Document:

Exhibit 10.81

[***] CERTAIN INFORMATION IN THIS
EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS

AMENDMENT

TO
OEM AGREEMENT BETWEEN UTSTARCOM, INC. AND INTERWAVE

COMMUNICATIONS
INTERNATIONAL, LTD., DATED JULY 14, 2000

This Amendment is
dated and entered into as of the 27th day of September 2002 by and
between UTStarcom, Inc., a Delaware corporation with its place of business at
1275 Harbor Bay Parkway, Alameda, CA 94502, USA (hereinafter referred to as
“UTStarcom”) and Interwave Communications International, Ltd., a Bermuda
company having offices at Clarendon House, 2 Church Street, Hamilton HM DX,
Bermuda (hereinafter referred to as “Interwave”) (collectively, the “Parties”).

WHEREAS, The
Parties entered into a contractual relationship on July 14, 2000 (referred
to herein as the “Original OEM Agreement”) for UTStarcom to purchase certain
products and for resale as defined in the Original OEM Agreement;

WHEREAS, UTStarcom
has expressed an interest in making an equity investment in Interwave in
exchange for a) the development and production by Interwave of certain
technology relating to [***] compatible with UTStarcom’s [***] specifications;
and b) incorporation of said technology into [***], where UTStarcom would
purchase said products from Interwave pursuant to the terms of the Original OEM
Agreement and this Amendment;

NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and conditions herein
contained, the Parties mutually agree as follows:

1.             [***]
Purchase Agreement

In
consideration of Interwave’s provision of technical design and product
production services as described herein, UTStarcom shall purchase [***]
pursuant to the terms of a [***] Purchase Agreement (attached hereto as
Exhibit A).

 

 

2.             Technical
Design Services

In
return for UTStarcom’s equity investment in Interwave as described in
Section 1 of this Amendment, Interwave shall provide technical design
services with respect to [***] being made compatible with UTStarcom’s [***]
specifications. These technical design services shall be provided pursuant to
the specifications attached hereto as Exhibit B, and shall be completed
pursuant to the delivery schedule attached hereto as Exhibit C.

3.             Product
Production Services

In
further consideration of [***] as described in Section 1 of this
Amendment, Interwave shall produce, pursuant to the terms of this Amendment and
the Original OEM Agreement, [***] described in Section 2 of this Amendment.
Interwave shall provide these [***] to UTStarcom at [***]. Interwave
acknowledges and agrees that [***].

4.             Software
Escrow

Interwave
acknowledges the importance to UTStarcom of having access to the technical
designs created by Interwave pursuant to Section 2 of this Amendment in
the event that interWAVE goes into liquidation or ceases business. Accordingly,
Interwave agrees that it shall forthwith upon the completion of the technical
designs intended by Section 2 place all software (including source code),
firmware, documentation, and all other intellectual property necessary for the
manufacture of the [***] into an escrow reasonably acceptable to UTStarcom,
pursuant to terns and conditions expressed in the Software Escrow Agreement
attached hereto as Exhibit D of this Amendment. All items placed into said
escrow shall be used by UTStarcom only for the purpose of manufacturing the
[***] that incorporates such technical designs and for no other purpose.

5.             Limited
Effect of Amendment

Aside
from the modification in this Amendment, the remaining terms and conditions of
the Original OEM Agreement shall remain unaffected by this Amendment.

 

 

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IN WITNESS
WHEREOF, the Parties hereto have caused this Amendment to be executed by their
respective duly authorized representatives as of the date first above written.
All copies of this Amendment, signed by both Parties, shall be deemed
originals.

 

	
  Interwave
  Communications

  	
   

  	
  UTStarcom,
  Inc.

  
	
   

  	
   

  	
   

  
	
  International,
  Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ PRISCILLA LU

  	
   

  	
  By:

  	
  /s/ HONG LU

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Priscilla Lu

  	
   

  	
  Name: 

  	
  Hong Lu

  
	
  Title: 

  	
  Chief Executive
  Officer

  	
   

  	
  Title: 

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  September __,
  2002

  	
   

  	
  Date: 

  	
  September __,
  2002

  

 

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Execution
Copy

 

UTSTARCOM, INC.

AND

INTERWAVE COMMUNICATIONS
INTERNATIONAL LTD.

STOCK PURCHASE AGREEMENT

SEPTEMBER 27, 2002

 

 

STOCK PURCHASE AGREEMENT

THIS
STOCK PURCHASE AGREEMENT is made as of the ___ day of September 2002, by and between UTStarcom,
Inc. (“UTStarcom” or the “Investor”), a corporation organized under the laws of
the State of Delaware, USA, with its principal place of business at 1275 Harbor
Bay Parkway, Alameda, CA 94502 USA and interWAVE Communications International,
Ltd. (the “Company”), a corporation organized under the laws of Bermuda, with
its principal place of business at Clarendon House, 2 Church Street, P.O. Box
HM 1022, Hamilton, Bermuda.

WHEREAS, the parties have
agreed in principle upon the purchase of shares of Common Stock of the Company
by the Investor.

NOW, THEREFORE, THE
PARTIES HEREBY AGREE AS FOLLOWS:

1.             Purchase and Sale of Common Stock.

1.1          Sale of the Common Shares. 
At the Closing (as defined below) and subject to the terms and
conditions of this Agreement, Company will issue and sell for [***] the number
of shares of the Company’s Common Stock obtained by dividing the [***] into
[***] (the “Common Stock”) to the Investor, and the Investor will buy the
Common Stock from the Company, at the Closing, for the per share purchase price
determined as set forth above (the “Purchase Price”). The parties agree that
the Investor may assign the right and obligation to purchase the Common Stock
for the Purchase Price, and all of its other rights and obligations under this
Agreement, to an “Affiliate,” in which case the term “Investor” shall refer
herein to such Affiliate.  “Affiliate”
means, with respect to any specified person, any other person that directly or
indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, such specified person.  In the event that Investor assigns this Agreement to an
Affiliate, UTStarcom shall guarantee and remain liable for the performance of
such Affiliate’s obligations hereunder.  as reported by the Nasdaq National Market (or, if such market is
not the principal trading market for the Common Stock, as reported by such
principal trading market).

1.2          Closing.  The closing
of purchase and sale of the Shares to be sold and purchased hereunder (the
“Closing”) shall occur on September 26, 2002 (the “Closing Date”) at 10:00
a.m. at the offices Wilson, Sonsini, Goodrich and Rosati, 650 Page Mill Road,
Palo Alto, California 94304, USA.  The
per share price is calculated to be [***] US dollars, and the number of shares
to be sold is calculated to be [***] shares, as shown in the attached
calculation in Exhibit A.

2.             Closing Date, Delivery.

2.1          Closing Date. 
The Closing shall be held on September 26, 2002 or such other date
as the Company and the Investor may agree upon (the “Closing Date”).

 

 

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2.2          Delivery. 
At the Closing, the Company will deliver to the Investor a stock
certificate, registered in the Investor’s name, representing the Shares,
against payment of the Purchase Price by certified or cashier’s check payable
to the Company, or by wire transfer of immediately available same day funds per
the Company’s wiring instructions.

2.3          Further Assurances. 
The Company and the Investor hereby covenant and agree without the
necessity of any further consideration, to execute, acknowledge and deliver any
and all such other documents and take any such other action as may be
reasonably necessary to carry out the intent and purposes of this Agreement.

3.             Representations and Warranties of the Company. 
The Company hereby represents and warrants to the Investor that, except
as set forth on the Schedule of Exceptions (the “Schedule of Exceptions,”
attached hereto as Exhibit A1) furnished to the Investor on the date
hereof, which exceptions shall be deemed to be representations and warranties
as if made hereunder and which shall be identified as exceptions to specific
Sections of this Agreement:

3.1          Organization, Good Standing and Qualification. 
The Company is a corporation duly organized, validly existing and in
good standing under the laws of Bermuda. 
The Company has all requisite corporate power and corporate authority to
own and operate its properties and assets, to carry on its business as now conducted
and as proposed to be conducted, to sell the Shares, to enter into this
Agreement, and to carry out the transactions contemplated hereunder and
thereunder.  The Company, and each of
its subsidiaries, is qualified to transact business and is in good standing in
each jurisdiction in which the failure to qualify would have, or could
reasonably be expected to have, a material adverse effect on the business,
properties, financial condition or results of operations of the Company and its
subsidiaries taken as a whole (a “Material Adverse Effect”).  The Company has delivered to the Investor
true, correct and complete copies of the Company’s Certificate of Incorporation
(the “Certificate”) and the Company’s By-laws in effect on the date hereof.

3.2          Capitalization and Voting Rights.

(a)           The capital stock of the Company as
of September 5, 2002 consisted of:

(i)             100,000,000 authorized shares of Common Stock, of
which 58,130,029 shares are issued and outstanding

(ii)          10,000,000 authorized shares of Preferred Stock, of
which zero shares are issued and outstanding

(b)           Except as set forth in the Company’s
report on Form 10-K for the fiscal year ended June 30, 2001, the
Company’s proxy statement for its 2001 annual general meeting of shareholders
and the Company’s Quarterly Reports on Form 10-Q for the periods ended
September 30, 2001, December 31, 2002, and March 31, 2001
(collectively, the “Company’s Public Filings”) or in Section 3.2 of the
Schedule of Exceptions there are: (i) no outstanding options, warrants,
rights (including conversion or preemptive rights) or agreements pursuant to
which the

 

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Company is or may
become obligated to issue, sell or repurchase any shares of its capital stock
or any other securities of the Company; (ii) no restrictions on the
transfer of capital stock of the Company imposed by the Certificate or By-laws
of the Company, or any agreement to which the Company is a party, any order of
any court or any governmental agency to which the Company is subject, or any
statute other than those imposed by relevant state and federal securities laws;
and (iii) no cumulative voting rights for any of the Company’s capital
stock.  The Company has, as of December 31,
2001, reserved up to Nineteen Million Seven Hundred Thirty Thousand
(19,730,000) shares of its Common Stock for the issuance of Common Stock
pursuant to the exercise of outstanding options and warrants or options to be
granted in the future under its stock option and stock purchase plans listed on
Section 3.2 of the Schedule of Exceptions.

(c)           Except as set forth in the Company’s
Public Filings or in Section 3.2 of the Schedule of Exceptions, the
Company is not a party to any agreement or understanding which affects or
relates to, the voting of shares of capital stock of the Company or the giving
of written consents by a shareholder or director of the Company.

3.3          Subsidiaries. 
Except as set forth in the Company’s Public Filings or in
Section 3.3 of the Schedule of Exceptions, the Company has never owned and
does not presently own or control, directly or indirectly, any other
corporation, association, or other business entity and has never owned or
controlled and does not currently own or control, directly or indirectly, any
capital stock or other ownership interest, directly or indirectly, in any
corporation, association, partnership, trust, joint venture or other
entity.  Each of the Company’s
subsidiaries is duly organized and existing under the laws of its jurisdiction
or organization and is in good standing under such laws.  None of the Company’s subsidiaries owns or
leases property or engages in any activity in any jurisdiction that might
require its qualification to do business as a foreign corporation and in which
failure to do so would have a Material Adverse Effect.

3.4          Authorization. 
All corporate action on the part of the Company and its stockholders
necessary, for the authorization, execution and delivery of the Transaction
Agreements, the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance and delivery of the Shares to be
sold hereunder, has been taken or will be taken prior to the Closing.  The Transaction Agreements have been duly
executed and delivered by the Company and constitute valid and legally binding
obligations of the Company, enforceable against the Company in accordance with
their terms (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general application
relating to or affecting enforcement of creditors rights).  The execution, delivery and performance of
the Transaction Agreements and compliance with the provisions thereof by the
Company, will not:

(a)           violate any provision of law,
statute, ordinance, rule or regulation or any ruling, writ, injunction, order,
judgment or decree of any court, administrative agency or other governmental
body, the violation of which would have a Material Adverse Effect;

(b)           conflict with or result in any breach
of any of the terms, conditions or provisions of, or constitute (with due
notice or lapse of time, or both) a default (or give rise to any

 

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right of termination,
cancellation or acceleration) under (i) any material agreement, document,
instrument, contract, understanding, arrangement, note, indenture, mortgage or
lease to which the Company is a party or under which the Company or any of its
assets is bound or affected, (ii) the Company’s Restated Certificate, or
(iii) the By-laws of the Company; or

(c)           result in the creation of any lien,
security interest, charge or encumbrance upon any of the properties or assets
of the Company.

3.5          Valid Issuance of Common Stock.

(a)           When issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, the
Shares will be validly issued and outstanding, fully paid and nonassessable and
not subject to any preemptive rights, rights of first refusal or other similar
rights imposed by the Company.

(b)           The outstanding shares of Common
Stock are all duly authorized and validly issued, fully paid and nonassessable.

3.6          Governmental Consents. 
No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated by the
Agreement, except for registration or qualification, or taking such action to
secure exemption from such registration or qualification, of the Shares under
applicable state or federal securities laws, which actions shall be taken, by
and at the expense of the Company, on a timely basis as may be required.

3.7          Litigation. 
Except as set forth in Section 3.7 of the Schedule of Exceptions,
there is no action, suit, proceeding or investigation pending or, to the
Company’s knowledge, currently threatened against the Company which questions
the validity of the Transaction Agreements or the right of the Company to enter
into such agreements, or to consummate the transactions contemplated thereby,
or which reasonably would be expected to have, either individually or in the
aggregate, a Material Adverse Effect, nor is the Company aware that there is
any basis for the foregoing.  To the
Company’s knowledge, there are no legal actions or investigations pending or
threatened in writing involving the employment by or with the Company of any of
the Company’s current or former employees, their use in connection with the
Company’s business of any information or techniques allegedly proprietary to
any of their former employers, or their obligations under any agreements with
prior employers or alleging a violation of any federal, state or local statute
or common law relationship with the Company. 
The Company is not a party to any order, writ, injunction; judgment or
decree of any court that has had, or could reasonably be expected to have, a
Material Adverse Effect.

 

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3.8          Employees and Consultants. 
Except as set forth in Section 3.8 of the Schedule of Exceptions:

(a)           To the Company’s knowledge; none of
its employees is obligated under any contract (including licenses, covenants or
contracts of any nature) or other agreement, or subject to any judgment, decree
or order of any court or administrative agency, that would interfere with the
use of his best efforts to promote the interests of the Company or that would
conflict with the Company’s business as proposed to be conducted.  Neither the execution nor delivery of the
Transaction Agreements, nor the carrying on of the Company’s business by the
employees of the Company, nor the conduct of the Company’s business as
proposed, will, to the Company’s knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
material contract, covenant or instrument under which any of such employees is
now obligated.

(b)           Each employee of, or consultant to,
the Company, who has or is proposed to have access to confidential or
proprietary information of the Company, is a signatory to, and is bound by, an
agreement with the Company relating to nondisclosure, proprietary information
and, with respect to employees, assignment of patent, copyright and other
intellectual property rights.

(c)           To the knowledge of the Company, no
employee of, or consultant to, the Company is in violation of any term of any
employment contract, patent disclosure agreement or any other contract or
agreement between such individual and the Company including, but not limited
to, those matters relating to (i) the relationship of any such employee
with the Company or to any other party as a result of the nature of the
Company’s business as currently conducted, or (ii) unfair competition,
trade secrets or proprietary information.

3.9          Patents and Trademarks. 
The Company owns or possesses all rights to use all patents, patent
rights or licenses, inventions, collaborative research agreements, trade
secrets, know-how, trademarks, service marks, trade names and copyrights which
are necessary to conduct its businesses as described in the Company’s Public
Filings.  Except as set forth in the
Company’s Public Filings or in Section 3.9 of the Schedule of Exceptions,
The Company has not received any written communications alleging that the
Company has violated or, by conducting its business as proposed, would violate
any of the Intellectual Property of any other person or entity.  Compliance with Other Instruments.  The Company is not in violation or default
of any provisions of the Restated Certificate or the Company’s By-laws or of
any instrument, judgment, order, writ or decree.

3.10        Agreements;
Action.

(a)           Except for agreements explicitly
contemplated hereby and as set forth in the Company’s Public Filings or in
Section 3.10 of the Schedule of Exceptions, there are no agreements,
understandings, transactions or proposed transactions between the Company and
any of its officers, directors, or affiliates, or any affiliate thereof of a
nature required to be disclosed pursuant to the provisions of
Regulation S-K.

(b)           Except as set forth in the Company’s
Public Filings or in Section 3.10 of the Schedule of Exceptions, since
December 31, 2001 the Company has not (i) declared or paid any
dividends, or authorized or made any distribution upon or with respect to any
class or series of its

 

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capital stock, or
(ii) sold, exchanged or otherwise disposed of any of its assets or rights,
other than in the ordinary course of business.

(c)           The Company has not admitted in
writing its inability to pay its debts generally as they become due, filed or
consented to the filing against it of a petition in bankruptcy or a petition to
take advantage of any insolvency act, made an assignment for the benefit of
creditors, consented to the appointment of a receiver for itself or for the
whole or any substantial part of its property, or had a petition in bankruptcy
filed against it, been adjudicated a bankrupt, or filed a petition or answer
seeking reorganization or arrangement under the federal bankruptcy laws or any
other laws of the United States or any other jurisdiction.

(d)           The Company is in compliance in all
material respects with all obligations, agreements and conditions contained in
any evidence of indebtedness or any loan agreement or other contract or
agreement (whether or not relating to indebtedness) to which the Company is a
party or is subject (collectively, the “Obligations”), the lack of compliance
with which could afford to any person the right to (i) accelerate any
indebtedness or (ii) terminate any right or agreement of the Company, the
termination of which would have a Material Adverse Effect.  To the Company’s knowledge, all other
parties to such Obligations are in compliance with the terms and conditions of
such Obligations.

3.11        Title to Property and Assets. 
The Company has good title to all of its assets, including all
properties and assets reflected on its December 31, 2001 Balance Sheet,
free and clear of all liens, claims, restrictions or encumbrances, except those
assets disposed of since the date of such Balance Sheet in the ordinary course
of business, none of which either alone or in the aggregate are material,
either in nature or amount, to the business of the Company.  All machinery and equipment included in such
properties which are material to the business of the Company are in good
condition and repair, ordinary wear and tear excepted, and each lease of real
or personal property to which the Company is a party is effective, affords the
Company peaceful and undisturbed possession of the subject matter of the lease,
and such lease is free of any liens, claims restrictions or encumbrances.  Each such lease constitutes a valid and
binding obligation of, and is enforceable in accordance with its terms against,
the Company and, to the Company’s knowledge, the other respective parties
thereto.  Except as provided in the
Company’s Public Filings or in Section 3.11 of the Schedule of Exceptions;
with respect to the property and assets it leases, the Company is in all
respects in compliance with such leases, has not received notice of any
allegations that it is in default thereunder in any respect and holds a valid
leasehold interest free of any liens, claims or encumbrances.

3.12        Financial Statements. 
The Company has delivered to the Investor (i) its report on
Form 10-K for the year ended June 30, 2001 containing its audited
Balance Sheets at June 30, 2000 and 2001 and its audited Statements of
Operations, Statements of Shareholder’s Equity and Statements of Cash Flow for
the years ended June 30, 1999, 2000 and 2001 (the “Audited Financial
Statements”); and (ii) the unaudited financial statements appearing in the
Company’s reports on Form 10-Q for the quarters ended September 30,
2001, December 31, 2001 and March 31, 2002 (the “Unaudited Financial
Statements”).  The Audited Financial
Statements and the Unaudited Financial

 

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Statements are
collectively referred to as the “Financial Statements”.  The Financial Statements have been prepared
in accordance with the United States generally accepted accounting principles
(“GAAP”) applied on a consistent basis throughout the periods indicated and
fairly present the financial condition and consistent operating results of the
Company as of the dates, and for the periods, indicated therein, provided that
the Unaudited Financial Statements may not contain complete footnote disclosure
which would be required by GAAP and are subject to audit adjustments.  Since December 31, 2001, the Company
has conducted its business in the ordinary course, and there has not been any
material adverse change in the financial condition or operations of the
Company.  Except as set forth in the
Financial Statements and in the material agreements listed in Section 3.12
of the Schedule of Exceptions, the Company has no material liabilities,
contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to September 30, 2001 and
(ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under GAAP to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company.  Except as disclosed in the Financial
Statements, the Company is not a guarantor or indemnitor of any indebtedness of
any other person, firm or corporation. 
The Company maintains and consistently applies and will continue to
maintain and consistently apply a standard system of accounting established and
administered in accordance with GAAP.

Since June 30, 2000,
the Company has filed all required reports, schedules, forms, statements and
other documents (including exhibits and all other information incorporated
therein) with the SEC (“Company SEC Documents”).  As of their respective dates, the Company SEC Documents complied
in all material respects with the requirements of the Securities Act or the
Securities Exchange Act, as the case may be, and the rules and regulations of
the SEC promulgated thereunder applicable to such Company SEC Documents, and no
Company SEC Documents when filed contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.  The financial statements of the Company
included in Company SEC Documents complied as to form, as of their respective
dates of filing with the SEC, in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods involved (except as may be
indicated in the notes thereto) and fairly present the consolidated financial
position of the Company and its consolidated subsidiaries as of the dates
thereof and the consolidated results of their operations and cash flows for the
periods then ended (subject, in the case- of unaudited statements, to normal
year-end audit adjustments).

3.13        Employee Benefit Plans. 
To the Company’s knowledge, the Company is in compliance with applicable
laws governing the Company’s “employee benefit plans” as such term is defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974,
except where such failure to comply would not have a Material Adverse Effect.

 

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3.14        Tax Returns, Payments and Elections. 
The Company has filed all tax returns and reports as required, and
within the time prescribed, by law, including without limitation, all federal,
state and local income, excise or franchise tax returns, real estate and
personal property tax returns, sales and use tax returns, payroll tax returns and
other tax returns or reports required to be filed by it.  These returns and reports are true and
correct in all material respects.  The
Company has paid or made provision for the payment of all accrued and unpaid
taxes and other charges to which the Company is subject and which are not
currently due and payable.  The federal
income tax returns of the Company have never been audited by the Internal
Revenue Service, and the Company has not agreed to an extension of the statute
of limitations with respect to any of its tax years.  Neither the Internal Revenue Service nor any other taxing
authority is now asserting, nor is threatening in writing to assert, against
the Company any deficiency or claim for additional taxes or interest thereon or
penalties in connection therewith; nor does such deficiency or claim or basis
for such deficiency or claim exist.  The
Company has not made any elections pursuant to the Internal Revenue Code of
1986, as amended (the “Code”) (other than elections which relate solely to methods
of accounting, depreciation or amortization) which would have a Material
Adverse Effect as the Company’s business is presently conducted or proposed to
be conducted.

3.15        Insurance. 
The Company has in full force and effect fire, casualty and liability
insurance policies, with coverage, in the case of property insurance,
sufficient in amount (subject to reasonable deductibles) to allow it to replace
any of its material properties or assets that might be damaged or destroyed,
and in the case of casualty and liability insurance, in amounts customary and
adequate for businesses similar to the business of the Company.

3.16        Labor Agreements and Actions. 
The Company does not have any collective bargaining agreements covering
any of its employees, nor is the Company bound by or subject to (and none of
its assets or properties is bound by or subject to) any written or oral,
express or implied, contract, commitment or arrangement with any labor union,
and no labor union has requested or, to the knowledge of the Company, has
sought to represent any of the employees, representatives or agents of the
Company.  There is no strike or other
labor dispute involving the Company pending, or to the knowledge of the Company
threatened in writing, which could have a Material Adverse Effect (as the
Company’s business is presently conducted and as it is proposed to be
conducted), nor is the Company aware of any labor organization activity
involving its employees.  Offering.  Subject to the accuracy of the Investor’s
representations set forth in Section 4 of this Agreement, the offer, sale
and issuance of the Shares to be issued in conformity with the terms of this
Agreement constitute transactions which are: (i) in compliance with
applicable federal and state securities laws; and (ii) exempt from the
registration requirements of the Securities Act and from all applicable state
registration or qualification requirements, other than those with which the
Company has complied or will comply.

3.17        Environmental
Matters.

(a)           To the Company’s knowledge, the
Company is not in violation of any Environmental Law (as hereinafter defined)
and to its knowledge, no material expenditures are or will be required in order
to comply with any Environmental Law. 
As used in this Agreement,

 

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“Environmental Law” shall
mean any applicable federal, state and local law, ordinance, rule or regulation
that regulates, fixed liability for, or otherwise relates to, the handling, use
(including use in industrial processes, in construction, as building materials,
or otherwise), treatment, storage and disposal of hazardous and toxic wastes
and substances, and to the discharge, leakage, presence, migration, actual
Release (as hereinafter defined) or threatened Release (whether by disposal, a
discharge into any water source or system or into the air, or otherwise) of any
pollutant or effluent.

(b)           The Company has not used, generated,
manufactured, refined, treated, transported, stored, handled, disposed,
transferred, produced, processed or released (hereinafter together defined as
“Release”) any Hazardous Materials (as hereinafter defined) on, from or
affecting any Property (as hereinafter defined) in any manner or by any means
in violation of any Environmental Laws and to the best of the Company’s
knowledge and belief after due investigation, there is no threat of such
Release.  As used herein, the term
“Property” shall include, without limitation, land, buildings and laboratory
facilities owned or leased by the Company or as to which the Company now has
any duties, responsibilities (for cleanup, remedy or otherwise) or liabilities
under any Environmental Laws, or as to which the Company or any subsidiary of
the Company may have such duties, responsibilities or liabilities because of
past acts or omissions of the Company or any such subsidiary or their
predecessors, or because the Company or any such subsidiary or their
predecessors in the past was such an owner or operator of, or bore some other
relationship with, such land, buildings or laboratory facilities.  The term “Hazardous Materials” shall
include, without limitation, any flammable explosives, petroleum products,
petroleum by-products, radioactive materials, hazardous wastes, hazardous
substances, toxic substances or related materials as defined by Environmental
Laws.

(c)           The Company has not received written
notice that the Company is a party potentially responsible for costs incurred
at a cleanup site or corrective action under any Environmental Laws.  The Company has not received any written
requests for information in connection with any inquiry by any Governmental
Authority (as hereinafter defined) concerning disposal sites or other
environmental matters.  As used herein,
“Governmental Authority” shall mean any nation or government, any federal,
state, municipal, local, provincial, regional or other political subdivision
thereof, and any entity or person exercising executive, legislative, judicial
regulatory or administrative functions of or pertaining to government.

(d)           The stockholders of the Company have
had no control over, or authority with respect to, the waste disposal
operations of the Company.

3.18        Permits and Other Rights; Compliance with
Laws.  The Company has all franchises, permits,
licenses and other rights and privileges necessary to permit it to own its
properties and to conduct its business as presently conducted and is in
compliance in all material respects thereunder.  The Company is in compliance in all material respects with all
laws and governmental rules and regulations applicable to its business,
properties and assets, and to the products and services sold by it, including,
without limitation, all such rules, laws and regulations relating to fair
employment practices, occupational safety and health and public safety, except
where the failure to comply would not have a Material Adverse Effect.

 

-10-

 

3.20        Corporate Records. 
The minute books of the Company provided to the Investor contain a
complete summary of all meetings of directors and stockholders since the time
of incorporation and reflect all material transactions of the Company
accurately in all material respects.

3.21        Reliance. 
The Company understands that the foregoing representations and
warranties shall be deemed material and to have been relied upon by the
Investor.  No representation or warranty
by the Company in this Agreement, and no written statement contained in any
document, certificate or other writing delivered by the Company to the Investor
contains any untrue statement of material fact or omits to state any material
fact necessary to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.

3.22        Real Property Holding Corporation. 
The Company is not a United States real property holding corporation as
defined in Section 897 of the Code.

4.             Representations and Warranties of the
Investor.  UTStarcom hereby represents and warrants the
following:

4.1          Authorization, Governmental Consents and
Compliance with Other Instruments.  All
corporate action on the part of the Investor necessary for the authorization,
execution and delivery of the Transaction Agreements and the performance of all
obligations of the Investor thereunder has been taken or will be taken prior to
the Closing.  The Transaction Agreements
constitute valid and legally binding obligations of the Investor, enforceable
in accordance with their terms, except as such enforcement is limited by
bankruptcy, insolvency and similar laws affecting creditor rights.  No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with,
any federal, state or local governmental authority on the part of the Investor
is required in connection with the consummation of the transactions
contemplated by the Transaction Agreements. 
The execution, delivery and performance of the Transaction Agreements
and the consummation of the transactions contemplated thereby will not result
in any violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any provision of
the Investor’s corporate charter or By-laws or any instrument, judgment, order,
writ, decree or contract to which the Investor is a party or by which it is
bound.

4.2          Purchase Entirely for Own Account. 
By the Investor’s execution of this Agreement, the Investor hereby
confirms that the Shares will be acquired for investment for the Investor’s own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the Investor has no present intention of
selling, granting any participation, or otherwise distributing the Shares.  By executing this Agreement, the Investor
further represents that the Investor does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares.

4.3          Disclosure of Information. 
The Investor has received all the information from the Company and its
management that the Investor considers necessary or appropriate for deciding

 

-11-

 

whether to purchase the
Shares hereunder.  The Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Shares.  The foregoing, however, does
not limit or modify the representations and warranties of the Company in
Section 3 of this Agreement.

4.4          Investment Experience and Accredited Investor
Status.  The Investor either (i) is an
accredited investor (as defined in Regulation D promulgated under the
Securities Act) or (ii) is not a United States Person as that term is
defined in Regulation S of the Securities Act, as amended and is not
acquiring the Common Shares for the account or benefit of any United States
Person.  The Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, and bear the economic risk of its investment and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Shares
hereunder.

4.5          Restricted Securities. 
The Investor understands that the Shares, when issued, will be
restricted securities under the federal securities laws inasmuch as they are
being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations such securities
may be resold without registration under the Securities Act only in certain
limited circumstances, including pursuant to Regulation S and
Rule 144 under the Securities Act. 
In this connection, the Investor represents that it is familiar with
Regulation S and Rule 144 under the Securities Act, as presently in
effect, and understands the resale limitations imposed thereby and by the
Securities Act.  Notwithstanding the
provisions of this section, Company hereby agrees to register the subject
securities pursuant to the terms and conditions contained in the Securities
Registration terms And Conditions, which is attached hereto as Exhibit B,
and incorporated into this Stock Purchase Agreement by reference thereto.

4.6          Further Limitations on Disposition. 
Without in any way limiting the representations set forth above, the
Investor further represents, warrants and agrees that it will not make any
disposition of all or any portion of the Shares, except to an Affiliate,
unless:

(a)           There is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement; or

(b)           The disposition is made pursuant to
Rule 144 or Regulation S or similar provisions of federal securities
laws as in effect from time to time; or

(c)           The Investor shall have notified the
Company of the proposed disposition; and if requested by the Company, the
Investor shall have furnished the Company with an opinion of counsel;
reasonably satisfactory tot the Company, that such disposition will not require
registration of such Shares under the Securities Act.

(a)

 

-12-

 

4.7          Legends.  It is
understood that the certificates evidencing the Shares will bear legends to the
effect of the following:

“These securities
have not been registered under the Securities Act of 1933.  They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
reasonably satisfactory to the Company that such registration is not required
or unless sold pursuant to Regulation S or Rule 144 of such Act.”

“The securities
evidenced by this certificate are subject to restrictions on transfer set forth
in an agreement between the original purchaser thereof and the corporation, a
copy of which agreement is on file at the principal executive offices of the
corporation.”

5.             Conditions to Closing of Investor. 
The Investor’s obligation to purchase the Shares at the Closing is
subject to the fulfillment as of the Closing Date of the following conditions:

5.1          Representations and Warranties Correct. 
The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects as of the Closing
Date with the same force and effect as though such representations and
warranties had been made on the Closing Date, except that representations and
warranties that speak as of a particular date shall be true and correct in all
material respects as of such date.

5.2          Covenants. 
All covenants, agreements and conditions contained in this Agreement to
be performed by the Company on or prior to the Closing Date shall have been
performed or complied with in all material respects.  All proceedings to have been taken and all waivers and consents
to be obtained in connection with the transactions contemplated by this Agreement
shall have been taken or obtained, and all documents incidental thereto shall
be satisfactory to the Investor and its counsel, and the Investor and its
counsel shall have received copies (executed or certified, as may be
appropriate) of all documents which the Investor or its counsel may reasonably
have requested in connection with such transactions.

5.3          Compliance Certificate. 
The Company shall have delivered to the Investor a certificate of the
Company in the form of Exhibit B hereto, executed by the President and
Chief Executive Officer of the Company or the Chief Financial Officer of the
Company, certifying to the fulfillment of the conditions specified in
Sections 5.1 and 5.2 of this Agreement.

5.4          Legal Opinion. 
All legal matters incident to the purchase of the Shares shall be
satisfactory to the Investor’s counsel and the Investor shall have received
from Wilson, Sonsini, Goodrich & Rosati, P.C., counsel for the Company,
such firm’s opinion addressed to the Investor and dated the date of the Closing,
in form and substance satisfactory to counsel to the Investor.

5.5          Certification of Resolutions and Officers. 
The Company shall have delivered to the Investor a certificate or
certificates, dated the date of the Closing, of the Secretary of the Corporation
certifying as to (a) the resolutions of the Company’s Board of Directors
authorizing the execution

 

-13-

 

and delivery of the
Transaction Agreements, the issuance to the Investor of the Shares, the
execution and delivery of such other documents and instruments as may be
required by this Agreement, and the consummation of the transactions
contemplated thereby, and certifying that such resolutions were duly adopted
and have not been rescinded or amended as of said date and (b) the name
and the signature of the officers of the, Company authorized to sign, as
appropriate, the Transaction Agreements and the other documents and
certificates to be delivered pursuant to this Agreement by either the Company or
any of its officers.

5.6          Certification of No Material Adverse Change. 
The Company shall have delivered to the Investor a certificate, dated
the date of the Closing, of the Chief Financial Officer of the Corporation
certifying that since December 31, 2001, there has not been any material
adverse change in the financial condition or operations of the Company.

5.7          Stock Certificates. 
The Company shall have delivered to the Investor a certificate or
certificates representing the Shares purchased by the Investor on the Closing
Date.

5.8          Confirmation Letter. 
A letter shall have been issued and delivered by the Investor’s counsel
that this agreement and other related agreements have been duly executed by the
parties concerned in the agreed forms.

6.             Conditions to Closing of the Company. 
The Company’s obligation to sell the Shares at the Closing is subject to
the fulfillment as of the date of the following condition:

6.1          Representations and Warranties Correct. 
The representations and warranties made by the Investor in
Section 4 hereof shall be true and correct in all material respects as of
the date of the Closing with the same force and effect as though such
representations and warranties had been made on the Closing Date.

7.             Mutual Conditions of Closing. 
The obligations of each of the Investor and the Company to consummate
the Closing are subject to the fulfillment as of the Closing Date of the
following conditions:

7.1          Qualifications. 
All consents, permits, approvals, qualifications and registrations to be
obtained or effected with any governmental authority, including, without
limitation, necessary Blue Sky law permits and qualifications required by any
state for the offer and sale to the investor of the Shares, shall have been
obtained or effected.

7.2          Absence of Litigation. 
There shall be no injunction, actions, suits, proceeding or
investigations pending or currently threatened against the Company or the
Investor which questions the validity of the Transaction Agreements or the right
of the Company or the Investor to enter into such agreements, or to consummate
the transactions contemplated thereby.

 

-14-

 

8.             Additional Covenants and Agreements.

8.1          Inspection of Books and Records. 
The Company shall permit the Investor from time to time, at the
Investor’s expense, to visit and inspect the Company’s properties, to examine
its books of account and records and to discuss the Company’s affairs, finances
and accounts with its officers, all at such reasonable times as may be
requested by the Investor; provided, however, that the Company shall not be
obligated pursuant to this Section 8.1 to provide access to any
information which it reasonably considers to be a trade secret or similar
proprietary or confidential information.

8.2          Standstill. 
The Investor shall not, at any time from and after the date hereof until
the tenth anniversary of the Closing Date (the “Restricted Period”), acquire
shares of Common Stock of the Company, or securities convertible into, exchangeable
for or exercisable for, Common Stock of the Company such that the Investor
would, at any time during the Restricted Period own in excess of 19.9% of the
Total Voting Power (as defined below) of the Company’s securities.  For purposes hereof, the percentage of the
Total Voting Power of the Company’s securities shall be determined by dividing
(x) by (y) and expressing the resulting quotient as a percentage, where

(x) equals the
number of shares of Common Stock of the Company held by the Investor and the
number of shares of Common Stock of the Company issuable upon conversion,
exercise or exchange of securities of the Company held by the Investor which
are convertible into, exchangeable for or exercisable for Common Stock of the
Company, either directly or indirectly; and

(y) equals the
number of issued and outstanding shares of Common Stock of the Company.

In the event that
Investor’s ownership at any time exceeds the limits set forth above, Investor
shall be deemed, automatically and with no further action on the part of
Investor, to have granted the Company’s Chairperson an irrevocable proxy to
vote all shares of Company Common Stock held by Investor in excess of the
foregoing limits in such manner as may be recommended by the Board of Directors
of the Company with respect to any matter for which approval of the Company’s
shareholders is sought.  The remedy set
forth in the preceding sentence shall not be in lieu of, but shall be in
addition to, any other remedies which Company may have at law or pursuant to
this Agreement or otherwise for breach of this provision.

9.             Miscellaneous.

9.1          Survival of Warranties. 
The warranties and representations of the Company and the Investor
contained in this Agreement shall survive the closing until the first anniversary
of the Closing Date.

9.2          Remedies. 
In case any one or more of the covenants or agreements set forth in this
Agreement shall have been breached by any party hereto, the party or parties
entitled to the benefit of such covenants or agreements may proceed to protect
and enforce their rights either by suit in equity or action at law, including,
but not limited to, an action for damages as a result of any such breach or an
action for specific performance of any such covenant or agreement contained in
this

 

-15-

 

Agreement.  The rights, powers and remedies of the
parties under this Agreement are cumulative and not exclusive of any other
right, power or remedy which such parties may have under any other agreement or
law.  No single or partial assertion or
exercise of any right, power or remedy of a party hereunder shall preclude any
other or further assertion or exercise thereof.

9.3          Successors and Assigns. 
Except as otherwise expressly provided herein, the terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties.  This Agreement and the rights and duties of the Company set forth
herein may be freely assigned, in whole or in part, upon the written consent of
the Investor, which consent may not be unreasonably withheld.  Notwithstanding the foregoing sentence, the
Company may assign this Agreement, and the rights and the duties of the Company
set forth herein, to an entity or person which purchases all or substantially
all of its assets or voting securities, so long as the successor agrees in
writing to be bound by all of the terms this Agreement.

9.4          Entire Agreement. 
This Agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings, whether written or oral, with
respect thereto; provided, however, that this Agreement is not intended to
supersede the OEM Agreement or any other agreement not related to the purchase
and sale of the Company’s securities between the Company and the Investor.

9.5          Governing Law and Consent to Jurisdiction. 
This Agreement shall be governed by and construed under the laws of the
State of California, U.S.A. (without regard to the conflict of law principles
thereof).  Each of the parties
irrevocably submits to the exclusive jurisdiction of the state and federal
courts within the State of California, U.S.A. for the purposes of any suit,
action or other proceeding arising out of this Agreement or any transaction
contemplated hereby.  Each of the
parties agrees to commence any action, suit or proceeding relating hereto in
the federal courts within the State of California, U.S.A. or if such suit,
action or other proceeding may not be brought in such court for jurisdictional
purposes, in the state courts within the State of California, U.S.A.

9.6          Counterparts.  This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

9.7          Titles and Subtitles. 
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.

9.8          Nouns and Pronouns. 
Whenever the context may require, any pronouns used herein shall include
the corresponding masculine, feminine or neuter forms, and the singular form of
names and pronouns shall include the plural and vice-versa.

9.9          Notices.  Unless
otherwise provided, all notices, requests, consents and other communications
hereunder to any party shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or duly sent by first
class registered or

 

-16-

 

certified mail, or other
courier service, postage prepaid, or telecopied with a confirmation copy by
regular mail, and addressed or telecopied to the party to be notified at the
address or telecopier number indicated for such party, as the case may be, set
forth below or such other address or telecopier number, as the case may be, as
may hereafter be designated in writing by the addressees to the addressor
listing all parties:

 

	
  To the Company:

  	
  Cal Hoagland, Chief Financial Officer

  
	
   

  	
  Interwave Communications International Ltd.

  
	
   

  	
  c/o Interwave Communications, Inc.

  
	
   

  	
  312 Constitution Drive

  
	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
  Fax: 1-650-321-6570

  
	
   

  	
   

  
	
  With a copy to:

  	
  Robin E. Foor, Esq.

  
	
   

  	
  Vice President and General Counsel

  
	
   

  	
  Interwave Communications, Inc.

  
	
   

  	
  312 Constitution Drive

  
	
   

  	
  Menlo Park, CA 94025

  
	
   

  	
  Fax: 1-650 321-6381

  
	
   

  	
   

  
	
  To the Investor:

  	
  Michael Sophie

  
	
   

  	
  Vice President and Chief Financial Officer

  
	
   

  	
  UTStarcom, Inc.

  
	
   

  	
  1275 Harbor Bay Parkway

  
	
   

  	
  Alameda, CA 94502

  
	
   

  	
  Fax: 1-510-

  

All such notices,
requests, consents and other communications shall be deemed to have been
received: (a) in the case of personal delivery, on the date of such
delivery; (b) in the case of sending by international overnight courier
service, on the fifth business day following the date of such sending by
international overnight courier service fully prepaid; and (c) in the case
of facsimile transmission, when confirmed by facsimile machine report.

9.10        Finder’s Fee. 
The Investor agrees to indemnify and to hold harmless the Company from
any liability for any commission or compensation in the nature of a finder’s
fee (and the reasonable costs and expenses of defending against such liability
or asserted liability) for which the Investor or any of its officers, partners,
employees, or representatives is responsible. 
The Company agrees to indemnify and hold harmless the Investor from any
liability for any commission or compensation in the nature of a finder’s fee
(and the reasonable costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.

9.11        Expenses. 
Each party shall pay its own fees and expenses with respect to this
Agreement.  If any action at law or in
equity is necessary to enforce or interpret the terms of this

 

-17-

 

Agreement or the Research
and Collaboration Agreement, the prevailing party shall be entitled to
reasonable attorney’s fees, costs and necessary disbursements in addition to
any other relief to which such party may be entitled.

9.12        Amendments and Waivers. 
Any term of this Agreement may be amended and the observance of any term
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of
the Company and the Investor.

9.13        Severability. 
If one or more provisions of this Agreement are held to be unenforceable
under applicable law, in any jurisdiction, such provision shall be ineffective,
as to such jurisdiction, and the balance of the Agreement shall be interpreted
as if such provision were so excluded, without invalidating the remaining
provisions of this Agreement; and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.

9.14        Confidentiality and Publicity. 
Neither the Company nor the Investor will disclose to any person (other
than its attorneys, accountants, employees, officers, and directors) the
existence or terms of this Agreement or any of the transactions contemplated
hereby without the prior written consent of the other party, except as may, in
the reasonable opinion of such party’s counsel, be required by law (in which
event the disclosing party will first consult with the other party with respect
to such disclosure).  Except to the
extent public disclosure is required by law, the Company and the Investor will
consult and reach agreement with one another as to the form and substance of
any press release or any other public disclosure of the existence or terms of
this Agreement or the transactions contemplated hereby prior to issuing any
such press release or making any such public disclosure.

 

-18-

 

IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement as of the date first above
Written.

 

	
   

  	
  UTSTARCOM, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ HONG LU

  
	
   

  	
  Name:

  	
  Hong Lu

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INTERWAVE COMMUNICATIONS

  
	
   

  	
  INTERNATIONAL LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ PRISCILLA LU

  
	
   

  	
  Name:

  	
  Priscilla Lu

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

-19-

Exhibit
A

Stock
Purchase Agreement

UTStarcom,
Inc. and interWAVE Communications

[***]

 

-20-

Schedule of Exceptions

UTStarcom, Inc. and

interWAVE Communications International, Ltd.

Stock Purchase Agreement

September 27, 2002

[***]

 

1

 

EXHIBIT B - SECURITIES REGISTRATION TERMS AND
CONDITIONS

1.             Form
D Filing; Registration; Compliance with the Securities Act, Covenants.

1.1.1        Registration
Statement; Expenses.  The Company
shall:

(a)           file
in a timely manner a Form D relating to the sale of the Shares under this
Agreement, pursuant to Securities and Exchange Commission Regulation D.

(b)           as
soon as practicable after the Closing Date, but in no event later than the
[***] day following the Closing Date, prepare and file with the Commission a
Registration Statement on Form F-3 relating to the sale of the Shares by the
Purchaser from time to time on the Nasdaq National Market (or the facilities of
any national securities exchange on which the Company’s Common Stock is then
traded) or in privately negotiated transactions (the “Registration Statement”);

(c)           provide
to the Purchaser any information required to permit the sale of the Shares
under rule 144A of the Securities Act;

(d)           subject
to receipt of necessary information from the Purchaser, use its best efforts to
cause the Commission to notify the Company of the Commission’s willingness to
declare the Registration Statement effective on or before 90 days after the
Closing Date;

(e)           notify
Purchaser promptly upon the Registration Statement, or any post-effective
amendment thereto, being declared effective by the Commission;

(f)            prepare
and file with the Commission such, amendments and supplements to the
Registration Statement and the Prospectus (as defined in Section 1.3.1
below) and take such other action, if any, as may be necessary to keep the
Registration Statement effective until the earlier of (i) one year after
the effective date of the Registration Statement, (ii) the date on which
the Shares may be resold by the Purchaser without registration or without
regard to any volume limitations by reason of Rule 144(k) under the
Securities Act or any other rule of similar effect or (iii) all of the
Shares have been sold pursuant to the Registration Statement or
Rule 144(k) under the Securities Act or any other rule of similar effect;

(g)           promptly
furnish to the Purchaser with respect to the Shares registered under the
Registration Statement such reasonable number of copies of the Prospectus,
including any supplements to or amendments of the Prospectus, in order to
facilitate the public sale or other disposition of all or any of the Shares by
the Purchaser;

(h)           during
the period when copies of the Prospectus are required to be delivered under the
Securities Act or the Exchange Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the Exchange
Act, to the extent such

 

 

requirements
are applicable to the Company, within the time periods required by the Exchange
Act and the rules and regulations promulgated thereunder;

(i)            file
documents required of the Company for customary Blue Sky clearance in all
states requiring Blue Sky clearance; provided,
however, that the Company shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which it is
not now so qualified or has not so consented; and

(j)            bear
[***] expenses in connection with the procedures in paragraphs (a) through
(f) of this Section 1.1.1 and the registration of the Shares pursuant to
the Registration Statement, including fees and expenses (whether external or
internal) of up to [***] of the Purchaser, but not including any fees and
expenses of any other advisers to the Purchaser or brokerage fees and
commissions incurred by the Purchaser.

1.1.2        Delay
in Effectiveness of Registration Statement.  [***]

1.2           Transfer
of Shares After Registration.  The
Purchaser agrees that it will not effect any disposition of the Shares or its
right to purchase the Shares that would constitute a sale within the meaning of
the Securities Act, except as contemplated in the Registration Statement
referred to in Section 1.1 or as otherwise permitted by law, and that it
will promptly notify the Company of any changes in the information set forth in
the Registration Statement regarding the Purchaser or its plan of distribution.

1.3           Indemnification.  For the purpose of this Section 1.3,
the term “Registration Statement” shall include any preliminary or final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 1.1.

