exv10w17






Exhibit 10.17




$15,000,000




SENIOR SECURED SUPER PRIORITY DEBTOR IN POSSESSION CREDIT AGREEMENT




Dated as of December 23, 2009



among



TLC VISION (USA) CORPORATION



TLC VISION CORPORATION



TLC MANAGEMENT SERVICES INC.



each as a debtor and a debtor in possession and as joint and several Borrowers



and



THE GUARANTORS NAMED HEREIN



as Guarantors



and



THE LENDERS NAMED HEREIN



as Lenders



and



CANTOR FITZGERALD SECURITIES



as Collateral Agent and Administrative Agent



 









 





TABLE OF CONTENTS




	 
	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

	 
	Section 1.01. Certain Defined Terms

	Section 1.02. Computation of Time Periods; Other Definitional Provisions

	Section 1.03. Accounting Terms

	 

	ARTICLE II AMOUNT AND TERMS OF THE TERM LOANS

	 
	Section 2.01. Term Loan Commitments

	Section 2.02. Making the Term Loans

	Section 2.03. Repayment of Term Loans

	Section 2.04. Prepayments

	Section 2.05. Interest

	Section 2.06. Fees

	Section 2.07. Increased Costs, Etc

	Section 2.08. Payments and Computations

	Section 2.09. Taxes

	Section 2.10. Sharing of Payments, Etc

	Section 2.11. Use of Proceeds

	Section 2.12. Defaulting Lenders

	Section 2.13. Evidence of Debt

	Section 2.14. Extension of Maturity Date

	Section 2.15. Joint and Several Obligations; Administrative Borrower

	 

	ARTICLE III CONDITIONS TO EFFECTIVENESS AND OF LENDING

	 
	Section 3.01. Conditions Precedent to Borrowing Interim Order Amount

	Section 3.02. Conditions to Borrowings in Excess of the Interim Order Amount

	Section 3.03. Conditions Precedent to All Borrowings

	Section 3.04. Determinations Under Section 3.01 and 3.02

	Section 3.05. Conditions Subsequent to Closing Date

	 

	ARTICLE IV REPRESENTATIONS AND WARRANTIES

	 
	Section 4.01. Representations and Warranties of Borrowers

	 

	ARTICLE V COVENANTS

	 
	Section 5.01. Affirmative Covenants

	Section 5.02. Negative Covenants

	Section 5.03. Reporting Requirements

	Section 5.04. Financial Covenants

	 

	ARTICLE VI EVENTS OF DEFAULT

	 
	Section 6.01. Events of Default

	Section 6.02. Remedies upon Default







 









 






TABLE OF CONTENTS

(continued)




	 
	ARTICLE VII THE AGENTS

	 
	Section 7.01. Authorization and Action

	Section 7.02. Agents’ Reliance, Etc

	Section 7.03. Rights as a Lender

	Section 7.04. Lender Credit Decision

	Section 7.05. Indemnification

	Section 7.06. Successor Agents

	Section 7.07. Notice of Default

	Section 7.08. No Reliance on Administrative Agent’s Customer Identification Program

	 

	ARTICLE VIII PRIORITY AND COLLATERAL SECURITY

	 
	Section 8.01. Superpriority Claims and Collateral Security

	Section 8.02. Collateral Security Perfection

	Section 8.03. Guarantees

	Section 8.04. No Discharge; Survival of Claims

	 

	ARTICLE IX MISCELLANEOUS

	 
	Section 9.01. Amendments, Etc

	Section 9.02. Notices, Etc

	Section 9.03. No Waiver; Remedies

	Section 9.04. Costs and Expenses

	Section 9.05. Right of Set-off

	Section 9.06. Binding Effect

	Section 9.07. Assignments and Participations

	Section 9.08. Execution in Counterparts

	Section 9.09. Confidentiality

	Section 9.10. Public Disclosure

	Section 9.11. Release or Subordination of Collateral/Release of Guarantor

	Section 9.12. Patriot Act Notice

	Section 9.13. Jurisdiction, Etc

	Section 9.14. Governing Law

	Section 9.15. Waiver of Jury Trial

	Section 9.16. Release







 









 






SCHEDULES




	 	 	 	 	 
	Schedule I

	 	-
	 	Commitments and Lending Offices
	Schedule II

	 	-
	 	Canadian Refractive Centers
	Schedule III

	 	-
	 	Guarantors
	Schedule 3.05

	 	 	 	Conditions Subsequent to Closing Date
	Schedule 4.01(b)

	 	-
	 	Loan Parties
	Schedule 4.01(f)

	 	-
	 	Disclosed Litigation
	Schedule 4.01(n)

	 	-
	 	Environmental Disclosure
	Schedule 4.01(p)

	 	-
	 	Liens
	Schedule 4.01(q)

	 	-
	 	Investments
	Schedule 5.02(b)

	 	-
	 	Debt






EXHIBITS




	 	 	 	 	 
	Exhibit A

	 	-
	 	Form of Note
	Exhibit B

	 	-
	 	Form of Notice of Borrowing
	Exhibit C

	 	-
	 	Form of Assignment and Acceptance
	Exhibit D-1

	 	-
	 	Form of U.S. Security Agreement
	Exhibit D-2

	 	-
	 	Form of Canadian Security Agreement
	Exhibit E

	 	-
	 	Form of Guaranty
	Exhibit F-1

	 	-
	 	Form of Opinion of Canadian Counsel
	Exhibit F-2

	 	-
	 	Form of Opinion of U.S. Counsel
	Exhibit G

	 	-
	 	Form of Intercreditor Agreement







 











 





          This SENIOR SECURED SUPER PRIORITY DEBTOR-IN-POSSESSION CREDIT AGREEMENT dated as of
December 23, 2009 among TLC VISION (USA) CORPORATION, a Delaware corporation and a debtor and a
debtor in possession (“Holdco”), TLC VISION CORPORATION, a New Brunswick corporation and a debtor
and debtor in possession (“Parent”), TLC MANAGEMENT SERVICES INC., a Delaware corporation and a
debtor and a debtor in possession (“TLC Management”, and together with Holdco and Parent, the
“Borrowers”), the Guarantors (as hereinafter defined), the Lenders (as hereinafter defined), Cantor
Fitzgerald Securities, as collateral agent (together with any successor collateral agent appointed
pursuant to Article VII, the “Collateral Agent”) for the Secured Parties (as hereinafter
defined) and administrative agent (together with any successor administrative agent appointed
pursuant to Article VII, the “Administrative Agent” and, together with the Collateral
Agent, the “Agents”) for the Lenders (as hereinafter defined).


PRELIMINARY STATEMENTS:




          WHEREAS, on December 21, 2009 (the “Petition Date”), the Borrowers commenced voluntary cases
under Chapter 11 of the Bankruptcy Code (the “Chapter 11 Cases”) in the United States Bankruptcy
Court for the District of Delaware (the “Bankruptcy Court”);



          WHEREAS, subsequent to the Petition Date, Parent filed a petition seeking ancillary relief
under Part IV of the Companies’ Creditors Arrangement Act (Canada) (the “CCAA”) in the Ontario
Superior Court of Justice (Commercial List) (the “Canadian Court”) (the “Canadian Case”, and
together with the Chapter 11 Cases, the “Cases”));



          WHEREAS, the Borrowers intend to continue to operate their business pursuant to Sections 1107
and 1108 of the Bankruptcy Code;



          WHEREAS, prior to the Petition Date, Holdco, as borrower (in its capacity as such, the
“Prepetition Borrower”), Parent and the other guarantors party thereto, as guarantors (in their
capacity as such, collectively, the “Prepetition Guarantors”), the lenders party thereto (the
“Prepetition Lenders”), and Wells Fargo Bank, National Association, as administrative agent and
collateral agent (in its capacity as such, the “Prepetition Agent”) entered into that certain
Amended and Restated Credit Agreement dated as of June 21, 2007 (as amended and in effect from time
to time, the “Prepetition Credit Agreement”), pursuant to which the Prepetition Lenders extended
credit to Prepetition Borrower on the terms set forth therein;



          WHEREAS, as of the Petition Date, the Prepetition Lenders under the Prepetition Credit
Agreement are owed, together with any and all interest, fees, expense reimbursement and
indemnification obligations, reimbursement obligations in respect of letters of credit and other
obligations under the Prepetition Credit Agreement, an aggregate principal amount equal to
$101,715,175.71 and CAD $1,000,000 in obligations incurred directly by the Prepetition Borrower
(the “Prepetition Lender Debt”);



          WHEREAS, the Borrowers have requested that the Lenders provide financing to the Borrowers
consisting of a senior secured super priority term loan facility in a principal amount of up to
$15,000,000 (the “Facility”) pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code;



 









 





          WHEREAS, the Lenders have indicated their willingness to agree to extend the Facility to the
Borrowers, all on terms and conditions set forth herein and in the other Loan Documents and in
accordance with Sections 364(c) and 364(d) of the Bankruptcy Code, so long as:



          (a) such postpetition credit obligations are (i) secured by Liens on substantially all of the
property, rights and interests, real and personal, tangible and intangible, of the Borrowers,
whether now owned or hereafter acquired, subject in priority only to certain Liens and the
Carve-Out, as hereinafter provided, and (ii) given superpriority status as provided in the Interim
Order and, on and after the entry thereof, the Final Order;



          (b) each Guarantor has jointly and severally guaranteed such postpetition credit obligations
and each Guarantor’s obligations are secured by Liens on substantially all of the property and
interest, real and personal, tangible and intangible, of such Guarantor, whether now owned or
hereafter acquired,



          (c) the Prepetition Lenders shall receive certain adequate protection for use of cash
collateral and the priming of their prepetition Liens securing the obligations of the Prepetition
Borrower and Prepetition Guarantors in respect of the Prepetition Lender Debt; and



          WHEREAS, the Borrowers have agreed to provide such collateral security, superpriority claims
and adequate protection, subject to the approval of the Bankruptcy Court.



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



ARTICLE I




DEFINITIONS AND ACCOUNTING TERMS



          SECTION 1.01. Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):



          “Administrative Agent” has the meaning specified in the preamble to this Agreement.



          “Administrative Agents’ Account” means the account of the Administrative Agent specified by
the Administrative Agent in writing to the Lenders from time to time.



          “Administrative Borrower” has the meaning specified in Section 2.15(h).



          “Affiliate” means, as to any Person, any other Person that, directly or indirectly, controls,
is controlled by or is under common control with such Person or is a director or officer of such
Person. For purposes of this definition, the term “control” (including the terms “controlling,”
“controlled by” and “under common control with”) of a Person means the possession, direct or
indirect, of the power to vote 5% or more of the Voting Interests of such



 









 




Person or to direct or cause the direction of the management and policies of such Person, whether through the ownership of
Voting Interests, by contract or otherwise.




          “Agents” has the meaning specified in the preamble to this Agreement.




          “Agent Parties” has the meaning specified in Section 9.02(c).




          “Agreement” shall mean this Senior Secured Super Priority Debtor in Possession Credit
Agreement, as amended, supplemented, replaced, or otherwise modified from time to time.




          “Approved Fund” means any Person (other than a natural person) engaged in making, purchasing,
holding, or investing in commercial loans and similar extensions of credit and that is advised,
administered, or managed by a Lender, a Prepetition Lender, an Affiliate of a Lender or an
Affiliate of a Prepetition Lender (or an entity or an Affiliate of an entity that administers,
advises or manages a Lender or a Prepetition Lender); and with respect to any Lender or Prepetition
Lender that is an investment fund, any other investment fund that invests in loans and that is
advised, administered or managed by the same investment advisor as such Lender or a Prepetition
Lender or by an Affiliate of such investment advisor.




          “Assignment and Acceptance” means an assignment and acceptance entered into by a Lender and an
Eligible Assignee (with the consent of any party whose consent is required by Section 9.07
or by the definition of “Eligible Assignee”), and accepted by the Administrative Agent, in
accordance with Section 9.07 and in substantially the form of Exhibit C hereto or
any other form approved by the Administrative Agent.




          “Bankruptcy Code” Title 11, United States Code, as now and hereafter in effect, or any
applicable successor statute.




          “Bankruptcy Court” has the meaning specified in the recitals to this Agreement.




          “Bankruptcy Law” means the Bankruptcy Code, CCAA, BIA, or any similar foreign, federal or
state law for the relief of debtors.




          “BIA” means the Bankruptcy and Insolvency Act (Canada).




          “Borrowers” has the meaning specified in the preamble to this Agreement.




          “Borrowing” means a borrowing hereunder consisting of simultaneous Term Loans made by the
Lenders.




          “Budget” means a cash flow forecast for the period from the Petition Date to the date one
hundred fifty (150) days after the Petition Date (provided, that to the extent the Maturity Date is
extended in accordance with Section 2.14, the Administrative Borrower shall, concurrently with the
prior written notice specified in Section 2.14, deliver to the Administrative Agent an updated
Budget through the new Maturity Date, in form and substance reasonably satisfactory to the Required
Lenders), which sets forth on a weekly basis cash receipts and disbursements (including, without
limitation, line item entries for professional fees and expenses





 









 







by firm and the anticipated uses of the Facility) in form and substance satisfactory to the Required Lenders and the Borrowers, a
summary of which shall be attached as Exhibit A to the Interim Order.




          “Business Day” means a day of the year on which banks are not required or authorized by law to
close in New York City and, if the applicable Business Day relates to any Term Loans, on which
dealings are carried on in the London interbank market.




          “Canadian Case” has the meaning specified in the recitals to this Agreement.




          “Canadian Court” has the meaning specified in the recitals to this Agreement.




          “Canadian Loan Parties” means, collectively, Parent and each Subsidiary of Parent organized
under the laws of Canada or any province thereof.




          “Canadian Intellectual Property Security Agreement” means the Intellectual Property Security
Agreement granted by certain Loan Parties in favor of the Collateral Agent for the Secured Parties
substantially in the form of Exhibit A to the Canadian Security Agreement.




          “Canadian Plan” means a pension plan for employees of any Loan Party or Subsidiary or other
Affiliate thereof, which plan is or is required to be registered under any Canadian federal or
provincial pension benefits legislation and/or under the Income Tax Act (Canada).




          “Canadian Refractive Centers” means (a) the refractive centers owned by Parent and set forth
on Schedule II hereto and (b) all of the Equity Interests owned by Parent in TLC The Laser
Center (Moncton), Inc., an Ontario corporation.




          “Canadian Security Agreement” has the meaning specified in Section 3.01(a)(iii).




          “Capital Expenditures” means, for any Person for any period, the sum of, without duplication,
(a) all expenditures made, directly or indirectly, by such Person or any of its Subsidiaries during
such period for equipment, fixed assets, real property or improvements, or for replacements or
substitutions therefor or additions thereto, that have been or should be, in accordance with GAAP,
reflected as additions to property, plant or equipment on a balance sheet of such Person or have a
useful life of more than one year plus (b) the aggregate principal amount of all Debt (including
Obligations under Capitalized Leases) assumed or incurred in connection with any such expenditures.
For purposes of this definition, the purchase price of equipment that is purchased simultaneously
with the trade-in of existing equipment or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less the credit granted
by the seller of such equipment for the equipment being traded in at such time or the amount of
such proceeds, as the case may be.




          “Capitalized Leases” means all leases that have been or should be, in accordance with GAAP,
recorded as capitalized leases.




 









 








          “Carve Out” means, the following expenses: (a) statutory fees payable to the United States
Trustee pursuant to 28 U.S.C. Section 1930(a)(6) and all fees and disbursements payable to the
information officer in the Canadian Case as determined by order of the Canadian Court; and (b)
subject to the terms and conditions of the Order, all fees and disbursements incurred by (i) legal
counsel for the Parent in the Canadian Case, and (ii) the Borrowers and/or the Creditors’ Committee
for any attorneys and a single financial advisor for the Borrowers and
 Creditors’ Committee respectively, retained by final order of the Bankruptcy Court (which
order has not been reversed, vacated, or stayed, unless such stay has been vacated) pursuant to
Sections 327 or 1103(a) of the Bankruptcy Code to the extent allowed by order of the Bankruptcy
Court (which order has not been reversed, vacated, or stayed, unless such stay has been vacated)
under Sections 328, 330 and/or 331 of the Bankruptcy Code and any interim compensation procedures
order, but solely to the extent such fees and disbursements are within the corresponding amounts
set forth in the Budget and were reflected as estimated fees and expenses of such professionals in
the most recent Budget delivered by the Borrowers to the Administrative Agent prior to the date
that such fees and disbursements were incurred; provided, that, following a notice to the Borrowers
from the Administrative Agent of the occurrence of an Event of Default, the amount of the Carve Out
shall not exceed $250,000 plus the amount of any compensation or reimbursement of budgeted expenses
and fees incurred, awarded or paid prior to the occurrence of an Event of Default in respect of
which the Carve Out is invoked.




          “Cases” has the meaning specified in the recitals to this Agreement.




          “Cash Equivalents” means any of the following, to the extent owned by Parent or any of its
Subsidiaries free and clear of all Liens other than Liens created under the Collateral Documents,
the Interim Order and the Final Order and having a maturity of not greater than 90 days from the
date of issuance thereof: (a) readily marketable direct obligations of the Government of the
United States or any agency or instrumentality thereof or obligations unconditionally guaranteed by
the full faith and credit of the Government of the United States, and (b) insured certificates of
deposit of or time deposits with any commercial bank that (i) is a Lender or a member of the
Federal Reserve System, (ii) is organized under the laws of the United States or any State thereof,
and (iii) has combined capital and surplus of at least $1 billion.




          “CCAA” has the meaning specified in the recitals to this Agreement.




          “CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, 42 U.S.C. § 9601 et seq.




          “CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability
Information System maintained by the U.S. Environmental Protection Agency.




          “Change of Control” means the occurrence of any of the following: (a) Parent shall own less
than 100% of the Voting Interests in any Borrower; or (b) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Interests of Parent (or other securities convertible into such Voting
Interests) representing 30% or more of the combined voting power of all Voting




 









 







Interests of any Borrower; or (c) during any period of up to 24 consecutive months, commencing after the date of
this Agreement, Continuing Directors shall cease for any reason to constitute a majority of the
board of directors of Parent; or (d) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of Parent.




          “Chapter 11 Cases” has the meaning specified in the recitals to this Agreement.




          “CIP Regulations” has the meaning specified in Section 7.08.




          “Closing Date” has the meaning specified in Section 3.01.




          “Collateral” means all “Collateral” referred to in the Collateral Documents and all other
property that is or is intended to be subject to any Lien in favor of the Collateral Agent for the
benefit of the Secured Parties.




          “Collateral Agent” has the meaning specified in the preamble to this Agreement.




          “Collateral Agent’s Office” means, with respect to the Collateral Agent or any successor
Collateral Agent, the office of such Agent as such Agent may from time to time specify to the
Administrative Borrower and the Administrative Agent.




          “Collateral Documents” means the Security Agreements, the Intellectual Property Security
Agreements, each of the collateral documents, instruments and agreements delivered pursuant to
Section 5.01(j), and each other agreement that creates or purports to create a Lien in
favor of the Collateral Agent for the benefit of the Secured Parties.




          “Commitment” means, with respect to any Lender at any time, the amount set forth opposite such
Lender’s name on Schedule I hereto under the caption “Commitment” or, if such Lender has
entered into one or more Assignment and Acceptances, the amount set forth for such Lender in the
Register maintained by the Administrative Agent pursuant to Section 9.07(d) as such
Lender’s “Commitment,” as such amount may be reduced at or prior to such time pursuant to
Section 2.04.




          “Communications” has the meaning specified in Section 9.02(b).




          “Consenting Lenders” has the meaning set forth in the Plan Support Agreement in effect on the
Closing Date.




          “Consolidated” refers to the consolidation of accounts in accordance with GAAP.




          “Continuing Directors” means the directors of Parent on the Closing Date and each other
director if, in each case, such other director’s nomination for election to the board of directors
of Parent is recommended by at least a majority of the then Continuing Directors.




 









 








          “Control Account Agreement” means a control account agreement executed and delivered as
required by Section 5.01(l) and 5.02(t) hereof in favor of the Collateral Agent,
for the benefit of the Secured Parties.




          “Controlled Cash” means collectively, the Owned Cash and Non-Owned Controlled Cash.




          “Controlled Loan Party” means any Loan Party that is either Parent or a wholly owned
Subsidiary of Parent.




          “Creditors’ Committee” means the Official Unsecured Creditors’ Committee to be appointed by
the United States Trustee in relation to the Chapter 11 Cases, as applicable.




          “Current Assets” of any Person means all assets of such Person that would, in accordance with
GAAP, be classified as current assets of a company conducting a business the same as or similar to
that of such Person, after deducting adequate reserves in each case in which a reserve is proper in
accordance with GAAP.




          “Current Liabilities” of any Person means (a) all Debt of such Person except Funded Debt, (b)
all amounts of Funded Debt of such Person required to be paid or prepaid within one year after such
date and (c) all other items (including taxes accrued as estimated) that in accordance with GAAP
would be classified as current liabilities of such Person.




          “Debt” of any Person means, without duplication, (a) all indebtedness of such Person for
borrowed money, (b) all Obligations of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 120 days incurred in the ordinary
course of such Person’s business), (c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all Obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e) all Obligations of
such Person as lessee under Capitalized Leases, (f) all Obligations of such Person under
acceptance, letter of credit or similar facilities, (g) all Obligations of such Person to purchase,
redeem, retire, defease or otherwise make any payment in respect of any Equity Interests in such
Person or any other Person or any warrants, rights or options to acquire such Equity Interests,
valued, in the case of Redeemable Preferred Interests, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (h) all Guaranteed Debt and
Synthetic Debt of such Person and (i) all indebtedness and other payment Obligations referred to in
clauses (a) through (h) above of another Person secured by (or for which the holder of such Debt
has an existing right, contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such indebtedness or other payment Obligations.




          “Debt for Borrowed Money” of any Person means, at any date of determination, the sum of (a)
all items that, in accordance with GAAP, would be classified as indebtedness on a Consolidated
balance sheet of such Person at such date, (b) all Obligations of such Person under




 









 







acceptance, letter of credit or similar facilities at such date and (c) all Synthetic Debt of such Person at
such date.




          “Default” means any Event of Default or any event that would constitute an Event of Default
but for the passage of time or the requirement that notice be given or both.




          “Default Interest” has the meaning set forth in Section 2.05(b).




          “Defaulted Loan” means, with respect to any Lender at any time, the portion of any Term Loan
required to be made by such Lender to the Borrowers pursuant to Section 2.01 or Section
2.02 at or prior to such time that has not been made by such Lender or by the
Administrative Agent for the account of such Lender pursuant to Section 2.02(d) as of
such time. In the event that a portion of a Defaulted Loan shall be deemed made pursuant to
Section 2.12(a), the remaining portion of such Defaulted Loan shall be considered a
Defaulted Loan originally required to be made pursuant to Section 2.01 on the same date as
the Defaulted Loan so deemed made in part.




          “Defaulted Amount” means, with respect to any Lender at any time, any amount required to be
paid by such Lender to any Agent or any other Lender hereunder or under any other Loan Document at
or prior to such time that has not been so paid as of such time, including, without limitation, any
amount required to be paid by such Lender to (a) the Administrative Agent pursuant to Section
2.02(d) to reimburse the Administrative Agent for the amount of any Term Loan made by the
Administrative Agent for the account of such Lender, (b) any other Lender pursuant to Section
2.10 to purchase any participation in Term Loans owing to such other Lender and (c) any Agent
pursuant to Section 7.05 to reimburse such Agent for such Lender’s ratable share of any
amount required to be paid by the Lenders to such Agent as provided therein. In the event that a
portion of a Defaulted Amount shall be deemed paid pursuant to Section 2.12(b), the
remaining portion of such Defaulted Amount shall be considered a Defaulted Amount originally
required to be paid hereunder or under any other Loan Document on the same date as the Defaulted
Amount so deemed paid in part.




          “Defaulting Lender” means, at any time, any Lender that, at such time, owes a Defaulted Loan
or a Defaulted Amount.




          “DIP Proceeds Controlled Account” means the account of the Borrowers specified by the
Administrative Borrower in writing to the Administrative Agent prior to the Closing Date, which
shall be subject to a Control Account Agreement.




          “Disclosed Litigation” has the meaning specified in Section 3.01(c).




          “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition
(including any sale and leaseback transaction) of any property by any Person (or the granting of
any option or other right to do any of the foregoing), including any sale, assignment, transfer or
other disposal, with or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith.




          “Dollar” and “$” means the lawful money of the United States.




 









 








          “Eligible Assignee” means (a) a Lender; (b) a Prepetition Lender; (c) an Affiliate of a
Lender; (d) an Affiliate of a Prepetition Lender; (e) an Approved Fund; and (f) any other Person
(other than an individual) (i) approved by the Required Lenders or (ii) to whom a contemporaneous
assignment of a pro rata portion of the assigning Lender’s Prepetition Lender Debt
is made; provided, however, that neither any Loan Party nor any Affiliate of a Loan Party shall
qualify as an Eligible Assignee under this definition.




          “Environmental Action” means any action, suit, demand, demand letter, claim, notice of
non-compliance or violation, notice of liability or potential liability, investigation, proceeding,
consent order or consent agreement relating in any way to any Environmental Law, any Environmental
Permit or Hazardous Material or arising from alleged injury or threat to
health, safety or the environment, climate or natural resources, including, without
limitation, (a) by any governmental or regulatory authority for enforcement, cleanup, removal,
response, remedial or other actions, damages or response costs and (b) by any governmental or
regulatory authority or third party for damages, response costs, contribution, indemnification,
cost recovery, compensation or declaratory or injunctive relief.




