church street health management debtors in possession credit agreement

8/2/2019 Church Street Health Management Debtors in Possession Credit Agreement

1/92

EXECUTION VERSION

101234622.13

$12,000,000

DEBTOR-IN-POSSESSION CREDIT AGREEMENT

Dated as of February [], 2012

among

CHURCH STREET HEALTH MANAGEMENT, LLC

as Borrower

and

THE GUARANTORS NAMED HEREIN

as Guarantors

and

THE INITIAL LENDERS NAMED HEREIN

as Initial Lenders,

and

GARRISON LOAN AGENCY SERVICES LLC

as Collateral Agent

and

GARRISON LOAN AGENCY SERVICES LLC

as Administrative Agent


2/92

TABLE OF CONTENTS

Page

i101234622.13

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMSSECTION 1.01 Certain Defined Terms.................................................................................. 1SECTION 1.02 Computation of Time Periods; Other Definitional Provisions.................... 19SECTION 1.03 Accounting Terms....................................................................................... 19

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCESSECTION 2.01 The Revolving Credit Advances ................................................................. 19SECTION 2.02 Making the Revolving Credit Advances ..................................................... 19SECTION 2.03 Repayment of Revolving Credit Advances................................................. 20SECTION 2.04 Termination or Reduction of the Revolving Credit Commitments............. 21SECTION 2.05 Prepayments ................................................................................................ 21SECTION 2.06 Interest......................................................................................................... 21SECTION 2.07 Fees ............................................................................................................. 22SECTION 2.08 Conversion of Revolving Credit Advances................................................. 22SECTION 2.09 Increased Costs, Etc. ................................................................................... 23SECTION 2.10 Payments and Computations....................................................................... 25SECTION 2.11 Taxes ........................................................................................................... 26SECTION 2.12 Sharing of Payments, Etc. ........................................................................... 28SECTION 2.13 Use of Proceeds........................................................................................... 29SECTION 2.14 Defaulting Lenders...................................................................................... 29SECTION 2.15 Evidence of Debt......................................................................................... 31

ARTICLE III

CONDITIONS TO EFFECTIVENESS AND OF LENDINGSECTION 3.01 Conditions Precedent .................................................................................. 32SECTION 3.02 Conditions Precedent to Each Revolving Credit Borrowing ...................... 34SECTION 3.03 Determinations Under Section 3.01 ............................................................ 35

ARTICLE IV

REPRESENTATIONS AND WARRANTIESSECTION 4.01 Representations and Warranties of the Borrower ....................................... 35


3/92

TABLE OF CONTENTS

(continued)

Page

ii101234622.13

ARTICLE V

AFFIRMATIVE COVENANTSSECTION 5.01 Compliance with Laws, Etc. ....................................................................... 42SECTION 5.02 Payment of Taxes, Etc. ............................................................................... 43SECTION 5.03 Compliance with Environmental Laws....................................................... 43SECTION 5.04 Maintenance of Insurance ........................................................................... 43SECTION 5.05 Preservation of Corporate Existence, Etc. .................................................. 43SECTION 5.06 Visitation Rights ......................................................................................... 43SECTION 5.07 Keeping of Books........................................................................................ 44SECTION 5.08 Maintenance of Properties, Etc. .................................................................. 44SECTION 5.09 Covenant to Guarantee Obligations and Give Security .............................. 44SECTION 5.10 Further Assurances...................................................................................... 45SECTION 5.11 Performance of Loan Documents................................................................ 46SECTION 5.12 Preparation of Environmental Reports........................................................ 46SECTION 5.13 Healthcare Matters ...................................................................................... 46SECTION 5.14 Compliance with Terms of Leaseholds....................................................... 47SECTION 5.15 Health Compliance Programs ..................................................................... 47SECTION 5.16 Performance of Material Contracts ............................................................. 47SECTION 5.17 Settlement and Bankruptcy Actions............................................................ 47

ARTICLE VI

NEGATIVE COVENANTSSECTION 6.01 Liens, Etc. ................................................................................................... 48SECTION 6.02 Debt ............................................................................................................. 48SECTION 6.03 Change in Nature of Business..................................................................... 48SECTION 6.04 Mergers, Etc. ............................................................................................... 48SECTION 6.05 Sales, Etc. of Assets .................................................................................... 48SECTION 6.06 Investments in Other Persons...................................................................... 49SECTION 6.07 Restricted Payments .................................................................................... 49SECTION 6.08 Transactions with Affiliates ........................................................................ 49SECTION 6.09 Amendments of Constitutive Documents ................................................... 49SECTION 6.10 Accounting Changes ................................................................................... 49SECTION 6.11 Prepayments, Etc., of Debt.......................................................................... 49SECTION 6.12 Negative Pledge .......................................................................................... 49SECTION 6.13 Partnerships, Etc.......................................................................................... 49SECTION 6.14 Speculative Transactions............................................................................. 49SECTION 6.15 Capital Expenditures ................................................................................... 50SECTION 6.16 Payment Restrictions Affecting Subsidiaries.............................................. 50SECTION 6.17 Amendment, Etc., of Material Contracts .................................................... 50SECTION 6.18 Holding Company Status ............................................................................ 50SECTION 6.19 Budget ......................................................................................................... 50


4/92

TABLE OF CONTENTS

(continued)

Page

iii101234622.13

SECTION 6.20 Return of Collateral..................................................................................... 50SECTION 6.21 Critical Vendor and Other Payments; Certain Receipts.............................. 51SECTION 6.22 Exercise of Remedies.................................................................................. 51SECTION 6.23 Bankruptcy Related Negative Covenants.................................................... 51

SECTION 6.24 Press Releases; Public Disclosures ............................................................. 52

ARTICLE VII

REPORTING COVENANTSSECTION 7.01 Default Notice ............................................................................................. 52SECTION 7.02 Reserved...................................................................................................... 52SECTION 7.03 Quarterly Financials .................................................................................... 52SECTION 7.04 Monthly Statements .................................................................................... 52SECTION 7.05 MCO Agreements and Material Contracts.................................................. 53SECTION 7.06 Budget ......................................................................................................... 53SECTION 7.07 Litigation..................................................................................................... 53SECTION 7.08 Securities Reports ....................................................................................... 53SECTION 7.09 Creditor Reports .......................................................................................... 54SECTION 7.10 Agreement Notices...................................................................................... 54SECTION 7.11 Environmental Conditions .......................................................................... 54SECTION 7.12 Real Property............................................................................................... 54SECTION 7.13 Insurance ..................................................................................................... 54SECTION 7.14 Bankruptcy Reports..................................................................................... 55SECTION 7.15 Other Information ....................................................................................... 55

ARTICLE VIII

FINANCIAL COVENANTSSECTION 8.01 Minimum Liquidity..................................................................................... 55SECTION 8.02 Cash Flow ................................................................................................... 55

ARTICLE IX

EVENTS OF DEFAULTSECTION 9.01 Events of Default......................................................................................... 55

ARTICLE X

THE AGENTSSECTION 10.01 Authorization and Action.......................................................................... 60SECTION 10.02 Agents Individually................................................................................... 60SECTION 10.03 Duties of Agents; Exculpatory Provisions ................................................ 60


5/92

TABLE OF CONTENTS

(continued)

Page

iv101234622.13

SECTION 10.04 Reliance by Agents ................................................................................... 61SECTION 10.05 Delegation of Duties ................................................................................. 62SECTION 10.06 Resignation of Agents ............................................................................... 62SECTION 10.07 Non-Reliance on Agents and Other Lenders ............................................ 63

SECTION 10.08 Indemnification ......................................................................................... 63

ARTICLE XI

GUARANTYSECTION 11.01 Guaranty; Limitation of Liability.............................................................. 64SECTION 11.02 Guaranty Absolute .................................................................................... 65SECTION 11.03 Waivers and Acknowledgments................................................................ 66SECTION 11.04 Subrogation ............................................................................................... 67SECTION 11.05 Guaranty Supplements .............................................................................. 67SECTION 11.06 Continuing Guaranty; Assignments .......................................................... 68

ARTICLE XII

MISCELLANEOUSSECTION 12.01 Amendments, Etc. ..................................................................................... 68SECTION 12.02 Notices, Etc. .............................................................................................. 69SECTION 12.03 No Waiver; Remedies ............................................................................... 71SECTION 12.04 Costs and Expenses ................................................................................... 71SECTION 12.05 Right of Set-off ......................................................................................... 73SECTION 12.06 Binding Effect ........................................................................................... 73SECTION 12.07 Assignments and Participations ................................................................ 73SECTION 12.08 Execution in Counterparts......................................................................... 76SECTION 12.09 Confidentiality .......................................................................................... 77SECTION 12.10 Release of Collateral ................................................................................. 77SECTION 12.11 Patriot Act Notice...................................................................................... 77SECTION 12.12 Jurisdiction, Etc......................................................................................... 77SECTION 12.13 Governing Law ......................................................................................... 78SECTION 12.14 Waiver of Jury Trial .................................................................................. 78SECTION 12.15 Release ...................................................................................................... 78SECTION 12.16 Financing Order ........................................................................................ 78


