(B) MAKE ALL NECESSARY REPAIRS THERETO AND RENEWALS AND REPLACEMENTS
THEREOF EXCEPT WHERE THE FAILURE TO DO SO COULD NOT REASONABLY BE EXPECTED TO
HAVE A MATERIAL ADVERSE EFFECT; AND (C) USE THE STANDARD OF CARE TYPICAL IN THE
INDUSTRY IN THE OPERATION AND MAINTENANCE OF ITS FACILITIES.
SECTION 6.07
MAINTENANCE OF INSURANCE.
MAINTAIN WITH FINANCIALLY SOUND
AND REPUTABLE INSURANCE COMPANIES NOT AFFILIATES OF BORROWER, INSURANCE WITH
RESPECT TO ITS PROPERTIES AND BUSINESS AGAINST LOSS OR DAMAGE OF THE KINDS
CUSTOMARILY INSURED AGAINST BY PERSONS ENGAGED IN THE SAME OR SIMILAR BUSINESS,
OF SUCH TYPES AND IN SUCH AMOUNTS AS ARE CUSTOMARILY CARRIED UNDER SIMILAR
CIRCUMSTANCES BY SUCH OTHER PERSONS AND PROVIDING FOR NOT LESS THAN 30 DAYS'
PRIOR NOTICE TO THE ADMINISTRATIVE AGENT OF TERMINATION, LAPSE OR CANCELLATION
OF SUCH INSURANCE.
SECTION 6.08
COMPLIANCE WITH LAWS.
(A)
COMPLY IN ALL RESPECTS WITH THE
REQUIREMENTS OF ALL LAWS (INCLUDING ALL HEALTH CARE LAWS, SEISMIC COMPLIANCE
LAWS (GIVING EFFECT TO ANY EXTENSIONS OR EXEMPTIONS THEN IN EXISTENCE), ALL
APPLICABLE MEDICARE AND MEDICAID RULES AND REGULATIONS, AND TO THE EXTENT
APPLICABLE, THE CALIFORNIA DEPARTMENT OF MANAGED CARE FINANCIAL SOLVENCY
REGULATIONS) AND ALL ORDERS, WRITS, INJUNCTIONS AND DECREES APPLICABLE TO IT OR
TO ITS BUSINESS OR PROPERTY, EXCEPT IN SUCH INSTANCES IN WHICH (I) SUCH
REQUIREMENT OF LAW OR ORDER, WRIT, INJUNCTION OR DECREE IS BEING CONTESTED IN
GOOD FAITH BY APPROPRIATE PROCEEDINGS DILIGENTLY CONDUCTED; OR (II) THE FAILURE
TO COMPLY THEREWITH COULD NOT REASONABLY BE EXPECTED TO HAVE A MATERIAL ADVERSE
EFFECT.
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, FOR
PURPOSES OF COMPLIANCE WITH THIS SECTION 6.08 BROTMAN SHALL BE DEEMED SUBJECT TO
THE REQUIREMENTS OF THIS SECTION 6.08(A) (PROVIDED, THAT SOLELY FOR PURPOSES OF
DETERMINING BROTMAN'S
75
COMPLIANCE WITH THIS SECTION 6.08(A) (AND NOT FOR THE PURPOSE OF DETERMINING
COMPLIANCE BY ANY OTHER PERSON WITH SUCH SECTION), "MATERIAL ADVERSE EFFECT" AS
USED IN SECTION 6.08(A)(II) SHALL MEAN (A) A MATERIAL ADVERSE CHANGE IN, OR A
MATERIAL ADVERSE EFFECT UPON, THE OPERATIONS, BUSINESS, ASSETS, PROPERTIES,
LIABILITIES (ACTUAL OR CONTINGENT) OR CONDITION (FINANCIAL (AS DETERMINED BASED
ON THE CONSOLIDATED FINANCIAL STATEMENTS OF BORROWER AND ITS SUBSIDIARIES
(INCLUDING BROTMAN)) OR OTHERWISE) OF BORROWER AND ITS SUBSIDIARIES (INCLUDING
BROTMAN) TAKEN AS A WHOLE AND (B) THE ADDITIONAL MEANINGS ASSIGNED TO THE TERM
"MATERIAL ADVERSE EFFECT" IN CLAUSES (B) AND (C) IN THE DEFINITION THEREOF).
(B)
REGULARLY REVIEW AND REVISE THE POLICIES AND PROCEDURES OF THE
LOAN PARTIES AND THE PLEDGED SUBSIDIARIES TO ENSURE CONTINUING COMPLIANCE BY ALL
LOAN PARTIES AND THE PLEDGED SUBSIDIARIES, THEIR EMPLOYEES AND ALL HEALTHCARE
PROVIDERS UNDER CONTRACT WITH ANY LOAN PARTY OR ANY PLEDGED SUBSIDIARY WITH ALL
APPLICABLE HEALTH CARE LAWS AND MAINTAIN APPROPRIATE PROGRAMS AND PROCEDURES FOR
COMMUNICATING SUCH POLICIES AND PROCEDURES TO ALL EMPLOYEES OF ANY LOAN PARTY OR
ANY PLEDGED SUBSIDIARY AND HEALTHCARE PROVIDERS UNDER CONTRACT WITH ANY LOAN
PARTY OR ANY PLEDGED SUBSIDIARY AND FOR MAKING SURE THAT ALL EMPLOYEES OF ANY
LOAN PARTY OR ANY PLEDGED SUBSIDIARY ARE ABLE TO REPORT VIOLATIONS OF ANY