1.3.1        Indemnification
by the Company.  The Company agrees
to indemnify and hold harmless the Purchaser and each person, if any, who
controls the Purchaser within the meaning of the Securities Act, against any
losses, claims, damages, liabilities or expenses, joint or several, to which
the Purchaser or such controlling person may become subject, under the
Securities Act, the Exchange Act, or any other federal or state statutory law
or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such
losses, claims, damages, liabilities or expenses (or actions in respect thereof
as contemplated below) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the Registration
Statement, including the Prospectus, financial statements and schedules, and
all other documents filed as a part thereof, as amended at the time of
effectiveness of the Registration Statement, including any information deemed
to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the
Rules and Regulations, or the Prospectus, in the form first filed with the
Commission pursuant to Rule 424(b) of the Regulations, or filed as part of
the Registration Statement at the time of effectiveness if no Rule 424(b)
filing is required (the “Prospectus”), or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state in
any of them a material fact required to be stated therein or necessary to make
the statements in any of them, in light of the

 

 

circumstances
under which they were made, not misleading, or arise out of or are based in
whole or in part on any inaccuracy in the representations and warranties of the
Company contained in this Agreement, or any failure of the Company to perform
its obligations under this Agreement or under law, and will reimburse the
Purchaser and each such controlling person for any legal and other expenses as
such expenses are reasonably incurred by the Purchaser or such controlling
person in connection with investigating, defending, settling, compromising or paying
any such loss, claim, damage, liability, expense or action; provided, however,
that the Company will not be liable in any such case to the extent that any
such loss, claim, damage, liability or expense arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Prospectus or any amendment or
supplement of the Registration Statement or Prospectus in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Purchaser expressly for use in the Registration Statement or the
Prospectus, or (ii) the failure of the Purchaser to comply with the
covenants and agreements contained in Section 1.2 of this Agreement
respecting resale of the Shares, or (iii) the inaccuracy of any
representations made by the Purchaser in this Agreement or (iv) any untrue
statement or omission of a material fact required to make such statement not
misleading in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to the Purchaser before the pertinent sale or sales by the
Purchaser.

1.3.2        Indemnification
by the Purchaser.  The Purchaser
will indemnify and hold harmless the Company, each of its directors, each of
its officers who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act, against any
losses, claims, damages, liabilities or expenses to which the Company, each of
its directors, each of its officers who signed the Registration Statement or
controlling persona may become subject, under the Securities Act, the Exchange
Act, or any other federal or state statutory law or regulation, or at common
law or otherwise (including in settlement of any litigation, if such settlement
is effected with the written consent of the Purchaser, which consent shall not
be unreasonably withheld) insofar as such losses, claims, damages, liabilities
or expenses (or actions in respect thereof as contemplated below) arise out of
or are based upon (i) any failure on the part of the Purchaser to comply
with the covenants and agreements contained in Section 1.2 of this
Agreement respecting the sale of the Shares or (ii) the inaccuracy of any
representation made by the Purchaser in this Agreement or (iii) any untrue
or alleged untrue statement of any material fact contained in the Registration
Statement, the Prospectus, or any amendment or supplement to the Registration
Statement or Prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in the Registration Statement, the
Prospectus, or any amendment or supplement thereto, in reliance upon, and in
conformity with written information furnished to the Company by or on behalf of
the Purchaser expressly for use therein; provided, however, that the Purchaser
shall not be liable for any such untrue or alleged untrue statement or omission
or alleged omission of which the Purchaser has delivered to the Company in
writing a correction before the occurrence of the transaction from which such
loss was incurred, and the Purchaser will reimburse the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person for any legal and

 

other
expense reasonably incurred by the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action.

1.3.3        Indemnification
Procedure.

(a)           Promptly
after receipt by an indemnified party under this Section 1.3 of notice of
the threat or commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying party under this
Section 1.3, promptly notify the indemnifying party in writing of the
claim; but the omission so to notify the indemnifying party will not relieve it
from any liability which it may have to any indemnified party for contribution
or otherwise under the indemnity agreement contained in this Section 1.3
or to the extent it is not prejudiced as a result of such failure:

(b)           In
case any such action is brought against any indemnified party and such
indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party
and the indemnified party in conducting the defense of any such action or that
there may be legal defenses available to it or other indemnified parties that
are different from or additional to those available to the indemnifying party,
the indemnified party or parties shall have the right to select separate
counsel to assume such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 1.3 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless;

(i)    the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not
be liable for the expenses of more than one separate counsel, approved by such
indemnifying party representing all of the indemnified parties who are parties
to such action) or

(ii)   the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of action, in each of which cases the
reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party. Notwithstanding the provisions of this Section 1.3,
the Purchaser shall not be liable for any indemnification obligation under this
Agreement in excess of the amount of gross proceeds received by the Purchaser
from the sale of the Shares.

 

 

1.3.4        Contribution.  If the indemnification provided for in this
Section 1.3 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under this Section 1.3 in respect to any losses, claims, damages,
liabilities or expenses referred to in this Agreement, then each applicable
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of any losses, claims, damages, liabilities or
expenses referred to in this Agreement

(a)           in
such proportion as is appropriate to reflect the relative benefits received by
the Company and the Purchaser from the placement of Common Stock or

(b)           if
the allocation provided by clause (a) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (a) above but the relative fault of the
Company and the Purchaser in connection with the statements or omissions or.
inaccuracies in the representations and warranties in this Agreement that
resulted in such losses, claims, damages, liabilities or expenses, as well as
any other relevant equitable considerations. The respective relative benefits
received by the Company on, the one hand and the Purchaser on the other shall
be deemed to be in the same proportion as the amount paid by the Purchaser to
the Company pursuant to this Agreement for the Shares purchased by the
Purchaser that were sold pursuant to the Registration Statement bears to the
difference (the “Difference”) between the amount the Purchaser paid for the
Shares that were sold pursuant to’ the Registration Statement and the amount
received by the Purchaser from such sale. The relative fault of the Company and
the Purchaser shall be determined by reference to, among other things, whether
the untrue or alleged statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation or warranty relates to information supplied by the Company or by
the Purchaser and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 1.3.3, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim,. The provisions set forth in
Section 1.3.3 with respect to the notice of the threat or commencement of
any threat or action shall apply if a claim for contribution is to be made
under this Section 1.3.4; provided, however, that no additional notice
shall be required with respect to any threat or action for which notice has
been given under Section 1.3 for purposes of indemnification. The Company
and the Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 1.3 were determined solely by pro rata allocation
(even if the Purchaser were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to in this paragraph. Notwithstanding the provisions of
this Section 1.3, no Purchaser shall be required to contribute any amount
in excess of the amount by which the Difference exceeds the amount of any
damages that the Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Purchaser’ obligations
to contribute pursuant to this Section 1.3 are several and not joint.

 

 

1.4           Termination
of Conditions and Obligations.  The
restrictions imposed by this Section 1 upon the transferability of the
Shares shall cease and terminate as to any particular number of the Shares upon
[***] or at such time as an opinion of counsel satisfactory in form and
substance to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.

1.5           Information
Available.  So long as the
Registration Statement is effective covering the resale of Shares owned by the
Purchaser, the Company will furnish to the Purchaser;

(a)           as
soon as practicable after available (but in the case of the Company’s Annual
Report to Stockholders, within [***] after the end of each fiscal year of the
Company), one copy of

(i)    its Annual
Report to Stockholders (which Annual Report shall contain financial statements
audited in accordance with generally accepted accounting principles by a
national firm of certified public accountants);

(ii)   if not
included in substance in the Annual Report to Stockholders, its Annual Report
on Form 10-K;

(iii)  if not
included in substance in its Quarterly Reports to Stockholders, its quarterly
reports on Form 10-Q; and

(iv)  a full copy
of the particular Registration Statement covering the Shares (the foregoing, in
each case, excluding exhibits);

(v)   upon the
request of the Purchaser, a reasonable number of copies of the Prospectus to
supply to any other party requiring the Prospectus.

1.6           Rule 144
Information.  For two years after
the date of this Agreement, the Company shall file all reports required to be
filed by it under the Securities Act, the Rules and Regulations and the
Exchange Act and shall take such further action to the extent required to
enable the Purchaser to sell the Shares pursuant to Rule 144 under the
Securities Act (as such rule may be amended from time to time).

1.7           Consultation
Prior to the Issuance of Certain Securities.  The Company shall not sell or issue shares of Common Stock or any
other security of the Company convertible, exercisable or exchangeable into
shares of Common Stock, for a purchase, conversion, exercise or exchange price
per share which is subject to adjustment based on the market price of the
Common Stock at the time of conversion, exercise or exchange of such security into
Common Stock, without first consulting the Purchaser immediately prior to the
approval by the Company’s Board of Directors of such sale or issuance;
provided, however, that (i) the Company’s obligation to enter into such
consultations with the Purchaser shall be subject to the Purchaser entering
into a nondisclosure agreement in form and substance appropriate for
transactions of this nature, (ii) nothing in this Section 1.7 shall
prohibit the Company from consummating any such transaction provided that it
has

 

 

complied with the
consultation provisions hereof and (iii) the provisions of this
Section 1.7 shall not be applicable to transactions that are not effected
for the purpose of raising capital.

 

 

Compliance Certificate

UTStarcom, Inc. and

interWAVE Communications International, Ltd.

Stock Purchase Agreement

September 27, 2002

                                                                                                                                                September 27,
2002

I, Priscilla Lu, Chief Executive Officer of
interWAVE Communications International, Ltd. (“interWAVE”), certify as follows,
as to the Stock Purchase Agreement of September 27, 2002 between
UTStarcom, Inc. and interWAVE:

 

1.                                      Representations and Warranties Correct.  The representations and warranties made by the Company in
Section 3 of the Agreement are true and correct in all material respects
as of the Closing Date with the same force and effect as though such
representations and warranties had been made on the Closing Date, except that
representations and warranties that speak as of a particular date are true and
correct in all material respects as of such date.

 

2.                                      Covenants.  All
covenants, agreements and conditions contained in the Agreement to be performed
by the Company on or prior to the Closing Date have been performed or complied
with in all material respects. All proceedings to have been taken and all
waivers. and consents to be obtained in connection with the transactions
contemplated by this Agreement have been taken. or obtained.

 

I certify that the foregoing is true and
correct.

 

	
   

  	
  INTERWAVE COMMUNICATIONS

  
	
   

  	
  INTERNATIONAL, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ PRISCILLA LU

  
	
   

  	
  Priscilla Lu

  
	
   

  	
  Chief Executive Officer

  

 

 

 

Section 5.4

Certification of Resolutions and Officers

UTStarcom, Inc.

September 27,
2002

I,
Robin E. Foor, Secretary of interWAVE Communications International, Ltd. (the
“Company”), certify that:

(a)
the Board of Directors of the Company has adopted resolutions duly authorizing
the execution and delivery of the Agreement, the issuance to the Investor of
the Shares, the execution and delivery of such other documents and instruments
as may be required by the Agreement, and the consummation of the transactions
contemplated thereby, and such resolutions were duly adopted and have not been
rescinded or amended as of this date, and

(b)
Priscilla Lu, Chief Executive Officer, is authorized to sign, as appropriate,
the Agreement and the other documents and certificates to be delivered pursuant
to this Agreement by either the Company or any of its officers, and her
signature appears on the Agreement.

I
certify that the foregoing is true and correct.

	
   

  	
  INTERWAVE COMMUNICATIONS

  
	
   

  	
  INTERNATIONAL, LTD.

  
	
   

  	
   

  
	
   

  	
  /s/ ROBIN E. FOOR

  
	
   

  	
  Robin E. Foor

  
	
   

  	
  Secretary

  

 

 

Section 5.6

Certification of No Material Adverse Change

UTStarcom - interWAVE Amendment to OEM Agreement

September 27,
2002

I, Cal Hoagland, Chief
Financial Officer of interWAVE Communications International, Ltd. (the
“Company”) represent, to the best of my knowledge and belief, that since
June 30, 2002, there has not been any material adverse change in the
financial position or results of operations of the Company other than that
described in Section 3.12 of the Stock Purchase Agreement and in the
Schedule of Exceptions.

 

	
   

  	
  INTERWAVE COMMUNICATIONS

  
	
   

  	
  INTERNATIONAL, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ CAL HOAGLAND

  
	
   

  	
  Cal Hoagland

  
	
   

  	
  Chief Financial Officer

  

 

 

Exhibit B

 

Specifications - Statement of Work

UTStarcom - interWAVE Amendment to OEM Agreement

September 27, 2002

 

                The
parties will meet upon signing of the Amendment to OEM Agreement to develop a
detailed written Statement of Work (“SOW”), and a written Product Specification
from the SOW.  The SOW shall include the
following:

 

[***]

 

                The
parties will send people from [***] and from [***] to develop the written SOW.

 

                Each
party will appoint a project manager as the single point of contact for the
project.

 

                [***]
will be the project manager for interWAVE.

 

                A
preliminary SOW is attached and will be superceded by the SOW created.

 

 

Exhibit C

Delivery Schedule

UTStarcom - interWAVE Amendment to OEM Agreement

September 27,
2002 (= Amendment Effective Date)

The parties shall complete the Statement of
Work and interWAVE shall develop the interface between the UTSI iPAS, using a
third party media gateway, as follows:

Development Milestones

 

	
  [***] - Milestones

  	
   

  	
  Completion Date

  
	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

UTStarcom must provide [***] to work [***] on
the project.

 

interWAVE/GBase will staff the project with
[***].

 

UTStarcom must provide [***] for the project
by [***].

 

                Development
will begin, and all completion dates are measured from [***]

 

Development will proceed in parallel to the
preparation of the detailed written Statement of Work and the written Product
Specification, to be completed by [***].

 

The development schedule for an alternative
path shall be defined by the Statement Work.

 

 

PREFERRED ESCROW
AGREEMENT

Account Number ____________________

 

This agreement (“Agreement”) is effective
September 27, 2002 among DSI Technology Escrow Services, Inc. (“DSI”),
Interwave Communications International, Ltd. (“Depositor”) and UTStarcom, Inc.
(“Preferred Beneficiary”), who collectively may be referred to in this
Agreement as the parties (“Parties”).

 

A.            Depositor
and Preferred Beneficiary have entered or will enter into a license agreement,
development agreement, and/or other agreement regarding certain proprietary
technology of Depositor (referred to in this Agreement as “the License
Agreement”).

 

B.            Depositor
desires to avoid disclosure of its proprietary technology except under certain
limited circumstances.

 

C.            The
availability of the proprietary technology of Depositor is critical to Preferred
Beneficiary in the conduct of its business and, therefore, Preferred
Beneficiary needs access to the proprietary technology under certain limited
circumstances.

 

D.            Depositor
and Preferred Beneficiary desire to establish an escrow with DSI to provide for
the retention, administration and controlled access of the proprietary
technology materials of Depositor.

 

E.             The
parties desire this Agreement to be supplementary to the License Agreement
pursuant to 11 United States [Bankruptcy] Code, Section 365(n).

ARTICLE 1 — DEPOSITS

1.1           Obligation to Make Deposit.
Upon the completion of the development agreed to by the parities in the
September 27, 2002 Amendment to the OEM Agreement between UTStarcom and
Interwave Communications International, Ltd. (the “License Agreement”),
Depositor shall deliver to DSI the proprietary technology and other materials
(“Deposit Materials”) required to be deposited pursuant to the terms and
conditions of the License Agreement or, if the License Agreement does not
identify the materials to be deposited with DSI, then such materials will be
identified on Exhibit A. If Exhibit A is applicable, it is to be
prepared and signed by Depositor and Preferred Beneficiary. DSI shall have no
obligation with respect to the preparation, signing or delivery of
Exhibit A.

1.2           Identification of Tangible Media.
Prior to the delivery of the Deposit Materials to DSI, Depositor shall
conspicuously label for identification each document, magnetic tape, disk, or
other tangible media upon which the Deposit Materials are written or stored.
Additionally, Depositor shall complete Exhibit B to this Agreement by
listing each such tangible media by the item label description, the type of
media and the quantity. Exhibit B shall be signed by Depositor and delivered
to DSI with the Deposit Materials. Unless and until Depositor makes the initial
deposit with DSI, DSI shall have no obligation with respect to this Agreement,
except the obligation to notify the parties regarding the status of the account
as required in Section 2.2 below.

 

 

1.3           Deposit Inspection. When DSI
receives the Deposit Materials and Exhibit B, DSI will conduct a deposit
inspection by visually matching the labeling of the tangible media containing
the Deposit Materials to the item descriptions and quantity listed on
Exhibit B.  In addition to the
deposit inspection, Preferred Beneficiary may elect to cause a verification of
the Deposit Materials in accordance with Section 1.6 below.

1.4           Acceptance of Deposit. At
completion of the deposit inspection, if DSI determines that the labeling of
the tangible media matches the item descriptions and quantity on
Exhibit B, DSI will date and sign Exhibit B and mail a copy thereof
to Depositor and Preferred Beneficiary. If DSI determines that the labeling
does not match the item descriptions or quantity on Exhibit B, DSI will
(a) note the discrepancies in writing on Exhibit B; (b) date and
sign Exhibit B with the exceptions noted; and (c) mail a copy of
Exhibit B to Depositor and Preferred Beneficiary. DSI’s acceptance of the
deposit occurs upon the signing of Exhibit B by DSI. Delivery of the
signed Exhibit B to Preferred Beneficiary is Preferred Beneficiary’s
notice that the Deposit Materials have been received and accepted by DSI.

1.5           Depositor’s Representations. Depositor
represents as follows:

a.                                       Depositor lawfully possesses all of the
Deposit Materials deposited with DSI;

b.                                      With respect to all of the Deposit
Materials, Depositor has the right and authority to grant to DSI and Preferred
Beneficiary the rights as provided in this Agreement;

c.                                       The Deposit Materials are not subject to
any lien or other encumbrance;

d.                                      The Deposit Materials consist of the
proprietary technology and other materials identified either in the License
Agreement or Exhibit A, as the case may be; and

e.                                       The Deposit Materials are readable and
useable in their current form or, if any portion of the Deposit Materials is
encrypted, the decryption tools and decryption keys have also been deposited.

1.6           Verification. Preferred
Beneficiary shall have the right, at Preferred Beneficiary’s expense, to cause
a verification of any Deposit Materials. Preferred Beneficiary shall notify
Depositor and DSI of Preferred Beneficiary’s request for verification.
Depositor shall have the right to be present at the verification. A
verification determines, in different levels of detail, the accuracy,
completeness, sufficiency and quality of the Deposit Materials. If a
verification is elected after the Deposit Materials have been delivered to DSI,
then only DSI, or at DSI’s election an independent person or company selected
and supervised by DSI, may perform the verification.

1.7           Deposit Updates. Unless
otherwise provided by the License Agreement, Depositor shall update the Deposit
Materials within [***] of each release of a new version of the product which is
subject to the License Agreement. Such updates will be added to the existing
deposit. All deposit updates shall be listed on a new Exhibit B and
Depositor shall sign the new Exhibit B. Each Exhibit B will be held
and maintained separately within the escrow account. An independent record will
be created which will document the activity for each Exhibit B. The
processing of all deposit updates shall be in accordance with Sections 1.2
through 1.6 above. All references in this Agreement to the Deposit Materials
shall include the initial Deposit Materials and any updates.

 

 

1.8           Removal of Deposit Materials.
The Deposit Materials may be removed and/or exchanged only on written
instructions signed by Depositor and Preferred Beneficiary, or as otherwise
provided in this Agreement.

ARTICLE 2 — CONFIDENTIALITY AND RECORD
KEEPING

2.1           Confidentiality. DSI shall
maintain the Deposit Materials in a secure, environmentally safe, locked
facility which is accessible only to authorized representatives of DSI. DSI
shall have the obligation to reasonably protect the confidentiality of the
Deposit Materials. Except as provided in this Agreement, DSI shall not
disclose, transfer, make available, or use the Deposit Materials. DSI and Preferred
Beneficiary shall not disclose the content or existence of this Agreement to
any third party unless having been agreed to by all parties in writing. If DSI
receives a subpoena or any other order from a court or other judicial tribunal
pertaining to the disclosure or release of the Deposit Materials, DSI will
immediately notify the parties to this Agreement unless prohibited by law. It
shall be the responsibility of Depositor and/or Preferred Beneficiary to
challenge any such order; provided, however, that DSI does not waive its rights
to present its position with respect to any such order. DSI will not be
required to disobey any order from a court or other judicial tribunal. (See
Section 7.5 below for notices of requested orders.)

2.2           Status Reports. DSI will issue
to Depositor and Preferred Beneficiary a report profiling the account history
[***]. DSI may provide copies of the account history pertaining to this
Agreement upon the request of any party to this Agreement.

2.3           Audit Rights. During the term
of this Agreement, Depositor and Preferred Beneficiary shall each have the
right to inspect the written records of DSI pertaining to this Agreement. Any
inspection shall be held during normal business hours and following reasonable
prior notice.

ARTICLE 3 — GRANT OF RIGHTS TO DSI

3.1           Title to Media. Depositor
hereby transfers to DSI the title to the media upon which the proprietary
technology and materials are written or stored. However, this transfer does not
include the ownership of the proprietary technology and materials contained on
the media such as any copyright, trade secret, patent or other intellectual
property rights.

3.2           Right to Make Copies. DSI
shall have the right to make copies of the Deposit Materials as reasonably
necessary to perform this Agreement. DSI shall copy all copyright,
nondisclosure, and other proprietary notices and titles contained on the
Deposit Materials onto any copies made by DSI. With all Deposit Materials
submitted to DSI, Depositor shall provide any and all instructions as may be
necessary to duplicate the Deposit Materials including but not limited to the
hardware and/or software needed.

3.3           Right to Transfer Upon Release.
Depositor hereby grants to DSI the right to transfer the Deposit Materials to
Preferred Beneficiary upon any release of the Deposit Materials for use by
Preferred Beneficiary in accordance with Section 4.5. Except upon such a
release or as otherwise provided in this Agreement, DSI shall not transfer the
Deposit Materials.

 

 

ARTICLE 4 — RELEASE OF DEPOSIT

4.1           Release Conditions. As used in
this Agreement, “Release Condition” shall mean the following:

a.                                       Depositor’s failure to carry out a
material obligation imposed on it pursuant to the License Agreement, after
[***] written notice and opportunity to cure; or

b.                                      Depositor’s appointment of a receiver,
execution of an assignment for the benefit of creditors, going into liquidation
in bankruptcy, or ceasing to operate its business for a period of [***].

 

Where any dispute arises over the meaning and
interpretation of the term “Release Condition” as applied to the terms and
conditions of the License Agreement, the matter shall be submitted to
arbitration before a retired judge at Judicial Arbitration and Mediation
Service (“JAMS”) in San Francisco, California under the JAMS Rules.

4.2           Filing For Release. If
Preferred Beneficiary believes in good faith that a Release Condition has
occurred, Preferred Beneficiary may provide to DSI written notice of the
occurrence of the Release Condition and a request for the release of the
Deposit Materials. Upon receipt of such notice, DSI shall provide a copy of the
notice to Depositor by commercial express mail.

4.3           Contrary Instructions. From
the date DSI mails the notice requesting release of the Deposit Materials, Depositor
shall have [***] to deliver to DSI contrary instructions (“Contrary
Instructions”). Contrary Instructions shall mean the written representation by
Depositor that a Release Condition has not occurred or has been cured. Upon
receipt of Contrary Instructions; DSI shall send a copy to Preferred
Beneficiary by commercial express mail. Additionally, DSI shall notify both
Depositor and Preferred Beneficiary that there is a dispute to be resolved
pursuant to Section 7.3 of this Agreement. Subject to Section 5.2 of
this Agreement, DSI will continue to store the Deposit Materials without
release pending (a) joint instructions from Depositor and Preferred
Beneficiary; (b) dispute resolution pursuant to Section 7.3; or
(c) order of a court.

4.4           Release of Deposit. If DSI
does not receive Contrary Instructions from the Depositor, DSI is authorized to
release the Deposit Materials to the Preferred Beneficiary or, if more than one
beneficiary is registered to the deposit, to release a copy of the Deposit
Materials to the Preferred Beneficiary. However, DSI is entitled to receive any
fees due DSI before making the release. Any copying expense in excess of $300
will be chargeable to Preferred Beneficiary. This Agreement will terminate upon
the release of the Deposit Materials held by DSI.

4.5           Right to Use Following Release.
Unless otherwise provided in the License Agreement, upon release of the Deposit
Materials in accordance with this Article 4, Preferred Beneficiary shall have
the right to use the Deposit Materials for the sole purpose of continuing the
benefits afforded to Preferred Beneficiary by the License Agreement. Preferred
Beneficiary shall be obligated to maintain the confidentiality of the released
Deposit Materials.

 

 

ARTICLE 5 — TERM AND TERMINATION

5.1           Term of Agreement. The initial
term of this Agreement is for a period of [***]. Thereafter, this Agreement
shall automatically renew from year-to-year unless (a) Depositor and
Preferred Beneficiary jointly instruct DSI in writing that the Agreement is
terminated; or (b) DSI instructs Depositor and Preferred Beneficiary in
writing that the Agreement is terminated for nonpayment in accordance with
Section 5.2 or by resignation in accordance with Section 5.3. If the
Deposit Materials are subject to another escrow agreement with DSI, DSI
reserves the right, [***] to adjust the anniversary date of this Agreement to
match the then prevailing anniversary date of such other escrow arrangements.

5.2           Termination for Nonpayment. In
the event of the nonpayment of fees owed to DSI, DSI shall provide written
notice of delinquency to all parties to this Agreement. Any party to this
Agreement shall have the right to make the payment to DSI to cure the default.
If the past due payment is not received in full by DSI within one month of the
date of such notice, then DSI shall have the right to terminate this Agreement
at any time thereafter by sending written notice of termination to all parties.
DSI shall have no obligation to take any action under this Agreement so long as
any payment due to DSI remains unpaid.

5.3           Termination by Resignation.
DSI reserves the right to terminate this Agreement, for any reason, by
providing Depositor and Preferred Beneficiary with [***] written notice of its
intent to terminate this Agreement. Within the [***], the Depositor and
Preferred Beneficiary may provide DSI with joint written instructions
authorizing DSI to forward the Deposit Materials to another escrow company
and/or agent or other designated recipient. If DSI does not receive said joint
written instructions within [***] of the date of DSI’s written termination
notice, then DSI shall destroy, return or otherwise deliver the Deposit
Materials in accordance with Section 5.4.

5.4           Disposition of Deposit Materials
Upon Termination. Subject to the foregoing termination provisions, and upon
termination of this Agreement, DSI shall destroy, return, or otherwise deliver
the Deposit Materials in accordance with Depositor’s instructions. If there are
no instructions, DSI may, at its sole discretion, destroy the Deposit Materials
or return them to Depositor. DSI shall have no obligation to destroy or return
the Deposit Materials if the Deposit Materials are subject to another escrow
agreement with DSI or have been released to the Preferred Beneficiary in
accordance with Section 4.4.

5.5           Survival of Terms Following
Termination. Upon termination of this Agreement, the following provisions
of this Agreement shall survive:

a.                                       Depositor’s Representations
(Section 1.5);

b.                                      The obligations of confidentiality with
respect to the Deposit Materials;

c.                                       The rights granted in the sections
entitled Right to Transfer Upon Release (Section 3.3) and Right to Use
Following Release (Section 4.5), if a release of the Deposit Materials has
occurred prior to termination;

d.                                      The obligation to pay DSI any fees and
expenses due;

 

 

e.                                       The provisions of Article 7; and

f.                                         Any provisions in this Agreement which
specifically state they survive the termination of this Agreement.

ARTICLE 6 — DSI’S FEES

6.1           Fee Schedule. DSI is entitled
to be paid its standard fees and expenses applicable to the services provided.
DSI shall notify the party responsible for payment of DSI’s fees [***] prior to
any increase in fees. For any service not listed on DSI’s standard fee
schedule, DSI will provide a quote prior to rendering the service, if
requested.

6.2           Payment Terms. DSI shall not
be required to perform any service unless the payment for such service and any
outstanding balances owed to DSI are paid in full. Fees are due upon receipt of
a signed contract or receipt of the Deposit Materials whichever is earliest. If
invoiced fees are not paid, DSI may terminate this Agreement in accordance with
Section 5.2.

ARTICLE 7 — LIABILITY AND DISPUTES

7.1           Right to Rely on Instructions.
DSI may act in reliance upon any instruction, instrument, or signature
reasonably believed by DSI to be genuine. DSI may assume that any employee of a
party to this Agreement who gives any written notice, request, or instruction
has the authority to do so. DSI will not be required to inquire into the truth
or evaluate the merit of any statement or representation contained in any
notice or document. DSI shall not be responsible for failure to act as a result
of causes beyond the reasonable control of DSI.

7.2           Indemnification. Depositor and
Preferred Beneficiary each agree to indemnify, defend and hold harmless DSI
from any and all claims, actions, damages, arbitration fees and expenses,
costs, attorney’s fees and other liabilities (“Liabilities”) incurred by DSI
relating in any way to this escrow arrangement unless such Liabilities were
caused solely by the negligence or willful misconduct of DSI.

7.3           Dispute Resolution. Any
dispute relating to or arising from this Agreement shall be resolved by
arbitration under the Commercial Rules of the American Arbitration Association.
Three arbitrators shall be selected. The Depositor and Preferred Beneficiary
shall each select one arbitrator and the two chosen arbitrators shall select
the third arbitrator, or failing agreement on the selection of the third
arbitrator, the American Arbitration Association shall select the third
arbitrator. However, if DSI is a party to the arbitration, DSI shall select the
third arbitrator. Unless otherwise agreed by Depositor and Preferred
Beneficiary, arbitration will take place in San Diego, California, U.S.A. Any
court having jurisdiction over the matter may enter judgment on the award of
the arbitrator(s). Service of a petition to confirm the arbitration award may
be made by First Class mail or by commercial express mail, to the attorney for
the party or, if unrepresented, to the party at the last known business
address.

7.4           Controlling Law. This
Agreement is to be governed and construed in accordance with the laws of the
State of California, without regard to its conflict of law provisions.

 

 

7.5           Notice of Requested Order. If
any party intends to obtain an order from the arbitrator or any court of
competent jurisdiction which may direct DSI to take, or refrain from taking any
action, that party shall:

a.                                       Give DSI at least [***] prior notice of
the hearing;

b.                                      Include in any such order that, as a
precondition to DSI’s obligation, DSI be paid in full for any past due fees and
be paid for the reasonable value of the services to be rendered pursuant to such
order; and

c.                                       Ensure that DSI not be required to
deliver the original (as opposed to a copy) of the Deposit Materials if DSI may
need to retain the original in its possession to fulfill any of its other
duties.

ARTICLE 8 — GENERAL PROVISIONS

8.1           Entire Agreement. This
Agreement, which includes Exhibits described herein, embodies the entire
understanding among the parties with respect to its subject matter and
supersedes all previous communications, representations or understandings,
either oral or written. DSI is not a party to the License Agreement between
Depositor and Preferred Beneficiary and has no knowledge of any of the terms or
provisions of any such License Agreement. DSI’s only obligations to Depositor
or Preferred Beneficiary are as set forth in this Agreement. No amendment or
modification of this Agreement shall be valid or binding unless signed by all
the parties hereto, except that Exhibit A need not be signed by DSI,
Exhibit B need not be signed by Preferred Beneficiary and Exhibit C
need not be signed.

8.2           Notices. All notices,
invoices, payments, deposits and other documents and communications shall be
given to the parties at the addresses specified in the attached Exhibit C.
It shall be the responsibility of the parties to notify each other as provided
in this Section in the event of a change of address. The parties shall have the
right to rely on the last known address of the other parties. Unless otherwise
provided in this Agreement, all documents and communications may be delivered
by First Class mail.

8.3           Severability. In the event any
provision of this Agreement is found to be invalid, voidable or unenforceable,
the parties agree that unless it materially affects the entire intent and
purpose of this Agreement, such invalidity, voidability or unenforceability
shall affect neither the validity of this Agreement nor the remaining
provisions herein, and the provision in question shall be deemed to be replaced
with a valid and enforceable provision most closely reflecting the intent and
purpose of the original provision.

8.4           Successors. This Agreement
shall be binding upon and shall inure to the benefit of the successors and
assigns of the parties. However, DSI shall have no obligation in performing
this Agreement to recognize any successor or assign of Depositor or Preferred
Beneficiary unless DSI receives clear, authoritative and conclusive written
evidence of the change of parties.

 

 

8.5           Regulations. Depositor and
Preferred Beneficiary are responsible for and warrant compliance with all applicable
laws, rules and regulations, including but not limited to customs laws, import,
export, and re-export laws and government regulations of any country from or to
which the Deposit Materials may be delivered in accordance with the provisions
of this Agreement,

 

	
  Interwave
  Communications International, Ltd.

  	
   

  	
  UTStarcom, Inc.

  
	
  Depositor

  	
   

  	
  Preferred
  Beneficiary

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ PRISCILA LU

  	
   

  	
  By:

  	
  /s/ HONG LU

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Priscilla Lu

  	
   

  	
  Name: 

  	
  Hong Lu

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Chief Executive
  Officer

  	
   

  	
  Title: 

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  September 27,
  2002

  	
   

  	
  Date: 

  	
  September 27,
  2002

  

 

	
   

  	
  DSI Technology Escrow
  Services, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Grant Jones

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Grant Jones

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Regional Sales Manager

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  November 4, 2002

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT A

MATERIALS TO BE DEPOSITED

Account Number ____________________

 

Depositor represents to Preferred Beneficiary
that Deposit Materials delivered to DSI shall consist of the following:

 

[***]

 

 

 

 

	
  Interwave
  Communications International, Ltd.

  	
   

  	
  UTStarcom, Inc.

  
	
  Depositor

  	
   

  	
  Preferred
  Beneficiary

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ PRISCILA LU

  	
   

  	
  By:

  	
  /s/ Hong Lu

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name: 

  	
  Priscilla Lu

  	
   

  	
  Name: 

  	
  Hong Lu

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  Chief Executive
  Officer

  	
   

  	
  Title: 

  	
  Chief Executive
  Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date: 

  	
  September 27,
  2002

  	
   

  	
  Date: 

  	
  September 27,
  2002

  

 

 

EXHIBIT B

DESCRIPTION OF DEPOSIT
MATERIALS

 

Depositor Company Name: interWAVE
Communications International, Ltd.

 

Account
Number                                                                                                                                                                                         

 

Product
Name:              [***]

(Product Name will appear as the
Exhibit B Name on Account History report)

 

DEPOSIT
MATERIAL DESCRIPTION:

	
  Quantity

  	
   

  	
  Media Type & Size

  	
   

  	
  Label Description of
  Each Separate Item

  
	
   

  	
   

  	
   

  	
  Disk 3.5” or _____

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  DAT tape _____mm

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CD-ROM

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Data cartridge tape
  _____

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  TK 70 or _____ tape

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Magnetic tape _____

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Documentation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Other____________________

  	
   

  	
   

  

 

	
  PRODUCT
  DESCRIPTION:

  	
   

  
	
  Environment

  	
   

  
			

 

	
  DEPOSIT
  MATERIAL INFORMATION:

  	
   

  	
   

  
	
  Is the media or are any of
  the files encrypted? Yes / No If yes, please include any passwords and the
  decryption tools.

  
	
  Encryption tool name

  	
   

  	
  Version

  	
   

  
	
  Hardware required

  	
   

  
	
  Software required

  	
   

  
	
  Other required information

  	
   

  
								

 

	
  I certify for Depositor that the above described

  Deposit Materials have been transmitted to DSI:

  	
   

  	
  DSI has inspected and accepted the above

  materials (any exceptions are noted above):

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
   

  	
  Signature

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print Name

  	
   

  	
   

  	
  Print Name

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  Date Accepted

  	
   

  
	
   

  	
   

  	
   

  	
  Exhibit B#

  	
   

  

 

Send
materials to: [***]

 

 

 

EXHIBIT C

DESIGNATED
CONTACT

Account Number ____________________

 

	
  Notices, deposit
  material returns and communications to Depositor should be addressed to:

  	
   

  	
  Invoices to Depositor
  should be addressed to:

  
	
   

  	
   

  	
   

  
	
  Company Name: 

  	
  Interwave Advanced 

  	
   

  	
  Robin Foor 

  
	
   

  	
  Communications, Inc. 

  	
   

  	
  Vice President
  and General Counsel 

  
	
  Address:

  	
  420 Widget Lane 

  	
   

  	
  Interwave
  Communications, Inc.

  
	
   

  	
  Walnut Creek, CA 94598

  	
   

  	
  312 Constitution
  Drive,

  
	
   

  	
   

  	
   

  	
  Menlo Park, CA
  94025

  
	
  Designated Contact:
  Kiomars Anvari

  	
   

  	
  Tel 650-838-2168

  
	
  Telephone: 925-287-4441

  	
   

  	
  Contact:

  	
  Febi Herrera
  650-838-2212

  
	
  Facsimile: 925-935-8597

  	
   

  	
   

  
	
  E-mail: anvarik@gbasecom.com

  	
   

  	
  P.O.#,
  if required:

  	
   

  
	
  Verification Contact:
  Bob Nakata 

  	
   

  	
  E-mail:

  	
  rfoor@iwv.com 
  faquino@iwv.com

  
	
                650-838-2054

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Notices and
  communications to Preferred Beneficiary should be addressed to:

  	
   

  	
  Invoices to Preferred
  Beneficiary should be addressed to:

  
	
   

  	
   

  	
   

  
	
  Company Name:

  	
  UTStarcom, Inc. 

  	
   

  	
  Same

  
	
  Address:

  	
  1275 Harbor Bay Parkway
  

  	
   

  	
   

  
	
   

  	
  Alameda, CA  94502 
  

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Designated Contact:

  	
  Russell Boltwood 

  	
   

  	
  Contact:

  	
   

  
	
  Telephone: 

  	
  (510) 864-8800

  	
   

  	
   

  
	
  Facsimile: 

  	
  (510) 864-8802

  	
   

  	
  P.O.#,
  if required:

  	
   

  
	
  E-mail:

  	
  Russell@utstar.com

  	
   

  	
  E-mail:

  	
   

  
	
   

  	
   

  	
   

  
	
  Requests from Depositor
  or Preferred Beneficiary to change the designated contact should be given in
  writing by the designated contact or an authorized employee of Depositor or
  Preferred Beneficiary.

  
	
   

  
	
  Contracts, Deposit
  Materials and notices to

  DSI should be addressed
  to:

  	
   

  	
  Invoice inquiries and
  fee remittances to DSI should be addressed to:

  
	
   

  	
   

  	
   

  
	
  DSI Technology Escrow
  Services, Inc.

  Contract Administration

  9265 Sky Park Court,
  Suite 202

  San Diego, CA  92123

  	
   

  	
  DSI Technology Escrow
  Services, Inc.

  PO Box 45156

  San Francisco, CA  94145-0156

  
	
  Telephone: (858)
  499-1600

  Facsimile: (858)
  694-1919

  E-mail: ca@dsiescrow.com

  	
   

  	
  (858) 499-1636

  (848) 499-1637

  
	
  Date:Use these links to rapidly review the document

  TABLE OF CONTENTS

Exhibit 10.1  

[EXECUTION COPY] 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT  

dated
as of November 7, 2002, 

(amending
and restating the Amended and Restated Credit Agreement, dated as of

December 19, 2001, which amended and restated the Credit Agreement, dated as of

June 13, 2001) 

among

USP
DOMESTIC HOLDINGS, INC., as the US Borrower, 

USPE
HOLDINGS LIMITED, as the UK Borrower, 

VARIOUS
FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO,

as the Lenders, 

SUNTRUST
BANK,

as the Administrative Agent for the Lenders, 

LEHMAN
COMMERCIAL PAPER INC.,

as the Syndication Agent, 

CREDIT
SUISSE FIRST BOSTON,

as the Documentation Agent. 

SUNTRUST
CAPITAL MARKETS, INC.,

as Lead Arranger 

 

TABLE OF CONTENTS    
  

 

	Section
 
	 	 

	ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS
	

SECTION 1.1	
 	

Defined Terms
	

SECTION 1.2	
 	

Use of Defined Terms
	

SECTION 1.3	
 	

Cross References
	

SECTION 1.4	
 	

Accounting and Financial Determinations
	

SECTION 1.5	
 	

Time References
	

ARTICLE II

COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,

NOTES AND LETTERS OF CREDIT
	

SECTION 2.1	
 	

Commitments
	

SECTION 2.1.1	
 	

Revolving Loan Commitment
	

SECTION 2.1.2	
 	

Letter of Credit Commitment
	

SECTION 2.1.3	
 	

Swingline Commitment
	

SECTION 2.1.4	
 	

Assignment and Reallocation of Existing Loans and Commitments
	

SECTION 2.2	
 	

Reduction of the Commitment Amounts
	

SECTION 2.2.1	
 	

Optional
	

SECTION 2.2.2	
 	

Mandatory
	

SECTION 2.3	
 	

Borrowing Procedures; etc.
	

SECTION 2.3.1	
 	

Revolving Loans
	

SECTION 2.3.2	
 	

Swingline Loans
	

SECTION 2.4	
 	

Continuation and Conversion Elections
	

SECTION 2.5	
 	

Funding
	

SECTION 2.6	
 	

Issuance Procedures
	

SECTION 2.6.1	
 	

Other Lenders' Participation
	

SECTION 2.6.2	
 	

Disbursements
	

SECTION 2.6.3	
 	

Reimbursement
	

SECTION 2.6.4	
 	

Deemed Disbursements
	

SECTION 2.6.5	
 	

Nature of Reimbursement Obligations
	

SECTION 2.7	
 	

Revolving Notes
	
 	
 	

 

 

	

ARTICLE III

REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
	

SECTION 3.1	
 	

Repayments and Prepayments; Application
	

SECTION 3.1.1	
 	

Repayments and Prepayments
	

SECTION 3.1.2	
 	

Application
	

SECTION 3.2	
 	

Interest Provisions
	

SECTION 3.2.1	
 	

Rates
	

SECTION 3.2.2	
 	

Post-Maturity Rates
	

SECTION 3.2.3	
 	

Payment Dates
	

SECTION 3.3	
 	

Fees
	

SECTION 3.3.1	
 	

Commitment Fee
	

SECTION 3.3.2	
 	

Fee Letter Fees
	

SECTION 3.3.3	
 	

Letter of Credit Fees
	

ARTICLE IV

CERTAIN LIBOR AND OTHER PROVISIONS
	

SECTION 4.1	
 	

LIBOR Lending Unlawful
	

SECTION 4.2	
 	

Deposits Unavailable
	

SECTION 4.3	
 	

Increased LIBOR Loan Costs, etc.
	

SECTION 4.4	
 	

Funding Losses
	

SECTION 4.5	
 	

Increased Capital Costs
	

SECTION 4.6	
 	

Taxes
	

SECTION 4.7	
 	

Payments, Computations, etc.
	

SECTION 4.8	
 	

Sharing of Payments
	

SECTION 4.9	
 	

Setoff
	

ARTICLE V

COLLATERAL AND GUARANTIES
	

SECTION 5.1	
 	

Collateral
	

SECTION 5.2	
 	

Guaranties
	

SECTION 5.2.1	
 	

Guaranties of Obligations
	

SECTION 5.2.2	
 	

Guaranties of the Obligations of UK Borrower
	

SECTION 5.3	
 	

Release of Certain Collateral
	
 	
 	

 

ii

 

	

ARTICLE VI

CONDITIONS TO EFFECTIVENESS AND TO FUTURE CREDIT EXTENSIONS
	

SECTION 6.1	
 	

Effectiveness
	

SECTION 6.1.1	
 	

Resolutions, etc.
	

SECTION 6.1.2	
 	

Delivery of Notes
	

SECTION 6.1.3	
 	

Solvency, etc.
	

SECTION 6.1.4	
 	

Opinions of Counsel
	

SECTION 6.1.5	
 	

US Borrower Pledge and Security Agreement
	

SECTION 6.1.6	
 	

Affirmation and Acknowledgement
	

SECTION 6.1.7	
 	

US Subsidiary Guaranty
	

SECTION 6.1.8	
 	

US Subsidiary Pledge and Security Agreement
	

SECTION 6.1.9	
 	

UK Borrower Pledge and Security Agreement
	

SECTION 6.1.10	
 	

Parent Guaranty and Pledge Agreement
	

SECTION 6.1.11	
 	

Holdings Guaranty and Pledge Agreement
	

SECTION 6.1.12	
 	

USP International Guaranty and Pledge Agreement
	

SECTION 6.1.13	
 	

Foreign Subsidiary Guaranty
	

SECTION 6.1.14	
 	

Lien Perfection
	

SECTION 6.1.15	
 	

Assignments
	

SECTION 6.1.16	
 	

Existing Loan Letters, etc.
	

SECTION 6.1.17	
 	

Certificates of Insurance
	

SECTION 6.1.18	
 	

Evidence of Equity Injection
	

SECTION 6.1.19	
 	

Due Diligence
	

SECTION 6.1.20	
 	

Minimum Total Funded Debt to EBITDA Ratio
	

SECTION 6.1.21	
 	

Closing Fees, Expenses, etc.
	

SECTION 6.2	
 	

Credit Extensions
	

SECTION 6.2.1	
 	

Compliance with Warranties, No Default, etc.
	

SECTION 6.2.2	
 	

Credit Extension Request, etc.
	

SECTION 6.2.3	
 	

Satisfactory Legal Form
	
 	
 	

 

iii

 

	

ARTICLE VII

REPRESENTATIONS AND WARRANTIES
	

SECTION 7.1	
 	

Organization, etc.
	

SECTION 7.2	
 	

Due Authorization, Non-Contravention, etc.
	

SECTION 7.3	
 	

Government Approval, Regulation, etc.
	

SECTION 7.4	
 	

Validity, etc.
	

SECTION 7.5	
 	

Financial Information
	

SECTION 7.6	
 	

No Material Adverse Change
	

SECTION 7.7	
 	

Litigation, Labor Controversies, etc.
	

SECTION 7.8	
 	

Subsidiaries
	

SECTION 7.9	
 	

Ownership of Properties
	

SECTION 7.10	
 	

Taxes
	

SECTION 7.11	
 	

Pension and Welfare Plans
	

SECTION 7.12	
 	

Environmental Warranties
	

SECTION 7.13	
 	

Accuracy of Information
	

SECTION 7.14	
 	

Regulations T, U and X
	

SECTION 7.15	
 	

Absence of Any Undisclosed Liabilities
	

SECTION 7.16	
 	

Issuance of Subordinated Debt Status of Obligations as Senior Indebtedness, etc.
	

SECTION 7.17	
 	

Limited Entities
	

SECTION 7.18	
 	

Collateral Documentation
	

SECTION 7.19	
 	

Foreign Subsidiary Guarantor Real Property
	
 	
 	

 

iv

 

	

ARTICLE VIII

COVENANTS
	

SECTION 8.1	
 	

Affirmative Covenants
	

SECTION 8.1.1	
 	

Financial Information, Reports, Notices, etc.
	

SECTION 8.1.2	
 	

Maintenance of Existence; Compliance with Laws, etc.
	

SECTION 8.1.3	
 	

Maintenance of Properties
	

SECTION 8.1.4	
 	

Insurance
	

SECTION 8.1.5	
 	

Books and Records
	

SECTION 8.1.6	
 	

Environmental Law Covenant
	

SECTION 8.1.7	
 	

Use of Proceeds
	

SECTION 8.1.8	
 	

Future Guarantors, Security, etc.
	