6/92

TABLE OF CONTENTS

(continued)

Page

v101234622.13

SCHEDULESSchedule I - Commitments and Applicable Lending OfficesSchedule 4.01(b) - Loan PartiesSchedule 4.01(f) - Disclosed LitigationSchedule 4.01(n) - LiensSchedule 4.01(o) - Leased Real PropertySchedule 4.01(p) - Intellectual PropertySchedule 4.01(q) - Material Contracts[Schedule 4.01(r) - Healthcare Laws]Schedule 6.02 - DebtSchedule 6.05 - Asset Sales

EXHIBITS

Exhibit A - Form of Revolving Credit NoteExhibit B - Form of Notice of Revolving Credit BorrowingExhibit C - Form of Assignment and AssumptionExhibit D - Form of Security AgreementExhibit E - Form of Opinion of Counsel to the Loan Parties


7/92

101234622.13

DEBTOR-IN-POSSESSION CREDIT AGREEMENT

DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of February [], 2012among Church Street Health Management, LLC, a Delaware limited liability company (theBorrower or CSHM), Small Smiles Holding Company, LLC, a Delaware limited liabilitycompany (the Parent), the Subsidiary Guarantors (as hereinafter defined), the Lenders (ashereinafter defined), Garrison Loan Agency Services LLC (Garrison), as collateral agent(together with any successor collateral agent appointed pursuant to Article VII, the CollateralAgent) for the Secured Parties (as hereinafter defined) and administrative agent (together withany successor administrative agent appointed pursuant to Article VII, the AdministrativeAgent and, together with the Collateral Agent, the Agents) for the Lenders (as hereinafterdefined).

PRELIMINARY STATEMENTS:

(1) WHEREAS, on February 21, 2012 (the Petition Date), CSHM and its

Subsidiaries filed voluntary petitions with the United States Bankruptcy Court for the MiddleDistrict of Tennessee (the Bankruptcy Court) initiating their respective cases (theBankruptcy Cases) that are pending under Chapter 11 of Title 11 of the United States Code(the Bankruptcy Code) and have continued in the possession of their assets and in themanagement of their businesses pursuant to Sections 1107 and 1108 of the Bankruptcy Code;

(2) WHEREAS, in connection with the Bankruptcy Cases, the Borrower hasrequested that the Lenders provide up to an aggregate amount of $12,000,000 in a revolvingcredit facility pursuant to a senior secured priming debtor-in-possession credit agreement(together with all other transactions contemplated thereby, the DIP Facility);

(3) WHEREAS, in connection with the foregoing, the Borrower has agreed to secureall of its Obligations by granting to the Collateral Agent for the benefit of the Secured Parties, afirst priority lien on its assets; and

(4) WHEREAS, in connection with the foregoing, the Guarantors have agreed toguarantee the Obligations and to secure their respective guarantees by granting to the CollateralAgent, for the benefit of the Secured Parties, a first priority lien on their respective assets.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants andagreements contained herein, the parties hereto hereby agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

SECTION 1.01 Certain Defined Terms. As used in this Agreement, the followingterms shall have the following meanings (such meanings to be equally applicable to both thesingular and plural forms of the terms defined):


8/92

2101234622.13

363 Sale means the sale of the assets of Parent and its Subsidiaries pursuant to Section363 of the Bankruptcy Code in accordance with the Stalking Horse Agreement.

Accreditation means all material approvals, consents, licenses, permits, certifications,registrations, waivers, accreditations or other authorizations issued, granted, given or otherwisemade available by or under the authority of any entity other than a Governmental Authority.

Additional Guarantor has the meaning specified in Section 11.05.

Administrative Agent has the meaning specified in the recital of parties to thisAgreement.

Administrative Agents Account means the account of the Administrative Agentspecified by the Administrative Agent in writing to the Lenders from time to time.

Administrative Questionnaire means an Administrative Questionnaire in a formsupplied by the Administrative Agent.

Affiliate means, as to any Person, any other Person that, directly or indirectly, controls,is controlled by or is under common control with such Person or is a director or officer of suchPerson. For purposes of this definition, the term control (including the terms controlling,controlled by and under common control with) of a Person means the possession, direct orindirect, of the power to vote 5% or more of the Voting Interests of such Person or to direct orcause the direction of the management and policies of such Person, whether through theownership of Voting Interests, by contract or otherwise.

Agents has the meaning specified in the recital of parties to this Agreement.

Agreement means this debtor-in-possession credit agreement, as amended.

Applicable Lending Office means, with respect to each Lender, such LendersDomestic Lending Office in the case of a Base Rate Advance and such Lenders EurodollarLending Office in the case of a Eurodollar Rate Advance.

Applicable Margin means 8% per annum for Base Rate Advances and 9% per annumfor Eurodollar Rate Advances.

Approved Fund means any Fund that is administered or managed by (i) a Lender,(ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers ormanages a Lender.

Assignment and Assumption means an assignment and assumption entered into by aLender and an Eligible Assignee (with the consent of any party whose consent is required bySection 12.07 or by the definition of Eligible Assignee), and accepted by the AdministrativeAgent, in accordance with Section 12.07 and in substantially the form of Exhibit C hereto or anyother form approved by the Administrative Agent.


9/92

3101234622.13

Availability means as of any date, the aggregate Unused Revolving CreditCommitments as of such date after giving pro forma effect to any Revolving Credit Advances tobe made on such date.

Bankruptcy Cases has the meaning specified in the Preliminary Statements.

Bankruptcy Code the meaning specified in the Preliminary Statements.

Bankruptcy Court has the meaning specified in the Preliminary Statements.

Base Rate means the fluctuating interest rate per annum published by The Wall StreetJournal as the prime rate; each change in the Base Rate shall be effective from and includingthe date such change is published. In the event that such rate is not available at such time for anyreason, Base Rate shall mean a rate of interest per annum publicly announced from time totime by any banking institution selected by the Administrative Agent as its prime rate. In noevent shall the Base Rate be less than 2.0% per annum.

Base Rate Advance means a Revolving Credit Advance that bears interest as providedin Section 2.06(a)(i).

Borrower has the meaning specified in the recital of parties to this Agreement.

Borrowers Account means the account of the Borrower specified by the Borrower inwriting to the Administrative Agent from time to time with no less than five (5) Business Daysprior written notice.

Budget means, as of any date, the Initial Budget or the updated Budget deliveredpursuant to Section 7.06, as applicable, most recently delivered to and approved by theAdministrative Agent on or prior to such date.

Business Day means a day of the year on which banks are not required or authorizedby law to close in New York City and, if the applicable Business Day relates to notices,determinations, fundings and payments in connection with the Eurodollar Rate or any EurodollarRate Advances, a day on which dealings in U.S. dollar deposits are also carried on in the Londoninterbank market.

Capital Expenditures means, for any Person for any period, the sum of, withoutduplication, (a) all expenditures made, directly or indirectly, by such Person or any of itsSubsidiaries during such period for equipment, fixed assets, real property or improvements, orfor replacements or substitutions therefor or additions thereto, that have been or should be, in

accordance with GAAP, reflected as additions to property, plant or equipment on a Consolidatedbalance sheet of such Person or have a useful life of more than one year plus (b) the aggregateprincipal amount of all Debt (including Obligations under Capitalized Leases) assumed orincurred in connection with any such expenditures. For purposes of this definition, the purchaseprice of equipment that is purchased simultaneously with the trade-in of existing equipment orwith insurance proceeds shall be included in Capital Expenditures only to the extent of the grossamount of such purchase price less the credit granted by the seller of such equipment for theequipment being traded in at such time or the amount of such proceeds, as the case may be.


10/92

4101234622.13

Capitalized Leases means all leases that have been or should be, in accordance withGAAP, recorded as capitalized leases.

Carve Out has the meaning specified in the Financing Order.

