Exhibit 10.1
CREDIT AGREEMENT
dated as of
July 27, 2011
among
IRIS INTERNATIONAL, INC.,
as Borrower,
The Lenders Party Hereto,
as the Lenders,
and
JPMORGAN CHASE BANK, N.A.,
as Administrative Agent
J.P. MORGAN SECURITIES INC.,
as Sole Bookrunner and Sole Lead Arranger

 

 

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS

              Page  
 
       
ARTICLE I Definitions
    1  
 
       
SECTION 1.01 Defined Terms
    1  
SECTION 1.02 Classification of Loans and Borrowings
    14  
SECTION 1.03 Terms Generally
    15  
SECTION 1.04 Accounting Terms; GAAP
    15  
 
       
ARTICLE II The Credits
    15  
 
       
SECTION 2.01 Commitments
    15  
SECTION 2.02 Loans and Borrowings
    15  
SECTION 2.03 Requests for Revolving Borrowings
    16  
SECTION 2.04 [Intentionally Omitted]
    16  
SECTION 2.05 Swingline Loans
    16  
SECTION 2.06 Letters of Credit
    17  
SECTION 2.07 Funding of Borrowings
    21  
SECTION 2.08 Interest Elections
    21  
SECTION 2.09 Termination and Reduction of Commitments
    22  
SECTION 2.10 Repayment of Loans; Evidence of Debt
    23  
SECTION 2.11 Prepayment of Loans
    23  
SECTION 2.12 Fees
    24  
SECTION 2.13 Interest
    24  
SECTION 2.14 Alternate Rate of Interest
    25  
SECTION 2.15 Increased Costs
    25  
SECTION 2.16 Break Funding Payments
    26  
SECTION 2.17 Taxes
    27  
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs;
Authorization to Debit Bank Account
    28  
SECTION 2.19 Mitigation Obligations; Replacement of Lenders
    29  
SECTION 2.20 Defaulting Lenders
    30  
 
       
ARTICLE III Representations and Warranties
    31  
 
       
SECTION 3.01 Organization; Powers
    31  
SECTION 3.02 Authorization; Enforceability
    32  
SECTION 3.03 Governmental Approvals; No Conflicts
    32  
SECTION 3.04 Financial Condition; No Material Adverse Change
    32  
SECTION 3.05 Properties
    32  
SECTION 3.06 Litigation and Environmental Matters
    32  
SECTION 3.07 Compliance with Laws and Agreements
    33  
SECTION 3.08 Investment Company Status
    33  
SECTION 3.09 Taxes
    33  
SECTION 3.10 ERISA
    33  
SECTION 3.11 Disclosure
    33  
 
       
ARTICLE IV Conditions
    34  
 
       
SECTION 4.01 Effective Date
    34  
SECTION 4.02 Each Credit Event
    36  

 

-i-

--------------------------------------------------------------------------------

 

TABLE OF CONTENTS
(continued)

              Page  
 
       
ARTICLE V Affirmative Covenants
    36  
 
       
SECTION 5.01 Financial Statements; Ratings Change and Other Information
    36  
SECTION 5.02 Notices of Material Events
    37  
SECTION 5.03 Existence; Conduct of Business
    37  
SECTION 5.04 Payment of Obligations
    38  
SECTION 5.05 Maintenance of Properties; Insurance
    38  
SECTION 5.06 Books and Records; Inspection Rights
    38  
SECTION 5.07 Compliance with Laws
    38  
SECTION 5.08 Use of Proceeds and Letters of Credit
    38  
SECTION 5.09 Casualty and Condemnation
    38  
SECTION 5.10 Depository Banks
    38  
SECTION 5.11 Additional Collateral; Further Assurances
    39  
SECTION 5.12 Post-Closing Covenants
    40  
 
       
ARTICLE VI Negative Covenants
    40  
 
       
SECTION 6.01 Indebtedness
    40  
SECTION 6.02 Liens
    41  
SECTION 6.03 Fundamental Changes
    41  
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions
    42  
SECTION 6.05 Swap Agreements
    42  
SECTION 6.06 Restricted Payments
    42  
SECTION 6.07 Transactions with Affiliates
    43  
SECTION 6.08 Restrictive Agreements
    43  
SECTION 6.09 Government Regulation
    43  
SECTION 6.10 Asset Sales
    43  
SECTION 6.11 Sale and Leaseback Transactions
    44  
SECTION 6.12 Amendment of Material Documents
    44  
SECTION 6.13 Change of Auditors
    44  
SECTION 6.14 Capital Expenditures
    44  
SECTION 6.15 Financial Covenant — Minimum EBITDA
    44  
 
       
ARTICLE VII Events of Default
    45  
ARTICLE VIII The Administrative Agent
    47  
ARTICLE IX Miscellaneous
    49  
 
       
SECTION 9.01 Notices
    49  
SECTION 9.02 Waivers; Amendments
    50  
SECTION 9.03 Expenses; Indemnity; Damage Waiver
    50  
SECTION 9.04 Successors and Assigns
    51  
SECTION 9.05 Survival
    54  
SECTION 9.06 Counterparts; Integration; Effectiveness
    54  
SECTION 9.07 Severability
    55  
SECTION 9.08 Right of Setoff
    55  
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process
    55  
SECTION 9.10 WAIVER OF JURY TRIAL
    56  
SECTION 9.11 Headings
    56  
SECTION 9.12 Disclosure
    56  
SECTION 9.13 Interest Rate Limitation
    56  
SECTION 9.14 USA PATRIOT Act
    56  
SECTION 9.15 JUDICIAL REFERENCE
    57  

 

-ii-

--------------------------------------------------------------------------------

 

SCHEDULES:

         
Schedule 2.01 — Commitments
       
Schedule 3.06 — Disclosed Matters
       
Schedule 6.01 — Existing Indebtedness
       
Schedule 6.02 — Existing Liens
       
Schedule 6.08 — Existing Restrictions
       

EXHIBITS:

         
Exhibit A — Form of Assignment and Assumption
       
Exhibit B-1 — Form of Opinion of Borrower’s Counsel
       
Exhibit B-2 — Form of Opinion of In-House Counsel of Borrower
       
Exhibit C — Form of Joinder Agreement
       

 

 

--------------------------------------------------------------------------------

 

CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of July 27, 2011, among IRIS INTERNATIONAL, INC., a
Delaware corporation, the LENDERS party hereto, and JPMORGAN CHASE BANK, N.A.,
as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01 Defined Terms. As used in this Agreement, the following terms have
the meanings specified below:
“ABR”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are bearing interest at a rate
determined by reference to the Alternate Base Rate.
“Acquisition” means (a) the purchase or other acquisition by a Person or its
subsidiaries of all or substantially all of the assets of (or any division or
business line of) any other Person, or (b) the purchase or other acquisition
(whether by means of a merger, consolidation, or otherwise) by a Person or its
subsidiaries of all or substantially all of the Equity Interests of any other
Person.
“Adjusted LIBO Rate” means, with respect to any Eurodollar Borrowing for any
Interest Period, 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.
“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder and together with its successors
and assigns in such capacity.
“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 Person specified.
“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest
of (a) the Prime Rate in effect on such day, (b) the Federal Funds Effective
Rate in effect on such day plus 1/2 of 1%, and (c) 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) plus 2.50%. Any change in the Alternate Base
Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

 

 

--------------------------------------------------------------------------------

 

“Applicable Percentage” means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender’s Commitment; provided that in the
case of Section 2.20 when a Defaulting Lender shall exist, “Applicable
Percentage” shall mean the percentage of the total Commitments (disregarding any
Defaulting Lender’s Commitment) represented by such Lender’s Commitment. If the
Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments and to any Lender’s status as a Defaulting Lender at the time of
determination.
“Applicable Rate” means, with respect to (a) any ABR Loan, negative one and a
half (-1.50) percentage points, or (b) any Eurodollar Revolving Loan, one and a
quarter (1.25) percentage points.
“Applicable Swingline Cap” means (a) if the Lenders’ Commitments are less than
$20,000,000, an amount equal to the aggregate amount of such Commitments, and
(b) if the Lenders’ Commitments are greater than or equal to $20,000,000, an
amount equal to $20,000,000.
“Approved Fund” has the meaning assigned to such term in Section 9.04.
“Assessment Rate” means, for any day, the annual assessment rate in effect on
such day that is payable by a member of the Bank Insurance Fund classified as
“well-capitalized” and within supervisory subgroup “B” (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of
such insurance to the Lenders.
“Assignment and Assumption” means an assignment and assumption 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 approved by the Administrative Agent.
“Availability” means, at any time, an amount equal to (a) the Commitments minus
(b) the Revolving Exposure of all Revolving Lenders, all as determined by the
Administrative Agent in its Permitted Discretion.
“Availability Period” means the period from and including the Effective Date to
but excluding the earlier of the Maturity Date and the date of termination of
the Commitments.
“Board” means the Board of Governors of the Federal Reserve System of the United
States of America.
“Borrower” means IRIS INTERNATIONAL, INC., a Delaware corporation.
“Borrowing” means portions of the 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.
“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.
“Business Day” means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City 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 dealings in dollar deposits in the London interbank market.

 

2

--------------------------------------------------------------------------------

 

“Capital Expenditures” means, with respect to any Person for any period, the
aggregate of all expenditures by such Person and its subsidiaries during such
period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed.
“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 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.
“Change in Control” means (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any one Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
Permitted Holders, 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 of a majority of the seats (other than
vacant seats) on the board of directors of the Borrower by Persons who were
neither (i) nominated by the board of directors of the Borrower nor
(ii) appointed by directors so nominated; or (c) the acquisition of direct or
indirect Control of the Borrower by any Person or group other than Permitted
Holders.
“Change in Law” means (a) the adoption of any law, rule or regulation after the
date of this Agreement, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank (or
by any applicable lending office of such Lender or by such Lender’s or the
Issuing Bank’s holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline
Loans.
“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Collateral” means all assets and interests in assets and proceeds thereof now
owned or hereafter acquired by Borrower or its Subsidiaries in or upon which a
Lien is granted by such Person in favor of Administrative Agent or the Lenders
under any of the Loan Documents.
“Commitment” means, with respect to each Lender, the commitment 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 amount of such Lender’s Revolving Credit Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.09 and
(b) reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender’s Commitment
is set forth on Schedule 2.01, or in the Assignment and Assumption pursuant to
which such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders’ Commitments is $15,000,000.
“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.

 

3

--------------------------------------------------------------------------------

 

“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.
“Defaulting Lender” means any Lender, as determined by the Administrative Agent,
that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit or Swingline Loans within three Business Days of the date
required to be funded by it hereunder, (b) notified the Borrower, the
Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or has made a public statement to the effect that it does
not intend to comply with its funding obligations under this Agreement or under
other agreements in which it commits to extend credit, (c) failed, within three
Business Days after request by the Administrative Agent, to confirm that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans, (d) otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within
three Business Days of the date when due, unless the subject of a good faith
dispute, or (e) (i) become or is insolvent or has a parent company that has
become or is insolvent or (ii) become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee, administrator, assignee
for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or custodian, appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that
has become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or custodian appointed for it, or has taken any action in furtherance
of, or indicating its consent to, approval of or acquiescence in any such
proceeding or appointment.
“Disclosed Matters” means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
“dollars” or “$” refers to lawful money of the United States of America.
“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) Interest 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 and non-recurring charges for
such period (to the extent that such charges are in an amount that is
satisfactory to Administrative Agent in its discretion), (v) non-cash
compensation expense resulting from payment of compensation to directors,
officers, and employees for such period in the form of Equity Interests of
Borrower, and (vi) any other non-cash charges for such period (but excluding any
non-cash charge in respect of an item that was included in Net Income in a prior
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 (to the extent that such gains are in an amount that is satisfactory to
Administrative Agent in its discretion) and any non-cash items of income for
such period, all calculated for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
“Effective Date” means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
“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 the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.

 

4

--------------------------------------------------------------------------------

 

“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) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) 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 such
equity interest.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time.
“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, 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 existence with
respect to any Plan of an “accumulated funding deficiency” (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) 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 of its ERISA Affiliates 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 of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal 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 of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
“Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest
determined by reference to the Adjusted LIBO Rate.
“Event of Default” has the meaning assigned to such term in Article VII.

 

5

--------------------------------------------------------------------------------

 

“Excluded Taxes” means, with respect to the Administrative Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.19(b)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender’s failure to comply with Section 2.17(e), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to Section 2.17(a).
“Excluded Subsidiaries” means Advanced Digital Imaging Research, LLC and Poly
U/A Systems, Inc.
“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published for
any day that is a Business Day, the average (rounded upwards, if necessary, to
the next 1/100 of 1%) of the quotations for such day for such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by it.
“Financial Officer” means the chief financial officer, principal accounting
officer, treasurer or controller of the Borrower.
“Foreign Lender” means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
“GAAP” means generally accepted accounting principles in the United States of
America.
“Governmental Authority” means the government of the United States of America,
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.
“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.
“Guarantors” means each domestic Subsidiary of Borrower, and “Guarantor” means
any one of them.