SECTION 8.1.9	
 	

Rate Protection Agreements
	

SECTION 8.1.10	
 	

Provisions for Certain Subsidiaries
	

SECTION 8.1.11	
 	

Distributions
	

SECTION 8.2	
 	

Negative Covenants
	

SECTION 8.2.1	
 	

Business Activities
	

SECTION 8.2.2	
 	

Indebtedness
	

SECTION 8.2.3	
 	

Liens
	

SECTION 8.2.4	
 	

Financial Condition and Operations
	

SECTION 8.2.5	
 	

Investments
	

SECTION 8.2.6	
 	

Consolidated Acquisitions
	

SECTION 8.2.7	
 	

Restricted Payments
	

SECTION 8.2.8	
 	

Capital Expenditures
	

SECTION 8.2.9	
 	

No Prepayment of Subordinated Debt
	

SECTION 8.2.10	
 	

Issuance of Equity Interests
	

SECTION 8.2.11	
 	

Consolidation, Merger, etc.
	

SECTION 8.2.12	
 	

Permitted Dispositions
	

SECTION 8.2.13	
 	

Modification of Certain Agreements
	

SECTION 8.2.14	
 	

Transactions with Affiliates
	

SECTION 8.2.15	
 	

Restrictive Agreements, etc.
	

SECTION 8.2.16	
 	

Sale and Leaseback
	

SECTION 8.2.17	
 	

Foreign Subsidiaries
	

SECTION 8.2.18	
 	

Amendment of Organic Documents
	

SECTION 8.2.19	
 	

Fiscal Year
	
 	
 	

 

v

 

	

SECTION 8.2.20	
 	

Limitations on Intercompany Loans and Transfers
	

SECTION 8.3	
 	

Additional Covenants regarding certain Spanish Collateral
	

SECTION 8.3.1	
 	

Foreign Subsidiary Pledge and Security Agreements
	

SECTION 8.3.2	
 	

Mortgages
	

SECTION 8.3.3	
 	

Opinions of Counsel
	

ARTICLE IX

EVENTS OF DEFAULT
	

SECTION 9.1	
 	

Listing of Events of Default
	

SECTION 9.1.1	
 	

Non-Payment of Obligations
	

SECTION 9.1.2	
 	

Breach of Warranty
	

SECTION 9.1.3	
 	

Non-Performance of Certain Covenants and Obligations
	

SECTION 9.1.4	
 	

Non-Performance of Other Covenants and Obligations
	

SECTION 9.1.5	
 	

Default on Other Indebtedness
	

SECTION 9.1.6	
 	

Judgments
	

SECTION 9.1.7	
 	

Pension Plans
	

SECTION 9.1.8	
 	

Change in Control
	

SECTION 9.1.9	
 	

Bankruptcy, Insolvency, etc.
	

SECTION 9.1.10	
 	

Impairment of Security, etc.
	

SECTION 9.1.11	
 	

Failure of Subordination
	

SECTION 9.1.12	
 	

Parent Total Debt to Parent Total Capitalization Ratio
	

SECTION 9.2	
 	

Action if Bankruptcy
	

SECTION 9.3	
 	

Action if Other Event of Default
	

ARTICLE X

THE ADMINISTRATIVE AGENT
	

SECTION 10.1	
 	

Actions
	

SECTION 10.2	
 	

Funding Reliance, etc.
	

SECTION 10.3	
 	

Exculpation
	

SECTION 10.4	
 	

Successor
	

SECTION 10.5	
 	

Credit Extensions by SunTrust
	

SECTION 10.6	
 	

Credit Decisions
	

SECTION 10.7	
 	

Copies, etc.
	

SECTION 10.8	
 	

Reliance by Administrative Agent
	

SECTION 10.9	
 	

Defaults
	

SECTION 10.10	
 	

Syndication Agent and Documentation Agent
	
 	
 	

 

vi

 

	

ARTICLE XI

US BORROWER GUARANTY
	

SECTION 11.1	
 	

Guaranty
	

SECTION 11.2	
 	

Acceleration of Obligations Hereunder
	

SECTION 11.3	
 	

Obligations Hereunder Absolute, etc.
	

SECTION 11.4	
 	

Reinstatement, etc.
	

SECTION 11.5	
 	

Waiver, etc.
	

SECTION 11.6	
 	

Postponement of Subrogation
	

SECTION 11.7	
 	

Successors, Transferees and Assigns; Transfers of Notes, etc.
	

ARTICLE XII

MISCELLANEOUS PROVISIONS
	

SECTION 12.1	
 	

Waivers, Amendments, etc.
	

SECTION 12.2	
 	

Notices; Time
	

SECTION 12.3	
 	

Payment of Costs and Expenses
	

SECTION 12.4	
 	

Indemnification
	

SECTION 12.5	
 	

Survival
	

SECTION 12.6	
 	

Severability
	

SECTION 12.7	
 	

Headings
	

SECTION 12.8	
 	

Execution in Counterparts, Effectiveness, etc.
	

SECTION 12.9	
 	

Governing Law; Entire Agreement
	

SECTION 12.10	
 	

Successors and Assigns
	

SECTION 12.11	
 	

Other Transactions
	

SECTION 12.12	
 	

Forum Selection and Consent to Jurisdiction
	

SECTION 12.13	
 	

Waiver of Jury Trial
	

SECTION 12.14	
 	

Confidentiality
	

SECTION 12.15	
 	

No Novation
	
SCHEDULES AND EXHIBITS
	

SCHEDULE I	
 	

—    Disclosure Schedule
	

SCHEDULE II	
 	

—    Pricing Grid
	

SCHEDULE III	
 	

—    Notice Information; Percentages; LIBOR Offices
	

SCHEDULE IV	
 	

—    List of Additional Deeds of Mortgages
	

EXHIBIT A	
 	

—    Form of Revolving Note
	

EXHIBIT A1	
 	

—    Form of Swingline Note
	

EXHIBIT B	
 	

—    Form of Borrowing Request
	
 	
 	

 

vii

 

	

EXHIBIT B1	
 	

—    Form of Notice of Swingline Borrowing
	

EXHIBIT C	
 	

—    Form of Issuance Request
	

EXHIBIT D	
 	

—    Form of Continuation/Conversion Notice
	

EXHIBIT E	
 	

—    Form of Compliance Certificate
	

EXHIBIT F	
 	

—    Form of Lender Assignment Agreement

viii

 
 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT    
  

        THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 7, 2002, is among USP DOMESTIC HOLDINGS, INC., a Delaware corporation (the
"US Borrower"), USPE HOLDINGS LIMITED, a company incorporated in England and Wales (the "UK Borrower",
and together with the US Borrower, collectively the "Borrowers" and each individually a "Borrower"), the
various financial institutions and other Persons from time to time parties hereto (the "Lenders"), SUNTRUST BANK
("SunTrust"), as administrative agent (in such capacity, the "Administrative Agent") for the Lenders,
LEHMAN COMMERCIAL PAPER INC. ("Lehman"), as syndication agent (in such capacity, the "Syndication
Agent") for the Lenders, and CREDIT SUISSE FIRST BOSTON ("CSFB"), as documentation agent (in such capacity, the
"Documentation Agent") for the Lenders. 

 
 

W I T N E S S E T H:    
  

        WHEREAS, the US Borrower is a direct wholly-owned Subsidiary of United Surgical Partners Holdings, Inc., a Delaware corporation
("Holdings"), the UK Borrower is a direct wholly-owned Subsidiary of USP International Holdings, Inc., a Delaware corporation
("USP International"), USP International is a direct wholly-owned Subsidiary of Holdings and Holdings is a direct wholly-owned Subsidiary of United
Surgical Partners International, Inc., a Delaware corporation ("Parent"); 

        WHEREAS,
pursuant to the Credit Agreement, dated as of June 13, 2001 (as amended, supplemented, amended and restated or otherwise modified prior to the date hereof, the
"Original Credit Agreement"), among the US Borrower, the various financial institutions and other Persons parties thereto (the
"Original Lenders"), CSFB, as administrative agent thereunder, Lehman, as syndication agent thereunder, and, Societe Generale, as documentation agent
thereunder, the Original Lenders were committed to make extensions of credit to the US Borrower on the terms and conditions set forth therein and made loans (the "Original
Loans") to the US Borrower; 

        WHEREAS,
the Original Credit Agreement was amended and restated pursuant to that certain Amended and Restated Credit Agreement, dated as of December 19, 2001, as amended by that
certain First Amendment to Credit Agreement dated May 8, 2002 (the Original Credit Agreement, as so amended, supplemented, amended and restated or otherwise modified prior to the date hereof,
collectively the "Existing Credit Agreement"), among the Borrowers, the various financial institutions and other Persons parties thereto (the
"Existing Lenders"), CSFB, as administrative agent thereunder, Lehman, as syndication agent thereunder, and Societe Generale, as documentation agent
thereunder, the Existing Lenders were committed to make extensions of credit to the Borrowers on the terms and conditions set forth therein and made loans (the "Existing
Loans") to the Borrowers; 

        WHEREAS,
Parent has recently issued shares of its common stock in a public offering (the "2002 Follow-On Offering") for gross
cash proceeds of $53,130,000 (the "Gross Equity Proceeds") the proceeds of which has been or will be applied to (a) payment of the outstanding
Existing Loans, (b) general corporate purposes of Parent and (c) Permitted Acquisitions and Investments (as such terms are defined in this Agreement) permitted under the terms of this
Agreement; 

        WHEREAS,
in connection with the ongoing working capital and general corporate needs of the Borrowers and their Consolidated Entities, the Borrowers desire, among other things, to
continue to obtain Loans under this Agreement and to obtain Commitments to make Credit Extensions set forth herein (to include availability for revolving loans and letters of credit); 

        WHEREAS,
the Borrowers have requested that the Existing Credit Agreement be amended and restated in its entirety to become effective and binding on the Borrowers pursuant to the terms of
this Agreement, and the Lenders (including both a portion of the Existing Lenders and certain new Lenders) have agreed (subject to the terms of this Agreement) to amend and restate the Existing Credit
Agreement in its entirety to read as set forth in this Agreement, and it has been agreed by the parties to the Existing Credit Agreement and by the parties to this Agreement that (a) SunTrust
shall be substituted as Administrative Agent, (b) the commitments which the Existing Lenders have agreed 

 

to extend to the Borrowers under the Existing Credit Agreement shall be extended or advanced to the Borrowers by certain of the Existing Lenders and certain new Lenders upon the amended and restated
terms and conditions contained in this Agreement and (c) the Obligations outstanding under the Existing Credit Agreement shall be governed by and deemed to be outstanding under the amended and
restated terms and conditions contained in this Agreement, with the intent that the terms of this Agreement shall supersede the terms of the Existing Credit Agreement (each of which shall hereafter
have no further effect upon the parties thereto, other than for accrued fees and expenses, and indemnification provisions, accrued and owing under the terms of the Existing Credit Agreement on or
prior to the date hereof or arising (in the case of an indemnification) under the terms of the Existing Credit Agreement); provided, that any Rate
Protection Agreements with any one or more Existing Lenders (or their respective Affiliates) which are parties to this Agreement shall continue unamended and in full force and effect; and 

        WHEREAS,
all Obligations are and shall continue to be secured by, among other things, the Pledge Agreements and other Loan Documents and shall be guaranteed pursuant to the Subsidiary
Guaranty. 

        NOW,
THEREFORE, the parties hereto hereby agree to amend and restate the Existing Credit Agreement, and the Existing Credit Agreement is hereby amended and restated in its entirety 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): 

        "2002 Follow-On Offering" is defined in the fourth recital. 

        "Acquired Person EBITDAM" means, with respect to any Person acquired in connection with a Permitted Acquisition, for the twelve month
period prior to the date of the consummation of such Permitted Acquisition, the sum of (a) the net income of such Person, plus (b) to the
extent deducted in determining such net income, the sum of amounts attributable to (i) amortization, (ii) income tax expense, (iii) interest expense, (iv) depreciation of
assets and (v) management fees, in each case determined in a manner substantially similar to the determination of similar items in the definition of EBITDA herein. 

        "Adjusted LIBO Rate" means, with respect to each Interest Period for a LIBOR Borrowing, the rate per annum obtained by dividing
(i) LIBOR for such Interest Period by (ii) a percentage equal to 1.00 minus the LIBOR Reserve Percentage. The Adjusted LIBO Rate for any
Interest Period for LIBOR Loans will be determined by the Administrative Agent on the basis of the LIBOR Reserve Percentage in effect two Business Days before the first day of such Interest Period. 

        "Administrative Agent" is defined in the preamble and includes each other Person appointed
as the successor Administrative Agent pursuant to Section 10.4. 

        "Affiliate" of any Person means any other Person which, directly or indirectly, controls, is controlled by or is under common control with
such Person. "Control" of a Person means the power, directly or indirectly, (a) to vote 10% or more of the Equity Interests (on a fully diluted
basis) of such Person having ordinary voting power for the election of directors, managing members or general partners (as applicable); or (b) to direct or cause the direction of the management
and policies of such Person (whether by contract or otherwise). 

2

 

        "Affirmation and Acknowledgment" means the Affirmation and Acknowledgment executed and delivered by an Authorized Officer of each Obligor
pursuant to the terms of this Agreement, in form and substance satisfactory to the Administrative Agent. 

        "Agents" means, collectively, the Administrative Agent, the Syndication Agent and the Documentation Agent. 

        "Agreement" means this Second Amended and Restated Credit Agreement, which amends and restates the Existing Credit Agreement, which
amended and restated the Original Credit Agreement, as such may be further amended and/or restated from time to time. 

        "Applicable Margin" means the percentage designated in the "Pricing Grid" attached hereto
as Schedule II, such percentages being determined by reference to Levels I-V based on the Borrowers' Total Funded Debt to EBITDA Ratio as of the
applicable determination date. The Applicable Margin shall initially be set at Level V of the "Pricing Grid";  provided that upon delivery to the
Administrative Agent of Borrowers' financial statements for the Fiscal Quarter ending December 31, 2002, the
Applicable Margin shall be reset at the appropriate Level based on the Borrowers' Total Funded Debt to EBITDA Ratio. Thereafter, the Total Funded Debt to EBITDA Ratio used to compute the Applicable
Margin shall be the Total Funded Debt to EBITDA Ratio set forth in the Compliance Certificate most recently delivered by the Borrowers to the Administrative Agent pursuant to  Section 8.1.1(d).
Changes in the Applicable Margin resulting from a change in the Total Funded Debt to EBITDA Ratio shall become effective as of
the second Business Day following the date that the Administrative Agent receives a Compliance Certificate in accordance with Section 8.1.1(d)
hereof; provided that if the Borrowers shall fail to deliver a Compliance Certificate within 45 days after the end of any Fiscal Quarter (or
within 90 days, in the case of the last Fiscal Quarter of the Fiscal Year), the Applicable Margin from and including the 46th (or 91st, as the case may be) day after the end of such Fiscal
Quarter to but not including the date the Borrowers deliver to the Administrative Agent a Compliance Certificate shall be set at Level V of the "Pricing
Grid". 

        "Approved Fund" means any Person (other than a natural Person) that (a) is or will be engaged in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business and (b) is administered or managed by a Lender, an Affiliate of a Lender or an
entity or an Affiliate of an entity that administers or manages a Lender. 

        "Authorized Officer" means, relative to any Obligor, those of its officers, general partners or managing members (as applicable) whose
signatures and incumbency shall have been certified to the Administrative Agent, the Lenders and the Issuer pursuant to Section 6.1.1. 

        "Base Rate" means, at any time, the higher of (i) the rate which Administrative Agent announces from time to time as its prime
lending rate, as in effect from time to time, or (ii) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (1/2%) per annum (any
changes in such rates to be effective as of the date of any change in such rate). The Administrative Agent's prime lending rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. Administrative Agent may make commercial loans or other loans at rates of interest at, above, or below the Administrative Agent's prime lending rate. 

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

        "Borrower" and "Borrowers" are defined in the preamble. 

        "Borrowing" means the Loans of the same type and, in the case of LIBOR Loans, having the same Interest Period, made by all Lenders
required to make such Loans on the same Business Day and pursuant to the same Borrowing Request (or Notice of Swingline Borrowing, as applicable). 

3

 

        "Borrowing Request" means a Base Rate or LIBOR Loan request and certificate duly executed by an Authorized Officer of the applicable
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 Nashville, Tennessee or New York, New York, and (b) relative to the making, continuing, prepaying or repaying of any LIBOR Loans, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings in Dollars are carried on in the London interbank eurodollar market. 

        "Capital Expenditures" means, for any period, the aggregate amount of (a) all expenditures of the Borrowers and their Consolidated
Entities for fixed or capital assets made during such period which, in accordance with GAAP, would be classified as capital expenditures and (b) Capitalized Lease Liabilities incurred by the
Borrowers and their Consolidated Entities during such period. 

        "Capitalized Lease Liabilities" means, with respect to any Person, all monetary obligations of such Person under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified as capitalized leases, and for purposes of each 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 premium or a penalty. 

        "Cash Collateralize" means, with respect to a Letter of Credit, the deposit of immediately available funds into a cash collateral account
maintained with (or on behalf of) the Administrative Agent on terms satisfactory to the Administrative Agent in an amount equal to the Stated Amount of such Letter of Credit. 

        "Cash Equivalent Investment" means, at any time: 

	(a)
	any
direct obligation of (or unconditionally guaranteed by) the United States or a State thereof (or any agency or political subdivision thereof, to the extent such obligations are
supported by the full faith and credit of the United States or a State thereof) maturing not more than one year after such time;

	(b)
	commercial
paper maturing not more than 270 days from the date of issue, which is issued by

	(i)
	a
corporation (other than an Affiliate of any Obligor) organized under the laws of any State of the United States or of the District of Columbia and
rated A-1 or higher by S&P or P-1 or higher by Moody's, or

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

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

	(i)
	any
bank organized under the laws of the United States (or any State thereof) and which has (x) a credit rating of A2 or higher from Moody's or A
or higher from S&P and (y) a combined capital and surplus greater than $500,000,000, or

	(ii)
	any
Lender; or 

	(d)
	any
repurchase agreement having a term of 30 days or less entered into with any Lender or any commercial banking institution satisfying the criteria set forth in  clause (c)(i) which

	(i)
	is
secured by a fully perfected security interest in any obligation of the type described in  clause (a), and 

4

 

	(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 commercial banking
institution thereunder. 

        "Casualty Event" means the damage, destruction or condemnation, as the case may be, of property of any Person or any of its Subsidiaries. 

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

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

        "Change in Control" means (a) the failure of Parent at any time to directly own beneficially and of record on a fully diluted basis
100% of the outstanding Equity Interests of Holdings, such Equity Interests to be held free and clear of all Liens (other than Liens granted under a Loan Document); or (b) the failure of
Holdings at any time to directly or indirectly own beneficially and of record on a fully diluted basis 100% of the outstanding Equity Interests of the US Borrower and the UK Borrower, such Equity
Interests to be held free and clear of all Liens (other than Liens granted under a Loan Document); or (c) any person or group (within the meaning of Sections 13(d) and
14(d) under the Exchange Act), shall become the ultimate "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act), directly or indirectly, of Equity Interests representing more than 35% of the Equity Interests of Parent on a fully diluted basis; or (d) during any
period of 24 consecutive months, individuals who at the beginning of such period constituted the Board of Directors of Parent (together with any new directors whose election to such Board or whose
nomination for election by the stockholders of Parent was approved by a vote of a majority of the directors then still in office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any reason to constitute a majority of the Board of Directors of Parent then in office; or (e) the occurrence of any
"Change of Control" (or similar term) under (and as defined in) any Sub Debt Document. 

        "Closing Date" means November 7, 2002. 

        "Code" means the Internal Revenue Code of 1986, and the regulations thereunder, in each case as amended, reformed or otherwise modified
from time to time. 

        "Collateral" is defined in Section 5.1. 

        "Commitment" means, as the context may require, the Revolving Loan Commitment, the Swingline Commitment, or the Letter of Credit
Commitment. 

        "Commitment Amount" means, as the context may require, the Aggregate Revolving Loan Commitment, the Swingline Commitment or the Letter of
Credit Commitment Amount. 

        "Commitment Termination Date" means the earliest of 

	(a)
	November 7,
2005;

	(b)
	the
date on which the Revolving Loan Commitment Amount is terminated in full or reduced to zero pursuant to the terms of this Agreement; and

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

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

        "Commitment Termination Event" means 

	(a)
	the
occurrence of any Event of Default with respect to the Borrowers described in clauses (a) through  (d) of Section 9.1.9; or 

5

 

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

	(i)
	the
declaration of all or any portion of the Loans to be due and payable pursuant to Section 9.3,
or

	(ii)
	the
giving of notice by the Administrative Agent, acting at the direction, or with the consent, of the Required Lenders, to the Borrowers that the
Commitments have been terminated. 

        "Compliance Certificate" means a certificate duly completed and executed by an Authorized Officer of the applicable Borrower,
substantially in the form of Exhibit E hereto, together with such changes thereto as the Administrative Agent may from time to time request for
the purpose of monitoring the Borrowers' compliance with the financial covenants contained herein. 

        "Confidential Information" means information relating to the Borrowers, any of their Subsidiaries or any other Obligor obtained by any
Secured Party pursuant to or in connection with this Agreement, or otherwise from or on behalf of the Borrowers or any of their Subsidiaries or Affiliates (to the extent identified as Affiliates to
the Administrative Agent and the Lenders) (including any such information obtained by either the Administrative Agent or any Lender in the course of any review of the books or records of the Borrowers
or any Subsidiary thereof as contemplated herein), but excluding information (a) that was previously known to any Secured Party (other than through a previous lending or other business
relationship with the Borrowers or any of their Subsidiaries), (b) that is or subsequently becomes generally publicly known through no violation of this Agreement by any Secured Party or any
Person acting therefor or (c) that has been disclosed to any Secured Party from a third party not known by such Secured Party to be under a duty of confidentiality with respect to such
Confidential Information. 

        "Consolidated Entities" means each of the Borrowers' Subsidiaries (other than Global Healthcare and its Subsidiaries) and each of the
operating partnerships, limited liability companies, joint ventures or similar entities in which either of the Borrowers have, directly or indirectly (other than through Global Healthcare and its
Subsidiaries), invested, in each case which are consolidated in the Borrowers' financial statements delivered pursuant to Section 8.1.1 hereof. 

        "Contingent Liability" means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor in connection with such
debtor's Indebtedness, or otherwise to assure a creditor against loss) the Indebtedness of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon the Equity Interests of any other Person. The amount of any Person's obligation under any Contingent Liability
shall (subject to any limitations set forth therein) be deemed to be the outstanding principal amount of the debt, obligation or other liability guaranteed thereby. 

        "Continuation/Conversion Notice" means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of
the applicable Borrower, substantially in the form of Exhibit D 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 Borrowers, are treated as a single employer under Section 414(b) or 414(c) of the Code or Section 4001 of
ERISA. 

        "Copyright Security Agreement" means any copyright security agreement executed and delivered by any Obligor, substantially in the form of
Exhibit D to any Pledge Agreement, as such may be amended and/or restated from time to time. 

6

 

        "Credit Extension" means, as the context may require, (a) the making of a Loan by a Lender or (b) the issuance of any Letter
of Credit, or the extension of any Stated Expiry Date of any existing Letter of Credit, by the Issuer. 

        "Debt Issuance" means unsecured Indebtedness of a Borrower or any Consolidated Entity in the form of senior notes or other publicly or
privately placed Indebtedness but specifically excluding Subordinated Debt. 

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

        "Designated Senior Indebtedness" is defined in Section 7.16. 

        "Disbursement" is defined in Section 2.6.2. 

        "Disbursement Date" is defined in Section 2.6.2. 

        "Disclosure Schedule" means the Disclosure Schedule attached hereto as Schedule I,
as it may be amended and/or restated from time to time by the Borrowers with the written consent of the Required Lenders. 

        "Disposition" (or similar words such as "Dispose") means any sale, transfer, lease,
contribution or other conveyance (including by way of merger) of, or the granting of options, warrants or other rights to, any of the Borrowers' or their Consolidated Entities' assets (including
accounts receivable and Equity Interests of Subsidiaries, but excluding cash) to any other Person (other than to another Obligor) in a single transaction or series of transactions. 

        "Documentation Agent" is defined in the preamble. 

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

        "EBIT" means for any applicable period, the sum of (a) Net Income, plus
(b) to the extent deducted in determining Net Income, the sum of amounts attributable to (i) income tax expense and (ii) Interest Expense,  plus (c) Minority Interests; provided that EBIT shall be adjusted to give pro forma effect to
(x) Permitted Acquisitions made during such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Acquisitions had been made at the beginning
of such period, and (y) Permitted Dispositions during such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Dispositions had been made at
the beginning of such period. 

        "EBITDA" means for any applicable period, the sum of (a) Net Income, plus
(b) to the extent deducted in determining Net Income, the sum of amounts attributable to (i) amortization, (ii) income tax expense, (iii) Interest Expense and
(iv) depreciation of assets; provided that EBITDA shall be adjusted to give pro forma effect to (x) Permitted Acquisitions made during
such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Acquisitions had been made at the beginning of such period, and (y) Permitted
Dispositions during such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Dispositions had been made at the beginning of such period. 

        "Effective Date" means June 13, 2001, the date the Original Credit Agreement originally became effective. 

        "Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund or (d) any other
Person (other than a natural Person) approved (in the case of this clause (d)) by the
Administrative Agent, the Issuer (but then only in the case of any assignment of the Revolving Loan Commitment) and, unless (x) such Person is taking delivery of an assignment in connection
with 

7

 

physical settlement of a credit derivatives transaction or (y) an Event of Default has occurred and is continuing, the Borrowers (each such approval not to be unreasonably withheld or
delayed). 

        "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. 

        "Equity Interests" means, with respect to any Person, any and all shares, partnership, joint venture or other interests, participations or
other equivalents (however designated, whether voting or non-voting) of such Person's capital, whether now outstanding or issued after the Effective Date. 

        "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto 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 thereto. 

        "Escrow Agreement" means any Escrow Agreement executed and delivered by a Lender, substantially in the form of  Exhibit B to any Lender Assignment Agreement, as such
may be amended and/or restated from time to time. 

        "Escrow Funds" is defined in the Escrow Agreement. 

        "Event of Default" is defined in Section 9.1. 

        "Excess Cash Flow" means for any Fiscal Year, (a) EBITDA for such Fiscal Year less
(b) the sum (for such Fiscal Year) of (i) Interest Expense actually paid in cash by the Borrowers and their Consolidated Entities, (ii) principal repayments, to the extent
actually made, of Indebtedness by the Borrowers and their Consolidated Entities (including voluntary and mandatory prepayments), (iii) all income Taxes actually paid in cash by the Borrowers
and their Consolidated Entities, (iv) Capital Expenditures actually made by the Borrowers and their Consolidated Entities in such Fiscal Year and (v) the increase, if any, in current
assets over current liabilities of the Borrowers and their Consolidated Entities during such Fiscal Year, plus (c) the decrease, if any, of
current assets over current liabilities of the Borrowers and their Consolidated Entities during such Fiscal Year,  plus (d) extraordinary non-recurring,
 non-cash charges acceptable to the Administrative Agent. 

        "Excess Equity Proceeds" means the amount equal to Gross Equity Proceeds less the sum of (i) the fees, commissions and other
closing costs incurred in connection with the 2002 Follow-On Offering plus (ii) the sums paid to reduce the outstanding Existing
Loans as required pursuant to Section 6.1.20 plus (iii) the sums paid for any Permitted Acquisition completed between October 4,
2002 and the Closing Date plus (iv) the sums paid or otherwise pledged or deposited for the extended reporting endorsement to be issued by
American Continental Insurance Company. 

        "Exemption Certificate" is defined in clause (e) of  Section 4.6. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Existing Credit Agreement" is defined in the third recital. 

        "Existing Lenders" is defined in the third recital. 

        "Existing Letters of Credit" means the following: (a) that certain Standby Letter of Credit bearing letter of credit number
TS-07001832 issued by CSFB on December 17, 2001 in the face amount of $517,140 for the benefit of Gaco Sarasota, LLC and on the account of US Borrower; and (b) that certain
Standby Letter of Credit bearing letter of credit number TS-07001842 issued by CSFB on December 28, 2001 in the face amount of $225,000 for the benefit of Arden Westwood, LLC and on
the account of US Borrower. 

        "Existing Loans" is defined in the third recital. 

8

 

        "Federal Funds Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the next 1/100th of 1%) equal
to the weighted average of the rates on overnight Federal funds transactions with member banks of the Federal Reserve System arranged by Federal funds brokers, as published by the Federal Reserve Bank
of New York on the next succeeding Business Day, or if such rate is not so published for any Business Day, the Federal Funds Rate for such day shall be the average rounded upwards, if necessary, to
the next 1/100th of 1% of the quotations for such day on such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by the Administrative
Agent. 

        "Fee Letter" means the confidential letter, dated August 14, 2002, from the Administrative Agent to the Parent, as accepted by
Parent on August 16, 2002. 

        "Filing Statements" means all UCC financing statements (Form UCC-1) or other similar financing statements and UCC termination
statements (Form UCC-3) required pursuant to the Loan Documents. 

        "Fiscal Quarter" means a quarter ending on the last day of March, June, September or December. 

        "Fiscal Year" means any period of twelve consecutive calendar months ending on December 31. 

        "Fixed Charge Coverage Ratio" means as of the close of any Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters of (a) EBITDA (for all such Fiscal Quarters) plus Minority Interests  less Maintenance Capital Expenditures made during such Fiscal Quarters to (b) the sum (for all
such Fiscal Quarters) of (i) Interest Expense, (ii) scheduled principal repayments of Indebtedness made during such period, and (iii) all income Taxes actually paid in cash by the
Borrowers and their Consolidated Entities; provided that for purposes of this calculation only, EBITDA will not be adjusted to give proforma effect to
Permitted Acquisitions made during such applicable Fiscal Quarters. 

        "Foreign Subsidiary" means a Subsidiary that is not incorporated or organized under the laws of the United States or a state thereof. 

9

   
        "Foreign Subsidiary Guarantor" means a wholly owned Foreign Subsidiary. 

        "Foreign Subsidiary Guaranty" means the Foreign Subsidiary Guaranties, each dated as of May 28, 2002, executed and delivered by an
Authorized Officer of each Foreign Subsidiary Guarantor pursuant to the terms of the Existing Credit Agreement, as amended in accordance with the terms hereof, and such may be further supplemented,
amended and/or restated from time to time and all other Foreign Subsidiary Guaranties delivered pursuant to the requirements of this Agreement from time to time, as may be supplemented, amended and/or
restated from time to time. 

        "Foreign Subsidiary Mortgages" means (i) that certain deed of mortgage over industrial machinery granted by Clinica Sagrado
Corazon, S.L. (Sociedad Unipersonal), as mortgagor, and CSFB, Societe General Financial Corporation and Lehman, as beneficiaries, on May 28, 2002, before the Spanish public notary
Mr. Andres de la Fuente O'Conner under number 612 of his official records, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or
otherwise; (ii) that certain deed of mortgage over industrial machinery granted by United Surgical Partners Instituto Dexeus, S.A., as mortgagor, and CSFB, Societe General Financial Corporation
and Lehman, as beneficiaries, on May 28, 2002, before the Spanish public notary Mr. Andres de la Fuente O'Conner under number 613 of his official records, as such may be amended and/or
restated from time to time in connection with the execution of this Credit Agreement or otherwise; (iii) that certain deed of mortgage over real estate assets granted by United Surgical
Partners Madrid, S.L., as mortgagor, and CSFB, Societe General Financial Corporation and Lehman, as beneficiaries, on May 28, 2002, before the Spanish public notary Mr. Andres de la
Fuente O'Conner under number 614 of his official records, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise;
(iv) that certain deed of mortgage over real estate assets granted by Clinica Maternal Nuestra Senora de la Esperanza, S.A. (Sociedad Unipersonal), as mortgagor, and CSFB, Societe General
Financial Corporation and Lehman, as beneficiaries, on May 28, 2002, before the Spanish public notary Mr. Andres de la Fuente O'Conner under number 615 of his official records, as such
may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (v) the deeds of mortgages over industrial machinery and over real
estate assets for the property described on, and to be granted by the Obligors listed on, Schedule IV; and (vi) such other deeds of
mortgage as may be executed in the future in connection with the terms of this Agreement. 

        "Foreign Subsidiary Pledge and Security Agreements" means (i) pledge agreement executed by USP Europe, as pledgor, and CSFB,
Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby USP Europe pledged its interest
in the Spanish company Instituto Policlinico Santa Teresa, S.A. (representing as of that date, 95.90% of its share capital) pursuant to the terms of the Existing Credit Agreement, as such
may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (ii) pledge agreement executed by Clinica Sagrado Corazon, S.L., as
pledgor, and CSFB, Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby Clinica
Sagrado Corazon, S.L. pledged its interest in the Spanish company Hospitalizacion y Servicios, S.A. (representing as of that date, 87.37% of its share capital) pursuant to the terms of the Existing
Credit Agreement, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (iii) pledge agreement executed by United
Surgical Partners Barcelona, S.L., as pledgor, and CSFB, Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la
Fuente O'Conner whereby United Surgical Partners Barcelona, S.L. pledged its interest in the Spanish company Instituto Dexeus, S.A. (representing as of that date, 79.07% of its share capital) pursuant
to the terms of the Existing Credit Agreement, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (iv) pledge
agreement executed by USP 

10

 

Europe, as pledgor, and CSFB, Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby
USP Europe pledged its interest in the Spanish company United Surgical Partners Madrid, S.L. (representing as of that date, 93.25% of its share capital) pursuant to the terms of the Existing Credit
Agreement, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (v) pledge agreement executed by USP Europe, as
pledgor, and CSFB, Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby USP Europe
pledged its interest in the Spanish company United Surgical Partners Dermoestetica, S.L. (representing as of that date, 70.00% of its share capital) pursuant to the terms of the Existing Credit
Agreement, as such may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (vi) pledge agreement executed by the UK Borrower, as
pledgor, and CSFB, Societe General Financial Corporation and Lehman, as pledgees, on June 6, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby the UK
Borrower pledged its interest in USP Europe (representing as of that date, 100% of its share capital) pursuant to the terms of the Existing Credit Agreement, as such may be amended and/or restated
from time to time in connection with the execution of this Credit Agreement or otherwise; (vii) pledge agreement executed by USP Europe, as pledgor, and CSFB, Societe General Financial
Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby USP Europe pledged its interest in the Spanish company
Clinica Maternal Nuestra Senora de la Esperanza, S.A. (Sociedad Unipersonal) (representing as of that date, 100% of its share capital) pursuant to the terms of the Existing Credit Agreement, as such
may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; (viii) pledge agreement executed by USP Europe, as pledgor, and CSFB,
Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby USP Europe pledged its interest
in the Spanish company Clinica Sagrado Corazon, S.L. (Sociedad Unipersonal) (representing as of that date, 100% of its share capital) pursuant to the terms of the Existing Credit Agreement, as such
may be amended and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; and (ix) pledge agreement executed by USP Europe, as pledgor, and CSFB,
Societe General Financial Corporation and Lehman, as pledgees, on May 28, 2002 before the Spanish public notary Mr. Andres de la Fuente O'Conner whereby USP Europe pledged its interest
in the Spanish company United Surgical Partners Barcelona, S.L. (representing as of that date, 100% of its share capital) pursuant to the terms of the Existing Credit Agreement, as such may be amended
and/or restated from time to time in connection with the execution of this Credit Agreement or otherwise; along with (x) such additional pledge agreements in connection with the Foreign
Subsidiaries which may be executed in the future in accordance with the terms of this Agreement. 

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

        "GAAP" is defined in Section 1.4. 

        "Global Healthcare" means Global Healthcare Partners Ltd. (UK), a company incorporated in England and Wales. 

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

        "Gross Equity Proceeds" is defined in the fourth recital. 

11

 

        "Hazardous Material" means (a) any "hazardous substance", as defined by CERCLA,
(b) any "hazardous waste", as defined by the Resource Conservation and Recovery Act, as amended, or (c) any pollutant or contaminant or
hazardous, dangerous or toxic chemical, material or substance (including any petroleum product) 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 hazardous, toxic or dangerous waste, substance or material,
all as amended. 

        "Hedging Obligations" means, with respect to any Person, all liabilities of such Person under currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or
currency exchange rates. 

        "herein", "hereof", "hereto",
"hereunder" and similar terms contained in any Loan Document refer to such Loan Document as a whole and not to any particular Section, paragraph or
provision of such Loan Document. 

        "Holdings" is defined in the first recital. 

        "Holdings Notes" means the 10% Senior Subordinated Notes due 2011 in the aggregate principal amount of $150,000,000 issued by Holdings and
governed by the terms of the Holdings Notes Indenture. 

        "Holdings Guaranty and Pledge Agreement" means the Holdings Guaranty and Pledge Agreement, dated as of June 13, 2001, executed and
delivered by an Authorized Officer of Holdings pursuant to the terms of the Original Credit Agreement, as amended in accordance with the terms hereof, and as such may be further supplemented, amended
and/or restated from time to time. 

        "Holdings Notes Guaranties" means the subordinated guaranties made by the Borrowers and their Subsidiaries with respect to the Holdings
Notes pursuant to the Holdings Notes Indenture. 

        "Holdings Notes Indenture" means the Indenture, dated as of December 19, 2001, entered into among Holdings, the guarantors from
time to time parties thereto and U.S. Trust Company of Texas, N.A., as trustee, as amended, supplemented, amended and restated or otherwise modified from time to time. 

        "Hospital Joint Venture Entity" is defined in Section 8.1.10. 

        "Impermissible Qualification" means any qualification or exception to the opinion or certification of any independent public accountant as
to any financial statement of either Borrower (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 Borrower to be in Default. 

        "including" and "include" means including without limiting the generality of any
description preceding such term, and, for purposes of each 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. 

        "Indebtedness" of any Person means: 

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

12

 

	(b)
	all
obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, bank guarantees, banker's acceptances and similar instruments
issued for the account of such Person;

	(c)
	all
obligations of such Person under any conditional sale or other title retention agreement(s) relating to property acquired by such Person;

	(d)
	all
Capitalized Lease Liabilities of such Person;

	(e)
	all
other items which, in accordance with GAAP, would be included as liabilities on the balance sheet of such Person as of the date at which Indebtedness is to be determined;

	(f)
	net
Hedging Obligations of such Person;

	(g)
	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 after receipt or
performance thereof (excluding trade accounts payable in the ordinary course of business which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as
to which a good faith dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Person), and indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be secured by) a Lien on property owned or being acquired by such Person (including indebtedness arising under conditional sales or
other title retention agreements, but excluding earn-outs or other contingent purchase price adjustments in connection with acquisitions to the extent not yet determined), whether or not
such indebtedness shall have been assumed by such Person or is limited in recourse;

	(h)
	off-balance
sheet liabilities retained in connection with asset securitization programs, Synthetic Leases, sale and leaseback transactions or other similar obligations
arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet of such
Person and its Subsidiaries;

	(i)
	all
obligations of such Person, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity Interest of such Person;  provided that if such obligation to purchase,
redeem or otherwise acquire an Equity Interest is contingent upon the occurrence of an event (such as a change in law, or death or divorce of another Person, etc.) other than the passage of time or
any event within the control of such Person, such obligation will not be deemed "Indebtedness" for purposes of this definition until such event occurs; and

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

        The
Indebtedness of any Person shall include the Indebtedness of any other Person (including any partnership in which such Person is a general partner) to the extent such Person is
liable therefor as a result of such Person's ownership interest in or other relationship with such Person, except to the extent the terms of such Indebtedness provide that such Person is not liable
therefor. 

        "Indemnified Liabilities" is defined in Section 12.4. 

        "Indemnified Parties" is defined in Section 12.4. 

        "Interest Coverage Ratio" means, as of the last day of any Fiscal Quarter, the ratio computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters of (a) EBIT (for all such Fiscal Quarters) to (b) the sum (for all
such Fiscal Quarters) of Interest Expense; provided that for purposes of this calculation only, EBIT will not be adjusted to give proforma effect to
Permitted Acquisitions made during such applicable Fiscal Quarters. 

13

 

        "Interest Expense" means, for the Borrowers and their Consolidated Entities for any period, the sum of (a) total interest expense
(both accrued and paid), including without limitation the interest component of any payments in respect of Capitalized Lease Liabilities or expensed during such period (whether or not actually paid
during such period) plus (b) the net amount payable (or minus the net amount receivable) under
Hedging Obligations during such period (whether or not actually paid or received during such period). 

        "Interest Period" means 

	(a)
	with
respect to LIBOR Loans, the period of 1, 2, 3 or 6 months selected by the applicable Borrower pursuant to the terms of the Revolving Notes, if any, and this Agreement and
subject to customary adjustments in duration; provided that

	(i)
	such
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 six
different dates;

	(ii)
	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 a calendar month, in which case such Interest Period shall end on the Business Day next preceding such numerically corresponding
day);

	(iii)
	Borrowers
may not select a six (6) month Interest Period without the consent of Administrative Agent, such consent being provided at
Administrative Agent's sole and absolute discretion; and

	(iv)
	no
Interest Period for any Loan may end later than the Stated Maturity Date for such Loan. 

	(b)
	with
respect to a Swingline Loan, a period of such duration not to exceed ten (10) days, as the applicable Borrower may request and the Swingline Lender may agree in accordance
with the terms hereof. 

        "Investment" means, relative to any Person, (a) any loan, advance or extension of credit made by such Person to any other Person,
including the purchase by such Person of any bonds, notes, debentures or other debt securities of any other Person, (b) Contingent Liabilities in favor of any other Person, and (c) any
Equity Interests held by such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon 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 at the
time of such Investment. 

        "ISP Rules" is defined in Section 12.9. 

        "Issuance Request" means a Letter of Credit request and certificate duly executed by an Authorized Officer of the applicable Borrower,
substantially in the form of Exhibit C hereto. 

        "Issuer" means SunTrust in its capacity as Issuer of the Letters of Credit. 

        "Lender Assignment Agreement" means an assignment agreement, substantially in the form of  Exhibit F attached hereto. 

        "Lenders" is defined in the preamble. 

        "Lender's Environmental Liability" means any and all losses, liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages), disbursements or expenses of any kind or nature whatsoever (including reasonable attorneys' fees at trial and appellate
levels and experts' fees and disbursements and expenses incurred in 

14

 

investigating, defending against or prosecuting any litigation, claim or proceeding) which may at any time be imposed upon, incurred by or asserted or awarded against the Administrative Agent, any
Lender or the Issuer, or any of such Person's Affiliates, shareholders, directors, officers, employees, and agents in connection with or arising from: 

	(a)
	any
Hazardous Material on, in, under or affecting all or any portion of any property of the Borrowers or any of their Consolidated Entities, the groundwater thereunder, or any
surrounding areas thereof to the extent caused by Releases from the Borrowers' or any of their Consolidated Entities' or any of their respective predecessors' properties;

	(b)
	any
misrepresentation, inaccuracy or breach of any warranty, contained or referred to in Section 7.12;

	(c)
	any
violation or claim of violation by the Borrowers or any of their Consolidated Entities of any Environmental Laws; or

	(d)
	the
imposition of any lien for damages caused by or the recovery of any costs for the cleanup, release or threatened release of Hazardous Material by the Borrowers or any of their
Consolidated Entities, or in connection with any property owned or formerly owned by the Borrowers or any of their Consolidated Entities. 

        "Letter of Credit" is defined in Section 2.1.2. 

        "Letter of Credit Commitment" means the Issuer's obligation to issue Letters of Credit pursuant to  Section 2.1.2. 

        "Letter of Credit Commitment Amount" means, on any date, a maximum amount of $25,000,000, as such amount may be permanently reduced from
time to time pursuant to Section 2.2. 

        "Letter of Credit Outstandings" means, on any date, and with respect to each Borrower, an amount equal to the sum of (a) the then
aggregate amount which is undrawn and available under all issued and outstanding Letters of Credit, and (b) the then aggregate amount of all unpaid and outstanding Reimbursement Obligations. 

        "LIBOR" means, relative to any Interest Period, the rate of interest equal to the average of the rates per annum at which Dollar deposits
in immediately available funds are offered to the Administrative Agent's LIBOR Office in the London interbank market as at or about 11:00 a.m. London, England 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 the Administrative Agent's LIBOR Loan and for a
period approximately equal to such Interest Period. 

        "LIBOR Loan" means a Loan bearing interest, at all times during an Interest Period applicable to such Loan, at a rate of interest
determined by reference to the Adjusted LIBO Rate. 

        "LIBOR Office" means the office of a Lender and the Administrative Agent designated as its "LIBOR
Office" on Schedule III attached hereto or in a Lender Assignment Agreement, or such other office designated from time to
time by notice from such Lender to the Borrowers and the Administrative Agent, whether or not outside the United States, which shall be making or maintaining the LIBOR Loans of such Lender. 

        "LIBOR Reserve Percentage" means the aggregate of the maximum reserve percentages (including, without limitation, any emergency,
supplemental, special or other marginal reserves) expressed as a decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to which the Administrative Agent is subject
with respect to the Adjusted LIBO Rate pursuant to regulations issued by the Board of Governors of the Federal Reserve System (or any Governmental Authority succeeding to any of its principal
functions) with respect to eurocurrency funding (currently referred to as "eurocurrency liabilities" under Regulation D). LIBOR Loans shall be
deemed to constitute eurocurrency funding and 

15

 

to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under Regulation D. The LIBOR
Reserve Percentage shall be adjusted automatically on and as of the effective date of any change in any reserve percentage. 

        "Lien" means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
otherwise), charge against or interest in property, or other priority or
preferential arrangement of any kind or nature whatsoever, to secure payment of a debt or performance of an obligation. 

        "Limited Entities" means those Consolidated Entities and Non-Consolidated Entities that, due to restrictions contained in
their Organic Documents or in agreements to which they are a party, are unable to provide a guaranty of the Obligations or place a Lien on their assets and in which the Secured Parties are unable to
obtain a pledge of their Equity Interests. 

        "Loan" is defined in clause (a) of  Section 2.1.1. All references to the term "Loan" or
"Loans" herein shall include both Revolving Loans and Swingline Loans. 

        "Loan Documents" means, collectively, this Agreement, the Revolving Notes, if any, the Swingline Note, the Letters of Credit, each Rate
Protection Agreement, the Fee Letter, the US Subsidiary Guaranty, the Foreign Subsidiary Guaranty, each Pledge Agreement, each Copyright Security Agreement, each Patent Security Agreement, each
Trademark Security Agreement, each Mortgage, each other agreement pursuant to which the Administrative Agent is granted a Lien to secure the Obligations and each other agreement, certificate, document
or instrument delivered in connection with any Loan Document, whether or not specifically mentioned herein or therein, all as amended and/or restated from time to time. 

        "Maintenance Capital Expenditures" means any Capital Expenditures made with respect to the maintenance of existing assets. 

        "Material Adverse Effect" means a material adverse effect on (a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrowers or the Borrowers and their Consolidated Entities taken as a whole, (b) the rights and remedies of any Secured Party under any Loan Document
or (c) the ability of any Obligor to perform its Obligations under any Loan Document. 

        "Maximum Assignments" is defined in Section 12.3. 

        "Maximum Assignment Costs" is defined in Section 12.3. 

        "Maximum UK Availability" is defined in clause (d) of  Section 2.1.1. 

        "Minority Interests" means, with respect to the Consolidated Entities, the Equity Interests held by Persons other than US Borrower, the UK
Borrower or Subsidiary Guarantors, as reflected in the financial statements of the applicable Borrower in accordance with GAAP. 

        "Moody's" means Moody's Investors Service, Inc. 

        "Mortgage" means a mortgage, deed of trust or agreement executed and delivered by any Obligor in favor of the Secured Parties or in favor
of the Administrative Agent for the benefit of the Secured Parties pursuant to the requirements of this Agreement, in form and substance satisfactory to the Administrative Agent, under which a Lien is
granted on the real property and fixtures described therein, in each case as amended and/or restated from time to time. 

        "Net Casualty Proceeds" means, with respect to any Casualty Event, the amount of any insurance proceeds, or condemnation awards received
by the Borrowers or any of their Consolidated Entities, or by Parent or Holdings, in connection with such Casualty Event in excess of $500,000, individually or in 

16

 

the aggregate over the course of a Fiscal Year (net of all reasonable and customary collection expenses thereof), but excluding any proceeds or awards required to be paid to a creditor (other than
the Lenders) which holds a first priority Lien permitted by Section 8.2.3 on the property which is the subject of such Casualty Event. 

        "Net Debt Issuance Proceeds" means with respect to any Debt Issuance (whether pursuant to  clause (i) of Section 8.2.2 or otherwise), the excess of (a) the gross cash
proceeds received by the applicable Borrower or any of its Consolidated Entities, or by Parent or Holdings, from such Debt Issuance, over (b) all
reasonable and customary legal brokerage and commitment fees and expenses incurred in connection with such Debt Issuance. 

        "Net Disposition Proceeds" means, with respect to any Disposition (whether pursuant to  clause (d) of Section 8.2.12 or otherwise), the excess of (a) the gross cash
proceeds received by the applicable Borrower or any of its Consolidated Entities, or by Parent or Holdings, from such Disposition and any cash payment received in respect of promissory notes or other
non-cash consideration delivered to such party in respect thereof, over (b) the sum of (i) all reasonable and customary legal,
investment banking, brokerage and accounting fees and expenses incurred in connection with such Disposition, (ii) all Taxes actually paid or estimated by such party to be payable in cash within
the next 12 months in connection with such Disposition, (iii) payments made by such party to retire Indebtedness (other than the Credit Extensions) where payment of such Indebtedness is
required in connection with such Disposition and (iv) amounts attributable to Minority Interests; provided that if the amount of any estimated
Taxes pursuant to clause (ii) exceeds the amount of Taxes actually required to be paid in cash in respect of such Disposition, the aggregate
amount of such excess shall constitute Net Disposition Proceeds. 

        "Net Equity Proceeds" means, with respect to the sale or issuance by Parent, Holdings or either Borrower to any Person of any Equity
Interests, warrants or options or the exercise of any such warrants or options, the excess of (a) the gross cash proceeds received by such Person from such sale, exercise or issuance,  over
(b) all reasonable and customary underwriting commissions and legal, investment banking, brokerage and accounting and other professional
fees, sales commissions and disbursements actually incurred in connection with such sale or issuance which have not been paid to Affiliates of the applicable Borrower in connection therewith. 

        "Net Income" means, for any period, the aggregate of all amounts (exclusive of all amounts in respect of any extraordinary gains but
including extraordinary losses) which would be included as net income on the consolidated financial statements of the Borrowers and their Consolidated Entities for such period. 

        "Non-Consolidated Entities" means each of the operating partnerships, limited liability companies, joint ventures or similar
entities in which the Borrowers have, directly or indirectly, invested, other than the Consolidated Entities. 

        "Non-Excluded Taxes" means any Taxes other than net income and franchise taxes imposed with respect to any Secured Party by
any Governmental Authority under the laws of which such Secured Party is organized or in which it maintains its applicable lending office. 

        "Non-U.S. Lender" means a Lender that is not a "United States person", as
defined under Section 7701(a)(30) of the Code. 

        "Notice of Default" is defined in Section 10.9. 

        "Notice of Swingline Borrowing" is defined in Section 2.3.2(a). 

        "Obligations" means all obligations (monetary or otherwise, whether absolute or contingent, matured or unmatured) of the Borrowers and
each other Obligor arising under or in connection with a Loan Document, including Reimbursement Obligations and the principal of and premium, if any, and 

17

 

interest (including interest accruing during the pendency of any proceeding of the type described in Section 9.1.9, whether or not allowed in
such proceeding) on the Loans. 

        "Obligor" means, as the context may require, the Borrowers and each other Person (other than a Secured Party) obligated under any Loan
Document. 

        "Operating Entities" means the operating partnerships, limited liability companies, joint ventures or similar entities in which either of
the Borrowers have, directly or indirectly, invested and which actively engage in business (other than solely in investment and management activities). 

        "Original Credit Agreement" is defined in the second recital. 

        "Original Lenders" is defined in the second recital. 

        "Original Loans" is defined in the second recital. 

        "Organic Document" means, relative to any Obligor, as applicable, its certificate of incorporation, by-laws, regulations,
certificate of partnership, partnership agreement, certificate of formation, limited liability company agreement, operating agreement and all shareholder agreements, voting trusts and similar
arrangements applicable to any of such Obligor's partnership interests, limited liability company interests or authorized shares of Equity Interests. 

        "Other Indebtedness" means, at any time, Total Funded Debt less the sum of (i) Subordinated Debt  plus (ii) all amounts outstanding under all Revolving Notes
and the Swingline Note. 

        "Other Taxes" means any and all stamp, documentary or similar Taxes, or any other excise or property Taxes or similar levies that arise on
account of any payment made or required to be made under any Loan Document or from the execution, delivery, registration, recording or enforcement of any Loan Document. 

        "Parent" is defined in the first recital. 

        "Parent Guaranty and Pledge Agreement" means the Parent Guaranty and Pledge Agreement, dated as of June 13, 2001, executed and
delivered by an Authorized Officer of Parent pursuant to the terms of the Original Credit Agreement, as amended in accordance with the terms of this Agreement, and as such may be further amended
and/or restated from time to time. 

        "Parent Total Capitalization" means, at any time, the sum of (a) the sum of all amounts (without duplication) which, in accordance
with GAAP, would be included in Parent's stockholders' equity (excluding unrealized gains or losses recorded pursuant to FAS 115) as required to be reported in Parent's then most recent
consolidated balance sheet, and (b) Parent Total Debt. 

        "Parent Total Debt" means, on any date, the outstanding principal amount of all Indebtedness of Parent and its Subsidiaries of the type
referred to in clauses (a), (b), (d) and (h) in each case of the definition of
"Indebtedness", along with any Contingent Liability in respect of any of the foregoing. 

18

  

        "Parent Total Debt to Parent Total Capitalization Ratio" means, as of the last day of any Fiscal Quarter, the ratio of (a) Parent
Total Debt outstanding on such day to (b) Parent Total Capitalization on such day. 

        "Participant" is defined in clause (d) of  Section 12.10. 

        "Patent Security Agreement" means any patent security agreement executed and delivered by any Obligor, substantially in the form of
Exhibit B to any Pledge Agreement, as such may be amended and/or restated from time to time. 

        "PBGC" means the Pension Benefit Guaranty Corporation and any Person 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 either Borrower or any corporation, trade or business that
is, along with such 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 applicable percentage relating to Loans set forth opposite its name on  Schedule III hereto under the Percentage
column, or set forth in a Lender Assignment Agreement, as such percentage may be adjusted from time to
time pursuant to Lender Assignment Agreements executed by such Lender and its assignee Lender and delivered pursuant to Section 12.10. A Lender
shall not have any Revolving Loan Commitment if its Percentage is zero. 

        "Permitted Acquisition" means an acquisition (whether pursuant to an acquisition of Equity Interests, assets or otherwise) by either
Borrower or any Consolidated Entity from any Person of a business (or an increase of an existing Equity Interest therein) in which the following conditions are satisfied: 

	(a)
	immediately
before and after giving effect to such acquisition, no Default shall have occurred and be continuing or would result therefrom; and

	(b)
	such
Borrower shall have delivered to the Administrative Agent a Compliance Certificate for the period of four full Fiscal Quarters immediately preceding such acquisition (prepared in
good faith and in a manner and using such methodology which is consistent with the most recent financial statements delivered pursuant to  Section 8.1.1) giving pro forma effect to the consummation
of such acquisition and evidencing compliance with the covenants set forth in  Section 8.2.4; provided that, for purposes of calculating compliance
with the Fixed Charge
Coverage Ratio, (i) if the amount of Maintenance Capital Expenditures (as applied to the business being acquired) made for such four full Fiscal Quarters is not ascertainable, the amount of
depreciation of assets applicable to such business for such four full Fiscal Quarters shall be substituted in replacement thereof, and (ii) if the amount of scheduled principal repayments of
Indebtedness (as applied to the business being acquired) made during such four full Fiscal Quarters is not ascertainable, the amount of scheduled principal repayments of Indebtedness applicable to
such business, if any, for the four full Fiscal Quarters following such acquisition shall be substituted in replacement thereof; and

	(c)
	the
acquisition has not been opposed by the board of directors (or equivalent governing body) or management of the acquired company. 

        "Permitted Debt Issuance" means that certain Debt Issuance permitted in accordance with  Section 8.2.2(i). 

19

 

        "Permitted Dispositions" means those certain Dispositions permitted in accordance with  Section 8.2.12 hereof. 

        "Permitted Foreign Investment" means an Investment by the Borrowers in Foreign Subsidiaries of Holdings located in Western Europe in which
the following conditions are satisfied: 

	(a)
	immediately
before and after giving effect to such Investment, no Default shall have occurred and be continuing or would result therefrom; and

	(b)
	such
Borrower shall have delivered to the Administrative Agent a Compliance Certificate for the period of four full Fiscal Quarters immediately preceding such Investment (prepared in
good faith and in a manner and using such methodology which is consistent with the most recent financial statements
delivered pursuant to Section 8.1.1) giving pro forma effect to the consummation of such Investment and evidencing compliance with the covenants
set forth in Section 8.2.4. 

        "Person" means any natural person, corporation, limited liability company, partnership, joint venture, association, trust or
unincorporated organization, Governmental Authority or any other legal entity, whether acting in an individual, fiduciary or other capacity. 

        "Pledge Agreement" means, as the context may require, the Parent Guaranty and Pledge Agreement, the Holdings Guaranty and Pledge
Agreement, the USP International Guaranty and Pledge Agreement, the USP Europe Guaranty and Pledge Agreement, the US Borrower Pledge and Security Agreement, the UK Borrower Pledge and Security
Agreement, the US Subsidiary Pledge and Security Agreement or the Foreign Subsidiary Pledge and Security Agreements. 

        "Pledged Subsidiary" means a Subsidiary in respect of which the Administrative Agent has been granted a security interest in or a pledge
of (i) any of the Equity Interests of such Subsidiary or (ii) any intercompany notes of such Subsidiary owing to either Borrower or another Subsidiary. 

        "Power of Attorney" means any Power of Attorney executed and delivered by a Lender along with the related apostille, substantially in the
form of Exhibit A to any Lender Assignment Agreement, as such may be assigned from time to time. 

        "Prior Investments" is defined in Section 8.2.5(e). 

        "Qualified Entity" means (i) each Consolidated Entity and (ii) each Operating Entity which is a Non-Consolidated
Entity (other than Global Healthcare and its Subsidiaries). 

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

        "Rate Protection Agreement" means, collectively, any Hedging Obligations entered into by the applicable Borrower or any of its
Consolidated Entities under which the counterparty of such agreement is (or at the time such agreement was entered into, was) a Lender or an Affiliate of a Lender. 

        "Register" is defined in clause (b) of  Section 2.7. 

        "Reimbursement Obligation" is defined in Section 2.6.3. 

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

        "Required Lenders" means Lenders holding at least 51% of the Total Exposure Amount but in no event less than a majority of the Lenders
(based on number of Lenders then currently holding Commitments). 

        "Resource Conservation and Recovery Act" means the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,  et seq., as amended. 

20

 

        "Restricted Payment" means the declaration or payment of any dividend (other than dividends payable solely in Equity Interests of either
Borrower or any Consolidated Entity) on, or the making of any payment or distribution on account of, or setting apart assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of any class of Equity Interests of either Borrower or any Consolidated Entity, or any warrants or options to purchase any such Equity Interests, whether
now or hereafter outstanding, or the making of any other distribution in respect thereof, either directly or indirectly, whether in cash or property, obligations of either Borrower or any Consolidated
Entity or otherwise. 

        "Revolving Loan Commitment" means, with respect to each Lender, the obligation of such Lender to make Revolving Loans to the Borrowers and
to participate in Letters of Credit and Swingline Loans in an aggregate principal amount not exceeding the amount set forth with respect to such Lender on Schedule III  attached hereto, or in the
case of a Person becoming a Lender after the Closing Date, the amount of the assigned "Revolving Loan
Commitment" as provided in the applicable Assignment Agreement executed by such Person as an assignee, as the same may be changed pursuant to terms hereof. 

        "Revolving Loan Commitment Amount" means, on any date, $115,000,000, as such amount may be reduced from time to time pursuant to  Section 2.2. 

        "Revolving Loans" is defined in Section 2.1.1. 

        "Revolving Notes" means a promissory note of either Borrower payable to any Lender, substantially 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 such Borrower to such Lender, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof. 

        "S&P" means Standard & Poor's Rating Services, a division of McGraw-Hill, Inc. 

        "SEC" means the Securities and Exchange Commission. 

        "Secured Parties" means, collectively, the Lenders, the Issuer, the Administrative Agent, each counterparty to a Rate Protection Agreement
that is (or at the time such Rate Protection Agreement was entered into, was) a Lender or an Affiliate thereof and, in each case, each of their respective successors, transferees and assigns. 

        "Senior Funded Debt" means, at any time, Total Funded Debt minus the aggregate principal
amount of all Subordinated Debt. 

        "Senior Funded Debt to EBITDA Ratio" means that ratio of Borrowers' Senior Funded Debt to EBITDA, calculated on a rolling four quarter
basis and measured on the last day of each Fiscal Quarter as required in accordance with the terms of this Agreement. 

        "Stated Amount" means, on any date and with respect to a particular Letter of Credit, the total amount then available to be drawn under
such Letter of Credit. 

        "Stated Expiry Date" is defined in Section 2.6. 

        "Stated Maturity Date" means November 7, 2005. 

        "Sub Debt Documents" means any loan agreements, indentures, note purchase agreements, promissory notes, guarantees, and other instruments
and agreements evidencing the terms of Subordinated Debt, as amended, supplemented, amended and restated or otherwise modified in accordance with  Section 8.2.13. 

        "Subject Subsidiary" is defined in Section 8.1.10. 

21

 

        "Subject US Subsidiary Guarantors" is defined in Section 8.1.10. 

        "Subordinated Debt" means the Subordinated Intercompany Notes, the Holdings Notes Guaranties and any other Indebtedness of the Borrowers
or their Consolidated Entities (a) that is expressly subordinated to the Obligations and other obligations arising under the Loan Documents on terms reasonably satisfactory to the
Administrative Agent, (b) that matures by its terms no earlier than six months after the Stated Maturity Date then in effect with no scheduled principal payments permitted prior to such
maturity, and (c) that is evidenced by an indenture or other similar agreement that is in a form satisfactory to the Administrative Agent. 

        "Subordinated Intercompany Notes" means, collectively, (i) the intercompany note, dated December 19, 2001, made by the US
Borrower to Holdings in an amount not to exceed $78,000,000, and (ii) the intercompany note, dated December 19, 2001, made by the UK Borrower to Holdings in an amount not to exceed
$33,600,000, (iii) the intercompany note, dated December 19, 2001, made by USP Europe to UK Borrower in an amount not to exceed $33,600,000, (iv) the intercompany note, dated
December 19, 2001, made by Parent to Holdings in an amount not to exceed $21,100,000, (v) the intercompany note, dated January 28, 2002, made by US Borrower to Holdings in an
amount not to exceed $5,000,000 and (iv) the intercompany note, dated January 17, 2002 made by UK Borrower to Holdings in an amount not to exceed $6,250,000, in each case subordinated in
right of payment to the Obligations pursuant to documentation containing terms satisfactory to the Administrative Agent. 

        "Subordination Provisions" is defined in Section 9.1.11. 

        "Subsidiary" means, with respect to any Person, any other Person of which more than 50% of the outstanding Voting Interests of such other
Person (irrespective of whether at the time Equity Interests of any other class or classes of such other Person shall or might have voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such Person and one or more other Subsidiaries of such Person, or by one or more other Subsidiaries of such Person. Unless the context
otherwise specifically requires, the term "Subsidiary" shall be a reference to a Subsidiary of the applicable Borrower. 

        "Subsidiary Guarantor" means, as applicable, a US Subsidiary Guarantor or a Foreign Subsidiary Guarantor. 

        "Subsidiary Guaranty" means, as the context may require, the U.S. Subsidiary Guaranty or the Foreign Subsidiary Guaranty. 

        "SunTrust" is defined in the preamble. 

        "Swingline Commitment" means the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding not to exceed $7,500,000. 

        "Swingline Exposure" means, with respect to each Lender, the principal amount of the Swingline Loans in which such Lender is legally
obligated either to make a Swingline Loan or to purchase a participation in accordance with Section 2.3.2, which shall equal such Lender's pro
rata share of all outstanding Swingline Loans. 

        "Swingline Lender" means SunTrust. 

        "Swingline Loan" means a loan made to a Borrower by the Swingline Lender under the Swingline Commitment. 

        "Swingline Note" means the promissory note of either Borrower payable to the order of the Swingline Lender in the principal amount of the
Swingline Commitment, substantially the form of Exhibit A1 (as such promissory note may be amended, endorsed or otherwise modified from time to time),
and also means all other promissory notes accepted from time to time in substitution thereof or renewal thereof. 

22

 

        "Swingline Rate" means, for any Interest Period, the rate as offered by the Swingline Lender and accepted by the applicable Borrower. Said
Borrower is under no obligation to accept this rate and the Swingline Lender is under no obligation to provide it. 

        "Syndication Agent" is defined in the preamble. 

        "Synthetic Lease" means, as applied to any Person, any lease (including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (a) that is not a capital lease in accordance with GAAP and (b) in respect of which the lessee retains or obtains ownership of
the property so leased for federal income tax purposes, other than any such lease under which that Person is the lessor. 

        "Taxes" means all income, stamp or other taxes, duties, levies, imposts, charges, assessments, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all interest, penalties or similar liabilities with respect thereto. 

        "Termination Date" means the date on which all Obligations have been indefeasibly paid in full in cash, all Letters of Credit have been
terminated or expired (or been Cash Collateralized), all Rate Protection Agreements have been terminated and all Commitments shall have terminated. 

        "Total Exposure Amount" means, on any date of determination (and without duplication), the outstanding principal amount of all Loans, the
aggregate amount of all Letter of Credit Outstandings and the unfunded amount of the Commitments. 

        "Total Funded Debt" means, at any time, all then currently outstanding obligations, liabilities and indebtedness of the Borrowers and
their Consolidated Entities of the types described in the definitions of Indebtedness, including without limitation all Loans and Letter of Credit
obligations under the Loan Documents. 

        "Total Funded Debt to EBITDA Ratio" means that ratio of Borrowers' Total Funded Debt to EBITDA, calculated on a rolling four quarter basis
and measured on the last day of each Fiscal Quarter as required in accordance with the terms of this Agreement. 

        "Trademark Security Agreement" means any trademark security agreement executed and delivered by any Obligor, substantially in the form of
Exhibit C to any Pledge Agreement, as such may be amended and/or restated from time to time. 

        "Transferred Entity Interest" is defined in Section 5.3. 

        "type" means, relative to any Loan, the portion thereof, if any, being maintained as a Base Rate Loan, a LIBOR Loan or a Swingline Loan. 

        "UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York;  provided that if, with respect to any Filing Statement or by reason of
any provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the Uniform Commercial Code as in effect in a jurisdiction of the United States other than New York, then
"UCC" means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions of each Loan Document
and any Filing Statement relating to such perfection or effect of perfection or non-perfection. 

        "UK Borrower" is defined in the preamble. 

        "UK Borrower Pledge and Security Agreement" means the UK Borrower Pledge and Security Agreement, dated as of January 30, 2002,
executed and delivered by an Authorized Officer of the UK Borrower pursuant to the terms of the Existing Credit Agreement, as amended in accordance with the terms of this Agreement, and as such may be
further amended and/or restated from time to time. 

23

 

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

        "US Borrower" is defined in the preamble. 

        "US Borrower Pledge and Security Agreement" means the Borrower Pledge and Security Agreement, dated as of June 13, 2001, executed
and delivered by an Authorized Officer of the US Borrower pursuant to the terms of the Original Credit Agreement, as amended pursuant to that certain Supplement No. 1 to US Borrower Pledge and
Security Agreement dated as of December 19, 2001, as further amended in accordance with the terms of this Agreement, and as such may be further supplemented, amended and/or restated from time
to time. 

        "USP Europe" means United Surgical Partners Europe, S.L. 

        "USP Europe Guaranty and Pledge Agreement" means the USP Europe Guaranty and Pledge Agreement, of even date herewith, executed and
delivered by an Authorized Officer of USP Europe pursuant to the terms of this Agreement, as such may be supplemented, amended and/or restated from time to time. 

        "USP International" is defined in the first recital. 

        "USP International Guaranty and Pledge Agreement" means the USP International Guaranty and Pledge Agreement, dated as of
January 30, 2002, executed and delivered by an Authorized Officer of USP International pursuant to the terms of the Existing Credit Agreement, as amended in accordance with the terms of this
Agreement, and as such may be further supplemented, amended and/or restated from time to time. 

        "US Subsidiary" means a Subsidiary incorporated or organized under the laws of the United States or a state thereof. 

        "US Subsidiary Guarantor" means a wholly owned US Subsidiary. 

        "US Subsidiary Guaranty" means the Subsidiary Guaranty, dated as of June 13, 2001, executed and delivered by an Authorized Officer
of each US Subsidiary Guarantor (as of the Effective Date) pursuant to the terms of the Original Credit Agreement, as amended by Supplement No. 1 to U.S. Subsidiary Guaranty dated as of
December 19, 2001, as further amended in accordance with the terms of this Agreement, and as such may be further supplemented, amended and/or restated from time to time. 

        "US Subsidiary Pledge and Security Agreement" means the Subsidiary Pledge and Security Agreement, dated as of June 13, 2001,
executed and delivered by an Authorized Officer of each US Subsidiary Guarantor (as of the Effective Date) pursuant to the terms of the Original Credit Agreement, as amended by Supplement No. 1
to U.S. Subsidiary Pledge and Security Agreement dated as of December 19, 2001, as further amended in accordance with the terms of this Agreement, and as such may be further supplemented,
amended and/or restated from time to time. 

        "Voting Interests" means, with respect to any Person, Equity Interests of any class or kind ordinarily having the power to vote for the
election of directors, managers or other voting members of the governing body of such Person. 

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

        "Wholly-Owned Subsidiary" means a Subsidiary that all of the outstanding Equity Interests of which (other than any director's qualifying
shares) are owned directly or indirectly by a Borrower. 

 
 
        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 each
other Loan Document and the Disclosure Schedule. 

24

 

 
 
        SECTION 1.3    Cross References.     Unless otherwise specified, references in a Loan Document to any Article or
Section are references to such Article or Section of such Loan Document, and
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 and Financial Determinations.     Unless otherwise specified, all accounting terms used
in each Loan Document shall be interpreted, and all accounting determinations and computations thereunder
(including under Section 8.2.4 and the definitions used in such calculations) shall be made, in accordance with those generally accepted
accounting principles ("GAAP") applied in the preparation of the financial statements referred to in  Section 5.1.12 of the Original Credit Agreement.
Unless otherwise expressly provided, all financial covenants and defined financial terms shall
be computed on a consolidated basis for the Borrowers and their Consolidated Entities (which excludes Global Healthcare and its Subsidiaries as set forth in the definition of
"Consolidated Entities" contained herein), in each case without duplication. 

25

  

 
 
        SECTION 1.5    Time References.     Unless otherwise specifically set forth herein, all time references set forth
in this Agreement shall refer to Atlanta, Georgia time. 

 
 

ARTICLE II
  COMMITMENTS, BORROWING AND ISSUANCE
  PROCEDURES, NOTES AND LETTERS OF CREDIT    
  

 
 
        SECTION 2.1    Commitments.     On the terms and subject to the conditions of this Agreement, the Lenders and the
Issuer severally agree to make Credit Extensions up to the Revolving Loan
Commitment Amount as set forth below. 

 
 
        SECTION 2.1.1    Revolving Loan Commitment.     

        (a)  From
time to time on any Business Day prior to the Commitment Termination Date, each Lender that has a Revolving Loan Commitment severally agrees that it will make loans
(relative to such Lender, its "Revolving Loans"; the term "Loans" shall include Revolving Loans and
Swingline Loans) to the Borrowers equal to such Lender's Percentage of the aggregate amount of each Borrowing of the Loans requested by either of the Borrowers to be made on such day. On the terms and
subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow 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 of such Lender, together with such Lender's Percentage of the aggregate amount of all Letter of Credit Outstandings and Swingline Exposure, would
exceed such Lender's Percentage of the then existing Revolving Loan Commitment Amount. 

        (b)  Each
of the parties hereto acknowledges and agrees that the Existing Loans shall be repaid pursuant to the proceeds of the Gross Equity Proceeds, with each Lender's
share of future Loans being set forth opposite its name on Schedule III hereto or set forth in a Lender Assignment Agreement, as such amount may be adjusted from time to time pursuant to the
terms hereof. 

        (c)  Subject
to clause (d) of Section 2.1.1 and notwithstanding
anything to the contrary contained herein, the Lenders will have no obligation to advance Loans to, or issue Letters of Credit for the benefit of, the UK Borrower which would otherwise be permitted
hereunder if the principal amount of such Loans or the face amount of such Letters of Credit, as applicable, together with the outstanding principal amount of all Loans and Letter of Credit
Outstandings previously made to the UK Borrower, exceeds the lesser of (i) the sum of (A) $20,000,000 plus (B) 75% of the appraised
value of all collateral pledged by the UK Borrower and its Subsidiaries pursuant to a Loan Document and properly perfected (such appraised value to be set forth in an appraisal in form and substance
and from an appraiser satisfactory to the Administrative Agent) and (ii) $40,000,000. 

        (d)  Notwithstanding
anything to the contrary contained herein, until satisfaction of the covenants and conditions set forth in  Section 8.3, the Lenders will have no obligation to issue Letters of Credit for the
benefit of the UK Borrower which would otherwise be permitted
hereunder and until satisfaction of the covenants and conditions set forth in Section 8.3, the Lenders will have no obligation to advance Loans
to the UK Borrower which would otherwise be permitted hereunder if the principal amount of such Loans exceeds $20,000,000 (the "Maximum UK
Availability"); provided further, the Maximum UK Availability will automatically reduce by $5,000,000 90 days after the
Closing Date and will continue to reduce by $5,000,000 every 90 days thereafter until the covenants and conditions set forth in  Section 8.3 have been met to the satisfaction of Administrative
Agent. If at the time of any reduction in the Maximum UK Availability, the
outstanding Loans to the UK Borrower exceed the reduced Maximum UK Availability, the Borrowers shall make a mandatory prepayment of the UK Borrower's Loans in an 

26

 

amount necessary to meet the reduced Maximum UK Availability. The Borrowers agree that even if the Maximum UK Availability has been reduced to zero pursuant to this  clause (d), the UK Borrower
shall be bound by and shall continue to comply with the conditions, covenants and agreements set forth in this
Agreement and all other Loan Documents. Once the covenants and conditions of Section 8.3 have been met to the satisfaction of Administrative
Agent, this clause (d) will no longer be applicable to restrict the Credit Extensions to the UK Borrower. 

        (e)  Notwithstanding
anything to the contrary contained herein, the Lenders will have no obligation to advance Loans to, or issue Letters of Credit for the benefit of, the
Borrowers which would otherwise be permitted hereunder if the principal amount of such Loans, or the face amount of such Letters of Credit, as applicable, together with the outstanding principal
amount of all Loans and Letters of Credit Outstanding previously made to the Borrowers, exceed $114,000,000 unless and until the Administrative Agent and Lenders have been reimbursed the Maximum
Assignment Costs from Borrower. 

        (f)    The
obligations of the Lenders hereunder to make Loans and to find participation in Letters of Credit and Swingline Loans are several and not joint. The failure of any
Lender to make any Loan or to fund any such participation on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall
be responsible for the failure of any other Lender to so make its Loan or purchase its participation. 

 
 
        SECTION 2.1.2    Letter of Credit Commitment.     

        (a)  From
time to time on any Business Day prior to the Commitment Termination Date, the Issuer agrees that it will 

          (i)  issue
one or more standby letters of credit (a "Letter of Credit") for the account of the applicable Borrower or any
Subsidiary Guarantor in the Stated Amount requested by such Borrower on such day; or 

        (ii)  extend
the Stated Expiry Date of an existing standby Letter of Credit previously issued hereunder. 

No
Stated Expiry Date shall extend beyond the earlier of (i) the Commitment Termination Date and (ii) unless otherwise agreed to by the Issuer in its sole discretion, one year from the
date of such extension. The Issuer shall not be permitted or required to issue any Letter of Credit if, after giving effect thereto, (i) the aggregate amount of all Letter of Credit
Outstandings would exceed the Letter of Credit Commitment Amount or (ii) the sum of the aggregate amount of all Letter of Credit Outstandings plus the aggregate principal amount of all Loans
then outstanding would exceed the Revolving Loan Commitment Amount. 

        (b)  For
rights, remedies and indemnifications contained related to Letters of Credit, the term "Issuer" as used herein shall
also be deemed to include CSFB with respect to but limited to the Existing Letters of Credit. 

 
 
        SECTION 2.1.3    Swingline Commitment.     Subject to the terms and conditions set forth herein, the Swingline
Lender agrees to make Swingline Loans to the Borrower, from time to time on any Business Day
from the Closing Date to the Commitment Termination Date. On the terms and subject to the conditions hereof, the Borrowers may from time to time borrow, prepay and reborrow Swingline Loans; provided
that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan, and Swingline Lender shall not be required to make a Swingline Loan if the
Swingline Rate is not accepted by Borrowers or made available by the Swingline Lender. Additionally, the Swingline Lender shall not be permitted or required to make any Swingline Loan if, after giving
effect thereto, the aggregate outstanding principal amount of all Loans of the Swingline Lender, together with Swingline Lender's Percentage of the aggregate amount of all Letter of Credit 

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Outstandings and Swingline Exposure, would exceed Swingline Lender's Percentage of the then existing Revolving Loan Commitment Amount. 

 
 
        SECTION 2.1.4    Assignment and Reallocation of Existing Loans and Commitments.     On the Closing Date, each
Existing Lender hereby irrevocably sells, transfers, conveys and assigns, without recourse, representation or warranty, (except as
expressly set forth herein), to each Lender, and each such Lender hereby irrevocably purchases from such Existing Lender, a portion of the rights and obligations of such Existing Lender under the
Existing Credit Agreement and each other Loan Document in respect of such Existing Lender's Existing Commitments under (and as defined in) the Existing Credit Agreement, including participating
interests in Letter of Credit Outstandings under (and as defined in) the Existing Credit Agreement, such that, after giving effect to the foregoing assignment and delegation, each Lender's Percentages
of the Commitments and portion of the Existing Loans will be as set forth on Schedule III attached hereto. 

        (a)  Each
of the Lenders hereby acknowledges and agrees that (i) other than the representations and warranties contained above, no Existing Lender nor the
Administrative Agent has made any representations or warranties or assumed any responsibility with respect to (A) any statements, warranties or representations made in or in connection with
this Agreement or the execution, legality, validity, enforceability, genuineness or sufficiency of this Agreement, the Existing Credit Agreement or any other Loan Document or (B) the financial
condition of any Obligor or the performance by any Obligor of the Obligations; (ii) it has received such information as it has deemed appropriate to make its own credit analysis and decision to
enter into this Agreement; and (iii) it has made and continues to make its own credit decisions in taking or not taking action under this Agreement, independently and without reliance upon the
Administrative Agent or any other Lender. 

        (b)  Each
Borrower, each of the Existing Lenders and the Administrative Agent also agree that each of the Lenders shall, as of the Closing Date, have all of the rights and
interests as a Lender in respect of the Commitments purchased and assumed or retained by it, to the extent of the rights and obligations so purchased and assumed or retained by it. 

 
 
        SECTION 2.2    Reduction of the Commitment Amounts.     The Commitment Amounts are subject to reduction from time
to time as set forth below. 

 
 
        SECTION 2.2.1    Optional.     The Borrowers may, from time to time on any Business Day, voluntarily reduce the
amount of the Commitment Amounts on the Business Day so specified by the
Borrowers; provided that all such reductions shall require at least one Business Day's prior notice to the Administrative Agent and be permanent, and any partial reduction of any Commitment Amount
shall be in a minimum amount of $1,000,000 and in an integral multiple of $500,000; provided further that in no event shall the Commitment Amounts be reduced to amount less than the amount of the
outstanding Loans. Any optional or mandatory reduction of the Revolving Loan Commitment Amount pursuant to the terms of this Agreement which reduces the Revolving Loan Commitment Amount below the
Letter of Credit Commitment and the Swingline Commitment Amount shall result in an automatic and corresponding reduction of the Letter of Credit Commitment Amount and the Swingline Commitment (as
directed by the Borrowers in a notice to the Administrative Agent delivered together with the notice of such voluntary reduction in the Revolving Loan Commitment Amount) to an aggregate amount not in
excess of the Revolving Loan Commitment Amount, as so reduced, without any further action on the part of the Issuer or Swingline Lender. 

 
 
        SECTION 2.2.2    Mandatory.     The Revolving Loan Commitment Amount shall, without any further action,
automatically and permanently be reduced on the date that Loans are required to be prepaid
with any Net Disposition Proceeds, Net Casualty Proceeds or Net Debt Issuance Proceeds in an amount equal to the amount by which Loans are required to be prepaid. 

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        SECTION 2.3    Borrowing Procedures; etc.     

 
 
        SECTION 2.3.1    Revolving Loans.     By delivering a Borrowing Request to the Administrative Agent on or before
11:00 a.m. on a Business Day, either Borrower may from time to time irrevocably
request, on not less than one Business Day's notice in the case of Base Rate Loans, or on not less than three Business Days' notice in the case of LIBOR Loans, and in either case not more than five
Business Days' notice, that a Borrowing be made, in the case of LIBOR Loans, in a minimum amount of $1,000,000 and an integral multiple of $250,000, and in the case of Base Rate Loans, in a minimum
amount of $250,000 and an integral multiple of $100,000 or, in either case, in the unused amount of the applicable Commitment. Administrative Agent shall give prompt notice of such Borrowing Request
to Lenders. 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 11:00 a.m. on such requested date of such Loan (which shall be a Business Day), such Lender that has a Commitment to make the Loans being requested shall deposit with the
Administrative 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 Administrative Agent shall specify from
time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Administrative Agent shall make such funds available to the applicable Borrower by wire transfer to the
accounts such Borrower shall have specified 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 2.3.2    Swingline Loans.     

        (a)  Either
Borrower shall give the Administrative Agent written notice (or telephonic notice promptly confirmed in writing) of each Swingline Borrowing
("Notice of Swingline Borrowing") prior to 11:00 a.m. on the requested date of each Swingline Borrowing. Each Notice of Swingline Borrowing shall
be irrevocable and shall specify: (i) the principal amount of such Swingline Loan, (ii) the date of such Swingline Loan (which shall be a Business Day) and (iii) the account of
such Borrower to which the proceeds of such Swingline Loan should be credited. The Administrative Agent will promptly advise the Swingline Lender of each Notice of Swingline Borrowing. Each Swingline
Loan shall accrue interest at the Swingline Rate. The aggregate principal amount of each Swingline Loan shall be not less than $100,000 or a larger multiple of $50,000, or such other minimum amounts
agreed to by the Swingline Lender and such Borrower. The Swingline Lender will make the proceeds of each Swingline Loan available to such Borrower in Dollars in immediately available funds at the
account specified by such Borrower in the applicable Notice of Swingline Borrowing not later than 1:00 p.m. on the requested date of such Swingline Loan. Upon the written request of any Lender
(but no more often than
quarterly), the Administrative Agent will notify any requesting Lender if any Swingline Loans occurred during the applicable quarter. 

        (b)  The
Swingline Lender, at any time and from time to time in its sole discretion, may, on behalf of the applicable Borrower (each Borrower hereby irrevocably authorizes
and directs the Swingline Lender to act on its behalf), give a Borrowing Request to the Administrative Agent requesting the Lenders (including the Swingline Lender) to make Base Rate Loans in an
amount equal to the unpaid principal amount of any Swingline Loan. Administrative Agent shall give prompt notice of such Borrowing Request to Lenders. Unless a Lender shall have delivered to Swingline
Lender a copy of a Notice of Default given to Administrative Agent pursuant to Section 10.9 at least two (2) Business Days prior to
Swingline Lender's making any Swingline Loan and the Default subject to such Notice of Default continues to exist, such Lender will make the proceeds of its Base Rate Loan included in such Borrowing
available to the Administrative Agent for the account of the Swingline Lender, which will be used solely for the repayment of such Swingline Loan. 

29

 

        (c)  If
for any reason a Base Rate Loan may not be (as determined in the sole discretion of the Administrative Agent), or is not, made in accordance with the foregoing
provisions, then each Lender (other than the Swingline Lender), unless such Lender shall have delivered to Swingline Lender a copy of a Notice of Default given to Administrative Agent pursuant to  Section 10.9 at least two (2) Business Days prior to Swingline Lender's making any Swingline Loan and the Default subject to such Notice
of Default continues to exist, shall purchase an undivided participating interest in such Swingline Loan in an amount equal to its pro rata share thereof on the date that such Base Rate Loan should
have occurred. On the date of such required purchase, each such Lender shall promptly transfer, in immediately available funds, the amount of its participating interest to the Administrative Agent for
the account of the Swingline Lender. If such Swingline Loan bears interest at a rate other than the Base Rate, such Swingline Loan shall automatically become a Base Rate Loan on the effective date of
any such participation and interest shall become payable on demand. 

        (d)  Each
Lender's obligation to make a Base Rate Loan pursuant to Section 2.3.2(b) or to purchase the participating
interests pursuant to Section 2.3.2(c) shall be absolute and unconditional, except as otherwise set forth therein, and shall not be affected by
any circumstance, including without limitation (i) any setoff, counterclaim, recoupment, defense or other right that such Lender or any other Person may have or claim against the Swingline
Lender, the Borrowers or any other Person for any reason whatsoever, (ii) the existence of a Default or an Event of Default or the termination of any Lender's Revolving Loan Commitment,
(iii) the existence (or alleged existence) of any event or condition which has had or could reasonably be expected to have a Material Adverse Effect, (iv) any breach of this Agreement or
any other Loan Document by the Borrowers, the Administrative Agent or any Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. If
such amount is not in fact made available to the Swingline Lender by any Lender, the Swingline Lender shall be entitled to recover such amount on demand from such Lender, together with accrued
interest thereon for each day from the date of demand thereof at the Federal Funds Rate. Until such time as such Lender makes its required payment, the Swingline Lender shall be deemed to continue to
have outstanding Swingline Loans in the amount of the unpaid participation for all purposes of the Loan Documents. In addition, such Lender shall be deemed to have assigned any and
all payments made of principal and interest on its Loans and any other amounts due to it hereunder, to the Swingline Lender to fund the amount of such Lender's participation interest in such Swingline
Loans that such Lender failed to fund pursuant to this Section, until such amount has been purchased in full. 

 
 
        SECTION 2.4    Continuation and Conversion Elections.     By delivering a Continuation/Conversion Notice to the
Administrative Agent on or before 11:00 a.m. on a Business Day, either Borrower may from time to time
irrevocably elect, on not less than one Business Day's notice in the case of Base Rate Loans, or three Business Days' notice in the case of LIBOR Loans, and in either case not more than five Business
Days' notice, that all, or any portion in an aggregate minimum amount of $250,000 and an integral multiple of $100,000 be, in the case of Base Rate Loans, converted into LIBOR Loans or be, in the case
of LIBOR Loans, converted into Base Rate Loans or continued as LIBOR Loans (in the absence of delivery of a Continuation Conversion Notice with respect to any LIBOR Loan at least three Business Days
(but not more than five Business Days) before the last day of the then current Interest Period with respect thereto, such LIBOR Loan shall, on such last day, automatically convert to a Base Rate
Loan); provided that (a) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders that have
made such Loans, and (b) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, LIBOR Loans when any Default has occurred and is continuing. 

30

 

 
 
        SECTION 2.5    Funding.     Each Lender may, if it so elects, fulfill its obligation to make, continue or convert
LIBOR 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 LIBOR Loan; provided that such LIBOR Loan shall nonetheless be
deemed to have been made and to be held by such Lender, and the obligation of the Borrowers to repay such LIBOR Loan shall nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. In addition, the Borrowers hereby consent and agree 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 LIBOR Loans by purchasing Dollar
deposits in its LIBOR Office's interbank eurodollar market. 

 
 
        SECTION 2.6    Issuance Procedures.     By delivering to the Administrative Agent an Issuance Request on or before
11:00 a.m. on a Business Day, either Borrower may from time to time irrevocably
request on not less than three nor more than ten Business Days' notice, in the case of an initial issuance of a Letter of Credit and not less than three Business Days' prior notice, in the case of a
request for the extension of the Stated Expiry Date of a standby Letter of Credit (in each case, unless a shorter notice period is agreed to by the Issuer, in its sole discretion), that the Issuer
issue, or extend the Stated Expiry Date of, a Letter of Credit in such form as may be requested by such Borrower and approved by the Issuer, solely for the purpose described in  Section 8.1.7. Each
Letter of Credit shall by its terms be stated to expire on a date (its "Stated Expiry
Date") no later than the earlier to occur of (i) the Commitment Termination Date or (ii) unless otherwise agreed to by the Issuer, in its sole discretion, one
year from the date of its issuance. The Issuer will make available to the beneficiary thereof the original of the Letter of Credit which it issues. The Administrative Agent shall provide the Lenders
on a quarterly basis a listing of all outstanding Letters of Credit. 

 
 
        SECTION 2.6.1    Other Lenders' Participation.     Upon the issuance of each Letter of Credit, and without further
action, each Lender (other than the Issuer), unless such Lender shall have delivered to Issuer a
copy of a Notice of Default given to Administrative Agent pursuant to Section 10.9 at least two (2) Business Days prior to Issuer's
issuing any initial Letter of Credit and the Default subject to such Notice of Default continues to exist, shall be deemed to have irrevocably purchased, to the extent of its Percentage, a
participation interest in such Letter of Credit (including the Contingent Liability and any Reimbursement Obligation with respect thereto), and such Lender shall, to the extent of its Percentage, be
responsible for reimbursing within one Business Day the Issuer for Reimbursement Obligations which have not been reimbursed by the applicable Borrower in accordance with  Section 2.6.3. In addition,
such Lender shall, to the extent of its Percentage, be entitled to receive a ratable portion of the Letter of Credit
fees payable pursuant to Section 3.3.2 with respect to each Letter of Credit (other than the issuance fees payable to an Issuer of such Letter of
Credit pursuant to the last sentence of Section 3.3.2) and of interest payable pursuant to  Section 3.2 with respect to any Reimbursement
Obligation. To the extent that any Lender has reimbursed the Issuer for a Disbursement, such Lender
shall be entitled to receive its ratable portion of any amounts subsequently received (from the applicable Borrower or otherwise) in respect of such Disbursement. 

 
 
        SECTION 2.6.2    Disbursements.     The Issuer will notify the applicable Borrower and the Administrative Agent
promptly of the presentment for payment of any Letter of Credit issued by the Issuer,
together with notice of the date (the "Disbursement Date") such payment shall be made (each such payment, a
"Disbursement"). Subject to the terms and provisions of such Letter of Credit and this Agreement, the Issuer shall make such payment to the beneficiary
(or its designee) of such Letter of Credit. Prior to 11:00 a.m. on the first Business Day following the Disbursement Date, the applicable Borrower will reimburse the Administrative Agent, for
the account of the Issuer, for all amounts which the Issuer has disbursed under such Letter of Credit, together with interest thereon at a rate per annum equal to the rate per annum then in effect for
Base Rate Loans (with the then Applicable Margin for Loans accruing on such amount) pursuant to Section 3.2 for the period from the 

31

 

Disbursement Date through the date of such reimbursement. Without limiting in any way the foregoing and notwithstanding anything to the contrary contained herein or in any separate application for
any Letter of Credit, each Borrower hereby acknowledges and agrees that it shall be obligated to reimburse the Issuer upon each Disbursement of a Letter of Credit, and shall be deemed to be the
obligor for purposes of each such Letter of Credit issued hereunder (whether the account party on such Letter of Credit is the applicable Borrower or a Subsidiary Guarantor). 

 
 
        SECTION 2.6.3    Reimbursement.     The obligation (a "Reimbursement
Obligation") of the Borrowers under  Section 2.6.2 to reimburse the Issuer with respect to each Disbursement (including interest thereon), and, upon the failure of the
applicable
Borrower to reimburse the Issuer, each Lender's obligation under Section 2.6.1 to reimburse the Issuer, shall be absolute and unconditional under
any and all circumstances, except as otherwise provided therein, and irrespective of any setoff, counterclaim or defense to payment which the applicable Borrower or such Lender, as the case may be,
may have or have had against the Issuer or any Lender, including any defense based upon the failure of any Disbursement to conform to the terms of the applicable Letter of Credit (if, in such Issuer's
good faith opinion, such Disbursement is determined to be appropriate) or any non-application or misapplication by the beneficiary of the proceeds of such Letter of Credit; provided that
after paying in full its Reimbursement Obligation hereunder, nothing herein shall adversely affect the right of the such Borrower or such Lender, as the case may be, to commence any proceeding against
the Issuer for any wrongful Disbursement made by
the Issuer under a Letter of Credit as a result of acts or omissions constituting gross negligence or willful misconduct on the part of the Issuer. 

 
 
        SECTION 2.6.4    Deemed Disbursements.     Upon the occurrence and during the continuation of any Default under
Section 9.1.9 or upon notification by
the Administrative Agent (acting at the direction of the Required Lenders) to the Borrowers of their obligations under this Section, following the occurrence and during the continuation of any other
Event of Default, 

        (a)  the
aggregate Stated Amount of all Letters of Credit shall, without demand upon or notice to the applicable Borrower or any other Person, be deemed to have been paid or
disbursed by the Issuer of such Letters of Credit (notwithstanding that such amount may not in fact have been paid or disbursed); and 

        (b)  the
applicable Borrower shall be immediately obligated to reimburse the Issuer for the amount deemed to have been so paid or disbursed by the Issuer. 

Amounts
payable by the applicable Borrower pursuant to this Section shall be deposited in immediately available funds with the Administrative Agent and held as collateral security for the
Reimbursement Obligations. When all Defaults giving rise to the deemed disbursements under this Section have been cured or waived the Administrative Agent shall return to the applicable Borrower all
amounts then on deposit with the Administrative Agent pursuant to this Section which have not been applied to the satisfaction of the Reimbursement Obligations. 

 
 
        SECTION 2.6.5    Nature of Reimbursement Obligations.     Each Borrower, each other Obligor and, to the extent set
forth in Section 2.6.1, each Lender shall assume
all risks of the acts, omissions or misuse of any Letter of Credit by the beneficiary thereof. The Issuer (except to the extent of its own gross negligence or willful misconduct) shall not be
responsible for: 

        (a)  the
form, validity, sufficiency, accuracy, genuineness or legal effect of any Letter of Credit or any document submitted by any party in connection with the application
for and issuance of a Letter of Credit, even if it should in fact prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent or forged; 

        (b)  the
form, validity, sufficiency, accuracy, genuineness or legal effect of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit
or the rights or 

32

 

benefits thereunder or the proceeds thereof in whole or in part, which may prove to be invalid or ineffective for any reason; 

        (c)  failure
of the beneficiary to comply fully with conditions required in order to demand payment under a Letter of Credit; 

        (d)  errors,
omissions, interruptions or delays in transmission or delivery of any messages, by mail, cable, telegraph, telex or otherwise; or 

        (e)  any
loss or delay in the transmission or otherwise of any document or draft required in order to make a Disbursement under a Letter of Credit. 

