Document:

Exhibit 10.49

EXECUTION COPY

SIXTH

AMENDED AND
RESTATED

CREDIT AGREEMENT

dated as of February 7, 2007

by and among

NOVAMED, INC.

as the Borrower,

CERTAIN COMMERCIAL LENDING INSTITUTIONS,

as the Lenders,

and

NATIONAL CITY
BANK,

as the Agent for the Lenders

with

LASALLE BANK NATIONAL ASSOCIATION, as Documentation Agent

 

SIXTH AMENDED AND RESTATED CREDIT AGREEMENT

THIS SIXTH AMENDED AND RESTATED CREDIT AGREEMENT,
dated as of February 7, 2007, by and among NOVAMED, INC., a Delaware
corporation (the “Borrower”), the
various financial institutions from time to time party hereto (collectively,
the “Lenders”), NATIONAL CITY BANK
(successor by merger to NATIONAL CITY BANK OF THE MIDWEST), as agent (the “Agent”) for the Lenders and LASALLE BANK
NATIONAL ASSOCIATION, as Documentation Agent;

W I T N E S S E T H:

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

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

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

WHEREAS, the proceeds of the Loans hereunder will be
used for general corporate purposes and working capital purposes of the
Borrower and its Subsidiaries and to finance Permitted Acquisitions by the
Borrower.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS AND
ACCOUNTING TERMS

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

“Affected
Lender” is
defined in Section 4.12.

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

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

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

“Agent” means National City Bank (successor by
merger to National City Bank of the Midwest).

“Agreed EBITDA FORM”
is defined in Schedule 2.

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

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

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

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

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

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

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“Assignee Lender”
is defined in Section 10.11.1.

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

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

“Base Rate” means, on any date and with respect to
all Base Rate Loans, a fluctuating rate of interest per annum equal to the
higher of (i) the rate of interest most recently announced by the Agent as its
prime rate of interest or (ii) 0.50% per annum above the Federal Funds
Effective Rate.  The Base Rate is not
necessarily intended to be the lowest rate of interest determined by the Agent
in connection with extensions of credit. 
Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the Base
Rate.  The Agent will give notice
promptly to the Borrower and the Lenders of changes in the Base Rate.

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

“Borrower” is
defined in the preamble.

“Borrower Pledge Agreement” means the Pledge Agreement executed and
delivered by the Borrower pursuant to Section 5.1.5, substantially in
the form of Exhibit F-1 hereto, as amended, supplemented, restated or
otherwise modified from time to time.

“Borrower Security Agreement” means the Security Agreement executed
and delivered pursuant to Section 5.1.6, substantially in the form of Exhibit
G-1 hereto, as amended, supplemented, restated or otherwise modified from
time to time.

“Borrowing” means the Loans of the same type and, in
the case of LIBO Rate Loans, having the same Interest Period made by all
Lenders on the same Business Day and pursuant to the same Borrowing Request in
accordance with Section 2.1.

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

“Business Day” means

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

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

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

“Capitalized Lease Liabilities” means all monetary obligations of any
Credit Party under any leasing or similar arrangement which, in accordance with
GAAP, would be classified as capitalized leases, and, for purposes of this
Agreement and each other Loan Document, the amount of such obligations shall be
the capitalized amount thereof, determined in accordance with GAAP, and the
stated maturity thereof shall be the date of the last payment of rent or any
other amount due under such lease prior to the first date upon which such lease
may be terminated by the lessee without payment of a penalty.

“Cash Equivalent Investment”
means, at any time:

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

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

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

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

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

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

(ii)  any Lender; or

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

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

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

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

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

“Change of Control” means (a) any Person or any two or more
Persons acting in concert (in any such case, excluding the Original Closing
Date Stockholders and their Affiliates) acquiring beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission under
the Exchange Act), directly or indirectly, of capital stock (or other
securities convertible into such capital stock) of the Borrower representing
35% or more of the combined voting power of all capital stock of the Borrower
entitled to vote in the election of directors, or (b) during any period of 12
consecutive calendar months, the ceasing of those individuals (the “Continuing Directors”) who (i) were
directors of the Borrower, on the first day of each such period or (ii)
subsequently became directors of the Borrower, and whose initial election or
initial nomination for election subsequent to that date was approved either by
(A) a majority of the Continuing Directors then on the board of directors of
the Borrower or (B) the shareholders who, in accordance with the provisions of
the Articles of Incorporation of the Borrower, are entitled to elect such
director, to constitute a majority of the board of directors of the Borrower.

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

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

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

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

“Consideration” means with respect to any Permitted
Acquisition, the aggregate of (i) the cash paid by the Borrower or any of its
Subsidiaries, directly or indirectly, to the seller in connection therewith,
(ii) the Indebtedness incurred or assumed by the Borrower or any of its
Subsidiaries (including, without limitation, Indebtedness of a person becoming
a Credit Party in connection with a Permitted Acquisition, which Indebtedness
continues to exist following the 

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consummation of such
Permitted Acquisition), whether in favor of the seller or otherwise and whether
fixed or contingent, in connection therewith, (iii) any guaranty given or
incurred by the Borrower or any of its Subsidiaries in connection therewith,
(iv) the fair market value of any equity issued by the Borrower, in connection
therewith, and (v) any other consideration given or obligation incurred by the
Borrower or any of its Subsidiaries in connection therewith; provided, however,
that the amount of any deferred earn-out payments to any seller not required by
GAAP to be reflected as a liability on the consolidated balance sheet of the
Borrower as of the date of consummation of such Permitted Acquisition shall be
excluded from the determination under clauses (i) through (v) of this
definition.

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

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

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

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

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

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

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

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

“Domestic Office” means, relative to any Lender, the
office of such Lender designated as such below its signature hereto or
designated in the Lender Assignment Agreement or such other office of a Lender
(or any successor or assign of such Lender) within the United States as may be
designated from time to time by notice from such Lender, as the case may be, to
each 

 6
 

other Person party
hereto.  A Lender may have separate
Domestic Offices for purposes of making, maintaining or continuing, as the case
may be, Base Rate Loans.

“EBITDA” means, for any applicable
computation period, the Borrower’s Net Income on a consolidated basis from all
continuing operations, plus (a) income and franchise taxes paid or
accrued during such period, (b) interest expenses paid or accrued during such
period, (c) amortization and depreciation deducted in determining Net Income
for such period, (d) up to $2.0 million over the four consecutive quarters
comprising the computation period for documented tax refund receipts and/or
deferred taxes as set forth in Borrower’s consolidated statements of cash
flows, and (e) non-cash
expenses for capital stock-based compensation related to capital stock-based
compensation plans that do not represent a cash item in any future period.  For
the purpose of determining compliance with Section 7.2.4(b), (c) and (d),
“EBITDA” shall be as adjusted pursuant to the formula described in Schedule
2.

“Effective Maturity Date” is defined in Section 3.1.3.

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

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

“Event
of Default” is defined in Section 8.1.

“Extension
Effective Date” is defined in Section 3.1.3.

“Extension
Response Date” is defined in Section 3.1.3.

“Extension Request”
is defined in Section 3.1.3.

“Federal Funds Effective Rate” means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations at approximately 10:00
a.m. (Chicago time) on such day on such transactions received by Agent from
three Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.

“Fifth Amended and Restated Effective
Date” has the
meaning assigned to it in the Recitals.

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

 7
 

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

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

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

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

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

“Guarantor” means
each Person party to a Guaranty.

“Guarantor Pledge Agreement” means the Pledge Agreement substantially
in the form of Exhibit F-2 hereto, as amended, supplemented, restated or
otherwise modified from time to time.

“Guarantor Security Agreement” means the Security Agreement
substantially in the form of Exhibit G-2 hereto, as amended,
supplemented, restated or otherwise modified from time to time.

“Guaranty” means, collectively, the Guaranty
substantially in the form of Exhibit E hereto, as amended, supplemented,
restated or otherwise modified from time to time.

“Hazardous Material”
means

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

 8
 

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

(c)           any petroleum product; or

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

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

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

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

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

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

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

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

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

 9
 

“Indebtedness” of
any Person means, without duplication:

(a)           all obligations of such Person for
borrowed money and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;

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

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

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

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

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

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

For all purposes of this Agreement, the Indebtedness
of any Person shall include the Indebtedness of any partnership or joint
venture in which such Person is a general partner or a joint venturer, except
to the extent payments have been made or are required to be made with respect
to such Indebtedness solely by a general partner or a joint venture partner
other than a Subsidiary.

“Indemnified
Liabilities” is defined in Section 10.4.

“Indemnified
Parties” is defined in Section 10.4.

“Intercompany
Loans” is defined in Section 7.2.2.

“Intercompany Notes”
is defined in Section 7.2.2.

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

“Interest Period” means, relative to any LIBO Rate Loans,
the period beginning on (and including) the date on which such LIBO Rate Loan
is made or continued as, or converted into, a 

 10
 

LIBO Rate Loan pursuant
to Section 2.3 or 2.4 and shall end on (but exclude) either (i)
the day one week subsequent to such day, or (ii) the day which numerically
corresponds to such date one, two,  three
or six months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), 
as the Borrower may select in its relevant notice pursuant to Section
2.3 or 2.4; provided, however, that

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

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

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

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

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

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

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

“Investment”
means, relative to any Person,

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

(b)           any Contingent Liability of such
Person; and

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

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

“LC Notice” has the
meaning specified in Section 2.7.

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

“Lenders” is
defined in the preamble.

“Letter of Credit” shall mean a Letter of Credit that is
issued pursuant to Section 2.7.

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

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

“Letter of Credit Issuer”
shall mean National City.

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

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

“LIBO Rate” is
defined in Section 3.2.1.

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

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

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

“LIBOR Reserve Percentage”
is defined in Section 3.2.1.

“Lien” means any security interest, mortgage,
pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien
(statutory or otherwise), charge against or interest in 

 12
 

property to secure
payment of a debt or performance of an obligation or other priority or
preferential arrangement of any kind or nature whatsoever.

“Loan” is defined
in Section 2.1.1.

“Loan Document” means this Agreement, the Notes, each
Collateral Document, each Hedging Agreement and each other document delivered
pursuant to Section 7.1.11.

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

“Maturity
Date” means the earliest of:

(a)           February
5, 2010; or

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

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

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

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

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

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

 13
 

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

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

“Medicare Regulations” means, collectively, all federal
statutes (whether set forth in Title XVIII of the Social Security Act or
elsewhere) affecting the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act and any successor
statute(s); together with all applicable provisions of all rules, regulations,
manuals and orders and administrative, reimbursement and other guidelines of
all governmental authorities (including without limitation, the United States
Department of Health and Human Services (“HHS”), CMS, the Office of the
Inspector General for HHS, or any person succeeding to the functions of any of
the foregoing) promulgated pursuant to or in connection with any of the
foregoing having the force of law, as each may be amended, supplemented or
otherwise modified from time to time.

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

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

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

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

“Net Income” means, for any computation period, with
respect to the Borrower, on a consolidated basis, cumulative net income earned
during such period as determined in accordance with GAAP (other than net income
from any Minority ASC Entity which is restricted from declaring or paying
dividends, distributions or otherwise advancing funds to its equityholders
whether by contract or otherwise, except to the extent of any such net income 

 14
 

actually received which
is not in violation of the applicable restriction); provided, however, there shall not be included
for purposes of calculating Net Income of the Borrower, net income attributable
to Minority ASC Entities in excess of 25% of total Net Income.  Net Income shall be determined without giving
effect to any non-cash, non-recurring loss.

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

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

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

“NovaMed of New
Albany” means NovaMed Eye Surgery Center of New Albany, LLC, a
Delaware limited liability company.

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

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

“Original Closing Date” means June 28, 2000.

“Original Closing Date Stockholders” means, collectively, the stockholders of
record of the Borrower as of the Original Closing Date listed on Schedule 1.

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

“Participant” is
defined in Section 10.11.

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

“Pension Plan” means a “pension plan”, as such term is
defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other
than a multiemployer plan as defined in section 4001(a)(3) of ERISA), and to
which the Borrower or any corporation, trade or business 

 15
 

that is, along with the
Borrower, a member of a Controlled Group, may have liability, including any
liability by reason of having been a substantial employer within the meaning of
section 4063 of ERISA at any time during the preceding five years, or by reason
of being deemed to be a contributing sponsor under section 4069 of ERISA.

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

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

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

(b)  in the event the Borrower’s Total Leverage
Ratio on a pro forma basis (after giving effect to the Permitted Acquisition)
is less than 3.25:1.0, the Borrower must be able to comply on a pro forma basis
with all of the covenants in this Agreement;

(c)  in the event the Borrower’s Total Leverage
Ratio on a pro forma basis (after giving effect to the Permitted Acquisition)
is greater than or equal to 3.25:1.0, (i) the Borrower must be able to comply
on a pro forma basis with all of the covenants in this Agreement and (ii) the
aggregate Consideration (including any Indebtedness pursuant to Section
7.2.2(h), (i), (j) and (k) relating to such Permitted Acquisitions) in
connection with such Permitted Acquisition shall not exceed (unless otherwise
consented to by the Required Lenders) $20,000,000 individually and $60,000,000
for all Permitted Acquisitions consummated within the previous twelve (12)
month period when aggregated with Investments made by the Borrower or any of
its Subsidiaries permitted under Section 7.2.5(n) during such period; provided,
further, that of such $60,000,000 permitted above, in the case of
Permitted Acquisitions involving (i) Minority ASC Entities, the aggregate
Consideration (including any Indebtedness pursuant to Section 7.2.2(h), (i),
(j) and (k) relating to such Permitted Acquisitions) shall not exceed
(unless otherwise consented to by the Required Lenders) $13,000,000
individually and $30,000,000 for all Permitted Acquisitions involving Minority
ASC Entities consummated within the previous twelve (12) month period;
provided, further, that any Permitted Acquisition consummated prior to the
Sixth Amended and Restated Effective Date shall not count towards any of the
limits set forth in this subparagraph (c) and (ii) Practices, the aggregate Consideration
(including any Indebtedness pursuant to Section 7.2.2(h), (i) and (j)
relating to such Permitted Acquisitions) shall not exceed (unless 

 16
 

consented to by the
Required Lenders) $2,000,000 in the aggregate for all Permitted Acquisitions
involving Practices provided, further, that any Permitted Acquisition involving
a Practice described on Schedule 3 shall not count towards any of the
limits set forth in this subparagraph (c);

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

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

(f)  the Borrower shall have delivered to the
Agent, not later than 30 days after the closing of the acquisition (i) pro
forma financial statements or certificates demonstrating continued compliance
with all covenants in this Agreement following the inclusion of the target in
the Borrower’s consolidated enterprise, 
(ii) a copy of the related acquisition agreement provided, however,
in the event the approval of the Lenders is required for any acquisition, the
Borrower shall have delivered to the Agent the documents contemplated by clauses
(i) and (ii) of this clause (f) not later than 15 days prior to the
closing of such acquisition (with the documents contemplated in (ii) being in
draft form);

(g) the Borrower shall have delivered to the Agent,
not later than 30 days after the closing of the acquisition a fully executed
Agreed EBITDA Form;

(h) the Borrower’s Total Leverage Ratio on a pro forma
basis (after giving effect to the Permitted Acquisition) is at least .25:1.00
less than the maximum permitted Total Leverage Ratio which Borrower is required
pursuant to Section 7.2.4(b) to maintain for the then current Fiscal
Quarter (i.e. if the current maximum permitted Total Leverage Ratio is
4.00:1.00 then the pro forma Total Leverage Ratio for any Permitted Acquisition
at such time must be 3.75:1.00 or less); and

(i) after giving effect to such acquisition, the
sum of the Available Revolving Commitments shall not be less than $5,000,000.

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

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

 17
 

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

(ii)           the equity interests in such ASC
Subsidiary (or Minority ASC Entity) which are held by the Borrower or a
Subsidiary of the Borrower after such sale continue to be pledged to the
Lenders pursuant to either the Borrower Pledge Agreement or Subsidiary
Guarantor Pledge Agreement, as the case may be;

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

(iv)          the
proceeds (other than any proceeds received by a Person who is not the Borrower
or a Subsidiary of the Borrower) of any such sale are applied in the manner set
forth in Section 2.2.2(d).

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

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

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

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

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

“Plan” means any
Pension Plan or Welfare Plan.

“Pledged Collateral” has the meaning specified in the
Borrower Pledge Agreement and the Guarantor Pledge Agreement.

 18
 

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

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

 “Quarterly Payment Date” means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day.

“Reaffirmation of Collateral
Documents” means
that certain Reaffirmation of Collateral Documents substantially in the form
attached hereto as Exhibit I.

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

“Replacement Lender”
is defined in Section 4.12.

“Required Lenders” means Lenders holding at least 51.0% of
the then aggregate outstanding principal amount of  all of the Notes then held by the Lenders,
or, if no such principal amount is then outstanding, Lenders having at least
51.0% of the Revolving Commitments.

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

“Revolver Increase”
has the meaning set forth in Section 2.1.3.

“Revolver Increase Notice” has the meaning
set forth in Section 2.1.3.

“Revolving Commitment” means, relative to any Lender, such
Lender’s obligation to make Loans pursuant to Section 2.1.1.

“Revolving Commitment Amount” means
$125,000,000 plus the amount, if any, of any increase permitted by Section
2.1.3. (after which increase, the Revolving Commitment Amount shall not exceed
$150,000,000).  The Revolving Commitment
Amount at any time in effect may also be reduced from time to time pursuant to Section
2.2.

“Revolving Commitment Termination
Date” means the earliest of

(a)           February 5, 2010;

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

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

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

 19
 

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

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

“Sixth Amended and Restated Effective
Date” has the
meaning assigned to it in Section 5.3.

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

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

“Surgicare of
Jeffersonville” means Surgicare of Jeffersonville, LLC, an Indiana
limited liability company.

“Surgicare of
Jeffersonville Acquisition” means the acquisition by NovaMed of New
Albany of substantially all of the assets of Surgicare of Jeffersonville
pursuant to the terms of the Surgicare of Jeffersonville Acquisition Documents.

“Surgicare of
Jeffersonville Acquisition Documents” means that certain asset
purchase agreement by and among NovaMed of New Albany and Surgicare of
Jeffersonville and the other documents and deliveries in connection therewith.

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

“Target” means (i) any business that sells,
leases or provides medical equipment to doctors, hospitals or other health
organizations, (ii) ambulatory surgery centers, surgical facilities or other
form of outpatient surgical treatment centers (including, without limitation,
vision correction or laser vision correction centers), regardless of the
specialty or specialties involved therein, or any business that owns, operates
and/or manages one or more thereof, (iii) any 
management service center, optical laboratory, buying group or group
purchasing organization, 

 20
 

companies that own,
operate and/or manage vision correction centers (including, without limitation,
laser vision correction centers), marketing products and services organization,
or reasonable extensions thereof (including any company which leases or sells
equipment or provides services to any of the foregoing), at a single location
or various locations, or (iv) reasonable extensions of any of the
foregoing.  Whenever in this Agreement “Target”
is used in describing an acquisition by the Borrower or a Subsidiary of the
Borrower of equity interests, such reference is to the acquisition of the
assets used in the operation of the Target that can lawfully be acquired by the
Borrower or a Subsidiary of the Borrower or to the acquisition of the equity
interests of a Person that owns, as of the time of purchase, only those assets
that can be lawfully acquired by the Borrower or a Subsidiary of the Borrower.

 “Taxes” is defined in Section
4.6.

“Termination Event”
means

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

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

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

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

 “Total Funded Debt” of any Person means all Indebtedness of
such Person except Indebtedness specified in clause (g) of the
definition of Indebtedness; provided, with respect to Indebtedness of
NovaMed of New Albany permitted to be outstanding under Section 7.2.2(q)
hereof, that amount of such Indebtedness of NovaMed of New Albany guaranteed by
a Person or Persons other than a Credit Party, ASC Subsidiary, Minority ASC
Entity or Affiliate of a Credit Party, ASC Subsidiary or Minority ASC Entity
shall be excluded for purposes of calculating this definition.

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

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

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

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

“Wholly-Owned
Subsidiary” means
any Person in which (other than directors’ qualifying shares required by law)
100% of the equity interests of each class having ordinary 

 21
 

voting power, and
100% of the equity interests of every other class, in each case, at the time as
of which any determination is being made, is owned, beneficially and of record,
by the Borrower or by one or more of the other Wholly-Owned Subsidiaries, or
both.

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

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

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

ARTICLE II

REVOLVING
COMMITMENTS, BORROWING PROCEDURES AND NOTES

SECTION
2.1  Revolving Commitments.  On the terms and subject to the conditions of
this Agreement (including Article V), each Lender severally agrees to
make Loans pursuant to the Revolving Commitments described in this Section
2.1.

SECTION
2.1.1  Revolving Commitment of Each
Lender.  From time to time on any
Business Day occurring prior to the Revolving Commitment Termination Date, each
Lender will make loans (relative to such Lender, and of any type, its “Loans”) to the Borrower, which, when added to the Letter of
Credit Obligations at such time, equal to such Lender’s Percentage of the
aggregate amount of the Borrowing requested by the Borrower to be made on such
day.  The commitment of each Lender
described in this Section 2.1.1 is herein referred to as its “Revolving Commitment”. 
On the terms and subject to the conditions hereof, the Borrower may from
time to time borrow, prepay and reborrow Loans.

SECTION
2.1.2  Lenders Not Permitted or
Required To Make Loans.  No Lender
shall be permitted or required to make any Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all Loans plus Letter of
Credit Obligations then outstanding

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

 22

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

SECTION
2.1.3  Revolver Increase.  On and after the Sixth Amended and Restated
Effective Date, Borrower may, at its option at any time in increments of not
less than $5,000,000, seek to increase (the “Revolver Increase”) the
Revolving Commitment Amount by up to an aggregate of $25,000,000 (after giving
effect to all such increases the Revolving Commitment Amount shall not exceed
$150,000,000) upon at least 30 days (but not more than 45 days) written notice
(“Revolver Increase Notice”) to the Agent (which notice Agent shall
promptly deliver to the Lenders).  The
Revolver Increase Notice shall (a) specify the date upon which the Revolver
Increase is requested to occur, (b) be delivered at a time when no Default or
Event of Default has occurred and is continuing (and the effectiveness of the
Revolver Increase shall be subject to no Default or Event of Default existing
of the time of the Revolver Increase) and (c) certify that the Revolver
Increase will not violate or conflict with the terms of any Indebtedness or any
other contract, agreement, instrument or obligation of any Credit Party.
Borrower shall, after giving a Revolver Increase Notice, offer the Revolver
Increase (i) first on a pro-rata basis to the Lenders, which each Lender may in
its sole and absolute discretion accept or decline (it being understood that
any Lender not affirmatively committing in writing to its pro-rata portion
shall be deemed to have declined), (ii) second, if any Lender has declined its
pro rata share or any part thereof, such remaining amounts on a non pro-rata
basis to the Lenders accepting their pro rata share of the Revolver Increase
and (iii) third, to other commercial banks or financial institutions.   No increase in the Revolving Commitment
Amount shall become effective until all existing and new Lenders committing to
the Revolver Increase have delivered to the Agent a writing in form reasonably
satisfactory to the Agent pursuant to which such existing Lenders state the
amount of their Revolver Increase and any such new Lenders state the amount of
their Revolver Commitment and agree to assume and accept the obligations and
rights of a Lender hereunder and any such new and increasing Lenders agree to
make a Loan such that the outstanding Loans of such new Lender or increasing
Lender constitute a proportional amount of the aggregate outstanding Loans and
Letter of Credit Obligations based on the Revolver Commitment of such new
Lender.  Any Loan as a result of an
increase to the Revolver Commitment pursuant to this Section 2.1.3 shall
be subject to the terms and conditions contained in this Agreement.  Upon the increase of the Revolving Commitment
Amount pursuant to this Section 2.1.3, Schedule 10.1 shall be
deemed amended and replaced with a new Schedule 10.1 reflecting the new
Revolver Commitments hereunder. 
Notwithstanding the foregoing, in the event that Borrower elects to
permanently reduce or terminate the Revolving Commitment Amount pursuant to Section
2.2.1, the Revolver Increase, to the extent not already utilized by the
Borrower, shall be terminated and cease to be available to the Borrower.  Unless otherwise agreed to by the Borrower,
Agent and Lenders providing any Revolver Increase, no closing fees or other
transaction costs (other than those expressly called for under this Agreement)
shall be required by the Lender in connection with a Revolver Increase.

SECTION
2.2  Reduction of Revolving Commitment
Amount.  The Revolving Commitment
Amount is subject to reduction from time to time pursuant to this Section
2.2.

SECTION
2.2.1  Optional.  The Borrower may, from time to time on any
Business Day occurring after the time of the initial Borrowing hereunder,
voluntarily reduce the Revolving 

 23
 

Commitment
Amount; provided, however, that all such reductions shall require
at least three Business Days’ prior notice to the Agent and be permanent, and
any partial reduction of the Revolving Commitment Amount shall be in a minimum
amount of $5,000,000 and in an integral multiple of $1,000,000.

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

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

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

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

(d)          
The Borrower shall prepay Loans in an amount equal to 80% of the sum of the Net
Available Proceeds realized upon all equity issuances (other than in connection
with a Permitted Acquisition) by the Borrower;

(e)           The
Borrower shall notify the Agent of the amount of any required prepayment at
least three (3) Business Days before it is made.  The Borrower shall pay any accrued interest
on the Loans which are being prepaid pursuant to this Section 2.2.2 and
shall pay any break funding costs associated with such required prepayment; and

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

Any prepayments pursuant to Sections 2.2.1 or 2.2.2
hereof shall be without penalty or premium of any kind other than break funding
and other charges expressly provided by this Agreement with respect to LIBOR
breakage costs; provided, however, at the reasonable request of
the Borrower and to avoid any break funding charges with respect to LIBOR
breakage costs associated with any prepayment, any amounts to be prepaid
pursuant to Section 2.2.2 shall be deposited by the Borrower in an
escrow account under the control of the Agent to return an interest rate equal
to the average deposit rate payable by the Agent for commercial deposits of
like size and duration as determined by the Agent in its sole discretion, such
amounts to be applied in the manner set forth in this Section 2.2.2. at
the expiration of the Interest Period for the Loans as to which break funding
charges would otherwise have applied.

 24
 

SECTION
2.3  Borrowing Procedure.  By delivering a Borrowing Request to the
Agent on or before 11:00 a.m., Chicago time, on a Business Day, the Borrower
may from time to time irrevocably request, on notice on the date of the
requested Borrowing in the case of Base Rate Loans and on not less than three
nor more than five Business Days’ notice in the case of LIBO Rate Loans, that a
Borrowing be made in a minimum amount of (i) 
$500,000  if such Loan is a LIBO
Rate Loan or (ii) the lesser of the unused amount of the Revolving Commitments
or $100,000, if such Loan is a Base Rate Loan and an integral multiple of
$100,000, to the extent such additional amount is permitted to be borrowed
hereunder.  On the terms and subject to
the conditions of this Agreement, each Borrowing shall be comprised of the type
of Loans, and shall be made on the Business Day, specified in such Borrowing Request.  On or before 1:00 p.m. (Chicago  time) on such Business Day, each Lender shall
deposit with the Agent same day funds in an amount equal to such Lender’s
Percentage of the requested Borrowing. 
Such deposit will be made to an account which the Agent shall specify
from time to time by notice to the Lenders. 
To the extent funds are received from the Lenders, the Agent shall make
such funds available to the Borrower by wire transfer to the accounts the
Borrower shall have specified in its Borrowing Request.  No Lender’s obligation to make any Loan shall
be affected by any other Lender’s failure to make any Loan.

SECTION
2.4  Continuation and Conversion
Elections.  By delivering a
Continuation/Conversion Notice to the Agent on or before 10:00 a.m., Chicago  time, on a Business Day, the Borrower may
from time to time irrevocably elect, on not less than three nor more than five
Business Days’ notice that all, or any portion in an aggregate minimum amount
of $500,000 and an integral multiple of $100,000, of any Loans be, in the case
of Base Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate
Loans, be converted into a Base Rate Loan or continued as a LIBO Rate Loan  (in the absence of delivery of a
Continuation/ Conversion Notice with respect to any LIBO  Rate Loan at least three Business Days before
the last day of the then current Interest Period with respect thereto, such
LIBO Rate Loan shall, on such last day, automatically convert to a Base Rate
Loan); provided, however, that (i) each such conversion or
continuation shall be pro rated among the applicable outstanding Loans of all
Lenders, and (ii) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, LIBO Rate Loans when any Event of Default
has occurred and is continuing.

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

SECTION
2.6  Notes.  Each Lender’s Loans under its Revolving
Commitment shall be evidenced by a Note payable to the order of such Lender in
a maximum principal amount equal to such Lender’s Percentage of the original
Revolving Commitment Amount.  The
Borrower 

 25
 

hereby
irrevocably authorizes each Lender to make (or cause to be made) appropriate
notations on the grid attached to such Lender’s Note (or on any continuation of
such grid), which notations, if made, shall evidence, inter  alia,
the date of, the outstanding principal of, and the interest rate and Interest
Period applicable to the Loans evidenced thereby.  Such notations shall be conclusive and
binding on the Borrower absent manifest error; provided, however,
that the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrower or any other Credit Party.

SECTION
2.7  Letters of Credit.

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

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

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

 26
 

or material
impairment of any security for the performance or observance of any of the
terms hereof.

(b)           If the Borrower does not pay any such
reimbursement obligations when due, the Borrower shall be deemed to have
immediately requested that the Lenders make a Base Rate Loan under this
Agreement in a principal amount equal to such unreimbursed reimbursement
obligations.  The Agent shall promptly
notify the Lenders of such deemed request and, without the necessity of
compliance with the requirements of Sections 2.1 and 5.2, each
Lender shall make available to the Agent its Loan.  The proceeds of such Loans shall be paid over
by the Agent to the Letter of Credit Issuer for the account of the Borrower in
satisfaction of such unreimbursed reimbursement obligations, which shall
thereupon be deemed satisfied by the proceeds of, and replaced by, such Loan.

(c)           If
the Letter of Credit Issuer makes a payment on account of any Letter of Credit
and is not concurrently reimbursed therefor by the Borrower and if for any
reason a Loan may not be made pursuant to Section 2.7.3(b), then as
promptly as practical during normal banking hours on the date of its receipt of
such notice or, if not practicable on such date, not later than 12:00 noon
(Chicago time) on the Business Day immediately succeeding such date of notification,
each Lender shall deliver to the Agent for the account of the Letter of Credit
Issuer, in immediately available funds, the purchase price for such Lender’s
interest in such unreimbursed 
reimbursement obligations, which shall be an amount equal to such Lender’s
pro-rata share of such payment.  Each
Lender shall, upon demand by the Letter of Credit Issuer, pay the Letter of
Credit Issuer interest on such Lender’s pro-rata share of such draw from the
date of payment by the Letter of Credit Issuer on account of such Letter of
Credit until the date of delivery of such funds to the Letter of Credit Issuer
by such Lender at a rate per annum, computed for actual days elapsed based on a
360-day year, equal to the Federal Funds Effective Rate for such period; provided,
that such payments shall be made by the Lenders only in the event and to the
extent that the Letter of Credit Issuer is not reimbursed in full by the
Borrower for interest on the amount of any draw on the Letters of Credit.

SECTION
2.7.4  Request for Letter of Credit.  Each Letter of Credit shall be issued upon
receipt by the Letter of Credit Issuer and the Agent from the Borrower of an
irrevocable request thereof (an “LC Notice”)
not later than 11:00 a.m. (Chicago time) three (3) Business Days prior the
issuance date.  Each LC Notice for a
Letter of Credit issued shall be in form and substance satisfactory to the
Letter of Credit Issuer.

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES

SECTION
3.1  Repayments and Prepayments.

SECTION 3.1.1  Prior to the Revolving Commitment
Termination Date.  The Borrower

 27
 

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

(i)  any such prepayment shall be made pro  rata
among Loans of the same type and, if applicable, having the same Interest
Period of all Lenders;

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

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

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

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

SECTION
3.1.3  Extension of Maturity Date.
The Borrower may, by written request to the Agent and the Lenders given not
later than one hundred eighty (180) days prior to the Maturity Date then in
effect (the “Effective Maturity Date”)
request (an “Extension Request”) that such
Effective Maturity Date be extended to a date which is twenty-four (24) months
after such Effective Maturity Date.  No
later than the date (the “Extension Response Date”)
which is 30 days after such  Extension
Request has been delivered to each of the Lenders, each Lender will notify the
Borrower in writing (with a copy to the Agent) whether or not it consents to
such Extension Request (which consent may be granted or denied by each Lender
in its sole discretion and may be conditioned on receipt of such financial
information or other documentation as may be specified by such Lender);
provided, that any Lender that fails to so advise the Borrower on or prior to
the Extension Response Date shall be deemed to have denied such Extension
Request.  The extension of the Maturity
Date contemplated by an Extension Request shall become effective as of the
applicable Effective Maturity Date; provided, that (i) all of the Lenders shall
have consented to such Extension Request; and (ii) (x) each of the
representations and warranties made by the Borrower in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of each
of the date of such Extension Request and such Effective Maturity Date as if
made on and as of such date, except to the extent relating to an earlier date,
(y) no Default or Event of Default shall have occurred and be continuing on the
date of such Extension Request or on such Effective Maturity Date and (z) on
each of the date of such Extension Request and such Effective Maturity Date,
the Agent shall have received a certificate of the Borrower as to the matters
set forth in clauses (x) and (y) above.

 28
 

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

SECTION
3.2.1  Rates.  Pursuant to an appropriately delivered
Borrowing Request or Continuation/Conversion Notice, the Borrower may elect
that Loans comprising a Borrowing accrue interest at a rate per annum:

(a)           on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Base Rate from time to time in effect plus
the Applicable Margin for Base Rate Loans; or

(b)           on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable Margin for LIBO
Rate Loans.

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

LIBO Rate           =   
          LIBO
Rate      

(Reserve Adjusted)          1.00 - LIBOR Reserve Percentage

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

“LIBO Rate” means, relative to any Interest Period
for LIBO Rate Loans, the rate of interest equal to the average (rounded
upwards, if necessary, to the nearest 1/16 of 1%) of the rates per annum at
which Dollar deposits in immediately available funds are offered to  National City’s LIBOR Office in the
London  interbank market as at or about
10:00 a.m. London time two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in
an amount approximately equal to the amount of National City’s LIBO Rate Loan
and for a period approximately equal to such Interest Period.

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

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

 29
 

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

	
  Level

  	
   

  	
  Base Rate

  	
   

  	
  LIBOR Rate

  	
   

  	
  Commitment Fee

  	
   

  
	
  I

  	
   

  	
  .50%

  	
   

  	
  2.25%

  	
   

  	
  .250%

  	
   

  
	
  II

  	
   

  	
  .50%

  	
   

  	
  2.00%

  	
   

  	
  .250%

  	
   

  
	
  III

  	
   

  	
  .50%

  	
   

  	
  1.75%

  	
   

  	
  .250%

  	
   

  
	
  IV

  	
   

  	
  .25%

  	
   

  	
  1.50%

  	
   

  	
  .250%

  	
   

  
	
  V

  	
   

  	
  0%

  	
   

  	
  1.25%

  	
   

  	
  .200%

  	
   

  
	
  VI

  	
   

  	
  0%

  	
   

  	
  1.00%

  	
   

  	
  .175%

  	
   

  

 

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

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

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

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

“Level III” shall exist at any time the Total
Leverage Ratio is less than 3.00:1.0 but equal to or greater than 2.50:1.0.

“Level IV” shall exist at any time the Total
Leverage Ratio is less than 2.50:1.0 but equal to or greater than 2.00:1.0.

“Level V” shall exist at any time the Total
Leverage Ratio is less than 2.00:1.0 but equal to or greater than 1.00:1.0.

“Level VI” shall exist at any time the Total
Leverage Ratio is less than 1.00:1.0.

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

 30
 

SECTION
3.2.2  Post-Maturity Rates.  After the date any principal amount of any
Loan is due and payable (whether on the Revolving Commitment Termination Date,
upon acceleration or otherwise), or after any other monetary Obligation of the
Borrower shall have become due and payable, the Borrower shall pay, but only to
the extent permitted by law, interest (after as well as before judgment) on
such amounts at a rate per annum equal to the Base Rate plus a margin of 2.00%.

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

(a)           on the Revolving Commitment Termination Date;

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

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

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

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

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

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

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

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

 31
 

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

(b) The Borrower shall pay to the Letter of Credit
Issuer a letter of credit fronting fee for each Letter of Credit issued by the
Letter of Credit Issuer equal to 1/4 of 1% of the face amount (or increased
face amount) of such Letter of Credit. 
Such Letter of Credit fronting fee shall be due and payable on each date
of issuance (or date of increase) of a Letter of Credit.

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

SECTION
3.2.7  Agency Fees.  The Borrower shall pay to the Agent (x) on
the Sixth Amended and Restated Effective Date for its own account and/or for
distribution to the Lenders such fees as heretofore agreed by the Borrower and
the Agent and (y) for its own account such other fees as may be agreed to from
time to time between the Borrower and the Agent, when and as due.

ARTICLE IV

LIBO RATE AND
OTHER PROVISIONS

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

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

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

 32
 

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

then, upon notice from the Agent to the Borrower and
the Lenders, subject to the provisions of Section 4.11 hereof, the
obligations of all Lenders under Section 2.3 and Section 2.4 to
make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans of
such type shall forthwith be suspended until the Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.

SECTION
4.3  Increased LIBO Rate Loan Costs,
etc.  The Borrower agrees to
reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans, subject to the provisions of Section 4.11
hereof.  Such Lender shall promptly
notify the Agent and the Borrower in writing of the occurrence of any such
event, such notice to state, in reasonable detail, the reasons therefor and the
additional amount required fully to compensate such Lender for such increased
cost or reduced amount.  Such additional
amounts shall be payable by the Borrower directly to such Lender within five
days of its receipt of such notice, and such notice shall, in the absence of
manifest error, be conclusive and binding on the Borrower; provided, however,
in no event shall Borrower be obligated to pay increased costs for a period
greater than 180 days prior to the date of receipt of such notice.

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

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

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

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

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

 33

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

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

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

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

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

Moreover, if any Taxes are directly asserted against
the Agent or any Lender with respect to any payment received by the Agent or
such Lender hereunder, the Agent or such Lender may pay such Taxes and the
Borrower will promptly pay such additional amounts (including any penalties,
interest or expenses, other than those penalties, interest or expenses which
are due to any delay by Agent or any Lender) as is necessary in order that the
net amount received by such 

 34
 

person after the payment of such Taxes (including any
Taxes on such additional amount) shall equal the amount such person would have
received had not such Taxes been asserted.

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

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

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

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

 35
 

Lender the
purchase price to the ratable extent of such recovery together with an amount
equal to such selling Lender’s ratable share (according to the proportion of:

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

to

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

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

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

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

SECTION 4.11  Changes to Other Branches; Equal Treatment
of Borrower.  If a Lender claims any
additional amounts payable or that its is unable to make LIBOR Loans available,
as described more fully in Sections 4.1 through 4.5 hereof, such
Lender shall (i) use its reasonable efforts (consistent with legal and
regulatory restrictions) to avoid the need for paying such additional amounts
or such unavailability, including changing the jurisdiction of its applicable
lending office or moving the applicable Loan(s) to an Affiliate or Subsidiary; provided,
that the 

 36
 

taking of any
such action would not, in the reasonable judgment of such Lender, be
disadvantageous to such Lender and (ii) treat the Borrower, with respect to all
such issues, in a manner consistent with the treatment of other similarly
situated borrowers with respect to such issues.

SECTION
4.12  Replacement of Lenders.  Within fifteen (15) days after receipt by
Borrower of written notice and demand from any Lender for payment pursuant to Section
4.5 or 4.6 (any such Lender demanding such payment being referred to herein
as an “Affected Lender”),
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to do one of the following:

(A)          Borrower
may obtain, at Borrower’s expense, a replacement Lender (“Replacement Lender”) for such Affected
Lender, which Replacement Lender shall be reasonably satisfactory to
Agent.  In the event Borrower obtains a
Replacement Lender that will refinance all outstanding Obligations owed to such
Affected Lender and assume its Commitments hereunder within ninety (90) days
following notice of Borrower’s intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under
this Agreement to such Replacement Lender in accordance with the provisions of Section
10.11.1, provided that Borrower has reimbursed such Affected Lender
for any administrative fee payable pursuant to Section 10.11.1 and, in
any case where such replacement occurs as the result of a demand for payment
pursuant to Section 4.5 or 5.6, paid all amounts required to be paid to
such Affected Lender pursuant to subsection 4.5 or 4.6 through the date
of such sale and assignment; or

(B)           Borrower
may, upon consent of the Required Lenders (other than the Affected Lender),
prepay in full all outstanding Obligations owed to such Affected Lender and
terminate such Affected Lender’s Revolving Commitment, in which case the
Revolving Commitment Amount will be reduced by the amount of such Affected
Lender’s Revolving Commitment.  Borrower
shall, within ninety (90) days following notice of its intention to do so,
prepay in full all outstanding Obligations owed to such Affected Lender
(including, in any case where such replacement occurs as the result of a demand
for payment for increased costs, such Affected Lender’s increased costs for
which it is entitled to reimbursement under this Agreement through the date of
such prepayment), and terminate such Affected Lender’s obligations under the
Revolving Commitment Amount.

ARTICLE V

CONDITIONS TO
BORROWING

SECTION
5.1  Initial Borrowing.  The obligations of the Lenders to fund the
initial Borrowing and the Letter of Credit Issuer to issue, and the Lenders to
participate in, any letter of Credit, shall be subject to the prior or
concurrent satisfaction of each of the conditions precedent set forth in this Section
5.1.

SECTION
5.1.1  Resolutions, etc.  The Agent shall have received from each
Credit Party a certificate, dated the date of the initial Borrowing, of its
Secretary or Assistant Secretary as to:

 37
 

(a)           resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement, the Notes and each other Loan Document to be executed by it; and

(b)           the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each other Loan
Document executed by it;

upon which certificate each Lender may conclusively
rely until it shall have received a further certificate of the Secretary of
such Credit Party canceling or amending such prior certificate.

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

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

SECTION
5.1.4  Guaranty.  The Agent shall have received the Guaranty,
dated the date hereof, duly executed by each Subsidiary of the Borrower.

SECTION
5.1.5  Pledge Agreements.  The Agent shall have received executed
counterparts of the Borrower Pledge Agreement and the Guarantor Pledge
Agreement, each dated as of the date hereof, duly executed by each Credit Party
party thereto, together with stock certificates, accompanied by undated stock
powers duly executed in blank, and promissory notes, duly endorsed in blank,
required to be delivered to the Agent pursuant to the Borrower Pledge Agreement
and the Guarantor Pledge Agreement.

SECTION
5.1.6  Security Agreements.  The Agent shall have received executed
counterparts of the Borrower Security Agreement and the Guarantor Security
Agreement, each dated as of the date hereof, duly executed by  each Credit Party thereto, together with:

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

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

(i)  in any collateral described in such Security
Agreement previously granted by any Person, and

(ii)  securing any of the Indebtedness identified
in Part A of Schedule 6.17, together with such other Uniform Commercial
Code Form UCC-3 

 38
 

termination
statements as the Agent may reasonably request from such Credit Party; and

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

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

SECTION
5.1.8  Opinions of Counsel.  The Agent shall have received opinions, dated
the date of the initial Borrowing and addressed to the Agent and all Lenders,
from Katten Muchin Zavis Rosenman, counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit H hereto.

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

SECTION
5.1.10  Closing Fees, Expenses, etc.  The Agent shall have received for its own account,
or for the account of each Lender, as the case may be, all fees, costs and
expenses due and payable on the Original Closing Date pursuant to Section
3.3 and, to the extent invoiced on such date, Section 10.3.

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

SECTION
5.2.1  Compliance with Warranties, No
Default, etc.  Both before and after
giving effect to any Borrowing (but, if any Default of the nature referred to
in Section 8.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds thereof) the following statements shall be true and correct:

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

 39
 

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

(c)           the Borrower shall have been in
compliance with the minimum EBITDA requirements of Section 7.2.4(d) for
the Fiscal Quarter most recently ended.

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

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

SECTION
5.3  Conditions to Sixth Amended and
Restated Effective Date.  This
Agreement shall become effective upon the later of February 7, 2007 and the
date of the satisfaction of each of the following (the “Sixth Amended and Restated Effective Date”):

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

SECTION
5.3.2  Executed Reaffirmation of
Collateral Documents.  Execution of
the Reaffirmation of Collateral Documents by the Borrower and each Subsidiary
Guarantor and delivery of the signature pages executed by the Borrower and each
Subsidiary Guarantor to the Reaffirmation of Collateral Documents to the Agent.

SECTION
5.3.3  Payment of Fees and Expenses.  Payment by the Borrower to the Agent of all
reasonable out of pocket fees and expenses (including, without limitation, the
reasonable fees and expenses of Winston & Strawn)  of the Agent and the Lenders in connection
with this Agreement.

SECTION
5.3.4  Resolutions, etc.  The Agent shall have received from each
Credit Party a certificate, dated as of the Sixth Amended and Restated
Effective Date, of its Secretary or Assistant Secretary as to:

(a)           resolutions of its Board of Directors then in full force
and effect authorizing the execution, delivery and performance of this
Agreement and each other Loan Document to be executed by it; and

 40
 

(b)           the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement and each other Loan Document
executed by it;

upon which certificate each Lender may conclusively
rely until it shall have received a further certificate of the Secretary of
such Credit Party canceling or amending such prior certificate.

SECTION
5.3.5  Certificate.

A certificate signed by the chief financial officer or
chief executive officer of the Borrower, dated as of the Sixth Amended and
Restated Effective Date and after giving effect to this Agreement:

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

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

SECTION
5.3.6  Updated Disclosure Schedules.

A certificate signed by the chief financial officer or
chief executive officer of the Borrower dated as of the Sixth Amended and
Restated Effective Date, proposing any necessary changes to the Schedules to
this Agreement in form and substance reasonably satisfactory to the Agent
occurring after the Original Closing Date.

SECTION
5.3.7  Officer’s Certificate of
In-House Counsel.

An officer’s certificate of the in-house legal counsel
of the Borrower on behalf of the Borrower and other Credit Parties dated as of
the Sixth Amended and Restated Effective Date in form and substance
satisfactory to the Agent.

SECTION
5.3.8  Amended and Restated Promissory
Notes.  Borrower shall have delivered
to Agent on behalf of each of the Lenders, executed amended and restated
promissory notes reflecting such Lender’s Revolving Commitment Amount as of the
Sixth Amended and Restated Effective Date.

SECTION
5.3.9  Other Documents.

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

ARTICLE VI

REPRESENTATIONS
AND WARRANTIES

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

 41
 

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

SECTION
6.2  Due Authorization,
Non-Contravention, etc.  The
execution, delivery and performance by the Borrower and each of its
Subsidiaries of this Agreement, the Notes and each other Loan Document executed
or to be executed by it, are within each such Credit Party’s  powers, have been duly authorized by all necessary
corporate action, and do not:

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

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

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

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

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

SECTION
6.5  Financial Information.  The audited financial statements of the
Borrower and its Subsidiaries on a consolidated basis as of December 31, 2005,
and the unaudited financial statements of the Borrower and its Subsidiaries on
a consolidated basis as of September 30, 2006, copies of which have been
furnished to the Agent and each Lender, have been prepared in accordance with
GAAP consistently applied (subject to ordinary, good faith year end audit
adjustments), and present fairly the consolidated financial position of the
Persons  

 42
 

covered
thereby as at the dates thereof and the results of their operations for the
periods then ended.

SECTION
6.6  No Material Adverse Change.
Since December 31, 2005, there has been no material adverse change in the
financial condition, operations, assets, business, properties or prospects of
the Borrower and its Subsidiaries taken as a whole.

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

SECTION
6.8  Subsidiaries.  (a) The Borrower has no Subsidiaries, except
those Subsidiaries:

(i)            which are identified in Schedule 6.8; or

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

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

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

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

 43

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

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

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

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

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

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

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

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

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

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

(i)            No
conditions exist at, on or under any property now or previously owned or leased
by the Borrower or any of its Subsidiaries which, with the passage of time, or
the 

 44
 

giving of
notice or both, reasonably would be expected to give rise to any material
liability under any Environmental Law.

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

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

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

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

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

 45
 

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

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

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

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

 46
 

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

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

SECTION 6.22  Subordination
Provisions.  The subordination
provisions contained in all notes, debentures and other instruments entered
into or issued in respect of Subordinated Debt are enforceable against the
issuer of the respective security and the holders thereof in accordance with
their respective terms, and the Loans and all other Obligations are within the
definitions of “Senior Indebtedness”, or other comparable definition, included
in such provisions.

SECTION 6.23  RICO.  None of the Borrower nor any of its
Subsidiaries is engaged in or has engaged in any course of conduct that
reasonably would be expected to subject any of their respective properties to
any Lien, seizure or other forfeiture under any criminal law, racketeer influenced
and corrupt organizations law, civil or criminal, or other similar laws.

 47
 

ARTICLE VII

COVENANTS

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

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

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

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

(c)           within five business days of becoming available and in any
event within 200 days after the end of each Fiscal Year, a copy of the
management letter (or other correspondence from Borrower’s independent public
accountants reasonably satisfactory to Agent) delivered to Borrower by Borrower’s
independent public accountants in connection with the audit of Borrower’s
financial statements for such previous Fiscal Year;

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

 48
 

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

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

(g)           promptly, but not later than five days after the date of
filing with the SEC, copies of all financial statements and reports that
Borrower sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10-K and 10-Q) that
Borrower or any of its Subsidiaries may make to, or file with, the SEC
(including, without limitation, pursuant to Section 7.2.9(b)) or any
national securities exchange;

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

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

 49
 

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

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

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

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

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

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

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

SECTION
7.1.4  Insurance. (a) Schedule
7.1.4 sets forth as of the date of this Agreement a true and complete
listing of all insurance maintained by the Borrower and each of its
Subsidiaries and each Minority ASC Entity.  
The Borrower will, and will cause each of its 

 50
 

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

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

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

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

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

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

 51
 

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

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

SECTION
7.1.8  Governmental Licenses.  The Borrower will, and will cause each of its
Subsidiaries to, obtain and maintain all material licenses, certificates of
need, other applicable permits, agreements, certifications and approvals of all
applicable governmental authorities as are required for the conduct of its
business as currently conducted and herein contemplated, Medicaid
Certifications and Medicaid Provider Agreements and Medicare Certifications and
Medicare Provider Agreements and certifications of third party payors the
failure of which has, or could reasonably be expected to have, a Material
Adverse Effect.