 

6

--------------------------------------------------------------------------------

 

“Guaranties” means those certain guaranties executed and delivered by each
Guarantor in favor of Administrative Agent, for the benefit of the Lenders, in
form and substance reasonably satisfactory to Administrative Agent.
“Hazardous Materials” means all explosive or radioactive substances or wastes
and all hazardous or toxic substances, wastes or other pollutants, including
petroleum or petroleum distillates, asbestos or asbestos containing materials,
polychlorinated biphenyls, radon gas, infectious or medical wastes and all other
substances or wastes of any nature regulated pursuant to any Environmental Law.
“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 and (j) all obligations, contingent or
otherwise, of such Person in respect of bankers’ acceptances. The Indebtedness
of any Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person’s ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
“Indemnified Taxes” means Taxes other than Excluded Taxes.
“Interest Election Request” means a request by the Borrower to convert or
continue a Revolving Borrowing in accordance with Section 2.08.
“Interest Expense” means, with reference to any period, total interest expense
(including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries for such period with respect to all outstanding Indebtedness of
the Borrower and its Subsidiaries (including all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers’
acceptance financing 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 on a consolidated basis for the Borrower and its
Subsidiaries for such period in accordance with GAAP.
“Interest Payment Date” means (a) with respect to any Loan on which interest is
accruing based on the Prime Rate, the 5th day of each month and the Maturity
Date, (b) with respect to any Eurodollar Loan, the last day of the 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 (c) the Maturity Date.

 

7

--------------------------------------------------------------------------------

 

“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or four 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) 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.
“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.06(i). The Issuing Bank may, in its discretion, arrange for one or
more Letters of Credit to be issued by Affiliates of the Issuing Bank, in which
case the term “Issuing Bank” shall include any such Affiliate with respect to
Letters of Credit issued by such Affiliate.
“JPM” means JPMorgan Chase Bank, N.A., together with its successors and assigns.
“LC Disbursement” means a payment made by the Issuing Bank pursuant to a Letter
of Credit.
“LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of
all outstanding Letters of Credit at such time plus (b) the aggregate amount of
all LC Disbursements that have not yet been reimbursed by or on behalf of the
Borrower at such time. The LC Exposure of any Lender at any time shall be its
Applicable Percentage of the total LC Exposure at such time.
“Lenders” means the Persons listed on Schedule 2.01 and any other Person that
shall have become a party hereto pursuant to an Assignment and Assumption, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Assumption, and together with their respective successors and permitted
assigns. Unless the context otherwise requires, the term “Lenders” includes the
Swingline Lender.
“Letter of Credit” means any letter of credit issued pursuant to this Agreement.
“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest
Period, the rate appearing on Reuters Screen LIBOR01 (or on any successor or
substitute page of such Service, or any successor to or substitute for such
service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits in the
approximate amount of principal outstanding on such date and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
“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.

 

8

--------------------------------------------------------------------------------

 

“Loan Documents” means this Agreement, any control agreements, any fee letters,
the Guaranties, the Letters of Credit, any mortgages, the Security Agreements,
the Guaranties, any note or notes executed by Borrower in connection with this
Agreement and payable to Administrative Agent or any Lender, any letter of
credit application entered into by Borrower in connection with this Agreement,
any agreement or other document evidencing any Rate Management Transactions, and
any other agreement entered into, now or in the future, by Borrower, any
Guarantor, or any of their respective Subsidiaries and Administrative Agent
and/or any Lender or any of their respective Affiliates, whether in connection
with this Agreement or otherwise.
“Loan Parties” means the Borrower, the Borrower’s domestic Subsidiaries and any
other Person who becomes a party to this Agreement pursuant to a Joinder
Agreement and their successors and assigns.
“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.
“Material Adverse Effect” means a material adverse effect on (a) the business,
assets, operations or condition, financial or otherwise, of the Borrower and the
Subsidiaries taken as a whole, (b) the ability of the Borrower to perform any of
its obligations under any of the Loan Documents or (c) the rights of or benefits
available to the Lenders under any of the Loan Documents.
“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 Borrower and its Subsidiaries in an aggregate principal amount
exceeding $1,000,000. For purposes of determining Material Indebtedness, the
“principal amount” of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.
“Maturity Date” means July 31, 2013.
“Moody’s” means Moody’s Investors Service, Inc.
“Multiemployer Plan” means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
“Net Income” means, for any period, the consolidated net income (or loss) of the
Borrower and its Subsidiaries, determined 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 the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary 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.

 

9

--------------------------------------------------------------------------------

 

“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 and similar payments, net of (b) the sum of (i) all reasonable 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 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
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by a Financial Officer).
“Other Taxes” means any and all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to, this Agreement.
“Participant” has the meaning set forth in Section 9.04.
“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 so long as:
(a) no Default or Event of Default shall have occurred and be continuing or
would result from the consummation of the proposed Acquisition and the proposed
Acquisition is consensual,
(b) no Indebtedness will be incurred, assumed, or would exist with respect to
Borrower or its Subsidiaries as a result of such Acquisition, other than
Indebtedness permitted under clause (f) of Section 6.01 and no Liens will be
incurred, assumed, or would exist with respect to the assets of Borrower or its
Subsidiaries as a result or such Acquisition other than Permitted Liens,
(c) Borrower has provided Administrative Agent with written confirmation,
supported by reasonably detailed calculations, that on a pro forma basis
(including pro forma adjustments arising out of events which are directly
attributable to such proposed Acquisition, are factually supportable, and are
expected to have a continuing impact, in each case, determined as if the
combination had been accomplished at the beginning of the relevant period, to
the extent that such eliminations and inclusions are mutually and reasonably
agreed upon by Borrower and Administrative Agent) created by adding the
historical combined financial statements of Borrower (including the combined
financial statements of any other Person or assets that were the subject of a
prior Permitted Acquisition during the relevant period) to the historical
consolidated financial statements of the Person to be acquired (or the
historical financial statements related to the assets to be acquired) pursuant
to the proposed Acquisition, Borrower and its Subsidiaries would have been in
compliance with the financial covenant in Section 6.15 of this Agreement for the
4 fiscal quarter period ended immediately prior to the proposed date of
consummation of such proposed Acquisition,
(d) Borrower has provided Administrative Agent with written notice of the
proposed Acquisition at least 15 Business Days prior to the anticipated closing
date of the proposed Acquisition and, not later than 5 Business Days prior to
the anticipated closing date of the proposed Acquisition, copies of the
acquisition agreement and other material documents relative to the proposed
Acquisition, which agreement and documents must be reasonably acceptable to
Administrative Agent,

 

10

--------------------------------------------------------------------------------

 

(e) the assets being acquired (other than a de minimis amount of assets in
relation to Borrower’s and its Subsidiaries’ total assets), or the Person whose
stock is being acquired, are useful in or engaged in, as applicable, the
business of Borrower and its Subsidiaries or a business reasonably related
thereto,
(f) the subject assets or Equity Interests, as applicable, are being acquired
directly by a Borrower or one of its Subsidiaries that is a Loan Party, and, in
connection therewith, Borrower or the applicable Loan Party shall have complied
with Section 5.11 of this Agreement and, in the case of an acquisition of Equity
Interests, Borrower or the applicable Loan Party shall have demonstrated to
Administrative Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such
new Loan Parties, and
(g) the purchase consideration payable in cash or Permitted Investments in
respect of all Permitted Acquisitions (including the proposed Acquisition and
including deferred payment obligations) shall not exceed $10,000,000 in the
aggregate in any twelve month period.
“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 overdue by more than 30 days or are 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; and
(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;
provided that the term “Permitted Encumbrances” shall not include any Lien
securing Indebtedness.
“Permitted Holders” means Brown Capital Management, Gamco Investors, Inc., and
Blackrock, Inc.
“Permitted Investments” means:
(a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;

 

11

--------------------------------------------------------------------------------

 

(b) investments in commercial paper maturing within 270 days from the date of
acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s 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 United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;
(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 $5,000,000,000.
“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, 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.
“Prime Rate” means the rate of interest per annum publicly announced from time
to time by JPM as its prime rate. The Prime Rate is a variable rate and each
change in the Prime Rate is effective from and including the date the change is
announced as being effective. The Prime Rate is a reference rate and may not be
JPM’s lowest rate.
“Rate Management Transaction” means (a) any transaction (including an agreement
with respect thereto) now existing or hereafter entered into between the
Borrower and JPM and/or its Affiliates which relate to a Swap Agreement, or
(b) any type of transaction that is similar to a transaction referred to in
clause (a) above that is currently, or in the future becomes, recurrently
entered into in the financial markets and which is a forward, swap, future,
option or other derivative on one or more rates, currencies, commodities, equity
securities or other equity instruments, debt securities or other debt
instruments, economic indices or measures of economic risk or value, or other
benchmarks against which payments or deliveries are to be made, or any
combination of the foregoing transactions.
“Register” has the meaning set forth in Section 9.04.
“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the respective directors, officers, employees, agents and
advisors of such Person and such Person’s Affiliates.
“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures
and unused Commitments representing at least 50.1% of the sum of the total
Revolving Credit Exposures and unused Commitments at such time.

 

12

--------------------------------------------------------------------------------

 

“Requirement of Law” means, as to any Person, the certificate of incorporation
and by-laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a court
or other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
“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, repurchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests in the Borrower or any option, warrant
or other right to acquire any such Equity Interests in the Borrower.
“Revolving Credit Exposure” means, with respect to any Lender at any time, the
sum of the outstanding principal amount of such Lender’s Revolving Loans and its
LC Exposure and Swingline Exposure at such time.
“Revolving Loan” means a Loan made pursuant to Section 2.03.
“S&P” means Standard & Poor’s.
“Security Agreements” means those certain security agreements in form and
substance reasonably satisfactory to Administrative Agent, executed and
delivered by Borrower and the Guarantors to Administrative Agent.
“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 percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the 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 of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
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 such Regulation D 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.
“Subordinated Indebtedness” of a Person means any Indebtedness of such Person
the payment of which is subordinated to payment of any and all obligations of
the Borrower under this Agreement and the other Loan Documents to the written
satisfaction of the Administrative Agent.
“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 or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent; provided, however, in no
event shall an Excluded Subsidiary constitute a subsidiary of Borrower.

 

13

--------------------------------------------------------------------------------

 

“Subsidiary” means any subsidiary of the Borrower; provided, however, in no
event shall an Excluded Subsidiary constitute a Subsidiary of Borrower.
“Swap Agreement” means any agreement with respect to any rate swap, swap option,
basis swap, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, currency swap,
cross-currency rate swap, currency option, credit swap, credit default swap,
credit default option, total return swap, other swap, forward rate transaction,
forward, future, foreign exchange transaction, cap, floor, collar, credit
protection transaction, credit spread, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale of a
security, commodity or other financial instrument or interest (including an
option with respect to any of these transactions), 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.
“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender
at any time shall be its Applicable Percentage of the total Swingline Exposure
at such time.
“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.
“Swingline Loan” means a Loan made pursuant to Section 2.05.
“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, determined on a
consolidated basis in accordance with GAAP.
“Transactions” means the execution, delivery and performance by the Borrower of
this Agreement, the borrowing of Loans, the use of the proceeds thereof and the
issuance of Letters of Credit hereunder.
“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 Alternate Base Rate.
“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.
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”).

 

14

--------------------------------------------------------------------------------

 

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 “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,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person’s successors and
assigns, (c) 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, (d) 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 and (e) 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.
SECTION 1.04 Accounting Terms; GAAP. 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 the
Borrower notifies the Administrative Agent that the Borrower requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (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 change 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 change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein,
each Lender agrees to make Revolving Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in (a) such Lender’s Revolving Credit Exposure exceeding such Lender’s
Commitment or (b) the total Revolving Credit Exposures exceeding the total
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 Revolving Loan shall be made as part
of a Borrowing consisting of Revolving Loans made by the Lenders ratably in
accordance with their respective 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 Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender’s failure to make Loans
as required.
(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Swingline Loan shall be an ABR 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; 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.

 

15

--------------------------------------------------------------------------------

 

(c) At the commencement of each Interest Period for any Eurodollar Revolving
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $500,000. 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 3 Eurodollar Revolving Borrowings
outstanding at any given time.
(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 Maturity
Date.
SECTION 2.03 Requests for Revolving Borrowings. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
Los Angeles time, three Business Days before the date of the proposed Borrowing
or (b) in the case of an ABR Borrowing, not later than 11:00 a.m., Los Angeles
time, one Business Day before the date of the proposed Borrowing; provided that
any such notice of an ABR Revolving Borrowing to finance the reimbursement of an
LC Disbursement as contemplated by Section 2.06(e) may be given not later than
10:00 a.m., Los Angeles time, on the date of the proposed Borrowing. Each such
telephonic Borrowing Request shall be irrevocable and shall be confirmed
promptly by hand delivery or facsimile to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by
the Borrower. Each such telephonic and written Borrowing Request shall specify
the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(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”; and
(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Revolving Borrowing, then
the Borrower shall be deemed to have selected an Interest Period of one 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 [Intentionally Omitted].
SECTION 2.05 Swingline Loans. (a) Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from
time to time during the Availability Period, in an aggregate principal amount at
any time outstanding that will not result in (i) the aggregate principal amount
of outstanding Swingline Loans exceeding the Applicable Swingline Cap or
(ii) the total Revolving Credit Exposures exceeding the total Commitments;
provided that the 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.