None
of the foregoing shall affect, impair or prevent the vesting of any of the rights or powers granted to the Issuer or any Lender hereunder. In furtherance and not in limitation or derogation of
any of the foregoing, any action taken or omitted to be taken by the Issuer in good faith (and not constituting gross negligence or willful misconduct) shall be binding upon each Obligor and each such
Secured Party, and shall not put the Issuer under any resulting liability to any Obligor or any Secured Party, as the case may be. 

 
 
        SECTION 2.7    Revolving Notes.     

        (a)  Each
Borrower agrees that, upon the request to the Administrative Agent by any Lender, such Borrower will execute and deliver to such Lender a Revolving Note evidencing
the Loans made by, and payable to the order of, such Lender in a maximum principal amount equal to such Lender's Percentage of the Revolving Loan Commitment Amount. Each Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made) appropriate notations on the grid attached to such Lender's Revolving Note (or on any continuation of such grid), which notations, if made, shall
evidence, inter alia, the date of, the outstanding principal amount of, and the interest rate and Interest Period applicable to the Loans evidenced thereby. Such notations shall, to the extent not
inconsistent with notations made by the Administrative Agent in the Register, be conclusive and binding on each Obligor absent manifest error; provided that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of any Obligor. 

        (b)  Each
Borrower hereby designates the Administrative Agent to serve as such Borrower's agent, solely for the purpose of this clause, to maintain a register (the
"Register") on which the Administrative Agent will record each Lender's Commitment, the Loans made by each Lender and each repayment in respect of the
principal amount of the Loans, annexed to which the Administrative Agent shall retain a copy of each Lender Assignment Agreement delivered to the Administrative Agent pursuant to  Section 12.10.
Failure to make any recordation, or any error in such recordation, shall not affect any Obligor's Obligations. The entries in the
Register shall be conclusive, in the absence of manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person in whose name a Loan is registered (or, if
applicable, to which a Revolving Note has been issued) as the owner thereof for the purposes of all Loan Documents, notwithstanding notice or any provision herein to the
contrary. Any assignment or transfer of a Commitment or the Loans made pursuant hereto shall be registered in the Register only upon delivery to the Administrative Agent of a Lender Assignment
Agreement that has been executed by the requisite parties pursuant to Section 12.10. No assignment or transfer of a Lender's Commitment or Loans
shall be effective unless such assignment or transfer shall have been recorded in the Register by the Administrative Agent as provided in this Section. 

33

 

 
 

ARTICLE III
  REPAYMENTS, PREPAYMENTS, INTEREST AND FEES    
  

 
 
        SECTION 3.1    Repayments and Prepayments; Application.     Each Borrower agrees that the Loans shall be repaid and
prepaid pursuant to the following terms. 

 
 
        SECTION 3.1.1    Repayments and Prepayments.     Each Borrower shall repay in full the unpaid principal amount of
each Loan made to such Borrower upon the applicable Stated Maturity Date therefor. Prior thereto,
payments and prepayments of the Loans shall or may be made as set forth below. 

        (a)  From
time to time on any Business Day, either Borrower may make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any of its Loans;  provided that (i) any such
prepayment of Loans shall be made pro rata among the Loans of the same type and, if applicable, having the same
Interest Period, (ii) all such voluntary prepayments shall require at least one Business Days' notice in the case of Base Rate Loans, or three Business Days' notice in the case of LIBOR Loans,
but in either case no more than five Business Days' prior notice to the Administrative Agent, (iii) all such voluntary partial prepayments shall be in an aggregate minimum amount of $1,000,000
and integral multiples of $250,000, and (iv) if such payment for a LIBOR Loan is made on any date other than the scheduled last day of the applicable Interest Period, reimbursement by such
Borrower of the resulting losses or expenses incurred by any Lender described in and pursuant to Section 4.4 hereof. 

        (b)  On
each date when the sum of (i) the aggregate outstanding principal amount of all Loans and (ii) the aggregate amount of all Letter of Credit Outstandings
exceeds the Revolving Loan Commitment Amount (as it may be reduced from time to time pursuant to this Agreement), the Borrowers shall make a mandatory prepayment of their respective Loans and, if
necessary, Cash Collateralize all Letter of Credit Outstandings, an aggregate amount equal to such excess. 

        (c)  Concurrently
with the receipt by either Borrower or any of its Subsidiary Guarantors or by Holdings or Parent, of any Net Equity Proceeds, the Borrowers shall make a
mandatory prepayment of the
Loans in an amount equal to 50% of such Net Equity Proceeds, to be applied as set forth in Section 3.1.2;  provided that no such prepayment shall be
required to be made beyond the extent that the amount of Total Funded Debt as reduced by giving effect to such
prepayment would result, on a pro forma basis, in a Total Funded Debt (less Net Equity Proceeds) to EBITDA Ratio of 3.25 to 1.00 or less as of the end of the immediately preceding Fiscal Quarter. 

        (d)  Concurrently
with the receipt by either Borrower or any of its Subsidiary Guarantors or by Holdings or Parent, of any Net Disposition Proceeds, the Borrowers shall
deliver to the Administrative Agent a calculation of the amount of such Net Disposition Proceeds and, to the extent the amount of such Net Disposition Proceeds with respect to any single transaction
or series of related transactions exceeds $50,000 (up to a maximum aggregate amount equal to $250,000 in any Fiscal Year), make a mandatory prepayment of the Loans in an amount equal to 100% of such
Net Disposition Proceeds, to be applied as set forth in Section 3.1.2; provided that no mandatory prepayment on account of such Net Disposition
Proceeds shall be required under this clause if the Borrowers inform the Administrative Agent no later than 30 days following the receipt of any Net Disposition Proceeds of its or its
Subsidiary Guarantor's good faith intention to apply such Net Disposition Proceeds to the acquisition of other assets or property consistent with the business permitted to be conducted pursuant to  Section 8.2.1 (including by way of merger or Investment) within 365 days following the receipt of such Net Disposition Proceeds, with the
amount of such Net Disposition Proceeds unused after such 365 day period being applied to the Loans as set forth in Section 3.1.2. 

34

 

        (e)  Concurrently
with the receipt by either Borrower or any of its Subsidiary Guarantors or by Holdings or Parent, of any Net Casualty Proceeds, the Borrowers shall make a
mandatory prepayment of the Loans in an amount equal to 100% of such Net Casualty Proceeds, to be applied as set forth in Section 3.1.2;  provided that
no mandatory prepayment on account of Net Casualty Proceeds received by either Borrower or its Subsidiary Guarantor's shall be required
under this clause if the Borrowers inform the Administrative Agent no later than 30 days following the occurrence of the Casualty Event resulting in such Net Casualty Proceeds of its or its
Subsidiary Guarantor's good faith intention to apply such Net Casualty Proceeds to the rebuilding or replacement of the damaged, destroyed or condemned assets or property subject to such Casualty
Event or the acquisition of other assets or property consistent with the business permitted to be conducted pursuant to Section 8.2.1 (including
by way of merger or Investment) and in fact uses such Net Casualty Proceeds to rebuild or replace the damaged, destroyed or condemned assets or property subject to such Casualty Event or to acquire
such other property or assets within 365 days following the receipt of such Net Casualty Proceeds, with the amount of such Net Casualty Proceeds unused after such 365 day period being
applied to the Loans as set forth in Section 3.1.2, provided further, however, that at any time when any Event of Default shall have occurred and
be continuing or Net Casualty Proceeds not applied as provided above shall exceed $1,000,000, such Net Casualty Proceeds will be deposited in an account maintained with the Administrative Agent (over
which the Administrative Agent has sole dominion and control) for disbursement at the request of such Borrower to pay for such rebuilding, replacement or acquisition. 

        (f)    No
later than five Business Days following the delivery by the Borrowers of their annual audited financial reports required pursuant to  clause (b) of Section 8.1.1 (beginning with the financial reports delivered in respect of
the Fiscal Year ending December 31, 2002), the Borrowers shall deliver to the
Administrative Agent a calculation of the Excess Cash Flow for the Fiscal Year last ended and, no later than five Business Days following the delivery of such calculation, make or cause to be made a
mandatory prepayment of its Loans in an amount equal to 50% of the Excess Cash Flow (if any) for such Fiscal Year, to be applied as set forth in  Section 3.1.2; provided that no such prepayment shall be required to be made beyond the extent
that the amount of Total Funded Debt as reduced by giving effect to such prepayment would result, on a pro forma basis, in a Total Funded Debt to EBITDA Ratio of less than 3.00 to 1.00 or less as of
the end of the immediately preceding Fiscal Quarter. 

        (g)  Concurrently
with the receipt by either Borrower or any Consolidated Entities, or by Parent or Holdings, of any Net Debt Issuance Proceeds, the Borrowers shall make a
mandatory prepayment of the Loans in an amount equal to 100% of such Net Debt Issuance Proceeds, to be applied as set forth in Section 3.1.2. 

        (h)  Immediately
upon any acceleration of the Stated Maturity Date of any Loans pursuant to Section 9.2 or  Section 9.3, such Borrower shall repay all of its Loans
pursuant to this Agreement, unless, pursuant to  Section 9.3, only a portion of all the Loans is so accelerated (in which case the portion so accelerated shall be so repaid by the applicable
Borrower). 

Each
prepayment of any Loans made pursuant to this Section shall be without premium or penalty, except as may be required by Section 4.4. 

 
 
        SECTION 3.1.2    Application.     Amounts prepaid pursuant to Section 3.1.1 shall be applied as set forth in this Section. 

        (a)  Subject
to clause (b), each prepayment or repayment of the principal of the Loans shall be applied, to the extent
of such prepayment or repayment, first, to the principal amount thereof being maintained as Base Rate Loans, and second, subject to the terms of  Section 4.4, to the principal amount thereof being
maintained as LIBOR Loans. 

35

 

        (b)  Each
prepayment of the Loans made pursuant to clauses (c), (d), (e) and  (g) of Section 3.1.1 shall
result in a corresponding reduction of the Revolving Loan
Commitment in accordance with Section 2.2.2. 

 
 
        SECTION 3.2    Interest Provisions.     Interest on the outstanding principal amount of Loans shall accrue and be
payable in accordance with the terms set forth below. 

 
 
        SECTION 3.2.1    Rates.     Pursuant to an appropriately delivered Borrowing Request or Continuation/Conversion
Notice, each 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 plus the Applicable
Margin; 

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

        (c)  on
that portion maintained as a Swingline Loan, equal to the Swingline Rate applicable thereto. 

All
LIBOR 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 Loan. 

 
 
        SECTION 3.2.2    Post-Maturity Rates.     After the date any principal amount of any Loan or Reimbursement
Obligation is due and payable (whether on the Stated Maturity Date, upon acceleration or
otherwise), or after any other monetary Obligation of either Borrower shall have become due and payable, such 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 (a) in the case of overdue principal on any Loan, the rate of interest that otherwise would be applicable to such Loan  plus 2% per
annum; and (b) in the case of overdue interest, fees, and other monetary Obligations, the Base Rate
plus 2% per annum. 

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

        (a)  on
the Stated Maturity Date therefor; 

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

        (c)  with
respect to Base Rate Loans and Swingline Loans, on each Quarterly Payment Date; 

36

  

        (d)  with
respect to LIBOR Loans, on the last day of each applicable Interest Period (and, if such Interest Period shall exceed three months, on the date occurring on each
three-month interval occurring after the first day of such Interest Period); 

        (e)  with
respect to any Base Rate Loans converted into LIBOR 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 Loans the Stated Maturity Date of which is accelerated pursuant to Section 9.2 or  Section 9.3, immediately upon such
acceleration. 

Interest
accrued on Loans or other monetary Obligations after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon
demand. 

 
 
        SECTION 3.3    Fees.     The Borrowers agree to pay the fees applicable to items set forth below. All such fees
shall be non-refundable. 

 
 
        SECTION 3.3.1    Commitment Fee.     The Borrowers agree to pay to the Administrative Agent for the account of each
Lender, for the period (including any portion thereof when any of its Commitments
are suspended by reason of either Borrower's inability to satisfy any condition of Article VI) commencing on Closing Date and continuing through
the Commitment Termination Date, a commitment fee in an amount per annum equal to 0.50% of such Lender's Percentage of the sum of the average daily unused portion of the Revolving Loan Commitment
Amount. All commitment fees payable pursuant to this Section shall be calculated on a year comprised of 360 days and payable by the Borrowers in arrears on each Quarterly Payment Date,
commencing with the first Quarterly Payment Date, and on the Commitment Termination Date. For purposes of calculating the commitment fee, Letter of Credit Outstandings will be deemed usage of the
Revolving Loan Commitment Amount, but outstanding Swingline Loans shall not. 

 
 
        SECTION 3.3.2    Fee Letter Fees.     The Borrowers agree to pay to the Administrative Agent, for its own account
and for the account of each Lender, as applicable, the fees in the amounts and on the
dates set forth in the Fee Letter. 

 
 
        SECTION 3.3.3    Letter of Credit Fees.     The Borrowers agree to pay to the Administrative Agent, for the
pro rata account of the Issuer and each Lender, a
Letter of Credit fee in an amount equal to the then effective Applicable Margin for Loans maintained as LIBOR Loans, multiplied by the Stated Amount of each such Letter of Credit, such fees being
payable quarterly in arrears on each Quarterly Payment Date following the date of issuance of each Letter of Credit and on the Commitment Termination Date. The Borrowers further agree to pay upon the
date of issuance of each Letter of Credit a facing fee equal to 0.125% of the face amount of such Letter of Credit, along with other customary administrative charges. 

 
 

ARTICLE IV
  CERTAIN LIBOR AND OTHER PROVISIONS    
  

 
 
        SECTION 4.1    LIBOR Lending Unlawful.     If any Lender shall determine (which determination shall, upon notice
thereof to the Borrowers and the Administrative Agent, be conclusive and binding on the
Borrowers) that the introduction of or any change in or in the interpretation of any law makes it unlawful, or any Governmental Authority asserts that it is unlawful, for such Lender to make or
continue any Loan as, or to convert any Loan into, a LIBOR Loan, the obligations of such Lender to make, continue or convert any such LIBOR Loan shall, upon such determination, forthwith be suspended
until such Lender shall notify the Administrative Agent that the circumstances causing such suspension no longer exist, and all outstanding LIBOR Loans payable to such Lender shall 

37

 

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 Administrative Agent shall have determined 

        (a)  Dollar
deposits in the relevant amount and for the relevant Interest Period are not available to it in its relevant market; or 

        (b)  by
reason of circumstances affecting its relevant market, adequate means do not exist for ascertaining the interest rate applicable hereunder to LIBOR Loans; or 

        (c)  that
the Adjusted LIBO Rate for any requested Interest Period with respect to a proposed LIBOR Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Loan; 

then,
upon notice from the Administrative Agent to the Borrowers and the Lenders, 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, LIBOR Loans shall forthwith be suspended until the Administrative
Agent shall notify the Borrowers and the Lenders that the circumstances causing such suspension no longer exist. 

 
 
        SECTION 4.3    Increased LIBOR Loan Costs, etc.     Each Borrower agrees to reimburse each Lender and the Issuer
for any increase in the cost to such Lender or the Issuer of, or any reduction in the amount of any
sum receivable by such Secured Party in respect of, such Secured Party's Commitments and the making of Credit Extensions hereunder (including the making, continuing or maintaining (or of its
obligation to make or continue) any Loans as, or of converting (or of its obligation to convert) any Loans into, LIBOR Loans) that arise in connection with any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in after the Closing Date of, any law or regulation, directive, guideline, decision or request (whether or not having the
force of law) of any Governmental Authority, except for such changes with respect to increased capital costs and Taxes which are governed by Sections 4.5  and 4.6, respectively. Each affected Secured Party shall promptly notify the Administrative Agent and the Borrowers in writing
of the occurrence of any such event, stating the reasons therefor and the additional amount required fully to compensate such Secured Party for such increased cost or reduced amount. Such additional
amounts shall be payable by the Borrowers directly to such Secured Party 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 Borrowers. 

 
 
        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 or continue any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a LIBOR Loan) as a result of 

        (a)  any
conversion or repayment or prepayment (including mandatory prepayments) of the principal amount of any LIBOR Loan on a date other than the scheduled last day of the
Interest Period applicable thereto, whether pursuant to Article III or otherwise; 

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

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

then,
upon the written notice of such Lender to the applicable Borrower (with a copy to the Administrative Agent), such 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 

38

 

Lender for such loss or expense. Such written notice shall, in the absence of manifest error, be conclusive and binding on such Borrower. 

 
 
        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 Governmental Authority affects or would affect the amount of capital required or expected to be maintained by any Secured
Party or any Person controlling such Secured Party, and such Secured Party determines (in good faith but in its sole and absolute discretion) that the rate of return on its or such controlling
Person's capital as a consequence of the Commitments or the Credit Extensions made, or the Letters of Credit participated in, by such Secured Party is reduced to a level below that which such Secured
Party or such controlling Person could have achieved but for the occurrence of any such circumstance, then upon notice from time to time by such Secured Party to the applicable Borrower, such Borrower
shall within five days following receipt of such notice pay directly to such Secured Party additional amounts sufficient to compensate such Secured Party or such controlling Person for such reduction
in rate of return. A statement of such Secured Party as to any such a dditional amount or amounts shall, in the absence of manifest error, be conclusive and binding on such Borrower. In determining
such amount, such Secured Party may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable. 

 
 
        SECTION 4.6    Taxes.     Each Borrower covenants and agrees as follows with respect to Taxes. 

        (a)  Any
and all payments by the Borrowers and each other Obligor under each Loan Document shall be made without setoff, counterclaim or other defense, and free and clear of,
and without deduction or withholding for or on account of, any Taxes. In the event that any Taxes are imposed and required by law to be deducted or withheld from any payment required to be made by the
Borrowers or any Obligor to or on behalf of any Secured Party under any Loan Document, then: 

          (i)  subject
to clause (f), if such Taxes are Non-Excluded Taxes, the amount of such payment shall be
increased as may be necessary so that such payment is made, after withholding or deduction for or on account of such Taxes, in an amount that is not less than the amount provided for in such Loan
Document; and 

        (ii)  the
applicable Borrower shall withhold the full amount of such Taxes from such payment (as increased pursuant to  clause (a)(i)) and shall pay such amount to the Governmental Authority imposing such
Taxes in accordance with applicable law. 

        (b)  In
addition, each Borrower and each other Obligor shall pay all Other Taxes imposed to the relevant Governmental Authority imposing such Other Taxes in accordance with
applicable law. 

        (c)  As
promptly as practicable after the payment of any Taxes or Other Taxes, and in any event within 45 days of any such payment being due, the applicable Borrower
shall furnish to the Administrative Agent a copy of an official receipt (or a certified copy thereof) evidencing the payment of such Taxes or Other Taxes. The Administrative Agent shall make copies,
thereof available to any Lender upon request therefor. 

        (d)  Subject
to clause (f), the Borrowers shall indemnify each Secured Party for any Non-Excluded Taxes and
Other Taxes levied, imposed or assessed on (and whether or not paid directly by) such Secured Party whether or not such Non-Excluded Taxes or Other Taxes are correctly or legally asserted
by the relevant Governmental Authority. Promptly upon having knowledge that any such Non-Excluded Taxes or Other Taxes have been levied, imposed or assessed, and promptly upon notice
thereof by any Secured Party, each Borrower shall pay its portion of such Non-Excluded Taxes or Other Taxes directly to the relevant Governmental Authority (provided that no Secured Party
shall be under any obligation to provide any such notice 

39

 

to the Borrowers). In addition, the Borrowers shall indemnify each Secured Party for any incremental Taxes that may become payable by such Secured Party as a result of any failure of either Borrower
to pay any Taxes when due to the appropriate Governmental Authority or to deliver to the Administrative Agent, pursuant to clause (c),
documentation evidencing the payment of Taxes or Other Taxes. With respect to indemnification for Non-Excluded Taxes and Other Taxes actually paid by any Secured Party or the
indemnification provided in the immediately preceding sentence, such indemnification shall be made within 30 days after the date such Secured Party makes written demand therefor. Each Borrower
acknowledges that any payment made to any Secured Party or to any Governmental Authority in respect of the indemnification obligations of such Borrower provided in this clause shall constitute a
payment in respect of which the provisions of clause (a) and this clause shall apply. 

        (e)  Each
Non-U.S. Lender, on or prior to the date on which such Non-U.S. Lender becomes a Lender hereunder (and from time to time thereafter upon the
request of either Borrower or the Administrative Agent, but only for so long as such non-U.S. Lender is legally entitled to do so), shall deliver to such Borrower and the Administrative
Agent either (i) two duly completed copies of either (x) Internal Revenue Service Form W-8BEN claiming eligibility of the Non-U.S. Lender for benefits of
an income tax treaty to which the United States is a party or (y) Internal Revenue Service Form W-8ECI, or in either case an applicable successor form; or (ii) in the
case of a Non-U.S. Lender that is not legally entitled to deliver either form listed in clause (e)(i), (x) a certificate to
the effect that such Non-U.S. Lender is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of the Code, (B) a
"10 percent shareholder" of either Borrower within the meaning of Section 881(c)(3)(B) of the Code, or (C) a controlled foreign
corporation receiving interest from a related person within the meaning of Section 881(c)(3)(C) of the Code (referred to as an "Exemption
Certificate") and (y) two duly completed copies of Internal Revenue Service Form W-8BEN or applicable successor form. 

        (f)    The
Borrowers shall not be obligated to pay any additional amounts to any Lender pursuant to clause (a)(i), or to
indemnify any Lender pursuant to clause (d), in respect of United States federal withholding Taxes to the extent imposed as a result of
(i) the failure of such Lender to deliver to each Borrower the form or forms and/or an Exemption Certificate, as applicable to such Lender, pursuant to  clause (e), (ii) such form or forms
and/or Exemption Certificate not establishing a complete exemption from U.S. federal withholding tax
or the information or certifications made therein by the Lender being
untrue or inaccurate on the date delivered in any material respect, or (iii) the Lender designating a successor lending office at which it maintains its Loans which has the effect of causing
such Lender to become obligated for tax payments in excess of those in effect immediately prior to such designation; provided that the Borrowers shall be severally and not jointly obligated to pay
additional amounts to any such Lender pursuant to clause (a)(i), and to indemnify any such Lender pursuant to  clause (d), in respect of United
States federal withholding Taxes if (i) any such failure to deliver a form or forms or an Exemption
Certificate or the failure of such form or forms or Exemption Certificate to establish a complete exemption from U.S. federal withholding tax or inaccuracy or untruth contained therein resulted from a
change in any applicable statute, treaty, regulation or other applicable law or any interpretation of any of the foregoing occurring after the Closing Date, which change rendered such Lender no longer
legally entitled to deliver such form or forms or Exemption Certificate or otherwise ineligible for a complete exemption from U.S. federal withholding tax, or rendered the information or
certifications made in such form or forms or Exemption Certificate untrue or inaccurate in a material respect, (ii) the redesignation of the Lender's lending office was made at the request of
either Borrower or (iii) the obligation to pay any additional amounts to any such Lender pursuant to clause (a)(i) or to indemnify any
such Lender pursuant to clause (d) is with respect to an assignee Lender that becomes a Lender as a result of an assignment made at the request
of either Borrower. 

40

 

 
 
        SECTION 4.7    Payments, Computations, etc.     Unless otherwise expressly provided in a Loan Document, all
payments by the Borrowers pursuant to each Loan Document shall be made by the Borrowers to the
Administrative Agent for the pro rata account of the Secured Parties entitled to receive such payment. All payments shall be made without setoff, deduction or counterclaim not later than
11:00 a.m. on the date due in same day or immediately available funds to such account as the Administrative Agent shall specify from time to time by notice to the applicable Borrower;  provided that
failure by the Administrative Agent to provide such notice shall not excuse any required payments. Funds received after that time shall be
deemed to have been received by the Administrative Agent on the next succeeding Business Day. The Administrative Agent shall promptly remit in same day funds to each Secured Party its share, if any,
of such payments received by the Administrative Agent for the account of such Secured Party. All interest (including interest on LIBOR Loans) 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 (calculated at other than the Federal Funds Rate), 365 days or, if appropriate, 366 days). Payments due on other than a Business Day shall (except as
otherwise required by clause (c) of the definition of "Interest Period") be made on the next
succeeding Business Day and such extension of time shall be included in computing interest and fees in connection with that payment. 

 
 
        SECTION 4.8    Sharing of Payments.     If any Secured Party shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on account of any Credit
Extension or Reimbursement Obligation (other than pursuant to the terms of Sections 4.3, 4.4,  4.5 or
4.6) in excess of its pro rata share of payments
obtained by all Secured Parties, such Secured Party shall purchase from the other Secured Parties such participations in Credit Extensions made by them as shall be necessary to cause such purchasing
Secured Party to share the excess payment or other recovery ratably (to the extent such other Secured Parties were entitled to receive a portion of such payment or recovery) with each of them;  provided
that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Secured Party, the purchase
shall be rescinded and each Secured Party which has sold a participation to the purchasing Secured Party shall repay to the purchasing Secured Party the
purchase price to the ratable extent of such recovery together with an amount equal to such selling Secured Party's ratable share (according to the proportion of (a) the amount of such selling
Secured Party's required repayment to the purchasing Secured Party to (b) total amount so recovered from the purchasing Secured Party) of any
interest or other amount paid or payable by the purchasing Secured Party in respect of the total amount so recovered. Each Borrower agrees that any Secured Party purchasing a participation from
another Secured Party 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 Secured Party were the direct creditor of such Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar law any Secured Party receives a secured claim in lieu of a setoff to which this Section applies, such Secured Party
shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Secured Parties entitled under this Section to share in the
benefits of any recovery on such secured claim. 

 
 
        SECTION 4.9    Setoff.     Each Secured Party shall, upon the occurrence and during the continuance of any 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) each Borrower hereby grants to each Secured Party a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of such Borrower then or thereafter maintained with such Secured Party; provided that any such appropriation and
application shall be subject to the provisions of Section 4.8. Each Secured Party agrees promptly to notify the applicable Borrower and the
Administrative Agent after any such setoff and application made by such Secured Party; provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Secured Party 

41

 

under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Secured Party may have. 

 
 

ARTICLE V
  COLLATERAL AND GUARANTIES    
  

 
 
        SECTION 5.1    Collateral.     The Obligations shall be secured by a first-priority, perfected security interest in
the following (collectively, the
"Collateral"): 

        (a)  All
of the US Borrower's tangible and intangible assets, including without limitation (i) all Intercompany Notes, (ii) all investment property (including
without limitation its Equity Interests in the Consolidated Entities, other than Limited Entities), (iii) all equipment, (iv) all inventory, (v) all accounts, contracts, contract
rights (including without limitation payment rights under any management contracts), chattel paper, documents, instruments and general intangibles, (vi) all Intellectual Property Collateral,
and (vii) the Collateral Account, as evidenced by the US Borrower Pledge and Security
Agreement, as amended (capitalized terms contained in this Section 5.1(a) not otherwise defined in this Agreement shall have such meaning as set
forth in the US Borrower Pledge and Security Agreement); 

        (b)  All
of the UK Borrower's tangible and intangible assets, including without limitation (i) all Intercompany Notes, (ii) all investment property (including
without limitation its Equity Interests in the Consolidated Entities, other than Limited Entities), (iii) all equipment, (iv) all inventory, (v) all accounts, contracts, contract
rights (including without limitation payment rights under any management contracts), chattel paper, documents, instruments and general intangibles, (vi) all Intellectual Property Collateral,
and (vii) the Collateral Account, as evidenced by the UK Borrower Pledge and Security Agreement, as amended (capitalized terms contained in this Section 5.1(b)  not otherwise defined in this
Agreement shall have such meaning as set forth in the UK Borrower Pledge and Security Agreement); 

        (c)  All
of the US Subsidiary Guarantors' tangible and intangible assets, including without limitation (i) all Intercompany Notes, (ii) all investment property
(including without limitation its Equity Interests in the Consolidated Entities, other than Limited Entities), (iii) all equipment, (iv) all inventory, (v) all accounts,
contracts, contract rights (including without limitation payment rights under any management contracts), chattel paper, documents, instruments and general intangibles, (vi) all Intellectual
Property Collateral, and (vii) the Collateral Account, as evidenced by the US Subsidiary Pledge and Security Agreement, as amended (capitalized terms contained in this  Section 5.1(c) not
otherwise defined in this Agreement shall have such meaning as set forth in the US Subsidiary Pledge and Security Agreement); 

        (d)  All
of the Foreign Subsidiary Guarantors' tangible and intangible assets, including without limitation (i) all Intercompany Notes, (ii) all investment
property (including without limitation its Equity Interests in the Consolidated Entities, other than Limited Entities), (iii) all equipment, (iv) all inventory, (v) all accounts,
contracts, contract rights (including without limitation payment rights under any management contracts), chattel paper, documents, instruments and general intangibles, (vi) all Intellectual
Property Collateral, and (vii) the Collateral Account, as evidenced by the Foreign Subsidiary Pledge and Security Agreements, as amended (capitalized terms contained in this  Section 5.1(d) not
otherwise defined in this Agreement shall have such meaning as set forth in the Foreign Subsidiary Pledge and Security
Agreements); 

        (e)  All
investment property of the Parent, including without limitation its Equity Interests in the Consolidated Entities (other than Limited Entities), as evidenced by the
Parent Guaranty and Pledge Agreement, as amended; 

42

 

        (f)    All
investment property of Holdings, including without limitation its Equity Interests in the Consolidated Entities (other than Limited Entities), as evidenced by the
Holdings Guaranty and Pledge Agreement, as amended; 

        (g)  All
investment property of USP International, including without limitation its Equity Interests in the Consolidated Entities (other than Limited Entities), as evidenced
by the USP International Guaranty and Pledge Agreement, as amended; provided that only 65% of the Equity Interests in the UK Borrower pledged thereunder will secure the Obligations of the US Borrower
or any Obligor incorporated or organized under the laws of the United States or a State thereof; 

        (h)  All
investment property of USP Europe, including without limitation its Equity Interests in the Consolidated Entities (other than Limited Entities), as evidenced by the
USP Europe Guaranty and Pledge Agreement; provided that the pledge of the Equity Interests of USP Europe in the USP Europe Subsidiaries will secure only the Obligations of the UK Borrower; 

        (i)    Certain
real property, improvements and equipment owned by Foreign Subsidiary Guarantors in Spain, as described in more detail in and evidenced by the Foreign Subsidiary
Mortgages, as amended; and 

        (j)    Such
other tangible or intangible assets of the Borrowers, US Subsidiaries, Foreign Subsidiaries, Parent, Holdings, USP International or the Consolidated Entities as the
Administrative Agent, on behalf of the Required Lenders, may reasonably require. 

 
 
        SECTION 5.2    Guaranties.     The Obligations shall be guaranteed as set forth below. 

 
 
        SECTION 5.2.1    Guaranties of Obligations.     The Obligations shall be guaranteed by the following: 

        (a)  The
Parent, as evidenced by the Parent Guaranty and Pledge Agreement; 

        (b)  Holdings,
as evidenced by the Holdings Guaranty and Pledge Agreement; 

        (c)  USP
International, as evidenced by the USP International Guaranty and Pledge Agreement; and 

        (d)  The
US Subsidiary Guarantors, as evidenced by the US Subsidiary Guaranty. 

 
 
        SECTION 5.2.2    Guaranties of the Obligations of UK Borrower.     The Obligations of the UK Borrower shall be
guaranteed by the following: 

        (a)  USP
Europe, as evidenced by the USP Europe Guaranty and Pledge Agreement; and 

        (b)  Foreign
Subsidiary Guarantors, as evidenced by the Foreign Subsidiary Guaranties. 

 
 
        SECTION 5.3    Release of Certain Collateral.     In the event a US Subsidiary Guarantor desires to (a)
 transfer all or part of its Equity Interest in a Consolidated Entity or Non-Consolidated
Entity (the "Transferred Entity Interest") to a Hospital Joint Venture Entity or its Subsidiary wherein the Hospital Joint Venture Entity or its
Subsidiary, as applicable, would become a Limited Entity and (b) receive a release of the pledge of such Transferred Entity Interest pursuant to the US Subsidiary Pledge and Security Agreement,
Borrowers shall give Administration Agent written notification of such intent and request of release. Administrative Agent may, in its sole and absolute discretion and, absent an Event of Default,
without the consent or approval of any other Lender, grant such release of Transferred Entity Interest owned by the US Subsidiary Guarantor. Borrowers will not permit the transfer of any Transferred
Entity Interest by any US Subsidiary Guarantor unless and until Administrative Agent delivers a written release of such pledge by the applicable US Subsidiary Guarantor under the US Subsidiary Pledge
and Security Agreement. As a condition of any written release by Administrative Agent, Borrowers will deliver to Administrative Agent an acknowledgement affirming the inclusion of the Hospital Joint
Venture Entity or its Subsidiary, as applicable, receiving the Transferred Equity 

43

 

Interests as a Limited Entity and reaffirming the representation and warranty of Borrowers set forth in Section 7.17 herein. 

 
 

ARTICLE VI
  CONDITIONS TO EFFECTIVENESS AND TO FUTURE CREDIT EXTENSIONS    
  

 
 
        SECTION 6.1    Effectiveness.     The amendment and restatement of the Existing Credit Agreement and the
obligations of the Lenders to make Credit Extensions under this Agreement shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set forth in this Section 6.1.

 
 
        SECTION 6.1.1    Resolutions, etc.     The Administrative Agent shall have received from each Borrower, Holdings,
USP International, USP Europe and Parent, as applicable, a certificate, dated the
Closing Date, duly executed and delivered by such Obligor's Secretary or Assistant Secretary, managing member or general partner, as applicable, as to 

        (a)  resolutions
of each such Obligor's Board of Directors (or other managing body, in the case of other than a corporation) then in full force and effect authorizing the
execution, delivery and performance of each Loan Document to be executed by such Obligor and the transactions contemplated hereby and thereby; 

        (b)  the
incumbency and signatures of those of its officers, managing member or general partner, as applicable, authorized to act with respect to each Loan Document to be
executed by such Obligor; and 

        (c)  the
full force and validity of each Organic Document of such Obligor and copies thereof, 

upon
which certificates each Secured Party may conclusively rely until it shall have received a further certificate of the Secretary, Assistant Secretary, managing member or general partner, as
applicable, of any such Obligor canceling or amending the prior certificate of such Obligor. 

 
 
        SECTION 6.1.2    Delivery of Notes.     The Administrative Agent shall have received, for the account of each
Lender that has requested a Revolving Note, such Lender's Revolving Notes (and Swingline
Note, as applicable), duly executed and delivered by an Authorized Officer of each Borrower. 

 
 
        SECTION 6.1.3    Solvency, etc.     The Administrative Agent shall have received a solvency certificate, dated the
Closing Date, duly executed and delivered by the chief financial or accounting
Authorized Officer of each Borrower, in form and substance satisfactory to the Administrative Agent. 

 
 
        SECTION 6.1.4    Opinions of Counsel.     The Administrative Agent shall have received opinions, dated the Closing
Date and addressed to the Administrative Agent and all Lenders, from 

        (a)  Nossaman,
Guthner, Knox & Elliott, LLP, general counsel to the Obligors, in form and substance satisfactory to the Administrative Agent; and 

        (b)  Vinson &
Elkins, L.L.P., New York Counsel to the Obligors and UK Counsel to the UK Borrower, in form and substance satisfactory to the Administrative Agent. 

 
 
        SECTION 6.1.5    US Borrower Pledge and Security Agreement.     The Administrative Agent shall have received the US
Borrower Pledge and Security Agreement, duly executed and delivered by an Authorized Officer of the US
Borrower, together with: 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests (other than Limited Entities) owned by the US Borrower in its Subsidiaries, which certificates
in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests, confirmation and evidence satisfactory to
the Administrative Agent that the security interest therein has been perfected in accordance with 

44

 

Article 9 of the UCC and all laws otherwise applicable to the perfection of the pledge of such Equity Interests; 

        (b)  all
Intercompany Notes (as defined in the US Borrower Pledge and Security Agreement), if any, evidencing Indebtedness payable to the US Borrower duly endorsed to the
order of the Administrative Agent, together with Filing Statements (or similar instruments) in respect of such Intercompany Notes executed by the US Borrower to be filed in such jurisdictions as the
Administrative Agent may reasonably request; and 

        (c)  such
amendments or supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the US Borrower thereunder. 

 
 
        SECTION 6.1.6    Affirmation and Acknowledgement.     The Administrative Agent shall have received the Affirmation
and Acknowledgement, dated as of the Closing Date, duly executed and delivered by an Authorized
Officer of each Obligor. 

 
 
        SECTION 6.1.7    US Subsidiary Guaranty.     The Administrative Agent shall have received the US Subsidiary
Guaranty, duly executed and delivered by an Authorized Officer of each US Subsidiary Guarantor,
along with such amendments and supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the existing US Subsidiary Guarantors thereunder and of the
obligations of each new US Subsidiary Guarantor formed since the original execution thereof. 

 
 
        SECTION 6.1.8    US Subsidiary Pledge and Security Agreement.     The Administrative Agent shall have received the
US Subsidiary Pledge and Security Agreement, duly executed and delivered by an Authorized Officer of each US
Subsidiary Guarantor, together with: 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests owned by such Subsidiary Guarantor in its Subsidiaries (other than Limited Entities), which
certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests, confirmation and evidence
satisfactory to the Administrative Agent that
the security interest therein has been perfected in accordance with Article 9 of the UCC and all laws otherwise applicable to the perfection of the pledge of such Equity Interests; 

        (b)  all
Intercompany Notes (as defined in the US Subsidiary Pledge and Security Agreement), if any, evidencing Indebtedness payable to such Subsidiary Guarantor duly
endorsed to the order of the Administrative Agent, together with Filing Statements (or similar instruments) in respect of such Intercompany Notes naming such Subsidiary Guarantor as a debtor to be
filed in such jurisdictions as the Administrative Agent may reasonably request; 

        (c)  Filing
Statements naming each such Subsidiary Guarantor as a debtor and the Administrative Agent as the secured party, or other similar instruments or documents to be
filed under the UCC of all jurisdictions as may be necessary or, in the opinion of the Administrative Agent, desirable to perfect the security interests of the Administrative Agent pursuant to the US
Subsidiary Pledge and Security Agreement; and 

        (d)  such
amendments and supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the existing US Subsidiary Guarantors
thereunder and each new US Subsidiary Guarantor formed since the original execution thereof. 

45

 

 
 
        SECTION 6.1.9    UK Borrower Pledge and Security Agreement.     The Administrative Agent shall have received the UK
Borrower Pledge and Security Agreement, duly executed and delivered by an Authorized Officer of the UK
Borrower, together with: 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests owned by the UK Borrower in its Subsidiaries (other than Global Healthcare and any other
Limited Entity), which certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests,
confirmation and evidence satisfactory to the Administrative Agent that the security interest therein has been perfected in accordance with all laws applicable to the perfection of the pledge of such
Equity Interests; 

        (b)  all
Intercompany Notes (as defined in the UK Borrower Pledge and Security Agreement), if any, evidencing Indebtedness payable to the UK Borrower duly endorsed to the
order of the Administrative Agent, together with Filing Statements (or similar instruments) in respect of such Intercompany Notes naming the UK Borrower as a debtor to be filed in such jurisdictions
as the Administrative Agent may reasonably request; and 

        (c)  executed
Foreign Pledge Agreements required in connection with the foregoing or other similar instruments or documents to be filed in the applicable jurisdictions as may
be necessary or, in the opinion of the Administrative Agent, desirable to perfect the security interests of the Administrative Agent pursuant to the UK Borrower Pledge and Security Agreement, together
with copies of all filings required to be delivered in connection therewith; and 

        (d)  such
amendments or supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the UK Borrower thereunder. 

46

  

 
 
        SECTION 6.1.10    Parent Guaranty and Pledge Agreement.     The Administrative Agent shall have received the Parent
Guaranty and Pledge Agreement, duly executed and delivered by an Authorized Officer of Parent, together
with 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests (other than Limited Entities) owned by the Parent in its Subsidiaries, which certificates in
each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests, confirmation and evidence satisfactory to the
Administrative Agent that the security interest therein has been perfected in accordance with Article 9 of the UCC and all laws otherwise applicable to the perfection of the pledge; of such
Equity Interests; and 

        (b)  such
amendments or supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the Parent thereunder. 

 
 
        SECTION 6.1.11    Holdings Guaranty and Pledge Agreement.     The Administrative Agent shall have received the
Holdings Guaranty and Pledge Agreement, duly executed and delivered by an Authorized Officer of Holdings,
together with 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests (other than Limited Entities) owned by Holdings in its Subsidiaries, which certificates in
each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests, confirmation and evidence satisfactory to the
Administrative Agent that the security interest therein has been perfected in accordance with Article 9 of the UCC and all laws otherwise applicable to the perfection of the pledge; of such
Equity Interests; and 

        (b)  such
amendments or supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of Holdings thereunder. 

 
 
        SECTION 6.1.12    USP International Guaranty and Pledge Agreement.     The Administrative Agent shall have received
the USP International Guaranty and Pledge Agreement, duly executed and delivered by an Authorized Officer of USP
International, together with 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests of the UK Borrower, which certificates in each case shall be accompanied by undated
instruments of transfer duly executed in blank; 

        (b)  executed
Foreign Pledge Agreements or other similar instruments or documents to be filed in the applicable jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interests of the Administrative Agent pursuant to the USP International Guaranty and Pledge Agreement; and 

        (c)  such
amendments or supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of USP International thereunder. 

 
 
        SECTION 6.1.13    Foreign Subsidiary Guaranty.     The Administrative Agent shall have received the Foreign
Subsidiary Guaranty, duly executed and delivered by an Authorized Officer of each Foreign Subsidiary
Guarantor, along with such amendments and supplements as may be necessary to evidence the execution of this Agreement and the continuing obligations of the existing Foreign Subsidiary thereunder and
of the obligations of each new Foreign Subsidiary Guarantors formed since the original execution thereof. 

 
 
        SECTION 6.1.14    Lien Perfection.     The Administrative Agent and its counsel shall be satisfied that
(i) the Lien granted to the Administrative Agent, for the benefit of the Secured Parties,
in the Collateral is a first priority (or local equivalent thereof) security interest, and (ii) no Lien exists on any 

47

 

of the Collateral other than the Lien created in favor of the Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan Document. 

 
 
        SECTION 6.1.15    Assignments.     The Administrative Agent shall have received duly executed assignments and such
other documents as reasonably required by the Administrative Agent to reflect the
assignment to the Administrative Agent of the Existing Loans, the Existing Credit Agreement and all loan documents executed in connection therewith. 

 
 
        SECTION 6.1.16    Existing Loan Letters, etc.     The Administrative Agent shall have received duly executed
letters, in form and substance satisfactory to Administrative Agent, executed by each Existing Lender
setting forth the current principal amount of each Existing Loan held by it together with all accrued and unpaid interest and any outstanding fees owed to it under the Existing Credit Agreement,
together with any other documents reasonably required by Administrative Agent. 

 
 
        SECTION 6.1.17    Certificates of Insurance.     The Administrative Agent shall have received delivery of
certificates of insurance issued on behalf of insurers of the Borrowers and all Subsidiary Guarantors,
describing in reasonable detail the types and
amounts of insurance (property and liability) maintained by the Borrowers and all Subsidiary Guarantors, naming Administrative Agent as additional insured and loss payee, as appropriate. 

 
 
        SECTION 6.1.18    Evidence of Equity Injection.     The Administrative Agent shall have received evidence
satisfactory to Administrative Agent that Parent shall have received a minimum of $52,130,000 in Gross
Equity Proceeds from the issuance of additional common stock in connection with the 2002 Follow-on Offering and that a portion of such proceeds have been applied to payment of all
outstanding Existing Loans. 

 
 
        SECTION 6.1.19    Due Diligence.     The Administrative Agent shall have received delivery of lien searches,
landlord waivers, bailee letters, control agreements, title insurance policies, real
property surveys, flood insurance certification, appraisals, Phase I environmental reports, and such other due diligence as Administrative Agent may reasonably require with respect to the Collateral,
each in form and substance satisfactory to Administrative Agent. 

 
 
        SECTION 6.1.20    Minimum Total Funded Debt to EBITDA Ratio.     The Administrative Agent shall have received
evidence satisfactory to Administrative Agent that, as of the Closing Date, the ratio of (a) the sum of
(i) Total Funded Debt measured on the Closing Date less (ii) Excess Equity Proceeds to (b) $68,910,000 does not exceed 3.25 to
1.00. 

 
 
        SECTION 6.1.21    Closing Fees, Expenses, etc.     The Administrative 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 pursuant to Section 3.3 and, if then invoiced, Section 12.3.

 
 
        SECTION 6.2    Credit Extensions.     The obligation of each Lender and the Issuer to make any Credit Extension
shall be subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 6.2.

 
 
        SECTION 6.2.1    Compliance with Warranties, No Default, etc.     Both before and after giving effect to any Credit
Extension (but, if any Default of the nature referred to in  Section 9.1.5 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 each Loan Document shall, in each case, be true and correct with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date); 

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

48

 

        (c)  since
the date of delivery of the most recent financial statements in accordance with the terms of this Agreement, there shall have been no change that has had or could
be reasonably expected to have a Material Adverse Effect on the Borrowers or any Subsidiary Guarantor; and 

        (d)  the
Credit Extension would be a permitted Incurrence of Indebtedness (as such terms are defined in the Holdings Notes Indenture) under the Holdings Notes Indenture. 

 
 
        SECTION 6.2.2    Credit Extension Request, etc.     The Administrative Agent shall have received a Borrowing
Request or Notice of Swingline Borrowing if Loans are being requested, or an Issuance Request if a Letter
of Credit is being requested or extended. Each of the delivery of a Borrowing Request or Notice of Swingline Borrowing or Issuance Request and the acceptance by either Borrower of the proceeds of such
Credit Extension shall constitute a representation and warranty by such Borrower that on the date of such Credit Extension (both immediately before and after giving effect to such Credit Extension and
the application of the proceeds thereof) the statements made in Section 6.2.1 are true and correct in all material respects. 

 
 
        SECTION 6.2.3    Satisfactory Legal Form.     All documents executed or submitted pursuant hereto by or on behalf
of any Obligor shall be reasonably satisfactory in form and substance to the Administrative
Agent and its counsel, and the Administrative Agent and its counsel shall have received all information, approvals, opinions, documents or instruments as the Administrative Agent or its counsel may
reasonably request. 

 
 

ARTICLE VII
  REPRESENTATIONS AND WARRANTIES    
  

        In order to induce the Lenders, the Issuer and the Administrative Agent to enter into this Agreement and to make Credit Extensions hereunder, each Borrower
represents and warrants to each Secured Party as set forth in this Article. 

 
 
        SECTION 7.1    Organization, etc.     Each Obligor is validly organized and existing and in good standing under the
laws of the state or jurisdiction of its incorporation or organization, is duly
qualified to do business and is in good standing as a foreign entity in each jurisdiction where the nature of its business requires such qualification (except where the failure to so qualify would
not, individually or in the aggregate, have a Material Adverse Effect), and has full power and authority and holds all requisite governmental licenses, permits and other approvals to enter into and
perform its Obligations under each Loan Document to which it is a party, to own and hold under lease its property and to conduct its business substantially as currently conducted by it. 

