Exhibit 10.1





Exhibit 10.1



CREDIT AGREEMENT




dated as of




July 27, 2011




among




IRIS INTERNATIONAL, INC.,

as Borrower,




The Lenders Party Hereto,

as the Lenders,




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent




J.P. MORGAN SECURITIES INC.,

as Sole Bookrunner and Sole Lead Arranger





 


 









 





TABLE OF CONTENTS




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






 


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TABLE OF CONTENTS

(continued)




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






 


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SCHEDULES:




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






EXHIBITS:




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






 


 









 





CREDIT AGREEMENT



CREDIT AGREEMENT,
dated as of July 27, 2011, among IRIS INTERNATIONAL, INC., a Delaware corporation, the LENDERS
party hereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.




The parties hereto agree as follows:



ARTICLE I




Definitions




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



“ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to
the Alternate Base Rate.



“Acquisition” means (a) the purchase or other acquisition by a Person or its
subsidiaries of all or substantially all of the assets of (or any division or business line of) any
other Person, or (b) the purchase or other acquisition (whether by means of a merger,
consolidation, or otherwise) by a Person or its subsidiaries of all or substantially all of the
Equity Interests of any other Person.



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



“Administrative Agent” means JPMorgan Chase Bank, N.A., in its capacity as
administrative agent for the Lenders hereunder and together with its successors and assigns in such
capacity.



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



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



“Alternate Base Rate” means, for any day, a rate per annum equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%, and (c) the Adjusted LIBO Rate for a one month Interest Period on such day (or if
such day is not a Business Day, the immediately preceding Business Day) plus 2.50%. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall
be effective from and including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.


 


 









 





“Applicable Percentage” means, with respect to any Lender, the percentage of the total
Commitments represented by such Lender’s Commitment; provided that in the case of Section
2.20 when a Defaulting Lender shall exist, “Applicable Percentage” shall mean the percentage of the
total Commitments (disregarding any Defaulting Lender’s Commitment) represented by such Lender’s
Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to any assignments and
to any Lender’s status as a Defaulting Lender at the time of determination.



“Applicable Rate” means, with respect to (a) any ABR Loan, negative one and a half
(-1.50) percentage points, or (b) any Eurodollar Revolving Loan, one and a quarter (1.25)
percentage points.



“Applicable Swingline Cap” means (a) if the Lenders’ Commitments are less than
$20,000,000, an amount equal to the aggregate amount of such Commitments, and (b) if the Lenders’
Commitments are greater than or equal to $20,000,000, an amount equal to $20,000,000.



“Approved Fund” has the meaning assigned to such term in Section 9.04.



“Assessment Rate” means, for any day, the annual assessment rate in effect on such day
that is payable by a member of the Bank Insurance Fund classified as “well-capitalized” and within
supervisory subgroup “B” (or a comparable successor risk classification) within the meaning of 12
C.F.R. Part 327 (or any successor provision) to the Federal Deposit Insurance Corporation for
insurance by such Corporation of time deposits made in dollars at the offices of such member in the
United States; provided that if, as a result of any change in any law, rule or regulation,
it is no longer possible to determine the Assessment Rate as aforesaid, then the Assessment Rate
shall be such annual rate as shall be determined by the Administrative Agent to be representative
of the cost of such insurance to the Lenders.



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



“Availability” means, at any time, an amount equal to (a) the Commitments
minus (b) the Revolving Exposure of all Revolving Lenders, all as determined by the
Administrative Agent in its Permitted Discretion.



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



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



“Borrower” means IRIS INTERNATIONAL, INC., a Delaware corporation.



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



“Borrowing Request” means a request by the Borrower for a Revolving Borrowing in
accordance with Section 2.03.



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


 


2









 





“Capital Expenditures” means, with respect to any Person for any period, the aggregate
of all expenditures by such Person and its subsidiaries during such period that are capital
expenditures as determined in accordance with GAAP, whether such expenditures are paid in cash or
financed.



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



“Change in Control” means (a) the acquisition of ownership, directly or indirectly,
beneficially or of record, by any one Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof) other than Permitted Holders, of Equity Interests representing more than
35% of the aggregate ordinary voting power represented by the issued and outstanding Equity
Interests of the Borrower; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Borrower by Persons who were neither (i) nominated by the board of
directors of the Borrower nor (ii) appointed by directors so nominated; or (c) the acquisition of
direct or indirect Control of the Borrower by any Person or group other than Permitted
Holders. 



“Change in Law” means (a) the adoption of any law, rule or regulation after the date
of this Agreement, (b) any change in any law, rule or regulation or in the interpretation or
application thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the Issuing Bank (or by any applicable lending office of such Lender or
by such Lender’s or the Issuing Bank’s holding company, if any) with any request, guideline or
directive (whether or not having the force of law) of any Governmental Authority made or issued
after the date of this Agreement.



“Class”, when used in reference to any Loan or Borrowing, refers to whether such Loan,
or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.



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



“Collateral” means all assets and interests in assets and proceeds thereof now owned
or hereafter acquired by Borrower or its Subsidiaries in or upon which a Lien is granted by such
Person in favor of Administrative Agent or the Lenders under any of the Loan Documents.



“Commitment” means, with respect to each Lender, the commitment of such Lender to make
Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder,
expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit
Exposure hereunder, as such commitment may be (a) reduced from time to time pursuant to Section
2.09 and (b) reduced or increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender’s Commitment is set forth on Schedule
2.01, or in the Assignment and Assumption pursuant to which such Lender shall have assumed its
Commitment, as applicable. The initial aggregate amount of the Lenders’ Commitments is
$15,000,000.



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


 


3









 





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



“Defaulting Lender” means any Lender, as determined by the Administrative Agent, that
has (a) failed to fund any portion of its Loans or participations in Letters of Credit or Swingline
Loans within three Business Days of the date required to be funded by it hereunder, (b) notified
the Borrower, the Administrative Agent, the Issuing Bank, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations under this Agreement
or has made a public statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits to extend credit,
(c) failed, within three Business Days after request by the Administrative Agent, to confirm that
it will comply with the terms of this Agreement relating to its obligations to fund prospective
Loans and participations in then outstanding Letters of Credit and Swingline Loans, (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within three Business Days of the date when due, unless the subject of a good
faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is
insolvent or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee, administrator, assignee for the benefit of creditors or similar
Person charged with reorganization or liquidation of its business or custodian, appointed for it,
or has taken any action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment or has a parent company that has become the
subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee,
administrator, assignee for the benefit of creditors or similar Person charged with reorganization
or liquidation of its business or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in any such proceeding or
appointment.



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



“dollars” or “$” refers to lawful money of the United States of America.



“EBITDA” means, for any period, Net Income for such period plus (a) without
duplication and to the extent deducted in determining Net Income for such period, the sum of (i)
Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts
attributable to depreciation and amortization expense for such period, (iv) any extraordinary and
non-recurring charges for such period (to the extent that such charges are in an amount that is
satisfactory to Administrative Agent in its discretion), (v) non-cash compensation expense
resulting from payment of compensation to directors, officers, and employees for such period in the
form of Equity Interests of Borrower, and (vi) any other non-cash charges for such period (but
excluding any non-cash charge in respect of an item that was included in Net Income in a prior
period), minus (b) without duplication and to the extent included in Net Income, (i) any
cash payments made during such period in respect of non-cash charges described in clause (a)(v)
taken in a prior period and (ii) any extraordinary gains (to the extent that such gains are in an
amount that is satisfactory to Administrative Agent in its discretion) and any non-cash items of
income for such period, all calculated for the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP.



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



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


 


4









 





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



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



“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from
time to time.



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



“ERISA Event” means (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day
notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding
deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived;
(c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application
for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to
the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC
or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to
appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the
receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is,
or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.



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



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


 


5









 





“Excluded Taxes” means, with respect to the Administrative Agent, any Lender, the
Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of
the Borrower hereunder, (a) income or franchise taxes imposed on (or measured by) its net income
by the United States of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the Borrower is located and
(c) in the case of a Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 2.19(b)), any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) or is attributable to such Foreign Lender’s failure to comply with Section 2.17(e),
except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time
of designation of a new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.17(a).



“Excluded Subsidiaries” means Advanced Digital Imaging Research, LLC and Poly U/A
Systems, Inc.



“Federal Funds Effective Rate” means, for any day, the weighted average (rounded
upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such transactions received
by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.



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



“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction
other than that in which the Borrower is located. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.



“GAAP” means generally accepted accounting principles in the United States of America.



“Governmental Authority” means the government of the United States of America, any
other nation or any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.



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



“Guarantors” means each domestic Subsidiary of Borrower, and “Guarantor” means
any one of them.


 


6









 





“Guaranties” means those certain guaranties executed and delivered by each Guarantor
in favor of Administrative Agent, for the benefit of the Lenders, in form and substance reasonably
satisfactory to Administrative Agent.



“Hazardous Materials” means all explosive or radioactive substances or wastes and all
hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum
distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to
any Environmental Law.



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



“Indemnified Taxes” means Taxes other than Excluded Taxes.



“Interest Election Request” means a request by the Borrower to convert or continue a
Revolving Borrowing in accordance with Section 2.08.



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



“Interest Payment Date” means (a) with respect to any Loan on which interest is
accruing based on the Prime Rate, the 5th day of each month and the Maturity Date, (b) with respect
to any Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months’ duration after the first day of such Interest Period, and (c) the
Maturity Date.


 


7









 





“Interest Period” means with respect to any Eurodollar Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically corresponding day in the
calendar month that is one, two, three or four months thereafter, as the Borrower may elect,
provided, that (i) if any Interest Period would end on a day other than a Business Day,
such Interest Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case such Interest Period
shall end on the next preceding Business Day and (ii) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last Business Day of the
last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made and, thereafter shall be the effective
date of the most recent conversion or continuation of such Borrowing.



“Issuing Bank” means JPMorgan Chase Bank, N.A., in its capacity as the issuer of
Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.06(i).
The Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Issuing Bank, in which case the term “Issuing Bank” shall include any such
Affiliate with respect to Letters of Credit issued by such Affiliate.



“JPM” means JPMorgan Chase Bank, N.A., together with its successors and assigns.



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



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



“Lenders” means the Persons listed on Schedule 2.01 and any other Person that shall
have become a party hereto pursuant to an Assignment and Assumption, other than any such Person
that ceases to be a party hereto pursuant to an Assignment and Assumption, and together with their
respective successors and permitted assigns. Unless the context otherwise requires, the term
“Lenders” includes the Swingline Lender.



“Letter of Credit” means any letter of credit issued pursuant to this Agreement.



“LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period,
the rate appearing on Reuters Screen LIBOR01 (or on any successor or substitute page of such
Service, or any successor to or substitute for such service, providing rate quotations comparable
to those currently provided on such page of such Service, as determined by the Administrative Agent
from time to time for purposes of providing quotations of interest rates applicable to dollar
deposits in the London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not available at such
time for any reason, then the “LIBO Rate” with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits in the approximate amount of
principal outstanding on such date and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in immediately available funds
in the London interbank market at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period.



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


 


8









 





“Loan Documents” means this Agreement, any control agreements, any fee letters, the
Guaranties, the Letters of Credit, any mortgages, the Security Agreements, the Guaranties, any note
or notes executed by Borrower in connection with this Agreement and payable to Administrative Agent
or any Lender, any letter of credit application entered into by Borrower in connection with this
Agreement, any agreement or other document evidencing any Rate Management Transactions, and any
other agreement entered into, now or in the future, by Borrower, any Guarantor, or any of their
respective Subsidiaries and Administrative Agent and/or any Lender or any of their respective
Affiliates, whether in connection with this Agreement or otherwise.



“Loan Parties” means the Borrower, the Borrower’s domestic Subsidiaries and any other
Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors
and assigns.



“Loans” means the loans made by the Lenders to the Borrower pursuant to this
Agreement.



“Material Adverse Effect” means a material adverse effect on (a) the business, assets,
operations or condition, financial or otherwise, of the Borrower and the Subsidiaries taken as a
whole, (b) the ability of the Borrower to perform any of its obligations under any of the Loan
Documents or (c) the rights of or benefits available to the Lenders under any of the Loan
Documents.



“Material Indebtedness” means Indebtedness (other than the Loans and Letters of
Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the
Borrower and its Subsidiaries in an aggregate principal amount exceeding $1,000,000. For purposes
of determining Material Indebtedness, the “principal amount” of the obligations of the Borrower or
any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary would be required to
pay if such Swap Agreement were terminated at such time.



“Maturity Date” means July 31, 2013.



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



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



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


 


9









 





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



“Other Taxes” means any and all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any payment made hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement.



“Participant” has the meaning set forth in Section 9.04.



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



“Permitted Acquisition” means any Acquisition so long as:



(a) no Default or Event of Default shall have occurred and be continuing or would result from
the consummation of the proposed Acquisition and the proposed Acquisition is consensual,



(b) no Indebtedness will be incurred, assumed, or would exist with respect to Borrower or its
Subsidiaries as a result of such Acquisition, other than Indebtedness permitted under clause (f) of
Section 6.01 and no Liens will be incurred, assumed, or would exist with respect to the assets of
Borrower or its Subsidiaries as a result or such Acquisition other than Permitted Liens,



(c) Borrower has provided Administrative Agent with written confirmation, supported by
reasonably detailed calculations, that on a pro forma basis (including pro forma adjustments
arising out of events which are directly attributable to such proposed Acquisition, are factually
supportable, and are expected to have a continuing impact, in each case, determined as if the
combination had been accomplished at the beginning of the relevant period, to the extent that such
eliminations and inclusions are mutually and reasonably agreed upon by Borrower and Administrative
Agent) created by adding the historical combined financial statements of Borrower (including the
combined financial statements of any other Person or assets that were the subject of a prior
Permitted Acquisition during the relevant period) to the historical consolidated financial
statements of the Person to be acquired (or the historical financial statements related to the
assets to be acquired) pursuant to the proposed Acquisition, Borrower and its Subsidiaries would
have been in compliance with the financial covenant in Section 6.15 of this Agreement for
the 4 fiscal quarter period ended immediately prior to the proposed date of consummation of such
proposed Acquisition,



(d) Borrower has provided Administrative Agent with written notice of the proposed Acquisition
at least 15 Business Days prior to the anticipated closing date of the proposed Acquisition and,
not later than 5 Business Days prior to the anticipated closing date of the proposed Acquisition,
copies of the acquisition agreement and other material documents relative to the proposed
Acquisition, which agreement and documents must be reasonably acceptable to Administrative Agent,


 


10









 





(e) the assets being acquired (other than a de minimis amount of assets in relation to
Borrower’s and its Subsidiaries’ total assets), or the Person whose stock is being acquired, are
useful in or engaged in, as applicable, the business of Borrower and its Subsidiaries or a business
reasonably related thereto,



(f) the subject assets or Equity Interests, as applicable, are being acquired directly by a
Borrower or one of its Subsidiaries that is a Loan Party, and, in connection therewith, Borrower or
the applicable Loan Party shall have complied with Section 5.11 of this Agreement and, in
the case of an acquisition of Equity Interests, Borrower or the applicable Loan Party shall have
demonstrated to Administrative Agent that the new Loan Parties have received consideration
sufficient to make the joinder documents binding and enforceable against such new Loan Parties, and



(g) the purchase consideration payable in cash or Permitted Investments in respect of all
Permitted Acquisitions (including the proposed Acquisition and including deferred payment
obligations) shall not exceed $10,000,000 in the aggregate in any twelve month period.



“Permitted Encumbrances” means:



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



(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens
imposed by law, arising in the ordinary course of business and securing obligations that are not
overdue by more than 30 days or are being contested in compliance with Section 5.04;



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



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



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



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


provided that the term “Permitted Encumbrances” shall not include any Lien securing
Indebtedness.




“Permitted Holders” means Brown Capital Management, Gamco Investors, Inc., and
Blackrock, Inc.



“Permitted Investments” means:



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


 


11









 





(b) investments in commercial paper maturing within 270 days from the date of acquisition
thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or
from Moody’s;



(c) investments in certificates of deposit, banker’s acceptances and time deposits maturing
within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000;



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



(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange
Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000.



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



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



“Prime Rate” means the rate of interest per annum publicly announced from time to time
by JPM as its prime rate. The Prime Rate is a variable rate and each change in the Prime Rate is
effective from and including the date the change is announced as being effective. The Prime Rate
is a reference rate and may not be JPM’s lowest rate.



“Rate Management Transaction” means (a) any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between the Borrower and JPM and/or its
Affiliates which relate to a Swap Agreement, or (b) any type of transaction that is similar to a
transaction referred to in clause (a) above that is currently, or in the future becomes,
recurrently entered into in the financial markets and which is a forward, swap, future, option or
other derivative on one or more rates, currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to be made, or any
combination of the foregoing transactions.



“Register” has the meaning set forth in Section 9.04.



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



“Required Lenders” means, at any time, Lenders having Revolving Credit Exposures and
unused Commitments representing at least 50.1% of the sum of the total Revolving Credit Exposures
and unused Commitments at such time.


 


12









 





“Requirement of Law” means, as to any Person, the certificate of incorporation and
by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.



“Restricted Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in the Borrower or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, repurchase, redemption, retirement,
acquisition, cancellation or termination of any such Equity Interests in the Borrower or any
option, warrant or other right to acquire any such Equity Interests in the Borrower.



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



“Revolving Loan” means a Loan made pursuant to Section 2.03.



“S&P” means Standard & Poor’s.



“Security Agreements” means those certain security agreements in form and substance
reasonably satisfactory to Administrative Agent, executed and delivered by Borrower and the
Guarantors to Administrative Agent.



“Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of
which is the number one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages (including any marginal, special, emergency or supplemental reserves)
expressed as a decimal established by the Board to which the Administrative Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency
Liabilities” in Regulation D of the Board). Such reserve percentages shall include those imposed
pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding
and to be subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender under such Regulation D
or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as
of the effective date of any change in any reserve percentage.



“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the
payment of which is subordinated to payment of any and all obligations of the Borrower under this
Agreement and the other Loan Documents to the written satisfaction of the Administrative Agent.



“subsidiary” means, with respect to any Person (the “parent”) at any date, any
corporation, limited liability company, partnership, association or other entity the accounts of
which would be consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50% of the equity or
more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as
of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by
the parent and one or more subsidiaries of the parent; provided, however, in no event shall an
Excluded Subsidiary constitute a subsidiary of Borrower.


 


13









 





“Subsidiary” means any subsidiary of the Borrower; provided, however, in no event
shall an Excluded Subsidiary constitute a Subsidiary of Borrower.



“Swap Agreement” means any agreement with respect to any rate swap, swap option, basis
swap, commodity swap, commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, currency swap, cross-currency rate swap, currency option, credit
swap, credit default swap, credit default option, total return swap, other swap, forward rate
transaction, forward, future, foreign exchange transaction, cap, floor, collar, credit protection
transaction, credit spread, repurchase transaction, reverse repurchase transaction, buy/sell-back
transaction, securities lending transaction, weather index transaction or forward purchase or sale
of a security, commodity or other financial instrument or interest (including an option with
respect to any of these transactions), or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt
instruments or securities, or economic, financial or pricing indices or measures of economic,
financial or pricing risk or value or any similar transaction or any combination of these
transactions; provided that no phantom stock or similar plan providing for payments only on
account of services provided by current or former directors, officers, employees or consultants of
the Borrower or the Subsidiaries shall be a Swap Agreement.



“Swingline Exposure” means, at any time, the aggregate principal amount of all
Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall
be its Applicable Percentage of the total Swingline Exposure at such time.



“Swingline Lender” means JPMorgan Chase Bank, N.A., in its capacity as lender of
Swingline Loans hereunder.



“Swingline Loan” means a Loan made pursuant to Section 2.05.



“Taxes” means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.



“Total Indebtedness” means, at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP.



“Transactions” means the execution, delivery and performance by the Borrower of this
Agreement, the borrowing of Loans, the use of the proceeds thereof and the issuance of Letters of
Credit hereunder.



“Type”, when used in reference to any Loan or Borrowing, refers to whether the rate of
interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the
Adjusted LIBO Rate or the Alternate Base Rate.



“Withdrawal Liability” means liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of
Subtitle E of Title IV of ERISA.



SECTION 1.02 Classification of Loans and Borrowings. For purposes of this Agreement,
Loans may be classified and referred to by Class (e.g., a “Revolving Loan”) or by Type
(e.g., a “Eurodollar Loan”) or by Class and Type (e.g., a “Eurodollar Revolving
Loan”). Borrowings also may be classified and referred to by Class (e.g., a “Revolving
Borrowing”) or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g.,
a “Eurodollar Revolving Borrowing”).


 


14









 





SECTION 1.03 Terms Generally. The definitions of terms herein shall apply equally to
the singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The
word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the
context requires otherwise (a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference herein to any Person
shall be construed to include such Person’s successors and assigns, (c) the words “herein”,
“hereof” and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all references herein to
Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of,
and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including cash, securities, accounts and contract rights.



SECTION 1.04 Accounting Terms; GAAP. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; provided that, if the Borrower notifies the Administrative Agent
that the Borrower requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on the operation of
such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of whether any such
notice is given before or after such change in GAAP or in the application thereof, then such
provision shall be interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.



ARTICLE II




The Credits




SECTION 2.01 Commitments. Subject to the terms and conditions set forth herein, each
Lender agrees to make Revolving Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in (a) such Lender’s Revolving Credit
Exposure exceeding such Lender’s Commitment or (b) the total Revolving Credit Exposures exceeding
the total Commitments. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.



SECTION 2.02 Loans and Borrowings. (a) Each Revolving Loan shall be made as part of
a Borrowing consisting of Revolving Loans made by the Lenders ratably in accordance with their
respective Commitments. The failure of any Lender to make any Loan required to be made by it shall
not relieve any other Lender of its obligations hereunder; provided that the Commitments of
the Lenders are several and no Lender shall be responsible for any other Lender’s failure to make
Loans as required.



(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans
or Eurodollar Loans as the Borrower may request in accordance herewith. Each Swingline Loan shall
be an ABR Loan. Each Lender at its option may make any Eurodollar Loan by causing any domestic or
foreign branch or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan in accordance with
the terms of this Agreement.


 


15









 





(c) At the commencement of each Interest Period for any Eurodollar Revolving Borrowing, such
Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less
than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time;
provided that there shall not at any time be more than a total of 3 Eurodollar Revolving
Borrowings outstanding at any given time.



(d) Notwithstanding any other provision of this Agreement, the Borrower shall not be entitled
to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with
respect thereto would end after the Maturity Date.



SECTION 2.03 Requests for Revolving Borrowings. To request a Revolving Borrowing,
the Borrower shall notify the Administrative Agent of such request by telephone (a) in the case of
a Eurodollar Borrowing, not later than 11:00 a.m., Los Angeles time, three Business Days before the
date of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Los Angeles time, one Business Day before the date of the proposed Borrowing; provided that
any such notice of an ABR Revolving Borrowing to finance the reimbursement of an LC Disbursement as
contemplated by Section 2.06(e) may be given not later than 10:00 a.m., Los Angeles time, on the
date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or facsimile to the Administrative Agent of a written
Borrowing Request in a form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following information in compliance
with Section 2.02:




(i) the aggregate amount of the requested Borrowing;




(ii) the date of such Borrowing, which shall be a Business Day;




(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;




(iv) in the case of a Eurodollar Borrowing, the initial Interest Period to be
applicable thereto, which shall be a period contemplated by the definition of the
term “Interest Period”; and




(v) the location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.07.



If no election as to the Type of Revolving Borrowing is specified, then the requested Revolving
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any
requested Eurodollar Revolving Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a Borrowing Request in
accordance with this Section, the Administrative Agent shall advise each Lender of the details
thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.



SECTION 2.04 [Intentionally Omitted].



SECTION 2.05 Swingline Loans. (a) Subject to the terms and conditions set forth
herein, the Swingline Lender agrees to make Swingline Loans to the Borrower from time to time
during the Availability Period, in an aggregate principal amount at any time outstanding that will
not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the
Applicable Swingline Cap or (ii) the total Revolving Credit Exposures exceeding the total
Commitments; provided that the Swingline Lender shall not be required to make a Swingline
Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and reborrow Swingline
Loans.


 


16









 





(b) To request a Swingline Loan, the Borrower shall notify the Administrative Agent of such
request by telephone (confirmed by facsimile), not later than 9:00 a.m., Los Angeles time, on the
day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the
requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such notice received from the
Borrower. The Swingline Lender shall make each Swingline Loan available to the Borrower by means
of a credit to the general deposit account of the Borrower with the Swingline Lender (or, in the
case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in
Section 2.06(e), by remittance to the Issuing Bank) by 12:00 noon, Los Angeles time, on the
requested date of such Swingline Loan.



(c) The Swingline Lender may by written notice given to the Administrative Agent not later
than 10:00 a.m., Los Angeles time, on any Business Day require the Lenders to acquire
participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate.
Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each
Lender, specifying in such notice such Lender’s Applicable Percentage of such Swingline Loan or
Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as
provided above, to pay to the Administrative Agent, for the account of the Swingline Lender, such
Lender’s Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and
agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph
is absolute and unconditional and shall not be affected by any circumstance whatsoever, including
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made by the Borrower without any setoff, deduction, counterclaim,
abatement, or withholding whatsoever. Each Lender shall comply with its obligation under this
paragraph by wire transfer of immediately available funds, in the same manner as provided in
Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply,
mutatis mutandis, to the payment obligations of the Lenders), and the
Administrative Agent shall promptly pay to the Swingline Lender the amounts so received by it from
the Lenders. The Administrative Agent shall notify the Borrower of any participations in any
Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such
Swingline Loan shall be made to the Administrative Agent and not to the Swingline Lender. Any
amounts received by the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender of the proceeds of a
sale of participations therein shall be promptly remitted to the Administrative Agent; any such
amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent
to the Lenders that shall have made their payments pursuant to this paragraph and to the Swingline
Lender, as their interests may appear; provided that any such payment so remitted shall be repaid
to the Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such
payment is required to be refunded to the Borrower for any reason. The purchase of participations
in a Swingline Loan pursuant to this paragraph shall not relieve the Borrower of any default in the
payment thereof.



SECTION 2.06 Letters of Credit. (a) General. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the Issuing Bank, at any
time and from time to time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions of any form of
letter of credit application or other agreement submitted by the Borrower to, or entered into by
the Borrower with, the Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.


 


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(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions. To request
the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter
of Credit), the Borrower shall hand deliver or facsimile (or transmit by electronic communication,
if arrangements for doing so have been approved by the Issuing Bank) to the Issuing Bank and the
Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal
or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal
or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. The Borrower shall have executed the
Issuing Bank’s master agreement for the issuance of commercial Letters of Credit, and if requested
by the Issuing Bank, shall also submit a letter of credit application on the Issuing Bank’s
standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of
each Letter of Credit the Borrower shall be deemed to represent and warrant that), after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure shall not exceed
$5,000,000 and (ii) the Revolving Credit Exposures shall not exceed the total Commitments.



(c) Expiration Date. Each Letter of Credit shall expire at or prior to the close of
business on the earlier of (i) the date one year after the date of the issuance of such Letter of
Credit (or, in the case of any renewal or extension thereof, one year after such renewal or
extension) and (ii) the date that is five Business Days prior to the Maturity Date.



(d) Participations. By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action on the part of the
Issuing Bank or the Lenders, the Issuing Bank hereby grants to each Lender, and each Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal to such Lender’s
Applicable Percentage of the aggregate amount available to be drawn under such Letter of Credit.
In consideration and in furtherance of the foregoing, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement made by the Issuing Bank and not
reimbursed by the Borrower on the date due as provided in paragraph (e) of this Section, or of any
reimbursement payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or
the occurrence and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made by the Borrower without any setoff, deduction, counterclaim,
abatement, or withholding whatsoever.



(e) Reimbursement. If the Issuing Bank shall make any LC Disbursement in respect of a
Letter of Credit, the Borrower shall reimburse such LC Disbursement by paying to the Administrative
Agent an amount equal to such LC Disbursement not later than 12:00 noon, Los Angeles time, on the
date that such LC Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., Los Angeles time, on such date, or, if such notice has not been
received by the Borrower prior to such time on such date, then not later than 12:00 noon, Los
Angeles time, on (i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 10:00 a.m., Los Angeles time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such notice is not
received prior to such time on the day of receipt; provided that the Borrower may, subject
to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or


 


18









 




2.05
that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent
amount and, to the extent so financed, the Borrower’s obligation to make such payment shall be
discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the
Borrower fails to make such payment when due, the Administrative Agent shall notify each Lender of
the applicable LC Disbursement, the payment then due from the Borrower in respect thereof and such
Lender’s Applicable Percentage thereof. Promptly following receipt of such notice, each Lender
shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender
(and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the
Lenders), and the Administrative Agent shall promptly pay to the Issuing Bank the amounts so
received by it from the Lenders. Promptly following receipt by the Administrative Agent of any
payment from the Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuing Bank or, to the extent that Lenders have made payments pursuant to this
paragraph to reimburse the Issuing Bank, then to such Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse the
Issuing Bank for any LC Disbursement (other than the funding of ABR Revolving Loans or a Swingline
Loan as contemplated above) shall not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.




(f) Obligations Absolute. The Borrower’s obligation to reimburse LC Disbursements as
provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any
Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other
document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any
respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by the
Issuing Bank under a Letter of Credit against presentation of a draft or other document that does
not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide a right of setoff against,
the Borrower’s obligations hereunder. Neither the Administrative Agent, the Lenders nor the
Issuing Bank, nor any of their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or
failure to make any payment thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in transmission or
delivery of any draft, notice or other communication under or relating to any Letter of Credit
(including any document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the Issuing Bank;
provided that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to consequential damages,
claims in respect of which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or
wilful misconduct on the part of the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in substantial
compliance with the terms of a Letter of Credit, the Issuing Bank may, in its sole discretion,
either accept and make payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the contrary, or refuse to accept and
make payment upon such documents if such documents are not in strict compliance with the terms of
such Letter of Credit.


 


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(g) Disbursement Procedures. The Issuing Bank shall, promptly following its receipt
thereof, examine all documents purporting to represent a demand for payment under a Letter of
Credit. The Issuing Bank shall promptly notify the Administrative Agent and the Borrower by
telephone (confirmed by facsimile) of such demand for payment and whether the Issuing Bank has made
or will make an LC Disbursement thereunder; provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to reimburse the Issuing Bank
and the Lenders with respect to any such LC Disbursement.



(h) Interim Interest. If the Issuing Bank shall make any LC Disbursement, then,
unless the Borrower shall reimburse such LC Disbursement in full on the date such LC Disbursement
is made, the unpaid amount thereof shall bear interest, for each day from and including the date
such LC Disbursement is made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this
Section, then Section 2.13(d) shall apply. Interest accrued pursuant to this paragraph shall be
for the account of the Issuing Bank, except that interest accrued on and after the date of payment
by any Lender pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be for
the account of such Lender to the extent of such payment.



(i) Replacement of the Issuing Bank. The Issuing Bank may be replaced at any time by
written agreement among the Borrower, the Administrative Agent, the replaced Issuing Bank and the
successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement
of the Issuing Bank. At the time any such replacement shall become effective, the Borrower shall
pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank
shall have all the rights and obligations of the Issuing Bank under this Agreement with respect to
Letters of Credit to be issued thereafter and (ii) references herein to the term “Issuing Bank”
shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing
Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have
all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of
Credit issued by it prior to such replacement, but shall not be required to issue additional
Letters of Credit.



(j) Cash Collateralization. If any Event of Default shall occur and be continuing, on
the Business Day that the Borrower receives notice from the Administrative Agent or the Required
Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure
representing greater than 50.1% of the total LC Exposure) demanding the deposit of cash collateral
pursuant to this paragraph, the Borrower shall deposit in an account with the Administrative Agent,
in the name of the Administrative Agent and for the benefit of the Lenders, an amount in cash equal
to the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided
that the obligation to deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice of any kind, upon
the occurrence of any Event of Default with respect to the Borrower described in clause (h) or (i)
of Article VII. Such deposit shall be held by the Administrative Agent as collateral for the
payment and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the exclusive right of
withdrawal, over such account. Other than any interest earned on the investment of such deposits,
which investments shall be made at the option and sole discretion of the Administrative Agent and
at the Borrower’s risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such account shall be applied
by the Administrative Agent to reimburse the Issuing Bank for LC Disbursements for which it has not
been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such time or, if the maturity of
the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing
greater than 50.1% of the total LC Exposure), be applied to satisfy other obligations of the
Borrower under this Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrower within three Business Days after all Events
of Default have been cured or waived.


 


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SECTION 2.07 Funding of Borrowings. (a) Each Lender shall make each Loan to be made
by it hereunder on the proposed date thereof by wire transfer of immediately available funds by
9:00 a.m., Los Angeles time, to the account of the Administrative Agent most recently designated by
it for such purpose by notice to the Lenders; provided that Swingline Loans shall be made
as provided in Section 2.05. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an account of the
Borrower maintained with the Administrative Agent in New York City and designated by the Borrower
in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the
Administrative Agent to the Issuing Bank.



(b) Unless the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Borrowing that such Lender will not make available to the Administrative Agent
such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this Section and may, in
reliance upon such assumption, make available to the Borrower a corresponding amount. In such
event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each
day from and including the date such amount is made available to the Borrower to but excluding the
date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender’s Loan included in such Borrowing.



SECTION 2.08 Interest Elections. (a) Each Revolving Borrowing initially shall be of
the Type specified in the applicable Borrowing Request and, in the case of a Eurodollar Revolving
Borrowing, shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different Type or to continue
such Borrowing and, in the case of a Eurodollar Revolving Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such portion shall be allocated
ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising
each such portion shall be considered a separate Borrowing. This Section shall not apply to
Swingline Borrowings, which may not be converted or continued.



(b) To make an election pursuant to this Section, the Borrower shall notify the Administrative
Agent of such election by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Revolving Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or facsimile to the
Administrative Agent of a written Interest Election Request in a form approved by the
Administrative Agent and signed by the Borrower.


 


21









 





(c) Each telephonic and written Interest Election Request shall specify the following
information in compliance with Section 2.02:




(i) the Borrowing to which such Interest Election Request applies and, if
different options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below shall be
specified for each resulting Borrowing);




(ii) the effective date of the election made pursuant to such Interest Election
Request, which shall be a Business Day;




(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and




(iv) if the resulting Borrowing is a Eurodollar Borrowing, the Interest Period
to be applicable thereto after giving effect to such election, which shall be a
period contemplated by the definition of the term “Interest Period”.



If any such Interest Election Request requests a Eurodollar
Borrowing but does not specify an Interest Period, then the Borrower
shall be deemed to have selected an Interest Period of one month’s
duration.



(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall
advise each Lender of the details thereof and of such Lender’s portion of each resulting Borrowing.



(e) If the Borrower fails to deliver a timely Interest Election Request with respect to a
Eurodollar Revolving Borrowing prior to the end of the Interest Period applicable thereto, then,
unless such Borrowing is repaid as provided herein, at the end of such Interest Period such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative Agent, at the request
of the Required Lenders, so notifies the Borrower, then, so long as an Event of Default is
continuing (i) no outstanding Revolving Borrowing may be converted to or continued as a Eurodollar
Borrowing and (ii) unless repaid, each Eurodollar Revolving Borrowing shall be converted to an ABR
Borrowing at the end of the Interest Period applicable thereto.



SECTION 2.09 Termination and Reduction of Commitments. (a) Unless previously
terminated, the Commitments shall terminate on the Maturity Date.



(b) The Borrower may at any time terminate, or from time to time reduce, the Commitments;
provided that (i) each reduction of the Commitments shall be in an amount that is an
integral multiple of $500,000 and not less than $500,000 and (ii) the Borrower shall not terminate
or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.11, the Revolving Credit Exposures would exceed the total Commitments.



(c) The Borrower shall notify the Administrative Agent of any election to terminate or reduce
the Commitments under paragraph (b) of this Section at least three Business Days prior to the
effective date of such termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments delivered by
the Borrower may state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice to the
Administrative Agent on or prior to the specified effective date) if such condition is not
satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of
the Commitments shall be made ratably among the Lenders in accordance with their respective
Commitments.


 


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SECTION 2.10 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the
then unpaid principal amount of each Revolving Loan on the Maturity Date, and (ii) to the Swingline
Lender the then unpaid principal amount of each Swingline Loan on the earlier of the Maturity Date
and the first date after such Swingline Loan is made that is the 15th or last day of a calendar
month and is at least two Business Days after such Swingline Loan is made; provided that on
each date that a Revolving Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.



(b) Each Lender shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender resulting from each Loan made by such
Lender, including the amounts of principal and interest payable and paid to such Lender from time
to time hereunder.



(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, the Class and Type thereof and the Interest Period applicable thereto,
(ii) the amount of any principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender’s share thereof.



(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this
Section shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans in accordance with the terms of this Agreement.



(e) Any Lender may request that Loans made by it be evidenced by a promissory note. In such
event, the Borrower shall prepare, execute and deliver to such Lender a promissory note payable to
the order of such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after assignment pursuant
to Section 9.04) be represented by one or more promissory notes in such form payable to the order
of the payee named therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).



SECTION 2.11 Prepayment of Loans. (a) The Borrower shall have the right at any time
and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.



(b) The Borrower shall notify the Administrative Agent (and, in the case of prepayment of a
Swingline Loan, the Swingline Lender) by telephone (confirmed by facsimile) of any prepayment
hereunder (i) in the case of prepayment of a Eurodollar Revolving Borrowing, not later than 11:00
a.m., Los Angeles time, three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Los Angeles time, one Business
Day before the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later
than 12:00 noon, Los Angeles time, on the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or
portion thereof to be prepaid; provided that, if a notice of prepayment is given in
connection with a conditional notice of termination of the Commitments as contemplated by
Section 2.09, then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to
a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof.
Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in
the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section
2.13.


 


23









 





SECTION 2.12 Fees.



(a) [Intentionally Omitted].



(b) The Borrower agrees to pay (i) to the Administrative Agent for the account of each Lender,
in advance on the date when each Letter of Credit is issued and thereafter on the first day of each
fiscal quarter, a participation fee with respect to its participations in Letters of Credit, which
shall accrue at the same Applicable Rate used to determine the interest rate applicable to
Eurodollar Revolving Loans on the average daily amount of such Lender’s LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the period from and including
the Effective Date to but excluding the later of the date on which such Lender’s Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank, concurrently with each issuance, amendment, renewal or extension of any Letter of
Credit, a fronting fee, equal to (A) $500 for each issuance of a new Letter of Credit and (B) $250
for each amendment, renewal, or extension of any Letter of Credit. Any other fees payable to the
Issuing Bank pursuant to this paragraph shall be payable within 10 days after demand. All
participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall
be payable for the actual number of days elapsed (including the first day but excluding the last
day).



(c) The Borrower agrees to pay to the Administrative Agent, for its own account, fees payable
in the amounts and at the times separately agreed upon between the Borrower and the Administrative
Agent.



(d) All fees payable hereunder shall be paid on the dates due, in immediately available funds,
to the Administrative Agent (or to the Issuing Bank, in the case of fees payable to it) for
distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall
not be refundable under any circumstances.



SECTION 2.13 Interest. (a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.



(b) The Loans comprising each Eurodollar Borrowing shall bear interest in the case of a
Eurodollar Revolving Loan, at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.



(c) [Intentionally Omitted].



(d) Notwithstanding the foregoing, during the occurrence and continuance of an Event of
Default, the Administrative Agent or the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 9.02 requiring the consent of “each Lender affected thereby” for reductions in
interest rates), declare that (i) all Loans shall bear interest at 3% plus the rate otherwise
applicable to such Loans as provided in the preceding paragraphs of this Section or (ii) in the
case of any other amount outstanding hereunder, such amount shall accrue at 3% plus the rate
applicable to such fee or other obligation as provided hereunder.


 


24









 





(e) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date
for such Loan and, in the case of Revolving Loans, upon termination of the Commitments;
provided that (i) interest accrued pursuant to paragraph (d) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a
prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest
on the principal amount repaid or prepaid shall be payable on the date of such repayment or
prepayment and (iii) in the event of any conversion of any Eurodollar Revolving Loan prior to the
end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.



(f) Any principal or interest which is not paid within 10 days after its due date (whether as
stated, by acceleration or otherwise) shall be subject to a late payment charge of five percent
(5.00%) of the total payment due, in addition to the payment of interest, up to the maximum amount
of One Thousand Five Hundred and 00/100 Dollars ($1,500.00) per late charge. Borrower agrees to
pay and stipulates that five percent (5.00%) of the total payment due is a reasonable amount for a
late payment charge. Borrower shall pay the late payment charge upon demand by the Administrative
Agent or, if billed, within the time specified.



(g) All interest hereunder shall be computed on the basis of a year of 360 days, except that
interest computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 360 days, and in each case
shall be payable for the actual number of days elapsed (including the first day but excluding the
last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined
by the Administrative Agent, and such determination shall be conclusive absent manifest error.



SECTION 2.14 Alternate Rate of Interest. If prior to the commencement of any Interest
Period for a Eurodollar Borrowing:



(a) the Administrative Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate for such Interest Period; or



(b) the Adjusted LIBO Rate for such Interest Period will not adequately and fairly reflect the
cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in
such Borrowing for such Interest Period;



then the Administrative Agent shall give notice thereof to the Borrower and the Lenders by
telephone or facsimile as promptly as practicable thereafter and, until the Administrative Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such notice no longer
exist, (i) any Interest Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective, and (ii) any request
for a new Eurodollar Borrowing shall be made as a Borrowing based on the Prime Rate.



SECTION 2.15 Increased Costs.



(a) If any Change in Law shall:



(i) impose, modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by, any Lender (except
any such reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or



 


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(ii) impose on any Lender or the Issuing Bank or the London interbank market any other
condition affecting this Agreement or Eurodollar Loans made by such Lender or any Letter of Credit
or participation therein;


and the result of any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost to such Lender or the Issuing Bank of participating in, issuing or maintaining
any Letter of Credit or to reduce the amount of any sum received or receivable by such Lender or
the Issuing Bank hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank, as the case may be, for such additional costs
incurred or reduction suffered.




(b) If any Lender or the Issuing Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such Lender’s or the
Issuing Bank’s capital or on the capital of such Lender’s or the Issuing Bank’s holding company, if
any, as a consequence of this Agreement or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level below
that which such Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company
could have achieved but for such Change in Law (taking into consideration such Lender’s or the
Issuing Bank’s policies and the policies of such Lender’s or the Issuing Bank’s holding company
with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or
the Issuing Bank, as the case may be, such additional amount or amounts as will compensate such
Lender or the Issuing Bank or such Lender’s or the Issuing Bank’s holding company for any such
reduction suffered.



(c) A certificate of a Lender or the Issuing Bank setting forth the amount or amounts
necessary to compensate such Lender or the Issuing Bank or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay such Lender or the Issuing Bank, as
the case may be, the amount shown as due on any such certificate within 10 days after receipt
thereof.



(d) Failure or delay on the part of any Lender or the Issuing Bank to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender’s or the Issuing Bank’s right
to demand such compensation; provided that the Borrower shall not be required to compensate
a Lender or the Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing Bank, as the case may
be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions
and of such Lender’s or the Issuing Bank’s intention to claim compensation therefor;
provided further that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the 270-day period referred to above shall be extended to include
the period of retroactive effect thereof.



SECTION 2.16 Break Funding Payments. In the event of (a) the payment of any principal
of any Eurodollar Loan other than on the last day of an Interest Period applicable thereto
(including as a result of an Event of Default), (b) the conversion of any Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice delivered pursuant
hereto (regardless of whether such notice may be revoked under Section 2.11(b) and is revoked in
accordance therewith), or (d) the assignment of any Eurodollar Loan other than on the last day of
the Interest Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.19, then, in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such Lender to be the
excess, if


 


26









 




any, of
(i) the amount of interest which would have accrued on the principal amount of
such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the then current Interest
Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), over (ii) the amount of interest which would
accrue on such principal amount for such period at the interest rate which such Lender would bid
were it to bid, at the commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after receipt thereof.




SECTION 2.17 Taxes. (a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as
the case may be) receives an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with applicable law.



(b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.



(c) The Borrower shall indemnify the Administrative Agent, each Lender and the Issuing Bank,
within 10 days after written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by the Administrative Agent, such Lender or the Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender or the Issuing Bank, or by the Administrative Agent
on its own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent manifest
error.



(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the
Borrower to a Governmental Authority, the Borrower shall deliver to the Administrative Agent the
original or a certified copy of a receipt issued by such Governmental Authority evidencing such
payment, a copy of the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Administrative Agent.



(e) Any Foreign Lender that is entitled to an exemption from or reduction of withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without withholding or at a
reduced rate.


 


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(f) If the Administrative Agent or a Lender determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower
or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.17, it
shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.17 with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or
such Lender and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any
penalties, interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or such Lender is
required to repay such refund to such Governmental Authority. This Section shall not be construed
to require the Administrative Agent or any Lender to make available its tax returns (or any other
information relating to its taxes which it deems confidential) to the Borrower or any other Person.



SECTION 2.18 Payments Generally; Pro Rata Treatment; Sharing of Set-offs; Authorization to
Debit Bank Account. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts
payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00 noon, Los Angeles time, on
the date when due, in immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Administrative Agent, be deemed
to have been received on the next succeeding Business Day for purposes of calculating interest
thereon. All such payments shall be made to the Administrative Agent at its offices at 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, except payments to be made directly to the Issuing
Bank or Swingline Lender as expressly provided herein and except that payments pursuant to Sections
2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The
Administrative Agent shall distribute any such payments received by it for the account of any other
Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder
shall be due on a day that is not a Business Day, the date for payment shall be extended to the
next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon
shall be payable for the period of such extension. All payments hereunder shall be made in
dollars.



(b) If at any time insufficient funds are received by and available to the Administrative
Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then
due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed
LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal and unreimbursed LC Disbursements then due to such parties.



(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise,
obtain payment in respect of any principal of or interest on any of its Revolving Loans or
participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans and participations in LC
Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans and participations in LC Disbursements and Swingline
Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be
shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Revolving Loans and participations in LC Disbursements and Swingline
Loans; provided that (i) if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and (ii) the provisions
of this paragraph shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment obtained by a


 


28









 




Lender as
consideration for the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to the Borrower or
any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may effectively do so under
applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements
may exercise against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.




(d) Unless the Administrative Agent shall have received notice from the Borrower prior to the
date on which any payment is due to the Administrative Agent for the account of the Lenders or the
Issuing Bank hereunder that the Borrower will not make such payment, the Administrative Agent may
assume that the Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuing Bank, as the case may be,
the amount due. In such event, if the Borrower has not in fact made such payment, then each of the
Lenders or the Issuing Bank, as the case may be, severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking industry rules on
interbank compensation.



(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section
2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its
discretion and notwithstanding any contrary provision hereof, (i) apply any amounts thereafter
received by the Administrative Agent for the account of such Lender and for the benefit of the
Administrative Agent, the Swingline Lender or the Issuing Bank to satisfy such Lender’s obligations
under such Sections until all such unsatisfied obligations are fully paid, and/or (ii) hold any
such amounts in a segregated account as cash collateral for, and application to, any future funding
obligations of such Lender under such Sections; in the case of each of (i) and (ii) above, in any
order as determined by the Administrative Agent in its discretion.



(f) To effectuate any payment due under this Agreement or under any other Loan Document, the
Borrower hereby authorizes the Administrative Agent to initiate debit entries to Account Number
935435428 at JPMorgan Chase Bank, N.A. and to debit the same to such account. This authorization
to initiate debit entries shall remain in full force and effect until the Administrative Agent has
received written notification of its termination in such time and in such manner as to afford the
Administrative Agent a reasonable opportunity to act on it. The Borrower represents that the
Borrower is and will be the owner of all funds in such account. The Borrower acknowledges: (i)
that such debit entries may cause an overdraft of such account which may result in the
Administrative Agent’s refusal to honor items drawn on such account until adequate deposits are
made to such account; (ii) that the Administrative Agent is under no duty or obligation to initiate
any debit entry for any purpose; and (iii) that if a debit is not made because the above-referenced
account does not have a sufficient available balance, or otherwise, the payment may be late or past
due.



SECTION 2.19 Mitigation Obligations; Replacement of Lenders.



(a) If any Lender requests compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different
lending office for funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section
2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The
Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.


 


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(b) If any Lender requests compensation under Section 2.15, or if the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.17, or if any Lender becomes a Defaulting Lender, then the Borrower may, at
its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such
Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under this Agreement to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and if a Commitment is being assigned, the Issuing
Bank), which consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and participations in LC
Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and (iii) in the case of any
such assignment resulting from a claim for compensation under Section 2.15 or payments required to
be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation
or payments. A Lender shall not be required to make any such assignment and delegation if, prior
thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.



SECTION 2.20 Defaulting Lenders. Notwithstanding any provision of this Agreement to
the contrary, if any Lender becomes a Defaulting Lender, then the following provisions shall apply
for so long as such Lender is a Defaulting Lender:



(a) fees shall cease to accrue on the unfunded portion of the Commitment of such Defaulting
Lender pursuant to Section 2.12(a);



(b) the Commitment and Revolving Credit Exposure of such Defaulting Lender shall not be
included in determining whether all Lenders or the Required Lenders have taken or may take any
action hereunder (including any consent to any amendment or waiver pursuant to Section 9.02),
provided that any waiver, amendment or modification requiring the consent of all Lenders or each
affected Lender which affects such Defaulting Lender differently than other affected Lenders shall
require the consent of such Defaulting Lender;



(c) if any Swingline Exposure or LC Exposure exists at the time a Lender becomes a Defaulting
Lender then:



(i) all or any part of such Swingline Exposure and LC Exposure shall be reallocated among the
non-Defaulting Lenders in accordance with their respective Applicable Percentages but only to the
extent (x) the sum of all non-Defaulting Lenders’ Revolving Credit Exposures plus such Defaulting
Lender’s Swingline Exposure and LC Exposure does not exceed the total of all non-Defaulting
Lenders’ Commitments and (y) the conditions set forth in Section 4.02 are satisfied at such time;
and



(ii) if the reallocation described in clause (i) above cannot, or can only partially, be
effected, the Borrower shall within one Business Day following notice by the Administrative Agent
(x) first, prepay such Swingline Exposure and (y) second, cash collateralize such Defaulting
Lender’s LC Exposure (after giving effect to any partial reallocation pursuant to clause (i) above)
in accordance with the procedures set forth in Section 2.06(j) for so long as such LC Exposure is
outstanding;


 


30









 





(iii) if the Borrower cash collateralizes any portion of such Defaulting Lender’s LC Exposure
pursuant to Section 2.20(c), the Borrower shall not be required to pay any fees to such Defaulting
Lender pursuant to Section 2.12(b) with respect to such Defaulting Lender’s LC Exposure during the
period such Defaulting Lender’s LC Exposure is cash collateralized;



(iv) if the LC Exposure of the non-Defaulting Lenders is reallocated pursuant to Section
2.20(c), then the fees payable to the Lenders pursuant to Section 2.12(a) and Section 2.12(b) shall
be adjusted in accordance with such non-Defaulting Lenders’ Applicable Percentages; or



(v) if any Defaulting Lender’s LC Exposure is neither cash collateralized nor reallocated
pursuant to Section 2.20(c), then, without prejudice to any rights or remedies of the Issuing Bank
or any Lender hereunder, all facility fees that otherwise would have been payable to such
Defaulting Lender (solely with respect to the portion of such Defaulting Lender’s Commitment that
was utilized by such LC Exposure) and letter of credit fees payable under Section 2.12(b) with
respect to such Defaulting Lender’s LC Exposure shall be payable to the Issuing Bank until such LC
Exposure is cash collateralized and/or reallocated; and



(d) so long as any Lender is a Defaulting Lender, the Swingline Lender shall not be required
to fund any Swingline Loan and the Issuing Bank shall not be required to issue, amend or increase
any Letter of Credit, unless it is satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be provided by the Borrower
in accordance with Section 2.20(c), and participating interests in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among non-Defaulting
Lenders in a manner consistent with Section 2.20(c)(i) (and Defaulting Lenders shall not
participate therein).


In the event that the Administrative Agent, the Borrower, the Issuing Bank and the Swingline Lender
each agrees that a Defaulting Lender has adequately remedied all matters that caused such Lender to
be a Defaulting Lender, then the Swingline Exposure and LC Exposure of the Lenders shall be
readjusted to reflect the inclusion of such Lender’s Commitment and on such date such Lender shall
purchase at par such of the Loans of the other Lenders (other than Swingline Loans) as the
Administrative shall determine may be necessary in order for such Lender to hold such Loans in
accordance with its Applicable Percentage.




ARTICLE III




Representations and Warranties




The Borrower represents and warrants to the Lenders that:



SECTION 3.01 Organization; Powers. Each of the Borrower and its Subsidiaries is duly
organized, validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.


 


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SECTION 3.02 Authorization; Enforceability. The Transactions are within the
Borrower’s corporate powers and have been duly authorized by all necessary corporate and, if
required, stockholder action. This Agreement has been duly executed and delivered by the Borrower
and constitutes a legal, valid and binding obligation of the Borrower, enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors’ rights generally and subject to general principles of equity, regardless
of whether considered in a proceeding in equity or at law.



SECTION 3.03 Governmental Approvals; No Conflicts. The Transactions (a) do not
require any consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as have been obtained or made and are in full force and effect,
(b) will not violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, except to the extent that any such violation could not reasonably be
expected to result in a Material Adverse Effect, (c) will not violate or result in a default under
any indenture, agreement or other instrument binding upon the Borrower or any of its Subsidiaries
or its assets, or give rise to a right thereunder to require any payment to be made by the Borrower
or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on
any asset of the Borrower or any of its Subsidiaries (other than the Liens granted by Borrower or
any of its Subsidiaries to Administrative Agent under the Loan Documents).



SECTION 3.04 Financial Condition; No Material Adverse Change. (a) The Borrower has
heretofore furnished to the Lenders its consolidated balance sheet and statements of income,
stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2010,
reported on by BDO Seidman, LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended March 31, 2011, certified by its chief financial
officer. Such financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Borrower and its consolidated Subsidiaries
as of such dates and for such periods in accordance with GAAP, subject to year-end audit
adjustments and the absence of footnotes in the case of the statements referred to in clause (ii)
above.



(b) Since September 30, 2010, there has been no material adverse change in the business,
assets, operations or condition, financial or otherwise, of the Borrower and its Subsidiaries,
taken as a whole.



SECTION 3.05 Properties. (a) Each of the Borrower and its Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property material to its
business, except for minor defects in title that do not interfere with its ability to conduct its
business as currently conducted or to utilize such properties for their intended purposes.



(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its business, and the
use thereof by the Borrower and its Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.



SECTION 3.06 Litigation and Environmental Matters. (a) There are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any of its Subsidiaries
(i) as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve this Agreement or
the Transactions.


 


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(b) Except for the Disclosed Matters and except with respect to any other matters that,
individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any Environmental Liability,
(iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of
any basis for any Environmental Liability.



(c) Since the date of this Agreement, there has been no change in the status of the Disclosed
Matters that, individually or in the aggregate, has resulted in, or materially increased the
likelihood of, a Material Adverse Effect.



SECTION 3.07 Compliance with Laws and Agreements. Each of the Borrower and its
Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all indentures, agreements and other instruments binding upon
it or its property, except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.



SECTION 3.08 Investment Company Status. Neither the Borrower nor any of its
Subsidiaries is an “investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940.



SECTION 3.09 Taxes. Each of the Borrower and its Subsidiaries has timely filed or
caused to be filed all Tax returns and reports required to have been filed and has paid or caused
to be paid all Taxes required to have been paid by it, except Taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower or such Subsidiary, as applicable,
has set aside on its books adequate reserves.



SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably expected to occur.
The present value of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the date of
the most recent financial statements reflecting such amounts, exceed by more than $250,000 the fair
market value of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $250,000 the fair market value of the
assets of all such underfunded Plans.



SECTION 3.11 Disclosure. The Borrower has disclosed to the Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject,
and all other matters known to it, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any material misstatement of
fact or omits to state any material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided that, with respect
to projected financial information, the Borrower represents only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time.


 


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ARTICLE IV




Conditions




SECTION 4.01 Effective Date. The obligations of the Lenders to make Loans and of the
Issuing Bank to issue Letters of Credit hereunder shall not become effective until the date on
which each of the following conditions is satisfied (or waived in accordance with Section 9.02):



(a) Credit Agreement and Loan Documents. The Administrative Agent (or its counsel)
shall have received (i) from each party hereto either (A) a counterpart of this Agreement signed on
behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may
include facsimile or electronic transmission of a signed signature page of this Agreement) that
such party has signed a counterpart of this Agreement. and (ii) duly executed copies of the Loan
Documents and such other certificates, documents, instruments and agreements as the Administrative
Agent shall reasonably request in connection with the transactions contemplated by this Agreement
and the other Loan Documents.



(b) Legal Opinion. The Administrative Agent shall have received favorable written
opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of
(i) Stubbs, Alderton & Markiles, LLP, counsel for the Borrower, substantially in the form of
Exhibit B-1, and (ii) Borrower’s in-house counsel, substantially in the form of Exhibit B-2, and
covering such other matters relating to the Borrower, this Agreement or the Transactions as the
Required Lenders shall reasonably request. The Borrower hereby requests such counsel to deliver
such opinion.



(c) Financial Statements and Projections. The Lenders shall have received (i) audited
consolidated financial statements of the Borrower and its Subsidiaries for the 2008 and 2009 fiscal
years, and (ii) unaudited interim consolidated financial statements of the Borrower and its
Subsidiaries for each fiscal month and quarter ended after the date of the latest applicable
financial statements delivered pursuant to clause (i) of this paragraph as to which such financial
statements are available, and such financial statements shall not, in the reasonable judgment of
the Administrative Agent, reflect any material adverse change in the consolidated financial
condition of the Borrower and its Subsidiaries, as reflected in the financial statements or
projections delivered to the Administrative Agent.



(d) Closing Certificates; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each Loan
Party, dated the Effective Date and executed by its Secretary or Assistant Secretary, which shall
(A) certify the resolutions of its Board of Directors, members or other body authorizing the
execution, delivery and performance of the Loan Documents to which it is a party, (B) identify by
name and title and bear the signatures of the Financial Officers and any other officers of such
Loan Party authorized to sign the Loan Documents to which it is a party, and (C) contain
appropriate attachments, including the certificate or articles of incorporation or organization of
each Loan Party certified by the relevant authority of the jurisdiction of organization of such
Loan Party and a true and correct copy of its by-laws or operating, management or partnership
agreement, and (ii) a good standing certificate for each Loan Party from its jurisdiction of
organization.



(e) Other Documents and Certificates. The Administrative Agent shall have received
such documents and certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower, the authorization of the
Transactions and any other legal matters relating to the Borrower, this Agreement or the
Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel.


 


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(f) No Default Certificate. The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a Vice President or a Financial
Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (a) and
(b) of Section 4.02.



(g) Lien Searches. The Administrative Agent shall have received the results of a
recent lien search in each of the jurisdictions where assets of the Loan Parties are located, and
such search shall reveal no liens on any of the assets of the Loan Parties except for liens
permitted by Section 6.02 or discharged on or prior to the Effective Date pursuant to a pay-off
letter or other documentation satisfactory to the Administrative Agent.



(h) Pay-Off Letter. The Administrative Agent shall have received satisfactory pay-off
letters executed and delivered by California Bank & Trust confirming that all Liens upon any of the
property of the Loan Parties constituting Collateral will be terminated on the Effective Date.



(i) Funding Account. The Administrative Agent shall have received a notice setting
forth the deposit account of the Borrower (the “Funding Account”) to which the
Administrative Agent is authorized by the Borrower to transfer the proceeds of any Borrowings
requested or authorized pursuant to this Agreement.



(j) Solvency. The Administrative Agent shall have received a solvency certificate
from a Financial Officer of the Borrower certifying as to the solvency of the Loan Parties, taken
as a whole, on a consolidated basis immediately after giving effect to the initial extensions of
credit under this Agreement and the payment of all fees and expenses required to be paid by the
Borrower on the Effective Date under this Agreement or the other Loan Documents.



(k) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall have
received (i) the certificates representing the shares of capital stock pledged pursuant to the
Security Agreement, together with an undated stock power for each such certificate executed in
blank by a duly authorized officer of the pledgor thereof and (ii) each promissory note (if any)
pledged to the Administrative Agent pursuant to the Security Agreement endorsed (without recourse)
in blank (or accompanied by an executed transfer form in blank) by the pledgor thereof.



(l) Filings, Registrations and Recordings. Each document (including any Uniform
Commercial Code financing statement) required by the Loan Documents or under law or reasonably
requested by the Administrative Agent to be filed, registered or recorded in order to create in
favor of the Administrative Agent, for the benefit of the Lenders, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person (other than with
respect to Liens expressly permitted by Section 6.02), shall be in proper form for filing,
registration or recordation.



(m) Insurance. The Administrative Agent shall have received evidence of insurance
coverage in form, scope, and substance reasonably satisfactory to the Administrative Agent and
otherwise in compliance with the terms of the Security Agreement.



(n) Tax Withholding. The Administrative Agent shall have received a properly
completed and signed IRS Form W-8 or W-9, as applicable, for each Loan Party.



(o) Fees. The Administrative Agent shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or
payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower hereunder.


 


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(p) Other Documents. The Administrative Agent shall have received such other
documents as the Administrative Agent, the Issuing Bank, any Lender or their respective counsel may
have reasonably requested.



The Administrative Agent shall notify the Borrower and the Lenders of the Effective Date, and such
notice shall be conclusive and binding. Notwithstanding the foregoing, the obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived pursuant to Section 9.02)
at or prior to 3:00 p.m., Los Angeles time, on July 27, 2011 (and, in the event such conditions are
not so satisfied or waived, the Commitments shall terminate at such time).



SECTION 4.02 Each Credit Event. The obligation of each Lender to make a Loan on the
occasion of any Borrowing, and of the Issuing Bank to issue, amend, renew or extend any Letter of
Credit, is subject to the satisfaction of the following conditions:



(a) The representations and warranties of the Borrower set forth in this Agreement shall be
true and correct on and as of the date of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable.



(b) At the time of and immediately after giving effect to such Borrowing or the issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have
occurred and be continuing.



Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be
deemed to constitute a representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (a) and (b) of this Section.



ARTICLE V




Affirmative Covenants




Until the Commitments have expired or been terminated and the principal of and interest on
each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Borrower
covenants and agrees with the Lenders that:



SECTION 5.01 Financial Statements; Ratings Change and Other Information. The Borrower
will furnish to the Administrative Agent and each Lender:



(a) within 120 days after the end of each fiscal year of the Borrower, its audited
consolidated balance sheet and related statements of operations, stockholders’ equity and cash
flows as of the end of and for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, all reported on by BDO Seidman, LLP or other independent
public accountants of recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Borrower and its consolidated Subsidiaries on
a consolidated basis in accordance with GAAP consistently applied;


 


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(b) within 60 days after the end of each of the first three fiscal quarters of each fiscal
year of the Borrower, its consolidated balance sheet and related statements of operations,
stockholders’ equity and cash flows as of the end of and for such fiscal quarter and the then
elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for
the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes;



(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a
certificate of a Financial Officer of the Borrower (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any action taken or
proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.15 and 6.16, and (iii) stating whether any change in GAAP
or in the application thereof has occurred since the date of the audited financial statements
referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate;



(d) promptly after the same become publicly available, copies of all periodic and other
reports, proxy statements and other materials filed by the Borrower or any Subsidiary with the
Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be; and



(e) promptly following any request therefor, such other information regarding the operations,
business affairs and financial condition of the Borrower or any Subsidiary, or compliance with the
terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.



SECTION 5.02 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:



(a) the occurrence of any Default;



(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator
or Governmental Authority against or affecting the Borrower or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a Material Adverse Effect;



(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Borrower and its
Subsidiaries in an aggregate amount exceeding $250,000; and



(d) any other development that results in, or could reasonably be expected to result in, a
Material Adverse Effect.



Each notice delivered under this Section shall be accompanied by a statement of a Financial
Officer or other executive officer of the Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken with respect
thereto.



SECTION 5.03 Existence; Conduct of Business. The Borrower will, and will cause each
of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in
full force and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; provided that the foregoing shall not
prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.


 


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SECTION 5.04 Payment of Obligations. The Borrower will, and will cause each of its
Subsidiaries to, pay its obligations, including Tax liabilities, before the same shall become
delinquent or in default, except where (a) (i) the validity or amount thereof is being contested in
good faith by appropriate proceedings, and (ii) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP or (b) (i) the amount
thereof does not exceed $50,000 in the aggregate, and (ii) such obligations, including Tax
liabilities, are paid within 30 days after the date when Borrower obtains notice or knowledge that
such obligations, including Tax liabilities, were not paid when due.



SECTION 5.05 Maintenance of Properties; Insurance. The Borrower will, and will cause
each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted, and (b) maintain,
with financially sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or similar businesses
operating in the same or similar locations.



SECTION 5.06 Books and Records; Inspection Rights. The Borrower will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which full, true and
correct entries are made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to, permit any
representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice,
to visit and inspect its properties, to examine and make extracts from its books and records, and
to discuss its affairs, finances and condition with its officers and independent accountants, all
at such reasonable times and as often as reasonably requested.



SECTION 5.07 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations and orders of any Governmental Authority
applicable to it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse Effect.



SECTION 5.08 Use of Proceeds and Letters of Credit. The proceeds of the Loans will be
used only to finance the working capital and general corporate purposes of the Borrower and to pay
fees and expenses associated with the Transactions. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X. Letters of Credit will be issued only
to support the working capital and general corporate purposes of the Borrower.



SECTION 5.09 Casualty and Condemnation. The Borrower (a) will furnish to the
Administrative Agent and the Lenders prompt written notice of any casualty or other insured damage
to any material portion of the Collateral or the commencement of any action or proceeding for the
taking of any material portion of the Collateral or interest therein under power of eminent domain
or by condemnation or similar proceeding and (b) will ensure that the Net Proceeds of any such
event (whether in the form of insurance proceeds, condemnation awards or otherwise) are collected
and applied in accordance with the applicable provisions of this Agreement and the Loan Documents.



SECTION 5.10 Depository Banks. The Borrower and each Subsidiary will maintain JPM as
its principal depository bank with respect to locations of the Borrower and any Subsidiary in
either (a) a state within the United States of America, or the District of Columbia, and (b) other
locations, to the extent that JPM has offices or branches located within a reasonable distance of
such location, in each case, including for the maintenance of operating, administrative, cash
management, collection activity, and other deposit accounts for the conduct of its business.


 


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SECTION 5.11 Additional Collateral; Further Assurances.



(a) Subject to applicable law, the Borrower and each Subsidiary that is a Loan Party shall
cause each of its domestic Subsidiaries formed or acquired after the date of this Agreement in
accordance with the terms of this Agreement to become a Loan Party by executing the Joinder
Agreement set forth as Exhibit C hereto (the “Joinder Agreement”) within thirty
(30) days after that date when any such domestic Subsidiary is acquired or formed. Upon execution
and delivery thereof, each such Person (i) shall automatically become a Guarantor hereunder and
thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under
the Loan Documents and (ii) will grant Liens to the Administrative Agent, for the benefit of the
Administrative Agent and the Lenders, in any property of such Loan Party which constitutes
Collateral, including any parcel of real property located in the U.S. owned by any Loan Party.



(b) The Borrower and each Subsidiary that is a Loan Party will cause (i) 100% of the issued
and outstanding Equity Interests of each of its domestic Subsidiaries and (ii) 65% of the issued
and outstanding Equity Interests entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Equity Interests not entitled to vote (within
the meaning of Treas. Reg. Section 1.956-2(c)(2) in each foreign Subsidiary directly owned by the
Borrower or any domestic Subsidiary to be subject at all times (or in the case of Equity Interests
that are acquired after the date hereof, within thirty (30) days after the date of such acquisition
and at all times thereafter) to a first priority, perfected Lien in favor of the Administrative
Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the
Administrative Agent shall reasonably request.



(c) Without limiting the foregoing, each Loan Party will, and will cause each Subsidiary to,
execute and deliver, or cause to be executed and delivered, to the Administrative Agent such
documents, agreements and instruments, and will take or cause to be taken such further actions
(including the filing and recording of financing statements, fixture filings, mortgages, deeds of
trust and other documents and such other actions or deliveries of the type required by Section
4.01, as applicable), which may be required by law or which the Administrative Agent may, from time
to time, reasonably request to carry out the terms and conditions of this Agreement and the other
Loan Documents and to ensure perfection and priority of the Liens created or intended to be created
by the Loan Documents, all at the expense of the Loan Parties.



(d) If any material assets (including any real property or improvements thereto or any
interest therein) are acquired by the Borrower or any Subsidiary that is a Loan Party after the
Effective Date (other than assets constituting Collateral under the Security Agreements that become
subject to the Lien in favor of the Administrative Agent upon acquisition thereof), the Borrower
will notify the Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such assets to be subjected
to a Lien securing the Indebtedness evidenced by this Agreement and the other Loan Documents and
will take, and cause the Subsidiary Loan Parties to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (c) of this Section, all at the expense of the Loan Parties.



(e) Upon request by Administrative Agent, the Borrower will deliver to the Administrative
Agent control agreements with respect to all deposit accounts and securities accounts of the
Borrower and its Subsidiaries (other than any deposit accounts and securities accounts that
Administrative Agent may exclude in its sole discretion), in each case, in form, scope, and
substance reasonably satisfactory the Administrative Agent, which have been duly executed and
delivered by each party thereto.


 


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SECTION 5.12 Post-Closing Covenants.



(a) Within 30 days after the Effective Date, the Borrower will furnish to the Administrative
Agent certificates of insurance, together with the endorsements thereto, as are required by Section
5.05 of this Agreement and paragraph 5 in the section titled “Representations, Warranties and
Covenants” of each Security Agreement, in form, scope, and substance reasonably satisfactory the
Administrative Agent.



(b) Within 180 days after the Effective Date, the Borrower shall have caused each of the
Excluded Subsidiaries to have been dissolved and provided Administrative Agent with such evidence
thereof as Administrative Agent may reasonably require.



(c) Within 60 days after the Effective Date, the Borrower will furnish to the Administrative
Agent the certificates representing the shares of capital stock of each foreign Subsidiary pledged
pursuant to the Security Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledge thereof, in form satisfactory to
Administrative Agent.



ARTICLE VI




Negative Covenants




Until the Commitments have expired or terminated and the principal of and interest on each
Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired
or terminated and all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:



SECTION 6.01 Indebtedness. The Borrower will not, and will not permit any Subsidiary
to, create, incur, assume or permit to exist any Indebtedness, except:



(a) Indebtedness created hereunder;



(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01, but not any
extensions, renewals or replacements of any such Indebtedness;



(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to the Borrower or
any other Subsidiary;



(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any Subsidiary of
Indebtedness of the Borrower or any other Subsidiary;



(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the acquisition,
construction or improvement of any fixed or capital assets, including Capital Lease Obligations and
any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien
on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount thereof;
provided that (i) such Indebtedness is incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement and (ii) the aggregate principal
amount of Indebtedness permitted by this clause (e) shall not exceed $1,000,000 at any time
outstanding;


 


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(f) Indebtedness of any Person that becomes a Subsidiary after the date hereof;
provided that (i) such Indebtedness exists at the time such Person becomes a Subsidiary and
is not created in contemplation of or in connection with such Person becoming a Subsidiary and (ii)
the aggregate principal amount of Indebtedness permitted by this clause (h) shall not exceed
$250,000 at any time outstanding; and



(g) other unsecured Indebtedness in an aggregate principal amount not exceeding $1,000,000 at
any time outstanding.



SECTION 6.02 Liens. The Borrower will not, and will not permit any Subsidiary to,
create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter
acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:



(a) Permitted Encumbrances;



(b) any Lien on any property or asset of the Borrower or any Subsidiary existing on the date
hereof and set forth in Schedule 6.02; provided that (i) such Lien shall not apply to any other
property or asset of the Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof;



(c) any Lien existing on any property or asset prior to the acquisition thereof by the
Borrower or any Subsidiary or existing on any property or asset of any Person that becomes a
Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that
(i) such Lien is not created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as the case may be; and



(d) Liens on fixed or capital assets acquired, constructed or improved by the Borrower or any
Subsidiary; provided that (i) such security interests secure Indebtedness permitted by clause (e)
of Section 6.01, (ii) such security interests and the Indebtedness secured thereby are incurred
prior to or within 90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv) such security interests shall not
apply to any other property or assets of the Borrower or any Subsidiary.



SECTION 6.03 Fundamental Changes. (a) The Borrower will not, and will not permit any
Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction
or in a series of transactions) all or any substantial part of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after
giving effect thereto no Default shall have occurred and be continuing (i) any Subsidiary may merge
into the Borrower in a transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving entity is a
Subsidiary, (iii) any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to
the Borrower or to another Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in the best interests of
the Borrower and is not materially disadvantageous to the Lenders; provided that any such
merger involving a Person that is not a wholly owned Subsidiary immediately prior to such merger
shall not be permitted unless also permitted by Section 6.04.


 


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(b) The Borrower will not, and will not permit any of its Subsidiaries to, engage to any
material extent in any business other than businesses of the type conducted by the Borrower and its
Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.



SECTION 6.04 Investments, Loans, Advances, Guarantees and Acquisitions. The Borrower
will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including
pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger)
any capital stock, evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to,
Guarantee any obligations of, or make or permit to exist any investment or any other interest in,
any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:



(a) Permitted Investments;



(b) Permitted Acquisitions;



(c) investments by the Borrower existing on the date hereof in the capital stock of its
Subsidiaries;



(d) loans or advances made by the Borrower to any Subsidiary and made by any Subsidiary to
the Borrower or any other Subsidiary;



(e) Guarantees constituting Indebtedness permitted by Section 6.01;



(f) investments of any Person existing at the time such Person becomes a Subsidiary of the
Borrower or consolidates or merges with the Borrower or any of the Subsidiaries (including in
connection with a permitted acquisition) so long as such investments were not made in contemplation
of such Person becoming a Subsidiary or of such merger; and



(g) investments constituting deposits described in clauses (c) and (d) of the definition of
the term “Permitted Encumbrances”;



SECTION 6.05 Swap Agreements. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or
mitigate risks to which the Borrower or any Subsidiary has actual exposure (other than those in
respect of Equity Interests of the Borrower or any Subsidiary), and (b) Swap Agreements entered
into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates,
from one floating rate to another floating rate or otherwise) with respect to any interest-bearing
liability or investment of the Borrower or any Subsidiary.



SECTION 6.06 Restricted Payments. The Borrower will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment, except (a) the Borrower may declare and pay dividends with respect to its
Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may
declare and pay dividends ratably with respect to their Equity Interests, (c) the Borrower may make
Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans
for management or employees of the Borrower and its Subsidiaries and (d) the Borrower may
repurchase its outstanding common Equity Interests in an amount not to exceed $5,000,000 in the
aggregate in any fiscal year.


 


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SECTION 6.07 Transactions with Affiliates. The Borrower will not, and will not permit
any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm’s-length basis from unrelated third parties, (b) transactions between or among
the Borrower and its wholly owned Subsidiaries not involving any other Affiliate and (c) any
Restricted Payment permitted by Section 6.06.



SECTION 6.08 Restrictive Agreements. The Borrower will not, and will not permit any
of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement
or other arrangement that prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or
assets, or (b) the ability of any Subsidiary to pay dividends or other distributions with respect
to any shares of its capital stock or to make or repay loans or advances to the Borrower or any
other Subsidiary or to Guarantee Indebtedness of the Borrower or any other Subsidiary;
provided that (i) the foregoing shall not apply to restrictions and conditions imposed by
law or by this Agreement, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such restriction or
condition), (iii) the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided such restrictions
and conditions apply only to the Subsidiary that is to be sold and such sale is permitted
hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed
by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions
or conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of
the foregoing shall not apply to customary provisions in leases and other contracts restricting the
assignment thereof.



SECTION 6.09 Government Regulation. Borrower shall not (a) be or become subject at
any time to any law, regulation, or list of any government agency (including, without limitation,
the U.S. Office of Foreign Asset Control list) that prohibits or limits any Lender from making any
advance or extension of credit to Borrower or from otherwise conducting business with Borrower, or
(b) fail to provide documentary and other evidence of Borrower’s identity as may be requested by
any Lender at any time to enable such Lender to verify Borrower’s identity or to comply with any
applicable law or regulation, including, without limitation, Section 326 of the USA Patriot Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), 31 U.S.C.
Section 5318.



SECTION 6.10 Asset Sales. The Borrower will not, and will not permit any of its
Subsidiaries to, sell, transfer, lease or otherwise dispose of any asset, including any Equity
Interest owned by it, nor will the Borrower permit any Subsidiary to issue any additional Equity
Interest in such Subsidiary (other than to the Borrower or another Subsidiary in compliance with
Section 6.04), except:



(a) sales, transfers and dispositions of (i) inventory in the ordinary course of business and
(ii) used, obsolete, worn out or surplus equipment or property in the ordinary course of business;



(b) sales, transfers and dispositions to the Borrower or any Subsidiary, provided
that any such sales, transfers or dispositions involving a Subsidiary that is not a Loan Party
shall be made in compliance with Section 6.07;


 


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(c) sales, transfers and dispositions of accounts receivable in connection with the
compromise, settlement or collection thereof;



(d) sales, transfers and dispositions of Permitted Investments and other investments
permitted by clauses (i) and (k) of Section 6.04;



(e) sale and leaseback transactions permitted by Section 6.11;



(f) dispositions resulting from any casualty or other insured damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of, any property or asset of the
Borrower or any Subsidiary; and



(g) sales, transfers and other dispositions of assets (other than Equity Interests in a
Subsidiary unless all Equity Interests in such Subsidiary are sold) that are not permitted by any
other paragraph of this Section, provided that the aggregate fair market value of all
assets sold, transferred or otherwise disposed of in reliance upon this paragraph (g) shall not
exceed $500,000 during any fiscal year of the Borrower;



provided that all sales, transfers, leases and other dispositions permitted hereby (other
than those permitted by paragraphs (b) and (f) above) shall be made for fair value and for at least
75% cash consideration.



SECTION 6.11 Sale and Leaseback Transactions. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any arrangement, directly or indirectly, whereby it
shall sell or transfer any property, real or personal, used or useful in its business, whether now
owned or hereafter acquired, and thereafter rent or lease such property or other property that it
intends to use for substantially the same purpose or purposes as the property sold or transferred,
except for any such sale of any fixed or capital assets by the Borrower or any Subsidiary that is
made for cash consideration in an amount not less than the fair value of such fixed or capital
asset and is consummated within 90 days after the Borrower or such Subsidiary acquires or completes
the construction of such fixed or capital asset.



SECTION 6.12 Amendment of Material Documents. Borrower will not, and will not permit
any of its Subsidiaries to, amend, modify or waive any of its rights under (a) agreement relating
to any Subordinated Indebtedness, or (b) its certificate of incorporation, by-laws, operating,
management or partnership agreement or other organizational documents, unless Administrative Agent
has consented to such amendment, modification or waiver with respect to its certificate of
incorporation, by-laws, operating, management or partnership agreement or other organizational
documents.



SECTION 6.13 Change of Auditors. Borrower will not, and will not permit any of its
Subsidiaries to, without the consent of Administrative Agent, change their independent auditor from
the independent auditor maintained by Borrower and its Subsidiaries on the Effective Date.



SECTION 6.14 Capital Expenditures. The Borrower will not, nor will it permit any
Subsidiary to, incur or make any Capital Expenditures during any fiscal year in an amount exceeding
$10,000,000.



SECTION 6.15 Financial Covenant — Minimum EBITDA. The Borrower shall have, at
the end of each fiscal quarter for each of Borrower’s fiscal years, (i) EBITDA for the 12-month
period then ended less (ii) any Restricted Payments declared or made by Borrower during
such 12-month period of not less than (x) with respect to the fiscal quarter ending September 30,
2011, $8,000,000, and (y) with respect to the fiscal quarter ending December 31, 2011 and each
fiscal quarter ending thereafter, $10,000,000.


 


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ARTICLE VII




Events of Default




If any of the following events (“Events of Default”) shall occur:



(a) the Borrower shall fail to pay any principal of any Loan or any reimbursement obligation
in respect of any LC Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;



(b) the Borrower shall fail to pay any interest on any Loan or any fee or any other amount
(other than an amount referred to in clause (a) of this Article) payable under this Agreement, when
and as the same shall become due and payable and such failure continues for a period of 3 Business
Days;



(c) any representation or warranty made or deemed made by or on behalf of the Borrower or any
Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or
modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection with this Agreement or
any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or
thereunder, shall prove to have been incorrect in any material respect when made or deemed made;



(d) the Borrower shall fail to observe or perform any covenant, condition or agreement
contained in this Agreement or in any other Loan Document;



(e) the Borrower or any Subsidiary shall fail to make any payment (whether of principal or
interest and regardless of amount) in respect of any Indebtedness, (i) in the case of Material
Indebtedness, when and as the same shall become due and payable, after giving effect to any
applicable cure period, or (ii) in the case of other Indebtedness, within 90 days after the date
when and as the same shall become due and payable, after giving effect to any applicable cure
period;



(f) any event or condition occurs that results in any Indebtedness becoming due prior to its
scheduled maturity or that enables or permits (with or without the giving of notice, the lapse of
time or both) the holder or holders of any Indebtedness or any trustee or agent on its or their
behalf to cause any Indebtedness to become due, or to require the prepayment, repurchase,
redemption or defeasance thereof, prior to its scheduled maturity; provided that if such
event or condition relates to any Indebtedness that does not constitute Material Indebtedness, the
occurrence of such event or condition shall not constitute an Event of Default pursuant to this
clause (f) unless such event or condition is not waived or cured within 90 days after the
occurrence thereof; provided, further, that this clause (f) shall not apply to
secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;



(g) the occurrence or existence of any default, event of default or other similar event or
condition occurs with respect to any Rate Management Transactions;


 


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(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed
seeking (i) liquidation, reorganization or other relief in respect of the Borrower or any
Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for
the Borrower or any Subsidiary or for a substantial part of its assets, and, in any such case, such
proceeding or petition shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered;



(i) the Borrower or any Subsidiary shall (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for the Borrower or any
Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors or (vi) take any action for the purpose of effecting any of the
foregoing;



(j) the Borrower or any Subsidiary shall become unable, admit in writing its inability or fail
generally to pay its debts as they become due;



(k) the Borrower or any Subsidiary shall, without the Administrative Agent’s written consent:
(i) liquidate or become dissolved, (ii) other than with respect to a Permitted Acquisition, merge
or consolidate with any other Person; (iii) lease, sell or otherwise convey a material part of its
assets of business outside the ordinary course of its business, (iv) lease, purchase, or otherwise
acquire a material part of the assets of any other Person, except in the ordinary course of its
business, or (v) agree to do any of the foregoing; provided however that any
Subsidiary of Borrower may merge or consolidate with any other Subsidiary of Borrower, or with
Borrower so long as Borrower is the surviving corporation.



(l) a change shall have occurred relating to: (i) the Property, financial condition, business,
assets, affairs, liabilities, or operations of Borrower or any of its Subsidiaries, (ii) Borrower
or any Guarantor’s ability to perform its obligations under the Loan Documents, or (iii) the
Collateral, that could reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect;



(m) one or more judgments for the payment of money in excess of (i) $250,000 with respect to
any individual event or (ii) $500,000 in the aggregate shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for a period of
15 consecutive days during which execution shall not be effectively stayed, or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment;



(n) an ERISA Event shall have occurred that, in the opinion of the Required Lenders, when
taken together with all other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate amount exceeding (i)
$250,000 in any year or (ii) $250,000 for all periods;



(o) a Change in Control shall occur;



(p) any Guaranty shall fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of such Guaranty, or any Guarantor
shall fail to comply with any of the terms or provisions of the Guaranty to which it is a party, or
any Guarantor shall deny that it has any further liability under the Guaranty to which it is a
party, or shall give notice to such effect;


 


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(q) any Loan Document shall for any reason fail to create a valid and perfected first priority
security interest in any Collateral purported to be covered thereby, except as permitted by the
terms of any Loan Document, or any Loan Document shall fail to remain in full force or effect or
any action shall be taken to discontinue or to assert the invalidity or unenforceability of any
Loan Document, or any Loan Party shall fail to comply with any of the terms or provisions of any
Loan Document;



(r) any material provision of any Loan Document for any reason ceases to be valid, binding and
enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of
any Loan Document or shall assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms); or



(s) any Loan Party is criminally indicted or convicted under any law that may reasonably be
expected to lead to a forfeiture of any property of such Loan Party having a fair market value in
excess of $250,000;


then, and in every such event (other than an event with respect to the Borrower described in clause
(h) or (i) of this Article), and at any time thereafter during the continuance of such event, the
Administrative Agent may, and at the request of the Required Lenders shall, by notice to the
Borrower, take either or both of the following actions, at the same or different
times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately,
and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any event with respect to
the Borrower described in clause (g) or (h) of this Article, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.




ARTICLE VIII




The Administrative Agent




Each of the Lenders and the Issuing Bank hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its behalf and to
exercise such powers as are delegated to the Administrative Agent by the terms hereof, together
with such actions and powers as are reasonably incidental thereto.



The bank serving as the Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.


 


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The Administrative Agent shall not have any duties or obligations except those expressly set
forth herein. Without limiting the generality of the foregoing, (a) the Administrative Agent shall
not be subject to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby that the Administrative Agent is required to exercise in writing as
directed by the Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries
that is communicated to or obtained by the bank serving as Administrative Agent or any of its
Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or
not taken by it with the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or wilful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to the Administrative Agent by the Borrower or a Lender, and the
Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into
(i) any statement, warranty or representation made in or in connection with this Agreement,
(ii) the contents of any certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants, agreements or other terms or
conditions set forth herein, (iv) the validity, enforceability, effectiveness or genuineness of
this Agreement or any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items
expressly required to be delivered to the Administrative Agent.



The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any liability for relying
thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the
Borrower), independent accountants and other experts selected by it, and shall not be liable for
any action taken or not taken by it in accordance with the advice of any such counsel, accountants
or experts.



The Administrative Agent may perform any and all its duties and exercise its rights and powers
by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative
Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the preceding paragraphs
shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any
such sub-agent, and shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Administrative Agent.



Subject to the appointment and acceptance of a successor Administrative Agent as provided in
this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the
Issuing Bank and the Borrower. Upon any such resignation, the Required Lenders shall have the
right, in consultation with the Borrower, to appoint a successor. If no successor shall have been
so appointed by the Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative
Agent may, on behalf of the Lenders and the Issuing Bank, appoint a successor Administrative Agent
which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon
the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations hereunder. The fees payable by the Borrower to a successor Administrative
Agent shall be the same as those payable to its predecessor unless otherwise agreed between the
Borrower and such successor. After the Administrative Agent’s resignation hereunder, the
provisions of this Article and Section 9.03 shall continue in effect for the benefit of such
retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of
any actions taken or omitted to be taken by any of them while it was acting as Administrative
Agent.


 


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Each Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it shall from time to time
deem appropriate, continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder or thereunder.



ARTICLE IX




Miscellaneous




SECTION 9.01 Notices. (a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and
other communications provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by facsimile, as follows:




(i) if to the Borrower, to it at IRIS International, Inc., 9158 Eton Ave.,
Chatsworth, California, Attention of Chief Financial Officer, (Facsimile No. (818)
349-0622);




(ii) if to the Administrative Agent, to JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott (Facsimile
No. (213) 536-2019), with a copy to Paul, Hastings, Janofsky & Walker LLP, 515 South
Flower Street, 25th Floor, Los Angeles, CA 90071, Attention of Peter S. Burke, Esq.
(Facsimile No. (213) 996-3338);




(iii) if to the Issuing Bank, to it at JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott (Facsimile
No. (213) 536-2019);




(iv) if to the Swingline Lender, to it at JPMorgan Chase Bank, N.A., 300 South
Grand Avenue, Floor 4, Los Angeles, CA 90071, Attention of David Scott (Facsimile
No. (213) 536-2019); and




(v) if to any other Lender, to it at its address (or facsimile number) set
forth in its Administrative Questionnaire.



(b) Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.



(c) Any party hereto may change its address or facsimile number for notices and other
communications hereunder by notice to the other parties hereto. All notices and other
communications given to any party hereto in accordance with the provisions of this Agreement shall
be deemed to have been given on the date of receipt.


 


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SECTION 9.02 Waivers; Amendments. (a) No failure or delay by the Administrative
Agent, the Issuing Bank or any Lender in exercising any right or power hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent, the Issuing Bank and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrower therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver
or consent shall be effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative
Agent, any Lender or the Issuing Bank may have had notice or knowledge of such Default at the time.



(b) Neither this Agreement nor any provision hereof may be waived, amended or modified except
pursuant to an agreement or agreements in writing entered into by the Borrower and the Required
Lenders or by the Borrower and the Administrative Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement
or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of payment of the
principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled
date of expiration of any Commitment, without the written consent of each Lender affected thereby,
(iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, or (v) change any of the provisions
of this Section or the definition of “Required Lenders” or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make
any determination or grant any consent hereunder, without the written consent of each Lender;
provided further that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent, the Issuing Bank or the Swingline Lender hereunder
without the prior written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be; provided further that no such agreement shall amend,
modify, or eliminate Section 2.20 without the prior written consent of the Administrative Agent,
the Swing Line Lender, the Issuing Bank, and the Required Lenders.



SECTION 9.03 Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay (i) all
reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
including the reasonable fees, charges and disbursements of counsel for the Administrative Agent,
in connection with the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers of the provisions
hereof (whether or not the transactions contemplated hereby or thereby shall be consummated) to the
extent that such expenses exceed $10,000 (it being understood and agreed that (y) the
Administrative Agent shall be responsible for the first $10,000 of such expenses and (z) the
Borrower shall be responsible for any and all expenses that exceed $10,000), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the issuance, amendment,
renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all
out-of-pocket expenses incurred by the Administrative Agent, the Issuing Bank or any Lender,
including the fees, charges and disbursements of any counsel for the Administrative Agent, the
Issuing Bank or any Lender, in connection with the enforcement or protection of its rights in
connection with this Agreement, including its rights under this Section, or in connection with the
Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses
incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of
Credit.


 


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(b) The Borrower shall indemnify the Administrative Agent, the Issuing Bank and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being called an
“Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the execution or delivery of this Agreement or any agreement
or instrument contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply with the terms of
such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on
or from any property owned or operated by the Borrower or any of its Subsidiaries, or any
Environmental Liability related in any way to the Borrower or any of its Subsidiaries, or (iv) any
actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted from the gross negligence or wilful misconduct of such Indemnitee.



(c) To the extent that the Borrower fails to pay any amount required to be paid by it to the
Administrative Agent, the Issuing Bank or the Swingline Lender under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to the Administrative Agent, the Issuing Bank or the
Swingline Lender, as the case may be, such Lender’s Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted against the
Administrative Agent, the Issuing Bank or the Swingline Lender in its capacity as such.



(d) To the extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for special, exemplary,
indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out
of, in connection with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds
thereof.



(e) All amounts due under this Section shall be payable promptly/not later than 30 days after
written demand therefor.



SECTION 9.04 Successors and Assigns. (a) The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that issues any Letter of
Credit), except that (i) the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any attempted
assignment or transfer by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder except in accordance
with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and assigns permitted
hereby (including any Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent, the Issuing Bank and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this Agreement.


 


51









 





(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to it) with the prior
written consent (such consent not to be unreasonably withheld) of:




(A) the Borrower, provided that no consent of the Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund
or, if an Event of Default has occurred and is continuing, any other assignee; and




(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for an assignment of any Commitment to an
assignee that is a Lender with a Commitment immediately prior to giving effect to
such assignment to a Lender, an Affiliate of a Lender or an Approved Fund; and




(C) the Issuing Bank.




(ii) Assignments shall be subject to the following additional conditions:




(A) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender’s Commitment
or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the Administrative Agent)
shall not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that no such consent of the Borrower shall
be required if an Event of Default has occurred and is continuing;




(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement,
provided that this clause shall not be construed to prohibit the assignment
of a proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans; 




(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing and
recordation fee of $3,500; and




(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in which the assignee
designates one or more Credit Contacts to whom all syndicate-level information
(which may contain material non-public information about the Borrower, the Loan
Parties and their related parties or their respective securities) will be made
available and who may receive such information in accordance with the assignee’s
compliance procedures and applicable laws, including Federal and state securities
laws.


 


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For the purposes of this Section 9.04(b), the term “Approved Fund” has the following
meaning:



“Approved Fund” means any Person (other than a natural person) that is engaged in
making, purchasing, holding or investing in bank loans and similar extensions of credit in the
ordinary course of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a
Lender.




(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv)
of this Section, from and after the effective date specified in each Assignment and
Assumption the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Assumption, have the rights and obligations
of a Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender’s rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 9.04 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in accordance
with paragraph (c) of this Section.




(iv) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the Loans
and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to
time (the “Register”). The entries in the Register shall be conclusive, and
the Borrower, the Administrative Agent, the Issuing Bank and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower, the
Issuing Bank and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.




(v) Upon its receipt of a duly completed Assignment and Assumption executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and any
written consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Assumption and record the
information contained therein in the Register; provided that if either the
assigning Lender or the assignee shall have failed to make any payment required to
be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or
9.03(c), the Administrative Agent shall have no obligation to accept such Assignment
and Assumption and record the information therein in the Register unless and until
such payment shall have been made in full, together with all accrued interest
thereon. No assignment shall be effective for purposes of this Agreement unless it
has been recorded in the Register as provided in this paragraph.


 


53









 





(c) (i) Any Lender may, without the consent of the Borrower, the Administrative Agent, the
Issuing Bank or the Swingline Lender, sell participations to one or more banks or other entities (a
“Participant”) in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender’s obligations under this Agreement shall remain unchanged,
(B) such Lender shall remain solely responsible to the other parties hereto for the performance of
such obligations and (C) the Borrower, the Administrative Agent, the Issuing Bank and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Agreement. Any agreement or instrument pursuant to
which a Lender sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or waiver of any
provision of this Agreement; provided that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver described in the first proviso to Section 9.02(b) that affects such Participant. Subject
to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though
it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it
were a Lender.




(ii) A Participant shall not be entitled to receive any greater payment under
Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of the
participation to such Participant is made with the Borrower’s prior written consent.
A Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.17 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the benefit
of the Borrower, to comply with Section 2.17(e) as though it were a Lender.



(d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including without limitation
any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release a Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.



SECTION 9.05 Survival. All covenants, agreements, representations and warranties made
by the Borrower herein and in the certificates or other instruments delivered in connection with
or pursuant to this Agreement shall be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Administrative Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect as long as the
principal of or any accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the
Commitments have not expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 9.03
and Article VIII shall survive and remain in full force and effect regardless of the consummation
of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this Agreement or any provision
hereof.



SECTION 9.06 Counterparts; Integration; Effectiveness. This Agreement may be executed
in counterparts (and by different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a single contract.
This Agreement and any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating to the subject
matter hereof and supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall
become effective when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns. Delivery of an
executed counterpart of a signature page of this Agreement by facsimile shall be effective as
delivery of a manually executed counterpart of this Agreement.


 


54









 





SECTION 9.07 Severability. Any provision of this Agreement held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such invalidity, illegality or unenforceability without affecting the validity, legality
and enforceability of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.



SECTION 9.08 Right of Setoff. If an Event of Default shall have occurred and be
continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general
or special, time or demand, provisional or final) at any time held and other obligations at any
time owing by such Lender or Affiliate to or for the credit or the account of the Borrower against
any of and all the obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each Lender under this
Section are in addition to other rights and remedies (including other rights of setoff) which such
Lender may have.



SECTION 9.09 Governing Law; Jurisdiction; Consent to Service of Process. (a) This
Agreement shall be construed in accordance with and governed by the law of the State of California.



(b) The Borrower hereby irrevocably and unconditionally submits, for itself and its property,
to the nonexclusive jurisdiction of the Superior Court of the State of California sitting in Los
Angeles County and of the United States District Court of the Central District of California, and
any appellate court from any thereof, in any action or proceeding arising out of or relating to
this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such California State or, to the extent permitted by law,
in such Federal court. Each of the parties hereto agrees that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any
action or proceeding relating to this Agreement against the Borrower or its properties in the
courts of any jurisdiction.



(c) The Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Agreement in any court
referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.



(d) Each party to this Agreement irrevocably consents to service of process in the manner
provided for notices in Section 9.01. Nothing in this Agreement will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.


 


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SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS
IN THIS SECTION.



SECTION 9.11 Headings. Article and Section headings and the Table of Contents used
herein are for convenience of reference only, are not part of this Agreement and shall not affect
the construction of, or be taken into consideration in interpreting, this Agreement.



SECTION 9.12 Disclosure. The Borrower agrees that the Administrative Agent may
provide any information or knowledge the Administrative Agent may have about the Borrower or about
any matter relating to this Agreement or the other Loan Documents to JPMorgan Chase & Co., or any
of its subsidiaries or Affiliates or their respective successors and assigns, or to any one or more
assignees all or a portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it).



SECTION 9.13 Interest Rate Limitation. Notwithstanding anything herein to the
contrary, if at any time the interest rate applicable to any Loan, together with all fees, charges
and other amounts which are treated as interest on such Loan under applicable law (collectively the
“Charges”), shall exceed the maximum lawful rate (the “Maximum Rate”) which may be
contracted for, charged, taken, received or reserved by the Lender holding such Loan in accordance
with applicable law, the rate of interest payable in respect of such Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate and, to the extent
lawful, the interest and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be increased (but not
above the Maximum Rate therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received by such Lender.



SECTION 9.14 USA PATRIOT Act.



(a) Each Lender that is subject to the requirements of the Act hereby notifies the Borrower
that pursuant to the requirements of the Act, it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the Borrower in accordance
with the Act.



(b) The following notification is provided to Borrower pursuant to Section 326 of the Act, 31
U.S.C. Section 5318:


IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT. To help the government fight the
funding of terrorism and money laundering activities, federal law requires all financial
institutions to obtain, verify, and record information that identifies each person or entity that
opens an account, including any deposit account, treasury management account, loan, other extension
of credit, or other financial services product. What this means for Borrower: When Borrower opens
an account, if Borrower is an individual, each Lender will ask for Borrower’s name, taxpayer
identification number, residential address, date of birth, and other information that will allow
such Lender to identify Borrower, and if Borrower is not an individual, such Lender will ask for
Borrower’s name, taxpayer identification number, business address, and other information that will
allow such Lender to identify Borrower. Each Lender may also ask, if Borrower is an individual, to
see Borrower’s driver’s license or other identifying documents, and if Borrower is not an
individual, to see Borrower’s legal organizational documents or other identifying documents.




 


56









 







SECTION 9.15 JUDICIAL REFERENCE. IN THE EVENT ANY LEGAL PROCEEDING IS FILED IN A COURT OF THE
STATE OF CALIFORNIA (THE “COURT”) BY OR AGAINST THE BORROWER, THE ADMINISTRATIVE AGENT, OR ANY OF
THE LENDERS IN CONNECTION WITH ANY CONTROVERSY, DISPUTE OR CLAIM DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY) (EACH, A “CLAIM”) AND THE WAIVER SET FORTH IN SECTION
9.10 IS NOT ENFORCEABLE IN SUCH ACTION OR PROCEEDING, THE BORROWER, THE ADMINISTRATIVE AGENT,
AND EACH LENDER (BY THEIR ACCEPTANCE HEREOF) AGREE AS FOLLOWS:



(a) WITH THE EXCEPTION OF THE MATTERS SPECIFIED IN CLAUSE (B) BELOW, ANY CLAIM WILL BE
DETERMINED BY A GENERAL REFERENCE PROCEEDING IN ACCORDANCE WITH THE PROVISIONS OF CALIFORNIA CODE
OF CIVIL PROCEDURE SECTIONS 638 THROUGH 645.2. THE BORROWER, THE ADMINISTRATIVE AGENT, AND EACH
LENDER INTEND THIS GENERAL REFERENCE AGREEMENT TO BE SPECIFICALLY ENFORCEABLE IN ACCORDANCE WITH
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 638. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS, VENUE FOR THE REFERENCE PROCEEDING WILL BE IN THE STATE OR FEDERAL COURT
IN THE COUNTY OR DISTRICT WHERE VENUE IS OTHERWISE APPROPRIATE UNDER APPLICABLE LAW.



(b) THE FOLLOWING MATTERS SHALL NOT BE SUBJECT TO A GENERAL REFERENCE PROCEEDING: (A)
NON-JUDICIAL FORECLOSURE OF ANY SECURITY INTERESTS IN REAL OR PERSONAL PROPERTY; (B) EXERCISE OF
SELF-HELP REMEDIES (INCLUDING, WITHOUT LIMITATION, SET-OFF); (C) APPOINTMENT OF A RECEIVER; AND (D)
TEMPORARY, PROVISIONAL OR ANCILLARY REMEDIES (INCLUDING, WITHOUT LIMITATION, WRITS OF ATTACHMENT,
WRITS OF POSSESSION, TEMPORARY RESTRAINING ORDERS OR PRELIMINARY INJUNCTIONS). THIS AGREEMENT DOES
NOT LIMIT THE RIGHT OF THE BORROWER, THE ADMINISTRATIVE AGENT, OR ANY LENDER TO EXERCISE OR OPPOSE
ANY OF THE RIGHTS AND REMEDIES DESCRIBED IN CLAUSES (A) — (D) AND ANY SUCH EXERCISE OR OPPOSITION
DOES NOT WAIVE THE RIGHT OF THE BORROWER, THE ADMINISTRATIVE AGENT, OR SUCH LENDER TO A REFERENCE
PROCEEDING PURSUANT TO THIS AGREEMENT.



(c) UPON THE WRITTEN REQUEST OF THE BORROWER, THE ADMINISTRATIVE AGENT, OR ANY LENDER, THE
BORROWER, THE ADMINISTRATIVE AGENT, AND THE LENDERS SHALL SELECT A SINGLE REFEREE, WHO SHALL BE A
RETIRED JUDGE OR JUSTICE. IF THE BORROWER, THE ADMINISTRATIVE AGENT, AND THE LENDERS DO NOT AGREE
UPON A REFEREE WITHIN TEN (10) DAYS OF SUCH WRITTEN REQUEST, THEN, THE BORROWER, THE ADMINISTRATIVE
AGENT, OR ANY LENDER, MAY REQUEST THE COURT TO APPOINT A REFEREE PURSUANT TO CALIFORNIA CODE OF
CIVIL PROCEDURE SECTION 640(B).


 


57









 





(d) ALL PROCEEDINGS AND HEARINGS CONDUCTED BEFORE THE REFEREE, EXCEPT FOR TRIAL, SHALL BE
CONDUCTED WITHOUT A COURT REPORTER, EXCEPT WHEN THE BORROWER, THE ADMINISTRATIVE AGENT, OR ANY
LENDER SO REQUESTS, A COURT REPORTER WILL BE USED AND THE REFEREE WILL BE PROVIDED A COURTESY COPY
OF THE TRANSCRIPT. THE PARTY MAKING SUCH REQUEST SHALL HAVE THE OBLIGATION TO ARRANGE FOR AND PAY
COSTS OF THE COURT REPORTER, PROVIDED THAT SUCH COSTS, ALONG WITH THE REFEREE’S FEES, SHALL
ULTIMATELY BE BORNE BY THE PARTY WHO DOES NOT PREVAIL, AS DETERMINED BY THE REFEREE.



(e) THE REFEREE MAY REQUIRE ONE OR MORE PREHEARING CONFERENCES. THE BORROWER, THE
ADMINISTRATIVE AGENT, AND THE LENDERS SHALL BE ENTITLED TO DISCOVERY, AND THE REFEREE SHALL OVERSEE
DISCOVERY IN ACCORDANCE WITH THE RULES OF DISCOVERY, AND MAY ENFORCE ALL DISCOVERY ORDERS IN THE
SAME MANNER AS ANY TRIAL COURT JUDGE IN PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA. THE REFEREE
SHALL APPLY THE RULES OF EVIDENCE APPLICABLE TO PROCEEDINGS AT LAW IN THE STATE OF CALIFORNIA AND
SHALL DETERMINE ALL ISSUES IN ACCORDANCE WITH APPLICABLE STATE AND FEDERAL LAW. THE REFEREE SHALL
BE EMPOWERED TO ENTER EQUITABLE AS WELL AS LEGAL RELIEF AND RULE ON ANY MOTION WHICH WOULD BE
AUTHORIZED IN A TRIAL, INCLUDING, WITHOUT LIMITATION, MOTIONS FOR DEFAULT JUDGMENT OR SUMMARY
JUDGMENT. THE REFEREE SHALL REPORT THE REFEREE’S DECISION, WHICH REPORT SHALL ALSO INCLUDE FINDINGS
OF FACT AND CONCLUSIONS OF LAW.



(f) THE BORROWER, THE ADMINISTRATIVE AGENT, AND THE LENDERS RECOGNIZE AND AGREE THAT ALL
CLAIMS RESOLVED IN A GENERAL REFERENCE PROCEEDING PURSUANT HERETO WILL BE DECIDED BY A REFEREE AND
NOT BY A JURY.


 


58









 





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



	 	 	 	 	 
	 	IRIS INTERNATIONAL, INC., a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	JPMORGAN CHASE BANK, N.A., individually and as

Administrative Agent,

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



[SIGNATURE PAGE TO CREDIT AGREEMENT]





 


 









 







EXHIBIT A




ASSIGNMENT AND ASSUMPTION





This Assignment and Assumption (the “Assignment and Assumption”) is dated as of the
Effective Date set forth below and is entered into by and between [Insert name of Assignor] (the
“Assignor”) and [Insert name of Assignee] (the “Assignee”). Capitalized terms used
but not defined herein shall have the meanings given to them in the Credit Agreement identified
below (as amended, the “Credit Agreement”), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment
and Assumption as if set forth herein in full.



For an agreed consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the Assignor, subject to
and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (i) all of the Assignor’s
rights and obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and obligations of the
Assignor under the respective facilities identified below (including any letters of credit,
guarantees, and swingline loans included in such facilities) and (ii) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or unknown, arising under
or in connection with the Credit Agreement, any other documents or instruments delivered pursuant
thereto or the loan transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory claims and all
other claims at law or in equity related to the rights and obligations sold and assigned pursuant
to clause (i) above (the rights and obligations sold and assigned pursuant to clauses (i) and (ii)
above being referred to herein collectively as the “Assigned Interest”). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.




	 	 	 	 	 	 
	1.

	 	Assignor:
	 	 	 
	 
	 	 	 	 	 
	2.

	 	Assignee:
	 	 	 
	 

	 	 	 	[and is an Affiliate/Approved Fund of [identify Lender]2]
	 
	 	 	 	 
	3.

	 	Borrower(s):
	 	IRIS INTERNATIONAL, INC., a Delaware corporation
	 
	 	 	 	 
	4.

	 	Administrative Agent:
	 	JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement
	 
	 	 	 	 
	5.

	 	Credit Agreement:
	 	The $15,000,000 Credit Agreement, dated as of July 27, 2011, among IRIS INTERNATIONAL, INC., a
Delaware corporation, the Lenders parties thereto, and JPMorgan Chase Bank, N.A., as
Administrative Agent







 




	 	 	 
	2	 	Select as applicable.



 


 









 










	6.	 	Assigned Interest:





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






Effective
Date: _______ __, 20
 _____ 

[TO BE INSERTED BY
ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF
RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]



The Assignee agrees to deliver to the Administrative Agent a
completed Administrative Questionnaire in which the Assignee
designates one or more Credit Contacts to whom all syndicate-level
information (which may contain material non-public information
about the Borrower, the Loan Parties and their Related Parties or
their respective securities) will be made available and who may
receive such information in accordance with the Assignee’s
compliance procedures and applicable laws, including Federal and
state securities laws.



The terms set forth in this Assignment and Assumption are hereby
agreed to:



	 	 	 	 	 
	 	ASSIGNOR



[NAME OF ASSIGNOR]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 	ASSIGNEE



[NAME OF ASSIGNEE]

 	 
	 	By:  	 	 
	 	 	Title: 	 
	 	 	 	 
	 


 






	 	 	 
	3	 	Fill in the appropriate terminology for the types of
facilities under the Credit Agreement that are being assigned under this
Assignment (e.g. “Revolving Commitment,” “Tranche A Commitment,” “Tranche B
Commitment,” etc.)
	 
	4	 	Set forth, to at least 9 decimals, as a percentage of
the Commitment/Loans of all Lenders thereunder.



 


2









 









	 	 	 	 	 	 	 
	[Consented to and]5 Accepted:	 	 
	 
	 	 	 	 	 	 
	JPMORGAN CHASE BANK, N.A.,

as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	[Consented to:]6	 	 
	 
	 	 	 	 	 	 
	[NAME OF RELEVANT PARTY]	 	 
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:
	 	 

	 	 
	 

	 	 	 	 

	 	 





 






	 	 	 
	5	 	To be added only if the consent of the Administrative
Agent is required by the terms of the Credit Agreement.
	 
	6	 	To be added only if the consent of the Borrower and/or
other parties (e.g. Swingline Lender, Issuing Bank) is required by the terms of
the Credit Agreement.



 


3









 









ANNEX 1




The $15,000,000 Credit Agreement, dated as of July 27, 2011, by and

among IRIS INTERNATIONAL, INC., a Delaware corporation, the Lenders parties thereto,

and JPMorgan Chase Bank, N.A., as Administrative Agent




STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION




1. Representations and Warranties



1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is free and clear of any
lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken
all action necessary, to execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the Credit Agreement or any
other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the Borrower, any of its
Subsidiaries or Affiliates or any other Person of any of their respective obligations under any
Loan Document.



1.2 Assignee. The Assignee (a) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this Assignment and
Assumption and to consummate the transactions contemplated hereby and to become a Lender under the
Credit Agreement, (ii) it satisfies the requirements, if any, specified in the Credit Agreement
that are required to be satisfied by it in order to acquire the Assigned Interest and become a
Lender, (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to Section 5.01 thereof, as
applicable, and such other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Assumption and to purchase the
Assigned Interest on the basis of which it has made such analysis and decision independently and
without reliance on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required to be delivered by
it pursuant to the terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on the Administrative Agent, the
Assignor or any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or not taking action
under the Loan Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be performed by it as a
Lender.



2. Payments. From and after the Effective Date, the Administrative Agent shall make
all payments in respect of the Assigned Interest (including payments of principal, interest, fees
and other amounts) to the Assignor for amounts which have accrued to but excluding the Effective
Date and to the Assignee for amounts which have accrued from and after the Effective Date.


 


 









 





3. General Provisions. This Assignment and Assumption shall be binding upon, and inure
to the benefit of, the parties hereto and their respective successors and assigns. This Assignment
and Assumption may be executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this Assignment and
Assumption by facsimile shall be effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in
accordance with, the law of the State of California.


 


2









 





EXHIBIT B-1




OPINION OF COUNSEL FOR THE BORROWER




[Effective Date]




JPMorgan Chase Bank, N.A.

300 South Grand Avenue, Floor 4

Los Angeles, California 90071

Attn: David Scott




Re: Iris International, Inc., a Delaware corporation


Gentlemen:




We have acted as special counsel to Iris International, Inc., a Delaware corporation (the
“Company”), Arista Molecular, Inc., a Delaware corporation (“Arista”), Iris Global Network, Inc., a
Delaware corporation (“Iris Global”), Iris Molecular Diagnostics, Inc., a Delaware corporation
(“Iris Molecular”), and StatSpin, Inc., a Massachusetts corporation (“Statspin”; Statspin, together
with Arista, Iris Global, and Iris Molecular, each a “Guarantor” and collectively, the
“Guarantors”; the Company, together with the Guarantors, each a “Loan Party” and collectively, the
“Loan Parties”) in connection with the delivery of that certain Credit Agreement, dated as of the
date hereof (the “Agreement”), by and among the Company, the lenders from time to time a party
thereto (each a “Lender” and collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders (in such capacity, together with its successors and assigns in
such capacity, the “Administrative Agent”), and certain related documents. This opinion letter is
delivered pursuant to Section 5.01(b) of the Agreement.



Capitalized terms are used herein as defined in the Agreement, unless otherwise defined
herein, and other terms that are defined in the Uniform Commercial Code as in effect in the State
of California (the “California UCC”) have the same meanings when used herein, unless otherwise
indicated in the context in which such terms are so used.



In connection with this letter, we have examined executed originals or copies of executed
originals of each of the following documents, each of which is dated as of the date hereof unless
otherwise noted (collectively, the “Loan Documents”): (a) the Agreement, (b) those certain
Continuing Security Agreements between the relevant Loan Parties and the Administrative Agent
(each, a “Security Agreement” and collectively, the “Security Agreements”); and (c) those certain
Guarantees from the Guarantors. We have also examined originals or copies of executed originals of
the Uniform Commercial Code financing statements listed hereto on Schedule 2 (the “UCC
Financing Statements”).


 


 









 





In addition, we have examined the following documents (collectively, the “Due Diligence
Documents”): (i) the articles of incorporation and bylaws submitted with the Secretaries
Certificates delivered pursuant to Section 4.01(d) of the Agreement (the “Formation Documents”),
(ii) certificates of the State agencies or officials set forth on Schedule 1 hereto (the
“Good Standing Certificates”), and (iii) certain Officer’s and Secretary’s Certificates of the Loan
Parties dated as of even date herewith certifying certain other factual matters (the “Officers’
Reliance Certificates”).  



We have examined originals or certified copies of such corporate records of the Loan Parties
and other certificates and documents of officials of the Loan Parties, public officials and others
and have made such investigation of Included Laws (as defined below) as we have deemed appropriate
for purposes of this letter, except where a statement is qualified as to knowledge or awareness,
which is as specified below. As to various questions of fact relevant to this letter, we have
relied, without independent investigation, upon the Due Diligence Documents and certificates of
public officials, certificates of officers of the Loan Parties and the representations and
warranties of the Loan Parties in the Loan Documents, all of which we assume to be true, correct
and complete. We have made no investigation or review of any matters or agreements relating to the
Loan Parties or any other Person other than as expressly described herein. We wish to inform you
that our knowledge is necessarily limited due to the limited scope of our review. In addition, we
have made no inquiry of the Loan Parties or any other Person (including Governmental Authorities)
regarding, and no review of, any court dockets, judgments, orders, decrees, franchises, licenses,
certificates, permits or other public records other than the Good Standing Certificates and the
Officers’ Reliance Certificates, and our “knowledge” of any such matters is accordingly limited.



We have assumed the genuineness of all signatures, other than signatures to the Loan Documents
made on behalf of the Loan Parties, the authenticity of all documents submitted to us as originals
and the conformity to authentic original documents of all copies submitted to us as conformed,
certified or reproduced copies. We have also assumed the legal capacity of natural persons, the
corporate or other power and due authorization of each Person not a natural person, other than the
Loan Parties, to execute and deliver the Loan Documents and to consummate the transactions
contemplated by the Loan Documents, the due execution and delivery of each Loan Document by all
parties thereto, other than the Loan Parties, and that each Loan Document constitutes the legal,
valid and binding obligation of each party thereto, other than the Loan Parties, enforceable
against such party in accordance with its terms.



Based upon the foregoing and subject to the assumptions, exceptions, qualifications and
limitations set forth hereinafter, we are of the opinion that:




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




 


 









 











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






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






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






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






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




 


 









 











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






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





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




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






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




 


 









 











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






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






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






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




 


 









 











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






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






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




 


 









 











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






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






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






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






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




 


 









 











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






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






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






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






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






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






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






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





Very truly yours,



 


 









 





EXHIBIT B-2




OPINION OF IN-HOUSE COUNSEL OF BORROWER




[Effective Date]




JPMorgan Chase Bank, N.A.

300 South Grand Avenue, Floor 4

Los Angeles, California 90071

Attn. David Scott




Re: Iris International, Inc., a Delaware corporation


Gentlemen:




I am the corporate counsel to Iris International, Inc., a Delaware corporation (the
“Company”), Arista Molecular, Inc., a Delaware corporation (“Arista”), Iris Global Network, Inc., a
Delaware corporation (“Iris Global”), Iris Molecular Diagnostics, Inc., a Delaware corporation
(“Iris Molecular”), and StatSpin, Inc., a Massachusetts corporation (“Statspin”; Statspin, together
with Arista, Iris Global, and Iris Molecular, each a “Guarantor” and collectively, the
“Guarantors”; the Company, together with the Guarantors, each a “Loan Party” and collectively, the
“Loan Parties”) in connection with the delivery of that certain Credit Agreement, dated as of the
date hereof (the “Agreement”), by and among the Company, the lenders from time to time a party
thereto (each a “Lender” and collectively, the “Lenders”) and JPMorgan Chase Bank, N.A., as
administrative agent for the Lenders (in such capacity, together with its successors and assigns in
such capacity, the “Administrative Agent”), and certain related documents. This opinion letter is
delivered pursuant to Section 5.01(b) of the Agreement.



Capitalized terms are used herein as defined in the Agreement, unless otherwise defined
herein.



In connection with this letter, I have examined executed originals or copies of executed
originals of each of the following documents, each of which is dated as of the date hereof unless
otherwise noted (collectively, the “Loan Documents”): (a) the Agreement, (b) those certain
Continuing Security Agreements between the relevant Loan Parties and the Administrative Agent
(each, a “Security Agreement”), collectively the “Security Agreements”); and(c) those certain
Guarantees from the Guarantors .



In addition, I have examined the following documents (collectively, the “Due Diligence
Documents”): (i) the articles of incorporation and bylaws described on Schedule 1 hereto
(the “Formation Documents” and (ii) certificates of the State agencies or officials set forth in
Schedule 2 hereto (the “Good Standing Certificates”).


 


 









 





I have examined originals or certified copies of such corporate records of the Loan Parties
and other certificates and documents of officials of the Loan Parties, public officials and others
and have made such investigation of law as I have deemed appropriate for purposes of this letter,
except where a statement is qualified as to knowledge or awareness, which is as specified below.



Based upon the foregoing and subject to the qualifications and limitations set forth
hereinafter, I am of the opinion that:




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






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






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






	 	4.	 	There are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to my knowledge, threatened against or
affecting the Company or any Guarantor (a) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect (other than the Disclosed Matters) or (b) that involve the Loan Documents or the
Transactions.






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




 


 









 







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





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




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





(http://www.malegislature.gov/Laws/GeneralLaws/PartI/TitleXV/Chapter106)





on the date hereof (solely with respect to the opinions expressed in paragraph 6 herein).




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







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








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








 


 









 






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









Very truly yours,



 


 









 





EXHIBIT C




JOINDER AGREEMENT




THIS JOINDER AGREEMENT (this “Agreement”), dated as of                     
 _____, 20____, is entered into
between                                         , a                      (the “New Subsidiary”) and JPMORGAN
CHASE BANK, N.A., in its capacity as administrative agent (the “Administrative Agent”) under that
certain Credit Agreement, dated as of July 27, 2011 among IRIS INTERNATIONAL, INC., a Delaware
corporation (the “Borrower”), the Loan Parties party thereto, the Lenders party thereto and the
Administrative Agent (as the same may be amended, modified, extended or restated from time to time,
the “Credit Agreement”). All capitalized terms used herein and not otherwise defined shall have
the meanings set forth in the Credit Agreement.



The New Subsidiary and the Administrative Agent, for the benefit of the Lenders, hereby agree
as follows:



1. The New Subsidiary hereby acknowledges, agrees and confirms that, by its execution of this
Agreement, the New Subsidiary will be deemed to be a Loan Party under the Credit Agreement and a
“Guarantor” for all purposes of the Credit Agreement and shall have all of the obligations of a
Loan Party and a Guarantor thereunder as if it had executed the Credit Agreement. The New
Subsidiary hereby ratifies, as of the date hereof, and agrees to be bound by, all of the terms,
provisions and conditions contained in the Credit Agreement, including without limitation (a) all
of the representations and warranties of the Loan Parties set forth in Article III of the Credit
Agreement, and (b) all of the covenants set forth in Articles V and VI of the Credit Agreement.
The New Subsidiary has delivered to the Administrative Agent an executed Guaranty.



2. If required, the New Subsidiary is, simultaneously with the execution of this Agreement,
executing and delivering such Loan Documents (and such other documents and instruments) as
requested by the Administrative Agent in accordance with the Credit Agreement.



3. The address of the New Subsidiary for purposes of Section 9.01 of the Credit Agreement is
as follows:




                                                            



                                                            



                                                            




                                                            



4. The New Subsidiary hereby waives acceptance by the Administrative Agent and the Lenders of
the guaranty by the New Subsidiary upon the execution of this Agreement by the New Subsidiary.



5. This Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute one and the same
instrument.



6. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.


 


 









 





IN WITNESS WHEREOF, the New Subsidiary has caused this Agreement to be duly executed by its
authorized officer, and the Administrative Agent, for the benefit of the Lenders, has caused the
same to be accepted by its authorized officer, as of the day and year first above written.



	 	 	 	 	 	 	 	 	 
	 	 	[NEW SUBSIDIARY]	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	Acknowledged and accepted:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK, N.A., as Administrative
Agent	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title: