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

Exhibit 10.18
 

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$375,000,000

CREDIT AGREEMENT

among

ORTHOFIX HOLDINGS, INC.,
as Borrower,

and

ORTHOFIX INTERNATIONAL N.V.,
COLGATE MEDICAL LIMITED,
VICTORY MEDICAL LIMITED,
SWIFTSURE MEDICAL LIMITED,
ORTHOFIX UK LTD,
AND THE DOMESTIC SUBSIDIARIES OF ORTHOFIX INTERNATIONAL N.V.,
as Guarantors,

THE LENDERS PARTIES HERETO,

WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent

and

CITICORP NORTH AMERICA, INC.,
as Syndication Agent
 
 
Dated as of September 22, 2006
 

WACHOVIA CAPITAL MARKETS, LLC,

and

CITIGROUP GLOBAL MARKETS INC.,
as Joint Lead Arrangers and Joint Bookrunners

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TABLE OF CONTENTS

   
Page
     
ARTICLE I DEFINITIONS
1
Section 1.1
Defined Terms.
1
Section 1.2
Other Definitional Provisions.
34
Section 1.3
Accounting Terms.
34
   
ARTICLE II THE LOANS; AMOUNT AND TERMS
35
Section 2.1
Revolving Loans; Revolver Increase.
35
Section 2.2
Term Loan Facility; Incremental Term Loan.
38
Section 2.3
Letter of Credit Subfacility.
41
Section 2.4
Swingline Loan Subfacility.
45
Section 2.5
Fees.
46
Section 2.6
Commitment Reductions.
47
Section 2.7
Prepayments.
48
Section 2.8
Lending Offices.
50
Section 2.9
Default Rate and Payment Dates.
50
Section 2.10
Conversion Options.
51
Section 2.11
Computation of Interest and Fees.
51
Section 2.12
Pro Rata Treatment and Payments.
52
Section 2.13
Non-Receipt of Funds by the Administrative Agent.
54
Section 2.14
Inability to Determine Interest Rate.
55
Section 2.15
Illegality.
56
Section 2.16
Requirements of Law.
56
Section 2.17
Indemnity.
58
Section 2.18
Taxes.
59
Section 2.19
Indemnification; Nature of Issuing Lender’s Duties.
61
   
ARTICLE III REPRESENTATIONS AND WARRANTIES
62
Section 3.1
Financial Condition.
62
Section 3.2
No Change.
63
Section 3.3
Corporate Existence; Compliance with Law.
63
Section 3.4
Corporate Power; Authorization; Enforceable Obligations.
65
Section 3.5
Status Under Certain Statutes.
65
Section 3.6
Margin Regulations.
65
Section 3.7
No Legal Bar; No Default.
65
Section 3.8
No Material Litigation.
66
Section 3.9
ERISA.
66
Section 3.10
Environmental Matters.
67
Section 3.11
Use of Proceeds.
68
Section 3.12
Subsidiaries.
68
Section 3.13
Ownership.
68
Section 3.14
Indebtedness.
69
Section 3.15
Taxes.
69
Section 3.16
Intellectual Property.
69
Section 3.17
Solvency.
70

 
i

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Section 3.18
Investments.
70
Section 3.19
Location of Collateral.
70
Section 3.20
No Burdensome Restrictions.
70
Section 3.21
Labor Matters.
70
Section 3.22
Security Documents.
70
Section 3.23
Accuracy and Completeness of Information.
71
Section 3.24
Fraud and Abuse.
71
Section 3.25
Licensing and Accreditation.
72
Section 3.26
Other Regulatory Protection.
72
Section 3.27
Reimbursement from Third Party Payors.
72
Section 3.28
Other Agreements.
73
Section 3.29
Material Contracts.
73
Section 3.30
Insurance.
73
Section 3.31
Classification as Senior Indebtedness.
73
Section 3.32
Tax Shelter Regulations.
73
Section 3.33
Regulation H.
74
Section 3.34
Anti-Terrorism Laws.
74
Section 3.35
Compliance with OFAC Rules and Regulations.
74
Section 3.36
Compliance with FCPA.
74
   
ARTICLE IV CONDITIONS PRECEDENT
75
Section 4.1
Conditions to Closing Date and Initial Extensions of Credit.
75
Section 4.2
Conditions to All Extensions of Credit.
80
   
ARTICLE V AFFIRMATIVE COVENANTS
81
Section 5.1
Financial Statements.
81
Section 5.2
Certificates; Other Information.
82
Section 5.3
Payment of Obligations.
83
Section 5.4
Conduct of Business and Maintenance of Existence.
84
Section 5.5
Maintenance of Property; Insurance.
84
Section 5.6
Inspection of Property; Books and Records; Discussions.
85
Section 5.7
Notices.
85
Section 5.8
Environmental Laws.
86
Section 5.9
Financial Covenants.
87
Section 5.10
Additional Subsidiary Guarantors.
88
Section 5.11
Compliance with Law.
88
Section 5.12
Pledged Assets.
89
Section 5.13
Limitations on Colgate and Victory.
90
Section 5.14
Further Assurances; Post-Closing Covenant.
90
   
ARTICLE VI NEGATIVE COVENANTS
93
Section 6.1
Indebtedness.
93
Section 6.2
Liens.
95
Section 6.3
Nature of Business.
95
Section 6.4
Consolidation, Merger, Sale or Purchase of Assets, etc.
95
Section 6.5
Advances, Investments and Loans.
97
Section 6.6
Transactions with Affiliates.
97
Section 6.7
Ownership of Subsidiaries; Restrictions.
97

 
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Section 6.8
Fiscal Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness Documents.
98
Section 6.9
Limitation on Restricted Actions.
98
Section 6.10
Restricted Payments.
99
Section 6.11
Sale Leasebacks.
100
Section 6.12
No Further Negative Pledges.
100
Section 6.13
Accounts.
100
   
ARTICLE VII EVENTS OF DEFAULT
101
Section 7.1
Events of Default.
101
Section 7.2
Acceleration; Remedies.
104
   
ARTICLE VIII THE AGENT
104
Section 8.1
Appointment.
104
Section 8.2
Delegation of Duties.
105
Section 8.3
Exculpatory Provisions.
105
Section 8.4
Reliance by Administrative Agent.
105
Section 8.5
Notice of Default.
106
Section 8.6
Non-Reliance on Administrative Agent and Other Lenders.
106
Section 8.7
Indemnification.
107
Section 8.8
Administrative Agent in Its Individual Capacity.
107
Section 8.9
Successor Administrative Agent.
107
Section 8.10
Other Agents.
108
Section 8.11
Releases.
108
   
ARTICLE IX MISCELLANEOUS
109
Section 9.1
Amendments, Waivers and Release of Collateral.
109
Section 9.2
Notices.
111
Section 9.3
No Waiver; Cumulative Remedies.
112
Section 9.4
Survival of Representations and Warranties.
112
Section 9.5
Payment of Expenses and Taxes.
113
Section 9.6
Successors and Assigns; Participations; Purchasing Lenders.
114
Section 9.7
Adjustments; Set-off.
117
Section 9.8
Table of Contents and Section Headings.
119
Section 9.9
Counterparts.
119
Section 9.10
Effectiveness.
119
Section 9.11
Severability.
119
Section 9.12
Integration.
119
Section 9.13
Governing Law.
119
Section 9.14
Consent to Jurisdiction and Service of Process.
120
Section 9.15
Confidentiality.
120
Section 9.16
Acknowledgments.
121
Section 9.17
Waivers of Jury Trial.
121
Section 9.18
Patriot Act Notice.
122
Section 9.19
Resolution of Drafting Ambiguities.
122
Section 9.20
Judgment Currency; Payments in Dollars.
122
Section 9.21
Arbitration.
122

 
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ARTICLE X GUARANTY
124
Section 10.1
The Guaranty.
124
Section 10.2
Bankruptcy.
125
Section 10.3
Nature of Liability.
125
Section 10.4
Independent Obligation.
125
Section 10.5
Authorization.
126
Section 10.6
Reliance.
126
Section 10.7
Waiver.
126
Section 10.8
Limitation on Enforcement.
127
Section 10.9
Confirmation of Payment.
128

 
iv

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Schedules

Schedule 1.1-1
Account Designation Letter
Schedule 1.1-3
Permitted Liens
Schedule 2.1(b)(i)
Form of Notice of Borrowing
Schedule 2.1(e)
Form of Revolving Note
Schedule 2.2(d)
Form of Term Note
Schedule 2.4(d)
Form of Swingline Note
Schedule 2.10
Form of Notice of Conversion/Extension
Schedule 2.18
Form of Tax Exempt Certificate
Schedule 3.3
Qui Tam Actions
Schedule 3.8
Litigation
Schedule 3.12
Subsidiaries
Schedule 3.16
Intellectual Property
Schedule 3.19(a)
Location of Real Property
Schedule 3.19(b)
Location of Collateral
Schedule 3.19(c)
Chief Executive Offices
Schedule 3.19(d)
Mortgaged Properties
Schedule 3.21
Labor Matters
Schedule 3.29
Material Contracts
Schedule 3.30
Insurance
Schedule 4.1-1
Form of Secretary’s Certificate
Schedule 4.1-2
Form of Solvency Certificate
Schedule 4.1-3
Form of Lender Consent
Schedule 5.10
Form of Joinder Agreement
Schedule 6.1(b)
Indebtedness
Schedule 6.4(a)
Permitted Asset Sales
Schedule 6.5
Investments
Schedule 6.13
Accounts
Schedule 9.6(c)
Form of Assignment Agreement

 
v

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CREDIT AGREEMENT, dated as of September 22, 2006, among ORTHOFIX HOLDINGS, INC.,
a Delaware corporation (the “Borrower”), ORTHOFIX INTERNATIONAL N.V., a
Netherlands Antilles corporation (the “Company”), COLGATE MEDICAL LIMITED, a
company formed under the laws of England and Wales (“Colgate”), VICTORY MEDICAL
LIMITED, a company formed under the laws of England and Wales (“Victory”),
SWIFTSURE MEDICAL LIMITED, a company formed under the laws of England and Wales
(“Swiftsure”), ORTHOFIX UK LTD, a company formed under the laws of England and
Wales (“UK Ltd”), those Domestic Subsidiaries of the Company identified as a
“Guarantor” on the signature pages hereto and such other Domestic Subsidiaries
of the Company as may from time to time become a party hereto (together with
Swiftsure and UK Ltd, each a “Subsidiary Guarantor” and, together with the
Company, Colgate and Victory, the “Guarantors”), the several banks and other
financial institutions as may from time to time become parties to this Agreement
(collectively, the “Lenders”; and individually, a “Lender”), and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
for the Lenders hereunder (in such capacity, the “Administrative Agent”).

W I T N E S S E T H:

WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $375,000,000, as
more particularly described herein; and

WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.

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

DEFINITIONS

 
Section 1.1
Defined Terms.

As used in this Agreement, terms defined in the first paragraph of this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:

“Account Designation Letter” shall mean the Account Designation Letter dated the
Closing Date from the Borrower to the Administrative Agent substantially in the
form attached hereto as Schedule 1.1-1.

“Acquired Company” shall mean Blackstone Medical, Inc., a Massachusetts
corporation.

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“Acquisition” shall mean the merger of New Era Medical Corp., a Massachusetts
corporation and a direct wholly-owned Subsidiary of the Borrower, with and into
the Acquired Company, with the Acquired Company being the surviving company,
pursuant to the Acquisition Documents.

“Acquisition Documents” shall mean (a) the Agreement and Plan of Merger, dated
as of August 4, 2006, among the Company, the Borrower, New Era Medical Corp, a
Massachusetts corporation and a direct wholly-owned Subsidiary of the Borrower,
the Acquired Company, the principal shareholders of the Acquired Company and
William G. Lyons, III, as equityholders’ representative and (b) all other
agreements and documents executed in connection with the Acquisition, each as
amended or modified prior to the Closing Date.

“Additional Credit Party” shall mean each Person that becomes a Guarantor by
execution of a Joinder Agreement in accordance with Section 5.10.

“Additional Revolving Loan” shall have the meaning set forth in Section 2.1.

“Additional Term Loan” shall have the meaning set forth in Section 2.2.

“Administrative Agent” shall have the meaning set forth in the first paragraph
of this Agreement and any successors in such capacity.

“Administrative Details Form” shall mean, with respect to any Lender, a document
containing such Lender’s contact information for purposes of notices provided
under this Agreement and account details for purposes of payments made to such
Lender under this Agreement.

“Affiliate” shall mean as to any Person, any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, a Person shall be deemed to be
“controlled by” a Person if such Person possesses, directly or indirectly, power
either (a) to vote 10% or more of the securities having ordinary voting power
for the election of directors of such Person or (b) to direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.

“Agent’s Fee Letter” shall mean the letter agreement dated July 27, 2006
addressed to the Borrower from Wachovia and WCM, as amended, modified, restated
or supplemented from time to time in accordance with its terms.

“Agents” shall mean a collective reference to Wachovia and Citigroup North
America, Inc.

“Agreement” or “Credit Agreement” shall mean this Credit Agreement, as amended,
restated, modified or supplemented from time to time in accordance with its
terms.

2

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“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime
Rate” shall mean, at any time, the rate of interest per annum publicly announced
from time to time by Wachovia at its principal office in Charlotte, North
Carolina as its prime rate. Each change in the Prime Rate shall be effective as
of the opening of business on the day such change in the Prime Rate occurs. The
parties hereto acknowledge that the rate announced publicly by Wachovia as its
Prime Rate is an index or base rate and shall not necessarily be its lowest or
best rate charged to its customers or other banks; and “Federal Funds Effective
Rate” shall mean, for any day, the weighted average 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 on
the next succeeding Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.

“Alternate Base Rate Loans” shall mean Loans that bear interest at an interest
rate based on the Alternate Base Rate.

“Applicable Percentage” shall mean, for any day, the rate per annum set forth
below opposite the applicable level then in effect, it being understood that the
Applicable Percentage for (a) Revolving Loans that are Alternate Base Rate Loans
shall be the percentage set forth under the column “Alternate Base Rate Margin
for Revolving Loans”, (b) Revolving Loans that are LIBOR Rate Loans shall be the
percentage set forth under the column “LIBOR Rate Margin for Revolving Loans and
Letter of Credit Fee”, (c) the Letter of Credit Fee shall be the percentage set
forth under the column “LIBOR Rate Margin for Revolving Loans and Letter of
Credit Fee”, (d) Term Loans that are Alternate Base Rate Loans shall be the
percentage set forth under the column “Alternate Base Rate Margin for Term
Loans”, (e) Term Loans that are LIBOR Rate Loans shall be the percentage set
forth under the column “LIBOR Rate Margin for Term Loans”, and (f) the
Commitment Fee shall be the percentage set forth under the column “Commitment
Fee”:

3

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Level
Leverage Ratio
Alternate Base Rate Margin for Revolving Loans
LIBOR Rate Margin for Revolving Loans and Letter of Credit Fee
Alternate Base Rate Margin for Term Loans
LIBOR Rate Margin for Term Loans
Commitment Fee
I
≥ 4.00 to 1.0
1.25%
2.25%
0.75%
1.75%
0.500%
II
≥ 3.25 to 1.0 but
< 4.00 to 1.0
1.00%
2.00%
0.75%
1.75%
0.375%
III
≥ 2.50 to 1.0 but
< 3.25 to 1.0
0.75%
1.75%
0.75%
1.75%
0.375%
IV
≥ 1.75 to 1.0 but
< 2.50 to 1.0
0.50%
1.50%
0.75%
1.75%
0.250%
V
< 1.75 to 1.0
0.25%
1.25%
0.75%
1.75%
0.250%

The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the financial information
and certifications required to be delivered to the Administrative Agent and the
Lenders in accordance with the provisions of Sections 5.1(a), (b) and (c) and
Section 5.2(b) (each, an “Interest Determination Date”). Such Applicable
Percentage shall be effective from such Interest Determination Date until the
next such Interest Determination Date. The initial Applicable Percentages shall
be based on Level II until the first Interest Determination Date occurring after
the delivery of the officer’s compliance certificate pursuant to Section 5.2(b)
for the quarter ended December 31, 2006. If the Borrower shall fail to provide
the annual and quarterly financial information and certifications in accordance
with the provisions of Sections 5.1(a), (b) and (c) and Section 5.2(b), the
Applicable Percentage from such Interest Determination Date shall, on the date
five (5) Business Days after the date by which the Borrower was so required to
provide such financial information and certifications to the Administrative
Agent and the Lenders, be based on Level I until such time as such information
and certifications are provided, whereupon the level shall be determined by the
then current Leverage Ratio.

“Approved Fund” shall mean any Fund that is administered, managed or
underwritten 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.

“Arrangers” shall mean Wachovia Capital Markets, LLC and Citigroup Global
Markets Inc., as joint lead arrangers and joint bookrunners, together with their
successors and/or assigns.

“Asset Disposition” shall mean the disposition of any or all of the assets
(including, without limitation, the disposition to any person that is not a
Credit Party or a Subsidiary of Capital Stock of a Subsidiary or any ownership
interest in a joint venture) of the Company or any of its Subsidiaries whether
by sale, lease, transfer or otherwise. The term “Asset Disposition” shall not
include (i) the sale, lease, transfer or other disposition of assets permitted
by Section 6.4(a)(i), (ii), (iii), (iv), (v) or (vi) hereof or (ii) any Equity
Issuance, including any equity issued upon exercise of employee stock options.

4

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“Assignment Agreement” shall mean an Assignment Agreement entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 9.6), and accepted by the Administrative Agent, in
substantially the form of Schedule 9.6(c) or any other form approved by the
Administrative Agent.

“Bank Products” shall mean any one or more of the following types of services or
facilities extended to any of the Credit Parties and their Subsidiaries by an
Agent or an Affiliate thereof, to the extent not prohibited by the terms of this
Agreement: (a) Automated Clearing House (ACH) transactions and other similar
money transfer services; (b) cash management, including controlled disbursement
and lockbox services; (c) establishing and maintaining deposit accounts; (d)
credit cards or stored value cards; and (e) other similar or related bank
products and services.

“Bankruptcy Code” shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.

“Borrower” shall have the meaning set forth in the first paragraph of this
Agreement.

“Borrowing Date” shall mean, in respect of any Loan, the date such Loan is made.

“Business” shall have the meaning set forth in Section 3.10.

“Business Day” shall mean a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term “Business Day” shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.

“Capital Lease” shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.

“Capital Lease Obligations” shall mean the capitalized lease obligations
relating to a Capital Lease determined in accordance with GAAP.

“Capital Stock” shall mean (a) in the case of a corporation, capital stock, (b)
in the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

5

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“Cash Equivalents” shall mean (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition (“Government Obligations”), (b)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (i) any United States commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (ii) bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody’s is at least P-1 or the equivalent thereof (any such bank being an
“Approved Bank”), in each case with maturities of not more than 364 days from
the date of acquisition, (c) commercial paper and variable or fixed rate notes
issued by any Approved Bank (or by the parent company thereof) or any variable
rate notes issued by, or guaranteed by any domestic corporation rated A-1 (or
the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or
better by Moody’s and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including a Lender) or a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (e) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, (f) Investments, classified in
accordance with GAAP as current assets of the Borrower or its Subsidiaries, in
money market investment programs registered under the Investment Company Act of
1940, as amended, that are administered by financial institutions that have the
highest rating obtainable from either Moody’s or S&P, and the portfolios of
which are limited solely to Investments (i) in corporate obligations having a
remaining maturity of less than two years, issued by corporations having
outstanding comparable obligations that are rated in the two highest categories
of Moody’s and S&P or no lower than the two highest long term debt ratings
categories of either Moody’s or S&P or (ii) of the character, quality and
maturity described in clauses (a)-(e) of this definition and (g) money market
funds compliant with Rule 2a-7 of the Exchange Act which consist primarily of
cash and cash equivalents set forth in clauses (a) through (f) above.

“CHAMPUS” shall mean the United States Department of Defense Civilian Health and
Medical Program of the United States.

“Change of Control” shall mean the occurrence of any of the following: (a) any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule l3d-3 under the
Exchange Act) of more than 30% of then outstanding Voting Stock of the Company,
measured by voting power rather than the number of shares; (b) Continuing
Directors shall cease for any reason to constitute a majority of the members of
the board of directors of the Company then in office, (c) the Company shall
cease to own, directly or indirectly through wholly-owned Subsidiaries, all of
the outstanding Capital Stock of the Borrower or, except as result of the
dissolution of Colgate or Victory pursuant to Section 6.4(a)(viii), Colgate or
Victory, (d) Victory or any successor parent company of the Borrower resulting
from the dissolution of Victory pursuant to Section 6.4(a)(viii) shall cease to
own directly all of the outstanding Capital Stock of the Borrower or (e) the
occurrence of a “Change of Control” (or any comparable term) under, and as
defined in, the documents evidencing or governing any Subordinated Indebtedness.

6

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“Closing Date” shall mean the date of this Agreement.

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

“Code” shall mean the Internal Revenue Code of 1986, as amended, modified,
succeeded or replaced from time to time.

“Colgate” shall have the meaning set forth in the first paragraph of this
Agreement.

“Collateral” shall mean a collective reference to the collateral that is
identified in, and at any time will be covered by, the Security Documents and
any other property or assets of a Credit Party, whether tangible or intangible
and whether real or personal, that may from time to time secure the Credit Party
Obligations.

“Commitment” shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment and the Term Loan Commitment, individually or collectively,
as appropriate.

“Commitment Fee” shall have the meaning set forth in Section 2.5(a).

“Commitment Percentage” shall mean the Revolving Commitment Percentage and/or
the Term Loan Commitment Percentage, as appropriate.

“Commitment Period” shall mean the period from and including the Closing Date to
but not including the Revolver Maturity Date.

“Commonly Controlled Entity” shall mean an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of Section
4001(b)(1) of ERISA or is part of a group which includes the Borrower and which
is treated as a single employer under Section 414(b) or 414(c) of the Code or,
solely for purposes of Section 412 of the Code to the extent required by such
section, Section 414(m) or 414(o) of the Code.

“Company” shall have the meaning set forth in the first paragraph of this
Agreement.

“Consolidated Capital Expenditures” shall mean, for any applicable period of
computation, the aggregate amount (whether paid in cash or accrued as a
liability) of all capital expenditures of the Company and its Subsidiaries on a
consolidated basis for such period, as determined in accordance with GAAP;
provided, however, Consolidated Capital Expenditures shall not include any such
expenditures (i) for replacements and substitutions for capital assets or
acquisitions of capital assets, to the extent made with the proceeds of
insurance in accordance with Section 2.7(b)(ii) or (ii) for replacements and
substitutions for capital assets or acquisitions of capital assets, to the
extent made with proceeds from the sale, exchange or other disposition of assets
as permitted under Section 2.7(b)(iv) or Section 6.4(a)(iii).

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“Consolidated EBITDA” shall mean, for any applicable period of computation, the
sum of (a) Consolidated Net Income for such period, but excluding therefrom all
extraordinary items of income or loss, plus (b) to the extent deducted in
determining Consolidated Net Income for such period, the sum of (i) the
aggregate amount of depreciation and amortization charges for such period, plus
(ii) Consolidated Interest Expense for such period, plus (iii) the aggregate
amount of all income taxes reflected on the consolidated statements of income of
the Company and its Subsidiaries for such period plus (iv) non-cash charges
related to Hedging Agreements plus (v) non-cash expenses resulting from the
grant of stock options to any director, officer or employee of any Credit Party
or any Subsidiary pursuant to a written plan or agreement plus (vi) fees and
expenses associated with Permitted Acquisitions to the extent such fees and
expenses do not exceed $8,000,000 during the term of this Agreement plus (vii)
other non-cash charges (excluding non-cash charges relating to accounts
receivable and inventories) in an aggregate amount not to exceed $8,000,000 per
year plus (viii) fees and expenses associated with the Acquisition and the
closing of this Credit Agreement in an aggregate amount not to exceed
$12,500,000 plus (ix) certain one-time termination costs incurred in connection
with the termination of the Medtronic Services Agreement in an aggregate amount
not to exceed $6,100,000 plus (x) non-cash charges with respect to the write-off
of research and development expenses and inventory step-ups related to the
Acquisition and the purchase accounting treatment thereof minus (xi) non-cash
gains related to Hedging Agreements; provided, however, notwithstanding the
foregoing, for purposes of determining the portion of Consolidated EBITDA
attributable to the Acquired Company and its Subsidiaries for the fiscal
quarters ended December 31, 2005, March 31, 2006 and June 30, 2006, such amounts
shall be $2,300,000, $2,300,000 and $2,800,000, respectively.

“Consolidated Interest Expense” shall mean, for any applicable period of
computation, all interest expense of the Company and its Subsidiaries on a
consolidated basis for such period (including, without limitation, the interest
component under Capital Leases and any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product,
but excluding interest income), as determined in accordance with GAAP.

“Consolidated Net Income” shall mean, for any applicable period of computation,
net income after taxes for such period of the Company and its Subsidiaries on a
consolidated basis, as determined in accordance with GAAP.

“Consolidated Working Capital” shall mean, at any date, (a) the consolidated
current assets of the Company and its Subsidiaries as of such date (excluding
cash and Permitted Investments and current deferred tax assets) minus (b) the
consolidated current liabilities of the Company and its Subsidiaries as of such
date (excluding current liabilities in respect of Indebtedness and current
deferred tax liabilities). Consolidated Working Capital at any date may be a
positive or negative number. Consolidated Working Capital increases when it
becomes more positive or less negative and decreases when it becomes less
positive or more negative.

“Continuing Directors” shall mean, during any period of up to twenty-four (24)
consecutive months commencing after the Closing Date, individuals who at the
beginning of such twenty-four (24) month period were directors of the Company
(together with any new director whose (a) election by the Company’s board of
directors, (b) nomination for election by the Company’s shareholders or board of
directors or (c) appointment was approved by a vote of at least two-thirds of
the directors then still in office who either were directors at the beginning of
such period or whose election, nomination for election or appointment was
previously so approved).

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“Contractual Obligation” shall mean, as to any Person, any provision of any
security issued by such Person or of any contract, agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.

“Copyright Licenses” shall mean any agreement, written or oral, naming the
Borrower or any of its Subsidiaries which are Credit Parties as licensor and
granting any right under any Copyright including, without limitation, any
thereof referred to in Schedule 3.16.

“Copyrights” shall mean (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith (including,
without limitation, registrations, recordings and applications in the United
States Copyright Office), including, without limitation, any thereof referred to
in Schedule 3.16, and (b) all renewals thereof including, without limitation,
any renewals referred to in Schedule 3.16.

“Credit Documents” shall mean this Agreement, each of the Notes, any Joinder
Agreement, the LOC Documents, the Security Documents and all other agreements,
documents, certificates and instruments delivered to the Administrative Agent or
any Lender by any Credit Party in connection therewith (excluding, however, any
Hedging Agreement).

“Credit Party” shall mean any of the Borrower or the Guarantors.

“Credit Party Obligations” shall mean, without duplication, (a) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Administrative Agent, whenever arising, under this Agreement, the Notes
or any of the other Credit Documents (including, but not limited to, any
interest accruing after the occurrence of a filing of a petition of bankruptcy
under the Bankruptcy Code with respect to any Credit Party, regardless of
whether such interest is an allowed claim under the Bankruptcy Code), and (b)
all liabilities and obligations, whenever arising, owing from any Credit Party
or any of its Subsidiaries to any Hedging Agreement Provider arising under any
Secured Hedging Agreement permitted pursuant to Section 6.1(f).

“Debt Issuance” shall mean the issuance of any Indebtedness for borrowed money
by the Company or any of its Subsidiaries (excluding, for purposes hereof, any
Equity Issuance or any Indebtedness of the Company and its Subsidiaries
permitted to be incurred pursuant to Section 6.1 (other than Section 6.1(h)
(except to the extent proceeds from such issuance are used to consummate a
Permitted Acquisition if permitted by such Section)).

“Default” shall mean any event which would constitute an Event of Default,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition with respect to such Event of Default, has been
satisfied.

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“Defaulting Lender” shall mean, at any time, any Lender that, at such time (a)
has failed to make a Loan required pursuant to the term of this Credit Agreement
or failed to fund a Participation Interest in accordance with the terms hereof,
(b) has failed to pay to the Administrative Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement, or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or to a receiver, trustee or similar official.

“Deposit Account Control Agreement” shall mean an agreement, among a Credit
Party, a depository institution, and the Administrative Agent, which agreement
is in a form reasonably acceptable to the Administrative Agent and which
provides the Administrative Agent with “control” (as such term is used in
Article 9 of the Uniform Commercial Code) over the deposit account(s) described
therein, as the same may be as amended, modified, extended, restated, replaced,
or supplemented from time to time.

“Dispute” shall have the meaning set forth in Section 9.21.

“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

“Domestic Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s Domestic Lending Office in such Lender’s
Administrative Details Form; and thereafter, such other domestic office of such
Lender as such Lender may from time to time specify to the Administrative Agent
and the Borrower as the office of such Lender at which Alternate Base Rate Loans
of such Lender are to be made.

“Domestic Subsidiary” shall mean any Subsidiary that is organized and existing
under the laws of the United States or any state or commonwealth thereof or
under the laws of the District of Columbia (other than any Subsidiary domiciled
in Puerto Rico).

“Eligible Assignee” means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) in the case of any assignment of a
Revolving Commitment, the Issuing Bank, and (iii) unless an Event of Default has
occurred and is continuing, the Borrower (each such approval not to be
unreasonably withheld or delayed); provided that notwithstanding the foregoing,
“Eligible Assignee” shall not include the Borrower or any of the Borrower’s
Affiliates or Subsidiaries.

“Environmental Laws” shall mean any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirement
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health as such relates to
exposure to Materials of Environmental Concern or the environment, as now or may
at any time be in effect during the term of this Agreement.

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“Equity Issuance” shall mean any issuance by the Company or any of its
Subsidiaries to any Person that is not a Credit Party or a Subsidiary of
(a) shares of its Capital Stock, (b) any shares of its Capital Stock pursuant to
the exercise of options or warrants (excluding employee stock options), (c) any
shares of its Capital Stock pursuant to the conversion of any debt securities to
equity or (d) warrants or options which are exercisable for shares of its
Capital Stock. The term “Equity Issuance” shall not include any Asset
Disposition, Debt Issuance, stock options, restricted stock or stock
appreciation rights issued by the Company or any of its Subsidiaries under a
long-term incentive or employee benefit plan of the Company or any successor
plan, any shares of Capital Stock issued in connection with a stock split
(whether pursuant to a stock split in the form of a stock dividend or
otherwise), or any Capital Stock or stock options issued in connection with or
relating to the Acquisition.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, modified, succeeded or replaced from time to time.

“Eurodollar Reserve Percentage” shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) that is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.

“Event of Default” shall mean any of the events specified in Section 7.1;
provided, however, with respect to any such event, that any requirement for the
giving of notice or the lapse of time, or both, or any other condition with
respect thereto, has been satisfied.

“Excess Cash Flow” shall mean, with respect to any fiscal year of the Company
commencing with the Company’s fiscal year ending December 31, 2007, for the
Company and its Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period minus (b) Consolidated Capital Expenditures
paid in cash for such period minus (c) Scheduled Funded Debt Payments made
during such period minus (d) Consolidated Interest Expense paid in cash
(excluding any Consolidated Interest Expense associated with intercompany
Indebtedness) for such period minus (e) amounts paid in respect of federal,
state, local and foreign income taxes of the Company and its Subsidiaries with
respect to such period minus (f) increases in Consolidated Working Capital plus
(g) decreases in Consolidated Working Capital minus (h) optional prepayments of
Revolving Loans (to the extent accompanied by a corresponding reduction of the
Revolving Committed Amount) and the Term Loan made pursuant to Section 2.7(a)
minus (i) except to the extent financed with the proceeds from the incurrence of
Indebtedness or any Equity Issuance, the amount of any cash consideration paid
in connection with any Permitted Acquisition during such period.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Extension of Credit” shall mean, as to any Lender, the making of a Loan by such
Lender or the issuance of, or participation in, a Letter of Credit by such
Lender.

“Federal Funds Effective Rate” shall have the meaning set forth in the
definition of “Alternate Base Rate”.

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“Fee Letters” shall mean (a) the Agent’s Fee Letter and (b) the letter agreement
dated July 27, 2006 addressed to the Borrower from Wachovia, WCM and Citigroup
Global Markets Inc.

“Fixed Charge Coverage Ratio” shall mean, with respect to the Company and its
Subsidiaries on a consolidated basis for the twelve-month period ending on the
last day of any fiscal quarter of the Company, the ratio of (a) Consolidated
EBITDA for such period to (b) the sum of Consolidated Interest Expense for such
period plus Scheduled Funded Debt Payments required to be made during such
period plus cash taxes paid or payable during such period plus Consolidated
Capital Expenditures for such period plus Restricted Payments made during such
period. Notwithstanding the foregoing, for purposes of calculating the Fixed
Charge Coverage Ratio for the fiscal quarters ending December 31, 2006, March
31, 2007 and June 30, 2007, the Fixed Charge Coverage Ratio shall be determined
by annualizing the Consolidated Interest Expense and Scheduled Funded Debt
Payments during such fiscal quarters such that (i) for the calculation of the
Fixed Charge Coverage Ratio as of December 31, 2006, the Consolidated Interest
Expense and Scheduled Funded Debt Payments for such fiscal quarter would be
multiplied by four (4), (ii) for the calculation of the Fixed Charge Coverage
Ratio as of March 31, 2007, the Consolidated Interest Expense and the Scheduled
Funded Debt Payments for the two fiscal quarter period then ending would be
multiplied by two (2) and (iii) for the calculation of the Fixed Charge Coverage
Ratio as of June 30, 2007, the Consolidated Interest Expense and the Scheduled
Funded Debt Payments for the three fiscal quarter period then ending would be
multiplied by one and one-third (1 1/3).

“Flood Hazard Property” shall have the meaning set forth in Section 5.14(d).

“Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary, but shall not include Victory, Colgate, Swiftsure or UK Ltd.

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

“Funded Debt” shall mean, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person incurred, issued or assumed as the
deferred purchase price of property or services purchased by such Person (other
than trade debt incurred in the ordinary course of business and due within six
months of the incurrence thereof) that would appear as liabilities on a balance
sheet of such Person, including, without limitation, the reasonably anticipated
liability relating to any earnout obligations whether or not included on the
balance sheet of such Person, (e) the principal portion of all obligations of
such Person under Capital Leases, (f) all obligations of such Person under
Hedging Agreements to the extent required to be accounted for as a liability
under GAAP, excluding any portion thereof which would be accounted for as
interest expense under GAAP, (g) the maximum amount of all letters of credit
issued or bankers’ acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (h) all preferred Capital Stock or other equity interests issued
by such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration, (i) the principal balance outstanding under
any synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product, (j) all Indebtedness of others of
the type described in clauses (a) through (i) hereof secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed; provided that for purposes of the amount of
Indebtedness pursuant to this clause (j) shall equal the lesser of (i) such
Indebtedness, or (ii) the value of the property subject to such Lien, (k) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person of the type described in clauses (a) through (i) hereof, and (l) all
Indebtedness of the type described in clauses (a) through (i) hereof of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer; provided, however, that with respect to Funded Debt
of the Company and its Subsidiaries, Funded Debt shall not include (x)
Subordinated Indebtedness among the Borrower and the Guarantors to the extent
such Indebtedness would be eliminated on a consolidated basis or (y) any
obligation of the Company to Medtronic in connection with the termination of the
Medtronic Services Agreement in an aggregate amount not to exceed $6,100,000
during the term of this Agreement.

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“GAAP” shall mean generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, subject, however, in the
case of determination of compliance with the financial covenants set out in
Section 5.9, to the provisions of Section 1.3.

“German Breg” shall mean Breg Deutschland GmbH, a German company.

“German Buyout” shall mean the purchase by Orthofix GmbH of the remaining 48%
ownership interest in German Breg pursuant to that certain deferred purchase
agreement, dated as of February 17, 2006 by and among Orthofix GmbH, Stephan
Michels, Ronald Hansjorg, Nikolaus Murges and Albert Engal.

“Government Acts” shall have the meaning set forth in Section 2.19(a).

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

“Guarantor” shall mean the Company, Colgate, Victory and each Subsidiary
Guarantor.

“Guaranty” shall mean the guaranty of the Guarantors set forth in Article X.

“Guaranty Obligations” shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (a) to purchase any such Indebtedness or
any property constituting security therefore, (b) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (c) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (d) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount of any
Guaranty Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.

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“Hedging Agreement Provider” shall mean any Person that enters into a Secured
Hedging Agreement with a Credit Party or any of its Subsidiaries that is
permitted by Section 6.1(f) to the extent such Person is a Lender, an Affiliate
of a Lender or any other Person that was a Lender (or an Affiliate of a Lender)
at the time it entered into the Secured Hedging Agreement but has ceased to be a
Lender (or whose Affiliate has ceased to be a Lender) under the Credit
Agreement; provided, in the case of a Secured Hedging Agreement with a Person
who is no longer a Lender, such Person shall be considered a Hedging Agreement
Provider only through the stated maturity date (without extension or renewal) of
such Secured Hedging Agreement. 

“Hedging Agreements” shall mean, with respect to any Person, any agreements
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreements or similar arrangements between such Person
and one or more counterparties, any foreign currency exchange agreements,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.

“Incremental Term Facility” shall have the meaning set forth in Section 2.2.

“Indebtedness” shall mean, with respect to any Person, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person (other than customary reservations or retentions of
title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person (other than
trade debt incurred in the ordinary course of business and due within six months
of the incurrence thereof) that would appear as liabilities on a balance sheet
of such Person, including, without limitation, the reasonably anticipated
liability relating to any earnout obligations whether or not included on the
balance sheet of such Person, (e) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements, (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,
or payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
provided that for purposes of the amount of Indebtedness pursuant to this clause
(j) shall equal the lesser of (i) such Indebtedness, or (ii) the value of the
property subject to such Lien, (g) all Guaranty Obligations of such Person with
respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases plus any accrued interest
thereon, (i) all obligations of such Person under Hedging Agreements to the
extent required to be accounted for as a liability under GAAP, excluding any
portion thereof which would be accounted for as interest expense under GAAP, (j)
the maximum amount of all letters of credit issued or bankers’ acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock or other equity interest issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject to
mandatory sinking fund payments, redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
plus any accrued interest thereon, and (m) the Indebtedness of any partnership
or unincorporated joint venture in which such Person is a general partner or a
joint venturer; provided, however, that with respect to Indebtedness of the
Company, Indebtedness shall not include any obligation of the Company to
Medtronic in connection with the termination of the Medtronic Services Agreement
in an aggregate amount not to exceed $6,100,00 during the term of this
Agreement.

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“Insolvency” shall mean, with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of such term as used in Section
4245 of ERISA.

“Insolvent” shall mean being in a condition of Insolvency.

“Intellectual Property” shall mean, collectively, all Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.

“Interest Determination Date” shall have the meaning assigned thereto in the
definition of “Applicable Percentage”.

“Interest Payment Date” shall mean (a) as to any Alternate Base Rate Loan or
Swingline Loan, the last Business Day of each March, June, September and
December during the term of this Agreement and on the applicable Maturity Date,
(b) as to any LIBOR Rate Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any LIBOR Rate Loan having an
Interest Period longer than three months, (i) each three month anniversary of
the first day of such Interest Period and (ii) the last day of such Interest
Period, and (d) as to any Loan which is the subject of a mandatory prepayment
required pursuant to Section 2.7(b) hereof, the date of such prepayment.

“Interest Period” shall mean, subject to availability, with respect to any LIBOR
Rate Loan,

(a)   initially, the period commencing on the Borrowing Date or conversion date,
as the case may be, with respect to such LIBOR Rate Loan and ending one, two,
three, six, or subject to the consent of all applicable Lenders, nine months
thereafter, as selected by the Borrower in the Notice of Borrowing or Notice of
Conversion/Extension given with respect thereto; and

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(b)   thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such LIBOR Rate Loan and ending one,
two, three, six, or, subject to the consent of all applicable Lenders, nine
months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three (3) Business Days prior to the last day
of the then current Interest Period with respect thereto;

provided that the foregoing provisions are subject to the following:

(i)   if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end
on a day that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;

(ii)   any Interest Period pertaining to a LIBOR Rate Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month for
such Interest Period;

(iii)   if the Borrower shall fail to give notice as provided above, the
Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace
the affected LIBOR Rate Loan;

(iv)   any Interest Period in respect of any Loan that would otherwise extend
beyond the Maturity Date for such Loan shall end on such Maturity Date;

(v)   with regard to the Term Loan, no Interest Period shall extend beyond any
principal amortization payment date unless the portion of the Term Loan
consisting of Alternate Base Rate Loans together with the portion of the Term
Loan consisting of LIBOR Rate Loans with Interest Periods expiring prior to or
concurrently with the date such principal amortization payment date is due, is
at least equal to the amount of such principal amortization payment due on such
date; and

(vi)   no more than six (6) LIBOR Rate Loans may be in effect at any time;
provided that, for purposes hereof, LIBOR Rate Loans with different Interest
Periods shall be considered as separate LIBOR Rate Loans, even if they shall
begin on the same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the provisions hereof, be
combined at the end of existing Interest Periods to constitute a new LIBOR Rate
Loan with a single Interest Period.

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“Internal Control Event” shall mean a material weakness in, or fraud that
involves management or other employees who have a significant role in, any
Credit Party’s internal controls over financial reporting, in each case as
described in the Securities Laws, to the extent such material weakness or fraud
could reasonably be expected to cause a Material Adverse Effect.

“Investment” shall mean all investments made directly or indirectly in, to or
from any Person, whether in cash or by acquisition of shares of Capital Stock,
property, assets, indebtedness or other obligations or securities or by loan
advance, capital contribution or otherwise.

“Issuing Lender” shall mean Wachovia.

“Issuing Lender Fees” shall have the meaning set forth in Section 2.5(c).

“Joinder Agreement” shall mean a Joinder Agreement substantially in the form of
Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.

“Judgment Currency” shall have the meaning set forth in Section 9.20.

“Lender” shall have the meaning set forth in the first paragraph of this
Agreement and shall include the Issuing Lender and the Swingline Lender.

“Lender Commitment Letter” shall mean, with respect to any Lender, the letter
(or other correspondence) to such Lender from the Administrative Agent notifying
such Lender of its LOC Commitment, Revolving Commitment Percentage and/or Term
Loan Commitment Percentage.

“Letters of Credit” shall mean any letter of credit issued by the Issuing Lender
pursuant to the terms hereof, as such Letters of Credit may be amended,
modified, extended, renewed or replaced from time to time.

“Letter of Credit Fee” shall have the meaning set forth in Section 2.5(b).

“Leverage Ratio” shall mean, with respect to the Company and its Subsidiaries on
a consolidated basis for the twelve-month period ending on the last day of any
fiscal quarter of the Company, the ratio of (a) Funded Debt of the Company and
its Subsidiaries on a consolidated basis on the last day of such period to (b)
Consolidated EBITDA of the Company and its Subsidiaries for such period.

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“LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefore,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 A.M. (London time)
two (2) Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest
Period therefore, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two (2) Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; provided, however, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%). If, for any reason, neither of such rates is
available, then “LIBOR” shall mean the rate per annum at which, as determined by
the Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.

“LIBOR Lending Office” shall mean, initially, the office of each Lender
designated as such Lender’s LIBOR Lending Office in such Lender’s Administrative
Details Form; and thereafter, such other office of such Lender as such Lender
may from time to time specify to the Administrative Agent and the Borrower as
the office of such Lender at which the LIBOR Rate Loans of such Lender are to be
made.

“LIBOR Rate” shall mean a rate per annum (rounded upwards, if necessary, to the
next higher 1/100th of 1%) determined by the Administrative Agent pursuant to
the following formula:
 
LIBOR Rate =                                 LIBOR                             
           1.00 - Eurodollar Reserve Percentage
 
“LIBOR Rate Loan” shall mean Loans the rate of interest applicable to which is
based on the LIBOR Rate.

“Lien” shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).

“Loan” shall mean a Revolving Loan, a Swingline Loan and/or a Term Loan, as
appropriate.

“LOC Commitment” shall mean the commitment of the Issuing Lender to issue
Letters of Credit and, with respect to each Revolving Lender, the commitment of
such Revolving Lender to purchase participation interests in the Letters of
Credit up to the amount identified as such Revolving Lender’s “LOC Commitment”
on such Lender’s Lender Commitment Letter or in the Register, as such amount may
be modified in connection with any assignment made in accordance with the
provisions of Section 9.6(c) or reduced from time to time in accordance with the
provisions hereof.

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“LOC Committed Amount” shall have the meaning set forth in Section 2.3(a).

“LOC Documents” shall mean, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefore, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (a) the rights and obligations of the parties
concerned or (b) any collateral security for such obligations.

“LOC Obligations” shall mean, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.

“Mandatory Borrowing” shall have the meaning set forth in Section 2.3(e) and
Section 2.4(b)(ii), as the context may require.

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, operations, property, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole or the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower or the Borrower
and the Guarantors taken as a whole, to perform their obligations when such
obligations are required to be performed, under this Agreement, any of the Notes
or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents or the rights
or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

“Material Contract” shall mean any contract or other arrangement, whether
written or oral, to which any Credit Party is a party as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could
reasonably be expected to have a Material Adverse Effect.

“Material Property” shall mean real and/or personal property of the Credit
Parties with an aggregate fair market value greater than or equal to $5,000,000.

“Materials of Environmental Concern” shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.

“Maturity Date” shall mean the Revolver Maturity Date and/or the Term Loan
Maturity Date, as applicable.

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“Medicaid” shall mean that entitlement program under Title XIX of the Social
Security Act that provides federal grants to states for medical assistance based
on specific eligibility criteria.

“Medicaid Certification” shall mean recognition by a state agency or other such
entity administering a particular state’s Medicaid program that a health care
provider or supplier is in compliance with all the conditions of participation
set forth in the appropriate state and federal Medicaid Regulations.

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

“Medicaid Regulations” shall mean, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (b) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (a) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (a) above;
(c) all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (a) and (b) above; and (d)
all applicable provisions of all rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (c) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (b) above, in each case as may be amended, supplemented or
otherwise modified from time to time.

“Medical Reimbursement Programs” shall mean Medicare, Medicaid and TRICARE
programs and any other healthcare program operated by or financed in whole or in
part by any foreign, federal, state or local government and any other
non-government funded third party payor programs.

“Medicare Certification” shall mean recognition by CMS or an entity under
contract with CMS that the health care provider or supplier is in compliance
with all of the conditions of participation set forth in the Medicare
Regulations.

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

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“Medicare” shall mean that government-sponsored entitlement program under Title
XVIII of the Social Security Act that provides for a health insurance system for
eligible elderly and disabled individuals.

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

“Medtronic” shall mean Medtronic Sofamor Danek USA, Inc., a Tennessee
corporation.

“Medtronics Services Agreement” shall mean that certain Marketing Services
Agreement, effective May 1, 2005 and terminated August 10, 2006, between the
Company and Medtronic.

“Moody’s” shall mean Moody’s Investors Service, Inc or any successor rating
agency.

“Mortgage Instruments” shall mean any mortgage, deed of trust or deed to secure
debt executed by a Credit Party in favor of the Administrative Agent pursuant to
the terms of Section 5.14(d), 5.10 or 5.12, as the same may be amended,
modified, restated or supplemented from time to time.

“Mortgage Policy” shall mean an ALTA mortgagee title insurance policy issued by
the Title Insurance Company in an amount (limited to 125% of the appraised value
(if an appraisal is available) or, if no appraisal is available, then 125% of
the assessed value) satisfactory to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent.

“Mortgaged Property” shall mean any owned or leased real property of a Credit
Party with respect to which such Credit Party executes a Mortgage Instrument in
favor of the Administrative Agent.

“Multiemployer Plan” shall mean a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

“Net Cash Proceeds” shall mean the aggregate cash proceeds received by (a) the
Company or any of its Subsidiaries in respect of any Asset Disposition, Debt
Issuance, Recovery Event or sale, lease, transfer or other disposition pursuant
to Section 6.4(a)(iii)(B) and (b) the Company or any of the Company’s
Subsidiaries in respect of any Equity Issuance, in each case net of (i) direct
costs paid or payable as a result thereof (including, without limitation,
reasonable legal, accounting and investment banking fees, and sales
commissions), (ii) taxes paid or payable as a result thereof and (iii) with
respect to Indebtedness incurred pursuant to Section 6.1(h), the direct costs
incurred prior to or within 7 days of the issuance of such Indebtedness and paid
or payable as a result of any call spread or simultaneous purchase and sale of
call options for the same number of shares instituted with respect to such
Indebtedness in an aggregate amount up to 15% of the gross proceeds received by
the Company and its Subsidiaries from such Indebtedness; it being understood
that “Net Cash Proceeds” shall include, without limitation, any cash received
upon the sale or other disposition of any non-cash consideration received by the
Company or any of its Subsidiaries in respect of such Asset Disposition, Equity
Issuance, Debt Issuance, Recovery Event or sale, lease, transfer or other
disposition pursuant to Section 6.4(a)(iii)(B).

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“Note” or “Notes” shall mean the Revolving Notes, the Swingline Note and/or the
Term Notes, collectively, separately or individually, as appropriate.

“Notice of Borrowing” shall have the meaning set forth in Section 2.1(b)(i).

“Notice of Conversion/Extension” shall have the meaning set forth in Section
2.10.

“Obligations” shall mean, collectively, Loans and LOC Obligations.

“OFAC” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.

“OIG” shall mean the Office of the Inspector General for the United States
Department of Health and Human Services.

“Participant” shall have the meaning set forth in Section 9.6(b).

“Participation Interest” shall mean the purchase by a Revolving Lender of a
participation interest in Letters of Credit as provided in Section 2.3 and in
Swingline Loans as provided in Section 2.4.

“Patent License” shall mean any agreement, whether written or oral, providing
for the grant by or to the Borrower or any of its Subsidiaries which are Credit
Parties of any right to manufacture, use or sell any invention covered by a
Patent, including, without limitation, any thereof referred to in Schedule 3.16.

“Patents” shall mean (a) all patents of the United States or any other country
and all reissues and extensions thereof, including, without limitation, any
thereof referred to in Schedule 3.16, and (b) all applications for patents of
the United States or any other country and all divisions, continuations and
continuations-in-part thereof, including, without limitation, any thereof
referred to in Schedule 3.16.

“Patriot Act” shall have the meaning set forth in Section 9.18.

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.

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“Permitted Acquisition” shall mean any acquisition or any series of related
acquisitions by any Credit Party of the assets or a majority of the Voting Stock
or equity interests of a Person or any division, line of business or other
business unit of such Person (such Person or such division, line of business or
other business unit of such Person referred to herein as the “Target”), in each
case that is a type of business (or assets used in a type of business) permitted
to be engaged in by the Credit Parties pursuant to this Credit Agreement, so
long as (a) no Default or Event of Default shall then exist or would exist after
giving effect thereto, (b) to the extent required under this Agreement, the
Administrative Agent, on behalf of the Lenders, shall have received (or shall
receive in connection with the closing of such acquisition), a first priority
perfected security interest in all property with such exceptions as are
consistent with Permitted Liens or otherwise reasonably approved by the
Administrative Agent (including, without limitation, Capital Stock or equity
interests) acquired with respect to the Target and the Target, if a Person,
shall have executed a Joinder Agreement, (c) such acquisition is not a “hostile”
acquisition and has been approved by the board of directors and/or shareholders
(or comparable persons or groups) of the applicable Credit Party and the Target,
(d) the total consideration (including, without limitation, cash, assumed
Indebtedness, earnout payments and any other deferred payment but excluding the
Capital Stock of the applicable Credit Party) paid for the Target acquired in
such acquisition or series of related acquisitions shall not exceed $40,000,000
for any individual acquisition (or series of related acquisitions) or
$100,000,000 (of which only $25,000,000 in the aggregate may be acquisitions or
portions of acquisitions involving assets situated outside the United States of
America or the Capital Stock of any Person organized outside the United States
of America) in the aggregate during the term of this Agreement, (e) to the
extent the total consideration of any Permitted Acquisition is in excess of
$15,000,000, the Target shall have earnings before interest, taxes, depreciation
and amortization in an amount greater than $0, determined on a Pro Forma Basis
for the period of twelve fiscal months most recently ended, (f) after giving
effect to such acquisition, there shall be at least $10,000,000 of borrowing
availability under the Revolving Committed Amount, (g) the Administrative Agent
shall have received a certificate from a Responsible Officer of the Borrower
certifying that, in the reasonable judgment of the Credit Parties, the Credit
Parties have conducted such financial, legal, environmental and consulting due
diligence with respect to the Target as a substantially similarly situated
prudent purchaser acquiring substantially similar property and/or assets would
customarily conduct, and (h) to the extent the total consideration of any
Permitted Acquisition is in excess of $5,000,000 or the Borrower requests a
Revolving Loan to fund such Permitted Acquisition, the Borrower shall provide
not less than fifteen (15) days prior to the consummation of such Permitted
Acquisition (i) a reasonably detailed description of the material terms of such
Permitted Acquisition (including, without limitation, the purchase price and
method and structure of payment) and of each Target, (ii) to the extent
available, financial statements of the Target for the previous two years and
year-to-date financial statements of the Target, and (iii) a certificate, in
form and substance reasonably satisfactory to the Administrative Agent, executed
by a Responsible Officer of the Borrower (A) setting forth the best good faith
estimate of the total consideration (including, without limitation, cash,
Capital Stock, assumed Indebtedness, earnout payments and any other deferred
payment) to be paid for each Target, and (B) certifying that such Permitted
Acquisition complies with the requirements of this Credit Agreement, and (C)
certifying and demonstrating that after giving effect to such Permitted
Acquisition and any borrowings in connection therewith on a Pro Forma Basis, the
Company and its Subsidiaries will be in compliance with the financial covenants
set forth in Section 5.9.

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“Permitted Investments” shall mean:

(a)   cash and Cash Equivalents;

(b)   receivables owing to the Borrower or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created, acquired or made
in the ordinary course of business and payable or dischargeable in accordance
with customary trade terms;

(c)   Investments (including, without limitation, the purchase or ownership of
Capital Stock) by any Credit Party in any other Credit Party (other than the
Company) and Subordinated Indebtedness owing by any Credit Party (other than the
Company) to any other Credit Party; provided that any Investment or Subordinated
Indebtedness made or issued by a Credit Party (other than the Company) in or to
Colgate or Victory shall be made or issued in accordance with the Tax Structure
Documents;

(d)   loans and advances to officers, directors, employees and Affiliates that
are not Credit Parties or their Subsidiaries in the ordinary course of business
in an aggregate amount not to exceed $500,000 at any time outstanding;

(e)   Investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and other disputes with, customers and suppliers
arising in the ordinary course of business;

(f)   Investments by any Foreign Subsidiary in any Credit Party or any other
Foreign Subsidiary and Investments by the Company in any Foreign Subsidiary;

(g)   Investments, acquisitions or transactions permitted under Section 6.4(b);

(h)   Permitted Acquisitions;

(i)   Hedging Agreements to the extent permitted pursuant to Section 6.1(f);

(j)   Investments set forth on Schedule 6.5;

(k)   loans and advances by Colgate and Victory to the Company to the extent
that such loans and advances would be permitted by Section 6.10(d), (f) or (i)
if made as Restricted Payments rather than loans and advances;

(l)   Investments in German Breg pursuant to the German Buyout in an aggregate
amount not to exceed $4,000,000;

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(m)   direct costs referred to in clause (iii) of the definition of Net Cash
Proceeds; and

(n)   additional loan advances and/or Investments of a nature not contemplated
by the foregoing clauses hereof; provided that such loans, advances and/or
Investments made pursuant to this clause (n) shall not exceed an aggregate
amount of $5,000,000.

“Permitted Liens” shall mean:

(a)   Liens created by or otherwise existing, under or in connection with this
Agreement or the other Credit Documents in favor of the Administrative Agent and
each other Secured Party;

(b)   Liens securing purchase money Indebtedness and Capital Lease Obligations
to the extent permitted under Section 6.1(c), including Liens existing on any
asset at the time of acquisition pursuant to a Permitted Acquisition (other than
any such Liens created in contemplation of such acquisition that do not secure
the purchase price); provided that (i) any such Lien attaches to such property
concurrently with or within thirty (30) days after the acquisition thereof and
(ii) such Lien attaches solely to the property so acquired in such transaction;

(c)   Liens for taxes, assessments, charges or other governmental levies not yet
due or as to which the period of grace (not to exceed 60 days), if any, related
thereto has not expired or which are being contested in good faith by
appropriate proceedings; provided that adequate reserves with respect thereto
are maintained on the books of the Borrower or any of its Subsidiaries, as the
case may be, in conformity with GAAP;

(d)   carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other
like Liens arising in the ordinary course of business which are not overdue for
a period of more than sixty (60) days or which are being contested in good faith
by appropriate proceedings;

(e)   pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liability
to insurance carriers under insurance or self-insurance arrangements incurred in
the ordinary course of business;

(f)      deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;

(g)   any extension, renewal or replacement (or successive extensions, renewals
or replacements), in whole or in part, of any Lien referred to in the foregoing
clauses; provided that such extension, renewal or replacement Lien shall be
limited to all or a part of the property which secured the Lien so extended,
renewed or replaced;

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(h)   Liens in favor of a Hedging Agreement Provider in connection with any
Secured Hedging Agreement, but only (i) to the extent such Liens are on the
Collateral and are shared ratably with the Administrative Agent and (ii) if such
Hedging Agreement Provider, the Administrative Agent and the Lenders shall share
the proceeds of the Collateral subject to such Liens in accordance with the
terms of Section 2.12(b);

(i)   Liens existing on the Closing Date and set forth on Schedule 1.1-3;
provided that no such Lien shall at any time be extended to cover property or
assets other than the property or assets subject thereto on the Closing Date;

(j)   easements, rights-of-way, restrictions (including zoning restrictions),
minor defects or irregularities in title and other similar charges or
encumbrances shown on any Mortgage Policy or not, in any material respect,
impairing the use of the encumbered Property for its intended purposes;

(k)   Liens on the assets of Foreign Subsidiaries securing Indebtedness of
Foreign Subsidiaries permitted by Section 6.1(e); and

(l)   Liens on equipment arising from precautionary UCC financing statements
relating to the lease of such equipment to the extent permitted by this
Agreement.

“Person” shall mean an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.

“Plan” shall mean, at any particular time, any employee benefit plan which is
covered by Title IV of ERISA and in respect of which any Credit Party or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in
Section 3(5) of ERISA.

“Pledge Agreement” shall mean the pledge agreement dated as of the Closing Date
executed by the Credit Parties in favor of the Administrative Agent, as amended,
modified, restated or supplemented from time to time in accordance with its
terms and the terms hereof.

“Prime Rate” shall have the meaning set forth in the definition of “Alternate
Base Rate”.

“Pro Forma Basis” shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
twelve-month period ending as of the most recent month end ending at least
twenty (20) days preceding the date of such transaction.

“Properties” shall have the meaning set forth in Section 3.10(a).

“Purchasing Lenders” shall have the meaning set forth in Section 9.6(c).

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“Recovery Event” shall mean the receipt by the Company and its Subsidiaries of
any cash insurance proceeds or condemnation award payable by reason of theft,
loss, physical destruction or damage, taking or similar event with respect to
any Material Property.

“Register” shall have the meaning set forth in Section 9.6(d).

“Reorganization” shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.

“Related Fund” shall mean, with respect to any Lender, any fund or trust or
entity that invests in commercial bank loans in the ordinary course of business
and is advised or managed by (a) such Lender, (b) an Affiliate of such Lender,
(c) any other Lender or any Affiliate thereof or (d) the same investment advisor
as any Person described in clauses (a) - (c).

“Reportable Event” shall mean any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty-day notice period is
waived under PBGC Reg. §4043.

“Required Lenders” shall mean, at any time, Lenders holding in the aggregate a
majority of (i) the Commitments (and Participation Interests therein) or (ii) if
the Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in any
Letters of Credit and of the Swingline Lender in Swingline Loans); provided,
however, that if any Lender shall be a Defaulting Lender at such time, then
there shall be excluded from the determination of Required Lenders, Obligations
(including Participation Interests) owing to such Defaulting Lender and such
Defaulting Lender’s Commitments, or after termination of the Commitments, the
principal balance of the Obligations owing to such Defaulting Lender.

“Requirement of Law” shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each 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 Material Property or to which such
Person or any of its Material Property is subject.

“Responsible Officer” shall mean, as to (a) the Company, the President, the
Chief Executive Officer, the Chief Financial Officer and the Treasurer thereof
or (b) any other Credit Party or any Subsidiary thereof, the President, the
Chief Executive Officer, the Chief Financial Officer, the Treasurer and any
other duly authorized director or officer thereof.

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“Restricted Payments” shall mean (a) any dividend or other distribution, direct
or indirect, on account of any shares of any class of Capital Stock of any
Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (d) any payment with respect to any earnout obligation, (e) any
payment or prepayment of principal of, premium, if any, or interest on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Indebtedness or (f) the payment by any Credit
Party or any of its Subsidiaries of any management or consulting fee to any
Person or of any salary, bonus or other form of compensation to any Person who
is directly or indirectly a significant partner, shareholder, owner or executive
officer of any such Person, to the extent such fee, salary, bonus or other form
of compensation is either not included in the corporate overhead of any Credit
Party or such Subsidiary or, to the extent such salary, bonus or other form of
compensation, is reimbursed by the Company.

“Revolver Increase” shall have the meaning set forth in Section 2.1.

“Revolver Maturity Date” shall mean September 22, 2012.

“Revolving Commitment” shall mean, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to the amount identified as such
Revolving Lender’s “Revolving Commitment” on such Lender’s Lender Commitment
Letter or in the Register, as such amount may be modified in connection with any
assignment made in accordance with the provisions of Section 9.6(c) or increased
(in accordance with Section 2.1(f)) or reduced from time to time in accordance
with the provisions hereof.

“Revolving Commitment Percentage” shall mean, for each Revolving Lender, the
percentage identified as its “Revolving Commitment Percentage” on such Lender’s
Lender Commitment Letter or in the Register, as such percentage may be modified
in connection with any assignment made in accordance with the provisions of
Section 9.6(c).

“Revolving Committed Amount” shall have the meaning set forth in Section 2.1.

“Revolving Lender” shall mean, as of any date of determination, each Lender with
a Revolving Commitment greater than $0.

“Revolving Loans” shall have the meaning set forth in Section 2.1.

“Revolving Note” or “Revolving Notes” shall mean the promissory notes of the
Borrower in favor of each of the Revolving Lenders evidencing the Revolving
Loans provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

“S&P” shall mean Standard & Poor’s Ratings Service, a division of The McGraw
Hill Companies, Inc. or any successor or rating agency.

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“Sanctioned Country” shall mean a country subject to a sanctions program
identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/ eotffc/ofac/sanctions/index.html, or as otherwise
published from time to time.

“Sanctioned Person” shall mean (a) a Person named on the list of “Specially
Designated Nationals and Blocked Persons” maintained by OFAC available at
http://www.treas.gov/offices/eotffc/ofac/sdn/index.html, or as otherwise
published from time to time, or (b) (i) an agency of the government of a
Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or
(iii) a person resident in a Sanctioned Country, to the extent subject to a
sanctions program administered by OFAC.

“Sarbanes-Oxley” shall mean the Sarbanes-Oxley Act of 2002.

“Scheduled Funded Debt Payments” shall mean, as of any date of determination for
the Company and its Subsidiaries, the sum of all scheduled payments of principal
on Funded Debt for the applicable period ending on the date of determination
(including the principal component of payments due on Capital Leases during the
applicable period ending on the date of determination).

“Secured Hedging Agreement” shall mean any Hedging Agreement between a Credit
Party and a Hedging Agreement Provider, or any agreement relating to Bank
Products between a Credit Party and an Agent or Affiliate thereof, as amended,
modified, restated or supplemented from time to time in accordance with its
terms.

“Secured Party” shall mean each of the Administrative Agent, the Lenders and the
Hedging Agreement Providers, together with their respective successors and
assigns.

“Securities Account Control Agreement” shall mean an agreement, among a Credit
Party, a securities intermediary, and the Administrative Agent, which agreement
is or in a form reasonably acceptable to the Administrative Agent and which
provides the Administrative Agent with “control” (as such term is used in
Articles 8 and 9 of the Uniform Commercial Code) over the securities account(s)
described therein, as the same may be as amended, modified, extended, restated,
replaced, or supplemented from time to time.

“Securities Act” shall mean the Securities Act of 1933, together with any
amendment thereto or replacement thereof and any rules or regulations
promulgated thereunder.

“Securities Laws” shall mean the Securities Act, the Exchange Act,
Sarbanes-Oxley and the applicable accounting and auditing principles, rules,
standards and practices promulgated, approved or incorporated by the SEC or the
Public Company Accounting Oversight Board, as each of the foregoing may be
amended and in effect on any applicable date hereunder.

“Security Agreement” shall mean the security agreement dated as of the Closing
Date executed by the Credit Parties in favor of the Administrative Agent, as
amended, modified, restated or supplemented from time to time in accordance with
its terms and the terms hereof.

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“Security Documents” shall mean the Security Agreement, the Pledge Agreement,
the UK Security Documents, the Mortgage Instruments, and such other documents
executed and delivered in connection with the grant, attachment and perfection
of the Administrative Agent’s security interests and liens arising thereunder,
including, without limitation, UCC financing statements.

“Single Employer Plan” shall mean any Plan which is not a Multiemployer Plan.

“Social Security Act” shall mean the Social Security Act as set forth in Title
42 of the United States Code, as amended, and any successor statute thereto, as
interpreted by the rules and regulations issued thereunder, in each case as in
effect from time to time. References to sections of the Social Security Act
shall be construed also to refer to any successor sections.

“Solvent” shall mean, with respect to any Person on any date (a) the fair
saleable value of such Person’s assets, measured on a going concern basis,
exceeds all probable liabilities of such Person, including contingent
liabilities and those liabilities to be incurred pursuant to this Credit
Agreement, or (b) such Person (i) does not have unreasonably small capital in
relation to the business in which it is or proposes to be engaged, (ii) has not
incurred, or believes that it will incur after giving effect to the transactions
contemplated by this Credit Agreement, debts beyond its ability to pay such
debts as they become due, (iii) has not suspended making payments on any of its
debts unless subject to a good faith dispute or (iv) by reason of actual or
anticipated financial difficulties, has not commenced negotiations with one or
more of its creditors in order to reschedule the payment of such indebtedness.

“SRL” shall mean Orthofix SRL/DMO, an Italian corporation.

“Subordinated Indebtedness” shall mean any Indebtedness incurred by any Credit
Party that is (a) specifically subordinated in right of payment and performance
to the prior payment of the Credit Party Obligations on terms reasonably
acceptable to the Administrative Agent and (b) evidenced by promissory notes, to
the extent such Indebtedness is owed to another Credit Party, which promissory
notes shall be pledged to the Administrative Agent as Collateral for the Credit
Party Obligations.

“Subsidiary” shall mean (a) as to any Person other than the Company, a
corporation, partnership, limited liability company or other entity of which
shares of stock or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership, limited liability company or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person, and (b) as to the Company, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interest the Company owns at the time directly or indirectly through one or more
intermediaries, or both, of greater than 50%. Unless otherwise qualified, all
references to a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Company.

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“Subsidiary Guarantor” shall have the meaning set forth in the first paragraph
of this Agreement.

“Survey” shall mean any maps or plats of an as-built survey of the site of a
Mortgaged Property, which maps or plats and the surveys on which they are based
shall be sufficient to delete any standard printed survey exception contained in
the applicable title policy and be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and adopted by
the American Land Title Association and the American Congress on Surveying and
Mapping in 2005, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following: (a)
the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (b) the lines of
streets abutting the sites and width thereof; (c) all access and other easements
appurtenant to the sites necessary to use the sites; (d) all roadways, paths,
driveways, easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (e) any
encroachments on any adjoining property by the building structures and
improvements on the sites; and (f) if the site is described as being on a filed
map, a legend relating the survey to said map.

“Swiftsure” shall have the meaning set forth in the first paragraph of this
Agreement.

“Swingline Commitment” shall mean the commitment of the Swingline Lender to make
Swingline Loans in an aggregate principal amount at any time outstanding up to
the Swingline Committed Amount, and the commitment of the Revolving Lenders to
purchase participation interests in the Swingline Loans as provided in Section
2.4(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.

“Swingline Committed Amount” shall have the meaning set forth in Section 2.4(a).

“Swingline Lender” shall mean Wachovia.

“Swingline Loan” or “Swingline Loans” shall have the meaning set forth in
Section 2.4(a).

“Swingline Note” shall mean the promissory note of the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.4(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.

“Target” shall have the meaning set forth in the definition of “Permitted
Acquisition”.

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“Tax Structure Documents” shall mean a collective reference to the following
documents: (a) Offer Letter dated December 30, 2003 from Colgate to UK Ltd, (b)
Amendment Agreement dated October 25, 2005 between Colgate and UK Ltd, (c)
Written Notification of Termination and Offer of Amended Terms dated October 25,
2005 from Colgate to UK Ltd, (d) Acknowledgment of Termination dated October 25,
2005 from UK Ltd to Colgate, (e) Promissory Note in the principal amount of
$110,546,815 dated October 25, 2005 by UK Ltd for the benefit of Colgate, (f)
Debenture Receivable Sale and Purchase Agreement dated October 25, 2005 between
Colgate and Victory (“Receivable Sale”), (g) 1,999,999 ordinary shares of
Victory issued to Colgate as consideration for Receivable Sale, (h) Share
Subscription Agreement dated October 25, 2005 between the Borrower and
Swiftsure, (i) Subscription Request Letter dated October 25, 2005 from Swiftsure
to the Borrower, (j) Acknowledgment of Subscription Request Letter dated October
25, 2005 by the Borrower to Swiftsure (“Subscription Request Letter”), (k) 999
ordinary shares of Swiftsure issued to the Borrower in connection with the
Subscription Request Letter, (l) Offer Letter dated October 26, 2005 from
Victory to Swiftsure, (m) Guarantee dated October 26, 2005 by the Borrower for
the benefit of Victory, (n) Share Sale and Purchase Agreement dated October 26,
2005 between the Borrower and Swiftsure (“Share Sale and Purchase Agreement”),
(o) Stock Transfer Form dated October 26, 2005 relating to the Borrower’s sale
of one share of UK Ltd to Swiftsure (“Stock Transfer Form”), (p) one ordinary
share of UK Ltd issued to Swiftsure in connection with the Stock Transfer Form,
(q) one ordinary shares of Swiftsure issued to the Borrower in connection with
the Share Sale and Purchase Agreement and (r) any other agreement entered into
to implement the terms and arrangements contemplated by the foregoing documents
that is reasonably acceptable to the Administrative Agent.

“Taxes” shall have the meaning set forth in Section 2.18.

“Term Loan” shall have the meaning set forth in Section 2.2(a).

“Term Loan Commitment” shall mean, with respect to each Term Loan Lender, the
commitment of such Term Loan Lender to make its portion of the Term Loan in a
principal amount equal to such Term Loan Lender’s Term Loan Commitment
Percentage of the Term Loan Committed Amount (and for purposes of making
determinations of Required Lenders hereunder after the Closing Date, the
principal amount outstanding on the Term Loan).

“Term Loan Commitment Percentage” shall mean, for any Term Loan Lender, the
percentage identified as its Term Loan Commitment Percentage on such Lender’s
Lender Commitment Letter, as such percentage may be modified in connection with
any Incremental Term Facility in accordance with the provisions of Section
2.2(e) or any assignment made in accordance with the provisions of
Section 9.6(c).

“Term Loan Committed Amount” shall have the meaning set forth in Section 2.2(a).

“Term Loan Lender” shall mean, as of any date of determination, each Lender that
holds a portion of the outstanding Term Loan.

“Term Loan Maturity Date” shall mean September 22, 2013.

“Term Note” or “Term Notes” shall mean the promissory notes of the Borrower in
favor of each of the Term Loan Lenders evidencing the portion of the Term Loan
provided pursuant to Section 2.2(d), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, restated,
supplemented, extended, renewed or replaced from time to time.

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“Title Insurance Company” shall mean Chicago Title Insurance Company or any
other title insurance company approved by the Administrative Agent in its
reasonable discretion.

“Trademark License” shall means any agreement, written or oral, providing for
the grant by or to the Borrower or any of its Subsidiaries which are Credit
Parties of any right to use any Trademark, including, without limitation, any
thereof referred to in Schedule 3.16.

“Trademarks” shall mean (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in Schedule
3.16.

“Tranche” shall mean the collective reference to LIBOR Rate Loans whose Interest
Periods begin and end on the same day. A Tranche may sometimes be referred to as
a “LIBOR Tranche”.

“Transfer Effective Date” shall have the meaning set forth in each Assignment
Agreement.

“TRICARE” means the United States Department of Defense healthcare program for
service families (including TRICARE Prime, TRICARE Extra and TRICARE Standard),
and any successor or predecessor thereof, including without limitation, CHAMPUS.

“Type” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan or
LIBOR Rate Loan, as the case may be.

“UK Ltd” shall have the meaning set forth in the first paragraph of this
Agreement.

“UK Security Documents” shall mean (a) that certain pledge agreement dated as of
the Closing Date executed by Colgate in favor of the Administrative Agent with
respect to the Capital Stock of Victory, (b) that certain pledge agreement dated
as of the Closing Date executed by the Borrower in favor of the Administrative
Agent with respect to the Capital Stock of Swiftsure, (c) that certain pledge
agreement dated as of the Closing Date executed by Swiftsure in favor of the
Administrative Agent with respect to the Capital Stock of UK Ltd, (d) that
certain debenture dated as of the Closing Date executed by Colgate in favor of
the Administrative Agent, (e) that certain debenture dated as of the Closing
Date executed by Victory in favor of the Administrative Agent, (f) that certain
debenture dated as of the Closing Date executed by Swiftsure in favor of the
Administrative Agent and (g) that certain debenture dated as of the Closing Date
executed by UK Ltd in favor of the Administrative Agent, in each case as
amended, modified, restated or supplemented from time to time in accordance with
its terms and the terms hereof.

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“U.S.” or “United States” shall mean the United States of America.

“Victory” shall have the meaning set forth in the first paragraph of this
Agreement.

“Voting Stock” shall mean, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may be or have been suspended by the happening of such a contingency.

“Wachovia” shall mean Wachovia Bank, National Association, a national banking
association, together with its successors and/or assigns.

“WCM” shall mean Wachovia Capital Markets, LLC.

“Works” shall mean all works which are subject to copyright protection pursuant
to Title 17 of the United States Code.

 
Section 1.2
Other Definitional Provisions.

(a)   Unless otherwise specified therein, all terms defined in this Agreement
shall have such defined meanings when used in the Notes or other Credit
Documents or any certificate or other document made or delivered pursuant
hereto.

(b)   The words “hereof”, “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement, and Section, subsection, Schedule
and Exhibit references are to this Agreement unless otherwise specified.

(c)   The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

 
Section 1.3
Accounting Terms.

Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Company delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrower and the Required Lenders.

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The Borrower shall deliver to the Administrative Agent and each Lender at the
same time as the delivery of any annual or quarterly financial statements given
in accordance with the provisions of Section 5.1, (a) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (b) a reasonable estimate of the effect on the financial statements on
account of such changes in application.

Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made in determining compliance for any applicable
period with the financial covenants set forth in Section 5.9 (including without
limitation for purposes of the definition of “Pro Forma Basis” set forth in
Section 1.1), after consummation of any Permitted Acquisition, (i) income
statement items and other balance sheet items (whether positive or negative)
attributable to the Target acquired in such transaction shall be included in
such calculations to the extent relating to such applicable period, and (ii)
Indebtedness of a Target that is retired in connection with a Permitted
Acquisition shall be excluded from such calculations and deemed to have been
retired as of the first day of such applicable period, in each case in
accordance with Regulation S-X under the Securities Act, as amended, applicable
to a Registration Statement under such Act on Form S-1.
 
ARTICLE II

THE LOANS; AMOUNT AND TERMS

 
Section 2.1
Revolving Loans; Revolver Increase.

(a)   Revolving Commitment. During the Commitment Period, subject to the terms
and conditions hereof, each Revolving Lender severally, but not jointly, agrees
to make revolving credit loans (“Revolving Loans”) to the Borrower from time to
time in an aggregate principal amount of up to FORTY-FIVE MILLION DOLLARS
($45,000,000) (as such aggregate maximum amount may be reduced from time to time
as provided in Section 2.6, the “Revolving Committed Amount”) for the purposes
hereinafter set forth; provided, however, that (i) with regard to each Revolving
Lender individually, the sum of such Revolving Lender’s Revolving Commitment
Percentage of outstanding Revolving Loans plus such Revolving Lender’s Revolving
Commitment Percentage of outstanding Swingline Loans plus such Revolving
Lender’s Revolving Commitment Percentage of outstanding LOC Obligations shall
not exceed such Revolving Lender’s Revolving Commitment and (ii) with regard to
the Revolving Lenders collectively, the sum of the outstanding Revolving Loans
plus outstanding Swingline Loans plus outstanding LOC Obligations shall not
exceed the Revolving Committed Amount. Revolving Loans may consist of Alternate
Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower
may request, and may be repaid or prepaid and reborrowed in accordance with the
provisions hereof; provided, however, Revolving Loans made on the Closing Date
or on any of the three (3) Business Days following the Closing Date may only
consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be made by each
Revolving Lender at its LIBOR Lending Office and Alternate Base Rate Loans at
its Domestic Lending Office.

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(b)   Revolving Loan Borrowings.

(i)   Notice of Borrowing. The Borrower shall request a Revolving Loan borrowing
by written notice (a “Notice of Borrowing”) substantially in the form of the
notice attached as Schedule 2.1(b)(i) (or telephone notice promptly confirmed by
delivery to the Administrative Agent of a Notice of Borrowing by fax or other
electronic notice with confirmed receipt from the recipient) to the
Administrative Agent not later than 12:00 Noon (Charlotte, North Carolina time)
on the Business Day of the requested borrowing in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date of the requested
borrowing in the case of LIBOR Rate Loans. Each such request for borrowing shall
be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business Day), (C) the
aggregate principal amount to be borrowed on such date, (D) whether the
borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a
combination thereof, and (E) if LIBOR Rate Loans are requested, the Interest
Period(s) therefore. If the Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan,
then such notice shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such notice shall be
deemed to be a request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Revolving Lender promptly upon
receipt of each Notice of Borrowing, of the contents thereof and each such
Revolving Lender’s share thereof.

(ii)   Minimum Amounts. Each Revolving Loan shall be in a minimum aggregate
amount of $1,000,000 and in integral multiples of $500,000 in excess thereof (or
the remaining amount of the Revolving Committed Amount, if less).

(iii)   Advances. Each Revolving Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
specified in Section 9.2, or at such other office as the Administrative Agent
may designate in writing, by 2:00 P.M. (Charlotte, North Carolina time) on the
date specified in the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such borrowing will then be
made available to the Borrower by the Administrative Agent by crediting the
account of the Borrower designated in the Account Designation Letter (or as
otherwise agreed by the Borrower and the Administrative Agent) with the
aggregate of the amounts made available to the Administrative Agent by the
Revolving Lenders and in like funds as received by the Administrative Agent.

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(c)   Repayment. The principal amount of all Revolving Loans shall be due and
payable in full on the Revolver Maturity Date, unless accelerated sooner
pursuant to Section 7.2.

(d)   Interest. Subject to the provisions of Section 2.9, Revolving Loans shall
bear interest as follows:

(i)   Alternate Base Rate Loans. During such periods as Revolving Loans shall be
comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage; and

(ii)   LIBOR Rate Loans. During such periods as Revolving Loans shall be
comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at
a per annum rate equal to the sum of the LIBOR Rate plus the Applicable
Percentage.

Interest on Revolving Loans shall be payable in arrears on each Interest Payment
Date.

(e)   Revolving Notes; Covenant to Pay. Each Revolving Lender’s Revolving
Commitment shall be evidenced by a duly executed promissory note of the Borrower
to such Revolving Lender in substantially the form of Schedule 2.1(e). The
Borrower covenants and agrees to pay the Revolving Loans in accordance with the
terms of this Agreement.

(f)   Revolver Increase. Subject to the terms and conditions set forth herein,
the Borrower shall have the right, at any time and from time to time prior to
the Revolver Maturity Date, to incur additional Indebtedness under this Credit
Agreement in the form of an increase to the Revolving Committed Amount (each a
“Revolver Increase”) by an aggregate amount of up to (a) ONE HUNDRED TWENTY-FIVE
MILLION DOLLARS ($125,000,000) less (b) the sum of (i) the aggregate amount of
any prior Incremental Term Facility established pursuant to Section 2.2(e) plus
(ii) the aggregate amount of any prior Revolver Increases established pursuant
to this Section 2.1(f). The following terms and conditions shall apply to each
Revolver Increase: (i) the loans made under any such Revolver Increase (each an
“Additional Revolving Loan”) shall constitute Credit Party Obligations and will
be secured and guaranteed with the other Credit Party Obligations on a pari
passu basis, (ii) the proceeds of any Additional Revolving Loan will be used for
the purposes set forth in Section 3.11, (iii) the Borrower shall execute a
Revolving Note in favor of any new Lender or any existing Lender requesting a
Revolving Note whose Revolving Commitment is created or increased, (iv) the
conditions to Extensions of Credit in Section 4.2 shall have been satisfied, (v)
the Administrative Agent shall have received an opinion or opinions (including,
if reasonably requested by the Administrative Agent, local counsel opinions) of
counsel for the Credit Parties, addressed to the Administrative Agent and the
Lenders, in form and substance acceptable to the Administrative Agent, (vi) any
such Revolver Increase shall be in a minimum principal amount of $15,000,000 or,
if less, the maximum remaining amount permitted pursuant to this Section 2.1(f),
(vii) if the interest rate margin on any Revolver Increase would be more than
the Applicable Percentage for the existing Revolving Loans, the Applicable
Percentage on the existing Revolving Loans shall be increased such that the
Applicable Percentage on the existing Revolving Loans is equal to the interest
rate margin on such Revolver Increase, and (viii) the Administrative Agent shall
have received from the Borrower updated financial projections for the remainder
of the projection term set forth in Section 3.1(e) and an officer’s certificate,
in each case in form and substance reasonably satisfactory to the Administrative
Agent, demonstrating that, after giving effect to any such Revolver Increase on
a Pro Forma Basis, the Borrower will be in compliance with the financial
covenants set forth in Section 5.9 and no Default or Event of Default shall
exist. No existing Lender shall have any obligation to provide all or any
portion of the Revolver Increase. The Administrative Agent is authorized to
enter into, on behalf of the Lenders, any amendment to this Credit Agreement or
any other Credit Document as may be necessary to incorporate the terms of any
new Revolver Increase therein.

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Section 2.2
Term Loan Facility; Incremental Term Loan.

(a)   Term Loan. Subject to the terms and conditions hereof and in reliance upon
the representations and warranties set forth herein, each Term Loan Lender
severally agrees to make available to the Borrower on the Closing Date, by
transfer of funds as directed by the Administrative Agent to the Borrower’s
account set forth in the Account Designation Letter, such Term Loan Lender’s
Term Loan Commitment Percentage of a term loan in Dollars (the “Term Loan”) in
the aggregate principal amount of THREE HUNDRED THIRTY MILLION DOLLARS
($330,000,000) (the “Term Loan Committed Amount”) for the purposes hereinafter
set forth. The Term Loan may consist of Alternate Base Rate Loans or LIBOR Rate
Loans, or a combination thereof, as the Borrower may request; provided that on
the Closing Date the Term Loan shall only consist of Alternate Base Rate Loans.
Amounts repaid or prepaid on the Term Loan may not be reborrowed.

(b)   Repayment of Term Loan. The principal outstanding amount of the Term Loan
as of the Closing Date shall be repaid in twenty-eight (28) consecutive
quarterly installments as follows, unless accelerated sooner pursuant to
Section 7.2:

Principal Amortization
Payment Date
Term Loan
Principal Amortization Payment
December 31, 2006
$825,000
March 31, 2007
$825,000
June 30, 2007
$825,000
September 30, 2007
$825,000
December 31, 2007
$825,000

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Principal Amortization
Payment Date
Term Loan
Principal Amortization Payment
March 31, 2008
$825,000
June 30, 2008
$825,000
September 30, 2008
$825,000
December 31, 2008
$825,000
March 31, 2009
$825,000
June 30, 2009
$825,000
September 30, 2009
$825,000
December 31, 2009
$825,000
March 31, 2010
$825,000
June 30, 2010
$825,000
September 30, 2010
$825,000
December 31, 2010
$825,000
March 31, 2011
$825,000
June 30, 2011
$825,000
September 30, 2011
$825,000
December 31, 2011
$825,000
March 31, 2012
$825,000
June 30, 2012
$825,000
September 30, 2012
$825,000
December 31, 2012
$77,550,000
March 31, 2013
$77,550,000
June 30, 2013
$77,550,000
Term Loan Maturity Date
The remainder of the outstanding Term Loan

(c)   Interest on the Term Loan. Subject to the provisions of Section 2.9, the
Term Loan shall bear interest as follows:

(i)   Alternate Base Rate Loans. During such periods as the Term Loan shall be
comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall
bear interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage; and

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(ii)   LIBOR Rate Loans. During such periods as the Term Loan shall be comprised
of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per
annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

Interest on the Term Loan shall be payable in arrears on each Interest Payment
Date.

(d)   Term Notes. Each Term Loan Lender’s Term Loan Commitment Percentage of the
Term Loan Committed Amount shall be evidenced by a duly executed promissory note
of the Borrower to such Term Loan Lender in substantially the form of
Schedule 2.2(d).

(e)   Incremental Term Loan. Subject to the terms and conditions set forth
herein, the Borrower shall have the right, at any time and from time to time
prior to the Term Loan Maturity Date, to incur additional Indebtedness under
this Credit Agreement in the form of a term loan (each an “Incremental Term
Facility”) by an aggregate amount of up to (a) ONE HUNDRED TWENTY-FIVE MILLION
DOLLARS ($125,000,000) less (b) the sum of (i) the aggregate amount of increases
in the Revolving Committed Amount pursuant to any Revolver Increase plus (ii)
the aggregate amount of any prior Incremental Term Facilities established
pursuant to this Section 2.2(e). The following terms and conditions shall apply
to each Incremental Term Facility: (i) the loans made under any such Incremental
Term Facility (each an “Additional Term Loan”) shall constitute Credit Party
Obligations and will be secured and guaranteed with the other Credit Party
Obligations on a pari passu basis, (ii) any such Incremental Term Facility shall
have a maturity date no sooner than, and a weighted average life to maturity no
shorter than, the Term Loan Maturity Date and the weighted average life to
maturity of the Term Loans at such time, respectively, (iii) any such
Incremental Term Facility shall be entitled to the same voting rights as the
existing Term Loans and shall be entitled to receive proceeds of prepayments on
a pro rata basis with the existing Term Loans, (iv) any such Incremental Term
Facility shall be obtained from existing Lenders or from other banks, financial
institutions or investment funds, (v) any such Incremental Term Facility shall
be in a minimum principal amount of $25,000,000 and integral multiples of
$1,000,000 in excess thereof, or, if less, the maximum remaining amount
permitted pursuant to this Section 2.2(e), (vi) the proceeds of any Additional
Term Loan will be used for the purposes set forth in Section 3.11, (vii) the
Borrower shall execute a Term Note in favor of any new Lender or any existing
Lender requesting a Term Note whose Term Loan Committed Amount is created or
increased, (viii) the conditions to Extensions of Credit in Section 4.2 shall
have been satisfied, (ix) the Administrative Agent shall have received an
opinion or opinions (including, if reasonably requested by the Administrative
Agent, local counsel opinions) of counsel for the Credit Parties, addressed to
the Administrative Agent and the Lenders, in form and substance reasonably
acceptable to the Administrative Agent, (x) if the interest rate margin on any
Incremental Term Facility would be more than 0.25% greater than the Applicable
Percentage for the existing Term Loan, the Applicable Percentage on the existing
Term Loan shall be increased such that the Applicable Percentage on the existing
Term Loan is 0.25% lower than the interest rate margin on the Incremental Term
Facility, and (xi) the Administrative Agent shall have received from the
Borrower updated financial projections for the remainder of the initial
projection term set forth in Section 3.1 and an officer’s certificate, in each
case in form and substance reasonably satisfactory to the Administrative Agent,
demonstrating that, after giving effect to any such Incremental Term Facility on
a Pro Forma Basis, the Borrower will be in compliance with the financial
covenants set forth in Section 5.9 and no Default or Event of Default shall
exist. No existing Lender shall have any obligation to provide all or any
portion of the Incremental Term Facility. The Administrative Agent is authorized
to enter into, on behalf of the Lenders, any amendment to this Credit Agreement
or any other Credit Document as may be necessary to incorporate the terms of any
new Incremental Term Facility therein.

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Section 2.3
Letter of Credit Subfacility.

(a)   Issuance. Subject to the terms and conditions hereof and of the LOC
Documents, if any, and any other terms and conditions which the Issuing Lender
may reasonably require, during the Commitment Period the Issuing Lender shall
issue, and the Revolving Lenders shall participate in, Letters of Credit for the
account of the Borrower from time to time upon request in a form acceptable to
the Issuing Lender; provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000) (the “LOC Committed Amount”), (ii) the sum of outstanding
Revolving Loans plus outstanding Swingline Loans plus outstanding LOC
Obligations shall not at any time exceed the Revolving Committed Amount, (iii)
all Letters of Credit shall be denominated in U.S. Dollars and (iv) Letters of
Credit shall be issued for lawful corporate purposes and may be issued as
standby letters of credit, including in connection with workers’ compensation
and other insurance programs. Except as otherwise expressly agreed upon by all
the Revolving Lenders, no Letter of Credit shall have an original expiry date
more than twelve (12) months from the date of issuance; provided, however, so
long as no Default or Event of Default has occurred and is continuing and
subject to the other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended annually or
periodically from time to time at the request of the Borrower or by operation of
the terms of the applicable Letter of Credit to a date not more than twelve (12)
months from the date of extension; provided, further, that no Letter of Credit,
as originally issued or as extended, shall have an expiry date extending beyond
the Revolver Maturity Date. Each Letter of Credit shall comply with the related
LOC Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a minimum
original face amount of $100,000. Wachovia shall be the Issuing Lender on all
Letters of Credit issued on or after the Closing Date. In the event and to the
extent that the provisions of any LOC Document shall conflict with this
Agreement, the provisions of this Agreement shall govern. The Issuing Lender
shall make any Letter of Credit issued hereunder available to the Borrower at
its office referred to in Section 9.2 or as otherwise agreed with the Borrower
in connection with such issuance.

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(b)   Notice and Reports. The request for the issuance of a Letter of Credit
shall be submitted to the Issuing Lender at least five (5) Business Days prior
to the requested date of issuance. The Issuing Lender will promptly upon request
of the Administrative Agent provide to the Administrative Agent for
dissemination to the Revolving Lenders a detailed report specifying the Letters
of Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of any prior report, and
including therein, among other things, the account party, the beneficiary, the
face amount, expiry date as well as any payments or expirations which may have
occurred.

(c)   Participations. Each Revolving Lender upon issuance of a Letter of Credit
shall be deemed to have purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations arising thereunder
and any collateral relating thereto, in each case in an amount equal to its
Revolving Commitment Percentage of the obligations under such Letter of Credit
and shall absolutely, unconditionally and irrevocably assume, as primary obligor
and not as surety, and be obligated to pay to the Issuing Lender therefore and
discharge when due, its Revolving Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and nature of
each Revolving Lender’s participation in any Letter of Credit, to the extent
that the Issuing Lender has not been reimbursed as required hereunder or under
any LOC Document, each such Revolving Lender shall pay to the Issuing Lender its
Revolving Commitment Percentage of such unreimbursed drawing in same day funds
on the day of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation of each
Revolving Lender to so reimburse the Issuing Lender shall be absolute and
unconditional and shall not be affected by the occurrence of a Default, an Event
of Default or any other occurrence or event. Any such reimbursement shall not
relieve or otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as hereinafter
provided.

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(d)   Reimbursement. In the event of any drawing under any Letter of Credit, the
Issuing Lender will promptly notify the Borrower and the Administrative Agent.
The Borrower shall reimburse the Issuing Lender on the day of drawing under any
Letter of Credit (with the proceeds of a Revolving Loan obtained hereunder or
otherwise) in same day funds as provided herein or in the LOC Documents. If the
Borrower shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Alternate Base Rate plus the Applicable Percentage for Revolving
Loans that are Alternate Base Rate Loans plus two percent (2%). Unless the
Borrower shall promptly notify the Issuing Lender and the Administrative Agent
of its intent to otherwise reimburse the Issuing Lender, the Borrower shall be
deemed to have requested a Revolving Loan in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which will be used to satisfy
the reimbursement obligations. The Borrower’s reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation any defense based on any failure of the
Borrower to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the other Revolving Lenders of the amount of any unreimbursed drawing and
each Revolving Lender shall promptly pay to the Administrative Agent for the
account of the Issuing Lender in Dollars and in immediately available funds, the
amount of such Revolving Lender’s Revolving Commitment Percentage of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Revolving Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the next succeeding Business Day. If such Revolving Lender does not pay such
amount to the Issuing Lender in full upon such request, such Revolving Lender
shall, on demand, pay to the Administrative Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of such
drawing until such Revolving Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within two (2) Business Days of the
date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal
to the Alternate Base Rate. Each Revolving Lender’s obligation to make such
payment to the Issuing Lender, and the right of the Issuing Lender to receive
the same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this Agreement
or the Commitments hereunder, the existence of a Default or Event of Default or
the acceleration of the Credit Party Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.

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(e)   Repayment with Revolving Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Revolving Loan to reimburse
a drawing under a Letter of Credit, the Administrative Agent shall give notice
to the Revolving Lenders that a Revolving Loan has been requested or deemed
requested in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each
such borrowing, a “Mandatory Borrowing”) shall be immediately made (without
giving effect to any termination of the Commitments pursuant to Section 7.2)
pro rata based on each Revolving Lender’s respective Revolving Commitment
Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 7.2) and the proceeds thereof shall be paid
directly to the Issuing Lender for application to the respective LOC
Obligations. Each Revolving Lender hereby irrevocably agrees to make such
Revolving Loans immediately upon any such request or deemed request on account
of each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (i) the amount of
Mandatory Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (ii) whether any conditions
specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event
of Default then exists, (iv) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section 2.1(b), (v)
the date of such Mandatory Borrowing, or (vi) any reduction in the Revolving
Committed Amount after any such Letter of Credit may have been drawn upon;
provided, however, that in the event any such Mandatory Borrowing should be less
than the minimum amount for borrowings of Revolving Loans otherwise provided in
Section 2.1(b)(ii), the Borrower shall pay to the Administrative Agent for its
own account an administrative fee of $500. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code), then each such Revolving Lender hereby agrees that
it shall forthwith fund (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Participation Interests in the
LOC Obligations; provided, further, that in the event any Revolving Lender shall
fail to fund its Participation Interest on the day the Mandatory Borrowing would
otherwise have occurred, then the amount of such Revolving Lender’s unfunded
Participation Interest therein shall bear interest payable by such Revolving
Lender to the Issuing Lender upon demand, at the rate equal to, if paid within
two (2) Business Days of such date, the Federal Funds Effective Rate, and
thereafter at a rate equal to the Alternate Base Rate.

(f)    Modification, Extension. The issuance of any supplement, modification,
amendment, renewal, or extension to any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.

(g)   ISP98 and UCP. Unless otherwise expressly agreed by the Issuing Lender and
the Borrower, when a Letter of Credit is issued, (i) the rules of the
“International Standby Practices 1998,” published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit,
and (ii) the rules of The Uniform Customs and Practice for Documentary Credits,
as most recently published by the International Chamber of Commerce (the “UCP”)
at the time of issuance, shall apply to each commercial Letter of Credit.

(h)   Conflict with LOC Documents. In the event of any conflict between this
Agreement and any LOC Document (including any letter of credit application),
this Agreement shall control.

(i)   Designation of Subsidiaries as Account Parties. Notwithstanding anything
to the contrary set forth in this Agreement, including without limitation
Section 2.3(a), a Letter of Credit issued hereunder may contain a statement to
the effect that such Letter of Credit is issued for the account of a Subsidiary
of the Borrower; provided that, notwithstanding such statement, the Borrower
shall be the actual account party for all purposes of this Agreement for such
Letter of Credit and such statement shall not affect the Borrower’s
reimbursement obligations hereunder with respect to such Letter of Credit.

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Section 2.4
Swingline Loan Subfacility.

(a)   Swingline Commitment. During the Commitment Period, subject to the terms
and conditions hereof, the Swingline Lender, in its individual capacity, agrees
to make certain revolving credit loans to the Borrower (each a “Swingline Loan”
and, collectively, the “Swingline Loans”) for the purposes hereinafter set
forth; provided, however, (i) the aggregate amount of Swingline Loans
outstanding at any time shall not exceed SEVEN MILLION FIVE HUNDRED THOUSAND
DOLLARS ($7,500,000) (the “Swingline Committed Amount”), and (ii) the sum of the
outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding
LOC Obligations shall not exceed the Revolving Committed Amount. Swingline Loans
hereunder may be repaid and reborrowed in accordance with the provisions hereof.

(b)   Swingline Loan Borrowings.

(i)   Notice of Borrowing and Disbursement. The Swingline Lender will make
Swingline Loans available to the Borrower by crediting the account of the
Borrower designated in the Account Designation Letter (or as otherwise agreed
between the Borrower and the Administrative Agent) on any Business Day upon
request made by the Borrower through the delivery of a Notice of Borrowing (with
appropriate modifications) (or telephone notice promptly confirmed by delivery
to the Administrative Agent and the Swingline Lender of a Notice of Borrowing by
fax or other electronic notice with confirmed receipt from the recipient) to the
Administrative Agent and the Swingline Lender not later than 2:00 P.M.
(Charlotte, North Carolina time) on such Business Day. Swingline Loan borrowings
hereunder shall be made in minimum amounts of $100,000 and in integral amounts
of $100,000 in excess thereof.

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(ii)   Repayment of Swingline Loans. Each Swingline Loan borrowing shall be due
and payable on the Revolver Maturity Date. The Swingline Lender may, at any
time, in its sole discretion, by written notice to the Borrower and the
Administrative Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be deemed to have
requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate
Loans in the amount of such Swingline Loans; provided, however, that, in the
following circumstances, any such demand shall also be deemed to have been given
one Business Day prior to each of (A) the Revolver Maturity Date, (B) the
occurrence of any Event of Default described in Section 7.1(e), (C) upon
acceleration of the Credit Party Obligations hereunder, whether on account of an
Event of Default described in Section 7.1(e) or any other Event of Default, and
(D) the exercise of remedies in accordance with the provisions of Section 7.2
hereof (each such Revolving Loan borrowing made on account of any such deemed
request therefore as provided herein being hereinafter referred to as “Mandatory
Borrowing”). Each Revolving Lender hereby irrevocably agrees to make such
Revolving Loans promptly upon any such request or deemed request on account of
each Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder, (II) whether any conditions
specified in Section 4.2 are then satisfied, (III) whether a Default or an Event
of Default then exists, (IV) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required in Section 2.1(b)(i),
(V) the date of such Mandatory Borrowing, or (VI) any reduction in the Revolving
Committed Amount or termination of the Revolving Commitments immediately prior
to such Mandatory Borrowing or contemporaneously therewith. In the event that
any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code), then each Revolving Lender hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause each such Revolving Lender to share in such Swingline Loans
ratably based upon its respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section
7.2); provided that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Lender until the date as of which the respective
participation is purchased, and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Revolving Lender
shall be required to pay to the Swingline Lender interest on the principal
amount of such participation purchased for each day from and including the day
upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.

(c)   Interest on Swingline Loans. Subject to the provisions of Section 2.9,
Swingline Loans shall bear interest at a per annum rate equal to the Alternate
Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate
Base Rate Loans. Interest on Swingline Loans shall be payable in arrears on each
Interest Payment Date.

(d)   Swingline Note; Covenant to Pay. The Swingline Loans may be evidenced,
upon such Lender’s request, by a duly executed promissory note of the Borrower
to the Swingline Lender in the original amount of the Swingline Committed Amount
and substantially in the form of Schedule 2.4(d). The Borrower covenants and
agrees to pay the Swingline Loans in accordance with the terms of this
Agreement.

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Section 2.5
Fees.

(a)   Commitment Fee. In consideration of the Revolving Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Revolving Lenders a commitment fee (the “Commitment Fee”) in an amount equal
to the Applicable Percentage per annum on the average daily unused amount of the
Revolving Committed Amount. For purposes of computation of the Commitment Fee,
LOC Obligations shall be considered usage of the Revolving Committed Amount but
Swingline Loans shall not be considered usage of the Revolving Committed Amount.
The Commitment Fee shall be payable quarterly in arrears on the last Business
Day of each calendar quarter for the prior calendar quarter then ending.

(b)   Letter of Credit Fees. In consideration of the LOC Commitments, the
Borrower agrees to pay to the Issuing Lender a fee (the “Letter of Credit Fee”)
equal to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance to
the date of expiration. In addition to such Letter of Credit Fee, the Issuing
Lender may charge, and retain for its own account without sharing by the other
Lenders, an additional facing fee of one-eighth of one percent (0.125%) per
annum on the average daily maximum amount available to be drawn under each such
Letter of Credit issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Revolving Lenders (including
the Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall be
payable quarterly in arrears on the last Business Day of each calendar quarter
for the prior calendar quarter then ending.

(c)   Issuing Lender Fees. In addition to the Letter of Credit Fees payable
pursuant to subsection (b) hereof, the Borrower shall pay to the Issuing Lender
for its own account without sharing by the other Lenders the reasonable and
customary charges from time to time of the Issuing Lender with respect to the
amendment, transfer, administration, cancellation and conversion of, and
drawings under, such Letters of Credit (collectively, the “Issuing Lender
Fees”); provided such fees shall not be duplicative of any fees charged under
any LOC Document.

(d)   Administrative Fee. The Borrower agrees to pay to the Administrative Agent
the annual administrative fee as described in the Agent’s Fee Letter.

 
Section 2.6
Commitment Reductions.

(a)   Voluntary Reductions. The Borrower shall have the right to terminate or
permanently reduce the unused portion of the Revolving Committed Amount at any
time or from time to time upon not less than five (5) Business Days’ prior
notice to the Administrative Agent (which shall notify the Revolving Lenders
thereof as soon as practicable) of each such termination or reduction, which
notice shall specify the effective date thereof and the amount of any such
reduction which shall be in a minimum amount of $1,000,000 or a whole multiple
of $500,000 in excess thereof, or, if less, the remaining Revolving Committed
Amount, and shall be irrevocable and effective upon receipt by the
Administrative Agent; provided that no such reduction or termination shall be
permitted if after giving effect thereto, and to any prepayments of the Loans
made on the effective date thereof, the sum of the outstanding Revolving Loans
plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed
the Revolving Committed Amount.

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(b)   Swingline Committed Amount. If the Revolving Committed Amount is reduced,
pursuant to Section 2.6(a) above, below the then current Swingline Committed
Amount, the Swingline Committed Amount shall automatically be reduced by an
amount such that the Swingline Committed Amount equals the Revolving Committed
Amount.

(c)   Revolver Maturity Date. The Revolving Commitment, the Swingline Commitment
and the LOC Commitment shall automatically terminate on the Maturity Date.

 
Section 2.7
Prepayments.

(a)   Optional Prepayments. The Borrower shall have the right to prepay Loans in
whole or in part from time to time; provided, however, that each partial
prepayment of a Revolving Loan and the Term Loan shall be in a minimum principal
amount of $1,000,000 and integral multiples of $500,000 in excess thereof, and
each partial prepayment of a Swingline Loan shall be in a minimum principal
amount of $100,000 and integral multiples of $100,000 in excess thereof. The
Borrower shall give three (3) Business Days’ irrevocable notice in the case of
LIBOR Rate Loans and one Business Day’s irrevocable notice in the case of
Alternate Base Rate Loans, to the Administrative Agent (which shall notify the
Lenders thereof as soon as practicable). To the extent the Borrower elects to
prepay the Term Loan (including, if applicable, any Additional Term Loan),
amounts prepaid under this Section shall be applied to the next four (4)
scheduled amortization payments and then pro rata to the Term Loan and any
Additional Term Loan, if applicable (ratably to the remaining principal
installments thereof), and then (after the Term Loan and any Additional Term
Loan, if applicable, has been paid in full) to the Revolving Loans as the
Borrower may elect. All prepayments under this Section 2.7(a) shall be subject
to Section 2.17, but otherwise without premium or penalty. Interest on the
principal amount prepaid shall be payable on the next occurring Interest Payment
Date that would have occurred had such loan not been prepaid or, at the request
of the Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the date of
prepayment.

(b)   Mandatory Prepayments.

(i)   Revolving Committed Amount. If at any time after the Closing Date, the sum
of the outstanding Revolving Loans plus outstanding Swingline Loans plus
outstanding LOC Obligations shall exceed the Revolving Committed Amount, the
Borrower immediately shall prepay the Loans and cash collateralize the
outstanding LOC Obligations in an amount sufficient to eliminate such excess
(such prepayment to be applied as set forth in clause (vi) below).

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(ii)   Asset Dispositions. The Borrower shall prepay the Loans and cash
collateralize the outstanding LOC Obligations in an aggregate amount equal to
100% of the Net Cash Proceeds derived from Asset Dispositions during any fiscal
year in excess of $500,000 (such prepayment to be applied as set forth in clause
(vi) below); provided, however, that, so long as no Default or Event of Default
has occurred and is continuing, such Net Cash Proceeds shall not be required to
be so applied to the extent the Borrower delivers to the Administrative Agent
promptly following such Asset Disposition a certificate stating that it or the
Company or any Subsidiary intends to use such Net Cash Proceeds to acquire like
assets used in the business of the Borrower and its Subsidiaries within 180 days
of the receipt of such Net Cash Proceeds, it being expressly agreed that any Net
Cash Proceeds not so reinvested shall be applied to prepay the Loans and cash
collateralize the outstanding LOC Obligations immediately thereafter (such
prepayment to be applied as set forth in clause (vi) below).

(iii)   Issuances. Immediately upon receipt by the Company or any of its
Subsidiaries of proceeds from (A) any Debt Issuance, the Borrower shall prepay
the Loans and cash collateralize the outstanding LOC Obligations in an aggregate
amount equal to 100% of the Net Cash Proceeds of such Debt Issuance to the
Lenders (such prepayment to be applied as set forth in clause (vi) below) or (B)
any Equity Issuance, the Borrower shall prepay the Loans and cash collateralize
the outstanding LOC Obligations in an aggregate amount equal to 50% of the Net
Cash Proceeds of such Equity Issuance (such prepayment to be applied as set
forth in clause (vi) below); provided, however, if the Leverage Ratio is less
than or equal to 1.75 to 1.00 as of the end of the preceding fiscal year of the
Company, then the Borrower shall not be required to prepay the Loans or cash
collateralize the outstanding LOC Obligations with the proceeds of any Debt
Issuance or any Equity Issuance.

(iv)   Recovery Event. To the extent of Net Cash Proceeds received in connection
with a Recovery Event that are not applied in accordance with Section
6.4(a)(iii), immediately following the expiration of the period allowed for
reinvesting of such Net Cash Proceeds pursuant to Section 6.4(a)(iii), the
Borrower shall prepay the Loans and cash collateralize the outstanding LOC
Obligations in an aggregate amount equal to 100% of such Net Cash Proceeds (such
prepayment to be applied as set forth in clause (vi) below).

(v)   Excess Cash Flow. Within ninety (90) days after the end of each fiscal
year of the Company (commencing with the fiscal year ending December 31, 2007),
the Borrower shall prepay the Loans and cash collateralize the outstanding LOC
Obligations in an amount equal to 50% of the Excess Cash Flow earned during such
prior fiscal year (such prepayments to be applied as set forth in clause (vi)
below); provided, however, if the Leverage Ratio is less than or equal to 1.75
to 1.00 as of the end of the preceding fiscal year of the Company, then the
Borrower shall not be required to prepay the Loans or cash collateralize the
outstanding LOC Obligations with Excess Cash Flow.

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(vi)   Application of Mandatory Prepayments. All amounts required to be paid
pursuant to this Section 2.7(b) shall be applied as follows: (A) with respect to
all amounts prepaid pursuant to Section 2.7(b)(i), (1) first, to the outstanding
Swingline Loans, (2) second, to the outstanding Revolving Loans and (3) third
(after all Revolving Loans have been repaid), to a cash collateral account in
respect of outstanding LOC Obligations, and (B) with respect to all amounts
prepaid pursuant to Sections 2.7(b)(ii) through (v), (1) first, to the next four
(4) scheduled amortization payments of the Term Loan (including, if applicable,
any Additional Term Loan) and then pro rata to the Term Loan and any Additional
Term Loan, if applicable (ratably to the remaining principal installments
thereof), (2) second to the Swingline Loans (without a corresponding reduction
in the Revolving Committed Amount), (3) third, to the Revolving Loans (without a
corresponding reduction in the Revolving Committed Amount) and (4) fourth (after
all Revolving Loans have been repaid), to a cash collateral account in respect
of outstanding LOC Obligations. Within the parameters of the applications set
forth above, prepayments shall be applied first to Alternate Base Rate Loans and
then to LIBOR Rate Loans in direct order of Interest Period maturities. Each
Lender shall receive its pro rata share (except with respect to prepayments of
Swingline Loans) of any such prepayment based on its Revolving Commitment
Percentage or Term Loan Commitment Percentage, as applicable. All prepayments
under this Section 2.7(b) shall be subject to Section 2.17 and be accompanied by
interest on the principal amount prepaid through the date of prepayment.

(c)   Hedging Obligations Unaffected. Any repayment or prepayment made pursuant
to this Section 2.7 shall not affect the Borrower’s obligation to continue to
make payments under any Secured Hedging Agreement, which shall remain in full
force and effect notwithstanding such repayment or prepayment, subject to the
terms of such Secured Hedging Agreement.

 
Section 2.8
Lending Offices.

LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and
Alternate Base Rate Loans at its Domestic Lending Office.

 
Section 2.9
Default Rate and Payment Dates.

Upon the occurrence, and during the continuance, of an Event of Default, the
principal of and, to the extent permitted by law, interest on the Loans and any
other amounts owing hereunder or under the other Credit Documents shall, at the
discretion of the Required Lenders, bear interest, payable on demand, at a per
annum rate 2% greater than the rate which would otherwise be applicable (or if
no rate is applicable, whether in respect of interest, fees or other amounts,
then the Alternate Base Rate plus the Applicable Percentage with respect to
Alternate Base Rate Loans plus 2%).

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Section 2.10
Conversion Options.

(a)   The Borrower may, in the case of Revolving Loans and Term Loans, elect
from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by
giving the Administrative Agent at least three (3) Business Days’ prior
irrevocable written notice of such election substantially in the form of the
notice attached as Schedule 2.10 (the “Notice of Conversion/Extension”). If the
date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate
Loan is not a Business Day, then such conversion shall be made on the next
succeeding Business Day and during the period from such last day of an Interest
Period to such succeeding Business Day such Loan shall bear interest as if it
were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base
Rate Loans may be converted as provided herein; provided that (i) no Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing and (ii) partial conversions shall be in an aggregate
principal amount of (A) in the case of Revolving Loans, $1,000,000 or a whole
multiple of $500,000 in excess thereof and (B) in the case of the Term Loan,
$2,000,000 or a whole multiple of $1,000,000 in excess thereof.

(b)   Any LIBOR Rate Loans may be continued as such upon the expiration of an
Interest Period with respect thereto by compliance by the Borrower with the
notice provisions contained in Section 2.10(a); provided, that no LIBOR Rate
Loan may be continued as such when any Default or Event of Default has occurred
and is continuing, in which case such Loan shall be automatically converted to
an Alternate Base Rate Loan at the end of the applicable Interest Period with
respect thereto. If the Borrower shall fail to give timely notice of an election
to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not
permitted hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.

 
Section 2.11
Computation of Interest and Fees.

(a)   Interest payable hereunder with respect to Alternate Base Rate Loans based
on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366
days, as applicable) for the actual days elapsed. All other fees, interest and
all other amounts payable hereunder shall be calculated on the basis of a
360-day year for the actual days elapsed. The Administrative Agent shall as soon
as practicable notify the Borrower and the Lenders of each determination of a
LIBOR Rate on the Business Day of the determination thereof. Any change in the
interest rate on a Loan resulting from a change in the Alternate Base Rate shall
become effective as of the opening of business on the day on which such change
in the Alternate Base Rate shall become effective. The Administrative Agent
shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change.

(b)   Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the computations used by the Administrative Agent
in determining any interest rate.

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(c)   It is the intent of the Lenders and the Credit Parties to conform to and
contract in strict compliance with applicable usury law from time to time in
effect. All agreements between the Lenders and the Credit Parties are hereby
limited by the provisions of this subsection which shall override and control
all such agreements, whether now existing or hereafter arising and whether
written or oral. In no way, nor in any event or contingency (including but not
limited to prepayment or acceleration of the maturity of any Credit Party
Obligation), shall the interest taken, reserved, contracted for, charged, or
received under this Agreement, under the Notes or otherwise, exceed the maximum
nonusurious amount permissible under applicable law. If, from any possible
construction of any of the Credit Documents or any other document, interest
would otherwise be payable in excess of the maximum nonusurious amount, any such
construction shall be subject to the provisions of this paragraph and such
interest shall be automatically reduced to the maximum nonusurious amount
permitted under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything of value
which is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive interest
shall, without penalty, be applied to the reduction of the principal amount
owing on the Loans and not to the payment of interest, or refunded to the
Borrower or the other payor thereof if and to the extent such amount which would
have been excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other Indebtedness evidenced by any of the
Credit Documents does not include the right to receive any interest which has
not otherwise accrued on the date of such demand, and the Lenders do not intend
to charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of such
Indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.

 
Section 2.12
Pro Rata Treatment and Payments.

(a)   Each borrowing of Revolving Loans and any reduction of the Revolving
Commitments shall be made pro rata according to the respective Revolving
Commitment Percentages of the Revolving Lenders. Each payment under this
Agreement or any Note shall be applied, first, to any fees then due and owing by
the Borrower pursuant to Section 2.5, second, to interest then due and owing in
respect of the Notes of the Borrower and, third, to principal then due and owing
hereunder and under the Notes of the Borrower. Each payment on account of any
fees pursuant to Section 2.5 shall be made pro rata in accordance with the
respective amounts due and owing (except as to the portion of the Letter of
Credit retained by the Issuing Lender and the Issuing Lender Fees). Each payment
(other than prepayments) by the Borrower on account of principal of and interest
on the Revolving Loans and the Term Loan shall be made pro rata according to the
respective amounts due and owing in accordance with Section 2.7 hereof. Each
optional prepayment on account of principal of the Loans shall be applied in
accordance with Section 2.7(a) and each mandatory prepayment on account of
principal of the Loans shall be applied in accordance with Section 2.7(b). All
payments (including prepayments) to be made by the Borrower on account of
principal, interest and fees shall be made without defense, set-off or
counterclaim (except as provided in Section 2.18(b)) and shall be made to the
Administrative Agent for the account of the Lenders at the Administrative
Agent’s office specified in Section 9.2 in Dollars and in immediately available
funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension. If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.

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(b)   Allocation of Payments After Exercise of Remedies. Notwithstanding any
other provision of this Credit Agreement to the contrary, upon the exercise of
remedies by the Administrative Agent or the Lenders pursuant to Section 7.2 (or
after the Commitments shall automatically terminate and the Loans and all other
amounts under the Credit Documents shall automatically become due and payable in
accordance with the terms of such Section), all amounts collected or received by
the Administrative Agent or any Lender on account of the Credit Party
Obligations or any other amounts outstanding under any of the Credit Documents
or in respect of the Collateral shall be paid over or delivered as follows:

FIRST, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation reasonable attorneys’ fees) of the Administrative
Agent in connection with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the Administrative Agent with
respect to the Collateral under or pursuant to the terms of the Collateral
Documents;

SECOND, to payment of any fees owed to the Administrative Agent;

THIRD, to the payment of all reasonable out-of-pocket costs and expenses
(including without limitation, reasonable attorneys’ fees) of each of the
Lenders in connection with enforcing its rights under the Credit Documents or
otherwise with respect to the Credit Party Obligations owing to such Lender;

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FOURTH, to the payment of all of the Credit Party Obligations consisting of
accrued fees and interest, including with respect to any Secured Hedging
Agreement, any fees, premiums and scheduled periodic payments due under such
Secured Hedging Agreement and any interest accrued thereon;

FIFTH, to the payment of the outstanding principal amount of the Credit Party
Obligations and the payment or cash collateralization of the outstanding LOC
Obligations, and including with respect to any Secured Hedging Agreement, any
breakage, termination or other payments due under such Secured Hedging Agreement
and any interest accrued thereon;

SIXTH, to all other Credit Party Obligations and other obligations which shall
have become due and payable under the Credit Documents or otherwise and not
repaid pursuant to clauses “FIRST” through “FIFTH” above; and

SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.

In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders and Hedging Agreement Providers
shall receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans and outstanding LOC Obligations held by such
Lender or the outstanding obligations payable to such Hedging Agreement Provider
bears to the aggregate then outstanding Loans, outstanding LOC Obligations and
obligations payable under all Secured Hedging Agreements) of amounts available
to be applied pursuant to clauses ”THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above;
and (iii) to the extent that any amounts available for distribution pursuant to
clause “FIFTH” above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the Administrative
Agent in a cash collateral account and applied (A) first, to reimburse the
Issuing Lender from time to time for any drawings under such Letters of Credit
and (B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses “FIFTH” and “SIXTH” above in the
manner provided in this Section 2.12(b). Notwithstanding the foregoing terms of
this Section 2.12(b), only Collateral proceeds and payments under the Guaranty
with respect to Secured Hedging Agreements shall be applied to obligations under
any Secured Hedging Agreement.

 
Section 2.13
Non-Receipt of Funds by the Administrative Agent.

(a)   Unless the Administrative Agent shall have been notified in writing by a
Lender prior to the date a Loan is to be made by such Lender (which notice shall
be effective upon receipt), that such Lender does not intend to make the
proceeds of such Loan available to the Administrative Agent, the Administrative
Agent may assume that such Lender has made such proceeds available to the
Administrative Agent on such date, and the Administrative Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Lender. If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor, the Administrative Agent will promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
from the Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender
at the Federal Funds Effective Rate.

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(b)   Unless the Administrative Agent shall have been notified in writing by the
Borrower, prior to the date on which any payment is due from it hereunder (which
notice shall be effective upon receipt) that the Borrower does not intend to
make such payment, the Administrative Agent may assume that such Borrower has
made such payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each Lender on
such payment date an amount equal to the portion of such assumed payment to
which such Lender is entitled hereunder, and if the Borrower has not in fact
made such payment to the Administrative Agent, such Lender shall, on demand,
repay to the Administrative Agent the amount made available to such Lender. If
such amount is repaid to the Administrative Agent on a date after the date such
amount was made available to such Lender, such Lender shall pay to the
Administrative Agent on demand interest on such amount in respect of each day
from the date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent at a per
annum rate equal to the Federal Funds Effective Rate.

(c)   A certificate of the Administrative Agent submitted to the Borrower or any
Lender with respect to any amount owing under this Section 2.13 shall be
conclusive in the absence of manifest error.

 
Section 2.14
Inability to Determine Interest Rate.

Notwithstanding any other provision of this Agreement, if (i) the Administrative
Agent shall reasonably determine (which determination shall be conclusive and
binding absent manifest error) that, by reason of circumstances affecting the
relevant market, reasonable and adequate means do not exist for ascertaining
LIBOR Rate for any Interest Period, or (ii) the Administrative Agent or the
Required Lenders shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that LIBOR Rate does not
adequately and fairly reflect the cost to such Lenders of funding LIBOR Rate
Loans that the Borrower has requested be outstanding as a LIBOR Tranche during
such Interest Period, the Administrative Agent shall forthwith give telephone
notice of such determination, confirmed in writing, to the Borrower, and the
Lenders at least two (2) Business Days prior to the first day of such Interest
Period. Unless the Borrower shall have notified the Administrative Agent upon
receipt of such telephone notice that it wishes to rescind or modify its request
regarding such LIBOR Rate Loans, any Loans that were requested to be made as
LIBOR Rate Loans shall be made as Alternate Base Rate Loans and any Loans that
were requested to be converted into or continued as LIBOR Rate Loans shall
remain as or be converted into Alternate Base Rate Loans. Until any such notice
has been withdrawn by the Administrative Agent, no further Loans shall be made
as, continued as, or converted into, LIBOR Rate Loans for the Interest Periods
so affected.

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Section 2.15
Illegality.

Notwithstanding any other provision of this Agreement, if the adoption of or any
change in any Requirement of Law or in the interpretation, administration or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender’s
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law to Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender (which certificate shall include a description of the
basis for the computation), through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; provided, however, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its reasonable discretion to be material.

 
Section 2.16
Requirements of Law.

(a)   If the adoption of or any change in any Requirement of Law (other than any
change by way of imposition or increase of reserve requirements included in the
Eurodollar Reserve Percentage) or in the interpretation, administration or
application thereof or compliance by any Lender with any request or directive
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:

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(i)   shall subject such Lender to any tax of any kind whatsoever with respect
to any Letter of Credit or any application relating thereto, any LIBOR Rate Loan
made by it, or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the overall net income
of such Lender);

(ii)   shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the LIBOR Rate hereunder; or

(iii)   shall impose on such Lender any other condition;

and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining LIBOR Rate Loans or the Letters of Credit or to reduce any
amount receivable hereunder or under any Note, then, in any such case, the
Borrower shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender reasonably deems to be material as determined by
such Lender with respect to its LIBOR Rate Loans or Letters of Credit. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender (which certificate shall include a description of the
basis for the computation), through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its Domestic Lending
Office or LIBOR Lending Office, as the case may be) to avoid or to minimize any
amounts that might otherwise be payable pursuant to this paragraph of this
Section; provided, however, that such efforts shall not cause the imposition on
such Lender of any additional costs or legal or regulatory burdens deemed by
such Lender in its reasonable discretion to be material.

(b)   If any Lender shall have reasonably determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any central bank
or Governmental Authority made subsequent to the date hereof does or shall have
the effect of reducing the rate of return on such Lender’s or such corporation’s
capital as a consequence of its obligations hereunder to a level below that
which such Lender or such corporation could have achieved but for such adoption,
change or compliance (taking into consideration such Lender’s or such
corporation’s policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender in its reasonable discretion to be material, then from
time to time, within fifteen (15) days after demand by such Lender, the Borrower
shall pay to such Lender such additional amount as shall be certified by such
Lender as being required to compensate it for such reduction. Such a certificate
as to any additional amounts payable under this Section submitted by a Lender
(which certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrower shall be
conclusive absent manifest error.

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(c)   In the event that any Lender demands payment of costs or additional
amounts pursuant to Section 2.16 or Section 2.18 or asserts, pursuant to Section
2.15, that it is unlawful for such Lender to make LIBOR Rate Loans, then
(subject to such Lender’s right to rescind such demand or assertion within 10
days after the notice from the Borrower referred to below) the Borrower may,
upon 20 days’ prior written notice to such Lender and the Administrative Agent,
elect to cause such Lender to assign at par its Loans and Commitments in full to
one or more Persons selected by the Borrower so long as (i) each such Person is
either another Lender or any Affiliate or Related Fund thereof or is otherwise
satisfactory to the Administrative Agent, (ii) such Lender receives payment in
full in cash of the outstanding principal amount of all Loans made by it and all
accrued and unpaid interest thereon and all other amounts due and payable to
such Lender as of the date of such assignment (including, without limitation,
amounts owing pursuant to Sections 2.16, 2.17 and 2.18), (iii) each such Lender
assignee agrees to accept such assignment and to assume all obligations of such
assigning party hereunder in accordance with Section 9.6 and (iv) the costs and
compensation paid by the Borrower under Section 2.16 or Section 2.18 shall be
reduced as a result of such assignment.

(d)   The agreements in this Section 2.16 shall survive the termination of this
Agreement and payment of the Notes and all other amounts payable hereunder.

 
Section 2.17
Indemnity.

The Credit Parties hereby agree to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Loan by such Lender in accordance with the terms
hereof, (b) default by the Borrower in accepting a borrowing after the Borrower
has given a notice in accordance with the terms hereof, (c) default by the
Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty (30) days following such default, prepayment or conversion and shall
include a description of the basis for the computation) shall be conclusive in
the absence of manifest error. The agreements in this Section shall survive
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.

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Section 2.18
Taxes.

(a)   All payments made by the Borrower hereunder or under any Note will be,
except as provided in Section 2.18(b), made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any Governmental Authority or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding any
tax imposed on or measured by the net income or profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
additions to tax with respect thereto (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as “Taxes” and all such excluded taxes referred to collectively as
“Excluded Taxes”). If any Taxes are so levied or imposed, the Borrower agrees to
pay the full amount of such Taxes, and such additional amounts as may be
necessary so that every payment of all amounts due under this Agreement or under
any Note, after withholding or deduction for or on account of any Taxes, will
not be less than the amount provided for herein or in such Note. The Borrower
will furnish to the Administrative Agent as soon as practicable after the date
the payment of any Taxes is due pursuant to applicable law certified copies (to
the extent reasonably available and required by law) of tax receipts evidencing
such payment by the Borrower or such other evidence of payment reasonably
satisfactory to the Lenders. The Borrower agrees to indemnify and hold harmless
each Lender, and reimburse such Lender upon its written request (which shall
specify in reasonable detail the nature and amount of such Taxes), for the
amount of any Taxes so levied or imposed and paid by such Lender. Nothing
contained in this Section shall require a Lender to make available its tax
returns or provide any information relating to its taxes which it reasonably
deems confidential.

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(b)   Each Lender that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Closing Date, or in the case of a Lender
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 9.6(c) (unless the respective Lender was already a Lender hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) if the Lender is a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY with
appropriate attachments (or successor forms) certifying such Lender’s
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the
Code, Internal Revenue Service Form W-8BEN, W-8ECI or W-8IMY with appropriate
attachments as set forth in clause (i) above, or (x) a certificate in
substantially the form of Schedule 2.18 (any such certificate, a “Tax Exempt
Certificate”) and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (or successor form) certifying such
Lender’s entitlement to an exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. Each Lender that is a United States person as that term is defined in
Section 7701(a)(30) of the Code , other than a Lender that may be treated as an
exempt recipient based on the indicators described in Treasury Regulation
Section 1.6049-4(c)(1)(ii), hereby agrees that it shall, no later than the
Closing Date or, in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant Section 9.6(c), on the date of such
assignment or transfer to such Lender, deliver to the Borrower and the
Administrative Agent two accurate, complete and signed copies of Internal
Revenue service Form W-9 or successor form, certifying that such Lender is not
subject to United States backup withholding tax. In addition, each Lender agrees
that it will deliver updated versions of the foregoing, as applicable, (A)
whenever the previous certification has become inaccurate in any material
respect or (B) at any time reasonably requested by the Borrower or the
Administrative Agent, together with such other forms as may be required in order
to confirm or establish the entitlement of such Lender to a continued exemption
from or reduction in United States withholding tax with respect to payments
under this Agreement and any Note. Notwithstanding anything to the contrary
contained in Section 2.18(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold Taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender to the
extent that such Lender has not provided to the Borrower U.S. Internal Revenue
Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
2.18(a) hereof to gross-up payments to be made to a Lender in respect of Taxes
imposed by the United States or to indemnify such Lender for any withholding
Taxes imposed by the United States if (I) such Lender has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section, the Borrower agrees to pay additional amounts and to
indemnify each Lender in the manner set forth in Section 2.18(a) (without regard
to the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes after the Closing Date
in any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.

(c)   Each Lender agrees to use reasonable efforts (including reasonable efforts
to change its Domestic Lending Office or LIBOR Lending Office, as the case may
be) to avoid or to minimize any amounts which might otherwise be payable
pursuant to this Section; provided, however, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its reasonable discretion to be material.

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(d)   If the Borrower pays any additional amount pursuant to this Section with
respect to a Lender, such Lender shall use reasonable efforts to obtain a refund
of tax or credit against its tax liabilities on account of such payment;
provided that such Lender shall have no obligation to use such reasonable
efforts if either (i) it is in an excess foreign tax credit position or (ii) it
believes in good faith, in its sole discretion, that claiming a refund or credit
would cause adverse tax consequences to it. In the event that such Lender
receives such a refund or credit, such Lender shall pay to the Borrower an
amount that such Lender reasonably determines is equal to the net tax benefit
obtained by such Lender as a result of such payment by the Borrower. In the
event that no refund or credit is obtained with respect to the Borrower’s
payments to such Lender pursuant to this, then such Lender shall upon request
provide a certification that such Lender has not received a refund or credit for
such payments. Nothing contained in this Section shall require a Lender to
disclose or detail the basis of its calculation of the amount of any tax benefit
or any other amount or the basis of its determination referred to in the proviso
to the first sentence of this Section to the Borrower or any other party.

(e)   The agreements in this Section shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.

 
Section 2.19
Indemnification; Nature of Issuing Lender’s Duties.

(a)   In addition to its other obligations under Section 2.3, each Credit Party
hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless
from and against any and all claims, demands, liabilities, damages, losses,
charges, and reasonable out of pocket costs and expenses (including reasonable
attorneys’ fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit or
(ii) the failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions, herein called “Government Acts”).

(b)   As between the Credit Parties, the Issuing Lender and each Lender, the
Credit Parties shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. Neither the Issuing Lender nor any
Lender shall be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) 
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under a Letter of Credit or of the proceeds thereof; and (vii) any consequences
arising from causes beyond the control of the Issuing Lender or any Lender,
including, without limitation, any Government Acts. None of the above shall
affect, impair, or prevent the vesting of the Issuing Lender’s rights or powers
hereunder.

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(c)   In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender or any Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender or such Lender under any resulting liability to the Borrower. It
is the intention of the parties that this Agreement shall be construed and
applied to protect and indemnify the Issuing Lender and each Lender against any
and all risks involved in the issuance of the Letters of Credit, all of which
risks are hereby assumed by the Credit Parties, including, without limitation,
any and all risks of the acts or omissions, whether rightful or wrongful, of any
Governmental Authority. The Issuing Lender and the Lenders shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Lender and the Lenders.

(d)   Nothing in this Section 2.19 is intended to limit the reimbursement
obligation of the Borrower contained in Section 2.3(d) hereof. The obligations
of the Credit Parties under this Section 2.19 shall survive the termination of
this Agreement. No act or omissions of any current or prior beneficiary of a
Letter of Credit shall in any way affect or impair the rights of the Issuing
Lender to enforce any right, power or benefit under this Agreement.

(e)   Notwithstanding anything to the contrary contained in this Section 2.19,
the Credit Parties shall have no obligation to indemnify any Issuing Lender or
any Lender in respect of any liability incurred by such Issuing Lender or such
Lender arising out of the gross negligence or willful misconduct of the Issuing
Lender or such Lender (including action not taken by an Issuing Lender), as
determined by a court of competent jurisdiction pursuant to a final
non-appealable judgment.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

To induce the Lenders to enter into this Agreement and to make the Extensions of
Credit herein provided for, the Company and its Subsidiaries hereby represent
and warrant to the Administrative Agent and each Lender that:

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Section 3.1
Financial Condition.

The Borrower has delivered to the Administrative Agent and the Lenders (a)
balance sheets and the related statements of income and of cash flows of (i) the
Company and its Subsidiaries for the fiscal years ended December 31, 2003,
December 31, 2004 and December 31, 2005 audited by Ernst & Young, LLP and
(ii) the Acquired Company and its Subsidiaries for the fiscal years ended
December 31, 2003, December 31, 2004 and December 31, 2005 audited by Carlin,
Charron & Rosen, LLP, (b) a company-prepared unaudited balance sheet and the
related statement of income and of cash flow of the Borrower for fiscal years
ended December 31, 2004 and December 31, 2005, (c) company-prepared unaudited
balance sheets and related statements of income and cash flows for the Company,
the Borrower and the Acquired Company and their respective Subsidiaries for that
portion of the fiscal year commencing on January 1, 2006 through the month most
recently ended prior to the Closing Date (provided that if the Closing Date
shall occur prior to the twentieth day of any month, then such financial
statements shall be provided as of the end of the month immediately preceding
the most recent month end), (d)  good faith estimated (subject only to
completion of purchase price accounting and other related adjustments) pro forma
unaudited balance sheets of the Company and its Subsidiaries and the Borrower
and its Subsidiaries as of the last day of the month most recently ended prior
to the Closing Date (provided that if the Closing Date shall occur prior to the
twentieth day of any month, then such financial statements shall be provided as
of the end of the month immediately preceding the most recent month end), in
each case prepared giving effect to the Acquisition and the initial Extensions
of Credit made hereunder on a Pro Forma Basis and in form and substance
reasonably satisfactory to the Administrative Agent and (e) the seven-year
projections of the Company and the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent. The financial statements referred to
in subsections (a)-(d) above are complete and correct and present fairly the
financial condition of the Company, the Borrower, the Acquired Company and their
respective Subsidiaries as of such dates, subject in the case of unaudited
financials to the absence of footnotes and immaterial year end adjustments. All
such financial statements and projections, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as disclosed therein).

 
Section 3.2
No Change.

Since December 31, 2005 there has been no development or event which has had or
could reasonably be expected to have a Material Adverse Effect and no Internal
Control Event has occurred.

 
Section 3.3
Corporate Existence; Compliance with Law.

Each of the Credit Parties (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, organization
or formation, (b) has the requisite power and authority and the legal right to
own and operate all its property, to lease the property it operates as lessee
and to conduct the business in which it is currently engaged and has taken all
actions necessary to maintain all rights, privileges, licenses and franchises
necessary or required in the normal conduct of its business, except to the
extent that the failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (c) is duly qualified
to conduct business and is in good standing under the laws of (i) the
jurisdiction of its organization or formation and (ii) each other jurisdiction
where its ownership, lease or operation of property or the conduct of its
business requires such qualification except to the extent that the failure to so
qualify or be in good standing could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect. Without limiting the generality of the foregoing, each
of the Credit Parties represents that:

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(i)   (A) To the knowledge of any Responsible Officer of any Credit Party, there
is no Credit Party or individual employed by such Credit Party who may
reasonably be expected to have criminal culpability or to be excluded or
suspended from participation in any Medical Reimbursement Program for their
corporate or individual actions or failures to act where such culpability,
exclusion and/or suspension has or could be reasonably expected to result in a
Material Adverse Effect; and (B) there is no member of management continuing to
be employed by any Credit Party who may reasonably be expected to have
individual culpability for matters under investigation by any Governmental
Authority where such culpability has or could reasonably be expected to result
in a Material Adverse Effect unless such member of management has been, within a
reasonable period of time after discovery of such actual or potential
culpability, either suspended or removed from positions of responsibility
related to those activities under challenge by the Governmental Authority;

(ii)   current billing policies, arrangements, protocols and instructions comply
with expressly stated requirements of Medical Reimbursement Programs and are
administered by properly trained personnel except where any such failure to
comply could not reasonably be expected to result in a Material Adverse Effect;

(iii)   current medical director compensation arrangements and other
arrangements with referring physicians comply with state and federal
self-referral and anti-kickback laws, including without limitation 42 U.S.C.
Section 1320a-7b(b)(1) - (b)(2) and 42 U.S.C. Section 1395nn, except where any
such failure to comply could not reasonably be expected to result in a Material
Adverse Effect;

(iv)   none of the Credit Parties is currently, nor has in the past been subject
to any federal, state, local governmental or private payor civil or criminal
inspections, investigations, inquiries or audits involving and/or related to its
activities, except for routine inspections, investigations, inquiries or audits
in the ordinary course not anticipated to result in a Material Adverse Effect;
and

(v)   except as set forth on Schedule 3.3, no Credit Party: (A) has had a civil
monetary penalty assessed against it pursuant to 42 U.S.C. §1320a 7a, (B) has
been excluded from participation in a Federal Health Care Program (as that term
is defined in 42 U.S.C. §1320a 7b), (C) has been convicted (as that term is
defined in 42 C.F.R. §1001.2) of any of those offenses described in 42 U.S.C.
§1320a 7b or 18 U.S.C. §§669, 1035, 1347, 1518, or (D) to the knowledge of any
Responsible Officer, has been involved or named in a U.S. Attorney complaint
made or any other action taken pursuant to the False Claims Act under 31 U.S.C.
§§3729 3731 or qui tam action brought pursuant to 31 U.S.C. §3729 et seq.

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Section 3.4
Corporate Power; Authorization; Enforceable Obligations.

Each of the Credit Parties has full power and authority and the legal right to
make, deliver and perform the Credit Documents to which it is party and has
taken all necessary limited liability company or corporate or other action to
authorize the execution, delivery and performance by it of the Credit Documents
to which it is party. No consent or authorization of, filing with, notice to or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Credit Parties (other than
those which have been obtained) or with the validity or enforceability of any
Credit Document against the Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). This Credit Agreement has been, and each other Credit Document when
delivered hereunder will have been, duly executed and delivered on behalf of
each of the Credit Parties party thereto. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of each of the Credit
Parties, enforceable against such Credit Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 
Section 3.5
Status Under Certain Statutes.

No Credit Party is (i) required to be registered as an “investment company”, or
“controlled” by a Person that is required to be registered as an “investment
company”, under the Investment Company Act of 1940, as amended, or (ii) subject
to regulation under any federal or state statute or regulation limiting its
ability to incur the Credit Party Obligations.

 
Section 3.6
Margin Regulations.

No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which does not comply with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System as
now and from time to time hereafter in effect. The Company and its Subsidiaries
taken as a group do not own “margin stock” except as identified in the financial
statements referred to in Section 3.1 and the aggregate value of all “margin
stock” owned by the Company and its Subsidiaries taken as a group does not
exceed 25% of the value of their assets.

 
Section 3.7
No Legal Bar; No Default.

The execution, delivery and performance of the Credit Documents, the borrowings
thereunder and the use of the proceeds of the Loans (a) will not violate any
Requirement of Law in any material respect or any material Contractual
Obligation of any Credit Party (except those as to which waivers or consents
have been obtained), (b) will not conflict with, result in a breach of or
constitute a default under the articles of incorporation, bylaws, articles of
organization, operating agreement or other organization documents of the Credit
Parties or any Material Contract to which such Person is a party or by which any
of its properties may be bound or any material approval or material consent from
any Governmental Authority relating to such Person, and (c) will not result in,
or require, the creation or imposition of any Lien on any Credit Party’s
properties or revenues pursuant to any Requirement of Law or Contractual
Obligation other than the Liens arising under or contemplated in connection with
the Credit Documents or Permitted Liens. No Credit Party is in default under or
with respect to any of its material Contractual Obligations in any material
respect. No Default or Event of Default has occurred and is continuing.

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Section 3.8
No Material Litigation.

As of the Closing Date, set forth on Schedule 3.8 is a description of any
material litigation, investigation, claim, criminal prosecution, civil
investigative demand, criminal or civil fine and penalty, or other proceeding of
or before any arbitrator or Governmental Authority (including but not limited to
those regulatory agencies responsible for licensing, accrediting or issuing
Medicare or Medicaid certifications) that is pending or, to the best knowledge
of any Responsible Officer, threatened by or against the Company or any of its
Subsidiaries or against any of its or their respective properties or revenues.
No litigation, investigation, claim, criminal prosecution, civil investigative
demand, imposition of criminal or civil fines and penalties, or any other
proceeding of or before any arbitrator or Governmental Authority (including but
not limited to those regulatory agencies responsible for licensing, accrediting
or issuing Medicare or Medicaid certifications) is pending or, to the best
knowledge of any Responsible Officer, threatened by or against the Company or
any of its Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
be adversely determined and if so adversely determined could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect. 

 
Section 3.9
ERISA.

No Reportable Event that could reasonably be expected to result in a Material
Adverse Effect, and no “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA), has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan. Each Single Employer Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred resulting in
any liability that has remained underfunded. No Lien in favor of a Single
Employer Plan or in favor of the PBGC with respect to a Single Employer Plan has
arisen, during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan
(other than a Lien with respect to a liability which has been satisfied in
full). The present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits, except to the extent that such underfunding could not
reasonably be expected to result in a Material Adverse Effect. Neither any
Credit Party nor any Commonly Controlled Entity has any outstanding liability
for a complete or partial withdrawal from a Multiemployer Plan, except to the
extent such liability could not reasonably be expected to result in a Material
Adverse Effect.

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Section 3.10
Environmental Matters.

Except as could not reasonably be expected to have a Material Adverse Effect:

(a)   The facilities and properties owned, leased or operated by the Company or
any of its Subsidiaries (the “Properties”) do not contain any Materials of
Environmental Concern in amounts or concentrations that constitute a violation
of or a liability under, any Environmental Law.

(b)   The Properties, all operations of the Company and/or its Subsidiaries at
the Properties, and the business operated by the Company or any of its
Subsidiaries (the “Business”) are in compliance, and have in the last two years
been in compliance, with all applicable Environmental Laws.

(c)   Neither the Company nor any of its Subsidiaries has received any written
notice of violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of the Properties or the Business, nor does any Responsible
Officer of the Company or any of its Subsidiaries have knowledge that any such
notice will be received or is being threatened.

(d)   Materials of Environmental Concern have not been transported or disposed
of from the Properties by the Company or any of its Subsidiaries in violation of
any Environmental Law, and neither the Company nor any of its Subsidiaries has
received any written notice of any liability or potential liability for any
Materials of Environmental Concern transported or disposed of from the
Properties by the Company or any of its Subsidiaries. Materials of Environmental
Concern have not been generated, treated, stored or disposed of by the Company
or any of its Subsidiaries at, on or under any of the Properties in violation of
any applicable Environmental Law, and neither the Company nor any of its
Subsidiaries is liable for any Materials of Environmental Concern that have been
generated, treated, stored or disposed of at, on or under any of the Properties.

(e)   No judicial proceeding or governmental or administrative action is pending
or, to the knowledge of any Responsible Officer, threatened, under any
Environmental Law to which the Company or any Subsidiary is or, with respect to
any threatened proceeding or action, is reasonably expected to become a party
with respect to the Properties or the Business, nor are there any governmental
consent decrees, consent orders or administrative orders with respect to which
the Company or any of its Subsidiaries is a party, or other administrative or
judicial requirements applicable to the Company or any of its Subsidiaries
outstanding under any Environmental Law with respect to the Properties or the
Business.

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(f)   There has been no release of Materials of Environmental Concern by the
Company or any of its Subsidiaries or for which the Company or any of its
Subsidiaries is liable at or from the Properties, or arising from or related to
the operations of the Company or any of its Subsidiaries in connection with the
Properties or otherwise in connection with the Business, in violation of, or in
amounts or in a manner that give rise to liability, under Environmental Laws,
except for any such release that has been remediated in accordance with
applicable Environmental Laws.

 
Section 3.11
Use of Proceeds.

The proceeds of the Extensions of Credit shall be used solely by the Borrower to
(i) finance a portion of the Acquisition, (ii) pay any fees and expenses in
connection with the Acquisition, (iii) pay any fees and expenses owing to the
Lenders and the Administrative Agent in connection with this Agreement and the
other Credit Documents (including those under the Fee Letters), (iv) refinance
certain existing indebtedness of the Company and its Subsidiaries, and (v)
provide for working capital, capital expenditures and other general corporate
purposes of the Borrower and its Subsidiaries, including, without limitation,
Permitted Acquisitions.

 
Section 3.12
Subsidiaries.

Set forth on Schedule 3.12 is a complete and accurate list of all direct and
indirect Subsidiaries of the Company as of the Closing Date. Information on the
attached Schedule includes jurisdiction of incorporation or organization; the
number of shares of each class of Capital Stock or other equity interests
outstanding; the number and percentage of outstanding shares of each class of
Capital Stock held by each shareholder; and the number and effect, if exercised,
of all outstanding options, warrants, rights of conversion or purchase and
similar rights. The outstanding Capital Stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned,
free and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). There are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options granted to employees or directors, directors’ qualifying shares or
arrangements with respect to the purchase of the remaining ownership interest in
German Breg as contemplated in the German Buyout) of any nature relating to any
Capital Stock of the Company or any Subsidiary, except as contemplated in
connection with the Credit Documents.

 
Section 3.13
Ownership.

Each of the Company and its Subsidiaries is the owner of, and has good and
insurable title (in the case of real property) to or an indefeasible leasehold
interest in, all of its respective assets and none of such assets are subject to
any Lien on such party’s interest other than Permitted Liens. Each Credit Party
and its Subsidiaries enjoys peaceful and undisturbed possession under all of its
leases and all such leases are valid and subsisting and in full force and
effect.

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Section 3.14
Indebtedness.

Except as otherwise permitted under Section 6.1, the Company and its
Subsidiaries have no Indebtedness.
 

 
Section 3.15
Taxes.

 
Each of the Company and its Subsidiaries has filed, or caused to be filed, all
tax returns required to be filed and paid (a) all amounts of taxes shown thereon
to be due (including interest and penalties) and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) that are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. Neither the Company nor any of its
Subsidiaries are aware as of the Closing Date of any proposed tax assessments
against it or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

 
Section 3.16
Intellectual Property.

To the knowledge of any Responsible Officer, each of the Company and its
Subsidiaries owns, or has the legal right to use, all material Intellectual
Property necessary for each of them to conduct its business as currently
conducted. Set forth on Schedule 3.16 is a list of all material Intellectual
Property (excluding unregistered trademarks to the extent not used or not
reasonably identifiable by the Credit Parties) owned by the Credit Parties or
that any Credit Party has the right to use (excluding standard “off the shelf”
licensed software used in the ordinary course of business). To the knowledge of
any Responsible Officer, except pursuant to a license agreement disclosed in
Schedule 3.16 hereto, or as otherwise disclosed in Schedule 3.16 hereto, (a) the
Credit Parties have the right to use the Intellectual Property disclosed in
Schedule 3.16 hereto in perpetuity and without payment of royalties, and (b) all
registrations with and applications to Governmental Authorities in respect of
such Intellectual Property are valid or subsisting and in full force and effect
and are not subject to the payment of any taxes or maintenance fees or the
taking of any interest therein, held by the Company or any of its Subsidiaries
to maintain their validity or effectiveness in any material respects. To the
knowledge of any Responsible Officer, neither the Company nor any of its
Subsidiaries is in default (or with the giving of notice or lapse of time or
both, would be in default) under any license to use any material Intellectual
Property; other than as noted on Schedule 3.16, no claim has been asserted in
writing and is pending by any Person, in any material respects, seeking to
restrict or deny the use of any material Intellectual Property or the validity
or effectiveness of any such Intellectual Property, nor does any Responsible
Officer know of any such claim; and, to the knowledge of any Responsible
Officer, the use of any material Intellectual Property by the Company or any of
its Subsidiaries does not infringe on the rights of any Person. Schedule 3.16
may be updated from time to time by the Borrower to include new Intellectual
Property by giving written notice thereof to the Administrative Agent.

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Section 3.17
Solvency.

Each of the Credit Parties is Solvent.

 
Section 3.18
Investments.

All Investments of each of the Company and its Subsidiaries are Permitted
Investments.

 
Section 3.19
Location of Collateral.

Set forth on Schedule 3.19(a) is a list of the domestic real Properties (whether
owned or leased) of the Credit Parties as of the Closing Date with street
address, county and state where located. Set forth on Schedule 3.19(b) is a list
of all locations where any domestic tangible personal property of the Credit
Parties with a fair market value in excess of $250,000 is located as of the
Closing Date (other than trade show booths and related assets and tangible
personal property in transit, held by sales representatives or on consignment
with third parties), including county and state where located. Set forth on
Schedule 3.19(c) is the state of incorporation or organization, chief executive
office, the principal place of business, the tax identification number and
organization identification number of each of the Credit Parties as of the
Closing Date. Set forth on Schedule 3.19(d) is a list of all Mortgaged
Properties as of the Closing Date.

 
Section 3.20
No Burdensome Restrictions.

Neither the Company nor any of its Subsidiaries is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 
Section 3.21
Labor Matters.

Except as otherwise set forth in Schedule 3.21 hereto, as of the Closing Date,
(a) there are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Company or any of its Subsidiaries, (b) neither
the Company nor any of its Subsidiaries has suffered any material strikes,
walkouts, work stoppages or other material labor difficulty within the last five
years, (c) no Responsible Officer of the Company or any of its Subsidiaries has
knowledge of any material potential or pending strike, walkout or work stoppage
and (d) no material unfair labor practice complaint is pending or, to the best
knowledge of any Responsible Officer, threatened against the Company or any of
its Subsidiaries before any Governmental Authority.

 
Section 3.22
Security Documents.

The Security Documents create (or will create upon the execution and delivery
thereof) valid security interests in, and Liens on, the Collateral purported to
be covered thereby, which security interests and Liens are currently (or will be
upon the execution and delivery of the Security Documents and upon the filing of
appropriate financing statements, the recordation of the applicable Mortgage
Instruments, the filing of appropriate notices with the United States Patent and
Trademark Office and the United States Copyright Office, in each case in favor
of the Administrative Agent, on behalf of the Lenders) perfected security
interests and Liens, prior to all other Liens other than Permitted Liens that
would be prior to the Liens in favor of the Administrative Agent as a matter of
law.

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Section 3.23
Accuracy and Completeness of Information.

All factual written information (other than written financial projections)
heretofore, contemporaneously or hereafter furnished by or on behalf of any
Credit Party or any of its Subsidiaries to the Administrative Agent or any
Lender for purposes of or in connection with this Agreement or any other Credit
Document, or any transaction contemplated hereby or thereby, is or will be true
and accurate in all material respects and not incomplete by omitting to state
any material fact necessary to make such information not misleading. The written
financial projections concerning the Company and its Subsidiaries heretofore,
contemporaneously or hereafter furnished by or on behalf of any Credit Party or
any of its Subsidiaries to the Administrative Agent or any Lender for purposes
of or in connection with this Agreement or any other Credit Document, or any
transaction contemplated hereby or thereby, have been and will be prepared in
good faith based upon assumptions that the Credit Parties believe to be
reasonable at the time of such preparation. There is no fact now known to the
Borrower, any other Credit Party or any of their Subsidiaries which has, or
could reasonably be expected to have, a Material Adverse Effect, which fact has
not been set forth herein, in the financial statements of the Company and its
Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in any
opinion or other written statement made or furnished by any Credit Party to the
Administrative Agent and/or the Lenders.

 
Section 3.24
Fraud and Abuse.

To the knowledge of any Responsible Officer, neither the Company and its
Subsidiaries nor any of their officers or directors, have engaged in any
activities which are prohibited under federal Medicare and Medicaid statutes, 42
U.S.C. §1320a-7b, or 42 U.S.C. §1395nn or the regulations promulgated pursuant
to such statutes or related state or local statutes or regulations, or which are
prohibited by binding rules of professional conduct, including but not limited
to the following: (a) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any applications for any
benefit or payment; (b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in determining
rights to any benefit or payment; (c) failing to disclose knowledge by a
claimant of the occurrence of any event affecting the initial or continued right
to any benefit or payment on its own behalf or on behalf of another with the
intent to secure such benefit or payment fraudulently; (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay such remuneration (i) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other applicable third party payors, or (ii) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which payment
may be made in whole or in part by Medicare, Medicaid or other applicable third
party payors, except in each case for any such prohibited activity that could
not reasonably be expected to result in a Material Adverse Effect.

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Section 3.25
Licensing and Accreditation.

Each of the Company and its Subsidiaries has, to the extent applicable: (a)
obtained and maintains in good standing all required licenses; (b) to the extent
prudent and customary in the industry in which it is engaged, obtained and
maintains accreditation from all generally recognized accrediting agencies; (c)
obtained and maintains Medicaid Certification and Medicare Certification; and
(d) entered into and maintains in good standing its Medicare Provider Agreement
and its Medicaid Provider Agreement, except in each case to the extent the
absence of such license, accreditation, certification or good standing could not
reasonably be expected to have a Material Adverse Effect. All such required
licenses are in full force and effect on the date hereof and have not been
revoked or suspended or otherwise limited, except in each case to the extent
such revocation, suspension or other limitation could not reasonably be expected
to have a Material Adverse Effect.

 
Section 3.26
Other Regulatory Protection.

Each of the Company and its Subsidiaries represent that it does not manufacture
pharmaceutical products and is in compliance with all applicable rules,
regulations and other requirements of the Food and Drug Administration (“FDA”),
the Federal Trade Commission (“FTC”), the Occupational Safety and Health
Administration (“OSHA”), the Consumer Product Safety Commission, the United
States Customs Service and the United States Postal Service and other state or
federal regulatory authorities or jurisdictions in which the Company or any of
its Subsidiaries do business or distribute and market products, except to the
extent that any such noncompliance, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. Neither the FDA, the
FTC, OSHA, the Consumer Product Safety Commission, nor any other such regulatory
authority has requested (or, to the knowledge of any Responsible Officer, are
considering requesting) any product recalls or other enforcement actions that
(a) if not complied with, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect and (b) with which the Company
and its Subsidiaries have not complied within the time period allowed.

 
Section 3.27
Reimbursement from Third Party Payors.

The accounts receivable of the Company and its Subsidiaries have been and will
continue to be adjusted to reflect the reimbursement policies (both those most
recently published in writing as well as those not in writing which have been
verbally communicated) of third party payors such as Medicare, Medicaid, Blue
Cross/Blue Shield, private insurance companies, health maintenance
organizations, preferred provider organizations, alternative delivery systems,
managed care systems, government contacting agencies and other third party
payors. In particular, accounts receivable relating to third party payors do not
and shall not exceed amounts any obligee is entered to receive under any
capitation arrangement, fee schedule, discount formula, cost-based reimbursement
or other adjustment or limitation to its usual charges.

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Section 3.28
Other Agreements.

No Credit Party is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in (a) any Medicaid
Provider Agreement, Medicare Provider Agreement or other agreement or instrument
to which such Person is a party, which default has resulted in, or if not
remedied within any applicable grace period could result in, the revocation,
termination, cancellation or material suspension of Medicaid Certification or
Medicare Certification of any such Person or (b) any other agreement or
instrument to which any such Person is a party, which default, individually or
in the aggregate, has, or if not remedied within any applicable grace period
could reasonably be expected to have, a Material Adverse Effect.

 
Section 3.29
Material Contracts.

Schedule 3.29 sets forth a true and correct and complete list of all Material
Contracts currently in effect. All of the Material Contracts are in full force
and effect and no material defaults exist thereunder.

 
Section 3.30
Insurance.

The insurance coverage of the Credit Parties and, with respect to the general
insurance coverage of the Company and its Subsidiaries, the Foreign Subsidiaries
is outlined as to carrier, policy number, expiration date, type and amount on
Schedule 3.30 and such insurance coverage complies with the requirements set
forth in Section 5.5(b).

 
Section 3.31
Classification as Senior Indebtedness.

The Credit Party Obligations constitute “Senior Indebtedness” under and as may
be defined in any agreement governing any outstanding Subordinated Indebtedness
and the subordination provisions set forth in each such agreement are legally
valid and enforceable against the parties thereto.

 
Section 3.32
Tax Shelter Regulations. 

The Borrower does not intend to treat the Loans or Letters of Credit and related
transactions as being a “reportable transaction” (within the meaning of Treasury
Regulation Section 1.6011-4). In the event the Borrower determines to take any
action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. If the Borrower so notifies the Administrative
Agent, the Borrower acknowledges that one or more of the Lenders may treat its
Loans and/or Letters of Credit as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and such Lender or Lenders, as
applicable, will maintain the lists and other records required by such treasury
regulation.

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Section 3.33
Regulation H.

No Mortgaged Property is a Flood Hazard Property.

 
Section 3.34
Anti-Terrorism Laws.

Neither any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally
of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act
of the United States of America (50 U.S.C. App. §§ 1 et seq.), as amended.
Neither any Credit Party nor any or its Subsidiaries is in violation of (a) the
Trading with the Enemy Act, as amended, (b) any of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) or any enabling legislation or executive order relating
thereto or (c) the Patriot Act. None of the Credit Parties (i) is a blocked
person described in Section 1 of the Executive Order Number 13224
(Anti-Terrorism Order) or (ii) to the knowledge of any Responsible Officer,
engages in any dealings or transactions, or is otherwise associated, with any
such blocked person.

 
Section 3.35
Compliance with OFAC Rules and Regulations.

None of the Credit Parties or their Subsidiaries or, to the knowledge of any
Responsible Officer, their respective Affiliates (a) is a Sanctioned Person,
(b) has more than 15% of its assets in Sanctioned Countries, or (c) derives more
than 15% of its operating income from investments in, or transactions with
Sanctioned Persons or Sanctioned Countries. No part of the proceeds of any
Extension of Credit hereunder will be used directly or indirectly to fund any
operations in, finance any investments or activities in or make any payments to,
a Sanctioned Person or a Sanctioned Country.

 
Section 3.36
Compliance with FCPA.

Each of the Credit Parties and their Subsidiaries is in compliance with the
Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq., and, to the
knowledge of any Responsible Officer, any foreign counterpart thereto. None of
the Credit Parties or their Subsidiaries has made a payment, offering, or
promise to pay, or authorized the payment of, money or anything of value (a) in
order to assist in obtaining or retaining business for or with, or directing
business to, any foreign official, foreign political party, party official or
candidate for foreign political office, (b) to a foreign official, foreign
political party or party official or any candidate for foreign political office,
and (c) with the intent to induce the recipient to misuse his or her official
position to direct business wrongfully to such Credit Party or its Subsidiary or
to any other Person, in violation of the Foreign Corrupt Practices Act, 15
U.S.C. §§ 78dd-1, et seq. 

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ARTICLE IV

CONDITIONS PRECEDENT

 
Section 4.1
Conditions to Closing Date and Initial Extensions of Credit.

This Agreement shall become effective upon, and the obligation of each Lender to
make the initial Revolving Loans and the Term Loans on the Closing Date is
subject to, the satisfaction of the following conditions precedent:

(a)   Execution of Agreements. The Administrative Agent shall have received (i)
counterparts of this Agreement from each party hereto, (ii) for the account of
each applicable Lender, a Revolving Note and a Term Note from the Borrower,
(iii) for the account of each Swingline Lender, the Swingline Note from the
Borrower, (iv) counterparts of the Security Agreement, and the Pledge Agreement,
each Mortgage Instrument and the other Security Documents from each Credit Party
party thereto and (v) executed consents, in the form of Schedule 4.1-3 from each
Lender authorizing the Administrative Agent to enter this Credit Agreement on
their behalf, in each case conforming to the requirements of this Agreement and
executed by a duly authorized officer of each party thereto, and in each case in
form and substance reasonably satisfactory to the Administrative Agent.

(b)   Authority Documents. The Administrative Agent shall have received the
following:

(i)   Articles of Incorporation/Organizational Documents. Copies of the articles
of incorporation, certificate of incorporation or other organizational
documents, as applicable, of each Credit Party, certified (other than with
respect to the Company, Colgate, Victory, Swiftsure and UK Ltd) to be true and
complete as of a recent date by the appropriate Governmental Authority of the
jurisdiction of its incorporation or organization, as the case may be.

(ii)   Resolutions. Copies of resolutions of the board of directors (or
comparable group and, where applicable, the shareholders or members) of each
Credit Party approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery thereof, certified
by a secretary or assistant secretary of such Credit Party (pursuant to a
secretary’s certificate in substantially the form of Schedule 4.1-1 attached
hereto) as of the Closing Date to be true and correct and in force and effect as
of such date.

(iii)   Bylaws/Operating Agreement. A copy of the bylaws, memorandum and
articles of association, limited liability company agreement or comparable
operating agreement of each Credit Party (other than the Company) certified by a
secretary or assistant secretary of such Credit Party (pursuant to a secretary’s
certificate in substantially the form of Schedule 4.1-1 attached hereto) as of
the Closing Date to be true and correct and in force and effect as of such date.

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(iv)   Good Standing. Copies of certificates of good standing, existence or its
equivalent (to the extent applicable) with respect to the each Credit Party
certified as of a recent date by the appropriate Governmental Authorities of the
jurisdiction of incorporation or organization and each other jurisdiction in
which the failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect on the business or operations of such
Credit Party in such state.

(v)   Incumbency. An incumbency certificate of Responsible Officers of each
Credit Party authorized to execute the Credit Documents on such Credit Party’s
behalf certified by a secretary or assistant secretary (pursuant to a
secretary’s certificate in substantially the form of Schedule 4.1-1 attached
hereto) to be true and correct as of the Closing Date.

(c)   Legal Opinions of Counsel.  The Administrative Agent shall have received
(i) opinions of legal counsel (including local counsel to the extent required by
the Administrative Agent) for the Credit Parties, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, which opinions shall
include, without limitation, a “no conflicts” opinion with respect to corporate
instruments and Material Contracts of the Credit Parties on the Closing Date
after giving effect to the transactions contemplated herein, (ii) an opinion
from STvB Advocaten (Caracao) N.V. as to, inter alia, the due authorization,
execution and delivery of the Credit Documents to which the Company is a party,
and (iii) an opinion from Berwin Leighton Paisner LLP as to, inter alia,
enforceability of the UK Security Documents and the due authorization, execution
and delivery of the Credit Documents to which Colgate, Victory, Swiftsure or UK
Ltd is a party, such opinions to be in form and substance reasonably
satisfactory to the Administrative Agent.

(d)   Reliance. The Administrative Agent shall have received a copy of each
opinion, agreement, and other material document required to be delivered
pursuant to the Acquisition Documents and the transactions contemplated in
connection therewith, together with evidence that the Administrative Agent and
the Lenders have been authorized to rely on each such opinion to the extent
counsel providing each such opinion has agreed to such reliance, all in form and
substance reasonably satisfactory to the Administrative Agent.

(e)   Personal Property Collateral. The Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative
Agent:

(i)   a perfection certificate setting forth the state or jurisdiction of
incorporation or organization of each Credit Party and each jurisdiction where
any Collateral of such Credit Party with a fair market value in excess of
$100,000 is located or where the chief executive office of such Credit Party is
located, copies of Lien searches in jurisdictions as required by the
Administrative Agent, and copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted Liens;

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(ii)   UCC financing statements for each appropriate jurisdiction as is
necessary, in the Administrative Agent’s reasonable discretion, to perfect the
Administrative Agent’s security interest in the Collateral; and

(iii)   duly executed consents as are necessary, in the Administrative Agent’s
sole discretion, to perfect the Lenders’ security interest in the Collateral.

(f)   [Reserved]

(g)   Liability, Casualty and Business Interruption Insurance. The
Administrative Agent shall have received copies of insurance policies (including
a Marsh Inc. report) or certificates of insurance evidencing liability and
casualty insurance meeting the requirements set forth herein or in the Security
Documents and business interruption insurance satisfactory to the Administrative
Agent. The Administrative Agent shall be named as loss payee or mortgagee, as
its interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and the respective
Credit Party shall use commercially reasonable efforts to obtain from each
provider of any such insurance an agreement that such provider, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, will give the Administrative Agent thirty (30) days
prior written notice before any such policy or policies shall be altered or
canceled.

(h)   Fees. The Administrative Agent and the Lenders shall have received (i) all
fees, if any, owing pursuant to the Fee Letters and Section 2.5 and (ii)
evidence that the aggregate amount of fees and expenses payable in connection
with the consummation of the Acquisition by the Company and its Subsidiaries
(excluding those fees identified in the foregoing subsection (i)) did not exceed
$12,500,000.

(i)   Litigation. Except as set forth on Schedule 3.8, there shall not exist any
material litigation, investigation, claim, criminal prosecution, civil
investigative demand, imposition of criminal or civil fines and penalties, or
any other proceeding of or before any arbitrator or Governmental Authority
(including but not limited to those regulatory agencies responsible for
licensing, accrediting or issuing Medicare or Medicaid certifications) affecting
or relating to any of the Company or its Subsidiaries, this Agreement and the
other Credit Documents, that has not been settled, dismissed, vacated,
discharged or terminated prior to the Closing Date.

(j)   Solvency Certificate. The Administrative Agent shall have received an
officer’s certificate prepared by the chief financial officer of the Company as
to the financial condition, solvency and related matters of each Credit Party,
in each case after giving effect to the Acquisition and the initial borrowings
under the Credit Documents, in substantially the form of Schedule 4.1-2 hereto.

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(k)   Account Designation Letter. The Administrative Agent shall have received
the executed Account Designation Letter in the form of Schedule 1.1-1 hereto.

(l)   Corporate Structure. The corporate, capital and ownership structure of the
Company and its Subsidiaries after giving effect to the Acquisition shall be as
described in Schedule 3.12, and shall otherwise be reasonably satisfactory to
the Administrative Agent. The Administrative Agent shall be satisfied with the
management of the Company and its Subsidiaries after giving effect to the
Acquisition.

(m)   Acquisition Documents. The Administrative Agent shall have reviewed and
approved to its reasonable satisfaction all of the Acquisition Documents (other
than the Agreement and Plan of Merger referred to in the definition of
“Acquisition Documents” and all related schedules and exhibits, which have been
approved) and there shall not have been any material modification, amendment,
supplement or waiver to the Acquisition Documents subsequent to August 4, 2006
without the prior written consent of the Administrative Agent. The
Acquisition shall have been consummated substantially in accordance with the
terms of the Acquisition Documents (without waiver of any material conditions
precedent to the obligations of any party thereto without the consent of the
Administrative Agent). The Administrative Agent shall have received a copy,
certified by an officer of the Borrower as true and complete, of each
Acquisition Document as originally executed and delivered, together with all
exhibits and schedules thereto.

(n)   Consents. The Administrative Agent shall have received evidence that all
governmental, shareholder, board of director and material third party consents
and approvals that the Borrower can obtain using its commercially reasonable
efforts and that are necessary in connection with the financings, the
Acquisition and other transactions contemplated hereby have been obtained and
all applicable waiting periods have expired without any action being taken by
any authority that could restrain, prevent or impose any material adverse
conditions on such transactions or that could seek or threaten any of such
transactions.

(o)   Compliance with Laws. The financings and other transactions contemplated
hereby shall be in compliance with all applicable Requirements of Law (including
all applicable securities and banking laws, rules and regulations).

(p)   Bankruptcy. There shall be no bankruptcy or insolvency proceedings with
respect to any Credit Party or any of its Subsidiaries.

(q)   Material Adverse Effect. No material adverse change shall have occurred or
could reasonably be expected to occur since December 31, 2005 in the business,
properties, prospects, operations, regulatory environment or condition
(financial or otherwise) of either the Company, the Borrower and its
Subsidiaries, taken as a whole or the Acquired Company and its Subsidiaries,
taken as a whole.

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(r)   Minimum Consolidated EBITDA. The Administrative Agent shall have received
evidence satisfactory thereto provided by the Company that the Consolidated
EBITDA for the twelve-month period ending on the last day of the most recent
fiscal quarter for which financial statements of the Company and its
Subsidiaries are available, calculated on a Pro Forma Basis, is no less than
$79,000,000.

(s)   Leverage Ratio. The Leverage Ratio (determined using Funded Debt of the
Company and its Subsidiaries as of the Closing Date and pro forma Consolidated
EBITDA of the Company and its Subsidiaries for the twelve-month period ending on
the last day of the most recent fiscal quarter for which financial statements of
the Company and its Subsidiaries are available), calculated on a Pro Forma Basis
as of the Closing Date, shall not exceed 4.25 to 1.0.

(t)    Financial Statements. The Administrative Agent shall have received copies
of the financial statements and projections referred to in Section 3.1 hereof,
each in form and substance satisfactory to it.

(u)   Termination of Existing Indebtedness; Approval of Intercompany
Indebtedness. All existing Indebtedness for borrowed money of the Company, the
Borrower, the Acquired Company and their respective Subsidiaries in excess of
$5,000,000 in the aggregate, other than Indebtedness incurred by SRL as set
forth on Schedule 6.1(b), shall have been repaid in full and terminated and all
Liens relating thereto shall have been terminated. The Administrative Agent
shall have reviewed and approved in its sole discretion all loan documentation
with respect to any intercompany Indebtedness of the Credit Parties and the
Administrative Agent shall have received a copy, certified by a Responsible
Officer of the Borrower as true and complete, of each such document, as
originally executed and delivered, together with all exhibits, schedules,
amendments and modifications thereto.

(v)   Officer’s Certificates. The Administrative Agent shall have received a
certificate executed by a Responsible Officer of the Borrower as of the Closing
Date stating that (i) immediately after giving effect to this Credit Agreement
(including the initial Extensions of Credit hereunder), the other Credit
Documents and the Acquisition Documents and all the transactions contemplated
therein to occur on such date, (A) no Default or Event of Default exists, (B)
all representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and (C) the Credit
Parties are in compliance with each of the financial covenants set forth in
Section 5.9 and demonstrating compliance with such financial covenants.

(w)   Credit Rating. The Borrower shall have obtained a senior secured credit
rating from Moody’s and from S&P.

(x)   Patriot Act Certificate. The Administrative Agent shall have received a
certificate satisfactory thereto, for benefit of itself and the Lenders,
provided by the Borrower that sets forth information required by the Patriot Act
(as defined in Section 9.18) including, without limitation, the identity of each
Credit Party, the name and address of each Credit Party and other information
that will allow the Administrative Agent or any Lender, as applicable, to
identify each Credit Party in accordance with the Patriot Act.

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(y)   Additional Matters. All other documents and legal matters in connection
with the transactions contemplated by this Agreement shall be reasonably
satisfactory in form and substance to the Administrative Agent and its counsel.

 
Section 4.2
Conditions to All Extensions of Credit.

The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:

(a)   Representations and Warranties. The representations and warranties made by
the Credit Parties herein, in the Security Documents or which are contained in
any certificate furnished at any time under or in connection herewith shall be
true and correct on and as of the date of such Extension of Credit as if made on
and as of such date (other than any such representations or warranties that, by
their terms, refer to a specific date other than the date of such Extension of
Credit, in which case, as of such specific date).

(b)   No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the Extension
of Credit to be made on such date unless such Default or Event of Default shall
have been waived in accordance with this Agreement.

(c)   Compliance with Commitments. Immediately after giving effect to the making
of any such Extension of Credit (and the application of the proceeds thereof),
(i) the sum of outstanding Revolving Loans plus outstanding Swingline Loans plus
outstanding LOC Obligations shall not exceed the Revolving Committed Amount,
(ii) the outstanding LOC Obligations shall not exceed the LOC Committed Amount
and (iii) the Swingline Loans shall not exceed the Swingline Committed Amount.

(d)   Additional Conditions to Extensions of Credit. If such Extension of Credit
is made pursuant to Sections 2.1, 2.2, 2.3 or 2.4, all conditions set forth in
such Section shall have been satisfied.

Each request for an Extension of Credit and each acceptance by the Borrower of
any such Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (d) of this Section have been
satisfied.

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ARTICLE V

AFFIRMATIVE COVENANTS

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note shall remain outstanding and unpaid and the Credit
Party Obligations, together with interest, Commitment Fees and all other amounts
owing to the Administrative Agent or any Lender hereunder, shall have been paid
in full, the Credit Parties shall:

 
Section 5.1
Financial Statements.

Furnish to the Administrative Agent (which shall transmit or make available the
same to the Lenders as soon as practicable):

(a)   Annual Financial Statements. As soon as available, but in any event within
ninety (90) days after the end of each fiscal year of the Company commencing
with the fiscal year ended December 31, 2006 (or, with respect to the
comparative information required below, commencing with the fiscal year ended
December 31, 2006), a copy of the consolidated and consolidating balance sheet
of the Company and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of income and
retained earnings and of cash flows of the Company and its consolidated
Subsidiaries for such year, audited (with respect to the consolidated statements
only) by a firm of independent certified public accountants of, as appropriate,
nationally or internationally recognized standing reasonably acceptable to the
Administrative Agent, setting forth in comparative form consolidated and
consolidating figures for the preceding fiscal year, reported on without a
“going concern” or like qualification or exception, or qualification indicating
that the scope of the audit was inadequate to permit such independent certified
public accountants to certify such financial statements without such
qualification;

(b)   Annual Unaudited Financial Statements. As soon as available, but in any
event within ninety (90) days after the end of each fiscal year of the Company
commencing with the fiscal year ended December 31, 2006 (or, with respect to the
comparative information required below, commencing with the fiscal year ended
December 31, 2006), a copy of the consolidated and consolidating balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of income and
retained earnings and of cash flows of the Borrower and its consolidated
Subsidiaries for such year, setting forth in comparative form consolidated and
consolidating figures for the preceding fiscal year.

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(c)   Quarterly Financial Statements. (i) As soon as available and in any event
within (A) forty-five (45) days after the end of each of the first three fiscal
quarters of the Company and (B) ninety (90) days after the end of the fourth
fiscal quarter of the Company, a company-prepared consolidated and consolidating
balance sheet of the Borrower and its consolidated Subsidiaries as at the end of
such period and related company-prepared consolidated and
consolidating statements of income and retained earnings and of cash flows for
the Borrower and its consolidated Subsidiaries for such quarterly period and for
the portion of the fiscal year ending with such period, in each case setting
forth in comparative form consolidated and consolidating figures for the
corresponding period or periods of the preceding fiscal year (subject to normal
recurring year-end audit adjustments) and (ii) as soon as available and in any
event within (A) forty-five (45) days after the end of each of the first three
fiscal quarters of the Company and (B) ninety (90) days after the end of the
fourth fiscal quarter of the Company, a company-prepared consolidated and
consolidating balance sheet of the Company and its consolidated Subsidiaries as
at the end of such period and related company-prepared consolidated and
consolidating statements of income and retained earnings and of cash flows for
the Company and its consolidated Subsidiaries for such quarterly period and for
the portion of the fiscal year ending with such period, in each case setting
forth in comparative form consolidated and consolidating figures for the
corresponding period or periods of the preceding fiscal year (subject to normal
recurring year-end audit adjustments) and to the extent not disclosed in the
Company’s Form 10-Q, management discussion and analysis of operating results
inclusive of operating metrics in comparative form; and

(d)   Annual Budget Plan. As soon as available, but in any event within
sixty (60) days after the end of each fiscal year, a copy of the detailed annual
budget or plan of the Company for the next fiscal year on a quarterly basis, in
form and detail reasonably acceptable to the Administrative Agent, together with
a summary of the material assumptions made in the preparation of such annual
budget or plan;

all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a), (b) and (c) above, in accordance with GAAP applied
consistently throughout the periods reflected therein and further accompanied by
a description of, and an estimation of the effect on the financial statements on
account of a change, if any, in the application of accounting principles as
provided in Section 1.3.

 
Section 5.2
Certificates; Other Information.

Furnish to the Administrative Agent (which shall transmit or make available the
same to the Lenders as soon as practicable):

(a)   concurrently with the delivery of the financial statements referred to in
Section 5.1(a) above, certificates of the independent certified public
accountants of the Company reporting on such financial statements stating that
in making the examination necessary therefore no knowledge was obtained of any
Default or Event of Default under Section 5.9, except as specified in such
certificate;

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(b)   concurrently with the delivery of the financial statements referred to in
Sections 5.1(a), 5.1(b) and 5.1(c) above, a certificate of a Responsible Officer
of the Borrower stating that, to the best of such Responsible Officer’s
knowledge, during such period each of the Credit Parties observed or performed
all of its covenants and other agreements, and satisfied every condition,
contained in this Agreement to be observed, performed or satisfied by it, and
that such Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and such certificate shall
include the calculations in reasonable detail required to indicate compliance
with Section 5.9 as of the last day of such period;

(c)   within ten (10) days after the same are sent, copies of all reports (other
than those otherwise provided pursuant to Section 5.1 and those which are of a
promotional nature) and other financial information which the Company sends to
its members and equity holders, and within ten (10) days after the same are
filed, copies of all financial statements and non-confidential reports which the
Company may make to or file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;

(d)   within ninety (90) days after the end of each fiscal year of the Company,
a certificate containing information regarding the amount of all Asset
Dispositions, Debt Issuances, and Equity Issuances that were made during the
prior fiscal year and amounts received in connection with any Recovery Event
during the prior fiscal year;

(e)   promptly upon receipt thereof, a copy of any other report or “management
letter” submitted or presented by independent accountants to any Credit Party or
any of the Borrower’s Subsidiaries in connection with any annual, interim or
special audit of the books of such Person regarding material matters of the
Company and its Subsidiaries, taken as a whole; 

(f)   promptly, copies of all material notices from or material requests to the
FDA, FTC, and OSHA (each, as defined in Section 3.26); and

(g)   promptly, such additional financial and other information as the
Administrative Agent, on behalf of any Lender, may from time to time reasonably
request.

 
Section 5.3
Payment of Obligations.

Pay, discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its taxes (Federal, state, local and any
other taxes) and all its other obligations and liabilities of whatever nature
and any additional costs that are imposed as a result of any failure to so pay,
discharge or otherwise satisfy such obligations and liabilities, except (a) when
the amount or validity of such obligations, liabilities and costs is currently
being contested in good faith by appropriate proceedings and reserves, if
applicable, in conformity with GAAP with respect thereto have been provided on
the books of any Credit Party, as the case may be or (b) where any such failure
to pay, discharge or satisfy could not reasonably be expected to have a Material
Adverse Effect.

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Section 5.4
Conduct of Business and Maintenance of Existence.

Continue to (a) engage in business of the same general type as now conducted by
it on the Closing Date and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or that the applicable Credit Party
reasonably deems desirable in the normal conduct of its business; provided that
any Credit Party or any Subsidiary thereof may reorganize in Delaware or in
another U.S. jurisdiction acceptable to the Required Lenders so long as the
Administrative Agent receives prior written notice thereof and all actions
required to continue the perfection of the Administrative Agent’s Liens on the
Collateral are taken; and provided, further, the Company may consummate the
Acquisition and any other merger, consolidation, purchase, lease or acquisition
permitted under Section 6.4 or liquidate or dissolve any Subsidiary that has no
assets or that has sold, disposed of or otherwise transferred all of its assets
to the Borrower or a Subsidiary Guarantor, and (b) comply with all Contractual
Obligations and Requirements of Law applicable to it except to the extent that
failure to comply therewith, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

 
Section 5.5
Maintenance of Property; Insurance.

(a)   Keep all Material Property useful and necessary in its business in good
working order and condition (ordinary wear and tear, damage by casualty and
obsolescence excepted);

(b)   Maintain with financially sound and reputable insurance companies
insurance on all its Material Property (including without limitation its
material tangible Collateral) in at least such amounts (or such greater amounts
to the extent any coverage amount maintained by the Credit Parties is
significantly lower than the coverage amount maintained by companies engaged in
the same or a similar business in the same general area) and against at least
such risks as are maintained by the Credit Parties as of the Closing Date and
any other material risks as are usually insured against in the same general area
by companies engaged in the same or a similar business; and furnish to the
Administrative Agent, upon written request, full information as to the insurance
carried. The Administrative Agent shall be named as loss payee or mortgagee, as
its interest may appear, (or additional insured in the case of liability
coverage) with respect to any such insurance providing coverage in respect of
any Collateral, and each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give the
Administrative Agent thirty (30) days prior written notice before any such
policy or policies shall be altered or canceled, and that no act or default of
any Credit Party or any Subsidiary of the Company or any other Person shall
affect the rights of the Administrative Agent or the Lenders under such policy
or policies; and

(c)   In case of any material loss, damage to or destruction of the Collateral
of any Credit Party or any part thereof, such Credit Party shall promptly give
written notice thereof to the Administrative Agent generally describing the
nature and extent of such damage or destruction. In case of any material loss,
damage to or destruction of the Collateral of any Credit Party or any part
thereof, such Credit Party, whether or not the insurance proceeds, if any,
received on account of such damage or destruction shall be sufficient for that
purpose, at such Credit Party’s cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed.

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Section 5.6
Inspection of Property; Books and Records; Discussions.

Keep proper books and records of account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its businesses and activities; and
permit, during regular business hours and upon reasonable notice by the
Administrative Agent or any Lender, the Administrative Agent or any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records (other than materials protected by the attorney-client
privilege and materials which any Credit Party may not disclose without
violation of a confidentiality obligation binding upon it) once a fiscal quarter
or upon the occurrence and during the continuance of a Default or an Event of
Default, and to discuss the business, operations, properties and financial and
other condition of the Credit Parties and their Subsidiaries with officers and
employees of the Credit Parties and their Subsidiaries and with its independent
certified public accountants. The forgoing, with respect to the Lenders, shall
be at such Lender’s expense and, with respect to the Administrative Agent, shall
be at the Borrower’s expense.

 
Section 5.7
Notices.

Give notice in writing to the Administrative Agent (which shall promptly
transmit such notice to each Lender) of:

(a)   promptly, but in any event within two (2) Business Days after any
Responsible Officer of a Credit Party knows thereof, the occurrence of any
Default or Event of Default;

(b)   promptly, any default or event of default under any Contractual Obligation
of any Credit Party or any of its Subsidiaries which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect or
could reasonably be expected to result in a monetary payment in excess of
$10,000,000;

(c)   promptly, any litigation, or any investigation or proceeding known to any
Credit Party (i) affecting any Credit Party or any of its Subsidiaries which, if
adversely determined, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect or could reasonably be expected to
result in a monetary judgment in excess of $5,000,000 or (ii) affecting or with
respect to this Agreement or any other Credit Document;

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(d)   as soon as possible and in any event within thirty (30) days after any
Responsible Officer of a Credit Party knows or has reason to know thereof: (i)
the occurrence of any material Reportable Event with respect to any Single
Employer Plan, a failure to make any required contribution to a Single Employer
Plan, the creation of any Lien in favor of a Single Employer Plan or in favor of
the PBGC with respect to a Single Employer Plan (other than a Permitted Lien) or
any withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, which could reasonably be expected to result in any material
liability for any Credit Party, or (ii) the institution of proceedings or the
taking of any other action by the PBGC or any Credit Party or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the terminating, Reorganization or Insolvency of, any Plan, which could
reasonably be expected to result in any material liability for any Credit Party;

(e)   promptly, of the institution of any investigation or proceeding against
any Credit Party to suspend, revoke or terminate or which may result in the
termination of any Medicaid Provider Agreement, Medicaid Certification, Medicare
Provider Agreement, Medicare Certification or exclusion from any Medical
Reimbursement Program;

(f)   promptly, after any Credit Party becomes involved in a pending civil or
criminal investigation, criminal action or civil proposed debarment, exclusion
or other sanctioning action related to any Federal or state healthcare program;

(g)   promptly, any other development or event which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;

(h)   promptly, any intention by the Borrower to treat the Loans and/or Letters
of Credit and related transactions as being a “reportable transaction” (within
the meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of
IRS Form 8886 or any successor form; and

(i)    promptly, the Company or any of its Subsidiaries (i) entering into a
collective bargaining agreement or Multiemployer Plan covering the employees of
the Company or any of its Subsidiaries, (ii) suffering any material strike,
walkout, work stoppage or other material labor difficulty or (iii) becoming
aware of any material unfair labor practice complaint against the Company or any
of its Subsidiaries before any Governmental Authority.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto. In the case of any notice of a Default or Event of Default, the
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.

 
Section 5.8
Environmental Laws.

(a)   Comply in all material respects with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply in all material respects with and
maintain, and ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws except to the extent that failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect;

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(b)   Conduct and complete all investigations, studies, sampling and testing,
and all remedial, removal and other actions required under Environmental Laws
and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws except
to the extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not reasonably be
expected to have a Material Adverse Effect; and

(c)   Defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective employees, agents, officers and directors and
affiliates, from and against any and all claims, demands, penalties, fines,
liabilities, settlements, damages, costs and expenses of whatever kind or nature
known or unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of any Credit Party or any of the
Company’s Subsidiaries or the Properties, or any orders, requirements or demands
of Governmental Authorities related thereto, including, without limitation,
reasonable attorney’s and consultant’s fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing arise out of the gross negligence or willful misconduct of
the Person seeking indemnification or any of its employees, agents, officers and
directors and affiliates. The agreements in this paragraph shall survive
repayment of the Notes and all other amounts payable hereunder.

 
Section 5.9
Financial Covenants.

Commencing on the day immediately following the Closing Date and for so long as
this Agreement shall remain in effect, each of the Credit Parties shall, and
shall cause each of its Subsidiaries to, comply with the following financial
covenants:

(a)   Leverage Ratio. The Leverage Ratio, as of the last day of each fiscal
quarter of the Company occurring during the periods indicated below, shall be
less than or equal to the following:

Period
Ratio
Closing Date through June 30, 2007
4.25 to 1.0
July 1, 2007 through December 31, 2007
4.00 to 1.0
January 1, 2008 through June 30, 2008
3.75 to 1.0
July 1, 2008 through December 31, 2008
3.50 to 1.0
January 1, 2009 through June 30, 2009
3.25 to 1.0
July 1, 2009 through December 31, 2009
3.00 to 1.0
January 1, 2010 through June 30, 2010
2.75 to 1.0
July 1, 2010 and thereafter
2.50 to 1.0

 
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(b)   Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio, as of the
last day of each fiscal quarter of the Company occurring during the periods
indicated below, shall be greater than or equal to the following:

Period
Ratio
October 1, 2006 through December 31, 2008
1.250 to 1.0
January 1, 2009 through December 31, 2009
1.300 to 1.0
January 1, 2010 and thereafter
1.375 to 1.0

Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made in determining compliance for any applicable
period with the financial covenants set forth in this Section, (i) after
consummation of any Permitted Acquisition, (A) income statement items and other
balance sheet items (whether positive or negative) attributable to the Target
acquired in such transaction shall be included in such calculations to the
extent relating to such applicable period, subject to adjustments mutually
acceptable to the Borrower and the Administrative Agent, and (B) Indebtedness of
a Target which is retired in connection with a Permitted Acquisition shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period and (ii) after any Asset Disposition permitted by
Section 6.4(a)(ix), (A) income statement items, cash flow statement items and
other balance sheet items (whether positive or negative) attributable to the
property or assets disposed of shall be excluded in such calculations to the
extent relating to such applicable period, subject to adjustments mutually
acceptable to the Borrower and the Administrative Agent and (B) Indebtedness
that is repaid with the proceeds of such Asset Disposition shall be excluded
from such calculations and deemed to have been repaid as of the first day of
such applicable period.

 
Section 5.10
Additional Subsidiary Guarantors.

The Company will cause each of its Domestic Subsidiaries, whether newly formed,
after acquired or otherwise existing, to promptly become a Guarantor hereunder
by way of execution of a Joinder Agreement. The guaranty obligations of any such
Additional Credit Party shall be secured by, among other things, the property
and assets of such Additional Credit Party and such Domestic Subsidiary shall
execute and deliver to the Administrative Agent such Security Documents, legal
opinions and related documents as the Administrative Agent may reasonably
request with respect to such property and assets.

 
Section 5.11
Compliance with Law.

The Credit Parties will, and will cause each of its Subsidiaries to, (a) comply
with all expressly stated laws, rules, regulations, orders, restrictions and
valid requirements imposed by all Governmental Authorities and regulatory
authorities applicable to it, its property and assets and the conduct of its
business if noncompliance with any such law, rule, regulation, order,
restriction or requirement, including without limitation Titles XVIII and XIX of
the Social Security Act, Medicare Regulations and Medicaid Regulations,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and (b) obtain and maintain all licenses, permits,
certifications and approvals of all applicable Governmental Authorities as are
required for the conduct of its business as currently conducted and herein
contemplated, including without limitation professional licenses, appropriate
Medicaid Certifications and Medicare Certifications, if failure to do so could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect. Specifically, but without limiting the foregoing, and except
where any such failure to comply, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (x) billing policies,
arrangements, protocols and instructions will comply with reimbursement
requirements under Medicare, Medicaid and other Medical Reimbursement Programs
and will be administered by properly trained personnel; and (y) medical director
compensation arrangements and other arrangements with referring physicians will
comply with applicable state and federal self-referral and anti-kickback laws,
including without limitation 42 U.S.C. Section 1320a-7b(b)(1) - (b)(2) and 42
U.S.C. Section 1395nn.

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Section 5.12
Pledged Assets. 

(a)   The Company will, and will cause each of its Subsidiaries to, cause (i)
100% of the outstanding Capital Stock of each of Victory, the Borrower and the
Subsidiary Guarantors and (ii) 65% (to the extent the pledge of a greater
percentage would be unlawful or would cause any materially adverse tax
consequences to the Borrower or any Guarantor) of the voting Capital Stock and
100% of the non-voting Capital Stock of each first-tier Foreign Subsidiary of
the Borrower and the Subsidiary Guarantors, in each case to be subject at all
times to a first priority, perfected Lien in favor of the Administrative Agent
pursuant to the terms and conditions of the Security Documents or such other
security documents as the Administrative Agent shall reasonably request.

(b)   If, subsequent to the Closing Date, any Credit Party shall acquire any
securities, instruments (except checks), chattel paper or other personal
property required for perfection to be delivered to the Administrative Agent as
Collateral hereunder or under any of the Security Documents, such Credit Party
shall promptly (and in any event within three (3) Business Days) after such
acquisition notify the Administrative Agent of same; provided that property the
value of which, individually, is less than $500,000 and, in the aggregate, is
less than $1,000,000 in any twelve-month period, shall not be required to be
delivered until such time that all such property shall exceed $1,000,000 in the
aggregate in any twelve-month period. Each of the Credit Parties shall take such
action at its own expense as may be necessary or otherwise requested by the
Administrative Agent (including, without limitation, any of the actions
described in Sections 4.1(e) and 5.13(b) hereof) to ensure that the
Administrative Agent has a first priority perfected Lien to secure the Credit
Party Obligations in (i) all personal property Collateral of Colgate, Victory,
the Borrower and Subsidiary Guarantors and all tangible personal property
Collateral of the Company located in the United States and (ii) to the extent
required by the Administrative Agent or the Required Lenders in its or their
sole reasonable discretion, all real property owned by the Credit Parties
located in the United States, subject in each case only to Permitted Liens.

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(c)   If, subsequent to the Closing Date, a Credit Party leases a warehouse,
plant or other real property material to such Person’s business and located
within the United States, such Credit Party shall (i) promptly notify the
Administrative Agent of such lease, (ii) to the extent required by the
Administrative Agent and to the extent consented to by the relevant landlord or
not prohibited under the lease, promptly deliver to the Administrative Agent
such Mortgage Instruments, title reports, Mortgage Policies, Surveys,
environmental site assessment reports, legal opinions and other documentation as
the Administrative Agent may reasonably require and (iii) use its reasonable
best efforts to deliver to the Administrative Agent such estoppel letters,
consents and waivers from the landlord on such real property as may be required
by the Administrative Agent; provided, that the Credit Party shall not be
required to expend any significant amount of money to obtain such estoppel
letters, consents and waivers.

 
Section 5.13
Limitations on Colgate and Victory.

Neither Colgate nor Victory shall have any Indebtedness or operations other than
(a) its Guaranty, (b) intercompany Subordinated Indebtedness or Investments
permitted hereunder, (c) operations as contemplated by the Tax Structure
Documents, (d) operations relating to the holding of the Capital Stock of its
Subsidiaries and (e) operations related to satisfying its obligations as a
Credit Party.

 
Section 5.14
Further Assurances; Post-Closing Covenant.

(a)   Further Assurances. Upon the reasonable request of the Administrative
Agent, promptly perform or cause to be performed any and all acts and execute or
cause to be executed any and all documents for filing under the provisions of
the Uniform Commercial Code or any other Requirement of Law which are necessary
or advisable to maintain in favor of the Administrative Agent, for the benefit
of the Secured Parties, Liens on the Collateral that are duly perfected in
accordance with the requirements of, or the obligations of the Credit Parties
under, the Credit Documents and all applicable Requirements of Law.

(b)   Deposit Account Control Agreements. Within sixty (60) days after the
Closing Date (or such extended period of time as agreed to by the Administrative
Agent), the Administrative Agent shall have received, in form and substance
reasonably satisfactory to the Administrative Agent, Deposit Account Control
Agreements and Securities Account Control Agreements with respect to each
account required to be subject to such agreement pursuant to Section 6.13.

(c)   Notice of Grant of Security. Within fifteen (15) Business Days after the
Closing Date (or such extended period of time as agreed to by the Administrative
Agent), the Administrative Agent shall have received, in form and substance
reasonably satisfactory to the Administrative Agent, (i) evidence that a notice
of a grant of security was served upon Bank of America, N.A. with respect to
each account of Colgate, Victory Swiftsure and UK Ltd located in the United
Kingdom and (ii) an acknowledgement from Bank of America, N.A. as to the
existence of such security, to the extent such acknowledgement can be obtained
using commercially reasonable efforts.

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(d)   Real Property Collateral. Within sixty (60) days after the Closing Date
(or such extended period of time as agreed to by the Administrative Agent), the
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent:

(i)   fully executed and notarized Mortgage Instruments encumbering the owned
or, to the extent not prohibited by the applicable lease or consented to by the
applicable landlord, leasehold interest in the Mortgaged Properties owned or
leased by each Credit Party and set forth on Schedule 3.19(d);

(ii)   a title report in respect of each of the Mortgaged Properties;

(iii)   with respect to each Mortgaged Property, ALTA Mortgage Policies issued
by the Title Insurance Company, assuring the Administrative Agent that each of
the Mortgage Instruments creates a valid and enforceable first priority mortgage
lien on the applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies shall provide for
affirmative insurance and such reinsurance as the Administrative Agent may
reasonably request, all of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent;

(iv)   evidence as to (A) whether any Mortgaged Property is in an area
designated by the Federal Emergency Management Agency as having special flood or
mud slide hazards (a “Flood Hazard Property”) and (B) if any Mortgaged Property
is a Flood Hazard Property, (1) whether the community in which such Mortgaged
Property is located is participating in the National Flood Insurance Program,
(2) the Borrower’s or the applicable Credit Party’s written acknowledgment of
receipt of written notification from the Administrative Agent (y) as to the fact
that such Mortgaged Property is a Flood Hazard Property and (z) as to whether
the community in which each such Flood Hazard Property is located is
participating in the National Flood Insurance Program and (3) copies of
insurance policies or certificates of insurance of the Borrower and its
Subsidiaries evidencing flood insurance reasonably satisfactory to the
Administrative Agent and naming the Administrative Agent as loss payee on behalf
of the Lenders;

(v)   to the extent available, surveys of the sites of the Mortgaged Properties
certified to the Administrative Agent and the Title Insurance Company in a
manner reasonably satisfactory to them, dated a date satisfactory to each of the
Administrative Agent and the Title Insurance Company by an independent
professional licensed land surveyor reasonably satisfactory to each of the
Administrative Agent and the Title Insurance Company;

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(vi)   reasonably satisfactory Phase I environmental site assessment reports (or
other environmental reports acceptable to the Administrative Agent) with respect
to each of the Mortgaged Properties, together with (to the extent required by
the Administrative Agent) reliance letters with respect to such reports in favor
of the Lenders;

(vii)      opinions of counsel to the Borrower or the applicable Credit Party
for each jurisdiction in which the Mortgaged Properties are located; and

(viii)     in the case of the Properties located in McKinney, Texas, Vista,
California, Huntersville, North Carolina, Springfield, Massachusetts, and Wayne,
New Jersey, such estoppel letters, consents and waivers from the landlords on
such Properties as the Administrative Agent may reasonably require; provided,
that the Credit Parties shall not be required (A) to obtain any such consent to
the extent the applicable landlord refuses to execute such consent after the
Credit Parties have used their commercially reasonable efforts to obtain such
consent or (B) to expend any significant amount of money to obtain such
consents.

(e)   Stock Certificate and Power. Within thirty (30) days after the Closing
Date (or such extended period of time as agreed to by the Administrative Agent),
the Administrative Agent shall have received the stock certificate evidencing
the interest owned by Orthofix Inc. in Innovative Spinal Technologies and a duly
executed in blank undated stock or transfer power with respect thereto.

(f)   Opinion. Within thirty (30) days after the Closing Date (or such extended
period of time as agreed to by the Administrative Agent), the Administrative
Agent shall have received an opinion, in form and substance reasonably
satisfactory to the Administrative Agent, that the Capital Stock of each of the
Credit Parties organized under the laws of Delaware is duly authorized, validly
issued, fully paid, non-assessable and owned of record by such Credit Party.

(g)   Intellectual Property. Within thirty (30) days after the Closing Date (or
such extended period of time as agreed to by the Administrative Agent), the
Administrative Agent shall have received evidence that all chain of title issues
have been resolved with the United States Patent and Trademark Office and all
third party security interests with respect to the Intellectual Property of the
Credit Parties have been released of record with the United States Patent and
Trademark Office; provided that any Indebtedness associated with such security
interests shall have been paid in full and terminated on or prior to the Closing
Date.

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ARTICLE VI

NEGATIVE COVENANTS

The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fee and all other amounts owing
to the Administrative Agent or any Lender hereunder, are paid in full that:

 
Section 6.1
Indebtedness.

No Credit Party will, nor will it permit any Subsidiary to, contract, create,
incur, assume or permit to exist any Indebtedness, except:

(a)   Indebtedness arising or existing under this Agreement and the other Credit
Documents;

(b)   Indebtedness of the Company and its Subsidiaries existing as of the
Closing Date as referenced in the financial statements referenced in Section 3.1
or the liquidity section of the management discussion and analysis (and set out
more specifically in Schedule 6.1(b) hereto) and renewals, refinancings or
extensions thereof in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension; provided that the Credit
Parties party to the intercompany notes set forth on Schedule 6.1(b) hereby
agree that the intercompany Indebtedness evidenced by such intercompany notes
shall be subordinated to the Credit Party Obligations and that the Credit Party
Obligations shall be paid in full prior to any payments being made on such
intercompany notes, except as permitted by Section 6.10;

(c)   Indebtedness of the Borrower and its Subsidiaries incurred after the
Closing Date consisting of Capital Leases or Indebtedness incurred to provide
all or a portion of the purchase price or cost of construction of an asset (or
assumed or acquired by the Borrower and its Subsidiaries in connection with a
Permitted Acquisition); provided that (i) such Indebtedness to the extent
resulting from Capital Leases or as a result of the purchase price or cost of
construction when incurred shall not exceed the purchase price or cost of
construction of such asset; (ii) no such Indebtedness shall be refinanced for a
principal amount in excess of the principal balance outstanding thereon at the
time of such refinancing; and (iii) the total amount of all such Indebtedness
shall not exceed $10,000,000 at any time outstanding;

(d)   Unsecured intercompany Subordinated Indebtedness (i) owing by a Credit
Party (other than, subject to clause (iv) below, the Company) to another Credit
Party; provided that any Subordinated Indebtedness issued by a Credit Party
(other than the Company) to Colgate or Victory shall be issued in accordance
with the Tax Structure Documents, (ii) among the Company and Foreign
Subsidiaries, (iii) among Foreign Subsidiaries and other Foreign Subsidiaries or
(iv) owing by the Company to Colgate or Victory to the extent that such
Subordinated Indebtedness would be permitted by Section 6.10(d), (f) or (i) if
made as a Restricted Payment rather than the issuance of Subordinated
Indebtedness;

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(e)   Indebtedness of Foreign Subsidiaries in an aggregate amount not to exceed
$10,000,000 at any time outstanding;

(f)   Indebtedness and obligations owing under Secured Hedging Agreements and
other Hedging Agreements entered into in order to manage existing or anticipated
interest rate or exchange rate risks and not for speculative purposes;

(g)   Indebtedness and obligations of the Borrower and its Subsidiaries owing
under documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of credit except
for the Letters of Credit hereunder) generally;

(h)   (i) Indebtedness of the Company or any of its Subsidiaries the proceeds of
which are used to prepay the Term Loan in accordance with Section 2.7 or used to
fund Permitted Acquisitions so long as such Indebtedness is (and all Guaranty
Obligations with respect to such Indebtedness are) unsecured and subordinated in
right and time of payment (subject to the terms of Section 6.10(h)) and priority
to the Credit Party Obligations pursuant to subordination provisions that are
reasonably satisfactory to the Administrative Agent and (ii) Indebtedness of the
Company or any of its Subsidiaries the proceeds of which are used to prepay the
Term Loan in accordance with Section 2.7 so long as such Indebtedness is (and
all Guaranty Obligations with respect to such Indebtedness are) unsecured;
provided, in each case that (A) the covenants and events of default of such
Indebtedness are, taken as a whole, materially less restrictive than those
contained in this Agreement (and shall not include any covenant or event of
default more restrictive than those contained in this Agreement), (B) both
immediately prior and after giving effect thereto, (1) no Default or Event of
Default shall exist or result therefrom and (2) the Company shall be in
compliance with the financial covenants set forth in Section 5.9, such
compliance immediately after giving effect thereto determined with regard to
calculations made on a Pro Forma Basis for the fiscal quarter most recently
ended, and the Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower to such effect, and (C) such Indebtedness
matures, and does not require any scheduled amortization or other scheduled or
mandatory payments of principal or first scheduled put right prior to, the date
which is at least 120 days after the later of the Term Loan Maturity Date and
the maturity date of any Incremental Term Facility, other than (1) redemptions
made at the option of the holders of such Indebtedness upon a change in control
of the issuer in circumstances that would also constitute a Change of Control
under this Agreement (provided that any such redemption cannot be made fewer
than thirty (30) days after such change in control and that any such redemption
is fully subordinated to the indefeasible payment in full of all Credit Party
Obligations), (2) mandatory prepayments required as a result of asset
dispositions if such Indebtedness allows the issuer to satisfy such mandatory
prepayment requirement by prepayment of Loans under this Agreement or other
senior obligations of the issuer or reinvestment of the asset disposition
proceeds within a specified period of time and (3) payments permitted by Section
6.10(h)(ii);

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(i)   Guaranty Obligations in respect of Indebtedness of the Company and its
Subsidiaries to the extent such Indebtedness is permitted to exist or be
incurred pursuant to this Section 6.1; and

(j)   other unsecured Indebtedness of the Company and its Subsidiaries which
does not exceed $10,000,000 in the aggregate at any time outstanding.

 
Section 6.2
Liens.

No Credit Party will, nor will it permit any of its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens. Notwithstanding the foregoing, if a Credit Party shall grant a Lien on
any of its assets in violation of this Section, then it shall be deemed to have
simultaneously granted an equal and ratable Lien on any such assets in favor of
the Administrative Agent for the ratable benefit of the Lenders and the Hedging
Agreement Providers, to the extent such Lien has not already been granted to the
Administrative Agent.

 
Section 6.3
Nature of Business.

Each of the Credit Parties will not, nor will any Credit Party permit any
Subsidiary to, alter the character of its business or any business activities
reasonably related thereto in any material respect from that conducted as of the
Closing Date; provided that the foregoing shall not apply to the cessation of
business activities that the applicable Credit Party or Subsidiary reasonably
believes should no longer be conducted by such Credit Party or Subsidiary.

 
Section 6.4
Consolidation, Merger, Sale or Purchase of Assets, etc.

Each of the Credit Parties will not, nor will the Credit Parties permit any
Subsidiary to,

(a)   dissolve, liquidate or wind up its affairs, sell, transfer, lease or
otherwise dispose of its property or assets or agree to do so at a future time
except the following, shall be expressly permitted:

(i)   the sale, transfer, lease or other disposition of inventory and materials
in the ordinary course of business;

(ii)   the sale, transfer or other disposition of cash and Cash Equivalents;

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(iii)   (A) the disposition of property or assets as a direct result of a
Recovery Event or (B) the sale, lease, transfer or other disposition of
machinery, parts and equipment no longer used or useful in the conduct of the
business of the Borrower or any of its Subsidiaries, so long as the Net Cash
Proceeds from such dispositions, sales, leases or transfers pursuant to clause
(A) or (B) are used to replace such machinery, parts and equipment or to
purchase or otherwise acquire new assets or property within 180 days of receipt
of the Net Cash Proceeds or, with respect to dispositions pursuant to clause
(A), such Net Cash Proceeds are used to prepay Loans and cash collateralize
outstanding LOC Obligations in accordance with the terms of Section 2.7(b)(iv);
provided that, upon the occurrence and during the continuance of a Default or an
Event of Default, the Credit Parties and their Subsidiaries shall not have the
right to reinvest such Net Cash Proceeds;

(iv)   the sale, lease or transfer of property or assets between or among (A)
the Borrower and the Subsidiary Guarantors; provided that any sale, lease or
transfer of property or assets to Swiftsure and UK Ltd shall be limited to sales
or transfers of property or assets in accordance with the Tax Structure
Documents, or (B) the Foreign Subsidiaries of the Company and other Foreign
Subsidiaries of the Company;

(v)   the termination of any Hedging Agreement permitted pursuant to Section
6.1(f);

(vi)   the factoring or disposition of receivables by SRL in connection with the
Indebtedness of SRL set forth on Schedule 6.1(b);

(vii)      the sale of any assets set forth on Schedule 6.4(a); provided that
the Net Cash Proceeds from any such sale shall be applied to the Loans and the
outstanding LOC Obligations in accordance with the terms of Section 2.7(b)(ii)
(excluding any reinvestment right contained in such Section);

(viii)     the liquidation or dissolution of (A) any Domestic Subsidiary of the
Company that has no assets or that has sold, disposed of or otherwise
transferred all of its assets to the Borrower or a Subsidiary Guarantor, (B) any
Foreign Subsidiary of the Company that has no assets or that has sold, disposed
of or otherwise transferred all of its assets to the Borrower or a Subsidiary
Guarantor or another Foreign Subsidiary or (C) Colgate, Victory, Swiftsure or UK
Ltd if it has no assets or has sold, disposed of or otherwise transferred all of
its assets to the Borrower or a Subsidiary Guarantor; provided that Victory
shall not be liquidated or dissolved unless the Administrative Agent receives a
first priority, perfected security interest in 100% of the Capital Stock of the
Borrower from the parent company of the Borrower after giving effect to such
liquidation or dissolution on terms satisfactory to the Administrative Agent;
and

(ix)   the sale, lease, transfer or other disposition of property or assets not
to exceed $3,000,000 in the aggregate in any fiscal year;

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provided, that, in the case of clauses (i), (ii), (iii), (vii) and (ix) above,
at least 75% of the consideration received therefore by the Borrower or any
other Credit Party is in the form of cash or Cash Equivalents; provided,
further, that with respect to sales, transfers, leases or other dispositions of
assets permitted hereunder only, the Administrative Agent shall without the
consent of the Required Lenders, release its Liens relating to the particular
assets sold, transferred, leased or otherwise disposed of; or

(b)   (i) purchase, lease or otherwise acquire (in a single transaction or a
series of related transactions) the property or assets of any Person (other than
purchases, leases or other acquisitions of inventory, leases, materials,
property and equipment in the ordinary course of business, except as otherwise
limited or prohibited herein) or (ii) enter into any transaction of merger or
consolidation, except for (A) consummation of the Acquisition, (B) investments
or acquisitions permitted pursuant to Section 6.5, and (C) the merger or
consolidation of (I) a Credit Party (other than the Company, Colgate or Victory)
with and into another Credit Party (other than the Company, Colgate or Victory);
provided that (y) if the Borrower is a party thereto, the Borrower will be the
surviving corporation and (z) the Administrative Agent’s Liens with respect to
the Collateral of each Credit Party involved in such merger or consolidation
shall remain continuously perfected; and (II) a Foreign Subsidiary into another
Foreign Subsidiary.

 
Section 6.5
Advances, Investments and Loans.

No Credit Party will, nor will it permit any Subsidiary to, make any Investment
except for Permitted Investments.

 
Section 6.6
Transactions with Affiliates.

Except as permitted in subsections (c), (d), (e), (f) or (k) of the definition
of Permitted Investments, no Credit Party will, nor will it permit any
Subsidiary to, enter into any transaction or series of transactions, whether or
not in the ordinary course of business, with any officer, director, shareholder
or Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm’s-length transaction with a Person other
than an officer, director, shareholder or Affiliate.

 
Section 6.7
Ownership of Subsidiaries; Restrictions.

Neither Colgate, Victory, the Borrower, nor any Subsidiary Guarantor will, nor
will it permit any Subsidiary to, create, form or acquire any Subsidiaries,
except for Domestic Subsidiaries which are Credit Parties or which are joined as
Additional Credit Parties in accordance with the terms hereof. Neither Colgate,
Victory, the Borrower, nor any Subsidiary Guarantor will sell, transfer, pledge
or otherwise dispose of any Capital Stock or other equity interests in any of
its Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.4.

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Section 6.8
Fiscal Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness Documents.

Each of the Credit Parties will not, nor will any Credit Party permit any
Subsidiary to, change its fiscal year or its accounting policies except as
required by GAAP. Except as permitted pursuant to Section 5.4, each of the
Credit Parties will not, nor will any Credit Party permit any Subsidiary to,
amend, modify or change its articles of incorporation (or corporate charter or
other similar organizational document) or bylaws (or other similar document) in
a manner adverse to the interests of the Lenders without the prior written
consent of the Required Lenders; provided that the Company shall be permitted to
amend such documents to provide for the issuance of any classes or series of
Capital Stock so long as such issuance does not result in a Change of Control
and the Capital Stock issued is not subject to mandatory sinking fund payments,
redemption or other acceleration or similar rights or payments. Each of the
Credit Parties will not, nor will any Credit Party permit any Subsidiary to,
without the prior written consent of the Administrative Agent, amend, modify,
cancel or terminate or fail to renew or extend or permit the amendment,
modification, cancellation or termination of any of the Material Contracts to
the extent any amendment, modification, cancellation, termination or failure to
renew or extend could reasonably be expected to have a Material Adverse Effect.
Each of the Credit Parties and their Subsidiaries will not, without the prior
written consent of the Required Lenders, amend, modify, waive or extend or
permit the amendment, modification, waiver or extension of any Subordinated
Indebtedness or of any documentation governing or evidencing such Subordinated
Indebtedness in a manner that is adverse to the interests of the Lenders or the
issuer of such Subordinated Indebtedness.

 
Section 6.9
Limitation on Restricted Actions.

No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extensions thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Agreement
and the other Credit Documents, (ii) applicable law, (iii) any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c) or
Guaranty Obligations with respect to any of the foregoing; provided that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, or (iv) any Permitted Lien or
any document or instrument governing any Permitted Lien; provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien.

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Section 6.10
Restricted Payments.

No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly, declare, order, make or set apart any sum for or pay any Restricted
Payment except (a) to make dividends or distributions payable solely in the same
class of Capital Stock of such Person (including, without limitation, stock
splits provided that they are in the same class of Capital Stock of such
Person), (b) to make dividends or other distributions (directly or indirectly
through Subsidiaries) payable to any Credit Party other than the Company, (c) to
make dividends or other distributions by a Foreign Subsidiary of the Company
payable (directly or indirectly through Subsidiaries) to any Credit Party or any
other Foreign Subsidiary, (d) to make dividends payable solely to allow the
Company, Colgate or Victory to pay federal and state local taxes then due and
owing, (e) so long as no Event of Default has occurred and is continuing or
would result therefrom, to make (i) payments on intercompany Subordinated
Indebtedness permitted under Sections 6.1(b) and (d), or (ii) Permitted
Investments in accordance with the Tax Structure Documents; provided that (A) no
payment shall be made pursuant to this Subsection from a Credit Party to the
Company or any Foreign Subsidiary thereof and (B) no payment shall be made to
Colgate or Victory except in accordance with the Tax Structure Documents, (f) so
long as (i) no Default or Event of Default exists or would exist on a Pro Forma
Basis after giving effect to such Restricted Payment and (ii) the Leverage Ratio
is less than 1.75 to 1.0 (A) before giving effect to any such Restricted Payment
and (B) on a Pro Forma Basis after giving effect to any such Restricted Payment
(and in the case of any Restricted Payment or series of related Restricted
Payments in an amount in excess of $5,000,000, the Borrower shall have furnished
to the Administrative Agent a compliance certificate as to such compliance,
together with supporting calculations), to make Restricted Payments in an
aggregate amount that, taken together with the aggregate of all other Restricted
Payments made by the Credit Parties and their Subsidiaries (other than
Restricted Payments permitted under other subsections of this Section 6.10) from
and after the Closing Date, does not exceed the sum of 25% of Excess Cash Flow
for the period from the Closing Date to the end of the most recently ended
fiscal year for which the Company has delivered financial statements as required
by Section 5.1(a) which then may be paid to the shareholders of the Company in
the form of a dividend or other distribution or may be used by the Company for
other corporate purposes, (g) so long as no Default or Event of Default exists
or would exist on a Pro Forma Basis after giving effect to such Restricted
Payment, to repurchase Capital Stock, warrants, options or other rights to
acquire Capital Stock of the Company from current or former officers, employees
or directors (or their heirs or estates) of a Credit Party or any Subsidiary in
connection with the death, disability or termination of employment of any such
Person in an aggregate amount not to exceed $2,500,000 in any fiscal year and
$5,000,000 during the term of this Agreement, (h) (i) to make distributions to
pay regularly scheduled interest payments on Subordinated Indebtedness issued by
a Credit Party permitted by Section 6.1(h) pursuant to the subordination
provisions applicable thereto and (ii) to the extent that Net Cash Proceeds
resulting from the issuance of Subordinated Indebtedness pursuant to Section
6.1(h) shall have been applied to repay the Term Loan as set forth in Section
2.7(b) (and not to finance Permitted Acquisitions) and so long as no Default or
Event of Default shall have occurred and be continuing, or would result
therefrom on an actual or Pro Forma Basis, if any such Subordinated Indebtedness
shall contain a provision permitting a holder thereof to convert or exchange
such Indebtedness for common equity of the Company and/or cash, to make payments
in respect thereof upon the occurrence of the event giving rise to such holders
right to conversion or exchange and (i) so long as no Default or Event of
Default exists or would exist on a Pro Forma Basis after giving effect to such
Restricted Payment, (A) the Company may make earnout payments and any other
deferred payment paid as consideration pursuant to a Permitted Acquisition by
the Company and (B) the Borrower and its Subsidiaries may make earnout payments
and any other deferred payment paid as consideration pursuant to a Permitted
Acquisition by the Borrower or any of its Subsidiaries.

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Section 6.11
Sale Leasebacks.

No Credit Party will, nor will it permit any Subsidiary to, directly or
indirectly become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real, personal or mixed), whether now owned or hereafter
acquired, which any Credit Party or any Subsidiary has sold or transferred or is
to sell or transfer to a Person which is not another Credit Party or Subsidiary
thereof.

 
Section 6.12
No Further Negative Pledges.

No Credit Party will, nor will it permit any Subsidiary to, enter into, assume
or become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation, except (a) pursuant
to this Agreement and the other Credit Documents, (b) pursuant to any document
or instrument governing Indebtedness incurred pursuant to Section 6.1(c),
provided that any such restriction contained therein relates only to the asset
or assets constructed or acquired in connection therewith and (c) in connection
with any Permitted Lien or any document or instrument governing any Permitted
Lien; provided that any such restriction contained therein relates only to the
asset or assets subject to such Permitted Lien.

 
Section 6.13
Accounts.

Set forth on Schedule 6.13 is a complete and accurate list of all checking,
savings or other accounts (including securities accounts) of the Credit Parties
at any bank or other financial institution, or any other account where money is
or may be deposited or maintained with any Person as of the Closing Date. At
anytime on or after November 22, 2006, each of the Credit Parties (other than
the Company) will not, nor will it permit any Subsidiary to, open, maintain or
otherwise have any checking, savings or other accounts (including securities
accounts) at any bank or other financial institution, or any other account where
money is or may be deposited or maintained with any Person, other than (a) the
accounts set forth on Schedule 6.13 and designated as unrestricted accounts;
provided that the balance on any such account does not exceed $500,000 and the
aggregate balance in all such accounts does not exceed $1,500,000, (b) deposit
accounts that are subject to a Deposit Account Control Agreement, (c) securities
accounts that are subject to a Securities Account Control Agreement, (d) deposit
accounts established solely as payroll and other zero balance accounts and (e)
deposit accounts, so long as at any time the balance in any such account does
not exceed $500,000 and the aggregate balance in all such accounts does not
exceed $1,500,000.

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ARTICLE VII

EVENTS OF DEFAULT

 
Section 7.1
Events of Default.

An Event of Default shall exist upon the occurrence of any of the following
specified events (each an “Event of Default”):

(a)   The Borrower shall fail to pay any principal on any Loan when due in
accordance with the terms thereof or hereof; or the Borrower shall fail to
reimburse the Issuing Lender for any outstanding LOC Obligations when due in
accordance with the terms hereof; or the Borrower shall fail to pay any interest
on any Loan or any fee or other amount payable hereunder when due in accordance
with the terms thereof or hereof and such failure shall continue unremedied for
three (3) Business Days (or any Guarantor shall fail to pay on the Guaranty in
respect of any of the foregoing or in respect of any other Guaranty Obligations
thereunder within the aforesaid period of time); or

(b)   Any representation or warranty made or deemed made herein or in any of the
other Credit Documents or which is contained in any certificate, document or
financial or other written statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect, false or
misleading in any material respect on or as of the date made or deemed made; or

(c)   (i) Any of the Credit Parties or their Subsidiaries shall fail to perform,
comply with or observe any term, covenant or agreement applicable to it
contained in Section 5.1(a), (b) and (c), Section 5.2, Section 5.4, Section
5.7(a) and (d), Section 5.9 or Article VI hereof; or (ii) any Credit Party shall
fail to comply with any other covenant, contained in this Credit Agreement or
the other Credit Documents or any other agreement, document or instrument among
any Credit Party, the Administrative Agent and the Lenders or executed by any
Credit Party in favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a), 7.1(b) or 7.1(c)(i) above), and in the event such
breach or failure to comply is capable of cure, is not cured within thirty (30)
days of its occurrence; or

(d)   Any of the Credit Parties or their Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the Notes)
in a principal amount outstanding of at least $5,000,000 in the aggregate for
the Credit Parties and their Subsidiaries beyond the period of grace (not to
exceed 30 days), if any, provided in the instrument or agreement under which
such Indebtedness was created; (ii) default in the observance or performance of
any other agreement or condition relating to any Indebtedness in a principal
amount outstanding of at least $5,000,000 in the aggregate for the Credit
Parties and their Subsidiaries or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, and, with respect to the foregoing, the effect of such default
or other event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; or (iii) default under
any Secured Hedging Agreement; or

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(e)   (i) Any of the Credit Parties or their Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, suspension of payment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator, administrator, administrative receiver, compulsory
manager or other similar official for it or for all or any substantial part of
its assets, or the Credit Parties or their Subsidiaries shall make a general
assignment or arrangement for the benefit of any of its creditors; or (ii) there
shall be commenced against any of the Credit Parties or their Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such adjudication
or appointment or (B) remains undismissed, undischarged or unbonded for, with
respect to such proceeding or other action in a jurisdiction outside the United
States, a period of thirty (30) days and, with respect to such proceeding or
other action in a United States jurisdiction, a period of sixty (60) days; or
(iii) there shall be commenced against any of the Credit Parties or their
Subsidiaries, any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within, with respect to such case, proceeding or other action in
a jurisdiction outside the United States, thirty (30) days from the entry
thereof and, with respect such case, proceeding or other action in a United
States jurisdiction, sixty (60) days from the entry thereof; or (iv) any of the
Credit Parties or their Subsidiaries shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (i), (ii), or (iii) above; or (v) any of the Credit Parties
(together with their Subsidiaries taken as a whole) shall fail to be Solvent; or

(f)   One or more judgments or decrees shall be entered against any of the
Credit Parties and shall not have been paid and satisfied, vacated, discharged,
stayed or bonded pending appeal within ten (10) days from the entry thereof to
the extent such judgments and decrees involve a liability (to the extent not
paid when due or covered by insurance in excess of $5,000,000 in the aggregate);
or

(g)   (i) Any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Single Employer
Plan, (ii) any “accumulated funding deficiency” (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Single Employer
Plan or any Lien in favor of a Single Employer Plan or in favor of the PBGC with
respect to a Single Employer Plan (other than a Permitted Lien) shall arise on
the assets of any Credit Party or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a Trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, or (v) any Credit Party or any Commonly Controlled Entity
shall incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, any Multiemployer Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or

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(h)   There shall occur a Change of Control; or

(i)   The Guaranty or any provision thereof shall cease to be in full force and
effect or any Guarantor or any Person authorized to act by or on behalf of any
Guarantor shall deny or disaffirm any Guarantor’s obligations under the
Guaranty; or

(j)   (i) Any other Credit Document or any security interest or Lien granted
thereunder shall fail to be in full force and effect, shall be declared null and
void or shall fail to give the Administrative Agent and/or the Lenders the
security interests, liens, perfection, priority, rights, powers and privileges
purported to be created thereby (except as such documents may be terminated or
no longer in force and effect in accordance with the terms thereof, other than
those indemnities and provisions which by their terms shall survive); or (ii)
any Credit Party or any Person authorized to act by or on behalf of any Credit
Party shall deny or disaffirm any Credit Party Obligations or shall deny,
disaffirm or contest the validity, perfection or priority of any security
interest or Lien granted under the Security Documents; or

(k)   Any default (which is not waived or cured within the applicable period of
grace) or event of default shall occur under any document governing or
evidencing any Subordinated Indebtedness or the subordination provisions
contained therein shall cease to be in full force and effect or to give the
Administrative Agent and the Lenders the rights, powers and privileges purported
to be created thereby; or

(l)   any Credit Party shall be temporarily or permanently excluded from, or
have payments suspended under, (i) any Medicaid Provider Agreement, Medicaid
Certification, Medicare Provider Agreement or Medicare Certification or (ii) any
Medical Reimbursement Program, where such exclusion or suspension arises from
fraud or other claims or allegations which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.

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Section 7.2
Acceleration; Remedies.

Upon the occurrence and during the continuation of an Event of Default, then,
and in any such event, (a) if such event is an Event of Default specified in
Section 7.1(e) above with respect to any Credit Party or any material Subsidiary
of the Company, automatically the Commitments shall immediately terminate and
the Loans (with accrued interest thereon), and all other amounts under the
Credit Documents (including without limitation the maximum amount of all
contingent liabilities under Letters of Credit) shall immediately become due and
payable, and (b) if such event is any other Event of Default, any or all of the
following actions may be taken: (i) with the written consent of the Required
Lenders, the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; (ii) the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the outstanding LOC Obligations for
subsequent drawings under then outstanding Letters of Credit in an amount equal
to the maximum amount of which may be drawn under Letters of Credit then
outstanding, whereupon the same shall immediately become due and payable; (iii)
exercise any rights or remedies of the Administrative Agent or the Lenders under
this Agreement or any other Credit Document, including, without limitation, any
rights or remedies with respect to the Collateral; and (iv) exercise any rights
or remedies available to the Administrative Agent or Lenders under applicable
law.
 
ARTICLE VIII

THE AGENT

 
Section 8.1
Appointment.

Each Lender hereby irrevocably designates and appoints Wachovia Bank, National
Association as the Administrative Agent of such Lender under this Agreement, and
each such Lender irrevocably authorizes Wachovia Bank, National Association, as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.

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Section 8.2
Delegation of Duties.

The Administrative Agent may execute any of its duties under this Agreement by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, but subject to the provisions of Section 8.3, the Administrative
Agent may appoint one of its affiliates as its agent to perform the functions of
the Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.

 
Section 8.3
Exculpatory Provisions.

Neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person’s own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower and its Subsidiaries.

 
Section 8.4
Reliance by Administrative Agent.

(a)   The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Credit Party), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.

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(b)   For purposes of determining compliance with the conditions specified in
Section 4.1, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender.

 
Section 8.5
Notice of Default.

The Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.

 
Section 8.6
Non-Reliance on Administrative Agent and Other Lenders.

Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent 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 appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
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
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.

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Section 8.7
Indemnification.

The Lenders agree to indemnify the Administrative Agent and the Revolving
Lenders agree to indemnify the Issuing Lender and the Swingline Lender, in each
case in its capacity hereunder and their Affiliates and their respective
officers, directors, agents and employees (to the extent not reimbursed by the
Borrower and without limiting any obligation of the Borrower to do so), ratably
according to their respective Commitment Percentages in effect on the date on
which indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against any such indemnitee in any way
relating to or arising out of any Credit Document or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by any such indemnitee under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from such indemnitee’s gross negligence or willful
misconduct, as determined by a court of competent jurisdiction. The agreements
in this Section 8.7 shall survive the termination of this Agreement and payment
of the Notes and all other amounts payable hereunder.

 
Section 8.8
Administrative Agent in Its Individual Capacity.

The Administrative Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower as though
the Administrative Agent were not the Administrative Agent hereunder. With
respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms “Lender” and “Lenders” shall include the Administrative
Agent in its individual capacity.

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Section 8.9
Successor Administrative Agent.

The Administrative Agent may resign as Administrative Agent upon thirty (30)
days’ prior written notice to the Borrower and the Lenders. If the
Administrative Agent shall resign as Administrative Agent, then the Required
Lenders shall appoint from among the Lenders (with such Lender’s consent) a
successor agent for the Lenders, which successor agent shall in the absence of a
Default or an Event of Default be approved by the Borrower (which approval shall
not be unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term “Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Notes. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation, then such resignation shall nonetheless become
effective in accordance with such notice and (a) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Credit Documents (except that in the case of any Collateral held by
the Administrative Agent on behalf of the Secured Parties, the retiring
Administrative Agent shall continue to hold such Collateral until such time as a
successor Administrative Agent is appointed) and (b) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to (i) each Lender and the
Issuing Lender directly with respect to payments and communications and (ii) the
Required Lenders with respect to any determination, until such time as the
Required Lenders appoint a successor Administrative Agent as provided for above
in this paragraph. After any retiring Administrative Agent’s resignation as
Administrative Agent, the provisions of this Section 8.9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement.

 
Section 8.10
Other Agents.

None of the Lenders or other Persons identified on the cover page or signature
pages of this Agreement as a “syndication agent,” “documentation agent,”
“co-agent,” “book manager,” “bookrunner,” “joint bookrunner,” “lead manager,”
“arranger,” “lead arranger,” “joint lead arrangers” or “co-arranger” shall have
any right (except as expressly set forth herein), power, obligation, liability,
responsibility or duty under this Agreement or under any other Credit Document
other than, in the case of such Lenders, those applicable to all Lenders as
such; provided, however, that the agents and co-lead arrangers shall be entitled
to the same rights, protections, exculpations and indemnifications granted to
the Administrative Agent under this Article VIII in their capacity as an agent
or co-lead arranger. Without limiting the foregoing, none of the Lenders or
other Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders or other Persons so identified in
deciding to enter into this Credit Agreement or in taking or not taking action
hereunder.

 
Section 8.11
Releases.

The Administrative Agent will promptly release any Guarantor and any Lien on any
Collateral, which is sold, transferred or otherwise disposed of as permitted by
the Credit Agreement or as otherwise permitted by the Lenders or Required
Lenders, as applicable.

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ARTICLE IX

MISCELLANEOUS

 
Section 9.1
Amendments, Waivers and Release of Collateral.

Neither this Agreement, nor any of the other Credit Documents, nor any terms
hereof or thereof may be amended, supplemented, waived or modified except in
accordance with the provisions of this Section. The Required Lenders may, or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Credit Parties written amendments,
supplements or modifications hereto and/or to the other Credit Documents for the
purpose of adding, deleting or modifying any provisions to this Agreement or the
other Credit Documents or changing in any manner the rights or obligations of
the Lenders or of the Credit Parties hereunder or thereunder or (b) waive, on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver, supplement,
modification or release shall:

(i)   reduce the amount or extend the scheduled date of maturity of any Loan,
Note or LOC Obligation or any installment thereon, or reduce the stated rate of
any interest or fee payable hereunder (except in connection with a waiver of
interest at the increased post-default rate set forth in Section 2.9 which shall
be determined by a vote of the Required Lenders) or extend the scheduled date of
any payment thereof or increase the amount or extend the expiration date of any
Lender’s Commitment, in each case without the written consent of each Lender
directly affected thereby; provided that, it is understood and agreed that (A)
no waiver, reduction or deferral of a mandatory prepayment required pursuant to
Section 2.7(b), nor any amendment of Section 2.7(b) or the definitions of Asset
Disposition, Debt Issuance, Equity Issuance, Excess Cash Flow or Recovery
Event, shall constitute a reduction of the amount of, or an extension of the
scheduled date of maturity of, or any installment of, any Loan, Note or LOC
Obligation, (B) any reduction in the stated rate of interest on Revolving Loans
shall only require the written consent of each Lender holding a Revolving
Commitment and (C) any reduction in the stated rate of interest on the Term Loan
shall only require the written consent of each Lender holding a portion of the
outstanding Term Loan; or

(ii)   amend, modify or waive any provision of this Section or reduce the
percentage specified in the definition of Required Lenders, without the written
consent of all the Lenders; or

(iii)   amend, modify or waive any provision of Article VIII without the written
consent of the then Administrative Agent; or

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(iv)   release the Borrower or all or substantially all of the Guarantors from
obligations under the Guaranty, without the written consent of all of the
Lenders and the Hedging Agreement Providers; or

(v)   release all or substantially all of the Collateral without the written
consent of all of the Lenders and Hedging Agreement Providers; or

(vi)   subordinate any Credit Party Obligations to any other Indebtedness or the
Liens securing the Credit Party Obligations to any other Indebtedness without
the written consent of all of the Lenders; or

(vii)     permit a Letter of Credit to have an original expiry date more than
twelve (12) months from the date of issuance without the consent of each of the
Revolving Lenders; provided, that the expiry date of any Letter of Credit may be
extended in accordance with the terms of Section 2.3(a); or

(viii)     permit any Credit Party to assign or transfer any of its rights or
obligations under this Agreement or other Credit Documents without the written
consent of all of the Lenders; or

(ix)   amend or modify the definition of Credit Party Obligations to delete or
exclude any obligation or liability described therein without the written
consent of each Lender and each Hedging Agreement Provider directly affected
thereby; or

(x)   amend, modify or waive any provision of the Credit Documents requiring
consent, approval or request of the Required Lenders or all Lenders without the
written consent of the Required Lenders or all the Lenders as appropriate; or

(xi)   without the consent of Revolving Lenders holding in the aggregate more
than 50% of the outstanding Revolving Commitments (or if the Revolving
Commitments have been terminated, the aggregate principal amount of outstanding
Revolving Loans), amend, modify or waive any provision in Section 4.2 or waive
any Default or Event of Default (or amend any Credit Document to effectively
waive any Default or Event of Default) if the effect of such amendment,
modification or waiver is that the Revolving Lenders shall be required to fund
Revolving Loans when such Lenders would otherwise not be required to do so; or

(xii)      amend, modify or waive the order in which Credit Party Obligations
are paid or in a manner that would alter the pro rata sharing of payments by and
among the Lenders, including, without limitation, as provided in Section 2.12,
without the written consent of each Lender and each Hedging Agreement Provider
directly affected thereby; or

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(xiii)    amend the definitions of “Hedging Agreement,” “Secured Hedging
Agreement,” or “Hedging Agreement Provider” without the consent of any Hedging
Agreement Provider that would be adversely affected thereby.

provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender
under any Credit Document shall in any event be effective, unless in writing and
signed by the Administrative Agent, the Issuing Lender and/or the Swingline
Lender, as applicable, in addition to the Lenders required hereinabove to take
such action.

Any such waiver, any such amendment, supplement or modification and any such
release shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Administrative Agent and
all future holders of the Notes. In the case of any waiver, the Borrower, the
other Credit Parties, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the outstanding Loans
and Notes and other Credit Documents, and any Default or Event of Default
permanently waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.

Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); provided,
however, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver.

Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.

 
Section 9.2
Notices.

Except as otherwise provided in Article II, all notices, requests and demands to
or upon the respective parties hereto to be effective shall be in writing
(including by telecopy or other electronic communication with confirmed receipt
from the recipient), and, unless otherwise expressly provided herein, shall be
deemed to have been duly given or made (a) when delivered by hand, (b) when
transmitted via telecopy (or other electronic communication device with
confirmed receipt from the recipient) to the number set out herein, (c) the day
following the day on which the same has been delivered prepaid (or pursuant to
an invoice arrangement) to a reputable national overnight air courier service,
or (d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower, the other Credit Parties and the
Administrative Agent, and, in the case of each of the Lenders, as set forth in
such Lender’s Administrative Details Form, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:

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The Borrower
Orthofix Holdings, Inc.

 
and the other
The Storrs Building, Suite 250

 
Credit Parties:
10115 Kincey Avenue

Huntersville Business Park
Huntersville, North Carolina 28078
Attention:  Thomas Hein
Telecopier:  704 948 2691
Telephone:  704 948 2635

 
The Administrative
Wachovia Bank, National Association, as Administrative Agent

 
Agent:
Charlotte Plaza

201 South College Street
NC0680/CP8
Charlotte, North Carolina 28288-0680
Attention:  Syndication Agency Services
Telecopier:  (704) 715-1125
Telephone:  (704) 383-0288

with a copy to:

Wachovia Bank, National Association
One Wachovia Center
301 South College Street, TW 15
NC5562
Charlotte, North Carolina 28288-0737
Attention:  Scott Santa Cruz
Telecopier:  (704) 383-7611
Telephone:  (704) 383-1988

 
Section 9.3
No Waiver; Cumulative Remedies.

No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 
Section 9.4
Survival of Representations and Warranties.

All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated, no Credit
Document remains in effect and all Credit Party Obligations have been paid in
full.

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Section 9.5
Payment of Expenses and Taxes.

The Borrower agrees (a) to pay or reimburse the Administrative Agent and the
Arranger for all their reasonable out-of-pocket costs and expenses incurred in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith (including, without limitation, all CUSIP fees for
registration with S&P’s CUSIP Service Bureau, together with the reasonable fees
and disbursements of counsel to the Administrative Agent and the Arranger,
(b) to pay or reimburse the Administrative Agent and, if an Event of Default
shall have occurred and is continuing, each Lender for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and the other Credit Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, and if applicable, and to the Lenders (including
reasonable allocated costs of in-house legal counsel), (c) on demand, to pay,
indemnify, and hold each Lender, the Administrative Agent and the Arranger
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents; except for any and all stamp, excise and
other similar taxes payable in connection with any transfer under Section 9.6 of
this Agreement, (d) to pay, indemnify, and hold each Lender, the Administrative
Agent, the Arranger and their Affiliates and their respective officers,
directors, employees, partners, members, counsel, agents, representatives,
advisors and affiliates (collectively called the “Indemnitees”) harmless from
and against, any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of the Credit Documents and any such other
documents and the use, or proposed use, of proceeds of the Loans and (e) to pay
any civil penalty or fine assessed by the U.S. Department of the Treasury’s
Office of Foreign Assets Control against, and all reasonable costs and expenses
(including counsel fees and disbursements) incurred in connection with defense
thereof by the Administrative Agent or any Lender as a result of the funding of
Loans, the issuance of Letters of Credit, the acceptance of payments or of
Collateral due under the Credit Documents (all of the foregoing, collectively,
the “Indemnified Liabilities”); provided, however, that the Borrower shall not
have any obligation hereunder to an Indemnitee with respect to Indemnified
Liabilities arising from the gross negligence or willful misconduct of such
Indemnitee, as determined by a court of competent jurisdiction pursuant to a
final non-appealable judgment. The agreements in this Section shall survive
repayment of the Loans, Notes and all other amounts hereunder.

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Section 9.6
Successors and Assigns; Participations; Purchasing Lenders.

(a)   This Agreement shall be binding upon and inure to the benefit of the
Credit Parties, the Lenders, the Administrative Agent, all future holders of the
Notes and their respective successors and assigns, except that the Credit
Parties may not assign or transfer any of their rights or obligations under this
Agreement or the other Credit Documents without the prior written consent of
each Lender.

(b)   Any Lender may, in the ordinary course of its business and in accordance
with applicable law, at any time sell to one or more banks or other entities
(“Participants”) participating interests in any Loan owing to such Lender, any
Note held by such Lender, any Commitment of such Lender, or any other interest
of such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement,
and the Borrower and the Administrative Agent shall continue to deal solely and
directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve any
amendment to, or supplement, modification or waiver of, this Agreement or any
other Credit Document except to the extent such amendment, supplement,
modification or waiver would (i) extend the scheduled maturity of any Loan or
Note or any installment thereon in which such Participant is participating, or
reduce the stated rate or extend the time of payment of interest or fees thereon
(except in connection with a waiver of interest at the increased post-default
rate set forth in Section 2.9 which shall be determined by a vote of the
Required Lenders) or reduce the principal amount thereof, or increase the amount
of the Participant’s participation over the amount thereof then in effect;
provided that, it is understood and agreed that (A) any waiver, reduction or
deferral of a mandatory prepayment required pursuant to Section 2.7(b) and any
amendment of Section 2.7(b) or the definitions of Asset Disposition, Debt
Issuance, Equity Issuance, or Recovery Event, (B) any waiver of any Default or
Event of Default and (C) any increase in any Commitment or Loan shall be
permitted without consent of any participant if the Participant’s participation
is not increased as a result thereof, (ii) release all or substantially all of
the Guarantors from their obligations under the Guaranty, (iii) release all or
substantially all of the Collateral, or (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement. In the case of any such participation, the Participant shall not have
any rights under this Agreement or any of the other Credit Documents (the
Participant’s rights against such Lender in respect of such participation to be
those set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Lender had not sold such participation; provided
that each Participant shall be entitled to the benefits of Sections 2.14, 2.15,
2.16, 2.17 and 9.5 with respect to its participation in the Commitments and the
Loans outstanding from time to time; provided further, that no Participant shall
be entitled to receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.

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(c)   Any Lender may, in accordance with applicable law, at any time, sell or
assign to any Lender or any Affiliate or Approved Fund thereof and to one or
more additional banks, insurance companies, financial institutions, investment
funds or other entities (“Purchasing Lenders”), all or any part of its rights
and obligations under this Agreement and the Notes in minimum amounts of
(i) $1,000,000 (or such lesser amount approved by the Administrative Agent and,
so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower) with respect to its Revolving Commitment and its Revolving Loans
(or, if less, the entire amount of such Lender’s Revolving Commitment and
Revolving Loans) and (ii) $1,000,000 (or such lesser amount approved by the
Administrative Agent and so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower) with respect to its Term Loans (or, if
less, the entire amount of such Lender’s Term Loans), pursuant to an Assignment
Agreement, executed by such Purchasing Lender and such transferor Lender,
consented to (such consent not to be unreasonably withheld or delayed) by the
Administrative Agent, the Issuing Lender and the Borrower (to the extent
required), and delivered to the Administrative Agent for its acceptance and
recording in the Register; provided, however, that (A) any sale or assignment to
an existing Lender, or Affiliate or Approved Fund thereof, shall not require the
consent of the Borrower, the Issuing Lender or the Administrative Agent (but
shall be accepted and acknowledged by the Administrative Agent for the sole
purpose of recording same in the Register) nor shall any such sale or assignment
be subject to the minimum assignment amounts specified herein, (B) so long as no
Default or Event of Default shall have occurred and be continuing, except as
provided in the foregoing clause (A), any sale or assignment of a portion of the
Revolving Loans and a Revolving Loan Commitment shall require the consent of the
Borrower (such consent not to be unreasonably withheld), (C) except as provided
in the foregoing clause (ii), any sale or assignment of a portion of the Term
Loan and a Term Loan Commitment shall not require the consent of the Borrower
and (D) contemporaneous sales and/or assignments to a Purchasing Lender and its
Affiliates and Approved Funds shall be treated as one assignment for purposes of
determining compliance with the minimum assignment amounts specified herein.
Upon such execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Assignment Agreement, (1) the
Purchasing Lender thereunder shall be a party hereto and, to the extent provided
in such Assignment Agreement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (2) the transferor Lender
thereunder shall, to the extent provided in such Assignment Agreement, be
released from its obligations under this Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of a transferor
Lender’s rights and obligations under this Agreement, such transferor Lender
shall cease to be a party hereto; provided, however, that such Lender shall
continue to be entitled to any indemnification rights that expressly survive
hereunder). Such Assignment Agreement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages arising
from the purchase by such Purchasing Lender of all or a portion of the rights
and obligations of such transferor Lender under this Agreement and the Notes. On
or prior to the Transfer Effective Date specified in such Assignment Agreement,
the Borrower, at its own expense, shall execute and deliver to the
Administrative Agent in exchange for the Notes delivered to the Administrative
Agent pursuant to such Assignment Agreement new Notes to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by it pursuant to
such Assignment Agreement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender in an
amount equal to the Commitment retained by it hereunder. Such new Notes shall be
in the form of the Notes replaced thereby. Notwithstanding anything to the
contrary contained in this Section, a Lender may assign any or all of its rights
under this Agreement to an Affiliate or a Approved Fund of such Lender without
delivering an Assignment Agreement to the Administrative Agent; provided,
however, that (x) the Credit Parties and the Administrative Agent may continue
to deal solely and directly with such assigning Lender until an Assignment
Agreement has been delivered to the Administrative Agent for recordation on the
Register, (y) the failure of such assigning Lender to deliver an Assignment
Agreement to the Administrative Agent shall not affect the legality, validity or
binding effect of such assignment and (z) an Assignment Agreement between the
assigning Lender and an Affiliate or Approved Fund of such Lender shall be
effective as of the date specified in such Assignment Agreement.

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(d)   The Administrative Agent shall maintain at its address referred to in
Section 9.2 a copy of each Assignment Agreement delivered to it and a register
(the “Register”) for the recordation of the names and addresses of the Lenders
and the Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. Subject to the requirements of Section 9.6(c), a Loan (and
the related Note) recorded on the Register may be assigned or sold in whole or
in part upon registration of such assignment or sale on the Register. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each Person
whose name is recorded in the Register as the owner of the Loan recorded therein
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice. In the case of an assignment pursuant to the
last sentence of Section 9.6(c) as to which an Assignment Agreement is not
delivered to the Administrative Agent, the assigning Lender shall, acting solely
for this purpose as a non-fiduciary agent of the Credit Parties, maintain a
comparable register on behalf of the Credit Parties. In the event that any
Lender sells participations in a Loan recorded on the Register, such Lender
shall maintain a register on which it enters the name of all participants in
such Loans held by it (the “Participant Register”). A Loan recorded on the
Register (and the registered Note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each registered Note shall expressly so provide).
Any participation of such Loan recorded on the Register (and the registered
Note, if any, evidencing the same) may be effected only by the registration of
such participation on the Participant Register.

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(e)   Upon its receipt of a duly executed Assignment Agreement, together with
payment to the Administrative Agent by the transferor Lender or the Purchasing
Lender, as agreed between them, of a registration and processing fee of $3,500
for each Purchasing Lender (other than a Purchasing Lender that is an Affiliate
or Approved Fund of the transferor Lender) listed in such Assignment Agreement
and the Notes subject to such Assignment Agreement, the Administrative Agent
shall (i) accept such Assignment Agreement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of such
acceptance and recordation to the Lenders and the Borrower.

(f)   The Borrower authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a “Transferee”) and any prospective Transferee any and
all financial information in such Lender’s possession concerning the Borrower
and its Subsidiaries which has been delivered to such Lender by or on behalf of
the Borrower pursuant to this Agreement or which has been delivered to such
Lender by or on behalf of the Borrower in connection with such Lender’s credit
evaluation of the Borrower and its Affiliates prior to becoming a party to this
Agreement, in each case subject to Section 9.15.

(g)   At the time of each assignment pursuant to this Section to a Person which
is not already a Lender hereunder and which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms described in
Section 2.18.

(h)   Nothing herein shall prohibit any Lender from pledging or assigning any of
its rights under this Agreement (including, without limitation, any right to
payment of principal and interest under any Note) to secure obligations of such
Lender, including without limitation, (i) any pledge or assignment to secure
obligations to a Federal Reserve Bank and (ii) in the case of any Lender that is
a fund or trust or entity that invests in commercial bank loans in the ordinary
course of business, any pledge or assignment to any holders of obligations owed,
or securities issued, by such Lender including to any trustee for, or any other
representative of, such holders; it being understood that the requirements for
assignments set forth in this Section shall not apply to any such pledge or
assignment of a security interest, except with respect to any foreclosure or
similar action taken by such pledgee or assignee with respect to such pledge or
assignment; 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 and no such pledgee
or assignee shall have any voting rights under this Agreement unless and until
the requirements for assignments set forth in this Section are complied with in
connection with any foreclosure or similar action taken by such pledgee or
assignee.

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Section 9.7
Adjustments; Set-off.

(a)   Each Lender agrees that if any Lender (a “benefited Lender”) shall at any
time receive any payment of all or part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 7.1(e), or otherwise) in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of such other
Lender’s Loans, or interest thereon, such benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender’s Loan, or shall provide such other Lenders with the benefits
of any such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such collateral
or proceeds ratably with each of the Lenders; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender’s
Loans may exercise all rights of payment (including, without limitation, rights
of set-off) with respect to such portion as fully as if such Lender were the
direct holder of such portion.

(b)   In addition to any rights and remedies of the Lenders provided by law
(including, without limitation, other rights of set-off), each Lender (and its
Affiliates) shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, in the event that all amounts under the Credit Agreement shall
have become immediately due and payable pursuant to Section 7.2, to setoff and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held by or owing to such Lender
(and its Affiliates) or any branch or agency thereof to or for the credit or the
account of the Borrower or any other Credit Party, or any part thereof in such
amounts as such Lender (and its Affiliates) may elect, against and on account of
the Loans and other Credit Party Obligations of the Borrower and the other
Credit Parties and claims of every nature and description of such Lender against
the Borrower and the other Credit Parties, in any currency, whether arising
hereunder, under any other Credit Document or any Secured Hedging Agreement
provided pursuant to the terms of this Agreement, as such Lender may elect,
whether or not such Lender or any other Lender has made any demand for payment
and although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such Lender (and
its Affiliates) against the Borrower, any other Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of the
Borrower or any other Credit Party, or against anyone else claiming through or
against the Borrower, any other Credit Party or any such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of set-off shall not have been exercised by such Lender (or its
Affiliates) prior to the occurrence of any Event of Default. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender (and its Affiliates); provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.

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Section 9.8
Table of Contents and Section Headings.

The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.

 
Section 9.9
Counterparts.

This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts, and all of said counterparts taken
together shall be deemed to constitute one and the same agreement. Delivery of
an executed counterpart of a signature page of this Agreement by telecopy or
email shall be effective as delivery of a manually executed counterpart of this
Agreement and shall constitute a representation that an original executed
counterpart will follow.

 
Section 9.10
Effectiveness.

This Credit Agreement shall become effective on the date on which all of the
parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to Section
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or other electronic notice with confirmed receipt from the
recipient at such office that the same has been signed and mailed to it.

 
Section 9.11
Severability.

Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

 
Section 9.12
Integration.

This Agreement and the other Credit Documents represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent, the Borrower or any Lender relative to
the subject matter hereof not expressly set forth or referred to herein or in
the other Credit Documents or Fee Letters.

 
Section 9.13
Governing Law.

This Agreement and the other Credit Documents (other than the UK Security
Documents) and the rights and obligations of the parties under this Agreement
and the other Credit Documents (other than the UK Security Documents) shall be
governed by, and construed and interpreted in accordance with, the law of the
State of New York.

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Section 9.14
Consent to Jurisdiction and Service of Process.

All judicial proceedings brought against any party hereto with respect to this
Agreement, any Note or any of the other Credit Documents may be brought in any
state or federal court of competent jurisdiction in the State of New York, and,
by execution and delivery of this Agreement, each of such parties accepts, for
itself and in connection with its properties, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this Agreement,
any Note or any other Credit Document from which no appeal has been taken or is
available. The parties hereto irrevocably agree that all service of process in
any such proceedings in any such court may be effected by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent or the Borrower shall have been
notified pursuant thereto, such service being hereby acknowledged by the parties
hereto to be effective and binding service in every respect. Each of the parties
hereto irrevocably waives any objection, including, without limitation, any
objection to the laying of venue based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any party to bring proceedings against any other party in the court of any other
jurisdiction.

 
Section 9.15
Confidentiality.

Each of the Administrative Agent, the Lenders and the Issuing Bank agrees to
maintain the confidentiality of the Information (as defined below), except that
Information may be disclosed (a) to its Affiliates and to its and its
Affiliates’ respective partners, directors, officers, employees, agents,
advisors and other representatives (it being understood and agreed that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Credit Document or any
action or proceeding relating to this Agreement or any other Credit Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement, (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (iii) to an investor or
prospective investor in an Approved Fund that also agrees that Information shall
be used solely for the purpose of evaluating an investment in such Approved
Fund, (iv) to a trustee, collateral manager, servicer, backup servicer,
noteholder or secured party in an Approved Fund in connection with the
administration, servicing and reporting on the assets serving as collateral for
an Approved Fund, or (v) to a nationally recognized rating agency that requires
access to information regarding the Credit Parties, the Loans and Credit
Documents in connection with ratings issued with respect to an Approved Fund,
(g) with the consent of the Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section or
(ii) becomes available to the Administrative Agent, any Lender, the Issuing Bank
or any of their respective Affiliates on a nonconfidential basis from a source
other than a Credit Party.

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For purposes of this Section, “Information” means all information received from
any Credit Party or any of its Subsidiaries relating to any Credit Party or any
of its Subsidiaries or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the
Issuing Lender on a nonconfidential basis prior to disclosure by any Credit
Party or any of its Subsidiaries. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 
Section 9.16
Acknowledgments.

The Borrower and the other Credit Parties each hereby acknowledges that:

(a)   it has been advised by counsel in the negotiation, execution and delivery
of each Credit Document;

(b)   neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or any other Credit Party arising out
of or in connection with this Agreement and the relationship between
Administrative Agent and Lenders, on one hand, and the Borrower and the other
Credit Parties, on the other hand, in connection herewith is solely that of
creditor and debtor; and

(c)   no joint venture exists among the Lenders or among the Borrower or the
other Credit Parties and the Lenders.

 
Section 9.17
Waivers of Jury Trial.

THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN. Each of
the Borrower, the other Credit Parties, the Administrative Agent and the Lenders
agree not to assert any claim against any other party to this Agreement or any
their respective directors, officers, employees, attorneys, Affiliates or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein.

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Section 9.18
Patriot Act Notice. 

Each Lender and the Administrative Agent (for itself and not on behalf of any
other party) hereby notifies the Borrower that, pursuant to the requirements of
the USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26,
2001 (the “Patriot Act”), it is required to obtain, verify and record
information that identifies the Borrower and the other Credit Parties, which
information includes the name and address of the Borrower and the other Credit
Parties and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify the Borrower and the other Credit Parties in
accordance with the Patriot Act.

 
Section 9.19
Resolution of Drafting Ambiguities.

Each Credit Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of this Agreement and the other
Credit Documents to which it is a party, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and thereof and that any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation hereof or
thereof.

 
Section 9.20
Judgment Currency; Payments in Dollars.

If, for the purposes of obtaining judgment in any court, it is necessary to
convert a sum due hereunder or under any other Credit Document in one currency
into another currency, the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase the first currency with such other currency on the Business Day
preceding that on which final judgment is given. The obligation of each of the
Credit Parties in respect of any such sum due from it to the Administrative
Agent or any Lender hereunder or under the other Credit Documents shall,
notwithstanding any judgment in a currency (the “Judgment Currency”) other than
Dollars, be discharged only to the extent that on the Business Day following
receipt by the Administrative Agent or such Lender of any sum adjudged to be so
due in the Judgment Currency, the Administrative Agent or such Lender may in
accordance with normal banking procedures purchase Dollars with the Judgment
Currency. If the amount of Dollars so purchased is less than the sum originally
due to the Administrative Agent or such Lender in Dollars, the Borrower agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Administrative Agent or such Lender or the Person to whom such obligation was
owing against such loss. If the amount of Dollars so purchased is greater than
the sum originally due to the Administrative Agent or such Lender in such
currency, the Administrative Agent and the Lenders agree to apply such excess to
any Credit Party Obligations then due and payable in accordance with the terms
of Section 2.12. Notwithstanding anything to the contrary in any Credit
Documents, all payments made by the Credit Parties under the Credit Documents
shall be made in Dollars.

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Section 9.21
Arbitration. 

(a)   Notwithstanding the provisions of Section 9.14 to the contrary, upon
demand of any party hereto, whether made before or within three (3) months after
institution of any judicial proceeding, any dispute, claim or controversy
arising out of, connected with or relating to this Agreement and other Credit
Documents (“Disputes”) between or among parties to this Agreement shall be
resolved by binding arbitration as provided herein. Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, claims arising from Credit Documents executed in the
future, or claims arising out of or connected with the transaction reflected by
this Agreement.

Arbitration shall be conducted under and governed by the Commercial Arbitration
Rules (the “Arbitration Rules”) of the American Arbitration Association (the
“AAA”) and Title 9 of the U.S. Code. All arbitration hearings shall be conducted
in Charlotte, North Carolina. A hearing shall begin within ninety (90) days of
demand for arbitration and all hearings shall be concluded within 120 days of
demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then no more than a total extension of sixty
(60) days. The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. Arbitrators shall be
licensed attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties hereto do not waive applicable Federal or state
substantive law except as provided herein.

(b)   Notwithstanding the preceding binding arbitration provisions, the
Administrative Agent, the Lenders, the Borrowers and the other Credit Parties
agree to preserve, without diminution, certain remedies, as set forth below,
that the Administrative Agent on behalf of the Lenders may employ or exercise
freely, independently or in connection with an arbitration proceeding or after
an arbitration action is brought. The Administrative Agent on behalf of the
Lenders shall have the right to proceed in any court of proper jurisdiction or
by self-help to exercise or prosecute the following remedies, as and if
applicable (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted under Credit Documents or
under applicable law or by judicial foreclosure and sale, including a proceeding
to confirm the sale; (ii) all rights of self-help including peaceful occupation
of real property and collection of rents, set-off, and peaceful possession of
personal property and giving notices to and collecting obligations from account
debtors; (iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute.

(c)   The parties hereto agree that they shall not have a remedy of punitive or
exemplary damages against the other in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.

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(d)   By execution and delivery of this Agreement, each of the parties hereto
accepts, for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction relating to any arbitration
proceedings conducted under the Arbitration Rules in Charlotte, North Carolina
and irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement from which no appeal has been taken or is
available.
 
ARTICLE X

GUARANTY

 
Section 10.1
The Guaranty.

In order to induce the Lenders to enter into this Credit Agreement and any
Hedging Agreement Provider to enter into any Secured Hedging Agreement and to
extend credit hereunder and thereunder and in recognition of the direct benefits
to be received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the
Borrower owed to the Administrative Agent, the Lenders and the Hedging Agreement
Providers. If any or all of the indebtedness becomes due and payable hereunder
or under any Secured Hedging Agreement, each Guarantor unconditionally promises
to pay such indebtedness to the Administrative Agent, the Lenders, the Hedging
Agreement Providers, or their respective order, or demand, together with any and
all reasonable expenses which may be incurred by the Administrative Agent, the
Lenders or the Hedging Agreement Providers in collecting any of the Credit Party
Obligations. The word “indebtedness” is used in this Article X in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of the Borrower and the Guarantors, including specifically all
Credit Party Obligations, arising in connection with this Credit Agreement, the
other Credit Documents or any Secured Hedging Agreement, in each case,
heretofore, now, or hereafter made, incurred or created, whether voluntarily or
involuntarily, absolute or contingent, liquidated or unliquidated, determined or
undetermined, whether or not such indebtedness is from time to time reduced, or
extinguished and thereafter increased or incurred, whether the Borrower and the
Guarantors may be liable individually or jointly with others, whether or not
recovery upon such indebtedness may be or hereafter become barred by any statute
of limitations, and whether or not such indebtedness may be or hereafter become
otherwise unenforceable. Notwithstanding anything herein or in any other Credit
Document to the contrary, the Guaranty provided hereunder is a guaranty of
payment and not of collection.

Notwithstanding any provision to the contrary contained herein or in any other
of the Credit Documents, to the extent the obligations of a Guarantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable law relating to fraudulent conveyances or
transfers) then the obligations of each such Guarantor hereunder shall be
limited to the maximum amount that is permissible under applicable law
(including, without limitation, the Bankruptcy Code or its non-U.S. equivalent).

124

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Section 10.2
Bankruptcy.

Additionally, each of the Guarantors unconditionally and irrevocably guarantees
jointly and severally the payment of any and all Credit Party Obligations of the
Borrower to the Lenders and any Hedging Agreement Provider whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 7.1(e) as applicable to the Company, Colgate, Victory, the Borrower or
any material Subsidiaries of the Borrower, and unconditionally promises to pay
such Credit Party Obligations to the Administrative Agent for the account of the
Lenders and to any such Hedging Agreement Provider, or order, on demand, in
lawful money of the United States. Each of the Borrower and the Guarantors
further agrees that to the extent that the Borrower or a Guarantor shall make a
payment or a transfer of an interest in any property to the Administrative
Agent, any Lender or any Hedging Agreement Provider, which payment or transfer
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, or otherwise is avoided, and/or required to be repaid to the
Borrower or a Guarantor, the estate of the Borrower or a Guarantor, a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or other applicable law or equitable cause, then to the extent of
such avoidance or repayment, the obligation or part thereof intended to be
satisfied shall be revived and continued in full force and effect as if said
payment had not been made.

 
Section 10.3
Nature of Liability.

The liability of each Guarantor hereunder is exclusive and independent of any
security for or other guaranty of the Credit Party Obligations of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor’s liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Credit Party
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the
Credit Party Obligations that the Administrative Agent, such Lenders or such
Hedging Agreement Provider repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each of the Guarantors waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.

 
Section 10.4
Independent Obligation.

The obligations of each Guarantor hereunder are independent of the obligations
of any other guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other guarantor or the Borrower and whether or not any other
Guarantor or the Borrower is joined in any such action or actions.

125

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

 
Section 10.5
Authorization.

Each of the Guarantors authorizes the Administrative Agent, each Lender and each
Hedging Agreement Provider without notice or demand (except as shall be required
by applicable law and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Credit Party Obligations or any part thereof in
accordance with this Agreement and any Secured Hedging Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the Credit Party Obligations and exchange, enforce, waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their
discretion may determine in accordance with the terms of this Agreement and the
other Credit Documents and (d) release or substitute any one or more endorsers,
Guarantors, the Borrower or other obligors.

 
Section 10.6
Reliance.

It is not necessary for the Administrative Agent, the Lenders or any Hedging
Agreement Providers to inquire into the capacity or powers of the Borrower or
the officers, directors, members, partners or agents acting or purporting to act
on its behalf, and any indebtedness made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.

 
Section 10.7
Waiver.

(a)   Each of the Guarantors waives any right (except as shall be required by
applicable law and cannot be waived) to require the Administrative Agent, any
Lender or any Hedging Agreement Provider to (i) proceed against the Borrower,
any other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower, any other guarantor or any other party, or
(iii) pursue any other remedy in the Administrative Agent’s, any Lender’s or any
Hedging Agreement Provider’s power whatsoever. Each of the Guarantors waives any
defense based on or arising out of any defense of the Borrower, any other
guarantor or any other party other than payment in full of the Credit Party
Obligations, including without limitation any defense based on or arising out of
(A) the disability of the Borrower, any other guarantor or any other party, (B)
the unenforceability or invalidity of the Credit Party Obligations or any part
thereof from any cause, (C) the failure to properly perfect any Lien on the
Collateral, (D) the amendment, modification or waiver of any Credit Document
without the consent of such Guarantor, (E) any law or regulation of any
jurisdiction or any other event affecting any term of the Guaranty or the other
Credit Party Obligations, or (F) the cessation from any cause of the liability
of the Borrower other than payment in full of the Credit Party Obligations. The
Administrative Agent or any of the Lenders may, at their election, foreclose on
any security held by the Administrative Agent or a Lender by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Administrative Agent and any
Lender may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Credit Party Obligations have been paid in
full. Each of the Guarantors, to the extent permitted by law, waives any defense
arising out of any such election by the Administrative Agent and each of the
Lenders, even though such election operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of the Guarantors against
the Borrower or any other party or any security.

126

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

(b)   Each of the Guarantors waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional Credit
Party Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Credit Party
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that neither the Administrative Agent
nor any Lender shall have any duty to advise such Guarantor of information known
to it regarding such circumstances or risks.

(c)   Each of the Guarantors hereby agrees it will not exercise any rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the U.S. Bankruptcy Code, or
otherwise) to the claims of the Lenders or the Hedging Agreement Provider
against the Borrower or any other guarantor of the Credit Party Obligations of
the Borrower owing to the Lenders or such Hedging Agreement Provider
(collectively, the “Other Parties”) or any contractual, statutory or common law
rights of reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such time as
the Credit Party Obligations shall have been paid in full, no Credit Document or
Secured Hedging Agreement remains in effect and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to exercise any
right to enforce any other remedy which the Administrative Agent, the Lenders or
any Hedging Agreement Provider now has or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the Credit
Party Obligations of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of the
Lenders and/or the Hedging Agreement Providers to secure payment of the Credit
Party Obligations of the Borrower until such time as the Credit Party
Obligations shall have been paid in full, no Credit Document or Secured Hedging
Agreement remains in effect and the Commitments have been terminated.

127

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

 
Section 10.8
Limitation on Enforcement.

The Lenders and the Hedging Agreement Providers agree that this Guaranty may be
enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or any such Hedging Agreement Provider
(only with respect to obligations under the applicable Secured Hedging
Agreement) and that no Lender or Hedging Agreement Provider shall have any right
individually to seek to enforce or to enforce this Guaranty, it being understood
and agreed that such rights and remedies may be exercised by the Administrative
Agent for the benefit of the Lenders under the terms of this Credit Agreement
and for the benefit of any Hedging Agreement Provider under any Secured Hedging
Agreement. The Lenders and the Hedging Agreement Providers further agree that
this Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.

 
Section 10.9
Confirmation of Payment.

The Administrative Agent and the Lenders will, upon request after payment of the
Credit Party Obligations under the Credit Documents which are the subject of
this Guaranty and termination of the Commitments relating thereto, confirm to
the Borrower, the Guarantors or any other Person that the Credit Party
Obligations under the Credit Documents have been paid in full and the
Commitments relating thereto terminated, and this Guaranty released, subject to
the provisions of Section 10.2.

128

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the day
and year first above written.

BORROWER:
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
                   
By: 
/s/ Thomas Hein    
Name:   
Thomas Hein    
Title:
Vice President and Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 
GUARANTORS:
ORTHOFIX INTERNATIONAL N.V.,
   
a Netherlands Antilles corporation
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Cheif Financial Officer                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
COLGATE MEDICAL LIMITED,
   
a company formed under the laws of England and Wales
                   
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Director                    
[Signature Pages Continue]
 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
VICTORY MEDICAL LIMITED,
   
a company formed under the laws of England and Wales
                   
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Director                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
ORTHOFIX INC.,
   
a Minnesota corporation
           
By: 
/s/ Thomas Hein    
Name:   
Thomas Hein    
Title:
Chief Financial Officer, Vice President and Treasurer                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
BREG INC.,
   
a California corporation
           
By: 
/s/ Thomas Hein       
Name:  
Thomas Hein    
Title:
Assistant Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
ORTHOFIX US LLC,
   
a Delaware limited liability company
           
By:
ORTHOFIX UK LTD,
     
Sole Member
           
By: 
/s/ Thomas Hein    
Name:   
Thomas Hein    
Title:
Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
AMEI TECHNOLOGIES INC.,
   
a Delaware corporation
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Treasurer and Assistant Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
NEOMEDICS, INC., a New Jersey corporation
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Treasurer and Assistant Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
OSTEOGENICS INC., a Delaware corporation
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Treasurer and Assistant Secretary                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
BLACKSTONE MEDICAL, INC.,
   
a Massachusetts corporation
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Treasurer                    
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
SWIFTSURE MEDICAL LIMITED,
   
a company formed under the laws of England and Wales
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Director                            
[Signature Pages Continue]
 

 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 

 
ORTHOFIX UK LTD,
   
a company formed under the laws of England and Wales
           
By: 
/s/ Thomas Hein    
Name:  
Thomas Hein    
Title:
Director
                   
[Signature Pages Continue]
 

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

ORTHOFIX HOLDING, INC.
CREDIT AGREEMENT
 
ADMINISTRATIVE AGENT:
WACHOVIA BANK, NATIONAL ASSOCIATION,
   
as Administrative Agent for the Lenders and as a Lender
                   
By: 
/s/ Scott Santa Cruz    
Name:  
Scott Santa Cruz    
Title:
Director  

 
 

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

 
Schedule 1.1-1

ACCOUNT DESIGNATION LETTER

[Date]

Wachovia Bank, National Association
Charlotte Plaza
201 South College Street, CP-8
Charlotte, North Carolina 28288-0680

Attn: Syndication Agency Services

Ladies and Gentlemen:

This Account Designation Letter is delivered to you by Orthofix Holdings, Inc.,
a Delaware corporation (the "Borrower"), pursuant to Section 4.1 of the Credit
Agreement dated as of September 22, 2006 (as amended, restated or otherwise
modified from time to time, the "Credit Agreement") by and among the Borrower,
the Guarantors from time to time party thereto, the Lenders from time to time
party thereto and Wachovia Bank, National Association, as Administrative Agent
(the "Administrative Agent").

The Administrative Agent is hereby authorized to disburse all Loan proceeds into
the following account, unless the Borrower shall designate, in writing to the
Administrative Agent, one or more other accounts:

[INSERT Name of Bank/
ABA Routing Number/
and Account Number]

Notwithstanding the foregoing, on the Closing Date, funds borrowed under the
Credit Agreement shall be sent to the institutions and/or persons designated on
payment instructions to be delivered separately.

Capitalized terms defined in the Credit Agreement shall have the same meanings
when used herein.

 
 

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

 

This Account Designation Notice may, upon execution, be delivered by facsimile
or electronic mail, which shall be deemed for all purposes to be an original
signature.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
By:
     
Name:
     
Title:
   

 
 

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

 
 
Schedule 1.1-3

PERMITTED LIENS

1.
Liens of Blackstone Medical, Inc.

 
State
Secured Party
 
Filing Information
Collateral
MA
Dell Financial Services
Original
200317586280
01/13/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200317907850
1/27/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200317908550
01/27/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200318824200
03/06/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200319159860
3/20/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200319252390
3/24/2003
 
Leased Equipment
MA
Dell Financial Services
Original
200426944870
1/23/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200427265280
2/4/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200427406700
2/10/2004
 
Leased Equipment

 
 

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

 
 
State
Secured Party
 
Filing Information
Collateral
MA
CIT Communications Finance
Original
200428486990
3/24/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200433832410
10/21/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200434069400
11/01/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200434697540
11/26/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200435072120
12/13/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200435401290
12/27/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200535933420
01/18/2005
 
Leased Equipment
MA
Dell Financial Services
Original
200536198990
01/28/2005
 
Leased Equipment
MA
Dell Financial Services
Original
200536673460
02/17/2005
 
Leased Equipment
MA
Dell Financial Services
Original
200536927680
03/01/2005
 
Leased Equipment
MA
Dell Financial Services
Original
200429426850
04/29/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200430192300
05/27/2004
 
Leased Equipment

 
 

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

 
 
State
Secured Party
 
Filing Information
Collateral
MA
Dell Financial Services
Original
200430838000
06/22/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200431230380
07/07/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200431846040
08/02/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200432783380
09/09/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200433262550
09/29/2004
 
Leased Equipment
MA
Dell Financial Services
Original
200538080130
04/11/2005
 
Leased Equipment
MA
Dell Financial Services
Original
200538080310
04/11/2005
 
Leased Equipment
MA
CIT Communications Finance Corporation
Original
200542215030
09/22/2005
 
Leased Equipment
MA
IOS Capital
Original
200544074860
12/09/2005
 
Leased Equipment
MA
IOS Capital
Original
200649531790
07/11/2006
 
Leased Equipment
MA
CIT Bank
Original
200645236130
01/27/2006
 
Specific Equipment
MA
Winthrop Resources
Original
200645830680
02/22/2006
 
Leased Equipment

 
 

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

 
 
Schedule 2.1(b)(i)

[FORM OF]
NOTICE OF BORROWING

[Date]

Wachovia Bank, National Association
Charlotte Plaza
201 South College Street, CP-8
Charlotte, North Carolina 28288-0680

Attn: Syndication Agency Services

Ladies and Gentlemen:

Pursuant to subsection [2.1(b)][2.4(b)] of the Credit Agreement dated as of
September 22, 2006 (as amended, restated or otherwise modified prior to the date
hereof, the "Credit Agreement") by and among Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), the Guarantors from time to time party thereto,
the Lenders from time to time party thereto and Wachovia Bank, National
Association, as Administrative Agent (the "Administrative Agent"), the Borrower
hereby requests that the following Loans be made on [date] as follows (the
"Proposed Borrowing"):

I.
Revolving Loans requested:

 
(1)
Total Amount of Revolving Loans Requested
$ ______

 
(2)
Amount of (1) to be allocated to LIBOR Rate Loans
$ ______

 
(3)
Amount of (1) to be allocated to Alternate Base Rate Loans
$ ______

 
(4)
Interest Periods and amounts to be allocated thereto in respect of the LIBOR
Rate Loans referenced in (2) (amounts must total (2)):

 
(i)
one month
$ ______

 
(ii)
two months
$ ______

 
 

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

 

 
(iii)
three months
$ ______

 
 
(iv)
six months
$ ______

 
 
(v)
nine months
$ ______

 
Total LIBOR Rate Loans
$ ______

NOTE: REVOLVING LOAN BORROWINGS MUST BE IN MINIMUM AMOUNTS OF $1,000,000 AND IN
INTEGRAL MULTIPLES OF $500,000 IN EXCESS THEREOF.

II.
Swingline Loans requested:

 
(1)
Total Amount of Swingline Loans Requested $ ______

NOTE:
SWINGLINE LOAN BORROWINGS MUST BE IN MINIMUM AMOUNTS OF $100,000 AND IN INTEGRAL
AMOUNTS OF $100,000 IN EXCESS THEREOF.

Capitalized terms defined in the Credit Agreement shall have the same meanings
when used herein.

The undersigned hereby certifies that the following statements will be true on
the date of the Proposed Borrowing:

(A)      The representations and warranties made by the Credit Parties in the
Credit Agreement, the Security Documents and which are contained in any
certificate furnished at any time under or in connection therewith will be true
and correct as though such representations and warranties had been made on and
as of the date of such Proposed Borrowing (it being understood that any
representation or warranty which by its terms is made of a specified date shall
be required to be true and correct only as of such specified date);

 
 

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

 
 
(B)      no Default or Event of Default has occurred and is continuing, or would
result from such Proposed Borrowing (other than a Default or Event of Default
that has been waived in accordance with the Credit Agreement); and

(C)      immediately after giving effect to the making of the Proposed Borrowing
(and the application of the proceeds thereof), (i) the sum of outstanding
Revolving Loans plus outstanding LOC Obligations plus outstanding Swingline
Loans shall not exceed the Revolving Committed Amount, (ii) the outstanding LOC
Obligations shall not exceed the LOC Committed Amount and (iii) the outstanding
Swingline Loans shall not exceed the Swingline Committed Amount.

Delivery of an executed counterpart of this Notice of Borrowing by telecopier or
electronic mail with receipt confirmed shall be effective as delivery of an
original executed counterpart of this Notice of Borrowing.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
 

 
By:
     
Name:
     
Title:
   

 
 

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

 

Schedule 2.1(e)

[FORM OF]
REVOLVING NOTE

[Date]

FOR VALUE RECEIVED, the undersigned, Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay, on the
Revolver Maturity Date (as defined in the Credit Agreement referred to below),
to the order of (the "Lender") at the office of Wachovia Bank, National
Association located at Charlotte Plaza, 201 South College Street, CP-8,
Charlotte, North Carolina 28288-0680, in lawful money of the United States of
America and in same day funds, the aggregate unpaid principal amount of all
Revolving Loans made by the Lender to the Borrower pursuant to Section 2.1 of
the Credit Agreement referred to below. The Borrower further agrees to pay
interest in like money at such office on the unpaid principal amount hereof and,
to the extent permitted by law, accrued interest in respect hereof from time to
time from the date hereof until payment in full of the principal amount hereof
and accrued interest hereon, at the rates and on the dates set forth in the
Credit Agreement.

The holder of this Note is authorized to endorse the date and amount of each
Revolving Loan made pursuant to Section 2.1 of the Credit Agreement and each
payment of principal and interest with respect thereto and its character as a
LIBOR Rate Loan or an Alternate Base Rate Loan on Schedule 1 annexed hereto and
made a part hereof, or on a continuation thereof which shall be attached hereto
and made a part hereof, which endorsement shall constitute prima facie evidence
of the accuracy of the information endorsed (absent error); provided, however,
that the failure to make any such endorsement shall not affect the obligations
of the undersigned under this Note.

This Note is one of the Revolving Notes referred to in the Credit Agreement
dated as of September 22, 2006 (as amended, restated or otherwise modified from
time to time, the "Credit Agreement") by and among the Borrower, the Guarantors
from time to time party thereto, the Lenders from time to time party thereto and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent"), and is entitled to the benefits thereof. Capitalized
terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable documented attorneys' fees.

 
 

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

 
 
All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
By:
     
Name:
     
Title:
   

 
 

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

 

SCHEDULE 1
to
Revolving Note
 
LOANS AND PAYMENTS OF PRINCIPAL

Date
 
Amount
of
Loan
 
Type
of
Loan1
 
Interest
 
Interest
Rate
 
Interest
Period
 
Maturity
Date
 
Principal
Paid
or
Converted
 
Principal
Balance
 
Notation
Made By
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____
 
_____

__________________________
 
1
The type of Loan may be represented either by "L" for LIBOR Rate Loans or "ABR"
for Alternate Base Rate Loans.

 
 

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

 
 
Schedule 2.2(d)

[FORM OF]
TERM NOTE

[Date]

FOR VALUE RECEIVED, the undersigned, Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay, on the
Term Loan Maturity Date (as defined in the Credit Agreement referred to below),
to the order of (the "Lender") at the office of Wachovia Bank, National
Association at Charlotte Plaza, 201 South College Street, CP-8, Charlotte, North
Carolina 28288-0680, in lawful money of the United States of America and in same
day funds, the aggregate unpaid principal amount of the Term Loan made by the
Lender to the Borrower pursuant to Section 2.2 of the Credit Agreement referred
to below. The Borrower further agrees to pay interest in like money at such
office on the unpaid principal amount hereof and, to the extent permitted by
law, accrued interest in respect hereof from time to time from the date hereof
until payment in full of the principal amount hereof and accrued interest
hereon, at the rates and on the dates set forth in the Credit Agreement.

The holder of this Note is authorized to endorse the date and amount of each
payment of principal and interest with respect to the Term Loan evidenced by
this Note and the portion thereof that constitutes a LIBOR Rate Loan or an
Alternate Base Rate Loan on Schedule 1 annexed hereto and made a part hereof, or
on a continuation thereof which shall be attached hereto and made a part hereof,
which endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed (absent error); provided, however, that the failure to make
any such endorsement shall not affect the obligations of the undersigned under
this Note.

This Note is one of the Term Notes referred to in the Credit Agreement, dated as
of September 22, 2006 (as amended, restated or otherwise modified from time to
time, the "Credit Agreement"), by and among the Borrower, the Guarantors from
time to time party thereto, the lenders from time to time party thereto (the
"Lenders") and Wachovia Bank, National Association, as Administrative Agent for
the Lenders (the "Administrative Agent"), and is entitled to the benefits
thereof. Capitalized terms used but not otherwise defined herein shall have the
meanings provided in the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable attorneys' fees.

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
By:
     
Name:
     
Title:
   

 
 

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

 

SCHEDULE 1
to
Term Note

LOANS AND PAYMENTS OF PRINCIPAL

Date
 
Amount
of
Loan
 
Type
of
Loan1
 
Interest
 
Interest
Rate
 
Interest
Period
 
Maturity
Date
 
Principal
Paid
or
Converted
 
Principal
Balance
 
Notation
Made By
                                     
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____
 
____

____________________
1
The type of Loan may be represented either by "L" for LIBOR Rate Loans or "ABR"
for Alternate Base Rate Loans.

 
 

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

 

Schedule 2.4(d)

[FORM OF]
SWINGLINE NOTE

[Date]

FOR VALUE RECEIVED, the undersigned, Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay, on each
date specified in the Credit Agreement referred to below for the payment of
principal hereof and on the Revolver Maturity Date (as defined in the Credit
Agreement referred to below), to the order of Wachovia Bank, National
Association (the "Swingline Lender") at the office of Wachovia Bank, National
Association located at Charlotte Plaza, 201 South College Street, CP-8,
Charlotte, North Carolina 28288-0680, in lawful money of the United States of
America and in same day funds, the principal amount of the aggregate unpaid
principal amount of all Swingline Loans made by the Swingline Lender to the
Borrower pursuant to Section 2.4 of the Credit Agreement referred to below. The
Borrower further agrees to pay interest in like money at such office on the
unpaid principal amount hereof and, to the extent permitted by law, accrued
interest in respect hereof from time to time from the date hereof until payment
in full of the principal amount hereof and accrued interest hereon, at the rates
and on the dates set forth in the Credit Agreement.

The holder of this Note is authorized to endorse the date and amount of each
Swingline Loan made pursuant to Section 2.4 of the Credit Agreement and each
payment of principal and interest with respect thereto on Schedule 1 annexed
hereto and made a part hereof, or on a continuation thereof which shall be
attached hereto and made a part hereof, which endorsement shall constitute prima
facie evidence of the accuracy of the information endorsed (absent error);
provided, however, that the failure to make any such endorsement shall not
affect the obligations of the undersigned under this Note.

This Note is the Swingline Note referred to in the Credit Agreement dated as of
September 22, 2006 (as amended, restated or otherwise modified from time to
time, the "Credit Agreement") by and among the Borrower, the Guarantors from
time to time party thereto, the Lenders from time to time party thereto and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent"), and is entitled to the benefits thereof. Capitalized
terms used but not otherwise defined herein shall have the meanings provided in
the Credit Agreement.

Upon the occurrence of any one or more of the Events of Default specified in the
Credit Agreement, all amounts then remaining unpaid on this Note shall become,
or may be declared to be, immediately due and payable, all as provided therein.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to principal and interest, all
costs of collection, including reasonable documented attorneys' fees.

 
 

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

 

All parties now and hereafter liable with respect to this Note, whether maker,
principal, surety, endorser or otherwise, hereby waive presentment, demand,
protest and all other notices of any kind.

This Note shall be governed by, and construed and interpreted in accordance
with, the laws of the State of New York.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
By:
     
Name:
     
Title:
   

 
 

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

 

SCHEDULE 1
to
Swingline Note

LOANS AND PAYMENTS OF PRINCIPAL

Date
 
Amount
of
Loan
 
Principal
Paid
 
Interest
 
Principal
Balance
 
Notation
Made By
                     
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______
_______
 
_______
 
_______
 
_______
 
_______
 
_______

 
 

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

 
 
Schedule 2.10

[FORM OF]
NOTICE OF CONVERSION/EXTENSION

[Date]

Wachovia Bank, National Association
Charlotte Plaza
201 South College Street, CP-8
Charlotte, North Carolina 28288-0680

Attn: Syndication Agency Services

Ladies and Gentlemen:

Pursuant to Section 2.10 of the Credit Agreement dated as of September 22, 2006
(as amended, restated or otherwise modified prior to the date hereof, the
"Credit Agreement") by and among Orthofix Holdings, Inc., a Delaware corporation
(the "Borrower"), the Guarantors from time to time party thereto, the Lenders
from time to time party thereto and Wachovia Bank, National Association, as
Administrative Agent (the "Administrative Agent"), the Borrower hereby requests
conversion or extension of the following Loans be made on [date] as follows (the
"Proposed Conversion/Extension"):

I.
Revolving Loan

 
 
(1)
Total Amount of Revolving Loans to be converted/extended
$ ______

 
(2)
Amount of (1) to be allocated to LIBOR Rate Loans
$ ______

 
(3)
Amount of (1) to be allocated to Alternate Base Rate Loans
$ ______

 
 
(4)
Interest Periods and amounts to be allocated thereto in respect of the LIBOR
Rate Loans referenced in (2) (amounts must total (2)):

 
(i)
one month
$ ______

 
 

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

 
 
 
(ii)
two months
$ ______

 
(ii)
three months
$ ______

 
(iv)
six months
$ ______

 
(v)
nine months
$ ______

 
 
Total LIBOR Rate Loans
$ ______

NOTE:
CONVERSIONS MUST BE (A) IN THE CASE OF REVOLVING LOANS, $1,000,000 OR A WHOLE
MULTIPLE OF $500,000 IN EXCESS THEREOF AND (B) IN THE CASE OF THE TERM LOAN,
$2,000,000 OR A WHOLE MULTPLE OF $1,000,000 IN EXCESS THEREOF.

Capitalized terms defined in the Credit Agreement shall have the same meanings
when used herein.

The undersigned hereby certifies that as of the date of the Proposed
Conversion/Extension, no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Conversion/Extension or from the
application of the proceeds thereof.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 

 
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
 

 
By:
     
Name:
     
Title:
   

 
 

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

 

Schedule 2.

[FORM OF]
TAX EXEMPT CERTIFICATE

[Date]

Reference is hereby made to the Credit Agreement dated as of September 22, 2006
(as amended, restated or otherwise modified prior to the date hereof, the
"Credit Agreement") by and among Orthofix Holdings, Inc., a Delaware corporation
(the "Borrower"), the Guarantors from time to time party thereto, the Lenders
from time to time party thereto and Wachovia Bank, National Association, as
Administrative Agent (the "Administrative Agent"). Pursuant to the provisions of
Section 2.18 of the Credit Agreement, the undersigned hereby certifies that it
is not a "bank" as such term is used in Section 881(c)(3)(A) of the Internal
Revenue Code of 1986, as amended.

This Tax Exempt Certificate may, upon execution, be delivered by facsimile or
electronic mail, which shall be deemed for all purposes to be an original
signature.

 
[NAME OF LENDER]
             
By:
   
Name:
   
Title:
 

 
 

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

 

Schedule 3.3

QUI TAM MATTERS

1.
Orthofix Inc. and Orthofix International N.V.

 
a)
U.S. ex rel. Karen Neel v. Orthofix, Inc. and Orthofix International N.V., Civil
Action No. 3-00CV1333-D (N.D. Texas).

The plaintiff filed a whistleblower complaint under the federal False Claims Act
relating to the appropriateness of claims Orthofix, Inc. submitted to federal
health programs for the off-label use of certain FDA-approved pulsed electronic
magnetic field devices and related billing and coding practices. The matter was
resolved via settlement Orthofix, Inc. paid $1.6 million to the United States
Department of Justice, admitted no wrongdoing and was not found to have violated
applicable law.

 
 

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

 

Schedule 3.8

LITIGATION

1.
Orthofix Inc.

 
a)
Daniel Webb v. Orthofix. Inc., United States District Court for the Eastern
District of Washington; Civil Action No. CV-06-5053 EFS.

Plaintiff alleges that he was negligently provided with the incorrect model of
an Orthofix bone stimulator when he sustained a fracture of the left hip. The
case was filed in April 2006 in state court and was removed to the United States
District Court for the Eastern District of Washington. No trial date has been
assigned. The parties have only recently commenced discovery. Orthofix is
vigorously contesting all of plaintiffs liability and damage claims, and plans
to file a motion seeking dismissal of plaintiffs action.

 
b)
Fugate v. Orthofix. Inc., 296th Judicial District Collin County Court; Civil
Action No. 296-2940-05.

Plaintiff alleges that he was discharged from employment because of a
disability. Orthofix has filed a motion for summary judgment which was denied.
Mediation is scheduled for October 26, 2006.

 
c)
Bone Growth Stimulator Reclassification Proceeding

Orthofix Inc. is currently involved in a proceeding before the FDA addressing
whether the regulatory classification of Orthofix Inc.'s Physio-Stim and
Spinal-Stim bone growth stimulation products should be reclassified from FDA
Class III to FDA Class II. Orthofix Inc. is actively participating in this
proceeding and maintains that the current FDA Class III classification is
correct. A meeting was held on June 2, 2006 before the FDA's Orthopedic and
Rehabilitation Devices panel for the purpose of gathering information to allow
the panel to recommend to the FDA whether reclassification is appropriate. At
the conclusion of the meeting, the Panel determined that the present FDA Class
III classification for the products at issue is proper. Orthofix Inc. does not
know when or whether the FDA will reach a final determination on this
classification issue or whether any such determination will adversely impact
Orthofix Inc.'s ability to market or sell these products.

2.
Breg Inc.

 
 

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

 

 
a)
Deborah Casillas and Adam Casillas v. Omnimotion, Orthofix, Breg, Healthsouth,
NSC Channel Islands and Channel Islands Sursicenter, State of California
Superior Court, County of San Bernardino; Case Number VCVVS 040349.

This matter involves alleged cold injuries sustained while plaintiff was using a
Breg Polar Care 300 unit on her elbow following surgery. At this time, we are in
the process of obtaining plaintiffs medical records and thereafter will schedule
her deposition. Very little discovery has taken place.

 
b)
John Dade Theriot v. Brgs, Inc. and related distributor action for
indemnification. State of California Superior Court, County of San Francisco;
Case Number CGC 04-431658; and related Distributor action for indemnification.

This matter involved alleged cold injuries sustained while plaintiff was using
two Polar Care 500 units, one on each knee. The jury returned a verdict in favor
of the plaintiff against Breg on theories of product liability and negligence in
the amount of $4.1 million. Except for the distributors of the Breg product who
wish to retain their rights to proceed against Breg for indemnification, the
other parties are currently in the process of settling the case, following a
stipulation to vacate the judgment and grant a new trial. The amount of the
verdict is insured.

 
c)
Russell P. Dunnum, MD v. Breg Inc., State of California Superior Court, County
of San Diego; Case Number GIC860901.

This matter involves an alleged injury sustained when a catheter of the Pain
Care 2000 broke off in plaintiffs knee upon removal. Discovery is just
beginning.

 
d)
Denise Chlopek v. Breg, Inc., United States Court of Appeals for the Seventh
Circuit; Docket No. 06-2927.

Plaintiff alleged that her right great toe was amputated as a result of using
the Breg Polar Care 300 cold therapy unit. The jury returned a verdict in favor
of Breg and found that there was no defective condition related to the product.
Plaintiff filed a Motion for a New Trial which was denied and is currently being
appealed.

 
e)
Ann L. Perkins v. The Orthopedic Store and The Orthopedic Store v. Breg, Inc.,
District Court Bexar County, Texas; Case No. 2006-CI-06600.

 
 

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

 

Plaintiff used a Polar Care 500 following ankle surgery. She claims to have
sustained tissue necrosis. Plaintiff did not sue Breg. Instead, Breg has been
named as a third party defendant by The Orthopedic Store, a Durable Medical
Equipment dealer who was a customer of Breg. The Orthopedic Store purchased the
Polar Care 500 from Breg and leased it to the plaintiff. The plaintiff is still
in the process of adding medical professionals to the lawsuit and accordingly
there has not been any discovery.

 
f)
Dismissal Related Allegations for Employee Sam Rehan (being handled by British
attorneys). We do not believe this matter is currently in litigation.

3.
Blackstone Medical, Inc.

 
a)
NovaBone Products, LLC

On January 11, 2006, the Company received a letter from NovaBone Products, LLC,
claiming an interest in certain intellectual property being developed by the
Company relating to the processing of natural bone product with bioglass, a
developmental product underway at the Company.

 
b)
Berrios v. Blackstone Medical, Inc., Circuit Court of the 18th District in and
for Brevard, Florida; Case No. 05-2005-CA-017339.

The Plaintiff is claiming damages because of allegedly defective bone screws and
fixation hardware sold by the Company. This matter was referred to the Company's
products liability insurance carrier and is being defended by counsel selected
by that carrier.

 
c)
TissueNet

In 2005, the Company received correspondence dated December 13, 2005 from one of
its suppliers, TissueNet Custom Applications, LLC ("TissueNet") claiming that
the Company had breached a five year contract under which TissueNet supplied
precision tooled allograft implants to the Company for resale. We are unable to
determine whether a further claim will be made by TissueNet. The Company is also
disputing certain invoices (Nos. 2045 and 2046) that have been presented by
TissueNet. The value of the disputed invoices is approximately $138,700.

 
d)
Frederic H. Leeds v. Blackstone Medical, Inc., Second Judicial District Court of
the State of Nevada, in and for the County of Washoe; Case No. CV-06-01218.

 
 

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

 

The Plaintiff is claiming damages because of allegedly defective bone screws and
fixation hardware sold by the Company. This matter was referred to the Company's
products liability insurance carrier and is being defended by counsel selected
by that carrier.

 
 

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

 

Schedule 3.12

SUBSIDIARIES

Subsidiary
Jurisdiction of Incorporation/ Organization
Owner(s)
No. Shares of Capital Stock/ Equity Interests Outstanding
No. Shares of Capital Stock/ Equity Interests Held By [Each] Owner
Percentage Ownership of [Each] Owner
Orthosonics Ltd
UK
Orthofix International N.V.
120
120
100%
Orthofix B.V.
Amsterdam
Orthofix International N.V.
3,118,860
3,118,860
100%
Novamedix Services Ltd (Cyprus)
UK
Orthofix International N.V.
50,000
50,000
100%
Inter Medical Supplies Ltd
Cyprus
Orthofix International N.V.
10,000
10,000
100%
Novamedix Distribution Ltd
Cyprus
Orthofix International N.V.
4,000
4,000
100%
Inter Medical Supplies Ltd (Seychelles)
Seychelles
Orthofix International N.V.
5,000
5,000
100%
Novamedix Ltd
UK
Orthofix International N.V.
28,617 common,
5,050 preferred
28,617 common, 5,050 preferred
100%
Orthofix Mexico S.A. de C.V.
Mexico
Orthofix International N.V.
100,000
61,250
61.25%
Orthofix de Brasil
Brazil
Orthofix International N.V.
5,000
4,475 shares owned by Orthofix International NV; 325 shares owned by Jorge
Fuchs; 200 shares owned by Jose Augusto Proenca
89.5% owned by Orthofix International NV;
Orthofix SRL/DMO
Italy
Orthofix B.V.
3,000,000
3,000,000
100%
Orthofix GmbH
Germany
Orthofix B.V.
2,065,000
2,065,000
100%
Orthofix LTD
UK
Orthofix B.V.
1,426,256
1,426,256
100%
Orthofix SA
France
Orthofix B.V.
120,000
120,000
100%

 
 

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

 
 
Subsidiary
Jurisdiction of Incorporation/ Organization
Owner(s)
No. Shares of Capital Stock/ Equity Interests Outstanding
No. Shares of Capital Stock/ Equity Interests Held By [Each] Owner
Percentage Ownership of [Each] Owner
Orthofix AG
Switzerland
Orthofix B.V.
100
100
100%
Orthofix International II B.V.
Amsterdam
Orthofix B.V.
22,449
22,449
100%
Intavent Orthofix LTD
UK
Orthofix International II B.V.
10,000
10,000
100%
Colgate Medical Ltd
UK
Intavent Orthofix LTD
587,879
587,879
100%
Victory Medical Limited
UK
Colgate Medical Ltd
4,000,000
4,000,000
100%
Orthofix Holdings, Inc.
Delaware
Victory Medical Limited
100
100
100%
Breg Inc.
California
Orthofix Holdings, Inc.
1
1
100%
Orthofix Inc.
Minnesota
Orthofix Holdings, Inc.
100
100
100%
Swiftsure Medical Limited
UK
Orthofix Holdings, Inc.
12,251,885
12,251,885
100%
Breg Mexico
Mexico
Breg Inc.; Orthofix International N.V.
N/A
N/A
99.9% owned by Breg Inc.; 0.1% owned by Orthofix International N.V.
Breg Deutschland GmbH
Germany
Orthofix GmbH
N/A
N/A
52% owned by Orthofix GmbH; 48% owned by Stephan Michels, Ronald Hansjorg,
Nikolaus Murges and Albert Engal
Implantes Y Sistemas Medicos
Puerto Rico
Orthofix Inc.
100
100
100%
Osteogenics Inc.
Delaware
Orthofix Inc.
1,000
1,000
100%
AMEI Technologies Inc.
Delaware
Orthofix Inc.
1,000
1,000
100%
Neomedics, Inc.
New Jersey
AMEI Technologies Inc.
1,428,000
1,428,000
100%

 
 

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

 
 
Subsidiary
Jurisdiction of Incorporation/ Organization
Owner(s)
No. Shares of Capital Stock/ Equity Interests Outstanding
No. Shares of Capital Stock/ Equity Interests Held By [Each] Owner
Percentage Ownership of [Each] Owner
Orthofix UK
Ltd
UK
Swiftsure Medical Limited
2
2
100%
Orthofix US
LLC
Delaware
Orthofix UK Ltd
0
0
100%
Blackstone Medical, Inc.
Massachusetts
Orthofix Holdings, Inc.
8,000,000 Class A Voting Common Stock; 19,000,000 Class B Nonvoting Common Stock
8,000,000 Class A Voting Common Stock; 19,000,000 Class B Nonvoting Common Stock
100% of Class A and B
Blackstone GmbH
Germany
Blackstone Medical, Inc.
0
0
100%
Goldstone GmbH
Switzerland
Blackstone Medical, Inc.; Blackstone GmbH
0
0
50% owned by Blackstone Medical, Inc.; 50% owned by Blackstone GmbH

 
 

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

 

 
Schedule 3.16
 
INTELLECTUAL PROPERTY
 
 
1.
Licenses

 
 
a)
Breg Inc.

 
 
i.
Joint Development and Technology Rights Agreement by and between Medicine Lodge,
Inc. and Breg, Inc., dated February 11, 2002; including Assignment of U.S.
Patent Application 10/218,106 to Breg, Inc. and Assignment of U.S. Patent
Application 10/270,091 to Breg, Inc.

 
 
ii.
Agreement between Professional Football Athletic Trainers Society (PFATS) and
Breg, Inc, dated. April 26, 1999; First Renewal Agreement between PFATS and
Breg, Inc., dated August 1, 2001; Second Renewal Agreement Between PFATS and
Breg, Inc., dated September 1, 2003.

 
 
iii.
Supplier Agreement between Alpine Canada Alpin and Breg, Inc., dated August 1,
2001; Supplier Agreement between Alpine Canada Alpin and Breg, Inc. dated April
14, 2003.

 
 
iv.
Exclusive License Agreement between Breg, Inc. and Kevin Speer, M.D., dated
January 1, 1997.

 
 
v.
Exclusive License Agreement between Breg, Inc. and James C. Esch, M.D., dated
October 1, 1990.

 
 
vi.
Exclusive License and Assignment Agreement between Breg, Inc. and Ken Yamaguchi,
dated October 21, 2003.

 
 
vii.
License of Patent Agreement between Breg, Inc. and Cincinnati SubZero Products,
Inc., dated October 13, 1992.

 
 
viii.
Biodex Settlement Agreement.

 
 
ix.
DonJoy Settlement Agreement.

 
 
x.
Term Royalty Agreement between Breg, Inc. and Bill Brennan and John Gregory,
dated May 1, 2002.

 
 
xi.
Exclusive Distributor Agreement between Accu-Fit, Inc. and Breg, Inc., dated
November 1, 2002.

 
 

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

 
 
 
xii.
Supply Agreement between Life-Tech, Inc. and Breg, Inc., dated October 18, 2002.

 
 
xiii.
Distributor Agreement between Ultra Athlete, LLC f/k/a Athlete Protection Gear,
LLC and Breg, Inc., dated March 26, 2003 (replaced Distributor Agreement between
Athlete Protection Gear, LLC and Breg, Inc., dated June 19, 2003).

 
 
xiv.
Agreement between Breg, Inc. and Orthofix Inc. for Distribution of Pulsed
ElectroMagnetic Fields Device Systems and related products, dated October 22,
2001.

 
 
xv.
Master Services Agreement, dated August 26, 2002, between Breg, Inc. and Kenexa
Technology Inc.

 
 
b)
Orthofix Inc.

 
 
i.
License Agreement between Orthofix, Inc. and Innovative Orthotics relating to
EZ-Brace technology.

 
 
ii.
License Agreement between Orthofix, Inc., Jack Farr, M.D. and Scott Gillogly,
M.D. relating to Oasis technology.

 
 
iii.
License Agreement between Orthofix, Inc. and Morphographics, L.C. relating to
Guided Growth Plate ("8-Plate") technology.

 
 
iv.
Product Development and Distribution Agreement between Orthofix, Inc.,
Orthodyne, Inc. and J. Dean Cole, M.D. relating to Intramedullary Skeletal
Kinetic Distractor ("ISKD") Systems.

 
 
v.
License Agreement between Orthofix, Inc. and Silvatec Medical Company Inc.
relating to Lapidus Plate technology.

 
 
vi.
License Agreement between Orthofix, Inc. and Brian Adams, M.D., Michael Harsman,
M.D. and John Pepper, M.D. relating to Bone Staple and Trigger Finger Release
technology.

 
 
vii.
License Agreement between Orthofix, Inc. and David Nelson, M.D. relating to
Contours Radial Distal Plate technology.

 
 
viii.
License Agreement between Orthofix, Inc. and L. Andrew Koman, M.D. relating to
M2 minirail technology.

 
 
c)
Blackstone Medical, Inc.

 
 
i.
End User License Agreement dated December 1, 2005 by and between the Blackstone
and Epicor Software Corporation.

 
 

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

 
 
 
ii.
License Agreement dated as of December 2, 2003 by and between Blackstone and
Cross Medical Products, Inc.

 
 
iii.
Professional Service Agreement dated May 30, 2006 by and between Blackstone and
IQS, Inc.

 
 
iv.
Services Agreement dated October 25, 2004 by and between Blackstone and Atrium
Medical Corporation.

 
 
v.
Amended and Restated Agreement between Blackstone and Robert S. Bray, Jr., M.D.,
dated December 16, 1998.

 
2.
Potential Claims

 
 
a)
Blackstone Medical, Inc.

 
 
i.
Letter dated January 31, 2003 from Mark Finkelstein of Latham & Watkins LLP to
Matthew Lyons, President of Blackstone regarding potential infringement of
patents owned by Cross Medical Products, Inc.

 
 
ii.
Blackstone is aware that certain patents that it licenses from Cross Medical
Products, Inc. are the subject of a pending lawsuit between Medtronic Sofamor
Danek and Cross Medical Products, Inc.

 
 
iii.
Blackstone is aware that Cross Medical Products, Inc. does not agree with
Blackstone as to the scope of the license granted to Blackstone under the
License Agreement between the parties.

 
 
iv.
On July 10, 2006, Blackstone wrote to EBI requesting consent to the transfer of
the license in the context of the Blackstone/Orthofix transaction. On July 28,
2006, EBI wrote to Blackstone declining to grant consent to the transfer of the
license. On September 11, 2006, representatives of Orthofix, Blackstone and EBI
met to address EBI's refusal to grant consent. At that meeting, the parties
agreed to refrain from initiating any litigation, pending commercial
negotiations to resolve the dispute relating to the transfer of the license.

 
 

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

 
 
PATENTS
 
Patent/
Application No.
Credit Party
Title
Jurisdiction
Date of
Issuance/
Application
Status
5181902
AMEI Technologies Inc
Double-Transducer System for PEMF Therapy
US
1/26/93
Active
11/408617
AMEI Technologies Inc
Drive Systems and Device Incorporating Drive Systems
US
4/21/06
Pending
11/115009
AMEI Technologies Inc
Screw Extration and Insertion Device
US
4/26/05
Pending
5269747
AMEI Technologies Inc
Double-transducer system for PEMF therapy
US
12/14/93
Active
5195941
AMEI Technologies Inc
Contoured Triangular Transducer System for PEMF Therapy
US
3/23/93
Active
5351389
AMEI Technologies Inc
Method for fabricating a contoured triangular transducer system
US
10/4/94
Active
5401233
AMEI Technologies Inc
Contoured triagular transducer system for PEMF therapy
US
3/28/95
Active
5314401
AMEI Technologies Inc
Conformable PEMF Transducer
US
5/24/94
Active
5304210
AMEI Technologies Inc
Apparatus for Distributed Bone Growth Stimulation
US
4/19/94
Active
5452407
AMEI Technologies Inc
Method for representing a patient's treatment site as data for use with a CAD or
CAM device
US
9/19/95
Active
5441527
AMEI Technologies Inc
Implantable Bone Growth Stimulator and Method of Operation
US
8/15/95
Active
D353889
AMEI Technologies Inc
Implantable Tissue Growth Stimulator
US
12/27/94
Active
0,561,068
AMEI Technologies Inc
Implantable Tissue Growth Stimulator
European
3/3/99
Active
5565005
AMEI Technologies Inc
Implantable Tissue Growth Stimulator and Method of Operation
US
10/15/96
Active
5766231
AMEI Technologies Inc
Implantable Tissue Growth Stimulator and Method of Operation
US
6/16/98
Active
0,611,583
AMEI Technologies Inc
Implantable Tissue Growth Stimulator and Method of Operation
European
4/7/99
Active
5524624
AMEI Technologies Inc
Apparatus and Method for Stimulating Tissue Growth with Ultrasound
US
6/11/96
Active
D361555
AMEI Technologies Inc
Combined Programmer and Monitor for an Implantable Tissue Growth Stimulator
US
8/22/95
Active
5304179
AMEI Technologies Inc
System and Method for Installing a Spinal Fixation System at Variable Angles
US
4/19/94
Active
5437669
AMEI Technologies Inc
Spinal Fixation Systems with Bifurcated Connectors
US
8/1/95
Active
5704904
AMEI Technologies Inc
Inflatable Lumbar Traction Device
US
1/6/98
Active
5950628
AMEI Technologies Inc
Inflatable Wearable Traction Device
US
9/14/99
Active
5724993
AMEI Technologies Inc
Inflatable Spinal Traction Device
US
3/10/98
Active
0,837,666
AMEI Technologies Inc
Ambulatory Spinal Traction Device
US/European
2/11/04
Active
310906
AMEI Technologies Inc
Ambulatory Spinal Traction Device
Norway
9/17/01
Active
122495
AMEI Technologies Inc
Ambulatory Spinal Traction Device
Israel
7/22/02
Active
699290
AMEI Technologies Inc
Inflatable Spinal Traction Device
Australia
3/11/99
Active

 
 
 

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

 
 
Patent/ Application No.
Credit Party
Title
Jurisdiction
Date of Issuance/ Application
Status
5743844
AMEI Technologies Inc
High Efficiency Pulsed Electromagnetic Field (PEMF) Stimulation Therapy Method
and System
US
4/28/98
Active
6,261,221B1
AMEI Technologies Inc
Flexible Coil Pulsed Electromagnetic Field (PEMF) Stimulation Therapy System
US
7/17/01
Active
6132362
AMEI Technologies Inc
Pulsed Electromagnetic Field (PEMF) Stimulation Therapy System with Bi-Phasic
Coil
US
10/17/00
Active
6117575
AMEI Technologies Inc
Battery Compartment
US
9/12/00
Active
6024691
AMEI Technologies Inc
Cervical Collar with Integrated Electrical Circuitry for Electromagnetic field
Therapy
US
2/15/00
Active
6418345B1
AMEI Technologies Inc
PEMF Stimulator for Treating Osteoporosis and Stimulating Tissue Growth
US
7/9/02
Active
5507211
AMEI Technologies Inc
Releasable Socket
US
4/16/96
Active
6839595
AMEI Technologies Inc
PEMF Stimulator for Treating Osteoporosis and Stimulating Tissue Growth
US
1/4/05
Active
1100582
AMEI Technologies Inc
PEMF Treatment for Osteoporosis and Tissue Growth Stimulation
European
6/15/05
 
6678562
AMEI Technologies Inc
Combined Tissue/Bone Growth Stimulator and External Fixation Device
US
1/13/04
 
1248659
AMEI Technologies Inc
Combined Tissue/Bone Growth Stimulator and External Fixation Device
European
 
Active
D348198
AMEI Technologies Inc
Interlaminar Clamp
US
6/28/94
Active
4735196
AMEI Technologies Inc
Cervical-Thoracic Orthosis and Method
US
4/5/88
Active
6635025
AMEI Technologies Inc
Traction Device Adjustment Mechanism and Method
US
10/21/03
Active
6974432
AMEI Technologies Inc
Traction Device Adjustment Mechanism and Method
US
12/13/05
Active
6533740
AMEI Technologies Inc
Lifting Mechanism for a Traction Device
US
3/18/03
Active
6776767
AMEI Technologies Inc
Traction Device and Associated Lifting Mechanism
US
8/17/04
Active
6702771
AMEI Technologies Inc
Canting Mechanism for Ambulatory Support Device
US
3/9/04
Active
6746413
AMEI Technologies Inc
Canting Mechanism for Ambulatory Support Device
US
6/8/04
Active
6689082
AMEI Technologies Inc
Traction Device
US
2/10/04
Active
6364824
Orthofix Inc.
Stimulating Cell Receptor Activity Using Electromagnetic Fields
US
4/2/04
Active
7089060
AMEI Technologies Inc
Stimulating Cell Growth Using Pulsed Electro-Magnetic Fields (PEMF)
US
8/8/06
Active

 

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

 
Patent/ Application No.
Credit Party
Title
Jurisdiction
Date of Issuance/ Application
Status
7074201
AMEI Technologies Inc
Measurement Device for Fitting a Bracing Device
US/Patent Cooperation Treaty
 
Active
6997892
AMEI Technologies Inc
Ambulatory Cyclic Traction Device
US
2/4/06
Active
03773260.9 2004/034872
AMEI Technologies Inc
Ambulatory Cyclic Traction Device
European/Patent Cooperation Treaty
 
Active
7070572
AMEI Technologies Inc
Dynamically Adjustable Stabilization Brace
US/Patent Cooperation Treaty
 
Active
10/712574
AMEI Technologies Inc
Apparatus and Method for Maintaining Bones in Healing Position
US/Patent Cooperation Treaty
11/13/03
Pending
10/393,541
AMEI Technologies Inc
Field Adjustable Traction Device
US
 
Pending
11/244879
AMEI Technologies Inc
Bone Alignment Implant and Method of Use
US
 
Pending
6322571
AMEI Technologies Inc
Apparatus and Method for Placing Sutures in the Lacerated End of a Tendon and
Similar Body Tissues
US/Patent Cooperation Treaty
11/27/01
Active
6342060
AMEI Technologies Inc
Tendon Passing Device and Method
US/Patent Cooperation Treaty
1/29/02
Active
7001351
AMEI Technologies Inc
Brace with Integrated Lumbar Support System
US
2/21/06
Active
10/629,192
AMEI Technologies Inc
Fixation Device and Method for Treating Contractures and Other Orthopedic
Indications
US
7/29/03
Pending
6936019
Breg Inc.
Strap Connector Assembly for an Orthopedic Brace
US
8/30/05
Active
6893414 B2
Breg Inc.
Integrated Infusion and Aspiration System and Method
US
5/17/05
Active
6802823 B2
Breg Inc.
Medication Delivery System Having Selective Automated or Manual Discharge
US
10/12/04
Active

 

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

 
Patent/ Application No.
Credit Party
Title
Jurisdiction
Date of Issuance/ Application
Status
6719728 B2
Breg Inc.
Patient Controlled Medication Delivery System with Overmedication Prevention
(2000L)
US
4/13/2004
Active
6719713 B2
Breg Inc.
Strap Attachment Assembly for an Orthopedic Brace
US
4/13/2004
Active
D486870 S
Breg Inc.
Continuous Passive Motion Device for a Shoulder or Elbow (Shoulder CPM)
US
2/17/2004
Active
6551264 B1
Breg Inc.
Orthosis for Dynamically Stabilizing the Patello-Femoral Joint
US
4/22/2003
Active
6270481 B1
Breg Inc.
Patient-Controlled Medication Delivery System (2000 & 2000L)
US
8/7/2001
Active
6260890 B1
Breg Inc.
Tubing Connector
US
7/17/2001
Active
6176869 B1
Breg Inc.
Fluid Drive Mechanism for a Therapeutic Treatment System
US
1/23/2001
Active
DES.430,288
Breg Inc.
Medical Infusion Pump (2000 & 2000L)
US
8/29/2000
Active
DES.430,289
Breg Inc.
Infusion Pump for Administering a Fluid Medication (2000 & 2000L)
US
8/29/2000
Active
REEXAM (U.S. 5,330,519)
Breg Inc.
Therapeutic Nonambient Temperature Fluid Circulation System
US
7/6/1999
Active
REEXAM(U.S. 5,330,519)
Breg Inc.
Therapeutic Nonambient Temperature Fluid Circulation System
US
11/10/1998
Active
5827208
Breg Inc.
Hinge For an Orthopedic Brace Having a Selectively Positionable Stop to Limit
Rotation
US
10/27/1998
Active
5807294
Breg Inc.
Adjustable Hinge Assembly for an Osteoarthritic Knee Brace
US
9/15/1998
Active
5782780
Breg Inc.
Method of Forming a Contoured Orthotic Member
US
7/21/1998
Active
5772618
Breg Inc.
Hinge Plate For an Orthopedic Brace
US
6/30/1998
Active
5672152
Breg Inc.
Hinge For an Orthopedic Brace Having an Adjustable Range of Rotation
US
9/30/1997
Active
DES.383,848
Breg Inc.
Cold Therapy Pad
US
9/16/1997
Active
DES.383,547
Breg Inc.
Cold Therapy Pad With Mounting Straps
US
9/9/1997
Active
5662695
Breg Inc.
Occlusion-Resistant Fluid Pad Conformable to a Body for Therapeutic Treatment
Thereof
US
9/2/1997
Active
5507792
Breg Inc.
Therapeutic Treatment Device Having a Heat Transfer Element and a Pump for
Circulating a Treatment Fluid Therethrough
US
4/16/1996
Active
5417720
Breg Inc.
Nonambient Temperature Pad Conformable to a Body For Therapeutic Treatment
Thereof
US
5/23/1995
Active
DES.352,781
Breg Inc.
Therapeutic Fluid Flow Line
US
11/22/1994
Active
DES. 351,472
Breg Inc.
Therapeutic Fluid Circulation Pad for the Eyes
US
10/11/1994
Active
5352174
Breg Inc.
Shoulder Exercise System
US
10/4/1994
Active
5330519
Breg Inc.
Therapeutic Nonambient Temperature Fluid Circulation System
US
7/19/1994
Active
DES. 348,518
Breg Inc.
Therapeutic Fluid Circulation Pad for Breasts
US
7/5/1994
Active

 

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

 
Patent/ Application No.
Credit Party
Title
Jurisdiction
Date of Issuance/ Application
Status
DES. 348,106
Breg Inc.
Therapeutic Fluid Circulation Pad for Body Joints
US
6/21/1994
Active
DES.345,802
Breg Inc.
Therapeutic Fluid Pump
US
4/5/1994
Active
DES.345,803
Breg Inc.
Therapeutic Fluid Flow Controller
US
4/5/1994
Active
DES. 345,609
Breg Inc.
Nonambient Temperature Pad Conformable to a Body for Therapeutic Treatment
Thereof (Therapeutic Fluid Circulation Pad)
US
3/29/1994
Active
5241951
Breg Inc.
Therapeutic Nonambient Temperature Fluid Circulation System
US
9/7/1993
Active
5232020
Breg Inc.
Shutoff Valve Having a Unitary Valve Body (Housing)
US
8/3/1993
Active
5112045
Breg Inc.
Kinesthetic Diagnostic and Rehabilitation Device
US
5/12/1992
Active
5080089
Breg Inc.
Therapeutic Apparatus Applying Compression and a Nonambient Temperature Fluid
US
1/14/1992
Active
11/285,827
Breg Inc.
Non-Ambient Temperature Therapy System with Automatic Treatment Temperature
Maintenance (new cold therapy)
US
11/22/2005
Pending
11/040,814
Breg Inc.
Frame for an Orthopedic Brace Including Offset Hinges
US
1/2/2005
Pending
11/067,305
Breg Inc.
Method for Fitting an Orthopedic Brace to the Body
US
1/12/2005
Pending
11/039,448
Breg Inc.
Releasably Locking Hinge for an Orthopedic Brace Having Adjustable Rotation
Limits
 
1/12/2005
Pending
11/039,056
Breg Inc.
Support Assembly for an Orthopedic Brace having a Length-Adjusting Mechanism
US
1/12/2002
Pending
10/933,619
Breg Inc.
Medication Delivery System Having Selective Automated or Manual Discharge
(Division of pat no. 6,802,823)
 
9/2/2004
Pending
10/860,963
Breg Inc.
Shoulder Stabilizing Restraint
US
6/4/2004
Pending
10/745,900
Breg Inc.
Orthopedic Walker Having a Soft Boot with a Deformable Insert
US
12/24/2003
Pending
10/728,736
Breg Inc.
Knee Brace Providing Dynamic Tracking of the Patello-Femoral Joint
US
12/5/2003
Pending
10/420,344
Breg Inc.
Orthosis Providing Dynamic Tracking of the Patello-Femoral Joint Continuation in
Part.
US
4/22/2003
Pending
10/285,861
Breg Inc.
Continuous Passive Motion Device for Rehabilitation of the Elbow or Shoulder
US
1/11/2002
Pending
10/270,091
Breg Inc.
Catheter Assemblies for Controlled Movement of Fluid
US
10/14/2002
Pending
PCT/
Breg Inc.
Frame for an Orthopedic Brace Including Offset Hinges
All countries
12/29/2005
Pending
PCT/US03/25069
Breg Inc.
Integrated Infusion and Aspiration System and Method
All countries
8/11/2003
Pending
10/896,515
Breg Inc.
Integrated Infusion and Aspiration System and Method
US
8/12/2002
Pending

 
 

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

 
 
Patent/ Application No.
Credit Party
Title
Jurisdiction
Data of
Issuance/
Application
Status
2002951449
Blackstone Medical Inc.
An Arthroscopy Irrigation Device
All countries except Taiwan
 
Pending
2001285096
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
Australia
 
Active
2420147
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
Canada
 
Active
01816670.9
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
China
 
Active
01964217.2
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
EPO
 
Active
PA/a/2003/001514
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
Mexico
 
Active
NI201003 90120338
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
Taiwan
 
Active
6,524,310
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
US
2/25/2003
Active
04105071.7
Blackstone Medical Inc.
A Surgical Cross-Connecting Apparatus
Hong Kong
 
Active
N1243052 91102582
Blackstone Medical Inc.
Orthopedic Implant and Method for Orthopedic Treatment
Taiwan
 
Active
10/676,062
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
US
 
Active
2003275367
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
Australia
 
Active
2504215
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
Canada
 
Active
03759643.4
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
EPO
 
Active
PA/a/2005/004596
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
Mexico
 
Active
06101761.9
Blackstone Medical Inc.
Bone Plate Assembly Provided with Screw Locking Mechanisms
Hong Kong
 
Active
6,960,232
Blackstone Medical Inc.
Artificial Intervertebral Disc
US
11/1/2005
Active
2003228697
Blackstone Medical Inc.
Artificial Intervertebral Disc
Australia
 
Active
03726462.9
Blackstone Medical Inc.
Artificial Intervertebral Disc
EPO
 
Active
2003-587291
Blackstone Medical Inc.
Artificial Intervertebral Disc
Japan
 
Active
10/891,635
Blackstone Medical Inc.
Artificial Intervertebral Disc
US
 
Active
US04/22778
Blackstone Medical Inc.
Artificial Intervertebral Disc
PCT
 
Active
6,413,259
Blackstone Medical Inc.
Bone Plate Assembly Including a Screw Retaining Member
US
7/2/2002
Active
6,648,893
Blackstone Medical Inc.
Facet Fixation Devices
US
11/18/2003
Active
6,238,396
Blackstone Medical Inc.
Surgical Cross-Connecting Apparatus and Related Methods
US
5/29/2001
Active
2424814
Blackstone Medical Inc.
Surgical Cross-Connecting Apparatus and Related Methods
Canada
 
Active
6,540,748
Blackstone Medical Inc.
A Surgical Screw System and Method of Use
US
4/1/2003
Active
2423973
Blackstone Medical Inc.
A Surgical Screw System and Related Methods
Canada
 
Active
10/968,586
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
US
 
Active
2004284933
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
Australia
 
Active
2542833
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
Canada
 
Active

 

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

Patent/ Application No.
Credit Party
Title
Jurisdiction
Date of
Issuance/
Application
Status
04795903.6
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
EPO
     
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
Japan
   
PA/a/2006/004374
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
Mexico
   
11/031,362
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
US
   
US2005/000376
Blackstone Medical Inc.
Vertebral Body Replacement Apparatus and Method
PCT
   
10/968,585
Blackstone Medical Inc.
Bone Plate and Method for Using Bone Plate
US
   
11/092,273
Blackstone Medical Inc.
Bone Plate and Method for Using Bone Plate
US
   
US2005/010540
Blackstone Medical Inc.
Bone Plate and Method for Using Bone Plate
PCT
   
10/928,955
Blackstone Medical Inc.
Multi-Axial Connection System
US
   
US2005/029836
Blackstone Medical Inc.
Multi-Axial Connection System
PCT
   
11/388,666
Blackstone Medical Inc.
Multi-Axial Connection System
US
   
US2006/010738
Blackstone Medical Inc.
Multi-Axial Connection System
PCT
   
11/228,117
Blackstone Medical Inc.
Anterior Cervical Plating System
US
   
60/703,546
Blackstone Medical Inc.
Nerve Protection System
US
   
60/719,424
Blackstone Medical Inc.
Artificial Intervertebral Disc-Crimped Ring Design
US
   
60/748,333
Blackstone Medical Inc.
Device and Method for Holding and Inserting One or More Components of a Pedicle
Screw
US
   
60/759,944
Blackstone Medical Inc.
Artificial Intervertebral Disc (aka Crimped Ring-Dacron) I
US
   
60/772,812
Blackstone Medical Inc.
Artificial Intervertebral Disc (aka Concentric Columns) I
US
   
60/780,903
Blackstone Medical Inc.
System and Method for Dynamic Stabilization of the Spine
US
   
60/744,871
Blackstone Medical Inc.
Percutaneous Facet Fusion Device and Method
US
   
60/745,303
Blackstone Medical Inc.
Artificial Intervertebral Disc (aka Radially Crimped Dacron)
US
   

 

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

 
TRADEMARKS
 
Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
2646432
AMEI Technologies, Inc.
PHYSIO-STIM
Argentina
 
Pending
827344643
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Brazil
 
Pending
827942516
AMEI Technologies, Inc.
GOTFRIED PC.C.P & Design
Brazil
 
Pending
827318537
AMEI Technologies, Inc.
MIOT
Brazil
 
Pending
824347269
AMEI Technologies, Inc.
ORTHOTRAC
Brazil
 
Pending
824631633
AMEI Technologies, Inc.
ORTHOTRAC & Device
Brazil
 
Pending
828089400
AMEI Technologies, Inc.
PHYSIO-STIM
Brazil
   
1254566
AMEI Technologies, Inc.
BLADERUNNER
Canada
 
Pending
1254565
AMEI Technologies, Inc.
CONTOURS VPS
Canada
 
Pending
1254260
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Canada
 
Pending
1254188
AMEI Technologies, Inc.
MIOT
Canada
 
Pending
4614955
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
China
 
Pending
4556233
AMEI Technologies, Inc.
MIOT
China
 
Pending
T2005-037367
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Colombia
 
Pending
4733911
AMEI Technologies, Inc.
GOTFRIED PC.C.P & Design
CTM
 
Pending
40-2005-18478
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Republic of Korea (South)
 
Pending
40-2005-15399
AMEI Technologies, Inc.
MIOT
Republic of Korea (South)
 
Pending
97116
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Saudi Arabia
 
Pending
95541
AMEI Technologies, Inc.
MIOT
Saudi Arabia
 
Pending
2005/07005
AMEI Technologies, Inc.
BLADERUNNER
South Africa
 
Pending
2005/07005
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
South Africa
 
Pending
2005/04886
AMEI Technologies, Inc.
MIOT
South Africa
 
Pending
78526886
AMEI Technologies, Inc.
BLADERUNNER
US
 
Pending

 

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

Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
78663808
AMEI Technologies, Inc.
BONEMAX & Design
US
 
Pending
78834578
AMEI Technologies, Inc.
MAKING LIFE BETTER THROUGH INNOVATIONS IN HEALING
US
 
Pending
78504027
AMEI Technologies, Inc.
MIOT
US
 
Pending
78607031
AMEI Technologies, Inc.
OSTEOMAX
US
 
Pending
1050584
AMEI Technologies, Inc.
BLADERUNNER
Australia
4/13/2005
Registered
1051609
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Australia
11/28/2005
Registered
1046353
AMEI Technologies, Inc.
MIOT
Australia
3/15/2005
Registered
893347
AMEI Technologies, Inc.
ORTHOTRAC
Australia
10/26/2001
Registered
893350
AMEI Technologies, Inc.
ORTHOTRAC & Device
Australia
10/26/2001
Registered
906762
AMEI Technologies, Inc.
ORTHOTRAC & Device
Australia
3/19/2002
Registered
619612
AMEI Technologies, Inc.
PHYSIO-STIM
Australia
12/31/1993
Registered
619614
AMEI Technologies, Inc.
SPINAL-STIM
Australia
12/31/1993
Registered
544186
AMEI Technologies, Inc.
PHYSIO-STIM
Benelux
10/3/1994
Registered
770936
AMEI Technologies, Inc.
PHYSIO-STIM
Benelux
2/22/2005
Registered
0544185
AMEI Technologies, Inc.
SPINAL-STIM
Benelux
10/3/1994
Registered
770937
AMEI Technologies, Inc.
SPINAL-STIM
Benelux
2/22/2005
Registered
TMA449580
AMEI Technologies, Inc.
AME & Design
Canada
11/3/1995
Registered
TMA535437
AMEI Technologies, Inc.
CERVICAL-STIM
Canada
10/23/2000
Registered
TMA626724
AMEI Technologies, Inc.
ORTHOTRAC
Canada
11/25/2004
Registered
TMA638133
AMEI Technologies, Inc.
ORTHOTRAC & Device
Canada
4/22/2005
Registered
TMA539243
AMEI Technologies, Inc.
OSTEO-TITE
Canada
1/8/2001
Registered
TMA542417
AMEI Technologies, Inc.
PHYSIO-STIM
Canada
3/15/2001
Registered
TMA446011
AMEI Technologies, Inc.
SPINAL-STIM
Canada
8/11/1995
Registered
636707
AMEI Technologies, Inc.
ORTHOTRAC
Chile
7/18/2002
Registered
642654
AMEI Technologies, Inc.
ORTHOTRAC & Device
Chile
9/23/2002
Registered
3013024
AMEI Technologies, Inc.
ORTHOTRAC
China
1/28/2003
Registered
3119623
AMEI Technologies, Inc.
ORTHOTRAC & Device
China
1/28/2003
Registered
305007
AMEI Technologies, Inc.
MIOT
Colombia
10/24/2005
Registered
4386967
AMEI Technologies, Inc.
BLADERUNNER
CTM
4/13/2005
Registered
000884122
AMEI Technologies, Inc.
CERVICAL-STIM
CTM
11/17/1999
Registered
4386901
AMEI Technologies, Inc.
CONTOURS VPS
CTM
4/13/2005
Registered
4409389
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
CTM
4/20/2005
Registered
001260728
AMEI Technologies, Inc.
EZBRACE
CTM
11/8/2000
Registered
4338331
AMEI Technologies, Inc.
MIOT
CTM
3/14/2005
Registered
002431559
AMEI Technologies, Inc.
ORTHOTRAC
CTM
3/31/2003
Registered
002624088
AMEI Technologies, Inc.
ORTHOTRAC & Device
CTM
1/12/2004
Registered
00851634
AMEI Technologies, Inc.
OSTEO-TITE
CTM
10/4/1999
Registered
94502900
AMEI Technologies, Inc.
PHYSIO-STIM
France
7/8/1994
Registered
9450291
AMEI Technologies, Inc.
SPINAL-STIM
France
7/8/1994
Registered
153124
AMEI Technologies, Inc.
PHYSIO-STIM
Germany
6/2/2003
Registered

 
 

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

 
 
Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
155984
AMEI Technologies, Inc.
SPINAL-STIM
Germany
5/5/2003
Registered
153124
AMEI Technologies, Inc.
ORTHOTRAC
Israel
6/2/2003
Registered
155984
AMEI Technologies, Inc.
ORTHOTRAC & Device
Israel
5/5/2003
Registered
4896847
AMEI Technologies, Inc.
BLADERUNNER
Japan
9/22/2005
Registered
4399290
AMEI Technologies, Inc.
CERVICAL-STIM
Japan
7/14/2000
Registered
4896849
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Japan
9/22/2005
Registered
4882077
AMEI Technologies, Inc.
MIOT
Japan
7/22/2005
Registered
4399289
AMEI Technologies, Inc.
OSTEO-TITE
Japan
7/14/2000
Registered
4411424
AMEI Technologies, Inc.
PHYSIO-STIM
Japan
8/25/2000
Registered
4325121
AMEI Technologies, Inc.
SPINAL-STIM
Japan
10/15/1999
Registered
4513042
AMEI Technologies, Inc.
THE HEALING ADVANTAGE
Japan
10/12/2001
Registered
101697
AMEI Technologies, Inc.
MIOT
Lebanon
4/6/2005
Registered
913396
AMEI Technologies, Inc.
BLADERUNNER
Mexico
12/13/2005
Registered
913397
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Mexico
12/12/2005
Registered
920317
AMEI Technologies, Inc.
GOTFRIED PC.C.P & Design
Mexico
2/22/2006
Registered
909464
AMEI Technologies, Inc.
MIOT
Mexico
11/23/2005
Registered
753560
AMEI Technologies, Inc.
ORTHOTRAC
Mexico
6/28/2002
Registered
784276
AMEI Technologies, Inc.
ORTHOTRAC & Device
Mexico
3/24/2003
Registered
755668
AMEI Technologies, Inc.
STORM
Mexico
7/25/2002
Registered
726603
AMEI Technologies, Inc.
MIOT
New Zealand
10/21/2004
Registered
647685
AMEI Technologies, Inc.
ORTHOTRAC
New Zealand
5/2/2002
Registered
654028
AMEI Technologies, Inc.
ORTHOTRAC & Device
New Zealand
9/5/2002
Registered
215452
AMEI Technologies, Inc.
ORTHOTRAC
Norway
8/15/2002
Registered
217336
AMEI Technologies, Inc.
ORTHOTRAC & Device
Norway
1/23/2003
Registered
141850
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
Panama
4/19/2005
Registered
141636
AMEI Technologies, Inc.
MIOT
Panama
4/8/2015
Registered
246514
AMEI Technologies, Inc.
ORTHOTRAC
Paraguay
5/8/2002
Registered
255993
AMEI Technologies, Inc.
ORTHOTRAC & Device
Paraguay
4/9/2003
Registered
659808
AMEI Technologies, Inc.
BLADERUNNER
Republic of Korea (South)
4/24/2006
Registered
5432131
AMEI Technologies, Inc.
ORTHOTRAC
Republic of Korea (South)
3/14/2003
Registered
554995
AMEI Technologies, Inc.
ORTHOTRAC & Device
Republic of Korea (South)
7/30/2003
Registered

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

Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
56175
AMEI Technologies, Inc.
MIOT
Republic of Korea (South)
11/30/2005
Registered
1557943
AMEI Technologies, Inc.
PHYSIO-STIM
United Kingdom
11/3/1995
Registered
1557944
AMEI Technologies, Inc.
SPINAL-STIM
United Kingdom
12/1/1995
Registered
1981113
AMEI Technologies, Inc.
1-800-BONEFIX
US
6/18/1996
Registered
2265742
AMEI Technologies, Inc.
CERVICAL-STIM
US
7/27/1999
Registered
3103333
AMEI Technologies, Inc.
CONTOURS VPS
US
6/13/2006
Registered
3094296
AMEI Technologies, Inc.
EIGHT-PLATE GUIDED GROWTH SYSTEM & Design
US
5/16/2006
Registered
2592020
AMEI Technologies, Inc.
EZBRACE
US
7/9/2002
Registered
3090036
AMEI Technologies, Inc.
GOTFRIED PC.C.P & Design
US
5/9/2006
Registered
2991110
AMEI Technologies, Inc.
I ISKD & Design
US
9/6/2005
Registered
3029777
AMEI Technologies, Inc.
M2 MULTIPLANAR MINIRAIL & Design
US
12/13/2005
Registered
2574017
AMEI Technologies, Inc.
ORTHOTRAC
US
5/28/2002
Registered
2708888
AMEI Technologies, Inc.
ORTHOTRAC & Design
US
4/22/2003
Registered
2269876
AMEI Technologies, Inc.
OSTEO-TITE
US
8/10/1999
Registered
1701625
AMEI Technologies, Inc.
PHYSIO-STIM
US
7/21/1992
Registered
1384143
AMEI Technologies, Inc.
SPINAL-STIM
US
2/25/1986
Registered
2789136
AMEI Technologies, Inc.
THE HEALING ADVANTAGE
US
12/2/2003
Registered
2427678
AMEI Technologies, Inc.
BMD-STIM
US
2/6/2001
Registered
Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
2,750,593
Breg Inc.
PTO
US
8/12/2003
Registered
2,734,767
Breg Inc.
Breg
US
7/8/2003
Registered
2,692,824
Breg Inc.
B stylized letters
US
3/4/2003
Registered
2,692,823
Breg Inc.
B Breg
US
3/4/2003
Registered
2,393,538
Breg Inc.
THE TRADITION
US
10/10/2000
Registered
2,664,714
Breg Inc.
PAIN CARE
US
12/17/2002
Registered
2,445,909
Breg Inc.
POLAR CARE
US
4/24/2001
Registered
1,898,777
Breg Inc.
FLEX-MATE
US
6/13/1995
Registered
1,710,735
Breg Inc.
B Breg and design
US
8/25/1992
Registered
1,726,657
Breg Inc.
Design only
US
10/20/1992
Registered
1,712,650
Breg Inc.
BREG
US
9/1/1992
Registered
2,041,086
Breg Inc.
BREG
DE
7/23/1993
 
751,644
Breg Inc.
BREG
Mexico
11/18/2005
 
2,791,770
Breg Inc.
BREG
EC
   
1,720,605
Breg Inc.
BREG
Spain
 
Registered
649,826
Breg Inc.
BREG
Italy
 
Registered
2,041,086
Breg Inc.
BREG
Germany
 
Registered
94/432 165
Breg Inc.
BREG
France
 
Registered

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

3,052,822
Breg Inc.
BREG
Japan
 
Registered
VR006441994
Breg Inc.
BREG
Denmark
 
Registered
160,042
Breg Inc.
BREG
Norway
 
Registered
827,731,922
Breg Inc.
BREG
Brazil
8/3/2005
Registered
827,731,949
Breg Inc.
POLAR CARE
Brazil
8/3/2005
Registered
Registration/
Application
No.
Credit Party
Trademark
Jurisdiction
Registration/
Application
Date
Status
751,647
Breg Inc.
POLAR CARE
Mexico
11/18/2005
Registered
3,066,723
Breg Inc.
ORTHO SELECT
US
3/7/2006
Registered
3,050,423
Breg Inc.
FUSION
US
1/24/2006
Registered
3,050,899
Breg Inc.
FUSION and twin F design
US
1/24/2006
Registered
3,050,900
Breg Inc.
twin F design
US
1/24/2006
Registered
3,020,950
Breg Inc.
PAIN CARE
US
11/29/2005
Registered
3,012,237
Breg Inc.
T SCOPE
US
11/1/2005
Registered
2,900,945
Breg Inc.
NEUTRAL WEDGE
US
11/2/2004
Registered
2,855,229
Breg Inc.
ARTHOTAP
US
6/15/2004
Registered
2,796,013
Breg Inc.
AIRMESH
US
12/16/2003
Registered
2,775,794
Breg Inc.
X2K
US
10/21/2003
Registered
78/963,043
Breg Inc.
KOOL SLING
US
8/29/2006
Pending
78/959,137
Breg Inc.
KODIAK
US
8/23/2006
Pending
78/881,001
Breg Inc.
PAINDRAIN
US
5/10/2006
Pending
78/722,922
Blackstone Medical Inc.
Advent
US
9/29/2005
Pending
3091181
Blackstone Medical Inc.
Alloquent
US
5/9/2006
Active
3101182
Blackstone Medical Inc.
Ascent
US
6/6/2006
Active
2347454
Blackstone Medical Inc.
Blackstone
US
5/2/2000
Active
3078373
Blackstone Medical Inc.
Breakthrough Thinking
US
4/11/2006
Active
78/415,732
Blackstone Medical Inc.
Construx
US
5/10/2006
Pending
76/626,832
Blackstone Medical Inc.
Hallmark
US
1/4/2005
Pending
76/634,301
Blackstone Medical Inc.
Icon
US
3/25/2005
Pending
76/627,654
Blackstone Medical Inc.
Newbridge
US
1/12/2005
Pending
78/415,714
Blackstone Medical Inc.
Ngage
US
5/10/2004
Pending
78/932,408
Blackstone Medical Inc.
Origen DBM
US
7/18/2006
Pending
78/880,509
Blackstone Medical Inc.
Pillar
US
5/10/2006
Pending
78/880,515
Blackstone Medical Inc.
Proview
US
5/10/2006
Pending
78/415,658
Blackstone Medical Inc.
Reveal
US
   
78/935,508
Blackstone Medical Inc.
Reliant
US
7/18/2006
 
78/751,479
Blackstone Medical Inc.
Trinity and Design
US
11/10/2005
Pending
78/752,413
Blackstone Medical Inc.
Trinity
US
11/11/2005
Pending
76/625,481
Blackstone Medical Inc.
Unity
US
12/23/2004
Pending
76/635,940
Blackstone Medical Inc.
Unity 51
US
   

 
 

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

 
 
Schedule 3.19(a)
 
LOCATION OF REAL PROPERTY

 
1.
Leased Properties

 

 
a)
Street Address:
1720 Bray Central Drive, McKinney, TX 75069
   
State:
Texas
   
County:
Collin County
         
b)
Street Address:
2611 Commerce Way, Vista, CA 92081
   
State:
California
   
County:
San Diego County
         
c)
Street Address:
10115 Kincey Avenue, Suite 250,
     
Huntersville Park, Huntersville, NC 28078
   
State:
North Carolina
   
County:
Mecklenburg County
         
d)
Street Address:
90 Brookdale Drive, Springfield, MA 01104
   
State:
Massachusetts
   
County:
Hampden County
         
e)
Street Address:
1211 Hamburg Turnpike, Suite 214,
     
Wayne, NJ 07470
   
State:
New Jersey
   
County:
Passaic County

 
2.
Owned Properties

 
None.
 
 
 

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

 

Schedule 3.19(b)

LOCATION OF COLLATERAL

Address (including county)
Value of Collateral
 
10115 Kincey Avenue, Suite 250
Huntersville, NC 28078
Mecklenburg County
$121,917
1720 Bray Central Drive
McKinney, TX 75069
Collin County
$17,966,908
2611 Commerce Way
Vista, CA 92081
San Diego County
$13,485,000
90 Brookdale Drive
Springfield, MA 01104
Hampden County
$11,738,600
1211 Hamburg Turnpike, Suite 214
Wayne, NJ 07470
Passaic County
$279,087

 
 

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

 

Schedule 3.19(c)

CHIEF EXECUTIVE OFFICES

Credit Party
Jurisdiction of
Incorporation/
Organization
Chief
Executive
Office
Principal
Place of
Business
Tax
Identification
Number/Tax
Reference
Number
 
Organization
Identification
Number
Orthofix
International
N.V.
Netherlands
Antilles
10115 Kincey
Avenue, Suite
250,
Huntersville,
NC 28078
 
Mecklenburg
County
 
7 Abraham de
Veerstraat
 
Curacao,
Netherlands
Antilles
117.595.068
None
Colgate Medical Ltd
UK
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
 
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
610 67740
10890
01311455
Orthofix Holdings, Inc.
Delaware
10115 Kincey
Avenue, Suite
250,
Huntersville,
NC 28078
 
Mecklenburg
County
10115 Kincey
Avenue, Suite
250,
Huntersville,
NC 28078
 
Mecklenburg
County
 
52-2436054
3741422
Victory
Medical
Limited
UK
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
 
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
610 75400
20346
05594778
Swiftsure
Medical
Limited
UK
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
 
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
610 54745
13575
05594781

 
 
 

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

 
 
Credit Party
Jurisdiction of
Incorporation/
Organization
Chief
Executive
Office
Principal
Place of
Business
Tax
Identification
Number/Tax
Reference
Number
 
Organization
Identification
Number
   
7BZ
 
7BZ
 
   
Orthofix UK Ltd
UK
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
5 Burney
Court,
Cordwallis
Park,
Maidenhead,
Berks SL6
7BZ
 
610 17836
02273
05000721
Orthofix Inc.
Minnesota
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
 
75-2608036
8R-468
Breg Inc.
California
2611
Commerce
Way, Vista,
CA 92081
 
San Diego
County
 
2611
Commerce
Way, Vista,
CA 92081
 
San Diego
County
33-0361048
C1635882
Orthofix US LLC
Delaware
10115 Kincey
Avenue, Suite
250,
Huntersville,
NC 28078
 
Mecklenburg
County
 
10115 Kincey
Avenue, Suite
250,
Huntersville,
NC 28078
 
Mecklenburg
County
52-2436057
3742359
AMEI
Technologies Inc.
Delaware
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
 
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
 
51-0349533
3978372
Osteogenics Inc.
Delaware
1720 Bray
Central Drive,
McKinney, TX
75069
 
1720 Bray
Central Drive,
McKinney, TX
75069
75-2571587
2440883

 
 
 

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

 

Credit Party
Jurisdiction of
Incorporation/
Organization
Chief
Executive
Office
Principal
Place of
Business
Tax
Identification
Number/Tax
Reference
Number
 
Organization
Identification
Number
   
Collin County
 
Collin County
 
   
Neomedics,
Inc.
New Jersey
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
 
1720 Bray
Central Drive,
McKinney, TX
75069
 
Collin County
 
22-3370043
0100624244
Blackstone
Medical, Inc.
Massachusetts
90 Brookdale
Drive,
Springfield,
MA 01104
 
Hampden
County
 
 
1211
Hamburg
Turnpike,
Suite 214,
Wayne, New
Jersey 07470
 
Passaic
County
 
90 Brookdale
Drive,
Springfield,
MA 01104
04-3290472
None

 
 
 

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

 
 
Schedule 3.19(d)
 
MORTGAGED PROPERTIES

1.
Leased Properties

 
a)
Street Address:
1720 Bray Central Drive, McKinney, TX 75069

 
State:
Texas

 
County:
Collin County

 
b)
Street Address:
2611 Commerce Way, Vista, CA 92081

 
State:
California

 
County:
San Diego County

 
 
c)
Street Address:
90 Brookdale Drive, Springfield, MA 01104

 
State:
Massachusetts

 
County:
Hampden County

2.
Owned Properties .

 
None

 
 

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

 
 
Schedule 3.21

LABOR MATTERS

1.
The employees of Orthofix International N.V.'s Orthofix Srl subsidiary are
represented for the purposes of collective bargaining by a labor organization as
mandated by Italian law.

 
 

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

 
 
Schedule 3.29
 
MATERIAL CONTRACTS

 
1.
Orthofix International N.V.

 
 
a)
Employment Agreement, dated November 20, 2003, between Orthofix International
N.V. and Bradley R. Mason, filed with the SEC in an 8-K dated November 26, 2003.

 
 
b)
Employment Agreement, dated April 15, 2005, between Orthofix International N.V.
and Charles W. Federico, filed with the SEC in an 8-K dated April 18, 2005.

 
 
c)
Employment Agreement, as amended, dated December 29, 2005, between Orthofix
International N.V. and Charles W. Federico, filed with the SEC in an 8-K dated
December 30, 2005.

 
 
d)
Employment Agreement, dated July 13, 2006, between the Company and Thomas Hein,
filed with the SEC in an 8-K dated July 18, 2006.

 
 
e)
Employment Agreement, dated July 13, 2006, between Orthofix Inc. and Alan W.
Milinazzo, filed with the SEC in an 8-K dated July 18, 2006.

 
 
f)
Employment Agreement, dated July 13, 2006, between Orthofix Inc. and Michael M.
Finegan, filed with the SEC in an 8-K dated July 18, 2006.

 
 
g)
Employment Agreement, dated July 13, 2006, between Orthofix Inc. and Raymond C.
Kolls, filed with the SEC in an 8-K dated July 18, 2006.

 
2.
Blackstone Medical, Inc.

 
 
a)
Distribution and Supply Agreement by and between Blackstone and Osiris
Therapeutics, Inc. dated November __, 2005. Section 11.2 provides that
Blackstone may transfer the agreement in connection with a merger with the prior
written consent of Osiris, such consent not to be unreasonably withheld.1

 
 
b)
Agreement between Blackstone and Invibio, Inc. dated as of October 23, 2003.
Section 4.3 provides that neither party may assign a right or obligation under
the agreement without first obtaining the other party's written consent.

______________________
1Note: Document executed, but not dated.

 
 

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

 
 
 
c)
License Agreement dated December 2, 2003 by and between Blackstone and Cross
Medical Products, Inc. Section 6.1 provides that the parties may assign any or
all of their rights or delegate any or all of their duties under the agreement
only upon the prior written consent of the other party, but such consent shall
not be unreasonably withheld in the event a party wishes to assign the agreement
to a purchaser of all or substantially all of its assets relating to the '237
Patent, the '555 Patent or the Licensed Product.

 
3.
Breg Inc.

 
 
a)
Extension of Lease between Breg, Inc. and North County Industrial Park, LP
(Vista).

 
 
b)
Lease Agreement between Breg Mexico S. de R.L de C.V. and Industrias Asociadas
Maquiladoras, S.A. de C.V. (Mexicali).

 
 
c)
GPO Agreements; Amerinet; Consorta; Novation; Healthtrust; OPGA; DOD and VA
Government Contracts; and Hanger.

 
4.
Tax Structure Documents (as defined in the Credit Agreement).

 
 

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

 

Schedule 3.30
 
INSURANCE

 
1.
Orthofix Holdings, Inc. and its Domestic Subsidiaries

Type of Insurance
Carrier
Policy Number
Amount
Expiration Date
Product Liability
Medmarc Casualty Insurance Company
06NC380002
$10,000,000 Per Occurrence $10,000,000 Aggregate $1,000,000 Separate Defense
Cost Limit $250,000 per Occurrence SIR $1,000,000 Aggregate SIR
04/01/07
Excess Product Liability
Lexington Insurance Company
715-75-77
$5,000,000 Per Occurrence $5,000,000 Aggregate
04/01/07
General Liability
Travelers Property Casualty Company of America
Y-630- 6108A144-TIL-06
$2,000,000 General Aggregate $1,000,000 Each Occurrence Limit $1,000,000
Personal/Advertising Injury $300,000 Fire Damage Legal Liability $10,000 Medical
Payments Per Person Product Liability Excluded
04/01/07
Property including Equipment Breakdown
Travelers Property Casualty Company of America
Y-630- 6108A144-TIL-06
$6,000,000 Real Property $25,854,000 Business Personal Property $100,145,000
Business Interruption $10,500,000 Inland Marine $25,000 PD Deductible $50,000 PD
Deductible Flood/EQ 5%/$250,000 min. CA EQ Deductible 72 Hr BI Deductible
04/01/07
Inland Marine
Travelers Property Casualty Company of America
Y-630- 6108A144-TIL-06
$10,500,000 Inland Marine Limit $25,000 Deductible $50,000 Deductible Flood/EQ
04/01/07
Automobile Liability & Physical Damage
Travelers Property Casualty Company of America
Y-810- 6108A132-TIL-06
$1,000,000 BI & PD Combined Single Limit
04/01/07

 

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

 
Workers Compensation
The Travelers Indemnity Company of Connecticut
YEUB-6117A90-3-06
Statutory WC Limits $1,000,000 Employers Liability Limits
04/01/07
Foreign Liability
St. Paul Fire & Marine Insurance Company
GB06800892
$1,000,000 Each Occurrence $2,000,000 Aggregate Product Liability Excluded
04/01/07
Umbrella
National Union Fire Insurance Company of Pittsburgh, PA
BE6565109
$25,000,000 Per Occurrence $25,000,000 Aggregate $10,000 SIR Product Liability
Excluded
04/01/07
California Earthquake
Glencoe Insurance Company
305506XF-1
$3,000,000 excess of Travelers $2,000,000 5% deductible per location (min.
$500,0000)
04/01/07
Marine Ocean Cargo
Continental Insurance Company
OC0243831
$1,000,000 Any One Conveyance $1,000 Deductible
04/01/07

 
2.
Orthofix International N.V. and its Subsidiaries

 
Type of Insurance
Carrier
Policy Number
Amount
Expiration Date
Crime
St. Paul Fire & Marine Insurance Company
429CF0600
$3,000,000 limit $25,000 Deductible
09/07/07
Employment Practices Liability
St. Paul Mercury Insurance Company
EC09000870
$5,000,000 limit $100,000 Deductible
09/07/07
Kidnap & Ransom
St. Paul Fire & Marine Insurance Company
429CF0601
$3,000,000 per Insured Event
09/07/07
Fiduciary Liability
Federal Insurance Company
8139-0905
$3,000,000 Each Claim $3,000,000 Each policy period $10,000 Retention
09/07/07
Directors & Officers
St. Paul Mercury Insurance Company
EC09000869
$15,000,000 Limit $250,000 Retention $500,000 Retention SEC Claims
09/07/07

 

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

Excess Directors & Officers
Federal Insurance Company
6803-3515
$10,000,000 limit excess of $15,000,000
09/07/07

3.
Blackstone Medical, Inc.

Type of Insurance
Carrier
Policy Number
Amount
Expiration Date
Product Liability
Noetic Specialty Insurance Co.
NO6MA380001
Aggregate: $10,000,000 Each Occurrence: $10,000,000
01/06/07

 

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

 
Schedule 4.1-1
 
[FORM OF]
SECRETARY'S CERTIFICATE

 
 
Pursuant to Section 4.1(b) of the Credit Agreement dated as of September 22,
2006 (the "Credit Agreement") by and among Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), the Guarantors from time to time party thereto,
the Lenders from time to time party thereto and Wachovia Bank, National
Association, as Administrative Agent (the "Administrative Agent"), the
undersigned _______of [CREDIT PARTY] (the "Company") hereby certifies as
follows:
 
1.           Attached hereto as Exhibit A is a true and complete copy of the
[articles of incorporation] [certificate of formation] [certificate of limited
partnership] of the Company and all amendments thereto as in effect on the date
hereof certified as a recent date by the appropriate Governmental Authority of
the state of [incorporation] [organization] of the Company.
 
2.           Attached hereto as Exhibit B is a true and complete copy of the
[bylaws] [operating agreement] [partnership agreement] of the Company and all
amendments thereto as in effect on the date hereof.
 
3.           Attached hereto as Exhibit C is a true and complete copy of
resolutions duly adopted by the [board of directors] [members] [managers]
[partners] of the Company on ________ _____.  Such resolutions have not in any
way been rescinded or modified and have been in full force and effect since
their adoption to and including the date hereof, and such resolutions are the
only corporate proceedings of the Company now in force relating to or affecting
the matters referred to therein.
 
4.           Attached hereto as Exhibit D is a true and complete copy of the
certificates of good standing, existence or its equivalent of the Company, each
certified as a recent date by the appropriate Governmental Authority of the
state of [incorporation] [organization] of the Company or any other state in
which the failure to so qualify and be in good standing could reasonably be
expected to have a Material Adverse Effect.
 
5.           The following persons are now the duly elected and qualified
[officers] [directors] of the Company, [holding the offices indicated next to
the names below on the date hereof,] and the signatures appearing opposite the
names of the [officers] [directors] below are their true and genuine signatures,
and each of such [officers] [directors] is duly authorized to execute and
deliver on behalf of the Company, the Credit Agreement, the Notes and the other
Credit Documents to be issued pursuant thereto:
 

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

 
Name
[Office] [Director]
Signature
                 

 
This Certificate may, upon execution, be delivered by facsimile or electronic
mail, which shall be deemed for all purposes to be an original signature.
 
Capitalized terms defined in the Credit Agreement shall have the same meanings
when used herein.
 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 
IN WITNESS WHEREOF, the undersigned hereunder subscribes his/her name effective
as of the __ day of _______, ___.
  
 

         
Name:
     
Title:
   

 
I, ___________________________, the ____________________________ of the Company,
hereby certify that ___________________________________ is  the duly elected
and qualified _____________________________ of the Company and that his/her true
and genuine signature is set forth above.

         
Name:
     
Title:
   

 
 

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

 
Schedule 4.1-2
 
[FORM OF]
SOLVENCY CERTIFICATE

 
The undersigned, Thomas Hein, Chief Financial Officer of ORTHOFIX INTERNATIONAL,
N.V., a Netherlands Antilles corporation (the "Company"), is familiar with the
properties, businesses, assets and liabilities of the Credit Parties and is duly
authorized to execute this certificate (this "Solvency Certificate") on behalf
of the Credit Parties.
 
This Solvency Certificate is delivered pursuant to Section 4.1(j) of that
certain Credit Agreement dated as of September 22, 2006 (the "Credit Agreement")
by and among Orthofix Holdings, Inc., a Delaware corporation (the "Borrower"),
the Guarantors from time to time party thereto, the Lenders from time to time
party thereto and Wachovia Bank, National Association, as Administrative Agent
(the "Administrative Agent"). All capitalized terms used and not defined herein
have the meanings stated in the Credit Agreement.
 
1.           The undersigned certifies that he has made such investigation and
inquiries as to the financial condition of the Credit Parties as the undersigned
deems necessary and prudent for the purpose of providing this Solvency
Certificate. The undersigned acknowledges that the Administrative Agent and the
Lenders are relying on the truth and accuracy of this Solvency Certificate in
connection with the making of Loans and other Extensions of Credit under the
Credit Agreement.
 
2.           The undersigned certifies that the financial information,
projections and assumptions which underlie and form the basis for the
representations made in this Solvency Certificate were reasonable when made and
were made in good faith and continue to be reasonable as of the date hereof.
 
BASED ON THE FOREGOING, the undersigned certifies that after giving effect to
the Acquisition, the Loans and other Extensions of Credit made on the Closing
Date:
 
A.        On the date hereof, each of the Credit Parties is able to pay its
debts and other liabilities, contingent obligations and other commitments as
they become due.
 
B.        Each of the Credit Parties does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay as such debts
and liabilities become due.

 
 

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

 
 
C.            On the date hereof, each of the Credit Parties is not engaged in
any business or transaction, and is not about to engage in any business or
transaction, for which the assets of such Credit Party would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which the Credit Parties and their Subsidiaries are
engaged or are to engage.
 
D.            On the date hereof, the present fair saleable value of the
consolidated assets of the Credit Parties and their Subsidiaries, measured on  a
going concern basis, exceeds all probable liabilities of the Credit Parties and
their Subsidiaries, on a consolidated basis, including contingent liabilities
incurred pursuant to the Credit Agreement.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 
 

 
ORTHOFIX INTERNATIONAL, N.V.,
   
a Netherlands Antilles corporation
               
By:
     
Name:
     
Title:
   

 
 

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

 

Schedule 4.1-3
 
[FORM OF]
LENDER CONSENT

 
TO:
Wachovia Bank, National Association, as Administrative Agent

 
RE:
Credit Agreement dated as of September 22, 2006 (the "Credit Agreement") by and
among Orthofix Holdings, Inc., a Delaware corporation (the "Borrower"), the
Guarantors from time to time party thereto, the Lenders from time to time party
thereto (the "Lenders") and Wachovia Bank, National Association, as
Administrative Agent (the "Administrative Agent").

 
DATE:
September 22, 2006

 

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

 
This Consent is given pursuant to the Credit Agreement referenced above. The
undersigned hereby (i) approves the Credit Agreement, (ii) authorizes and
appoints the Administrative Agent as its agent in accordance with the terms of
Article VIII of the Credit Agreement and (iii) authorizes the Administrative
Agent to execute and deliver the Credit Agreement on its behalf and, by its
execution below, the undersigned agrees to be bound as a Lender by the terms and
conditions of the Credit Agreement as if the undersigned had directly executed
and delivered a signature page to the Credit Agreement. By becoming a Lender
under the Credit Agreement pursuant to this Consent, the undersigned agrees to
make Extensions of Credit to the Borrower up to the amount of its Commitments in
accordance with the terms of the Credit Agreement. Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Credit
Agreement.
 
Delivery of this Consent by telecopy shall be effective as an original.

 
A duly authorized officer of the undersigned has executed this Consent as of the
_____ day of   ______,  ___.

       ,    
as a Lender
                         
By:
       
Name:
       
Title:
     

 
 

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

 
 
Schedule 5.10
 
[FORM OF]
JOINDER AGREEMENT

 
THIS   JOINDER   AGREEMENT   (the   "Agreement"),   dated   as   of __________,
_____, is by and between _______________, a _____________ (the "New Domestic
Subsidiary"), and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as
Administrative Agent under that certain Credit Agreement dated as of September
22, 2006 (as amended, restated or otherwise modified prior to the date hereof,
the "Credit Agreement") by and among Orthofix Holdings, Inc., a Delaware
corporation (the "Borrower"), the Guarantors from time to time party thereto,
the Lenders from time to time party thereto and Wachovia Bank, National
Association, as Administrative Agent (the "Administrative Agent"). All of the
defined terms in the Credit Agreement are incorporated herein by reference.
 
The New Domestic Subsidiary is an Additional Credit Party, and, consequently,
the Credit Parties are required by Section 5.10 of the Credit Agreement to cause
the New Domestic Subsidiary to become a "Guarantor" thereunder.
 
Accordingly, the New Domestic Subsidiary and the Borrower hereby agree as
follows with the Administrative Agent, for the benefit of the Lenders:
 
1.    The New Domestic Subsidiary hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the New Domestic Subsidiary will be deemed
to be a party to and a "Guarantor" under the Credit Agreement and shall have all
of the obligations of a Guarantor thereunder as if it had executed the Credit
Agreement. The New Domestic Subsidiary hereby ratifies, as of the date hereof,
and agrees to be bound by, all of the terms, provisions and conditions contained
in the applicable Credit Documents, including without limitation (a) all of the
representations and warranties set forth in Article III of the Credit Agreement
and (b) all of the affirmative and negative covenants set forth in Articles V
and VI of the Credit Agreement. Without limiting the generality of the foregoing
terms of this Paragraph 1, the New Domestic Subsidiary hereby guarantees,
jointly and severally together with the other Guarantors, the prompt payment of
the Credit Party Obligations in accordance with Article X of the Credit
Agreement.
 
2.    The New Domestic Subsidiary hereby acknowledges, agrees and confirms that,
by its execution of this Agreement, the New Domestic Subsidiary will be deemed
to be a party to the Security Agreement, and shall have all the rights and
obligations of an "Obligor" (as such term is defined in the Security Agreement)
thereunder as if it had executed the Security Agreement.   The New Domestic
Subsidiary hereby agrees to be bound by, all of the terms, provisions and
conditions contained in the Security Agreement.   Without limiting the
generality of the foregoing terms of this Paragraph 2, the New Domestic
Subsidiary hereby grants to the Administrative Agent, for the benefit of the
Lenders, a continuing security interest in, and a right of set off, to the
extent applicable, against any and all right, title and interest of the New
Domestic Subsidiary in and to the Collateral (as such term is defined in Section
2 of the Security Agreement) of the New Domestic Subsidiary.
 

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

 
3.           The New Domestic Subsidiary hereby acknowledges, agrees and
confirms that, by its execution of this Agreement, the New Domestic Subsidiary
will be deemed to be a party to the Pledge Agreement, and shall have all the
rights and obligations of a "Pledgor" thereunder as if it had executed the
Pledge Agreement. The New Domestic Subsidiary hereby agrees to be bound by, all
the terms, provisions and conditions contained in the Pledge Agreement. Without
limiting the generality of the foregoing terms of this Paragraph 3, the New
Domestic Subsidiary hereby pledges and assigns to the Administrative Agent, for
the benefit of the Lenders, and grants to the Administrative Agent, for the
benefit of the Lenders, a continuing security interest in any and all right,
title and interest of the New Domestic Subsidiary in and to Pledged Capital
Stock (as such term is defined in Section 2 of the Pledge Agreement) and the
other Pledged Collateral (as such term is defined in Section 2 of the Pledge
Agreement).
 
4.           The New Domestic Subsidiary acknowledges and confirms that it has
received a copy of the Credit Agreement and the schedules and exhibits thereto
and each Security Document and the schedules and exhibits thereto. The schedules
to the Credit Agreement and the Security Documents are hereby supplemented (to
the extent permitted under the Credit Agreement or Security Documents) to
include the information shown on the attached Schedule A.
 
5.           The Borrower confirms that the Credit Agreement is and, upon the
New Domestic Subsidiary becoming a Guarantor, shall continue to be, in full
force and effect. The parties hereto confirm and agree that immediately upon the
New Domestic Subsidiary becoming a Guarantor under the Credit Agreement, the
term "Credit Party Obligations," as used in the Credit Agreement, shall include
all obligations of the New Domestic Subsidiary under the Credit Agreement and
under each other Credit Document.
 
6.           Each of the Borrower and the New Domestic Subsidiary agrees that at
any time and from time to time, upon the written request of the Administrative
Agent, it will execute and deliver such further documents and do such further
acts as the Administrative Agent may reasonably request in accordance with the
terms and conditions of the Credit Agreement in order to effect the purposes of
this Agreement.

 
 

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

 
 
7.           This Agreement (a) may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute one contract and (b) may, upon execution, be delivered by
facsimile or electronic mail, which shall be deemed for all purposes to be an
original signature.
 
8.           This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York. The terms of Sections 9.14
and 9.17 of the Credit Agreement are incorporated herein by reference, mutatis
mutandis, and the parties hereto agree to such terms.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 
 

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

 

 
IN WITNESS WHEREOF, each of the Borrower and the New Domestic 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.

BORROWER:
ORTHOFIX HOLDINGS, INC.,
   
a Delaware corporation
                   
By:
     
Name: 
     
Title:
                   
NEW DOMESTIC SUBSIDIARY:
[NEW DOMESTIC SUBSIDIARY]
                   
By:
     
Name: 
     
Title:
   

 
 
Acknowledged and accepted:
 
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent

By:
   
Name: 
   
Title:
   

 
 

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

 

SCHEDULE A
to
Joinder Agreement

 
Schedules to Credit Agreement

 
Schedules to Security Agreement

 
 
Schedules to Pledge Agreement

 
 

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

 

Schedule 6.(b)
 
INDEBTEDNESS
 
1.
Orthofix International N.V.

 
 
a)
Letter of Credit issued by Bank of America in favor of to Orthofix de Centro
America S.A in the amount of $243,185.35, cash collateralized by an Orthofix
International N.V. certificate of deposit with Bank of America. The letter of
credit expires on July 31, 2007.

 
 
b)
Guarantee by Orthofix International N.V. of the payment obligation of Orthofix
Inc. to Michael M. Finegan pursuant to that certain Employment Agreement, dated
July 13, 2006, between Orthofix Inc. and Michael M. Finegan.

 
 
c)
Guarantee by Orthofix International N.V. of the payment obligation of Orthofix
Inc. to Raymond C. Kolls pursuant to that certain Employment Agreement, dated
July 13, 2006, between Orthofix Inc. and Raymond C. Kolls.

 
 
d)
Guarantee by Orthofix International N.V. of the payment obligation of Orthofix
Inc. to Thomas Hein pursuant to that certain Employment Agreement, dated July
13, 2006, between Orthofix Inc. and Thomas Hein.

 
 
e)
Guarantee by Orthofix International N.V. of the payment obligation of Orthofix
Inc. to Alan W. Milinazzo pursuant to that certain Employment Agreement, dated
July 13, 2006, between Orthofix Inc. and Alan W. Milinazzo.

 
2.
Orthofix Holdings. Inc.

 
 
a)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $35,561,349, dated as of December 29, 2003.

 
 
b)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix US LLC in the
principal amount of USD $129,000,000, dated as of December 30, 2003.

 
 
c)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $15,000,000, dated as of September 24, 2004.

 

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

 
 
d)
Note issued by Ortho-fix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $7,000,000, dated as of December 16, 2004.

 
 
e)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $6,400,000, dated as of December 22, 2004.

 
 
f)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $3,000,000, dated as of September 19, 2005.

 
 
g)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $3,300,000, dated as of June 16, 2005.

 
 
h)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $5,500,000, dated as of September 22, 2005.

 
 
i)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $6,500,000, dated as of December 15, 2005.

 
 
j)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $3,500,000, dated as of March 17, 2006.

 
 
k)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $9,000,000, dated as of March 22, 2006.

 
 
l)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the amount
of USD $4,050,000, dated as of June 22, 2006.

 
 
m)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $900,000, dated as of September 14, 2006.

 
 
n)
Note issued by Orthofix Holdings Inc. in favor of Blackstone Medical, Inc. in
the amount of USD $333,000,000, dated as of September 22, 2006.

 
3.
Orthofix Inc.

 
 
a)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $5,000,000, dated as of April 30, 1996.

 
 
b)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $5,000,000, dated as of September 30, 1997.

 
 

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

 
 
 
c)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $150,000,000, dated as of October 31, 1997.

 
 
d)
Note issued by Orthofix Inc. in favor of Osteogenics Inc. in the principal
amount of USD $1,000,000, dated as of January 21, 2000.

 
4.
Breg Inc.

 
 
a)
Note issued by Breg Inc. in favor of Orthofix Holdings, Inc. in the principal
amount of USD $125,170,148.14, dated as of December 30, 2003.

 
 
b)
Breg Inc. is a guarantor of Breg Mexico's lease agreement for the facility in
Mexicali, Mexico.

 
5.
AMEI Technologies Inc.

 
 
a)
Note issued by AMEI Technologies Inc. in favor of Osteogenics Inc. in the
principal amount of USD $20,000,000, dated May 6, 1998.

 
6.
Orthofix SRL/DMO

 
 
a)
Available line of credit established and issued collectively by Unicredit BABK,
Banco Popolare di Verona and Banco of Brescia, in favor of Orthofix SRL/DMO, in
a maximum principal amount at any time outstanding of €6,800,000. This line of
credit is renewed each April.

 
7.
Colgate Medical Ltd

 
 
a)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $11,779,217.08, dated as of December 27, 2004.

 
 
b)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $5,000,000, dated as of September 26, 2005.

 
 
c)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $4,700,000, dated as of December 22, 2005.

 
 
d)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $10,600,000, dated as of March 29, 2006.

 
 

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

 
 
 
e)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $10,000,000, dated as of September 27, 2004.

 
 
f)
Note issued by Colgate Medical Ltd in favor of Orthofix International N.V. in
the principal amount of USD $4,725,000 dated as of June 16, 2005.

 
8.
Blackstone Medical, Inc.

 
 
a)
Demand Convertible Promissory Note dated January 24, 2003 in principal amount of
USD $215,000 made by Blackstone Medical, Inc. in favor of Michael W. Lyons.1

 
 
b)
Demand Convertible Promissory Note dated January 24, 2003 in principal amount of
USD $215,000 made by Blackstone Medical, Inc. in favor of Matthew V. Lyons.1

 
 
c)
Demand Convertible Promissory Note dated January 24, 2003 in principal amount of
USD $215,000 made by Blackstone Medical, Inc. in favor of William G. Lyons III.1

 
 
d)
Master Lease Finance Agreement dated as of September 28, 2004 by and between
Banknorth Leasing Corp. and Blackstone Medical, Inc. and schedules thereto.2

 
 
e)
Lease dated January 23, 2003 by and between Banknorth Leasing Corp. and
Blackstone Medical, Inc.2

 
 
f)
Lease dated April 4, 2003 by and between Banknorth Leasing Corp. and Blackstone
Medical, Inc.2

 
 
________________________

1 Expected to be converted into common stock immediately prior to the Effective
Time of the Orthofix-Blackstone merger.
2 This capital lease is expected to be paid off immediately prior to the
Effective Time of the Orthofix-Blackstone merger.

 
 

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

 
 
Schedule 6.4(a)
 
PERMITTED ASSET SALES
 
 
1.
1,500,000 shares of Innovative Spinal Technologies, owned by Orthofix Inc.

 
2.
1,500,000 shares of OPED AG, owned by Orthofix International N.V.

 
3.
3,470,000 shares of OrthoRx, owned by Orthofix International N.V.

 
 

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

 
 
Schedule 6.5
 
INVESTMENTS

 
 
1.
Orthofix International N.V.

 
 
a)
Investment in Innovative Spinal Technologies in the amount of USD $1,500,000.

 
 
b)
Investment in OPED AG in the amount of USD $2,500,000.

 
 
c)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $35,561,349, dated as of December 29, 2003.

 
 
d)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $6,400,000, dated as of December 22, 2004.

 
 
e)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $3,300,000, dated as of June 16, 2005.

 
 
f)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $5,500,000, dated as of September 22, 2005.

 
 
g)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix International N.V.
in the principal amount of USD $3,500,000, dated as of March 17, 2006.

 
 
i)
Note issued by Colgate Medical Ltd in favor of Orthofix International N.V. in
the principal amount of USD $4,725,000 dated June 16, 2005.

 
2.
Orthofix Holdings, Inc.

 
 
a)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $5,000,000, dated as of September 26, 2005.

 
 
b)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $4,700,000, dated as of December 22, 2005.

 
 

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

 
 
 
c)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $10,600,000, dated as of March 29, 2006.

 
 
d)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $11,779,217.08, dated as of December 27, 2004.

 
 
e)
Note issued by Colgate Medical Ltd in favor of Orthofix Holdings, Inc. in the
principal amount of USD $10,000,000, dated as of September 27, 2004.

 
 
f)
Note issued by Breg Inc. in favor of Orthofix Holdings, Inc. in the principal
amount of USD $125,170,148.14, dated as of December 30, 2003.

 
3.
Orthofix US LLC

 
 
a)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix US LLC in the
principal amount of USD $129,000,000, dated as of December 30, 2003.

 
4.
Orthofix Inc.

 
 
a)
Investment in Bio Wave in the amount of USD $500,000.

 
 
b)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $15,000,000, dated as of September 24, 2004.

 
 
c)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $7,000,000, dated as of December 16, 2004.

 
 
d)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $3,000,000, dated as of September 19, 2005.

 
 
e)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $6,500,000, dated as of December 15, 2005.

 
 
f)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $9,000,000, dated March 22, 2006.

 
 
g)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the
principal amount of USD $900,000, dated as of September 14, 2006.

 
 
h)
Note issued by Orthofix Holdings, Inc. in favor of Orthofix Inc. in the amount
of USD $4,050,000, dated as of June 22, 2006.

 

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

 
5.
Breg. Inc.

 
 
a)
Investment in Orthospot in the amount of USD $531,831.

 
6.
AMEI Technologies Inc.

 
 
a)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $5,000,000, dated as of April 30, 1996.

 
 
b)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $5,000,000, dated as of September 30, 1997.

 
 
c)
Note issued by Orthofix Inc. in favor of AMEI Technologies Inc. in the principal
amount of USD $150,000,000, dated as of October 31, 1997.

 
7.
Osteogenics Inc.

 
 
a)
Note issued by AMEI Technologies Inc. in favor of Osteogenics Inc. in the
principal amount of USD $20,000,000, dated May 6, 1998.

 
 
b)
Note issued by Orthofix Inc. in favor of Osteogenics Inc. in the principal
amount of USD $1,000,000, dated as of January 21, 2000.

 
8.
Blackstone Medical, Inc.

 
 
a)
Note issued by Orthofix Holdings, Inc. in favor of Blackstone Medical, Inc. in
the amount of USD $333,000,000, dated as of September 22, 2006.

 
 

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

 
 
Schedule 6.13
 
ACCOUNTS

1.
Orthofix International N.V.

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

 
b)
Bank:
Bank of America

 
Type of Account:
Investment

 
c)
Bank:
Bank of America

 
Type of Account:
Checking

 
d)
Bank:
Bank of America

 
Type of Account:
CD - Costa Rica

2.
Orthofix Holdings, Inc.

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

3.
Victory Medical Limited

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

4.
Orthofix Inc.

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

 
b)
Bank:
Wells Fargo

 
Type of Account:
Operating

 

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

 
 
c)
Bank:
Bank of America

 
Type of Account:
Checking

5.
Breg Inc.

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

6.
Orthofix US LLC

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

7.
AMEI Technologies Inc.

 
a)
Bank:
Wilmington Trust

 
Type of Account:
Checking

 
b)
Bank:
Wilmington Trust

 
Type of Account:
Investment

8.
Colgate Medical Ltd

 
c)
Bank:
Bank of America

 
Type of Account:
Operating

9.
Swiftsure Medical Limited

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

10. 
Orthofix UK Ltd

 
a)
Bank:
Bank of America

 
Type of Account:
Operating

 
b)
Bank:
Bank of America

 
Type of Account:
Investment

 

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

 
11.
Blackstone Medical, Inc.

 
a)
Bank of America account to be opened promptly following closing.

 
 

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

 
 
Schedule 9.6(c)
 
ASSIGNMENT AGREEMENT

 
This Assignment Agreement (the "Assignment Agreement") is dated as of the
Effective Date set forth below and is entered into by and between [the] [each]
Assignor identified in item 1 below ([the] [each, an] "Assignor") and [the]
[each] Assignee identified in item 2 below ([the][each, an] "Assignee"). [It is
understood and agreed that the rights and obligations of [the Assignors] [the
Assignees] hereunder are several and not joint.]1 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] [each] 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 Agreement as
if set forth herein in full.

 
For an agreed consideration, [the] [each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor] [the respective
Assignors], 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][the
respective Assignors'] rights and obligations in [its capacity as a Lender]
[their respective capacities as Lenders] 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] [the respective Assignors]
under the respective facilities identified below (including without limitation
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)] [the respective Assignors (in their respective
capacities as Lenders)] 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, but not
limited to, 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 by [the] [any] Assignor to [the] [any] Assignee pursuant to clauses
(i) and (ii) above being referred to herein collectively as [the][an] "Assigned
Interest"). Each such sale and assignment is without recourse to [the] [any]
Assignor and, except as expressly provided in this Assignment Agreement, without
representation or warranty by [the] [any] Assignor.

1.                      Assignor
[s]:            _________________________________________
 
                                                           
_________________________________________

_____________________
1 Include bracketed language if there are either multiple Assignors or multiple
Assignees.

 
 

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

 
 
2.   Assignee[s]:                      _________________________________________
 
                                                           
_________________________________________

[for each Assignee, indicate [Affiliate] [Approved Fund] of [identify Lender]

3.
Borrower:
Orthofix Holdings, Inc., a Delaware corporation

4.
Administrative Agent:
Wachovia Bank, National Association, as the administrative agent under the
Credit Agreement.

5.
Credit Agreement:
The Credit Agreement dated as of September 22, 2006 among the Borrower, the
guarantors from time to time party thereto, the lenders and other financial
institutions from time to time party thereto, and Wachovia Bank, National
Association, as Administrative Agent.

 
6.
Assigned Interest[s]:

Assignor[s]
Assignee[s]
Facility Assigned
Aggregate Amount of Commitment/ Loans for all Lenders
Amount of Commitment/
Loans Assigned
Percentage Assigned of Commitment/ Loans
CUSIP Number
     
$
$
%
       
$
$
%
       
$
$
%
 

 
[7.
Trade Date:  _____________________________
]2

 
Effective Date:  _________________ __ , 20__.

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

_____________________________
2 To be completed if the Assignor(s) and the Assignee(s) intend that the minimum
assignment amount is to be determined as of the Trade Date.

 
 

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

 
 
The terms set forth in this Assignment Agreement are hereby agreed to

 
ASSIGNOR[S]
   
[NAME OF ASSIGNOR]
                   
By:
     
Title: 
   

 

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

 

 
ASSIGNEE[S]
   
[NAME OF ASSIGNEE]
                   
By:
     
Title: 
   

 

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

 

 
[Consented to and] Accepted:
         
WACHOVIA BANK, NATIONAL ASSOCIATION, as
   
Administrative Agent
                   
By:
     
Title:  
   

 

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

 

 
[Consented to:]
         
[NAME OF RELEVANT PARTY]
                   
By:
     
Title:  
   

 
 

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

 

ANNEX 1
 
 
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AGREEMENT
 
1. Representations and Warranties.
 
1.1 Assignor[s]. [The] [Each] Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of [the] [the relevant] Assigned Interest,
(ii) [the] [such] 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 Agreement 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 Credit Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Documents or any collateral thereunder, (iii) the
financial condition of the Company, any of its Subsidiaries or Affiliates or any
other Person obligated in respect of any Credit Document or (iv) the performance
or observance by the Company, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Credit Document.
 
1.2. Assignee[s]. [The] [Each] 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 Agreement and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all the requirements to be an assignee under Section 9.6 of the Credit
Agreement (subject to such consents, if any, as may be required under Section
9.6 of the Credit Agreement), (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] [the relevant] Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect to
decisions to acquire assets of the type represented by the Assigned Interest and
either it, or the person exercising discretion in making its decision to acquire
the Assigned Interest, is experienced in acquiring assets of such type, (v) it
has received a copy of the Credit Agreement, and has received or has been
accorded the opportunity to receive copies of the most recent financial
statements delivered pursuant to Section 5.1 thereof, as applicable, and such
other documents and information as it deems appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement and to purchase
[the] [such] Assigned Interest, and (vi) 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 Assignment Agreement and to purchase
[the] [such] Assigned Interest; and (b) agrees that (i) it will, independently
and without reliance on the Administrative Agent, [the] [any] 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 Credit Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit 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] [each] Assigned Interest (including
payments of principal, interest, fees and other amounts) to [the] [the relevant]
Assignor for amounts which have accrued to but excluding the Effective Date and
to [the] [the relevant] Assignee for amounts which have accrued from and after
the Effective Date.
 
3.       General Provisions. This Assignment Agreement shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns. This Assignment Agreement 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 Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment Agreement. This Assignment Agreement shall be governed by, and
construed in accordance with, the law of the State of New York.
 
 

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