10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to __________

Commission file number: 001-37542

CRH MEDICAL CORPORATION

(Exact name of registrant as specified in its charter)

British Columbia, Canada	Not Applicable
(State or other jurisdiction	(I.R.S. Employer
of incorporation or organization)	Identification Number)

Suite 578 – 999 Canada Place, World Trade Center

Vancouver, BC V6C 3E1

(Address of principal executive offices, including zip code)

(604) 633-1440

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares, no par value	CRHM	NYSE American

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act of 1934).    Yes  ☐    No  ☒

The number of outstanding common shares of the registrant, no par value per share, as of November 6, 2019 was 71,520,559.

CRH MEDICAL CORPORATION

QUARTERLY REPORT ON FORM 10-Q

For the Quarter Ended September 30, 2019

Table of Contents

	PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	39
	Part II. OTHER INFORMATION
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	58
Item 3.	Defaults upon Senior Securities	58
Item 4.	Mine Safety Disclosures	58
Item 5.	Other Information	58
Item 6.	Exhibits	59

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of Canadian securities laws, or collectively, forward-looking statements. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenue or performance, capital expenditures, financing needs and other information that is not historical information. Many of these statements appear, in particular, under the headings “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Forward-looking statements can often be identified by the use of terminology such as “subject to”, “believe,” “anticipate,” “plan,” “expect,” “intend,” “estimate,” “project,” “predict,” “potential,” “may,” “will,” “should,” “would,” “could,” “can,” “continue,” the negatives thereof, variations thereon and similar expressions, or by discussions of strategy. In addition, any statements or information that refer to expectations, beliefs, plans, projections, objectives, performance or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking. In particular, these forward-looking statements include, but are not limited to:

• the size of our addressable markets and our profitability;

• the achievement of our growth strategies and strategic plans and trends in our industry;

• the perceived merit of our products and services;

• our plans and expectations relating to the CRH O’Regan System and our anesthesiology operations;

• our future financing plans and anticipated needs for working capital; and

• our ability to predict developments in government regulation and manage our operations accordingly.

All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and various assumptions. Certain assumptions made in preparing the forward-looking statements include:

• the absence of material adverse changes in our industry or the global economy;

• trends in our industry and markets;

• our ability to maintain good business relationships with our anesthesiologists, other independent contractors or any business partners;

• our ability to comply with current and future regulatory standards;

• our ability to protect our intellectual property rights;

• our continued compliance with third-party intellectual property rights;

• our ability to identify, manage and integrate acquisitions;

• our ability to recruit and retain key personnel; and

• our ability to raise sufficient debt or equity financing to support our continued growth.

We believe there is a reasonable basis for our expectations and beliefs, but forward-looking statements are inherently uncertain. We may not realize our expectations, and our beliefs may not prove correct. Actual results could differ materially from those described or implied by such forward-looking statements. The following uncertainties and factors, among others (including those set forth under “Risk Factors”), could affect future performance and cause actual results to differ materially from those matters expressed in or implied by forward-looking statements:

• our ability to successfully identify and complete corporate transactions and achieve anticipated synergies relating to any acquisitions or alliances;

• our ability to manage our growth effectively and achieve our expansion strategy;

• our ability to retain senior management personnel who have been key to our growth;

• changes to payment rates or methods of third-party payors and changes to U.S. laws that regulate payments for medical services;

• our exposure to potential decreases in revenue and profit margin under our fee for service contracts and arrangements;

• the risk that Ambulatory Surgical Centers (“ASCs”) or other customers may terminate or choose not to renew their agreements with us;

3

• our ability to enforce the non-competition and other restrictive covenants in our agreements;

• our potential need and ability to raise additional capital to fund future operations;

• risks arising from the various restrictive covenants and events of default we are subject to under our credit facilities;

• our ability to incur substantially more debt, which could exacerbate risks associated with increased leverage;

• significant price and volume fluctuations in our common shares;

• the risk that we may write-off intangible assets;

• our ability to maintain or increase anesthesia procedure volumes at our existing ASCs;

• our ability to successfully recruit and retain qualified anesthesiologists or other independent contractors;

• potential adverse events related to our product or our services and related risks associated with product liability, medical malpractice or other legal claims, insurance claims, product recalls and other liabilities;

• the impact of the Patient Protection and Affordable Care Act and any amendments to it;

• the impact of the Medicare Access and CHIP Reauthorization Act of 2015 and any amendments to it;

• our ability to manage third-party service providers and maintain the quality of service that we provide;

• risks relating to income tax audits or changes in our effective income tax rate;

• our dependence on suppliers;

• risks relating to unfavorable economic conditions;

• the risk that we may be subject to a variety of regulatory investigations, claims, lawsuits, and other proceedings;

• our ability to adequately protect or enforce our intellectual property;  

• the risk that patent protection for our products may expire;

• our ability to successfully market our products and services;  

• the risk that our employees and third-party contractors may not appropriately record or document services that they provide;

• our ability to timely or accurately bill for services;

• the level of competition in our industry;

• changes in federal or state laws, rules, regulations, or in interpretations of such laws, rules or regulations, which may require us to redeem our physician partners’ ownership interests in anesthesia companies under the savings clause in our joint venture operating agreements;

• our ability to comply with U.S. federal and state fraud and abuse laws;

• the risk that our employees and business partners may not appropriately secure and protect confidential information in their possession;

• our ability to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions or data corruption;

• the risk that we may be subject to criminal or civil sanctions if we fail to comply with privacy regulations regarding the protection, use and disclosure of patient information;

• our legal responsibility to the minority owners of the entities through which we own our anesthesia services business, which may conflict with, and prevent us from acting in, our own best interests;

• the risk that a significant number of our affiliated physicians could leave our affiliated ASCs;  

• changes in regulations or regulatory interpretations, which may obligate us to re-negotiate agreements with our anesthesiologists or other contractors;

• our dependence on maintaining strong relationships with physicians in order to continue the development of our products and provision of our services;  

4

• the extensive level of federal, state, and local regulation, and changes in law and regulatory interpretations relating to our industry;

• the risk that unfavorable changes or conditions could occur in the states where our operations are concentrated;

• the risk that government authorities or other parties may assert that our business practices violate antitrust laws;

• the potential that our significant shareholders could influence our business operations and sales of our shares by such significant shareholders could influence our share price;

• anti-takeover provisions in our constating documents that could discourage a third party from making a takeover offer that could be beneficial to our shareholders;

• changes in the medical industry and the economy that may affect the Company’s business;

• the existence in our industry of numerous governmental investigations into marketing and other business practices which could result in fines, penalties, administrative remedies or divert the attention of our management;

• the evolving regulation of corporate governance and public disclosure, which may result in additional expenses and continuing uncertainty;

• our exposure to adverse movements in foreign currency exchange rates;

• our ability and the ability of our suppliers to comply with the U.S. Food and Drug Administration’s (“FDA”) Quality System Regulation and other applicable requirements;

• our intention not to pay dividends on our common shares and the consequence that any return on a shareholder’s investment in our common shares will depend on appreciation, if any, in the price of our common shares;

• the impact of tax reform on our business;

• the risk that as an “emerging growth company” and “smaller reporting company,” our common shares may be less attractive to investors;

• our ability to maintain an effective system of internal control over financial reporting; and

• the risk that our share price and trading volume could decline if securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business.

Consequently, forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on forward-looking statements. We cannot guarantee future results, events, levels of activity, performance or achievements. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events, except as required by law.

We own or have rights to trademarks, service marks or trade names that we use in connection with the operation of our business. In addition, our names, logos and website names and addresses are our service marks or trademarks. CRH and the CRH O’Regan System are registered trademarks. The other trademarks, trade names and service marks appearing in this Quarterly Report on Form 10-Q are the property of their respective owners. Solely for convenience, the trademarks, service marks, tradenames and copyrights referred to in this Quarterly Report on Form 10-Q are listed without the ©, ® and TM symbols, but we will assert, to the fullest extent under applicable law, our rights or the rights of the applicable licensors to these trademarks, service marks and tradenames.

We express all amounts in this Quarterly Report on Form 10-Q in U.S. dollars, except where otherwise indicated. References to “$” and “US$” are to U.S. dollars and references to “C$” are to Canadian dollars.

Except as otherwise indicated, references in this Quarterly Report on Form 10-Q to “CRH,” the “Company,” “we,” “us” and “our” refer to CRH Medical Corporation and its consolidated subsidiaries.

5

PART I. FINANCIAL INFORMATION

Item1. Financial Statements

CRH Medical Corporation

Index to Condensed Consolidated Interim Financial Statements (unaudited)

As of and for the three and nine months ended September 30, 2019 and 2018

	Page
Condensed Consolidated Balance Sheets	7
Condensed Consolidated Statements of Operations and Comprehensive Income	8
Condensed Consolidated Statements of Changes in Equity	9
Condensed Consolidated Statements of Cash Flows	11
Notes to the Condensed Consolidated Financial Statements	12

6

CRH MEDICAL CORPORATION

Condensed Consolidated Balance Sheets (unaudited)

(Expressed in United States dollars)

	Notes	September 30, 2019			December 31, 2018
Assets
Current assets:
Cash and cash equivalents		$	5,215,044		$	9,946,945
Trade and other receivables, net	5		19,570,536			19,467,803
Income tax receivable			2,424,940			2,243,319
Prepaid expenses and deposits			515,821			822,119
Inventories, finished goods			357,235			402,544
			28,083,576			32,882,730
Non-current assets:
Property and equipment, net			266,740			303,291
Right of use asset	7		282,075			—
Intangible assets, net	8		157,806,356			179,384,263
Deferred asset acquisition costs			440			116,025
Equity accounted investment	9		324,184			—
Deferred tax assets			9,669,798			6,301,687
			168,349,593			186,105,266
Total assets		$	196,433,169		$	218,987,996
Liabilities
Current liabilities:
Trade and other payables	6	$	6,477,425		$	5,763,222
Employee benefits			1,061,555			827,436
Income tax payable			27,147			—
Current obligation related to right of use assets	7		178,590			—
Notes payable and bank indebtedness	10		—			2,239,637
Deferred consideration			1,172,948			1,043,645
Earn-out obligation	13		973,094			2,920,583
Short-term advances			—			26,783
Member loan			30,625			49,000
			9,921,384			12,870,306
Non-current liabilities:
Deferred consideration			—			1,183,092
Long-term obligation related to right of use assets	7		67,231			—
Notes payable and bank indebtedness	10		68,145,464			67,621,470
Deferred tax liabilities			21,962			21,951
			68,234,657			68,826,513
Equity
Common stock, no par value; 71,696,559 and 72,055,688 shares issued    and outstanding at September 30, 2019 and December 31, 2018,    respectively	11		55,598,273			55,372,884
Additional paid-in capital			7,064,783			9,329,335
Accumulated other comprehensive income (loss)			(66,772	)		(66,772	)
Retained earnings			12,506,661			12,916,565
Total equity attributable to shareholders of the Company			75,102,945			77,552,012
Non-controlling interest			43,174,183			59,739,165
Total equity			118,277,128			137,291,177
Total liabilities and equity		$	196,433,169		$	218,987,996

See accompanying notes to condensed consolidated financial statements.

Commitments and contingencies (note 14)

Subsequent event (note 17)

7

CRH MEDICAL CORPORATION

Condensed Consolidated Statements of Operations and Comprehensive Income (unaudited)

(Expressed in United States dollars, except share and per share data)

		Three months ended September 30,					Nine months ended September 30,
	Notes	2019			2018		2019			2018
Revenue:
Anesthesia services	16	$	27,966,629		$	26,073,462	$	82,685,905		$	72,858,705
Product sales	16		2,448,174			2,658,131		7,330,147			7,868,907
			30,414,803			28,731,593		90,016,052			80,727,612
Expenses:
Anesthesia services expense			23,774,049			21,405,928		69,804,891			59,105,405
Product sales expense			1,089,316			1,181,976		3,441,207			3,757,518
Corporate expense			1,838,812			1,644,356		4,645,347			4,497,757
			26,702,177			24,232,260		77,891,445			67,360,680
Operating income			3,712,626			4,499,333		12,124,607			13,366,932
Finance expense	12		1,125,410			1,624,875		5,696,343			2,846,822
Equity income	9		(77,278	)		—		(416,584	)		—
Income before tax			2,664,494			2,874,458		6,844,848			10,520,110
Income tax expense			565,165			390,042		736,052			1,652,444
Net and comprehensive income		$	2,099,329		$	2,484,416	$	6,108,796		$	8,867,666
Attributable to:
Shareholders of the Company		$	982,368		$	266,831	$	2,552,084		$	2,968,777
Non-controlling interest			1,116,961			2,217,585		3,556,712			5,898,889
		$	2,099,329		$	2,484,416	$	6,108,796		$	8,867,666
Earnings per share attributable to shareholders
Basic	11(f)	$	0.014		$	0.004	$	0.036		$	0.041
Diluted	11(f)	$	0.013		$	0.004	$	0.035		$	0.040
Weighted average shares outstanding:
Basic	11(f)		71,831,356			71,831,356		71,845,812			71,831,356
Diluted	11(f)		72,799,142			73,469,373		73,023,144			73,305,400

See accompanying notes to condensed consolidated financial statements.

8

CRH MEDICAL CORPORATION

Condensed Consolidated Statements of Changes in Equity (unaudited)

(Expressed in United States dollars, except for number of shares)

For the three and nine months ended September 30, 2019 and 2018

	Number of shares			Common stock			Additional paid -in capital			Accumulated other comprehensive loss			Retained earnings			Non-controlling interest			Total equity
Balance as at January 1, 2018		73,018,588		$	54,614,601		$	8,219,760		$	(66,772	)	$	11,078,608		$	57,451,848		$	131,298,045
Total net and comprehensive income for the period		—			—			—			—			1,410,998			1,746,433			3,157,431
Stock-based compensation		—			—			737,621			—			—			—			737,621
Common shares issued on vesting of share units		60,000			176,317			(176,317	)		—			—			—			—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(98,900	)		(72,458	)		—			—			(180,107	)		—			(252,565	)
Common shares repurchased in connection with normal course issuer bid and held as    treasury shares (107,900 treasury shares) (note 11(e))		—			(79,052	)		—			—			(196,496	)		—			(275,548	)
Cancellation of treasury shares		(72,400	)		—			—			—			—			—			—
Distribution to members		—			—			—			—			—			(6,774,450	)		(6,774,450	)
Balances as at March 31, 2018		72,907,288		$	54,639,408		$	8,781,064		$	(66,772	)	$	12,113,003		$	52,423,831		$	127,890,534
Total net and comprehensive income for the period		—			—			—			—			1,290,949			1,934,869		$	3,225,818
Stock-based compensation		—			—			718,812			—			—			—			718,812
Common shares issued on vesting of share units		64,000			368,112			(368,112	)		—			—			—			—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(189,800	)		(139,009	)		—			—			(372,196	)		—			(511,205	)
Cancellation of treasury shares		(107,900	)		—			—			—			—			—			—
Distribution to members		—			—			—			—			—			(3,694,810	)		(3,694,810	)
Acquisition of non-controlling interest		—			—			—			—			—			6,229,435			6,229,435
Balances as at June 30, 2018		72,673,588		$	54,868,511		$	9,131,764		$	(66,772	)	$	13,031,756		$	56,893,325		$	133,858,584
Total net and comprehensive income for the period		—			—			—			—			266,831			2,217,585			2,484,416
Stock-based compensation		—			—			744,531			—			—			—			744,531
Common shares issued on vesting of share units		73,750			275,160			(275,160	)		—			—			—			—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(183,300	)		(134,159	)		—			—			(430,181	)		—			(564,340	)
Distribution to members		—			—			—			—			—			(4,149,200	)		(4,149,200	)
Acquisition of non-controlling interest		—			—			—			—			—			4,844,216			4,844,216
Balance as at September 30, 2018		72,564,038		$	55,009,512		$	9,601,135		$	(66,772	)	$	12,868,406		$	59,805,926		$	137,218,207

9

CRH MEDICAL CORPORATION

Condensed Consolidated Statements of Changes in Equity (continued) (unaudited)

(Expressed in United States dollars, except for number of shares)

For the three and nine months ended September 30, 2019 and 2018

	Number of shares			Common stock			Additional paid -in capital			Accumulated other comprehensive loss			Retained earnings			Non-controlling interest			Total equity
Balance as at January 1, 2019		72,055,688		$	55,372,884		$	9,329,335		$	(66,772	)	$	12,916,565		$	59,739,165		$	137,291,177
Total net and comprehensive income (loss) for the period		—			—			—			—			(76,968	)		1,467,758			1,390,790
Stock-based compensation		—			—			564,251			—			—			—			564,251
Common shares issued on vesting of share units		2,500			8,235			(8,235	)		—			—			—			—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(461,600	)		(347,300	)		—			—			(1,063,523	)		—			(1,410,823	)
Common shares repurchased in connection with normal course issuer bid and held as    treasury shares (27,000 treasury shares) (note 11(e))		—			(20,291	)		—			—			(62,205	)		—			(82,496	)
Cancellation of treasury shares		(10,400	)		—			—			—			—			—			—
Distributions to members		—			—			—			—			—			(4,034,800	)		(4,034,800	)
Balance as at March 31, 2019		71,586,188		$	55,013,528		$	9,885,351		$	(66,772	)	$	11,713,869		$	57,172,123		$	133,718,099
Total net and comprehensive income (loss) for the period		—			—			—			—			1,646,683			971,992			2,618,675
Stock-based compensation		—			—			(990,382	)		—			—			—			(990,382	)
Common shares issued on exercise of stock options		825,000			721,415			(301,803	)											419,612
Common shares issued on vesting of share units		111,500			371,870			(371,870	)		—			—			—			—
Cancellation of treasury shares (held as treasury as of March 31, 2019)		(27,000	)																	—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(461,830	)		(347,065	)		—			—			(967,868	)		—			(1,314,933	)
Common shares repurchased in connection with normal course issuer bid and held as    treasury shares (23,000 treasury shares) (note 11(e))		—			(17,284	)		—			—			(48,208	)		—			(65,492	)
Distributions to members		—			—			—			—			—			(4,153,860	)		(4,153,860	)
Purchase of equity interest from non-controlling interest (note 4)		—			—			(728,279	)		—			—			(1,687,070	)		(2,415,349	)
Acquisition of non-controlling interest (note 4)		—			—			—			—			—			1,465,715			1,465,715
Balance as at June 30, 2019		72,033,858			55,742,464			7,493,017			(66,772	)		12,344,476			53,768,900			129,282,085
Total net and comprehensive income (loss) for the period		—			—			—			—			982,368			1,116,961			2,099,329
Stock-based compensation		—			—			706,479			—			—			—			706,479
Common shares issued on exercise of stock options		15,000			11,749			(4,997	)		—			—			—			6,752
Common shares issued on vesting of share units		36,250			133,047			(133,047	)		—			—			—			—
Cancellation of treasury shares (held as treasury as of June 30, 2019)		(23,000	)		—			—			—			—			—			—
Common shares repurchased in connection with normal course issuer bid and cancelled    (note 11(e))		(365,549	)		(274,708	)		—			—			(779,660	)		—			(1,054,368	)
Common shares repurchased in connection with normal course issuer bid and held as    treasury shares (19,000 treasury shares) (note 11(e))		—			(14,279	)		—			—			(40,523	)		—			(54,802	)
Distributions to members		—			—			—			—			—			(3,615,819	)		(3,615,819	)
Purchase of equity interest from non-controlling interest (note 4)		—			—			(996,669	)		—			—			(5,989,822	)		(6,986,491	)
Acquisition of non-controlling interest, including LWA price adjustment (note 4)		—			—						—			—			(2,106,037	)		(2,106,037	)
Balance as at September 30, 2019		71,696,559		$	55,598,273		$	7,064,783		$	(66,772	)	$	12,506,661		$	43,174,183		$	118,277,128

See accompanying notes to condensed consolidated financial statements.

10

CRH MEDICAL CORPORATION

Condensed Consolidated Statements of Cash Flows (unaudited)

(Expressed in United States dollars)

			Three months ended September 30,						Nine months ended September 30,
	Notes		2019			2018			2019			2018
Operating activities:
Net income			$	2,099,329		$	2,484,416		$	6,108,796		$	8,867,666
Adjustments for:
Depreciation of property, equipment and intangibles				8,555,909			8,208,760			25,974,283			23,147,980
Stock-based compensation		11		706,479			744,532			280,348			2,200,964
Unrealized foreign exchange				(50	)		(45,742	)		726			(40,420	)
Deferred income tax recovery				(776,300	)		(617,700	)		(2,749,616	)		(2,184,213	)
Change in fair value of contingent consideration		12		181,805			673,125			2,771,238			236,275
Accretion on contingent consideration and deferred    consideration		12		10,145			35,549			123,305			123,411
Amortization of deferred financing fees		12		65,091			65,091			195,273			195,272
Equity income		9		(77,278	)		—			(416,584	)		—
Change in current tax receivable				(17,826	)		(673,685	)		(154,474	)		(2,265,791	)
Change in trade and other receivables				(182,433	)		(1,157,352	)		(102,733	)		(1,780,965	)
Change in prepaid expenses				(59,218	)		57,544			268,162			319,879
Change in inventories				153,837			(176,683	)		45,309			(147,266	)
Change in trade and other payables				(83,936	)		2,088,802			91,726			845,886
Change in employee benefits				135,609			225,542			234,120			329,807
Net cash provided by operating activities				10,711,163			11,912,199			32,669,879			29,848,485
Financing activities
Repayment of member loans				(14,375	)		(186,200	)		(18,375	)		(435,000	)
Proceeds (repayment) on short-term advances				—			110,767			(26,783	)		110,767
Payment of deferred consideration				—			—			(1,100,000	)		(1,000,000	)
Payment of contingent consideration		13		—			—			(4,795,822	)		—
Repayment of notes payable and bank indebtedness				(5,625,000	)		—			(13,175,000	)		(11,000,000	)
Proceeds on bank indebtedness				7,000,000			4,500,000			11,300,000			18,300,000
Proceeds from exercise of stock options				6,753			—			426,366			—
Distributions to non-controlling interest				(3,615,819	)		(4,149,200	)		(11,804,480	)		(14,618,460	)
Repurchase of shares for cancellation	11(e)			(1,109,170	)		(564,342	)		(3,982,914	)		(1,603,658	)
Net cash used in financing activities				(3,357,611	)		(288,975	)		(23,177,008	)		(10,246,351	)
Investing activities
Acquisition of property and equipment				(4,834	)		(2,946	)		(45,681	)		(9,353	)
Deferred asset acquisition costs				38,437			—			(440	)		—
Acquisition of equity interest from non-controlling    interest		4		(7,018,658	)		—			(9,434,009	)		—
Acquisition of anesthesia services providers		4		(2,174,003	)		(9,275,054	)		(9,204,437	)		(25,253,936	)
Distribution received from equity investment		9		92,400			—			92,400
Purchase adjustment relating to anesthesia service providers acquired in prior periods		4		4,366,000			—			4,366,000			—
Net cash used in investing activities				(4,700,658	)		(9,278,000	)		(14,226,167	)		(25,263,289	)
Effects of foreign exchange on cash and cash equivalents				(270	)		17,719			1,395			6,831
Increase (decrease) in cash and cash equivalents				2,652,624			2,362,943			(4,731,901	)		(5,654,324	)
Cash and cash equivalents, beginning of period				2,562,420			4,469,617			9,946,945			12,486,884
Cash and cash equivalents, end of period			$	5,215,044		$	6,832,560		$	5,215,044		$	6,832,560
Supplemental disclosures:
Cash interest paid			$	(772,680	)	$	(600,510	)	$	(2,532,084	)	$	(2,041,263	)
Taxes paid			$	(1,359,634	)	$	(1,681,427	)	$	(3,640,248	)	$	(6,102,449	)
Operating lease payments			$	(90,669	)	$	(73,651	)	$	(278,339	)	$	(212,510	)
Non-cash acquisition costs			$	(586,561	)	$	—		$	(702,586	)	$	—

See accompanying notes to condensed consolidated financial statements.

11

CRH MEDICAL CORPORATION

Notes to the condensed consolidated financial statements
(unaudited)

1. Nature of operations:

CRH Medical Corporation (“CRH” or “the Company”) was incorporated on April 21, 2001 and is incorporated under the Business Corporations Act (British Columbia).  The Company provides anesthesiology services to gastroenterologists in the United States through its subsidiaries and sells its patented proprietary technology for the treatment of hemorrhoids directly to physicians in the United States and Canada.

CRH principally operates in the United States and is headquartered from its registered offices located at Unit 578, 999 Canada Place, Vancouver, British Columbia, Canada.

2. Summary of significant accounting policies:  

(a) Basis of presentation:

As a non-U.S. company listed on the NYSE, the United States Securities and Exchange Commission (“SEC”) requires us to perform a test on the last business day of the second quarter of each fiscal year to determine whether we continue to meet the definition of a foreign private issuer (“FPI”). Historically, we met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with IFRS, reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs.

On June 30, 2018, we performed the test and determined that we no longer met the definition of a FPI. As such, from January 1, 2019, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers.

These condensed consolidated interim financial statements have been prepared in accordance with US GAAP beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report.

These interim financial statements do not include all note disclosures required on an annual basis, and therefore, should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2018, filed with the appropriate securities regulatory authorities.

In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive income, condensed consolidated statements of changes in equity and condensed consolidated statements cash flows as at September 30, 2019 and for all periods presented, have been recorded. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the Company's full year results.

(b) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company through voting control and for the anesthesia business, control over the assets and business operations of the subsidiary through operating agreements.  Control exists when the Company has the continuing power to govern the financial and operating polices of the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. Minority interests, if any, are valued at fair value at inception. All significant intercompany transactions and balances have been eliminated on consolidation.

(c) Use ofestimates, assumptions and judgments:

ThepreparationoftheCompany’sconsolidatedfinancial statementsrequiresmanagementtomake judgments, estimatesandassumptionsthataffectthe application of accounting policies, the reportedamounts of assetsandliabilities, the disclosure of contingent assetsand liabilitiesat thedateof the financial statements and thereported amounts of revenues and expenses duringthe reporting period.

12

2. Summary of significant accounting policies (continued):  

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take.  Actual results could differ from those estimates.

(d) Equity method investment:

The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest.

3. Recent accounting pronouncements:

(a) Initial adoption of new accounting standards:

In February 2016, FASB issued ASU No. 2016-02 “Leases”, and subsequently ASU No. 2017-13, establishing principles for the recognition, measurement, presentation and disclosure of leases. The standard requires lessees to recognize most leases on the balance sheet and certain limited changes to lessor accounting. The standard is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The Company adopted the standard using the modified retrospective method effective January 1, 2019 with nearly all operating classified leases classified as operating leases under this new standard with a right-of-use asset and a corresponding obligation recognized on the balance sheet at the adoption date. The lease obligation is measured at amortized cost using the effective interest method. The Company has applied the exemption to treat short-term leases as executory contracts and has applied the package of practical expedients which allowed the Company to carry forward historical lease classification. Upon adoption, the Company recognized $332,512 as a right of use asset with a $295,188 corresponding obligation on its balance sheet at January 1, 2019.   Refer to note 7.

(b) Recent accounting pronouncements not yet adopted:

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments- Credit Losses (Topic 326)”, which requires companies to measure credit losses on financial instruments measured at amortized cost applying an “expected credit loss” model based upon past events, current conditions and reasonable and supportable forecasts that affect collectability. Previously, companies applied an “incurred loss” methodology for recognizing credit losses. This standard is effective for fiscal years beginning after December 15, 2019. The Company is in the process of evaluating the impact of this standard on its balance sheet, results of operations and cash flows.

4. Asset acquisitions:

During the nine months ended September 30, 2019, the Company completed three asset acquisitions. The asset acquisitions have been included in the anesthesia segment of the Company and represent the following:

Acquired Operation	Date Acquired	Consideration
Anesthesia Care Associates LLC (“ACA”)	January 2019	$	5,355,028
South Metro Anesthesia Associates LLC ("SMAA")	May 2019	$	1,791,431
Crystal River Anesthesia Associates LLC ("CRAA")	July 2019	$	2,174,003

The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the respective date of acquisition as the Company has obtained control over the entities.

13

4. Asset acquisitions (continued):

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition dates.

	ACA			SMAA			CRAA			Total
Cash	$	5,239,003		$	1,752,465		$	2,130,000		$	9,121,468
Acquisition costs		116,025			38,966			44,003			198,994
Purchase consideration	$	5,355,028		$	1,791,431		$	2,174,003		$	9,320,462
Non-controlling interest		—			1,465,716			2,088,748			3,554,464
	$	5,355,028		$	3,257,147		$	4,262,751			12,874,926
Assets and liabilities acquired:
Exclusive professional services agreements	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Pre-close accounts receivable		50,000			—			—			50,000
Pre-close accounts payable		(50,000	)		—			—			(50,000	)
Fair value of net identifiable assets and liabilities acquired	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Exclusive professional services agreements – amortization term	6 years			5 years			5 years
CRH ownership interest acquired		100	%		55	%		51	%

The value of the acquired intangible assets, being exclusive professional services agreements, relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements and professional services agreements.

In addition to the above asset acquisition, on April 3, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Arapahoe Gastroenterology Anesthesia Associates LLC (“Arapahoe”); prior to the purchase the Company held a 51% interest in the Arapahoe entity.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $2,300,000 plus 49% of Arapahoe’s working capital as at March 31, 2019.  Additionally, the Company incurred deferred acquisition costs of $26,086. 

On August 31, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Central Colorado Anesthesia Associates LLC (“CCAA”); prior to the purchase the Company held a 51% interest in the CCAA entity.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $7,000,000 plus 49% of CCAA’s working capital as at August 31, 2019.  Additionally, the Company incurred deferred acquisition costs of $18,658. 

During the quarter ended September 30, 2019, the Company also received a payment of $4,366,000 in respect of the LWA acquisition which was a reduction in the purchase price.  This payment served to reduce the value of the related LWA professional services contract intangible and did not modify ownership interest or the term of the LWA agreement.

During the year ended December 31, 2018, the Company completed five asset acquisitions. These asset acquisitions have been included in the anesthesia segment of the Company and represents the following:

Acquired Operation	Date Acquired	Consideration
Shreveport Sedation Associates LLC (“SSA”)	March 2018	$	9,495,184
Western Ohio Sedation Associates LLC (“WOSA”)	May 2018	$	6,483,698
Lake Washington Anesthesia LLC (“LWA”)	July 2018	$	5,041,939
Lake Erie Sedation Associates LLC (“LESA”)	September 2018	$	4,233,115
Tennessee Valley Anesthesia Associates LLC (“TVAA”)	December 2018	$	2,255,875

The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the date of acquisition as the Company has control over these entities.

14

4. Asset acquisitions (continued):

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition date.

	SSA			WOSA			LWA			LESA			TVAA			Total
Cash	$	9,404,148		$	6,409,000		$	5,000,000		$	4,180,000		$	2,200,000		$	27,193,148
Acquisition costs		91,036			74,698			41,939			53,115			55,875			316,663
Purchase consideration	$	9,495,184		$	6,483,698		$	5,041,939		$	4,233,115		$	2,255,875		$	27,509,811
Non-controlling interest	$	—		$	6,229,435		$	4,844,217		$	—		$	2,167,409		$	13,241,061
	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Assets and liabilities acquired:
Exclusive professional services agreements	$	9,391,036		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,646,723
Prepaid expenses and deposits		104,148			—			—			—						104,149
Pre-close accounts receivable		—			—			652,506			—						652,506
Pre-close accounts payable		—			—			(652,506	)		—						(652,506	)
Fair value of net identifiable assets and    liabilities acquired	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Exclusive professional services agreements    – amortization term	7 years			10 years			7 years			10 years			7 years
CRH ownership interest		100	%		51	%		51	%		100	%		51	%

The value of the acquired intangible assets, being exclusive professional services agreements, relate to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization term for the agreements is based upon contractual terms within the acquisition agreement and professional services agreement.

The non-controlling interest was determined with reference to the non-controlling interest shareholder’s share of the fair value of the net identifiable assets as estimated by the Company.  

5. Trade and other receivables:

	September 30, 2019			December 31, 2018
Trade receivables, gross	$	19,559,565		$	19,373,260
Other receivables		54,177			141,141
Less:  allowance for doubtful accounts		(43,206	)		(46,598	)
	$	19,570,536		$	19,467,803
Anesthesia segment – trade receivables, gross		18,641,926			18,199,847
Product segment – trade receivables, gross		917,639			1,173,413
	$	19,559,565		$	19,373,260

6. Trade and other payables:

	September 30, 2019		December 31, 2018
Trade payables	$	969,657	$	1,316,821
Payable to CCAA vendor	$	586,561	$	—
Accruals and other payables		4,921,207		4,446,401
	$	6,477,425	$	5,763,222

15

7. Right of use assets and related obligations:

On adoption of ASU No. 2016-02 “Leases”, and subsequently ASU No. 2017-13, the Company recognized $332,512 and $295,188 as right of use assets and obligations, respectively at January 1, 2019.  These amounts relate to two operating leases for premises existing as at January 1, 2019, with a further premises operating lease added in March 2019.  The Company has applied the exemption to treat short-term leases as executory contracts as well as applied the practical expedient to choose not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component.  During the three and nine months ended September 30, 2019, the Company incurred total operating lease expenses of $90,670 and $278,339, respectively, For the three months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $69,572 and variable lease payments of $21,098.  For the nine months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $216,261 and variable lease payments of $62,078.

Lease expense is allocated to operating segments based on the location of the leases, as follows:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Anesthesia services expense	$	28,106	$	16,205	$	90,839	$	48,062
Product sales expense		31,282		28,723		93,750		82,225
Corporate expense		31,282		28,723		93,750		82,225
	$	90,670	$	73,651	$	278,339	$	212,512

The weighted average lease term of the Company’s three premises leases is 1.37 years.  The weighted average discount rate used by the Company in calculating the obligation relating to right of use assets is based on the Company’s Credit Facility, which is disclosed in note 10.

The following table presents a maturity analysis of the Company’s undiscounted lease obligations for each of the next five years, reconciled to the obligation as recorded on the balance sheet.

	Undiscounted lease payments
Remainder of 2019	$	68,920
2020		129,119
2021		55,498
	$	253,537
Accretion related to outstanding lease obligations		(7,716	)
Total	$	245,821
Current obligation relating to right of use assets	$	178,590
Long-term obligation relating to right of use assets	$	67,231
Total	$	245,821

16

8. Intangible assets:

Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost.  For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses.  Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line	15 years
Intellectual property new technology	Straight-line	20 years
Exclusive professional services agreements	Straight-line	4.5 to 15 years

	Professional Services Agreements		Patents		Total
Cost
Balance as at December 31, 2018	$	256,491,260	$	532,598	$	257,023,858
Additions through asset acquisitions and adjustments (note 4)		4,314,142		—		4,314,142
Balance as at September 30, 2019	$	260,805,402	$	532,598	$	261,338,000

	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at December 31, 2018	$	77,139,732	$	499,863	$	77,639,595
Amortization expense		25,890,540		1,509		25,892,049
Balance as at September 30, 2019	$	103,030,272	$	501,372	$	103,531,644

	Professional Services Agreements		Patents		Total
Net book value
September 30, 2019	$	157,775,130	$	31,226	$	157,806,356
December 31, 2018	$	179,351,528	$	32,735	$	179,384,263

The Company identified indicators of impairment in respect of one professional services agreement as at September 30, 2019. Upon performing undiscounted cash flow models for the asset to assess its recoverability, the Company did not identify any impairment.No further indicators of impairment were identified at September 30, 2019

As at December 31, 2018, the Company identified indicators of impairment in respect of four of its professional services agreements.  Upon performing undiscounted cash flow models for these assets, the Company identified only two assets that required further review for impairment.  

The Company performed discounted cash flow modelling for these assets and compared the resultant discounted cash flows expected over the life of the assets to the carrying amounts as at December 31, 2018.  The income approach was used for the quantitative assessment to estimate the fair value of the assets, which requires estimating future cash flows and risk-adjusted discount rates in the Company's discounted cash flow model. The overall market outlook and cash flow projections of the reporting unit involves the use of key assumptions, including anesthesia growth rates, discount rates and operating cost growth rates. Due to uncertainties in the estimates that are inherent to the Company's industry, actual results could differ significantly from the estimates made. Many key assumptions in the cash flow projections are interdependent on each other. A change in any one or combination of these assumptions could impact the estimated fair value of the reporting unit.

17

8. Intangible assets (continued):

As a result of this test, no write-downs to the intangible assets were required.

Various of the Company’s professional services agreements are subject to renewal terms.  The weighted average period before the Company’s professional services agreements are up for renewal is 3.49 years.  The weighted average remaining amortization period for the Company’s professional services agreements is 5.42 years.

Based on the Company’s professional services agreements in place at September 30, 2019, the Company anticipates that the amortization expense to be incurred by the Company over the next five years is as follows:

	Amortization Expense
For professional services agreements as at September 30, 2019:
Remainder of 2019	$	8,665,085
2020		34,577,141
2021		29,270,763
2022		22,549,476
2023		18,403,113
The first nine months of 2024		13,274,316
	$	126,739,894

9. Equity investment:

In October 2018, the Company entered into an agreement with Digestive Health Specialists (“DHS”), located in North Carolina, to assist DHS in the development and management of a monitored anesthesia care program.  Under the terms of the agreement, CRH is a 15% equity owner in the anesthesia business, Triad Sedation Associates LLC, and receives compensation for its billing and collection services.  Under the terms of the limited liability company agreement, CRH has the right, at CRH’s option, to acquire an additional 36% interest in the anesthesia business at a future date, but no sooner than November 2019.  The Company assessed and concluded that, as TSA is an LLC, equity method accounting is required under ASC 970-323. To fund working capital needs, each equity owner of TSA has provided a working capital loan, repayable within 12 months.  All working capital loans have been repaid as at September 30, 2019.

The option agreement was determined to be an executory contract and both the equity interest and option agreement were determined to have only nominal value upon grant and as at September 30, 2019.

The following table provides a summary of the Company’s investment in TSA as at September 30, 2019:

	Nine months ended September 30, 2019
Beginning balance	$	—
Share of net income		416,584
Member distributions		(92,400	)
Ending balance	$	324,184

18

9. Equity investment (continued):

The following table summarizes unaudited financial information for our equity method investee.

Balance sheet:	September 30, 2019
Current assets	$	2,176,239
Non-current assets		—
Total assets	$	2,176,239
Current liabilities	$	319,972
Non-current liabilities		—
Shareholders’ equity		1,856,267
Total liabilities and shareholders’ equity	$	2,176,239

Results of operations	Nine months ended September 30, 2019
Anesthesia revenue	$	3,811,965
Anesthesia services expense		1,339,698
Net income	$	2,472,267

10. Notes payable:

	September 30, 2019		December 31, 2018
Current portion	$	—	$	2,239,637
Non-current portion		68,145,464		67,621,470
Total loans and borrowings	$	68,145,464	$	69,861,107

The Bank of Nova Scotia (“Scotia Facility”)

As at September 30, 2019, the Company had drawn $68,375,000 on the amended facility (2018 - $70,250,000).  The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin.  At September 30, 2019, interest on the facility is calculated at LIBOR plus 2.25% on both the revolving and term portions of the facility.  The Facility is secured by the assets of the Company.  As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at September 30, 2019.  The Company’s facility matures on August 15, 2020; however, the facility will be replaced by a syndicated facility held by JP Morgan.  Refer to subsequent event note 17.  

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At September 30, 2019
Remainder of 2019	$	—
2022		68,375,000
	$	68,375,000

19

11. Share capital:

(a) Authorized:

100,000,000 common shares without par value.

(b) Issued and outstanding – common shares:

Other than in connection with shares issued in respect of the Company’s share unit and share option plans and in connection with the Company’s normal course issuer bid (note 11(e)), there were no share transactions in the three and nine months ended September 30, 2019 and 2018.

(c) Share unit plan:

In June 2017, the shareholders of the Company approved a Share Unit Plan.   Employees, directors and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the Share Unit Plan. In accordance with the terms of the plan, the Company will approve those employees, directors and eligible consultants who are entitled to receive share units and the number of share units to be awarded to each participant. Each share unit awarded conditionally entitles the participant to receive one common share of the Company upon attainment of the share unit vesting criteria.  The vesting of share units is conditional upon the expiry of time-based vesting conditions or performance-based vesting conditions or a combination of the two.  Once the share units vest, the participant is entitled to receive the equivalent number of underlying common shares; the Company issues new shares in satisfying its obligations under the plan.  

A summary of the status of the plan as of September 30, 2019 is as follows:

	Time based share units			Performance based share units
Outstanding, December 31, 2018		1,045,250			1,500,000
Issued		1,137,500			—
Exercised		(150,250	)		—
Forfeited		(115,000	)		(550,000	)
Expired		—			—
Outstanding, September 30, 2019		1,917,500			950,000
Vested		—			—
Expected to vest		1,917,500			550,000

During the nine months ended September 30, 2019, 150,250 time-based share units vested.  Additionally, the Company granted 1,137,500 time-based share units.  The weighted average fair value per unit for the time-based units was $2.70 per unit.  The fair value per unit was based on the market value of the underlying shares at the date of issuance.

During the nine months ended September 30, 2018, 197,750 time-based share units vested. The Company also issued 171,500 time-based share units and 150,000 performance-based share units.  The weighted average fair value per unit for the time-based units was $3.10 per unit and the weighted average fair value for the performance-based share units granted in the period was $2.78 per unit.  The fair value per unit was based on the market value of the underlying shares at the date of issuance.

During the three and nine months ended September 30, 2019, the Company recognized $624,366 (2018 – $744,532) and $124,595 (2018 - $2,200,964), respectively, in compensation expense in relation to share units.

(d) Stock-option plan:

During the nine months ended September 30, 2019, 840,000 stock options were exercised.  Additionally, the Company granted 500,000 options in the nine months ended September 30, 2019.  The stock options vest evenly over 4 years.  At the time of grant, the fair value of the options was $1.43 per option.  The fair value per unit was derived using the Black-Scholes method of valuation with the key inputs in the model being a risk free rate of 1.61% and volatility of 63.05%.

During the three and nine months ended September 30, 2019, the Company recognized $82,113 (2018 - $nil) and $155,753 (2018 - $nil), respectively, in compensation expense in relation to options.

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11. Share capital (continued):

(e) Normal Course Issuer Bid:

During the three months ended September 30, 2019, the Company repurchased 384,549 (2018 – 183,300) of its shares under its Normal Course Issuer Bid for a total cost, including transaction fees, of $1,112,097 (CAD$1,466,297) (2018 - $565,831 (CAD$743,965)).

In the nine months ended September 30, 2019, the Company repurchased 1,357,979 (2018 – 579,900) of its shares for a total cost, including transaction fees, of $3,992,728 (CAD$5,306,896) (2018 - $1,608,348 (CAD$2,070,503)).  As at September 30, 2019, 1,338,979 of these shares had been cancelled with the remaining 19,000 shares cancelled on October 4, 2019.

(f) Earnings (loss) pershare:

The calculation of basic earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

	For the three months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	982,368		71,831,356	$	0.014	$	266,831		71,831,356	$	0.004
Share options				422,043						1,153,177
Share units				545,743						484,840
Diluted	$	982,368		72,799,142	$	0.013	$	266,831		73,469,373	$	0.004

	For the nine months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	2,552,084		71,845,812	$	0.036	$	2,968,777		71,831,356	$	0.041
Share options				742,909						1,119,336
Share units				434,423						354,708
Diluted	$	2,552,084		73,023,144	$	0.035	$	2,968,777		73,305,400	$	0.040

For the three months ended September 30, 2019, 590,144 options (2018– 191,510) and 1,935,399 share units (2018 – 2,045,074) were excluded from the diluted weighted average number of common shares calculation.

For the nine months ended September 30, 2019, 475,560 options (2018– 225,351) and 1,936,849 share units (2018 – 2,129,239) were excluded from the diluted weighted average number of common shares calculation.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.  The treasury method is used to determine the calculation of dilutive shares.

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12. Net finance expense

Recognized in earnings in the three and nine months ended September 30:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Finance expense:
Interest and accretion expense on borrowings	$	848,369	$	851,110		2,556,527		2,291,864
Accretion expense on earn-out obligation and deferred    consideration		10,145		35,549		123,305		123,411
Amortization of deferred financing fees		65,091		65,091		195,273		195,272
Net change in fair value of financial liabilities at fair value    through earnings (note 13)		181,805		673,125		2,771,238		236,275
Other		20,000		—		50,000		—
Total finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822
Net finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822

13. Financial instruments:

The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, trade and other payables, employee benefit obligations, short term advances, loans and loans to equity investments, notes payable and bank indebtedness, deferred consideration and the Company’s earn-out obligation.  The fair values of these financial instruments, except the notes payable balances, the deferred consideration and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation is recorded at fair value.  The fair value of the notes payable and bank indebtedness, which is comprised of the Scotia Facility, approximates carrying value as it is a floating rate instrument.  The Company’s deferred consideration was initially measured at fair value and is being accreted to its face value over a period of four years from the acquisition date.  The amounts payable as deferred compensation are specified in the acquisition agreement for Austin Gastroenterology Anesthesia Associates LLC, which was acquired in 2016.

An established fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement.  There are three levels of inputs that may be used to measure fair value:

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Liabilities	September 30, 2019		Level 1		Level 2		Level 3
Earn-out obligation	$	973,094	$	—	$	—	$	973,094
Total	$	973,094	$	—	$	—	$	973,094

Liabilities	December 31, 2018		Level 1		Level 2		Level 3
Earn-out obligation	$	2,920,583	$	—	$	—	$	2,920,583
Total	$	2,920,583	$	—	$	—	$	2,920,583

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13. Financial instruments (continued):

The Company’s earn-out obligation is measured at fair value on a recurring basis using significant unobservable inputs (Level 3).  The earn-out obligation relates to the Company’s Gastroenterology Anesthesia Associates LLC acquisition, which was acquired in 2014.  As part of the business combination, the Company is required to pay consideration contingent on the post-acquisition earnings of the acquired asset.  In the nine months ended September 30, 2019, the Company paid $4,795,822 as partial payment of the amount owing under its earn-out obligation; the Company expects to pay the remaining obligation of $973,094 within one year.  The Company measures the fair value of the earn-out obligation based on its best estimate of the cash outflows payable in respect of the earn-out obligation.  This valuation technique includes inputs relating to estimated cash outflows under the arrangement and the use of a discount rate appropriate to the Company.  The Company evaluates the inputs into the valuation technique at each reporting period.  During the nine months ended September 30, 2019, the Company revised its estimate underlying the remaining amount to be paid under the earn-out obligation. The amendment of the cash outflow estimates underlying the earn-out resulted in an increaseof $2,771,238 for the nine months ended September 30, 2019 to the fair value of the earn-out obligation.  The impact of this adjustment was recorded through finance expense in the period.

During the three months ended September 30, 2019, the Company recorded accretion expense of $nil (2018 - $15,938), in relation to this liability, reflecting the change in fair value of the liabilities that is attributable to credit risk. During the nine months ended September 30, 2019, the Company recorded accretion expense of $77,095 (2018 - $49,978).

Reconciliation of level 3 fair values:

	Earn-out obligation
Balance as at January 1, 2019	$	2,920,583
Payment		(4,795,822	)
Recorded in finance expense:
Accretion expense		77,095
Fair value adjustment		2,771,238
Balance as at September 30, 2019	$	973,094

14. Commitments and contingencies:

The Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters.  These obligations include, but are not limited to, contracts entered into with physicians where the Company agrees, under certain circumstances, to indemnify a third party against losses arising from matters including but not limited to medical malpractice and product liability.  The impact of any such future claims, if made, on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to final outcome of these potential claims.

15. Related party transactions:

Balances and transactions between the Company and its wholly owned and controlled subsidiaries have been eliminated on consolidation and are not disclosed in this note.  Details of the transactions between the Company and other related parties are disclosed below:

(a) Related party transactions:

During the three and nine months ended September 30, 2019, the Company made product sales totaling $14,095 and $28,095, respectively (2018 - $7,285 and $22,685, respectively) to one company owned or controlled by one of the Company’s Directors.  The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties.  The amount owed by this related party as of September 30, 2019 was $7,000 (2018 - $nil).

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16. Segmented information:

The Company operates in two industry segments: the sale of medical products and the provision of anesthesia services.  The revenues relating to geographic segments based on customer location, in United States dollars, for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Canada and other	$	51,489	$	56,065	$	175,747	$	167,253
United States		30,363,314		28,675,528		89,840,305		80,560,359
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

The Company’s revenues are disaggregated below into categories which differ in terms of the economic factors which impact the amount, timing and uncertainty of revenue and cash flows.

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Commercial Insurers	$	22,801,819	$	22,077,401	$	67,830,007	$	61,492,066
Federal Insurers		5,040,136		3,948,549		14,408,155		10,866,851
Physicians		2,448,174		2,658,131		7,330,147		7,868,907
Other		124,674		47,512		447,743		499,788
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

The Company’s property and equipment, intangibles, other assets and total assets are located in the following geographic regions as at September 30, 2019 and December 31, 2018:

	2019		2018
Property and equipment:
Canada	$	230,734	$	276,621
United States	$	36,006		26,670
Total	$	266,740	$	303,291
Intangible assets:
Canada	$	31,226	$	32,735
United States	$	157,775,130		179,351,528
Total	$	157,806,356	$	179,384,263
Total assets:
Canada	$	2,988,156	$	9,293,796
United States	$	193,445,013		209,694,200
Total	$	196,433,169	$	218,987,996

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the three and nine months ended September 30, 2019 and 2018.  The Company does not allocate expenses related to corporate activities.  These expenses are presented within “Other” to allow for reconciliation to reported measures.

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	27,966,629	$	2,448,174	$	—		$	30,414,803
Operating costs		23,774,049		1,089,316		1,838,812			26,702,177
Operating income (loss)	$	4,192,580	$	1,358,858	$	(1,838,812	)	$	3,712,626

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16. Segmented information (continued):

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	26,073,462	$	2,658,131	$	—		$	28,731,593
Operating costs		21,405,928		1,181,976		1,644,356			24,232,260
Operating income (loss)	$	4,667,534	$	1,476,155	$	(1,644,356	)	$	4,499,333

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	82,685,905	$	7,330,147	$	—		$	90,016,052
Operating costs		69,804,891		3,441,207		4,645,347			77,891,445
Operating income (loss)	$	12,881,014	$	3,888,940	$	(4,645,347	)	$	12,124,607

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	72,858,705	$	7,868,907	$	—		$	80,727,612
Operating costs		59,105,405		3,757,518		4,497,757			67,360,680
Operating income (loss)	$	13,753,300	$	4,111,389	$	(4,497,757	)	$	13,366,932

Additionally, the company incurs the following in each of its operating segments:

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	191,950	$	—	$	933,460	$	1,125,410
Depreciation and amortization expense	$	8,530,610	$	5,383	$	19,916	$	8,555,909

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	708,674	$	—	$	916,201	$	1,624,875
Depreciation and amortization expense	$	8,185,957	$	17,055	$	5,748	$	8,208,760

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	2,894,543	$	—	$	2,801,800	$	5,696,343
Depreciation and amortization expense	$	25,899,621	$	19,936	$	54,726	$	25,974,283

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	359,686	$	—	$	2,487,136	$	2,846,822
Depreciation and amortization expense	$	23,079,832	$	51,088	$	17,060	$	23,147,980

17. Subsequent event:

On October 22, 2019, the Company entered into a new, three year revolving credit line which provides up to $200 million in borrowing capacity and represents an increase from the Company’s previous $100 million facility.  The new facility includes a committed $125 million facility and access to an accordion feature that increases the amount of the credit available to the Company by $75 million.  Interest on the facility is calculated with reference to LIBOR plus 1.25% to 1.75%, dependent on the Company’s Debt to EBITDA ratio.  The facility is secured by the assets of the Company and matures on October 22, 2022.   The Company will be required to maintain a Debt to EBITDA ratio covenant of 3.0:1.0 and a Fixed Coverage ratio covenant of 3.0:1.0 under the terms of the facility.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the attached financial statements and notes thereto included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as our audited financial statements and related notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2018 included in our Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission on March 13, 2019 and with the securities commissions in all provinces and territories of Canada on March 13, 2019. This Quarterly Report on Form 10-Q, including the following sections, contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results and events to differ materially from those expressed or implied by such forward-looking statements. As a result of many factors, including without limitation those set forth under “Risk Factors” under Item 1A of Part II below, and elsewhere in this Quarterly Report on Form 10-Q, our actual results may differ materially from those anticipated in these forward-looking statements. We caution the reader not to place undue reliance on these forward-looking statements, which reflect management’s analysis only as of the date of this Quarterly Report on Form 10-Q. We undertake no obligation to update forward-looking statements which reflect events or circumstances occurring after the date of this Quarterly Report on Form 10-Q. Throughout this discussion, unless the context specifies or implies otherwise, the terms “CRH,” “we,” “us,” and “our” refer to CRH Medical Corporation and its subsidiaries.

Overview

CRH is a North American company focused on providing gastroenterologists (“GIs”) with innovative services and products for the treatment of gastrointestinal (“GI”) diseases. In 2014, CRH acquired a full service gastroenterology anesthesia company, Gastroenterology Anesthesia Associates LLC (“GAA”), which provides anesthesia services for patients undergoing endoscopic procedures. CRH has complemented this transaction with twenty-two additional acquisitions of GI anesthesia companies since GAA.

According to the Centers for Disease Control and Prevention (“CDC”), colorectal cancer is the second leading cause of cancer-related deaths in the United States and recent research indicates that the incidence of colon cancer in young adults is on the rise. The CDC has implemented campaigns to raise awareness of GI health and drive colorectal cancer screening rates among at risk populations. Colon cancer is treatable if detected early and screening colonoscopies are the most effective way to detect colon cancer in its early stages. Anesthesia-assisted endoscopies are the standard of care for colonoscopies and upper endoscopies.

CRH’s goal is to establish itself as the premier provider of innovative products and essential services to GIs throughout the United States. The Company’s CRH O’Regan System distribution strategy focuses on physician education, patient outcomes, and patient awareness. The O’Regan System is a single use, disposable, hemorrhoid banding technology that is safe and highly effective in treating hemorrhoid grades I – IV. CRH distributes the CRH O’Regan System, treatment protocols, operational and marketing expertise as a complete, turnkey package directly to physicians, allowing CRH to create meaningful relationships with the physicians it serves.

The Company has financed its cash requirements primarily from revenues generated from the sale of its product directly to physicians, GI anesthesia revenue, equity financings, debt financing and revolving and term credit facilities. The Company’s ability to maintain the carrying value of its assets is dependent on successfully marketing its products and services, obtaining reasonable rates for anesthesia services and maintaining future profitable operations, the outcome of which cannot be predicted at this time. The Company has also stated its intention to acquire or develop additional GI anesthesia businesses. In the future, it may be necessary for the Company to raise additional funds for the continuing development of its business plan, including additional acquisitions.

Recent Events

Anesthesia Care Associates LLC (“ACA”) – January 2019

On January 1, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to acquire a 100% interest in Anesthesia Care Associates, LLC (”ACA”), a gastroenterology anesthesia services provider in Indiana.  The purchase consideration, paid via cash, for the acquisition of the Company’s 100% interest was $5,239,003.  The allocated cost of the exclusive professional service agreement which was acquired as part of this acquisition was $5,355,028.

Arapahoe Gastroenterology Anesthesia Associates LLC (“Arapahoe”) – April 2019

On April 3, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Arapahoe Gastroenterology Anesthesia Associates LLC not held by the Company.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $2,300,000 plus 49% of Arapahoe’s working capital as at March 31, 2019.  Additionally, the Company also incurred deferred acquisition costs of $26,086.

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Appointment of New CEO – April 2019

On April 9, 2019, the Company announced the appointment of Dr. Tushar Ramani as CEO of the Company, replacing outgoing CEO Edward Wright.  Dr. Ramani, a 30-year veteran of the anesthesia industry, has also joined the Company’s board as a director.  Dr. Ramani brings with him extensive experience in both managing and providing healthcare services, growing companies and creating shareholder value.  

South Metro Anesthesia Associates LLC (“SMAA”) – May 2019

On May 16, 2019, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire a 55% interest in South Metro Anesthesia Associates LLC (“SMAA”), a gastroenterology anesthesia services provider in Georgia.  The purchase consideration, paid via cash, for the acquisition of the Company’s 55% interest was $1,752,465.  The allocated cost of the exclusive professional service agreement which was acquired as part of this acquisition was $3,257,147.

Crystal River Anesthesia Associates LLC (“CRAA”) – July 2019

On July 22, 2019, a subsidiary of the Company entered into an asset contribution and exchange agreement to acquire a 51% interest in Crystal River Anesthesia Associates LLC (“CRAA”), a gastroenterology anesthesia services provider in Florida.  The purchase consideration, paid via cash, for the acquisition of the Company’s 51% interest was $2,130,000.  The provisional allocated cost of the exclusive professional service agreement which was acquired as part of this acquisition is $4,262,751.

Central Colorado Anesthesia Associates LLC (“CCAA”) – August 2019

On August 31, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Central Colorado Anesthesia Associates LLC not held by the Company.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $7,000,000 plus 49% of CCAA’s working capital as at August 31, 2019.  Additionally, the Company also incurred deferred acquisition costs of $18,658.

J.P. Morgan Facility – October 2019

On October 22, 2019, the Company entered into a new, three year revolving credit line which provides up to $200 million in borrowing capacity and represents an increase from the Company’s previous $100 million facility.  The new facility includes a committed $125 million facility and access to an accordion feature that increases the amount of the credit available to the Company by $75 million.  Interest on the facility is calculated with reference to LIBOR plus 1.25% to 1.75%, dependent on the Company’s Debt to EBITDA ratio.

The lending syndicate for the new facility is led by JPMorgan Chase Bank, N.A. (“J.P. Morgan”) and also includes the Bank of Nova Scotia, U.S. Bank and Wells Fargo.

Critical Accounting Policies and Estimates

There are no changes to our critical accounting policies and estimates from those disclosed in our annual MD&A contained in our Annual Report Form 10-K for the year ended December 31, 2018, except as noted below:

Equity Method Investment

The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by us as of the specified effective date. Unless otherwise discussed, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

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Please refer to Note 3 to our condensed consolidated interim financial statements included in Part I, Item 1, "Financial Statements" of this Quarterly Report on Form 10-Q for a description of recent accounting pronouncements applicable to our business.  Of note, we have adopted ASU 2016-02 and ASU 2017-13, collectively the new leasing standard under US GAAP.  This standard requires lessees to recognize most leases on the balance sheet.  The Company adopted the standard using the modified retrospective method effective January 1, 2019 with nearly all operating classified leases classified as operating leases under this new standard with a right-of-use asset and a corresponding obligation recognized on the balance sheet at the adoption date.

Results of Operations

The following tables provide a detailed analysis of our results of operations and financial condition. For each of the periods indicated below, we present our revenues by business segment, as well as present key metrics, such as operating expenses, operating income and net and comprehensive income attributable to shareholders of the company and non-controlling interest, from our statements of operations.

The selected financial information provided below has been prepared in accordance with United States Generally Accepted Accounting Principles (“US GAAP”) beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report.  The Company converted to US GAAP upon no longer meeting the definition of a foreign private issuer on June 30, 2018.

The conversion from IFRS to US GAAP resulted in adjustments to the Company’s balance sheet and statement of operations for the year ended December 31, 2017 as well as adjustments to the company’s interim balance sheets and statements of operations for the quarters ended March 31, 2018, June 30, 2018 and September 30, 2018.  All financial data contained within this document has been restated and presented in accordance with US GAAP.  A summary of the impact of conversion from IFRS to US GAAP on the Company’s statement for the three and nine months ended September 30, 2018 is presented below:

	Three months ended September 30, 2018
	As previously reported (IFRS)		Adjustments			Restated (US GAAP)
Net and comprehensive income	$	2,491,875	$	(7,459	)	$	2,484,416
Attributable to:
Shareholders of the Company		263,706		3,125			266,831
Non-controlling interest	$	2,228,169	$	(10,584	)		2,217,585

	Nine months ended September 30, 2018
	As previously reported (IFRS)		Adjustments			Restated (US GAAP)
Net and comprehensive income	$	8,918,806	$	(51,140	)	$	8,867,666
Attributable to:
Shareholders of the Company		2,993,413		(24,636	)		2,968,777
Non-controlling interest	$	5,925,392	$	(26,503	)	$	5,898,889

The primary driver of the IFRS to US GAAP adjustments was additional amortization relating to the capitalization of acquisition costs on the Company’s acquisitions completed during the years ended December 31, 2018 and 2017 offset by an incremental decrease in stock based compensation expense related to the Company’s performance based share units, and related tax impact. The conversion from IFRS to US GAAP had no impact on the Company’s Adjusted Operating EBITDA¹.

¹See "Use of Non-GAAP Financial Measures" below for a reconciliation of GAAP-based measures to Non-GAAP-based measures.

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SELECTED US GAAP FINANCIAL INFORMATION

	Three months ended September 30,							Nine months ended September 30,
	2019			2018			% Change	2019			2018			% Change
Anesthesia services revenue	$	27,966,629		$	26,073,462		7%	$	82,685,905		$	72,858,705		13%
Product sales revenue	$	2,448,174		$	2,658,131		(8)%	$	7,330,147		$	7,868,907		(7)%
Total revenue		30,414,803			28,731,593		6%		90,016,052			80,727,612		12%
Total operating expenses, including:		26,702,177			24,232,260		10%		77,891,445			67,360,680		16%
Depreciation and amortization expense		8,555,909			8,208,760		4%		25,974,283			23,147,980		12%
Stock based compensation expense		706,479			744,532		(5)%		280,348			2,200,964		(87)%
Operating income		3,712,626			4,499,333		(17)%		12,124,607			13,366,932		(9)%
Operating margin		12.2	%		15.7	%	(22)%		13.5	%		16.6	%	(19)%
Income from equity investment		(77,278	)		—		NA		(416,584	)		—		NA
Net finance expense		1,125,410			1,624,875		(31)%		5,696,343			2,846,822		100%
Tax expense		565,165			390,042		45%		736,052			1,652,444		(55)%
Net and comprehensive income	$	2,099,329		$	2,484,416		(16)%	$	6,108,796		$	8,867,666		(31)%
Attributable to:
Shareholders of the Company	$	982,368		$	266,831		268%	$	2,552,084		$	2,968,777		(14)%
Non-controlling interest2	$	1,116,961		$	2,217,585		(50)%	$	3,556,712		$	5,898,889		(40)%
Net cash provided by operating activities	$	10,711,163		$	11,912,199		(10)%	$	32,669,879		$	29,848,485		9%
Distributions to non-controlling interest		(3,615,819	)		(4,149,200	)	(13)%		(11,804,480	)		(14,618,460	)	(19)%
Net cash provided by operating activities    less distributions to non-controlling interest	$	7,095,344		$	7,762,999		(9)%	$	20,865,399		$	15,230,025		37%
Earnings per share attributable to shareholders:
Basic	$	0.014		$	0.004			$	0.036		$	0.041
Diluted	$	0.013		$	0.004			$	0.035		$	0.040

NON-GAAP FINANCIAL MEASURES

In addition to results reported in accordance with US GAAP, the Company uses certain non-GAAP financial measures as supplemental indicators of its financial and operating performance as we believe these non-GAAP measures will be useful to investors as this presentation is in line with how our management assesses our Company’s performance. These non-GAAP financial measures include Adjusted operating EBITDA, Adjusted operating EBITDA margin and Adjusted operating expenses. The Company believes these supplementary financial measures reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business.

SELECTED FINANCIAL INFORMATION – NON-GAAP MEASURES¹

	Three months ended September 30,							Nine months ended September 30,
	2019			2018			% Change	2019			2018			% Change
Total Adjusted operating expenses	$	17,356,762		$	15,219,988		14%	$	50,582,441		$	41,909,208		21%
Adjusted operating EBITDA – non - controlling    interest2		3,666,296			4,996,303		(27)%		11,615,128			13,642,318		(15)%
Adjusted operating EBITDA - shareholders of    the Company		9,391,746			8,515,302		10%		27,818,484			25,176,086		10%
Adjusted operating EBITDA - total	$	13,058,041		$	13,511,605		(3)%	$	39,433,612		$	38,818,404		2%
Adjusted operating EBITDA margin		42.9	%		47.0	%			43.8	%		48.1	%

¹See "Use of Non-GAAP Financial Measures" below for a reconciliation of GAAP-based measures to Non-GAAP-based measures.

²Non-controlling interest reflects the ownership interest of persons holding non-controlling interests in non-wholly owned subsidiaries of the Company.

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Results of Operations for the three and nine months ended September 30, 2019 and 2018

Revenues for the three months ended September 30, 2019 were $30,414,803 compared to $28,731,593 for the three months ended September 30, 2018. The 6% increase is mainly attributable to revenue contributions from the anesthesia businesses acquired by the Company in 2019, along with acquisitions completed mid-year in fiscal 2018, offset by a decrease in revenues in the product business. Revenues for the nine months ended September 30, 2019 were $90,016,052 compared to $80,727,612 for the nine months ended September 30, 2018.

Revenues from anesthesia services for the three months ended September 30, 2019 were $27,966,629 compared to $26,073,462 for the three months ended September 30, 2018. The increase was primarily due to the Company’s anesthesia acquisitions throughout 2019 and 2018; however, there were additional factors which impacted the change in revenue between Q3 2019 and Q3 2018. The $1.9 million increase in revenue from the prior period is reflective of the following:

• growth through acquisitions completed in 2019 and 2018 contributed $3.1 million of the increase when comparing the two periods.  This is comprised of growth from acquisitions completed in 2018 ($1.7 million) and growth from acquisitions completed in 2019 ($1.5 million);  

• organic case growth in our entities acquired prior to October 2018 of approximately $1.7 million;

• executing contracts with non-contracted payors and changes in payor mix, primarily related to entities acquired prior to 2018, decreased 2019 revenue by approximately $2.3 million when compared to 2018; and

• the Company incurred a negative adjustment as a result of a change in estimate of approximately $0.7 million.  