Cash Equivalents means any of the following, to the extent owned by the Borrower orany of its Subsidiaries free and clear of all Liens other than Liens created under the CollateralDocuments and having a maturity of not greater than 90 days from the date of issuance thereof:(a) readily marketable direct obligations of the Government of the United States or any agency orinstrumentality thereof or obligations unconditionally guaranteed by the full faith and credit ofthe Government of the United States, (b) insured certificates of deposit of or time deposits withany commercial bank that is (i) a Lender or a member of the Federal Reserve System, (ii) isorganized under the laws of the United States or any State thereof and (iii) has combined capitaland surplus of at least $1 billion.

Change in Law means the occurrence, after the date of this Agreement, of any of thefollowing: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change

in any law, rule, regulation or treaty or in the administration, interpretation, implementation orapplication thereof by any Governmental Authority or (c) the making or issuance of any request,rule, guideline or directive (whether or not having the force of law) by any GovernmentalAuthority;providedthat notwithstanding anything herein to the contrary, (x) the Dodd-FrankWall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directivesthereunder or issued in connection therewith and (y) all requests, rules, guidelines or directivespromulgated by the Bank for International Settlements, the Basel Committee on BankingSupervision (or any successor or similar authority) or the United States or foreign regulatoryauthorities, in each case pursuant to Basel III, shall in each case be deemed to be a Change inLaw, regardless of the date enacted, adopted or issued.

Chief Financial Officer means, as to any Person, the individual performing on behalfof such Person the duties customarily performed by a chief financial officer of a businesscorporation, whether or not such individual has been appointed as the chief financial officer ofsuch Person, and such other officer designee as may be reasonably approved by theAdministrative Agent.

Closing Date has the meaning specified in Section 3.01.

CMS has the meaning specified in Section 4.01.

Code means the United States Internal Revenue Code of 1986, as amended from timeto time, and the regulations promulgated and rulings issued thereunder.

Collateral means all Collateral referred to in the Collateral Documents and all otherproperty that is or is intended to be subject to any Lien in favor of the Collateral Agent for thebenefit of any or all of the Secured Parties.

Collateral Agent has the meaning specified in the recital of parties to this Agreement.


11/92

5101234622.13

Collateral Documents means the Security Agreement and each of the collateraldocuments, instruments and agreements delivered pursuant to Section 5.09, and each otheragreement that creates or purports to create a Lien in favor of the Collateral Agent for the benefitof the Secured Parties.

Committee has the meaning specified in the Financing Order.

Commodities Purchase Agreement means that certain Amended and Restated SeniorMurabaha Facility Agreement dated as of February 1, 2010, as amended, among SSO FundingCorp., Forba Holdings, LLC, Prepetition Agent, Arcapita Investment Funding Limited and AIALimited.

Communications has the meaning specified in Section 12.02(b).

Confidential Information means information that any Loan Party furnishes to anyAgent or any Lender in a writing designated as confidential, but does not include any suchinformation that is or becomes generally available to the public or that is or becomes available to

such Agent or such Lender from a source other than the Loan Parties.

Consolidated refers to the consolidation of accounts in accordance with GAAP.

Conversion, Convert and Converted each refer to a conversion of RevolvingCredit Advances of one Type into Revolving Credit Advances of the other Type pursuant toSection 2.08 or Section 2.09.

CSHM has the meaning specified in the recital of parties to this Agreement.

Debt of any Person means, without duplication, (a) all indebtedness of such Person forborrowed money, (b) all Obligations of such Person for the deferred purchase price of propertyor services, (c) all Obligations of such Person evidenced by notes, bonds, debentures or othersimilar instruments, (d) all Obligations of such Person created or arising under any conditionalsale or other title retention agreement with respect to property acquired by such Person (eventhough the rights and remedies of the seller or lender under such agreement in the event ofdefault are limited to repossession or sale of such property), (e) all Obligations of such Person aslessee under Capitalized Leases, (f) all Obligations of such Person under acceptance, letter ofcredit or similar facilities, (g) all Obligations of such Person to purchase, redeem, retire, defeaseor otherwise make any payment in respect of any Equity Interests in such Person or any otherPerson or any warrants, rights or options to acquire such Equity Interests, valued, in the case ofRedeemable Preferred Interests, at the greater of its voluntary or involuntary liquidationpreferenceplus accrued and unpaid dividends, (h) all Obligations of such Person in respect ofHedge Agreements, (i) all Guaranteed Debt and Synthetic Debt of such Person and (j) allindebtedness and other payment Obligations referred to in clauses (a) through (i) above ofanother Person secured by (or for which the holder of such Debt has an existing right, contingentor otherwise, to be secured by) any Lien on property (including, without limitation, accounts andcontract rights) owned by such Person, even though such Person has not assumed or becomeliable for the payment of such indebtedness or other payment Obligations.


12/92

6101234622.13

Debt for Borrowed Money of any Person means, at any date of determination, the sumof (i) all items that, in accordance with GAAP, would be classified as indebtedness on aConsolidated balance sheet of such Person at such date, (ii) all Obligations of such Person underacceptance, letter of credit or similar facilities at such date and (iii) all Synthetic Debt of suchPerson at such date.

Default means any Event of Default or any event that, with the passing of time or thegiving of notice or both, would become an Event of Default.

Default Interest has the meaning set forth in Section 2.06(b).

Defaulted Advance means, with respect to any Lender at any time, the portion of anyRevolving Credit Advance required to be made by such Lender to the Borrower pursuant toSection 2.01 or 2.02 at or prior to such time that has not been made by such Lender or by theAdministrative Agent for the account of such Lender pursuant to Section 2.02(b) as of such time.In the event that a portion of a Defaulted Advance shall be deemed made pursuant toSection 2.16(a), the remaining portion of such Defaulted Advance shall be considered a

Defaulted Advance originally required to be made pursuant to Section 2.01 on the same date asthe Defaulted Advance so deemed made in part.

Defaulted Amount means, with respect to any Lender at any time, any amount requiredto be paid by such Lender to any Agent or any other Lender hereunder or under any other LoanDocument at or prior to such time that has not been so paid as of such time, including, withoutlimitation, any amount required to be paid by such Lender to (a) the Administrative Agentpursuant to Section 2.02(b) to reimburse the Administrative Agent for the amount of anyRevolving Credit Advance made by the Administrative Agent for the account of such Lender,(b) any other Lender pursuant to Section 2.14 to purchase any participation in Revolving CreditAdvances owing to such other Lender and (c) any Agent pursuant to Section 10.08 to reimburse

such Agent for such Lenders ratable share of any amount required to be paid by the Lenders tosuch Agent as provided therein. In the event that a portion of a Defaulted Amount shall bedeemed paid pursuant to Section 2.14(b), the remaining portion of such Defaulted Amount shallbe considered a Defaulted Amount originally required to be paid hereunder or under any otherLoan Document on the same date as the Defaulted Amount so deemed paid in part.

Defaulting Lender means, at any time, any Lender that, at such time, (a) owes aDefaulted Advance or a Defaulted Amount or (b) shall take any action or be the subject of anyaction or proceeding of a type described in Section 9.01(f).

DIP Facility has the meaning specified in the Preliminary Statements.

Disclosed Litigation refers to the litigation set forth on Schedule 4.01(f).

DOJ Settlement has the meaning specified in Section 4.01.

Domestic Lending Office means, with respect to any Lender, the office of such Lenderspecified as its Domestic Lending Office opposite its name on Schedule I hereto or in theAssignment and Assumption pursuant to which it became a Lender, as the case may be, or such


13/92

7101234622.13

other office of such Lender as such Lender may from time to time specify to the Borrower andthe Administrative Agent.

Effective Date means the effective date of the order of the Bankruptcy Court approvingthe 363 Sale.

Eligible Assignee means (i) a Lender; (ii) an Affiliate of a Lender; (iii) an ApprovedFund; and (iv) any other Person (other than an individual) approved by (x) the AdministrativeAgent, and (y) unless an Event of Default has occurred and is continuing, the Borrower (eachsuch approval not to be unreasonably withheld or delayed);provided, however, that neither anyLoan Party nor any Affiliate of a Loan Party shall qualify as an Eligible Assignee under thisdefinition.

Environmental Action means any action, suit, demand, demand letter, claim, notice ofnon compliance or violation, notice of liability or potential liability, investigation, proceeding,consent order or consent agreement relating in any way to any Environmental Law, anyEnvironmental Permit or Hazardous Material or arising from alleged injury or threat to health,

safety or the environment, including, without limitation, (a) by any governmental or regulatoryauthority for enforcement, cleanup, removal, response, remedial or other actions or damages and(b) by any governmental or regulatory authority or third party for damages, contribution,indemnification, cost recovery, compensation or injunctive relief.