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

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

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

(b)           Promptly
upon request of the Agent or the Required Lenders, the Borrower shall (and
shall cause any of its Subsidiaries to) execute, acknowledge, deliver, record,
re-record, file, re-file, register and re-register, any and all such further
acts, deeds, conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and
other instruments the Agent or such Lenders, as the case may be, may reasonably
require from time to time in order (i) to carry out more effectively the
purposes of this Agreement or any other Loan Document, (ii) to subject any of
the properties, rights or interests 

 52
 

covered
by any of the Collateral Documents to the Liens intended to be created by any
of the Collateral Documents, (iii) to perfect and maintain the validity,
effectiveness and priority of any of the Collateral Documents and the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer, preserve, protect and confirm to the Agent and the Lenders
the rights granted or now or hereafter intended to be granted to the Agent and
the Lenders under any Loan Document or under any other document executed in
connection therewith.

SECTION
7.1.12  New Subsidiaries.  Within 30 Business Days after the date of the
acquisition or creation of any Subsidiary by the Borrower or a Subsidiary of
the Borrower or in the case of a Minority ASC Entity or Non-Wholly Owned ASC
Subsidiary which becomes a Wholly-Owned Subsidiary, such Person will cause to
be delivered to the Agent for the benefit of the Lenders each of the following:

(i)  in the case of a Subsidiary other than a
Non-Wholly-Owned ASC Subsidiary, a joinder to the Guaranty, the Guarantor
Pledge Agreement and the Guarantor Security Agreement;

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

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

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

(v)  to the extent requested by Agent in its
reasonable discretion, an opinion or opinions of counsel to the Borrower and
such Subsidiary (other than a Non-Wholly-Owned ASC Subsidiary), dated as of the
date of delivery of any of the documents provided in the foregoing clause (i)
and addressed to the Agent and the Lenders, in form and substance reasonably
acceptable to the Agent (which opinion may include assumptions and
qualifications of similar effect to those contained in the opinions of counsel
delivered pursuant to Section 5.1.8), to the effect that:

 53
 

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

(B)  the execution, delivery and performance of
the Guaranty, the Guarantor Pledge Agreement and the Guarantor Security
Agreement, as applicable, described in clause (i) of this Section 7.1.11,
have been duly authorized by all requisite action (including any required
shareholder, member or partner approval), such agreement has been duly executed
and delivered and constitutes the valid and binding obligation of such
Subsidiary, enforceable against such Subsidiary in accordance with its terms,
except to the extent such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors’
rights and remedies generally, or to general principles of equity, whether
enforcement thereof is considered in a court of law or equity; and

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

(vi)  current
copies of the charter documents, including, limited liability agreements and
certificates of formation, partnership agreements and certificates of limited
partnership, if applicable, and bylaws of such Subsidiary, minutes of duly
called and conducted meetings (or duly effected consent actions) of the Board
of Directors, members, partners, or appropriate committees thereof (and, if
required by such charter documents, bylaws or by applicable laws, of the
shareholders, members or partners) of such Subsidiary authorizing the actions
and the execution and delivery of documents described in this Section 7.1.11
and evidence satisfactory to the Agent (confirmation of the receipt of which
will be provided by the Agent to the Lenders) that such Subsidiary is Solvent
as of such date and after giving effect to the execution of any of the
documents required by clause (i) above.

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

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

 54

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

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

(b)           until the date of the initial Borrowing, Indebtedness
identified in Part A of Schedule 6.17;

(c)           Indebtedness, including Subordinated Debt, existing as of
the Sixth Amended and Restated Effective Date which is identified in Part B of Schedule
6.17, but without giving effect to any extensions, renewals or refinancing
thereof;

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

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

(f)            Indebtedness, in respect of Capitalized Lease
Liabilities, at any one time not to exceed in the aggregate $13,000,000 less
the amount of any Indebtedness which is outstanding and permitted solely under subsection
7.2.3.(c);

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

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

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

 55
 

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

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

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

(l)            Indebtedness represented by the Investments described in Section
7.2.5(h); and  

(m)          Indebtedness in an amount not to exceed
$16,000,000 in the aggregate at any one time outstanding and $3,000,000 to any
individual Minority ASC Entity or Non-Wholly Owned Subsidiary (other than
NovaMed of New Albany) at any one time outstanding, in each case when
aggregated with amounts outstanding pursuant to clause (o) below,
consisting of intercompany loans and advances made by the Borrower or any
Subsidiary to any Minority ASC Entity or Non-Wholly Owned Subsidiary or by a
Minority ASC Entity or Non-Wholly Owned Subsidiary to the Borrower or any other
Subsidiary (“Non-Credit Party Intercompany
Loans”), provided that (i) the payor shall have executed and
delivered to the payee a note (the “Non-Credit
Party Intercompany Note”) to evidence any such Non-Credit Party
Intercompany Loan, which Non-Credit Party Intercompany Note shall be in form
and substance satisfactory to Agent pledged to the Agent pursuant to the
relevant Collateral Documents as additional collateral security for the
Obligations, (ii) the payee shall record all Non-Credit Party Intercompany
Loans on its books and records in a manner satisfactory to Agent, and (iii) at
the time any such Non-Credit Party Intercompany Loan is made by a payee and
after giving effect thereto, each of the payee and the payor shall be Solvent;

(n)           Indebtedness consisting of Non-Credit
Party Intercompany Loans in excess of the amounts permitted by clauses (m)
or (o) of this Section 7.2.2, but in any event not to exceed
$24,000,000 in the aggregate when aggregated with amounts outstanding and
permitted by clauses (m) or (o) of this Section 7.2.2; provided,
that any such Non-Credit Party Intercompany Note permitted pursuant to this clause
(n) shall be secured by a perfected first priority lien on the assets of
such Minority ASC Entity or Non-Wholly Owned Subsidiary, as applicable, the
scope of which lien shall be satisfactory to the Agent and which lien shall be
assigned to the Agent;

(o)
Indebtedness consisting of guarantees by the Borrower or any Credit Party of
the obligations of any Non-Wholly Owned Subsidiary or Minority ASC Entity
(other than NovaMed of New Albany), in any event not to exceed $24,000,000 in
the aggregate at any one time outstanding and $3,000,000 to any individual
Non-Wholly Owned Subsidiary or Minority ASC Entity (other than NovaMed of New
Albany), in each case when aggregated with Indebtedness outstanding under clause
(m) above;

 56
 

(p)
Indebtedness of Borrower or any ASC Subsidiary owing to the seller of the
equity interests of a Non-Wholly-Owned ASC Subsidiary or Minority ASC
Subsidiary of the Borrower as part of the purchase price with respect to an ASC
Subsidiary Capital Event otherwise permitted hereunder;

(q)
Indebtedness of NovaMed of New Albany in an amount not to exceed $4,000,000
incurred in connection with the Surgicare of Jeffersonville Acquisition and for
working capital purposes;

(r)
Indebtedness of Borrower consisting of a guarantee of the Indebtedness of
NovaMed of New Albany permitted under clause (q) of this Section
7.2.2. provided that such guarantee is limited to a pro rata portion of
such Indebtedness equal to Borrower’s owned pro rata portion of the outstanding
equity interests of NovaMed of New Albany; 
 

provided, however, that no
Indebtedness otherwise permitted by clauses (d), (e), (f),
(g),  (h),  (i), (j),
(k), (l), (m), (n), (o) or (p) shall
be permitted if, after giving effect to the incurrence thereof, any Default
shall have occurred and be continuing.

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

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

(b)           until the date of the initial Borrowing; Liens securing
payment of Indebtedness of the type permitted and described in clause (b)
of Section 7.2.2;

(c)           purchase money security interests, in addition to, and not
in limitation of, the Capitalized Lease Liabilities described in clause (j)
hereof, on any property acquired or held by any Subsidiary in the ordinary
course of business, securing Indebtedness incurred or assumed for the purpose
of financing all or any part of the cost of acquiring such property; provided
that (i) any such Lien attaches to such property concurrently with or
within 20 days after the acquisition thereof, (ii) such Lien attaches solely to
the property so acquired in such transaction, and (iii) the principal amount of
the Indebtedness which is outstanding and which is secured by any and all such
purchase money security interests shall not at any time exceed $13,000,000 less
the amount of Indebtedness outstanding and permitted solely under subsection
7.2.2(f);

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

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

 57
 

(f)            Liens (other than any Lien imposed by ERISA) incurred in
the ordinary course of business in connection with workmen’s compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure performance of tenders, statutory obligations, leases and contracts
(other than for borrowed money) entered into in the ordinary course of business
or to secure obligations on surety or appeal bonds;

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

(h)           Liens in existence on the Sixth Amended and Restated
Effective Date and listed on Schedule 7.2.3, but without giving effect
to any extensions or renewals thereof; and

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

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

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

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

(m)          Liens on the assets of NovaMed of New Albany securing the
Indebtedness permitted by clause q of 
Section 7.2.2.

SECTION
7.2.4  Financial Condition.  The Borrower will not permit:

(a)           Its Net Worth as of the last day of
each Fiscal Quarter to be less than 75% of the amount of its Net Worth existing
on September 30, 2006, plus 50% of Net Income (without giving effect to
any losses) for each Fiscal Quarter occurring after September 30, 2006, plus
50% of the net proceeds from any equity issuance by the Borrower or any of its Subsidiaries
occurring since September 30, 2006, plus 50% of any incremental additive
equity associated with any Permitted Acquisition.

(b)           the Total Leverage Ratio as of the end of each Fiscal
Quarter for the twelve month period preceding such date to be greater than (i)
for the Fiscal Quarter ended December 31, 2006, 3.50:1.00; (ii) for any Fiscal
Quarter ended after the Sixth Amended and Restated Effective Date but prior to
the Fiscal Quarter ended June 30, 

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2008, 4.00:1.00;
(iii) for the Fiscal Quarter ended June 30, 2008 and the Fiscal Quarter ended
September 30, 2008, 3.75:1.00; and (iv) for the Fiscal Quarter ended December
31, 2008 and for each Fiscal Quarter thereafter, 3.50:1.00.

(c)           as of the last day of any Fiscal
Quarter the ratio of (a) EBITDA plus rent expenses incurred by the
Borrower and its Subsidiaries, minus Capital Expenditures incurred by
the Borrower and its Subsidiaries, minus cash taxes paid by the Borrower
and its Subsidiaries, in each case for the period of four fiscal quarters then
ending, to (b) Fixed Charges for such four fiscal quarter period to be less
than 1.40:1.0.

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

(a)           Investments existing on the Sixth Amended and Restated
Effective Date and identified in Schedule 7.2.5;

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

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

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

(e)           in the ordinary course of business, (1) Investments by the
Borrower in any of its Wholly-Owned Subsidiaries, or in any new Wholly-Owned
Subsidiary created or acquired after the Sixth Amended and Restated Effective
Date in connection with a Permitted Acquisition, (2) Investments by the
Borrower or any Wholly-Owned Subsidiary in any Non-Wholly-Owned ASC Subsidiary
in the form of Indebtedness permitted by Section 7.2.2(m) and (n) and
(3) other cash investments in Non-Wholly-Owned ASC Subsidiaries in the
aggregate at any time outstanding not to exceed $12,000,000 when aggregated
with Investments outstanding and permitted by Section 7.2.5(p);

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

 59
 

(g)           the acquisition by the Borrower or a Wholly-Owned
Subsidiary of the Borrower of 100% of the minority interests held by a Provider
in a non-Wholly-Owned Subsidiary, provided that any such acquisition is
made solely in connection with the merger of such non-Wholly-Owned Subsidiary
into the Borrower or a Wholly-Owned Subsidiary of the Borrower as permitted by Section
7.2.8;

(h)           Investments by the Borrower or any Subsidiary consisting
of loans to Providers in an amount not to exceed $500,000 individually or
$3,200,000 in the aggregate outstanding at any one time;

(i)            Investments constituting Hedging
Agreements of the Borrower;

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

(k)           Investments (other than Permitted
Acquisitions) by the Borrower or a Subsidiary of the Borrower pursuant to ASC
Subsidiary Capital Events provided that (1) no Default or Event of Default
shall have occurred or be continuing both before and after giving effect to
such ASC Subsidiary Capital Event, (2) the Borrower must be able to comply on a
pro forma basis after giving effect to such ASC Subsidiary Capital Event with
all of the covenants of this Agreement; and (3) in the event that the Borrower’s
Total Leverage Ratio on a pro forma basis (after giving effect to the ASC
Subsidiary Capital Event) is greater than 3.25:1.0 the aggregate consideration
in connection with such ASC Subsidiary Capital Event shall not exceed
$25,000,000 individually and $72,000,0000 for all ASC Subsidiary Capital Events
consummated within the previous twelve (12) month period when aggregated with
the Consideration paid for Permitted Acquisitions permitted by Section
7.2.5(f) during such period, without duplication;

(l)            Permitted Seller Debt in connection
with Part A of Exhibit K;

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

(n)           Investments consisting of Minority
ASC Investments in excess of the amounts permitted by clause (m) above,
but in any event not to exceed $4,000,000 in the 

 60
 

aggregate when
aggregated with amounts outstanding and permitted by clause (m) above provided,
that any such Minority ASC Investments permitted pursuant to this clause (n)
shall be secured by a perfected first priority lien on the assets of such
Minority ASC Entity, the scope of which lien shall be satisfactory to the Agent
and which lien shall be assigned to the Agent;

(o)
Investments by the Borrower and its Subsidiaries in ASC Startups in an amount
not to exceed $12,000,000 (unless consented to by the Required Lenders) at any
one time outstanding; provided, once the Borrower has sold an equity
interest in an ASC Startup as permitted under Section 7.2.9(c), the
Investment in the ASC Startup shall no longer be considered as “outstanding”
for purposes of this clause (o);

(p) other Investments in Minority ASC Entities of the type not listed
above in an amount not to exceed $12,000,000 in the aggregate outstanding for
any such Investments permitted pursuant to this clause (p) when
aggregated with any Investments outstanding and permitted under Section
7.2.5(e)(3) above;

provided, however, that

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

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

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

(a)           The Borrower will not, and will not permit any of its
Subsidiaries to, declare, pay or make any dividend or distribution (in cash,
property or obligations) on any shares of any class of capital stock (now or hereafter
outstanding) of the Borrower or such Subsidiary or on any warrants, options or
other rights with respect to any shares of any class of capital stock (now or
hereafter outstanding) of the Borrower or such Subsidiary (other than in the
case of  (I) the Borrower (x) dividends
or distributions payable in its common stock or warrants to purchase its common
stock or splitups or reclassifications of its stock into additional or other
shares of its common stock,  (y)
scheduled dividend payments on its preferred stock so long as no Default or
Event of Default has occurred and is continuing both before and after giving
effect to the payment of such dividend and 
(z) distributions to any Subsidiary which is a limited liability company
of the Borrower solely to permit the members thereof to make payment of its
federal and state income tax liability attributable to such limited liability
company’s taxable income, whether or not 
a Default or an Event of Default then or (II) any Subsidiary which is a
limited liability company or limited partnership, distributions to 

 61
 

members of any
such Subsidiary solely to permit such members to make payment of their federal
and state income tax liability attributably to such member’s taxable income of
such Subsidiary whether or not a Default or an Event of Default than exists) or
apply, or permit any of its Subsidiaries to apply, any of its funds, property
or assets to the purchase, redemption, sinking fund or other retirement of, or
agree or permit any of its Subsidiaries to purchase or redeem, any shares of
any class of capital stock (now or hereafter outstanding) of the Borrower, or
warrants, options or other rights with respect to any shares of any class of
capital stock (now or hereafter outstanding) of the Borrower, except that, (A),
in addition to distributions permitted pursuant to clause (a)(II) above,  any Subsidiary of the Borrower  may 
declare and pay cash dividends and distributions to its equity holders
and (B) so long as no Default or Event of Default then exists or would
result therefrom and so long as the Borrower would be able to comply on a pro
forma basis, assuming such redemption or purchase occurred, with all of the
covenants contained in this Agreement, the Borrower may redeem or purchase
shares of its stock (i) held by former employees of the Borrower or any of its
Subsidiaries following their death, disability or the termination of their
employment or (ii) as otherwise permitted pursuant to the stock-based
compensation plans of Borrower or any of its Subsidiaries;

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

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

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

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

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

(e)           Notwithstanding
anything else herein to the contrary, Borrower may repurchase and redeem its
common stock provided that (i) the aggregate amount of all such repurchases
shall made on and after the Sixth Amended and Restated Effective Date shall not
exceed $8,000,000, (ii) any offer to repurchase and any such repurchase shall
be conducted in compliance with all applicable federal and state securities
laws, and (iii) upon completion of such repurchase, such common stock
repurchased shall be retired 

 62
 

into
treasury by Borrower.  In addition to
using cash to effectuate such repurchases, such repurchases of Borrower’s
common stock may also include common stock received by Borrower or its
Subsidiaries as consideration for Permitted Equity Ownership Sales.  For purposes of measuring the effect of such
repurchases on the aforementioned $8,000,000 cap, the value of the common stock
retired in a Permitted Equity Ownership Sale will be the average closing price
of Borrower’s common stock during the 30-trading day period immediately
preceding such Permitted Equity Ownership Sale.

SECTION 7.2.7  Intentionally Omitted.

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

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

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

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

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

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

(ii)  the net book value of such assets, together
with the net book value of all other assets sold, transferred, leased,
contributed or conveyed otherwise than in the ordinary course of business by
the Borrower or any of its Subsidiaries pursuant to this clause since the Sixth
Amended and Restated Effective Date, does 

 63
 

not exceed $3,000,000  (exclusive of the value of any transaction
described in the preceding clause (i)); or

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

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

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

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

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

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

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

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

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

 64

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

SECTION
7.2.10  Modification of Certain
Agreements. Except as otherwise permitted pursuant to a Permitted Asset
Disposition or Section 7.1.7 hereof, the Borrower will not, and will not
permit any of its Subsidiaries to, consent to any amendment, supplement or
other modification of any of the terms or provisions contained in, or
applicable to, its Organizational Documents, any document, once entered into,
relating to a Permitted Acquisition, other than any amendment, supplement or
other modification that conforms with applicable laws in all material respects
and is not material or does not have an adverse effect on the Lenders as
Lenders under the Loan Documents, or any document or instrument evidencing or
applicable to any Subordinated Debt or any put option granted to the holders of
Subordinated Debt, other than any amendment, supplement or other modification
which extends the date or reduces the amount of any required repayment or
redemption.  Notwithstanding anything
else in this Section 7.2.10 to the contrary, the Borrower and its
Subsidiaries may terminate or make any necessary modification to the
Organizational Documents which is the subject of a Permitted Asset Disposition.

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

SECTION
7.2.12  Negative Pledges, Restrictive
Agreements, etc.  The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any agreement
(excluding this Agreement, any other Loan Document and any agreement governing
any Indebtedness permitted either by clause (b) of Section 7.2.2
as in effect on the Sixth Amended and Restated Effective Date or by clause
(d) of Section 7.2.2 as to the assets financed with the proceeds of
such Indebtedness) prohibiting:

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

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

 65
 

restricts the ability of any such Subsidiary to make
any payment, directly or indirectly, to the Borrower.

ARTICLE VIII

EVENTS OF DEFAULT

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

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

SECTION 8.1.2  Breach of
Warranty.  Any representation or
warranty of any Credit Party made or deemed to be made hereunder or in any
other Loan Document executed by it, any Letter of Credit or any other writing
or certificate furnished by or on behalf of any Credit Party to the Agent or
any Lender for the purposes of or in connection with this Agreement or any such
other Loan Document or Letter of Credit (including any certificates delivered
pursuant to Article V) is or shall be incorrect when made in any
material respect.

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

SECTION 8.1.4  Non-Performance
of Other Covenants and Obligations. 
Any Credit Party shall default in the due performance and observance of any
other agreement (other than Section 7.2.4(d)) contained herein or in any
other Loan Document executed by it, and such default shall continue unremedied
for a period of 30 days after notice thereof shall have been given to the
Borrower by the Agent or any Lender.

SECTION 8.1.5  Default on
Other Indebtedness.  A default shall
occur in the payment when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in Section 8.1.1) of the Borrower or any Subsidiary having a
principal amount, individually or in the aggregate, in excess of $1,600,000, or
a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such holders, to
cause such Indebtedness to become due and payable prior to its expressed
maturity.

SECTION 8.1.6  Judgments.  Any judgment or order for the payment of
money in excess of $1,600,000 shall be rendered against the Borrower or any
Subsidiary (which judgment is not covered by insurance and with respect to such
judgment an insurance carrier has not accepted responsibility for coverage) and
either:

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

(b)           there shall be any period of 10
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect.

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

(a)           the institution of any steps by the Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan if, as
a result of such termination, the Borrower or any such member reasonably would
be expected to be required to make a contribution to such Pension Plan, or
would reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of $2,000,000; or

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

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

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

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

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

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

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

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

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

SECTION 8.1.11  Fraud and
Abuse Laws.  Receipt by the Borrower
or any Subsidiary of a notice from a governmental authority or third party
payor that it intends to disallow requested reimbursements, or intends to
demand or demands adjustment or repayment of past reimbursements in excess of,
either individually or in the aggregate with any other disallowed
reimbursements, ten percent (10%) of the net revenues of the Borrower for the
previous fiscal quarter respecting amounts submitted for reimbursement or
collected by such Person from participation in the Medicare, Medicaid or third
party payor programs.

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

SECTION 8.2  Action if
Bankruptcy.  If any Event of Default
described in clauses (a) through (e) of Section 8.1.9
shall occur, the Revolving Commitments (if not theretofore terminated) and the
obligation of the Letter of Credit Issuer to issue Letters of Credit shall
automatically terminate and the outstanding principal amount of all outstanding
Loans and all 

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other Obligations shall automatically be and become immediately due and
payable, without notice or demand.

SECTION 8.3  Action if Other
Event of Default.  If any  Event of Default (other than any Event of
Default described in clauses (a) through (e) of Section 8.1.9)
shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Agent, upon the direction of the Required Lenders, shall by
notice to the Borrower declare all or any portion of the outstanding principal
amount of the Loans and other Obligations to be due and payable and/or the
Revolving Commitments (if not theretofore terminated) and/or the obligation of
the Letter of Credit Issuer to issue Letters of Credit to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations which
shall be so declared due and payable shall be and become immediately due and
payable, without further notice, demand or presentment, and/or, as the case may
be, the Revolving Commitments shall terminate.

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

ARTICLE IX

THE AGENT

SECTION 9.1  Actions.  Each Lender hereby appoints National City as
its Agent under and for purposes of this Agreement, the Notes and each other
Loan Document.  Each Lender authorizes
the Agent to act on behalf of such Lender under this Agreement, the Notes and
each other Loan Document and, in the absence of other written instructions from
the Required Lenders received from time to time by the Agent (with respect to
which the Agent agrees that it will comply, except as otherwise provided in
this Section or as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof, together with such powers as may be reasonably
incidental thereto.  Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Agent, pro  rata according to such Lender’s Percentage, from
and against any and all liabilities, obligations, losses, damages, claims,
costs or expenses of any kind or nature whatsoever which may at any time be
imposed on, incurred by, or asserted against, the Agent in any way relating to
or arising out of this Agreement, the Notes and any 

 69
 

other Loan Document, including reasonable attorneys’ fees, and as to
which the Agent is not reimbursed by the Borrower; provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from the Agent’s gross negligence or willful misconduct.  The Agent shall not be required to take any
action hereunder, under the Notes or under any other Loan Document, or to
prosecute or defend any suit in respect of this Agreement, the Notes or any
other Loan Document, unless it is indemnified hereunder to its
satisfaction.  If any indemnity in favor
of the Agent shall be or become, in the Agent’s determination, inadequate, the
Agent may call for additional indemnification from the Lenders and cease to do
the acts indemnified against hereunder until such additional indemnity is
given.

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

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

SECTION 9.4  Successor.  The Agent may resign as such at any time upon
at least 30 days’ prior notice to the Borrower and all Lenders.  If the Agent at any time shall resign, the
Required Lenders, with, so long as no Default or Event of Default exists and is
continuing, the consent of the Borrower, 
may appoint another Lender as a successor Agent which shall thereupon
become the Agent hereunder.  If no
successor Agent shall have been so appointed by the Required Lenders, and shall
have accepted such appointment, within 30 days after the retiring Agent’s
giving notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be one of the Lenders or a commercial
banking institution organized under the laws of the U.S. (or any State thereof)
or a U.S. branch or agency 

 70
 

of a commercial banking institution, and having a combined capital and
surplus of at least $500,000,000.  Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent may
reasonably  request, and shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations under this Agreement. 
After any retiring Agent’s resignation hereunder as the Agent, the
provisions of

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

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

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

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

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

ARTICLE X

MISCELLANEOUS PROVISIONS

SECTION 10.1  Waivers,
Amendments, etc.  The provisions of
this Agreement and of each other Loan Document may from time to time be
amended, modified or waived, if such amendment, modification or waiver is in
writing and consented to by the Borrower and the 

 71
 

Required Lenders; provided, however, that no such
amendment, modification or waiver which would:

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

(b)           modify this Section 10.1, change the definition of “Required Lenders”, increase the Revolving
Commitment Amount or the Percentage of any Lender, reduce any fees described in
Article III, change the schedule of repayments of Loans provided for in Section
3.1.2, release any Guarantor from its obligations pursuant to any Guaranty
(except in connection with a Permitted Asset Disposition or as otherwise
permitted hereby, in which such cases no consent of any Lender is required),
release all or substantially all of the collateral security (except in
connection with a Permitted Asset Disposition or as otherwise permitted hereby,
in which such cases no consent of any Lender is required), except as otherwise
specifically provided in any Loan Document or extend the Revolving Commitment
Termination Date or Maturity Date shall be made without the consent of each
Lender and each holder of a Note;

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

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

(e)           modify
Section 2.7 or 8.4 shall be made without the consent of the
Letter of Credit Issuer.

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

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

 72
 

be deemed given when transmitted, provided such notice is delivered or
facsimile transmitted during regular business hours on a Business Day.

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

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

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

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

The Borrower further agrees to pay, and to save the
Agent and the Lenders harmless from all liability for, any stamp or other taxes
which may be payable in connection with the execution or delivery of this
Agreement, the borrowings hereunder, or the issuance of the Notes or any other
Loan Documents.  The Borrower also agrees
to reimburse the Agent and each Lender upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys’ fees and legal
expenses) incurred by the Agent or such Lender in connection with (x) the
negotiation of any restructuring or “work-out”, whether or not consummated, of
any Obligations and (y) the enforcement of any Obligations.  Notwithstanding anything contained herein to
the contrary, the Borrower shall not be responsible for any costs or expenses
incurred by the Agent or any Lender in connection with the transactions
contemplated by either of Section 10.11.1 or 10.11.2 hereof.

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

 73
 

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

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

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

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

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

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

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

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

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

 74

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

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

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

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

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

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

SECTION
10.11.1  Assignments.  Any Lender:

(i)            with the written consent of the
Agent and, provided no Event of Default then shall exist or be continuing, the
Borrower (which consent shall not be unreasonably delayed or withheld) may at
any time assign and delegate to one or more commercial banks or other financial
institutions, and

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

(each Person described in either of the foregoing
clauses as being the Person to whom such assignment and delegation is to be
made, being hereinafter referred to as an “Assignee
Lender”), all or any fraction of such Lender’s total Loans and
Revolving Commitment (which assignment and delegation shall be of a constant,
and not a varying, percentage of all the assigning Lender’s Loans and Revolving
Commitment) in a minimum aggregate amount of $5,000,000 (or such lesser amount
to the extent that after giving effect to such assignment such Lender’s total
Loans and Revolving Commitment is reduced to zero); provided, however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in the 

 75
 

penultimate sentence of Section 4.6, and provided
further, however, that, the Borrower and the Agent shall be entitled
to continue to deal solely and directly with such Lender in connection with the
interests so assigned and delegated to an Assignee Lender until:

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

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

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

From and after the date that the Agent accepts such
Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed
automatically to have become a party hereto and to the extent that rights and
obligations hereunder have been assigned and delegated to such Assignee Lender
in connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the other
Loan Documents.  Within five Business
Days after its receipt of notice that the Agent has received an executed Lender
Assignment Agreement, the Borrower shall execute and deliver to the Agent (for
delivery to the relevant Assignee Lender) a new Note evidencing such Assignee
Lender’s assigned Loans and Revolving Commitment and, if the assignor Lender
has retained Loans and a Revolving Commitment hereunder, a replacement Note in
the principal amount of the Loans and Revolving Commitment retained by the
assignor Lender hereunder (such Note to be in exchange for, but not in payment
of, that Note then held by such assignor Lender).  Each such Note shall be dated the date of the
predecessor Note.  The assignor Lender
shall mark the predecessor Note “exchanged” and deliver it to the
Borrower.  Accrued interest on that part
of the predecessor Note evidenced by the new Note, and accrued fees, shall be
paid as provided in the Lender Assignment Agreement.  Accrued interest on that part of the
predecessor Note evidenced by the replacement Note shall be paid to the
assignor Lender.  Accrued interest and
accrued fees shall be paid at the same time or times provided in the
predecessor Note and in this Agreement. 
Such assignor Lender or such Assignee Lender must also pay a processing
fee to the Agent upon delivery of any Lender Assignment Agreement in the amount
of $3,500.  Any attempted assignment and
delegation not made in accordance with this Section 10.11.1 shall be
null and void.

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

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

 76
 

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

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

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

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

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

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

(i)            unless specifically prohibited by applicable law or court
order, each Lender shall notify the Borrower of any request by any governmental
agency or representative thereof (other than any such request in connection
with an examination of the financial condition of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information;

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

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

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

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

 77
 

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

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

SECTION
10.13  Amendment and Restatement.

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

Notwithstanding the modifications effected by this
Agreement of the representations, warranties and covenants of the Loan Parties
contained in the Original Credit Agreement (as previously amended, restated or
otherwise modified including in connection with the Fifth Amended and Restated
Credit Agreement), Borrower acknowledges and agrees that any causes of action
or other rights created in favor of any Lender and its successors arising out
of the representations and warranties of any Credit Party contained in or
delivered (including representations and warranties delivered in connection
with the making of the loans or other extensions of credit thereunder) in
connection with the Original Credit Agreement (as previously amended, restated
or otherwise modified including in connection with the Fifth Amended and
Restated Credit Agreement) or any other Loan Document executed in connection
therewith shall 

 78
 

survive the execution and
delivery of this Agreement, provided, further, that the
Obligations under the other Loan Documents shall also continue in full force
and effect including, without limitation, the Obligations of each Credit Party
pursuant to the Collateral Documents. All indemnification obligations of each Credit
Party pursuant to the Original Credit Agreement (as previously amended,
restated or otherwise modified including in connection with the Fifth Amended
and Restated Credit Agreement) (including any arising from a breach of the
representations thereunder) shall survive the amendment and restatement of the
Original Credit Agreement (as previously amended, restated or otherwise
modified including in connection with the Fifth Amended and Restated Credit
Agreement) pursuant to this Agreement.

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

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

 79
 

SECTION 10.15  Waiver of Jury Trial.  THE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE AGENT, THE LENDERS OR THE BORROWER.  THE BORROWER ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

SECTION 10.16  USA Patriot Act Notice.

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

*    *    *

 

 80

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

	
  

  	
   

  	
  NOVAMED, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
  /s/ Scott T. Macomber

  
	
   

  	
   

  	
   

  	
   

  	
  Title: EVP and CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONAL CITY BANK,

  
	
   

  	
   

  	
  Individually as a Lender, as Letter of Credit

  
	
   

  	
   

  	
  Issuer and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ James Kershner

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LASALLE BANK NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ Sam Dendrinos

  
	
   

  	
   

  	
   

  	
   

  	
  Title: First Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE NORTHERN TRUST COMPANY

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   

  	
  /s/ Phillip N. McCaulay

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Second Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ASSOCIATED BANK, N.A.

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ Viktor Gottlieb

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Corporate Banking

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHARTER ONE BANK

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ Richard H. Ault

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  

 

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  JPMORGAN CHASE BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ Dianne Stark

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Senior Banker

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BMO CAPITAL MARKETS FINANCING, INC.

  
	
   

  	
   

  	
  Individually as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By 

  	
   

  	
  /s/ Todd Kostelnik

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  

 

TABLE OF CONTENTS

	
  

  	
   

  	
  Page

  
	
  ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 1.1
  Defined Terms

  	
   

  	
  1

  
	
  SECTION 1.2 Use
  of Defined Terms

  	
   

  	
  22

  
	
  SECTION 1.3
  Cross-References

  	
   

  	
  22

  
	
  SECTION 1.4
  Accounting Principles

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  ARTICLE II REVOLVING COMMITMENTS, BORROWING
  PROCEDURES AND NOTES

  	
   

  	
  22

  
	
   

  	
   

  	
   

  
	
  SECTION 2.1
  Revolving Commitments

  	
   

  	
  22

  
	
  SECTION 2.1.1
  Revolving Commitment of Each Lender

  	
   

  	
  22

  
	
  SECTION 2.1.2
  Lenders Not Permitted or Required To Make Loans

  	
   

  	
  22

  
	
  SECTION 2.1.3
  Revolver Increase

  	
   

  	
  23

  
	
  SECTION 2.2
  Reduction of Revolving Commitment Amount

  	
   

  	
  23

  
	
  SECTION 2.2.1
  Optional

  	
   

  	
  23

  
	
  SECTION 2.2.2
  Mandatory Reductions and Prepayments

  	
   

  	
  24

  
	
  SECTION 2.3
  Borrowing Procedure

  	
   

  	
  25

  
	
  SECTION 2.4
  Continuation and Conversion Elections

  	
   

  	
  25

  
	
  SECTION 2.5 Funding

  	
   

  	
  25

  
	
  SECTION 2.6
  Notes

  	
   

  	
  25

  
	
  SECTION 2.7
  Letters of Credit

  	
   

  	
  26

  
	
  SECTION 2.7.1
  Issuance of Letters of Credit

  	
   

  	
  26

  
	
  SECTION 2.7.2
  Participating Interests

  	
   

  	
  26

  
	
  SECTION 2.7.3
  Reimbursement Upon Drawing

  	
   

  	
  26

  
	
  SECTION 2.7.4
  Request for Letter of Credit

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND
  FEES

  	
   

  	
  27

  
	
   

  	
   

  	
   

  
	
  SECTION 3.1
  Repayments and Prepayments

  	
   

  	
  27

  
	
  SECTION 3.1.1
  Prior to the Revolving Commitment Termination Date

  	
   

  	
  27

  
	
  SECTION 3.1.2 On
  the Maturity Date

  	
   

  	
  28

  
	
  SECTION 3.1.3
  Extension of Maturity Date

  	
   

  	
  28

  
	
  SECTION 3.2
  Interest Provisions

  	
   

  	
  29

  
	
  SECTION 3.2.1
  Rates

  	
   

  	
  29

  
	
  SECTION 3.2.2
  Post-Maturity Rates

  	
   

  	
  31

  
	
  SECTION 3.2.3
  Payment Dates

  	
   

  	
  31

  
	
  SECTION 3.2.4
  Fees

  	
   

  	
  31

  
	
  SECTION 3.2.5
  Revolving Commitment Fee

  	
   

  	
  31

  
	
  SECTION 3.2.6
  Letter of Credit Fees

  	
   

  	
  32

  
	
  SECTION 3.2.7
  Agency Fees

  	
   

  	
  32

  

 

 

	
  ARTICLE IV LIBO RATE AND OTHER PROVISIONS

  	
   

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 4.1 LIBO
  Rate Lending Unlawful

  	
   

  	
  32

  
	
  SECTION 4.2
  Deposits Unavailable

  	
   

  	
  32

  
	
  SECTION 4.3  Increased LIBO Rate Loan Costs, etc

  	
   

  	
  33

  
	
  SECTION 4.4  Funding Losses

  	
   

  	
  33

  
	
  SECTION 4.5  Increased Capital Costs

  	
   

  	
  34

  
	
  SECTION 4.6  Taxes

  	
   

  	
  34

  
	
  SECTION 4.7  Payments, Computations, etc

  	
   

  	
  35

  
	
  SECTION 4.8  Sharing of Payments

  	
   

  	
  35

  
	
  SECTION 4.9  Setoff

  	
   

  	
  36

  
	
  SECTION
  4.10  Use of Proceeds

  	
   

  	
  36

  
	
  SECTION
  4.11  Changes to Other Branches; Equal
  Treatment of Borrower

  	
   

  	
  36

  
	
  SECTION
  4.12  Replacement of Lenders

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE V  CONDITIONS TO BORROWING

  	
   

  	
  37

  
	
   

  	
   

  	
   

  
	
  SECTION 5.1  Initial Borrowing

  	
   

  	
  37

  
	
  SECTION
  5.1.1  Resolutions, etc

  	
   

  	
  37

  
	
  SECTION
  5.1.2  Delivery of Notes

  	
   

  	
  38

  
	
  SECTION 5.1.3  Applicable Margin

  	
   

  	
  38

  
	
  SECTION
  5.1.4  Guaranty

  	
   

  	
  38

  
	
  SECTION
  5.1.5  Pledge Agreements

  	
   

  	
  38

  
	
  SECTION
  5.1.6  Security Agreements

  	
   

  	
  38

  
	
  SECTION
  5.1.7  Intellectual Property Assignment

  	
   

  	
  39

  
	
  SECTION
  5.1.8  Opinions of Counsel

  	
   

  	
  39

  
	
  SECTION
  5.1.9  Agreements

  	
   

  	
  39

  
	
  SECTION
  5.1.10  Closing Fees, Expenses, etc

  	
   

  	
  39

  
	
  SECTION 5.2  All Borrowings and Letters of Credit

  	
   

  	
  39

  
	
  SECTION
  5.2.1  Compliance with Warranties, No
  Default, etc

  	
   

  	
  39

  
	
  SECTION
  5.2.2  Borrowing Request; LC Notice

  	
   

  	
  40

  
	
  SECTION
  5.2.3  Satisfactory Legal Form

  	
   

  	
  40

  
	
  SECTION 5.3  Conditions to Sixth Amended and Restated
  Effective Date

  	
   

  	
  40

  
	
  SECTION
  5.3.1  Executed Signature Pages to
  Agreement

  	
   

  	
  40

  
	
  SECTION
  5.3.2  Executed Reaffirmation of
  Collateral Documents

  	
   

  	
  40

  
	
  SECTION
  5.3.3  Payment of Fees and Expenses

  	
   

  	
  40

  
	
  SECTION
  5.3.4  Resolutions, etc

  	
   

  	
  40

  
	
  SECTION
  5.3.5  Certificate

  	
   

  	
  41

  
	
  SECTION
  5.3.6  Updated Disclosure Schedules

  	
   

  	
  41

  
	
  SECTION
  5.3.7  Officer’s Certificate of
  In-House Counsel

  	
   

  	
  41

  
	
  SECTION
  5.3.8  Amended and Restated Promissory
  Notes

  	
   

  	
  41

  
	
  SECTION
  5.3.9  Other Documents

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  41

  
	
   

  	
   

  	
   

  
	
  SECTION 6.1  Organization, etc

  	
   

  	
  42

  
	
  SECTION 6.2  Due Authorization, Non-Contravention, etc

  	
   

  	
  42

  

 

 

	
  SECTION 6.3  Government Approval, Regulation, etc

  	
   

  	
  42

  
	
  SECTION 6.4  Validity, etc

  	
   

  	
  42

  
	
  SECTION 6.5  Financial Information

  	
   

  	
  42

  
	
  SECTION 6.6  No Material Adverse Change

  	
   

  	
  43

  
	
  SECTION 6.7  Litigation, Labor Controversies, etc

  	
   

  	
  43

  
	
  SECTION 6.8  Subsidiaries

  	
   

  	
  43

  
	
  SECTION 6.9  Ownership of Properties

  	
   

  	
  43

  
	
  SECTION 6.10  Taxes

  	
   

  	
  43

  
	
  SECTION
  6.11  Pension and Welfare Plans

  	
   

  	
  43

  
	
  SECTION
  6.12  Environmental Warranties

  	
   

  	
  44

  
	
  SECTION
  6.13  Regulations T, U and X

  	
   

  	
  45

  
	
  SECTION
  6.14  Accuracy of Information

  	
   

  	
  45

  
	
  SECTION
  6.15  Solvency

  	
   

  	
  45

  
	
  SECTION
  6.16  Collateral Documents

  	
   

  	
  45

  
	
  SECTION
  6.17  Indebtedness

  	
   

  	
  45

  
	
  SECTION
  6.18  Other Agreements/Program
  Eligibility

  	
   

  	
  46

  
	
  SECTION
  6.19  Reimbursement from Third Party
  Payors

  	
   

  	
  45

  
	
  SECTION
  6.20  Legal Compliance

  	
   

  	
  47

  
	
  SECTION
  6.21  Licensing and Accreditation

  	
   

  	
  47

  
	
  SECTION
  6.22  Subordination Provisions

  	
   

  	
  47

  
	
  SECTION
  6.23  RICO

  	
   

  	
  47

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII  COVENANTS

  	
   

  	
  48

  
	
   

  	
   

  	
   

  
	
  SECTION 7.1  Affirmative Covenants

  	
   

  	
  48

  
	
  SECTION
  7.1.1  Financial Information, Reports,
  Notices, etc

  	
   

  	
  48

  
	
  SECTION
  7.1.2  Compliance with Laws, etc

  	
   

  	
  50

  
	
  SECTION
  7.1.3  Maintenance of Properties

  	
   

  	
  50

  
	
  SECTION
  7.1.4  Insurance

  	
   

  	
  50

  
	
  SECTION
  7.1.4  Insurance

  	
   

  	
  50

  
	
  SECTION
  7.1.5  Books and Records

  	
   

  	
  50

  
	
  SECTION
  7.1.6  Environmental Covenant

  	
   

  	
  51

  
	
  SECTION
  7.1.7  Changes to Certain Agreements

  	
   

  	
  51

  
	
  SECTION
  7.1.8  Governmental Licenses

  	
   

  	
  52

  
	
  SECTION
  7.1.9  Covenants Extending to Other
  Persons

  	
   

  	
  52

  
	
  SECTION
  7.1.10  Solvency

  	
   

  	
  52

  
	
  SECTION
  7.1.11  Further Assurances

  	
   

  	
  52

  
	
  SECTION
  7.1.12  New Subsidiaries

  	
   

  	
  53

  
	
  SECTION 7.2  Negative Covenants

  	
   

  	
  54

  
	
  SECTION
  7.2.1  Business Activities

  	
   

  	
  54

  
	
  SECTION
  7.2.2  Indebtedness

  	
   

  	
  55

  
	
  SECTION
  7.2.3  Liens

  	
   

  	
  57

  
	
  SECTION
  7.2.4  Financial Condition

  	
   

  	
  57

  
	
  SECTION
  7.2.5  Investments

  	
   

  	
  59

  
	
  SECTION
  7.2.6  Restricted Payments, etc

  	
   

  	
  61

  
	
  SECTION
  7.2.7  Intentionally Omitted

  	
   

  	
  63

  
	
  SECTION
  7.2.8  Consolidation, Merger, etc

  	
   

  	
  63

  
	
  SECTION 7.2.9  Asset and Capital Stock Dispositions, etc

  	
   

  	
  63

  

 

 

	
  SECTION 7.2.10  Modification of Certain Agreements

  	
   

  	
  65

  
	
  SECTION
  7.2.11  Transactions with Affiliates

  	
   

  	
  65

  
	
  SECTION
  7.2.12  Negative Pledges, Restrictive
  Agreements, etc

  	
   

  	
  65

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  VIII  EVENTS OF DEFAULT

  	
   

  	
  66

  
	
   

  	
   

  	
   

  
	
  SECTION 8.1  Listing of Events of Default

  	
   

  	
  66

  
	
  SECTION
  8.1.1  Non-Payment of Obligations

  	
   

  	
  66

  
	
  SECTION
  8.1.2  Breach of Warranty

  	
   

  	
  66

  
	
  SECTION
  8.1.3  Non-Performance of Certain
  Covenants and Obligations

  	
   

  	
  66

  
	
  SECTION 8.1.4  Non-Performance of Other Covenants and
  Obligations

  	
   

  	
  66

  
	
  SECTION
  8.1.5  Default on Other Indebtedness

  	
   

  	
  66

  
	
  SECTION
  8.1.6  Judgments

  	
   

  	
  66

  
	
  SECTION
  8.1.7  Pension Plans

  	
   

  	
  67

  
	
  SECTION
  8.1.8  Change of Control

  	
   

  	
  67

  
	
  SECTION
  8.1.9  Bankruptcy, Insolvency, etc

  	
   

  	
  67

  
	
  SECTION
  8.1.10  Impairment of Security, etc

  	
   

  	
  68

  
	
  SECTION
  8.1.11  Fraud and Abuse Laws

  	
   

  	
  68

  
	
  SECTION
  8.1.12  Certifications

  	
   

  	
  68

  
	
  SECTION 8.2  Action if Bankruptcy

  	
   

  	
  68

  
	
  SECTION 8.3  Action if Other Event of Default

  	
   

  	
  68

  
	
  SECTION 8.4  Letters of Credit

  	
   

  	
  69

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX  THE AGENT

  	
   

  	
  69

  
	
   

  	
   

  	
   

  
	
  SECTION 9.1  Actions

  	
   

  	
  69

  
	
  SECTION 9.2  Funding Reliance, etc

  	
   

  	
  70

  
	
  SECTION 9.3  Exculpation

  	
   

  	
  70

  
	
  SECTION 9.4  Successor

  	
   

  	
  70

  
	
  SECTION 9.5  Loans by National City

  	
   

  	
  71

  
	
  SECTION 9.6  Credit Decisions

  	
   

  	
  71

  
	
  SECTION 9.7  Copies, etc

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  ARTICLE X  MISCELLANEOUS PROVISIONS

  	
   

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION
  10.1  Waivers, Amendments, etc

  	
   

  	
  71

  
	
  SECTION
  10.2  Notices

  	
   

  	
  72

  
	
  SECTION
  10.3  Payment of Costs and Expenses

  	
   

  	
  73

  
	
  SECTION
  10.4  Indemnification

  	
   

  	
  73

  
	
  SECTION
  10.5  Survival

  	
   

  	
  74

  
	
  SECTION 10.6  Severability

  	
   

  	
  74

  
	
  SECTION
  10.7  Headings

  	
   

  	
  74

  
	
  SECTION
  10.8  Execution in Counterparts,
  Effectiveness, etc

  	
   

  	
  75

  
	
  SECTION
  10.9  Governing Law; Entire Agreement

  	
   

  	
  75

  
	
  SECTION
  10.10  Successors and Assigns

  	
   

  	
  75

  
	
  SECTION
  10.11  Sale and Transfer of Loans and
  Note; Participations in Loans and Note

  	
   

  	
  75

  

 

 

	
  SECTION 10.11.1  Assignments

  	
   

  	
  75

  
	
  SECTION
  10.11.2  Participations

  	
   

  	
  76

  
	
  SECTION
  10.11.3  Confidentiality

  	
   

  	
  77

  
	
  SECTION
  10.12  Other Transactions

  	
   

  	
  78

  
	
  SECTION
  10.13  Amendment and Restatement

  	
   

  	
  78

  
	
  SECTION
  10.14  Forum Selection and Consent to
  Jurisdiction

  	
   

  	
  79

  
	
  SECTION
  10.15  Waiver of Jury Trial

  	
   

  	
  80

  
	
  SECTION
  10.16  USA Patriot Act Notice

  	
   

  	
  80

  

 

	
  SCHEDULE 1

  	
   

  	
  —

  	
   

  	
  Original Closing Date Stockholders

  
	
  SCHEDULE 2

  	
   

  	
  —

  	
   

  	
  Agreed EBITDA Formula

  
	
  SCHEDULE 6.3

  	
   

  	
  —

  	
   

  	
  Approvals

  
	
  SCHEDULE 6.8

  	
   

  	
  —

  	
   

  	
  Subsidiaries

  
	
  SCHEDULE 6.10

  	
   

  	
  —

  	
   

  	
  Tax Matters

  
	
  SCHEDULE 6.17

  	
   

  	
  —

  	
   

  	
  Existing Indebtedness

  
	
  SCHEDULE 6.18

  	
   

  	
  —

  	
   

  	
  Service Agreements; Employment Agreements

  
	
  SCHEDULE 6.21

  	
   

  	
  —

  	
   

  	
  Required Certificates

  
	
  SCHEDULE 7.1.4

  	
   

  	
  —

  	
   

  	
  Insurance

  
	
  SCHEDULE 7.2.3

  	
   

  	
  —

  	
   

  	
  Existing Liens

  
	
  SCHEDULE 7.2.5

  	
   

  	
  —

  	
   

  	
  Existing Investments

  
	
  SCHEDULE 7.2.8

  	
   

  	
  —

  	
   

  	
  Subsidiaries to be Dissolved

  
	
  SCHEDULE 10.1

  	
   

  	
  —

  	
   

  	
  Commitment Percentages

  
	
  SCHEDULE 10.2

  	
   

  	
  —

  	
   

  	
  Notice Information

  

 

	
  

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  Form of Note

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
  Form of Borrowing Request

  	
   

  	
   

  
	
  EXHIBIT C

  	
   

  	
  Form of Continuation/Conversion Notice

  	
   

  	
   

  
	
  EXHIBIT D

  	
   

  	
  Form of Lender Assignment Agreement

  	
   

  	
   

  
	
  EXHIBIT E

  	
   

  	
  Form of Guaranty

  	
   

  	
   

  
	
  EXHIBIT F-1

  	
   

  	
  Form of Borrower Pledge Agreement

  	
   

  	
   

  
	
  EXHIBIT F-2

  	
   

  	
  Form of Guarantor Pledge Agreement

  	
   

  	
   

  
	
  EXHIBIT G-1

  	
   

  	
  Form of Borrower Security Agreement

  	
   

  	
   

  
	
  EXHIBIT G-2

  	
   

  	
  Form of Guarantor Security Agreement

  	
   

  	
   

  
	
  EXHIBIT H

  	
   

  	
  Form of Opinion of Counsel to the Borrower

  	
   

  	
   

  
	
  EXHIBIT I

  	
   

  	
  Form of Reaffirmation of Collateral Documents

  	
   

  	
   

  
	
  EXHIBIT J

  	
   

  	
  Form of Adjusted Equity ownership EBITDA Certificate

  	
   

  	
   

  
	
  EXHIBIT K

  	
   

  	
  Permitted Asset Dispositions

  	
   

  	
   

  

 

 

SCHEDULE 1

Closing
Date Stockholders

 

See attached.