Revenues from anesthesia services for the nine months ended September 30, 2019 were $82,685,905 compared to $72,858,705 for the nine months ended September 30, 2018.  The $9.8 million increase in revenue from the prior period is reflective of the following:

• growth through acquisitions completed in 2019 and 2018 contributed $13.9 million of the increase when comparing the two periods.  This is comprised of growth from acquisitions completed in 2018 ($11.0 million) and growth from acquisitions completed in 2019 ($2.9 million);  

• organic case growth in our entities acquired prior to 2018 of approximately $3.5 million;

• executing contracts with non-contracted payors and changes in payor mix, primarily related to entities acquired prior to 2018, decreased 2019 revenue by approximately $6.3 million when compared to 2018; and

• the Company incurred a negative adjustment as a result of a change in estimate of approximately $1.3 million.

As adjusted operating expenses¹ are largely fixed in nature, changes in revenue primarily drive changes in operating income and adjusted operating EBITDA¹.

In the quarter ended September 30, 2019, the anesthesia services segment serviced 88,733 patient cases compared to 71,800 patient cases during the quarter ended September 30, 2018.  In the nine months ended September 30, 2019, the anesthesia services segment services 250,890 patient cases compared to 195,843 patient cases during the nine months ended September 30, 2018. Patient cases exclude any patient cases at the Company’s equity held investment, TSA.

The tables below summarize our payor mix as a percentage of all patient cases for the three and nine months ended September 30, 2019 and 2018.

	Three months ended									Nine months ended
Payor	September 30, 2019			September 30, 2018			Change			September 30, 2019			September 30, 2018			Change
Commercial		57.8	%		58.6	%		-1.4	%		57.8	%		57.9	%		-0.2	%
Federal		42.2	%		41.4	%		2.0	%		42.2	%		42.1	%		0.2	%
Total		100.0	%		100.0	%					100.0	%		100.0	%

¹See "Use of Non-GAAP Financial Measures" below for a reconciliation of GAAP-based measures to Non-GAAP-based measures.

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The payor mix for the three and ninemonths ended September 30, 2019 includes acquisitions completed during 2018 and 2019 and as a result is not directly comparable to the three and ninemonths ended September 30, 2018. As we acquire anesthesia providers, these providers may have different payor mix profiles and impact our overall payor mix above.

The table below summarizes our approximate payor mix as a percentage of all patient cases for the three and nine months ended September 30, 2019 and 2018, but exclude patient cases related to acquisitions completed in 2019 and 2018 as inclusion of these acquisitions would reduce comparability of the data presented.

	Three months ended									Nine months ended
Payor	September 30, 2019			September 30, 2018			Change			September 30, 2019			September 30, 2018			Change
Commercial		60.4	%		59.3	%		1.7	%		59.8	%		58.4	%		2.3	%
Federal		39.6	%		40.7	%		-2.6	%		40.2	%		41.6	%		-3.3	%
Total		100.0	%		100.0	%					100.0	%		100.0	%

Seasonality is driven by both patient cases and seasonal payor mix. As a result, revenue per patient will fluctuate quarterly. The seasonality of patient cases for fiscal 2018 is provided below for patient cases; it excludes patient cases relating to acquisitions completed in 2018 and is representative of expectations for seasonality mix in 2019.

Seasonality	Q1 2018			Q2 2018			Q3 2018			Q4 2018
Patient cases		23.8	%		25.2	%		24.7	%		26.3	%

Revenues from product sales for the three months ended September 30, 2019 were $2,448,174 compared to $2,658,131 for the comparable period in 2018. Revenues from product sales for the nine months ended September 30, 2019 were $7,330,147 compared to $7,868,907 for the comparable period in 2018.  The decrease in product sales is the result of decreased sales of the CRH O’Regan System at previously trained practices due to changes in practice emphasis and to a lesser extent the introduction of competitive products.  At the end of 2018, we had initiated additional practice support initiatives, including a greater emphasis on re-training physicians in practices where usage has decreased.  We continue to engage in re-training initiatives where usage has decreased.  As of September 30, 2019, the Company has trained 3,099 physicians to use the O’Regan System, representing 1,177 clinical practices. This compares to 2,869 physicians trained, representing 1,099 clinical practices, as of September 30, 2018.

Total operating expenses

Total operating expense for the three months ended September 30, 2019 was $26,702,177 compared to $24,232,260 for the three months ended September 30, 2018. Total operating expense for the nine months ended September 30, 2019 were $77,891,445 compared to $67,360,680 for the nine months ended September 30, 2018.  The increase in operating expenses is largely driven by increases seen in total adjusted operating expense (refer to the “Total adjusted operating expenses – Non-GAAP section below), offset by decreases seen in amortization expense and stock-based compensation expense.

Amortization expense for the three months ended September 30, 2019 increased by 4.0% from 2018.  This is a result of incremental amortization expense related to asset acquisitions completed in the last half of 2018 and throughout 2019 and the related intangible assets that were acquired, offset by a small adjustment related to LWA.  Amortization expense for the nine months ended September 30, 2019 increased by 12% from the comparable period in 2018 for the same reasons.

Stock-based compensation expense for the three months ended September 30, 2019 decreased by 5% when compared to 2018.  This decrease is a result of a change in mix in the composition of awards held by the Company in the period.

Total adjusted operating expenses – Non-GAAP¹

For the three months ended September 30, 2019, total adjusted operating expenses were $17,356,762 compared to $15,219,988 for the three months ended September 30, 2018. For the nine months ended September 30, 2019, total adjusted operating expenses were $50,582,441 compared to $41,909,208 for the nine months ended September 30, 2018.  Increases in adjusted operating expenses are primarily related to adjusted operating expenses in the anesthesia services business.

¹See "Use of Non-GAAP Financial Measures" below for a reconciliation of GAAP-based measures to Non-GAAP-based measures.

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Anesthesia services adjusted operating expenses for the three months ended September 30, 2019 were $15,035,726, compared to $13,046,659for the three months ended September 30, 2018. Anesthesia services adjusted operating expenses for the nine months ended September 30, 2019 were $43,423,209, compared to $35,565,127 for the comparable period in 2018.  Anesthesia services adjusted operating expenses primarily include labor related costs for Certified Registered Nurse Anesthetists and MD anesthesiologists, billing and management related expenses, medical drugs and supplies, and other related expenses. The Company’s first anesthesia acquisition was in the fourth quarter of 2014, with twenty-one further acquisitions completed in 2015, 2016, 2017, 2018 and the first three quarters of 2019. As a result, the firstthree quarters of 2019 are not directly comparable to the comparable quarters of 2018, with the majority of the increase relating to operating expenses for acquired companies. Though revenue may fluctuate, adjusted operating expenses, which are primarily employee related costs, due to their fixed nature, primarily increase as a result of the Company’s acquisition strategy.  

Total adjusted operating expenses per case¹ for the anesthesia segment were $169 per case for the three months ended September 30, 2019.  This rate per case is lower than the rate per case of $182 seen in the three months ended September 30, 2018. The decrease in expense per case is reflective of the leverage of our existing infrastructure as well as the cost profile of acquisitions completed in 2018 and 2019.  Total adjusted operating expenses per case for the anesthesia segment for the nine months ended September 30, 2019 were $173 per case compared to $182.

Product sales adjusted operating expenses for the three months ended September 30, 2019 were $1,002,070 compared to $1,064,824 for the three months ended September 30, 2018. Product sales adjusted operating expenses for the nine months ended September 30, 2019 were $3,185,768 compared to $3,428,884 for the nine months ended September 30, 2018.  In general, costs have decreased when compared to 2018 due to decreased spend on conferences as a result of a shift to more cost effective marketing initiatives as well as the introduction of a new, more cost effective, warehousing group.  

Corporate adjusted operating expenses for the three months ended September 30, 2019 were $1,318,966 compared to $1,108,505 for the three months ended September 30, 2018. Corporate adjusted operating expense for the nine months ended September 30, 2019 were $3,973,464 compared to $2,915,197 for the comparable period in 2018.  The increase in corporate adjusted operating expense is a reflection of higher professional fees and employee related costs, and, in general, is reflective of the increasing complexity of our business which is also increasing our compliance costs. Non-recurring costs related to the departure and replacement of the Company’s CEO have been excluded from corporate adjusted operating expenses in the nine months ended September 30, 2019; these costs of approximately $930,000 are non-recurring and thus are not reflective of future expected operating costs.

Operating Income

Operating income for the three months ended September 30, 2019 was $3,712,626 compared to $4,499,333 for the same period in 2018.  Operating income for the nine months ended September 30, 2019 was $12,124,607 compared to $13,366,932.  The following schedule reconciles the changes in operating income between periods:

	Three months ended September 30, 2019			Nine months ended September 30, 2019
Operating income – comparable period 2018	$	4,499,333		$	13,366,932
Increase in period revenues		1,683,210			9,288,441
Increase in period adjusted operating expenses1		(2,136,774	)		(8,673,233	)
Increase in period amortization and depreciation expense		(347,151	)		(2,826,303	)
Decrease in period stock based compensation expense		38,052			1,920,612
Increase in period other non-recurring expenses		—			(930,918	)
Increase in period acquisition expenses		(24,044	)		(20,924	)
Operating income - 2019	$	3,712,626		$	12,124,607

Changes in the company’s revenues and adjusted operating expenses¹ are described above within their respective sections. Fluctuations in revenue will not necessarily result in correlating fluctuations in operating expenses due to the fixed nature of these costs and as such will impact operating income.

Contributing to the decrease in operating income for the three months are incremental costs relating to acquired professional services agreements in 2018 and 2019, offset by slight decreases seen in stock-based compensation and acquisition expenses.  For the nine months ended September 30, 2019, incremental amortization costs of $2,826,303 offset by a reduction in stock based compensation expense of $1,920,616 contributed.  Additionally, the Company incurred incremental costs of $930,918 associated with the replacement of the Company’s CEO in the second quarter of 2019.

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Anesthesia operating income for the three months ended September 30, 2019 was $4,192,580, a decrease of $474,954 from the same period in 2018. Anesthesia operating income for the nine months ended September 30, 2019 was $12,881,014, a decrease of $872,286 from the comparable period in 2018.Thedecrease in the quarter is primarily reflective of the decrease in adjusted operating EBITDA¹ in the quarter (calculated above as revenues less adjusted operating expenses).

Product operating income for the three months ended September 30, 2019 was $1,358,858, a decrease of $117,297 from the same period in 2018. Product operating income for the nine months ended September 30, 2019 was $3,888,940, a decrease of $222,449 from the same period in 2018.  The decrease is primarily driven by the decline in revenues in the quarter, offset by the slight decrease in adjusted operating expenses¹.

Adjusted operating EBITDA¹ – Non-GAAP

Adjusted operating EBITDA attributable to shareholders of the Company for the three months ended September 30, 2019 was $9,391,746, an increase of $876,444 when compared to the three months ended September 30, 2018. Adjusted operating EBITDA attributable to shareholders of the Company for the nine months ended September 30, 2019 was $27,818,484, an increase of $2,642,398 when compared to the nine months ended September 30, 2018.  The increase in adjusted operating EBITDA attributable to shareholders is primarily a reflection of the contributions from acquisitions completed in 2018 and 2019, offset by revenue rate changes from the impact of moving from non-contracted to a contracted status for commercial payors.  Adjusted operating EBITDA is also favorably impacted by the decrease in adjusted anesthesia operating expense per case.

Adjusted operating EBITDA attributable to non-controlling interest was $3,666,296 for the three months ended September 30, 2019, compared to $4,996,303 for the three months ended September 30, 2018. This comprises the non-controlling interests’ share of revenues of $7,270,706 and adjusted operating expenses of $3,604,410. Adjusted operating EBITDA attributable to non-controlling interest was $11,615,128 for the nine months ended September 30, 2019, compared to $13,642,318 for the comparable period in 2018.  This comprises the non-controlling interests’ share of revenues of $22,515,849 and adjusted operating expenses of $10,900,721.  Decreases in non-controlling interest is a result of revenue declines in our joint venture entities from executing contracts with non-contracted payors.  Additionally, the Company acquired the non-controlling 49% in Arapahoe and as of April 2, 2019, its financial results are included 100% in adjusted operating EBITDA attributable to shareholders.  Similarly, the non-controlling 49% interest in CCAA was acquired on August 31, 2019.

Total adjusted operating EBITDA was $13,058,041 for the three months ended September 30, 2019, a decrease of 3% from the same period in 2018. Total adjusted operating EBITDA was $39,433,612 for the nine months ended September 30, 2019, representing an increase of 2% from the same period in 2018.

Net finance (income) / expense

As a result of the Company’s debt facilities and long-term finance obligations, including its earn-out obligation, the Company has recorded a net finance expense of $1,125,410 for the three months ended September 30, 2019, compared to net finance expense of $1,624,875 for the three months ended September 30, 2018. Finance expense was $5,696,343 for the nine months ended September 30, 2019, compared to net finance expense of $2,846,822 for the same period in 2018. Net finance expense is comprised of both interest and other debt related expenses, including fair value adjustments.  Fair value adjustments related to the Company’s earn-out obligation are the primary driver of significant fluctuations in finance expense between comparable periods.

	Three months ended September 30,				Nine months ended September 30,
	2019		2018		2019		2018
Finance expense:
Interest and accretion expense on borrowings	$	848,369	$	851,110	$	2,556,527	$	2,291,864
Accretion expense on earn-out obligation and deferred    consideration		10,145		35,549		123,305		123,411
Amortization of deferred financing fees		65,091		65,091		195,273		195,272
Net change in fair value of financial liabilities at fair value    through earnings		181,805		673,125		2,771,238		236,275
Other		20,000		—		50,000		—
Total finance expense	$	1,125,410	$	1,624,875	$	5,696,343	$	2,846,822
Net finance expense	$	1,125,410	$	1,624,875	$	5,696,343	$	2,846,822

¹See "Use of Non-GAAP Financial Measures" below for definitions and reconciliations of GAAP-based measures to Non-GAAP-based measures.

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During the three months ended September 30, 2019, the Company recognized a fair value adjustment of $181,805 in respect of its earn-out obligation.  During the nine months ended September 30, 2019, the Company recognized a fair value adjustment of $2,771,238 in respect of its earn-out obligation.  The fair value adjustment resulted from changes in estimates underlying the Company’s earn-out obligation. The changes in estimates underlying the Company’s earn-out obligation were driven primarily by the changes in the cash flow estimates, which were driven by both changes in payor mix and revenue rates per unit, and the discount rate utilized.

Cash interest paid in the three months ended September 30, 2019 was $772,680 compared to $600,510 cash interest paid in the comparable period of 2018.  Cash interest paid in the nine months ended September 30, 2019 was $2,532,084 compared to $2,041,263 for the same period in 2018.  The increase in cash interest paid is reflective of the higher LIBOR rates in 2019 as well as average debt levels.  As at September 30, 2019, the Company owed $68,375,000 under the amended Scotia Facility as compared to $70,250,000 million owed at December 31, 2018.   On October 22, 2019, the Company entered into a new credit facility with JP Morgan Chase Bank, N.A. (“J.P. Morgan”).  This new facility reduces the interest rate payable by the Company by as much as 100bps to LIBOR plus 125 bps, up to LIBOR plus 175 bps, dependent upon the Company’s debt to EBITDA ratio.  As a result of the new facility, cash interest paid as a percentage of debt incurred may decrease in coming periods.

Equity income

Equity income is derived from the Company’s 15% equity interest in Triad Sedation Associates LLC (“TSA”).  TSA began operating in February 2019. TSA is the result of an agreement between CRH and Digestive Health Specialists (“DHS”), located in North Carolina, whereby CRH assists DHS in the development and management of a monitored anesthesia care program.  Under the terms of the agreement, CRH is a 15% equity owner in the anesthesia business and receives compensation for its billing and collection services.  Under the terms of the limited liability company agreement, CRH has the right, at CRH’s option, to acquire an additional 36% interest in the anesthesia business at a future date, but no sooner than November 2019.  

Income tax expense

For the three months ended September 30, 2019, the Company recorded an income tax expense of $565,165 compared to income tax expense of $390,042 for the three months ended September 30, 2018. For the nine months ended September 30, 2019, the Company recorded an income tax expense of $736,052 compared to income tax expense of $1,652,444 for the nine months ended September 30, 2018. Income tax expense relates only to income attributable to the Company’s shareholders.  In the year to date period, the Company experienced recoveries related to stock based compensation in Canada which has contributed to the decrease in tax expense when compared to the nine months ended September 30, 2018.

Net and comprehensive income (loss)

For the three months ended September 30, 3019, the Company recorded net and comprehensive income attributable to shareholders of the Company of $982,368 compared to net and comprehensive income attributable to shareholders of $266,831 for the three months ended September 30, 2018. The increase quarter over quarter is largely a reflection of the increase in adjusted operating EBITDA attributable to shareholders, in combination with a decrease in finance expense.  The decrease in net finance expense was driven by the absence of a significant fair value adjustment related to the Company’s earn-out obligation in the quarter; in the three months ended September 30, 2018, the fair value adjustment related to the Company’s earn-out was $673,125. For the nine months ended September 30, 3019, the Company recorded net and comprehensive income attributable to shareholders of the Company of $2,552,084 compared to net and comprehensive income attributable to shareholders of $2,968,777 for the nine months ended September 30, 2018.

Net and comprehensive income attributable to non-controlling interest was $1,116,961 for the three months ended September 30, 2019 and $3,556,712 for the nine months ended September 30, 2019.

Use of Non-GAAP Financial Measures

As discussed above, in addition to results reported in accordance with US GAAP, the Company uses certain non-GAAP financial measures, including adjusted operating expenses (in total and broken down by operating segment), adjusted operating EBITDA (in total and broken down as attributable to non-controlling interest and shareholders of the Company), and adjusted operating EBITDA margin as supplemental indicators of its financial and operating performance. These non-GAAP measures are not recognized measures under US GAAP and do not have a standardized meaning prescribed by U.S. Generally Accepted Accounting Principles (“US GAAP”) and thus the Company’s definition may be different from and unlikely to be comparable to non-GAAP measures presented by other companies. These measures are provided as additional information to complement US GAAP measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analyses of the Company’s financial information reported under US GAAP. Management uses these non-GAAP measures to provide investors with a supplemental measure of the Company’s operating

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performance and thus highlight trends in the Company’s core business that may not otherwise be apparent when relying solely on US GAAP financial measures. Management also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. In addition, management uses these non-GAAP measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets, and to assess its ability to meet future debt service, capital expenditure, and working capital requirements. The definitions of these measures, as well as a reconciliation of the most directly comparable financial measure calculated and presented in accordance with GAAP to each non-GAAP measure, are presented below.

Adjusted operating EBITDA: The Company defines adjusted operating EBITDA as operating earnings before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses, asset impairment charges and other non-recurring expenses.  Adjusted operating EBITDA is presented on a basis consistent with the Company’s internal management reports. The Company analyzes and discloses adjusted operating EBITDA to capture the profitability of its business before the impact of items not considered in management’s evaluation of operating unit performance.

Adjusted operating EBITDA margin.  The Company defines adjusted operating EBITDA margin as operating earnings before interest, taxes, depreciation, amortization, stock based compensation, acquisition related expenses, asset impairment charges and other non-recurring expenses as a percentage of revenue.  Adjusted operating EBITDA margin is presented on a basis consistent with the Company’s internal management reports.  The Company analyzes and discloses adjusted operating EBITDA margin to capture the profitability of its business before the impact of items not considered in management’s evaluation of operating performance.

Adjusted operating expenses: The Company defines adjusted operating expenses as operating expenses before acquisition related expenses, stock based compensation, depreciation, amortization, asset impairment charges and other non-recurring expenses. Adjusted operating expenses are presented on a basis consistent with the Company’s internal management reports. The Company analyzes and discloses adjusted operating expenses to capture the operating cost of the business before the impact of items not considered in management’s evaluation of operating costs.

Adjusted operating expense per case – Anesthesia segment: The Company defines adjusted operating expense per case for the anesthesia segment as adjusted operating expense for the anesthesia segment divided by anesthesia cases serviced in the period.  The Company analyzes and discloses adjusted operating expenses to capture the operating cost of the business before the impact of items not considered in management’s evaluation of operating costs and evaluates these costs as a per case metric.

The Company's management believes that the presentation of the above defined Non-GAAP financial measures provides useful information to investors because they reflect the Company’s ongoing business in a manner that allows for meaningful period-to-period comparisons and analysis of trends in its business. In addition, they portray the financial results of the Company before the impact of certain non-operational charges. The use of the term “non-operational charge” is defined for this purpose as an expense that does not impact the ongoing operating decisions taken by the Company's management. These items are excluded based upon the way the Company's management evaluates the performance of the Company's business for use in the Company's internal reports and are not excluded in the sense that they may be used under US GAAP.

The Company does not acquire businesses on a predictable cycle, and therefore believes that the presentation of non-GAAP measures, which adjusts for the impact of amortization of intangible assets, will provide readers of financial statements with a more consistent basis for comparison across accounting periods and be more useful in helping readers understand the Company’s operating results and underlying operational trends.

In summary, the Company believes the provision of supplemental Non-GAAP measures allow investors to evaluate the operational and financial performance of the Company's core business using the same evaluation measures that management uses and is therefore a useful indication of CRH’s performance or expected performance of future operations and facilitates period-to-period comparison of operating performance (although prior performance is not necessarily indicative of future performance). As a result, the Company considers it appropriate and reasonable to provide, in addition to U.S. GAAP measures, supplementary Non-GAAP financial measures that exclude certain items from the presentation of its financial results.

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The following charts provide unaudited reconciliations of US GAAP-based financial measures to Non-GAAP-based financial measures for the following periods presented:

Reconciliation of selected GAAP-based measures to Non-GAAP-based measures

Adjusted operating EBITDA

	2019												2018
(USD in thousands)	YTD			Q3 '19			Q2 ‘19			Q1 ‘19			YTD		Q3 '18		Q2 ‘18		Q1 ‘18
Net and comprehensive income		6,109			2,099			2,619			1,391			8,868		2,484		3,226		3,157
Net finance (income) expense		5,696			1,125			2,179			2,392			2,847		1,625		609		612
Equity income		(417	)		(77	)		(214	)		(125	)		—		—		—		—
Income tax expense (recovery)		736			565			4			167			1,652		390		593		669
Operating income		12,125			3,713			4,587			3,825			13,367		4,499		4,428		4,439
Amortization expense		25,892			8,528			8,723			8,641			23,077		8,185		7,695		7,196
Depreciation and related expense		82			28			27			27			71		24		25		23
Stock based compensation		280			706			(990	)		564			2,201		745		719		738
Acquisition expenses1		123			83			20			20			103		59		26		18
Other non-recurring items2		931			—			931			—			—		—		—		—
Total adjusted operating EBITDA		39,434			13,058			13,298			13,077			38,818		13,512		12,893		12,414
Adjusted operating EBITDA    attributable to:
Shareholders of the Company		27,818			9,392			9,661			8,766			25,176		8,515		8,429		8,232
Non-controlling interest		11,615			3,666			3,638			4,311			13,642		4,996		4,464		4,182

¹ Acquisition expenses relating to incomplete acquisitions

² Non-recurring expenses relating to the replacement of the Company’s CEO

Adjusted Operating EBITDA Margin

	2019												2018
(USD in thousands)	YTD			Q3 '19			Q2 ‘19			Q1 ‘19			YTD			Q3 '18			Q2 ‘18			Q1 ‘18
Revenue		90,016			30,415			30,482			29,119			80,728			28,732			27,331			24,666
Operating income		12,125			3,713			4,587			3,825			13,367			4,499			4,428			4,439
Operating margin		13.5	%		12.2	%		15.0	%		13.1	%		16.6	%		15.7	%		16.2	%		18.0	%
Amortization expense		28.8	%		28.0	%		28.6	%		29.7	%		28.6	%		28.5	%		28.2	%		29.2	%
Depreciation and related expense		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%		0.1	%
Stock based compensation		0.3	%		2.3	%		(3.2	)%		1.9	%		2.7	%		2.6	%		2.6	%		3.0	%
Acquisition expenses1		0.1	%		0.3	%		0.1	%		0.1	%		0.1	%		0.2	%		0.1	%		0.1	%
Other non-recurring items2		1.0	%		0.0	%		3.1	%		(—	)%		(—	)%		(—	)%		(—	)%		(—	)%
Total adjusted operating EBITDA margin		43.8	%		42.9	%		43.6	%		44.9	%		48.1	%		47.0	%		47.2	%		50.3	%

¹ Acquisition expenses relating to incomplete acquisitions

² Non-recurring expenses relating to the replacement of the Company’s CEO

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Adjusted operating expenses

	2019												2018
(USD in thousands)	YTD			Q3 '19			Q2 ‘19			Q1 ‘19			YTD			Q3 '18			Q2 ‘18			Q1 ‘18
Anesthesia services expense		69,805			23,774			23,471			22,559			59,105			21,406			19,957			17,743
Amortization expense		(25,891	)		(8,527	)		(8,722	)		(8,641	)		(23,075	)		(8,184	)		(7,694	)		(7,196	)
Depreciation and related expense		(9	)		(3	)		(3	)		(3	)		(5	)		(2	)		(2	)		(1	)
Stock based compensation		(359	)		(125	)		(117	)		(117	)		(358	)		(114	)		(132	)		(112	)
Acquisition expenses1		(123	)		(83	)		(20	)		(20	)		(103	)		(59	)		(26	)		(18	)
Anesthesia services – adjusted operating    expense		43,423			15,036			14,609			13,779			35,565			13,047			12,102			10,416
Product sales expense		3,441			1,089			1,217			1,134			3,758			1,182			1,359			1,217
Amortization expense		(2	)		(1	)		(1	)		—			(2	)		(1	)		(1	)		(1	)
Depreciation and related expense		(18	)		(5	)		(5	)		(9	)		(49	)		(16	)		(16	)		(16	)
Stock based compensation		(236	)		(82	)		(81	)		(73	)		(278	)		(100	)		(71	)		(107	)
Product sales - adjusted operating expense		3,186			1,002			1,131			1,053			3,429			1,065			1,271			1,093
Corporate expense		4,645			1,839			1,206			1,600			4,498			1,644			1,586			1,267
Amortization expense		—			—		-				—			—			—			—			—
Depreciation and related expense		(55	)		(20	)		(20	)		(15	)		(17	)		(6	)		(6	)		(5	)
Stock based compensation		314			(500	)		1,188			(375	)		(1,566	)		(530	)		(516	)		(519	)
Other non-recurring items2		(931	)		—			(931	)		—			—			—			—			—
Corporate - adjusted operating expenses		3,973			1,319			1,444			1,211			2,915			1,109			1,064			743
Total operating expense		77,891			26,702			25,895			25,294			67,361			24,232			22,902			20,226
Total adjusted operating expense		50,582			17,357			17,184			16,042			41,909			15,220			14,437			12,252

¹ Acquisition expenses relating to incomplete acquisitions

² Non-recurring expenses relating to the replacement of the Company’s CEO

Adjusted operating expense per cASE – Anesthesia segment

	2019								2018
(USD in thousands, except case and per case amounts)	YTD		Q3 '19		Q2 ‘19		Q1 ‘19		YTD		Q3 '18		Q2 ‘18		Q1 ‘18
Anesthesia services – adjusted operating    expense		43,423		15,036		14,609		13,779		35,565		13,047		12,102		10,416
Anesthesia cases serviced		250,890		88,733		84,656		77,501		195,843		71,800		66,537		57,506
Total adjusted operating expense per case -    Anesthesia segment		173		169		173		178		182		182		182		181

Liquidity and Capital Resources

At September 30, 2019, the Company had $5,215,044 in cash and cash equivalents compared to $9,946,945 at the end of 2018.  The decrease in cash and equivalents is primarily a reflection of cash generated from operations, offset by repayment of debt, including partial repayment of the Company’s earn-out obligation and cash used to finance normal course issuer bid repurchases, acquisitions and timing of distributions to non-controlling interest during 2019.

Working capital was $18,162,192 at September 30, 2019 compared to working capital of $20,012,424 at December 31, 2018. The Company expects to meet its short-term obligations, including short-term obligations in respect of its earn-out obligation and deferred consideration through cash earned through operating activities.

The average number of days receivables outstanding at September 30, 2019 was 57 days. At December 31, 2018, the average number of days receivables outstanding was 54 days.  The Company continues to focus on this metric and expects it to decrease in the remainder of the year.

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The Company has financed its operations primarily from revenues generated from product sales and anesthesia services and through equity and debt financings and a revolving credit facility.  As of September 30, 2019, the Company had a revolving credit facility with the Bank of Nova Scotia for $100 million, which was subsequently replaced with a $200 million revolving credit facility with J.P. Morgan.  The terms of the Company’s Scotia Facility is described below.

The Bank of Nova Scotia (“Scotia Facility”)

As at September 30, 2019, the Company had drawn $68,375,000 on the amended facility (2018 - $70,250,000).  The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin.  At September 30, 2019, interest on the facility is calculated at LIBOR plus 2.25% on both the revolving and term portions of the facility.  The Facility is secured by the assets of the Company.  As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at September 30, 2019. The Company’s facility matures on August 15, 2020 and has been replaced with a new credit facility with J.P. Morgan as of October 22, 2019. The new facility is a revolving credit line which provides up to $200 million in borrowing capacity and represents an increase from the Company’s previous $100 million facility.  The new facility includes a committed $125 million facility and access to an accordion feature that increases the amount of the credit available to the Company by $75 million.  Interest on the facility is calculated with reference to LIBOR plus 1.25% to 1.75%, dependent on the Company’s Debt to EBITDA ratio. The facility is secured by the assets of the Company and matures on October 22, 2022.   The Company will be required to maintain a Debt to EBITDA ratio covenant of 3.0:1.0 and a Fixed Coverage ratio covenant of 3.0:1.0 under the terms of the new facility.

Cash provided by operating activities for the three months ended September 30, 2019 was $10,711,163 compared to $11,912,199 in the same period in fiscal 2018. Cash provided by operating activities less distributions to non-controlling interest was $7,095,344 for the three months ended September 30, 2019 and $7,762,999 for the same period in 2018.  Cash provided by operating activities for the nine months ended September 30, 2019 was $32,669,879 compared to $29,848,485 in the same period in fiscal 2018. Cash provided by operating activities less distributions to non-controlling interest was $20,865,399 for the nine months ended September 30, 2019 and $15,230,025 for the same period in 2018.  The increase in cash provided by operating activities is reflective of the Company’s adjusted operating EBITDA¹ performance in the period.

Contractual Obligations and Contingent Liabilities

The Company’s near-term cash requirements relate primarily to interest payments, payments in respect of the Company’s remaining earn-out obligation which is scheduled for the second quarter of 2020, annual payments in respect of the deferred consideration in relation to the Austin acquisition, purchases under the Company’s normal course issuer bid, operations, working capital and general corporate purposes, including further acquisitions. Based on the current business plan, the Company believes cash and cash equivalents and the availability of its revolving credit facility will be sufficient to fund the Company’s operating, debt repayment and capital requirements for at least the next 12 months. The Company updates its forecasts on a regular basis and will consider additional financing sources as appropriate.

There were no significant changes in the Company’s contractual commitments compared with those set forth in the Company’s Annual Report Form 10-K for the year ended December 31, 2018, except as noted below:

• A portion of the Company’s earn-out obligation was repaid in the second quarter of 2019 ($4,795,822).  The remaining obligation of $973,094 is scheduled for payment in the second quarter of 2020.

• Upon adoption of the new US GAAP leasing standards, the Company’s contractual commitments in respect of operating leases are recorded on the balance sheet, effective January 1, 2019.

• The new J.P. Morgan credit facility requires interest only payments; there are no principal repayments required under the new facility.

¹See "Use of Non-GAAP Financial Measures" below for definitions and reconciliations of GAAP-based measures to Non-GAAP-based measures.

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Off-Balance Sheet Arrangements

The Company has no material undisclosed off-balance sheet arrangements that have or are reasonably likely to have, a current or future effect on our results of operations or financial condition.

Outstanding Share Data

As at September 30, 2019, there were 71,696,559 common shares issued and outstanding for a total of $55,598,273 in share capital.

As at September 30, 2019, there were 1,004,687 options outstanding at a weighted-average exercise price of $1.60 per share, of which 504,687 were exercisable into common shares at a weighted-average exercise price of $0.52 per share. As at September 30, 2019, there were 2,867,500 share units (“SUs”) issued and outstanding.

As at November 6, 2019, there were 71,491,259 common shares issued and outstanding, excluding shares held as treasury, for a total of $55,458,269 in share capital.

As at November 6, 2019, there were 1,004,687 options outstanding at a weighted-average exercise price of $1.61 per share, of which 504,687 were exercisable into common shares at a weighted-average exercise price of $0.52 per share. As at November 6, 2019, there were 2,867,500 share units (“Sus”) issued and outstanding.

JOBS Act

In April 2012, the JOBS Act was enacted. Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), for complying with new or revised accounting standards. Thus, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have irrevocably elected not to avail ourselves of this extended transition period and, as a result, we will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

We continue the process of evaluating the benefits of relying on other exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an emerging growth company, we may rely on certain of these exemptions. As of the date of this Quarterly Report on Form 10-Q, we have elected to rely on exemptions for (i) providing an auditor’s attestation report on our system of internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act and (ii) complying with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis. We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year in which we have total annual gross revenue of $1.07 billion or more; (ii) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (iii) the date on which we have issued more than $1.0 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC.

Item3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the period covered by this Quarterly Report on Form 10-Q, our management, with the participation of our Chief Executive Officer and our Chief Financial Officer (our principal executive officer and principal financial officer, respectively), evaluated the design and operating effectiveness of our disclosure controls and procedures. The term “disclosure controls and procedures,” as defined in Rules 13a-15€ and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

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Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on our evaluation of our disclosure controls and procedures as of September 30, 2019, our Chief Executive Officer and our Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were, in design and operation, effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our fiscal quarter ended September 30, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II. OTHER INFORMATION

Item1. Legal Proceedings

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. As of September 30, 2019, we are not a party to any legal proceedings that, in the opinion of our management, would reasonably be expected to have a material adverse effect on our business, financial condition, operating results or cash flows if determined adversely to us. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item1A. Risk Factors

You should carefully consider the following risk factors, in addition to the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and related notes. If any of the events described in the following risk factors occurs, our business, operating results and financial condition could be seriously harmed. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of factors that are described below and elsewhere in this Quarterly Report on Form 10-Q.

Risks Related to Our Company

We may or may not successfully identify and complete corporate transactions on favorable terms or achieve anticipated synergies relating to any acquisitions or alliances, and such acquisitions could result in unforeseen operating difficulties and expenditures, or require significant management resources and significant charges.

As a part of our growth strategy, we regularly explore potential acquisitions of complementary businesses, technologies, services or products as well as potential strategic alliances. We may be unable to find suitable acquisition candidates or appropriate partners with which to form alliances. Even if we identify appropriate acquisition or alliance candidates, we may be unable to complete the acquisitions or alliances on favorable terms, if at all, as a result of changes in tax laws, healthcare regulations, financial market, or other economic or market conditions. Acquisition activities can be thwarted by overtures from competitors for the targeted candidates, government regulation and replacement product developments in our industry. Competition may intensify due to the ongoing consolidation in the healthcare industry, which may increase our acquisition costs. In addition, the process of integrating an acquired business, technology, service or product into our existing operations could result in unforeseen difficulties and expenditures. Integrating completed acquisitions into our existing operations involves numerous short-term and long-term risks, including diversion of our management’s attention, failure to retain key personnel, long-term value of acquired intangible assets and acquisition expenses. In addition, we may be required to comply with laws, rules and regulations that may differ from those of the states in which our operations are currently conducted. Moreover, we may not realize the anticipated financial or other benefits of an acquisition or alliance.

Future acquisitions could also involve the issuance of equity securities, the incurrence of debt, contingent liabilities or amortization of expenses related to other intangible assets, any of which could adversely impact our financial condition or results of operations. The issuance of shares for an acquisition may result in dilution to our existing shareholders and, depending on the number of shares that we issue, the resale of such shares could affect the trading price of our common shares. In addition, equity or debt financing required for such acquisitions may not be available.

Any corporate transaction will be accompanied by certain risks including but not limited to:

• exposure to unknown liabilities of acquired companies and the unknown issues with any associated technologies or research. Such liabilities may include liabilities for failure to comply with applicable laws, or liabilities relating to medical malpractice claims. Generally, we obtain indemnification agreements from the sellers of businesses acquired with respect to pre-closing acts, omissions and other similar risks. It is possible that we may seek to enforce indemnification provisions in the future against sellers who may no longer have the financial wherewithal to satisfy their obligations to us. Accordingly, we may incur material liabilities for past activities of acquired businesses;

• certain acquired businesses may derive a greater portion of their revenue from government health programs than what we recognize on a consolidated basis, or may have business models with lower operating margins than ours, which could affect our overall payor mix or operating results in future periods;

• higher than anticipated acquisition costs and expenses;

41

• the difficulty and expense of integrating operations, systems, and personnel of acquired companies;

• disruption of our ongoing business;

• uncertainty that an acquired business will continue to maintain its pre-acquisition revenue and growth rates, or be profitable;

• inability to retain key customers, vendors, and other business partners of the acquired company;

• diversion of management’s time and attention;

• the realization of financial and operating risks not fully anticipated; and

• potential challenges under antitrust laws, either before or after an acquisition is consummated, which could involve substantial legal costs and result in the Company having to abandon the transaction or make a divestiture.

We may not be able to successfully overcome these risks and other problems associated with acquisitions and this may adversely affect our business, financial condition or results of operations.

If we are unable to manage growth, we may be unable to achieve our expansion strategy.

The success of our business strategy depends in part on our ability to expand our operations in the future. Our growth has placed, and will continue to place, increased demands on our management, operational and financial information systems, and other resources. Further expansion of our operations may require substantial financial resources and management attention.

To accommodate our past and anticipated future growth, and to compete effectively, we will need to continue to improve our management, to implement our operational and financial information systems, and to expand, train, manage, and motivate our workforce. Our personnel, systems, procedures, or controls may not be adequate to support our operations in the future. Further, focusing our financial resources and diverting management’s attention to the expansion of our operations may negatively impact our financial results. Any failure to improve our management, to implement our operational and financial information systems, or to expand, train, manage, or motivate our workforce may reduce or prevent our growth.

Our senior management has been key to our growth, and we may be adversely affected if we lose any member of our senior management.

The Company is dependent on its senior management. Consequently, our ability to retain these individuals and attract other qualified individuals is critical to our success. In addition, because of a relative scarcity of individuals with the high degree of education and business experience required for our business, competition among companies for qualified employees is intense and, as a result, we may not be able to attract and retain such individuals on acceptable terms, or at all. The loss of key management personnel or our inability to attract, retain, and motivate sufficient numbers of qualified management personnel could have a material adverse effect on the Company.

Incentive provisions for our key executives include the granting of equity-based compensation that vest over time or are based on performance and are designed to encourage such individuals to stay with us. However, a low share price, whether as a result of disappointing growth, revenues, income, or as a result of market conditions generally, could render such agreements of little value to our key executives. In such event, our key executives could be susceptible to being hired away by our competitors or other businesses who could offer a better compensation package. If we are unable to attract and retain key personnel, our business, financial condition, and results of operations may be adversely affected.

Changes to payment rates or methods of third-party payors, including United States government healthcare programs, changes to the United States laws and regulations that regulate payments for medical services, the failure of payment rates to increase as our costs increase, or changes to our payor mix, could adversely affect our operating margins and revenues.

We provide anesthesia services primarily through fee for service payor arrangements. Under these arrangements, we collect fees directly through the entities at which anesthesia services are provided. We assume financial risks related to changes in third-party reimbursement rates and changes in payor mix. Our revenue decreases if our volume or reimbursement decreases, but our expenses may not decrease proportionately.

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We depend primarily on U.S.government, third party commercial and private and governmental third-party sources of payment for the services provided to patients. The amount we receive for our services may be adversely affected by market and cost factors, as well as other factors over which we have no control, including changes to the Medicare and Medicaid payment systems. U.S. health reform efforts at the federal and state levels may increase the likelihood of significant changes affecting U.S. government healthcare programs and private insurance coverage. U.S. Government healthcare programs are subject to, among other things, statutory and regulatory changes, administrative rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating payments or reimbursements, all of which could materially increase or decrease payments we receive from these government programs. Further, Medicare reimbursement rates are increasingly used by private payors as benchmarks to establish commercial reimbursement rates and any adjustment in Medicare reimbursement rates or formulas may impact our reimbursement rates from such private payors as well.

As the Medicare program transitions away from fee for service payment models and toward value-based payment methodologies, we may be required to make additional investments to receive maximum Medicare reimbursement. For example, the Medicare Physician Quality Reporting System provides additional Medicare compensation to physicians who implement and report certain quality measures. Further, the Medicare Access and CHIP Reauthorization Act of 2015 requires the establishment of the Merit-Based Incentive Payment System under which, beginning in 2019, providers receive payment incentives or reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities, and meaningful use of electronic health records.

There are significant private and public sector pressures to reign in healthcare costs and to lower reimbursement rates for medical services, and we believe that such pressures will continue. Major payors of healthcare, including U.S. federal and state governments and private insurers, have taken steps in recent years to monitor and control costs, eligibility for, and use and delivery of healthcare services, and to revise payment methodologies. Further, the ability of commercial payors to control healthcare costs may be enhanced by the increasing consolidation of insurance and managed care companies, and the incursion of other private companies into the healthcare industry, all of which may reduce our ability to negotiate favorable contracts with such payors.

We expect efforts to impose greater discounts and more stringent cost controls by government and other payors to continue, thereby reducing the payments we receive for our services. The effect of cost containment trends will depend, in part, on our payor mix. We may not be able to offset reduced operating margins through cost reductions, increased volumes, the introduction of additional procedures or otherwise. In addition, future changes to reimbursement rates by government healthcare programs, cost containment measures by private third-party payors or other factors affecting payments for healthcare services may adversely affect our future revenues, operating margins, and profitability.

We are subject to decreases in our revenue and profit margin under our fee for service contracts and arrangements, where we bear the risk of changes in volume, payor mix, radiology, anesthesiology, and pathology benefits, and third-party reimbursement rates.

In our fee for service arrangements, which represent substantially all of our revenues, we collect the fees for services. Under these arrangements, we assume financial risks related to changes in the mix of patients covered by government-sponsored healthcare programs and third-party reimbursement rates. A substantial decrease in patient volumes, or an increase in the number of patients covered by government healthcare programs, as opposed to commercial plans that have higher reimbursement levels, or any potential shift in reimbursement mix could reduce our profitability and adversely impact future revenue growth. In some cases, our revenue decreases if our volume or reimbursement decreases, but our expenses may not decrease proportionately.

We operate a large number of anesthesia entities in many different markets. Each entity has a different mix of contracted and non-contracted relationships with commercial payors. In cases where our providers are not contracted, most payors have radiology, anesthesiology, and pathology provisions that limits the amount payable by patients when a non-contracted provider is utilized. In most cases, reimbursements we receive for anesthesia services are greater when we are non-contracted than they would be if we were contracted. As our anesthesia entities mature, we may choose or be required to enter into contracts with a majority of existing commercial payors which may result in decreased revenue, but our expenses may not decrease proportionately. Payors may also change the amount reimbursed for non-contracted providers which may also result in decreased revenue, but our expenses may not decrease proportionately

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ASCs or other customers may terminate or choose not to renew their agreements with us.

Our professional service agreements with our partner ASCs currently range in duration from one year to 15 years and can be renewed if agreed upon by both parties. The majority of these agreements also contain auto-renewal features. To date, with the exception of a contract in Sarasota, Florida, which was terminated as a result of an ASC closing and NC GAA, PC (“NC GAA”) contracts that the Company chose not to renew, all other professional service agreements have been renewed as required. Our contract with ASCs affiliated with Gastroenterology Anesthesia Associates, LLC (“GAA”), currently our largest customer contributing 20% of our total revenue in 2018 and 27% of our total revenue in 2017, requires renewal by November 2021.

Our customers may cancel or choose not to renew their contracts with us. Changes in economic conditions, including decreased government and commercial reimbursement, hospital acquisition of ASCs for physician practices, or changes in the state or federal regulatory environment could influence future actions of our partners or other customers. To the extent that any significant agreement or agreements with our partners or other customers are canceled, or are not renewed or replaced with other arrangements having at least as favorable terms, our business, financial condition and results of operations could be materially adversely affected.

We may be unable to enforce the non-competition and other restrictive covenants in our agreements.

As a material term and condition of each anesthesia medical practice acquisition, the sellers and owners enter into a restrictive covenant in favor of our purchasing entity, whereby the sellers and owners agree not compete in a specific restricted territory (the “Restrictive Covenants”). The restricted territory varies based upon the jurisdiction where the anesthesia medical practice is located. The length of the restricted period also varies based upon the jurisdiction where the anesthesia medical practice is located. If the sellers and owners, individually or collectively, breach the Restrictive Covenants, the definitive purchase agreements provide us with the remedies of injunctive relief and liquidated damages based upon a negotiated, predetermined estimate of damages. Additionally, we have negotiated additional special covenants, which vary from transaction to transaction, that provide us with the remedy of liquidated damages based upon a negotiated, predetermined estimate of damages. If a court determines that such liquidated damages are unenforceable as a penalty, as a result of such determination our business, financial condition and results of operations could be adversely affected.

The law governing non-competition agreements and other forms of restrictive covenants varies from jurisdiction to jurisdiction. Although we believe that the Restrictive Covenants applicable to our anesthesiologists, contractors, and other business partners are reasonable in scope and duration and therefore enforceable under applicable law, courts and arbitrators in some jurisdictions are reluctant to strictly enforce non-competition agreements and restrictive covenants. If we are unable to enforce the Restrictive Covenants in these agreements, our business, financial condition, results of operations and cash flows could be materially adversely affected. We cannot predict whether a court or arbitration panel would enforce these Restrictive Covenants.

We may need to raise additional capital to fund future operations.

The Company became profitable in the first quarter of 2011, which was consistent with the Company’s new business development strategy introduced in the fourth quarter of 2010 to focus exclusively on selling its CRH O’Regan System directly to physicians. With the acquisition of GAA in the fourth quarter of 2014, the Company altered its business strategy further to provide anesthesia services in addition to its existing medical product.

Based on our current cash resources, estimated capital requirements and anticipated revenues, we expect that we can maintain current operations. There can be no assurance that unforeseen developments or circumstances will not alter our requirements for capital. Any additional equity financing would be dilutive to our shareholders. If access to sufficient capital is not available as and when needed, our business may be impaired.

Advancing our product and current business operations, market expansion of our currently marketed product or growth of our anesthesia services, service of our debt, or acquisition and development of any new products, businesses or operations will require considerable resources and additional access to capital markets. In addition, our future cash requirements may vary materially from those now expected. For example, our future capital requirements may increase if:

• we experience more competition from other companies or in more markets than anticipated;

• we experience delays or unexpected increases in costs in connection with maintaining regulatory approvals for our product or services in the various markets where we sell our product and provide our services;

• we experience unexpected or increased costs relating to preparing, filing, prosecuting, maintaining, defending and enforcing patent claims, or other lawsuits, brought by either us or our competition;

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• we elect to raise additional capital in order to service or repay all or a portion of our outstanding debt;

• we elect to develop, acquire or license new technologies, products or businesses; or

• we are presented with suitable opportunities and elect to accelerate the pace of our continued growth strategy.

We could potentially seek additional funding through public or private equity or debt financing, corporate collaborations or through other transactions. However, if revenues are slow to increase or if industry and capital market conditions in general are unfavorable, our ability to obtain significant additional funding on acceptable terms, if at all, will be negatively affected. Additional financing that we may pursue may involve the sale of our common shares or financial instruments that are exchangeable for, or convertible into, our common shares, which could result in significant dilution to our shareholders.

If sufficient capital is not available, we may be required to delay or alter our current operations or our business expansion, either of which could have a material adverse effect on our business, financial condition, prospects or results of operations.

We are subject to various restrictive covenants and events of default under the Credit Facilities.

Under the Company’s credit facilities with JPMorgan Chase Bank, N.A., syndicated with The Bank of Nova Scotia, U.S. Bank and Wells Fargo (the “Credit Facilities”), the Company has made various restrictive covenants to the lenders, including payment of interest and principal when due. The Credit Facilities are available for review on SEDAR at www.sedar.com and on the SEC’s website at www.sec.gov.

If there is an event of default under either of these agreements, the principal amount owing under the Credit Facilities, plus accrued and unpaid interest, may be declared immediately due and payable. If such an event occurs, it could have a material negative impact on the Company financially. Any extended default under the Credit Facilities, could result in the loss of the Company’s entire business.

In addition, the Credit Facilities include various conditions and covenants that require CRH to obtain consents prior to carrying out certain activities and entering into certain transactions, such as incurring additional debt, repurchasing common shares of the Company, creating additional charges on the Company’s assets, and providing additional guarantees or disposing of certain assets. As a result of the restrictive covenants or other terms of any existing or new loan or other financing agreements, the Company may be significantly restricted in its ability to raise additional capital through bank borrowings and to engage in some transactions that CRH expects to be of benefit to the Company. The inability to meet these conditions and covenants or obtain lenders’ consent to carry out restricted activities could materially and adversely affect the business and results of operations of CRH.

We are exposed to market risk related to changes in interest rates. Our earnings are affected by changes in short-term interest rates as a result of borrowings under the Credit Facilities. As a result, if interest rates rise, our cost of borrowing will increase, negatively impacting our earnings.

Despite current indebtedness levels, we may still be able to incur substantially more debt, which could further exacerbate the risks associated with increased leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future. Although our Credit Facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of qualifications and exceptions, and the indebtedness incurred in compliance with these restrictions could be substantial. If we incur additional debt above the levels currently in effect, the risks associated with our leverage, including those described above, would increase.

Our common shares may be subject to significant price and volume fluctuations.

The Company’s common shares trade on the Toronto Stock Exchange (“TSX”) and on the NYSE American. Public markets, from time to time, experience significant price and volume fluctuations unrelated to the operating performance of particular companies. These broad market fluctuations may adversely affect the market price of the common shares of the Company. In addition, the market price of the common shares is likely to be highly volatile including for reasons related to the Company and those beyond the control of the Company. Moreover, it is likely that during future quarterly periods, the Company’s results and operations may fluctuate significantly or may fail to meet the expectations of stock market analysts, third party commentators (such as those issuing media or short reports) and investors and, in such event, the market price of the common shares could be materially adversely affected. In the past, securities class action litigation or shareholder activism has often been initiated following periods of volatility in the market price of a company’s securities. Such litigation or shareholder activism, if brought against the Company, could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

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We may write-off intangible assets.

The carrying value of our intangible assets is subject to periodic impairment testing. Under current accounting standards, intangible assets are tested for impairment on a recurring basis and we may be subject to impairment losses as circumstances change after an acquisition. If we record an impairment loss related to our intangible assets, which results from the anesthesia contracts that we acquire or other significant intangible assets, it could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

If we are unable to maintain or increase anesthesia procedure volumes at our existing ASCs, the operating margins and profitability of our anesthesia segment could be adversely affected.

Part of our growth strategy for our anesthesia services segment includes increasing our revenues and earnings through increasing the number of procedures performed at the ASCs we service. Procedure volume at the ASCs we serve may be adversely impacted by economic conditions, high unemployment rates, natural disasters, physicians who no longer utilize the ASCs we serve, and other factors that may cause patients to delay or cancel procedures. There are no assurances that we will be successful at increasing or maintaining procedure volumes, revenues and operating margins at our ASCs.

We may not be able to successfully recruit and retain qualified anesthesiologists or other independent contractors.

The healthcare business is highly competitive. We compete with other healthcare providers, primarily hospitals and other surgery centers in recruiting and retaining a sufficient number of anesthetists and anesthesiologists to perform our services operations. We compete with many types of healthcare providers including teaching, research, and government institutions and other practice groups for the services of qualified anesthesiologists.

Some of our competitors may have greater resources than we do, including financial, marketing, staff and capital resources. We may not be able to continue to recruit new anesthesiologists or renew contracts with existing contractors on acceptable terms. If we are not able to do so, our ability to provide anesthesia services and generate revenue and net income could be adversely affected.

Adverse events related to our product or our services may subject us to risks associated with product liability, medical malpractice or other legal claims, insurance claims, product recalls and other liabilities, which may adversely affect our operations.

There is an inherent risk in rubber band ligation of hemorrhoids and in the use of anesthesia services of the occurrence of an adverse event. One example of such an event is that in rare cases rubber band ligation of hemorrhoids can lead to sepsis, which if left untreated, can result in serious medical consequences, including death. Examples of adverse events related to anesthesia include anaphylaxis, nerve damage and embolism, which can result in serious medical consequences and in rare circumstances, can lead to death. Such adverse events could have material adverse consequences on our sales, business, operations and financial performance.

The occurrence of unanticipated serious adverse events or other safety problems could cause the governing agencies to impose significant restrictions on the indicated uses for which our product and services may be marketed, the distribution or sale of the product, or the provision of our services. In addition, post-market discovery of previously unknown safety problems or increased severity or significance of a pre-existing safety signal could result in withdrawal of the product from the market, product recalls or other material adverse effects on our operations.

We may be held liable or incur costs to settle liability claims if our product, services or contracted anesthesiologists cause injury. Although we currently maintain product liability and medical malpractice insurance, we cannot assure you that this insurance is adequate, and, at any time, it is possible that such insurance coverage may cease to be available on commercially reasonable terms, or at all. A product liability or medical malpractice claim, or a claim based in related legal theories of negligence or vicarious liability among others, could result in liability to us greater than our total assets or insurance coverage. Moreover, product liability, medical malpractice or other claims could have an adverse impact on our business even if we have adequate insurance coverage.

Our product and services may also fail to meet patient expectations or produce harmful side effects. Such unexpected quality, safety or efficacy issues may be caused by a number of factors, including manufacturing defects, failure to adhere to good clinical practices, failure to adhere to good manufacturing practices, non-compliance with clinical protocols or the presence of other inadequacies of product-related information conveyed to physicians or patients, or other factors or circumstances unique to the patient. Whether or not scientifically justified, such unexpected safety or efficacy concerns can arise and may lead to product recalls, loss of or delays in market acceptance, market withdrawals, or declining sales, as well as liability, consumer fraud and/or other claims.

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It is impossible to predict the scope of injury or liability from such defects, adverse events or unexpected reactions, the impact on the market for such products and services of any allegations of these claims, even if unsupported, the measure of damages which might be imposed as a result of any claims, or the cost of defending such claims. Substantial damages, awards and/or settlements have been handed down, notably in the United States and other common law jurisdictions, against medical companies in connection with claims for injuries allegedly caused by the use of their products and services. Although our shareholders would not have personal liability for such damages, the expenses of litigation or settlements, or both, in connection with any such injuries or alleged injuries and the amount of any award imposed on us in excess of existing insurance coverage, if any, may have a material adverse impact on us and on the price of our common shares. In addition, we may not be able to avoid significant liability exposure even if we take appropriate precautions, including maintaining liability coverage (subject to deductibles and maximum payouts). Any liability that we may have as a result could have a material adverse effect on our business, financial condition and results of operations. Liability claims in the future, regardless of their ultimate outcome, could have a material adverse effect on our reputation and on our ability to attract and retain customers.

The Patient Protection and Affordable Care Act (“PPACA”) and potential changes to it may have a significant effect on our business.

The PPACA contains a number of provisions that have affected us and may continue to affect us over the next several years. These provisions include the establishment of health insurance exchanges to facilitate the purchase of qualified health plans, expanded Medicaid eligibility, subsidized insurance premiums and additional requirements and incentives for businesses to provide healthcare benefits. Moreover, we could be affected by potential changes to various aspects of the PPACA, including subsidies, healthcare insurance marketplaces and Medicaid expansion.

The PPACA remains subject to continuing legislative and administrative flux and uncertainty. In 2017, Congress unsuccessfully sought to replace substantial parts of the PPACA with different mechanisms for facilitating insurance coverage in the commercial and Medicaid markets. Additionally, Centers for Medicare and Medicaid Services (“CMS”) has administratively revised a number of provisions and may seek to advance additional significant changes through regulation, guidance and enforcement in the future. At the end of 2017, Congress repealed part of the PPACA that required most individuals to purchase and maintain health insurance or face a tax penalty, known as the individual mandate. In December 2018, a federal judge in Texas declared that key portions of the PPACA were inconsistent with the United States Constitution and pacifically that the PPACA cannot stand on its own since Congress repealed the individual mandate. Several states are now engaged in appealing this decision. It is possible that as a result of these actions, enrollment in healthcare exchanges declined during 2018.

If the PPACA is repealed or further substantially modified, or if implementation of certain aspects of the PPACA are diluted or delayed, such repeal, modification or delay may impact our business, financial condition, results of operations, cash flows and the trading price of our securities. We are unable to predict the impact of any repeal, modification or delay in the implementation of the PPACA, including the repeal of the individual mandate, on us at this time.

The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) and potential changes to it may have a significant effect on our business.

MACRA contains numerous measures that could affect us, including, requirements that providers participate in quality measurement programs that differentiate payments to providers under Medicare based on quality and cost of care, rather than the quantity of procedures performed. MACRA requires providers to choose to participate in one of two payment formulas, Merit-Based Incentive Payments System (“MIPS”) or Alternative Payment Models (“APMs”). Beginning in 2019, MIPS will allow eligible providers to receive incentive payments based on the achievement of certain quality and cost metrics, among other measures, and be reduced for those who are underperforming against those same metrics and measures. As an alternative, providers can choose to participate in an Advanced APM, and providers who are meaningful participants in APMs will receive bonus payments from Medicare pursuant to the law. MACRA also remains subject to review and potential modification by Congress, as well as shifting regulatory requirements established by CMS. We currently anticipate that our affiliated providers will be eligible to receive bonus payments in 2019 through participation in the MIPS, although the amounts of such bonus payments are not expected to be material. We will continue to operationalize the provisions of MACRA and assess any further changes to the law or additional regulations enacted pursuant to the law.

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Failure to manage third-party service providers may adversely affect our ability to maintain the quality of service that we provide.

We outsource a majority of our revenue cycle management functions to a third-party service provider. If our outsourcing partner fails to perform their obligations in a timely manner or at satisfactory quality levels, or if they are unable to attract or retain sufficient personnel with the necessary skill sets to meet our needs, the quality of our services and operations could suffer. In addition, our reliance on a workforce of others exposes us to disruptions in their business. Our ability to manage any difficulties encountered could be largely outside of our control. Diminished service quality from outsourcing or our inability to utilize service providers could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.

Income tax audits and changes in our effective income tax rate could affect our results of operations.

Our effective tax rate could be adversely affected by changes in the mix of earnings and losses in countries with differing statutory tax rates, certain non-deductible expenses arising from stock option compensation, the valuation of deferred tax assets and liabilities and changes in federal, state or provincial tax laws and accounting principles. Increases in our effective tax rate could materially affect our net results.

In addition, we are subject to income tax audits by many tax jurisdictions. Although we believe our income tax liabilities are reasonably estimated and accounted for in accordance with applicable laws and principles, an adverse resolution of one or more uncertain tax positions in any period could have a material impact on the results of operations for that period.

Our dependence on suppliers could have a material adverse effect on our business, financial condition and results of operations.

The Company is economically dependent on one critical supplier for the CRH O’Regan System. The supplier, a clean room injection molding manufacturing company based in Ontario, Canada, performs contract manufacturing and assembly for the Company. Currently, the Company has one set of manufacturing molds for each product produced which is used for the injection molding, and these molds are inventoried at the supplier’s facility.

Manufacturing operations are subject to numerous unanticipated technological problems and delays. Our manufacturers are, and will be, subject to regulations specified by the various regulatory bodies such as Health Canada and the FDA. There can be no assurance that we will be able to comply with all stated manufacturing regulations. Failure or delay by our manufacturers to comply with such regulations or to satisfy regulatory inspections could have an adverse effect on the Company’s business and operations.

The Company’s anesthesia services are dependent on utilizing a continual supply of Propofol. CRH currently sources Propofol through supply agreements with narcotics manufacturers and its physicians and medical practitioners. A breach of any of these agreements, or a deterioration of the relationships with the parties thereto, could result in an interruption of the Company’s Propofol supply. Any interruption in the Company’s Propofol supply could have a material adverse effect on the Company’s anesthesia business and operations.

As the Company is dependent on a minimal number of suppliers for all manufacturing services and procurement of Propofol, any interruption caused by a business shutdown by the supplier (e.g., bankruptcy, fire or labor dispute) could be challenging for the Company. Although the Company mitigates these risks by maintaining open relationships with other suppliers that could perform similar services, maintaining an appropriate level of inventory, and performing quality and business audits of its suppliers on a regular basis, we cannot guarantee that we will be able to enter into new supply contracts, advantageous to us or at all, in the event of a shutdown. Any such shutdown may have a material adverse effect on our business, financial condition or results of operations.

Unfavorable economic conditions could have an adverse effect on our business.

Global economic conditions continue to be unpredictable and may result in slow economic growth and impact the number of unemployed and under-employed workers. We could experience additional shifts in the nature of patient reimbursement if economic conditions change. This may result in lower patient volumes.

Unfavorable economic conditions could also lead to additional increases in the number of unemployed and under-employed workers and decline in the number of private employers that offer healthcare insurance coverage to their employees. Employers that do offer healthcare coverage may increase the required contributions from employees to pay for their coverage and increase patient responsibility amounts. As a consequence the number of patients who participate in government-sponsored programs or are uninsured could increase. Payments received from government sponsored programs are substantially less than payments received from commercial and other third-party payors. A payor mix shift from commercial and other third-party payors to government payors may result in a decrease in our net revenue per patient case.

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We may be subject to a variety of regulatory investigations, claims, lawsuits, and other proceedings.

Due to the nature of the Company’s business, including without limitation the Company’s public listing, operations in the medical industry, product and anesthesia services, the Company may be subject to a variety of regulatory investigations, claims, lawsuits and other proceedings in the ordinary course of its business. The results of these legal proceedings cannot be predicted with certainty due to the uncertainty inherent in litigation, including the effects of discovery of new evidence or advancement of new legal theories, the difficulty of predicting decisions of judges and juries and the possibility that decisions may be reversed on appeal. There can be no assurances that these matters will not have a material adverse effect on our business.

If we are unable to adequately protect or enforce our intellectual property, our competitive position could be impaired.

Our commercial success and competitive position with the CRH O’Regan System are dependent in part upon our proprietary intellectual property, including our ability to:

• obtain patents and maintain their validity;

• protect our trade secrets; and

• effectively enforce our proprietary rights or patents against infringers.

Patent applications may not result in patents being issued. Until a patent is issued, the claims covered by the patent may be narrowed or removed entirely and therefore we may not obtain adequate patent protection. As a result, we may face unanticipated competition, or conclude that, without patent rights, the risk of bringing products to the market is too great. Any patents that we own may be challenged, invalidated or circumvented and may not provide us with protection against competitors. We may be forced to engage in costly and time-consuming litigation in order to protect our intellectual property rights. Patent rights may not provide us with adequate proprietary protection or competitive advantages against competitors with similar products or technologies. Patent rights are limited in time and have expiration dates. The laws of certain foreign countries do not protect our intellectual property rights to the same extent as do U.S. laws, and the scope of our patent claims also may vary between countries, as individual countries have distinctive patent laws.

In addition to patents, we rely on trade secrets and proprietary know-how. We seek protection, in part, through confidentiality and non-disclosure agreements. These agreements may not provide meaningful protection of our technology and operations model or adequate remedies in the event of unauthorized use or disclosure of confidential and proprietary information and, in any event, others may develop independently, or obtain access to, the same or similar information. Our failure or inability to protect our trade secrets and proprietary know-how could impair our competitive position.

We may spend significant resources to enforce our intellectual property rights and such enforcement could result in litigation. Intellectual property litigation is complex and can be expensive and time-consuming, and our efforts in this regard may not be successful. We also may not be able to detect infringement. In addition, competitors may design around our technology or develop competing technologies. Patent litigation can result in substantial cost and diversion of effort. Intellectual property protection may also be unavailable or limited in some foreign countries, enabling our competitors to capture increased market position. Patents issued to or licensed by us in the past or in the future may be challenged and held invalid. The invalidation of key intellectual property rights or an unsuccessful outcome in lawsuits filed to protect our intellectual property could have a material adverse effect on our financial condition, results of operations or prospects.

The success of our business depends in part on our ability to obtain and maintain intellectual property protection for our technology and know-how and operate without infringing the intellectual property rights of others. It is possible that as a result of future litigation our products currently marketed may be found to infringe or otherwise violate third party intellectual property rights.

The patent protection for our products may expire before we are able to maximize their commercial value, which may subject us to increased competition and reduce or eliminate our opportunity to generate revenues.

Our patents have varying expiration dates and, if these patents expire, we may be subject to increased competition, which could reduce or eliminate our opportunity to generate revenues or limit our ability to market our approved products. For example, our primary patents in the United States and Canada expired on March 8, 2016. Upon expiration of our patents, we may be subject to increased competition and our opportunity to establish or maintain product revenues could be substantially reduced or eliminated. Although we will continue to protect our proprietary rights through a variety of means, including the filing of three additional patents in September 2013 – one of which was issued in 2015, with a second one issued in 2016 – we cannot guarantee that the protective steps we have taken are adequate to protect these rights. In addition, as our patents expire, we may be unsuccessful in extending their protection through patent term extensions. The expiration of, or the failure to maintain or extend our patents could have a material adverse effect on our financial condition, results of operations or prospects.

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The Company may not be successful in marketing its products and services.

In order to sustain and increase revenues, the Company’s products and services must achieve a significant degree of market acceptance. If the Company is unable to promote, market and sell its products and services or secure relationships with physicians and ambulatory surgery centers, the Company’s business, financial condition and results of operations would be materially adversely affected.

Levels of market acceptance for our products and services could be impacted by several factors, many of which are not within our control, including but not limited to:

• safety, efficacy, convenience and cost-effectiveness of our products and services;

• scope of approved uses and marketing approval;

• difficulty in, or excessive costs to, manufacturing;

• infringement or alleged infringement of the patents or intellectual property rights of others;

• maintenance of business arrangements with healthcare providers;

• availability of alternative products or services from our competitors; and

• acceptance of the price of our products and services.