          “Environmental Law” means all applicable current and future Federal, state, local and foreign
laws (including common laws), statutes, regulations, rules having the force and effect of law,
ordinances, codes, orders, writs, judgments, injunctions, decrees or judicial or agency
interpretations, policies or guidance, in each case relating to pollution or protection of the
environment, climate, health, safety or natural resources, or the presence, release of, discharge
of, exposure to, or the generation, manufacture, processing, distribution, use, handling,
transportation, treatment, storage, disposal, recycling of or the arrangement for such activities,
with respect to Hazardous Materials.




          “Environmental Permit” means any permit, approval, identification number, license,
registration, notification, exemption or other authorization required under any Environmental Law.




          “Equity Interests” means, with respect to any Person, shares of capital stock of (or other
ownership or profit interests in) such Person, warrants, options or other rights for the purchase
or other acquisition from such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights or options for the
purchase or other acquisition from such Person of such shares (or such other interests), and other
ownership or profit interests in such Person (including, without limitation, partnership, member or
trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any date of
determination.




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




          “ERISA Affiliate” means any Person that for purposes of Title IV of ERISA is a member of the
controlled group of any Loan Party, or that is under common control with any Loan Party, within the
meaning of Section 414(b), (c), (m) or (o) of the Internal Revenue Code.




 









 








          “Eurocurrency Liabilities” has the meaning specified in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.




          “Eurodollar Rate” means the higher of (a) the applicable British Bankers’ Association LIBOR
Rate for deposits in Dollars for any Interest Period, as reported on Page 3750 (or such other page
as may replace that page) on the Dow Jones Telerate Screen (British Bankers Association) or on any
successor or substitute page of such service as of 11:00 a.m. (London time) two Business Days prior
to the first day of such Interest Period; provided, that, if no such British Bankers’ Association
LIBOR Rate is available to the Administrative Agent, the Eurodollar Rate for the relevant Interest
Period shall instead be the rate at which deposits in Dollars are offered for such relevant
Interest Period to major banks in the London interbank
market for the applicable Interest Period as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period and (b) three percent (3%) per annum.




          “Eurodollar Rate Reserve Percentage” for any Interest Period for all Term Loans comprising
part of the same Borrowing means the reserve percentage (if any) applicable two (2) Business Days
before the first day of such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for a member bank of the Federal Reserve System in New York City with respect
to liabilities or assets consisting of or including Eurocurrency Liabilities (or with respect to
any other category of liabilities that includes deposits by reference to which the interest rate on
Term Loans is determined) having a term equal to such Interest Period.




          “Events of Default” has the meaning specified in Section 6.01.




          “Exit Fee” has the meaning specified in Section 2.06.




          “Extension Fee” has the meaning specified in Section 2.06.




          “Extraordinary Receipt” means any cash received by or paid to or for the account of any Person
not in the ordinary course of business, including, without limitation, aggregate amount of tax
refunds received, pension plan reversions, proceeds of insurance (including, without limitation,
any key man life insurance but excluding proceeds of business interruption insurance to the extent
such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu
thereof), indemnity payments and any purchase price adjustment received in connection with any
purchase agreement; provided, however, that an Extraordinary Receipt shall not include cash
receipts received from proceeds of insurance, condemnation awards (or payments in lieu thereof) or
indemnity payments to the extent that such proceeds, awards or payments are received by any Person
in respect of any third party claim against such Person and applied to pay (or to reimburse such
Person for its prior payment of) such claim and the costs and expenses of such Person with respect
thereto.




          “Facility” has the meaning specified in the recitals to this Agreement.




          “Federal Funds Rate” means, for any period, a fluctuating interest rate per annum equal for
each day during such period to the weighted average of the rates on overnight




 









 







Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next preceding 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 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.




          “Fee Letter” means the Second Amended and Restated Fee Letter dated December 18, 2009 between
the Borrowers and the Administrative Agent.




          “Final Order” means a final order of the Bankruptcy Court authorizing and approving this
Agreement and the other Loan Documents on a final basis and entered following a final hearing in
form and substance satisfactory to the Administrative Agent and the Required Lenders, the
Borrowers, and their respective counsel.




          “Final Order Amount” means, at any time, $15,000,000 minus the Interim Order Amount, as such
amount may be reduced at or prior to such time pursuant to Section 5.02(e).




          “Final Order Funding Date” means the date on which the Final Order is entered.




          “Financial Advisor” means Gordian Group LLC or such other financial advisor as may be engaged
by the Special Counsel from time to time.




          “Fiscal Year” means a fiscal year of Parent and its Consolidated Subsidiaries ending on
December 31 in any calendar year.




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




          “Funded Debt” of any Person means all Debt of such Person that by its terms matures more than
one year after the date of determination or matures within one year from such date but is renewable
or extendible, at the option of such Person, to a date more than one year after such date or arises
under a revolving credit or similar agreement that obligates the lender or lenders to extend credit
during a period of more than one year after such date, including, without limitation, all amounts
of Funded Debt of such Person required to be paid or prepaid within one year after the date of
determination.




          “GAAP” has the meaning specified in Section 1.03.




          “Governmental Authority” means any nation or government, any state, province, city, municipal
entity or other political subdivision thereof, and any governmental, executive, legislative,
judicial, administrative or regulatory agency, department, authority, instrumentality, commission,
board, bureau or similar body, whether federal, state, provincial, territorial, local or foreign.




          “Governmental Authorization” means any authorization, approval, consent, franchise, license,
covenant, order, ruling, permit, certification, exemption, notice, declaration or




 









 







similar right, undertaking or other action of, to or by, or any filing, qualification or registration with, any
Governmental Authority.




          “Guaranteed Debt” means, with respect to any Person, any Obligation or arrangement of such
Person to guarantee or intended to guarantee any Debt, leases, dividends or other payment
Obligations (“primary obligations”) of any other Person (the “primary obligor”) in any manner,
whether directly or indirectly, including, without limitation, (a) the direct or indirect
guarantee, endorsement (other than for collection or deposit in the ordinary course of business),
co making, discounting with recourse or sale with recourse by such Person of the Obligation of a
primary obligor, (b) the Obligation to make take-or-pay or similar payments, if required,
regardless of nonperformance by any other party or parties to an agreement or (c) any
Obligation of such Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor, (ii) to advance or
supply funds (A) for the purchase or payment of any such primary obligation or (B) to maintain
working capital or equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, assets, securities or services
primarily for the purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof. The amount of any
Guaranteed Debt shall be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranteed Debt is made (or, if less, the maximum
amount of such primary obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Guaranteed Debt) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is required to perform
thereunder), as determined by such Person in good faith.




          “Guarantors” means the Subsidiaries of Parent (other than Borrowers) listed on Schedule
III hereto and each other Subsidiary of Parent that shall be required to execute and deliver a
Guaranty pursuant to Section 5.01(j).




          “Guaranty” means the Guaranty made by the Guarantors in favor of the Secured Parties,
substantially in the form of Exhibit E, together with each other guaranty and guaranty
supplement delivered pursuant to Section 5.01(j), in each case as amended, amended and
restated, modified or otherwise supplemented.




          “Hazardous Materials” means (a) any petroleum or petroleum products, by-products or breakdown
products, and all other hydrocarbons, radioactive or nuclear materials, asbestos or
asbestos-containing materials, polychlorinated biphenyls and radon gas, chlorofluorocarbons and all
other ozone-depleting substances and (b) any other chemical, material or substance or waste
designated, classified, prohibited, limited or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.




          “Healthcare Law” means:





     (a) (i) the federal Anti-Kickback Statute (42 U.S.C. §1320a-7b), (ii) the Stark Law (42
U.S.C. §1395nn and §1395(q)), (iii) the civil False Claims Act (31 U.S.C. §3729 et seq.),
(iv) Sections 1320a-7a and 1320a-7b of Title 42 of the United States Code, (v)



 









 






applicable state statutes similar to any of the foregoing and (vi) the regulations promulgated pursuant
to such federal and state statutes;




     (b) the federal Food, Drug & Cosmetic Act (21 U.S.C. §§301 et seq.) and the regulations
promulgated pursuant thereto;




     (c) the Health Insurance Portability and Accountability Act of 1996 (Pub. L. No.
104-191) and the regulations promulgated pursuant thereto;




     (d) laws, rules and regulations governing Medicare and Medicaid;




     (e) the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (Pub. L.
No. 108-173) and the regulations promulgated pursuant thereto;




     (f) quality, safety and accreditation standards and requirements of all applicable
state laws or regulatory bodies;




     (g) any applicable law relating to the Borrowers’ or any Subsidiary’s ownership,
management or operation of a healthcare facility or business, or assets used in connection
therewith;




     (h) any applicable law relating to the billing or submission of claims, collection of
accounts receivable, underwriting the cost of, or provision of management or administrative
services in connection with, any and all of the foregoing, by Parent or any of its
Subsidiaries; and




     (i) any and all other applicable healthcare laws, regulations, manual provisions,
policies and administrative guidance having the force of law with respect to each of (a)
through (h) above, as may be amended from time to time.



          “Hedge Agreements” means interest rate swap, cap or collar agreements, interest rate future or
option contracts, currency swap agreements, currency future or option contracts and other hedging
agreements.




          “Holdco” has the meaning specified in the preamble to this Agreement.




          “Indemnified Party” has the meaning specified in Section 9.04(b).




          “Information” means, all information received from Parent or any of its Subsidiaries relating
to Parent or any of its Subsidiaries or any of their respective businesses, other than any such
information that is available to or in the possession of the Administrative Agent, any Lender or
their Representatives on a non confidential basis prior to disclosure by Parent or any of its
Subsidiaries; provided that, such information was or is clearly identified at the time of delivery
as confidential or that is subsequently classified in a separate communication as confidential.




          “Initial Pledged Debt” has the meaning specified in the Security Agreements.





 









 








          “Initial Pledged Equity” has the meaning specified in the Security Agreements.




          “Intellectual Property Security Agreement” means, collectively, the Canadian Intellectual
Property Security Agreement and the U.S. Intellectual Property Security Agreement.




          “Intercreditor Agreement” means an intercreditor agreement among the Agents, the Prepetition
Agents and the Loan Parties, in substantially the form of Exhibit G hereto.




          “Interest Period” means, for each Term Loan comprising part of the same Borrowing, the period
commencing on the date of such Term Loan, and ending on the last day of the period selected by the
Administrative Borrower pursuant to the provisions below and, thereafter, each subsequent period
commencing on the last day of the immediately preceding
Interest Period and ending on the last day of the period selected by the Administrative
Borrower pursuant to the provisions below. The duration of each such Interest Period shall be one
month; provided, however, that:





     (a) whenever the last day of any Interest Period would otherwise occur on a day other
than a Business Day, the last day of such Interest Period shall be extended to occur on the
next succeeding Business Day, provided, however, that, if such extension would cause the
last day of such Interest Period to occur in the next following calendar month, the last day
of such Interest Period shall occur on the next preceding Business Day; and




     (b) whenever the first day of any Interest Period occurs on a day of an initial
calendar month for which there is no numerically corresponding day in the next succeeding
calendar month, such Interest Period shall end on the last Business Day of such succeeding
calendar month.



          “Interim Order” means the Interim Order pursuant to 11 U.S.C. §§ 105, 361, 362, 363, 364 and
507 (a) approving postpetition financing pursuant to the Facility and the making of Term Loans in
an aggregate amount not to exceed the Interim Order Amount, (b) authorizing use of cash collateral,
(c) granting Liens and providing superpriority administrative expense status, (d) granting adequate
protection, (e) modifying the automatic stay, and (f) scheduling a final hearing with respect to
the Chapter 11 Cases (including the Budget), to be entered on the docket of the Chapter 11 Cases
within three (3) Business Days of the Petition Date.




          “Interim Order Amount” means, at any time, up to $7,500,000, as such amount may be reduced at
or prior to such time pursuant to Section 5.02(e).




          “Internal Revenue Code” means the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder.




          “Investment” in any Person means any loan or advance to such Person, any purchase or other
acquisition of any Equity Interests or Debt or the assets comprising a division or business unit or
a substantial part or all of the business of such Person, any capital contribution to such Person
or any other direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation (or similar transaction)




 









 







and any arrangement pursuant to which the investor incurs Debt of the types referred to in clause (h) or (i) of the
definition of “Debt” in respect of such Person.




          “Kremer Claims” has the meaning specified in Section 3.02(c).




          “Lenders” means the banks, financial institutions and other institutional lenders listed on
the signature pages hereof as Lenders and each Person that shall become a Lender hereunder pursuant
to Section 9.07 for so long as such Lender or Person, as the case may be, shall be a party
to this Agreement as a Lender.




          “Lending Office” means, with respect to any Lender, the office of such Lender specified as its
“Lending Office” opposite its name on Schedule I hereto or in the Assignment and Acceptance
pursuant to which it became a Lender (or, if no such office is specified), such
other office of such Lender as such Lender may from time to time specify in writing to the
Administrative Borrower and the Administrative Agent.




          “Lien” means any lien, security interest, hypothecation or other charge or encumbrance of any
kind, or any other type of preferential arrangement, including, without limitation, the lien or
retained security title of a conditional vendor and any easement, right of way or other encumbrance
on title to real property.




          “Liquidity” means, as of any date, the aggregate amount of all Controlled Cash as of such
date.




          “Liquidity Guidelines” means collectively, the TLC Current System Payment Guidelines and the
TLC Current System Receivables Practices.




          “Loan Documents” means (a) this Agreement, (b) the Notes, (c) the Guaranties, (d) the
Collateral Documents, and (e) the Fee Letter, each of (a) through (e) as amended.




          “Loan Parties” means the Borrowers and the Guarantors.




          “Margin Stock” has the meaning specified in Regulation U.




          “Material Adverse Change” means any material adverse change in the business, condition
(financial or otherwise), operations, performance, assets or liabilities of Parent and its
Subsidiaries, taken as a whole.




          “Material Adverse Effect” means a material adverse effect on (a) the business, condition
(financial or otherwise), operations, performance, assets or liabilities of Parent and its
Subsidiaries, taken as a whole, (b) the rights and remedies of any Agent or any Lender under any
Loan Document or (c) the ability of any Loan Party to perform its Obligations under any Loan
Document to which it is or is to be a party.




          “Maturity Date” means the date (subject to extension in accordance with Section 2.14) that is
the earliest of (a) (i) forty-five (45) days after the date of the entry of the Interim Order if a
Final Order has not been entered by such date, or (ii) one hundred fifty (150) days after the
Petition Date, (b) the effective date of the Plan of Reorganization, (c) the date on which




 









 







a sale or sales of all or substantially all of the Borrowers’ assets is consummated under Section 363 of
the Bankruptcy Code, (d) the date of conversion of any of the Cases to a case under Chapter 7 of
the Bankruptcy Code or any equivalent proceeding in the Canadian Case, (e) except as expressly
contemplated by the Plan Term Sheet, a proposal or liquidation of any or all or substantially all
of the assets of any of the Borrowers or Guarantors under the BIA, (f) the dismissal of any of the
Cases, and (g) approval by the Bankruptcy Court of any debtor-in-possession financing for the
Borrowers or any of its Affiliates (other than the Facility) unless (i) in the event that the Liens
securing such indebtedness are senior to or pari passu with Liens securing the obligations under
the Prepetition Credit Agreement but junior to the Liens securing the Facility, entry into such
financing is consented to by the Required Prepetition Lenders and (ii) in the event that the Liens
securing such indebtedness are senior to or pari passu with the Liens securing the Facility, entry
into such financing is consented to by both the Required Lenders and the Required Prepetition
Lenders.




          “Measurement Period” means each period of four consecutive fiscal quarters of Parent.




          “Medicaid” means, collectively, the healthcare assistance program established by Title XIX of
the Social Security Act (42 U.S.C. §§1396 et seq.) and any statutes succeeding
thereto, and all laws, rules, regulations, manuals, orders or guidelines pertaining to such
program, in each case as the same may be amended, supplemented or otherwise modified from time to
time.




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




          “Medical Reimbursement Programs” shall mean a collective reference to the Medicare and
Medicaid programs and any other health care program operated by or financed in whole or in part by
any foreign or domestic federal, state or local government.




          “Medicare” means, collectively, the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act (42 U.S.C. §§1395 et seq.)
and any statutes succeeding thereto, and all laws, rules, regulations, manuals, orders or
guidelines




 









 







pertaining to such program, in each case as the same may be amended, supplemented or otherwise modified from time to time.




          “Medicare Regulations” means, collectively, all federal statutes (whether set forth in Title
XVIII of the Social Security Act or elsewhere) affecting the health insurance program for the aged
and disabled established by Title XVIII of the Social Security Act and any statutes succeeding
thereto; together with all applicable provisions of all rules, regulations, manuals and orders and
administrative, reimbursement and other guidelines having the force of law of all Governmental
Authorities promulgated pursuant to or in connection with any of the foregoing, as each may be
amended, supplemented or otherwise modified from time to time.




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




          “Multiemployer Plan” means a multiemployer plan, as defined in Section 3(37) of ERISA, to
which any Loan Party or any ERISA Affiliate is making or has an obligation to
make contributions, or has within any of the preceding six plan years made or had an
obligation to make contributions.




          “Multiple Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of
ERISA, that (a) is maintained for employees of any Loan Party or any ERISA Affiliate and at least
one Person other than the Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could reasonably be expected to have
liability under Section 4043, 4064 or 4069 of ERISA in the event of a withdrawal from such plan or
if such plan has been or were to be terminated.




          “Net Cash Proceeds” means:





     (c) with respect to any sale, lease, transfer or other disposition of any asset of
Parent or any of its Subsidiaries (other than any sale, lease, transfer or other disposition
of assets pursuant to clause Section 5.02(e), the excess, if any, of (i) the sum of
cash and Cash Equivalents received in connection with such sale, lease, transfer or other
disposition (including any cash or Cash Equivalents received by way of deferred payment
pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so
received) over (ii) the sum of (A) the principal amount of any Debt (other than Debt under
the Loan Documents) that is secured by such asset and that is required to be repaid in
connection with such sale, lease, transfer or other disposition thereof, (B) the reasonable
and customary out-of-pocket costs, fees, commissions, premiums and expenses incurred by
Parent or its Subsidiaries, (C) federal, state, provincial, foreign and local taxes
reasonably estimated (on a Consolidated basis) to be actually payable within the current or
the immediately succeeding tax year as a result of any gain recognized in connection
therewith and (D) a reasonable reserve (which reserve shall be deposited into an escrow
account with the Collateral Agent) for any purchase price adjustment or any indemnification
payments (fixed and contingent) attributable to the seller’s obligations to the purchaser
undertaken by Parent or any of its Subsidiaries in connection with such sale, lease,
transfer or other disposition (but excluding any purchase price adjustment or any indemnity
that, by its terms, will not under any circumstances be made prior to the final maturity of
the Facility); provided, however, that Net Cash Proceeds shall not



 









 






include any such amounts to the extent such amounts are reinvested in capital assets used or useful in the business
of Parent and its Subsidiaries within 6 months after the date of receipt thereof;




     (b) with respect to the incurrence or issuance of any Debt by Parent or any of its
Subsidiaries (other than Debt incurred or issued pursuant to Section 5.02(b)), the
excess of (i) the sum of the cash and Cash Equivalents received in connection with such
incurrence or issuance over (ii) the underwriting discounts and commissions or other similar
payments, and other out-of-pocket costs, fees, commissions, premiums and expenses incurred
by Parent or any of its Subsidiaries in connection with such incurrence or issuance to the
extent such amounts were not deducted in determining the amount referred to in clause (i);




     (c) with respect to the sale or issuance of any Equity Interests (including, without
limitation, the receipt of any capital contribution) by Parent, the excess of (i) the sum of
the cash and Cash Equivalents received in connection with such sale or issuance
over (ii) the underwriting discounts and commissions or similar payments, and other
out-of-pocket costs, fees, commissions, premiums and expenses, incurred by Parent or any of
its Subsidiaries in connection with such sale or issuance to the extent such amounts were
not deducted in determining the amount referred to in clause (i); provided, however, that
Net Cash Proceeds shall not include any funds received in connection with the exercise of
stock options granted to employees or directors of Parent or any of its Subsidiaries; and




     (d) with respect to any Extraordinary Receipt that is not otherwise included in clause
(a), (b) or (c) above, the sum of the cash and Cash Equivalents received in connection
therewith; provided, however, that Net Cash Proceeds shall not include any such amounts to
the extent such amounts are reinvested in capital assets used or useful in the business of
Parent and its Subsidiaries within 6 months after the date of receipt thereof.



          “Non-Owned Controlled Cash” means, as of any date, all cash (a) which is held in a deposit
account over which a Controlled Loan Party has the exclusive contractual right and unrestricted
power at any time to withdraw such cash, and in the ordinary course does so no less frequently than
weekly, and (b) which, upon such withdrawal and deposit into a deposit account of a Controlled Loan
Party subject to a Control Account Agreement, will then be Controlled Loan Parties Controlled Cash.




          “Note” means a promissory note of the Borrowers payable to the order of any Lender (or at a
Lender’s request, payable to such Lender and its registered assigns), in substantially the form of
Exhibit A hereto, evidencing the indebtedness of the Borrowers to such Lender resulting
from the Term Loan(s) made by such Lender, as amended.




          “Notice of Borrowing” has the meaning specified in Section 2.02(a).




          “NPL” means the National Priorities List under CERCLA.




          “Obligation” means, with respect to any Person, any payment, performance or other obligation
of such Person of any kind, including, without limitation, any liability of such




 









 







Person on any claim, whether or not the right of any creditor to payment in respect of such claim is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged or stayed. Without
limiting the generality of the foregoing, the Obligations of any Loan Party under the Loan
Documents include (a) the obligation to pay principal, interest, charges, expenses, fees,
attorneys’ fees and disbursements, indemnities and other amounts payable by such Loan Party under
any Loan Document, and (b) the obligation of such Loan Party to reimburse any amount in respect of
any of the foregoing that any Lender, in its sole discretion, may elect to pay or advance on behalf
of such Loan Party.




          “Orders” means the Interim Order and the Final Order; and “Order” means whichever of the
Interim Order or the Final Order is then in effect.




          “Other Taxes” has the meaning specified in Section 2.09(b).




          “Owned Cash” means, as of any date, all cash and Cash Equivalents which are (a) legally,
beneficially and exclusively owned by any Controlled Loan Party, (b) held in a deposit account or
securities account of such Controlled Loan Party subject to a Control Account Agreement, (c)
subject to no obligation to segregate or hold in trust for the benefit of third parties and (d)
subject to no Liens other than Liens created under the Loan Documents and the Prepetition Loan
Documents and customary Liens in favor of a bank or other depository institution securing
obligations owed to such bank or other depository institution in respect of or arising out of such
deposit account.




          “Parent” has the meaning specified in the recitals to this Agreement.




          “Patriot Act” means the Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. 107-56, signed into law October
26, 2001.




          “PBGC” means the Pension Benefit Guaranty Corporation (or any successor).




          “Permitted Liens” means such of the following as to which no enforcement, collection,
execution, levy or foreclosure proceeding shall have been commenced (except as are being challenged
in good faith and by proper proceedings by the applicable Loan Party(ies) and for which adequate
reserves in accordance with GAAP have been established on the books of such Loan Party(ies)):
(a) Liens for taxes, assessments and governmental charges or levies to the extent not required to
be paid under Section 5.01(b); (b) Liens imposed by law, such as materialmen’s, mechanics’,
carriers’, workmen’s and repairmen’s Liens and other similar Liens arising in the ordinary course
of business securing obligations that (i) are not overdue for a period of more than 30 days and
(ii) individually or together with all other Permitted Liens outstanding on any date of
determination do not materially adversely affect the use of the property to which they relate;
(c) pledges or deposits in the ordinary course of business to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory obligations; (d) deposits
to secure the performance of bids, trade contracts and leases (other than Debt), statutory
obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds
and other obligations of a like nature incurred in the ordinary course of business; (e) Liens
securing judgments (or the payment of money) not constituting a




 









 







Default under Section 6.01(f) or securing appeal or other surety bonds related to such judgments; and (f) easements,
rights of way and other similar encumbrances on title to real property that do not render title to
the property encumbered thereby unmarketable or materially adversely affect the use of such
property for its present purposes.




          “Person” means an individual, partnership, corporation (including a business trust), limited
liability company, joint stock company, trust, unincorporated association, joint venture or other
entity, or a government or any political subdivision or agency thereof.




          “Petition Date” has the meaning specified in the recitals hereto.




          “Plan” means a Single Employer Plan, a Multiple Employer Plan or a Canadian Plan.




          “Plan of Reorganization” means the plan of reorganization for the Borrowers, in form and
substance satisfactory to the Required Lenders, that is consistent in all material respects with
the terms of the Plan Support Agreement and Plan Term Sheet.




          “Plan Support Agreement” means that certain plan support agreement among the Loan Parties and
the Consenting Lenders.




          “Plan Term Sheet” means the Plan Term Sheet attached as Exhibit A to the Plan Support
Agreement.




          “Platform” has the meaning specified in Section 9.02(b).




          “Pledged Debt” has the meaning specified in the Security Agreements.