Environmental Law means any Federal, state, local or foreign statute, law, ordinance,rule, regulation, code, order, writ, judgment, injunction, decree or judicial or agencyinterpretation, policy or guidance relating to pollution or protection of the environment, health,safety or natural resources, including, without limitation, those relating to the use, handling,transportation, treatment, storage, disposal, release or discharge of Hazardous Materials.

Environmental Permit means any permit, approval, identification number, license orother authorization required under any Environmental Law.

Equity Interests means, with respect to any Person, shares of capital stock (asapplicable) of (or other ownership or profit interests in) such Person, warrants, options or otherrights for the purchase or other acquisition from such Person of shares of capital stock of (orother ownership or profit interests in) such Person, securities convertible into or exchangeablefor shares of capital stock of (or other ownership or profit interests in) such Person or warrants,rights or options for the purchase or other acquisition from such Person of such shares (or suchother interests), and other ownership or profit interests in such Person (including, withoutlimitation, partnership, member or trust interests therein), whether voting or nonvoting, and

whether or not such shares, warrants, options, rights or other interests are authorized or otherwiseexisting on any date of determination.

ERISA means the United States Employee Retirement Income Security Act of 1974, asamended from time to time, and the regulations promulgated and rulings issued thereunder.

ERISA Affiliate means any Person that for purposes of Title IV of ERISA is a memberof the controlled group of the Borrower, or under common control with the Borrower, within themeaning of Section 414 of the Code.


14/92

8101234622.13

Escrow Bank has the meaning specified in Section 2.14(c).

Eurocurrency Liabilities has the meaning specified in Regulation D of the Board ofGovernors of the Federal Reserve System, as in effect from time to time.

Eurodollar Lending Office means, with respect to any Lender, the office of suchLender specified as its Eurodollar Lending Office opposite its name on Schedule I hereto or inthe Assignment and Assumption pursuant to which it became a Lender (or, if no such office isspecified, its Domestic Lending Office), or such other office of such Lender as such Lender mayfrom time to time specify to the Borrower and the Administrative Agent.

Eurodollar Rate means, for any Interest Period for all Eurodollar Rate Advancescomprising part of the same Revolving Credit Borrowing, a rate per annum equal to the greaterof (a) (i) the rate per annum obtained by dividing the rate per annum (rounded upwards, ifnecessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)as the London interbank offered rate for deposits in U.S. dollars at 11:00 A.M. (London time)two Business Days before the first day of such Interest Period for a period equal to such Interest

Period (providedthat, if for any reason such rate is not available, the term Eurodollar Rateshall mean, for any Interest Period for all Eurodollar Rate Advances, the rate per annum(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on the Reuters ScreenLIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00A.M. (London time) two Business Days prior to the first day of such Interest Period for a termcomparable to such Interest Period;provided, however, if more than one rate is specified on theReuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates) by(ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage for such InterestPeriod and (b) 1%. For the avoidance of doubt, no Interest Period shall be longer than onemonth.

Eurodollar Rate Advance means a Revolving Credit Advance that bears interest asprovided in Section 2.06(ii).

Eurodollar Rate Reserve Percentage for any Interest Period for all Eurodollar RateAdvances means the reserve percentage applicable two Business Days before the first day ofsuch Interest Period under regulations issued from time to time by the Board of Governors of theFederal Reserve System (or any successor) for determining the maximum reserve requirement(including, without limitation, any emergency, supplemental or other marginal reserverequirement) for a member bank of the Federal Reserve System in New York City with respectto liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to anyother category of liabilities that includes deposits by reference to which the interest rate on

Eurodollar Rate Advances is determined) having a term equal to such Interest Period.

Events of Default has the meaning specified in Section 9.01.

Excess Cash means, at the applicable time of measurement, the aggregate amount ofbook cash (cash on deposit less outstanding amounts for payroll and vendor disbursements),excluding any cash on deposit in a payroll account without duplication of outstanding payroll, of


15/92

9101234622.13

Parent and its Subsidiaries at such time minus $500,000. For the avoidance of doubt, amountsheld in the American Express collateral certificate of deposit shall not be considered cash.

Federal Funds Rate means, for any period, a fluctuating interest rate per annum equalfor each day during such period to the weighted average of the rates on overnight Federal fundstransactions with members of the Federal Reserve System arranged by Federal funds brokers, aspublished for such day (or, if such day is not a Business Day, for the next preceding BusinessDay) by the Federal Reserve Bank of New York, or, if such rate is not so published for any daythat is a Business Day, the average of the quotations for such day for such transactions receivedby the Administrative Agent from three Federal funds brokers of recognized standing selected byit.

Final DIP Facility Amount means a maximum aggregate Revolving CreditCommitment of $12,000,000.

Final Order means an order of the Bankruptcy Court, in form and substance acceptableto the Lender in its sole discretion, approving this Agreement, the DIP Facility, the Loan

Documents and the Liens and Guaranties granted hereunder and thereunder and the othertransactions contemplated hereby and thereby on a final basis as contemplated by the InterimOrder, following a hearing as required by Rule 4001(c)(2) of the Federal Rules of BankruptcyProcedure or such other procedures so approved by the Bankruptcy Court that are acceptable tothe Required Lenders in their sole discretion, which shall be in full force and effect and shall nothave been stayed, reversed, vacated or otherwise modified (other than with the consent of theRequired Lenders in their sole discretion).

Financing Order means the Interim Order or, when applicable, the Final Order.

Fiscal Year means a fiscal year of the Borrower and its Consolidated Subsidiaries

ending on December 31 in any calendar year.

Fund means any Person (other than an individual) that is or will be engaged in making,purchasing, holding or otherwise investing in commercial loans and similar extensions of creditin the ordinary course of its business.

GAAP has the meaning specified in Section 1.03.

Garrison has the meaning specified in the recital of parties to this Agreement.

Governmental Authority means the government of the United States of America or anyother nation, or of any political subdivision thereof, whether state or local, and any agency,

authority, instrumentality, regulatory body, court, central bank or other entity exercisingexecutive, legislative, judicial, taxing, regulatory or administrative powers or functions of orpertaining to government (including any supra-national bodies such as the European Union orthe European Central Bank).

Governmental Authorization means any authorization, approval, consent, franchise,license, covenant, order, ruling, permit, certification, exemption, notice, declaration or similar


16/92

10101234622.13

right, undertaking or other action of, to or by, or any filing, qualification or registration with, anyGovernmental Authority.

Guaranteed Debt means, with respect to any Person, any Obligation or arrangement ofsuch Person to guarantee or intended to guarantee any Debt, leases, dividends or other paymentObligations (primary obligations) of any other Person (the primary obligor) in any manner,whether directly or indirectly, including, without limitation, (a) the direct or indirect guarantee,endorsement (other than for collection or deposit in the ordinary course of business), co making,discounting with recourse or sale with recourse by such Person of the Obligation of a primaryobligor, (b) the Obligation to make take-or-pay or similar payments, if required, regardless ofnonperformance by any other party or parties to an agreement or (c) any Obligation of suchPerson, whether or not contingent, (i) to purchase any such primary obligation or any propertyconstituting direct or indirect security therefor, (ii) to advance or supply funds (A) for thepurchase or payment of any such primary obligation or (B) to maintain working capital or equitycapital of the primary obligor or otherwise to maintain the net worth or solvency of the primaryobligor, (iii) to purchase property, assets, securities or services primarily for the purpose ofassuring the owner of any such primary obligation of the ability of the primary obligor to makepayment of such primary obligation or (iv) otherwise to assure or hold harmless the holder ofsuch primary obligation against loss in respect thereof. The amount of any Guaranteed Debtshall be deemed to be an amount equal to the stated or determinable amount of the primaryobligation in respect of which such Guaranteed Debt is made (or, if less, the maximum amountof such primary obligation for which such Person may be liable pursuant to the terms of theinstrument evidencing such Guaranteed Debt) or, if not stated or determinable, the maximumreasonably anticipated liability in respect thereof (assuming such Person is required to performthereunder), as determined by such Person in good faith.

Guaranteed Obligations has the meaning specified in Section 11.01.

Guaranties means the Parent Guaranty and the Subsidiary Guaranty.

Guarantors means the Parent and the Subsidiary Guarantors.

Hazardous Materials means (a) petroleum or petroleum products, by-products orbreakdown products, radioactive materials, asbestos-containing materials, polychlorinatedbiphenyls and radon gas and (b) any other chemicals, materials or substances designated,classified or regulated as hazardous or toxic or as a pollutant or contaminant under anyEnvironmental Law.

