateral Agent pursuant to Section 2.05(j)) in an
aggregate amount equal to such excess.


 


45





















 


(c)  In the event and on each occasion
that any Net Proceeds are received by or on behalf of Holdings, the Borrower or
any Subsidiary in respect of any Prepayment Event, the Borrower shall, promptly
after such Net Proceeds are received by Holdings, the Borrower or such
Subsidiary (and in any event not later than the third Business Day after such
Net Proceeds are received), prepay Tranche B Term Borrowings in an
aggregate amount equal to (x) in the case of a prepayment event described
in clause (c) of the definition of the term “Prepayment Event”, 50% of
such Net Proceeds, (y) in the case of a prepayment event described in
clause (e)(ii) or clause (f)(ii) of the definition of the term
“Prepayment Event” (I) 75% of such Net Proceeds if the Leverage Ratio at the
end of the immediately preceding fiscal quarter is greater than or equal to
4.25 to 1.00, (II) 50% of such Net Proceeds if the Leverage Ratio at the
end of the immediately preceding fiscal quarter is less than 4.25 to 1.00 and
greater than or equal to 3.25 to 1.00 and (III) 0% of such Net Proceeds if
the Leverage Ratio at the end of the immediately preceding fiscal quarter is
less than 3.25 to 1.00 and (z) in the case of all other Prepayment Events,
100% of such Net Proceeds, provided that in the case of any event
described in clauses (a) or (b) of the definition of the term “Prepayment
Event”, if the Borrower shall deliver to the Administrative Agent a certificate
of a Financial Officer to the effect that the Borrower and the Subsidiaries
intend to apply the Net Proceeds from such event (or a portion thereof
specified in such certificate), within 360 days after receipt of such Net
Proceeds, to acquire real property, equipment or other tangible assets
(excluding inventory) to be used in the business of the Borrower and the
Subsidiaries, and certifying that no Default has occurred and is continuing,
then no prepayment shall be required pursuant to this paragraph in respect of
the Net Proceeds specified in such certificate, except to the extent of any
such Net Proceeds therefrom that have not been so applied or contractually
committed in writing by the end of such 360-day period (and, if so
contractually committed in writing but not applied prior to the end of such
360-day period, applied within 90 days of the end of such period), at which time
a prepayment shall be required in an amount equal to such Net Proceeds that
have not been so applied; provided, further that the Borrower
shall not be permitted to make elections pursuant to the immediately preceding
proviso with respect to Net Proceeds in any fiscal year in an aggregate amount
in excess of $50,000,000.


 


(d)  Following the end of each
fiscal year of the Borrower, commencing with the fiscal year ending
December 31, 2005, the Borrower shall prepay Tranche B Term
Borrowings in an aggregate amount equal to (i) the excess of (A) 75%
of Excess Cash Flow over (B) prepayments of Tranche B Term Loans
under Section 2.11(a) during such fiscal year for any fiscal year for
which the Leverage Ratio at the end of such fiscal year is greater than or equal
to 4.25 to 1.00, (ii) the excess of (A) 50% of Excess Cash Flow over
(B) prepayments of Tranche B Term Loans under Section 2.11(a)
during such fiscal year for any fiscal year for which the Leverage Ratio at the
end of such fiscal year is less than 4.25 to 1.00 and greater than or equal to
3.25 to 1.00 and (iii) 0% of Excess Cash Flow for any fiscal year for
which the Leverage Ratio at the end of such fiscal year is less than 3.25 to
1.00.  Each prepayment pursuant to this
paragraph shall be made within three Business Days of the date on which
financial statements are delivered pursuant to Section 5.01 with respect
to the fiscal year for which Excess Cash Flow is being calculated (and in any
event within 95 days after the end of such fiscal year).


 


46





















 


(e)  Prior to any optional or
mandatory prepayment of Borrowings hereunder, the Borrower shall select the
Borrowing or Borrowings to be prepaid and shall specify such selection in the
notice of such prepayment pursuant to paragraph (f) of this Section.


 


(f)  The Borrower shall notify
the Administrative Agent (and, in the case of prepayment of a Swingline Loan,
the Swingline Lender) by telephone (confirmed by telecopy) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Borrowing, not
later than 12:00 noon, New York City time, three Business Days before
the date of prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 2:00 p.m., New York
City time, on the date of prepayment. 
Each such notice shall be irrevocable and shall specify the prepayment
date, the principal amount of each Borrowing or portion thereof to be prepaid
and, in the case of a mandatory prepayment, a reasonably detailed calculation
of the amount of such prepayment, provided that, if a notice of optional
prepayment is given in connection with a conditional notice of termination of
the Revolving Commitments as contemplated by Section 2.08, then such
notice of prepayment may be revoked if such notice of termination is revoked in
accordance with Section 2.08.  Promptly
following receipt of any such notice (other than a notice relating solely to
Swingline Loans), the Administrative Agent shall advise the Lenders of the
contents thereof.  Each partial
prepayment of any Borrowing shall be in an amount that would be permitted in
the case of an advance of a Borrowing of the same Type as provided in
Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment.  Each prepayment of
a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing.  Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13 but shall
otherwise be without premium or penalty.


 


SECTION 2.12. Fees.  (a) 
The Borrower agrees to pay to the Administrative Agent for the account
of each Lender a commitment fee, which shall accrue at the Applicable Rate on
the average daily unused amount of each Revolving Commitment of such Lender
during the period from and including the Effective Date to but excluding the
date on which the aggregate Revolving Commitments terminate.  Accrued commitment fees shall be payable in
arrears in respect of the Revolving Commitments, on the last Business Day of
March, June, September and December of each year and on the date on which the
Revolving Commitments terminate, commencing on the first such date to occur
after the date hereof.  All commitment
fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).  For purposes of
computing commitment fees with respect to Revolving Commitments, a Revolving
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender (and the
Swingline Exposure of such Lender shall be disregarded for such purpose).


 


(b)  The Borrower agrees to pay
(i) to the Administrative Agent for the account of each Revolving Lender a
participation fee with respect to its participations in 


 


47





















 


Letters of Credit, which shall
accrue at the same Applicable Rate used to determine the interest rate
applicable to Eurodollar Revolving Loans on the average daily amount of such
Lender’s LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender’s
Revolving Commitment terminates and the date on which such Lender ceases to
have any LC Exposure, and (ii) to the Issuing Bank a fronting fee,
which shall accrue at a rate equal to 0.25% per annum on the average daily
amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date of termination of the
Revolving Commitments and the date on which there ceases to be any
LC Exposure, as well as the Issuing Bank’s standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. 
Participation fees and fronting fees shall be payable on the last
Business Day of March, June, September and December of each year, commencing on
the first such date to occur after the Effective Date, provided that all
such fees shall be payable on the date on which the Revolving Commitments
terminate and any such fees accruing after the date on which the Revolving
Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank
pursuant to this paragraph shall be payable within 10 days after
demand.  All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).


 


(c)  The Borrower agrees to pay
to the Administrative Agent, for its own account, fees payable in the amounts
and at the times separately agreed upon between the Borrower and the
Administrative Agent.


 


(d)  All fees payable hereunder shall
be paid on the dates due, in immediately available funds, to the Administrative
Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of commitment fees and participation fees, to the
Lenders entitled thereto.  Fees paid
shall not be refundable under any circumstances.


 


SECTION 2.13. Interest.  (a) 
The Loans comprising each ABR Borrowing (including each Swingline
Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.


 


(b)  The Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Rate.


 


(c)  Notwithstanding the
foregoing, if any principal of or interest on any Loan or any fee or other
amount payable by the Borrower hereunder is not paid when due, whether at
stated maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to
(i) in the case of overdue principal of any Loan, 2% plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section or (ii) in the case of any 


 


48





















 


other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this
Section.


 


(d)  Accrued interest on each
Loan shall be payable in arrears on each Interest Payment Date for such Loan
and, in the case of Revolving Loans, upon termination of the Revolving Commitments,
provided that (i) interest accrued pursuant to paragraph (c)
of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (other than a prepayment of an ABR
Revolving Loan prior to the end of the Revolving Availability Period), accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment and (iii) in the event of any conversion
of any Eurodollar Loan prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion.


 


(e)  All interest hereunder shall
be computed on the basis of a year of 360 days, except that interest
computed by reference to the Alternate Base Rate at times when the Alternate
Base Rate is based on the Prime Rate shall be computed on the basis of a year
of 365 days (or 366 days in a leap year), and in each case shall be
payable for the actual number of days elapsed (including the first day but excluding
the last day).  The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.


 


SECTION 2.14. Alternate
Rate of Interest.  If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:


 


(a) the Administrative Agent determines
(which determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO Rate for
such Interest Period; or


 


(b) the Administrative Agent is advised by
the Required Lenders that the Adjusted LIBO Rate for such Interest Period will
not adequately and fairly reflect the cost to such Lenders of making or
maintaining their Loans included in such Borrowing for such Interest Period;


 


then the Administrative Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.


 


SECTION 2.15. Increased
Costs.  (a)  If any Change in Law shall:


 


(i) 
impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the account 


 


49





















 


of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or


 


(ii) 
impose on any Lender or the Issuing Bank or the London interbank market
any other condition affecting this Agreement or Eurodollar Loans made by such
Lender or any Letter of Credit or participation therein;


 


and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as applicable, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank, as applicable, for such additional costs incurred or reduction suffered.


 


(b)  If any Lender or the Issuing
Bank determines that any Change in Law regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s
holding company, if any, as a consequence of this Agreement or the Loans made
by, or participations in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuing Bank, to a level below that which such Lender
or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such
Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or
the Issuing Bank’s holding company with respect to capital adequacy), then from
time to time the Borrower will pay to such Lender or the Issuing Bank, as applicable,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.


 


(c)  A certificate of a Lender or
the Issuing Bank setting forth the amount or amounts necessary to compensate
such Lender or the Issuing Bank or its holding company, as applicable, as
specified in paragraph (a) or (b) of this Section shall be delivered to
the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the
Issuing Bank, as applicable, the amount shown as due on any such certificate
within 10 days after receipt thereof.


 


(d)  Failure or delay on the part
of any Lender or the Issuing Bank to demand compensation pursuant to this Section
shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to
demand such compensation, provided that the Borrower shall not be
required to compensate a Lender or the Issuing Bank pursuant to this Section
for any increased costs or reductions incurred more than 270 days prior to
the date that such Lender or the Issuing Bank, as applicable, notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation
therefor, provided  further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 


 


50





















 


270-day period referred to
above shall be extended to include the period of retroactive effect thereof.


 


SECTION 2.16. Break
Funding Payments.  In the event of
(a) the payment of any principal of any Eurodollar Loan other than on the
last day of an Interest Period applicable thereto (including as a result of an
Event of Default), (b) the conversion of any Eurodollar Loan other than on
the last day of the Interest Period applicable thereto, (c) the failure to
borrow, convert, continue or prepay any Revolving Loan or Tranche B Term Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under Section 2.11(f) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.19, then, in any such event,
the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event.  In the case
of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed
to include an amount determined by such Lender to be the excess, if any, of
(i) the amount of interest that would have accrued on the principal amount
of such Loan had such event not occurred, at the Adjusted LIBO Rate that would
have been applicable to such Loan, for the period from the date of such event
to the last day of the then current Interest Period therefor (or, in the case
of a failure to borrow, convert or continue, for the period that would have
been the Interest Period for such Loan), over (ii) the amount of interest
that would accrue on such principal amount for such period at the interest rate
that such Lender would bid were it to bid, at the commencement of such period,
for dollar deposits of a comparable amount and period from other banks in the
eurodollar market.  A certificate of any
Lender setting forth any amount or amounts that such Lender is entitled to
receive pursuant to this Section shall be delivered to the Borrower and shall
be conclusive absent manifest error.  The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.


 


SECTION 2.17. Taxes.  (a) 
Any and all payments by or on account of any obligation of the Borrower
hereunder or under any other Loan Document shall be made free and clear of and
without deduction for any Indemnified Taxes or Other Taxes, provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent, Lender or Issuing Bank (as applicable) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.


 


(b)  In addition, the Borrower
shall pay any Other Taxes to the relevant Governmental Authority in accordance
with applicable law.


 


(c)  The Borrower shall indemnify
the Administrative Agent, each Lender and the Issuing Bank, within 30 days
after written demand therefor, for the full amount of any Indemnified Taxes or
Other Taxes paid by the Administrative Agent, such Lender or 


 


51





















 


the Issuing Bank, as
applicable, on or with respect to any payment by or on account of any
obligation of the Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or the Issuing Bank, or by
the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.


 


(d)  As soon as practicable after
any payment of Indemnified Taxes or Other Taxes by the Borrower to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent
the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, if any, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.


 


(e)  Any Foreign Lender that is
entitled to an exemption from or reduction of withholding tax under the law of
the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), on or prior
to the Effective Date in the case of each Foreign Lender that is a signatory
hereto, and on the date of assignment pursuant to which it becomes a Lender in
the case of each other Lender and from time to time thereafter is reasonably
requested by either of the Borrower or the Administrative Agent, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate, provided that such Foreign Lender has
received written notice from the Borrower advising it of the availability of
such exemption or reduction and supplying all applicable documentation.


 


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


 


52





















 


SECTION 2.18.  Payments
Generally; Pro Rata Treatment; Sharing of Set-offs.  (a) 
The Borrower shall make each payment required to be made by it hereunder
or under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under
Section 2.15, 2.16 or 2.17, or otherwise) prior to the time expressly
required hereunder or under such other Loan Document for such payment (or, if
no such time is expressly required, prior to 3:00 p.m., New York City
time), on the date when due, in immediately available funds, without set-off or
counterclaim.  Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon.  All
such payments shall be made to the Administrative Agent at its offices at
270 Park Avenue, New York, New York, except payments to be made
directly to the Issuing Bank or Swingline Lender as expressly provided herein
and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03
shall be made directly to the Persons entitled thereto and payments pursuant to
other Loan Documents shall be made to the Persons specified therein.  The Administrative Agent shall distribute any
such payments received by it for the account of any other Person to the
appropriate recipient promptly following receipt thereof.  If any payment under any Loan Document shall
be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension.  All payments under each Loan
Document shall be made in dollars.


 


(b)  If at any time insufficient
funds are received by and available to the Administrative Agent to pay fully
all amounts of principal, unreimbursed LC Disbursements, interest and fees
then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal and unreimbursed
LC Disbursements then due to such parties.


 


(c)  If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Revolving Loans,
Tranche B Term Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans, Tranche B Term
Loans and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Revolving Loans, Tranche B Term Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to
the extent necessary so that the benefit of all such payments shall be shared
by the Lenders ratably in accordance with the aggregate amount of principal of
and accrued interest on their respective Revolving Loans, Tranche B Term
Loans and participations in LC Disbursements and Swingline Loans, provided
that (i) if any such participations are purchased and all or any portion
of the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the 


 


53





















 


extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by
a Lender as consideration for the assignment of or sale of a participation in
any of its Loans or participations in LC Disbursements to any assignee or
participant, other than to the Borrower or any Subsidiary or Affiliate thereof
(as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect
to such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.


 


(d)  Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due to the Administrative Agent for the account of the Lenders
or the Issuing Bank hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption and in
its sole discretion, distribute to the Lenders or the Issuing Bank, as
applicable, the amount due.  In such
event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as applicable, severally agrees to repay to the
Administrative Agent forthwith on demand the amount so distributed to such
Lender or Issuing Bank with interest thereon, for each day from and including
the date such amount is distributed to it to but excluding the date of payment
to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation.


 


(e)  If any Lender shall fail to
make any payment required to be made by it pursuant to Section 2.04(c),
2.05(d) or (e), 2.06(a), 2.18(d) or 9.03(c), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender’s obligations under such Sections until all such
unsatisfied obligations are fully paid.


 


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


 


54





















 


(b)  If any Lender requests
compensation under Section 2.15, or if the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.17, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Borrower may, at its sole expense
and effort, upon notice to such Lender and the Administrative Agent, require
such Lender to assign and delegate, without recourse (in accordance with and
subject to the restrictions contained in Section 9.04), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts
such assignment), provided that (i) the Borrower shall have
received the prior written consent of the Administrative Agent (and if a
Revolving Commitment is being assigned, the Issuing Bank and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and
Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding
principal and accrued interest and fees) or the Borrower (in the case of all
other amounts) and (iii) in the case of any such assignment resulting from
a claim for compensation under Section 2.15 or payments required to be
made pursuant to Section 2.17, such assignment will result in a material
reduction in such compensation or payments. 
A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.


 


SECTION 2.20. Incremental
Extensions of Credit.  At any time
during the Revolving Availability Period, subject to the terms and conditions
set forth herein, the Borrower may at any time and from time to time, by notice
to the Administrative Agent (whereupon the Administrative Agent shall promptly
deliver a copy to each of the Lenders), request to add additional term loans or
additional revolving commitments (together, the “Incremental Extensions of
Credit”) in minimum principal amounts of $25,000,000, provided that
such amount may be less than $25,000,000 if such amount represents all the
remaining availability under the aggregate principal amount set forth below, provided,
further, that (x) immediately prior to and after giving effect to
any Incremental Facility Amendment, no Default has occurred or is continuing or
shall result therefrom and (y) the Borrower shall be in compliance on a
Pro Forma Basis with the Financial Performance Covenants recomputed as of the
last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available.  The
Incremental Extensions of Credit (a) shall be in an aggregate principal
amount not exceeding $100,000,000, (b) shall rank pari  passu
or junior in right of payment and right of security in respect of the
Collateral with the Revolving Loans and Tranche B Term Loans and
(c) other than amortization, pricing or maturity date, shall have the same
terms as the Tranche B Term Loans or Revolving Commitments, as applicable,
existing immediately prior to the effectiveness of such Incremental Facility
Amendment (the “Existing Extensions of Credit”), provided that
(i) if the Applicable Rate (which, for such purposes only, shall be deemed
to include all upfront or similar fees or original issue discount payable to
all Lenders providing such Incremental Extensions of Credit) relating to the
Incremental Extensions of Credit that are revolving loans and term loans
exceeds the Applicable Rate (which, for such purposes only, shall be deemed to
include all 


 


55





















 


upfront or similar fees or
original issue discount payable to all Lenders providing such Existing
Extensions of Credit) relating to the Revolving Loans and Tranche B Term Loans,
respectively, by more than 0.25%, the Applicable Rate relating to the
applicable Existing Extensions of Credit shall be adjusted to be equal to the
Applicable Rate (which, for such purposes only, shall be deemed to include all
upfront or similar fees or original issue discount payable to all Lenders
providing such Incremental Extensions of Credit) relating to the applicable
Incremental Extensions of Credit minus 0.25%, (ii) the Incremental
Extensions of Credit in the form of term loans shall not have a final maturity
date earlier than the Tranche B Maturity Date, (iii) the Incremental
Extensions of Credit in the form of revolving loans shall not have a final
maturity date earlier than the Revolving Maturity Date, (iv) the
Incremental Extensions of Credit in the form of term loans shall not have a weighted
average life that is shorter than that of the then-remaining weighted average
life of the Existing Extensions of Credit that are Tranche B Term Loans
and (v) the Incremental Extensions of Credit in the form of revolving
loans shall not require any mandatory commitment reductions, mandatory
prepayments or scheduled payments other than those applicable to the Revolving
Loans and Revolving Commitments.  The
Borrower shall by written notice offer each Lender providing Existing
Extensions of Credit (an “Existing Lender”) the opportunity for no less
than ten Business Days after delivery of the notice to commit to provide its
pro rata portion (based on the amount of its outstanding Tranche B Term
Loans or outstanding Revolving Loans and unused Revolving Commitments, as
applicable, on the date of such notice) any requested Incremental Extension of
Credit, provided that no Existing Lender shall be obligated to provide
any Incremental Extension of Credit unless it so agrees.  Any additional bank, financial institution,
Existing Lender or other Person that elects to extend Incremental Extensions of
Credit shall be reasonably satisfactory to the Borrower and the Administrative
Agent (any such bank, financial institution, Existing Lender or other Person
being called an “Additional Lender”) and shall become a Lender under
this Agreement, pursuant to an amendment (an “Incremental Facility Amendment”)
to this Agreement, giving effect to the modifications permitted by this
Section 2.20, and, as appropriate, the other Loan Documents, executed by
the Borrower, each Additional Lender and the Administrative Agent.  Commitments in respect of Incremental
Extensions of Credit shall be Commitments under this Agreement.  An Incremental Facility Amendment may,
without the consent of any other Lenders, effect such amendments to this
Agreement and the other Loan Documents as may be necessary or appropriate, in
the opinion of the Administrative Agent, to effect the provisions of this
Section (including voting provisions applicable to the Additional Lenders
comparable to the provisions of clause (B) of the second proviso of
Section 9.02(b)).  The effectiveness
of any Incremental Facility Amendment shall be subject to the satisfaction on
the date thereof (each, an “Incremental Facility Closing Date”) of each
of the conditions set forth in Section 4.02 (it being understood that all
references to “the date of such Borrowing” in such Section 4.02 shall be
deemed to refer to the Incremental Facility Closing Date).  The proceeds of the Incremental Extensions of
Credit shall be used for working capital and general corporate purposes
(including Permitted Acquisitions).


 


56


















ARTICLE III


 


Representations
and Warranties


 


The Borrower represents and warrants to the Lenders that:


 


SECTION 3.01. Organization; Power.  Each of Holdings, the Borrower and the
Subsidiaries (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (b) has the power
and authority and all governmental rights, qualifications, approvals,
authorizations, permits, accreditations, Reimbursement Approvals, licenses and
franchises material to the business of the Borrower and the Subsidiaries taken
as a whole that are necessary to own its assets, to carry on its business as
now conducted and as proposed to be conducted and to execute, deliver and
perform its obligations under each Loan Document to which it is a party and
(c) except where the failure to do so, individually or in the aggregate,
is not reasonably likely to result in a Material Adverse Effect, is qualified
to do business in, and is in good standing in, every jurisdiction where such
qualification is required.


 


SECTION 3.02. Authorization;
Enforceability.  The Transactions to be entered into by each
Loan Party have been duly authorized by all necessary corporate or other action
and, if required, stockholder action. 
This Agreement has been duly executed and delivered by each of Holdings
and the Borrower and constitutes, and each other Loan Document to which any
Loan Party is to be a party, when executed and delivered by such Loan Party,
will constitute, a legal, valid and binding obligation of Holdings, the
Borrower or such Loan Party, as applicable, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
or other laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.


 


SECTION 3.03. Governmental Approvals; No
Conflicts. 
The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental
Authority, except such as have been obtained or made and are in full force and
effect and except filings necessary to perfect Liens created under the Loan
Documents, (b) will not violate any Requirement of Law applicable to
Holdings, the Borrower or any of the Subsidiaries, as applicable, (c) will
not violate or result in a default under any indenture, Management Services
Agreement or other material agreement or instrument binding upon Holdings, the
Borrower or any of the Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by Holdings, the Borrower or any
of the Subsidiaries or give rise to a right of, or result in, termination,
cancelation or acceleration of any material obligation thereunder, (d) will
not result in a Limitation on any right, qualification, approval, permit,
accreditation, authorization, Reimbursement Approval, license or franchise or
authorization granted by any Governmental Authority, Third Party Payor or other
Person applicable to the business, operations or assets of the Borrower or any
of the Subsidiaries or adversely affect the ability of the Borrower or any of
the Subsidiaries to participate in any Third Party Payor Arrangement except for
Limitations, individually or in the aggregate, that are not material to the
business of the Borrower and the Subsidiaries,


 


57





















 


taken as a whole, and (e) will not
result in the creation or imposition of any Lien on any asset of Holdings, the
Borrower or any of the Subsidiaries, except Liens created under the Loan
Documents.  There is no pending or, to
the knowledge of the Borrower, threatened Limitation by any Governmental
Authority, Third Party Payor or any other Person of any right, qualification,
approval, permit, authorization, accreditation, Reimbursement Approval, license
or franchise of the Borrower, any Subsidiary or any Affiliated Practice, except
for such Limitations, individually or in the aggregate, as are not reasonably
likely to result in a Material Adverse Effect. 
No certifications by any Governmental Authority or any Third Party Payor
are required for operation of the business of the Borrower and the Subsidiaries
and neither the Borrower nor any Subsidiary is required to have entered into
any agreement with a Third Party Payor for the operation of the business of the
Borrower and the Subsidiaries.  All
material Affiliated Practices have the power and authority, all governmental
rights, qualifications, permits, authorizations, approvals, accreditations,
Reimbursement Approvals, licenses and franchises material to the business of
the Borrower and the Subsidiaries, taken as a whole, that are necessary to own
its assets and to carry on its business as now conducted and as proposed to be conducted.


 


SECTION 3.04. Financial Condition; No
Material Adverse Change.  (a) 
The Borrower has heretofore furnished to the Lenders its consolidated
balance sheet and consolidated statements of operations and comprehensive
income, stockholders’ equity and cash flows (i) as of and for the fiscal
years ended December 31, 2001, December 31, 2002, and
December 31, 2003, reported on by PricewaterhouseCoopers LLP, independent
public accountants, and (ii) as of and for the fiscal quarter ended
March 31, 2004 (and comparable period for the prior fiscal year),
certified by its chief financial officer. 
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower and
the Subsidiaries as of such dates and for such periods in accordance with GAAP
consistently applied, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) above.


 


(b)  The Borrower has heretofore furnished to the
Lenders its pro forma consolidated balance sheet as of the Effective Date,
prepared giving effect to the Transactions as if the Transactions had occurred
on such date.  Such pro forma
consolidated balance sheet (i) has been prepared in good faith based on
the same assumptions used to prepare the pro forma financial statements
included in the Information Memorandum (which assumptions are believed by the
Borrower to be reasonable), (ii) accurately reflects all adjustments
necessary to give effect to the Transactions and (iii) presents fairly, in
all material respects, the pro forma financial position of the Borrower and the
Subsidiaries as of the Effective Date as if the Transactions had occurred on
such date.


 


(c)  Except as disclosed in the financial
statements referred to above or the notes thereto or in the Information
Memorandum and except for the Disclosed Matters, after giving effect to the
Transactions, none of the Borrower or its Subsidiaries has, as of the Effective
Date, any material direct or contingent liabilities.


 


58





















 


(d)  No event, change or condition has occurred
that has had, or is reasonably likely to have, a material adverse effect on the
business, operations, assets, liabilities, financial condition or results of
operations of Holdings, the Borrower and the Subsidiaries, taken as a whole,
since December 31, 2003.


 


SECTION 3.05. Properties.  (a) 
Each of Holdings, the Borrower and the Subsidiaries has good title to,
or valid leasehold interests in, all its real and personal property material to
its business (including its Mortgaged Properties), free and clear of all Liens,
except for Permitted Encumbrances and minor defects in title that do not
interfere in any material respect with its ability to conduct its business or
to utilize such properties for their intended purposes.


 


(b)  Each of Holdings, the Borrower and the
Subsidiaries owns, licenses or possesses the right to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by Holdings, the Borrower and the Subsidiaries
does not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, are not reasonably likely
to result in a Material Adverse Effect.


 


(c)  Schedule 3.05 sets forth the address of
each real property that is owned or leased by Holdings, the Borrower or any of
the Subsidiaries as of the Effective Date after giving effect to the Transactions.


 


(d)  As of the Effective Date, neither Holdings or
the Borrower nor any of the Subsidiaries has received notice of, or has
knowledge of, any pending or contemplated condemnation proceeding affecting any
Mortgaged Property or any sale or disposition thereof in lieu of
condemnation.  As of the Effective Date,
neither any Mortgaged Property nor any interest therein is subject to any right
of first refusal, option or other contractual right to purchase such Mortgaged
Property or interest therein.


 


SECTION 3.06. Litigation and Environmental
Matters. 
(a)  There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of Holdings, the Borrower or any Subsidiary,
threatened against or affecting Holdings, the Borrower or any Subsidiary that
are reasonably likely to (i) have a Material Adverse Effect or
(ii) adversely affect the ability of the Loan Parties to consummate the
Transactions or the other transactions contemplated hereby.


 


(b)  Except for the Disclosed Matters and except
with respect to any other matters that, individually or in the aggregate, are
not reasonably likely to result in a Material Adverse Effect, neither Holdings,
the Borrower nor any Subsidiary (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become
subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis
for any Environmental Liability.


 


59





















 


SECTION 3.07. Compliance with Laws and
Agreements. 
Except with respect to any matters that, individually or in the aggregate,
are not material to the business of the Borrower and the Subsidiaries, taken as
a whole, each of Holdings, the Borrower, the Subsidiaries and, to the knowledge
of the Borrower, the Affiliated Practices, is in compliance with all material
Requirements of Law applicable to it or its property and all material
indentures, agreements and other instruments binding upon it or its property.


 


SECTION 3.08. Investment and Holding
Company Status.  Neither Holdings, the Borrower nor any
Subsidiary is (a) an “investment company” as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a “holding
company” as defined in, or subject to regulation under, the Public Utility
Holding Company Act of 1935.


 


SECTION 3.09. Taxes.  Each of Holdings, the Borrower and the
Subsidiaries has timely filed or caused to be filed all Federal and other
material Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) any
Taxes that are being contested in good faith by appropriate proceedings and for
which Holdings, the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves in accordance with GAAP or (b) to the
extent that the failure to do so is not reasonably likely to result in a
Material Adverse Effect.


 


SECTION 3.10. ERISA.  No ERISA Event has occurred or is reasonably
likely to occur that, when taken together with all other such ERISA Events for
which liability is reasonably likely to occur, is reasonably likely to result
in a Material Adverse Effect.  The
present value of all accumulated benefit obligations under each Plan (based on
the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair value of the assets of such
Plan.


 


SECTION 3.11. Disclosure.  Neither the Information Memorandum nor any of
the other reports, financial statements, certificates or other information
furnished by or on behalf of any Loan Party to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or any other Loan
Document or delivered hereunder or thereunder (as modified or supplemented by
other information so furnished) contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, provided
that the foregoing shall not apply to any projected financial information other
than the projected financial information included in the Information
Memorandum, and with respect to such projected financial information, Holdings
and the Borrower represent only that such information was prepared in good
faith based upon assumptions believed by it to be reasonable at the time
delivered and as of the Effective Date.


 


SECTION 3.12. Subsidiaries.  Before giving effect to the Merger, Holdings
does not have any subsidiaries other than MergerCo.  After giving effect to the


 


60





















 


Merger, as of the Effective Date, Holdings
does not have any subsidiaries other than the Borrower and the Subsidiaries,
Permitted Joint Ventures and Inactive Subsidiaries listed on
Schedule 3.12.  Schedule 3.12
sets forth the name of, and the ownership or beneficial interest of Holdings,
in each subsidiary, including the Borrower, and identifies each Subsidiary that
is a Subsidiary Loan Party, in each case as of the Effective Date.


 


SECTION 3.13. Insurance.  Schedule 3.13 sets forth a description
of all insurance maintained by or on behalf of Holdings, the Borrower and the
Subsidiaries as of the Effective Date. 
As of the Effective Date, all premiums in respect of such insurance have
been paid.  Holdings and the Borrower
believe that the insurance maintained by or on behalf of the Borrower and the
Subsidiaries is adequate.


 


SECTION 3.14. Labor Matters.  As of the Effective Date, there are no
strikes, lockouts or slowdowns against Holdings, the Borrower or any Subsidiary
pending or, to the knowledge of Holdings or the Borrower, threatened.  The hours worked by and payments made to
employees of the Borrower and the Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters. 
All payments due from Holdings, the Borrower or any Subsidiary, or for
which any claim may be made against Holdings, the Borrower or any Subsidiary,
on account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of Holdings,
the Borrower or such Subsidiary.  The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which Holdings, the Borrower or any Subsidiary is
bound.


 


SECTION 3.15. Solvency.  Immediately after the consummation of the
Transactions to occur on the Effective Date (a) the fair value of the
assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise, (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured, (c) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured, and (d) each
Loan Party will not have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Effective Date, in each case after
giving effect to any rights of indemnification, contribution or subrogation
arising among the Subsidiary Loan Parties pursuant to the Collateral Agreement or
by law.


 


SECTION 3.16. Senior Indebtedness.  The Obligations constitute (a) “Senior Debt”
under and as defined in the Senior Notes Documents, (b) “Designated Senior
Debt” under and as defined in the Senior Subordinated Notes Documents and (c)
“Senior Debt” or a comparable term under and as defined in (i) the
Existing Senior Subordinated Notes Documents, (ii) the Physician Notes and
(iii) the documentation governing any Additional Subordinated Debt.


 


61





















 


SECTION 3.17. Reimbursement from Third
Party Payors. 
The accounts receivable of Holdings, the Borrower and the Subsidiaries
and, to the knowledge of Holdings and the Borrower, the Affiliated Practices
have been and will continue to be adjusted to reflect the reimbursement
policies required by all applicable Requirements of Law and other Third Party
Payor Arrangements to which Holdings, the Borrower, such Subsidiary or
Affiliated Practice is subject, and do not exceed in any material respect
amounts the Borrower, such Subsidiary or such Affiliated Practice is entitled
to receive under any capitation arrangement, fee schedule, discount formula,
cost-based reimbursement or other adjustment or limitation to usual
charges.  All billings by Holdings, the
Borrower, each Subsidiary and, to the knowledge of the Borrower, each
Affiliated Practice pursuant to any Third Party Payor Arrangements have been
made in compliance with all applicable Requirements of Law, except where
failure to comply would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect. 
There has been no intentional or material over-billing or
over-collection by the Borrower or any Subsidiary pursuant to any Third Party
Payor Arrangements, other than as created by routine adjustments and
disallowances made in the ordinary course of business by the Third Party Payors
with respect to such billings.


 


SECTION 3.18. Fraud and Abuse.  Except as set forth on Schedule 3.18,
none of Holdings, the Borrower, any Subsidiary or, to the knowledge of Holdings
and the Borrower, any Affiliated Practice, nor any of their respective
partners, members, stockholders, officers or directors, acting on behalf of
Holdings, the Borrower, any Subsidiary or any Affiliated Practice, have engaged
on behalf of Holdings, Borrower, any Subsidiary or any Affiliated Practice in
any activities that are prohibited under 42 U.S.C. § 1320a-7, 42 U.S.C.
§ 1320a-7a, 42 U.S.C. § 1320a-7b, 42 U.S.C.
§ 1395nn, 31 U.S.C. § 3729 et  seq., or the regulations
promulgated thereunder, or related Requirements of Law, or under any similar
state law or regulation, or that are prohibited by binding rules of
professional conduct, including (a) knowingly and willfully making or
causing to be made a false statement or misrepresentation of a material fact in
any application for any benefit or payment, (b) knowingly and willfully
making or causing to be made any false statement or misrepresentation of a
material fact for use in determining rights to any benefit or payment, (c) failing
to disclose knowledge by a claimant of the occurrence of any event affecting
the initial or continued right to any benefit or payment on its own behalf or
on behalf of another, with intent to secure such benefit or payment
fraudulently, (d) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate), directly or indirectly,
overtly or covertly, in cash or in kind, or offering to pay or receive such
remuneration (i) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of any item or service for which
payment may be made, in whole or in part, pursuant to any Third Party Payor
Arrangement to which the foregoing rules and regulations apply or (ii) in
return for purchasing, leasing or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made, in whole or in part, pursuant to any Third Party Payor
Agreement to which the foregoing rules and regulations apply and
(e) making any prohibited referral for designated health services, or
presenting or causing to be presented a claim or bill to any individual, third
party payor or other entity for designated health services furnished pursuant
to a prohibited referral.  Neither
Holdings, the Borrower nor any Subsidiary shall be considered to be in breach
of


 


62





















 


this Section so long as (a) it shall
have taken such actions (including implementation of appropriate internal
controls) as may be reasonably necessary to prevent such prohibited actions and
(b) such prohibited actions as have occurred, individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect.


 


ARTICLE IV


 


Conditions


 


SECTION 4.01. Effective
Date.  The
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective until the date on which
each of the following conditions is satisfied (or waived in accordance with
Section 9.02):


 


(a) The Administrative Agent shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party
or (ii) written evidence satisfactory to the Administrative Agent (which
may include telecopy transmission of a signed signature page of this Agreement)
that such party has signed a counterpart of this Agreement.


 


(b) The Administrative Agent shall have received a written opinion
(addressed to the Administrative Agent and the Lenders and dated the Effective
Date) of each of (i) Ropes & Gray LLP, counsel for Holdings and
the Borrower, substantially in the form of Exhibit B-1, and
(ii) local counsel in each jurisdiction where a Subsidiary is organized or
a Mortgaged Property is located, substantially in the form of Exhibit B-2,
and, in the case of each such opinion required by this paragraph, covering such
other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Administrative Agent shall reasonably request.  Holdings and the Borrower hereby request such
counsel to deliver such opinions.


 


(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of each Loan Party,
the authorization of the Transactions and any other legal matters relating to
the Loan Parties, the Loan Documents or the Transactions, all in form and
substance reasonably satisfactory to the Administrative Agent and its counsel.


 


(d) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by a Financial Officer, confirming compliance
with the conditions set forth in paragraphs (a) and (b) of
Section 4.02 (other than, with respect to paragraph (a) of
Section 4.02, the representation and warranty set forth in
paragraph (d) of


 


63





















 


Section 3.04,
which representation and warranty need not be made on the Effective Date).


 


(e) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses
(including fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.


 


(f) The Collateral and Guarantee Requirement shall have been satisfied
and the Administrative Agent shall have received (i) a completed Perfection
Certificate dated the Effective Date and signed by the chief financial officer
and a legal officer of the Borrower, together with all attachments contemplated
thereby, including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by
Section 6.02 or have been released and (ii) evidence that the
concentration account arrangements contemplated by the Collateral Agreement
have been established, provided that the Collateral Agent may, in its
reasonable judgment, grant extensions of time for compliance with the
Collateral and Guarantee Requirement by any Loan Party.


 


(g) The Administrative Agent shall have received evidence that the
insurance required by Section 5.07 and the Security Documents is in
effect.


 


(h) The Borrower shall have received (or simultaneously with the
initial funding of the Loans shall receive) gross cash proceeds of (i) not
less than $300,000,000 from the issuance of the Senior Notes and (ii) not
less than $275,000,000 from the issuance of the Senior Subordinated Notes.  The terms and conditions of the Senior Notes
and the Senior Subordinated Notes and the form and substance of the Notes
Documents shall be reasonably satisfactory to the Lenders.  The Administrative Agent shall have received
copies of the Notes Documents, certified by a Financial Officer as complete and
correct in all material respects.


 


(i) All requisite material Governmental Authorities and third parties shall
have approved or consented to the Transactions, all applicable waiting or
appeal periods (including any extensions thereof) shall have expired and there
shall be no governmental or judicial action, actual or


 


64





















 


threatened,
that could reasonably be expected to restrain, prevent or impose burdensome
conditions on the Transactions.


 


(j) The Lenders shall have received a pro forma consolidated balance
sheet of the Borrower as of the Effective Date, reflecting all pro forma
adjustments as if the Transactions had been consummated on such date, and such
pro forma consolidated balance sheet shall be consistent in all material
respects with the forecasts and other information previously provided to the
Lenders.  After giving effect to the
Transactions, none of Holdings, the Borrower or any Subsidiary shall have
outstanding any preferred stock or any Indebtedness, other than
(i) Indebtedness incurred under the Loan Documents, (ii) the Senior
Notes, (iii) the Senior Subordinated Notes and (iv) Indebtedness set
forth on Schedule 6.01.  The terms
and conditions of (a) all Indebtedness to remain outstanding after the
Effective Date (including terms and conditions relating to interest rates,
fees, amortization, maturity, redemption, subordination, covenants, events of
default and remedies) and (b) all preferred stock to be issued in
connection with the Transactions or to remain outstanding after the Effective
Date (including terms and conditions relating to cash dividend payments,
dividend rates, redemption, subordination, covenants, conversion, voting
rights, events of default and remedies) shall be in compliance with this
Agreement or otherwise reasonably satisfactory in all material respects to the
Lenders.


 


(k) All obligations under or relating to the Existing Credit Agreement
and the Existing Synthetic Lease Facility (in each case, other than customary
indemnification obligations) and all liens, guarantees and security interests
granted in respect thereof (including all adequate protection obligations
related thereto) shall have been discharged, and the terms and conditions of
such discharge shall be satisfactory to the Administrative Agent.  The Administrative Agent shall have received
payoff and release letters with respect to each of the Existing Credit
Agreement and the Existing Synthetic Lease Facility in form and substance
reasonably satisfactory to the Administrative Agent.


 


(l) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by a Financial Officer, confirming that since
December 31, 2003, there has been no event, change, condition,
circumstance or state of facts or aggregation of events, changes, conditions,
circumstances or state of facts, that has had or could reasonably be expected
to have, individually or in the aggregate, (i) a material adverse effect
on the business, operations, assets, liabilities, financial condition or
results of operations of Holdings, the Borrower and the Subsidiaries taken as a
whole, or (ii) a material adverse effect on the ability of the Borrower to
perform its obligations under the Loan


 


65





















 


Documents, provided
that for purposes of this paragraph (l) only, a “material adverse effect”
shall be deemed not to include a material adverse effect arising directly as a
result of changes or proposed changes in laws that result in changes in
reimbursement by Government Programs (it being understood that any change or
proposal of a change in pricing or reimbursement by any commercial entities
(other than Government Programs) that has had or could reasonably be expected
to have a material adverse effect on the business, operations, assets,
liabilities, financial condition or results of operations of Holdings, the
Borrower and the Subsidiaries, taken as a whole, shall be deemed to be a
material adverse effect for purposes of this paragraph (l)).


 


(m) The Lenders shall have received (i) audited consolidated
balance sheets and consolidated statements of operations and comprehensive
income, stockholders’ equity and cash flows of the Borrower as of and for the
fiscal years ended December 31, 2001, December 31, 2002, and
December 31, 2003, and the related notes thereto, accompanied by a true and
correct copy of the reports thereon by PricewaterhouseCoopers LLP, independent
public accountants, and (ii) unaudited consolidated balance sheets and
consolidated statements of operations and comprehensive income, stockholders’
equity and cash flows of the Borrower as of and for the fiscal quarter and the
portion of the fiscal year ended June 30, 2004 (and comparable period for
the prior fiscal year), prepared in accordance with GAAP consistently applied
(subject to year-end audit adjustments and the absence of footnotes in the case
of the statements in this clause (ii)), certified by a Financial Officer.


 


(n) The Administrative Agent shall have received a certificate, dated
the Effective Date and signed by the president or a vice president of the
Borrower or a Financial Officer, in form and substance satisfactory to the
Administrative Agent, together with such other evidence reasonably requested by
the Lenders, confirming the solvency of the Borrower and the Subsidiaries on a
consolidated basis after giving effect to the Transactions.


 


(o) The Transactions shall have been consummated or shall be
consummated simultaneously with the Effective Date (other than the Delayed
Equity Payments, which will be paid after the Effective Date) in accordance
with applicable law, the Merger Agreement and all other related documentation
(without giving effect to any amendments or waivers to or of such documents
that are adverse to the Lenders not approved by the Lenders).  No more than 8% of the outstanding common
stock of the Borrower at the time the Merger is consummated shall constitute
shares held by holders who properly exercise appraisal rights.


 


66





















 


(p) The Equity Contribution shall have been made.


 


(q) The Debt Tender Offer shall have been consummated or shall be
consummated simultaneously with the initial funding of the Loans.


 


(r) There shall be no litigation, arbitration, administrative
proceeding or consent decree that could reasonably be expected to have a
material adverse effect on (a) the business, operations, performance,
properties, condition (financial or otherwise), prospects or material
agreements of or applicable to Holdings, the Borrower or the Subsidiaries,
taken as a whole, after giving effect to the Transactions or (b) the
ability of the parties to consummate the Transactions.


 


(s) The Lenders shall be reasonably satisfied in all respects with any
tax sharing agreements among Holdings, the Borrower and the Subsidiaries after
giving effect to the Transactions, and with the plans of Holdings with respect
thereto.


 


(t) The consummation of the Transactions shall not (i) violate any
applicable law, statute, rule or regulation or (ii) result in a default or
event of default under, any material agreement of Holdings, the Borrower or any
Subsidiary, after giving effect to the Transactions.


 


(u) The Lenders shall have received a certificate, dated the Effective
Date and signed by a financial officer of Holdings, certifying that, after
giving effect to the Transactions, (i) the Leverage Ratio for the period
of four fiscal quarters ending on June 30, 2004, determined on a pro forma
basis after giving effect to the Transactions, does not exceed 5.25 to 1.00,
(ii) Consolidated EBITDA for the most recent twelve-month period ending at
least 45 days prior to the Effective Date is greater than $210,000,000 and
(iii) Pro Forma Adjusted EBITDA for the most recent twelve-month period
ending at least 45 days prior to the Effective Date is greater than
$165,000,000.


 


The Administrative Agent shall
notify the Borrower and the Lenders of the Effective Date, and such notice
shall be conclusive and binding. 
Notwithstanding the foregoing, the obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 5:00 p.m., New York
City time, on August 31, 2004 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).


 


67





















 


SECTION 4.02. Each
Credit Event. 
The obligation of each Lender to make any Loan and of the Issuing Bank
to issue, amend, renew or extend any Letter of Credit, is subject to receipt of
the request therefor in accordance herewith and to the satisfaction of the
following conditions:


 


(a) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct in all material respects (except
to the extent any such representation or warranty is qualified by “materially,”
“Material Adverse Effect” or a similar term, in which case such representation
and warranty shall be true and correct in all respects) on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct (or true and correct
in all material respects, as the case may be) as of such earlier date).


 


(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.


 


Each Borrowing (provided
that a conversion or continuation of a Borrowing shall not constitute a
“Borrowing” for purposes of this Section 4.02) and each issuance,
amendment, renewal or extension of a Letter of Credit shall be deemed to
constitute a representation and warranty by Holdings and the Borrower on the
date thereof as to the matters specified in paragraphs (a) and (b) of this
Section.


 


ARTICLE V


 


Affirmative
Covenants


 


Until the
Commitments have expired or been terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan
Document shall have been paid in full and all Letters of Credit shall have
expired or terminated and all LC Disbursements shall have been reimbursed,
each of Holdings and the Borrower covenants and agrees with the Lenders that:


 


SECTION 5.01. Financial
Statements and Other Information.  The Borrower will furnish to the
Administrative Agent (for distribution to each Lender):


 


(a) within 90 days (or such shorter period as the SEC shall
specify for the filing of annual reports on Form 10-K) after the end of each
fiscal year of the Borrower, its audited consolidated balance sheet and
consolidated statements of operations and comprehensive income, stockholders’
equity and cash flows as of the end of and for such fiscal year, and the
related notes thereto, setting forth in each case in


 


68





















 


comparative
form the figures for the previous fiscal year, all reported on by independent
public accountants of recognized national standing (without a “going concern”
or like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and the Subsidiaries on a consolidated
basis in accordance with GAAP consistently applied;


 


(b) within 45 days (or such shorter period as the SEC shall
specify for the filing of quarterly reports on Form 10-Q) after the end of each
of the first three fiscal quarters of each fiscal year of the Borrower, its
consolidated balance sheet and consolidated statements of operations and
comprehensive income, stockholders’ equity and cash flows as of the end of and
for such fiscal quarter and the then-elapsed portion of the fiscal year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous fiscal year, all certified by a Financial Officer as presenting
fairly in all material respects the financial condition and results of
operations of the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;


 


(c) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed
calculations (A) demonstrating compliance with Sections 6.12, 6.13
and 6.14 (including (x) any prepayment of the Loans as set forth in the
definition of “Leverage Ratio” and (y) any exercise of the rights set
forth in Section 7.02) and (B) in the case of financial statements
delivered under paragraph (a) above beginning in 2006 with respect to
fiscal year 2005, of Excess Cash Flow and (iii) stating whether any change
in GAAP or in the application thereof has occurred since the date of the Borrower’s
audited financial statements referred to in Section 3.04 and, if any such
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;


 


(d) concurrently with any delivery of financial statements under paragraph (a)
or (b) above, a report with respect to the fiscal period covered by the
financial statements being delivered, certified by a Financial Officer and in
form and substance reasonably satisfactory to the Agents, setting forth the
details of each (i) new Management Services Agreement,
(ii) conversion of a Management Services


 


69





















 


Agreement from
the “net revenue model” to the “earnings model” or other material change to a
Management Services Agreement and (iii) termination of a Management
Services Agreement, including whether such termination was in connection with a
PPM Asset Disposition;


 


(e) concurrently with any delivery of financial statements under
paragraph (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during the
course of their examination of such financial statements of any Default and, if
such knowledge has been obtained, describing such Default (which certificate
may be limited to the extent required by accounting rules or guidelines);


 


(f) within 30 days after the commencement of each fiscal year of
the Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and consolidated statements of projected
operations, comprehensive income and cash flows as of the end of and for such
fiscal year and setting forth the assumptions used for purposes of preparing
such budget) and, promptly when available, any significant revisions of such
budget;


 


(g) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the SEC or with any national securities
exchange, as applicable; and


 


(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of Holdings,
the Borrower or any Subsidiary or any Plan, or compliance with the terms of any
Loan Document, as the Administrative Agent or any Lender may reasonably
request.


 


SECTION 5.02. Notices
of Material Events.  Holdings and the Borrower will furnish to the
Administrative Agent (for distribution to each Lender), through the
Administrative Agent, written notice of the following promptly after obtaining
knowledge thereof:


 


(a) the occurrence of any Default;


 


(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting Holdings,
the Borrower, any Subsidiary or any Affiliated Practice that, if adversely
determined, is reasonably likely to result in a Material Adverse Effect;


 


(c) the occurrence of any ERISA Event that alone or together with any
other ERISA Events that have occurred, could reasonably be


 


70





















 


expected to
result in liability of the Borrower and the Subsidiaries in an aggregate amount
exceeding $5,000,000;


 


(d) the receipt by Holdings, the Borrower or any Subsidiary or, to the
knowledge of Holdings or the Borrower, any Affiliated Practice of (i) any
notice of any loss of (A) accreditation from the Joint Commission on
Accreditation of Healthcare Organizations or (B) any governmental right,
qualification, permit, accreditation, approval, authorization, Reimbursement
Approval, license or franchise or (ii) any notice, compliance order or
adverse report issued by any Governmental Authority or Third Party Payor that,
if not promptly complied with or cured, could result in (A) the suspension
or forfeiture of any material governmental right, qualification, permit,
accreditation, approval, authorization, Reimbursement Approval, license or
franchise necessary for the Borrower, any Subsidiary or any Affiliated Practice
to carry on its business as now conducted or as proposed to be conducted or
(B) any other material Limitation imposed upon the Borrower, any
Subsidiary or any Affiliated Practice;


 


(e) any Change in Law of the type described in clause (a) or (b)
of such definition relating to any Third Party Payor Arrangement that could
reasonably be expected to have a material and adverse effect on the ability of
the Borrower, any Subsidiary or any Affiliated Practice to carry on its
business as now conducted or as proposed to be conducted; and


 


(f) any other development that results in, or is reasonably likely to
result in, a Material Adverse Effect.


 


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


 


SECTION 5.03. Information Regarding
Collateral. 
(a)  The Borrower will furnish to
the Collateral Agent prompt written notice of any change (i) in any Loan
Party’s corporate name, (ii) in the jurisdiction of incorporation or
organization of any Loan Party or (iii) in any Loan Party’s organizational
identification number.  The Borrower
agrees not to effect or permit any change referred to in the preceding sentence
unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at
all times following such change to have a valid, legal and perfected security
interest in all the Collateral.  The
Borrower also agrees promptly to notify the Collateral Agent if any material
portion of the Collateral is damaged or destroyed.


 


(b)  Each year, at the time of delivery of annual
financial statements pursuant to Section 5.01(A), the Borrower shall
deliver to the Collateral Agent a


 


71





















 


certificate executed by a Financial Officer
and the chief legal officer of the Borrower setting forth the information
required pursuant to the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate
delivered on the Effective Date or the date of the most recent certificate
delivered pursuant to this Section.


 


SECTION 5.04. Existence; Conduct of
Business. 
Each of Holdings and the Borrower will, and will cause each of the
Subsidiaries to, do or cause to be done all things necessary to preserve, renew
and keep in full force and effect its legal existence and the rights,
qualifications, permits, approvals, accreditations, authorizations,
Reimbursement Approvals, licenses, franchises, patents, copyrights, trademarks
and trade names material to the conduct of its business, provided that
the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 6.03.


 


SECTION 5.05. Payment of Obligations.  Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, pay its Tax liabilities, before the
same shall become delinquent or in default, except where (a) the validity
or amount thereof is being contested in good faith by appropriate proceedings,
(b) Holdings, the Borrower or such Subsidiary has set aside on its books
adequate reserves with respect thereto in accordance with GAAP, (c) such
contest effectively suspends the enforcement of any Lien securing such
obligation and (d) the failure to make payment pending such contest is not
reasonably likely to result in a Material Adverse Effect.


 


SECTION 5.06. Maintenance of Properties.  Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted.


 


SECTION 5.07. Insurance.  Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, maintain, with financially sound and
reputable insurance companies (which may include self-insurance),
(a) insurance in such amounts (with no greater risk retention) and against
such risks as are customarily maintained by companies of established repute
engaged in the same or similar businesses operating in the same or similar
locations and (b) all insurance required to be maintained pursuant to the
Security Documents.  The Borrower will
furnish to the Lenders, upon request of the Administrative Agent, information
in reasonable detail as to the insurance so maintained.


 


SECTION 5.08. Casualty and Condemnation.  The Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or
other insured damage to any material portion of the Collateral or the
commencement of any action or proceeding for the taking of any material portion
of the Collateral or interest therein under power of eminent domain or by
condemnation or similar proceeding and (b) will ensure that the Net
Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of this Agreement and the Security Documents.


 


72





















 


SECTION 5.09. Books and Records;
Inspection and Audit Rights.  Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, keep proper books of record and account
in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities.  Each of Holdings and the Borrower will, and
will cause each of the Subsidiaries to, permit any representatives designated
by the Administrative Agent or any Lender, upon reasonable prior notice, to
visit and inspect its properties during normal business hours, to examine and
make extracts from its books and records, including environment assessment
reports and Phase I or Phase II studies, and to discuss its affairs,
finances and condition with its officers and independent accountants (provided
that the Borrower shall be provided the opportunity to participate in any such
discussions with its independent accountants), all at such reasonable times and
as often as reasonably requested.


 


SECTION 5.10. Compliance with Laws.  Each of Holdings and the Borrower will, will
cause each of the Subsidiaries and will use commercially reasonable efforts to
cause each of the Affiliated Practices to, comply with all Requirements of Law,
including Environmental Laws, applicable to it or its property, except where
the failure to do so, individually or in the aggregate, is not reasonably
likely to result in a Material Adverse Effect.


 


SECTION 5.11. Use of Proceeds and Letters
of Credit. 
The proceeds of the Tranche B Term Loans will be used only for
(a) first, the payment of the Transaction Costs, (b) second, the
payment of all loans and other amounts accrued and owing under the Existing
Credit Agreement and the Existing Synthetic Lease Facility, (c) third, the
repurchase of the Existing Senior Subordinated Notes tendered (and not
withdrawn) pursuant to the Debt Tender Offer, including any premiums associated
therewith and (d) fourth, together with the Equity Contribution and the
proceeds of the Senior Notes and the Senior Subordinated Notes, the payment of
the Merger Consideration.  The proceeds
of the Revolving Loans, Swingline Loans and Letters of Credit will be used only
for working capital and for other general corporate purposes.  No part of the proceeds of any Loan and no
Letter of Credit will be used, whether directly or indirectly, for any purpose
that entails a violation of any of the Regulations of the Board, including
Regulations T, U and X.


 


SECTION 5.12. Additional Subsidiaries.  If any additional Subsidiary is formed or
acquired after the Effective Date (or if any Inactive Subsidiary or Permitted
Joint Venture ceases to qualify as an Inactive Subsidiary or Permitted Joint
Venture, as applicable), the Borrower will, promptly after such Subsidiary is
formed or acquired, notify the Collateral Agent and the Lenders (through the
Administrative Agent) thereof and promptly cause the Collateral and Guarantee
Requirement to be satisfied with respect to such Subsidiary (if it is a
Subsidiary Loan Party) and with respect to any Equity Interest in or
Indebtedness of such Subsidiary owned by or on behalf of any Loan Party.


 


SECTION 5.13. Further Assurances.  (a) 
Each of Holdings and the Borrower will, and will cause each Subsidiary
Loan Party to, execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings,


 


73





















 


mortgages, deeds of trust and other
documents), which may be required under any applicable law, or which the
Administrative Agent or the Required Lenders may reasonably request, to cause
the Collateral and Guarantee Requirement to be and remain satisfied, all at the
expense of the Loan Parties.  Each of
Holdings and the Borrower also agrees to provide to the Collateral Agent, from
time to time upon reasonable request, evidence reasonably satisfactory to the
Administrative Agent as to the perfection and priority of the Liens created or
intended to be created by the Security Documents.


 


(b)  If any material assets (including any real
property or improvements thereto or any interest therein, other than any real
property with a fair value of less than $1,500,000) are acquired by the
Borrower or any Subsidiary Loan Party after the Effective Date (other than
assets constituting Collateral under the Collateral Agreement that become
subject to the Lien in favor of the Collateral Agreement upon acquisition
thereof), the Borrower will notify the Administrative Agent and the Lenders
thereof, and, if requested by the Administrative Agent or the Required Lenders,
the Borrower will cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the Subsidiary Loan Parties to take, such
actions as shall be necessary or reasonably requested by the Administrative
Agent to grant and perfect such Liens, including actions described in
paragraph (a) of this Section, all at the expense of the Loan Parties, provided
that the Collateral Agent may, in its reasonable judgment, grant extensions of
time for compliance or exceptions with the provisions of this paragraph by any
Loan Party.


 


SECTION 5.14. Interest Rate Protection.  As promptly as practicable, and in any event
within 90 days after the Effective Date, the Borrower will enter into, and
thereafter for a period of not less than three years will maintain in effect,
one or more Swap Agreements, if and to the extent necessary so that at least
50% of Funded Debt will bear interest at a fixed rate or the interest cost in
respect of which will be fixed, in each case on terms and conditions reasonably
acceptable, taking into account current market conditions, to the
Administrative Agent.


 


ARTICLE VI


 


Negative
Covenants


 


Until the
Commitments have expired or been terminated and the principal of and interest
on each Loan and all fees, expenses and other amounts payable under any Loan
Document have been paid in full and all Letters of Credit have expired or
terminated and all LC Disbursements shall have been reimbursed, each of
Holdings and the Borrower covenants and agrees with the Lenders that:


 


SECTION 6.01. Indebtedness;
Certain Equity Securities.  (a) 
Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:


 


(i)  Indebtedness created under
the Loan Documents;


 


74





















 


(ii)  the Senior Subordinated
Notes and the Senior Notes;


 


(iii)  the Physician Notes;


 


(iv)  the Existing Senior
Subordinated Notes;


 


(v)  Indebtedness existing on the
date hereof and set forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness, provided that such extending,
renewal or replacement Indebtedness (A) shall not be Indebtedness of an
obligor that was not an obligor with respect to the Indebtedness being extended,
renewed or replaced, (B) shall not be in a principal amount that exceeds
the principal amount of the Indebtedness being extended, renewed or replaced
(plus accrued interest and premium thereon), (C) shall not have an earlier
maturity date or a decreased weighted average life than the Indebtedness being
extended, renewed or replaced and (D) shall be subordinated to the
Obligations on the same terms (or, from a Lender’s perspective, better terms)
as the Indebtedness being extended, renewed or replaced;


 


(vi)  (A) Indebtedness of
the Borrower owed to any Subsidiary and of any Subsidiary owed to the Borrower
or any other Subsidiary, provided that (1) Indebtedness of any
Subsidiary that is not a Loan Party owed to the Borrower or any Subsidiary Loan
Party shall be subject to Section 6.04 and (2) Indebtedness of the
Borrower owed to any Subsidiary and Indebtedness of any Subsidiary Loan Party
owed to the Borrower or any other Subsidiary shall be subordinated to the
Obligations on terms reasonably satisfactory to the Administrative Agent and
(B) Indebtedness of the Borrower owed to any Insurance Subsidiary, provided
that the aggregate amount of Indebtedness permitted pursuant to this clause
(vi)(B) shall not exceed $3,000,000 at any time outstanding;


 


(vii)  Guarantees by the Borrower
of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the
Borrower or any other Subsidiary, provided that (A) the
Indebtedness so Guaranteed is permitted by this Section 6.01,
(B) Guarantees by the Borrower or any Subsidiary Loan Party of
Indebtedness of any Subsidiary that is not a Loan Party shall be subject to
Section 6.04, (C) Guarantees permitted under this clause (vii)
shall be subordinated to the Obligations of the Borrower or the applicable Subsidiary
to the same extent and on the same terms as the Indebtedness so Guaranteed is
subordinated to the Obligations and (D) none of the Senior Notes, the
Senior Subordinated Notes, any Additional Subordinated Debt, any Additional
Senior Debt or the Existing Senior Subordinated Notes shall be Guaranteed by
any Subsidiary that is not a Subsidiary Loan Party;


 


(viii)  Indebtedness of the
Borrower or any Subsidiary incurred to finance the acquisition, construction or
improvement of any fixed or


 


75





















 


capital
assets, including Capital Lease Obligations, and any Indebtedness assumed by
the Borrower or any Subsidiary in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals and replacements of any such Indebtedness
that do not increase the outstanding principal amount thereof (including the
principal and any accrued but unpaid interest or premium in respect thereof), provided
that (A) such Indebtedness is incurred prior to or within 120 days
after such acquisition or the completion of such construction or improvement
and (B) the aggregate principal amount of Indebtedness permitted by this
clause (viii) shall not exceed at any time outstanding the greater of (x)
$25,000,000 and (y) 3.0% of Consolidated Tangible Assets as of the end of the
immediately preceding fiscal quarter;


 


(ix)  (A) Indebtedness of
any Person that becomes a Subsidiary after the date hereof, provided
that (1) such Indebtedness exists at the time such Person becomes a
Subsidiary and is not created in contemplation of or in connection with such
Person becoming a Subsidiary and (2) the aggregate amount of Indebtedness
permitted by this clause (ix) shall not exceed $25,000,000 at any
time outstanding and (B) any refinancings, renewals and replacements of
any such Indebtedness pursuant to the preceding clause (A) that do not
increase the outstanding principal amount (plus accrued interest and premium)
thereof;


 


(x)  Indebtedness owed to any
Person (including obligations in respect of letters of credit for the benefit
of such Person) providing workers’ compensation, health, disability or other
employee benefits or property, casualty or liability insurance, pursuant to
reimbursement or indemnification obligations to such Person, in each case
incurred in the ordinary course of business;


 


(xi)  Indebtedness of the
Borrower or any Subsidiary in respect of performance bonds, bid bonds, appeal
bonds, surety bonds, performance and completion guarantees and similar
obligations, in each case provided in the ordinary course of business;


 


(xii)  Indebtedness of any Loan
Party pursuant to Swap Agreements permitted by Section 6.07;


 


(xiii)  Qualified Sponsor Notes
issued by Holdings (including refinancings or replacements thereof using newly
issued Qualified Sponsor Notes that do not increase the aggregate principal
amount thereof), provided that the aggregate amount of Qualified Sponsor
Notes shall not exceed $50,000,000 at any time outstanding (other than any
(A) additional principal amounts resulting from the accrual of pay-in-kind
interest and (B) Qualified Sponsor Notes, the Net Proceeds of which are


 


76





















 


promptly
contributed to the Borrower upon receipt and used by the Borrower to prepay
Tranche B Term Loans pursuant to Section 2.11(a));


 


(xiv)  Additional Subordinated
Debt, provided that the Net Proceeds of such Additional Subordinated
Debt are used, promptly after such Net Proceeds are received by the Borrower
(A) to consummate one or more Permitted Acquisitions so long as (1) the
aggregate principal amount of Additional Subordinated Debt used pursuant to
this clause (A) does not exceed $75,000,000 and (2) after giving effect to the
incurrence of such Additional Subordinated Debt and such Permitted Acquisitions
on a Pro Forma Basis, the Leverage Ratio would be less than the Leverage Ratio
set forth in Section 6.13 for such day minus 0.25, (B) to refinance
or replace the Senior Notes or Senior Subordinated Notes so long as
(1) such Additional Subordinated Debt is in an aggregate principal amount
not more than the aggregate principal amount of the Senior Notes and Senior
Subordinated Notes being refinanced or replaced (including the principal and any
accrued but unpaid interest or premium in respect thereof) and (2) such
Additional Subordinated Debt has a maturity date no earlier than the maturity
date of the Senior Notes and Senior Subordinated Notes being refinanced or
replaced or (C) to prepay Tranche B Term Loans pursuant to Section 2.11(a);


 


(xv)  Indebtedness representing
deferred compensation to employees of the Borrower and the Subsidiaries
incurred in the ordinary course of business;


 


(xvi)  Indebtedness in respect of
promissory notes issued to physicians, consultants, employees or directors or
former employees, consultants or directors in connection with repurchases of
Equity Interests permitted by Section 6.08(a)(iii);


 


(xvii)  Guarantees by the
Borrower or any Subsidiary of Indebtedness of any Permitted Real Estate Joint
Venture, provided that the aggregate principal amount of Indebtedness
subject to such Guarantees shall not exceed $50,000,000 at any time
outstanding;


 


(xviii)  other unsecured
Indebtedness of the Borrower or any Subsidiary in an aggregate principal amount
not exceeding $25,000,000 at any time outstanding; and


 


(xix)  Additional Senior Debt, to
the extent the Net Proceeds of such Additional Senior Debt are used, promptly
after such Net Proceeds are received by the Borrower, to prepay Tranche B Term
Loans pursuant to Section 2.11(a).


 


(b)  The Borrower will not, and Holdings and the
Borrower will not permit any Subsidiary to, issue any preferred Equity
Interests.


 


77





















 


(c)  Holdings will not issue any preferred Equity
Interests other than Qualified Preferred Stock.


 


SECTION 6.02. Liens.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:


 


(i)  Liens created under the Loan
Documents;


 


(ii)  Permitted Encumbrances;


 


(iii)  any Lien on any property
or asset of the Borrower or any Subsidiary existing on the date hereof and set
forth in Schedule 6.02, provided that (A) such Lien shall not
apply to any other property or asset of the Borrower or any Subsidiary and
(B) such Lien shall secure only those obligations which it secures on the
date hereof and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof (plus accrued interest and
premium thereon);


 


(iv)  any Lien existing on any property
or asset prior to the acquisition thereof by the Borrower or any Subsidiary or
existing on any property or asset of any Person that becomes a Subsidiary after
the date hereof prior to the time such Person becomes a Subsidiary, provided
that (A) such Lien is not created in contemplation of or in connection
with such acquisition or such Person becoming a Subsidiary, as applicable,
(B) such Lien shall not apply to any other property or asset of the
Borrower or any Subsidiary and (C) such Lien shall secure only those
obligations that it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as applicable, and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof (plus accrued interest and premium thereon);


 


(v)  Liens on fixed or capital
assets acquired, constructed or improved by the Borrower or any Subsidiary, provided
that (A) such security interests secure Indebtedness permitted by
clause (viii) of Section 6.01(a), (B) such security interests
and the Indebtedness secured thereby are incurred prior to or within
120 days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed 100% of
the cost of acquiring, constructing or improving such fixed or capital assets
and (D) such security interests shall not apply to any other property or
assets of the Borrower or any Subsidiary;


 


(vi)  Liens of a collecting bank
arising in the ordinary course of business under Section 4-208 of
the Uniform Commercial Code in effect in the relevant jurisdiction covering
only the items being collected upon;


 


78





















 


(vii)  Liens arising out of sale
and leaseback transactions permitted by Section 6.06;


 


(viii)  Liens granted by a
Subsidiary that is not a Loan Party in favor of the Borrower or another Loan
Party in respect of Indebtedness owed by such Subsidiary;


 


(ix)  licenses, sublicenses,
leases or subleases granted to others not interfering in any material respect
with the business of the Borrower or any Subsidiary;


 


(x)  the right of any Person to
purchase assets relating to any Affiliated Practice upon the termination of the
Management Services Agreement applicable to such Affiliated Practice, to the
extent provided for in such Management Services Agreement; and


 


(xi)  Liens on assets of the
Borrower or the Subsidiaries not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds $5,000,000 at
any time outstanding, provided that in no event shall Holdings, the Borrower or
any Subsidiary create, incur, assume or permit to exist any Lien on any Equity
Interests of the Borrower, any Subsidiary or any Permitted Real Estate Joint
Venture.


 


SECTION 6.03. Fundamental Changes.  (a) 
Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any
other Person to merge into or consolidate with it, or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing, (i) any Person may merge
into the Borrower in a transaction in which the surviving entity is a Person
organized or existing under the laws of the United States of America, any State
thereof or the District of Columbia and, if such surviving entity is not the
Borrower, such Person expressly assumes, in writing, all the obligations the
Borrower under the Loan Documents, (ii) any Person may merge into any
Subsidiary in a transaction in which the surviving entity is a Subsidiary and,
if any party to such merger is a Subsidiary Loan Party, is or becomes a
Subsidiary Loan Party concurrently with such merger, (iii) any Subsidiary
(other than a Subsidiary Loan Party) may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in the best
interests of the Borrower and is not materially disadvantageous to the Lenders
and (iv) any asset sale permitted by Section 6.05(h) may be effected
through the merger of a subsidiary of the Borrower with a third party, provided
that any such merger referred to in clauses (i), (ii) or (iv) above
involving a Person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by Section 6.04.


 


79





















 


(b)  The Borrower will not, and Holdings and the
Borrower will not permit any Subsidiary to, engage to any material extent in
any business other than businesses of the type conducted by the Borrower and
the Subsidiaries on the Effective Date and businesses reasonably related or
incidental thereto.


 


(c)  Holdings will not engage in any business or
activity other than the ownership of all the outstanding shares of capital
stock of the Borrower and engaging in corporate and administrative functions
and other activities incidental thereto. 
Holdings will not own or acquire any assets (other than Equity Interests
of the Borrower and the cash proceeds of any Restricted Payments permitted by
Section 6.08 or proceeds of any issuance of Indebtedness or Equity
Interests permitted by this Agreement pending application as required by this
Agreement) or incur any liabilities (other than liabilities under the Loan
Documents and liabilities reasonably incurred in connection with its
maintenance of its existence and activities incidental thereto).


 


SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions.  Neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to,
purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any Equity
Interests in or evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person,
or purchase or otherwise acquire (in one transaction or a series of
transactions) any assets of any other Person constituting a business unit,
except:


 


(i)  Permitted Acquisitions, provided
that the aggregate purchase price, which shall be deemed to include
(A) any amounts actually paid pursuant to any post-closing payment
adjustments, earn-outs or non-compete payments and (B) the principal
amount of Indebtedness that is assumed pursuant to Section 6.01(a)(ix) or
otherwise incurred in connection with such Permitted Acquisition, shall not
exceed $50,000,000 in any fiscal year and $100,000,000 in the aggregate plus,
in each case (without duplication) (x) the Net Proceeds of the issuance of
Permitted Securities and Qualified Sponsor Notes (to the extent that such Net
Proceeds are used to pay a portion of such purchase price) and (y) an
amount equal to any returns of capital or sale proceeds actually received in
cash in respect of any such Permitted Acquisition (which amount shall not
exceed the purchase price paid (including the principal amount of Indebtedness
assumed pursuant to Section 6.01(a)(ix) in connection therewith) in
respect of such Permitted Acquisition);


 


(ii)  Permitted Investments;


 


(iii)  investments existing on
the date hereof and set forth on Schedule 6.04;


 


80





















 


(iv)  investments by Holdings in
the Borrower and by the Borrower and the Subsidiaries in Equity Interests in
their respective Subsidiaries, provided that (A) any such Equity
Interests held by a Loan Party shall be pledged pursuant to the Collateral
Agreement (subject to the limitations applicable to common stock of a Foreign
Subsidiary referred to in the definition of “Collateral and Guarantee
Requirement”) and (B) the aggregate amount of investments (other than
investments set forth on Schedule 6.04) by Loan Parties in Subsidiaries
that are not Loan Parties (together with outstanding intercompany loans
permitted under clause (B) to the proviso to Section 6.04(v) and
outstanding Guarantees permitted under clause (B) to the proviso to
Section 6.04(vi)) shall not exceed $5,000,000 at any time outstanding (in
each case determined without regard to any write-downs or write-offs);


 


(v)  loans or advances made by
the Borrower to any Subsidiary and made by any Subsidiary to the Borrower or
any other Subsidiary, provided that (A) any such loans and advances
made by a Loan Party shall be evidenced by a promissory note pledged pursuant
to the Collateral Agreement and (B) the amount of such loans and advances
made by Loan Parties to Subsidiaries that are not Loan Parties (together with
outstanding investments permitted under clause (B) to the proviso to
Section 6.04(iv) and outstanding Guarantees permitted under
clause (B) to the proviso to Section 6.04(vi)) shall not exceed
$5,000,000 at any time outstanding (in each case determined without regard to
any write-downs or write-offs);


 


(vi)  Guarantees constituting
Indebtedness permitted by Section 6.01, provided that (A) a
Subsidiary shall not Guarantee Senior Notes, the Senior Subordinated Notes, the
Existing Subordinated Notes, any Additional Subordinated Debt or any Additional
Senior Debt unless (1) such Subsidiary also has Guaranteed the Obligations
pursuant to the Collateral Agreement and (2) such Guarantee of the Senior
Subordinated Notes, the Existing Subordinated Notes or any Additional
Subordinated Debt, as applicable, is subordinated to such Guarantee of the
Obligations to the same extent as and on terms no less favorable to the Lenders
than the subordination provisions of the Senior Subordinated Notes, the
Existing Subordinated Notes or any Additional Subordinated Debt, as applicable,
and (B) the aggregate principal amount of Indebtedness of Subsidiaries
that are not Loan Parties that is Guaranteed by any Loan Party (together with
outstanding investments permitted under clause (B) to the proviso to
Section 6.04(iv) and outstanding intercompany loans permitted under
clause (B) to the proviso to Section 6.04(v)) shall not exceed
$5,000,000 at any time outstanding (in each case determined without regard to
any write-downs or write-offs);


 


(vii)  receivables or other trade
payables owing to the Borrower or any Subsidiary or Affiliated Practice if
created or acquired in the ordinary course of business consistent with past
practice and payable or


 


81





















 


dischargeable
in accordance with customary trade terms, provided that such trade terms
may include such concessionary trade terms as the Borrower or any such
Subsidiary deems reasonable under the circumstances;


 


(viii)  investments consisting of
Equity Interests, obligations, securities or other property received in
settlement of delinquent accounts of and disputes with customers and suppliers
in the ordinary course of business and owing to the Borrower or any Subsidiary
or in satisfaction of judgments;


 


(ix)  investments by the Borrower
or any Subsidiary in payroll, travel and similar advances to cover matters that
are expected at the time of such advances ultimately to be treated as expenses
for accounting purposes and that are made in the ordinary course of business;


 


(x)  loans or advances by the
Borrower or any Subsidiary to employees made in the ordinary course of business
(including travel, entertainment and relocation expenses) of the Borrower or
any Subsidiary not exceeding $3,000,000 in the aggregate at any time
outstanding (determined without regard to any write-downs or write-offs of such
loans or advances);


 


(xi)  investments in the form of
Swap Agreements permitted by Section 6.07;


 


(xii)  investments of any Person
existing at the time such Person becomes a Subsidiary of the Borrower or
consolidates or merges with the Borrower or any of the Subsidiaries (including
in connection with a Permitted Acquisition) so long as such investments were
not made in contemplation of such Person becoming a Subsidiary or of such
consolidation or merger;


 


(xiii)  investments received in
connection with the dispositions of assets permitted by Section 6.05;


 


(xiv)  investments constituting
deposits described in clauses (c) and (d) of the definition of the term “Permitted
Encumbrances”;


 


(xv)  investments, loans and
advances by the Borrower or any Subsidiary in Permitted Real Estate Joint
Ventures, as valued at the time each such investment is made (and including all
commitments for future investments) not exceeding (A) $5,000,000 in any
fiscal year and (B) $20,000,000 in the aggregate for all such investments,
loans and advances made from and after the Effective Date, plus an amount equal
to any returns of capital or sale proceeds actually received in cash in respect
of any such investments (which amount shall not exceed the amount of such
investment valued at cost at the time such investment was made);


 


82





















 


(xvi)  other investments, loans
and advances by the Borrower or any Subsidiary (including investments in
Permitted Joint Ventures, but excluding investments in Insurance Subsidiaries)
in an aggregate amount, as valued at cost at the time each such investment is
made and including all related commitments for future advances (together with
loans and advances to Affiliated Practices permitted under clause (xvii)
of this Section 6.04), not exceeding $30,000,000 in the aggregate for all
such investments made from and after the Effective Date plus an amount equal to
any returns of capital actually received in cash in respect of any such
investments (which amount shall not exceed the amount of such investment valued
at cost at the time such investment was made);


 


(xvii)  loans and advances to
Affiliated Practices in the ordinary course of business and consistent with
past practice in an aggregate amount (together with investments permitted under
clause (xvi) of this Section 6.04) not to exceed $30,000,000 at any
time outstanding; and


 


(xviii)  investments, loans and
advances by the Borrower or any Subsidiary to any Insurance Subsidiary in an
aggregate amount not exceeding $10,000,000.


 


SECTION 6.05. Asset Sales.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, sell, transfer, lease or otherwise dispose
of any asset, including any Equity Interest owned by it, nor will the Borrower
permit any Subsidiary to issue any additional Equity Interest in such
Subsidiary (other than to the Borrower or another Subsidiary in compliance with
Section 6.04), except:


 


(a)  sales, transfers and dispositions of
(i) inventory in the ordinary course of business and (ii) used,
obsolete, worn out or surplus equipment or property in the ordinary course of
business;


 


(b)  sales, transfers and dispositions to the
Borrower or any Subsidiary, provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;


 


(c)  sales, transfers and dispositions of accounts
receivable in connection with the compromise, settlement or collection thereof
consistent with past practice;


 


(d)  sales, transfers and dispositions of property
to the extent such property constitutes an investment permitted by
clauses (ii), (viii), (xii) and (xiv) of Section 6.04;


 


(e)  sale and leaseback transactions permitted by
Section 6.06;


 


(f)  PPM Asset Dispositions, provided that
the aggregate fair value of all assets sold, transferred or otherwise disposed
of in reliance of this paragraph (f) (together with all sales, transfers and
other dispositions of assets made in reliance on paragraph (h) of this
Section 6.05) shall not exceed $100,000,000 during the term of this
Agreement;


 


83


















 


(g)  dispositions resulting from
any casualty or other insured damage to, or any taking under power of eminent
domain or by condemnation or similar proceeding of, any property or asset of
the Borrower or any Subsidiary;


 


(h)  sales, transfers and other
dispositions of assets (other than (i) Equity Interests in a Subsidiary
unless all Equity Interests in such Subsidiary are sold and (ii) transfers
of real property to any Permitted Real Estate Joint Venture) that are not
permitted by any other paragraph of this Section, provided that the
aggregate fair value of all assets sold, transferred or otherwise disposed of
in reliance upon this paragraph (h) (together with all PPM Asset
Dispositions made in reliance on paragraph (f) of this Section 6.05)
shall not exceed $100,000,000 during the term of this Agreement;


 


(i)  transfers of real property
owned by the Borrower or any Subsidiary on the Effective Date and listed on
Schedule 6.05(i) to a Permitted Real Estate Joint Venture, provided that
(A) the aggregate fair value of all real property transferred in reliance
upon this paragraph (i) shall not exceed (x) $25,000,000 during the period
from and including the Effective Date to and including December 31, 2005,
and (y) $75,000,000 during the term of this Agreement and (B) such transfer
shall be made for fair value and for consideration consisting of (x) in the
event such Permitted Real Estate Joint Venture incurs Indebtedness from a
Person other than the Borrower or any Subsidiary Loan Party to finance the
purchase of such real property, an amount of cash equal to 100% of the Net
Proceeds of such Indebtedness plus 100% of the Net Proceeds of sales of Equity
Interests in such Permitted Real Estate Joint Venture to physicians who are
owners, members or employees of the applicable Affiliated Practice, which cash
consideration shall not be less than 65% of the fair value of such real
property and (y) otherwise, cash in an amount equal to 100% of the Net
Proceeds of the sales of Equity Interests in such Permitted Real Estate Joint
Venture to physicians who are owners, members or employees of the applicable
Affiliated Practice plus a note in an aggregate principal amount equal to not
less than 65% of the fair value of such real property, which note shall be
secured by a perfected first-priority security interest in such real property
and pledged to the Collateral Agent pursuant to the Collateral Agreement;


 


(j)  transfers of real property
acquired after the Effective Date by the Borrower or any Subsidiary to a
Permitted Real Estate Joint Venture, provided that (A) such real
property is (i) transferred within one year of opening by the Borrower or
such Subsidiary and (ii) prior to such transfer, subject to a mortgage (if
a mortgage is required pursuant to Section 5.13(b) and the Borrower or
such Subsidiary shall have taken any other actions reasonably related thereto
as described in Section 5.13), (B) any Indebtedness of the Borrower
or a Subsidiary incurred to finance the acquisition of such real property (or
any construction or improvements thereto) is repaid in full or assumed by the
Permitted Real Estate Joint Venture at the time such real property is
transferred to such Permitted Real Estate Joint Venture and (C) such transfer
shall be made for fair value and for consideration consisting of (x) in the
event such Permitted Real Estate Joint Venture incurs Indebtedness from a
Person other than the Borrower or any Subsidiary Loan Party to finance the
purchase of such real property, an amount of cash equal to 100% of the Net Proceeds
of such Indebtedness plus 100% of the Net Proceeds of sales of Equity Interests
in such Permitted Real Estate Joint Venture to physicians who are


 


84





















 


owners,
members or employees of the applicable Affiliated Practice, which cash
consideration shall not be less than 65% of the fair value of such real
property and (y) otherwise, cash in an amount equal to 100% of the Net Proceeds
of the sales of Equity Interests in such Permitted Real Estate Joint Venture to
physicians who are owners, members or employees of the applicable Affiliated
Practice plus a note in an aggregate principal amount equal to not less than
65% of the fair value of such real property, which note shall be secured by a
perfected first-priority security interest in such real property and pledged to
the Collateral Agent pursuant to the Collateral Agreement;


 


(k)  issuances and sales of
Equity Interests in a Permitted Real Estate Joint Venture to any physician who
is an owner, member or employee of an Affiliated Practice, provided that
after giving effect to such issuance or sale, the Borrower and one or more
Subsidiaries owns at least a majority of the Equity Interests of such Permitted
Real Estate Joint Venture; and


 


(l)  exchanges of property for
similar replacement property for fair value,


 


provided that all sales, transfers, leases and
other dispositions permitted hereby (other than those permitted by
paragraphs (b), (c) and (g) above) shall be made for fair value and (other
than those permitted by paragraphs (b), (d), (i), (j) and (l) above) for
at least 75% cash consideration (it being understood that (x) for purposes
of clause (a) above, accounts receivable received in the ordinary course
and any property received in exchange for used, obsolete, worn out or surplus
equipment or property shall be deemed to constitute cash consideration
and (y) for purposes of paragraph (f) above, notes having a maturity
date no later than 90 days after the date of the applicable PPM Asset Disposition
received by the Borrower or any Subsidiary and that are paid in full in cash
during such period shall be deemed to constitute cash consideration).


 


SECTION 6.06. Sale
and Leaseback Transactions.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, enter into any arrangement, directly or
indirectly, whereby it shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property that it intends to use
for substantially the same purpose or purposes as the property sold or
transferred, except for any such sale of any fixed or capital assets by the
Borrower or any Subsidiary that is made for cash consideration in an amount not
less than the fair value of such fixed or capital asset and is consummated
within 120 days after the Borrower or such Subsidiary acquires or
completes the construction of such fixed or capital asset.


 


SECTION 6.07. Swap
Agreements.  Neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to, enter
into any Swap Agreement, except (a) Swap Agreements entered into to hedge
or mitigate risks to which the Borrower or any Subsidiary has actual exposure
(other than those in respect of Equity Interests of the Borrower or any of the
Subsidiaries) and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.


 


85





















 


SECTION 6.08. Restricted
Payments; Certain Payments of Indebtedness.  (a) 
Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except:


 


(i) 
each of Holdings and the Borrower may declare and pay dividends with
respect to its common stock payable solely in additional shares of its common
stock, and, with respect to its preferred stock, payable solely in additional
shares of such preferred stock or in shares of its common stock;


 


(ii) 
Subsidiaries may declare and pay dividends ratably with respect to their
capital stock, membership or partnership interests or other similar Equity
Interests;


 


(iii) 
Holdings may purchase or redeem (and the Borrower may declare and pay
dividends or make other distributions to Holdings, the proceeds of which are
used by Holdings to purchase or redeem) Equity Interests of Holdings acquired
by physicians who are party to a Management Services Agreement or employees,
consultants or directors of Holdings, the Borrower, any Subsidiary or any
Affiliated Practice upon such Person’s death, disability, retirement or
termination of employment, provided that the aggregate amount of such
purchases or redemptions under this clause (iii) shall not exceed
$3,000,000;


 


(iv) 
the Borrower may make Restricted Payments to Holdings to be used by
Holdings solely to pay its franchise taxes and other fees required to maintain
its corporate existence and to pay for general corporate and overhead expenses
(including salaries and other compensation of employees) incurred by Holdings
in the ordinary course of its business, provided that such Restricted
Payments shall not exceed $1,000,000 in any fiscal year,


 


(v) 
the Borrower may make Restricted Payments to Holdings in an amount
necessary to enable Holdings to pay the Taxes directly attributable to (or
arising as a result of) the operations of the Borrower and the Subsidiaries, provided
that (A) the amount of such Restricted Payments shall not exceed the
amount that the Borrower and the Subsidiaries would be required to pay in
respect of Federal, state and local taxes were the Borrower and the
Subsidiaries to pay such taxes as stand-alone taxpayers (including any interest
or penalties thereon, if applicable) and (B) all Restricted Payments made to
Holdings pursuant to this clause (v) are used by Holdings for the purposes
specified herein within 20 days of the receipt thereof;


 


(vi) 
Holdings may, not later than five Business Days following the
consummation of the Physician Equity Offering, repurchase shares of its


 


86





















 


common stock from the Permitted Investors for aggregate consideration
of not more than $10,000,000 using the proceeds of the Physician Equity
Offering;


 


(vii) 
cashless repurchases of Equity Interests of Holdings deemed to occur
upon exercise of stock options or warrants if such Equity Interests represent a
portion of the exercise price of such options or warrants;


 


(viii) 
the Borrower may make Restricted Payments to Holdings to pay management,
consulting and advising fees to the Sponsor or Sponsor Affiliates to the extent
permitted by Section 6.09;


 


(ix) 
(on or after the date that is five years after the issuance of the
applicable Qualified Sponsor Notes) the Borrower may make Restricted Payments
to Holdings in an amount necessary to permit Holdings to pay interest
(including interest accrued during the previous five fiscal years but only to
the extent necessary to avoid significant original issue discount under Section
163(i)(2) of the Code) on the Qualified Sponsor Notes in an amount not to
exceed the Available Amount, provided that (A) the Borrower has
made all prepayments required pursuant to Section 2.11(d) prior to any such
payment of interest, (B) no Default has occurred and is continuing or would
result therefrom, (C) immediately prior to and after giving effect to such
payment of interest, the Borrower shall be in compliance with the Interest
Expense Coverage Ratio on a pro  forma basis as if all interest
accruing in respect of such Qualified Sponsor Notes during the period of four
fiscal quarters most recently ended had been paid in cash and (D) all
Restricted Payments made pursuant to this clause (ix) are used by Holdings
for the purposes specified herein within 20 days of receipt thereof;


 


(x) 
the Borrower may make Restricted Payments to Holdings in any fiscal year
in an amount not to exceed 50% of the Borrower’s Portion of Excess Cash Flow
(and Holdings may make Restricted Payments with such amounts), provided
that (A) immediately prior to and after giving effect to such Restricted
Payment, the Leverage Ratio is less than or equal to 3.25 to 1.00, (B) no
Default has occurred and is continuing or would result therefrom and
(C) simultaneously with any Restricted Payment made pursuant to this
clause (x), the Borrower shall prepay Tranche B Term Borrowings pursuant
to clause (a) of Section 2.11 in an aggregate principal amount equal
to such Restricted Payment;


 


(xi) 
the Borrower may make Restricted Payments to Holdings to pay any non-recurring
fees, cash charges and cost expenses incurred in connection with the issuance
of Equity Interests or Indebtedness, in each case, only to the extent that such
transaction is not consummated;


 


87





















 


(xii) 
payments to former stockholders of the Borrower in connection with the
exercise of appraisal rights under applicable law; and


 


(xiii) 
the Merger Consideration paid on the Effective Date and the Delayed
Equity Payments paid after the Effective Date.


 


(b)  Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, make or agree to pay or
make, directly or indirectly, any payment or other distribution (whether in
cash, securities or other property) of or in respect of principal of or
interest on any Indebtedness, or any payment or other distribution (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any Indebtedness, except:


 


(i) 
payment of Indebtedness created under the Loan Documents;


 


(ii) 
payment of regularly scheduled interest and principal payments as and
when due in respect of any Indebtedness, other than (A) payments in
respect of the Senior Subordinated Notes, any Additional Subordinated Debt, the
Existing Senior Subordinated Notes or the Physician Notes prohibited by the
subordination provisions thereof and (B) payments in respect of the
Qualified Sponsor Notes except as permitted by clause (ix) of
Section 6.08(a);


 


(iii) 
refinancings of Indebtedness to the extent permitted by
Section 6.01;


 


(iv) 
payment of secured Indebtedness that becomes due as a result of the
voluntary sale or transfer of the property or assets securing such Indebtedness;
and


 


(v) 
the Delayed Equity Payments.


 


SECTION 6.09. Transactions
with Affiliates.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower, the Subsidiary Loan
Parties and Affiliated Practices not involving any other Affiliate,
(c) any investment permitted by Sections 6.04(iv), 6.04(v),
6.04(vii), 6.04(xiii), 6.04(xvii) or 6.04(xviii), (d) any Indebtedness
permitted under Section 6.01(a)(vi), (e) any Restricted Payment
permitted by Section 6.08, (f) loans or advances to employees
permitted under Section 6.04, (g) so long as no Default described in
Section 7.01(b) or no Event of Default has occurred and is continuing,
Borrower may pay, or may pay cash dividends to enable Holdings to pay,
(A) customary management, consulting or advisory fees to the Sponsor or
any Sponsor Affiliates in an aggregate amount not greater than $1,000,000


 


88





















 


during any
fiscal year and (B) fees in respect of any acquisitions or dispositions
with respect to which the Sponsor or any Sponsor Affiliates acts as an adviser
to Holdings, the Borrower or any subsidiary in an amount not to exceed 2% of
the value of any such transaction, (h) any contribution to the capital of
Holdings by the Permitted Investors or any purchase of Equity Interests of
Holdings by the Permitted Investors not prohibited by this Agreement,
(i) the payment of reasonable fees to directors of Holdings, the Borrower
or any Subsidiary who are not employees of Holdings, the Borrower or any
Subsidiary, and compensation and employee benefit arrangements paid to, and
indemnities provided for the benefit of, directors, officers or employees of
Holdings, the Borrower or its Subsidiaries in the ordinary course of business,
(j) any issuances of securities or other payments, awards or grants in
cash, securities or otherwise pursuant to, or the funding of, employment
agreements, stock options and stock ownership plans approved by the Borrower’s
Board of Directors, (k) transactions set forth on Schedule 6.09,
(l) employment and severance arrangements entered into in the ordinary
course of business and approved by the Borrower’s Board of Directors between
Holdings, the Borrower or any Subsidiary and any employee thereof and
(m) payment of the Transaction Costs.


 


SECTION 6.10. Restrictive
Agreements. 
Neither Holdings nor the Borrower will, nor will they permit any
Subsidiary to, directly or indirectly, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of Holdings, the Borrower or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets
or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary, provided that
(i) the foregoing shall not apply to restrictions and conditions imposed
by law or by any Loan Document, Senior Notes Document, Senior Subordinated
Notes Document or documentation governing any Additional Subordinated Debt or
Additional Senior Debt, (ii) the foregoing shall not apply to restrictions
and conditions existing on the date hereof identified on Schedule 6.10 (but
shall apply to any extension or renewal of, or any amendment or modification
expanding the scope of, any such restriction or condition), (iii) the
foregoing shall not apply to customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement if such
restrictions or conditions apply only to the property or assets securing such
Indebtedness, (v) clause (a) of the foregoing shall not apply to
customary provisions in leases restricting the assignment thereof; (vi) clause
(b) of the foregoing shall not apply to customary provisions in joint venture
agreements (other than any such agreement in respect of a Permitted Real Estate
Joint Venture) relating to purchase options, rights of first refusal or call or
similar rights of a third party that owns Equity Interests in such joint
venture and (vii) the foregoing shall not apply to customary provisions
restricting assignment of any agreement entered into the ordinary course of business.


 


89





















 


SECTION 6.11. Amendment
of Material Documents.  Neither Holdings nor the Borrower will, nor
will they permit any Subsidiary to, amend, modify or waive any of its rights
under (a) any Senior Note Document or any Senior Subordinated Note
Document, (b) the Physician Notes, (c) any Existing Senior
Subordinated Notes Document, (d) the documentation governing any
Additional Subordinated Debt, (e) the documentation governing any Additional
Senior Debt or (f) its certificate of incorporation, by-laws or other
organizational documents to the extent such amendment, modification or waiver
would be materially adverse to the Lenders.


 


SECTION 6.12. Interest
Expense Coverage Ratio.  The Borrower will not permit the ratio (the “Interest
Expense Coverage Ratio”) of (a) Consolidated EBITDA to
(b) Consolidated Cash Interest Expense, in each case for any period of
four consecutive fiscal quarters ending on any date during any period set forth
below, to be less than the ratio set forth below opposite such period:


 


	
  Period

  	
   

  	
  Ratio

  
	
  December 31, 2004

  	
   

  	
  2.00 to 1.00

  
	
  March 31, 2005

  	
   

  	
  2.00 to 1.00

  
	
  June 30, 2005

  	
   

  	
  2.00 to 1.00

  
	
  September 30, 2005

  	
   

  	
  2.00 to 1.00

  
	
  December 31, 2005

  	
   

  	
  2.00 to 1.00

  
	
  March 31, 2006

  	
   

  	
  2.00 to 1.00

  
	
  June 30, 2006

  	
   

  	
  2.05 to 1.00

  
	
  September 30, 2006

  	
   

  	
  2.10 to 1.00

  
	
  December 31, 2006

  	
   

  	
  2.15 to 1.00

  
	
  March 31, 2007

  	
   

  	
  2.15 to 1.00

  
	
  June 30, 2007

  	
   

  	
  2.20 to 1.00

  
	
  September 30, 2007

  	
   

  	
  2.25 to 1.00

  
	
  December 31, 2007

  	
   

  	
  2.30 to 1.00

  
	
  March 31, 2008

  	
   

  	
  2.30 to 1.00

  
	
  June 30, 2008

  	
   

  	
  2.35 to 1.00

  
	
  September 30, 2008

  	
   

  	
  2.40 to 1.00

  
	
  December 31, 2008

  	
   

  	
  2.45 to 1.00

  
	
  March 31, 2009

  	
   

  	
  2.45 to 1.00

  
	
  June 30, 2009

  	
   

  	
  2.55 to 1.00

  
	
  September 30, 2009

  	
   

  	
  2.70 to 1.00

  
	
  December 31, 2009

  	
   

  	
  2.75 to 1.00

  
	
  March 31, 2010

  	
   

  	
  2.75 to 1.00

  
	
  June 30, 2010

  	
   

  	
  2.85 to 1.00

  
	
  September 30, 2010

  	
   

  	
  2.95 to 1.00

  
	
  December 31, 2010

  	
   

  	
  3.00 to 1.00

  
	
  March 31, 2011

  	
   

  	
  3.00 to 1.00

  
	
  June 30, 2011

  	
   

  	
  3.00 to 1.00

  
	
  September 30, 2011

  	
   

  	
  3.00 to 1.00

  



 


90





















 


SECTION 6.13. Leverage
Ratio. 
The Borrower will not permit the Leverage Ratio as of any date set forth
below to exceed the ratio set forth opposite such date:


 


	
  Period

  	
   

  	
  Ratio

  
	
  December 31, 2004

  	
   

  	
  5.95 to 1.00

  
	
  March 31, 2005

  	
   

  	
  5.95 to 1.00

  
	
  June 30, 2005

  	
   

  	
  5.95 to 1.00

  
	
  September 30, 2005

  	
   

  	
  5.95 to 1.00

  
	
  December 31, 2005

  	
   

  	
  5.95 to 1.00

  
	
  March 31, 2006

  	
   

  	
  5.95 to 1.00

  
	
  June 30, 2006

  	
   

  	
  5.75 to 1.00

  
	
  September 30, 2006

  	
   

  	
  5.50 to 1.00

  
	
  December 31, 2006

  	
   

  	
  5.25 to 1.00

  
	
  March 31, 2007

  	
   

  	
  5.25 to 1.00

  
	
  June 30, 2007

  	
   

  	
  5.00 to 1.00

  
	
  September 30, 2007

  	
   

  	
  5.00 to 1.00

  
	
  December 31, 2007

  	
   

  	
  4.75 to 1.00

  
	
  March 31, 2008

  	
   

  	
  4.75 to 1.00

  
	
  June 30, 2008

  	
   

  	
  4.50 to 1.00

  
	
  September 30, 2008

  	
   

  	
  4.50 to 1.00

  
	
  December 31, 2008

  	
   

  	
  4.25 to 1.00

  
	
  March 31, 2009

  	
   

  	
  4.25 to 1.00

  
	
  June 30, 2009

  	
   

  	
  4.00 to 1.00

  
	
  September 30, 2009

  	
   

  	
  4.00 to 1.00

  
	
  December 31, 2009

  	
   

  	
  3.75 to 1.00

  
	
  March 31, 2010

  	
   

  	
  3.75 to 1.00

  
	
  June 30, 2010

  	
   

  	
  3.50 to 1.00

  
	
  September 30, 2010

  	
   

  	
  3.50 to 1.00

  
	
  December 31, 2010

  	
   

  	
  3.25 to 1.00

  
	
  March 31, 2011

  	
   

  	
  3.25 to 1.00

  
	
  June 30, 2011

  	
   

  	
  3.00 to 1.00

  
	
  September 30, 2011

  	
   

  	
  3.00 to 1.00

  



 


91





















 


SECTION 6.14. Maximum Capital
Expenditures.  (a)  The Borrower will not, nor will it permit any
Subsidiary to, incur or make any Capital Expenditures during any period set
forth below in an amount exceeding the amount set forth opposite such period:


 


	
  Fiscal Year

  	
   

  	
  Maximum

  Capital Expenditures

  	
   

  
	
  2004

  	
   

  	
  $

  	
  95,000,000

  	
   

  
	
  2005

  	
   

  	
  $

  	
  95,000,000

  	
   

  
	
  2006

  	
   

  	
  $

  	
  95,000,000

  	
   

  
	
  2007

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  2008

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  2009

  	
   

  	
  $

  	
  100,000,000

  	
   

  
	
  2010

  	
   

  	
  $

  	
  105,000,000

  	
   

  
	
  2011

  	
   

  	
  $

  	
  105,000,000

  	
   

  



 


(b)  To the extent that the
aggregate amount of Capital Expenditures made in any fiscal year pursuant to
Section 6.14(a) is less than the amount set forth therein for such fiscal
year, the amount of such difference may be carried forward and used to make
Capital Expenditures in future fiscal years, provided that the amount
permitted to be applied to make Capital Expenditures pursuant to this
paragraph (b) shall in no event exceed 50% of the amount set forth in
Section 6.14(a) for such fiscal year.


 


ARTICLE VII


 


Events of
Default


 


SECTION 7.01. Events
of Default. 
If any of the following events (any such event, an “Event of Default”)
shall occur:


 


(a) the Borrower shall fail to pay any
principal of any Loan or any reimbursement obligation in respect of any
LC Disbursement when and


 


92





















 


as the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof or otherwise;


 


(b) the Borrower shall fail to pay any
interest on any Loan or any fee or any other amount (other than an amount
referred to in paragraph (a) of this Section) payable under this Agreement
or any other Loan Document, when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of three Business Days;


 


(c) any representation or warranty made or
deemed made by or on behalf of Holdings, the Borrower or any Subsidiary in or
in connection with any Loan Document or any amendment or modification thereof
or waiver thereunder, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to have
been incorrect in any material respect (except to the extent any such
representation or warranty is qualified by “materially,” “Material Adverse
Effect” or a similar term, in which case such representation or warranty shall
prove to have been incorrect in any respect) when made or deemed made;


 


(d) Holdings, or the Borrower shall fail to
observe or perform any covenant, condition or agreement contained in
Section 5.02, 5.03, 5.04 (with respect to the existence of Holdings and
the Borrower) or 5.11 or in Article VI;


 


(e) Holdings, the Borrower or any Subsidiary
Loan Party shall fail to observe or perform any covenant, condition or
agreement contained in any Loan Document (other than those specified in
paragraph (a), (b) or (d) of this Section), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender);


 


(f) Holdings, the Borrower or any Subsidiary
shall fail to make any payment (whether of principal or interest and regardless
of amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable (after giving effect to any applicable grace period);


 


(g) any event or condition occurs that
results in any Material Indebtedness becoming due prior to its scheduled
maturity or that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material Indebtedness or
any trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity,


 


93





















 


provided that this paragraph (g) shall
not apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets (to the extent not prohibited under
this Agreement) securing such Indebtedness;


 


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


 


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


 


(j) Holdings, the Borrower or any Subsidiary
shall become unable, admit in writing its inability or fail generally to pay
its debts as they become due;


 


(k) one or more judgments for the payment of
money (to the extent not paid or covered by insurance provided by a carrier
that has acknowledged its obligation to pay such claim in writing and that has
a credit rating of at least A by A.M. Best Company, Inc.) in an aggregate
amount in excess of $15,000,000 shall be rendered against Holdings, the
Borrower, any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of Holdings, the Borrower
or any Subsidiary to enforce any such judgment;


 


94





















 


(l) an ERISA Event shall have occurred that,
in the opinion of the Required Lenders, when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and the Subsidiaries in an aggregate amount exceeding
$15,000,000 for all periods;


 


(m) any Lien purported to be created under
any Security Document shall cease to be, or shall be asserted by any Loan Party
not to be, a valid and perfected Lien on any Collateral with a fair value in
excess of $1,500,000, with the priority required by the applicable Security Document,
except (i) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or (ii) as
a result of the Administrative Agent’s failure to maintain possession of any
stock certificates, promissory notes or other instruments delivered to it under
the Collateral Agreement; or


 


(n) any Loan Document shall for any reason be
asserted by any Loan Party not to be a legal, valid and binding obligation of
any party thereto;


 


(o) the Guarantees of the Obligations by
Holdings and the Subsidiary Loan Parties pursuant to the Collateral Agreement
shall cease to be in full force and effect (other than in accordance with the
terms of the Loan Documents) or shall be asserted by Holdings, the Borrower or
any Subsidiary Loan Party not to be in effect or not to be legal, valid and
binding obligations;


 


(p) the Existing Senior Subordinated Notes,
the Senior Subordinated Notes, any Additional Subordinated Debt or any
Guarantees thereof shall cease, for any reason, to be validly subordinated to
the Obligations or the obligations of Holdings and the Subsidiary Loan Parties
in respect of their Guarantees under the Collateral Agreement, as applicable,
as provided in the Existing Senior Subordinated Notes Documents, the Senior
Subordinated Notes Documents or the documentation governing any Additional
Subordinated Debt, as applicable, or any Loan Party or the holders of at least
25% in aggregate principal amount of the Existing Senior Subordinated Notes,
Senior Subordinated Notes or any series of Additional Subordinated Debt shall
so assert; or


 


(q) a Change in Control shall occur;


 


then, and in every such event (other than an event with respect to the
Borrower described in paragraph (h) or (i) of this Section), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:  (i) terminate the Commitments, and
thereupon the Commitments shall


 


95





















 


terminate immediately, and (ii) declare the Loans then outstanding
to be due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall become due and payable
immediately, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower; and in case of any event with
respect to the Borrower described in paragraph (h) or (i) of this Section,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and all fees and other
obligations of the Borrower accrued hereunder, shall automatically become due
and payable, without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by the Borrower.


 


SECTION 7.02. Borrower’s
Right to Cure.  (a) 
Notwithstanding anything to the contrary contained in Section 7.01,
in the event that the Borrower fails to comply with the requirement of any
Financial Performance Covenant, until the expiration of the fifth Business Day
subsequent to the date on which financial statements with respect to the fiscal
period for which such Financial Performance Covenant is being measured are
required to be delivered pursuant to Section 5.01, Holdings shall have the
right to issue Permitted Securities (the “Cure Right”), and upon the
receipt by the Borrower of cash (the “Cure Amount”) pursuant to the
exercise by Holdings of such Cure Right, such Financial Performance Covenants
shall be recalculated giving effect to the following pro forma adjustments:


 


(i) 
Consolidated EBITDA shall be increased, solely for the purpose of
determining the existence of a Default or Event of Default under the Financial
Performance Covenants with respect to any period of four consecutive fiscal
quarters that includes the fiscal quarter for which the Cure Right was
exercised and not for any other purpose under this Agreement, by an amount equal
to the Cure Amount; and


 


(ii) 
if, after giving effect to the foregoing recalculations, the Borrower
shall then be in compliance with the requirements of all Financial Performance
Covenants (including for purposes of Section 4.02), the Borrower shall be
deemed to have satisfied the requirements of the Financial Performance
Covenants as of the relevant date of determination with the same effect as
though there had been no failure to comply therewith at such date, and the
applicable breach or default of the Financial Performance Covenants that had
occurred shall be deemed cured for this purposes of the Agreement.


 


(b)  Notwithstanding anything
herein to the contrary, (i) Holdings may exercise the Cure Right only one
time prior to the Tranche B Maturity Date, (ii) the Cure Amount shall
not exceed $20,000,000 and (iii) the Borrower shall apply the Cure Amount
to the prepayment of outstanding Revolving Loans, if any, provided that
any such prepayment shall not reduce any Lender’s Revolving Commitment.


 


96





















 


SECTION 7.03. Exclusion
of Immaterial Subsidiaries.  Solely for the purposes of determining
whether a Default has occurred under clause (h) or (i) of
Section 7.01, any reference in any such clause to any Subsidiary shall be
deemed not to include any Subsidiary affected by any event or circumstance
referred to in any such clause that did not, as of the last day of the fiscal
quarter of the Borrower most recently ended, have assets with a value in excess
of 5% of the consolidated total assets of the Borrower and the Subsidiaries or
5% of the total revenues of the Borrower and the Subsidiaries as of such date, provided
that if it is necessary to exclude more than one Subsidiary from
clause (h) or (i) of Section 7.01 pursuant to this Section 7.03
in order to avoid an Event of Default thereunder, all excluded Subsidiaries
shall be considered to be a single consolidated Subsidiary for purposes of
determining whether the condition specified above is satisfied.


 


ARTICLE VIII


 


The Agents


 


Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent
to take such actions on its behalf and to exercise such powers as are delegated
to the Administrative Agent by the terms of the Loan Documents, together with
such actions and powers as are reasonably incidental thereto.  For purposes of this Article VIII, all
references to the Administrative Agent shall be deemed to be references to both
the Administrative Agent and the Collateral Agent.


 


The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.


 


The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents.  Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing as directed by
the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 2.05(j)
and Section 9.02), and (c) except as expressly set forth in the Loan
Documents, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
Holdings, the Borrower or any of the Subsidiaries that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates
in any capacity.  The Administrative
Agent shall not be liable for any action taken or not taken by it with the consent
or at the request of the 


 


97





















 


Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in Section 9.02) or
in the absence of its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by Holdings, the Borrower or a Lender, and
the Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered thereunder or in connection
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document,
(iv) the validity, enforceability, effectiveness or genuineness of any
Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any
Loan Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.


 


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


 


The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. 
The Administrative Agent and any such sub-agent may perform any and all
its duties and exercise its rights and powers through their respective Related
Parties.  The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of each Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.


 


Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor.  If no successor shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on
behalf of the Lenders and the Issuing Bank, appoint a successor Administrative
Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank.  Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder.  The fees payable by


 


98





















 


the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor.  After the
Administrative Agent’s resignation hereunder, the provisions of this Article
and Section 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub-agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.


 


Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement. 
Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or
based upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder. 
The Lenders identified in this Agreement as the Syndication Agent and
the Documentation Agent shall not have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders.  Without limiting the foregoing,
neither the Syndication Agent nor the Documentation Agent shall have or be
deemed to have a fiduciary relationship with any Lender.


 


ARTICLE IX


 


Miscellaneous


 


SECTION 9.01. Notices.  (a) 
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:


 


(i)  if
to the Borrower, to US Oncology, Inc., 16825 Northchase Drive, Houston, Texas
77060, Attention of Bruce D. Broussard (Telecopy
No. (832) 601-6600);


 


(ii) 
if to the Administrative Agent, to JPMorgan Chase Bank, 270 Park
Avenue, New York, New York 10017, Attention of Gary Spevack
(Telecopy No. (212) 270-1063), with a copy to JPMorgan Chase Bank, Loan and
Agency Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002,
Attention: Erin Merrit (Telecopy No. (713) 750-2782);


 


(iii) 
if to the Issuing Bank, to JPMorgan Chase Bank, Loan and Agency
Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002,
Attention: Erin Merrit (Telecopy No. (713) 750-2782);


 


99





















 


(iv) 
if to the Swingline Lender, to JPMorgan Chase Bank, Loan and Agency
Services, 1111 Fannin Street, 10th Floor, Houston, TX 77002,
Attention: Erin Merrit (Telecopy No. (713) 750-2782);


 


(v)  if
to the Collateral Agent, to JPMorgan Chase Bank, Loan and Agency Services, 1111
Fannin Street, 10th Floor, Houston, TX 77002, Attention: Erin Merrit
(Telecopy No. (713) 750-2782); and


 


(vi) 
if to any other Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.


 


(b)  Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent, provided that the foregoing shall not apply to notices pursuant
to Article II unless otherwise agreed by the Administrative Agent and the
applicable Lender.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.


 


(c)  Any party hereto may change
its address or telecopy number for notices and other communications hereunder
by notice to the Administrative Agent (and, in the case of the Administrative
Agent, by written notice to the Borrower). 
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.


 


SECTION 9.02. Waivers;
Amendments. 
(a)  No failure or delay by the
Administrative Agent, the Issuing Bank, the Collateral Agent, the Swingline
Lender or any Lender in exercising any right or power hereunder or under any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative
Agent, the Issuing Bank, the Collateral Agent, the Swingline Lender and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document
or consent to any departure by any Loan Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  Without limiting the generality of the
foregoing, the making of a Loan or issuance of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender, the Collateral Agent, the Swingline Lender or the Issuing
Bank may have had notice or knowledge of such Default at the time.


 


(b)  Except as provided in
Section 2.20 with respect to an Incremental Facility Amendment, neither
this Agreement nor any other Loan Document nor any


 


100





















 


provision
hereof or thereof may be waived, amended or modified except, in the case of
this Agreement, pursuant to an agreement or agreements in writing entered into
by Holdings, the Borrower and the Required Lenders or, in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into
by the Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders, provided
that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or LC Disbursement or reduce the rate of interest
thereon, or reduce any fees payable hereunder, without the written consent of
each Lender affected thereby, (iii) postpone the maturity of any Loan, or
any scheduled date of payment of the principal amount of any Tranche B
Term Loan under Section 2.10, the required date of reimbursement of any
LC Disbursement, or any date for the payment of any interest or fees
payable hereunder, or reduce the amount of, waive or excuse any such payment,
or postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby, (iv) change
Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender,
(v) change any of the provisions of this Section or the percentage set
forth in the definition of “Required Lenders” or any other provision of any
Loan Document specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as applicable), (vi) release
Holdings or any Subsidiary Loan Party from its Guarantee under the Collateral
Agreement (except as provided in Section 9.15 or in the Collateral
Agreement) or limit its liability in respect of such Guarantee, without the
written consent of each Lender, (vii) release all or substantially all the
Collateral from the Liens of the Security Documents (except as provided in Section 9.15
or in the Collateral Agreement), without the written consent of each Lender or
(viii) change any provisions of any Loan Document in a manner that by its
terms adversely affects the rights in respect of payments due to Lenders
holding Loans of any Class differently than those holding Loans of any other
Class, without the written consent of Lenders holding a majority in interest of
the outstanding Loans and unused Commitments of each adversely affected Class, provided
further that (A) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent, the Issuing Bank or
the Swingline Lender without the prior written consent of the Administrative
Agent, the Issuing Bank or the Swingline Lender, as applicable, and (B) any
waiver, amendment or modification of this Agreement that by its terms affects
the rights or duties under this Agreement of the Revolving Lenders (but not the
Tranche B Lenders), or the Tranche B Lenders (but not the Revolving
Lenders) may be effected by an agreement or agreements in writing entered into
by Holdings, the Borrower and requisite percentage in interest of the affected
Class of Lenders that would be required to consent thereto under this Section
if such Class of Lenders were the only Class of Lenders hereunder at the
time.  In connection with any proposed
amendment, modification, waiver or termination (a “Proposed Change”)
requiring the consent of all affected Lenders, if the consent of the
Supermajority Lenders (and, to the extent any Proposed Change requires the
consent of Lenders holding Loans of any Class pursuant to clause (viii) of
this Section 9.02(b), the consent of not less than


 


101





















 


75% in
interest of the outstanding Loans and unused Commitments of such Class) to such
Proposed Change is obtained, but the consent to such Proposed Change of other
Lenders whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this Section 9.02(b) being referred
to as a “Non-Consenting Lender”), then, so long as the Lender that is
acting as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower’s request, any assignee that is acceptable to the Administrative Agent
shall have the right, with the Administrative Agent’s consent, to purchase from
such Non-Consenting Lender, and such Non-Consenting Lender agrees that it
shall, upon the Borrower’s request, sell and assign to such assignee, at no
expense to such Non-Consenting Lender, all the Commitments, Tranche B Term
Loans and Revolving Exposure of such Non-Consenting Lender for an amount equal
to the principal balance of all Tranche B Term Loans and Revolving Loans (and
funded participations in Swingline Loans and unreimbursed LC Disbursements) held
by such Non-Consenting Lender and all accrued interest and fees with respect
thereto through the date of sale (including amounts under Section 2.15,
2.16 and 2.17), such purchase and sale to be consummated pursuant to an
executed Assignment and Assumption in accordance with Section 9.04(b)
(which Assignment and Assumption need not be signed by such Non-Consenting
Lender).


 


SECTION 9.03. Expenses;
Indemnity; Damage Waiver.  (a) 
The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Agents and their respective Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Agents, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of the Loan Documents or any amendments,
modifications or waivers of the provisions thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated),
(ii) all reasonable out-of-pocket expenses incurred by the Issuing Bank in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder and (iii) all reasonable
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank
or any Lender, including the reasonable fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including its rights under this Section, or in connection
with the Loans made or Letters of Credit issued hereunder, including all such
reasonable out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.


 


(b)  The Borrower shall indemnify
the Administrative Agent, the Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted
against any Indemnitee arising out of, in connection with, or as a result of
(i) the execution or delivery of any Loan Document or any other agreement
or instrument contemplated hereby, the performance by the parties to the Loan
Documents of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the


 


102





















 


proceeds
therefrom (including any refusal by the Issuing Bank to honor a demand for
payment under a Letter of Credit if the documents presented in connection with
such demand do not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or Release of Hazardous Materials on
or from any Mortgaged Property or any other property currently or formerly
owned or operated by the Borrower or any of its Subsidiaries, or any actual or
alleged Environmental Liability related in any way to the Borrower or any of
its Subsidiaries or their respective properties or operations, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing, whether based on contract, tort or any other theory
and regardless of whether any Indemnitee is a party thereto, provided that
such indemnity shall not, as to any Indemnitee, be available to the extent that
such losses, claims, damages, liabilities or related expenses are determined by
a court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee.


 


(c)  To the extent that the
Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Issuing Bank or the Swingline Lender under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Swingline Lender, as
applicable, such Lender’s pro rata share (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount, provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as applicable, was incurred by or
asserted against the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.  For
purposes hereof, a Lender’s “pro rata share” shall be determined based upon its
share of the aggregate Revolving Exposures, outstanding Tranche B Term
Loans and unused Commitments at the time.


 


(d)  To the extent permitted by
applicable law, neither Holdings nor the Borrower shall assert, and each hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement or any agreement or instrument contemplated hereby, the Transactions,
any Loan or Letter of Credit or the use of the proceeds thereof.


 


(e)  All amounts due under this
Section shall be payable not later than three days after written demand
therefor.


 


SECTION 9.04. Successors
and Assigns.  (a) 
The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit), except that (i) the Borrower may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may
assign or otherwise transfer its rights or obligations hereunder except in
accordance with this Section.  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Issuing Bank that issues any
Letter of Credit),


 


103





















 


Participants
(to the extent provided in paragraph (c) of this Section) and, to the
extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.


 


(b)  (i)   Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld or delayed) of:


 


(1) the Borrower, provided that no
consent of the Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender, an Approved Fund (as defined below) or, if an Event of
Default has occurred and is continuing, any other assignee; and


 


(2) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
of all or any portion of a Tranche B Term Loan to a Lender, an Affiliate
of a Lender or an Approved Fund; and


 


(3) the Issuing Bank, provided that no
consent of the Issuing Bank shall be required for an assignment of all or any
portion of a Tranche B Term Loan.


 


(ii) 
Assignments shall be subject to the following conditions:


 


(1) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender’s Commitment or Loans of any Class, the amount
of the Commitment or Loans of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Assumption with
respect to such assignment is delivered to the Administrative Agent) shall not
be less than $5,000,000 or, in the case of a Tranche B Term Loan,
$1,000,000, unless each of the Borrower and the Administrative Agent otherwise
consent, provided that no such consent of the Borrower shall be required
if an Event of Default has occurred and is continuing;


 


(2) each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement, provided that this clause shall not be
construed to prohibit assignment of a proportionate part of all the assigning
Lender’s rights and obligations in respect of one Class of Commitments or
Loans;


 


104





















 


(3) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Assumption,
together with a processing and recordation fee of $3,500; and


 


(4) the assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire.


 


For purposes of this Section 9.04(b), the terms “Approved Fund”
and “CLO” have the following meanings:


 


“Approved Fund” means (a) a CLO and (b) with respect
to any Lender that is a fund which invests in bank loans and similar extensions
of credit, any other fund that invests in bank loans and similar extensions of
credit and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.


 


“CLO” means any entity (whether a corporation, partnership,
trust or otherwise) that is engaged in making, purchasing, holding or otherwise
investing in bank loans and similar extensions of credit in the ordinary course
and is administered or managed by a Lender or an Affiliate of such Lender.


 


(iii) 
Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.15, 2.16, 2.17 and 9.03).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
Section 9.04 shall be treated for purposes of this Agreement as a sale by
such Lender of a participation in such rights and obligations in accordance
with paragraph (c) of this Section.


 


(iv) 
The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Banks and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all


 


105





















 


purposes of this Agreement, notwithstanding notice to the
contrary.  The Register shall be
available for inspection by the Borrower, the Issuing Banks and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.


 


(v) 
Upon its receipt of a duly completed Assignment and Assumption executed
by an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this
Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in the
Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.


 


(c)  (i)   Any Lender may, without the consent of
the Borrower, the Administrative Agent, the Issuing Banks or the Swingline
Lender, sell participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it), provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement, provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such
Participant.  Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and
2.17 to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 9.08 as
though it were a Lender, provided such Participant agrees to be subject
to Section 2.18(c) as though it were a Lender.


 


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


 


106





















 


(iii) 
Any Lender may at any time pledge, assign or grant a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge, assignment or grant to secure obligations
to a Federal Reserve Bank, and this Section shall not apply to any such pledge,
assignment or grant of a security interest, provided that no such
pledge, assignment or grant of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.


 


SECTION 9.05. Survival.  All covenants, agreements, representations
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to this
Agreement or any other Loan Document shall be considered to have been relied
upon by the other parties hereto and shall survive the execution and delivery
of the Loan Documents and the making of any Loans and issuance of any Letters
of Credit, regardless of any investigation made by any such other party or on
its behalf and notwithstanding that the Administrative Agent, the Issuing Bank
or any Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16,
2.17 and 9.03 and Article VIII shall survive and remain in full force and
effect regardless of the consummation of the transactions contemplated hereby,
the repayment of the Loans, the expiration or termination of the Letters of
Credit and the Commitments or the termination of this Agreement or any
provision hereof.


 


SECTION 9.06. Counterparts;
Integration; Effectiveness.  This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract.  This
Agreement, the other Loan Documents and any separate letter agreements with
respect to fees payable to the Administrative Agent constitute the entire
contract among the parties relating to the subject matter hereof and supersede
any and all previous agreements and understandings, oral or written, relating
to the subject matter hereof.  Except as
provided in Section 4.01, this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. 
Delivery of an executed counterpart of a signature page of this
Agreement by telecopy shall be effective as delivery of a manually executed
counterpart of this Agreement.


 


SECTION 9.07. Severability.  Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the


 


107





















 


invalidity of
a particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.


 


SECTION 9.08. Right
of Setoff. 
If an Event of Default shall have occurred and be continuing, each
Lender and each of its Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other obligations at any time owing by such Lender or
Affiliate to or for the credit or the account of the Borrower against any of
and all the obligations of the Borrower now or hereafter existing under this
Agreement held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement and although such obligations may be
unmatured.  The applicable Lender shall
notify the Borrower and the Administrative Agent of such set-off or
application, provided that any failure to give or any delay in giving
such notice shall not affect the validity of any such set-off or application
under this Section.  The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.


 


SECTION 9.09. Governing
Law; Jurisdiction; Consent to Service of
Process.  (a)  This Agreement shall be construed in
accordance with and governed by the law of the State of New York.


 


(b)  Each of Holdings and the
Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of the Supreme Court of the State of
New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to any Loan
Document, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal
court.  Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law.  Nothing in this
Agreement or any other Loan Document shall affect any right that the
Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or any other Loan Document
against Holdings, the Borrower or their respective properties in the courts of
any jurisdiction.


 


(c)  Each of Holdings and the
Borrower hereby irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Agreement or any other Loan Document in any court
referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.


 


108





















 


(d)  Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 9.01.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.


 


SECTION 9.10. WAIVER OF
JURY TRIAL.  EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY).  EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.


 


SECTION 9.11. Headings.  Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.


 


SECTION 9.12. Confidentiality.  Each of the Administrative Agent, the Issuing
Banks and the Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority or
self-regulatory authority, (c) to the extent required by applicable laws
or regulations or by any subpoena or similar legal process, (d) to any
other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the
consent of the Borrower or (h) to the extent such Information
(i) becomes publicly available other than as a result of a breach of this
Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than Holdings
or the Borrower, provided that such source is not actually known by such
disclosing party to be bound by an agreement containing provisions
substantially the same as those contained in this Section.  For the purposes of this Section, the term


 


109





















 


“Information”
means all information received from Holdings or the Borrower relating to
Holdings or the Borrower or its business, other than any such information that
is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by Holdings or the Borrower, provided
that, in the case of information received from Holdings, the Borrower or any
Subsidiary after the date hereof, such information is clearly identified at the
time of delivery as confidential.  Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.


 


SECTION 9.13. Interest
Rate Limitation.  Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts that are treated as interest on such
Loan under applicable law (collectively the “Charges”), shall exceed the
maximum lawful rate (the “Maximum Rate”) that may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated
amount, together with interest thereon at the Federal Funds Effective Rate to
the date of repayment, shall have been received by such Lender.


 


SECTION 9.14. USA Patriot
Act.  Each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the “Act”), it is required to obtain, verify and record information
that identifies the Borrower, which information includes the name and address
of the Borrower and other information that will allow such Lender to identify
the Borrower in accordance with the Act.


 


SECTION 9.15. Release of
Collateral.  Upon any sale or other
transfer by any Loan Party of any Collateral that is permitted under this
Agreement, or upon the effectiveness of any written consent to the release of
the security interest granted hereby in any Collateral pursuant to Section 9.02
of this Agreement, the security interest in such Collateral shall be
automatically released.


 


110





















 


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


 


	
   

  	
  US ONCOLOGY, INC.,

  
	
   

  	
  as Borrower,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Bruce Broussard

  	
   

  
	
   

  	
   

  	
  Name: Bruce Broussard

  
	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  US ONCOLOGY HOLDINGS, INC.,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Illegible

  	
   

  
	
   

  	
   

  	
  Name: Illegible

  
	
   

  	
   

  	
  Title: Illegible

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK, individually 

  
	
   

  	
  and as Administrative Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Illegible

  	
   

  
	
   

  	
   

  	
  Name: Illegible

  
	
   

  	
   

  	
  Title: Illegible

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WACHOVIA BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, individually and as

  
	
   

  	
  Syndication Agent,

  
	
   

  	
   

  
	
   

  	
  by

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Illegible

  	
   

  
	
   

  	
   

  	
  Name: Illegible

  
	
   

  	
   

  	
  Title: Illegible

  



 


111