 

16

--------------------------------------------------------------------------------

 

(b) To request a Swingline Loan, the Borrower shall notify the Administrative
Agent of such request by telephone (confirmed by facsimile), not later than 9:00
a.m., Los Angeles time, on the day of a proposed Swingline Loan. Each such
notice 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 by means of a credit to the general deposit account of the Borrower
with the Swingline Lender (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) by 12:00 noon, Los Angeles time, on the
requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the Administrative Agent
not later than 10:00 a.m., Los Angeles time, on any Business Day require the
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 Lenders will participate. Promptly upon receipt of
such notice, the Administrative Agent will give notice thereof to each Lender,
specifying in such notice such Lender’s Applicable Percentage of such Swingline
Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon
receipt of notice as provided above, 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 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 Commitments, and that each such payment shall be made by
the Borrower without any setoff, deduction, counterclaim, abatement, or
withholding whatsoever. Each 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 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 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.
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 for
its own account, 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. In the event of any inconsistency between the terms and conditions of
this Agreement and the terms and conditions of any form of letter of credit
application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms
and conditions of this Agreement shall control.

 

17

--------------------------------------------------------------------------------

 

(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 facsimile (or transmit by electronic communication, if arrangements for doing
so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) 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. The Borrower shall have executed the Issuing Bank’s master agreement
for the issuance of commercial Letters of Credit, and if requested by the
Issuing Bank, shall also submit a letter of credit application on the Issuing
Bank’s standard form in connection with any request for a Letter of Credit. 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 LC Exposure shall not exceed
$5,000,000 and (ii) the Revolving Credit Exposures shall not exceed the total
Commitments.
(c) Expiration Date. Each Letter of Credit shall expire 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, one year after such renewal or extension) and (ii) the date that is
five Business Days prior to the 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 Lenders, the Issuing Bank hereby grants
to each Lender, and each 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 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 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 Commitments, and
that each such payment shall be made by the Borrower without any setoff,
deduction, counterclaim, abatement, or withholding 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 12:00 noon, Los Angeles time, on the date that such LC Disbursement
is made, if the Borrower shall have received notice of such LC Disbursement
prior to 10:00 a.m., Los Angeles time, on such date, or, if such notice has not
been received by the Borrower prior to such time on such date, then not later
than 12:00 noon, Los Angeles time, on (i) the Business Day that the Borrower
receives such notice, if such notice is received prior to 10:00 a.m., Los
Angeles 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 not
received prior to such 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

 

18

--------------------------------------------------------------------------------

 

2.05 that such payment be financed with an ABR 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 ABR Revolving Borrowing or Swingline Loan. If the Borrower fails to
make such payment when due, the Administrative Agent shall notify each 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 Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, 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 Issuing Bank the amounts so received by it from the 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 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 Lender
pursuant to this paragraph to reimburse the Issuing Bank for any LC Disbursement
(other than the funding of ABR 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 or this Agreement, or any term or provision therein, (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) 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. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor 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
(as opposed to consequential damages, claims in respect of which are hereby
waived by the Borrower to the extent permitted by applicable law) 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 wilful 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.

 

19

--------------------------------------------------------------------------------

 

(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 facsimile) 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 Lenders with respect to any such LC Disbursement.
(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 ABR Revolving Loans; provided that, if the
Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph
(e) of this Section, then Section 2.13(d) 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 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. 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 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 issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(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, Lenders with LC Exposure representing greater than 50.1%
of the total 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
Lenders, an amount in cash equal to the LC Exposure as of such date plus any
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. Such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations of the Borrower under this Agreement. The Administrative Agent shall
have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. 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 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 Lenders with LC Exposure
representing greater than 50.1% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower under this Agreement. If the Borrower is
required to provide an amount of cash collateral hereunder as a result of the
occurrence of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrower within three Business Days after
all Events of Default have been cured or waived.

 

20

--------------------------------------------------------------------------------

 

SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 9:00 a.m., Los Angeles time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders; 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 amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR 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 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 Federal Funds Effective Rate and a rate
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 ABR Loans. If such Lender pays such amount to the Administrative
Agent, then such amount shall constitute such Lender’s Loan included in such
Borrowing.
SECTION 2.08 Interest Elections. (a) Each Revolving Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Revolving 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 Revolving 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 by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a
Revolving Borrowing of the Type resulting from such election to be made on the
effective date of such election. Each such telephonic Interest Election Request
shall be irrevocable and shall be confirmed promptly by hand delivery or
facsimile to the Administrative Agent of a written Interest Election Request in
a form approved by the Administrative Agent and signed by the Borrower.

 

21

--------------------------------------------------------------------------------

 

(c) Each telephonic and written Interest Election Request 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 an ABR 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 details thereof and of such
Lender’s portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request with
respect to a Eurodollar Revolving 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
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Revolving Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Revolving Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.
SECTION 2.09 Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce, the
Commitments; provided that (i) each reduction of the Commitments shall be in an
amount that is an integral multiple of $500,000 and not less than $500,000 and
(ii) the Borrower shall not terminate or reduce the Commitments if, after giving
effect to any concurrent prepayment of the Loans in accordance with
Section 2.11, the Revolving Credit Exposures would exceed the total Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three 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 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 Commitments shall be permanent.
Each reduction of the Commitments shall be made ratably among the Lenders in
accordance with their respective Commitments.

 

22

--------------------------------------------------------------------------------

 

SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan on the
Maturity Date, and (ii) to the Swingline Lender the then unpaid principal amount
of each Swingline Loan on the earlier of the Maturity Date and the first date
after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made;
provided that on each date that a Revolving Borrowing is made, the Borrower
shall repay all Swingline Loans then 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.
(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, (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 the order of 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 payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
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 (b) of this Section.
(b) The Borrower shall notify the Administrative Agent (and, in the case of
prepayment of a Swingline Loan, the Swingline Lender) by telephone (confirmed by
facsimile) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Revolving Borrowing, not later than 11:00 a.m., Los Angeles time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Los Angeles
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, Los Angeles 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 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 relating to a Revolving Borrowing, 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 Revolving Borrowing of the same Type
as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.13.

 

23

--------------------------------------------------------------------------------

 

SECTION 2.12 Fees.
(a) [Intentionally Omitted].
(b) The Borrower agrees to pay (i) to the Administrative Agent for the account
of each Lender, in advance on the date when each Letter of Credit is issued and
thereafter on the first day of each fiscal quarter, 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 average 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 Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank, concurrently with each issuance, amendment, renewal or extension
of any Letter of Credit, a fronting fee, equal to (A) $500 for each issuance of
a new Letter of Credit and (B) $250 for each amendment, renewal, or extension of
any Letter of Credit. Any other fees payable to the Issuing Bank pursuant to
this paragraph shall be payable within 10 days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days 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 facility fees and
participation fees, to the Lenders. Fees paid shall not be refundable under any
circumstances.
SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing (including
each Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest in the
case of a Eurodollar Revolving Loan, at the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Rate.
(c) [Intentionally Omitted].
(d) Notwithstanding the foregoing, during the occurrence and continuance of an
Event of 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 3% 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 3% plus the rate applicable to such fee or other obligation as
provided hereunder.

 

24

--------------------------------------------------------------------------------

 

(e) Accrued interest on each Loan shall be payable in arrears on each Interest
Payment Date for such Loan and, in the case of Revolving Loans, upon termination
of the Commitments; provided that (i) interest accrued pursuant to paragraph
(d) 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 an ABR 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 Revolving 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.
(f) Any principal or interest which is not paid within 10 days after its due
date (whether as stated, by acceleration or otherwise) shall be subject to a
late payment charge of five percent (5.00%) of the total payment due, in
addition to the payment of interest, up to the maximum amount of One Thousand
Five Hundred and 00/100 Dollars ($1,500.00) per late charge. Borrower agrees to
pay and stipulates that five percent (5.00%) of the total payment due is a
reasonable amount for a late payment charge. Borrower shall pay the late payment
charge upon demand by the Administrative Agent or, if billed, within the time
specified.
(g) All interest hereunder shall be computed on the basis of a year of 360 days,
except that interest computed by reference to the Alternate Base Rate at times
when the Alternate Base Rate is based on the Prime Rate shall be computed on the
basis of a year of 360 days, 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 Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14 Alternate Rate of Interest. If prior to the commencement of any
Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or maintaining
their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or facsimile 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, (i) 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 (ii) any request for a new Eurodollar Borrowing shall be made as a Borrowing
based on the Prime Rate.
SECTION 2.15 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar
requirement 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

 

25

--------------------------------------------------------------------------------

 

(ii) impose on any Lender or the Issuing Bank or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by such Lender
or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then 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,
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 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 or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit 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), 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 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),
(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 2.11(b) 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, 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

 

26

--------------------------------------------------------------------------------

 

any, of (i) the amount of interest which would have accrued on the principal
amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that
would have been applicable to such 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 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 10 days after receipt thereof.
SECTION 2.17 Taxes. (a) Any and all payments by or on account of any obligation
of the Borrower hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, Lender or Issuing Bank (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender and the
Issuing Bank, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such
Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other 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 the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower 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.
(e) Any Foreign Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate.

 

27

--------------------------------------------------------------------------------

 

(f) If the Administrative Agent or a Lender determines, in its sole discretion,
that it has received a refund of any Taxes or Other Taxes as to which it has
been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.17, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other
than any interest paid by the relevant Governmental Authority with respect to
such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Administrative Agent or such Lender in the event
the Administrative Agent or such Lender is required to repay such refund to such
Governmental Authority. This Section shall not be construed to require the
Administrative Agent or any Lender to make available its tax returns (or any
other information relating to its taxes which it deems confidential) to the
Borrower or any other Person.
SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs;
Authorization to Debit Bank Account. (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 Section 2.15,
2.16 or 2.17, or otherwise) prior to 12:00 noon, Los Angeles time, on the date
when due, in immediately available funds, without set-off 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 300 South Grand
Avenue, Floor 4, Los Angeles, CA 90071, 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
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. 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) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of
its Revolving Loans or participations in LC Disbursements or Swingline Loans
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans and participations in LC Disbursements
and Swingline Loans and accrued interest thereon than the proportion received by
any other Lender, then the Lender receiving such greater proportion shall
purchase (for cash at face value) participations in the Revolving Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving 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

 

28

--------------------------------------------------------------------------------

 

Lender as consideration for the assignment of or sale of a participation in any
of its Loans or participations in LC Disbursements to 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 set-off 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.
(d) 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
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then
the Administrative Agent may, in its discretion and notwithstanding any contrary
provision hereof, (i) apply any amounts thereafter received by the
Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such
Lender’s obligations under such Sections until all such unsatisfied obligations
are fully paid, and/or (ii) hold any such amounts in a segregated account as
cash collateral for, and application to, any future funding obligations of such
Lender under such Sections; in the case of each of (i) and (ii) above, in any
order as determined by the Administrative Agent in its discretion.
(f) To effectuate any payment due under this Agreement or under any other Loan
Document, the Borrower hereby authorizes the Administrative Agent to initiate
debit entries to Account Number 935435428 at JPMorgan Chase Bank, N.A. and to
debit the same to such account. This authorization to initiate debit entries
shall remain in full force and effect until the Administrative Agent has
received written notification of its termination in such time and in such manner
as to afford the Administrative Agent a reasonable opportunity to act on it. The
Borrower represents that the Borrower is and will be the owner of all funds in
such account. The Borrower acknowledges: (i) that such debit entries may cause
an overdraft of such account which may result in the Administrative Agent’s
refusal to honor items drawn on such account until adequate deposits are made to
such account; (ii) that the Administrative Agent is under no duty or obligation
to initiate any debit entry for any purpose; and (iii) that if a debit is not
made because the above-referenced account does not have a sufficient available
balance, or otherwise, the payment may be late or past due.
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 additional amount 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 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 pursuant to Section 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.

 

29

--------------------------------------------------------------------------------

 

(b) If any Lender requests compensation under Section 2.15, or if the Borrower
is required to pay any additional amount 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 and obligations under this Agreement 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 if a Commitment is being
assigned, the Issuing Bank), 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.
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 Commitment of such
Defaulting Lender pursuant to Section 2.12(a);
(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall
not be included in determining whether all Lenders or the Required Lenders have
taken or may take any action hereunder (including any consent to any amendment
or waiver pursuant to Section 9.02), provided that any waiver, amendment or
modification requiring the consent of all Lenders or each affected Lender which
affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender;
(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes
a Defaulting Lender then:
(i) all or any part of such Swingline Exposure and LC Exposure shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Applicable Percentages but only to the extent (x) the sum of all non-Defaulting
Lenders’ Revolving Credit Exposures plus such Defaulting Lender’s Swingline
Exposure and LC Exposure does not exceed the total of all non-Defaulting
Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are
satisfied at such time; and
(ii) if the reallocation described in clause (i) above cannot, or can only
partially, be effected, the Borrower shall within one Business Day following
notice by the Administrative Agent (x) first, prepay such Swingline Exposure and
(y) second, cash collateralize such Defaulting Lender’s LC 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;

 

30

--------------------------------------------------------------------------------

 

(iii) if the Borrower cash collateralizes any portion of such Defaulting
Lender’s LC Exposure pursuant to Section 2.20(c), 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
Section 2.20(c), then the fees payable to the Lenders pursuant to
Section 2.12(a) and Section 2.12(b) shall be adjusted in accordance with such
non-Defaulting Lenders’ Applicable Percentages; or
(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 2.20(c), then, without prejudice to any rights
or remedies of the Issuing Bank or any Lender hereunder, all facility fees that
otherwise would have been payable to such Defaulting Lender (solely with respect
to the portion of such Defaulting Lender’s Commitment that was utilized by such
LC Exposure) and 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 such LC Exposure is cash collateralized and/or reallocated; and
(d) so long as any 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 or increase any Letter of Credit, unless it is
satisfied that the related exposure will be 100% covered by the Commitments of
the non-Defaulting Lenders and/or cash collateral will be provided by the
Borrower in accordance with Section 2.20(c), and participating interests in any
such newly issued or increased Letter of Credit or newly made Swingline Loan
shall be allocated among non-Defaulting Lenders in a manner consistent with
Section 2.20(c)(i) (and Defaulting Lenders shall not participate therein).
In the event that the Administrative Agent, the Borrower, the Issuing Bank and
the Swingline Lender each 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 Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders (other than Swingline
Loans) as the Administrative shall determine may be necessary in order for such
Lender to hold such Loans in accordance with its Applicable Percentage.
ARTICLE III
Representations and Warranties
The Borrower represents and warrants to the Lenders that:
SECTION 3.01 Organization; Powers. Each of the Borrower and its Subsidiaries is
duly organized, 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.