Healthcare Law means:

(a) all applicable statutes, laws, ordinances, rules and regulations of anyGovernmental Authority with respect to regulatory matters primarily relating to patienthealthcare, healthcare providers and healthcare services, including but not limited to Title XIX(Medicaid Program) of 42 U.S.C.;

(b) the federal Anti-Kickback Statute (42 U.S.C. 1320a-7b), (ii) the Stark Law (42U.S.C. 1395nn and 1395(q)), (iii) the civil False Claims Act (31 U.S.C. 3729 et seq.), (iv)Sections 1320a-7a and 1320a-7b of Title 42 of the United States Code, (v) applicable state


17/92

11101234622.13

statutes similar to any of the foregoing and (vi) the regulations promulgated pursuant to suchfederal and state statutes;

(c) the federal Food, Drug & Cosmetic Act (21 U.S.C. 301 et seq.) and theregulations promulgated pursuant thereto;

(d) the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No. 104-191) and the regulations promulgated pursuant thereto;

(e) laws, rules and regulations governing Medicaid and SCHIP Programs;

(f) the Medicare Prescription Drug, Improvement, and Modernization Act of 2003(Pub. L. No. 108-173) and the regulations promulgated pursuant thereto;

(g) quality, safety and accreditation standards and requirements of all applicablefederal, state or local laws or regulatory bodies relating to ownership, management or operationof a dental practice, or assets used in connection therewith;

(h) any applicable law relating to the billing or submission of claims, collection ofaccounts receivable, underwriting the cost of, or provision of management or administrativeservices in connection with, any and all of the foregoing; and

(i) any and all other applicable healthcare laws, regulations, manual provisions,policies and administrative guidance having the force of law with respect to each of clause (b)through (h) above, as may be amended from time to time.

Hedge Agreements means interest rate swap, cap or collar agreements, interest ratefuture or option contracts, currency swap agreements, currency future or option contracts andother hedging agreements.

Indemnified Costs has the meaning specified in Section 10.08(a).

Indemnified Party has the meaning specified in Section 12.04(b).

Initial Budget means a detailed receipts and disbursements forecast, for the 13-weekperiod immediately following the Closing Date, of the Borrower and its Subsidiaries in form andsubstance satisfactory to the Administrative Agent.

Initial Lenders means the banks, financial institutions and other institutional lenderslisted on the signature pages hereof as the Initial Lenders.

Initial Pledged Equity has the meaning specified in the Security Agreement.

Intellectual Property Security Agreement has the meaning specified in the SecurityAgreement.


18/92

12101234622.13

Interest Period means, as to each Eurodollar Rate Advance, the period commencing onthe date such Eurodollar Rate Advance is disbursed or converted to or continued as a EurodollarRate Advance and ending on the date one month thereafter; provided that:

(a) any Interest Period that would otherwise end on a day that is not a Business Dayshall be extended to the next succeeding Business Day unless, in the case of a Eurodollar RateLoan, such Business Day falls in another calendar month, in which case such Interest Periodshall end on the next preceding Business Day;

(b) any Interest Period pertaining to a Eurodollar Rate Advance that begins on the lastBusiness Day of a calendar month (or on a day for which there is no numerically correspondingday in the calendar month at the end of such Interest Period) shall end on the last Business Dayof the calendar month at the end of such Interest Period; and

(c) no Interest Period shall extend beyond the Termination Date.Interim DIP Facility Amount means a maximum aggregate Revolving Credit

Commitment of $5,500,000.

Interim Order means the order of the Bankruptcy Court entered at the initialemergency hearing in the Bankruptcy Cases, approving this Agreement, the DIP Facility, theLoan Documents and the Liens and Guaranties granted thereunder and the other transactionscontemplated thereby on an interim basis, which shall be in full force and effect until the entry ofthe Final Order approving this Agreement, the Revolving Credit Facility, the Loan Documentsand the Liens and Guaranties granted hereunder and thereunder and the other transactionscontemplated hereby and thereby, and which shall not have been stayed, reversed, vacated orotherwise modified (other than with the consent of the Required Lenders in their sole discretion).

Internal Revenue Code means the Internal Revenue Code of 1986, as amended fromtime to time, and the regulations promulgated and rulings issued thereunder.

Investment in any Person means any loan or advance to such Person, any purchase orother acquisition of any Equity Interests or Debt or the assets comprising a division or businessunit or a substantial part or all of the business of such Person, any capital contribution to suchPerson or any other direct or indirect investment in such Person, including, without limitation,any acquisition by way of a merger or consolidation (or similar transaction) and any arrangementpursuant to which the investor incurs Debt of the types referred to in clause (i) or (j) of thedefinition of Debt in respect of such Person.

Lender Appointment Period has the meaning specified in Section 10.06.

Lenders means the Initial Lenders and each Person that shall become a Lenderhereunder pursuant to Section 12.07 for so long as such Initial Lender or Person, as the case maybe, shall be a party to this Agreement.

Lien means any lien, security interest or other charge or encumbrance of any kind, orany other type of preferential arrangement, including, without limitation, the lien or retained


19/92

13101234622.13

security title of a conditional vendor and any easement, right of way or other encumbrance ontitle to real property.

Liquidity means, at the applicable time of measurement, the aggregate amount of cashand Cash Equivalents of Parent and its Subsidiaries at such timeplus the Availability at suchtime.

Loan Documents means (i) this Agreement, (ii) the Revolving Credit Notes, and(iii) the Collateral Documents, in each case as amended.

Loan Parties means the Borrower, the Parent and the Guarantors.

Lock-Up Agreement means that certain Lock-Up and Plan Support Agreement, datedas of February 10, 2012, as amended or otherwise modified, among (i) the First Lien Lendersappearing on the signature pages thereto, (ii) the Second Lien Lenders appearing on the signaturepages thereto and (iii) CSHM and its Affiliates appearing on the signature pages thereto.

Management Services Agreements means each of the Management ServicesAgreements to which a Practice and a Loan Party is a party for the provision of management andother operational services, in each case as amended from time to time to the extent permitted bythis Agreement.

Margin Stock has the meaning specified in Regulation U.

Material Adverse Effect means a material adverse effect on (a) the business, financialcondition, operations, performance or properties of the Parent and its Subsidiaries, taken as awhole, (b) the rights and remedies of any Agent or any Lender under any Loan Document or(c) the ability of any Loan Parties, taken as a whole, to perform their Obligations under the Loan

Documents.

Material Contract means, with respect to any Loan Party, each document evidencingthe DOJ Settlement, the OIG-CIA and the NY-CIA, each document evidencing the PrepetitionFacilities to which such Loan Party is a party, each Management Services Agreement, the Lock-Up Agreement and each other contract to which such Loan Party is a party and is material to thebusiness, financial condition, operations, performance or properties of such Loan Party.

MCO Agreement means each agreement with a Medicaid managed care organizationand a Practice, as amended from time to time to the extent permitted by this Agreement.

Measurement Period means each period of twelve (12) consecutive months.

Medicaid means, collectively, the healthcare assistance program established by TitleXIX of the Social Security Act (42 U.S.C. 1396 et seq.) and any statutes succeeding thereto,and all laws, rules, regulations, manuals, orders or guidelines pertaining to such program, in eachcase as the same may be amended, supplemented or otherwise modified from time to time.

Medicare means, collectively, the health insurance program for the aged and disabledestablished by Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) and any statutes


20/92

14101234622.13

succeeding thereto, and all laws, rules, regulations, manuals, orders or guidelines pertaining tosuch program, in each case as the same may be amended, supplemented or otherwise modifiedfrom time to time.

Multiemployer Plan means a multiemployer plan, as defined in Section 4001(a)(3) ofERISA, to which any Loan Party or any ERISA Affiliate is making or accruing an obligation tomake contributions, or has within any of the preceding five plan years made or accrued anobligation to make contributions.

Notice of Borrowing has the meaning specified in Section 2.02.

NY-CIA means that certain Amended Corporate Integrity Agreement dated on or aboutApril 30, 2010 between the New York State Office of the Medicaid Inspector General andCSHM.

Obligation means, with respect to any Person, any payment, performance or otherobligation of such Person of any kind, including, without limitation, any liability of such Person

on any claim, whether or not the right of any creditor to payment in respect of such claim isreduced to judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,legal, equitable, secured or unsecured. Without limiting the generality of the foregoing, theObligations of any Loan Party under the Loan Documents include (a) the obligation to payprincipal, interest, charges, expenses, fees, attorneys fees and disbursements, indemnities andother amounts payable by such Loan Party under any Loan Document and (b) the obligation ofsuch Loan Party to reimburse any amount in respect of any of the foregoing that any Lender, inits sole discretion, may elect to pay or advance on behalf of such Loan Party.