If our competitors are able to develop and market products that are preferred over the CRH O’Regan System, are able to grow service businesses that are preferred over CRH’s anesthesia services or other businesses preferred over other products and services that we may develop, we may not be able to generate sufficient revenues to continue our operations.

We may not be able to contend successfully with competitors. The medical industry is highly competitive and subject to significant and rapid technological change as researchers learn more about diseases and develop new technologies, services and treatments. Certain of our competitors, either alone or together with their collaborators, have substantially greater resources than we do. The existence of other products, services or treatments of which we are not aware, or products, services or treatments that may be developed in the future, may reduce the marketability of the CRH O’Regan System, CRH’s anesthesia services, and any future operations, particularly to the extent such products or services:

• are more effective;

• have fewer or less severe adverse side effects;

• have better patient compliance;

• receive better reimbursement terms;

• are accepted by more physicians;

• have better distribution channels;

• are easier to administer; or

• are less expensive.

Our anesthesia employees and third-party contractors may not appropriately record or document services that they provide.

Our anesthesia employees are responsible for appropriately recording and documenting the services they provide. We use this information to seek reimbursement for their services from third-party payors. In addition, we utilize third-party contractors to perform certain revenue cycle management functions for medical providers and payors, including medical coding and data reporting. If our employees and third-party contractors do not appropriately document, or where applicable, code for their services or our customers’ services, we could be subjected to administrative, regulatory, civil, or criminal investigations or sanctions and our business, financial condition, results of operations and cash flows could be materially adversely affected.

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Failure to timely or accurately bill for services could have a negative impact on our net revenue, bad debt expense and cash flow.

Billing for healthcare services is an important and complex aspect of our business. We bill numerous and varied payors, such as managed care payors and Medicare Medicaid, and self-pay patients. These different payors typically have different billing requirements that must be satisfied prior to receiving payment for services rendered. Reimbursement is typically conditioned on our documenting medical necessity, the appropriate level of service and correctly applying diagnosis codes. Incorrect or incomplete documentation and billing information could result in non-payment for services rendered.

Additional factors that could complicate our ability to timely or accurately bill payors include:

• disputes between payors as to which party is responsible for payment;

• failure of information systems and processes to submit and collect claims in a timely manner;

• variation in coverage for similar services among various payors;

• our reliance on third-parties to provide billing services;

• the difficulty of adherence to specific compliance requirements, diagnosis coding and other procedures mandated by various payors;

• failure to obtain proper provider credentialing and documentation in order to bill various payors; and

• failure to collect patient balances due to economic conditions or other unknown reasons.

To the extent that the complexity associated with billing for healthcare services we provide causes delays in our cash collections, we may experience increased carrying costs associated with the aging of our accounts receivable, as well as increased potential for bad debt expense.

Our industry is already competitive and could become more competitive.

The healthcare industry is highly competitive and subject to continual changes in the methods by which services are provided and the manner in which healthcare providers are selected and compensated.

Because some of our operations consist primarily of anesthesia services provided within ASCs, we compete with other healthcare services companies and physician groups for contracts with ASCs to provide our services to patients. Our anesthesia services are provided under exclusive professional service agreements of varying duration which we may need to renew, renegotiate or replace. Our ability to renew, renegotiate or replace significant agreements will be critical to our success. We also face competition from hospitals to provide our services.

Companies in other healthcare industry segments, some of which have greater financial and other resources than ours, may become competitors in providing gastroenterology services or anesthesia care. Additionally we face competition from healthcare-focused and other private equity groups that are active in acquiring and consolidating physician practices, including related ancillary services, such as GI anesthesia. We may not be able to continue to compete effectively in this industry and additional competitors may enter metropolitan areas where we operate. This increased competition may have a material adverse effect on our business, financial condition, results of operations and cash flows.

If there is a change in federal or state laws, rules, regulations, or in interpretations of such federal or state laws, rules or regulations, we may be required to redeem our physician partners’ ownership interests in anesthesia companies under the savings clause in our joint venture operating agreements.

The operating agreements with our physician partners contain a savings clause that is triggered upon an adverse governmental action, including a change in federal or state laws, rules or regulations or an interpretation of such federal or state laws, rules or regulations (each an “Adverse Governmental Action”). Upon the occurrence of an Adverse Governmental Action the savings clause will require divestiture of the physicians’ ownership in the anesthesia company and we would be required to redeem the physicians’ ownership interest. If an Adverse Governmental Action occurs under a particular state’s law, we would be required to redeem the ownership interests of each physician partner in such state. If an Adverse Governmental Action occurs under federal law, we would be required to redeem the ownership interest of each physician partner in the United States. The redemption price of each anesthesia company is based upon a predetermined multiple of such anesthesia company’s EBITDA, which reflects the fair market value of the redeemed interests. This could impact our cash flow during the redemption period. The redemption occurs over a period of four or five years depending on each applicable operating agreement.

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Our failure to comply with U.S. federal and state fraud and abuse laws, including anti-kickback laws and other U.S. federal and state anti-referral laws, could have a material, adverse impact on our business.

There are numerous U.S. federal and state laws pertaining to healthcare fraud and abuse, including anti-kickback laws and physician self-referral laws. Our relationships with healthcare providers and other third parties are subject to scrutiny under these laws. Violations of these laws are punishable by criminal and civil sanctions, including, in some instances, imprisonment and exclusion from participation in federal and state healthcare programs, including the Medicare, Medicaid and Veterans Administration health programs.

Healthcare fraud and abuse regulations are complex, and even minor irregularities can potentially give rise to claims that a statute or prohibition has been violated. The laws that may affect our ability to operate include, among others:

• the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

• the federal False Claims Act, which prohibits, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;

• The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), among other things, prohibits executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;

• the federal physician self-referral law (the “Stark Law”), which prohibits, subject to certain exceptions, physicians from making referrals of certain federal health care beneficiaries for a “designated health service” to an entity if the physician or an immediate family member has a financial relationship with the entity. Some of the services our affiliated physicians and professional groups provide include designated health services; and

• foreign and U.S. state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

To enforce compliance with the federal laws, the U.S. Department of Justice (the “DOJ”) has recently increased its scrutiny of interactions between healthcare companies and healthcare providers, which has led to a number of investigations, prosecutions, convictions and settlements in the healthcare industry. Dealing with investigations can be time- and resource-consuming and can divert management’s attention from our core business. Additionally, if we settle an investigation with the DOJ or other law enforcement agencies, we may be forced to agree to additional onerous compliance and reporting requirements as part of a consent decree or corporate integrity agreement. Any such investigation or settlement could increase our costs or otherwise have an adverse effect on our business.

The scope and enforcement of these laws is uncertain and subject to rapid change in the current environment of healthcare reform, especially in light of the lack of applicable precedent and regulations. Federal or state regulatory authorities might challenge our current or future activities under these laws. Any of these challenges could have a material adverse effect on our reputation, business, financial condition and operating results. Any state or federal regulatory review of us, regardless of the outcome, would be costly and time-consuming. Additionally, we cannot predict the impact of any changes in these laws, whether or not retroactive.

Our employees and business partners may not appropriately secure and protect confidential information in their possession.

Each of our employees and business partners is responsible for the security of the information in our systems and to ensure that private and financial information is kept confidential. Should an employee or business partner not follow appropriate security measures, including those related to cyber threats or attacks, such non-compliance may result in the release of private or confidential financial information. The release of such information could have material adverse effect on our business, financial condition, results of operations and cash flows.

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Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions or data corruption could significantly disrupt our operations and adversely affect our business and operating results.

We rely extensively on information technology systems and telephone networks and systems, including the Internet, to process and transmit sensitive electronic information and to manage or support a variety of business processes and activities, including sales, billing, customer service, procurement and supply chain, manufacturing, and distribution. We use enterprise information technology systems to record, process, and summarize financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal, and tax requirements. Our information technology systems, some of which are managed by third-parties, may be susceptible to damage, disruptions or shutdowns due to computer viruses, attacks by computer hackers, failures during the process of upgrading or replacing software, databases or components thereof, power outages, hardware failures, telecommunication failures, user errors or catastrophic events. Despite the precautionary measures we have taken to prevent breakdowns in our information technology and telephone systems, if our systems suffer severe damage or disruption or shutdown and we are unable to effectively resolve the issues in a timely manner, our business and operating results may suffer.

In addition, we accept payments for many of our sales through credit and debit card transactions, which are handled through a third-party payment processor. As a result, we are subject to a number of risks related to credit and debit card payments, including that we pay interchange and other fees, which may increase over time and could require us to either increase the prices we charge for our products or experience an increase in our costs and expenses. In addition, as part of the payment processing process, we transmit our patients' and clinicians' credit and debit card information to our third-party payment processor. We may in the future become subject to lawsuits or other proceedings for purportedly fraudulent transactions arising out of the actual or alleged theft of our patients' credit or debit card information if the security of our third-party credit card payment processor is breached. We and our third-party credit card payment processor are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we or our third-party credit card payment processor fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from our patients, and there may be an adverse impact on our business.

We may be subject to criminal or civil sanctions if we fail to comply with privacy regulations regarding the protection, use and disclosure of patient information.

The HIPAA Privacy Rule (the “Privacy Rule”) restricts the use and disclosure of patient information and requires entities to safeguard that information and to provide certain rights to individuals with respect to that information. The HIPAA Security Rule (the “Security Rule”) establishes elaborate requirements for safeguarding patient health information transmitted or stored electronically.

The Privacy Rule and Security Rule require the development and implementation of detailed policies, procedures, contracts and forms to assure compliance. We have implemented such compliance measures, but we may be required to make additional costly system purchases and modifications to comply with evolving HIPAA rules, and our failure to comply may result in liability and adversely affect our business.

New health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effect on the manner in which we must handle healthcare related data, and the cost of complying with standards could be significant. If we do not properly comply with existing or new laws and regulations related to patient health information, we could be subject to criminal or civil sanctions.

We have a legal responsibility to the minority owners of the entities through which we own our anesthesia services business, which may conflict with our interests and prevent us from acting solely in our own best interests.

As the owner of majority interests in the limited partnerships and limited liability companies that own our anesthesia service businesses, we owe a fiduciary duty to the non-controlling interest holders in these entities and may encounter conflicts between our interests and those of the minority holders. In these cases, our representatives on the governing board of each partnership or joint venture are obligated to exercise reasonable, good faith judgment to resolve the conflicts and may not be free to act solely in our own best interests. In our role as manager of the limited partnership or limited liability companies, we generally exercise our discretion in managing the business of our anesthesia practices. Disputes may arise between us and our physician partners regarding a particular business decision, or the interpretation of the provisions of the limited partnership agreement or limited liability company operating agreement. These agreements provide for arbitration as a dispute resolution process in some circumstances. There is no assurance that any possible dispute will be resolved amicably, or that any dispute resolution will be on terms satisfactory to us.

53

A significant number of our affiliated physicians could leave our affiliated ASCs.

Our affiliated physicians may leave our affiliated ASCs for a variety of reasons, including retirement, death and to provide services for other types of healthcare providers, such as teaching, research and government institutions, hospitals and health systems and other practice groups. If a substantial number of our affiliated physicians leave our affiliated ASCs, our business, financial condition, results of operations and cash flows could be materially adversely affected.

If regulations or regulatory interpretations change, we may be obligated to re-negotiate agreements of our anesthetists, anesthesiologists or other contractors.

Due to regulations prohibiting the corporate practice of medicine, the shares of Gastroenterology Anesthesia Associates LLC (“GAA”), CRH GAA PLLC (“CRH GAA”), CRH GAA of Washington PLLC (“CRH GAAW”) and NC GAA PC (“NC GAA”) are owned by an individual medical practitioner. The operations and corporate structures of GAA, CRH GAA, CRH GAAW and NC GAA are governed by certain agreements, including a loan by CRH Medical Corporation to the individual medical practitioner. These agreements, including the affirmative and negative covenants therein in favour of CRH, effectively provide CRH control of GAA, CRH GAA, CRH GAAW and NC GAA. If certain regulations or regulatory interpretations change, particularly in relation to the medical practice and physician ownership, we will be obligated to adapt or re-negotiate our operating agreements to comply with such regulations. The cost of adapting or re-negotiating these agreements could be substantial. There can be no assurance, however, that our existing capital resources would be sufficient for us to meet any future obligations to adapt or re-negotiate our operating agreements, if they arise.

The re-negotiating of these agreements could have a material adverse effect on our financial condition and results of operations. While we believe physician ownership and our operating strategy is in compliance with applicable law, we can give no assurances that legislative or regulatory changes would not have an adverse impact on us. From time to time, these issues are considered by some state legislatures and federal and state regulatory agencies.

The continuing development of our products and provision of our services depends upon us maintaining strong relationships with physicians.

The marketing and sales of our products and services is dependent upon our maintaining working relationships with physicians. If we are unable to maintain our strong relationships with these professionals, the development and marketing of our products and services could suffer, which could have a material adverse effect on our consolidated earnings, financial condition, and/or cash flows.

We operate in an industry that is subject to extensive federal, state, and local regulation, and changes in law and regulatory interpretations.

The healthcare industry in the United States is subject to extensive federal, state, and local laws, rules, and regulations relating to, among other things:

• payment for services;

• corporate practice of medicine;

• conduct of operations, including fraud and abuse, anti-kickback, physician self-referral, and false claims prohibitions;

• reporting of quality measures;

• protection of patient information; and

• medical waste disposal and environmental protection.

Unfavorable changes or conditions could occur in the states where our operations are concentrated.

A majority of our anesthesia services revenue in 2018 and in the first quarter of 2019 was generated by our operations in 10 states. In particular, Georgia, North Carolina, Massachusetts, Colorado and Texas accounted for approximately 74% of our anesthesia revenue in 2018. Adverse changes or conditions affecting these particular states, such as healthcare reforms, changes in laws and regulations, reduced reimbursements and government investigations, economic conditions, extreme weather conditions, and natural disasters may have a material adverse effect on our business, financial condition, results of operations, cash flows, and the trading price of our securities.

54

Government authorities or other parties may assert that our business practices violate antitrust laws.

The healthcare industry is subject to close antitrust scrutiny. In recent years, U.S. regulatory authorities have taken increasing steps to review and in some cases take enforcement action against business conduct and acquisitions in the healthcare industry. Violations of antitrust laws may be punishable by substantial penalties including significant monetary fines, civil penalties, criminal sanctions, and consent decrees and injunctions prohibiting certain activities or requiring divestiture or discontinuance of business operations. Any of these penalties could have material adverse effects on our business’ financial condition and results of operations.

Significant shareholders of the Company could influence our business operations, and sales of our shares by such significant shareholders could influence our share price.

The exercise of voting rights associated with shares held by any significant shareholder of the Company at meetings of shareholders may have significant influences on our business, and operations. If such a shareholder holds those shares for the purpose of investment, and if it were to sell those shares in the market in the future, it could have significant influences on our share price, depending on the market environment at the time of such sale.

Anti-takeover provisions could discourage a third party from making a takeover offer that could be beneficial to our shareholders.

From time to time, another entity could pursue us as an acquisition target, or could otherwise seek to influence our corporate affairs.  However, some of the provisions in our articles of incorporation could delay or prevent a third party from acquiring us or replacing members of our Board of Directors, even if the acquisition or the replacements would be beneficial to our shareholders. These provisions could also reduce the price that certain investors might be willing to pay for our securities and result in the market price for our securities, including the market price for our common shares, being lower than it would be without these provisions.

Changes in the medical industry and the economy may affect the Company’s business.

The Company’s business may be affected by factors beyond its control, such as an economic recession or the aggressive pricing policies of competitors. Future technological advances in the continually-changing medical industry can be expected to result in the availability of new products and services that will compete with the products and services that the Company may develop or render the Company’s current product and anesthesia services obsolete. We expect that market demand, governmental regulation, government and third-party reimbursement policies and societal pressures will continue to change the worldwide healthcare industry, resulting in further business consolidations and alliances, which may exert further downward pressure on the prices of our products and services and could adversely impact our business, financial condition, and results of operations.

Our industry is the subject of numerous governmental investigations into marketing and other business practices which could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations.

Our industry is the subject of numerous governmental investigations into marketing and other business practices. This has included increased regulation, enforcement, inspections, and governmental investigations of the medical device industry and disclosure of financial relationships with healthcare professionals. These investigations could result in the commencement of civil and/or criminal proceedings, substantial fines, penalties, and/or administrative remedies, divert the attention of our management, and have an adverse effect on our financial condition and results of operations. We anticipate that the government will continue to scrutinize our industry closely, and that additional regulation by governmental authorities, both foreign and domestic, may increase compliance costs, exposure to litigation and other adverse effects to our operations.

Evolving regulation of corporate governance and public disclosure may result in additional expenses and continuing uncertainty.

Changing laws, regulations and standards relating to corporate governance and public disclosure, including those of the Canadian Securities Administrators, the SEC, the TSX and the NYSE American are creating uncertainty for companies such as ours. These new or changed laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We are committed to maintaining high standards of corporate governance and public disclosure. As a result, we intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new or changed laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to practice, regulatory authorities may initiate legal proceedings against us and we may be harmed.

55

Future changes in financial accounting standards may cause adverse, unexpected revenue fluctuations and affect our financial position or results of operations. New pronouncements and varying interpretations of pronouncements have occurred with greater frequency and are expected to occur in the future. Compliance with changing regulations of corporate governance and public disclosure may result in additional expenses. All of these uncertainties are leading generally toward increasing insurance costs, which may adversely affect our business, results of operations and our ability to purchase any such insurance, at acceptable rates or at all, in the future.

We may face exposure to adverse movements in foreign currency exchange rates.

Our business is primarily based in the United States with a significant portion of our revenues, expenses, current assets and current liabilities denominated in U.S. dollars. Our financial statements are also expressed in U.S. dollars. An increase or decrease in the value of foreign currencies relative to the U.S. dollar could result in increased expenses and losses from currency exchange rate fluctuations.

If we or some of our suppliers fail to comply with the FDA’s Quality System Regulation and other applicable requirements, our manufacturing or processing operations could be disrupted, our sales and profitability could suffer, and we may become subject to a wide variety of FDA enforcement actions.

We are subject to inspection and marketing surveillance by the FDA to determine our compliance with all regulatory requirements. If the FDA finds that we have failed to comply with any regulatory requirements, it can institute a wide variety of enforcement actions.

We and some of our suppliers must comply with the FDA’s Quality System Regulation, which governs the methods used in, and the facilities and controls used for, the design, testing, manufacture, control, quality assurance, installation, servicing, labeling, packaging, storage, and shipping of medical devices. The FDA enforces its regulations through pre-announced and unannounced inspections. We have been, and anticipate in the future being, subject to such inspections by the FDA and other regulatory bodies. The timing and scope of future audits is unknown and it is possible, despite our belief that our quality systems and the operation of our manufacturing facilities will remain in compliance with U.S, and non-U.S. regulatory requirements, that a future audit may result in one or more unsatisfactory results. If we or one of our suppliers fails an inspection, or if a corrective action plan adopted by us or one of our suppliers is not sufficient, the FDA may bring an enforcement action against us, which could result in significant financial penalties, the recall of our products or the suspension or permanent enjoinment of some or all our operations.

We are also subject to the FDA’s general prohibition against promoting our products for unapproved or off-label uses and to the medical device reporting regulations that require us to report to the FDA if our products may have caused or contributed to a death or serious injury, or if our device malfunctions and a recurrence of the malfunction would likely result in a death or serious injury. We must also file reports with the FDA of some device corrections and removals, and we must adhere to the FDA’s rules on labeling and promotion. If we fail to comply with these or other FDA requirements or fail to take adequate corrective action in response to any significant compliance issue raised by the FDA, the FDA can take significant enforcement actions, which could harm our business, results of operations, and our reputation.

We do not intend to pay dividends on our common shares, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our common shares.

We have never declared or paid any cash dividend on our common shares and do not currently intend to do so for the foreseeable future. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business. In addition, any future debt financing arrangement may contain terms prohibiting or limiting the amount of dividends that may be declared or paid on our common shares. Any return to shareholders will therefore be limited to any appreciation of their shares. Therefore, the success of an investment in our common shares will depend upon any future appreciation in their value. There is no guarantee that our common shares will appreciate in value or even maintain the price at which our shareholders purchased their shares.

56

Tax reform could have a material adverse effect on us.

The December 2017 legislation commonly referred to as the “Tax Cuts and Jobs Act” (the “Tax Act”) made significant changes to federal income tax law including, among other things, reducing the statutory corporate income tax rate to 21 percent from 35 percent and changing the U.S. taxation of our non-U.S. business activities. We may be adversely affected by these changes in U.S. tax laws and regulations, and it is possible that governmental authorities in the United States and/or other countries could further amend tax laws that would adversely affect us. In addition, we are required to evaluate the impact of the Tax Act on our operations and financial statements, and to the extent we initially do so inaccurately, we may not provide investors or the public with advance notice of any adverse effect. Currently, we have accounted for the effects of the Tax Act using reasonable estimates based on currently available information and our interpretations thereof. This accounting may change due to, among other things, changes in interpretations we have made and the issuance of new tax or accounting guidance.

Certain changes in tax law implemented by the Tax Act were only partially effective in the 2018 fiscal year and become fully effective in the 2019 fiscal year. The primary impacts to us include repeal of the alternative minimum tax regime, decrease of the corporate income tax rate structure, net operating loss limitations, and changes to the limits on executive compensation deductions. These changes will have a material impact to the value of deferred tax assets and liabilities, and our future taxable income and effective tax rate. Although we currently anticipate the enacted changes in the corporate tax rate and calculation of taxable income will have a favorable effect on our financial condition, profitability, and/or cash flows, we are still analyzing the Tax Act with our professional advisers. Until such analysis is complete and verified, the full impact of the Tax Act on us in future periods is uncertain, and no assurances can be made by us that it will not have any negative impacts on us.

We are an “emerging growth company” and a “smaller reporting company,” and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to such companies could make our common shares less attractive to investors.

We are an “emerging growth company,” as defined in the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”), and a “smaller reporting company,” as defined under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and we have taken advantage of, and intend to continue to take advantage of, certain exemptions from various reporting and compliance requirements that apply to other public companies that are not “emerging growth companies” or “smaller reporting companies.” These exemptions include, but are not limited to, the following:

• not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act;

• only being required to include two, as opposed to three, years of audited financial statements in our annual reports;

• less extensive disclosure obligations regarding executive compensation in our registration statements, periodic reports and proxy statements; and

• exemptions from the requirements to hold a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

We intend to continue to take advantage of exemptions relating to emerging growth companies and smaller reporting companies but cannot guarantee that we will not be required to implement these requirements sooner than budgeted or planned and thereby incur unexpected expenses. We cannot predict if investors will find our common shares less attractive because of our reliance on these exemptions. If some investors find our common shares less attractive as a result, there may be a less active trading market for our common shares, which could result in a reduction in the price of our common shares or cause our share price to be more volatile.

If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common shares.

Effective internal control over financial reporting is necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, is designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404(a) of the Sarbanes-Oxley Act, or the subsequent testing by our independent registered public accounting firm conducted in connection with Section 404(b) of the Sarbanes-Oxley Act after we no longer qualify as an “emerging growth company,” may reveal deficiencies in our internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our common shares.

57

We are required to disclose changes made to our internal control procedures on a quarterly basis and our management is required to assess the effectiveness of these controls annually. However, for as long as we are an “emerging growth company” under applicable SEC rules and regulations, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404. An independent assessment of the effectiveness of our internal control could detect problems that our management’s assessment might not. Undetected material weaknesses in our internal controls could lead to financial statement restatements and require us to incur the expense of remediation.

If securities or industry analysts do not publish research, or publish inaccurate or unfavorable research, about our business, our share price and trading volume could decline.

The trading market for our common shares depends, in part, on the research and reports that securities or industry analysts publish about us or our business. If one or more of the analysts who cover us downgrade our shares or publish inaccurate or unfavorable research about our business, our share price would likely decline. In addition, if our operating results fail to meet the forecasts of analysts, our share price would likely decline. If one or more of these analysts cease coverage of our company or fail to publish reports on us regularly, demand for our common shares could decrease, which might cause our share price and trading volume to decline.

Item2. Unregistered Sales of Equity Securities and Use of Proceeds

We did not make sales of equity securities during our fiscal quarter ended September 30, 2019 that were not registered under the Securities Act.

Item3. Defaults upon Senior Securities

None.

Item4. Mine Safety Disclosures

Not applicable.

Item5. Other Information

None.

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Item 6. Exhibits

Exhibit No.	Description
3.1	Notice of Articles of the Registrant (incorporated by reference to Exhibit 3.1 to the Registrant’s Annual Report on Form 10-K (File No. 001-37542, originally filed with the SEC on March 13, 2019).
3.2	Articles of the Registrant (incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-8 (File No. 333-206945), originally filed with the SEC on September 14, 2015).
4.1	Specimen Common Share certificate (incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 (File No. 333-206945), originally filed with the SEC on September 14, 2015).
10.1*	Credit Agreement, dated as of October 22, 2019, among the Registrant, as borrower, the other loan parties and lenders party thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a)  of the Securities Exchange Act of 1934.
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a)  of the Securities Exchange Act of 1934.
32.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

*^*Certain portions of this exhibit (indicated by “[REDACTED]”) have been omitted as the Registrant has determined (i) the omitted information is not material and (ii) the omitted information would likely cause harm to the Registrant if publicly disclosed.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CRH MEDICAL CORPORATION
By:	/s/ Tushar Ramani, MD
Name:	Tushar Ramani, MD
Title:	Chief Executive Officer and Director (Principal Executive Officer)
Date:	November 7, 2019
By:	/s/ Richard Bear
Name:	Richard Bear
Title:	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)
Date:	November 7, 2019

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EX-10.1

Exhibit 10.1

Execution Copy

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT HAS BEEN OMITTED BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD LIKELY CAUSE COMPETITIVE HARM TO CRH MEDICAL CORPORATION IF PUBLICLY DISCLOSED, OR IS PERSONALLY IDENTIFIABLE INFORMATION. INFORMATION THAT HAS BEEN OMITTED HAS BEEN NOTED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY “[REDACTED]".

CREDIT AGREEMENT dated as of October 22, 2019 among CRH MEDICAL CORPORATION as Borrower, The Other Loan Parties Party Hereto The Lenders Party Hereto and JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Administrative Agent ___________________________ JPMORGAN CHASE BANK, N.A., as Sole Bookrunner and Sole Lead Arranger ___________________________ THE BANK OF NOVA SCOTIA and U.S. BANK NATIONAL ASSOCIATION, as Syndication Agents

TABLE OF CONTENTS

		Page
ARTICLE I. Definitions		1
SECTION 1.01.	Defined Terms	1
SECTION 1.02.	Classification of Loans and Borrowings.	33
SECTION 1.03.	Terms Generally.	33
SECTION 1.04.	Accounting Terms; GAAP	34
SECTION 1.05.	Interest Rates	34
SECTION 1.06.	Pro Forma Adjustments for Acquisitions and Dispositions	34
SECTION 1.07.	Rounding	34
SECTION 1.08.	Interest Rates; LIBOR Notification	35
ARTICLE II. The Credits		35
SECTION 2.01.	Commitments	35
SECTION 2.02.	Loans and Borrowings	35
SECTION 2.03.	Requests for Borrowings	36
SECTION 2.04.	[Section Intentionally Omitted]	36
SECTION 2.05.	Swingline Loans	36
SECTION 2.06.	Letters of Credit	38
SECTION 2.07.	Funding of Borrowings.	42
SECTION 2.08.	Interest Elections.	43
SECTION 2.09.	Termination and Reduction of Commitments; Increase in Revolving Commitments	44
SECTION 2.10.	Repayment and Amortization of Loans; Evidence of Debt.	45
SECTION 2.11.	Prepayment of Loans	46
SECTION 2.12.	Fees.	47
SECTION 2.13.	Interest	48
SECTION 2.14.	Alternate Rate of Interest; Illegality.	49
SECTION 2.15.	Increased Costs.	50
SECTION 2.16.	Break Funding Payments.	51
SECTION 2.17.	Withholding of Taxes; Gross-Up	52
SECTION 2.18.	Payments Generally; Allocation of Proceeds; Sharing of Setoffs	53
SECTION 2.19.	Mitigation Obligations; Replacement of Lenders.	55
SECTION 2.20.	Defaulting Lenders	56
SECTION 2.21.	Returned Payments	58
SECTION 2.22.	Banking Services and Swap Agreements	59
ARTICLE III. Representations and Warranties		59
SECTION 3.01.	Organization; Powers	59
SECTION 3.02.	Authorization; Enforceability	59
SECTION 3.03.	Governmental Approvals; No Conflicts.	59
SECTION 3.04.	Financial Condition; No Material Adverse Change	60
SECTION 3.05.	Properties	60
SECTION 3.06.	Litigation and Environmental Matters.	60
SECTION 3.07.	Compliance with Laws and Agreements; No Default.	61
SECTION 3.08.	Investment Company Status.	61
SECTION 3.09.	Taxes.	61
SECTION 3.10.	ERISA	61
SECTION 3.11.	Disclosure.	61
SECTION 3.12.	Material Agreements	61
SECTION 3.13.	Solvency.	61

i

SECTION 3.14.	Insurance.	62
SECTION 3.15.	Capitalization and Subsidiaries.	62
SECTION 3.16.	Security Interest in Collateral	62
SECTION 3.17.	Employment Matters	62
SECTION 3.18.	Margin Regulations	62
SECTION 3.19.	Use of Proceeds	63
SECTION 3.20.	No Burdensome Restrictions	63
SECTION 3.21.	Anti-Corruption Laws and Sanctions	63
SECTION 3.22.	EEA Financial Institutions	63
SECTION 3.23.	Plan Assets; Prohibited Transactions	63
SECTION 3.24.	Affiliate Transactions.	63
SECTION 3.25.	Health Care Matters	63
SECTION 3.26.	Information Privacy or Security Laws	66
SECTION 3.27.	Managed Entity Owner Physicians	67
ARTICLE IV. Conditions		67
SECTION 4.01.	Effective Date	67
SECTION 4.02.	Each Credit Event.	70
ARTICLE V. Affirmative Covenants		70
SECTION 5.01.	Financial Statements; Borrowing Base and Other Information	70
SECTION 5.02.	Notices of Material Events.	72
SECTION 5.03.	Existence; Conduct of Business	73
SECTION 5.04.	Payment of Obligations.	73
SECTION 5.05.	Maintenance of Properties	73
SECTION 5.06.	Books and Records; Inspection Rights	73
SECTION 5.07.	Compliance with Laws and Material Contractual Obligations.	73
SECTION 5.08.	Use of Proceeds.	74
SECTION 5.09.	Accuracy of Information	74
SECTION 5.10.	Insurance	74
SECTION 5.11.	Casualty and Condemnation	74
SECTION 5.12.	Depository Banks	75
SECTION 5.13.	Additional Collateral; Further Assurances	75
SECTION 5.14.	Cash Management Systems	76
SECTION 5.15.	Health Care	77
SECTION 5.16.	Reportable Health Care Events	77
SECTION 5.17.	Managed Entities, Management Services Documents and Management Services Fees	78
SECTION 5.18.	JV Entity Accounts	79
SECTION 5.19.	Post-Closing Obligations	79
ARTICLE VI. Negative Covenants		80
SECTION 6.01.	Indebtedness	80
SECTION 6.02.	Liens	81
SECTION 6.03.	Fundamental Changes	82
SECTION 6.04.	Investments, Loans, Advances, Guarantees and Acquisitions	83
SECTION 6.05.	Asset Sales	84
SECTION 6.06.	Sale and Leaseback Transactions	85
SECTION 6.07.	Swap Agreements	85
SECTION 6.08.	Restricted Payments; Certain Payments of Indebtedness	85
SECTION 6.09.	Transactions with Affiliates	87
SECTION 6.10.	Restrictive Agreements	87
SECTION 6.11.	Amendment of Material Documents	87
SECTION 6.12.	Financial Covenants	88

ii

SECTION 6.13.	Intragroup Obligations	88
ARTICLE VII. Events of Default		89
SECTION 7.01.	Events of Default	89
ARTICLE VIII. The Administrative Agent		92
SECTION 8.01.	Authorization and Action	92
SECTION 8.02.	Administrative Agent’s Reliance, Indemnification, Etc.	94
SECTION 8.03.	Posting of Communications	95
SECTION 8.04.	The Administrative Agent Individually	96
SECTION 8.05.	Successor Administrative Agent	97
SECTION 8.06.	Acknowledgements of Lenders and Issuing Banks	98
SECTION 8.07.	Collateral Matters	98
SECTION 8.08.	Credit Bidding	99
SECTION 8.09.	Certain ERISA Matters	100
ARTICLE IX. Miscellaneous		102
SECTION 9.01.	Notices	102
SECTION 9.02.	Waivers; Amendments	104
SECTION 9.03.	Expenses; Indemnity; Damage Waiver	106
SECTION 9.04.	Successors and Assigns	108
SECTION 9.05.	Survival	111
SECTION 9.06.	Counterparts; Integration; Effectiveness; Electronic Execution	112
SECTION 9.07.	Severability	112
SECTION 9.08.	Right of Setoff.	112
SECTION 9.09.	Governing Law; Jurisdiction; Consent to Service of Process.	113
SECTION 9.10.	WAIVER OF JURY TRIAL.	113
SECTION 9.11.	Headings.	114
SECTION 9.12.	Confidentiality.	114
SECTION 9.13.	Several Obligations; Nonreliance; Violation of Law	115
SECTION 9.14.	USA PATRIOT Act	115
SECTION 9.15.	Disclosure	115
SECTION 9.16.	Appointment for Perfection	115
SECTION 9.17.	Interest Rate Limitation	115
SECTION 9.18.	No Fiduciary Duty, etc.	116
SECTION 9.19.	Marketing Consent	117
SECTION 9.20.	Acknowledgement and Consent to Bail-In of EEA Financial Institutions	117
SECTION 9.21.	Acknowledgement Regarding Any Supported QFCs	117
SECTION 9.22.	Judgment Currency	118
ARTICLE X. Loan Guaranty		119
SECTION 10.01.	Guaranty.	119
SECTION 10.02.	Guaranty of Payment	119
SECTION 10.03.	No Discharge or Diminishment of Loan Guaranty	119
SECTION 10.04.	Defenses Waived.	120
SECTION 10.05.	Rights of Subrogation	120
SECTION 10.06.	Reinstatement; Stay of Acceleration.	120
SECTION 10.07.	Information	121
SECTION 10.08.	Termination	121
SECTION 10.09.	Taxes.	121
SECTION 10.10.	Maximum Liability	121
SECTION 10.11.	Contribution	121
SECTION 10.12.	Liability Cumulative	122
SECTION 10.13.	Keepwell	122

iii

SCHEDULES:

Commitment Schedule

Schedule 1.01(A) – JV Entities

Schedule 1.01(B) – Products

Schedule 2.12 – Letter of Credit Fees

Schedule 3.05 – Properties, etc.

Schedule 3.06 – Disclosed Matters

Schedule 3.12 – Material Agreements

Schedule 3.14 – Insurance

Schedule 3.15(a) – Capitalization and Subsidiaries

Schedule 3.15(b) – Organization Chart

Schedule 3.24 – Affiliate Transactions

Schedule 3.25 – Health Care Matters

Schedule 6.01 – Existing Indebtedness

Schedule 6.02 – Existing Liens

Schedule 6.04 – Existing Investments

Schedule 6.10 – Existing Restrictions

EXHIBITS:

Exhibit A – Assignment and Assumption

Exhibit B-1 - Borrowing Request

Exhibit B-2 – Interest Election Request

Exhibit C – Compliance Certificate

Exhibit D – Joinder Agreement

iv

CREDIT AGREEMENT dated as of October 22, 2019(as it may be amended or modified from time to time, this “Agreement”), among CRH MEDICAL CORPORATION, as Borrower,the other Loan Parties party hereto, the Lenders party hereto, and JPMORGAN CHASE BANK, N.A., TORONTO BRANCH, as Administrative Agent.

PRELIMINARY STATEMENT

Whereas, to refinance certain outstanding credit facilities and to finance the ongoing general corporate purposes of the Borrower as further provided in this Agreement, the Borrower has requested that the Lenders extend credit to the Borrower in the form of Revolving Loans to the Borrower from time to time in an aggregate amount not to exceed $125,000,000; and

Whereas, in connection with the foregoing and as an inducement for the Lenders to extend the credit contemplated hereunder, (i) the Borrower has agreed to secure all of its Secured Obligations by granting to the Administrative Agent, for the benefit of the Lenders, a first priority lien on substantially all of the Borrower’s assets, including a pledge of all of the Equity Interests of certain Subsidiaries of the Borrower and (ii) the Guarantors have agreed to guarantee the Secured Obligations and to secure such guarantees by granting to the Administrative Agent, for the benefit of the Lenders, a first priority lien on substantially all of each Guarantor’s respective assets, including a pledge of all of the Equity Interests of certain of their respective Subsidiaries;

Now Therefore, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I

Definitions

SECTION 1.01.  Defined Terms .  As used in this Agreement, the following terms have the meanings specified below:

“Account” shall have the meaning set forth in Article 9 of the UCC.

“Account Debtor” means any Person obligated on an Account.

“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Effective Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Equity Interests of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Equity Interests having such power only by reason of the happening of a contingency) or a majority of the outstanding Equity Interests of a Person.

“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period or for any CBFR Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.

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51167637.4

“Adjusted One Month LIBOR Rate” means, for any day, an interest rate per annum equal to the sum of (i) 2.50% plus (ii) the Adjusted LIBO Rate for a one-month interest period on such day (or if such day is not a Business Day, the immediately preceding Business Day); provided thatfor the avoidance of doubt, the Adjusted LIBO Rate for any day shall be based on the LIBO Screen Rate at approximately 11:00 a.m. London time on such day; providedfurther, that if the LIBO Screen Rate at such time shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Administrative Agent” means JPMorgan Chase Bank, N.A., Toronto Branch, in its capacity as administrative agent for the Lenders hereunder.  

“Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the specified Person.

“Agent Indemnitee” has the meaning assigned to it in Section 9.03(c).

“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders at such time (with the Swingline Exposure of each Lender calculated assuming that all of the Lenders have funded their participations in all Swingline Loans outstanding at such time).

“Anti-Corruption Laws” means all laws, rules, and regulations of any jurisdiction applicable to the Borrower or any of its Subsidiaries from time to time concerning or relating to bribery or corruption, including, without limitation, the Corruption of Foreign Public Officials Act (Canada).

“Applicable Parties” has the meaning assigned to it in Section 8.03(c).

“Applicable Percentage” means, at any time with respect to any Lender, with respect to Revolving Loans, LC Exposure, or Swingline Loans, a percentage equal to a fraction the numerator of which is such Lender’s Revolving Commitment at such time and the denominator of which is the aggregate Revolving Commitments at such time (provided that if the Revolving Commitments have terminated or expired, the Applicable Percentages shall be determined based upon such Lender’s share of the Aggregate Revolving Exposure at such time); provided that in accordance with Section 2.20, so long as any Lender shall be a Defaulting Lender, such Defaulting Lender’s Revolving Commitment shall be disregarded in the calculations above.  

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51167637.4

“Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Revolving Commitment CBFRSpread”, “Revolving Commitment Eurodollar Spread”or “Commitment Fee Rate”, as the case may be, based upon the Total Leverage Ratio as of the most recent determination date, provided that until the delivery to the Administrative Agent, pursuant to Section 5.01, of the Borrower’s consolidated financial information for the Borrower’s first fiscal quarter ending after the Effective Date, the “Applicable Rate” shall be the applicable rates per annum set forth below in Category 2:

Total Leverage Ratio	Revolving Commitment CBFR Spread	Revolving Commitment Eurodollar Spread	Commitment Fee Rate
Category 1 > 2.00 to 1.0	0.75%	1.75%	0.35%
Category 2 < 2.00 to 1.0  but > 1.00 to 1.0	0.50%	1.50%	0.30%
Category 3 < 1.00 to 1.0	0.25%	1.25%	0.25%

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each fiscal quarter of the Borrower, based upon the annual or quarterly consolidated financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Total Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that at the option of the Administrative Agent or at the request of the Required Lenders, if the Borrower fails to deliver the annual or quarterly consolidated financial statements required to be delivered by it pursuant to Section 5.01, the Total Leverage Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines, acting reasonably, that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), the Borrower shall be required to retroactively pay any additional amount that the Borrower would have been required to pay if such financial statements had been accurate at the time they were delivered.

“Approved Electronic Platform” has the meaning assigned to it in Section 8.03(a).

“Approved Fund” has the meaning assigned to the term in Section 9.04(b).

“Arranger” means JPMorgan Chase Bank, N.A., in its capacity as sole bookrunner and sole lead arranger hereunder.

“Assignment and Assumption” means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form (including electronic records generated by the use of an electronic platform) approved by the Administrative Agent.

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51167637.4

“Available JV Entity Cash Flow” means, with respect to any JV Entity for each calendar month, the Borrower’s or other applicable Loan Party’s or applicable Subsidiary’s pro rata share of the amount equal to (i) all revenues and receipts from the conduct of the business of such JV Entity (excluding amounts contributed by the members of such JV Entity to the capital of such JV Entity and net of any refunds, credits, and similar adjustments) during such calendar month less the portion of such revenues and receipts used to pay (or, if determined in good faith as reasonably necessary by the directors, managers or members, as applicable, of such JV Subsidiary, reserved to pay) expenses and liabilities of such JV Entity during such calendar month (including, without limitation, tax withholdings or payments, debt payments, capital improvements and replacement and contingency payments, but excluding without limitation, depreciation, amortization, cost recovery deductions, or similar allowances).

“Availability” means, at any time, an amount equal to (a) the aggregate Revolving Commitments minus (b) the Aggregate Revolving Exposure.

“Availability Period” means the period from and including the Effective Date to but excluding the earlier of the Revolving Credit Maturity Date and the date of termination of the Revolving Commitments.

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“Banking Services” means each and any of the following bank services provided to any Loan Party or any Subsidiary by any Lender or any of its Affiliates: (a) credit cards for commercial customers (including, without limitation, “commercial credit cards” and purchasing cards), (b) stored value cards, (c) merchant processing services, and (d) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, any direct debit scheme or arrangement, overdrafts and interstate depository network services and cash pooling services).

“Banking Services Obligations” means any and all obligations of the Loan Parties or its Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.

“Bankruptcy Event” means, with respect to any Person, when such Person becomes the subject of a voluntary or involuntary bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business, appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment or has had any order for relief in such proceeding entered in respect thereof, provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof, unless such ownership interest results in or provides such Person with immunity from the jurisdiction of courts within the U.S. or Canada or from the enforcement of judgments or writs of attachment on its assets or permits such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.

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51167637.4

“Benefit Plan” means any of (a) an “employee benefit plan” (as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in Section 4975 of the Code to which Section 4975 of the Code applies, and (c) any Person whose assets include (for purposes of the Plan Asset Regulations or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.

“Borrower” means CRH Medical Corporation, a corporation incorporated under the laws of British Columbia.

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

“Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03, which shall be substantially in the form of Exhibit B-1 hereto or any other form approved by the Administrative Agent.

“Burdensome Restrictions” means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.10.

“Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City and in Vancouver, British Columbia are authorized or required by law to remain closed; provided that when used in connection with a Eurodollar Loan, the term “Business Day” shall also exclude any day on which banks are not open for general business in London.

“Capital Expenditures” means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases or financing leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“CB Floating Rate” means the Prime Rate; provided that the CB Floating Rate shall never be less than the Adjusted One Month LIBOR Rate on such day (or if such day is not a Business Day, the immediately preceding Business Day).  Any change in the CB Floating Rate due to a change in the Prime Rate or the Adjusted One Month LIBOR Rate shall be effective from and including the effective date of such change in the Prime Rate or the Adjusted One Month LIBOR Rate, respectively.

“CBFR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the CB Floating Rate.

“CHAMPVA” means the Civilian Health and Medical Program of the Department of Veterans Affairs, a program of medical benefits covering retirees and dependents of former members of the armed services administered by the United States Department of Veterans Affairs, and all Requirements of Law governing such program.

5

51167637.4

“Change in Control” means (a)the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the SEC thereunder as in effect on the date hereof), of Equity Interests representing more than 35%of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Borrower, (b) occupation at any time of a majority of the seats (other than vacant seats) on the board of directors of the Borrower by Persons who were not (i) directors of the Borrower on the date of this Agreement, nominated, appointed or approved for consideration by shareholders for election by the board of directors of the Borrower or (ii) appointed by directors so nominated, appointed or approved or (c) the Borrower shall cease to own, free and clear of all Liens (other than in favor of Administrative Agent) or other encumbrances, at least 51% of the outstanding voting Equity Interests of each Subsidiary (other than JV Entities) of the Borrower on a fully diluted basis.

“Change in Law” means the occurrence after the date of this Agreement (or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement) of any of the following: (a) the adoption of 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 or application thereof by any Governmental Authority or (c) compliance by any Lender or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline, requirement or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the U.S. or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted, issued or implemented.

“Charges” has the meaning assigned to such term in Section 9.17.

“Chase” means JPMorgan Chase Bank, N.A., Toronto Branch, an authorized foreign branch of JPMorgan Chase Bank, N.A., a national banking association, in its individual capacity, and its successors.

“Class”, when used in reference to (a) any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans and (b) any Lender, refers to whether such Lender has a Loan of a particular Class.

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

“Collateral” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be, become or be intended to be, subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders and other Secured Parties, to secure the Secured Obligations.

“Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the Administrative Agent, between the Administrative Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any real property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, supplemented or otherwise modified from time to time.

6

51167637.4

“Collateral Documents” means, collectively, each Security Agreement and any other agreements, control agreements, instruments and documents executed in connection with this Agreement that are intended to create, perfect or evidence Liens to secure the Secured Obligations, including, without limitation, all other security agreements, confirmations of security interests in intellectual property, pledge agreements, mortgages, deeds of trust, loan agreements, notes, guarantees, subordination agreements, pledges, powers of attorney, consents, assignments, notices,financing statements, collateral assignments of the Management Services Documents to which any Loan Party is a party thereto, and all other written matter whether theretofore, now or hereafter executed by any Loan Party and delivered to the Administrative Agent.

“Commitment Schedule” means the Schedule attached hereto identified as such.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Communications” has the meaning assigned to such term in Section 8.03(c).

“Compliance Certificate” has the meaning assigned to such term in Section 5.01(c) hereof.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

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

“Controlled Deposit Account” has the meaning assigned to such term in Section 5.14(b).

“Corporate Practice of Medicine Laws” means any Requirements of Law (i) that prohibit any Person other than licensed physicians or entities whose equity interests are owned exclusively by licensed physicians from practicing medicine or employing licensed physicians to provide professional medical services, (ii) relating to the compensation relationship between a Loan Party or a Subsidiary and a Managed Entity, (iii) relating to physician fee-splitting prohibitions, or (iv) relating to the ownership and operation of professional corporations or professional limited liability companies.

“Credit Party” means the Administrative Agent, the Issuing Bank, the Swingline Lender or any other Lender.

“CRH Anesthesia” means CRH Anesthesia Management, LLC, a Delaware limited liability company and wholly-owned indirect Subsidiary of the Borrower.

“CRH Delaware” means CRH Medical Corporation, a Delaware corporation and wholly-owned direct Subsidiary of the Borrower.

“CRH GAA” means CRH GAA, PLLC, a Texas professional limited liability company all the Equity Interests of which are directly owned by [REDACTED].

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

7

51167637.4

“Defaulting Lender” means any Lender that (a) has failed, within two (2) Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or Swingline Loansor (iii) pay over to any Credit Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Credit Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied) or generally under other agreements in which it commits to extend credit, (c) has failed, within three (3) Business Days after request by a Credit Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit and Swingline Loans under this Agreement, provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Credit Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has become the subject of (i) a Bankruptcy Event or (ii) a Bail-In Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.

“Disclosed Matters” means the actions, suits, proceedings and environmental matters disclosed in Schedule 3.06.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any property by any Person (including any sale and leaseback transaction and any issuance of Equity Interests by a Subsidiary of such Person), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

“Disqualified Equity Interest” shall mean any Equity Interest that, by its terms or upon the happening of any event or condition, (a) matures or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise, (b) is redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests), in whole or in part, (c) provides for the scheduled payment of interest, dividends or other distributions in cash or (d) is or becomes convertible into or exchangeable for Indebtedness or any other Equity Interest that would constitute Disqualified Equity Interests, in each case, prior to the date that is one hundred eighty (180) days after the latest date on which any Loan matures.

“Dividing Person” has the meaning assigned to it in the definition of “Division.”

“Division” means the division of the assets, liabilities and/or obligations of a Person (the “Dividing Person”) among two or more Persons (whether pursuant to a “plan of division” or similar arrangement), which may or may not include the Dividing Person and pursuant to which the Dividing Person may or may not survive.

8

51167637.4

“Division Successor” means any Person that, upon the consummation of a Division of a Dividing Person, holds all or any portion of the assets, liabilities and/or obligations previously held by such Dividing Person immediately prior to the consummation of such Division.  A Dividing Person which retains any of its assets, liabilities and/or obligations after a Division shall be deemed a Division Successor upon the occurrence of such Division.

“dollars” or “$” refers to lawful money of the U.S.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States (but excluding any territory or possession thereof).

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Net Finance Expense for such period, (ii) Income Tax Expense for such period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period, (v) any other non-cash charges for such period, including stock-based compensation (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory), and (vi) costs and expenses incurred in connection with permitted acquisitions in an aggregate amount not to exceed $[REDACTED] during such period, minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period and (ii) any extraordinary gains and any non-cash items of income for such period, all calculated for the Loan Parties and their Subsidiaries on a consolidated basis in accordance with GAAP, minus (c) the difference between (i) EBITDA attributable to Subsidiaries that are not Loan Parties and JV Entities during such period, and (ii) cash distributions received by the Borrower from such Subsidiaries that are not Loan Parties and JV Entities during such period (if such difference shall be negative, the amount shall be deemed to be zero for the purposes of this clause (c)).

“ECP” means an “eligible contract participant” as defined in Section 1(a)(18) of the Commodity Exchange Act or any regulations promulgated thereunder and the applicable rules issued by the Commodity Futures Trading Commission and/or the SEC.

“EEA Financial Institution” means (a) any institution established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any Person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“Effective Date” means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).

“Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.

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51167637.4

“Electronic System” means any electronic system, including e-mail, e-fax, web portal access for the Borrower and any other Internet or extranet-based site, whether such electronic system is owned, operated or hosted by the Administrative Agent or the Issuing Bank and any of its respective Related Parties or any other Person, providing for access to data protected by passcodes or other security system.

“Environmental Laws” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to (i) the environment, (ii) preservation or reclamation of natural resources, (iii) the management, Release or threatened Release of any Hazardous Material or (iv) health and safety matters.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) any violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) any exposure to any Hazardous Materials, (d) the Release or threatened Release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or Section 4001(14) of ERISA or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.

“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder, with respect to a Plan (other than an event for which the 30‑day notice period is waived); (b) the failure to satisfy the “minimum funding standard” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 302(c) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any ERISA Affiliate of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any ERISA Affiliate of any liability with respect to the withdrawal or partial withdrawal of the Borrower or any ERISA Affiliate from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition upon the Borrower or any ERISA Affiliate of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent, in critical status or in reorganization, within the meaning of Title IV of ERISA.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.  

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“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, bear interest at a rate determined by reference to the Adjusted LIBO Rate.

“Event of Default” has the meaning assigned to such term in Article VII.

“Excluded Account” has the meaning assigned to such term in Section 5.14.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an ECP at the time the Guarantee of such Guarantor or the grant of such security interest becomes or would become effective with respect to such Swap Obligation.  If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Revolving Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit or Revolving Commitment (other than pursuant to an assignment request by the Borrower under Section 2.19(b))or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 2.17, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender acquired the applicable interest in a Loan, Letter of Credit or Revolving Commitment or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 2.17(f) and (d) any withholding Taxes imposed under FATCA or Part XIII of the Income Tax Act (Canada).

“Existing CRH GAA Indebtedness” means Indebtedness incurred by CRH GAA under the Promissory Note and Security Agreement dated as of May 31, 2016 between CRH GAA, as borrower and CRH Delaware, as lender, as amended prior to the Effective Date and as may be amended from time to time thereafter as permitted under this Agreement.

“Existing GAA Indebtedness” means Indebtedness incurred by GAA under the Promissory Note and Security Agreement dated as of December 1, 2014 between GAA, as borrower and CRH Delaware, as lender, as amended prior to the Effective Date and as may be amended from time to time thereafter as permitted under this Agreement.

“Existing Intercompany Indebtedness” means, collectively, the Existing CRH GAA Indebtedness, the Existing GAA Indebtedness and the Existing [REDACTED] Indebtedness; provided that notwithstanding anything in any agreement for any Existing Intercompany Indebtedness, in no event shall CRH Delaware assign any of its rights, title or interest under any Existing Intercompany Indebtedness to any Person other than to the Administrative Agent for the benefit of the Secured Parties.

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“Existing [REDACTED] Indebtedness” means Indebtedness incurred by CRH GAA under the Promissory Note and Security Agreement dated as of December 1, 2014 between [REDACTED], as borrower and CRH Delaware, as lender, as amended prior to the Effective Date and as may be amended from time to time thereafter as permitted under this Agreement.

“FATCA” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreement entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.    

“FDA” means the U.S. Food and Drug Administration and any successor entity.

“FDA Laws” means all applicable statutes, rules, regulations, standards, guidelines, policies and orders administered or issued by the FDA (including without limitation, the FDCA), Health Canada (including, without limitation, the Food and Drugs Act (Canada) and the Food and Drug Regulations (Canada)) or any other foreign Governmental Authority responsible for drug and health product safety having jurisdiction over the Borrower, a Subsidiary or a Managed Entity.

“FDCA” means the Federal Food, Drug, and Cosmetic Act of 1938, or any successor statute thereto, and the regulations, guidelines, guidance documents, and compliance policy guides issued or promulgated thereunder.

“Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as the NYFRB shall set forth on its public website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate, provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.

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

“Financial Officer” means the chief financial officer, principal accounting officer, treasurer or controller of the Borrower.

“Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.  

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

“Funding Account” has the meaning assigned to such term in Section 4.01(h).

“GAA” means Gastroenterology Anesthesia Associates, LLC, a Georgia limited liability company and a wholly-owned direct Subsidiary of [REDACTED].  

“GAA Earn Out” means earn out amounts payable by GAA to [REDACTED] in connection with the acquisition of the assets of [REDACTED], when such amounts are earned.

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“GAAP” means generally accepted accounting principles in the U.S.

“Governmental Authority” means the government of the U.S., any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.  “Governmental Authority” shall include any agency, branch or other governmental body (federal, state or provincial) charged with the responsibility, or vested with the authority to administer or enforce, any Health Care Laws.

“Governmental Payor Program” means any “federal health care program” as defined in 42 U.S.C. § 1320a-7b(f), which includes (as applicable) Medicare, Medicaid, TRICARE, CHAMPVA and any “state health care program” as defined in 42 U.S.C. §1320a-7(h).

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.

“Guaranteed Obligations” has the meaning assigned to such term in Section 10.01.

“Guarantors” means all Loan Guarantors and all non-Loan Parties who have delivered an Obligation Guaranty, and the term “Guarantor” means each or any one of them individually.

“Hazardous Materials” means:  (a) any substance, material, or waste that is included within the definitions of “hazardous substances,” “hazardous materials,” “hazardous waste,” “toxic substances,” “toxic materials,” “toxic waste,” or words of similar import in any Environmental Law; (b) those substances listed as hazardous substances by the United States Department of Transportation (or any successor agency) (49 C.F.R. 172.101 and amendments thereto) or by the Environmental Protection Agency (or any successor agency) (40 C.F.R. Part 302 and amendments thereto); and (c) any substance, material, or waste that is petroleum, petroleum-related, or a petroleum by-product, asbestos or asbestos-containing material, polychlorinated biphenyls, flammable, explosive, radioactive, freon gas, radon, or a pesticide, herbicide, or any other agricultural chemical.

“Health Care Compliance Program” has the meaning assigned to such term in Section 3.25(k).

“Health Care Laws” means, to the extent applicable to a Loan Party, Subsidiary or Managed Entity, all Requirements of Law relating in any way to (a) the provision of, or payment for, health care services, items or supplies; (b) health care fraud and abuse, including, the following statutes, as amended and in effect from time to time, and any successor statutes thereto and the regulations promulgated thereunder: the federal Anti-Kickback Statute (42 U.S.C. § 1320a7b(b)), the federal Stark Law (42 U.S.C. § 1395nn and §1395(q)), the federal civil False Claims Act (31 U.S.C. § 3729 et seq.); the federal Civil Monetary Penalties Law (42 U.S.C. § 1320a-7a); the federal Exclusions Law (42 U.S.C. §1320a-7b); the federal Health Care Fraud Law (18 U.S.C. §1347), the Medicare Prescription Drug, Improvement, and

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Modernization Act of 2003 (Pub. L. No. 108173), the Criminal Code (Canada) and the Medicare Protection Act (British Columbia) and other legal requirements relating to self-referral, anti-kickback, illegal remuneration, fraud and abuse or the defrauding of or making of any false claim, false statement or misrepresentation of material facts to any Third Party Payor Program; (c) the billing, coding or submission of health care claims to any Third Party Payor Program for reimbursement; (d) the licensure and registration of third party administrators, health care providers and health care facilities; (e) Information Privacy or Security Laws; (f) Corporate Practice of Medicine Laws; (g) health planning or rate setting, including certificate of need requirements; (h) the provision of free or discounted health care services; (i) the manufacture, sale, marketing, promotion, storage, prescription or handling of medical devices and any other FDA-regulated products, including FDA Laws and all applicable rules and requirements of the FDA or theU.S. Drug Enforcement Administration and the U.S. Food & Drug Administration; (j) all applicable professional standards regulating medical device manufacturers; (k) pharmacy or clinical laboratory operations, including the Clinical Laboratory Improvement Amendments, (l) the federal Physician Sunshine Act; and (m) the disposal of medical waste.

“Health Care Permits” means, any permit, approval, consent, authorization, license, provisional license, registration, certificate, certification, certificate of need, qualification, operating authority, concession, grant, franchise, variance or permission from any Governmental Authority required under applicable Health Care Laws.

“HIPAA” means the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations, as amended by the Health Information Technology for Economic and Clinical Health Act (Title XIII of the American Recovery and Reinvestment Act of 2009), and as the same may be further amended, modified or supplemented from time to time.

“IFRS” means the body of pronouncements issued by the International Accounting Standards Board (“IASB”), including International Financial Reporting Standards and interpretations approved by the IASB, International Accounting Standards and Standing Interpretations Committee interpretations approved by the predecessor International Accounting Standards Committee and adapted for use in the European Union.

“Impacted Interest Period” has the meaning assigned to such term in the definition of “LIBO Rate.”

“Income Tax Expense” means, with reference to any period, total income tax expense for such period, net of tax refunds, calculated for the Loan Parties and their Subsidiaries on a consolidated basis for such period in accordance with GAAP.

“Indebtedness” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any earn-out (which for all purposes of

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this Agreement shall be valued in accordance with GAAP), (l) any other Off-Balance Sheet Liability, and (m) obligations, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (i) any and all Swap Agreements, and (ii) any and all cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in the foregoing clause (a), Other Taxes.

“Indemnitee” has the meaning assigned to such term in Section 9.03(b).

“Ineligible Institution” has the meaning assigned to such term in Section 9.04(b).

“Information” has the meaning assigned to such term in Section 9.12.

“Information Privacy or Security Laws” means HIPAA and any other Requirement of Law concerning the privacy or security of personal information, including state data breach notification laws, state health information privacy laws, and state consumer protection laws.

“Interest Coverage Ratio” means, for any period, the ratio of (a) EBITDA for such period to (b) Paid Cash Interest for such period; provided that solely for purposes of Section 6.12(a), to the extent the Borrower or any Subsidiary makes any permitted acquisition or permitted disposition during the period of four fiscal quarters of the Borrower most recently ended, the Interest Coverage Ratio (including, without limitation, the calculation of EBITDA and Net Income used therein) shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or disposition that are factually supportable and are expected to have a continuing impact, determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition or disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four quarter period.

“Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.08, which shall be substantially in the form of Exhibit B-2 hereto or any other form approved by the Administrative Agent.

“Interest Payment Date” means (a) with respect to any CBFR Loan (other than a Swingline Loan), the first day of each calendar month and the Revolving Credit Maturity Date, (b) with respect to any Eurodollar Loan, the last day of each Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period and the Revolving Credit Maturity Date, and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Revolving Credit Maturity Date.

“Interest Period” means with respect to any Eurodollar Borrowing, the period commencing on the date of such Eurodollar Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the Borrower may elect; provided that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii)

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any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period.  For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

“Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period (for which the LIBO Screen Rate is available) that is shorter than the Impacted Interest Period and (b) the LIBO Screen Rate for the shortest period (for which the LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time;  provided that if any Interpolated Rate shall be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.  

“Intragroup Obligations” means all present and future debts, liabilities and obligations of any kind owing or remaining unpaid by any Loan Party to another Loan Party, including, without limitation, under the Existing Intercompany Indebtedness.

“Inventory” shall have the meaning set forth in Article 9 of the UCC.

“IRS” means the United States Internal Revenue Service.

“Issuing Bank” means, individually and collectively, each of Chase, in its capacity as the issuer of Letters of Credit hereunder and any other Revolving Lender from time to time designated by the Borrower as an Issuing Bank, with the consent of such Revolving Lender and the Administrative Agent, and their respective successors in such capacity as provided in Section 2.06(i).  Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by its Affiliates, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate (it being agreed that such Issuing Bank shall, or shall cause such Affiliate to, comply with the requirements of Section 2.06 with respect to such Letters of Credit).  At any time there is more than one Issuing Bank, all singular references to the Issuing Bank shall mean any Issuing Bank, either Issuing Bank, each Issuing Bank, the Issuing Bank that has issued the applicable Letter of Credit, or both (or all) Issuing Banks, as the context may require.

“Issuing Bank Sublimit” means, as of the Effective Date, (i) $[REDACTED], in the case of Chase and (ii) such amount as shall be designated to the Administrative Agent and the Borrower in writing by an Issuing Bank; provided that any Issuing Bank shall be permitted at any time to increase or reduce its Issuing Bank Sublimit upon providing five (5) days’ prior written notice thereof to the Administrative Agent and the Borrower.

“Joinder Agreement” means a Joinder Agreement in substantially the form of Exhibit D.

“JV Entity” means (i) any entity set forth on Schedule 1.01(A) attached hereto, and (ii) any other entity formed by a Loan Party or Subsidiary or acquired pursuant to a Permitted Acquisition and in each case under this clause (ii) designated by the Borrower as a JV Entity and in which the Loan Parties directly or indirectly own or control a majority (but not all) of the Equity Interests. For the avoidance of doubt, any entity characterized or designated under this Agreement as a JV Entity or a Subsidiary may also be characterized or designated as a Managed Entity; provided however that in no event shall any of the Equity Interests in such a JV Entity also characterized or designated as a Managed Entity (if any) be owned by a Loan Party.

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“JV EntityDocument” and “JV EntityDocuments” means individually or collectively, as applicable, theorganizational documents for each JV Entity, and any and all stock transfer restriction agreements,equity transfer restriction agreements, shareholder agreements and similar agreements affecting orrelating to the equity interests of each respective JV Entity.

“JV Entity Permitted Debt” means:

(a)unsecured working capital loans used to finance the day to day operations of a JV Entity, provided that the aggregate amount of such loans does not exceed $[REDACTED] per JV Entity;

(b)Indebtedness of a JV Entity under or in connection with unsecured short term intercompany loans made available to a JV Entity by a Loan Party for initial working capital purposes following the Permitted Acquisition of such JV Entity:

(i)with a maturity date of no more than the earlier of one hundred and twenty days (120) from the date of advance of such loan and the closing date of the Permitted Acquisition;

(ii)whereby payment obligations, when aggregated with any similar Indebtedness of any other JV Entity owing to the Loan Parties, do not exceed $[REDACTED] in any fiscal year of the Borrower; and

(iii)such Indebtedness is not entered into when a Default has occurred and is continuing, or a Default would occur as a result of the same; and

(c)other Indebtedness of a JV Entity expressly consented to by the Administrative Agent in writing.

“LC Collateral Account” has the meaning assigned to such term in Section 2.06(j).

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

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

“Lenders” means the Persons listed on the Commitment Schedule and any other Person that shall have become a Lender hereunder pursuant to Section 2.09 or an Assignment and Assumption or otherwise, other than any such Person that ceases to be a Lender hereunder pursuant to an Assignment and Assumption or otherwise.  Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender and the Issuing Bank.

“Letters of Credit” means the letters of credit issued pursuant to this Agreement, and the term “Letter of Credit” means any one of them or each of them singularly, as the context may require.

“Letter of Credit Agreement” has the meaning assigned to it in Section 2.06(b).

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“LIBO Rate” means, with respect to any Eurodollar Borrowing for any applicable Interest Period or for any CBFR Borrowing, the LIBO Screen Rate at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period; provided that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”), then the LIBO Rate shall be the Interpolated Rate, subject to Section 2.14 in the event that the Administrative Agent shall conclude that it shall not be possible to determine such Interpolated Rate (which conclusion shall be conclusive and binding absent manifest error).  Notwithstanding the above, to the extent that “LIBO Rate” or “Adjusted LIBO Rate” is used in connection with a CBFR Borrowing, such rate shall be determined as modified by the definition of Adjusted One Month LIBOR Rate.

“LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for any Interest Period or for any CBFR Borrowing, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for Dollars) for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion); provided that if the LIBO Screen Rate as so determined would be less than zero, such rate shall be deemed to zero for the purposes of this Agreement.

“Licensed Providers” means any Person required to hold a Health Care Permit or professional license to practice such Person’s profession (including any physician, physician assistant or nurse) and who is engaged in the delivery of professional Medical Services for or on behalf of any Loan Party, Subsidiary or Managed Entity, whether engaged as employees, leased personnel or independent contractors.

“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.

“Liquidity” means, on any date the same is to be determined, the sum of (i) Availability, plus (ii) Unrestricted Cash.