 

31

--------------------------------------------------------------------------------

 

SECTION 3.02 Authorization; Enforceability. The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, 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, (b) will not violate any applicable law or
regulation or the charter, by-laws or other organizational documents of the
Borrower or any of its Subsidiaries or any order of any Governmental Authority,
except to the extent that any such violation could not reasonably be expected to
result in a Material Adverse Effect, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries (other than the Liens granted by
Borrower or any of its Subsidiaries to Administrative Agent under the Loan
Documents).
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, 2010, reported on by BDO Seidman, LLP,
independent public accountants, and (ii) as of and for the fiscal quarter and
the portion of the fiscal year ended March 31, 2011, certified by its chief
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, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) Since September 30, 2010, there has been no material adverse change in the
business, assets, operations or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05 Properties. (a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
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 the Borrower, threatened against or
affecting the Borrower or any of its Subsidiaries (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) or
(ii) that involve this Agreement or the Transactions.

 

32

--------------------------------------------------------------------------------

 

(b) Except for the Disclosed Matters 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, neither the Borrower nor any of its
Subsidiaries (i) 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, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental
Liability or (iv) 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.
SECTION 3.07 Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08 Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION 3.09 Taxes. Each of the Borrower and its Subsidiaries 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 Taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, has set aside on
its books adequate reserves.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to
occur. 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 by more than $250,000 the fair market
value of the assets of such Plan, and the present value of all accumulated
benefit obligations of all underfunded Plans (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
by more than $250,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.11 Disclosure. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or delivered hereunder (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 Borrower represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time.

 

33

--------------------------------------------------------------------------------

 

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 either (A) a counterpart
of this Agreement signed on behalf of such party or (B) written evidence
satisfactory to the Administrative Agent (which may include facsimile or
electronic transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement. 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.
(b) Legal Opinion. The Administrative Agent shall have received favorable
written opinion (addressed to the Administrative Agent and the Lenders and dated
the Effective Date) of (i) Stubbs, Alderton & Markiles, LLP, counsel for the
Borrower, substantially in the form of Exhibit B-1, and (ii) Borrower’s in-house
counsel, substantially in the form of Exhibit B-2, and covering such other
matters relating to the Borrower, this Agreement or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests such
counsel to deliver such opinion.
(c) Financial Statements and Projections. The Lenders shall have received
(i) audited consolidated financial statements of the Borrower and its
Subsidiaries for the 2008 and 2009 fiscal years, and (ii) unaudited interim
consolidated financial statements of the Borrower and its Subsidiaries for each
fiscal month and 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 Borrower and its
Subsidiaries, as reflected in the financial statements or projections delivered
to the Administrative Agent.
(d) 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 or
Assistant Secretary, 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 Financial Officers and any other
officers of such Loan Party authorized to sign the Loan Documents to which it is
a party, and (C) contain appropriate attachments, including the certificate or
articles of incorporation or organization 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 by-laws or operating, management or partnership
agreement, and (ii) a good standing certificate for each Loan Party from its
jurisdiction of organization.
(e) Other Documents and Certificates. The Administrative Agent shall have
received such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any other
legal matters relating to the Borrower, this Agreement or the Transactions, all
in form and substance satisfactory to the Administrative Agent and its counsel.

 

34

--------------------------------------------------------------------------------

 

(f) No Default Certificate. The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice
President or a Financial Officer of the Borrower, confirming compliance with the
conditions set forth in paragraphs (a) and (b) of Section 4.02.
(g) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where assets of the Loan Parties
are located, and such search shall reveal no liens on any of the assets of the
Loan Parties except for liens permitted by Section 6.02 or discharged on or
prior to the Effective Date pursuant to a pay-off letter or other documentation
satisfactory to the Administrative Agent.
(h) Pay-Off Letter. The Administrative Agent shall have received satisfactory
pay-off letters executed and delivered by California Bank & Trust confirming
that all Liens upon any of the property of the Loan Parties constituting
Collateral will be terminated on the Effective Date.
(i) 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.
(j) Solvency. The Administrative Agent shall have received a solvency
certificate from a Financial Officer of the Borrower certifying as to the
solvency of the Loan Parties, taken as a whole, on a consolidated basis
immediately after giving effect to the initial extensions of credit under this
Agreement and the payment of all fees and expenses required to be paid by the
Borrower on the Effective Date under this Agreement or the other Loan Documents.
(k) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of capital stock
pledged pursuant to the Security Agreement, together with an undated stock power
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 the Security Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the
pledgor thereof.
(l) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Loan Documents or under law
or reasonably requested by the Administrative Agent to be filed, registered or
recorded in order to create in favor of the Administrative Agent, for the
benefit of the Lenders, a perfected Lien on the Collateral described therein,
prior and superior in right to any other Person (other than with respect to
Liens expressly permitted by Section 6.02), shall be in proper form for filing,
registration or recordation.
(m) Insurance. The Administrative Agent shall have received evidence of
insurance coverage in form, scope, and substance reasonably satisfactory to the
Administrative Agent and otherwise in compliance with the terms of the Security
Agreement.
(n) Tax Withholding. The Administrative Agent shall have received a properly
completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.
(o) Fees. The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to the
extent invoiced, reimbursement or payment of all out-of-pocket expenses required
to be reimbursed or paid by the Borrower hereunder.

 

35

--------------------------------------------------------------------------------

 

(p) 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 and the Lenders 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 3:00 p.m., Los Angeles time, on July 27, 2011 (and, in the event
such conditions are not so satisfied or waived, the Commitments shall terminate
at such time).
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 Borrower set forth in this
Agreement shall be true and correct 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.
(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.
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) and
(b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and
interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 5.01 Financial Statements; Ratings Change and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of each fiscal year of the Borrower, its
audited consolidated balance sheet 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,
all reported on by BDO Seidman, LLP or other independent public accountants of
recognized national standing (without a “going concern” or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;

 

36

--------------------------------------------------------------------------------

 

(b) within 60 days after the end of each of the first three fiscal quarters of
each fiscal year of the Borrower, its consolidated balance sheet 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 the 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 one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated 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 of the Borrower (i) 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, (ii) setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.15 and 6.16, and (iii) 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) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Borrower or
any Subsidiary with the Securities and Exchange Commission, or any Governmental
Authority succeeding to any or all of the functions of said Commission, or with
any national securities exchange, or distributed by the Borrower to its
shareholders generally, as the case may be; and
(e) promptly following any request therefor, such other information regarding
the operations, business affairs and financial condition of the Borrower or any
Subsidiary, or compliance with the terms of this Agreement, as the
Administrative Agent or any Lender may reasonably request.
SECTION 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before
any arbitrator or Governmental Authority against or affecting the Borrower or
any Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(c) 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 Borrower and its Subsidiaries in an aggregate amount exceeding
$250,000; and
(d) 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. The Borrower will, and will cause
each of its Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

 

37

--------------------------------------------------------------------------------

 

SECTION 5.04 Payment of Obligations. The Borrower will, and will cause each of
its Subsidiaries to, pay its obligations, including Tax liabilities, before the
same shall become delinquent or in default, except where (a) (i) the validity or
amount thereof is being contested in good faith by appropriate proceedings, and
(ii) the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP or (b) (i) the amount
thereof does not exceed $50,000 in the aggregate, and (ii) such obligations,
including Tax liabilities, are paid within 30 days after the date when Borrower
obtains notice or knowledge that such obligations, including Tax liabilities,
were not paid when due.
SECTION 5.05 Maintenance of Properties; Insurance. The Borrower will, and will
cause each of its Subsidiaries to, (a) keep and maintain all property material
to the conduct of its business in good working order and condition, ordinary
wear and tear excepted, and (b) maintain, with financially sound and reputable
insurance companies, insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.
SECTION 5.06 Books and Records; Inspection Rights. The Borrower will, and will
cause each of its Subsidiaries to, 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. The Borrower will, and will cause
each of its Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties, to examine and make extracts from its books and records,
and to discuss its affairs, finances and condition with its officers and
independent accountants, all at such reasonable times and as often as reasonably
requested.
SECTION 5.07 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any
Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans
will be used only to finance the working capital and general corporate purposes
of the Borrower and to pay fees and expenses associated with the Transactions.
No part of the proceeds of any Loan will be used, whether directly or
indirectly, for any purpose that entails a violation of any of the Regulations
of the Board, including Regulations T, U and X. Letters of Credit will be issued
only to support the working capital and general corporate purposes of the
Borrower.
SECTION 5.09 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 and the Loan Documents.
SECTION 5.10 Depository Banks. The Borrower and each Subsidiary will maintain
JPM as its principal depository bank with respect to locations of the Borrower
and any Subsidiary in either (a) a state within the United States of America, or
the District of Columbia, and (b) other locations, to the extent that JPM has
offices or branches located within a reasonable distance of such location, in
each case, including for the maintenance of operating, administrative, cash
management, collection activity, and other deposit accounts for the conduct of
its business.

 

38

--------------------------------------------------------------------------------

 

SECTION 5.11 Additional Collateral; Further Assurances.
(a) Subject to applicable law, the Borrower and each Subsidiary that is a Loan
Party shall cause each of its domestic Subsidiaries formed or acquired after the
date of this Agreement in accordance with the terms of this Agreement to become
a Loan Party by executing the Joinder Agreement set forth as Exhibit C hereto
(the “Joinder Agreement”) within thirty (30) days after that date when any such
domestic Subsidiary is acquired or formed. Upon execution and delivery thereof,
each such Person (i) shall automatically become a 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
Lenders, in any property of such Loan Party which constitutes Collateral,
including any parcel of real property located in the U.S. owned by any Loan
Party.
(b) The Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of
the issued and outstanding Equity Interests of each of its domestic Subsidiaries
and (ii) 65% 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 to be subject at all times (or in the
case of Equity Interests that are acquired after the date hereof, within thirty
(30) days after the date of such acquisition and at all times thereafter) to a
first priority, perfected Lien in favor of the Administrative Agent 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, mortgages, deeds of trust
and other documents and such other actions or deliveries of the type required by
Section 4.01, as applicable), which may be required by 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 Loan Documents, all at the expense of the Loan Parties.
(d) If any material assets (including any real property or improvements thereto
or any interest therein) are acquired by the Borrower or any Subsidiary that is
a Loan Party after the Effective Date (other than assets constituting Collateral
under the Security Agreements that become subject to the Lien in favor of the
Administrative Agent upon acquisition thereof), the Borrower will notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Indebtedness evidenced by this
Agreement and the other Loan Documents and will take, and cause the Subsidiary
Loan Parties 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 (c) of this Section, all at the expense of the Loan
Parties.
(e) Upon request by Administrative Agent, the Borrower will deliver to the
Administrative Agent control agreements with respect to all deposit accounts and
securities accounts of the Borrower and its Subsidiaries (other than any deposit
accounts and securities accounts that Administrative Agent may exclude in its
sole discretion), in each case, in form, scope, and substance reasonably
satisfactory the Administrative Agent, which have been duly executed and
delivered by each party thereto.

 

39

--------------------------------------------------------------------------------

 

SECTION 5.12 Post-Closing Covenants.
(a) Within 30 days after the Effective Date, the Borrower will furnish to the
Administrative Agent certificates of insurance, together with the endorsements
thereto, as are required by Section 5.05 of this Agreement and paragraph 5 in
the section titled “Representations, Warranties and Covenants” of each Security
Agreement, in form, scope, and substance reasonably satisfactory the
Administrative Agent.
(b) Within 180 days after the Effective Date, the Borrower shall have caused
each of the Excluded Subsidiaries to have been dissolved and provided
Administrative Agent with such evidence thereof as Administrative Agent may
reasonably require.
(c) Within 60 days after the Effective Date, the Borrower will furnish to the
Administrative Agent the certificates representing the shares of capital stock
of each foreign Subsidiary pledged pursuant to the Security Agreement, together
with an undated stock power for each such certificate executed in blank by a
duly authorized officer of the pledge thereof, in form satisfactory to
Administrative Agent.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Lenders that:
SECTION 6.01 Indebtedness. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01, but
not any extensions, renewals or replacements of any such Indebtedness;
(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the
Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
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 that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within
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) shall not exceed $1,000,000 at any time outstanding;

 

40

--------------------------------------------------------------------------------

 

(f) 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 (h) shall not exceed $250,000 at any time
outstanding; and
(g) other unsecured Indebtedness in an aggregate principal amount not exceeding
$1,000,000 at any time outstanding.
SECTION 6.02 Liens. The Borrower will not, and will not 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 receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) 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;
(c) any Lien existing on any property or asset prior to the acquisition thereof
by the Borrower or any Subsidiary or existing on any property or asset of any
Person that becomes a Subsidiary after the date hereof prior to the time such
Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary 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 Subsidiary, as the case may be; and
(d) Liens on fixed or capital assets acquired, constructed or improved by the
Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary.
SECTION 6.03 Fundamental Changes. (a) The Borrower will not, and will not 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 sell, transfer, lease
or otherwise dispose of (in one transaction or in a series of transactions) all
or any substantial part of its assets, or all or substantially all of the stock
of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Subsidiary may merge into the Borrower in a transaction in
which the Borrower is the surviving corporation, (ii) any Subsidiary may merge
into any Subsidiary in a transaction in which the surviving entity is a
Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose
of its assets to the Borrower or to another Subsidiary and (iv) any Subsidiary
may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; 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.