OIG-CIA means that certain Corporate Integrity Agreement dated on or about January15, 2010 between the Office of Inspector General of the U.S. Department of Health and Human

Services and CSHM.

Operating Business means the business of providing services to dental practices.

Other Taxes has the meaning specified in Section 2.11.

Outside Date means the date that is 90 days following the Closing Date (unlessextended by one optional 30-day extension at the request of the Borrower, and in the solediscretion of the Required Lenders).

Parent has the meaning specified in the Preliminary Statements.

Parent Guaranty means the guaranty of the Parent set forth in Article XI.

Patriot Act means the Uniting and Strengthening America by Providing AppropriateTools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into lawOctober 26, 2001.

Permitted Liens means such of the following as to which no enforcement, collection,execution, levy or foreclosure proceeding shall have been commenced: (a) prepetition Liens for


21/92

15101234622.13

taxes, assessments and governmental charges or levies to the extent not required to be paid underSection 5.02; (b) Liens imposed by law, such as materialmens, mechanics, carriers,workmens and repairmens Liens and other similar Liens arising in the ordinary course ofbusiness that (i) are not overdue for a period of more than 30 days and (ii) individually ortogether with all other Permitted Liens outstanding on any date of determination do not

materially adversely affect the use of the property to which they relate; (c) pledges or deposits inthe ordinary course of business to secure obligations under workers compensation laws orsimilar legislation or to secure public or statutory obligations; (d) deposits to secure theperformance of bids, trade contracts and leases (other than Debt), statutory obligations, suretybonds (other than bonds related to judgments or litigation), performance bonds and otherobligations of a like nature incurred in the ordinary course of business, including that certaincertificate of deposit with American Express; (e) Liens securing judgments (or the payment ofmoney not constituting a Default under Section 9.01(g) or securing appeal or other surety bondsrelated to such judgments; and (f) easements, rights of way and other encumbrances on title toreal property that do not render title to the property encumbered thereby unmarketable ormaterially adversely affect the use of such property for its present purposes.

Permits means any permit, approval, authorization, license, registration, certification,certificate of authority, variance, permission, franchise, qualification, order, filing or consentrequired pursuant to an applicable Requirement of Law.

Person means an individual, partnership, corporation (including a business trust),limited liability company, joint stock company, trust, unincorporated association, joint venture orother entity or a Governmental Authority.

Petition Date has the meaning specified in the Preliminary Statements.

Plan means a Single Employer Plan or a Multiple Employer Plan.

Platform has the meaning specified in Section 12.02(b).

Practice means a dental practice party to a Management Services Agreement.

Preferred Interests means, with respect to any Person, Equity Interests issued by suchPerson that are entitled to a preference or priority over any other Equity Interests issued by suchPerson upon any distribution of such Persons property and assets, whether by dividend or uponliquidation.

Prepetition Facilities means, collectively, that certain (i) Amended and Restated FirstLien Credit Agreement dated as of February 1, 2010, among SSO Funding Corp. as borrower,the lenders from time to time party thereto, CIT Healthcare LLC, as collateral agent andadministrative agent and any successor of CIT Healthcare LLC as collateral agent andadministrative agent (the Prepetition Agent) and the lenders party thereto; (ii) Second LienCredit Agreement dated as of February 1, 2010 among the SSO Funding Corp. as borrower, thelenders from time to time party thereto, the Prepetition Agent and the lenders party thereto; (iii)Amended and Restated Registered Lease and Lease Financing and Purchase Option Agreementdated as of February 1, 2010 among SSO Funding Corp., Forba Holdings, LLC and thePrepetition Agent and (iv) the Commodities Purchase Agreement.


22/92

16101234622.13

Pro Rata Share of any amount means with respect to any Lender at any time, theproduct of such amount times a fraction the numerator of which is the amount of such LendersRevolving Credit Commitment at such time (or, if the Revolving Credit Commitments shall havebeen terminated pursuant to Section 9.01, such Lenders Revolving Credit Commitment as ineffect immediately prior to such termination) and the denominator of which is the Revolving

Credit Facility at such time (or, if the Revolving Credit Commitments shall have been terminatedpursuant to Section 9.01, the Revolving Credit Facility as in effect immediately prior to suchtermination).

Redeemable means, with respect to any Equity Interest, any such Equity Interest that(a) the issuer has undertaken to redeem at a fixed or determinable date or dates, whether byoperation of a sinking fund or otherwise, or upon the occurrence of a condition not solely withinthe control of the issuer or (b) is redeemable at the option of the holder.

Register has the meaning specified in Section 12.07(d).

Regulation U means Regulation U of the Board of Governors of the Federal Reserve

System, as in effect from time to time.

Related Parties means, with respect to any Person, such Persons Affiliates and suchPersons and such Persons Affiliates respective partners, directors, officers, employees, agentsand advisors.

Required Lenders means, at any time, Lenders owed or holding at least a majority ininterest of the sum of (a) the aggregate principal amount of the Revolving Credit Advancesoutstanding at such time and (b) the aggregate Unused Revolving Credit Commitments at suchtime;provided, however, that if any Lender shall be a Defaulting Lender at such time, there shallbe excluded from the determination of Required Lenders at such time (A) the aggregate principal

amount of the Revolving Credit Advances owing to such Lender (in its capacity as a Lender) andoutstanding at such time, and (B) the Unused Revolving Credit Commitment of such Lender atsuch time.

Requirement of Law means, as to any Person, any law (statutory or common),ordinance, treaty, rule, Governmental Authorization, Permit, regulation, order, policy, or otherlegal requirement or determination of an arbitrator or of a Governmental Authority, in each caseapplicable to or binding upon such Person or any of its property or to which such Person or anyof its property is subject, including, without limitation, any Healthcare Law.

Responsible Officer means, with respect to any Person, the chief executive officer,president, chief financial officer, treasurer or assistant treasurer of such Person. Any documentdelivered under any Loan Document that is signed by a Responsible Officer of a Loan Party shallbe conclusively presumed to have been authorized by all necessary corporate, limited liabilitycompany, partnership and/or other action on the part of such Loan Party and such ResponsibleOfficer shall be conclusively presumed to have acted on behalf of such Loan Party.

Revolving Credit Advance has the meaning specified in Section 2.01.


23/92

17101234622.13

Revolving Credit Borrowing means a borrowing consisting of simultaneous RevolvingCredit Advances of the same Type made by the Lenders.

Revolving Credit Commitment means, with respect to any Lender at any time, theamount set forth opposite such Lenders name on Schedule I hereto under the captionRevolving Credit Commitment or, if such Lender has entered into one or more Assignmentand Assumptions, set forth for such Lender in the Register maintained by the AdministrativeAgent pursuant to Section 12.07(d) as such Lenders Revolving Credit Commitment, as suchamount may be reduced at or prior to such time pursuant to Section 2.06.

Revolving Credit Facility means, at any time, the aggregate amount of the LendersRevolving Credit Commitments at such time.

Revolving Credit Note means a promissory note of the Borrower payable to the orderof any Lender, in substantially the form of Exhibit A hereto, evidencing the aggregateindebtedness of the Borrower to such Lender resulting from the Revolving Credit Advances.

SCHIP Programs shall mean State Childrens Health Insurance Program and othersimilar state programs.

Secured Obligations has the meaning specified in Section 2 of the Security Agreement.

Secured Parties means the Agents and the Lenders.

Security Agreement has the meaning specified in Section 3.01(a)(ii).

Settlement Payments means the payments made to the Department of Justice and theAttorneys General of certain States and the Relators as defined and set forth therein in respectof the final civil settlement agreement with the Department of Justice and in compliance with theDOJ Settlement, the OIG-CIA and the NY-CIA.

Single Employer Plan means a single employer plan, as defined in Section 4001(a)(15)of ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and noPerson other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and inrespect of which any Loan Party or any ERISA Affiliate could have liability under Section 4069of ERISA in the event such plan has been or were to be terminated.

Stalking Horse Agreement has the meaning specified in Section 9.01(s).

Subsidiary of any Person means any corporation, partnership, joint venture, limited

liability company, trust or estate of which (or in which) more than 50% of (a) the issued andoutstanding capital stock having ordinary voting power to elect a majority of the Board ofDirectors (or equivalent) of such corporation (irrespective of whether at the time capital stock ofany other class or classes of such corporation shall or might have voting power upon theoccurrence of any contingency), (b) the interest in the capital or profits of such partnership, jointventure or limited liability company or (c) the beneficial interest in such trust or estate is at thetime directly or indirectly owned or controlled by such Person, by such Person and one or more


24/92

18101234622.13

of its other Subsidiaries or by one or more of such Persons other Subsidiaries. For purposes ofclarity, no Practice shall be considered a Subsidiary of any Loan Party.

Subsidiary Guarantors means the Subsidiaries of the Borrower set forth on thesignature pages hereto and each other Subsidiary of the Borrower that shall be required toexecute and deliver a guaranty pursuant to Section 5.09.

Subsidiary Guaranty means the guaranty of the Subsidiary Guarantors set forth inArticle XI, together with each other guaranty and guaranty supplement delivered pursuant toSection 5.09, in each case as amended, amended and restated, modified or otherwisesupplemented.

Synthetic Debt means, with respect to any Person, without duplication of any clausewithin the definition of Debt, all (a) Obligations of such Person under any lease that is treatedas an operating lease for financial accounting purposes and a financing lease for tax purposes(i.e., a synthetic lease), (b) Obligations of such Person in respect of transactions entered intoby such Person, the proceeds from which would be reflected on the financial statements of such

Person in accordance with GAAP as cash flows from financings at the time such transaction wasentered into (other than as a result of the issuance of Equity Interests) and (c) Obligations of suchPerson in respect of other transactions entered into by such Person that are not otherwiseaddressed in the definition of Debt or in clause (a) or (b) above that are intended to functionprimarily as a borrowing of funds.

Taxes has the meaning specified in Section 2.11.

Termination Date means the earliest of (i) the Outside Date, (ii) the date that is 30days after the entry of the Interim Order if the Final Order has not been entered by theBankruptcy Court on or before such date, (iii) the Effective Date, and (iv) the date of termination

in whole of the Revolving Credit Commitments, pursuant to Section 9.01.

Third Party Payor has the meaning specified in Section 4.01.

Third Party Payor Programs has the meaning specified in Section 4.01.

Type refers to the distinction between Revolving Credit Advances bearing interest atthe Base Rate and Revolving Credit Advances bearing interest at the Eurodollar Rate.

Unused Revolving Credit Commitment means, with respect to any Lender at any time,(a) such Lenders Revolving Credit Commitment at such time minus (b) the aggregate principalamount of all Revolving Credit Advances made by such Lender and outstanding at such time.

Voting Interests means shares of capital stock issued by a corporation, or equivalentEquity Interests in any other Person, the holders of which are ordinarily, in the absence ofcontingencies, entitled to vote for the election of directors (or persons performing similarfunctions) of such Person, even if the right so to vote has been suspended by the happening ofsuch a contingency.


25/92

19101234622.13

SECTION 1.02 Computation of Time Periods; Other Definitional Provisions. Inthis Agreement and the other Loan Documents in the computation of periods of time from aspecified date to a later specified date, the word from means from and including and thewords to and until each mean to but excluding. References in the Loan Documents to anyagreement or contract as amended shall mean and be a reference to such agreement or contract

as amended, amended and restated, supplemented or otherwise modified from time to time inaccordance with its terms.

SECTION 1.03 Accounting Terms. All accounting terms not specifically definedherein shall be construed in accordance with generally accepted accounting principles(GAAP).

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01 The Revolving Credit Advances. Each Lender severally agrees, on

the terms and conditions hereinafter set forth, to make advances (each a Revolving CreditAdvance) to the Borrower from time to time on any Business Day during the period from theClosing Date until the Termination Date in an amount for each such Revolving Credit Advancenot to exceed such Lenders Unused Revolving Credit Commitment at such time. (a) Prior to theentry of the Final Order, the aggregate Revolving Credit Commitments of the Lenders shall notexceed the Interim DIP Facility Amount; and (b from and after the entry of the Final Order, theaggregate Revolving Credit Commitments of the Lenders shall not exceed the Final DIP FacilityAmount. Each Revolving Credit Borrowing shall be in an aggregate amount of $100,000 or anintegral multiple of $100,000 in excess thereof and shall consist of Revolving Credit Advancesmade simultaneously by the Lenders ratably according to their Revolving Credit Commitments.Within the limits of each Lenders Unused Revolving Credit Commitment in effect from time to

time, the Borrower may borrow under this Section 2.01, prepay pursuant to Section 2.05 andreborrow under this Section 2.01.

SECTION 2.02 Making the Revolving Credit Advances. (a) Each RevolvingCredit Borrowing shall be made on notice, given not later than 1:00 P.M. (New York City time)on the Business Day prior to the date of the proposed Revolving Credit Borrowing, by theBorrower to the Administrative Agent, which shall give to each Lender prompt notice thereof bytelecopier or electronic communication. Each such notice of a Revolving Credit Borrowing (aNotice of Borrowing) shall be in writing, or by telephone and confirmed immediately inwriting, in substantially the form of Exhibit B hereto, (i) specifying therein the requested date ofsuch Revolving Credit Borrowing and aggregate amount of such Revolving Credit Borrowing

and (ii) certifying as to the satisfaction as of such date of the conditions precedent to suchRevolving Credit Borrowing set forth in Section 3.02. Each delivery of a Notice of Borrowingshall be deemed to be a certification, as of the date of the Revolving Credit Borrowing requestedtherein, that the representations and warranties set forth in Section 4.01 are true and correct in allmaterial respects as of such date, before and after giving effect to such Revolving CreditBorrowing and to the application of the proceeds therefrom. Each Lender shall, before 1:00P.M. (New York City time) on the date of such Revolving Credit Borrowing, make available forthe account of its Applicable Lending Office to the Administrative Agent at the Administrative


26/92

20101234622.13

Agents Account, in same day funds, such Lenders ratable portion of such Revolving CreditBorrowing in accordance with the respective Revolving Credit Commitments of such Lender.After the Administrative Agents receipt of such funds and upon fulfillment of the applicableconditions set forth in Article III, the Administrative Agent will make such funds available to theBorrower by crediting the Borrowers Account.

(b) Each Notice of Borrowing shall be irrevocable and binding on theBorrower. The Borrower shall indemnify each Lender against any loss, cost or expense incurredby such Lender as a result of any failure to fulfill on or before the date specified in such Noticeof Borrowing for such Revolving Credit Borrowing the applicable conditions set forth inArticle III, including, without limitation, any loss, cost or expense incurred by reason of theliquidation or reemployment of deposits or other funds acquired by such Lender to fund theRevolving Credit Advance to be made by such Lender as part of such Revolving CreditBorrowing when such Revolving Credit Advance, as a result of such failure, is not made on suchdate.

(c) Unless the Administrative Agent shall have received notice from a Lenderprior to the date of any Revolving Credit Borrowing that such Lender will not make available tothe Administrative Agent such Lenders ratable portion of such Revolving Credit Borrowing, theAdministrative Agent may assume that such Lender has made such portion available to theAdministrative Agent on the date of such Revolving Credit Borrowing in accordance withsubsection (a) of this Section 2.02 and the Administrative Agent may, in reliance upon suchassumption, make available to the Borrower on such date a corresponding amount. If and to theextent that such Lender shall not have so made such ratable portion available to theAdministrative Agent, such Lender and the Borrower severally agree to repay or pay to theAdministrative Agent forthwith on demand such corresponding amount and to pay interestthereon, for each day from the date such amount is made available to the Borrower until the datesuch amount is repaid or paid to the Administrative Agent, at (i) in the case of the Borrower, the

interest rate applicable at such time under Section 2.06 to Revolving Credit Advancescomprising such Revolving Credit Borrowing and (ii) in the case of such Lender, the greater ofthe Federal Funds Rate and a rate determined by the Administrative Agent in accordance withbanking industry practices on interbank compensation. If such Lender shall pay to theAdministrative Agent such corresponding amount, such amount so paid shall constitute suchLenders Revolving Credit Advance as part of such Revolving Credit Borrowing for allpurposes.

(d) The failure of any Lender to make the Revolving Credit Advance to bemade by it as part of any Revolving Credit Borrowing shall not relieve any other Lender of itsobligation, if any, hereunder to make its Revolving Credit Advance on the date of such

Revolving Credit Borrowing, but no Lender shall be responsible for the failure of any otherLender to make the Revolving Credit Advance to be made by such other Lender on the date ofany Revolving Credit Borrowing.

SECTION 2.03 Repayment of Revolving Credit Advances. The Borrower shallrepay to the Administrative Agent for the ratable account of the Lenders on the Termination Datethe aggregate principal amount of the Revolving Credit Advances then outstanding.


27/92

21101234622.13

SECTION 2.04 Termination or Reduction of the Revolving Credit Commitments.The Borrower may, upon at least three Business Days notice to the Administrative Agent,terminate in whole or reduce in part the Unused Revolving Credit Commitments;provided,however, that each partial reduction of the Revolving Credit Facility (a) shall be in an aggregateamount of $1,000,000 or an integral multiple of $1,000,000 in excess thereof and (b) shall be

made ratably among the Lenders in accordance with their Revolving Credit Commitments.

SECTION 2.05 Prepayments.

(a) Voluntary. The Borrower may, upon at least three Business Days noticeto the Administrative Agent stating the proposed date and aggregate principal amount of theprepayment, and if such notice is given the Borrower shall, prepay the outstanding aggregateprincipal amount of the Revolving Credit Advances comprising part of the same RevolvingCredit Borrowing in whole or ratably in part, together with accrued interest to the date of suchprepayment on the aggregate principal amount prepaid;provided, however, that (i) each partialprepayment shall be in an aggregate principal amount of $100,000 or an integral multiple of$100,000 in excess thereof and (ii) if any prepayment of a Eurodollar Rate Advance is made on a

date other than the last day of an Interest Period for such Revolving Credit Advance, theBorrower shall also pay any amounts owing pursuant to Section 12.04(c).

(b) Mandatory. On the last Business Day of each calendar month, theBorrower shall make a prepayment in an amount equal to 100% of the Excess Cash as of suchdate in respect of the outstanding aggregate principal amount of the Revolving Credit Advancescomprising part of the same Revolving Credit Borrowing in whole or ratably in part, togetherwith accrued interest to the date of such prepayment on the aggregate principal amount prepaid.

SECTION 2.06 Interest. (a) Scheduled Interest. The Borrower shall pay intereston the unpaid principal amount of each Revolving Credit Advance owing to each Lender from

the date of such Revolving Credit Advance until such principal amount shall be paid in full, atthe following rates per annum:

(i) Base Rate Advances. During such periods as such RevolvingCredit Advance is a Base Rate Advance, a rate per annum equal at all times to the sum of(A) the Base Rate in effect from time to time plus (B) the Applicable Margin in effectfrom time to time, payable in arrears on the last day of each month during such periodsand on the date such Base Rate Advance shall be Converted or paid in full.

(ii) Eurodollar Rate Advances. During such periods as such RevolvingCredit Advance is a Eurodollar Rate Advance, a rate per annum equal at all times during

each Interest Period for such Revolving Credit Advance to the sum of (A) the EurodollarRate for such Interest Period for such Revolving Credit Advance plus (B) the ApplicableMargin in effect from the date of the Revolving Credit Borrowing thereof, payable inarrears on the last day of such Interest Period and on the date such Eurodollar RateAdvance shall be Converted or paid in full.

(b) Default Interest. Upon the occurrence and during the continuance of anDefault or Event of Default, the Administrative Agent may, and upon the request of the Required


28/92

22101234622.13

Lenders shall, require that the Borrower pay interest (Default Interest) on (i) the unpaidprincipal amount of each Revolving Credit Advance owing to each Lender, payable in arrears onthe dates referred to in clause (i) or (ii) of Section 2.06(a), as applicable, and on demand, at a rateper annum equal at all times to 2% per annum above the rate per annum required to be paid onsuch Revolving Credit Advance pursuant to clause (i) or (ii) of Section 2.06(a), as applicable,

and (ii) to the fullest extent permitted by applicable law, the amount of any interest, fee or otheramount payable under this Agreement or any other Loan Document to any Agent or any Lenderthat is not paid when due, from the date such amount shall be due until such amount shall be paidin full, payable in arrears on the date such amount shall be paid in full and on demand, at a rateper annum equal at all times to 2% per annum above the rate per annum required to be paid onBase Rate Advances pursuant to clause (i) of Section 2.06(a);provided, however, that followingthe making of the request or the granting of the consent specified by Section 9.01 to authorize theAdministrative Agent to declare the Revolving Credit Advances due and payable pursuant to theprovisions of Section 9.01, Default Interest shall accrue and be payable hereunder whether or notpreviously required by the Administrative Agent.

(c) Notice of Interest Period and Interest Rate. Promptly after receipt of aNotice of Borrowing pursuant to Section 2.02 or a notice of Conversion pursuant to Section 2.08,the Administrative Agent shall give notice to the Borrower and each Lender of the applicableinterest rate determined by the Administrative Agent for purposes of clause (a)(i) or (a)(ii)above.

SECTION 2.07 Fees. (a) Commitment Fee. The Borrower shall pay to theAdministrative Agent for the account of the Lenders a commitment fee, from the date hereof inthe case of each Initial Lender and from the effective date specified in the Assignment andAssumption pursuant to which it became a Lender in the case of each other Lender until theTermination Date, payable in arrears monthly on the first Business Day of each calendar month,commencing on the first such day to occur after the Closing Date, and on the Termination Date,

at the rate of 1/2 of 1% per annum of the average daily Unused Revolving Credit Commitment ofsuch Lender during the respective period;provided, however, that any commitment fee accruedwith respect to any of the Revolving Credit Commitments of a Defaulting Lender during theperiod prior to the time such Lender became a Defaulting Lender and unpaid at such time shallnot be payable by the Borrower so long as such Lender shall be a Defaulting Lender except tothe extent that such commitment fee shall otherwise have been due and payable by the Borrowerprior to such time; andprovided furtherthat no commitment fee shall accrue on any of theRevolving Credit Commitments of a Defaulting Lender so long as such Lender shall be aDefaulting Lender.

(b) Agents Fees. (i) On the Closing Date, the Borrower shall pay theAdministrative Agent, for its own account, an agency fee in the amount of $25,000, and (ii) uponentry of the Final Order, the Borrower shall pay to the Administrative Agent, for the account ofthe Agents and the Lenders, an amount equal to 0.50% of the Final DIP Facility Amount. Eachsuch fee shall be fully earned when paid and shall not be refundable for any reason whatsoever.

SECTION 2.08 Conversion of Revolving Credit Advances.


29/92

23101234622.13

(a) Optional. The Borrower may on any Business Day, upon notice given tothe Administrative Agent not later than 1:00 P.M. (New York City time) on the third BusinessDay prior to the date of the proposed Conversion and subject to the provisions of Sections 2.06and 2.09, Convert all or any portion of the Revolving Credit Advances of one Type comprisingthe same Revolving Credit Borrowing into Revolving Credit Advances of the other Type. Each

such notice of Conversion shall, within the restrictions specified above, specify (i) the date ofsuch Conversion, (ii) the Revolving Credit Advances to be Converted and (iii) if suchConversion is into Eurodollar Rate Advances, the duration of the initial Interest Period for suchRevolving Credit Advances. Each notice of Conversion shall be irrevocable and binding on theBorrower.

(b) Mandatory. (i) On the date on which the aggregate unpaid principalamount of Eurodollar Rate Advances comprising any Revolving Credit Borrowing shall bereduced, by payment or prepayment or otherwise, to less than $500,000, such Revolving CreditAdvances shall automatically Convert into Base Rate Advances, and (ii) upon the occurrence andduring the continuance of any Default, (x) each Eurodollar Rate Advance will automatically, onthe last day of the then existing Interest Period therefor, Convert into a Base Rate Advance and(y) the obligation of the Lenders to make, or to Convert Revolving Credit Advances into,Eurodollar Rate Advances shall be suspended.

SECTION 2.09 Increased Costs, Etc.. (a) After the date hereof, if, due to either(i) any Change in Law or (ii) the compliance with any guideline or request from any central bankor other governmental authority (whether or not having the force of law), there shall be anyincrease in the cost to any Lender of agreeing to make or of making, funding or maintainingEurodollar Rate Advances (excluding, for purposes of this Section 2.09, any such increased costsresulting from (x) Taxes or Other Taxes (as to which Section 2.11 shall govern) and (y) changesin the basis of taxation of overall net income or overall gross income by the United States or bythe foreign jurisdiction or state under the laws of which such Lender is organized or has its

Applicable Lending Office or any political subdivision thereof), then the Borrower shall fromtime to time, upon demand by such Lender (with a copy of such demand to the AdministrativeAgent), pay to the Administrative Agent for the account of such Lender additional amountssufficient to compensate such Lender for such increased cost; and provided, however, that theBorrower shall not be responsible for costs under this Section 2.09 arising more than 180 daysprior to receipt by the Borrower of the demand from the affected Lender pursuant to thisSection 2.09; andprovided furtherthat a Lender claiming additional amounts under thisSection 2.09 agrees to use reasonable efforts (consistent with its internal policy and legal andregulatory restrictions) to designate a different Applicable Lending Office if the making of sucha designation would avoid the need for, or reduce the amount of, such increased cost that maythereafter accrue and would not, in the reasonable judgment of such Lender, be ot