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Gene G. Abdallah

  	
   

  	
  50

  	
   

  
	
  Robert Agne

  	
   

  	
  100

  	
   

  
	
  Marie Allen

  	
   

  	
  14,000

  	
   

  
	
  Ronald G. Altman

  	
   

  	
  334

  	
   

  
	
  American Eye Institute,
  P.C.

  	
   

  	
  640,625

  	
   

  
	
  Lynne Jane Anderson

  	
   

  	
  188

  	
   

  
	
  Amy D. Anerson

  	
   

  	
  300

  	
   

  
	
  Rhonda F. Auld &
  Thomas W. Wright Tern Comm.

  	
   

  	
  180

  	
   

  
	
  Robert C Avery & N.
  Ann Avery JT Ten

  	
   

  	
  500

  	
   

  
	
  May Jeanne Baird

  	
   

  	
  180

  	
   

  
	
  Carla Ball

  	
   

  	
  100

  	
   

  
	
  Christopher Banman

  	
   

  	
  180

  	
   

  
	
  Shirley R. Bartelmay

  	
   

  	
  100

  	
   

  
	
  Terry Bartlett-Hard

  	
   

  	
  1,944

  	
   

  
	
  Elizabeth A. Beckman
  & Thomas A. Beckman

  	
   

  	
  1,000

  	
   

  
	
  Matthew Bednar

  	
   

  	
  200

  	
   

  
	
  Thomas Benninger TTEE
  Thomas Benninger & Mary BenningerRevocable Trust

  	
   

  	
  4,566

  	
   

  
	
  Alan M. Berry

  	
   

  	
  10,788

  	
   

  
	
  Kim Biggs

  	
   

  	
  100

  	
   

  
	
  Robert S. Brandt

  	
   

  	
  100

  	
   

  
	
  Wendy Breigenzer

  	
   

  	
  100

  	
   

  
	
  Tammy K. Bredner

  	
   

  	
  100

  	
   

  
	
  Carolyn L. Bridges

  	
   

  	
  100

  	
   

  
	
  James A. Brocato

  	
   

  	
  2,283

  	
   

  
	
  E. Britt Brockman

  	
   

  	
  22,831

  	
   

  
	
  Edward R. Brockman

  	
   

  	
  150

  	
   

  
	
  Jane Brogger

  	
   

  	
  500

  	
   

  
	
  David A. Bronner and
  Gila J. Brodner, as Joint Tenants with Right ofSurvivorship

  	
   

  	
  5,768

  	
   

  
	
  Elizabeth M. Brooks

  	
   

  	
  100

  	
   

  
	
  Edward Montgomery Brown
  & Catherine Bellis Brown Jtten

  	
   

  	
  9,293

  	
   

  
	
  Edward M. Brown

  	
   

  	
  5,707

  	
   

  
	
  Sue W. Brown

  	
   

  	
  267

  	
   

  
	
  Thomas Bruna

  	
   

  	
  134

  	
   

  
	
  Henry Bugajski &
  Elizabeth Bugajski

  	
   

  	
  1,000

  	
   

  
	
  Steven J. Buhler

  	
   

  	
  6,000

  	
   

  
	
  Bradley J. Bukant

  	
   

  	
  100

  	
   

  
	
  Michael J. Burns

  	
   

  	
  517

  	
   

  
	
  Angela R. Busch &
  Gerald A. Busch

  	
   

  	
  100

  	
   

  
	
  Diane Busman

  	
   

  	
  5,500

  	
   

  
	
  Squire H Butler &
  Sandra K. Butler

  	
   

  	
  100

  	
   

  
	
  Duncan J. Cameron

  	
   

  	
  1,000

  	
   

  
	
  Carmen F. Castellano

  	
   

  	
  20,000

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Carmen Castellano
  Cust., Eric Castellano

  	
   

  	
  20

  	
   

  
	
  Cataract Surgery Center
  of SI., Louis, Inc.

  	
   

  	
  73,167

  	
   

  
	
  Investors Services
  Trust Company as Cust. of Timothy B. Cavanaugh

  	
   

  	
  77,220

  	
   

  
	
  Timothy B. Cavanaugh

  	
   

  	
  88,549

  	
   

  
	
  Cavanaugh Investments,
  LLC

  	
   

  	
  15,519

  	
   

  
	
  CEDE & Co. (Fast
  Account)

  	
   

  	
  655,717

  	
   

  
	
  Barbara Cerwin

  	
   

  	
  334

  	
   

  
	
  Nicholus Cetta TR,
  Kenosha Pediatric Assoc. SC, Pension Plan

  	
   

  	
  500

  	
   

  
	
  CGJR II, L.P.

  	
   

  	
  38,404

  	
   

  
	
  CGJR Health Care
  Services Private Equities, L.P.

  	
   

  	
  117,992

  	
   

  
	
  CGJR MF III, L.P., CO
  Christopher Grant, Jr., 38 Burton

  	
   

  	
  21,814

  	
   

  
	
  Perry Chattler

  	
   

  	
  267

  	
   

  
	
  Scott A. Chavin

  	
   

  	
  100

  	
   

  
	
  Danny Clark & Linda
  Clark

  	
   

  	
  134

  	
   

  
	
  Clifton D. Cokington

  	
   

  	
  41,442

  	
   

  
	
  Clifton Cokington
  Trust, Clifton Cokington TTEE

  	
   

  	
  67,717

  	
   

  
	
  Stephen Colella &
  Laura Colella

  	
   

  	
  400

  	
   

  
	
  Adam C. Cooper

  	
   

  	
  1,142

  	
   

  
	
  Matilda Couri

  	
   

  	
  100

  	
   

  
	
  Peter J. Couri

  	
   

  	
  267

  	
   

  
	
  Louis J. Covelli &
  Julia Covelli

  	
   

  	
  1,000

  	
   

  
	
  Patricia M. Crow

  	
   

  	
  100

  	
   

  
	
  Jennifer J. Curry

  	
   

  	
  400

  	
   

  
	
  George T. Dancho &
  Mary Jane Dancho

  	
   

  	
  100

  	
   

  
	
  Richard E. Daves, Joan
  Davis/JT Ten

  	
   

  	
  100

  	
   

  
	
  Anita Davis

  	
   

  	
  100

  	
   

  
	
  Mark N. Day & Mary
  E. Day

  	
   

  	
  380

  	
   

  
	
  Vince Degiaino

  	
   

  	
  5,708

  	
   

  
	
  Carlos Delcristo

  	
   

  	
  5,708

  	
   

  
	
  Deanna L. Delong &
  Lawrence E. Delong

  	
   

  	
  100

  	
   

  
	
  David Dennis

  	
   

  	
  11,416

  	
   

  
	
  Eldi E. Deschamps
  Grantor Annuity

  	
   

  	
  518,687

  	
   

  
	
  Edli E. Deschamps
  Revocable Trust

  	
   

  	
  860,001

  	
   

  
	
  George N. Diemer &
  Joanne Diemer

  	
   

  	
  100

  	
   

  
	
  Alfred D. Dixon, Sarah
  Jane Dixon TR

  	
   

  	
  260

  	
   

  
	
  BLJ Capital Corp.

  	
   

  	
  77,919

  	
   

  
	
  Edward A. Doisy, III

  	
   

  	
  80,000

  	
   

  
	
  Mike Dorsey

  	
   

  	
  5,708

  	
   

  
	
  Brian P. Dougherty

  	
   

  	
  100

  	
   

  
	
  Maria C. Duca &
  Salvatore F. Duca

  	
   

  	
  62

  	
   

  
	
  Barbara M. Dupont

  	
   

  	
  100

  	
   

  
	
  Daniel S. Durrie

  	
   

  	
  255,971

  	
   

  
	
  Matthew J. Dwyer

  	
   

  	
  200

  	
   

  
	
  Ronald G. Eidell

  	
   

  	
  57,878

  	
   

  
	
  Roger D. Elissagaray

  	
   

  	
  5,000

  	
   

  
	
  Nancy L. Epperly

  	
   

  	
  100

  	
   

  
	
  Ery Partners LLC

  	
   

  	
  15,924

  	
   

  
	
  Kyla J. Ewbank

  	
   

  	
  300

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Ted D. Ewbank

  	
   

  	
  100

  	
   

  
	
  The Eye Center, Inc.

  	
   

  	
  6,833

  	
   

  
	
  Eyenet Research Inc.

  	
   

  	
  11,034

  	
   

  
	
  Sophia Ferro

  	
   

  	
  4,566

  	
   

  
	
  Thomas J Finn &
  Barbara A. Finn

  	
   

  	
  200

  	
   

  
	
  Betty Firebaugh &
  James Firebaugh/JT Ten

  	
   

  	
  100

  	
   

  
	
  James Fletcher

  	
   

  	
  100

  	
   

  
	
  Shannon C Foley-Strange

  	
   

  	
  100

  	
   

  
	
  Charles Formo-SO

  	
   

  	
  100

  	
   

  
	
  Joyce M. Forst, Duane E
  Forst

  	
   

  	
  500

  	
   

  
	
  Robert D. Forst

  	
   

  	
  1,000

  	
   

  
	
  Stuart Frank &
  Michelle Frank

  	
   

  	
  100

  	
   

  
	
  Roy Fray & Joan
  Fray

  	
   

  	
  2,034

  	
   

  
	
  Walter I. Fried and
  Gail S. Fried

  	
   

  	
  623,316

  	
   

  
	
  Harry Geller

  	
   

  	
  100

  	
   

  
	
  Melvyn A. Gerstein

  	
   

  	
  172,000

  	
   

  
	
  Amy Gerstein Cust
  Benjamin Gerstein

  	
   

  	
  1,000

  	
   

  
	
  Craig Gerstein

  	
   

  	
  100

  	
   

  
	
  Dolores J. Gerstein
  Cust Benjamin M. Gerstein

  	
   

  	
  200

  	
   

  
	
  Melvyn A Gerstein Cust
  Sarah R. Dimbert

  	
   

  	
  200

  	
   

  
	
  Melvin A. Gerstein Cust
  Hannah G. Dimbert

  	
   

  	
  288

  	
   

  
	
  William P. Gianakos
  & Electra Giananos

  	
   

  	
  500

  	
   

  
	
  Tanya D. Gibbs

  	
   

  	
  10,000

  	
   

  
	
  Gideon Loving Trust
  DID7-28-98(?)

  	
   

  	
  3,500

  	
   

  
	
  John E. Girard &
  Diane M. Girard

  	
   

  	
  100

  	
   

  
	
  Godfrey Family Limited
  Partnership

  	
   

  	
  88,062

  	
   

  
	
  William A. Godfrey

  	
   

  	
  1,157

  	
   

  
	
  Robert C. Goetiling

  	
   

  	
  38,283

  	
   

  
	
  Robert C. Goetiling
  Family Limited Partnership

  	
   

  	
  32,000

  	
   

  
	
  Sheree L. Goldberg

  	
   

  	
  280

  	
   

  
	
  Martha Gordan

  	
   

  	
  100

  	
   

  
	
  Stuart Gordon

  	
   

  	
  5,708

  	
   

  
	
  Carl J. Grabonski &
  Marianne Y. Grabonski

  	
   

  	
  100

  	
   

  
	
  D. Lynn Grant

  	
   

  	
  100

  	
   

  
	
  Michelle Marie Gromish

  	
   

  	
  100

  	
   

  
	
  Wende Guastamachio

  	
   

  	
  5,000

  	
   

  
	
  John A. Gunther &
  Jeannette Gunther

  	
   

  	
  134

  	
   

  
	
  Arlo E. Hanson

  	
   

  	
  2,000

  	
   

  
	
  Joanna Wilson Hanson
  & James L. Hanson

  	
   

  	
  250

  	
   

  
	
  William W. Hardy,
  Beverly A. Hardy/JT Ten

  	
   

  	
  100

  	
   

  
	
  Frank Harris

  	
   

  	
  5,708

  	
   

  
	
  Linda Haughee &
  Frank Haughee

  	
   

  	
  250

  	
   

  
	
  Ivan Held & Myrtle
  Held

  	
   

  	
  100

  	
   

  
	
  Kurt J. Hetzel &
  Kelly L. Hetzel

  	
   

  	
  100

  	
   

  
	
  Jennifer Hilmes

  	
   

  	
  100

  	
   

  
	
  Hobson-Tasman Eye Group
  LLC

  	
   

  	
  7,995

  	
   

  
	
  Phillip C. Hoopes

  	
   

  	
  422,143

  	
   

  
	
  Cathleen S. Hopp &
  Michael L. Hopp

  	
   

  	
  100

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Robert E. Hord Jr

  	
   

  	
  2,000

  	
   

  
	
  Blake Horid, M.D.

  	
   

  	
  31,039

  	
   

  
	
  Dawn Hugelier

  	
   

  	
  1,222

  	
   

  
	
  John D. Wrinkeler

  	
   

  	
  11,426

  	
   

  
	
  John D. Hunkeler
  Revocable Trust

  	
   

  	
  761,686

  	
   

  
	
  Illinois Eye
  Specialist, Ltd.

  	
   

  	
  28,323

  	
   

  
	
  Robert Ellwood Initial
  Tr

  	
   

  	
  100

  	
   

  
	
  Joey Jacobs

  	
   

  	
  1,000

  	
   

  
	
  Jennifer Jarret

  	
   

  	
  1,142

  	
   

  
	
  Adaline B Jessup

  	
   

  	
  1,000

  	
   

  
	
  R. Judd Jessup

  	
   

  	
  100,000

  	
   

  
	
  R. Judd Jessup and
  Charlene Lynne Jessup, as trustees for the R. Judd Jessup and Charlene Lynne
  Jessup

  	
   

  	
  91,324

  	
   

  
	
  Jean A Jones

  	
   

  	
  100

  	
   

  
	
  Paul M. Karpecki

  	
   

  	
  2,500

  	
   

  
	
  Katten Muchin &
  Zavis

  	
   

  	
  23,962

  	
   

  
	
  Melvin L. Katten

  	
   

  	
  5,000

  	
   

  
	
  Richard Keller &
  Ann Keller

  	
   

  	
  300

  	
   

  
	
  William J.L. Kennedy

  	
   

  	
  106,000

  	
   

  
	
  Jemshed A. Khan

  	
   

  	
  106,736

  	
   

  
	
  Jemshed A. Kran and
  Michelle Hart-Khan, as joint tenant with right ofsurvivorship

  	
   

  	
  34,864

  	
   

  
	
  Bruce Kidder &
  Estelle Kider

  	
   

  	
  200

  	
   

  
	
  Kirk Family Limited
  Partnership

  	
   

  	
  2,338,977

  	
   

  
	
  Kent A. Kirk

  	
   

  	
  154,247

  	
   

  
	
  Scott H. Kirk

  	
   

  	
  154,247

  	
   

  
	
  Nocole T. Kniceley

  	
   

  	
  100

  	
   

  
	
  Deborah L Kocha

  	
   

  	
  100

  	
   

  
	
  Martin A Koehler

  	
   

  	
  2,000

  	
   

  
	
  Leo N. Kraiko &
  Linda Kraiko Jten

  	
   

  	
  267

  	
   

  
	
  Thomas E. Kromraj &
  Dawn M. Kromraj

  	
   

  	
  238

  	
   

  
	
  Larry Lavine

  	
   

  	
  11,416

  	
   

  
	
  John W. Lawrence, Jr.

  	
   

  	
  63,000

  	
   

  
	
  Stephen R. Lawrence

  	
   

  	
  5,788

  	
   

  
	
  Jeff M. Lawrence

  	
   

  	
  100

  	
   

  
	
  Joanne M. Lawrence

  	
   

  	
  500

  	
   

  
	
  John M. Lawrence

  	
   

  	
  1,500

  	
   

  
	
  Howard S. Lazarus, M.D.

  	
   

  	
  17,123

  	
   

  
	
  Mindy Lazor & Aaron
  Lazor

  	
   

  	
  200

  	
   

  
	
  Reina Lerner

  	
   

  	
  100

  	
   

  
	
  Carolyn S. Kari
  Lindquist

  	
   

  	
  100

  	
   

  
	
  Steven H. Linn

  	
   

  	
  200

  	
   

  
	
  William G. Linn

  	
   

  	
  100

  	
   

  
	
  Grant Little

  	
   

  	
  5,708

  	
   

  
	
  Kennell Lowden &
  Kathleen A. Lowden

  	
   

  	
  100

  	
   

  
	
  Ted Lundbert

  	
   

  	
  1,142

  	
   

  
	
  Michael Lutz Family
  Limited

  	
   

  	
  32,000

  	
   

  
	
  Michael J. Lutz

  	
   

  	
  13,142

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  R. Rector and
  Associates Inc.

  	
   

  	
  34,246

  	
   

  
	
  Theodore R. Maichel
  & Linda K. Maichel

  	
   

  	
  500

  	
   

  
	
  Joseph H. Mallon

  	
   

  	
  280

  	
   

  
	
  Ethel S. Mumcuso

  	
   

  	
  100

  	
   

  
	
  Henry J. Mancuso Jr.

  	
   

  	
  100

  	
   

  
	
  Mandato Family Trust

  	
   

  	
  39,211

  	
   

  
	
  Anne S. Manietta

  	
   

  	
  100

  	
   

  
	
  Susan J. Marquart &
  John R. Marquart

  	
   

  	
  100

  	
   

  
	
  Debra Matlock

  	
   

  	
  100

  	
   

  
	
  David M. McCarty and
  Catherine M. McCarty, as joint tenants with rightof survivorship

  	
   

  	
  5,708

  	
   

  
	
  Stephen M. McConnell

  	
   

  	
  4,566

  	
   

  
	
  Marti McElroy

  	
   

  	
  40,000

  	
   

  
	
  Kathleen M. McGohan

  	
   

  	
  100

  	
   

  
	
  Scott J. McKnight, M.D.

  	
   

  	
  264,506

  	
   

  
	
  W P Mc Mullan III

  	
   

  	
  5,288

  	
   

  
	
  Bernadette McNicholas

  	
   

  	
  200

  	
   

  
	
  Micheal D. Hertz

  	
   

  	
  267

  	
   

  
	
  Patti L. Miller &
  Kendall Miller

  	
   

  	
  434

  	
   

  
	
  Debby K. Milliken

  	
   

  	
  480

  	
   

  
	
  Kathleen M. Miner

  	
   

  	
  5,707

  	
   

  
	
  John Cole Montgomery
  Cust Morgan Montgomery

  	
   

  	
  200

  	
   

  
	
  Larry Mooney

  	
   

  	
  100

  	
   

  
	
  Jay G. Moore &
  Avajo Moore

  	
   

  	
  100

  	
   

  
	
  Terrence E. Morris

  	
   

  	
  700

  	
   

  
	
  Elizabeth Ann
  Motykowski & Richard John Motykowski

  	
   

  	
  5875

  	
   

  
	
  Lisa Marie Moyer

  	
   

  	
  100

  	
   

  
	
  Andrew L Moyes &
  Cathryn A. Moyes

  	
   

  	
  1,000

  	
   

  
	
  Andrew L. Moyes, M.D.

  	
   

  	
  92,224

  	
   

  
	
  Frieda V. Mijir
  Residuary Trust

  	
   

  	
  3,428

  	
   

  
	
  Hulligan’s Unlimited

  	
   

  	
  500

  	
   

  
	
  Jeanne Napolitano

  	
   

  	
  9,133

  	
   

  
	
  Steven V. Napolitano

  	
   

  	
  68,000

  	
   

  
	
  Lisa Napolitano

  	
   

  	
  667

  	
   

  
	
  Charles & Nesbitt
  & Charleen C. Nesbitt & Kathryn Nesbitt

  	
   

  	
  100

  	
   

  
	
  Anne Nicoli

  	
   

  	
  100

  	
   

  
	
  Linda Nilles

  	
   

  	
  608

  	
   

  
	
  Louise L Nilles

  	
   

  	
  120

  	
   

  
	
  Northshore Eye
  Surgicenter, Ltd.

  	
   

  	
  401,070

  	
   

  
	
  Diane Koskin

  	
   

  	
  1,500

  	
   

  
	
  Nova Capital Partners
  LLC

  	
   

  	
  283

  	
   

  
	
  Connie M. Huhn

  	
   

  	
  100

  	
   

  
	
  Richard C. Bedell OO

  	
   

  	
  1,000

  	
   

  
	
  Terry L. Ohringer

  	
   

  	
  100

  	
   

  
	
  Kevin O’Keefe &
  Tina O’Keefe

  	
   

  	
  200

  	
   

  
	
  Russell N. Pallesen

  	
   

  	
  8,000

  	
   

  
	
  Suzanne Passalaqua

  	
   

  	
  2,283

  	
   

  
	
  Vincent P. Paylatos

  	
   

  	
  898

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Mona L. Penner and Alan
  M. Berry, as Trustee of the GMP Gift Trust forTodd U A D 1 38 84

  	
   

  	
  2,284

  	
   

  
	
  Renee Peters Cust
  Michael J. Peters

  	
   

  	
  200

  	
   

  
	
  DRU Phelps

  	
   

  	
  3,000

  	
   

  
	
  Philip Baier, Inc.

  	
   

  	
  14,000

  	
   

  
	
  Jacqueline M. Pinkowski
  & Shelly A Pinkowski

  	
   

  	
  200

  	
   

  
	
  Sandra L. Pinkowski

  	
   

  	
  100

  	
   

  
	
  Natalie A. Pinski &
  Leonard J. Pinski

  	
   

  	
  380

  	
   

  
	
  Gerald J. Plappert, Jr.

  	
   

  	
  5,000

  	
   

  
	
  Annette Pombo

  	
   

  	
  100

  	
   

  
	
  Pomerance Eye Center PC

  	
   

  	
  49,485

  	
   

  
	
  Gregory J. Purcell

  	
   

  	
  2,166

  	
   

  
	
  Rod Rallo, O.D.

  	
   

  	
  65,868

  	
   

  
	
  Georgina Ramirez

  	
   

  	
  208

  	
   

  
	
  Cheryl Rector

  	
   

  	
  108

  	
   

  
	
  Leland Rector Jr.

  	
   

  	
  100

  	
   

  
	
  Rosario Reyilla

  	
   

  	
  100

  	
   

  
	
  Irene Rich

  	
   

  	
  100

  	
   

  
	
  Jane Ann Rickman

  	
   

  	
  100

  	
   

  
	
  T. Trent Roark

  	
   

  	
  1

  	
   

  
	
  Patricia R. Rojahn

  	
   

  	
  100

  	
   

  
	
  David A. Rowell, Janis
  P. Rowell/ JT Ten

  	
   

  	
  100

  	
   

  
	
  Gustaf Rowell

  	
   

  	
  100

  	
   

  
	
  Elizabeth R. Ryan

  	
   

  	
  100

  	
   

  
	
  Robert A. Rymer Trust
  Robert Rymer

  	
   

  	
  910

  	
   

  
	
  Robert A. Rymer

  	
   

  	
  52,406

  	
   

  
	
  Robert A. Rymer Trust

  	
   

  	
  36,476

  	
   

  
	
  George J. Saunders

  	
   

  	
  100

  	
   

  
	
  Kathleen N. Scarpulla

  	
   

  	
  218,083

  	
   

  
	
  Kathleen M. Scarpulla
  and Richard Scarpulla, as joint tenants with right ofsurvivorship

  	
   

  	
  150,000

  	
   

  
	
  Ledna Schimmel

  	
   

  	
  280

  	
   

  
	
  Eric Schmidt &
  Traley Schmidt

  	
   

  	
  208

  	
   

  
	
  John M. Schmitt

  	
   

  	
  5,708

  	
   

  
	
  John M. Schmitt and
  Lisa E. Schmitt, as joint tenants with right ofsurvivorship

  	
   

  	
  4,292

  	
   

  
	
  Susan Schnable

  	
   

  	
  5,708

  	
   

  
	
  Paul A. Schnoor &
  Barbara J. Schnoor

  	
   

  	
  200

  	
   

  
	
  K. Thomas Schreur &
  Allison D. Nelson Jtten

  	
   

  	
  4,566

  	
   

  
	
  Steven T. Schaartz
  & Elisabeth J. Schaartz

  	
   

  	
  1,000

  	
   

  
	
  Ed Self & Thelma
  Self

  	
   

  	
  100

  	
   

  
	
  Vincent A.F. Sergi

  	
   

  	
  16,416

  	
   

  
	
  Fred Sexauer

  	
   

  	
  934

  	
   

  
	
  Stuart K. Shapira

  	
   

  	
  100

  	
   

  
	
  George P. Shelley &
  Joyce M. Shelley

  	
   

  	
  2,000

  	
   

  
	
  Sierra Ventures V.L.P.

  	
   

  	
  1566,722

  	
   

  
	
  Barry S. Silver

  	
   

  	
  208

  	
   

  
	
  Steven M. Silverstein
  Revocable Trust

  	
   

  	
  106,338

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Mark A. Sirgo

  	
   

  	
  1,334

  	
   

  
	
  Jeffrey D. Smith

  	
   

  	
  100

  	
   

  
	
  Jeffrey E. Smith &
  Marsha E. Smith

  	
   

  	
  1,000

  	
   

  
	
  Angela Sholinski

  	
   

  	
  150

  	
   

  
	
  Michael G. Spencer

  	
   

  	
  1,000

  	
   

  
	
  Robert Y. Spelling

  	
   

  	
  5,700

  	
   

  
	
  Jeff Staples

  	
   

  	
  5,700

  	
   

  
	
  Steve Statz

  	
   

  	
  5,708

  	
   

  
	
  Patricia M. Stavrakes

  	
   

  	
  100

  	
   

  
	
  Joan Stempel

  	
   

  	
  100

  	
   

  
	
  Demetre Stergiou &
  Konstantima Stergiou

  	
   

  	
  508

  	
   

  
	
  Michael C. Stiles

  	
   

  	
  156,655

  	
   

  
	
  Michael C. Stiles and
  Michella M. Stiles, as joint tenants with right ofsurvivorship

  	
   

  	
  3,285

  	
   

  
	
  Nancy M. Stimac &
  Jo Mae Fasone White

  	
   

  	
  100

  	
   

  
	
  Richard H. Stone &
  Paisy A. Stone

  	
   

  	
  10

  	
   

  
	
  Bernard S. Storck TR

  	
   

  	
  580

  	
   

  
	
  Steve Strandberg and
  Diana Strandberg, as joint tenants with right ofsurvivorship

  	
   

  	
  2,284

  	
   

  
	
  Andrea Noel Sugnet

  	
   

  	
  100

  	
   

  
	
  Eric Swanson

  	
   

  	
  5,708

  	
   

  
	
  Alex G. Tainsh &
  Stacy A. Tainsh

  	
   

  	
  200

  	
   

  
	
  James Tenanbaum, Dana
  Shom, Feld TTEES Tenanbaum Family Trust

  	
   

  	
  62,508

  	
   

  
	
  James R. Tananbaum

  	
   

  	
  37,500

  	
   

  
	
  Brankon Christopher
  Taylor

  	
   

  	
  100

  	
   

  
	
  Jack W. Taylor &
  Cheryl Taylor

  	
   

  	
  180

  	
   

  
	
  Jasper Terwee

  	
   

  	
  100

  	
   

  
	
  Thomas Family Limited
  Partnership

  	
   

  	
  53,132

  	
   

  
	
  Jon C. Thomas

  	
   

  	
  10,000

  	
   

  
	
  Chris Tobin

  	
   

  	
  158

  	
   

  
	
  Gianni Toffanello

  	
   

  	
  134

  	
   

  
	
  George Tune & Ila
  Mae Tune

  	
   

  	
  100

  	
   

  
	
  Leo S. Ubik

  	
   

  	
  134

  	
   

  
	
  Raymond Utter Jr. &
  Christine E. Utter

  	
   

  	
  100

  	
   

  
	
  Clyde L. Valeri TTEE

  	
   

  	
  4,000

  	
   

  
	
  Carol R. Van Cleef and
  Douglas A. Thompson, as joint tenants with rightof survivorship

  	
   

  	
  2,284

  	
   

  
	
  Susan Varner

  	
   

  	
  100

  	
   

  
	
  Carmen Vazquez

  	
   

  	
  100

  	
   

  
	
  Janis Vazquez

  	
   

  	
  100

  	
   

  
	
  Magdalena Vazquez

  	
   

  	
  1,000

  	
   

  
	
  E. Michele Vickery

  	
   

  	
  73,954

  	
   

  
	
  David L. Vied

  	
   

  	
  100

  	
   

  
	
  H. Eugene Viehweg Tr

  	
   

  	
  800

  	
   

  
	
  Vile Family Limited
  Partnership

  	
   

  	
  77,354

  	
   

  
	
  Stephen Vile Limited
  Partnership

  	
   

  	
  321,430

  	
   

  
	
  George Volakis

  	
   

  	
  480

  	
   

  
	
  Stephen C. Volk, M.D.

  	
   

  	
  899,653

  	
   

  

 

AMERICAN STOCK TRANSFER &
TRUST COMPANY

7/26/2000

LIST OF SHAREHOLDERS

AS OF JULY 26, 2000

NOVAMED EYECARE INC.

 

	
  Name

  	
   

  	
   

  	
   

  	
  Share Amount

  	
   

  
	
  Daniel O. Wagster

  	
   

  	
  14,508

  	
   

  
	
  Daniel O. Wagster and
  Sarah J. Wagster, as Trustees of the Wagster Family Trust

  	
   

  	
  10,798

  	
   

  
	
  Suzanne E. Wagster

  	
   

  	
  12,500

  	
   

  
	
  Richard W. Waller

  	
   

  	
  1,713

  	
   

  
	
  Herbert S. Wander

  	
   

  	
  4,566

  	
   

  
	
  Daniel R. Ward

  	
   

  	
  209

  	
   

  
	
  Bob Watson LP

  	
   

  	
  80,000

  	
   

  
	
  Paul D. Wedge Jr. TR
  Haskins Charitable Load Unitrust 1

  	
   

  	
  10,000

  	
   

  
	
  Paul D. Wedge Jr. TR
  Haskins Charitable Load Unitrust 1

  	
   

  	
  10,000

  	
   

  
	
  Kurt Wegener

  	
   

  	
  100

  	
   

  
	
  Adeline Weilert

  	
   

  	
  124

  	
   

  
	
  Daniel Weinberg, OD

  	
   

  	
  3,625

  	
   

  
	
  Robert K. Weir

  	
   

  	
  103,379

  	
   

  
	
  Peter C. Wendell

  	
   

  	
  53,344

  	
   

  
	
  Christopher G. Werfel

  	
   

  	
  19,936

  	
   

  
	
  Patricia A. Werkowitch

  	
   

  	
  100

  	
   

  
	
  David R. West

  	
   

  	
  1,334

  	
   

  
	
  Frances M. Wilcoxson

  	
   

  	
  100

  	
   

  
	
  Vic Wildenradt

  	
   

  	
  134

  	
   

  
	
  Stephen B. Wiles, M.D.

  	
   

  	
  180,656

  	
   

  
	
  Douglas P. Williams

  	
   

  	
  68,000

  	
   

  
	
  Douglas Williams Family
  Partnership

  	
   

  	
  1679,488

  	
   

  
	
  James R. Williams

  	
   

  	
  250

  	
   

  
	
  Richard R. Williams
  & Mary Beth Williams

  	
   

  	
  200

  	
   

  
	
  Steven Wilson and
  Debbie Wilson, as joint tenants with right ofsurvivorship

  	
   

  	
  1,142

  	
   

  
	
  Winjum Family Limited
  Partnership

  	
   

  	
  32,000

  	
   

  
	
  Gregory Winjum

  	
   

  	
  33,699

  	
   

  
	
  John P. Winjum

  	
   

  	
  79,066

  	
   

  
	
  John P. Winjum Delia
  Trust

  	
   

  	
  200,000

  	
   

  
	
  Joseph Winjum

  	
   

  	
  20,675

  	
   

  
	
  Ken A. Winjum

  	
   

  	
  200

  	
   

  
	
  Lois Winjum

  	
   

  	
  189,500

  	
   

  
	
  Stephen J. Winjum

  	
   

  	
  848,100

  	
   

  
	
  Joe Wirtz

  	
   

  	
  134

  	
   

  
	
  Susan Witzke &
  Robert Witzke

  	
   

  	
  300

  	
   

  
	
  Robert Wojcik

  	
   

  	
  2,000

  	
   

  
	
  Larry Wolff

  	
   

  	
  334

  	
   

  
	
  Wolin Family Limited
  Partnership

  	
   

  	
  65,000

  	
   

  
	
  Lawrence B. Wolin
  Limited Partnership

  	
   

  	
  414,446

  	
   

  
	
  Billy Wood &
  Beverly J. Wood

  	
   

  	
  400

  	
   

  
	
  James Vaniz

  	
   

  	
  375

  	
   

  
	
  Fredric S. Yanow &
  Barbara Yanow

  	
   

  	
  100

  	
   

  
	
  Richard Yanow &
  Deborah Yanow

  	
   

  	
  200

  	
   

  
	
  Katten Muchin Zavis

  	
   

  	
  10,000

  	
   

  
	
  Michael WM Zavi TR U/A
  4/17/77

  	
   

  	
  5,798

  	
   

  
	
  Kathleen E. Zver &
  Joseph G. Zver

  	
   

  	
  300

  	
   

  
	
  Steven M. Silverstein Revocable Trust

  	
   

  	
  3,151

  	
   

  

 

 

 

	
  TOTAL NUMBER OF SHARES SELECTED:

  	
   

  	
  24,514,798.000

  
	
   

  	
   

  	
   

  
	
  TOTAL NUMBER OF
  ACCOUNTS SELECTED:

  	
   

  	
  369

  

SCHEDULE
2

AGREED
EBITDA FORMULA

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

“Combined Adjusted EBITDA” shall mean for
any applicable computation period, (A) EBITDA (as defined in the Agreement
before giving effect to any computations pursuant to this Schedule 2), plus
(B) Acquired EBITDA for each ASC Facility, less (C) Disposed EBITDA for
each ASC Facility.

“Acquired EBITDA” shall mean with respect
to each ASC Facility acquired pursuant to a Permitted Acquisition, the
twelve-month pro forma EBITDA of such ASC Facility, broken down in increments
of monthly pro forma EBITDA over such twelve-month period (“Monthly Pro Forma
EBITDA”), as agreed upon by Borrower and Agent; provided, however,
that to the extent Borrower’s EBITDA (as defined in the Agreement before giving
effect to any computations pursuant to this Schedule 2) for any applicable
computation period includes actual results from such ASC Facility, the Acquired
EBITDA of such ASC Facility shall be reduced by the Monthly Pro Forma EBITDA
for the number of months for which such actual results are included in Borrower’s
EBITDA.  As an example only, after three
months following a Permitted Acquisition, an ASC Facility has produced three
months of actual results that are included in Borrower’s EBITDA.  These three months of actual monthly EBITDA
replace the Monthly Pro Forma EBITDA that comprised the first three months of
the twelve-month pro forma amount that was agreed upon by Borrower and Agent as
Acquired EBITDA, and would result in “Acquired EBITDA” being equal to the sum
of Monthly Pro Forma EBITDA amounts for each of the nine remaining months.

“Disposed EBITDA” shall mean with respect
to each ASC Facility that is the subject of a Permitted Equity Ownership Sale,
the amount of EBITDA contributed to Borrower by such ASC Facility during the
most recently available twelve-month period preceding the effective date of
such sale that will no longer be available to Borrower as a result of such
sale, as measured on a pro forma basis, broken down in increments of Monthly
Pro Forma EBITDA over such twelve-month period, as agreed upon by Borrower and
Agent; provided, however, that to the extent Borrower’s EBITDA
(as defined in the Agreement before giving effect to any computations pursuant
to this Schedule 2) for any applicable computation period includes the ASC
Facility’s actual results for a period following the closing of the Permitted
Equity Ownership Sale, the Disposed EBITDA of such ASC Facility shall be
adjusted by the Monthly Pro Forma EBITDA for the number of months for which
such actual results are included in Borrower’s EBITDA.

Upon
an ASC Facility contributing actual results that are reflected in Borrower’s
EBITDA (as defined in the Agreement before giving effect to any computations
pursuant to this Schedule 2) for a twelve-month period following either a Permitted
Acquisition or Permitted Equity Ownership Sale, as applicable, then this
Schedule 2 shall no longer apply to such ASC Facility.

 

	
  AGREED AND ACCEPTED

  
	
   

  
	
  THIS           
  day of           ,      :

  
	
   

  
	
  NATIONAL CITY BANK,

  
	
   

  
	
  as Agent

  
	
   

  
	
  By: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

SCHEDULE 6.3

Approvals

None.

SCHEDULE 6.8

Subsidiaries

Wholly Owned Subsidiaries

	
  1.

  	
   

  	
  NovaMed Management Services, LLC, a Delaware limited
  liability company

  
	
  2.

  	
   

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

  
	
  3.

  	
   

  	
  Blue Ridge NovaMed, Inc., a Missouri corporation

  
	
  4.

  	
   

  	
  NovaMed of Louisville, Inc., a Kentucky corporation

  
	
  5.

  	
   

  	
  Midwest Uncuts, Inc., an Iowa corporation

  
	
  6.

  	
   

  	
  NovaMed Eyecare Research, Inc., a Delaware
  corporation

  
	
  7.

  	
   

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

  
	
  8.

  	
   

  	
  NMGK, Inc., an Illinois corporation

  
	
  9.

  	
   

  	
  NMLO, Inc., a Kansas corporation

  
	
  10.

  	
   

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

  
	
  11.

  	
   

  	
  Patient Education Concepts, Inc., a Delaware
  corporation

  
	
  12.

  	
   

  	
  NMI, Inc., a Georgia corporation

  
	
  13.

  	
   

  	
  NovaMed Acquisition Company, Inc., a Delaware
  corporation

  
	
  14.

  	
   

  	
  NovaMed of Texas, Inc., a Delaware corporation

  
	
  15.

  	
   

  	
  NovaMed Alliance, Inc., a Delaware corporation

  
	
  16.

  	
   

  	
  NovaMed of Wisconsin, Inc., a Delaware corporation

  
	
  17.

  	
   

  	
  NovaMed of Dallas, Inc., a Delaware corporation

  
	
  18.

  	
   

  	
  NovaMed of San Antonio, Inc., a Delaware corporation

  
	
  19.

  	
   

  	
  NovaMed of Laredo, Inc., a Delaware corporation

  
	
  Wholly Owned Subsidiaries that are ASC
  Subsidiaries

  
	
  20.

  	
   

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

  
	
  21.

  	
   

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

  
	
  Non-Wholly Owned Subsidiaries that are ASC
  Subsidiaries

  
	
  22.

  	
   

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

  
	
  23.

  	
   

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

  
	
  24.

  	
   

  	
  NovaMed Surgery Center of Thibodaux, LLC, a Delaware
  limited liability company

  
	
  25.

  	
   

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

  
	
  26.

  	
   

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

  
	
  27.

  	
   

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

  
	
  28.

  	
   

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

  
	
  29.

  	
   

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

  
	
  30.

  	
   

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

  
	
  31.

  	
   

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

  
	
  32.

  	
   

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

  
	
  33.

  	
   

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

  

 

 

	
  34.

  	
   

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

  
	
  35.

  	
   

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

  
	
  36.

  	
   

  	
  NovaMed Surgery Center of Altamonte Springs, LLC, a
  Delaware limited liability company

  
	
  37.

  	
   

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

  
	
  38.

  	
   

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

  
	
  39.

  	
   

  	
  NovaMed Surgery Center of Columbus, LLC, a Delaware
  limited liability company

  
	
  40.

  	
   

  	
  NovaMed Surgery Center of Fort Lauderdale, LLC, a
  Delaware limited liability company

  
	
  41.

  	
   

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

  
	
  42.

  	
   

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

  
	
  43.

  	
   

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

  
	
  44.

  	
   

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

  
	
  45.

  	
   

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

  
	
  46.

  	
   

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

  
	
  47.

  	
   

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

  
	
  48.

  	
   

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

  
	
  49.

  	
   

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

  
	
  50.

  	
   

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

  
	
  51.

  	
   

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

  
	
  52.

  	
   

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

  
	
  53.

  	
   

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

  
	
  54.

  	
   

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

  
	
  55.

  	
   

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

  
	
  56.

  	
   

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

  
	
  ASC Minority Entity:

  
	
  57.

  	
  NovaMed Surgery Center of Fort Lauderdale, LLC, a
  Delaware limited liability company

  

 

SCHEDULE 6.10

Tax Matters

 

None.

SCHEDULE 6.17

Existing Indebtedness

As of December 31, 2006

(in 000s)

	
  

  	
   

  	
   

  	
   

  
	
  Credit Agreement
  Borrowings

  	
   

  	
  $

  	
  57,700

  	
   

  
	
  Notes Payable

  	
   

  	
  4,348

  	
   

  
	
  Capital Leases

  	
   

  	
  718

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total
  Indebtedness

  	
   

  	
  62,766

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Letters of
  Credit:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Luxottica

  	
   

  	
  220

  	
   

  
	
  Marchon

  	
   

  	
  130

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Sub-Total - Letters of Credit

  	
   

  	
  350

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total Indebtedness and
  Letters of Credit

  	
   

  	
  $

  	
  63,116

  	
   

  

 

SCHEDULE 6.18

Service Agreements; Employment Agreements

 

[Schedule reference removed from Section 6.18
of the Credit Agreement]

SCHEDULE 6.21

Required Certificates

 

None.

SCHEDULE 7.1.4

Insurance

 

See attached.

NovaMed, Inc.

Schedule of Policies

Exhibit 7.1.4

	
  Policy Type

  	
   

  	
  Insured Entities

  	
   

  	
  Company

  	
   

  	
  Policy Number

  	
   

  	
  Eff. Date

  	
   

  	
  Exp. Date

  	
   

  	
  Limits

  	
   

  	
  Insurance

  Contact

  
	
  Prof/Gen Liab.

  	
   

  	
  PL/GL on 34 ASCs

  GL only on Overland Park

  Vicarious on Madison & Altamonte Springs

  GL on Corp Offices, Laser Service Ctrs, Product Sales, Family Vision Care,
  and SE Eye Surgery

  	
   

  	
  Darwin Select Insurance Company

  	
   

  	
  0303-2472

  	
   

  	
  05/01/06

  	
   

  	
  05/01/07

  	
   

  	
  $1mil/$3mil on all except; $500K/$1.5mil on Florida
  Locations, $500K/$1mil on Tyler, TX Location, $250K/$750K on Indiana
  Locations

  	
   

  	
  Brokered by Inlight Risk Management, LLC

  Mr. Mike Spaan - Agent

  1120 NW 63rd St., Ste 350 

  Oklahoma City, OK 73116

  (405)-286-4716

  
	
  Prof Liability

  	
   

  	
  Overland Park ASC

  	
   

  	
  Medical Assurance

  	
   

  	
  HP 1066

  	
   

  	
  05/21/06

  	
   

  	
  05/21/07

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Inlight

  
	
  Property/Auto Package

  	
   

  	
  52 Locations - Property Coverage 24 Power Units / 1
  Trailer

  	
   

  	
  Atlantic Specialty Insurance Co.

  	
   

  	
  718 00 95 35

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  $2,062,317 Blanket Building Cov. $37,420,381 Blanket
  Bus Pers Prop $1,925,000 BPP on FL and LA Loc $33,113,873 Blanket BI/EE
  $5,145,767 BI/EE on FL & LA Loc $1mil CSL Auto Liability

  	
   

  	
  Inlight

  
	
  Flood Coverage for locations excluded by Atlantic
  Specialty

  	
   

  	
  2 Locations - Flood Coverage

  Fremont, NE and Lake Worth, FL

  	
   

  	
  Hartford Ins. Co.

  	
   

  	
  87029446862007 (Lake Worth) 87029446762007 (Fremont)

  	
   

  	
  2/3/2007 (FL)2/11/07 (NE)

  	
   

  	
  2/3/2008 (FL)2/11/08 (NE)

  	
   

  	
  $500,000 per location

  	
   

  	
  Inlight

  
	
  Earthquake

  	
   

  	
  Whittier, CA and Jonesboro, AR ASC

  	
   

  	
  Essex Ins. Co.

  	
   

  	
  ESX356853

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  $2,300,000 (Whittier) $3,100,000 (Jonesboro)

  	
   

  	
  Inlight

  
	
  Employment Practices Liab

  	
   

  	
  All NovaMed Entities

  	
   

  	
  St. Paul Mercury

  	
   

  	
  594CM1294

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  $2,000,000

  	
   

  	
  Inlight

  
	
  Fiduciary Liab.

  	
   

  	
  All NovaMed Entities

  	
   

  	
  St. Paul Mercury

  	
   

  	
  1594CM1295

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  $3,000,000 ea Claim $3,000,000 Aggregate

  	
   

  	
  Inlight

  
	
  Crime Cov.

  	
   

  	
  All NovaMed Entities

  	
   

  	
  St. Paul Mercury Insurance Co.

  	
   

  	
  494CF0482

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  $1,000,000 Empl Theft / Forgery $1,000,000 Premises /
  Transit $1,000,000 Computer Crime/Virus $1,000,000 Empl Benefit Plans
  $1,000,000 Funds Transfer Fraud $250,000 Money Orders/Counter-feit $250,000
  Credit Card Forgery

  	
   

  	
  Inlight

  
	
  Workers Comp

  	
   

  	
  NovaMed Employees

  	
   

  	
  Hartford Ins. Co.

  	
   

  	
  38 WE PK5257

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  Statutory Workers Compensation Employers Liability:
  500/500/500

  	
   

  	
  Inlight

  
	
  Workers Comp

  	
   

  	
  Family Vision Care

  	
   

  	
  Hartford Ins. Co.

  	
   

  	
  38 WE PK5255

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  Statutory Workers Compensation Employers Liability:
  500/500/500

  	
   

  	
  Inlight

  
	
  Workers Comp

  	
   

  	
  Southeast Eye Surgery Center

  	
   

  	
  Hartford Ins. Co.

  	
   

  	
  38 WE PK5256

  	
   

  	
  12/01/06

  	
   

  	
  12/01/07

  	
   

  	
  Statutory Workers Compensation Employers Liability:
  500/500/500

  	
   

  	
  Inlight

  
	
  Umbrella

  	
   

  	
  All NovaMed Entities

  	
   

  	
  Darwin Select Insurance Company

  	
   

  	
  0303-3754

  	
   

  	
  05/01/06

  	
   

  	
  05/01/07

  	
   

  	
  $1,000,000 specific loss limit $1,000,000 Aggregate

  	
   

  	
  Inlight

  
	
  Prof Liability

  	
   

  	
  SE Eye Surgery Center

  (Drs. Hung, Ajamian and Zutaut covered while performing procedures at SE.

  	
   

  	
  MedPro

  	
   

  	
  C47511

  	
   

  	
  11/01/06

  	
   

  	
  11/01/07

  	
   

  	
  $1,000,000 each Claim $3,000,000 Aggregate

  	
   

  	
  Inlight

  
	
  Prof/Gen Liab.

  	
   

  	
  NovaMed Surgery Center of Madison, LP

  	
   

  	
  PIC Wisconsin

  	
   

  	
  PL 144141GL 144155

  	
   

  	
  12/06/06

  	
   

  	
  12/06/07

  	
   

  	
  $1mil/$3mil

  	
   

  	
  PIC Wisconsin Mary Beth Davis — Agent

  330 E. Lakeside St.Madison, WI 53715

  608-442-3729

  

 

 

	
  Policy Type

  	
   

  	
  Insured Entities

  	
   

  	
  Company

  	
   

  	
  Policy Number

  	
   

  	
  Eff. Date

  	
   

  	
  Exp. Date

  	
   

  	
  Limits

  	
   

  	
  Insurance

  Contact

  
	
  Prof/Gen Liab.