          “Pledged Equity” has the meaning specified in the Security Agreements.




          “PPSA” means the Personal Property Security Act (Ontario), the Civil Code of Quebec or any
other applicable Canadian federal or provincial statute pertaining to the granting, perfecting,
publication, priority or ranking of security interests, liens, hypothecs on property, whether real,
personal, mixed, moveable or immoveable, and any successor statutes, together with any regulations
thereunder, in each case as in effect from time to time, and any reference to any section of any
such statute shall be construed to also refer to any successor section thereof.




          “Preferred Interests” means, with respect to any Person, Equity Interests issued by such
Person that are entitled to a preference or priority over any other Equity Interests issued by such
Person upon any distribution of such Person’s property and assets, whether by dividend or upon
liquidation.




          “Prepetition Agents” has the meaning specified in the recitals to this Agreement.




          “Prepetition Borrower” has the meaning specified in the recitals to this Agreement.




 









 








          “Prepetition Credit Agreement” has the meaning specified in the recitals to this Agreement.




          “Prepetition Loan Documents” means the Prepetition Credit Agreement and all security and other
documents relating thereto or entered into in connection therewith.




          “Prepetition Guarantors” has the meaning specified in the recitals to this Agreement.




          “Prepetition Lender Debt” has the meaning specified in the recitals to this Agreement.




          “Prepetition Lenders” has the meaning specified in the recitals to this Agreement.




          “Recognition Order” has the meaning specified in Section 3.01(l).




          “Redeemable” means, with respect to any Equity Interest, any such Equity Interest that (a) the
issuer has undertaken to redeem at a fixed or determinable date or dates, whether by operation of a
sinking fund or otherwise, or upon the occurrence of a condition not solely within the control of
the issuer or (b) is redeemable at the option of the holder.




          “Register” has the meaning specified in Section 9.07(d).




          “Registrar” has the meaning specified in Section 9.07(d).




          “Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System, as
in effect from time to time.




          “Representatives” has the meaning specified in Section 9.09.




          “Required Lenders” means, at any time, Lenders owed or holding at least a majority in interest
of the sum of (a) the aggregate outstanding principal amount of the Term Loans and (b) prior to the
Final Order Funding Date, the aggregate unfunded portion (if any) of the Total Commitments at such
time; provided, however, that if any Lender shall be a Defaulting Lender at such time, there shall
be excluded from the determination of Required Lenders at such time (i) the aggregate principal
amount of the Term Loans owing to such Lender (in its capacity as a Lender) and outstanding at such
time and (ii) prior to the Final Order Funding Date, the aggregate unfunded portion (if any) of the
Commitments of such Lender (in its capacity as a Lender) at such time.




          “Required Prepetition Lenders” shall have the same meaning as the term “Required Lenders” in
the Prepetition Credit Agreement.




          “Requirement of Law” shall mean, as to any Person, (a) the partnership agreement, charter,
certificate of incorporation, articles of incorporation, bylaws, operating agreement or other
organizational or governing documents of such Person, (b) any federal, state or local law, treaty,
ordinance, rule or regulation, and (c) any order, decree or determination of a




 









 







court, arbitrator 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.




          “Responsible Officer” shall mean, as to any Person, either (a) its president, chief executive
officer or chief financial officer, or (b) with respect to financial matters, its president, chief
executive officer or chief financial officer.




          “Restructuring Monitor” means Mr. Robert Troisio of Morris Anderson & Associates Ltd.




          “S&P” means Standard & Poor’s, a division of the McGraw Hill Companies, Inc.




          “Secured Obligations” has the meaning specified in Section 2 of the Security Agreements.




          “Secured Parties” means the Agents and the Lenders.




          “Securities Account” has the meaning specified in the Security Agreements.




          “Securities Account Control Agreement” has the meaning specified in the Security Agreements.




          “Security Agreements” means, collectively, the Canadian Security Agreement and the U.S.
Security Agreement.




          “Securitization” has the meaning specified in Section 9.07(j).




          “Securitization Liabilities” has the meaning specified in Section 9.07(j).




          “Securitization Party” has the meaning specified in Section 9.07(j).




          “Securitizing Party” has the meaning specified in Section 9.07(j).




          “Single Employer Plan” means a single employer plan, as defined in Section 4001(a)(15) of
ERISA, (a) that is or was maintained for employees of any Loan Party or any ERISA Affiliate and no
Person other than the Loan Parties and the ERISA Affiliates or (b) to which any Loan Party or any
ERISA Affiliate contributes or has any obligation to contribute, or (c) with respect to which any
Loan Party could have reasonably be expected to have any liability, either actual or contingent,
under Section 4062 or 4069 of ERISA in the event such plan has been or were to be terminated.




          “Special Counsel” means Bingham McCutchen LLP or such other counsel as may be approved by the
Required Lenders.




          “Subordinated Debt” means Debt subordinated to the obligations under this Agreement on terms
reasonably satisfactory to the Required Lenders.




          “Subsidiary” of any Person means any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (a) the issued




 









 







and outstanding capital stock having ordinary voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon the occurrence of any
contingency), (b) the interest in the capital or profits of such partnership, joint venture or
limited liability company or (c) the beneficial interest in such trust or estate is at the time
directly or indirectly owned or controlled by such Person, by such Person and one or more of its
other Subsidiaries or by one or more of such Person’s other Subsidiaries.




          “Superpriority Claim” means a claim against a Borrower or its estate in the Chapter 11 Cases
which is an administrative expense claim having priority over (a) any and all allowed
administrative expenses, and (b) unsecured claims now existing or hereafter arising, including,
without limitation, administrative expenses of the kind specified in Sections 105, 326, 328, 330,
331, 365, 503(a), 503(b), 507(b), 546(c), 546(d), 726 (to the extent permitted by law), 1113 or
1114 of the Bankruptcy Code, and any other provision of the Bankruptcy Code (including, subject to
entry of the Final Order, Section 506(c)).




          “Synthetic Debt” means, with respect to any Person, without duplication of any clause within
the definition of “Debt,” all (a) Obligations of such Person under any lease that is treated as an
operating lease for financial accounting purposes and a financing
lease for tax purposes (i.e., a “synthetic lease”), (b) Obligations of such Person in respect of
transactions entered into by such Person, the proceeds from which would be reflected on the
financial statements of such Person in accordance with GAAP as cash flows from financings at the
time such transaction was entered into (other than as a result of the issuance of Equity Interests)
and (c) Obligations of such Person in respect of other transactions entered into by such Person
that are not otherwise addressed in the definition of “Debt” or in clause (a) or (b) above that are
intended to function primarily as a borrowing of funds (including, without limitation, any minority
interest transactions that function primarily as a borrowing).




          “Taxes” has the meaning specified in Section 2.09(a).




          “Term Loan” has the meaning specified in Section 2.01.




          “Term Loan Percentage” means as to any Lender (a) at any time before the Closing Date, the
percentage which such Lender’s Commitment then constitutes of the Total Commitments, (b) at any
time after the Closing Date but before the Final Order Funding Date, the percentage which the sum
of (i) the aggregate principal amount of such Lender’s Term Loans then outstanding and (ii) the
unfunded portion (if any) of such Lender’s Commitments then constitutes of the sum of (A) the
aggregate principal amount of the Term Loans then outstanding and (B) the unfunded portion (if any)
of the Total Commitments on such date), and (c) at any time after the Final Order Funding Date, the
percentage which the aggregate principal amount of such Lender’s Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then outstanding.




          “Total Commitments” means the aggregate Commitments of all Lenders.




          “TLC Current System Payment Guidelines” means the payment guidelines maintained by Parent and
its Subsidiaries as of the date hereof with respect to the terms and conditions governing payments
to be made to trade creditors.




 









 








          “TLC Current System Receivables Practices” means the practices maintained by Parent and its
Subsidiaries as of the date hereof with respect to the terms on which receivables are settled,
compromised and/or paid.




          “U.S. Debtors” means Holdco and TLC Management.




          “U.S. Intellectual Property Security Agreement” means the Intellectual Property Security
Agreement granted by certain Loan Parties in favor of the Collateral Agent for the Secured Parties
substantially in the form of Exhibit A to the U.S. Security Agreement.




          “U.S. Security Agreement” has the meaning specified in Section 3.01(a)(iii).




          “Voting Interests” means shares of capital stock issued by a corporation, or equivalent Equity
Interests in any other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even if the right so to vote has been suspended by the happening of such
a contingency.




          “Working Capital” shall mean the remainder of (a) Current Assets less Cash Equivalents minus
(b) Current Liabilities less Debt referred to in subclause (a) of the definition thereof due within
12 months of the date of determination.




          SECTION 1.02. Computation of Time Periods; Other Definitional Provisions. In this
Agreement and the other Loan Documents in the computation of periods of time from a specified date
to a later specified date, the word “from” means “from and including” and the words “to” and
“until” each mean “to but excluding.” References in the Loan Documents to any agreement or
contract “as amended” shall mean and be a reference to such agreement or contract as amended,
amended and restated, supplemented or otherwise modified from time to time in accordance with its
terms.




          SECTION 1.03. Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles consistent with
those applied in the preparation of the financial statements referred to in Section 4.01(g)
(“GAAP”).




ARTICLE II




AMOUNT AND TERMS OF THE TERM LOANS



          SECTION 2.01. Term Loan Commitments. Each Lender severally agrees, on the terms and
conditions hereinafter set forth, to make a term loan or loans (each, a “Term Loan”) to the
Borrowers in two (2) advances, which shall, in each case, be deposited into the DIP Proceeds
Controlled Account. The Borrowers shall only be entitled to withdraw amounts from the DIP Proceeds
Controlled Account if (a) the aggregate amount of Controlled Cash in all accounts (other than the
DIP Proceeds Controlled Account held by the Borrowers (whether or not subject to a Control Account
Agreement) is less than $3,000,000 at such time, (b) no Default or Event of Default has occurred
and is continuing (other than with respect to the initial advance, any Default or Event of Default
arising solely as a result of a breach of Section 5.04(b) hereof), and (c) the





 









 







Administrative Agent shall have received a certificate from the Chief Financial Officer of the Administrative Borrower,
in form and substance reasonably satisfactory to the Required Lenders, certifying as to the
aggregate amount of Controlled Cash in all accounts (other than the DIP Proceeds Controlled
Account) held by the Borrowers (whether or not subject to a Control Account Agreement). The first
advance of Term Loans shall be made on the Closing Date in an aggregate amount for each Lender
equal to such Lender’s Term Loan Percentage of the Interim Order Amount, but in no event shall such
amount exceed such Lender’s Commitment. The second and final advance of Term Loans shall be made
on the Final Order Funding Date in an aggregate amount for each Lender equal to such Lender’s Term
Loan Percentage of the Final Order Amount; provided, that with respect to each Lender, the
aggregate amount of the Term Loans made pursuant to this sentence and the previous sentence shall
not exceed such Lender’s Commitment. Each Term Loan may be repaid or prepaid in accordance with
the provisions hereof, but once repaid or prepaid may not be reborrowed.




          SECTION 2.02. Making the Term Loans. (a) Each Borrowing shall be made on notice,
given not later than 12:00 p.m. (New York City time) on the date of the hearing for approval of the
Interim Order or the Final Order, as the case may be, by the Administrative Borrower to the
Administrative Agent, which shall give to each Lender prompt notice thereof by
telecopier or electronic communication. Each such notice of a Borrowing (a “Notice of
Borrowing”) shall be by telephone, confirmed immediately in writing, or by telecopier or electronic
communication, in substantially the form of Exhibit B hereto, specifying therein the
requested Interim Order Amount in the case of the Borrowing on the Closing Date or Final Order
Amount in the case of the Borrowing on the Final Order Funding Date. Each Lender shall, before
11:00 a.m. (New York City time) on the date of such Borrowing, make available for the account of
its Lending Office to the Administrative Agent at the Administrative Agent’s Account, in same day
funds, such Lender’s ratable portion of such Borrowing in accordance with the respective
Commitments under the Facility of the Lenders. After the Administrative Agent’s receipt of such
funds and upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrowers by transfer of such funds to
the DIP Proceeds Controlled Account in like funds as received.




          (b) Each Notice of Borrowing shall be irrevocable and binding on the Borrowers. The Borrowers
shall indemnify each Lender against any loss, cost or expense incurred by such Lender as a result
of any failure to fulfill on or before the date for such Borrowing the applicable conditions set
forth in Article III, including, without limitation, any loss (including loss of
anticipated profits), cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Term Loans to be made by such Lender as
part of such Borrowing when such Term Loans, as a result of such failure, is not made on such date.




          (c) Unless the Administrative Agent shall have received notice from a Lender prior to the date
of any Borrowing that such Lender will not make available to the Administrative Agent such Lender’s
ratable portion of such Borrowing, the Administrative Agent may assume that such Lender has made
such portion available to the Administrative Agent on the date of such Borrowing in accordance with
subsection (a) of this Section 2.02, and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrowers on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such ratable




 









 







portion available to the Administrative Agent, such Lender and the Borrowers severally agree to repay or pay to the
Administrative Agent forthwith on demand such corresponding amount and to pay interest thereon, for
each day from the date such amount is made available to the Borrowers until the date such amount is
repaid or paid to the Administrative Agent, at (i) in the case of the Borrowers, the interest rate
applicable at such time under Section 2.05 to Term Loans comprising such Borrowing and (ii)
in the case of such Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such Lender’s Term Loan as
part of such Borrowing for all purposes.




          (d) The failure of any Lender to make the Term Loans to be made by it as part of any Borrowing
shall not relieve any other Lender of its obligation, if any, hereunder to make its Term Loans on
the date of such Borrowing, but no Lender shall be responsible for the failure of any other Lender
to make the Term Loans to be made by such other Lender on the date of any Borrowing.




          SECTION 2.03. Repayment of Term Loans. The Borrowers shall repay to the
Administrative Agent for the ratable account of the Lenders the aggregate outstanding principal
amount of the Term Loans on the Maturity Date (or on such earlier date on which the Term Loans
become due and payable pursuant to Article VI), together with any and all accrued and
unpaid interest thereon (which amounts shall be reduced as a result of the application of
prepayments in accordance with Section 2.04).




          SECTION 2.04. Prepayments. (a) Optional. Any Borrower may, upon at least
one Business Day’s notice to the Administrative Agent stating the proposed date and aggregate
principal amount of the prepayment, and if such notice is given, the Borrowers shall prepay the
outstanding aggregate principal amount of the Term Loans comprising part of the same Borrowing in
whole or ratably in part, together with accrued interest to the date of such prepayment on the
aggregate principal amount prepaid; provided, however, that (x) each partial prepayment shall be in
an aggregate principal amount of $500,000 or an integral multiple of $500,000 in excess thereof and
(y) if any prepayment is made on a date other than the last day of an Interest Period for such Term
Loan, the Borrowers shall also pay any amounts owing pursuant to
Section 9.04(c).




          (b) Mandatory. (i) If any Loan Party or any of its Subsidiaries Disposes of any
property or assets, including, without limitation, any of the Canadian Refractive Centers, whether
pursuant to a sale under Section 363 of the Bankruptcy Code or otherwise (other than any
Disposition of any property or assets permitted by Section 5.02(e)) and sales or issuances by
Parent of its Equity Interests referred to in clause (ii) below), the Borrowers shall prepay an
aggregate principal amount of Term Loans equal to 100% of all such Net Cash Proceeds immediately
upon receipt thereof by such Loan Party or such Subsidiary. The Interim Order Amount and the Final
Order Amount, as applicable, shall be reduced by an amount equal to the amount of Net Cash Proceeds
from any sale of property or assets described in this Section 2.04(b)(i) in excess of the
amount applied to reduce the aggregate outstanding amount of the Term Loans to zero, unless
otherwise agreed by the Required Lenders.





          (ii) Upon the sale or issuance by any Loan Party or any of its Subsidiaries of any of
its Equity Interests (other than sales or issuances of Equity



 









 






Interests in connection with customary compensation or benefit programs), the Borrowers shall prepay an aggregate
principal amount of Term Loans equal to 100% of all Net Cash Proceeds received therefrom
immediately upon receipt thereof.




          (iii) Upon the incurrence or issuance by any Loan Party or any of its Subsidiaries of
any Indebtedness (other than Indebtedness expressly permitted to be incurred or issued
pursuant to Section 5.02(b)), the Borrowers shall prepay an aggregate principal
amount of Term Loans equal to 100% of all Net Cash Proceeds received therefrom immediately
upon receipt thereof by such Loan Party or such Subsidiary.




          (iv) Upon the receipt of any proceeds from an Extraordinary Receipt not otherwise
included in this Section 2.04(b), the Borrowers shall prepay an aggregate principal
amount of Term Loans equal to 100% of all Net Cash Proceeds received therefrom immediately
upon receipt thereof by such Loan Party or such Subsidiary.




          (v) All prepayments
under this subsection (b) shall be made together with (A) accrued
interest to the date of such prepayment on the principal amount prepaid, and (B) any
amounts owing pursuant to Section 9.04(c).




          (vi) Notwithstanding anything contained herein to the contrary, Section
2.04(b)(i) – (iv) shall not apply to any of the following transactions:




            (A) incurrence of trade payables;




            (B) vendor or leasehold financing; or




            (C) distributions or dividends paid to minority partners or received from
majority owners governed by existing operating agreements or practice,



     in the case of each of (A), (B), and (C), in compliance with the Budget (subject to the
proviso in Section 5.04(a)).



          SECTION 2.05. Interest. (a) Scheduled Interest. The Borrowers shall jointly
and severally pay interest on the unpaid principal amount of each Term Loan owing to each Lender
from the date of such Term Loan until such principal amount shall be paid in full at a rate per
annum equal at all times during each Interest Period for such Term Loan to the sum of (A) the
Eurodollar Rate for such Interest Period for such Term Loan plus (B) ten percent (10.00%) per
annum, payable in cash in arrears on the last day of such Interest Period and the date such Term
Loan shall be paid in full.




          (b) Default Interest. Upon the occurrence and during the continuance of an Event of
Default, the principal amount of all Term Loans and all other due and unpaid Obligations shall bear
interest (“Default Interest”) at a rate per annum equal at all times to 2.00% per annum above the
rate per annum described in Section 2.05(a). All such interest shall be payable on demand
by the Required Lenders in cash.




 









 








          (c) Notice of Interest Period and Interest Rate. Promptly after receipt of a Notice
of Borrowing pursuant to Section 2.02(a), or a notice of selection of an Interest Period
pursuant to the terms of the definition of “Interest Period,” the Administrative Agent shall give
notice to the Administrative Borrower and each Lender of the applicable Interest Period and the
interest rate determined by the Administrative Agent for purposes of clause (a) above.




          SECTION 2.06. Fees. The Borrowers jointly and severally agree to pay to the
Administrative Agent, for the pro rata accounts of the Lenders, (a) an exit fee (the “Exit Fee”)
equal to 2.00% of the aggregate principal amount of the Facility on the Closing Date, payable on
the earlier of (i) the Maturity Date, and (ii) the date on which the Facility is paid in full and
all Commitments of the Lenders are terminated in full, (b) an extension fee (the “Extension Fee”)
equal to 2.00% of the outstanding amount of the Facility, payable on any date the Maturity Date is
extended pursuant to Section 2.14 hereof or otherwise, and (c) an unused fee equal to 0.75%
of the average daily undrawn amount of the Facility during each calendar quarter, payable in
arrears quarterly on the last day of each March, June, September, and December, commencing December
31, 2009, and on the Maturity Date. The Borrowers further agree jointly and severally to pay to
the Administrative Agent for its own account or, as the case may be, for the account of the
Lenders, the fees in the amounts and on the dates from time to time agreed to in writing by the
Administrative Borrower on the one hand and the Administrative Agent and/or any Lenders, on the
other.




          SECTION 2.07. Increased Costs, Etc. (a) If, due to either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other governmental authority (whether or not having
the force of law), in each case after the date of this Agreement or, if later, the date on which
the affected Lender became a Lender under this Agreement, there shall be any increase in the cost
to any Lender of agreeing to make or of making, funding or maintaining Term Loans (excluding, for
purposes of this Section 2.07, any such increased costs resulting from (A) Taxes or Other
Taxes (as to which Section 2.09 shall govern) and (B) changes in the basis of taxation of
overall net income or overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender is organized or has its Lending Office or any political
subdivision thereof), then the Borrowers shall from time to time, upon written demand by such
Lender to the Administrative Borrower (with a copy of such demand to the Administrative Agent), pay
to the Administrative Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost; and provided, however, that the Borrowers shall not
be responsible for costs under this Section 2.07(a) arising more than 180 days prior to
receipt by the Administrative Borrower of the demand from the affected Lender pursuant to this
Section 2.07(a); and provided further that a Lender claiming additional amounts under this
Section 2.07(a) agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Lending Office if the making of such a
designation would avoid the need for, or reduce the amount of, such increased cost that may
thereafter accrue and would not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to the amount of such increased cost, submitted
to the Administrative Borrower by such Lender, shall be conclusive and binding for all purposes,
absent manifest error.





 









 








          (b) If any Lender determines that compliance with any law or regulation or any guideline or
request from any central bank or other governmental authority (whether or not having the force of
law), in each case after the date of this Agreement or, if later, the date on which the affected
Lender became a Lender under this Agreement, affects or would affect the amount of capital required
or expected to be maintained by such Lender or any Person controlling such Lender and that the
amount of such capital is increased by or based upon the existence of such Lender’s commitment to
lend hereunder, then, upon written demand by such Lender to the Administrative Borrower (with a
copy of such demand to the Administrative Agent), the Borrowers shall pay to the Administrative
Agent for the account of such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender in the light of such circumstances, to the extent that
such Lender reasonably determines such increase in capital to be allocable to the existence of such
Lender’s commitment to lend hereunder; provided, however, that the Borrowers shall not be
responsible for costs under this Section 2.07(b) arising more than 180 days prior to
receipt by the Administrative Borrower of the demand from the affected Lender pursuant to this
Section 2.07(b). A certificate as to such amounts submitted to the Administrative Borrower
by such Lender shall be conclusive and binding for all purposes, absent manifest error.




          (c) Notwithstanding any other provision of this Agreement, if the introduction of or any
change in or in the interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any Lender or its
Lending Office to perform its obligations hereunder to make Term Loans as to which the rate of
interest is determined by reference to the Eurodollar Rate or to continue to fund or maintain
Term Loans hereunder as to which the rate of interest is determined by reference to the Eurodollar
Rate, then, on notice thereof and demand therefor by such Lender to the Administrative Borrower
through the Administrative Agent, (i) the obligation of such Lender to make Term Loans as to which
the rate of interest is determined with reference to the Eurodollar Rate shall forthwith be
suspended until the Administrative Agent shall notify the Administrative Borrower that such Lender
has determined that the circumstances causing such suspension no longer exist (but such Lender
shall make Term Loans in an amount equal to the amount of Term Loans that would have been made by
such Lender at such time in the absence of such circumstances and such Term Loans shall bear
interest at the rate equal to such Lender’s actual costs of making or maintaining such Term Loans
plus ten percent (10.00%) per annum), and (ii) such Lender’s Term Loans then bearing interest at a
rate of interest determined with reference to the Eurodollar Rate, if any, shall be converted
automatically to Term Loans bearing interest at the rate equal to such Lender’s actual costs of
making or maintaining such Term Loans plus ten percent (10.00%) per annum on the last day of each
Interest Period applicable to such Term Loans or within such earlier period as may be required by
law; provided, however, that, before making any such demand, such Lender agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory restrictions) to designate a
different Lending Office if the making of such a designation would allow such Lender or its Lending
Office to continue to perform its obligations to make Term Loans or to continue to fund or maintain
Term Loans and would not, in the commercially reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender.




          (d) In the event that any Lender demands payment of costs or additional amounts pursuant to
this Section 2.07 or Section 2.09 or asserts, pursuant to Section 2.07(c),
that




 









 







it is unlawful for such Lender to make Term Loans bearing interest at a rate of interest
determined with reference to the Eurodollar Rate or becomes a Defaulting Lender then (subject to
such Lender’s right to rescind such demand or assertion within ten (10) days after the notice from
the Administrative Borrower referred to below) the Administrative Borrower may, upon twenty (20)
days’ prior written notice to such Lender and the Administrative Agent, elect to cause such Lender
to assign its Term Loans and Commitments in full to one or more Persons selected by the
Administrative Borrower so long as (i) each such Person satisfies the criteria of an Eligible
Assignee and is reasonably satisfactory to the Administrative Agent, (ii) such Lender receives
payment in full in cash of the outstanding principal amount of all Term Loans made by it and all
accrued and unpaid interest thereon and all other amounts due and payable to such Lender as of the
date of such assignment (including, without limitation, amounts owing pursuant to this Section
2.07 and Section 2.09) and (iii) each such assignee agrees to accept such assignment
and to assume all obligations of such Lender hereunder in accordance
with Section 9.07.




          SECTION 2.08. Payments and Computations. (a) The Borrowers shall make each payment
hereunder and under the other Loan Documents, irrespective of any right of counterclaim or set-off
(except as otherwise provided in Section 2.12), not later than 11:00 a.m. (New York City
time) on the day when due in U.S. dollars to the Administrative Agent at the Administrative Agent’s
Account in same day funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The Administrative Agent
will promptly thereafter cause like funds to
be distributed (i) if such payment by the Borrowers is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the other Loan Documents
to more than one Lender, to such Lenders for the account of their respective Lending Offices
ratably in accordance with the amounts of such respective Obligations then payable to such Lenders
and (ii) if such payment by the Borrowers is in respect of any Obligation then payable hereunder to
one Lender, to such Lender for the account of its Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to Section
9.07(d), from and after the effective date of such Assignment and Acceptance, the
Administrative Agent shall make all payments hereunder and under the other Loan Documents in
respect of the interest assigned thereby to the assignee thereunder, and the parties to such
Assignment and Acceptance shall make all appropriate adjustments in such payments for periods prior
to such effective date directly between themselves.




          (b) The Borrowers hereby authorize each Lender and each of its Affiliates, if and to the
extent payment owed to such Lender is not made when due hereunder or under the other Loan Documents
to charge from time to time, to the fullest extent permitted by law, against any or all of the
Borrowers’ accounts with such Lender or such Affiliate any amount so due.




          (c) All computations of interest shall be made by the Administrative Agent based on the
Eurodollar Rate or the Federal Funds Rate, as applicable, and each computation of interest or of
fees, as applicable, shall be made by the Administrative Agent on the basis of a year of 360 days,
in each case for the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each




 









 







determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.




          (d) For the purposes of the Interest Act (Canada) and disclosure thereunder, whenever any
interest or any fee to be paid hereunder or in connection herewith is to be calculated on the basis
of a 360-day or 365-day year, the yearly rate of interest to which the rate used in such
calculation is equivalent is the rate so used multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by 360 or 365, as applicable. The
rates of interest under this Agreement are nominal rates, and not effective rates or yields. The
principle of deemed reinvestment of interest does not apply to any interest calculation under this
Agreement.




          (e) If any provision of this Agreement would oblige a Canadian Loan Party to make any payment
of interest or other amount payable to any Secured Party in an amount or calculated at a rate which
would be prohibited by law or would result in a receipt by that Secured Party of “interest” at a
“criminal rate” (as such terms are construed under the Criminal Code (Canada)), then,
notwithstanding such provision, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may be, that would not be
so prohibited by applicable law or so result in a receipt by that Secured Party of “interest” at a
“criminal rate”, such adjustment to be effected, to the extent necessary (but only to the extent
necessary), as follows:





          (i) first, by reducing the amount or rate of interest; and




          (ii) thereafter, by reducing any fees, commissions, costs, expenses, premiums and
other amounts required to be paid which would constitute interest for purposes of section
347 of the Criminal Code (Canada).



          (f) Whenever any payment hereunder or under the other Loan Documents shall be stated to be due
on a day other than a Business Day, such payment shall be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of payment of
interest; provided, however, that, if such extension would cause payment of interest on or
principal of Term Loans to be made in the next following calendar month, such payment shall be made
on the next preceding Business Day.




          (g) Unless the Administrative Agent shall have received notice from the Administrative
Borrower prior to the date on which any payment is due to any Lender hereunder that the Borrowers
will not make such payment in full, the Administrative Agent may assume that the Borrowers have
made such payment in full to the Administrative Agent on such date and the Administrative Agent
may, in reliance upon such assumption, cause to be distributed to each such Lender on such due date
an amount equal to the amount then due such Lender. If and to the extent the Borrowers shall not
have so made such payment in full to the Administrative Agent, each such Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at the Federal Funds Rate.





 











 





          (h) If the Administrative Agent receives funds for application to the Obligations of the Loan
Parties under or in respect of the Loan Documents under circumstances for which the Loan Documents
do not specify the manner in which, such funds are to be applied, unless otherwise directed by the
Lenders, the Administrative Agent, after the payment of all expenses due under the Loan Documents,
shall distribute such funds to each of the Lenders in accordance with such Lender’s pro rata share
of the aggregate principal amount of all Term Loans outstanding at such time, in payment of such of
the outstanding Term Loans or other Obligations then owing to such Lender.




          SECTION 2.09. Taxes. (a) Any and all payments by any Loan Party to or for the
account of any Lender or any Agent hereunder or under any other Loan Document shall be made, in
accordance with Section 2.08 or the applicable provisions of such other Loan Document, if
any, free and clear of and without deduction for any and all present or future taxes, levies,
imposts, fees, deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and each Agent, taxes that are imposed on its overall net
income by the United States, including any branch profit taxes, and taxes that are imposed on its
overall net income (and franchise taxes imposed in lieu thereof), including any branch profits
taxes, by the state or foreign jurisdiction under the laws of which such Lender or such Agent, as
the case may be, is organized or any political subdivision thereof and, in the case of each Lender,
taxes that are imposed on its overall net income (and franchise taxes imposed in lieu thereof),
including any branch profits taxes by the state or foreign jurisdiction of such Lender’s Lending
Office or any political subdivision thereof or where such Lenders are otherwise conducting business
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings and liabilities in
respect of payments hereunder or under any other Loan Document being hereinafter referred to as
“Taxes”). If any Loan Party shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder or under any other Loan Document to any Lender or any Agent, (i) the sum
payable by such Loan Party shall be increased as may be necessary so that after such Loan Party and
the Administrative Agent have made all required deductions (including deductions applicable to
additional sums payable under this Section 2.09) such Lender or such Agent, as the case may
be, receives an amount equal to the sum it would have received had no such deductions been made,
(ii) such Loan Party shall make all such deductions and (iii) such Loan Party shall pay the full
amount deducted to the relevant taxation authority or other authority in accordance with applicable
law.




          (b) In addition, each Loan Party shall pay any present or future stamp, documentary, excise,
property, intangible, mortgage recording or similar taxes, charges or levies that arise from any
payment made by such Loan Party hereunder or under any other Loan Documents or from the execution,
delivery or registration of, performance under, or otherwise with respect to, this Agreement or the
other Loan Documents (hereinafter referred to as “Other Taxes”).




          (c) The Loan Parties shall indemnify each Lender and each Agent for and hold them harmless
against the full amount of Taxes and Other Taxes, and for the full amount of Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 2.09, imposed on or paid
by such Lender or such Agent (as the case may be) and any liability (including penalties, additions
to tax, interest and expenses) arising therefrom or with respect thereto, whether or not such
amounts were correctly or legally imposed by the relevant






 









 







Governmental Authority. This indemnification shall be made within 30 days from the date such
Lender or such Agent (as the case may be) makes written demand therefor.




          (d) Within 30 days after the date of any payment of Taxes, the appropriate Loan Party shall
furnish to the Administrative Agent, at its address referred to in Section 9.02, the
original or a certified copy of a receipt evidencing such payment, to the extent such a receipt is
issued therefor, or other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the other Loan Documents by or
on behalf of a Loan Party through an account or branch outside the United States or by or on behalf
of a Loan Party by a payor that is not a United States person, if such Loan Party determines that
no Taxes are payable in respect thereof, such Loan Party shall furnish, or shall cause such payor
to furnish, to the Administrative Agent, at such address, an opinion of counsel acceptable to the
Administrative Agent stating that such payment is exempt from Taxes. For purposes of subsections
(d) and (e) of this Section 2.09, the terms “United States” and “United States person”
shall have the meanings specified in Section 7701 of the Internal Revenue Code.




          (e) Each Lender entitled to an exemption from, or reduction or, withholding tax shall, on or
prior to the date of its execution and delivery of this Agreement in the case of each Lender party
to this Agreement as of the date hereof and on the date of the Assignment and Acceptance pursuant
to which it becomes a Lender in the case of each other Lender, and from time to time thereafter as
reasonably requested in writing by the Administrative Borrower (but only so long thereafter as such
Lender remains lawfully able to do so), provide each of the Administrative Agent and the
Administrative Borrower with two original Internal Revenue Service Forms W-8ECI or W-8BEN or (in
the case of a Lender that has certified in writing to the Administrative Agent that it is not (i) a
“bank” (as defined in Section 881(c)(3)(A) of the Internal Revenue Code), (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of any Loan
Party or (iii) a controlled foreign corporation related to any Loan Party (within the meaning of
Section 864(d)(4) of the Internal Revenue Code)), Internal Revenue Service Form W-8BEN, as
appropriate, or any successor or other form prescribed by the Internal Revenue Service, or any such
form or forms as may be required under the laws of any jurisdiction other than the United States as
a condition to exemption from, or reduction of, withholding tax in such jurisdiction, certifying
that such Lender is exempt from or entitled to a reduced rate of United States withholding tax on
payments pursuant to this Agreement or any other Loan Document or, in the case of a Lender that has
certified that it is not a “bank” as described above, certifying that such Lender is a foreign
corporation, partnership, estate or trust. If the forms provided by a Lender at the time such
Lender first becomes a party to this Agreement indicate a United States or other interest
withholding tax rate, as applicable, in excess of zero, withholding tax at such rate shall be
considered excluded from Taxes unless and until such Lender provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms; provided, however, that if, at
the effective date of the Assignment and Acceptance pursuant to which a Lender becomes a party to
this Agreement, the Lender assignor was entitled to payments under subsection (a) of this
Section 2.09 in respect of United States withholding tax with respect to interest paid at
such date, then, to such extent, the term Taxes shall include (in addition to withholding taxes
that may be imposed in the future or other amounts otherwise includable in Taxes) withholding tax,
if any, applicable with respect to the Lender assignee on such date. If any form or document
referred to






 









 







in this subsection (e) requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof by Internal
Revenue Service Form W-8BEN or W-8ECI or the related certificate described above, or any forms
required by any jurisdiction other than the United States that the applicable Lender reasonably
considers to be confidential, such Lender shall give notice thereof to the Administrative Borrower
and shall not be obligated to include in such form or document such confidential information.




          (f) For any period with respect to which a Lender has failed to provide the Administrative
Borrower with the appropriate form, certificate or other document described in subsection (e) above
(other than if such failure is due to a change in law, or in the interpretation or application
thereof, occurring after the date on which a form, certificate or other document originally was
required to be provided or if such form, certificate or other document otherwise is not required
under subsection (e) above), such Lender shall not be entitled to indemnification under subsection
(a) or (c) of this Section 2.09 with respect to Taxes imposed by the United States by
reason of such failure; provided, however, that should a Lender become subject to Taxes because of
its failure to deliver a form, certificate or other document required hereunder, the Loan Parties
shall take such steps as such Lender shall reasonably request to assist such Lender to recover such
Taxes.




          SECTION 2.10. Sharing of Payments, Etc. If any Lender shall obtain at any time any
payment (whether voluntary, involuntary, through the exercise of any right of set-off, or
otherwise, other than as a result of an assignment or participation pursuant to Section
9.07) (a) on account of Obligations due and payable to such Lender hereunder and under the
other Loan Documents at such time in excess of its ratable share (according to the proportion of
(i) the amount of such Obligations due and payable to such Lender at such time to (ii) the
aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other
Loan Documents at such time) of payments on account of the Obligations due and payable to all
Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at
such time or (b) on account of Obligations owing (but not due and payable) to such Lender hereunder
and under the other Loan Documents at such time in excess of its ratable share (according to the
proportion of (i) the amount of such Obligations owing to such Lender at such time to (ii) the
aggregate amount of the Obligations owing (but not due and payable) to all Lenders hereunder and
under the other Loan Documents at such time) of payments on account of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the other Loan Documents at such time
obtained by all Lenders at such time, such Lender shall forthwith purchase from the other Lender
such interests or participating interests in the Obligations due and payable or owing to them, as
the case may be, as shall be necessary to cause such purchasing Lender to share the excess payment
ratably with each of them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each other Lender shall be
rescinded and each such other Lender shall repay to the purchasing Lender the purchase price to the
extent of such Lender’s ratable share (according to the proportion of (A) the purchase price paid
to such Lender to (B) the aggregate purchase price paid to all Lenders) of such recovery together
with an amount equal to such Lender’s ratable share (according to the proportion of (1) the amount
of such other Lender’s required repayment to (2) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the
total amount so recovered. The Loan






 









 







Parties agree that any Lender so purchasing an interest or participating interest from another
Lender pursuant to this Section 2.10 may, to the fullest extent permitted by law, exercise
all its rights of payment (including the right of set-off) with respect to such interest or
participating interest, as the case may be, as fully as if such Lender were the direct creditor of
the Loan Parties in the amount of such interest or participating interest, as the case may be.




          SECTION 2.11. Use of Proceeds. The proceeds of the Term Loans shall be used solely in
accordance with the Budget in compliance with Section 5.04(a).




          SECTION 2.12. Defaulting Lenders. (a) In the event that, at any one time, (i) any
Lender shall be a Defaulting Lender, (ii) such Defaulting Lender shall owe a Defaulted Loan to the
Borrowers and (iii) the Borrowers shall be jointly and severally required to make any payment
hereunder or under any other Loan Document to or for the account of such Defaulting Lender, then
the Borrowers (or any of them) may, so long as no Default shall occur or be continuing at such time
and to the fullest extent permitted by applicable law, set off and otherwise apply the Obligation
of the Borrowers to make such payment to or for the account of such Defaulting Lender against the
obligation of such Defaulting Lender to make such Defaulted Loan. In the event that, on any date,
the Borrowers (or any of them) shall so set off and otherwise apply their obligation to make any
such payment against the obligation of such Defaulting Lender to make any such Defaulted Loan on or
prior to such date, the amount so set off and otherwise applied by the Borrowers shall constitute
for all purposes of this Agreement and the other Loan Documents a Term Loan by such Defaulting
Lender made on the date of such setoff under the Facility pursuant to which such Defaulted Loan was
originally required to have been made pursuant to Section 2.01. Such Term Loans shall be
considered, for all purposes of this Agreement, to comprise part of the Borrowing in connection
with which such Defaulted Loan was originally required to have been made pursuant to Section
2.01. The Administrative Borrower shall notify the Administrative Agent at any time the
Borrowers(or any of them) exercise their right of set-off pursuant to this subsection (a) and shall
set forth in such notice (A) the name of the Defaulting Lender and the Defaulted Loan required to
be made by such Defaulting Lender and (B) the amount set off and otherwise applied in respect of
such Defaulted Loan pursuant to this subsection (a). Any portion of such payment otherwise
required to be made by the Borrowers to or for the account of such Defaulting Lender which is paid
by the Borrowers, after giving effect to the amount set off and otherwise applied by the Borrowers
pursuant to this subsection (a), shall be applied by the Administrative Agent as specified in
subsection (b) or (c) of this Section 2.12.




          (b) In the event that, at any one time, (i) any Lender shall be a Defaulting Lender, (ii) such
Defaulting Lender shall owe a Defaulted Amount to any Agent or any of the other Lenders and (iii)
the Borrowers shall make any payment hereunder or under any other Loan Document to the
Administrative Agent for the account of such Defaulting Lender, then the Administrative Agent may,
on its behalf or on behalf of such other Agents or such other Lenders and to the fullest extent
permitted by applicable law, apply at such time the amount so paid by the Borrowers to or for the
account of such Defaulting Lender to the payment of each such Defaulted Amount to the extent
required to pay such Defaulted Amount. In the event that the Administrative Agent shall so apply
any such amount to the payment of any such Defaulted Amount on any date, the amount so applied by
the Administrative Agent shall constitute for all purposes of this Agreement and the other Loan
Documents payment, to such extent, of such






 









 







Defaulted Amount on such date. Any such amount so applied by the Administrative Agent shall
be retained by the Administrative Agent or distributed by the Administrative Agent to such other
Agents or such other Lenders in the following order of priority:





          (i) first, to the Agents for any Defaulted Amounts then owing to them, in their
capacities as such, ratably in accordance with such respective Defaulted Amounts then owing
to the Agents;




          (ii) second, to the Lenders for any Defaulted Amounts then owing to them, ratably in
accordance with such respective Defaulted Amounts then owing to them; and




          (iii) third, to such Defaulting Lender.


Any portion of such amount paid by the Borrowers for the account of such Defaulting Lender
remaining after giving effect to the amount applied by the Administrative Agent pursuant to this
subsection (b) shall be distributed by the Administrative Agent to such Lender and applied by such
Lender to the Obligations owing to such Lender at such time under this Agreement and the other Loan
Documents ratably in accordance with the respective amounts of such Obligations outstanding at such
time.




          (c) The rights and remedies against a Defaulting Lender under this Section 2.12 are in
addition to other rights and remedies that the Borrowers may have against such Defaulting Lender
with respect to any Defaulted Loan and that any Agent or any Lender may have against such
Defaulting Lender with respect to any Defaulted Amount.




          SECTION 2.13. Evidence of Debt. (a) Each Lender shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such
Lender resulting from each Term Loan owing to such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time hereunder. The
Borrowers agree that upon notice by any Lender to the Administrative Borrower (with a copy of such
notice to the Administrative Agent) to the effect that a promissory note or other evidence of
indebtedness is required or appropriate in order for such Lender to evidence (whether for purposes
of pledge, enforcement or otherwise) the Term Loans owing to, or to be made by, such Lender, the
Borrowers shall promptly execute and deliver to such Lender, with a copy to the Administrative
Agent, a Note, in substantially the form of Exhibit A hereto payable to the order of such
Lender (or, at such Lender’s request, payable to such Lender and its registered assigns), in a
principal amount equal to the Term Loans of such Lender. All references to Notes in the Loan
Documents shall mean Notes, if any, to the extent issued hereunder.




          (b) The Register maintained by the Administrative Agent pursuant to Section 9.07(d)
shall record (i) the date and amount of each Borrowing made hereunder, and, if appropriate, the
Interest Period applicable thereto, (ii) the terms of each Assignment and Acceptance delivered to
and accepted by it, (iii) the amount of any principal or interest due and payable or to become due
and payable from the Borrowers to each Lender hereunder and (iv) the amount of any sum received by
the Administrative Agent from the Borrowers hereunder and each Lender’s share thereof.







 









 








          (c) Entries made in good faith by the Administrative Agent in the Register pursuant to
subsection (b) above, and by each Lender in its account or accounts pursuant to subsection (a)
above, shall be prima facie evidence of the amount of principal and interest due and payable or to
become due and payable from the Borrowers to, in the case of the Register, each Lender and, in the
case of such account or accounts, such Lender, under this Agreement, absent manifest error;
provided, however, that the failure of the Administrative Agent or such Lender to make an entry, or
any finding that an entry is incorrect, in the Register or in such account or accounts shall not
limit or otherwise affect the obligations of the Borrowers under this Agreement.




          SECTION 2.14. Extension of Maturity Date.




          (a) Requests for Extension. The Administrative Borrower may, upon no less than ten
(10) Business Days’ prior written notice from the Administrative Borrower to the Administrative
Agent, request that the Maturity Date be extended by up to sixty (60) days. Such request may be
made by the Administrative Borrower not more than once.




          (b) Conditions to Extension of Maturity Date. The agreement of the Administrative
Agent and each Lender to extend the Maturity Date shall be subject, in each case, to the
satisfaction, or waiver by the Required Lenders, of the following conditions precedent:





          (i) the Administrative Borrower shall have delivered to the Administrative Agent, in
form and substance reasonably satisfactory to the Required Lenders, a certificate of each
Loan Party, executed by a duly authorized officer of such Loan Party (A) certifying and
attaching the resolutions adopted by such Loan Party approving or consenting to such
extension of the Maturity Date and (B) certifying that, before and after giving effect to
such extension of the Maturity Date, (I) the representations and warranties contained in
Section 4.01 and the other Loan Documents are true and correct in all material
respects on and as of the existing Maturity Date, except to the extent that such
representations and warranties specifically refer to an earlier date, in which case they
are true and correct in all material respects as of such earlier date; provided,
that any representation or warranty that is qualified by “materiality”, “Material Adverse
Effect” or similar language shall be true and correct in all respects on such respective
dates, and (II) no Default or Event of Default exists or is continuing;




          (ii) the Administrative Borrower shall have delivered to the Administrative Agent, in
form and substance reasonably satisfactory to the Required Lenders, projections
demonstrating compliance, on a pro forma basis, with the financial covenants set forth in
Section 5.04, for the period through which the Administrative Borrower has
requested such extension of the Maturity Date;




          (iii) the Administrative Borrower shall have delivered to the Administrative Agent, in
form and substance reasonably satisfactory to the Required Lenders, an updated Budget for
the period through which the Borrower has requested such extension of the Maturity Date;



 









 






          (iv) no Default or Event of Default shall exist or be continuing or will occur as a
result of or immediately after giving effect to any such extension;




          (v) the Administrative Borrower shall have paid to the Administrative Agent, for the
pro rata account of each Lender, the Extension Fee payable pursuant to
Section 2.06; and




          (vi) the Administrative Borrower shall have delivered all such instruments, documents
and agreements as the Administrative Agent may reasonably request, duly executed and
delivered by each party thereto.



          (c) Conflicting Provisions. This Section 2.14 shall supersede any provisions
in Section 8.01 to the contrary.




          SECTION 2.15. Joint and Several Obligations; Administrative Borrower.




          (a) Each of the Borrowers is accepting joint and several liability hereunder and under the
other Loan Documents in consideration of the financial accommodations to be provided by the Lenders
under this Agreement, for the mutual benefit, directly and indirectly, of each of the Borrowers and
in consideration of the undertakings of each other Borrower to accept joint and several liability
for the Obligations.




          (b) Each of the Borrowers, jointly and severally, hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and several liability with the other
Borrowers with respect to the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.15), it being the intention of the
parties hereto that all of the Obligations shall be the joint and several Obligations of each of
the Borrowers without preferences or distinction among them.




          (c) If and to the extent that any of the Borrowers shall fail to make any payment with respect
to any of the Obligations as and when due or to perform any of the Obligations in accordance with
the terms thereof, then in each such event the other Borrowers will make such payment with respect
to, or perform, such Obligation.




          (d) The Obligations of each of the Borrowers under the provisions of this Section 2.15
constitute full recourse Obligations of each of the Borrowers enforceable against each such Person
to the full extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.




          (e) Except as otherwise expressly provided in this Agreement, each of the Borrowers hereby
waives notice of acceptance of its joint and several liability, notice of any Term Loans made under
this Agreement, notice of any action at any time taken or omitted by the Lenders under or in
respect of any of the Obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this Agreement. Each of
the Borrowers hereby assents to, and waives notice of, any extension or postponement of the time
for the payment of any of the Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence
by the Lenders at any time or times in respect of any






 









 







default by any of the Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences whatsoever by the Lenders
in respect of any of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any of the Borrowers. Without limiting the
generality of the foregoing, to the extent permitted by law, each of the Borrowers assents to any
other action or delay in acting or failure to act on the part of the Lenders with respect to the
failure by any of the Borrowers to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any right or to pursue any remedy
or to comply fully with applicable laws or regulations thereunder, which might, but for the
provisions of this Section 2.15, afford grounds for terminating, discharging or relieving
any of the Borrowers, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each of the Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Borrowers under this Section 2.15
shall not be discharged except by performance and then only to the extent of such performance. The
Obligations of each of the Borrowers under this Section 2.15 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement, liquidation, re-construction
or similar proceeding with respect to any of the Borrowers or the Lenders. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of any of the Borrowers or the Lenders.




          (f) The provisions of this Section 2.15 are made for the benefit of the Lenders and
their successors and permitted assigns, and may be enforced in good faith by them from time to time
against any or all of the Borrowers as often as the occasion therefor may arise and, to the extent
permitted by law, without requirement on the part of the Lenders first to marshal any of their
claims or to exercise any of their rights against any other Borrower or to exhaust any remedies
available to them against any other Borrower or to resort to any other source or means of obtaining
payment of any of the Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.15 shall remain in effect until all of the Obligations (other than contingent
indemnification and reimbursement Obligations in respect of which no claim for payment has been
asserted by the Person entitled thereto) shall have been paid in full or otherwise fully satisfied.
If at any time, any payment, or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by the Lenders, the provisions of this
Section 2.15 will forthwith be reinstated in effect, as though such payment had not been
made.




          (g) Any notice, request, waiver, consent or other action made, given or taken by any Borrower
in connection with the Loan Documents shall bind all Borrowers.




          (h) Each Borrower hereby authorizes Holdco to act as agent for each Borrower (in such
capacity, the “Administrative Borrower”) and to execute and deliver on behalf of each Borrower such
notices, requests, waivers, consents, certificates and other documents, and to take any and all
actions required or permitted to be delivered or taken by any Borrower hereunder.







 









 








ARTICLE III




CONDITIONS TO EFFECTIVENESS AND OF LENDING



          SECTION 3.01. Conditions Precedent to Borrowing Interim Order Amount. Section
2.01 of this Agreement shall become effective on and as of the first date on or before December
23, 2009 (the “Closing Date”) on which the following conditions precedent have been satisfied in a
manner satisfactory to the Administrative Agent and the Required Lenders (and the obligation of
each Lender to make any Term Loan on the occasion of the initial Borrowing hereunder is subject to
the satisfaction or waiver in accordance with Section 9.01 hereof of such conditions
precedent before or concurrently with the Closing Date):




          (a) The Administrative Agent shall have received on or before the Closing Date the following,
each dated such day (unless otherwise specified), in form and substance satisfactory to the
Administrative Agent and the Required Lenders (unless otherwise specified) and (except for the
Notes) in sufficient copies for each Lender:





          (i) Executed counterparts of this Agreement and the Guaranty.




          (ii) The Notes to the extent requested by the Lenders pursuant to the terms of
Section 2.13.