 

41

--------------------------------------------------------------------------------

 

(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. The
Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, 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, Guarantee any obligations of, 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, except:
(a) Permitted Investments;
(b) Permitted Acquisitions;
(c) investments by the Borrower existing on the date hereof in the capital stock
of its Subsidiaries;
(d) loans or advances made by the Borrower to any Subsidiary and made by any
Subsidiary to the Borrower or any other Subsidiary;
(e) Guarantees constituting Indebtedness permitted by Section 6.01;
(f) 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 of
the Subsidiaries (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; and
(g) investments constituting deposits described in clauses (c) and (d) of the
definition of the term “Permitted Encumbrances”;
SECTION 6.05 Swap Agreements. The Borrower will not, and will not permit any of
its Subsidiaries 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 fixed to floating
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 6.06 Restricted Payments. The Borrower will not, and will not permit any
of its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (a) the Borrower may declare and pay
dividends with respect to its Equity Interests payable solely in additional
shares of its common stock, (b) Subsidiaries may declare and pay dividends
ratably with respect to their Equity Interests, (c) 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 and (d) the Borrower may repurchase its outstanding common Equity
Interests in an amount not to exceed $5,000,000 in the aggregate in any fiscal
year.

 

42

--------------------------------------------------------------------------------

 

SECTION 6.07 Transactions with Affiliates. The Borrower will not, and will not
permit any of its Subsidiaries 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) in the ordinary course of business at prices and on terms
and conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm’s-length basis from unrelated third parties,
(b) transactions between or among the Borrower and its wholly owned Subsidiaries
not involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.06.
SECTION 6.08 Restrictive Agreements. The Borrower will not, and will not permit
any of its Subsidiaries 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 the Borrower 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 shares of its capital stock 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; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by law or by this Agreement, (ii) the
foregoing shall not apply to restrictions and conditions existing on the date
hereof identified on Schedule 6.08 (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) 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,
(iv) 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 (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 6.09 Government Regulation. Borrower shall not (a) be or become subject
at any time to any law, regulation, or list of any government agency (including,
without limitation, the U.S. Office of Foreign Asset Control list) that
prohibits or limits any Lender from making any advance or extension of credit to
Borrower or from otherwise conducting business with Borrower, or (b) fail to
provide documentary and other evidence of Borrower’s identity as may be
requested by any Lender at any time to enable such Lender to verify Borrower’s
identity or to comply with any applicable law or regulation, including, without
limitation, Section 326 of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the “Act”), 31 U.S.C. Section 5318.
SECTION 6.10 Asset Sales. The Borrower will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset,
including any Equity Interest owned by it, nor will the Borrower permit any
Subsidiary to issue any additional Equity Interest in such Subsidiary (other
than to the Borrower or another Subsidiary in compliance with Section 6.04),
except:
(a) sales, transfers and 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;
(b) sales, transfers and dispositions to the Borrower or any Subsidiary,
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Loan Party shall be made in compliance with Section 6.07;

 

43

--------------------------------------------------------------------------------

 

(c) sales, transfers and dispositions of accounts receivable in connection with
the compromise, settlement or collection thereof;
(d) sales, transfers and dispositions of Permitted Investments and other
investments permitted by clauses (i) and (k) of Section 6.04;
(e) sale and leaseback transactions permitted by Section 6.11;
(f) 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
(g) sales, transfers and other dispositions of assets (other than Equity
Interests in a Subsidiary unless all Equity Interests in such Subsidiary are
sold) that are not permitted by any other paragraph of this Section, provided
that the aggregate fair market value of all assets sold, transferred or
otherwise disposed of in reliance upon this paragraph (g) shall not exceed
$500,000 during any fiscal year of the Borrower;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than those permitted by paragraphs (b) and (f) above) shall be
made for fair value and for at least 75% cash consideration.
SECTION 6.11 Sale and Leaseback Transactions. The Borrower will not, and will
not permit any of its Subsidiaries 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, except for any such sale of any fixed or capital assets by the
Borrower or any Subsidiary that is made for cash consideration in an amount not
less than the fair value of such fixed or capital asset and is consummated
within 90 days after the Borrower or such Subsidiary acquires or completes the
construction of such fixed or capital asset.
SECTION 6.12 Amendment of Material Documents. Borrower will not, and will not
permit any of its Subsidiaries to, amend, modify or waive any of its rights
under (a) agreement relating to any Subordinated Indebtedness, or (b) its
certificate of incorporation, by-laws, operating, management or partnership
agreement or other organizational documents, unless Administrative Agent has
consented to such amendment, modification or waiver with respect to its
certificate of incorporation, by-laws, operating, management or partnership
agreement or other organizational documents.
SECTION 6.13 Change of Auditors. Borrower will not, and will not permit any of
its Subsidiaries to, without the consent of Administrative Agent, change their
independent auditor from the independent auditor maintained by Borrower and its
Subsidiaries on the Effective Date.
SECTION 6.14 Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, incur or make any Capital Expenditures during any fiscal year in
an amount exceeding $10,000,000.
SECTION 6.15 Financial Covenant — Minimum EBITDA. The Borrower shall have, at
the end of each fiscal quarter for each of Borrower’s fiscal years, (i) EBITDA
for the 12-month period then ended less (ii) any Restricted Payments declared or
made by Borrower during such 12-month period of not less than (x) with respect
to the fiscal quarter ending September 30, 2011, $8,000,000, and (y) with
respect to the fiscal quarter ending December 31, 2011 and each fiscal quarter
ending thereafter, $10,000,000.

 

44

--------------------------------------------------------------------------------

 

ARTICLE VII
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, when and as the same shall become due and payable
and such failure continues for a period of 3 Business Days;
(c) any representation or warranty made or deemed made by or on behalf of the
Borrower 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 incorrect in any material
respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition or
agreement contained in this Agreement or in any other Loan Document;
(e) the Borrower or any Subsidiary shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Indebtedness,
(i) in the case of Material Indebtedness, when and as the same shall become due
and payable, after giving effect to any applicable cure period, or (ii) in the
case of other Indebtedness, within 90 days after the date when and as the same
shall become due and payable, after giving effect to any applicable cure period;
(f) any event or condition occurs that results in any 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
Indebtedness or any trustee or agent on its or their behalf to cause any
Indebtedness to become due, or to require the prepayment, repurchase, redemption
or defeasance thereof, prior to its scheduled maturity; provided that if such
event or condition relates to any Indebtedness that does not constitute Material
Indebtedness, the occurrence of such event or condition shall not constitute an
Event of Default pursuant to this clause (f) unless such event or condition is
not waived or cured within 90 days after the occurrence thereof; provided,
further, that this clause (f) 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;
(g) the occurrence or existence of any default, event of default or other
similar event or condition occurs with respect to any Rate Management
Transactions;

 

45

--------------------------------------------------------------------------------

 

(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower 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 the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing shall
be entered;
(i) the Borrower 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 the Borrower or any Subsidiary 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) the Borrower or any Subsidiary shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due;
(k) the Borrower or any Subsidiary shall, without the Administrative Agent’s
written consent: (i) liquidate or become dissolved, (ii) other than with respect
to a Permitted Acquisition, merge or consolidate with any other Person;
(iii) lease, sell or otherwise convey a material part of its assets of business
outside the ordinary course of its business, (iv) lease, purchase, or otherwise
acquire a material part of the assets of any other Person, except in the
ordinary course of its business, or (v) agree to do any of the foregoing;
provided however that any Subsidiary of Borrower may merge or consolidate with
any other Subsidiary of Borrower, or with Borrower so long as Borrower is the
surviving corporation.
(l) a change shall have occurred relating to: (i) the Property, financial
condition, business, assets, affairs, liabilities, or operations of Borrower or
any of its Subsidiaries, (ii) Borrower or any Guarantor’s ability to perform its
obligations under the Loan Documents, or (iii) the Collateral, that could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect;
(m) one or more judgments for the payment of money in excess of (i) $250,000
with respect to any individual event or (ii) $500,000 in the aggregate shall be
rendered against the Borrower, any Subsidiary or any combination thereof and the
same shall remain undischarged for a period of 15 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 the Borrower or any
Subsidiary to enforce any such judgment;
(n) 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 liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding (i) $250,000 in any year or (ii)
$250,000 for all periods;
(o) a Change in Control shall occur;
(p) any 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
such Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of the Guaranty to which it is a party, or any Guarantor shall deny
that it has any further liability under the Guaranty to which it is a party, or
shall give notice to such effect;

 

46

--------------------------------------------------------------------------------

 

(q) any Loan Document shall for any reason fail to create a valid and perfected
first priority security interest in any Collateral purported to be covered
thereby, except as permitted by the terms of any Loan Document, or any Loan
Document 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 any Loan
Document, or any Loan Party shall fail to comply with any of the terms or
provisions of any Loan Document;
(r) 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 based on any such 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); or
(s) any Loan Party is criminally indicted or convicted under any law that may
reasonably be expected to lead to a forfeiture of any property of such Loan
Party having a fair market value in excess of $250,000;
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 may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the 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, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (g) or
(h) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

 

47

--------------------------------------------------------------------------------

 

The Administrative Agent shall not have any duties or obligations except those
expressly set forth herein. Without limiting the generality of the foregoing,
(a) the Administrative Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Administrative Agent shall not have any duty to take any discretionary
action or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby that the Administrative Agent is required
to exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02), and (c) except as expressly set forth herein, 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 or
any of its Subsidiaries that is communicated to or obtained by the bank serving
as Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by it
with the consent or at the request of the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 9.02) or in the absence of its own gross negligence or
wilful misconduct. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, 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 this
Agreement, (ii) the contents of any certificate, report or other document
delivered hereunder or in connection herewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its
rights and powers 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 and all its duties and exercise its rights and powers through their
respective Related Parties. The exculpatory provisions of the preceding
paragraphs 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 in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as
provided in this paragraph, the Administrative Agent may resign at any time by
notifying the Lenders, the Issuing Bank and the Borrower. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Borrower, to appoint a successor. If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03 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 it was acting as Administrative
Agent.

 

48

--------------------------------------------------------------------------------

 

Each Lender acknowledges that it has, independently and without reliance upon
the Administrative Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information 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 related agreement or any
document furnished hereunder or thereunder.
ARTICLE IX
Miscellaneous
SECTION 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject 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 facsimile, as follows:
(i) if to the Borrower, to it at IRIS International, Inc., 9158 Eton Ave.,
Chatsworth, California, Attention of Chief Financial Officer, (Facsimile No.
(818) 349-0622);
(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott
(Facsimile No. (213) 536-2019), with a copy to Paul, Hastings, Janofsky & Walker
LLP, 515 South Flower Street, 25th Floor, Los Angeles, CA 90071, Attention of
Peter S. Burke, Esq. (Facsimile No. (213) 996-3338);
(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott
(Facsimile No. (213) 536-2019);
(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott
(Facsimile No. (213) 536-2019); and
(v) if to any other Lender, to it at its address (or facsimile number) set forth
in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be delivered
or furnished by electronic communications pursuant to procedures approved by the
Administrative Agent; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by the Administrative Agent and
the applicable Lender. The Administrative Agent or the Borrower may, in its
discretion, agree to accept notices and other communications to it hereunder by
electronic communications pursuant to procedures approved by it; provided that
approval of such procedures may be limited to particular notices or
communications.
(c) Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.

 

49

--------------------------------------------------------------------------------

 

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
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 are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision of this Agreement or consent to any departure by the
Borrower 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) Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement or agreements in writing entered into
by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; provided that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, or (v) change any of the provisions of this
Section or the definition of “Required Lenders” or any other provision hereof
specifying the number or percentage of Lenders required to waive, amend or
modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; provided further that no
such agreement shall amend, modify or otherwise affect the rights or duties of
the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank
or the Swingline Lender, as the case may be; provided further that no such
agreement shall amend, modify, or eliminate Section 2.20 without the prior
written consent of the Administrative Agent, the Swing Line Lender, the Issuing
Bank, and the Required Lenders.
SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay
(i) all 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 of the
credit facilities provided for herein, the preparation and administration of
this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be
consummated) to the extent that such expenses exceed $10,000 (it being
understood and agreed that (y) the Administrative Agent shall be responsible for
the first $10,000 of such expenses and (z) the Borrower shall be responsible for
any and all expenses that exceed $10,000), (ii) all 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) all 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 or protection of
its rights in connection with this Agreement, 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 incurred during any
workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.

 

50

--------------------------------------------------------------------------------

 

(b) The Borrower shall indemnify the Administrative Agent, the 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, 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 this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto of their respective obligations hereunder 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
the 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 the
Borrower or any of its Subsidiaries, or any Environmental Liability related in
any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, 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, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to be paid
by it to the Administrative Agent, the Issuing Bank or the Swingline Lender
under paragraph (a) or (b) of this Section, each Lender severally agrees to pay
to the Administrative Agent, the Issuing Bank or the Swingline Lender, as the
case may be, such Lender’s Applicable Percentage (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid amount; 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 the Administrative Agent, the Issuing Bank or the Swingline
Lender in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, exemplary, 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 or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly/not later than
30 days 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.