  	
   

  	
  NovaMed Surgery Center of Altamonte Springs, LLC

  	
   

  	
  Mag Mutual

  	
   

  	
  PL- HCS160045301GL- CGL000014601

  	
   

  	
  06/18/06

  	
   

  	
  06/18/07

  	
   

  	
  PL - $500K/ $1.5mil

  GL - $1mil/  $3mil

  	
   

  	
  Brokered by Eidson Ins

  Terri Jackson - Agent 2807 Edgewater Drive Orlando, FL 32854

  407-849-0333

  
	
  Medical Professional

  	
   

  	
  Douglas Day, MD (SE Physician)

  	
   

  	
  MedPro

  	
   

  	
  683052

  	
   

  	
  11/01/06

  	
   

  	
  11/01/07

  	
   

  	
  $5mil/$7mil (shares limits with Douglas G. Day, MD,
  PC)

  	
   

  	
  Brokered by Carter Thompson, Inc.Alan Carter - Agent Atlanta,
  GA 912-384-7171

  
	
  Medical Professional

  	
   

  	
  Steven I. Leff, MD (SE Physician)

  	
   

  	
  MedPro

  	
   

  	
  683709

  	
   

  	
  11/01/06

  	
   

  	
  11/01/07

  	
   

  	
  $5mil/$7mil

  	
   

  	
  Carter Thompson

  
	
  Medical Professional

  	
   

  	
  Lawrence Woodard, MD (SE Physician)

  	
   

  	
  MedPro

  	
   

  	
  705949

  	
   

  	
  11/01/06

  	
   

  	
  11/01/07

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Carter Thompson

  
	
  Medical Professional

  	
   

  	
  James C. Hays, MD (SE Physician)

  	
   

  	
  MedPro

  	
   

  	
  661708

  	
   

  	
  11/01/06

  	
   

  	
  11/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Carter Thompson

  
	
  Medical Professional

  	
   

  	
  Janet L. Lehr, OD

  	
   

  	
  Zurich - Maryland Casualty

  	
   

  	
  PPS0000808891

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Zurich -

  1-800-332-6641

  
	
  Medical Professional

  	
   

  	
  Tracy Stimpson, OD

  	
   

  	
  Zurich - Maryland Casualty

  	
   

  	
  PPS000808842

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Zurich

  
	
  Medical Professional

  	
   

  	
  Carolyn Newcome-Sparks, OD

  	
   

  	
  Zurich - Maryland Casualty

  	
   

  	
  PPS000811929

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Zurich

  
	
  Prof Liability

  	
   

  	
  Rosanne Cummins

  (New Albany/Pain Staff)

  	
   

  	
  American Casualty Co. of Reading, PA (NSO
  Administered

  	
   

  	
  281982638

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Nurses Service Organization (NSO)

  1-800-247-1500

  
	
  Prof Liability

  	
   

  	
  Mary Day

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  279224443

  	
   

  	
  7/1/2006

  	
   

  	
  7/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  NSO

  
	
  Prof Liability

  	
   

  	
  Kimberly Deatrick

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  281990187-8

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  Healthcare Providers Service Organization
  (HPSO)1-800-982-9491

  
	
  Prof Liability

  	
   

  	
  Paula Sprayberry

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  281982655-8

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  NSO

  
	
  Prof Liability

  	
   

  	
  Kristen DeVore

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  281982686

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  NSO

  
	
  Prof Liability

  	
   

  	
  Christine Dryden

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  281982641

  	
   

  	
  5/1/2006

  	
   

  	
  5/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  NSO

  
	
  Prof Liability

  	
   

  	
  Jacqueline Durham

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  279403369

  	
   

  	
  9/1/2006

  	
   

  	
  9/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  HPSO

  

 

 

	
  Policy Type

  	
   

  	
  Insured Entities

  	
   

  	
  Company

  	
   

  	
  Policy Number

  	
   

  	
  Eff. Date

  	
   

  	
  Exp. Date

  	
   

  	
  Limits

  	
   

  	
  Insurance

  Contact

  
	
  Prof Liability

  	
   

  	
  Michelle Amy

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  285032175

  	
   

  	
  9/1/2006

  	
   

  	
  9/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  HPSO

  
	
  Prof Liability

  	
   

  	
  Jennifer Bill

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  285835360-8

  	
   

  	
  11/1/2006

  	
   

  	
  11/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  HPSO

  
	
  Prof Liability

  	
   

  	
  Rebecca Reed

  (New Albany/Pain Staff)

  	
   

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

  	
   

  	
  279235328-8

  	
   

  	
  7/1/2006

  	
   

  	
  7/1/2007

  	
   

  	
  $1mil/$3mil

  	
   

  	
  NSO

  
	
  D&O Liability

  	
   

  	
  Directors and Officers

  	
   

  	
  Illinois National Insurance Company/AIG

  	
   

  	
  4932264

  	
   

  	
  7/28/2006

  	
   

  	
  7/28/2007

  	
   

  	
  $10mil for each loss $10mil aggregate $50K Crisis
  Loss $25K Delisting Crisis Loss $350K Retention for Security Claims

  	
   

  	
  Brokered by Gallagher Healthcare Insurance Services,
  Inc.Linda Brown - Agent

  1-800-733-4474

  

 

SCHEDULE
7.2.3

Existing
Liens

 

	
  

  Lender

  	
   

  	
  

  Loan Type

  	
   

  	
  

  Location

  	
   

  	
  

  Collateral

  	
   

  	
  Original

  Principal

  Balance

  	
   

  	
  Current 

  Principal 

  Balance

  	
   

  	
  Book 

  Value of 

  Collateral

  	
   

  
	
  Olympus America, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Columbus, GA

  	
   

  	
  GI Medical Equip

  	
   

  	
  370,160

  	
   

  	
  180,950

  	
   

  	
  244,110

  	
   

  
	
  Smith & Nephew

  	
   

  	
  Capital Lease

  	
   

  	
  Columbus, GA

  	
   

  	
  Video Tower
  System

  	
   

  	
  96,400

  	
   

  	
  74,749

  	
   

  	
  69,426

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Chattanooga, TN

  	
   

  	
  Infiniti Phaco
  System

  	
   

  	
  112,010

  	
   

  	
  76,510

  	
   

  	
  88,166

  	
   

  
	
  Americorp Financial

  	
   

  	
  Capital Lease

  	
   

  	
  Denver, CO

  	
   

  	
  2 AMO Phaco
  Systems

  	
   

  	
  81,890

  	
   

  	
  61,788

  	
   

  	
  69,607

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Gainesville, FL

  	
   

  	
  2 Phaco Systems
  &

  Microscope

  	
   

  	
  175,180

  	
   

  	
  176,598

  	
   

  	
  173,814

  	
   

  
	
  AMO

  	
   

  	
  Capital Lease

  	
   

  	
  Lake Worth, FL

  	
   

  	
  2 Sovereign
  Compacts

  	
   

  	
  63,900

  	
   

  	
  59,462

  	
   

  	
  42,600

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Merrillville, IN

  	
   

  	
  Sovereign Phaco
  Upgrade

  	
   

  	
  16,000

  	
   

  	
  16,000

  	
   

  	
  16,000

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Overland Park,
  KS

  	
   

  	
  2 Infiniti Phaco
  Systems

  	
   

  	
  97,000

  	
   

  	
  32,956

  	
   

  	
  71,271

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Sandusky, OH

  	
   

  	
  Phaco System

  	
   

  	
  42,500

  	
   

  	
  39,207

  	
   

  	
  39,776

  	
   

  
	
  Alcon Laboratories, Inc

  	
   

  	
  Capital Lease

  	
   

  	
  Whittier, CA

  	
   

  	
  Infiniti Phaco System

  	
   

  	
  140,725

  	
   

  	
  250

  	
   

  	
  36,060

  	
   

  

 

SCHEDULE
7.2.5

Existing
Investments

	
  Name

  	
   

  	
  Loan Date

  	
   

  	
  Original 

  Principal 

  Balance

  	
   

  
	
  Dr. Britt Brockman

  	
   

  	
  11/14/97

  	
   

  	
  100,000

  	
   

  
	
  Dr. Laurent
  Cowling

  	
   

  	
  12/22/98

  	
   

  	
  18,000

  	
   

  
	
  Dr. Timothy
  Schmitt

  	
   

  	
  04/01/00

  	
   

  	
  1,190,541

  	
   

  
	
  Joseph Ceravolo

  	
   

  	
  11/21/02

  	
   

  	
  180,000

  	
   

  
	
  NMSC of Denver

  	
   

  	
  07/01/06

  	
   

  	
  185,581

  	
   

  

 

SCHEDULE 7.2.8

Subsidiaries to be
Dissolved

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

	
  1.

  	
   

  	
  Blue Ridge NovaMed, Inc., a Missouri corporation

  
	
  2.

  	
   

  	
  NovaMed of Louisville, Inc., a Kentucky corporation

  
	
  3.

  	
   

  	
  NovaMed Eyecare Research, Inc., a Delaware
  corporation

  
	
  4.

  	
   

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

  
	
  5.

  	
   

  	
  NMGK, Inc., an Illinois corporation

  
	
  6.

  	
   

  	
  NMLO, Inc., a Kansas corporation

  
	
  7.

  	
   

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

  
	
  8.

  	
   

  	
  NMI, Inc., a Georgia corporation

  
	
  9.

  	
   

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

  

SCHEDULE 10.1

COMMITMENT PERCENTAGES

	
  Lender

  	
   

  	
  Percentage of aggregate Revolving 

  Commitment Amount

  	
   

  
	
  National City Bank

  	
   

  	
  22.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  LaSalle Bank National
  Association

  	
   

  	
  22.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Associated Bank, N.A.

  	
   

  	
  14.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Charter One Bank

  	
   

  	
  14.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  BMO Capital Markets
  Financing, Inc.

  	
   

  	
  12.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  The Northern Trust
  Company

  	
   

  	
  8.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank,
  National Association

  	
   

  	
  8.0%

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  100%

  	
   

  

 

SCHEDULE 10.2

Notice Information

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

	
   

  	
  NovaMed, Inc.

  
	
   

  	
  980 North Michigan Avenue, Suite 1620

  
	
   

  	
  Chicago, Illinois 60611

  
	
   

  	
  Attention:     Scott T.
  Macomber

  
	
   

  	
                       John
  W. Lawrence, Jr.

  
	
   

  	
  Telephone:   (312) 664-4100

  
	
   

  	
  Facsimile:    (312) 664-4250

  

 

EXHIBIT
A

Form of Note

FORM OF NOTE

$__________                                                                                                                                                         February
   , 2007

FOR VALUE RECEIVED, the
undersigned, NOVAMED, INC., a Delaware corporation (the “Borrower”),
promises to pay to the order of ________________ (the “Lender”) the
principal sum of ______________________ ($______________) at the times and in
the amounts set forth in the Credit Agreement (as defined below) made by the
Lender pursuant to that certain Sixth Amended and Restated Credit Agreement,
dated as of February 7, 2007 (as the same may be amended, restated or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
National City Bank, as Agent, and the various commercial lending institutions
(including the Lender) as are, or may from time to time become, parties thereto.  Defined terms used herein and otherwise not
defined herein shall have the meanings specified thereto in the Credit
Agreement).

The Borrower also promises
to pay interest on the unpaid principal amount hereof from time to time
outstanding from the date hereof until maturity (whether by acceleration or
otherwise) and, after maturity, until paid, at the rates per annum and on the
dates specified in the Credit Agreement.

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

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

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

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

	
   

  	
  NOVAMED, INC.

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

EXHIBIT
B

Form of Borrowing Request

BORROWING REQUEST

National City Bank,

  as Agent

[address]

Attention:

Gentlemen
and Ladies:

This Borrowing Request is delivered to you pursuant to
Section 2.3 of the Sixth Amended and Restated Credit Agreement, dated as of
February 7, 2005 (as the same may be amended, restated or otherwise modified
from time to time, the “Credit Agreement”), among NovaMed Inc. (the “Borrower”),
certain commercial lending institutions and National City Bank, as agent  (the “Agent”).  Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.

The Borrower hereby requests that a Loan be made in
the aggregate principal amount of $__________ on __________, 200___ as a [LIBO
Rate Loan having an Interest Period of _______ months] [Base Rate Loan].

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

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

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

 

	
  Amount to be

  Transferred

  	
   

  	
  Person to be Paid

  Name   Account No.

  	
   

  	
   

  	
   

  	
  Name, Address, etc.

  of Transferee Lender

  
	
  

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention: 

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention: 

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Balance of

  	
   

  	
  The Borrower

  	
   

  	
   

  	
   

  	
   

  
	
  such proceeds

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Attention:

  	
   

  	 

														

 

The Borrower has caused this Borrowing Request to be
executed and delivered, and the certification and warranties contained herein
to be made, by its duly Authorized Officer this       
day of                    ,
200   .

NOVAMED, INC.

By
_______________________________

Title:

EXHIBIT
C

Form of Continuation/Conversion Notice

CONTINUATION/CONVERSION NOTICE

National City Bank,

  as Agent

[address]

Attention:

Gentlemen
and Ladies:

This Continuation/Conversion Notice is delivered to
you pursuant to Section 2.4 of the Sixth Amended and Restated Credit Agreement,
dated as of February 7, 2007 (as the same may be amended, restated or otherwise
modified from time to time, the “Credit Agreement”), among NovaMed, Inc.
(the “Borrower”), certain commercial lending institutions and National
City Bank, as agent  (the “Agent”).  Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.

The Borrower hereby requests that on ____________,
200___,

(1)           $___________ of the presently outstanding principal amount
of the Loans originally made on __________, 19___ [and $__________ of the
presently outstanding principal amount of the Loans originally made on
__________, 19___],

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

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

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

The
Borrower hereby:

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

*              Select appropriate
interest rate option.

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

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

The Borrower has caused this Continuation/Conversion
Notice to be executed and delivered, and the certification and warranties
contained herein to be made, by its Authorized Officer this ___ day of
_________, 200___.

NOVAMED, INC.

By
_______________________________

Title:

EXHIBIT
D

Form of Lender Assignment Agreement

LENDER ASSIGNMENT AGREEMENT

To:          NovaMed, Inc.

To:          National City Bank,

as the Agent

Gentlemen
and Ladies:

We refer to Section 10.11.1 of the Sixth
Amended and Restated Credit Agreement, dated as of  February 7, 2007 (as the same may be amended,
restated or otherwise modified from time to time thereafter made thereto, the “Credit
Agreement”), among NovaMed, Inc. (the “Borrower”), the various
financial institutions (the “Lenders”) as are, or shall from time to
time become, parties thereto, and National City Bank, as agent (the “Agent”)
for the Lenders.  Unless otherwise
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.

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

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

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

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

(a)  the Assignee

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

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

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

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

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

(A)                              Address for Notices:

Institution Name:

Attention:

Domestic Office:

Telephone:

Facsimile:

LIBOR Office:

Telephone:

Facsimile:

(B)                                Payment Instructions:

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

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

 

	
   

  	
   

  	
   

  	
   

  
	
  Adjusted Percentage

  	
   

  	
  [ASSIGNOR]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
     Revolving Commitment

  	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  	
   

  
	
  Loans:___%

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By__________________________

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Percentage

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [ASSIGNEE]

  	
   

  
	
     Revolving Commitment

  	
   

  	
   

  	
   

  
	
  and

  	
   

  	
   

  	
   

  
	
  Loans:___%

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By__________________________

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Accepted and Acknowledged

  	
   

  	
   

  	
   

  
	
  this ___ day of _______, 200__

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NATIONAL CITY BANK,

  	
   

  	
   

  	
   

  
	
    as Agent

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:_________________________

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  NOVAMED, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By: _________________________

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
							

 

EXHIBIT
E

Form of Guaranty

FORM OF GUARANTY

THIS GUARANTY (this “Guaranty”), dated as
of  June 28, 2000, made by the
undersigned (each a “Guarantor” and collectively the “Guarantors”),
in favor of each of the Lender Parties (as defined below).

W I T N E S S E T H:

WHEREAS, pursuant to a Credit Agreement, dated as of
June 28, 2000 (together with all amendments, restatements  and other modifications, if any, from time to
time thereafter made thereto, the “Credit Agreement”), among NovaMed
Eyecare, Inc. (the “Borrower”), the various commercial lending
institutions (individually a “Lender” and collectively the “Lenders”)
as are, or may from time to time become, parties thereto and National City Bank
of Michigan/Illinois, as agent (together with any successor(s) thereto in such
capacity, the “Agent”) for the Lenders, the Lenders have extended
Revolving Commitments to make Loans to, and participant in the issuance of
Letters of Credit issued for the account of, 
the Borrower; and

WHEREAS, as a condition precedent to the making of the
initial Loans and the issuance of, and participation in, Letters of Credit
issued under the Credit Agreement, each Guarantor is required to execute and
deliver this Guaranty; and

WHEREAS, each Guarantor has duly authorized the
execution, delivery and performance of this Guaranty; and

WHEREAS, it is in the best interests of each such
Guarantor to execute this Guaranty inasmuch as such  Guarantor will derive substantial direct and
indirect benefits from the Loans made from time to time to, and the issuance of
Letters of Credit issued for the account of, 
the Borrower  pursuant to the
Credit Agreement;

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Lenders to
make Loans (including the initial Loans) to, and the issuance of, and
participation in, Letters of Credit for the account of,  the Borrower pursuant to the Credit
Agreement, each Guarantor agrees, for the benefit of each Lender Party, as
follows:

ARTICLE I

DEFINITIONS

SECTION 1.1.        Certain
Terms.  The following terms (whether
or not underscored) when used in this Guaranty, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

“Agent” is defined in the first recital.

“Borrower” is defined in the first recital.

“Credit Agreement” is defined in the first
recital.

“Guarantor” is defined in the preamble.

“Guaranty” is defined in the preamble.

“Lender” is defined in the first recital.

“Lender Party” means, as the context may
require, any Lender, the Issuing Bank and/or 
the Agent and each of its permitted respective successors, transferees
and assigns.

“Lenders” is defined in the first recital.

SECTION 1.2.        Credit
Agreement Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Guaranty, including its preamble and recitals, have the meanings provided in
the Credit Agreement.

ARTICLE II

GUARANTY PROVISIONS

SECTION 2.1.        Guaranty.  Each Guarantor hereby, jointly and
severally,  absolutely, unconditionally
and irrevocably:

(a)           guarantees
the full and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Obligations
of the Borrower now or hereafter existing under the Credit Agreement, the
Notes, each Letter of Credit and each other Loan Document  to which the Borrower is or may become a
party, whether for principal, interest, fees, expenses or otherwise (including
all such amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
§362(a), and the operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)), and

(b)           indemnifies
and holds harmless each Lender Party and each holder of a Note for any and all
reasonable costs and expenses (including reasonable attorney’s fees and
expenses) incurred by such Lender Party or such holder, as the case may be, in
enforcing any rights under this Guaranty;

provided,
however, that each Guarantor shall be liable under this Guaranty for the
maximum amount of such liability that can be hereby incurred without rendering
this Guaranty, as it relates to such Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount.  This Guaranty
constitutes a guaranty of payment when due and not of collection, and each
Guarantor specifically agrees that it shall not be necessary or 

required that any Lender
Party or any holder of any Note exercise any right, assert any claim or demand
or enforce any remedy whatsoever against the Borrower or any other Credit Party
(or any other Person) before or as a condition to the obligations of a
Guarantor hereunder.

SECTION 2.2.        Acceleration
of Guaranty.  Each  Guarantor agrees that, in the event of the
dissolution or insolvency of the Borrower or any other Credit Party, or the
inability or failure of the Borrower or any other Credit Party to pay debts as
they become due, or an assignment by the Borrower or  any other Credit Party  for the benefit of creditors, or the
commencement of any case or proceeding in respect of the Borrower or  any other Credit Party  under any bankruptcy, insolvency or similar
laws, and if such event shall occur at a time when any of the Obligations of
the Borrower  may not then be due and
payable, each Guarantor will pay to the Lenders forthwith the full amount which
would be payable hereunder by such Guarantor if all such Obligations were then
due and payable.

SECTION 2.3.        Guaranty
Absolute, etc.  This Guaranty shall
in all respects be a continuing, absolute, unconditional and irrevocable
guaranty of payment, and shall remain in full force and effect until all
Obligations of the Borrower have been paid in full, all obligations of each
Guarantor hereunder shall have been paid in full and all Revolving Commitments
and Letters of Credit shall have terminated. 
Each Guarantor guarantees that the Obligations of the Borrower will be
paid strictly in accordance with the terms of the Credit Agreement and each
other Loan Document under which they arise, regardless of any law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of any Lender Party or any holder of any Note with respect
thereto.  The liability of each Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable irrespective
of:

(a)           any
lack of validity, legality or enforceability of the Credit Agreement, any Note,
any Letter of Credit  or any other Loan
Document;

(b)           the
failure of any Lender Party or any holder of any Note

(i)            to
assert any claim or demand or to enforce any right or remedy against the Borrower,
any other Credit Party  or any other
Person (including any other guarantor) under the provisions of the Credit
Agreement, any Note, any Letter of Credit, 
any other Loan Document or otherwise, or

(ii)           to
exercise any right or remedy against any other guarantor of, or collateral
securing, any Obligations of the Borrower or any other  Credit Party;

(c)           any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Obligations of the Borrower or any other Credit Party, or any
other extension, compromise or renewal of any Obligation of the Borrower or any
other Credit Party;

(d)           any
reduction, limitation, impairment or termination of any Obligations of the
Borrower or any other Credit Party for any reason, including any claim of
waiver, release, surrender, alteration or compromise, and shall not be subject
to (and each  Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality, 

nongenuineness,
irregularity, compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations of the Borrower, any other Credit Party or
otherwise;

(e)           any
amendment to, rescission, waiver, or other modification of, or any consent to
departure from, any of the terms of the Credit Agreement, any Note, any Letter
of Credit  or any other Loan Document;

(f)            any
addition, exchange, release, surrender or non-perfection of any collateral, or
any amendment to or waiver or release or addition of, or consent to departure
from, any other guaranty, held by any Lender Party or any holder of any Note
securing any of the Obligations of the Borrower or any other Credit Party; or

(g)           any
other circumstance which might otherwise constitute a defense available to, or
a legal or equitable discharge of, the Borrower, any other Credit Party,  any surety or any guarantor.

SECTION 2.4.        Reinstatement,
etc.  Each Guarantor agrees that  this Guaranty shall continue to be effective
or be reinstated, as the case may be, if at any time any payment (in whole or
in part) of any of the Obligations is rescinded or must otherwise be restored
by any Lender Party or any holder of any Note, upon the insolvency, bankruptcy
or reorganization of the Borrower, any other Credit Party or otherwise, all as
though such payment had not been made.

SECTION 2.5.        Waiver,
etc.  Each  Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower and this Guaranty and any requirement that the
Agent, any other Lender Party or any holder of any Note protect, secure,
perfect or insure any security interest or Lien, or any property subject
thereto, or exhaust any right or take any action against the Borrower, any
other Credit Party  or any other Person
(including any other guarantor) or entity or any collateral securing the
Obligations of the Borrower or any other Credit Party, as the case may be.

SECTION 2.6.        Subrogation,
etc.  No Guarantor will  exercise any rights which it may
acquire by reason of any payment made hereunder, whether by way of rights of
subrogation, reimbursement or otherwise, until the prior payment, in full and
in cash or in securities otherwise acceptable to the Agent and the Lenders, of
all Obligations of the Borrower and each other Credit Party.  Any amount paid to a Guarantor on account of
any payment made hereunder prior to the payment in full of all Obligations of
the Borrower and each other Credit Party shall be held in trust for the benefit
of the Lender Parties and each holder of a Note and shall immediately be paid
to the Agent and credited and applied, without duplication, against the
Obligations of the Borrower and each other Credit Party, whether matured or
unmatured, in accordance with the terms of the Credit Agreement; provided,
however, that if

(a)           such
Guarantor has made payment to the Lender Parties and each holder of a Note of
all or any part of the Obligations of the Borrower or any other Credit Party,
and

(b)           all
Obligations of the Borrower and each other Credit Party have been paid in full
and all Revolving Commitments have been permanently terminated,

each Lender Party and
each holder of a Note agrees that, at such Guarantor’s request, the Agent, on
behalf of the Lender Parties and the holders of the Notes, will execute and
deliver to such  Guarantor appropriate
documents (without recourse and without representation or warranty) necessary
to evidence the transfer by subrogation to such Guarantor of an interest in the
Obligations of the Borrower and each other Credit Party  resulting from such payment by such
Guarantor.  In furtherance of the
foregoing, for so long as any Obligations, Revolving Commitments or Letters of
Credit remain outstanding, each Guarantor shall refrain from taking any action
or commencing any proceeding against the Borrower or any other Credit Party (or
its successors or assigns, whether in connection with a bankruptcy proceeding
or otherwise) to recover any amounts in respect of payments made under this
Guaranty to any Lender Party or any holder of a Note.

SECTION 2.7.        Successors,
Transferees and Assigns; Transfers of Notes, etc.  This Guaranty shall:

(a)           be
binding upon each Guarantor, and its successors, transferees and assigns; and

(b)           inure
to the benefit of and be enforceable by the Agent and each other Lender Party.

Without limiting the
generality of the foregoing clause (b), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof granted to such Lender
under any Loan Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions in such assignment or transfer, and to the
provisions of Section 11.11 and Article IX 
of the Credit Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1.        Representations
and Warranties.   Each Guarantor
represents and warrants to each Lender Party that all representations and
warranties relating to such Guarantor contained in Article VI of the Credit
Agreement are true and correct in all material respects.

ARTICLE IV

COVENANTS

SECTION 4.1.        Covenants.  Each Guarantor hereby agrees that until all
Obligations have been paid in full, all Revolving Commitments and Letters of
Credit have been terminated and any and all documents relating thereto have
been terminated, it shall comply with all covenants relating to it contained in
Articles VII and VIII of the Credit Agreement.

ARTICLE V

MISCELLANEOUS PROVISIONS

SECTION 5.1.        Loan
Document.  This Guaranty is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions thereof.

SECTION 5.2.        Binding
on Successors, Transferees and Assigns; Assignment.  In addition to, and not in limitation of, Section 2.7, this Guaranty shall be binding upon each
Guarantor and its successors, transferees and assigns and shall inure to the
benefit of and be enforceable by each Lender Party and each holder of a Note
and their respective successors, transferees and assigns (to the full extent
provided pursuant to Section 2.7); provided, however, that no Guarantor
may  assign any of its obligations
hereunder without the prior written consent of all Lenders except pursuant to a
transaction which otherwise is permitted by the Credit Agreement.

SECTION 5.3.        Amendments,
etc.  No amendment to or waiver of
any provision of this Guaranty, nor consent to any departure by any Guarantor
here from, shall in any event be effective unless the same shall be in writing
and signed by the Agent, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.

SECTION 5.4.        Addresses
for Notices to a Guarantor.  All
notices and other communications hereunder to a Guarantor shall be in writing
(including telegraphic communication) and mailed or transmitted or delivered to
it, addressed to it at the address set forth on Annex A hereto or at such other
address as shall be designated by such Guarantor in a written notice to the
Agent at the address specified in the Credit Agreement complying as to delivery
with the terms of this Section.  All such
notices and other communications shall, when mailed or transmitted,
telegraphed, respectively, be effective when deposited in the mails or
transmitted, respectively, addressed as aforesaid.

SECTION 5.5.        No
Waiver; Remedies.  In addition to,
and not in limitation of, Section 2.3 and Section 2.5, no failure
on the part of any Lender Party or any holder of a Note to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right.  The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.

SECTION 5.6.        Section
Captions.  Section captions used in
this Guaranty are for convenience of reference only, and shall not affect the
construction of this Guaranty.

SECTION 5.7.        Setoff.  In addition to, and not in limitation
of, any rights of any Lender Party or any holder of a Note under
applicable law, each Lender Party and each such holder shall, upon the
occurrence of any Event of Default, have the right to appropriate and apply to
the payment of the obligations of a Guarantor owing to it hereunder, whether or
not then due, and each Guarantor hereby grants to each Lender Party and each
such holder a continuing security 

interest in, any and each
all balances, credits, deposits, accounts or moneys of such Guarantor then or
thereafter maintained with such Lender Party or such holder and any and all
property of every kind or description of or in the name of such Guarantor now
or hereafter, for any reason or purpose whatsoever, in the possession or
control of, or in transit to, such Lender Party, such holder or any agent or
bailee for such Lender Party or such holder; provided, however, that any
such appropriation and application shall be subject to the provisions of
Section 4.8 of the Credit Agreement.

SECTION 5.8.        Severability.  Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.

SECTION 5.9.        Governing
Law, Entire Agreement, etc.  THIS
GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS. 
THIS GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

SECTION 5.10.      Forum
Selection and Consent to Jurisdiction. 
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF
ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF
ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST
ANY PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. 
THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE
JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN  DISTRICT
OF ILLINOIS  FOR THE PURPOSE OF ANY SUCH
LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.  EACH GUARANTOR FURTHER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL
SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS.  EACH GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION
BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT A GUARANTOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR 

OTHERWISE) WITH RESPECT
TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN
DOCUMENTS.

SECTION 5.11.      Waiver
of Jury Trial.  EACH GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER
PARTIES OR THE GUARANTOR.  EACH GUARANTOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
LENDERS ENTERING INTO THE CREDIT AGREEMENT.

*       *        *

IN WITNESS WHEREOF, each Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.

	
   

  	
  NOVAMED MANAGEMENT OF KANSAS
  CITY, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BLUE RIDGE
  NOVAMED, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY CENTER (PLAZA) L.L.C.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE SURGERY CENTER OF OVERLAND PARK, L.L.C.

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE SURGERY AND LASER CENTER OF ST. JOSEPH,
  INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  

  	
  NOVAMED EYECARE SERVICES, LLC,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE SURGERY CENTER OF

  MARYVILLE, L.L.C.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE SURGERY CENTER OF NORTH COUNTY, LLC,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYE SURGERY CENTER OF NEW

  ALBANY, L.L.C.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED EYECARE RESEARCH, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED OF RICHMOND, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

	
  

  	
  NMGK, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED OF LOUISVILLE, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MIDWEST UNCUTS, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NMSL INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NOVAMED OF 
  ST. LOUIS, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PATIENT EDUCATION CONCEPTS, INC.,

  
	
   

  	
  as a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND
  AGREED TO:

  	
   

  
	
   

  	
   

  
	
  NATIONAL CITY
  BANK OF MICHIGAN/ILLINOIS,

  	
   

  
	
  as Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  

 

EXHIBIT
F-1

Form of Borrower Pledge Agreement

BORROWER PLEDGE
AGREEMENT

THIS PLEDGE AGREEMENT (this “Pledge Agreement”),
dated as of June   , 2000, made by NOVAMED EYECARE, INC., a Delaware
corporation (the “Pledgor”), in favor of NATIONAL CITY BANK OF MICHIGAN/ILLINOIS,
as agent (together with any successor(s) thereto in such capacity, the “Agent”)
for each of the Lender Parties (as defined below).

W I T N E S S E T H:

WHEREAS, pursuant to a Credit Agreement, dated as of
June ___, 2000 (together with all  amendments,  restatements and other modifications, if any,
from time to time thereafter made thereto, the “Credit Agreement”),
among the Pledgor, the various commercial lending institutions (individually a “Lender”
and collectively the “Lenders”) as are, or may from time to time become,
parties thereto and the Agent, the Lenders have extended Revolving Commitments
to make Loans to, and participate in Letters of Credit issued for the account
of,  the Pledgor; and

WHEREAS, the Pledgor is the record and beneficial
owner of all the shares of stock, membership interests or partnership units of
each entity (each, a “Pledged Entity) described in Part A of Schedule
I hereto and the owner of the promissory notes and instruments listed in
Part B of Schedule I hereto; and

WHEREAS, as a condition precedent to the making of the
initial Loans, and issuance of the initial Letter of Credit,  under the Credit Agreement, the Pledgor is
required to execute and deliver this Pledge Agreement; and

WHEREAS, the Pledgor has duly authorized the
execution, delivery and performance of this Pledge Agreement; and

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Lenders to
make Loans (including the initial Loans) to, and the issuance of, and
participation in, Letters of Credit for the account of,  the Pledgor pursuant to the Credit Agreement,
the Pledgor agrees, for the benefit of each Lender Party, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1         Certain Terms.  The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

“Agent” is defined in the preamble.

“Collateral” is defined in Section 2.1.

“Credit Agreement” is defined in the first
recital.

“Distributions” means all stock dividends,
liquidating, membership interests, or partnership interests dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or General Intangibles
or other shares of capital stock constituting Collateral, but shall not include
Dividends.

“Dividends” means cash dividends and cash
distributions (other than payments of inter-company obligations in the ordinary
course of business) with respect to any Pledged Shares or General
Intangibles  or other Pledged Property
made in the ordinary course of business and not a liquidating dividend.

“General Intangibles” means all of the Pledgor’s
now owned or hereafter acquired general intangibles, choses in action and
causes of action and all other intangible personal property of the Pledgor of
every kind and nature, including, without limitation, all contract rights,
partnership or membership interests, corporate or  other business records with respect to any
Pledged Entity.

“Lender” is defined in the first recital.

“Lender Party” means, as the context may
require, any Lender or the Agent and each of its permitted respective
successors, transferees and assigns.

“Lenders” is defined in the first recital.

“Pledge Agreement” is defined in the preamble.

“Pledged Note Issuer” means each Person
identified in Part B of Schedule I hereto as the issuer of the Pledged Note
identified opposite the name of such Person.

“Pledged Notes” means all promissory notes of
any Pledged Note Issuer  which are
delivered by a Pledgor to the Agent as Pledged Property hereunder, as such
promissory notes, in accordance with Section 4.5, are amended, modified
or supplemented from time to time and together with any promissory note of any
Pledged Note Issuer taken in extension or renewal thereof or substitution
therefor.

“Pledged Property” means all Pledged Shares,
all Pledged Notes, all General Intangibles 
and all other pledged shares of capital stock, membership interests,
partnership interest, or promissory notes, all other securities, all
assignments of any amounts due or to become due, all other instruments which
are now being delivered by the Pledgor to the Agent or may from time to time
hereafter be delivered by the  Pledgor to
the Agent for the purpose of pledge under this Pledge Agreement or any other
Loan Document, and all proceeds of any of the foregoing.

“Pledged Share Issuer” means each Person
identified in Part A of Schedule I 
hereto as the issuer of the Pledged Shares or General Intangibles
identified opposite the name of such Person.

“Pledged Shares” means all shares of capital
stock of any Pledged Share Issuer which are delivered by the Pledgor to the
Agent as Pledged Property hereunder.

“Pledgor” is defined in the preamble.

“Secured Obligations” is defined in Section
2.2.

“Securities Act” is defined in Section 6.1.

“U.C.C.” means the Uniform Commercial Code as
in effect in the State of Illinois.

SECTION 1.2         Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.

SECTION 1.3         U.C.C. Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided in the U.C.C.
are used in this Pledge Agreement, including its preamble and recitals, with
such meanings.

ARTICLE II

PLEDGE

SECTION 2.1         Grant of Security Interest.  The Pledgor hereby pledges, hypothecates, assigns,
charges, mortgages, delivers, and transfers to the Agent, for its benefit and
the ratable benefit of each of the Lender Parties, to the maximum extent
permitted by and consistent with applicable law, including, without limitation,
Medicare Regulations and Medicaid Regulations, and hereby grants to the Agent,
for its benefit and the ratable benefit of the Lender Parties, a continuing
security interest in, all of the following property, to the maximum extent
permitted by and consistent with applicable law, including, without limitation,
Medicare Regulations and Medicaid (the “Collateral”):

(a)           all  Pledged Notes
issued from time to time;

(b)           all  Pledged Shares
issued from time to time;

(c)                                  all General
Intangibles;

(d)           all other Pledged Property, whether now or hereafter
delivered to the Agent in connection with this Pledge Agreement;

(e)           all Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Property; and

(f)            all proceeds of any of the foregoing.

SECTION 2.2         Security for Obligations.  This Pledge Agreement secures the
payment in full of all Obligations of the Pledgor now or hereafter existing
under the Credit Agreement, the Notes and each other Loan Document to which the
Pledgor is or may become a party, whether for principal, interest, costs, fees,
expenses, or otherwise, and all obligations of the Pledgor now or hereafter
existing under this Pledge Agreement and each other Loan Document to which it
is or may become a party (all such obligations of the Pledgor being the “Secured
Obligations”).

SECTION 2.3         Delivery of Pledged Property.  All certificates or instruments representing
or evidencing any Collateral, including all Pledged Shares and all Pledged
Notes, shall be delivered to and held by or on behalf of (and, in the case of
the Pledged Notes, endorsed to the order of) the Agent pursuant hereto, shall
be in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.  An acknowledgment of security interest in the
form of Schedule II hereto from each Pledged Entity the ownership
interests of which are uncertificated shall be delivered to the Agent
substantially concurrently with the execution and delivery hereof.

SECTION 2.4         Dividends; Payments
on  Pledged Notes.  In the
event that any Dividend is to be paid or any payment of principal or interest
is to be made on any Pledged Note at a time when  no Event of Default has occurred and is continuing,
such Dividend or payment may be paid directly to the relevant  Subsidiary. 
If any such  Event of Default has
occurred and is continuing, then any such Dividend or payment shall be paid
directly to the Agent.

SECTION 2.5         Continuing Security Interest;
Transfer of Note.  This Pledge Agreement
shall create a continuing security interest in the Collateral and shall

(a)           remain in full force and effect until payment in full of
all Secured Obligations and the termination of all Revolving Commitments and
Letters of Credit,

(b)           be binding upon the Pledgor and its successors,
transferees and assigns, and

(c)           inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and each other Lender Party.

Without limiting the foregoing clause (c), any
Lender may assign or otherwise transfer (in whole or in part) any Note or Loan
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Pledge
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 11.11 of the Credit
Agreement.  Upon the payment in full of
all Secured Obligations and the termination of all Revolving Commitments and
Letters of Credit , the security interest granted herein shall terminate and
all rights to the Collateral shall revert to the Pledgor.  Upon any such termination, the Agent will, at
the Pledgor’s sole expense, deliver to the Pledgor, without any
representations, warranties or recourse of any kind whatsoever, all
certificates and instruments representing or evidencing all Pledged Shares and
all Pledged Notes, together with all other Collateral held by the Agent hereunder,
and execute and deliver to the Pledgor such documents as the Pledgor shall
reasonably request to evidence such termination.

SECTION 2.6         Security Interest Absolute.  All rights of the Agent and the security
interests granted to the Agent hereunder, and all obligations of the Pledgor
hereunder, shall be absolute and unconditional, irrespective of

(a)           any lack of validity or enforceability of the Credit
Agreement, any Note or any other Loan Document,

(b)           the failure of any Lender Party or any holder of any Note

(i)            to assert any claim or demand or to enforce any right or
remedy against the Pledgor, any other Credit Party or any other Person under
the provisions of the Credit Agreement, any Note, any other Loan Document or
otherwise, or

(ii)           to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of the Pledgor,

(c)           any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations or any other extension,
compromise or renewal of any Obligation of the Pledgor,

(d)           any reduction, limitation, impairment or termination of
any Obligations of the Pledgor for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to any
defense or setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations of the Pledgor or otherwise,

(e)           any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of the
Credit Agreement, any Note or any other Loan Document,

(f)            any addition, exchange, release, surrender or non-perfection
of any collateral (including the Collateral), or any amendment to or waiver or
release of or addition to or consent to departure from any guaranty, for any of
the Obligations, or

(g)           any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Pledgor, any
other Credit Party any surety or any guarantor.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1         Warranties, etc.  The Pledgor represents and warrants unto each
Lender Party, as at the date of each pledge and delivery hereunder (including
each pledge and delivery

of Pledged Shares and
each pledge and delivery of a Pledged Note) by the Pledgor to the Agent of any
Collateral, as set forth in this Article.

SECTION 3.1.1.  Ownership,
No Liens, etc.  The Pledgor is the
legal and beneficial owner of, and has good and marketable title to (and
has full right and authority to pledge and assign) such Collateral, free and
clear of all liens, security interests, options, or other charges or encumbrances,
except any lien or security interest granted pursuant hereto in favor of the
Agent.  All of the Pledged Shares are
presently owned by the Pledgor, and are presently represented by the stock
certificates listed on Part A of Schedule I hereto.  All of the General Intangibles are presently
owned by the Pledgor and are presently uncertificated. As of the date hereof,
there are no existing options, warrants, calls or commitments of any character
whatsoever relating to the Pledged Shares or the General Intangibles.  No General Intangible is subject to any
defense, offset or counterclaim, nor have any of the foregoing been asserted or
alleged against the Pledgor by any Person with respect thereto.  There are no certificates, instruments,
documents or other writings (other than the relevant limited liability company
agreement or partnership  agreement  delivered to the Agent on the Closing Date)
which evidence any General Intangible of the Pledgor.

SECTION 3.1.2.  Valid
Security Interest.  The delivery of
such Collateral to the Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations.  Except
for the filing of any UCC financing statement with respect to General
Intangibles constituting Collateral, no filing or other action will be
necessary to perfect or protect such security interest.

SECTION 3.1.3.  As
to Pledged Shares.  In the case of
any Pledged Shares constituting such Collateral, all of such Pledged Shares are
duly authorized and validly issued, fully paid, and non-assessable, and
constitute all of the issued and outstanding shares of capital stock of each
Pledged Share Issuer.

SECTION 3.1.4.  As
to Pledged Notes.  In the case of
each Pledged Note, all of such Pledged Notes have been duly authorized,
executed, endorsed, issued and delivered, and are the legal, valid and binding
obligation of the issuers thereof, and are not in default.

SECTION 3.1.5.  Authorization,
Approval, etc.  No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either

(a)           for the pledge by the Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery, and performance of
this Pledge Agreement by such Pledgor, or

(b)           for the exercise by the Agent of the voting or other
rights provided for in this Pledge Agreement, or, except with respect to any
Pledged Shares, as may be required in connection with a disposition of such
Pledged Shares by laws affecting the offering and sale of securities generally.

 

ARTICLE IV

COVENANTS

SECTION 4.1         Protect Collateral; Further
Assurances, etc.  The Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Agent hereunder).  The Pledgor will warrant and defend the right
and title herein granted unto the Agent in and to the Collateral (and all
right, title, and interest represented by the Collateral) against the claims
and demands of all Persons whomsoever. 
The Pledgor agrees that at any time, and from time to time, at the
expense of the Pledgor, the Pledgor will promptly execute and deliver all
further instruments, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable the Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.

SECTION 4.2         Stock Powers, etc.  The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by
the Pledgor pursuant to this Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of
transfer acceptable to the Agent.  The
Pledgor will, from time to time upon the request of the Agent, promptly deliver
to the Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Agent, with respect to the Collateral
as the Agent may reasonably request and will, from time to time upon the
request of the Agent after the occurrence of any Event of Default, promptly
transfer any Pledged Shares or other shares of common stock constituting
Collateral into the name of any nominee designated by the Agent.

SECTION 4.3         Continuous Pledge.  Subject to Section 2.4,  the Pledgor will, at all times, keep pledged
to the Agent pursuant hereto all General Intangibles and all other membership
interest and partnership interests constituting Collateral,  all Pledged Shares and all other shares of
capital stock constituting Collateral, all Dividends and Distributions, all
Pledged Notes, all interest, principal and other proceeds received by the Agent
with respect to the Pledged Notes, and all other Collateral and other securities,
instruments, proceeds, and rights from time to time received by or
distributable to the Pledgor in respect of any Collateral.  The Pledgor shall not permit any Pledged
Entity to declare any General Intangible to be classified as an uncertificated “security”
within the meaning of §8-103(c) of the UCC.

SECTION 4.4                          Voting
Rights; Dividends, etc.  The Pledgor
agrees:

(a)           after any Event of Default shall exist and be continuing,
promptly upon receipt thereof by the Pledgor and without any request therefor
by the Agent, to deliver (properly endorsed where required hereby or requested
by the Agent) to the Agent all Dividends, Distributions, all interest, all
principal, all other cash payments, and all proceeds of the Collateral received
by the Pledgor after such Event of Default, all of which shall be held by the
Agent as additional Collateral for use in accordance with Section 6.3;
and

(b)           after any Event of Default shall exist and be continuing
and the Agent has notified the Pledgor of the Agent’s intention to exercise its
voting power under this Section 4.4(b)

(i)            the Agent may exercise (to the exclusion of the Pledgor)
the voting power and all other incidental rights of ownership with respect to
any Pledged Shares or other shares of capital stock constituting Collateral and
General Intangibles or other membership interest or partnership interests
constituting Collateral and the Pledgor hereby grants the Agent an irrevocable
proxy, exercisable under such circumstances, to vote the Pledged Shares,
General Intangibles and such other Collateral; and

(ii)           promptly to deliver to the Agent such additional proxies
and other documents as may be necessary to allow the Agent to exercise such
voting power.

All Dividends, Distributions, interest, principal,
cash payments, and proceeds which may at any time and from time to time be held
by a  Pledgor but which the Pledgor is
then obligated to deliver to the Agent, shall, until delivery to the Agent, be
held by the Pledgor separate and apart from its other property in trust for the
Agent.  The Agent agrees that unless an
Event of Default shall have occurred and be continuing and the Agent shall have
given the notice referred to in Section 4.4(b), the Pledgor shall have
the exclusive voting power with respect to any ownership interest  (including any General Intangible or any  of the Pledged Shares) constituting
Collateral and the Agent shall, upon the written request of the Pledgor,
promptly deliver such proxies and other documents, if any, as shall be
reasonably requested by the Pledgor which are necessary to allow the Pledgor to
exercise voting power with respect to any ownership interest  (including any General Intangible or any of
the Pledged Shares) constituting Collateral; provided, however,
that no vote shall be cast, or consent, waiver, or ratification given, or
action taken by the Pledgor that would impair any Collateral or be inconsistent
with or violate any provision of the Credit Agreement or any other Loan
Document (including this Pledge Agreement).

SECTION 4.5         Additional Undertakings.  The Pledgor will not, without the prior
written consent of the Agent:

(a)           enter into any agreement amending, supplementing, or
waiving any provision of any Pledged Note (including any underlying instrument
pursuant to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or

(b)           take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.

ARTICLE V

THE AGENT

SECTION 5.1         Agent Appointed Attorney-in-Fact.  Subject to any limits imposed under
applicable law, including, without limitation, Medicare Regulations and
Medicaid Regulations, the Pledgor hereby irrevocably appoints the Agent the
Pledgor’s attorney-in-fact, with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, from time to time in the
Agent’s discretion, following the occurrence and during the continuation of an
Event of Default, to take any action and to execute any instrument which the
Agent may deem necessary or advisable to accomplish the purposes of this Pledge
Agreement, including without limitation:

(a)           to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

(b)           to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with clause (a)
above; and

(c)           to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.

The Pledgor hereby acknowledges, consents and agrees
that the power of attorney granted pursuant to this Section is irrevocable and
coupled with an interest.

SECTION 5.2         Agent May Perform.  If  the
Pledgor fails to perform any agreement contained herein, the Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses
of the Agent incurred in connection therewith shall be payable by the Pledgor
pursuant to Section 6.4.

SECTION 5.3         Agent Has No Duty.  The powers conferred on the Agent hereunder
are solely to protect its interest (on behalf of the Lender Parties) in the
Collateral and shall not impose any duty on it to exercise any such powers.  Except for reasonable care of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Agent shall have no duty as to any Collateral or responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Agent has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

SECTION 5.4         Reasonable Care.  The Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Agent to comply with
any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.

ARTICLE VI

REMEDIES

SECTION 6.1         Certain Remedies.  If any Event of Default shall have occurred
and be continuing:

(a)           The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral)
and also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
the Agent’s offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Agent may deem commercially reasonable.  The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days’ prior notice to the
Pledgor of the time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification.  The Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.  The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

(b)           The Agent, subject to any limits
imposed under applicable law, including, without limitation, Medicare Regulations
and Medicaid Regulations, may

(i)            transfer all or any part of the Collateral into the name
of the Agent or its nominee, with or without disclosing that such Collateral is
subject to the lien and security interest hereunder,

(ii)           notify the parties obligated on any of the Collateral to
make payment to the Agent of any amount due or to become due thereunder,

(iii)          enforce collection of any of the Collateral by suit
or otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

(iv)          endorse any checks, drafts, or other writings in a Pledgor’s
name to allow collection of the Collateral,

(v)           take control of any proceeds of the Collateral, and

(vi)          execute (in the name, place and stead of  the Pledgor) endorsements, assignments, stock
powers and other instruments of conveyance or transfer with respect to all or
any of the Collateral.

SECTION 6.2.  Securities
Laws.  If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, the Pledgor agrees that, upon request of the Agent, the Pledgor will,
at its own expense:

(a)           execute and deliver, and cause each
issuer of the Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary or, in the
opinion of the Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the “Securities
Act”), and to cause the registration statement relating thereto to become
effective and to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and supplements thereto and
to the related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto;

(b)           use its best efforts to qualify the
Collateral under the state securities or “Blue Sky” laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested
by the Agent;

(c)           cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and

(d)           do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.

The Pledgor further acknowledges the impossibility of
ascertaining the amount of damages that would be suffered by the Agent or the
Lender Parties by reason of the failure by the Pledgor to perform any of the
covenants contained in this Section and, consequently, agrees that, if  the Pledgor shall fail to perform any of such
covenants, it shall pay, as liquidated damages and not as a penalty, an amount
equal to the value (as determined by the Agent) of the Collateral on the date
the Agent shall demand compliance with this Section.

SECTION 6.3         Compliance
with Restrictions.  The Pledgor
agrees that in any sale of any of the Collateral whenever an Event of Default
shall have occurred and be continuing, the Agent is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and  the Pledgor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall the Agent be liable
nor accountable to the Pledgor for any discount allowed by the reason of the
fact that such Collateral is sold in compliance with any such limitation or
restriction.

SECTION 6.4         Application
of Proceeds.  All cash proceeds
received by the Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Agent, be held by the Agent as additional collateral security for, or then
or at any time thereafter be applied (after payment of any amounts payable to
the Agent pursuant to  Section 6.4)
in whole or in part by the Agent against, all or any part of the Secured
Obligations in such order as the Agent shall elect.

Any surplus of such cash or cash proceeds held by the
Agent and remaining after payment in full of all the Secured Obligations, and
the termination of all Revolving Commitments and Letters of Credit, shall be
paid over to the Pledgor or to whomsoever may be lawfully entitled to receive
such surplus.

SECTION 6.2         Indemnity and Expenses.  The Pledgor hereby indemnifies and holds
harmless the Agent from and against any and all claims, losses, and liabilities
arising out of or resulting from this Pledge Agreement (including enforcement
of this Pledge Agreement), except claims, losses, or liabilities resulting from
the Agent’s gross negligence or wilful misconduct.  Upon demand, the Pledgor will pay to the
Agent the amount of any and all reasonable expenses, including the reasonable
fees and disbursements of its counsel and of any experts and agents, which the
Agent may incur in connection with:

(a)           the administration of this Pledge Agreement, the Credit
Agreement and each other Loan Document;

(b)           the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral;

(c)           the exercise or enforcement of any of the rights of the
Agent hereunder; or

(d)           the failure by the Pledgor to perform or observe any of
the provisions hereof.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1         Loan Document.  This Pledge Agreement is a  Loan Document executed pursuant to the Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

SECTION 7.2         Amendments, etc.  No amendment to or waiver of any provision of
this Pledge Agreement nor consent to any departure by the Pledgor here from
shall in any event be effective unless the same shall be in writing and signed
by the Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.

SECTION 7.3         Protection of Collateral.  The Agent may from time to time, at its
option, perform any act which the Pledgor agrees hereunder to perform and which
the Pledgor shall fail 

to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Agent may
from time to time take any other action which the Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the
Collateral or of its security interest therein.

SECTION 7.4         Addresses for Notices.  All notices and other communications provided
for hereunder shall be in writing (including telegraphic communication) and, if
to the Pledgor, mailed, transmitted  or
telegraphed or delivered to it at the address of the Pledgor specified in the
Credit Agreement, if to the Agent, mailed or delivered to it, addressed to it
at the address of the Agent specified in the Credit Agreement or, as to either
party, at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section.  All such notices and other
communications shall, when mailed, transmitted 
or telegraphed, respectively, be effective when deposited in the mails
or delivered to the telegraph company, respectively, addressed as aforesaid.

SECTION 7.5         Section Captions.  Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.

SECTION 7.6         Severability.  Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.

SECTION 7.7         Governing Law, Entire Agreement, etc.  THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF ILLINOIS.  THIS PLEDGE AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

SECTION 7.8         Forum Selection and Consent to
Jurisdiction.   ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE PLEDGOR SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. 
THE PLEDGOR HEREBY EXPRESSLY AND 

IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION.  THE
PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS.  THE PLEDGOR HEREBY EXPRESSLY
AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.  TO THE EXTENT THAT THE PLEDGOR HAS OR
HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY
LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS
PROPERTY, THE  PLEDGOR HEREBY IRREVOCABLY
WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.

SECTION 7.9         Waiver of Jury Trial.  THE LENDER PARTIES AND THE
PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE LENDER PARTIES OR EITHER PLEDGOR.  EACH PLEDGOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO
THE CREDIT AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

* * *

 

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

	
  

  	
   

  	
   

  	
  NOVAMED EYECARE, INC., as Pledgor

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NATIONAL CITY BANK OF

  
	
   

  	
   

  	
   

  	
     MICHIGAN/ILLINOIS, as
  Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE II

ACKNOWLEDGMENT OF SECURITY INTEREST

[NAME OF PLEDGED ENTITY] (the “Company”) hereby
acknowledges receipt of a copy of the assignment by NOVAMED EYECARE, INC. (the “Pledgor”)
of its interest under the [TITLE OF AGREEMENT] (the “Agreement”) pursuant to
the terms of the Pledge Agreement, dated as of 
June ___, 2000 (the “Pledge Agreement”), among the Pledgor, an Affiliate
of the Pledgor and National City Bank of Michigan/Illinois,  as Agent.

The undersigned hereby further confirms the
registration of the Pledgor’s pledge of its interest in the Company to the
Agent on the Company’s books.

The Company agrees that at any time prior to the
Termination Date (as defined in the Pledge Agreement), it will not take or
approve any action in furtherance of deeming the interests of the Company to be
an uncertificated  “security” within the
meaning of § 8-103(c) of the UCC (as defined in the Pledge
Agreement) and that its membership or partnership interest shall at all times
be general intangibles under the UCC.

	
  

  	
  [NAME OF PLEDGED ENTITY]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: 

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

EXHIBIT
F-2

Form of Guarantor Pledge Agreement

GUARANTOR
PLEDGE AGREEMENT

THIS PLEDGE AGREEMENT (this “Pledge Agreement”),
dated as of June ___, 2000, made by the undersigned (each a “Pledgor”
and collectively the “Pledgors”), in favor of NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS, as agent (together with any successor(s) thereto in such
capacity, the “Agent”) for each of the Lender Parties (as defined
below).

W I T N E S S E T H:

WHEREAS, pursuant to a Credit Agreement, dated as of
June   , 2000 (together with all amendments, restatements   and other modifications, if any, from time
to time thereafter made thereto, the “Credit Agreement”), among NovaMed
Eyecare, Inc. (the “Borrower”), the various commercial lending
institutions (individually a “Lender” and collectively the “Lenders”)
as are, or may from time to time become, parties thereto and the Agent, the
Lenders have extended Revolving Commitments to make Loans to, and participate
in Letters of Credit issued for the account of, 
the Borrower; and

WHEREAS, pursuant to the Guaranty, dated as of
June   , 2000 (together with all amendments, restatements  and other modifications, if any, from time to
time thereafter made thereto, the “Guaranty”), each Pledgor has jointly
and severally guaranteed to the Lenders the payment when due of all obligations
and liabilities of the Borrower under or with respect to the Credit Agreement
and the other Loan Documents; and

WHEREAS, the relevant 
Pledgor is the record and beneficial owner of all the shares of stock,
membership interests or partnership units of each entity (each, a “Pledged
Entity) described in Part A of Schedule I hereto and the owner of
the promissory notes and instruments listed in Part B of Schedule I
hereto; and

WHEREAS, as a condition precedent to the making of the
initial Loans, and issuance of the initial Letter of Credit,  under the Credit Agreement, each  Pledgor is required to execute and deliver
this Pledge Agreement; and

WHEREAS, each Pledgor has duly authorized the
execution, delivery and performance of this Pledge Agreement; and

WHEREAS, it is in the best interests of each Pledgor
to execute this Pledge Agreement inasmuch as such  Pledgor will derive substantial direct and
indirect benefits from the Loans made from time to time to, and the issuance
of, and participation in, Letters of Credit for the account of,  the Borrower by the Lenders pursuant to the
Credit Agreement; and

NOW THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to induce the Lenders to
make Loans (including the initial Loans) to, 

and the issuance of, and participation in, Letters of
Credit for the account of,  the Borrower
pursuant to the Credit Agreement, each Pledgor agrees, for the benefit of each
Lender Party, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1         Certain Terms.  The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):

“Agent” is defined in the preamble.

“Borrower” is defined in the first recital.

“Collateral” is defined in Section 2.1.

“Credit Agreement” is defined in the first
recital.

“Distributions” means all stock dividends,
liquidating, membership interests, or partnership interests dividends, shares
of stock resulting from (or in connection with the exercise of) stock splits,
reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or General Intangibles
or other shares of capital stock constituting Collateral, but shall not include
Dividends.

“Dividends” means cash dividends and cash
distributions (other than payments of inter-company obligations in the ordinary
course of business) with respect to any Pledged Shares or General
Intangibles  or other Pledged Property
made in the ordinary course of business and not a liquidating dividend.

“General Intangibles” means all of a Pledgor’s
now owned or hereafter acquired general intangibles, choses in action and
causes of action and all other intangible personal property of such Pledgor of
every kind and nature, including, without limitation, all contract rights,
partnership or membership interests, corporate or  other business records with respect to any
Pledged Entity.

“Lender” is defined in the first recital.

“Lender Party” means, as the context may
require, any Lender or the Agent and each of its permitted respective
successors, transferees and assigns.

“Lenders” is defined in the first recital.

“Pledge Agreement” is defined in the preamble.

“Pledged Note Issuer” means each Person
identified in Part B of Schedule I hereto as the issuer of the Pledged Note
identified opposite the name of such Person.

“Pledged Notes” means all promissory notes of
any Pledged Note Issuer  which are
delivered by a Pledgor to the Agent as Pledged Property hereunder, as such
promissory notes, in accordance with Section 4.5, are amended, modified
or supplemented from time to time and together with any promissory note of any
Pledged Note Issuer taken in extension or renewal thereof or substitution
therefor.

“Pledged Property” means all Pledged Shares,
all Pledged Notes, all General Intangibles 
and all other pledged shares of capital stock, membership interests,
partnership interest, or promissory notes, all other securities, all
assignments of any amounts due or to become due, all other instruments which
are now being delivered by a Pledgor to the Agent or may from time to time
hereafter be delivered by a Pledgor to the Agent for the purpose of pledge
under this Pledge Agreement or any other Loan Document, and all proceeds of any
of the foregoing.

“Pledged Share Issuer” means each Person
identified in Part A of Schedule I 
hereto as the issuer of the Pledged Shares or General Intangibles
identified opposite the name of such Person.

“Pledged Shares” means all shares of capital
stock of any Pledged Share Issuer which are delivered by the Pledgor to the
Agent as Pledged Property hereunder.

“Pledgor” is defined in the preamble.

“Secured Obligations” is defined in Section
2.2.

“Securities Act” is defined in Section 6.1.

“U.C.C.” means the Uniform Commercial Code as
in effect in the State of Illinois.

SECTION 1.2         Credit Agreement Definitions.  Unless otherwise defined herein or the
context otherwise requires, terms used in this Pledge Agreement, including its
preamble and recitals, have the meanings provided in the Credit Agreement.

SECTION 1.3         U.C.C. Definitions.  Unless otherwise defined herein or the context
otherwise requires, terms for which meanings are provided in the U.C.C. are
used in this Pledge Agreement, including its preamble and recitals, with such
meanings.

ARTICLE II

PLEDGE

SECTION 2.1 Grant of
Security Interest.  Each Pledgor
hereby pledges, hypothecates, assigns, charges, mortgages, delivers, and
transfers to the Agent, for its benefit and the ratable benefit of each of the
Lender Parties, to the maximum extent permitted by and consistent with
applicable law, including, without limitation, Medicare Regulations and
Medicaid Regulations, 

and hereby grants to the Agent, for its benefit and
the ratable benefit of the Lender Parties, a continuing security interest in,
all of the following property (the “Collateral”):

(a)           all  Pledged Notes
issued from time to time;

(b)           all  Pledged Shares
issued from time to time;

(c)                                  all General
Intangibles;

(d)           all other Pledged Property, whether now or hereafter
delivered to the Agent in connection with this Pledge Agreement;

(e)           all Dividends, Distributions, interest, and other payments
and rights with respect to any Pledged Property; and

(f)            all proceeds of any of the foregoing.

SECTION 2.2         Security for Obligations.  This Pledge Agreement secures the
payment in full of all of each Pledgor’s obligations and liabilities now
existing or hereafter incurred under, arising out of or in connection with the
Guaranty in respect of all Obligations of the Borrower now or hereafter
existing under the Credit Agreement, the Notes and each other Loan Document to
which the Borrower is or may become a party, whether for principal, interest,
costs, fees, expenses, or otherwise, and all obligations of the applicable
Pledgor now or hereafter existing under this Pledge Agreement and each other
Loan Document to which it is or may become a party (all such obligations of the
Borrower and each Pledgor being the “Secured Obligations”).

SECTION 2.3         Delivery of Pledged Property.  All certificates or instruments representing
or evidencing any Collateral, including all Pledged Shares and all Pledged
Notes, shall be delivered to and held by or on behalf of (and, in the case of
the Pledged Notes, endorsed to the order of) the Agent pursuant hereto, shall
be in suitable form for transfer by delivery, and shall be accompanied by all
necessary instruments of transfer or assignment, duly executed in blank.  An acknowledgment of security interest in the
form of Schedule II hereto from each Pledged Entity the ownership
interests of which are uncertificated shall be delivered to the Agent
substantially concurrently with the execution and delivery hereof.

SECTION 2.4         Dividends; Payments
on  Pledged Notes.  In the
event that any Dividend is to be paid or any payment of principal or interest
is to be made on any Pledged Note at a time when  no Event of Default has occurred and is
continuing, such Dividend or payment may be paid directly to the relevant  Pledgor. 
If any such  Event of Default has
occurred and is continuing, then any such Dividend or payment shall be paid
directly to the Agent.

SECTION 2.5         Continuing Security Interest;
Transfer of Note.  This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall

(a)           remain in full force and effect until payment in full of
all Secured Obligations and the termination of all Revolving Commitments and
Letters of Credit,

(b)           be binding upon each 
Pledgor and its successors, transferees and assigns, and

(c)           inure, together with the rights and remedies of the Agent
hereunder, to the benefit of the Agent and each other Lender Party.

Without limiting the foregoing clause (c), any
Lender may assign or otherwise transfer (in whole or in part) any Note or Loan
held by it to any other Person or entity, and such other Person or entity shall
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Pledge
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 11.11 of the Credit
Agreement.  Upon the payment in full of
all Secured Obligations and the termination of all Revolving Commitments and
Letters of Credit , the security interest granted herein shall terminate and
all rights to the Collateral shall revert to the Pledgor.  Upon any such termination, the Agent will, at
the relevant Pledgor’s sole expense, deliver to the relevant  Pledgor, without any representations,
warranties or recourse of any kind whatsoever, all certificates and instruments
representing or evidencing all Pledged Shares and all Pledged Notes, together
with all other Collateral held by the Agent hereunder, and execute and deliver
to the relevant Pledgor such documents as the relevant Pledgor shall reasonably
request to evidence such termination.

SECTION 2.6         Security Interest Absolute.  All rights of the Agent and the security
interests granted to the Agent hereunder, and all obligations of each  Pledgor hereunder, shall be absolute and
unconditional, irrespective of

(a)           any lack of validity or enforceability of the Credit
Agreement, any Note or any other Loan Document,

(b)           the failure of any Lender Party or any holder of any Note

(i)            to assert any claim or demand or to enforce any right or
remedy against the Borrower, any other Credit Party or any other Person under
the provisions of the Credit Agreement, any Note, any other Loan Document or
otherwise, or

(ii)           to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of the Borrower,

(c)           any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations or any other extension,
compromise or renewal of any Obligation of the Borrower,

(d)           any reduction, limitation, impairment or termination of
any Obligations of the Borrower for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
each Pledgor hereby waives any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise, 

unenforceability
of, or any other event or occurrence affecting, any Obligations of the Borrower
or otherwise,

(e)           any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of the
Credit Agreement, any Note or any other Loan Document,

(f)            any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any amendment
to or waiver or release of or addition to or consent to departure from any
guaranty, for any of the Obligations, or

(g)           any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the Borrower, any
other Credit Party any surety or any guarantor.

SECTION 2.7         Subrogation,
etc.  No Pledgor will exercise any
rights which it may acquire by reason of any payment made hereunder, whether by
way of subrogation, reimbursement or otherwise, until the prior payment, in
full and in cash, of all Obligations of the Borrower.  Any amount paid to a Pledgor on account of
any payment made hereunder prior to the payment in full of all Obligations of
the Borrower shall be held in trust for the benefit of the Lender Parties and
each holder of a Note and shall immediately be paid to the Lender Parties and
each holder of a Note and credited and applied against the Obligations of the
Borrower, whether matured or unmatured, in accordance with the terms of the
Credit Agreement; provided, however, that if

(a)           the relevant Pledgor has made payment
to the Lender Parties and each holder of a Note of all or any part of the
Obligations of the Borrower, and

(b)           all Obligations of the Borrower have
been paid in full and all Revolving Commitments and Letters of Credit have been
permanently terminated,

each Lender Party and each holder of a Note agrees
that, at the relevant Pledgor’s request, the Lender Parties and the holders of
the Notes will execute and deliver to the relevant  Pledgor appropriate documents (without
recourse and without representation or warranty) necessary to evidence the
transfer by subrogation to the relevant Pledgor of an interest in the
Obligations of the Borrower resulting from such payment by the relevant
Pledgor.  In furtherance of the
foregoing, for so long as any Obligations or Revolving Commitments or Letters
of Credit  remain outstanding, each
Pledgor shall refrain from taking any action or commencing any proceeding
against the Borrower (or its successors or assigns, whether in connection with
a bankruptcy proceeding or otherwise) to recover any amounts in respect of
payments made under this Pledge Agreement to any Lender Party or any holder of
a Note.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1         Warranties, etc.  Each Pledgor represents and warrants unto
each Lender Party, as at the date of each pledge and delivery hereunder
(including each pledge and delivery of Pledged Shares and each pledge and
delivery of a Pledged Note) by such Pledgor to the Agent of any Collateral, as
set forth in this Article.

SECTION 3.1.1.  Ownership,
No Liens, etc.  Each Pledgor is the
legal and beneficial owner of, and has good and marketable title to (and
has full right and authority to pledge and assign) such Collateral, free and
clear of all liens, security interests, options, or other charges or
encumbrances, except any lien or security interest granted pursuant hereto in
favor of the Agent.  All of the Pledged
Shares are presently owned by the relevant Pledgor, and are presently represented
by the stock certificates listed on Part A of Schedule I hereto.  All of the General Intangibles are presently
owned by the relevant  Pledgor and are
presently uncertificated. As of the date hereof, there are no existing options,
warrants, calls or commitments of any character whatsoever relating to the
Pledged Shares or the General Intangibles. 
No General Intangible is subject to any defense, offset or counterclaim,
nor have any of the foregoing been asserted or alleged against a  Pledgor by any Person with respect
thereto.  There are no certificates,
instruments, documents or other writings (other than the relevant limited
liability company agreement or partnership 
agreement  delivered to the Agent
on the Closing Date) which evidence any General Intangible of a Pledgor.

SECTION 3.1.2.  Valid
Security Interest.  The delivery of
such Collateral to the Agent is effective to create a valid, perfected, first
priority security interest in such Collateral and all proceeds thereof,
securing the Secured Obligations.  Except
for the filing of any UCC financing statement with respect to General
Intangibles constituting Collateral, no filing or other action will be
necessary to perfect or protect such security interest.

SECTION 3.1.3.  As
to Pledged Shares.  In the case of
any Pledged Shares constituting such Collateral, all of such Pledged Shares are
duly authorized and validly issued, fully paid, and non-assessable, and
constitute all of the issued and outstanding shares of capital stock of each
Pledged Share Issuer.

SECTION 3.1.4.  As
to Pledged Notes.  In the case of
each Pledged Note, all of such Pledged Notes have been duly authorized,
executed, endorsed, issued and delivered, and are the legal, valid and binding
obligation of the issuers thereof, and are not in default.

SECTION 3.1.5.  Authorization,
Approval, etc.  No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either

(a)           for the pledge by either Pledgor of any Collateral
pursuant to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by such Pledgor, or

(b)           for the exercise by the Agent of the voting or other
rights provided for in this Pledge Agreement, or, except with respect to any
Pledged Shares, as may be required in connection with a disposition of such
Pledged Shares by laws affecting the offering and sale of securities generally.

 

ARTICLE IV

COVENANTS

SECTION 4.1         Protect Collateral; Further
Assurances, etc.  No Pledgor will
sell, assign, transfer, pledge, or encumber in any other manner the Collateral
(except in favor of the Agent hereunder). 
Each Pledgor will warrant and defend the right and title herein granted
unto the Agent in and to the Collateral (and all right, title, and interest
represented by the Collateral) against the claims and demands of all Persons
whomsoever.  Each Pledgor agrees that at
any time, and from time to time, at the expense of such Pledgor, such Pledgor
will promptly execute and deliver all further instruments, and take all further
action, that may be necessary or desirable, or that the Agent may reasonably
request, in order to perfect and protect any security interest granted or
purported to be granted hereby or to enable the Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral.

SECTION 4.2         Stock Powers, etc.  Each Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by
the Pledgor pursuant to this Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of
transfer acceptable to the Agent.  Each
Pledgor will, from time to time upon the request of the Agent, promptly deliver
to the Agent such stock powers, instruments, and similar documents,
satisfactory in form and substance to the Agent, with respect to the Collateral
as the Agent may reasonably request and will, from time to time upon the
request of the Agent after the occurrence of any Event of Default, promptly
transfer any Pledged Shares or other shares of common stock constituting
Collateral into the name of any nominee designated by the Agent.

SECTION 4.3         Continuous Pledge.  Subject to Section 2.4,  each Pledgor will, at all times, keep
pledged to the Agent pursuant hereto all General Intangibles and all other
membership interest and partnership interests constituting Collateral,  all Pledged Shares and all other shares of
capital stock constituting Collateral, all Dividends and Distributions, all
Pledged Notes, all interest, principal and other proceeds received by the Agent
with respect to the Pledged Notes, and all other Collateral and other securities,
instruments, proceeds, and rights from time to time received by or
distributable to the Pledgor in respect of any Collateral.  The Pledgor shall not permit any Pledged
Entity to declare any General Intangible to be classified as an uncertificated “security”
within the meaning of §8-103(c) of the UCC.

SECTION 4.4                          Voting
Rights; Dividends, etc.  The Pledgor
agrees:

(a)           after any Event of Default shall exist and be continuing,
promptly upon receipt thereof by the relevant 
Pledgor and without any request therefor by the Agent, to deliver
(properly endorsed where required hereby or requested by the Agent) to the
Agent all Dividends, Distributions, all interest, all principal, all other cash
payments, and all proceeds of the Collateral received by the Pledgor after such
Event of Default, all of which shall be held by the Agent as additional
Collateral for use in accordance with Section 6.3; and

(b)           after any Event of Default shall exist and be continuing
and the Agent has notified a Pledgor of the Agent’s intention to exercise its
voting power under this Section 4.4(b)

(i)            the Agent may exercise (to the exclusion of each  Pledgor) the voting power and all other
incidental rights of ownership with respect to any Pledged Shares or other
shares of capital stock constituting Collateral and General Intangibles or
other membership interest or partnership interests constituting Collateral and
each Pledgor hereby grants the Agent an irrevocable proxy, exercisable under
such circumstances, to vote the Pledged Shares, General Intangibles and such
other Collateral; and

(ii)           promptly to deliver to the Agent such additional proxies
and other documents as may be necessary to allow the Agent to exercise such
voting power.

All Dividends, Distributions, interest, principal,
cash payments, and proceeds which may at any time and from time to time be held
by a  Pledgor but which such Pledgor is
then obligated to deliver to the Agent, shall, until delivery to the Agent, be
held by such Pledgor separate and apart from its other property in trust for
the Agent.  The Agent agrees that unless
an Event of Default shall have occurred and be continuing and the Agent shall
have given the notice referred to in Section 4.4(b), each Pledgor shall
have the exclusive voting power with respect to any ownership interest  (including any General Intangible or any  of the Pledged Shares) constituting
Collateral and the Agent shall, upon the written request of a Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such  Pledgor which are
necessary to allow such Pledgor to exercise voting power with respect to any
ownership interest  (including any
General Intangible or any of the Pledged Shares) constituting Collateral; provided,
however, that no vote shall be cast, or consent, waiver, or ratification
given, or action taken by a Pledgor that would impair any Collateral or be
inconsistent with or violate any provision of the Credit Agreement or any other
Loan Document (including this Pledge Agreement).

SECTION 4.5         Additional Undertakings.  No Pledgor will,  without the prior written consent of the
Agent:

(a)           enter into any agreement amending, supplementing, or
waiving any provision of any Pledged Note (including any underlying instrument
pursuant to which such Pledged Note is issued) or compromising or releasing or
extending the time for payment of any obligation of the maker thereof; or

(b)           take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation of the
maker of any Pledged Note or other instrument constituting Collateral.

ARTICLE V

THE AGENT

SECTION 5.1         Agent Appointed Attorney-in-Fact.  Subject to any limits imposed under
applicable law, including, without limitation, Medicare Regulations and
Medicaid Regulations, each Pledgor hereby irrevocably appoints the Agent
such  Pledgor’s attorney-in-fact, with
full authority in the place and stead of such Pledgor and in the name of such
Pledgor or otherwise, from time to time in the Agent’s discretion, following
the occurrence and during the continuation of an Event of Default, to take any
action and to execute any instrument which the Agent may deem necessary or
advisable to accomplish the purposes of this Pledge Agreement, including without
limitation:

(a)           to ask, demand, collect, sue for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

(b)           to receive, endorse, and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) above; and

(c)           to file any claims or take any action or institute any
proceedings which the Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Agent with
respect to any of the Collateral.

Each  Pledgor
hereby acknowledges, consents and agrees that the power of attorney granted
pursuant to this Section is irrevocable and coupled with an interest.

SECTION 5.2         Agent May Perform.  If  a
Pledgor fails to perform any agreement contained herein, the Agent may itself
perform, or cause performance of, such agreement, and the reasonable expenses
of the Agent incurred in connection therewith shall be payable by such Pledgor
pursuant to Section 6.4.

SECTION 5.3         Agent Has No Duty.  The powers conferred on the Agent hereunder
are solely to protect its interest (on behalf of the Lender Parties) in the
Collateral and shall not impose any duty on it to exercise any such powers.  Except for reasonable care of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Agent shall have no duty as to any Collateral or responsibility
for (a) ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Pledged
Property, whether or not the Agent has or is deemed to have knowledge of such
matters, or (b) taking any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

SECTION 5.4         Reasonable Care.  The Agent is required to exercise reasonable
care in the custody and preservation of any of the Collateral in its
possession; provided, however, the Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as a  Pledgor reasonably requests in writing at
times other than upon the occurrence and during the continuance of any Event of
Default, but failure of the Agent to comply with any such request at any time
shall not in itself be deemed a failure to exercise reasonable care.

ARTICLE VI

REMEDIES

SECTION 6.1         Certain Remedies.  If any Event of Default shall have occurred
and be continuing:

(a)           The Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a secured party on default
under the U.C.C. (whether or not the U.C.C. applies to the affected Collateral)
and also may, without notice except as specified below, sell the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
the Agent’s offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Agent may deem commercially reasonable.  Each 
Pledgor agrees that, to the extent notice of sale shall be required by
law, at least ten days’ prior notice to a Pledgor of the time and place of any
public sale or the time after which any private sale is to be made shall
constitute reasonable notification.  The
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given.  The
Agent may adjourn any public or private sale from time to time by announcement
at the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.

(b)           The Agent, subject to any limits
imposed under applicable law, including, without limitation, Medicare
Regulations and Medicaid Regulations, may

(i)            transfer all or any part of the Collateral into the name
of the Agent or its nominee, with or without disclosing that such Collateral is
subject to the lien and security interest hereunder,

(ii)           notify the parties obligated on any of the Collateral to
make payment to the Agent of any amount due or to become due thereunder,

(iii)          enforce collection of any of the Collateral by suit
or otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer than the
original period) any obligations of any nature of any party with respect
thereto,

(iv)          endorse any checks, drafts, or other writings in a Pledgor’s
name to allow collection of the Collateral,

(v)           take control of any proceeds of the Collateral, and

(vi)          execute (in the name, place and stead of  a Pledgor) endorsements, assignments, stock
powers and other instruments of conveyance or transfer with respect to all or
any of the Collateral.

SECTION 6.2.  Securities
Laws.  If the Agent shall determine
to exercise its right to sell all or any of the Collateral pursuant to Section
6.1, each  Pledgor agrees that, upon
request of the Agent, such Pledgor will, at its own expense:

(a)           execute and deliver, and cause each
issuer of the Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things, as may be necessary or, in the
opinion of the Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as from time to time amended (the “Securities
Act”), and to cause the registration statement relating thereto to become
effective and to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and supplements thereto and
to the related prospectus which, in the opinion of the Agent, are necessary or
advisable, all in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission applicable
thereto;

(b)           use its best efforts to qualify the
Collateral under the state securities or “Blue Sky” laws and to obtain all
necessary governmental approvals for the sale of the Collateral, as requested
by the Agent;

(c)           cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will satisfy the
provisions of Section 11(a) of the Securities Act; and

(d)           do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part thereof valid
and binding and in compliance with applicable law.

Each  Pledgor
further acknowledges the impossibility of ascertaining the amount of damages
that would be suffered by the Agent or the Lender Parties by reason of the
failure by a Pledgor to perform any of the covenants contained in this Section
and, consequently, agrees that, if  a
Pledgor shall fail to perform any of such covenants, it shall pay, as
liquidated damages and not as a penalty, an amount equal to the value (as
determined by the Agent) of the Collateral on the date the Agent shall demand
compliance with this Section.

SECTION 6.3         Compliance
with Restrictions.  Each Pledgor
agrees that in any sale of any of the Collateral whenever an Event of Default
shall have occurred and be continuing, the Agent is hereby authorized to comply
with any limitation or restriction in connection with such sale as it may be
advised by counsel is necessary in order to avoid any violation of applicable
law (including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and purchasers
have certain qualifications, and restrict such prospective bidders and
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and  each Pledgor further agrees that
such compliance shall not result in such sale being considered or deemed not to
have been made in a commercially reasonable manner, nor shall the Agent be
liable nor accountable to either  Pledgor
for any discount allowed by the reason of the fact that such Collateral is sold
in compliance with any such limitation or restriction.

SECTION 6.4         Application
of Proceeds.  All cash proceeds
received by the Agent in respect of any sale of, collection from, or other
realization upon, all or any part of the Collateral may, in the discretion of
the Agent, be held by the Agent as additional collateral security for, or then
or at any time thereafter be applied (after payment of any amounts payable to
the Agent pursuant to  Section 6.4)
in whole or in part by the Agent against, all or any part of the Secured
Obligations in such order as the Agent shall elect.

Any surplus of such cash or cash proceeds held by the
Agent and remaining after payment in full of all the Secured Obligations, and
the termination of all Revolving Commitments and Letters of Credit, shall be
paid over to the relevant Pledgor or to whomsoever may be lawfully entitled to
receive such surplus.

SECTION 6.5         Indemnity
and Expenses.  Each Pledgor hereby
jointly and severally indemnifies and holds harmless the Agent from and against
any and all claims, losses, and liabilities arising out of or resulting from
this Pledge Agreement (including enforcement of this Pledge Agreement), except
claims, losses, or liabilities resulting from the Agent’s gross negligence or
wilful misconduct.  Upon demand, each
Pledgor will pay to the Agent the amount of any and all reasonable expenses,
including the reasonable fees and disbursements of its counsel and of any
experts and agents, which the Agent may incur in connection with:

(e)           the administration of this Pledge Agreement, the Credit
Agreement and each other Loan Document;

(f)            the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral;

(g)           the exercise or enforcement of any of the rights of the
Agent hereunder; or

(h)           the failure by a Pledgor to perform or observe any of the
provisions hereof.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1         Loan Document.  This Pledge Agreement is a  Loan Document executed pursuant to the Credit
Agreement and shall (unless otherwise expressly indicated herein) be construed,
administered and applied in accordance with the terms and provisions thereof.

SECTION 7.2         Amendments, etc.  No amendment to or waiver of any provision of
this Pledge Agreement nor consent to any departure by a  Pledgor here from shall in any event be
effective unless the same shall be in writing and signed by the Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it is given.

SECTION 7.3         Protection of Collateral.  The Agent may from time to time, at its
option, perform any act which each Pledgor agrees hereunder to perform and
which such  Pledgor shall 

fail to perform after being requested in writing so to
perform (it being understood that no such request need be given after the
occurrence and during the continuance of an Event of Default) and the Agent may
from time to time take any other action which the Agent reasonably deems
necessary for the maintenance, preservation or protection of any of the Collateral
or of its security interest therein.

SECTION 7.4         Addresses for Notices.  All notices and other communications provided
for hereunder shall be in writing (including telegraphic communication) and, if
to a Pledgor, mailed, transmitted  or
telegraphed or delivered to it at the address of such Pledgor specified in the
Guaranty, if to the Agent, mailed or delivered to it, addressed to it at the
address of the Agent specified in the Credit Agreement or, as to either party,
at such other address as shall be designated by such party in a written notice
to each other party complying as to delivery with the terms of this
Section.  All such notices and other
communications shall, when mailed, transmitted 
or telegraphed, respectively, be effective when deposited in the mails
or delivered to the telegraph company, respectively, addressed as aforesaid.

SECTION 7.5         Section Captions.  Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.

SECTION 7.6         Severability.  Wherever possible each provision of this
Pledge Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Pledge Agreement shall
be prohibited by or invalid under such law, such provision shall be ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Pledge
Agreement.

SECTION 7.7         Governing Law, Entire Agreement, etc.  THIS PLEDGE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE
STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE
SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY
PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE
STATE OF ILLINOIS.  THIS PLEDGE AGREEMENT
AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE
PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY
PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.

SECTION 7.8         Forum Selection and Consent to
Jurisdiction.   ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR EITHER PLEDGOR SHALL BE BROUGHT
AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR
OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT’S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH PLEDGOR HEREBY EXPRESSLY AND 

IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS
OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET
FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH SUCH LITIGATION.  EACH
PLEDGOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
ILLINOIS.  EACH  PLEDGOR HEREBY EXPRESSLY AND IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE
OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN
ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. 
TO THE EXTENT THAT A PLEDGOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH  PLEDGOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS PLEDGE AGREEMENT.

SECTION 7.9         Waiver of Jury Trial.  THE LENDER PARTIES AND EACH
PLEDGOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS PLEDGE AGREEMENT, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE LENDER PARTIES OR EITHER PLEDGOR.  EACH PLEDGOR ACKNOWLEDGES AND AGREES THAT IT
HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH
OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT
THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER PARTIES ENTERING INTO
THE CREDIT AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.

*       *         *

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

	
  

  	
   

  	
  NOVAMED MANAGEMENT OF KANSAS CITY, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  BLUE RIDGE NOVAMED, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY CENTER

  	
   

  
	
   

  	
   

  	
     (PLAZA) L.L.C.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY CENTER OF

  	
   

  
	
   

  	
   

  	
     OVERLAND PARK, L.L.C.

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY AND LASER

  	
   

  
	
   

  	
   

  	
     CENTER OF ST. JOSEPH, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYECARE SERVICES, LLC,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY CENTER OF

  	
   

  
	
   

  	
   

  	
     MARYVILLE, L.L.C.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY CENTER OF

  	
   

  
	
   

  	
   

  	
     NORTH COUNTY, LLC,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYE SURGERY CENTER OF   NEW

  	
   

  
	
   

  	
   

  	
     ALBANY, L.L.C.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED EYECARE RESEARCH, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED OF RICHMOND, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NMGK, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED OF 
  LOUISVILLE, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  MIDWEST UNCUTS, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NMSL INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NOVAMED OF 
  ST. LOUIS, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  PATIENT EDUCATION CONCEPTS, INC.,

  	
   

  
	
   

  	
   

  	
     as a Pledgor

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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  NATIONAL CITY BANK OF

  	
   

  
	
   

  	
   

  	
     MICHIGAN/ILLINOIS,

  	
   

  
	
   

  	
   

  	
     as Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
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SCHEDULE II

ACKNOWLEDGMENT OF SECURITY INTEREST

[NAME OF PLEDGED ENTITY] (the “Company”) hereby
acknowledges receipt of a copy of the assignment by ___________________, (the “Pledgor”)
of its interest under the [TITLE OF AGREEMENT] (the “Agreement”) pursuant to
the terms of the Guarantor Pledge 
Agreement, dated as of June ___, 2000, (the “Pledge Agreement”), among
the Pledgor, certain Affiliates of the Pledgor and National City Bank of
Michigan/Illinois,  as Agent.

The undersigned hereby further confirms the
registration of the Pledgor’s pledge of its interest in the Company to the
Agent on the Company’s books.

The Company agrees that at any time prior to the
Termination Date (as defined in the Pledge Agreement), it will not take or
approve any action in furtherance of deeming the interests of the Company to be
an uncertificated  “security” within the
meaning of § 8-103(c) of the UCC (as defined in the Pledge
Agreement) and that its membership or partnership interest shall at all times
be general intangibles under the UCC.

	
  Dated:                                                  

  	
  [NAME OF PLEDGED ENTITY]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  

  	
   

  	
   

  	
   

  
	
   

  	
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  Name:

  	
   

  	
   

  

 

	
  

  	
   

  	
   

  	
   

  
	
   

  	
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EXHIBIT
G-1

Form of Borrower Security Agreement

FORM OF BORROWER SECURITY AGREEMENT

THIS
SECURITY AGREEMENT (this “Security Agreement”), dated as of June ___,
2000, made by NOVAMED EYECARE, INC., a Delaware corporation (the “Grantor”),
in favor of NATIONAL CITY BANK OF MICHIGAN/ILLINOIS, as Agent (together with
any successor(s) thereto in such capacity, the “Agent”) for each of the
Lender Parties (as defined below).

W  I  T  N  E
S  S  E  T  H

WHEREAS,
pursuant to a Credit Agreement, dated as of June ___, 2000 (together with all
amendments, restatements and other modifications, if any, from time to time
thereafter made thereto, the “Credit Agreement”), among the Grantor, the
various commercial lending institutions (individually a “Lender” and
collectively the “Lenders”) as are, or may from time to time become,
parties thereto and the Agent, the Lenders have extended Revolving Commitments
to make Loans to, and agreed to participate in Letters of Credit issued for the
account of, the Grantor; and

WHEREAS,
as a condition precedent to the making of the initial Loans, and issuance of
the initial Letter of Credit, under the Credit Agreement, the Grantor is
required to execute and deliver this Security Agreement; and

WHEREAS,
the Grantor has duly authorized the execution, delivery and performance of this
Security Agreement;

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order t induce the Lenders to make Loans
(including the initial Loans) to, and participate in Letters of Credit issued
for the account of, the Grantor pursuant to the Credit Agreement, the Grantor
agrees, for the benefit of each Lender Party, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1         Certain
Terms.  The following terms (whether
or not underscored) when used in this Security Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to
be equally applicable to the singular and plural forms thereof):

“Agent” is defined in the preamble.

“Collateral” is defined in Section 2.1.

“Collateral Account” is defined in Section
4.1.2(b).

“Computer Hardware and Software Collateral”
means:

(a)           all computer and other electronic
data processing hardware, integrated computer systems, central processing
units, memory units, display terminals, printers, features, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral devices
and other related computer hardware;

(b)           all software programs (including both
source code, object code and all related applications and data files), whether
now owned, licensed or leased or hereafter acquired by the Grantor, designed
for use on the computers and electronic data processing hardware described in clause
(a) above;

(c)           all firmware associated therewith;

(d)           all documentation (including flow
charts, logic diagrams, manuals, guides and specifications) with respect to
such hardware, software and firmware described in the preceding clauses  (a)
through (c); and

(e)           all rights with respect to all of the
foregoing, including, without limitation, any and all copyrights, licenses,
options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or model
conversions of any of the foregoing.

“Contract Right”  means any right of the Grantor  to payment under a contract for the sale or
lease of goods or the rendering of services, which right is at the time not yet
earned by performance.

“Copyright Collateral” means all copyrights and
all semi-conductor chip product mask works of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout
the world including, without limitation, all of the Grantor’s right, title and
interest in and to all copyrights and mask works registered in the United
States Copyright Office or anywhere else in the world and also including,
without limitation, the copyrights and mask works referred to in Item A
of Schedule IV attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright and mask work
licenses, including each copyright and mask work license referred to in Item
B of Schedule IV attached hereto, the right to sue for past, present
and future infringements of any thereof, all rights corresponding thereto
throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages and proceeds of suit.

“Credit Agreement” is defined in the first
recital.

“Equipment” is defined in clause (a) of Section
2.1.

 

“Grantor” is defined in the preamble.

“Intellectual Property Collateral” means,
collectively, the Computer Hardware and Software Collateral, the Copyright
Collateral, the Patent Collateral, the Trademark Collateral and the Trade
Secrets Collateral.

“Inventory” is defined in clause (b) of Section
2.1

“Lender” is defined in the first recital.

“Lender Party” means, as the context may
require, any Lender or the Agent and each of its permitted respective
successors, transferees and assigns.

“Lenders” is defined in the first recital.

“Patent Collateral” means:

(a)           all letters patent and applications
for letters patent throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each patent and
patent application referred to in Item A of Schedule II attached
hereto;

(b)           all patent licenses, including each
patent license referred to in Item B of Schedule II attached
hereto;

(c)           all reissues, divisions,
continuations, continuations-in-part, extensions, renewals and reexaminations
of any of the items described in clauses (a) and (b); and

(d)           all proceeds of, and rights
associated with, the foregoing (including license royalties and proceeds of
infringement suits), the right to sue third parties for past, present or future
infringements of any patent or patent application, including any patent or
patent application referred to in Item A of Schedule II attached
hereto, and for breach or enforcement of any patent license, including any
patent license referred to in Item B of Schedule II attached
hereto, and all rights corresponding thereto throughout the world.

“Receivables” is defined in clause (c)
of Section 2.1.

“Related Contracts” is defined in clause (c)
of Section 2.1.

“Secured Obligations” is defined in Section 2.2.

“Security Agreement” is defined in the preamble.

“Trademark Collateral” means:

(a)           all trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, certification marks, collective marks, logos,
other source of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of a like

nature (all of the
foregoing items in this clause (a) being collectively called a “Trademark”),
now existing anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and all
applications in connection therewith, whether pending or in preparation for
filing, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any foreign country, including those
referred to in Item A of Schedule III attached hereto;

(b)           all Trademark licenses, including
each Trademark license referred to in Item B of Schedule III
attached hereto;

(c)           all reissues, extensions or renewals
of any of the items described in clauses (a) and (b);

(d)           all of the goodwill of the business connected
with the use of, and symbolized by the items described in, clauses (a)
and (b); and

(e)           all proceeds of, and rights
associated with, the foregoing, including any claim by the Grantor against
third parties for past, present or future infringement or dilution of any
Trademark, Trademark registration or Trademark license, including any
Trademark, Trademark registration or Trademark license referred to in Item A
and Item B of Schedule III attached hereto, or for any injury to
the goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.

“Trade Secrets Collateral” means common law and
statutory trade secrets and all other confidential or proprietary or useful
information and all know-how obtained by or used in or contemplated at any time
for use in the business of the Grantor (all of the foregoing being collectively
called a “Trade Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating or referring in any way to such Trade Secret, all
Trade Secret licenses, including each Trade Secret license referred to in Schedule
V attached hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.

“U.C.C.” means the Uniform Commercial Code, as
in effect in the State of Illinois.

SECTION 1.2         Credit
Agreement Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Security Agreement, including its preamble and recitals, have the meanings
provided in the Credit Agreement.

SECTION 1.3         U.C.C.
Definitions.  Unless otherwise defined
herein or the context otherwise requires, terms for which meanings are provided
in the U.C.C. are used in this Security Agreement, including its preamble and
recitals, with such meanings.

 

ARTICLE II

SECURITY INTEREST

SECTION 2.1         Grant
of Security.  The Grantor hereby
assigns and pledges to the Agent for its benefit and the ratable benefit of
each of the Lender Parties, to the maximum extent permitted by and consistent
with applicable law, including, without limitation, Medicare Regulations and
Medicaid Regulations, and hereby grants to the Agent for its benefit and the
ratable benefit of each of the Lender Parties a security interest in, all of
the following, whether now or hereafter existing or acquired, to the maximum
extent permitted by and consistent with applicable law, including, without
limitation, Medicare Regulations (the “Collateral”):

(a)           all equipment in all of its forms of
the Grantor, wherever located,  and all
parts thereof and all accessions, additions, attachments, improvements,
substitutions and replacements thereto and therefor (any and all of the
foregoing being the “Equipment”);

(b)           all inventory in all of its forms of
the Grantor, wherever located, including

(i)            all raw materials and work in
process therefor, finished goods thereof, and materials used or consumed in the
manufacture or production thereof,

(ii)           all goods in which the Grantor has an
interest in mass or a joint or other interest or right of any kind (including
goods in which the Grantor has an interest or right as consignee and Contract
Rights), and

(iii)          all goods which are returned to or
repossessed by the Grantor,

and all accessions thereto, products thereof and
documents therefor (any and all such inventory, materials, goods, accessions,
products and documents being the “Inventory”);

(c)           all accounts, monies, contracts,
Contract Rights, chattel paper, documents, instruments, and general intangibles
of the Grantor, whether or not arising out of or in connection with the sale or
lease of goods or the rendering of services, and all rights of the Grantor now
or hereafter existing in and to all security agreements, guaranties, leases and
other contracts securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general intangibles
(any and all such accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles being the “Receivables”,
and any and all such security agreements, guaranties, leases and other
contracts being the “Related Contracts”);

(d)           all Intellectual Property Collateral
of the Grantor;

(e)           all books, records, writings, data
bases, information and other property relating to, used or useful in connection
with, evidencing, embodying, incorporating or referring to, any of the
foregoing in this Section 2.1;

(f)            all of the Grantor’s other property
and rights of every kind and description and interests therein; and

(g)           all products, offspring, rents,
issues, profits, returns, income and proceeds of and from any and all of the
foregoing Collateral (including proceeds which constitute property of the types
described in clauses (a), (b), (c), (d), (e)
and (f), proceeds deposited 

from time to time in the
Collateral Account and in any deposit account of the Grantor, and, to the
extent not otherwise included, all payments under insurance (whether or not the
Agent is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).

Notwithstanding the foregoing, “Collateral” shall not
include any general intangibles or other rights arising under contracts as to
which the grant of a security interest would constitute a violation of a valid
and enforceable restriction on such grant, unless and until any required notice
and/or consents shall have been filed and/or obtained.  The Grantor agrees to use its best efforts to
obtain any such required consent.

SECTION 2.2         Security
for Obligations.  This Security
Agreement secures the payment of all Secured Obligations of the Grantor now or
hereafter existing under the Credit Agreement, the Notes, the Letters of
Credit  and each other Loan Document to
which the Grantor is or may become a party, whether for principal, interest,
costs, fees, expenses or otherwise, and all obligations of the Grantor now or
hereafter existing under this Security Agreement and each other Loan Document
to which it is or may become a party (all such obligations of the Grantor being
the “Secured Obligations”) .

SECTION 2.3         Continuing
Security Interest; Transfer of Notes. 
This Security Agreement shall create a continuing security interest in
the Collateral and shall

(a)           remain in full force and effect until
payment in full of all Secured Obligations and the termination of all Revolving
Commitments and all Letters of Credit,

(b)           be binding upon the Grantor, its
successors, transferees and assigns, and

(c)           inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent and each other
Lender Party.

Without limiting the generality of the foregoing clause
(c), any Lender may assign or otherwise transfer (in whole or in part) any
Note or Loan held by it to any other Person or entity, and such other Person or
entity shall thereupon become vested with all the rights and benefits in
respect thereof granted to such Lender under any Loan Document (including this
Security Agreement) or otherwise, subject, however, to any contrary provisions
in such assignment or transfer, and to the provisions of Section 11.11 of the
Credit Agreement.  Upon the payment in
full of all Secured Obligations and the termination of all Revolving
Commitments and all Letters of Credit, the security interest granted herein
shall terminate and all rights to the Collateral shall revert to the
Grantor.  Upon any such termination, the
Agent will, at the Grantor’s sole expense, execute and deliver to the Grantor
such documents as the Grantor shall reasonably request to evidence such
termination.

SECTION 2.4         Grantor
Remains Liable.  Anything herein to
the contrary notwithstanding

(a)           the Grantor shall remain liable under
the contracts and agreements included in the Collateral to the extent set forth
therein, and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security Agreement had
not been executed,

 

(b)           the exercise by the Agent of any of
its rights hereunder shall not release the Grantor from any of its duties or
obligations under any such contracts or agreements included in the Collateral,
and

(c)           neither the Agent nor any other
Lender Party shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security Agreement, nor
shall the Agent or any other Lender Party be obligated to perform any of the
obligations or duties of the Grantor thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder, except to the
extent the Agent or such Lender Party, as applicable, shall have succeeded to
the rights and obligations of the Grantor pursuant to the exercise of remedies
under the Loan Documents.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1         Representations
and Warranties.  The Grantor
represents and warrants unto each Lender Party as set forth in this Article.

SECTION 3.1.1.  Location
of Collateral, etc.  All of the
Equipment, Inventory and lock boxes of the Grantor are located at the places
specified in Item A, Item B and Item C, respectively, of Schedule I
hereto.  None of the Equipment and
Inventory has, within the four months preceding the date of this Security
Agreement, been located at any place other than the places specified in Item
A and Item B, respectively, of Schedule I hereto.  The place(s) of business and chief executive
office of the Grantor and the office(s) where the Grantor keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidence Receivables, are located at the places specified in Item D of Schedule
I hereto.  The Grantor  has no trade name.  The Grantor has not been known by any legal
name different from the one set forth on the signature page hereto, nor has the
Grantor been the subject of any merger or other corporate reorganization,
except as described on Schedule VI.  None
of the Receivables is evidenced by a promissory note or other instrument not
pledged to Agent.  The Grantor is not a
party to any Federal, state or local government contract except as described on
Schedule VII.

SECTION 3.1.2.  Ownership,
No Liens, etc.  The Grantor owns the
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
as permitted by the Credit Agreement.  No
effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in favor of the Agent relating to this Security
Agreement or as may be permitted pursuant to the Credit Agreement with respect
to Permitted Liens.

SECTION 3.1.3.  Possession
and Control.  Except as contemplated
by the applicable Service Agreement, the Grantor has exclusive possession and
control of the Equipment and Inventory.

SECTION 3.1.4.  Negotiable
Documents, Instruments and Chattel Paper. 
The Grantor, to the extent permitted by applicable law, including,
without limitation, Medicare Regulations and 

Medicaid Regulations,
has, contemporaneously herewith, delivered to the Agent possession of all
originals of all negotiable documents, instruments and chattel paper currently
owned or held by the Grantor (duly endorsed in blank, if requested by the
Agent).

SECTION 3.1.5.  Intellectual
Property Collateral.  With respect to
any Intellectual Property Collateral the loss, impairment or infringement of
which reasonably would be expected to have a Material Adverse Effect:

(a)           such Intellectual Property Collateral
is subsisting and has not been adjudged invalid or unenforceable, in whole or
in part;

(b)           such Intellectual Property Collateral
is valid and enforceable;

(c)           the Grantor has made all necessary
filings and recordations to protect its interest in such Intellectual Property
Collateral, including, without limitation, recordations of all of its interests
in the Patent Collateral and Trademark Collateral in the United States Patent
and Trademark Office and in corresponding offices throughout the world and its
claims to the Copyright Collateral in the United States Copyright Office and in
corresponding offices throughout the world;

(d)           the Grantor is the exclusive owner of
the entire and unencumbered right, title and interest in and to such
Intellectual Property Collateral and no notice has been received by the Grantor
that the use of such Intellectual Property Collateral does or may violate the
asserted rights of any third party; and

(e)           the Grantor has performed and will
continue to perform all acts and has paid and will continue to pay all required
fees and taxes to maintain each and every item of Intellectual Property
Collateral in full force and effect throughout the world, as applicable, except
with respect to the rights of the Grantor in any such  item of Intellectual Property Collateral that
should be allowed to lapse in the reasonable business judgment of the Grantor.

The Grantor owns directly or is entitled to use by
license or otherwise, all patents, Trademarks, Trade Secrets, copyrights, mask
works, licenses, technology, know-how, processes and rights with respect to any
of the foregoing used in, necessary for or of importance to the conduct of the
Grantor’s business.

SECTION 3.1.6.  Validity,
etc.  This Security Agreement creates
a valid first priority security interest in the Collateral, securing the
payment of the Secured Obligations, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been duly
taken.

SECTION 3.1.7.  Authorization,
Approval, etc.  No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either

(a)           for the grant by the Grantor of the
security interest granted hereby or for the execution, delivery and performance
of this Security Agreement by the Grantor, or

 

(b)           for the perfection of or the exercise
by the Agent of its rights and remedies hereunder, except such filings with
state and Federal offices which may be required under applicable law.