“Loan Documents” means, collectively, this Agreement, each promissory note issued pursuant to this Agreement, each Letter of Credit Agreement, each Collateral Document, the Loan Guaranty, any Obligation Guaranty and each other agreement, instrument, document and certificate identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lender and including each other pledge, power of attorney, consent, assignment, contract, notice, letter of credit agreement, letter of credit applications and any agreements between the Borrower and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations between the Borrower and the Issuing Bank in connection with the issuance of Letters of Credit.  Any reference in this Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to this Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.

“Loan Guarantor” means each Loan Party.

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“Loan Guaranty” means Article X of this Agreement.

“Loan Parties” means, collectively, (i) the Borrower and the Borrower’s Domestic Subsidiaries (other than the JV Entities), (ii) [REDACTED]., CRH GAA and NC GAA, P.C. and each of their respective Domestic Subsidiaries (other than the JV Entities) and (iii) and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement in accordance with Section 5.13 and their respective successors and assigns, and the term “Loan Party” shall mean any one of them or all of them individually, as the context may require.

“Loans” means the loans and advances made by the Lenders pursuant to this Agreement, including, without limitation, Swingline Loans.

“Managed Entity” means any Person (other than a Loan Party or a Subsidiary of a Loan Party) that is engaged in the delivery of health care services to patients, including without limitation any health care clinic, practice or ambulatory surgery center, or Person (other than a Loan Party or a Subsidiary of a Loan Party) owning or operating any such Person, for which a Loan Party or any of its Subsidiaries performs management, administrative and/or business services pursuant to Management Services Documents, whether now in effect or entered into after the Effective Date as permitted by this Agreement, and in each case from whom the total management services fees (or other similar fees and revenue) collected by the Loan Parties and any other Subsidiaries are or are reasonably likely to be (as reasonably determined by the Loan Parties and their Subsidiaries) at least $[REDACTED] in any fiscal year of the Borrower.  

“Managed Entity Owner Agreements” means any stock transfer restriction agreement, nominee owner agreement, business continuity agreement or other similar agreement between a Loan Party and each physician owner of a Managed Entity which receives management services from such Loan Party pursuant to a Management Services Agreement.

“Managed Entity Security Agreements” means, to the extent ever applicable, any deficit funding loan agreements, security agreement, or other similar agreements, documents and instruments between a Managed Entity and a Loan Party which provides management services to such Managed Entity, pursuant to which the Managed Entity provides, as security for all or any portion of its obligations and liabilities under any Management Services Agreement or deficit funding loan agreement to which it is a party with any Loan Party, a Lien on its assets in favor of such Loan Party.

“Management Services Agreements” means any management agreement or other management services agreement, administrative services agreement or similar agreement entered into between or among any Loan Party or any Managed Entity, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“Management Services Document Termination Event” means the occurrence of any event that allows any party to such Management Services Document the right to terminate such agreement.

“Management Services Documents” means, collectively, (1) the Management Services Agreements, (2) Managed Entity Security Agreements, (3) the Managed Entity Owner Agreements, and (4) any other agreement(s) which sets forth any administrative, management, or support services arrangements, or any funding or financing arrangements between a Loan Party or a Subsidiary and any Managed Entity, whether executed and delivered on or after the Effective Date, and all other agreements, documents and instruments executed and delivered pursuant thereto or in connection therewith and to which Loan Party or any of its Subsidiaries is a party, all of the foregoing as shall be reasonably acceptable in form and substance to the Administrative Agent and as may be amended, restated or otherwise modified from time to time as permitted by the terms of this Agreement.

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“Margin Stock” means margin stock within the meaning of Regulations T, U and X, as applicable.

“Material” means (except when used as part of another term defined in a Loan Document), with reference to the matter, condition or circumstance described as Material, that it would reasonably be considered a relevant factor by a prudent lender in connection with its extension of credit to a borrower or other obligor, and “Materially” has a corresponding meaning.

“Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or financial condition of the Borrower and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the Loan Documents to which it is a party or (c) the Administrative Agent’s Liens (on behalf of itself and the other Secured Parties) on the Collateral or the priority of such Liens.

“Material Agreement” means:

(a)any agreement or contract that is listed on Schedule 3.12;

(b)any agreement or contract representing Material Indebtedness; and

(c)any other contract to which any Loan Party is a party that, if breached, terminated or expired, would have a Material Adverse Effect.

“Material Indebtedness” means Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Loan Parties in an aggregate principal amount exceeding $[REDACTED].  For purposes of determining Material Indebtedness, the “principal amount” of the obligations of the Loan Parties in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that such Loan Party would be required to pay if such Swap Agreement were terminated at such time.

“Maximum Rate” has the meaning assigned to such term in Section 9.17.

“Medicaid” means the medical assistance program established by Title XIX of the Social Security Act (42 U.S.C. 1396 et seq.), as the same may be amended, modified or supplemented from time to time, and all Requirements of Law governing such program.

“Medical Services” means medical and health care services provided to a natural person by Licensed Providers for a valid and proper medical or health purpose.

“Medicare” means the health insurance program for the aged and disabled established by Title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.), as the same may be amended, modified or supplemented from time to time, and all Requirements of Law governing such program.

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

“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

“Net Finance Expense” means, with reference to any period, the aggregate of (a) total interest expense (including that attributable to Capital Lease Obligations) of the Loan Parties and their Subsidiaries for such period with respect to all outstanding Indebtedness of the Loan Parties and their Subsidiaries (including all commissions, discounts, and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), (b) total

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accretion expense related to any deferred consideration owing by theLoan Parties and their Subsidiaries (including any earn-out obligations), (c) total fair value adjustments related to changes inany earn-out obligations of the Loan Parties and their Subsidiaries, and (d) total amortization expense related to deferredfinancing fees of the Loan Parties and their Subsidiaries, all as calculated for the Loan Parties and their Subsidiaries on a consolidated basis for suchperiod in accordance with GAAP.

“Net Income” means, for any period, the consolidated net income (or loss) determined for the Loan Parties and their Subsidiaries, on a consolidated basis in accordance with GAAP; provided that there shall be excluded (a) the income (or deficit) of any Person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with any Loan Party or Subsidiary, (b) the income (or deficit) of any Person (other than a Subsidiary) in which a Loan Party or any Subsidiary has an ownership interest, except to the extent that any such income is actually received by a Loan Party or any Subsidiary in the form of dividends or similar distributions, and (c) the undistributed earnings of any Subsidiary or JV Entity, to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary or JV Entity is not at the time permitted by the terms of any contractual obligation (other than under any Loan Document) or Requirement of Law applicable to such Subsidiary or JV Entity.

“Net Proceeds” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards in cash and similar payments, minus (b) the sum of (i) all fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event (including break funding costs and other similar expenses) and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case in respect of (a) and (b) above during the year that such event occurred and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).

“Non-Consenting Lender” has the meaning assigned to such term in Section 9.02(d).

“NYFRB” means the Federal Reserve Bank of New York.

“NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day(or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined would be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.

“Obligated Party” has the meaning assigned to such term in Section 10.02.

“Obligation Guaranty” means any Guarantee of all or any portion of the Secured Obligations executed and delivered to the Administrative Agent for the benefit of the Secured Parties by a guarantor who is not a Loan Party.

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“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest and fees accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Loan Parties to any of the Lenders, the Administrative Agent, the Issuing Bank or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under this Agreement or any of the other Loan Documents or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation 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 balance sheet of such Person (other than operating leases).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Taxes (other than a connection arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to, or enforced, any Loan Document, or sold or assigned an interest in any Loan, Letter of Credit, or any Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 2.19).

“Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowings by U.S.-managed banking offices of depository institutions (as such composite rate shall be determined by the NYFRB as set forth on its public website from time to time) and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.

“Paid Cash Interest” means, with reference to any period, total interest expense (including that attributable to Capital Lease Obligations) of the Loan Parties and their Subsidiaries paid in cash for such period with respect to all outstanding Indebtedness of the Loan Parties and their Subsidiaries (including all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptances and net costs under Swap Agreements in respect of interest rates, to the extent such net costs are allocable to such period in accordance with GAAP), calculated for the Loan Parties and their Subsidiaries on a consolidated basis for such period in accordance with GAAP.

“Paid in Full” or “Payment in Full” means, (i) the indefeasible payment in full in cash of all outstanding Loans and LC Disbursements, together with accrued and unpaid interest thereon, (ii) the termination, expiration, or cancellation and return of all outstanding Letters of Credit (or alternatively,

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with respect to each such Letter of Credit, the furnishing to the Administrative Agent of a cash deposit, or at the discretion of the Administrative Agent a backup standby letter of credit satisfactory to the Administrative Agent and the Issuing Bank, in an amount equal to 105% of the LC Exposure as of the date of such payment), (iii) the indefeasible payment in full in cash of the accrued and unpaid fees and expenses hereunder, (iv) the indefeasible payment in full in cash of all reimbursable expenses and other Secured Obligations (other than Unliquidated Obligations for which no claim has been made and other obligations expressly stated to survive such payment and termination of this Agreement), together with accrued and unpaid interest thereon, (v) the termination of all Revolving Commitments, and (vi) the termination of the Swap Agreement Obligations and the Banking Services Obligations or entering into other arrangements satisfactory to the Secured Parties counterparties thereto.

“Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.

“Participant” has the meaning assigned to such term in Section 9.04(c).

“Participant Register” has the meaning assigned to such term in Section 9.04(c).

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.

“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:

(a) if applicable, such Acquisition is not a hostile or contested acquisition;

(b)the business acquired in connection with such Acquisition is (i) located in the U.S. or Canada, (ii) organized under applicable U.S. or Canadian and state or provincial or federal laws, as the case may be, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Effective Date and any business activities that are substantially similar or reasonably related thereto;

(c)both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, (i) each of the representations and warranties in Article III of this Agreement is true and correct in all Material respects (or in all respects if such representation or warranty is otherwise qualified by materiality or a similar concept), except for (A) any such representation or warranty which relates to a specified prior date and (B) to the extent the Administrative Agent has been notified in writing by the Loan Parties that any representation or warranty is not correct as provided above and the Administrative Agent has, in its sole discretion, waived in writing (which may be by email) compliance with such representation or warranty), and (ii) no Default exists, will exist, or would result therefrom;

(d)the Borrower has provided the Administrative Agent notice of such Acquisition, and for any Acquisition involving total consideration (including the maximum potential total amount of all deferred payment obligations (including earn-outs) and similar vendor-related Indebtedness assumed or incurred in connection with such Acquisition) in excess of $5,000,000, upon the reasonable request of the Administrative Agent, the Borrower has provided the Administrative Agent a copy of all business and financial information reasonably requested by the Administrative Agent and reasonably available to the Loan Parties (if any), including a copy of the draft acquisition documents, pro forma financial statements and statements of cash flow (it being understood that to the extent such financial information (if any) is not reasonably available to the Loan Parties fourteen (14) days prior to such Acquisition but becomes available to the Loan

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Partiesthereafter, the Borrower shall be deemed to have complied with this clauseso long as it promptly provides such financial information to the Administrative Agent after its receipt thereof);

(e)if such Acquisition is an acquisition of the Equity Interests of a Person, such Acquisition is structured so that the acquired Person shall become either (i) a Loan Party and a wholly-owned Subsidiary of the Borrower or other Loan Party pursuant to the terms of this Agreement or (ii) a JV Entity in which any Loan Party owns or controls a majority of the voting Equity Interests in such JV Entity;

(f)if such Acquisition is an acquisition of Equity Interests, such Acquisition will not result in any violation of Regulation U;

(g)if such Acquisition involves a merger or a consolidation involving the Borrower or any other Loan Party, the Borrower or such Loan Party, as applicable, shall be the surviving entity;

(h)no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;

(i)in connection with an Acquisition of the Equity Interests of any Person, all Liens on property of such Person, other than Permitted Encumbrances and Liens permitted by Section 6.02(e) hereof, shall be terminated unless the Administrative Agent and the Lenders in their sole discretion consent otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;

(j)for any Acquisition involving total consideration (including the maximum potential total amount of all deferred payment obligations (including earn-outs) and similar vendor-related Indebtedness assumed or incurred in connection with such Acquisition) in excess of $[REDACTED], the Borrower shall certify to the Administrative Agent (and provide the Administrative Agent with a pro forma calculation in form and substance reasonably satisfactory to the Administrative Agent) that, after giving effect to the completion of such Acquisition (including total consideration, debt, costs and expenses and the maximum amount of all earn-out obligations and other contingent obligations), the Borrower will be in compliance, on a pro forma basis, with the financial covenants contained in Section 6.12(a) and (b);

(k)the total consideration (including the maximum potential total amount of all deferred payment obligations (including earn- outs) and similar vendor-related Indebtedness assumed or incurred in connection with such Acquisition) for any Acquisition shall not exceed $[REDACTED];

(l)the Borrower shall have delivered to the Administrative Agent the final executed documentation relating to such Acquisition as soon as practicable prior to or upon the consummation thereof; and

(m)for any Acquisition involving total consideration (including the maximum potential total amount of all deferred payment obligations (including earn-outs) and similar vendor-related Indebtedness assumed or incurred in connection with such Acquisition) in excess of $[REDACTED], to the extent received by a Loan Party, promptly after receipt by such Loan Party, such Loan Party has provided to the Administrative Agent copies of any legal health care regulatory due diligence report or summary relating to such due diligence review, in each case to the extent deemed necessary by the Borrower, subject to execution and delivery by the Administrative Agent of customary non-reliance letters and confidentiality agreements.

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“Permitted Encumbrances” means:

(a)Liens imposed by law for Taxes that are not yet due or are being contested in compliance with Section 5.04;

(b)carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not being contested in compliance with Section 5.04;

(c)pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;

(d)deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;

(e)judgment Liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;

(f)easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;

(g)minor title defects, encroachments or irregularities that in the aggregate do not Materially impair the use of the affected property for the purpose for which it is used by that Person;

(h)the right reserved to or vested in any municipality or Governmental Authority by the terms of any lease, license, franchise, grant or permit acquired by that person or by any statutory provision to terminate the lease, license, franchise, grant or permit, or to require annual or other payments as a condition to its continuance;

(i)security given to a public utility or any Governmental Authority when required by the utility or authority in connection with the operations of that Person in the ordinary course of business; and

(j)any Liens securing indebtedness the outstanding principal amount of which (when aggregated with the outstanding principal amount of any other secured indebtedness which has the benefit of security under this paragraph (j) does not exceed $[REDACTED]

provided that the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness, except with respect to clause (e) above.

“Permitted Investments” means:

(a)direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the U.S. or Canada (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the U.S. or Canada), in each case maturing within one year from the date of acquisition thereof;

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(b)investments in commercial paper maturing within 365 days from the date of acquisition thereof and having, at such date of acquisition, a credit rating obtainable from S&P or from Moody’s of at least AA- and Aa3, respectively;

(c)investments in certificates of deposit, bankers’ acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the U.S. or Canada or any state or province thereof, as applicable, which has a combined capital and surplus and undivided profits of not less than $[REDACTED];

(d)fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and

(e)money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $[REDACTED].

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

“Plan” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA or a “pension plan” or “plan” which is a “registered pension plan” as defined in the Income Tax Act (Canada), and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

“Plan Asset Regulations” means 29 CFR § 2510.3-101 et seq., as modified by Section 3(42) of ERISA, as amended from time to time.

“PPSA” means the Personal Property Security Act (British Columbia) as in effect from time to time or the equivalent personal property security legislation in any other province or territory of Canada which is required to be applied in connection with the creation, attachment, perfection or enforcement of any security interests.

“Prepayment Event” means:

(a)any sale, transfer or other disposition (including pursuant to a sale and leaseback transaction) of all or substantially all of the property or assets of any Loan Party or any Subsidiary for total consideration in aggregate for any fiscal year of at least $[REDACTED]; or

(b)any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of any Loan Party or  any Subsidiary with a fair value immediately prior to such event equal to or greater than $[REDACTED].

“Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.

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“Product” means (i) those medical devices set forth (and described in reasonable detail) on Schedule 1.01(B) attachedhereto, and (ii) any current or future medical product developed, manufactured, licensed, marketed, sold or otherwise commercialized by any Loan Party, Subsidiary or Managed Entity, including any such medical product currently in development.

“Projections” has the meaning assigned to such term in Section 5.01(f).

“PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.

“Public-Sider” means a Lender whose representatives may trade in securities of the Borrower or its Controlling person or any of its Subsidiaries while in possession of the financial statements provided by the Borrower under the terms of this Agreement.

“Qualified ECP Guarantor” means, in respect of any Swap Obligation, each Loan Party that has total assets exceeding $[REDACTED] at the time the relevant Loan Guaranty or grant of the relevant security interest becomes or would become effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

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

“Recipient” means, as applicable, (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, or any combination thereof (as the context requires).

“Refinance Indebtedness” has the meaning assigned to such term in Section 6.01(f).

“Register” has the meaning assigned to such term in Section 9.04(b).

“Regulation D” means Regulation D of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation T” means Regulation T of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation U” means Regulation U of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Regulation X” means Regulation X of the Federal Reserve Board, as in effect from time to time and all official rulings and interpretations thereunder or thereof.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, partners, members, trustees, employees, agents, administrators, managers, representatives and advisors of such Person and such Person’s Affiliates.

“Release” means any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migrating, disposing, or dumping of any substance into the environment.

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“Report” means reports prepared by the Administrative Agent or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrower’s assets from information furnished by or on behalf of the Borrower, after the Administrative Agent has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by the Administrative Agent.

“Required Lenders” means, subject to Section 2.20, at any time, at least two (2) Lenders having Revolving Exposure and unused Revolving Commitments together representing more than fifty percent (50%) of the sum of the Aggregate Revolving Exposure and unused Revolving Commitments at such time; provided that for purposes of declaring the Loans to be due and payable pursuant to Article VII, and for all purposes after the Loans become due and payable pursuant to Article VII or the Revolving Commitments expire or terminate, then, as to each Lender, clause (a) of the definition of Swingline Exposure shall only be applicable for purposes of determining its Revolving Exposure to the extent such Lender shall have funded its participation in the outstanding Swingline Loans. For purposes of this definition, a Lender, together with its Approved Funds and Affiliates, shall constitute one and the same Lender.  

“Requirement of Law” means, with respect to any Person, (a) the charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents of such Person and (b) any statute, law (including common law), treaty, rule, regulation, code, ordinance, order, decree, writ, judgment, injunction or determination of any arbitrator or court or other Governmental Authority (including Environmental Laws and Health Care Laws), in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

“Responsible Officer” means the president, a Financial Officer or another executive officer of the Borrower.

“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Borrower or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests or any option, warrant or other right to acquire any such Equity Interests or any payment of any management, executive compensation to holders of Equity Interests in the Loan Parties (other than pursuant to bona fide employee compensation plans), consulting or advisory, incentive or other similar fees.

“Revolving Commitment” means, with respect to each Lender, the commitment, if any, of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate permitted amount of such Lender’s Revolving Exposure hereunder, as such commitment may be reduced or increased from time to time pursuant to (a) Section 2.09 and (b) assignments by or to such Lender pursuant to Section 9.04.  The initial amount of each Lender’s Revolving Commitment is set forth on the Commitment Schedule, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable.  The initial aggregate amount of the Lenders’ Revolving Commitments is $125,000,000.

“Revolving Credit Maturity Date” means October 22, 2022 (if the same is a Business Day, or if not then the immediately next succeeding Business Day), or any earlier date on which the Revolving Commitments are reduced to zero or otherwise terminated pursuant to the terms hereof.

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“Revolving Exposure” means, with respect to any Lender, at any time, the sum of the aggregate outstanding principal amount of such Lender’s Revolving Loans and its LC Exposure and its Swingline Exposureat such time.

“Revolving Lender” means, as of any date of determination, a Lender with a Revolving Commitment or, if the Revolving Commitments have terminated or expired, a Lender with Revolving Exposure.

“Revolving Loan” means a Loan made pursuant to Section 2.01.

“S&P” means Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business.

“Sanctioned Country” means, at any time, a country, region or territory which is itself the subject or target of any Sanctions (at the time of this Agreement, Crimea, Cuba, Iran, North Korea and Syria).

“Sanctioned Person” means, at any time, (a) any Person  listed in any Sanctions-related list of designated Persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or by the United Nations Security Council, the European Union, any European Union member state, Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority, (b) any Person operating, organized or resident in a Sanctioned Country, (c) any Person owned or controlled by any such Person or Persons described in the foregoing clauses (a) or (b), or (d) any Person otherwise the subject of any Sanctions.

“Sanctions” means all economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by (a) the U.S. government, including those administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, (b) the United Nations Security Council, the European Union, any European Union member state or Her Majesty’s Treasury of the United Kingdom or other relevant sanctions authority or (c) the Special Economic Measures Act (Canada), the United Nations Act (Canada), the Freezing Assets of Corrupt Foreign Officials Act (Canada) and the Criminal Code (Canada) and, in each case, the regulations promulgated thereunder.

“SEC” means the Securities and Exchange Commission of the U.S.

“Secured Obligations” means all Obligations, together with all (i) Banking Services Obligations and (ii) Swap Agreement Obligations owing to one or more Lenders or their respective Affiliates; provided, however, that the definition of “Secured Obligations” shall not create any guarantee by any Guarantor of (or grant of security interest by any Guarantor to support, as applicable) any Excluded Swap Obligations of such Guarantor for purposes of determining any obligations of any Guarantor.

“Secured Parties” means (a) the Lenders, (b) the Administrative Agent, (c) each Issuing Bank, (d) each provider of Banking Services, to the extent the Banking Services Obligations in respect thereof constitute Secured Obligations, (e) each counterparty to any Swap Agreement, to the extent the obligations thereunder constitute Secured Obligations, (f) the beneficiaries of each indemnification obligation undertaken by any Loan Party under any Loan Document and (g) the successors and assigns of each of the foregoing.  

“Security Agreements” means, collectively, that certain General Security Agreement and Pledge Agreement (including any and all supplements thereto), dated as of the date hereof, between the Borrower and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, that certain General Security Agreement and Pledge Agreement (including any and all supplements

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thereto), dated as of the date hereof, between the Guarantors and the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document) or any other Person for the benefit of the Administrative Agent and the other Secured Parties, as each may be amended, restated, supplemented or otherwise modified from time to time.

“Segregated Health Care Account” means, a deposit account of Borrower or another Loan Party or a Managed Entity in the name of the Borrower or such other Loan Party or such Managed Entity and under the sole dominion and control of the Borrower or such other Loan Party or such Managed Entity maintained in accordance with the requirements of Section 5.14(b) hereof, the only funds on deposit in which constitute the direct proceeds of payments made by Governmental Payor Programs.

“Statements” has the meaning assigned to such term in Section 2.18(f).  

“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentage (including any marginal, special, emergency or supplemental reserves) established by the Federal Reserve Board to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency liabilities” in Regulation D).  Such reserve percentages shall include those imposed pursuant to Regulation D of the Federal Reserve Board.  Eurodollar Loans shall be deemed to constitute eurocurrency funding and 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 of the Federal Reserve Board or any comparable regulation.  The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

“subsidiary” means, with respect to any Person (the “parent”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent and/or one or more subsidiaries of the parent.

“Subsidiary” means any direct or indirect subsidiary of the Borrower or a Loan Party, as applicable.

“[REDACTED]” means [REDACTED], a Georgia professional company all the Equity Interests of which are directly owned by [REDACTED].

“Swap Agreement” means any agreement with respect to any swap, forward, spot, future, credit default or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

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“Swap Agreement Obligations” means any and all obligations of the Loan Parties and their Subsidiaries, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any Swap Agreement permitted hereunder with a Lender or an Affiliate of a Lender, and (b) any cancellations, buy backs, reversals, terminations or assignments of any Swap Agreement transaction permitted hereunder with a Lender or an Affiliate of a Lender.

“Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act or any rules or regulations promulgated thereunder.

“Sweep Agreement” means an agreement, in form and substance reasonably satisfactory to the Administrative Agent, between the Borrower or another Loan Party maintaining a Segregated Health Care Account, the Administrative Agent and the applicable bank or other financial institution at which such Segregated Health Care Account is maintained, pursuant to which such bank or financial institution (i) agrees to automatically sweep amounts deposited in such Segregated Health Care Account to another account of the Borrower or such other Loan Party subject to a tri-party account control agreement in favor of the Administrative Agent satisfying the requirements set forth in Section 5.14(b) hereof, as and when funds clear and become available in accordance with such bank’s or financial institution’s standard practices and procedures, and (ii) agrees not to change such standing sweep instructions until the date at least five (5) days (or such lesser period as the Administrative Agent may agree in its sole discretion or as may be required by applicable Governmental Payor Program laws, rules, regulations, orders, guidelines, requirements, manual provisions or policies) after the Administrative Agent’s and such bank or financial institution’s receipt of notice of the termination of such standing sweep instruction from the Borrower or the applicable other Loan Party maintaining such Segregated Health Care Account.

“Swingline Commitment” means the amount set forth opposite Chase’s name on the Commitment Schedule as Swingline Commitment.

“Swingline Exposure” means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time.  The Swingline Exposure of any Revolving Lender at any time shall be the sum of (a) its Applicable Percentage of the total Swingline Exposure at such time other than with respect to any Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender and (b) the principal amount of all Swingline Loans made by such Revolving Lender in its capacity as the Swingline Lender outstanding at such time (less the amount of participations funded by the other Lenders in such Swingline Loans).

“Swingline Lender” means Chase, in its capacity as lender of Swingline Loans hereunder. Any consent required of the Administrative Agent or the Issuing Bank shall be deemed to be required of the Swingline Lender and any consent given by Chase in its capacity as Administrative Agent or Issuing Bank shall be deemed given by Chase in its capacity as Swingline Lender as well.

“Swingline Loan” means a Loan made pursuant to Section 2.05.

“Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), value added taxes, or any other goods and services, use or sales taxes, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Third Party Payor Authorizations” shall mean, all participation agreements, provider or supplier agreements, enrollments, accreditations and billing numbers required to participate in and receive reimbursement from a Third Party Payor Program, including all Medicare and Medicaid participation agreements.

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“Third Party Payor Program” shall mean any Governmental Payor Program, or any other health care payment or reimbursement program in which a Loan Party, Subsidiary, or Managed Entity participates, including programs sponsored by private insurers or managed care plans.

“Total Indebtedness” means, at any date, the aggregate principal amount of all Indebtedness determined for the Loan Parties and their Subsidiaries on a consolidated basis at such date.

“Total Leverage Ratio” means, on any date, the ratio of (a) Total Indebtedness on such date to (b) EBITDA for the period of four consecutive fiscal quarters ended on or most recently prior to such date; provided that solely for purposes of Section 6.12(b), to the extent any Loan Party or any Subsidiary makes any permitted acquisition or disposition during the period of four fiscal quarters of the Borrower most recently ended, the Total Leverage Ratio (including, without limitation, the calculation of EBITDA and Net Income used therein) shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or disposition that are factually supportable and are expected to have a continuing impact, determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition or disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four quarter period.  

“Transactions” means the execution, delivery and performance by the Borrower of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder.

“TRICARE” means a program of medical benefits covering former and active members of the uniformed services and certain of their dependents, financed and administered by the United States Departments of Defense, Health and Human Services and Transportation, and all Requirements of Law governing such program.

“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate, or the CB Floating Rate.

“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York or in any other state, the laws of which are required to be applied in connection with the issue of perfection of security interests.  

“Unliquidated Obligations” means, at any time, any Secured Obligations (or portion thereof) that are contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.  

“Unrestricted Cash” means, as of any date of determination, that portion of the Borrower’s and its Subsidiaries’ aggregate cash and cash equivalents that is held by the Borrower on deposit with one or more financial institutions in the United States of America or Canada and that is not encumbered by or subject to any Lien, setoff (other than ordinary course setoff rights of a depository bank arising under a bank depository agreement for customary fees, charges and other account-related expenses due to such depository bank thereunder), counterclaim, recoupment, defense or other right in favor of any person, other than Liens securing the obligations under the Loan Documents and any applicable Permitted Encumbrances.

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“U.S.” means the United States of America.

“U.S. Person” means a “United States person” within the meaning of Section 7701(a)(30) of the Code.

“USA PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001.

“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

[ALL NAMES OF INDIVIDUALS HAVE BEEN REDACTED]

SECTION 1.02.  Classification of Loans and Borrowings.   For purposes of this Agreement, Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving Loan”).  Borrowings also may be classified and referred to by Class (e.g., a “Revolving Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g., a “Eurodollar Revolving Borrowing”).

SECTION 1.03.  Terms Generally.   The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.  The word “law” shall be construed as referring to all statutes, rules, regulations, codes and other laws (including official rulings and interpretations thereunder having the force of law or with which affected Persons customarily comply) and all judgments, orders and decrees of all Governmental Authorities.  The word “will” shall be construed to have the same meaning and effect as the word “shall”.  Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any definition of or reference to any statute, rule or regulation shall be construed as referring thereto as from time to time amended, supplemented or otherwise modified (including by succession of comparable successor laws), (c) any reference herein to any Person shall be construed to include such Person’s successors and assigns (subject to any restrictions on assignments set forth herein) and, in the case of any Governmental Authority, any other Governmental Authority that shall have succeeded to any or all functions thereof, (d) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (e) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement, (f) any reference in any definition to the phrase “at any time” or “for any period” shall refer to the same time or period for all calculations or determinations within such definition, and (g) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.    

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SECTION 1.04.Accounting Terms; GAAP.  (a) Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that if after the date hereof the Borrower migrates to IFRS orthere occurs any change in GAAP or in the application thereof on the operation of any provision hereof and the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of such migration to IFRS orchange  in GAAP or in the application thereof  (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such migration to IFRS orchange in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such migration orchange shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith. Notwithstanding any other provision contained herein, all terms of an accounting or financial nature used herein shall be construed, and all computations of amounts and ratios referred to herein shall be made (i) without giving effect to any election under Financial Accounting Standards Board Accounting Standards Codification 825-10-25 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect, including in Canada) to value any Indebtedness or other liabilities of any Loan Party or any Subsidiary at “fair value”, as defined therein and (ii) without giving effect to any treatment of Indebtedness in respect of convertible debt instruments under Financial Accounting Standards Board Accounting Standards Codification 470-20 (or any other Accounting Standards Codification or Financial Accounting Standard having a similar result or effect, including in Canada)to value any such Indebtedness in a reduced or bifurcated manner as described therein, and such Indebtedness shall at all times be valued at the full stated principal amount thereof.

(b)Notwithstanding anything to the contrary contained in Section 1.04(a) or in the definition of “Capital Lease Obligations,” in the event of an accounting change requiring all leases to be capitalized, only those leases (assuming for purposes hereof that such leases were in existence on the date hereof) that would constitute capital leases in conformity with GAAP on the date hereof shall be considered capital leases, and all calculations and deliverables under this Agreement or any other Loan Document shall be made or delivered, as applicable, in accordance therewith.

SECTION 1.05.  Interest Rates.  The Administrative Agent does not warrant or accept responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to the rates in the definition of “LIBO Rate” or with respect to any comparable or successor rate thereto, or replacement rate therefor.

SECTION 1.06.  Pro Forma Adjustments for Acquisitions and Dispositions .  To the extent the Borrower or any Subsidiary makes any acquisition permitted pursuant to Section 6.04 or disposition of assets outside the ordinary course of business permitted by Section 6.05 during the period of four fiscal quarters of the Borrower most recently ended, the Interest Coverage Ratio and Total Leverage Ratio shall be calculated after giving pro forma effect thereto (including pro forma adjustments arising out of events which are directly attributable to the acquisition or the disposition of assets, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act of 1933, as amended, as interpreted by the SEC, and as certified by a Financial Officer), as if such acquisition or such disposition (and any related incurrence, repayment or assumption of Indebtedness) had occurred in the first day of such four-quarter period.

SECTION 1.07. Rounding. Any financial ratios required to be maintained by any Loan Party pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

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SECTION 1.08. Interest Rates; LIBOR Notification. The interest rate on Eurodollar Loans is determined by reference to the LIBO Rate, which is derived from the London interbank offered rate (“LIBOR”). LIBOR is intended to represent the rate at which contributing banks may obtain short-term borrowings from each other in the London interbank market. In July 2017, the U.K. Financial Conduct Authority announced that, after the end of 2021, it would no longer persuade or compel contributing banks to make rate submissions to the ICE Benchmark Administration (together with any successor to the ICE Benchmark Administrator, the “IBA”) for purposes of the IBA setting LIBOR. As a result, it is possible that commencing in 2022, LIBOR may no longer be available or deemed an appropriate reference rate upon which to determine the interest rate on Eurodollar Loans. In light of this eventuality, public and private sector industry initiatives are currently underway to identify new or alternative reference rates to be used in place of LIBOR. In the event LIBOR is no longer available (or in certain other circumstances), Section 2.14(c) of this Agreement provides a mechanism for determining an alternative rate of interest. The Administrative Agentwill inform the Borrower, pursuant to Section 2.14(c),  in advance of any change to the reference rate upon which the interest rate of Eurodollar Loans is based. However, the Administrative Agentdoes not warrant or accept any responsibility for, and shall not have any liability with respect to, the administration, submission or any other matter related to LIBOR or other rates in the definition of “LIBO Rate” or with respect to such alternative, successor or replacement reference rate, including without limitation, whether the composition or characteristics of any such alternative, successor or replacement reference rate will be similar to or produce the same value or economic equivalence as the LIBO Rate or have the same volume or liquidity as did LIBOR prior to its discontinuance or unavailability.

ARTICLE II

The Credits

SECTION 2.01.  Commitments .  Subject to the terms and conditions set forth herein, each Lender severally (and not jointly) agrees to make Revolving Loans in dollars to the Borrower from time to time during the Availability Period in an aggregate principal amount that will not result (after giving effect to any application of proceeds of such Borrowing pursuant to Section 2.10(a)) in (i) such Lender’s Revolving Exposure exceeding such Lender’s Revolving Commitment or (ii) the Aggregate Revolving Exposure exceeding the aggregate Revolving Commitments.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.

SECTION 2.02. Loans and Borrowings .  

(a)  Each Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Loans of the same Class and Type made by the Lenders ratably in accordance with their respective Revolving Commitments.  The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Revolving Commitments of the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.  

(b)  Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of CBFR Loans or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall be a CBFR Loan.  Each Lender at its option may make any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the Borrower to repay such Loan in accordance with the terms of this Agreement.  

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(c)  At the commencement of each Interest Period for any Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000. At the time that each CBFR Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000;provided that a CBFRRevolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the total Revolving Commitments or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e).  Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $100,000.Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of five (5) Eurodollar Borrowings outstanding.

(d)  Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Revolving Credit Maturity Date.

SECTION 2.03.  Requests for Borrowings .  To request a Borrowing, the Borrower shall notify the Administrative Agent of such request either in writing (delivered by hand or fax) by delivering a Borrowing Request signed by a Responsible Officer of the Borrower or through Electronic System (a) in the case of a Eurodollar Borrowing, not later than 12:00 p.m., Toronto time, three Business Days before the date of the proposed Borrowing or (b) in the case of a CBFR Borrowing, not later than noon, Toronto time, on the date of the proposed Borrowing; provided that any such notice of a CBFR Revolving Borrowing to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e) may be given not later than 9:00 a.m., Toronto time, on the date of the proposed Borrowing.  Each such Borrowing Request shall be irrevocable.  Each such Borrowing Request shall specify the following information in compliance with Section 2.01:  

(i) the Class of Borrowing, the aggregate amount of the requested Borrowing, and (if applicable) a breakdown of the separate wires comprising such Borrowing;

(ii) the date of such Borrowing, which shall be a Business Day;

(iii) whether such Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and

(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term “Interest Period.”

If no election as to the Type of Borrowing is specified, then the requested Borrowing shall be a CBFR Borrowing.  If no Interest Period is specified with respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed to have selected an Interest Period of one (1) month’s duration.  Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.

SECTION 2.04. [Section Intentionally Omitted]

SECTION 2.05.  Swingline Loans .

(a)Subject to the terms and conditions set forth herein, from time to time during the Availability Period, the Swingline Lender may agree, but shall have no obligation, to make Swingline Loans to the Borrower, in an aggregate principal amount at any time outstanding that will not result in (i)

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the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Lender’s Swingline Commitment, (ii) the Swingline Lender’s Revolving Exposure exceeding its Revolving Commitment, or (iii) the Aggregate Revolving Exposure exceeding the aggregate Revolving Commitments; provided thatthe Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan.  Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.  To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such request byfax or through Electronic System,not later than noon, Toronto time, on the day of a proposed Swingline Loan.  Each such notice shall be in a form approved by the Administrative Agent, shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan.  The Administrative Agent will promptly advise the Swingline Lender of any such notice received from the Borrower.  The Swingline Lender shall make each Swingline Loan available to the Borrower, to the extent the Swingline Lender elects to make such Swingline Loan, by means of a credit to the Funding Account(s) (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the Issuing Bank, and in the case of repayment of another Loan or fees or expenses as provided by Section 2.18(c), by remittance to the Administrative Agent to be distributed to the Lenders) by 2:00 p.m., Toronto time, on the requested date of such Swingline Loan.

(b)The Swingline Lender may by written notice given to the Administrative Agent require the Revolving Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding.  Such notice shall specify the aggregate amount of Swingline Loans in which the Revolving Lenders will participate.  Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Revolving Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Revolving Lender hereby absolutely and unconditionally agrees, promptly upon receipt of such notice from the Administrative Agent (and in any event, if such notice is received by 12:00 p.m., Toronto time, on a Business Day no later than 4:00 p.m., Toronto time on such Business Day and if received after 12:00 p.m., Toronto time, “on a Business Day” shall mean no later than 9:00 a.m. Toronto time on the immediately succeeding Business Day), to pay to the Administrative Agent, for the account of the Swingline Lender, such Lender’s Applicable Percentage of such Swingline Loan or Loans.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.  Each Revolving Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from the Revolving Lenders.  The Administrative Agent shall notify the Borrower of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender.  Any amounts received by the Swingline Lender from the Borrower (or other party on behalf of the Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Revolving Lenders that shall have made their payments pursuant to this paragraph and to the Swingline Lender, as their interests may appear;provided that any such payment so remitted shall be repaid to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Borrower for any reason.  The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the payment thereof.  

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SECTION 2.06.  Letters of Credit.  

(a)General.  Subject to the terms and conditions set forth herein, the Borrower may request the issuance of Letters of Credit denominated in dollars as the applicant thereof for the support of its or its Subsidiaries’ obligations, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any time and from time to time during the Availability Period and the Issuing Bank may, but shall have no obligation, to issue such requested Letters of Credit pursuant to this Agreement. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any Letter of Credit Agreement, the terms and conditions of this Agreement shall control.  Notwithstanding anything herein to the contrary, the Issuing Bank shall have no obligation hereunder to issue, and shall not issue, any Letter of Credit (i) the proceeds of which would be made available to any Person (A) to fund any activity or business of or with any Sanctioned Person, or in any country or territory that, at the time of such funding, is the subject of any Sanctions or (B) in any manner that would result in a violation of any Sanctions by any party to this Agreement, (ii) if any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the Issuing Bank from issuing such Letter of Credit, or any Requirement of Law relating to the Issuing Bank or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Bank with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the Issuing Bank is not otherwise compensated hereunder) not in effect on the Effective Date, or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense which was not applicable on the Effective Date and which the Issuing Bank in good faith deems material to it, or (iii) if the issuance of such Letter of Credit would violate one or more policies of the Issuing Bank applicable to letters of credit generally; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith or in the implementation thereof, and (y) all requests, rules, guidelines, requirements or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed not to be in effect on the Effective Date for purposes of clause (ii) above, regardless of the date enacted, adopted, issued or implemented.

(b)Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.  To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Borrower shall hand deliver or fax (or transmit through Electronic System) to the Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension, but in any event no less than three Business Days) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the name and address of the beneficiary thereof, and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit.  In addition, as a condition to any such Letter of Credit issuance, the Borrower shall have entered into a continuing agreement (or other letter of credit agreement) for the issuance of letters of credit and/or shall submit a letter of credit application, in each case, as required by the Issuing Bank and using such bank’s standard form (each, a “Letter of Credit Agreement”).  A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) the aggregate LC Exposure shall not exceed $[REDACTED], (ii) no Revolving Lender’s Revolving Exposure shall exceed its Revolving Commitment and (iii) the Aggregate

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Revolving Exposure shall not exceed the aggregate Revolving Commitments.  Notwithstanding the foregoing or anything to the contrary contained herein, no Issuing Bank shall be obligated to issue or modify any Letter of Credit if, immediately after giving effect thereto, the outstanding LC Exposure in respect of all Letters of Credit issued by such Person and its Affiliates would exceed such Issuing Bank’s Issuing Bank Sublimit.  Without limiting the foregoing and without affecting the limitations contained herein, it is understood and agreed that the Borrower may from time to time request that an Issuing Bank issue Letters of Credit in excess of its individual Issuing Bank Sublimit in effect at the time of such request, and each Issuing Bank agrees to consider any such request in good faith.  Any Letter of Credit so issued by an Issuing Bank in excess of its individual Issuing Bank Sublimit then in effect shall nonetheless constitute a Letter of Credit for all purposes of the Credit Agreement, and shall not affect the Issuing Bank Sublimit of any other Issuing Bank, subject to the limitations on the aggregate LC Exposure set forth in clause (i) of this Section 2.06(b).

(c)Expiration Date.  Each Letter of Credit shall expire (or be subject to termination or non-renewal by notice from the Issuing Bank to the beneficiary thereof) at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, including, without limitation, any automatic renewal provision, one year after such renewal or extension) and (ii) the date that is five Business Days prior to the Revolving Credit Maturity Date.

(d)Participations.  By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the Issuing Bank or the Revolving Lenders, the Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender hereby acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.  In consideration and in furtherance of the foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank, such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Borrower for any reason.  Each Revolving Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Revolving Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.

(e)Reimbursement.  If the Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative Agent an amount equal to such LC Disbursement not later than 11:00 a.m., Toronto time, on (i) the Business Day that the Borrower receives notice of such LC Disbursement, if such notice is received prior to 9:00 a.m., Toronto time, on the day of receipt, or (ii) the Business Day immediately following the day that the Borrower receives such notice, if such notice is received after 9:00 a.m., Toronto time, on the day of receipt; provided that the Borrower may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with a CBFR Revolving Borrowing or Swingline Loan in an equivalent amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be discharged and replaced by the resulting CBFR Revolving Borrowing or Swingline Loan.  If the Borrower fails to make such payment when due, the Administrative Agent shall notify each Revolving Lender of the applicable LC Disbursement, the payment then due from the Borrower in respect thereof, and such Lender’s Applicable Percentage thereof.  Promptly following receipt of such notice, each Revolving Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Borrower, in the same

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manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatismutandis, to the payment obligations of the Revolving Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so received by it from the Revolving Lenders.  Promptly following receipt by the Administrative Agent of any payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute such payment to the Issuing Bank or, to the extent that Revolving Lenders have made payments pursuant to this paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank, as their interests may appear.  Any payment made by a Revolving Lender pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the funding of CBFR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its obligation to reimburse such LC Disbursement.

(f)Obligations Absolute.  The Borrower’s obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit, any Letter of Credit Agreement or this Agreement, or any term or provision therein or herein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) any payment by the Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Borrower’s obligations hereunder.  None of the Administrative Agent, the Revolving Lenders or the Issuing Bank, or any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit, or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the Issuing Bank; provided that the foregoing shall not be construed to excuse the Issuing Bank from liability to the Borrower to the extent of any direct damages suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof.  The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of the Issuing Bank (as finally determined by a court of competent jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.  In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.  

(g)Disbursement Procedures.  The Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit.  The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by telephone (confirmed by fax or through Electronic Systems) of such demand for payment and whether the Issuing Bank has made or will make an LC Disbursement thereunder; provided that, any failure to give or delay in giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC Disbursement.  

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(h)Interim Interest.  If the Issuing Bank shall make any LC Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC Disbursement, at the rate per annum then applicable to CBFR Revolving Loans and such interest shall be due and payable on the date when such reimbursement is due; providedthat if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply.  Interest accrued pursuant to this paragraph shall be for the account of the Issuing Bank, except that interest accrued on and after the date of payment by any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for the account of such Lender to the extent of such payment.

(i)Replacement of the Issuing Bank.  (i) The Issuing Bank may be replaced at any time by written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank.  The Administrative Agent shall notify the Revolving Lenders of any such replacement of the Issuing Bank.  At the time any such replacement shall become effective, the Borrower shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).  From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank” shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require.  After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.

(ii) Subject to the appointment and acceptance of a successor Issuing Bank, the Issuing Bank may resign as an Issuing Bank at any time upon thirty days’ prior written notice to the Administrative Agent, the Borrower and the Lenders, in which case, such Issuing Bank shall be replaced in accordance with Section 2.06(i) above.

(j)Cash Collateralization.   If any Event of Default shall occur and be continuing, on the Business Day that the Borrower receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Revolving Lenders (the “LC Collateral Account”), an amount in cash equal to 105% of the amount of the LC Exposure as of such date plus accrued and unpaid interest thereon; provided that the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i) of Article VII.  The Borrower also shall deposit cash collateral in accordance with this paragraph as and to the extent required by Section 2.11(b) or 2.20. Each such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Secured Obligations.  The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over the LC Collateral Account and the Borrower hereby grants the Administrative Agent a security interest in the LC Collateral Account and all moneys or other assets on deposit therein or credited thereto.  Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Borrower’s risk and expense, such deposits shall not bear interest.  Interest or profits, if any, on such investments shall accumulate in such account.  Moneys in such account shall be applied by the

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Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Revolving Lenders with LC Exposure representing greater than 50% of the aggregate LC Exposure), be applied to satisfy other Secured Obligations.  If the Borrower is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event ofDefault, such amount (to the extent not applied as aforesaid) shall be returned to the Borrower within three (3) Business Days after all such Events ofDefaultshave been cured or waived as confirmed in writing by the Administrative Agent.

(k)LC Exposure Determination.  For all purposes of this Agreement, the amount of a Letter of Credit that, by its terms or the terms of any document related thereto, provides for one or more automatic increases in the stated amount thereof shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at the time of determination.  

(l)Letters of Credit Issued for Account of Subsidiaries.  Notwithstanding that a Letter of Credit issued or outstanding hereunder supports any obligations of, or is for the account of, a Subsidiary, or states that a Subsidiary is the “account party,” “applicant,” “customer,” “instructing party,” or the like of or for such Letter of Credit, and without derogating from any rights of the Issuing Bank (whether arising by contract, at law, in equity or otherwise) against such Subsidiary in respect of such Letter of Credit, the Borrower (i) shall reimburse, indemnify and compensate the Issuing Bank hereunder for such Letter of Credit (including to reimburse any and all drawings thereunder) as if such Letter of Credit had been issued solely for the account of the Borrower and (ii) irrevocably waives any and all defenses that might otherwise be available to it as a guarantor or surety of any or all of the obligations of such Subsidiary in respect of such Letter of Credit.  The Borrower hereby acknowledges that the issuance of such Letters of Credit for its Subsidiaries inures to the benefit of the Borrower, and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

SECTION 2.07.  Funding of Borrowings.   

(a)Each Lender shall make each Loan to be made by such Lender hereunder on the proposed date thereof solely by wire transfer of immediately available funds by 3:00 p.m., Toronto time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders in an amount equal to such Lender’s Applicable Percentage; provided that Swingline Loans shall be made as provided in Section 2.05.  The Administrative Agent will make such Loans available to the Borrower by promptly crediting the funds so received in the aforesaid account of the Administrative Agent to the Funding Account(s); provided that CBFR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the Issuing Bank.

(b)Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower each severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the NYFRB Rate and a rate

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determined by the Administrative Agent in accordance with banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest rate applicable to CBFR Revolving Loans.  If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lender’s Loan included in such Borrowing; provided, that any interest received from the Borrower by the Administrative Agent during the period beginning when Administrative Agent funded the Borrowing until such Lender pays such amount shall be solely for the account of the Administrative Agent.

SECTION 2.08.  Interest Elections.   

(a)  Each Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.  Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in this Section.  The Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing.  This Section shall not apply to Swingline Borrowings, which may not be converted or continued.

(b)  To make an election pursuant to this Section, the Borrower shall notify the Administrative Agent of such election either in writing (delivered by hand or fax) by delivering an Interest Election Request signed by a Responsible Officer of the Borrower or through Electronic System by the time that a Borrowing Request would be required under Section 2.03 if the Borrower were requesting a Borrowing of the Type resulting from such election to be made on the effective date of such election.  Each such Interest Election Request shall be irrevocable.

(c)  Each Interest Election Request (including requests submitted through Electronic System) shall specify the following information in compliance with Section 2.02:

(i)  the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);

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

(iii)  whether the resulting Borrowing is to be a CBFR Borrowing or a Eurodollar Borrowing; and

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

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

(d)Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the applicable Class of the details thereof and of such Lender’s portion of each resulting Borrowing.

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(e)If the Borrower fails to deliver a timely Interest Election Request with respect to a Eurodollar Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period such Borrowing shall be converted to a CBFR Borrowing.  Notwithstanding any contrary provision hereof, if anEvent ofDefault has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Borrower, then, so long as anEvent ofDefault is continuing (i) no outstanding Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be converted to a CBFR Borrowing at the end of the Interest Period applicable thereto.

SECTION 2.09.  Termination and Reduction of Revolving Commitments; Increase in Revolving Commitments.

(a)Unless previously terminated, all the Revolving Commitments shall terminate on the Revolving Credit Maturity Date.  

(b)The Borrower may at any time terminate the Revolving Commitments upon the Payment in Full of the Secured Obligations.

(c)The Borrower may from time to time reduce the Revolving Commitments; provided that (i) each reduction of the Revolving Commitments shall be in an amount that is an integral multiple of $2,500,000 and not less than $5,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving Commitments if, after giving effect to any concurrent prepayment of the Revolving Loans in accordance with Section 2.11, the Aggregate Revolving Exposure would exceed the aggregate Revolving Commitments.

(d)The Borrower shall notify the Administrative Agent of any election to terminate or reduce the Revolving Commitments under paragraph (b) or (c) of this Section at least three (3) Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof.  Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof.  Each notice delivered by the Borrower pursuant to this Section shall be irrevocable; provided that a notice of termination of the Revolving Commitments delivered by the Borrower may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Borrower (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied.  Any termination or reduction of the Revolving Commitments shall be permanent. Each reduction of the Revolving Commitments shall be made ratably among the Lenders in accordance with their respective Revolving Commitments.

(e)The Borrower shall have the right to increase the Revolving Commitments by obtaining additional Revolving Commitments, either from one or more of the Lenders or another lending institution, provided that (i) any such request for an increase shall be in a minimum amount of $5,000,000, (ii) the Borrower may make a maximum of four (4) such requests during the term of the Revolving Loan, (iii) after giving effect thereto, the sum of the total of the additional Revolving Commitments extended pursuant to this clause (e) does not exceed $75,000,000, (iv) the Administrative Agent, the Swingline Lender and the Issuing Bank have approved the identity of any such new Lender, such approvals not to be unreasonably withheld, (v) any such new Lender assumes all of the rights and obligations of a “Lender” hereunder, and (vi) the procedures described in Section 2.09(f) and (g) below have been satisfied.  Nothing contained in this Section 2.09 shall constitute, or otherwise be deemed to be, a commitment on the part of any Lender to increase its Revolving Commitment hereunder at any time.

(f)Any amendment hereto for such an increase or addition shall be in form and substance satisfactory to the Administrative Agent and shall only require the written signatures of the

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Administrative Agent, the Borrower and each Lender being added or increasing its Revolving Commitment.  As a condition precedent to such an increase or addition, the Borrower shall deliver to the Administrative Agenta certificate of each Loan Party signed by an authorized officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that, before and after giving effect to such increase or addition, (1) the representations and warranties contained in Article III and the other Loan Documents are true and correct as if made on the date of such increase, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date,(2) no Default existsand (3) the Borrower is in compliance (on a pro forma basis, calculated based upon financial results for the most recent quarterly determination period for which financial statements are available under this Agreement) with the covenants contained in Section 6.12(a) and (b); providedthat for purposes of clause (3) above, the maximum amount of additional Revolving Commitmentsavailable to be drawn shall be assumed to have been fully drawn and there shall be no netting of cash proceeds from any increases unspent at closing.

(g)On the effective date of any such increase or addition, (i) any Lender increasing (or, in the case of any newly added Lender, extending) its Revolving Commitment shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase or addition and the use of such amounts to make payments to such other Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to equal its revised Applicable Percentage of such outstanding Revolving Loans, and the Administrative Agent shall make such other adjustments among the Lenders with respect to the Revolving Loans then outstanding and amounts of principal, interest, commitment fees and other amounts paid or payable with respect thereto as shall be necessary, in the opinion of the Administrative Agent, in order to effect such reallocation and (ii)  the Borrower shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase (or addition) in the Revolving Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the Borrower, in accordance with the requirements of Section 2.03).  The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurodollar Loan, shall be subject to indemnification by the Borrower pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods.  Within a reasonable time after the effective date of any increase or addition, the Administrative Agent shall, and is hereby authorized and directed to, revise the Commitment Schedule to reflect such increase or addition and shall distribute such revised Commitment Schedule to each of the Lenders and the Borrower, whereupon such revised Commitment Schedule shall replace the old Commitment Schedule and become part of this Agreement.  

SECTION 2.10.  Repayment and Amortization of Loans; Evidence of Debt.   

(a)The Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Revolving Lender the then unpaid principal amount of each Revolving Loan on the Revolving Credit Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Revolving Credit Maturity Date and the fifth Business Day after such Swingline Loan is made; provided that on each date that a Revolving Loan is made, the Borrower shall repay all Swingline Loans then outstanding and the proceeds of any such Revolving Loan shall be applied by the Administrative Agent to repay any Swingline Loans outstanding.

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

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(c)The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto, if any, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.

(d)The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrower to repay the Loans in accordance with the terms of this Agreement.

(e)Any Lender may request that Loans made by it be evidenced by a promissory note.  In such event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to such Lender (or, if requested by such Lender, to such Lender and its registered assigns) and in a form approved by the Administrative Agent.  Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form.

SECTION 2.11.  Prepayment of Loans .  

(a)The Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with paragraph (e) of this Section and, if applicable, payment of any break funding expenses under Section 2.16.

(b)In the event and on such occasion that the Aggregate Revolving Exposure exceeds the aggregate Revolving Commitments, the Borrower shall prepay the Revolving Loans, and/or LC Exposure and/or Swingline Loans (or, if no such Borrowings are outstanding, deposit cash collateral in the LC Collateral Account in an aggregate amount equal to such excess, in accordance with Section 2.06(j)).

(c)In the event and on each occasion that any Net Proceeds are received by or on behalf of any Loan Party or any Subsidiary in respect of any Prepayment Event, the Borrower shall, immediately after such Net Proceeds are received by any Loan Party or Subsidiary, prepay the Obligations and cash collateralize the LC Exposure as set forth in Section 2.11(d) below in an aggregate amount equal to 100% of such Net Proceeds, provided that, if the Borrower shall deliver to the Administrative Agent a certificate of a Financial Officer to the effect that the Loan Parties intend to apply the Net Proceeds from any such Prepayment Event (or a portion thereof specified in such certificate), within 180 days after receipt of such Net Proceeds, to acquire (or replace or rebuild) real property, equipment or other tangible or intangible assets (excluding inventory) to be used in the business of the Loan Parties, and certifying that no Default has occurred and is continuing, then no prepayment shall be required pursuant to this paragraph in respect of the Net Proceeds specified in such certificate, provided that to the extent of any such Net Proceeds that have not been so applied by the end of such 180‑day period, a prepayment shall be required at such time in an amount equal to such Net Proceeds that have not been so applied; provided further that if such Net Proceeds have been committed to a reinvestment prior to the end of such 180‑day period, the Borrower shall have an additional six months in which to apply such Net Proceeds.

(d)All prepayments required to be made pursuant to Section 2.11(c) shall be applied, first to prepay the Revolving Loans (including Swingline Loans) with a corresponding reduction in the Revolving Commitments and second to cash collateralize outstanding LC Exposure.  

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(e)The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by fax) or through ElectronicSystemof any prepayment under this Section:  (i) in the case of prepayment of a Eurodollar Borrowing, not later than 12:00 p.m., Toronto time, three (3) Business Days before the date of prepayment,unless otherwise notified to the Administrative Agent in an Interest Election Request properly delivered by the Borrower in accordance with Section 2.08(b),(ii) in the case of prepayment of a CBFRBorrowing, not later than 12:00 p.m., Toronto time, one (1) Business Day beforethe date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 p.m., Toronto time, on the date of prepayment.  Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that if a notice of prepayment is given in connection with a conditional notice of termination of the Revolving Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09.  Promptly following receipt of any such notice, the Administrative Agent shall advise the Lenders of the contents thereof.   Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Borrowing of the same Type as provided in Section 2.02, except as necessary to apply fully the required amount of a mandatory prepayment.  Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing.  Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.

SECTION 2.12.  Fees.   

(a)The Borrower agrees to pay to the Administrative Agent a commitment fee for the account of each Revolving Lender, which shall accrue at the Applicable Rate on the daily amount of the undrawn portion of the Revolving Commitment of such Lender during the period from and including the Effective Date to but excluding the date on which the Lenders’ Revolving Commitments terminate; it being understood that the LC Exposure of a Lender shall be included and the Swingline Exposure of a Lender shall be excluded in the drawn portion of the Revolving Commitment of such Lender for purposes of calculating the commitment fee.  Accrued commitment fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Revolving Commitments terminate, commencing on the first such date to occur after the date hereof.  All commitment fees shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  

(b)The Borrower agrees to pay (i) to the Administrative Agent for the account of each Revolving Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurodollar Revolving Loans on the daily amount of such Lender’s LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lender’s Revolving Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the daily amount of the LC Exposure attributable to Letters of Credit issued by such Issuing Bank (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date of termination of the Revolving Commitments and the date on which there ceases to be any LC Exposure, as well as the Issuing Bank’s standard fees and commissions with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder as set forth on Schedule 2.12.  Participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third Business Day following such last day, commencing on the first

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such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Revolving Commitments terminate and any such fees accruing after the date on which the Revolving Commitments terminate shall be payable on demand.  Any other fees payable to the Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after demand.  All participation fees and fronting fees shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).

(c)The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Borrower and the Administrative Agent.

(d)All fees payable hereunder shall be paid on the dates due, in immediately available funds, to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for distribution, in the case of commitment fees and participation fees, to the Lenders entitled thereto.  Fees paid shall not be refundable under any circumstances.

SECTION 2.13.  Interest .  

(a)The Loans comprising each CBFR Borrowing (including each Swingline Loan) shall bear interest at the CB Floating Rate plus the Applicable Rate.

(b)The Loans comprising each Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.

(c)Notwithstanding the foregoing, during the occurrence and continuance of a Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in interest rates), declare that (i) all Loans shall bear interest at two percent (2%) plus the rate otherwise applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount outstanding hereunder, such amount shall accrue at two percent (2%) plus the rate applicable to such fee or other obligation as provided hereunder.

(d)Accrued interest on each Loan (for CBFR Loans, accrued through the last day of the prior calendar month) shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Revolving Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of a CBFR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurodollar Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.

(e)All interest hereunder shall be computed on the basis of a year of 360 days, except that interest computed by reference to the CB Floating Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year), and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day).  The applicable CB Floating Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.

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SECTION 2.14.  Alternate Rate of Interest; Illegality.

(a)If prior to the commencement of any Interest Period for a Eurodollar Borrowing:

(i)the Administrative Agent determines (which determination shall be conclusive and binding absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable (including, without limitation, by means of an Interpolated Rate or because the LIBO Screen Rate is not available or published on a current basis) for such Interest Period; or

(ii)the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or Loan) included in such Borrowing for such Interest Period;

then the Administrative Agent shall give notice thereof to the Borrower and the Lenders through Electronic System as provided in Section 9.01 as promptly as practicable thereafter and, until the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (A) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into a CBFR Borrowing on the last day of the then current Interest Period applicable thereto, and (B) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as a CBFR Borrowing.

(b)If any Lender determines that any Requirement of Law has made it unlawful, or if any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable lending office to make, maintain, fund or continue any Eurodollar Borrowing, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, any obligations of such Lender to make, maintain, fund or continue Eurodollar Loans or to convert CBFR Borrowings to Eurodollar Borrowings will be suspended until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, the Borrower will upon demand from such Lender (with a copy to the Administrative Agent), either prepay or convert all Eurodollar Borrowings of such Lender to CBFR Borrowings, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Borrowings to such day, or immediately, if such Lender may not lawfully continue to maintain such Loans.  Upon any such prepayment or conversion, the Borrower will also pay accrued interest on the amount so prepaid or converted.

(c)If at any time the Administrative Agent determines (which determination shall be conclusive absent manifest error) that (i) the circumstances set forth in clause (a)(i) have arisen and such circumstances are unlikely to be temporary or (ii) the circumstances set forth in clause (a)(i) have not arisen but either (w) the supervisor for the administrator of the LIBO Screen Rate has made a public statement that the administrator of the LIBO Screen Rate is insolvent (and there is no successor administrator that will continue publication of the LIBO Screen Rate), (x) the administrator of the LIBO Screen Rate has made a public statement identifying a specific date after which the LIBO Screen Rate will permanently or indefinitely cease to be published by it (and there is no successor administrator that will continue publication of the LIBO Screen Rate), (y) the supervisor for the administrator of the LIBO Screen Rate has made a public statement identifying a specific date after which the LIBO Screen Rate will permanently or indefinitely cease to be published or (z) the supervisor for the administrator of the LIBO Screen Rate or a Governmental Authority having jurisdiction over the Administrative Agent has made a public statement identifying a specific date after which the LIBO Screen Rate may no longer be

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used for determining interest rates for loans, then the Administrative Agent and the Borrower shall endeavor to establish an alternate rate of interest to the LIBO Rate that gives due consideration to the then prevailing market convention for determining a rate of interest for syndicated loans in the United States at such time, and shall enter into an amendment to this Agreement to reflect such alternate rate of interest and such other related changes to this Agreement as may be applicable (but, for the avoidance of doubt, such related changes shall not include a reduction of the Applicable Rate).  Notwithstanding anything to the contrary in Section 9.02, such amendment shall become effective without any further action or consent of any other party to this Agreement so long as the Administrative Agent shall not have received, within five (5) Business Days of the date notice of such alternate rate of interest is provided to the Lenders, a written notice from the Required Lenders of each Class stating that such Required Lenders object to such amendment.  Until an alternate rate of interest shall be determined in accordance with this clause (c) (but, in the case of the circumstances described in clause (ii) of the first sentence of this Section 2.14(c), only to the extent the LIBO Screen Rate for such Interest Period is not available or published at such time on a current basis), (x) any Interest Election Request that requests the conversion of any Borrowing to, or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective and any such Eurodollar Borrowing shall be repaid or converted into a CBFRBorrowing on the last day of the then current Interest Period applicable thereto, and (y) if any Borrowing Request requests a Eurodollar Borrowing, such Borrowing shall be made as a CBFRBorrowing; providedthat if such alternate rate of interest shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.

SECTION 2.15.  Increased Costs.   (a) If any Change in Law shall:

(i)impose, modify or deem applicable any reserve, special deposit, liquidity or similar requirement (including any compulsory loan requirement, insurance charge or other assessment) against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or

(ii)impose on any Lender or the Issuing Bank or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such Lender or any Letter of Credit or participation therein; or

(iii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto;

and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, continuing, converting into or maintaining any Loan (or of maintaining its obligation to make any such Loan) or to increase the cost to such Lender, the Issuing Bank or such other Recipient of participating in, issuing or maintaining any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender, the Issuing Bank or such other Recipient hereunder (whether of principal, interest or otherwise), then the Borrower will pay to such Lender, the Issuing Bank or such other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, the Issuing Bank or such other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)If any Lender or the Issuing Bank determines that any Change in Law regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if any, as a consequence of this Agreement, the Revolving Commitments of or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit

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issued by the Issuing Bank, to a level below that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company with respect to capital adequacy and liquidity), then from time to time the Borrower will pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

(c)A certificate of a Lender or the Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the Issuing Bank, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.  

(d)Failure or delay on the part of any Lender or the Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right to demand such compensation; provided that the Borrower shall not be required to compensate a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor; provided further that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 270-day period referred to above shall be extended to include the period of retroactive effect thereof.

SECTION 2.16.  Break Funding Payments.   In the event of (a) the payment of any principal of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.09(d) and is revoked in accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19 or 9.02(d), then, in any such event, the Borrower shall compensate each Lender for the loss, cost and expense attributable to such event.  In the case of a Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Eurodollar Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Eurodollar Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Eurodollar Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and period from other banks in the eurodollar market.  A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the Borrower and shall be conclusive absent manifest error.  The Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

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SECTION 2.17.  Withholding of Taxes; Gross-Up.  

(a)Payments Free of Taxes.  Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable law.  If any applicable law (as determined in the good faith discretion of an applicable withholding agent) requires the deduction or withholding of any Tax from any such payment by a withholding agent, then the applicable withholding agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section 2.17), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.

(b)Payment of Other Taxes by Loan Parties.  The Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for, Other Taxes.

(c)Evidence of Payment.  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority pursuant to this Section 2.17, such Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment, or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(d)Indemnification by the Loan Parties.  The Loan Parties shall jointly and severally indemnify each Recipient, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Loan Party by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(e)Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (ii) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.04(c) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f)Status of Lenders.  Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the

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Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 2.17(f)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(g)Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 2.17 (including by the payment of additional amounts pursuant to this Section 2.17), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.17 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (g) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts giving rise to such refund had never been paid.  This paragraph (g) shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(h)Survival.  Each party’s obligations under this Section 2.17 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Revolving Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document (including the Payment in Full of the Secured Obligations).

(i)Defined Terms.  For purposes of this Section 2.17, the term “applicable law” includes FATCA.

SECTION 2.18.  Payments Generally; Allocation of Proceeds; Sharing of Setoffs .  

(a)The Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Sections 2.15, 2.16 or 2.17, or otherwise) prior to 3:00 p.m., Toronto time, on the date when due, in immediately available funds, without setoff, recoupment or counterclaim.  Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon.  All such payments shall be made to the Administrative Agent at its offices at 66 Wellington Street West, Floor 45 Toronto, Ontario, M5K 1E7, Canada, except payments to be made directly to the Issuing Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto.  The Administrative Agent shall

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distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof.  Unless otherwise provided for herein, if any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension.  All payments hereunder shall be made in dollars.  