 
 
        SECTION 7.2    Due Authorization, Non-Contravention, etc.     The execution, delivery and performance by each
Obligor of each Loan Document executed or to be executed by it are in each case within such Person's powers, have
been duly authorized by all necessary action, and do not 

        (a)  contravene
or result in a default under any (i) Obligor's Organic Documents, (ii) contractual restriction binding on or affecting any Obligor,
(iii) court decree or order binding on or affecting any Obligor, or (iv) law or governmental regulation binding on or affecting any Obligor; or 

        (b)  result
in, or require the creation or imposition of, any Lien on any Obligor's properties (except as permitted by this Agreement). 

 
 
        SECTION 7.3    Government Approval, Regulation, etc.     No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or other Person (other than those that have been, or
on the Closing Date will be, duly obtained or made and which are in full force and effect, and other than those filings required to be made after the Closing Date) is required for the delivery or
performance by any Obligor of any Loan Document to which it is a party. Neither Borrower 

49

 

nor any of their Consolidated Entities is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended. 

 
 
        SECTION 7.4    Validity, etc.     Each Loan Document to which any Obligor is a party constitutes the legal, valid
and binding obligations of such Obligor, enforceable against such Obligor in
accordance with their respective terms (except, in any case, as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights
generally and by principles of equity). 

 
 
        SECTION 7.5    Financial Information.     The financial statements of the Borrowers and their Consolidated Entities
furnished (a) in accordance with  clause (a) of Section 5.1.12 of the Original Credit Agreement and (b) in accordance
with Section 7.1.1 of the Existing Credit Agreement were prepared in accordance with GAAP consistently applied, and present fairly the
consolidated financial condition of the Persons covered thereby as of all dates thereof and the result of their operations for periods then ended. 

 
 
        SECTION 7.6    No Material Adverse Change.     There has been no material adverse change in the condition
(financial or otherwise), results of operations, assets, business, properties or prospects of either
Borrower or the Borrowers and their Consolidated Entities, taken as a whole, since December 31, 2001. 

 
 
        SECTION 7.7    Litigation, Labor Controversies, etc.     There is no pending or, to the knowledge of the Borrowers
or any of their Consolidated Entities, threatened litigation, action, proceeding or labor controversy 

        (a)  except
as disclosed in Item 7.7 of the Disclosure Schedule, affecting any Obligor or any of its properties, businesses,
assets or revenues, which could reasonably be expected to have a Material Adverse Effect, and no adverse development has occurred in any labor controversy, litigation, arbitration or governmental
investigation or proceeding disclosed in Item 7.7, or 

        (b)  which
purports to affect the legality, validity or enforceability of any Loan Document. 

 
 
        SECTION 7.8    Subsidiaries.     Neither Borrower has any Subsidiaries, except those Subsidiaries which are
identified in Item 7.8 of the
Disclosure Schedule, or which are permitted to have been organized or acquired in accordance with Sections 8.2.6 or 8.2.11. Item
7.8 of the Disclosure Schedule sets forth each Consolidated Entity, Non-Consolidated Entity, Operating Entity and Limited Entity. 

 
 
        SECTION 7.9    Ownership of Properties.     Each Borrower and each of its Consolidated Entities owns (a) in
the case of owned real property, good fee title to, and (b) in the case of owned
personal property, good and valid title to, or, (c) in the case of leased real or personal property, valid and enforceable leasehold interests (as the case may be) in, all of its properties and
assets, real and personal, tangible and intangible, of any nature whatsoever, free and clear in each case of all Liens or claims, except for Liens permitted pursuant to  Section 8.2.3. 

 
 
        SECTION 7.10    Taxes.     Each Borrower and each of its Consolidated Entities has filed all tax returns and
reports required by law to have been filed by it and has paid all material Taxes
thereby shown to be due and owing, except any such Taxes 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 7.11    Pension and Welfare Plans.     Except as disclosed in Item
7.11 of the Disclosure Schedule, during the twelve-consecutive-month period prior to
the Closing Date and prior to the date of any Credit Extension 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 

50

 

under Section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by either Borrower or any member
of the Controlled Group of any material liability, fine or penalty. Except as disclosed in Item 7.11 of the Disclosure Schedule, neither 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. 

 
 
        SECTION 7.12    Environmental Warranties.     Except as set forth in Item 7.12
of the Disclosure Schedule: 

        (a)  all
facilities and property (including underlying groundwater) owned or leased by either Borrower or any of its Consolidated Entities have been, and continue to be,
owned or leased by such Borrower and its Consolidated Entities in material compliance with all Environmental Laws; 

        (b)  there
have been no past, and there are no pending or threatened (i) claims, complaints, notices or requests for information received by either Borrower or any of
its Consolidated Entities with respect to any alleged violation of any Environmental Law, or (ii) complaints, notices or inquiries to the Borrowers or any of their Consolidated Entities
regarding potential 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 either Borrower or any of its Consolidated Entities
that have, or could reasonably be expected to have, a Material Adverse Effect; 

        (d)  each
Borrower and its Consolidated Entities have been issued and are in material compliance with all permits, certificates, approvals, licenses and other authorizations
relating to environmental matters; 

        (e)  no
property now or previously owned or leased by either Borrower or any of its Consolidated Entities 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 either
Borrower or any of its Consolidated Entities that, singly or in the aggregate, have, or could reasonably be expected to have, a Material Adverse Effect; 

        (g)  neither
Borrower nor any Consolidated Entity 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 may lead to material claims against such Borrower or such Consolidated Entity for any remedial work, damage to natural resources or personal injury, including claims under
CERCLA; 

        (h)  there
are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by either Borrower or any Consolidated Entity that,
singly or in the aggregate, have, or could reasonably be expected to have, a Material Adverse Effect; and 

        (i)    no
conditions exist at, on or under any property now or previously owned or leased by either Borrower which, with the passage of time, or the giving of notice or both,
would give rise to material liability under any Environmental Law. 

 
 
        SECTION 7.13    Accuracy of Information.     The factual information heretofore or contemporaneously furnished in
writing to the Administrative Agent (or any predecessors thereto) by 

51

 

or on behalf of any Obligor, taken as a whole, in connection with any Loan Document or any transaction contemplated hereby does not contain any untrue statement of a material fact, or omits to state
any fact necessary to make any material statement contained therein not misleading in any material respect, and no other factual information hereafter furnished in connection with any Loan Document by
or on behalf of any Obligor to any Secured Party will contain any untrue statement of a material fact or will omit to state any fact necessary to make any material information contained therein not
misleading in any material respect on the date as of which such information is dated or certified. 

 
 
        SECTION 7.14    Regulations T, U and X.     No Obligor is engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock, and no proceeds of any Credit Extensions will be
used to purchase or carry margin stock or otherwise for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulations T, U or X. Terms for which meanings are provided in F.R.S.
Board Regulations 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 7.15    Absence of Any Undisclosed Liabilities.     As of the Closing Date, there are no material
liabilities of any Obligor of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable
or otherwise, and there is no existing condition, situation or set of circumstances which could be expected to result in such a liability, other than those liabilities provided for or disclosed in the
most recently delivered financial statements or those liabilities that have been disclosed to the Administrative Agent prior to the Closing Date. 

 
 
        SECTION 7.16    Issuance of Subordinated Debt Status of Obligations as Senior Indebtedness, etc.     The Borrowers
and their Consolidated Entities, as applicable, have the power and authority to incur the Subordinated Debt as provided for under the Sub Debt
Documents applicable thereto and have duly authorized, executed and delivered the Sub Debt Documents applicable to such Subordinated Debt. The Borrowers and their Consolidated Entities, as applicable,
have issued, pursuant to due authorization, the Subordinated Debt under the applicable Sub Debt Documents, and such Sub Debt Documents constitute the legal, valid and binding obligations of the
Borrowers and their Consolidated Entities, as applicable, enforceable against the Borrowers and their Consolidated Entities, as applicable, in accordance with their terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and by principles of equity). The subordination provisions of
the Subordinated Debt contained in the Sub Debt Documents
are enforceable against the holders of the Subordinated Debt by the holder of any "Designated Senior Indebtedness" or similar term referring to the
Obligations (as defined in the Sub Debt Documents). All Obligations, including those to pay principal of and interest (including post-petition interest, whether or not allowed as a claim
under bankruptcy or similar laws) on the Loans and Reimbursement Obligations, and fees and expenses in connection therewith, constitute "Designated Senior
Indebtedness" or similar term relating to the Obligations (as defined in the Sub Debt Documents) and all such Obligations are entitled to the benefits of the subordination
created by the Sub Debt Documents. The Borrowers acknowledge that the Administrative Agent, each Lender and the Issuer is entering into this Agreement and is extending its Commitments in reliance upon
the subordination provisions of the Sub Debt Documents. 

 
 
        SECTION 7.17    Limited Entities.     Each holder of Equity Interests of each Limited Entity (other than any
Obligor) is prohibited by the formation or governing documentation of such Limited Entity
from pledging any Equity Interests of such Limited Entity, and no such holder has consented to the pledge by any Obligor of its Equity Interests in such Limited Entity. 

 
 
        SECTION 7.18    Collateral Documentation.     No Obligor has acquired or obtained an interest in any Intellectual
Property (as such term is defined in the Pledge Agreement) which would require under the terms
of the Pledge Agreement the execution of a Patent Security Agreement, a Trademark 

52

 

Security Agreement or a Copyright Security Agreement or any other document required to acknowledge or register or perfect Administrative Agent's interest in any part of such Intellectual Property. 

 
 
        SECTION 7.19    Foreign Subsidiary Guarantor Real Property.     Except as disclosed in Item
7.19 of the Disclosure Schedule, no Foreign Subsidiary Guarantor holds title or
otherwise owns any real property. 

 
 

ARTICLE VIII
  COVENANTS    
  

 
 
        SECTION 8.1    Affirmative Covenants.     Each Borrower agrees with each Lender, the Issuer and the Administrative
Agent that until the Termination Date has occurred, each Borrower will, and will cause
its Consolidated Entities to, perform or cause to be performed the obligations set forth below. 

 
 
        SECTION 8.1.1    Financial Information, Reports, Notices, etc.     The Borrowers will furnish to the Administrative
Agent, for distribution to each Lender, 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 Fiscal Quarter of each Fiscal Year, (i) unaudited consolidated and consolidating
balance sheets of the Borrowers and their Consolidated Entities as of the end of such Fiscal Quarter and consolidated and consolidating statements of income and cash flow of the Borrowers and their
Consolidated Entities 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, and including (in each case), in
comparative form the figures for the corresponding Fiscal Quarter in, and year to date portion of, the immediately preceding Fiscal Year, and (ii) unaudited consolidated and consolidating
balance sheets of Parent and its Subsidiaries as of the end of such Fiscal Quarter and consolidated and consolidating statements of income and cash flow of Parent 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, and including (in each case), in comparative form the figures for the
corresponding Fiscal Quarter in, and year to date portion of, the immediately preceding Fiscal Year, in the case of each of clauses (i) and  (ii) certified as presenting fairly the consolidated and consolidating financial condition of the Persons covered thereby by the chief financial
or accounting Authorized Officer of each Borrower; 

        (b)  as
soon as available and in any event within 90 days after the end of each Fiscal Year, (i) a copy of the consolidated and consolidating balance sheet of
the Borrowers and their Consolidated Entities, and the related consolidated and consolidating statements of income and cash flow of the Borrowers and their Consolidated Entities for such Fiscal Year,
setting forth in comparative form the figures for the immediately preceding Fiscal Year, certified as presenting fairly the consolidated and consolidating financial condition of the Borrowers and
their Consolidated Entities by the chief financial or accounting Authorized Officer of each Borrower, and (ii) a copy of the consolidated and consolidating balance sheet of the Parent and its
Subsidiaries, and the related consolidated and consolidating statements of income and cash flow of the Parent and its Subsidiaries for such Fiscal Year, setting forth in comparative form the figures
for the immediately preceding Fiscal Year, audited (without any Impermissible Qualification) by independent public accountants acceptable to the Administrative Agent, which shall include a calculation
of the financial covenants set forth in Section 8.2.4 and a statement by such accountants that, in performing the examination necessary to
deliver the audited financial statements of the Parent, no knowledge was obtained of any Event of Default; 

        (c)  as
soon as available and in any event within 30 days after the end of each calendar month, copies of the monthly facility reports prepared during such calendar
month; 

53

 

        (d)  concurrently
with the delivery of the financial information pursuant to clauses (a) and  (b), a Compliance Certificate, executed by the chief financial or
accounting Authorized Officer of each Borrower, showing compliance with the financial
covenants set forth in Section 8.2.4 and stating that no Default has occurred and is continuing (or, if a Default has occurred, specifying the
details of such
Default and the action that the Borrowers or an Obligor has taken or proposes to take with respect thereto); 

        (e)  as
soon as possible and in any event within three days after either Borrower or any other Obligor obtains knowledge of the occurrence of a Default, a statement of an
Authorized Officer of the applicable Borrower setting forth details of such Default and the action which such Borrower or such Obligor has taken and proposes to take with respect thereto; 

        (f)    as
soon as possible and in any event within three days after either Borrower or any other Obligor obtains knowledge of (i) the occurrence of any material adverse
development with respect to any litigation, action, proceeding or labor controversy described in Item 7.7 of the Disclosure Schedule or (ii) the
commencement of any litigation, action, proceeding or labor controversy of the type and materiality described in Section 7.7, notice thereof and,
to the extent the Administrative Agent requests, copies of all documentation relating thereto; 

        (g)  promptly
after the sending or filing thereof, copies of all reports, notices, prospectuses and registration statements which any Obligor files with the SEC or any
national securities exchange; 

        (h)  immediately
upon becoming aware of (i) the institution of any steps by any Person to terminate any Pension Plan, (ii) 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, (iii) the taking of any action with respect to a Pension Plan which
could result in the requirement that any Obligor furnish a bond or other security to the PBGC or such Pension Plan, or (iv) the occurrence of any event with respect to any Pension Plan which
could result in the incurrence by any Obligor of any material liability, fine or penalty, notice thereof and copies of all documentation relating thereto; 

        (i)    promptly
upon receipt thereof, copies of all "management letters" submitted to either Borrower or any other Obligor by
the independent public accountants referred to in clause (b) in connection with each audit made by such accountants; 

        (j)    promptly
following the mailing or receipt of any notice or report delivered under the terms of any Subordinated Debt, copies of such notice or report; and 

        (k)  such
other financial and other information as any Lender or the Issuer through the Administrative Agent may from time to time reasonably request (including information
and reports in such detail as the Administrative Agent may request with respect to the terms of and information provided pursuant to the Compliance Certificate). 

        All
financial statements provided in accordance with this Section 8.1.1 will be prepared in accordance with GAAP consistently
applied with the financial statements provided in accordance with Section 5.1.12 of the Original Credit Agreement, and in each case will present
fairly the consolidated financial condition of the Persons covered thereby as of the dates thereof and the results of the operations for the periods then ended. 

 
 
        SECTION 8.1.2    Maintenance of Existence; Compliance with Laws, etc.     Each Borrower will, and will cause each
of its Consolidated Entities to, preserve and maintain its legal existence (except as otherwise permitted by  Section 8.2.11), and comply in all material respects with all applicable laws, rules,
regulations and orders, including the payment (before the
same become delinquent), of all Taxes, imposed upon such Borrower or its Consolidated Entities or upon their property except to the extent being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in 

54

 

accordance with GAAP have been set aside on the books of such Borrower or its Consolidated Entities, as applicable. 

 
 
        SECTION 8.1.3    Maintenance of Properties.     Each Borrower will, and will cause each of its Consolidated
Entities to, maintain, preserve, protect and keep its and their respective properties in good repair,
working order and condition (ordinary wear and tear excepted), and make necessary repairs, renewals and replacements so that the business carried on by such Borrower and its Consolidated Entities may
be properly conducted at all times, unless such Borrower or such Consolidated Entity determines in good faith that the continued maintenance of such property is no longer economically desirable. 

 
 
        SECTION 8.1.4    Insurance.     Each Borrower will, and will cause each of its Consolidated Entities to:

        (a)  maintain
insurance on its property with financially sound and reputable insurance companies against loss and damage in at least the amounts (and with only those
deductibles) customarily maintained, and against such risks as are typically insured against in the same general area, by Persons of comparable size engaged in the same or similar business as such
Borrower and its Consolidated Entities; and 

        (b)  all
worker's compensation, employer's liability insurance or similar insurance as may be required under the laws of any state or jurisdiction in which it may be engaged
in business. 

Without
limiting the foregoing, all insurance policies required pursuant to this Section that are maintained by the Borrowers and the Subsidiary Guarantors with respect to their operations and assets
shall, if requested by the Administrative Agent, (i) name the Administrative Agent on behalf of the Secured Parties as lenders loss payee and mortgage loss payee (in the case of property
insurance) or additional insured (in the case of liability insurance), as applicable, and provide that no cancellation or modification of the policies will be made without thirty days' prior written
notice to the Administrative
Agent and (ii) be in addition to any requirements to maintain specific types of insurance contained in the other Loan Documents. 

 
 
        SECTION 8.1.5    Books and Records.     Each Borrower will, and will cause each of its Consolidated Entities to,
keep books and records in accordance with GAAP which accurately reflect all of its
business affairs and transactions and permit each Secured Party or any of its representatives, at reasonable times and intervals upon reasonable notice to such Borrower, to visit each Obligor's
offices, to discuss such Obligor's financial matters with its officers, employees and independent public accountants (and each Borrower hereby authorizes such independent public accountant to discuss
each Obligor's financial matters with each Secured Party and its representatives whether or not any representative of such Obligor is present) and to examine (and photocopy extracts from) any of its
books and records. The applicable Borrower shall pay any fees of such independent public accountant incurred in connection with any Secured Party's exercise of its rights, with respect to such
Borrower, pursuant to this Section. 

 
 
        SECTION 8.1.6    Environmental Law Covenant.     Each Borrower will, and will cause each of its Consolidated
Entities to, 

        (a)  use
and operate all of its and their facilities and properties in material compliance with all Environmental Laws, keep all necessary 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; and 

        (b)  promptly
notify the Administrative Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries relating to the condition of its
facilities and properties in 

55

 

respect of, or as to compliance with, Environmental Laws, and shall promptly resolve any non-compliance with Environmental Laws and keep its property free of any Lien imposed by any
Environmental Law. 

 
 
        SECTION 8.1.7    Use of Proceeds.     Each Borrower has or will apply the proceeds of the Credit Extensions as
follows: 

        (a)  for
working capital and general corporate purposes of the Borrowers and the Subsidiary Guarantors, including Investments and Permitted Acquisitions permitted by this
Agreement; and 

        (b)  for
issuing Letters of Credit for the account of the Borrowers and the Subsidiary Guarantors. 

 
 
        SECTION 8.1.8    Future Guarantors, Security, etc.     Each Borrower will, and will cause each Subsidiary Guarantor
to, execute any documents, authorize delivery and filing of Filing Statements, agreements (including
any guaranty, security and/or pledge agreement) and instruments, and take all further action (including filing Mortgages within 150 days of the acquisition of any real property) that may be
required under applicable law, or that the Administrative Agent may reasonably request, in order to effectuate the transactions contemplated by the Loan Documents and in order to grant, preserve,
protect and perfect the validity and first priority (subject to Liens permitted by Section 8.2.3) of the Liens created or intended to be created
by the Loan Documents. Each Borrower will cause any subsequently acquired or organized Wholly Owned Subsidiary to execute the Subsidiary Guaranty (or a supplement thereto) and each applicable Loan
Document in favor of the Secured Parties. In addition, from time to time, each Borrower will, and will cause each Subsidiary Guarantor to, at such Borrower's cost and expense, promptly secure the
Obligations by pledging or creating, or causing to be pledged or created, perfected Liens with respect to such of its assets and properties as the Administrative Agent or the Required Lenders shall
designate, it being agreed that it is the intent of the parties that the Obligations shall be secured by, among other things, substantially all the assets of the Borrowers and the Subsidiary
Guarantors, including real and personal property acquired subsequent to the Closing Date. Such Liens will be created under the Loan Documents in form and substance satisfactory to the Administrative
Agent, and the applicable Borrower shall deliver or cause to be delivered to the Administrative Agent all such instruments and documents (including legal opinions, title insurance policies and lien
searches) as the Administrative Agent shall reasonably request to evidence compliance with this Section. Notwithstanding the foregoing, (a) this  Section 8.1.8 shall not apply to any Subsidiary
Guarantor that is an Operating Entity or a Limited Entity (or which becomes an Operating Entity
or a Limited Entity within six months after the formation or initial acquisition of an Equity Interest in such Subsidiary) and (b) no Subsidiary Guarantor shall be obligated to grant a Lien
with respect to any Equity Interest in a partnership, joint venture or limited liability company in which an Equity Interest is also held by a Hospital Joint Venture Entity; provided that in each such
case, Borrowers provide Administrative Agent an acknowledgment affirming the inclusion of such entity as a Limited Entity and reaffirming the representation and warranty of Borrowers set forth in  Section 7.17.

 
 
        SECTION 8.1.9    Rate Protection Agreements.     The Borrowers shall maintain Hedging Obligations (including such
Indebtedness accruing interest at a fixed rate by its terms) designed to protect the Borrowers
against fluctuations in interest rates with respect to at least 50% of the average outstanding amount of the Borrowers' Indebtedness for a period and on terms satisfactory to the Administrative Agent. 

 
 
        SECTION 8.1.10    Provisions for Certain Subsidiaries.     The Borrowers have notified the Administrative Agent and
Lenders that USP New Jersey, Inc., a US Subsidiary Guarantor, intends to transfer its Equity
Interest in Shrewsbury Surgery Center, LLC and Toms River Surgery Center, LLC, to a joint venture, partnership or limited liability company in which an Equity Interest is also held by a Person that
owns or is affiliated with a non-profit hospital (a "Hospital Joint Venture Entity") within 90 days after the Closing Date and has
requested that USP Houston, Inc. and USP New Jersey, Inc. 

56

 

(collectively, the "Subject US Subsidiary Guarantors") not pledge their Equity Interest in Memorial Hermann/USP Surgery Centers, L.L.P., Shrewsbury
Surgery Center, LLC and Toms River Surgery Center, LLC (each a "Subject Subsidiary") respectively, as is otherwise required in this Agreement. The
Borrowers agree that if such transfers of the Equity Interests in either Subject Subsidiary does not occur within 90 days after the Closing Date (or by such later date as agreed to in writing
by Administrative Agent in its sole and arbitrary discretion, and, absent an Event of Default, without the consent of any other Lender), Borrowers will cause the Subject US Subsidiary Guarantors not
otherwise transferred to pledge their Equity Interests in the respective Subject Subsidiary pursuant to Section 5.1(c) and execute and/or deliver
such documents and certificates required in Section 6.1.8.

 
 
        SECTION 8.1.11    Distributions.     Each Borrower will, and will cause each of its Consolidated Entities to, cause
each Qualified Entity to declare and pay regular, quarterly or
semi-annual dividends or distributions to the holders of its Equity Interests in an amount equal to substantially all of the available cash flow of such Qualified Entity for such period as
determined in good faith by the board of directors, board of governors or such other individuals performing similar functions, subject to such ordinary and customary reserves and other amounts as, in
good faith judgment of such individuals, may be necessary so that the businesses of such Qualified Entity may be properly and advantageously conducted at all times. 

 
 
        SECTION 8.2    Negative Covenants.     Each Borrower covenants and agrees with each Lender, the Issuer and the
Administrative Agent that until the Termination Date has occurred, such Borrower will, and
will cause its Consolidated Entities to, perform or cause to be performed the obligations set forth below. 

57

  

 
 
        SECTION 8.2.1    Business Activities.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, engage in any business activity except those business activities engaged in on the
Closing Date and activities reasonably related thereto. 

 
 
        SECTION 8.2.2    Indebtedness.     Neither Borrower will, nor will it permit any of its Consolidated Entities to,
create, incur, assume or permit to exist any Indebtedness, other than: 

        (a)  Indebtedness
in respect of the Obligations; 

        (b)  Indebtedness
existing as of the Closing Date which is identified in Item 8.2.2(b) of the Disclosure Schedule, and
refinancing of such Indebtedness in a principal amount not in excess of that which is outstanding on the Closing Date; 

        (c)  unsecured
Indebtedness (i) incurred in the ordinary course of business of either Borrower and its Consolidated Entities (including open accounts extended by
suppliers on normal trade terms in connection with purchases of goods and services which are not overdue for a period of more than 90 days or, if overdue for more than 90 days, as to
which a dispute exists and adequate reserves in conformity with GAAP have been established on the books of such Borrower or such Consolidated Entity) and (ii) in respect of performance, surety
or appeal bonds provided in the ordinary course of business, but excluding (in each case), Indebtedness incurred through the borrowing of money or Contingent Liabilities in respect thereof; 

        (d)  Indebtedness
of any Subsidiary Guarantor owing to either Borrower or any other Subsidiary Guarantor, which Indebtedness shall be either (i) evidenced by one or
more promissory notes in form and substance satisfactory to the Administrative Agent, duly executed and delivered in pledge to the Administrative Agent pursuant to a Loan Document, or
(ii) reflected in an open account on the books and records of such Person provided that such books and records are accessible by Administrative
Agent, and shall, in each case, not be forgiven or otherwise discharged for any consideration other than payment in full or in part in cash (provided that only the amount repaid in part shall be
discharged); 

        (e)  unsecured
subordinated Indebtedness (not evidenced by a note or other instrument) of either Borrower owing to a Subsidiary so long as the agreement pursuant to which
such Indebtedness was
incurred contains subordination provisions and other terms which are reasonably satisfactory in all respects to the Administrative Agent; 

        (f)    Indebtedness
in respect of the Subordinated Intercompany Notes and refinancings of such Subordinated Debt which continue to satisfy the terms of the definition of
"Subordinated Debt"; 

        (g)  Indebtedness
consisting of obligations of the Borrowers to Operating Entities in connection with any cash management system operated by the Borrowers in the ordinary
course of business under which the Borrowers receive and hold cash that belongs to such Operating Entities pending disbursement of such cash to or for the benefit of the respective Operating Entities; 

        (h)  Other
Indebtedness (as defined in Section 1.1 hereof); but only to the extent that on the date of such incurrence
of such Indebtedness and after giving effect thereto, the ratio of any such Other Indebtedness to EBITDA (plus amounts attributable to Minority
Interests), calculated on a rolling four quarter basis and measured at the end of each Fiscal Quarter, shall not exceed, during the applicable periods, the following ratios: 

	Period
 
	 	Other Indebtedness

to EBITDA

	Prior to June 30, 2003	 	1.25 to 1.00
	From June 30, 2003 to June 29, 2004	 	1.20 to 1.00
	Commencing June 30, 2004 and thereafter	 	1.15 to 1.00

58

 

        (i)    Debt
Issuance, not to exceed $15,000,000, in the aggregate, which is issued on reasonable and customary terms which are satisfactory in all respects to the
Administrative Agent; provided that any Debt Issuance permitted under this Section 8.2.2(i) shall not mature sooner than April 23,
2006; 

provided that no Indebtedness otherwise permitted by clauses (b), (d), (f), (h) or  (i) shall be assumed,
created or otherwise incurred if a Default has occurred and is then continuing or would result therefrom. 

 
 
        SECTION 8.2.3    Liens.     Neither Borrower will, nor will it permit any of its Consolidated Entities to, create,
incur, assume or permit to exist any Lien upon any of its property
(including Equity Interests of any Person), revenues or assets, whether now owned or hereafter acquired, except: 

        (a)  Liens
securing payment of the Obligations; 

        (b)  Liens
existing as of the Closing Date and disclosed in Item 8.2.3(b) of the Disclosure Schedule securing Indebtedness
described in clause (b) of Section 8.2.2, and refinancings of such Indebtedness; provided
that no such Lien shall encumber any additional property and the amount of Indebtedness secured by such Lien is not increased from that existing on the Closing Date; 

        (c)  Liens
securing Indebtedness of the type permitted under clause (h) of  Section 8.2.2; provided that (i) such Lien is granted within 60 days
after such Indebtedness is incurred and (ii) such Lien
secures only the assets that are the subject of the Indebtedness referred to in such clause; 

        (d)  Liens
in favor of carriers, warehousemen, mechanics, materialmen and landlords granted in the ordinary course of business for amounts 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; 

        (e)  Liens
incurred or deposits made in the ordinary course of business in connection with worker's compensation, unemployment insurance or other forms of governmental
insurance or benefits, or to secure performance of tenders, statutory obligations, bids, leases or other similar obligations (other than for borrowed money) entered into in the ordinary course of
business or to secure obligations on surety and appeal bonds or performance bonds; 

        (f)    judgment
Liens in existence for less than 45 days after the entry thereof or with respect to which execution has been stayed or the payment of which is covered in
full (subject to a customary deductible) by insurance maintained with responsible insurance companies and which do not otherwise result in an Event of Default under  Section 9.1.6; 

        (g)  easements,
rights-of-way, zoning restrictions, minor defects or irregularities in title and other similar encumbrances not interfering in any
material respect with the value or use of the property to which such Lien is attached; and 

        (h)  Liens
for Taxes 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. 

 
 
        SECTION 8.2.4    Financial Condition and Operations.     Neither Borrower will permit any of the events set forth
below to occur. 

59

 

        (a)  Neither
Borrower will permit the Total Funded Debt to EBITDA Ratio to be greater than, during the applicable period, the ratios set forth below: 

	Period
 
	 	Total Funded Debt

to EBITDA Ratio

	Prior to June 30, 2003	 	3.75 to 1.00
	From June 30, 2003 to December 30, 2003	 	3.50 to 1.00
	Commencing December 31, 2003 and thereafter	 	3.25 to 1.00

        (b)  Neither
Borrower will permit the Senior Funded Debt to EBITDA Ratio to be greater than 2.00 to 1.00 at any time. 

        (c)  Neither
Borrower will permit the Fixed Charge Coverage Ratio, calculated on a rolling four quarter basis and measured on the last day of each Fiscal Quarter, to be less
than, during the applicable period, the ratios set forth below: 

	Period
 
	 	Fixed Charge

Coverage Ratio

	Prior to December 31, 2003	 	1.25 to 1.00
	Commencing December 31, 2003 and thereafter	 	1.50 to 1.00

        (d)  Neither
Borrower will permit the Interest Coverage Ratio, calculated on a rolling four quarter basis and measured on the last day of each Fiscal Quarter, to be less
than, during the applicable period, the ratios set forth below: 

	Period
 
	 	Interest

Coverage Ratio

	Prior to December 31, 2003	 	2.00 to 1.00
	Commencing December 31, 2003 and thereafter	 	2.50 to 1.00

 
 
        SECTION 8.2.5    Investments.     Neither Borrower will, nor will it permit any of its Consolidated Entities to,
purchase, make, incur, assume or permit to exist any Investment in any other
Person, except: 

        (a)  Investments
existing on the Closing Date and identified in Item 8.2.5(a) of the Disclosure Schedule; 

        (b)  Cash
Equivalent Investments; 

        (c)  Investments
received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each
case in the ordinary course of business; 

        (d)  Investments
permitted as Capital Expenditures pursuant to Section 8.2.8; 

        (e)  Investments
(i) by US Borrower in any Consolidated Entity, (ii) by any US Subsidiary in the US Borrower or another US Subsidiary, or (iii) by US
Borrower or any US Subsidiary in any Non-Consolidated Entity to which US Borrower or a US Subsidiary provides management services and receives a fee therefor and which
Non-Consolidated Entity has no restrictions on the payment of dividends or distributions to holders of its Equity Interests (other than certain restrictions on Operating Entities arising
solely from a default by such Operating Entity in the payment of or interest on Indebtedness that was incurred by such Operating Entity); provided that
the aggregate amount of Investments under this clause (iii) at any time outstanding (excluding any Investments set forth in  Item 8.2.5(a) of the
Disclosure Schedule) shall not exceed $35,000,000 plus 50% of the cumulative Net
Income received by the Borrowers and their Consolidated Entities (as of the most recent Compliance Certificate delivered pursuant to clause (d)
of Section 8.1.1) from and after 

60

 

September 30, 2002 plus 35% of the Net Equity Proceeds received by either Borrower, Holdings and/or Parent, as applicable, in connection with
the sale or issuance of such Borrower's Equity Interest subsequent to the Closing Date; and provided that if such Investments is comprised of a loan,
advance or extension of credit by either Borrower or a Subsidiary Guarantor to another Person, such Investments shall be either (A) evidenced by one or more promissory notes in form and
substance satisfactory to the Administrative Agent, duly executed and delivered in pledge to the Administrative Agent pursuant to a Loan Document, or (B) reflected in an open account on the
books and records of such Person, and shall, in each case, not be forgiven or otherwise discharged for any consideration other than payment in full or in part in cash (provided that only the amount
repaid in part shall be discharged); and provided that if such proposed Investment in a Non-Consolidated Entity under this
clause (iii), together with all prior Investments ("Prior Investments") in such Non-Consolidated Entity, would cause such
Non-Consolidated Entity to become a Consolidated Entity, the transaction shall be deemed an acquisition of Equity Interests by such US Borrower or US Subsidiary and will only be permitted
if the aggregate of the Prior Investment and the requested Investment as such deemed acquisition would be permitted pursuant to the terms of  Section 8.2.6. If such deemed acquisition would be
permitted pursuant to the terms of  Section 8.2.6, the Prior Investment shall be removed as an Investment for purposes of calculating aggregate amounts of Investments permitted
under this clause (iii) and the amount of the proposed Investment plus the amount of the Prior
Investment (if such Prior Investment was made after the Closing Date) shall be included in determining whether future acquisitions may be permitted pursuant to the terms of  Section 8.2.6;

        (f)    Investments
constituting (i) accounts receivable arising, (ii) trade debt granted, or (iii) deposits made in connection with the purchase price of
goods or services, in each case in the ordinary course of business; 

        (g)  Investments
consisting of any deferred portion of the sales price received by either Borrower or any Consolidated Entity in connection with any Disposition permitted
under Section 8.2.12; 

        (h)  Investments
constituting Permitted Foreign Investments in an aggregate amount not to exceed $15,000,000 during the term of this Agreement; 

        (i)    Investments
constituting Indebtedness permitted pursuant to Section 8.2.2; and 

        (j)    other
Investments in an amount not to exceed $1,000,000 over the term of this Agreement; 

provided that 

        (k)  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 

        (l)    no
Investment otherwise permitted by clauses (d), (e)(i), (e)(ii), (h), (i) or  (k) shall be permitted to be made if any Default has occurred and is
continuing or would result therefrom. 

 
 
        SECTION 8.2.6    Consolidated Acquisitions.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, make an acquisition of Equity Interests except Equity Interests constituting
Permitted Acquisitions not to exceed an aggregate amount in cash (net of any amounts that have been syndicated to other investors) equal to EBITDA of the Borrowers and their Consolidated Entities for
the four Fiscal Quarters for which the most recent Compliance Certificate was delivered to the Administrative Agent by the Borrowers pursuant to  clause (d) of Section 8.1.1 during any twelve month period following the Closing Date;
provided that (i) no one such acquisition shall exceed $15,000,000, (ii) the aggregate amount of such acquisitions of Persons which had negative Acquired Person 

61

 

EBITDAM shall not exceed $10,000,000 during the term of this Agreement, (iii) any such acquisition shall result in the acquisition of a Consolidated Entity, (iv) upon making such
acquisition, the provisions of Section 8.1.8 are complied with and (v) no Default has occurred and is continuing or would result
therefrom. 

 
 
        SECTION 8.2.7    Restricted Payments.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, declare or make a Restricted Payment, or make any deposit for any Restricted
Payment, other than Restricted Payments made (a) by Consolidated Entities to holders of their Equity Interests, (b) in connection with the repurchase of individual investors' Equity
Interests in Operating Entities and (c) so long as no Event of Default has occurred and is continuing, to Holdings and to USP International (for subsequent payment to Holdings) for the payment
of interest on the Holdings Notes (provided that the amount of Restricted Payments permitted by this clause (c) shall be reduced by the amount of
interest paid by the
US Borrower and USP International to Holdings with respect to the Subordinated Intercompany Notes). 

 
 
        SECTION 8.2.8    Capital Expenditures.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, make or commit to make Capital Expenditures in any Fiscal Year in an aggregate
amount in excess of (a) in respect of Maintenance Capital Expenditures, an amount equal to the amount attributable to depreciation of assets in determining Net Income of the Borrowers and their
Consolidated Entities for such Fiscal Year and (b) in respect of Capital Expenditures other than Maintenance Capital Expenditures, $15,000,000 in the aggregate during any Fiscal Year. 

 
 
        SECTION 8.2.9    No Prepayment of Subordinated Debt.     Neither Borrower will, nor will it permit any of its
Consolidated Entities to, 

        (a)  make
any payment or prepayment of principal of, or premium or interest on, any Subordinated Debt (i) other than the stated, scheduled date for payment of interest
set forth in the applicable Sub Debt Documents or as otherwise required thereunder, or (ii) which would violate the terms of this Agreement or the applicable Sub Debt Documents; 

        (b)  redeem,
retire, purchase, defease or otherwise acquire any Subordinated Debt other than pursuant to the terms of the applicable Sub Debt Documents; or 

        (c)  make
any deposit (including the payment of amounts into a sinking fund or other similar fund) for any of the foregoing purposes. 

        Furthermore,
neither Borrower nor any of their Consolidated Entities will designate any Indebtedness other than the Obligations as "Designated Senior
Indebtedness" (or any analogous term) in any Sub Debt Document. 

 
 
        SECTION 8.2.10    Issuance of Equity Interests.     Neither Borrower will, nor will it permit any of its
Consolidated Entities to, issue any Equity Interests (whether for value or otherwise) to any Person other
than (i) in the case of Consolidated Entities, to either Borrower or a Subsidiary Guarantor, (ii) in the case of either Borrower, if the Net Equity Proceeds from such issuance are
applied to prepay the Loans as required by the terms of this Agreement or (iii) in the case of Operating Entities, to physicians in the ordinary course of business. 

 
 
        SECTION 8.2.11    Consolidation, Merger, etc.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, liquidate or dissolve, consolidate with, or merge into or with, any other Person,
or purchase or otherwise acquire all or substantially all of the assets of any Person (or any division thereof), except 

        (a)  any
Consolidated Entity may liquidate or dissolve voluntarily into, and may merge with and into, the US Borrower or any of its Consolidated Entities (provided that a
Subsidiary Guarantor may only liquidate or dissolve into, or merge with and into, the US Borrower or another Subsidiary Guarantor), and the assets or Equity Interests of any Subsidiary may be 

62

 

purchased or otherwise acquired by the US Borrower or any other Subsidiary (provided that the assets or Equity Interests of any Subsidiary Guarantor may only be purchased or otherwise acquired by the
US Borrower or another Subsidiary Guarantor); provided that in no event shall any Pledged Subsidiary consolidate with or merge with and into any Subsidiary other than another Pledged Subsidiary unless
after giving effect thereto, the Administrative Agent shall have a perfected pledge of, and security interest in and to, at least the same percentage of the issued and outstanding interests of Equity
Interests (on a fully diluted basis) of the surviving Person as the Administrative Agent had immediately prior to such merger or consolidation in form and substance satisfactory to the Administrative
Agent and its counsel, pursuant to such documentation and opinions as shall be necessary in the opinion of the Administrative Agent to create, perfect or maintain the collateral position of the
Secured Parties therein; 

        (b)  so
long as Default has occurred and is continuing or would occur after giving effect thereto, either Borrower or any of its Consolidated Entities may (to the extent
permitted by clause (e) of Section 8.2.5 or by  Section 8.2.6) purchase all or substantially
all of the assets or Equity Interests of any Person (or any division thereof), or acquire such
Person by merger; and 

        (c)  as
permitted by Section 8.2.12. 

 
 
        SECTION 8.2.12    Permitted Dispositions.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, Dispose of any of such Borrower's or such Consolidated Entity's assets (including
accounts receivable and Equity Interests of Consolidated Entities) to any Person in one transaction or series of transactions unless such Disposition is (a) inventory or obsolete property
Disposed of in the ordinary course of its business, (b) permitted by Sections 8.1.10 and 8.2.11,
(c) Dispositions of Equity Interests in Operating Entities to physicians in the ordinary course of business, (d) (i) such Disposition is for fair market value and, unless otherwise
agreed to by the Administrative Agent, the consideration received shall consist of no less than 80% in cash, (ii) the Net Disposition Proceeds received from such Disposition, together with the
Net Disposition Proceeds of all other assets Disposed of pursuant to this clause since the Closing Date, does not exceed (individually or in the aggregate) $15,000,000 in any Fiscal Year and
(iii) the Net Disposition Proceeds from such Disposition are applied pursuant to Sections 3.1.1 and  3.1.2, or (e) a Disposition of real property
permitted under Section 8.2.16 hereof and the
Net Disposition Proceeds from such Disposition are applied pursuant to Sections 3.1.1 and 3.1.2. 

 
 
        SECTION 8.2.13    Modification of Certain Agreements.     

        (a)  Neither
Borrower will, nor will it permit any of its Consolidated Entities to, consent to any amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions contained in the Sub Debt Documents, other than any amendment, supplement, waiver or modification for which no fee is
payable to the holders of the Subordinated Debt and which (i) extends the date or reduces the amount of any required repayment, prepayment or redemption of the principal of such Subordinated
Debt, (ii) reduces the rate or extends the date for payment of the interest, premium (if any) or fees payable on such Subordinated Debt or (iii) makes the covenants, events of default or
remedies in such Sub Debt Documents less restrictive on the US Borrower; 

        (b)  any
of the Transaction Documents (as defined in the Original Credit Agreement). 

 
 
        SECTION 8.2.14    Transactions with Affiliates.     Neither Borrower will, nor will it permit any of its
Consolidated Entities to, enter into or cause or permit to exist any arrangement, transaction or contract
(including for the purchase, lease or exchange of property or the rendering of services) with any of its other Affiliates, unless such arrangement, transaction or contract (a) is on fair and
reasonable terms no less favorable to the applicable Borrower or such Consolidated Entity than it could obtain in an arm's-length transaction with a Person that is not an Affiliate and (b) is
of the kind which would be entered 

63

 

into by a prudent Person in the position of such Borrower or such Consolidated Entity with a Person that is not one of its Affiliates. 

 
 
        SECTION 8.2.15    Restrictive Agreements, etc.     Neither Borrower will, nor will it permit any of its
Consolidated Entities to, enter into any agreement prohibiting 

        (a)  the
creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, other than with respect to Limited Entities; 

        (b)  the
ability of any Obligor to amend or otherwise modify any Loan Document; or 

        (c)  the
ability of any Consolidated Entity to make any payments, directly or indirectly, to either Borrower, including by way of dividends, advances, repayments of loans,
reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments. 

The
foregoing prohibitions shall not apply to restrictions contained in (i) any Loan Document, (ii) the Holdings Notes Indenture or (iii) in the case of  clause (a), any agreement
governing any Indebtedness permitted by clause (i) of  Section 8.2.2 as to the assets financed with the proceeds of such Indebtedness. 

 
 
        SECTION 8.2.16    Sale and Leaseback.     Neither Borrower will, nor will it permit any of its Consolidated
Entities to, directly or indirectly enter into any agreement or arrangement providing for the
sale or transfer by it of any property (other than real property), now owned or hereafter acquired, to a Person and the subsequent lease or rental of such property or other similar property from such
Person. 

 
 
        SECTION 8.2.17    Foreign Subsidiaries.     Notwithstanding any other provisions of this Agreement to the contrary,
the US Borrower will not, nor will it permit any of its Consolidated Entities to, organize
or acquire any Foreign Subsidiaries. 

 
 
        SECTION 8.2.18    Amendment of Organic Documents.     Neither Borrower will, nor will it permit any of its
Consolidated Entities to, amend, supplement or otherwise modify, or permit, consent or suffer to occur any
amendment, supplement or modification of, any terms or provisions contained in, or applicable to, any Organic Document of such Borrower or such Consolidated Entity if the effect thereof is to impair,
or is in any manner adverse to, the rights, interests or obligations of any Secured Party under any Loan Document. 

 
 
        SECTION 8.2.19    Fiscal Year.     Neither Borrower will change its Fiscal Year. 

 
 
        SECTION 8.2.20    Limitations on Intercompany Loans and Transfers.     Neither Borrower will, nor will it permit
any of its Consolidated Entities (other than an Unrestricted Subsidiary (as defined in the Holdings Notes Indenture))
to, make any loans or advances, or transfer any of its property or assets, to Parent or any of its Restricted Subsidiaries (as defined in the Holdings Notes Indenture) if the loan, advance or transfer
would contravene such Borrower's or Consolidated Entity's Organic Documents or any agreement relating to Indebtedness of such Person. 

 
 
        SECTION 8.3    Additional Covenants regarding certain Spanish Collateral.     Each Borrower agrees that until the
following conditions are met to the satisfaction of Administrative Agent, the availability of the UK Borrower to have Letters
of Credit issued on its behalf or to receive Loans or other Credit Extensions will be limited pursuant to the provisions of clause (d) of  Section 2.1.1. 

64

 

 
 
        SECTION 8.3.1    Foreign Subsidiary Pledge and Security Agreements.     The Administrative Agent shall have
received the Foreign Subsidiary Pledge and Security Agreements, duly executed and delivered by an Authorized Officer of each
Foreign Subsidiary Guarantor, together with: 

        (a)  certificates
evidencing all of the issued and outstanding Equity Interests owned by each Foreign Subsidiary Guarantor in its Subsidiaries (other than Limited Entities),
which certificates in each case shall be accompanied by undated instruments of transfer duly executed in blank, or, if any Equity Interests are uncertificated Equity Interests, confirmation and
evidence satisfactory to the
Administrative Agent that the security interest therein has been perfected in accordance with Article 9 of the UCC and all laws otherwise applicable to the perfection of the pledge of such
Equity Interests; 

        (b)  all
Intercompany Notes (as defined in the Foreign Subsidiary Pledge and Security Agreements), if any, evidencing Indebtedness payable to each Foreign Subsidiary
Guarantor duly endorsed to the order of the Administrative Agent, together with Filing Statements (or similar instruments) in respect of such Intercompany Notes naming each Foreign Subsidiary
Guarantor as a debtor to be filed in such jurisdictions as the Administrative Agent may reasonably request; 

        (c)  executed
Foreign Pledge Agreements or other similar instruments or documents to be filed in the applicable jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interests of the Administrative Agent pursuant to the Foreign Subsidiary Pledge and Security Agreements; and 

        (d)  such
amendments and supplements to the existing Foreign Subsidiary Pledge and Security Agreements as may be necessary to evidence the execution of this Agreement and the
continuing obligations of the existing Foreign Subsidiary Guarantors thereunder and each new Foreign Subsidiary Guarantor formed since the original execution thereof. 

 
 
        SECTION 8.3.2    Mortgages.     The Administrative Agent shall have received counterparts of each of the Mortgages
applicable to Foreign Subsidiary Guarantors, duly executed and delivered by an
Authorized Officer of each Foreign Subsidiary Guarantor, together with 

        (a)  completion
of all recordings and filings of each such Mortgage, or any amendments thereto, as may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable effectively to create a valid, perfected first priority Lien in favor of the Secured Parties against the properties purported to be covered thereby; 

        (b)  such
other approvals, opinions, or documents as the Administrative Agent may reasonably request including consents and estoppel agreements from landlords, and to the
extent then available, a current survey of each property purported to be covered by a Mortgage in form and substance reasonably satisfactory to the Administrative Agent; and 

        (c)  such
amendments to the existing Foreign Subsidiary Mortgages as may be necessary to evidence the execution of this Agreement and the continuing obligations of the
existing Foreign Subsidiary Guarantors thereunder. 

 
 
        SECTION 8.3.3    Opinions of Counsel.     The Administrative Agent shall have received opinions, addressed to the
Administrative Agent and all Lenders, with respect to the documents and matters set forth
in this Section 8.3, each in form and substance, and from counsel, satisfactory to the Administrative Agent. 

 
 

ARTICLE IX
  EVENTS OF DEFAULT    
  

 
 
        SECTION 9.1    Listing of Events of Default.     Each of the following events or occurrences described in this
Article shall constitute an "Event of Default". 

65

 

 
 
        SECTION 9.1.1    Non-Payment of Obligations.     Either Borrower shall default in the payment or prepayment when
due of 

        (a)  any
principal of any Loan or any Reimbursement Obligation or any deposit of cash for collateral purposes pursuant to  Section 2.6.4; or 

        (b)  any
interest on any Loan or any fee described in Article III or any other monetary Obligation, and such default
shall continue unremedied for a period of three Business Days after such amount was due. 

 
 
        SECTION 9.1.2    Breach of Warranty.     Any representation or warranty of any Obligor made or deemed to be made in
any Loan Document (including any certificates delivered pursuant to  Article VI) is or shall be incorrect when made or deemed to have been made in any material respect. 

 
 
        SECTION 9.1.3    Non-Performance of Certain Covenants and Obligations.     Either Borrower shall default in the due
performance or observance of any of its obligations under Section 8.1.1,
Section 8.1.5 (with respect to inspection of books and records and discussions with Borrowers' officers, employees and independent public accountants),  Section 8.1.7 or
Section 8.2, or any Obligor shall default in the due performance or
observance of its obligations under Article IV of the Subsidiary Guaranty or Article IV of
a Pledge Agreement. 

 
 
        SECTION 9.1.4    Non-Performance of Other Covenants and Obligations.     Any Obligor shall default in the due
performance and observance of any other agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days. 

 
 
        SECTION 9.1.5    Default on Other Indebtedness.     A default shall occur in the payment of any amount when due
(subject to any applicable grace period), whether by acceleration or otherwise, of any principal or
stated amount of, or interest or fees on, any Indebtedness (other than Indebtedness described in Section 9.1.1) of any Obligor having a principal
or stated amount, individually or in the aggregate, in excess of $2,500,000, 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 or declare such Indebtedness to become due and payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase or defease such Indebtedness to be made, prior to its expressed maturity. 

 
 
        SECTION 9.1.6    Judgments.     Any judgment or order for the payment of money individually or in the aggregate in
excess of $1,000,000 (exclusive of any amounts fully covered by insurance (less
any applicable deductible) and as to which the insurer has acknowledged its responsibility to cover such judgment or order) shall be rendered against any Obligor and such judgment shall not have been
vacated or discharged or stayed or bonded pending appeal within 30 days after the entry thereof or enforcement proceedings shall have been commenced by any creditor upon such judgment or order. 

 
 
        SECTION 9.1.7    Pension Plans.     Any of the following events shall occur with respect to any Pension Plan

        (a)  the
institution of any steps by either Borrower, any member of its Controlled Group or any other Person to terminate a Pension Plan if, as a result of such termination,
such Borrower or any such member could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of
$1,000,000; 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. 

66

 

 
 
        SECTION 9.1.8    Change in Control.     Any Change in Control shall occur. 

 
 
        SECTION 9.1.9    Bankruptcy, Insolvency, etc.     Any Obligor shall 

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

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

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

67

  

	(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 thereof, and, if any such case or proceeding is not commenced by either Borrower, any Consolidated Entity or any Obligor, such case or proceeding shall
be consented to or acquiesced in by such Borrower, such Consolidated Entity or such Obligor, as the case may be, or shall result in the entry of an order for relief or shall remain for 60 days
undismissed; provided that each Borrower, each Consolidated Entity and each Obligor hereby expressly authorizes each Secured Party 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

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

 
 
        SECTION 9.1.10    Impairment of Security, etc.     Any Loan Document or any Lien granted thereunder shall (except
in accordance with its terms), in whole or in part, terminate, cease to be effective or cease to be
the legally valid, binding and enforceable obligation of any Obligor party thereto; any Obligor or any other party shall, directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability; or, except as permitted under any Loan Document, any Lien securing any Obligation shall, in whole or in part, cease to be a perfected first priority Lien. 

 
 
        SECTION 9.1.11    Failure of Subordination.     Unless otherwise waived or consented to by the Administrative Agent,
 the Lenders and the Issuer in writing, the subordination provisions relating to any
Subordinated Debt (the "Subordination Provisions") shall fail to be enforceable by the Administrative Agent, the Lenders and the Issuer in accordance
with the terms thereof, or the monetary Obligations shall fail to constitute "Senior Indebtedness" (or similar term) referring, to the Obligations; or
either Borrower or any of their Consolidated Entities shall, directly or indirectly, disavow or contest in any manner (i) the effectiveness, validity or enforceability of any of the
Subordination Provisions, (ii) that the Subordination Provisions exist for the benefit of the Administrative Agent, the Lenders and the Issuer or (iii) that all payments of principal of
or premium and interest on the Subordinated Debt, or realized from the liquidation of any property of any Obligor, shall be subject to any of such Subordination Provisions. 

 
 
        SECTION 9.1.12    Parent Total Debt to Parent Total Capitalization Ratio.     The Parent Total Debt to Parent Total
Capitalization Ratio, shall exceed, during the applicable period, the ratios set forth below: 

	Period
	 	Parent Total Debt to Parent Total

Capitalization Ratio

	Prior to December 31, 2003	 	0.55 to 1.00
	Commencing December 31, 2003 and thereafter	 	0.50 to 1.00

        and
such default shall continue unremedied for a period of thirty (30) days. 

 
 
        SECTION 9.2    Action if Bankruptcy.     If any Event of Default described in clauses
(a) through  (d) of Section 9.1.9 with respect to either Borrower shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding principal amount of all outstanding Loans and all other Obligations (including Reimbursement Obligations) shall automatically
be and become immediately due and payable, without notice or demand to any Person and each Obligor shall automatically and immediately be obligated to Cash Collateralize all Letter of Credit
Outstandings. 

 
 
        SECTION 9.3    Action if Other Event of Default.     If any Event of Default (other than any Event of Default
described in clauses (a) through  (d) of Section 9.1.9 with respect to either Borrower) shall
occur for any reason, whether
voluntary or involuntary, and be continuing, the Administrative Agent may, with the consent of, and shall, upon the direction of the Required Lenders, by notice to the Borrowers declare all or any
portion of the outstanding principal amount of the Loans and other 

68

 

Obligations (including Reimbursement Obligations) to be due and payable and/or the Commitments (if not theretofore terminated) 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 Commitments
shall terminate and the Borrowers shall automatically and immediately be obligated to Cash Collateralize all Letter of Credit Outstandings; provided
that if less than the total principal amount of all Loans and other Obligations are declared to be due and payable, the amount so declared due and payable shall be allocated pro rata between the
Borrowers in accordance with their respective Borrowings. 

 
 

ARTICLE X
  THE ADMINISTRATIVE AGENT    
  

 
 
        SECTION 10.1    Actions.     Each Lender hereby appoints SunTrust as the Administrative Agent under and for
purposes of each Loan Document. Each Lender authorizes the Administrative Agent to
act on behalf of such Lender under each Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Administrative Agent (with respect
to which the Administrative Agent agrees that it will comply, except as otherwise provided in this Section or as otherwise advised by counsel in order to avoid contravention of applicable law), to
exercise such powers hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof, together with such powers as may be incidental
thereto. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) the Administrative Agent pro rata according to such Lender's proportionate Revolving Loan
Commitment Amount, 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 Administrative Agent in any way relating to or arising out of any Loan Document (including attorneys' fees), and as to which the Administrative Agent is not reimbursed by a
Borrower; provided 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 from the Administrative Agent's gross negligence or willful misconduct. The Administrative
Agent shall not be required to take any action under any Loan Document, or to prosecute or defend any suit in respect of any Loan Document, unless it is indemnified hereunder to its satisfaction. If
any indemnity in favor of the Administrative Agent shall be or become, in the Administrative Agent's determination, inadequate, the Administrative 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 10.2    Funding Reliance, etc.     Unless the Administrative Agent shall have been notified in writing by
any Lender by 3:00 p.m. on the Business 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 Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent and, in reliance upon such assumption, make available to the applicable Borrower a corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and such Borrower severally agree to repay the Administrative Agent forthwith on demand such corresponding amount together with interest
thereon, for each day from the date the Administrative Agent made such amount available to such Borrower to the date such amount is repaid to the Administrative Agent, at the interest rate applicable
at the time to Loans comprising such Borrowing (in the case of a Borrower) and (in the case of a Lender), at the Federal Funds Rate (for the first two Business Days after which such amount has not
been repaid), and thereafter at the interest rate applicable to Loans comprising such Borrowing. 

69

 

 
 
        SECTION 10.3    Exculpation.     Neither the Administrative Agent nor any of its directors, officers, employees or
agents shall be liable to any Secured Party for any action taken or omitted to
be taken by it under any Loan Document, or in connection 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 any 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, nor to make any inquiry respecting the performance by any Obligor of its Obligations. Any such inquiry which may be made by the Administrative Agent shall not
obligate it to make any further inquiry or to take any action. The Administrative Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which the Administrative Agent believes to be genuine and to have been presented by a proper Person. 

 
 
        SECTION 10.4    Successor.     The Administrative Agent may resign as such at anytime upon at least 30 days'
prior notice to the Borrowers and all Lenders. If the Administrative Agent at
any time shall resign, the Required Lenders may appoint another Lender as a successor Administrative Agent which shall thereupon become the Administrative Agent hereunder. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Administrative Agent's giving notice of
resignation, then the retiring Administrative Agent may, on behalf of the Lenders, appoint a successor Administrative Agent, which shall be one of the Lenders or a commercial banking institution
organized under the laws of the United States (or any State thereof) or a United States branch or agency of a commercial banking institution, and having a combined capital and surplus of at least
$250,000,000; provided that if such retiring Administrative Agent is unable to find a commercial banking institution which is willing to accept such
appointment and which meets the qualifications set forth in above, the retiring Administrative Agent's resignation shall nevertheless thereupon become effective and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time, if any, as the Required Lenders appoint a successor as provided for above. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such successor Administrative Agent shall be entitled to receive from the retiring Administrative Agent such documents of transfer
and assignment as such successor Administrative Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After any retiring Administrative Agent's resignation
hereunder as the Administrative Agent, the provisions of this Article shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Administrative Agent under the
Loan Documents, and Section 12.3 and Section 12.4 shall continue to inure to its benefit. 

 
 
        SECTION 10.5    Credit Extensions by SunTrust.     SunTrust shall have the same rights and powers with respect to
(a) the Credit Extensions made by it or any of its Affiliates, and (b) the Revolving
Notes and Swingline Note held by it or any of its Affiliates as any other Lender and may exercise the same as if it were not the Administrative Agent. SunTrust and its Affiliates may accept deposits
from, lend money to, and generally engage in any kind of business with either Borrower or any Consolidated Entity or Affiliate of either Borrower as if SunTrust were not the Administrative Agent
hereunder. 

 
 
        SECTION 10.6    Credit Decisions.     Each Lender acknowledges that it has, independently of the Administrative
Agent and each other Lender, and based on such Lender's review of the financial
information of each Borrower, the 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 Commitments. Each Lender also acknowledges that it will, independently of the Administrative Agent and each other Lender, and based on
such other documents, information and investigations as it shall deem appropriate at any time, 

70

 

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 the Loan Documents. 

 
 
        SECTION 10.7    Copies, etc.     The Administrative Agent shall give prompt notice to each Lender of each notice or
request required or permitted to be given to the Administrative Agent by the
applicable Borrower pursuant to the terms of the Loan Documents (unless concurrently delivered to the Lenders by such Borrower). The Administrative Agent will distribute to each Lender each document
or instrument received for its account and copies of all other communications received by the Administrative Agent from either Borrower for distribution to the Lenders by the Administrative Agent in
accordance with the terms of the Loan Documents. 

 
 
        SECTION 10.8    Reliance by Administrative Agent.     The Administrative Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by telephone, telecopy, telegram
or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person, and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Administrative Agent. As to any matters not expressly provided for by the Loan Documents, the Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, thereunder in accordance with instructions given by the Required Lenders or all of the Lenders as is required in such circumstance, and such instructions of such Lenders and
any action taken or failure to act pursuant thereto shall be binding on all Secured Parties. For purposes of applying amounts in accordance with this Section, the Administrative Agent shall be
entitled to rely upon any Secured Party that has entered into a Rate Protection Agreement with any Obligor for a determination (which such Secured Party agrees to provide or cause to be provided upon
request of the Administrative Agent) of the outstanding Obligations owed to such Secured Party under any Rate Protection Agreement. Unless it has actual knowledge evidenced by way of written notice
from any such Secured Party and either Borrower to the contrary, the Administrative Agent, in acting in such capacity under the Loan Documents, shall be entitled to assume that no Rate Protection
Agreements or Obligations in respect thereof are in existence or outstanding between any Secured Party and any Obligor. 

 
 
        SECTION 10.9    Defaults.     The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default unless the Administrative Agent has received a written
notice from any Lender or either Borrower specifying such Default and stating that such notice is a "Notice of Default". In the event that the
Administrative Agent receives such a notice of the occurrence of a Default, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall (subject to  Section 11.1) take such action with respect to such Default as shall be directed by the Required Lenders;  provided that unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of the Secured Parties except to the extent that this Agreement
expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Required Lenders or all Lenders. 

 
 
        SECTION 10.10    Syndication Agent and Documentation Agent.     The Lenders identified on the signature pages of
this Agreement as the "Syndication Agent" and the
"Documentation Agent" shall not have any right, power, obligation, liability, responsibility or duty under
this Agreement (or any other Loan Document) other than those applicable to all Lenders as such. Without limiting the foregoing, the Lenders so identified as "Syndication
Agent" and "Documentation Agent" shall not have or be deemed to have any fiduciary relationship with any other Lender. Each
Lender acknowledges that it has not relied, and will not rely, on the Lenders so identified as "Syndication Agent" and as
"Documentation Agent" in deciding to enter into this Agreement and each other Loan Document to which it is a party or in taking or not taking action
hereunder or thereunder. 

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ARTICLE XI
  US BORROWER GUARANTY    
  

 
 
        SECTION 11.1    Guaranty.     US Borrower hereby 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 UK
Borrower now or hereafter existing under this Agreement and each other Loan Document to which the UK 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 (a) the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
§362(z), and the operation of Section 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. §502(b) and §506(b), and/or (b) any similar
provisions of The Insolvency Act of 1986, Insolvency Act 1986, Ch. 45 (Eng.), et seq.), and

	(b)
	indemnifies
and holds harmless each Lender for any and all costs and expenses (including reasonable attorney's fees and expense) incurred by such Lender, in enforcing any rights under
this Article XI. 

This
Article XI constitutes a guaranty of payment when due and not of collection, and the US Borrower specifically agrees that it shall not be
necessary or required that any Lender exercise any right, assert any claim or demand or enforce any remedy whatsoever against any other Obligor (or any other Person) before or as a condition to the
obligations of the US Borrower hereunder. 

 
 
        SECTION 11.2    Acceleration of Obligations Hereunder.     The US Borrower agrees that, in the event of the
dissolution or insolvency of the UK Borrower, or the inability or failure of the UK Borrower to pay its debts as
they become due, or an assignment by the UK Borrower for the benefit of creditors, or the commencement of any case or proceeding in respect
of the UK Borrower under any bankruptcy, insolvency or similar laws, and if such event shall occur at a time when any of the Obligations of the UK Borrower may not then be due and payable, the US
Borrower agrees that it will pay to the Lenders forthwith the full amount which would be payable hereunder by the UK Borrower if all such Obligations were then due and payable. 

 
 
        SECTION 11.3    Obligations Hereunder Absolute, etc.     The obligations of the US Borrower under this Article XI 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 UK Borrower have been paid in full and all Commitments shall have terminated.
The US Borrower guarantees that the Obligations of the UK Borrower will be paid strictly in accordance with the terms of this 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 or any holder of any Note with respect thereto. The liability of
the US Borrower under this Article XI shall be absolute, unconditional and irrevocable irrespective of 

	(a)
	any
lack of validity, legality or enforceability of the other provisions of this Agreement or any other Loan Document;

	(b)
	the
failure of any Lender

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

	(ii)
	to
exercise any right or remedy against the other guarantor of, or Collateral securing, any Obligations of the UK Borrower; 

72

 

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

	(d)
	any
reduction, limitation, impairment or termination of any Obligation of the UK Borrower for any reason, including any claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to (and the US Borrower 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 Obligation of the UK Borrower or otherwise;

	(e)
	any
amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the other terms of this Agreement 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 securing any of the Obligations of the UK Borrower; or

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

 
 
        SECTION 11.4    Reinstatement, etc.     The US Borrower agrees that this Article XI 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 of the UK Borrower is rescinded or must otherwise be restored by any Lender upon the insolvency, bankruptcy or
reorganization of the UK Borrower or otherwise, all as though such payment had not been made. 

 
 
        SECTION 11.5    Waiver, etc.     The US Borrower hereby waives promptness, diligence, notice of acceptance and any
other notice with respect to any of the Obligations of the UK Borrower and this  Article XI and any requirement that the Administrative Agent and any other Lender protect, secure or perfect or
insure any security interest or
Lien, or any property subject thereto, or exhaust any right or take any action against the UK Borrower or any other Person (including any other guarantor) or entity or any Collateral securing the
Obligations of the UK Borrower. 

 
 
        SECTION 11.6    Postponement of Subrogation.     The US Borrower agrees that it will not exercise any rights which
it may acquire by way of subrogation under this  Article XI, by any payment made hereunder or otherwise, until the prior indefeasible payment, in full and in cash, of all Obligations of the UK
Borrower. Any amount paid to the US Borrower on account of any such subrogation rights prior to the Termination Date shall be held in trust for the benefit of the Lenders and shall immediately be paid
to the Lenders and credited and applied against the Obligations of the UK Borrower whether matured or unmatured, in accordance with the terms of this Agreement; provided, however, that if all
Obligations of the UK Borrower have been indefeasibly paid in full and all Commitments have been permanently terminated, each Lender agrees that, at the US Borrower's request, the Lenders will execute
and deliver to the US Borrower appropriate documents (without recourse and without representation or warranty) necessary to evidence the transfer by subrogation to the US Borrower of an interest in
the Obligations of the UK Borrower resulting from such payment by the US Borrower. In furtherance of the foregoing, for so long as any Obligations of the UK Borrower or any Commitments remain
outstanding, the US Borrower shall refrain from taking any action or commencing any proceeding against the UK 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 Article XI to any Lender. 

 
 
        SECTION 11.7    Successors, Transferees and Assigns; Transfers of Notes, etc.     Without limiting the generality
of Section 12.11, any Lender may assign or otherwise transfer (in whole or
in part) any Obligation of the UK Borrower held by it to any other Person, and such other Person shall thereupon 

73

 

become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including this Article XI or
otherwise, subject, however, to any contrary provisions in such assignment or transfer, and to the provisions of Section 12.11 and  Article X of
this Agreement. 

 
 

ARTICLE XII
  MISCELLANEOUS PROVISIONS    
  

 
 
        SECTION 12.1    Waivers, Amendments, etc.     The provisions of each 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 Borrowers and the Required Lenders except as otherwise provided herein; provided that no such amendment, modification or waiver shall: 

	(a)
	modify
this Section without the consent of all Lenders;

	(b)
	increase
the aggregate amount of any Credit Extensions required to be made by a Lender pursuant to its Commitments, extend the final Commitment Termination Date of Credit Extensions
made (or participated in) by a Lender or extend the final Stated Maturity Date for any Lender's Loan (including by way of a waiver of a payment default with respect thereto), in each case without the
consent of such Lender (it being agreed, however, that any vote to rescind any acceleration made pursuant to Section 9.2 and  Section 9.3 of
amounts owing with respect to the Loans and other Obligations shall only require the vote of the Required Lenders);

	(c)
	reduce
the principal amount of or rate of interest on any Lender's Loan, reduce any fees described in Article III payable to any
Lender or extend the date on which interest or fees are payable (including by way of a waiver of a payment default with respect thereto) in respect of such Lender's Loans, in each case without the
consent of such Lender;

	(d)
	reduce
the percentage set forth in the definition of "Required Lenders" or modify any requirement hereunder that any particular action
be taken by all Lenders without the consent of all Lenders;

	(e)
	increase
the Stated Amount of any Letter of Credit unless consented to by the Issuer of such Letter of Credit;

	(f)
	except
as otherwise expressly provided in a Loan Document, release (i) either Borrower from its Obligations under the Loan Documents, Parent from its obligations under the
Parent Guaranty and Pledge Agreement, Holdings from its obligations under the Holdings Guaranty and Pledge Agreement, USP International from its obligations under the USP International Guaranty and
Pledge Agreement, or any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty (except as otherwise provided in Section 5.3
herein), or (ii) all or any material portion all the Collateral under the Loan Documents, in each case without the consent of all Lenders; or

	(g)
	affect
adversely the interests, rights or obligations of the Administrative Agent (in its capacity as the Administrative Agent) or the Issuer (in its capacity as Issuer), unless
consented to by the Administrative Agent or the Issuer, as the case may be. 

No
failure or delay on the part of any Secured Party in exercising any power or right under any 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 Obligor in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Secured Party under any Loan Document shall, except as may be otherwise stated in such 

74

 

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 12.2    Notices; Time.     All notices and other communications provided under each Loan Document shall be
in writing or by facsimile and addressed, delivered or transmitted to the
applicable Person at its address or facsimile number set forth on Schedule III hereto or set forth in a Lender Assignment Agreement, or at such
other address or facsimile number as may be designated by such Person 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, shall be deemed given when the confirmation of transmission thereof is
received by the transmitter. The parties hereto agree that delivery of an executed counterpart of a signature page to this Agreement and each other Loan Document by facsimile shall be effective as
delivery of an original executed counterpart of this Agreement or such other Loan Document. Unless otherwise indicated, all references to the time of a day in a Loan Document shall refer to Nashville,
Tennessee time. 

 
 
        SECTION 12.3    Payment of Costs and Expenses.     Each Borrower agrees to pay on demand all expenses of the
Administrative Agent and the Lead Arranger (including the fees and out-of-pocket
expenses of Stites & Harbison PLLC, counsel to the Administrative Agent) in connection with 

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

	(b)
	the
filing or recording of any Loan Document (including the Filing Statements) and all amendments, supplements, amendment and restatements and other modifications to any thereof,
searches made following the Closing Date in jurisdictions where Filing Statements (or other documents evidencing Liens in favor of the Secured Parties) have been recorded and any and all other
documents or instruments of further assurance required to be filed or recorded by the terms of any Loan Document; and

	(c)
	the
preparation and review of the form of any document or instrument relevant to any Loan Document. 

Each
Borrower further agrees to pay, and to save each Secured Party harmless from all liability for, any stamp or other Taxes which may be payable in connection with the execution or delivery of each
Loan Document, the Credit Extensions or the issuance of the Revolving Notes. Each Borrower also agrees to reimburse each Secured Party upon demand for all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and legal expenses of counsel to each Secured Party) incurred by such Secured Party in connection with
(x) the negotiation of any restructuring or "work-out" with the applicable Borrower, whether or not consummated, of any Obligations and/or (y) the enforcement of any
Obligations and/or protection of any Secured Party's rights with respect to any Collateral or under any Loan Document. Each Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any transfer, duty stamp or other Taxes, recording and notorial fees, and other expenses, including without limitation, legal fees and expenses, incurred by Administrative Agent
and/or Lenders in connection with the preparation, delivery, filing, recordation or acknowledgement of deeds of assignment, amendments to Foreign Subsidiary Mortgages and Foreign Subsidiary Pledge and
Security Agreements or other instruments necessary to evidence the assignments by any Lender of all or a portion of its Commitments and Loans made to one or more Eligible Assignees up to an aggregate
amount of $115,000,000 of such assignments made (the "Maximum Assignments"; the Borrowers' 

75

 

obligations in connection with the Maximum Assignments herein called the "Maximum Assignment Costs");  provided, that the Borrowers will not be obligated to
deliver to Administrative Agent any Maximum Assignment Costs until after the occurrence of an
Event of Default. 

 
 
        SECTION 12.4    Indemnification.     In consideration of the execution and delivery of this Agreement by each
Secured Party, each Borrower hereby indemnifies, exonerates and holds each Secured Party
and each of their respective affiliates, 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, whether incurred in connection with actions between or among the parties hereto or the parties hereto and third parties (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to 

	(a)
	any
transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Credit Extension;

	(b)
	the
entering into and performance of any Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of either Borrower as the result of any
determination by the Required Lenders pursuant to Article VI not to fund any Credit Extension; provided that any such action is resolved in favor
of such Indemnified Party);

	(c)
	any
investigation, litigation or proceeding related to any acquisition or proposed acquisition by any Obligor or any Subsidiary thereof of all or any portion of the Equity Interests
or assets of any Person, whether or not an Indemnified Party is a party thereto;

	(d)
	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 any
Obligor or any Subsidiary thereof of any Hazardous Material;

	(e)
	the
presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or releases from, any real property owned or operated by any Obligor 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, such Obligor or Subsidiary; or

	(f)
	each
Lender's Environmental Liability (the indemnification herein shall survive repayment of the Obligations and any transfer of the property of any Obligor or its Subsidiaries by
foreclosure or by a deed in lieu of foreclosure for any Lender's Environmental Liability, regardless of whether caused by, or within the control of, such Obligor or such Subsidiary); 

except
for Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party's gross negligence or willful misconduct as determined in a
final, nonappealable judgment by a court of competent jurisdiction. Each Obligor and its successors and assigns hereby waive, release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Party under CERCLA or any state equivalent, or any similar law now existing or hereafter enacted. It is expressly understood and agreed that to the extent that any Indemnified
Party is strictly liable under any Environmental Laws, each Obligor's obligation to such Indemnified Party under this indemnity shall likewise be without regard to fault on the part of any Obligor
with respect to the violation or condition which results in liability of an Indemnified Party. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, each Obligor agrees to make the maximum 

76

 

contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 

 
 
        SECTION 12.5    Survival.     The obligations of the Borrowers under Sections
4.3, 4.4,  4.5, 4.6, 12.3 and 
12.4, and the obligations of the Lenders under Section 10.1, shall in each case survive any
assignment from one Lender to another (in the case of Sections 12.3 and 12.4 and the occurrence of the
Termination Date). The representations and warranties made by each Obligor in each Loan Document shall survive the execution and delivery of such Loan Document. 

 
 
        SECTION 12.6    Severability.     Any provision of any 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 such Loan Document or affecting the validity or enforceability of such provision in any other
jurisdiction. 

 
 
        SECTION 12.7    Headings.     The various headings of each Loan Document are inserted for convenience only and
shall not affect the meaning or interpretation of such Loan Document or any
provisions thereof. 

 
 
        SECTION 12.8    Execution in Counterparts, Effectiveness, etc.     This Agreement may be executed by the parties
hereto in several counterparts, each of which shall 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 each Borrower, the Administrative Agent and each Lender (or notice thereof satisfactory
to the Administrative Agent), shall have been received by the Administrative Agent. 

 
 
        SECTION 12.9    Governing Law; Entire Agreement.     EACH LOAN DOCUMENT (OTHER THAN THE LETTERS OF CREDIT, TO THE
EXTENT SPECIFIED BELOW AND EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY PRACTICES (ISP98—INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590 (THE
"ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter thereof and supersede any prior agreements, written or oral, with respect thereto. 

 
 
        SECTION 12.10    Successors and Assigns.     

	(a)
	The
provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that a
Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of each Lender (and any attempted assignment or transfer by such Borrower
without such consent shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors
and assigns permitted hereby and, to the extent expressly contemplated hereby, the Indemnified Parties) any legal or equitable right, remedy or claim under or by reason of this Agreement.

	(b)
	Any
Lender may assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitments and the
Loans at the time owing to it); provided that (i) except in the case of an assignment of the entire remaining amount of the assigning Lender's Commitments and the Loans at the time owing to it
or in the case of an assignment to a Lender or an Affiliate of a Lender or the 

77

 

Approved
Fund with respect to a Lender, the aggregate amount of the Commitments (which for this purpose includes Loans outstanding thereunder) or principal outstanding balance of the Loans of the
assigning Lender subject to each such assignment (determined as of the date the Lender Assignment Agreement with respect to such assignment is delivered to the Administrative Agent) shall not be less
than $1,000,000 unless the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrowers otherwise consent (each such consent not to be unreasonably withheld
or delayed), (ii) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the
Loans and/or the Commitments assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate branches, if
applicable, on a non-pro rata basis, and (iii) the parties to each assignment shall execute and deliver to the Administrative Agent (x) a Lender Assignment Agreement
(including, if the Eligible Assignee is not a Lender, the completion of the administrative details information attached thereto and the provision of any required tax forms), (y) a Power of
Attorney and (z) if the Maximum Assignments have been reached, an Escrow Agreement, together with, (A), if requested by the Administrative Agent, a processing and recordation fee of $1,000 and
(B) if an Escrow Agreement is required to be executed and delivered, the Escrow Funds described therein. Subject to acceptance and recording thereof by the Administrative Agent pursuant to  clause (c), from and after the effective date specified in each Lender Assignment Agreement, the Eligible Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Lender Assignment Agreement, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to
the extent of the interest assigned by such Lender Assignment Agreement, be released from its obligations under this Agreement (and, in the case of a Lender Assignment Agreement covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto, but shall continue to be entitled to the benefits of any provisions of this Agreement
which by their terms survive the termination of this Agreement). Notwithstanding the foregoing, each assigning Lender shall continue to be bound by the terms of its Lender Assignment Agreement, its
Power of Attorney and, if applicable, its Escrow Agreement. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d). If the
consent of the Borrowers to an assignment or to an Eligible Assignee is required hereunder (including a consent
to an assignment which does not meet the minimum assignment thresholds specified in this Section), the Borrowers shall be deemed to have given such consent five Business Days after the date notice
thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrowers prior to such fifth Business Day. 

	(c)
	The
Administrative Agent shall record each assignment made in accordance with this Section in the Register pursuant to  clause (b) of Section 2.7. The
Register shall be available for inspection by either
Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

	(d)
	Any
Lender may, without the consent of, or notice to, the Borrowers or the Administrative Agent, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitments and/or
the Loans owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and 

78

 

directly
with such Lender in connection with such Lender's rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement;  provided that such agreement or instrument
may provide that such Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver with respect to the following: (i) any reduction in the interest rate or amount of fees that such Participant is otherwise entitled to, (ii) a decrease in the
principal amount of, or an extension of the final Stated Maturity Date of, any Loan in which such Participant has purchased a participating interest or (iii) a release of all or substantially
all of the Collateral under the Loan Documents, Parent from its obligations under the Parent Guaranty and Pledge Agreement, Holdings from its obligations under the Holdings Guaranty and Pledge
Agreement, USP International from its obligations under the USP International Guaranty and Pledge Agreement or all or substantially all of the Subsidiary Guarantors from their obligations under the
Subsidiary Guaranty, in each case except as otherwise specifically provided in a Loan Document. Subject to clause (e), each Borrower agrees that
each Participant shall be entitled to the benefits of Sections 4.3, 4.4,  4.5, 4.6, 12.3 and  12.4 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
 clause (b). To the extent permitted by law, each Participant also shall be entitled to the benefits of
Section 4.9 as though it were a Lender; provided such Participant agrees to be subject to  Section 4.8 as though it were a Lender. Each Lender
that sells a participating interest in all or a portion of such Lender's rights and/or
obligations under this Agreement to a Participant, shall, as agent of the Borrowers solely for the purpose of this clause (d) of  Section 12.10,
record in book entries maintained by such Lender the name and the amount of the participating interest of each Participant
entitled to receive payments in respect of such participating interests. 

	(e)
	A
Participant shall not be entitled to receive any greater payment under Sections 4.3,  4.4, 4.5, 4.6,  12.3 and 12.4 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is made with each Borrower's prior written consent. A Participant that would be a Non-U.S.
Lender if it were a Lender shall not be entitled to the benefits of clause (a) of  Section 4.6 unless the Borrowers are notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrowers, to comply with clause (e) of  Section 4.6 as though it were a Lender.

	(f)
	Any
Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute
any such pledgee or assignee for such Lender as a party hereto. 

 
 
        SECTION 12.11    Other Transactions.     Nothing contained herein shall preclude the Administrative Agent, the
Issuer or any other Lender from engaging in any transaction, in addition to those
contemplated by the Loan Documents, with either Borrower or any of its Affiliates in which Borrower or such Affiliate is not restricted hereby from engaging with any other Person. 

 
 
        SECTION 12.12    Forum Selection and Consent to Jurisdiction.     ANY LITIGATION BASED HEREON, OR ARISING OUT OF,
UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUER OR EITHER BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF 

79

 

TENNESSEE OR IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE; PROVIDED THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. EACH BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF TENNESSEE, DAVIDSON COUNTY, TENNESSEE AND OF THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE 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 BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR
BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TENNESSEE AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 12.2. EACH 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 EITHER 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 BORROWER HEREBY
IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS. 

 
 
        SECTION 12.13    Waiver of Jury Trial.     THE ADMINISTRATIVE AGENT, EACH LENDER, THE ISSUER AND EACH BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW
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, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, SUCH LENDER, THE ISSUER OR SUCH BORROWER IN CONNECTION THEREWITH. EACH 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
ADMINISTRATIVE AGENT, EACH LENDER AND THE ISSUER ENTERING INTO THE LOAN DOCUMENTS. 

 
 
        SECTION 12.14    Confidentiality.     Each of the Lenders, the Issuer and the Administrative Agent agrees (on
behalf of itself and each of its affiliates, directors, officers, employees, agents,
advisors and representatives) to (a) use any Confidential Information only in connection with participating as a Lender, the Issuer or the Administrative Agent hereunder and. not
for any other purpose and (b) keep confidential any Confidential Information, and in connection therewith comply with its customary procedures for handling confidential information of this
nature; provided that nothing herein shall limit the disclosure of any such information (i) to the extent required by statute, rule, regulation
or judicial process, (ii) as requested or required by any governmental agency or representative thereof, (iii) to counsel and other professional advisors for any of the Lenders, the
Issuer or the Administrative Agent, (iv) to any Lender's, the Issuer's or the Administrative Agent's examiners, auditors or accountants, (v) to the Administrative Agent, any other Lender
or the Issuer, (vi) by the Administrative Agent, any Lender or the Issuer to an Affiliate of such Person, (vii) in connection with any litigation relating to enforcement of the Loan
Documents or (viii) to any assignee Lender or Participant (or prospective 

80

 

assignee Lender or Participant) or to direct contractual counterparties in Rate Protection Agreements entered into in connection with a portion or all of a Lender's rights to receive payments
hereunder (or such contractual counterparties' professional advisors); provided further that, in the case of the preceding  clause (i), such Lender,
the Issuer or the Administrative Agent, as the case may be, shall, to the extent legally permissible, use reasonable
efforts to notify the Borrowers of the proposed disclosure as soon as is reasonably practicable under the circumstances at such time. 

 
 
        SECTION 12.15    No Novation.     This Agreement amends and restates the Existing Credit Agreement, and the
Revolving Notes and the Swingline Note issued under this Agreement amend and restate any
notes issued under the Existing Credit Agreement. The execution of this Agreement, the Revolving Notes, the Swingline Note and/or any amendments to the other Loan Documents do not constitute, nor is
it the intention of the Secured Parties or the Obligors to create, a novation or release of the indebtedness evidenced by the Existing Credit Agreement, the notes issued thereunder or any other Loan
Document. 

        [SIGNATURE
PAGES TO FOLLOW] 

81

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

	 	 	USP DOMESTIC HOLDINGS, INC.,

as the US Borrower
	

 	
 	

By:	
/S/
 Mark A. Kopser
	 	 	Title:	SVP & CFO
	

 	
 	

USPE HOLDINGS LIMITED,

as the UK Borrower
	

 	
 	

By:	
/S/
 Mark A. Kopser
	 	 	Title:	SVP & CFO
	

 	
 	

SUNTRUST BANK,

as the Administrative Agent,

a Lender and Swingline Lender
	

 	
 	

By:	
/S/
 Mark D. Mattson
	 	 	Title:	Director
	

 	
 	

LEHMAN COMMERCIAL PAPER INC.,

as the Syndication Agent and a Lender
	

 	
 	

By:	
/S/
 Francis Chang
	 	 	Title:	Authorized Signatory
	

 	
 	

CREDIT SUISSE FIRST BOSTON,

acting through its Cayman Islands Branch,

as the Documentation Agent and a Lender
	

 	
 	

By:	
/S/
 Christopher Lally
	 	 	Title:	Vice President
	

 	
 	

By:	
/S/
 Guy M. Baron
	 	 	Title:	Associate
	

 	
 	

BANK OF AMERICA, N.A.,

as a Lender
	

 	
 	

By:	
/S/
 Kevin Bertelson
	 	 	Title:	Principal
	

 	
 	

SOCIETE GENERALE,

as a Lender
	

 	
 	

By:	
/S/
 Carol Radice
	 	 	Title:	Vice President

82

 

	

 	
 	

SOUTHWEST BANK OF TEXAS,

as a Lender
	

 	
 	

By:	
/S/
 William B. Pyle
	 	 	Title:	Senior Vice President
	

 	
 	

BANK OF OKLAHOMA, N.A.,

as a Lender
	

 	
 	

By:	
/S/
 Heather E. Williams
	 	 	Title:	Assistant Vice President

83

 
 

EXHIBIT A    
  

 
 

REVOLVING NOTE    
  

	$	 	 	 	 	 	,	20	    
	 	
	 	 	 	
	 	 	

        FOR
VALUE RECEIVED, the [US BORROWER] [UK BORROWER] promises to pay to the order of                        (the
"Lender") on the Stated Maturity Date the principal sum of                        
($                        ) or, if less, the aggregate unpaid principal amount of all
Loans shown on the schedule attached hereto (and any continuation thereof) made (or continued) by the Lender pursuant to that certain Second Amended and Restated Credit Agreement, dated as of November
            , 2002 (as amended, supplemented, and/or restated from time to time, the "Credit Agreement"), among the USP Domestic
Holdings, Inc., a Delaware corporation (the "US Borrower"), USPE Holdings Limited, a company incorporated in England and Wales (the
"UK Borrower"), the various financial institutions and other Persons from time to time parties thereto (including the Lender), and SunTrust Bank, as
Administrative Agent for the Lenders (the "Administrative Agent"). Terms used in this Note, unless otherwise defined herein, have the meanings provided
in the Credit Agreement. 

        The
[US][UK] 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 Dollars in same day or immediately available funds to the account designated by the Administrative Agent pursuant to the Credit
Agreement. 

        This
Note is one of the Revolving 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 US 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. 

        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 NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

 
 

EXHIBIT A1    
  

 
 

SWINGLINE NOTE    
  

	$10,000,000.00	 	 	 	 	,	20	 
	 	 	 	 	
	 	 	

        FOR
VALUE RECEIVED, the [US BORROWER] [UK BORROWER] promises to pay to the order of SUNTRUST BANK (the "Swingline
Lender") on the Stated Maturity Date the principal sum of up to TEN MILLION and no/100 ($10,000,000.00) or, if less, the aggregate unpaid principal amount of all Loans shown on
the schedule attached hereto (and any continuation thereof) made (or continued) by the Lenders pursuant to that certain Second Amended and Restated Credit Agreement, dated as of November
            , 2002 (as amended, supplemented, and/or restated from time to time, the "Credit Agreement"), among the USP Domestic
Holdings, Inc., a Delaware corporation (the "US Borrower"), USPE Holdings Limited, a company incorporated in England and Wales (the
"UK Borrower"; and the US Borrower and the UK Borrower individually a "Borrower"), the various financial
institutions and other Persons from time to time parties thereto (including the Swingline Lender), and SunTrust Bank, as Administrative Agent for the Lenders (the
"Administrative Agent"). Terms used in this Note, unless otherwise defined herein, have the meanings provided in the Credit Agreement. 

        Any
Swingline Loans made by Lender to the other Borrower (a "Other Borrower Swingline Loan") under, and in accordance with the terms of,
the Credit Agreement shall reduce the available principal balance hereunder for such time period as such Other Borrower Swingline Loan(s) is/are outstanding in an amount equal to the principal balance
outstanding from time to time of such Other Borrower Swingline Loan(s). 

        The
[US] [UK] 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 Dollars in same day or immediately available funds to the account designated by the Administrative Agent pursuant to the Credit
Agreement. 

        This
Swingline Note is one of the Swingline 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 Swingline Note and for a statement of the terms and conditions on which the [US] [UK] Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this Swingline Note and on which such Indebtedness may be declared to be immediately due and payable. 

        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 NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

 
 

EXHIBIT B    
  

 
 

BORROWING REQUEST    

SunTrust
Bank, as the

  Administrative Agent on behalf of the Lenders

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson 

USP
DOMESTIC HOLDINGS, INC.

USPE HOLDINGS LIMITED 

Ladies
and Gentlemen: 

        This
Borrowing Request is delivered to you pursuant to Section 2.3.1 of the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as amended,
supplemented and/or restated from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc., a Delaware corporation (the
"US Borrower"), USPE Holdings Limited, a company organized under the laws of England (the "UK Borrower",
together with the US Borrower, collectively, the "Borrowers" and, each individually, a "Borrower"), the
Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First Boston, as Documentation Agent. Terms used herein, unless otherwise
defined herein, have the meanings provided in the Credit Agreement. 

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

        The
undersigned Borrower hereby acknowledges that, pursuant to Section 6.2.2 of the Credit Agreement, each of the delivery of this Borrowing Request and the acceptance by the
undersigned Borrower of the proceeds of the Loans requested hereby constitutes a representation and warranty by the undersigned Borrower that, on the date of the making of such Loans, and both before
and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in Section 6.2.1 of the Credit Agreement are true and correct in all material respects
(unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date). 

        The
undersigned 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 in all material respects at
such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the Borrowing requested hereby the Administrative Agent shall
receive written notice to the contrary from either Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects 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: 

	 
	 
	 	Person to be Paid
	 	 
	 

	Amount to

be Transferred
	 	Name
 
	 	Account No.
	 	Name, Address, etc.

Of Transferee Lender
 

	$	 	 	 	 	 	 	 	 
	 	
	 	
	 	
	 	

	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	Attention:	

	

$	

 	
 	

 	
 	

 	
 	

 	

 
	 	
	 	
	 	
	 	

	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	Attention:	

	

$	

 	
 	

 	
 	

 	
 	

 	

 
	 	
	 	
	 	
	 	

	 	 	 	 	 	 	 	

	 	 	 	 	 	 	 	Attention:	

	

Balance of such proceeds	
 	

[US] [UK]Borrower	
 	

 	
 	

    

	 	 	 	 	 	 	 	Attention:	

        IN
WITNESS WHEREOF, the undersigned Borrower has caused this Borrowing Request to be executed and delivered, and the certifications and warranties contained herein to be made, by its
duly Authorized Officer this            day of                        ,
                        . 

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

2

 
 

EXHIBIT B1    
  

 
 
 
 
 

NOTICE OF SWINGLINE BORROWING
  [Date]    
  

SunTrust
Bank, as the

  Administrative Agent on behalf of the Lenders

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson 

Ladies
and Gentlemen: 

        This
Notice of Swingline Borrowing is delivered to you pursuant to Section 2.3.2 of the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as
amended, supplemented and/or restated from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc., a Delaware corporation (the
"US Borrower"), USPE Holdings Limited, a company organized under the laws of England (the "UK Borrower",
together with the US Borrower, collectively, the "Borrowers" and, each individually, a "Borrower"), the
Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First Boston, as Documentation Agent. Terms used herein, unless otherwise
defined herein, have the meanings provided in the Credit Agreement. 

        The
undersigned Borrower hereby requests that a Swingline Loan be made in the aggregate principal amount of
$                        on                 
           ,            at such
rate of interest as may be agreed to by and between Borrowers and Swingline Lender, for such Interest Period as may be agreed to between Borrowers and Swingline Lender. 

        The
undersigned Borrower hereby acknowledges that, pursuant to Section 6.2.2 of the Credit Agreement, each of the delivery of this Notice of Swingline Borrowing and the acceptance
by the undersigned Borrower of the proceeds of the Swingline Loan requested hereby constitutes a representation and warranty by the undersigned Borrower that, on the date of the making of such
Swingline Loan, and both before and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in Section 6.2.1 of the Credit Agreement are true and
correct in all material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such
earlier date). 

        IN
WITNESS WHEREOF, the undersigned Borrower has caused this Notice of Swingline Borrowing to be executed and delivered, and the certifications and warranties contained herein to be
made, by its duly Authorized Officer this            day
of                        ,
                        . 

	 	 	Very truly yours,
	

 	
 	

[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

 
 

EXHIBIT C    
  

 
 

ISSUANCE REQUEST    

SunTrust
Bank, as the

  Administrative Agent on behalf of the Lenders

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson 

USP
DOMESTIC HOLDINGS, INC.

USPE HOLDINGS LIMITED 

Ladies
and Gentlemen: 

        This
Issuance Request is delivered to you pursuant to Section 2.6 of the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as amended,
supplemented and/or restated from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc., a Delaware corporation (the
"US Borrower"), USPE Holdings Limited, a company organized under the laws of England (the "UK Borrower",
together with the US Borrower, collectively, the "Borrowers" and, each individually, a "Borrower"), the
Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First Boston, as Documentation Agent. Terms used herein, unless otherwise
defined herein, have the meanings provided in the Credit Agreement. 

        The
undersigned Borrower hereby requests that
on                                    ,
            (the "Date of Issuance") SUNTRUST BANK
(the "Issuer") [issue a Letter of Credit in the initial Stated Amount of
$                        
with a Stated Expiry Date (as
defined therein) of                                    ,
            ] [extend the Stated Expiry Date (as defined under Letter of
Credit No.    , issued
on                                    ,
            , in the initial Stated Amount of $            ) to a revised Stated Expiry Date (as defined therein) of
                                    ,
            ]. 

        The
beneficiary of the requested Letter of Credit will be and such Letter of Credit will be in support of                        .

        The
undersigned Borrower hereby acknowledges that, pursuant to Section 6.2.2 of the Credit Agreement, each of the delivery of this Issuance Request and the acceptance by the
undersigned Borrower of the [issuance]
[extension] of the Letter of Credit requested hereby constitutes a representation and warranty by the
undersigned Borrower that, on the date of such [issuance]
[extension], and both before and after giving effect thereto and to the application of the proceeds or
benefits of the Letter of Credit [issued]
[extended] in accordance herewith, all statements set forth in Section 6.2.1 of the Credit
Agreement are true and correct in all material respects (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material
respects as of such earlier date). 

        The
undersigned Borrower agrees that if prior to the time of the [issuance]
[extension]of the Letter of Credit requested hereby any matter certified to herein by it will not be
true and correct in all material respects at such time as if then made, it will immediately so notify the Administrative Agent. Except to the extent, if any, that prior to the time of the  [issuance]
[extension] of the Letter of Credit requested hereby the Administrative Agent shall receive written
notice to the contrary from either Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such  [issuance]
[extension] as if then made. 

 

        IN
WITNESS WHEREOF, the undersigned Borrower has caused this Issuance Request to be executed and delivered, and the certifications and warranties contained herein to be made, by its duly
Authorized Officer this            day of                        ,
            . 

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

2

 
 

EXHIBIT D    
  

 
 

CONTINUATION/CONVERSION NOTICE    

SunTrust
Bank, as the

  Administrative Agent on behalf of the Lenders

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson 

 
 

USP DOMESTIC HOLDINGS, INC.
  USPE HOLDINGS LIMITED    

Ladies
and Gentlemen: 

        This
Continuation/Conversion Notice is delivered to you pursuant to Section 2.4 of the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as
amended, supplemented, amended and restated or otherwise modified from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc.,
a Delaware corporation (the "US Borrower"), USPE Holdings Limited, a company organized under the laws of England (the "UK
Borrower", together with the US Borrower, collectively, the "Borrowers" and, each individually, a
"Borrower"), the Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First
Boston, as Documentation Agent. Terms used herein, unless otherwise defined herein, have the meanings provided in the Credit Agreement. 

        The
undersigned Borrower hereby requests that
on                                    ,
            , 

        (1)  $            of
the presently outstanding principal amount of the Loans originally made
on                                    ,
            , presently being
maintained as [Base Rate Loans] [LIBO Rate
Loans], 

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

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

        The
undersigned Borrower hereby: 

        (a)  certifies
and warrants that no Default has occurred and is continuing; and 

        (b)  agrees
that if prior to the time of the [continuation]
[conversion] 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 Administrative Agent. 

        Except
to the extent, if any, that prior to the time of the [continuation]
[conversion] requested hereby the Administrative Agent shall receive written notice to the contrary from
either Borrower, each matter certified to herein shall be deemed once again to be certified as true and correct in all material respects at the date of such  [continuation]
[conversion] as if then made. 

        IN
WITNESS WHEREOF, the undersigned Borrower has caused this Continuation/Conversion Notice to be executed and delivered, and the certifications and warranties contained herein to be
made, by its duly Authorized Officer this            day
of                        ,            .
 

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

 
 

EXHIBIT E    
  

 
 
 
 
 

COMPLIANCE CERTIFICATE
  
    USP DOMESTIC HOLDINGS, INC.
  USPE HOLDINGS LIMITED    

        This
Compliance Certificate is delivered pursuant to clause (d) of Section 8.1.1 of the Second Amended and Restated Credit Agreement, dated as of November    ,
2002 (as amended, supplemented, amended and restated or otherwise modified from time to time, the "Credit Agreement"), among USP Domestic
Holdings, Inc., a Delaware corporation (the "US Borrower"), USPE Holdings Limited, a company organized under the laws of England and Wales (the
"UK Borrower", together with the US Borrower, collectively, the "Borrowers" and, each individually, a
"Borrower"), the Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First
Boston, as Documentation Agent. Terms used herein, unless otherwise defined herein, have the meanings provided in the Credit Agreement. 

        The
[US] [UK] Borrower hereby certifies, represents and warrants in respect of the period (the "Computation
Period") of four Fiscal Quarters ending
on                                    ,
            (such latter date being the "Computation
Date"): 

	(a)
	As
of the Computation Date, no Default had occurred and was continuing[, except for                        ].

	(b)
	The
Total Funded Debt to EBITDA Ratio was            :1, as computed on Attachment 1 hereto. The maximum Total Funded Debt
to EBITDA Ratio permitted pursuant to clause (a) of Section 8.2.4 of the Credit Agreement on the Computation Date is            :1, and, accordingly, the covenant
[has][has not] been complied with.

	(c)
	The
Senior Funded Debt to EBITDA Ratio was            :1, as computed on Attachment 2 hereto. The maximum Senior Funded Debt
to EBITDA Ratio permitted pursuant to clause (b) of Section 8.2.4 of the Credit Agreement on the Computation Date is 2.00:1, and, accordingly, the covenant [has]
[has not] been complied with.

	(d)
	The
Fixed Charge Coverage Ratio was            :1, as computed on Attachment 3 hereto. The minimum Fixed Charge Coverage
Ratio required pursuant to clause (c) of Section 8.2.4 of the Credit Agreement on the Computation Date is            :1, and, accordingly, the covenant [has]
[has not] been complied with.

	(e)
	The
Interest Coverage Ratio was            :1, as computed on Attachment 4 hereto. The minimum Interest Coverage Ratio
required pursuant to clause (d) of Section 8.2.4 of the Credit Agreement on the Computation Date is            :1, and, accordingly, the covenant
[has][has not] been complied with.

	(f)
	The
Parent Total Debt to Parent Total Capitalization Ratio was            :1, as computed on Attachment 5 hereto. The
maximum Parent Total Debt to Parent Total Capitalization Ratio permitted pursuant to Section 9.1.12 of the Credit Agreement is            :1, and, accordingly, [no]
[a] Default has occurred [and is continuing].

	(g)
	The
Other Indebtedness to EBITDA (plus amounts attributable to Minority Interests) ratio was            :1, as computed on  Attachment 6
hereto. The maximum Other Indebtedness to EBITDA (plus amounts attributable to Minority Interests) ratio permitted pursuant to
clause (h) of Section 8.2.2 of the Credit Agreement on the Computation Date is            :1, and, accordingly, the covenant [has] [has
not] been complied with. 

        The
[US] [UK] Borrower hereby further certifies, represents and warrants that the aggregate of Assigned Portions transferred pursuant to
Lenders Assignment Agreements from the Closing Date until the date first above written, is $                        . 

 

        IN
WITNESS WHEREOF, the [US] [UK] Borrower has caused this Compliance Certificate to be executed and delivered, and the certification and
warranties contained herein to be made, by its officer thereunto duly authorized as of the date first above written. 

	 	 	[USP DOMESTIC HOLDINGS, INC.]

[USPE HOLDINGS LIMITED]
	

 	
 	

By:	

 
	 	 	 	

	

 	
 	

Title:	

 
	 	 	 	

2

Attachment 1

(to    /    /    Compliance

Certificate) 

 
 

TOTAL FUNDED DEBT TO EBITDA RATIO

on                                 
  (the "Computation
Date")    

	A.	 	Total Funded Debt: the outstanding principal amount of the following types of Indebtedness of the Borrower and its Consolidated Entities (in each case exclusive of intercompany Indebtedness between the Borrower and its
Consolidated Entities):	 	 	 
	

 	
 	

(1)	
 	

All obligations for borrowed money or advances and all obligations evidenced by bonds, debentures, notes or other similar instruments	
 	
$	

 
	

 	
 	

(2)	
 	

All obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, bank guarantees, banker's acceptances, and similar instruments	
 	
$	

 
	

 	
 	

(3)	
 	

All obligations under any conditional sale or other title retention agreements relating to property acquired by Borrower	
 	
$	

 
	

 	
 	

(4)	
 	

All Capitalized Lease Liabilities	
 	
$	

 
	

 	
 	

(5)	
 	

Net Hedging Obligations	
 	
$	

 
	

 	
 	

(6)	
 	

All obligations to pay the deferred purchase price of property or services after receipt or performance thereof (excluding trade accounts payable in the ordinary course of business which are not overdue for a period of more than 90 days or, if
overdue for more than 90 days, as to which a good faith dispute exists and adequate reserves in conformity with GAAP have been established), and indebtedness secured by (or for which the holder of such indebtedness has an existing right, contingent
or otherwise, to be secured by) a Lien on property owned or being acquired (including indebtedness arising under conditional sales or other title retention agreements, but excluding earn-outs or other contingent purchase price adjustments in
connection with acquisitions to the extent not yet determined), whether or not such indebtedness shall have been assumed or is limited in recourse	
 	
$	

 
	

 	
 	

(7)	
 	

Off-balance sheet liabilities retained in connection with asset securitization programs, Synthetic Leases, sale and leaseback transactions or other similar obligations arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet	
 	
$	

 
	

 	
 	

(8)	
 	

All obligations, contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity Interest; provided that if such obligation to purchase, redeem or otherwise acquire an
Equity Interest is contingent upon a change in law, or change in the interpretation or application thereof, such obligation will not be deemed "Total Funded Debt" for purposes of this definition until such change in the applicable law, or the change
in the application or interpretation thereof, becomes effective	
 	
$	

 
	

 	
 	

(9)	
 	

Contingent Liabilities in respect of any of the foregoing	
 	
$	

 
	
 	
 	

 	
 	

 	
 	

 	
 	
 	

 

 

	

 	
 	

(10)	
 	

The sum of Items A(1) through A(9)	
 	
$	

 
	

B.	
 	

EBITDA: the sum, for the Borrower and its Consolidated Entities, of:	
 	
 	

 
	

 	
 	

(1)	
 	

Net Income (the aggregate of all amounts, exclusive of all amounts in respect of any extraordinary gains but including extraordinary losses, which would be included as net income on the consolidated financial statements of the Borrower and its
Consolidated Entities)	
 	
$	

 
	

 	
 	

(2)	
 	

To the extent deducted in determining Net Income, the sum of the following:	
 	
 	

 
	

 	
 	

 	
 	

(a)	
 	

Amounts attributable to amortization	
 	
$	

 
	

 	
 	

 	
 	

(b)	
 	

Income tax expense	
 	
$	

 
	

 	
 	

 	
 	

(c)	
 	

Interest Expense (the sum of (a) total interest expense (both accrued and paid), including without limitation the interest component of any payments in respect of Capitalized Lease Liabilities or expensed during such period (whether or not actually
paid during such period) plus (b) the net amount payable (or minus the net amount receivable) under Hedging Obligations during such period (whether or not
actually paid or received during such period))	
 	
$	

 
	

 	
 	

 	
 	

(d)	
 	

Depreciation of assets	
 	
$	

 
	

 	
 	

(3)	
 	

The sum of Items B (2)(a) through B(2)(d)	
 	
$	

 
	

 	
 	

(4)	
 	

Adjustments to EBITDA giving pro forma effect to	
 	
 	

 
	

 	
 	

 	
 	

(a)	
 	

Permitted Acquisitions made during such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Acquisitions had been made at the beginning of such period, plus	
 	
$	

 
	

 	
 	

 	
 	

(b)	
 	

Permitted Dispositions during such period (such adjustment to be reasonably satisfactory to the Administrative Agent) as if such Permitted Dispositions had been made at the beginning of such period	
 	
$	

 
	

 	
 	

(5)	
 	

EBITDA: the sum of Items B(1), B(3), B(4)(a) and B(4)(b)	
 	
$	

 
	

C.	
 	

TOTAL FUNDED DEBT TO EBITDA RATIO: the ratio of Item A(10) to Item B(5)	
 	
 	

: 1

2

Attachment 2

(to    /    /    Compliance

Certificate) 

 
 

SENIOR FUNDED DEBT TO EBITDA RATIO

on                                 
  (the "Computation
Date")    

	A.	 	Senior Funded Debt:	 	 	 
	

 	
 	

(1)	
 	

Total Funded Debt (see Item A(10) of Attachment 1)	
 	
$	

 
	

 	
 	

(2)	
 	

Subordinated Debt	
 	
$	

 
	

 	
 	

(3)	
 	

Item A(1) less Item A 2	
 	
$	

 
	

B.	
 	

EBITDA (see Item B(5) of Attachment 1)	
 	
$	

 
	

C.	
 	

SENIOR FUNDED DEBT TO EBITDA RATIO: the ratio of Item A(3) to Item B	
 	
 	

: 1

Attachment 3

(to    /    /    Compliance

Certificate) 

 
 

FIXED CHARGE COVERAGE RATIO

on                                 
  (the "Computation
Date")    

	A.	 	EBITDA (see Item B(5) of Attachment 1)*	 	$	 
	

B.	
 	

Amounts attributable to Minority Interests to the extent deducted in determining Net Income	
 	
$	

 
	

C.	
 	

Maintenance Capital Expenditures (any Capital Expenditures made with respect to the maintenance of existing assets)	
 	
$	

 
	

D.	
 	

The sum of Item A and Item B less Item C	
 	
$	

 
	

E.	
 	

Fixed Charges:	
 	
 	

 
	

 	
 	

(1)	
 	

Interest Expense (see Item B(2)(c) of Attachment 1)	
 	
$	

 
	

 	
 	

(2)	
 	

All scheduled principal repayments of Indebtedness made during the Computation Period	
 	
$	

 
	

 	
 	

(3)	
 	

All income Taxes actually paid in cash	
 	
$	

 
	

 	
 	

(4)	
 	

The sum of Items E(1) through E(3)	
 	
$	

 
	

F.	
 	

FIXED CHARGE COVERAGE RATIO: the ratio of Item D to Item E(4)	
 	
 	

: 1

	*
	provided, however, EBITDA will not be adjusted to give proforma effect to Permitted Acquisitions made during such Computation Period 

Attachment 4

(to    /    /    Compliance

Certificate) 

 
 

INTEREST COVERAGE RATIO

on                                 
  (the "Computation
Date")    

	A.	 	EBIT: the sum, for the Borrower and its Consolidated Entities, of:*	 	 	 
	 	 	(1)	 	Net Income (the aggregate of all amounts, exclusive of all amounts in respect of any extraordinary gains but including extraordinary losses, which would be included as net income on the consolidated financial statements of
the Borrower and its Consolidated Entities)	 	$	 
	

 	
 	

(2)	
 	

To the extent deducted in determining Net Income, the sum of the following:	
 	
 	

 
	

 	
 	

 	
 	

(a)	
 	

Income tax expense	
 	
$	

 
	

 	
 	

 	
 	

(b)	
 	

Interest Expense (the sum of (a) total interest expense (both accrued and paid), including without limitation the interest component of any payments in respect of Capitalized Lease Liabilities or expensed during such period (whether or not actually
paid during such period) plus (b) the net amount payable (or minus the net amount receivable) under Hedging Obligations during such period (whether or not actually paid or received during such period))	
 	
$	

 
	

 	
 	

 	
 	

(c)	
 	

Minority Interest (with respect to the Consolidated Entities, the Equity Interests held by a Person other than US Borrower, the UK Borrower or Subsidiary Guarantors, as reflected in the financial statements of the applicable Borrower in accordance
with GAAP)	
 	
 	

 
	

 	
 	

(3)	
 	

The sum of Items A(2)(a) and A(2)(b)	
 	
$	

 
	

 	
 	

(4)	
 	

EBIT: the sum of Items A(1) and A(3)	
 	
$	

 
	

B.	
 	

Interest Expense (see Item B(2)(c) of Attachment 1)	
 	
$	

 
	

C.	
 	

INTEREST COVERAGE RATIO: the ratio of Item A to Item B	
 	
 	

:1

	*
	provided, however, EBIT will not be adjusted to give proforma effect to Permitted Acquisitions made during such Computation Period 

Attachment 5

(to    /    /    Compliance

Certificate) 

 
 

PARENT TOTAL DEBT TO PARENT TOTAL CAPITALIZATION RATIO

on                                 
  (the "Computation
Date")    

	A.	 	Parent Total Debt: the outstanding principal amount of the following types of Indebtedness of the Parent and its Subsidiaries:	 	 	 
	

 	
 	

(1)	
 	

All obligations for borrowed money or advances and all obligations evidenced by bonds, debentures, notes or other similar instruments	
 	
$	

 
	

 	
 	

(2)	
 	

All obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker's acceptances	
 	
$	

 
	

 	
 	

(3)	
 	

All Capitalized Lease Liabilities	
 	
$	

 
	

 	
 	

(4)	
 	

Off-balance sheet liabilities retained in connection with asset securitization programs, Synthetic Leases, sale and leaseback transactions or other similar obligations arising with respect to any other transaction which is the functional equivalent
of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet	
 	
$	

 
	

 	
 	

(5)	
 	

Contingent Liabilities in respect of any of the foregoing	
 	
$	

 
	

B.	
 	

The sum of Items A(l) through A(5)	
 	
$	

 
	

C.	
 	

Parent Total Capitalization:	
 	
 	

 
	

 	
 	

(1)	
 	

All amounts (without duplication) which, in accordance with GAAP, would be included in Parent's stockholders' equity (excluding unrealized gains or losses recorded pursuant to FAS 115) as required to be reported in Parent's then most recent
consolidated balance sheet	
 	
$	

 
	

 	
 	

(2)	
 	

Parent Total Debt (see Item B)	
 	
$	

 
	

D.	
 	

The sum of Items C(1) and C(2)	
 	
$	

 
	

E.	
 	

PARENT TOTAL DEBT TO PARENT TOTAL CAPITALIZATION RATIO: the ratio of Item B to Item D	
 	
 	

:1

Attachment 6

(to    /    /    Compliance

Certificate) 

 
 

OTHER INDEBTEDNESS TO EBITDA RATIO

on                                 
  (the "Computation
Date")    

	A.	 	EBITDA (see Item B(5) of Attachment 1)	 	$	 
	

B.	
 	

Amounts attributable to Minority Interests to the extent deducted in determining Net Income	
 	
$	

 
	

C.	
 	

The sum of Items A and B	
 	
$	

 
	

D.	
 	

Total Funded Debt (see Item A(10) of Attachment 1)	
 	
$	

 
	

E.	
 	

Subordinated Debt (see Item A(2) of Attachment 2)	
 	
$	

 
	

F	
 	
Item D less Item E	
 	
$	

 
	

G	
 	

The sum of Item F and all amounts outstanding under all Revolving Notes and the Swingline Note	
 	
$	

 
	

H	
 	

OTHER INDEBTEDNESS RATIO: the ratio of Item G to Item C	
 	
 	

:1

 
 

EXHIBIT F    
  

 
 

LENDER ASSIGNMENT AGREEMENT    
  

	 	 	 	,	 
	 	 	
	 	

USP
Domestic Holdings, Inc.

USPE Holdings Limited

17103 Preston Road

Suite 200 North Dallas,

TX 75248

Attention: Donald E. Steen, CEO 

SunTrust
Bank, as the

  Administrative Agent on behalf of the Lenders

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson 

USP
DOMESTIC HOLDINGS, INC.

USPE HOLDINGS LIMITED 

Ladies
and Gentlemen: 

        We
refer to clause (b) of Section 12.10 of the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc., a Delaware corporation (the
"US Borrower"), USPE Holdings Limited, a company organized under the laws of England and Wales (the "UK
Borrower", and together with the US Borrower, collectively, the "Borrowers" and, each individually, a
"Borrower"), the Lenders, SunTrust Bank, as Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First
Boston, as Documentation Agent. Terms used herein, unless otherwise defined herein, have the meanings provided in the Credit Agreement. 

        As
of                                    ,
            (the "Assignment Date"),
                        (the
"Assignor") irrevocably sells, transfers, conveys and assigns, without recourse, representation or warranty (except as expressly set forth herein), to
                        (the "Assignee"), and the Assignee irrevocably purchases
from the Assignor that portion of the Loans and Commitments of the Assignor as
set forth on Schedule I hereto (the "Assigned Portion") with, if applicable, conveyances of the
Loans to include the Assignor's pro rata portion of any Letter of Credit Outstandings as of the Assignment Date under the Credit Agreement, so that,
after giving effect to the foregoing assignment and delegation, the Assignor's and the Assignee's Percentages for the purposes of each Loan Document will be as set forth on  Schedule I hereto.

        In
addition, this agreement constitutes notice to each of you, pursuant to clause (b) of Section 12.10 of the Credit Agreement, of the assignment and delegation to the
Assignee of the Assigned Portion of the Credit Extensions and Commitments of the Assignor outstanding under the Credit Agreement as of the Assignment Date. 

        Any
accrued and unpaid interest, fees and other payments related to the Assigned Portion applicable to the period prior to the Assignment Date shall be for the account of the Assignor.
Any accrued and unpaid interest, fees and other payments related to the Assigned Portion applicable to the period from and after the Assignment Date shall be for the account of the Assignee. Each of
the Assignor and the Assignee severally agrees that it will hold for the other party any interest, fees and other payments which it may receive to which the other party is entitled pursuant to any
agreement between the parties and pay to the other party any such amounts which it may receive promptly upon receipt thereof. In furtherance of the foregoing, the Administrative Agent will, and is
hereby authorized to, pay over to the Assignee and the Assignor such amounts to which each is entitled. 

 

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

        The
Assignor represents and warrants that it is legally authorized to enter into and deliver this agreement and represents that it is the legal and beneficial owner of the Assigned
Portion and that such Assigned Portion is free and clear of any adverse claim. Except as set forth in the previous sentence, the Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations made pursuant to or in connection with this agreement, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this agreement, any other Loan Document or any other instrument or document furnished pursuant hereto or thereto, including the financial condition of the Borrowers or any of
their Subsidiaries or the performance or observance by any Lender of any of its obligations under any Loan Document or any other instrument or document furnished pursuant hereto or thereto. The
Assignee represents and warrants that it is legally authorized to enter into and deliver this agreement and confirms that it has received copies of the most recent financial statements delivered
pursuant to the Credit Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this agreement. In addition, the
Assignee independently and without reliance upon the Assignor, the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, shall
continue to make its own credit decisions in taking or not taking action under the Loan Documents and the other instruments and documents delivered in connection therewith. 

        Except
as otherwise provided in the Credit Agreement, effective as of the Assignment Date, 

        (a)  the
Assignee 

          (i)  shall
be deemed automatically to have become a party to the Credit Agreement and shall have all the rights and obligations of a
"Lender" under the 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 each of the Loan Documents as if it were an original signatory thereto; and 

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

        The
Assignor and the Assignee hereby acknowledge and agree that a deed of assignment, amendments or other instruments or documents evidencing the transfer of the Assigned Portion as it
relates to the Foreign Subsidiary Mortgages and the Foreign Subsidiary Pledge and Security Agreements may need to be executed before a Spanish notary public and filed and recorded in accordance with
Spanish laws and regulations and in connection therewith, each Assignor and Assignee hereby deliver to Administrative Agent a completed and duly executed Power of Attorney and apostille in the form of  Exhibit A attached hereto (the "Power of Attorney") giving Administrative Agent, its successors
and assigns, the authority and power to execute, or have executed, on behalf of Assignor and Assignee the necessary documentation to evidence such transfer. Additionally, in the event the aggregate
amount of assignments previously made pursuant to clause (b) of Section 12.10 of the
Credit Agreement have reached the Maximum Assignments, Assignor hereby delivers to Administrative Agent a completed and duly executed Escrow Agreement in the form of  Exhibit B attached hereto along
with 

2

 

an amount equal to the Escrow Funds (as such amount is determined by Administrative Agent and reflected in the Escrow Agreement) to be held in accordance therewith. 

        [The
Assignor and the Assignee hereby agree that the [Assignor] [Assignee] will pay to the Administrative Agent the processing
fee, if applicable, referred to in Section 12.10 of the Credit Agreement.] 

        The
Assignee hereby advises each of you that the Assignee's administrative details with respect to the Assigned Portion are on file with the Administrative Agent, and requests the
Administrative Agent to acknowledge receipt of this document. 

        The
Assignee agrees (for the benefit of the Assignor, the Borrowers and the Administrative Agent) to furnish, if required by Section 4.6 of the Credit Agreement, the applicable
Internal Revenue Service forms or other forms required thereunder no later than the date of acceptance hereof by the Administrative Agent. In addition, the Assignee represents and warrants (for the
benefit of the Assignor, the Borrowers and the Administrative Agent) that, under applicable law and treaties in effect as of the date hereof, no United States federal taxes will be required to be
withheld by the Administrative Agent or the Borrowers with respect to any payments to be made to the Assignee in respect of the Credit Agreement. 

        Notwithstanding
any other provisions hereof, to the extent the consents of or notice to the Borrowers, the Administrative Agent and/or the Issuer are required under Section 12.10
of the Credit Agreement, the assignment and delegation contemplated in this agreement shall not be effective unless such consents or notices shall have been obtained and in any event no such
assignment and delegation shall be effective unless and until such assignment has been recorded in the Register by the Administrative Agent. 

        This
agreement may be executed by the Assignor and Assignee (and, if applicable, accepted and agreed to by the Administrative Agent, the Issuer and the Borrowers) 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. 

        THIS AGREEMENT WILL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

[SIGNATURE
PAGES TO FOLLOW] 

3

 

        IN
WITNESS WHEREOF, the parties have caused this Lender Assignment Agreement to be duly executed and delivered as of the date first above written. 

	 	 	[NAME OF ASSIGNOR]
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Title:	 	 
	 	 	 	 	

	

 	
 	

[NAME OF ASSIGNEE]
	

 	
 	

By:	
 	

 
	 	 	 	 	

	 	 	Title:	 	 
	 	 	 	 	

	Accepted and Acknowledged

this            day of                        ,	 	 
	

USP DOMESTIC HOLDINGS, INC.	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	

USPE HOLDINGS LIMITED	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 
	

SUNTRUST BANK,

  as Administrative Agent [and as Issuer]	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
	 	 
	Title:	 	 	 	 
	 	 	
	 	 

4

SCHEDULE I  

	 
	 	ASSIGNOR'S

ORIGINAL

PERCENTAGE
	 	ADJUSTED

ASSIGNOR

PERCENTAGE
	 	ADJUSTED

ASSIGNEE

PERCENTAGE

	REVOLVING LOAN COMMITMENT	 	 	 	 	 	 
	

LOANS OUTSTANDING	
 	

 	
 	

 	
 	

 

EXHIBIT A  

FORM OF POWER OF ATTORNEY

                                         
       and apostille  

PROFORMA OF POWER OF ATTORNEY TO BE GRANTED IN FAVOUR OF THE AGENT  

	 INSTRUCCIONES PARA LA FIRMA

                        DEL PODER	 	INSTRUCTIONS FOR SIGNING

                        POWER OF ATTORNEY
	
1.	
 	

Por favor rellenen todos aquellos espacios entre corchetes.	
 	

1.	
 	

Please fulfil those blacks between brackets.
	2.	 	El poder preparado de acuerdo con el modelo que se adjunta deberá ser elevado a público ante Notario. Nótese que la declaración notarial debe mencionar que (i) las personas que firman el poder
tienen autoridad para conceder el poder y (ii) que la sociedad otorgante ha sido debidamente constituida y se encuentra vigente de acuerdo con las leyes que le sean de aplicación.	 	2.	 	The power of attorney prepared in accordance with the attached should be duly notarised. The notarial certificate should attest the following: (i) that the signatories of the power have enough authority to grant the power
and (ii) the grantor is duly incorporated and is in existence in accordance with the applicable laws.
	3.	 	El poder, una vez elevado a público ante Notario, deberá ser apostillado de acuerdo con lo dispuesto por la Convención de La Haya de 1961.	 	3.	 	Upon notarisation, the power should be docketed with an Apostille pursuant to the Hague Convention 1961.
	4.	 	El poder deberá ser otorgado a doble columna, en castellano e inglés (u otro idioma aceptable para el Notario).	 	4.	 	The power of attorney should be executed in a double-column format, in Spanish and English (or such other language acceptable for the Notary).

	
APODERAMIENTO	
 	

POWER OF ATTORNEY
	
En la ciudad de [    ], a [    ] de [    ]	
 	

In the Town of [    ], on this [    ] day of [    ],
	 	 	de [    ].	 	 	 	[    ].
	

ANTE MI, el Notario que suscribe,	
 	

BEFORE ME, the undersigned Notary,
	 	 	debidamente autorizado y en ejercicio de mis funciones notariales,	 	 	 	duly commissioned and in exercise of my notarial duties.

 

	
COMPARECE	
 	
APPEARS
	

El Sr. [name], mayor de edad, de	
 	

Mr. [name], of legal age of
	 	 	nacionalidad [nationality], domiciliado en [address] con Pasaporte número
[        ] (en lo sucesivo, el "Otorgante").	 	 	 	[nationality] nationality, domiciled at [address] with Passport number [        ]
(hereinafter the "Grantor")
	
INTERVIENE	
 	
HE ACTS
	

En nombre y representación de [name of	
 	

In the name and on behalf of [name of
	 	 	the Seller Bank or Buyer Bank], sociedad de nacionalidad [nationality], con domicilio social en [domicile] y registrada con el número [registry number] (en lo sucesivo, la "Sociedad").	 	 	 	the Seller Bank or Buyer Bank], a company with [        ] nationality domiciled in [    ] at
[        ], registered under number [        ] (hereinafter, the "Company").
	Interviene el Otorgante en su calidad de [Title]	 	He acts in his capacity as [Title]
	 	 	de la Sociedad, ostentando, por tanto, plenos poderes y autoridad para otorgar y firmar el presente poder de representación (en lo sucesivo, el "Poder de Representación"), tal y como demuestran los documentos que me exhibe.	 	 	 	of the Company, thereby having full power to grant and sign this power of attorney (hereinafter, the "Power of Attorney"), as is evidenced by the documents exhibited to
me.
	Identifico al Otorgante por sus datos	 	The Grantor exhibits his personal details
	 	 	personales y su firma y yo, el Notario, doy fe de que los mismos coinciden con los datos personales y la firma que aparecen en este documento.	 	 	 	and signature, and, I the Notary, certify that the personal details and signature which appear in this document coincide with them.

	
OTORGA	
 	
HE GRANTS
	

Poder de Representación, tan amplio	
 	

A Power of Attorney, as wide as in law
	 	 	 	 	como en derecho fuere necesario, a favor de:	 	 	 	 	 	might be necessary, in favour of:
	-	 	[    ], sociedad de nacionalidad [    ], con domicilio social en [    ] y registrada con el número
[            ]; (el "Apoderado")	 	-	 	  [    ], a company with [    ] nationality domiciled in [    ] at [    ], registered under number [    ]
("Attorney");
	para que, a través de cualquiera de sus	 	so that any of its legal representatives,
	 	 	 	 	representantes legales, pueda, sin limitación alguna, ejercer todas o cada una de las siguientes facultades en nombre y por cuenta de [nombre de la Sociedad]
:	 	 	 	 	 	with no limitation whatsoever, may exercise any or all of the following powers in the name and on behalf of [name of the Company]:

2

 

	(a)	 	suscribir en documento público español y/o comparecer ante Notario Público español para otorgar y elevar a público, en los términos que el Apoderado estime convenientes, un
contrato de cesión en virtud del cual [adquiera/transmita] determinados derechos dimanantes de la financiación concedida a las sociedades USP Domestic Holdings Inc. y USPE Holdings Limited por un sindicato de entidades financieras en
virtud de un contrato de crédito denominado "Second Amendment and Restated Credit Agreement" de fecha 5 de noviembre de 2002 (el "Contrato de Crédito").	 	(a)	 	execute in a Spanish public document and/or appear before a Spanish Notary to grant a deed and raise to public status, within the terms that the Attorney deems appropriate, an assignment agreement by virtue of which the
Company [acquires/sells] certain credit rights arising from the financing granted in favour of the entities USP Domestic Holdings Inc. and USPE Holdings Limited by a syndicate of financial entities through the "Second Amendment
and Restated Credit Agreement" dated November 5, 2002 (the "Credit Agreement").
	(b)	 	otorgar, en los términos que parezcan razonables a juicio del Apoderado, cuantos documentos (públicos o privados) fueran necesarios para reflejar la antedicha cesión en cuantas garantías se
hubiesen constituido bajo derecho español en garantía del Contrato de Crédito (incluyendo, sin carácter limitativo, hipotecas sobre bienes inmuebles o muebles, así como derechos de prenda).	 	(b)	 	execute, within the terms that the Attorney deems appropriate, all those documents (public or private) necessary to reflect the above mentioned assignment in those securities governed under Spanish law as security of the
Credit Agreement (including, but not limited to, mortgages over immovable or movable assets or pledges).
	(c)	 	realizar todos aquellos actos y firmar los documentos que, a juicio del Apoderado, fueran deseables en relación con las facultades anteriores; quedando expresamente autorizado para otorgar cuantos documentos
adicionales de subsanación, ratificación, aclaración, modificación o complementación fueran necesarios, así como a comparecer ante cualesquiera Registros Públicos fuese pertinentes.	 	(c)	 	do all other acts and things and to sign any document, whether public or private which the Attorney shall, in his reasonable opinion, consider desirable in connection with the preceding faculties, being the Attorney
expressly authorised to execute any additional document of reparation, ratification, clarification, modification or complementation which might be necessary as well as appear before those Public Registries which might be relevant.
	(d)	 	Delegar todas las facultades otorgadas mediante el presente poder en favor de la persona o personas, físicas o jurídicas, que estime pertinente, otorgando al efecto los documentos oportunos.	 	(d)	 	delegate all the faculties granted by virtue of this power of attorney in favour of the attorney or attorneys, individual or corporation, which the Attorney considers appropriate and grant any document required to such
effect.

3

 

	2.	 	La Sociedad indemnizará al Apoderado por cualesquiera costes, reclamaciones o responsabilidades en los que pudiera incurrir como consecuencia de su actuación, distintos de aquellos ocasionados por su
negligencia o conducta malintencionada en el ejercicio de cualesquiera de las facultades conferidas, o que se entendieran conferidas, en virtud del presente Poder de Representación.	 	2.	 	The Company shall indemnify the Attorney and keep the Attorney indemnified against any and all costs, claims and liabilities which the Attorney may incur as a result of anything done other than by negligence or wilful
misconduct by the Attorney in the exercise of any of the powers conferred, or purported to be conferred, on him by this Power of Attorney.
	3.	 	La Sociedad conoce y acepta que la celebración por el Apoderado de los contratos y actos descritos anterior será prueba suficiente del consentimiento otorgado por el Apoderado en relación con
cualesquiera modificaciones que se hubieran realizado en el mismo.	 	3.	 	The Company confirms and acknowledges that execution by the Attorney of the documents or acts described above shall be conclusive evidence of the Attorney's approval of any amendments which may have been made
thereto.
	4.	 	La Sociedad ratificará y confirmará todos los documentos, escrituras, actas y demás documentación que el Apoderado ejecute en el ejercicio de las facultades conferidas o que pretenden serle
conferidas, por el presente Poder de Representación.	 	4.	 	The Company shall ratify and confirm all documents, deeds, acts and things which the Attorney shall execute or do in the exercise of any of the powers conferred, or purported to be conferred, on him by this Power of
Attorney.
	Las facultades aquí otorgadas han de ser interpretadas en su más amplio sentido, con el objeto de permitir la obtención del fin para el que han sido conferidas e incluirán en todo caso la
facultad de autocontratación, aun a favor de terceros. La Sociedad conoce y acepta que los Apoderados puedan suscribir cualesquiera de los documentos mencionados en nombre de otras entidades crediticias actuando, incluso, en calidad de
cesionarias o cedentes.	 	The faculties granted under this document will be interpreted in their broadest sense, in order to allow the obtaining of the purpose for which they have been granted, and will include, in any case the faculty of self
dealing (autocontratación), even in favour of third parties. The Company expressly acknowledge and accepts that any of the Attorney may execute the documents described above on behalf of other
credit entities which may even act as assignees or assignors.
	En prueba de todo lo anterior, el presente Poder de Representación ha sido otorgado por la Sociedad y en la fecha recogida en su encabezamiento.	 	In WITNESS WHEREOF this Power of Attorney has been executed as a deed by the Company and is intended to be and is hereby delivered on the date first above written.
	[	 	]	 	[	 	]
	

[name of authorised signatory]	
 	

[name of authorised signatory]
	
[SIGNATURES TO BE NOTARISED AND APOSTILLED]	
 	

[SIGNATURES TO BE NOTARISED AND APOSTILLED]

4

 

	
CERTIFICADO NOTARIAL	
 	

NOTARIAL CERTIFICATE
	

Yo, Notario Público debidamente nombrado, por el presente certifico que en este día [    ] de [    ] de [    ], comparece ante mí en persona D.
[            ] conocido por mí y a quien juzgo con capacidad suficiente como representante legal y oficial de [    ] y como tal representante está
debidamente autorizado por dicha Sociedad con arreglo a su escritura de constitución, estarutos y demás documentos, los cuales me han sido mostrados y sometidos a mi examen en la medida necesaria, para otorgar y firmar el presente Poder
de Representación que en mi presencia firma.	
 	

I, Notary Public, duly appointed, hereby certify that on the [    ] day of [    ], [    ], there appears before me in person Mr.
[            ], who is known to me and whom I judge to have sufficient capacity as the legal and official representative of [name of the Company] and as such representative to be duly authorised by the said Company, in accordance with its constitution charter, by-laws and other documents which have been shown me and submitted to my perusal to the extent necessary, in order to grant
and execute the present Power of Attorney, which he signs in my presence.
	Todo lo cual certifico y doy fe, así como la doy de que la citada Sociedad está debidamente constituida y existente con arreglo a las leyes de
[            ], que fue inscrita bajo el número [    ] el [    ] de [    ] de [    ], y que los fines
del Poder de Representación precedente están dentro de los límites del objeto social. Finalmente doy fe de que en el otorgamiento del expresado Poder de Representación se han observado las formas y solemnidades
establecidas por las leyes vigentes en este país.	 	All of which I certify and attest to, likewise attesting that the said company is duly constituted and existing in accordance with the laws of the [country where the Company is
incorporated], was registered with number [        ] on [    ] [    ] [    ], and that the purposes of the aforementioned
Power of Attorney are within the limits of the corporate object. Finally, I attest that in granting the aforementioned Power of Attorney, the formalities established by the applicable laws in this country have been complied with.
	

EN TESTIMONIO DE LO CUAL, expido la presente que firmo y sello en [    ], el día de hoy [    ] de [    ] de [    ].	
 	

IN WITNESS WHEREOF, I deliver this document which I sign and stamp in [    ] on the [    ] day of [    ] , [        ].
	
NOTARIO PUBLICO	
 	
NOTARY PUBLIC

5

EXHIBIT B  

FORM OF

ESCROW AGREEMENT  

        This Escrow Agreement ("Agreement"), dated as
of                                         
       
("Effective Date"), is
among                                         
       ("Assignor Lender"), and SunTrust Bank, as
administrative agent for the Lenders (as defined below) (in such capacity, the "Administrative Agent"), as escrow agent (in such capacity, the  "Escrow Agent"). 

WITNESSETH:  

        WHEREAS, this is the Escrow Agreement referred to in the Second Amended and Restated Credit Agreement, dated as of November    , 2002 (as amended,
supplemented and/or restated from time to time, the "Credit Agreement"), among USP Domestic Holdings, Inc., a Delaware corporation (the
"US Borrower"), USPE Holdings Limited, a company organized under the laws of England and Wales (the "UK
Borrower", and together with the US Borrower, collectively, the "Borrowers" and, each individually, a
"Borrower"), the Lenders (as defined therein), Administrative Agent, Lehman Commercial Paper Inc., as Syndication Agent, and Credit Suisse First
Boston, as Documentation Agent. Capitalized terms used herein, unless otherwise defined herein, have the meanings provided in the Credit Agreement. 

        WHEREAS,
this Agreement is entered into in connection with the Lender Assignment Agreement dated as of                        , among
Assignor Lender,
                        ("Assignee Lender"), Administrative Agent [and Borrower]
("Assignment
Agreement"), assigning to Assignee Lender the Percentage of the Loans and/or Commitments stated therein (the "Assigned
Percentage"). 

        WHEREAS,
the purpose of this Agreement is to provide for certain payment of recording fees, transfer taxes, duty stamp taxes and other charges and fees, including, without limitation,
attorneys fees (collectively, "Recording Expenses") imposed or charged by attorneys, any governmental agency, notary public or other official or filing
office at any time in connection with the preparation, execution, delivery, filing, recordation or acknowledgment of any documents or instruments (collectively, "Recordation
Documents") that may be required to evidence or effect the assignments made pursuant to the Assignment Agreement as it relates to the real and personal property collateral
located in Spain
(collectively, the "Spanish Collateral"), in anticipation of the Administrative Agent's or any Lender's release of, or exercise of foreclosure remedies
or other remedies (collectively, "Remedies") with respect to, the Spanish Collateral. 

        NOW,
THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows: 

	1.
	Payment of Recording Expenses.    Assignor Lender agrees to pay to Administrative Agent, on demand, an amount equal to the
Recording Expenses.

	2.
	Appointment of Escrow Agent.    Assignor Lender hereunder appoints Escrow Agent as escrow agent, and Escrow Agent accepts such
appointment, upon and subject to the terms and conditions set forth in this Agreement.

	3.
	Delivery of Funds.    Assignor Lender confirms that it has delivered to Escrow Agent the amount
of                        Dollars
(US$            ) ("Escrow Funds"), to be held in escrow hereunder, which amount is an estimate by Administrative Agent of the Recording
Expenses.
Escrow Agent acknowledges receipt of the Escrow Funds, and agrees to hold, safeguard and disburse the Escrow Funds as provided herein. Assignor Lender acknowledges that actual Recording Expenses may
exceed the amount of the Escrow Funds initially delivered by Assignor Lender hereunder and that once the actual Recording Expenses are determined and if they are higher than the Escrow Funds, Assignor
Lender will be obligated to pay the difference to Administrative Agent on demand. 

 

	4.
	Escrow Account.    Escrow Agent confirms that it has established a non-interest bearing deposit account,
designated as the "USP Recording Fee Escrow Account" ("Escrow Account"), in which it will hold the Escrow Funds and all other funds delivered into
escrow by other Lenders pursuant to the Credit Agreement upon the assignment of any Lender's interest in the Loans and Commitments.

	5.
	Disbursements from Escrow Account.    Upon the Administrative Agent's determination to prepare and file the Recordation
Documents, Escrow Agent shall deliver such of the Escrow Funds as needed by Administrative Agent to pay for the Recording Expenses or to reimburse Administrative Agent for any
Recording Expenses previously incurred. An accounting of such payments shall be delivered to Assignor Lender.

	6.
	Release of Escrow Funds.    Escrow Agent shall release the Escrow Funds (or any balance remaining), and deliver them to
Assignor Lender, only if and when: 

        (a)  All
of the Administrative Agent's and Lenders' rights in, liens on, charges against and security interests in the Spanish Collateral have been duly released or
terminated pursuant to the Credit Agreement, and all necessary recordations in connection with such release or termination have been completed; or 

        (b)  All
Recordation Documents have been duly recorded and all Remedies with respect the Spanish Collateral have been fully exercised. 

	7.
	Fees and Expenses.    Assignor Lender shall pay or reimburse Escrow Agent all reasonable expenses, disbursements and advances
incurred or made by Escrow Agent in performance of its duties hereunder (including reasonable fees, expenses and disbursements of its counsel), to the extent not paid by Borrowers pursuant to the
Credit Agreement. Expenses shall be paid upon receipt of a written invoice by Escrow Agent. If Escrow Agent incurs any costs or expenses (including legal fees) in connection with the enforcement of
this Agreement or any other agreement in connection with the Escrow Account, the party whose action or inaction resulted in Escrow Agent's taking the enforcement action shall bear the cost of such
costs and expenses. Escrow Agent shall not be obligated to distribute or release any of the funds or assets held under this Agreement or in the Escrow Account until its fees and expenses have been
paid in full. Any fees or expenses of Escrow Agent or its counsel that are not paid as provided for herein may be taken from any property held by Escrow Agent hereunder or in the Escrow Account.

	8.
	Disputes.    In the event of any dispute regarding the Escrow Funds or the Escrow Account, Escrow Agent shall have the right
at any time to deposit the Escrow Funds and/or all other funds then held in the Escrow Account with the Clerk of the Chancery Court of Davidson County, Tennessee, USA. Escrow Agent shall give written
notice of such deposit to Assignor Lender and Administrative Agent and their respective counsel. Upon such deposit, Escrow Agent shall be relieved and discharged of all further obligations and
responsibilities hereunder, subject to Section 10 below (Exculpation).

	9.
	Resignation of Escrow Agent.    In the event that Administrative Agent or any successor Escrow Agent desires to resign as
Escrow Agent, then such Escrow Agent shall provide thirty (30) days prior notice to the then-existing Lenders and Administrative Agent and their respective counsel. In such an
event, the Required Lenders and Administrative Agent shall, within 30 days from receipt of such notice, mutually agree upon a successor Escrow Agent. If they do not agree upon a successor
Escrow Agent within such time, then the Administrative Agent shall select the successor Escrow Agent and such decision shall be binding upon the Lenders. In selecting a successor Escrow Agent, the
Administrative Agent shall select one of the Lenders or a commercial banking institution organized under the laws of the United 

2

 

States
(or any State thereof) or a United States branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $250,000,000. The existing Escrow Agent
shall transfer to the successor Escrow Agent all funds then held in the Escrow Account and this Agreement shall be deemed to be amended to reflect the replacement of Escrow Agent. Any successor escrow
agent so appointed shall succeed to all of the rights, duties and responsibilities of Escrow Agent. 

	10.
	Exculpation.    The parties acknowledge that Escrow Agent is acting solely as a stakeholder at their request and for their
convenience, that Escrow Agent shall not be deemed to be the agent of either of the parties, and that Escrow Agent shall not be liable to either of the parties for any act or omission on its part
unless taken or suffered in bad faith, in willful disregard of this Agreement or involving gross negligence. Escrow Agent shall incur no liability with respect to any action taken or suffered by it in
reliance upon any notice, direction, instruction, consent, statement or other document believed by it to be genuine and duly authorized, nor for any other action or inaction, except its own willful
misconduct or gross negligence. Escrow Agent shall not be responsible for the validity or sufficiency of this Agreement. In all questions arising under this Agreement, Escrow Agent may rely on the
advice of counsel, and for anything done, omitted or suffered in good faith by the Escrow Agent based on such advice, Escrow Agent shall not be liable to anyone. Escrow Agent shall not be required to
take any action hereunder involving any expense unless the payment of such expense is made or provided for in a manner satisfactory to it.

	11.
	Indemnity.    Assignor Lender agrees to indemnify, defend and hold harmless Escrow Agent from any and all liability of any
kind whatsoever arising by virtue of its acting as Escrow Agent hereunder except to the extent of liabilities directly caused by Escrow Agent's gross negligence or willful neglect.

	12.
	Successors and Assigns.    The parties' rights and obligations under this Agreement may not be assigned or transferred except
as provided herein or in the Credit Agreement. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and permitted assigns.

	13.
	Notices.    All notices and other communications hereunder shall be delivered in accordance with the terms of the Credit
Agreement and Assignment Agreement. Escrow Agent's address for notice purposes is: 

SunTrust
Bank, as Administrative Agent, Escrow Agent

201 Fourth Avenue North

Nashville, Tennessee 37219

Attention: Mark Mattson

Fax Number: (615) 748-5269 

	14.
	JURISDICTION; VENUE.    ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR THE
ESCROW FUNDS OR ESCROW ACCOUNT MAY BE BROUGHT AND MAINTAINED IN THE COURTS OF THE STATE OF TENNESSEE OR IN THE UNITED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF TENNESSEE. ASSIGNOR LENDER HEREBY
EXPRESSLY AND IRREVOCABLY (I) SUBMITS TO THE JURISDICTION OF SUCH COURTS, (II) WAIVES ANY OBJECTION TO THE LAYING OF VENUE IN ANY SUCH COURT, (III) WAIVES ANY CLAIM THAT ANY SUCH
COURT IS AN INCONVENIENT FORUM, AND (IV) CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF TENNESSEE, AT THE ADDRESS
FOR NOTICES SPECIFIED IN SECTION 13 ABOVE.

3

 

	15.
	GOVERNING LAW.    THIS AGREEMENT IS DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK.

	16.
	Counterparts.    This Agreement may be executed by the parties hereto (by facsimile transmission or otherwise) in
counterparts, each of which shall be an original and all of which shall constitute together but one and the same agreement.

	17.
	Entire Agreement.    This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof
and supersedes all prior understandings and agreements, written or oral, between the parties with respect to the subject matter hereof. This Agreement may not be modified or amended except in writing
signed by the parties, and none of its provisions may be waived except in writing signed by the party to be charged. No waivers shall be implied, whether from any custom or course of dealing or any
delay or failure in the exercise of a party's rights and remedies hereunder or otherwise. Any waiver granted by a party shall not obligate such party to grant any further, similar, or other waivers.
All rights and remedies granted herein are cumulative and not alternative, and are in addition to all other rights and remedies available at law or in equity. Any provisions of this agreement
prohibited by law shall be ineffective to the extent of such prohibition without invalidating the remaining provisions. 

4

 

        IN
WITNESS WHEREOF, the parties have executed this Escrow Agreement as of the Effective Date stated above. 

	

ASSIGNOR LENDER:	
 	

	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

	

ESCROW AGENT:	

 	

 SUNTRUST BANK,

    as Administrative Agent
	

 	
 	

By:	
 	

	

 	
 	

Title:	
 	

5

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