SECTION 3.1.8.  Compliance
with Laws.  The Grantor is in
compliance with the requirements of all applicable laws (including, without
limitation, the provisions of the Fair Labor Standards Act), rules, regulations
and orders of every governmental authority, the non-compliance with which
reasonably would be expected to have a Material Adverse Affect.

ARTICLE IV

COVENANTS

SECTION 4.1         Certain
Covenants.  The Grantor covenants and
agrees that, so long as any portion of the Secured Obligations shall remain
unpaid or any Lender shall have any outstanding Commitment or any Letter of
Credit Obligation remains outstanding, the Grantor will, unless the Required
Lenders shall otherwise consent in writing, perform the obligations set forth
in this Section.

SECTION 4.1.1  As
to Equipment and Inventory.  The
Grantor hereby agrees that it shall

(a)           keep all the Equipment and Inventory
(other than Inventory sold in the ordinary course of business) at the places
therefor specified in Section 3.1.1 or, upon 30 days’ prior written
notice to the Agent, at such other places in a jurisdiction where all
representations and warranties set forth in Article III (including Section
3.1.1) shall be true and correct, and all action required pursuant to the first
sentence of Section 4.1.7 shall have been taken with respect to the
Equipment and Inventory;

(b)           cause the Equipment to be maintained
and preserved in the same condition, repair and working order as when new
or acquired, ordinary wear and tear excepted, and in accordance with any
manufacturer’s manual; and forthwith, or in the case of any loss or damage to
any of the Equipment, as quickly as practicable after the occurrence thereof,
but subject to the terms and conditions of the applicable Service Agreement,
make or cause to be made all repairs, replacements, and other improvements in
connection therewith which are necessary or desirable to such end, provided
such Equipment, in the reasonable business judgment of the Grantor, still is
required for the operation of the business of the Grantor, and promptly furnish
to the Agent a statement respecting any loss or damage to any of the Equipment
which is an amount greater than $25,000 not otherwise covered by insurance; and

(c)           pay promptly when due all property
and other taxes, assessments and governmental charges or levies imposed upon,
and all claims (including claims for labor, materials and supplies) against,
the Equipment and Inventory, except to the extent the validity thereof is being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside.

SECTION 4.1.2 
As to Receivables.

(a)           The Grantor shall keep its place(s)
of business and chief executive office and the office(s) where it keeps its
records concerning the Receivables, and all originals of all chattel paper
which evidenced Receivables, located at the locations listed in Item D
on Schedule I hereto, or, upon 30 days’ prior written notice to the
Agent, at such other locations in a jurisdiction where all actions required by
the first sentence of Section 4.1.7 shall have been taken with
respect to the Receivables; not change its name except upon 30 days’ prior
written notice to the Agent; hold and preserve such records and chattel paper;
and permit representatives of the Agent at any time during normal business
hours to inspect and make abstracts from such records and chattel paper, all in
accordance with and subject to the provisions of Section 7.1.5 of the
Credit Agreement.

(b)           Upon written notice by the Agent to
the Grantor pursuant to this Section 4.1.2(b), all proceeds of
Collateral received by the Grantor shall be delivered in kind to the Agent for
deposit to a deposit account (the “Collateral Account”) of the Grantor
maintained with the Agent, and the Grantor shall not commingle any such
proceeds, and shall hold separate and apart from all other property, all such
proceeds in express trust for the benefit of the Agent until delivery thereof
is made to the Agent.  The Agent will not
give the notice referred to in the preceding sentence unless there shall have
occurred and be continuing an Event of 
Default.  No funds, other than
proceeds of Collateral, will be deposited in the Collateral Account.

(c)           The Agent shall have the right to
apply any amount in the Collateral Account to the payment of any Secured
Obligations which are due and payable or payable upon demand, or to the payment
of any  Secured Obligations at any time
that an Event of Default shall exist. 
Subject to the rights of the Agent, the Grantor shall have the right,
with respect to and to the extent of collected funds in the Collateral Account,
(i) as long as there shall be no Default, to require the Agent to transfer to
the Grantor’s general demand deposit account at the Agent any or all of such
collected funds and (ii) as long as there shall be an Event of Default which
exists and is continuing and after giving effect to any exercise by the Agent
of its rights, (A) to require the Agent to transfer to the Grantor’s general
demand deposit account at the Agent amounts required to cover checks drawn
against that account which shall have been presented for payment at the Agent
as of the preceding business day and all wire transfers which the Grantor has
directed to be made on the current business day, to the extent such checks and
wire transfers are for any purpose which does not violate any provision of any
Loan Document and (B) to require the Agent to purchase any Cash Equivalent
Investment, provided that, in the case of certificated securities, the Agent
will retain possession thereof as Collateral and, in the case of uncertificated
securities, the Agent will take such actions, including registration of such
securities in its name, as it shall determine is necessary to perfect its
security interest therein.  The Agent may
at any time transfer to the Grantor’s general demand deposit account at the
Agent any or all of the collected funds in the Collateral Account; provided,
however, that any such transfer shall not be deemed to be a waiver or
modification of any of the Agent’s rights under this Section 4.1.2(c).

 

SECTION 4.1.3 
As to Collateral.

(a)           Until such time as the Agent shall
notify the Grantor of the revocation of such power and authority the
Grantor (i) may in the ordinary course of its business, at its own expense,
sell, lease or furnish under the contracts of service any of the Inventory
normally held by the Grantor for such purpose, and use and consume, in the
ordinary course of its business, any raw materials, work in process or
materials normally held by the Grantor for such purpose, (ii) will, at its own
expense, endeavor to collect, as and when due, all amounts due with respect to
any of the Collateral, including the taking of such action with respect to such
collection as the Agent may reasonably request or, in the absence of such
request, as the Grantor may deem advisable, and (iii) may grant, in the
ordinary course of business, to any party obligated on any of the Collateral,
any rebate, refund or allowance to which such party may be lawfully entitled,
and may accept, in connection therewith, the return of goods, the sale or lease
of which shall have given rise to such Collateral.  The Agent, however, may, upon the occurrence
and during the continuation of an Event of Default, notify any parties
obligated on any of the Collateral to make payment to the Agent of any amounts
due or to become due thereunder and enforce collection of any of the Collateral
by suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness thereunder or evidenced
thereby.  Upon request of the Agent, the
Grantor will, at its own expense, notify any parties obligated on any of the
Collateral to make payment to the Agent of any amounts due or to become due
thereunder.

(b)           The Agent is authorized to endorse,
in the name of the Grantor, any item, howsoever received by the Agent,
representing any payment on or other proceeds of any of the Collateral.

SECTION 4.1.4 
As to Intellectual Property Collateral

(a)           The Grantor shall not, unless the
Grantor shall either (i) reasonably and in good faith determine (and notice of
such determination shall have been delivered to the Agent) that any of the
Patent Collateral is of negligible economic value to the Grantor, or (ii) have
a valid business purpose to do otherwise, do any act, or omit to do any act,
whereby any of the Patent Collateral may lapse or become abandoned or dedicated
to the public or unenforceable.

(b)           The Grantor shall not, and the
Grantor shall not permit any of its licensees to, unless the Grantor shall
either (i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Agent) that any of the Trademark
Collateral is of negligible economic value to the Grantor, or (ii) have a valid
business purpose to do otherwise,

(A)          fail to continue to use any of the
Trademark Collateral in order to maintain all of the Trademark Collateral in
full force free from any claim of abandonment for non-use,

 

(B)           fail to maintain as in the past the
quality of products and services offered under all of the Trademark Collateral,

(C)           fail to employ all of the Trademark
Collateral registered with any Federal or state or foreign authority with an
appropriate notice of such registration,

(D)          adopt or use any other Trademark which
is confusingly similar or a colorable imitation of any of the Trademark
Collateral,

(E)           use any of the Trademark Collateral
registered with any Federal or state or foreign authority except for the uses
for which registration or application for registration of all of the Trademark
Collateral has been made, and

(F)           do or permit any act or knowingly
omit to do any act whereby any of the Trademark Collateral may lapse or become
invalid or unenforceable.

(c)           The Grantor shall not, unless the
Grantor shall either (i) reasonably and in good faith determine (and notice of
such determination shall have been delivered to the Agent) that any of the
Copyright Collateral or any of the Trade Secrets Collateral is of negligible
economic value to the Grantor, or (ii) have a valid business purpose to do
otherwise, do or permit any act or knowingly omit to do any act whereby any of
the Copyright Collateral or any of the Trade Secrets Collateral may lapse or
become invalid or unenforceable or placed in the public domain except upon
expiration of the end of an unrenewable term of a registration thereof.

(d)           The Grantor shall notify the Agent
immediately if it knows, or has reason to know, that any application or
registration relating to any material item of the Intellectual Property
Collateral reasonably would be expected to become abandoned or dedicated to the
public or placed in the public domain or invalid or unenforceable, or of any
adverse determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any foreign counterpart
thereof or any court) regarding the Grantor’s ownership of any of the
Intellectual Property Collateral, its right to register the same or to keep and
maintain and enforce the same.

(e)           In no event shall the Grantor or any
of its agents, employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United States
Patent and Trademark Office, the United States Copyright Office or any similar
office or agency in any other country or any political subdivision thereof,
unless it promptly informs the Agent, and upon request of the Agent, executes
and delivers any and all agreements, instruments, documents and papers as the
Agent may reasonably request to evidence the Agent’s security interest in such
Intellectual Property Collateral and the goodwill and general intangibles of
the Grantor relating thereto or represented thereby.

(f)            The Grantor shall take all necessary
steps, including in any proceeding before the United States Patent and
Trademark Office, the United States Copyright Office 

or any similar office or
agency in any other country or any political subdivision thereof, to maintain
and pursue any application (and to obtain the relevant registration) filed with
respect to, and to maintain any registration of, the Intellectual Property
Collateral, including the filing of applications for renewal, affidavits of
use, affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to the
extent that dedication, abandonment or invalidation is permitted under the foregoing
clauses (a), (b) and (c)).

(g)           The Grantor shall, contemporaneously
herewith, execute and deliver to the Agent an Agreement (Patent), an Agreement
(Trademark) and an Agreement (Copyright) in the forms of Exhibit A, Exhibit
B and Exhibit C hereto, respectively, and shall execute and deliver
to the Agent any other document required to acknowledge or register or perfect
the Agent’s interest in any part of the Intellectual Property Collateral.

SECTION 4.1.5  Insurance.  The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to the
Equipment and Inventory against such casualties and contingencies and of such
types and in such amounts as is customary in the case of similar businesses and
will, upon the request of the Agent, furnish a certificate of a reputable
insurance broker setting forth the nature and extent of all insurance
maintained by the Grantor in accordance with this Section; provided, however,
that for so long as no Event of Default shall exist and be continuing, the
Agent shall not request any such certificate more than one time in any Fiscal
Year.  Without limiting the foregoing,
the Grantor further agrees as follows:

(a)           Each policy for property insurance
shall show the Agent as loss payee.

(b)           Each policy for liability insurance
shall show the Agent as an additional insured.

(c)           With respect to each life insurance
policy, the Grantor shall execute and deliver to the Agent a collateral
assignment, notice of which has been acknowledged in writing by the insurer.

(d)           Each insurance policy shall provide
that at least 30 days’ prior written notice of cancellation or of lapse shall
be given to the Agent by the insurer.

(e)           The Grantor shall, if so requested by
the Agent, deliver to the Agent a copy of each insurance policy.

(f)            All payments in respect of property
insurance and life insurance shall be deposited to the Collateral Account and
if there shall be no Collateral Account shall be paid to the Grantor; provided,
however that, with respect to property insurance only, payments in respect
thereof shall be paid to the Grantor if (i) the amount thereof is less than or
equal to $25,000 and (ii) no Event of Default exists or is continuing at the
time of payment thereof.

 

SECTION 4.1.6 
Transfers and Other Liens.  The
Grantor shall not:

(a)           sell, assign (by operation of law or
otherwise) or otherwise dispose of any of the Collateral, except Inventory in
the ordinary course of business or as permitted by the Credit Agreement; or

(b)           create or suffer to exist any Lien or
other charge or encumbrance upon or with respect to any of the Collateral to
secure Indebtedness of any Person or entity, except for the security interest
created by this Security Agreement and except as permitted by the Credit Agreement.

SECTION 4.1.7  Further
Assurances, etc.  The Grantor agrees
that, from time to time at its own expense, the Grantor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, the Grantor will:

(a)           mark conspicuously each chattel paper
included in the Receivables and each Related Contract and, at the reasonable
request of the Agent, each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Agent, indicating that such
document, chattel paper, Related Contract or Collateral is subject to the
security interest granted hereby;

(b)           if any Receivable shall be evidenced
by a promissory note or other instrument, 
negotiable document or chattel paper, deliver and pledge to the Agent
hereunder such promissory note, instrument, negotiable document or chattel
paper duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to the Agent;

(c)           execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices  (including, without limitation,
any assignment of claim form under or pursuant to the federal assignment of
claims statute, 31 U.S.C. § 3726, any successor or amended version thereof or
any regulation promulgated under or pursuant to any version thereof), as may be
necessary or desirable, or as the Agent may request, in order to perfect and
preserve the security interests and other rights granted or purported to be
granted to the Agent hereby; and

(d)           furnish to the Agent, from time to
time at the Agent’s request, statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.

With respect to the foregoing and the grant of the
security interest hereunder, the Grantor hereby authorizes the Agent to file one
or more financing or continuation statements, and amendments thereto, relative
to all or any part of the Collateral without the signature of the Grantor where
permitted by law.  A carbon, photographic
or other reproduction of this Security Agreement or 

any financing statement covering the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.

ARTICLE V

THE AGENT

SECTION 5.1         Agent
Appointed Attorney-in-Fact.  Subject
to any limits imposed under applicable law, including, without limitation,
Medicare Regulations and Medicaid Regulations, the Grantor hereby irrevocably
appoints the Agent the Grantor’s attorney-in-fact, with full authority in the
place and stead of the Grantor and in the name of the Grantor or otherwise,
from time to time in the Agent’s discretion upon the occurrence and during the
continuation of an Event of Default, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation:

(a)           to ask, demand, collect, sue for,
recover, compromise, receive and give acquittance and receipts for moneys due
and to become due under or in respect of any of the Collateral;

(b)           to receive, endorse, and collect any
drafts or other instruments, documents and chattel paper, in connection with clause
(a) above;

(c)           to file any claims or take any action
or institute any proceedings which the Agent may deem necessary or desirable
for the collection of any of the Collateral or otherwise to enforce the rights
of the Agent with respect to any of the Collateral; and

(d)           to perform the affirmative
obligations of the Grantor hereunder (including all obligations of the Grantor
pursuant to Section 4.1.7).

The Grantor hereby acknowledges, consents and agrees
that the power of attorney granted pursuant to this Section is irrevocable and
coupled with an interest.

SECTION 5.2         Agent
May Perform.  If the Grantor fails to
perform any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the Grantor pursuant to Section 6.2.

SECTION 5.3         Agent
Has No Duty.  In addition to, and not
in limitation of, Section 2.4, the powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers.  Except for reasonable care of
any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall have no duty as to any Collateral or
as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

SECTION 5.4         Reasonable
Care.  The Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Agent 

shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Grantor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Agent to comply with
any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.

ARTICLE VI

REMEDIES

SECTION 6.1         Certain
Remedies.  If any Event of Default
shall have occurred and be continuing:

(a)           The Agent may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party on
default under the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may (i) require the Grantor to, and the Grantor hereby
agrees that it will, at its expense and upon request of the Agent forthwith,
assemble all or part of the Collateral as directed by the Agent and make it
available to the Agent at a place to be designated by the Agent which is
reasonably convenient to both parties and (ii) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Agent’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Agent
may deem commercially reasonable.  The
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ prior notice to the Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification.  The Agent shall
not be obligated to make any sale of Collateral regardless of notice of sale
having been given.  The Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned.

(b)           All cash proceeds received by the
Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the Agent, be
held by the Agent as collateral for, and/or then or at any time thereafter
applied (after payment of any amounts payable to the Agent pursuant to Section
6.2) in whole or in part by the Agent for the ratable benefit of the Lender
Parties against, all or any part of the Secured Obligations in such order as
the Agent shall elect.  Any surplus of
such cash or cash proceeds held by the Agent and remaining after payment in
full of all the Secured Obligations shall be paid over to the Grantor or to
whomsoever may be lawfully entitled to receive such surplus.

SECTION 6.2         Indemnity
and Expenses.

(a)           The Grantor agrees to indemnify the
Agent from and against any and all claims, losses and liabilities arising out
of or resulting from this Security Agreement 

(including, without
limitation, enforcement of this Security Agreement), except claims, losses or
liabilities resulting from the Agent’s gross negligence or wilful misconduct.

(b)           The Grantor will upon demand pay to
the Agent the amount of any and all reasonable expenses, including the
reasonable fees and disbursements of its counsel and of any experts and agents,
which the Agent may incur in connection with (i) the administration of this
Security Agreement, (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any of the Collateral,
(iii) the exercise or enforcement of any of the rights of the Agent or the
Lender Parties hereunder, or (iv) the failure by the Grantor to perform or
observe any of the provisions hereof.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1         Loan
Document.  This Security Agreement is
a Loan Document executed pursuant to the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.

SECTION 7.2         Amendments;
etc.  No amendment to or waiver of
any provision of this Security Agreement nor consent to any departure by
the Grantor here from, shall in any event be effective unless the same shall be
in writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

SECTION 7.3         Addresses
for Notices.  All notices and other
communications provided for hereunder shall be in writing (including
telegraphic communication) and, if to the Grantor, mailed or telegraphed or
delivered to it, addressed to it at the address of the Grantor specified in the
Credit Agreement, if to the Agent, mailed or delivered to it, addressed to it
at the address of the Agent specified in the Credit Agreement, or as to either
party at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section.  All such notices and other
communications shall, when mailed or telegraphed, respectively, be effective
when deposited in the mails or delivered to the telegraph company,
respectively, addressed as aforesaid.

SECTION 7.4         Section
Captions.  Section captions used in
this Security Agreement are for convenience of reference only, and shall
not affect the construction of this Security Agreement.

SECTION 7.5         Severability.  Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.

 

SECTION 7.6         Governing
Law, Entire Agreement, etc.  THIS
SECURITY AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO THE EXTENT THAT THE VALIDITY
OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN
RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION
OTHER THAN THE STATE OF ILLINOIS.  THIS
SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.

*       *       *

IN WITNESS WHEREOF, the Grantor has caused this
Security Agreement to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.

	
   

  	
  NOVAMED EYECARE, INC., as Grantor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK OF MICHIGAN/ILLINOIS,

  
	
   

  	
  as Agent

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  

EXHIBIT
G-2

Form of Guarantor Security Agreement

FORM OF GUARANTOR SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Security Agreement”),
dated as of June    , 2000, made by the undersigned (each a “Grantor”
and collectively the “Grantors”), in favor of NATIONAL CITY BANK OF
MICHIGAN/ILLINOIS, as Agent (together with any successor(s) thereto in such
capacity, the “Agent”) for each of the Lender Parties (as defined
below).

W  I  T  N  E
S  S  E  T  H

WHEREAS, pursuant to a Credit Agreement, dated as of
June    , 2000 (together with all amendments, restatements
and other modifications, if any, from time to time thereafter made thereto, the
“Credit Agreement”), among NovaMed Eyecare, Inc. (the “Borrower”),
the various commercial lending institutions (individually a “Lender” and
collectively the “Lenders”) as are, or may from time to time become,
parties thereto and the Agent, the Lenders have extended Revolving Commitments
to make Loans to, and agreed to participate in Letters of Credit issued for the
account of, the Borrower; and

WHEREAS, pursuant to the Guaranty, dated as of June    ,
2000 (together with all amendments, restatements and other modification, if
any, from time to time thereafter made thereto, the “Guaranty”), each
Grantor has jointly and severally guaranteed to the Lenders the payment when
due of all obligations and liabilities of the Borrower under or with respect to
the Credit Agreement and the other Loan Documents; and

WHEREAS, each Grantor has duly authorized the
execution, delivery and performance of this Security Agreement;

WHEREAS, as a condition precedent to the making of the
initial Loans, and issuance of the initial Letter of Credit, under the Credit
Agreement, each Grantor is required to execute and deliver this Security
Agreement; and

NOW THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, and in order t
induce the Lenders to make Loans (including the initial Loans) to, and
participate in Letters of Credit issued for the account of, the Borrower
pursuant to the Credit Agreement, each Grantor agrees, for the benefit of each
Lender Party, as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1         Certain
Terms.  The following terms (whether
or not underscored) when used in this Security Agreement, including its
preamble and recitals, shall have the following meanings (such definitions to
be equally applicable to the singular and plural forms thereof):

“Agent” is defined in the preamble.

“Collateral” is defined in Section 2.1.

“Collateral Account” is defined in Section
4.1.2(b).

“Computer Hardware and Software Collateral”
means:

(a)           all
computer and other electronic data processing hardware, integrated computer
systems, central processing units, memory units, display terminals, printers,
features, computer elements, card readers, tape drives, hard and soft disk
drives, cables, electrical supply hardware, generators, power equalizers,
accessories and all peripheral devices and other related computer hardware;

(b)           all
software programs (including both source code, object code and all related
applications and data files), whether now owned, licensed or leased or
hereafter acquired by a Grantor, designed for use on the computers and
electronic data processing hardware described in clause (a) above;

(c)           all
firmware associated therewith;

(d)           all
documentation (including flow charts, logic diagrams, manuals, guides and
specifications) with respect to such hardware, software and firmware described
in the preceding clauses (a) through (c); and

(e)           all
rights with respect to all of the foregoing, including, without limitation, any
and all copyrights, licenses, options, warranties, service contracts, program
services, test rights, maintenance rights, support rights, improvement rights,
renewal rights and indemnifications and any substitutions, replacements,
additions or model conversions of any of the foregoing.

“Contract Right”  means any right of a Grantor  to payment under a contract for the sale or
lease of goods or the rendering of services, which right is at the time not yet
earned by performance.

“Copyright Collateral” means all copyrights and
all semi-conductor chip product mask works of a Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout
the world including, without limitation, all of such Grantor’s right, title and
interest in and to all copyrights and mask works registered in the United
States Copyright Office or anywhere else in the world and also including,
without limitation, the copyrights and mask works referred to in Item A
of Schedule IV attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright and mask work
licenses, including each copyright and mask work license referred to in Item B of Schedule IV attached hereto, the right to
sue for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages and proceeds of suit.

“Credit Agreement” is defined in the first recital.

“Equipment” is defined in clause (a) of Section
2.1.

“Grantor” is defined in the preamble.

“Intellectual Property Collateral” means,
collectively, the Computer Hardware and Software Collateral, the Copyright
Collateral, the Patent Collateral, the Trademark Collateral and the Trade
Secrets Collateral.

“Inventory” is defined in clause (b) of Section
2.1

“Lender” is defined in the first recital.

“Lender Party” means, as the context may
require, any Lender or the Agent and each of its permitted respective
successors, transferees and assigns.

“Lenders” is defined in the first recital.

“Patent Collateral” means:

(a)           all
letters patent and applications for letters patent throughout the world,
including all patent applications in preparation for filing anywhere in the
world and including each patent and patent application referred to in Item A
of Schedule II attached hereto;

(b)           all
patent licenses, including each patent license referred to in Item B of Schedule
II attached hereto;

(c)           all
reissues, divisions, continuations, continuations-in-part, extensions, renewals
and reexaminations of any of the items described in clauses (a) and (b);
and

(d)           all
proceeds of, and rights associated with, the foregoing (including license
royalties and proceeds of infringement suits), the right to sue third parties
for past, present or future infringements of any patent or patent application,
including any patent or patent application referred to in Item A of Schedule
II attached hereto, and for breach or enforcement of any patent license,
including any patent license referred to in Item B of Schedule II
attached hereto, and all rights corresponding thereto throughout the world.

“Receivables” is defined in clause (c) of Section
2.1.

“Related Contracts” is defined in clause (c) of
Section 2.1.

“Secured Obligations” is defined in Section
2.2.

“Security Agreement” is defined in the preamble.

“Trademark Collateral” means:

(a)           all
trademarks, trade names, corporate names, company names, business names,
fictitious business names, trade styles, service marks, certification marks,
collective marks, logos, other source of business identifiers, prints and
labels on which any of the foregoing have appeared or appear, designs and
general intangibles of a like nature (all of the foregoing items in this clause
(a) being collectively called a “Trademark”), now existing anywhere
in the world or hereafter adopted or acquired, whether currently in use or not,
all registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent and
Trademark Office or in any office or agency of the United States of America or
any State thereof or any foreign country, including those referred to in Item A of Schedule III attached hereto;

(b)           all
Trademark licenses, including each Trademark license referred to in Item B
of Schedule III attached hereto;

(c)           all
reissues, extensions or renewals of any of the items described in clauses
(a) and (b);

(d)           all
of the goodwill of the business connected with the use of, and symbolized by
the items described in, clauses (a) and (b); and

(e)           all
proceeds of, and rights associated with, the foregoing, including any claim by
a Grantor against third parties for past, present or future infringement or
dilution of any Trademark, Trademark registration or Trademark license,
including any Trademark, Trademark registration or Trademark license referred
to in Item A and Item B of Schedule III attached hereto,
or for any injury to the goodwill associated with the use of any such Trademark
or for breach or enforcement of any Trademark license.

“Trade Secrets Collateral” means common law and
statutory trade secrets and all other confidential or proprietary or useful
information and all know-how obtained by or used in or contemplated at any time
for use in the business of a Grantor (all of the foregoing being collectively
called a “Trade Secret”), whether or not such Trade Secret has been
reduced to a writing or other tangible form, including all documents and things
embodying, incorporating or referring in any way to such Trade Secret, all
Trade Secret licenses, including each Trade Secret license referred to in Schedule
V attached hereto, and including the right to sue for and to enjoin and to
collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.

“U.C.C.” means the Uniform Commercial Code, as
in effect in the State of Illinois.

SECTION 1.2         Credit
Agreement Definitions.  Unless
otherwise defined herein or the context otherwise requires, terms used in this
Security Agreement, including its preamble and recitals, have the meanings
provided in the Credit Agreement.

SECTION 1.3         U.C.C.
Definitions.  Unless otherwise
defined herein or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Security Agreement, including its
preamble and recitals, with such meanings.

ARTICLE II

SECURITY INTEREST

SECTION 2.1         Grant
of Security.  Each Grantor hereby
assigns and pledges to the Agent for its benefit and the ratable benefit of
each of the Lender Parties, to the maximum extent permitted by and consistent
with applicable law, including, without limitation, Medicare Regulations and
Medicaid Regulations, and hereby grants to the Agent for its benefit and the
ratable benefit of each of the Lender Parties a security interest in, all of
the following, whether now or hereafter existing or acquired, to the maximum
extent permitted by and consistent with applicable law, including, without
limitation, Medicare Regulations and Medicaid Regulations (the “Collateral”):

(a)           all
equipment in all of its forms of such Grantor, wherever located,  and all parts thereof and all accessions,
additions, attachments, improvements, substitutions and replacements thereto
and therefor (any and all of the foregoing being the “Equipment”);

(b)           all
inventory in all of its forms of such Grantor, wherever located, including

(i)            all
raw materials and work in process therefor, finished goods thereof, and
materials used or consumed in the manufacture or production thereof,

(ii)           all
goods in which such Grantor has an interest in mass or a joint or other
interest or right of any kind (including goods in which such Grantor has an
interest or right as consignee and Contract Rights), and

(iii)          all
goods which are returned to or repossessed by such Grantor,

and all accessions
thereto, products thereof and documents therefor (any and all such inventory,
materials, goods, accessions, products and documents being the “Inventory”);

(c)           all
accounts, monies, contracts, Contract Rights, chattel paper, documents,
instruments, and general intangibles of such Grantor, whether or not arising
out of or in connection with the sale or lease of goods or the rendering of
services, and all rights of such Grantor now or hereafter existing in and to
all security agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights, chattel
paper, documents, instruments, and general intangibles (any and all such
accounts, contracts, contract rights, chattel paper, documents, instruments,
and general intangibles being the “Receivables”, and any and all such
security agreements, guaranties, leases and other contracts being the “Related
Contracts”);

(d)           all
Intellectual Property Collateral of such Grantor;

(e)           all
books, records, writings, data bases, information and other property relating
to, used or useful in connection with, evidencing, embodying, incorporating or
referring to, any of the foregoing in this Section 2.1;

(f)            all
of such Grantor’s other property and rights of every kind and description and
interests therein; and

(g)           all
products, offspring, rents, issues, profits, returns, income and proceeds of
and from any and all of the foregoing Collateral (including proceeds which
constitute property of the types described in clauses (a), (b), (c),
(d), (e) and (f), proceeds deposited from time to time in
the Collateral Account and in any deposit account of such Grantor, and, to the
extent not otherwise included, all payments under insurance (whether or not the
Agent is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).

Notwithstanding the
foregoing, “Collateral” shall not include any general intangibles or other
rights arising under contracts as to which the grant of a security interest
would constitute a violation of a valid and enforceable restriction on such
grant, unless and until any required notice and/or consents shall have been
filed and/or obtained.  Each Grantor
agrees to use its best efforts to obtain any such required consent.

SECTION 2.2         Security
for Obligations.  This Security
Agreement secures the payment of all of each Grantor’s obligations and
liabilities now existing or hereafter incurred under, arising out of or in
connection with the Guaranty in respect of all Obligations of the Borrower now
or hereafter existing under the Credit Agreement, the Notes, the Letters of
Credit  and each other Loan Document to
which the Borrower is or may become a party, whether for principal, interest,
costs, fees, expenses or otherwise, and all obligations of the applicable
Grantor now or hereafter existing under each other Loan Document to which it is
or may become a party (all such obligations of the Borrower being the “Secured
Obligations”) .

SECTION 2.3         Continuing
Security Interest; Transfer of Notes. 
This Security Agreement shall create a continuing security interest in
the Collateral and shall

(a)           remain
in full force and effect until payment in full of all Secured Obligations and
the termination of all Revolving Commitments and all Letters of Credit,

(b)           be
binding upon each Grantor, its successors, transferees and assigns, and

(c)           inure,
together with the rights and remedies of the Agent hereunder, to the benefit of
the Agent and each other Lender Party.

Without limiting the
generality of the foregoing clause (c), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all the rights and benefits in respect thereof granted to such
Lender under any Loan Document (including this Security Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 11.11 of the Credit Agreement.  Upon the payment in full of all Secured
Obligations and the termination of all Revolving Commitments and all Letters of
Credit, the security interest granted herein shall terminate and all rights to
the Collateral shall revert to the relevant Grantor.  Upon any such termination, the Agent will, at
the relevant Grantor’s sole expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such
termination.

SECTION 2.4         Grantor
Remains Liable.  Anything herein to
the contrary notwithstanding

(a)           each
Grantor shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein, and shall perform all of its duties
and obligations under such contracts and agreements to the same extent as if
this Security Agreement had not been executed,

(b)           the
exercise by the Agent of any of its rights hereunder shall not release a
Grantor from any of its duties or obligations under any such contracts or
agreements included in the Collateral, and

(c)           neither
the Agent nor any other Lender Party shall have any obligation or liability
under any such contracts or agreements included in the Collateral by reason of
this Security Agreement, nor shall the Agent or any other Lender Party be
obligated to perform any of the obligations or duties of a Grantor thereunder
or to take any action to collect or enforce any claim for payment assigned
hereunder, except to the extent the Agent or such Lender Party, as applicable,
shall have succeeded to the rights and obligations of the relevant Grantor
pursuant to the exercise of remedies under the Loan Documents.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

SECTION 3.1         Representations
and Warranties.  Each Grantor
represents and warrants unto each Lender Party as set forth in this Article.

SECTION 3.1.1.  Location
of Collateral, etc.  All of the
Equipment, Inventory and lock boxes of such Grantor are located at the places
specified in Item A, Item B and Item C, respectively, of Schedule I
hereto.  None of the Equipment and
Inventory has, within the four months preceding the date of this Security
Agreement, been located at any place other than the places specified in Item
A and Item B, respectively, of Schedule I hereto.  The place(s) of business and chief executive
office of such Grantor and the office(s) where such Grantor keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidence Receivables, are located at the places specified in Item D  of Schedule I hereto.  No Grantor 
has a trade name.  No Grantor has
been known by any legal name different from the one set forth on the signature
page hereto, nor has a Grantor been the subject of any merger or other
corporate reorganization, except as described on Schedule VI.  None of the Receivables is evidenced by a
promissory note or other instrument not pledged to Agent.  No Grantor is a party to any Federal, state
or local government contract except as described on Schedule VII.

SECTION 3.1.2.  Ownership,
No Liens, etc.  Each Grantor owns the
Collateral attributable to such Grantor free and clear of any Lien, security
interest, charge or encumbrance except for the security interest created by
this Security Agreement and except as permitted by the Credit Agreement.  No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any recording office, except such as may have been filed in favor of
the Agent relating to this Security Agreement or as may be permitted pursuant
to the Credit Agreement with respect to Permitted Liens.

SECTION 3.1.3.  Possession
and Control.  Except as contemplated
by the applicable Service Agreement, each Grantor has exclusive possession and
control of such Grantor’s Equipment and Inventory.

SECTION 3.1.4.  Negotiable
Documents, Instruments and Chattel Paper. 
Each Grantor, to the extent permitted by applicable law, including,
without limitation, Medicare Regulations and 
Medicaid Regulations, has, contemporaneously herewith, delivered to the
Agent possession of all originals of all negotiable documents, instruments and
chattel paper currently owned or held by such Grantor (duly endorsed in blank,
if requested by the Agent).

SECTION 3.1.5.  Intellectual
Property Collateral.  With respect to
any Intellectual Property Collateral the loss, impairment or infringement of
which reasonably would be expected to have a Material Adverse Effect:

(a)           such
Intellectual Property Collateral is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part;

(b)           such
Intellectual Property Collateral is valid and enforceable;

(c)           each
Grantor has made all necessary filings and recordations to protect its interest
in such Intellectual Property Collateral, including, without limitation,
recordations of all of its interests in the Patent Collateral and Trademark
Collateral in the United States Patent and Trademark Office and in
corresponding offices throughout the world and its claims to the Copyright
Collateral in the United States Copyright Office and in corresponding offices
throughout the world;

(d)           each
Grantor is the exclusive owner of the entire and unencumbered right, title and
interest in and to such Intellectual Property Collateral and no notice has been
received by such Grantor that the use of such Intellectual Property Collateral
does or may violate the asserted rights of any third party; and

(e)           each
Grantor has performed and will continue to perform all acts and has paid and
will continue to pay all required fees and taxes to maintain each and every
item of Intellectual Property Collateral in full force and effect throughout
the world, as applicable, except with respect to the rights of such Grantor in
any such  item of Intellectual Property
Collateral that should be allowed to lapse in the reasonable business judgment
of such Grantor.

Each Grantor owns
directly or is entitled to use by license or otherwise, all patents,
Trademarks, Trade Secrets, copyrights, mask works, licenses, technology,
know-how, processes and rights with respect to any of the foregoing used in,
necessary for or of importance to the conduct of such Grantor’s business.

SECTION 3.1.6.  Validity,
etc.  This Security Agreement creates
a valid first priority security interest in the Collateral, securing the
payment of the Secured Obligations, and all filings and other actions necessary
or desirable to perfect and protect such security interest have been duly
taken.

SECTION 3.1.7.  Authorization,
Approval, etc.  No authorization,
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required either

(a)           for
the grant by each Grantor of the security interest granted hereby or for the
execution, delivery and performance of this Security Agreement by such Grantor,
or

(b)           for
the perfection of or the exercise by the Agent of its rights and remedies
hereunder, except such filings with state and Federal offices which may be
required under applicable law.

SECTION 3.1.8.  Compliance
with Laws.  Each Grantor is in
compliance with the requirements of all applicable laws (including, without
limitation, the provisions of the Fair Labor Standards Act), rules, regulations
and orders of every governmental authority, the non-compliance with which
reasonably would be expected to have a Material Adverse Affect.

ARTICLE IV

COVENANTS

SECTION 4.1         Certain
Covenants.  Each Grantor covenants
and agrees that, so long as any portion of the Secured Obligations shall remain
unpaid or any Lender shall have any outstanding Commitment or any Letter of
Credit Obligation remains outstanding, such Grantor will, unless the Required
Lenders shall otherwise consent in writing, perform the obligations set forth
in this Section.

SECTION 4.1.1  As
to Equipment and Inventory.  Each
Grantor hereby agrees that it shall

(a)           keep
all the Equipment and Inventory (other than Inventory sold in the ordinary
course of business) attributable to such Grantor at the places therefor
specified in Section 3.1.1 or, upon 30 days’ prior written notice to the
Agent, at such other places in a jurisdiction where all representations and
warranties set forth in Article III (including Section 3.1.1)
shall be true and correct, and all action required pursuant to the first
sentence of Section 4.1.7 shall have been taken with respect to such
Equipment and Inventory;

(b)           cause
the Equipment attributable to such Grantor to be maintained and preserved
in the same condition, repair and working order as when new or acquired,
ordinary wear and tear excepted, and in accordance with any manufacturer’s
manual; and forthwith, or in the case of any loss or damage to any of such
Equipment, as quickly as practicable after the occurrence thereof, but subject
to the terms and conditions of the applicable Service Agreement, make or cause
to be made all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end, provided such
Equipment, in the reasonable business judgment of such Grantor, still is
required for the operation of the business of such Grantor, and promptly
furnish to the Agent a statement respecting any loss or damage to any of such
Equipment which is an amount greater than $25,000 not otherwise covered by
insurance; and

(c)           pay
promptly when due all property and other taxes, assessments and governmental
charges or levies imposed upon, and all claims (including claims for labor,
materials and supplies) against, the Equipment and Inventory attributable to
such Grantor, except to the extent the validity thereof is being contested in
good faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP have been set aside.

SECTION 4.1.2  AS TO RECEIVABLES.

(a)           Each
Grantor shall keep its place(s) of business and chief executive office and the
office(s) where it keeps its records concerning the Receivables attributable to
such Grantor, and all originals of all chattel paper which evidenced such
Receivables, located at the locations listed in Item D on Schedule I
hereto, or, upon 30 days’ prior written notice to the Agent, at such other
locations in a jurisdiction where all actions required by the first sentence
of Section 4.1.7 shall have been taken with respect to such Receivables;
not change its name except upon 30 days’ prior written notice to the Agent; hold
and preserve such records and chattel paper; and permit representatives of the
Agent at any time during normal business hours to inspect and make abstracts
from such records and chattel paper, all in accordance with and subject to the
provisions of Section 7.1.5 of the Credit Agreement.

(b)           Upon
written notice by the Agent to a Grantor pursuant to this Section 4.1.2(c),
all proceeds of Collateral received by such Grantor shall be delivered in kind
to the Agent for deposit to a deposit account (the “Collateral Account”)
of such Grantor maintained with the Agent, and such Grantor shall not commingle
any such proceeds, and shall hold separate and apart from all other property,
all such proceeds in express trust for the benefit of the Agent until delivery
thereof is made to the Agent.  The Agent
will not give the notice referred to in the preceding sentence unless there
shall have occurred and be continuing an Event of  Default. 
No funds, other than proceeds of Collateral, will be deposited in the
Collateral Account.

(c)           The
Agent shall have the right to apply any amount in the Collateral Account to the
payment of any Secured Obligations which are due and payable or payable upon
demand, or to the payment of any  Secured
Obligations at any time that an Event of Default shall exist.  Subject to the rights of the Agent, each
Grantor shall have the right, with respect to and to the extent of collected
funds in the Collateral Account, (i) as long as there shall be no Default, to
require the Agent to transfer to such Grantor’s general demand deposit account
at the Agent any or all of such collected funds and (ii) as long as there shall
be an Event of Default which exists and is continuing and after giving effect
to any exercise by the Agent of its rights, (A) to require the Agent to
transfer to such Grantor’s general demand deposit account at the Agent amounts
required to cover checks drawn against that account which shall have been
presented for payment at the Agent as of the preceding business day and all
wire transfers which such Grantor has directed to be made on the current
business day, to the extent such checks and wire transfers are for any purpose
which does not violate any provision of any Loan Document and (B) to require
the Agent to purchase any Cash Equivalent Investment, provided that, in the
case of certificated securities, the Agent will retain possession thereof as
Collateral 

and, in the case of
uncertificated securities, the Agent will take such actions, including
registration of such securities in its name, as it shall determine is necessary
to perfect its security interest therein. 
The Agent may at any time transfer to the relevant Grantor’s general
demand deposit account at the Agent any or all of the collected funds in the
Collateral Account; provided, however, that any such transfer
shall not be deemed to be a waiver or modification of any of the Agent’s rights
under this Section 4.1.2(c).

SECTION 4.1.3  AS TO COLLATERAL.

(a)           Until
such time as the Agent shall notify a Grantor of the revocation of such
power and authority, such Grantor (i) may in the ordinary course of its
business, at its own expense, sell, lease or furnish under the contracts of
service any of the Inventory normally held by such Grantor for such purpose,
and use and consume, in the ordinary course of its business, any raw materials,
work in process or materials normally held by such Grantor for such purpose,
(ii) will, at its own expense, endeavor to collect, as and when due, all
amounts due with respect to any of the Collateral, including the taking of such
action with respect to such collection as the Agent may reasonably request or,
in the absence of such request, as such Grantor may deem advisable, and (iii)
may grant, in the ordinary course of business, to any party obligated on any of
the Collateral, any rebate, refund or allowance to which such party may be
lawfully entitled, and may accept, in connection therewith, the return of
goods, the sale or lease of which shall have given rise to such Collateral.  The Agent, however, may, upon the occurrence
and during the continuation of an Event of Default, notify any parties
obligated on any of the Collateral to make payment to the Agent of any amounts
due or to become due thereunder and enforce collection of any of the Collateral
by suit or otherwise and surrender, release, or exchange all or any part
thereof, or compromise or extend or renew for any period (whether or not longer
than the original period) any indebtedness thereunder or evidenced thereby.  Upon request of the Agent, a Grantor will, at
its own expense, notify any parties obligated on any of the Collateral to make
payment to the Agent of any amounts due or to become due thereunder.

(b)           The
Agent is authorized to endorse, in the name of a Grantor, any item, howsoever
received by the Agent, representing any payment on or other proceeds of any of
the Collateral.

SECTION 4.1.4  AS TO INTELLECTUAL PROPERTY COLLATERAL

(a)           No
Grantor shall, unless such Grantor shall either (i) reasonably and in good
faith determine (and notice of such determination shall have been delivered to
the Agent) that any of the PatentCollateral is of negligible economic value to
such Grantor, or (ii) have a valid business purpose to do otherwise, do any
act, or omit to do any act, whereby any of the Patent Collateral may lapse or
become abandoned or dedicated to the public or unenforceable.

(b)           No
Grantor shall, and such Grantor shall not permit any of its licensees to,
unless such Grantor shall either (i) reasonably and in good faith determine
(and notice of such determination shall have been delivered to the Agent) that
any of the Trademark 

 

Collateral is of
negligible economic value to such Grantor, or (ii) have a valid business
purpose to do otherwise,

(A)          fail
to continue to use any of the Trademark Collateral in order to maintain all of
the Trademark Collateral in full force free from any claim of abandonment for
non-use,

(B)           fail
to maintain as in the past the quality of products and services offered under
all of the Trademark Collateral,

(C)           fail
to employ all of the Trademark Collateral registered with any Federal or state
or foreign authority with an appropriate notice of such registration,

(D)          adopt
or use any other Trademark which is confusingly similar or a colorable
imitation of any of the Trademark Collateral,

(E)           use
any of the Trademark Collateral registered with any Federal or state or foreign
authority except for the uses for which registration or application for
registration of all of the Trademark Collateral has been made, and

(F)           do
or permit any act or knowingly omit to do any act whereby any of the Trademark
Collateral may lapse or become invalid or unenforceable.

(c)           No
Grantor shall, unless such Grantor shall either (i) reasonably and in good
faith determine (and notice of such determination shall have been delivered to
the Agent) that any of the Copyright Collateral or any of the Trade Secrets
Collateral is of negligible economic value to such Grantor, or (ii) have a
valid business purpose to do otherwise, do or permit any act or knowingly omit
to do any act whereby any of the Copyright Collateral or any of the Trade Secrets
Collateral may lapse or become invalid or unenforceable or placed in the public
domain except upon expiration of the end of an unrenewable term of a
registration thereof.

(d)           A
Grantor shall notify the Agent immediately if it knows, or has reason to know,
that any application or registration relating to any material item of the
Intellectual Property Collateral reasonably would be expected to become
abandoned or dedicated to the public or placed in the public domain or invalid
or unenforceable, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any foreign counterpart thereof or any court) regarding such Grantor’s
ownership of any of the Intellectual Property Collateral, its right to register
the same or to keep and maintain and enforce the same.

(e)           In
no event shall a Grantor or any of its agents, employees, designees or
licensees file an application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any other country or
any political subdivision thereof, unless it promptly informs the Agent, and
upon request of the Agent, executes and 

delivers any and all
agreements, instruments, documents and papers as the Agent may reasonably
request to evidence the Agent’s security interest in such Intellectual Property
Collateral and the goodwill and general intangibles of the relevant Grantor
relating thereto or represented thereby.

(f)            Each
Grantor shall take all necessary steps, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue any application (and to obtain the
relevant registration) filed with respect to, and to maintain any registration
of, the Intellectual Property Collateral attributable to such Grantor,
including the filing of applications for renewal, affidavits of use, affidavits
of incontestability and opposition, interference and cancellation proceedings
and the payment of fees and taxes (except to the extent that dedication,
abandonment or invalidation is permitted under the foregoing clauses (a),
(b) and (c)).

(g)           Each
Grantor shall, contemporaneously herewith, execute and deliver to the Agent an
Agreement (Patent), an Agreement (Trademark) and an Agreement (Copyright) in
the forms of Exhibit A, Exhibit B and Exhibit C hereto,
respectively, and shall execute and deliver to the Agent any other document
required to acknowledge or register or perfect the Agent’s interest in any part
of the Intellectual Property Collateral attributable to such Grantor.

SECTION 4.1.5  Insurance.  Each Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to the
Equipment and Inventory attributable to such Grantor against such casualties
and contingencies and of such types and in such amounts as is customary in the
case of similar businesses and will, upon the request of the Agent, furnish a
certificate of a reputable insurance broker setting forth the nature and extent
of all insurance maintained by such Grantor in accordance with this Section;
provided, however, that for so long as no Event of Default shall exist and be
continuing, the Agent shall not request any such certificate more than one time
in any Fiscal Year.  Without limiting the
foregoing, each Grantor further agrees as follows:

(a)           Each
policy for property insurance shall show the Agent as loss payee.

(b)           Each
policy for liability insurance shall show the Agent as an additional insured.

(c)           With
respect to each life insurance policy, such Grantor shall execute and deliver
to the Agent a collateral assignment, notice of which has been acknowledged in
writing by the insurer.

(d)           Each
insurance policy shall provide that at least 30 days’ prior written notice of
cancellation or of lapse shall be given to the Agent by the insurer.

(e)           Such
Grantor shall, if so requested by the Agent, deliver to the Agent a copy of
each insurance policy.

(f)            All
payments in respect of property insurance and life insurance shall be deposited
to the Collateral Account and if there shall be no Collateral Account shall be
paid to such Grantor; provided, however that, with respect to property
insurance only, payments in respect thereof shall be paid to such Grantor if (i)
the amount thereof is less than or equal to $25,000 and (ii) no Event of
Default exists or is continuing at the time of payment thereof.

SECTION 4.1.6  Transfers
and Other Liens.  No Grantor shall:

(a)           sell,
assign (by operation of law or otherwise) or otherwise dispose of any of the
Collateral, except Inventory in the ordinary course of business or as permitted
by the Credit Agreement; or

(b)           create
or suffer to exist any Lien or other charge or encumbrance upon or with respect
to any of the Collateral to secure Indebtedness of any Person or entity, except
for the security interest created by this Security Agreement and except as
permitted by the Credit Agreement.

SECTION 4.1.7  Further
Assurances, etc.  Each Grantor agrees
that, from time to time at its own expense, such Grantor will promptly execute
and deliver all further instruments and documents, and take all further action,
that may be necessary or desirable, or that the Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Agent to exercise and enforce its rights and
remedies hereunder with respect to any Collateral.  Without limiting the generality of the
foregoing, such Grantor will:

(a)           mark
conspicuously each chattel paper included in the Receivables and each Related
Contract and, at the reasonable request of the Agent, each of its records
pertaining to the Collateral with a legend, in form and substance satisfactory
to the Agent, indicating that such document, chattel paper, Related Contract or
Collateral is subject to the security interest granted hereby;

(b)           if
any Receivable shall be evidenced by a promissory note or other
instrument,  negotiable document or
chattel paper, deliver and pledge to the Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Agent;

(c)           execute
and file such financing or continuation statements, or amendments thereto, and
such other instruments or notices 
(including, without limitation, any assignment of claim form under or
pursuant to the federal assignment of claims statute, 31 U.S.C. § 3726, any
successor or amended version thereof or any regulation promulgated under or
pursuant to any version thereof), as may be necessary or desirable, or as the
Agent may request, in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Agent hereby; and

(d)           furnish
to the Agent, from time to time at the Agent’s request, statements and
schedules further identifying and describing the Collateral and such other
reports in 

connection with the
Collateral as the Agent may reasonably request, all in reasonable detail.

With respect to the
foregoing and the grant of the security interest hereunder, each Grantor hereby
authorizes the Agent to file one or more financing or continuation statements,
and amendments thereto, relative to all or any part of the Collateral without
the signature of such Grantor where permitted by law.  A carbon, photographic or other reproduction
of this Security Agreement or any financing statement covering the Collateral
or any part thereof shall be sufficient as a financing statement where
permitted by law.

ARTICLE V

THE AGENT

SECTION 5.1         Agent
Appointed Attorney-in-Fact.  Subject
to any limits imposed under applicable law, including, without limitation,
Medicare Regulations and Medicaid Regulations, each Grantor hereby irrevocably
appoints the Agent such Grantor’s attorney-in-fact, with full authority in the
place and stead of such Grantor and in the name of such Grantor or otherwise,
from time to time in the Agent’s discretion upon the occurrence and during the
continuation of an Event of Default, to take any action and to execute any
instrument which the Agent may deem necessary or advisable to accomplish the
purposes of this Security Agreement, including, without limitation:

(a)           to
ask, demand, collect, sue for, recover, compromise, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;

(b)           to
receive, endorse, and collect any drafts or other instruments, documents and
chattel paper, in connection with clause (a) above;

(c)           to
file any claims or take any action or institute any proceedings which the Agent
may deem necessary or desirable for the collection of any of the Collateral or
otherwise to enforce the rights of the Agent with respect to any of the
Collateral; and

(d)           to
perform the affirmative obligations of such Grantor hereunder (including all
obligations of such Grantor pursuant to Section 4.1.7).

Each Grantor hereby
acknowledges, consents and agrees that the power of attorney granted pursuant
to this Section is irrevocable and coupled with an interest.

SECTION 5.2         Agent
May Perform.  If a Grantor fails to
perform any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by the relevant Grantor pursuant to Section
6.2.

SECTION 5.3         Agent
Has No Duty.  In addition to, and not
in limitation of, Section 2.4, the powers conferred on the Agent
hereunder are solely to protect its interest (on behalf of the Lender Parties)
in the Collateral and shall not impose any duty on it to exercise any such
powers.  

Except for reasonable
care of any Collateral in its possession and the accounting for moneys actually
received by it hereunder, the Agent shall have no duty as to any Collateral or
as to the taking of any necessary steps to preserve rights against prior
parties or any other rights pertaining to any Collateral.

SECTION 5.4         Reasonable
Care.  The Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; provided, however, the Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as a Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of an Event of Default, but failure of the Agent to
comply with any such request at any time shall not in itself be deemed a failure
to exercise reasonable care.

ARTICLE VI

REMEDIES

SECTION 6.1         Certain
Remedies.  If any Event of Default
shall have occurred and be continuing:

(a)           The
Agent may exercise in respect of the Collateral, in addition to other rights
and remedies provided for herein or otherwise available to it, all the rights
and remedies of a secured party on default under the U.C.C. (whether or not the
U.C.C. applies to the affected Collateral) and also may (i) require a Grantor
to, and such Grantor hereby agrees that it will, at its expense and upon
request of the Agent forthwith, assemble all or part of the Collateral as
directed by the Agent and make it available to the Agent at a place to be
designated by the Agent which is reasonably convenient to both parties and (ii)
without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any of the Agent’s
offices or elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Agent may deem commercially reasonable.  Each Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days’ prior notice to
such Grantor of the time and place of any public sale or the time after which
any private sale is to be made shall constitute reasonable notification.  The Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given.  The Agent may adjourn any public or private
sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to
which it was so adjourned.

(b)           All
cash proceeds received by the Agent in respect of any sale of, collection
from, or other realization upon all or any part of the Collateral may, in the
discretion of the Agent, be held by the Agent as collateral for, and/or then or
at any time thereafter applied (after payment of any amounts payable to the
Agent pursuant to Section 6.2) in whole or in part by the Agent for the
ratable benefit of the Lender Parties against, all or any part of the Secured
Obligations in such order as the Agent shall elect.  Any surplus of such cash or cash proceeds
held by the Agent and remaining after 

payment in full of all
the Secured Obligations shall be paid over to the relevant Grantor or to
whomsoever may be lawfully entitled to receive such surplus.

SECTION 6.2         INDEMNITY AND EXPENSES.

(a)           Each
Grantor agrees to jointly and severally indemnify the Agent from and against
any and all claims, losses and liabilities arising out of or resulting from
this Security Agreement (including, without limitation, enforcement of this
Security Agreement), except claims, losses or liabilities resulting from the
Agent’s gross negligence or wilful misconduct.

(b)           Each
Grantor will upon demand pay to the Agent the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its counsel and of
any experts and agents, which the Agent may incur in connection with (i) the
administration of this Security Agreement, (ii) the custody, preservation, use
or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral, (iii) the exercise or enforcement of any of the rights
of the Agent or the Lender Parties hereunder, or (iv) the failure by such
Grantor to perform or observe any of the provisions hereof.

ARTICLE VII

MISCELLANEOUS PROVISIONS

SECTION 7.1         Loan
Document.  This Security Agreement is
a Loan Document executed in connection with the Credit Agreement and shall
(unless otherwise expressly indicated herein) be construed, administered and
applied in accordance with the terms and provisions thereof.

SECTION 7.2         Amendments;
etc.  No amendment to or waiver of
any provision of this Security Agreement nor consent to any departure by
any Grantor here from, shall in any event be effective unless the same shall be
in writing and signed by the Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

SECTION 7.3         Addresses
for Notices.  All notices and other
communications provided for hereunder shall be in writing (including
telegraphic communication) and, if to a Grantor, mailed or telegraphed or
delivered to it, addressed to it at the address of such Grantor specified in
the Guaranty, if to the Agent, mailed or delivered to it, addressed to it at
the address of the Agent specified in the Credit Agreement, or as to either
party at such other address as shall be designated by such party in a written
notice to each other party complying as to delivery with the terms of this
Section.  All such notices and other
communications shall, when mailed or telegraphed, respectively, be effective
when deposited in the mails or delivered to the telegraph company,
respectively, addressed as aforesaid.

SECTION 7.4         Section
Captions.  Section captions used in
this Security Agreement are for convenience of reference only, and shall
not affect the construction of this Security Agreement.

SECTION 7.5         Severability.  Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Security Agreement.

SECTION 7.6         Governing
Law, Entire Agreement, etc.  THIS SECURITY AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS,
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF ILLINOIS.  THIS SECURITY AGREEMENT AND THE OTHER LOAN
DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS,
WRITTEN OR ORAL, WITH RESPECT THERETO.

*       *       *

IN WITNESS
WHEREOF, each Grantor has caused this Security Agreement to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.

	
   

  	
  NOVAMED MANAGEMENT OF KANSAS CITY, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  BLUE RIDGE NOVAMED, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE SURGERY CENTER (PLAZA) L.L.C.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY CENTER OF OVERLAND PARK, L.L.C.

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY AND LASER CENTER OF ST. JOSEPH, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  

 

 

	
  

  	
  NOVAMED EYECARE
  SERVICES, LLC,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY CENTER OF MARYVILLE, L.L.C.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY CENTER OF NORTH COUNTY, LLC,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYE
  SURGERY CENTER OF NEW ALBANY, L.L.C.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED EYECARE
  RESEARCH, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  

 

 

	
  

  	
  NOVAMED OF
  RICHMOND, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NMGK, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED OF  LOUISVILLE, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  MIDWEST UNCUTS,
  INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NMSL INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  NOVAMED OF  ST. LOUIS, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  
	
   

  	
  PATIENT
  EDUCATION CONCEPTS, INC.,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  

 

 

	
  

  	
  NATIONAL CITY
  BANK OFMICHIGAN/ILLINOIS,

  
	
   

  	
  as a Pledgor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  	
  Title:

  
	
   

  
	
   

  

 

EXHIBIT
H

Form of Opinion of Counsel to Borrower

[Not required
under the Sixth Amended and Restated Credit Agreement]

EXHIBIT
I

Form of Reaffirmation of Collateral
Documents

FORM OF
REAFFIRMATION OF COLLATERAL DOCUMENTS

THIS
REAFFIRMATION OF COLLATERAL DOCUMENTS (this “Reaffirmation”) is made as of this
7th day of February, 2007 by each of the undersigned (each sometimes referred
to individually as a “Loan Party” and collectively, as the “Loan Parties”), and
National City Bank (formerly National City Bank of the Midwest), as agent for
the benefit of Lender Parties (“Agent”). 
Unless otherwise defined herein, capitalized terms used herein shall
have the meanings ascribed to them in the Credit Agreement (as defined below).

WITNESSETH

WHEREAS,
Borrower, Agent and Lenders have entered into that certain Sixth Amended and
Restated Credit Agreement (as further amended, modified, restated or otherwise
supplemented from time to time, the “Credit Agreement”) of even date herewith,
which Credit Agreement amends and restates in its entirety that certain Fifth
Amended and Restated Credit Agreement dated as of June 29, 2006, that certain
Fourth Amended and Restated Credit Agreement dated as of October 15, 2004, that
certain Third Amended and Restated Credit Agreement dated as of June 26, 2003,
that certain Second Amended and Restated Credit Agreement dated as of October
23, 2001 (the “Existing Credit Agreement”) which amended and restated that
certain Amended and Restated Credit Agreement dated as of August 29, 2001 (the “Amended
and Restated Credit Agreement”) which amended and restated that certain Credit
Agreement dated as of June 28, 2000, as amended (the “Original Credit Agreement”
and together with the Existing Credit Agreement and the Amended and Restated
Credit Agreement collectively, the “Prior Credit Agreements”);

WHEREAS,
the Loan Parties have previously executed and delivered to Agent, for the
benefit of Lender Parties (as defined in each of the Existing Collateral
Documents), various security and related documents, including, without
limitation, those documents described on Exhibit A hereto (as previously
amended (including, without limitation, in connection with each of (i) that
certain Reaffirmation and Amendment of Collateral Documents dated as of August
29, 2001, (ii) that certain Reaffirmation of Collateral Documents dated as of
June 26, 2003, (iii) that certain Reaffirmation of Collateral Documents dated
as of October 15, 2004 and (iv) that certain Reaffirmation of Collateral
Documents dated as of June 29, 2006), modified, reaffirmed or supplemented, the
“Existing Collateral Documents”) in connection with the Prior Credit
Agreements;

WHEREAS,
each Loan Party will derive both direct and indirect benefits from the loans
and other financial accommodations made pursuant to the Credit Agreement; and

WHEREAS,
it is a condition precedent to making the loans, advances and other financial
accommodations of Agent and Lenders under the Credit Agreement that the Loan
Parties enter into this Reaffirmation to acknowledge and agree that the
Existing Collateral Documents, and the liens, security interests and guarantees
granted and issued thereunder, secure and guaranty the Obligations of the
Borrower under the Credit Agreement.

NOW,
THEREFORE, in consideration of the premises set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the undersigned agrees as follows:

Reaffirmation.  In
connection with the execution and delivery of the Credit Agreement, each Loan
Party, as debtor, grantor, mortgagor, pledgor, guarantor, assignor, or in other
similar capacities in which such Loan Party grants liens or security interests
in its properties or otherwise acts as an accommodation party or guarantor, as
the case may be, in any case under the Existing Collateral Documents, ratifies
and reaffirms all of its payment and performance obligations, contingent or
otherwise, under each of such Existing Collateral Documents to which it is a
party and, to the extent such Loan Party granted liens on or security interests
in any of its properties pursuant to any such Existing Collateral Documents as
security for the “Obligations” under or with respect to the Prior Credit
Agreements, each hereby ratifies and reaffirms such grant of security and
confirms and agrees that such liens and security interests hereafter secure all
of the Obligations, including, without limitation, all additional Obligations
resulting from the Credit Agreement, in each case as if each reference in such Existing
Collateral Documents to the obligations secured thereby are construed to
hereafter mean and refer to such Obligations under the Credit Agreement.  Each of the Loan Parties hereby consents to
the terms and conditions of the Credit Agreement and reaffirms its guaranty of
all of the Obligations under or with respect to the Credit Agreement
(including, without limitation, all additional Obligations resulting from the
Credit Agreement).  Each of the Loan
parties acknowledges receipt of a copy of the Credit Agreement and acknowledges
that each of the Existing Collateral Documents remains in full force and effect
and is hereby ratified and confirmed. 
The execution of this Reaffirmation shall not operate as a waiver of any
right, power or remedy of the Agent or Lenders, nor constitute a waiver of any
provision of any of the Existing Collateral Documents nor constitute a novation
of any of the Obligations under the Credit Agreement or Existing Collateral
Documents.

Successors and Assigns. 
This Reaffirmation shall be binding upon each of the Loan Parties and
upon their respective successors and assigns and shall inure to the benefit of
Agent and the Lenders and their respective successors and assigns; all
references herein to Borrower shall be deemed to include its successors and
assigns.  The successors and assigns of
such entities shall include, without limitation, their respective receivers,
trustees, or debtors-in-possession.

Further Assurances. 
Each Loan Party hereby agrees from time to time, as and when requested
by Agent or any Lender to execute and deliver or cause to be executed and
delivered, all such documents, instruments and agreements and to take or cause
to be taken such further or other action as Agent or such Lender may reasonably
deem 

necessary or desirable in order to carry out the intent and purposes of
this Reaffirmation and the Loan Documents.

Definitions. 
All references to the singular shall be deemed to include the plural and
vice versa where the context so requires.

Governing Law.  THIS
AGREEMENT SHALL BE GOVERNED BY AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO
CONFLICTS OF LAW PRINCIPLES.

Severability. 
Wherever possible, each provision of this Reaffirmation shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Reaffirmation shall be prohibited by or invalid
under such law, such provision shall be ineffective to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Reaffirmation.

Merger. 
This Reaffirmation represents the final agreement of each of the Loan
Parties with respect to the matters contained herein and may not be contradicted
by evidence of prior or contemporaneous agreements, or prior or subsequent oral
agreements, among any of the Loan Parties, Agent or the Lenders.

Execution in Counterparts. 
This Reaffirmation may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. 
Delivery of the executed counterpart of this Reaffirmation by telecopy
or electronic mail shall be as effective as delivery of a manually executed
counterpart to this Reaffirmation.

Section Headings. 
The section headings herein are for convenience of reference only, and
shall not affect in any way the interpretation of any of the provisions hereof.

[remainder of page
intentionally blank]

IN WITNESS WHEREOF, this Reaffirmation has been duly
executed by each of the undersigned as of the day and year first above written.

	
  

  	
   

  	
   

  
	
   

  	
   

  	
  NOVAMED, INC. (formerly NOVAMED EYECARE, INC.)

  
	
   

  	
   

  	
  NOVAMED MANAGEMENT OF KANSAS CITY, INC.

  
	
   

  	
   

  	
  PATIENT EDUCATION CONCEPTS, INC.

  
	
   

  	
   

  	
  BLUE RIDGE NOVAMED, INC.

  
	
   

  	
   

  	
  NOVAMED EYE SURGERY AND LASER

  
	
   

  	
   

  	
   CENTER OF ST. JOSEPH, INC.

  
	
   

  	
   

  	
  NOVAMED MANAGEMENT SERVICES, LLC

  
	
   

  	
   

  	
  NOVAMED EYE SURGERY CENTER OF

  
	
   

  	
   

  	
   NORTH COUNTY, LLC

  
	
   

  	
   

  	
  NOVAMED EYECARE RESEARCH, INC.

  
	
   

  	
   

  	
  NMGK, INC.

  
	
   

  	
   

  	
  NOVAMED OF 
  LOUISVILLE, INC.

  
	
   

  	
   

  	
  MIDWEST UNCUTS, INC.

  
	
   

  	
   

  	
  NMLO, INC.

  
	
   

  	
   

  	
  NMI, INC.

  
	
   

  	
   

  	
  NOVAMED EYE SURGERY CENTER OF

  
	
   

  	
   

  	
  CINCINNATI, L.L.C.

  
	
   

  	
   

  	
  NOVAMED ACQUISITION COMPANY, INC.

  
	
   

  	
   

  	
  NOVAMED OF TEXAS, INC.

  
	
   

  	
   

  	
  NOVAMED ALLIANCE, INC.

  
	
   

  	
   

  	
  NOVAMED OF WISCONSIN, INC.

  
	
   

  	
   

  	
  NOVAMED OF DALLAS, INC.

  
	
   

  	
   

  	
  NOVAMED OF SAN ANTONIO, INC.

  
	
   

  	
   

  	
  NOVAMED OF LAREDO, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  
	
   

  	
   

  	
   

  	
  Title: Scott T. Macomber, Executive Vice

  
	
   

  	
   

  	
   

  	
   

  	
  President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

 

	
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ACCEPTED AND AGREED TO:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  NATIONAL CITY BANK,

  	
   

  	
   

  
	
   as Agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  

 

EXHIBIT A

COLLATERAL DOCUMENTS *

Borrower Security
Agreement executed by Borrower

Borrower Pledge Agreement
executed by Borrower

Guaranty executed by each
Subsidiary Guarantor

Guarantor Security
Agreement executed by each Subsidiary Guarantor

Guarantor Pledge
Agreement executed by each Subsidiary Guarantor

Intellectual Property
Assignment executed by Patient Education Concepts, Inc., Midwest Uncuts, Inc.
and NovaMed Eyecare Services, LLC

*Each document is dated
as of June 28, 2000 (as amended, restated, reaffirmed or otherwise modified as
of the date hereof).

 

 

 

 

 

 

 

 

EXHIBIT
J

Form of Adjusted Equity Ownership EBITDA
Certificate

[Exhibit reference
removed from Credit Agreement]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT
K

Permitted Asset Dispositions

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

A.

Transactions
with any of its remaining affiliated ophthalmology and/or optometry practices
in which (a) the Borrower or any of its Subsidiaries: (i) terminates its
Management Service Agreement, (ii) terminates any or all employment agreements
between doctors and the practices that are a party to such Management Service
Agreement, (iii) terminates any or all employees of the Borrower or its
Subsidiaries who provide services to the practices under such Management Service
Agreements, and/or (iv) transfers any, all or substantially all of the assets
relating to the services performed under such Management Service Agreements
(including, without limitation, such practice’s optical dispensaries), which
may include, without limitation, fixed assets, equipment, information
technology hardware and software, leasehold interests, accounts receivable and
inventory and (b) the Borrower shall have delivered to the Agent, not later than
thirty (30) days after the closing of such transaction, a copy of the principal
documents executed and delivered in connection therewith.

B.

The
following transactions that are the subject of existing option agreements with
various physicians pursuant to which such physicians have the right to purchase
equity interests in the referenced ASC Subsidiary:

(a)
Sale of 25% interest in NovaMed Surgery Center of Fort Lauderdale, LLC.

(b)
Closure of facility acquired in Surgicare of Jeffersonville Acquisition.

(c) Sale of
substantially all of the assets of, equity interest in, or closure of the
facility operated by, NovaMed Eye Surgery Center (Plaza), LLC.EXHIBIT
4.3

 

 

 

 

FORM OF SENIOR INDENTURE

NOVAMED,
INC.,

ISSUER

and

[                        ],

TRUSTEE

INDENTURE

Dated as
of [               ],
200[ ]

Senior
Debt Securities

 

 

 

 

 

 

TABLE OF CONTENTS(1)

 

	
  

  	
   

  	
   

  	
  Page

  
	
  ARTICLE I

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.01

  	
   

  	
  Definitions of Terms

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
  ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION 

  AND EXCHANGE OF SECURITIES

  	
   

  5

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.01

  	
   

  	
  Designation and Terms of Securities

  	
  5

  
	
  SECTION 2.02

  	
   

  	
  Form of Securities and Trustee’s Certificate

  	
  6

  
	
  SECTION 2.03

  	
   

  	
  Denominations; Provisions for Payment

  	
  7

  
	
  SECTION 2.04

  	
   

  	
  Execution and Authentications

  	
  8

  
	
  SECTION 2.05

  	
   

  	
  Registration of Transfer and Exchange

  	
  9

  
	
  SECTION 2.06

  	
   

  	
  Temporary Securities

  	
  10

  
	
  SECTION 2.07

  	
   

  	
  Mutilated, Destroyed, Lost or Stolen Securities

  	
  10

  
	
  SECTION 2.08

  	
   

  	
  Cancellation

  	
  11

  
	
  SECTION 2.09

  	
   

  	
  Benefits of Indenture

  	
  11

  
	
  SECTION 2.10

  	
   

  	
  Authenticating Agent

  	
  12

  
	
  SECTION 2.11

  	
   

  	
  Global Securities

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
  REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.01

  	
   

  	
  Redemption

  	
  13

  
	
  SECTION 3.02

  	
   

  	
  Notice of Redemption

  	
  13

  
	
  SECTION 3.03

  	
   

  	
  Payment Upon Redemption

  	
  14

  
	
  SECTION 3.04

  	
   

  	
  Sinking Fund

  	
  15

  
	
  SECTION 3.05

  	
   

  	
  Satisfaction of Sinking Fund Payments with
  Securities

  	
  15

  
	
  SECTION 3.06

  	
   

  	
  Redemption of Securities for Sinking Fund

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
  COVENANTS

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.01

  	
   

  	
  Payment of Principal, Premium and Interest

  	
  16

  
	
  SECTION 4.02

  	
   

  	
  Maintenance of Office or Agency

  	
  16

  
	
  SECTION 4.03

  	
   

  	
  Paying Agents

  	
  16

  
	
  SECTION 4.04

  	
   

  	
  Appointment to Fill Vacancy in Office of Trustee

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
  SECURITYHOLDERS’ LISTS AND REPORTS BY THE COMPANY
  AND THE TRUSTEE

  	
  17

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.01

  	
   

  	
  Company to Furnish Trustee Names and Addresses of
  Securityholders

  	
  17

  
	
  SECTION 5.02

  	
   

  	
  Preservation Of Information; Communications With
  Securityholders

  	
  18

  
	
  SECTION 5.03

  	
   

  	
  Reports by the Company

  	
  18

  
	
  SECTION 5.04

  	
   

  	
  Reports by the Trustee

  	
  19

  
					

 

 i
 

 

	
  ARTICLE VI

  	
  REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT
  OF DEFAULT

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.01

  	
   

  	
  Events of Default

  	
  19

  
	
  SECTION 6.02

  	
   

  	
  Suits for Enforcement by Trustee

  	
  21

  
	
  SECTION 6.03

  	
   

  	
  Application of Moneys Collected

  	
  22

  
	
  SECTION 6.04

  	
   

  	
  Limitation on Suits

  	
  22

  
	
  SECTION 6.05

  	
   

  	
  Rights and Remedies Cumulative; Delay or Omission
  Not Waiver

  	
  23

  
	
  SECTION 6.06

  	
   

  	
  Control by Securityholders

  	
  23

  
	
  SECTION 6.07

  	
   

  	
  Undertaking to Pay Costs

  	
  24

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
  CONCERNING THE TRUSTEE

  	
  24

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.01

  	
   

  	
  Certain Duties and Responsibilities of Trustee

  	
  24

  
	
  SECTION 7.02

  	
   

  	
  Certain Rights of Trustee

  	
  25

  
	
  SECTION 7.03

  	
   

  	
  Trustee Not Responsible for Recitals or Issuance or
  Securities

  	
  26

  
	
  SECTION 7.04

  	
   

  	
  May Hold Securities

  	
  27

  
	
  SECTION 7.05

  	
   

  	
  Moneys Held in Trust

  	
  27

  
	
  SECTION 7.06

  	
   

  	
  Compensation and Reimbursement

  	
  27

  
	
  SECTION 7.07

  	
   

  	
  Reliance on Officers’ Certificate

  	
  27

  
	
  SECTION 7.08

  	
   

  	
  Disqualification; Conflicting Interests

  	
  28

  
	
  SECTION 7.09

  	
   

  	
  Corporate Trustee Required; Eligibility

  	
  28

  
	
  SECTION 7.10

  	
   

  	
  Resignation and Removal; Appointment of Successor

  	
  28

  
	
  SECTION 7.11

  	
   

  	
  Acceptance of Appointment By Successor

  	
  29

  
	
  SECTION 7.12

  	
   

  	
  Merger, Conversion, Consolidation or Succession to
  Business

  	
  31

  
	
  SECTION 7.13

  	
   

  	
  Preferential Collection of Claims Against the
  Company

  	
  31

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
  CONCERNING THE SECURITYHOLDERS

  	
  31

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.01

  	
   

  	
  Evidence of Action by Securityholders

  	
  31

  
	
  SECTION 8.02

  	
   

  	
  Proof of Execution by Securityholders

  	
  32

  
	
  SECTION 8.03

  	
   

  	
  Who May be Deemed Owners

  	
  32

  
	
  SECTION 8.04

  	
   

  	
  Certain Securities Owned by Company Disregarded

  	
  32

  
	
  SECTION 8.05

  	
   

  	
  Actions Binding on Future Securityholders

  	
  33

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
  SUPPLEMENTAL INDENTURES

  	
  33

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.01

  	
   

  	
  Supplemental Indentures Without the Consent of
  Securityholders

  	
  33

  
	
  SECTION 9.02

  	
   

  	
  Supplemental Indentures With Consent of
  Securityholders

  	
  34

  
	
  SECTION 9.03

  	
   

  	
  Effect of Supplemental Indentures

  	
  34

  
	
  SECTION 9.04

  	
   

  	
  Securities Affected by Supplemental Indentures

  	
  35

  
	
  SECTION 9.05

  	
   

  	
  Execution of Supplemental Indentures

  	
  35

  
	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
  SUCCESSOR ENTITY

  	
  36

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.01

  	
   

  	
  Company May Consolidate, Etc

  	
  36

  

 

 ii
 

 

	
  SECTION 10.02

  	
   

  	
  Successor Entity Substituted

  	
  36

  
	
  SECTION 10.03

  	
   

  	
  Evidence of Consolidation, Etc

  	
  37

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
  SATISFACTION AND DISCHARGE

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.01

  	
   

  	
  Satisfaction and Discharge of Indenture

  	
  37

  
	
  SECTION 11.02

  	
   

  	
  Discharge of Obligations

  	
  37

  
	
  SECTION 11.03

  	
   

  	
  Deposited Moneys to be Held in Trust

  	
  38

  
	
  SECTION 11.04

  	
   

  	
  Payment of Moneys Held by Paying Agents

  	
  38

  
	
  SECTION 11.05

  	
   

  	
  Repayment to Company

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
  IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
  AND DIRECTORS

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.01

  	
   

  	
  No Recourse

  	
  38

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
  MISCELLANEOUS PROVISIONS

  	
  39

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.01

  	
   

  	
  Effect on Successors and Assigns

  	
  39

  
	
  SECTION 13.02

  	
   

  	
  Actions by Successor

  	
  39

  
	
  SECTION 13.03

  	
   

  	
  Notices

  	
  39

  
	
  SECTION 13.04

  	
   

  	
  Governing Law

  	
  39

  
	
  SECTION 13.05

  	
   

  	
  Compliance Certificates and Opinions

  	
  40

  
	
  SECTION 13.06

  	
   

  	
  Payments on Business Days

  	
  40

  
	
  SECTION 13.07

  	
   

  	
  Conflict with Trust Indenture Act

  	
  40

  
	
  SECTION 13.08

  	
   

  	
  Counterparts

  	
  40

  
	
  SECTION 13.09

  	
   

  	
  Separability

  	
  41

  
	
  SECTION 13.10

  	
   

  	
  Assignment

  	
  41

  
	
   

  	
   

  	
   

  	
   

  
	
  (1)

  	
   

  	
  This Table of Contents does not constitute part of
  the Indenture and shall not have any bearing on the interpretation of any of
  its terms or provisions.

  	
   

  
						

 

 iii

INDENTURE, dated as of [      ], 200[ ], between NovaMed, Inc., a
Delaware corporation (the “Company”), and

[        ], as trustee (the “Trustee”):

WHEREAS, for its lawful corporate purposes, the
Company has duly authorized the execution and delivery of this Indenture to
provide for the issuance of unsecured debt securities (hereinafter referred to
as the “Securities”), in an unlimited aggregate principal amount to be issued
from time to time in one or more series as in this Indenture provided, as
registered Securities without coupons, to be authenticated by the certificate
of the Trustee;

WHEREAS, to provide the terms and conditions upon
which the Securities are to be authenticated, issued and delivered, the Company
has duly authorized the execution of this Indenture; and

WHEREAS, all things necessary to make this Indenture a
valid agreement of the Company, in accordance with its terms, have been done.

NOW, THEREFORE, in consideration of the premises and
the purchase of the Securities by the holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable benefit of the
holders of Securities:

ARTICLE I

DEFINITIONS

SECTION 1.01                                                              Definitions
of Terms.

The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section and shall
include the plural as well as the singular. 
All other terms used in this Indenture that are defined in the Trust
Indenture Act of 1939, as amended, or that are by reference in such Act defined
in the Securities Act of 1933, as amended (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in said Securities Act
as in force at the date of the execution of this instrument.

“Authenticating Agent” means an authenticating agent
with respect to all or any of the series of Securities appointed with respect
to all or any series of the Securities by the Trustee pursuant to Section 2.10.

“Bankruptcy Law” means Title 11, U.S. Code, or any
similar federal or state law for the relief of debtors.

“Board of Directors” means the Board of Directors of
the Company or any duly authorized committee of such Board.

 1
 

“Board Resolution” means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the Company to have
been duly adopted by the Board of Directors and to be in full force and effect
on the date of such certification.

“Business Day” means, with respect to any series of
Securities, any day other than a day on which Federal or State banking
institutions in New York City, are authorized or obligated by law, executive
order or regulation to close.

“Certificate” means a certificate signed by the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company.  The
Certificate need not comply with the provisions of Section 13.05.

“Company” means NovaMed, Inc., a corporation duly
organized and existing under the laws of the State of Delaware, and, subject to
the provisions of Article Ten, shall also include its successors and assigns.

“Corporate Trust Office” means the office of the
Trustee at which, at any particular time, its corporate trust business shall be
principally administered, which office at the date hereof is located at [                          ], except that
whenever a provision herein refers to an office or agency of the Trustee in the
New York City, such office is located, at the date hereof, at [                    ].

“Custodian” means any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.

“Default” means any event, act or condition that with
notice or lapse of time, or both, would constitute an Event of Default.

“Depositary” means, with respect to Securities of any
series, for which the Company shall determine that such Securities will be
issued as a Global Security, The Depository Trust Company, New York, New York,
another clearing agency, or any successor registered as a clearing agency under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to either Section 2.01 or 2.11.

“Event of Default” means, with respect to Securities
of a particular series any event specified in Section 6.01, continued for the
period of time, if any, therein designated.

“Global Security” means, with respect to any series of
Securities, a Security executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary’s instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.

“Governmental Obligations” means securities that are
(i) direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of the United
States of America, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America that, in either
case, are not callable or redeemable at 

 2
 

the option of the issuer
thereof, and shall also include a depositary receipt issued by a bank (as
defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as
custodian with respect to any such Governmental Obligation or a specific
payment of principal of or interest on any such Governmental Obligation held by
such custodian for the account of the holder of such depositary receipt;
provided, however, that (except as required by law) such custodian is not authorized
to make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the
Governmental Obligation or the specific payment of principal of or interest on
the Governmental Obligation evidenced by such depositary receipt.

“Herein,” “hereof” and “hereunder,” and other words of
similar import, refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.

“Indenture” means this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into in accordance with the terms
hereof.

“Interest Payment Date,” when used with respect to any
installment of interest on a Security of a particular series, means the date
specified in such Security or in a Board Resolution or in an indenture
supplemental hereto with respect to such series as the fixed date on which an
installment of interest with respect to Securities of that series is due and
payable.

“Officers’ Certificate” means a certificate signed by
the President or a Executive Vice President and by the Treasurer or an
Assistant Treasurer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary of the Company that is delivered to the
Trustee in accordance with the terms hereof. 
Each such certificate shall include the statements provided for in
Section 13.05, if and to the extent required by the provisions thereof.

“Opinion of Counsel” means an opinion in writing of
legal counsel, who may be an employee of or counsel for the Company, that is
delivered to the Trustee in accordance with the terms hereof.  Each such opinion shall include the
statements provided for in Section 13.05, if and to the extent required by the
provisions thereof.

“Outstanding,” when used with reference to Securities
of any series, means, subject to the provisions of Section 8.04, as of any
particular time, all Securities of that series theretofore authenticated and
delivered by the Trustee under this Indenture, except (a) Securities
theretofore canceled by the Trustee or any paying agent, or delivered to the
Trustee or any paying agent for cancellation or that have previously been
canceled; (b) Securities or portions thereof for the payment or redemption of
which moneys or Governmental Obligations in the necessary amount shall have
been deposited in trust with the Trustee or with any paying agent (other than
the Company) or shall have been set aside and segregated in trust by the
Company (if the Company shall act as its own paying agent); provided, however,
that if such Securities or portions of such Securities are to be redeemed prior
to the maturity thereof, notice of such redemption shall have been given as in
Article Three provided, or provision satisfactory to the Trustee shall have
been made for giving such notice; and (c) Securities in lieu of or in
substitution for which other Securities shall have been authenticated and
delivered pursuant to the terms of Section 2.07.

 3
 

“Person” means any individual, corporation,
partnership, joint venture, joint-stock company, unincorporated organization or
government or any agency or political subdivision thereof.

“Predecessor Security” of any particular Security
means every previous Security evidencing all or a portion of the same debt as
that evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 2.07 in lieu
of a lost, destroyed or stolen Security shall be deemed to evidence the same
debt as the lost, destroyed or stolen Security.

“Responsible Officer” when used with respect to the
Trustee means the President, any Executive Vice President, the Secretary, the
Treasurer, any trust officer, any corporate trust officer or any other officer
or assistant officer of the Trustee customarily performing functions similar to
those performed by the Persons who at the time shall be such officers,
respectively, or to whom any corporate trust matter is referred because of his
or her knowledge of and familiarity with the particular subject.

“Securities” means the debt Securities authenticated
and delivered under this Indenture.

“Securityholder,” “holder of Securities,” “registered
holder” or other similar term, means the Person or Persons in whose name or
names a particular Security shall be registered on the books of the Company
kept for that purpose in accordance with the terms of this Indenture.

“Subsidiary” means, with respect to any Person, (i)
any corporation at least a majority of whose outstanding Voting Stock shall at
the time be owned, directly or indirectly, by such Person or by one or more of
its Subsidiaries or by such Person and one or more of its Subsidiaries, (ii)
any general partnership, joint venture or similar entity, at least a majority
of whose outstanding partnership or similar interests shall at the time be
owned by such Person, or by one or more of its Subsidiaries, or by such Person
and one or more of its Subsidiaries and (iii) any limited partnership of which
such Person or any of its Subsidiaries is a general partner.

“Trustee” means [         ], and, subject to the provisions of
Article Seven, shall also include its successors and assigns, and, if at any
time there is more than one Person acting in such capacity hereunder, “Trustee”
shall mean each such Person. The term “Trustee” as used with respect to a
particular series of the Securities shall mean the trustee with respect to that
series.

“Trust Indenture Act” means the Trust Indenture Act of
1939, as amended, subject to the provisions of Sections 9.01, 9.02 and 10.01,
as in effect at the date of execution of this instrument.

“Voting Stock,” as applied to stock of any Person,
means shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.

 4
 

ARTICLE II

 

ISSUE, DESCRIPTION, TERMS, EXECUTION, 

REGISTRATION AND EXCHANGE OF SECURITIES

 

SECTION 2.01                                                              Designation
and Terms of Securities.

(a)           The
aggregate principal amount of Securities that may be authenticated and
delivered under this Indenture is unlimited. 
The Securities may be issued in one or more series up to the aggregate
principal amount of Securities of that series from time to time authorized by
or pursuant to a Board Resolution of the Company or pursuant to one or more
indentures supplemental hereto.  Prior to
the initial issuance of Securities of any series, there shall be established in
or pursuant to a Board Resolution, and set forth in an Officers’ Certificate,
or established in one or more indentures supplemental hereto:

(1)           the title of the Security of the
series (which shall distinguish the Securities of the series from all other
Securities);

(2)           any limit upon the aggregate
principal amount of the Securities of that series that may be authenticated and
delivered under this Indenture (except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of that series);

(3)           the date or dates on which the
principal of the Securities of the series is payable and the place(s) of
payment;

(4)           the rate or rates at which the
Securities of the series shall bear interest or the manner of calculation of
such rate or rates, if any;

(5)           the date or dates from which such
interest shall accrue, the Interest Payment Dates on which such interest will
be payable or the manner of determination of such Interest Payment Dates, the
place(s) of payment, and the record date for the determination of holders to
whom interest is payable on any such Interest Payment Dates;

(6)           the right, if any, to extend the
interest payment periods and the duration of such extension;

(7)           the period or periods within which,
the price or prices at which and the terms and conditions upon which,
Securities of the series may be redeemed, in whole or in part, at the option of
the Company;

(8)           the obligation, if any, of the
Company to redeem or purchase Securities of the series pursuant to any sinking
fund or analogous provisions (including payments made in cash in satisfaction
of future sinking fund obligations) or at the option of a holder thereof and
the period or periods within which, the price or prices at which, and the terms
and conditions upon which, Securities of the series shall be redeemed or
purchased, in whole or in part, pursuant to such obligation;

 5
 

(9)           the
form of the Securities of the series including the form of the certificate of
authentication for such series;

(10)         if other than denominations of one
thousand U.S. dollars ($1,000) or any integral multiple thereof, the
denominations in which the Securities of the series shall be issuable;

(11)         any and all other terms with respect to
such series (which terms shall not be inconsistent with the terms of this
Indenture, as amended by any supplemental indenture) including any terms which
may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Securities of that series;

(12)         whether the Securities are issuable as
a Global Security and, in such case, the identity of the Depositary for such
series;

(13)         whether the Securities will be
convertible into shares of common stock or other securities of the Company and,
if so, the terms and conditions upon which such Securities will be so
convertible, including the conversion price and the conversion period;

(14)         if other than the principal amount
thereof, the portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the maturity thereof
pursuant to Section 6.01; and

(15)         any additional or different Events of
Default or restrictive covenants provided for with respect to the Securities of
the series.

All Securities of any one series shall be
substantially identical except as to denomination and except as may otherwise
be provided in or pursuant to any such Board Resolution or in any indentures
supplemental hereto.

If any of the terms of the series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Officers’ Certificate setting forth the terms of the series.

Securities of any particular series may be issued at
various times, with different dates on which the principal or any installment
of principal is payable, with different rates of interest, if any, or different
methods by which rates of interest may be determined, with different dates on
which such interest may be payable and with different redemption dates.

SECTION 2.02                                                              Form
of Securities and Trustee’s Certificate.

The Securities of any series and the Trustee’s
certificate of authentication to be borne by such Securities shall be
substantially of the tenor and purport as set forth in one or more indentures
supplemental hereto or as provided in a Board Resolution and as set forth in an
Officers’ Certificate and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements printed, lithographed
or engraved thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant 

 6
 

thereto or with any rule
or regulation of any stock exchange on which Securities of that series may be
listed, or to conform to usage.

SECTION 2.03                                                              Denominations;
Provisions for Payment.

The Securities shall be issuable as registered
Securities and in the denominations of one thousand U.S. dollars ($1,000) or
any integral multiple thereof, subject to Section 2.01(10).  The Securities of a particular series shall
bear interest payable on the dates and at the rate specified with respect to
that series.  The principal of and the
interest on the Securities of any series, as well as any premium thereon in
case of redemption thereof prior to maturity, shall be payable in the coin or
currency of the United States of America that at the time is legal tender for
public and private debt, at the office or agency of the Company maintained for
that purpose in New York City.  Each
Security shall be dated the date of its authentication.  Interest on the Securities shall be computed
on the basis of a 360-day year composed of twelve 30-day months.

The interest installment on any Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date for Securities of that series shall be paid to the Person in whose name
said Security (or one or more Predecessor Securities) is registered at the
close of business on the regular record date for such interest
installment.  In the event that any
Security of a particular series or portion thereof is called for redemption and
the redemption date is subsequent to a regular record date with respect to any
Interest Payment Date and prior to such Interest Payment Date, interest on such
Security will be paid upon presentation and surrender of such Security as
provided in Section 3.03.

Any interest on any Security that is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date for
Securities of the same series (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the registered holder on the relevant regular
record date by virtue of having been such holder; and such Defaulted Interest
shall be paid by the Company, at its election, as provided in clause (1) or
clause (2) below:

(1)           The Company may make payment of any
Defaulted Interest on Securities to the Persons in whose names such Securities
(or their respective Predecessor Securities) are registered at the close of
business on a special record date for the payment of such Defaulted Interest,
which shall be fixed in the following manner: 
the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security and the date of
the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided.  Thereupon the Trustee shall fix a special
record date for the payment of such Defaulted Interest which shall not be more
than 15 nor less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment.  The Trustee shall
promptly notify the Company of such special record date and, in the name and at
the expense of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the special record date therefor to be mailed, first
class postage prepaid, to each Securityholder at his or her address as it
appears in the Security Register (as hereinafter defined), not less than 10
days 

 7
 

prior to such special record date.  Notice of the proposed payment of such
Defaulted Interest and the special record date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose names
such Securities (or their respective Predecessor Securities) are registered on
such special record date.

(2)           The Company may make payment of any
Defaulted Interest on any Securities in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

Unless otherwise set forth in a Board Resolution or
one or more indentures supplemental hereto establishing the terms of any series
of Securities pursuant to Section 2.01 hereof, the term “regular record date”
as used in this Section with respect to a series of Securities with respect to
any Interest Payment Date for such series shall mean either the fifteenth day
of the month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the first day of a month, or the last day of the
month immediately preceding the month in which an Interest Payment Date
established for such series pursuant to Section 2.01 hereof shall occur, if
such Interest Payment Date is the fifteenth day of a month, whether or not such
date is a Business Day.

Subject to the foregoing provisions of this Section,
each Security of a series delivered under this Indenture upon transfer of or in
exchange for or in lieu of any other Security of such series shall carry the
rights to interest accrued and unpaid, and to accrue, that were carried by such
other Security.

SECTION 2.04                                                              Execution
and Authentications.

The Securities shall be signed on behalf of the
Company by its President, or one of its Executive Vice Presidents, or its
Treasurer, or one of its Assistant Treasurers, or its Secretary, or one of its
Assistant Secretaries, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. 
Signatures may be in the form of a manual or facsimile signature.  The Company may use the facsimile signature
of any Person who shall have been a President or Executive Vice President
thereof, or of any Person who shall have been a Secretary or Assistant
Secretary thereof, notwithstanding the fact that at the time the Securities
shall be authenticated and delivered or disposed of such Person shall have
ceased to be the President or a Executive Vice President, or the Secretary or
an Assistant Secretary, of the Company. 
The seal of the Company may be in the form of a facsimile of such seal
and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities.  The Securities may contain
such notations, legends or endorsements required by law, stock exchange rule or
usage.  Each Security shall be dated the
date of its authentication by the Trustee.

A Security shall not be valid until authenticated
manually by an authorized signatory of the Trustee, or by an Authenticating
Agent.  Such signature shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.  At any time
and from time to time after the 

 8
 

execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a written order of
the Company for the authentication and delivery of such Securities, signed by
its President or any Executive Vice President and its Secretary or any Assistant
Secretary, and the Trustee in accordance with such written order shall
authenticate and deliver such Securities.

In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and (subject to Section
7.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the form and terms thereof have been established in conformity with the
provisions of this Indenture.

The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
affect the Trustee’s own rights, duties or immunities under the Securities and
this Indenture or otherwise in a manner that is not reasonably acceptable to
the Trustee.

SECTION 2.05                                                              Registration
of Transfer and Exchange.

(a)           Securities
of any series may be exchanged upon presentation thereof at the office or
agency of the Company designated for such purpose in New York City, for other
Securities of such series of authorized denominations, and for a like aggregate
principal amount, upon payment of a sum sufficient to cover any tax or other
governmental charge in relation thereto, all as provided in this Section. In
respect of any Securities so surrendered for exchange, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in exchange therefor the Security or Securities of the same series that the
Securityholder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.

(b)           The
Company shall keep, or cause to be kept, at its office or agency designated for
such purpose in New York City, or such other location designated by the Company
a register or registers (herein referred to as the “Security Register”) in
which, subject to such reasonable regulations as it may prescribe, the Company
shall register the Securities and the transfers of Securities as in this
Article provided and which at all reasonable times shall be open for inspection
by the Trustee.  The registrar for the
purpose of registering Securities and transfer of Securities as herein provided
shall be appointed as authorized by a Board Resolution (the “Security Registrar”).

Upon surrender for transfer of any Security at the
office or agency of the Company designated for such purpose, the Company shall
execute, the Trustee shall authenticate and such office or agency shall deliver
in the name of the transferee or transferees a new Security or Securities of the
same series as the Security presented for a like aggregate principal amount.

All Securities presented or surrendered for exchange
or registration of transfer, as provided in this Section, shall be accompanied
(if so required by the Company or the Security Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Company or
the Security Registrar, duly executed by the registered holder or by such
holder’s duly authorized attorney in writing.

 9
 

(c)           No service charge shall be made for
any exchange or registration of transfer of Securities, or issue of new
Securities in case of partial redemption of any series, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge in relation thereto, other than exchanges pursuant to Section 2.06,
Section 3.03(b) and Section 9.04 not involving any transfer.

(d)           `The
Company shall not be required (1) to issue, exchange or register the transfer
of any Securities during a period beginning at the opening of business 15 days
before the day of the mailing of a notice of redemption of less than all the
Outstanding Securities of the same series and ending at the close of business
on the day of such mailing, nor (2) to register the transfer of or exchange any
Securities of any series or portions thereof called for redemption.  The provisions of this Section 2.05 are, with
respect to any Global Security, subject to Section 2.11 hereof.

SECTION 2.06                                                              Temporary
Securities.

Pending the preparation of definitive Securities of
any series, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Securities (printed, lithographed or typewritten) of any
authorized denomination.  Such temporary
Securities shall be substantially in the form of the definitive Securities in
lieu of which they are issued, but with such omissions, insertions and
variations as may be appropriate for temporary Securities, all as may be
determined by the Company.  Every
temporary Security of any series shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Securities of such
series.  Without unnecessary delay the
Company will execute and will furnish definitive Securities of such series and
thereupon any or all temporary Securities of such series may be surrendered in
exchange therefor (without charge to the holders), at the office or agency of
the Company designated for the purpose in New York City, and the Trustee shall
authenticate and such office or agency shall deliver in exchange for such
temporary Securities an equal aggregate principal amount of definitive
Securities of such series, unless the Company advises the Trustee to the effect
that definitive Securities need not be executed and furnished until further
notice from the Company.  Until so
exchanged, the temporary Securities of such series shall be entitled to the
same benefits under this Indenture as definitive Securities of such series
authenticated and delivered hereunder.

SECTION 2.07                                                              Mutilated,
Destroyed, Lost or Stolen Securities.

In case any temporary or definitive Security shall
become mutilated or be destroyed, lost or stolen, the Company (subject to the
next succeeding sentence) shall execute, and upon the Company’s request, the
Trustee (subject as aforesaid) shall authenticate and deliver, a new Security
of the same series, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen.  In every case the applicant for a substituted
Security shall furnish to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of the applicant’s Security and of the ownership thereof.  The Trustee may authenticate any such
substituted Security and deliver the same upon the written request or
authorization of any officer 

 10
 

of the Company.  Upon the issuance of any substituted
Security, the Company may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in relation thereto and any
other expenses (including the fees and expenses of the Trustee) connected
therewith.  In case any Security that has
matured or is about to mature shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Security, pay or
authorize the payment of the same (without surrender thereof except in the case
of a mutilated Security) if the applicant for such payment shall furnish to the
Company and the Trustee such security or indemnity as they may require to save
each of them harmless, and, in case of destruction, loss or theft, evidence to
the satisfaction of the Company and the Trustee of the destruction, loss or
theft of such Security and of the ownership thereof.

Every replacement Security issued pursuant to the
provisions of this Section shall constitute an additional contractual
obligation of the Company whether or not the mutilated, destroyed, lost or
stolen Security shall be found at any time, or be enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of the same series duly
issued hereunder.  All Securities shall
be held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and
all other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.

SECTION 2.08                                                              Cancellation.

All Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be cancelled by it, and no Securities
shall be issued in lieu thereof except as expressly required or permitted by
any of the provisions of this Indenture. 
On request of the Company at the time of such surrender, the Trustee
shall deliver to the Company canceled Securities held by the Trustee.  In the absence of such request the Trustee
may dispose of canceled Securities in accordance with its standard procedures
and deliver a certificate of disposition to the Company.  If the Company shall otherwise acquire any of
the Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and
until the same are delivered to the Trustee for cancellation.

SECTION 2.09                                                              Benefits
of Indenture.

Nothing in this Indenture or in the Securities,
express or implied, shall give or be construed to give to any Person, other
than the parties hereto and the holders of the Securities, any legal or
equitable right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all such
covenants, conditions and provisions being for the sole benefit of the parties
hereto and of the holders of the Securities.

 

 11

SECTION
2.10                                                              Authenticating
Agent.

So long as any of the Securities of any series remain
Outstanding there may be an Authenticating Agent for any or all such series of
Securities which the Trustee shall have the right to appoint.  Said Authenticating Agent shall be authorized
to act on behalf of the Trustee to authenticate Securities of such series
issued upon exchange, transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee
hereunder.  All references in this
Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series.  Each Authenticating Agent shall be acceptable
to the Company and shall be a corporation that has a combined capital and
surplus, as most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which it is doing
business to conduct a trust business, and that is otherwise authorized under
such laws to conduct such business and is subject to supervision or examination
by Federal or State authorities.  If at
any time any Authenticating Agent shall cease to be eligible in accordance with
these provisions, it shall resign immediately.

Any Authenticating Agent may at any time resign by
giving written notice of resignation to the Trustee and to the Company.  The Trustee may at any time (and upon request
by the Company shall) terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and to the
Company.  Upon resignation, termination
or cessation of eligibility of any Authenticating Agent, the Trustee may
appoint an eligible successor Authenticating Agent acceptable to the
Company.  Any successor Authenticating
Agent, upon acceptance of its appointment hereunder, shall become vested with
all the rights, powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.

SECTION
2.11                                                              Global
Securities.

(a)           If the Company shall establish
pursuant to Section 2.01 that the Securities of a particular series are to be
issued as a Global Security, then the Company shall execute and the Trustee
shall, in accordance with Section 2.04, authenticate and deliver, a Global
Security that (1) shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Securities of such
series, (2) shall be registered in the name of the Depositary or its nominee,
(3) shall be delivered by the Trustee to the Depositary or pursuant to the
Depositary’s instruction and (4) shall bear a legend substantially to the
following effect:  “Except as otherwise
provided in Section 2.11 of the Indenture, this Security may be transferred, in
whole but not in part, only to another nominee of the Depositary or to a
successor Depositary or to a nominee of such successor Depositary.”

(b)           Notwithstanding the provisions of
Section 2.05, the Global Security of a series may be transferred, in whole but
not in part and in the manner provided in Section 2.05, only to another nominee
of the Depositary for such series, or to a successor Depositary for such series
selected or approved by the Company or to a nominee of such successor
Depositary.

 12
 

(c)           If
at any time the Depositary for a series of the Securities notifies the Company
that it is unwilling or unable to continue as Depositary for such series or if
at any time the Depositary for such series shall no longer be registered or in
good standing under the Exchange Act, or other applicable statute or
regulation, and a successor Depositary for such series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such condition, as the case may be, this Section 2.11 shall no longer be
applicable to the Securities of such series and the Company will execute and,
subject to Section 2.05, the Trustee will authenticate and deliver the
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security.  In addition, the
Company may at any time determine that the Securities of any series shall no
longer be represented by a Global Security and that the provisions of this
Section 2.11 shall no longer apply to the Securities of such series.  In such event the Company will execute and,
subject to Section 2.05, the Trustee, upon receipt of an Officers’ Certificate
evidencing such determination by the Company, will authenticate and deliver the
Securities of such series in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal to the
principal amount of the Global Security of such series in exchange for such
Global Security.  Upon the exchange of
the Global Security for such Securities in definitive registered form without
coupons, in authorized denominations, the Global Security shall be canceled by
the Trustee.  Such Securities in
definitive registered form issued in exchange for the Global Security pursuant
to this Section 2.11(c) shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall instruct the Trustee.  The Trustee shall deliver such Securities to
the Depositary for delivery to the Persons in whose names such Securities are
so registered.

ARTICLE
III

REDEMPTION
OF SECURITIES AND SINKING FUND PROVISIONS

SECTION
3.01                                                              Redemption.

The Company may redeem the Securities of any series
issued hereunder on and after the dates and in accordance with the terms
established for such series pursuant to Section 2.01 hereof.

SECTION
3.02                                                              Notice
of Redemption.

(a)           In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a portion of the
Securities of any series in accordance with the right reserved so to do, the
Company shall, or shall cause the Trustee to, give notice of such redemption to
holders of the Securities of such series to be redeemed by mailing, first class
postage prepaid, a notice of such redemption not less than 30 days and not more
than 90 days before the date fixed for redemption of that series to such
holders at their last addresses as they shall appear upon the Security Register
unless a shorter period is specified in the Securities to be redeemed.  Any notice that is mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the registered holder receives the notice.  In any case, failure duly to give such notice
to the holder of any Security of any series designated for redemption in whole
or in part,

 13
 

or any defect
in the notice, shall not affect the validity of the proceedings for the
redemption of any other Securities of such series or any other series.  In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers’ Certificate evidencing compliance with
any such restriction.

Each such notice of redemption shall specify the date
fixed for redemption and the redemption price at which Securities of that
series are to be redeemed, and shall state that payment of the redemption price
of such Securities to be redeemed will be made at the office or agency of the
Company in New York City, upon presentation and surrender of such Securities,
that interest accrued to the date fixed for redemption will be paid as
specified in said notice, that from and after said date interest will cease to
accrue and that the redemption is for a sinking fund, if such is the case.  If less than all the Securities of a series
are to be redeemed, the notice to the holders of Securities of that series to
be redeemed in whole or in part shall specify the particular Securities to be
so redeemed.  In case any Security is to
be redeemed in part only, the notice that relates to such Security shall state
the portion of the principal amount thereof to be redeemed, and shall state
that on and after the redemption date, upon surrender of such Security, a new
Security or Securities of such series in principal amount equal to the
unredeemed portion thereof will be issued.

(b)           If less than all the Securities of a
series are to be redeemed, the Company shall give the Trustee at least 45 days’
notice in advance of the date fixed for redemption as to the aggregate
principal amount of Securities of the series to be redeemed, and thereupon the
Trustee shall select, by lot or in such other manner as it shall deem
appropriate and fair in its discretion and that may provide for the selection
of a portion or portions (equal to one thousand U.S. dollars ($1,000) or any
integral multiple thereof) of the principal amount of such Securities of a
denomination larger than $1,000, the Securities to be redeemed and shall
thereafter promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part. 
The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Executive Vice
President, instruct the Trustee or any paying agent to call all or any part of
the Securities of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may
deem advisable.  In any case in which
notice of redemption is to be given by the Trustee or any such paying agent,
the Company shall deliver or cause to be delivered to, or permit to remain
with, the Trustee or such paying agent, as the case may be, such Security
Register, transfer books or other records, or suitable copies or extracts
therefrom, sufficient to enable the Trustee or such paying agent to give any
notice by mail that may be required under the provisions of this Section.

SECTION
3.03                                                              Payment
Upon Redemption.

(a)           If the giving of notice of redemption
shall have been completed as above provided, the Securities or portions of
Securities of the series to be redeemed specified in such notice shall become
due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption and interest on such Securities or portions of Securities shall
cease to accrue on and after the date fixed for redemption, unless the Company
shall default in the payment of such redemption price and 

 14
 

accrued
interest with respect to any such Security or portion thereof.  On presentation and surrender of such
Securities on or after the date fixed for redemption at the place of payment
specified in the notice, said Securities shall be paid and redeemed at the
applicable redemption price for such series, together with interest accrued
thereon to the date fixed for redemption (but if the date fixed for redemption
is an interest payment date, the interest installment payable on such date
shall be payable to the registered holder at the close of business on the
applicable record date pursuant to Section 2.03).

(b)           Upon presentation of any Security of
such series that is to be redeemed in part only, the Company shall execute and
the Trustee shall authenticate and the office or agency where the Security is
presented shall deliver to the holder thereof, at the expense of the Company, a
new Security of the same series of authorized denominations in principal amount
equal to the unredeemed portion of the Security so presented.

SECTION
3.04                                                              Sinking
Fund.

The provisions of Sections 3.04, 3.05 and 3.06 shall
be applicable to any sinking fund for the retirement of Securities of a series,
except as otherwise specified as contemplated by Section 2.01 for Securities of
such series.

The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is herein referred to as
a “mandatory sinking fund payment,” and any payment in excess of such minimum
amount provided for by the terms of Securities of any series is herein referred
to as an “optional sinking fund payment”. 
If provided for by the terms of Securities of any series, the cash
amount of any sinking fund payment may be subject to reduction as provided in
Section 3.05.  Each sinking fund payment
shall be applied to the redemption of Securities of any series as provided for
by the terms of Securities of such series.

SECTION
3.05                                                              Satisfaction
of Sinking Fund Payments with Securities.

The Company (a) may deliver Outstanding Securities of
a series (other than any Securities previously called for redemption) and (b)
may apply as a credit Securities of a series that have been redeemed either at
the election of the Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments pursuant to the
terms of such Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Securities of such series required
to be made pursuant to the terms of such Securities, provided that such
Securities have not been previously so credited.  Such Securities shall be received and
credited for such purpose by the Trustee at the redemption price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such sinking fund payment shall be reduced accordingly.

SECTION
3.06                                                              Redemption
of Securities for Sinking Fund.

Not less than 45 days prior to each sinking fund
payment date for any series of Securities, the Company will deliver to the
Trustee an Officers’ Certificate specifying the amount of the next ensuing
sinking fund payment for that series pursuant to the terms of the series, the
portion thereof, if any, that is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 3.05 and the basis for such
credit and will, together with such Officers’ Certificate, 

 15
 

deliver to the Trustee
any Securities to be so delivered.  Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 3.02 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner
provided in Section 3.02.  Such notice
having been duly given, the redemption of such Securities shall be made upon
the terms and in the manner stated in Section 3.03.

ARTICLE
IV

COVENANTS

SECTION
4.01                                                              Payment
of Principal, Premium and Interest.

The Company will duly and punctually pay or cause to
be paid the principal of (and premium, if any) and interest on the Securities of
that series at the time and place and in the manner provided herein and
established with respect to such Securities.

SECTION
4.02                                                              Maintenance
of Office or Agency.

So long as any series of the Securities remain
Outstanding, the Company agrees to maintain an office or agency in New York
City, with respect to each such series and at such other location or locations
as may be designated as provided in this Section 4.02, where (a) Securities of
that series may be presented for payment, (b) Securities of that series may be
presented as herein above authorized for registration of transfer and exchange,
and (c) notices and demands to or upon the Company in respect of the Securities
of that series and this Indenture may be given or served, such designation to
continue with respect to such office or agency until the Company shall, by
written notice signed by its President or a Executive Vice President and
delivered to the Trustee, designate some other office or agency for such
purposes or any of them.  If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive
all such presentations, notices and demands.

SECTION
4.03                                                              Paying
Agents.

(a)           If the Company shall appoint one or
more paying agents for all or any series of the Securities, other than the
Trustee, the Company will cause each such paying agent to execute and deliver
to the Trustee an instrument in which such agent shall agree with the Trustee,
subject to the provisions of this Section:

(1)           that it will hold
all sums held by it as such agent for the payment of the principal of (and
premium, if any) or interest on the Securities of that series (whether such
sums have been paid to it by the Company or by any other obligor of such
Securities) in trust for the benefit of the Persons entitled thereto;

(2)           that it will give
the Trustee notice of any failure by the Company (or by any other obligor of
such Securities) to make any payment of the principal of (and premium, if any)
or interest on the Securities of that series when the same shall be due and
payable;

 16
 

(3)           that it will, at any time during the
continuance of any failure referred to in the preceding paragraph (a)(2) above,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such paying agent; and

(4)           that it will perform
all other duties of paying agent as set forth in this Indenture.

(b)           If the Company shall act as its own
paying agent with respect to any series of the Securities, it will on or before
each due date of the principal of (and premium, if any) or interest on
Securities of that series, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such principal
(and premium, if any) or interest so becoming due on Securities of that series
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of such action, or any
failure (by it or any other obligor on such Securities) to take such
action.  Whenever the Company shall have
one or more paying agents for any series of Securities, it will, prior to each
due date of the principal of (and premium, if any) or interest on any
Securities of that series, deposit with the paying agent a sum sufficient to
pay the principal (and premium, if any) or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to such principal,
premium or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of this action or failure so to act.

(c)           Notwithstanding anything in this
Section to the contrary, (1) the agreement to hold sums in trust as provided in
this Section is subject to the provisions of Section 11.05, and (2) the Company
may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, pay, or direct any paying agent to
pay, to the Trustee all sums held in trust by the Company or such paying agent,
such sums to be held by the Trustee upon the same terms and conditions as those
upon which such sums were held by the Company or such paying agent; and, upon
such payment by any paying agent to the Trustee, such paying agent shall be
released from all further liability with respect to such money.

SECTION
4.04                                                              Appointment
to Fill Vacancy in Office of Trustee.

The Company, whenever necessary to avoid or fill a
vacancy in the office of Trustee, will appoint, in the manner provided in
Section 7.10, a Trustee, so that there shall at all times be a Trustee
hereunder.

ARTICLE V

SECURITYHOLDERS’
LISTS AND REPORTS 

BY THE COMPANY AND THE TRUSTEE

SECTION
5.01                                                              Company
to Furnish Trustee Names and Addresses of Securityholders.

The Company will furnish or cause to be furnished to
the Trustee (a) on each regular record date (as defined in Section 2.03) a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of each series of Securities as of such regular record
date, provided that the Company shall not be obligated to furnish or cause to
be furnished such list at any time that the list shall not differ in any
respect from the most recent list furnished 

 17
 

to the Trustee by the
Company and (b) at such other times as the Trustee may request in writing
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished; provided, however, that, in either case, no such list
need be furnished for any series for which the Trustee shall be the Security
Registrar.

SECTION
5.02                                                              Preservation
Of Information; Communications With Securityholders.

(a)           The Trustee shall preserve, in as
current a form as is reasonably practicable, all information as to the names
and addresses of the holders of Securities contained in the most recent list
furnished to it as provided in Section 5.01 and as to the names and addresses
of holders of Securities received by the Trustee in its capacity as Security
Registrar (if acting in such capacity).

(b)           The Trustee may destroy any list
furnished to it as provided in Section 5.01 upon receipt of a new list so
furnished.

(c)           Securityholders may communicate as
provided in Section 312(b) of the Trust Indenture Act with other
Securityholders with respect to their rights under this Indenture or under the
Securities.  The Company, the Trustee,
the Security Registrar and any other Person shall have the protection of the
Trust Indenture Act Section 312(c).

SECTION
5.03                                                              Reports
by the Company.

(a)           The Company covenants and agrees to
file with the Trustee, within 15 days after the Company is required to file the
same with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe)
that the Company may be required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not
required to file information, documents or reports pursuant to either of such
sections, then to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the Commission, such
of the supplementary and periodic information, documents and reports that may
be required pursuant to Section 13 of the Exchange Act, in respect of a
security listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations.

(b)           The Company covenants and agrees to
file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.

(c)           The Company covenants and agrees to
transmit by mail, first class postage prepaid, or reputable overnight delivery
service that provides for evidence of receipt, to the Securityholders, as their
names and addresses appear upon the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information, documents
and reports required to

 18
 

be filed by
the Company pursuant to subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.

SECTION
5.04                                                              Reports
by the Trustee.

(a)           On or before [           ] in each year in which any of the
Securities are Outstanding, the Trustee shall transmit by mail, first class
postage prepaid, to the Securityholders, as their names and addresses appear
upon the Security Register, a brief report dated as of the preceding [          ], if and to the extent required
under Section 313(a) of the Trust Indenture Act.

(b)           The Trustee shall comply with
Sections 313(b), 313(c) and 313(d) of the Trust Indenture Act.

(c)           A copy of each such report shall, at
the time of such transmission to Securityholders, be filed by the Trustee with
the Company, with each stock exchange upon which any Securities are listed (if
so listed) and also with the Commission. 
The Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.

(d)           If an Event of Default occurs and is
continuing and the Trustee receives actual notice of such Event of Default, the
Trustee shall mail to each Securityholder notice of the uncured Event of
Default within 90 days after the occurrence thereof.  Except in the case of an Event of Default in
payment of principal of, or interest on, any Securities, or in the payment of
any sinking or purchase fund installment, the Trustee may withhold the notice
if and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the
Securityholders.

ARTICLE
VI

REMEDIES
OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT

SECTION
6.01                                                              Events
of Default.

(a)           Whenever used herein with respect to
Securities of a particular series, “Event of Default” means any one or more of
the following events that has occurred and is continuing:

(1)           the Company defaults
in the payment of any installment of interest upon any of the Securities of
that series, as and when the same shall become due and payable, and such
default continues for a period of 90 days; provided, however, that a valid
extension of an interest payment period by the Company in accordance with the
terms of any indenture supplemental hereto, shall not constitute a default in
the payment of interest for this purpose;

(2)           the Company defaults
in the payment of the principal of (or premium, if any, on) any of the
Securities of that series as and when the same shall become due and payable
whether at maturity, upon redemption, by declaration or otherwise, or in any
payment required by any sinking or analogous fund established with respect to
that series; provided, however, that a valid 

 19
 

extension of
the maturity of such Securities in accordance with the terms of any indenture
supplemental hereto shall not constitute a default in the payment of principal
or premium, if any;

(3)           the Company fails to
observe or perform any other of its covenants or agreements with respect to
that series contained in this Indenture or otherwise established with respect
to that series of Securities pursuant to Section 2.01 hereof (other than a
covenant or agreement that has been expressly included in this Indenture solely
for the benefit of one or more series of Securities other than such series) for
a period of 90 days after the date on which written notice of such failure,
requiring the same to be remedied and stating that such notice is a “Notice of
Default” hereunder, shall have been given to the Company by the Trustee, by
registered or certified mail, or to the Company and the Trustee by the holders
of at least 25% in principal amount of the Securities of that series at the
time Outstanding;

(4)           the Company pursuant
to or within the meaning of any Bankruptcy Law (i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an involuntary
case, (iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property or (iv) makes a general assignment for the
benefit of its creditors; or

(5)           a court of competent
jurisdiction enters an order under any Bankruptcy Law that (i) is for relief
against the Company in an involuntary case, (ii) appoints a Custodian of the
Company for all or substantially all of its property or (iii) orders the
liquidation of the Company, and the order or decree remains unstayed and in
effect for 90 days.

(b)           In each and every such case, unless
the principal of all the Securities of that series shall have already become
due and payable, either the Trustee or the holders of not less than 25% in
aggregate principal amount of the Securities of that series then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Securityholders), may declare the principal of all the Securities of that
series to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable.

(c)           At any time after the principal of
the Securities of that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the holders of a majority in
aggregate principal amount of the Securities of that series then Outstanding
hereunder, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if: 
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay all matured installments of interest upon all the Securities of that
series and the principal of (and premium, if any, on) all Securities of that
series that shall have become due otherwise than by acceleration (with interest
upon such principal and premium, if any, and, to the extent that such payment
is enforceable under applicable law, upon overdue installments of interest, at
the rate per annum expressed in the Securities of that series to the date of
such payment or deposit) and any amount payable to the Trustee under Section
7.06, and (2) any and all other Events of Default under the Indenture with
respect to such series, other than the nonpayment of principal on Securities of
that series that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 6.06.

 20
 

No such rescission and annulment shall extend to or shall affect any
subsequent default or impair any right consequent thereon.

(d)           In case the Trustee shall have
proceeded to enforce any right with respect to Securities of that series under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case, subject
to any determination in such proceedings, the Company and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall continue as
though no such proceedings had been taken.

SECTION
6.02                                                              Suits
for Enforcement by Trustee.

(a)           If an Event of Default specified in
Section 6.01(a)(1) or (2) hereof occurs and is continuing, the Trustee, in its
own name and as trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the collection of
the sums so due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree, and may enforce any such judgment or final decree
against the Company or other obligor upon the Securities of that series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or other obligor upon the Securities of
that series, wherever situated.

(b)           In case of any receivership,
insolvency, liquidation, bankruptcy, reorganization, readjustment, arrangement,
composition or judicial proceedings affecting the Company, or its creditors or
property, the Trustee shall have power to intervene in such proceedings and
take any action therein that may be permitted by the court and shall (except as
may be otherwise provided by law) be entitled to file such proofs of claim and
other papers and documents as may be necessary or advisable in order to have
the claims of the Trustee and of the holders of Securities of a series allowed
for the entire amount due and payable by the Company under this Indenture at
the date of institution of such proceedings and for any additional amount that
may become due and payable by the Company after such date, and to collect and
receive any moneys or other property payable or deliverable on any such claim,
and to distribute the same after the deduction of the amount payable to the
Trustee under Section 7.06; and any receiver, assignee or trustee in bankruptcy
or reorganization is hereby authorized by each of the holders of Securities of
such series to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Securityholders, to pay to the Trustee any amount due it under Section 7.06.

(c)           All rights of action and of asserting
claims under this Indenture, or under any of the terms established with respect
to Securities of a series, may be enforced by the Trustee without the
possession of any of such Securities, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for payment to the Trustee
of any amounts due under Section 7.06, be for the ratable benefit of the
holders of the Securities of such series.

 

 21

In case of an Event of Default hereunder, the Trustee
may in its discretion proceed to protect and enforce the rights vested in it by
this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law or
in equity or in bankruptcy or otherwise, whether for the specific enforcement
of any covenant or agreement contained in this Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce any other legal
or equitable right vested in the Trustee by this Indenture or by law.

Nothing contained herein shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of that series or the rights of any holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding.

SECTION
6.03                                                              Application
of Moneys Collected.

Any moneys collected by the Trustee pursuant to this
Article with respect to a particular series of Securities shall be applied in
the following order, at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal (or premium, if any) or
interest, upon presentation of the Securities of that series, and notation
thereon the payment, if only partially paid, and upon surrender thereof if
fully paid:

FIRST:  To the
payment of costs and expenses of collection and of all amounts payable to the
Trustee under Section 7.06; and

SECOND:  To the
payment of the amounts then due and unpaid upon Securities of such series for
principal (and premium, if any) and interest, in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest, respectively.

SECTION
6.04                                                              Limitation
on Suits.

No holder of any Security of any series shall have any
right by virtue or by availing of any provision of this Indenture to institute
any suit, action or proceeding in equity or at law upon or under or with
respect to this Indenture or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless (a) such holder previously shall have
given to the Trustee written notice of an Event of Default and of the
continuance thereof with respect to the Securities of such series specifying
such Event of Default, as hereinbefore provided; (b) the holders of not less
than 25% in aggregate principal amount of the Securities of such series then
Outstanding shall have made written request upon the Trustee to institute such
action, suit or proceeding in its own name as trustee hereunder; (c) such
holder or holders shall have offered to the Trustee such reasonable indemnity
as it may require against the costs, expenses and liabilities to be incurred
therein or thereby; (d) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity, shall have failed to institute any such
action, suit or proceeding; and (e) during such 60-day period, the holders of a
majority in principal amount of the Securities of that series shall not have
given the Trustee a direction inconsistent with the request.

 22
 

Notwithstanding anything contained herein to the
contrary, the right of any holder of any Security to receive payment of the
principal of (and premium, if any) and interest on such Security, as therein provided,
on or after the respective due dates expressed in such Security (or in the case
of redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates or redemption
date, shall not be impaired or affected without the consent of such
holder.  By accepting a Security
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Security of such series with every other such taker and holder
and the Trustee, that no one or more holders of Securities of such series shall
have any right in any manner whatsoever by virtue or by availing of any
provision of this Indenture to affect, disturb or prejudice the rights of the
holders of any other of such Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, or to enforce any right
under this Indenture, except in the manner herein provided and for the equal,
ratable and common benefit of all holders of Securities of such series.  For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.

SECTION
6.05                                                              Rights
and Remedies Cumulative; Delay or Omission Not Waiver.

(a)           All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the extent permitted
by law, be deemed cumulative and not exclusive of any other powers and remedies
available to the Trustee or the holders of the Securities, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture or otherwise established
with respect to such Securities.

(b)           No delay or omission of the Trustee
or of any holder of any of the Securities to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any
such default or on acquiescence therein; and, subject to the provisions of
Section 6.04, every power and remedy given by this Article or by law to the
Trustee or the Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the Securityholders.

SECTION
6.06                                                              Control
by Securityholders.

The holders of a majority in aggregate principal
amount of the Securities of any series at the time Outstanding, determined in
accordance with Section 8.01, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to such
series; provided, however, that such direction shall not be in conflict with
any rule of law or with this Indenture or be unduly prejudicial to the rights
of holders of Securities of any other series at the time Outstanding determined
in accordance with Section 8.01.  Subject
to the provisions of Section 7.01, the Trustee shall have the right to decline
to follow any such direction if the Trustee in good faith shall, by a
Responsible Officer or Officers of the Trustee, determine that the proceeding
so directed would involve the Trustee in personal liability.  The holders of a majority in aggregate
principal amount of the Securities of any series at the time Outstanding
affected thereby, determined in accordance with Section 8.01, may on behalf of
the holders of all of the Securities of such series waive any past default in
the performance of any of the covenants contained herein or established
pursuant to Section 2.01 with respect to such series and its 

 23
 

consequences, except an
uncured default in the payment of the principal of (or premium, if any) or
interest on, any of the Securities of that series as and when the same shall
become due by the terms of such Securities otherwise than by acceleration
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal and any premium has been deposited with
the Trustee (in accordance with Section 6.01(c)).  Upon any such waiver, the default covered
thereby shall be deemed to be cured for all purposes of this Indenture and the
Company, the Trustee and the holders of the Securities of such series shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.

SECTION
6.07                                                              Undertaking
to Pay Costs.

All parties to this Indenture agree, and each holder
of any Securities by such holder’s acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys’ fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Securityholder, or
group of Securityholders, holding more than 10% in aggregate principal amount
of the Outstanding Securities of any series, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on or after the
respective due dates expressed in such Security or established pursuant to this
Indenture.

ARTICLE
VII

CONCERNING
THE TRUSTEE

SECTION
7.01                                                              Certain
Duties and Responsibilities of Trustee.

(a)           The Trustee, prior to the occurrence
of an Event of Default with respect to the Securities of a series and after the
curing of all Events of Default with respect to the Securities of that series
that may have occurred, shall undertake to perform with respect to the
Securities of such series such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants shall be read into this
Indenture against the Trustee.  In case
an Event of Default with respect to the Securities of a series has occurred
(that has not been cured or waived), the Trustee shall exercise with respect to
Securities of that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs.

(b)           No provision of this Indenture shall
be construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:

 24
 

(1)           prior to the occurrence of an Event
of Default with respect to the Securities of a series and after the curing or
waiving of all such Events of Default with respect to that series that may have
occurred:

(i)            the duties and
obligations of the Trustee shall with respect to the Securities of such series
be determined solely by the express provisions of this Indenture, and the
Trustee shall not be liable with respect to the Securities of such series
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and

(ii)           in the absence of
bad faith on the part of the Trustee, the Trustee may with respect to the
Securities of such series conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;

(2)           the Trustee shall
not be liable for any error of judgment made in good faith by a Responsible
Officer or Responsible Officers of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;

(3)           the Trustee shall
not be liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the holders of not less than a
majority in principal amount of the Securities of any series at the time
Outstanding relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture with respect to the Securities
of that series; and

(4)           none of the
provisions contained in this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers, if there is reasonable ground for believing that the repayment of such
funds or liability is not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not reasonably assured to
it.

SECTION
7.02                                                              Certain
Rights of Trustee.

Except as otherwise provided in Section 7.01:

(a)           The Trustee may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

(b)           Any request, direction, order or
demand of the Company mentioned herein shall be sufficiently evidenced by a
Board Resolution or an instrument signed in the name of the Company, by the
President or any Executive Vice President and by the Secretary or an Assistant 

 25
 

Secretary or
the Treasurer or an Assistant Treasurer thereof (unless other evidence in
respect thereof is specifically prescribed herein);

(c)           The Trustee may consult with counsel
and the written advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken or
suffered or omitted hereunder in good faith and in reliance thereon;

(d)           The Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Indenture at the request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such Securityholders shall
have offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities that may be incurred therein or thereby; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon
the occurrence of an Event of Default with respect to a series of the
Securities (that has not been cured or waived) to exercise with respect to
Securities of that series such of the rights and powers vested in it by this
Indenture, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his own affairs;

(e)           The Trustee shall not be liable for
any action taken or omitted to be taken by it in good faith and believed by it
to be authorized or within the discretion or rights or powers conferred upon it
by this Indenture;

(f)            The Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other papers or documents, unless requested
in writing so to do by the holders of not less than a majority in principal amount
of the Outstanding Securities of the particular series affected thereby
(determined as provided in Section 8.04); provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such costs, expenses or liabilities as a condition
to so proceeding.  The reasonable expense
of every such examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and

(g)           The Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly or
by or through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.

SECTION
7.03                                                              Trustee
Not Responsible for Recitals or Issuance or Securities.

(a)           The recitals contained herein and in
the Securities shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same.

(b)           The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities.

 26
 

(c)           The
Trustee shall not be accountable for the use or application by the Company of
any of the Securities or of the proceeds of such Securities, or for the use or
application of any moneys paid over by the Trustee in accordance with any
provision of this Indenture or established pursuant to Section 2.01, or for the
use or application of any moneys received by any paying agent other than the
Trustee.

SECTION
7.04                                                              May
Hold Securities.

The Trustee or any paying agent or Security Registrar,
in its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not Trustee, paying
agent or Security Registrar.

SECTION
7.05                                                              Moneys
Held in Trust.

Subject to the provisions of Section 11.05, all moneys
received by the Trustee shall, until used or applied as herein provided, be
held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law.  The Trustee shall be under no liability for
interest on any moneys received by it hereunder except such as it may agree
with the Company to pay thereon.

SECTION
7.06                                                              Compensation
and Reimbursement.

(a)           The Company covenants and agrees to
pay to the Trustee, and the Trustee shall be entitled to, such reasonable
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust), as the Company and the
Trustee may from time to time agree in writing, for all services rendered by it
in the execution of the trusts hereby created and in the exercise and
performance of any of the powers and duties hereunder of the Trustee, and, except
as otherwise expressly provided herein, the Company will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or bad faith.  The Company
also covenants to indemnify the Trustee (and its officers, agents, directors
and employees) for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of the Trustee and
arising out of or in connection with the acceptance or administration of this
trust, including the costs and expenses of defending itself against any claim
of liability in the premises.

(b)           The obligations of the Company under
this Section to compensate and indemnify the Trustee and to pay or reimburse
the Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder.  Such
additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Securities.

SECTION
7.07                                                              Reliance
on Officers’ Certificate.

Except as otherwise provided in Section 7.01, whenever
in the administration of the provisions of this Indenture the Trustee shall
deem it necessary or desirable that a matter be 

 27
 

proved or established
prior to taking or suffering or omitting to take any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers’
Certificate delivered to the Trustee and such certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken, suffered or omitted to be taken by it under
the provisions of this Indenture upon the faith thereof.

SECTION
7.08                                                              Disqualification;
Conflicting Interests.

If the Trustee has or shall acquire any “conflicting
interest” within the meaning of Section 310(b) of the Trust Indenture Act, the
Trustee and the Company shall in all respects comply with the provisions of
Section 310(b) of the Trust Indenture Act.

SECTION
7.09                                                              Corporate
Trustee Required; Eligibility.

There shall at all times be a Trustee with respect to
the Securities issued hereunder which shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any State or Territory thereof or of the District of Columbia, or a corporation
or other Person permitted to act as trustee by the Commission, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District of
Columbia authority.  If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. 
The Company may not, nor may any Person directly or indirectly
controlling, controlled by or under common control with the Company, serve as
Trustee.  In case at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Trustee shall resign immediately in the manner and with the effect
specified in Section 7.10.

SECTION
7.10                                                              Resignation
and Removal; Appointment of Successor.

(a)           The Trustee or any successor
hereafter appointed, may at any time resign with respect to the Securities of
one or more series by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage prepaid, to the
Securityholders of such series, as their names and addresses appear upon the
Security Register.  Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee
with respect to Securities of such series by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor
trustee.  If no successor trustee shall
have been so appointed and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee with
respect to Securities of such series, or any Securityholder of that series who
has been a bona fide holder of a Security or Securities for at least six months
may on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee.  Such court

 28
 

may thereupon
after such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.

(b)           In case at any time any one of the
following shall occur:

(1)           the Trustee shall
fail to comply with the provisions of Section 7.08 after written request
therefor by the Company or by any Securityholder who has been a bona fide
holder of a Security or Securities for at least six months; or

(2)           the Trustee shall
cease to be eligible in accordance with the provisions of Section 7.09 and
shall fail to resign after written request therefor by the Company or by any
such Securityholder; or 

(3)           the Trustee shall
become incapable of acting, or shall be adjudged a bankrupt or insolvent, or
commence a voluntary bankruptcy proceeding, or a receiver of the Trustee or of
its property shall be appointed or consented to, or any public officer shall
take charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,

then, in any such case, the Company may remove the
Trustee with respect to all Securities and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, unless the Trustee’s duty to resign is
stayed as provided herein, any Securityholder who has been a bona fide holder
of a Security or Securities for at least six months may, on behalf of that
holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
trustee.  Such court may thereupon after
such notice, if any, as it may deem proper and prescribe, remove the Trustee
and appoint a successor trustee.

(c)           The holders of a majority in
aggregate principal amount of the Securities of any series at the time Outstanding
may at any time remove the Trustee with respect to such series by so notifying
the Trustee and the Company and may appoint a successor Trustee for such series
with the consent of the Company.

(d)           Any resignation or removal of the
Trustee and appointment of a successor trustee with respect to the Securities
of a series pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided
in Section 7.11.

(e)           Any successor trustee appointed
pursuant to this Section may be appointed with respect to the Securities of one
or more series or all of such series, and at any time there shall be only one
Trustee with respect to the Securities of any particular series.

SECTION
7.11                                                              Acceptance
of Appointment By Successor.

(a)           In case of the appointment hereunder
of a successor trustee with respect to all Securities, every such successor
trustee so appointed shall execute, acknowledge and deliver to the Company and
to the retiring Trustee an instrument accepting such appointment, and thereupon
the resignation or removal of the retiring Trustee shall become effective and
such successor 

 29
 

trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.

(b)           In case of the appointment hereunder
of a successor trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each successor trustee with
respect to the Securities of one or more series shall execute and deliver an
indenture supplemental hereto wherein each successor trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, each successor trustee
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor trustee relates, (2) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers, trusts and
duties of the retiring Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring shall continue to be
vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust, that each such Trustee
shall be trustee of a trust or trusts hereunder separate and apart from any
trust or trusts hereunder administered by any other such Trustee and that no
Trustee shall be responsible for any act or failure to act on the part of any
other Trustee hereunder; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, such retiring Trustee shall
with respect to the Securities of that or those series to which the appointment
of such successor trustee relates have no further responsibility for the
exercise of rights and powers or for the performance of the duties and
obligations vested in the Trustee under this Indenture, and each such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor trustee relates; but, on request of the Company or any successor
trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor trustee, to the extent contemplated by such supplemental indenture,
the property and money held by such retiring Trustee hereunder with respect to
the Securities of that or those series to which the appointment of such
successor trustee relates.

(c)           Upon request of any such successor
trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all such rights,
powers and trusts referred to in paragraph (a) or (b) of this Section, as the
case may be.

(d)           No successor trustee shall accept its
appointment unless at the time of such acceptance such successor trustee shall
be qualified and eligible under this Article.

(e)           Upon acceptance of appointment by a
successor trustee as provided in this Section, the Company shall transmit
notice of the succession of such trustee hereunder by mail, first class

 30
 

postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register.  If the Company fails
to transmit such notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.

SECTION
7.12                                                              Merger,
Conversion, Consolidation or Succession to Business.

Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided that such
corporation shall be qualified under the provisions of Section 7.08 and
eligible under the provisions of Section 7.09, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.  In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.

SECTIONI
7.13                                                          Preferential
Collection of Claims Against the Company.

The Trustee shall comply with Section 311(a) of the
Trust Indenture Act, excluding any creditor relationship described in Section
311(b) of the Trust Indenture Act.  A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent included therein.

ARTICLE
VIII

CONCERNING
THE SECURITYHOLDERS

SECTIONI
8.01                                                          Evidence
of Action by Securityholders.

Whenever in this Indenture it is provided that the
holders of a majority or specified percentage in aggregate principal amount of
the Securities of a particular series may take any action (including the making
of any demand or request, the giving of any notice, consent or waiver or the
taking of any other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of that series have
joined therein may be evidenced by any instrument or any number of instruments
of similar tenor executed by such holders of Securities of that series in
Person or by agent or proxy appointed in writing.

If the Company shall solicit from the Securityholders
of any series any request, demand, authorization, direction, notice, consent,
waiver or other action, the Company may, at its option, as evidenced by an
Officers’ Certificate, fix in advance a record date for such series for the
determination of Securityholders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other action, but the
Company shall have no obligation to do so. 
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action may be given before or after
the record date, but only the Securityholders of record at the close of
business on the record date shall be deemed to be Securityholders for the 

 31
 

purposes of determining
whether Securityholders of the requisite proportion of Outstanding Securities
of that series have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Outstanding Securities of that series shall be computed as of the
record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.

SECTION
8.02                                                              Proof
of Execution by Securityholders.

Subject to the provisions of Section 7.01, proof of
the execution of any instrument by a Securityholder (such proof will not
require notarization) or his agent or proxy and proof of the holding by any
Person of any of the Securities shall be sufficient if made in the following
manner:

(a)           The fact and date of the execution by
any such Person of any instrument may be proved in any reasonable manner
acceptable to the Trustee.

(b)           The ownership of Securities shall be
proved by the Security Register of such Securities or by a certificate of the
Security Registrar thereof.

(c)           The Trustee may require such
additional proof of any matter referred to in this Section as it shall deem necessary.

SECTION
8.03                                                              Who
May be Deemed Owners.

Prior to the due presentment for registration of
transfer of any Security, the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the Person in whose name such Security
shall be registered upon the books of the Company as the absolute owner of such
Security (whether or not such Security shall be overdue and notwithstanding any
notice of ownership or writing thereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal of (and premium, if any) and (subject to Section 2.03) interest on
such Security and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any Security Registrar shall be affected by
any notice to the contrary.

SECTION
8.04                                                              Certain
Securities Owned by Company Disregarded.

In determining whether the holders of the requisite
aggregate principal amount of Securities of a particular series have concurred
in any direction, consent or waiver under this Indenture, the Securities of
that series that are owned by the Company or any other obligor on the
Securities of that series or by any Person directly or indirectly controlling
or controlled by or under common control with the Company or any other obligor
on the Securities of that series shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities of such series that the
Trustee actually knows are so owned shall be so disregarded.  The Securities so owned that have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section, if the 

 32
 

pledgee shall establish
to the satisfaction of the Trustee the pledgee’s right so to act with respect
to such Securities and that the pledgee is not a Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
the Company or any such other obligor. 
In case of a dispute as to such right, any decision by the Trustee taken
upon the advice of counsel shall be full protection to the Trustee.

SECTION
8.05                                                              Actions
Binding on Future Securityholders.

At any time prior to (but not after) the evidencing to
the Trustee, as provided in Section 8.01, of the taking of any action by the
holders of the majority or percentage in aggregate principal amount of the
Securities of a particular series specified in this Indenture in connection
with such action, any holder of a Security of that series that is shown by the
evidence to be included in the Securities the holders of which have consented
to such action may, by filing written notice with the Trustee, and upon proof
of holding as provided in Section 8.02, revoke such action so far as concerns
such Security.  Except as aforesaid any
such action taken by the holder of any Security shall be conclusive and binding
upon such holder and upon all future holders and owners of such Security, and
of any Security issued in exchange therefor, on registration of transfer
thereof or in place thereof, irrespective of whether or not any notation in
regard thereto is made upon such Security. 
Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular series specified
in this Indenture in connection with such action shall be conclusively binding
upon the Company, the Trustee and the holders of all the Securities of that
series.

ARTICLE
IX

SUPPLEMENTAL
INDENTURES

SECTION
9.01                                                              Supplemental
Indentures Without the Consent of Securityholders.

In addition to any supplemental indenture otherwise
authorized by this Indenture, the Company and the Trustee may from time to time
and at any time enter into an indenture or indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as then in
effect), without the consent of the Securityholders, for one or more of the
following purposes:

(a)           to cure any ambiguity, defect or
inconsistency herein or in the Securities of any series;

(b)           to comply with Article Ten;

(c)           to provide for uncertificated
Securities in addition to or in place of certificated Securities;

(d)           to add to the covenants of the
Company for the benefit of the holders of all or any series of Securities (and
if such covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included solely for
the benefit of such series) or to surrender any right or power herein conferred
upon the Company;

 33

(e)           to add to, delete from or revise the
conditions, limitations and restrictions on the authorized amount, terms,
purposes of issue, authentication and delivery of Securities, as herein set
forth;

(f)            to make any change that does not
adversely affect the rights of any Securityholder in any material respect; or

(g)           to provide for the issuance of and
establish the form and terms and conditions of the Securities of any series as
provided in Section 2.01, to establish the form of any certifications required
to be furnished pursuant to the terms of this Indenture or any series of
Securities, or to add to the rights of the holders of any series of Securities.

The Trustee is hereby authorized to join with the
Company in the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations that may be therein contained,
but the Trustee shall not be obligated to enter into any such supplemental
indenture that affects the Trustee’s own rights, duties or immunities under
this Indenture or otherwise.

Any supplemental indenture authorized by the
provisions of this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Securities at the time
Outstanding, notwithstanding any of the provisions of Section 9.02.

SECTION
9.02                                                              Supplemental
Indentures With Consent of Securityholders.

With the consent (evidenced as provided in Section
8.01) of the holders of not less than a majority in aggregate principal amount
of the Securities of each series affected by such supplemental indenture or
indentures at the time Outstanding, the Company, when authorized by Board
Resolutions, and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying
in any manner not covered by Section 9.01 the rights of the holders of the
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the holders of each
Security then Outstanding and affected thereby, (i) extend the fixed maturity
of any Securities of any series, or reduce the principal amount thereof, or
reduce the rate of interest thereon, or reduce any premium payable upon the
redemption thereof or (ii) reduce the aforesaid percentage of Securities, the
holders of which are required to consent to any such supplemental indenture.

It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such consent shall approve the substance thereof.

SECTION
9.03                                                              Effect
of Supplemental Indentures.

Upon the execution of any supplemental indenture
pursuant to the provisions of this Article or of Section 10.01, this Indenture
shall, with respect to such series, be and be deemed to be modified and amended
in accordance therewith and the respective rights, limitations of rights, 

 34
 

obligations, duties and
immunities under this Indenture of the Trustee, the Company and the holders of
Securities of the series affected thereby shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental indenture
shall be and be deemed to be part of the terms and conditions of this Indenture
for any and all purposes.

SECTION
9.04                                                              Securities
Affected by Supplemental Indentures.

Securities of any series affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 10.01, may
bear a notation in form approved by the Company, provided such form meets the
requirements of any exchange upon which such series may be listed, as to any
matter provided for in such supplemental indenture.  If the Company shall so determine, new
Securities of that series so modified as to conform, in the opinion of the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of that series then
Outstanding.

SECTION
9.05                                                              Execution
of Supplemental Indentures.

Upon the request of the Company, accompanied by Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion but shall not be obligated to enter into such supplemental
indenture.  The Trustee, subject to the
provisions of Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to this Article is
authorized or permitted by, and conforms to, the terms of this Article and that
it is proper for the Trustee under the provisions of this Article to join in
the execution thereof; provided, however, that such Opinion of Counsel need not
be provided in connection with the execution of a supplemental indenture that
establishes the terms of a series of Securities pursuant to Section 2.01
hereof.

Promptly after the execution by the Company and the
Trustee of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage prepaid, a
notice, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders of all series affected thereby as their names
and addresses appear upon the Security Register.  Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

 35
 

ARTICLE X

SUCCESSOR ENTITY

SECTION
10.01                                                       Company
May Consolidate, Etc.

Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of the Company with or
into any other Person (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor
or successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided, however, the
Company hereby covenants and agrees that, upon any such consolidation or merger
(in each case, if the Company is not the survivor of such transaction), sale,
conveyance, transfer or other disposition, the due and punctual payment of the
principal of (premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to their tenor,
and the due and punctual performance and observance of all the covenants and
conditions of this Indenture with respect to each series or established with
respect to such series pursuant to Section 2.01 to be kept or performed by the
Company shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act as then in effect)
satisfactory in form to the Trustee executed and delivered to the Trustee by
the entity formed by such consolidation, or into which the Company shall have
been merged, or by the entity which shall have acquired such property.

SECTION
10.02                                                       Successor
Entity Substituted.

(a)           In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon the assumption
by the successor entity by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of (and premium, if any) and interest on all of the
Securities of all series Outstanding and the due and punctual performance of
all of the covenants and conditions of this Indenture or established with
respect to each series of the Securities pursuant to Section 2.01 to be
performed by the Company with respect to each series, such successor entity
shall succeed to and be substituted for the Company with the same effect as if
it had been named as the Company herein, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under this
Indenture and the Securities.

(b)           In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition, such changes in
phraseology and form (but not in substance) may be made in the Securities
thereafter to be issued as may be appropriate.

(c)           Nothing contained in this Article
shall apply to limit or impose any requirements upon the consolidation or
merger of any Person into the Company where the Company is the survivor of such
transaction, or the acquisition by the Company, by purchase or otherwise, of
all or any part of the property of any other Person (whether or not affiliated
with the Company).

 36
 

SECTION
10.03                                                       Evidence
of Consolidation, Etc. to Trustee.

The Trustee, subject to the provisions of Section
7.01, may receive an Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, conveyance, transfer or other disposition, and any
such assumption, comply with the provisions of this Article.

ARTICLE
XI

SATISFACTION
AND DISCHARGE

SECTION
11.01                                                       Satisfaction
and Discharge of Indenture.

If at any time: (a) the Company shall have delivered
to the Trustee for cancellation all Securities of a series theretofore
authenticated (other than any Securities that have been destroyed, lost or
stolen and that have been replaced or paid as provided in Section 2.07) and
Securities for whose payment money or Governmental Obligations have theretofore
been deposited in trust or segregated and held in trust by the Company; or (b)
all such Securities of a particular series not theretofore delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit or cause to
be deposited with the Trustee as trust funds the entire amount in moneys or
Governmental Obligations or a combination thereof, sufficient in the opinion of
a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay at maturity or
upon redemption all Securities of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder with respect to such series by the
Company then this Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections 2.03, 2.05, 2.07,
4.01, 4.02, 4.03 and 7.10, that shall survive until the date of maturity or
redemption date, as the case may be, and Sections 7.06 and 11.05, that shall
survive to such date and thereafter, and the Trustee, on demand of the Company
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with respect to
such series.

SECTION
11.02                                                       Discharge
of Obligations.

If at any time all such Securities of a particular
series not heretofore delivered to the Trustee for cancellation or that have
not become due and payable as described in Section 11.01 shall have been paid
by the Company by depositing irrevocably with the Trustee as trust funds moneys
or an amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all such Securities of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if any) and
interest due or to become due to such date of maturity or date fixed for
redemption, as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company with respect to such
series, then after the date such moneys or Governmental Obligations, as the
case may be, are deposited with the Trustee, the obligations of the Company
under this Indenture with respect to 

 37
 

such series shall cease
to be of further effect except for the provisions of Sections 2.03, 2.05, 2.07,
4.01, 4.02, 4.03, 7.06, 7.10 and 11.05 hereof that shall survive until such
Securities shall mature and be paid. 
Thereafter, Sections 7.06 and 11.05 shall survive.

SECTIONI
11.03                                                   Deposited
Moneys to be Held in Trust.

All moneys or Governmental Obligations deposited with
the Trustee pursuant to Sections 11.01 or 11.02 shall be held in trust and
shall be available for payment as due, either directly or through any paying
agent (including the Company acting as its own paying agent), to the holders of
the particular series of Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.

SECTION
11.04                                                       Payment
of Moneys Held by Paying Agents.

In connection with the satisfaction and discharge of
this Indenture all moneys or Governmental Obligations then held by any paying
agent under the provisions of this Indenture shall, upon demand of the Company,
be paid to the Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental Obligations.

SECTION
11.05                                                       Repayment
to Company.

Any moneys or Governmental Obligations deposited with
any paying agent or the Trustee, or then held by the Company, in trust for
payment of principal of (and premium, if any) or interest on the Securities of
a particular series that are not applied but remain unclaimed by the holders of
such Securities for at least two years after the date upon which the principal
of (and premium, if any) or interest on such Securities shall have respectively
become due and payable, shall be repaid to the Company or (if then held by the
Company) shall be discharged from such trust; and thereupon the paying agent
and the Trustee shall be released from all further liability with respect to
such moneys or Governmental Obligations, and the holder of any of the
Securities entitled to receive such payment shall thereafter, as an unsecured
general creditor, look only to the Company for the payment thereof.

ARTICLE
XII

IMMUNITY
OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS

SECTION
12.01                                                       No
Recourse.

No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether
by virtue of any constitution, statute or rule of law, or by the enforcement of
any assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall attach to, or
is or shall be incurred 

 38
 

by, the incorporators,
stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of
the obligations, covenants or agreements contained in this Indenture or in any
of the Securities or implied therefrom, are hereby expressly waived and released
as a condition of, and as a consideration for, the execution of this Indenture
and the issuance of such Securities.

ARTICLE
XIII

MISCELLANEOUS
PROVISIONS

SECTION
13.01                                                       Effect
on Successors and Assigns.

All the covenants, stipulations, promises and agreements
in this Indenture contained by or on behalf of the Company shall bind its
successors and assigns, whether so expressed or not.

SECTION
13.02                                                       Actions
by Successor.

Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful successor of the Company.

SECTION
13.03                                                       Notices.

Except as otherwise expressly provided herein any
notice or demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the holders of Securities
to or on the Company may be given or served by being deposited first class
postage prepaid in a post-office letterbox addressed (until another address is
filed in writing by the Company with the Trustee), as follows:  [                        ].  Any notice, election, request or demand by
the Company or any Securityholder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or made in
writing at the Corporate Trust Office of the Trustee.

SECTION
13.04                                                       Governing
Law.

This Indenture and each Security shall be deemed to be
a contract made under the internal laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State.

 39
 

SECTION
13.05                                                       Compliance
Certificates and Opinions.

(a)           Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers’ Certificate
stating that all conditions precedent provided for in this Indenture relating
to the proposed action have been complied with and an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent have
been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.

(b)           Each certificate or opinion provided
for in this Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant in this Indenture shall include (1) a statement
that the Person making such certificate or opinion has read such covenant or
condition; (2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based; (3) a statement that, in the opinion of such
Person, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.

(c)           The Company shall furnish to the
Trustee, on [         ] of each year, a
brief certificate from the principal executive officer, principal financial
officer or principal accounting officer as to his or her knowledge of such
obligor’s compliance with all conditions and covenants under this
Indenture.  For purposes of this
subsection, such compliance shall be determined without regard to any period of
grace or requirement of notice provided hereunder.

SECTION
13.06                                                       Payments
on Business Days.

Except as provided pursuant to Section 2.01 pursuant
to a Board Resolution, and as set forth in an Officers’ Certificate, or
established in one or more indentures supplemental to this Indenture, in any
case where the date of maturity of interest or principal of any Security or the
date of redemption of any Security shall not be a Business Day, then payment of
interest or principal (and premium, if any) may be made on the next succeeding
Business Day with the same force and effect as if made on the nominal date of
maturity or redemption, and no interest shall accrue for the period after such
nominal date.

SECTION
13.07                                                       Conflict
with Trust Indenture Act.

If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.

SECTION
13.08                                                       Counterparts.

This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

 40
 

SECTION
13.09                                                       Separability.

In case any one or more of the provisions contained in
this Indenture or in the Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall
be construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.

SECTIONI
13.10                                                   Assignment.

The Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and
assigns.  This Indenture may not
otherwise be assigned by the parties thereto.

 41
 

IN WITNESS WHEREOF, the parties hereto have caused
this Indenture to be duly executed all as of the day and year first above
written.

	
   

  	
  NOVAMED, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
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  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [                                        ],

  	
   

  
	
   

  	
  as Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 42

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