 

51

--------------------------------------------------------------------------------

 

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitment
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 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; and
(B) the Administrative Agent, provided that no consent of the Administrative
Agent shall be required for an assignment of any Commitment to an assignee that
is a Lender with a Commitment immediately prior to giving effect to such
assignment to a Lender, an Affiliate of a Lender or an Approved Fund; and
(C) the Issuing Bank.
(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 assignment of the entire remaining amount of the assigning Lender’s
Commitment or Loans of any Class, the amount of the 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 $5,000,000 unless 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,
provided that this clause shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500; 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 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.

 

52

--------------------------------------------------------------------------------

 

For the purposes of this Section 9.04(b), the term “Approved Fund” has the
following meaning:
“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.
(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 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 an 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 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 may 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 a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, 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(c), 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.

 

53

--------------------------------------------------------------------------------

 

(c) (i) Any Lender may, without the consent of the Borrower, the Administrative
Agent, the Issuing Bank or the Swingline Lender, sell participations to one or
more banks or other entities (a “Participant”) in all or a portion of such
Lender’s rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (C) 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. Subject to paragraph (c)(ii) of
this Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. 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(c) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 2.17 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.
(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 Borrower herein and in the certificates or other instruments
delivered in connection with or pursuant to this Agreement shall be considered
to have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement 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 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 Commitments or the termination
of this Agreement or any provision hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness. 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 and any
separate letter agreements with respect to fees payable to the Administrative
Agent 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. Delivery of an executed counterpart of a signature page
of this Agreement by facsimile shall be effective as delivery of a manually
executed counterpart of this Agreement.

 

54

--------------------------------------------------------------------------------

 

SECTION 9.07 Severability. Any provision of this Agreement 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 hereof; 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 and each of its 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 or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under
this Agreement held by such Lender, irrespective of whether or not such Lender
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender under this Section are in addition
to other rights and remedies (including other rights of setoff) which such
Lender may have.
SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process.
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of California.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself and
its property, to the nonexclusive jurisdiction of the Superior Court of the
State of California sitting in Los Angeles County and of the United States
District Court of the Central District of California, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, 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 be heard and determined in such
California State 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 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 against the Borrower or its properties in the courts of any
jurisdiction.
(c) The Borrower 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 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.
(d) 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 will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

55

--------------------------------------------------------------------------------

 

SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY 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 OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR 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 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 Disclosure. The Borrower agrees that the Administrative Agent may
provide any information or knowledge the Administrative Agent may have about the
Borrower or about any matter relating to this Agreement or the other Loan
Documents to JPMorgan Chase & Co., or any of its subsidiaries or Affiliates or
their respective successors and assigns, or to any one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it).
SECTION 9.13 Interest Rate Limitation. 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 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 Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
SECTION 9.14 USA PATRIOT Act.
(a) Each Lender that is subject to the requirements of the Act hereby notifies
the Borrower that pursuant to the requirements of the Act, it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow such Lender to identify the Borrower in accordance with the Act.
(b) The following notification is provided to Borrower pursuant to Section 326
of the Act, 31 U.S.C. Section 5318:
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the
government fight the funding of terrorism and money laundering activities,
federal law requires all financial institutions to obtain, verify, and record
information that identifies each person or entity that opens an account,
including any deposit account, treasury management account, loan, other
extension of credit, or other financial services product. What this means for
Borrower: When Borrower opens an account, if Borrower is an individual, each
Lender will ask for Borrower’s name, taxpayer identification number, residential
address, date of birth, and other information that will allow such Lender to
identify Borrower, and if Borrower is not an individual, such Lender will ask
for Borrower’s name, taxpayer identification number, business address, and other
information that will allow such Lender to identify Borrower. Each Lender may
also ask, if Borrower is an individual, to see Borrower’s driver’s license or
other identifying documents, and if Borrower is not an individual, to see
Borrower’s legal organizational documents or other identifying documents.

 

56

--------------------------------------------------------------------------------

 

SECTION 9.15 JUDICIAL REFERENCE. IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A
COURT OF THE STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST THE BORROWER, THE
ADMINISTRATIVE AGENT, OR ANY OF THE LENDERS IN CONNECTION WITH ANY CONTROVERSY,
DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN SECTION
9.10 IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE BORROWER, THE
ADMINISTRATIVE AGENT, AND EACH LENDER (BY THEIR ACCEPTANCE HEREOF) AGREE AS
FOLLOWS:
(a) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN CLAUSE (B) BELOW, ANY CLAIM
WILL BE DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE
PROVISIONS OF CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.2. THE
BORROWER, THE ADMINISTRATIVE AGENT, AND EACH LENDER INTEND THIS GENERAL
REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 638. EXCEPT AS OTHERWISE PROVIDED IN THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL
BE IN THE STATE OR FEDERAL COURT IN THE COUNTY OR DISTRICT WHERE VENUE IS
OTHERWISE APPROPRIATE UNDER APPLICABLE LAW.
(b) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE
PROCEEDING: (A) NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR
PERSONAL PROPERTY; (B) EXERCISE OF SELF-HELP REMEDIES (INCLUDING, WITHOUT
LIMITATION, SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D) TEMPORARY,
PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING, WITHOUT LIMITATION, WRITS OF
ATTACHMENT, WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY
INJUNCTIONS). THIS AGREEMENT DOES NOT LIMIT THE RIGHT OF THE BORROWER, THE
ADMINISTRATIVE AGENT, OR ANY LENDER TO EXERCISE OR OPPOSE ANY OF THE RIGHTS AND
REMEDIES DESCRIBED IN CLAUSES (A) — (D) AND ANY SUCH EXERCISE OR OPPOSITION DOES
NOT WAIVE THE RIGHT OF THE BORROWER, THE ADMINISTRATIVE AGENT, OR SUCH LENDER TO
A REFERENCE PROCEEDING PURSUANT TO THIS AGREEMENT.
(c) UPON THE WRITTEN REQUEST OF THE BORROWER, THE ADMINISTRATIVE AGENT, OR ANY
LENDER, THE BORROWER, THE ADMINISTRATIVE AGENT, AND THE LENDERS SHALL SELECT A
SINGLE REFEREE, WHO SHALL BE A RETIRED JUDGE OR JUSTICE. IF THE BORROWER, THE
ADMINISTRATIVE AGENT, AND THE LENDERS DO NOT AGREE UPON A REFEREE WITHIN TEN
(10) DAYS OF SUCH WRITTEN REQUEST, THEN, THE BORROWER, THE ADMINISTRATIVE AGENT,
OR ANY LENDER, MAY REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA
CODE OF CIVIL PROCEDURE SECTION 640(B).

 

57

--------------------------------------------------------------------------------

 

(d) ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL,
SHALL BE CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN THE BORROWER, THE
ADMINISTRATIVE AGENT, OR ANY LENDER SO REQUESTS, A COURT REPORTER WILL BE USED
AND THE REFEREE WILL BE PROVIDED A COURTESY COPY OF THE TRANSCRIPT. THE PARTY
MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY COSTS OF
THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES,
SHALL ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY
THE REFEREE.
(e) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE BORROWER,
THE ADMINISTRATIVE AGENT, AND THE LENDERS SHALL BE ENTITLED TO DISCOVERY, AND
THE REFEREE SHALL OVERSEE DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY,
AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE SAME MANNER AS ANY TRIAL COURT JUDGE
IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA. THE REFEREE SHALL APPLY THE
RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA
AND SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL
LAW. THE REFEREE SHALL BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF
AND RULE ON ANY MOTION WHICH WOULD BE AUTHORIZED IN A TRIAL, INCLUDING, WITHOUT
LIMITATION, MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY JUDGMENT. THE REFEREE SHALL
REPORT THE REFEREE’S DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS OF FACT
AND CONCLUSIONS OF LAW.
(f) THE BORROWER, THE ADMINISTRATIVE AGENT, AND THE LENDERS RECOGNIZE AND AGREE
THAT ALL CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL
BE DECIDED BY A REFEREE AND NOT BY A JURY.

 

58

--------------------------------------------------------------------------------

 

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

            IRIS INTERNATIONAL, INC., a Delaware corporation
      By:           Name:           Title:           JPMORGAN CHASE BANK, N.A.,
individually and as
Administrative Agent,
      By:           Name:           Title:        

[SIGNATURE PAGE TO CREDIT AGREEMENT]

 

 

--------------------------------------------------------------------------------

 

EXHIBIT A
ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the “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, 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, 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 any other
right 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]2]
 
       
3.
  Borrower(s):   IRIS INTERNATIONAL, INC., a Delaware corporation
 
       
4.
  Administrative Agent:   JPMorgan Chase Bank, N.A., as the administrative agent
under the Credit Agreement
 
       
5.
  Credit Agreement:   The $15,000,000 Credit Agreement, dated as of July 27,
2011, among IRIS INTERNATIONAL, INC., a Delaware corporation, the Lenders
parties thereto, and JPMorgan Chase Bank, N.A., as Administrative Agent

 

      2   Select as applicable.

 

 

--------------------------------------------------------------------------------

 

6.   Assigned Interest:

                              Aggregate Amount of     Amount of            
Commitment/Loans for     Commitment/Loans     Percentage Assigned of   Facility
Assigned3   all Lenders     Assigned     Commitment/Loans4  
 
  $       $         %  
 
  $       $         %  
 
  $       $         %  

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:           Title:              ASSIGNEE

[NAME OF ASSIGNEE]
      By:           Title:             

 

      3   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,” “Tranche A Commitment,” “Tranche B Commitment,” etc.)  
4   Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

 

2

--------------------------------------------------------------------------------

 

              [Consented to and]5 Accepted:    
 
            JPMORGAN CHASE BANK, N.A.,
as Administrative Agent    
 
           
By:
                     
 
  Name:        
 
  Title:  
 
   
 
     
 
   
 
            [Consented to:]6    
 
            [NAME OF RELEVANT PARTY]    
 
           
By:
                     
 
  Name:        
 
  Title:  
 
   
 
     
 
   

 

      5   To be added only if the consent of the Administrative Agent is
required by the terms of the Credit Agreement.   6   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.

 

3

--------------------------------------------------------------------------------

 

ANNEX 1
The $15,000,000 Credit Agreement, dated as of July 27, 2011, by and
among IRIS INTERNATIONAL, INC., a Delaware corporation, the Lenders parties
thereto,
and JPMorgan Chase Bank, N.A., as Administrative Agent
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 of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates 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 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 5.01 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 or any other Lender, and (v) if it is a Foreign Lender,
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, the Assignor or any other Lender,
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.

 

 

--------------------------------------------------------------------------------

 

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. Delivery of an
executed counterpart of a signature page of this Assignment and Assumption by
facsimile 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 California.

 

2

--------------------------------------------------------------------------------

 

EXHIBIT B-1
OPINION OF COUNSEL FOR THE BORROWER
[Effective Date]
JPMorgan Chase Bank, N.A.
300 South Grand Avenue, Floor 4
Los Angeles, California 90071
Attn: David Scott
Re: Iris International, Inc., a Delaware corporation
Gentlemen:
We have acted as special counsel to Iris International, Inc., a Delaware
corporation (the “Company”), Arista Molecular, Inc., a Delaware corporation
(“Arista”), Iris Global Network, Inc., a Delaware corporation (“Iris Global”),
Iris Molecular Diagnostics, Inc., a Delaware corporation (“Iris Molecular”), and
StatSpin, Inc., a Massachusetts corporation (“Statspin”; Statspin, together with
Arista, Iris Global, and Iris Molecular, each a “Guarantor” and collectively,
the “Guarantors”; the Company, together with the Guarantors, each a “Loan Party”
and collectively, the “Loan Parties”) in connection with the delivery of that
certain Credit Agreement, dated as of the date hereof (the “Agreement”), by and
among the Company, the lenders from time to time a party thereto (each a
“Lender” and collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, the “Administrative Agent”), and
certain related documents. This opinion letter is delivered pursuant to
Section 5.01(b) of the Agreement.
Capitalized terms are used herein as defined in the Agreement, unless otherwise
defined herein, and other terms that are defined in the Uniform Commercial Code
as in effect in the State of California (the “California UCC”) have the same
meanings when used herein, unless otherwise indicated in the context in which
such terms are so used.
In connection with this letter, we have examined executed originals or copies of
executed originals of each of the following documents, each of which is dated as
of the date hereof unless otherwise noted (collectively, the “Loan Documents”):
(a) the Agreement, (b) those certain Continuing Security Agreements between the
relevant Loan Parties and the Administrative Agent (each, a “Security Agreement”
and collectively, the “Security Agreements”); and (c) those certain Guarantees
from the Guarantors. We have also examined originals or copies of executed
originals of the Uniform Commercial Code financing statements listed hereto on
Schedule 2 (the “UCC Financing Statements”).

 

 

--------------------------------------------------------------------------------

 

In addition, we have examined the following documents (collectively, the “Due
Diligence Documents”): (i) the articles of incorporation and bylaws submitted
with the Secretaries Certificates delivered pursuant to Section 4.01(d) of the
Agreement (the “Formation Documents”), (ii) certificates of the State agencies
or officials set forth on Schedule 1 hereto (the “Good Standing Certificates”),
and (iii) certain Officer’s and Secretary’s Certificates of the Loan Parties
dated as of even date herewith certifying certain other factual matters (the
“Officers’ Reliance Certificates”).
We have examined originals or certified copies of such corporate records of the
Loan Parties and other certificates and documents of officials of the Loan
Parties, public officials and others and have made such investigation of
Included Laws (as defined below) as we have deemed appropriate for purposes of
this letter, except where a statement is qualified as to knowledge or awareness,
which is as specified below. As to various questions of fact relevant to this
letter, we have relied, without independent investigation, upon the Due
Diligence Documents and certificates of public officials, certificates of
officers of the Loan Parties and the representations and warranties of the Loan
Parties in the Loan Documents, all of which we assume to be true, correct and
complete. We have made no investigation or review of any matters or agreements
relating to the Loan Parties or any other Person other than as expressly
described herein. We wish to inform you that our knowledge is necessarily
limited due to the limited scope of our review. In addition, we have made no
inquiry of the Loan Parties or any other Person (including Governmental
Authorities) regarding, and no review of, any court dockets, judgments, orders,
decrees, franchises, licenses, certificates, permits or other public records
other than the Good Standing Certificates and the Officers’ Reliance
Certificates, and our “knowledge” of any such matters is accordingly limited.
We have assumed the genuineness of all signatures, other than signatures to the
Loan Documents made on behalf of the Loan Parties, the authenticity of all
documents submitted to us as originals and the conformity to authentic original
documents of all copies submitted to us as conformed, certified or reproduced
copies. We have also assumed the legal capacity of natural persons, the
corporate or other power and due authorization of each Person not a natural
person, other than the Loan Parties, to execute and deliver the Loan Documents
and to consummate the transactions contemplated by the Loan Documents, the due
execution and delivery of each Loan Document by all parties thereto, other than
the Loan Parties, and that each Loan Document constitutes the legal, valid and
binding obligation of each party thereto, other than the Loan Parties,
enforceable against such party in accordance with its terms.
Based upon the foregoing and subject to the assumptions, exceptions,
qualifications and limitations set forth hereinafter, we are of the opinion
that:

  1.   Each Loan Party (i) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation, and
(ii) has the requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as presently conducted.

 

 

--------------------------------------------------------------------------------

 

  2.   The Company has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Loan Documents to which it is a
party in accordance with the terms thereof. Each Guarantor has the requisite
corporate power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party in accordance with the terms
thereof. The execution and delivery of the Loan Documents by the Company and
each Guarantor, and the consummation by the Company and each Guarantor of the
transactions contemplated thereby have been duly authorized by all necessary
action and no further consent or authorization of the Company or any Guarantor
or their respective boards of directors or stockholders, or authorization,
approval, consent, or other order of, or filing with, or notice to or
registration with, any federal or state governmental authority or regulatory
body (including, without limitation, any self-regulatory organization) (each, a
“Filing”), is required to be obtained by the Company or any Guarantor to enter
into and perform its obligations under the Loan Documents except such Filings as
have been obtained or made. The Loan Documents to which the Company is a party
have been duly executed and delivered by the Company and constitute the legal,
valid and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms. Each of the Loan Documents to which any
Guarantor is a party have been duly executed and delivered by each such
Guarantor and constitute the legal, valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their
respective terms.

  3.   The execution, delivery and performance of the Loan Documents by the
Company and each Guarantor and the consummation by the Company and each
Guarantor of the transactions contemplated thereby does not and will not result
in a violation of (i) the certificate of incorporation or bylaws of the Company
or the certificate of incorporation or bylaws of such Guarantor or (ii) any
Included Law applicable to the Company or such Guarantor, and will not result in
the creation or imposition of any Lien on any asset of such Loan Party or such
Guarantor except as contemplated under the Loan Documents.

  4.   No Loan Party is, and after giving effect to the application of proceeds
of the Loans on the date hereof for purposes permitted by the Credit Agreement,
no Loan Party will be an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.

  5.   The making of all loans, advances and extensions of credit pursuant to
the Credit Agreement and the Loan Documents and the application of proceeds of
the advances thereunder do not violate Regulations T, U or X of the Board of
Governors of the Federal Reserve System.

  6.   Each Security Agreement creates valid security interests in the
Collateral (as defined in such Security Agreement) in favor of the
Administrative Agent for the benefit of the Administrative Agent and the Lenders
(as defined in the Security Agreement) to the extent that any Loan Party has
rights therein.

 

 

--------------------------------------------------------------------------------

 

  7.   The Financing Statements are in appropriate form for filing in the
jurisdictions listed on Schedule 3 attached hereto (assuming the uniform
commercial code in such jurisdictions is the same as the California UCC). The
offices in the jurisdictions indicated on Schedule 3 (the “Filing Offices”) are
the only offices in the relevant jurisdictions in which financing statements are
required to be filed in order to perfect by filing the security interests
granted to the Administrative Agent, for the benefit of the Administrative Agent
and the Lenders, in the Collateral consisting of personal property or fixtures
located in such jurisdictions to the extent that such security interests may be
perfected under Article 9 of the California UCC by filing a UCC financing
statement, naming the Secured Party as secured party. Accordingly, to the extent
that a security interest in the Collateral consisting of personal property or
fixtures may be perfected by the filing of a financing statement in such
jurisdictions, the security interest of the Administrative Agent in such
Collateral is perfected upon the filing of the Financing Statements in the
Filing Offices. No opinion is expressed herein regarding any financing statement
filed against Statspin.

  8.   Upon delivery to (and retention by) the Administrative Agent of the
certificates of capital stock along with stock powers executed in blank issued
by each Subsidiary of the Company referred to in the Security Agreements and
pledged pursuant to the Security Agreements (the “Pledged Interests”), the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, will have valid and perfected security interests in such Pledged
Interests. Assuming the Administrative Agent and the Lenders acquire their
interests in the Pledged Interests as protected purchasers under Section 8-303
of the California UCC, the Administrative Agent, for the benefit of the Lenders,
will acquire such security interests free of adverse claims (as such term is
defined in Section 8-102(a)(1) of the California UCC) of any other Person.

The opinions and other matters in this letter are qualified in their entirety
and subject to the following:

  A.   We express no opinion as to the laws of any jurisdiction other than the
Included Laws. We have made no special investigation or review of any published
constitutions, treaties, laws, rules or regulations or judicial or
administrative decisions (“Laws”), other than (i) the Federal statutory law of
the United States, (ii) the Delaware General Corporation Law and (iii) the Laws
of the State of California. For purposes of this opinion, the term “Included
Laws” means the items described in clauses (i), (ii) and (iii) of the preceding
sentence that California lawyers exercising customary diligence would reasonably
recognize as normally applicable to transactions of the type contemplated in the
Loan Documents. The term Included Laws specifically excludes (i) Laws of any
counties, cities, towns, municipalities and special political subdivisions and
any agencies thereof, (ii) intellectual property Law, antitrust Law and
environmental Law and (iii) Laws relating to land use, mining and mining
operations, zoning and building code issues, subdivision issues, taxes, except
with respect to the opinion contained in paragraph 5, Federal Reserve Board
margin regulation issues, customs and import and export issues and, except with
respect to the opinion contained in paragraph 4, the Investment Company Act of
1940.

  B.   This letter and the matters addressed herein are as of the date hereof
and we undertake no, and hereby disclaim any, obligation to advise you of any
change in any matter set forth herein, whether based on a change in the law, a
change in any fact relating to the Company or any other Person, or any other
circumstance. This opinion letter is limited to the matters expressly stated
herein and no opinions are to be inferred or may be implied beyond the opinions
expressly set forth herein.

 

 

--------------------------------------------------------------------------------

 

  C.   The opinions expressed in paragraph 1 herein solely with respect to the
“good standing” of the Company and each Guarantor are given solely on the basis
of the Good Standing Certificates and speak only as of the date indicated
therein rather than the date hereof, and are limited to the meaning ascribed to
such certificates by the applicable State agency and applicable Law.

  D.   We express no opinion with respect to (i) the power or authority of the
Lenders to make the loans pursuant to the Agreement, (ii) compliance by the
Lenders with any federal or state banking Law, rule, regulation or restriction,
or (iii) compliance by the Lenders with any federal or state Law, rule,
regulation or restriction which is or was required to be complied with by the
Lenders (as opposed to compliance therewith by the Company and the Guarantors)
in order to perfect the rights of the Lenders under the Loan Documents.

  E.   We express no opinion as to (i) the compliance of the transactions
contemplated by the Loan Documents with any regulations or governmental
requirements applicable to any party other than the Company and the Guarantors,
(ii) the financial condition or solvency of the Company or the Guarantors,
(iii) the ability (financial or otherwise) of the Company or the Guarantors or
any other party to meet their respective obligations under the Loan Documents,
(iv) the compliance of the Loan Documents or the transactions contemplated
thereby with, or the effect of any of the foregoing with respect to, the
antifraud provisions of the federal and state securities Laws, rules and
regulations, (v) the value of any security provided to secure the payment of
obligations contemplated by the Loan Documents, (vi) the existence of, the legal
and beneficial ownership of, title to, the accuracy of any legal description of,
the physical condition of, or the actual use of, any properties or assets
purportedly owned by the Company or the Guarantors or any other Person,
(vii) whether any such properties or assets are in compliance with any Laws
relating to the construction, occupancy or use thereof (including, without
limitation, zoning Laws, building codes and environmental Laws) and (viii) the
conformity of the Loan Documents to any term sheet or commitment letter.

  F.   The matters expressed in this opinion letter are subject to and qualified
and limited by (i) applicable bankruptcy, insolvency, fraudulent transfer and
conveyance, reorganization, moratorium and similar Laws affecting creditors’
rights and remedies generally, (ii) general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity),
(iii) commercial reasonableness and unconscionability and an implied covenant of
good faith and fair dealing, (iv) the power of the courts to award damages in
lieu of equitable remedies and (v) securities Laws and public policy underlying
such Laws with respect to rights to indemnification and contribution.

 

 

--------------------------------------------------------------------------------

 

  G.   Based on the 2007 Update to the Report of the Committee of Corporations
of the Business Law Section of the State Bar of California Regarding Legal
Opinions in Business Transactions, the term “enforceable” as used in paragraph 2
hereof means that (i) a contract has been formed, (ii) a remedy will be
available in the event of a breach of the undertakings in the contract (or the
undertakings will otherwise be given effect) and (iii) remedies in the contract
will be given effect, unless, in the case of (ii) or (iii) expressly or
implicitly excluded. The opinions expressed in the last two sentences of
paragraph 2 herein are subject to the qualification that certain provisions of
the Loan Documents covered by this opinion letter may be unenforceable, but such
unenforceability will not, subject to the other exceptions, qualifications and
limitations in this opinion letter, render the Loan Documents invalid as a whole
or substantially interfere with realization of the principal benefits
contemplated by the Loan Documents.

  H.   We also advise you of California statutory provisions to the effect that,
in certain circumstances, a surety, guarantor, indemnitor, co-guarantor or
co-borrower of security for a debt or other obligation of a borrower
(collectively herein, “surety” or “guarantor”) may be exonerated if the surety’s
obligation under a surety, guaranty, indemnity or co-borrowing or security
arrangement is not supported by consideration distinct from the consideration
for the principal’s obligation (or another party’s obligation, including without
limitation, other co-borrowers) (collectively herein, “obligor” or “principal”)
or if there is any fraud, concealment, non-disclosure, misrepresentation of
facts or undue advantage taken of the surety by the creditor or if the creditor
materially alters the original obligation of the principal without the consent
of the surety, or the creditor elects remedies for default which impair the
subrogation or other rights of the surety against the principal or the creditor
otherwise takes any action which materially prejudices the surety against the
principal or the creditor otherwise takes any action which materially prejudices
the surety, and that the surety’s obligation may be unenforceable to the extent
that it exceeds or is more burdensome than the underlying principal obligation
or the underlying principal obligation is unenforceable. See, e.g., without
limitation, Cal.Civ.Code Sections 2809, 2810 and 2819-2856. These outcomes may
result notwithstanding the presence of any waivers of such provisions. There is
also authority, however, to the effect that a surety may validly waive those
rights if the waivers are expressly set forth in the guaranty or other document
or arrangement. See, e.g., without limitation, Cal.Civ.Code Sections 2787
through 2855. Further, in certain circumstances a surety may require a creditor
to first proceed and exhaust its remedies against the principal. See, without
limitation, Cal.Civ.Code Section 2845. We express no opinion as to whether a
court presented with the issue would hold in favor of the effectiveness, under
California law, of any waivers set forth in any guaranty or other document or
arrangement executed by any surety, nor do we express any opinion as to the
effect on any such guaranty or other document or arrangement of (i) any
modification to or amendment of any of the Company’s or the Guarantors’
obligations that materially increases those obligations, (ii) any other action
by the Company that materially prejudices the surety, if, in any such instance,
such modification, amendment or action occurs without prior notice to and the
consent of the surety or (iii) any security arrangement not supported by
consideration.

  I.   With respect to our opinions expressed in the last two sentences of
paragraph 2, we advise you that a California court may not strictly enforce
certain covenants contained in the Loan Documents or allow acceleration of the
indebtedness secured by the Loan Documents if it concludes that such enforcement
or acceleration would be unreasonable under the then existing circumstances or
that the holder of such indebtedness has not demonstrated that the security
would be impaired.

 

 

--------------------------------------------------------------------------------

 

  J.   The matters expressed in this letter are subject to and qualified and
limited by the invalidity or unenforceability of: (i) under certain
circumstances under California Law or court decisions, provisions indemnifying a
party against liability for its own wrongful or negligent acts or where such
indemnification is contrary to public policy; (ii) under certain circumstances,
provisions imposing penalties, forfeitures, late payment charges or increasing
an interest rate upon delinquency in payment or upon the occurrence of a
default; (iii) under certain circumstances, contractual provisions respecting
various self-help or summary remedies without notice or opportunity for hearing
or correction; (iv) any provision in the Loan Documents which expressly or
implicitly appoints Administrative Agent or other persons or entities as the
attorney-in-fact of any of the Company, the Guarantors or any other party;
(v) under certain circumstances, provisions in the Loan Documents to the effect
that rights or remedies are not exclusive, that every right or remedy is
cumulative and may be exercised in addition to, or with, any other right or
remedy or that the election of some particular remedy or remedies does not
preclude recourse to one or another remedy; (vi) under certain circumstances,
provisions in the Loan Documents regarding the procedure and effect of a private
sale of the personal property collateral or whether, under the factual
circumstances existing at the time of the sale of the personal property
collateral, the sale would be commercially reasonable; (vii) provisions in the
Loan Documents which purport to restrain or invalidate the free alienability of
property; and (viii) financial covenants in the Loan Documents to the extent
that they are not merely a trigger for a default.

  K.   We express no opinion as to the validity or enforceability of the
provisions of the Loan Documents to the extent any provision thereof (i) may be
limited or otherwise affected by compliance with procedural requirements of
California Law relating to the exercise of remedies by a lender; (ii) are vague
or ambiguous on their face; (iii) relate to confidentiality; or (iv) purport to
specify remedies regarding injunctive relief.

  L.   With respect to the opinions set forth in paragraphs 2 and 6, we wish to
advise you that the provisions of the Loan Documents which purport to create a
security interest in real or personal property are enforceable (except as
otherwise limited in this opinion letter) only to the extent of the grantor’s
rights and interests in such property.

  M.   We express no opinion as to the validity, binding effect, or
enforceability of any provision of the Loan Documents which (i) permits the
Lenders to increase the rate of interest or to collect a late charge or
prepayment penalty in the event of delinquency or default; (ii) waive, directly
or indirectly, expressly or impliedly, defenses to obligations or rights granted
by Law, where such waivers are prohibited by Law or are against public policy;
(iii) purport to relieve a party or to indemnify a party against any liability
for the negligence or misconduct of such party; (iv) are vague and/or ambiguous
on their face; or (v) are liquidated damages.

  N.   We express no opinion as to the validity, binding effect, or
enforceability of any provision of the Loan Documents with respect to (i) the
enforceability of any dispute, forum selection or consent to jurisdiction
clauses; (ii) a waiver of a right to jury trial; or (iii) choice of law.

 

 

--------------------------------------------------------------------------------

 

  O.   In rendering our opinions expressed in paragraph 6 herein, we have
assumed, with your consent and without any independent investigation, that the
UCC Financing Statements will be filed with the appropriate Filing Office in the
exact form attached hereto as Schedule 2.

  P.   With respect to the opinions expressed in paragraph 6 herein, we express
no opinion as to (i) priority of security interests created by the presentation
of the UCC Financing Statements to the Filing Office in connection with the Loan
Documents or (ii) the title to or ownership of the property or assets
constituting the collateral described in such UCC Financing Statements. In
addition, we wish to advise you that a security interest attaches only to the
extent the Company or the Guarantors, as applicable, has rights and interests in
the property and assets constituting the Collateral. In rendering our opinion,
we have assumed that the Company and the Guarantors have rights and interests in
the property and assets constituting the Collateral.

  Q.   With respect to the opinions expressed in paragraph 6 herein, we express
no opinion with respect to collateral described in the Security Agreement that
consists of or will consist of (i) goods covered by certificates of title,
(ii) fixtures, (iii) consumer goods, (iv) farm products, (v) commercial tort
claims, (vi) timber to be cut, (vii) as-extracted collateral, (viii) deposit
accounts, (ix) investment securities or (x) letter-of-credit rights.

  R.   The opinion expressed in the second sentence of paragraph 8 does not
address the Lenders’ priority with respect to claims in the collateral that are
not governed by Article 9 of the California UCC.

  S.   We advise you that certain provisions of the Loan Documents are or may be
unenforceable in whole or in part as a result of the Laws of the State of
California that cannot be waived governing restricting liability for attorneys’
fees.

  T.   In rendering any opinion herein with respect to Statspin, we are relying,
without independent investigation, and with your consent, on that certain
opinion of even date herewith from Todd Graham, counsel to Borrower, as to
matters covered in such opinion.

  U.   This opinion letter is solely for your benefit, and no other Persons
shall be entitled to rely upon this letter other than you, your successors and
assigns as Lenders, and Persons that acquire participations in your Loans
(collectively, the “Reliance Parties”). Without our prior written consent, this
opinion letter may not be quoted in whole or in part or otherwise referred to in
any document and may not be furnished or otherwise disclosed to or used by any
Person other than the Reliance Parties, except for (i) delivery of copies hereof
to counsel for the Reliance Parties and (ii) inclusion of copies hereof in a
closing file.

  V.   This law firm is a registered limited liability partnership organized
under the Laws of the State of California.

Very truly yours,

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B-2
OPINION OF IN-HOUSE COUNSEL OF BORROWER
[Effective Date]
JPMorgan Chase Bank, N.A.
300 South Grand Avenue, Floor 4
Los Angeles, California 90071
Attn. David Scott
Re: Iris International, Inc., a Delaware corporation
Gentlemen:
I am the corporate counsel to Iris International, Inc., a Delaware corporation
(the “Company”), Arista Molecular, Inc., a Delaware corporation (“Arista”), Iris
Global Network, Inc., a Delaware corporation (“Iris Global”), Iris Molecular
Diagnostics, Inc., a Delaware corporation (“Iris Molecular”), and StatSpin,
Inc., a Massachusetts corporation (“Statspin”; Statspin, together with Arista,
Iris Global, and Iris Molecular, each a “Guarantor” and collectively, the
“Guarantors”; the Company, together with the Guarantors, each a “Loan Party” and
collectively, the “Loan Parties”) in connection with the delivery of that
certain Credit Agreement, dated as of the date hereof (the “Agreement”), by and
among the Company, the lenders from time to time a party thereto (each a
“Lender” and collectively, the “Lenders”) and JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, the “Administrative Agent”), and
certain related documents. This opinion letter is delivered pursuant to
Section 5.01(b) of the Agreement.
Capitalized terms are used herein as defined in the Agreement, unless otherwise
defined herein.
In connection with this letter, I have examined executed originals or copies of
executed originals of each of the following documents, each of which is dated as
of the date hereof unless otherwise noted (collectively, the “Loan Documents”):
(a) the Agreement, (b) those certain Continuing Security Agreements between the
relevant Loan Parties and the Administrative Agent (each, a “Security
Agreement”), collectively the “Security Agreements”); and(c) those certain
Guarantees from the Guarantors .
In addition, I have examined the following documents (collectively, the “Due
Diligence Documents”): (i) the articles of incorporation and bylaws described on
Schedule 1 hereto (the “Formation Documents” and (ii) certificates of the State
agencies or officials set forth in Schedule 2 hereto (the “Good Standing
Certificates”).

 

 

--------------------------------------------------------------------------------

 

I have examined originals or certified copies of such corporate records of the
Loan Parties and other certificates and documents of officials of the Loan
Parties, public officials and others and have made such investigation of law as
I have deemed appropriate for purposes of this letter, except where a statement
is qualified as to knowledge or awareness, which is as specified below.
Based upon the foregoing and subject to the qualifications and limitations set
forth hereinafter, I am of the opinion that:

  1.   the Company and each Guarantor is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.

  2.   Statspin, Inc. is a corporation duly organized and validly existing under
the laws of the Commonwealth of Massachusetts and has the requisite corporate
power and authority to own, lease and operate its properties and to conduct its
business as presently conducted.

  3.   Statspin has the requisite corporate power and authority to execute,
deliver and perform its obligations under the Loan Documents to which it is a
party in accordance with the terms thereof. The execution and delivery of the
Loan Documents by Statspin, and the consummation by Statspin of the transactions
contemplated thereby, have been duly authorized by all necessary action and no
further consent or authorization of Statspin, its board of directors,
stockholders or any authorization, approval, consent, or other order of, or
filing with, or notice to or registration with, any federal or state
governmental authority or regulatory body (including, without limitation, any
self-regulatory organization) (each, a “Filing”) is required to be obtained by
Statspin to enter into and perform its obligations under the Loan Documents
except such Filings as have been obtained or made. The Loan Documents to which
Statspin is a party have been duly executed and delivered by Statspin.

  4.   There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to my knowledge, threatened against
or affecting the Company or any Guarantor (a) 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 have a Material
Adverse Effect (other than the Disclosed Matters) or (b) that involve the Loan
Documents or the Transactions.

  5.   The execution, delivery and performance of the Loan Documents by the
Company and each Guarantor and the consummation by the Company and each
Guarantor of the transactions contemplated thereby do not and will not violate
or result in a default under any indenture, agreement or other instrument
binding upon the Company or any Guarantor or its assets, or give rise to a right
thereunder to require any payment to be made by the Company or such Guarantor.

 

 

--------------------------------------------------------------------------------

 

  6.   The Massachusetts Financing Statement is in appropriate form for filing
in Office of the Secretary of State of the Commonwealth of Massachusetts (the
“Massachusetts Filing Office”). The Massachusetts Filing Office is the only
office in Massachusetts in which a financing statement is required to be filed
in order to perfect by filing the security interest granted to the
Administrative Agent, for the benefit of the Administrative Agent and the
Lenders, in the Collateral consisting of personal property or fixtures located
in such jurisdiction to the extent that such security interests may be perfected
under Article 9 of the Massachusetts UCC by filing a UCC financing statement,
naming the Secured Party as secured party. Accordingly, to the extent that a
security interest in the Collateral consisting of personal property or fixtures
may be perfected by the filing of a financing statement in such jurisdiction,
the security interest of the Administrative Agent in such Collateral is
perfected upon the filing of the Financing Statement in the Massachusetts Filing
Office.

The opinions and other matters in this letter are qualified in their entirety
and subject to the following:

W.   I have made no special investigation or review of any published
constitutions, treaties, laws, rules or regulations or judicial or
administrative decisions, other than (i) the Federal statutory law of the United
States, (ii) the Delaware General Corporation Law, (iii) the Laws of the State
of California, and (iv) Article 9 of the Massachusetts UCC as set forth on the
Massachusetts website

(http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter106)
on the date hereof (solely with respect to the opinions expressed in paragraph 6
herein).

X.   This letter and the matters addressed herein are as of the date hereof and
I undertake no, and hereby disclaim any, obligation to advise you of any change
in any matter set forth herein, whether based on a change in the law, a change
in any fact relating to the Company or any other Person, or any other
circumstance. This opinion letter is limited to the matters expressly stated
herein and no opinions are to be inferred or may be implied beyond the opinions
expressly set forth herein.

Y.   The opinions expressed in paragraph 1 herein solely with respect to the
“good standing” of the Company and each Guarantor are given solely on the basis
of the Good Standing Certificates and speak only as of the date indicated
therein rather than the date hereof and are limited to the meaning ascribed to
such certificates by the applicable State agency and applicable law of the State
of organization of each such entity.

Z.   The opinions expressed in paragraph 5 are limited to any indenture,
agreement or other instrument that has been filed as an exhibit to an SEC filing
of the Borrower as a material contract.

 

 

--------------------------------------------------------------------------------

 

AA.   This opinion letter is solely for your benefit, and no other Persons shall
be entitled to rely upon this letter other than you, your successors and assigns
as Lenders, and Persons that acquire participations in your Loans (collectively,
the “Reliance Parties”). Without our prior written consent, this opinion letter
may not be quoted in whole or in part or otherwise referred to in any document
and may not be furnished or otherwise disclosed to or used by any Person other
than the Reliance Parties, except for (i) delivery of copies hereof to counsel
for the Reliance Parties and (ii) inclusion of copies hereof in a closing file.

Very truly yours,

 

 

--------------------------------------------------------------------------------

 

EXHIBIT C
JOINDER AGREEMENT
THIS JOINDER AGREEMENT (this “Agreement”), dated as of                     
 _____, 20____, is entered into between
                                        , a                      (the “New
Subsidiary”) and JPMORGAN CHASE BANK, N.A., in its capacity as administrative
agent (the “Administrative Agent”) under that certain Credit Agreement, dated as
of July 27, 2011 among IRIS INTERNATIONAL, INC., a Delaware corporation (the
“Borrower”), the Loan Parties party thereto, the Lenders party thereto and the
Administrative Agent (as the same may be amended, modified, extended or restated
from time to time, the “Credit Agreement”). All capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Credit
Agreement.
The New Subsidiary and the Administrative Agent, for the benefit of the Lenders,
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 “Guarantor” for all purposes of the
Credit Agreement and shall have all of the obligations of a Loan Party and a
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. The New
Subsidiary has delivered to the Administrative Agent an executed Guaranty.
2. If required, the New Subsidiary is, simultaneously with the execution of this
Agreement, executing and delivering such Loan 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:
                                                            
                                                            
                                                            
                                                            
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 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 CALIFORNIA.

 

 

--------------------------------------------------------------------------------

 

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 Lenders, 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., as Administrative
Agent    
 
               
 
  By:                          
 
      Name:        
 
      Title: