Exhibit 10.2

CREDIT AND SECURITY AGREEMENT

THIS CREDIT AND SECURITY AGREEMENT (as the same may be amended, supplemented,
restated or otherwise modified from time to time, the “Agreement”) is dated as
of June 29, 2007 by and among (a) BARRIER THERAPEUTICS, INC., a Delaware
corporation, and any additional Borrower that may hereafter be added to this
Agreement (each individually as a “Borrower”, and collectively as “Borrowers”),
(b) MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial
Services Inc., individually as a Lender, and as Administrative Agent, and
(c) the financial institutions or other entities from time to time parties
hereto, each as a Lender.

RECITALS

Borrowers have requested that Lenders make available to Borrowers the financing
facilities as described herein. Lenders are willing to extend such credit to
Borrowers under the terms and conditions herein set forth.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the agreements, provisions
and covenants herein contained, Borrowers, Lenders and Administrative Agent
agree as follows:

ARTICLE 1 – DEFINITIONS

Section 1.1 Certain Defined Terms.

The following terms have the following meanings:

“Account Debtor” means “account debtor”, as defined in Article 9 of the UCC, and
any other obligor in respect of an Account.

“Accounts” means collectively any “account” (as defined in Article 9 of the
UCC), any accounts receivable (whether in the form of payments for services
rendered or goods sold, rents, license fees or otherwise), any “payment
intangibles” (as defined in Article 9 of the UCC), and IP Proceeds and all other
rights to payment and/or reimbursement of every kind and description, whether or
not earned by performance, and all proceeds of any of the foregoing.

“Administrative Agent” means Merrill Lynch, in its capacity as administrative
agent for the Lenders hereunder, as such capacity is established in, and subject
to the provisions of, Article 11, and the successors of Merrill Lynch in such
capacity.

“Affiliate” means with respect to any Person (a) any Person that directly or
indirectly controls such Person, (b) any Person which is controlled by or is
under common control with such controlling Person, and (c) each of such Person’s
(other than, with respect to any Lender, any Lender’s) officers or directors (or
Persons functioning in substantially similar roles) and the spouses, parents,
descendants and siblings of such officers, directors or other Persons. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote fifteen percent (15%) or more of
any class of voting securities of such Person or to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

“Anti-Terrorism Laws” means any Laws relating to terrorism or money laundering,
including Executive Order No. 13224 (effective September 24, 2001), the USA
PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, and the
Laws administered by OFAC.

“Approved Fund” means any (i) investment company, fund, trust, securitization
vehicle or conduit 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 or (ii) any Person (other than a natural
person) which

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temporarily warehouses loans for any Lender or any entity described in the
preceding clause (i) and that, with respect to each of the preceding clauses
(i) and (ii), is administered or managed by (a) a Lender, (b) an Affiliate of a
Lender or (c) a Person (other than a natural person) or an Affiliate of a Person
(other than a natural person) that administers or manages a Lender.

“Asset Disposition” means any sale, lease, license, transfer, assignment or
other consensual disposition by any Credit Party of any asset.

“Assignment Agreement” means an assignment agreement in form and substance
reasonably satisfactory to Administrative Agent.

“Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy”, as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto.

“Barrier Belgium” means Barrier Therapeutics, N.V., a Belgian stock corporation
and a wholly-owned Subsidiary of the Principal Borrower.

“Barrier Canada” means Barrier Therapeutics Canada, Inc., a Canadian corporation
and a wholly-owned Subsidiary of the Principal Borrower.

“Base Rate” means a rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to (a) the rate of interest which is identified and
normally published by Bloomberg Professional Service Page BBAM 1 as the offered
rate for loans in United States dollars for the period of one (1) month under
the caption British Bankers Association LIBOR Rates as of 11:00 a.m. (London
time) as adjusted on a daily basis and effective on the second full Business Day
after each such day (unless such date is not a Business Day, in which event the
next succeeding Business Day will be used); divided by (b) the sum of one minus
the daily average during the preceding month of the aggregate maximum reserve
requirement (expressed as a decimal) then imposed under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor thereto) for
“Eurocurrency Liabilities” (as defined therein). If Bloomberg Professional
Service (or another nationally-recognized rate reporting source acceptable to
Administrative Agent) no longer reports the LIBOR or Administrative Agent
determines in good faith that the rate so reported no longer accurately reflects
the rate available to Administrative Agent in the London Interbank Market or if
such index no longer exists or if Page BBAM 1 no longer exists or accurately
reflects the rate available to Administrative Agent in the London Interbank
Market, Administrative Agent may select a comparable replacement index or
replacement page, as the case may be.

“Base Rate Margin” means 3.0% per annum.

“Blocked Person” means any Person: (a) listed in the annex to, or is otherwise
subject to the provisions of, Executive Order No. 13224, (b) owned or controlled
by, or acting for or on behalf of, any Person that is listed in the annex to, or
is otherwise subject to the provisions of, Executive Order No. 13224, (c) with
which any Lender is prohibited from dealing or otherwise engaging in any
transaction by any Anti-Terrorism Law, (d) that commits, threatens or conspires
to commit or supports “terrorism” as defined in Executive Order No. 13224, or
(e) that is named a “specially designated national” or “blocked person” on the
most current list published by OFAC or other similar list or is named as a
“listed person” or “listed entity” on other lists made under any Anti-Terrorism
Law.

“Borrower” and “Borrowers” mean the entity(ies) described in the first paragraph
of this Agreement and each of their successors and permitted assigns.

“Borrower Representative” means Principal Borrower, in its capacity as Borrower
Representative pursuant to the provisions of Section 2.9, or any successor
Borrower Representative selected by Borrowers and approved by Administrative
Agent.

 

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“Borrowing Base” means:

(a) the product of (i) eighty five percent (85%) multiplied by (ii) the
aggregate net amount at such time of the Eligible Accounts; plus

(b) the lesser of (i) fifty percent (50%) multiplied by the Orderly Liquidation
Value of the Eligible Inventory or (ii) fifty percent (50%) multiplied by the
value of the Eligible Inventory, valued at the lower of first-in-first-out cost
or market cost, and after factoring in all rebates, discounts and other
incentives or rewards associated with the purchase of the applicable Inventory);
minus

(c) the amount of any reserves and/or adjustments provided for in this
Agreement.

“Borrowing Base Certificate” means a certificate, duly executed by a Responsible
Officer of Borrower Representative, appropriately completed and substantially in
the form of Exhibit C hereto.

“Business Day” means any day except a Saturday, Sunday or other day on which
either the New York Stock Exchange is closed, or on which commercial banks in
Chicago and New York City are authorized by law to close.

“CERCLA” means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980.

“Change in Control” means the occurrence of any of the following events: (a) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership, directly or indirectly, of, or shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or control over, voting
stock of Principal Borrower (or other securities convertible into such voting
stock) representing 40% or more of the combined voting power of all voting stock
of Principal Borrower or (b) Principal Borrower ceases to own, directly or
indirectly, 100% of the capital stock of any of its Subsidiaries (other than as
expressly set forth in Schedule 5.4); or (c) “Change of Control”, “Change in
Control”, or terms of similar import under any document or instrument governing
or relating to Debt of or equity in such Person. As used herein, “beneficial
ownership” shall have the meaning provided in Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934.

“Closing Date” means the date of this Agreement.

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

“Collateral” means all property, now existing or hereafter acquired, that is
mortgaged or pledged to, or purported to be subjected to a Lien in favor of,
Administrative Agent, for the benefit of Administrative Agent and Lenders,
pursuant to this Agreement and the Security Documents, including, without
limitation, all of the property described in Schedule 9.1 hereto.

“Commitment Annex” means Annex A to this Agreement.

“Commitment Expiry Date” means June 29, 2010.

“Compliance Certificate” means a certificate, duly executed by a Responsible
Officer of Borrower Representative, appropriately completed and substantially in
the form of Exhibit B hereto.

“Contingent Obligation” means, with respect to any Person, any direct or
indirect liability of such Person: (a) with respect to any Debt of another
Person (a “Third Party Obligation”) if the purpose or intent of such Person
incurring such liability, or the effect thereof, is to provide assurance to the
obligee of such Third Party Obligation that such Third Party Obligation will be
paid or discharged, or that any agreement relating thereto will be complied
with, or that any holder of such Third Party Obligation will be protected, in
whole or in part, against loss with respect thereto; (b) with respect to any
undrawn portion of any letter of credit issued for the account of such Person or
as to which such Person is otherwise liable for the reimbursement of any
drawing; (c) under any swap agreement

 

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or other derivative instrument, to the extent not yet due and payable; (d) to
make take-or-pay or similar payments if required regardless of nonperformance by
any other party or parties to an agreement; or (e) for any obligations of
another Person pursuant to any guaranty or pursuant to any agreement to
purchase, repurchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge of
such obligation or to preserve the solvency, financial condition or level of
income of another Person. The amount of any Contingent Obligation shall be equal
to the amount of the obligation so guarantied or otherwise supported or, if not
a fixed and determinable amount, the maximum amount so guarantied or otherwise
supported.

“Credit Exposure” means any period of time during which the Revolving Loan
Commitment is outstanding or any Reimbursement Obligation or other Obligation
remains unpaid or any Letter of Credit or Support Agreement remains outstanding;
provided, however, that no Credit Exposure shall be deemed to exist solely due
to the existence of contingent indemnification liability, absent the assertion
of a claim, or the known existence of a claim reasonably likely to be asserted,
with respect thereto.

“Credit Party” means any guarantor under a guaranty of the Obligations or any
part thereof, any Borrower and any other Person (other than Administrative
Agent, a Lender or a participant of a Lender), whether now existing or hereafter
acquired or formed, that becomes obligated as a borrower, guarantor, surety,
indemnitor, pledgor, assignor or other obligor under any Financing Document; and
“Credit Parties” means all such Persons, collectively.

“Debt” of a Person means at any date, without duplication, (a) all obligations
of such Person for borrowed money, (b) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising and paid on a timely basis and in the Ordinary
Course of Business, (d) all capital leases of such Person, (e) all
non-contingent obligations of such Person to reimburse any bank or other Person
in respect of amounts paid under a letter of credit, banker’s acceptance or
similar instrument, (f) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person,
(g) all obligations secured by a Lien on any asset of such Person, whether or
not such obligation is otherwise an obligation of such Person, (h) “earnouts”,
purchase price adjustments, profit sharing arrangements, deferred purchase money
amounts and similar payment obligations or continuing obligations of any nature
of such Person arising out of purchase and sale contracts; (i) all Debt of
others guarantied by such Person; (j) off-balance sheet liabilities and/or
Pension Plan liabilities or Multiemployer Plan liabilities of such Person;
(k) obligations arising under non-compete agreements; and (l) obligations
arising under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business.
Without duplication of any of the foregoing, Debt of Borrowers shall include any
and all Loans and Letter of Credit Liabilities.

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

“Defaulted Lender” means, so long as such failure shall remain in existence and
uncured, any Lender which shall have failed to make any Loan or other credit
accommodation, disbursement, settlement or reimbursement required pursuant to
the terms of any Financing Document.

“Deposit Account” means a “deposit account” (as defined in Article 9 of the
UCC).

“Deposit Account Control Agreement” means an agreement, in form and substance
satisfactory to Administrative Agent, among Administrative Agent, any applicable
Borrower and each bank or financial institution in which such Borrower maintains
a Deposit Account pursuant to which Administrative Agent shall obtain “control”
(as defined in Article 9 of the UCC) over such Deposit Account.

“Dollars” or “$” means the lawful currency of the United States of America.

“Eligible Accounts” means, subject to the criteria below, an account receivable
of a Borrower, which was generated in the Ordinary Course of Business, which was
generated originally in the name of such Borrower and not acquired via
assignment or otherwise, and which Administrative Agent, in its good faith
credit judgment and discretion, deems to be an Eligible Account. The net amount
of Eligible Accounts at any time shall be (a) the face

 

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amount of such Eligible Accounts as originally billed minus all cash collections
and other proceeds of such Account received from or on behalf of the Account
Debtor thereunder as of such date and any and all returns, rebates, discounts
(which may, at Administrative Agent’s option, be calculated on shortest terms),
credits, allowances or excise taxes of any nature at any time issued, owing,
claimed by Account Debtors, granted, outstanding or payable in connection with
such Accounts at such time, and (b) adjusted by applying percentages (known as
“liquidity factors”) by payor and/or payor class based upon the applicable
Borrower’s actual recent collection history for each such payor and/or payor
class in a manner consistent with Administrative Agent’s underwriting practices
and procedures. Such liquidity factors may be adjusted by Administrative Agent
from time to time as warranted by Administrative Agent’s underwriting practices
and procedures and using Administrative Agent’s good faith credit judgment.
Without limiting the generality of the foregoing, no Account shall be an
Eligible Account if:

(a) the Account remains unpaid more than one hundred twenty (120) days past the
invoice date (but in no event more than one hundred fifty (150) days after the
applicable goods or services have been rendered or delivered);

(b) the Account is subject to any defense, set-off, recoupment, counterclaim,
deduction, discount, credit, chargeback, freight claim, allowance, or adjustment
of any kind (but only to the extent of such defense, set-off, recoupment,
counterclaim, deduction, discount, credit, chargeback, freight claim, allowance,
or adjustment), or the applicable Borrower is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process;

(c) if the Account arises from the sale of goods, any part of any goods the sale
of which has given rise to the Account has been returned, rejected, lost, or
damaged (but only to the extent that such goods have been so returned, rejected,
lost or damaged);

(d) if the Account arises from the sale of goods, the sale was not an absolute,
bona fide sale, or the sale was made on consignment or on approval or on a
sale-or-return or bill-and-hold or progress billing basis, or the sale was made
subject to any other repurchase or return agreement, or the goods have not been
shipped to the Account Debtor or its designee or the sale was not made in
compliance with applicable Laws;

(e) if the Account arises from the performance of services, the services have
not actually been performed or the services were undertaken in violation of any
law or the Account represents a progress billing for which services have not
been fully and completely rendered;

(f) the Account is subject to a Lien other than a Permitted Lien, or
Administrative Agent does not have a Lien on such Account;

(g) the Account is evidenced by Chattel Paper or an Instrument of any kind, or
has been reduced to judgment, unless Administrative Agent has “control” (as
defined in Article 9 of the UCC) over and/or possession of (as applicable
depending on whether such asset is tangible or electronic) such Chattel Paper or
Instrument;

(h) the Account Debtor is an Affiliate or Subsidiary of a Credit Party, or if
the Account Debtor holds any Debt of a Credit Party;

(i) more than twenty percent (20%) of the aggregate balance of all Accounts
owing from the Account Debtor obligated on the Account are ineligible under
subclause (a) above (in which case, all Accounts from such Account Debtor shall
be ineligible);

(j) without limiting the provisions of subclause (i) above, fifty percent
(50%) or more of the aggregate unpaid Accounts from the Account Debtor obligated
on the Account are not deemed Eligible Accounts under this Agreement for any
reason;

(k) the total unpaid Accounts of the Account Debtor obligated on the Account
(other than with respect to Cardinal, McKesson, and AmerisourceBergen) exceed
twenty percent (20%) of the net amount of all Eligible

 

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Accounts owing from all Account Debtors (but only the amount of the Accounts of
such Account Debtor exceeding such 20% limitation shall be considered
ineligible);

(l) any covenant, representation or warranty contained in the Financing
Documents with respect to such Account has been breached in any respect;

(m) the Account is unbilled or has not been invoiced to the Account Debtor in
accordance with the procedures and requirements of the applicable Account
Debtor;

(n) the Account is an obligation of an Account Debtor that is the federal (or
local) government or a political subdivision thereof, unless Administrative
Agent has agreed to the contrary in writing and Administrative Agent has
received from the Account Debtor the acknowledgement of Administrative Agent’s
notice of assignment of such obligation pursuant to this Agreement;

(o) the Account is an obligation of an Account Debtor that has suspended
business, made a general assignment for the benefit of creditors, is unable to
pay its debts as they become due or as to which a petition has been filed
(voluntary or involuntary) under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or the Account is an Account as to which
any facts, events or occurrences exist which could reasonably be expected to
impair the validity, enforceability or collectibility of such Account or reduce
the amount payable or delay payment thereunder;

(p) the Account Debtor has its principal place of business or executive office
outside the United States

(q) the Account is payable in a currency other than United States dollars;

(r) the Account Debtor is an individual;

(s) the Borrower owning such Account has not signed and delivered to
Administrative Agent notices, in the form requested by Administrative Agent,
directing the Account Debtors to make payment to the applicable Lockbox Account;

(t) the Account includes late charges or finance charges (but only such portion
of the Account shall be ineligible);

(u) the Account arises out of the sale of any Inventory upon which any other
Person holds, claims or asserts a Lien; or

(v) the Account or Account Debtor fails to meet such other specifications and
requirements which may from time to time be established by Administrative Agent
in its good faith credit judgment and discretion.

“Eligible Assignee” means (i) a Lender, (ii) an Affiliate of a Lender, (iii) an
Approved Fund, and (iv) any other Person (other than a natural person) approved
by (a) Administrative Agent, and (b) unless an Event of Default has occurred and
is continuing, Borrower Representative (such approval of Borrower Representative
not to be unreasonably withheld or delayed, and shall be deemed provided unless
expressly withheld by Borrower Representative within three (3) Business Days of
request therefor); provided that notwithstanding the foregoing, (x) “Eligible
Assignee” shall not include Borrowers or any of Borrowers’ Affiliates or
Subsidiaries and (y) no proposed assignee intending to assume all or any portion
of the Revolving Loan Commitment shall be an Eligible Assignee unless such
proposed assignee either already holds a portion of such Revolving Loan
Commitment, or has been approved as an Eligible Assignee by Administrative
Agent.

“Eligible Inventory” means Inventory owned by Borrowers and acquired and
dispensed by Borrowers in the Ordinary Course of Business that Administrative
Agent, in its good faith credit judgment and discretion, deems to be Eligible
Inventory. Without limiting the generality of the foregoing, no Inventory shall
be Eligible Inventory if:

 

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(a) such Inventory is not owned by Borrowers free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
Borrowers’ performance with respect to that Inventory);

(b) such Inventory is placed on consignment or is in transit;

(c) such Inventory is covered by a negotiable document of title, unless such
document has been delivered to Administrative Agent with all necessary
endorsements, free and clear of all Liens except those in favor of
Administrative Agent;

(d) such Inventory is excess, obsolete, unsalable, shopworn, seconds, damaged,
unfit for sale, unfit for further processing, is of substandard quality or is
not of good and merchantable quality, free from any defects;

(e) such Inventory consists of display items or packing or shipping materials,
manufacturing supplies or Work-In-Process;

(f) such Inventory is not subject to a first priority Lien in favor of
Administrative Agent;

(g) such Inventory consists of goods that can be transported or sold only with
licenses that are not readily available or of any substances defined or
designated as hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic substance, or similar term, by any environmental law or any
Governmental Authority applicable to Borrowers or their business, operations or
assets;

(h) such Inventory is not covered by casualty insurance reasonably acceptable to
Administrative Agent;

(i) any covenant, representation or warranty contained in the Financing
Documents with respect to such Inventory has been breached;

(j) such Inventory is located on premises where the aggregate amount of all
Inventory (valued at cost) of Borrowers located thereon is less than Ten
Thousand Dollars ($10,000);

(k) such Inventory is located on premises with respect to which Administrative
Agent has not received a landlord, warehouseman, bailee or mortgagee letter
acceptable in form and substance to Administrative Agent;

(l) such Inventory consists of (A) discontinued items, (B) slow-moving or excess
items held in inventory, or (C) used items held for resale;

(m) such Inventory does not consist of finished goods;

(n) such Inventory does not meet all standards imposed by any Governmental
Authority, including with respect to its production, acquisition or importation
(as the case may be);

(o) such Inventory has an expiration date within the next twelve (12) months;

(p) such Inventory consists of products for which Borrowers have a greater than
forty-eight (48) month supply on hand;

(q) such Inventory is held for rental or lease by or on behalf of Borrowers;

(r) such Inventory is subject to any licensing, patent, royalty, trademark,
trade name or copyright agreement with any third parties, which agreement
restricts the ability of Administrative Agent or any Lender to sell or otherwise
dispose of such Inventory; or

 

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(s) such Inventory fails to meet such other specifications and requirements
which may from time to time be established by Administrative Agent in its good
faith credit judgment. Administrative Agent and Borrowers agree that Inventory
shall be subject to periodic appraisal by Administrative Agent and that
valuation of Inventory shall be subject to adjustment pursuant to the results of
such appraisal. Notwithstanding the foregoing, the valuation of Inventory shall
be subject to any legal limitations on sale and transfer of such Inventory.

“Environmental Laws” means any and all Laws relating to the environment or the
effect of the environment on human health or to emissions, discharges or
releases of pollutants, contaminants, medical wastes, Hazardous Materials or
wastes into the environment, including ambient air, surface water, ground water
or land, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of pollutants,
contaminants, medical wastes, Hazardous Materials or wastes or the clean-up or
other remediation thereof.

“ERISA” means the Employee Retirement Income Security Act of 1974, as the same
may be amended, modified or supplemented from time to time, and any successor
statute thereto, and any and all rules or regulations promulgated from time to
time thereunder.

“ERISA Affiliate” shall mean any person required to be aggregated with any
Borrower or any of its Subsidiaries under Section 414(b), 414(c), 414(m) or
414(o) of the Code.

“ERISA Employee Benefit Plan” means any employee benefit plan within the meaning
of Section 3(3) (other than a Pension Plan or a Multiemployer Plan) which is
maintained or otherwise contributed to by any Borrower or any Subsidiary of any
Borrower or any other ERISA Affiliate.

“Event of Default” has the meaning set forth in Section 10.1.

“Excluded Property” has the meaning set forth in Schedule 9.1.

“Financing Documents” means this Agreement, any Notes, the Security Documents,
any fee letter among Merrill Lynch and any of the Borrowers relating to the
transactions contemplated hereby, any subordination or intercreditor agreement
pursuant to which any Debt and/or any Liens securing such Debt is subordinated
to all or any portion of the Obligations and all other documents, instruments
and agreements related to the Obligations and heretofore executed, executed
concurrently herewith or executed at any time and from time to time hereafter,
as any or all of the same may be amended, supplemented, restated or otherwise
modified from time to time.

“GAAP” means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the United States
accounting profession), which are applicable to the circumstances as of the date
of determination.

“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, and any agency, department or Person exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation or other Person owned or controlled
(through stock or capital ownership or otherwise) by any of the foregoing,
whether domestic or foreign.

“Hazardous Materials” means (a) any “hazardous substance” as defined in CERCLA,
(b) any “hazardous waste” as defined by the Resource Conservation and Recovery
Act, (c) asbestos, (d) polychlorinated biphenyls, (e) petroleum, its
derivatives, by-products and other hydrocarbons, (f) mold, and (g) any other
pollutant, medical waste, toxic, radioactive, caustic or otherwise hazardous
substance regulated under Environmental Laws.

“Indemnitees” has the meaning set forth in Section 12.15.

“Intellectual Property” means, with respect to any Person, all patents, patent
applications and like protections, including improvements, divisions,
continuations, continuations in part, renewals, reissues, extensions

 

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and continuations in part of the same, trademarks, trade names, trade styles,
trade dress, service marks, logos and other business identifiers and, to the
extent permitted under applicable law, any applications therefore, whether
registered or not, and the goodwill of the business of such Person connected
with and symbolized thereby, copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
works, whether published or unpublished, technology, know-how and processes,
operating manuals, trade secrets, computer hardware and software, rights to
unpatented inventions and all applications and licenses therefor, used in or
necessary for the conduct of business by such Person and all claims for damages
by way of any past, present or future infringement of any of the foregoing.

“Investment” means any investment in any Person, whether by means of acquiring
(whether for cash, property, services, securities or otherwise) or holding
securities, capital contributions, loans, time deposits, advances, guaranties or
otherwise. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect thereto.

“IP Proceeds” has the meaning set forth in Schedule 9.1.

“Laws” means any and all federal, state, provincial, territorial, local and
foreign statutes, laws, judicial decisions, regulations, guidances, guidelines,
ordinances, rules, judgments, orders, decrees, codes, plans, injunctions,
permits, concessions, grants, franchises, governmental agreements and
governmental restrictions, whether now or hereafter in effect, which are
applicable to any Credit Party in any particular circumstance. “Laws” includes,
without limitation, Environmental Laws.

“LC Issuer” means one or more banks, trust companies or other Persons in each
case expressly identified by Administrative Agent from time to time, in
consultation with Borrowers, as an LC Issuer for purposes of issuing one or more
Letters of Credit hereunder. Without limitation of Administrative Agent’s
discretion to identify any Person as an LC Issuer, no Person shall be designated
as an LC Issuer unless such Person maintains reporting systems acceptable to
Administrative Agent with respect to letter of credit exposure and agrees to
provide regular reporting to Administrative Agent satisfactory to it with
respect to such exposure.

“Lender” means each of (a) Merrill Lynch, in its capacity as a lender hereunder,
(b) each other Person party hereto in its capacity as a lender hereunder,
(c) each other Person that becomes a party hereto as Lender pursuant to
Section 12.6, and (d) the respective successors of all of the foregoing, and
“Lenders” means all of the foregoing.

“Lender Letter of Credit” means a Letter of Credit issued by an LC Issuer that
is also, at the time of issuance of such Letter of Credit, a Lender.

“Letter of Credit” means a standby letter of credit issued for the account of
any Borrower by an LC Issuer which expires by its terms within one year after
the date of issuance and in any event at least thirty (30) days prior to the
Commitment Expiry Date. Notwithstanding the foregoing, a Letter of Credit may
provide for automatic extensions of its expiry date for one or more successive
one (1) year periods provided that the LC Issuer that issued such Letter of
Credit has the right to terminate such Letter of Credit on each such annual
expiration date and no renewal term may extend the term of the Letter of Credit
to a date that is later than the thirtieth (30th) day prior to the Commitment
Expiry Date.

“Letter of Credit Liabilities” means, at any time of calculation, the sum of
(a) without duplication, the amount then available for drawing under all
outstanding Lender Letters of Credit and all Supported Letters of Credit, in
each case without regard to whether any conditions to drawing thereunder can
then be met, plus (b) without duplication, the aggregate unpaid amount of all
reimbursement obligations in respect of previous drawings made under all such
Lender Letters of Credit and Supported Letters of Credit.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement and the other
Financing Documents,

 

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any Borrower or any Subsidiary shall be deemed to own subject to a Lien any
asset which it has acquired or holds subject to the interest of a vendor or
lessor under any conditional sale agreement, capital lease or other title
retention agreement relating to such asset.

“Litigation” means any action, suit or proceeding before any court, mediator,
arbitrator or Governmental Authority.

“Loan(s)” means, the Revolving Loans.

“Lockbox” has the meaning set forth in Section 2.11.

“Lockbox Account” means an account or accounts maintained at the Lockbox Bank
into which collections of Accounts are paid.

“Lockbox Bank” has the meaning set forth in Section 2.11.

“Material Adverse Effect” means with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (i) the condition
(financial or otherwise), operations, business or properties of any of the
Credit Parties, (ii) the rights and remedies of Administrative Agent or Lenders
under any Financing Document, or the ability of any Credit Party to perform any
of its obligations under any Financing Document to which it is a party,
(iii) the legality, validity or enforceability of any Financing Document,
(iv) the existence, perfection or priority of any security interest granted in
any Financing Document, or (v) the value of any material Intellectual Property
or material Collateral.

“Material Contracts” means (a) employment agreements covering the management of
any Credit Party, (b) collective bargaining agreements or other similar labor
agreements covering any employees of any Credit Party, (c) agreements for
managerial, consulting or similar services to which any Credit Party is a party
or by which it is bound, (d) agreements regarding any Credit Party, its assets
or operations or any investment therein to which any of its equityholders is a
party or by which it is bound, (e) real estate leases, Intellectual Property
licenses, agreements providing for the sale or transfer of rights to
Intellectual Property providing for ongoing royalty or similar payment to the
seller or transferor, or other lease or license agreements to which any Credit
Party is a party, either as lessor or lessee, or as licensor or licensee (other
than licenses arising from the purchase of “off the shelf” products), or
seller/transferor or buyer/transferee, (f) customer, distribution, marketing or
supply agreements to which any Credit Party is a party, (g) partnership
agreements to which any Credit Party is a general partner or joint venture
agreements to which any Credit Party is a party, (h) third party billing
arrangements to which any Credit Party is a party, or (i) any other agreements
or instruments to which any Credit Party is a party, and the breach,
nonperformance or cancellation of which, or the failure of which to renew, could
reasonably be expected to have a Material Adverse Effect, provided that, in each
case with respect to the preceding clauses (a), (c), (d), (e) and (f) such
agreement or contract requires payment of more than One Hundred Fifty Thousand
Dollars ($150,000) in any year.

“Maximum Lawful Rate” has the meaning set forth in Section 2.7.

“Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., and its successors.

“Multiemployer Plan” means a multiemployer plan within the meaning of
Section 4001(a)(3) of ERISA.

“Non-Funding Lender” means a Lender that has delivered a notice to the
Administrative Agent stating that such Lender shall cease making Revolving Loans
due to the non-satisfaction of one or more conditions set forth in Article 7,
and specifying any such non-satisfied conditions; provided, however, that any
Lender delivering any such notice shall be a Non-Funding Lender solely over the
period commencing on the Business Day following

 

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receipt by Administrative Agent of such notice, and terminating on such date
that such Lender has either revoked the effectiveness of such notice or
acknowledged to Administrative Agent the satisfaction of the condition specified
in such notice.

“Notes” shall have the meaning set forth in Section 2.3.

“Notice of Borrowing” means a notice of a Responsible Officer of Borrower
Representative, appropriately completed and substantially in the form of Exhibit
D hereto.

“Notice of LC Credit Event” means a notice from a Responsible Officer of
Borrower Representative to Administrative Agent with respect to any issuance,
increase or extension of a Letter of Credit specifying: (a) the date of issuance
or increase of a Letter of Credit; (b) the identity of the LC Issuer with
respect to such Letter of Credit, (c) the expiry date of such Letter of Credit;
(d) the proposed terms of such Letter of Credit, including the face amount; and
(e) the transactions that are to be supported or financed with such Letter of
Credit or increase thereof.

“Obligations” means all obligations, liabilities and indebtedness (monetary
(including post-petition interest, whether or not allowed) or otherwise) of each
Credit Party under this Agreement or any other Financing Document, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due. In addition to,
but without duplication of, the foregoing, the Obligations shall include,
without limitation, all obligations, liabilities and indebtedness arising from
or in connection with all Support Agreements and all Lender Letters of Credit.

“OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

“OFAC Lists” means, collectively, the Specially Designated Nationals and Blocked
Persons List maintained by OFAC pursuant to Executive Order No. 13224, 66 Fed.
Reg. 49079 (Sept. 25, 2001) and/or any other list of terrorists or other
restricted Persons maintained pursuant to any of the rules and regulations of
OFAC or pursuant to any other applicable Executive Orders.

“Ordinary Course of Business” means, in respect of any transaction involving any
Credit Party, the ordinary course of business of such Credit Party, as conducted
by such Credit Party materially in accordance with past practices.

“Orderly Liquidation Value” means the net amount (after all costs of sale),
expressed in terms of money, which Administrative Agent, in its good faith
discretion, estimates can be realized from a sale, as of a specific date, given
a reasonable period to find a purchaser(s), with the seller being compelled to
sell on an as-is/where-is basis.

“Organizational Documents” means, with respect to any Person other than a
natural person, the documents by which such Person was organized (such as a
certificate of incorporation, certificate of limited partnership or articles of
organization, and including, without limitation, any certificates of designation
for preferred stock or other forms of preferred equity) and which relate to the
internal governance of such Person (such as by-laws, a partnership agreement or
an operating, limited liability or members agreement).

“Payment Account” means the account specified on the signature pages hereof into
which all payments by or on behalf of each Borrower to Administrative Agent
under the Financing Documents shall be made, or such other account as
Administrative Agent shall from time to time specify by notice to Borrower
Representative.

“Payment Notification” means a written notification substantially in the form of
Exhibit E hereto.

“Pension Plan” means an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code.

“Permits” means all governmental licenses, authorizations, provider numbers,
supplier numbers, registrations, permits, drug or device authorizations and
approvals, certificates, franchises, qualifications, accreditations, consents
and approvals required under all applicable Laws and required in order to carry
on its

 

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business as now conducted.

“Permitted Acquisitions” means the acquisition of all or substantially all of
the assets of another Person, or of a business line or a unit or division of
another Person, provided that after giving effect to such acquisition, no Event
of Default has occurred and is continuing or would exist after giving effect to
such acquisition, there shall be no decrease in the Borrowers’ tangible net
worth after giving effect to such acquisition (as confirmed to Administrative
Agent pursuant to a written certificate from a Responsible Officer of Borrowers)
and the aggregate amount of such acquisitions during the term of this Agreement
(together with the aggregate amount of all acquisitions permitted under clause
(h) of the definition of Permitted Investments during the term of this
Agreement) shall not exceed Five Hundred Thousand Dollars ($500,000).

“Permitted Affiliate” means with respect to any Person (a) any Person that
directly or indirectly controls such Person, and (b) any Person which is
controlled by or is under common control with such controlling Person. As used
in this definition, the term “control” of a Person means the possession,
directly or indirectly, of the power to vote eighty percent (80%) or more of any
class of voting securities of such Person or to direct or cause the direction of
the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

“Permitted Asset Dispositions” means the following Asset Dispositions provided
that, at the time of such Asset Disposition, no Default or Event of Default
exists or would result from such Asset Disposition: (i) dispositions of
Inventory in the Ordinary Course of Business and not pursuant to any bulk sale,
(ii) dispositions of furniture, fixtures and equipment in the Ordinary Course of
Business that the applicable Borrower or Subsidiary determines in good faith is
no longer used or useful in the business of such Borrower and its Subsidiaries,
(iii) the granting of non-exclusive licenses or comparable rights, (iv) the
granting of exclusive licenses or comparable rights consistent with the
Borrower’s publicly articulated business strategy, (v) dispositions approved by
Administrative Agent and, if the disposition pertains to Intellectual Property
or real property Collateral, by Required Lenders; (vi) the sale of the Products
listed in Schedule 1.1 attached hereto for fair market value; (vii) the Asset
Disposition described in Schedule 5.4 attached hereto; (viii) the sale of cash
equivalents for fair market value; (ix) the granting of rights by the Borrowers
under the Intellectual Property Transfer and License Agreement dated May 6, 2002
with Johnson & Johnson Consumer Companies, as amended by the amendments set
forth on Schedule 4.4 attached hereto; (x) the granting of rights by the
Borrowers under the Intellectual Property Transfer and License Agreement dated
May 6, 2002 with Janssen Pharmaceutical Products LP, as amended by the
amendments set forth on Schedule 4.4 attached hereto; (xi) the Permitted Belgian
Subsidiary Payments; and (xii) other Asset Dispositions not to exceed Five
Hundred Thousand Dollars ($500,000) in the aggregate after the date hereof.

“Permitted Belgian Subsidiary Payments” means transfers of cash by the Principal
Borrower to Barrier Belgium in an aggregate amount not to exceed Six Million
Dollars ($6,000,000) in the aggregate in any twelve-month period, provided that
such transfers are made in the ordinary course of business for the funding of
research and development for the benefit of the Principal Borrower, and provided
that any such transfer shall not be deemed a “Permitted Belgian Subsidiary
Payment” if such transfer is made at a time when an Event of Default has
occurred and is continuing.

“Permitted Contest” means, with respect to any tax obligation or other
obligation allegedly or potentially owing from any Borrower to any governmental
tax authority or other third party, a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in accordance with GAAP shall have been made on the books and
records and financial statements of the applicable Borrower(s); provided,
however, that (a) compliance with the obligation that is the subject of such
contest is effectively stayed during such challenge; (b) Borrowers’ title to,
and its right to use, the Collateral is not adversely affected thereby and
Administrative Agent’s Lien and priority on the Collateral are not adversely
affected, altered or impaired thereby; (c) the Collateral or any part thereof or
any interest therein shall not be in any danger of being sold, forfeited or lost
by reason of such contest by Borrowers; (d) Borrowers have given Administrative
Agent notice of the intent to so contest the obligation and the commencement of
such contest and upon request by Administrative Agent, from time to time, notice
of the status of such contest by Borrowers and/or confirmation of the continuing
satisfaction of this definition; and (e) upon a final determination of such
contest, Borrowers shall promptly comply with the requirements thereof.

 

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“Permitted Contingent Obligations” means : (a) Contingent Obligations arising in
respect of the Debt under the Financing Documents and Letter of Credit
Liabilities; (b) Contingent Obligations outstanding on the date of this
Agreement and set forth on Schedule 5.1 (but not including any refinancings,
extensions, increases or amendments to the indebtedness underlying such
Contingent Obligations other than extensions of the maturity thereof without any
other change in terms); (c) Contingent Obligations incurred in the Ordinary
Course of Business with respect to surety and appeal bonds, performance bonds
and other similar obligations not to exceed One Hundred Fifty Thousand Dollars
($150,000) in the aggregate at any time outstanding and with respect to bonds
provided to utilities with respect to utility services provided to Borrowers in
the Ordinary Course of Business; and (d) other Contingent Obligations not
permitted by the preceding clauses, not to exceed One Hundred Fifty Thousand
Dollars ($150,000) in the aggregate at any time outstanding.

“Permitted Distributions” means the following Restricted Distributions:
(a) dividends by any Subsidiary of any Borrower to such parent Borrower;
(b) dividends solely in common stock; and (c) repurchases of stock of former
employees, directors or consultants pursuant to stock repurchase agreements so
long as an Event of Default does not exist at the time of such repurchase and
would not exist after giving effect to such repurchase, provided that such
repurchase does not exceed One Hundred Fifty Thousand Dollars ($150,000) in the
aggregate per fiscal year.

“Permitted Indebtedness” means: (a) Borrower’s Debt to Administrative Agent and
each Lender under this Agreement and the other Financing Documents; (b) Debt
incurred as a result of endorsing negotiable instruments received in the
Ordinary Course of Business; (c) purchase money Debt not to exceed Two Million
Five Hundred Thousand Dollars ($2,500,000) at any time (whether in the form of a
loan or a lease) used solely to acquire equipment used in the Ordinary Course of
Business and secured only by such equipment; (d) Debt existing on the date of
this Agreement and described on Schedule 5.1 (but not including any
refinancings, extensions, increases or amendments to such Debt other than
extensions of the maturity thereof without any other change in terms); (e) Debt,
if any, arising under swap agreements or other derivative instruments; (f) trade
accounts payable arising and paid on a timely basis and in the Ordinary Course
of Business; (g) Debt in the form of insurance premiums financed through the
applicable insurance company; and (h) Subordinated Debt; (i) severance payments
to former employees in the ordinary course of business; and (j) publicly issued
convertible Debt with a maturity date not less than five years after the date of
the this Agreement, the terms of which convertible Debt do not include any
payment obligations (of principal or otherwise) prior to the maturity date other
than payment so accrued interest.

“Permitted Investments” means: (a) Investments shown on Schedule 5.5 and
existing on the Closing Date; (b) (i) cash equivalents, and (ii) any similar
short term Investments permitted by Borrowers’ investment policy, as amended
from time to time, provided that such investment policy (and any such amendment
thereto) has been approved in writing by Administrative Agent; (c) Investments
consisting of the endorsement of negotiable instruments for deposit or
collection or similar transactions in the Ordinary Course of Business;
(d) Investments consisting of travel advances and loans to employees, officers
or directors relating to the purchase of equity securities of Borrowers or their
Subsidiaries pursuant to employee stock purchase plans or agreements approved by
Borrowers’ Board of Directors (or other governing body), but the aggregate of
all such loans outstanding may not exceed One Hundred Fifty Thousand Dollars
($150,000) at any time; (e) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of customers or suppliers and
in settlement of delinquent obligations of, and other disputes with, customers
or suppliers arising in the Ordinary Course of Business; (f) Investments
consisting of notes receivable of, or prepaid royalties and other credit
extensions, to customers and suppliers who are not Affiliates, in the Ordinary
Course of Business; provided that this subpart (f) shall not apply to
Investments of Borrowers in any Subsidiary; (g) Investments consisting of
Deposit Accounts or Securities Accounts subject to a Deposit Account Control
Agreement or Securities Account Control Agreement in favor of Administrative
Agent or which are otherwise permitted under Section 5.9; (h) Permitted
Acquisitions or the formation of new Subsidiaries provided that the Borrowers
shall have complied with Section 5.5(b); (j) the Permitted Belgian Subsidiary
Payments; and (k) other Investments in an amount not exceeding One Hundred Fifty
Thousand Dollars ($150,000) in the aggregate.

“Permitted Liens” means: (a) deposits or pledges of cash to secure obligations
under workmen’s compensation, social security or similar laws, or under
unemployment insurance (but excluding Liens arising under ERISA) pertaining to a
Borrower’s employees, if any; (b) deposits or pledges of cash to secure bids,
tenders, contracts (other than contracts for the payment of money or the
deferred purchase price of property or services),

 

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leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the Ordinary Course of Business; (c) carrier’s,
warehousemen’s, mechanic’s, workmen’s, materialmen’s or other like Liens on
Collateral, other than Intellectual Property and any Collateral which is part of
the Borrowing Base, arising in the Ordinary Course of Business with respect to
obligations which are not due, or which are being contested pursuant to a
Permitted Contest; (d) Liens on Collateral, other than Intellectual Property and
Accounts, for taxes or other governmental charges not at the time delinquent or
thereafter payable without penalty or the subject of a Permitted Contest;
(e) attachments, appeal bonds, judgments and other similar Liens on Collateral
other than Intellectual Property, Accounts or Inventory, for sums not exceeding
One Hundred Fifty Thousand Dollars ($150,000) in the aggregate arising in
connection with court proceedings; provided, however, that the execution or
other enforcement of such Liens is effectively stayed and the claims secured
thereby are the subject of a Permitted Contest; (f) Liens and encumbrances in
favor of Administrative Agent under the Financing Documents; (g) Liens on
assets, other than Intellectual Property and Accounts, to the extent existing on
the date hereof and set forth on Schedule 5.2; and (h) any Lien on any equipment
securing Debt permitted under subpart (c) of the definition of Permitted
Indebtedness provided, however, that such Lien attaches concurrently with or
within twenty (20) days after the acquisition thereof; (i) Liens in favor of
other financial institutions for customary fees arising in connection with
Deposit Accounts or Securities Accounts held by such financial institutions.

“Permitted Modifications” means (a) such amendments or other modifications to a
Borrower’s Organizational Documents as are required under this Agreement or by
applicable Law and fully disclosed to Administrative Agent within thirty
(30) days after such amendments or modifications have become effective, (b) such
amendments or modifications to a Borrower’s Organizational Documents (other than
those involving a change in the name of a Borrower or involving a reorganization
of the Borrower under the laws of a different jurisdiction) that would not
adversely affect the rights and interests of the Administrative Agent or Lenders
and fully disclosed to Administrative Agent within thirty (30) days after such
amendments or modifications have become effective, and (c) such modifications to
the name of a Borrower or involving a reorganization of the Borrower under the
laws of a different jurisdiction so long as the provisions of Section 9.2(a) are
fully complied with prior to the effectiveness of such amendments or
modifications.

“Person” means any natural person, corporation, limited liability company,
professional association, limited partnership, general partnership, joint stock
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, and
any Governmental Authority.

“Principal Borrower” means Barrier Therapeutics, Inc., a Delaware corporation.

“Pro Rata Share” means (a) with respect to a Lender’s obligation to make
Revolving Loans, such Lender’s right to receive payments of principal and
interest with respect thereto, such Lender’s right to receive the unused line
fee described in Section 2.2(b), and such Lender’s obligation to share in Letter
of Credit Liabilities and to receive the related Letter of Credit fee described
in Section 2.5(b), the Revolving Loan Commitment Percentage of such Lender, and
(b) for all other purposes with respect to any Lender, the percentage obtained
by dividing (i) the sum of the Revolving Loan Commitment Amount of such Lender
(or, in the event the Revolving Loan Commitment shall have been terminated, such
Lender’s then existing Revolving Loan Outstandings), by (ii) the sum of the
Revolving Loan Commitment (or, in the event the Revolving Loan Commitment shall
have been terminated, the then existing Revolving Loan Outstandings) of all
Lenders

“Reimbursement Obligations” means, at any date, the obligations of each Borrower
then outstanding to reimburse (a) Administrative Agent for payments made by
Administrative Agent under a Support Agreement, and/or (b) any LC Issuer, for
payments made by such LC Issuer under a Lender Letter of Credit.

“Required Lenders” means at any time Lenders holding (a) sixty-six and two
thirds percent (66 2/3%) or more of the Revolving Loan Commitment, or (b) if the
Revolving Loan Commitment has been terminated, sixty-six and two thirds percent
(66 2/3%) or more of the sum of (x) the then aggregate outstanding principal
balance of the Loans plus (y) the then aggregate amount of Letter of Credit
Liabilities.

 

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“Responsible Officer” means any of the Chief Executive Officer, Chief Financial
Officer, or Vice President of Finance of the applicable Borrower.

“Restricted Distribution” means as to any Person (a) any dividend or other
distribution (whether in cash, securities or other property) on any equity
interest in such Person (except those payable solely in its equity interests of
the same class), (b) any payment on account of (i) the purchase, redemption,
retirement, defeasance, surrender, cancellation, termination or acquisition of
any equity interests in such Person or any claim respecting the purchase or sale
of any equity interest in such Person or (ii) any option, warrant or other right
to acquire any equity interests in such Person, (c) any management fees,
salaries, bonuses or comparable compensation to any Person holding greater than
fifteen percent (15%) of the equity interest in a Borrower or a Subsidiary of a
Borrower (other than (A) payments of salaries to individuals, (B) directors
fees, (C) the issuance of stock options or restricted stock to employees,
consultants and board members, and (D) advances and reimbursements to employees
or directors, all in the Ordinary Course of Business and consistent with past
practices), an Affiliate of a Borrower or an Affiliate of any Subsidiary of a
Borrower, (d) any lease or rental payments to an Affiliate or Subsidiary of a
Borrower, or (e) repayments of or debt service on loans or other indebtedness
held by any Person holding an equity interest in a Borrower or a Subsidiary of a
Borrower, an Affiliate of a Borrower or an Affiliate of any Subsidiary of a
Borrower unless permitted under and made pursuant to a Subordination Agreement
applicable to such loans or other indebtedness.

“Revolving Lender” means each Lender having a Revolving Loan Commitment Amount
in excess of zero (or, in the event the Revolving Loan Commitment shall have
been terminated at any time, each Lender at such time having Revolving Loan
Outstandings in excess of zero).

“Revolving Loan Availability” means, at any time, the Revolving Loan Limit less
the Revolving Loan Outstandings.

“Revolving Loan Borrowing” means a borrowing of a Revolving Loan.

“Revolving Loan Commitment” means the sum of each Lender’s Revolving Loan
Commitment Amount, which is equal to Twelve Million and No/100 Dollars
($12,000,000.00).

“Revolving Loan Commitment Amount” means, (i) as to any Lender that is a Lender
on the Closing Date, the dollar amount set forth opposite such Lender’s name on
the Commitment Annex under the column “Revolving Loan Commitment Amount”, as
such amount may be adjusted from time to time by any amounts assigned (with
respect to such Lender’s portion of Revolving Loans outstanding and its
commitment to make Revolving Loans) pursuant to the terms of any and all
effective Assignment Agreements to which such Lender is a party and (ii) as to
any Lender that becomes a Lender after the Closing Date, the amount of the
“Revolving Loan Commitment Amount(s)” of other Lender(s) assigned to such new
Lender pursuant to the terms of the effective Assignment Agreement(s) pursuant
to which such new Lender shall become a Lender, as such amount may be adjusted
from time to time by any amounts assigned (with respect to such Lender’s portion
of Revolving Loans outstanding and its commitment to make Revolving Loans)
pursuant to the terms of any and all effective Assignment Agreements to which
such Lender is a party.

“Revolving Loan Commitment Percentage” means, as to any Lender, (a) on the
Closing Date, the percentage set forth opposite such Lender’s name on the
Commitment Annex under the column “Revolving Loan Commitment Percentage” (if
such Lender’s name is not so set forth thereon, then, on the Closing Date, such
percentage for such Lender shall be deemed to be zero), and (b) on any date
following the Closing Date, the percentage equal to the Revolving Loan
Commitment Amount of such Lender on such date divided by the Revolving Loan
Commitment on such date.

“Revolving Loan Limit” means, at any time, the lesser of (a) the Revolving Loan
Commitment and (b) the Borrowing Base.

“Revolving Loan Note” means any Note evidencing any portion of any Revolving
Loan.

 

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“Revolving Loan Outstandings” means at any time of calculation the sum of the
then existing aggregate outstanding principal amount of Revolving Loans and the
then existing Letter of Credit Liabilities.

“Revolving Loans” has the meaning set forth in Section 2.1(a)(i).

“SEC” means the United States Securities and Exchange Commission.

“Securities Account” means a “securities account” (as defined in Article 9 of
the UCC), an investment account, or other account in which Investment Property
or Securities are held or invested for credit to or for the benefit of any
Borrower.

“Securities Account Control Agreement” means an agreement, in form and substance
satisfactory to Administrative Agent, among Administrative Agent, any applicable
Borrower and each securities intermediary in which such Borrower maintains a
Securities Account pursuant to which Administrative Agent shall obtain “control”
(as defined in Article 9 of the UCC) over such Securities Account.

“Security Document” means this Agreement and any other agreement, document or
instrument executed concurrently herewith or at any time hereafter pursuant to
which one or more Credit Parties or any other Person either (a) guaranties
payment or performance of all or any portion of the Obligations, and/or
(b) provides, as security for all or any portion of the Obligations, a Lien on
any of its assets in favor of Administrative Agent for its own benefit and the
benefit of the Lenders, as any or all of the same may be amended, supplemented,
restated or otherwise modified from time to time.

“Solvent” means, with respect to any Person, that such Person (a) owns and will
own assets the fair saleable value of which are (i) greater than the total
amount of its liabilities (including Contingent Obligations) required to be
classified upon a balance sheet as liabilities in accordance with GAAP, and
(ii) greater than the amount that will be required to pay the probable
liabilities of its then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to it; (b) has capital that is not unreasonably small in relation to
its business as presently conducted or after giving effect to any contemplated
transaction; and (c) does not intend to incur and does not believe that it will
incur debts beyond its ability to pay such debts as they become due.

“Subordinated Debt” means any Debt of Borrowers subject to a Subordination
Agreement and incurred with the prior written consent of Administrative Agent
pursuant to the applicable Subordinated Debt Documents related thereto and
provided in advance to Administrative Agent, all of which documents must be in
form and substance acceptable to Administrative Agent in its sole discretion. As
of the Closing Date, there is no Subordinated Debt.

“Subordinated Debt Documents” means, with respect to any Debt subject to a
Subordination Agreement, any and all documents evidencing and/or securing such
Debt. As of the Closing Date, there are no Subordinated Debt Documents.

“Subordination Agreement” means any agreement between Administrative Agent and
another creditor of Borrowers, as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with the terms
thereof, pursuant to which the Debt owing from any Borrower(s) and/or the Liens
securing such Debt granted by any Borrower(s) to such creditor are subordinated
in any way to the Obligations and the Liens created under the Security
Documents, the terms and provisions of which such Subordination Agreements have
been agreed to by and are acceptable to Administrative Agent in the exercise of
its sole discretion.

“Subsidiary” means, with respect to any Person, (a) any corporation of which an
aggregate of more than fifty percent (50%) of the outstanding capital stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, capital stock of any
other class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is at the time, directly or
indirectly, owned legally or beneficially by such Person or one or more
Subsidiaries of such Person, or with respect to which any such Person has the
right to vote or designate the vote of more than fifty percent (50%) of

 

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such capital stock whether by proxy, agreement, operation of law or otherwise,
and (b) any partnership or limited liability company in which such Person and/or
one or more Subsidiaries of such Person shall have an interest (whether in the
form of voting or participation in profits or capital contribution) of more than
fifty percent (50%) or of which any such Person is a general partner or may
exercise the powers of a general partner. Unless the context otherwise requires,
each reference to a Subsidiary shall be a reference to a Subsidiary of a
Borrower.

“Support Agreement” has the meaning set forth in Section 2.5(a).

“Supported Letter of Credit” means a Letter of Credit issued by an LC Issuer in
reliance on one or more Support Agreements.

“Taxes” has the meaning set forth in Section 2.8.

“Termination Date” means the earlier to occur of (a) the Commitment Expiry Date,
or (b) any date on which Administrative Agent or Required Lenders elect to
accelerate the maturity of the Loans or terminate the Revolving Loan Commitment
pursuant to Section 10.2.

“UCC” means the Uniform Commercial Code of the State of New York or of any other
state the laws of which are required to be applied in connection with the
perfection of security interests in any Collateral.

“United States” means the United States of America.

“Work-In-Process” means Inventory that is not a product that is finished and
approved by a Borrower in accordance with applicable Laws and such Borrower’s
normal business practices for release and delivery to customers.

Section 1.2 Accounting Terms and Determinations. Accounting terms not defined in
this Agreement shall be construed following GAAP, and calculations and
determinations must be made following GAAP, in each case, applied on a basis
consistent with the most recent audited financial statements of Principal
Borrower delivered to Administrative Agent prior to the Closing Date; provided,
however, that if at any time any change in GAAP would affect the computation of
any financial ratio or financial requirement set forth in any Financing
Document, and either Borrowers, the Administrative Agent or the Required Lenders
shall so request, the Administrative Agent and Borrowers shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders).

Section 1.3 Other Definitional Provisions. References in this Agreement to
“Articles”, “Sections”, “Annexes”, “Exhibits” or “Schedules” shall be to
Articles, Sections, Annexes, Exhibits or Schedules of or to this Agreement
unless otherwise specifically provided. Any term defined herein may be used in
the singular or plural. “Include”, “includes” and “including” shall be deemed to
be followed by “without limitation”. Except as otherwise specified or limited
herein, references to any Person include the successors and assigns of such
Person. References “from” or “through” any date mean, unless otherwise
specified, “from and including” or “through and including”, respectively.
References to any statute or act shall include all related current regulations
and all amendments and any successor statutes, acts and regulations. References
to any statute or act, without additional reference, shall be deemed to refer to
federal statutes and acts of the United States. References to any agreement,
instrument or document shall include all schedules, exhibits, annexes and other
attachments thereto. As used in this Agreement, the meaning of the term
“material” or the phrase “in all material respects” is intended to refer to an
act, omission, violation or condition which reflects or could reasonably be
expected to result in a Material Adverse Effect. References to capitalized terms
that are not defined herein, but are defined in the UCC, shall have the meanings
given them in the UCC. All Riders attached hereto are hereby incorporated herein
by this reference and made a part hereof. Headings and captions used in the
Financing Documents (including the Exhibits, Schedules and Annexes hereto and
thereto) are included for convenience of reference only and shall not be given
any substantive effect.

ARTICLE 2 – LOANS AND LETTERS OF CREDIT

 

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Section 2.1 Loans.

(a) Revolving Loans.

(i) Revolving Loans and Borrowings. On the terms and subject to the conditions
set forth herein, each Lender severally agrees to make Loans to Borrowers from
time to time as set forth herein (each a “Revolving Loan”, and collectively,
“Revolving Loans”) equal to such Lender’s Revolving Loan Commitment Percentage
of Revolving Loans requested by Borrowers hereunder, provided, however, that
after giving effect thereto, the Revolving Loan Outstandings shall not exceed
the Revolving Loan Limit. Borrowers may prepay or repay Revolving Loans without
reduction in the Revolving Loan Commitment from time to time and may reborrow
Revolving Loans pursuant to this Section 2.1(a). Borrowers shall deliver to
Administrative Agent a Notice of Borrowing with respect to each proposed
Revolving Loan Borrowing, such Notice of Borrowing to be delivered no later than
noon (Chicago time) two (2) Business Days prior to such proposed borrowing. Each
Borrower and each Revolving Lender hereby authorizes Administrative Agent to
make Revolving Loans on behalf of Revolving Lenders, at any time in its sole
discretion, (A) as provided in Section 2.5(c), with respect to obligations
arising under Support Agreements and/or Lender Letters of Credit, and (B) to pay
principal owing in respect of the Loans and interest, fees, expenses and other
charges of any Credit Party from time to time arising under this Agreement or
any other Financing Document. The Borrowing Base shall be determined by
Administrative Agent based on the most recent Borrowing Base Certificate
delivered to Administrative Agent in accordance with this Agreement and such
other information as may be available to Administrative Agent. Without limiting
any other rights and remedies of Administrative Agent hereunder or under the
other Financing Documents, the Revolving Loans shall be subject to
Administrative Agent’s continuing right to withhold from the Borrowing Base
reserves, and to increase and decrease such reserves from time to time, if and
to the extent that in Administrative Agent’s good faith credit judgment and
discretion, such reserves are necessary.

(ii) Mandatory Revolving Loan Repayments and Prepayments.

(A) The Revolving Loan Commitment shall terminate on the Termination Date. On
such Termination Date, there shall become due, and Borrowers shall pay, the
entire outstanding principal amount of each Revolving Loan, together with
accrued and unpaid interest thereon.

(B) If at any time the Revolving Loan Outstandings exceed the Revolving Loan
Limit, then, on the next succeeding Business Day, Borrowers shall repay the
Revolving Loans or cash collateralize Letter of Credit Liabilities in the manner
specified in Section 2.5(e) or cancel outstanding Letters of Credit, or any
combination of the foregoing, in an aggregate amount equal to such excess.

(C) Principal payable on account of Revolving Loans shall be payable by
Borrowers to Administrative Agent (A) immediately upon the receipt by any
Borrower or Administrative Agent of any payments on or proceeds from any of the
Accounts, to the extent of such payments or proceeds, and (B) in full on the
Termination Date.

(iii) Optional Prepayments. Borrowers may from time to time prepay the Revolving
Loans in whole or in part; provided, however, that any such partial prepayment
shall be in an amount equal to One Hundred Thousand Dollars ($100,000) or a
higher integral multiple of Twenty Five Thousand Dollars ($25,000).

Section 2.2 Interest, Interest Calculations and Certain Fees.

(a) Interest. From and following the Closing Date, the Loans and the other
Obligations shall bear interest at the sum of the Base Rate plus the applicable
Base Rate Margin, subject to the provisions of Section 10.4 below regarding
default rates of interest. Interest on the Loans shall be paid in arrears on the
first (1st) day of each month and on the Termination Date. Interest on all other
Obligations shall be payable on demand and on the Termination Date. All interest
accruing on and after the Termination Date shall be immediately due and payable
as it accrues. For purposes of calculating interest, all funds transferred from
the Payment Account for application to any Revolving Loans shall be subject to a
three (3) Business Day clearance period.

 

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(b) Unused Line Fee. From and following the Closing Date, Borrowers shall pay
Administrative Agent, for the benefit of all Lenders committed to make Revolving
Loans, in accordance with their respective Pro Rata Shares, a fee in an amount
equal to (i) (A) the Revolving Loan Commitment minus (B) the average daily
balance of the sum of the Revolving Loan Outstandings during the preceding
month, multiplied by (ii) one half of one percent (0.50%) per annum. Such fee is
to be paid monthly in arrears on the first day of each month.

(c) Collateral Fee. From and following the Closing Date, Borrowers shall pay
Administrative Agent, for its own account and not for the benefit of any other
Lenders, a fee in an amount equal to (i) the average daily balance of the sum of
the Revolving Loan Outstandings during the preceding month, multiplied by
(ii) one percent (1.0%) per annum. Such fee is to be paid monthly in arrears on
the first day of each month.

(d) Commitment Fee. Borrowers shall pay Administrative Agent, for the benefit of
all Lenders committed to make Revolving Loans on the Closing Date, in accordance
with their respective Pro Rata Shares, a fee in an amount equal to (i) the
Revolving Loan Commitment, multiplied by (ii) one percent (1.0%), which
commitment fee shall be due and payable on the first (1st) anniversary of the
Closing Date.

(e) Deferred Revolving Loan Commitment Fee. If Lenders’ funding obligations in
respect of the Revolving Loan Commitment under this Agreement terminate for any
reason (whether by voluntary termination by Borrowers, by reason of the
occurrence of an Event of Default or otherwise) prior to the Commitment Expiry
Date, Borrowers shall pay to Administrative Agent, for the benefit of all
Lenders committed to make Revolving Loans on the Closing Date, a fee as
compensation for the costs of such Lenders being prepared to make funds
available to Borrowers under this Agreement, equal to an amount determined by
multiplying the Revolving Loan Commitment by the following applicable percentage
amount: three percent (3.0%) for the first year following the Closing Date, and
two percent (2.0%) thereafter. All fees payable pursuant to this paragraph shall
be deemed fully earned and non-refundable as of the Closing Date.

(f) Audit Fees. Borrowers shall pay to Administrative Agent, for its own account
and not for the benefit of any other Lenders, all reasonable fees and expenses
in connection with audits and inspections of Borrowers’ books and records,
audits, valuations or appraisals of the Collateral, audits of Borrowers’
compliance with applicable Laws and such other matters as Administrative Agent
shall deem appropriate, which shall be due and payable on the later of (i) the
first Business Day of the month following the date of issuance by Administrative
Agent of a written request for payment thereof to Borrowers, or (ii) the tenth
(10th) day following the issuance of such notice; provided, that so long as no
Event of Default or Default has occurred, Borrowers shall be liable for such
fees and expenses for no more than four (4) such audits in any given calendar
year.

(g) Wire Fees. Borrowers shall pay to Administrative Agent, for its own account
and not for the account of any other Lenders, on written demand, any and all
fees, costs or expenses which Administrative Agent pays to a bank or other
similar institution (including, without limitation, any fees paid by
Administrative Agent to any other Lender) arising out of or in connection with
(i) the forwarding to Borrowers or any other Person on behalf of Borrowers, by
Administrative Agent, of proceeds of the Loans made by any Lender to Borrowers
pursuant to this Agreement, and (ii) the depositing for collection, by
Administrative Agent, of any check or item of payment received or delivered to
Administrative Agent on account of Obligations.

(h) Late Charges. If payments of principal (other than a final installment of
principal upon the Termination Date), interest due on the Obligations, or any
other amounts due hereunder or under the other Financing Documents are not
timely made and remain overdue for a period of five (5) days, Borrowers, without
notice or demand by Administrative Agent, promptly shall pay to Administrative
Agent, for the benefit of the Lenders according to their Pro Rata Shares, as
additional compensation in administering the Obligations, an amount equal to
five percent (5.0%) of each delinquent payment.

(i) Computation of Interest and Related Fees. All interest and fees under each
Financing Document shall be calculated on the basis of a 360-day year for the
actual number of days elapsed. The date of funding of a Loan shall be included
in the calculation of interest. The date of payment of a Loan shall be excluded
from the calculation of interest. If a Loan is repaid on the same day that it is
made, one (1) day’s interest shall be charged.

 

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Section 2.3 Notes. The portion of the Loans made by each Lender shall be
evidenced, if so requested by such Lender, by one or more promissory notes
executed by Borrowers on a joint and several basis (each, a “Note”) in an
original principal amount equal to such Lender’s Revolving Loan Commitment.

Section 2.4 [RESERVED]

Section 2.5 Letters of Credit and Letter of Credit Fees.

(a) Letter of Credit. On the terms and subject to the conditions set forth
herein, the Revolving Loan Commitment may be used by Borrowers, in addition to
the making of Revolving Loans hereunder, for the issuance, prior to that date
which is thirty (30) days prior to the Termination Date, by (i) Administrative
Agent, of letters of credit, guaranties or other agreements or arrangements
(each, a “Support Agreement”) to induce an LC Issuer to issue or increase the
amount of, or extend the expiry date of, one or more Letters of Credit and
(ii) a Lender, identified by Administrative Agent, as an LC Issuer, of one or
more Lender Letters of Credit, so long as, in each case:

(i) Administrative Agent shall have received a Notice of LC Credit Event at
least five (5) Business Days before the relevant date of issuance, increase or
extension; and

(ii) after giving effect to such issuance, increase or extension, (A) the
aggregate Letter of Credit Liabilities under all Letters of Credit do not exceed
One Million Dollars ($1,000,000), and (B) the Revolving Loan Outstandings do not
exceed the Revolving Loan Limit.

Nothing in this Agreement shall be construed to obligate any Lender to issue,
increase the amount of or extend the expiry date of any letter of credit, which
act or acts, if any, shall be subject to agreements to be entered into from time
to time between Borrowers and such Lender. Each Lender that is an LC Issuer
hereby agrees to give Administrative Agent prompt written notice of each
issuance of a Lender Letter of Credit by such Lender and each payment made by
such Lender in respect of Lender Letters of Credit issued by such Lender.

(b) Letter of Credit Fee. Borrowers shall pay to Administrative Agent, for the
benefit of the Revolving Lenders in accordance with their respective Pro Rata
Shares, a letter of credit fee with respect to the Letter of Credit Liabilities
for each Letter of Credit, computed for each day from the date of issuance of
such Letter of Credit to the date that is the last day a drawing is available
under such Letter of Credit, at a rate per annum equal to the Base Rate Margin
then applicable to Revolving Loans. Such fee shall be payable in arrears on the
last day of each calendar month prior to the Termination Date and on such date.
In addition, Borrowers agree to pay promptly to the LC Issuer any customary
fronting or other fees that it may charge in connection with any Letter of
Credit.

(c) Reimbursement Obligations of Borrowers. If either (i) Administrative Agent
shall make a payment to an LC Issuer pursuant to a Support Agreement, or
(ii) any Lender shall honor any draw request under, and make payment in respect
of, a Lender Letter of Credit, (A) the applicable Borrower shall reimburse
Administrative Agent or such Lender, as applicable, for the amount of such
payment by the end of the day on which Administrative Agent or such Lender shall
make such payment and (B) Borrowers shall be deemed to have immediately
requested that Revolving Lenders make a Revolving Loan, in a principal amount
equal to the amount of such payment (but solely to the extent such Borrower
shall have failed to directly reimburse Administrative Agent or, with respect to
Lender Letters of Credit, the applicable LC Issuer, for the amount of such
payment). Administrative Agent shall promptly notify Revolving Lenders of any
such deemed request and each Revolving Lender (other than any such Revolving
Lender that was a Non-Funding Lender at the time the applicable Supported Letter
of Credit or Lender Letter of Credit was issued) hereby agrees to make available
to Administrative Agent not later than noon (Chicago time) on the Business Day
following such notification from Administrative Agent such Revolving Lender’s
Pro Rata Share of such Revolving Loan. Each Revolving Lender (other than any
applicable Non-Funding Lender specified above) hereby absolutely and
unconditionally agrees to fund such Revolving Lender’s Pro Rata Share of the
Loan described in the immediately preceding sentence, unaffected by any
circumstance whatsoever, including, without limitation, (x) the occurrence and
continuance of a Default or Event of Default, (y) the fact that, whether before
or after giving effect to the making of any such Revolving Loan, the Revolving
Loan Outstandings exceed or will exceed the Revolving Loan Limit, and/or (z) the
non-satisfaction of

 

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any conditions set forth in Section 7.2. Administrative Agent hereby agrees to
apply the gross proceeds of each Revolving Loan deemed made pursuant to this
Section 2.5(c) in satisfaction of Borrowers’ reimbursement obligations arising
pursuant to this Section 2.5(c). Borrowers shall pay interest, on demand, on all
amounts so paid by Administrative Agent pursuant to any Support Agreement or to
any applicable Lender in honoring a draw request under any Lender Letter of
Credit for each day from the date of such payment until Borrowers reimburse
Administrative Agent or the applicable Lender therefore (whether pursuant to
clause (A) or (B) of the first sentence of this subsection (c)) at a rate per
annum equal to the sum of two percent (2%) plus the interest rate applicable to
Revolving Loans for such day.

(d) Reimbursement and Other Payments by Borrowers. The obligations of each
Borrower to reimburse Administrative Agent and/or the applicable LC Issuer
pursuant to Section 2.5(c) shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement,
under all circumstances whatsoever, including the following:

(i) any lack of validity or enforceability of, or any amendment or waiver of or
any consent to departure from, any Letter of Credit or any related document;

(ii) the existence of any claim, set-off, defense or other right which any
Borrower may have at any time against the beneficiary of any Letter of Credit,
the LC Issuer (including any claim for improper payment), Administrative Agent,
any Lender or any other Person, whether in connection with any Financing
Document or any unrelated transaction, provided, however, that nothing herein
shall prevent the assertion of any such claim by separate suit or compulsory
counterclaim;

(iii) any statement or any other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;

(iv) any affiliation between the LC Issuer and Administrative Agent; or

(v) to the extent permitted under applicable law, any other circumstance or
happening whatsoever, whether or not similar to any of the foregoing.

(e) Deposit Obligations of Borrowers. In the event any Letters of Credit are
outstanding at the time that Borrowers prepay or are required to repay the
Obligations or the Revolving Loan Commitment is terminated, Borrowers shall
(i) deposit with Administrative Agent for the benefit of all Revolving Lenders
cash in an amount equal to one hundred and five percent (105%) of the aggregate
outstanding Letter of Credit Liabilities to be available to Administrative
Agent, for its benefit and the benefit of issuers of Letters of Credit, to
reimburse payments of drafts drawn under such Letters of Credit and pay any fees
and expenses related thereto, and (ii) prepay the fee payable under
Section 2.5(b) with respect to such Letters of Credit for the full remaining
terms of such Letters of Credit assuming that the full amount of such Letters of
Credit as of the date of such repayment or termination remain outstanding until
the end of such remaining terms. Upon termination of any such Letter of Credit
and provided no Event of Default has occurred and is continuing, the unearned
portion of such prepaid fee attributable to such Letter of Credit shall be
refunded to Borrowers, together with the deposit described in the preceding
clause (i) to the extent not previously applied by Administrative Agent in the
manner described herein.

(f) Participations in Support Agreements and Lender Letters of Credit.

(i) Concurrently with the issuance of each Supported Letter of Credit,
Administrative Agent shall be deemed to have sold and transferred to each
Revolving Lender (other than any Non-Funding Lenders at the time of such
issuance), and each such Revolving Lender shall be deemed irrevocably and
immediately to have purchased and received from Administrative Agent, without
recourse or warranty, an undivided interest and participation in, to the extent
of such Lender’s Pro Rata Share of the Revolving Loan Commitment, Administrative
Agent’s Support Agreement liabilities and obligations in respect of such
Supported Letter of Credit and Borrowers’ Reimbursement Obligations with respect
thereto. Concurrently with the issuance of each Lender Letter of Credit, the LC
Issuer in respect thereof shall be deemed to have sold and transferred to each
Revolving Lender (other than

 

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any Non-Funding Lenders at the time of such issuance), and each such Revolving
Lender shall be deemed irrevocably and immediately to have purchased and
received from such LC Issuer, without recourse or warranty, an undivided
interest and participation in, to the extent of such Lender’s Pro Rata Share of
the Revolving Loan Commitment, such Lender Letter of Credit and Borrowers’
Reimbursement Obligations with respect thereto. Any purchase obligation arising
pursuant to the immediately two preceding sentences shall be absolute and
unconditional and shall not be affected by any circumstances whatsoever.

(ii) If either (x) Administrative Agent makes any payment or disbursement under
any Support Agreement and/or (y) an LC Issuer makes any payment or disbursement
under any Lender Letter of Credit, and (A) Borrowers have not reimbursed
Administrative Agent or the applicable LC Issuer, as applicable, in full for
such payment or disbursement in accordance with Section 2.5(c), or (B) any
reimbursement under any Support Agreement or Lender Letter of Credit received by
Administrative Agent or any LC Issuer, as applicable, from Borrowers is or must
be returned or rescinded upon or during any bankruptcy or reorganization of any
Credit Party or otherwise, each Revolving Lender (other than any Revolving
Lender that was a Non-Funding Lender at the time of the issuance of such
Supported Letter of Credit or Lender Letter of Credit) shall be irrevocably and
unconditionally obligated to pay to Administrative Agent or the applicable LC
Issuer, as applicable, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the Obligations of Borrowers under
Section 2.5(c)). To the extent any such Revolving Lender shall not have made
such amount available to Administrative Agent or the applicable LC Issuer, as
applicable, by noon (Chicago time) on the Business Day on which such Lender
receives notice from Administrative Agent or the applicable LC Issuer, as
applicable, of such payment or disbursement, or return or rescission, as
applicable, such Lender agrees to pay interest on such amount to Administrative
Agent or the applicable LC Issuer, as applicable, forthwith on demand accruing
daily at the Federal Funds Rate, for the first three (3) days following such
Lender’s receipt of such notice, and thereafter at the Base Rate plus the Base
Rate Margin in respect of Revolving Loans. Any Revolving Lender’s failure to
make available to Administrative Agent or the applicable LC Issuer, as
applicable, its Pro Rata Share of any such payment or disbursement, or return or
rescission, as applicable, shall not relieve any other Lender of its obligation
hereunder to make available such other Revolving Lender’s Pro Rata Share of such
payment, but no Revolving Lender shall be responsible for the failure of any
other Lender to make available such other Lender’s Pro Rata Share of any such
payment or disbursement, or return or rescission.

Section 2.6 General Provisions Regarding Payment; Loan Account.

(a) All payments to be made by each Borrower under any Financing Document,
including payments of principal and interest made hereunder and pursuant to any
other Financing Document, and all fees, expenses, indemnities and
reimbursements, shall be made without set-off, recoupment or counterclaim, in
lawful money of the United States and in immediately available funds. If any
payment hereunder 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 (it being understood and agreed that,
solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in
full, on any such extended due date, such payment shall be deemed to have been
paid on the original due date without giving effect to any extension thereto).
Any payments received in the Payment Account before noon (Chicago time) on any
date shall be deemed received by Administrative Agent on such date, and any
payments received in the Payment Account after noon (Chicago time) on any date
shall be deemed received by Administrative Agent on the next succeeding Business
Day. Unless otherwise specified herein, the settlement of all payments and
fundings hereunder between or among the parties hereto shall be made in lawful
money of the United States and in immediately available funds.

(b) Administrative Agent shall endeavor to provide Borrowers with a monthly
statement regarding the Loans hereunder (but neither Administrative Agent nor
any Lender shall have any liability if Administrative Agent shall fail to
provide any such statement). Unless any Borrower notifies Administrative Agent
of any objection to any such statement (specifically describing the basis for
such objection) within ninety (90) days after the date of receipt thereof, it
shall be deemed final, binding and conclusive upon Borrowers in all respects as
to all matters reflected therein, absent manifest error.

 

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Section 2.7 Maximum Interest. In no event shall the interest charged with
respect to the Loans or any other Obligations of any Borrower under any
Financing Document exceed the maximum amount permitted under the laws of the
State of New York or of any other applicable jurisdiction. Notwithstanding
anything to the contrary herein or elsewhere, if at any time the rate of
interest payable hereunder or under any Note or other Financing Document (the
“Stated Rate”) would exceed the highest rate of interest permitted under any
applicable law to be charged (the “Maximum Lawful Rate”), then for so long as
the Maximum Lawful Rate would be so exceeded, the rate of interest payable shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the Stated Rate is less than the Maximum Lawful Rate, each Borrower
shall, to the extent permitted by law, continue to pay interest at the Maximum
Lawful Rate until such time as the total interest received is equal to the total
interest which would have been received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the interest
rate payable shall be the Stated Rate unless and until the Stated Rate again
would exceed the Maximum Lawful Rate, in which event this provision shall again
apply. In no event shall the total interest received by any Lender exceed the
amount which it could lawfully have received had the interest been calculated
for the full term hereof at the Maximum Lawful Rate. If, notwithstanding the
prior sentence, any Lender has received interest hereunder in excess of the
Maximum Lawful Rate, such excess amount shall be applied to the reduction of the
principal balance of the Loans or to other amounts (other than interest) payable
hereunder, and if no such principal or other amounts are then outstanding, such
excess or part thereof remaining shall be paid to Borrowers. Any such reduction
in the principal balance shall be applied to the Obligations owing to Lenders in
accordance with the Pro Rata Share of each Lender. In computing interest payable
with reference to the Maximum Lawful Rate applicable to any Lender, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made.

Section 2.8 Taxes; Capital Adequacy.

(a) All payments of principal and interest on the Loans and all other amounts
payable hereunder shall be made free and clear of and without deduction for any
present or future income, excise, stamp, documentary, payroll, employment,
property or franchise taxes and other taxes, fees, duties, levies, assessments,
withholdings or other charges of any nature whatsoever (including interest and
penalties thereon) imposed by any taxing authority, excluding taxes imposed on
or measured by Administrative Agent’s or any Lender’s net income by the
jurisdictions under which Administrative Agent or such Lender is organized or
conducts business (other than solely as the result of entering into any of the
Financing Documents or taking any action thereunder) (all non-excluded items
being called “Taxes”). If any withholding or deduction from any payment to be
made by any Borrower hereunder is required in respect of any Taxes pursuant to
any applicable Law, then Borrowers will: (i) pay directly to the relevant
authority the full amount required to be so withheld or deducted; (ii) promptly
forward to Administrative Agent an official receipt or other documentation
satisfactory to Administrative Agent evidencing such payment to such authority;
and (iii) pay to Administrative Agent for the account of Administrative Agent
and Lenders such additional amount or amounts as is necessary to ensure that the
net amount actually received by Administrative Agent and each Lender will equal
the full amount Administrative Agent and such Lender would have received had no
such withholding or deduction been required. If any Taxes are directly asserted
against Administrative Agent or any Lender with respect to any payment received
by Administrative Agent or such Lender hereunder, Administrative Agent or such
Lender may pay such Taxes and upon written demand by Administrative Agent (which
shall be accompanied by a statement setting forth the basis for such a demand
and the calculation of the amount due) Borrowers will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted so long as such
amounts have accrued on or after the day which is two hundred seventy (270) days
prior to the date on which Administrative Agent or such Lender first made
written demand therefor.

(b) If any Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Administrative Agent, for the account of
Administrative Agent and the respective Lenders, the required receipts or other
required documentary evidence, Borrowers shall indemnify Administrative Agent
and Lenders for any incremental Taxes, interest or penalties that may become
payable by Administrative Agent or any Lender as a result of any such failure.

 

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(c) Each Lender that (i) is organized under the laws of a jurisdiction other
than the United States, and (ii)(A) is a party hereto on the Closing Date or
(B) purports to become an assignee of an interest as a Lender under this
Agreement after the Closing Date (unless such Lender was already a Lender
hereunder immediately prior to such assignment) (each such Lender a “Foreign
Lender”) shall execute and deliver to each of Borrowers and Administrative Agent
one or more (as Borrowers or Administrative Agent may reasonably request) United
States Internal Revenue Service Forms W-8ECI, W-8BEN, W-8IMY (as applicable) and
other applicable forms, certificates or documents prescribed by the United
States Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender’s entitlement to a complete exemption from
withholding or deduction of Taxes. Borrowers shall not be required to pay
additional amounts to any Lender pursuant to this Section 2.8 with respect to
United States withholding and income Taxes to the extent that the obligation to
pay such additional amounts would not have arisen but for the failure of such
Lender to comply with this paragraph other than as a result of a change in law.

(d) If any Lender shall determine in its commercially reasonable judgment that
the adoption or taking effect of, or any change in, any applicable Law regarding
capital adequacy, in each instance, after the Closing Date, or any change after
the Closing Date in the interpretation, administration or application thereof by
any Governmental Authority, central bank or comparable agency charged with the
interpretation, administration or application thereof, or the compliance by any
Lender or any Person controlling such Lender with any request, guideline or
directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency adopted or
otherwise taking effect after the Closing Date, has or would have the effect of
reducing the rate of return on such Lender’s or such controlling Person’s
capital as a consequence of such Lender’s obligations hereunder or under any
Support Agreement or Lender Letter of Credit to a level below that which such
Lender or such controlling Person could have achieved but for such adoption,
taking effect, change, interpretation, administration, application or compliance
(taking into consideration such Lender’s or such controlling Person’s policies
with respect to capital adequacy) then from time to time, upon written demand by
such Lender (which demand shall be accompanied by a statement setting forth the
basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to Administrative Agent), Borrowers
shall promptly pay to such Lender such additional amount as will compensate such
Lender or such controlling Person for such reduction, so long as such amounts
have accrued on or after the day which is two hundred seventy (270) days prior
to the date on which such Lender first made demand therefor.

Section 2.9 Appointment of Borrower Representative. Each Borrower hereby
designates Borrower Representative as its representative and agent on its behalf
for the purposes of giving instructions with respect to and receiving the
disbursement of the proceeds of the Loans, requesting Letters of Credit giving
and receiving all other notices and consents hereunder or under any of the other
Financing Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the
Financing Documents. Borrower Representative hereby accepts such appointment.
Notwithstanding anything to the contrary contained in this Agreement, no
Borrower other than Borrower Representative shall be entitled to take any of the
foregoing actions. The proceeds of each Loan made hereunder shall be advanced to
or at the direction of Borrower Representative and if not used by Borrower
Representative in its business (for the purposes provided in this Agreement)
shall be deemed to be immediately advanced by Borrower Representative to the
appropriate other Borrower hereunder as an intercompany loan (collectively,
“Intercompany Loans”). All Letters of Credit and Support Agreements issued
hereunder shall be issued at Borrower Representative’s request therefor and
shall be allocated to the appropriate Borrower’s Intercompany Loan account by
Borrower Representative. All collections of each Borrower in respect of Accounts
and other proceeds of Collateral of each Borrower received by Administrative
Agent and applied to the Obligations shall be deemed to be repayments of the
Intercompany Loans owing by such Borrower to Borrower Representative. Borrowers
shall maintain accurate books and records with respect to all Intercompany Loans
and all repayments thereof. Administrative Agent and each Lender may regard any
notice or other communication pursuant to any Financing Document from Borrower
Representative as a notice or communication from all Borrowers, and may give any
notice or communication required or permitted to be given to any Borrower or all
Borrowers hereunder to Borrower Representative on behalf of such Borrower or all
Borrowers. Each Borrower agrees that each notice, election, representation and
warranty, covenant, agreement and undertaking made on its behalf by Borrower
Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the
same extent as if the same had been made directly by such Borrower.

 

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Section 2.10 Joint and Several Liability. Borrowers are defined collectively to
include all Persons named as one of the Borrowers herein; provided, however,
that any references herein to “any Borrower”, “each Borrower” or similar
references, shall be construed as a reference to each individual Person named as
one of the Borrowers herein. Each Person so named shall be jointly and severally
liable for all of the obligations of Borrowers under this Agreement. Each
Borrower, individually, expressly understands, agrees and acknowledges, that the
credit facilities would not be made available on the terms herein in the absence
of the collective credit of all of the Persons named as the Borrowers herein,
the joint and several liability of all such Persons, and the
cross-collateralization of the collateral of all such Persons. Accordingly, each
Borrower, individually acknowledges that the benefit to each of the Persons
named as one of the Borrowers as a whole constitutes reasonably equivalent
value, regardless of the amount of the credit facilities actually borrowed by,
advanced to, or the amount of collateral provided by, any individual Borrower.
In addition, each entity named as one of the Borrowers herein hereby
acknowledges and agrees that all of the representations, warranties, covenants,
obligations, conditions, agreements and other terms contained in this Agreement
shall be applicable to and shall be binding upon and measured and enforceable
individually against each Person named as one of the Borrowers herein as well as
all such Persons when taken together. By way of illustration, but without
limiting the generality of the foregoing, the terms of Section 10.1 of this
Agreement are to be applied to each individual Person named as one of the
Borrowers herein (as well as to all such Persons taken as a whole), such that
the occurrence of any of the events described in Section 10.1 of this Agreement
as to any Person named as one of the Borrowers herein shall constitute an Event
of Default even if such event has not occurred as to any other Persons named as
the Borrowers or as to all such Persons taken as a whole.

Section 2.11 Collections and Lockbox Account.

(a) Borrowers shall maintain a lockbox (the “Lockbox”) with a United States
depository institution designated from time to time by Administrative Agent and
reasonably approved by Borrower (the “Lockbox Bank”), subject to the provisions
of this Agreement, and shall execute with the Lockbox Bank a Deposit Account
Control Agreement and such other agreements related to such Lockbox as
Administrative Agent may require. Borrowers shall ensure that all collections of
Accounts are paid directly from Account Debtors into the Lockbox for deposit
into the Lockbox Account and/or directly into the Lockbox Account; provided,
however, unless Administrative Agent shall otherwise direct by written notice to
Borrowers, Borrowers shall be permitted to cause Account Debtors who are
individuals to pay Accounts directly to Borrowers, which Borrowers shall then
administer and apply in the manner required below.

(b) All funds deposited into a Lockbox Account shall be transferred into the
Payment Account by the close of each Business Day.

(c) Notwithstanding anything in any lockbox agreement or Deposit Account Control
Agreement to the contrary, Borrowers agree that they shall be liable for any
fees and charges in effect from time to time and charged by the Lockbox Bank in
connection with the Lockbox and the Lockbox Account, and that Administrative
Agent shall have no liability therefor. Borrowers hereby indemnify and agree to
hold Administrative Agent harmless from any and all liabilities, claims, losses
and demands whatsoever, including reasonable attorneys’ fees and expenses,
arising from or relating to actions of Administrative Agent or the Lockbox Bank
pursuant to this Section or any lockbox agreement or Deposit Account Control
Agreement or similar agreement, except to the extent of such losses arising
solely from Administrative Agent’s gross negligence or willful misconduct.

(d) Administrative Agent shall apply, on a daily basis, all funds transferred
into the Payment Account pursuant to this Section to reduce the outstanding
Revolving Loans in such order of application as Administrative Agent shall
elect. If as the result of collections of Accounts pursuant to the terms and
conditions of this Section a credit balance exists with respect to the Payment
Account, such credit balance shall not accrue interest in favor of Borrowers,
but Administrative Agent shall transfer such funds into an account designated by
Borrower Representative for so long as no Event of Default exists.

(e) To the extent that any collections of Accounts or proceeds of other
Collateral are not sent directly to the Lockbox but are received by any
Borrower, such collections shall be held in trust for the benefit of
Administrative Agent pursuant to an express trust created hereby and immediately
remitted, in the form received, to the applicable Lockbox and Lockbox Account.
No such funds received by any Borrower shall be commingled with

 

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other funds of the Borrowers.

(f) Borrowers acknowledge and agree that compliance with the terms of this
Section is essential, and that Administrative Agent and Lenders will suffer
immediate and irreparable injury and have no adequate remedy at law, if any
Borrower, through acts or omissions, causes or permits Account Debtors to send
payments other than to the Lockbox, or if any Borrower fails to immediately
deposit collections of Accounts or proceeds of other Collateral in the Lockbox
Account as herein required. Accordingly, in addition to all other rights and
remedies of Administrative Agent and Lenders hereunder, Administrative Agent
shall have the right to seek specific performance of the Borrowers’ obligations
under this Section, and any other equitable relief as Administrative Agent may
deem necessary or appropriate, and Borrowers waive any requirement for the
posting of a bond in connection with such equitable relief.

(g) Borrowers shall not, and Borrowers shall not suffer or permit any Credit
Party to, (i) withdraw any amounts from any Lockbox Account, (ii) change the
procedures or sweep instructions under the agreements governing any Lockbox
Accounts, or (iii) send to or deposit in any Lockbox Account any funds other
than payments made with respect to and proceeds of Accounts or other Collateral.
Borrowers shall, and shall cause each Credit Party to, cooperate with
Administrative Agent in the identification and reconciliation on a daily basis
of all amounts received in or required to be deposited into the Lockbox
Accounts. If more than five percent (5%) of the collections of Accounts received
by Borrowers during any given fifteen (15) day period is not identified or
reconciled to the reasonable satisfaction of Administrative Agent within ten
(10) Business Days of receipt, Administrative Agent shall not be obligated to
make further advances under this Agreement until such amount is identified or is
reconciled to the reasonable satisfaction of Administrative Agent, as the case
may be. In addition, if any such amount cannot be identified or reconciled to
the satisfaction of Administrative Agent, Administrative Agent may utilize its
own staff or, if it deems necessary, engage an outside auditor, in either case
at Borrowers’ expense (which in the case of Administrative Agent’s own staff
shall be in accordance with Administrative Agent’s then prevailing customary
charges (plus expenses)), to make such examination and report as may be
necessary to identify and reconcile such amount.

(h) If any Borrower breaches its obligation to direct payments of the proceeds
of the Collateral to the Lockbox Account, Administrative Agent, as the
irrevocably made, constituted and appointed true and lawful attorney for
Borrowers, may, by the signature or other act of any of Administrative Agent’s
officers (without requiring any of them to do so), direct any Account Debtor to
pay proceeds of the Collateral to Borrowers by directing payment to the Lockbox
Account.

ARTICLE 3 – REPRESENTATIONS AND WARRANTIES

To induce Administrative Agent and Lenders to enter into this Agreement and to
make the Loans and other credit accommodations contemplated hereby, each
Borrower hereby represents and warrants to Administrative Agent and each Lender
that:

Section 3.1 Existence and Power. Each Credit Party is an entity as specified on
Schedule 3.1, is duly organized, validly existing and in good standing under the
laws of the jurisdiction specified on Schedule 3.1 and no other jurisdiction,
has the same legal name as it appears in such Credit Party’s Organizational
Documents and an organizational identification number (if any), in each case as
specified on Schedule 3.1, (as such name may be amended in accordance with the
provisions hereof) and has all powers and all Permits necessary or desirable in
the operation of its business as presently conducted or as proposed to be
conducted, except where the failure to have such Permits could not reasonably be
expected to have a Material Adverse Effect. Each Credit Party is qualified to do
business as a foreign entity in each jurisdiction in which it is required to be
so qualified, which jurisdictions as of the Closing Date are specified on
Schedule 3.1, except where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect. Except as set forth on Schedule
3.1, no Credit Party, over the five (5) year period preceding the Closing Date,
(a) has had any name other than its current name, or (b) was incorporated or
organized under the laws of any jurisdiction other than its current jurisdiction
of incorporation or organization.

Section 3.2 Organization and Governmental Authorization; No Contravention;
Binding Effect. The execution, delivery and performance by each Credit Party of
the Financing Documents to which it is a party are

 

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within its powers, have been duly authorized by all necessary action pursuant to
its Organizational Documents, require no further action by or in respect of, or
filing with, any Governmental Authority and do not violate, conflict with or
cause a breach or a default under (a) any Law applicable to any Credit Party or
any of the Organizational Documents of any Credit Party, or (b) any agreement or
instrument binding upon it, except for such violations, conflicts, breaches or
defaults as could not, with respect to this clause (b), reasonably be expected
to have a Material Adverse Effect. This Agreement and each of the other
Financing Documents to which any Credit Party is a party constitutes a valid and
binding agreement or instrument of such Credit Party, enforceable against such
Credit Party in accordance with its respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other similar
laws relating to the enforcement of creditors’ rights generally and by general
equitable principles.

Section 3.3 Capitalization. The authorized equity securities of each of the
Credit Parties as of the Closing Date, including all preemptive or other
outstanding rights, options, warrants, conversion rights or similar agreements
or understandings, are as set forth on Schedule 3.3.

Section 3.4 Financial Information; Solvency. All information delivered to
Administrative Agent and pertaining to the financial condition of any Credit
Party fairly presents in all material respects the financial position of such
Credit Party as of such date in conformity with GAAP (and as to unaudited
financial statements, subject to normal year-end adjustments and the absence of
footnote disclosures). Since December 31, 2006, there has been no material
adverse change in the business, operations, properties, or condition (financial
or otherwise) of any Credit Party. Each Borrower and each additional Credit
Party is Solvent.

Section 3.5 Anti-Terrorism Laws. None of the Credit Parties, their Affiliates or
any of their respective agents acting or benefiting in any capacity in
connection with the transactions contemplated by this Agreement is (i) in
violation of any Anti-Terrorism Law, (ii) engages in or conspires to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law, or (iii) is a Blocked Person. No Credit Party nor, to the
knowledge of any Credit Party, any of its Affiliates or agents acting or
benefiting in any capacity in connection with the transactions contemplated by
this Agreement, (x) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person, or (y) deals in, or otherwise engages in any transaction relating to,
any property or interest in property blocked pursuant to Executive Order
No. 13224, any similar executive order or other Anti-Terrorism Law.

Section 3.6 Full Disclosure. None of the written information (financial or
otherwise) furnished by or on behalf of any Credit Party to Administrative Agent
or any Lender in connection with the consummation of the transactions
contemplated by the Financing Documents and/or in connection with the Financing
Documents after the Closing Date, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which such statements were made. All financial projections delivered to
Administrative Agent and Lenders by Borrowers (or their agents) have been
prepared on the basis of the assumptions stated therein. Subject to any
reasonable and customary assumptions, qualifications and limitation stated
therein, such projections represented such Borrower’s good faith estimate as of
the date thereof of such Borrower’s future financial performance and such
assumptions were believed by such Borrower to be reasonable as of the date
thereof in light of business conditions then prevailing; provided, however, that
Borrowers can give no assurance that any such projections will be attained.

Section 3.7 Interest Rate. The rate of interest paid under the Notes and the
method and manner of the calculation thereof do not violate any usury or other
law or applicable Laws, any of the Organizational Documents or any of the
Financing Documents.

Section 3.8 Taxes. All Federal, state and local tax returns, reports and
statements (including all such with respect to employee income tax withholding,
social security and unemployment taxes) required to be filed by or on behalf of
each Credit Party have been filed with the appropriate Governmental Authorities
in all jurisdictions in which such returns, reports and statements are required
to be filed for all periods for which returns were due and, except to the extent
subject to a Permitted Contest, all taxes (including real property taxes,
employee income tax withholding, social security and unemployment taxes) and
other charges shown to be due and payable in respect

 

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thereof have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for nonpayment thereof (and,
with respect to any employee income tax withholding, social security and
unemployment taxes not yet due, adequate provision for the payment thereof has
been made). Except to the extent subject to a Permitted Contest, all state and
local sales and use Taxes required to be paid by each Credit Party have been
paid.

Section 3.9 Compliance with Covenants. Each Credit Party is in full compliance
with all of the terms and provisions of this Agreement and the other Financing
Documents, specifically including without limitation each of the affirmative and
negative covenants contained in Articles 4 and 5 below, and no Default or Event
of Default has occurred and is continuing.

Section 3.10 Litigation. There is no litigation or governmental proceeding
pending or threatened in writing against any Credit Party in which an adverse
decision could reasonably be expected to have a Material Adverse Effect or which
in any manner draws into question the validity and enforceability of the
Financing Documents.

ARTICLE 4 – AFFIRMATIVE COVENANTS

Each Borrower agrees that, so long as any Credit Exposure exists:

Section 4.1 Financial Statements and Other Reports. Each Borrower will deliver
to Administrative Agent: (1) as soon as available, but no later than forty
(40) days after the last day of each quarter, a company prepared consolidated
balance sheet, cash flow and income statement covering Borrower’s consolidated
operations during the period, prepared under GAAP, consistently applied (subject
to normal year-end adjustments and the absence of footnote disclosures),
certified by a Responsible Officer and in a form acceptable to Administrative
Agent; (2) as soon as available, but no later than ninety (90) days after the
last day of Borrower’s fiscal year, audited consolidated financial statements
prepared under GAAP, consistently applied, together with an unqualified opinion
on the financial statements from an independent certified public accounting firm
acceptable to Administrative Agent in its reasonable discretion; (3) within five
(5) days of delivery or filing thereof, copies of all statements, reports and
notices made available to Borrower’s security holders or to any holders of
Subordinated Debt and copies of all reports and other filings made by Borrower
with any stock exchange on which any securities of any Borrower are traded
and/or the SEC; (4) a prompt report of any legal actions pending or threatened
in writing against any Borrower or any of its Subsidiaries that could result in
damages or costs to any Borrower or any of its Subsidiaries of One Hundred Fifty
Thousand Dollars ($150,000) or more; (5) prompt written notice of an event that
materially and adversely affects the value of any Intellectual Property; and
(6) budgets, sales projections, operating plans and other financial information
and information, reports or statements regarding the Borrowers, their business
and the Collateral as Administrative Agent may from time to time reasonably
request. Each Borrower will, in conjunction with the delivery of each set of
financial statements required under clause (l) above, deliver to Administrative
Agent, a duly completed Compliance Certificate signed by a Responsible Officer
which shall, inter alia, set forth calculations showing compliance with the
financial covenants (if any) set forth in this Agreement. Promptly upon their
becoming available, Borrowers shall deliver to Administrative Agent copies of
all swap agreements or other derivative instruments to which any Borrower is a
party. Each Borrower will, within ten (10) days after the last day of each
month, deliver to Administrative Agent a duly completed Borrowing Base
Certificate signed by a Responsible Officer, with aged listings of accounts
receivable and accounts payable (by invoice date).

Section 4.2 Payment and Performance of Liabilities and Obligations. Each
Borrower will (and will cause each of its Subsidiaries to): (a) pay and
discharge at or prior to maturity, all of their respective obligations and
liabilities, including all tax liabilities of all kind, except for such
obligations and/or liabilities (i) that may be the subject of a Permitted
Contest, and (ii) the nonpayment or nondischarge of which could not reasonably
be expected to have a Material Adverse Effect; (b) maintain in accordance with
GAAP, appropriate reserves for the accrual of all of their respective
obligations and liabilities, including all tax liabilities of all kind; and
(c) not breach or permit any Subsidiary to breach, or permit to exist any
default under, the terms of any Material Contract or any other lease,
commitment, contract, instrument or obligation to which it is a party, or by
which its properties or assets are bound, except for such breaches or defaults
which could not reasonably be expected to have a Material Adverse Effect.

 

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Section 4.3 Maintenance of Existence; Property; Insurance.

(a) Each Borrower will preserve, renew and keep in full force and effect and in
good standing (i) their respective existence and (ii) their respective rights,
privileges and franchises necessary or desirable in the normal conduct of
business.

(b) Each Borrower will, and will cause each of its Subsidiaries to, at all times
be the lawful owner of, have good and marketable title to and be in lawful
possession of, or have valid leasehold interests in, all properties and other
assets (real or personal, tangible, intangible or mixed) purported or reported
to be owned or leased (as the case may be) by such Person. Each Borrower will
keep all property useful and necessary in its business in good working order and
condition, ordinary wear and tear excepted. If all or any part of the Collateral
useful or necessary in its business, or upon which any Borrowing Base is
calculated, becomes damaged or destroyed, each Borrower will promptly and
completely repair and/or restore the affected Collateral in a good and
workmanlike manner, regardless of whether Administrative Agent agrees to
disburse insurance proceeds or other sums to pay costs of the work of repair or
reconstruction.

(c) Each Borrower will, and will cause each of its Subsidiaries to, maintain
(i) all insurance described on Schedule 4.3, upon the terms and with the
coverages and rights in favor of Administrative Agent and Lenders as described
in Schedule 4.3, and (ii) such other insurance coverage in such amounts and with
respect to such risks as Administrative Agent may reasonably from time to time
upon not less than fifteen (15) days’ notice request, consistent with industry
standards; provided, however, that, in no event shall such insurance be in
amounts or with coverage less than, or with carriers with qualifications
inferior to, any of the insurance or carriers in existence as of the Closing
Date (or required to be in existence after the Closing Date under a Financing
Document), as evidenced by the insurance certificates attached hereto as
Schedule 4.3. All such insurance shall be provided by insurers having an A.M.
Best policyholders rating reasonably acceptable to Administrative Agent.
Borrowers will deliver to Administrative Agent and the Lenders (i) at least five
(5) days prior to expiration of any policy of insurance, evidence of renewal of
such insurance upon the terms and conditions herein required, (ii) upon the
request of any Lender through Administrative Agent from time to time full
information as to the insurance carried, (iii) within five (5) days of receipt
of notice from any insurer, a copy of any notice of cancellation, nonrenewal or
material change in coverage from that existing on the date of this Agreement,
and (iv) forthwith, notice of any cancellation or nonrenewal of coverage by any
Borrower. In the event any Borrower (i) fails to maintain the insurance coverage
required by this Agreement, or (ii) fails to provide Administrative Agent with
evidence of the insurance coverage required by this Agreement and such failure
to provide evidence continues for five (5) Business Days, Administrative Agent
may (but shall have no obligation to) purchase insurance at Borrowers’ expense
to protect Administrative Agent’s and each Lender’s interests in the Collateral
and to protect Administrative Agent and Lenders from liability claims relating
to the Borrowers’ operations, and the costs and expenses of Administrative Agent
in obtaining and paying the premiums on any such insurance shall constitute part
of the Obligations for which the Borrowers are jointly and severally liable
hereunder and which are secured by the Collateral. Without limiting the
generality of the foregoing, in the event that any Credit Party shall at any
time receive any insurance proceeds under any property or casualty insurance
maintained by any Credit Party in connection with any casualty event involving
the Collateral, Borrowers shall and shall cause each Credit Party to (regardless
of any rights Borrowers may have under clause (1) of the immediately following
sentence) immediately turn over and deliver to Administrative Agent any and all
such proceeds in the form received together with any necessary endorsement
thereto by any and all applicable Credit Parties.

Section 4.4 Compliance with Laws and Contracts. Each Borrower will, and will
cause each of its Subsidiaries to, comply with the requirements of all
applicable Laws and all Material Contracts, except to the extent that failure to
so comply could not reasonably be expected to (a) have a Material Adverse
Effect, or (b) result in any Lien upon either (i) a material portion of the
assets of any such Person in favor of any Governmental Authority, (ii) any
Intellectual Property, or (iii) any Collateral upon which the Borrowing Base is
calculated. Schedule 4.4 sets forth a complete list of Material Contracts as of
the Closing Date, and the closing on and consummation of the transactions
contemplated by the Financing Documents will not give rise to a right of
termination under any such Material Contract listed on Schedule 4.4 in favor of
any party (other than a Credit Party) to such Material Contract.

Section 4.5 Inspection of Property, Books and Records. Each Borrower will permit
at the sole cost

 

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of Borrowers (subject, however, to any limitations set forth in Section 2.2(i)),
representatives of Administrative Agent and of any Lender to visit and inspect
any of their respective properties, to examine and make abstracts or copies from
any of their respective books and records, to conduct a collateral audit and
analysis of their respective operations and the Collateral, and to discuss their
respective affairs, finances and accounts with their respective officers,
employees and independent public accountants as often as may reasonably be
desired. In the absence of an Event of Default, Administrative Agent or any
Lender exercising any rights pursuant to this Section shall give the applicable
Borrower or any applicable Subsidiary commercially reasonable prior notice of
such exercise. No notice shall be required during the existence and continuance
of any Event of Default or any time during which Administrative Agent reasonably
believes an Event of Default exists.

Section 4.6 Use of Proceeds. Borrowers shall use the proceeds of Revolving Loans
solely for solely for working capital needs of Borrowers and their Subsidiaries.
No portion of the proceeds of the Loans will be used for family, personal,
agricultural or household use.

Section 4.7 Estoppel Certificates. After written request by Administrative
Agent, Borrowers, within fifteen (15) days and at their expense, will furnish
Administrative Agent with a statement, duly acknowledged and certified, setting
forth (a) the amount of the original principal amount of the Notes, and the
unpaid principal amount of the Notes, (b) the rate of interest of the Notes,
(c) the date payments of interest and/or principal were last paid, (d) any
offsets or defenses to the payment of the Obligations, and if any are alleged,
the nature thereof, (e) that the Notes and this Agreement have not been modified
or if modified, giving particulars of such modification, and (f) that there has
occurred and is then continuing no Default or Event of Default or if such
Default or Event of Default exists, the nature thereof, the period of time it
has existed, and the action being taken to remedy such Default or Event of
Default. After written request by Administrative Agent, Borrowers, within
fifteen (15) days and at their expense, will furnish Administrative Agent with a
certificate, signed by a Responsible Officer of Borrowers, updating all of the
representations and warranties contained in this Agreement and the other
Financing Documents and certifying that all of the representations and
warranties contained in this Agreement and the other Financing Documents, as
updated pursuant to such certificate, are true, accurate and complete as of the
date of such certificate.

Section 4.8 Notices of Certain Events.

(a) Borrowers will give prompt written notice to Administrative Agent (a) of any
litigation or governmental proceedings pending or threatened (in writing)
against Borrowers or other Credit Party which would reasonably be expected to
have a Material Adverse Effect with respect to Borrowers or any other Credit
Party or which in any manner calls into question the validity or enforceability
of any Financing Document, (b) upon any Borrower becoming aware of the existence
of any Default or Event of Default, (c) if any Credit Party is in breach or
default under or with respect to any Material Contract, or if any Credit Party
is in breach or default under or with respect to any other contract, agreement,
lease or other instrument to which it is a party or by which its property is
bound or affected, which breach or default could reasonably be expected to have
a Material Adverse Effect, (d) of any strikes or other labor disputes pending
or, to any Borrower’s knowledge, threatened against any Credit Party, (e) if
there is any infringement or written claim of infringement by any other Person
with respect to any Intellectual Property rights of any Credit Party that could
reasonably be expected to have a Material Adverse Effect, or if there is any
claim by any other Person that that any Credit Party in the conduct of its
business is infringing on the Intellectual Property Rights of others, and (f) of
all returns, recoveries, disputes and claims that involve more than Two Hundred
Fifty Thousand Dollars ($250,000). Borrowers represent and warrant that Schedule
4.8 sets forth a complete list of all matters existing as of the Closing Date
for which notice could be required under this Section and all litigation or
governmental proceedings pending or threatened (in writing) against Borrowers or
other Credit Party as of the Closing Date.

(b) Without limiting the generality of the foregoing, Borrowers will give prompt
written notice to Administrative Agent (a) of the issuance of any notice,
notification, demand, request for information, citation, summons, complaint or
order, filing of any complaint, assessment of any penalty or initiation or
initiation or threat to initiate any investigation or review , in each such case
whether by any Governmental Authority or other Person, with respect to any
(i) alleged violation by any Credit Party of any Environmental Law, (ii) alleged
failure by any Credit Party to have any Permits relating to or granted under any
Environmental Law required in connection with the conduct of its business or to
comply with the terms and conditions thereof, except where the failure to have
such

 

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Permits relating to or granted under any Environmental Law could not reasonably
be expected to have a Material Adverse Effect, (iii) any generation, treatment,
storage, recycling, transportation or disposal of any Hazardous Materials, or
(iv) release of Hazardous Materials; (b) if any property now owned or leased by
any Credit Party or, to the knowledge of any Borrower, any property previously
owned or leased by any Credit Party, to which any Credit Party has, directly or
indirectly, transported or arranged for the transportation of any Hazardous
Materials, becomes listed or, to any Borrower’s knowledge, becomes proposed for
listing, on the National Priorities List promulgated pursuant to CERCLA, or
CERCLIS (as defined in CERCLA) or any similar state list or becomes the subject
of Federal, state or local enforcement actions or, to the knowledge of any
Borrower, other investigations which may lead to claims against any Credit Party
for clean-up costs, remedial work, damage to natural resources or personal
injury claims, including, without limitation, claims under CERCLA. Borrowers
represent and warrant that Schedule 4.8 sets forth a complete list of all
matters existing as of the Closing Date for which notice could be required under
this Section. For purposes of this Section 4.8(b), each Credit Party shall be
deemed to include any business or business entity (including a corporation) that
is, in whole or in part, a predecessor of such Credit Party.

Section 4.9 Intellectual Property. Each Credit Party shall own, or be licensed
to use or otherwise have the right to use, all Intellectual Property that is
material to the condition (financial or other), business or operations of such
Credit Party. All Intellectual Property existing as of the Closing Date and
registered with any United States or foreign Governmental Authority (including
without limitation any and all applications for the registration of any
Intellectual Property with any such United States or foreign Governmental
Authority) and all licenses under which any Borrower is the licensee of any such
registered Intellectual Property (or any such application for the registration
of Intellectual Property) owned by another Person are set forth on Schedule 4.9.
Such Schedule 4.9 indicates in each case whether such registered Intellectual
Property (or application therefor) is owned or licensed by such Credit Party,
and in the case of any such licensed registered Intellectual Property (or
application therefor), lists the name and address of the licensor and the name
and date of the agreement pursuant to which such item of Intellectual Property
is licensed and whether or not such license is an exclusive license and
indicates whether there are any purported restrictions in such license on the
ability to such Credit Party to grant a security interest in and/or to transfer
any of its rights as a licensee under such license. Except as indicated on
Schedule 4.9, and except for Permitted Asset Dispositions, the applicable Credit
Party is and all times shall be the sole and exclusive owner of the entire and
unencumbered right, title and interest in and to each such registered
Intellectual Property (or application therefor) purported to be owned by such
Borrower, free and clear of any Liens and/or licenses in favor of third parties
or agreements or covenants not to sue such third parties for infringement. All
Intellectual Property of each Credit Party is and shall be fully protected
and/or duly and properly registered, filed or issued in the appropriate office
and jurisdictions for such registrations, filings or issuances, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect. Borrowers shall not become a party to, nor become bound by, any material
license or other agreement with respect to which any Borrower is the licensee
that prohibits or otherwise restricts such Borrower from granting a security
interest in such Borrower’s interest in such license or agreement or other
property. Each Credit Party shall at all times conduct its business without
infringement or claim of infringement of any Intellectual Property rights of
others. Each Credit Party shall, to the extent it determines, in the exercise of
its reasonable business judgment, that it is prudent to do the following:
(a) protect, defend and maintain the validity and enforceability of its
Intellectual Property; (b) promptly advise Administrative Agent in writing of
material infringements of its Intellectual Property; and (c) not allow any
Intellectual Property material to Borrower’s business to be abandoned, forfeited
or dedicated to the public without Administrative Agent’s written consent.

Section 4.10 Further Assurances.

(a) Each Borrower will, at its own cost and expense, cause to be promptly and
duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as may from time to time be necessary or as
Administrative Agent or the Required Lenders may from time to time reasonably
request in order to carry out the intent and purposes of the Financing Documents
and the transactions contemplated thereby.

(b) Upon receipt of an affidavit of an officer of Administrative Agent or a
Lender as to the loss, theft, destruction or mutilation of any Note or any other
Financing Document which is not of public record, and, in the case of any such
mutilation, upon surrender and cancellation of such Note or other applicable
Financing Document, Borrowers will issue, in lieu thereof, a replacement Note or
other applicable Financing Document, dated the date of

 

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such lost, stolen, destroyed or mutilated Note or other Financing Document in
the same principal amount thereof and otherwise of like tenor.

(c) Upon the request of Administrative Agent, Borrowers shall obtain a
landlord’s agreement or mortgagee agreement, as applicable, from the lessor of
each leased property or mortgagee of owned property with respect to any business
location where any portion of the Collateral included in or proposed to be
included in the Borrowing Base, or the records relating to such Collateral
and/or software and equipment relating to such records or Collateral, is stored
or located, which agreement or letter shall be reasonably satisfactory in form
and substance to Administrative Agent. Borrowers shall timely and fully pay and
perform its obligations under all leases and other agreements with respect to
each leased location where any Collateral, or any records related thereto, is or
may be located.

(d) Before the Closing Date, and thereafter (as and when determined by
Administrative Agent in its discretion), Administrative Agent shall have the
right to perform, all at Borrowers’ expense, the searches described in clauses
(a), (b), (c) and (d) below against Borrowers and any other Credit Party, the
results of which are to be consistent with Borrowers’ representations and
warranties under this Agreement and the satisfactory results of which shall be a
condition precedent to all advances of Loan proceeds, all issuances of Lender
Letters of Credit and all undertakings in respect of Support Agreements: (a) UCC
searches with the Secretary of State of each jurisdiction in which the
applicable Person is organized, and, if applicable, local UCC fixture filings
searches in each jurisdiction where any real estate Collateral or fixtures
Collateral is located; (b) judgment, pending litigation, federal tax lien,
personal property tax lien, and corporate and partnership tax lien searches, in
the state and/or local filing offices (as applicable) of each jurisdiction where
the applicable Person maintains its executive offices, a place of business, or
assets and the jurisdiction in which the applicable Person is organized;
(c) real property title and lien searches in each jurisdiction in which any real
property Collateral is located; and (d) searches of applicable corporate,
limited liability company, partnership and related records to confirm the
continued existence, organization and good standing of the applicable Person and
the exact legal name under which such Person is organized.

(e) Upon the request of Administrative Agent, Borrowers shall make available to
Administrative Agent, without expense to Administrative Agent, Borrowers and
their officers, employees and agents and Borrowers’ books and records, to the
extent that Administrative Agent may deem them reasonably necessary to prosecute
or defend any third-party suit or proceeding instituted by or against
Administrative Agent or any Lender with respect to the Financing Documents, any
Collateral or relating to any Borrower.

Section 4.11 Power of Attorney. Each of the officers of Administrative Agent is
hereby irrevocably made, constituted and appointed the true and lawful attorney
for Borrowers (without requiring any of them to act as such) with full power of
substitution to do the following: (a) endorse the name of Borrowers upon any and
all checks, drafts, money orders, and other instruments for the payment of money
that are payable to Borrowers and constitute collections on Borrowers’ Accounts;
(b) so long as Administrative Agent has provided not less than three
(3) Business Days’ prior written notice to Borrowers to perform the same and
Borrowers have failed to take such action, execute in the name of Borrowers any
schedules, assignments, instruments, documents, and statements that Borrowers
are obligated to give Administrative Agent under this Agreement; (c) after the
occurrence and during the continuance of an Event of Default, take any action
Borrowers are required to take under this Agreement; (d) so long as
Administrative Agent has provided not less than three (3) Business Days’ prior
written notice to Borrowers to perform the same and Borrowers have failed to
take such action, do such other and further acts and deeds in the name of
Borrowers that Administrative Agent may deem necessary or desirable to enforce
any Account or other Collateral or perfect Administrative Agent’s security
interest or Lien in any Collateral; and (e) after the occurrence and during the
continuance of an Event of Default, do such other and further acts and deeds in
the name of Borrowers that Administrative Agent may deem necessary or desirable
to enforce its rights with regard to any Account or other Collateral. This power
of attorney shall be irrevocable and coupled with an interest.

Section 4.12 Post Closing Requirements. Borrowers shall complete each of the
post closing obligations and/or provide to Administrative Agent each of the
documents, instruments, agreements and information listed on Schedule 4.12
attached hereto on or before the date set forth for each such item thereon, each
of which shall be completed or provided in form and substance satisfactory to
Administrative Agent.

 

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Section 4.13 Hazardous Materials; Remediation.

(a) If any release or disposal of Hazardous Materials shall occur or shall have
occurred on any real property or any other assets of any Borrower or any
Subsidiary or any other Credit Party, such Borrower will cause, or direct the
applicable Subsidiary or Credit Party to cause, the prompt containment and
removal of such Hazardous Materials and the remediation of such real property or
other assets as is necessary to comply with all Environmental Laws and to
preserve the value of such real property or other assets. Without limiting the
generality of the foregoing, each Borrower shall, and shall cause each other
Subsidiary and Credit Party to, materially comply with each Environmental Law
requiring the performance at any real property by any Borrower or any other
Subsidiary or Credit Party of activities in response to the release or
threatened release of a Hazardous Material.

(b) Borrowers will provide Agent within thirty (30) days after written demand
therefor with a bond, letter of credit or similar financial assurance evidencing
to the reasonable satisfaction of Agent that sufficient funds are available to
pay the cost of removing, treating and disposing of any Hazardous Materials or
Hazardous Materials Contamination and discharging any assessment which may be
established on any property as a result thereof, such demand to be made, if at
all, upon Agent’s reasonable business determination that the failure to remove,
treat or dispose of any Hazardous Materials or Hazardous Materials
Contamination, or the failure to discharge any such assessment could reasonably
be expected to have a Material Adverse Effect.

Section 4.14 Updates of Representations. Borrowers shall deliver to
Administrative Agent within ten (10) days of the written request of
Administrative Agent an Officer’s Certificate updating all of the
representations and warranties contained in this Agreement and the other
Financing Documents and certifying that all of the representations and
warranties contained in this Agreement and the other Financing Documents, as
updated pursuant to such Officer’s Certificate, are true, accurate and complete
as of the date of such Officer’s Certificate.

ARTICLE 5 – NEGATIVE COVENANTS

Each Borrower agrees that, so long as any Credit Exposure exists:

Section 5.1 Debt; Contingent Obligations. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, create, incur, assume, guarantee or
otherwise become or remain directly or indirectly liable with respect to, any
Debt, except for Permitted Indebtedness. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, create, assume, incur or suffer to exist
any Contingent Obligations, except for Permitted Contingent Obligations.

Section 5.2 Liens. No Borrower will, or will permit any Subsidiary to, directly
or indirectly, create, assume or suffer to exist any Lien on any asset now owned
or hereafter acquired by it, including, without limitation, a pledge of any
stock or other ownership interests of any Subsidiary, except for Permitted
Liens.

Section 5.3 Restricted Distributions. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Distribution, except for Permitted Distributions.

Section 5.4 Consolidations, Mergers and Sales of Assets; Change in Control. No
Borrower will, or will permit any Subsidiary to, directly or indirectly
(a) consolidate or merge or amalgamate with or into any other Person, or
(b) consummate any Asset Dispositions other than Permitted Asset Dispositions.
No Borrower will suffer or permit to occur any Change in Control with respect to
itself, any Subsidiary or any guarantor of the Obligations.

Section 5.5 Purchase of Assets, Investments; New Subsidiaries.

(a) No Borrower will, or will permit any Subsidiary to, directly or indirectly,
without the prior written consent of Administrative Agent, (a) acquire or enter
into any agreement to acquire any assets other than in the Ordinary Course of
Business or Permitted Acquisitions; (b) engage or enter into any agreement to
engage in any joint venture or partnership with any other Person, other than
Permitted Asset Dispositions; or (c) form, acquire or own or enter into any
agreement to form, acquire or own any Investment in any Person, including any
new

 

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Subsidiary, other than pursuant to Permitted Investments or Permitted
Acquisitions.

(b) Except as set forth in Schedule 5.5 attached hereto, with regard to each
Subsidiary existing as of the Closing Date and upon the formation or acquisition
of a new Subsidiary as part of a Permitted Investment, Borrowers shall
(i) pledge, have pledged or cause or have caused to be pledged to Administrative
Agent pursuant to a pledge agreement in form and substance satisfactory to
Administrative Agent, all (or in the case of each foreign Subsidiary, sixty-five
percent) of the outstanding equity interests of such Subsidiary owned directly
or indirectly by any Borrower, along with undated stock or equivalent powers for
such equity interests, executed in blank; (ii) unless Administrative Agent shall
agree otherwise in writing, cause the Subsidiary to take such other actions
(including entering into or joining any Security Documents) as are necessary or
advisable in the reasonable opinion of the Administrative Agent in order to
grant the Administrative Agent, acting on behalf of the Lenders, a first
priority Lien to secure the Obligations of all Credit Parties on all real and
personal property and leasehold estates of such Subsidiary in existence as of
such date and in all after acquired property; (iii) unless Administrative Agent
shall agree otherwise in writing, cause such Subsidiary to either (at the
election of Administrative Agent) become a Borrower hereunder with joint and
several liability for all obligations of Borrowers hereunder and under the other
Financing Documents pursuant to a joinder agreement or other similar agreement
in form and substance satisfactory to Administrative Agent or to become a
guarantor of the Obligations pursuant to a guaranty and suretyship agreement in
form and substance satisfactory to Administrative Agent; and (iv) cause the
Subsidiary to deliver certified copies of such Subsidiary’s certificate or
articles of incorporation, together with good standing certificates, by-laws (or
other operating agreement or governing documents), resolutions of the Board of
Directors or other governing body, approving and authorizing the execution and
delivery of the Security Documents, incumbency certificates and to execute
and/or deliver such other documents and legal opinions or to take such other
actions as may be requested by the Administrative Agent, in each case, in form
and substance satisfactory to the Administrative Agent.

Section 5.6 Transactions with Affiliates. Except as otherwise disclosed on
Schedule 5.6, and except for transactions that are disclosed to Administrative
Agent in advance of being entered into and which contain terms that are no less
favorable to the applicable Borrower or any Subsidiary, as the case may be, than
those which might be obtained from a third party not an Affiliate of any Credit
Party, no Borrower will, or will permit any Subsidiary to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of any Borrower.

Section 5.7 Modification of Organizational Documents. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, amend or otherwise modify any
Organizational Documents of such Person, except for Permitted Modifications.

Section 5.8 Conduct of Business. No Borrower will, or will permit any Subsidiary
to, directly or indirectly, engage in any line of business other than those
businesses engaged in on the Closing Date and described on Schedule 5.8 and
businesses reasonably related thereto.

Section 5.9 Deposit Accounts and Securities Accounts. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, establish any new Deposit
Account or Securities Account without prior written notice to Administrative
Agent and unless Administrative Agent, such Borrower or such Subsidiary and the
bank, financial institution or securities intermediary at which the account is
to be opened enter into a Deposit Account Control Agreement or Securities
Account Control Agreement prior to or concurrently with the establishment of
such Deposit Account or Securities Account. Borrowers represent and warrant that
Schedule 5.9 lists all of the Deposit Accounts and Securities Accounts of each
Borrower as of the Closing Date. The provisions of this Section requiring
Deposit Account Control Agreements shall not apply to Deposit Accounts
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of Borrowers’ employees and identified to
Administrative Agent by Borrowers as such.

Section 5.10 Payments and Modifications of Subordinated Debt. No Borrower will,
or will permit any Subsidiary to, directly or indirectly, (a) declare, pay, make
or set aside any amount for payment in respect of Subordinated Debt unless
permitted pursuant to the applicable Subordination Agreement or (b) amend or
otherwise modify the terms of any Subordinated Debt if the effect of such
amendment or modification is to (i) increase the

 

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interest rate or fees on, or change the manner or timing of payment of, such
Subordinated Debt; (ii) change the dates upon which payments of principal or
interest are due on, or the principal amount of, such Subordinated Debt;
(iii) change any event of default or add or make more restrictive any covenant
with respect to such Subordinated Debt; (iv) change the prepayment provisions of
such Subordinated Debt or any of the defined terms related thereto; (v) change
the subordination provisions thereof (or the subordination terms of any
guarantee thereof); (vi) change or amend any other term if such change or
amendment would materially increase the obligations of the obligor or confer
additional material rights on the holder of such Subordinated Debt in a manner
adverse to any Borrower, any Subsidiaries, Administrative Agent or Lenders; or
(viii) otherwise conflict with the terms of or be prohibited under the terms of
any Subordination Agreement applicable thereto. Each Borrower shall, prior to
entering into any such amendment or modification, deliver to Administrative
Agent reasonably in advance of the execution thereof, any final or execution
form copy thereof and, if approval of Required Lenders is required by the terms
of this Agreement prior to the taking of any such action, such Borrower agrees
not to take, nor permit any of its Subsidiaries to take, any such action with
respect to any such items without obtaining such approval from Required Lenders.

Section 5.11 Compliance with Anti-Terrorism Laws. Administrative Agent hereby
notifies Borrowers that pursuant to the requirements of Anti-Terrorism Laws, and
Administrative Agent’s policies and practices, Administrative Agent is required
to obtain, verify and record certain information and documentation that
identifies Borrowers and its principals, which information includes the name and
address of each Borrower and its principals and such other information that will
allow Administrative Agent to identify such party in accordance with
Anti-Terrorism Laws. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, knowingly enter into any Material Contracts with any
Blocked Person or any Person listed on the OFAC Lists. Each Borrower shall
immediately notify Administrative Agent if such Borrower has knowledge that any
Borrower or any additional Credit Party becomes a Blocked Person or becomes
listed on the OFAC Lists or (a) is convicted on, (b) pleads nolo contendere to,
(c) is indicted on, or (d) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including, without
limitation, the making or receiving of any contribution of funds, goods or
services to or for the benefit of any Blocked Person, (ii) deal in, or otherwise
engage in any transaction relating to, any property or interests in property
blocked pursuant to Executive Order No. 13224, any similar executive order or
other Anti-Terrorism Law, or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding, or
attempts to violate, any of the prohibitions set forth in Executive Order
No. 13224 or other Anti-Terrorism Law.

Section 5.12 Regulated Entities and Activities; Pensions. No Borrower will, or
will permit any of its Subsidiaries (or, in the case of clauses (c), (d), (e) or
(f), any ERISA Affiliate) to, (a) become an “investment company” or a company
“controlled” by an “investment company” or a “subsidiary” of an “investment
company,” all within the meaning of the Investment Company Act of 1940;
(b) undertake as one of its important activities extending credit to purchase or
carry margin stock (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) or use any of the proceeds of any Loan directly or
indirectly for the purchase of purchasing or carrying, or for the purpose of
reducing or retiring any indebtedness which was originally used to purchase or
carry, any margin stock; (c) maintain or contribute to or become obligated to
maintain or contribute to any Pension Plan or any Multiemployer Plan or incur
any liability under Title IV of ERISA; (d) fail to meet the applicable minimum
funding requirements of ERISA with respect to any ERISA Employee Benefit Plan
(to the extent any such minimum funding requirements exist with respect to any
such ERISA Employee Benefit Plan), or permit a “reportable event”, as defined in
Section 4043(c) of ERISA (other than an event for which the notice requirement
is waived), or a non-exempt prohibited transaction, as described in Section 406
of ERISA, to occur with respect to any Pension Plan, or make any amendment to
any ERISA Employee Benefit Plan which will result or could reasonably be
expected to result in the imposition of a Lien on any property or assets of any
Borrower or any such Subsidiary (or ERISA Affiliate) or the requirement that any
Borrower or any such Subsidiary (or ERISA Affiliate) post a bond or provide
other security under ERISA or the Code; (e) withdraw or permit any such
Subsidiary (or ERISA Affiliate) to withdraw from participation in, permit
partial or complete termination of, or permit the occurrence of any other event
with respect to, any present Pension Plan that could reasonably be expected to
result in any liability of any Borrower to the Pension Benefit Guaranty
Corporation or its successors or any other governmental agency, (f) fail to pay
(or cause its Subsidiaries to pay) all amounts and make all contributions
necessary to fund all present Pension Plans in accordance with their terms, or
fail to fund or make any and all contributions to any “401(k)”,

 

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“profit sharing” or similar defined contribution plan except to the extent that
failure to so fund or make contributions to any such “401(k)”, “profit sharing”
or similar defined contribution plan would not reasonably be expected to have a
Material Adverse Effect, or (f) fail to comply with the Federal Fair Labor
Standards Act.

Section 5.13 Margin Regulations. No Borrower will, or will permit any Subsidiary
to, use any of the proceeds from the Loans, directly or indirectly, for the
purpose of purchasing or carrying any “margin stock” (as defined in Regulation U
of the Federal Reserve Board), for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any “margin
stock” or for any other purpose which might cause any of the Loans to be
considered a “purpose credit” within the meaning of Regulation T, U or X of the
Federal Reserve Board.

Section 5.14 Foreign Bank Accounts. Borrowers will not maintain in excess of One
Million Five Hundred Thousand Dollars ($1,500,000), in the aggregate, of cash,
Investment Property, Securities or other assets in Deposit Accounts or
Securities Accounts maintained outside of the United States. In addition, no
Borrower will deposit or transfer any cash, Investment Property, Securities or
other assets in or to any Deposit Account or Securities Account maintained
outside of the United States at any time that an Event of Default has occurred
and is continuing.

ARTICLE 6 – [RESERVED]

ARTICLE 7 – CONDITIONS

Section 7.1 Conditions to Closing. The obligation of each Lender to make the
initial Loans, of Administrative Agent to issue any Support Agreements on the
Closing Date and of any LC Issuer to issue any Lender Letter of Credit on the
Closing Date shall be subject to the receipt by Administrative Agent of each
agreement, document and instrument set forth on the closing checklist prepared
by Administrative Agent or its counsel, each in form and substance satisfactory
to Administrative Agent and Lenders and their respective counsel, and such other
closing deliverables reasonably requested by Administrative Agent and Lenders,
and to the satisfaction of the following conditions precedent, each to the
satisfaction of Administrative Agent and Lenders and their respective counsel in
their sole discretion: (a) the payment of all fees, expenses and other amounts
due and payable under each Financing Document; (b) the absence, since
December 31, 2006, of any material adverse change in any aspect of the business,
operations, properties, or condition (financial or otherwise) of any Credit
Party or any seller of any assets or business to be purchased by any Borrower
contemporaneous with the Closing Date, or any event or condition which could
reasonably be expected to result in such a material adverse change; and (c) the
receipt by Administrative Agent of such other documents, instruments and/or
agreements as Administrative Agent may reasonably request.

Section 7.2 Conditions to Each Loan, Support Agreement and Lender Letter of
Credit. In addition to the conditions set forth in Section 7.1, the obligation
of the Lenders to make a Loan (other than Revolving Loans made pursuant to
Section 2.5(c)) or an advance in respect of any Loan, of Administrative Agent to
issue any Support Agreement or of any LC Issuer to issue any Lender Letter of
Credit, including on the Closing Date, is subject to the satisfaction of the
following additional conditions, compliance with which shall be determined by
Administrative Agent: (a) the fact that, immediately before and after such
advance or issuance, no Default or Event of Default shall have occurred and be
continuing; (b) the fact that the representations and warranties of each Credit
Party contained in the Financing Documents shall be true, correct and complete
on and as of the date of such advance or issuance, except to the extent that any
such representation or warranty relates to an earlier date in which case such
representation or warranty shall be true and correct as of such earlier date;
and (c) the fact that no Material Adverse Effect shall have occurred and be
continuing with respect to Borrowers or any Credit Party since the date of this
Agreement. Each giving of a Notice of LC Credit Event hereunder, each giving of
a Notice of Borrowing hereunder and each acceptance by any Borrower of the
proceeds of any Loan made hereunder shall be deemed to be (y) a representation
and warranty by each Borrower on the date of such notice or acceptance as to the
facts specified in this Section, and (z) a restatement by each Borrower that
each and every one of the representations made by it in any of the Financing
Documents is true and correct in all material respects (except to the extent
that such

 

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representations and warranties expressly relate solely to an earlier date).

ARTICLE 8 – [RESERVED]

ARTICLE 9 – SECURITY AGREEMENT

Section 9.1 Generally. As security for the payment and performance of the
Obligations, and without limiting any other grant of a Lien and security
interest in any Security Document, Borrowers hereby assign and grant to
Administrative Agent, for the benefit of Lenders and Administrative Agent, a
continuing first priority Lien on and security interest in, upon, and to the
personal property set forth on Schedule 9.1 attached hereto and made a part
hereof. The Administrative Agent and the Lenders hereby acknowledge and agree
that they will not file a security agreement or other filing with the United
States Patent and Trademark Office or the United States Copyright Office with
regard to the Collateral.

Section 9.2 Representations and Warranties and Covenants Relating to Collateral.

(a) Borrowers shall not, and shall not permit any Credit Party to, take any of
the following actions or make any of the following changes unless Borrowers have
given at least thirty (30) days prior written notice to Administrative Agent of
Borrowers’ intention to take any such action (which such written notice shall
include an updated version of any Schedule impacted by such change) and have
executed any and all documents, instruments and agreements and taken any other
actions which Administrative Agent may request after receiving such written
notice in order to protect and preserve the Liens, rights and remedies of
Administrative Agent with respect to the Collateral: (i) change the legal name
or organizational identification number of any Borrower as it appears in
official filings in the jurisdiction of its organization, (ii) change the
jurisdiction of incorporation or formation of any Borrower or Credit Party or
allow any Borrower or Credit Party to designate any jurisdiction as an
additional jurisdiction of incorporation for such Borrower or Credit Party, or
change the type of entity that it is, or (iii) change its chief executive
office, principal place of business, or the location of its records concerning
the Collateral or move any Collateral to or place any Collateral on any location
that is not then listed on the Schedules and/or establish any business location
at any location that is not then listed on the Schedules.

(b) Borrowers shall not adjust, settle or compromise the amount or payment of
any Account, or release wholly or partly any Account Debtor, or allow any credit
or discount thereon (other than adjustments, settlements, compromises, credits
and discounts in the Ordinary Course of Business, made while no Default or Event
of Default exists and in amounts which are not material with respect to the
Account and which, after giving effect thereto, do not cause the Borrowing Base
to be less than the Revolving Loan Outstandings) without the prior written
consent of Administrative Agent, which consent shall not be unreasonably
withheld. Without limiting the generality of this Agreement or any other
provisions of any of the Financing Documents relating to the rights of
Administrative Agent after the occurrence and during the continuance of an Event
of Default, Administrative Agent shall have the right at any time after the
occurrence and during the continuance of an Event of Default to: (i) exercise
the rights of Borrowers with respect to the obligation of any Account Debtor to
make payment or otherwise render performance to Borrowers and with respect to
any property that secures the obligations of any Account Debtor or any other
Person obligated on the Collateral, and (ii) adjust, settle or compromise the
amount or payment of such Accounts.

(c) (i) Borrowers shall deliver to Administrative Agent all Tangible Chattel
Paper and all Instruments and Documents owned by any Borrower and constituting
part of the Collateral duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
Administrative Agent. Borrowers shall provide Administrative Agent with
“control” (as defined in Article 9 of the UCC) of all Electronic Chattel Paper
owned by any Borrower and constituting part of the Collateral by having
Administrative Agent identified as the assignee on the records pertaining to the
single authoritative copy thereof and otherwise complying with the applicable
elements of control set forth in the UCC. Borrowers also shall deliver to
Administrative Agent all security agreements securing any such Chattel Paper and
securing any such Instruments. Borrowers will mark conspicuously all such
Chattel Paper and all such Instruments and Documents with a legend, in form and
substance satisfactory to Administrative Agent, indicating that such Chattel
Paper and such Instruments and Documents are subject to the security interests
and Liens in favor of Administrative Agent created pursuant to

 

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this Agreement and the Security Documents. Borrowers shall comply with all the
provisions of Section 5.9 with respect to the Deposit Accounts and Securities
Accounts of Borrowers.

(ii) Borrowers shall deliver to Administrative Agent all letters of credit on
which any Borrower is the beneficiary and which give rise to Letter-of-Credit
Rights owned by such Borrower which constitute part of the Collateral in each
case duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Administrative Agent.
Borrowers shall take any and all actions as may be necessary or desirable, or
that Administrative Agent may request, from time to time, to cause
Administrative Agent to obtain exclusive “control” (as defined in Article 9 of
the UCC) of any such Letter-of-Credit Rights in a manner acceptable to
Administrative Agent.

(iii) Borrowers shall promptly advise Administrative Agent upon any Borrower
becoming aware that it has any interests in any Commercial Tort Claim that
constitutes part of the Collateral, which such notice shall include descriptions
of the events and circumstances giving rise to such Commercial Tort Claim and
the dates such events and circumstances occurred, the potential defendants with
respect such Commercial Tort Claim and any court proceedings that have been
instituted with respect to such Commercial Tort Claim, and Borrowers shall, with
respect to any such Commercial Tort Claim, execute and deliver to Administrative
Agent such documents as Administrative Agent shall request to perfect, preserve
or protect the Liens, rights and remedies of Administrative Agent with respect
to any such Commercial Tort Claim.

(iv) Except for Accounts and Inventory in an aggregate amount not to exceed One
Hundred Thousand Dollars ($100,000), no Accounts or Inventory or other
Collateral shall at any time be in the possession or control of any warehouse,
consignee, bailee or any of Borrowers’ agents or processors without prior
written notice to Administrative Agent and the receipt by Administrative Agent,
if Administrative Agent has so requested, of warehouse receipts, consignment
agreements or bailee lien waivers (as applicable) satisfactory to Administrative
Agent prior to the commencement of such possession or control. Borrowers have
notified Administrative Agent that Inventory is currently located at the
locations set forth on Schedule 9.2. Borrowers shall, upon the request of
Administrative Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Administrative Agent
created pursuant to this Agreement and the Security Documents, instruct such
Person to hold all such Collateral for Administrative Agent’s account subject to
Administrative Agent’s instructions and shall obtain an acknowledgement from
such Person that such Person holds the Collateral for Administrative Agent’s
benefit.

(v) Upon request of Administrative Agent, Borrowers shall promptly deliver to
Administrative Agent any and all certificates of title, applications for title
or similar evidence of ownership of all such tangible Personal Property and
shall cause Administrative Agent to be named as lienholder on any such
certificate of title or other evidence of ownership. Borrowers shall not permit
any such tangible Personal Property to become Fixtures to real estate unless
such real estate is subject to a Lien in favor of Administrative Agent.

(vi) Each Borrower hereby authorizes Administrative Agent to file without the
signature of such Borrower one or more UCC financing statements relating to
liens on personal property relating to all or any part of the Collateral, which
financing statements may list Administrative Agent as the “secured party” and
such Borrower as the “debtor” and which describe and indicate the collateral
covered thereby as all or any part of the Collateral under the Financing
Documents (including an indication of the collateral covered by any such
financing statement as “all assets” of such Borrower now owned or hereafter
acquired, excluding only the Excluded Property) in such jurisdictions as
Administrative Agent from time to time determines are appropriate, and to file
without the signature of such Borrower any continuations of or corrective
amendments to any such financing statements, in any such case in order for
Administrative Agent to perfect, preserve or protect the Liens, rights and
remedies of Administrative Agent with respect to the Collateral.

(vii) Borrowers shall furnish to Administrative Agent from time to time any
statements and schedules further identifying or describing the Collateral and
any other information, reports or evidence concerning the Collateral as
Administrative Agent may reasonably request from time to time.

Section 9.3 UCC Remedies.

 

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(a) Upon the occurrence of and during the continuance of an Event of Default
under this Agreement or the other Financing Documents, Administrative Agent, in
addition to all other rights, options, and remedies granted to Administrative
Agent under this Agreement or at law or in equity, may exercise, either directly
or through one or more assignees or designees, all rights and remedies granted
to it under all Financing Documents and under the UCC in effect in the
applicable jurisdiction(s) and under any other applicable law; including,
without limitation:

(i) The right to take possession of, send notices regarding, and collect
directly the Collateral, with or without judicial process;

(ii) The right to (by its own means or with judicial assistance) enter any of
Borrowers’ premises and take possession of the Collateral, or render it
unusable, or to render it usable or saleable, or dispose of the Collateral on
such premises in compliance with subsection (iii) below and to take possession
of Borrowers’ original books and records, to obtain access to Borrowers’ data
processing equipment, computer hardware and software relating to the Collateral
and to use all of the foregoing and the information contained therein in any
manner Administrative Agent deems appropriate, without any liability for rent,
storage, utilities, or other sums, and Borrowers shall not resist or interfere
with such action (if Borrowers’ books and records are prepared or maintained by
an accounting service, contractor or other third party agent, Borrowers hereby
irrevocably authorize such service, contractor or other agent, upon notice by
Administrative Agent to such Person that an Event of Default has occurred and is
continuing, to deliver to Administrative Agent or its designees such books and
records, and to follow Administrative Agent’s instructions with respect to
further services to be rendered);

(iii) The right to require Borrowers at Borrowers’ expense to assemble all or
any part of the Collateral and make it available to Administrative Agent at any
place designated by Administrative Agent;

(iv) The right to notify postal authorities to change the address for delivery
of Borrowers’ mail to an address designated by Administrative Agent and to
receive, open and dispose of all mail addressed to any Borrower.

(v) The right to enforce Borrowers’ rights against Account Debtors and other
obligors, including, without limitation, (i) the right to collect Accounts
directly in Administrative Agent’s own name (as agent for Lenders) and to charge
the collection costs and expenses, including attorneys’ fees, to Borrowers, and
(ii) the right, in the name of Administrative Agent or any designee of
Administrative Agent or Borrowers, to verify the validity, amount or any other
matter relating to any Accounts by mail, telephone, telegraph or otherwise,
including, without limitation, verification of Borrowers’ compliance with
applicable Laws. Borrowers shall cooperate fully with Administrative Agent in an
effort to facilitate and promptly conclude such verification process. Such
verification may include contacts between Administrative Agent and applicable
federal, state and local regulatory authorities having jurisdiction over the
Borrowers’ affairs, all of which contacts Borrowers hereby irrevocably
authorize.

(b) Each Borrower agrees that a notice received by it at least ten (10) days
before the time of any intended public sale, or the time after which any private
sale or other disposition of the Collateral is to be made, shall be deemed to be
reasonable notice of such sale or other disposition. If permitted by applicable
law, any perishable Collateral which threatens to speedily decline in value or
which is sold on a recognized market may be sold immediately by Administrative
Agent without prior notice to Borrowers. At any sale or disposition of
Collateral, Administrative Agent may (to the extent permitted by applicable law)
purchase all or any part of the Collateral, free from any right of redemption by
Borrowers, which right is hereby waived and released. Each Borrower covenants
and agrees not to interfere with or impose any obstacle to Administrative
Agent’s exercise of its rights and remedies with respect to the Collateral.
Administrative Agent shall have no obligation to clean-up or otherwise prepare
the Collateral for sale. Administrative Agent may comply with any applicable
state or federal law requirements in connection with a disposition of the
Collateral and compliance will not be considered to adversely affect the
commercial reasonableness of any sale of the Collateral. Administrative Agent
may sell the Collateral without giving any warranties as to the Collateral.
Administrative Agent may specifically disclaim any warranties of title or the
like. This procedure will not be considered to adversely affect the commercial
reasonableness of any sale of the Collateral. If Administrative Agent sells any
of the Collateral upon credit, Borrowers will be credited only with payments
actually made by the purchaser, received by Administrative Agent and applied to
the

 

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indebtedness of the purchaser. In the event the purchaser fails to pay for the
Collateral, Administrative Agent may resell the Collateral and Borrowers shall
be credited with the proceeds of the sale. Borrowers shall remain liable for any
deficiency if the proceeds of any sale or disposition of the Collateral are
insufficient to pay all Obligations.

(c) Without restricting the generality of the foregoing and for the purposes
aforesaid, each Borrower hereby appoints and constitutes Administrative Agent
its lawful attorney-in-fact with full power of substitution in the Collateral,
upon the occurrence and during the continuance of an Event of Default, to use
unadvanced funds remaining under this Agreement or which may be reserved,
escrowed or set aside for any purposes hereunder at any time, or to advance
funds in excess of the face amount of the Notes, to pay, settle or compromise
all existing bills and claims, which may be Liens or security interests, or to
avoid such bills and claims becoming Liens against the Collateral; to execute
all applications and certificates in the name of such Borrower and to prosecute
and defend all actions or proceedings in connection with the Collateral; and to
do any and every act which such Borrower might do in its own behalf; it being
understood and agreed that this power of attorney shall be a power coupled with
an interest and cannot be revoked.

(d) To the extent permissible under applicable agreements, Administrative Agent
and each Lender is hereby granted an irrevocable, non-exclusive, royalty-free
license or other right to use, without charge, Borrowers’ labels, mask works,
rights of use of any name, any other Intellectual Property and advertising
matter, and any similar property as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and, in
connection with Administrative Agent’s exercise of its rights under this
Article, Borrowers’ rights under all licenses and all franchise agreements inure
to Administrative Agent’s and each Lender’s benefit.

ARTICLE 10 – EVENTS OF DEFAULT

Section 10.1 Events of Default.

For purposes of the Financing Documents, the occurrence of any of the following
conditions and/or events, whether voluntary or involuntary, by operation of law
or otherwise, shall constitute an “Event of Default”:

(a) any Borrower shall fail to pay when due any principal, interest, premium or
fee under any Financing Document or any other amount payable under any Financing
Document, in each case within three (3) Business Days after any such principal,
interest or fee becomes due, or there shall occur any default in the performance
of or compliance with Section 2.11 or 4.14;

(b) any Credit Party defaults in the performance of or compliance with any term
contained in this Agreement or in any other Financing Document (other than
occurrences described in other provisions of this Section 10.1 for which a
different grace or cure period is specified or for which no grace or cure period
is specified and thereby constitute immediate Events of Default) and such
default is not remedied by the Credit Party or waived by Administrative Agent
within (i) with respect to any default under Article 5, Section 4.1,
Section 4.3(a), or Section 4.3(c), five (5) days of the occurrence of such
default or the event giving rise to such default; (ii) with respect to all other
matters, twenty (20) days after the Borrower Representative receives notice
thereof from Administrative Agent;

(c) any representation, warranty, certification or statement made by any Credit
Party or any other Person in any Financing Document or in any certificate,
financial statement or other document delivered pursuant to any Financing
Document is incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its terms already
qualified as to materiality) when made (or deemed made);

(d) (i) failure of any Credit Party to pay when due or within any applicable
grace period any principal, interest or other amount on Debt (other than the
Loans), or the occurrence of any breach, default, condition or event with
respect to any Debt (other than the Loans), if the effect of such failure or
occurrence is to cause or to permit the holder or holders of any such Debt to
cause, Debt or other liabilities having an individual principal amount in excess
of One Hundred Fifty Thousand Dollars ($150,000) or having an aggregate
principal amount in excess of One Hundred Fifty Thousand Dollars ($150,000) to
become or be declared due prior to its stated maturity; or (ii) the occurrence
of any breach or default under any terms or provisions of any Subordinated Debt
Document or under any

 

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agreement subordinating the Subordinated Debt to all or any portion of the
Obligations or the occurrence of any event requiring the prepayment of any
Subordinated Debt;

(e) any Credit Party or any Subsidiary of a Borrower shall commence a voluntary
case or other proceeding seeking liquidation, reorganization or other relief
with respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing;

(f) an involuntary case or other proceeding shall be commenced against any
Credit Party or any Subsidiary of a Borrower seeking liquidation, reorganization
or other relief with respect to it or its debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of sixty (60) days; or an
order for relief shall be entered against any Credit Party or any Subsidiary of
a Borrower under applicable federal bankruptcy, insolvency or other similar law
in respect of (i) bankruptcy, liquidation, winding-up, dissolution or suspension
of general operations, (ii) composition, rescheduling, reorganization,
arrangement or readjustment of, or other relief from, or stay of proceedings to
enforce, some or all of the debts or obligations, or (iii) possession,
foreclosure, seizure or retention, sale or other disposition of, or other
proceedings to enforce security over, all or any substantial part of the assets
of such Credit Party or Subsidiary;

(g) (i) institution of any steps by any Person to terminate any Pension Plan of
any Borrower, or any of its Subsidiaries or ERISA Affiliates (if any such
Pension Plan exists) if as a result of such termination any Credit Party or any
ERISA Affiliate could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of One
Hundred Thousand Dollars ($100,000), (ii) a contribution failure occurs with
respect to any Pension Plan of any Borrower, or any of its Subsidiaries or ERISA
Affiliates (if any such Pension Plan exists) sufficient to give rise to a Lien
on any property or assets of any Borrower or any of its Subsidiaries or ERISA
Affiliates under Section 302(f) of ERISA, or (iii) there shall occur any
complete withdrawal or partial withdrawal from a Multiemployer Plan by any
Borrower, or any of its Subsidiaries or ERISA Affiliate (if any such
Multiemployer Plan to which any Borrower, or any of its Subsidiaries or ERISA
Affiliate contributes exists) and the withdrawal liability (without unaccrued
interest) of Borrowers, and their Subsidiaries and ERISA Affiliates to
Multiemployer Plans to which any of them contributes or has contributed
(including any outstanding withdrawal liability that such Borrower, or any
applicable Subsidiary or ERISA Affiliate has incurred on the date of such
withdrawal) exceeds One Hundred Thousand Dollars ($100,000) ;

(h) one or more judgments or orders for the payment of money (not paid or fully
covered by insurance maintained in accordance with the requirements of this
Agreement and as to which the relevant insurance company has acknowledged
coverage) aggregating in excess of $150,000 shall be rendered against any or all
Credit Parties and either (i) enforcement proceedings shall have been commenced
by any creditor upon any such judgments or orders, or (ii) there shall be any
period of twenty (20) consecutive days during which a stay of enforcement of any
such judgments or orders, by reason of a pending appeal, bond or otherwise,
shall not be in effect;

(i) any Lien created by any of the Security Documents shall at any time fail to
constitute a valid and perfected Lien on all of the Collateral purported to be
encumbered thereby, subject to no prior or equal Lien except Permitted Liens, or
any Credit Party shall so assert;

(j) the institution by any Governmental Authority of criminal proceedings
against any Credit Party;

(k) a default or event of default occurs under any guaranty of any portion of
the Obligations;

(l) any Borrower makes any payment on account of any Debt that has been
subordinated to any of the Obligations, other than payments specifically
permitted by the terms of such subordination;

 

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(m) if the Principal Borrower is or becomes an entity whose equity is registered
with the SEC, and/or is publicly traded on and/or registered with a public
securities exchange, the Principal Borrower’s equity fails to remain registered
with the SEC in good standing, and/or such equity fails to remain publicly
traded on and registered with a public securities exchange;

(n) the occurrence of any fact, event or circumstance that has or that could
reasonably be expected to result in a Material Adverse Effect, if such default
shall have continued unremedied for a period of ten (10) days after written
notice from Administrative Agent; or

(o) Administrative Agent determines, based on information available to it and in
its reasonable judgment, that there is a reasonable likelihood that Borrowers
shall fail to comply with one or more financial covenants in Article 6, if any,
during the next succeeding financial reporting period.

All cure periods provided for in this Section shall run concurrently with any
cure period provided for in any applicable Financing Documents under which the
default occurred.

Section 10.2 Acceleration and Suspension or Termination of Revolving Loan
Commitment. Upon the occurrence and during the continuance of an Event of
Default, (a) by notice to Borrower Representative suspend or terminate the
Revolving Loan Commitment and the obligations of Administrative Agent and
Lenders with respect thereto, in whole or in part (and, if in part, each
Lender’s Revolving Loan Commitment shall be reduced in accordance with its Pro
Rata Share), and/or (b) by notice to Borrower Representative declare the
Obligations to be, and the Obligations shall thereupon become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Borrower and Borrowers will pay the same;
provided, however, that in the case of any of the Events of Default specified in
Section 10.1(e) or 10.1(f) above, without any notice to any Borrower or any
other act by Administrative Agent or the Lenders, the Revolving Loan Commitment
and the obligations of Administrative Agent and the Lenders with respect thereto
shall thereupon immediately and automatically terminate and all of the
Obligations shall become immediately and automatically due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Borrower and Borrowers will pay the same.

Section 10.3 Cash Collateral. If (a) any Event of Default specified in
Section 10.1(e) or 10.1(f) shall occur, (b) the Obligations shall have otherwise
been accelerated pursuant to Section 10.2, or (c) the Revolving Loan Commitment
and the obligations of Administrative Agent and the Lenders with respect thereto
shall have been terminated pursuant to Section 10.2, then without any request or
the taking of any other action by Administrative Agent or the Lenders, Borrowers
shall immediately comply with the provisions of Section 2.5(e) with respect to
the deposit of cash collateral to secure the existing Letter of Credit Liability
and future payment of related fees.

Section 10.4 Default Rate of Interest. At the election of Administrative Agent
or Required Lenders, after the occurrence of an Event of Default and for so long
as it continues, (a) the Loans and other Obligations shall bear interest at
rates that are five percent (5.0%) per annum in excess of the rates otherwise
payable under this Agreement, and (b) the fee described in Section 2.5(b) shall
increase by a rate that is five percent (5.0%) in excess of the rate otherwise
payable under such Section; provided that, notwithstanding anything to the
contrary contained in the foregoing or otherwise in this Agreement, the
increased rates of default interest and fees under Section 2.5(b) provided for
in this section shall be applicable automatically and immediately upon the
occurrence and during the continuance of any Event of Default occurring under
Section 10.1(e) or 10.1(f) above without the necessity of any further
affirmative action by any party.

Section 10.5 Setoff Rights. During the continuance of any Event of Default, each
Lender is hereby authorized by each Borrower at any time or from time to time,
with reasonably prompt subsequent notice to such Borrower (any prior or
contemporaneous notice being hereby expressly waived) to set off and to
appropriate and to apply any and all (a) balances held by such Lender or any of
such Lender’s Affiliates at any of its offices for the account of such Borrower
or any of its Subsidiaries (regardless of whether such balances are then due to
such Borrower or its Subsidiaries), and (b) other property at any time held or
owing by such Lender to or for the credit or for the account of such Borrower or
any of its Subsidiaries, against and on account of any of the Obligations;
except that no Lender shall exercise any such right without the prior written
consent of Administrative Agent. Any Lender

 

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exercising a right to set off shall purchase for cash (and the other Lenders
shall sell) interests in each of such other Lender’s Pro Rata Share of the
Obligations as would be necessary to cause all Lenders to share the amount so
set off with each other Lender in accordance with their respective Pro Rata
Share of the Obligations. Each Borrower agrees, to the fullest extent permitted
by law, that any Lender and any of such Lender’s Affiliates may exercise its
right to set off with respect to the Obligations as provided in this Section.

Section 10.6 Application of Proceeds. Notwithstanding anything to the contrary
contained in this Agreement, upon the occurrence and during the continuance of
an Event of Default, (a) each Borrower irrevocably waives the right to direct
the application of any and all payments at any time or times thereafter received
by Administrative Agent from or on behalf of such Borrower or any other Credit
Party of all or any part of the Obligations, and, as between Borrowers on the
one hand and Administrative Agent and Lenders on the other, Administrative Agent
shall have the continuing and exclusive right to apply and to reapply any and
all payments received against the Obligations in such manner as Administrative
Agent may deem advisable notwithstanding any previous application by
Administrative Agent, and (b) the proceeds of any sale of, or other realization
upon, all or any part of the Collateral shall be applied: first, to all fees,
costs, indemnities, liabilities, obligations and expenses incurred by or owing
to Administrative Agent with respect to this Agreement, the other Financing
Documents or the Collateral; second, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (including any interest
which, but for the provisions of the Bankruptcy Code, would have accrued on such
amounts); fourth, to the principal amount of the Obligations outstanding and to
provide cash collateral to secure any and all Letter of Credit Liability and
future payment of related fees, as provided for in Section 2.5(e); and fifth to
any other indebtedness or obligations of Borrowers owing to Administrative Agent
or any Lender under the Financing Documents. Any balance remaining shall be
delivered to Borrowers or to whoever may be lawfully entitled to receive such
balance or as a court of competent jurisdiction may direct. In carrying out the
foregoing, (x) amounts received shall be applied in the numerical order provided
until exhausted prior to the application to the next succeeding category, and
(y) each of the Persons entitled to receive a payment in any particular category
shall receive an amount equal to its pro rata share of amounts available to be
applied pursuant thereto for such category.

Section 10.7 Waivers and Remedies.

(a) Except as otherwise provided for in this Agreement and to the fullest extent
permitted by applicable law, each Borrower waives: (i) presentment, demand and
protest, and notice of presentment, dishonor, intent to accelerate,
acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all Financing Documents, the Notes or
any other notes, commercial paper, Accounts, contracts, Documents, Instruments,
Chattel Paper and guaranties at any time held by Lenders on which any Borrower
may in any way be liable, and hereby ratifies and confirms whatever Lenders may
do in this regard; (ii) all rights to notice and a hearing prior to
Administrative Agent’s or any Lender’s taking possession or control of, or to
Administrative Agent’s or any Lender’s replevy, attachment or levy upon, any
Collateral or any bond or security which might be required by any court prior to
allowing Administrative Agent or any Lender to exercise any of its remedies; and
(iii) the benefit of all valuation, appraisal, marshalling and exemption Laws.
The rights and remedies herein and therein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. Any reference in any
Financing Document to the “continuing” nature of any Event of Default shall not
be construed as establishing or otherwise indicating that any Borrower or any
other Credit Party has the independent right to cure any such Event of Default,
but is rather presented merely for convenience should such Event of Default be
waived in accordance with the terms of the applicable Financing Documents.

(b) Each Borrower for itself and all its successors and assigns, (i) agrees that
its liability shall not be in any manner affected by any acquiescence in
non-compliance, indulgence, extension of time, renewal, waiver, or modification
made, granted or consented to by Administrative Agent or any Lender;
(ii) consents to any indulgences and all extensions of time, renewals, waivers,
or modifications that may be granted by Administrative Agent or any Lender with
respect to the payment or other provisions of the Financing Documents, and to
any substitution, exchange or release of the Collateral, or any part thereof,
with or without substitution, and agrees to the addition or release of any
Borrower, endorsers, guarantors, or sureties, or whether primarily or
secondarily liable, without notice to any other Borrower and without affecting
its liability hereunder; (iii) agrees that its liability shall be unconditional

 

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and without regard to the liability of any other Borrower, Administrative Agent
or any Lender for any tax on the indebtedness; and (iv) to the fullest extent
permitted by law, expressly waives the benefit of any statute or rule of law or
equity now provided, or which may hereafter be provided, which would produce a
result contrary to or in conflict with the foregoing.

(c) Any delay or forbearance by Administrative Agent or any Lender in exercising
any right or remedy under any of the Financing Documents, or otherwise afforded
by applicable law, including any failure to accelerate the maturity date of the
Loans, shall not be a waiver of or preclude the exercise of any right or remedy
nor shall it serve as a novation of the Notes or as a reinstatement of the Loans
or a waiver of such right of acceleration or the right to insist upon strict
compliance of the terms of the Financing Documents. Administrative Agent’s or
any Lender’s acceptance of payment of any sum secured by any of the Financing
Documents after the due date of such payment shall not be a waiver of
Administrative Agent’s and such Lender’s right to either require prompt payment
when due of all other sums so secured or to declare a default for failure to
make prompt payment.

(d) Without limiting the generality of anything contained in this Agreement or
the other Financing Documents, each Borrower agrees that if an Event of Default
is continuing (i) Administrative Agent and Lenders shall not be subject to any
“one action” or “election of remedies” law or rule, and (ii) all Liens and other
rights, remedies or privileges provided to Administrative Agent or Lenders shall
remain in full force and effect until Administrative Agent or Lenders have
exhausted all remedies against the Collateral and any other properties owned by
Borrowers and the Financing Documents and other security instruments or
agreements securing the Loans have been foreclosed, sold and/or otherwise
realized upon in satisfaction of Borrowers’ obligations under the Financing
Documents.

(e) Administrative Agent shall have the right from time to time to partially
foreclose upon any Collateral in any manner and for any amounts secured by the
Financing Documents then due and payable as determined by Administrative Agent
in its sole discretion. Notwithstanding one or more partial foreclosures, any
unforeclosed Collateral shall remain subject to the Financing Documents to
secure payment of sums secured by the Financing Documents and not previously
recovered. To the fullest extent permitted by law, each Borrower, for itself and
its successors and assigns, waives in the event of foreclosure of any or all of
the Collateral any equitable right otherwise available to any Credit Party which
would require the separate sale of any of the Collateral or require
Administrative Agent or Lenders to exhaust their remedies against any part of
the Collateral before proceeding against any other part of the Collateral; and
further in the event of such foreclosure each Borrower does hereby expressly
consent to and authorize, at the option of Administrative Agent, the foreclosure
and sale either separately or together of each part of the Collateral.

Section 10.8 Injunctive Relief. The parties acknowledge and agree that, in the
event of a breach or threatened breach of any Credit Party’s obligations under
any Financing Documents, Administrative Agent and Lenders may have no adequate
remedy in money damages and, accordingly, shall be entitled to an injunction
(including, without limitation, a temporary restraining order, preliminary
injunction, writ of attachment, or order compelling an audit) against such
breach or threatened breach, including, without limitation, maintaining any cash
management and collection procedure described herein. However, no specification
in this Agreement of a specific legal or equitable remedy shall be construed as
a waiver or prohibition against any other legal or equitable remedies in the
event of a breach or threatened breach of any provision of this Agreement. Each
Credit Party waives, to the fullest extent permitted by law, the requirement of
the posting of any bond in connection with such injunctive relief. By joining in
the Financing Documents as a Credit Party, each Credit Party specifically joins
in this Section as if this Section were a part of each Financing Document
executed by such Credit Party.

ARTICLE 11 – ADMINISTRATIVE AGENT

Section 11.1 Appointment and Authorization. Each Lender hereby irrevocably
appoints and authorizes Administrative Agent to be the agent of Lender under and
with respect to this Agreement and the other Financing Documents and to enter
into each of the Financing Documents to which it is a party (other than this
Agreement) on its behalf and to take such actions as Administrative Agent on its
behalf and to exercise such powers under the Financing Documents as are
delegated to Administrative Agent by the terms thereof, together with all such
powers as are reasonably incidental thereto. Subject to the terms of
Section 12.5 and to the terms of the other

 

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Financing Documents, Administrative Agent is authorized and empowered to amend,
modify, or waive any provisions of this Agreement or the other Financing
Documents on behalf of Lenders. The provisions of this Article 11 are solely for
the benefit of Administrative Agent and Lenders and neither Borrowers nor any
other Credit Party shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this
Agreement, Administrative Agent shall act solely as agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrowers or any other Credit Party.
Administrative Agent may perform any of its duties hereunder, or under the
Financing Documents, by or through its own agents or employees.

Section 11.2 Administrative Agent and Affiliates. Administrative Agent shall
have the same rights and powers under the Financing Documents as any other
Lender and may exercise or refrain from exercising the same as though it were
not Administrative Agent, and Administrative Agent and its Affiliates may lend
money to, invest in and generally engage in any kind of business with each
Credit Party or Affiliate of any Credit Party as if it were not Administrative
Agent hereunder.

Section 11.3 Action by Administrative Agent. The duties of Administrative Agent
shall be mechanical and administrative in nature. Administrative Agent shall not
have by reason of this Agreement a fiduciary relationship in respect of any
Lender. Nothing in this Agreement or any of the Financing Documents is intended
to or shall be construed to impose upon Administrative Agent any obligations in
respect of this Agreement or any of the Financing Documents except as expressly
set forth herein or therein.

Section 11.4 Consultation with Experts. Administrative Agent may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.

Section 11.5 Liability of Administrative Agent. Neither Administrative Agent nor
any of its directors, officers, agents or employees shall be liable to any
Lender for any action taken or not taken by it in connection with the Financing
Documents, except that Administrative Agent shall be liable with respect to its
specific duties set forth hereunder, but only to the extent of its own gross
negligence or willful misconduct in the discharge thereof as determined by a
final non-appealable judgment of a court of competent jurisdiction. Neither
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into or verify
(i) any statement, warranty or representation made in connection with any
Financing Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements specified in any Financing
Document; (iii) the satisfaction of any condition specified in any Financing
Document; (iv) the validity, effectiveness, sufficiency or genuineness of any
Financing Document, any Lien purported to be created or perfected thereby or any
other instrument or writing furnished in connection therewith; (v) the existence
or non-existence of any Default or Event of Default; or (vi) the financial
condition of any Credit Party. Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, facsimile or
electronic transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties. Administrative Agent shall not be
liable for any apportionment or distribution of payments made by it in good
faith and if any such apportionment or distribution is subsequently determined
to have been made in error the sole recourse of any Lender to whom payment was
due but not made, shall be to recover from other Lenders any payment in excess
of the amount to which they are determined to be entitled (and such other
Lenders hereby agree to return to such Lender any such erroneous payments
received by them).

Section 11.6 Indemnification. Each Lender shall, in accordance with its Pro Rata
Share, indemnify Administrative Agent (to the extent not reimbursed by
Borrowers) upon demand against any cost, expense (including counsel fees and
disbursements), claim, demand, action, loss or liability (except such as result
from Administrative Agent’s gross negligence or willful misconduct as determined
by a final non-appealable judgment of a court of competent jurisdiction) that
Administrative Agent may suffer or incur in connection with the Financing
Documents or any action taken or omitted by Administrative Agent hereunder or
thereunder. If any indemnity furnished to Administrative Agent for any purpose
shall, in the opinion of Administrative Agent, be insufficient or become
impaired, Administrative Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against even if so directed by Required
Lenders until such additional indemnity is furnished.

 

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Section 11.7 Right to Request and Act on Instructions. Administrative Agent may
at any time request instructions from Lenders with respect to any actions or
approvals which by the terms of this Agreement or of any of the Financing
Documents Administrative Agent is permitted or desires to take or to grant, and
if such instructions are promptly requested, Administrative Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions from Required
Lenders or all or such other portion of the Lenders as shall be prescribed by
this Agreement. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against Administrative Agent as a result of Administrative
Agent acting or refraining from acting under this Agreement or any of the other
Financing Documents in accordance with the instructions of Required Lenders (or
all or such other portion of the Lenders as shall be prescribed by this
Agreement) and, notwithstanding the instructions of Required Lenders (or such
other applicable portion of the Lenders), Administrative Agent shall have no
obligation to take any action if it believes, in good faith, that such action
would violate applicable Laws or exposes Administrative Agent to any liability
for which it has not received satisfactory indemnification in accordance with
the provisions of Section 11.6.

Section 11.8 Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon 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 decisions in taking or not taking any action under the
Financing Documents.

Section 11.9 Collateral Matters. Lenders irrevocably authorize Administrative
Agent, at its option and in its discretion, to (x) release any Lien granted to
or held by Administrative Agent under any Security Document (i) upon termination
of the Revolving Loan Commitment and payment in full of all Obligations, the
expiration, termination or cash collateralization (to the satisfaction of
Administrative Agent) of all Letters of Credit; or (ii) constituting property
sold or disposed of as part of or in connection with any disposition permitted
under any Financing Document (it being understood and agreed that Administrative
Agent may conclusively rely without further inquiry on a certificate of a
Responsible Officer as to the sale or other disposition of property being made
in full compliance with the provisions of the Financing Documents) and
(y) release or subordinate any Lien granted to or held by Administrative Agent
under any Security Document constituting property which is the subject of a
Permitted Asset Disposition (it being understood and agreed that Administrative
Agent may conclusively rely without further inquiry on a certificate of a
Responsible Officer as to the identification of any property which is the
subject of a Permitted Asset Disposition). Upon request by Administrative Agent
at any time, Lenders will confirm Administrative Agent’s authority to release
and/or subordinate particular types or items of Collateral pursuant to this
Section.

Section 11.10 Agency for Perfection. Administrative Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting Administrative
Agent’s security interest in assets which, in accordance with the Uniform
Commercial Code in any applicable jurisdiction, can be perfected by possession
or control. Should any Lender (other than Administrative Agent) obtain
possession or control of any such assets, such Lender shall notify
Administrative Agent thereof, and, promptly upon Administrative Agent’s request
therefor, shall deliver such assets to Administrative Agent or in accordance
with Administrative Agent’s instructions or transfer control to Administrative
Agent in accordance with Administrative Agent’s instructions. Each Lender agrees
that it will not have any right individually to enforce or seek to enforce any
Security Document or to realize upon any Collateral for the Loans unless
instructed to do so by Administrative Agent (or consented to by Administrative
Agent, as provided in Section 10.5), it being understood and agreed that such
rights and remedies may be exercised only by Administrative Agent.

Section 11.11 Notice of Default. Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
except with respect to defaults in the payment of principal, interest and fees
required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. Administrative

 

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Agent will notify each Lender of its receipt of any such notice. Administrative
Agent shall take such action with respect to such Default or Event of Default as
may be requested by Required Lenders (or all or such other portion of the
Lenders as shall be prescribed by this Agreement) in accordance with the terms
hereof. Unless and until Administrative Agent has received any such request,
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 or in the best interests of Lenders.

Section 11.12 Successor Administrative Agent. Administrative Agent may at any
time give notice of its resignation to the Lenders and Borrowers. Upon receipt
of any such notice of resignation, Required Lenders shall have the right,
without the requirement of any consent of Borrowers, to appoint a successor
Administrative Agent. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder and notice of such acceptance to the retiring
Administrative Agent, such successor shall succeed to and become vested with all
of the rights, powers, privileges and duties of the retiring (or retired)
Administrative Agent, the retiring Administrative Agent’s resignation shall
become immediately effective and the retiring Administrative Agent shall be
discharged from all of its duties and obligations hereunder and under the other
Financing Documents (if such resignation was not already effective and such
duties and obligations not already discharged, as provided below in this
paragraph). The fees payable by Borrowers to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between Borrowers and such successor. If no such successor shall have been so
appointed by Required Lenders and shall have accepted such appointment within
thirty (30) days after the retiring Administrative Agent gives notice of its
resignation, then the retiring Administrative Agent may on behalf of the Lenders
(but without any obligation) appoint a successor Administrative Agent. From and
following the expiration of such thirty (30) day period, Administrative Agent
shall have the exclusive right, upon one (1) Business Days’ notice to Borrowers
and the Lenders, and the delivery to a Lender, for the benefit of all Lenders,
of all Collateral in the possession of the retiring Administrative Agent, to
make its resignation effective immediately. From and following the effectiveness
of such notice, (i) the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Financing Documents and
(ii) all payments, communications and determinations provided to be made by, to
or through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor Administrative
Agent as provided for above in this paragraph. The provisions of this Agreement
shall continue in effect for the benefit of any retiring Administrative Agent
and its sub-agents after the effectiveness of its resignation hereunder and
under the other Financing Documents in respect of any actions taken or omitted
to be taken by any of them while the retiring Administrative Agent was acting or
was continuing to act as Administrative Agent.

Section 11.13 Disbursements of Loans; Payment and Sharing of Payment.

(a) Loan Advances, Payments and Settlements; Interest and Fee Payments.

(i) Administrative Agent shall have the right, on behalf of Lenders (other than
Non-Funding Lenders) to disburse funds to Borrowers for all Loans or advances
thereof requested or deemed requested by Borrowers pursuant to the terms of this
Agreement regardless of whether the conditions precedent set forth in
Section 7.2 are then satisfied, including the existence of any Default or Event
of Default either before or after giving effect to the making of such Loans or
advances; provided, that Administrative Agent shall not advance proceeds of any
Revolving Loan pursuant to this clause (i) if, to the knowledge of
Administrative Agent, the Revolving Loan Outstandings exceed the Revolving Loan
Limit, either before or after giving effect to the making of any proposed
Revolving Loan. Administrative Agent shall be conclusively entitled to assume,
for purposes of the preceding sentence, that each Lender, other than any
Non-Funding Lenders, will fund its Pro Rata Share of all Loans and advances
thereof requested by Borrowers. Each Lender (other than any Non-Funding Lender)
shall reimburse Administrative Agent on demand, in accordance with the
provisions of the immediately following paragraph, for all funds disbursed on
its behalf by Administrative Agent pursuant to the first sentence of this clause
(i), or if Administrative Agent so requests, each Lender (other than any
Non-Funding Lender) will remit to Administrative Agent its Pro Rata Share of any
Loan or advance thereof before Administrative Agent disburses the same to
Borrowers. If Administrative Agent elects to require that each Lender (other
than any Non-Funding Lender) make funds available to Administrative Agent, prior
to a disbursement by Administrative Agent to Borrowers, Administrative Agent
shall advise each Lender by telephone, facsimile or e-mail of the amount of such
Lender’s Pro Rata Share of the Loan or advance thereof requested by Borrowers no
later than noon (Chicago time) on the date of

 

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funding of such Loan or advance, and each such Lender shall pay Administrative
Agent on such date such Lender’s Pro Rata Share of such requested Loan or
advance, in same day funds, by wire transfer to the Payment Account, or such
other account as may be identified by Administrative Agent to Lenders from time
to time. If any Lender fails to pay the amount of its Pro Rata Share within one
(1) Business Day after Administrative Agent’s demand, Administrative Agent shall
promptly notify Borrowers, and Borrowers shall immediately repay such amount to
Administrative Agent. Any repayment required by Borrowers pursuant to this
Section shall be accompanied by accrued interest thereon from and including the
date such amount is made available to Borrowers to but excluding the date of
payment at the rate of interest then applicable to the applicable Loan under
which the advance is made. Nothing in this Section or elsewhere in this
Agreement or the other Financing Documents shall be deemed to require
Administrative Agent to advance funds on behalf of any Lender or to relieve any
Lender from its obligation to fulfill its commitments hereunder or to prejudice
any rights that Administrative Agent or Borrowers may have against any Lender as
a result of any default by such Lender hereunder.

(ii) On a Business Day of each week as selected from time to time by
Administrative Agent, or more frequently (including daily), if Administrative
Agent so elects (each such day being a “Settlement Date”), Administrative Agent
will advise each Lender by telephone, facsimile or e-mail of the amount of each
such Lender’s percentage interest of the applicable Loan balance as of the close
of business of the Business Day immediately preceding the Settlement Date. In
the event that payments are necessary to adjust the amount of such Lender’s
actual percentage interest of the applicable Loan balance to such Lender’s
required percentage interest of the applicable Loan balance as of any Settlement
Date, the party from which such payment is due shall pay Administrative Agent,
without setoff or discount, to the Payment Account not later than noon (Chicago
time) on the Business Day following the Settlement Date the full amount
necessary to make such adjustment. Any obligation arising pursuant to the
immediately preceding sentence shall be absolute and unconditional and shall not
be affected by any circumstance whatsoever. In the event settlement shall not
have occurred by the date and time specified in the second preceding sentence,
interest shall accrue on the unsettled amount at the Federal Funds Rate, for the
first three (3) days following the scheduled date of settlement, and thereafter
at the Base Rate plus the Base Rate Margin applicable to the applicable Loan
under which the advance is made.

(iii) On each Settlement Date, Administrative Agent shall advise each Lender by
telephone, facsimile or e-mail of the amount of such Lender’s percentage
interest of principal, interest and fees paid for the benefit of Lenders with
respect to each applicable Loan, to the extent of such Lender’s Revolving Loan
Exposure with respect thereto, and shall make payment to such Lender not later
than noon (Chicago time) on the Business Day following the Settlement Date of
such amounts in accordance with wire instructions delivered by such Lender to
Administrative Agent, as the same may be modified from time to time by written
notice to Administrative Agent; provided, that, in the case such Lender is a
Defaulted Lender, Administrative Agent shall be entitled to set off the funding
short-fall against that Defaulted Lender’s respective share of all payments
received from Borrowers.

(iv) On the Closing Date, Administrative Agent, on behalf of the Lenders, may
elect to advance to Borrowers the full amount of the initial Loans to be made on
the Closing Date prior to receiving funds from the Lenders, in reliance upon
each Lender’s commitment to make its Pro Rata Share of such Loans to Borrowers
in a timely manner on such date. If Administrative Agent elects to advance the
initial Loans to Borrowers in such manner, Administrative Agent shall be
entitled to receive all interest that accrues on the Closing Date on each
Lender’s Pro Rata Share of such Loans unless Administrative Agent receives such
Lender’s Pro Rata Share of such Loans by 3:00 p.m. (Chicago time) on the Closing
Date.

(v) Notwithstanding anything to the contrary in this Agreement, repayment of
Loans by Administrative Agent shall be made first in respect of Loans made at
the time any Non-Funding Lenders exist, and second in respect of all other
outstanding Loans.

(vi) The provisions of this Section 11.13(a) shall be deemed to be binding upon
Administrative Agent and Lenders notwithstanding the occurrence of any Default
or Event of Default, or any insolvency or bankruptcy proceeding pertaining to
Borrowers or any other Credit Party.

(b) [RESERVED]

 

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(c) Return of Payments.

(i) If Administrative Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Administrative Agent from Borrowers and such related payment is not received by
Administrative Agent, then Administrative Agent will be entitled to recover such
amount from such Lender on demand without setoff, counterclaim or deduction of
any kind, together with interest accruing on a daily basis at the Federal Funds
Rate.

(ii) If Administrative Agent determines at any time that any amount received by
Administrative Agent under this Agreement must be returned to Borrowers or paid
to any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other
Financing Document, Administrative Agent will not be required to distribute any
portion thereof to any Lender. In addition, each Lender will repay to
Administrative Agent on demand any portion of such amount that Administrative
Agent has distributed to such Lender, together with interest at such rate, if
any, as Administrative Agent is required to pay to Borrowers or such other
Person, without setoff, counterclaim or deduction of any kind.

(d) Defaulted Lenders. The failure of any Defaulted Lender to make any Revolving
Loan or any payment required by it hereunder shall not relieve any other Lender
of its obligations to make such Revolving Loan or payment, but neither any other
Lender nor Administrative Agent shall be responsible for the failure of any
Defaulted Lender to make a Revolving Loan or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Defaulted Lender shall not have any voting or consent rights under or with
respect to any Financing Document or constitute a “Lender” (or be included in
the calculation of “Required Lenders” hereunder) for any voting or consent
rights under or with respect to any Financing Document.

(e) Sharing of Payments. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of any Loan (other than pursuant to the terms of Sections 2.8(d)) in
excess of its pro rata share of payments entitled pursuant to the other
provisions of this Section, such Lender shall purchase from the other Lenders
such participations in extensions of credit made by such other Lenders (without
recourse, representation or warranty) as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of the excess
payment or other recovery is thereafter required to be returned or otherwise
recovered from such purchasing Lender, such portion of such purchase shall be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such return or recovery, without interest. Borrowers agree that any
Lender so purchasing a participation from another Lender pursuant to this clause
(e) may, to the fullest extent permitted by law, exercise all its rights of
payment (including pursuant to Section 10.5) with respect to such participation
as fully as if such Lender were the direct creditor of Borrowers in the amount
of such participation. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this clause (e) applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders entitled under this clause (e) to share in the benefits of
any recovery on such secured claim.

Section 11.14 Right to Perform, Preserve and Protect. If any Credit Party fails
to perform any obligation hereunder or under any other Financing Document,
Administrative Agent itself may, but shall not be obligated to, cause such
obligation to be performed at Borrowers’ expense. Administrative Agent is
further authorized by Borrowers and the Lenders to make expenditures from time
to time which Administrative Agent, in its reasonable business judgment, deems
necessary or desirable to (i) preserve or protect the business conducted by
Borrowers, the Collateral, or any portion thereof and/or (ii) enhance the
likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations. Borrowers hereby agree to reimburse Administrative Agent on demand
for any and all costs, liabilities and obligations incurred by Administrative
Agent pursuant to this Section. Each Lender hereby agrees to indemnify
Administrative Agent upon demand for any and all costs, liabilities and
obligations incurred by Administrative Agent pursuant to this Section, in
accordance with the provisions of Section 11.6.

 

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Section 11.15 Additional Titled Agents. Except for rights and powers, if any,
expressly reserved under this Agreement to any bookrunner, arranger or to any
titled agent named on the cover page of this Agreement, other than
Administrative Agent (collectively, the “Additional Titled Agents”), and except
for obligations, liabilities, duties and responsibilities, if any, expressly
assumed under this Agreement by any Additional Titled Agent, no Additional
Titled Agent, in such capacity, has any rights, powers, liabilities, duties or
responsibilities hereunder or under any of the other Financing Documents.
Without limiting the foregoing, no Additional Titled Agent shall have nor be
deemed to have a fiduciary relationship with any Lender. At any time that any
Lender serving as an Additional Titled Agent shall have transferred to any other
Person (other than any Affiliates) all of its interests in the Loans and in the
Revolving Loan Commitment, such Lender shall be deemed to have concurrently
resigned as such Additional Titled Agent.

Section 11.16 Definitions. As used in this Article 11, the following terms have
the following meanings:

“Federal Funds Rate” means, for any day, the rate of interest per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided, however, that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day, and (b) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Administrative Agent on such day on such
transactions as determined by Administrative Agent.

“Revolving Loan Exposure” means, with respect to any Lender on any date of
determination, the percentage equal to the amount of such Lender’s Revolving
Loan Outstandings on such date divided by the aggregate Revolving Loan
Outstandings of all Lenders on such date.

ARTICLE 12 – MISCELLANEOUS

Section 12.1 Survival. All agreements, representations and warranties made
herein and in every other Financing Document shall survive the execution and
delivery of this Agreement and the other Financing Documents. The provisions of
Section 2.8 and Articles 11 and 12 shall survive the payment of the Obligations
(both with respect to any Lender and all Lenders collectively) and any
termination of this Agreement and any judgment with respect to any Obligations,
including any final foreclosure judgment with respect to any Security Document,
and no unpaid or unperformed, current or future, Obligations will merge into any
such judgment.

Section 12.2 Time. Time is of the essence in each Borrower’s and each other
Credit Party’s performance under this Agreement and all other Financing
Documents.

Section 12.3 Notices.

(a) All notices, requests and other communications to any party hereunder shall
be in writing (including prepaid overnight courier, facsimile transmission or
similar writing) and shall be given to such party at its address, facsimile
number or e-mail address set forth on the signature pages hereof (or, in the
case of any such Lender who becomes a Lender after the date hereof, in an
Assignment Agreement or in a notice delivered to Borrower Representative and
Administrative Agent by the assignee Lender forthwith upon such assignment) or
at such other address, facsimile number or e-mail address as such party may
hereafter specify for the purpose by notice to Administrative Agent and Borrower
Representative; provided, however, that notices, requests or other
communications shall be permitted by electronic means only in accordance with
the provisions of Section 12.3(b) and (c). Each such notice, request or other
communication shall be effective (i) if given by facsimile, when such notice is
transmitted to the facsimile number specified by this Section and the sender
receives a confirmation of transmission from the sending facsimile machine, or
(ii) if given by mail, prepaid overnight courier or any other means, when
received or when receipt is refused at the applicable address specified by this
Section 12.3(a).

(b) Notices and other communications to the parties hereto may be delivered or
furnished by

 

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electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved from time to time by Administrative Agent,
provided, however, that the foregoing shall not apply to notices sent directly
to any Lender if such Lender has notified the Administrative Agent that it is
incapable of receiving notices by electronic communication. The Administrative
Agent or Borrower Representative may, in their discretion, agree to accept
notices and other communications to them hereunder by electronic communications
pursuant to procedures approved by it, provided, however, that approval of such
procedures may be limited to particular notices or communications.

(c) Unless the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgment from the intended recipient (such as by
the “return receipt requested” function, as available, return e-mail or other
written acknowledgment), and (ii) notices or communications posted to an
Internet or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the foregoing
clause (i) of notification that such notice or communication is available and
identifying the website address therefor, provided, however, that if any such
notice or other communication is not sent or posted during normal business
hours, such notice or communication shall be deemed to have been sent at the
opening of business on the next Business Day.

Section 12.4 Severability. In case any provision of or obligation under this
Agreement or any other Financing Document shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

Section 12.5 Amendments and Waivers.

(a) No provision of this Agreement or any other Financing Document may be
amended, waived or otherwise modified unless such amendment, waiver or other
modification is in writing and is signed or otherwise approved by Borrowers, the
Administrative Agent and the Required Lenders; provided that

(i) no such amendment, waiver or other modification that would have the effect
of increasing or reducing a Lender’s Revolving Loan Commitment Amount or
Revolving Loan Commitment Percentage shall be effective as to such Lender
without such Lender’s written consent;

(ii) no such amendment, waiver or modification that would affect the rights and
duties of Administrative Agent shall be effective without Administrative Agent’s
written consent or signature;

(iii) no such amendment, waiver or other modification shall, unless signed by
all the Lenders directly affected thereby, (A) reduce the principal of, rate of
interest on or any fees with respect to any Loan or forgive any principal,
interest (other than default interest) or fees (other than late charges) with
respect to any Loan (B) postpone the date fixed for, or waive, any payment of
principal of any Loan or of interest on any Loan (other than default interest)
or any fees provided for hereunder (other than late charges or for any
termination of any commitment; (C) change the definition of the term Required
Lenders or the percentage of Lenders which shall be required for Lenders to take
any action hereunder; (D) release all or substantially all or any material
portion of the Collateral, authorize any Borrower to sell or otherwise dispose
of all or substantially all or any material portion of the Collateral or release
any guarantor of all or any portion of the Obligations or its guaranty
obligations with respect thereto, except, in each case with respect to this
clause (D), as otherwise may be expressly permitted under this Agreement or the
other Financing Documents (including in connection with any disposition
permitted hereunder); (E) amend, waive or otherwise modify this Section 12.5 or
the definitions of the terms used in this Section 12.5 insofar as the
definitions affect the substance of this Section 12.5; (F) consent to the
assignment, delegation or other transfer by any Credit Party of any of its
rights and obligations under any Financing Document or release any Borrower of
its payment obligations under any Financing Document, except, in each case with
respect to this clause (F), pursuant to a merger or consolidation permitted
pursuant to this Agreement or (G) amend any of the provisions of Section 10.6 or
amend any of the definitions Pro Rata Share, Revolving Loan Commitment,
Revolving Loan Commitment Amount, Revolving Loan Commitment Percentage or that
provide for the Lenders to receive their Pro Rata Shares of any fees, payments,
setoffs or proceeds of Collateral hereunder. It is hereby

 

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understood and agreed that all Lenders shall be deemed directly affected by an
amendment, waiver or other modification of the type described in the preceding
clauses (C), (D), (E), (F) and (G) of the preceding sentence;

(iv) the provisions of the foregoing clauses (i), (ii) and (iii) are subject to
the provisions of any interlender or agency agreement among the Lenders and
Administrative Agent pursuant to which any Lender may agree to give its consent
in connection with any amendment, waiver or modification of the Financing
Documents only in the event of the unanimous agreement of all Lenders.

 

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Section 12.6 Assignments; Participations; Replacement of Lenders.

(a) Assignments.

(i) Any Lender may at any time assign to one or more Eligible Assignees all or
any portion of such Lender’s Loans and interest in the Revolving Loan
Commitment, together with all related obligations of such Lender hereunder.
Except as Administrative Agent may otherwise agree, the amount of any such
assignment (determined as of the date of the applicable Assignment Agreement or,
if a “Trade Date” is specified in such Assignment Agreement, as of such Trade
Date) shall be in a minimum aggregate amount equal to One Million Dollars
($1,000,000) or, if less, the assignor’s entire interests in the Revolving Loan
Commitment and outstanding Loans; provided, that, in connection with
simultaneous assignments to two or more related Approved Funds, such Approved
Funds shall be treated as one assignee for purposes of determining compliance
with the minimum assignment size referred to above. Borrowers and Administrative
Agent shall be entitled to continue to deal solely and directly with such Lender
in connection with the interests so assigned to an Eligible Assignee until
Administrative Agent shall have received and accepted an effective Assignment
Agreement executed, delivered and fully completed by the applicable parties
thereto, such other information regarding such Eligible Assignee as
Administrative Agent reasonably shall require and a processing fee of Three
Thousand Five Hundred Dollars ($3,500); provided, only one processing fee shall
be payable in connection with simultaneous assignments to two or more related
Approved Funds.

(ii) From and after the date on which the conditions described above have been
met, (i) such Eligible Assignee shall be deemed automatically to have become a
party hereto and, to the extent of the interests assigned to such Eligible
Assignee pursuant to such Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and (ii) the assigning Lender, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment Agreement, shall be released from its rights and obligations
hereunder (other than those that survive termination pursuant to Section 12.1).
Upon the request of the Eligible Assignee (and, as applicable, the assigning
Lender) pursuant to an effective Assignment Agreement, Borrowers shall execute
and deliver to Administrative Agent for delivery to the Eligible Assignee (and,
as applicable, the assigning Lender) Notes in the aggregate principal amount of
the Eligible Assignee’s percentage interest in the Revolving Loan Commitment
(and, as applicable, Notes in the principal amount of that portion of the
Revolving Loan Commitment retained by the assigning Lender). Upon receipt by the
assigning Lender of such Note, the assigning Lender shall return to Borrowers
any prior Note held by it.

(iii) Administrative Agent, acting solely for this purpose as an agent of
Borrower, shall maintain at its offices located in Chicago, Illinois a copy of
each Assignment Agreement delivered to it and a register for the recordation of
the names and addresses of each Lender, and the commitments of, and principal
amount of the Loans owing to, such Lender pursuant to the terms hereof. The
entries in such register shall be conclusive, and Borrower, Administrative Agent
and Lenders may treat each Person whose name is recorded therein pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. Such register shall be available for
inspection by Borrowers and any Lender, at any reasonable time upon reasonable
prior notice to Administrative Agent.

(iv) Notwithstanding the foregoing provisions of this Section 12.6(a) or any
other provision of this Agreement, any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.

(v) Notwithstanding the foregoing provisions of this Section 12.6(a) or any
other provision of this Agreement, Administrative Agent has the right, but not
the obligation, to effectuate assignments of Loans and Revolving Loan
Commitments via an electronic settlement system acceptable to Administrative
Agent as designated in writing from time to time to the Lenders by
Administrative Agent (the “Settlement Service”). At any time when the
Administrative Agent elects, in its sole discretion, to implement such
Settlement Service, each such assignment shall be effected by the assigning
Lender and proposed assignee pursuant to the procedures then in effect under the
Settlement Service, which procedures shall be consistent with the other
provisions of this Section 12.6(a). Each

 

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assigning Lender and proposed Eligible Assignee shall comply with the
requirements of the Settlement Service in connection with effecting any
assignment of Loans and Revolving Loan Commitments pursuant to the Settlement
Service. With the prior approval of each of Administrative Agent and the
Borrower, Administrative Agent’s and the Borrower’s approval of such Eligible
Assignee shall be deemed to have been automatically granted with respect to any
transfer effected through the Settlement Service. Assignments and assumptions of
the Loans and Revolving Loan Commitments shall be effected by the provisions
otherwise set forth herein until Administrative Agent notifies Lenders of the
Settlement Service as set forth herein.

(b) Participations. Any Lender may at any time, without the consent of, or
notice to, Borrowers or Administrative Agent, sell to one or more Persons
participating interests in its Loans, commitments or other interests hereunder
(any such Person, a “Participant”). In the event of a sale by a Lender of a
participating interest to a Participant, (a) such Lender’s obligations hereunder
shall remain unchanged for all purposes, (b) Borrowers and Administrative Agent
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations hereunder and (c) all amounts payable by
Borrowers shall be determined as if such Lender had not sold such participation
and shall be paid directly to such Lender. No Participant shall have any direct
or indirect voting rights hereunder except with respect to any event described
in Section 12.5 expressly requiring the unanimous vote of all Lenders or, as
applicable, all affected Lenders. Borrowers agree that if amounts outstanding
under this Agreement are due and payable (as a result of acceleration or
otherwise), each Participant shall be deemed to have the right of set-off in
respect of its participating interest in amounts owing under this Agreement and
with respect to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such right of set-off shall be subject to the
obligation of each Participant to share with Lenders, and Lenders agree to share
with each Participant, as provided in Section 10.5.

(c) Replacement of Lenders. Within thirty (30) days after: (i) receipt by
Administrative Agent of notice and demand from any Lender for payment of
additional costs as provided in Section 2.8(d), which demand shall not have been
revoked, (ii) Borrowers are required to pay any additional amount to any Lender
or any Governmental Authority for the account of any Lender pursuant to
Section 2.8(a), (iii) any Lender is a Defaulted Lender, and the circumstances
causing such status shall not have been cured or waived, or (iv) any failure by
any Lender to consent to a requested amendment, waiver or modification to any
Financing Document in which Required Lenders have already consented to such
amendment, waiver or modification but the consent of each Lender, or each Lender
affected thereby, is required with respect thereto (each relevant Lender in the
foregoing clauses (i) through (iv) being an “Affected Lender”), Administrative
Agent may, at its option, notify such Affected Lender of such Person’s intention
to obtain, at Borrowers’ expense, a replacement Lender (“Replacement Lender”)
for such Lender, which Replacement Lender shall be an Eligible Assignee and, in
the event the Replacement Lender is to replace an Affected Lender described in
the preceding clause (iv), such Replacement Lender consents to the requested
amendment, waiver or modification making the replaced Lender an Affected Lender.
In the event Administrative Agent obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender shall
sell, at par, and assign all of its Loans and funding commitments hereunder to
such Replacement Lender in accordance with the procedures set forth in
Section 12.6(a); provided, that (i) Borrowers shall have, as applicable,
reimbursed such Lender for its increased costs and additional payments for which
it is entitled to reimbursement under Section 2.8, as applicable, of this
Agreement through the date of such sale and assignment and (ii) Borrowers shall
pay to Administrative Agent the $3,500 processing fee in respect of such
assignment. In the event that a replaced Lender does not execute an Assignment
Agreement pursuant to Section 12.6(a) within five (5) Business Days after
receipt by such replaced Lender of notice of replacement pursuant to this
Section 12.6(c) and presentation to such replaced Lender of an Assignment
Agreement evidencing an assignment pursuant to this Section 12.6(c), such
replaced Lender shall be deemed to have consented to the terms of such
Assignment Agreement, and any such Assignment Agreement executed by
Administrative Agent, the Replacement Lender and, to the extent required
pursuant to Section 12.6(a), Borrower, shall be effective for purposes of this
Section 12.6(c) and Section 12.6(a). Upon any such assignment and payment, such
replaced Lender shall no longer constitute a “Lender” for purposes hereof, other
than with respect to such rights and obligations that survive termination as set
forth in Section 12.1.

(d) Credit Party Assignments. No Credit Party may assign, delegate or otherwise
transfer any of its rights or other obligations hereunder or under any other
Financing Document without the prior written consent of Administrative Agent and
each Lender.

 

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Section 12.7 Confidentiality. Administrative Agent and each Lender shall hold
all non-public information regarding the Credit Parties and their respective
businesses identified as such by Borrowers and obtained by Administrative Agent
or any Lender pursuant to the requirements hereof in accordance with such
Person’s customary procedures for handling information of such nature, except
that disclosure of such information may be made (a) to their respective agents,
employees, Subsidiaries, Affiliates, attorneys, auditors, professional
consultants, rating agencies, insurance industry associations and portfolio
management services, (b) to prospective transferees or purchasers of any
interest in the Loans, provided, however, that any such Persons shall have
agreed to be bound by the provisions of this Section, (c) as required by Law,
subpoena, judicial order or similar order and in connection with any litigation,
(d) as may be required in connection with the examination, audit or similar
investigation of such Person, and (e) to a Person that is a trustee, investment
advisor, collateral manager, servicer, noteholder or secured party in a
Securitization (as hereinafter defined) in connection with the administration,
servicing and reporting on the assets serving as collateral for such
Securitization. For the purposes of this Section, “Securitization” shall mean a
public or private offering by a Lender or any of its Affiliates or their
respective successors and assigns, of securities which represent an interest in,
or which are collateralized, in whole or in part, by the Loans. Confidential
information shall include only such information identified as such at the time
provided to Administrative Agent or Lender, as the case may be, and shall not
include information that either: (i) is in the public domain, or becomes part of
the public domain after disclosure to such Person through no fault of such
Person, or (ii) is disclosed to such Person by a Person other than a Credit
Party, provided, however, Administrative Agent does not have actual knowledge
that such Person is prohibited from disclosing such information. The obligations
of Administrative Agent and Lenders under this Section shall supersede and
replace the obligations of Administrative Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered by
Administrative Agent or any Lender prior to the date hereof.

Section 12.8 Waiver of Consequential and Other Damages. To the fullest extent
permitted by applicable law, no Borrower shall assert, and each Borrower hereby
waives, any claim against any Indemnitee (as defined below), on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of this Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby,
any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.

Section 12.9 GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT, EACH
NOTE AND EACH OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO OR
THERETO OR ARISING THEREFROM (WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR
OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK AND IRREVOCABLY
AGREES THAT, SUBJECT TO ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER FINANCING
DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND
ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH
BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO
SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND SERVICE SO MADE
SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

Section 12.10 WAIVER OF JURY TRIAL. EACH BORROWER, ADMINISTRATIVE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH

 

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BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER ACKNOWLEDGES THAT THIS WAIVER IS
A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS
RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING
DOCUMENTS, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED
FUTURE DEALINGS. EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS
AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER
WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL
RIGHTS.

Section 12.11 Publication; Advertisement.

(a) Publication. No Credit Party will directly or indirectly publish, disclose
or otherwise use in any public disclosure, advertising material, promotional
material, press release or interview, any reference to the name, logo or any
trademark of Merrill Lynch or any of its Affiliates or any reference to this
Agreement or the financing evidenced hereby, in any case except (i) as required
by Law, subpoena or judicial or similar order, in which case the applicable
Credit Party shall give Administrative Agent prior written notice of such
publication or other disclosure, or (ii) with Merrill Lynch’s prior written
consent.

(b) Advertisement. Each Lender and each Credit Party hereby authorizes Merrill
Lynch to publish the name of such Lender and Credit Party, the existence of the
financing arrangements referenced under this Agreement, the primary purpose
and/or structure of those arrangements, the amount of credit extended under each
facility, the title and role of each party to this Agreement, and the total
amount of the financing evidenced hereby in any “tombstone”, comparable
advertisement or press release which Merrill Lynch elects to submit for
publication. In addition, each Lender and each Credit Party agrees that Merrill
Lynch may provide lending industry trade organizations with information
necessary and customary for inclusion in league table measurements after the
Closing Date. With respect to any of the foregoing, Merrill Lynch shall provide
Borrowers with an opportunity to review and confer with Merrill Lynch regarding
the contents of any such tombstone, advertisement or information, as applicable,
prior to its submission for publication and, following such review period,
Merrill Lynch may, from time to time, publish such information in any media form
desired by Merrill Lynch, until such time that Borrowers shall have requested
Merrill Lynch cease any such further publication.

Section 12.12 Counterparts; Integration. This Agreement and the other Financing
Documents may be signed in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument. Signatures by facsimile or by email delivery of an
electronic version of an executed signature page shall bind the parties hereto.
This Agreement and the other Financing Documents constitute the entire agreement
and understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.

Section 12.13 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.

Section 12.14 Lender Approvals. Unless expressly provided herein to the
contrary, any approval, consent, waiver or satisfaction of Administrative Agent
or Lenders with respect to any matter that is the subject of this Agreement, the
other Financing Documents may be granted or withheld by Administrative Agent and
Lenders in their sole and absolute discretion and credit judgment.

Section 12.15 Expenses; Indemnity

(a) Borrowers agree to pay all reasonable legal, audit and appraisal fees and
all other reasonable out-of-pocket charges and expenses incurred by
Administrative Agent and Lenders (including the fees and expenses of
Administrative Agent’s counsel, advisors and consultants) in connection with the
negotiation, preparation, legal review and execution of each of the Financing
Documents, including but not limited to UCC and judgment lien searches and UCC
filings and fees for post-closing UCC and judgment lien searches. In addition,
Borrowers shall

 

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pay all such fees and expenses associated with any amendments, modifications and
terminations to the Financing Documents following closing. If Administrative
Agent or any Lender uses in-house counsel for any of these purposes, Borrowers
further agree that the Obligations include reasonable charges for such work
commensurate with the fees that would otherwise be charged by outside legal
counsel selected by Administrative Agent or such Lender for the work performed.

(b) Borrowers agree to pay all out-of-pocket charges and expenses incurred by
Administrative Agent (including the fees and expenses of Administrative Agent’s
counsel, advisers and consultants) in connection with the administration of this
Agreement and the other Financing Documents and the credit facilities provided
hereunder and thereunder, the administration, enforcement, protection or
preservation of any right or claim of Administrative Agent, the termination of
this Agreement, the termination of any Liens of Administrative Agent on the
Collateral, or the collection of any amounts due under the Financing Documents,
including any such charges and expenses incurred in connection with any
“work-out” or with any proceeding under the Bankruptcy Code with respect to any
Credit Party. If Administrative Agent uses in-house counsel for any of these
purposes (i.e., for any task in connection with the enforcement, protection or
preservation of any right or claim of Administrative Agent and Lenders and the
collection of any amounts due under the Financing Documents or in connection
with any other purpose mentioned in the foregoing sentence), Borrowers further
agree that the Obligations include reasonable charges for such work commensurate
with the fees that would otherwise be charged by outside legal counsel selected
by Administrative Agent for the work performed.

(c) Borrowers hereby indemnify and agree to defend (with counsel acceptable to
Administrative Agent) and hold harmless Administrative Agent, each Lender, and
their respective shareholders, directors, partners, officers, agents and
employees (collectively in the singular, “Indemnitee”) from and against any
liability, loss, cost, expense (including reasonable attorneys’ fees and
expenses for both in-house and outside counsel), claim, damage, suit, action or
proceeding ever suffered or incurred by any Indemnitee or in which an Indemnitee
may ever be or become involved (whether as a party, witness or otherwise)
(a) arising from any Credit Party’s failure to observe, perform or discharge any
of its covenants, obligations, agreements or duties under the Financing
Documents, (b) arising from the breach of any of the representations or
warranties contained in any Financing Document, (c) arising by reason of this
Agreement, the other Financing Documents or the transactions contemplated hereby
or thereby, or (d) relating to claims of any Person with respect to the
Collateral; provided, however, Borrowers shall not be liable under this
Section 12.15(c) to the extent such loss is primarily related to Indemnitee’s
gross negligence or willful misconduct.

(d) Notwithstanding any contrary provision in this Agreement, the obligations of
Borrowers under this Section shall survive the payment in full of the
Obligations and the termination of this Agreement. NO INDEMNITEE SHALL BE
RESPONSIBLE OR LIABLE TO THE BORROWERS OR TO ANY OTHER PARTY TO ANY FINANCING
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS AGREEMENT OR ANY OTHER
FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION CONTEMPLATED
HEREUNDER OR THEREUNDER.

 

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Section 12.16 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition or other proceeding be
filed by or against any Credit Party for liquidation or reorganization, should
any Credit Party become insolvent or make an assignment for the benefit of any
creditor or creditors or should an interim receiver, receiver, receiver and
manger or trustee be appointed for all or any significant part of any Credit
Party’s assets, and shall continue to be effective or to be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a fraudulent conveyance, preference or otherwise, all as though such
payment or performance had not been made. In the event that any payment, or any
part thereof, is rescinded, reduced, restored or returned, the Obligations shall
be reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

 

58

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IN WITNESS WHEREOF, intending to be legally bound, and intending that this
document constitute an instrument executed and delivered under seal, the parties
hereto have caused this Agreement to be duly executed under seal by their
respective authorized officers as of the day and year first above written.

BORROWER:

 

BARRIER THERAPEUTICS, INC. By:  

/S/ GEERT CAUWENBERGH

 

  [SEAL] Name:  

GEERT CAUWENBERGH

 

  Title:  

CHIEF EXECUTIVE OFFICER

 

 

Address:

Barrier Therapeutics, Inc.

600 College Road East

Princeton, New Jersey 08540-6697

Attn: General Counsel                            

Facsimile: (609) 945-1212

E-Mail: abristow@barriertherapeutics.com

AGENT:

 

MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent and a Lender

By:  

/S/ WILLIAM D. GOULD

 

  [SEAL] Name:  

WILLIAM D. GOULD

 

  Title:  

DIRECTOR

 

 

Address:

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Account Manager for MLC-HCF Barrier Therapeutics, Inc. transaction

Facsimile: (866) 231-8408

E-Mail: MLC_HCF_ABL1@ml.com

With copies to:

Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (312) 499-3245

Merrill Lynch Capital

7700 Wisconsin Ave., Suite 400

Bethesda, Maryland 20814

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (866) 341-9053

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

Payment Account Designation:

LaSalle Bank

200 West Monroe

Chicago, IL 60606

ABA #: 071000505

Account Name: MLBFS Healthcare Finance

Account #: 5800395088

Attention: Barrier Therapeutics, Inc.

LENDERS:

 

MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial Services Inc.,

as Lender

By:  

/S/ WILLIAM D. GOULD

 

  [SEAL] Name:  

WILLIAM D. GOULD

 

  Title:  

DIRECTOR

 

 

Address:

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Account Manager for MLC-HCF Barrier Therapeutics, Inc. transaction

Facsimile: (866) 231-8408

E-Mail: MLC_HCF_ABL1@ml.com

With copies to:

Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (312) 499-3245

Merrill Lynch Capital

7700 Wisconsin Ave., Suite 400

Bethesda, Maryland 20814

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (866) 341-9053

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

ANNEXES, EXHIBITS, RIDERS AND SCHEDULES

 

ANNEXES

Annex A

   Commitment Annex EXHIBITS

Exhibit A

   [Reserved]

Exhibit B

   Form of Compliance Certificate

Exhibit C

   Form of Borrowing Base Certificate

Exhibit D

   Form of Notice of Borrowing

Exhibit E

   Payment Notification

Exhibit F

   Products RIDERS

Pharma Rider

   SCHEDULES

Schedule 1.1

   List of Products Referenced in “Permitted Asset Dispositions”

Schedule 3.1

   Existence, Organizational ID Numbers, Foreign Qualification, Prior Names

Schedule 3.3

   Capitalization

Schedule 3.11

   Compliance of Products

Schedule 4.3

   Insurance

Schedule 4.4

   Material Contracts

Schedule 4.8

   Notices of Certain Events

Schedule 4.9

   Intellectual Property

Schedule 4.12

   Post-Closing Obligations

Schedule 5.1

   Debt; Contingent Obligations

Schedule 5.2

   Liens

Schedule 5.4

   Asset Dispositions

Schedule 5.5

   Investments; Exceptions to Covenant to Add Subsidiaries as Co-Borrowers

Schedule 5.6

   Affiliate Transactions

Schedule 5.8

   Business Description

Schedule 5.9

   Deposit Accounts and Securities Accounts

Schedule 9.1

   Collateral Description

Schedule 9.2

   Location of Collateral

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   Annex A to Credit Agreement (Commitment Annex)

 

Lender

   Revolving Loan Commitment
Amount    Revolving Loan Commitment
Percentage  

Merrill Lynch Capital

   $ 12,000,000.00    100 %

 

Exhibit A - Page 1

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  Exhibit A to Credit Agreement – [Reserved]

 

Exhibit A - Page 2

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  Exhibit B to Credit Agreement (Form of Compliance Certificate)

COMPLIANCE CERTIFICATE

Date:                 ,         

This certificate is given by                     , a Responsible Officer of
Barrier Therapeutics, Inc. (“Borrower Representative”), pursuant to that certain
Credit and Security Agreement dated as of June 29, 2007 among Borrower
Representative and any additional Borrower that may be a party thereto or from
time to time be added thereto (collectively, “Borrowers”), Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc.,
individually as a Lender and as Administrative Agent, and the financial
institutions or other entities from time to time parties thereto, each as a
Lender (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”). Capitalized terms
used herein without definition shall have the meanings set forth in the Credit
Agreement.

The undersigned Responsible Officer hereby certifies to Administrative Agent and
Lenders that:

 

Exhibit B - Page 1

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(a) the financial statements delivered with this certificate in accordance with
Section 4.1 of the Credit Agreement fairly present in all material respects the
results of operations and financial condition of Borrowers and their
Subsidiaries as of the dates and the accounting period covered by such financial
statements;

(b) I have reviewed the terms of the Credit Agreement and have made, or caused
to be made under my supervision, a review in reasonable detail of the
transactions and conditions of Borrowers and their Subsidiaries during the
accounting period covered by such financial statements;

(c) such review has not disclosed the existence during or at the end of such
accounting period, and I have no knowledge of the existence as of the date
hereof, of any condition or event that constitutes a Default or an Event of
Default, except as set forth in Schedule 1 hereto, which includes a description
of the nature and period of existence of such Default or an Event of Default and
what action Borrowers have taken, are undertaking and propose to take with
respect thereto;

(d) Except as noted on Schedule 2 attached hereto, the Credit Agreement contains
a complete and accurate list of all business locations of Borrowers and
guarantors of the Obligations and all names under which Borrowers or such
guarantors currently conduct business; Schedule 2 specifically notes any changes
in the names under which Borrowers or such guarantors conduct business;

(e) Except as noted on Schedule 3 attached hereto, the undersigned has no
knowledge of any federal or state tax liens having been filed against the
Borrowers, any guarantors of the Obligations or any Collateral;

(f) Except as noted on Schedule 3 attached hereto, the undersigned has no
knowledge of any failure of the Borrowers or any guarantors of the Obligations
to make required payments of withholding or other tax obligations of the
Borrowers or any guarantors of the Obligations during the accounting period to
which the attached statements pertain or any subsequent period;

(g) If the Credit Agreement contemplates a lien on the Deposit Accounts and
Securities Accounts of the Borrowers and/or guarantors of the Obligations in
favor of Administrative Agent, Schedule 4 attached hereto contains a complete
and accurate statement of all Deposit Accounts and Securities Accounts
maintained by Borrowers or guarantors of the Obligations;

(h) Except as noted on Schedule 5 attached hereto, the undersigned has no
knowledge of any matter for which disclosure or notice is required under
Section 4.8 that has not previously been reported to Administrative Agent on
Schedule 4.8 to the Credit Agreement or any Schedule 5 to any previous
Compliance Certificate delivered by Borrower Representative to Administrative
Agent;

(i) Except as noted on Schedule 6 attached hereto, no Borrower has acquired, by
purchase, by the approval or granting of any application for registration
(whether or not such application was previously disclosed to Administrative
Agent by Borrowers) or otherwise, any Intellectual Property that is registered
with any United States or foreign Governmental Authority, or has filed with any
such United States or foreign Governmental Authority, any new application for
the registration of any Intellectual Property, or acquired rights under a
license as a licensee with respect to any such registered Intellectual Property
(or any such application for the registration of Intellectual Property) owned by
another Person, that has not previously been reported to Administrative Agent on
Schedule 4.9 to the Credit Agreement or any Schedule 6 to any previous
Compliance Certificate delivered by Borrower Representative to Administrative
Agent; and

(j) Except as noted in Schedule 7 attached hereto, no Borrower has entered into
any contract with a Governmental Authority pursuant to which payments are to be
made by such Governmental Authority to a Borrower.

 

Exhibit B - Page 2

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

The foregoing certifications and computations are made as of                 ,
        (end of month) and delivered this      day of             , 20    .

 

Sincerely, By  

 

Name  

 

Title  

 

Schedules to Compliance Certificate

Schedule 1 – Non-Compliance with Covenants

Schedule 2 – Business Locations and Names of Borrowers and Guarantors

Schedule 3 – Tax Liens; Unpaid Tax or Withholding Obligations

Schedule 4 – List of all Deposit Accounts and Securities Accounts of Borrowers
and Guarantors

Schedule 5 – Notices required under Section 4.8

Schedule 6 – Newly Acquired Intellectual Property and Intellectual Property
Licenses

Schedule 7 – Government Contracts

 

Exhibit B - Page 3

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  Exhibit C to Credit Agreement (Form of Borrowing Base Certificate)

[Underwriter to provide form]

 

Exhibit C - Page 1

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  Exhibit D to Credit Agreement (Form of Notice of Borrowing)

[BORROWER REPRESENTATIVE]

Date:                 ,         

This certificate is given by                     , a Responsible Officer of
Barrier Therapeutics, Inc.                    (“Borrower Representative”),
pursuant to Section 2.1(b)(i) of that certain Credit and Security Agreement
dated as of June 29, 2007 among Borrower Representative and any additional
Borrower that may be a party thereto or from time to time be added thereto
(collectively, “Borrowers”), the Lenders from time to time party thereto and
Merrill Lynch Capital, a division of Merrill Lynch Business Financial Services
Inc., as Administrative Agent for Lenders (as such agreement may have been
amended, restated, supplemented or otherwise modified from time to time the
“Credit Agreement”). Capitalized terms used herein without definition shall have
the meanings set forth in the Credit Agreement.

The undersigned Responsible Officer hereby gives notice to Administrative Agent
of Borrower Representative’s request to on [ date ] borrow $[            ] of
Revolving Loans. Attached is a Borrowing Base Certificate complying in all
respects with the Credit Agreement and confirming that, after giving effect to
the requested advance, the Revolving Loan Outstandings will not exceed the
Revolving Loan Limit.

The undersigned officer hereby certifies that, both before and after giving
effect to the request above (a) each of the conditions precedent set forth in
Section 7.1 and 7.2 have been satisfied, (b) all of the representations and
warranties contained in the Credit Agreement and the other Financing Documents
are true, correct and complete as of the date hereof, except to the extent such
representation or warranty relates to a specific date, in which case such
representation or warranty is true, correct and complete as of such earlier
date, and (c) no Default or Event of Default has occurred and is continuing on
the date hereof.

IN WITNESS WHEREOF, the undersigned officer has executed and delivered this
certificate this      day of             ,         .

 

By:     Name:  

 

Title:  

 

 

Exhibit D - Page 1

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  Exhibit F to Credit Agreement (Products)

Xolegel

Vusion

Solage’

 

Exhibit D - Page 1

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

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  Pharma Rider

PHARMA RIDER

This Pharma Rider is made a part of and is incorporated by reference into that
certain Credit and Security Agreement (the “Credit Agreement”) dated June 29,
2007 by and among Barrier Therapeutics, Inc., a Delaware corporation and any
additional Borrower that may hereafter be added to this Agreement (each
individually as a Borrower and collectively as Borrowers), MERRILL LYNCH
CAPITAL, a division of Merrill Lynch Business Financial Services Inc.,
individually as a Lender, and as Administrative Agent, and the financial
institutions or other entities from time to time parties hereto, each as a
Lender.

In consideration of the premises and the agreements, provisions and covenants
herein contained and in the Credit Agreement, Borrowers, Lenders and
Administrative Agent agree as follows:

Section 1 Definitions. All capitalized terms not otherwise defined in this Rider
shall have the meanings given them in the Credit Agreement.

Section 1.1 Additional Defined Terms. The following additional definitions are
hereby appended to Section 1.1 of the Credit Agreement:

“Correction” means repair, modification, adjustment, relabeling, destruction or
inspection (including patient monitoring) of a product without its physical
removal to some other location.

“DEA” means the Drug Enforcement Administration of the United States of America
and any successor agency thereof.

“Drug Application” means a new drug application, an abbreviated drug
application, or a product license application for any product, as appropriate,
as those terms are defined in the FDCA.

“FDA” means the Food and Drug Administration of the United States of America or
any successor entity thereto.

“FDCA” means the Federal Food, Drug and Cosmetic Act, as amended, 21 U.S.C.
Section 301 et seq. and all regulations promulgated thereunder.

“Good Manufacturing Practices” means current good manufacturing practices, as
set forth in 21 C.F.R. Parts 210 and 211.

“Market Withdrawal” means a Person’s Removal or Correction of a distributed
product which involves a minor violation that would not be subject to legal
action by the FDA or which involves no violation.

“Permits” means licenses, certificates, accreditations, product clearances or
approvals, provider numbers or provider authorizations, marketing
authorizations, other authorizations, registrations, permits, consents and
approvals required in connection with the conduct of any Borrower’s or any
Subsidiary’s business or to comply with any applicable Laws, including, without
limitation, drug listings and drug establishment registrations under 21 U.S.C.
Section 510, registrations issued by DEA under 21 U.S.C. Section 823 (if
applicable to any Product), and those issued by State governments for the
conduct of any Borrower’s or any Subsidiary’s business.

“Products” means any products manufactured, sold or marketed by any Borrower or
any of its Subsidiaries for which a Drug Application has been submitted or
approved, including without limitation, those products set forth on Exhibit F
(as updated from time to time in accordance with Section 3.11(c)(i) below),
provided that, if Borrowers shall fail to comply with their obligations under
Section 3.11(c)(i) to give notice to Agent and update Exhibit F prior to
manufacturing, selling or marketing any new Product, any such improperly
undisclosed Product shall be deemed to be included in this definition.

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

“Recall” means a withdrawal mandated by the FDA or a discretionary withdrawal of
a marketed drug that the FDA considers to be in violation of the laws it
administers and against which the FDA would initiate legal action, e.g.,
seizure.

“Removal” means the physical removal of a device from its point of use to some
other location for repair, modification, adjustment, relabeling, destruction, or
inspection.

“Required Permit” means a Permit issued or required under Laws applicable to the
business of any Borrower or any of its Subsidiaries or necessary in the
manufacturing, importing, exporting, possession, ownership, warehousing,
marketing, promoting, sale, labeling, furnishing, distribution or delivery of
goods or services under Laws applicable to the business of any Borrower or any
of its Subsidiaries or any Drug Application (including without limitation, at
any point in time, all licenses, approvals and permits issued by the FDA or any
other applicable Governmental Entity necessary for the testing, manufacture,
marketing or sale of any Product by any applicable Borrower(s) as such
activities are being conducted by such Borrower(s) with respect to such Product
at such time).

Section 2 Additional Representations and Warranties. The following is hereby
appended to the Credit Agreement as new Section 3.11:

Section 3.11 Compliance of Products.

(a) Each Credit Party:

(i) has obtained all Required Permits, or has contracted with third parties
holding Required Permits, necessary for compliance with all Laws and all such
Required Permits are current, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect;

(ii) has not, to its knowledge, used the services of any Person debarred under
the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C.
Section 335a (a) or (b);

(iii) warrants and represents that to its knowledge none of its officers,
directors, employees, their agents or affiliates has been convicted of any crime
or engaged in any conduct for which debarment is mandated by 21 U.S.C.
Section 335a (a) or authorized by 21 U.S. Section 335a (b);

(iv) warrants and represents that to its knowledge none of its officers,
directors, employees, their agents or affiliates has made an untrue statement of
material fact or fraudulent statement to the FDA or failed to disclose a
material fact required to be disclosed to the FDA, committed an act, made a
statement, or failed to make a statement that could reasonably be expected to
provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue
Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in 56
Fed. Regulation 46191 (September 10, 1991);

(v) has not received any written notice that any Governmental Authority,
including without limitation the FDA, the DEA, the Office of the Inspector
General of HHS or the United States Department of Justice has commenced or
threatened to initiate any action against a Credit Party, any action to enjoin a
Credit Party, their officers, directors, or to its knowledge, employees, or
their agents and Affiliates, from conducting their businesses at any facility
owned or used by them or for any material civil penalty, injunction, seizure or
criminal action;

(vi) except as set forth on Schedule 3.11, has not received from the FDA or the
DEA, at any time since January 1, 2003, a Warning Letter, Form FDA-483,
“Untitled Letter,” other correspondence or notice setting forth alleged
violations of laws and regulations enforced by the FDA or the DEA, or any
comparable correspondence from any state or local authority responsible for
regulating drug products and establishments, or any comparable correspondence
from any foreign counterpart of the FDA or DEA, or any comparable correspondence
from any foreign counterpart of any state or local authority with regard to any
Product or the manufacture, processing, packing, or holding thereof; and

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

(vii) except as set forth on Schedule 3.11, has not engaged in any Recalls or
other forms of product retrieval from the marketplace of any Products since
January 1, 2003.

(b) None of the Credit Parties, their Affiliates or any of their respective
agents acting or benefiting in any capacity in connection with the transactions
contemplated by this Agreement is (i) in violation of any Anti-Terrorism Law,
(ii) engages in or conspires to engage in any transaction that evades or avoids,
or has the purpose of evading or avoiding, or attempts to violate, any of the
prohibitions set forth in any Anti-Terrorism Law, or (iii) is a Blocked Person.
No Credit Party nor, to the knowledge of any Credit Party, any of its Affiliates
or agents acting or benefiting in any capacity in connection with the
transactions contemplated by this Agreement, (x) conducts any business or
engages in making or receiving any contribution of funds, goods or services to
or for the benefit of any Blocked Person, or (y) deals in, or otherwise engages
in any transaction relating to, any property or interest in property blocked
pursuant to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law.

(c) With respect to Products:

(i) All Products are listed on Exhibit F; provided, however, that, if after the
Closing Date, any Borrower wishes to sell or market any new Product, Borrowers
shall give prior written notice to Administrative Agent of such intention (which
shall include a brief description of such Product), along with a copy of an
amended and restated Exhibit F; and provided, further that Borrowers shall
promptly (but, in any event within 30 days) provide Administrative Agent with a
copy of the FDA’s approval letter for any Product approved after the date
hereof;

(ii) Each Product is not adulterated or misbranded within the meaning of the
FDCA;

(iii) Each Product is not an article prohibited from introduction into
interstate commerce under the provisions of Sections 404, 505 or 512 of the
FDCA;

(iv) Each Product that is sold pursuant to a Credit Party’s belief that it is
not a “new drug”, as that term is defined in 21 U.S.C. Section 321(p), is
generally recognized by qualified experts as safe and effective for its intended
uses as those terms have been interpreted by FDA and the United States Supreme
Court, and has been used for a material extent and for a material time for such
uses;

(v) Each Product for which a Drug Efficacy Study Implementation (DESI) Notice
has been published in the Federal Register and each Product that is identical
to, related to, or similar to such a drug conforms with the requirements set
forth in such DESI Notice;

(vi) Each Product has been and/or shall be manufactured, imported, possessed,
owned, warehoused, marketed, promoted, sold, labeled, furnished, distributed and
marketed in accordance in all material respects with all applicable Permits and
Laws;

(vii) Each Product has been and/or shall be manufactured in accordance with Good
Manufacturing Practices;

(viii) Without limiting the generality of Section 3.11(a)(i) above, with respect
to any Product being tested or manufactured by any Borrower, Borrowers have
received, and such Product shall be the subject of, all Required Permits needed
in connection with the testing or manufacture of such Product as such testing is
currently being conducted by or on behalf of Borrower, and Borrowers have not
received any notice from any applicable Government Authority, specifically
including the FDA, that such Government Authority is conducting an investigation
or review of (A) Borrowers’ manufacturing facilities and processes for such
Product which have disclosed any material deficiencies or violations of Laws
(including Healthcare laws) and/or the Required Permits related to the
manufacture of such Product, or (B) any such Required Permit or that any such
Required Permit has been revoked or withdrawn, nor has any such Governmental
Authority issued any order or recommendation stating that the development,
testing and/or manufacturing of such Product by Borrower should cease;

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

(ix) Without limiting the generality of Section 3.11(a)(i) above, with respect
to any Product marketed or sold by any Borrower, Borrowers shall have received,
and such Product shall be the subject of, all Required Permits needed in
connection with the marketing and sales of such Product as currently being
marketed or sold by Borrower, and Borrowers have not received any notice from
any applicable Governmental Authority, specifically including the FDA, that such
Governmental Authority is conducting an investigation or review of any such
Required Permit or approval or that any such Required Permit has been revoked or
withdrawn, nor has any such Governmental Authority issued any order or
recommendation stating that such marketing or sales of such Product cease or
that such Product be withdrawn from the marketplace; and

(x) Borrowers have not (since the Closing Date) experienced any significant
failures in their manufacturing of any Product such that the amount of such
Product successfully manufactured by Borrowers in accordance with all
specifications thereof and the Required Payments related thereto in any month
shall decrease significantly with respect to the quantities of such Product
produced in the prior month.

Section 3 Additional Affirmative Covenants. The following is hereby appended to
the Credit Agreement as new Section 4.13:

Section 4.13 Covenants Regarding Products and Compliance with Required Permits

(a) Without limiting the generality of Section 4.4, in connection with the
development, testing, manufacture, marketing or sale of each and any product by
any Borrower, Borrowers shall comply in all material respects with all Required
Permits at all times issued by any Government Authority, specifically including
the FDA, with respect to such development, testing, manufacture, marketing or
sales of such product by Borrowers as such activities are at any such time being
conducted by Borrowers.

(b) Without limiting the generality of Section 4.13(a), Borrowers shall not
permit any event or occurrence to occur or to take or to fail to take any action
if the result of any of the forgoing would be that any of the representations
and warranties set forth in Section 3.11 to become untrue in any respect as of
any date and Borrowers shall immediately and in any case within three
(3) Business Days give written notice to Administrative Agent upon any Borrower
becoming aware that any of the representations and warranties set forth in
Section 3.11 with respect to any Product have become incorrect in any respect
(provided that, for the avoidance of doubt, the giving of such notice shall not
cure or result in the automatic waiver of any Default or Event of Default that
may have resulted from such breach of such representation or warranty under the
first part of this sentence).

Section 4 Permitted Investments. The definition of Permitted Investments as used
in the Credit Agreement is hereby modified to include the following: purchases
by Borrowers of the rights to test, develop, manufacture, sell or market any new
pharmaceutical, drug or medical device (and/or any Intellectual Property related
thereto) that will upon such purchase become a Product of Borrowers (provided
that, nothing in the foregoing shall be interpreted or construed to contradict
or limit any of Borrowers’ obligations under Section 3.11 above, particularly
including without limitation the obligations of Borrowers to give prior written
notice to Administrative Agent of Borrowers’ intentions to begin testing,
developing, manufacturing, selling or marketing any new Product).

Section 5 Events of Default. In addition to the events listed in Section 10.1,
the occurrence of any of the following conditions and/or events, whether
voluntary or involuntary, by operation of law or otherwise, shall constitute an
“Event of Default” under the Credit Agreement:

(a) the institution of any proceeding by FDA or similar Governmental Authority
to order the withdrawal of any Product or Product category from the market or to
enjoin Credit Party or any representative of a Credit Party from manufacturing,
marketing, selling or distributing any Product or Product category;

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

(b) the institution of any action or proceeding by any DEA, FDA, or any other
Governmental Authority to revoke, suspend, reject, withdraw, limit, or restrict
any Required Permit held by a Credit Party or any representative of a Credit
Party;

(c) the commencement of any enforcement action against any Credit Party by DEA,
FDA, or any other Governmental Authority;

(d) the recall of any Product (other than the Solage product) from the market,
the voluntary withdrawal of any Product (other than the Solage product) from the
market, or actions to discontinue the sale of any Product (other than the Solage
product);

(e) a change in Law, including a change in FDA or DEA policies or procedures,
occurs which could reasonably be expected to have a Material Adverse Effect; or

(f) the termination of any agreements with manufacturers that supply any
Products or any components of any Products or any changes to any agreements with
manufacturers that supply any Products or any components of any Products that
could reasonably be expected to have a Material Adverse Effect.

IN WITNESS WHEREOF, intending to be legally bound, and intending that this
document constitute an instrument executed and delivered under seal, the
undersigned have executed this document under seal as of the date of the Credit
Agreement.

BORROWER:

BARRIER THERAPEUTICS, INC.

 

By:

 

/S/ GEERT CAUWENBERGH

  [SEAL]

Name:

 

GEERT CAUWENBERGH

 

Title:

 

CHIEF EXECUTIVE OFFICER

 

AGENT:

MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent and a Lender

 

By:

 

/S/ WILLIAM D. GOULD

  [SEAL]

Name:

 

WILLIAM D. GOULD

 

Title:

 

DIRECTOR

 

LENDERS:

MERRILL LYNCH CAPITAL,

a division of Merrill Lynch Business Financial Services Inc.,

as Lender

 

By:

 

/S/ WILLIAM D. GOULD

  [SEAL] Name:  

WILLIAM D. GOULD

 

Title:

 

DIRECTOR