(b)Any proceeds of Collateral received by the Administrative Agent (i) not constituting either (A) a specific payment of principal, interest, fees or other sum payable under the Loan Documents (which shall be applied as specified by the Borrower), or (B) a mandatory prepayment (which shall be applied in accordance with Section 2.11) or (ii) after an Event of Default has occurred and is continuing and the Administrative Agent so elects or the Required Lenders so direct, shall be applied ratably first, to pay any fees, indemnities, or expense reimbursements then due to the Administrative Agent, the Swingline Lender and the Issuing Bank from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), second, to pay any fees, indemnities, or expense reimbursements then due to the Lenders from the Borrower (other than in connection with Banking Services Obligations or Swap Agreement Obligations), third, to pay interest then due and payable on the Loans ratably, fourth, to prepay principal on the Loans and unreimbursed LC Disbursements and to pay any amounts owing in respect of Swap Agreement Obligations and Banking Services Obligations up to and including the amount most recently provided to the Administrative Agent pursuant to Section 2.22, ratably, fifth, to pay an amount to the Administrative Agent equal to one hundred five percent (105%) of the aggregate LC Exposure, to be held as cash collateral for such Obligations, and sixth, to the payment of any other Secured Obligation due to the Administrative Agent or any Lender from the Borrower or any other Loan Party.Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower, or unless a Default is in existence, neither the Administrative Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan of a Class, except (i) on the expiration date of the Interest Period applicable thereto, or (ii) in the event, and only to the extent, that there are no outstanding CBFR Loans of the same Class and, in any such event, the Borrower shall pay the break funding payment required in accordance with Section 2.16. The Administrative Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.  

Notwithstanding the foregoing, Secured Obligations arising under Banking Services Obligations or Swap Agreement Obligations shall be excluded from the application described above and paid in clause sixth if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may have reasonably requested from the applicable provider of such Banking Services or Swap Agreements.

(c)At the election of the Administrative Agent, all payments of principal, interest, LC Disbursements, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees, costs and expenses pursuant to Section 9.03), and other sums payable under the Loan Documents, may be paid from the proceeds of Borrowings made hereunder, whether made following a request by the Borrower pursuant to Section 2.03 or 2.05 or a deemed request as provided in this Section or may be deducted from any deposit account of the Borrower maintained with the Administrative Agent.  The Borrower hereby authorizes the Administrative Agent to charge any deposit account of the Borrower maintained with the Administrative Agent for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.

(d)If, except as otherwise expressly provided herein, any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or participations in LC Disbursements resulting in such Lender receiving payment of

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a greater proportion of the aggregate amount of its Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other similarly situated Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Loans and participations in LC Disbursements and Swingline Loansof other Lenders to the extent necessary so that the benefit of all such payments shall be shared by all such Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements or Swingline Loansto any assignee or participant, other than to the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).  The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against the Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of the Borrower in the amount of such participation.

(e)Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the NYFRB Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(f)The Administrative Agent from time to time or promptly after the Borrower’s reasonable written request will provide the Borrower with account statements or invoices with respect to any of the Secured Obligations (the “Statements”).  The Administrative Agent is under no duty or obligation to provide Statements, which, if provided, will be solely for the Borrower’s convenience.  Statements may contain estimates of the amounts owed during the relevant billing period, whether of principal, interest, fees or other Secured Obligations.  If the Borrower pays the full amount indicated on a Statement on or before the due date indicated on such Statement, the Borrower shall not be in default of payment with respect to the billing period indicated on such Statement; provided that acceptance by the Administrative Agent, on behalf of the Lenders, of any payment that is less than the total amount actually due at that time (including but not limited to any past due amounts) shall not constitute a waiver of the Administrative Agent’s or the Lenders’ right to receive payment in full at another time.

SECTION 2.19.  Mitigation Obligations; Replacement of Lenders.

(a)If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office of such Lender for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable

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pursuant to Sections 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)  If any Lender requests compensation under Section 2.15, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights (other than its existing rights to payments pursuant to Sections 2.15 or 2.17) and obligations under this Agreement and other Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Borrower shall have received the prior written consent of the Administrative Agent (and in circumstances where its consent would be required under Section 9.04, the Issuing Bank and the Swingline Lender), which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments.  A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.  Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (b) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to and be bound by the terms thereof; provided that following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

SECTION 2.20.  Defaulting Lenders.

Notwithstanding any provision of this Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply for so long as such Lender is a Defaulting Lender:

(a)fees shall cease to accrue on the unfunded portion of the Revolving Commitment of such Defaulting Lender pursuant to Section 2.12(a);

(b)any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 2.18(b) or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 9.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to any Issuing Bank or Swingline Lender hereunder; third, to cash collateralize

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the Issuing Banks’ LC Exposure with respect to such Defaulting Lender in accordance with this Section; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (x) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (y) cash collateralize the Issuing Banks’ future LC Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with this Section; sixth, to the payment of any amounts owing to the Lenders, the Issuing Banks or Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the Issuing Banks or Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement or under any other Loan Document; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement or under any other Loan Document; and eighth, to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or LC Disbursements in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and LC Disbursements owed to, all non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or LC Disbursements owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in the Borrower’s obligations corresponding to such Defaulting Lender’s LC Exposure and Swingline Loans areheld by the Lenders pro rata in accordance with the Revolving Commitments without giving effect to clause (d) below.  Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post cash collateral pursuant to this Section shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto;

(c)such Defaulting Lender shall not have the right to vote on any issue on which voting is required (other than to the extent expressly provided in Section 9.02(b)) and the Revolving Commitment and Revolving Exposure of such Defaulting Lender shall not be included in determining whether the Required Lenders have taken or may take any action hereunder or under any other Loan Document; provided that except as otherwise provided in Section 9.02, this clause (c) shall not apply to the vote of a Defaulting Lender in the case of an amendment, waiver or other modification requiring the consent of such Lender or each Lender directly affected thereby;

(d)if any Swingline Exposure or LC Exposure exists at the time such Lender becomes a Defaulting Lender then:

(i)all or any part of the Swingline Exposure and LC Exposure of such Defaulting Lender (other than the portion of such Swingline Exposure referred to in clause (b) of the definition of such term) shall be reallocated among the non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the extent that such reallocation does not, as to any non-Defaulting Lender, cause such non-Defaulting Lender’s Revolving Exposure to exceed its Revolving Commitment;  

(ii)if the reallocation described in clause (i) above cannot, or can only partially, be effected, the Borrower shall within one (1) Business Day following notice by the Administrative Agent (x) first, prepay such Swingline Exposure and (y) second, cash collateralize, for the benefit of the Issuing Bank, the Borrower’s obligations corresponding to such Defaulting Lender’s LC

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Exposure (after giving effect to any partial reallocation pursuant to clause (i) above) in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is outstanding;

(iii)if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure pursuant to clause (ii) above, the Borrower shall not be required to pay any fees to such Defaulting Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the period such Defaulting Lender’s LC Exposure is cash collateralized;

(iv)if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the fees payable to the Lenders pursuant to Sections 2.12(a) and 2.12(b) shall be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; and

(v)if all or any portion of such Defaulting Lender’s LC Exposure is neither reallocated nor cash collateralized pursuant to clause (i) or (ii) above, then, without prejudice to any rights or remedies of the Issuing Bank or any other Lender hereunder, all letter of credit fees payable under Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until and to the extent that such LC Exposure is reallocated and/or cash collateralized; and

(e)so long as such Lender is a Defaulting Lender, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend, renew, extend or increase any Letter of Credit, unless it is satisfied that the related exposure and such Defaulting Lender’s then outstanding LC Exposure will be 100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower in accordance with Section 2.20(d), and Swingline Exposure related to any such newly made Swingline Loan or LC Exposure related to any newly issued or increased Letter of Credit shall be allocated among non-Defaulting Lenders in a manner consistent with Section 2.20(d)(i) (and such Defaulting Lender shall not participate therein).

If (i) a Bankruptcy Event or a Bail-In Action with respect to the Parent of any Lender shall occur following the date hereof and for so long as such event shall continue or (ii) the Swingline Lender or the Issuing Bank has a good faith belief that any Lender has defaulted in fulfilling its obligations under one or more other agreements in which such Lender commits to extend credit, the Swingline Lender shall not be required to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase any Letter of Credit, unless the Swingline Lender or the Issuing Bank, as the case may be, shall have entered into arrangements with the Borrower or such Lender, satisfactory to the Swingline Lender or the Issuing Bank, as the case may be, to defease any risk to it in respect of such Lender hereunder.

In the event that each of the Administrative Agent, the Borrower, the Swingline Lender and the Issuing Bank agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be readjusted to reflect the inclusion of such Lender’s Revolving Commitment and on the date of such readjustment such Lender shall purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the Administrative Agent shall determine may be necessary in order for such Lender to hold such Loans in accordance with its Applicable Percentage.

SECTION 2.21.  Returned Payments. If, after receipt of any payment which is applied to the payment of all or any part of the Obligations (including a payment effected through exercise of a right of setoff), the Administrative Agent or any Lender is for any reason compelled to surrender such payment or proceeds to any Person because such payment or application of proceeds is invalidated, declared fraudulent, set aside, determined to be void or voidable as a preference, impermissible setoff, or a diversion of trust funds, or for any other reason (including pursuant to any settlement entered into by the

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Administrative Agent or such Lender in its discretion), then the Obligations or part thereof intended to be satisfied shall be revived and continued and this Agreement shall continue in full force as if such payment or proceeds had not been received by the Administrative Agent or such Lender.  The provisions of this Section 2.21 shall be and remain effective notwithstanding any contrary action which may have been taken by the Administrative Agent or any Lender in reliance upon such payment or application of proceeds.  The provisions of this Section 2.21 shall survive the termination of this Agreement.

SECTION 2.22.  Banking Services and Swap Agreements.  Each Lender or Affiliate thereof providing Banking Services for, or having Swap Agreements with, any Loan Party or any Subsidiary or Affiliate of a Loan Party shall deliver to the Administrative Agent, promptly after entering into such Banking Services or Swap Agreements, written notice setting forth the aggregate amount of all Banking Services Obligations and Swap Agreement Obligations of such Loan Party or Subsidiary or Affiliate thereof  to such Lender or Affiliate (whether matured or unmatured, absolute or contingent).  In furtherance of that requirement, each such Lender or Affiliate thereof shall furnish the Administrative Agent, from time to time after a significant change therein or upon a request therefor, a summary of the amounts due or to become due in respect of such Banking Services Obligations and Swap Agreement Obligations.  The most recent information provided to the Administrative Agent shall be used in determining which tier of the waterfall, contained in Section 2.18(b), such Banking Services Obligations and/or Swap Agreement Obligations will be placed.

ARTICLE III

Representations and Warranties

Each Loan Party represents and warrants to the Lenders that (and where applicable, agrees):

SECTION 3.01.  Organization; Powers .  Each Loan Party and each Subsidiary is duly organized or formed, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.  

SECTION 3.02.  Authorization; Enforceability .  The Transactions are within each Loan Party’s corporate or other organizational powers and have been duly authorized by all necessary corporate or other organizational actions and, if required, actions by equity holders.  Each Loan Document to which each Loan Party is a party has been duly executed and delivered by such Loan Party and constitutes a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

SECTION 3.03.  Governmental Approvals; No Conflicts.   The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any Requirement of Law applicable to any Loan Party or any Subsidiary, (c) will not violate or result in a default under any Material Agreement, or give rise to a right thereunder to require any payment to be made by any Loan Party or any Subsidiary, and (d) will not result in the creation or imposition of, or other requirement to create, any Lien on any asset of any Loan Party or any Subsidiary, except Liens created pursuant to the Loan Documents.

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SECTION 3.04.  Financial Condition; No Material Adverse Change.  

(a)The Borrower has heretofore furnished to the Lenders its consolidated balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2018, reported on by KPMG, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended June 30, 2019, certified by its Financial Officer. Such financial statements present fairly, in all Material respects, the financial position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP or IFRS, as applicable, subject to normal year end audit adjustments all of which, when taken as a whole, would not be materially adverse and the absence of footnotes in the case of the statements referred to in clause (ii) above.

(b)No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2018.

SECTION 3.05.  Properties .  

(a)As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by any Loan Party.  Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no default by any party to any such lease or sublease exists.  Each of the Loan Parties and each Subsidiary has good and indefeasible title to, or valid leasehold interests in, all of its real and personal property, free of all Liens other than those permitted by Section 6.02.  

(b)Each Loan Party and each Subsidiary owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05, and the use thereof by each Loan Party and each Subsidiary does not infringe in any Material respect upon the rights of any other Person, and each Loan Party’s and each Subsidiary’s rights thereto are not subject to any licensing agreement or similar arrangement.

SECTION 3.06.  Litigation and Environmental Matters.   

(a)There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting any Loan Party or any Subsidiary (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect (other than the Disclosed Matters set forth on Schedule 3.06) or (ii) that involve any Loan Document or the Transactions in any material respect.

(b)Except for the Disclosed Matters, (i) no Loan Party or any Subsidiary has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability and (ii) and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party or any  Subsidiary (A) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law (B) has become subject to any Environmental Liability, (C) has received notice of any claim with respect to any Environmental Liability or (D) knows of any basis for any Environmental Liability.

(c)Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or materially increased the likelihood of, a Material Adverse Effect.

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SECTION 3.07.  Compliance with Laws and Agreements; No Default.  Except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, each Loan Party and each Subsidiary is in compliance with all Requirements of Law (including Health Care Laws) applicable to it or its property.  No Default has occurred and is continuing.

SECTION 3.08.  Investment Company Status.   No Loan Party or any Subsidiary is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.

SECTION 3.09.  Taxes.   Each Loan Party and each Subsidiary has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which such Loan Party or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not be expected to result in a Material Adverse Effect.

SECTION 3.10.  ERISA .  No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect. The present value of all accumulated benefit obligations under each Plan (based on the assumptions used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of the most recent financial statements reflecting such amounts, exceed the fair market value of the assets of such Plan.

SECTION 3.11.  Disclosure.   None of the reports, financial statements, certificates or other information (including, without limitation, any information memorandum prepared at the reasonable request of the Arranger) furnished by or on behalf of any Loan Party or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) contains any Material misstatement of fact or omits to state any Material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Loan Parties represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of the Effective Date.

SECTION 3.12.  Material Agreements .  All Material Agreements are listed on Schedule 3.12.  No Loan Party or any Subsidiary is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Material Agreement.

SECTION 3.13.  Solvency.   (a)  Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will be sufficient to pay its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) no Loan Party will have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.

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(b)No Loan Party intends to, nor will permit any Subsidiary to, and no Loan Party believes that it or any Subsidiarywill, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.

SECTION 3.14.  Insurance.   Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and their Subsidiaries as of the Effective Date.  As of the Effective Date, all premiums in respect of such insurance have been paid.  The Loan Parties believe that the insurance maintained by or on behalf of the Loan Parties and their Subsidiaries is adequate and is customary for companies engaged in the same or similar businesses operating in the same or similar locations.  

SECTION 3.15. Capitalization and Subsidiaries.   Schedule 3.15(a) sets forth (a) a correct and complete list of the name and relationship to the Borrower and each other Loan Party of each Subsidiary (including the amount and percentage of Equity Interests owned by the Borrower or each other Loan Party, as applicable, directly or indirectly, in each Subsidiary), (b) a true and complete listing of each class of each of the Borrower’s authorized Equity Interests, of which all of such issued Equity Interests are validly issued, outstanding, fully paid and non-assessable, and owned beneficially and of record by the Persons identified on Schedule 3.15, and (c) the type of entity of the Borrower and each Subsidiary.  All of the issued and outstanding Equity Interests owned by any Loan Party have been (to the extent such concepts are relevant with respect to such ownership interests) duly authorized and issued and are fully paid and non-assessable. Schedule 3.15(b) sets forth a complete and accurate organization chart, showing the ownership structure of the Borrower and each Subsidiary as of the Effective Date.

SECTION 3.16. Security Interest in Collateral .  The provisions of the Collateral Documents, taken collectively, create legal and valid Liens on all the Collateral in favor of the Administrative Agent, for the benefit of the Secured Parties, and such Liens constitute perfected and continuing Liens on the Collateral, securing the Secured Obligations, enforceable against the applicable Loan Party and all third parties, and having priority over all other Liens on the Collateral except in the case of (a) Permitted Encumbrances, to the extent any such Permitted Encumbrances would have priority over the Liens in favor of the Administrative Agent pursuant to any applicable law or agreement and (b) Liens perfected only by possession (including possession of any certificate of title), to the extent the Administrative Agent has not obtained or does not maintain possession of such Collateral.

SECTION 3.17. Employment Matters .  As of the Effective Date, there are no strikes, lockouts or slowdowns against any Loan Party or any Subsidiary pending or, to the knowledge of any Loan Party, threatened.  The hours worked by and payments made to employees of the Loan Parties and their Subsidiaries have not been in violation of the Fair Labor Standards Act or any other applicable federal, state, local or foreign law dealing with such matters. All payments due from any Loan Party or any Subsidiary, or for which any claim may be made against any Loan Party or any Subsidiary, on account of wages and employee health and welfare insurance and other benefits, have been paid or accrued as a liability on the books of such Loan Party or such Subsidiary.  

SECTION 3.18.Margin Regulations .  No Loan Party is engaged and will not engage, principally or as one of its important activities, in the business of purchasing or carrying Margin Stock, or extending credit for the purpose of purchasing or carrying Margin Stock, and no part of the proceeds of any Borrowing or Letter of Credit hereunder will be used to buy or carry any Margin Stock.  Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than 25% of the value of the assets (either of any Loan Party only or of the Loan Parties and their Subsidiaries on a consolidated basis) will be Margin Stock.

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SECTION 3.19.Use of Proceeds .  The proceeds of the Loans have been used and will be used, whether directly or indirectly as set forth in Section 5.08.

SECTION 3.20.No Burdensome Restrictions .  No Loan Party or Subsidiary is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.10.

SECTION 3.21.Anti-Corruption Laws and Sanctions.  Each Loan Party has implemented and maintains in effect policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions, and such Loan Party, its Subsidiaries and their respective officers and directors and, to the knowledge of such Loan Party, its employees and agents, are in compliance with Anti-Corruption Laws and applicable Sanctions in all Material respects and are not knowingly engaged in any activity that could reasonably be expected to result in any Loan Party being designated as a Sanctioned Person. None of (a) any Loan Party, any Subsidiary, any of their respective directors or officers or employees, or (b) to the knowledge of any such Loan Party or Subsidiary, any agent of such Loan Party or any Subsidiary that will act in any capacity in connection with or benefit from the credit facility established hereby, is a Sanctioned Person.   No Borrowing or Letter of Credit, use of proceeds, Transaction or other transaction contemplated by this Agreement or the other Loan Documents will violate Anti-Corruption Laws or applicable Sanctions.

SECTION 3.22.  EEA Financial Institutions .  No Loan Party is an EEA Financial Institution.

SECTION 3.23.  Plan Assets; Prohibited Transactions .  None of the Loan Parties or any of their Subsidiaries is an entity deemed to hold “plan assets” (within the meaning of the Plan Asset Regulations), and neither the execution, delivery or performance of the transactions contemplated under this Agreement, including the making of any Loan and the issuance of any Letter of Credit hereunder, will give rise to a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

SECTION 3.24. Affiliate Transactions.   Except for the Managed Entities or as set forth on Schedule 3.24 and for Persons that are engaged in the delivery of health care services to patients for which a Loan Party or any of its Subsidiaries performs management, administrative and/or business services that would, but for the $[REDACTED] threshold referenced in the definition of “Managed Entities”, constitute Managed Entities, as of the date of this Agreement, there are no existing or proposed agreements, arrangements, understandings or transactions between any Loan Party and any of the officers, members, managers, directors, stockholders, parents, holders of other Equity Interests, employees or Affiliates (other than Subsidiaries) of any Loan Party or any members of their respective immediate families, and none of the foregoing Persons are directly or indirectly indebted to or have any direct or indirect ownership, partnership, or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party has a business relationship or which competes with any Loan Party.

SECTION 3.25.  Health Care Matters.  Except as set forth on Schedule 3.25 and without limiting or qualifying Section 3.07 or any other provision of this Agreement:

(a)Compliance with Health Care Laws and Third Party Payor Programs.  Each Loan Party, each Subsidiary and to the knowledge of the Loan Parties, each Managed Entity, is in Material compliance with all applicable Health Care Laws and applicable requirements of Third Party Payor Programs.  

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(b)Health Care Permits.  Each Loan Party, each Subsidiary, and to the knowledge of the Loan Parties, each Managed Entity, holds all Material Health Care Permits necessary for it to conduct its current business or operations.  All such Health Care Permits are in full force and effect and there is no default under, violation of, or other noncompliance in any Material respect with the terms and conditions of any such Health Care Permit.  To the knowledge of the Loan Parties, no condition exists or event has occurred which, in itself or with the giving of notice or lapse of time or both, could reasonably be expected to result in the suspension, revocation, termination, restriction, limitation, modification or nonrenewal of any such Health Care Permit.  No Governmental Authority has taken, or to the knowledge of the Loan Parties and Subsidiaries, intends to take, action to suspend, revoke, terminate, place on probation, restrict, limit, modify or not renew any Material Health Care Permit of a Loan Party, Subsidiaryor Managed Entity.  

(c)Licensed Providers.  To the knowledge of the Loan Parties, each Licensed Provider holds all professional licenses and other Material Health Care Permits required in the performance of such Licensed Provider’s duties for the Loan Party, Subsidiary or Managed Entity, and, each such Health Care Permit is in full force and effect.  To the knowledge of the Loan Parties, no suspension, revocation, termination, impairment, modification or nonrenewal of any such Health Care Permit is pending or threatened in writing.

(d)Proceedings; Audits.  To the knowledge of the Loan Parties, as of the Effective Date, there are no pending or threatened investigations, inquiries, legal suits, claims, audits, proceedings or actions (in each case, whether civil, criminal, administrative or investigative) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Authority (collectively, a “Proceeding”) against any Loan Party, Subsidiary or, to the knowledge of the Loan Parties, any Managed Entity or Licensed Providers, relating to any actual or alleged noncompliance with any applicable Health Care Law or applicable requirement of any Third Party Payor Program. As of the Effective Date, there currently exist no Material restrictions, deficiencies, required plans of correction or other such remedial measures with respect to (i) any Health Care Permit of any Loan Party or Subsidiary, or to the knowledge of the Loan Parties, a Managed Entity, or (ii) the participation by any Loan Party or Subsidiary or to the knowledge of the Loan Parties, a Managed Entity, in any Third Party Payor Program.

(e)Third Party Payor Authorizations.  Each Loan Party and each Subsidiary and to the knowledge of each Loan Party, each Managed Entity, holds in full force and effect, all Third Party Payor Authorizations (if any) necessary to participate in and be reimbursed by all Third Party Payor Programs in which it participates.  To the knowledge of any Loan Party, there is no investigation, audit, claim review, or other action pending or threatened in writing, which could result in a suspension, revocation, termination, restriction, limitation, modification or nonrenewal of any Third Party Payor Authorization or result in the exclusion of a Loan Party, Subsidiary or Managed Entity from any Third Party Payor Program.

(f)Overpayments.  No Loan Party or Subsidiary or to the knowledge of the Loan Parties, any Managed Entity, (i) has knowingly retained a Material overpayment received from, or failed to refund any Material amount due to, any Third Party Payor Program in Material violation of any applicable Health Care Law; or (ii) has received written notice of any Material overpayment or refunds due to any Third Party Payor Program in Material violation of any applicable Health Care Law.

(g)Material Statements.  No Loan Party or Subsidiary or to the knowledge of the Loan Parties, any Managed Entity or any officer, affiliate, employee or agent of a Loan Party or Subsidiary or Managed Entity, has made an untrue statement of a Material fact or fraudulent statement to any Governmental Authority, failed to disclose a Material fact that must be disclosed to any Governmental Authority, or committed an act, made a statement or failed to make a statement that, at the time such statement, disclosure or failure to disclose occurred, that individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.

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(h)Prohibited Transactions.  No Loan Party, Subsidiary, nor, to the knowledge of the Loan Parties, any Managed Entityor officer, affiliate or managing employee of a Loan Party, Subsidiaryor Managed Entity in such capacity on behalf of any such entity, directly or indirectly, has (i) offered or paid or solicited or received any remuneration, in cash or in kind, or made any financial arrangements, in Material violation of any applicable Health Care Law; (ii) given any gift or gratuitous payment of any kind, nature or description (whether in money, property or services) in Material violation of any applicable Health Care Law; (iii) made any contribution, payment or gift of funds or property to, or for the private use of, any governmental official, employee or agent where either the contribution, payment or gift or the purpose of such contribution, payment or gift was illegal in any Material respect under the applicable laws of any Governmental Authority having jurisdiction over such payment, contribution or gift; (iv) established or maintained any unrecorded fund or asset for any purpose or made any misleading, false or artificial entries on any of its books or records in Material violation of applicable Health Care Laws; or (v) made any payment to any person with the intention that any part of such payment would be in Material violation of any applicable Health Care Law.  To the knowledge of the Loan Parties, as of the Effective Date, no person has filed or has threatened in writing to file against a Loan Party, Subsidiaryor Managed Entity, an action under any federal or state whistleblower statute related to alleged noncompliance with applicable Health Care Laws, including under the False Claims Act of 1863 (31 U.S.C. § 3729 et seq.).

(i)Exclusion.  No Loan Party nor any of its Subsidiaries, nor, to the knowledge of the Loan Parties, any Managed Entity, Licensed Providers or owner, officer, director, managing employee or person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. § 420.201) in a Loan Party, Subsidiary or Managed Entity, is (i) excluded from any Governmental Payor Program, (ii) “suspended” or “debarred” from selling products to the U.S. government or its agencies pursuant to the Federal Acquisition Regulation, relating to debarment and suspension applicable to federal government agencies generally (42 C.F.R. Subpart 9.4), (iii) debarred, disqualified, suspended or excluded from participation in any Third Party Payor Program or is listed on the General Services Administration list of excluded parties, nor, to the knowledge of the Loan Parties, is any such debarment, disqualification, suspension or exclusion threatened or pending, or (iv) made a party to any other action by any Governmental Authority that may prohibit it from selling products or providing services to any governmental or other purchaser pursuant to any federal, state or local laws or regulations.

(j)Corporate Integrity Agreement.  No Loan Party, Subsidiary or, to the knowledge of the Loan Parties, any Managed Entity, is a party to, or bound by, any individual integrity agreement, corporate integrity agreement, corporate compliance agreement or deferred prosecution agreement.

(k)Health Care Compliance Program.  Each Loan Party, Subsidiary and to the knowledge of the Borrower, each Managed Entity maintains and adheres to, in all Material respects, commercially reasonable compliance policies and procedures designed to promote compliance with and to detect, prevent, and address violations of all Material applicable Health Care Laws (the “Health Care Compliance Program”).  No Loan Party, Subsidiary or, to the knowledge of Borrower, Managed Entity is aware of any complaints from employees, independent contractors, vendors, physicians, customers, patients or other persons that could reasonably be considered to indicate a violation of Health Care Law.

(l)Managed Entities and Management Services Documents.  Schedule 3.25(l) contains a complete and accurate list of each Managed Entity as of the Effective Date. True and correct copies of all of the Management Services Documents (if any) have been provided to the Administrative Agent prior to the date hereof.  The Loan Parties and Subsidiaries are in compliance with their obligations in all Material respects under the Management Services Documents.  To the knowledge of Loan Parties and Subsidiaries, no Management Services Document Termination Event or other event entitling any party thereto to terminate any Management Services Document has occurred.  To the knowledge of Loan Parties and Subsidiaries, all other parties to each Management Services Document are in compliance in all Material respects with their respective obligations thereunder.  

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(m)Product Regulatory Compliance.  Without limiting or qualifying any of the foregoing:

(i)All the Products have been developed, tested, manufactured, distributed, marketed and sold in compliance in all Material respects with all applicable FDA Laws, including, without limitation, all requirements relating to pre-market notification, good manufacturing practices and quality system regulations (21 CFR Part 820), labeling, advertising, record-keeping, and adverse event reporting.

(ii)There have been no Product recalls or withdrawals by any Governmental Authority.  To the Knowledge of the Borrower, there are no Material design defects with respect to any Products.  No Loan Party or Managed Entity has been required to file, nor has filed, a notification or other report with any Governmental Authority concerning actual or potential hazards with respect to any Product under any applicable Requirement of Law.

(iii)No clinical trial or pre-clinical trial for which any Loan Party, Subsidiary or Managed Entity has any regulatory responsibilities under the FDCA, the Food and Drugs Act (Canada) or the Food and Drug Regulations (Canada) has been suspended, put on hold, or terminated prior to completion by the FDA or any other Governmental Authority as a result of any failure to perform, or violation of, such regulatory responsibilities by such Loan Party or Subsidiary.

(iii)No Loan Party or Product is subject to any active pending Material investigation by the FDA (or other Governmental Authority regulating the Products), or to the knowledge of the Loan Parties, Material investigation threatened in writing by the FDA (or other Governmental Authority regulating the Products).

(iv)No Loan Party, Subsidiary or Managed Entity has received or been subject to an FDA Form 483, warning letter, untitled letter, notice of violation or similar notice from the FDA or other Governmental Authority which remains unresolved and would be reasonably expected to result individually or in the aggregate in a Material Adverse Effect.

(v)Each Loan Party, Subsidiary and Managed Entity has made each required filing with the FDA (or other Governmental Authority regulating the Products), except where the failure to have made such a filing, or to have such filing valid and in full force and effect, has not had, and would not reasonably be expected to have, a Material Adverse Effect.

SECTION 3.26.  Information Privacy or Security Laws.  Without limiting or qualifying Section 3.07 or any other provision of this Agreement, except as could not be reasonably expected to result in a Material Adverse Effect, each of the Loan Parties and Subsidiaries, and to the knowledge of the Loan Parties, each Managed Entity, is in compliance with Information Privacy or Security Laws, and has taken commercially reasonable steps, consistent with industry standards, to the extent required by Requirements of Law, such that patient, health, protected or personally identifiable information is protected against unauthorized access, use, modification, disclosure or other misuse.  None of the Loan Parties or Subsidiaries, or, to the knowledge of the Loan Parties, any Managed Entity, has within the past three (3) years, suffered any breach of unsecured protected health information, received any written notice from the Office for Civil Rights for the U.S. Department of Health and Human Services or any other Governmental Authority regarding any allegation regarding its failure to comply with Information Privacy or Security Laws, nor made any notification of such a breach or failure to the media or the Secretary of the U.S.

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Department of Health and Human Services pursuant to Information Privacy or Security Laws, except as could not reasonably be expected to result in a Material Adverse Effect.  Each of the Loan Parties and Subsidiariesand, to the knowledge of the Loan Parties, each Managed Entity, in each case to the extent required by Information Privacy or Security Laws, has undertaken required or reasonable security risk assessments, surveys, audits, inventories, reviews, analyses and/or assessments and remediated any deficiencies identified thereby, and have provided training with respect to compliance with Information Privacy or Security Laws to their “workforce” and, except where failure to do so would not reasonably be expected to have a Material Adverse Effect, has entered into a business associate agreement with each third party acting as a “business associate” or “subcontractor” thereto (as such terms are defined in HIPAA).

SECTION 3.27.  Managed Entity Owner Physicians. Each person who owns a Managed Entity (each, an “Owner Physician”): (i) has been duly licensed and registered, and is in good standing by their state to engage in medical practice, and said license and registration have not been suspended, revoked or restricted in any manner, and (ii) to the extent such Owner Physician is engaged in the practice of medicine, such Owner Physician has had valid professional liability insurance in place in amounts not less than commercially reasonable levels and has not indicated any intent to terminate or reduce his or her professional liability coverage.

ARTICLE IV

Conditions

SECTION 4.01.  Effective Date .  The obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):

(a)Credit Agreement and Loan Documents.  The Administrative Agent (or its counsel) shall have received (i) from each party hereto counterparts of this Agreement signed on behalf of such party and (ii) duly executed copies of the Loan Documents and such other certificates, documents, instruments and agreements as the Administrative Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, including any promissory notes requested by a Lender pursuant to Section 2.10 payable to the order of each such requesting Lender and a written opinion of the Loan Parties’ counsel, addressed to the Administrative Agent, the Issuing Bank and the Lenders, all in form and substance satisfactory to the Administrative Agent.

(b)Financial Statements and Projections. The Lenders shall have received (i) audited consolidated financial statements of the Loan Parties and their Subsidiaries for the December 31, 2017 and December 31, 2018 fiscal years, (ii) unaudited interim consolidated financial statements of the Loan Parties and their Subsidiaries for each fiscal quarter ended after the date of the latest applicable financial statements delivered pursuant to clause (i) of this paragraph as to which such financial statements are available, and such financial statements shall not, in the reasonable judgment of the Administrative Agent, reflect any material adverse change in the consolidated financial condition of the Loan Parties and their Subsidiaries, as reflected in the audited, consolidated financial statements described in clause (i) of this paragraph and (iii) satisfactory Projections through the fiscal year ending December 31, 2021.

(c)Closing Certificates; Certified Certificate of Incorporation; Good Standing Certificates.  The Administrative Agent shall have received (i) a certificate of each Loan Party, dated the Effective Date and executed by its Secretary, Assistant Secretary or duly authorized

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officer, which shall (A) certify the resolutions of its Board of Directors, members or other body authorizing the execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by name and title and bear the signatures of the officers of such Loan Party authorized to sign the Loan Documents to which it is a party and, in the case of the Borrower, its Financial Officers, and (C) contain appropriate attachments, including the charter, articles or certificate of organization or incorporation of each Loan Party certified by the relevant authority of the jurisdiction of organization of such Loan Party and a true and correct copy of its bylaws or operating, management or partnership agreement, or other organizational or governing documents, and (ii) agood standing certificate for each Loan Party from its jurisdiction of organization.

(d)No Default Certificate.  The Administrative Agent shall have received a certificate, signed by a Financial Officer of the Borrower, dated as of the Effective Date (i) stating that no Default has occurred and is continuing, (ii) stating that the representations and warranties contained in the Loan Documents are true and correct as of such date, and (iii) certifying as to any other factual matters as may be reasonably requested by the Administrative Agent.

(e)Fees.  The Lenders and the Administrative Agent shall have received all fees required to be paid, and all expenses required to be reimbursed for which invoices have been presented (including the reasonable fees and expenses of legal counsel), on or before the Effective Date.  All such amounts will be paid with proceeds of Loans made on the Effective Date and will be reflected in the funding instructions given by the Borrower to the Administrative Agent on or before the Effective Date.

(f)Lien Searches.  The Administrative Agent shall have received the results of a recent lien search in form and substance satisfactory to the Administrative Agent.

(g)Pay-Off Letter.  The Administrative Agent shall have received satisfactory pay-off letters for all existing Indebtedness required to be repaid and which confirms that all Liens upon any of the property of the Loan Parties constituting Collateral will be terminated concurrently with such payment and all letters of credit issued or guaranteed as part of such Indebtedness shall have been cash collateralized or supported by a Letter of Credit.

(h)Funding Account.  The Administrative Agent shall have received a notice setting forth the deposit account of the Borrower (the “Funding Account”) to which the Administrative Agent is authorized by the Borrower to transfer the proceeds of any Borrowings requested or authorized pursuant to this Agreement.

(i)Solvency.  The Administrative Agent shall have received a solvency certificate signed by a Financial Officer dated the Effective Date in form and substance reasonably satisfactory to the Administrative Agent.

(j)Pledged Equity Interests; Stock Powers; Pledged Notes.  The Administrative Agent shall have received (i) the certificates representing the Equity Interests pledged pursuant to each Security Agreement, together with an undated stock or limited liability company power(s), as applicable, for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the Administrative Agent pursuant to each Security Agreement endorsed (without recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.

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(k)Filings, Registrations and Recordings.  The Administrative Agent shall have received such documents requested by the Administrative Agent in its sole discretion to be filed, registered or recorded reflecting the Administrative Agent’s perfected Lien on the Collateral described.

(l)Insurance.  The Administrative Agent shall have received evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent.

(m)Letter of Credit Application.  The Administrative Agent shall have received a properly completed letter of credit application (whether standalone or pursuant to a master agreement, as applicable) if the issuance of a Letter of Credit will be required on the Effective Date.  

(n)Legal Due Diligence. The Administrative Agent and its counsel shall have completed all legal due diligence, the results of which shall be satisfactory to the Administrative Agent in its sole discretion.

(o)Structure and Investment Documents. The corporate structure, ownership, capital structure, any other debt instruments, Material accounts and governing and constituent documents of the Loan Parties shall be delivered to and reasonably acceptable to the Administrative Agent.

(p)USA PATRIOT Act, Etc.  The Administrative Agent shall have received, (x) at least three (3) days prior to the Effective Date, all documentation and other information regarding the Borrowers requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, the Criminal Code (Canada) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) to the extent requested in writing of the Borrowers at least ten (10) days prior to the Effective Date, and (y) a properly completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.

(q)Governmental Authorizations and Consents. Each Loan Party shall have obtained all authorizations and consents of all Governmental Authorities and any other required Person, in each case that are necessary in connection with the transactions contemplated by the Loan Documents and the continuing operations of the Borrower and its Subsidiaries and each of the foregoing shall be in full force and effect and in form and substance reasonably  satisfactory to the Administrative Agent. There shall be no (i) injunctions or temporary restraining orders which, in the judgment of the Administrative Agent, would prohibit the making of the Loans on the Effective Date or (i) litigation which could reasonably be expected to result in a Material Adverse Effect on the Borrower and its Subsidiaries.

(r)Legal and Regulatory Matters. All legal (including any tax implications) and regulatory matters shall be satisfactory to the Administrative Agent and the Lenders, including, without limitation, compliance with all applicable requirements of the Regulations of the Board of Governors of the Federal Reserve System, including Regulations, T, U and X.

(s)Other Documents.  The Administrative Agent shall have received such other documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may have reasonably requested.

The Administrative Agent shall notify the Borrower, the Lenders and the Issuing Bank of the Effective Date, and such notice shall be conclusive and binding.  Notwithstanding the foregoing, the obligations of the Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00 p.m., Toronto time, on October 31, 2019 (and, in the event such conditions are not so satisfied or waived, the Revolving Commitments shall terminate at such time).

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SECTION 4.02.  Each Credit Event.  The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:

(a)The representations and warranties of the Loan Parties set forth in the Loan Documents shall be true and correct with the same effect as though made on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all Material respects only as of such specified date, and that any representation or warranty which is subject to any materiality qualifier shall be required to be true and correct in all respects).

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

(c)After giving effect to any Borrowing or the issuance, amendment, renewal or extension of any Letter of Credit, Availability shall not be less than zero.

(d)No event shall have occurred and no condition shall exist which has or could be reasonably expected to have a Material Adverse Effect.

Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrower on the date thereof as to the matters specified in paragraphs (a), (b), (c) and (d) of this Section.

Notwithstanding the failure to satisfy the conditions precedent set forth in paragraphs (a), (b), (c) or (d) of this Section, unless otherwise directed by the Required Lenders, the Administrative Agent may, but shall have no obligation to, continue to make Loans and an Issuing Bank may, but shall have no obligation to, issue, amend, renew or extend, or cause to be issued, amended, renewed or extended, any Letter of Credit for the ratable account and risk of Lenders from time to time if the Administrative Agent believes that making such Loans or issuing, amending, renewing or extending, or causing the issuance, amendment, renewal or extension of, any such Letter of Credit is in the best interests of the Lenders.

ARTICLE V

Affirmative Covenants

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 5.01.  Financial Statements; Other Information .  The Borrower will furnish to the Administrative Agent and each Lender:

(a)within one hundred twenty (120) days after the end of each fiscal year of the Borrower, the audited consolidated, and management prepared consolidating, in each case balance sheets of the Loan Parties and their Subsidiaries, and related statements of operations, stockholders’ equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, such consolidated financial statements reported on by KPMG or another firm of independent public accountants of recognized national standing (without a “going concern” or like qualification, commentary or exception, and without any qualification or exception as to the scope of such audit) to the effect

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that such consolidated financial statements present fairly in all Material respects the financial condition and results of operations of the Loan Parties and their Subsidiarieson a consolidated basis in accordance with GAAP consistently applied, accompanied by any management letter prepared by said accountants;

(b)within forty-five (45) days after the end of each fiscal quarter of the Borrower, the unaudited consolidated and consolidating balance sheet of the Loan Parties and their Subsidiaries and related statements of operations, stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of such fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by a Financial Officer as presenting fairly in all Material respects the financial condition and results of operations of the Loan Parties and their Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;

(c)concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer in substantially the form of Exhibit C (each, a “Compliance Certificate”) (i) certifying as presenting fairly in all Material respects the financial condition and results of operations of the Loan Parties and their Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes, (ii) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (iii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.12(a) and (b) and (iv) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;

(d)within one hundred and twenty (120) days of the first day of each fiscal year of the Borrower, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and cash flow statement) of the Loan Parties and their Subsidiaries for each month of the upcoming fiscal year (the “Projections”) in form reasonably satisfactory to the Administrative Agent;

(e)concurrently with any delivery of financial statements under clause (a) or (b) above, a detailed listing of all intercompany loans made by any Loan Party to any Affiliate during such applicable period;

(f)promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by any Loan Party or any Subsidiary with the SEC, or any Governmental Authority succeeding to any or all of the functions of the SEC, or with any national securities exchange, or distributed by the Borrower to its shareholders generally, as the case may be;

(g)promptly following any request therefor, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of the Borrower by independent accountants in connection with the accounts or books of the Loan Parties and their Subsidiaries, or any audit of any of them as the Administrative Agent or any Lender (through the Administrative Agent) may reasonably request;

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(h) promptly following any request therefor, (x) such other information regarding the operations, changes in ownership of Equity Interests, business affairs and financial condition of any Loan Party or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender (through Administrative Agent) may reasonably request and (y) information and documentation reasonably requested by the Administrative Agent or any Lender for purposes of compliance with applicable “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act, the Criminal Code (Canada) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada); and

(i) promptly after any request therefor by the Administrative Agent or any Lender, copies of (i) any documents described in Section 101(k)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan and (ii) any notices described in Section 101(l)(1) of ERISA that the Borrower or any ERISA Affiliate may request with respect to any Multiemployer Plan; provided that if the Borrower or any ERISA Affiliate has not requested such documents or notices from the administrator or sponsor of the applicable Multiemployer Plan, the Borrower or the applicable ERISA Affiliate shall promptly make a request for such documents and notices from such administrator or sponsor and shall provide copies of such documents and notices promptly after receipt thereof.  

Documents required to be delivered pursuant to Section 5.01(a), (b) or (f) (to the extent any such documents are included in materials otherwise filed with the SEC or any comparable agency in Canada) may be delivered electronically and, if so delivered, shall be deemed to have been delivered on the date (i) on which such materials are publicly available as posted on the System for Electronic Document Analysis and Retrieval (SEDAR) or the Electronic Data Gathering, Analysis and Retrieval system (EDGAR); or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether made available by the Administrative Agent). The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above. Each Lender shall be solely responsible for timely accessing posted documents.

SECTION 5.02.  Notices of Material Events.   The Borrower will furnish to the Administrative Agent and each Lender prompt (but in any event within any time period that may be specified below) written notice of the following:

(a)the occurrence of any Default;

(b)receipt of any notice of any investigation by a Governmental Authority or any litigation or proceeding commenced or threatened against any Loan Party or any Subsidiary the result of which has had or could reasonably be expected to result in a Material Adverse Effect;

(c)any Material change in accounting or financial reporting practices by the Borrower or any Subsidiary;

(d)the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in liability of the Loan Parties and their Subsidiaries in an aggregate amount exceeding $[REDACTED];

(e)within two (2) Business Days after the occurrence thereof, any Loan Party entering into a Swap Agreement or an amendment to a Swap Agreement, together with copies of all agreements evidencing such Swap Agreement or amendment;

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(f)any change in the credit ratings from a credit rating agency, or the placement by a credit rating agency of any Loan Party on a “Credit Watch” or “WatchList” or any similar list, in each case with negative implications, or the cessation by a credit rating agency of, or its intent to cease, rating such Loan Party’s debt; and

(g)any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.

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

SECTION 5.03.  Existence; Conduct of Business .  Each Loan Party will, and will cause each Subsidiary to, (a) do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the qualifications, licenses, permits, franchises, governmental authorizations, intellectual property rights, licenses and permits Material to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03 and (b) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted.

SECTION 5.04.  Payment of Obligations.   Each Loan Party will, and will cause each Subsidiary to, pay or discharge all Material Indebtedness and all other Material liabilities and obligations, including Taxes, before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) such Loan Party or Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

SECTION 5.05.  Maintenance of Properties .  Each Loan Party will, and will cause each Subsidiary to, keep and maintain all property Material to the conduct of its business in good working order and condition, ordinary wear and tear excepted.

SECTION 5.06.  Books and Records; Inspection Rights .  Each Loan Party will, and will cause each Subsidiary to, (a) keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities and (b) permit any representatives designated by the Administrative Agent or any Lender (including employees of the Administrative Agent, any Lender or any consultants, accountants, lawyers, agents and appraisers retained by the Administrative Agent), upon reasonable prior notice, to visit and inspect its properties, conduct at the Loan Party’s premises field examinations of the Loan Party’s assets, liabilities, books and records, including examining and making extracts from its books and records, environmental assessment reports, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times, once per calendar year (unless a Default or an Event of Default has occurred and is continuing, in which case as often as reasonably requested).  The Loan Parties acknowledge that the Administrative Agent, after exercising its right of inspection under this Agreement, may prepare and distribute to the Lenders certain Reports pertaining to the Loan Parties’ assets for internal use by the Administrative Agent and the Lenders.

SECTION 5.07.  Compliance with Laws and Material Contractual Obligations.   Each Loan Party will, and will cause each Subsidiary to, (i) comply with each Requirement of Law applicable to it or its property (including without limitation Environmental Laws and Health Care Laws) and (ii) perform in all Material respects its obligations under the Material Agreements to which it is a party.  Each Loan Party

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will maintain in effect and enforce policies and procedures designed to ensure compliance by such Loan Party, its Subsidiaries and their respective directors, officers, employees and agents with Anti-Corruption Laws and applicable Sanctions.

SECTION 5.08.  Use of Proceeds.

(a)The proceeds of the Revolving Loans (including following an increase in the Revolving Commitments under Section 2.09(e)) and the Letters of Credit will be used for general corporate purposes of the Borrower and its Subsidiaries in the ordinary course of business, including in refinancing on the Effective Date the existing senior secured loans made to the Borrower, fees and expenses incurred in connection with the closing of the Transactions on the Effective Date and investments, Permitted Acquisitions and Restricted Payments to the extent permitted hereunder. No part of the proceeds of any Loan and no Letter of Credit will be used, whether directly or indirectly, (i) for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X or (ii) to make any Acquisition other than Permitted Acquisitions.  

(b)The Borrower will not request any Borrowing or Letter of Credit, and the Borrower shall not use, and shall procure that its Subsidiaries and its or their respective directors, officers, employees and agents shall not use, the proceeds of any Borrowing or Letter of Credit (a) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (b) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country, except to the extent permitted for a Person required to comply with Sanctions, or (c) in any manner that would result in the violation of any Sanctions applicable to any party hereto.

SECTION 5.09.  Accuracy of Information .  The Loan Parties will ensure that any information, including financial statements or other documents, furnished to the Administrative Agent or the Lenders in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder contains no Material misstatement of fact or omits to state any Material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and the furnishing of such information shall be deemed to be a representation and warranty by the Borrower on the date thereof as to the matters specified in this Section 5.09; provided that with respect to the Projections, the Loan Parties will cause the Projections to be prepared in good faith based upon assumptions believed to be reasonable at the time.

SECTION 5.10.  Insurance. Each Loan Party will, and will cause each Subsidiary to, maintain with financially sound and reputable carriers having a financial strength rating of at least A- by A.M. Best Company insurance in such amounts (with no greater risk retention) and against such risks and such other hazards, as is customarily maintained by companies of established repute engaged in the same or similar businesses operating in the same or similar locations.  The Borrower will furnish to the Lenders, upon request of the Administrative Agent, but no less frequently than annually, information in reasonable detail as to the insurance so maintained.

SECTION 5.11.  Casualty and Condemnation .  The Borrower (a) will furnish to the Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage to any Material portion of the Collateral or the commencement of any action or proceeding for the taking of any Material portion of the Collateral or interest therein under power of eminent domain or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected and applied in accordance with the applicable provisions of this Agreement.

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SECTION 5.12. Depository Banks. No later than ninety (90) days after the Effective Date (or such later date as the Administrative Agent may agree in its sole discretion) and at all times thereafter, each Loan Party andits Subsidiarieswill maintain the Administrative Agent as its principal depositorybank (except with respect to present or future lockbox deposit accounts of the Loan Parties and their Subsidiaries that exist on the Effective Date),including for the maintenance of operating, administrative, cash management, collection activity, and other deposit accounts for the conduct of its business.  Following the Effective Date, any newly formed or acquired Subsidiary of the Loan Parties shall establish and maintain all of its lockbox deposit accounts with the Administrative Agent. The Administrative Agent agrees to waive its right to set-off and recoupment and a banker’s lien against any Segregated Health Care Account to the extent required by law in accordance with Section 5.14(b).

SECTION 5.13.  Additional Collateral; Further Assurances .

(a)Subject to applicable Requirements of Law, each Loan Party will cause each of its Domestic Subsidiaries (other than any JV Entity), in each case formed or acquired after the Effective Date, within thirty (30) days of such formation or acquisition, to become a Loan Party by executing a Joinder Agreement and such Loan Party shall deliver legal opinions and documents consistent with those delivered on the Effective Date, to the extent requested by the Administrative Agent. In connection therewith, the Administrative Agent shall have received all documentation and other information regarding such newly formed or acquired Subsidiaries as may be required to comply with the applicable “know your customer” rules and regulations, including the USA Patriot Act. Upon execution and delivery thereof, each such Person (i) shall automatically become a Loan Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties, in any property of such Loan Party which constitutes Collateral, excluding any parcel of real property owned by any Loan Party.

(b)Subject to applicable Requirements of Law, each Loan Party will cause (i) [REDACTED]% of the issued and outstanding Equity Interests of each of its Domestic Subsidiaries (excluding, for the avoidance of doubt, any JV Entity) and (ii) [REDACTED]% (or such greater percentage that (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's U.S. parent and (2) could not reasonably be expected to cause any Material adverse tax consequences) of the issued and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Borrower or any Domestic Subsidiary (in each case excluding, for the avoidance of doubt, any JV Entity) to be subject at all times, or, in the case of any such Foreign Subsidiary or Domestic Subsidiary formed or acquired after the Effective Date, within thirty (30) days of such formation or acquisition, to a first priority, perfected Lien in favor of the Administrative Agent for the benefit of the Administrative Agent and the other Secured Parties, pursuant to the terms and conditions of the Loan Documents or other security documents as the Administrative Agent shall reasonably request.

(c)Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to, execute and deliver, or cause to be executed and delivered, to the Administrative Agent such documents, agreements and instruments, and will take or cause to be taken such further actions (including the filing and recording of financing statements, fixture filings and other documents and such other actions or deliveries of the type required by Section 4.01, as applicable), which may be required by any Requirement of Law or which the Administrative Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents and to ensure perfection and priority of the Liens created or intended to be created by the Collateral Documents, all in form and substance reasonably satisfactory to the Administrative Agent and all at the expense of the Loan Parties.  

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(d)If any Material assets (excluding any real property or improvements thereto or any interest therein) are acquired by any Loan Party after the Effective Date (other than assets constituting Collateral under the Security Agreements that become subject to the Liens under the Security Agreements upon acquisition thereof), the Borrower will (i) notify the Administrative Agent and the Lenders thereof, and, if requested by the Administrative Agent or the Required Lenders, cause such assets to be subjected to a Lien securing the Secured Obligations and (ii)  take, and cause each applicable Loan Party to take, such actions as shall be necessary or reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions described in paragraph (d) of this Section, all at the expense of the Loan Parties.

SECTION 5.14. Cash Management Systems. (a) Within (x) ninety (90) days after the Effective Date and (y) ninety (90) days after the acquisition of any deposit accounts as a result of a Permitted Acquisition permitted hereunder (in each case under clauses (x) and (y), as such date may be extended by the Administrative Agent in its sole discretion) and at all times thereafter, the Borrower shall, and shall cause each other Loan Party to, enter into deposit account control agreements with respect to each deposit account maintained or acquired by the Borrower or any such Loan Party (other than (i) any payroll or benefits account, (ii) any zero balance account, (iii) any withholding tax, trust or fiduciary account, (iv) any deposit account held in Canada that has a balance that does not exceed $[REDACTED] and any other deposit account held in Canada if, in the reasonable determination of the Administrative Agent pursuant to advice of counsel, such deposit account control agreement is not necessary for the Administrative Agent, for the benefit of the Lenders, to have a first priority Lien on such deposit accounts, (v) Segregated Health Care Accounts and (vi) accounts maintained at the Administrative Agent, such excluded accounts described in clauses (i)-(vi), collectively, the “Excluded Accounts”). Each deposit account control agreement shall be in form and substance reasonably satisfactory to the Administrative Agent.  After the occurrence and during the continuance of an Event of Default, the Administrative Agent shall be entitled to deliver a notice to any financial institution of its exercise of control over any deposit account subject to a deposit account control agreement. For greater certainty, it is understood that, unless an Event of Default has occurred and is continuing, the Borrower and any Loan Parties shall have absolute control of such deposit accounts and the Administrative Agent agrees not to deliver any such notice or instruction at any time other than during the occurrence of an Event of Default that is continuing.

(b)In order to segregate and to facilitate perfection of the Administrative Agent’s security interest in funds received from Governmental Payor Programs, to the extent the Borrower or any other Loan Party or any Managed Entity receives payments from a Government Payor Program as of the Effective Date, the Borrower or such other Loan Party or such Managed Entity shall, within thirty (30) days after the Effective Date (or, with respect to future participation in any Governmental Payor Programs, prior to the Borrower s or such other Loan Party’s receipt of payments from such Governmental Payor Programs) notify all Governmental Authorities making any payments under any Governmental Payor Program to make any such payments only to one or more Segregated Health Care Accounts.  None of the Borrower or any other Loan Party nor any of their respective Subsidiaries nor any Managed Entities shall deposit any funds to a Segregated Health Care Account or direct or permit any other Person to deposit any funds to a Segregated Health Care Account, other than payments received from Governmental Payor Programs.  The Borrower and the other Loan Parties shall have until the date that is ninety (90) days following (i) the Effective Date (or such later date as may be agreed to by the Administrative Agent), or (ii) the date the Borrower or other Loan Party begins receiving payments from any Governmental Payor Program) to cause all amounts deposited into the Segregated Health Care Accounts to be automatically swept on a daily basis to a deposit account of the Borrower or another Loan Party pursuant to a Sweep Agreement (a “Controlled Deposit Account”).  Any such Sweep Agreement will require such depository bank (including, the Administrative Agent if it is the depository bank) to waive all of its existing and future rights of recoupment and set-off and banker’s lien against any Segregated Health Care Accounts, but shall permit such depository bank (including, the Administrative Agent if it is the depository bank) to maintain its existing and future rights of recoupment and set-off and banker’s lien against any Controlled Deposit Account.

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SECTION 5.15.  Health Care.  Each Loan Party and its Subsidiaries shall, and shall causeeach Managed Entityto, and, to the extent such obligation is imposed on a Loan Party, Subsidiary or Managed Entityby any Management Services Document, shall cause any Managed Entity to:

(a) timely file or cause to be timely filed (after giving effect to any extension duly obtained), materially accurate and complete notifications, reports, submissions, Health Care Permit renewals and reports of every kind whatsoever required by Health Care Laws in order for Loan Party, Subsidiary or any Managed Entity to carry on its business;

(b) maintain in full force and effect, and free from restrictions or conditions, all Health Care Permits necessary under Health Care Laws to carry on the business of the Loan Parties, Subsidiary or any Managed Entity;

(c) at all times be in compliance in all Material respects with all applicable Health Care Laws (including without limitation, FDA Laws and Information Privacy or Security Laws) relating to the operation of the business of the Loan Party, Subsidiary or Managed Entity;

(d) be and remain in compliance with all requirements for participation in, and for licensure required to provide the goods or services that are reimbursable under, Medicare, Medicaid and other Third Party Payor Programs;

(e) require all Licensed Providers to be in compliance with all applicable Health Care Laws in the performance of their duties to or for a Loan Party, Subsidiary or any Managed Entity, and to maintain in full force and effect all professional licenses and other Health Care Permits required to perform such duties;

(f) keep and maintain all records required to be maintained by any Governmental Authority or otherwise under any Health Care Law;

(g) cause all business arrangements of a Loan Party, Subsidiary and any Managed Entity to be structured to comply in all Material respects with all Health Care Laws; and

(h)maintain a Health Care Compliance Program, provide regular Health Care Compliance Program training to its directors and employees, modify the Health Care Compliance Program from time to time as may be necessary to promote continuing Material compliance with all applicable Health Care Laws, and upon reasonable advance written request, permit the Administrative Agent (and/or its consultants) to review any such Health Care Compliance Program.

SECTION 5.16.  Reportable Health Care Events.  Without limiting any of the foregoing, the Loan Parties shall promptly notify the Administrative Agent and, unless such delivery is in electronic form to the Administrative Agent (in which case the Administrative Agent shall promptly forward to each Lender), each Lender of each of the following:

(a)any breach or non-performance of, or any default under, any contractual obligation of any Loan Party, Subsidiary or Managed Entity under, or any violation of, or non-compliance with, any applicable Health Care Law, which could reasonably be expected to result, either individually or in the aggregate, in a Material Adverse Effect, including a description of such breach, non-performance, default, violation or non-compliance and the steps, if any, such Loan Party, Subsidiary or Managed Entity has taken, is taking or proposes to take in respect thereof;

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(b)any Loan Party, Subsidiaryor Managed Entity, hereafter becoming subject to any civil or criminal investigations, inquiries or audits (other than non-Material investigations, inquiries or audits occurring in the ordinary course of business) involving and/or related to its compliance with applicable Health Care Laws;

(c)a person with a “direct or indirect ownership interest” (as that phrase is defined in 42 C.F.R. §420.201) in, or an officer or member of senior management of, a Loan Party, Subsidiary or Managed Entity:  (i) has a civil monetary penalty assessed against him or her pursuant to 42 U.S.C. §1320a-7a or is the subject of a proceeding seeking to assess such penalty; (ii) has been excluded from participation in a Federal Health Care Program (as that term is defined in 42 U.S.C. §1320a-7b) or is the subject of a proceeding seeking to assess such exclusion; (iii) has been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of those offenses described in 42 U.S.C. §1320a-7b or 18 U.S.C. §§669, 1035, 1347, 1518 or is the subject of a proceeding seeking to assess such conviction; or (iv) has been named in an unsealed U.S. Attorney complaint made or any other unsealed formal action taken pursuant to the False Claims Act under 31 U.S.C. §§3729-3731 or unsealed qui tam action brought pursuant to 31 U.S.C. §3729 et seq.;

(d)(i) any validation review, program integrity review or reimbursement audits related to a Loan Party, Subsidiary or Managed Entity by any commission, board or agency in connection with a Governmental Payor Program (other than non-Material or routine reviews and audits in the ordinary course of business) that could reasonably be expected to have a Material Adverse Effect or (ii) any Loan Party, Subsidiary or Managed Entity having entered into any individual integrity agreement, corporate integrity agreement, corporate compliance agreement or deferred prosecution agreement;

(e)(i) the voluntary disclosure by a Loan Party, Subsidiary or Managed Entity to a Governmental Authority of an overpayment in an amount greater than $[REDACTED] relating to the submission of claims to such payor or (ii) the receipt of written notice by a Loan Party, Subsidiary or Managed Entity of any Material overpayment or refunds due to any Governmental Payor Program in Material violation of any applicable Health Care Law;

(f)any revocation, suspension, termination, probation, restriction, limitation, denial or non-renewal with respect to any Material Third Party Payor Authorizations or participation in any Material Third Party Payor Program due to the violation by any Loan Party, Subsidiary or Managed Entity, of applicable Health Care Laws;

(g)the occurrence of any Management Services Document Termination Event or any Physician Owner of a Managed Entity threatening to act in Material contravention of a Management Services Document; or

(h)the FDA or other Governmental Authority initiates an enforcement action against, or issues a Form 438 observation, recall, warning letter, notice of violation letter or similar notice with respect to, any Loan Party or Subsidiary or any Product.

SECTION 5.17.  Managed Entities, Management Services Documents and Management Services Fees .  

(a)The Borrower shall promptly provide the Administrative Agent with an executed copy of any Management Services Document entered into after the Effective Date for any Managed Entity, including all Material amendments, waivers or supplements with respect thereto. The Borrower shall promptly notify Administrative Agent in writing at any time that any Person becomes a Managed Entity and provide to Lender (i) such information about such Managed Entity as the Administrative Agent may reasonably request, (ii) a fully executed set of any Managed Services Documents relating to such

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Managed Entity in form and substance reasonably satisfactory to the Administrative Agent or in a form substantially similar to those delivered on the Effective Date and (iii) with respect to any Managed Entity in which any Loan Party or Affiliate of a Loan Party has an ownership interest, a collateral assignment of such Management Services Documents. The Borrower shall promptly notify the Administrative Agent in writing of the occurrence of a change in Owner Physician for a Managed Entity in which any Loan Party or Affiliate of a Loan Party has an ownership interest and provide a fully executed copy of any Managed Entity Owner Agreement and collateral assignment thereof for the new Owner Physician.

(b)Each of the Loan Parties and each of their Subsidiaries, as applicable, will (i) comply in all respects with all of its Material obligations under each Management Services Document, (ii) promptly enforce and diligently pursue all of its Material rights under each Management Services Document, and (iii) if ever applicable, take all actions as may be necessary and appropriate to ensure that each Managed Entity Security Agreement (if any) continues to create a valid and enforceable, perfected security interest in and Lien on such Managed Entity’s accounts receivable and other collateral in favor of the Loan Parties and their Subsidiaries, as applicable, superior to and prior to the rights of all third persons and subject to no other Liens.  

(c)The Loan Parties and their Subsidiaries will from time to time, but not less frequent than quarterly, invoice and collect their management services fees under any existing Management Services Agreement and deposit them in a Controlled Deposit Account (or other deposit account of a Loan Party maintained with the Administrative Agent (other than a Segregated Health Care Account)).

SECTION 5.18. JV Entity Accounts.   The Borrower shall maintain control of the operations and management of the JV Entities (including, without limitation, maintaining sole signing authority over all deposit accounts of each JV Entity) in accordance with the applicable JV Entity Documents. The Borrower shall cause each JV Entity to deposit the Available JV Entity Cash Flow directly into a Controlled Deposit Account (or other deposit account of a Loan Party maintained with the Administrative Agent (other than a Segregated Health Care Account)) within thirty (30) days of the end of each calendar month.

SECTION 5.19. Post-Closing Obligations.   

(a)The Borrower will use commercially reasonable efforts to deliver to the Administrative Agent a Collateral Access Agreement from the lessor of the leased property listed on Schedule 3.05 at which material books and records (electronic or physical) are located for which the Administrative Agent has reasonably requested a Collateral Access Agreement following a request by the Administrative Agent.

(b)As soon as reasonably practicable, but in no event later than fourteen (14) days after the Effective Date (or such later date as is agreed to by the Administrative Agent in its sole discretion), the Loan Parties shall deliver or cause to be delivered to the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent, (i) evidence of insurance coverage (including, without limitation, ACORD Form 28 certificates or similar form of insurance certificate) maintained by the Loan Parties and their Subsidiaries in form, scope, and substance satisfying the requirements of Section 5.10 and otherwise reasonably satisfactory to the Administrative Agent and (ii)  additional insured or loss payee, as applicable, endorsements with respect to each such insurance certificate delivered by the Loan Parties to the Administrative Agent.

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ARTICLE VI

Negative Covenants

Until all of the Secured Obligations shall have been Paid in Full, each Loan Party executing this Agreement covenants and agrees, jointly and severally with all of the other Loan Parties, with the Lenders that:

SECTION 6.01.  Indebtedness.   No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness, except:

(a)the Secured Obligations (including, without limitation, any increase in the Revolving Commitments under Section 2.09(e));

(b)Indebtedness existing on the date hereof and set forth in Schedule 6.01 and any extensions, renewals, refinancings and replacements of any such Indebtedness in accordance with clause (f) hereof;

(c)Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or any other Subsidiary, provided that (i) Indebtedness of any Subsidiary that is not a Loan Party to the Borrower or any other Loan Party shall be subject to Section 6.04 and (ii) Indebtedness of any Loan Party to any Subsidiary that is not a Loan Party shall be subordinated to the Secured Obligations on terms reasonably satisfactory to the Administrative Agent;

(d)Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any other Subsidiary, provided that (i) the Indebtedness so Guaranteed is permitted by this Section 6.01, (ii) Guarantees by the Borrower or any other Loan Party of Indebtedness of any Subsidiary that is not a Loan Party shall be subject to Section 6.04 and (iii) Guarantees permitted under this clause (d) shall be subordinated to the Secured Obligations on the same terms as the Indebtedness so Guaranteed is subordinated to the Secured Obligations;

(e)Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets (whether or not constituting purchase money Indebtedness), including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness in accordance with clause (f) below; provided that (i) such Indebtedness is incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e) together with any Refinance Indebtedness in respect thereof permitted by clause (f) below, shall not exceed $[REDACTED] at any time outstanding;

(f)Indebtedness which represents extensions, renewals, refinancing or replacements (such Indebtedness being so extended, renewed, refinanced or replaced being referred to herein as the “Refinance Indebtedness”) of any of the Indebtedness described in clauses (b), (e) and (i) hereof (such Indebtedness being referred to herein as the “Original Indebtedness”); provided that (i) such Refinance Indebtedness does not increase the principal amount or interest rate of the Original Indebtedness, (ii) any Liens securing such Refinance Indebtedness are not extended to any additional property of any Loan Party or any Subsidiary, (iii) no Loan Party or any Subsidiary that is not originally obligated with respect to repayment of such Original Indebtedness is required to become obligated with respect to such Refinance Indebtedness, (iv) such Refinance Indebtedness does not result in a shortening of the average weighted maturity of

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such Original Indebtednessand (v) if such Original Indebtedness was subordinated in right of payment to the Secured Obligations, then the terms and conditions of such Refinance Indebtedness must include subordination terms and conditions that are at least as favorable to the Administrative Agent and the Lenders as those that were applicable to such Original Indebtedness;

(g)Indebtedness owed to any Person providing workers’ compensation, health, disability or other employee benefits or property, casualty or liability insurance, pursuant to reimbursement or indemnification obligations to such Person, in each case incurred in the ordinary course of business;

(h)Indebtedness of any Loan Party in respect of performance bonds, bid bonds, appeal bonds, surety bonds and similar obligations, in each case provided in the ordinary course of business;

(i)Indebtedness of any Person that becomes a Subsidiary after the date hereof; provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii) the aggregate principal amount of Indebtedness permitted by this clause (i) together with any Refinance Indebtedness in respect thereof permitted by clause (f) above, shall not exceed $[REDACTED] at any time outstanding; and

(j)the JV Entity Permitted Debt;

(k)the GAA Earnout and the Guarantee by the Borrower of GAA Asset Purchase Agreement and the GAA Equity Purchase Agreement;

(l)the Existing Intercompany Indebtedness and Guarantees by GAA or [REDACTED] of such  Indebtedness; provided that all such Existing Intercompany Indebtedness shall be subordinated to the Secured Obligations on terms satisfactory to the Administrative Agent in its sole discretion; provided further that all of CRH Delaware’s rights, title and interest in the Existing Intercompany Indebtedness and all payments from time to time due or to become due, and all security interests granted to secure such Indebtedness, shall be assigned to the Administrative Agent on terms satisfactory to the Administrative Agent in its sole discretion;

(m)other unsecured Indebtedness in an aggregate principal amount not exceeding $[REDACTED] at any time outstanding; and

(n)Intragroup Obligations, to the extent permitted under this Agreement.  

Notwithstanding anything to the foregoing, the Borrower shall not consent to the incurrence of Indebtedness by any JV Entity (other than JV Entity Permitted Debt) without the prior written consent of the Required Lenders.

SECTION 6.02.  Liens.   No Loan Party will, nor will it permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including Accounts) or rights in respect of any thereof, except:

(a)Liens created pursuant to any Loan Document;

(b)Permitted Encumbrances;

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(c)any Lien on any property or asset of the Borrower or any Subsidiary existing on the date hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and related Refinance Indebtedness;

(d)Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any Subsidiary; provided that (i) such Liens secure Indebtedness permitted by clause (e) of Section 6.01, (ii) such Liens and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement and (iii) such Liens shall not apply to any other property or assets of the Borrower or any Subsidiary;

(e)any Lien existing on any property or asset (other than Accounts and Inventory) prior to the acquisition thereof by the Borrower or any Subsidiary or existing on any property or asset (other than Accounts and Inventory) of any Person that becomes a Loan Party after the date hereof prior to the time such Person becomes a Loan Party; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Loan Party, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Loan Party and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Loan Party, as the case may be, and related Refinance Indebtedness;

(f)Liens of a collecting bank arising in the ordinary course of business under Section 4‑208 of the UCC and any analogous or similar legislation in Canada in effect in the relevant jurisdiction covering only the items being collected upon, including customary rights of set-off or combinations of accounts in favor of a financial institution with respect to deposits maintained by it;

(g)Liens granted by a Subsidiary that is not a Loan Party in favor of the Borrower or another Loan Party in respect of Indebtedness owed by such Subsidiary;

(h)Liens arising from precautionary UCC or PPSA financing statements regarding operating leases or other obligations not constituting Indebtedness;

(i)Liens securing insurance premiums financing arrangements, so long as such Liens are limited to the applicable unearned insurance premiums; and

(j)Liens securing the Existing Intercompany Indebtedness; provided that (i) such Liens shall not apply to any other property or asset of any Loan Party or Subsidiary other than CRH GAA, [REDACTED] and GAA and (ii) such Liens shall secure only those obligations which they secure on the date hereof.

SECTION 6.03.  Fundamental Changes.   

(a)No Loan Party will, nor will it permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Event of Default shall have occurred and be continuing, (i) any Subsidiary of the Borrower may merge into the Borrower or another Loan Party in a transaction in which the Borrower or such other Loan Party is the surviving entity, (ii) any Loan Party (other than the Borrower) may merge into any other Loan Party in a transaction in which the surviving entity is a Loan Party and (iii) any Subsidiary that is not a Loan Party may liquidate or dissolve so long as such Subsidiary did not generate more than [REDACTED]% of

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EBITDA of the Loan Parties and their Subsidiaries on a consolidated basis for the four (4) fiscal quarter period most recently ended and did not have total assets of equal to or greater than [REDACTED]% of the total assets of the Loan Parties and their Subsidiarieson a consolidated basis as of the end of the most recent four (4) fiscal quarters, and the assets of such liquidated or dissolved Subsidiary are Disposed oftotheBorrower or another Loan Party; provided that any such merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger shall not be permitted unless also permitted by Section 6.04.

(b)No Loan Party will consummate a Division as the Dividing Person unless the surviving persons each become a Loan Party and grant security in favor of the Administrative Agent as required hereby. Without limiting the foregoing, if any Loan Party that is a limited liability company consummates a Division (with or without the prior consent of the Administrative Agent as required above), each Division Successor shall be required to comply with the obligations set forth in Section 5.13 and the other further assurances obligations set forth in the Loan Documents and become a Loan Party under this Agreement and the other Loan Documents.

(c)No Loan Party will, nor will it permit any Subsidiary to, engage in any business other than businesses of the type conducted by the Loan Parties and their respective Subsidiaries on the date hereof and businesses reasonably related thereto.

(c)No Loan Party will, nor will it permit any Subsidiary to change its fiscal year or any fiscal quarter from the basis in effect on the Effective Date.

(d)No Loan Party will change the accounting basis upon which its financial statements are prepared.

(e)No Loan Party will change the tax filing elections it has made under the Code.

SECTION 6.04.  Investments, Loans, Advances and Acquisitions .  No Loan Party will, nor will it permit any Subsidiary to, form any subsidiary after the Effective Date, or purchase, hold or acquire (including pursuant to any merger with any Person that was not a Loan Party and a wholly owned Subsidiary prior to such merger) any Equity Interests, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any assets of any other Person constituting a business unit (whether through purchase of assets, merger or otherwise), except:

(a)Permitted Investments, subject to a perfected security interest in favor of the Administrative Agent for the benefit of the Secured Parties;

(b)investments in existence on the date hereof and described in Schedule 6.04;

(c)investments by the Loan Parties and their Subsidiaries in Equity Interests in their respective Subsidiaries, provided that (i) any such Equity Interests held by a Loan Party shall be pledged pursuant to the Security Agreements (subject to the limitations applicable to Equity Interests of a Foreign Subsidiary referred to in Section 5.14) and (ii) the aggregate amount of investments by Loan Parties in Subsidiaries that are not Loan Parties (together with outstanding intercompany loans permitted under Section 6.04(d) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $[REDACTED] at any time outstanding (in each case determined without regard to any write-downs or write-offs);

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(d)loans or advances made by any Loan Party to any Subsidiary and made by any Subsidiary to a Loan Party or any other Subsidiary, provided that the amount of such loans and advances made by Loan Parties to Subsidiaries that are not Loan Parties (together with outstanding investments permitted under Section 6.04(c) and outstanding Guarantees permitted under Section 6.04(e)) shall not exceed $[REDACTED] at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(e)Guarantees constituting Indebtedness permitted by Section 6.01, provided that (i) the aggregate principal amount of Indebtedness of Subsidiaries that are not Loan Parties that is Guaranteed by any Loan Party (together with outstanding investments permitted under clause (ii) to the proviso to Section 6.04(c) and outstanding intercompany loans permitted under clause (ii) to the proviso to Section 6.04(d)) shall not exceed $[REDACTED] at any time outstanding (in each case determined without regard to any write-downs or write-offs);

(f)loans or advances made by a Loan Party to its employees on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $[REDACTED] in the aggregate made per employee during the term of this Agreement and a maximum of $[REDACTED] in the aggregate made for all employees during the term of this Agreement;

(g)notes payable, or stock or other securities issued by Account Debtors to a Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;

(h)investments in the form of Swap Agreements permitted by Section 6.07;

(i)investments of any Person existing at the time such Person becomes a Subsidiary of the Borrower or consolidates or merges with the Borrower or any Subsidiary (including in connection with a permitted acquisition), so long as such investments were not made in contemplation of such Person becoming a Subsidiary or of such merger;

(j)investments received in connection with the disposition of assets permitted by Section 6.05;

(k)investments constituting deposits described in clauses (c) and (d) of the definition of the term “Permitted Encumbrances”;

(l)investments consisting of a Permitted Acquisition; and

(m)loans or advances constituting JV Entity Permitted Debt.

Notwithstanding the foregoing, no Loan Party or any of their Subsidiaries shall make any loans or advances to any JV Entity (other than loans or advances constituting JV Entity Permitted Debt), without the prior written consent of the Required Lenders.

SECTION 6.05.  Asset Sales .  No Loan Party will, nor will it permit any Subsidiary to, Dispose (in one transaction or in a series of transactions and whether effected pursuant to a Division or otherwise) of any asset, including any Equity Interest owned by it, except:

(a)Dispositions of (i) Inventory in the ordinary course of business and (ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;

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(b)Dispositions of assets to the Borrower or any Subsidiary, provided that any such Dispositions involving a Subsidiary that is not a Loan Party shall be made in compliance with Section 6.09;providedfurther that for transactions where any Loan Party is a foreign entity, such Dispositions among Loan Parties are permitted only so long as the transferee Loan Party is in the same country as the transferor Loan Party or if transfers are to a Loan Party organized in the United States or Canada;

(c)Dispositions of Accounts, including cash or cash equivalents (excluding sales or dispositions in a factoring arrangement) in connection with the compromise, settlement or collection thereof;

(d)Dispositions of Permitted Investments and other investments permitted by clauses (i) and (k) of Section 6.04;

(e)Dispositions resulting from any casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of, any property or asset of the Borrower or any Subsidiary; and

(f)Dispositions of assets (other than Equity Interests in a Subsidiary) that are not permitted by any other clause of this Section, provided that the aggregate fair market value of all assets Disposed of in reliance upon this paragraph (f) shall not exceed $[REDACTED] during any fiscal year of the Borrower;

provided that all Dispositions permitted under this Section 6.05 (other than those permitted by paragraphs (b), (d) and (f) above) shall be made for fair value.

SECTION 6.06.  Sale and Leaseback Transactions .  No Loan Party will, nor will it permit any Subsidiary to, enter into any arrangement, directly or indirectly, whereby it shall sell or transfer any property, real or personal, used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property sold or transferred.

SECTION 6.07.  Swap Agreements .  No Loan Party will, nor will it permit any Subsidiary to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Borrower or any Subsidiary), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from floating to fixed rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Borrower or any Subsidiary.

SECTION 6.08.  Restricted Payments; Certain Payments of Indebtedness.   

(a)No Loan Party will, nor will it permit any Subsidiary to, declare or make, or agree to declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, except:

(i)the Borrower may declare and pay dividends with respect to its common stock payable solely in additional shares of its common stock, and, with respect to its preferred stock, payable solely in additional shares of such preferred stock or in shares of its common stock,

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(ii)Subsidiaries (including JV Entities) may declare and pay dividends ratably with respect to their Equity Interests (with respect to JV Entities, in accordance with the applicable JV EntityDocuments),

(iii)the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries in an aggregate amount, together with the Restricted Payments made pursuant to Section 6.08(a)(iv) and (vi), not to exceed $[REDACTED] in any fiscal year,

(iv)open market purchases for not greater than fair market value of Equity Interests of the Borrower from unrelated third parties, which Equity Interests are immediately cancelled upon repurchase in an aggregate amount, together with the Restricted Payments made pursuant to Section 6.08(a)(iii) and (vi), not to exceed $[REDACTED] in any fiscal year,

(v)any purchase, redemption or acquisition of Equity Interests pursuant to the Option to Purchase Stock dated as of December 1, 2014 by and among CRH Delaware, [REDACTED] and [REDACTED] and

(vi)the Borrower may make dividends and distributions in an aggregate amount, together with the Restricted Payments made pursuant to Section 6.08(a)(iii) and (iv), not to exceed $[REDACTED] in any fiscal year; provided that the Borrower may make such dividends and distributions pursuant to this Section 6.08(vi) only so long as both before and after giving effect to payment of such dividend or distribution, (w) no Default or Event of Default has occurred and is continuing or would occur as a result thereof, (x) Liquidity shall not be less than $[REDACTED], (y) the Total Leverage Ratio (calculated based upon the most recent Compliance Certificate received by the Administrative Agent) of the Borrower for the four consecutive fiscal quarters most recently ended will not be greater than 2.75 to 1.00 and (z) the Borrower has delivered to the Administrative Agent a certificate evidencing such calculation.

(b)No Loan Party will, nor will it permit any Subsidiary to, make or agree to pay or make, directly or indirectly, any payment or other distribution (whether in cash, securities or other property) of or in respect of principal of or interest on any Indebtedness, or any payment or other distribution (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any Indebtedness, except:

(i)payment of Indebtedness created under the Loan Documents;

(ii)payment of any interest, principal or other obligations under or in respect of any Indebtedness permitted under Section 6.01, subject, in each such case, to each applicable subordination or intercreditor agreement with the Administrative Agent and to Section 6.13;

(iii)refinancings of Indebtedness to the extent permitted by Section 6.01; and

(iv)payment of secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05.

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SECTION 6.09.  Transactions with Affiliates.  No Loan Party will, nor will it permit any Subsidiary to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) transactions that (i) are in the ordinary course of business and (ii) are at prices and on terms and conditions not less favorable to such Loan Party or such Subsidiary than could be obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among the Loan Parties not involving any other Affiliate, (c) any investment permitted by Sections 6.04(c) or 6.04(d), (d) any Indebtedness permitted under Section 6.01(c), (e) any Restricted Payment permitted by Section 6.08, (f) loans or advances to employees permitted under Section 6.04(f), (g) the payment of reasonable fees to directors of the Borrower or any Subsidiary who are not employees of the Borrower or any Subsidiary, and compensation and employee benefit arrangements paid to, and indemnities provided for the benefit of, directors, officers or employees of the Borrower or its Subsidiaries in the ordinary course of business and (h) any issuances of securities or other payments, awards or grants in cash, securities or otherwise pursuant to, or the funding of, employment agreements, equity options and equity ownership plans approved by the Borrower’s board of directors.

SECTION 6.10.  Restrictive Agreements.   No Loan Party will, nor will it permit any Subsidiary to,  directly or indirectly enter into, incur or permit to exist any agreement or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of such Loan Party or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect to any Equity Interests or to make or repay loans or advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary, in each case in any Material respect; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by any Requirement of Law or by any Loan Document, (ii) the foregoing shall not apply to customary restrictions and conditions granted by the Loan Parties in good faith and contained in agreements entered into in the normal course of business, (iii) the foregoing shall not apply to restrictions and conditions existing on the date hereof identified on Schedule 6.10 (but shall apply to any amendment or modification expanding the scope of, any such restriction or condition), (iv) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted hereunder, (v) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (vi) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.

SECTION 6.11. Amendment of Material Documents; Additional Equity of Managed Entities .  

(a)No Loan Party will, nor will it permit any Subsidiary to, amend, modify or waive any of its rights under (i) to the extent adverse in a Material respect to the interests of the Administrative Agent or the Lenders, its charter, articles or certificate of organization or incorporation and bylaws or operating, management or partnership agreement, or other organizational or governing documents, including without limitation, any JV Entity Document, (ii) any Sweep Agreement, (iii) to the extent adverse in a Material respect to the interests of the Administrative Agent or the Lenders, any agreement relating to any Existing Intercompany Indebtedness or (iv) to the extent adverse in a Material respect to the interests of the Administrative Agent or the Lenders, any of the JV Entity Documents.

(b)No Loan Party will, nor will it permit any Subsidiary to, amend, terminate, or otherwise modify (or permit any amendment, termination or modification of) any of the Management Services Documents, except for any such amendments or other modifications which are disclosed in all Material respects to the Administrative Agent and not Materially adverse to the interests of Administrative Agent or any Lender.

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SECTION 6.12. Financial Covenants.

(a)Interest Charge Coverage Ratio.  The Borrower will not permit the Interest Charge Coverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, commencing with the fiscal quarter ending December 31, 2019, to be less than 3.00 to 1.00.

(b)Total Leverage Ratio.  The Borrower will not permit the Total Leverage Ratio, for any period of four consecutive fiscal quarters ending on the last day of any fiscal quarter, commencing with the fiscal quarter ending December 31, 2019, to be greater than 3.00 to 1.00.

(c)Capital Expenditures.  The Borrower will not, nor will it permit any Subsidiary to, incur or make any Capital Expenditures in the aggregate during any fiscal year in an amount exceeding $[REDACTED].

SECTION 6.13. Intragroup Obligations .

(a)If and for as long as an Event of Default has occurred and is continuing, or if a Default would result from payment of Intragroup Obligations by one Loan Party to another, payment of Intragroup Obligations is hereby postponed to the indefeasible payment in full in cash of the Secured Obligations and the termination of all Revolving Commitments, and:

(i)any Loan Party that is indebted to another Loan Party shall neither make nor be entitled to make and any Loan Party to whom the Intragroup Obligations are owed shall not receive or be entitled to receive any payment, prepayment or other compensation in respect of the Intragroup Obligations, and if a Loan Party to whom the Intragroup Obligations are owed receives any payment, prepayment or other compensation in respect of the Intragroup Obligations contrary to this Section 6.13, the payment, prepayment or compensation shall be held by the recipient Loan Party in trust for the Lenders and the other Secured Parties, separate and apart from its own property, and shall be immediately paid over to the Administrative Agent for application to the Secured Obligations; and

(ii)no Loan Party to whom Intragroup Obligations are owed shall be entitled to accelerate the time for payment of the Intragroup Obligations, commence an involuntary proceeding or file an involuntary petition with respect to the liquidation, reorganization or other relief in respect of the indebted Loan Party (or the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official with respect thereto) or participate in any Bankruptcy Event of the indebted Loan Party, initiate or participate in any similar proceeding, or initiate or participate in any proceeding claiming judgment for payment or performance of any of those Intragroup Obligations.

(b)Each Loan Party acknowledges that, under the terms of the Collateral it has granted, all Intragroup Obligations owing to it are assigned as security to the Administrative Agent for the benefit of the Secured Parties.  Upon any Secured Obligations becoming due and payable under Section 7.01, the Administrative Agent may with the consent of the Required Lenders terminate the postponement in Section 6.13(a) as to any or all Intragroup Obligations, in which case those Intragroup Obligations shall be paid to the Administrative Agent or as it directs free of any set off, counterclaim, defense or other right that the Loan Party, or any of them, owing Intragroup Obligations may assert against the Loan Party, or any of them, to whom Intragroup Obligations are owed.

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ARTICLE VII

Events of Default

SECTION 7.01. Events of Default . If any of the following events (“Events of Default”) shall occur:

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

(b)the Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement or any other Loan Document, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of three (3) Business Days;

(c)any representation or warranty made or deemed made by or on behalf of any Loan Party or any Subsidiary in, or in connection with, this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, shall prove to have been materially incorrect when made or deemed made;

(d)any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in Sections 5.01(a) through (c), 5.02(a), 5.03 (with respect to a Loan Party’s existence) or 5.08 or in Article VI;

(e)any Loan Party shall fail to observe or perform any covenant, condition or agreement contained in this Agreement or any other Loan Document (other than those specified in clause (a), (b) or (d)), and such failure shall continue unremedied for a period of (i) seven (7) days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of Section 5.01 (other than Section 5.01(a) through (c)), 5.02 (other than Section 5.02(a)), 5.03 through 5.07, 5.10, 5.11 or 5.13 of this Agreement or (ii) thirty (30) days after the earlier of any Loan Party’s knowledge of such breach or notice thereof from the Administrative Agent (which notice will be given at the request of any Lender) if such breach relates to terms or provisions of any other Section of this Agreement or any other Loan Document;

(f)any Loan Party or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable;

(g)any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of time or both) the holder or holders of any Material Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness to the extent such sale or transfer is permitted by the terms of Section 6.05;

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(h)an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of a Loan Party or any Subsidiary or its debts, or of a substantial part of its assets, under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Loan Party orany Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for sixty (60) days or an order or decree approving or ordering any of the foregoing shall be entered;

(i)any Loan Party or any Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Loan Party or Subsidiary of any Loan Party or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;

(j)any Loan Party or any Subsidiary shall become unable, admit in writing its inability, or publicly declare its intention not to, or fail generally, to pay its debts as they become due;

(k)one or more judgments for the payment of money in an aggregate amount in excess of $1,000,000 shall be rendered against any Loan Party or any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of any Loan Party or any Subsidiary to enforce any such judgment or any Loan Party or any Subsidiary shall fail within thirty (30) days to discharge one or more non-monetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;

(l)an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;

(m)a Change in Control shall occur;

(n)the Loan Guaranty or any Obligation Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Loan Guaranty or any Obligation Guaranty, or any Loan Guarantor shall fail to comply with any of the terms or provisions of the Loan Guaranty or any Obligation Guaranty to which it is a party, or any Loan Guarantor shall deny that it has any further liability under the Loan Guaranty or any Obligation Guaranty to which it is a party, or shall give notice to such effect;

(o)except as permitted by the terms of any Collateral Document or this Agreement (i) any Collateral Document shall for any reason fail to create a valid security interest in any Collateral purported to be covered thereby, or (ii) any Lien securing any Secured Obligation shall cease to be a perfected, first priority Lien, in each case other than solely as a result of an action or failure to act by the Administrative Agent;

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(p)any Collateral Document shall fail to remain in full force or effect except solely due to an action or failure to act by the Administrative Agent or any action shall be taken by a Loan Party to discontinue or to assert the invalidity or unenforceability of any Collateral Document;

(q)a Loan Party or any of its directors, officers, partners, members, owners, trustees, employees, agents, administrators, managers, representatives or advisors asserts or claims that any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);

(r)a Loan Party or any of its directors, officers, partners, members, owners, trustees, employees, agents, administrators, managers, representatives or advisors or any holder of Intragroup Obligations shall for any reason challenge the enforceability of the subordination provisions with respect to any Intragroup Obligations or shall assert in writing, or engage in any action or inaction that evidences its assertion, that any such subordination provision has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms;  

(s)any Loan Party, Subsidiary or Managed Entity is required to pay a fine, penalty, settlement amount or other payment (whether imposed by judicial order or settlement) which, individually or in the aggregate, would result in a Material Adverse Effect (except to the extent covered by insurance as to which the insurer does not dispute coverage) for any violation or alleged violation of any Health Care Law;

(t)any Loan Party, Subsidiary or Managed Entity receives notice that it will be excluded from participation in a Governmental Payor Program or that a Product will be recalled and such event could reasonably be expected, individually or in the aggregate for all such events, to have a Material Adverse Effect; or

(u)if any Loan Party, Subsidiary or Managed Entity defaults in the performance of, or compliance with, any term of any Management Services Document to which it is a party, subject to any applicable cure periods contained therein; (ii) any provision of any Management Services Document, at any time after its execution and delivery and for any reason other than as expressly permitted thereunder or hereunder, ceases to be in full force and effect; (iii) any Loan Party contests in any manner the validity or enforceability of any provision of any Management Services Document; or (iv) any Loan Party denies that it has any further liability or obligation under any provision of any Management Services Document to which it is a party, or purports to revoke, terminate or rescind any provision of any Management Services Document to which it is a party, and, in the case of any of clauses (i) through (iv), such event, when taken together with any such events occurring with respect to other Loan Parties, could reasonably be expected to have a Material Adverse Effect;

then, and in every such event (other than an event with respect to the Borrower described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent at the direction of the Required Lenders shall, by notice to the Borrower, take any of the following actions, at the same or different times:  (i) terminate the Revolving Commitments (including the Swingline Commitment), whereupon the Revolving Commitments shall terminate immediately, (ii) declare the Loans then outstanding to be due and payable in whole (or in part, but ratably as among the Classes of Loans and the Loans of each Class at the time outstanding, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), whereupon the

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principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall become due and payable immediately, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower, and (iii) require cash collateral for the LC Exposure in accordance with Section 2.06(j) hereof; and in the case of any event with respect to the Borrower described in clause (h) or (i) of this Article, the Revolving Commitments (including the Swingline Commitment) shall automatically terminate and the principal of the Loans then outstanding, and cash collateral for the LC Exposure, together with accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder, shall automatically become due and payable, in each case without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower. Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent at the direction of the Required Lenders shallincrease the rate of interest applicable to the Loans and other Obligations as set forth in this Agreement and exercise any rights and remedies provided to the Administrative Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC and the PPSA.

ARTICLE VIII

The Administrative Agent

SECTION 8.01. Authorization and Action.

(a)Each Lender, on behalf of itself and any of its Affiliates that are Secured Parties and each Issuing Bank hereby irrevocably appoints the entity named as Administrative Agent in the heading of this Agreement and its successors and assigns to serve as the administrative agent and collateral agent under the Loan Documents and each Lender and each Issuing Bank authorizes the Administrative Agent to take such actions as agent on its behalf and to exercise such powers under this Agreement and the other Loan Documents as are delegated to the Administrative Agent under such agreements and to exercise such powers as are reasonably incidental thereto. In addition, to the extent required under the laws of any jurisdiction other than within the United States, each Lender and each Issuing Bank hereby grants to the Administrative Agent any required powers of attorney to execute and enforce any Collateral Document governed by the laws of such jurisdiction on such Lender’s or such Issuing Bank’s behalf.  Without limiting the foregoing, each Lender and each Issuing Bank hereby authorizes the Administrative Agent to execute and deliver, and to perform its obligations under, each of the Loan Documents to which the Administrative Agent is a party, to exercise all rights, powers and remedies that the Administrative Agent may have under such Loan Documents.

(b)As to any matters not expressly provided for herein and in the other Loan Documents (including enforcement or collection), the Administrative Agent shall not be required to exercise any discretion or take any action, but shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon the written instructions of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, pursuant to the terms in the Loan Documents), and, unless and until revoked in writing, such instructions shall be binding upon each Lender and each Issuing Bank; provided, however, that the Administrative Agent shall not be required to take any action that (i) the Administrative Agent in good faith believes exposes it to liability unless the Administrative Agent receives an indemnification satisfactory to it from the Lenders and the Issuing Banks with respect to such action or (ii) is contrary to this Agreement or any other Loan Document or applicable law, including any action that may be in violation of the automatic stay under any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any requirement of law relating to bankruptcy, insolvency or reorganization or relief of debtors; provided, further, that the Administrative Agent may seek clarification or direction from the Required Lenders prior to the exercise

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of any such instructed action and may refrain from acting until such clarification or direction has been provided. Except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower, any other Loan Party, any Subsidiary or any Affiliate of any of the foregoing that is communicated to or obtained by the Person serving as Administrative Agent or any of its Affiliates in any capacity. Nothing in this Agreement shall require the Administrative Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(c)In performing its functions and duties hereunder and under the other Loan Documents, the Administrative Agent is acting solely on behalf of the Lenders and the Issuing Banks (except in limited circumstances expressly provided for herein relating to the maintenance of the Register), and its duties are entirely mechanical and administrative in nature.  Without limiting the generality of the foregoing:

(i)the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or duty or any other relationship as the agent, fiduciary or trustee of or for any Lender, Issuing Bank, any other Secured Party or holder of any other obligation other than as expressly set forth herein and in the other Loan Documents, regardless of whether a Default or an Event of Default has occurred and is continuing (and it is understood and agreed that the use of the term “agent” (or any similar term) herein or in any other Loan Document with reference to the Administrative Agent is not intended to connote any fiduciary duty or other implied (or express) obligations arising under agency doctrine of any applicable law, and that such term is used as a matter of market custom and is intended to create or reflect only an administrative relationship between contracting parties); additionally, each Lender agrees that it will not assert any claim against the Administrative Agent based on an alleged breach of fiduciary duty by the Administrative Agent in connection with this Agreement and the transactions contemplated hereby; and

(ii)nothing in this Agreement or any Loan Document shall require the Administrative Agent to account to any Lender for any sum or the profit element of any sum received by the Administrative Agent for its own account;

(d)The Administrative Agent may perform any of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any of their respective duties and exercise their respective rights and powers through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities pursuant to this Agreement. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agent except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agent.

(e)None of any syndication agent or the Arranger shall have obligations or duties whatsoever in such capacity under this Agreement or any other Loan Document and shall incur no liability hereunder or thereunder in such capacity, but all such persons shall have the benefit of the indemnities provided for hereunder.

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(f)In case of the pendency of any proceeding with respect to any Loan Party under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, the Administrative Agent (irrespective of whether the principal of any Loan or any reimbursement obligation in respect of any LC Disbursement shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(i)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, LC Disbursements and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Banks and the Administrative Agent (including any claim under Sections 2.12, 2.13, 2.15, 2.17 and 9.03) allowed in such judicial proceeding; and

(ii)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such proceeding is hereby authorized by each Lender, each Issuing Bank and each other Secured Party to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders, the Issuing Banks or the other Secured Parties, to pay to the Administrative Agent any amount due to it, in its capacity as the Administrative Agent, under the Loan Documents (including under Section 9.03).  Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or Issuing Bank any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or Issuing Bank or to authorize the Administrative Agent to vote in respect of the claim of any Lender or Issuing Bank in any such proceeding.

(g)The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Banks, and, except solely to the extent of the Borrower’s rights to consent pursuant to and subject to the conditions set forth in this Article, none of the Borrower or any Subsidiary, or any of their respective Affiliates, shall have any rights as a third party beneficiary under any such provisions. Each Secured Party, whether or not a party hereto, will be deemed, by its acceptance of the benefits of the Collateral and of the Guarantees of the Secured Obligations provided under the Loan Documents, to have agreed to the provisions of this Article.

SECTION 8.02. Administrative Agent’s Reliance, Indemnification, Etc.

(a) Neither the Administrative Agent nor any of its Related Parties shall be (i) liable for any action taken or omitted to be taken by it under or in connection with this Agreement or the other Loan Documents (x) with the consent of or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith to be necessary, under the circumstances as provided in the Loan Documents) or (y) in the absence of its own gross negligence or willful misconduct (such absence to be presumed unless otherwise determined by a court of competent jurisdiction by a final and nonappealable judgment) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by any Loan Party or any officer thereof contained in this Agreement or any other Loan Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Loan Document or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or for any failure of any Loan Party to perform its obligations hereunder or thereunder.

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(b)The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof (stating that it is a “notice of default”) is given to the Administrative Agent by the Borrower, a Lender or an Issuing Bank, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered thereunder or in connection therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document or the occurrence of any Default, (iv) the sufficiency, validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent or satisfaction of any condition that expressly refers to the matters described therein being acceptable or satisfactory to the Administrative Agent, or (vi) the creation, perfection or priority of Liens on the Collateral.

(c)Without limiting the foregoing, the Administrative Agent (i) may treat the payee of any promissory note as its holder until such promissory note has been assigned in accordance with Section 9.04, (ii) may rely on the Register to the extent set forth in Section 9.04(b), (iii) may consult with legal counsel (including counsel to the Borrower), independent public accountants and other experts selected by it, and shall not be liable for any action taken or omitted to be taken in good faith by it in accordance with the advice of such counsel, accountants or experts, (iv) makes no warranty or representation to any Lender or Issuing Bank and shall not be responsible to any Lender or Issuing Bank for any statements, warranties or representations made by or on behalf of any Loan Party in connection with this Agreement or any other Loan Document, (v) in determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Bank, may presume that such condition is satisfactory to such Lender or Issuing Bank unless the Administrative Agent shall have received notice to the contrary from such Lender or Issuing Bank sufficiently in advance of the making of such Loan or the issuance of such Letter of Credit and (vi) shall be entitled to rely on, and shall incur no liability under or in respect of this Agreement or any other Loan Document by acting upon, any notice, consent, certificate or other instrument or writing (which writing may be a fax, any electronic message, Internet or intranet website posting or other distribution) or any statement made to it orally or by telephone and believed by it to be genuine and signed or sent or otherwise authenticated by the proper party or parties (whether or not such Person in fact meets the requirements set forth in the Loan Documents for being the maker thereof).

SECTION 8.03. Posting of Communications.

(a)The Borrower agrees that the Administrative Agent may, but shall not be obligated to, make any Communications available to the Lenders and the Issuing Banks by posting the Communications on IntraLinks™, DebtDomain, SyndTrak, ClearPar or any other electronic system chosen by the Administrative Agent to be its electronic transmission system (the “Approved Electronic Platform”).

(b)Although the Approved Electronic Platform and its primary web portal are secured with generally-applicable security procedures and policies implemented or modified by the Administrative Agent from time to time (including, as of the Effective Date, a user ID/password authorization system) and the Approved Electronic Platform is secured through a per-deal authorization method whereby each user may access the Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders, each of the Issuing Banks and the Borrower acknowledges and agrees that the distribution of material through an electronic medium is not necessarily secure, that the Administrative Agent is not responsible for approving or vetting the representatives or contacts of any Lender that are added to the Approved Electronic Platform, and that there are confidentiality and other risks associated with such distribution. Each of the Lenders, each of the Issuing Banks and the Borrower hereby approves distribution of the Communications through the Approved Electronic Platform and understands and assumes the risks of such distribution.

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(c)THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS ARE PROVIDED “AS IS” AND “AS AVAILABLE”. THE APPLICABLE PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE APPROVED ELECTRONIC PLATFORM AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM AND THE COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE APPLICABLE PARTIES IN CONNECTION WITH THE COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM. IN NO EVENT SHALL THE ADMINISTRATIVE AGENT, ANY SYNDICATION AGENT OR THE ARRANGER OR ANY OF THEIR RESPECTIVE RELATED PARTIES (COLLECTIVELY, “APPLICABLE PARTIES”) HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER, ANY ISSUING BANK OR ANY OTHER PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR THE ADMINISTRATIVE AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE INTERNET OR THE APPROVED ELECTRONIC PLATFORM.

“Communications” means, collectively, any notice, demand, communication, information, document or other material provided by or on behalf of any Loan Party pursuant to any Loan Document or the transactions contemplated therein which is distributed by the Administrative Agent, any Lender or any Issuing Bank by means of electronic communications pursuant to this Section, including through an Approved Electronic Platform.

(d)Each Lender and each Issuing Bank agrees that notice to it (as provided in the next sentence) specifying that Communications have been posted to the Approved Electronic Platform shall constitute effective delivery of the Communications to such Lender for purposes of the Loan Documents.  Each Lender and Issuing Bank agrees (i) to notify the Administrative Agent in writing (which could be in the form of electronic communication) from time to time of such Lender’s or Issuing Bank’s (as applicable) email address to which the foregoing notice may be sent by electronic transmission and (ii) that the foregoing notice may be sent to such email address.

(e)Each of the Lenders, each of the Issuing Banks and the Borrower agrees that the Administrative Agent may, but (except as may be required by applicable law) shall not be obligated to, store the Communications on the Approved Electronic Platform in accordance with the Administrative Agent’s generally applicable document retention procedures and policies.

(f)Nothing herein shall prejudice the right of the Administrative Agent, any Lender or any Issuing Bank to give any notice or other communication pursuant to any Loan Document in any other manner specified in such Loan Document.

SECTION 8.04. The Administrative Agent Individually. With respect to its Revolving Commitment, Loans and Letters of Credit, the Person serving as the Administrative Agent shall have and may exercise the same rights and powers hereunder and is subject to the same obligations and liabilities as and to the extent set forth herein for any other Lender or Issuing Bank, as the case may be.  The terms “Issuing Banks”, “Lenders”, “Required Lenders” and any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its individual capacity as a Lender, Issuing Bank or as one of the Required Lenders, as applicable. The Person serving as the Administrative Agent and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in

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any other advisory capacity for and generally engage in any kind of banking, trust or other business with, any Loan Party, any Subsidiary or any Affiliate of any of the foregoing as if such Person was not acting as the Administrative Agent and without any duty to account therefor to the Lenders or the Issuing Banks.

SECTION 8.05. Successor Administrative Agent.

(a)The Administrative Agent may resign at any time by giving 30 days’ prior written notice thereof to the Lenders, the Issuing Banks and the Borrower, whether or not a successor Administrative Agent has been appointed. Upon any such resignation, the Required Lenders shall have the right to appoint a successor Administrative Agent.  If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Administrative Agent’s giving of notice of resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent, which shall be a bank with an office in New York, New York and Toronto, Ontario or an Affiliate of any such bank.  In either case, such appointment shall be subject to the prior written approval of the Borrower (which approval may not be unreasonably withheld and shall not be required while an Event of Default has occurred and is continuing).  Upon the acceptance of any appointment as Administrative Agent by a successor Administrative Agent, such successor Administrative Agent shall succeed to, and become vested with, all the rights, powers, privileges and duties of the retiring Administrative Agent. Upon the acceptance of appointment as Administrative Agent by a successor Administrative Agent, the retiring Administrative Agent shall be discharged from its duties and obligations under this Agreement and the other Loan Documents. Prior to any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the retiring Administrative Agent shall take such action as may be reasonably necessary to assign to the successor Administrative Agent its rights as Administrative Agent under the Loan Documents.

(b)Notwithstanding paragraph (a) of this Section, in the event no successor Administrative Agent shall have been so appointed and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its intent to resign, the retiring Administrative Agent may give notice of the effectiveness of its resignation to the Lenders, the Issuing Banks and the Borrower, whereupon, on the date of effectiveness of such resignation stated in such notice, (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents; provided that solely for purposes of maintaining any security interest granted to the Administrative Agent under any Collateral Document for the benefit of the Secured Parties, the retiring Administrative Agent shall continue to be vested with such security interest as collateral agent for the benefit of the Secured Parties, and continue to be entitled to the rights set forth in such Collateral Document and Loan Document, and, in the case of any Collateral in the possession of the Administrative Agent, shall continue to hold such Collateral, in each case until such time as a successor Administrative Agent is appointed and accepts such appointment in accordance with this Section (it being understood and agreed that the retiring Administrative Agent shall have no duty or obligation to take any further action under any Collateral Document, including any action required to maintain the perfection of any such security interest),  and (ii) the Required Lenders shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent; provided that (A) all payments required to be made hereunder or under any other Loan Document to the Administrative Agent for the account of any Person other than the Administrative Agent shall be made directly to such Person and (B) all notices and other communications required or contemplated to be given or made to the Administrative Agent shall directly be given or made to each Lender and each Issuing Bank.  Following the effectiveness of the Administrative Agent’s resignation from its capacity as such, the provisions of this Article, Section 2.17(d) and Section 9.03, as well as any exculpatory, reimbursement and indemnification provisions set forth in any other Loan Document, shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent and in respect of the matters referred to in the proviso under clause (a) above.

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SECTION 8.06. Acknowledgements of Lenders and Issuing Banks.

(a)Each Lender represents that it is engaged in making, acquiring or holding commercial loans in the ordinary course of its business and that it has, independently and without reliance upon the Administrative Agent, the Arranger or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement as a Lender, and to make, acquire or hold Loans hereunder.  Each Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent, the Arranger or any other Lender, or any of the Related Parties of any of the foregoing, and based on such documents and information (which may contain material, non-public information within the meaning of the United States securities laws concerning the Borrower and its Affiliates) as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

(b)Each Lender, by delivering its signature page to this Agreement on the Effective Date, or delivering its signature page to an Assignment and Assumption or any other Loan Document pursuant to which it shall become a Lender hereunder, shall be deemed to have acknowledged receipt of, and consented to and approved, each Loan Document and each other document required to be delivered to, or be approved by or satisfactory to, the Administrative Agent or the Lenders on the Effective Date or the effective date of any such Assignment and Assumption or any other Loan document pursuant to which it shall have become a Lender hereunder.

(c)Each Lender hereby agrees that (i) it has requested a copy of each Report prepared by or on behalf of the Administrative Agent; (ii) the Administrative Agent (A) makes no representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein or any inaccuracy or omission contained in or relating to a Report and (B) shall not be liable for any information contained in any Report; (iii) the Reports are not comprehensive audits or examinations, and that any Person performing any field examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that the Administrative Agent undertakes no obligation to update, correct or supplement the Reports; (iv) it will keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party or any other Person except as otherwise permitted pursuant to this Agreement; and (v) without limiting the generality of any other indemnification provision contained in this Agreement, (A) it will hold the Administrative Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any extension of credit that the indemnifying Lender has made or may make to the Borrower, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, a Loan or Loans; and (B) it will pay and protect, and indemnify, defend, and hold the Administrative Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorneys’ fees) incurred by the Administrative Agent or any such other Person as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.

SECTION 8.07. Collateral Matters.

(a)Except with respect to the exercise of setoff rights in accordance with Section 9.08 or with respect to a Secured Party’s right to file a proof of claim in an insolvency proceeding, no Secured Party shall have any right individually to realize upon any of the Collateral or to enforce any Guarantee of the Secured Obligations, it being understood and agreed that all powers, rights and remedies under the

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Loan Documents may be exercised solely by the Administrative Agent on behalf of the Secured Parties in accordance with the terms thereof.  In its capacity, the Administrative Agent is a “representative” of the Secured Parties within the meaning of the term “secured party” as defined in the UCC.  In the event that any Collateral is hereafter pledged by any Person as collateral security for the Secured Obligations, the Administrative Agent is hereby authorized, and hereby granted a power of attorney, to execute and deliver on behalf of the Secured Parties any Loan Documents necessary or appropriate to grant and perfect a Lien on such Collateral in favor of the Administrative Agent on behalf of the Secured Parties.  

(b)In furtherance of the foregoing and not in limitation thereof, no arrangements in respect of Banking Services the obligations under which constitute Secured Obligations and no Swap Agreement the obligations under which constitute Secured Obligations, will create (or be deemed to create) in favor of any Secured Party that is a party thereto any rights in connection with the management or release of any Collateral or of the obligations of any Loan Party under any Loan Document.  By accepting the benefits of the Collateral, each Secured Party that is a party to any such arrangement in respect of Banking Services or Swap Agreement, as applicable, shall be deemed to have appointed the Administrative Agent to serve as administrative agent and collateral agent under the Loan Documents and agreed to be bound by the Loan Documents as a Secured Party thereunder, subject to the limitations set forth in this paragraph.

(c)The Secured Parties irrevocably authorize the Administrative Agent, at its option and in its discretion, to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 6.02(b). The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders or any other Secured Party for any failure to monitor or maintain any portion of the Collateral.

SECTION 8.08. Credit Bidding.   The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Obligations (including by accepting some or all of the Collateral in satisfaction of some or all of the Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code, including under Sections 363, 1123 or 1129 of the Bankruptcy Code, the Companies’ Creditors Arrangement Act (Canada), the Bankruptcy and Insolvency Act (Canada) and the Winding Up and Restructuring Act (Canada), or any similar laws in any other jurisdictions to which a Loan Party is subject, or (b) at any other sale, foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable law.  In connection with any such credit bid and purchase, the Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid by the Administrative Agent at the direction of the Required Lenders on a ratable basis (with Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that shall vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) for  the asset or assets so purchased (or for the equity interests or debt instruments of the acquisition vehicle or vehicles that are issued in connection with such purchase).  In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles and to assign any successful credit bid to such acquisition vehicle or vehicles (ii) each of the Secured Parties’ ratable interests in the Obligations which were credit bid shall be deemed without any further action under this Agreement to be assigned to such vehicle or vehicles for the purpose of closing such sale, (iii) the Administrative Agent shall be authorized to adopt documents providing for the governance of the

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acquisition vehicle or vehicles (provided that any actions by the Administrative Agent with respect to such acquisition vehicle or vehicles, including any disposition of the assets or equity interests thereof, shall be governed, directly or indirectly, by, and the governing documents shall provide for, control by the vote of the Required Lenders or their permitted assignees under the terms of this Agreement or the governing documents of the applicable acquisition vehicle or vehicles, as the case may be, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in Section 9.02 of this Agreement), (iv) the Administrative Agent on behalf of such acquisition vehicle or vehicles shall be authorized to issue to each of the Secured Parties, ratably on account of the relevant Obligations which were credit bid, interests, whether as equity, partnership, limited partnership interests or membership interests, in any such acquisition vehicle  and/or debt instruments issued by such acquisition vehicle, all without the need for any Secured Party or acquisition vehicle to take any further action, and (v) to the extent that Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Obligations assigned to the acquisition vehicle exceeds the amount of Obligations credit bid by the acquisition vehicle or otherwise), such Obligations shall automatically be reassigned to the Secured Parties pro rata with their original interest in such Obligations and the equity interests and/or debt instruments issued by any acquisition vehicle on account of such Obligations shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.  Notwithstanding that the ratable portion of the Obligations of each Secured Party are deemed assigned to the acquisition vehicle or vehicles as set forth in clause (ii) above, each Secured Party shall execute such documents and provide such information regarding the Secured Party (and/or any designee of the Secured Party which will receive interests in or debt instruments issued by such acquisition vehicle) as the Administrative Agent may reasonably request in connection with the formation of any acquisition vehicle, the formulation or submission of any credit bid or the consummation of the transactions contemplated by such credit bid.

SECTION 8.09. Certain ERISA Matters.   

(a)Each Lender (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger  and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that at least one of the following is and will be true:

(i)such Lender is not using “plan assets” (within the meaning of the Plan Asset Regulations) of one or more Benefit Plans in connection with the Loans, the Letters of Credit or the Revolving Commitments,

(ii)the transaction exemption set forth in one or more PTEs, such as PTE 84-14 (a class exemption for certain transactions determined by independent qualified professional asset managers), PTE 95-60 (a class exemption for certain transactions involving insurance company general accounts), PTE 90-1 (a class exemption for certain transactions involving insurance company pooled separate accounts), PTE 91-38 (a class exemption for certain transactions involving bank collective investment funds) or PTE 96-23 (a class exemption for certain transactions determined by in-house asset managers), is applicable with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement, and the conditions for exemptive relief thereunder are and will continue to be satisfied in connection therewith,

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(iii)(A) such Lender is an investment fund managed by a “Qualified Professional Asset Manager” (within the meaning of Part VI of PTE 84-14), (B) such Qualified Professional Asset Manager made the investment decision on behalf of such Lender to enter into, participate in, administer and perform the Loans, the Letters of Credit, the Revolving Commitments and this Agreement, (C) the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement satisfies the requirements of sub-sections (b) through (g) of Part I of PTE 84-14 and (D) to the best knowledge of such Lender, the requirements of subsection (a) of Part I of PTE 84-14 are satisfied with respect to such Lender’s entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement, or

(iv)such other representation, warranty and covenant as may be agreed in writing between the Administrative Agent, in its sole discretion, and such Lender.

(b)In addition, unless sub-clause (i) in the immediately preceding clause (a) is true with respect to a Lender or such Lender has not provided another representation, warranty and covenant as provided in sub-clause (iv) in the immediately preceding clause (a), such Lender further (x) represents and warrants, as of the date such Person became a Lender party hereto, to, and (y) covenants, from the date such Person became a Lender party hereto to the date such Person ceases being a Lender party hereto, for the benefit of, the Administrative Agent, and each Arranger and their respective Affiliates, and not, for the avoidance of doubt, to or for the benefit of the Borrower or any other Loan Party, that:

(i)none of the Administrative Agent, or the Arranger or any of their respective Affiliates is a fiduciary with respect to the assets of such Lender (including in connection with the reservation or exercise of any rights by the Administrative Agent under this Agreement, any Loan Document or any documents related to hereto or thereto),

(ii)the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement is independent (within the meaning of 29 CFR § 2510.3-21, as amended from time to time) and is a bank, an insurance carrier, an investment adviser, a broker-dealer or other person that holds, or has under management or control, total assets of at least $50 million, in each case as described in 29 CFR § 2510.3-21(c)(1)(i)(A)-(E),

(iii)the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement is capable of evaluating investment risks independently, both in general and with regard to particular transactions and investment strategies (including in respect of the Obligations),

(iv)the Person making the investment decision on behalf of such Lender with respect to the entrance into, participation in, administration of and performance of the Loans, the Letters of Credit, the Revolving Commitments and this Agreement is a fiduciary under ERISA or the Code, or both, with respect to the Loans, the Letters of Credit, the Revolving Commitments and this Agreement and is responsible for exercising independent judgment in evaluating the transactions hereunder, and

(v)no fee or other compensation is being paid directly to the Administrative Agent, or the Arranger or any their respective Affiliates for investment advice (as opposed to

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other services) in connection with the Loans, the Letters of Credit, the Revolving Commitments or this Agreement.

(c)The Administrative Agent, and each Arranger hereby informs the Lenders that each such Person is not undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the transactions contemplated hereby, and that such Person has a financial interest in the transactions contemplated hereby in that such Person or an Affiliate thereof (i) may receive interest or other payments with respect to the Loans, the Letters of Credit, the Revolving Commitments and this Agreement, (ii) may recognize a gain if it extended the Loans, the Letters of Credit or the Revolving Commitments for an amount less than the amount being paid for an interest in the Loans, the Letters of Credit or the Revolving Commitments by such Lender or (iii) may receive fees or other payments in connection with the transactions contemplated hereby, the Loan Documents or otherwise, including structuring fees, commitment fees, arrangement fees, facility fees, upfront fees, underwriting fees, ticking fees, agency fees, administrative agent or collateral agent fees, utilization fees, minimum usage fees, letter of credit fees, fronting fees, deal-away or alternate transaction fees, amendment fees, processing fees, term out premiums, banker’s acceptance fees, breakage or other early termination fees or fees similar to the foregoing.

ARTICLE IX

Miscellaneous

SECTION 9.01.  Notices .  

(a)Except in the case of notices and other communications expressly permitted to be given by telephone or Electronic Systems (and subject in each case to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax, as follows:

(i) if to any Loan Party, to it in care of the Borrower at:

CRH Medical Corporation

227 Bellevue Way, NE, #188

Bellevue, WA USA 98004

Attn: [REDACTED]

Fax No: [REDACTED]

Email: [REDACTED]

With a copy to:

Blake, Cassels & Graydon LLP

595 Burrard Street, Suite 2600

Vancouver BC V7X 1L3

Attn: [REDACTED]

Telephone: [REDACTED]

Fax No: [REDACTED]

Email: [REDACTED]

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(ii) if to the Administrative Agent, the Swingline Lender, or Chase in its capacity as an Issuing Bank, to JPMorgan Chase Bank, N.A., Toronto Branch at:

JPMorgan Chase Bank, N.A., Toronto Branch

66 Wellington Street West, Floor 45

Toronto, Ontario, M5K 1E7, Canada

Attention: [REDACTED]

Telephone: [REDACTED]

Fax No: [REDACTED]

Email: [REDACTED]

With a copy to:

JPMorgan Chase Bank, N.A.

4 New York Plaza

New York, NY 10004

Attention: [REDACTED]

Telephone: [REDACTED]

Email: [REDACTED]

(iii) if to any other Lender or Issuing Bank, to it at its address or fax number set forth in its Administrative Questionnaire.

All such notices and other communications (i) sent by hand or overnight courier service, or mailed by certified or registered mail shall be deemed to have been given when received, (ii) sent by fax shall be deemed to have been given when sent, provided that if not given during normal business hours for the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day of the recipient, or (iii) delivered through Electronic Systems or Approved Electronic Platforms, as applicable, to the extent provided in paragraph (b) below shall be effective as provided in such paragraph.

(b)Notices and other communications to the Lenders hereunder may be delivered or furnished by using Electronic Systems or Approved Electronic Platforms, as applicable, or pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II or to compliance and no Default certificates delivered pursuant to Section 5.01(d) unless otherwise agreed by the Administrative Agent and the applicable Lender.  Each of the Administrative Agent and the Borrower (on behalf of the Loan Parties) hereby agree to accept notices and other communications to it hereunder by using Electronic Systems or Approved Electronic Platforms, as applicable.  Unless the Administrative Agent otherwise proscribes, all such notices and other communications (i) if not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient, at its e-mail address as described in the foregoing clause (i), of notification that such notice or communication is available and identifying the website address therefor; provided that, if such posting is not sent during the normal business hours of the recipient, such posting shall be deemed to have been sent at the opening of business on the next Business Day of the recipient.

(c)Any party hereto may change its address, facsimile number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.  

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SECTION 9.02.  Waivers; Amendments.

(a)No failure or delay by the Administrative Agent, the Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power.  The rights and remedies of the Administrative Agent, the Issuing Bank and the Lenders hereunder and under any other Loan Document are cumulative and are not exclusive of any rights or remedies that they would otherwise have.  No waiver of any provision of any Loan Document or consent to any departure by any Loan Party therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given.  Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.

(b)Subject to Section 2.14(c) and Section 9.02(e) below, neither this Agreement nor any other Loan Document nor any provision hereof or thereof may be waived, amended or modified except (i) in the case of this Agreement, except as otherwise set forth in Section 2.09(f), pursuant to an agreement or agreements in writing entered into by the Borrower and the Required Lenders or (ii) in the case of any other Loan Document, pursuant to an agreement or agreements in writing entered into by the Administrative Agent and the Loan Party or Loan Parties that are parties thereto, with the consent of the Required Lenders; provided that no such agreement shall (A) increase the Revolving Commitment of any Lender without the written consent of such Lender (including any such Lender that is a Defaulting Lender), (B) reduce or forgive the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce or forgive any interest or fees payable hereunder, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby (except that any amendment or modification of the financial covenants in this Agreement (or defined terms used in the financial covenants in this Agreement) shall not constitute a reduction in the rate of interest or fees for purposes of this clause (B)), (C) postpone any scheduled date of payment of the principal amount of any Loan or LC Disbursement, or any date for the payment of any interest, fees or other Obligations payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Revolving Commitment, without the written consent of each Lender (including any such Lender that is a Defaulting Lender) directly affected thereby, (D) change Section 2.18(b) or (d) in a manner that would alter the manner in which payments are shared, without the written consent of each Lender (other than any Defaulting Lender), (E) change any of the provisions of this Section or the definition of “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders (or Lenders of any Class) required to waive, amend or modify any rights thereunder or make any determination or grant any consent thereunder, without the written consent of each Lender (other than any Defaulting Lender) directly affected thereby, (F) change Section 2.20, without the consent of each Lender (other than any Defaulting Lender), (G) release any Guarantor from its obligation under its Loan Guaranty or Obligation Guaranty (except as otherwise permitted herein or in the other Loan Documents), without the written consent of each Lender (other than any Defaulting Lender), (H) except as provided in clause (c) of this Section or in any Collateral Document, release or subordinate all or substantially all of the Collateral without the written consent of each Lender (other than any Defaulting Lender) or (I) subordinate the Secured Obligations under the Loan Documents in right of payment to any other Indebtedness without the written consent of each Lender (other than any Defaulting Lender); provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, the Swingline Lender or the Issuing Bank hereunder without the prior written consent of the Administrative Agent, the Swingline Lender or the Issuing Bank, as the case may be (it being understood that any amendment to Section 2.20 shall require the consent of the

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Administrative Agent, the Swingline Lender and the Issuing Bank); provided further that no such agreement shall amend or modify the provisions of Section 2.07 or any letter of credit application and any bilateral agreement between the Borrower and the Issuing Bank regarding the Issuing Bank’s Issuing Bank Sublimit or the respective rights and obligations between the Borrower and the Issuing Bank in connection with the issuance of Letters of Credit without the prior written consent of the Administrative Agent and the Issuing Bank, respectively.  The Administrative Agent may also unilaterally amend the Commitment Schedule to reflect assignments entered into pursuant to Section 9.04. Any amendment, waiver or other modification of this Agreement or any other Loan Document that by its terms affects the rights or duties under this Agreement of the Lenders of one or more Classes (but not the Lenders of any other Class), may be effected by an agreement or agreements in writing entered into by the Borrower and the requisite number or percentage in interest of each affected Class of Lenders that would be required to consent thereto under this Section if such Class of Lenders were the only Class of Lenders hereunder at the time.

(c)The Lenders and the Issuing Bank hereby irrevocably authorize the Administrative Agent, at its option and in its sole discretion, to release any Liens granted to the Administrative Agent by the Loan Parties on any Collateral (i) upon the Payment in Full of all Secured Obligations, and the cash collateralization of all Unliquidated Obligations in a manner satisfactory to each affected Lender, (ii) constituting property being sold or disposed of if the Loan Party disposing of such property provides written notice to the Administrative Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Administrative Agent may rely conclusively on any such notice, without further inquiry), and to the extent that the property being sold or disposed of constitutes 100% of the Equity Interests of a Subsidiary, the Administrative Agent is authorized to release any Loan Guaranty provided by such Subsidiary, (iii) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, or (iv) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Administrative Agent and the Lenders pursuant to Article VII.  Except as provided in the preceding sentence, the Administrative Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that the Administrative Agent may, in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $[REDACTED] during any calendar year without the prior written authorization of the Required Lenders (it being agreed that the Administrative Agent may rely conclusively on one or more certificates of the Borrower as to the value of any Collateral to be so released, without further inquiry).  Any such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral. Any execution and delivery by the Administrative Agent of documents in connection with any such release shall be without recourse to or warranty by the Administrative Agent.

(d)If, in connection with any proposed amendment, waiver or consent requiring the consent of “each Lender” or “each Lender affected thereby,” the consent of the Required Lenders is obtained, but the consent of other necessary Lenders is not obtained (any such Lender whose consent is necessary but has not been obtained being referred to herein as a “Non-Consenting Lender”), then the Borrower may elect to replace a Non-Consenting Lender as a Lender party to this Agreement, provided that concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrower, the Administrative Agent and the Issuing Bank shall agree, as of such date, to purchase for cash the Loans and other Obligations due to the Non-Consenting Lender pursuant to an Assignment and Assumption and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of clause (b) of Section 9.04, and (ii) the Borrower shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then

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accrued but unpaid to such Non-Consenting Lender by the Borrower hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 2.15 and 2.17, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 2.16 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.  Each party hereto agrees that an assignment required pursuant to this paragraph may be effected pursuant to an Assignment and Assumption executed by the Borrower, the Administrative Agent and the assignee (or, to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and such parties are participants), and (b) the Lender required to make such assignment need not be a party thereto in order for such assignment to be effective and shall be deemed to have consented to an be bound by the terms thereof; providedthat following the effectiveness of any such assignment, the other parties to such assignment agree to execute and deliver such documents necessary to evidence such assignment as reasonably requested by the applicable Lender, provided that any such documents shall be without recourse to or warranty by the parties thereto.

(e)Notwithstanding anything to the contrary herein the Administrative Agent may, with the consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any obvious error or any error, ambiguity, defect or inconsistency or omission of a technical or immaterial nature in any relevant provision.

SECTION 9.03.  Expenses; Indemnity; Damage Waiver.   

(a)The Loan Parties, jointly and severally, shall pay all (i) reasonable out‑of‑pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through an Electronic System or Approved Electronic Platform) of the credit facilities provided for herein, the preparation and administration of the Loan Documents and any amendments, modifications or waivers of the provisions of the Loan Documents (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) reasonable out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) reasonable out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender, including the fees, charges and disbursements of any counsel for the Administrative Agent, the Issuing Bank or any Lender, in connection with the enforcement, collection or protection of its rights in connection with the Loan Documents, including its rights under this Section, or in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of‑pocket expenses reasonably incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.  Expenses being reimbursed by the Loan Parties under this Section include, without limiting the generality of the foregoing, fees, costs and expenses incurred in connection with:

(A) Taxes, fees and other charges for (i) lien searches and (ii) filing financing statements and continuations, and other actions to perfect, protect, and continue the Administrative Agent’s Liens;

(B)sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take; and

(C)forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the accounts and lock boxes, and costs and expenses of preserving and protecting the Collateral.  

All of the foregoing fees, costs and expenses may be charged to the Borrower as Revolving Loans or to another deposit account, all as described in Section 2.18(c).

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(b)The Loan Parties, jointly and severally, shall indemnify the Administrative Agent, each Arranger, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, penalties, incremental taxes, liabilities and related expenses, including the fees, charges and disbursements of any counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of the Loan Documents or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by an Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated by a Loan Party or a Subsidiary, or any Environmental Liability related in any way to a Loan Party or a Subsidiary, (iv) the failure of a Loan Party to deliver to the Administrative Agent the required receipts or other required documentary evidence with respect to a payment made by such Loan Party for Taxes pursuant to Section 2.17, or (v) any actual or prospective claim, litigation, investigation, arbitration or proceeding relating to any of the foregoing, whether or not such claim, litigation, investigation, arbitration or proceeding is brought by any Loan Party or their respective equity holders, Affiliates, creditors or any other third Person and whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, penalties, liabilities or related expenses are determined by a court of competent jurisdiction by final judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.This Section 9.03(b) shall not apply with respect to Taxes other than any Taxes that represent losses or damages arising from any non-Tax claim.

(c)Each Lender severally agrees to pay any amount required to be paid by any Loan Party under paragraph (a) or (b) of this Section 9.03 to the Administrative Agent, the Swingline Lender and each Issuing Bank, and each Related Party of any of the foregoing Persons (each, an “Agent Indemnitee”) (to the extent not reimbursed by the Loan Parties and without limiting the obligation of any Loan Party to do so), ratably according to their respective Applicable Percentage in effect on the date on which indemnification is sought under this Section (or, if indemnification is sought after the date upon which the Revolving Commitments shall have terminated and the Loans shall have been paid in full, ratably in accordance with such Applicable Percentage immediately prior to such date), from and against any and all losses, claims, damages, liabilities and related expenses, including the fees, charges and disbursements of any kind whatsoever that may at any time (whether before or after the payment of the Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating to or arising out of the Revolving Commitments, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any of the foregoing; provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent Indemnitee in its capacity as such; provided further that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements that are found by a final decision of a court of competent jurisdiction to have resulted from such Agent Indemnitee’s gross negligence or willful misconduct.  The agreements in this Section shall survive the termination of this Agreement and the Payment in Full of the Secured Obligations.

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(d)To the extent permitted by applicable law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, (i) for any damages arising from the use by others of information or other materials obtained through telecommunications, electronic or other information transmission systems (including the Internet), or (ii) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document, or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof; providedthat nothing in this paragraph (d) shall relieve any Loan Party of any obligation it may have to indemnify an Indemnitee against special, indirect, consequential or punitive damages asserted against such Indemnitee by a third party.

(e)All amounts due under this Section shall be payable promptly after written demand therefor.

SECTION 9.04.  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 (including any Affiliate of the Issuing Bank that issues any Letter of Credit), except that (i) the 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 the Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section.  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 (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)(i)Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more Persons (other than an Ineligible Institution) all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Commitment, participations in Letters of Credit and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:

(A)the Borrower, provided that the Borrower shall be deemed to have consented to an assignment of all or a portion of the Revolving Loans and Revolving Commitments unless it shall object thereto by written notice to the Administrative Agent within ten (10) Business Days after having received notice thereof, and provided further that no consent of the Borrower shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee;

(B)the Administrative Agent;

(C)the Issuing Bank; and

(D)the Swingline Lender.

(ii)Assignments shall be subject to the following additional conditions:

(A)except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s Revolving Commitment or Loans of any Class, the amount of the Revolving

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Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000unless each of the Borrower and the Administrative Agent otherwise consent, provided that no such consent of the Borrower shall be required if an Event of Default has occurred and is continuing;

(B)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;

(C)the parties to each assignment shall execute and deliver to the Administrative Agent (x) an Assignment and Assumption or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, together with a processing and recordation fee of $[REDACTED]; and

(D)the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire in which the assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the other Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the assignee’s compliance procedures and applicable laws, including federal and state securities laws.

For the purposes of this Section 9.04(b), the terms “Approved Fund” and “Ineligible Institution” have the following meanings:

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

“Ineligible Institution” means a (a) natural person, (b) Defaulting Lender or its Parent, (c) holding company, investment vehicle or trust for, or owned and operated for the primary benefit of, a natural person or relative(s) thereof; provided that with respect to clause (c), such holding company, investment vehicle or trust shall not constitute an Ineligible Institution if it (x) has not been established for the primary purpose of acquiring any Loans or Revolving Commitments, (y) is managed by a professional advisor, who is not such natural person or a relative thereof, having significant experience in the business of making or purchasing commercial loans, and (z) has assets greater than $[REDACTED] and a significant part of its activities consist of making or purchasing commercial loans and similar extensions of credit in the ordinary course of its business or (d) Loan Party or a Subsidiary or other Affiliate of a Loan Party.

(iii)Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, 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 Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption 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 Sections 2.15, 2.16, 2.17 and 9.03).  Any

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assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 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 paragraph (c) of this Section.

(iv)The Administrative Agent, acting for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Revolving Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent, the Issuing Bank and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for inspection by the Borrower, the Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(v)Upon its receipt of (x) a duly completed Assignment and Assumption executed by an assigning Lender and an assignee or (y) to the extent applicable, an agreement incorporating an Assignment and Assumption by reference pursuant to an Approved Electronic Platform as to which the Administrative Agent and the parties to the Assignment and Assumption are participants, the assignee’s completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05, 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon.  No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.

(c)Any Lender may, without the consent of, or notice to, the Borrower, the Administrative Agent, the Swingline Lender or the Issuing Bank, sell participations to one or more banks or other entities (a “Participant”) other than an Ineligible Institution in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Revolving Commitment 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 Borrower, the Administrative Agent, the Issuing Bank and the other Lenders shall continue to deal solely and 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 described in the first proviso to Section 9.02(b) that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 (subject to the requirements and limitations therein, including the requirements under Sections 2.17(f) and (g) (it being understood that the documentation required under Section 2.17(f) shall be delivered to the participating Lender and the information and documentation required under Section 2.17(g) will be delivered to the Borrower and the Administrative Agent)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 2.18 and 2.19 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be

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entitled to receive any greater payment under Sections 2.15 or 2.17 with respect to any participation than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation.

Each Lender that sells a participation agrees, at the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 2.19(b) with respect to any Participant.  To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(d) as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under this Agreement or any other Loan Document (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any Revolving Commitments, Loans, Letters of Credit or its other obligations under this Agreement or any other Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such Revolving Commitment, Loan, Letter of Credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(d)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 without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; 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 9.05.  Survival .  All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Revolving Commitments have not expired or terminated.  The provisions of Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Revolving Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.

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SECTION 9.06.  Counterparts; Integration; Effectiveness; Electronic Execution.  (a) This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Agreement, the other Loan Documents and any separate letter agreements with respect to (i) fees payable to the Administrative Agent and (ii) increases or reductions of the Issuing Bank Sublimit of the Issuing Bank constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof.  Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.  

(b)Delivery of an executed counterpart of a signature page of this Agreement by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Agreement.  The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby or thereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform Electronic Transactions Act, Parts 2 and 3 of the Personal Information Protection and Electronic Documents Act (Canada) or the Electronic Transaction Act (British Columbia); provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent.

SECTION 9.07.  Severability .  Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

SECTION 9.08.  Right of Setoff.   If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Bank, and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time held, and other obligations at any time owing, by such Lender, such Issuing Bank or any such Affiliate, to or for the credit or the account of any Loan Party against any and all of the Secured Obligations owing to such Lender or such Issuing Bank or their respective Affiliates, irrespective of whether or not such Lender, Issuing Bank or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Loan Parties may be contingent or unmatured or are owed to a branch office or Affiliate of such Lender or such Issuing Bank different from the branch office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.20 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Banks, and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The applicable Lender, the

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Issuing Bank or such Affiliate shall notify the Borrower and the Administrative Agent of such setoff or application; provided that the failure to give such notice shall not affect the validity of such setoff or application under this Section. The rights of each Lender, each Issuing Bank and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Bank or their respective Affiliates may have.

SECTION 9.09.  Governing Law; Jurisdiction; Consent to Service of Process.   

(a)The Loan Documents (other than those containing a contrary express choice of law provision) shall be governed by and construed in accordance with the internal laws of the State of New York, but giving effect to federal laws applicable to national banks.

(b)Each of the Lenders and the Administrative Agent hereby irrevocably and unconditionally agrees that, notwithstanding the governing law provisions of any applicable Loan Document, any claims brought against the Administrative Agent by any Secured Party relating to this Agreement, any other Loan Document, the Collateral or the consummation or administration of the transactions contemplated hereby or thereby shall be construed in accordance with and governed by the law of the State of New York.

(c)Each of the parties hereto hereby irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of any U.S. federal or New York state court sitting in New York, New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Documents, the transactions relating hereto or thereto, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may (and any such claims, cross-claims or third party claims brought against the Administrative Agent or any of its Related Parties may only) be heard and determined in such state court or, to the extent permitted by law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.

(d)Each Loan Party hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section.  Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(e)Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01.  Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.

SECTION 9.10.  WAIVER OF JURY TRIAL.   EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).  EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE OR OTHER AGENT (INCLUDING ANY

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ATTORNEY) OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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

SECTION 9.12.  Confidentiality.   Each of the Administrative Agent, the Issuing Bank and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any Governmental Authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by any Requirement of Law or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (x) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (y) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loan Parties and their obligations; (g) with the consent of the Borrower, (h) on a confidential basis to (1) any rating agency in connection with rating the Borrower or its Subsidiaries or the credit facilities provided for herein or (2)  the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of identification numbers with respect to the credit facilities provided for herein or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis from a source other than a Loan Party or a Subsidiary. For the purposes of this Section, “Information” means all information received from a Loan Party or a Subsidiary relating to the Loan Parties or their business, other than any such information that is available to the Administrative Agent, the Issuing Bank or any Lender on a non-confidential basis prior to disclosure by the Loan Parties and other than information pertaining to this Agreement provided by arrangers to data service providers, including league table providers, that serve the lending industry; provided that in the case of information received from a Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. In addition, the Administrative Agent and the Lenders may disclose the existence of this Agreement and information about this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Administrative Agent or any Lender in connection with the administration of this Agreement, the other Loan Documents, and the Revolving Commitments.

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN SECTION 9.12 FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC INFORMATION CONCERNING THE BORROWER, THE OTHER LOAN PARTIES AND  THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT

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HAS DEVELOPED COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.  

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS AND AMENDMENTS, FURNISHED BY THE BORROWER OR THE ADMINISTRATIVE AGENT PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION ABOUT THE BORROWER, THE LOAN PARTIES AND THEIR RELATED PARTIES OR THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE BORROWER AND THE ADMINISTRATIVE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

SECTION 9.13. Several Obligations; Nonreliance; Violation of Law .  The respective obligations of the Lenders hereunder are several and not joint and the failure of any Lender to make any Loan or perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder.  Each Lender hereby represents that it is not relying on or looking to any margin stock (as defined in Regulation U of the Federal Reserve Board) for the repayment of the Borrowings provided for herein.  Anything contained in this Agreement to the contrary notwithstanding, neither the Issuing Bank nor any Lender shall be obligated to extend credit to the Borrower in violation of any Requirement of Law.

SECTION 9.14.  USA PATRIOT Act.   Each Lender that is subject to the requirements of the USA PATRIOT Act hereby notifies each Loan Party that pursuant to the requirements of the USA PATRIOT Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the USA PATRIOT Act.

SECTION 9.15.  Disclosure . Each Loan Party, each Lender and the Issuing Bank hereby acknowledges and agrees that the Administrative Agent and/or its Affiliates from time to time may hold investments in, make other loans to or have other relationships with, any of the Loan Parties and their respective Affiliates.

SECTION 9.16. Appointment for Perfection .  Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Administrative Agent and the Secured Parties, in assets which, in accordance with Article 9 of the UCC, Sections 24 or 24.1 of the PPSAand Sections 23, 24, 25 and 26 of the Securities Transfer Act (British Columbia) or any other applicable law can be perfected only by possession or control.  Should any Lender (other than the Administrative Agent) obtain possession or control of any such Collateral, such Lender shall notify the Administrative Agent thereof, and, promptly upon the Administrative Agent’s request therefor shall deliver such Collateral to the Administrative Agent or otherwise deal with such Collateral in accordance with the Administrative Agent’s instructions.

SECTION 9.17.  Interest Rate Limitation .  

(a)Notwithstanding anything herein to the contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges and other amounts which are treated as interest on

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such Loan under applicable law (collectively the “Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance with applicable law, the rate of interest payable in respect of such Loan hereunder, together with all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent lawful, the interest and Charges that would have been payable in respect of such Loan but were not payable as a result of the operation of this Section shall be cumulated and the interest and Charges payable to such Lender in respect of other Loans or periods shall be increased (but not above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the NYFRB Rateto the date of repayment, shall have been received by such Lender.

(b)If any provision of this Agreement would oblige the Borrower to make any payment of interest or other amount payable to any Lender in an amount or calculated at a rate which would be prohibited by applicable law or would result in a receipt by that Lender of “interest” at a “criminal rate” (as such terms are construed under the Criminal Code (Canada)), then, notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with retroactive effect to the maximum amount or rate of interest, as the case may be, as would not be so prohibited by law or so result in a receipt by that Lender of “interest” at a “criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent necessary), by reducing any fees, commissions, costs, expenses, premiums and other amounts required to be paid to the affected Lender which would constitute interest for purposes of section 347 of the Criminal Code (Canada).

SECTION 9.18.  No Fiduciary Duty, etc .  Each Loan Party acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that no Credit Party will have any obligations except those obligations expressly set forth herein and in the other Loan Documents and each Credit Party is acting solely in the capacity of an arm’s length contractual counterparty to each Loan Party with respect to the Loan Documents and the transaction contemplated therein and not as a financial advisor or a fiduciary to, or an agent of, any Loan Party or any other person.  Each Loan Party agrees that it will not assert any claim against any Credit Party based on an alleged breach of fiduciary duty by such Credit Party in connection with this Agreement and the transactions contemplated hereby. Additionally, each Loan Party acknowledges and agrees that no Credit Party is advising such Loan Party as to any legal, tax, investment, accounting, regulatory or any other matters in any jurisdiction.  Each Loan Party shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Credit Parties shall have no responsibility or liability to the Loan Parties with respect thereto.

Each Loan Party further acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party, together with its Affiliates, is a full service securities or banking firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services.  In the ordinary course of business, any Credit Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, each Loan Party and other companies with which the Loan Parties may have commercial or other relationships.  With respect to any securities and/or financial instruments so held by any Credit Party or any of its customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

In addition, each Loan Party acknowledges and agrees, and acknowledges its Subsidiaries’ understanding, that each Credit Party and its affiliates may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which the Loan Parties may have conflicting interests regarding the transactions described herein and otherwise.  No Credit Party will use confidential information obtained from any Loan Party or a Subsidiary by virtue of

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the transactions contemplated by the Loan Documents or its other relationships with the Loan Parties in connection with the performance by such Credit Party of services for other companies, and no Credit Party will furnish any such information to other companies.  Each Loan Party also acknowledges that no Credit Party has any obligation to use in connection with the transactions contemplated by the Loan Documents, or to furnish to the Borrower, confidential information obtained from other companies.

SECTION 9.19. Marketing Consent .  The Borrower hereby authorizes Chase and its affiliates (collectively, the “Chase Parties”), at their respective sole expense, but without any prior approval by the Borrower, to publish such tombstones and give such other publicity to this Agreement as each may from time to time determine in its sole discretion.  The foregoing authorization shall remain in effect unless the Borrower notifies Chase in writing that such authorization is revoked.

SECTION 9.20. Acknowledgement and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Loan Document may be subject to the Write-Down and Conversion Powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a)the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b)the effects of any Bail-In Action on any such liability, including, if applicable:

(i)a reduction in full or in part or cancellation of any such liability;

(ii)a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent entity, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii)the variation of the terms of such liability in connection with the exercise of the Write-Down and Conversion Powers of any EEA Resolution Authority.

SECTION 9.21.  Acknowledgement Regarding Any Supported QFCs .  To the extent that the Loan Documents provide support, through a guarantee or otherwise, for Swap Agreements or any other agreement or instrument that is a QFC (such support “QFC Credit Support” and each such QFC a “Supported QFC”), the parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the “U.S. Special Resolution Regimes”) in respect of such Supported QFC and QFC Credit Support (with the provisions below applicable notwithstanding that the Loan Documents and any Supported QFC may in fact be stated to be governed by the laws of the State of New York and/or of the United States or any other state of the United States):

In the event a Covered Entity that is party to a Supported QFC (each, a “Covered Party”) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit

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Support (and any such interest, obligation and rights in property) were governed by the laws of the United States or a state of the United States. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Loan Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Loan Documents were governed by the laws of the United States or a state of the United States. Without limitation of the foregoing, it is understood and agreed that rights and remedies of the parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.

As used in this Section 9.21, the following terms have the meanings set forth below:

“Covered Entity” means any of the following:

(i)a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);

(ii)a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R.§ 47.3(b); or

(iii)(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R.§ 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).

SECTION 9.22.  Judgment Currency . If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder in dollars into another currency (the “Other Currency”), to the fullest extent permitted by applicable law, the rate of exchange used shall be that at which the Administrative Agent could, in accordance with normal procedures, purchase dollars with the Other Currency on the Business Day preceding that on which final judgment is given. The obligation of each Loan Party in respect of any such sum due from it to the Secured Parties hereunder shall, notwithstanding any judgment in such Other Currency, be discharged only to the extent that, on the Business Day immediately following the date on which the Administrative Agent receives any sum adjudged to be so due in the Other Currency, the Administrative Agent may, in accordance with normal banking procedures, purchase dollars with the Other Currency. If the dollars so purchased are less than the sum originally due to the Secured Parties in dollars, each Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Secured Parties against such loss, and if the dollars so purchased exceed the sum originally due to the Secured Parties in dollars, the Secured Parties agrees to remit to the Loan Parties such excess.

118

51167637.4

ARTICLE X

Loan Guaranty

SECTION 10.01.  Guaranty.   Each Loan Guarantor (other than those that have delivered a separate Guaranty) hereby agrees that it is jointly and severally liable for, and, as a primary obligor and not merely as surety, absolutely, unconditionally and irrevocably guarantees to the Secured Parties, the prompt payment when due, whether at stated maturity, upon acceleration or otherwise, and at all times thereafter, of the Secured Obligations and all costs and expenses including, without limitation, all court costs and reasonable attorneys’ and paralegals’ fees (including allocated costs of in-house counsel and paralegals) and expenses paid or incurred by the Administrative Agent, the Issuing Bank and the Lenders in endeavoring to collect all or any part of the Secured Obligations from, or in prosecuting any action against, the Borrower, any Loan Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”); provided, however, that the definition of “Guaranteed Obligations” shall not create any guarantee by any Loan Guarantor of (or grant of security interest by any Loan Guarantor to support, as applicable) any Excluded Swap Obligations of such Loan Guarantor for purposes of determining any obligations of any Loan Guarantor). Each Loan Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal. All terms of this Loan Guaranty apply to and may be enforced by or on behalf of any domestic or foreign branch or Affiliate of any Lender that extended any portion of the Guaranteed Obligations.

SECTION 10.02.  Guaranty of Payment .  This Loan Guaranty is a guaranty of payment and not of collection. Each Loan Guarantor waives any right to require the Administrative Agent, the Issuing Bank or any Lender to sue the Borrower, any Loan Guarantor, any other guarantor of, or any other Person obligated for all or any part of the Guaranteed Obligations (each, an “Obligated Party”), or otherwise to enforce its payment against any collateral securing all or any part of the Guaranteed Obligations.

SECTION 10.03.  No Discharge or Diminishment of Loan Guaranty .  

(a)Except as otherwise provided for herein, the obligations of each Loan Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the Payment in Full of the Guaranteed Obligations), including:  (i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise; (ii) any change in the corporate existence, structure or ownership of the Borrower or any other Obligated Party liable for any of the Guaranteed Obligations; (iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Obligated Party, or their assets or any resulting release or discharge of any obligation of any Obligated Party; or (iv) the existence of any claim, setoff or other rights which any Loan Guarantor may have at any time against any Obligated Party, the Administrative Agent, the Issuing Bank, any Lender, or any other Person, whether in connection herewith or in any unrelated transactions.  

(b)The obligations of each Loan Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Obligated Party, of the Guaranteed Obligations or any part thereof.  

119

51167637.4

(c)Further, the obligations of any Loan Guarantor hereunder are not discharged or impaired or otherwise affected by: (i) the failure of the Administrative Agent, the Issuing Bank or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations; (ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations; (iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of the Borrower for all or any part of the Guaranteed Obligations or any obligations of any other Obligated Party liable for any of the Guaranteed Obligations; (iv) any action or failure to act by the Administrative Agent, the Issuing Bank or any Lender with respect to any collateral securing any part of the Guaranteed Obligations; or (v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Loan Guarantor or that would otherwise operate as a discharge of any Loan Guarantor as a matter of law or equity (other than the Payment in Full of the Guaranteed Obligations).

SECTION 10.04.  Defenses Waived.   To the fullest extent permitted by applicable law, each Loan Guarantor hereby waives any defense based on or arising out of any defense of the Borrower or any Loan Guarantor or the unenforceability of all or any part of the Guaranteed Obligations from any cause, or the cessation from any cause of the liability of the Borrower, any Loan Guarantor or any other Obligated Party, other than the Payment in Full of the Guaranteed Obligations. Without limiting the generality of the foregoing, each Loan Guarantor irrevocably waives acceptance hereof, presentment, demand, protest and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Obligated Party, or any other Person.  Each Loan Guarantor confirms that it is not a surety under any state law and shall not raise any such law as a defense to its obligations hereunder.  The Administrative Agent may, at its election, foreclose on any Collateral held by it by one or more judicial or nonjudicial sales, accept an assignment of any such Collateral in lieu of foreclosure or otherwise act or fail to act with respect to any collateral securing all or a part of the Guaranteed Obligations, compromise or adjust any part of the Guaranteed Obligations, make any other accommodation with any Obligated Party or exercise any other right or remedy available to it against any Obligated Party, without affecting or impairing in any way the liability of such Loan Guarantor under this Loan Guaranty, except to the extent the Guaranteed Obligations have been Paid in Full.  To the fullest extent permitted by applicable law, each Loan Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Loan Guarantor against any Obligated Party or any security.

SECTION 10.05.  Rights of Subrogation .  No Loan Guarantor will assert any right, claim or cause of action, including, without limitation, a claim of subrogation, contribution or indemnification that it has against any Obligated Party, or any collateral, until the Loan Parties and the Loan Guarantors have fully performed all their obligations to the Administrative Agent, the Issuing Bank and the Lenders.

SECTION 10.06.  Reinstatement; Stay of Acceleration.   If at any time any payment of any portion of the Guaranteed Obligations (including a payment effected through exercise of a right of setoff) is rescinded, or must otherwise be restored or returned upon the insolvency, bankruptcy or reorganization of the Borrower or otherwise (including pursuant to any settlement entered into by a Secured Party in its discretion), each Loan Guarantor’s obligations under this Loan Guaranty with respect to that payment shall be reinstated at such time as though the payment had not been made and whether or not the Administrative Agent, the Issuing Bank and the Lenders are in possession of this Loan Guaranty. If acceleration of the time for payment of any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or reorganization of the Borrower, all such amounts otherwise subject to acceleration under the terms of any agreement relating to the Guaranteed Obligations shall nonetheless be payable by the Loan Guarantors forthwith on demand by the Administrative Agent.

120

51167637.4

SECTION 10.07.  Information .  Each Loan Guarantor assumes all responsibility for being and keeping itself informed of the Borrower’s financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks that each Loan Guarantor assumes and incurs under this Loan Guaranty, and agrees that none of the Administrative Agent, the Issuing Bank or any Lender shall have any duty to advise any Loan Guarantor of information known to it regarding those circumstances or risks.

SECTION 10.08.  Termination .  Each of the Lenders and the Issuing Bank may continue to make loans or extend credit to the Borrower based on this Loan Guaranty until five (5) days after it receives written notice of termination from any Loan Guarantor.  Notwithstanding receipt of any such notice, each Loan Guarantor will continue to be liable to the Lenders for any Guaranteed Obligations created, assumed or committed to prior to the fifth day after receipt of the notice, and all subsequent renewals, extensions, modifications and amendments with respect to, or substitutions for, all or any part of such Guaranteed Obligations.  Nothing in this Section 10.08 shall be deemed to constitute a waiver of, or eliminate, limit, reduce or otherwise impair any rights or remedies the Administrative Agent or any Lender may have in respect of, any Default or Event of Default that shall exist under clause (o) of Article VII hereof as a result of any such notice of termination.

SECTION 10.09.  Taxes.   Each payment of the Guaranteed Obligations will be made by each Loan Guarantor without withholding for any Taxes, unless such withholding is required by law.  If any Loan Guarantor determines, in its sole discretion exercised in good faith, that it is so required to withhold Taxes, then such Loan Guarantor may so withhold and shall timely pay the full amount of withheld Taxes to the relevant Governmental Authority in accordance with applicable law.  If such Taxes are Indemnified Taxes, then the amount payable by such Loan Guarantor shall be increased as necessary so that, net of such withholding (including such withholding applicable to additional amounts payable under this Section), the Administrative Agent, Lender or Issuing Bank (as the case may be) receives the amount it would have received had no such withholding been made.

SECTION 10.10.  Maximum Liability .  Notwithstanding any other provision of this Loan Guaranty, the amount guaranteed by each Loan Guarantor hereunder shall be limited to the extent, if any, required so that its obligations hereunder shall not be subject to avoidance under Section 548 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act, Uniform Voidable Transactions Act  or similar statute or common law.  In determining the limitations, if any, on the amount of any Loan Guarantor’s obligations hereunder pursuant to the preceding sentence, it is the intention of the parties hereto that any rights of subrogation, indemnification or contribution which such Loan Guarantor may have under this Loan Guaranty, any other agreement or applicable law shall be taken into account.

SECTION 10.11.  Contribution .  

(a)To the extent that any Loan Guarantor shall make a payment under this Loan Guaranty (a “Guarantor Payment”) which, taking into account all other Guarantor Payments then previously or concurrently made by any other Loan Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Loan Guarantor if each Loan Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Loan Guarantor’s “Allocable Amount” (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Loan Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guarantor Payment, the Payment in Full of the Guaranteed Obligations and the termination of this Agreement, such Loan Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Loan Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.

121

51167637.4

(b)As of any date of determination, the “Allocable Amount” of any Loan Guarantor shall be equal to the excess of the fair saleable value of the property of such Loan Guarantor over the total liabilities of such Loan Guarantor (including the maximum amount reasonably expected to become due in respect of contingent liabilities, calculated, without duplication, assuming each other Loan Guarantor that is also liable for such contingent liability pays its ratable share thereof), giving effect to all payments made by other Loan Guarantors as of such date in a manner to maximize the amount of such contributions.

(c)This Section 10.11 is intended only to define the relative rights of the Loan Guarantors, and nothing set forth in this Section 10.11 is intended to or shall impair the obligations of the Loan Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Loan Guaranty.

(d)The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Loan Guarantor or Loan Guarantors to which such contribution and indemnification is owing.

(e)The rights of the indemnifying Loan Guarantors against other Loan Guarantors under this Section 10.11 shall be exercisable upon the Payment in Full of the Guaranteed Obligations and the termination of this Agreement.

SECTION 10.12.  Liability Cumulative .  The liability of each Loan Party as a Loan Guarantor under this Article X is in addition to and shall be cumulative with all liabilities of each Loan Party to the Administrative Agent, the Issuing Bank and the Lenders under this Agreement and the other Loan Documents to which such Loan Party is a party or in respect of any obligations or liabilities of the other Loan Parties, without any limitation as to amount, unless the instrument or agreement evidencing or creating such other liability specifically provides to the contrary.

SECTION 10.13.  Keepwell.   Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Guarantor to honor all of its obligations under this Guarantee in respect of a Swap Obligation (provided, however, that each Qualified ECP Guarantor shall only be liable under this Section 10.13 for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Section 10.13 or otherwise under this Loan Guaranty voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  Except as otherwise provided herein, the obligations of each Qualified ECP Guarantor under this Section 10.13 shall remain in full force and effect until the termination of all Swap Obligations.  Each Qualified ECP Guarantor intends that this Section 10.13 constitute, and this Section 10.13 shall be deemed to constitute, a “keepwell, support, or other agreement” for the benefit of each other Loan Party for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

[Signature Page Follows]

122

51167637.4

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

BORROWER:

CRH Medical Corporation

By:	(signed)
Name:
Title:

GUARANTORS:

CRH Medical Corporation

By:	(signed)
Name:
Title:

CRH Anesthesia Management, LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Gainesville, LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Florida, LLC

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

CRH Anesthesia of Cape Coral, LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Knoxville, LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Georgia, LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Colorado, LLC

By:	(signed)
Name:
Title:

Shreveport Sedation Associates LLC

By:	(signed)
Name:
Title:

CRH Anesthesia of Ohio, LLC

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

Lake Erie Sedation Associates, LLC

By:	(signed)
Name:
Title:

CRH GAA, PLLC

By:	(signed)
Name:
Title:

NC GAA, P.C.

By:	(signed)
Name:
Title:

[REDACTED].

By:	(signed)
Name:
Title:

Gastroenterology Anesthesia Associates LLC

By:	(signed)
Name:
Title:

Anesthesia care Associates, LLC

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

Alamo Sedation Associates, PLLC

By:	(signed)
Name:
Title:

CRH GAA of Washington, PLLC

By:	(signed)
Name:
Title:

Arapahoe Gastroenterology Anesthesia Associates, LLC

By:	(signed)
Name:
Title:

Central Colorado Anesthesia Associates, LLC

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

JPMorgan Chase Bank, N.A.,Toronto Branch, individually, and as Administrative Agent, Swingline Lender and Issuing Bank

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

The Bank of Nova Scotia, as a Lender

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

U.S. Bank National Association, as a Lender

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

Wells Fargo BankNational Association, as a Lender

By:	(signed)
Name:
Title:

[Signature Page to Credit Agreement]

COMMITMENT SCHEDULE

[REDACTED]

SCHEDULE 1.01(A)

JV Entities

[REDACTED]

SCHEDULE 1.01(B)

Product

[REDACTED]

SCHEDULE 2.12

Letter of Credit Fees

[REDACTED]

•

SCHEDULE 3.05

Properties, etc.

Real Property:

• [REDACTED]

Trademarks

• Canadian Application Number 1445550; Application Date July 21, 2009; Registration Number TMA790668; Registration Date February 14, 2014; Trademark CRH O'REGAN SYSTEM; Wares/Goods - disposable, single-use devise for hemorrhoid removal.

• US Serial Number 77795421; Application Date August 3, 2009; Registration Number 4096542; Registration Date February 7, 2012; Trademark CRH O'REGAN SYSTEM; Wares/Goods - medical device, namely, disposable, single-use ligator for hemorrhoid removal.

• Chinese Application Number 17473734; Application Date July 21, 2015; Trademark CRH O'REGAN SYSTEM.

Patents

• US Patent or Application Number 7029438; Application Date November 20, 2002; Expiration Date July 30, 2023; Title ANOSCOPE.

• Canada Application or Patent Number 2363473; Application Date November 20, 2001; Expiration Date November 20, 2021; Title ANOSCOPE.

• US Patent or Application Number 5741273; Application Date March 8, 1996; Expiration Date March 8, 2016; Title ELASTIC BAND LIGATION DEVICE FOR THE TREATMENT OF HEMORRHOIDS.

• Canada Application or Patent Number 2240850; Application Date March 5, 1997; Expiration Date March 5, 2017; Title ELASTIC BAND LIGATION DEVICE FOR THE TREATMENT OF HEMORRHOIDS.

• Japan Application or Patent Number 4465179; Application Date November 20, 2003; Expiration Date November 20, 2023; Title ELASTIC BAND LIGATION DEVICE FOR THE TREATMENT OF HEMORRHOIDS.

• US Application or Patent Number US 9,101,360 Date August 11, 2015; Title ELASTIC BAND LIGATION DEVICE WITH INTEGRATED OBTURATOR AND METHOD FOR THE TREATMENT OF HEMORRHOIDS.

• US Application or Patent Number US 9,622,750; Date April 18, 2017; Title ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM FOR THE TREATMENT OF HEMORRHOIDS.

• US Application or Patent Number 13/972,202-pending; Application Date August 21, 2013; Title ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE FOR THE TREATMENT OF HEMORRHOIDS.

• China Application or Patent Number ZL201380079005.1;  Date September 21, 2018; Title ELASTIC BAND LIGATION DEVICE WITH INEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS

• India Application or Patent Number 201617005517-pending;  Application Date October 23, 2013; Title ELASTIC BAND LIGATION DEVICE WITH INEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS

• Japan Application or Patent Number 6255101;  Date December 8, 2017; Title ELASTIC BAND LIGATION DEVICE WITH INEGRATED OBTURATOR AND METHOD FOR TREATMENT OF HEMORRHOIDS

• India Application or Patent Number 201617005518-pending;  Application Date October 23, 2013; Title ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS

• Japan Application or Patent Number 6255102;  Date December 8, 2017; Title ELASTIC BAND LIGATION DEVICE WITH LOCKING MECHANISM AND METHOD FOR TREATMENT OF HEMORRHOIDS

• India Application or Patent Number 201617006045-pending; Application Date October 23, 2013; Title ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE FOR THE TREATMENT OF HEMORRHOIDS.

• Japan Application or Patent Number 6255103; Date December 8, 2017; Title ELASTIC BAND LIGATION DEVICE WITH ANTI-PINCH FEATURE FOR THE TREATMENT OF HEMORRHOIDS

Domain Names

• [REDACTED]

SCHEDULE 3.06

Disclosed Matters

None.

SCHEDULE 3.12

Material Agreements

[REDACTED]

SCHEDULE 3.14

Insurance

[REDACTED]

SCHEDULE 3.15(a)

Capitalization and Subsidiaries

[REDACTED]

SCHEDULE 3.15(b)

Organization Chart

[REDACTED]

SCHEDULE 3.24

Affiliate Transactions

None.

SCHEDULE 3.25

Health Care Matters

None.

3.25(l) - Managed Entities

None.

SCHEDULE 6.01

Existing Indebtedness

None.

SCHEDULE 6.02

Existing Liens

None.

SCHEDULE 6.04

Existing Investments

None.

SCHEDULE 6.10

Existing Restrictions

None.

EXHIBIT A

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the “Assignee”).  Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee.  The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s rights and obligations in its capacity as a Lender under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of the Assignor under the respective facilities identified below (including any letters of credit and guarantees and swingline loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and other rights of the Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii) above being referred to herein collectively as the “Assigned Interest”).  Such sale and assignment is without recourse to the Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by the Assignor.

1.	Assignor:
2.	Assignee:
		[and is an Affiliate/Approved Fund of [identify Lender]1]
3.	Borrower:
4.	Administrative Agent:	JPMorgan Chase Bank, N.A., Toronto Branch, as the administrative agent under the Credit Agreement
5.	Credit Agreement:	The Credit Agreement dated as of October 22, 2019 among CRH Medical Corporation, the other Loan Parties party thereto, the Lenders party thereto, JPMorgan Chase Bank, N.A., Toronto Branch, as Administrative Agent, and the other parties thereto.

¹  Select as applicable.

6. Assigned Interest:

Facility Assigned2	Aggregate Amount of Revolving Commitment/Loans for all Lenders	Amount of Revolving Commitment/Loans Assigned	Percentage Assigned of Revolving Commitment/Loans3
	$	$	%
	$	$	%
	$	$	%

Effective Date:   _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The Assignee agrees to deliver to the Administrative Agent a completed Administrative Questionnaire in which the Assignee designates one or more credit contacts to whom all syndicate-level information (which may contain material non-public information about the Borrower, the Loan Parties and their Related Parties or their respective securities) will be made available and who may receive such information in accordance with the Assignee’s compliance procedures and applicable laws, including federal and state securities laws.

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

ASSIGNOR

[NAME OF ASSIGNOR]

By:

Name:

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By:

Name:

Title:

²  Fill in the appropriate terminology for the types of facilities under the Credit Agreement that are being assigned under this Assignment (e.g. “Revolving Commitment,” etc.)

³  Set forth, to at least 9 decimals, as a percentage of the Revolving Commitment/Loans of all Lenders thereunder.

[Consented to and]⁴ Accepted:

JPMorgan Chase Bank, N.A., Toronto Branch, as

  Administrative Agent, Issuing Bank and Swingline Lender

By:

Name:

Title:

[Consented to:]⁵

[NAME OF RELEVANT PARTY]

By:

Name:

Title:

⁴  To be added only if the consent of the Administrative Agent, Issuing Bank and/or Swingline Lender, as applicable, is required by the terms of the Credit Agreement.

⁵  To be added only if the consent of the Borrower and/or other parties (e.g. Swingline Lender, Issuing Bank) is required by the terms of the Credit Agreement.

ANNEX 1 to

ASSIGNMENT AND ASSUMPTION

[__________________]⁶

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.  Representations and Warranties.  

1.1   Assignor.  The Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Borrower, any Subsidiary or Affiliate or any other Person obligated in respect of any Loan Document, (iv) any requirements under applicable law for the Assignee to become a lender under the Credit Agreement or any other Loan Document or to charge interest at the rate set forth therein from time to time or (v) the performance or observance by the Borrower, any Subsidiary or Affiliate, or any other Person of any of their respective obligations under any Loan Document.

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement and under applicable law that are required to be satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together with copies of the most recent financial statements delivered pursuant to Section ___ thereof, as applicable, and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase the Assigned Interest on the basis of which it has made such analysis and decision independently and without reliance on the Administrative Agent, any arranger or any other Lender or their respective Related Parties, and (v) attached to the Assignment and Assumption is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and (b) agrees that (i) it will, independently and without reliance on the Administrative Agent, any arranger, the Assignor or any other Lender or their respective Related Parties, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.   Payments.    From and after the Effective Date, the Administrative Agent shall make all payments in respect of the Assigned Interest (including payments of principal, interest, fees and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective Date and to the Assignee for amounts which have accrued from and after the Effective Date.

⁶  Describe Credit Agreement at option of Administrative Agent.

3.  General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns.  This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument.  

Acceptance and adoption of the terms of this Assignment and Assumption by the Assignee and the Assignor by Electronic Signature (as defined in the Credit Agreement) or delivery of an executed counterpart of a signature page of this Assignment and Assumption by any Approved Electronic Platform (as defined in the Credit Agreement) shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of New York.

EXHIBIT B-1

[FORM OF] BORROWING REQUEST

[COMPANY NAME/HEADER]

JPMorgan Chase Bank, N.A., Toronto Branch

[REDACTED]

Date:

Ladies and Gentlemen:

This Borrowing Request is furnished pursuant to Section 2.03 of that certain Credit Agreement dated as of October 22, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) among CRH Medical Corporation (the “Borrower”), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A., Toronto Branch (“Chase”), as Agent for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement.  The Borrower represents that, as of this date, the conditions precedent set forth in Section 4.02 are satisfied.

The Borrower hereby notifies Chase of its request for the following Borrowing:

1. Revolving Borrowing

2. Aggregate Amount of the Revolving Borrowing⁷:                $_________________

3. Borrowing Date of the Borrowing (must be a Business Day): ____________________

4. The Borrowing shall be a ___ CBFR  Borrowing or ___ Eurodollar Borrowing⁸

5. If a Eurodollar Borrowing, the duration of Interest Period ⁹:

One Month __________

Three Months_________

Six Months__________

CRH Medical Corporation

By:

Name:

Title:

⁷  Must comply with Section 2.02(c) of the Agreement

⁸  If no election is made, then the requested Borrowing shall be a CBFR Borrowing

⁹  Shall be subject to the definition of “Interest Period.”  Cannot extend beyond the Revolving CreditMaturity Date.  If an Interest Period is not specified, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

EXHIBIT B-2

[FORM OF] INTEREST ELECTION REQUEST

[COMPANY NAME/HEADER]

JPMorgan Chase Bank, N.A., Toronto Branch

[REDACTED]

Date:

Ladies and Gentlemen:

This Interest Election Request is furnished pursuant to Section 2.08(c) of that certain Credit Agreement dated as of October 22, 2019 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”) among CRH Medical Corporation (the “Borrower”), the other Loan Parties, the lenders party thereto and JPMorgan Chase Bank, N.A., Toronto Branch (“Chase”), as Agent for the Lenders.  Unless otherwise defined herein, capitalized terms used in this Borrowing Request have the meanings ascribed thereto in the Agreement.  

The Borrower is hereby requesting to convert or continue certain Borrowings as follows:

1. Borrowing to which this Interest Election Request applies:

________________________________

2. Date of conversion/continuation(must be a Business Day): __________________, 20____

2. Amount of Borrowings being converted/continued:$ _______________

3. Nature of conversion/continuation:

* a. Conversion of CBFR Borrowings to Eurodollar Borrowings

* b. Conversion of Eurodollar Borrowings to CBFR Borrowings

* c. Continuation of Eurodollar Borrowings as such

4. If Borrowings are being continued as or converted to Eurodollar Borrowings, the duration of the new Interest Period that commences on the conversion/continuation date¹⁰:  

One Month __________Three Months__________Six Months__________

5. The undersigned officer of Borrower certifies that, both before and after giving effect to the request above, no Default or Event of Default has occurred and is continuing under the Agreement.

CRH Medical Corporation

By:

Name:

Title:

¹⁰  Shall be subject to the definition of “Interest Period.” Cannot extend beyond the Revolving Credit Maturity Date.  If an Interest Period is not specified, then the Borrower shall be deemed to have selected an Interest Period of one month’s duration.

EXHIBIT C

COMPLIANCE CERTIFICATE

To: The Lenders party to the

Credit Agreement described below

This Compliance Certificate (“Certificate”), for the period ended _______ __, 201_,  is furnished pursuant to that certain Credit Agreement dated as of October 22, 2019 (as amended, modified, renewed or extended from time to time, the “Agreement”) among CRH Medical Corporation (the “Borrower”), the other Loan Parties, the Lenders party thereto and JPMorgan Chase Bank, N.A., Toronto Branch, as Administrative Agent for the Lenders and as the Issuing Bank and Swingline Lender.  Unless otherwise defined herein, capitalized terms used in this Certificate have the meanings ascribed thereto in the Agreement.

THE UNDERSIGNED HEREBY CERTIFIES THAT:

2. I am the                        of the Borrower and I am authorized to deliver this Certificate on behalf of the Loan Parties and their Subsidiaries;

3. I have reviewed the terms of the Agreement and I have made, or have caused to be made under my supervision, a detailed review of the compliance of the Loan Parties and their Subsidiaries with the Agreement during the accounting period covered by the attached financial statements (the “Relevant Period”);

4. The attached financial statements of the Loan Parties and their Subsidiaries for the Relevant Period: (a) have been prepared on an accounting basis (the “Accounting Method”) consistent with the requirements of the Agreement and, except as may have been otherwise expressly agreed to in the Agreement, in accordance with GAAP consistently applied, and (b) to the extent that the attached are not the Loan Parties and their Subsidiaries’ annual fiscal year end statements, are subject to normal year-end audit adjustments and the absence of footnotes;

5. The examinations described in paragraph 2 did not disclose and I have no knowledge of, except as set forth below, (a) the existence of any condition or event which constitutes a Default or an Event of Default under the Agreement or any other Loan Document during or at the end of the Relevant Period or as of the date of this Certificate or (b) any change in the Accounting Method or in the application thereof that has occurred since the date of the annual financial statements delivered to the Administrative Agent in connection with the closing of the Agreement or subsequently delivered as required in the Agreement;

6. I hereby certify that, except as set forth below, no Loan Party has changed (i) its name, (ii) its chief executive office, (iii) its principal place of business, (iv) the type of entity it is or (v) its state of incorporation or organization without having given the Administrative Agent the notice required under the Loan Documents;

7. The representations and warranties of the Loan Parties set forth in the Loan Documents are true and correct in all material respects as of the date hereof, except (i) to the extent that any such representation or warranty specifically refers to an earlier date, in which case it is true and correct in all material respects only as of such earlier date, and (ii) that any representation or warranty which is subject to any materiality qualifier is true and correct in all respects;

8. Schedule I attached hereto sets forth financial data and computations¹¹ evidencing the Loan Parties’ compliance with certain covenants of the Agreement, all of which data and computations are true, complete and correct; and

9. Schedule II hereto sets forth the computations necessary to determine the Applicable Rate commencing on the Business Day this Certificate is delivered.

Described below are the exceptions, if any, referred to in paragraph 4 hereof by listing, in detail, the (i) nature of the condition or event, the period during which it has existed and the action which the Borrower has taken, is taking, or proposes to take with respect to each such condition or event or (ii) change in the Accounting Method or the application thereof and the effect of such change on the attached financial statements:

The foregoing certifications, together with the computations set forth in Schedule I and Schedule II hereto and the financial statements delivered with this Certificate in support hereof, are made and delivered this day of , .

By:

Name:

Title:

¹¹  Schedule I mustinclude detailed calculation tables for all components of the financial covenant calculations.

Schedule I to Compliance Certificate

Compliance as of _________, ____ with

Provisions of and of the Agreement

[Schedule I must include detailed calculation tables for all components of the financial covenant calculations.  Sample calculation tables are set forth below.]

6.12 Financial Covenants.

Schedule II to Compliance Certificate

Borrower’s Applicable Rate Calculation

EXHIBIT D

JOINDER AGREEMENT

THIS JOINDER AGREEMENT (this “Agreement”), dated as of [    ], is entered into between ________________________________, a _________________ (the “New Subsidiary”) and JPMORGAN CHASE BANK, N.A., Toronto Branch in its capacity as administrative agent (the “Administrative Agent”) under that certain Credit Agreement dated as of October 22, 2019 (as the same may be amended, modified, extended or restated from time to time, the “Credit Agreement”) among CRH Medical Corporation (the “Borrower”), the other Loan Parties party thereto, the Lenders party thereto and the Administrative Agent for the Lenders. All capitalized terms used herein and not otherwise defined herein shall have the meanings set forth in the Credit Agreement.

The New Subsidiary and the Administrative Agent, for the benefit of the Secured Parties, hereby agree as follows:

1.The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a “Loan Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a Loan Party and a Loan Guarantor thereunder as if it had executed the Credit Agreement.  The New Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms, provisions and conditions contained in the Credit Agreement, including without limitation (a) all of the representations and warranties of the Loan Parties set forth in Article III of the Credit Agreement, *[and]* (b) all of the covenants set forth in Articles V and VI of the Credit Agreement *[and (c) all of the guaranty obligations set forth in Article X of the Credit Agreement.  Without limiting the generality of the foregoing terms of this paragraph 1, the New Subsidiary, subject to the limitations set forth in Section 10.10 and 10.13 of the Credit Agreement, hereby guarantees, jointly and severally with the other Loan Guarantors, to the Administrative Agent and the Lenders, as provided in Article X of the Credit Agreement, the prompt payment and performance of the Guaranteed Obligations in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise) strictly in accordance with the terms thereof and agrees that if any of the Guaranteed Obligations are not paid or performed in full when due (whether at stated maturity, as a mandatory prepayment, by acceleration or otherwise), the New Subsidiary will, jointly and severally together with the other Loan Guarantors, promptly pay and perform the same, without any demand or notice whatsoever, and that in the case of any extension of time of payment or renewal of any of the Guaranteed Obligations, the same will be promptly paid in full when due (whether at extended maturity, as a mandatory prepayment, by acceleration or otherwise) in accordance with the terms of such extension or renewal.]*  *[The New Subsidiary has delivered to the Administrative Agent an executed Obligation Guaranty.]*

2.If required, the New Subsidiary is, simultaneously with the execution of this Agreement, executing and delivering such Collateral Documents (and such other documents and instruments) as requested by the Administrative Agent in accordance with the Credit Agreement.

3.The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is as follows:

1

4.The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.

5.This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which together shall constitute one and the same instrument.

6.THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its authorized officer, and the Administrative Agent, for the benefit of the Secured Parties, has caused the same to be accepted by its authorized officer, as of the day and year first above written.

[NEW SUBSIDIARY]

By:

Name:

Title:

Acknowledged and accepted:

JPMORGAN CHASE BANK, N.A., Toronto Branch, as Administrative Agent

By:

Name:

Title:

2

EX-31.1

Exhibit 31.1

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Tushar Ramani, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CRH Medical Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ Tushar Ramani, MD

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Richard Bear, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CRH Medical Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2019

/s/ Richard Bear

Chief Financial Officer

EX-32.1

Exhibit 32.1

SECTION 906 CERTIFICATION

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) in connection with the Quarterly Report on Form 10-Q of CRH Medical Corporation for the quarterly period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer hereby certifies, to such officer’s knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CRH Medical Corporation  

/s/ Tushar Ramani, MD
Name:	Tushar Ramani, MD
Title:	Chief Executive Officer
Date:	November 7, 2019

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed “filed” by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.  

EX-32.2

Exhibit 32.2

SECTION 906 CERTIFICATION

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002 (subsections (a) and (b) of section 1350, chapter 63 of title 18, United States Code) in connection with the Quarterly Report on Form 10-Q of CRH Medical Corporation for the quarterly period ended September 30, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned officer hereby certifies, to such officer’s knowledge, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of CRH Medical Corporation

/s/ Richard Bear
Name:	Richard Bear
Title:	Chief Financial Officer
Date:	November 7, 2019

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed “filed” by the Company for purposes of §18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section.

XML

Condensed Consolidated Statements of Changes in Equity - USD ($)	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Retained Earnings [Member]	Non-Controlling Interest [Member]
Beginning Balance at Dec. 31, 2017	$ 131,298,045	$ 54,614,601	$ 8,219,760	$ (66,772)	$ 11,078,608	$ 57,451,848
Beginning Balance , shares at Dec. 31, 2017		73,018,588
Total net and comprehensive income (loss) for the period	3,157,431				1,410,998	1,746,433
Stock-based compensation	737,621		737,621
Common shares issued on vesting of share units		$ 176,317	(176,317)
Common shares issued on vesting of share units, shares		60,000
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(252,565)	$ (72,458)			(180,107)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(98,900)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares	(275,548)	$ (79,052)			(196,496)
Cancellation of treasury shares, shares		(72,400)
Distributions to members	(6,774,450)					(6,774,450)
Ending Balance at Mar. 31, 2018	127,890,534	$ 54,639,408	8,781,064	(66,772)	12,113,003	52,423,831
Ending Balance , shares at Mar. 31, 2018		72,907,288
Total net and comprehensive income (loss) for the period	3,225,818				1,290,949	1,934,869
Stock-based compensation	718,812		718,812
Common shares issued on vesting of share units		$ 368,112	(368,112)
Common shares issued on vesting of share units, shares		64,000
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(511,205)	$ (139,009)			(372,196)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(189,800)
Cancellation of treasury shares, shares		(107,900)
Distributions to members	(3,694,810)					(3,694,810)
Acquisition of non-controlling interest	6,229,435					6,229,435
Ending Balance at Jun. 30, 2018	133,858,584	$ 54,868,511	9,131,764	(66,772)	13,031,756	56,893,325
Ending Balance , shares at Jun. 30, 2018		72,673,588
Total net and comprehensive income (loss) for the period	2,484,416				266,831	2,217,585
Stock-based compensation	744,531		744,531
Common shares issued on vesting of share units		$ 275,160	(275,160)
Common shares issued on vesting of share units, shares		73,750
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(564,340)	$ (134,159)			(430,181)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(183,300)
Distributions to members	(4,149,200)					(4,149,200)
Acquisition of non-controlling interest	4,844,216					4,844,216
Ending Balance at Sep. 30, 2018	137,218,207	$ 55,009,512	9,601,135	(66,772)	12,868,406	59,805,926
Ending Balance , shares at Sep. 30, 2018		72,564,038
Beginning Balance at Dec. 31, 2018	137,291,177	$ 55,372,884	9,329,335	(66,772)	12,916,565	59,739,165
Beginning Balance , shares at Dec. 31, 2018		72,055,688
Total net and comprehensive income (loss) for the period	1,390,790				(76,968)	1,467,758
Stock-based compensation	564,251		564,251
Common shares issued on vesting of share units		$ 8,235	(8,235)
Common shares issued on vesting of share units, shares		2,500
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(1,410,823)	$ (347,300)			(1,063,523)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(461,600)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares	(82,496)	$ (20,291)			(62,205)
Cancellation of treasury shares, shares		(10,400)
Distributions to members	(4,034,800)					(4,034,800)
Ending Balance at Mar. 31, 2019	133,718,099	$ 55,013,528	9,885,351	(66,772)	11,713,869	57,172,123
Ending Balance , shares at Mar. 31, 2019		71,586,188
Beginning Balance at Dec. 31, 2018	$ 137,291,177	$ 55,372,884	9,329,335	(66,772)	12,916,565	59,739,165
Beginning Balance , shares at Dec. 31, 2018		72,055,688
Common shares issued on exercise of stock options, shares	840,000
Ending Balance at Sep. 30, 2019	$ 118,277,128	$ 55,598,273	7,064,783	(66,772)	12,506,661	43,174,183
Ending Balance , shares at Sep. 30, 2019		71,696,559
Beginning Balance at Mar. 31, 2019	133,718,099	$ 55,013,528	9,885,351	(66,772)	11,713,869	57,172,123
Beginning Balance , shares at Mar. 31, 2019		71,586,188
Total net and comprehensive income (loss) for the period	2,618,675				1,646,683	971,992
Stock-based compensation	(990,382)		(990,382)
Common shares issued on exercise of stock options	419,612	$ 721,415	(301,803)
Common shares issued on exercise of stock options, shares		825,000
Common shares issued on vesting of share units		$ 371,870	(371,870)
Common shares issued on vesting of share units, shares		111,500
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(1,314,933)	$ (347,065)			(967,868)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(461,830)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares	(65,492)	$ (17,284)			(48,208)
Cancellation of treasury shares, shares		(27,000)
Distributions to members	(4,153,860)					(4,153,860)
Purchase of equity interest from non-controlling interest	(2,415,349)		(728,279)			(1,687,070)
Acquisition of non-controlling interest	1,465,715					1,465,715
Ending Balance at Jun. 30, 2019	129,282,085	$ 55,742,464	7,493,017	(66,772)	12,344,476	53,768,900
Ending Balance , shares at Jun. 30, 2019		72,033,858
Total net and comprehensive income (loss) for the period	2,099,329				982,368	1,116,961
Stock-based compensation	706,479		706,479
Common shares issued on exercise of stock options	6,752	$ 11,749	(4,997)
Common shares issued on exercise of stock options, shares		15,000
Common shares issued on vesting of share units		$ 133,047	(133,047)
Common shares issued on vesting of share units, shares		36,250
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(e))	(1,054,368)	$ (274,708)			(779,660)
Common shares repurchased in connection with normal course issuer bid and cancelled (note 11(d)), shares		(365,549)
Common shares repurchased in connection with normal course issuer bid and held as treasury shares	(54,802)	$ (14,279)			(40,523)
Cancellation of treasury shares, shares		(23,000)
Distributions to members	(3,615,819)					(3,615,819)
Purchase of equity interest from non-controlling interest	(6,986,491)		(996,669)			(5,989,822)
Acquisition of non-controlling interest	(2,106,037)					(2,106,037)
Ending Balance at Sep. 30, 2019	$ 118,277,128	$ 55,598,273	$ 7,064,783	$ (66,772)	$ 12,506,661	$ 43,174,183
Ending Balance , shares at Sep. 30, 2019		71,696,559

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Nov. 06, 2019
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Registrant Name	CRH MEDICAL CORPORATION
Entity Central Index Key	0001461119
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Trading Symbol	CRHM
Entity Common Stock, Shares Outstanding		71,520,559
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Small Business	true
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-37542
Entity Address Address Line One	World Trade Center
Entity Address, Address Line Two	Suite 578 – 999 Canada Place
Entity Address, City or Town	Vancouver
Entity Address, State or Province	BC
Entity Address, Country	CA
Entity Address, Postal Zip Code	V6C 3E1
City Area Code	604
Local Phone Number	633-1440
Document Quarterly Report	true
Document Transition Report	false
Entity Incorporation, State or Country Code	A1
Entity Interactive Data Current	Yes
Title of each class	Common Shares, no par value
Name of each exchange on which registered	NYSEAMER

XML

Segmented Information - Summary of Property and Equipment, Intangibles and Other Assets Located in Geographic Regions (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	$ 266,740	$ 303,291
Intangible assets	157,806,356	179,384,263
Total assets	196,433,169	218,987,996
Canada [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	230,734	276,621
Intangible assets	31,226	32,735
Total assets	2,988,156	9,293,796
United States [Member]
Segment Reporting, Asset Reconciling Item [Line Items]
Property and equipment	36,006	26,670
Intangible assets	157,775,130	179,351,528
Total assets	$ 193,445,013	$ 209,694,200

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Summary of significant accounting policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of significant accounting policies

2. Summary of significant accounting policies:  

(a) Basis of presentation:

As a non-U.S. company listed on the NYSE, the United States Securities and Exchange Commission (“SEC”) requires us to perform a test on the last business day of the second quarter of each fiscal year to determine whether we continue to meet the definition of a foreign private issuer (“FPI”). Historically, we met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with IFRS, reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs.

On June 30, 2018, we performed the test and determined that we no longer met the definition of a FPI. As such, from January 1, 2019, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers.

These condensed consolidated interim financial statements have been prepared in accordance with US GAAP beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report.

These interim financial statements do not include all note disclosures required on an annual basis, and therefore, should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2018, filed with the appropriate securities regulatory authorities.

In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive income, condensed consolidated statements of changes in equity and condensed consolidated statements cash flows as at September 30, 2019 and for all periods presented, have been recorded. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the Company's full year results.

(b) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company through voting control and for the anesthesia business, control over the assets and business operations of the subsidiary through operating agreements.  Control exists when the Company has the continuing power to govern the financial and operating polices of the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. Minority interests, if any, are valued at fair value at inception. All significant intercompany transactions and balances have been eliminated on consolidation.

(c) Use ofestimates, assumptions and judgments:

ThepreparationoftheCompany’sconsolidatedfinancial statementsrequiresmanagementtomake judgments, estimatesandassumptionsthataffectthe application of accounting policies, the reportedamounts of assetsandliabilities, the disclosure of contingent assetsand liabilitiesat thedateof the financial statements and thereported amounts of revenues and expenses duringthe reporting period.

2. Summary of significant accounting policies (continued):  

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take.  Actual results could differ from those estimates.

(d) Equity method investment:

The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest.

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Net Finance Expense - Summary of Net Finance Expense (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finance expense:
Interest and accretion expense on borrowings	$ 848,369	$ 851,110	$ 2,556,527	$ 2,291,864
Accretion expense on earn-out obligation and deferred consideration	10,145	35,549	123,305	123,411
Amortization of deferred financing fees	65,091	65,091	195,273	195,272
Net change in fair value of financial liabilities at fair value through earnings (note 13)	181,805	673,125	2,771,238	236,275
Other	20,000		50,000
Total finance expense	1,125,410	1,624,875	5,696,343	2,846,822
Net finance expense	$ 1,125,410	$ 1,624,875	$ 5,696,343	$ 2,846,822

XML

Related Party Transactions - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Related Party Transaction [Abstract]
Product sales	$ 14,095	$ 7,285	$ 28,095	$ 22,685
Amounts owing by or to related party	$ 7,000	$ 0	$ 7,000	$ 0

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Intangible Assets - Summary of Intangible Assets (Detail) - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite-Lived Intangible Assets [Line Items]
Beginning balance	$ 257,023,858
Additions through asset acquisitions and adjustments (note 4)	4,314,142
Ending balance	261,338,000
Beginning balance	77,639,595
Amortization expense	25,892,049
Ending balance	103,531,644
Net balance	157,806,356	$ 179,384,263
Professional Services Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Beginning balance	256,491,260
Additions through asset acquisitions and adjustments (note 4)	4,314,142
Ending balance	260,805,402
Beginning balance	77,139,732
Amortization expense	25,890,540
Ending balance	103,030,272
Net balance	157,775,130	179,351,528
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Beginning balance	532,598
Ending balance	532,598
Beginning balance	499,863
Amortization expense	1,509
Ending balance	501,372
Net balance	$ 31,226	$ 32,735

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Right of use assets and related obligations - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Jan. 01, 2019
Right of use asset	$ 282,075		$ 282,075		$ 332,512
Operating Lease obligations	245,821		245,821		295,188
Lease cost	90,670	$ 73,651	278,339	$ 212,512
Fixed lease payments	69,572		216,261
Variable lease cost	$ 21,098		$ 62,078
Weighted average lease term	1 year 4 months 13 days		1 year 4 months 13 days
Accounting Standards Update 2016-02 [Member]
Right of use asset					332,512
Operating Lease obligations					$ 295,188

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Related party transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related party transactions

15. Related party transactions:

Balances and transactions between the Company and its wholly owned and controlled subsidiaries have been eliminated on consolidation and are not disclosed in this note.  Details of the transactions between the Company and other related parties are disclosed below:

(a) Related party transactions:

During the three and nine months ended September 30, 2019, the Company made product sales totaling $14,095 and $28,095, respectively (2018 - $7,285 and $22,685, respectively) to one company owned or controlled by one of the Company’s Directors.  The transaction terms with related parties may not be on the same price as those that would result from transactions among non-related parties.  The amount owed by this related party as of September 30, 2019 was $7,000 (2018 - $nil).

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Asset acquisitions (Tables)

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Summary of Asset Acquisitions

During the nine months ended September 30, 2019, the Company completed three asset acquisitions. The asset acquisitions have been included in the anesthesia segment of the Company and represent the following:

Acquired Operation	Date Acquired	Consideration
Anesthesia Care Associates LLC (“ACA”)	January 2019	$	5,355,028
South Metro Anesthesia Associates LLC ("SMAA")	May 2019	$	1,791,431
Crystal River Anesthesia Associates LLC ("CRAA")	July 2019	$	2,174,003

During the year ended December 31, 2018, the Company completed five asset acquisitions. These asset acquisitions have been included in the anesthesia segment of the Company and represents the following:

Acquired Operation	Date Acquired	Consideration
Shreveport Sedation Associates LLC (“SSA”)	March 2018	$	9,495,184
Western Ohio Sedation Associates LLC (“WOSA”)	May 2018	$	6,483,698
Lake Washington Anesthesia LLC (“LWA”)	July 2018	$	5,041,939
Lake Erie Sedation Associates LLC (“LESA”)	September 2018	$	4,233,115
Tennessee Valley Anesthesia Associates LLC (“TVAA”)	December 2018	$	2,255,875

Summary of Fair Value of Consideration Transferred and Allocated Costs of Assets and Liabilities Acquired at Acquisition Date

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition dates.

	ACA			SMAA			CRAA			Total
Cash	$	5,239,003		$	1,752,465		$	2,130,000		$	9,121,468
Acquisition costs		116,025			38,966			44,003			198,994
Purchase consideration	$	5,355,028		$	1,791,431		$	2,174,003		$	9,320,462
Non-controlling interest		—			1,465,716			2,088,748			3,554,464
	$	5,355,028		$	3,257,147		$	4,262,751			12,874,926
Assets and liabilities acquired:
Exclusive professional services agreements	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Pre-close accounts receivable		50,000			—			—			50,000
Pre-close accounts payable		(50,000	)		—			—			(50,000	)
Fair value of net identifiable assets and liabilities acquired	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Exclusive professional services agreements – amortization term	6 years			5 years			5 years
CRH ownership interest acquired		100	%		55	%		51	%

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition date.

	SSA			WOSA			LWA			LESA			TVAA			Total
Cash	$	9,404,148		$	6,409,000		$	5,000,000		$	4,180,000		$	2,200,000		$	27,193,148
Acquisition costs		91,036			74,698			41,939			53,115			55,875			316,663
Purchase consideration	$	9,495,184		$	6,483,698		$	5,041,939		$	4,233,115		$	2,255,875		$	27,509,811
Non-controlling interest	$	—		$	6,229,435		$	4,844,217		$	—		$	2,167,409		$	13,241,061
	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Assets and liabilities acquired:
Exclusive professional services agreements	$	9,391,036		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,646,723
Prepaid expenses and deposits		104,148			—			—			—						104,149
Pre-close accounts receivable		—			—			652,506			—						652,506
Pre-close accounts payable		—			—			(652,506	)		—						(652,506	)
Fair value of net identifiable assets and    liabilities acquired	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Exclusive professional services agreements    – amortization term	7 years			10 years			7 years			10 years			7 years
CRH ownership interest		100	%		51	%		51	%		100	%		51	%

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Recent accounting pronouncements - Additional Information (Detail) - USD ($)	Sep. 30, 2019	Jan. 01, 2019
Disclosure Of Recent Accounting Pronouncements [Abstract]
Right of use asset	$ 282,075	$ 332,512
Operating Lease, Liability	$ 245,821	$ 295,188

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Share capital (Tables)

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Summary of Status of Plan for Other Equity Instruments

A summary of the status of the plan as of September 30, 2019 is as follows:

	Time based share units			Performance based share units
Outstanding, December 31, 2018		1,045,250			1,500,000
Issued		1,137,500			—
Exercised		(150,250	)		—
Forfeited		(115,000	)		(550,000	)
Expired		—			—
Outstanding, September 30, 2019		1,917,500			950,000
Vested		—			—
Expected to vest		1,917,500			550,000

Summary of Calculation of Basic Earnings Per Share

The calculation of basic earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

	For the three months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	982,368		71,831,356	$	0.014	$	266,831		71,831,356	$	0.004
Share options				422,043						1,153,177
Share units				545,743						484,840
Diluted	$	982,368		72,799,142	$	0.013	$	266,831		73,469,373	$	0.004

	For the nine months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	2,552,084		71,845,812	$	0.036	$	2,968,777		71,831,356	$	0.041
Share options				742,909						1,119,336
Share units				434,423						354,708
Diluted	$	2,552,084		73,023,144	$	0.035	$	2,968,777		73,305,400	$	0.040

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Share capital

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Share capital

11. Share capital:

(a) Authorized:

100,000,000 common shares without par value.

(b) Issued and outstanding – common shares:

Other than in connection with shares issued in respect of the Company’s share unit and share option plans and in connection with the Company’s normal course issuer bid (note 11(e)), there were no share transactions in the three and nine months ended September 30, 2019 and 2018.

(c) Share unit plan:

In June 2017, the shareholders of the Company approved a Share Unit Plan.   Employees, directors and eligible consultants of the Company and its designated subsidiaries are eligible to participate in the Share Unit Plan. In accordance with the terms of the plan, the Company will approve those employees, directors and eligible consultants who are entitled to receive share units and the number of share units to be awarded to each participant. Each share unit awarded conditionally entitles the participant to receive one common share of the Company upon attainment of the share unit vesting criteria.  The vesting of share units is conditional upon the expiry of time-based vesting conditions or performance-based vesting conditions or a combination of the two.  Once the share units vest, the participant is entitled to receive the equivalent number of underlying common shares; the Company issues new shares in satisfying its obligations under the plan.  

A summary of the status of the plan as of September 30, 2019 is as follows:

	Time based share units			Performance based share units
Outstanding, December 31, 2018		1,045,250			1,500,000
Issued		1,137,500			—
Exercised		(150,250	)		—
Forfeited		(115,000	)		(550,000	)
Expired		—			—
Outstanding, September 30, 2019		1,917,500			950,000
Vested		—			—
Expected to vest		1,917,500			550,000

During the nine months ended September 30, 2019, 150,250 time-based share units vested.  Additionally, the Company granted 1,137,500 time-based share units.  The weighted average fair value per unit for the time-based units was $2.70 per unit.  The fair value per unit was based on the market value of the underlying shares at the date of issuance.

During the nine months ended September 30, 2018, 197,750 time-based share units vested. The Company also issued 171,500 time-based share units and 150,000 performance-based share units.  The weighted average fair value per unit for the time-based units was $3.10 per unit and the weighted average fair value for the performance-based share units granted in the period was $2.78 per unit.  The fair value per unit was based on the market value of the underlying shares at the date of issuance.

During the three and nine months ended September 30, 2019, the Company recognized $624,366 (2018 – $744,532) and $124,595 (2018 - $2,200,964), respectively, in compensation expense in relation to share units.

(d) Stock-option plan:

During the nine months ended September 30, 2019, 840,000 stock options were exercised.  Additionally, the Company granted 500,000 options in the nine months ended September 30, 2019.  The stock options vest evenly over 4 years.  At the time of grant, the fair value of the options was $1.43 per option.  The fair value per unit was derived using the Black-Scholes method of valuation with the key inputs in the model being a risk free rate of 1.61% and volatility of 63.05%.

During the three and nine months ended September 30, 2019, the Company recognized $82,113 (2018 - $nil) and $155,753 (2018 - $nil), respectively, in compensation expense in relation to options.

11. Share capital (continued):

(e) Normal Course Issuer Bid:

During the three months ended September 30, 2019, the Company repurchased 384,549 (2018 – 183,300) of its shares under its Normal Course Issuer Bid for a total cost, including transaction fees, of $1,112,097 (CAD$1,466,297) (2018 - $565,831 (CAD$743,965)).

In the nine months ended September 30, 2019, the Company repurchased 1,357,979 (2018 – 579,900) of its shares for a total cost, including transaction fees, of $3,992,728 (CAD$5,306,896) (2018 - $1,608,348 (CAD$2,070,503)).  As at September 30, 2019, 1,338,979 of these shares had been cancelled with the remaining 19,000 shares cancelled on October 4, 2019.

(f) Earnings (loss) pershare:

The calculation of basic earnings per share for the three and nine months ended September 30, 2019 and 2018 is as follows:

	For the three months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	982,368		71,831,356	$	0.014	$	266,831		71,831,356	$	0.004
Share options				422,043						1,153,177
Share units				545,743						484,840
Diluted	$	982,368		72,799,142	$	0.013	$	266,831		73,469,373	$	0.004

	For the nine months ended September 30,
	2019						2018
	Net earnings		Weighted average number of common shares outstanding		Per share amount		Net earnings		Weighted average number of common shares outstanding		Per share amount
Net earnings attributable to shareholders:
Earnings per common share:
Basic	$	2,552,084		71,845,812	$	0.036	$	2,968,777		71,831,356	$	0.041
Share options				742,909						1,119,336
Share units				434,423						354,708
Diluted	$	2,552,084		73,023,144	$	0.035	$	2,968,777		73,305,400	$	0.040

For the three months ended September 30, 2019, 590,144 options (2018– 191,510) and 1,935,399 share units (2018 – 2,045,074) were excluded from the diluted weighted average number of common shares calculation.

For the nine months ended September 30, 2019, 475,560 options (2018– 225,351) and 1,936,849 share units (2018 – 2,129,239) were excluded from the diluted weighted average number of common shares calculation.

The average market value of the Company’s shares for purposes of calculating the dilutive effect of share options was based on quoted market prices for the period during which the options were outstanding.  The treasury method is used to determine the calculation of dilutive shares.

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Recent accounting pronouncements

9 Months Ended

Sep. 30, 2019

New Accounting Pronouncements And Changes In Accounting Principles Abstract

Recent accounting pronouncements

3. Recent accounting pronouncements:

(a) Initial adoption of new accounting standards:

In February 2016, FASB issued ASU No. 2016-02 “Leases”, and subsequently ASU No. 2017-13, establishing principles for the recognition, measurement, presentation and disclosure of leases. The standard requires lessees to recognize most leases on the balance sheet and certain limited changes to lessor accounting. The standard is effective for annual periods beginning after December 15, 2018, with early adoption permitted. The Company adopted the standard using the modified retrospective method effective January 1, 2019 with nearly all operating classified leases classified as operating leases under this new standard with a right-of-use asset and a corresponding obligation recognized on the balance sheet at the adoption date. The lease obligation is measured at amortized cost using the effective interest method. The Company has applied the exemption to treat short-term leases as executory contracts and has applied the package of practical expedients which allowed the Company to carry forward historical lease classification. Upon adoption, the Company recognized $332,512 as a right of use asset with a $295,188 corresponding obligation on its balance sheet at January 1, 2019.   Refer to note 7.

(b) Recent accounting pronouncements not yet adopted:

In June 2016, FASB issued ASU No. 2016-13, “Financial Instruments- Credit Losses (Topic 326)”, which requires companies to measure credit losses on financial instruments measured at amortized cost applying an “expected credit loss” model based upon past events, current conditions and reasonable and supportable forecasts that affect collectability. Previously, companies applied an “incurred loss” methodology for recognizing credit losses. This standard is effective for fiscal years beginning after December 15, 2019. The Company is in the process of evaluating the impact of this standard on its balance sheet, results of operations and cash flows.

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Right of use assets and related obligations

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Right of use assets and related obligations

7. Right of use assets and related obligations:

On adoption of ASU No. 2016-02 “Leases”, and subsequently ASU No. 2017-13, the Company recognized $332,512 and $295,188 as right of use assets and obligations, respectively at January 1, 2019.  These amounts relate to two operating leases for premises existing as at January 1, 2019, with a further premises operating lease added in March 2019.  The Company has applied the exemption to treat short-term leases as executory contracts as well as applied the practical expedient to choose not to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components associated with that lease component as a single lease component.  During the three and nine months ended September 30, 2019, the Company incurred total operating lease expenses of $90,670 and $278,339, respectively, For the three months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $69,572 and variable lease payments of $21,098.  For the nine months ended September 30, 2019, this included lease expenses associated with fixed lease payments of $216,261 and variable lease payments of $62,078.

Lease expense is allocated to operating segments based on the location of the leases, as follows:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Anesthesia services expense	$	28,106	$	16,205	$	90,839	$	48,062
Product sales expense		31,282		28,723		93,750		82,225
Corporate expense		31,282		28,723		93,750		82,225
	$	90,670	$	73,651	$	278,339	$	212,512

The weighted average lease term of the Company’s three premises leases is 1.37 years.  The weighted average discount rate used by the Company in calculating the obligation relating to right of use assets is based on the Company’s Credit Facility, which is disclosed in note 10.

The following table presents a maturity analysis of the Company’s undiscounted lease obligations for each of the next five years, reconciled to the obligation as recorded on the balance sheet.

	Undiscounted lease payments
Remainder of 2019	$	68,920
2020		129,119
2021		55,498
	$	253,537
Accretion related to outstanding lease obligations		(7,716	)
Total	$	245,821
Current obligation relating to right of use assets	$	178,590
Long-term obligation relating to right of use assets	$	67,231
Total	$	245,821

XML

Equity investment - Financial Information (Detail)	9 Months Ended
	Sep. 30, 2019 USD ($)
Balance sheet:
Current assets	$ 2,176,239
Non-current assets
Total assets	2,176,239
Current liabilities	319,972
Non-current liabilities
Shareholders’ equity	1,856,267
Total liabilities and shareholders’ equity	2,176,239
Results of operations
Anesthesia revenue	3,811,965
Anesthesia services expense	1,339,698
Net income	$ 2,472,267

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Notes Payable - Summary Of Consolidated Minimum Loan Payments (Detail)	Sep. 30, 2019 USD ($)
Debt Disclosure [Abstract]
2022	$ 68,375,000
Total loans and borrowings	$ 68,375,000

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Segmented information (Tables)

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Summary of Revenues Relating to Geographic Segments

The revenues relating to geographic segments based on customer location, in United States dollars, for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Canada and other	$	51,489	$	56,065	$	175,747	$	167,253
United States		30,363,314		28,675,528		89,840,305		80,560,359
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

Summary of Revenue from Contract with Customer

The Company’s revenues are disaggregated below into categories which differ in terms of the economic factors which impact the amount, timing and uncertainty of revenue and cash flows.

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Commercial Insurers	$	22,801,819	$	22,077,401	$	67,830,007	$	61,492,066
Federal Insurers		5,040,136		3,948,549		14,408,155		10,866,851
Physicians		2,448,174		2,658,131		7,330,147		7,868,907
Other		124,674		47,512		447,743		499,788
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

Summary of Property and Equipment, Intangibles and Other Assets Located in Geographic Regions

The Company’s property and equipment, intangibles, other assets and total assets are located in the following geographic regions as at September 30, 2019 and December 31, 2018:

	2019		2018
Property and equipment:
Canada	$	230,734	$	276,621
United States	$	36,006		26,670
Total	$	266,740	$	303,291
Intangible assets:
Canada	$	31,226	$	32,735
United States	$	157,775,130		179,351,528
Total	$	157,806,356	$	179,384,263
Total assets:
Canada	$	2,988,156	$	9,293,796
United States	$	193,445,013		209,694,200
Total	$	196,433,169	$	218,987,996

Summary of Operating Segments

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the three and nine months ended September 30, 2019 and 2018.  The Company does not allocate expenses related to corporate activities.  These expenses are presented within “Other” to allow for reconciliation to reported measures.

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	27,966,629	$	2,448,174	$	—		$	30,414,803
Operating costs		23,774,049		1,089,316		1,838,812			26,702,177
Operating income (loss)	$	4,192,580	$	1,358,858	$	(1,838,812	)	$	3,712,626

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	26,073,462	$	2,658,131	$	—		$	28,731,593
Operating costs		21,405,928		1,181,976		1,644,356			24,232,260
Operating income (loss)	$	4,667,534	$	1,476,155	$	(1,644,356	)	$	4,499,333

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	82,685,905	$	7,330,147	$	—		$	90,016,052
Operating costs		69,804,891		3,441,207		4,645,347			77,891,445
Operating income (loss)	$	12,881,014	$	3,888,940	$	(4,645,347	)	$	12,124,607

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	72,858,705	$	7,868,907	$	—		$	80,727,612
Operating costs		59,105,405		3,757,518		4,497,757			67,360,680
Operating income (loss)	$	13,753,300	$	4,111,389	$	(4,497,757	)	$	13,366,932

Additionally, the company incurs the following in each of its operating segments:

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	191,950	$	—	$	933,460	$	1,125,410
Depreciation and amortization expense	$	8,530,610	$	5,383	$	19,916	$	8,555,909

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	708,674	$	—	$	916,201	$	1,624,875
Depreciation and amortization expense	$	8,185,957	$	17,055	$	5,748	$	8,208,760

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	2,894,543	$	—	$	2,801,800	$	5,696,343
Depreciation and amortization expense	$	25,899,621	$	19,936	$	54,726	$	25,974,283

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	359,686	$	—	$	2,487,136	$	2,846,822
Depreciation and amortization expense	$	23,079,832	$	51,088	$	17,060	$	23,147,980

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Notes payable (Tables)

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Summary of Notes Payable

	September 30, 2019		December 31, 2018
Current portion	$	—	$	2,239,637
Non-current portion		68,145,464		67,621,470
Total loans and borrowings	$	68,145,464	$	69,861,107

Summary of Detailed Information about Financial Covenants Ratios

As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

Summary of Consolidated Minimum Loans Payments

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At September 30, 2019
Remainder of 2019	$	—
2022		68,375,000
	$	68,375,000

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Asset acquisitions

9 Months Ended

Sep. 30, 2019

Business Combinations [Abstract]

Asset acquisitions

4. Asset acquisitions:

During the nine months ended September 30, 2019, the Company completed three asset acquisitions. The asset acquisitions have been included in the anesthesia segment of the Company and represent the following:

Acquired Operation	Date Acquired	Consideration
Anesthesia Care Associates LLC (“ACA”)	January 2019	$	5,355,028
South Metro Anesthesia Associates LLC ("SMAA")	May 2019	$	1,791,431
Crystal River Anesthesia Associates LLC ("CRAA")	July 2019	$	2,174,003

The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the respective date of acquisition as the Company has obtained control over the entities.

4. Asset acquisitions (continued):

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition dates.

	ACA			SMAA			CRAA			Total
Cash	$	5,239,003		$	1,752,465		$	2,130,000		$	9,121,468
Acquisition costs		116,025			38,966			44,003			198,994
Purchase consideration	$	5,355,028		$	1,791,431		$	2,174,003		$	9,320,462
Non-controlling interest		—			1,465,716			2,088,748			3,554,464
	$	5,355,028		$	3,257,147		$	4,262,751			12,874,926
Assets and liabilities acquired:
Exclusive professional services agreements	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Pre-close accounts receivable		50,000			—			—			50,000
Pre-close accounts payable		(50,000	)		—			—			(50,000	)
Fair value of net identifiable assets and liabilities acquired	$	5,355,028		$	3,257,147		$	4,262,751		$	12,874,926
Exclusive professional services agreements – amortization term	6 years			5 years			5 years
CRH ownership interest acquired		100	%		55	%		51	%

The value of the acquired intangible assets, being exclusive professional services agreements, relates to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization terms for the agreements are based upon contractual terms within the acquisition agreements and professional services agreements.

In addition to the above asset acquisition, on April 3, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Arapahoe Gastroenterology Anesthesia Associates LLC (“Arapahoe”); prior to the purchase the Company held a 51% interest in the Arapahoe entity.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $2,300,000 plus 49% of Arapahoe’s working capital as at March 31, 2019.  Additionally, the Company incurred deferred acquisition costs of $26,086. 

On August 31, 2019, a subsidiary of the Company entered into a membership interest purchase agreement to purchase the remaining 49% interest in Central Colorado Anesthesia Associates LLC (“CCAA”); prior to the purchase the Company held a 51% interest in the CCAA entity.  The purchase consideration, paid via cash, for the acquisition of the remaining 49% interest was $7,000,000 plus 49% of CCAA’s working capital as at August 31, 2019.  Additionally, the Company incurred deferred acquisition costs of $18,658. 

During the quarter ended September 30, 2019, the Company also received a payment of $4,366,000 in respect of the LWA acquisition which was a reduction in the purchase price.  This payment served to reduce the value of the related LWA professional services contract intangible and did not modify ownership interest or the term of the LWA agreement.

During the year ended December 31, 2018, the Company completed five asset acquisitions. These asset acquisitions have been included in the anesthesia segment of the Company and represents the following:

Acquired Operation	Date Acquired	Consideration
Shreveport Sedation Associates LLC (“SSA”)	March 2018	$	9,495,184
Western Ohio Sedation Associates LLC (“WOSA”)	May 2018	$	6,483,698
Lake Washington Anesthesia LLC (“LWA”)	July 2018	$	5,041,939
Lake Erie Sedation Associates LLC (“LESA”)	September 2018	$	4,233,115
Tennessee Valley Anesthesia Associates LLC (“TVAA”)	December 2018	$	2,255,875

The results of operations of the acquired entities have been included in the Company’s consolidated financial statements from the date of acquisition as the Company has control over these entities.

4. Asset acquisitions (continued):

The following table summarizes the fair value of the consideration transferred and the allocated costs of the assets and liabilities acquired at the acquisition date.

	SSA			WOSA			LWA			LESA			TVAA			Total
Cash	$	9,404,148		$	6,409,000		$	5,000,000		$	4,180,000		$	2,200,000		$	27,193,148
Acquisition costs		91,036			74,698			41,939			53,115			55,875			316,663
Purchase consideration	$	9,495,184		$	6,483,698		$	5,041,939		$	4,233,115		$	2,255,875		$	27,509,811
Non-controlling interest	$	—		$	6,229,435		$	4,844,217		$	—		$	2,167,409		$	13,241,061
	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Assets and liabilities acquired:
Exclusive professional services agreements	$	9,391,036		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,646,723
Prepaid expenses and deposits		104,148			—			—			—						104,149
Pre-close accounts receivable		—			—			652,506			—						652,506
Pre-close accounts payable		—			—			(652,506	)		—						(652,506	)
Fair value of net identifiable assets and    liabilities acquired	$	9,495,184		$	12,713,133		$	9,886,156		$	4,233,115		$	4,423,284		$	40,750,872
Exclusive professional services agreements    – amortization term	7 years			10 years			7 years			10 years			7 years
CRH ownership interest		100	%		51	%		51	%		100	%		51	%

The value of the acquired intangible assets, being exclusive professional services agreements, relate to the acquisition of exclusive professional services agreements to provide professional anesthesia services. The amortization term for the agreements is based upon contractual terms within the acquisition agreement and professional services agreement.

The non-controlling interest was determined with reference to the non-controlling interest shareholder’s share of the fair value of the net identifiable assets as estimated by the Company.  

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Intangible assets

9 Months Ended

Sep. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible assets

8. Intangible assets:

Intangible assets, consisting of acquired exclusive professional service agreements to provide anesthesia services and the cost of acquiring patents, are recorded at historical cost.  For patents, costs also include legal costs involved in expanding the countries in which the patents are recognized to the extent expected cash flows from those countries exceed these costs over the amortization period and costs related to new patents. The amortization term for professional services agreements are based on the contractual terms of the agreements. Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are measured at cost less accumulated amortization and accumulated impairment losses.  Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line	15 years
Intellectual property new technology	Straight-line	20 years
Exclusive professional services agreements	Straight-line	4.5 to 15 years

	Professional Services Agreements		Patents		Total
Cost
Balance as at December 31, 2018	$	256,491,260	$	532,598	$	257,023,858
Additions through asset acquisitions and adjustments (note 4)		4,314,142		—		4,314,142
Balance as at September 30, 2019	$	260,805,402	$	532,598	$	261,338,000

	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at December 31, 2018	$	77,139,732	$	499,863	$	77,639,595
Amortization expense		25,890,540		1,509		25,892,049
Balance as at September 30, 2019	$	103,030,272	$	501,372	$	103,531,644

	Professional Services Agreements		Patents		Total
Net book value
September 30, 2019	$	157,775,130	$	31,226	$	157,806,356
December 31, 2018	$	179,351,528	$	32,735	$	179,384,263

The Company identified indicators of impairment in respect of one professional services agreement as at September 30, 2019. Upon performing undiscounted cash flow models for the asset to assess its recoverability, the Company did not identify any impairment.No further indicators of impairment were identified at September 30, 2019

As at December 31, 2018, the Company identified indicators of impairment in respect of four of its professional services agreements.  Upon performing undiscounted cash flow models for these assets, the Company identified only two assets that required further review for impairment.  

The Company performed discounted cash flow modelling for these assets and compared the resultant discounted cash flows expected over the life of the assets to the carrying amounts as at December 31, 2018.  The income approach was used for the quantitative assessment to estimate the fair value of the assets, which requires estimating future cash flows and risk-adjusted discount rates in the Company's discounted cash flow model. The overall market outlook and cash flow projections of the reporting unit involves the use of key assumptions, including anesthesia growth rates, discount rates and operating cost growth rates. Due to uncertainties in the estimates that are inherent to the Company's industry, actual results could differ significantly from the estimates made. Many key assumptions in the cash flow projections are interdependent on each other. A change in any one or combination of these assumptions could impact the estimated fair value of the reporting unit.

8. Intangible assets (continued):

As a result of this test, no write-downs to the intangible assets were required.

Various of the Company’s professional services agreements are subject to renewal terms.  The weighted average period before the Company’s professional services agreements are up for renewal is 3.49 years.  The weighted average remaining amortization period for the Company’s professional services agreements is 5.42 years.

Based on the Company’s professional services agreements in place at September 30, 2019, the Company anticipates that the amortization expense to be incurred by the Company over the next five years is as follows:

	Amortization Expense
For professional services agreements as at September 30, 2019:
Remainder of 2019	$	8,665,085
2020		34,577,141
2021		29,270,763
2022		22,549,476
2023		18,403,113
The first nine months of 2024		13,274,316
	$	126,739,894

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Net finance expense

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Net finance expense

12. Net finance expense

Recognized in earnings in the three and nine months ended September 30:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Finance expense:
Interest and accretion expense on borrowings	$	848,369	$	851,110		2,556,527		2,291,864
Accretion expense on earn-out obligation and deferred    consideration		10,145		35,549		123,305		123,411
Amortization of deferred financing fees		65,091		65,091		195,273		195,272
Net change in fair value of financial liabilities at fair value    through earnings (note 13)		181,805		673,125		2,771,238		236,275
Other		20,000		—		50,000		—
Total finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822
Net finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822

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Subsequent Event - Additional Information (Detail)	Oct. 22, 2019 USD ($)	Sep. 30, 2019 USD ($)
Subsequent Event [Line Items]
Fixed coverage ratio		1.15
Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Line of credit facility, maximum borrowing capacity		$ 100,000,000
Subsequent Event [Member] | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Line of credit facility, initiation date	Oct. 22, 2019
Line of credit facility, maturity period	3 years
Line of credit facility, maximum borrowing capacity	$ 200,000,000
Line of credit facility, committed amount	125,000,000
Line of credit facility, additional borrowing capacity	$ 75,000,000
Line of credit facility, maturity date	Oct. 22, 2022
Debt to EBITDA ratio	3
Fixed coverage ratio	3
Subsequent Event [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Subsequent Event [Line Items]
Borrowings, adjustment to interest rate basis	1.25%
Subsequent Event [Member] | Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Subsequent Event [Line Items]
Borrowings, adjustment to interest rate basis	1.75%

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Notes Payable - Summary Of Notes Payable (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Notes Payable [Line Items]
Total loans and borrowings	$ 68,375,000
Scotia Facility [Member]
Notes Payable [Line Items]
Current portion		$ 2,239,637
Non-current portion	68,145,464	67,621,470
Total loans and borrowings	$ 68,145,464	$ 69,861,107

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Share Capital - Additional Information (Detail)		3 Months Ended					9 Months Ended
	Oct. 04, 2019 shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2019 CAD ($) shares	Jun. 30, 2019 shares	Sep. 30, 2018 USD ($) shares	Sep. 30, 2018 CAD ($) shares	Sep. 30, 2019 USD ($) $ / shares shares	Sep. 30, 2019 CAD ($) shares	Sep. 30, 2018 USD ($) $ / shares shares	Sep. 30, 2018 CAD ($) shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares authorized		100,000,000	100,000,000				100,000,000	100,000,000
Share based payment awards issued		0	0		0	0	0	0	0	0
Compensation expense related to granting and vesting of share unit | $		$ 624,366			$ 744,532		$ 124,595		$ 2,200,964
Stock options exercised							840,000	840,000
Stock options granted							500,000	500,000
Fair value of options at the time of grant | $ / shares							$ 1.43
Risk free rate							1.61%	1.61%
Volatility rate							63.05%	63.05%
Repurchase of shares		384,549	384,549		183,300	183,300	1,357,979	1,357,979	579,900	579,900
Total cost, including transaction fee		$ 1,112,097	$ 1,466,297		$ 565,831	$ 743,965	$ 3,992,728	$ 5,306,896	$ 1,608,348	$ 2,070,503
Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares excluded from diluted weighted average number of common shares calculation		590,144	590,144		191,510	191,510	475,560	475,560	225,351	225,351
Share units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares excluded from diluted weighted average number of common shares calculation		1,935,399	1,935,399		2,045,074	2,045,074	1,936,849	1,936,849	2,129,239	2,129,239
Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options exercised		15,000	15,000	825,000
Shares cancelled under normal course issuer bid							1,338,979	1,338,979
Common Stock [Member] | Subsequent Event [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Shares cancelled under normal course issuer bid	19,000
Time Based Share Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of other equity instruments vested							150,250	150,250	197,750	197,750
Number of other equity instruments issued							1,137,500	1,137,500	171,500	171,500
Weighted average exercise price of other equity instruments issued | $ / shares							$ 2.70		$ 3.10
Performance Based Share Units [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of other equity instruments issued									150,000	150,000
Weighted average exercise price of other equity instruments issued | $ / shares									$ 2.78
Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options vesting period							4 years	4 years
Compensation expense | $		$ 82,113					$ 155,753

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Nature of operations

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of operations

1. Nature of operations:

CRH Medical Corporation (“CRH” or “the Company”) was incorporated on April 21, 2001 and is incorporated under the Business Corporations Act (British Columbia).  The Company provides anesthesiology services to gastroenterologists in the United States through its subsidiaries and sells its patented proprietary technology for the treatment of hemorrhoids directly to physicians in the United States and Canada.

CRH principally operates in the United States and is headquartered from its registered offices located at Unit 578, 999 Canada Place, Vancouver, British Columbia, Canada.

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Financial Instruments - Schedule of Fair Value of Financial Instruments (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	$ 973,094	$ 2,920,583
Earn-out obligation [Member]
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	973,094	2,920,583
Fair Value, Inputs, Level 3 [Member]
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	973,094	2,920,583
Fair Value, Inputs, Level 3 [Member] | Earn-out obligation [Member]
Fair Value Assets Measured On Recurring and Nonrecurring Basis [Line Items]
Total Liabilities	$ 973,094	$ 2,920,583

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Segmented Information - Additional information (Detail)	9 Months Ended
	Sep. 30, 2019 Segment
Segment Reporting [Abstract]
Number of segments	2

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Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Total revenue	$ 30,414,803	$ 28,731,593	$ 90,016,052	$ 80,727,612
Expenses:
Total expenses	26,702,177	24,232,260	77,891,445	67,360,680
Operating income	3,712,626	4,499,333	12,124,607	13,366,932
Finance expense	1,125,410	1,624,875	5,696,343	2,846,822
Equity income	(77,278)		(416,584)
Income before tax	2,664,494	2,874,458	6,844,848	10,520,110
Income tax expense	565,165	390,042	736,052	1,652,444
Net and comprehensive income	2,099,329	2,484,416	6,108,796	8,867,666
Attributable to:
Shareholders of the Company	982,368	266,831	2,552,084	2,968,777
Non-controlling interest	1,116,961	2,217,585	3,556,712	5,898,889
Net and comprehensive income	$ 2,099,329	$ 2,484,416	$ 6,108,796	$ 8,867,666
Earnings per share attributable to shareholders
Basic	$ 0.014	$ 0.004	$ 0.036	$ 0.041
Diluted	$ 0.013	$ 0.004	$ 0.035	$ 0.040
Weighted average shares outstanding:
Basic	71,831,356	71,831,356	71,845,812	71,831,356
Diluted	72,799,142	73,469,373	73,023,144	73,305,400
Anesthesia Services [Member]
Revenue:
Total revenue	$ 27,966,629	$ 26,073,462	$ 82,685,905	$ 72,858,705
Expenses:
Total expenses	23,774,049	21,405,928	69,804,891	59,105,405
Product [Member]
Revenue:
Total revenue	2,448,174	2,658,131	7,330,147	7,868,907
Expenses:
Total expenses	1,089,316	1,181,976	3,441,207	3,757,518
Corporate Expense [Member]
Expenses:
Total expenses	$ 1,838,812	$ 1,644,356	$ 4,645,347	$ 4,497,757

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Segmented Information - Summary of Operating Segments (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting Information [Line Items]
Revenue	$ 30,414,803	$ 28,731,593	$ 90,016,052	$ 80,727,612
Operating costs	26,702,177	24,232,260	77,891,445	67,360,680
Operating income (loss)	3,712,626	4,499,333	12,124,607	13,366,932
Finance expense	1,125,410	1,624,875	5,696,343	2,846,822
Depreciation and amortization expense	8,555,909	8,208,760	25,974,283	23,147,980
Anesthesia Services [Member]
Segment Reporting Information [Line Items]
Revenue	27,966,629	26,073,462	82,685,905	72,858,705
Operating costs	23,774,049	21,405,928	69,804,891	59,105,405
Operating income (loss)	4,192,580	4,667,534	12,881,014	13,753,300
Finance expense	191,950	708,674	2,894,543	359,686
Depreciation and amortization expense	8,530,610	8,185,957	25,899,621	23,079,832
Product Sales [Member]
Segment Reporting Information [Line Items]
Revenue	2,448,174	2,658,131	7,330,147	7,868,907
Operating costs	1,089,316	1,181,976	3,441,207	3,757,518
Operating income (loss)	1,358,858	1,476,155	3,888,940	4,111,389
Depreciation and amortization expense	5,383	17,055	19,936	51,088
Other [Member]
Segment Reporting Information [Line Items]
Operating costs	1,838,812	1,644,356	4,645,347	4,497,757
Operating income (loss)	(1,838,812)	(1,644,356)	(4,645,347)	(4,497,757)
Finance expense	933,460	916,201	2,801,800	2,487,136
Depreciation and amortization expense	$ 19,916	$ 5,748	$ 54,726	$ 17,060

XML

Intangible Assets - Intangible Assets Finite Lives Amortized Over Period (Detail)	9 Months Ended
	Sep. 30, 2019
Intellectual Property Rights to the CRH O'Regan System [Member]
Finite-Lived Intangible Assets [Line Items]
Basis	Straight-line
Rate	15 years
Intellectual Property New Technology [Member]
Finite-Lived Intangible Assets [Line Items]
Basis	Straight-line
Rate	20 years
Exclusive Professional Services Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Basis	Straight-line
Minimum [Member] | Exclusive Professional Services Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Rate	4 years 6 months
Maximum [Member] | Exclusive Professional Services Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Rate	15 years

XML

Trade and Other Payables - Summary of Trade and Other Payables (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Debt Instruments [Abstract]
Trade payables	$ 969,657	$ 1,316,821
Payable to CCAA vendor	586,561
Accruals and other payables	4,921,207	4,446,401
Total	$ 6,477,425	$ 5,763,222

XML

Segmented information

9 Months Ended

Sep. 30, 2019

Segment Reporting [Abstract]

Segmented information

16. Segmented information:

The Company operates in two industry segments: the sale of medical products and the provision of anesthesia services.  The revenues relating to geographic segments based on customer location, in United States dollars, for the three and nine months ended September 30, 2019 and 2018 are as follows:

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Canada and other	$	51,489	$	56,065	$	175,747	$	167,253
United States		30,363,314		28,675,528		89,840,305		80,560,359
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

The Company’s revenues are disaggregated below into categories which differ in terms of the economic factors which impact the amount, timing and uncertainty of revenue and cash flows.

	Three months ended				Nine months ended
	September 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Revenue:
Commercial Insurers	$	22,801,819	$	22,077,401	$	67,830,007	$	61,492,066
Federal Insurers		5,040,136		3,948,549		14,408,155		10,866,851
Physicians		2,448,174		2,658,131		7,330,147		7,868,907
Other		124,674		47,512		447,743		499,788
Total	$	30,414,803	$	28,731,593	$	90,016,052	$	80,727,612

The Company’s property and equipment, intangibles, other assets and total assets are located in the following geographic regions as at September 30, 2019 and December 31, 2018:

	2019		2018
Property and equipment:
Canada	$	230,734	$	276,621
United States	$	36,006		26,670
Total	$	266,740	$	303,291
Intangible assets:
Canada	$	31,226	$	32,735
United States	$	157,775,130		179,351,528
Total	$	157,806,356	$	179,384,263
Total assets:
Canada	$	2,988,156	$	9,293,796
United States	$	193,445,013		209,694,200
Total	$	196,433,169	$	218,987,996

The financial measures reviewed by the Company’s Chief Operating Decision Maker are presented below for the three and nine months ended September 30, 2019 and 2018.  The Company does not allocate expenses related to corporate activities.  These expenses are presented within “Other” to allow for reconciliation to reported measures.

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	27,966,629	$	2,448,174	$	—		$	30,414,803
Operating costs		23,774,049		1,089,316		1,838,812			26,702,177
Operating income (loss)	$	4,192,580	$	1,358,858	$	(1,838,812	)	$	3,712,626

16. Segmented information (continued):

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	26,073,462	$	2,658,131	$	—		$	28,731,593
Operating costs		21,405,928		1,181,976		1,644,356			24,232,260
Operating income (loss)	$	4,667,534	$	1,476,155	$	(1,644,356	)	$	4,499,333

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other			Total
Revenue	$	82,685,905	$	7,330,147	$	—		$	90,016,052
Operating costs		69,804,891		3,441,207		4,645,347			77,891,445
Operating income (loss)	$	12,881,014	$	3,888,940	$	(4,645,347	)	$	12,124,607

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other			Total
Revenue	$	72,858,705	$	7,868,907	$	—		$	80,727,612
Operating costs		59,105,405		3,757,518		4,497,757			67,360,680
Operating income (loss)	$	13,753,300	$	4,111,389	$	(4,497,757	)	$	13,366,932

Additionally, the company incurs the following in each of its operating segments:

	Three months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	191,950	$	—	$	933,460	$	1,125,410
Depreciation and amortization expense	$	8,530,610	$	5,383	$	19,916	$	8,555,909

	Three months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	708,674	$	—	$	916,201	$	1,624,875
Depreciation and amortization expense	$	8,185,957	$	17,055	$	5,748	$	8,208,760

	Nine months ended September 30, 2019
	Anesthesia services		Product sales		Other		Total
Finance expense	$	2,894,543	$	—	$	2,801,800	$	5,696,343
Depreciation and amortization expense	$	25,899,621	$	19,936	$	54,726	$	25,974,283

	Nine months ended September 30, 2018
	Anesthesia services		Product sales		Other		Total
Finance expense	$	359,686	$	—	$	2,487,136	$	2,846,822
Depreciation and amortization expense	$	23,079,832	$	51,088	$	17,060	$	23,147,980

XML

Trade and other receivables (Tables)

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Summary of Trade Receivables and Other Receivable

	September 30, 2019			December 31, 2018
Trade receivables, gross	$	19,559,565		$	19,373,260
Other receivables		54,177			141,141
Less:  allowance for doubtful accounts		(43,206	)		(46,598	)
	$	19,570,536		$	19,467,803
Anesthesia segment – trade receivables, gross		18,641,926			18,199,847
Product segment – trade receivables, gross		917,639			1,173,413
	$	19,559,565		$	19,373,260

XML

Trade and other payables

9 Months Ended

Sep. 30, 2019

Payables And Accruals [Abstract]

Trade and other payables

6. Trade and other payables:

	September 30, 2019		December 31, 2018
Trade payables	$	969,657	$	1,316,821
Payable to CCAA vendor	$	586,561	$	—
Accruals and other payables		4,921,207		4,446,401
	$	6,477,425	$	5,763,222

XML

Notes payable

9 Months Ended

Sep. 30, 2019

Debt Disclosure [Abstract]

Notes payable

10. Notes payable:

	September 30, 2019		December 31, 2018
Current portion	$	—	$	2,239,637
Non-current portion		68,145,464		67,621,470
Total loans and borrowings	$	68,145,464	$	69,861,107

The Bank of Nova Scotia (“Scotia Facility”)

As at September 30, 2019, the Company had drawn $68,375,000 on the amended facility (2018 - $70,250,000).  The facility bears interest at a floating rate based on the US prime rate, LIBOR or bankers’ acceptance rates plus an applicable margin.  At September 30, 2019, interest on the facility is calculated at LIBOR plus 2.25% on both the revolving and term portions of the facility.  The Facility is secured by the assets of the Company.  As at September 30, 2019, the Company is required to maintain the following financial covenants in respect of the Facility:

Financial Covenant	Required Ratio
Total funded debt ratio	2.50:1.00
Fixed charge coverage ratio	1.15:1.00

The Company is in compliance with all covenants at September 30, 2019.  The Company’s facility matures on August 15, 2020; however, the facility will be replaced by a syndicated facility held by JP Morgan.  Refer to subsequent event note 17.  

The consolidated minimum loan payments (principal) for all loan agreements in the future are as follows:

	Minimum Principal
At September 30, 2019
Remainder of 2019	$	—
2022		68,375,000
	$	68,375,000

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Net finance expense (Tables)

9 Months Ended

Sep. 30, 2019

Text Block [Abstract]

Summary of Net Finance Expense

Recognized in earnings in the three and nine months ended September 30:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Finance expense:
Interest and accretion expense on borrowings	$	848,369	$	851,110		2,556,527		2,291,864
Accretion expense on earn-out obligation and deferred    consideration		10,145		35,549		123,305		123,411
Amortization of deferred financing fees		65,091		65,091		195,273		195,272
Net change in fair value of financial liabilities at fair value    through earnings (note 13)		181,805		673,125		2,771,238		236,275
Other		20,000		—		50,000		—
Total finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822
Net finance expense	$	1,125,410	$	1,624,875		5,696,343		2,846,822

XML

Intangible assets (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Intangible Assets

Intangible assets with finite lives are amortized over the following periods:

Asset	Basis	Rate
Intellectual property rights to the CRH O’Regan System	Straight-line	15 years
Intellectual property new technology	Straight-line	20 years
Exclusive professional services agreements	Straight-line	4.5 to 15 years

	Professional Services Agreements		Patents		Total
Cost
Balance as at December 31, 2018	$	256,491,260	$	532,598	$	257,023,858
Additions through asset acquisitions and adjustments (note 4)		4,314,142		—		4,314,142
Balance as at September 30, 2019	$	260,805,402	$	532,598	$	261,338,000

	Professional Services Agreements		Patents		Total
Accumulated depreciation
Balance as at December 31, 2018	$	77,139,732	$	499,863	$	77,639,595
Amortization expense		25,890,540		1,509		25,892,049
Balance as at September 30, 2019	$	103,030,272	$	501,372	$	103,531,644

	Professional Services Agreements		Patents		Total
Net book value
September 30, 2019	$	157,775,130	$	31,226	$	157,806,356
December 31, 2018	$	179,351,528	$	32,735	$	179,384,263

Summary of Amortization Expense to be Incurred by Company Over Next Five Years

Based on the Company’s professional services agreements in place at September 30, 2019, the Company anticipates that the amortization expense to be incurred by the Company over the next five years is as follows:

	Amortization Expense
For professional services agreements as at September 30, 2019:
Remainder of 2019	$	8,665,085
2020		34,577,141
2021		29,270,763
2022		22,549,476
2023		18,403,113
The first nine months of 2024		13,274,316
	$	126,739,894

XML

Asset acquisitions - Additional Information - 2017 Acquisitions (Detail)			3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 31, 2019 USD ($)	Apr. 03, 2019 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) Acquisition	Sep. 30, 2018 USD ($)	Dec. 31, 2018 USD ($) Acquisition	Aug. 30, 2019	Apr. 02, 2019
Business Acquisition [Line Items]
Number of asset acquisitions completed | Acquisition					3		5
Total cash consideration			$ 2,174,003	$ 9,275,054	$ 9,204,437	$ 25,253,936
Deferred asset acquisition costs			440		440		$ 116,025
Payment received from acquisition due to reduction in purchase price			4,366,000		$ 4,366,000
Arapahoe [Member]
Business Acquisition [Line Items]
Ownership interest acquired		49.00%							51.00%
Total cash consideration		$ 2,300,000
Percentage of working capital paid for acquisition of remaining ownership interest		49.00%
Deferred asset acquisition costs		$ 26,086
CCAA [Member]
Business Acquisition [Line Items]
Ownership interest acquired	49.00%							51.00%
Total cash consideration	$ 7,000,000
Percentage of working capital paid for acquisition of remaining ownership interest	49.00%
Deferred asset acquisition costs	$ 18,658
Lake Washington Anesthesia LLC [Member]
Business Acquisition [Line Items]
Payment received from acquisition due to reduction in purchase price			$ 4,366,000

XML

Share Capital - Summary of Calculation of Basic Earnings (loss) Per Share (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net earnings, Basic	$ 982,368	$ 266,831	$ 2,552,084	$ 2,968,777
Net earnings, Diluted	$ 982,368	$ 266,831	$ 2,552,084	$ 2,968,777
Weighted average number of common shares outstanding, Basic	71,831,356	71,831,356	71,845,812	71,831,356
Weighted average number of common shares outstanding, Diluted	72,799,142	73,469,373	73,023,144	73,305,400
Earnings per common share, Basic	$ 0.014	$ 0.004	$ 0.036	$ 0.041
Earnings per common share, Diluted	$ 0.013	$ 0.004	$ 0.035	$ 0.040
Options [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average number of common shares outstanding, Basic	422,043	1,153,177	742,909	1,119,336
Share units [Member]
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted average number of common shares outstanding, Basic	545,743	484,840	434,423	354,708

XML

Equity investment - Summary of the Company's investment in TSA (Detail) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Investments Debt And Equity Securities [Abstract]
Beginning balance
Share of net income	$ 77,278	416,584
Member distributions		(92,400)
Ending balance	$ 324,184	$ 324,184

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Notes Payable - Summary of Detailed Information about Financial Covenants Ratios (Detail)	9 Months Ended
	Sep. 30, 2019
Debt Disclosure [Abstract]
Total funded debt ratio	2.5
Fixed charge coverage ratio	1.15

XML

Right of use assets and related obligations - Lease expense (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Lease, Cost	$ 90,670	$ 73,651	$ 278,339	$ 212,512
Anesthesia Services [Member]
Lease, Cost	28,106	16,205	90,839	48,062
Product Sales [Member]
Lease, Cost	31,282	28,723	93,750	82,225
Corporate Segment [Member]
Lease, Cost	$ 31,282	$ 28,723	$ 93,750	$ 82,225

XML

Asset acquisitions - Summary of Fair Value of Consideration Transferred and Allocated Costs of Assets and Liabilities Acquired at Acquisition Date (Detail) - Anesthesia Services [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Cash	$ 9,121,468	$ 27,193,148
Acquisition costs	198,994	316,663
Purchase consideration	9,320,462	27,509,811
Non-controlling interest	3,554,464	13,241,061
Fair value of net identifiable assets and liabilities acquired	12,874,926	40,750,872
Assets and liabilities acquired:
Exclusive professional services agreements	12,874,926	40,646,723
Prepaid expenses and deposits		104,149
Pre-close accounts receivable	50,000	652,506
Pre-close accounts payable	(50,000)	(652,506)
Fair value of net identifiable assets and liabilities acquired	12,874,926	40,750,872
ACA [Member]
Business Acquisition [Line Items]
Cash	5,239,003
Acquisition costs	116,025
Purchase consideration	5,355,028
Fair value of net identifiable assets and liabilities acquired	5,355,028
Assets and liabilities acquired:
Exclusive professional services agreements	5,355,028
Pre-close accounts receivable	50,000
Pre-close accounts payable	(50,000)
Fair value of net identifiable assets and liabilities acquired	$ 5,355,028
Exclusive professional services agreements – amortization term	6 years
CRH ownership interest acquired	100.00%
SMAA [Member]
Business Acquisition [Line Items]
Cash	$ 1,752,465
Acquisition costs	38,966
Purchase consideration	1,791,431
Non-controlling interest	1,465,716
Fair value of net identifiable assets and liabilities acquired	3,257,147
Assets and liabilities acquired:
Exclusive professional services agreements	3,257,147
Fair value of net identifiable assets and liabilities acquired	$ 3,257,147
Exclusive professional services agreements – amortization term	5 years
CRH ownership interest acquired	55.00%
CRAA [Member]
Business Acquisition [Line Items]
Cash	$ 2,130,000
Acquisition costs	44,003
Purchase consideration	2,174,003
Non-controlling interest	2,088,748
Fair value of net identifiable assets and liabilities acquired	4,262,751
Assets and liabilities acquired:
Exclusive professional services agreements	4,262,751
Fair value of net identifiable assets and liabilities acquired	$ 4,262,751
Exclusive professional services agreements – amortization term	5 years
CRH ownership interest acquired	51.00%
Shreveport Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Cash		9,404,148
Acquisition costs		91,036
Purchase consideration		9,495,184
Non-controlling interest		0
Fair value of net identifiable assets and liabilities acquired		9,495,184
Assets and liabilities acquired:
Exclusive professional services agreements		9,391,036
Prepaid expenses and deposits		104,148
Pre-close accounts receivable		0
Pre-close accounts payable		0
Fair value of net identifiable assets and liabilities acquired		$ 9,495,184
Exclusive professional services agreements – amortization term		7 years
CRH ownership interest acquired		100.00%
Western Ohio Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Cash		$ 6,409,000
Acquisition costs		74,698
Purchase consideration		6,483,698
Non-controlling interest		6,229,435
Fair value of net identifiable assets and liabilities acquired		12,713,133
Assets and liabilities acquired:
Exclusive professional services agreements		12,713,133
Prepaid expenses and deposits		0
Pre-close accounts receivable		0
Pre-close accounts payable		0
Fair value of net identifiable assets and liabilities acquired		$ 12,713,133
Exclusive professional services agreements – amortization term		10 years
CRH ownership interest acquired		51.00%
Lake Washington Anesthesia LLC [Member]
Business Acquisition [Line Items]
Cash		$ 5,000,000
Acquisition costs		41,939
Purchase consideration		5,041,939
Non-controlling interest		4,844,217
Fair value of net identifiable assets and liabilities acquired		9,886,156
Assets and liabilities acquired:
Exclusive professional services agreements		9,886,156
Prepaid expenses and deposits		0
Pre-close accounts receivable		652,506
Pre-close accounts payable		(652,506)
Fair value of net identifiable assets and liabilities acquired		$ 9,886,156
Exclusive professional services agreements – amortization term		7 years
CRH ownership interest acquired		51.00%
Lake Erie Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Cash		$ 4,180,000
Acquisition costs		53,115
Purchase consideration		4,233,115
Non-controlling interest		0
Fair value of net identifiable assets and liabilities acquired		4,233,115
Assets and liabilities acquired:
Exclusive professional services agreements		4,233,115
Prepaid expenses and deposits		0
Pre-close accounts receivable		0
Pre-close accounts payable		0
Fair value of net identifiable assets and liabilities acquired		$ 4,233,115
Exclusive professional services agreements – amortization term		10 years
CRH ownership interest acquired		100.00%
Tennessee Valley Anesthesia LLC [Member]
Business Acquisition [Line Items]
Cash		$ 2,200,000
Acquisition costs		55,875
Purchase consideration		2,255,875
Non-controlling interest		2,167,409
Fair value of net identifiable assets and liabilities acquired		4,423,284
Assets and liabilities acquired:
Exclusive professional services agreements		4,423,284
Fair value of net identifiable assets and liabilities acquired		$ 4,423,284
Exclusive professional services agreements – amortization term		7 years
CRH ownership interest acquired		51.00%

XML

Intangible Assets - Additional Information (Detail) - Service	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Intangible Assets Net Excluding Goodwill [Abstract]
Number of professional services agreements identified with impairment indicators	1	4
Number of professional services agreements identified for impairment upon undiscounted cash flow models	0	2
Renewal term of professional services agreements	3 years 5 months 26 days
Weighted average amortization period	5 years 5 months 1 day

XML

Financial Instruments - Summary of Reconciliation of Level 3 Fair Values (Detail) - Fair Value, Inputs, Level 3 [Member]	9 Months Ended
	Sep. 30, 2019 USD ($)
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance as at January 1, 2019	$ 2,920,583
Payment	(4,795,822)
Accretion expense	77,095
Fair value adjustment	2,771,238
Balance as at September 30, 2019	$ 973,094

XML

Segmented Information - Summary of Revenue from Contract with Customer (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 30,414,803	$ 28,731,593	$ 90,016,052	$ 80,727,612
Commercial Insurers [Member]
Disaggregation of Revenue [Line Items]
Revenue	22,801,819	22,077,401	67,830,007	61,492,066
Federal Insurers [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,040,136	3,948,549	14,408,155	10,866,851
Physicians [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,448,174	2,658,131	7,330,147	7,868,907
Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 124,674	$ 47,512	$ 447,743	$ 499,788

XML

Condensed Consolidated Statements of Changes in Equity (Parenthetical) - shares	3 Months Ended
	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Mar. 31, 2018
Common Stock [Member]
Shares repurchased in connection with normal course issuer bid and held as treasury shares	19,000	23,000	27,000	107,900

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 5,215,044	$ 9,946,945
Trade and other receivables, net	19,570,536	19,467,803
Income tax receivable	2,424,940	2,243,319
Prepaid expenses and deposits	515,821	822,119
Inventories, finished goods	357,235	402,544
Total current assets	28,083,576	32,882,730
Non-current assets:
Property and equipment, net	266,740	303,291
Right of use asset	282,075
Intangible assets, net	157,806,356	179,384,263
Deferred asset acquisition costs	440	116,025
Equity accounted investment	324,184
Deferred tax assets	9,669,798	6,301,687
Total non-current assets	168,349,593	186,105,266
Total assets	196,433,169	218,987,996
Current liabilities:
Trade and other payables	6,477,425	5,763,222
Employee benefits	1,061,555	827,436
Income tax payable	27,147
Current obligation related to right of use assets	178,590
Notes payable and bank indebtedness		2,239,637
Deferred consideration	1,172,948	1,043,645
Earn-out obligation	973,094	2,920,583
Short-term advances		26,783
Member loan	30,625	49,000
Total current liabilities	9,921,384	12,870,306
Non-current liabilities:
Deferred consideration		1,183,092
Long-term obligation related to right of use assets	67,231
Notes payable and bank indebtedness	68,145,464	67,621,470
Deferred tax liabilities	21,962	21,951
Total non-current liabilities	68,234,657	68,826,513
Equity
Common stock, no par value; 71,696,559 and 72,055,688 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively	55,598,273	55,372,884
Additional paid-in capital	7,064,783	9,329,335
Accumulated other comprehensive income (loss)	(66,772)	(66,772)
Retained earnings	12,506,661	12,916,565
Total equity attributable to shareholders of the Company	75,102,945	77,552,012
Non-controlling interest	43,174,183	59,739,165
Total equity	118,277,128	137,291,177
Total liabilities and equity	$ 196,433,169	$ 218,987,996

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Right of use assets and related obligations (Tables)

9 Months Ended

Sep. 30, 2019

Leases [Abstract]

Schedule of Lease Expense Allocated to Operating Segments

Lease expense is allocated to operating segments based on the location of the leases, as follows:

	For the three months ended September 30,				For the nine months ended September 30,
	2019		2018		2019		2018
Anesthesia services expense	$	28,106	$	16,205	$	90,839	$	48,062
Product sales expense		31,282		28,723		93,750		82,225
Corporate expense		31,282		28,723		93,750		82,225
	$	90,670	$	73,651	$	278,339	$	212,512

Schedule of undiscounted lease obligations

The following table presents a maturity analysis of the Company’s undiscounted lease obligations for each of the next five years, reconciled to the obligation as recorded on the balance sheet.

	Undiscounted lease payments
Remainder of 2019	$	68,920
2020		129,119
2021		55,498
	$	253,537
Accretion related to outstanding lease obligations		(7,716	)
Total	$	245,821
Current obligation relating to right of use assets	$	178,590
Long-term obligation relating to right of use assets	$	67,231
Total	$	245,821

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Commitments and contingencies

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and contingencies

14. Commitments and contingencies:

The Company is a party to a variety of agreements in the ordinary course of business under which it may be obligated to indemnify third parties with respect to certain matters.  These obligations include, but are not limited to, contracts entered into with physicians where the Company agrees, under certain circumstances, to indemnify a third party against losses arising from matters including but not limited to medical malpractice and product liability.  The impact of any such future claims, if made, on future financial results is not subject to reasonable estimation because considerable uncertainty exists as to final outcome of these potential claims.

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Summary of significant accounting policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Basis of presentation

(a) Basis of presentation:

As a non-U.S. company listed on the NYSE, the United States Securities and Exchange Commission (“SEC”) requires us to perform a test on the last business day of the second quarter of each fiscal year to determine whether we continue to meet the definition of a foreign private issuer (“FPI”). Historically, we met the definition of an FPI, and as such, prepared consolidated financial statements in accordance with IFRS, reported with the SEC on FPI forms, and complied with SEC rules and regulations applicable to FPIs.

On June 30, 2018, we performed the test and determined that we no longer met the definition of a FPI. As such, from January 1, 2019, the Company is required to prepare consolidated financial statements in accordance with United States Generally Accepted Accounting Principles (“US GAAP”), report with the SEC on domestic forms, and comply with SEC rules and regulations applicable to domestic issuers.

These condensed consolidated interim financial statements have been prepared in accordance with US GAAP beginning December 31, 2018 on a retrospective basis. The Company’s historical financial statements were previously presented under International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) up to and including the Company’s September 30, 2018 interim report.

These interim financial statements do not include all note disclosures required on an annual basis, and therefore, should be read in conjunction with the annual audited consolidated financial statements for the year ended December 31, 2018, filed with the appropriate securities regulatory authorities.

In the opinion of management, all adjustments, which include reclassifications and normal recurring adjustments necessary to present fairly the condensed consolidated balance sheets, condensed consolidated statement of operations and comprehensive income, condensed consolidated statements of changes in equity and condensed consolidated statements cash flows as at September 30, 2019 and for all periods presented, have been recorded. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the Company's full year results.

Basis of consolidation

(b) Basis of consolidation:

These consolidated financial statements include the accounts of the Company and its subsidiaries. Subsidiaries are entities controlled by the Company through voting control and for the anesthesia business, control over the assets and business operations of the subsidiary through operating agreements.  Control exists when the Company has the continuing power to govern the financial and operating polices of the investee. Subsidiaries are included in the consolidated financial results of the Company from the effective date of acquisition up to the effective date of disposition or loss of control. Minority interests, if any, are valued at fair value at inception. All significant intercompany transactions and balances have been eliminated on consolidation.

Use of estimates, assumptions and judgments

(c) Use ofestimates, assumptions and judgments:

ThepreparationoftheCompany’sconsolidatedfinancial statementsrequiresmanagementtomake judgments, estimatesandassumptionsthataffectthe application of accounting policies, the reportedamounts of assetsandliabilities, the disclosure of contingent assetsand liabilitiesat thedateof the financial statements and thereported amounts of revenues and expenses duringthe reporting period.

Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take.  Actual results could differ from those estimates.

Equity method investment

(d) Equity method investment:

The Company accounts for its investment in associated companies in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification 323, Investments - Equity Method and Joint Ventures ("ASC 323"). Results of equity investments are presented on a one-line basis. Investments in, and advances to, equity investments are presented on a one-line basis in the Company's consolidated balance sheets, net of allowance for losses, which represents the Company's best estimate of probable losses inherent in such assets. The Company's proportionate share of any equity investment net income or loss is presented on a one-line basis in the Company's consolidated statement of operations. Transactions between the Company and any associated companies are eliminated on a basis proportional to the Company's ownership interest.

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Intangible Assets - Summary of Amortization Expense to be Incurred by Company Over Next Five Years (Detail) - Professional Services Agreements [Member]	Sep. 30, 2019 USD ($)
Finite Lived Intangible Assets, Future Amortization Expense [Line Items]
Remainder of 2019	$ 8,665,085
2020	34,577,141
2021	29,270,763
2022	22,549,476
2023	18,403,113
The first nine months of 2024	13,274,316
Amortization Expense	$ 126,739,894

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Right of use assets and related obligations (Detail) - USD ($)	Sep. 30, 2019	Jan. 01, 2019
Leases [Abstract]
Remainder of 2019	$ 68,920
2020	129,119
2021	55,498
Total	253,537
Accretion related to outstanding lease obligations	(7,716)
Operating Lease, Liability	245,821	$ 295,188
Current obligation relating to right of use assets	178,590
Long-term obligation relating to right of use assets	67,231
Total	$ 245,821	$ 295,188

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Trade and Other Receivables - Summary of Trade Receivables and Other Receivable (Detail) - USD ($)	Sep. 30, 2019	Dec. 31, 2018
Balance Sheet Related Disclosures [Line Items]
Trade receivables, gross	$ 19,559,565	$ 19,373,260
Other receivables	54,177	141,141
Less: allowance for doubtful accounts	(43,206)	(46,598)
Receivables net current	19,570,536	19,467,803
Anesthesia Services [Member]
Balance Sheet Related Disclosures [Line Items]
Trade receivables, gross	18,641,926	18,199,847
Product Sales [Member]
Balance Sheet Related Disclosures [Line Items]
Trade receivables, gross	$ 917,639	$ 1,173,413

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Condensed Consolidated Statements of Cash Flows - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net income	$ 2,099,329	$ 2,484,416	$ 6,108,796	$ 8,867,666
Adjustments for:
Depreciation of property, equipment and intangibles	8,555,909	8,208,760	25,974,283	23,147,980
Stock-based compensation	706,479	744,532	280,348	2,200,964
Unrealized foreign exchange	(50)	(45,742)	726	(40,420)
Deferred income tax recovery	(776,300)	(617,700)	(2,749,616)	(2,184,213)
Change in fair value of contingent consideration	181,805	673,125	2,771,238	236,275
Accretion on contingent consideration and deferred consideration	10,145	35,549	123,305	123,411
Amortization of deferred financing fees	65,091	65,091	195,273	195,272
Equity income	(77,278)		(416,584)
Change in current tax receivable	(17,826)	(673,685)	(154,474)	(2,265,791)
Change in trade and other receivables	(182,433)	(1,157,352)	(102,733)	(1,780,965)
Change in prepaid expenses	(59,218)	57,544	268,162	319,879
Change in inventories	153,837	(176,683)	45,309	(147,266)
Change in trade and other payables	(83,936)	2,088,802	91,726	845,886
Change in employee benefits	135,609	225,542	234,120	329,807
Net cash provided by operating activities	10,711,163	11,912,199	32,669,879	29,848,485
Financing activities
Repayment of member loans	(14,375)	(186,200)	(18,375)	(435,000)
Proceeds (repayment) on short-term advances		110,767	(26,783)	110,767
Payment of deferred consideration			(1,100,000)	(1,000,000)
Payment of contingent consideration			(4,795,822)
Repayment of notes payable and bank indebtedness	(5,625,000)		(13,175,000)	(11,000,000)
Proceeds on bank indebtedness	7,000,000	4,500,000	11,300,000	18,300,000
Proceeds from exercise of stock options	6,753		426,366
Distributions to non-controlling interest	(3,615,819)	(4,149,200)	(11,804,480)	(14,618,460)
Repurchase of shares for cancellation	(1,109,170)	(564,342)	(3,982,914)	(1,603,658)
Net cash used in financing activities	(3,357,611)	(288,975)	(23,177,008)	(10,246,351)
Investing activities
Acquisition of property and equipment	(4,834)	(2,946)	(45,681)	(9,353)
Deferred asset acquisition costs	38,437		(440)
Acquisition of equity interest from non-controlling interest	(7,018,658)		(9,434,009)
Acquisition of anesthesia services providers	(2,174,003)	(9,275,054)	(9,204,437)	(25,253,936)
Distribution received from equity investment	92,400		92,400
Purchase adjustment relating to anesthesia service providers acquired in prior periods	4,366,000		4,366,000
Net cash used in investing activities	(4,700,658)	(9,278,000)	(14,226,167)	(25,263,289)
Effects of foreign exchange on cash and cash equivalents	(270)	17,719	1,395	6,831
Increase (decrease) in cash and cash equivalents	2,652,624	2,362,943	(4,731,901)	(5,654,324)
Cash and cash equivalents, beginning of period	2,562,420	4,469,617	9,946,945	12,486,884
Cash and cash equivalents, end of period	5,215,044	6,832,560	5,215,044	6,832,560
Supplemental disclosures:
Cash interest paid	(772,680)	(600,510)	(2,532,084)	(2,041,263)
Taxes paid	(1,359,634)	(1,681,427)	(3,640,248)	(6,102,449)
Operating lease payments	(90,669)	$ (73,651)	(278,339)	$ (212,510)
Non-cash acquisition costs	$ (586,561)		$ (702,586)

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Common stock, no par value	$ 0	$ 0
Common stock, shares issued	71,696,559	72,055,688
Common stock, shares outstanding	71,696,559	72,055,688

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Financial Instruments - Additional Information (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Fair Value, Measurements, Recurring [Member]
Financial Instruments [Line Items]
Accretion expense related to earn-out obligation		$ 15,938	$ 77,095	$ 49,978
Fair Value, Inputs, Level 3 [Member]
Financial Instruments [Line Items]
Payments on partial amount of earn-out obligation			4,795,822
Remaining obligation payable	$ 973,094		$ 973,094
Expects to pay the remaining obligation period			1 year
Increase (decrease) in fair value of earn-out obligation			$ 2,771,238
Accretion expense related to earn-out obligation			$ 77,095

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Segmented Information - Summary of Revenues Relating to Geographic Segments (Detail) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue	$ 30,414,803	$ 28,731,593	$ 90,016,052	$ 80,727,612
Canada and Other [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue	51,489	56,065	175,747	167,253
United States [Member]
Segment Reporting, Revenue Reconciling Item [Line Items]
Total revenue	$ 30,363,314	$ 28,675,528	$ 89,840,305	$ 80,560,359

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Financial instruments

9 Months Ended

Sep. 30, 2019

Investments All Other Investments [Abstract]

Financial instruments

13. Financial instruments:

The Company’s financial instruments consist of cash and cash equivalents, trade and other receivables, trade and other payables, employee benefit obligations, short term advances, loans and loans to equity investments, notes payable and bank indebtedness, deferred consideration and the Company’s earn-out obligation.  The fair values of these financial instruments, except the notes payable balances, the deferred consideration and the earn-out obligation, approximate carrying value because of their short-term nature. The earn-out obligation is recorded at fair value.  The fair value of the notes payable and bank indebtedness, which is comprised of the Scotia Facility, approximates carrying value as it is a floating rate instrument.  The Company’s deferred consideration was initially measured at fair value and is being accreted to its face value over a period of four years from the acquisition date.  The amounts payable as deferred compensation are specified in the acquisition agreement for Austin Gastroenterology Anesthesia Associates LLC, which was acquired in 2016.

An established fair value hierarchy requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.  A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is available and significant to the fair value measurement.  There are three levels of inputs that may be used to measure fair value:

• Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Liabilities	September 30, 2019		Level 1		Level 2		Level 3
Earn-out obligation	$	973,094	$	—	$	—	$	973,094
Total	$	973,094	$	—	$	—	$	973,094

Liabilities	December 31, 2018		Level 1		Level 2		Level 3
Earn-out obligation	$	2,920,583	$	—	$	—	$	2,920,583
Total	$	2,920,583	$	—	$	—	$	2,920,583

13. Financial instruments (continued):

The Company’s earn-out obligation is measured at fair value on a recurring basis using significant unobservable inputs (Level 3).  The earn-out obligation relates to the Company’s Gastroenterology Anesthesia Associates LLC acquisition, which was acquired in 2014.  As part of the business combination, the Company is required to pay consideration contingent on the post-acquisition earnings of the acquired asset.  In the nine months ended September 30, 2019, the Company paid $4,795,822 as partial payment of the amount owing under its earn-out obligation; the Company expects to pay the remaining obligation of $973,094 within one year.  The Company measures the fair value of the earn-out obligation based on its best estimate of the cash outflows payable in respect of the earn-out obligation.  This valuation technique includes inputs relating to estimated cash outflows under the arrangement and the use of a discount rate appropriate to the Company.  The Company evaluates the inputs into the valuation technique at each reporting period.  During the nine months ended September 30, 2019, the Company revised its estimate underlying the remaining amount to be paid under the earn-out obligation. The amendment of the cash outflow estimates underlying the earn-out resulted in an increaseof $2,771,238 for the nine months ended September 30, 2019 to the fair value of the earn-out obligation.  The impact of this adjustment was recorded through finance expense in the period.

During the three months ended September 30, 2019, the Company recorded accretion expense of $nil (2018 - $15,938), in relation to this liability, reflecting the change in fair value of the liabilities that is attributable to credit risk. During the nine months ended September 30, 2019, the Company recorded accretion expense of $77,095 (2018 - $49,978).

Reconciliation of level 3 fair values:

	Earn-out obligation
Balance as at January 1, 2019	$	2,920,583
Payment		(4,795,822	)
Recorded in finance expense:
Accretion expense		77,095
Fair value adjustment		2,771,238
Balance as at September 30, 2019	$	973,094

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Subsequent event

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent event

17. Subsequent event:

On October 22, 2019, the Company entered into a new, three year revolving credit line which provides up to $200 million in borrowing capacity and represents an increase from the Company’s previous $100 million facility.  The new facility includes a committed $125 million facility and access to an accordion feature that increases the amount of the credit available to the Company by $75 million.  Interest on the facility is calculated with reference to LIBOR plus 1.25% to 1.75%, dependent on the Company’s Debt to EBITDA ratio.  The facility is secured by the assets of the Company and matures on October 22, 2022.   The Company will be required to maintain a Debt to EBITDA ratio covenant of 3.0:1.0 and a Fixed Coverage ratio covenant of 3.0:1.0 under the terms of the facility.

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Trade and other payables (Tables)

9 Months Ended

Sep. 30, 2019

Payables And Accruals [Abstract]

Summary of Trade and Other Payables

	September 30, 2019		December 31, 2018
Trade payables	$	969,657	$	1,316,821
Payable to CCAA vendor	$	586,561	$	—
Accruals and other payables		4,921,207		4,446,401
	$	6,477,425	$	5,763,222

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Trade and other receivables

9 Months Ended

Sep. 30, 2019

Receivables [Abstract]

Trade and other receivables

5. Trade and other receivables:

	September 30, 2019			December 31, 2018
Trade receivables, gross	$	19,559,565		$	19,373,260
Other receivables		54,177			141,141
Less:  allowance for doubtful accounts		(43,206	)		(46,598	)
	$	19,570,536		$	19,467,803
Anesthesia segment – trade receivables, gross		18,641,926			18,199,847
Product segment – trade receivables, gross		917,639			1,173,413
	$	19,559,565		$	19,373,260

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Equity investment

9 Months Ended

Sep. 30, 2019

Investments Debt And Equity Securities [Abstract]

Equity investment

9. Equity investment:

In October 2018, the Company entered into an agreement with Digestive Health Specialists (“DHS”), located in North Carolina, to assist DHS in the development and management of a monitored anesthesia care program.  Under the terms of the agreement, CRH is a 15% equity owner in the anesthesia business, Triad Sedation Associates LLC, and receives compensation for its billing and collection services.  Under the terms of the limited liability company agreement, CRH has the right, at CRH’s option, to acquire an additional 36% interest in the anesthesia business at a future date, but no sooner than November 2019.  The Company assessed and concluded that, as TSA is an LLC, equity method accounting is required under ASC 970-323. To fund working capital needs, each equity owner of TSA has provided a working capital loan, repayable within 12 months.  All working capital loans have been repaid as at September 30, 2019.

The option agreement was determined to be an executory contract and both the equity interest and option agreement were determined to have only nominal value upon grant and as at September 30, 2019.

The following table provides a summary of the Company’s investment in TSA as at September 30, 2019:

	Nine months ended September 30, 2019
Beginning balance	$	—
Share of net income		416,584
Member distributions		(92,400	)
Ending balance	$	324,184

9. Equity investment (continued):

The following table summarizes unaudited financial information for our equity method investee.

Balance sheet:	September 30, 2019
Current assets	$	2,176,239
Non-current assets		—
Total assets	$	2,176,239
Current liabilities	$	319,972
Non-current liabilities		—
Shareholders’ equity		1,856,267
Total liabilities and shareholders’ equity	$	2,176,239

Results of operations	Nine months ended September 30, 2019
Anesthesia revenue	$	3,811,965
Anesthesia services expense		1,339,698
Net income	$	2,472,267

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Asset acquisitions - Summary of Asset Acquisitions (Detail) - Anesthesia Services [Member] - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Business Acquisition [Line Items]
Consideration	$ 9,320,462	$ 27,509,811
Anesthesia Care Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired	2019-01
Consideration	$ 5,355,028
South Metro Anesthesia Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired	2019-05
Consideration	$ 1,791,431
Crystal River Anesthesia Associates, LLC [Member]
Business Acquisition [Line Items]
Date Acquired	2019-07
Consideration	$ 2,174,003
Shreveport Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired		2018-03
Consideration		$ 9,495,184
Western Ohio Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired		2018-05
Consideration		$ 6,483,698
Lake Washington Anesthesia LLC [Member]
Business Acquisition [Line Items]
Date Acquired		2018-07
Consideration		$ 5,041,939
Lake Erie Sedation Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired		2018-09
Consideration		$ 4,233,115
Tennessee Valley Anesthesia Associates LLC [Member]
Business Acquisition [Line Items]
Date Acquired		2018-12
Consideration		$ 2,255,875

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Financial instruments (Tables)

9 Months Ended

Sep. 30, 2019

Investments All Other Investments [Abstract]

Schedule of Fair Value of Financial Instruments

Liabilities	September 30, 2019		Level 1		Level 2		Level 3
Earn-out obligation	$	973,094	$	—	$	—	$	973,094
Total	$	973,094	$	—	$	—	$	973,094

Liabilities	December 31, 2018		Level 1		Level 2		Level 3
Earn-out obligation	$	2,920,583	$	—	$	—	$	2,920,583
Total	$	2,920,583	$	—	$	—	$	2,920,583

Summary of Reconciliation of Level 3 Fair Values

	Earn-out obligation
Balance as at January 1, 2019	$	2,920,583
Payment		(4,795,822	)
Recorded in finance expense:
Accretion expense		77,095
Fair value adjustment		2,771,238
Balance as at September 30, 2019	$	973,094

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Equity investment (Tables)

9 Months Ended

Sep. 30, 2019

Investments Debt And Equity Securities [Abstract]

Summary of Company's investment in TSA

	Nine months ended September 30, 2019
Beginning balance	$	—
Share of net income		416,584
Member distributions		(92,400	)
Ending balance	$	324,184

Condensed Financial Statements

The following table summarizes unaudited financial information for our equity method investee.

Balance sheet:	September 30, 2019
Current assets	$	2,176,239
Non-current assets		—
Total assets	$	2,176,239
Current liabilities	$	319,972
Non-current liabilities		—
Shareholders’ equity		1,856,267
Total liabilities and shareholders’ equity	$	2,176,239

Results of operations	Nine months ended September 30, 2019
Anesthesia revenue	$	3,811,965
Anesthesia services expense		1,339,698
Net income	$	2,472,267

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Equity investment - Additional Information (Detail) - Triad Sedation Associates LLC [Member] - Anesthesia Services Segment [Member]	12 Months Ended
	Dec. 31, 2018	Oct. 31, 2018
Percentage of equity interest		15.00%
Options To Acquire Additional Interest Percent	36.00%

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Notes Payable - Additional Information (Detail) - Scotia Facility [Member] - USD ($)	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Notes Payable [Line Items]
Credit facility drawn amount	$ 68,375,000	$ 70,250,000
Borrowings, adjustment to interest rate basis	2.25%
Borrowing interest rate	LIBOR plus 2.25%
Credit facility maturity date	Aug. 15, 2020

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Share Capital - Summary of Status of Plan for Other Equity Instruments (Detail) - shares	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Time Based Share Units [Member]
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Beginning balance	1,045,250
Issued	1,137,500	171,500
Exercised	(150,250)
Forfeited	(115,000)
Expired
Ending balance	1,917,500
Vested
Expected to vest	1,917,500
Performance Based Share Units [Member]
Compensation Related Costs Share Based Payments Disclosure [Line Items]
Beginning balance	1,500,000
Issued		150,000
Exercised
Forfeited	(550,000)
Expired
Ending balance	950,000
Vested
Expected to vest	550,000