**Exhibit 10.3**

 

*              Portionsof this exhibit have been omitted pursuant to a request for confidentialtreatment and have been filed separately with the Commission.

 

CREDIT AGREEMENT

 

dated as of

 

August 23, 2007

 

among

 

SYMBOL HOLDINGS CORPORATION,

as Holdings

 

SYMBOL MERGER SUB, INC. (to bemerged with and into

SYMBION, INC.),

as the Borrower

 

The Lenders Party Hereto fromTime to Time

 

MERRILL LYNCH CAPITALCORPORATION,

as Administrative Agent andCollateral Agent

 

BANK OF AMERICA, N.A.,

as Syndication Agent

 

and

 

THE ROYAL BANK OF SCOTLAND PLC,

FIFTH THIRD BANK

as Co-Documentation Agents

 

----

 

MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER &SMITH INCORPORATED AND

BANC OF AMERICA SECURITIES LLC,

as Joint Lead Arrangers andJoint Lead Bookrunners

 

Cahill Gordon & Reindel LLP

80 Pine Street

New York, NY 10005

 

----

 

TABLE OF CONTENTS

 
| ** **         | ** ** | ** **                                                 | ** ** | **Page** |
|--------------------|------------|------------------------------------------------------------|------------|----------|
|               |       |                                                       |       |     |
|               |       | ARTICLE I                                                  |       |     |
|               |       |                                                       |       |     |
|               |       | Definitions                                                |       |     |
|               |       |                                                       |       |     |
| SECTION 1.01. |       | Defined Terms                                              |       | 2        |
| SECTION 1.02. |       | Classification of Loans and Borrowings                     |       | 32       |
| SECTION 1.03. |       | Terms Generally                                            |       | 32       |
| SECTION 1.04. |       | Accounting Terms; GAAP                                     |       | 32       |
| SECTION 1.05. |       | Pro Forma Calculations                                     |       | 33       |
|               |       | ARTICLE II                                                 |       |     |
|               |       |                                                       |       |     |
|               |       | The Credits                                                |       |     |
|               |       |                                                       |       |     |
| SECTION 2.01. |       | Commitments                                                |       | 33       |
| SECTION 2.02. |       | Loans and Borrowings                                       |       | 33       |
| SECTION 2.03. |       | Requests for Borrowings                                    |       | 34       |
| SECTION 2.04. |       | Swingline Loans                                            |       | 35       |
| SECTION 2.05. |       | Letters of Credit                                          |       | 36       |
| SECTION 2.06. |       | Funding of Borrowings                                      |       | 39       |
| SECTION 2.07. |       | Interest Elections                                         |       | 40       |
| SECTION 2.08. |       | Termination and Reduction of Commitments                   |       | 41       |
| SECTION 2.09. |       | Repayment of Loans; Evidence of Debt                       |       | 41       |
| SECTION 2.10. |       | Amortization of Term Loans                                 |       | 42       |
| SECTION 2.11. |       | Prepayment of Loans                                        |       | 44       |
| SECTION 2.12. |       | Fees                                                       |       | 46       |
| SECTION 2.13. |       | Interest                                                   |       | 47       |
| SECTION 2.14. |       | Alternate Rate of Interest                                 |       | 48       |
| SECTION 2.15. |       | Increased Costs                                            |       | 48       |
| SECTION 2.16. |       | Break Funding Payments                                     |       | 49       |
| SECTION 2.17. |       | Taxes                                                      |       | 50       |
| SECTION 2.18. |       | Payments Generally; Pro Rata Treatment; Sharing of Setoffs |       | 51       |
| SECTION 2.19. |       | Mitigation Obligations; Replacement of Lenders             |       | 53       |
| SECTION 2.20. |       | Incremental Extensions of Credit                           |       | 53       |
|               |       |                                                       |       |     |
|               |       | ARTICLE III                                                |       |     |
|               |       |                                                       |       |     |
|               |       | Representations and Warranties                             |       |     |
| SECTION 3.01. |       | Organization; Power                                        |       | 54       |
| SECTION 3.02. |       | Authorization; Enforceability                              |       | 55       |
| SECTION 3.03. |       | Governmental Approvals; No Conflicts                       |       | 55       |
| SECTION 3.04. |       | Financial Condition; No Material Adverse Change            |       | 55       |
| SECTION 3.05. |       | Properties                                                 |       | 56       |
| SECTION 3.06. |       | Litigation                                                 |       | 56       |

 

i

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| ** **         | ** ** | ** **                                      | ** ** | **Page** |
|--------------------|------------|-------------------------------------------------|------------|----------|
|               |       |                                            |       |     |
| SECTION 3.07. |       | Compliance with Laws                            |       | 56       |
| SECTION 3.08. |       | Investment Company Status                       |       | 56       |
| SECTION 3.09. |       | Taxes                                           |       | 56       |
| SECTION 3.10. |       | ERISA                                           |       | 57       |
| SECTION 3.11. |       | Disclosure                                      |       | 57       |
| SECTION 3.12. |       | Subsidiaries                                    |       | 57       |
| SECTION 3.13. |       | [Reserved]                                      |       | 57       |
| SECTION 3.14. |       | Labor Matters                                   |       | 57       |
| SECTION 3.15. |       | Solvency                                        |       | 57       |
| SECTION 3.16. |       | [Reserved]                                      |       | 58       |
| SECTION 3.17. |       | Reimbursement from Third Party Payors           |       | 58       |
| SECTION 3.18. |       | Fraud and Abuse; Licenses                       |       | 58       |
| SECTION 3.19. |       | Margin Regulations                              |       | 59       |
| SECTION 3.20. |       | [Reserved]                                      |       | 59       |
| SECTION 3.21. |       | Intellectual Property; Licenses, Etc.           |       | 59       |
| SECTION 3.22. |       | Security Documents                              |       | 59       |
| SECTION 3.23. |       | Environmental Compliance                        |       | 60       |
|               |       |                                            |       |     |
|               |       | ARTICLE IV                                      |       |     |
|               |       |                                            |       |     |
|               |       | Conditions                                      |       |     |
|               |       |                                            |       |     |
| SECTION 4.01. |       | Effective Date                                  |       | 61       |
| SECTION 4.02. |       | Each Credit Event                               |       | 62       |
|               |       |                                            |       |     |
|               |       | ARTICLE V                                       |       |     |
|               |       |                                            |       |     |
|               |       | Affirmative Covenants                           |       |     |
|               |       |                                            |       |     |
| SECTION 5.01. |       | Financial Statements and Other Information      |       | 63       |
| SECTION 5.02. |       | Notices of Material Events                      |       | 65       |
| SECTION 5.03. |       | Information Regarding Collateral                |       | 65       |
| SECTION 5.04. |       | Existence; Conduct of Business                  |       | 65       |
| SECTION 5.05. |       | Payment of Obligations                          |       | 66       |
| SECTION 5.06. |       | Maintenance of Properties                       |       | 66       |
| SECTION 5.07. |       | Insurance                                       |       | 66       |
| SECTION 5.08. |       | [Reserved]                                      |       | 66       |
| SECTION 5.09. |       | Books and Records; Inspection and Audit  Rights |       | 66       |
| SECTION 5.10. |       | Compliance with Laws                            |       | 66       |
| SECTION 5.11. |       | Use of Proceeds and Letters of Credit           |       | 66       |
| SECTION 5.12. |       | Additional Subsidiaries                         |       | 67       |
| SECTION 5.13. |       | Further Assurances                              |       | 67       |
| SECTION 5.14. |       | Environmental Matters                           |       | 67       |
| SECTION 5.15. |       | Designation of Subsidiaries                     |       | 68       |
| SECTION 5.16. |       | Post Closing Matters                            |       | 69       |

 

ii

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| ** **         | ** ** | ** **                                                  | ** ** | **Page** |
|--------------------|------------|-------------------------------------------------------------|------------|----------|
|               |       |                                                        |       |     |
|               |       | ARTICLE VI                                                  |       |     |
|               |       |                                                        |       |     |
|               |       | Negative Covenants                                          |       |     |
|               |       |                                                        |       |     |
| SECTION 6.01. |       | Indebtedness; Certain Equity Securities                     |       | 70       |
| SECTION 6.02. |       | Liens                                                       |       | 73       |
| SECTION 6.03. |       | Fundamental Changes                                         |       | 74       |
| SECTION 6.04. |       | Investments, Loans, Advances, Guarantees  and Acquisitions  |       | 75       |
| SECTION 6.05. |       | Asset Sales                                                 |       | 78       |
| SECTION 6.06. |       | Sale and Leaseback Transactions                             |       | 80       |
| SECTION 6.07. |       | Swap Agreements                                             |       | 80       |
| SECTION 6.08. |       | Restricted Payments                                         |       | 80       |
| SECTION 6.09. |       | Transactions with Affiliates                                |       | 82       |
| SECTION 6.10. |       | Restrictive Agreements                                      |       | 84       |
| SECTION 6.11. |       | Amendment of Material Documents                             |       | 86       |
| SECTION 6.12. |       | Senior Secured Leverage Ratio                               |       | 86       |
| SECTION 6.13. |       | Fiscal Year                                                 |       | 86       |
|               |       |                                                        |       |     |
|               |       | ARTICLE VII                                                 |       |     |
|               |       |                                                        |       |     |
|               |       | Events of Default                                           |       |     |
|               |       |                                                        |       |     |
| SECTION 7.01. |       | Events of Default                                           |       | 86       |
| SECTION 7.02. |       | Borrower’s Right to Cure                               |       | 89       |
| SECTION 7.03. |       | Exclusion of Immaterial Subsidiaries                        |       | 89       |
|               |       |                                                        |       |     |
|               |       | ARTICLE VIII                                                |       |     |
|               |       |                                                        |       |     |
|               |       | The Agents                                                  |       |     |
|               |       |                                                        |       |     |
| SECTION 8.01. |       | The Agents                                                  |       | 90       |
|               |       |                                                        |       |     |
|               |       | ARTICLE IX                                                  |       |     |
|               |       |                                                        |       |     |
|               |       | Miscellaneous                                               |       |     |
|               |       |                                                        |       |     |
| SECTION 9.01. |       | Notices                                                     |       | 92       |
| SECTION 9.02. |       | Waivers; Amendments                                         |       | 94       |
| SECTION 9.03. |       | Expenses; Indemnity; Damage Waiver                          |       | 97       |
| SECTION 9.04. |       | Successors and Assigns                                      |       | 98       |
| SECTION 9.05. |       | Survival                                                    |       | 101      |
| SECTION 9.06. |       | Counterparts; Integration; Effectiveness                    |       | 101      |
| SECTION 9.07. |       | Severability                                                |       | 101      |
| SECTION 9.08. |       | Right of Setoff                                             |       | 101      |
| SECTION 9.09. |       | Governing Law; Jurisdiction; Consent to  Service of Process |       | 102      |
| SECTION 9.10. |       | WAIVER OF JURY TRIAL                                        |       | 102      |
| SECTION 9.11. |       | Headings                                                    |       | 103      |
| SECTION 9.12. |       | Confidentiality                                             |       | 103      |
| SECTION 9.13. |       | Interest Rate Limitation                                    |       | 103      |
| SECTION 9.14. |       | USA Patriot Act                                             |       | 103      |

 

iii

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| SECTION 9.15. |   | Release of Guarantee and Collateral |   | 104 |
|--------------------|--------|-------------------------------------|--------|-----|

 

iv

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| SCHEDULES:       |                                                                        |
|------------------|-----------------------------------------------------------------------------|
|             |                                                                        |
| Schedule 1.01(a) | — Existing Letters of Credit                                           |
| Schedule 1.01(c) | — Specified Subsidiaries                                               |
| Schedule 2.01    | — Commitments                                                          |
| Schedule 3.03    | — No Conflicts                                                         |
| Schedule 3.05    | — Real Property                                                        |
| Schedule 3.06    | — Litigation                                                           |
| Schedule 3.12    | — Subsidiaries                                                         |
| Schedule 5.01    | — Website Address                                                      |
| Schedule 6.01    | — Existing Indebtedness                                                |
| Schedule 6.02    | — Existing Liens                                                       |
| Schedule 6.04    | — Existing Investments                                                 |
| Schedule 6.05    | — Sales, Transfers and Dispositions                                    |
| Schedule 6.08    | — Outstanding Warrants                                                 |
| 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 Davis  Polk & Wardwell              |
| Exhibit B-2 | — Form of Opinion of Waller Lansden  Dortch & Davis, LLP |
| 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-1 | — Form of Term Loan Note                                          |
| Exhibit G-2 | — Form of Revolving Credit Note                                   |

 

----

 

CREDITAGREEMENT dated as of August 23, 2007, among SYMBOL MERGER SUB, INC. (tobe merged with and into SYMBION, INC.), a Delaware corporation (the “Borrower”),SYMBOL HOLDINGS CORPORATION, a Delaware corporation (“Holdings”), theLENDERS party hereto from time to time, MERRILL LYNCH CAPITAL CORPORATION, asAdministrative Agent and Collateral Agent, MERRILL LYNCH & CO.,MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED and BANC OF AMERICASECURITIES LLC, as joint lead arrangers and joint bookrunners, BANK OF AMERICA,N.A., as Syndication Agent, and THE ROYAL BANK OF SCOTLAND PLC and FIFTH THIRDBANK, as Co-Documentation Agents.

 

Pursuant tothe Agreement and Plan of Merger dated as of April 24, 2007 (the “MergerAgreement”), by and between Merger Sub and the Acquired Business, on theEffective Date, Merger Sub will merge with and into the Acquired Business (the “Merger”),with the Acquired Business surviving the Merger and acceding to all of MergerSub’s rights and obligations hereunder.

 

Immediatelyprior to or substantially concurrently with the consummation of the Merger, (a) thePermitted Investors will contribute cash to Holdings (the “EquityContributions”) in an aggregate amount that together with the value of theequity of Holdings held by members of management (the “Rollover Equity”)will be equal to at least 25% of the consolidated capitalization of Holdingsand its subsidiaries after giving effect to the Transactions, and Holdings willcontribute to the Borrower the portion of such cash contributions not used topay Transaction Costs; (b) the Borrower will cause the repayment of, andterminate all commitments under and all liens in connection with, the ExistingCredit Facility (the “Repayment”); and (c) the Borrower will enterinto the Bridge Loan Credit Agreement.

 

The Borrowerhas requested that the Lenders extend credit in the form of (a) Tranche ATerm Loans on the Effective Date in an aggregate principal amount not to exceed$125,000,000, (b) Tranche B Term Loans on the Effective Date in anaggregate principal amount not to exceed $125,000,000 and (c) RevolvingLoans, Swingline Loans and Letters of Credit at any time and from time to timeduring the Revolving Availability Period, in an aggregate principal amount atany time outstanding not to exceed $100,000,000.

 

The proceedsof the Term Loans and any Revolving Loans borrowed on the Effective Date willbe used by the Borrower on the Effective Date, solely (i) first, topay the Transaction Costs, (ii) second, to pay all principal,interest, fees and other amounts outstanding under the Existing Credit Facilityand (iii) third, together with the Equity Contributions, to pay themerger consideration (the “Merger Consideration”) required by the MergerAgreement; provided that no more than $5,000,000 in Revolving Loans maybe drawn on the Effective Date.  Theproceeds of Revolving Loans borrowed after the Effective Date, Swingline Loansand Letters of Credit will be used by the Borrower for working capital andgeneral corporate purposes (including Permitted Acquisitions).

 

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

 

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# ARTICLE I

#  

# Definitions

 

## SECTION 1.01.                                    Defined Terms.  As used in this Agreement, the followingterms 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 ratedetermined by reference to the Alternate Base Rate.

 

“AcquiredBusiness” means Symbion, Inc., a Delaware corporation.  It is understood and agreed that upon andfollowing the consummation of the Merger, the Acquired Business shall be the Borrowerhereunder.

 

“AcquisitionDocuments” means the Merger Agreement, the other agreements to be enteredinto in connection with the Merger and all schedules, exhibits and annexes toeach of the foregoing.

 

“AdditionalLender” has the meaning set forth in Section 2.20.

 

“AdministrativeAgent” means Merrill Lynch Capital Corporation, in its capacity as administrativeagent for the Lenders under the Loan Documents.

 

“AdministrativeQuestionnaire” means an administrative questionnaire in a form supplied bythe Administrative Agent.

 

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

 

“Agent Affiliates”has the meaning set forth in Section 8.01.

 

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

 

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

 

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

 

“ApplicablePercentage” means, with respect to any Revolving Lender, the percentage ofthe aggregate Revolving Commitments represented by such Lender’s RevolvingCommitment.  If the Revolving Commitmentshave terminated or expired, the Applicable Percentages shall be determinedbased upon the Revolving Commitments most recently in effect, giving effect toany assignments that occur thereafter.

 

1

----

 

“ApplicableRate” means, for any day with respect to (a) any ABR Loan or EurodollarLoan that is a Revolving Loan or (b) the commitment fees payable hereunderin respect of the Revolving Commitments, as applicable, the applicable rate perannum set forth below under the caption “Revolving Loan ABR Spread”, “RevolvingLoan Eurodollar Spread” or “Revolving Commitment Fee Rate”, as applicable, ineach case, based upon the Leverage Ratio as of the most recent determinationdate, provided that prior to the date of delivery to the AdministrativeAgent, pursuant to Section 5.01, of the Borrower’s consolidated financialinformation for the Borrower’s first full fiscal quarter ending after theEffective Date, the “Applicable Rate” for purposes of clauses (a) and (b) aboveshall be the applicable rate per annum set forth below in Category 1:

 
| **Leverage Ratio**                      | ** ** | **Revolving  Loan ABR  Spread** | ** ** | **Revolving  Loan  Eurodollar  Spread** | ** ** | **Revolving  Commitment  Fee Rate** | ** ** |
|----------------------------------------------|------------|--------------------------------------|------------|-----------------------------------------|------------|------------------------------------------|------------|
| Category 1 > 3.25:1.00                    |       | 2.25                                 | %          | 3.25                                    | %          | 0.50                                     | %          |
| Category 2  < 3.25:1.00 and> 2.75:1.00 |       | 2.00                                 | %          | 3.00                                    | %          | 0.50                                     | %          |
| Category 3< 2.75:1.00                     |       | 1.75                                 | %          | 2.75                                    | %          | 0.50                                     | %          |

 

The ApplicableRate for Term Loans shall at all times be 3.25% per annum for Eurodollar Loansand 2.25% per annum for ABR Loans.

 

For purposesof the foregoing, (x) the Leverage Ratio shall be determined on a ProForma Basis as of the end of each fiscal quarter of the Borrower based upon theBorrower’s consolidated financial statements delivered pursuant to Section 5.01(a) or(b) and (y) each change in the Applicable Rate resulting from achange in the Leverage Ratio shall be effective during the period commencing onand including the date of delivery to the Administrative Agent of suchconsolidated financial statements indicating such change and ending on the dateimmediately preceding the effective date of the next such change, providedthat the Applicable Rate shall be the applicable rate per annum set forth abovein Category 1 (i) at any time that an Event of Default under Section 7.01(a),(b), (h) or (i) has occurred and is continuing or (ii) if theBorrower fails to deliver the consolidated financial statements required to bedelivered by it pursuant to Section 5.01(a) or (b), during the periodfrom the expiration of the time for delivery thereof until such consolidatedfinancial statements are delivered.  TheAdministrative Agent shall notify the Borrower and the Lenders upon any changein the Applicable Rate in accordance with the proviso in the immediatelypreceding sentence provided that the failure to give such notice shallnot affect the validity of such change in the Applicable Rate.

 

“Approved Electronic Communications” means eachnotice, demand, communication, information, document and other material thatany Loan Party is obligated to, or otherwise chooses to, provide to theAdministrative Agent pursuant to any Loan Document or the transactionscontemplated therein, including (a) any supplement, joinder or amendmentto the Security Documents and any other written contractual obligationdelivered or required to be delivered in respect of any Loan Document or thetransactions contemplated therein and (b) any financial statement,financial and other report, notice, request, certificate and other informationmaterial.

 

“ApprovedElectronic Platform” has the meaning set forth in Section 8.01.

 

2

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“ApprovedFund” has the meaning set forth in Section 9.04(b).

 

“Arrangers”means Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc ofAmerica Securities LLC.

 

“Assignmentand Assumption” means an assignment and assumption entered into by a Lenderand 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 Aor any other form approved by the Administrative Agent.

 

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

 

“Board ofDirectors” shall mean, with respect to any Person, (i) in the case ofany corporation, the board of directors of such Person or any committee thereofduly authorized to act on behalf of such board, (ii) in the case of anylimited liability company, the board of managers of such Person, (iii) inthe case of any partnership, the board of directors or board of managers of thegeneral partner of such Person and (iv) in any other case, the functionalequivalent of the foregoing.

 

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

 

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

 

“BorrowingRequest” means a request by the Borrower for a Borrowing in accordance withSection 2.03, provided that a written Borrowing Request shall besubstantially in the form of Exhibit E, or such other form as shallbe approved by the Administrative Agent.

 

“BridgeLoan Credit Agreement” means the Credit Agreement, dated the EffectiveDate, among the Borrower, Holdings, the lenders party thereto from time to timeand Merrill Lynch Capital Corporation, as Administrative Agent.

 

“BridgeLoan Documents” means the “Loan Documents” as defined in the Bridge LoanCredit Agreement.

 

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

 

“CalculationDate” means the date on which any event for which the calculation of theFixed Charge Coverage Ratio, the Senior Secured Leverage Ratio or the LeverageRatio is required occurs.

 

“CapitalExpenditures” means, for any period (and without duplication), (a) theadditions to property, plant and equipment and other capital expenditures ofthe Borrower and any of the Restricted Subsidiaries that are (or would be) setforth in a consolidated statement of cash flows of the Borrower for such periodprepared in accordance with GAAP and (b) Capital Lease Obligationsincurred by the Borrower and the Restricted Subsidiaries during such period.

 

3

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“CapitalLease Obligations” of any Person means the obligations of such Person topay rent or other amounts under any lease of (or other arrangement conveyingthe right to use) real or personal property, or a combination thereof, whichobligations are required to be classified and accounted for as capital leaseson a balance sheet of such Person under GAAP, and the amount of suchobligations shall be the capitalized amount thereof determined in accordancewith GAAP.

 

“Center”means a surgery center, a diagnostic imaging center, a surgical hospital centeror a hospital located in the United States that in each case provides onlysurgical services and services directly related thereto.

 

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

 

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

 

“Change inControl” means:

 

(a)                                  priorto an IPO, the Borrower ceasing to be a direct or indirect wholly ownedsubsidiary of Holdings,

 

(b)                                 priorto an IPO, the failure by the Permitted Investors to own, directly or indirectly,beneficially or of record, Equity Interests in Holdings representing a majorityof the aggregate ordinary voting power represented by the issued andoutstanding Equity Interests in Holdings,

 

(c)                                  uponand after an IPO, the acquisition of ownership, directly or indirectly, beneficiallyor of record, by any Person or group (within the meaning of the Securities ExchangeAct of 1934, as amended, and the rules of the SEC thereunder as in effecton the date hereof) of Equity Interests in Holdings representing 50% or more ofthe aggregate ordinary voting power represented by the issued and outstandingEquity Interests in Holdings, or

 

(d)                                 occupationof a majority of the seats (other than vacant seats) on the Board of Directorsof Holdings by Persons who were not (i) nominated by at least a majorityof the Board of Directors of Holdings, (ii) appointed by at least amajority of directors so nominated or (iii) nominated by the PermittedInvestors, or

 

(e)                                  theoccurrence of a “Change in Control”, as defined in the Bridge Loan Documents orthe documents governing the Take Out Notes.

 

“Change inLaw” means (a) the adoption of any law, rule or regulation afterthe date of this Agreement, (b) any change in any law, rule orregulation or in the interpretation or application thereof by any GovernmentalAuthority after the date of this Agreement or (c) compliance by any Lenderor the Issuing Bank (or, for purposes of Section 2.15(b), by any lendingoffice of such Lender or by such Lender’s or the Issuing Bank’s holdingcompany, if any) with any request, guideline or directive (whether or nothaving the force of law) of any Governmental Authority made or issued after thedate of this Agreement.

 

“Charges”has the meaning set forth in Section 9.13.

 

4

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“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 A TermLoans, Tranche B Term Loans or Swingline Loans and, when used in reference toany Commitment, refers to whether such Commitment is a Revolving Commitment, aTranche A Commitment or a Tranche B Commitment.

 

“CLO”has the meaning set forth in Section 9.04(b).

 

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

 

“Collateral”means any and all “Collateral”, as defined in any applicable Security Document(which shall include the Mortgaged Properties), and all other property ofwhatever kind subject or purported to be subject from time to time to a Lienunder any Security Document.

 

“CollateralAgent” means Merrill Lynch Capital Corporation in its capacity ascollateral agent for the Lenders under this Agreement and any SecurityDocument.

 

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

 

“Collateraland Guarantee Requirement” means the requirement that:

 

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

 

(b)                                 alloutstanding Equity Interests of (i) the Borrower and (ii) each whollyowned Restricted Subsidiary owned directly by any Loan Party shall have beenpledged pursuant to the Collateral Agreement (except that the Loan Parties (i) shallnot be required to pledge more than 65% of the outstanding voting EquityInterests of any first-tier Foreign Subsidiary and (ii) shall not berequired to pledge or otherwise grant security interests in any assets of aForeign Subsidiary) and the Collateral Agent shall have received certificatesor other instruments (if any) representing all such Equity Interests, togetherwith undated stock powers or other instruments of transfer with respect theretoendorsed in blank;

 

(c)                                  allIndebtedness of a Restricted Subsidiary that is not a Loan Party (other thanany such Indebtedness that does not exceed $10,000,000 in the aggregate at anyone time outstanding) that is owing to a Loan Party shall be evidenced by aPledged Note and shall have been pledged pursuant to the Collateral Agreement,and the Collateral Agent shall have received all such Pledged Notes and otherpromissory notes required to be delivered pursuant to the Collateral Agreement,together with undated instruments of transfer with respect thereto;

 

(d)                                 alldocuments and instruments, including Uniform Commercial Code financingstatements, required by law or reasonably requested by the Collateral Agent tobe executed, filed, registered or recorded to create the Liens intended to becreated by the Collateral Agreement and perfect such Liens to the extent requiredby the Collateral Agreement, shall have been executed, filed, registered orrecorded or delivered to the Collateral Agent for filing, registration or recording;and

 

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(e)           theCollateral Agent shall have received (i) counterparts of a Mortgage with respectto each Mortgaged Property duly executed and delivered by the record owner ofsuch Mortgaged Property and (ii) a policy or policies of title insuranceissued by a nationally recognized title insurance company, in an amount not toexceed the Fair Market Value of such Mortgaged Property, insuring the Lien ofeach such Mortgage as a valid Lien on the Mortgaged Property described therein,free of any other Liens except as expressly permitted by Section 6.02,together with such customary endorsements and such surveys (to the extentcurrently existing), legal opinions (excluding zoning and land use opinions), acompleted Federal Emergency Management Agency Standard Flood HazardDetermination with respect to each Mortgaged Property and other documents asthe Collateral Agent or the Required Lenders may reasonably request withrespect to any such Mortgage or Mortgaged Property;

 

Notwithstanding anything to the contrary inthis Agreement or any Security Document, no Loan Party shall be required topledge or grant security interests in particular assets if, in the reasonablejudgment of the Administrative Agent or the Collateral Agent, the costs ofcreating or perfecting such pledges or security interests in such assets(including any mortgage, stamp, intangibles or other tax) are excessive in relationto the benefits to the Lenders therefrom. The Administrative Agent may grant extensions of time for the perfectionof security interests in or the obtaining of title insurance or surveys withrespect to particular assets (including extensions beyond the Effective Datefor the perfection of security interests in the assets of the Loan Parties onsuch date) where it reasonably determines, in consultation with the Borrower,that perfection cannot be accomplished without undue effort or expense by thetime or times at which it would otherwise be required by this Agreement or theSecurity Documents.  Notwithstanding theforegoing provisions of this definition or anything in this Agreement or anyother Loan Document to the contrary, Liens required to be granted from time totime pursuant to the Collateral and Guarantee Requirement shall be subject toexceptions and limitations set forth in the Security Documents.

 

“Commitment” means a Revolving Commitment, aTranche A Commitment, a Tranche B Commitment, a Commitment in respect of anIncremental Extension of Credit (if any) or any combination thereof (as the contextrequires).

 

“Consolidated EBITDA”means, with respect to any specified Person for any period, Consolidated NetIncome for such Person for such period plus

 

(a)           withoutduplication and to the extent deducted in determining such Consolidated NetIncome for such period, the sum of:  (i) consolidatedinterest expense (and solely for purposes of calculating the Fixed ChargeCoverage Ratio, other Fixed Charges) of the Borrower and its RestrictedSubsidiaries for such period and, to the extent not reflected in such totalinterest expense, increased by payments made in respect of hedging obligationsor other derivative instruments entered into for the purpose of hedginginterest rate risk, minus any payments received in respect of such hedgingobligations or other derivative instruments, (ii) consolidated Tax expenseof the Borrower and its Restricted Subsidiaries based on income, profits orcapital, including state, franchise, capital and similar taxes and withholdingtaxes paid or accrued during such period, (iii) all amounts attributableto depreciation and amortization expense of the Borrower and its RestrictedSubsidiaries for such period, (iv) any Non-Cash Charges for such period, (v) TransactionCosts made or incurred by the Borrower and its Restricted Subsidiaries in connectionwith the Transactions for such period that are paid, accrued or reserved forwithin 365 days of the consummation of the Transactions, (vi) anyextraordinary, unusual or non-recurring fees, cash charges and other cashexpenses for such period (A) made or incurred by the Borrower and itsRestricted Subsidiaries in connection with any Permitted Acquisition, includingseverance, relocation and facilities closing costs, including any earnoutpayments, whether or not accounted 

 

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for as such that are paid,accrued or reserved for within 365 days of such transaction, or (B) incurredin connection with the issuance of Equity Interests or Indebtedness or theextinguishment of Indebtedness, (vii) cash expenses incurred during suchperiod in connection with a Permitted Acquisition to the extent that suchexpenses are reimbursed in cash during such period pursuant to indemnificationprovisions of any agreement relating to such transaction, (viii) fees paidto the Sponsor or any Sponsor Affiliate under Section 6.09(j) or6.09(r), (ix) cash expenses incurred during such period in connection withextraordinary casualty events to the extent such expenses are reimbursed incash by insurance during such period, (x) income attributable todiscontinued operations (excluding income attributable to assets or operationsthat have been disposed of during such period) and (xi) Net Income of anyPerson to the extent excluded from the calculation of Consolidated Net Incomepursuant to clause (1) of the definition thereof (i.e., the minority interestof the Borrower in the entities generating such Net Income) for such period; minus

 

(b)           withoutduplication and to the extent included in determining such Consolidated NetIncome, (i) any cash payments made during such period in respect ofNon-Cash Charges described in clause (a)(iv) taken in a prior periodor taken in such period, (ii) any non-cash items of income for such period(other than the accrual of revenue or recording of receivables in the ordinarycourse of business) and (iii) losses attributable to discontinuedoperations (excluding losses attributable to assets or operations that havebeen disposed of during such period), all determined on a consolidated basis inaccordance with GAAP,

** **

(c)           (withoutduplication) plus unrealized losses and minus unrealized gains ineach case in respect of Swap Agreements, as determined in accordance with GAAP,plus

** **

(d)           withrespect to any Restricted Subsidiary that is not wholly owned by the Borroweror a Subsidiary Loan Party that has any outstanding Pledged Note(s) issuedto the Borrower or any Subsidiary Loan Party, the least of (i) theminority interest of such Restricted Subsidiary as of the last day of suchperiod, (ii) the outstanding amount of all Pledged Notes issued by suchRestricted Subsidiary to the Borrower or any Subsidiary Loan Party as of thelast day of such period and (iii) the amount of the Consolidated EBITDA ofsuch Restricted Subsidiary for such period that is not otherwise included in thecalculation of Consolidated EBITDA for such period, plus

 

(e)           withrespect to any Non-Consolidated Entity that has any outstanding Pledged Note(s) issuedto the Borrower or any Subsidiary Loan Party, the lesser of (i) the outstandingamount of all Pledged Notes issued by such Non-Consolidated Entity to theBorrower or a Subsidiary Loan Party as of the last day of such period and (ii) theamount of the Consolidated EBITDA of such Non-Consolidated Entity for suchperiod that is not otherwise included in the calculation of Consolidated EBITDAfor such period, all as determined in accordance with GAAP.

 

For the purpose of the definition of ConsolidatedEBITDA, “Non-Cash Charges” means (a) losses on asset sales, disposalsor abandonments, (b) any impairment charge or asset write-off orwrite-down related to intangible assets, long-lived assets, and investments indebt and equity securities pursuant to GAAP, (c) all losses frominvestments recorded using the equity method, (d) stock-based awardscompensation expense, and (e) other non-cash charges (provided thatif any non-cash charges, expenses and write-downs referred to in this clause (e) representan accrual or reserve for potential cash items in any future period, the cashpayment in respect thereof in such future period shall be subtracted fromConsolidated EBITDA to such extent, and excluding amortization of a prepaidcash item that was paid in a prior period).

 

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“Consolidated Net Income” means, with respectto any specified Person for any period, the aggregate of the Net Income of suchspecified Person and its subsidiaries (or in the case of the Borrower, itsRestricted Subsidiaries) for such period, on a consolidated basis, determinedin accordance with GAAP; provided that:

 

(1)           theNet Income (and net loss) of any other Person that is not a Restricted Subsidiaryof such specified Person or that is accounted for by the equity method ofaccounting will be excluded; provided that Consolidated Net Income ofthe Borrower will be increased by the amount of dividends or otherdistributions or other payments actually paid in cash (or to the extentconverted into cash) or Permitted Investments to the Borrower or a RestrictedSubsidiary thereof in respect of such period, to the extent not alreadyincluded therein;

 

(2)           solelyfor the purposes of any calculation of Excess Cash Flow, the Net Income forsuch period of any Restricted Subsidiary (other than any Subsidiary Loan Party)shall be excluded to the extent that the declaration or payment of dividends orsimilar distributions by that Restricted Subsidiary of its Net Income is not atthe date of determination wholly permitted without any prior governmentalapproval (which has not been obtained) or, directly or indirectly, by theoperation of the terms of its charter or any agreement, instrument, judgment,decree, order, statute, rule, or governmental regulation applicable to thatRestricted Subsidiary or its stockholders, unless such restriction with respectto the payment of dividends or similar distributions has been legally waived; providedthat Consolidated Net Income of the Borrower shall be increased by the amountof dividends or other distributions or other payments actually paid in cash (orto the extent converted into cash) or Permitted Investments to the Borrower ora Restricted Subsidiary in respect of such period, to the extent not already includedtherein;

 

(3)           thecumulative effect of a change in accounting principles will be excluded;

 

(4)           theamortization of any premiums, fees or expenses incurred in connection with theTransactions or any amounts required or permitted by Accounting PrinciplesBoard Opinions Nos. 16 (including non-cash write-ups and non-cash chargesrelating to inventory and fixed assets, in each case arising in connection withthe Transactions) and 17 (including non-cash charges relating to intangiblesand goodwill), in each case in connection with the Transactions, will beexcluded;

 

(5)           anygain or loss, together with any related provision for Taxes on such gain orloss, realized in connection with: (a) any sales of assets out of theordinary course of business (it being understood that a sale of assetscomprising discontinued operations shall be deemed a sale of assets out of theordinary course of business); or (b) the disposition of any securities bysuch Person or any of its Restricted Subsidiaries or the extinguishment of anyIndebtedness of such Person or any of its Restricted Subsidiaries will beexcluded;

 

(6)           anyextraordinary gain or loss, together with any related provision for Taxes onsuch extraordinary gain or loss will be excluded;

 

(7)           incomeor losses attributable to discontinued operations (including without limitation,operations disposed during such period whether or not such operations wereclassified as discontinued) will be excluded;

 

(8)           anynon-cash charges (i) attributable to applying the purchase method ofaccounting in accordance with GAAP, (ii) resulting from the application ofFAS 142 or FAS 144, and 

 

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(iii) relating to theamortization of intangibles resulting from the application of FAS 141, will beexcluded;

 

(9)           allnon-cash charges relating to employee benefit or other management or stockcompensation plans of the Borrower or a Restricted Subsidiary (excluding anysuch non-cash charge to the extent that it represents an accrual of or reservefor cash expenses in any future period or amortization of a prepaid cashexpense incurred in a prior period) will be excluded to the extent that suchnon-cash charges are deducted in computing such Consolidated Net Income; provided*,*further*,* that if the Borrower or anyRestricted Subsidiary of the Borrower makes a cash payment in respect of suchnon-cash charge in any period, such cash payment will (without duplication) bededucted from the Consolidated Net Income of the Borrower for such period;

 

(10)         allunrealized gains and losses relating to hedging transactions and mark-to-marketof Indebtedness denominated in foreign currencies resulting from the applicationof FAS 52 shall be excluded; and

 

(11)         accrualsand reserves that are established within twelve months after the Effective Dateand that are so required to be established as a result of the Transactions inaccordance with GAAP shall be executed.

 

“Contract Consideration” has the meaning setforth in the definition of “Excess Cash Flow.”

 

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

 

“Cumulative Retained Excess Cash Flow” shallmean, at any time, (a) the aggregate amount of Excess Cash Flow generatedin each fiscal year of the Borrower that shall have been completed at or priorto such time to the extent the deliveries required by Section 5.01(a) and5.01(c)(ii)(B) with respect to such fiscal year shall have been made minus(b) all prepayments that are or shall be required by Section 2.11(d) withrespect to such Excess Cash Flow generated in all such completed fiscal years.

 

“Cure Amount” has the meaning set forth in Section 7.02(a).

 

“Cure Right” has the meaning set forth in Section 7.02(a).

 

“Default” means any event or condition thatconstitutes an Event of Default or which upon notice, lapse of time or bothwould, unless cured or waived, become an Event of Default.

 

“Designated Noncash Consideration” means anynon-cash consideration received by the Borrower or a Restricted Subsidiary inconnection with an asset sale pursuant to Section 6.05(g) that isdesignated as Designated Noncash Consideration pursuant to an officers’certificate of the Borrower.

 

“Designation Date” has the meaning set forthin Section 5.15(a).

 

“Disqualified Equity Interests” means anyEquity Interest that, by its terms (or by the terms of any security into whichit is convertible, or for which it is exchangeable, in each case, at the optionof the holder of the Equity Interest), or upon the happening of any event,matures or is mandatorily redeemable, pursuant to a sinking fund obligation orotherwise, or redeemable at the option of the holder 

 

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of the Equity Interest, inwhole or in part, other than in each case solely in exchange for QualifiedEquity Interests, on or prior to the date that is 90 days after the Tranche BMaturity Date.  Notwithstanding thepreceding sentence, (x) any Equity Interest that would constituteDisqualified Equity Interests solely because the holders of the Equity Interesthave the right to require the Borrower or the Subsidiary that issued such EquityInterest to repurchase such Equity Interest upon the occurrence of a change ofcontrol or an asset sale will not constitute Disqualified Equity Interests ifthe terms of such Equity Interest provide that the Borrower may not repurchasesuch Equity Interest unless the Borrower would be permitted to do so incompliance with Section 6.08, (y) any Equity Interest that wouldconstitute Disqualified Equity Interests solely as a result of any redemptionfeature that is conditioned upon, and subject to, compliance with Section 6.08will not constitute Disqualified Equity Interests and (z) any EquityInterest issued to any plan for the benefit of employees will not constituteDisqualified Equity Interests solely because it may be required to berepurchased by the Borrower or the Subsidiary that issued such Equity Interestin order to satisfy applicable statutory or regulatory obligations.  The amount of Disqualified Equity Interestsdeemed to be outstanding at any time for purposes of this Agreement will be themaximum amount that the Borrower and its Restricted Subsidiaries may becomeobligated to pay upon the maturity of, or pursuant to any mandatory redemptionprovisions of, such Disqualified Equity Interests, exclusive of accrueddividends.

 

“Documentation Agents” means The Royal Bankof Scotland PLC and Fifth Third Bank, in their capacity as documentationagents.

 

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

 

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

 

“Effective Date” means August 23, 2007.

 

“Environmental Laws” means all applicablelaws (including the common law), rules, regulations, codes, ordinances, orders,decrees, judgments, injunctions, or binding agreements issued, promulgated orentered into by or with any Governmental Authority, relating to theenvironment, or the presence, management, Release or threatened Release of anychemical, waste, pollutant or contaminant or any explosive, radioactive,infectious, toxic or otherwise hazardous material, substance or waste.

 

“Environmental Liability” means liabilities,obligations, damages, claims, actions, suits, judgments, orders, fines, penalties,fees, expenses and costs (including administrative oversight costs, naturalresource damages and medical monitoring, investigation or remediation costs),whether contingent or otherwise, arising out of or relating to (a) complianceor non-compliance with any Environmental Law, (b) the generation, use,handling, transportation, storage, treatment or disposal of any Hazardous Materials,(c) exposure to any Hazardous Materials, (d) the Release orthreatened Release of any Hazardous Materials or (e) any contract,agreement or other consensual agreement pursuant to which liability is assumedor imposed with respect to any of the forgoing.

 

“Environmental Permit” means any permit,approval, identification number, license or other authorization required underany Environmental Law and relating to the business of Holdings, the Borrower orany Subsidiary.

 

“Equity Contributions” has the meaning setforth in the preamble to this Agreement.

 

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“Equity Interests” means shares of capitalstock, partnership interests, membership interests in a limited liabilitycompany, beneficial interests in a trust or other equity ownership interests ina Person, and any warrants, options or other rights entitling the holderthereof to purchase or acquire any such equity interest from the issuerthereof.

 

“ERISA” means the Employee Retirement IncomeSecurity Act of 1974 and the regulations promulgated thereunder, as amendedfrom time to time.

 

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

 

“ERISA Event” means (a) any “reportableevent”, as defined in Section 4043 of ERISA or the regulations issuedthereunder, with respect to a Plan (other than an event for which the 30 daynotice period is waived), (b) the failure to satisfy the minimum fundingstandard of Section 412 of the Code or Section 302 of ERISA, whetheror not waived, (c) the failure to make by its due date a requiredinstallment under Section 412(m) of the Code (or Section 430(j) ofthe Code, as amended by the Pension Protection Act of 2006) with respect to anyPlan or the failure to make any required contribution to a Multiemployer Plan, (d) thefiling pursuant to Section 412(d) of the Code or Section 303(d) ofERISA of an application for a waiver of the minimum funding standard withrespect to any Plan, (e) the incurrence by the Borrower or any of itsERISA Affiliates of any liability under Title IV of ERISA, other than for PBGCpremiums due but not delinquent under Section 4007 of ERISA, with respectto the termination of any Plan, (f) the receipt by the Borrower or anyERISA Affiliate from the PBGC or a plan administrator of any notice relating toan intention to terminate any Plan or Plans or to appoint a trustee toadminister any Plan, (g) the incurrence by the Borrower or any of itsERISA Affiliates of any liability with respect to the withdrawal or partialwithdrawal from any Plan or Multiemployer Plan, (h) the receipt by theBorrower or any ERISA Affiliate of any notice, or the receipt by any MultiemployerPlan from the Borrower or any ERISA Affiliate of any notice, concerning theimposition of Withdrawal Liability or a determination that a Multiemployer Planis, or is expected to be, insolvent or in reorganization, within the meaning ofTitle IV of ERISA, (i) the “substantial cessation of operations” withinthe meaning of Section 4062(e) of ERISA with respect to a Plan, (j) themaking of any amendment to any Plan which could directly result in theimposition of a lien or the posting of a bond or other security or (k) theoccurrence of a nonexempt prohibited transaction (within the meaning of Section 4975of the Code or Section 406 of ERISA) which, individually or in theaggregate, is reasonably likely to result in a Material Adverse Effect.

 

“Eurodollar”, when used in reference to anyLoan or Borrowing, refers to whether such Loan, or the Loans comprising suchBorrowing, are bearing interest at a rate determined by reference to the LIBORate.

 

“Event of Default” has the meaning set forthin Section 7.01.

 

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

 

(a)           ConsolidatedNet Income for such fiscal year, adjusted to exclude any gains or lossesattributable to Prepayment Events; plus

 

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

 

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(c)           theamount, 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)           thesum of (i) any non-cash gains or non-cash items of income included in determiningConsolidated Net Income for such fiscal year plus (ii) the amount,if any, by which Net Working Capital increased during such fiscal year (exceptas a result of reclassification of items from long-term to short-term); minus

 

(e)           theamount of cash Capital Expenditures of the Borrower and its Restricted Subsidiariesin such fiscal year financed with Internally Generated Funds; minus

 

(f)            theaggregate principal amount of Long-Term Indebtedness or other long-term liabilitiesrepaid or prepaid by the Borrower and its Restricted Subsidiaries during suchfiscal year, excluding (i) Indebtedness in respect of Revolving Loans,Swingline Loans and Letters of Credit (unless there is a correspondingreduction in the aggregate Revolving Commitments), (ii) Term Loans prepaidpursuant to Section 2.11(a), (c) or (d), and (iii) repayments orprepayments of Long-Term Indebtedness or other long term-liabilities financedother than with Internally Generated Funds; minus

 

(g)           cashTaxes paid in such fiscal year that did not reduce Consolidated Net Income forsuch fiscal year; minus

 

(h)           withoutduplication of amounts deducted pursuant to clause (j) below in prior fiscalyears, the amount of Investments and acquisitions made during such periodpursuant to Section 6.04 financed with Internally Generated Funds,including, to the extent not expensed, fees, cash charges and other cashexpenses in connection with such Investment or acquisition (other than anyInvestment in Holdings, the Borrower or any wholly owned RestrictedSubsidiary); minus

 

(i)             tothe extent not otherwise deducted from Consolidated Net Income, TransactionCosts that are paid, accrued or reserved for within 365 days of such transaction;minus

 

(j)             withoutduplication of amounts deducted from Excess Cash Flow in prior periods, theaggregate consideration required to be paid in cash by the Borrower or any ofthe Restricted Subsidiaries pursuant to binding contracts (the “ContractConsideration”) entered into prior to or during such period relating toPermitted Acquisitions or Capital Expenditures to be consummated or made duringthe period of four consecutive fiscal quarters of the Borrower following theend of such period, providedthat to the extent the aggregate amount of internally generated cash actuallyutilized to finance such Permitted Acquisitions during such period of fourconsecutive fiscal quarters is less than the Contract Consideration, the amountof such shortfall shall be added to the calculation of Excess Cash Flow at theend of such period of four consecutive fiscal quarters; minus

 

(k)           cashpayments made during such fiscal year in respect of non-cash charges thatincreased Excess Cash Flow in any prior fiscal year; minus

 

(l)            anyRestricted Payments paid in cash to any Person that is not the Borrower or anyRestricted Subsidiary during such fiscal year by the Borrower to the extentpermitted pursuant to Section 6.08 and financed with Internally GeneratedFunds.

 

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“Exchange Act” shall mean theSecurities Exchange Act of 1934, as amended, and the rules and regulationspromulgated thereunder.

 

“Excluded Taxes” means, with respect to theAdministrative Agent, any Lender, the Issuing Bank or any other recipient ofany payment to be made by or on account of any obligation of the Borrowerhereunder, (a) income or franchise taxes imposed on (or measured by) itsoverall net income or net profits by the United States of America, or by thejurisdiction under the laws of which such recipient is organized or in whichits principal office is located or, in the case of any Lender, in which itsapplicable lending office is located, or as a result of doing business in thejurisdiction imposing such tax, other than solely as a result of the LoanDocuments or any transaction contemplated hereby, (b) any branch profitstaxes imposed by the United States of America or any similar tax imposed by anyother jurisdiction described in clause (a) above, (c) in the case ofa Foreign Lender (other than an assignee pursuant to a request by the Borrowerunder Section 2.19(b)), any withholding tax that is in effect and wouldapply to amounts payable to such Foreign Lender at the time such Foreign Lenderbecomes a party to this Agreement (or designates a new lending office), exceptto 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 receiveadditional amounts from the Borrower with respect to any withholding taxpursuant to Section 2.17(a), (d) any withholding tax that isattributable to a Lender’s failure to comply with Section 2.17(e), and (e) anypenalty or interest that is attributable to the foregoing taxes.

 

“Existing Credit Facility” means the Amendedand Restated Credit Agreement dated as of March 21, 2005 among theAcquired Business, the guarantors identified therein, Bank of America, N.A., asadministrative agent, and the lenders party thereto, as amended, through the EffectiveDate.

 

“Existing Issuing Bank” means SunTrust Bank.

 

“Existing Lender” has the meaning set forthin Section 2.20.

 

“Existing Letters of Credit” means thoseletters of credit outstanding on the Effective Date and listed on Schedule1.01(a).

 

“Fair Market Value” means the value thatwould be paid by a willing buyer to an unaffiliated willing seller in atransaction not involving distress or necessity of either party, determined ingood faith by the Board of Directors, chief executive officer or chieffinancial officer of the Borrower.

 

“Federal Funds Effective Rate” means, for anyday, the weighted average (rounded upwards, if necessary, to the next 1/100 of1%) of the rates on overnight Federal funds transactions with members of theFederal Reserve System arranged by Federal funds brokers, as published on thenext succeeding Business Day by the Federal Reserve Bank of New York, or, ifsuch 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 forsuch day for such transactions received by the Administrative Agent from threeFederal funds brokers of recognized standing selected by it.

 

“Financial Officer” means the chief financialofficer, principal accounting officer, treasurer or controller of the Borrower,in each case in his or her capacity as such.

 

“Financial Performance Covenant” means thecovenant of the Borrower set forth in Section 6.12.

 

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“Fixed Charge Coverage Ratio” means the ratioof (a) Consolidated EBITDA for the most recent period of four consecutivefiscal quarters of the Borrower for which internal financial statements areavailable ended prior to any applicable date to (b) the Fixed Charges ofthe Borrower and its Restricted Subsidiaries for such period.

 

“Fixed Charges”means, with respect to any specified Person for any period, the sum, withoutduplication, of:

 

(1)           theconsolidated interest expense of such Person and its subsidiaries (or in thecase of the Borrower, its Restricted Subsidiaries) for such period, net ofinterest income, whether paid or accrued, including, without limitation,original issue discount, non-cash interest payments, the interest component ofall payments associated with Capital Lease Obligations, commissions, discountsand other fees and charges incurred in respect of letter of credit or bankers’acceptance financings, and net of the effect of all cash payments made orreceived pursuant to hedging obligations in respect of interest rates, andexcluding (v) amortization of deferred financing costs, (w) accretionor accrual of discounted liabilities not constituting Indebtedness, (x) anyexpense resulting from the discounting of any Indebtedness in connection withthe application of purchase accounting in connection with any acquisition, (y) anyexpensing of bridge, commitment and other financing fees and (z) to theextent included in Fixed Charges, the portion of consolidated interest expensesof such Person and its Restricted Subsidiaries attributable to Indebtednessincurred in connection with the acquisition of discontinued operations; *plus*

* *

(2)           anyinterest on Indebtedness of another Person that is guaranteed by such Person orone of its Restricted Subsidiaries or secured by a Lien on assets of suchPerson or one of its Restricted Subsidiaries, but only to the extent suchGuarantee or Lien is called upon; *plus*

* *

(3)           allcash dividends paid on any series of preferred stock of such Person or any ofits Restricted Subsidiaries (other than to the Borrower or any RestrictedSubsidiary of the Borrower), in each case, determined on a consolidated basisin accordance with GAAP.

 

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

 

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

 

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

 

“Government Programs” means (i) theMedicare and Medicaid Programs, (ii) the United States Department ofDefense Civilian Health Program for Uniformed Services (including TRICAREPrime, TRICARE Extra and TRICARE Standard) and any successor or predecessorthereof and (iii) other similar foreign or domestic Federal, state orlocal reimbursement or governmental healthcare programs.

 

 “GovernmentalAuthority” means the government of the United States of America, any othernation or any political subdivision thereof, whether state or local, and anyagency, authority, instrumentality, regulatory body, court, central bank orother entity exercising executive, legislative, judicial, taxing, regulatory oradministrative powers or functions of government.

 

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 “GovernmentalReimbursement Program Cost” means with respect to any amount due andpayable by the Borrower and its Subsidiaries the sum of:

 

(a)           all amounts (including punitive andother similar amounts) agreed to be paid or payable (i) in settlement ofclaims or (ii) as a result of a final, non-appealable judgment, award orsimilar order, in each case, relating to participation in Government Programs;

 

(b)           all final, non-appealable fines,penalties, forfeitures or other amounts rendered pursuant to criminalindictments or other criminal proceedings relating to participation in GovernmentPrograms; and

 

(c)           the amount of final, non-appealablerecovery, damages, awards, penalties, forfeitures or similar amounts renderedin any litigation, suit, arbitration, investigation, review or other legal oradministrative proceeding of any kind relating to participation in GovernmentPrograms.

 

“Guarantee” of or by any Person (the “Guarantor”)means any obligation, contingent or otherwise, of the guarantor guaranteeing orhaving the economic effect of guaranteeing any Indebtedness or other obligationof any other Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, and including any obligation of the guarantor, director indirect, (a) to purchase or pay (or advance or supply funds for thepurchase 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 paymentthereof, (b) to purchase or lease property, securities or services for thepurpose of assuring the owner of such Indebtedness or other obligation of thepayment thereof, (c) to maintain working capital, equity capital or anyother financial statement condition or liquidity of the primary obligor so asto enable the primary obligor to pay such Indebtedness or other obligation or (d) asan account party or applicant in respect of any letter of credit or letter ofguaranty issued to support such Indebtedness or obligation, providedthat the term “Guarantee” shall not include endorsements for collection ordeposit in the ordinary course of business. The amount of any Guarantee of any Guarantor shall be deemed to be thelower of (a) an amount equal to the stated or determinable amount of theprimary obligation in respect of which the Guarantee is made and (b) themaximum amount for which such Guarantor may be liable pursuant to the terms ofthe instrument embodying such Guarantee.

 

“Hazardous Materials” means all explosive,radioactive, infectious, or toxic materials, and all other chemicals,materials, substances, wastes, pollutants or contaminants regulated pursuant toany Environmental Law, including petroleum or petroleum byproducts, asbestos orasbestos-containing materials, polychlorinated biphenyls, and radon gas.

 

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

 

“Immaterial Subsidiary” means a RestrictedSubsidiary that has total assets with a Fair Market Value of not more than$500,000; provided that all Immaterial Subsidiaries taken together shallnot have total assets of more than $5,000,000 and all Restricted Subsidiariesthat would otherwise be Immaterial Subsidiaries but for such $5,000,000limitation shall not be considered Immaterial Subsidiaries.

 

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

 

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

 

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

 

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“Indebtedness” of any Person means, withoutduplication, (a) all obligations of such Person for borrowed money, (b) allobligations of such Person evidenced by bonds, debentures, notes or similarinstruments, (c) all obligations of such Person under conditional sale orother title retention agreements relating to property acquired by such Person, (d) allobligations of such Person in respect of the deferred purchase price ofproperty or services (excluding trade accounts payable and accrued obligationsincurred in the ordinary course of business), (e) all obligations ofothers 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 nonrecourse to such Person, to thefair value of such property, (f) all Guarantees by such Person of theIndebtedness of any other Person, (g) all Capital Lease Obligations ofsuch Person, (h) all reimbursement obligations of such Person as anaccount party or applicant in respect of letters of credit and letters ofguaranty and (i) all obligations, contingent or otherwise, of such Personin respect of bankers’ acceptances.  TheIndebtedness of any Person shall include the Indebtedness of any other entity(including any partnership in which such Person is a general partner) to theextent such Person is liable therefor as a result of such Person’s ownershipinterest in or other relationship with such entity, except to the extent theterms of such Indebtedness provide that such Person is not liable therefor.

 

“Indemnified Taxes” means Taxes other than ExcludedTaxes.

 

“Indemnitee” has the meaning set forth in Section 9.03(b).

 

“Information” has the meaning set forth in Section 9.12.

 

“Information Memorandum” means the ConfidentialInformation Memorandum dated July 2007, relating to Holdings, theBorrower, its Subsidiaries and the Transactions.

 

“Interest Election Request” means a requestby the Borrower to convert or continue a Revolving Borrowing or a TermBorrowing in accordance with Section 2.07, provided that a writtenInterest 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) withrespect to any ABR Loan (including a Swingline Loan), the last Business Day ofeach March, June, September and December and (b) with respect toany Eurodollar Loan, the last day of the Interest Period applicable to theBorrowing of which such Loan is a part and, in the case of a EurodollarBorrowing with an Interest Period of more than three months’ duration, each dayprior to the last day of such Interest Period that occurs at intervals of threemonths’ duration after the first day of such Interest Period.

 

“Interest Period” means, with respect to anyEurodollar Borrowing, the period commencing on the date of such Borrowing andending 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, atthe time of the relevant Borrowing, all Lenders participating therein agree tomake an interest period of such duration available), as the Borrower may elect,provided that (a) if any Interest Period would end on a day otherthan a Business Day, such Interest Period shall be extended to the nextsucceeding Business Day unless such next succeeding Business Day would fall inthe next calendar month, in which case such Interest Period shall end on thenext preceding Business Day, (b) any Interest Period that commences on thelast Business Day of a calendar month (or on a day for which there is nonumerically 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 InterestPeriod.  For purposes hereof, the date ofa Borrowing initially shall be the date on which such Borrowing is made andthereafter shall be the effective date of the most recent conversion or 

 

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continuation of suchBorrowing and (c) the initial Interest Period in respect of EurodollarBorrowings of Term Loans made on the Effective Date shall commence on theEffective Date and end on the last Business Day of September 2007.

 

“Internally Generated Funds” means any amountexpended by the Borrower and its Restricted Subsidiaries and not representing (i) theproceeds of Capital Lease Obligations or Long-Term Indebtedness (other thanIndebtedness under a revolving line of credit to the extent repaid), (ii) theproceeds of the issuance of Equity Interests (or capital contributions inrespect thereof) or (iii) Net Proceeds from a Prepayment Event or othercredit received from a disposition, sale or other transfer or exchange ofassets outside the ordinary course of business.

 

“Investment” hasthe meaning set forth in Section 6.04.

 

“IPO” means a bona fide underwritten initialpublic offering of Equity Interests of Holdings, the Borrower or a Parent afterthe Effective Date.

 

“IP Rights” has the meaning set forth in Section 3.21.

 

“Issuing Bank” means Fifth Third Bank or suchother Lender designated as an “Issuing Bank” pursuant to Section 2.05(k) and,with respect to each Existing Letter of Credit, the Existing Issuing Bank.  The Issuing Bank may, in its discretion, arrangefor one or more Letters of Credit to be issued by Affiliates of the IssuingBank, in which case the term “Issuing Bank” shall include any such Affiliatewith respect to Letters of Credit issued by such Affiliate.

 

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

 

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

 

“Lenders” means the Persons listed on Schedule2.01 and any other Person that shall have become a party hereto pursuant toan Assignment and Assumption or an Incremental Facility Amendment, other thanany such Person that ceases to be a party hereto pursuant to an Assignment andAssumption.  Unless the context otherwiserequires, the term “Lenders” includes the Swingline Lender.

 

“Letter of Credit” means any letter of creditissued pursuant to this Agreement or any Existing Letter of Credit.

 

“Leverage Ratio” means, on any date, theratio of (a) Total Indebtedness on such date to (b) ConsolidatedEBITDA for the period of four consecutive fiscal quarters of the Borrower endedon such date (or, if such date is not the last day of a fiscal quarter, endedon the last day of the fiscal quarter of the Borrower most recently ended priorto such date).

 

“LIBO Rate” means, with respect to anyEurodollar Borrowing for any Interest Period, the rate per annum determined bythe Administrative Agent to be the arithmetic mean of the offered rates fordeposits in dollars with a term comparable to such Interest Period (as setforth by any service selected by Administrative Agent which has been nominatedby the British Bankers’ Association as an authorized information vendor for thepurpose of displaying such rates) at approximately 11:00 a.m., London, England

 

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time, on the second fullBusiness Day preceding the first day of such Interest Period; provided, however,that to the extent that an interest rate is not ascertainable pursuant to theforegoing provisions of this definition, the “LIBO Rate” shall be the interestrate per annum determined by Administrative Agent to be the average of therates per annum at which deposits in dollars are offered for such InterestPeriod to major banks in the London interbank market in London, England atapproximately 11:00 a.m. (London time) on the date that is two BusinessDays prior to the beginning of such Interest Period.  Each determination by Administrative Agentpursuant to this definition shall be conclusive absent manifest error.

 

“Lien” means, with respect to any asset, (a) anymortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge orsecurity interest in, on or of such asset and (b) the interest of a vendoror a lessor under any conditional sale agreement, capital lease or titleretention agreement (or any financing lease having substantially the sameeconomic effect as any of the foregoing) relating to such asset.

 

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

 

“Loan Documents” means this Agreement, theNotes, if any, executed and delivered pursuant to Section 2.09(e), anyIncremental Facility Amendment, the Collateral Agreement and the other SecurityDocuments.

 

“Loan Parties” means Holdings (other than forpurposes of Article VI and terms used therein), the Borrower and the SubsidiaryLoan Parties.

 

“Loans” means the loans made by the Lendersto the Borrower pursuant to this Agreement or an Incremental FacilityAmendment.

 

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

 

“Material Adverse Effect” means a materialadverse effect on (a) the business, operations, assets or financialcondition of Holdings, the Borrower and its Restricted Subsidiaries, taken as awhole, (b) the ability of the Loan Parties taken as a whole to performtheir payment obligation under any Loan Document or (c) the rights of orbenefits available to the Lenders and Agents under any Loan Document or theability of the Agent and the Lenders to enforce the Loan Documents.

 

“Material Indebtedness” means Indebtedness(other than the Loans and Letters of Credit), or obligations in respect of oneor more Swap Agreements, of any one or more of Holdings, the Borrower and itsRestricted Subsidiaries in an aggregate principal amount, individually or inthe aggregate, exceeding $10,000,000. For purposes of determining Material Indebtedness, the “principal amount”of the obligations of the Borrower or any Restricted Subsidiary in respect ofany Swap Agreement at any time shall be the maximum aggregate amount (givingeffect to any netting agreements) that the Borrower or such RestrictedSubsidiary would be required to pay if such Swap Agreement were terminated atsuch time.

 

“Maximum Rate” has the meaning set forth in Section 9.13.

 

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

 

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

 

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

 

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

 

“Merger Sub” means Symbol Merger Sub, Inc.,a Delaware corporation.  It is understoodand agreed that Merger Sub shall initially be the “Borrower” hereunder on theEffective Date prior to the consummation of the Merger.

 

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

 

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

 

“Mortgaged Property” means each parcel ofreal property owned by a Loan Party and improvements thereto owned by a LoanParty with respect to which a Mortgage is granted pursuant to Section 5.12or 5.13. In no event shall Mortgaged Property include, or shall any Loan Partybe obligated to grant a Mortgage with respect to, any leasehold.

 

“Multiemployer Plan” means a multiemployerplan as defined in Section 4001(a)(3) of ERISA, to which the Borroweror any ERISA Affiliate makes or is obligated to make contributions.

 

“Net Income” means, with respect to anyspecified Person, the net income (loss) of such Person, determined inaccordance with GAAP and before any reduction in respect of preferred stock dividends.

 

“Net Proceeds” means, with respect to anyevent, (a) the cash proceeds received in respect of such event including (i) anycash received in respect of any non-cash proceeds (including any cash paymentsreceived by way of deferred payment of principal pursuant to a note orinstallment receivable or purchase price adjustment receivable or otherwise,but excluding any interest payments), but only as and when received, (ii) inthe case of a casualty, insurance proceeds and (iii) in the case of acondemnation or similar event, condemnation awards and similar payments, net of(b) the sum of (i) all reasonable fees and out-of-pocket expensespaid to third parties in connection with such event, (ii) in the case of asale, transfer or other disposition of an asset (including pursuant to a saleand leaseback transaction or a casualty or a condemnation or similarproceeding), (X) the amount of all payments required to be made as aresult of such event to repay Indebtedness (other than Loans) secured by suchasset or otherwise subject to mandatory prepayment as a result of such eventand, in the case of any such sale, transfer or other disposition of an asset ofa Subsidiary that is not a Subsidiary Loan Party, the amount of any repaymentsof Indebtedness of such Subsidiary (including intercompany Indebtedness) madewith the proceeds of such sale, transfer or other disposition and (Y) inthe event that a Restricted Subsidiary makes a pro rata payment of dividends toall of its stockholders from any cash proceeds, the amount of dividends paid toany stockholder other than the Borrower or any other Restricted Subsidiary, providedthat any net proceeds of a sale, transfer or other disposition by a RestrictedSubsidiary that is not a Subsidiary Loan Party that are subject to legal orcontractual restrictions on repatriation to the Borrower will not be consideredNet Proceeds for so long as such proceeds are subject to such restrictions, provided,however, that any such contractual restrictions on repatriation were notentered into in contemplation of such sale, transfer or other disposition, (iii) anydistributions and other payments required to be made to minority interestholders or holders in joint ventures as a result of such asset sale and (iv) theamount of all Taxes paid (or reasonably

 

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estimated to be payable) andthe amount of any reserves established to fund liabilities reasonably estimatedto be payable and that are directly attributable to such event (as determinedreasonably and in good faith by a Financial Officer); provided that inno event shall the Net Proceeds received by any Restricted Subsidiary that isnot a wholly owned Restricted Subsidiary exceed the Loan Parties’ ratable ownershipin such Restricted Subsidiary.

 

“Net Working Capital” means, at any date, (a) theconsolidated current assets of the Borrower and its Restricted Subsidiaries asof such date (excluding cash and Permitted Investments) minus (b) theconsolidated current liabilities of the Borrower and its RestrictedSubsidiaries as of such date (excluding current portion of any Long-TermIndebtedness).  Net Working Capital atany date may be a positive or negative number. Net Working Capital increases when it becomes more positive or lessnegative and decreases when it becomes less positive or more negative.

 

“Non-Cash Charges” has the meaning specifiedin the definition of the term “Consolidated EBITDA.”

 

“Non-Consenting Lender” has the meaning setforth in Section 9.02(b).

 

“Non-Consolidated Entity” means each of theoperating partnerships, limited liability companies, limited liabilitypartnerships, joint ventures or similar entities in which the Borrower or itsRestricted Subsidiaries, directly or indirectly, own Equity Interests, otherthan Subsidiaries.

 

“Note” means a    Term Loan Note substantially in the form set forth in Exhibit G-1or a Revolving Credit Note substantially in the form set forth in Exhibit G-2,as the context may require, which Term Loan Notes and Revolving Credit Notesare referred to collectively as the “Notes”.

 

“NPL” means the National Priorities Listunder CERCLA.

 

“Obligations” has the meaning set forth inthe Collateral Agreement.

 

“Organization Documents” means, (a) withrespect to any corporation, the certificate or articles of incorporation andthe bylaws (or equivalent or comparable constitutive documents with respect toany non-U.S. jurisdiction); (b) with respect to any limited liabilitycompany, the certificate or articles of formation or organization and operatingagreement; (c) with respect to any partnership, trust or other form ofbusiness entity, the partnership or other applicable agreement of formation ororganization and any agreement, instrument, filing or notice with respectthereto filed in connection with its formation or organization with theapplicable Governmental Authority in the jurisdiction of its formation ororganization and, if applicable, any certificate or articles of formation ororganization of such entity; and (d) with respect to any entity referredto in clauses (a) through (c) above, any investor, shareholder orsimilar agreement.

 

“Other Taxes” means any and all present orfuture recording, stamp, documentary, excise, transfer, sales, property orsimilar Taxes, charges or levies arising from any payment made under any LoanDocument or from the execution, delivery or enforcement of, or from the filingor recording of or otherwise with respect to the exercise by the AdministrativeAgent or the Lenders of their rights under, any Loan Document.

 

“Parent” means any direct or indirect parentof which Holdings is a wholly owned subsidiary.

 

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

 

“Participant Register” has the meaning setforth in Section 9.04(c).

 

“PBGC” means the Pension Benefit Guaranty Corporationreferred to and defined in ERISA and any successor entity performing similarfunctions.

 

“Perfection Certificate” means a certificatein the form of Exhibit D or any other form approved by theCollateral Agent.

 

“Permitted Acquisitions” means anyacquisition by the Borrower or any Qualified Restricted Subsidiary of Equity Interestsin, all or substantially all the assets of, or all or substantially all theassets constituting a division or line of business of, a Person (that in thecase of an acquisition of Equity Interests, is or becomes a Restricted Subsidiaryor a Non-Consolidated Entity) if (a) no Event of Default has occurred andis continuing or would result therefrom, (b) any Person or assets ordivision as acquired in accordance herewith shall be in one or more lines ofPermitted Business and (c) if such acquisition exceeds $10,000,000 inaggregate cash consideration the Borrower, promptly after the consummation ofsuch acquisition, delivered to the Administrative Agent an officer’s certificateto the effect set forth in clauses (a) and (b) above.

 

“Permitted Business” means (i) anybusiness engaged in by the Borrower or any of its Restricted Subsidiaries onthe Effective Date, and (ii) any business or other activities that arereasonably similar, ancillary, complementary or related to, or a reasonableextension, development or expansion of, the businesses in which the Borrowerand its Restricted Subsidiaries are engaged on the Effective Date.

 

“Permitted Encumbrances” means:

 

(a)                                  Liens imposedby law for Taxes that are not yet due or are being contested in compliance withSection 5.05;

 

(b)                                 carriers’,warehousemen’s, mechanics’, materialmen’s, repairmen’s, constructioncontractors and other like Liens imposed by law, arising in the ordinary courseof business and securing obligations that are not overdue by more than 45 daysor that are being contested in good faith;

 

(c)                                  (i) pledgesand deposits made in the ordinary course of business in compliance with workers’compensation, unemployment insurance and other social security laws or regulationsand (ii) pledges and deposits in the ordinary course of business securingliability for reimbursement or indemnification obligations of (includingobligations in respect of letters of credit or bank guarantees for the benefitof) insurance carriers providing property, casualty or liability insurance toHoldings, the Borrower or any Restricted Subsidiary;

 

(d)                                 deposits tosecure the performance of bids, trade contracts, government contracts,licenses, leases, statutory obligations, surety, stay, customs and appealbonds, performance bonds and other obligations of a like nature (includingthose to secure health, safety and environmental obligations);

 

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

 

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(f)            easements, zoning restrictions, rights-of-way,encroachments, protrusions, minor defects or irregularities of title and othersimilar encumbrances on real property that do not either detract from the valueof the affected property or interfere with the ordinary conduct of business ofthe Borrower or any Restricted Subsidiary, in each case in any materialrespect;

 

(g)           landlords’ and lessors’ and other like Liens in respect ofrent not in default;

 

(h)           any Liens shown on the title insurance policies in favorof the Collateral Agent insuring the Liens of the Mortgages;

 

(i)            licenses or sublicenses, leases or subleases granted toothers not interfering in any material respect with the business of theBorrower or any Subsidiary; and

 

(j)            Liens securing the Obligations.

 

“Permitted Investments” means:

 

(a)           direct obligations of, or obligations the principal of andinterest on which are unconditionally guaranteed by, the United States ofAmerica (or by any agency thereof to the extent such obligations are backed bythe full faith and credit of the United States of America) or by any State ofthe United States of America or any political subdivision of such state, ineach case maturing within one year from the date of acquisition thereof;

 

(b)           investments in commercial paper maturing within 365 daysfrom the date of acquisition thereof and having, at such date of acquisition, acredit rating from S&P or Moody’s of at least A2 or P2, respectively;

 

(c)           investments in certificates of deposit, banker’sacceptances, demand deposits and time deposits maturing within 365 days fromthe date of acquisition thereof issued or guaranteed by or placed with, andmoney market deposit accounts issued or offered by, (i) any Lender whoaccepts such deposits in the ordinary course of such Lender’s business, (ii) anydomestic office of any commercial bank organized under the laws of the UnitedStates of America or any State thereof that has a combined capital and surplusand undivided profits of not less than $500,000,000 or (iii) any bankwhose short-term commercial paper rating from S&P is at least A-2 or theequivalent thereof or from Moody’s is at least P-2 or the equivalent thereof;

 

(d)           fully collateralized repurchase agreements with a term ofnot more than 30 days for securities described in clause (a) above andentered into with a financial institution satisfying the criteria described inclause (c) above; and

 

(e)           investments in money market funds that comply with thecriteria set forth in SEC Rule 2a-7 under the Investment Company Act of1940, as amended, substantially all of whose assets are invested in investmentsof the type described in clauses (a) through (d) above.

 

“Permitted Investors” means the Sponsor, NorthwesternMutual Life Insurance Company and members of management of the Borrower who areholders of Equity Interests of Holdings on the Effective Date and, in eachcase, their respective Affiliates.

 

“Permitted Payment Restriction” means anyencumbrance or restriction (each, a “restriction”) on the ability of anyRestricted Subsidiary to pay dividends or make any other distributions on its 

 

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Equity Interests to theBorrower or a Restricted Subsidiary, which restriction would not materiallyimpair the Borrower’s ability to make scheduled payments of cash interest andto make required principal payments on the Loans as determined in good faith bythe chief financial officer of the Borrower, whose determination shall beconclusive.

 

“Permitted Refinancing Indebtedness” means,with respect to any Indebtedness, any Indebtedness that renews, refinances orreplaces such Indebtedness; provided that (1) the only obligors undersuch renewal, refinancing or replacement Indebtedness are Persons (or otherLoan Parties) that were obligors under the Indebtedness being renewed,refinanced or replaced, (2) if the Indebtedness being renewed, refinancedor replaced is subordinated in right of payment to the Obligations, suchrenewal, refinancing or replacement Indebtedness shall be subordinated in rightof payment to the Obligations on terms at least as favorable to the Lenders asthose contained in the documentation governing the Indebtedness being renewed,refinanced or replaced, (3) such renewal, refinancing or replacement shallnot increase the principal amount of such Indebtedness by an amount in excessof any accrued interest, premiums, fees or expenses payable in connection with suchrenewal, refinancing or replacement, (4) such renewal, refinancing orreplacement Indebtedness has a final stated maturity date equal to or laterthan the earlier of (i) the final stated maturity date of the Indebtednessbeing renewed, refinanced or replaced and (ii) the first anniversary ofthe Tranche B Maturity Date and (5) either (i) such renewal,refinancing or replacement Indebtedness has a weighted average life to maturityequal to or longer than the weighted average life to maturity of the Indebtednessbeing renewed, refinanced or replaced or (ii) the aggregate amount of allscheduled principal repayments in respect of such renewal, refinancing orreplacement Indebtedness during the period through the first anniversary of theTranche B Maturity Date shall not be greater than the aggregate amount ofscheduled principal prepayments during such period of the Indebtedness beingrenewed, refinanced or replaced, and the average weighted life of the scheduledprincipal repayments of such renewal, refinancing or replacement Indebtednessduring such period shall not be earlier than the average weighted life of the remainingscheduled principal repayments during such period of the Indebtedness beingrenewed, refinanced or replaced.

 

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

 

“Plan” means any employee pension benefitplan subject to the provisions of Title IV or Section 302 of ERISA or Section 412of 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 bedeemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“Pledged Notes” means any promissory noteissued to the Borrower or a Subsidiary Loan Party that is pledged to theCollateral Agent under the Security Documents and is a “Pledged Debt Security”under the Collateral Agreement.

 

“Prepayment Event” means:

 

(a)           any sale, transfer or other disposition of any property orasset of Holdings, the Borrower or any Restricted Subsidiary (includingpursuant to Section 6.06) resulting in Net Proceeds in excess of $250,000(in any single transaction or series of related transactions), other than dispositionsdescribed in clauses (a)(i), (a)(iii), (b), (c), (d), (h), (i), (j) and (k) ofSection 6.05;

 

(b)           any casualty or other insured damage to, or any takingunder power of eminent domain or by condemnation or similar proceeding of, anyproperty or asset of Holdings, the Borrower or any Restricted Subsidiaryresulting in Net Proceeds in excess of $250,000; or

 

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(c)           the incurrence by Holdings, the Borrower or any RestrictedSubsidiary of any Indebtedness (other than Indebtedness permitted under Section 6.01).

 

“Prime Rate” means the rate of interest perannum publicly announced from time to time by Merrill Lynch Capital Corporationas its base rate in effect for dollars at its principal office in New York, NewYork; each change in the Prime Rate shall be effective from and including thedate such change is publicly announced as being effective.

 

“Pro Forma Basis” means, for purposes ofcalculating the Fixed Charge Coverage Ratio, the Senior Secured Leverage Ratioor the Leverage Ratio (the “Relevant Calculation”) for any period, inthe event that the Borrower or any of its Restricted Subsidiaries incurs,assumes, repays, repurchases, redeems, defeases or otherwise discharges, orproposes, in a transaction giving rise to the need to calculate the FixedCharge Coverage Ratio, the Senior Secured Leverage Ratio or the Leverage Ratio,to incur, assume, repay, repurchase, redeem, defease or otherwise discharge,any Indebtedness (other than revolving credit borrowings; provided thatpro forma effect shall be given to repayments if such Indebtedness has beenpermanently repaid and not replaced) or issues, repurchases or redeems orproposes, in a transaction giving rise to the need to calculate the FixedCharge Coverage Ratio, the Senior Secured Leverage Ratio or the Leverage Ratio,to issue, repurchase or redeem, preferred stock or Disqualified EquityInterests subsequent to the commencement of the period for which the RelevantCalculation is being calculated and on or prior to the date on which the eventfor which the Relevant Calculation is made, then the Relevant Calculation willbe calculated giving pro forma effect to such incurrence, assumption,repayment, repurchase, redemption, defeasance or other discharge ofIndebtedness, or such issuance, repurchase or redemption of preferred stock orDisqualified Equity Interests, and the use of the proceeds therefrom, as if thesame had occurred at the beginning of the applicable four-quarter reference period.

 

In addition, for purposes of the Relevant Calculation:

 

(1)           Investments, acquisitions, mergers, consolidations anddispositions that have been made by the Borrower or any of its RestrictedSubsidiaries, or any Person or any of its Restricted Subsidiaries acquired by,merged or consolidated with the Borrower or any of its Restricted Subsidiaries,and including any related financing transactions and including increases inownership of Restricted Subsidiaries, during the four-quarter reference periodor subsequent to such reference period and on or prior to the Calculation Datewill be given pro forma effect, including giving effect to Pro Forma CostSavings as if they had occurred on the first day of the four-quarter referenceperiod;

 

(2)           the Fixed Charges attributable to discontinued operations,as determined in accordance with GAAP, and operations or businesses (andownership interests therein) disposed of prior to the Calculation Date, will beexcluded, but only to the extent that the obligations giving rise to such FixedCharges will not be obligations of the Borrower or any of its Restricted Subsidiariesfollowing the Calculation Date;

 

(3)           any Person that is a Restricted Subsidiary on theCalculation Date will be deemed to have been a Restricted Subsidiary at alltimes during such four-quarter period;

 

(4)           any Person that is not a Restricted Subsidiary on theCalculation Date will be deemed not to have been a Restricted Subsidiary at anytime during such four-quarter period; and

 

(5)           if any Indebtedness bears a floating rate of interest, theinterest expense on such Indebtedness will be calculated as if the rate ineffect on the Calculation Date had been the 

 

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applicable rate for theentire period (taking into account any Swap Agreement applicable to such Indebtedness).

 

For purposes of this definition, whenever pro formaeffect is given to a transaction, the pro forma calculations shall be made ingood faith by a responsible financial or accounting officer of the Borrower.

 

Interest on a Capital Lease Obligation shall bedeemed to accrue at an interest rate reasonably determined by a FinancialOfficer to be the rate of interest implicit in such Capital Lease Obligation inaccordance with GAAP.  For purposes of makingthe computation referred to above, interest on any Indebtedness under arevolving credit facility computed on a pro forma basis shall be computed basedupon the average daily balance of such Indebtedness during the applicableperiod.  Interest on Indebtedness thatmay optionally be determined at an interest rate based upon a factor of a primeor similar rate, a eurocurrency interbank offered rate, or other rate, shall bedeemed to have been based upon the rate actually chosen, or, if none, thenbased upon such optional rate chosen as the Borrower may designate.

 

“Pro Forma Cost Savings” means, with respectto any period, (A) the operating expense reductions and other operatingimprovements or synergies that (i) were directly attributable to an acquisition,merger, consolidation or disposition (a “pro forma event”) that occurredduring the four-quarter reference period or subsequent to the four-quarterreference period and on or prior to the Calculation Date and calculated on abasis that is consistent with Article 11 of Regulation S-X under theSecurities Act of 1933, as in effect and applied as of the Effective Date, (ii) wereactually implemented by the business that was the subject of any such pro formaevent within 12 months after the date of such pro forma event and prior to theCalculation Date that are reasonably determined in good faith by a responsiblefinancial or accounting officer of the Borrower or (iii) relate to thebusiness that is the subject of any such pro forma event and that are reasonablydetermined in good faith by a responsible financial or accounting officer ofthe Borrower and is expected to be taken in the 12 months following such proforma event and (B) all adjustments of the nature used in connection withthe calculation of “Pro Forma Adjusted EBITDA-MI” as set forth in theInformation Memorandum to the extent such adjustments, without duplication,continue to be applicable to such four-quarter period and, in the case of eachof (A) and (B), are described in an officers’ certificate, as if all suchreductions in costs had been effected as of the beginning of such period.

 

“Proposed Change” has the meaning set forthin Section 9.02(b).

 

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

 

“Qualified Restricted Subsidiary” means anyRestricted Subsidiary that satisfies each of the following requirements:  (1) except for Permitted PaymentRestrictions, there are no consensual restrictions, directly or indirectly, onthe ability of such Restricted Subsidiary to pay dividends or make distributionsto the holders of its Equity Interests; (2) the Equity Interests of suchRestricted Subsidiary consist solely of (A) Equity Interests owned by theBorrower and its Qualified Restricted Subsidiaries, (B) Equity Interestsowned by Strategic Investors and (C) directors’ qualifying shares; and (3) theprimary business of such Restricted Subsidiary is a Permitted Business.

 

“Refinanced Term Loans” has the meaning setforth in Section 9.02(c).

 

“Register” has the meaning set forth in Section 9.04(b)(iv).

 

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“Regulation U” shall mean Regulation U of theBoard of Governors of the Federal Reserve System as from time to time in effectand any successor to all or a portion thereof.

 

“Regulation X” shall mean Regulation X of theBoard of Governors of the Federal Reserve System as from time to time in effectand any successor to all or a portion thereof.

 

“Reimbursement Approvals” means, with respectto all Government Programs, any and all certifications, provider numbers,provider agreements, participation agreements, accreditations and any othersimilar agreements with or approvals by any Governmental Authority or otherPerson.

 

“Related Parties” means, with respect to anyspecified Person, such Person’s Affiliates and the respective directors,officers, employees, agents, trustees and advisors of such Person and suchPerson’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 anybuilding, structure, facility or fixture.

 

“Repayment” has the meaning set forth in thepreamble to this Agreement.

 

“Replacement Term Loans” has the meaning setforth in Section 9.02(c).

 

“Required Lenders” means, at any time,Lenders having Revolving Exposures, Term Loans, Loans in respect of IncrementalExtensions of Credit (if any) and unused Commitments representing more than 50%of the aggregate Revolving Exposures, outstanding Term Loans, outstanding Loansin respect of Incremental Extensions of Credit (if any) and unused Commitmentsat such time; provided that Revolving Exposures, Term Loans, Loans inrespect of Incremental Extensions of Credit (if any) and unused Commitmentsheld by Holdings or a subsidiary thereof or any Permitted Investor shall bedeemed to not be outstanding for purposes of calculating the Required Lenders.

 

“Required Revolving Lenders” means, at anytime, Revolving Lenders having Revolving Exposures and unused RevolvingCommitments representing more than 50% of the aggregate Revolving Exposures andunused Revolving Commitments at such time; provided that Revolving Exposuresand unused Revolving Commitments held by Holdings or a subsidiary thereof orany Permitted Investor shall be deemed to not be outstanding for purposes ofcalculating the Required Revolving Lenders.

 

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

 

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

 

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“Restricted Subsidiary” means any Subsidiaryof the Borrower other than an Unrestricted Subsidiary.

 

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

 

“Revolving Commitment” means, with respect toeach Lender, the commitment, if any, of such Lender to make Revolving Loans andto acquire participations in Letters of Credit and Swingline Loans hereunder,expressed as an amount representing the maximum possible aggregate amount ofsuch Lender’s Revolving Exposure hereunder, as such commitment may be (a) reducedfrom time to time pursuant to Section 2.08, (b) reduced or increasedfrom time to time pursuant to assignments by or to such Lender pursuant to Section 9.04or (c) increased pursuant to Section 2.20.  The initial amount of each Lender’s RevolvingCommitment is set forth on Schedule 2.01 or in the Assignment andAssumption pursuant to which such Lender shall have assumed its RevolvingCommitment, as applicable.  The initialaggregate amount of the Lenders’ Revolving Commitments is $100,000,000.

 

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

 

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

 

“Revolving Loan” means a Loan made pursuantto Section 2.01(c).

 

“Revolving Maturity Date” means the sixthanniversary of the Effective Date.

 

“Rollover Equity” has the meaning set forthin the preamble to this Agreement.

 

“S&P” means Standard & Poor’s, adivision of The McGraw-Hill Companies, Inc.

 

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

 

“Security Documents” means the CollateralAgreement, the Perfection Certificate, the Mortgages and each other securityagreement or other instrument or document executed and delivered pursuant to Section 5.12or 5.13 to secure any of the Obligations.

 

“Senior Secured Leverage Ratio” means, on anydate, the ratio of (a) Total Senior Secured Indebtedness on such date to (b) ConsolidatedEBITDA for the period of four consecutive fiscal quarters of the Borrower endedon such date (or, if such date is not the last day of a fiscal quarter, endedon the last day of the fiscal quarter of the Borrower most recently ended priorto such date).

 

“Specified Subsidiary” means (i) eachwholly owned Domestic Subsidiary listed on Schedule 1.01(c) (providedthat if any such Subsidiary has not been legally dissolved within 180 daysafter the Effective Date and no Equity Interests therein are owned by StrategicInvestors 180 days after the Effective Date, such Subsidiary shall no longerconstitute a Specified Subsidiary) and (ii) any Qualified RestrictedSubsidiary that is a wholly owned Domestic Subsidiary formed or acquired afterthe Effective Date if a Financial Officer or General Counsel of the Borrowerrepresents in writing to the Administrative

 

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Agent that the Borrowerintends in good faith to syndicate the Equity Interests to Strategic Investorswithin 270 days of such formation or acquisition (provided that if noEquity Interests of such Subsidiary have been syndicated to Strategic Investorswithin 270 days after such formation or acquisition, such Subsidiary shall nolonger constitute a Specified Subsidiary); provided that any SpecifiedSubsidiary shall cease to be a Specified Subsidiary if the Borrower has optedfor it to satisfy the Collateral and Guarantee Requirement.

 

“Sponsor” means Crestview Partners GP, L.P.

 

“SponsorManagement Agreement” means the Management Agreement between the Borrowerand Sponsor dated as of the date hereof, as in effect on the date hereof.

 

“Statutory Reserve Rate” means a fraction (expressedas a decimal), the numerator of which is the number one and the denominator ofwhich is the number one minus the aggregate of the maximum reservepercentages (including any marginal, special, emergency or supplementalreserves) expressed as a decimal established by the Board to which the bankserving as the Administrative Agent is subject with respect to the LIBO Rate,for eurocurrency funding (currently referred to as “Eurocurrency Liabilities”in Regulation D of the Board).  Suchreserve percentages shall include those imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed toconstitute eurocurrency funding and to be subject to such reserve requirementswithout benefit of or credit for proration, exemptions or offsets that may beavailable from time to time to any Lender under such Regulation D or anycomparable regulation.  The StatutoryReserve Rate shall be adjusted automatically on and as of the effective date ofany change in any reserve percentage.

 

“Strategic Investors” means physicians,hospitals, health systems, other healthcare providers, other healthcare companiesand other similar strategic joint venture partners which joint venture partnersare actively involved in the day-to-day operations of providing surgical careand surgery-related services, or, in the case of physicians, that have retiredtherefrom, individuals who are former owners or employees of surgical carefacilities purchased by the Borrower or any of its Restricted Subsidiaries orPersons owned, controlled or managed by individual physicians, and consulting firmsthat receive common Equity Interests as consideration for consulting servicesperformed or for cash invested.

 

“Subordinated Indebtedness” meansIndebtedness of Holdings, the Borrower or any Subsidiary that is contractuallysubordinated to the Obligations.

 

“subsidiary” means, with respect to anyPerson (the “parent”) at any date, any corporation, limited liabilitycompany, partnership, association or other entity the accounts of which wouldbe consolidated with those of the parent in the parent’s consolidated financialstatements if such financial statements were prepared in accordance with GAAPas of such date.

 

“Subsidiary” means any subsidiary of theBorrower.

 

“Subsidiary Loan Party” means any DomesticSubsidiary that is a Restricted Subsidiary (other than (a) any Subsidiarythat is not a wholly owned Subsidiary, (b) any Subsidiary that is prohibitedby applicable law from guaranteeing the Obligations, (c) any ImmaterialSubsidiary for which the Borrower has not opted to satisfy the Collateral and GuaranteeRequirement, (d) any Specified Subsidiary and (e) any otherSubsidiary with respect to which, in the reasonable judgment of theAdministrative Agent (confirmed in writing by notice to the Borrower), the costor other consequences (including any adverse Tax consequences) of providing aGuarantee of the Borrower’s obligations under the Loan Documents shall beexcessive in view of the benefits to be obtained by the Lenders therefrom).

 

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

 

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

 

“Swingline Lender” means Merrill LynchCapital Corporation, in its capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuantto Section 2.04.

 

“Syndication Agent” means Banc of America,N.A., in its capacity as syndication agent.

 

“Take Out Notes” means any debt securitiesissued to refinance all or any portion of the Indebtedness incurred under theBridge Loan Documents.

 

“Tax” or “Taxes” means any and allpresent or future taxes, levies, imposts, duties, deductions, charges orwithholdings imposed by any Governmental Authority.

 

“Term Lender” means a Tranche A Lender or aTranche B Lender.

 

“Term Loan” means a Tranche A Term Loan or aTranche B Term Loan.

 

“Third Party Payor” means any Government Programand any quasi-public agency, Blue Cross, Blue Shield and any managed care plansand organizations, including health maintenance organizations and preferredprovider organizations and private commercial insurance companies and anysimilar third party arrangements, plans or programs for payment orreimbursement in connection with healthcare services, products or supplies.

 

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

 

“Total Assets”****meansthe total assets of the Borrower and its Restricted Subsidiaries on aconsolidated basis as shown on the most recent consolidated balance sheet ofthe Borrower required to be delivered pursuant to Section 5.01(a) or (b)(or if prior to the first time such a consolidated balance sheet is so requiredto be delivered, on the most recent consolidated balance sheet of the Borrowerand its Restricted Subsidiaries that is then available).

 

“Total Indebtedness” means, as of any date,the aggregate principal amount of Indebtedness of the type specified in clauses(a), (b) and (g) of the definition thereof of the Borrower and its RestrictedSubsidiaries outstanding as of such date determined on a consolidated basis, minusthe amount of unrestricted cash and Permitted Investments that is not subjectto any Lien (other than any Lien under the Loan Documents or Liens permitted byclauses (vi), (ix), (x), (xi) and (xiii) of Section 6.02 and Liens 

 

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under clause (a) of thedefinition of “Permitted Encumbrances”) held, on such date, by the Borrower andits Restricted Subsidiaries.

 

“TotalSenior Secured Indebtedness” means, as of any date, the aggregate principalamount, determined on a consolidated basis, of (x) without duplicationIndebtedness of the type specified in clauses (a), (b) and (g) of thedefinition thereof (other than Subordinated Indebtedness) of any Loan Party(other than Holdings) that is secured by a Lien on the assets of any such LoanParty and (y) without duplication Indebtedness of the type specified inclauses (a), (b) and (g) of the definition thereof of any RestrictedSubsidiary that is not a Loan Party, in each case, outstanding as of such date,minus the amount of unrestricted cash and Permitted Investments that isnot subject to any Lien (other than any Lien under the Loan Documents or Lienspermitted by clauses (vi), (ix), (x), (xi) and (xiii) of Section 6.02 andLiens under clause (a) of the definition of “Permitted Encumbrances”)held, on such date, by the Borrower and its Restricted Subsidiaries.

 

“Tranche A Commitment” means, with respect toeach Lender, the commitment, if any, of such Lender to make a Tranche A TermLoan hereunder on the Effective Date, expressed as an amount representing themaximum principal amount of the Tranche A Term Loan to be made by such Lenderhereunder, as such commitment may be (a) reduced from time to timepursuant to Section 2.08 and (b) reduced or increased from time totime pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Tranche ACommitment is set forth on Schedule 2.01 or in the Assignment andAssumption pursuant to which such Lender shall have assumed its Tranche A Commitment,as applicable.  The initial aggregateamount of the Lenders’ Tranche A Commitments is $125,000,000.

 

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

 

“Tranche A Maturity Date” means the sixthanniversary of the Effective Date.

 

“Tranche A Term Loan” means a Loan made pursuantto Section 2.01(a).

 

“Tranche B Commitment” means, with respect toeach Lender, the commitment, if any, of such Lender to make a Tranche B TermLoan hereunder on the Effective Date, expressed as an amount representing themaximum principal amount of the Tranche B Term Loan to be made by such Lenderhereunder, as such commitment may be (a) reduced from time to timepursuant to Section 2.08 and (b) reduced or increased from time totime pursuant to assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Tranche BCommitment is set forth on Schedule 2.01 or in the Assignment andAssumption pursuant to which such Lender shall have assumed its Tranche B Commitment,as applicable.  The initial aggregateamount of the Lenders’ Tranche B Commitments is $125,000,000.

 

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

 

“Tranche B Maturity Date” means the seventhanniversary of the Effective Date.

 

“Tranche B Term Loan” means a Loan made pursuantto Section 2.01(b).

 

“Transaction Costs” means the payment offees, expenses and other costs in connection with the items described inclauses (a)-(f) of the definition of “Transactions.”

 

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“Transactions” means (a) the Merger andthe other transactions contemplated by the Acquisition Documents, (b) theEquity Contributions and the rollover of the Rollover Equity, (c) the Repayment,(d) the execution, delivery and performance by each Loan Party of the LoanDocuments to which it is to be a party, the borrowing of Loans, the use of theproceeds thereof and the issuance of Letters of Credit hereunder on the EffectiveDate, (e) the execution, delivery and performance by each Loan Party ofthe Bridge Loan Documents to which it is to be a party and the borrowing of theloans thereunder and (f) payment of the Transaction Costs on the EffectiveDate.

 

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

 

“Unrestricted Subsidiary” means anySubsidiary of the Borrower designated by the Board of Directors of the Borroweras an Unrestricted Subsidiary pursuant to Section 5.15(a) subsequentto the date hereof.

 

“USA Patriot Act” has the meaning set forthin Section 9.14.

 

“wholly owned” means with respect to anyPerson, a subsidiary of such Person all the outstanding Equity Interests ofwhich (other than (x) directors’ qualifying shares and (y) sharesissued to foreign nationals to the extent required by applicable law) are ownedby such Person and/or by one or more wholly owned subsidiaries of such Person.

 

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

 

## SECTION 1.02.            Classification of Loans andBorrowings.  For purposes of thisAgreement, 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 andType (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified andreferred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g.,a “Eurodollar Borrowing”) or by Class and Type (e.g., a “EurodollarRevolving Borrowing”).

##  

## SECTION 1.03.            Terms Generally.  The definitions of terms herein shall applyequally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronounshall 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 havethe same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) anydefinition of or reference to any agreement, instrument or other documentherein shall be construed as referring to such agreement, instrument or otherdocument as from time to time amended, supplemented or otherwise modified(subject to any restrictions on such amendments, supplements or modificationsset forth herein), (b) any reference herein to any Person shall be construedto include such Person’s successors and assigns, (c) the words “herein”, “hereof”and “hereunder”, and words of similar import, shall be construed to refer tothis Agreement in its entirety and not to any particular provision hereof, (d) allreferences herein to Articles, Sections, Exhibits and Schedules shall beconstrued to refer to Articles and Sections of, and Exhibits and Schedules to,this Agreement and (e) the words “asset” and “property” shall be construedto have the same meaning and effect and to refer to any and all tangible andintangible assets and properties, including cash, securities, accounts andcontract rights.

##  

## SECTION 1.04.            Accounting Terms; GAAP.  Except as otherwise expressly providedherein, all terms of an accounting or financial nature shall be construed inaccordance with GAAP as in

##  

## 32

## 

##  

## effect from time to time, providedthat if the Borrower notifies the Administrative Agent that the Borrowerrequests an amendment to any provision (including any definition) hereof toeliminate the effect of any change occurring after the date hereof in GAAP orin the application thereof on the operation of such provision (or if theAdministrative Agent notifies the Borrower that the Required Lenders request anamendment to any provision (including any definition) hereof for such purpose),regardless of whether any such notice is given before or after such change inGAAP or in the application thereof, then such provision shall be interpreted onthe basis of GAAP as in effect and applied immediately before such change shallhave become effective until such notice shall have been withdrawn or suchprovision amended in accordance herewith.

##  

## SECTION 1.05.            Pro Forma Calculations.  Notwithstanding anything to the contraryherein, the calculation of the Fixed Charge Coverage Ratio, the Senior SecuredLeverage Ratio and the Leverage Ratio on any Calculation Date for any purpose underthis Agreement shall be made on a Pro Forma Basis.

##  

# ARTICLE II

#  

# The Credits

#  

## SECTION 2.01.            Commitments.  Subject to the terms and conditions set forthherein, each Lender agrees (a) to make a Tranche A Term Loan to theBorrower on the Effective Date in a principal amount not exceeding its TrancheA Commitment, (b) to make a Tranche B Term Loan to the Borrower on theEffective Date in a principal amount not exceeding its Tranche B Commitment and(c) to make Revolving Loans to the Borrower from time to time during theRevolving Availability Period in an aggregate principal amount that will notresult in such Lender’s Revolving Exposure exceeding such Lender’s RevolvingCommitment; provided that no more than $5.0 million of Revolving Loansmay be made on the Effective Date. Within the foregoing limits and subject to the terms and conditions setforth herein, the Borrower may borrow, prepay and reborrow RevolvingLoans.  Amounts repaid or prepaid inrespect of the Term Loans may not be reborrowed.

##  

## SECTION 2.02.            Loans and Borrowings.

##  

### (a)           Each Loan (other than a Swingline Loan) shall be made aspart of a Borrowing consisting of Loans of the same Class and Type made bythe Lenders ratably in accordance with their respective Commitments of theapplicable Class.  The failure of anyLender to make any Loan required to be made by it shall not relieve any otherLender of its obligations hereunder, provided that the Commitments ofthe Lenders are several and no Lender shall be responsible for any other Lender’sfailure to make Loans as required.

###  

### (b)           Subject to Section 2.14, each Revolving Borrowing andTerm Loan Borrowing shall be comprised entirely of ABR Loans or EurodollarLoans as the Borrower may request in accordance herewith.  Each Swingline Loan shall be an ABRLoan.  Each Lender at its option may makeany Eurodollar Loan by causing any domestic or foreign branch or Affiliate ofsuch Lender to make such Loan, provided that any exercise of such optionshall not affect the obligation of the Borrower to repay such Loan in accordancewith the terms of this Agreement.

###  

### (c)           At the commencement of each Interest Period for anyEurodollar Borrowing, such Borrowing shall be in an aggregate amount that is anintegral multiple of $500,000 and not less than $1,000,000.  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; provided that, notwithstanding

###  

### 33

### 

###  

### the foregoing each Swingline Loan shall benot less than $250,000 and if greater than such amount shall be in an amount thatis an integral multiple of $100,000. Borrowings of more than one Type and Class may be outstanding atthe same time.  There shall not at anytime be more than a total of ten Eurodollar Borrowings outstanding.  Notwithstanding anything to the contrary herein,an ABR Revolving Borrowing or Swingline Loan may be in an aggregate amount, subjectin the case of Swingline Loans to the limitations on the amounts thereof setforth in Section 2.04(a), (i) that is equal to the entire unused balanceof the aggregate Revolving Commitments or (ii) that is required to financethe reimbursement of an LC Disbursement as contemplated by Section 2.05(e).

###  

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

###  

## SECTION 2.03.            Requests for Borrowings.  To request a Revolving Borrowing or Term LoanBorrowing, the Borrower shall notify the Administrative Agent of such requestby telephone (a) in the case of a Eurodollar Borrowing, not later than1:00 p.m., New York City time, three Business Days before the date of theproposed Borrowing or (b) in the case of an ABR Borrowing, not later than10 a.m., New York City time, one Business Day before the date of theproposed Borrowing.  Each such telephonicBorrowing Request shall be irrevocable and shall be confirmed promptly by handdelivery or telecopy to the Administrative Agent of a written Borrowing Requestsigned by the Borrower.  Each suchtelephonic and written Borrowing Request shall specify the followinginformation in compliance with Section 2.02:

##  

#### (i)      whether the requestedBorrowing is to be a Revolving Borrowing, a Tranche A Term Loan Borrowing or aTranche B Term Loan Borrowing;

####  

#### (ii)     the aggregate amount ofsuch Borrowing;

####  

#### (iii)    the date of suchBorrowing, which shall be a Business Day;

####  

#### (iv)    whether such Borrowing isto be an ABR Borrowing or a Eurodollar Borrowing;

####  

#### (v)     in the case of aEurodollar 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 ofthe Borrower’s account to which funds are to be disbursed, which shall complywith the requirements of Section 2.06.

####  

If no election as to theType of Borrowing is specified, then the requested Borrowing shall be an ABRBorrowing.  If no Interest Period isspecified with respect to any requested Eurodollar Borrowing, then the Borrowershall be deemed to have selected an Interest Period of one month’sduration.  Promptly following receipt ofa Borrowing Request in accordance with this Section 2.03, the AdministrativeAgent shall advise each Lender of the details thereof and of the amount of suchLender’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, theSwingline Lender agrees to make Swingline Loans to the Borrower from time totime during the Revolving Availability Period, in

 

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###  

### an aggregate principal amountat any time outstanding that will not result in (i) the aggregateprincipal amount of outstanding Swingline Loans exceeding $10,000,000 or (ii) theaggregate Revolving Exposures exceeding the aggregate Revolving Commitments, providedthat the Swingline Lender shall not be required to make a Swingline Loan to refinancean outstanding Swingline Loan.  Withinthe 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, theBorrower shall notify the Administrative Agent of such request by telephone (confirmedby telecopy), not later than 1:00 p.m., New York City time, on the day ofa proposed Swingline Loan.  Each such noticeshall be irrevocable and shall specify the requested date (which shall be aBusiness Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advisethe Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each SwinglineLoan available to the Borrower by means of a credit to the general depositaccount of the Borrower maintained with the Swingline Lender (or, in the caseof a Swingline Loan made to finance the reimbursement of an LC Disbursement asprovided 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 writtennotice given to the Administrative Agent not later than 2:00 p.m., NewYork City time, on any Business Day require the Revolving Lenders to acquireparticipations on such Business Day in all or a portion of the Swingline Loansoutstanding.  Such notice shall specifythe aggregate amount of Swingline Loans in which Revolving Lenders will participate.  Promptly upon receipt of such notice, theAdministrative Agent will give notice thereof to each Revolving Lender,specifying in such notice such Lender’s Applicable Percentage of such SwinglineLoan or Swingline Loans.  Each RevolvingLender hereby absolutely and unconditionally agrees, upon receipt of notice asprovided above, to pay to the Administrative Agent, for the account of theSwingline Lender, such Lender’s Applicable Percentage of such Swingline Loan orSwingline Loans.  Each Revolving Lenderacknowledges and agrees that its obligation to acquire participations inSwingline Loans pursuant to this paragraph is absolute and unconditional andshall not be affected by any circumstance whatsoever, including the occurrenceand 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 thisparagraph by wire transfer of immediately available funds, in the same manneras provided in Section 2.06 with respect to Loans made by such Lender (andSection 2.06 shall apply, mutatismutandis, to the paymentobligations of the Revolving Lenders), and the Administrative Agent shallpromptly pay to the Swingline Lender the amounts so received by it from theRevolving Lenders.  The AdministrativeAgent shall notify the Borrower of any participations in any Swingline Loanacquired pursuant to this paragraph, and thereafter payments in respect of suchSwingline Loan shall be made to the Administrative Agent and not to theSwingline Lender.  Any amounts receivedby 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 theproceeds of a sale of participations therein shall be promptly remitted to theAdministrative Agent; any such amounts received by the Administrative Agentshall be promptly remitted by the Administrative Agent to the Revolving Lendersthat shall have made their payments pursuant to this paragraph and to theSwingline Lender, as their interests may appear, provided that any suchpayment so remitted shall be repaid to the Swingline Lender or to theAdministrative Agent, as applicable, if and to the extent such payment isrequired to be refunded to the Borrower for any reason.  The purchase of participations in a SwinglineLoan pursuant to this paragraph shall not relieve the Borrower of any defaultin the payment thereof.

 

35

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## SECTION 2.05.            Letters of Credit.

##  

### (a)           General.  Subject to the terms and conditions set forthherein, the Borrower may request the issuance of Letters of Credit for its ownaccount (or for the account of any of its Restricted Subsidiaries so long asthe Borrower is a co-applicant), in a form reasonably acceptable to the AdministrativeAgent and the Issuing Bank, at any time and from time to time during the RevolvingAvailability Period.  In the event of anyinconsistency between the terms and conditions of this Agreement and the termsand conditions of any form of letter of credit application or other agreementsubmitted by the Borrower to, or entered into by the Borrower with, the IssuingBank relating to any Letter of Credit, the terms and conditions of thisAgreement shall control.  All ExistingLetters of Credit shall be deemed to be issued hereunder and shall constituteLetters of Credit subject to the terms hereof and, to the extent previouslyissued for the account of a Restricted Subsidiary of the Borrower, shallconstitute an obligation of the Borrower pursuant to this Agreement.

###  

### (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 electroniccommunication, if arrangements for doing so have been approved by the IssuingBank) to the Issuing Bank and the Administrative Agent (reasonably in advanceof the requested date of issuance, amendment, renewal or extension) a noticerequesting the issuance of a Letter of Credit, or identifying the Letter ofCredit to be amended, renewed or extended, and specifying the date of issuance,amendment, renewal or extension (which shall be a Business Day), the date onwhich such Letter of Credit is to expire (which shall comply with Section 2.05(c)),the amount of such Letter of Credit, the name and address of the beneficiarythereof 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 aletter of credit application on the Issuing Bank’s standard form in connectionwith 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 Creditthe Borrower shall be deemed to represent and warrant that), after givingeffect to such issuance, amendment, renewal or extension, (i) the LCExposure shall not exceed $10,000,000 and (ii) the aggregate RevolvingExposures shall not exceed the aggregate Revolving Commitments.

###  

### (c)           Expiration Date.  Each Letter of Credit shall expire at orprior to the close of business on the earlier of (i) the date that is oneyear after the date of the issuance of such Letter of Credit (or, in the caseof any renewal or extension thereof, one year after such renewal or extension)and (ii) ten days prior to the Revolving Maturity Date; providedthat at the option of the Issuing Bank any Letter of Credit having a tenor ofone year or greater may provide for the renewal of such Letters of Credit for additionalone year periods so long as such renewal period does not end after the date describedin clause (ii).

###  

### (d)           Participations.  By the issuance of a Letter of Credit (or anamendment to a Letter of Credit increasing the amount thereof) and without anyfurther action on the part of the Issuing Bank or the Lenders, the Issuing Bankhereby grants to each Revolving Lender, and each Revolving Lender herebyacquires from the Issuing Bank, a participation in such Letter of Credit equalto such Lender’s Applicable Percentage of the aggregate amount available to bedrawn under such Letter of Credit.  In considerationand in furtherance of the foregoing, each Revolving Lender hereby absolutelyand unconditionally agrees to pay to the Administrative Agent, for the accountof the Issuing Bank, such Lender’s Applicable Percentage of each LCDisbursement made by the  Issuing Bankand not reimbursed by the Borrower on the date due as provided in Section 2.05(e),or of any reimbursement payment required to be refunded to the Borrower for anyreason.  Each Revolving Lenderacknowledges and agrees that its obligation to acquire participations pursuantto this paragraph in respect of Letters of Credit is absolute and 

 

36

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### unconditional and shall not beaffected by any circumstance whatsoever, including any amendment, renewal orextension of any Letter of Credit or the occurrence and continuance of aDefault or reduction or termination of the Commitments, and that each suchpayment shall be made without any offset, abatement, withholding or reductionwhatsoever.

###  

### (e)           Reimbursement.  If the Issuing Bank shall make any LCDisbursement in respect of a Letter of Credit, the Borrower shall reimbursesuch LC Disbursement by paying to the Administrative Agent an amount equal tosuch LC Disbursement not later than 12:00 noon, New York City time, on theBusiness Day immediately following the day that the Borrower shall havereceived notice of such LC Disbursement; provided that, if such LCDisbursement is not less than $250,000, the Borrower may, subject to theconditions to borrowing set forth herein, request (and, if the Borrower failsto reimburse such LC Disbursement when due, the Borrower shall be deemed to haverequested) in accordance with Section 2.04 that such LC Disbursement be financedwith a Swingline Loan in an equivalent amount and, to the extent so financed,the Borrower’s obligation to make such payment shall be discharged and replacedby the resulting Swingline Loan.  If theBorrower fails to make such payment when due, the Administrative Agent shallnotify each Revolving Lender of the applicable LC Disbursement, the paymentthen due from the Borrower in respect thereof and such Lender’s Applicable Percentagethereof.  Promptly following receipt ofsuch notice, each Revolving Lender shall pay to the Administrative Agent itsApplicable Percentage of the payment then due from the Borrower, in the samemanner as provided in Section 2.06 with respect to Loans made by suchLender (and Section 2.06 shall apply, mutatismutandis, to the paymentobligations of the Revolving Lenders), and the Administrative Agent shallpromptly pay to the Issuing Bank the amounts so received by it from theRevolving Lenders.  Promptly followingreceipt by the Administrative Agent of any payment from the Borrower pursuantto this paragraph, the Administrative Agent shall distribute such payment tothe Issuing Bank or, to the extent that Revolving Lenders have made paymentspursuant to this paragraph to reimburse the Issuing Bank, then to such Lendersand the Issuing Bank as their interests may appear.  Any payment made by a Revolving Lenderpursuant to this paragraph to reimburse the Issuing Bank for any LCDisbursement (other than the funding of a Swingline Loan as contemplated above)shall not constitute a Loan and shall not relieve the Borrower of its obligationto reimburse such LC Disbursement.

###  

### (f)            Obligations Absolute.  The Borrower’s obligation to reimburse LCDisbursements as provided in Section 2.05(e) shall be absolute,unconditional and irrevocable, and shall be performed strictly in accordancewith the terms of this Agreement under any and all circumstances whatsoever andirrespective of (i) any lack of validity or enforceability of any Letterof Credit or this Agreement, or any term or provision therein, (ii) anydraft or other document presented under a Letter of Credit proving to beforged, fraudulent or invalid in any respect or any statement therein beinguntrue or inaccurate in any respect, (iii) payment by the Issuing Bankunder a Letter of Credit against presentation of a draft or other document thatdoes not comply with the terms of such Letter of Credit, or (iv) any otherevent or circumstance whatsoever, whether or not similar to any of theforegoing, that might, but for the provisions of this Section 2.05, constitutea legal or equitable discharge of, or provide a right of setoff against, theBorrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Bank, norany of their Related Parties, shall have any liability or responsibility byreason of or in connection with the issuance or transfer of any Letter ofCredit or any payment or failure to make any payment thereunder (irrespectiveof any of the circumstances referred to in the preceding sentence), or anyerror, omission, interruption, loss or delay in transmission or delivery of anydraft, notice or other communication under or relating to any Letter of Credit(including any document required to make a drawing thereunder), any error ininterpretation of technical terms or any consequence arising from causes beyondthe control of the Issuing Bank, provided that the foregoing shall notbe construed to excuse the Issuing Bank from liability to the Borrower to theextent of any direct damages (as opposed to consequential or punitive damages,claims in respect of which are hereby waived by the Borrower to the extentpermitted by applicable 

 

37

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### law) suffered by the Borrowerthat are caused by the Issuing Bank’s failure to exercise care when determiningwhether drafts and other documents presented under a Letter of Credit complywith the terms thereof or the Issuing Bank’s willful misconduct or grossnegligence.  The parties hereto expresslyagree that, in the absence of gross negligence or willful misconduct on thepart of the Issuing Bank (as finally determined by a court of competentjurisdiction), the Issuing Bank shall be deemed to have exercised care in eachsuch determination.  In furtherance ofthe foregoing and without limiting the generality thereof, the parties agreethat, with respect to documents presented that appear on their face to be insubstantial compliance with the terms of a Letter of Credit, the Issuing Bankmay, in its sole discretion, either accept and make payment upon such documentswithout responsibility for further investigation, regardless of any notice orinformation to the contrary, or refuse to accept and make payment upon such documentsif such documents are not in strict compliance with the terms of such Letter ofCredit.

###  

### (g)           Disbursement Procedures.  The Issuing Bank shall, promptly followingits receipt thereof, examine all documents purporting to represent a demand forpayment under a Letter of Credit.  TheIssuing Bank shall promptly notify the Administrative Agent and the Borrower bytelephone (confirmed by telecopy) of such demand for payment and whether theIssuing Bank has made or will make an LC Disbursement thereunder, providedthat any failure to give or delay in giving such notice shall not relieve theBorrower of its obligation to reimburse the Issuing Bank and the RevolvingLenders with respect to any such LC Disbursement in accordance with Section 2.05(e).

###  

### (h)           Interim Interest.  If the Issuing Bank shall make any LCDisbursement, then, unless the Borrower shall reimburse such LC Disbursement infull on the date such LC Disbursement is made, the unpaid amount thereof shallbear interest, for each day from and including the date such LC Disbursement ismade to but excluding the date that the Borrower reimburses such LCDisbursement, at the rate per annum then applicable to ABR Revolving Loans, providedthat, if the Borrower fails to reimburse such LC Disbursement when due pursuantto Section 2.05(e), then Section 2.13(c) shall apply.  Interest accrued pursuant to this paragraphshall be for the account of the Issuing Bank, except that interest accrued onand after the date of payment by any Revolving Lender pursuant to Section 2.05(e) toreimburse the Issuing Bank shall be for the account of such Lender to theextent of such payment.

###  

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

###  

### (j)            Cash Collateralization.  If any Event of Default shall occur and becontinuing, on the Business Day that the Borrower receives notice from theAdministrative Agent or the Required Lenders (or, if the maturity of the Loanshas been accelerated, Revolving Lenders with LC Exposure representing greaterthan 50% of the aggregate LC Exposure) demanding the deposit of cash collateralpursuant to this paragraph, the Borrower shall deposit in an account with theCollateral Agent, in the name of the Collateral Agent and for the benefit ofthe Lenders, an amount in cash equal to 105% the LC Exposure as of 

 

38

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### such date plus anyaccrued and unpaid interest thereon, provided that the obligation todeposit such cash collateral shall become effective immediately, and suchdeposit shall become immediately due and payable, without demand or othernotice of any kind, upon the occurrence of any Event of Default with respect tothe Borrower described in Section 7.01(h) or (i).  The Borrower also shall deposit cashcollateral pursuant to this paragraph as and to the extent required by Section 2.11(b).  Each such deposit shall be held by theCollateral Agent as collateral for the payment and performance of theObligations of the Borrower under this Agreement.  The Collateral Agent shall have exclusivedominion and control, including the exclusive right of withdrawal, over suchaccount.  Other than any interest earnedon the investment of such deposits, which investments shall be made at theoption and sole discretion of the Administrative Agent and at the Borrower’srisk and expense, such deposits shall not bear interest.  Interest or profits, if any, on suchinvestments shall accumulate in such account. Moneys in such account shall be applied by the Administrative Agent toreimburse the Issuing Bank for LC Disbursements for which it has not beenreimbursed and, to the extent not so applied, shall be held for thesatisfaction of the reimbursement obligations of the Borrower for the LCExposure at such time or, if the maturity of the Loans has been accelerated(but subject to the consent of Revolving Lenders with LC Exposure representinggreater than 50% of the aggregate LC Exposure), be applied to satisfy otherobligations of the Borrower under this Agreement.  If the Borrower is required to provide anamount of cash collateral hereunder as a result of the occurrence of an Eventof Default, such amount (to the extent not applied as aforesaid) shall be returnedto the Borrower within three Business Days after all Events of Default havebeen cured or waived.

###  

### (k)           Additional Issuing Banks.  The Borrower may at any time, and from timeto time, designate one or more additional Lenders to act as an issuing bankunder this Agreement with the consent of the Administrative Agent and, if FifthThird Bank is an Issuing Bank, Fifth Third Bank (which consent, in each case,shall not be unreasonably withheld) and such Lender.  Any Lender designated as an issuing bankpursuant to this Section 2.05(k) shall be deemed to be and shall haveall the rights and obligations of an “Issuing Bank” hereunder.

###  

## SECTION 2.06.            Funding of Borrowings.

##  

### (a)           Each Lender shall make each Loan tobe made by it hereunder on the proposed date thereof by wire transfer ofimmediately available funds by 12:00 noon, New York City time, to the accountof the Administrative Agent most recently designated by it for such purpose bynotice to the Lenders, provided that Swingline Loans shall be made asprovided in Section 2.04.  TheAdministrative Agent will make such Loans available to the Borrower by promptlycrediting the amounts so received, in like funds, to an account of the Borrowermaintained with the Administrative Agent in New York City and designated by theBorrower in the applicable Borrowing Request, provided that ABRRevolving Loans made to finance the reimbursement of an LC Disbursement asprovided in Section 2.05(e) shall be remitted by the AdministrativeAgent to the Issuing Bank.

###  

### (b)           Unless the Administrative Agent shallhave received notice from a Lender prior to the proposed Borrowing that suchLender will not make available to the Administrative Agent such Lender’s shareof such Borrowing, the Administrative Agent may assume that such Lender hasmade such share available on such date in accordance with Section 2.06(a) andmay, in reliance upon such assumption and in its sole discretion, makeavailable to the Borrower a corresponding amount.  In such event, if a Lender has not in factmade its share of the applicable Borrowing available to the AdministrativeAgent, then the applicable Lender and the Borrower severally agree to pay tothe Administrative Agent forthwith on demand such corresponding amount withinterest thereon, for each day from and including the date such amount is madeavailable to the Borrower to but excluding the date of payment to theAdministrative Agent, at (i) in the case of such Lender, the greater ofthe Federal Funds Effective Rate and a rate determined by the AdministrativeAgent in accordance with banking industry rules on interbank compensation 

 

39

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### or (ii) in the case of theBorrower, the interest rate applicable to such Borrowing.  If such Lender pays such amount to theAdministrative Agent, then such amount shall constitute such Lender’s Loanincluded in such Borrowing.

###  

## SECTION 2.07.            Interest Elections.

##  

### (a)           Each Revolving Borrowing and TermLoan Borrowing initially shall be of the Type specified in the applicableBorrowing Request and, in the case of a Eurodollar Borrowing, shall have aninitial Interest Period as specified in such Borrowing Request or as designatedby Section 2.03.  Thereafter, theBorrower may elect to convert such Borrowing to a different Type or to continuesuch Borrowing and, in the case of a Eurodollar Borrowing, may elect InterestPeriods therefor, all as provided in this Section 2.07.  The Borrower may elect different options withrespect to different portions of the affected Borrowing, in which case eachsuch portion shall be allocated ratably among the Lenders holding the Loanscomprising such Borrowing, and the Loans comprising each such portion shall beconsidered a separate Borrowing.  This Section 2.07shall not apply to Swingline Borrowings, which may not be converted or continued.

###  

### (b)           To make an election pursuant to this Section 2.07,the Borrower shall notify the Administrative Agent of such election bytelephone by the time that a Borrowing Request would be required under Section 2.03if the Borrower were requesting a Revolving Borrowing of the Type resultingfrom such election to be made on the effective date of such election.  Each such telephonic Interest ElectionRequest shall be irrevocable and shall be confirmed promptly by hand deliveryor telecopy to the Administrative Agent of a written Interest Election Requestsigned by the Borrower.

###  

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

###  

#### (i)            theBorrowing to which such Interest Election Request applies and, if differentoptions are being elected with respect to different portions thereof, theportions thereof to be allocated to each resulting Borrowing (in which case theinformation to be specified pursuant to clauses (iii) and (iv) belowshall be specified for each resulting Borrowing);

####  

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

####  

#### (iii)          whetherthe resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;and

####  

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

####  

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

 

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

 

40

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### (e)           If the Borrower fails to deliver atimely Interest Election Request with respect to a Eurodollar Borrowing priorto the end of the Interest Period applicable thereto, then, unless such Borrowingis repaid as provided herein, at the end of such Interest Period such Borrowingshall (i) in the case of a Revolving Borrowing, be converted to an ABRBorrowing and (ii) in the case of a Term Borrowing, be continued as aEurodollar Borrowing with an Interest Period of one month.

###  

### (f)            Notwithstanding any contraryprovision hereof, if a payment Event of Default has occurred and is continuingand the Administrative Agent, at the request of the Required Lenders, sonotifies the Borrower, then, so long as such Event of Default is continuing, (i) nooutstanding Borrowing may be converted to or continued as a EurodollarBorrowing and (ii) unless repaid, each Eurodollar Borrowing shall beconverted to an ABR Borrowing at the end of the Interest Period applicablethereto.

###  

## SECTION 2.08.            Termination and Reduction ofCommitments.

##  

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

###  

### (b)           The Borrower may at any timeterminate, or from time to time reduce, the Commitments of any Class, providedthat (i) each reduction of the Commitments of any Class shall be inan amount that is an integral multiple of $500,000 and not less than $1,000,000and (ii) the Borrower shall not terminate or reduce the RevolvingCommitments if, after giving effect to any concurrent prepayment of theRevolving Loans in accordance with Section 2.11, the aggregate RevolvingExposures would exceed the aggregate Revolving Commitments.

###  

### (c)           The Borrower shall notify theAdministrative Agent of any election to terminate or reduce the Commitmentsunder Section 2.08(b) at least three Business Days prior to the effectivedate of such termination or reduction, specifying such election and theeffective date thereof.  Promptly followingreceipt of any notice, the Administrative Agent shall advise the Lenders of thecontents thereof.  Each notice deliveredby the Borrower pursuant to this Section 2.08 shall be irrevocable, providedthat a notice of termination of the Revolving Commitments delivered by theBorrower may state that such notice is conditioned upon the effectiveness ofother credit facilities or the consummation of any other event, in which casesuch notice may be revoked by the Borrower (by notice to the AdministrativeAgent on or prior to the specified effective date) if such condition is notsatisfied.  Any termination or reductionof the Commitments of any Class shall be permanent.  Each reduction of the Commitments of any Class shallbe made ratably among the Lenders in accordance with their respectiveCommitments of such Class.

 

## SECTION 2.09.            Repayment of Loans; Evidence ofDebt.

##  

### (a)           The Borrower hereby unconditionallypromises to pay (i) to the Administrative Agent for the account of eachLender the then unpaid principal amount of each Revolving Loan of such Lenderon the Revolving Maturity Date, (ii) to the Administrative Agent for theaccount of each Lender the then unpaid principal amount of each Tranche A TermLoan of such Lender as provided in Section 2.10, (iii) to theAdministrative Agent for the account of each Lender the then unpaid principalamount of each Tranche B Term Loan of such Lender as provided in Section 2.10and (iv) the then unpaid principal amount of each Swingline Loan on theearlier of the Revolving Maturity Date and the first date after such SwinglineLoan is made that is the 15th or last day of a calendar month and is at leasttwo Business Days after such Swingline Loan is made; provided that oneach date that a Revolving Borrowing is made, the Borrower shall repay allSwingline Loans then outstanding.

 

41

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

###  

### (c)           The Administrative Agent shallmaintain accounts in which it shall record (i) the amount of each Loanmade hereunder, the Class and Type thereof and the Interest Period applicablethereto, (ii) the amount of any principal or interest due and payable orto become due and payable from the Borrower to each Lender hereunder and (iii) theamount of any sum received by the Administrative Agent hereunder for the accountof the Lenders and each Lender’s share thereof.

###  

### (d)           The entries made in the accountsmaintained pursuant to Section 2.09(b) and (c) shall be primafacie evidence of the existence and amounts of the obligations recordedtherein, provided that the failure of any Lender or the AdministrativeAgent to maintain such accounts or any error therein shall not in any manneraffect the obligation of the Borrower to repay the Loans in accordance with theterms of this Agreement.

###  

### (e)           Any Lender may request that Loans ofany Class made by it be evidenced by a Note.  In such event, the Borrower shall prepare,execute and deliver to such Lender a Note payable to the order of such Lender(or, if requested by such Lender, to such Lender and its registeredassigns).  Thereafter, the Loansevidenced by such Notes and interest thereon shall at all times (includingafter assignment pursuant to Section 9.04) be represented by one or moreNotes in such form payable to the order of the payee named therein (or, if suchNote is a registered note, to such payee and its registered assigns).

###  

## SECTION 2.10.            Amortization of Term Loans.

###  

### (a)           Subject to adjustment pursuant to Section 2.10(d),the Borrower shall repay Tranche A Term Loan Borrowings on each date set forthbelow in the aggregate principal amount set forth opposite such date (asadjusted from time to time pursuant to Section 2.10(d)):

 
| **Date**                | ** ** | **Amount** | ** ** |
|-------------------------|------------|------------|------------|
| December 31, 2007  |       | $          | 312,500    |   |
| March 30, 2008     |       | $          | 312,500    |   |
| June 30, 2008      |       | $          | 312,500    |   |
| September 30, 2008 |       | $          | 312,500    |   |
| December 31, 2008  |       | $          | 312,500    |   |
| March 31, 2009     |       | $          | 312,500    |   |
| June 30, 2009      |       | $          | 312,500    |   |
| September 30, 2009 |       | $          | 312,500    |   |
| December 31, 2009  |       | $          | 1,562,500  |   |
| March 31, 2010     |       | $          | 1,562,500  |   |
| June 30, 2010      |       | $          | 1,562,500  |   |
| September 30, 2010 |       | $          | 1,562,500  |   |
| December 31, 2010  |       | $          | 4,687,500  |   |
| March 31, 2011     |       | $          | 4,687,500  |   |
| June 30, 2011      |       | $          | 4,687,500  |   |
| September 30, 2011 |       | $          | 4,687,500  |   |
| December 31, 2011  |       | $          | 6,250,000  |   |

 

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| **Date**                | ** ** | **Amount** | ** ** |
|-------------------------|------------|------------|------------|
| March 31, 2012     |       | $          | 6,250,000  |   |
| June 30, 2012      |       | $          | 6,250,000  |   |
| September 30, 2012 |       | $          | 6,250,000  |   |
| December 31, 2012  |       | $          | 18,125,000 |   |
| March 31, 2013     |       | $          | 18,125,000 |   |
| June 30, 2013      |       | $          | 18,125,000 |   |
| Tranche A Maturity Date |       | $          | 18,125,000 |   |

 

### (b)           Subject to adjustment pursuant to Section 2.10(d),the Borrower shall repay Tranche B Term Loan Borrowings on each date set forthbelow in the aggregate principal amount set forth opposite such date (asadjusted from time to time pursuant to Section 2.10(d)):

 
| **Date**                | ** ** | **Amount** | ** **  |
|-------------------------|------------|------------|-------------|
| December 31, 2007  |       | $          | 312,500     |   |
| March 30, 2008     |       | $          | 312,500     |   |
| June 30, 2008      |       | $          | 312,500     |   |
| September 30, 2008 |       | $          | 312,500     |   |
| December 31, 2008  |       | $          | 312,500     |   |
| March 31, 2009     |       | $          | 312,500     |   |
| June 30, 2009      |       | $          | 312,500     |   |
| September 30, 2009 |       | $          | 312,500     |   |
| December 31, 2009  |       | $          | 312,500     |   |
| March 31, 2010     |       | $          | 312,500     |   |
| June 30, 2010      |       | $          | 312,500     |   |
| September 30, 2010 |       | $          | 312,500     |   |
| December 31, 2010  |       | $          | 312,500     |   |
| March 31, 2011     |       | $          | 312,500     |   |
| June 30, 2011      |       | $          | 312,500     |   |
| September 30, 2011 |       | $          | 312,500     |   |
| December 31, 2011  |       | $          | 312,500     |   |
| March 31, 2012     |       | $          | 312,500     |   |
| June 30, 2012      |       | $          | 312,500     |   |
| September 30, 2012 |       | $          | 312,500     |   |
| December 31, 2012  |       | $          | 312,500     |   |
| March 31, 2013     |       | $          | 312,500     |   |
| June 30, 2013      |       | $          | 312,500     |   |
| September 30, 2013 |       | $          | 312,500     |   |
| December 31, 2013  |       | $          | 312,500     |   |
| March 31, 2014     |       | $          | 312,500     |   |
| June 30, 2014      |       | $          | 312,500     |   |
| Tranche B Maturity Date |       | $          | 116,562,500 |   |

###  

### (c)           To the extent not previously paid,all Tranche B Term Loans shall be due and payable on the Tranche B MaturityDate.  To the extent not previously paid,all Tranche A Term Loans shall be due and payable on the Tranche A MaturityDate.

 

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### (d)           Any mandatory prepayment of a TermLoan Borrowing shall be applied to reduce, in the direct order of maturity, thescheduled repayments of the Term Loan Borrowings to be made pursuant to this Section 2.10on the scheduled payment dates next following the date of such prepayment,unless and until each such scheduled repayment has been eliminated as a resultof reductions hereunder.  Any optionalprepayment of a Term Loan Borrowing shall be applied as directed by theBorrower to do one of the following: (i) to reduce in the direct order ofmaturity the scheduled repayments of the Term Loan Borrowings to be madepursuant to this Section 2.10, (ii) to reduce in the inverse order ofmaturity the scheduled repayments of the Term Loan Borrowings to be made pursuantto this Section 2.10 or (iii) to reduce ratably the remainingscheduled repayments of the Term Loan Borrowings.

###  

## SECTION 2.11.            Prepayment of Loans.

##  

### (a)           The Borrower shall have the right atany time and from time to time to prepay any Borrowing in whole or in part, subjectto the requirements of this Section 2.11.

###  

### (b)           In the event and on such occasionthat the aggregate Revolving Exposures exceeds the aggregate RevolvingCommitments, the Borrower shall prepay Revolving Borrowings or SwinglineBorrowings (or, if no such Borrowings are outstanding, deposit cash collateralin an account with the Collateral Agent pursuant to Section 2.05(j)) in anaggregate amount equal to such excess.

###  

### (c)           In the event and on each occasionthat any Net Proceeds are received by or on behalf of Holdings, the Borrower orany Restricted Subsidiary in respect of any Prepayment Event, the Borrowershall, promptly after such Net Proceeds are received by Holdings, the Borroweror such Restricted Subsidiary (and in any event not later than the fifthBusiness Day after such Net Proceeds are received), prepay Term Loan Borrowingsin an aggregate amount equal to 100% of such Net Proceeds; provided thatin the case of any event described in clause (a) or (b) of thedefinition of the term “Prepayment Event” (other than if the event generatingsuch Net Proceeds is a disposition made pursuant to Section 6.05 (m)), ifthe Borrower shall deliver to the Administrative Agent a certificate of aFinancial Officer to the effect that the Borrower and the RestrictedSubsidiaries intend to apply the Net Proceeds from such event (or a portionthereof specified in such certificate), within 365 days after receipt of suchNet Proceeds, to acquire or replace real property, equipment or other tangibleassets (excluding inventory) to be used in the business of the Borrower and theRestricted Subsidiaries, and certifying that no Event of Default has occurredand is continuing, then no prepayment shall be required pursuant to thisparagraph in respect of the Net Proceeds specified in such certificate, exceptto the extent that the aggregate amount of such Net Proceeds that have not beenso applied or contractually committed in writing by the end of such 365-dayperiod (and, if so contractually committed in writing but not applied prior tothe end of such 365-day period, applied within 180 days of the end of suchperiod), promptly after which time a prepayment shall be required in an amountequal to such Net Proceeds.

###  

### (d)           Following the end of each fiscal yearof the Borrower, commencing with the fiscal year ending December 31, 2008,the Borrower shall prepay Borrowings in an aggregate amount equal to:

###  

(x)                                   theexcess of (A) 50% of Excess Cash Flow over (B) prepayments of Loans underSection 2.11(a) during such fiscal year (other than prepaymentsfunded with the proceeds of incurrences of Indebtedness and in the case ofprepayments of Revolving Loans only so long as the corresponding Commitmentsare reduced permanently) for any fiscal year for which the Leverage Ratio atthe end of such fiscal year is greater than 5.00 to 1.00,

 

44

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(y)                                 theexcess of (A) 25% of Excess Cash Flow over (B) prepayments of Loans underSection 2.11(a) during such fiscal year for any fiscal year (otherthan prepayments funded with the proceeds of incurrences of Indebtedness and inthe case of prepayments of Revolving Loans only so long as the correspondingCommitments are reduced permanently) for which the Leverage Ratio at the end ofsuch fiscal year is less than or equal to 5.00 to 1.00 and greater than 4.00 to1.00 and

 

(z)                                   noneof Excess Cash Flow for any fiscal year for which the Leverage Ratio at the endof such fiscal year is less than or equal to 4.00 to 1.00.

 

Eachprepayment pursuant to this paragraph shall be made within five Business Daysof the date on which financial statements are delivered pursuant to Section 5.01with 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).

 

### (e)                                  Priorto any optional or mandatory prepayment of Borrowings hereunder, the Borrowershall determine in accordance with Section 2.10(d) the Borrowing orBorrowings to be prepaid and shall specify such determination in the notice ofsuch prepayment pursuant to Section 2.11(f).

###  

### (f)                                    TheBorrower shall notify the Administrative Agent (and, in the case of prepaymentof a Swingline Loan, the Swingline Lender) by telephone (confirmed by telecopy)of any prepayment hereunder (i) in the case of prepayment of a EurodollarBorrowing, not later than 12:00 noon, New York City time, three Business Daysbefore the date of prepayment, (ii) in the case of prepayment of an ABRBorrowing, not later than 11:00 a.m., New York City time, on the date ofprepayment or (iii) in the case of prepayment of a Swingline Loan, notlater than 2:00 p.m., New York City time, on the date of prepayment.  Each such notice shall be irrevocable andshall specify the prepayment date, the principal amount of each Borrowing orportion thereof to be prepaid and, in the case of a mandatory prepayment, areasonably detailed calculation of the amount of such prepayment, providedthat if a notice of prepayment states that such notice is conditioned on theeffectiveness of other credit facilities or the consummation of any otherevent, then such notice of prepayment may be revoked by the Borrower (by noticeto the Administrative Agent on or prior to the specified effective date) ifsuch condition is not satisfied. Promptly following receipt of any such notice (other than a noticerelating solely to Swingline Loans), the Administrative Agent shall advise theLenders of the contents thereof.  Eachpartial prepayment of any Borrowing shall be in an amount that would bepermitted in the case of an advance of a Borrowing of the same Type as providedin Section 2.02, except as necessary to apply fully the required amount ofa mandatory prepayment.  Each prepaymentof a Borrowing shall be applied ratably to the Loans included in the prepaidBorrowing.  Prepayments shall beaccompanied by accrued interest to the extent required by Section 2.13 butshall in no event include premium or penalty. All prepayments of Term Loans under this Section 2.11 shall be madepro rata amongst the Tranche A Term Loans and the Tranche B Term Loans outstandingat the time of such prepayment and then with respect to such Term Loans, in accordancewith Section 2.10(d). Notwithstanding the foregoing any Tranche B Lender may elect, by writtennotice to the Administrative Agent at least one Business Day prior to theprepayment date, to decline all or any portion of any prepayment of its TranceB Term Loans, pursuant to this Section 2.11, in which case the aggregateamount of the prepayment that would have been applied to prepay such Tranche BTerm Loans, but was so declined shall be applied to prepay the Tranche A TermLoans then outstanding pro rata amongst all the Tranche A Term Loansoutstanding , in accordance with Section 2.10(d) and, followingrepaying in full of all Tranche A Term Loans, such amount shall be retained byBorrower.

###  

### (g)                                 AllSwap Agreements, if any, between Borrower and any of the Lenders or theirrespective affiliates are independent agreements governed by the writtenprovisions of said Swap 

 

45

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### Agreements, which will remainin full force and effect, unaffected by any repayment, prepayment,acceleration, reduction, increase or change in the terms of the Loans, exceptas otherwise expressly provided in said written Swap Agreements, and any payoffstatement from the Lenders relating to the Loans shall not apply to said SwapAgreements except as otherwise expressly provided in such payoff statement.

###  

## SECTION 2.12.                 Fees.

##  

### (a)                                  TheBorrower agrees to pay to the Administrative Agent for the account of eachLender a commitment fee, which shall accrue at the Applicable Rate on theaverage daily unused amount of the Revolving Commitment of such Lender duringthe period from and including the Effective Date to but excluding the date onwhich the aggregate Revolving Commitments terminate.  Accrued commitment fees shall be payable in arrearsin respect of the Revolving Commitments on the last Business Day of March,June, September and December of each year and on the date on whichthe Revolving Commitments terminate, commencing on the first such date to occurafter the date hereof.  All commitmentfees shall be computed on the basis of a year of 360 days and shall be payablefor the actual number of days elapsed (including the first day but excludingthe last day).  For purposes of computingcommitment fees with respect to Revolving Commitments, a Revolving Commitmentof a Lender shall be deemed to be used to the extent of the outstandingRevolving Loans and LC Exposure of such Lender (and the Swingline Exposure ofsuch Lender shall be disregarded for such purpose).

###  

### (b)                                 TheBorrower agrees to pay (i) to the Administrative Agent for the account ofeach Revolving Lender a participation fee with respect to its participations inLetters of Credit, which shall accrue at the same Applicable Rate used todetermine the interest rate applicable to Eurodollar Revolving Loans on the averagedaily amount of such Lender’s LC Exposure (excluding any portion thereofattributable to unreimbursed LC Disbursements) during the period from andincluding the Effective Date to but excluding the later of the date on whichsuch Lender’s Revolving Commitment terminates and the date on which such Lenderceases to have any LC Exposure, and (ii) to the Issuing Bank a frontingfee, which shall accrue at a rate equal to 0.125% per annum on the averagedaily amount of the LC Exposure (excluding any portion thereof attributable tounreimbursed LC Disbursements) during the period from and including theEffective Date to but excluding the later of the date of termination of theRevolving 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 ofdrawings thereunder.  Participation feesand fronting fees shall be payable on the last Business Day of March, June, September andDecember of each year, commencing on the first such date to occur afterthe Effective Date, provided that all such fees shall be payable on thedate on which the Revolving Commitments terminate and any such fees accruingafter the date on which the Revolving Commitments terminate shall be payable ondemand.  Any other fees payable to theIssuing Bank pursuant to this paragraph shall be payable within 10 days afterdemand.  All participation fees andfronting fees shall be computed on the basis of a year of 360 days and shall bepayable for the actual number of days elapsed (including the first day but excludingthe last day).

###  

### (c)                                  TheBorrower agrees to pay to the Administrative Agent, for its own account, feespayable in the amounts and at the times separately agreed upon between theBorrower and the Administrative Agent.

###  

### (d)                                 Allfees payable hereunder shall be paid on the dates due, in immediately availablefunds, to the Administrative Agent (or to the Issuing Bank, in the case of feespayable to it) for distribution, in the case of commitment fees andparticipation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under anycircumstances.

 

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## SECTION 2.13.                 Interest.

##  

### (a)                                  TheLoans comprising each ABR Borrowing (including each Swingline Loan) shall bearinterest at the Alternate Base Rate plus the Applicable Rate.

###  

### (b)                                 TheLoans comprising each Eurodollar Borrowing shall bear interest at the LIBO Ratefor the Interest Period in effect for such Borrowing plus the ApplicableRate.

###  

### (c)                                  Notwithstandingthe foregoing, if any principal of or interest on any Loan or any fee or otheramount payable by the Borrower hereunder is not paid when due, whether atstated maturity, upon acceleration or otherwise, such overdue amount shall bearinterest, after as well as before judgment, at a rate per annum equal to (i) inthe case of overdue principal of any Loan, 2% plus the rate otherwiseapplicable to such Loan as provided in the preceding paragraphs of this Section 2.13or (ii) in the case of any other amount, 2% plus the rateapplicable to ABR Revolving Loans as provided in Section 2.13(a).

###  

### (d)                                 Accruedinterest on each Loan shall be payable in arrears on each Interest Payment Datefor such Loan and, in the case of Revolving Loans, upon termination of theRevolving Commitments, provided that (i) interest accrued pursuantto Section 2.13(c) shall be payable on demand, (ii) in the eventof any repayment or prepayment of any Loan (other than a prepayment of an ABRRevolving Loan prior to the end of the Revolving Availability Period), accruedinterest on the principal amount repaid or prepaid shall be payable on the dateof such repayment or prepayment and (iii) in the event of any conversionof any Eurodollar Loan prior to the end of the current Interest Periodtherefor, accrued interest on such Loan shall be payable on the effective dateof such conversion.

###  

### (e)                                  Allinterest hereunder shall be computed on the basis of a year of 360 days, exceptthat interest computed by reference to the Alternate Base Rate at times whenthe Alternate Base Rate is based on the Prime Rate shall be computed on the basisof a year of 365 days (or 366 days in a leap year), and in each case shall bepayable for the actual number of days elapsed (including the first day butexcluding the last day).  The applicableAlternate Base Rate or LIBO Rate shall be determined by the AdministrativeAgent, and such determination shall be conclusive absent manifest error.

###  

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

##  

(a)                                  theAdministrative Agent determines (which determination shall be conclusive absentmanifest error) that adequate and reasonable means do not exist forascertaining the LIBO Rate for such Interest Period; or

 

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

 

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

 

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## SECTION 2.15.                 Increased Costs.

##  

### (a)                                  Ifany Change in Law shall:

###  

#### (i)                                     impose,modify or deem applicable any reserve, special deposit or similar requirementagainst assets of, deposits with or for the account of, or credit extended by,any Lender (except any such reserve requirement reflected in the LIBO Rate) orthe Issuing Bank; or

####  

#### (ii)                                  imposeon any Lender or the Issuing Bank or the London interbank market any othercondition (other than attributable to Taxes or Other Taxes) affecting thisAgreement or Eurodollar Loans made by such Lender or any Letter of Credit orparticipation therein;

####  

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

 

### (b)                                 Ifany Lender or the Issuing Bank determines that any Change in Law regardingcapital requirements has or would have the effect of reducing the rate ofreturn on such Lender’s or the Issuing Bank’s capital or on the capital of suchLender’s or the Issuing Bank’s holding company, if any, as a consequence ofthis Agreement or the Loans made by, or participations in Letters of Creditheld by, such Lender, or the Letters of Credit issued by the Issuing Bank, to alevel below that which such Lender or the Issuing Bank or such Lender’s or theIssuing 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 thepolicies of such Lender’s or the Issuing Bank’s holding company with respect tocapital adequacy), then from time to time the Borrower will pay to such Lenderor the Issuing Bank, as applicable, such additional amount or amounts as willcompensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’sholding company for any such reduction suffered.

###  

### (c)                                  TheBorrower shall pay to each Lender, (i) as long as such Lender shall be requiredto maintain reserves with respect to liabilities or assets consisting of orincluding Eurodollar funds or deposits, additional interest on the unpaidprincipal amount of each Eurodollar Loan equal to the actual costs of suchreserves allocated to such Loan by such Lender (as determined by such Lender ingood faith, which determination shall be conclusive in the absence of manifesterror), and (ii) as long as such Lender shall be required to comply withany reserve ratio requirement or analogous requirement of any other centralbanking or financial regulatory authority imposed in respect of the maintenanceof the Commitments or the funding of the Eurodollar Loans, such additionalcosts (expressed as a percentage per annum and rounded upwards, if necessary,to the nearest five decimal places) equal to the actual costs allocated to suchCommitment or Loan by such Lender (as determined by such Lender in good faith,which determination shall be conclusive absent manifest error) which in eachcase shall be due and payable on each date on which interest is payable on suchLoan, provided the Borrower shall have received at least fifteen (15)days’ prior notice (with a copy to the Administrative Agent, and which noticeshall specify the Statutory Reserve Rate, if any, applicable to such Lender) ofsuch additional interest or cost from such Lender.  If a Lender fails to give notice fifteen (15)days prior to the relevant Interest Payment Date, such additional interest orcost shall be due and payable fifteen (15) days from receipt of such notice.

 

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### (d)                                 Acertificate of a Lender or the Issuing Bank setting forth the amount or amountsnecessary to compensate such Lender or the Issuing Bank or its holding company,as applicable, as specified in Section 2.15(a), (b) or (c) shallbe delivered to the Borrower and shall be conclusive absent manifesterror.  The Borrower shall pay suchLender or the Issuing Bank, as applicable, the amount shown as due on any suchcertificate within 10 days after receipt thereof.

###  

### (e)                                  Failureor delay on the part of any Lender or the Issuing Bank to demand compensationpursuant to this Section 2.15 shall not constitute a waiver of such Lender’sor the Issuing Bank’s right to demand such compensation, provided thatthe Borrower shall not be required to compensate a Lender or the Issuing Bankpursuant to this Section 2.15 for any increased costs or reductions incurredmore 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 costsor reductions and of such Lender’s or the Issuing Bank’s intention to claimcompensation therefor, provided, further, that, if the Change inLaw giving rise to such increased costs or reductions is retroactive, then the270-day period referred to above shall be extended to include the period ofretroactive effect thereof.

###  

## SECTION 2.16.                 Break Funding Payments.  In the event of (a) the payment of anyprincipal of any Eurodollar Loan other than on the last day of an InterestPeriod applicable thereto (including as a result of an Event of Default), (b) theconversion of any Eurodollar Loan other than on the last day of the Interest Periodapplicable thereto, (c) the failure to borrow, convert, continue or prepayany Revolving Loan or Term Loan on the date specified in any notice deliveredpursuant hereto (regardless of whether such notice may be revoked under Section 2.11(f) andis revoked in accordance therewith), or (d) the assignment of anyEurodollar Loan other than on the last day of the Interest Period applicablethereto 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 theloss, 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 determinedby such Lender to be the excess, if any, of (i) the amount of interestthat would have accrued on the principal amount of such Loan had such event notoccurred, at the LIBO Rate that would have been applicable to such Loan, forthe period from the date of such event to the last day of the then currentInterest Period therefor (or, in the case of a failure to borrow, convert orcontinue, for the period that would have been the Interest Period for suchLoan), over (ii) the amount of interest that would accrue on such principalamount for such period at the interest rate that such Lender would bid were itto bid, at the commencement of such period, for dollar deposits of a comparableamount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth anyamount or amounts that such Lender is entitled to receive pursuant to this Section 2.16shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amountshown as due on any such certificate within 10 days after receipt thereof.  Notwithstanding the foregoing, no additionalamounts shall be due and payable pursuant to this Section 2.16 to theextent that on the relevant due date the Borrower deposits in a PrepaymentAccount an amount equal to any payment of Eurodollar Loans otherwise requiredto be made on a date that is not the last day of the applicable InterestPeriod; provided that on the last day of the applicable Interest Period,the Administrative Agent shall be authorized, without any further action by ornotice to or from the Borrower or any other Loan Party, to apply such amount tothe prepayment of such Eurodollar Loans. For purposes of this Agreement, the term “Prepayment Account” shall meana non-interest bearing account established by the Borrower with theAdministrative Agent and over which the Administrative Agent shall haveexclusive dominion and control, including the right of withdrawal forapplication in accordance with this Section 2.16.  Anything to the contrary contained hereinnotwithstanding, no Lender nor any Participant is required to match fund anyObligation and the provisions of this Section 2.16 shall apply as if matchfunding had occurred by acquiring Eurodollar deposits for each Interest Periodin the amount of the applicable Eurodollar Loans.

 

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## SECTION 2.17.                 Taxes.

##  

### (a)                                  Anyand all payments by or on account of any obligation of any Loan Party hereunderor under any other Loan Document shall be made free and clear of and withoutdeduction for any Indemnified Taxes or Other Taxes, provided that if anyLoan Party shall be required to deduct any Indemnified Taxes or Other Taxes fromsuch payments, then (i) the sum payable shall be increased as necessary sothat after making all required deductions (including deductions applicable toadditional sums payable under this Section 2.17) the Administrative Agent,Lender or Issuing Bank (as applicable) receives an amount equal to the amountit would have received had no such deductions been made, (ii) such LoanParty shall make such deductions and (iii) such Loan Party shall pay thefull amount deducted to the relevant Governmental Authority in accordance withapplicable law.

###  

### (b)                                 Inaddition, the applicable Loan Party shall pay any Other Taxes to the relevantGovernmental Authority in accordance with applicable law.

###  

### (c)                                  Theapplicable Loan Party shall indemnify the Administrative Agent, each Lender andthe Issuing Bank, within 10 Business Days after written demand therefor, forthe full amount of any Indemnified Taxes or Other Taxes paid by theAdministrative Agent, such Lender or the Issuing Bank, as applicable, on orwith respect to any payment by or on account of any obligation of the Borrowerhereunder or under any other Loan Document (including Indemnified Taxes orOther Taxes imposed or asserted on or attributable to amounts payable underthis Section 2.17) and any reasonable expenses arising therefrom or withrespect thereto, whether or not such Indemnified Taxes or Other Taxes werecorrectly or legally imposed or asserted by the relevant GovernmentalAuthority.  A certificate setting forthin reasonable detail the amount of such payment or liability delivered to theBorrower by a Lender or the Issuing Bank, or by the Administrative Agent on itsown behalf or on behalf of a Lender or the Issuing Bank, shall be conclusiveabsent manifest error.

###  

### (d)                                 Assoon as practicable after any payment of Indemnified Taxes or Other Taxes byany Loan Party to a Governmental Authority, such Loan Party shall deliver tothe Administrative Agent the original or a certified copy of a receipt issuedby such Governmental Authority evidencing such payment, if any, a copy of thereturn reporting such payment or other evidence of such payment reasonablysatisfactory to the Administrative Agent.

###  

### (e)                                  AnyForeign Lender that is entitled to an exemption from or reduction of withholdingtax under the law of the United States, or any treaty to which the UnitedStates is a party, with respect to payments under this Agreement shall deliverto the Borrower (with a copy to the Administrative Agent), on or prior to theEffective 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 caseof each other Lender and from time to time thereafter as reasonably requestedby either of the Borrower or the Administrative Agent, such properly completed,original and executed documentation prescribed by applicable law or reasonablyrequested by the Borrower as will permit such payments to be made withoutwithholding or at a reduced rate.  EachLender that is a U.S. Person within the meaning of Section 7701(a)(30) ofthe Code on or prior to the date of its execution and delivery of thisAgreement, on or prior to the date on which it becomes a Lender, in the case ofan assignee, and from time to time thereafter if requested in writing by theBorrower or the Administrative Agent, shall provide the Borrower and theAdministrative Agent with duplicate executed originals of Internal RevenueService Form W-9, or any successor form, certifying that such Lender isentitled to exemption from United States backup withholding tax.

###  

### (f)                                    Ifthe Administrative Agent or a Lender determines, in its reasonable discretion,that it has received a refund of any Taxes or Other Taxes as to which it hasbeen indemnified by the 

 

50

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### Borrower or with respect towhich 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 ofindemnity payments made, or additional amounts paid, by the Borrower under thisSection 2.17 with respect to the Taxes or Other Taxes giving rise to suchrefund), net of all out-of-pocket expenses of the Administrative Agent or suchLender and without interest (other than any interest paid by the relevant GovernmentalAuthority with respect to such refund), provided that the Borrower, uponthe request of the Administrative Agent or such Lender, agrees to repay theamount paid over to the Borrower (plus any penalties, interest or othercharges imposed by the relevant Governmental Authority) to the AdministrativeAgent or such Lender in the event the Administrative Agent or such Lender isrequired to repay such refund to such Governmental Authority.  This Section 2.17 shall not be construedto require the Administrative Agent or any Lender to make available its Taxreturns (or any other information relating to its Taxes that it deems confidential)to the Borrower or any other Person.  Notwithstandinganything contained herein to the contrary, in no event will the AdministrativeAgent or any Lender be required to pay any amount to the Borrower the paymentof which would place such Administrative Agent or Lender in a less favorablenet after-tax position than such Lender would have been in if the additionalamounts giving rise to such refund of any Indemnified Taxes or Other Taxes hadnever been paid.

###  

### (g)                                 Tothe extent required by any applicable law, the Administrative Agent maywithhold from any payment to any Lender an amount equivalent to any applicablewithholding tax.  If the Internal RevenueService or any authority of the U.S. or other jurisdiction asserts a claim thatthe Administrative Agent did not properly withhold tax from amounts paid to orfor the account of any Lender (because the appropriate form was not deliveredor properly executed, or because such Lender failed to notify theAdministrative Agent of a change in circumstances that rendered the exemptionfrom, or reduction of, withholding tax ineffective, or for any other reason),such Lender shall indemnify the Administrative Agent (to the extent that theAdministrative Agent has not already been reimbursed by the Loan Parties andwithout limiting the obligation of the Loan Parties to do so) fully for allamounts paid, directly or indirectly, by the Administrative Agent as Tax orotherwise, including penalties and interest, together with all expenses incurred.

###  

## SECTION 2.18.                 Payments Generally; Pro RataTreatment; Sharing of Setoffs.

##  

### (a)                                  TheBorrower shall make each payment required to be made by it hereunder or underany other Loan Document (whether of principal, interest, fees or reimbursementof LC Disbursements, or of amounts payable under Section 2.15, 2.16 or2.17, or otherwise) prior to the time expressly required hereunder or undersuch other Loan Document for such payment (or, if no such time is expresslyrequired, prior to 3:00 p.m., New York City time), on the date when due,in immediately available funds, without setoff or counterclaim.  Any amounts received after such time on anydate may, in the discretion of the Administrative Agent, be deemed to have beenreceived on the next succeeding Business Day for purposes of calculatinginterest thereon.  All such paymentsshall be made to the Administrative Agent at its offices at 4 World FinancialCenter, 250 Vesey Street New York, NY 10080, except payments to be made directly to the Issuing Bank orSwingline Lender as expressly provided herein and except that payments pursuantto Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Personsentitled thereto and payments pursuant to other Loan Documents shall be made tothe Persons specified therein.  TheAdministrative Agent shall distribute any such payments received by it for theaccount of any other Person to the appropriate recipient promptly followingreceipt thereof.  If any payment underany Loan Document shall be due on a day that is not a Business Day, the datefor payment shall be extended to the next succeeding Business Day, and, in thecase of any payment accruing interest, interest thereon shall be payable forthe period of such extension.  Allpayments under each Loan Document shall be made in dollars.

 

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### (b)                                 Ifat any time insufficient funds are received by and available to the AdministrativeAgent 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 theparties entitled thereto in accordance with the amounts of interest and feesthen due to such parties, and (ii) second, towards payment of principaland unreimbursed LC Disbursements then due hereunder, ratably among the partiesentitled thereto in accordance with the amounts of principal and unreimbursedLC Disbursements then due to such parties.

###  

### (c)                                  Ifany Lender shall, by exercising any right of setoff or counterclaim or otherwise,obtain payment in respect of any principal of or interest on any of itsRevolving Loans, Tranche A Term Loans, Tranche B Term Loans or participationsin LC Disbursements or Swingline Loans resulting in such Lender receivingpayment of a greater proportion of the aggregate amount of its Revolving Loans,Tranche A Term Loans, Tranche B Term Loans and participations in LC Disbursementsand Swingline Loans and accrued interest thereon than the proportion receivedby any other Lender, then the Lender receiving such greater proportion shallpurchase (for cash at face value) participations in the Revolving Loans,Tranche A Term Loans, Tranche B Term Loans and participations in LCDisbursements and Swingline Loans of other Lenders to the extent necessary sothat the benefit of all such payments shall be shared by the Lenders ratably inaccordance with the aggregate amount of principal of and accrued interest ontheir respective Revolving Loans, Tranche A Term Loans, Tranche B Term Loansand participations in LC Disbursements and Swingline Loans, providedthat (i) if any such participations are purchased and all or any portionof the payment giving rise thereto is recovered, such participations shall be rescindedand the purchase price restored to the extent of such recovery, withoutinterest, and (ii) the provisions of this paragraph shall not be construedto apply to any payment made by the Borrower pursuant to and in accordance withthe express terms of this Agreement or any payment obtained by a Lender as considerationfor the assignment of or sale of a participation in any of its Loans orparticipations in LC Disbursements to any assignee or participant, other thanto the Borrower or any Subsidiary or Affiliate thereof (as to which the provisionsof this paragraph shall apply).  TheBorrower consents to the foregoing and agrees, to the extent it may effectivelydo so under applicable law, that any Lender acquiring a participation pursuantto the foregoing arrangements may exercise against the Borrower rights ofsetoff and counterclaim with respect to such participation as fully as if suchLender were a direct creditor of the Borrower in the amount of such participation.

###  

### (d)                                 Unlessthe Administrative Agent shall have received notice from the Borrower prior tothe date on which any payment is due to the Administrative Agent for theaccount of the Lenders or the Issuing Bank hereunder that the Borrower will notmake such payment, the Administrative Agent may assume that the Borrower hasmade such payment on such date in accordance herewith and may, in reliance uponsuch assumption and in its sole discretion, distribute to the Lenders or theIssuing Bank, as applicable, the amount due. In such event, if the Borrower has not in fact made such payment, theneach of the Lenders or the Issuing Bank, as applicable, severally agrees torepay to the Administrative Agent forthwith on demand the amount so distributedto such Lender or Issuing Bank with interest thereon, for each day from andincluding the date such amount is distributed to it to but excluding the dateof payment to the Administrative Agent, at the greater of the Federal Funds EffectiveRate and a rate determined by the Administrative Agent in accordance withbanking industry rules on interbank compensation.

###  

### (e)                                  Ifany Lender shall fail to make any payment required to be made by it pursuant toSection 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 anycontrary provision hereof), apply any amounts thereafter received by theAdministrative Agent for the account of such Lender to satisfy such Lender’sobligations under such Sections until all such unsatisfied obligations arefully paid.

 

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## SECTION 2.19.                 Mitigation Obligations; Replacementof Lenders.

##  

### (a)                                  Ifany Lender requests compensation under Section 2.15, or if the Borrower isrequired to pay any additional amount to any Lender or any GovernmentalAuthority for the account of any Lender pursuant to Section 2.17, thensuch Lender shall use reasonable efforts to designate a different lending officefor funding or booking its Loans hereunder or to assign its rights and obligationshereunder to another of its offices, branches or affiliates, if, in thejudgment of such Lender, such designation or assignment (i) wouldeliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, asapplicable, in the future and (ii) would not subject such Lender to anyunreimbursed cost or expense and would not otherwise be disadvantageous to suchLender.  The Borrower hereby agrees topay all reasonable costs and expenses incurred by any Lender in connection withany such designation or assignment.

###  

### (b)                                 Ifany Lender requests compensation under Section 2.15, or if the Borrower isrequired to pay any additional amount to any Lender or any Governmental Authorityfor the account of any Lender pursuant to Section 2.17, or if any Lenderdefaults in its obligation to fund Loans hereunder, then the Borrower may, atits sole expense and effort, upon notice to such Lender and the AdministrativeAgent, require such Lender to assign and delegate, without recourse (inaccordance with and subject to the restrictions contained in Section 9.04),all its interests, rights and obligations under this Agreement to an assigneethat shall assume such obligations (which assignee may be another Lender, if aLender accepts such assignment), provided that (i) the Borrowershall have received the prior written consent of the Administrative Agent (andif a Revolving Commitment is being assigned, the Issuing Bank and the SwinglineLender), which consent shall not unreasonably be withheld, (ii) suchLender shall have received payment of an amount equal to the outstandingprincipal of its Loans and participations in LC Disbursements and SwinglineLoans, accrued interest thereon, accrued fees and all other amounts payable toit hereunder, from the assignee (to the extent of such outstanding principaland accrued interest and fees) or the Borrower (in the case of all otheramounts) and (iii) in the case of any such assignment resulting from a claimfor compensation under Section 2.15 or payments required to be madepursuant to Section 2.17, such assignment will result in a material reductionin such compensation or payments.  ALender 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, thecircumstances entitling the Borrower to require such assignment and delegationcease to apply.

###  

## SECTION 2.20.                 Incremental Extensions of Credit.  At any time during the Revolving AvailabilityPeriod, subject to the terms and conditions set forth herein, the Borrower mayat any time and from time to time, by notice to the Administrative Agent(whereupon the Administrative Agent shall promptly deliver a copy to each ofthe Lenders), request to add additional term loans or additional revolvingcommitments (together, the “Incremental Extensions of Credit”) inminimum principal amounts of $5,000,000; provided that such amount maybe less than $5,000,000 if such amount represents all the remainingavailability under the aggregate principal amount set forth below; provided,further, that (x) immediately prior to and after giving effect toany Incremental Facility Amendment (as defined below), no Event of Default hasoccurred or is continuing or shall result therefrom, (y) the SeniorSecured Leverage Ratio on a Pro Forma Basis as of the last day of the mostrecent period in respect of which financial statements shall have been requiredto be delivered pursuant to Section 5.01(a) or (b) (or if priorto the first time such financial statements are so required to be delivered, asof the last day of the most recent period in respect of which financialstatements of the Borrower and its Restricted Subsidiaries are available) shallnot exceed a ratio that is 0.25 less than the ratio specified in Section 6.12for such last day (it being understood that if such last day is prior to March 31,2008, then the ratio specified for March 31, 2008 under Section 6.12shall be deemed to be the ratio specified in Section 6.12 for such lastday) and (z) the Borrower shall have delivered to the Administrative Agentan officer’s certificate to the effect set forth in clauses (x) and (y) above.  The Incremental Extensions of Credit:

 

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### (a)                                  shallbe in an aggregate principal amount not exceeding $50,000,000 since theEffective Date, and

###  

### (b)                                 shallrank paripassu in right of payment and right of security withthe Revolving Loans and Term Loans in respect of the Collateral;

###  

provided that (i) the IncrementalExtensions of Credit in the form of term loans shall not have a final maturitydate earlier than the Tranche B Maturity Date, (ii) the IncrementalExtensions of Credit in the form of revolving loans shall not have a finalmaturity date earlier than the Revolving Maturity Date, (iii) theIncremental Extensions of Credit in the form of term loans shall not have aweighted average life that is shorter than that of the then-remaining weightedaverage life of the existing Tranche B Term Loans (without giving effect to anyreductions of such weighted average life caused by voluntary or mandatoryprepayments of Tranche B Term Loans pursuant to Section 2.11) and (iv) theIncremental Extensions of Credit shall be, in the case of revolving loanextensions, on the terms and pursuant to the documentation applicable to theRevolving Loans.  The Borrower shall bywritten notice offer each Lender (an “ExistingLender”) theopportunity for no less than ten (10) Business Days after delivery of thenotice to commit to provide its prorata portion (based on theamount of its outstanding Tranche A Term Loans, Tranche B Term Loans or outstandingRevolving Loans and unused Revolving Commitments, as applicable, on the date ofsuch notice) of any requested Incremental Extension of Credit, providedthat no Existing Lender shall be obligated to provide any Incremental Extensionof Credit unless it so agrees.  Anyadditional bank, financial institution, Existing Lender or other Person thatelects to extend Incremental Extensions of Credit shall be reasonablysatisfactory to the Borrower and the Administrative Agent and, in the case ofIncremental Extensions of Credit in the form of revolving loans, the IssuingBank (any such bank, financial institution, Existing Lender or other Personbeing called an “Additional Lender”) and shall become a Lender underthis Agreement pursuant to an amendment (an “Incremental Facility Amendment”)to this Agreement giving effect to the modifications permitted by this Section 2.20and, as appropriate, the other Loan Documents and executed by the Borrower,each Additional Lender and the Administrative Agent.  Commitments in respect of IncrementalExtensions of Credit shall be Commitments under this Agreement.  An Incremental Facility Amendment may,without the consent of any other Lenders, effect such amendments to thisAgreement and the other Loan Documents as may be necessary or appropriate, inthe opinion of the Administrative Agent, to effect the provisions of this Section 2.20(including voting provisions applicable to the Additional Lenders comparable tothe provisions of clause (B) of the second proviso of Section 9.02(b)).  The effectiveness of any Incremental FacilityAmendment shall be subject to the satisfaction on the date thereof (each, an “IncrementalFacility 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” insuch Section 4.02 shall be deemed to refer to the Incremental FacilityClosing Date).  The proceeds of the IncrementalExtensions of Credit shall be used for working capital and general corporatepurposes (including Permitted Acquisitions).

 

# ARTICLE III

#  

# Representationsand Warranties

#  

The Borrowerand Holdings represent and warrant to the Lenders (it being understood andagreed that the representations and warranties made on or prior to theEffective Date are deemed made concurrently with, and after giving effect to,the consummation of the Transactions on the Effective Date) that:

 

## SECTION 3.01.                 Organization; Power.  Each Loan Party (a) is duly organized,validly existing and in good standing under the laws of the jurisdiction of itsorganization, (b) except where the 

 

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## failure to do so, individuallyor in the aggregate, is not reasonably likely to result in a Material AdverseEffect, (i) has the power and authority and all governmental rights,qualifications, approvals, authorizations, permits, accreditations, ReimbursementApprovals, licenses and franchises material to the business of the Borrower andthe Subsidiaries taken as a whole that are necessary to own its assets, tocarry on its business as now conducted and as proposed to be conducted and toexecute, deliver and perform its obligations under each Loan Document to whichit is a party and (ii) is qualified to do business in, and is in goodstanding in, every jurisdiction where such qualification is required.

##  

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

 

## SECTION 3.03.                 Governmental Approvals; NoConflicts.  Except as set forth in Schedule3.03 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 andexcept those that are required or permitted to be obtained followingconsummation of the Transactions, the absence of which individually or in theaggregate are not reasonably likely to result in a Material Adverse Effect andfilings necessary to perfect Liens created under the Loan Documents, (b) willnot violate any Requirement of Law applicable to Holdings, the Borrower or anyof the Subsidiaries, as applicable, except as is not reasonably likely toresult in, individually or in the aggregate, a Material Adverse Effect, (c) willnot violate or result in a default under any indenture or other materialagreement or instrument binding upon Holdings, the Borrower or any of theSubsidiaries or its assets, except as is not reasonably likely to result in,individually or in the aggregate, a Material Adverse Effect, (d) will notresult in a Limitation on any right, qualification, approval, permit,accreditation, authorization, Reimbursement Approval, license or franchise orauthorization granted by any Governmental Authority, Third Party Payor or otherPerson applicable to the business, operations or assets of the Borrower or anyof the Subsidiaries or adversely affect the ability of the Borrower or any ofthe Subsidiaries to participate in any Third Party Payor Arrangement except forLimitations, individually or in the aggregate, as are not reasonably likely toresult in a Material Adverse Effect, and (e) will not result in thecreation or imposition of any Lien on any asset of Holdings, the Borrower orany of the Subsidiaries, except Liens created under the Loan Documents.  There is no pending or, to the knowledge ofthe Borrower, threatened Limitation by any Governmental Authority, Third PartyPayor or any other Person of any right, qualification, approval, permit,authorization, accreditation, Reimbursement Approval, license or franchise ofthe Borrower, or any Subsidiary, except for such Limitations, individually orin the aggregate, as are not reasonably likely to result in a Material AdverseEffect.  No certifications by anyGovernmental Authority or any Third Party Payor are required for operation ofthe business of the Borrower and the Subsidiaries that are not in place, exceptfor such certifications or agreements, the absence of which do not materiallyand adversely affect the operation of the business.

##  

## SECTION 3.04.                 Financial Condition; No MaterialAdverse Change.

##  

### (a)                                  TheBorrower has heretofore furnished to the Lenders its consolidated balance sheetand consolidated statements of operations and comprehensive income,stockholders’ equity and cash flows as of and for the fiscal years ended December 31,2004, December 31, 2005, and 

 

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### December 31, 2006,reported on by Ernst & Young LLP, independent public accountants.  Such financial statements present fairly, inall material respects, the financial position and results of operations andcash flows of the Borrower and its subsidiaries as of such dates and for suchperiods in accordance with GAAP consistently applied.

###  

### (b)                                 TheBorrower has heretofore furnished to the Lenders its pro forma consolidatedbalance sheet as of June 30, 2007 prepared giving effect to theTransactions as if the Transactions had occurred on such date.  Such pro forma consolidated balance sheet (i) hasbeen prepared in good faith based on assumptions (which are believed by theBorrower to be reasonable), (ii) accurately reflects all adjustmentsnecessary to give effect to the Transactions and (iii) presents fairly, inall material respects, the pro forma financial position of the Borrower and itssubsidiaries as of June 30, 2007 as if the Transactions had occurred onsuch date.

###  

### (c)                                  Noevent, change, condition or state of facts has occurred that has resulted in,or is reasonably likely to result in, individually or in the aggregate, aMaterial Adverse Effect since December 31, 2006.

###  

## SECTION 3.05.                 Properties.

##  

### (a)                                  Eachof Holdings, the Borrower and the Subsidiaries has good title to, or validleasehold interests in, all its real property material to its business, exceptfor such defects in title as could not, individually or in the aggregate,reasonably be expected to have a Material Adverse Effect, free and clear of allLiens, except for Liens expressly permitted pursuant to Section 6.02.

###  

### (b)                                 Schedule3.05 sets forth the address of each real property owned by any of the LoanParties as of the Effective Date after giving effect to the Transactions.

###  

## SECTION 3.06.                 Litigation.  Except as set forth on Schedule 3.06,there are no actions, suits or proceedings by or before any arbitrator orGovernmental Authority pending against or, to the knowledge of Holdings and theBorrower, threatened against or affecting Holdings, the Borrower or anySubsidiary that would reasonably be likely to, individually or in theaggregate, (i) result in a Material Adverse Effect or (ii) adverselyaffect in any material respect the ability of the Loan Parties to consummatethe Transactions or the other transactions contemplated hereby.

##  

## SECTION 3.07.                 Compliance with Laws.  Except as is not reasonably likely to resultin, individually or in the aggregate, a Material Adverse Effect, each ofHoldings, the Borrower and the Subsidiaries is in compliance with all Requirementsof Law applicable to it or its property.

##  

## SECTION 3.08.                 Investment Company Status.  No Loan Party is required to be registered asan “investment company” as defined in the Investment Company Act of 1940, asamended.

##  

## SECTION 3.09.                 Taxes.  Each of Holdings, the Borrower and theSubsidiaries has timely filed or caused to be filed all Federal income andother material income Tax returns and reports required to have been filed andhas paid or caused to be paid all Taxes shown to be due and payable on suchreturns or on any assessments made by it, including in their capacity aswithholding agent, except any Taxes that are being contested in good faith byappropriate proceedings for which Holdings, the Borrower or such Subsidiary, asapplicable, has set aside on its books adequate reserves in accordance withGAAP or to the extent that the failure to pay such Taxes so is not reasonablylikely, individually or in the aggregate, to result in a Material AdverseEffect.  Each of Holdings, the Borrowerand the Subsidiaries has made adequate provision in accordance with GAAP forall Taxes not yet due and payable.  Noneof 

 

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##  

## Holdings, theBorrower and the Subsidiaries is aware of any proposed or pending Taxassessment, deficiency or audit that would reasonably be expected to,individually or in the aggregate, result in a Material Adverse Effect.

##  

## SECTION 3.10.            ERISA.  No ERISA Event has occurred, or is reasonablyexpected to occur that, when taken together with all other such ERISA Eventsfor which liability is reasonably expected to occur, is reasonably likely,individually or in the aggregate, to result in a Material Adverse Effect.  Except as would not be reasonably likely,individually or in the aggregate, to result in a Material Adverse Effect, thepresent value of all accumulated benefit obligations under each Plan (based onthe assumptions used for purposes of Statement of Financial AccountingStandards No. 87) did not, as of the date of the most recent financialstatements reflecting such amounts, exceed the fair value of the assets of suchPlan.  Except as would not be reasonablylikely to result in, individually or in the aggregate, a Material AdverseEffect, each employee benefit plan maintained or contributed to by the Borroweror any Subsidiary and each Plan is in compliance with the applicable provisionsof ERISA and the Code.  Using actuarialassumptions and computation methods consistent with subpart 1 of subtitle E ofTitle IV of ERISA, the aggregate liabilities of each ERISA Affiliate to allMultiemployer Plans in the event of a complete withdrawal therefrom, as of theclose of the most recent fiscal year of each such Multiemployer Plan, are notreasonably likely, individually or in the aggregate, to result in a MaterialAdverse Effect.

##  

## SECTION 3.11.            Disclosure.  Neither the Information Memorandum nor any ofthe other reports, financial statements, certificates or other informationfurnished by or on behalf of any Loan Party to the Administrative Agent or anyLender in connection with the negotiation of this Agreement or any other LoanDocument or delivered hereunder or thereunder (as modified or supplemented by otherinformation so furnished and taken as a whole) contains any material misstatementof fact or omits to state any material fact necessary to make the statementstherein, in light of the circumstances under which they were made, notmisleading, provided that the foregoing shall not apply to any projectedfinancial information, and with respect to such projected financialinformation, Holdings and the Borrower represent only that such information wasprepared in good faith based upon assumptions believed by them to be reasonableat the time delivered and as of the Effective Date.

##  

## SECTION 3.12.            Subsidiaries.  After giving effect to the Merger, as of theEffective Date, Holdings does not have any subsidiaries other than the Borrowerand the Subsidiaries 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 SubsidiaryLoan Party, in each case as of the Effective Date.

 

## SECTION 3.13.            [Reserved].

##  

## SECTION 3.14.            LaborMatters.  As of the Effective Date,there are no strikes, lockouts or slowdowns against Holdings, the Borrower orany Subsidiary pending or, to the knowledge of Holdings and the Borrower,threatened, that would reasonably be expected to, individually or in theaggregate, result in a Material Adverse Effect.

##  

## SECTION 3.15.            Solvency.  Immediately after the consummation of theTransactions to occur on the Effective Date, (a) the fair value of theassets of the Loan Parties, taken as a whole, at a fair valuation, will exceedtheir debts and liabilities, subordinated, contingent or otherwise, (b) thepresent fair saleable value of the property of the Loan Parties, taken as awhole, will be greater than the amount that will be required to pay theprobable liability of their debts and other liabilities, subordinated, contingentor otherwise, as 

 

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## such debts andother liabilities become absolute and matured, (c) the Loan Parties, takenas a whole, will be able to pay their debts and liabilities, subordinated,contingent or otherwise, as such debts and liabilities become absolute andmatured, and (d) the Loan Parties, taken as a whole, will not have unreasonablysmall capital with which to conduct the business in which they are engaged assuch business is now conducted and is proposed to be conducted following theEffective Date, in each case after giving effect to any rights of indemnification,contribution or subrogation arising among the Subsidiary Loan Parties pursuantto the Collateral Agreement or by law.

##  

## SECTION 3.16.            [Reserved].

##  

## SECTION 3.17.            Reimbursementfrom Third Party Payors.  Theaccounts receivable of Holdings, the Borrower and the Subsidiaries have beenand will continue to be adjusted in all material respects to reflect thereimbursement policies required by all applicable Requirements of Law and otherThird Party Payor Arrangements to which Holdings, the Borrower or suchSubsidiary is subject, and do not exceed in any material respect amounts theBorrower or such Subsidiary is entitled to receive under any capitationarrangement, fee schedule, discount formula, cost-based reimbursement or otheradjustment or limitation to usual charges.

##  

## SECTION 3.18.            Fraudand Abuse; Licenses.  To theknowledge of the Borrower and Holdings, none of Holdings, the Borrower or anySubsidiary, nor any of their respective partners, members, stockholders,officers or directors, acting on behalf of Holdings, the Borrower or anySubsidiary, have engaged on behalf of Holdings, the Borrower or any Subsidiaryin 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 etseq., 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 statementor misrepresentation of a material fact in any application for any benefit orpayment, (b) knowingly and willfully making or causing to be made anyfalse statement or misrepresentation of a material fact for use in determiningrights to any benefit or payment, (c) failing to disclose knowledge by aclaimant of the occurrence of any event affecting the initial or continuedright to any benefit or payment on its own behalf or on behalf of another, withintent to secure such benefit or payment fraudulently, (d) knowingly andwillfully soliciting or receiving any remuneration (including any kickback,bribe or rebate), directly or indirectly, overtly or covertly, in cash or inkind, or offering to pay or receive such remuneration (i) in return forreferring an individual to a Person for the furnishing or arranging for thefurnishing of any item or service for which payment may be made, in whole or inpart, pursuant to any Third Party Payor Arrangement to which the foregoing rules andregulations apply or (ii) in return for purchasing, leasing or ordering orarranging 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 Arrangement to which the foregoing rules andregulations apply and (e) making any prohibited referral for designatedhealth services, or presenting or causing to be presented a claim or bill toany individual, Third Party Payor or other entity for designated healthservices furnished pursuant to a prohibited referral.  Neither Holdings, the Borrower nor any Subsidiaryshall be considered to be in breach of this Section 3.18 so long as (a) itshall have taken such actions (including implementation of appropriate internalcontrols) as may be reasonably necessary to prevent such prohibited actions and(b) such prohibited actions as have occurred, individually or in theaggregate, are not reasonably likely result in a Material Adverse Effect.

##  

The facilitiesoperated by the Borrower and its Subsidiaries are qualified for participationin the Government Programs in which they participate, and comply in allmaterial respects with the conditions of participation in all GovernmentPrograms in which they participate or have participated, except for the factthat facilities newly developed by any such Person may from time to time beawaiting an initial Medicare certification and/or initial Medicare or Medicaidprovider number in accordance with customary processing and certificationtimeframes of such Government Programs. There is no pending or, to 

 

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the Borrower’sand Holdings’ knowledge, threatened proceeding or investigation by any of theGovernment Programs with respect to (i) the Borrower’s or any Subsidiary’squalification or right to participate in any Government Program in which itparticipates or has participated, (ii) the compliance or non-compliance byany such Person with the terms or provisions of any Government Program in whichit participates or has participated, or (iii) the right of any such Personto receive or retain amounts received or due or to become due from anyGovernment Program in which it participates or has participated, whichproceeding or investigation, together with all other such proceedings andinvestigations, would be reasonably likely to result in a Material Adverse Effect.

 

## SECTION 3.19.            MarginRegulations.  The Borrower is notengaged nor will it engage, principally or as one of its important activities,in the business of purchasing or carrying margin stock (within the meaning ofRegulation U issued by the Board), or extending credit for the purpose ofpurchasing or carrying margin stock, and no proceeds of any Borrowings ordrawings under any Letter of Credit will be used for any purpose that violatessuch Regulation U.

##  

## SECTION 3.20.            [Reserved].

##  

## SECTION 3.21.            IntellectualProperty; Licenses, Etc.  Holdings,the Borrower and each of its Subsidiaries own, license or possess the right touse, all of the trademarks, service marks, trade names, domain names,copyrights, patents, patent rights, licenses, technology, software, know-howdatabase rights, design rights and other intellectual property rights(collectively, “IP Rights”) that are reasonably necessary for theoperation of their respective businesses as currently conducted, and, withoutconflict with the rights of any Person, except to the extent such conflicts,either individually or in the aggregate, are not reasonably likely to result ina Material Adverse Effect.  Holdings, theBorrower and its Subsidiaries in the operation of their respective businessesas currently conducted do not infringe upon any rights held by any Personexcept for such infringements, individually or in the aggregate, which are notreasonably likely to result in a Material Adverse Effect.  No claim or litigation regarding any of theIP Rights, owned by Holdings, the Borrower and each of its Subsidiaries, ispending or, to the knowledge of the Borrower and Holdings, threatened againstHoldings, the Borrower or any of its Subsidiaries, which, either individuallyor in the aggregate, is reasonably likely to result in a Material AdverseEffect.

##  

Exceptpursuant to licenses and other user agreements entered into by each Loan Partyin the ordinary course of business, on and as of the date hereof (i) eachLoan Party owns and possesses the right to use, and has done nothing toauthorize or enable any other Person to use, any copyright, patent or trademarklisted in Schedule 9(a) or 9(b) to the Perfection Certificate and (ii) allregistrations listed in Schedule 9(a) or 9(b) to the PerfectionCertificate are valid and in full force and effect, except, in each case, tothe extent failure to own or possess such right to use or of such registrationsto be valid and in full force and effect is not reasonably likely, individuallyor in the aggregate, to result in a Material Adverse Effect.

 

## SECTION 3.22.            SecurityDocuments.

##  

### (a)           SecurityAgreement*.* The Security Documents (other than the Mortgages) are effective tocreate in favor of the Collateral Agent for the benefit of the Lenders, legal,valid and enforceable Liens on, and security interests in, the Collateraldescribed therein to the extent intended to be created thereby and (i) whenfinancing statements and other filings in appropriate form are filed in the officesspecified on Schedule 7 to the Perfection Certificate and (ii) upon thetaking of possession or control by the Collateral Agent of such Collateral withrespect to which a security interest may be perfected only by possession orcontrol (which possession or control shall be given to the Collateral Agent tothe extent possession or control by the Collateral Agent is required by theSecurity Documents), the Liens created 

 

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### by theSecurity Documents shall constitute fully perfected Liens on, and securityinterests in (to the extent intended to be created thereby), all right, titleand interest of the grantors in such Collateral to the extent perfection can beobtained by filing financing statements or possession or control, asapplicable, and to the extent required by the Security Documents, in each casesubject to no Liens other than Liens permitted hereunder.

###  

### (b)           PTO Filing;Copyright Office Filing.  When theCollateral Agreement or a short form thereof is properly filed in the UnitedStates Patent and Trademark Office and the United States Copyright Office, theLiens created by the Collateral Agreement shall, to the extent allowed by law,constitute fully perfected Liens on, and security interests in, all right,title and interest of the grantors thereunder (to the extent intended to becreated thereby) in Patents and Trademarks (each as defined in the Collateral Agreement)registered or applied for with the United States Patent and Trademark Office orCopyrights (as defined in the Collateral Agreement) registered or applied forwith the United States Copyright Office, as the case may be, in each casesubject to no Liens other than Liens permitted hereunder (it being understoodthat subsequent recordings in the United States Patent and Trademark Office andthe United States Copyright Office may be necessary to perfect a Lien onregistered Patents, Trademarks and Copyrights acquired by the grantors thereofafter the Effective Date).

###  

### (c)           Valid Liens*.*  Each SecurityDocument (other than the Mortgages) delivered pursuant to Sections 5.12 and5.13 will, upon execution and delivery thereof, be effective to create in favorof the Collateral Agent, for the benefit of the Lenders, legal, valid andenforceable Liens on, and security interests in (to the extent intended to becreated thereby), all of the Loan Parties’ right, title and interest in and tothe Collateral thereunder and (i) when all appropriate filings,recordings, registrations or notifications are made as may be required underapplicable law and (ii) upon the taking of possession or control by theCollateral Agent of such Collateral with respect to which a security interestmay be perfected only by possession or control (which possession or controlshall be given to the Collateral Agent to the extent required by any suchSecurity Document), such Security Document will constitute fully perfectedLiens on, and security interests in (to the extent intended to be createdthereby), all right, title and interest of the Loan Parties in such Collateralto the extent perfection can be obtained by filing financing statements orpossession or control, as applicable, and to the extent required by theSecurity Documents, in each case subject to no Liens other than Liens permittedhereunder.

###  

### (d)           Mortgages.Each Mortgage is effective to create, in favor of the Collateral Agent, for thebenefit of the Lenders, legal, valid and enforceable first priority Liens on,and security interests in, all of the right, title and interest of the LoanParty that is a party thereto in and to the Mortgaged Property describedtherein, subject only to Permitted Encumbrances or other Liens acceptable tothe Collateral Agent, and when such Mortgage is filed in the applicable offices(or, in the case of any Mortgage executed and delivered after the date hereofin accordance with the provisions of Sections 5.12 and 5.13, when suchMortgage is filed in the offices specified in the local counsel opiniondelivered with respect thereto in accordance with the provisions ofSections 5.12 and 5.13), such Mortgage shall constitute fully perfectedLiens on, and security interests in, all right, title and interest of such LoanParty in the Mortgaged Property.

###  

## SECTION 3.23.            EnvironmentalCompliance.

##  

### (a)           Except with respectto any matters that, individually or in the aggregate, are not reasonablylikely to result in a Material Adverse Effect, neither Holdings, the Borrowernor any Subsidiary (i) has failed to comply with any Environmental Law orto obtain, maintain or comply with any Environmental Permit or to provide anynotification required under any Environmental Law or has become subject to anyEnvironmental Liability or is conducting or financing any investigation,response or corrective

 

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### actionpursuant to any Environmental Law at any location; or (ii) knows of anybasis for Environmental Liability.

###  

### (b)           Except as notreasonably likely to result in, individually or in the aggregate, a MaterialAdverse Effect, to the Borrowers knowledge, (i) none of the propertiescurrently or formerly owned, leased or operated by Holdings, the Borrower orany of its Subsidiaries is listed or proposed for listing on the NPL or on theCERCLIS or any analogous state or local list or is adjacent to any such property;(ii) there has been no Release of Hazardous Materials by any Person on anyproperty currently or formerly owned, leased or operated by Holdings, theBorrower or any of its Subsidiaries and there has been no Release of HazardousMaterials by Holdings, the Borrower or any of its Subsidiaries at any other location.

###  

### (c)           To the Borrowersknowledge, all Hazardous Materials generated, used, treated, handled or storedat, or transported to or from, any property currently or formerly owned oroperated by Holdings, the Borrower or any of its Subsidiaries have beendisposed of in a manner not reasonably likely to result in, individually or inthe aggregate, a Material Adverse Effect.

#  

# ARTICLE IV

#  

# Conditions

#  

## SECTION 4.01.            EffectiveDate.  The obligations of the Lendersto make Loans and of the Issuing Bank to issue Letters of Credit hereundershall not become effective until the date on which each of the followingconditions is satisfied (or waived):

##  

(a)           The AdministrativeAgent shall have received from each party hereto either (i) a counterpartof this Agreement signed on behalf of such party or (ii) written evidencesatisfactory to the Administrative Agent (which may include telecopytransmission of a signed signature page of this Agreement) that such partyhas signed a counterpart of this Agreement.

 

(b)           The AdministrativeAgent shall have received a written opinion (addressed to the AdministrativeAgent and the Lenders and dated the Effective Date) of each of (i) DavisPolk & Wardwell, special New York counsel for Holdings and theBorrower, substantially in the form of Exhibit B-1 and (ii) WallerLansden Dortch & Davis, LLP, special Tennessee counsel for Holdingsand the Borrower, substantially in the form of Exhibit B-2.

 

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

 

(d)           The AdministrativeAgent shall have received a certificate, dated the Effective Date and signed bya Financial Officer, confirming compliance with the condition set forth inparagraph (a) of Section 4.02 (subject to the provisions set forth inSection 4.02(a)).

 

(e)           The AdministrativeAgent shall have received all fees and other amounts due and payable on orprior to the Effective Date, including, to the extent invoiced, reimbursementor payment of all out-of-pocket expenses (including fees, charges anddisbursements of counsel) required to be reimbursed or paid by any Loan Partyhereunder or under any other Loan Document.

 

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(f)            The Collateral andGuarantee Requirement shall have been satisfied and the Administrative Agentshall have received a completed Perfection Certificate dated the Effective Dateand signed by a Financial Officer, together with all attachments contemplatedthereby, including the results of a search of the Uniform Commercial Code (orequivalent) filings made with respect to the Loan Parties in the jurisdictionscontemplated by the Perfection Certificate and copies of the financingstatements (or similar documents) disclosed by such search and evidencereasonably satisfactory to the Administrative Agent that the Liens indicated bysuch financing statements (or similar documents) are permitted by Section 6.02or have been released, provided that the Collateral Agent may, in itsreasonable judgment, grant extensions of time for compliance with the Collateraland Guarantee Requirement by any Loan Party.

 

(g)           The AdministrativeAgent shall have received evidence that the insurance required by Section 5.07is in effect.

 

(h)           The AdministrativeAgent shall have received a certificate, dated the Effective Date and signed bya Financial Officer, confirming that since April 24, 2007, there has notbeen any change, event, condition, circumstance or state of facts, individuallyor in the aggregate, that has had or could reasonably be expected to have aCompany Material Adverse Effect (as defined in the Merger Agreement as ineffect on April 24, 2007).

 

(i)            The Lenders shallhave received (i) audited consolidated and consolidating balance sheetsand related statements of income, stockholders’ equity and cash flows of the Borrowerfor fiscal year 2006 (without any qualified audit opinion thereon) and (ii) unauditedconsolidated balance sheets and related statements of income, stockholders’equity and cash flows of the Borrower for each subsequently completed fiscalquarter (commencing with the fiscal quarter ended March 31, 2007) ended atleast 45 days prior to the Effective Date, which financial statements describedin clauses (i) and (ii) shall be prepared in accordance with GAAP.

 

(j)            The Transactionsshall have been consummated or shall be consummated substantiallysimultaneously with the Effective Date in accordance with the Merger Agreement(in each case without giving effect to any amendments, modifications or waiversto or of such documents that are materially adverse to the Lenders not approvedby the Arrangers).

 

(k)           The EquityContributions shall have been made.

 

(l)            The consummation ofthe Transactions shall comply in all respects with the terms of the Bridge LoanDocuments and the Bridge Loan Credit Agreement shall have been entered intosubstantially simultaneously with the Effective Date.

 

TheAdministrative Agent shall notify the Borrower and the Lenders of the EffectiveDate, and such notice shall be conclusive and binding.

 

## SECTION 4.02.            EachCredit Event.  The obligation of eachLender to make any Loan and of the Issuing Bank to issue, amend, renew orextend any Letter of Credit, is subject to receipt of the request therefor inaccordance herewith and to the satisfaction of the following conditions:

##  

(a)           The representationsand warranties of each Loan Party set forth in the Loan Documents shall be trueand correct in all material respects (except to the extent any such representation or warranty is qualifiedby “materially”, “Material Adverse Effect” or a similar term, in which casesuch representation and warranty (as so qualified) shall be true and correct inall 

 

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respects) on and as of the date of suchBorrowing or the date of issuance, amendment, renewal or extension of suchLetter of Credit, as applicable, except to the extent such representations andwarranties expressly relate to an earlier date (in which case suchrepresentations and warranties shall be true and correct in all materialrespects (except to the extent any such representation or warranty is qualifiedby “materially”, “Material Adverse Effect” or a similar term, in which casesuch representation and warranty (as so qualified) shall be true and correct inall respects) as of such earlier date); provided that the onlyrepresentations relating to the Borrower or its Subsidiaries and theirbusinesses, the accuracy of which shall be a condition to availability on theEffective Date shall be those in Sections 3.01, 3.02, 3.08 and 3.19.

 

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

 

Each Borrowing(provided that a conversion or continuation of a Borrowing shall notconstitute a “Borrowing” for purposes of this Section 4.02) and eachissuance, amendment, renewal or extension of a Letter of Credit shall be deemedto constitute a representation and warranty by Holdings and the Borrower on thedate thereof as to the matters specified in paragraphs (a) and (b) ofthis Section 4.02.

 

# ARTICLE V

#  

# AffirmativeCovenants

#  

Until theCommitments have expired or been terminated and the principal of and intereston each Loan and all fees, expenses and other amounts then due and payableunder any Loan Document shall have been paid in full and all Letters of Creditshall 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.            FinancialStatements and Other Information.   The Borrower will furnish to the Administrative Agent (for distributionto each Lender):

##  

(a)           within 90 days (orsuch shorter period as the SEC shall specify for the filing of annual reportson Form 10-K if the Borrower is subject to the reporting requirements ofthe Exchange Act) after the end of each fiscal year of the Borrower commencingwith the fiscal year ended December 31, 2007, (i) its auditedconsolidated balance sheet and consolidated statements of operations andcomprehensive income, stockholders’ equity and cash flows as of the end of andfor such fiscal year, and the related notes thereto, setting forth in each casein comparative form the figures for the previous fiscal year, all reported onby Ernst & Young LLP or other independent public accountants ofrecognized national standing or otherwise reasonably satisfactory to theAdministrative Agent (without a “going concern” or like qualification orexception and without any qualification or exception as to the scope of suchaudit) to the effect that such consolidated financial statements present fairlyin all material respects the financial condition and results of operations ofthe Borrower and the Subsidiaries on a consolidated basis in accordance withGAAP consistently applied, and (ii) a “management’s discussion andanalysis of financial condition and results of operations” that describes thefinancial condition and results of operations of the Borrower and itsconsolidated Subsidiaries;

 

(b)           within 45 days (orsuch shorter period as the SEC shall specify for the filing of quarterlyreports on Form 10-Q if the Borrower is subject to the reporting requirementsof the 

 

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Exchange Act) after the end of each of thefirst three fiscal quarters of each fiscal year of the Borrower commencing withthe fiscal quarter ending September 30, 2007, (i) its unauditedconsolidated balance sheet and consolidated statements of operations andcomprehensive income, stockholders’ equity and cash flows as of the end of andfor such fiscal quarter and the then-elapsed portion of the fiscal year,setting forth in each case in comparative form the figures for the correspondingperiod 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 presentingfairly in all material respects the financial condition and results ofoperations of the Borrower and the Subsidiaries on a consolidated basis inaccordance with GAAP consistently applied, subject to normal year-end auditadjustments and the absence of footnotes, and (ii) if at any time theBorrower is not subject to the reporting requirements of Section 13 or 15(d) ofthe Exchange Act, a “management’s discussion and analysis of financialcondition and results of operations” that describes the financial condition andresults of operations of the Borrower and its consolidated Subsidiaries;

 

(c)           concurrently withany delivery of financial statements under Section 5.01(a) or (b), acertificate of a Financial Officer (i) certifying to his or her knowledgeas to whether a Default or Event of Default has occurred and, if a Default orEvent of Default has occurred, specifying the details thereof and any actiontaken or proposed to be taken with respect thereto, (ii) setting forth (A) reasonablydetailed calculations demonstrating compliance with Section 6.12 (includingany exercise of the rights set forth in Section 7.02), and showing acalculation of the Leverage Ratio for purposes of determining the ApplicableRate and (B) in the case of financial statements delivered under Section 5.01(a) andif the Leverage Ratio is greater than 3.50 to 1.0 as of the last day of theapplicable fiscal year, reasonably detailed calculations of Excess Cash Flowfor the applicable period, (iii) certifying as to the calculation ofConsolidated EBITDA on a Pro Forma Basis for the four fiscal quarter periodending on the date of such financial statements and accompanied by reasonablydetailed supporting evidence, and (iv) certifying as to the applicableSenior Secured Leverage Ratio, accompanied by reasonably detailed supporting evidence;

 

(d)           concurrently withany delivery of financial statements under Section 5.01(a), a certificateof the accounting firm that reported on such financial statements statingwhether they obtained knowledge during the course of their examination of suchfinancial statements of any Event of Default due to any failure to comply with Section 6.12and, if such knowledge has been obtained, describing such Event of Default(which certificate may be limited to the extent required by accountingpolicies, rules or guidelines);

 

(e)           within 45 days afterthe commencement of each fiscal year of the Borrower, a detailed consolidatedbudget for such fiscal year (including a projected consolidated balance sheetand consolidated statements of projected operations and cash flows as of theend of and for such fiscal year) and, promptly when available, any materialrevisions of such budget approved by the Board of Directors of Borrower;

 

(f)            promptly after thesame become publicly available, copies of all periodic and other reports, proxystatements and other materials filed by the Borrower or any Subsidiary with theSEC or with any national securities exchange, as applicable;

 

(g)           simultaneously withthe delivery of each set of consolidated financial statements referred to in Sections5.01(a) and 5.01(b) above, the related consolidating financialstatements reflecting the adjustments necessary to eliminate the accounts ofUnrestricted Subsidiaries (if any) from such consolidated financial statements;and

 

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(h)           promptly followingany request therefor, such other information regarding the operations, businessaffairs and financial condition of Holdings, the Borrower or any Subsidiary, orcompliance with the terms of any Loan Document, as the Administrative Agent orany Lender may reasonably request.

 

Documentsrequired to be delivered pursuant to Section 5.01(a), (b) or (f) may(to the extent any such documents are included in materials otherwise filedwith the SEC) be delivered electronically and if so delivered, shall be deemedto have been delivered on the date (i) on which the Borrower posts suchdocuments, or provides a link thereto on the Borrower’s website on the Internetat the website address listed on Schedule 5.01 or (ii) on whichsuch documents are posted on the Borrower’s behalf on an Internet or intranetwebsite, if any, to which each Lender and the Administrative Agent have access(whether a commercial, third-party website or whether sponsored by the AdministrativeAgent); provided that the Borrower shall deliver paper copies of suchdocuments to the Administrative Agent or any Lender that requests the Borrowerto deliver such paper copies until a written request to cease delivering papercopies is given by the Administrative Agent or such Lender.  Notwithstanding anything contained herein, inevery instance the Borrower shall be required to provide paper copies of thecertificate of the Financial Officer required by Section 5.01(c) tothe Administrative Agent.  Except forsuch certificate of the Financial Officer, the Administrative Agent shall haveno obligation to request the delivery or to maintain copies of the documentsreferred to above, and in any event shall have no responsibility to monitorcompliance by the Borrower with any such request for delivery, and each Lendershall be solely responsible for requesting delivery to it or maintaining itscopies of such documents.

 

## SECTION 5.02.            Noticesof Material Events.  Holdings and theBorrower will furnish to the Administrative Agent (for distribution to eachLender), through the Administrative Agent, written notice of the followingpromptly after obtaining knowledge thereof:

##  

(a)           the occurrence ofany Default or Event of Default; and

 

(b)           the filing orcommencement of any action, suit or proceeding by or before any arbitrator orGovernmental Authority against or affecting Holdings, the Borrower or anySubsidiary that is reasonably likely to result in a Material Adverse Effect.

 

Each noticedelivered under this Section 5.02 shall be accompanied by a statement of aFinancial Officer or other executive officer of the Borrower setting forth thedetails of the event or development requiring such notice and any action takenor proposed to be taken with respect thereto.

 

## SECTION 5.03.            InformationRegarding Collateral.  The Borrowerwill furnish to the Collateral Agent prompt written notice (but in no eventlater than 30 days) of any change (i) in any Loan Party’s correct legalname, (ii) in the jurisdiction of incorporation or organization of anyLoan Party or (iii) in any Loan Party’s organizational identificationnumber.  The Borrower agrees not toeffect or permit any change referred to in the preceding sentence unless allfilings have been made under the Uniform Commercial Code or otherwise that arerequired in order for the Collateral Agent to continue at all times followingsuch change to have a valid, legal and perfected security interest in all theCollateral to the extent required by the Security Documents.

##  

## SECTION 5.04.            Existence;Conduct of Business.  Each ofHoldings and the Borrower will, and will cause each of the Restricted Subsidiariesto, do or cause to be done all things necessary to preserve, renew and keep infull force and effect its legal existence and the rights, qualifications,permits, approvals, accreditations, authorizations, Reimbursement Approvals,licenses, franchises, patents, copyrights, trademarks and trade names materialto the conduct of its business, except to the extent the failure 

 

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## to do so couldnot reasonably be expected to have a Material Adverse Effect and providedthat the foregoing shall not prohibit any merger, consolidation, liquidation,dissolution or asset sales or other dispositions permitted under Section 6.03or 6.05.

##  

## SECTION 5.05.            Paymentof Obligations.  Each of Holdings andthe Borrower will, and will cause each of the Restricted Subsidiaries to, payits Tax liabilities, before the same shall become delinquent or in default,except where (i) (a) the validity or amount thereof is beingcontested in good faith by appropriate proceedings, (b) Holdings, theBorrower or such Restricted Subsidiary has set aside on its books adequatereserves with respect thereto in accordance with GAAP, and (c) suchcontest effectively suspends the enforcement of any Lien securing suchobligation or (ii) the failure to make such payment is not reasonablylikely to, individually or in the aggregate, result in a Material Adverse Effect.

##  

## SECTION 5.06.            Maintenanceof Properties.  Each of Holdings andthe Borrower will, and will cause each of the Restricted Subsidiaries to, keepand maintain all property material to the conduct of its business in goodworking order and condition, ordinary wear and tear and fire or other casualtyexcepted, except to the extent the failure to do so could not reasonably beexpected to have a Material Adverse Effect.

##  

## SECTION 5.07.            Insurance.  Each of Holdings and the Borrower will, andwill cause each of the Restricted Subsidiaries to, maintain, with financiallysound and reputable insurance companies (which may include self-insurance), (a) insurancein such amounts (with no greater risk retention) and against such risks as arecustomarily maintained by companies of established repute engaged in the sameor similar businesses operating in the same or similar locations and (b) allinsurance required to be maintained pursuant to the Security Documents.

##  

## SECTION 5.08.            [Reserved].

##  

## SECTION 5.09.            Booksand Records; Inspection and Audit Rights. Each of Holdings and the Borrower will, and will cause each of theRestricted Subsidiaries to, keep proper books of record and account in whichfull, true and correct (in all material respects) entries are made of alldealings and transactions in relation to its business and activities to theextent necessary to prepare the consolidated financial statements of theBorrower in accordance with GAAP.  Eachof Holdings and the Borrower will, and will cause each of the RestrictedSubsidiaries to, permit any representatives designated by the AdministrativeAgent or any Lender, upon reasonable prior notice, to visit and inspect itsproperties during normal business hours, to examine and make extracts from itsbooks and records, including any information relating to actual or potentialcompliance with or liability under Environmental Laws, and to discuss itsaffairs, finances and condition with its officers and independent accountants (providedthat the Borrower shall be provided the opportunity to participate in any suchdiscussions with its independent accountants), all at such reasonable times andas often as reasonably requested.

##  

## SECTION 5.10.            Compliancewith Laws.  Each of Holdings and theBorrower will, and will cause each of the Restricted Subsidiaries to complywith all Requirements of Law (except in such instances in which suchRequirement of Law is being contested by appropriate proceedings diligentlyconducted), including ERISA and Environmental Laws, applicable to it, itsoperations and all property owned, operated and leased by any of them, exceptwhere the failure to do so, individually or in the aggregate, is not reasonablylikely to result in a Material Adverse Effect.

##  

## SECTION 5.11.            Useof Proceeds and Letters of Credit. The proceeds of the Tranche A Term Loans, Tranche B Term Loans and anyRevolving Loans borrowed on the Effective Date will be used by the Borrower onthe Effective Date solely for (a) first, the payment of theTransaction Costs, (b)

 

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## second,the payment of all principal, interest, fees and other amounts outstandingunder the Existing Credit Facility, and (c) third, together withthe Equity Contributions and cash on hand of the Borrower, the payment of theMerger Consideration.  The proceeds ofthe Revolving Loans (except as described above), Swingline Loans and Letters ofCredit will be used only for working capital and for other general corporatepurposes (including Permitted Acquisitions). No part of the proceeds of any Loan and no Letter of Credit will beused, whether directly or indirectly, for any purpose that entails a violationof any of the Regulations of the Board, including Regulations U and X.

##  

## SECTION 5.12.            AdditionalSubsidiaries.  If any additionalwholly owned Restricted Subsidiary is formed or acquired after the EffectiveDate (or if any wholly owned Immaterial Subsidiary or Specified Subsidiary thatis not a Subsidiary Loan Party ceases to qualify as an Immaterial Subsidiary orSpecified Subsidiary, as applicable) the Borrower will, promptly and in anyevent within 30 days of such event, notify the Collateral Agent and theAdministrative Agent thereof and within 60 days of such event cause theCollateral and Guarantee Requirement to be satisfied with respect to suchSubsidiary (if it is a Subsidiary Loan Party) and with respect to any EquityInterest in such wholly owned Restricted Subsidiary owned by any Loan Party; providedthat the Collateral Agent may, in its reasonable judgment, grant extensions oftime for compliance, or exceptions from compliance, with the provisions of thisparagraph by any Restricted Subsidiary.

##  

## SECTION 5.13.            FurtherAssurances.

##  

### (a)           Holdings and theBorrower will, and will cause each Subsidiary Loan Party to, execute any andall further documents, financing statements, agreements and instruments, andtake all such further actions (including the filing and recording of financingstatements, fixture filings, mortgages, deeds of trust and other documents),which may be required under any applicable law, or which the AdministrativeAgent or the Required Lenders may reasonably request, to cause the Collateraland Guarantee Requirement to be and remain satisfied, all at the expense of theLoan Parties.  Each of Holdings and theBorrower also agrees to provide to the Collateral Agent, from time to time uponreasonable request, evidence reasonably satisfactory to the AdministrativeAgent as to the perfection and priority of the Liens created or intended to becreated by the Security Documents.

###  

### (b)           If any materialassets (including any real property (other than any leased real property),other than any owned real property with a fair value of less than $5,000,000),are acquired by the Borrower or any Subsidiary Loan Party after the EffectiveDate (other than assets constituting Collateral under the Collateral Agreementthat become subject to the Lien in favor of the Collateral Agent uponacquisition thereof), the Borrower will promptly notify the AdministrativeAgent and the Lenders thereof and, if requested by the Administrative Agent orthe Required Lenders, the Borrower will cause such assets to be subjected tothe Lien of the Security Documents securing the Obligations and will take, andcause the Subsidiary Loan Parties to take, such actions as shall be necessaryor reasonably requested by the Administrative Agent to grant and perfect suchLiens, including actions described in Section 5.13(a), all at the expenseof the Loan Parties, all within 90 days of such request, provided thatthe Collateral Agent may, in its reasonable judgment, grant extensions of timefor compliance or exceptions with the provisions of this paragraph by any LoanParty.  Notwithstanding anything to thecontrary in this Agreement or any Security Document, no Loan Party shall berequired to pledge or grant security interests in particular assets if, in thereasonable judgment of the Administrative Agent or the Collateral Agent, thecosts of creating or perfecting such pledges or security interests in suchassets (including any mortgage, stamp, intangibles or other Tax) are excessivein relation to the benefits to the Lenders therefrom

###  

## SECTION 5.14.            EnvironmentalMatters.  Except to the extent thatthe failure to do so is not reasonably likely to have, individually or in theaggregate, a Material Adverse Effect, Holdings and 

 

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## the Borrowerwill (a) comply, and take all reasonable actions to cause its lessees tocomply with all applicable Environmental Laws and Environmental Permits; (b) obtainand renew all Environmental Permits necessary for its operations and necessaryfor its ownership or leasing of its properties; and (c) in each case tothe extent Holdings, the Borrower or any Restricted Subsidiary is required byEnvironmental Laws, conduct any investigation, study, sampling and testing, andundertake any cleanup, removal, remedial or other action necessary to removeand clean up Hazardous Materials at, on, under or emanating from any affectedproperty, in accordance with the requirements of such Environmental Laws.

##  

## SECTION 5.15.            Designationof Subsidiaries.

##  

### (a)           The Borrower may atany time after the Effective Date designate any Restricted Subsidiary of theBorrower as an Unrestricted Subsidiary or any Unrestricted Subsidiary as aRestricted Subsidiary; provided that (i) immediately before andafter such designation on a Pro Forma Basis, no Default shall have occurred andbe continuing, (ii) immediately after giving effect to such designation,the Borrower shall be in compliance, on a Pro Forma Basis, with the FinancialPerformance Covenant as of the last day of the most recent period in respect ofwhich financial statements shall have been required to be delivered pursuant toSection 5.01(a) or (b) (or if prior to the first time suchfinancial statements are so required to be delivered, as of the last day of themost recent period for which financial statements of the Borrower and itsRestricted Subsidiaries are available); it being understood that if such lastday is prior to March 31, 2008, then the ratio specified for March 31,2008 under Section 6.12 shall be deemed to apply (it being understood thatas a condition precedent to the effectiveness of any such designation, the Borrowershall deliver to the Administrative Agent a certificate of a Financial Officersetting forth in reasonable detail the calculations demonstrating suchcompliance), (iii) no Subsidiary may be designated as an UnrestrictedSubsidiary or continue as an Unrestricted Subsidiary if (A) it is a “RestrictedSubsidiary” for the purpose of the Bridge Loan Credit Agreement or any otherIndebtedness of Holdings or the Borrower or (B) the Borrower or anyRestricted Subsidiary provides any Guarantee or credit support of any kind,including any undertaking, Guarantee, indemnity, agreement or instrument thatwould constitute Indebtedness (other than the pledge of Equity Interests ofUnrestricted Subsidiaries) of any Indebtedness of such Unrestricted Subsidiaryor is directly or indirectly liable on such Indebtedness, as a guarantor orotherwise or any Indebtedness of such Unrestricted Subsidiary contains adefault that would permit, upon notice, lapse of time or both, any holder ofany Indebtedness of Borrower or any Restricted Subsidiary to declare a defaultunder such other Indebtedness or cause the payment thereof to be accelerated orpayable prior to its stated maturity, and (iv) if a Restricted Subsidiaryis being designated as an Unrestricted Subsidiary hereunder, the sum of (A) theassets of such Subsidiary as of such date of designation (the “DesignationDate”), as set forth on such Subsidiary’s most recent balance sheet, plus(B) the aggregate amount of assets of all Unrestricted Subsidiariesdesignated as Unrestricted Subsidiaries pursuant to this Section 5.15(a) priorto the Designation Date (in each case measured as of the date of each suchUnrestricted Subsidiary’s designation as an Unrestricted Subsidiary), togetherwith the amount of all Investments outstanding pursuant to Section 6.04(i) andSection 6.04(xv), as of the Designation Date shall not exceed $20,000,000(net of cash returns on such Investments to the Borrower or a QualifiedRestricted Subsidiary) during any period of 12 consecutive months (with anyamount not used during such period permitted to be carried forward to anysubsequent period) as of the Designation Date on a pro forma basis for suchdesignation.  The designation of anySubsidiary as an Unrestricted Subsidiary after the Effective Date shallconstitute an Investment by the Borrower therein at the date of designation inan amount equal to the net book value of the Borrower’s or its Subsidiary’s (asapplicable) investment therein.  Thedesignation of any Unrestricted Subsidiary as a Restricted Subsidiary shallconstitute (i) the incurrence at the time of designation of anyInvestment, Indebtedness or Liens of such Subsidiary existing at such time and (ii) areturn on any Investment by the Borrower in Unrestricted Subsidiaries pursuantto the preceding sentence in an amount equal to the Fair Market Value at thedate of such designation of the Borrower’s or its Subsidiary’s (as applicable)Investment in such Subsidiary.

 

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### (b)           If, at any time, aRestricted Subsidiary would fail to meet the requirements set forth in thedefinition of “Qualified Restricted Subsidiary”, it will thereafter cease to bea Qualified Restricted Subsidiary for purposes of this Agreement and anyIndebtedness of such Subsidiary will be deemed to be incurred by a RestrictedSubsidiary that is not a Qualified Restricted Subsidiary as of such date and,if such Indebtedness is not permitted to be incurred as of such date under Section 6.01the Borrower will be in default of such covenant.  The Chief Executive Officer or ChiefFinancial Officer of the Borrower may at any time designate any RestrictedSubsidiary not to be a Qualified Restricted Subsidiary; provided**that such designation will be deemed tobe an incurrence of Indebtedness by such Restricted Subsidiary of any outstandingIndebtedness of such Restricted Subsidiary, and such designation will only bepermitted if (1) such Indebtedness is permitted under Section 6.01and (2) no Default or Event of Default would be in existence upon orfollowing such designation.  In the event(x) a Restricted Subsidiary fails to meet the requirements to be aQualified Restricted Subsidiary or (y) the Chief Executive Officer orChief Financial Officer designates a Qualified Restricted Subsidiary not to bea Restricted Subsidiary, then all Investments in such Subsidiary since theEffective Date shall be deemed to be an incurrence under Section 6.04(xv)and to consequently reduce amounts available under Section 5.15(a)(iv),the proviso to Section 6.04(i) and Section 6.04(xv).  TheBorrower shall deliver to the Administrative Agent a certificate of a FinancialOfficer setting forth any such designation as a condition precedent to suchdesignation.

###  

### (c)           Except to the extentrestricted pursuant to any Permitted Payment Restrictions, the Borrower shall,and shall cause each Restricted Subsidiary to, cause each Qualified RestrictedSubsidiary to declare and pay regular monthly, quarterly, semiannual or annualdividends or distributions to the holders of its Equity Interests in an amountequal to substantially all of the available cash flow of such QualifiedRestricted Subsidiary for such period as determined in good faith by the Boardof Directors of such Qualified Restricted Subsidiary, subject to fiduciaryduties applicable to such Board of Directors and  such ordinary and customary reserves andother amounts as, in the good faith judgment of such individuals, may benecessary so that the business of such Qualified Restricted Subsidiary may beproperly and advantageously conducted at all times, including amounts foroperations, capital expenditures and debt service of such Qualified RestrictedSubsidiary.

###  

## SECTION 5.16.            PostClosing Matters.  Borrower shall useits commercially reasonable efforts to (a) deliver within 10 Business Daysafter the Closing Date (unless waived or extended in the Collateral Agent’sreasonable discretion) that certain promissory note from NorthStar SurgicalCenter, L.P. to ARC Financial Services Corporation, dated July 15, 2005,accompanied by duly executed instruments of transfer or assignment in blank and(b)(i) order the reports required by Section 4.01(f) forsearches conducted with respect to (1) Davidson County, Tennessee and (2) theUnited States District Court for the Middle District of Tennessee) within 10Business Days after the Closing Date (unless waived or extended in theCollateral Agent’s sole discretion) and thereafter use commercially reasonableefforts to obtain such reports, (ii) cause such reports to be delivered tothe Collateral Agent promptly upon receipt thereof (unless waived or extendedin the Collateral Agent’s reasonable discretion) and (iii) within 30 daysof the receipt of such reports, cause any Liens (other than Liens permitted by Section 6.02or other Liens permitted by the Collateral Agent in its reasonable discretion)disclosed in such results to be discharged.

##  

# ARTICLE VI

#  

# NegativeCovenants

#  

Until theCommitments have expired or been terminated and the principal of and intereston each Loan and all fees, expenses and other amounts then due and payableunder any Loan Document 

 

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have been paidin full and all Letters of Credit have expired or terminated and all LC Disbursementsshall have been reimbursed, the Borrower covenants and agrees with the Lendersthat:

 

## SECTION 6.01.                                    Indebtedness;Certain Equity Securities.

##  

### (a)                                  TheBorrower will not, nor will it permit any Restricted Subsidiary to, directly orindirectly create, incur, issue, guarantee or assume or otherwise becomedirectly or indirectly liable for any Indebtedness, contingently or otherwise,except:

###  

#### (i)                                     Indebtednesscreated under the Loan Documents;

####  

#### (ii)                                  Indebtednessof any Loan Party under the Bridge Loan Documents or the Take Out Notes in anaggregate principal amount not to exceed $175,000,000 plus any interestaccrued thereon and not paid in cash but added to the principal thereof(whether or not accompanied by the issuance of additional notes); providedthat such Indebtedness (a) shall mature (after giving effect to anyautomatic extension of the maturity date thereof) no earlier than the eighthanniversary of the Effective Date, (b) shall provide for no interimamortization, mandatory redemption or mandatory prepayment prior to maturity(other than (x) the mandatory prepayment contemplated inSection 2.11(b) of the Bridge Loan Credit Agreement as in effect onthe date hereof or any similar mandatory prepayment or mandatory redemptionprovision and (y) in the case of Indebtedness under the Bridge LoanDocuments, any mandatory redemption or mandatory prepayment with the proceedsof the Take Out Notes) and (c) shall not provide that the holders thereofhave the right to require any of the obligors under such Indebtedness torepurchase or prepay (or offer to repurchase or prepay) such Indebtedness,except, in the case of clauses (b) and (c) above, upon customary“change of control” and “asset sale” events;

####  

#### (iii)                               Indebtednessexisting on the Effective Date and set forth in Schedule 6.01 andextensions, renewals and replacements of any such Indebtedness, providedthat such extending, renewal or replacement Indebtedness (A) shall not bein a principal amount that exceeds the principal amount of the Indebtednessbeing extended, renewed or replaced (plus accrued interest and premiumthereon and reasonable fees and expenses incurred in connection therewith),(B) shall not have an earlier maturity date or a decreased weightedaverage life than the Indebtedness being extended, renewed or replaced,(C) if applicable, shall be subordinated to the Obligations on the sameterms (or, from a Lender’s perspective, better terms) as the Indebtedness beingextended, renewed or replaced, and (D) there is no obligor of suchIndebtedness that is not an obligor of such Indebtedness on the Effective Date;

####  

#### (iv)                              Indebtednessof the Borrower owed to any Restricted Subsidiary and of any Restricted Subsidiaryowed to the Borrower or another Restricted Subsidiary; provided that in the case of anysuch Indebtedness of a Restricted Subsidiary owed to the Borrower or aSubsidiary Loan Party, such Indebtedness is evidenced by a Pledged Note to theextent required by the Collateral and Guarantee Requirement;

####  

#### (v)                                 [Reserved];

####  

#### (vi)                              Guaranteesby the Borrower of Indebtedness of any Qualified Restricted Subsidiary and byany Qualified Restricted Subsidiary of Indebtedness of the Borrower or anyother Qualified Restricted Subsidiary, provided that the Indebtedness soGuaranteed would have otherwise been permitted to be incurred by Borrower orthe Guaranteeing Qualified Restricted Subsidiary under another clause of thisSection 6.01;

 

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#### (vii)                           (A) Indebtednessof the Borrower or any Restricted Subsidiary that was assumed in connectionwith a Permitted Acquisition, which Indebtedness was in existence at the timeof such Permitted Acquisition and not incurred in contemplation thereof andPermitted Refinancing Indebtedness in respect thereof, (B) Indebtedness ofthe Borrower or any Restricted Subsidiary incurred to finance the design,acquisition, construction, lease installation or improvement of any property(real or personal), fixed or capital assets, including Capital LeaseObligations (whether through their direct purchase or purchase of EquityInterest of a Person owing such property) and extensions, renewals andreplacements thereof, and (C) any Indebtedness assumed by the Borrower orany Restricted Subsidiary in connection with the acquisition of any such assetsor secured by a Lien on any such assets prior to the acquisition thereof andPermitted Refinancing Indebtedness in respect thereof; provided that theaggregate principal amount of Indebtedness permitted by thisSection 6.01(a)(vii) shall not exceed $50.0 million at any one timeoutstanding;

####  

#### (viii)                        Indebtednessowed to any Person (including obligations in respect of letters of credit forthe benefit of such Person) providing workers’ compensation, health, disabilityor other employee benefits or property, casualty or liability insurancepursuant to reimbursement or indemnification obligations to such Person, ineach case incurred in the ordinary course of business;

####  

#### (ix)                                Indebtednessof the Borrower or any Restricted Subsidiary in respect of (i) performancebonds, bid bonds, surety bonds, performance and completion guarantees andsimilar obligations, in each case provided in the ordinary course of business,and (ii) appeal bonds;

####  

#### (x)                                   Indebtednessof any Loan Party pursuant to Swap Agreements permitted by Section 6.07;

####  

#### (xi)                                solong as (x) no Event of Default has occurred and is continuing or wouldresult therefrom and (y) the Senior Secured Leverage Ratio on a Pro FormaBasis as of the last day of the most recent period for which financialstatements shall have been required to be delivered pursuant toSection 5.01(a) or (b) (or if prior to the first time suchfinancial statements are so required to be delivered, as of the last day of themost recent period in respect of which financial statements of the Borrower andits Restricted Subsidiaries are available) shall not exceed a ratio that is0.25 less than the ratio specified in Section 6.12 for such last day (itbeing understood that if such last day is prior to March 31, 2008, thenthe ratio specified for March 31, 2008 under Section 6.12 shall bedeemed to be the ratio specified in Section 6.12 for such last day),Indebtedness of a Loan Party that is secured with a Lien on the Collateral thatis pari passu with the Lien on the Collateral securing the Obligations may beincurred; provided that (a) such Indebtedness shall not have(A) a final maturity date earlier than the Tranche B Maturity Date,(B) a weighted average life that is shorter than that of thethen-remaining weighted average life of the Tranche B Term Loans (withoutgiving effect to any reductions of such weighted average life caused byvoluntary or mandatory prepayments of Tranche B Term Loans pursuant toSection 2.11) or (C) covenants or events of default that are, whentaken as a whole, materially more restrictive to such Loan Party and itsSubsidiaries than the terms of the Loan Documents and (b) the holders ofsuch Indebtedness (or an agent on their behalf) shall have entered intointercreditor agreements with the Collateral Agent that are reasonablysatisfactory to the Collateral Agent;

####  

#### (xii)                             Indebtednessrepresenting deferred compensation to employees of the Borrower and theRestricted Subsidiaries incurred in the ordinary course of business;

 

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#### (xiii)                          Indebtednessin respect of promissory notes issued to physicians, consultants, employees ordirectors or former employees, consultants or directors in connection withrepurchases of Equity Interests permitted by Section 6.08(a)(iii)

####  

#### (xiv)                         Guaranteesby any Loan Party of Indebtedness of a Non-Consolidated Entity in compliancewith Section 6.04(xv);

####  

#### (xv)                            Indebtednessof the Borrower or any Restricted Subsidiary; provided that the aggregateprincipal amount of Indebtedness permitted by this Section 6.01(a)(xv)shall not exceed $20.0 million;

####  

#### (xvi)                         Indebtednessof the Borrower or any Restricted Subsidiary; provided that after givingeffect to the incurrence of such Indebtedness, the Borrower’s Fixed ChargeCoverage Ratio shall be at least 2.0:1.0 on a Pro Forma Basis as of the lastday of the most recent period in respect of which financial statements shallhave been required to be delivered pursuant to Section 5.01(a) or(b) (or if prior to the first time such financial statements are sorequired to be delivered, as of the last day of the most recent period inrespect of which financial statements of the Borrower and its RestrictedSubsidiaries are available); providedthat the maximum amount of Indebtedness that may be incurred by a Subsidiarythat is not a Subsidiary Loan Party under this Section 6.01(a)(xvi) shallbe $10.0 million outstanding at any time and such Indebtedness of a RestrictedSubsidiary may be secured to the extent permitted by Section 6.02; providedfurther that no Indebtedness may be incurred pursuant to thisSection 6.01(a)(xvi) prior to the first anniversary of the Effective Datewhile any Indebtedness is outstanding under the Bridge Loan Credit Agreement;and

####  

#### (xvii)                      SubordinatedIndebtedness of Borrower or a Subsidiary Loan Party in an aggregate outstandingprincipal amount not to exceed (x) $50.0 million outstanding at any timeif after giving effect the incurrence of such Indebtedness, the Borrower’sLeverage Ratio is greater than 5.5 to 1.0 on a Pro Forma Basis as of the lastday of the most recent period in respect of which financial statements shallhave been required to be delivered pursuant to Section 5.01(a) or(b) (or if prior to the first time such financial statements are sorequired to be delivered, as of the last day of the most recent period inrespect of which financial statements of the Borrower and its RestrictedSubsidiaries are available) and (y) $100.0 million outstanding at any timeif after giving effect the incurrence of such Indebtedness, the Borrower’sLeverage Ratio is less than or equal to 5.5 to 1.0 on a Pro Forma Basis as ofthe last day of the most recent period in respect of which financial statementsshall have been required to be delivered pursuant toSection 5.01(a) or (b) (or if prior to the first time suchfinancial statements are so required to be delivered, as of the last day of themost recent period in respect of which financial statements of the Borrower andits Restricted Subsidiaries are available).

####  

### (b)                                 AllIndebtedness incurred pursuant to this Section 6.01 of any Loan Party owedto any Subsidiary or Non-Consolidated Entity that is not a Loan Party shall besubordinated to the Obligations on terms reasonably satisfactory to theAdministrative Agent; provided that, notwithstanding the foregoing, suchIndebtedness shall only be subordinated to the extent permitted by applicablelaws or regulations.

###  

### (c)                                  Forpurposes of determining compliance with this Section 6.01, in the eventthat an item of proposed Indebtedness meets the criteria of more than one ofthe exceptions permitted above, the Borrower will be permitted to classify suchitem of Indebtedness on the date of its incurrence, or later reclassify all ora portion of such item of Indebtedness, in any manner that complies with thiscovenant.

 

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## SECTION 6.02.                                    Liens.  The Borrower will not, nor will it permit anyRestricted Subsidiary to, create, incur, assume or permit to exist any Lien onany property or asset now owned or hereafter acquired by it, or assign or sellany income or revenues (including accounts receivable) or rights in respect ofany thereof, except:

##  

#### (i)                                     Lienscreated by the Loan Documents;

####  

#### (ii)                                  PermittedEncumbrances;

####  

#### (iii)                               anyLien on any property or asset of the Borrower or any Restricted Subsidiaryexisting on the Effective Date and set forth in Schedule 6.02 and anyrenewals or extensions thereof; provided that (A) such Lien shallnot apply to any other property or asset of the Borrower or any RestrictedSubsidiary and (B) such Lien shall secure only those obligations which itsecures on the Effective Date and extensions, renewals and replacements thereofthat do not increase the outstanding principal amount thereof (plus accruedinterest and premium thereon);

####  

#### (iv)                              anyLien existing on any property or asset prior to the acquisition thereof by theBorrower or any Restricted Subsidiary or existing on any property or asset orEquity Interests of any Person that becomes a Restricted Subsidiary after thedate hereof prior to the time such Person becomes a Restricted Subsidiary; providedthat (A) such Lien is not created in contemplation of or in connectionwith such acquisition or such Person becoming a Restricted Subsidiary, as applicable,(B) such Lien shall not apply to any other property or asset of theBorrower or any Restricted Subsidiary and (C) such Lien shall secure onlythose obligations that it secures on the date of such acquisition or the datesuch Person becomes a Restricted Subsidiary, as applicable, and extensions,renewals and replacements thereof that do not increase the outstandingprincipal amount thereof (plus accrued interest and premium thereon);

####  

#### (v)                                 Lienson fixed or capital assets acquired, constructed or improved by the Borrower orany Restricted Subsidiary, provided that (A) such securityinterests secure Indebtedness permitted by Sections 6.01(a)(vi), (B) suchsecurity interests and the Indebtedness secured thereby are incurred prior toor within one year after such acquisition or the completion of suchconstruction or improvement and (C) such security interests shall notapply to any other property or assets of the Borrower or any Restricted Subsidiaryand extensions, renewals and replacements thereof that do not increase theoutstanding principal amount thereof (plus accrued interest and premiumthereon);

####  

#### (vi)                              Liensof a collecting bank arising in the ordinary course of business underSection 4-208 of the Uniform Commercial Code in effect in the relevantjurisdiction covering only the items being collected upon;

####  

#### (vii)                           Liensarising out of sale and leaseback transactions permitted by Section 6.06;

####  

#### (viii)                        Liensgranted by a Subsidiary that is not a Loan Party in favor of the Borrower oranother Loan Party in respect of Indebtedness owed by such Subsidiary;

####  

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

 

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#### (x)                               Liensencumbering reasonable customary initial deposits and margin deposits andsimilar Liens attaching to commodity trading accounts or other brokerageaccounts incurred in the ordinary course of business and not for speculativepurposes;

####  

#### (xi)                            Liensthat are contract rights of set-off (i) relating to the establishment ofdepositary relations with banks not given in connection with the issuance ofIndebtedness, (ii) relating to pooled deposit or sweep accounts of theBorrower or any Restricted Subsidiary to permit satisfaction of overdraft orsimilar obligations incurred in the ordinary course of business of the Borrowerand the Restricted Subsidiaries or (iii) relating to purchase orders andother agreements entered into with customers of the Borrower or any RestrictedSubsidiary in the ordinary course of business;

####  

#### (xii)                         Lienssolely on any cash earned money deposits made by the Borrower or any RestrictedSubsidiary in connection with any letter of intent or purchase agreementpermitted hereunder;

####  

#### (xiii)                      Liens infavor of a Loan Party securing Indebtedness permitted under Sections6.01(a)(iv);

####  

#### (xiv)                     Lienssecuring Indebtedness permitted under Section 6.01(a)(xi);

####  

#### (xv)                        Lienscreated or deemed to exist by the establishment of trusts for the purpose ofsatisfying (i) Governmental Reimbursement Program Costs in the ordinarycourse of business and (ii) other actions or claims pertaining to the sameor related matters or other Government Programs in the ordinary course ofbusiness, provided that the Borrower and its Restricted Subsidiaries, ineach case, shall have established adequate reserves for such claims or actions;

####  

#### (xvi)                     Liens ofsellers of goods to the Borrower and any of its Restricted Subsidiaries arisingunder Article 2 of the Uniform Commercial Code or similar provisions ofapplicable law in the ordinary course of business, covering only the goods soldand securing only the unpaid purchase price for such goods and related expenses;

####  

#### (xvii)                  Liens securingIndebtedness incurred by a Restricted Subsidiary that is not a Subsidiary LoanParty pursuant to Section 6.01(a)(xvi); and

####  

#### (xviii)               other Lienssecuring Indebtedness and other obligations in an aggregate amount not exceeding$10,000,000 at any time.

####  

## SECTION 6.03.                                    FundamentalChanges.

##  

### (a)                              TheBorrower will not, nor will it permit any Restricted Subsidiary to, merge intoor consolidate with any other Person, or permit any other Person to merge intoor consolidate with it, or liquidate or dissolve, except that (i) anyPerson may merge into the Borrower in a transaction in which the survivingentity is a Person organized or existing under the laws of the United States ofAmerica, any State thereof or the District of Columbia and, if such survivingentity is not the Borrower, such Person expressly assumes, in writing, all theobligations of the Borrower under the Loan Documents, (ii) any Person maymerge into any Restricted Subsidiary in a transaction in which the survivingentity is a Restricted Subsidiary and, if any party to such merger is a SubsidiaryLoan Party or a Qualified Restricted Subsidiary, is or becomes a SubsidiaryLoan Party and/or Qualified Restricted Subsidiary, as applicable, concurrentlywith such merger, (iii) any Restricted Subsidiary may liquidate ordissolve if the Borrower 

 

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### determines ingood faith that such liquidation or dissolution is in the best interests of theBorrower and is not materially disadvantageous to the Lenders, (iv) any RestrictedSubsidiary that is not a wholly owned Subsidiary may merge with any Personother than a Loan Party, provided that such Restricted Subsidiary repaysany Indebtedness owing to any Loan Party prior to or in connection with suchmerger, (v) any asset sale permitted by Section 6.05(g) may beeffected through the merger of a subsidiary of the Borrower with a third partyand (vi) any Qualified Restricted Subsidiary may merge with any Personother than a Loan Party in connection with a Permitted Acquisition, providedthat any such merger referred to in clauses (i), (ii) or(iv) above involving a Person that is not a Subsidiary immediately priorto such merger shall not be permitted unless also permitted bySection 6.04.

###  

### (b)                                 TheBorrower will not, will not permit any Restricted Subsidiary to, engage to anymaterial extent in any business other than a Permitted Business.

###  

## SECTION 6.04.                                    Investments,Loans, Advances, Guarantees and Acquisitions.  The Borrower will not, nor will it permit anyRestricted Subsidiary to, purchase or acquire (including pursuant to any mergerwith 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 any loans or advances to, Guarantee any obligations of, or make anyinvestment or any other interest in, any other Person, or purchase or otherwiseacquire (in one transaction or a series of transactions) any Person or assetsor division constituting a business unit (collectively, “Investments”),except:

##  

#### (i)                  PermittedAcquisitions; provided that the aggregate amount of consideration paid(other than consideration consisting of Equity Interests in Holdings) for allPermitted Acquisitions of Non-Consolidated Entities and Restricted Subsidiariesthat are not Qualified Restricted Subsidiaries together with the aggregateamount of Investments made pursuant to Section 5.15(a)(iv) andSection 6.04(xv) shall not exceed $20,000,000 (net of cash returns on anysuch Investments to the Borrower or a Qualified Restricted Subsidiary) duringany period of twelve consecutive months (with any amount not used during suchperiod permitted to be carried forward to any subsequent period);

####  

#### (ii)               PermittedInvestments;

####  

#### (iii)            Investments set forthon Schedule 6.04 and extensions, modifications or renewals of suchInvestments (excluding any such extension, modification or renewal involvingadditional advances, contributions or other investments of cash or property orother increases thereof unless it is a result of the accrual or accretion ofinterest or original issue discount or payment-in-kind pursuant to the terms,as of the Effective Date, of the original Investment so extended, modified or renewed);

####  

#### (iv)           Investments by theBorrower and the Restricted Subsidiaries in (i) Loan Parties and(ii) Equity Interests in Qualified Restricted Subsidiaries or any Personthat is a Non-Consolidated Entity or a Restricted Subsidiary that is not aQualified Restricted Subsidiary but will in each case be a Qualified RestrictedSubsidiary upon such Investment;

####  

#### (v)              loans or advancesmade by the Borrower to any Qualified Restricted Subsidiary and made by anyRestricted Subsidiary to the Borrower or any Qualified Restricted Subsidiary; providedthat any such loans and advances made by a Loan Party shall be evidenced byPledged Notes pledged in accordance with the Collateral and Guarantee Requirement;

 

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#### (vi)                              Guaranteesconstituting Indebtedness permitted by Section 6.01; provided thatif at the time of and after giving effect to any Guarantee (and withoutlimiting the foregoing) the aggregate principal amount of Indebtedness of RestrictedSubsidiaries that are not Qualified Restricted Subsidiaries that is Guaranteedby the Borrower or any Qualified Restricted Subsidiary together with theaggregate amount of Investments made pursuant to Section 6.04(xvi))exceeds $20,000,000 (net of cash returns on any such Investments to theBorrower or a Qualified Restricted Subsidiary) during any period of twelveconsecutive months (with any amount not used during such period permitted to becarried forward to any subsequent period) (in each case determined withoutregard to any write-downs or write-offs), such Guarantee shall not bepermitted; providedfurther that substantially all of thebusiness activities of any such Restricted Subsidiary that is not a QualifiedRestricted Subsidiary whose Indebtedness is so Guaranteed consists of owning oroperating a Center;

####  

#### (vii)                           receivablesor other trade payables owing to the Borrower or any Restricted Subsidiary ifcreated or acquired in the ordinary course of business;

####  

#### (viii)                        Investmentsconsisting of Equity Interests, obligations, securities or other propertyreceived (x) in settlement of delinquent accounts of and disputes withcustomers and suppliers in the ordinary course of business and owing to theBorrower or any Restricted Subsidiary, (y) in satisfaction of judgments or(z) in settlement of or as a result of foreclosure with respect to any securedInvestment;

####  

#### (ix)                                Investmentsby the Borrower or any Restricted Subsidiary in payroll, travel and similaradvances to cover matters that are expected at the time of such advancesultimately to be treated as expenses for accounting purposes and that are madein the ordinary course of business;

####  

#### (x)                                   loansor advances by the Borrower or any Restricted Subsidiary to employees(a) made for reasonable and customary business-related travel,entertainment, relocation and analogous ordinary business purposes and(b) otherwise not exceeding $2,500,000 in the aggregate at any timeoutstanding (determined without regard to any write-downs or write-offs of suchloans or advances);

####  

#### (xi)                                Investmentsin the form of Swap Agreements permitted by Section 6.07;

####  

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

####  

#### (xiii)                          Investmentsreceived in connection with the dispositions of assets permitted bySection 6.05;

####  

#### (xiv)                         Investmentsconstituting (x) deposits described in clauses (c) and (d) ofthe definition of the term “Permitted Encumbrances” or (y) negotiableinstruments held for collection;

####  

#### (xv)                            Investments in Non-ConsolidatedEntities, Restricted Subsidiaries that are not (after giving effect to suchInvestment) Qualified Restricted Subsidiaries and Unrestricted Subsidiaries bythe Borrower or any Qualified Restricted Subsidiary in an aggregate amountnot to exceed at the time of such Investment on a pro forma basis, togetherwith the consideration paid 

 

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#### (other than considerationconsisting of the Equity Interests in Holdings) for Permitted Acquisitions inNon-Consolidated Entities and Restricted Subsidiaries that are not QualifiedRestricted Subsidiaries and the amount of Investments permitted underSection 5.15(a)(iv) and Section 6.04(i), $20,000,000 (netof cash returns on any such Investments to the Borrower or a QualifiedRestricted Subsidiary) duringany period of twelve consecutive months (with any amount not used during thisperiod permitted to be carried forward to any subsequent period); providedthat substantially all of the business activities of any such Non-ConsolidatedEntity, Restricted Subsidiary that is not a Qualified Restricted Subsidiary, orUnrestricted Subsidiary consists of owning or operating a Center;

####  

#### (xvi)                         Investmentsconsisting of loans or advances to, or Guarantees of Indebtedness of,Non-Consolidated Entities, Restricted Subsidiaries that are not (after givingeffect to such Investments) Qualified Restricted Subsidiaries and UnrestrictedSubsidiaries by the Borrower or any Qualified Restricted Subsidiary in an aggregateamount not to exceed at the time of such investment on a pro forma basis, togetherwith the aggregate amount of Investments made pursuant to the proviso toSection 6.04(vi), $20,000,000 (net of cash returns on any suchinvestments to the Borrower or a Qualified Restricted Subsidiary) during anyperiod of twelve consecutive months (with any amount not used during suchperiod permitted to be carried forward to any subsequent period); providedthat substantially all of the business activities of any Non-ConsolidatedEntity, Restricted Subsidiary that is not a Qualified Restricted Subsidiary, orUnrestricted Subsidiary consists of owning or operating a Center;

####  

#### (xvii)                      Guaranteesby the Borrower or any Restricted Subsidiary of real estate and leases (otherthan Capital Lease Obligations) or of other obligations that do not constituteIndebtedness, in each case entered into in the ordinary course of business;

####  

#### (xviii)                   advances toNon-Consolidated Entities in the ordinary course of business, providedthat (i) such advances when made are expected to be repaid within 270 daysof such advance and (ii) the aggregate amount of all advances madepursuant to this Section 6.04(xvii) does not exceed $20,000,000 at anytime outstanding;

####  

#### (xix)                           Investmentsconsisting of amounts potentially due from a seller of property in a PermittedAcquisition that (i) relate to customary post-closing adjustments withrespect to accounts receivable, accounts payable and similar items typicallysubject to post-closing adjustments in similar transactions and (ii) areoutstanding for a period of one hundred twenty (120) days or less following theclosing of such Permitted Acquisition;

####  

#### (xx)                              solong as (x) no Event of Default shall have occurred and be continuing orwould result therefrom and (y) the Leverage Ratio is less than 5.50 to1.00, Investments at any time not to exceed the difference between (x) 50%of Cumulative Retained Excess Cash Flow (or, if the Leverage Ratio is less than4.50 to 1.00, 100% of Cumulative Retained Excess Cash Flow) at such time (theLeverage Ratio to be measured at the time of, and after giving effect to, anysuch Investment) *minus*(y) all Investmentsmade prior to such time pursuant to this Section 6.04(xx) (net of cashreturns on any such Investments to, or reduction in the amount of Investmentsconstituting Guarantees made by, the Borrower or any Qualified RestrictedSubsidiary) and all Restricted Payments made at or prior to such time pursuantto Section 6.08(a)(viii);

####  

#### (xxi)                           Investmentsat any time in an aggregate amount not to exceed the difference between(x) the amount of Net Proceeds received by the Borrower from the issuanceof any of its Qualified Equity Interests (or capital contributions to theBorrower) and (y) all Investments made 

 

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#### prior to such time pursuant to thisSection 6.04(xxi) (net of cash returns on any such Investments to, orreduction in the amount of Investments constituting Guarantees made by, theBorrower or any Qualified Restricted Subsidiary) and the aggregate amount ofall Restricted Payments made pursuant to Section 6.08(xiv); and

####  

#### (xxii)                        Investmentsnot otherwise permitted by the foregoing clauses in an amount not to exceed$10,000,000 in the aggregate at any time outstanding;

####  

#### provided, however, that if any Investmentpursuant to Section 6.04(i), 6.04(xi), 6.04(xv) or 6.04(xvi) is made inany Person that is not a Qualified Restricted Subsidiary of the Borrower at thedate of the making of such Investment and such Person becomes a QualifiedRestricted Subsidiary of the Borrower after such date, such Investment shallthereafter be deemed to have been made pursuant to clause (i) (but notsubject to the proviso thereof), (iv) or (v) above, as appropriate,and shall cease to have been made pursuant to Section 6.04(xi), 6.04(xv),6.04(xvi) or the proviso to Section 6.04(i), as applicable, for as long assuch Person continues to be a Qualified Restricted Subsidiary (it beingunderstood that if such Person thereafter ceases to be a Qualified RestrictedSubsidiary of the Borrower, such Investment will again be deemed to have beenmade pursuant to Section 6.04(xi), 6.04(xv), 6.04(xvi) or the proviso toSection 6.04(i), as applicable; provided, further, thatsubstantially all of the business activities of any such Person consists of aPermitted Business.

####  

## SECTION 6.05.                                    Asset Sales.  The Borrower will not, nor will it permit anyRestricted Subsidiary to, sell, transfer, lease or otherwise dispose of anyasset, including any Equity Interest owned by it, nor will the Borrower permitany Restricted Subsidiary to issue any additional Equity Interest in suchRestricted Subsidiary (other than to the Borrower or another Restricted Subsidiaryin compliance with Section 6.04), except:

##  

(a)                                  sales, transfers anddispositions of (i) inventory in the ordinary course of business,(ii) used, obsolete, worn out, no longer used or useful or surplusequipment or property and (iii) the sale or other disposition of cash andPermitted Investments;

 

(b)                                 sales,transfers and dispositions to a Loan Party (other than Holdings) or anySubsidiary, provided that any such sales, transfers or dispositions fromthe Borrower or a Restricted Subsidiary to an Unrestricted Subsidiary or fromthe Borrower or a Qualified Restricted Subsidiary to a Restricted Subsidiarythat is not a Qualified Restricted Subsidiary are permitted underSection 6.04;

 

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

 

(d)                                 sales,transfers and dispositions of property to the extent such property constitutesan investment permitted by Sections 6.04(ii), (viii) or (xii);

 

(e)                                  saleand leaseback transactions permitted by Section 6.06;

 

(f)                                    dispositionsresulting from any casualty or other insured damage to, or any taking underpower of eminent domain or by condemnation or similar proceeding of, anyproperty or asset of the Borrower or any Restricted Subsidiary;

 

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(g)                                 sales,transfers and other dispositions of assets that are not permitted by any otherparagraph of this Section 6.05, provided that the aggregate FairMarket Value of all assets sold, transferred or otherwise disposed of inreliance upon this clause (g) (excluding any single transaction or seriesof related transactions that involves assets having a Fair Market Value of lessthan $250,000) shall not exceed 5% of Total Assets during any fiscal year ofthe Borrower (measured as of the start of such fiscal year);

 

(h)                                 exchangesof property for similar replacement property for fair value;

 

(i)                                     Investmentsin compliance with Section 6.04 and Restricted Payments in compliance withSection 6.08;

 

(j)                                     licenses,sublicenses, leases or subleases granted to others not interfering in anymaterial respect with the business of the Borrower and its Subsidiaries;

 

(k)                                  thesale of Equity Interests in (i) any Subsidiary or Non-Consolidated Entityto a Strategic Investor and (ii) an Unrestricted Subsidiary;

 

(l)                                     sales,transfers and dispositions described on Schedule 6.05; and

 

(m)                               anydisposition of assets by any Restricted Subsidiary that is not wholly owned bythe Borrower or a Subsidiary Loan Party all or substantially all of whoseproperty consists of a Center and assets related to the operations of suchCenter; provided that the Net Proceeds of such disposition are promptly(and in any event within five Business Days) applied (x) first to satisfythe Indebtedness evidenced by any Pledged Note(s) issued by suchRestricted Subsidiary to any Loan Party (other than Holdings) and(y) second to satisfy the requirements of Section 2.11(c) with respectto such disposition;

 

providedthat all sales, transfers, leases and other dispositions permitted hereby(other than those permitted by paragraphs (a), (b), (c), (f), (i) and(j) above) shall be made for Fair Market Value and (other than thosepermitted by paragraphs (a), (b), (c), (f), (h), (i) and (j) above)for at least 75% cash consideration (with each of the following being deemed tobe cash for such purpose: (i) Permitted Investments, (ii) anyliabilities (as shown on the Borrower’s most recent consolidated balance sheetrequired to be delivered pursuant to Section 5.01(a) or (b) (orif prior to the first time such a consolidated balance sheet is so required tobe delivered, the most recent date for which a consolidated balance sheet ofthe Borrower and its Restricted Subsidiaries is available)) of the Borrower orany Restricted Subsidiary (other than contingent liabilities and liabilitiesthat are by their terms subordinated to any of the Obligations) that areassumed by the transferee of any such assets pursuant to a customary novationagreement that releases the Borrower or the applicable Restricted Subsidiaryfrom further liability, (iii) any securities, notes or other obligationsreceived by the Borrower or any such Restricted Subsidiary from such transfereethat are converted by the Borrower or such Restricted Subsidiary into cashwithin 180 days of receipt, to the extent of the cash received in thatconversion, (iv) any Designated Noncash Consideration received by theBorrower or a Restricted Subsidiary in connection with the sale or contributionof assets by the Borrower or a Restricted Subsidiary to a joint venture with aStrategic Investor, provided, further, that in the case of thisclause (iv), (x) any such Designated Noncash Consideration that isconverted into Permitted Investments shall be treated as Net Proceeds in themanner set forth below and (y) in the event such Designated Noncash Considerationis an Investment in a Non-Consolidated Entity, Restricted Subsidiary that isnot a Qualified Restricted Subsidiary or an Unrestricted Subsidiary, suchDesignated Noncash Consideration shall be deemed to have been acquired andconsequently reduce amounts available under Sections 5.15(a), 6.04(vi) and6.04(xv) and (v) other Designated Noncash Consideration the Fair MarketValue of which, 

 

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when takentogether with all other Designated Noncash Consideration received pursuant tothis clause (v) (and not subsequently converted into Permitted Investmentsthat are treated as Net Proceeds), does not exceed 5% of Total Assets at thetime of receipt since the Effective Date, with the Fair Market Value of eachitem of Designated Noncash Consideration being measured at the time receivedand without giving effect to subsequent changes in value).

 

## SECTION 6.06.                                    Sale andLeaseback Transactions.  The Borrowerwill not, nor will it permit any Restricted Subsidiary to, enter into any arrangement,directly or indirectly, whereby it shall sell or transfer any property, real orpersonal, used or useful in its business, whether now owned or hereafteracquired, and thereafter rent or lease such property or other property that itintends to use for substantially the same purpose or purposes as the propertysold or transferred, except for (x) any such sale of any fixed or capitalassets of the Borrower or any Restricted Subsidiary which sale is made for cashconsideration in an amount not less than the fair value of such fixed orcapital asset and is consummated within 180 days after the Borrower or suchRestricted Subsidiary acquires or completes the construction of such fixed orcapital asset or (y) sale and leaseback transactions with respect toproperties acquired after the Effective Date, where the Fair Market Value ofsuch properties in the aggregate does not to exceed $20,000,000.

##  

## SECTION 6.07.                                    Swap Agreements.  The Borrower will not, nor will it permit anyRestricted Subsidiary to, enter into any Swap Agreement, except (a) SwapAgreements entered into to hedge or mitigate risks to which the Borrower or anyRestricted Subsidiary has actual exposure (other than those in respect of EquityInterests of the Borrower or any of the Restricted Subsidiaries) and(b) Swap Agreements entered into in order to effectively cap, collar orexchange interest rates (from fixed to floating rates, from one floating rateto another floating rate or otherwise) with respect to any interest-bearing liabilityor investment of the Borrower or any Restricted Subsidiary.

##  

## SECTION 6.08.                                    RestrictedPayments.

##  

### The Borrowerwill not, nor will they permit any Restricted Subsidiary to, declare or make,or agree to pay or make, directly or indirectly, any Restricted Payment, orincur any obligation (contingent or otherwise) to do so, except:

###  

#### (i)                                     theBorrower may declare and pay dividends with respect to its common stock payablesolely in additional shares of its common stock, and, with respect to itspreferred stock, payable solely in additional shares of such preferred stock orin shares of its common stock;

####  

#### (ii)                                  RestrictedSubsidiaries may declare and pay dividends ratably with respect to theircapital stock, membership or partnership interests or other similar Equity Interests;

####  

#### (iii)                               Borrowermay declare and pay dividends or make other distributions to Holdings, theproceeds of which are used by Holdings or a Parent to (i) purchase orredeem Equity Interests of Holdings or a Parent acquired by former or currentemployees, consultants or directors of Holdings, the Borrower or any RestrictedSubsidiary or (ii) pay principal or interest on promissory notes that wereissued in lieu of cash payments for the repurchase, retirement or other acquisitionor retirement for value of such Equity Interests, provided that theaggregate amount of such dividends or other distributions under thisSection 6.08(a)(iii) shall not exceed in any fiscal year $3,000,000(it being understood, however, that unused amounts permitted to be paidpursuant to this proviso are available to be carried over to subsequent fiscalyears); provided thatany cancellation of Indebtedness owing to the Borrower in connection with andas consideration for a repurchase of Equity Interests of Holdings (or a Parent)shall not be deemed to constitute a Restricted 

 

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#### Payment for purposes of thisSection 6.08(a)(iii), so long as such Indebtedness was incurred solely forthe purpose of purchasing such Equity Interests; provided**further**that such amount in any calendar year may be increased byan amount not to exceed (1) the cash proceeds of key man life insurancepolicies received by Holdings (to the extent such proceeds are contributed tothe Borrower and not used to fund any Restricted Payments other than those madepursuant to this Section 6.08(a)(iii)) or any Borrower or any RestrictedSubsidiary after the Effective Date (providedthat the Borrower may elect to apply all or any portion of the aggregateincrease contemplated by clause (1) above in any calendar year) less(2) the amount of any Restricted Payments previously made pursuant toclause (1) of this Section 6.08(a)(iii);

####  

#### (iv)                              theBorrower may make Restricted Payments to Holdings to be used by Holdings solelyto pay (or to make Restricted Payments to allow a Parent to pay) its franchisetaxes and other fees required to maintain its corporate existence and to payfor general corporate and overhead expenses (including salaries and othercompensation of employees) incurred by Holdings or a Parent, providedthat such Restricted Payments shall not exceed $3,000,000 in any calendar yearor to be used by Holdings to pay fees and expenses (other than to Affiliates)relating to any unsuccessful debt or equity offering;

####  

#### (v)                                 theBorrower may make Restricted Payments to Holdings in an amount necessary toenable Holdings to pay (or make Restricted Payments to allow a Parent to pay)the Taxes directly attributable to (or arising as a result of) the operationsof a Parent, Holdings, the Borrower and the Restricted Subsidiaries, providedthat (A) the amount of such Restricted Payments shall not exceed thelesser of (x) the Tax liabilities that the Borrower and the RestrictedSubsidiaries would be required to pay in respect of Federal, state, local andforeign Taxes were the Borrower and the Restricted Subsidiaries to pay suchTaxes as stand-alone taxpayers less any Tax payable directly by the Borrower orany Restricted Subsidiary or (y) the actual liabilities of the Parentgroup on a consolidated or combined basis and (B) all Restricted Paymentsmade to Holdings or a Parent pursuant to this clause (v) are used byHoldings or a Parent for the purposes specified herein within 20 days of thereceipt thereof;

####  

#### (vi)                              theBorrower may make Restricted Payments to Holdings to pay management, consultingand advisory fees to the Sponsor or any Sponsor Affiliate and to reimburse anyrelated expenses to the extent permitted by Section 6.09(a);

####  

#### (vii)                           theBorrower and the Restricted Subsidiaries may make additional RestrictedPayments (and Holdings may make Restricted Payments with such amounts receivedfrom the Borrower) in an aggregate amount throughout the term of this Agreementnot exceeding $5,000,000;

####  

#### (viii)                        so long as (x) no Event ofDefault shall have occurred and be continuing or would result therefrom and(y) the Leverage Ratio is less than 4.50 to 1.00, Restricted Payments atany time not to exceed the difference between 100% of Cumulative RetainedExcess Cash Flow) at such time (the Leverage Ratio to be measured at the timeof, and after giving effect to, any such Restricted Payment) *minus* (y) all Restricted Payments made prior to suchtime pursuant to this Section 6.08(a)(viii) and all Investments madeat or prior such time pursuant to Section 6.04(xx) (net of cashreturns on any such Investments to, or reduction in the amount of Investmentsconstituting Guarantees made by, the Borrower or any Qualified RestrictedSubsidiary);

 

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#### (ix)                                theMerger Consideration paid on or promptly following the Effective Date,Transaction Costs and payments to former stockholders of the Borrower inconnection with the exercise of appraisal rights;

####  

#### (x)                                   Investmentsin non-wholly owned Subsidiaries or Non-Consolidated Entities permitted bySection 6.04;

####  

#### (xi)                                thepurchase, redemption or other acquisition or retirement for value of EquityInterests of a Qualified Restricted Subsidiary owned by a Strategic Investor ifsuch purchase, redemption or other acquisition or retirement for value is madefor consideration not in excess of the Fair Market Value of such Equity Interests;

####  

#### (xii)                             eachRestricted Subsidiary may make Restricted Payments to any Loan Party (otherthan Holdings);

####  

#### (xiii)                          theBorrower may issue its common stock and options, warrants or other equityawards with respect to its common stock under any stock option, stock incentiveor similar plan approved by the shareholders of the Borrower (including deferredpurchases under the deferred stock purchase program) and repurchase EquityInterests to the extent (x) such repurchase is deemed to occur upon theexercise of such options, warrants or other equity awards and (y) suchEquity Interests represent a portion of the purchase price of such options,warrants or other equity awards;

####  

#### (xiv)                         theBorrower may make Restricted Payments to Holdings in an aggregate amount not toexceed the cash proceeds received by Holdings from a substantially concurrentissue of new shares of Holdings’ Qualified Equity Interests and contributed tothe Borrower less the amount of Investments made pursuant toSection 6.04(xxi); and

####  

#### (xv)                            theBorrower may declare and make payments under the outstanding warrants of theBorrower described on Schedule 6.08 and repurchase any of the foregoing.

####  

## SECTION 6.09.                                    Transactionswith Affiliates.  The Borrower willnot, nor will it permit any Restricted Subsidiary to, sell, lease or otherwisetransfer any property or assets to, or purchase, lease or otherwise acquire anyproperty or assets from, or otherwise engage in any other transactions with,any of its Affiliates involving aggregate consideration in excess of $2.5million, except:

##  

(a)                                  transactionsthat are at prices and on terms and conditions substantially not less favorableto the Borrower or such Restricted Subsidiary as could be obtained on anarm’s-length basis from unrelated third parties,

 

(b)                                 transactionsbetween or among the Borrower and Qualified Restricted Subsidiaries,

 

(c)                                  anyinvestment permitted under Section 6.04 (iii), 6.04(iv), 6.04(v),6.04(vi), 6.04(vii), 6.04(xiii), 6.04(xv), 6.04(xvi) or 6.04(xvii),

 

(d)                                 anyIndebtedness permitted under Section 6.01,

 

(e)                                  anyRestricted Payment permitted under Section 6.08,

 

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(f)            any sale, transfer or disposition permitted under Section 6.05,

 

(g)           loans or advances to employees pursuant to Section 6.04,

 

(h)           any mergers, consolidations, liquidations or dissolutionspermitted under Section 6.03,

 

(i)            any lease or sublease entered into between the Borroweror any Restricted Subsidiary, as lessee or sublessee, and any of the Affiliates(as of the Effective Date) of the Borrower or entity controlled by suchAffiliates, as lessor or sublessor, which is approved in good faith by a majorityof the disinterested members of the Board of Directors of the Borrower,

 

(j)            any management, transaction, monitoring or terminationfees and related indemnities and reimbursement of expenses pursuant to theSponsor Management Agreement as in effect on the Effective Date or as amendedin a manner not materially adverse to the Lenders;

 

(k)           the payment of reasonable fees to directors of theBorrower or any Restricted Subsidiary who are not employees of the Borrower orany Restricted Subsidiary, and compensation and employee benefit arrangementspaid to, and indemnities provided for the benefit of, directors, officers oremployees of the Borrower or any Restricted Subsidiary in the ordinary courseof business,

 

(l)            any issuances of securities or other payments, awards orgrants in cash, securities or otherwise pursuant to, or the funding of,employment agreements, employee benefit plans, stock options and stockownership plans approved by the Borrower’s Board of Directors,

 

(m)          transactions pursuant to agreements set forth on Schedule 6.09and any amendments thereto to the extent such amendments are not materiallyless favorable to the Borrower or such Subsidiary Loan Party than those providedfor in the original agreements,

 

(n)           employment and severance arrangements entered into in theordinary course of business and approved by the Borrower’s Board of Directorsbetween a Parent, Holdings, the Borrower or any Restricted Subsidiary and anyemployee thereof, and

 

(o)           the Transactions, including all payments made or to bemade in connection with the Transactions, including the payment of theTransaction Costs.

 

(p)           transactions with a Person (other than an UnrestrictedSubsidiary of the Borrower) that is an Affiliate of the Borrower solely becausethe Borrower owns, directly or through a Restricted Subsidiary, an EquityInterest in, or controls, such Person;

 

(q)           any issuance of Equity Interests (other than DisqualifiedEquity Interests) of the Borrower to Affiliates of the Borrower;

 

(r)            payments by the Borrower or any of its RestrictedSubsidiaries to the Sponsor and/or any of its Affiliates for any transactionfor which financial advisory, financing, underwriting or placement services orin respect of other investment banking activities are provided to the Borroweror one of its Subsidiaries, including, without limitation, in connection withacquisitions or divestitures, which payments are approved by the majority ofthe disinterested members of the Board of Directors of the Borrower in goodfaith;

 

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(s)           transactions with Restricted Subsidiaries that are notQualified Restricted Subsidiaries, Non-Consolidated Entities, UnrestrictedSubsidiaries, customers, suppliers, contractors, joint venture partners (includingwithout limitation physicians) or purchasers or sellers of goods or services,in each case which are in the ordinary course of business (including, withoutlimitation, pursuant to joint venture agreements) and otherwise in compliancewith the terms of this Agreement;

 

(t)            the existence of, or the performance by the Borrower orany Restricted Subsidiary of their obligations, if any, or obligations ofHoldings under the terms of, any subscription, registration rights orstockholders agreement, partnership agreement, limited liability companyagreement or similar agreement to which Holdings, the Borrower or anyRestricted Subsidiary is a party as of the Effective Date and any similaragreements which the Borrower, any Restricted Subsidiary, Holdings or any otherdirect or indirect parent company of the Borrower may enter into thereafter; provided, however, that the entering intoby the Borrower or any Restricted Subsidiary or the performance by the Borroweror any Restricted Subsidiary of obligations under any future amendment to anysuch existing agreement or under any similar agreement entered into after theEffective Date will only be permitted by this clause to the extent that theterms of any such amendment or new agreement, taken as a whole, are not materiallydisadvantageous to the Lenders, as determined in good faith by the Board ofDirectors, chief executive officer or chief financial officer of the Borrower;

 

(u)           [Reserved];

 

(v)           the entering into of any tax sharing agreement or arrangement;

 

(w)          the issuance of Equity Interests (other than DisqualifiedEquity Interests) in the Issuer or any Restricted Subsidiary for compensationpurposes;

 

(x)            intellectual property licenses in the ordinary course ofbusiness;

 

(y)           transactions in which the Borrower or any RestrictedSubsidiary delivers to the Administrative Agent a letter from an accounting,appraisal or investment banking firm of national standing stating that suchtransaction is fair to the Borrower or such Restricted Subsidiary from afinancial point of view and which are approved by a majority of thedisinterested members of the Board of Directors of the Borrower in good faith.

 

## SECTION 6.10.            Restrictive Agreements.

##  

### (a)           Subject to clauses (b) through (e) below, theBorrower will not, nor will it permit any Restricted Subsidiary to, directly orindirectly, enter into, incur or permit to exist any agreement or otherconsensual arrangement that prohibits, restricts or imposes any condition upon (i) theability of the Borrower or any Restricted Subsidiary to create, incur or permitto exist any Lien upon any of its property or assets securing the Obligationsor (ii) the ability of any Subsidiary to pay dividends or other distributionswith respect to any shares of its capital stock or to make or repay loans oradvances to the Borrower or any Restricted Subsidiary or to Guarantee theObligations.

###  

### (b)           Section 6.10(a) shall not apply to restrictionsand conditions (i) imposed by law or any regulatory authority or by anyLoan Document or any Bridge Loan Document or documents governing the Take OutNotes or any document governing Indebtedness of a Foreign Subsidiary permittedto be incurred under this Agreement (provided that such restrictionsshall apply only to such Foreign Subsidiary), 

 

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### (ii) existing on the date hereofidentified on Schedule 6.10 (but shall apply to any extension, renewal,amendment or modification, but only to the extent expanding the scope of, anysuch restriction or condition), (iii) contained in agreements relating tothe sale of a Restricted Subsidiary or any other asset pending such sale, providedsuch restrictions and conditions apply only to the Restricted Subsidiary orasset that is to be sold and such sale is permitted hereunder, (iv) imposedby any customary provisions restricting assignment of any agreement enteredinto the ordinary course of business, (v) imposed by any instrument oragreement governing Indebtedness of a Restricted Subsidiary acquired by theBorrower or any of its Restricted Subsidiaries as in effect at the time of suchacquisition (except to the extent such Indebtedness was incurred in connectionwith or in contemplation of such acquisition), which encumbrance or restrictionis not applicable to any Person, or the properties or assets of any suchPerson, other than the Person or any of its Subsidiaries, so acquired (providedthat such Indebtedness was permitted by Section 6.01 to be incurred), (vi) imposedby any instrument or agreement governing Indebtedness (x) of any ForeignSubsidiary and (y) of the Borrower or any Restricted Subsidiary that isincurred or issued subsequent to the Effective Date and is permitted pursuantto Section 6.01 (provided that the restrictions in such Indebtednessare not materially more restrictive in the aggregate than the restrictionscontained in this Agreement or the Bridge Loan Documents or the Borrower’sBoard of Directors determines in good faith that restrictions are not reasonablylikely to have a materially adverse effect on the Borrower’s and/or theSubsidiary Loan Parties’ ability to make principal and interest payments on theLoans), (vii) consisting of Permitted Payment Restrictions, (viii) restrictionsin the Sponsor Management Agreement that require the payment of management feesto the Borrower or one of its Restricted Subsidiaries prior to payment ofdividends or distributions, (ix) customary provisions in joint venture andother similar agreements, including agreements related to the ownership andoperation of surgical facilities, relating solely to such joint venture orfacilities of the Persons who own Equity Interests therein and (x) anyamendments, modifications, restatements, renewals, increases, supplements,refundings, replacements or refinancings of the Indebtedness, preferred stock,Liens, agreements, contracts, licenses, leases, subleases, instruments or obligationsreferred to in any of the foregoing clauses; *provided,however*, that such amendments, modifications, restatements,renewals, increases, supplements, refundings, replacements or refinancings arenot materially more restrictive, taken as a whole (as determined by theBorrower in good faith), than those restrictions contained in the Indebtedness,preferred stock, Liens, agreements, contracts, licenses, leases, subleases,instruments or obligations referred to in the foregoing clauses above, asapplicable prior to such amendment, modification, restatement, renewal,increase, supplement, refunding, replacement or refinancing.

###  

### (c)           Section 6.10(a)(i) shall not apply to (i) restrictionsor conditions imposed by customary provisions in leases, subleases, licensesand sublicenses restricting the assignment thereof or (ii) anyrestrictions imposed by agreements or instruments governing Indebtedness orother obligations permitted to be secured pursuant to Section 6.02 andlimited to the assets subject to thereto.

###  

### (d)           Section 6.10(a)(ii) shall not apply to customaryprovisions in joint venture agreements relating to purchase options, rights offirst refusal or call or similar rights of a third party that owns EquityInterests in such joint venture.

###  

### (e)           Section 6.10(a) shall not apply to reasonableand customary restrictions on distributions regarding timing, reserves,available cash and the like that are contained in the organization documents ofjoint ventures in effect on the date hereof and those hereafter entered into inthe ordinary course of business of the Borrower and its Subsidiaries.

###  

### For the purposes of determining compliancewith this covenant, (i) the priority of any preferred stock in receivingdividends or liquidating distributions prior to dividends or liquidating distributionsbeing paid on common stock shall not be deemed a restriction on the ability tomake distributions 

 

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### onEquity Interests and (ii) a subordination of loans or advances made to theBorrower or a Restricted Subsidiary of the Borrower to other Indebtednessincurred by the Borrower or any such Restricted Subsidiary shall not be deemeda restriction on the ability to make loans or advances.

###  

## SECTION 6.11.            Amendment of Material Documents.  The Borrower will not, nor will it permit anyRestricted Subsidiary to, amend, modify or waive any of its rights under anydocumentation governing any Subordinated Indebtedness.

##  

## SECTION 6.12.            Senior Secured Leverage Ratio.  The Borrower shall not permit the SeniorSecured Leverage Ratio as of the last day of any fiscal quarter set forth belowto be greater than the ratio set forth below opposite such quarter:

 
| **Quarter Ended**                 | ** ** | **Maximum Ratio** |
|----------------------------------------|------------|------------------------|
| March 31,  2008                   |       | 4.25:1.00              |
| June 30,  2008                    |       | 4.25:1.00              |
| September 30,  2008               |       | 4.25:1.00              |
| December 31,  2008                |       | 4.00:1.00              |
| March 31,  2009                   |       | 4.00:1.00              |
| June 30,  2009                    |       | 4.00:1.00              |
| September 30,  2009               |       | 4.00:1.00              |
| December 31,  2009                |       | 3.50:1.00              |
| March 31,  2010                   |       | 3.50:1.00              |
| June 30,  2010                    |       | 3.50:1.00              |
| September 30,  2010               |       | 3.50:1.00              |
| December 31,  2010                |       | 3.00:1.00              |
| March 31,  2011                   |       | 3.00:1.00              |
| June 30,  2011                    |       | 3.00:1.00              |
| September 30,  2011               |       | 3.00:1.00              |
| December 31,  2011                |       | 2.75:1.00              |
| March 31,  2012                   |       | 2.75:1.00              |
| June 30,  2012                    |       | 2.75:1.00              |
| September 30,  2012               |       | 2.75:1.00              |
| December 31,  2012 and thereafter |       | 2.50:1.00              |

 

## SECTION 6.13.            Fiscal Year.  None of the Borrower or any RestrictedSubsidiary will change its fiscal year-end to a date other than December 31or its fiscal quarter-end dates to dates other than the last day of March,June, September and December.

##  

# ARTICLEVII

#  

# Eventsof Default

#  

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

##  

(a)           the Borrower shall fail to pay any principal of any Loanor any reimbursement obligation in respect of any LC Disbursement when and asthe same shall become due and payable, whether at the due date thereof or at adate fixed for prepayment thereof or otherwise;

 

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(b)           (i) the Borrower shall fail to pay any interest onany Loan or fees under Section 2.12 when and as the same shall become dueand payable under this Agreement and such failure shall continue unremedied fora period of three Business Days or (ii) the Borrower shall fail to pay anyother amount (other than an amount referred to in Section 7.01(a) and7.01(b)(i)) payable under this Agreement or any other Loan Document, when andas the same shall become due and payable, and such failure shall continueunremedied for a period of ten Business Days;

 

(c)           any representation or warranty made or deemed made by oron behalf of Holdings, the Borrower or any Subsidiary in or in connection withany Loan Document or any amendment or modification thereof or waiverthereunder, or in any report, certificate, financial statement or otherdocument furnished pursuant to or in connection with any Loan Document or anyamendment or modification thereof or waiver thereunder, shall prove to havebeen incorrect in any material respect when made or deemed made;

 

(d)           the Borrower shall fail to observe or perform anycovenant, condition or agreement contained in Section 5.02, 5.04 (withrespect to the existence of Holdings and the Borrower), 5.11 or in Article VI;

 

(e)           the Borrower or any Subsidiary Loan Party shall fail toobserve or perform any covenant, condition or agreement contained in any LoanDocument (other than those specified in Sections 7.01(a), (b) or (d)), andsuch failure shall continue unremedied for a period of 30 days after noticethereof from the Administrative Agent to the Borrower (which notice will begiven at the request of any Lender);

 

(f)            Holdings, the Borrower or any Restricted Subsidiary shallfail to make any payment (whether of principal or interest) in respect of anyMaterial Indebtedness, when and as the same shall become due and payable (aftergiving effect to any applicable grace period);

 

(g)           any event or condition occurs that results in any MaterialIndebtedness (other than Indebtedness hereunder) becoming due prior to itsscheduled maturity or that enables or permits (after giving effect to anyapplicable grace period) the holder or holders of any Material Indebtedness(other than Indebtedness hereunder) or any trustee or agent on its or theirbehalf to cause any Material Indebtedness (other than Indebtedness hereunder)to become due, or to require the prepayment, repurchase, redemption ordefeasance thereof, prior to its scheduled maturity, provided that thisclause (g) shall not apply to (i) Indebtedness that becomes due as aresult of the voluntary sale or transfer of property or assets (to the extentnot prohibited under this Agreement) or (ii) Indebtedness under the BridgeLoan Credit Agreement becoming due upon, and to the extent of the net cashproceeds of, the issuance of Take Out Notes;

 

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

 

(i)            Holdings, the Borrower or any Restricted Subsidiary shall(i) voluntarily commence any proceeding or file any petition seekingliquidation, reorganization or other relief under 

 

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anyFederal, state or foreign bankruptcy, insolvency, receivership or similar lawnow or hereafter in effect, (ii) consent to the institution of, or fail tocontest in a timely and appropriate manner, any proceeding or petitiondescribed in Section 7.01(h), (iii) apply for or consent to theappointment of a receiver, trustee, custodian, sequestrator, conservator orsimilar official for Holdings, the Borrower or any Restricted Subsidiary or fora substantial part of its assets, (iv) file an answer admitting thematerial allegations of a petition filed against it in any such proceeding, (v) makea general assignment for the benefit of creditors or (vi) take any formalaction for the purpose of effecting any of the foregoing;

 

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

 

(k)           one or more judgments for the payment of money (to theextent not paid or covered by insurance provided by a carrier that has notdenied its obligation to pay such claim in writing) in an aggregate amount inexcess of $10,000,000 shall be rendered against Holdings, the Borrower, anyRestricted Subsidiary or any combination thereof and the same shall remain undischargedfor a period of 30 consecutive days during which execution shall not beeffectively stayed, or any action shall be legally taken by a judgment creditorto attach or levy upon any assets of Holdings, the Borrower or any RestrictedSubsidiary to enforce any such judgment;

 

(l)            an ERISA Event shall have occurred that, in the opinionof the Required Lenders, when taken together with all other ERISA Events thathave occurred, could reasonably be expected to result in liability of theBorrower and the Restricted Subsidiaries in an aggregate amount exceeding$10,000,000 for all periods;

 

(m)          any Lien purported to be created under any SecurityDocument shall cease to be a valid and perfected Lien on any material portionof the Collateral with the priority required by the applicable SecurityDocument, except as a result of the sale or other disposition of the applicableCollateral in a transaction permitted under the Loan Documents or as otherwiseexpressly permitted hereunder;

 

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

 

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

 

(p)           a Change in Control shall occur;

 

then, and in every such event (other than anevent with respect to the Borrower described in Section 7.01(h) or(i)), and at any time thereafter during the continuance of such event, theAdministrative Agent may, and at the request of the Required Lenders shall, bynotice to the Borrower, take either or both of the following actions, at thesame or different times:  (i) terminatethe Commitments, and thereupon the Commitments shall terminate immediately, and(ii) declare the Loans then outstanding to be due and payable in whole (orin part, in which case any principal not so declared to be due and payable maythereafter be declared to be due and payable), and thereupon the principal ofthe Loans so declared to be due and payable, together with accrued interestthereon and all fees and other obligations of the Borrower accrued 

 

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hereunder, shall become due and payableimmediately, 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 withrespect to the Borrower described in Section 7.01(h) or (i), the Commitmentsshall automatically terminate and the principal of the Loans then outstanding,together with accrued interest thereon and all fees and other obligations ofthe Borrower accrued hereunder, shall automatically become due and payable,without presentment, demand, protest or other notice of any kind, all of whichare 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 theFinancial Performance Covenant, until the expiration of the tenth daysubsequent to the date on which financial statements with respect to the fiscalperiod for which the Financial Performance Covenant is being measured arerequired to be delivered pursuant to Section 5.01, Holdings shall have theright to issue Qualified Equity Interests (the “Cure Right”), and uponthe receipt by the Borrower of cash (such amount of cash being referred to asthe “Cure Amount”) pursuant to the exercise by Holdings of such Cure Right,the Financial Performance Covenant shall be recalculated giving effect to thefollowing pro forma adjustments:

###  

#### (i)            Consolidated EBITDAshall be increased, solely for the purpose of determining the existence of aDefault or Event of Default under the Financial Performance Covenant with respectto any period of four consecutive fiscal quarters that includes the fiscalquarter for which the Cure Right was exercised and not for any other purposeunder this Agreement, by an amount equal to the Cure Amount; and

####  

#### (ii)           if, after givingeffect to the foregoing recalculations, the Borrower shall then be incompliance with the requirements of the Financial Performance Covenant(including for purposes of Section 4.02), the Borrower shall be deemed tohave satisfied the requirements of the Financial Performance Covenant as of therelevant date of determination with the same effect as though there had been nofailure to comply therewith at such date, and the applicable breach or defaultof the Financial Performance Covenant that had occurred shall be deemed curedfor the purposes of this Agreement.

####  

### (b)           Notwithstanding anything herein to the contrary, (a) ineach four fiscal quarter period there shall be a period of at least two fiscalquarters in which no Cure Right is made, (b) all Cure Amounts shall bedisregarded for purposes of determining any items in this Agreement (includingbasket sizes) dependent upon equity contributions or offerings and (c) theCure Amount shall be no greater than the amount required to cause Borrower tobe in compliance with the Financial Performance Covenant.

###  

## SECTION 7.03.            Exclusion of ImmaterialSubsidiaries.  Solely for thepurposes of determining whether a Default has occurred under Section 7.01(h) or(i), any reference in any such clause to any Restricted Subsidiary shall bedeemed not to include any Restricted Subsidiary affected by any event orcircumstance referred to in any such clause that did not, as of the last day ofthe fiscal quarter of the Borrower most recently ended, have assets with avalue in excess of 5% of the consolidated total assets of the Borrower and theRestricted Subsidiaries or 5% of the total revenues of the Borrower and the RestrictedSubsidiaries as of such date; provided that if it is necessary toexclude more than one Restricted Subsidiary from Section 7.01(h) or (i) pursuantto this Section 7.03 in order to avoid an Event of Default thereunder, allexcluded Restricted Subsidiaries shall be considered to be a singleconsolidated Restricted Subsidiary for purposes of determining whether thecondition specified above is satisfied.

 

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# ARTICLEVIII

#  

# TheAgents

#  

## SECTION 8.01.            The Agents.  Each of the Lenders and the Issuing Bankhereby irrevocably appoints the Administrative Agent as its agent andauthorizes the Administrative Agent to take such actions on its behalf and toexercise such powers as are delegated to the Administrative Agent by the termsof the Loan Documents, together with such actions and powers as are reasonablyincidental thereto.  For purposes of thisArticle VIII, all references to the Administrative Agent shall be deemedto be references to both the Administrative Agent and the Collateral Agent.

 

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

 

The Administrative Agent shall not have any dutiesor obligations except those expressly set forth in the Loan Documents.  Without limiting the generality of theforegoing, (a) the Administrative Agent shall not be subject to anyfiduciary or other implied duties, regardless of whether a Default has occurredand is continuing, (b) the Administrative Agent shall not have any duty totake any discretionary action or exercise any discretionary powers, exceptdiscretionary rights and powers expressly contemplated by the Loan Documentsthat the Administrative Agent is required to exercise in writing as directed bythe Required Lenders (or such other number or percentage of the Lenders asshall be necessary under the circumstances as provided in Section 2.05(j) andSection 9.02), and (c) except as expressly set forth in the LoanDocuments, the Administrative Agent shall not have any duty to disclose, andshall not be liable for the failure to disclose, any information relating toHoldings, the Borrower or any of the Subsidiaries that is communicated to orobtained by the bank serving as Administrative Agent or any of its Affiliatesin any capacity.  The AdministrativeAgent shall not be liable for any action taken or not taken by it with theconsent or at the request of the Required Lenders (or such other number orpercentage of the Lenders as shall be necessary under the circumstances asprovided in Section 2.05(j) or Section 9.02) or in the absenceof its own gross negligence or willful misconduct.  The Administrative Agent shall be deemed notto have knowledge of any Default unless and until written notice thereof isgiven to the Administrative Agent by Holdings, the Borrower or a Lender, andthe Administrative Agent shall not be responsible for or have any duty toascertain or inquire into (i) any statement, warranty or representationmade in or in connection with any Loan Document, (ii) the contents of anycertificate, report or other document delivered thereunder or in connectiontherewith, (iii) the performance or observance of any of the covenants,agreements or other terms or conditions set forth in any Loan Document, (iv) thevalidity, enforceability, effectiveness or genuineness of any Loan Document orany other agreement, instrument or document, or (v) the satisfaction ofany condition set forth in Article IV or elsewhere in any Loan Document,other than to confirm receipt of items expressly required to be delivered tothe Administrative Agent.

 

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

 

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The Administrative Agent may perform any and all itsduties and exercise its rights and powers by or through any one or moresubagents appointed by the Administrative Agent.  The Administrative Agent and any suchsubagent may perform any and all its duties and exercise its rights and powersthrough their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply toany such subagent and to the Related Parties of each Administrative Agent andany such subagent, and shall apply to their respective activities in connectionwith the syndication of the credit facilities provided for herein as well asactivities as Administrative Agent.

 

Each of the Lenders, the Issuing Bank and the LoanParties agree that the Administrative Agent may, subject to Section 9.01(b),but shall not be obligated to, make the Approved Electronic Communications availableto the Lenders and the Issuing Bank by posting such Approved ElectronicCommunications on IntraLinksTM or a substantially similar secure electronicplatform chosen by the Administrative Agent to be its electronic transmissionsystem (the “Approved Electronic Platform”) and each of the Loan Partiesagrees to make the Approved Electronic Communications available to the AdministrativeAgent in an acceptable soft copy or electronic format.

 

Although the Approved Electronic Platform and itsprimary web portal are secured with generally-applicable security proceduresand policies implemented or modified by the Administrative Agent from time totime (including, as of the Effective Date, a dual firewall and a UserID/Password Authorization System) and the Approved Electronic Platform issecured through a single-user-per-deal authorization method whereby each usermay access the Approved Electronic Platform only on a deal-by-deal basis, eachof the Lenders and the Issuing Bank and the Loan Parties acknowledge and agreethat the distribution of material through an electronic medium is notnecessarily secure and that there are confidentiality and other risksassociated with such distribution.  Inconsideration for the convenience and other benefits afforded by suchdistribution and for the other consideration provided hereunder, the receiptand sufficiency of which is hereby acknowledged, each of the Lenders, the LoanParties and the Issuing Bank hereby approve distribution of the ApprovedElectronic Communications through the Approved Electronic Platform and understandsand assumes the risks of such distribution.

 

The Approved Electronic Communications and theApproved Electronic Platform are provided “as is” and “as available”.  None of the Administrative Agent or any ofits Affiliates or any of their respective officers, directors, employees,agents, advisors or representatives (the “Agent Affiliates”) warrant theaccuracy, adequacy or completeness of the Approved Electronic Communicationsand the Approved Electronic Platform and each expressly disclaims liability forerrors or omissions in the Approved Electronic Communications and the ApprovedElectronic Platform.  No warranty of anykind, express, implied or statutory (including, without limitation, anywarranty of merchantability, fitness for a particular purpose, noninfringementof third party rights or freedom from viruses or other code defects) is made bythe Agent Affiliates in connection with the Approved Electronic Communicationsor the Approved Electronic Platform.

 

Each of the Lenders, the Issuing Bank, and the LoanParties agrees that the Administrative Agent may, but (except as may berequired by applicable law) shall not be obligated to, store the ApprovedElectronic Communications on the Approved Electronic Platform in accordancewith the Administrative Agent’s generally-applicable document retentionprocedures and policies.

 

The Administrative Agent may resign at any time bynotifying the Lenders, the Issuing Bank and the Borrower.  Upon any such resignation, the RequiredLenders shall have the right, with the consent of the Borrower, to appoint asuccessor.  If no successor shall havebeen so appointed by the Required Lenders and shall have accepted suchappointment within 30 days after the retiring Administrative Agent gives noticeof its resignation, then the retiring Administrative Agent may, on behalf ofthe Lenders 

 

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and the Issuing Bank, appoint a successor AdministrativeAgent which shall be a bank with an office in New York, New York, or anAffiliate of any such bank.  Upon theacceptance 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 retiringAdministrative Agent shall be discharged from its duties and obligationshereunder.  The fees payable by the Borrowerto a successor Administrative Agent shall be the same as those payable to itspredecessor unless otherwise agreed between the Borrower and suchsuccessor.  After the AdministrativeAgent’s resignation hereunder, the provisions of this Article and Section 9.03shall continue in effect for the benefit of such retiring Administrative Agent,its subagents and their respective Related Parties in respect of any actionstaken or omitted to be taken by any of them while it was acting as AdministrativeAgent.

 

Each Lender acknowledges that it has, independentlyand without reliance upon the Administrative Agent or any other Lender andbased on such documents and information as it has deemed appropriate, made itsown 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 otherLender and based on such documents and information as it shall from time totime deem appropriate, continue to make its own decisions in taking or nottaking action under or based upon this Agreement, any other Loan Document orrelated agreement or any document furnished hereunder or thereunder.  The Lenders identified in this Agreement asthe Syndication Agent and the Documentation Agents shall not have any right,power, obligation, liability, responsibility or duty under this Agreement otherthan those applicable to all Lenders. Without limiting the foregoing, neither the Syndication Agent nor theDocumentation Agents shall have or be deemed to have a fiduciary relationshipwith any Lender.

 

# ARTICLEIX

#  

# Miscellaneous

#  

## SECTION 9.01.            Notices.

##  

### (a)           Except in the case of notices and other communicationsexpressly permitted to be given by telephone, all notices and othercommunications provided for herein shall be in writing and shall be deliveredby hand or overnight courier service, mailed by certified or registered mail orsent by telecopy, as follows:

###  

#### (i)            if to the Borrower,to:

####  

| Symbion, Inc.                                   |
|------------------------------------------------------|
| 40 Burton Hills Blvd.                                |
| Suite 500                                       |
| Nashville, TN 37215                                  |
| Attention: Teresa F. Sparks, Chief Financial Officer |
| (Telecopy No. (615) 234-7994)                   |
|                                                 |
| with a copy to:                                      |
| Derek Bell, Assistant Vice President of Finance      |
| (Telecopy No. (615) 234-5998);                  |
|                                                 |
| with a copy (which shall not constitute notice) to:  |

 

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|                                        |
|---------------------------------------------|
| Waller Lansden Dortch & Davis, LLP |
| 511 Union Street, Suite 2700           |
| Nashville, TN 37219                         |
| Attention: Robert L. Harris, Esq.      |
| Facsimile: (615) 244-6804;                  |

 

#### (ii)           if to theAdministrative Agent, the Swingline Lender or the Collateral Agent, to:

####  

| For all credit notices:                                                                                                                                                                                                       |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                          |
| Merrill Lynch & Co  4 World Financial Center / 250 Vesey Street  22nd Floor  New York, NY  10080  Attention: Michael E. O’Brian, Director  Telecopy:  (212) 738-1186  Telephone:  (212) 449-0948 |
|                                                                                                                                                                                                                          |
| For all operations notices:                                                                                                                                                                                                   |
|                                                                                                                                                                                                                          |
| Merrill Lynch Capital  Corporation                                                                                                                                                                                            |
| (c/o BNY Asset Solutions)                                                                                                                                                                                                     |
| 600 East Las Colinas  Blvd., Suite 1300                                                                                                                                                                                  |
| Irving, TX 75039                                                                                                                                                                                                              |
| Attention: Rachel Suiter,  Agency Services Primary Closer                                                                                                                                                                     |
| Telecopy: (972) 401-8557                                                                                                                                                                                                      |
| Telephone: (972) 401-8588                                                                                                                                                                                                     |

 

#### (iii)          if to the IssuingBank, to:

####  

| Bill Nartker, Manager  Fifth Third Bank  Global Payments Trade Services  5050 Kingsley Drive, MD 1MOCBR  Cincinnati, OH 45227  Tel: 513-358-2126  Fax: 513-358-5950  email: William.nartker@53.com |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

####  

#### (iv)          if to any otherLender, to it at its address (or telecopy number) set forth in its AdministrativeQuestionnaire.

####  

### (b)           Notices and other communications to the Lenders hereundermay be delivered or furnished by electronic communications pursuant toprocedures approved by the Administrative Agent, provided that theforegoing shall not apply to notices to any Lender or the Issuing Bank pursuantto Article II or of a Default if such Lender or the Issuing Bank,as applicable, has notified the Administrative Agent that it is incapable ofreceiving notices under such Article by electronic communication and providedthat the Administrative Agent shall in any event also receive hard copies ofthe notices described in this proviso and, to the extent requested, any otherdocuments delivered electronically under this Agreement.  The Administrative Agent or the Borrower may,in its discretion, agree to accept notices and other 

 

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### communications to it hereunder by electronic communications pursuant toprocedures approved by it, provided that approval of such procedures maybe limited to particular notices or communications.  All such notices and other communications (i) sentto an e-mail address shall be deemed received upon the sender’s receipt of anacknowledgement from the intended recipient (such as by the “return receipt requested”function, as available, return e-mail or other written acknowledgement); providedthat if not given during the normal business hours of the recipient, suchnotice or communication shall be deemed to have been given at the opening ofbusiness on the next Business Day for the recipient, and (ii) posted to anInternet or intranet website shall be deemed received upon the deemed receiptby the intended recipient at its e-mail address as described in the foregoingclause (i) of any required notification that such notice orcommunication is available and identifying the website address therefor.

###  

### (c)           Any party hereto may change its address or telecopy numberfor notices and other communications hereunder by notice to the AdministrativeAgent (and, in the case of the Administrative Agent, by written notice to theBorrower).  All notices and othercommunications given to any party hereto in accordance with the provisions ofthis Agreement shall be deemed to have been given as follows:  notices sent by hand or overnight courierservice, or mailed by certified or registered mail, shall be deemed to havebeen given when received; notices sent by telecopier (with a send successfulnotice) shall be deemed to have been given when sent (except that, if not givenduring normal business hours for the recipient, shall be deemed to have beengiven at the opening of business on the next business day for the recipient).

###  

## SECTION 9.02.            Waivers; Amendments.

##  

### (a)           No failure or delay by the Administrative Agent, theIssuing Bank, the Collateral Agent, the Swingline Lender or any Lender inexercising any right or power hereunder or under any other Loan Document shalloperate as a waiver thereof, nor shall any single or partial exercise of anysuch right or power, or any abandonment or discontinuance of steps to enforcesuch a right or power, preclude any other or further exercise thereof or theexercise 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 underthe other Loan Documents are cumulative and are not exclusive of any rights orremedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departureby any Loan Party therefrom shall in any event be effective unless the sameshall be permitted by Section 9.02(b), and then such waiver or consentshall be effective only in the specific instance and for the purpose for whichgiven.  Without limiting the generalityof the foregoing, the making of a Loan or issuance of a Letter of Credit shallnot be construed as a waiver of any Default, regardless of whether the AdministrativeAgent, any Lender, the Collateral Agent, the Swingline Lender or the IssuingBank may have had notice or knowledge of such Default at the time.

###  

### (b)           Except as provided in Section 2.20 with respect to anIncremental Facility Amendment (or to give effect to any restatement of thisAgreement, the substantive terms of which are otherwise permitted hereby),neither this Agreement nor any other Loan Document nor any provision hereof orthereof may be waived, amended or modified except, in the case of thisAgreement, pursuant to an agreement or agreements in writing entered into byHoldings, the Borrower and the Required Lenders or, in the case of any otherLoan Document, pursuant to an agreement or agreements in writing entered intoby the Administrative Agent and the Loan Party or Loan Parties that are partiesthereto (and, if party thereto, the Collateral Agent), in each case with theconsent of the Required Lenders; provided that no such agreement shall

###  

#### (i)            increase theCommitment of any Lender without the written consent of such Lender,

 

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#### (ii)           reduce theprincipal amount of any Loan or LC Disbursement or reduce the rate of interestthereon, or reduce any fees payable hereunder, without the written consent ofeach Lender affected (other than any waiver of default interest payablepursuant to Section 2.13(c)) thereby (it being understood that a change tothe definition of the Leverage Ratio that could have the effect of reducingsuch interest or fees upon certain conditions shall not be deemed in and ofitself to reduce such interest or fees),

####  

#### (iii)          postpone the finalmaturity of any Loan, or any scheduled date of payment of the principal amountof any Term Loan under Section 2.10, the required date of reimbursement ofany LC Disbursement, or any date for the payment of any interest or feespayable hereunder, or reduce the amount of, waive or excuse any such payment,or postpone the scheduled date of expiration of any Commitment, without thewritten consent of each Lender affected thereby,

####  

#### (iv)          change Section 2.18(b) or(c) in a manner that would alter the proratasharing of payments required thereby, without the written consent of eachLender,

####  

#### (v)           change any of theprovisions of this Section 9.02 or the percentage set forth in thedefinition of “Required Lenders” or any other provision of any Loan Documentspecifying the number or percentage of Lenders (or Lenders of any Class)required to waive, amend or modify any rights thereunder or make anydetermination or grant any consent thereunder, without the written consent ofeach Lender (or each Lender of such Class, as applicable),

####  

#### (vi)          release Holdings orsubstantially all Subsidiary Loan Parties from their Guarantee under theCollateral Agreement (except as provided in Section 9.15 or in theCollateral Agreement) or limit liability of Holdings or of substantially allSubsidiary Loan Parties in respect of such Guarantee, without the writtenconsent of each Lender,

####  

#### (vii)         release all orsubstantially 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,

####  

#### (viii)        change anyprovisions of any Loan Document in a manner that by its terms adversely affectsthe rights in respect of payments due to Lenders holding Loans of any Class differentlythan those holding Loans of any other Class, without the written consent ofLenders holding a majority in interest of the outstanding Loans and unusedCommitments of each adversely affected Class, or

####  

#### (ix)           modify thedefinition of “Interest Period” to allow periods of more than twelve monthswithout regard to the agreement of all participating Lenders, without thewritten consent of each Lender;

####  

provided, further,that (A) no such agreement shall amend, modify or otherwise affect the rightsor duties of the Administrative Agent, the Issuing Bank or the Swingline Lenderwithout the prior written consent of the Administrative Agent, the Issuing Bankor the Swingline Lender, as applicable, (B) any waiver, amendment ormodification of this Agreement that by its terms affects the rights or duties underthis Agreement of the Revolving Lenders (but not the Term Lenders), theTranche B Lenders (but not the Tranche A Lenders or Revolving Lenders) ,the Tranche A Lenders (but not the Tranche B Lenders or RevolvingLenders), or the Term Lenders (but not the Revolving Lenders) may be effectedby an agreement or agreements in writing entered into by Holdings, the Borrowerand requisite percentage in interest of the affected Class(es) of Lenders thatwould be required to consent thereto under this Section 9.02(b) if

 

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such Class(es) of Lenders were the onlyClass(es) of Lenders hereunder at the time and (C) if the AdministrativeAgent and the Borrower shall have jointly identified an obvious error or anyerror or omission of a technical or immaterial nature in any provision of theLoan Documents, then the Administrative Agent and the Borrower shall bepermitted to amend such provision and such amendment shall become effectivewithout any further action or consent of any other party to any Loan Documentif the same is not objected to in writing by the Required Lenders within five (5) BusinessDays notice thereof.  In connection withany proposed amendment, modification, waiver or termination (a “ProposedChange”) requiring the consent of all affected Lenders, if the consent ofthe Required Lenders (and, to the extent any Proposed Change requires theconsent of Lenders holding Loans of any Class pursuant to Section 9.02(b)(viii),the consent of not less than a majority in interest of the outstanding Loansand unused Commitments of such Class) to such Proposed Change is obtained, butthe consent to such Proposed Change of other Lenders whose consent is requiredis not obtained (any such Lender whose consent is not obtained as described inthis 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 aNon-Consenting Lender, at the Borrower’s request, any assignee that is acceptableto the Administrative Agent shall have the right, with the Administrative Agent’sconsent, to purchase from such Non-Consenting Lender, and such Non-ConsentingLender agrees that it shall, upon the Borrower’s request, sell and assign tosuch assignee, at no expense to such Non-Consenting Lender, all theCommitments, Term Loans and Revolving Exposure of such Non-Consenting Lenderfor an amount equal to the principal balance of all Term Loans and RevolvingLoans (and funded participations in Swingline Loans and unreimbursed LCDisbursements) held by such Non-Consenting Lender and all accrued interest andfees with respect thereto through the date of sale (including amounts underSections 2.15, 2.16 and 2.17) so long as such principal balance of all otherNon-Consenting Lenders is similarly purchased, such purchase and sale to beconsummated pursuant to an executed Assignment and Assumption in accordancewith Section 9.04(b) (which Assignment and Assumption need not besigned by such Non-Consenting Lender).

 

### (c)           Notwithstanding the provisions of Section 9.02(b),this Agreement may be amended (or amended and restated) with the writtenconsent of the Required Lenders, the Administrative Agent, Holdings and theBorrower (i) to add one or more additional credit facilities to thisAgreement and to permit the extensions of credit from time to time thereunderand the accrued interest and fees in respect thereof to share ratably in thebenefits of this Agreement and the other Loan Documents with the Term Loans andthe Revolving Loans and the accrued interest and fees in respect thereof, and (ii) toinclude appropriately the Lenders holding such credit facilities in anydetermination of the Required Lenders. In addition, this Agreement may be amended with the written consent ofthe Administrative Agent, Holdings, the Borrower and the Lenders providing therelevant Replacement Term Loans (as defined below) to permit the refinancing ofall outstanding Tranche A Term Loans and Tranche B Term Loans (the “RefinancedTerm Loans”) and, if applicable, related outstanding commitments, with areplacement term loan tranche or tranches hereunder (the “Replacement TermLoans”); provided that (i) theaggregate principal amount of such Replacement Term Loans shall not exceed theaggregate principal amount of such Refinanced Term Loans, (ii) theweighted average Applicable Rate for such Replacement Term Loans shall not behigher than the weighted average Applicable Rate for such Refinanced TermLoans, (iii) the weighted average life to maturity of such ReplacementTerm Loans shall not be shorter than the weighted average life to maturity ofsuch Refinanced Term Loans at the time of such refinancing (except to the extentof nominal amortization for periods where amortization has been eliminated as aresult of prepayment of the Refinanced Term Loans) and (iv) all otherterms applicable to such Replacement Term Loans shall be substantiallyidentical to, or less favorable to the Lenders providing such Replacement TermLoans than, those applicable to such Refinanced Term Loans, except to theextent necessary to provide for covenants and other terms applicable to anyperiod after the latest final maturity of the Refinanced Term Loans in effect immediatelyprior to such refinancing.

 

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##  

## SECTION 9.03.            Expenses; Indemnity; DamageWaiver.

##  

### (a)           The Borrower shall pay (i) all reasonableout-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 forherein, the preparation and administration of the Loan Documents or anyamendments, modifications or waivers of the provisions thereof (whether or notthe transactions contemplated hereby or thereby shall be consummated), (ii) allreasonable out-of-pocket expenses incurred by the Issuing Bank in connectionwith the issuance, amendment, renewal or extension of any Letter of Credit orany demand for payment thereunder and (iii) all out-of-pocket expensesincurred by the Administrative Agent, the Issuing Bank or any Lender, includingthe fees, charges and disbursements of any counsel for the AdministrativeAgent, the Issuing Bank or any Lender, in connection with the enforcement of itsrights in connection with the Loan Documents, including its rights under this Section 9.03,or in connection with the Loans made or Letters of Credit issued hereunder,including all such reasonable out-of-pocket expenses incurred during anyworkout or restructuring in respect of such Loans or Letters of Credit.

###  

### (b)           The Borrower shall indemnify the Administrative Agent,each Agent, the Issuing Bank and each Lender, and each Related Party of any ofthe foregoing Persons (each such Person being called an “Indemnitee”),and hold each Indemnitee harmless, from and against any and all losses, claims,damages, liabilities and related expenses, including the fees, charges anddisbursements of any counsel for any Indemnitee, incurred by or assertedagainst any Indemnitee arising out of, in connection with, or as a result of (i) theexecution or delivery of any Loan Document or any other agreement or instrumentcontemplated hereby, the performance by the parties to the Loan Documents oftheir respective obligations thereunder or the consummation of the Transactionsor any other transactions contemplated hereby, (ii) any Loan or Letter ofCredit or the use of the proceeds therefrom (including any refusal by theIssuing Bank to honor a demand for payment under a Letter of Credit if thedocuments presented in connection with such demand do not strictly comply withthe terms of such Letter of Credit), (iii) any actual or alleged presenceor Release of Hazardous Materials on, at, under or emanating from any MortgagedProperty or any other property currently or formerly owned or operated by theBorrower or any of its Subsidiaries, or any actual or alleged EnvironmentalLiability related in any way to the Borrower or any of its Subsidiaries, or (iv) anyactual or prospective claim, litigation, investigation or proceeding relatingto any of the foregoing, whether based on contract, tort or any other theoryand regardless of whether any Indemnitee is a party thereto or such litigation,claim, investigation or proceeding is brought by a third party or by theBorrower or its Affiliates, provided that such indemnity shall not, asto any Indemnitee, be available to the extent that such losses, claims,damages, liabilities or related expenses (y) are finally judicially determinedby a non-appealable judgment of a court of competent jurisdiction to haveresulted from the gross negligence, bad faith or willful misconduct of, orbreach of the Loan Documents by, such Indemnitee or (z) result from thepresence or Release of Hazardous Materials or an Environmental Liability to theextent such presence, Release or Environmental Liability is caused by suchIndemnitee or first occurs or first exists after completion of the foreclosureupon the Collateral, granting a deed-in-lieu of foreclosure with respect to theCollateral or similar transfer of title or possession of the Collateral.

###  

### (c)           To the extent that the Borrower fails to pay any amountrequired to be paid by it to the Administrative Agent, each Agent, the IssuingBank or the Swingline Lender under Sections 9.03(a) or (b), each Lenderseverally agrees to pay to the Administrative Agent, such Agent, the IssuingBank or the Swingline Lender, as applicable, such Lender’s proratashare (determined as of the time that the applicable unreimbursed expense orindemnity payment is sought) of such unpaid amount, provided that theunreimbursed expense or indemnified loss, claim, damage, liability or relatedexpense, as applicable, was incurred by or asserted against the AdministrativeAgent, the Issuing Bank or the Swingline Lender in its capacity as such.  For purposes hereof, a Lender’s “pro ratashare” shall be determined based 

 

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### upon its share of the aggregate RevolvingExposures, outstanding Term Loans and unused Commitments at the time.

###  

### (d)           To the extent permitted by applicable law, neitherHoldings nor the Borrower shall assert, and each hereby waives, any claimagainst any Indemnitee, on any theory of liability, for special, indirect, consequentialor punitive damages (as opposed to direct or actual damages) arising out of, inconnection with, or as a result of, this Agreement or any agreement orinstrument contemplated hereby, the Transactions, any Loan or Letter of Creditor the use of the proceeds thereof.

###  

### (e)           All amounts due under this Section 9.03 shall bepayable not later than ten Business Days after written demand therefor.

###  

## SECTION 9.04.            Successors and Assigns.

##  

### (a)           The provisions of this Agreement shall be binding upon andinure to the benefit of the parties hereto and their respective successors andassigns permitted hereby (including any Affiliate of the Issuing Bank thatissues any Letter of Credit), except that (i) the Borrower may not assignor otherwise transfer any of its rights or obligations hereunder without theprior written consent of each Lender (and any attempted assignment or transferby the Borrower without such consent shall be null and void) except inconnection with any transaction permitted in accordance with Section 6.03(a)(i) and(ii) no Lender may assign or otherwise transfer its rights or obligationshereunder except in accordance with this Section 9.04.  Nothing in this Agreement, express orimplied, shall be construed to confer upon any Person (other than the partieshereto, their respective successors and assigns permitted hereby (including anyAffiliate of the Issuing Bank that issues any Letter of Credit), Participants(to the extent provided in Section 9.04(c)) and, to the extent expresslycontemplated hereby, the Related Parties of each of the Administrative Agent,the Issuing Bank and the Lenders) any legal or equitable right, remedy or claimunder or by reason of this Agreement.

###  

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

###  

(1)           the Borrower, provided that no consent of theBorrower shall be required for an assignment to a Lender, an Affiliate of aLender, an Approved Fund (as defined below) or, if an Event of Default under Section 7.01(a),(b), (h), (i) or (j) has occurred and is continuing, any other assignee;

 

(2)           the Administrative Agent, provided that no consentof the Administrative Agent shall be required for an assignment of all or anyportion of a Term Loan to a Lender, an Affiliate of a Lender or an ApprovedFund; and

 

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

 

(ii)           Assignments shall be subject to thefollowing conditions:

 

(1)           except in the case of an assignment to a Lender or anAffiliate of a Lender or an assignment of the entire remaining amount of theassigning Lender’s Commitment or Loans of any Class, the amount of theCommitment or Loans of the assigning Lender subject to each such 

 

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assignment (determined as ofthe date the Assignment and Assumption with respect to such assignment isdelivered to the Administrative Agent) shall not be less than $5,000,000 or, inthe case of a Term Loan, $1,000,000, unless each of the Borrower and theAdministrative Agent otherwise consents; provided that no such consentof the Borrower shall be required (x) for an assignment by a Lender to anApproved Fund of a Lender or (y) if an Event of Default has occurred andis continuing, and that contemporaneous assignments to Approved Funds relatedto the same Lender shall be aggregated when calculating such minimum assignmentamounts;

 

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

 

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

 

(4)           the assignee, if it is not already a Lender, shall deliverto the Administrative Agent an Administrative Questionnaire.

 

For purposes of this Section 9.04(b):

 

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

 

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

 

(iii)          Subject to acceptance and recording thereof pursuant to Section 9.04(b)(iv),from and after the effective date specified in each Assignment and Assumptionthe assignee thereunder shall be a party hereto and, to the extent of theinterest assigned by such Assignment and Assumption, have the rights and obligationsof a Lender under this Agreement, and the assigning Lender thereunder shall, tothe extent of the interest assigned by such Assignment and Assumption, bereleased from its obligations under this Agreement (and, in the case of anAssignment and Assumption covering all the assigning Lender’s rights andobligations under this Agreement, such Lender shall cease to be a party heretobut shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and9.03).  Any assignment or transfer by aLender of rights or obligations under this Agreement that does not comply withthis Section 9.04 shall be treated for purposes of this Agreement as asale by such Lender of a participation in such rights and obligations in accordancewith Section 9.04(c).

 

 (iv)          TheAdministrative Agent, acting for this purpose as an agent of the Borrower,shall maintain at one of its offices a register for the recordation of thenames and addresses of the Lenders, and the Commitment of, and principal amountof the Loans and LC Disbursements owing to, each Lender pursuant to the termshereof from time to time (the “Register”).  The entries in the Register shall beconclusive, and the Borrower, the Administrative Agent, the Issuing Banks andthe Lenders may treat each Person whose name is recorded in the Registerpursuant to the terms hereof as a Lender hereunder 

 

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for all purposes of this Agreement, notwithstandingnotice to the contrary.  The Registershall be available for inspection by the Borrower, the Issuing Banks and anyLender, at any reasonable time and from time to time upon reasonable priornotice.

 

(v)           Upon its receipt of a duly completed Assignment andAssumption executed by an assigning Lender and an assignee, the assignee’scompleted Administrative Questionnaire (unless the assignee shall already be aLender hereunder), the processing and recordation fee referred to in Section 9.04(b) andany written consent to such assignment required by Section 9.04(b), theAdministrative Agent shall accept such Assignment and Assumption and record theinformation contained therein in the Register. No assignment shall be effective for purposes of this Agreement unlessit has been recorded in the Register as provided in this paragraph.

 

### (c)           (i)  Any Lender may, without the consent of theBorrower, 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 thisAgreement (including all or a portion of its Commitment and the Loans owing toit), provided that (A) such Lender’s obligations under thisAgreement shall remain unchanged, (B) such Lender shall remain solelyresponsible to the other parties hereto for the performance of such obligationsand (C) the Borrower, the Administrative Agent, the Issuing Bank and theother Lenders shall continue to deal solely and directly with such Lender inconnection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to whicha Lender sells such a participation shall provide that such Lender shall retainthe sole right to enforce this Agreement and to approve any amendment,modification or waiver of any provision of this Agreement, provided thatsuch agreement or instrument may provide that such Lender will not, without theconsent of the Participant, agree to any amendment, modification or waiverdescribed in the first proviso to Section 9.02(b) that affects suchParticipant.  Each Lender that sells a participationshall, acting solely for this purpose as a non-fiduciary agent of Borrower,maintain a register on which it enters the name and address of each Participantand the principal and interest amounts of eachParticipant’s interest in the Loans held by it (the “Participant Register”).  The entries in the Participant Register shallbe conclusive, absent manifest error, and such Lender shall treat each Personwhose name is recorded in the Participant Register as the owner of such Loan orother obligation hereunder for all purposes of this Agreement notwithstandingany notice to the contrary.  Subject to Section 9.04(c)(ii),the Borrower agrees that each Participant shall be entitled to the benefits ofSections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and hadacquired its interest by assignment pursuant to Section 9.04(b).  To the extent permitted by law, each Participantalso shall be entitled to the benefits of Section 9.08 as though it were aLender, provided such Participant agrees to be subject to Section 2.18(c) asthough it were a Lender.

###  

### (ii)           A Participant shall not be entitled to receive any greaterpayment under Section 2.15 or 2.17 than the applicable Lender would havebeen entitled to receive with respect to the participation sold to suchParticipant except to the extent that the entitlement to any greater paymentresults from any change in Requirement of Law after theparticipant becomes a Participant and, for the avoidance of doubt, theapplicable Lender would have been entitled to receive such greater payment as aresult of such change in Requirement of Law, unless the sale of theparticipation to such Participant is made with the Borrower’s prior writtenconsent.  A Participant that would be aForeign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17unless the Borrower is notified of the participation sold to such Participantand such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) asthough it were a Lender.

 

 (iii)          Any Lender mayat any time pledge, assign or grant a security interest in all or any portionof its rights under this Agreement to secure obligations of such Lender,including any pledge, 

 

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assignment or grant to secure obligations to aFederal Reserve Bank, and this Section 9.04 shall not apply to any suchpledge, assignment or grant of a security interest, provided that nosuch pledge, assignment or grant of a security interest shall release a Lenderfrom any of its obligations hereunder or substitute any such pledge or assigneefor such Lender as a party hereto.

##  

## SECTION 9.05.            Survival.  All covenants, agreements, representationsand warranties made by the Loan Parties in the Loan Documents and in thecertificates or other instruments delivered in connection with or pursuant tothis Agreement or any other Loan Document shall have independent significanceand be considered to have been relied upon by the other parties hereto andshall survive the execution and delivery of the Loan Documents and the makingof any Loans and issuance of any Letters of Credit, regardless of any investigationmade by any such other party or on its behalf and notwithstanding that theAdministrative Agent, the Issuing Bank or any Lender may have had notice orknowledge of any Default or incorrect representation or warranty at the timeany credit is extended hereunder, and shall continue in full force and effectas long as the principal of or any accrued interest on any Loan or any fee orany other amount payable under this Agreement is outstanding and unpaid or anyLetter of Credit is outstanding and so long as the Commitments have not expiredor terminated.  The provisions ofSections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive andremain in full force and effect regardless of the consummation of the transactionscontemplated hereby, the repayment of the Loans, the expiration or terminationof the Letters of Credit and the Commitments or the termination of thisAgreement or any provision hereof.

##  

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

##  

## SECTION 9.07.            Severability.  Any provision of this Agreement held to beinvalid, illegal or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such invalidity, illegality orunenforceability without affecting the validity, legality and enforceability ofthe remaining provisions hereof; and the invalidity of a particular provisionin a particular jurisdiction shall not invalidate such provision in any otherjurisdiction.

##  

## SECTION 9.08.            Right of Setoff.  If any Event of Default under Section 7.01(a) or(b) shall have occurred and be continuing, each Lender and each of itsAffiliates is hereby authorized at any time and from time to time, to thefullest 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 andother obligations at any time owing by such Lender or Affiliate to or for thecredit or the account of the Borrower against any of and all the obligations ofthe Borrower now or hereafter existing under this Agreement then due and owingheld by such Lender, irrespective of whether or not such Lender shall have madeany demand under this Agreement.  Theapplicable Lender shall notify the Borrower and the Administrative Agent ofsuch setoff or application, provided that any failure to give or anydelay in giving such notice shall not affect

 

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##  thevalidity of any such setoff or application under this Section 9.08.  The rights of each Lender under this Section 9.08are in addition to other rights and remedies (including other rights of setoff)which such Lender may have.

##  

## SECTION 9.09.            Governing Law; Jurisdiction; Consentto Service of Process.

##  

### (a)           **This Agreement shall beconstrued in accordance with and governed by the law of the State of New York.**

### ** **

### (b)           **Each of Holdings and theBorrower hereby irrevocably and unconditionally submits, for itself and itsproperty, to the nonexclusive jurisdiction of the Supreme Court of the State ofNew York sitting in New York County and of the United States District Court ofthe Southern District of New York, and any appellate court from any thereof, inany action or proceeding arising out of or relating to any Loan Document, orfor recognition or enforcement of any judgment, and each of the parties heretohereby irrevocably and unconditionally agrees that all claims in respect of anysuch action or proceeding may be heard and determined in such New York Stateor, to the extent permitted by law, in such Federal court.  Each of the parties hereto agrees that afinal judgment in any such action or proceeding shall, to the fullest extent permittedby laws, be conclusive and may be enforced in other jurisdictions by suit onthe judgment or in any other manner provided by law.  Nothing in this Agreement or any other LoanDocument shall affect any right that the Administrative Agent, the Issuing Bankor any Lender may otherwise have to bring any action or proceeding relating tothis Agreement or any other Loan Document against Holdings, the Borrower ortheir respective properties in the courts of any jurisdiction.**

### ** **

### (c)           Each of Holdings and the Borrower hereby irrevocably andunconditionally waives, to the fullest extent it may legally and effectively doso, any objection that it may now or hereafter have to the laying of venue ofany suit, action or proceeding arising out of or relating to this Agreement orany other Loan Document in any court referred to in Section 9.09(b).  Each of the parties hereto hereby irrevocablywaives, to the fullest extent permitted by law, the defense of an inconvenientforum to the maintenance of such action or proceeding in any such court.

###  

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

###  

## SECTION 9.10.            WAIVER OF JURY TRIAL.  EACH PARTY HERETO HEREBY WAIVES, TO THEFULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO ATRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF ORRELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONSCONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NOREPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLYOR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEKTO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHERPARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHERTHINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.10.

 

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

##  

## SECTION 9.12.            Confidentiality.  Each of the Administrative Agent, the IssuingBanks and the Lenders agrees to maintain the confidentiality of the Information(as defined below), except that Information may be disclosed (a) to itsand its Affiliates’ directors, trustees, officers, employees and agents,including accountants, legal counsel and other advisors (it being understoodthat the Persons to whom such disclosure is made will be informed of theconfidential nature of such Information and instructed to keep such Informationconfidential), (b) to the extent requested by any regulatory authority orself-regulatory authority, (c) to the extent required by applicable lawsor regulations or by any subpoena or similar legal process, (d) to anyother party to this Agreement, (e) in connection with the exercise of anyremedies hereunder or any suit, action or proceeding relating to this Agreementor any other Loan Document or the enforcement of rights hereunder or thereunder,(f) subject to an agreement containing provisions substantially the sameas those of this Section 9.12, to (i) any assignee or pledgee of orParticipant in, or any prospective assignee or pledgee of or Participant in,any of its rights or obligations under this Agreement or (ii) any actualor prospective counterparty (or its advisors) to any swap or derivativetransaction relating to the Borrower and its obligations, (g) with theconsent of the Borrower or (h) to the extent such Information (i) becomespublicly available other than as a result of a breach of this Section 9.12or (ii) becomes available to the Administrative Agent, any Issuing Bank orany Lender on a nonconfidential basis from a source other than Holdings or theBorrower or any of their subsidiaries, provided that such source is notactually known by such disclosing party to be bound by an agreement containingprovisions substantially the same as those contained in this Section 9.12.  For the purposes of this Section 9.12,the term “Information” means all information received from Holdings orthe Borrower relating to Holdings or the Borrower or its business, other thanany such information that is available to the Administrative Agent, any IssuingBank or any Lender on a nonconfidential basis prior to disclosure by Holdingsor the Borrower.  Any Person required tomaintain the confidentiality of Information as provided in this Section 9.12shall be considered to have complied with its obligation to do so if suchPerson has exercised the same degree of care to maintain the confidentiality ofsuch 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 allfees, charges and other amounts that are treated as interest on such Loan underapplicable law (collectively, the “Charges”), shall exceed the maximumlawful rate (the “Maximum Rate”) that may be contracted for, charged,taken, received or reserved by the Lender holding such Loan in accordance withapplicable law, the rate of interest payable in respect of such Loan hereunder,together with all Charges payable in respect thereof, shall be limited to theMaximum Rate and, to the extent lawful, the interest and Charges that wouldhave been payable in respect of such Loan but were not payable as a result ofthe operation of this Section 9.13 shall be cumulated and the interest andCharges payable to such Lender in respect of other Loans or periods shall beincreased (but not above the Maximum Rate therefor) until such cumulatedamount, together with interest thereon at the Federal Funds Effective Rate tothe date of repayment, shall have been received by such Lender.

##  

## SECTION 9.14.            USA Patriot Act.  Each Lender, each Agent and the Issuing Bankhereby notifies the Borrower that pursuant to the requirements of the Unitingand Strengthening America by Providing Appropriate Tools Required to Interceptand Obstruct Terrorism Act of 2001, Public Law 107-56 (the “USA Patriot Act”),it is required to obtain, verify and record information that identifies theBorrower, which information includes the name and address of the Borrower andother information that will allow such Person to identify the Borrower in accordancewith the USA Patriot Act.

 

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## SECTION 9.15.            Release of Guarantee andCollateral.  Upon any sale or othertransfer of any Loan Party or by any Loan Party of any Collateral that ispermitted under this Agreement, or upon the effectiveness of any writtenconsent to the release of any Guarantee or the security interest granted herebyin any Collateral pursuant to Section 9.02 of this Agreement, suchGuarantee or the Mortgage or other security interest in such Collateral, asapplicable, shall be automatically released and the Collateral Agent isauthorized to, and shall, take any action to effect the foregoing, including,without limitation, executing and delivering to the Borrower, in recordableform, discharges and releases of such Guarantee or such Mortgage or othersecurity interest.

 

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

 
|   | SYMBOL MERGER SUB, INC.,  as the Borrower                                                          |
|--------|----------------------------------------------------------------------------------------------------|
|   |                                                                                               |   |
|   |                                                                                               |   |
|   | By:                                                                                                | /s/ Thomas J.  Murphy, Sr. |
|   |                                                                                               | Name: Thomas J.  Murphy, Sr. |
|   |                                                                                               | Title: Vice President |
|   |                                                                                               |   |
|   |                                                                                               |   |
|   | SYMBION, INC.,  as the Borrower, (with effect only from and after the consummation of the  Merger) |
|   |                                                                                               |
|   |                                                                                               |   |
|   | By:                                                                                                | /s/ Kenneth C. Mitchell |
|   |                                                                                               | Name: Kenneth C. Mitchell |
|   |                                                                                               | Title: Vice President |
|   |                                                                                               |   |
|   |                                                                                               |   |
|   | SYMBION HOLDING CORPORATION,  as Holdings                                                          |
|   |                                                                                               |   |
|   |                                                                                               |   |
|   | By:                                                                                                | /s/ Kenneth C. Mitchell |
|   |                                                                                               | Name: Kenneth C. Mitchell |
|   |                                                                                               | Title: Vice President |

 

1

----

 
|   | MERRILL LYNCH CAPITAL CORPORATION,  as a Lender and as Administrative Agent and   Collateral Agent       |
|--------|----------------------------------------------------------------------------------------------------------|
|   |                                                                                                     |   |
|   |                                                                                                     |   |
|   | By:                                                                                                      | /s/ Michael E. O’Brien |
|   |                                                                                                     | Name: Michael E. O’Brien |
|   |                                                                                                     | Title: Vice President |
|   |                                                                                                     |   |
|   |                                                                                                     |   |
|   | MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED  as Joint Lead Arranger and Joint Bookrunner |
|   |                                                                                                     |   |
|   |                                                                                                     |   |
|   | By:                                                                                                      | /s/ Michael E. O’Brien |
|   |                                                                                                     | Name: Michael E. O’Brien |
|   |                                                                                                     | Title: Director |

 

2

----

 
|   | MERRILL LYNCH CAPITAL CORPORATION,   as a Lender and as Administrative Agent and   Collateral Agent         |
|--------|-------------------------------------------------------------------------------------------------------------|
|   |                                                                                                        |   |
|   |                                                                                                        |   |
|   | By:                                                                                                         | /s/ Sarang Gadkari |
|   |                                                                                                        | Name: Sarang Gadkari |
|   |                                                                                                        | Title: Vice President |
|   |                                                                                                        |   |
|   |                                                                                                        |   |
|   | MERRILL LYNCH, PIERCE, FENNER & SMITH   INCORPORATED   as Joint Lead Arranger and Joint Bookrunner |
|   |                                                                                                        |
|   |                                                                                                        |   |
|   | By:                                                                                                         | /s/ Sarang Gadkari |
|   |                                                                                                        | Name: Sarang Gadkari |
|   |                                                                                                        | Title: Managing Director |

 

3

----

 
|   | BANK OF AMERICA, N.A.,   as a Lender and as Syndication Agent                 |
|--------|-------------------------------------------------------------------------------|
|   |                                                                          |
|   |                                                                          |   |
|   | By:                                                                           | /s/ Alysa Trakus |
|   |                                                                          | Name: Alysa Trakus |
|   |                                                                          | Title: Vice President |
|   |                                                                          |   |
|   |                                                                          |   |
|   | BANC OF AMERICA SECURITIES LLC,   as Joint Lead Arranger and Joint Bookrunner |
|   |                                                                          |
|   |                                                                          |   |
|   | By:                                                                           | /s/ A. Britt Canady |
|   |                                                                          | Name: A. Britt Canady |
|   |                                                                          | Title: Managing Director |

 

4

----

 
|   | THE ROYAL BANK OF SCOTLAND  PLC,   as a Lender and as Documentation Agent |
|--------|---------------------------------------------------------------------------|
|   |                                                                      |
|   |                                                                      |   |
|   | By:                                                                       | /s/ Jonathan Salkin |
|   |                                                                      | Name: Jonathan Salkin |
|   |                                                                      | Title: Managing Director |

 

5

----

 
|   | FIFTH THIRD BANK, as  Issuing Bank and as Lender |
|--------|--------------------------------------------------|
|   |                                             |
|   |                                             |   |
|   | By:                                              | /s/ Sandy Hammrick |
|   |                                             | Name: Sandy Hammrick |
|   |                                             | Title: Vice President |

 

6

----

 

EXHIBIT A

Form of

ASSIGNMENT ANDASSUMPTION

 

ThisAssignment and Assumption is dated as of the date set forth below (the “EffectiveDate”) and is entered into by and between [the][each] Assignor (as definedbelow) and [the][each] Assignee (as defined below). Capitalized terms used inthis Assignment and Assumption and not otherwise defined herein have themeanings specified in the Credit Agreement dated as of August 23, 2007(the “Credit Agreement”), among Symbion, Inc., a Delawarecorporation, Symbol Merger Sub, Inc. (to be merged with and intoSymbion, Inc.), a Delaware corporation (the “Borrower”), SymbolHoldings Corporation, a Delaware corporation (“Holdings”), the Lendersparty thereto from time to time, Merrill Lynch Capital Corporation, asAdministrative Agent and Collateral Agent, Merrill Lynch & Co.,Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc of AmericaSecurities LLC, as Joint LeadArrangers and Joint Bookrunners, Bank of America, N.A., as Syndication Agent,and The Royal Bank of Scotland plc and Fifth Third Bank, as Co-DocumentationAgents, receipt of a copy of which is hereby acknowledged by [the][each]Assignee. The Standard Terms and Conditions set forth in Annex 1 attachedhereto (the “Standard Terms”) are hereby agreed to and incorporatedherein by reference and made a part of this Assignment and Assumption as if setforth herein in full.

 

Foran**agreed consideration, [the][each]Assignor hereby irrevocably sells and assigns to [the][each] Assignee, and [the][each]Assignee hereby irrevocably purchases and assumes from [the][each] Assignor,subject to and in accordance with the Standard Terms and the Credit Agreement,as of the Effective Date inserted by the Administrative Agent as contemplatedbelow (a) all of [the][each] Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreementand any other documents or instrumentsdelivered pursuant thereto to the extent related to the amount and percentageinterest identified below of all of such outstanding rights and obligations of [the][each] Assignorunder the facilities identifiedbelow (including participations in any Lettersof Credit and Swingline Loans included in such facilities) and (b) to theextent permitted to be assigned under applicable law, all claims, suits, causesof action and any other right of [the][each] Assignor (in its capacity as aLender) against any Person, whether known or unknown, arising under or inconnection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or inany way based on or related to any of the foregoing, including contract claims,tort claims, malpractice claims, statutory claims and all other claims at lawor in equity related to the rights and obligationssold and assigned pursuant to clause (a) above (the rights and obligations sold and assigned pursuantto clauses (a) and(b) above being referred to herein collectively as the “AssignedInterest”). Such sale and assignment is without recourse to [the][each]Assignor and, except as expressly provided in this Assignment and Assumption,without representation or warranty by [the][such] Assignor.

 

----

 

1.                                       Assignor[(s)]:

 

2.                                       Assignee[(s)]:

 

[Assignee is an Affiliateof:](1)

 

[Assignee is an ApprovedFund:]

 

3.                                       Borrower: SYMBION, INC.

 

4.                                       Administrative Agent: MERRILL LYNCHCAPITAL CORPORATION, as Administrative Agent under the Credit Agreement.

 

5.                                       Assigned Interest:

 
| **Facility Assigned****(2)** | ** ** | **Aggregate Amount  of All Lenders’  Commitments and  Loans** | ** **  | **Amount of  Commitments  and Loans Assigned** | ** ** | **Percentage of  Global Commitment  Assigned** | ** ** | **CUSIP** | ** ** |
|------------------------------|------------|--------------------------------------------------------------------|-------------|------------------------------------------------|------------|------------------------------------------------|------------|-----------|------------|
| Revolving Facility           |       | $                                                                  | 100,000,000 |                                           | $          |                                           |       |      | %          |   |   |
| Tranche  A Facility          |       | $                                                                  | 125,000,000 |                                           | $          |                                           |       |      | %          |   |   |
| Tranche  B Facility          |       | $                                                                  | 125,000,000 |                                           | $          |                                           |       |      | %          |   |   |

 

Effective Date:

 

----

(1)           Selectas applicable.

 

(2)           Selectas applicable.

 

2

----

 

The terms sets forth in this Assignment and Assumptionare hereby agreed to:

 

 
|   |           | ,      |
|--------|----------------|--------|
|   | as Assignor(3) |
|   |           |
|   |           |
|   | By:            |   |
|   |           | Name:  |
|   |           | Title: |
|        |                |        |  |

 

 

The terms set forth in this Assignment and Assumptionare hereby agreed to:

 

 
|   |           | ,      |
|--------|----------------|--------|
|   | as Assignee(2) |
|   |           |
|   |           |
|   | By:            |   |
|   |           | Name:  |
|   |           | Title: |
|        |                |        |  |

 

----

(3)           Additionalsignatures may be added as appropriate.

 

3

----

 
|   | [Consented to and Accepted:                                  |
|--------|--------------------------------------------------------------|
|   |                                                         |
|   |                                                         |
|   | MERRILL LYNCH  CAPITAL CORPORATION,  as Administrative Agent |
|   |                                                         |
|   |                                                         |
|   | By:                                                          |   |
|   |                                                         | Name: |
|   |                                                         | Title: ](4) |

 

 
|   | [Consented to and Accepted:                                                                                                                                                                                                                                                                                                                                              |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                     |
|   | [                                                           ],(5) |
|   | as Issuing Bank                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                     |
|   | By:                                                                                                                                                                                                                                                                                                                                                                      |   |
|   |                                                                                                                                                                                                                                                                                                                                                                     | Name: |
|   |                                                                                                                                                                                                                                                                                                                                                                     | Title: |

 

 

Consented to:

 

[SYMBION, INC.](6)

 

 
| By:    |   |   |
|--------|--------|--------|
|   | Name:  |   |
|   | Title: |   |

 

----

(4)           Tobe included to the extent applicable under Section 9.04 of the CreditAgreement.

 

(5)           Tobe included to the extent applicable under Section 9.04 of the CreditAgreement.

 

(6)           Tobe included to the extent applicable under Section 9.04 of the CreditAgreement.

 

4

----

 

STANDARD TERMS AND CONDITIONS

FOR ASSIGNMENT AND ASSUMPTION

 

1.            Representations and Warranties.

 

1.1          Assignor.[The][Each] Assignor (a) representsand warrants that (i) it is the legal and beneficial owner of the AssignedInterest, (ii) the Assigned Interest is free and clear of any lien,encumbrance or other adverse claim and (iii) it has full power andauthority, and has taken all action necessary, to execute and deliver thisAssignment and Assumption and to consummate the transactions contemplated hereby, and (b) assumes noresponsibility with respect to (i) any statements, warranties or representationsmade in or in connection with the Credit Agreement or any other Loan Document, (ii) theexecution, legality, validity, enforceability, genuineness, sufficiency orvalue of the Loan Documents or any collateral thereunder, (iii) thefinancial condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated inrespect of any Loan Document or (iv) the performance or observance by theBorrower, any of its Subsidiariesor Affiliates or any other Person of any of their respective obligations under any Loan Document.

 

1.2          Assignee. [The][Each]Assignee (a) represents andwarrants that (i) it has full power and authority, and has taken allaction necessary, to execute and deliver this Assignment and Assumption and toconsummate the transactionscontemplated hereby and to become a Lender under the Credit Agreement, (ii) itsatisfies the requirements, if any, specified in the Credit Agreement that arerequired to be satisfied by it in order to acquire the Assigned Interest andbecome a Lender, (iii) from and after the Effective Date, it shall bebound by the provisions of theCredit Agreement as a Lender thereunder and, to the extent of the AssignedInterest, shall have the obligationsof a Lender thereunder, (iv) it has received a copy of the CreditAgreement, together with copies of the most recent financial statements delivered pursuant to Section 4.01(1) or5.01 of the Credit Agreement, as applicable, and such other documents andinformation as it has deemed appropriate to make its own credit analysis and decision to enter intothis Assignment and Assumption and to purchase the Assigned Interest, on thebasis of which it has made such analysisand decision independently and without reliance on the Administrative Agent orany other Lender, (v) if it is a Foreign Lender, attached to thisAssignment and Assumption is any documentation required to be delivered by itpursuant to Section 2.17(e) of the Credit Agreement, duly completedand executed by [the][such] Assignee and (vi) it is sophisticated withrespect to decisions to acquireassets of the type represented by the Assigned Interest and either it, or thePerson exercising discretion in making its decision to acquire the AssignedInterest, is experienced in acquiring assets of such type, and (b) agreesthat (i) it will, independently and without reliance on the AdministrativeAgent, [the][each] Assignor or any other Lender, and based on such documentsand information as it shall deem appropriate at the time, continue to make itsown credit decisions in takingor not taking action under the Loan Documents, and (ii) it will perform inaccordance with their terms all of the obligationswhich by the terms of the Loan Documents are required to be performed by it asa Lender.

 

2.           Payments. Fromand after the Effective Date, the Administrative Agent shall make all paymentsin respect of the Assigned Interest (including payments of principal, interest,fees and other amounts) to [the][each] Assignor for amounts which have accruedto but

 

----

 

excluding the Effective Date and to [the][each] Assignee for amountswhich have accrued from and after the Effective Date.

 

3.           General Provisions.This Assignment and Assumption shall be binding upon and inure to the benefitof the parties hereto and their respective successors and assigns. This Assignment and Assumption may beexecuted in counterparts (and bydifferent parties hereto on different counterparts), each of which shallconstitute an original, but all of which when taken together shall constitute asingle contract. Delivery of an executed counterpart of a signature page ofthis Assignment and Assumption by facsimile or other electronic transmissionshall be as effective as delivery of a manually executed counterpart of thisAssignment and Assumption. This Assignment and Assumption shall be construed inaccordance with and governed by the law of the State of New York.

 

2

----

 

EXHIBIT E

 

Form of

BORROWING REQUEST

 

Merrill Lynch CapitalCorporation,

as Administrative Agentfor

the Lenders referred tobelow,

(c/o BNY Asset Solutions)

600 East Las ColinasBlvd., Suite 1300

Irving, TX 75039

 
| Attention: |   | Rachel Suiter, Agency  Services Primary Closer |
|------------|--------|------------------------------------------------|
|       |   | Telecopier: (972)  401-8557                    |
|       |   | Telephone: (972)  401-8588                     |

 

[DATE]

 

Ladies and Gentlemen:

 

Theundersigned, Symbion, Inc., a Delaware corporation (the “Borrower”), refersto the Credit Agreement dated as of August 23, 2007 (as amended, supplementedor otherwise modified from time to time, the “Credit Agreement”), amongSymbion, Inc., a Delaware corporation, Symbol Merger Sub, Inc. (to be mergedwith and into Symbion, Inc.), a Delaware corporation (the “Borrower”), SymbolHoldings Corporation, a Delaware corporation (“Holdings”), the Lendersparty thereto from time to time, Merrill Lynch Capital Corporation, asAdministrative Agent and Collateral Agent, Merrill Lynch & Co., MerrillLynch, Pierce, Fenner & Smith Incorporated and Banc of America Securities LLC, as Joint LeadArrangers and Joint Bookrunners, Bank of America, N.A., as Syndication Agent, andThe Royal Bank of Scotland plc and Fifth Third Bank, as Co-Documentation Agents.Capitalized terms used herein and not otherwise defined herein shall have themeanings assigned to such terms in the Credit Agreement. The Borrower herebygives you notice pursuant to Section 2.03 of the Credit Agreement that it requests a Borrowing under the CreditAgreement, and in that connection sets forth below the terms on which suchBorrowing is requested to be made:

 
| (A)    |   | Date of Borrowing              |
|--------|--------|--------------------------------|
|   |   | (which is a Business  Day)     |
|   |   |                           |
| (B)    |   | Principal Amount of  Borrowing |

 

----

 
| (C)    |   | Class of Borrowing(7)                                                                                                                                                                                                       |   |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |   |                                                                                                                                                                                                                        |   |
| (D)    |   | Type of Borrowing(8)                                                                                                                                                                                                        |   |
|   |   |                                                                                                                                                                                                                        |   |
| (E)    |   | [Interest Period and the  last day thereof(9)                                                                                                                                                                               | ]      |
|   |   |                                                                                                                                                                                                                        |
| (F)    |   | Funds  are requested to be disbursed to the Borrower’s account as follows (Account  No.                     ) |

 

----

| (7)    |   | Specify  Tranche A Term Loan, Tranche B Term Loan, Revolving Loan or Swingline Loan.                                                                                                                                                                 |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                 |
| (8)    |   | Specify  Eurodollar Borrowing or ABR Borrowing.                                                                                                                                                                                                      |
|   |   |                                                                                                                                                                                                                                                 |
| (9)    |   | Applicable  for Eurodollar Borrowings only; which shall be subject to the definition of  “Interest Period” and end not later than the Revolving Maturity Date, the  Tranche A Maturity Date or the Tranche B Maturity Date, as applicable. |

 

2

----

 

TheBorrower hereby represents andwarrants to the Administrative Agent and the Lenders that, on the date of thisBorrowing Request and on the date of the related Borrowing, the conditions to lending specified in Section4.02 of the Credit Agreement have been satisfied.

 
|   | [              ], |
|--------|-----------------------------------------------------------------------------------------|
|   |                                                                                    |
|   |                                                                                    |
|   | By:                                                                                     |   |
|   |                                                                                    | Name: |   |
|   |                                                                                    | Title: [Responsible  Officer] |

 

3

----

** **

EXHIBIT F

 

Form of

INTEREST ELECTION REQUEST

 

Merrill Lynch CapitalCorporation,

as Administrative Agentfor

the Lenders referred tobelow,

(c/o BNY Asset Solutions)

600 East Las Colinas Blvd.,Suite 1300

Irving, TX 75039

 
| Attention: |   | Rachel Suiter, Agency Services Primary Closer |
|------------|--------|-----------------------------------------------|
|       |   | Telecopier: (972)  401-8557                   |
|       |   | Telephone: (972)  401-8588                    |

 

[Date]

 

Ladies and Gentlemen:

 

Referenceis made to the Credit Agreement dated as of August 23, 2007 (as amended, supplementedor otherwise modified from time to time, the “Credit Agreement”), amongSymbion, Inc., a Delaware corporation, Symbol Merger Sub, Inc. (to be mergedwith and into Symbion, Inc.), a Delaware corporation (the “Borrower”), SymbolHoldings Corporation, a Delaware corporation (“Holdings”), the Lenders partythereto from time to time, Merrill Lynch Capital Corporation, as AdministrativeAgent and Collateral Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner& Smith Incorporated and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, Bankof America, N.A., as Syndication Agent, and The Royal Bank of Scotland plc andFifth Third Bank, as Co-Documentation Agents. Capitalized terms used herein andnot otherwise defined herein shall have the meanings assigned to such terms in theCredit Agreement. This notice constitutes an Interest Election Request, and theBorrower hereby requests theconversion or continuation of a Borrowing under the Credit Agreement, and inthat connection the Borrower specifies the following information with respectto the Borrowing to be converted or continued as requested hereby:

 
|   | (A) | Borrowing to which this  request applies:(10) |
|--------|-----|-----------------------------------------------|

 

----

| (10) |   | Specify existing Class (Tranche  A Term Loan, Tranche B Term Loan or Revolving Loan), Type (Eurodollar  Borrowing or ABR Borrowing) and last day of current Interest Period. If  different options are being elected with respect to different portions of the  Borrowing, use separate form for each portion. |
|------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

1

----

 
|   | (B)    | Principal amount of the  Borrowing to be converted/continued:                                                                                                                                                                                                                                                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                         |
|   | (C)    | Effective date of  election (which is a Business Day):                                                                                                                                                                                                                                                                       |
|   |   |                                                                                                                                                                                                                                                                                                                         |
|   | (D)    | Type of resulting  Borrowing:(11)                                                                                                                                                                                                                                                                                            |
|   |   |                                                                                                                                                                                                                                                                                                                         |
|   | (E)    | [Interest Period of  resulting Borrowing:                                             ](12) |

 
|   | Very truly yours, |
|--------|-------------------|
|   |              |
|   | SYMBION, INC.,    |
|   |              |
|   |              |
|   | By:               |   |
|   |              | Name: |   |
|   |              | Title: |   |

 

----

| (11)   |   | Eurodollar  Borrowing or ABR Borrowing.                                                                                                                                                                                                                                          |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                             |
| (12)   |   | Applicable  only if the resulting Borrowing is a Eurodollar Borrowing; which shall be  subject to the definition of “Interest Period” and end not later than the  Revolving Maturity Date, the Tranche A Maturity Date or the Tranche B  Maturity Date, as applicable. |

 

2

----

 

**EXHIBIT G-1**

 

Form of

**TERM LOAN NOTE**

 
| $      |   | New York, New  York |
|--------|--------|---------------------|
|   |   | [Date]              |

 

FOR VALUE RECEIVED, the undersigned, SYMBION, INC., a Delawarecorporation (the “Borrower”), hereby promises to pay to the order of [              ](the “Lender”) on the [Tranche A] [Tranche B] Maturity Date (as definedin the Credit Agreement referred to below) in lawful money of the United States and in immediately availablefunds, the principal amount of             DOLLARS($          ), or, if less,the aggregate unpaid principal amount of all [Tranche A Term Loans] [Tranche BTerm Loans] of the Lender outstanding under the Credit Agreement referred tobelow, which sum shall be due and payable in such amounts and on such dates asare set forth in the Credit Agreement. Borrower further agrees to pay interestin like money at such office specified in Section 2.18 of the Credit Agreementon the unpaid principal amount hereof from time to time from the date hereof atthe rates, and on the dates, set forth in the Credit Agreement.

 

The holder of thisNote may endorse and attach a schedule to reflect the date, type and amount ofeach [Tranche A Term Loan] [Tranche B Term Loan] of the Lender outstandingunder the Credit Agreement, the date and amount of each payment or prepaymentof principal hereof, and the date of each interest rate conversion orcontinuation pursuant to Section 2.07**ofthe Credit Agreement and the principal amount subject thereto; *provided*that the failure of the Lender tomake any such recordation (or any error in such recordation) shall not affectthe obligations of Borrower hereunder or under the Credit Agreement.

 

This Note is oneof the Notes referred to in the Credit Agreement dated as of August 23, 2007(as amended, amended and restated, supplemented or otherwise modified from timeto time, the “Credit Agreement”), among the Symbion, Inc., a DelawareCorporation, Symbol Merger Sub, Inc. (to be merged with and into Symbion, Inc.),a Delaware corporation (the “Borrower”), Symbol Holdings Corporation, aDelaware corporation (“Holdings”), the Lenders party thereto from timeto time, Merrill Lynch Capital Corporation, as Administrative Agent andCollateral Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &Smith Incorporated and Banc of America Securities LLC, as Joint Lead Arrangersand Joint Bookrunners, Bank of America, N.A., as Syndication Agent, and TheRoyal Bank of Scotland plc and Fifth Third Bank, as Co-Documentation Agents, issubject to the provisionsthereof and is subject to optional and mandatory prepayment in whole or in partas provided therein. Terms used herein which are defined in the CreditAgreement shall have such defined meanings unless otherwise defined herein orunless the context otherwise requires.

 

This Note issecured and guaranteed as provided in the Credit Agreement and the SecurityDocuments. Reference is hereby made to the Credit Agreement and the SecurityDocuments for a description of the propertiesand assets in which a securityinterest has been

 

1

----

 

granted, the nature andextent of the security and guarantees, the terms and conditions upon which the security interest and each guarantee wasgranted and the rights of the holder of this Note in respect thereof.

 

Upon theoccurrence and during the continuation of any one or more of the Events ofDefault specified in the Credit Agreement, all amounts then remaining unpaid onthis Note shall become, or may be declared to be, immediately due and payableall as provided therein.

 

All parties nowand hereafter liable with respect to this Note whether maker, principal,surety, guarantor, endorser or otherwise, hereby waive presentment, demand,protest and all other notices of any kind.

 

**THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OFTHE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTERMAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDITAGREEMENT.**

** **

**THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWOF THE STATE OF NEW YORK.**

 

[Signature Page Follows]

 

2

----

 
|   | [SYMBION MERGER SUB,  INC.,                                                            |
|--------|----------------------------------------------------------------------------------------|
|   | as  Borrower                                                                           |
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |
|   |                                                                                   | Name: |   |
|   |                                                                                   | Title: | ] |
|   |                                                                                   |   |   |
|   |                                                                                   |   |   |
|   | SYMBION,  INC. [(with effect only from and after the consummation of the Merger)](13), |
|   | as  Borrower                                                                           |
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |
|   |                                                                                   | Name: |   |
|   |                                                                                   | Title: |   |

 

----

| (13) |   | To be included only on  Notes delivered on or prior to the Effective Date. |
|------|--------|----------------------------------------------------------------------------|

 

3

----

 

**EXHIBIT G-2**

 

Form of

**REVOLVING CREDIT NOTE**

 
| $      |   | New York, New  York |
|--------|--------|---------------------|
|   |   | [Date]              |

 

FOR VALUE RECEIVED, the undersigned, SYMBION, INC., a Delawarecorporation (the “Borrower”), hereby promises to pay to the order of [                                             ](the “Lender”) on the Revolving Maturity Date (as defined in the CreditAgreement referred to below), in lawful money of the United States and inimmediately available funds, the principal amount of the lesser of (a)                      DOLLARS ($           )**and (b) the aggregate unpaidprincipal amount of all Revolving Loans of the Lender outstanding under theCredit Agreement referred to below. Borrower further agrees to pay interest inlike money at such office specified in Section 2.18 of the Credit Agreement onthe unpaid principal amount hereof from time to time from the date hereof atthe rates, and on the dates, set forth in the Credit Agreement.

 

The holder of thisNote may endorse and attach a schedule to reflect the date, type and amount ofeach Revolving Loan of the Lender outstanding under the Credit Agreement, thedate and amount of each payment or prepayment of principal hereof, and the dateof each interest rate conversion or continuation pursuant to Section 2.07 ofthe Credit Agreement and the principal amount subject thereto; *provided*that the failure of the Lender tomake any such recordation (or any error in such recordation) shall not affectthe obligations of Borrowerhereunder or under the Credit Agreement.

 

This Note is oneof the Notes referred to in the Credit Agreement dated as of August 23, 2007(as amended, amended and restated, supplemented or otherwise modified from timeto time, the “Credit Agreement”), among the Symbion, Inc., a Delawarecorporation, Symbol Merger Sub, Inc. (to be merged with and into Symbion, Inc.),a Delaware corporation (the “Borrower”), Symbol Holdings Corporation, aDelaware corporation (“Holdings”), the Lenders party thereto from timeto time, Merrill Lynch Capital Corporation, as Administrative Agent andCollateral Agent, Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &Smith Incorporated and Banc of America Securities LLC, as Joint Lead Arrangersand Joint Bookrunners, Bank of America, N.A., as Syndication Agent, and TheRoyal Bank of Scotland plc and Fifth Third Bank, as Co-Documentation Agents, issubject to the provisions thereofand is subject to optional and mandatory prepayment in whole or in part asprovided therein. Terms used herein which are defined in the Credit Agreementshall have such defined meanings unless otherwise defined herein or unless thecontext otherwise requires.

 

This Note issecured and guaranteed as provided in the Credit Agreement and the SecurityDocuments. Reference is hereby made to the Credit Agreement and the SecurityDocuments for a description of the propertiesand assets in which a security interest has been granted, the nature and extentof the security and guarantees, the terms and conditions upon

 

----

 

whichthe security interest and each guarantee was granted and the rights of theholder of this Note in respect thereof.

 

Upon the occurrence and during the continuation of any one or more ofthe Events of Default specified in the Credit Agreement, all amounts thenremaining unpaid on this Note shall become, or may be declared to be,immediately due and payable, all as provided therein.

 

All parties now and hereafter liable with respect to this Note, whethermaker, principal, surety, guarantor, endorser or otherwise, hereby waivepresentment, demand, protest and all other notices of any kind.

 

**THIS NOTE MAY NOT BE TRANSFERRED EXCEPT IN COMPLIANCE WITH THE TERMS OFTHE CREDIT AGREEMENT. TRANSFERS OF THIS NOTE MUST BE RECORDED IN THE REGISTERMAINTAINED BY THE ADMINISTRATIVE AGENT PURSUANT TO THE TERMS OF THE CREDIT AGREEMENT.**

** **

**THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWOF THE STATE OF NEW YORK.**

 

[Signature Page Follows]

 

2

----

 
|   | [SYMBION MERGER SUB,  INC.,                                                            |
|--------|----------------------------------------------------------------------------------------|
|   | as  Borrower                                                                           |
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |
|   |                                                                                   | Name: |   |
|   |                                                                                   | Title: | ] |
|   |                                                                                   |   |   |
|   |                                                                                   |   |   |
|   | SYMBION,  INC. [(with effect only from and after the consummation of the Merger)](14), |
|   | as  Borrower                                                                           |
|   |                                                                                   |
|   |                                                                                   |
|   | By:                                                                                    |   |
|   |                                                                                   | Name: |   |
|   |                                                                                   | Title: |   |

 

----

| (14) |   | To be included only on  Notes delivered on or prior to the Effective Date. |
|------|--------|----------------------------------------------------------------------------|

 

3

----

** **

SCHEDULES

 

TO THE

 

CREDIT AGREEMENT

 

DATED AS OF

 

AUGUST 23, 2007

 

AMONG

 

SYMBION HOLDINGS CORPORATION,

AS HOLDINGS

 

SYMBOL MERGER SUB, INC. (TO BE MERGED WITHAND INTO

SYMBION, INC.),

AS THE BORROWER

 

THE LENDERS PARTY HERETO FROM TIME TO TIME

 

MERRILL LYNCH CAPITAL CORPORATION,

AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT

 

BANK OF AMERICA, N.A.,

AS SYNDICATION AGENT

 

AND

 

THE ROYAL BANK OF SCOTLAND PLC AND FIFTHTHIRD BANK,

AS CO-DOCUMENTATION AGENTS

 

----

 

MERRILL LYNCH & CO.,

MERRILL LYNCH, PIERCE, FENNER &SMITH INCORPORATED AND

BANC OF AMERICA SECURITIES LLC,

AS JOINT LEAD ARRANGERS AND JOINT LEADBOOKRUNNERS

 

----

 

**EXISTING LETTERS OF CREDIT**

 

**SCHEDULE 1.01(a)**

 

None.

 

----

 

**SCHEDULE 1.01(c)**

 

**SPECIFIED SUBSIDIARIES**

 

NSC of Edmond, Inc.

SARC/West Houston, LLC

SI/Dry Creek, Inc.

Symbion Imaging, Inc.

TOSF, LLC

SMBIMS Brooksville, Inc.

ARC Dry Creek, Inc.

SARC/Savannah, Inc.

SARC/San Antonio, LLC

SMBIMS, Tuscaloosa, Inc.

SARC/Columbia, Inc.

SMBISS Sandy Springs, LLC

SMBISS Roswell, LLC

Houston PSC - I, Inc.

Northstar Hospital, LLC

 

----

 

**SCHEDULE 2.01**

 

**COMMITMENTS**

 
| **Lender**                        | ** ** | **Revolving********Commitment** | ** **     | **Term Loan A********Commitment** | ** ** | **Term Loan B********Commitment** | ** ** |
|-----------------------------------|------------|---------------------------------|----------------|-----------------------------------|------------|-----------------------------------|------------|
| Merrill Lynch Capital Corporation |       | $                               | 46,261,111.00  |                              | $          | 46,933,333.00                     |       | $ | 68,750,000.00 |   |
| Bank of America, N.A.             |       | $                               | 29,438,889.00  |                              | $          | 29,866,667.00                     |       | $ | 43,750,000.00 |   |
| The Royal Bank of Scotland plc    |       | $                               | 10,000,000.00  |                              | $          | 12,500,000.00                     |       | $ | 12,500,000.00 |   |
| Fifth Third Bank                  |       | $                               | 14,300,000.00  |                              | $          | 35,700,000.00                     |       | $ | — |   |
| Totals                            |       | $                               | 100,000,000.00 |                              | $          | 125,000,000.00                    |       | $ | 125,000,000.00 |   |

 

----

 

**SCHEDULE 3.03**

 

**NO CONFLICTS**

 
| ** ** | ** ** | **State** | ** ** | **Type of Permit or License** | ** ** | **Action**                                                |
|------------|------------|-----------|------------|-------------------------------|------------|-----------------------------------------------------------|
| **1.**     |       | RI        |       | ASC  License                  |       | Change in Effective  Control application filed 6/28/2007. |
| **2.**     |       | RI        |       | Medicaid                      |       | Change of information form  required.                     |
| **3.**     |       | TX        |       | Medicaid                      |       | New application required.                                 |
| **4.**     |       | WA        |       | Medicaid                      |       | New application required.                                 |

 

Inaddition to the licenses and permits listed above, each facility that iscurrently enrolled in Medicare will be required to make a change of informationfiling with Medicare within 30 days post-closing.

 

----

 

**SCHEDULE 3.05**

 

**REAL PROPERTY**

 

SMBIMSDurango, LLC, 40 Burton Hills Blvd., Suite 500, Nashville, TN 37215, ownsundeveloped land, Lot 3R, Rivergate Medical Center Lot 2-R Condominium Plat andResubdivision of Lot 2& 3, Rivergate Planned Development, According to theRecorded Plat thereof filed for record July 21, 2005 under Reception No. 913882,County of La Plata, State of Colorado, Licensed to hospital.

 

----

 

**SCHEDULE 3.06**

 

**LITIGATION**

 

None.

 

----

 

**SCHEDULE 3.12**

 

**SUBSIDIARIES**

 
| **Current  Legal Entities  Owned**                             | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner** | ** ** | **No. of Shares** | ** ** | **Interest** |
|----------------------------------------------------------------|------------|----------------------------------------------------------------------------------------|------------|-------------------|------------|--------------|
| ** **                                                     | ** ** | ** **                                                                             | ** ** | ** **        | ** ** | ** **   |
| **BORROWER:**                                                  | ** ** | ** **                                                                             | ** ** | ** **        | ** ** | ** **   |
| ** **                                                     | ** ** | ** **                                                                             | ** ** | ** **        | ** ** | ** **   |
| Symbion, Inc.                                             |       | Symbion Holdings  Corporation                                                          |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| **SUBSIDIARY LOAN PARTIES:**                                   |       |                                                                                   |       |              |
| ** **                                                     |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres Investment  Company, Inc.     |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres of Florida, Inc.              |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres of  Massachusetts, Inc.       |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres of Texas, Inc.                     |       | ARC Financial Services  Corporation                                                    |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres of Washington, Inc.                |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Ambulatory Resource Centres of Wilmington, Inc.                |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| ARC Development Corporation                                    |       | ARC Financial Services  Corporation                                                    |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| ARC Financial Services Corporation                             |       | Symbion Ambulatory  Resource Centres, Inc.                                        |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| ASC of Hammond, Inc.                                      |       | ARC Financial Services  Corporation                                                    |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| ASC of New Albany, Inc.                                   |       | ARC Financial Services  Corporation                                                    |       | 200               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Lubbock SurgiCenter, Inc.                                 |       | PSC Development  Company, LLC                                                          |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| MediSphere Health Partners Management of  Tennessee, Inc. |       | Symbion Ambulatory  Resource Centres, Inc.                                        |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| MediSphere Health Partners — Oklahoma  City, Inc.    |       | Symbion Ambulatory  Resource Centres, Inc.                                        |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Physicians Surgical Care, Inc.                            |       | Symbion, Inc.                                                                     |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Premier Ambulatory Surgery of Duncanville, Inc.           |       | Symbion Ambulatory  Resource Centres, Inc.                                        |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| PSC Development Company, LLC                                   |       | Physicians Surgical  Care, Inc.                                                   |       | 50,000            |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| PSC Operating Company, LLC                                     |       | Physicians Surgical  Care, Inc.                                                   |       | 1,000,000         |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| PSC of New York, L.L.C.                                        |       | PSC Development  Company, LLC                                                          |       | Not designated    |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| Quahog Holding Company, LLC                                    |       | ARC Financial Services  Corporation                                                    |       | 100               |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| SARC/Asheville, Inc.                                      |       | ARC Financial Services  Corporation                                                    |       | 1,000             |       | 100%         |
|                                                           |       |                                                                                   |       |              |       |         |
| SARC/Circleville, Inc.                                    |       | ARC Financial Services  Corporation                                                    |       | 1,000             |       | 100%         |

 

----

 
| **Current  Legal Entities  Owned** | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner** | ** ** | **No. of Shares** | ** ** | **Interest** |
|------------------------------------|------------|----------------------------------------------------------------------------------------|------------|-------------------|------------|--------------|
|                               |       |                                                                                   |       |              |       |         |
| SARC/DeLand,  Inc.                 |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Ft.  Myers, Inc.              |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/FW,  Inc.                     |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Georgia,  Inc.                |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Jacksonville,  Inc.           |       | ARC Financial Services Corporation                                                     |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Kent,  LLC                    |       | SymbionARC Management Services, Inc.                                              |       | Not designated    |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Knoxville,  Inc.              |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Largo,  Inc.                  |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Largo  Endoscopy, Inc.        |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Metairie,  Inc.               |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Providence,  Inc.             |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/St.  Charles, Inc.            |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Vincennes,  Inc.              |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SARC/Worcester,  Inc.              |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBI  Havertown, LLC               |       | SymbionARC Management Services, Inc.                                              |       | Not designated    |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBI  Northstar, LLC               |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBI  Portsmouth, LLC              |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  119, LLC                   |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Birmingham, Inc.           |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Durango, LLC               |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Elk River, LLC             |       | SymbionARC Management Services, Inc.                                              |       | Not designated    |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Florida I, LLC             |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Greenville, LLC            |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Kirkwood, Inc.             |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Maple Grove, LLC           |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Novi, LLC                  |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Orange City, LLC           |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Steubenville, Inc.         |       | ARC Financial Services Corporation                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| SMBIMS  Tampa, LLC                 |       | SymbionARC Management Services, Inc.                                              |       | 100               |       | 100%         |

 

----

 
| **Current  Legal Entities  Owned**               | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner**                                  | ** ** | **No. of Shares**                       | ** ** | **Interest**                      |
|--------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|-----------------------------------|
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBIMS  Temple, LLC                              |       | SymbionARC Management Services, Inc.                                                                               |       | 100                                     |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBIMS  Wichita, LLC                             |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Arcadia, LLC                             |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Beverly Hills, LLC                       |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Chesterfield, LLC                        |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Encino, LLC                              |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Irvine, LLC                              |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SMBISS  Thousand Oaks, LLC                       |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SurgiCare  of DeLand, Inc.                       |       | SARC/DeLand, Inc.                                                                                                  |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| Symbion  Ambulatory Resource Centres, Inc.       |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SymbionARC  Management Services, Inc.            |       | ARC Financial Services Corporation                                                                                      |       | 100                                     |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| SymbionARC  Support Services, LLC                |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| Texarkana  Surgery Center GP, Inc.               |       | PSC Operating Company, LLC                                                                                              |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Eugene/Springfield I, Inc. |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Johnson City VI, LLC       |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Louisville, Inc.           |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Maine I, Inc.              |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Memphis I, LLC             |       | UniPhy Healthcare of Memphis II, Inc.                                                                              |       | Not designated                          |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Memphis II, Inc.           |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Memphis III, Inc.          |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| UniPhy  Healthcare of Memphis IV, Inc.           |       | Symbion, Inc.                                                                                                      |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| VASC,  Inc.                                      |       | SARC/St. Charles, Inc.                                                                                             |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| Village  SurgiCenter, Inc.                       |       | PSC Development Company, LLC                                                                                            |       | 1,000                                   |       | 100%                              |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| **QUALIFIED  RESTRICTED SUBSIDIARIES:**          |       |                                                                                                                    |       |                                    |
| ** **                                       |       |                                                                                                                    |       |                                    |       |                              |
| Ambulatory  Surgery Center of Worcester, LLC     |       | SARC/Worcester, Inc.                                                                                               |       | Not designated                          |       | 51%                               |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| Animas  Surgical Hospital, LLC                   |       | SMBIMS Durango, LLC                                                                                                     |       | 129.02Class B                      |       | 53.983%                           |
|                                             |       |                                                                                                                    |       |                                    |       |                              |
| ARC  of Bellingham, L.P.                         |       | Ambulatory Resource Centres of Washington, Inc.

 

Ambulatory Resource Centres Investment Company, Inc. |       |  

2 GP Units

 

83 LP Units |       |  

2% (GP)

 

83% (LP) |

 

----

 
| **Current  Legal Entities  Owned**              | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner**                                     | ** ** | **No. of Shares**                               | ** ** | **Interest**                                      |
|-------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|---------------------------------------------------|
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| ARC  of Georgia, LLC                            |       | ARC Development Corporation

 

Symbion Ambulatory Resource Centres, Inc.                                        |       | 2 Class A

 

56 Class B         |       | 2% (Class A)

 

56% (Class B)     |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| ARC  Kentucky, LLC                              |       | ARC Financial Services Corporation

 

Symbion Ambulatory Resource Centres, Inc.                                 |       | 2 Units

 

59 Units                       |       | 2%

 

59%                                   |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| ARC  Worcester Center, L.P.                     |       | Ambulatory Resource Centers of Massachusetts, Inc.

 

Ambulatory Resource Centres Investment Company, Inc. |       |  

2 GP Units

 

75 LP Units

  |       |  

2.041% (GP)

 

76.531% (LP)

  |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Bayside  Endoscopy Center, LLC                  |       | SARC/Providence, Inc.                                                                                                 |       | 75 Units                                        |       | 75%                                               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Birmingham  Surgery Center, LLC                 |       | SMBIMS Birmingham, Inc.                                                                                               |       | 60 Units                                        |       | 61.54%                                            |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Cardinal  Sleep Centers of St. Charles, LLC     |       | Valley Sleep Centers, LLC                                                                                                  |       | 100 Units                                       |       | 95%                                               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Central  Austin Ambulatory Surgery Center, L.P. |       | Ambulatory Resource Centres of Texas, Inc.

 

Ambulatory Resource Centres Investment Company, Inc.         |       | 2 Units

 

39 Units

                |       | 2.139% (GP)

 

41.711% (LP)

          |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| CMMP  Surgical Center, L.L.C.                   |       | PSC Operating Company, LLC                                                                                                 |       | 40 Class A Units                           |       | 40%(Class A)                                 |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| CSS  Services, LLC                              |       | The Center for Special Surgery, LLC                                                                                        |       | 100 Units                                       |       | 100%                                              |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Cypress  Surgery Center, LLC                    |       | SMBIMS Wichita, LLC                                                                                                        |       | Not designated                                  |       | 53.32%                                            |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| DeLand  Surgery Center, Ltd.                    |       | Surgicare of DeLand, Inc.                                                                                             |       | 75.5 GP Units

 

20.5 LPUnits             |       | 75.5%

 

20.5%                              |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Dry  Creek Imaging, LLC                         |       | SI/Dry Creek, Inc.                                                                                                    |       | 900 Class A Units                          |       | 90%                                               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Dry  Creek Surgery Center, LLC                  |       | ARC Dry Creek, Inc.                                                                                                   |       | 51 Units                                        |       | 51%                                               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| DSC  Anesthesia, LLC                            |       | DeLand Surgery Center, Ltd.                                                                                                |       | 100 Units                                       |       | 100%                                              |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| HMFW  Surgery Center, L.P.                      |       | SARC/FW, Inc.

 

Ambulatory Resource Centres Investment Company, Inc.                                      |       | 2 GP Units

 

31 LP Units

          |       | 2.04% (GP)

 

31.63%(LP)

             |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Jacksonville  Beach Surgery Center, L.P.        |       | SARC/Jacksonville, Inc.

 

Ambulatory Resource Centres Investment Company, Inc.                            |       | 2 GP Units

 

78 LP Units

          |       | 2.02%

 

78.79%

                      |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Kent,  LLC                                      |       | SARC/Kent, LLC                                                                                                             |       | Not designated                                  |       | 75%                                               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Largo  Endoscopy Center, L.P.                   |       | SARC/Largo Endoscopy, Inc.

 

Ambulatory Resource Centres Investment Company, Inc.                         |       | 2 GP Units

 

49 LPUnits

           |       | 2% (GP)

 

49.02% (LP)

               |
|                                            |       |                                                                                                                       |       |                                            |       |                                              |
| Largo  Surgery, LLC                             |       | SARC/Largo, Inc.                                                                                                      |       | 51 Class A Units                           |       | 51%                                               |

 

----

 
| **Current  Legal Entities  Owned**                    | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner**          | ** ** | **No. of Shares**                                 | ** ** | **Interest**                                 |
|-------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------|------------|---------------------------------------------------|------------|----------------------------------------------|
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| New Albany Outpatient  Surgery, L.P.                  |       | ASC  of New Albany, Inc.                                                                   |       | 60  GP Units

 

8  LP Units                 |       | 60.606%  (GP)

 

8.081%  (LP)          |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Northeast Baptist Surgery  Center, LLC                |       | SARC/San  Antonio, LLC                                                                          |       | 225  Units                                        |       | 56.87%                                       |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| NorthStar Surgical Center,  L.P.                      |       | Lubbock  SurgiCenter, Inc.

 

PSC  Development Company, LLC                          |       | 4  GP Units

 

174.9  Class A LP Units |       | 1.02%  (GP)

 

44.54481%  (LP)

  |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| One Nineteen ASC, LLC                                 |       | SMBIMS  119, LLC                                                                                |       | Not  designated                                   |       | 50%                                          |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Orlando Surgery Center II,  Ltd.                      |       | Ambulatory  Resource Centres of Florida, Inc.                                              |       | Not  designated                                   |       | 65.92%                                       |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Orlando Surgery Center Real  Estate Partnership, Ltd. |       | Ambulatory  Resource Centres of Florida, Inc.                                              |       | 30  GP Units                                      |       | 30%                                          |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| 2000 Orange Avenue, Ltd.                              |       | Orlando  Surgery Center Real Estate Partnership, Ltd.                                           |       | Not  designated                                   |       | 4%  (GP)

1%  (LP)                           |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Orthopaedic Surgery Center  of Asheville, L.P.        |       | SARC/Asheville, Inc.

 

Ambulatory  Resource Centres Investment Company, Inc.   |       | 2  GP Units

 

59  LP Units                 |       | 2%  (GP)

 

59%  (LP)

           |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Physicians Surgical  Specialty Hospital, LLC          |       | PSC  Operating Company, LLC                                                                     |       | 136.2  Class A Units                              |       | 53.7576%                                     |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Physicians Surgery Center, LLC                        |       | SARC/Ft.  Myers, Inc.                                                                      |       | Not  designated                                   |       | 50%                                          |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Pickaway Surgery Center,  Ltd.                        |       | SARC/Circleville, Inc.

 

Ambulatory  Resource Centres Investment Company, Inc. |       | 47  Units

 

6  Units                       |       | 47%

 

6%

                       |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Portsmouth, LLC                                       |       | SMBI  Portsmouth, LLC                                                                           |       | Not  designated                                   |       | 75%  Class B                            |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Recovery Care, L.P.                                   |       | Valley  Ambulatory Surgery Center, L.P.                                                         |       | Not  designated                                   |       | 99.9%  (LP)                                  |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Savannah Outpatient  Anesthesia, LLC                  |       | Savannah  Outpatient Foot and Ankle Surgery, LLC                                                |       | 100  Units                                        |       | 100%                                         |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Savannah Outpatient Foot and  Ankle Surgery, LLC      |       | SARC/Savannah, Inc.                                                                        |       | Not  designated                                   |       | 80.5%                                        |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| South Shore Operating  Company, L.L.C.                |       | PSC  Development Company, LLC

 

PSC  of New York, LLC                                    |       | 275  Units

 

5  Units                      |       | 56.122%

 

1.020%                      |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Specialty Surgical Center,  LLC                       |       | SMBISS  Beverly Hills, LLC                                                                      |       | Not  designated                                   |       | 55.12%                                       |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Specialty Surgical Center  of Beverly Hills, L.P.     |       | SMBISS  Beverly Hills, LLC                                                                      |       | Not  designated                                   |       | 0.765%  (LP)                                 |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Specialty Surgical Center  of Encino, LLC             |       | SMBISS  Encino, LLC                                                                             |       | Not  designated                                   |       | 55.02%  (Class B)                       |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Specialty Surgical Center  of Encino, L.P.            |       | SMBISS  Encino, LLC                                                                             |       | Not  designated                                   |       | 1%  (LP)                                     |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Surgery Center of  Duncanville, L.P.                  |       | Premier  Ambulatory Surgery of Duncanville, Inc.                                           |       | 77  Units                                         |       | 38.5%  (GP)                                  |
|                                                  |       |                                                                                            |       |                                              |       |                                         |
| Surgery Center of Hammond,  LLC                       |       | ASC  of Hammond, Inc.                                                                      |       | 76.5  Units                                       |       | 76.5%                                        |

 

----

 
| **Current  Legal Entities  Owned**          | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner**                                  | ** ** | **No. of Shares**                       | ** ** | **Interest**                         |
|---------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|--------------------------------------|
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Surgery  Center Partners, LLC               |       | SMBIMS Kirkwood, Inc.                                                                                              |       | 534 Units                               |       | 52.87%                               |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| The  Center for Special Surgery, LLC        |       | SMBIMS Greenville, LLC                                                                                                  |       | 70 Class B                         |       | 70%                                  |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| The  Hand Surgery Center of Louisiana, L.P. |       | SARC/Metairie, Inc.

 

Ambulatory Resource Centres Investment Company, Inc.                             |       | 2 GP Units

 

28 LP Units

  |       | 2% (GP)

 

28% (LP)

     |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| The  Surgery Center, LLC                    |       | SARC/Georgia, Inc.                                                                                                 |       | 64.92 Units                             |       | 64.92%                               |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| The  Surgery Center of Ocala, LLC           |       | Ambulatory Resource Centres Investment Company, Inc.                                                               |       | Not designated                          |       | 51%                                  |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Texarkana  Surgery Center, L.P.             |       | Texarkana Surgery Center GP, Inc.                                                                                  |       | 66.372 GP Units                         |       | 65.62% (GP)                          |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Valley  Ambulatory Surgery Center, L.P.     |       | VASC, Inc.                                                                                                         |       | Not designated                          |       | 40% (GP)                             |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Valley  Medical Inn, L.P.                   |       | Valley Ambulatory Surgery Center, L.P.                                                                                  |       | Not designated                          |       | 99.9% (LP)                           |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Valley  Sleep Center, LLC                   |       | Valley Ambulatory Surgery Center, L.P.                                                                                  |       | Not designated                          |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Valley  Surgical Center, Ltd.               |       | SMBIMS Steubenville, Inc.                                                                                          |       | Not designated                          |       | 55.93%                               |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Village  SurgiCenter, Limited Partnership   |       | PSC Operating Company, LLC

 

Village SurgiCenter, Inc.                                                      |       | Not designated                          |       | 72.0154%

 

1%                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Vincennes Surgery Center, L.P.              |       | SARC/Vincennes, Inc.                                                                                               |       | Not designated                          |       | 51.52%                               |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Wilmington  Surgery Center, L.P.            |       | Ambulatory Resource Centres of Wilmington, Inc.

 

Ambulatory Resource Centres Investment Company, Inc. |       | Not designated                          |       | 2% (GP)

 

85.25% (LP)

  |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| **SPECIFIED  SUBSIDIARIES**                 |       |                                                                                                                    |       |                                    |
| ** **                                  |       |                                                                                                                    |       |                                    |       |                                 |
| ARC  Dry Creek, Inc.                        |       | ARC Financial Services Corporation                                                                                      |       | 100                                     |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Houston  PSC – I, Inc.                 |       | PSC Operating Company, LLC                                                                                              |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| Northstar  Hospital, LLC                    |       | SMBI Northstar, LLC                                                                                                     |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| NSC  Edmond, Inc.                           |       | Symbion Ambulatory Resource Centres, Inc.                                                                          |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SARC/Columbia,  Inc.                        |       | ARC Financial Services Corporation                                                                                      |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SARC/San  Antonio, LLC                      |       | ARC Financial Services Corporation                                                                                      |       | Not designated                          |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SARC/Savannah,  Inc.                        |       | ARC Financial Services Corporation                                                                                      |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SARC/West  Houston, LLC                     |       | ARC Financial Services Corporation                                                                                      |       | Not designated                          |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SI/Dry  Creek, Inc.                         |       | Symbion Imaging, Inc.                                                                                              |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SMBIMS  Brooksville, Inc.                   |       | ARC Financial Services Corporation                                                                                      |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SMBIMS  Tuscaloosa, Inc.                    |       | ARC Financial Services Corporation                                                                                      |       | 1,000                                   |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SMBISS  Roswell, LLC                        |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                                 |
|                                        |       |                                                                                                                    |       |                                    |       |                                 |
| SMBISS  Sandy Springs, LLC                  |       | SymbionARC Management Services, Inc.                                                                               |       | Not designated                          |       | 100%                                 |

 

----

 
| **Current  Legal Entities  Owned** | ** ** | **Loan Party, Qualified Restricted  Subsidiary or Specified  Subsidiary Record Owner** | ** ** | **No. of Shares** | ** ** | **Interest** |
|------------------------------------|------------|----------------------------------------------------------------------------------------|------------|-------------------|------------|--------------|
|                               |       |                                                                                   |       |              |       |         |
| Symbion  Imaging, Inc.             |       | Symbion, Inc.                                                                     |       | 1,000             |       | 100%         |
|                               |       |                                                                                   |       |              |       |         |
| TOSF,  LLC                         |       | SMBIMS Tampa, LLC                                                                      |       | 100 Units         |       | 100%         |

 

**IMMATERIAL SUBSIDIARIES**

 

None.

 

----

 

**SCHEDULE 5.01**

 

**WEBSITE ADDRESS**

 

http://www.symbion.com/

 

----

 

**SCHEDULE 6.01**

 

**EXISTING INDEBTEDNESS**

 

1.             Capital Lease Agreement,dated 10/1/2006, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Orlando Surgery Center II, Ltd.  (Balance as of June 30, 2007: $47,797).

 

2.             Capital Lease Agreement,dated 10/1/2006, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Village SurgiCenter, LimitedPartnership.  (Balance as of June 30,2007: $179,650).

 

3.             Capital Lease Agreement,dated 10/1/2006, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Largo Endoscopy Center, L.P.  (Balance as of June 30, 2007: $141,147).

 

4.             Capital Lease Agreement,dated 10/1/2006, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Bayside Endoscopy Center, LLC.  (Balance as of June 30, 2007: $18,335).

 

5.             Capital Lease Agreement,dated 6/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Bayside Endoscopy Center, LLC.  (Balance as of June 30, 2007:  $109,603).

 

6.             Capital Lease Agreement,dated 6/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Pickaway Surgical Center, Ltd.(Balance as of June 30, 2007: $169,204).

 

7.             Capital Lease Agreement,dated 6/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Orlando Surgery Center II, Ltd..  (Balance as of June 30, 2007: $55,468).

 

8.             Capital Lease Agreement,dated 6/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Largo Endoscopy Center, L.P.  (Balance as of June 30, 2007:  $60,051).

 

9.             Capital Lease Agreement,dated 7/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of The Surgery Center, LLC  (Balance as of June 30, 2007:  $53,834).

 

10.           Capital Lease Agreement,dated 8/1/2007, between LaSalle National Leasing Corporation (Lessor) andSymbion, Inc. (Lessee) on behalf of Valley Surgical Center, Ltd. (Balanceas of June 30, 2007:  $153,105).

 

11.           Loan and Security Agreement,dated 12/8/2004, between Fifth Third Bank (Lender) and Symbion Inc. (Borrower)on behalf of ARC Worcester Center, L.P. (Balance as of June 30, 2007: $91,721).

 

12.           Loan and Security Agreement,dated 12/23/2004, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of The Surgery Center Of Ocala, LLC.  (Balance as of June 30, 2007: $84,442).

 

----

 

13.           Loan and Security Agreement,dated 4/22/2005, between Fifth Third Bank (Lender) and  Symbion, Inc. (Borrower) on behalf ofVillage SurgiCenter, Limited Partnership (Balance as of June 30, 2007:  $75,922).

 

14.           Capital Lease Agreement,dated 3/17/2004, between Fifth Third Leasing Company (Lessor) and Symbion, Inc.(Lessee) on behalf of Uniphy Healthcare of Memphis III, Inc.  (Balance as of June 30, 2007:  $42,174).

 

15.           Loan and Security Agreement,dated 8/1/2005, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of South Shore Operating Company, L.L.C.  (Balance as of June 30, 2007:  $178,975).

 

16.           Loan and Security Agreement,dated 8/1/2005, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of Dry Creek Surgery Center, LLC  (Balance as of June 30, 2007:  $32,389).

 

17.           Loan and Security Agreement,dated 9/10/2005, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of ARC Worcester Center, L.P.  (Amount: $30,114).

 

18.           Loan and Security Agreement,dated 9/10/2005, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of Valley Surgical Center, Ltd. (Balance as of June 30,2007:  $119,796).

 

19.           Loan and Security Agreement,dated 12/2/2005, between Fifth Third Bank (Lender) and Symbion Inc. (Borrower)on behalf of ARC Worcester Center, L.P. (Balance as of June 30, 2007: $106,682).

 

20.           Loan and Security Agreementdated 12/22/2005, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of Largo Surgery, LLC. (Balance as of June 30, 2007: $152,828).

 

21.           Loan and Security Agreement,dated 2/14/2006, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of ARC of Bellingham, L.P. (Balance as of June 30,2007: $17,924).

 

22.           Loan and Security Agreement,dated 2/14/2006, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of Village SurgiCenter, Limited Partnership.  (Balance as of June 30, 2007:  $60,928).

 

23.           Loan and Security Agreement,dated October 29, 2004, between Fifth Third Bank (Lender) and Symbion, Inc.(Borrower) on behalf of Bayside Endoscopy Center, LLC  (Balance as of June 30, 2007: $71,745).

 

24.           Capital Lease Agreement,dated April 29, 2004, between Ameritech Credit Corporation (Lessor) andSpecialty Surgical Center, LLC (Lessee). (Balance as of June 30, 2007: $39,415).

 

25.           Capital Lease Agreement,dated September 15, 2006, between Olympus America Inc. (Lessor) andSpecialty Surgical Center of Beverly Hills, L.P. (Lessee).  (Balance as of June 30, 2007: $375,575).

 

----

 

26.           Capital Lease Agreement,dated December 4, 2006, between Olympus America Inc. (Lessor) andSpecialty Surgical Center of Encino, LLC (Lessee).  (Balance as of June 30, 2007: $54,291).

 

27.           Capital Lease Agreement,dated February 9, 2004, between Alcon Laboratories Inc. (Lessor) andSpecialty Surgical Center of Encino, LLC (Lessee).  (Balance as of June 30, 2007: $32,979).

 

28.           Capital Lease Agreement,dated May 28, 2003, between Siemens Medical Solutions USA, Inc.(Lessor) and Animas Surgical Hospital, LLC (Lessee).  (Balance as of June 30, 2007:$1,512,230).

 

29.           Capital Lease Agreement,dated December 18, 2002, between GE Healthcare Financial Services (Lessor)and The Surgery Center, LLC (Lessee). (Balance as of June 30, 2007: $11,670).

 

30.           Note Payable, dated January 4,2002, between US Bank Portfolio Services, formerly DVI Financial Services, Inc.(Lender), and Deland Surgery Center, Ltd. (Borrower).  (Balance as of June 30, 2007: $16,377).

 

31.           Note Payable, dated September 8,2006, between Alcon Laboratories Inc. (Lender) and The Surgery Center, LLC(Borrower).  (Balance as of June 30,2007: $46,790).

 

32.           Capital Lease Agreement,dated February 7, 2007, between Olympus America Inc. (Lessor) and BaysideEndoscopy Center, LLC (Lessee).  (Balanceas of June 30, 2007:  $123,205).

 

33.           Capital Lease Agreement,dated December 12, 2005, between Stryker Capital (Lessor) and VillageSurgiCenter, Inc. (Lessee). (Balance as of June 30, 2007: $123,066).

 

34.           Loan and Security Agreement,dated June 15, 2004, between Bank of Colorado (Lender) and Animas SurgicalHospital, LLC (Borrower)  (Balance as of June 30,2007:  $1,267,841).

 

35.           Loan and Security Agreement,dated July 22, 2006, between SunTrust Bank (Lender) and Cape CoralAmbulatory Surgery Center, LLC (Borrower) (Balance as of June 30, 2007: $1,731,482).

 

36.           Loan and Security Agreement,dated April 28, 2003, between Synergy Bank (Lender) and PhysiciansSurgical Specialty Hospital, LLC (Borrower) (Balance as of June 30, 2007: $237,050).

 

37.           Loan and Security Agreement,dated June 16, 2005, between Synergy Bank (Lender) and Physicians SurgicalSpecialty Hospital, LLC (Borrower) (Balance as of June 30, 2007: $3,625,670).

 

38.           Loan and Security Agreement,dated January 23, 2007, between Synergy Bank (Lender) and PhysiciansSurgical Specialty Hospital, LLC (Borrower) (Balance as of June 30, 2007: $2,126,187).

 

----

 

39.           Capital Lease Agreement,dated May 27, 2005, between General Electric Capital Corporation (Lessor)and Cape Coral Ambulatory Surgery Center, LLC (Lessee).  (Balance as of June 30, 2007:  $122,820).

 

----

 

**SCHEDULE 6.02**

 

**EXISTING LIENS**

 

**Debtor:  Symbion, Inc.**

 
| **Jurisdiction** | ** ** | **Result**                    | ** ** | **Date of Filing**             | ** ** | **Filing Number**              | ** ** | **Secured Party**                                          | ** ** | **Collateral**                                                                |
|------------------|------------|-------------------------------|------------|--------------------------------|------------|--------------------------------|------------|------------------------------------------------------------|------------|-------------------------------------------------------------------------------|
| ** **       | ** ** | ** **                    | ** ** | ** **                     | ** ** | ** **                     | ** ** | ** **                                                 | ** ** | ** **                                                                    |
| DE SOS           |       | UCC-1                         |       | 04/06/04                       |       | 40959405                       |       | The Fifth Third Leasing Company                            |       | equipment                                                                     |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *amendment             |       | 06/08/04  *05/01/07            |       | 41575754  *71630127            |       | The Fifth Third Leasing Company and Fifth Third Bank, N.A. |       | equipment    *changed address of secured party                                |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *amendment             |       | 12/02/04  *05/01/07            |       | 43380302  *71630044            |       | The Fifth Third Leasing Company and Fifth Third Bank, N.A. |       | equipment  *changed address of secured party                                  |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *amendment             |       | 01/04/05  *05/01/07            |       | 50020660  *71630193            |       | The Fifth Third Leasing Company and Fifth Third Bank, N.A. |       | equipment  *changed address of secured party                                  |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *amendment             |       | 01/04/05  *05/01/07            |       | 50021213  *71630184            |       | The Fifth Third Leasing Company and Fifth Third Bank, N.A. |       | equipment  *changed address of secured party                                  |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *termination           |       | 04/04/05  *04/04/05            |       | 51017285  *51017640            |       | The Fifth Third Leasing Company and Fifth Third Bank, N.A. |       | equipment                                                                     |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1  *amendment  *amendment |       | 04/04/05  *09/15/05  *09/16/05 |       | 51017459  *52854967  *52952662 |       | Fifth Third Bank (Tennessee)                               |       | equipment  *restated collateral description  *restated collateral description |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 04/04/05                       |       | 51018051                       |       | Fifth Third Bank (Tennessee)                               |       | medical  and surgical equipment                                               |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 08/05/05                       |       | 52430354                       |       | Fifth Third Bank (Tennessee)                               |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 08/05/05                       |       | 52430370                       |       | Fifth Third Bank (Tennessee)                               |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 12/09/05                       |       | 53815702                       |       | Fifth Third Bank, N.A.                                     |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 12/30/05                       |       | 54062411                       |       | Fifth Third Bank, N.A.                                     |       | medical  imaging equipment                                                    |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 02/27/06                       |       | 60670026                       |       | Fifth Third Bank, N.A.                                     |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 02/27/06                       |       | 60670042                       |       | Fifth Third Bank, N.A.                                     |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 02/27/06                       |       | 60670133                       |       | Fifth Third Bank, N.A.                                     |       | medical  equipment                                                            |
|             |       |                          |       |                           |       |                           |       |                                                       |       |                                                                          |
|             |       | UCC-1                         |       | 08/18/06                       |       | 62886307                       |       | LaSalle National Leasing Corporation                       |       | equipment                                                                     |

 

----

 
|   |   | UCC-1  |   | 08/18/06 |   | 62886372  |   | LaSalle National Leasing Corporation                |   | equipment                  |
|--------|--------|--------|--------|----------|--------|-----------|--------|-----------------------------------------------------|--------|----------------------------|
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 08/18/06 |   | 62886380  |   | LaSalle National Leasing Corporation                |   | equipment                  |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 10/06/06 |   | 63466547  |   | LaSalle National Leasing Corporation                |   | equipment                  |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 10/06/06 |   | 63466604  |   | LaSalle National Leasing Corporation                |   | medical  equipment         |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 05/04/07 |   | 71682771  |   | LaSalle National Leasing Corporation                |   | equipment                  |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 05/04/07 |   | 71682789  |   | LaSalle National Leasing Corporation                |   | surgical  center equipment |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 05/04/07 |   | 71682797  |   | LaSalle National Leasing Corporation                |   | surgical  center equipment |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 05/04/07 |   | 71682805  |   | LaSalle National Leasing Corporation                |   | surgical  center equipment |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 06/20/07 |   | 72330420  |   | LaSalle National Leasing Corporation                |   | surgical  center equipment |
|   |   |   |   |     |   |      |   |                                                |   |                       |
| TN SOS |   | UCC-1  |   | 09/20/02 |   | 302054062 |   | US Bank, N.A. and DVI Financial Services, Inc. |   | equipment                  |
|   |   |   |   |     |   |      |   |                                                |   |                       |
|   |   | UCC-1  |   | 09/20/02 |   | 302054063 |   | US Bank, N.A. and DVI Financial Services, Inc. |   | equipment                  |

 

**Debtor: Ambulatory Surgery Center of Worcester, LLC**

 
| **Jurisdiction** | ** ** | **Result**        | ** ** | **Date of Filing**  | ** ** | **Filing Number**   | ** ** | **Secured Party**            | ** ** | **Collateral**                         |
|------------------|------------|-------------------|------------|---------------------|------------|---------------------|------------|------------------------------|------------|----------------------------------------|
|             |       |              |       |                |       |                |       |                         |       |                                   |
| DE SOS           |       | UCC-1  *amendment |       | 03/21/07  *04/23/07 |       | 71137628  *71578284 |       | Meridian Leasing Corporation |       | equipment  *added additional equipment |

 

**Debtor:  AnimasSurgical Hospital, LLC**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**       | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **              | ** ** | ** **     |
| DE SOS           |       | UCC-1      |       | 05/22/07           |       | 71924587          |       | Dade Behring, Inc. |       | equipment      |

 

----

 

**Debtor:  ARC ofBellingham, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**              | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|--------------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                     | ** ** | ** **     |
| TN SOS           |       | UCC-1      |       | 03/29/06           |       | 206017082         |       | Alcon  Laboratories, Inc. |       | equipment      |
|             |       |       |       |               |       |              |       |                           |       |           |
|             |       | UCC-1      |       | 09/06/06           |       | 206055538         |       | Stryker  Capital               |       | equipment      |

 

**Debtor:  ARCWorcester Center, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**                       | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-----------------------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                              | ** ** | ** **     |
| TN SOS           |       | UCC-1      |       | 07/29/03           |       | 103033603         |       | American Express Business Finance Corp. |       | equipment      |

 

**Debtor:  BaysideEndoscopy Center, LLC**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**           | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-----------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                  | ** ** | ** **     |
| RI SOS           |       | UCC-1      |       | 11/27/02           |       | 015633            |       | Olympus  America, Inc. |       | equipment      |
|             |       |       |       |               |       |              |       |                        |       |           |
|             |       | UCC-1      |       | 02/06/07           |       | 200704603970      |       | Olympus  America, Inc. |       | equipment      |

 

**Debtor:  DeLandSurgery Center, Ltd.**

 
| **Jurisdiction** | ** ** | **Result**           | ** ** | **Date of Filing**  | ** ** | **Filing Number**           | ** ** | **Secured Party**      | ** ** | **Collateral**   |
|------------------|------------|----------------------|------------|---------------------|------------|-----------------------------|------------|------------------------|------------|------------------|
| ** **       | ** ** | ** **           | ** ** | ** **          | ** ** | ** **                  | ** ** | ** **             | ** ** | ** **       |
| FL SOS           |       | UCC-1  *continuation |       | 02/27/02  *10/02/06 |       | 200200477089  *200603788341 |       | US  Bank Trust, N.A.   |       | equipment        |
|             |       |                 |       |                |       |                        |       |                   |       |             |
|             |       | UCC-1                |       | 10/22/02            |       | 200202463581                |       | US  Bancorp            |       | equipment        |
|             |       |                 |       |                |       |                        |       |                   |       |             |
|             |       | UCC-1  *continuation |       | 02/27/02  *10/02/06 |       | 200200477070  *20060378835X |       | US  Bank Trust, N.A.   |       | equipment        |
|             |       |                 |       |                |       |                        |       |                   |       |             |
|             |       | UCC-1                |       | 10/28/02            |       | 20020249892X                |       | US  Bancorp            |       | equipment        |
|             |       |                 |       |                |       |                        |       |                   |       |             |
|             |       | UCC-1                |       | 11/18/03            |       | 200305485200                |       | Bank  of America, N.A. |       | equipment        |
|             |       |                 |       |                |       |                        |       |                   |       |             |
|             |       | UCC-1                |       | 04/04/06            |       | 200602288019                |       | US  Bancorp            |       | equipment  lease |

 

----

 

**Debtor:  Dry CreekSurgery Center, LLC**

 
| **Jurisdiction** | ** ** | **Result**         | ** ** | **Date of Filing**  | ** ** | **Filing Number**         | ** ** | **Secured Party**                                             | ** ** | **Collateral** |
|------------------|------------|--------------------|------------|---------------------|------------|---------------------------|------------|---------------------------------------------------------------|------------|----------------|
| ** **       | ** ** | ** **         | ** ** | ** **          | ** ** | ** **                | ** ** | ** **                                                    | ** ** | ** **     |
| CO SOS           |       | UCC-1              |       | 01/31/03            |       | 20032011449               |       | Baxter  Healthcare Corp                                       |       | equipment      |
|             |       |               |       |                |       |                      |       |                                                          |       |           |
|             |       | UCC-1              |       | 02/04/03            |       | 20032012921               |       | Baxter  Healthcare Corp                                       |       | equipment      |
|             |       |               |       |                |       |                      |       |                                                          |       |           |
|             |       | UCC-1  *assignment |       | 09/15/04  *09/13/05 |       | 20042101845  *20052095373 |       | Sound  Surgical Technologies, LLC***assigned to US Bankcorp** |       | equipment      |

 

**Debtor:  LargoSurgery, LLC**

 
| **Jurisdiction** | ** ** | **Result**                                   | ** ** | **Date of Filing**                        | ** ** | **Filing Number**                                        | ** ** | **Secured Party**                   | ** ** | **Collateral**                                                                                     |
|------------------|------------|----------------------------------------------|------------|-------------------------------------------|------------|----------------------------------------------------------|------------|-------------------------------------|------------|----------------------------------------------------------------------------------------------------|
| ** **       | ** ** | ** **                                   | ** ** | ** **                                | ** ** | ** **                                               | ** ** | ** **                          | ** ** | ** **                                                                                         |
| FL SOS           |       | UCC-1  *amendment  *amendment  *continuation |       | 03/30/01  *07/08/02  *07/11/02  *03/31/06 |       | 200100070128   *200201611579 *200201635613 *200602253991 |       | Olympus  America, Inc.         |       | equipment  *added equipment to collateral description   *added equipment to collateral description |
|             |       |                                         |       |                                      |       |                                                     |       |                                |       |                                                                                               |
|             |       | UCC-1  *amendment                            |       | 11/01/05  *11/30/05                       |       | 200501060497  *200501282708                              |       | ARC  Financial Services Corporation |       | equipment  referenced (no exhibit attached)  *added exhibit with equipment description             |

 

**Debtor:  NewAlbany Outpatient Surgery, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**            | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|------------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                   | ** ** | ** **     |
| DE SOS           |       | UCC-1      |       | 12/04/02           |       | 23180639          |       | Preferred Capital, Inc. |       | equipment      |

 

----

 

**Debtor: Northstar Surgical Center, L.P.**

 
| **Jurisdiction** | ** ** | **Result**                 | ** ** | **Date of Filing**           | ** ** | **Filing Number**                   | ** ** | **Secured Party**             | ** ** | **Collateral**                                  |
|------------------|------------|----------------------------|------------|------------------------------|------------|-------------------------------------|------------|-------------------------------|------------|-------------------------------------------------|
|             |       |                       |       |                         |       |                                |       |                          |       |                                            |
| TX SOS           |       | UCC-1                      |       | 03/21/03                     |       | 03-0021502245                       |       | Baxter Healthcare Corporation |       | equipment  lease                                |
|             |       |                       |       |                         |       |                                |       |                          |       |                                            |
|             |       | UCC-1

 

*correction |       | 04/11/03 

 

*04/16/04 |       | 03-0024008633

 

*04-00643182 |       | Olympus America, Inc.    |       | equipment  

 

*Filing  Officer Statement |
|             |       |                       |       |                         |       |                                |       |                          |       |                                            |
|             |       | UCC-1                      |       | 05/27/04                     |       | 04-0069469856                       |       | Stryker Capital               |       | equipment                                       |
|             |       |                       |       |                         |       |                                |       |                          |       |                                            |
|             |       | UCC-1                      |       | 10/05/04                     |       | 04-0084098093                       |       | Olympus America, Inc.    |       | equipment                                       |
|             |       |                       |       |                         |       |                                |       |                          |       |                                            |
|             |       | UCC-1                      |       | 04/11/05                     |       | 05-0011114093                       |       | Olympus America, Inc.    |       | equipment                                       |

 

**Debtor:  OrlandoSurgery Center II, Ltd.**

** **
| **Jurisdiction** | ** ** | **Result**                               | ** ** | **Date of Filing**                      | ** ** | **Filing Number**                                   | ** ** | **Secured Party**    | ** ** | **Collateral**                                                |
|------------------|------------|------------------------------------------|------------|-----------------------------------------|------------|-----------------------------------------------------|------------|----------------------|------------|---------------------------------------------------------------|
|             |       |                                     |       |                                    |       |                                                |       |                 |       |                                                          |
| FL SOS           |       | UCC-1 

 

*amendment *continuation |       | 02/15/99 

 

*01/27/04 *01/27/04  |       | 990000035000 

 

*200406010577 *200406010593  |       | Finova  Capital Corp |       | equipment

 

*changed  mailing address of secured party |
|             |       |                                     |       |                                    |       |                                                |       |                 |       |                                                          |
|             |       | UCC-1

 

*amendment *continuation  |       | 06/07/99 

 

*01/27/04

*01/27/04 |       | 990000129087 

 

*200406010569

*200406010585 |       | Finova  Capital Corp |       | equipment

 

*changed  mailing address of secured party |
|             |       |                                     |       |                                    |       |                                                |       |                 |       |                                                          |
|             |       | UCC-1                                    |       | 10/12/06                                |       | 200603882968                                        |       | US  Bancorp          |       | equipment  lease                                              |

** **

**Debtor: Physicians Surgical Specialty Hospital, LLC**

 
| **Jurisdiction**        | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**             | ** ** | **Collateral**                                   |
|-------------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-------------------------------|------------|--------------------------------------------------|
| ** **              | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                    | ** ** | ** **                                       |
| LA Central Filing Index |       | UCC-1      |       | 03/11/03           |       | 09-1019428        |       | Baxter Healthcare Corporation |       | equipment  (filing made in Caddo Parish, LA)     |
|                    |       |       |       |               |       |              |       |                          |       |                                             |
|                    |       | UCC-1      |       | 03/11/03           |       | 09-1019430        |       | Baxter Healthcare Corporation |       | equipment  (filing made in Caddo Parish, LA)     |
|                    |       |       |       |               |       |              |       |                          |       |                                             |
|                    |       | UCC-1      |       | 05/12/03           |       | 29-936493         |       | Synergy Bank                  |       | equipment  (filing made in Lafourche Parish, LA) |
|                    |       |       |       |               |       |              |       |                          |       |                                             |
|                    |       | UCC-1      |       | 06/05/03           |       | 29-938087         |       | Synergy Bank                  |       | equipment  (filing made in Lafourche Parish, LA) |

 

----

 

**Debtor: Specialty Surgical Center, LLC**

 
| **Jurisdiction** | ** ** | **Result**                                        | ** ** | **Date of Filing**                                | ** ** | **Filing Number**                                         | ** ** | **Secured Party**                       | ** ** | **Collateral**                                                                                                     |
|------------------|------------|---------------------------------------------------|------------|---------------------------------------------------|------------|-----------------------------------------------------------|------------|-----------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|
| ** **       | ** ** | ** **                                        | ** ** | ** **                                        | ** ** | ** **                                                | ** ** | ** **                              | ** ** | ** **                                                                                                         |
| CA SOS           |       | UCC-1

 

*continuation                      |       | 11/20/98

 

*11/19/03                       |       | 9832760679

 

*03325C0205                           |       | Bankers  Trust Co.                      |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1

 

*continuation                      |       | 11/25/98

 

*11/20/03                       |       | 9833460120

 

*03328C0646                           |       | Heritage  Financial Services            |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 07/15/02                                          |       | 0219760991                                                |       | US  Bancorp                             |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 09/27/02                                          |       | 0227360533                                                |       | Richard  Wolf Medical Instruments Corp. |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 01/02/04                                          |       | 0400860576                                                |       | Ameritech  Credit Corporation           |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 01/02/04                                          |       | 0400860578                                                |       | Ameritech  Credit Corporation           |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 01/02/04                                          |       | 0400860585                                                |       | Ameritech  Credit Corp                  |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1

 

*amendment

*amendment

*amendment |       | 03/29/04

 

*10/06/04

*11/20/04

*11/20/04 |       | 0409860590

 

*0470050184

*0470049977

*0470050278 |       | Alcon  Laboratories, Inc.          |       | equipment

 

*added  equipment

*filing  number generated incorrectly

*filing  number generated incorrectly |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 05/24/04                                          |       | 0415660326                                                |       | Ameritech  Credit Corporation           |       | equipment                                                                                                          |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 01/20/06                                          |       | 067056213393                                              |       | ARC  Financial Services Corp            |       | all  assets of Debtor                                                                                              |
|             |       |                                              |       |                                              |       |                                                      |       |                                    |       |                                                                                                               |
|             |       | UCC-1                                             |       | 01/16/07                                          |       | 077089782513                                              |       | Alcon  Laboratories, Inc.          |       | equipment                                                                                                          |

 

**Debtor: Specialty Surgical Center of Encino, LLC**

 
| **Jurisdiction** | ** ** | **Result**                | ** ** | **Date of Filing**          | ** ** | **Filing Number**                 | ** ** | **Secured Party**                       | ** ** | **Collateral**                                  |
|------------------|------------|---------------------------|------------|-----------------------------|------------|-----------------------------------|------------|-----------------------------------------|------------|-------------------------------------------------|
| ** **       | ** ** | ** **                | ** ** | ** **                  | ** ** | ** **                        | ** ** | ** **                              | ** ** | ** **                                      |
| CA SOS           |       | UCC-1                     |       | 07/15/02                    |       | 0219760983                        |       | US  Bancorp                             |       | equipment                                       |
|             |       |                      |       |                        |       |                              |       |                                    |       |                                            |
|             |       | UCC-1                     |       | 09/27/02                    |       | 02287360521                       |       | Richard  Wolf Medical Instruments Corp. |       | equipment                                       |
|             |       |                      |       |                        |       |                              |       |                                    |       |                                            |
|             |       | UCC-1

 

*amendment |       | 12/08/06

 

*12/13/06 |       | 067094739469

 

*0670952805 |       | Olympus  America, Inc.             |       | equipment

 

*added  additional equipment |

 

----

 

**Debtor: Specialty Surgical Center of Encino, L.P.**

 
| **Jurisdiction** | ** ** | **Result**                                           | ** ** | **Date of Filing**                                | ** ** | **Filing Number**                                         | ** ** | **Secured Party**              | ** ** | **Collateral**                                                                |
|------------------|------------|------------------------------------------------------|------------|---------------------------------------------------|------------|-----------------------------------------------------------|------------|--------------------------------|------------|-------------------------------------------------------------------------------|
| ** **       | ** ** | ** **                                           | ** ** | ** **                                        | ** ** | ** **                                                | ** ** | ** **                     | ** ** | ** **                                                                    |
|             |       | UCC-1

 

*amendment

*amendment

*continuation |       | 11/02/01

 

*02/18/04

*02/19/04

*06/28/06 |       | 0131060022

 

*04055C0570

*04056C0188

*0670756801 |       | Alcon  Laboratories, Inc. |       | equipment  

 

*added  additional equipment  *changed address of Debtor |
|             |       |                                                 |       |                                              |       |                                                      |       |                           |       |                                                                          |
|             |       | UCC-1                                                |       | 07/15/02                                          |       | 0219760983                                                |       | US  Bancorp                    |       | equipment                                                                     |

 

**Debtor:  SurgeryCenter of Duncanville, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party** | ** ** | **Collateral**   |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-------------------|------------|------------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **        | ** ** | ** **       |
| TX SOS           |       | UCC-1      |       | 08/12/02           |       | 02-0040402911     |       | FirstBank         |       | equipment  lease |

 

**Debtor:  SymbionAmbulatory Resource Centres, Inc.**

 
| **Jurisdiction** | ** ** | **Result**                 | ** ** | **Date of Filing**          | ** ** | **Filing Number**             | ** ** | **Secured Party**                                                         | ** ** | **Collateral** |
|------------------|------------|----------------------------|------------|-----------------------------|------------|-------------------------------|------------|---------------------------------------------------------------------------|------------|----------------|
| ** **       | ** ** | ** **                 | ** ** | ** **                  | ** ** | ** **                    | ** ** | ** **                                                                | ** ** | ** **     |
| TN SOS           |       | UCC-1

 

*assignment |       | 04/05/07

 

*06/06/07 |       | 207057714

 

*107028822 |       | Smith & Nephew Capital

 

*assigned to First Security Bank |       | equipment      |

 

**Debtor:  TheSurgery Center, LLC**

 
| **Jurisdiction**         | ** ** | **Result**                 | ** ** | **Date of Filing**           | ** ** | **Filing Number**                          | ** ** | **Secured Party**                      | ** ** | **Collateral**                                                                           |
|--------------------------|------------|----------------------------|------------|------------------------------|------------|--------------------------------------------|------------|----------------------------------------|------------|------------------------------------------------------------------------------------------|
| ** **               | ** ** | ** **                 | ** ** | ** **                   | ** ** | ** **                                 | ** ** | ** **                             | ** ** | ** **                                                                               |
| GA Cooperative Authority |       | UCC-1                      |       | 10-31-02                     |       | 106-2002-002363                            |       | GE Capital Corporation                 |       | equipment                                                                                |
|                     |       |                       |       |                         |       |                                       |       |                                   |       |                                                                                     |
|                     |       | UCC-1 

 

*amendment |       | 04/27/05 

 

*07/13/05 |       | 007-2005-006296 

 

*007-2005-010494 |       | American Express Business Finance Corp |       | equipment  

 

*changed  name of Secured Party to Key Equipment Finance, Inc. |
|                     |       |                       |       |                         |       |                                       |       |                                   |       |                                                                                     |
|                     |       | UCC-1                      |       | 07/10/06                     |       | 106-2006-001561                            |       | Smith & Nephew Capital        |       | equipment                                                                                |
|                     |       |                       |       |                         |       |                                       |       |                                   |       |                                                                                     |
|                     |       | UCC-1                      |       | 10/05/06                     |       | 007-2006-018184                            |       | Alcon Laboratories, Inc.          |       | equipment                                                                                |

 

----

 

**Debtor:  TheSurgery Center of Ocala, LLC**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**                    | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|--------------------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                           | ** ** | ** **     |
| TN SOS           |       | UCC-1      |       | 01/15/02           |       | 202003017         |       | Stryker Capital                      |       | equipment      |
|             |       |       |       |               |       |              |       |                                 |       |           |
|             |       | UCC-1      |       | 04/03/02           |       | 302017643         |       | US Bank Trust, N.A.                  |       | equipment      |
|             |       |       |       |               |       |              |       |                                 |       |           |
|             |       | UCC-1      |       | 04/03/02           |       | 302017644         |       | US Bank Trust, N.A.                  |       | equipment      |
|             |       |       |       |               |       |              |       |                                 |       |           |
|             |       | UCC-1      |       | 02/19/03           |       | 203009034         |       | Baxter Healthcare Corporation        |       | equipment      |
|             |       |       |       |               |       |              |       |                                 |       |           |
|             |       | UCC-1      |       | 10/20/03           |       | 203057676         |       | General Electric Capital Corporation |       | equipment      |

 

**Debtor:  ValleyAmbulatory Surgery Center, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**    | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|----------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **           | ** ** | ** **     |
| IL SOS           |       | UCC-1      |       | 03/21/07           |       | 011912338         |       | Marlin Leasing Corp. |       | equipment      |

 

**Debtor:  ValleyMedical Inn, L.P.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**    | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|----------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **           | ** ** | ** **     |
| IL SOS           |       | UCC-1      |       | 03/21/07           |       | 11912389          |       | Marlin Leasing Corp. |       | equipment      |

 

**Debtor:  ValleySurgical Center, Ltd.**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party**             | ** ** | **Collateral** |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-------------------------------|------------|----------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **                    | ** ** | ** **     |
| OH SOS           |       | UCC-1      |       | 09/03/02           |       | OH00053796119     |       | HPSC, Inc.               |       | equipment      |
|             |       |       |       |               |       |              |       |                          |       |           |
|             |       | UCC-1      |       | 10/08/02           |       | OH00055125089     |       | Alcon Laboratories, Inc. |       | equipment      |

 

----

 

**Debtor:  VillageSurgiCenter, Limited Partnership**

 
| **Jurisdiction** | ** ** | **Result** | ** ** | **Date of Filing** | ** ** | **Filing Number** | ** ** | **Secured Party** | ** ** | **Collateral**                                                                                                                                                                           |
|------------------|------------|------------|------------|--------------------|------------|-------------------|------------|-------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ** **       | ** ** | ** ** | ** ** | ** **         | ** ** | ** **        | ** ** | ** **        | ** ** | ** **                                                                                                                                                                               |
| DE SOS           |       | UCC-1      |       | 02/23/04           |       | 40491284          |       | U.S. Bank, N.A.   |       | “in-lieu”  filing to continue effectiveness of PA filings made on 3/7/2000-file no  31360377 and on 3/9/2000-file no: 20376-00 for future building materials and  improvements |
|             |       |       |       |               |       |              |       |              |       |                                                                                                                                                                                     |
|             |       | UCC-1      |       | 02/23/04           |       | 40491292          |       | U.S. Bank, N.A.   |       | “in-lieu”  filing to continue effectiveness of PA filings made on 3/7/2000-file no  3136038 and on 3/9/2000-file no: 20380-00 for equipment                                    |
|             |       |       |       |               |       |              |       |              |       |                                                                                                                                                                                     |
|             |       | UCC-1      |       | 02/23/04           |       | 40491300          |       | U.S. Bank, N.A.   |       | “in-lieu”  filing to continue effectiveness of PA filings made on 10/12/2000-file no  31371711 and on 10/16/2000-file no: 21677-00 for equipment                               |
|             |       |       |       |               |       |              |       |              |       |                                                                                                                                                                                     |
|             |       | UCC-1      |       | 12/22/05           |       | 54059326          |       | Stryker Capital   |       | equipment                                                                                                                                                                                |

 

----

 

**SCHEDULE 6.04**

 

**EXISTING INVESTMENTS**

 

Investment made by SMBISS Thousand Oaks, LLC inSpecialty Surgical Center of Thousand Oaks, LLC in the amount of $5,011.46.

 

Investment made by SMBISS Irvine, LLC in SpecialtySurgical Center of Irvine, LLC in the amount of $1,428,109.51.

 

Investment made by SMBISS Irvine, LLC in SpecialtySurgical Center of Irvine, L.P. in the amount of $156,999.30.

 

Investment made by SMBISS Arcadia, LLC in SpecialtySurgical Center of Arcadia, LLC in the amount of $712,897.99.

 

Investment made by SMBISS Arcadia, LLC in SpecialtySurgical Center of Arcadia, L.P. in the amount of $17,866.94.

 

Investment made by SARC/Knoxville, Inc. inUniversity Ambulatory Surgical Center in the amount of $294,325.97.

 

Investment made by MediSphere Health Partners —Oklahoma City, Inc. in Lakeside Women’s Center of Oklahoma City, L.L.C. inthe amount of $4,969,273.85.

 

Investment made by Symbion Ambulatory ResourceCentres, Inc. in Ambulatory Surgery Center of Cool Springs, LLC in theamount of $573,776.48.

 

Investment made by SMBIMS Florida I, LLC in CapeCoral Ambulatory Surgery Center, LLC in the amount of $866,354.86.

 

Investment made by SMBIMS Novi, LLC in Novi SurgeryCenter, LLC in the amount of $3,808,536.09.

 

Investment made by SMBIMS Temple, LLC in The SurgeryCenter of Temple, LLC in the amount of $101,000.00.

 

Investment made by SMBIMS Maple Grove, LLC inFairview Maple Grove Surgery Center, LLC in the amount of $12,549.35.

 

Investment made by SMBISS Chesterfield, LLC inChesterfield Spine Center, LLC in the amount of $140,218.79.

 

----

 

**SCHEDULE 6.05**

 

**SALES, TRANSFERS AND DISPOSITIONS**

 

Divestitures:

 

1.                                       Dry CreekSurgery Center, LLC (Englewood, CO)

 

2.                                       NortheastBaptist Surgery Center, LLC (San Antonio, TX)

 

3.                                       SavannahOutpatient Foot and Ankle Surgery Center, LLC (Savannah, GA)

 

Dissolutions:

 

1.                                       SMBIMS Tuscaloosa, Inc.

 

2.                                       SARC/Columbia, Inc.

 

3.                                       SMBISS Sandy Springs, LLC

 

4.                                       SMBISS Roswell, LLC

 

5.                                       Houston PSC - I, Inc.

 

----

 

**SCHEDULE 6.08**

 

**OUTSTANDING WARRANTS**

 
| **WARRANT HOLDER** | ** ** | **WARRANTS (A)** | ** ** | **WARRANTS (B)** | ** ** | **WARRANTS (C)** | ** ** | **TOTAL  WARRANTS** | ** ** |
|--------------------|------------|------------------|------------|------------------|------------|------------------|------------|---------------------|------------|
| *                  |       | —           |       | —           |       | 423              |       | 423                 |       |
| *                  |       | 4,677            |       | —           |       | —           |       | 4,677               |       |
| *                  |       | —           |       | 766              |       | —           |       | 766                 |       |
| *                  |       | —           |       | 10,129           |       | —           |       | 10,129              |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | 4,428            |       | —           |       | 4,428               |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | 3,402            |       | —           |       | 3,402               |       |
| *                  |       | —           |       | 772              |       | —           |       | 772                 |       |
| *                  |       | —           |       | 3,086            |       | —           |       | 3,086               |       |
| *                  |       | —           |       | —           |       | 282              |       | 282                 |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | —           |       | 282              |       | 282                 |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | 767              |       | —           |       | 767                 |       |
| *                  |       | —           |       | 5,535            |       | —           |       | 5,535               |       |
| *                  |       | —           |       | 2,172            |       | —           |       | 2,172               |       |
| *                  |       | —           |       | 5,535            |       | —           |       | 5,535               |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | —           |       | —           |       | —              |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | 1,178            |       | —           |       | 1,178               |       |
| *                  |       | —           |       | 386              |       | —           |       | 386                 |       |
| *                  |       | —           |       | —           |       | 282              |       | 282                 |       |
| *                  |       | —           |       | 2,373            |       | —           |       | 2,373               |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | —           |       | 141              |       | 141                 |       |
| *                  |       | —           |       | —           |       | 2,257            |       | 2,257               |       |
| *                  |       | —           |       | 2,356            |       | —           |       | 2,356               |       |
| *                  |       | —           |       | —           |       | 564              |       | 564                 |       |
| *                  |       | —           |       | —           |       | 282              |       | 282                 |       |
| *                  |       | —           |       | 713              |       | —           |       | 713                 |       |
| **TOTAL**          | ** ** | **4,677**        | ** ** | **43,598**       | ** ** | **9,025**        | ** ** | **57,300**          | ** ** |

 

----

 

----

**(A) ORIGINAL PSC WARRANTS.**

 

**(B) AS ISSUED BY ARC - PRIMARILY WILMINGTON ANDLOUISVILLE.**

 

**(C) AS ISSUED BY MEDISPHERE.**

 

----

 

**SCHEDULE 6.09**

 

**EXISTING TRANSACTIONS WITH AFFILIATES**

 

None.

 

----

 

**SCHEDULE 6.10**

 

**EXISTING RESTRICTIONS**

 

FairviewMaple Grove Surgery Center, LLC: Board approval and approval of all Class S,F and U Governors required to declare dividends and distributions.

 

----