          (iii) A security agreement substantially in the form of Exhibit D-1 hereto
(the “U.S. Security Agreement”) and a security agreement substantially in the form of
Exhibit D-2 hereto (the “Canadian Security Agreement”), each duly executed by each
applicable Loan Party, together with:




          (A) certificates representing the Initial Pledged Equity (to the extent
certificated) referred to therein accompanied by undated stock powers executed in
blank and instruments evidencing the Initial Pledged Debt referred to therein,
endorsed in blank;




          (B) financing statements in a form appropriate for filing under the Uniform
Commercial Code or PPSA, as applicable, for all jurisdictions that the
Administrative Agent may deem necessary or desirable in order to perfect and protect
the first priority (subject to the Carve Out and Liens permitted to be equal or
superior in priority pursuant to this Agreement) liens and security interests
created under the Security Agreements, covering the Collateral described in the
Security Agreements;




          (C) the Intellectual Property Security Agreements duly executed by each
applicable Loan Party;




          (D) evidence of the completion of all other recordings and filings of or with
respect to the Security Agreements that the Administrative Agent may deem necessary
or desirable in order to perfect and protect the security interest created
thereunder;



 









 






          (E) evidence of the insurance required by the terms of the Security Agreements;
and




          (F) evidence that all other actions that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the first priority (subject
to the Carve Out and Liens permitted to be equal or superior in priority pursuant to
this Agreement) liens and security interests created under the Security Agreements
has been taken (including, without limitation, receipt of duly executed landlords’
and bailees’ waiver and consent agreements to the extent required under the Security
Agreements).




          (iv) Certified copies of the resolutions of the Board of Directors (or equivalent
entity) of each Loan Party (and to the extent required by the constituent documents of such
Loan Party, the written consent of each of the holders of the Equity Interests of such Loan
Party required to give written consent by such constituent documents) approving each Loan
Document to which it is or is to be a party, and of all documents evidencing other
necessary corporate action and governmental and other third party approvals and consents,
if any, with respect to each Loan Document to which it is or is to be a party.




          (v) A copy of a certificate of the Secretary of State of the jurisdiction of
organization of each Loan Party (or certificate of status in respect of Parent and other
Canadian Loan Parties), dated reasonably near the Closing Date, certifying (A) as to a true
and correct copy of the constituent documents of such Loan Party and each amendment thereto
on file in such Secretary’s office and that such amendments are the only amendments to such
Loan Party’s constituent documents on file in such Secretary’s office, and (B) that such
Loan Party is duly organized and in good standing or presently subsisting under the laws of
the State of the jurisdiction of its organization; provided, that subject to Section 3.05,
such certificate of status in respect of those Loan Parties listed on Schedule 3.05
shall be delivered in accordance therewith.




          (vi) A certificate of each Loan Party signed on behalf of such Loan Party by its
President or a Vice President and its Secretary or any Assistant Secretary, dated the
Closing Date (the statements made in which certificate shall be true on and as of the
Closing Date), certifying as to (A) the absence of any amendments to the constituent
documents of such Loan Party since the date of the Secretary of State’s certificate
referred to in Section 3.01(a)(v), (B) a true and correct copy of the organizational
documents of such Loan Party as in effect on the Closing Date, (C) the due organization and
good standing or valid existence of such Loan Party as an entity organized under the laws
of the jurisdiction of its organization, and the absence of any proceeding for the
dissolution or liquidation of such Loan Party, (D) the truth in all material respects of
the representations and warranties contained in the Loan Documents as though made on and as
of the Closing Date; provided, that any representation or warranty that is
qualified by materiality, “Material Adverse Effect” or similar language shall be true and
correct in all respects on and as of the Closing Date and (E) in the case of the
certificate from each Borrower, the absence of any event occurring and continuing, or
resulting from the initial Borrowing, that constitutes a Default.



 









 






          (vii) A certificate of the Secretary or an Assistant Secretary of each Loan Party
certifying the names and true signatures of the officers of such Loan Party authorized to
sign each Loan Document to which it is or is to be a party and the other documents to be
delivered hereunder and thereunder.




          (viii) A certificate dated the Closing Date signed by the Chief Financial Officer of
the Administrative Borrower, to the effect that (A) each of the representations and
warranties of the Loan Parties contained in Article IV hereof is true and correct
in all material respects as of the Closing Date; provided, that any representation
or warranty that is qualified by materiality, “Material Adverse Effect” or similar language
shall be true and correct in all respects as of the Closing Date and (B) all conditions to
the effectiveness of this Agreement set forth in this Article III other than those
which are subject to the discretion, satisfaction, consent or approval of the Agents (or
any of them) or any Lender, have been satisfied (or, if applicable, waived) in all
respects.




          (ix) Evidence of insurance naming the Collateral Agent as additional insured and loss
payee with such responsible and reputable insurance companies or associations, and in such
amounts and covering such risks, as is satisfactory to the Required Lenders, including,
without limitation, business interruption insurance.




          (x) Favorable opinions of Torys LLP, Canadian counsel to Parent and other Canadian
Loan Parties, Stewart, McKelvey, Stikling & Scales, New Brunswick counsel to Parent and
other Canadian Loan Parties, and Proskauer Rose, LLP, U.S. counsel for the other Loan
Parties, substantially in the forms of Exhibit F-1 and F-2, respectively, hereto.



          (b) Since October 31, 2009 (i) there shall have occurred no Material Adverse Change and no
material adverse change in the Collateral taken as a whole and (ii) there has been no material
increase in the liabilities, liquidated or contingent, of Parent and its Subsidiaries, taken as a
whole (other than the liabilities in respect of the Term Loans under the Loan Documents), or
material decrease in the assets of Parent and its Subsidiaries taken as a whole.




          (c) There shall exist no action, suit, investigation, litigation or proceeding affecting
Parent or any of its Subsidiaries pending or threatened before any Governmental Authority that (i)
would be reasonably likely to have a Material Adverse Effect other than the matters described on
Schedule 4.01(f) hereto (the “Disclosed Litigation”) or (ii) purports to affect the
legality, validity or enforceability of any Loan Document or the consummation of the transactions
contemplated thereby, and there shall have been no adverse change in the status, or financial
effect on any Loan Party or any of its Subsidiaries, of the Disclosed Litigation from that
described on Schedule 4.01(f) hereto.




          (d) All Governmental Authorizations and third party consents and approvals necessary in
connection with the transactions contemplated by the Loan Documents shall have been obtained
(without the imposition of any conditions that are not acceptable to the Lenders) and shall remain
in effect; all applicable waiting periods in connection with the transactions contemplated by the
Loan Documents shall have expired without any action being taken by any competent authority, and no
law or regulation shall be applicable in the judgment of the Lenders,






 









 







in each case that restrains, prevents or imposes materially adverse conditions upon the
transactions contemplated by the Loan Documents or the rights of the Loan Parties or their
Subsidiaries freely to transfer or otherwise dispose of, or to create any Lien on, any properties
now owned or hereafter acquired by any of them.




          (e) Reserved.




          (f) The Borrowers shall have filed the Chapter 11 Cases in the Bankruptcy Court on or before
December 21, 2009.




          (g) The Bankruptcy Court shall have entered the Interim Order, in form and substance
reasonably satisfactory to the Administrative Agent and the Required Lenders, within three (3)
Business Days of the Petition Date, and such order shall be in full force and effect and shall not
have been modified or amended (unless otherwise approved by the Required Lenders), reversed, stayed
or subject to a motion for reargument or reconsideration. If the Interim Order is the subject of a
pending appeal in any respect, none of the Interim Order, the making of the Term Loans, or the
performance by the Borrowers of any of the Obligations shall be the subject of a presently
effective stay pending appeal. The Loan Parties, the Agents and the Lenders shall be entitled to
rely in good faith upon the Interim Order, notwithstanding objection thereto or appeal therefrom by
an interested party. The Loan Parties, the Agents and the Lenders shall be permitted and required
to perform their respective obligations in compliance with this Agreement notwithstanding any such
objections or appeal unless the relevant order has been stayed by a court of competent
jurisdiction.




          (h) The Closing Date shall have occurred within two (2) Business Days of the date that the
Bankruptcy Court shall have entered the Interim Order.




          (i) The Administrative Agent shall have received a duly executed copy of the Plan Support
Agreement, pursuant to which the Consenting Lenders agree to vote in favor of, and to support in
all other respects, the Plan of Reorganization, and no party to the Plan Support Agreement shall
have withdrawn its support or refused to abide by the terms thereof.




          (j) First day orders with respect to customary first day motions, including motions concerning
payment of critical vendors, cash management and payment of wages and other employee benefits shall
have been approved and entered by the Bankruptcy Court and shall be in form and substance
reasonably satisfactory to the Administrative Agent and the Required Lenders.




          (k) All orders (if any) providing for payment of prepetition indebtedness of the Loan Parties
or affecting in any way the Obligations or the Collateral submitted for entry in the Cases shall be
in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders
and, as entered, shall not deviate from the form thereof approved by the Lenders in any material
respect which is adverse to the interests of the Lenders.




          (l) The Canadian Court shall have entered (i) all appropriate orders as are reasonably
satisfactory to the Required Lenders, which shall correspond to the orders entered by the
Bankruptcy Court in connection with the Cases, and (ii) an order of recognition of the Chapter 11
Cases in respect of Parent under the CCAA (the “Recognition Order”), which






 









 







(w) recognizes the Chapter 11 Cases in respect of Parent as “foreign proceedings” (as defined
under Part IV of the CCAA), (x) imposes a stay of proceedings in respect of Parent, (y) recognizes
the Interim Order with respect to the Facility in respect of Parent and (z) authorizes a
superpriority charge and senior priming security interest in favor of the Collateral Agent and the
Secured Parties.




          (m) Reserved.




          (n) The Administrative Agent shall have received the Budget prepared in good faith based upon
reasonable assumptions which shall be reasonably satisfactory in all respects to the Administrative
Agent and the Required Lenders, it being recognized by the Administrative Agent and the Lenders
that such projections as to future events are not to be viewed as facts and that actual results
during the period or periods covered by the Budget may differ from the projected results.




          (o) (i) The Restructuring Monitor shall be in place and operating as of the first day of the
Chapter 11 Cases pursuant to an engagement letter, in form and substance reasonably satisfactory to
the Required Lenders, and such engagement letter shall be in full force and effect, and (ii) the
Borrowers shall have filed a motion with the Bankruptcy Court seeking approval of the engagement of
such Restructuring Monitor.




          (p) The Administrative Agent shall have received a true and complete copy of the documents
relating to the sale of the Canadian Refractive Centers duly executed by the parties thereto, which
shall be in form and substance reasonably satisfactory to the Required Lenders.




          (q) The Borrowers shall have filed a motion to approve an order to permit the sale of certain
assets of Parent (including the sale of the Canadian Refractive Centers) on the Petition Date.




          (r) The Security Agreements shall, upon entry of the applicable Order, be effective to create
in favor of the applicable Agent a legal, valid and enforceable first priority security interest in
and lien upon the Collateral subject to the Carve Out and Liens permitted to be equal or superior
in priority pursuant to this Agreement. All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Administrative Agent to protect and
preserve such security interests shall have been duly effected. The Administrative Agent shall
have received evidence thereof in form and substance satisfactory to it.




          (s) Reserved.




          (t) The Administrative Agent shall have received all documentation and other information
required by bank regulatory authorities under applicable “know your customer” and Anti-Money
Laundering rules and regulations, including, without limitation, the Patriot Act, as it shall have
reasonably requested.




          SECTION 3.02. Conditions to Borrowings in Excess of the Interim Order Amount. The
obligation of each Lender to make any Term Loan in excess of the Interim






 









 







Amount shall be subject to the satisfaction or waiver in accordance with Section 9.01
hereof of the following conditions precedent:




          (a) The Bankruptcy Court shall have entered the Final Order, which Final Order shall continue
and confirm matters addressed in the Interim Order and shall not have been amended or modified
(unless otherwise approved by the Required Lenders), stayed or reversed thereafter or subject to a
motion for reargument or consideration. The Final Order shall authorize an extension of credit
under the Facility in an amount not greater than the Final Order Amount. If the Final Order is the
subject of a pending appeal in any respect, neither the Interim Order nor the making of the Term
Loans, or the performance by the Borrowers of any of the Obligations shall be the subject of a
presently effective stay pending appeal. The Borrowers, the Agents and the Lenders shall be
entitled to rely in good faith upon the Final Order notwithstanding the objection thereto or appeal
therefrom by any interested party. The Borrowers, the Agents and the Lenders shall be permitted
and required to perform their respective obligations in compliance with this Agreement
notwithstanding any such objection or appeal unless the relevant order has been stayed by a court
of competent jurisdiction.




          (b) The Administrative Agent shall have received all amendments to the relevant lease
agreements between Parent and Intralase Corp., a Delaware corporation, in form and substance
reasonably satisfactory to the Required Lenders, duly executed by the parties thereto.




          (c) The Loan Parties shall have used all reasonable efforts to seek a settlement of the claims
by Michael Aronsky, M.D., Carol Hoffman, M.D., George Pronesti, M.D., and Anthony Zacchei, M.D.
(collectively, the “Kremer Claims”) against Parent and its Subsidiaries, in form and substance
satisfactory to the Required Lenders.




          (d) Reserved.




          (e) The Required Lenders shall be satisfied with the amount of fees and other compensation
payable on an ongoing basis to the chairman of the board of directors of Parent and Holdco.




          SECTION 3.03. Conditions Precedent to All Borrowings. (a) The obligation of each
Lender to make any Term Loan on the occasion of each Borrowing (including the initial Borrowing),
shall be subject to the satisfaction or waiver in accordance with Section 9.01 hereof of the
further conditions precedent that on the date of such Borrowing:





          (i) the following statements shall be true and the acceptance by the Borrowers of the
proceeds of such Borrowing shall constitute a representation and warranty by the Borrowers
that both on the date of the applicable Notice of Borrowing and the date of such Borrowing,
such statements are true:




          (A) the representations and warranties of each Loan Party contained in each
Loan Document are correct in all material respects on and as of such date, before
and after giving effect to such Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, other than any such
representations or warranties that, by their terms, refer to a specific date



 









 







other than the date of such Borrowing, in which case such representations and
warranties were true and correct in all material respects as of such specific date;
provided, that any representation or warranty that is qualified by
materiality, “Material Adverse Effect” or similar language shall be true and correct
in all respects on such respective dates and




          (B) no Default or Event of Default has occurred and is continuing, or would
result from such Borrowing;




          (ii) the Administrative Agent shall have received a Notice of Borrowing, in form and
substance reasonably satisfactory to it; and




          (iii) the Borrowers shall have paid (A) to the Administrative Agent, for the benefit
of the Secured Parties, all accrued and unpaid fees and expenses due to the Secured Parties
in connection with the transactions contemplated by the Loan Documents (including accrued
and unpaid fees and expenses described in any fee letters executed by the Borrowers in
connection with this Agreement or in connection with any Lender’s commitment to provide
financing under the Facility), (B) to legal counsel and financial advisers to the Required
Prepetition Lenders (including, without limitation, Special Counsel, the Financial Advisor,
Stikeman Elliott LLP, as Canadian counsel and Pachulski Stang Ziehl & Jones LLP, as
Delaware counsel), all accrued and unpaid fees and expenses then due and payable to each of
them under or in connection with the Prepetition Loan Documents and the refinancing or
restructuring of the financing thereunder in the nature of a “work-out” or other similar
proceeding involving creditors’ rights generally and any proceeding ancillary thereto
(including, without limitation, the Cases), in the case of each of (A) and (B), regardless
of whether any grace period under the agreements pursuant to which the applicable fees and
expenses are payable has expired; provided, that all payment in the case of (B) shall be
made as provided in the Order as approved by the Bankruptcy Court on the Petition Date; and




          (iv) the Administrative Agent shall have received such other approvals, opinions or
documents as the Required Lenders through the Administrative Agent may reasonably request.



          (b) Each Borrowing hereunder shall constitute a representation and warranty by the Borrowers
as of the date of such Borrowing that the conditions contained in this Section 3.03 have
been satisfied.




          SECTION 3.04. Determinations Under Section 3.01 and 3.02. For purposes of determining
compliance with the conditions specified in Section 3.01 or Section 3.02, as
applicable,, each Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have received written
notice from such Lender prior to the Closing Date specifying its objection thereto and, such Lender
shall not have made available to the Administrative Agent such Lender’s ratable portion of such
Borrowing.







 









 








          SECTION 3.05. Conditions Subsequent to Closing Date. The obligation of the Lenders to
continue to make the Term Loans to the Borrowers is subject to the fulfillment, on or before the
date applicable thereto, of the conditions subsequent set forth on Schedule 3.05 (the
failure by any Borrower to so perform or cause to be performed such conditions subsequent as and
when required by the terms thereof, shall constitute an immediate Event of Default (it being
understood and agreed that, to the extent that the existence of any such condition subsequent, or
the failure to have satisfied such condition prior to the Closing Date, would otherwise cause any
representation, warranty or covenant in this Agreement or any Loan Document to be breached, such
breach shall not be deemed to have occurred to the extent such condition subsequent is satisfied as
and when required pursuant to Schedule 3.05)).




ARTICLE IV




REPRESENTATIONS AND WARRANTIES



          SECTION 4.01. Representations and Warranties of Borrowers. Each Borrower represents
and warrants as follows:




          (a) Each Loan Party and each of its Subsidiaries (i) is a corporation, limited liability
company, limited liability partnership or limited partnership duly organized, validly existing and
in good standing under the laws of the jurisdiction of its formation, (ii) is duly qualified and in
good standing as a foreign corporation or company in each other jurisdiction in which it owns or
leases property or in which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed would not be reasonably likely to have a
Material Adverse Effect and (iii) has all requisite corporate, limited liability company, limited
liability partnership or partnership (as applicable) power and authority (including, without
limitation, all Governmental Authorizations) to own or lease and operate its properties and to
carry on its business as now conducted and as proposed to be conducted. All of the outstanding
Equity Interests of Holdco, TLC Management, and each other wholly owned Subsidiary of Parent have
been validly issued, are fully paid and non-assessable and are owned by Parent free and clear of
all Liens, except Permitted Liens and those created under the Collateral Documents, the Prepetition
Loan Documents, the Interim Order and the Final Order.




          (b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list of all Loan
Parties, showing as of the date hereof (as to each Loan Party) the jurisdiction of its
organization, the address of its principal place of business and, as to each Loan Party organized
in the United States or a state thereof, its U.S. taxpayer identification number. As of the date
hereof, the copy of the charter of each Loan Party and each amendment thereto provided pursuant to
Section 3.01(a)(v) is a true and correct copy of each such document, each of which is valid
and in full force and effect. All of the outstanding Equity Interests in each Loan Party’s
Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by such Loan
Party or one or more of its Subsidiaries free and clear of all Liens, except Permitted Liens and
those created under the Collateral Documents, the Interim Order, the Final Order or under
applicable law or under the charter, bylaws, limited liability company agreement, partnership
agreement or other constituent documents of such Loan Party.







 









 








          (c) Subject to approval of the Bankruptcy Court and pursuant to the Order, the execution,
delivery and performance by each Loan Party of each Loan Document to which it is or is to be a
party, and the consummation of the transactions contemplated thereby, are within such Loan Party’s
corporate, limited liability company, limited liability partnership or limited partnership (as
applicable) powers, have been duly authorized by all necessary corporate, limited liability
company, limited liability partnership or limited partnership (as applicable) action, and do not
(i) contravene such Loan Party’s charter, bylaws, limited liability company agreement, partnership
agreement or other constituent documents, (ii) violate any law, rule, regulation (including,
without limitation, Regulation X of the Board of Governors of the Federal Reserve System), order,
writ, judgment, injunction, decree, determination or award, (iii) conflict with or result in the
breach of, or constitute a default or require any payment to be made under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding on or affecting
any Loan Party, any of its Subsidiaries or any of their properties or (iv) except for the Liens
created under the Loan Documents, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any of its Subsidiaries. No Loan
Party or any of its Subsidiaries is in violation of any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the violation or breach
of which would be reasonably likely to have a Material Adverse Effect.




          (d) Except for the entry of the Order, no Governmental Authorization (other than the approval
of the Bankruptcy Court), and no notice to or filing with, any Governmental Authority or any other
third party is required for (i) the due execution, delivery, recordation, filing or performance by
any Loan Party of any Loan Document to which it is or is to be a party, or for the consummation of
the transactions contemplated thereby (ii) the grant by any Loan Party of the Liens granted by it
pursuant to the Collateral Documents, (iii) the perfection or maintenance of the Liens created
under the Collateral Documents (including the first priority nature thereof, subject to the Carve
Out and Liens permitted to be equal or superior in priority pursuant to this Agreement) or (iv) the
exercise by any Agent or any Lender of its rights under the Loan Documents or the remedies in
respect of the Collateral pursuant to the Collateral Documents, except for the filings required to
create, perfect or preserve security interests under the Collateral Documents. All applicable
waiting periods in connection with the transactions contemplated by the Loan Documents have expired
without any action having been taken by any competent authority restraining, preventing or imposing
materially adverse conditions upon the transactions contemplated by the Loan Documents or the
rights of the Loan Parties or their Subsidiaries freely to transfer or otherwise dispose of, or to
create any Lien on, any properties now owned or hereafter acquired by any of them.




          (e) This Agreement has been, and each other Loan Document when delivered hereunder will have
been, duly executed and delivered by each Loan Party party thereto. Upon entry of the Order, this
Agreement is, and each other Loan Document when delivered hereunder will be, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such Loan Party in
accordance with its terms.




          (f) Except for the Cases, there is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any Environmental Action, pending or
to the knowledge of Parent, threatened before any Governmental Authority or






 









 







arbitrator that (i) would be reasonably likely to have a Material Adverse Effect (other than
the Disclosed Litigation) or (ii) purports to affect the legality, validity or enforceability of
any Loan Document or the consummation of the transactions contemplated thereby, and there has been
no adverse change in the status, or financial effect on any Loan Party or any of its Subsidiaries,
of the Disclosed Litigation from that described on Schedule 4.01(f) hereto.




          (g) The Consolidated and, if otherwise provided, consolidating balance sheets of Parent and
its Subsidiaries as at December 31, 2008, and the related Consolidated and, if otherwise provided,
consolidating statements of income and Consolidated statement of cash flows of Parent and its
Subsidiaries for the fiscal year then ended, accompanied by an opinion of Ernst & Young, LLP,
independent public accountants, and the Consolidated and, if otherwise provided, consolidating
balance sheets of Parent and its Subsidiaries as at September 30, 2009, and the related
Consolidated and, if otherwise provided, consolidating statements of income and Consolidated
statement of cash flows of Parent and its Subsidiaries for the three months then ended, duly
certified by the Chief Financial Officer of the Administrative Borrower, copies of which have been
furnished to each Lender, fairly present, subject, in the case of said balance sheet as at
September 30, 2009, and said statements of income and cash flows for the three months then ended,
to year end audit adjustments and the absence of footnotes, the Consolidated and, if otherwise
provided, consolidating financial condition of Parent and its Subsidiaries as at such dates and the
Consolidated and, if otherwise provided, consolidating results of operations of Parent and its
Subsidiaries for the periods ended on such dates, all in accordance with generally accepted
accounting principles applied on a consistent basis (subject to year end audit adjustments and the
absence of footnotes).




          (h) The Consolidated and, if otherwise provided, consolidating forecasted balance sheets,
statements of income and statements of cash flows of Parent and its Subsidiaries delivered to the
Lenders were prepared in good faith on the basis of the assumptions stated therein, which
assumptions were fair in light of the conditions existing at the time of delivery of such
forecasts, and represented, at the time of delivery, the Loan Parties’ best estimate of their
future financial performance, it being acknowledged and agreed that the Loan Parties do not
guaranty the realization or achievement of any forecasts or forward-looking statements delivered to
the Administrative Agent and the Lenders pursuant to this Section 4.01(h).




          (i) No written information, exhibit or report furnished by or on behalf of any Loan Party (at
such Loan Party’s explicit direction) to any Agent or any Lender in connection with the negotiation
and syndication of the Loan Documents or pursuant to the terms of the Loan Documents contained any
untrue statement of a material fact or omitted to state a material fact necessary to make the
statements made therein not misleading, it being acknowledged and agreed that the Loan Parties do
not guaranty the realization or achievement of any forecasts or forward-looking statements
delivered to the Administrative Agent and the Lenders Parties pursuant to this Section
4.01(i).




          (j) No Loan Party is engaged in the business of extending credit for the purpose of purchasing
or carrying Margin Stock, and no proceeds of any Term Loan will be used to purchase or carry any
Margin Stock or to extend credit to others for the purpose of purchasing or carrying any Margin
Stock.







 









 








          (k) Neither any Loan Party nor any of its Subsidiaries is an “investment company,” or an
“affiliated person” of, or “promoter” or “principal underwriter” for, an “investment company,” as
such terms are defined in the Investment Company Act of 1940, as amended. Neither the making of
any Term Loan, nor the application of the proceeds or repayment thereof by the Borrowers, nor the
consummation of the other transactions contemplated by the Loan Documents, will violate any
provision of any such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder or equivalent under the applicable securities laws of other jurisdictions.




          (l) Neither any Loan Party nor any of its Subsidiaries is a party to any indenture, loan or
credit agreement or any lease or other agreement or instrument or subject to any charter or
corporate restriction that would be reasonably likely to have a Material Adverse Effect.




          (m) No Loan Party nor any ERISA Affiliate maintains, sponsors, participates in, contributes to
or has any obligation to contribute to any Plan or Multiemployer Plan, or has within the last six
years, maintained, sponsored, participated in or contributed to, or had any obligation to
contribute to, any Plan or Multiemployer Plan; no Loan Party nor any ERISA Affiliate has incurred
any material liability under Title I or Title IV of ERISA with respect to any Plan or Multiemployer
Plan for which any Loan Party could reasonably be expected to be liable; and no condition exists
that would reasonably be expected to subject any Loan Party to any material tax, fine, Lien or
other liability imposed by ERISA, the Internal Revenue Code or other applicable law with respect to
any Plan or Multiemployer Plan.




          (n) (i) To the knowledge of the executive officers of Parent, except as otherwise set forth on
Part I of Schedule 4.01(n) hereto, the operations and properties of each Loan Party and
each of its Subsidiaries comply in all material respects with all applicable Environmental Laws and
Environmental Permits, all past non-compliance with Environmental Laws and Environmental Permits
has been resolved without ongoing obligations or costs, and no circumstances exist that would be
reasonably likely to (A) form the basis of an Environmental Action against any Loan Party or any of
its Subsidiaries or any of their properties that could have a Material Adverse Effect or (B) cause
any such property to be subject to any restrictions on ownership, occupancy, use or transferability
under any Environmental Law;





          (ii) To the knowledge of the executive officers of Parent, except as otherwise set
forth on Part II of Schedule 4.01(n) hereto, none of the properties currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or
proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local
list; there are no and never have been any underground or aboveground storage tanks or any
surface or sub-surface impoundments, septic tanks, pits, wells, sumps or lagoons in which
Hazardous Materials are being or have been treated, stored or disposed on any property
currently owned or operated by any Loan Party or any of its Subsidiaries or on any property
formerly owned or operated by any Loan Party or any of its Subsidiaries; there is no
asbestos or asbestos-containing material on any property currently owned or operated by any
Loan Party or any of its Subsidiaries; and Hazardous Materials have not been released,
discharged or disposed of on any property



 









 







currently or formerly owned or operated by any Loan Party or any of its Subsidiaries;
and




          (iii) To the knowledge of the executive officers of Parent, except as otherwise set
forth on Part III of Schedule 4.01(n) hereto, neither any Loan Party nor any of its
Subsidiaries is undertaking, and has not completed, either individually or together with
other potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or disposal of
Hazardous Materials at any site, location or operation, either voluntarily or pursuant to
the order of any governmental or regulatory authority or the requirements of any
Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored
at, or transported to or from, any property currently or formerly owned or operated by any
Loan Party or any of its Subsidiaries have been treated or disposed of in a manner not
reasonably expected to result in material liability to any Loan Party or any of its
Subsidiaries.



          (o) [Reserved].




          (p) Set forth on Schedule 4.01(p) hereto is a complete and accurate list of all Liens
on the property or assets of any Loan Party or any of its Subsidiaries, showing as of the date
hereof the lienholder thereof, the principal amount of the obligations secured thereby and the
property or assets of such Loan Party or such Subsidiary subject thereto.




          (q) Set forth on Schedule 4.01(q) hereto is a complete and accurate list of all
Investments held by any Loan Party or any of its Subsidiaries (other than Investments in Loan
Parties) on the date hereof, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.




          (r) Parent and its Subsidiaries (i) are not in violation of any applicable Requirement of Law,
including any building, zoning, occupational safety and health, fair employment, equal opportunity,
pension, environmental control, health care, certificate of need, health care facility licensing or
similar federal, state or local law, ordinance or regulation, relating to the ownership or
operation of their respective businesses or assets, (ii) have not failed to obtain any license,
permit, certificate or other governmental authorization necessary for the conduct of their
businesses or the ownership and operation of their assets, (iii) have not received any notice from
any Governmental Authority, and to their knowledge no such notice is pending or threatened,
alleging that Parent or any of its Subsidiaries has violated, or has not complied with, any
Requirement of Law, condition or standard applicable with respect to any of the foregoing, and (iv)
are not a party to any agreement or instrument, or subject to any judgment, order, writ, rule,
regulation, code or ordinance, except to the extent that any violation, noncompliance, failure,
agreement, judgment, etc. as described in clauses (i) through (iv) will not have a Material Adverse
Effect.




          (s) Parent and its Subsidiaries have all licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, certificates of need, accreditations and other
authorizations necessary for the lawful conduct of their respective businesses or operations
wherever now conducted and as planned to be conducted, pursuant to all applicable






 









 







statutes, laws, ordinances, rules and regulations of all Governmental Authorities having,
asserting or claiming jurisdiction over Parent or any of its Subsidiaries or over any part of their
respective operations, except to the extent that the cumulative effect of noncompliance with the
foregoing will not have a Material Adverse Effect. Copies of all material licenses, permits,
approvals, registrations, contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations shall be provided to the Administrative Agent upon request.
Neither Parent nor any of its Subsidiaries is in default under any of such licenses, permits,
approvals, registrations, contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations, and no event has occurred, and no condition exists, that
with the giving of notice, the passage of time or both would constitute a default thereunder or
would result in the suspension, revocation, impairment, forfeiture or non-renewal of any thereof,
except to the extent that the cumulative effect of all such defaults, events, conditions,
suspensions, revocations, impairments, forfeitures and non-renewals will not have a Material
Adverse Effect. The continuation, validity and effectiveness of all such licenses, permits,
approvals, registrations, contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations will not be adversely affected by the transactions
contemplated by this Agreement. Parent and its Subsidiaries know of no reason why they will not be
able to maintain after the date hereof all licenses, permits, approvals, registrations, contracts,
consents, franchises, qualifications, certificates of need, accreditations and other authorizations
necessary or appropriate to conduct the businesses of Parent and its Subsidiaries as now conducted
and presently planned to be conducted.




          (t) Upon the entry of the applicable Order, such Order shall be effective to establish and
perfect the Collateral Agent’s security interest in the Collateral; provided, that the
Collateral Agent may take any steps it deems necessary, in its sole discretion, to attach or
perfect the Liens, which steps may include the filing of financing statements, mortgages, notices
of liens or other similar documents. The Collateral Agent’s rights with respect to the Collateral
are not subject to any setoff, claims, withholdings, or other defenses.




          (u) To the knowledge of the Borrowers, no facts exist that (individually or in the aggregate)
would result in any material change in the Budget. The Budget is based upon good faith estimates
and assumptions believed by the Loan Parties to be reasonable at the time made, has been prepared
on the basis of the assumptions stated therein and reflects the reasonable estimates of the Loan
Parties of the results of operations and other information projected therein, it being recognized
by the Lenders that such projections as to future events are not to be viewed as facts and that
actual results during the period or periods covered by the Budget may differ from the projected
results.




          (v) Parent and its Subsidiaries have filed or caused to be filed all U.S. federal, state,
local, and all non-U.S. provincial and other material tax returns that are required to be filed by
it, all such tax returns were when filed, and continue to be, true, correct and complete in all
material respects, and the filer thereof has paid (or caused to be paid) all taxes shown to be due
and payable on said returns or on any material assessments made against it or any of its property
and all other material taxes, fees or other charges imposed on it or any of its property by any
Governmental Authority (other than the amounts which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of Parent or its Subsidiaries, as the case may be); and no






 









 







material tax Lien has been filed with respect to the property of Parent or any of its
Subsidiaries and, to the knowledge of each Loan Party, no material claim is being asserted, with
respect to any such tax, fee or other charge that could reasonably be expected to result in the
filing of a tax Lien with respect to the property of Parent or any of its Subsidiaries.




          (w) Each of the Parent and its Subsidiaries is insured, in accordance with Section 9 of the
Security Agreements, by insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses in which it is engaged;
and none of Parent or any of its Subsidiaries (i) has received notice from any insurer or agent of
such insurer that material expenditures will have to be made in order to continue such insurance or
(ii) has any reason to believe that it will not be able to renew its existing insurance coverage as
and when such coverage expires or to obtain similar coverage from similar insurers at a cost that
would not reasonably be expected to have a Material Adverse Effect, other than changes to such
coverage and costs that may be necessitated by or result from the Borrowers’ status as debtors in
possession.




          (x) To the extent applicable, each Loan Party is in compliance, in all material respects, with
the Patriot Act.




ARTICLE V




COVENANTS



          SECTION 5.01. Affirmative Covenants. So long as any Term Loan or any other Obligation
(other than contingent indemnification and reimbursement Obligations in respect of which no claim
for payment has been asserted by the Person entitled thereto) of any Loan Party under any Loan
Document shall remain unpaid, each Loan Party will:




          (a) Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries to comply,
in all material respects, with all applicable laws, rules, regulations and orders, such compliance
to include, without limitation, compliance with ERISA, the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970 and Healthcare Laws.




          (b) Payment of Taxes, Etc. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, before the same shall become delinquent, (i) all taxes, assessments and
governmental charges or levies imposed upon it or upon its property and (ii) all lawful claims
that, if unpaid, might by law become a Lien upon its property; provided, however, that neither
Parent nor any of its Subsidiaries shall be required to pay or discharge any such tax, assessment,
charge or claim that is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien resulting therefrom attaches
to its property and becomes enforceable against its other creditors.




          (c) Compliance with Environmental Laws. Comply, and cause each of its Subsidiaries
and all lessees and other Persons operating or occupying its properties to comply, in all material
respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew, and
cause each of its Subsidiaries to obtain and renew, all Environmental Permits necessary for its
operations and properties; and conduct, and cause each of its Subsidiaries to






 









 







conduct, any investigation, study, sampling and testing, and undertake any cleanup, removal,
remedial or other action necessary to remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental Laws; provided, however, that
neither Parent nor any of its Subsidiaries shall be required to undertake any such cleanup,
removal, remedial or other action to the extent that its obligation to do so is being contested in
good faith and by proper proceedings and appropriate reserves are being maintained with respect to
such circumstances.




          (d) Maintenance of Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance (including, without limitation, business interruption) with responsible and
reputable insurance companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties in the same
general areas in which such Loan Party or such Subsidiary operates.




          (e) Preservation of Corporate Existence, Etc. Preserve and maintain, and cause each
of its Subsidiaries to preserve and maintain, its existence, legal structure, legal name, rights
(charter and statutory), permits, licenses, approvals, privileges and franchises; provided that
neither Parent nor any of its Subsidiaries shall be required to preserve any right, permit,
license, approval, privilege or franchise if the Board of Directors of Parent or such Subsidiary,
after consultation with the Restructuring Monitor, reasonably determines that the preservation
thereof is no longer desirable in the conduct of the business of such Loan Party or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous in any material
respect to such Loan Party, such Subsidiary or the Lenders.




          (f) Visitation Rights. At any time during normal business hours, permit
representatives of the Required Lenders (including legal and financial advisers, auditors,
appraisers, and any other consultants engaged from time to time at the direction of the Required
Lenders) to examine and make copies of and abstracts from the records and books of account of, and
visit the properties of, Parent and any of its Subsidiaries, and to discuss the affairs, finances
and accounts of Parent and any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants.




          (g) Keeping of Books. Keep, and cause each of its Subsidiaries to keep, proper books
of record and account, in which full and correct entries shall be made of all financial
transactions and the assets and business of Parent and each such Subsidiary in accordance with
generally accepted accounting principles in effect from time to time.




          (h) Maintenance of Properties, Etc. Maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties that are used or useful in the conduct
of its business in good working order and condition, ordinary wear and tear excepted.




          (i) Transactions with Affiliates. Conduct, and cause each of its Subsidiaries to
conduct, all transactions otherwise permitted under the Loan Documents with any of their Affiliates
on terms that are fair and reasonable and no less favorable to such Loan Party or Subsidiary than
it would obtain in a comparable arm’s length transaction with a Person not an Affiliate and in
connection therewith shall not, and shall not permit any of its Subsidiaries to, enter into any
agreement requiring payments inconsistent with the foregoing, provided that the






 









 







foregoing shall not apply to (i) transactions between Loan Parties and (ii) customary fees to,
and indemnifications of, non-officer directors of the Loan Parties in compliance with the Budget
(subject to the proviso in Section 5.04(a)).




          (j) Covenant to Guarantee Obligations and Give Security. Upon (i) the formation or
acquisition of any new direct or indirect Subsidiaries by any Loan Party or any such Subsidiary
which on the date hereof is not a Guarantor or (ii) the acquisition of any property by any Loan
Party, which, in the judgment of the Collateral Agent, constitutes Collateral and shall not already
be subject to a perfected first priority (subject to the Carve Out and Liens permitted to be equal
or superior in priority pursuant to this Agreement) security interest in favor of the Collateral
Agent for the benefit of the Secured Parties, then in each case at the Borrowers’ expense:





          (A) in connection with the formation or acquisition of a Subsidiary within ten
(10) days after such formation or acquisition, cause each such Subsidiary, and cause
each direct and indirect parent of such Subsidiary (if it has not already done so),
to duly execute and deliver to the Collateral Agent a guaranty or guaranty
supplement, in form and substance satisfactory to the Collateral Agent and the
Required Lenders, guaranteeing the other Loan Parties’ obligations under the Loan
Documents;




          (B) within ten (10) days after such formation or acquisition, furnish to the
Collateral Agent a description of the real and personal properties of such
Subsidiary or the real and personal properties so acquired, in each case in detail
satisfactory to the Collateral Agent and the Required Lenders;




          (C) within ten (10) days after (A) such acquisition of property by any Loan
Party, duly execute and deliver, and cause each Loan Party to duly execute and
deliver, to the Collateral Agent such additional mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreement supplements
and other security agreements as specified by, and in form and substance
satisfactory to the Collateral Agent and the Required Lenders, securing payment of
all the Obligations of such Loan Party under the Loan Documents and constituting
Liens on all such properties and (B) such formation or acquisition of any new
Subsidiary, duly execute and deliver and cause such Subsidiary and each Loan Party
acquiring Equity Interests in such Subsidiary to duly execute and deliver to the
Collateral Agent mortgages, pledges, assignments, security agreement supplements,
intellectual property security agreement supplements and other security agreements
as specified by, and in form and substance satisfactory to the Collateral Agent and
the Required Lenders, securing payment of all of the obligations of such Subsidiary
or Loan Party, respectively, under the Loan Documents;




          (D) within fifteen (15) days after such formation or acquisition, take, and
cause each Loan Party and each newly acquired or newly formed Subsidiary to take,
whatever action (including, without limitation, the recording of mortgages, the
filing of Uniform Commercial Code financing statements, the



 









 







giving of notices and the endorsement of notices on title documents) may be
necessary or advisable in the opinion of the Collateral Agent to vest in the
Collateral Agent (or in any representative of the Collateral Agent designated by it)
valid and subsisting Liens on the properties purported to be subject to the
mortgages, pledges, assignments, security agreement supplements, intellectual
property security agreement supplements and security agreements delivered pursuant
to this Section 5.01(j), enforceable against all third parties in accordance
with their terms;




          (E) within thirty (30) days after such formation or acquisition, deliver to the
Collateral Agent, upon the request of the Collateral Agent in its sole discretion, a
signed copy of a favorable opinion, addressed to the Collateral Agent and the other
Secured Parties, of counsel for the Loan Parties acceptable to the Collateral Agent
and the Required Lenders as to (1) the matters contained in clauses (A), (C) and (D)
above, (2) such guaranties, guaranty supplements, mortgages, pledges, assignments,
security agreement supplements, intellectual property security agreement supplements
and security agreements being legal, valid and binding obligations of each Loan
Party party thereto enforceable in accordance with their terms and as to the matters
contained in clause (D) above, (3) such recordings, filings, notices, endorsements
and other actions being sufficient to create valid perfected Liens on such
properties, and (4) such other matters as the Collateral Agent and the Required
Lenders may reasonably request;




          (F) as promptly as practicable after such formation or acquisition, deliver,
upon the request of the Collateral Agent in its sole discretion, to the Collateral
Agent with respect to each parcel of real property owned or held by each Loan Party
and each newly acquired or newly formed Subsidiary title reports, surveys and
engineering, soils and other reports, and environmental assessment reports, each in
scope, form and substance satisfactory to the Collateral Agent and the Required
Lenders, provided, however, that to the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the foregoing items with respect
to such real property, such items shall, promptly after receipt thereof, be
delivered to the Collateral Agent; and




          (G) at any time and from time to time, promptly execute and deliver, and cause
each Loan Party and each newly acquired or newly formed Subsidiary to execute and
deliver, any and all further instruments and documents and take, and cause each Loan
Party and each newly acquired or newly formed Subsidiary to take, all such other
action as the Collateral Agent may deem necessary or desirable in obtaining the full
benefits of, or in perfecting and preserving the Liens of, such guaranties,
mortgages, pledges, assignments, security agreement supplements, intellectual
property security agreement supplements and security agreements;


provided, that notwithstanding anything to the contrary in this Section 5.01(j), the Loan
Parties shall only be required to use commercially reasonable efforts to cause each non-wholly
owned Subsidiary of any Loan Party to comply with the provisions of this Section 5.01(j).







 









 








          (k) Further Assurances. (i) Promptly upon request by any Agent, or any Lender through
the Administrative Agent, correct, and cause each of its Subsidiaries promptly to correct, any
material defect or error that may be discovered in any Loan Document or in the execution,
acknowledgment, filing or recordation thereof,





          (ii) promptly upon request by any Agent, or any Lender through the Administrative
Agent, do, execute, acknowledge, deliver any and all acts, deeds, conveyances, pledge
agreements, mortgages, deeds of trust, trust deeds, assignments, financing statements and
continuations thereof, termination statements, notices of assignment, transfers,
certificates, assurances and other instruments as any Agent, or any Lender through the
Administrative Agent, may reasonably require from time to time (and consent to the Agents
recording or filing such instrument) in order to (A) carry out more effectively the
purposes of the Loan Documents, (B) to the fullest extent permitted by applicable law,
subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or
interests to the Liens now or hereafter intended to be covered by any of the Collateral
Documents, (C) perfect and maintain the validity, effectiveness and priority of any of the
Collateral Documents and any of the Liens intended to be created thereunder and (D) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the
Secured Parties the rights granted or now or hereafter intended to be granted to the
Secured Parties under any Loan Document or under any other instrument executed in
connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or
is to be a party, and cause each of its Subsidiaries to do so; and




          (iii) no later than 30 days following the Closing Date, provide evidence of receipt of
ratings for the Facility from Moody’s and S&P, in each case acceptable to the Required
Lenders.



          (l) Control Account Agreements. Deposit all cash held or received by it (other than
the proceeds of the Term Loans, which shall be deposited in the DIP Proceeds Controlled Account)
into any account held by TLC Management, which is subject to a Control Account Agreement pursuant
to which the Agents are granted a first priority security interest in respect of such cash, in form
and substance satisfactory to the Administrative Agent and the Required Lenders, duly executed by
the financial institution at which such account is maintained. So long as no Default or Event of
Default has occurred and is continuing, the Borrowers may withdraw amounts from such account to
make payments consistent with the Budget.




          (m) Preparation of Environmental Reports. At the reasonable request of the
Administrative Agent or the Collateral Agent from time to time, provide to the Lenders within sixty
(60) days after such request, at the expense of the Borrowers, an environmental site assessment
report for any of its or its Subsidiaries’ properties described in such request, prepared by an
environmental consulting firm acceptable to the Required Lenders, indicating the presence or
absence of Hazardous Materials and the estimated cost of any compliance, removal or remedial action
in connection with any Hazardous Materials on such properties; without limiting the generality of
the foregoing, if any Agent or the Required Lenders determine at any time that a material risk
exists that any such report will not be provided within the time referred to above, such Agent or
the Required Lenders may retain an environmental consulting firm to prepare such






 









 







report at the expense of the Borrowers, and each Loan Party hereby grants and agrees to cause
any Subsidiary that owns any property described in such request to grant at the time of such
request to the Agents, the Lenders, such firm and any agents or representatives thereof an
irrevocable non-exclusive license, subject to the rights of tenants, to enter onto their respective
properties to undertake such an assessment.




          (n) Healthcare Matters. Notify the Administrative Agent of (i)any receipt by any Loan
Party of notice of any investigation or audit, or pending or threatened proceedings relating to,
any material violation by any Loan Party or any of its Subsidiaries of any Healthcare Law,
including, without regard to materiality, (A) any investigation or audit or proceeding involving
violation of any of the Medicare and/or Medicaid fraud and abuse provisions and (B) any criminal or
civil investigation initiated, claim filed or disclosure required by the Office of the Inspector
General, the Department of Justice, Centers for Medicare and Medicaid Services (formerly the Health
Care Financing Administration), or any other governmental authority, and (ii) any receipt by any
Loan Party of a written recommendation from any governmental authority or other regulatory body
that any Loan Party should have its licensure, provider or supplier number or accreditation
suspended, revoked, or limited in any material way, or have its eligibility to participate in
Medicare, Medicaid or any other government program to accept assignments or rights to reimbursement
under Medicaid, Medicare, or any other government program regulations suspended, revoked, or
limited in any material way.




          (o) Maintenance of Ratings. At all times from and after the date 30 days following
the Closing Date, maintain ratings for the Facility from Moody’s and S&P, in each case acceptable
to the Required Lenders.




          (p) Due Diligence. Use, and cause each of its Subsidiaries to use, its best efforts
to provide all due diligence materials reasonably requested by the Administrative Agent or the
Required Lenders or their legal and financial advisors (including due diligence materials with
respect to any proposed asset sales and any severance obligations of Parent or any of its
Subsidiaries to any employees or former employees).




          (q) Use of Proceeds. Use, and cause each of its Subsidiaries to use, the proceeds of
the Term Loans only in accordance with the Budget and in compliance with Section 5.04(a).




          (r) Critical Vendors. Cause the Borrowers to file a motion with the Bankruptcy Court
seeking approval of payment of critical vendors of the Borrowers acceptable to the Required Lenders
no later than three (3) Business Days after the Petition Date.




          (s) Filing of Claims, Schedules, and Statement of Affairs in the Cases. Cause the
Borrowers to file the respective schedules and statements of affairs with the Bankruptcy Court no
later than fifteen (15) days after the Petition Date.




          (t) Last Day to File Claims. Cause the Borrowers to obtain an order from the
Bankruptcy Court setting the bar date for prepetition claims in the Chapter 11 Case no later than
twenty (20) days after the Borrowers filed their respective schedules and statements of affairs
with the Bankruptcy Court.







 









 








          (u) Interim Order. Cause the Borrowers to file a motion with the Bankruptcy Court to
approve the Interim Order on the Petition Date.




          (v) Call Center. Cause the Borrowers to file all necessary motions with the
Bankruptcy Court seeking approval of (i) the rejection of the lease of Parent’s call center located
at 5280 Solar Drive, City of Mississauga, Province of Ontario, and (ii) any settlement with I.T.
Weapons Inc. with respect to the lease of the new call center located at 1535 Meyerside Drive, Unit
15 and 16, Mississauga, Ontario, Canada, if requested and approved by the Required Lenders, in the
case of each (i) and (ii), no later than ten (10) days after the Petition Date.




          (w) Cash Management System. Cause the Borrowers to file on the Petition Date a motion
with the Bankruptcy Court to approve the cash management systems used by the Borrowers, in a form
reasonably satisfactory to the Required Lenders.




          (x) Vision Source, L.P. Take reasonable steps at all times to enforce their rights
with respect to all distributions and payments owing to it or any of its Subsidiaries by Vision
Source, L.P. (including, without limitation, payments due under the promissory note dated as of
August 1, 2002, as amended, issued by Vision Source, L.P. in favor of TLC Capital Corporation, a
Delaware corporation).




          (y) Canadian Refractive Centers. Cause the Borrowers to use their best efforts to sell
the Canadian Refractive Centers on terms and conditions satisfactory to the Required Lenders.




          (z) Parent’s Assets. Cause the Borrowers to file all necessary motions with the
Bankruptcy Court and Canadian Court, as soon as practicable, to seek approval to transfer
substantially all assets from Parent to Holdco (other than the Canadian Refractive Centers).




          (aa) Canadian Court. Cause the Borrowers to seek all appropriate orders of the
Canadian Court, reasonably satisfactory to the Required Lenders, which shall correspond to such
court orders entered by the Bankruptcy Court, in each case within seven (7) days of the entry of
such order by the Bankruptcy Court.




          (bb) Restructuring Monitor. Cause (i) the Restructuring Monitor to be in place and
operating pursuant to an engagement letter, in form and substance reasonably satisfactory to the
Required Lenders, and (ii) such engagement letter to remain in full force and effect.




          (cc) Kremer Claims. To the extent that settlement of the Kremer Claims, in form and
substance satisfactory to the Required Lenders, is not reached on or before January 15, 2010, file
and diligently pursue appropriate contested proceedings seeking to subordinate the Kremer Claims to
the obligations owing to general unsecured creditors of Parent and its Subsidiaries.




          SECTION 5.02. Negative Covenants. So long as any Term Loan or any other Obligation
(other than contingent indemnification and reimbursement Obligations in respect of which no claim
for payment has been asserted by the Person entitled thereto) of any Loan Party under any Loan
Document shall remain unpaid, each Loan Party will not, at any time:







 









 








          (a) Liens, Etc. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Lien on or with respect to any of its
properties of any character (including, without limitation, accounts) whether now owned or
hereafter acquired, or sign or file or suffer to exist, or permit any of its Subsidiaries to sign
or file or suffer to exist, under the Uniform Commercial Code (or similar law) of any jurisdiction,
a financing statement that names any Loan Party or any of its Subsidiaries as debtor, or sign or
suffer to exist, or permit any of its Subsidiaries to sign or suffer to exist, any security
agreement authorizing any secured party thereunder to file such financing statement, or assign, or
permit any of its Subsidiaries to assign, any accounts or other right to receive income, except:





          (i) Liens created pursuant to the Loan Documents, Interim Order and the Final Order;




          (ii) Permitted Liens;




          (iii) Liens existing on the date hereof and described on Schedule 4.01(p)
hereto;




          (iv) purchase money Liens upon or in real property or equipment acquired or held by
Parent or any of its Subsidiaries in the ordinary course of business to secure the purchase
price of such property or equipment or to secure Debt incurred solely for the purpose of
financing the acquisition, construction, improvement or installation of any such property
or equipment to be subject to such Liens, or Liens existing on any such property or
equipment at the time of acquisition (other than any such Liens created in contemplation of
such acquisition that do not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount; provided, however,
that no such Lien shall extend to or cover any property other than the property or
equipment being acquired, constructed, improved or installed (or the proceeds of any of the
foregoing), and no such extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed or replaced; and
provided further that the aggregate principal amount of the Debt hereafter incurred secured
by Liens permitted by this clause (iv) shall not exceed the amount permitted under
Section 5.02(b)(iv) at any time outstanding; and




          (v) Liens arising under Capitalized Leases permitted under Section 5.02(b)(iv)
provided that no such Lien shall extend to or cover any Collateral or assets other than the
assets subject to such Capitalized Leases (or the proceeds thereof).



          (b) Debt. Create, incur, assume or suffer to exist, or permit any of its Subsidiaries
to create, incur, assume or suffer to exist, any Debt, except:





          (i) Debt under the Loan Documents;




          (ii) Debt under the Prepetition Loan Documents;




          (iii) (A) unsecured Debt arising in respect of purchasing card and/or corporate credit
card programs not to exceed in the aggregate $1,000,000 at any time



 









 







outstanding, and (B) unsecured Debt (not specified in clause (A) above) not to exceed
in the aggregate $2,000,000 at any time outstanding, in the case of each of (A) and (B), as
reflected in the Budget;




          (iv) (x) Capitalized Leases and Debt secured by purchase money Liens existing on the
date hereof and listed on Schedule 5.02(b) hereto; provided that such Capitalized Leases
and Debt shall not be refinanced, and Capitalized Leases and Debt secured by purchase money
Liens hereafter incurred not to exceed an aggregate principal amount of $1,500,000 at any
time outstanding, and (y) in the case of Capitalized Leases and Debt secured by purchase
money Liens to which any Subsidiary of Parent is a party, Debt of Parent of the type
described in clause (i) of the definition of “Debt” guaranteeing the Obligations of such
Subsidiary under such Capitalized Leases and Debt secured by purchase money Liens;




          (v) Debt owed to any Borrower or a wholly owned Subsidiary of Parent, which Debt shall
(x) in the case of Debt owed to a Loan Party, constitute Pledged Debt, (y) be on terms
acceptable to the Administrative Agent and the Required Lenders and (z) be otherwise
permitted under the provisions of Section 5.02(f); and




          (vi) Debt not otherwise specified above and existing on the date hereof and described
in Schedule 5.02(b) hereto; provided that such Debt shall not be refinanced.



          (c) Change in Nature of Business. Make, or permit any of its Subsidiaries to make,
any material change in the nature of its business as carried on at the date hereof.




          (d) Mergers, Etc. Merge into or consolidate with any Person or permit any Person to
merge into it, or permit any of its Subsidiaries to do so except that any Subsidiary of Parent may
merge into or consolidate with any other Subsidiary of Parent; provided that in the case of any
such merger or consolidation, the Person formed by such merger or consolidation shall be a wholly
owned Subsidiary of Parent and provided further that (i) in the case of any such merger or
consolidation to which a Guarantor is a party, the Person formed by such merger or consolidation
shall be a Guarantor, (ii) notwithstanding the foregoing, no merger or consolidation shall be
consummated between a Borrower and a Person that is not a Borrower, (iii) in each case, immediately
before and after giving effect thereto, no Default shall have occurred and be continuing and, (iv)
in the case of any such merger to which Parent is a party, Parent is the surviving entity.




          (e) Sales, Etc. of Assets. Sell, lease, transfer or otherwise dispose of, or permit
any of its Subsidiaries to sell, lease, transfer or otherwise dispose of, any assets, or grant any
option or other right to purchase, lease or otherwise acquire, or permit any of its Subsidiaries to
grant any option or other right to purchase, lease or otherwise acquire, any assets, except





          (i) the sale of the Canadian Refractive Centers on terms and conditions satisfactory
to the Required Lenders; provided that the Borrowers shall, on the date of receipt by any
of them or any of their respective Subsidiaries of the Net Cash Proceeds from such sale,
prepay the Term Loans pursuant to, and in the amount set forth



 









 







in, Section 2.04 and apply the remaining Net Cash Proceeds, if any, in
accordance with Section 2.04;




          (ii) sales of excess, obsolete or worn out equipment in the ordinary course of its
business;




          (iii) sales, transfers or other dispositions of assets among Loan Parties subject to
Section 5.01(i) hereof;




          (iv) the sale of any assets constituting a Cash Equivalent and maintained in a
Securities Account, subject to the terms and conditions of the applicable Securities
Account Control Agreement; and




          (v) mergers and consolidations permitted under Section 5.02(d), Investments
permitted under Section 5.02(f) and transactions permitted under Section
5.02(g).



          (f) Investments in Other Persons. Make or hold, or permit any of its Subsidiaries to
make or hold, any Investment in any Person, except:





          (i) Investments by Parent and its Subsidiaries in their Subsidiaries outstanding on
the date hereof;




          (ii) loans and advances to employees in the ordinary course of the business of Parent
and its Subsidiaries as presently conducted in an aggregate principal amount not to exceed
$50,000 at any time outstanding;




          (iii) Investments by Parent and its Subsidiaries in Cash Equivalents; and




          (iv) Investments existing on the date hereof and described on Schedule 4.01(q)
hereto;



          (g) Restricted Payments. Declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity Interests now or hereafter outstanding,
return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as
such, make any distribution of assets, Equity Interests, obligations or securities to its
stockholders, partners or members (or the equivalent Persons thereof) as such, or permit any of its
Subsidiaries to do any of the foregoing, or permit any of its Subsidiaries to purchase, redeem,
retire, defease or otherwise acquire for value any Equity Interests in Parent, except, so long as
no Default shall have occurred and be continuing at the time of any action described below or would
result therefrom: (i) each Subsidiary of the Parent may make dividends or other distributions to
each Loan Party and to each other owner of Equity Interests of such Subsidiary based on their
relative ownership interests of such Equity Interests and consistent with the constituent documents
of such Subsidiary and its course of dealings with the owners of its Equity Interests (including,
without limitation, to allow such Loan Party or other owner to pay its franchise fees or similar
taxes and fees required to maintain its corporate existence and its income taxes or the incomes
taxes of any consolidated or affiliated group of which it is a






 









 







member; and (ii) the Borrowers may declare and pay cash dividends to Parent not to exceed
$200,000 in the aggregate to permit Parent to pay (A) reasonable and customary corporate and
operating expenses (including reasonable out of pocket expenses for legal, administrative and
accounting services provided by third parties, and compensation, benefits and other amounts payable
to officers and employees in connection with their employment in the ordinary course of business
and to board of director observers) and (B) franchise fees or similar taxes and fees required to
maintain its organizational existence.




          (h) Amendments of Constitutive Documents. Amend, or permit any of its Subsidiaries to
amend, its certificate of incorporation or bylaws or other constitutive documents other than as
required by law or as does not have a materially adverse effect on the interests of the Lenders, in
each case, as promptly disclosed to the Administrative Agent.




          (i) Accounting Changes. Make or permit, or permit any of its Subsidiaries to make or
permit, any change in (i) accounting policies or reporting practices, except as required or
permitted by generally accepted accounting principles, or (ii) Fiscal Year.




          (j) Prepayments, Etc., of Debt. (i) Prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Debt, except the prepayment of the Term Loan in accordance with the
terms of this Agreement or (ii) amend, modify or change in any manner any term or condition of any
Subordinated Debt, or permit any of its Subsidiaries to do any of the foregoing.




          (k) Negative Pledge. Enter into or suffer to exist, or permit any of its Subsidiaries
to enter into or suffer to exist, any agreement prohibiting or conditioning the creation or
assumption of any Lien upon any of its property or assets except (i) agreements in favor of the
Secured Parties or (ii) prohibitions or conditions under (A) any purchase money Debt permitted by
Section 5.02(b)(iv) solely to the extent that the agreement or instrument governing such
Debt prohibits a Lien on the property acquired with the proceeds of such Debt or (B) any
Capitalized Lease permitted by Section 5.02(b)(iv) solely to the extent that such
Capitalized Lease prohibits a Lien on the property subject thereto.




          (l) Speculative Transactions. Engage, or permit any of its Subsidiaries to engage, in
any transaction involving commodity options or futures contracts or any similar speculative
transactions.




          (m) Hedge Agreements. Enter or permit any of its Subsidiaries to enter into any Hedge
Agreement.




          (n) Restrictions Affecting Subsidiaries. Directly or indirectly, enter into or suffer
to exist, or permit any of its Subsidiaries to enter into or suffer to exist, any agreement or
arrangement limiting the ability of any of its Subsidiaries to declare or pay dividends or other
distributions in respect of its Equity Interests to the Borrowers or repay or prepay any Debt owed
to, make loans or advances to, or otherwise transfer assets to or make Investments in, the
Borrowers or any Subsidiary of the Borrowers (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise), except the Loan
Documents; provided, that this Section shall not limit the ability of any Subsidiary to pay the






 









 







Borrowers or another Subsidiary for goods or services provided in the ordinary course of
business.




          (o) ERISA. Maintain, sponsor, participate in or contribute to any Plan or
Multiemployer Plan; or incur any material liability under Title I or any liability under Title IV
of ERISA for which any Loan Party could be reasonably expected to be liable, or permit any of its
Subsidiaries or ERISA Affiliates to do any of the foregoing.




          (p) Material Amendments. Make, or permit any of its Subsidiaries to make, any
material amendment to any agreements with any employee or independent contractor (including,
without limitation, any optometrist or surgeon providing refractive laser or other services) unless
the Loan Parties reasonably determine that such amendment results in cash savings or improved
liquidity for the Loan Parties after consultation with the Required Lenders.




          (q) Prepetition Indebtedness. Pay or discharge, or permit any of its Subsidiaries to
pay or discharge, or cause to be paid or discharged, any Debt of such Loan Party incurred before
the Petition Date other than payments:





          (i) approved by the Bankruptcy Court and consented to by the Required Lenders;




          (ii) consistent with the Budget;




          (iii) required to be made to the Prepetition Agents and the Prepetition Lenders
pursuant to the Orders (including, without limitation, amounts payable to the Special
Counsel, the Financial Adviser, Stikeman Elliott LLP, as Canadian counsel, and Pachulski
Stang Ziehl & Jones LLP, as Delaware counsel, each in connection with their representation
of certain Prepetition Lenders); and




          (iv) as required in the Plan of Reorganization, on or about the effective date of the
Plan of Reorganization (except as otherwise expressly provided for therein).


None of the Loan Parties shall, without the consent of the Required Lenders, file any motion with
the Bankruptcy Court in accordance with Section 546(h) of the Bankruptcy Code seeking to return any
goods shipped to any of the Loan Parties prior to the Petition Date.




          (r) Bankruptcy Chapter 11 Cases. Seek, consent or suffer to exist or permit any of
its Subsidiaries to seek, consent or suffer to exist (i) any modification, stay, vacation or
amendment to the Orders; (ii) a priority claim for any administrative expense or unsecured claim
against any Borrower or any Guarantor (now existing or hereafter arising of any kind or nature
whatsoever, including, without limitation, any administrative expense of any kind specified in
Section 503(b) or 507(b) of the Bankruptcy Code or, from and after the entry of the Final Order,
Section 506(c) of the Bankruptcy Code) equal to or superior to the priority claim of the applicable
Agent and the Lenders in respect to the Obligations other than the Carve Out; and (iii) any Lien on
any Collateral having a priority equal or superior to the Liens in favor of the applicable Agent
and the Lenders in respect of the Obligations or the Liens in favor of the applicable Prepetition
Agent and the Prepetition Lenders in respect of the Prepetition Lender






 









 







Debt, in each case other than Liens expressly permitted to be equal or superior in priority
pursuant to this Agreement.




          (s) Success and Other Similar Fees. Make, or permit any of its Subsidiaries to make
payment of any success, transaction, opinion or similar fee to any financial adviser engaged by
Parent or any of its Subsidiaries or Affiliates.




          (t) Control Account Agreements. Permit the aggregate amount of cash maintained by any
Loan Party at any financial institution at any time to exceed $5,000 for more than one Business Day
unless such Loan Party has (i) executed and delivered to the Agents a Control Account Agreement, in
form and substance reasonably satisfactory to the Required Lenders and executed by such financial
institution, and (ii) taken all other steps necessary or, in the opinion of the Collateral Agent,
desirable to ensure that the Collateral Agent has a perfected first priority security interest in
such cash (subject to the Carve Out and Liens permitted to be equal or superior in priority
pursuant to this Agreement); provided, that if such Loan Party is unable to obtain such agreement
from such financial institution, such Loan Party shall promptly transfer all cash maintained at
such financial institution to a financial institution from which such Loan Party has obtained such
an agreement.




          (u) DIP Proceeds Controlled Account. Deposit any cash held or received by it into the
DIP Proceeds Controlled Account other than proceeds of the Term Loans in accordance with the terms
hereof.




          SECTION 5.03. Reporting Requirements. So long as any Term Loan or any other
Obligation (other than contingent indemnification and reimbursement Obligations in respect of which
no claim for payment has been asserted by the Person entitled thereto) of any Loan Party under any
Loan Document shall remain unpaid, or any Lender shall have any Commitment hereunder, each Loan
Party will cause to be furnished to the Agents and the Lenders:




          (a) Default Notice. As soon as possible and in any event within two days after any
executive officer of any Loan Party is actually aware of the occurrence of each Default or any
event, development or occurrence reasonably likely to have a Material Adverse Effect continuing on
the date of such statement, a statement of the Chief Financial Officer of the Administrative
Borrower setting forth details of such Default and the action taken and proposed to be taken with
respect thereto.




          (b) Annual Financials. As soon as available and in any event within 90 days after the
end of each Fiscal Year, a copy of the annual audit report for such year for Parent and its
Subsidiaries, including therein Consolidated and, if otherwise provided, consolidating balance
sheets of Parent and its Subsidiaries as of the end of such Fiscal Year and Consolidated and, if
otherwise provided, consolidating statements of income and a Consolidated statement of cash flows
of Parent and its Subsidiaries for such Fiscal Year, in each case accompanied by (i) an opinion as
to such audit report of Ernst & Young, LLP or other independent public accountants of recognized
standing acceptable to the Required Lenders and (ii) a report of such independent public
accountants as to Parent’s internal controls required under Section 404 of the Sarbanes-Oxley Act
of 2002, if any, in each case certified in a manner to which the Required Lenders have not
objected, together with (A) a certificate of such accounting firm to the Lenders stating that in






 









 







the course of the regular audit of the business of Parent and its Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge that a Default has occurred and is continuing, or
if, in the opinion of such accounting firm, a Default has occurred and is continuing, a statement
as to the nature thereof, (B) a schedule in form satisfactory to the Administrative Agent and the
Required Lenders of the computations used by such accountants in determining, as of the end of such
Fiscal Year, compliance with the covenants contained in Section 5.04 and (C) a certificate
of the Chief Financial Officer of the Administrative Borrower stating that (1) no Default has
occurred and is continuing or, if a Default has occurred and is continuing, a statement as to the
nature thereof and the action that has been taken and is proposed with respect thereto and (2)
Parent and its Subsidiaries have paid to each appropriate taxing authority the full amount that
each is required to pay in respect of income tax for such year.




          (c) Quarterly Financials. As soon as available and in any event within 45 days after
the end of each of the first three quarters of each Fiscal Year, Consolidated and, if otherwise
provided, consolidating balance sheets of Parent and its Subsidiaries as of the end of such quarter
and Consolidated and, if otherwise provided, consolidating statements of income and Consolidated
statement of cash flows of Parent and its Subsidiaries for the period commencing at the end of the
previous fiscal quarter and ending with the end of such fiscal quarter and a Consolidated and, if
otherwise provided, consolidating statements of income and a Consolidated statement of cash flows
of Parent and its Subsidiaries for the period commencing at the end of the previous Fiscal Year and
ending with the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding Fiscal Year, all in
reasonable detail and duly certified (subject to normal year-end audit adjustments and the absence
of footnotes) by the Chief Financial Officer of the Administrative Borrower as having been prepared
in accordance with GAAP, together with (i) a certificate of said officer stating that no Default
has occurred and is continuing or, if a Default has occurred and is continuing, a statement as to
the nature thereof and the action that has been taken and is proposed with respect thereto and (ii)
a schedule in form satisfactory to the Administrative Agent and the Required Lenders of the
computations used by Parent and its Subsidiaries in determining compliance with the covenants
contained in Section 5.04.




          (d) Cash Flow Forecast. On Thursday of each week (or, if such day is not a Business
Day, on the immediately succeeding Business Day), rolling thirteen week Consolidated cash flow
forecasts of Parent and its Subsidiaries and an updated comparison to the budgeted amounts from the
prior week’s Consolidated cash flow projections in a form satisfactory to the Required Lenders.




          (e) Chief Financial Officer Report and Certificate. On Thursday of each week (or, if
such day is not a Business Day, on the immediately succeeding Business Day),





          (i) a report of the Chief Financial Officer of the Administrative Borrower which sets
forth:




          (A) a reconciliation of actual results for the prior week to the corresponding
amounts reflected in the Budget, with explanations for any variance in any line item
in excess of 10%;



 









 






          (B) a reconciliation of each of “total operating cash receipts” and “total
operating cash disbursements” (as reflected in the Budget and measured weekly on a
cumulative basis starting with the period ending three (3) weeks after the Petition
Date) to the corresponding amounts reflected in the Budget, with explanations for
any variance by line item in excess of 10%;




          (C) information with respect to asset sales, cost savings, facility closures
and such other information reasonably requested by the Required Lenders; and




          (ii) a certificate of the Chief Financial Officer of the Administrative Borrower (A)
stating that no proceeds of the Term Loans have been used for any item not set forth in the
Budget and (B) as to (1) Liquidity as of Friday of the previous week, (2) any changes to or
non-compliance with either of the Liquidity Guidelines through Friday of the previous week,
together with reasonable supporting detail and calculations, (3) the aggregate amount of
severance obligations due and payable to all employees or former employees of Parent or any
of its Subsidiaries during the previous week, and (4) the aggregate amount of severance
payments made to all employees or former employees of Parent and any of its Subsidiaries
during the previous week.



          (f) Litigation. Promptly after the commencement thereof, notice of all actions,
suits, investigations, litigation and proceedings before any Governmental Authority affecting any
Loan Party or any of its Subsidiaries of the type described in Section 4.01(f), and
promptly after the occurrence thereof, notice of any adverse change in the status or the financial
effect on any Loan Party or any of its Subsidiaries of the Disclosed Litigation from that described
on Schedule 4.01(f) hereto. Promptly after receipt thereof, notice of any Governmental
Authority or other Person that such Governmental Authority or other Person has rescinded or not
renewed, or intends to rescind or not renew, any material license, accreditations and approvals of
any Governmental Authorities and all other Persons necessary for any Loan Party or any of its
Subsidiaries to own its assets or to carry on its business.




          (g) Securities Reports. Promptly after the sending or filing thereof, copies of all
proxy statements, financial statements and reports that any Loan Party or any of its Subsidiaries
sends to its stockholders, and copies of all regular, periodic and special reports, and all
registration statements, that any Loan Party or any of its Subsidiaries files with the Securities
and Exchange Commission or any governmental authority that may be substituted therefor, or with any
national securities exchange.




          (h) Creditor Reports. Promptly after the furnishing thereof, copies of any statement
or report furnished to any holder of Debt securities of any Loan Party or of any of its
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not
otherwise required to be furnished to the Lender pursuant to any other clause of this Section
5.03(h).




          (i) Environmental Conditions. Promptly after the assertion or occurrence thereof,
notice of any Environmental Action against or of any noncompliance by any Loan Party or any of its
Subsidiaries or any of their respective properties, with any Environmental Law or






 









 







Environmental Permit that could reasonably be expected to have a Material Adverse Effect, as
well as any actual or threatened release, pollution or other environmental condition at or from any
of the properties of any Loan Party or any of its Subsidiaries, that could reasonably be expected
to constitute a violation of any Environmental Law.




          (j) Real Property. As soon as available and in any event within 30 days after the end
of each Fiscal Year, a list and description (including the street address, county or other relevant
jurisdiction, state, record owner, book value thereof and, in the case of leases of property,
lessor, lessee, expiration date and annual rental cost thereof) of all real property acquired or
leased by any Loan Party during such Fiscal Year.




          (k) Insurance. As soon as available and in any event no later than January
15th of each year, a report summarizing the insurance coverage (specifying type, amount
and carrier) in effect for Parent and its Subsidiaries as of the last day of the immediately
preceding Fiscal Year and containing such additional information as any Agent, or any Lender
through the Administrative Agent, may reasonably specify.




          (l) Casualty Losses. Promptly upon learning of any casualty loss or event not insured
against in an amount in excess of $100,000, notice of such loss or event.




          (m) Other Information. Such other information respecting the business, condition
(financial or otherwise), operations, performance, properties or prospects of any Loan Party or any
of its Subsidiaries as any Agent, or any Lender through the Administrative Agent, may from time to
time reasonably request, including without limitation updating any information previously provided
pursuant to Section 9.12 hereof.




          (n) Monthly Financials. As soon as available and in any event within thirty (30) days
after the end of each month, Consolidated balance sheets, statements of income and statements of
cash flows of Parent and its Subsidiaries (i) for such month, and (ii) for the portion of the
Fiscal Year then ended, setting forth in each case, in comparative form, the corresponding figures
for the corresponding date or period of the preceding Fiscal Year, all in reasonable detail and
duly certified by the Chief Financial Officer of the Administrative Borrower as having been
prepared in accordance with GAAP (subject to normal year-end adjustments and the absence of
footnotes, together with a certificate of said officer stating that no Default has occurred and is
continuing or, if a Default has occurred and is continuing, a statement as to the nature thereof
and the action that has been taken and is proposed with respect thereto and, an updated comparison
to the budgeted amounts for such period set forth in the Budget, in a form satisfactory to the
Required Lenders.




          (o) Termination of Contracts, Etc. Promptly after the occurrence thereof, written
notice of (i) termination of any material contract to which any Loan Party is a party, (ii) failure
of any franchisee to make any payment in an aggregate amount in excess of $250,000 more than three
months past due to any Subsidiary, and (iii) any tax audit or assessment of taxes on any Loan
Party.




          (p) Restructuring Monitor Report. On Thursday of each week (or if such day is not a
Business Day, on the immediately succeeding Business Day), a report with respect to the






 









 







Budget from the Restructuring Monitor reasonably satisfactory in all respects to the
Administrative Agent and the Required Lenders.




          SECTION 5.04. Financial Covenants. So long as any Term Loan or any other Obligation
(other than contingent indemnification and reimbursement Obligations in respect of which no claim
for payment has been asserted by the Person entitled thereto) of any Loan Party under any Loan
Document shall remain unpaid, or any Lender shall have any Commitment hereunder, each Loan Party
will:




          (a) Budget Compliance. Not make or permit any of its Subsidiaries to make payments
other than those set forth in the Budget; provided, that:





          (i) “total operating cash receipts” (as reflected in the Budget and measured weekly on
a cumulative basis starting with the period ending three (3) weeks after the Petition Date)
may be less than the corresponding amounts set forth in the Budget if such “total operating
cash receipts” (A) for all cumulative weekly periods ending from the date three (3) weeks
after the Petition Date to the date six (6) weeks after the Petition Date, are not less
than 88% of the corresponding amounts reflected in the Budget, (B) for all cumulative
weekly periods ending from the date seven (7) weeks after the Petition Date to the date
twelve (12) weeks after the Petition Date, are not less than 90% of the corresponding
amounts reflected in the Budget, and (C) for all cumulative weekly periods ending from and
after the date thirteen (13) weeks after the Petition Date, are not less than 92.5% of the
corresponding amounts reflected in the Budget;




          (ii) “total operating cash disbursements” (as reflected in the Budget and measured
weekly on a cumulative basis starting with the period ending three (3) weeks after the
Petition Date) may be more than the corresponding amounts set forth in the Budget if such
“total operating cash disbursements” (A) for all cumulative weekly periods ending from the
date three (3) weeks after the Petition Date to the date six (6) weeks after the Petition
Date, are not more than 112% of the corresponding amounts reflected in the Budget, (B) for
all cumulative weekly periods ending from the date seven (7) weeks after the Petition Date
to the date twelve (12) weeks after the Petition Date, are not more than 110% of the
corresponding amounts reflected in the Budget, and (C) for all cumulative weekly periods
ending from and after the date thirteen (13) weeks after the Petition Date, are not more
than 107.5% of the corresponding amounts reflected in the Budget;




          (iii) each of the line items for “marketing” and “occupancy” respectively (as
reflected in the Budget and measured weekly on a rolling three (3) week basis starting with
the period ending three (3) weeks after the Petition Date) may be more than the
corresponding amounts set forth in the Budget if each such line item is not more than 115%
of the corresponding amounts reflected in the Budget; and




          (iv) the sum of the line items for “refractive center procedures” and “refractive
access procedures” (as reflected in the Budget and measured weekly on a rolling three (3)
week basis starting with the period ending three (3) weeks after the



 









 







Petition Date) may be less than the sum of the corresponding amounts set forth in the
Budget if such sum is not less than 85% of the sum of the corresponding amounts reflected
in the Budget.



          (b) Minimum Liquidity. Cause minimum Liquidity at all times to be no less than
$2,500,000.




          (c) Capital Expenditures. Make, or permit any of its Subsidiaries to make, any
Capital Expenditures that would cause the aggregate of all Capital Expenditures made by Parent and
its Subsidiaries during any Fiscal Year to exceed the amounts as set forth in the Budget.




ARTICLE VI




EVENTS OF DEFAULT



          SECTION 6.01. Events of Default. If any of the following events (“Events of Default”)
shall occur and be continuing:




          (a) (i) the Borrowers shall fail to pay any principal of any Term Loan when the same shall
become due and payable or (ii) the Borrowers shall fail to pay any interest on any Term Loan, or
any Loan Party shall fail to make any other payment under any Loan Document, in each case under
this clause (ii) within three (3) calendar days after the same shall become due and payable;




          (b) any representation or warranty made by any Loan Party (or any of its officers) under or in
connection with any Loan Document shall prove to have been incorrect in any material respect when
made;




          (c) Parent shall fail to perform or observe any term, covenant or agreement contained in
Section 5.01(e) or (i), Section 5.02 or Section 5.04;




          (d) any Loan Party shall fail to perform or observe any other term, covenant or agreement
contained in any Loan Document on its part to be performed or observed if such failure shall remain
unremedied for fifteen (15) days after the earlier of the date on which (i) any executive officer
of a Loan Party becomes actually aware of such failure or (ii) written notice thereof shall have
been given to the Borrowers by any Agent or any Lender;




          (e) (i) any Loan Party or any of its Subsidiaries shall fail to pay any principal of, premium
or interest on or any other amount payable in respect of any postpetition Debt, or any prepetition
Debt if, by order of the Bankruptcy Court issued with respect to such prepetition Debt, the default
thereunder entitles the holder thereof to relief from the automatic stay of Section 362 of the
Bankruptcy Code, in an aggregate amount in excess of $250,000 (excluding Debt outstanding under the
Loan Documents), or (ii) if any other event (other than with respect to the filing of the Cases)
shall occur or condition shall exist under any agreement or instrument relating to any such Debt
and shall continue after the applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt or otherwise to cause, or to permit the






 









 







holder thereof to cause, such Debt to mature, or (iii) if any such Debt shall be declared to
be due and payable or required to be prepaid or redeemed (other than by a regularly scheduled
required prepayment or redemption), purchased or defeased, or (iv) an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in the case of each (ii) through (iv),
prior to the stated maturity thereof;




          (f) any judgments or orders, either individually or in the aggregate, for the payment of money
in excess of $250,000 (after application of any insurance as to which the applicable insurance
company has accepted responsibility to cover such judgment or order, but inclusive of any
deductible amount) shall be rendered against any Loan Party or any of its Subsidiaries after the
Petition Date and either (i) enforcement proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of fifteen (15) consecutive days during
which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise,
shall not be in effect;




          (g) any non monetary judgment or order shall be rendered against any Loan Party or any of its
Subsidiaries after the Petition Date that is reasonably likely to have a Material Adverse Effect,
and there shall be any period of fifteen (15) consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect;




          (h) any provision of any Loan Document after delivery thereof pursuant to Section 3.01
or Section 5.01(j) shall for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against any Loan Party party to it, or any such
Loan Party shall so state in writing;




          (i) any Collateral Document or financing statement after delivery thereof pursuant to
Section 3.01 or Section 5.01(j) shall for any reason (other than pursuant to the
terms thereof) cease to create a valid and perfected first priority (subject to the Carve Out and
other Liens permitted to be equal or superior in priority under this Agreement) lien on and
security interest in Collateral purported to be covered thereby, except as otherwise provided in
such Collateral Document;




          (j) a Change of Control shall occur;




          (k) (i) any Loan Party shall be enjoined from conducting any material part of its business,
(ii) there shall occur any strike, lockout, labor dispute, embargo, condemnation, act of God or
public enemy, or other casualty which causes the cessation or substantial curtailment of a material
portion of the revenue producing activities of Parent or any of its Subsidiaries, or (iii) or there
shall occur any damage to, or loss, theft or destruction of, any assets of any Loan Party or any of
its Subsidiaries, that are used or useful in a material portion of their business (not fully
covered by insurance as to which the applicable insurance company has accepted full responsibility
to cover such damage, loss, theft or destruction);




          (l) the Bankruptcy Court (or the Canadian Court, as applicable) shall enter any order (i)
amending, reversing, revoking, supplementing, altering, staying, vacating, rescinding or otherwise
modifying the Interim Order, the Final Order or any other order with respect to the Chapter 11
Cases affecting in any material respect this Agreement or the Loan






 









 







Documents, without the Required Lenders’ consent, (ii) appointing a Chapter 11 trustee or an
examiner, with enlarged powers relating to the operation of the business pursuant to Section 1104
of the Bankruptcy Code (powers beyond those set forth in Section 1106(a)(3) and (4) and 1106(b) of
the Bankruptcy Code) in the Chapter 11 Cases, or a receiver, interim-receiver, receiver and
manager, trustee in bankruptcy of any official with similar powers under CCAA or BIA with respect
to any of the Borrowers, any of the Guarantors or any of their respective assets, (iii) dismissing
any of the Chapter 11 Cases or converting any of the Chapter 11 Cases to a case under Chapter 7 of
the Bankruptcy Code, or (iv) granting relief from the automatic stay to any creditor holding or
asserting a Lien or reclamation claim on the assets of any of Borrower to permit such creditor to
foreclose upon or to reclaim Collateral with a value in excess of $250,000;




          (m) a motion shall be filed by any of the Borrowers for the approval of any other
Superpriority Claim in the Chapter 11 Cases (other than the Carve Out) which is pari passu with or
senior to the claims of any of the Agents or the Lenders against any of the Loan Parties unless
after giving effect to the transactions contemplated by such motion, all Obligations of any Loan
Party under the Loan Documents (other than contingent indemnification and reimbursement Obligations
in respect of which no claim for payment has been asserted by the Person entitled thereto) shall be
paid in full in cash;




          (n) [Reserved];




          (o) the failure of the Bankruptcy Court to enter the Interim Order, in form and substance
reasonably satisfactory to the Required Lenders, within seven (7) days after the filing of the
motion to approve the Interim Order;




          (p) the failure of the Borrowers to have filed with the Bankruptcy Court the Plan of
Reorganization and a disclosure statement with respect thereto, each in form and substance
reasonably satisfactory to the Required Lenders (including, without limitation, the terms set forth
in the Plan Term Sheet), within ten (10) Business Days of the Petition Date;




          (q) the failure of the Bankruptcy Court to enter the Final Order, in form and substance
reasonably satisfactory to the Required Lenders (including, without limitation, approval of the
Facility) within forty-five (45) days after the date of entry of the Interim Order;




          (r) the failure of the Borrowers to obtain an order from the Bankruptcy Court approving the
disclosure statement with respect to the Plan of Reorganization, in form and substance reasonably
satisfactory to the Required Lenders, within sixty (60) days of the Petition Date;




          (s) the failure of the Borrowers to obtain an order from the Bankruptcy Court (and in the case
of Parent, the Canadian Court) confirming the Plan of Reorganization, in form and substance
reasonably satisfactory to the Required Lenders (including, without limitation, the terms set forth
in the Plan Term Sheet), within one hundred and twenty (120) days of the Petition Date;







 









 








          (t) the failure of the Plan of Reorganization, in form and substance reasonably satisfactory
to the Required Lenders, to become effective within one hundred and fifty (150) days of the
Petition Date;




          (u) the failure of the Borrowers to comply in all material respects with the Orders or any
other order of the Bankruptcy Court applicable to the Borrowers;




          (v) any of the Borrowers shall file a motion in any of the Chapter 11 Cases (i) except as
provided in the Orders or in the Plan of Reorganization, to use cash collateral of the Lenders
under Section 363(c) of the Bankruptcy Code without the Required Lenders’ consent, (ii) to recover
from any portions of the Collateral any costs or expenses of preserving or disposing of such
Collateral under Section 506(c) of the Bankruptcy Code, or (iii) to take any other action or
actions adverse to the Lenders or their rights and remedies hereunder or under any of the other
Loan Documents or any of the documents evidencing or creating the Secured Parties’ interest in any
of the Collateral;




          (w) any Material Adverse Effect shall occur;




          (x) the occurrence of (i) any material deterioration in the value of the Collateral of the
Loan Parties taken as whole or (ii) any material damage to or loss of assets of the Loan Parties
taken as a whole (after application of any insurance as to which the applicable insurance company
has accepted responsibility to cover such damage or loss, but inclusive of any deductible amount);




          (y) an order terminating exclusivity has been entered by the Bankruptcy Court or requested of
the Bankruptcy Court unless actively contested by the Borrowers;




          (z) (i) any filing with respect to any Borrower, whether voluntary or involuntary, under
Chapter 11 or Chapter 7 of the Bankruptcy Code, BIA or CCAA, shall be commenced without the prior
consent of the Required Lenders, or (ii) any filing with respect to any direct or indirect
Subsidiary of Parent (other than Holdco and TLC Management), whether voluntary or involuntary,
under Chapter 11 or Chapter 7 of the Bankruptcy Code, BIA or CCAA shall have been commenced; or




          (aa) the Restructuring Monitor shall cease to be in place and operating pursuant to an
engagement letter, in form and substance reasonably satisfactory to the Required Lenders, or such
engagement letter shall cease to be in full force and effect,



then, and in any such event, with the consent of the Required Lenders, the Administrative Agent
may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the
Administrative Borrower, declare (A) the Commitments of each Lender and the obligation of each
Lender to make Term Loans to be terminated, whereupon the same shall forthwith terminate, and (B)
the Term Loans, all interest thereon and all other amounts payable under this Agreement and the
other Loan Documents to be forthwith due and payable, whereupon the Term Loans, all such interest
and all such amounts shall be forthwith due and payable.




          SECTION 6.02. Remedies upon Default. Upon the occurrence and during the continuance
of an Event of Default, following the giving of three (3) Business Days’ written






 









 







notice to the Administrative Borrower, the Creditors Committee and the United States Trustee,
unless the Bankruptcy Court determines that an Event of Default has not occurred and/or is not
continuing, the automatic stay shall automatically be terminated at the end of such three (3)
Business Day period without further notice or order and, subject to the terms and conditions of the
Intercreditor Agreement, the Agents and the Lenders, shall be permitted to (a) sweep any or all
cash in the DIP Proceeds Controlled Account and any other account of a Loan Party subject to a
Control Account Agreement to prepay the Term Loans and to pay all other Obligations of any Loan
Party under the Loan Documents to the Secured Parties, (b) foreclose on all or any portion of the
Collateral and collect accounts receivable and apply the proceeds thereof to the Obligations of any
Loan Party under the Loan Documents, (c) occupy the Loan Parties’ premises, (d) execute
going-out-of business sales and (e) otherwise exercise remedies permitted by applicable
nonbankruptcy law. During such three (3) Business Day notice period described in the first
sentence of this Section 6.02, the Borrowers and any Creditors’ Committee shall be entitled
to an emergency hearing with the Bankruptcy Court for the sole purpose of contesting whether an
Event of Default has occurred and/or is continuing. Upon the occurrence and during the continuance
of an Event of Default upon the direction of the Required Lenders, the Borrowers shall pursue an
immediate sale of the Collateral (including, without limitation, the Canadian Refractive Centers)
pursuant to the provisions of Section 363 of the Bankruptcy Code, in a manner satisfactory to the
Required Lenders, proceeds of which shall be used to pay the Obligations of any Loan Party under
the Loan Documents to the Secured Parties.




ARTICLE VII




THE AGENTS



          SECTION 7.01. Authorization and Action. (a) Each Lender hereby appoints and
authorizes each Agent to take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement and the other Loan Documents as are delegated to such Agent by the
terms hereof and thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents (including, without
limitation, enforcement or collection of the Obligations of the Loan Parties), no Agent shall be
required to exercise any discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders (or if so required under this Agreement, all Lenders), and
such instructions shall be binding upon all Lenders and all holders of Notes; provided, however,
that no Agent shall be required to take any action that, in such Agent’s reasonable opinion, could
expose such Agent to personal liability or that is contrary to this Agreement or applicable law.




          (b) In furtherance of the foregoing, each Lender hereby appoints and authorizes the Collateral
Agent to act as the agent of such Lender for purposes of acquiring, holding and enforcing any and
all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured
Obligations, together with such powers and discretion as are reasonably incidental thereto. In
this connection, the Collateral Agent shall be entitled to the benefits of this Article VII
(including, without limitation, Section 7.05) as though the Collateral Agent were an
“Agent” under the Loan Documents, as if set forth in full herein with respect thereto.







 









 








          (c) Each Lender hereby appoints the Collateral Agent and each other Lender as agent and bailee
for the purpose of perfecting the security interests in and liens upon the Collateral in assets
which, in accordance with Article 9 of the Uniform Commercial Code, can be perfected only by
possession or control (or where the security interest of a secured party with possession or control
has priority over the security interest of another secured party) and the Collateral Agent and each
Lender hereby acknowledges that it holds possession of or otherwise controls any such Collateral
for the benefit of the Collateral Agent and the Lenders as secured party. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify the Collateral Agent
thereof, and, promptly upon the Collateral Agent’s request therefor shall deliver such Collateral
to the Collateral Agent or in accordance with the Collateral Agent’s instructions. Each Loan Party
by its execution and delivery of this Agreement hereby consents to the foregoing.




          (d) Any Agent may execute any of its duties under this Agreement or any other Loan Document
(including for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof)
granted under the Collateral Documents or of exercising any rights and remedies thereunder at the
direction of the Administrative Agent) by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel and other consultants or experts concerning all matters
pertaining to such duties.




          (e) With respect to the release of Collateral, the Lenders hereby irrevocably authorize the
Collateral Agent, at its option and in its discretion, to release any Lien granted to or held by
the Collateral Agent upon any property covered by this Agreement or the other Loan Documents or to
release a Subsidiary from its obligations as Guarantor, if applicable, and to execute and deliver
all documents referred to in Section 9.11 (i) upon termination or expiration of the
Commitments, the payment and satisfaction of all Obligations (other than contingent indemnification
and reimbursement Obligations in respect to which no claim for payment has been asserted by the
Person entitled thereto) arising with respect to the Term Loans (including, without limitation, all
fees and expenses payable hereunder and under the other Loan Documents); or (ii) constituting
property being sold or disposed of in compliance with the provisions of the Loan Documents (and the
Collateral Agent may rely in good faith conclusively on any certificate stating that the property
is being sold or disposed of in compliance with the provisions of the Loan Documents, without
further inquiry); provided, however, that (A) the Collateral Agent shall not be required to execute
any release on terms which, in the Collateral Agent’s opinion, would expose the Collateral Agent to
liability or create any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (B) such release shall not in any manner discharge, affect or
impair any Liens upon all interests retained, all of which shall continue to constitute part of the
Collateral covered by the Loan Documents.




          (f) Notwithstanding any provision to the contrary elsewhere in this Agreement, no Agent shall
have any duties or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agents. The duties of the Agents shall be mechanical and
administrative in nature. Without limiting the generality of the foregoing, the use of the term
“agent” herein or in the other Loan Documents (or any similar term) with reference to any Agent is
not intended to connote any fiduciary or other implied (or express)






 









 







obligations arising under agency doctrine of any applicable law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.



          SECTION 7.02. Agents’ Reliance, Etc. Neither any Agent nor any Agent Party shall be
liable for any action taken or omitted to be taken by it or them under or in connection with the
Loan Documents, except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, each Agent: (a) may consult with legal counsel
(including counsel for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts; (b) makes no warranty or
representation (including with regard to the existence, value or collectibility of the Collateral)
to any Lender and shall not be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan Documents; (c)
shall not have any duty to ascertain or to inquire as to the performance, observance or
satisfaction of any of the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or the existence at any time of any Default under the Loan Documents or to inspect the
property (including the books and records) of any Loan Party; (d) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the existence, perfection or priority of any lien or security interest created or
purported to be created under or in connection with, any Loan Document or any other instrument or
document furnished pursuant thereto, or for any failure of any Loan Party to perform its
obligations hereunder or thereunder; (e) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate or other instrument or writing (which may
be by telegram, telecopy or electronic communication) believed by it to be genuine and signed or
sent by the proper party or parties; and (f) shall incur no liability for any apportionment or
distribution of payments made in good faith pursuant to Section 2.08 without any gross
negligence or willful misconduct, and if any such apportionment or distribution is subsequently
determined to have been made in error but without any gross negligence or willful misconduct, the
sole recourse of any Lender to whom payment was due but not made, shall be to recover from the
other Lenders any payment in excess of the amount which they are determined to be entitled to (and
such other Lenders hereby covenant and agree to return promptly to such Lender any erroneous
payment received by them).



          SECTION 7.03. Rights as a Lender. Each Lender serving as an 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 an Agent and the term “Lender” or “Lenders” shall, unless otherwise
expressly indicated, include each Lender serving as an Agent hereunder in its individual capacity.
Such Lenders and their Affiliates may accept deposits from, lend money to, act as trustee under the
indentures of, accept investment banking engagements from and generally engage in any kind of
business with, any Loan Party, any of its Subsidiaries and any Person that may do business with or
own securities of any Loan Party or any such Subsidiary, all as if such Lenders were not Agents and
without any duty to account therefor to the other Lenders No Agent shall have any duty to disclose
any information obtained or received by it or any of its Affiliates relating to any Loan Party or
any of its Subsidiaries to the extent such information was obtained or received in any capacity
other than as such Agent.







 









 







          SECTION 7.04. Lender Credit Decision. Each Lender expressly acknowledges that
neither the Agents nor any other Agent Party have made any representations or warranties to it and
that no act by any Agent hereafter taken, including any review of the affairs or property of a
Loan Party or any Affiliate of a Loan Party or any acceptance or consent to any such review, shall
be deemed to constitute any representation or warranty by any Agent to any Lender as to any
matter, including as to whether Agent Parties have disclosed material information in their
possession. Each Lender also acknowledges that it has, independently and without reliance upon
any Agent or any other Lender and based on the financial statements referred to in Section
4.01 and such other 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 any Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Except for notices, reports
and other documents expressly required to be furnished to the Lenders by the Agents hereunder, the
Agents shall not have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come
into the possession of an Agent or Agent Party.



          SECTION 7.05. Indemnification. (a) Each Lender severally agrees to indemnify each
Agent and each other Agent Party (to the extent not promptly reimbursed by the Borrowers) from and
against such Lender’s ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent or Agent Party in any way relating to or arising out of the Loan Documents or
any action taken or omitted by such Agent’ under the Loan Documents (collectively, the “Indemnified
Costs”); provided, however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from such Agent’s or Agent Party’s gross negligence or willful misconduct
as found in a final, non-appealable judgment by a court of competent jurisdiction; provided,
further, that no action by any Agent or Agent Party taken or refrained from in accordance with the
directions or consent of the Required Lenders (or if so required under this Agreement, all Lenders)
shall be deemed to constitute gross negligence or willful misconduct of such Agent or Agent Party
for purposes of this Section 7.05. Without limitation of the foregoing, each Lender agrees
to reimburse each Agent promptly upon demand for its ratable share of any costs and expenses
(including, without limitation, fees and expenses of counsel) payable by the Borrowers under
Section 9.04, to the extent that such Agent is not promptly reimbursed for such costs and
expenses by the Borrowers. In the case of any investigation, litigation or proceeding giving rise
to any Indemnified Costs, this Section 7.05 applies whether any such investigation,
litigation or proceeding is brought by any Lender or any other Person.




          (b) For purposes of this Section 7.05, each Lender’s ratable share of any amount shall
be determined, at any time, according to the sum of (i) the aggregate principal amount of the Term
Loans outstanding at such time and owing to such Lender and (ii) the aggregate unused portion of
such Lender’s Commitments at any time prior to the Final Order Funding Date. The failure of any
Lender to reimburse any Agent, promptly upon demand for its ratable share of any amount required to
be paid by the Lender to such Agent as provided herein






 









 







shall not relieve any other Lender of its obligation hereunder to reimburse such Agent for its
ratable share of such amount, but no Lender shall be responsible for the failure of any other
Lender to reimburse such Agent, for such other Lender’s ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 7.05 shall survive the payment in full
of principal, interest and all other amounts payable hereunder and under the other Loan Documents.




          SECTION 7.06. Successor Agents. Any Agent may resign at any time by giving written
notice thereof to the Lenders and the Administrative Borrower and may be removed at any time with
or without cause by the Required Lenders upon 3 Business Days notice; provided, however, that any
removal of the Administrative Agent will not be effective until it has also been replaced as
Collateral Agent and released from all of its obligations in respect thereof; provided, further,
that the successor Administrative Agent shall not be required, but shall be permitted, to act as
replacement Collateral Agent. Upon any such resignation or removal, the Required Lenders shall
have the right to appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring
Agent’s giving of notice of resignation or the Required Lenders’ removal of the retiring Agent,
then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be a
Lender or a commercial bank organized under the laws of the United States or of any State thereof
and having a combined capital and surplus of at least $250,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent and, in the case of a successor Collateral
Agent, upon the execution and filing or recording of such financing statements, or amendments
thereto, and such other instruments or notices, as may be necessary or desirable, or as the
Required Lenders may request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to and become vested
with all the rights, powers, discretion, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under the Loan Documents. If
within 45 days after written notice is given of the retiring Agent’s resignation or removal under
this Section 7.06 no successor Agent shall have been appointed and shall have accepted such
appointment, then on such 45th day (a) the retiring Agent’s resignation or removal shall become
effective, (b) the retiring Agent shall thereupon be discharged from its duties and obligations
under the Loan Documents and (c) the Required Lenders shall thereafter perform all duties of the
retiring Agent under the Loan Documents until such time, if any, as the Required Lenders appoint a
successor Agent as provided above. After any retiring Agent’s resignation or removal hereunder as
Agent shall have become effective, the provisions of this Article VII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent under this
Agreement.




          SECTION 7.07. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless such Agent has received notice
from a Lender or Loan Party referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a “notice of default”. In the event that any Agent
receives such a notice, such Agent shall promptly give notice thereof to the Lenders. Each Agent
shall take such action with respect to such Default or Event of Default in accordance with
Section 7.01.



 









 






          SECTION 7.08. No Reliance on Administrative Agent’s Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender, nor any of its Affiliates or
assignees, may rely on the Administrative Agent to carry out such Lender’s , Affiliate’s or
assignee’s customer identification program, or other obligations required or imposed under or
contained in 21 CFR 103.121 (as hereafter amended or replaced, the “CIP Regulations”), or
any other Anti-Terrorism Law, including any programs involving any of the following items relating
to or in connection with the Borrowers, their Affiliates or their agents, the Loan Documents or
the transactions hereunder or contemplated hereby: (1) any identity verification procedures, (2)
any record-keeping, (3) comparisons with government lists, (4) customer notices or (5) other
procedures required under the CIP Regulations or such other laws.



ARTICLE VIII




PRIORITY AND COLLATERAL SECURITY



          SECTION 8.01. Superpriority Claims and Collateral Security.




          (a) The Borrowers jointly and severally warrant and covenant that, except as otherwise
expressly provided in this paragraph, upon the entry of the applicable Order, the Obligations of
any Loan Party under the Loan Documents:





          (i) shall at all times constitute a Superpriority Claim in the Chapter 11 Case of the
Borrowers having priority, pursuant to Section 364(c)(1) and 507(b) of the Bankruptcy Code
(subject only to the Carve Out), over the other administrative claims of any entity,
including, without limitation any claims under Sections 105, 326, 328, 330, 331, 365,
503(a), 503(b), 507(a), 507(b), 546(c), 546(d), 726 (to the extent permitted by law), 1113
and 1114 of the Bankruptcy Code, and any other provision of the Bankruptcy Code (including,
subject to entry of the Final Order, Section 506(c)), and shall at all times be senior to
the rights of the Loan Parties, the Loan Parties’ estates, any successor trustee to the
extent permitted by law, or any other creditor in the Chapter 11 Cases;




          (ii) pursuant to Sections 361, 362, 364(c)(2), 364(c)(3), and 364(d) of the Bankruptcy
Code and the Security Agreements, shall at all times be secured by, and each Loan Party
hereby grants to the Collateral Agent, for the benefit of the Secured Parties, a
continuing, valid, binding, enforceable, non-avoidable and automatically properly perfected
post-petition security interest and first priority (subject to the Carve Out and Liens
permitted to be equal or superior in priority pursuant to this Agreement) Lien on all
existing and after acquired real and personal property and other assets of the Borrowers,
tangible and intangible, whether now owned by or owing to, or hereafter acquired by or
arising in favor of the Loan Parties, whether owned or consigned by or to, or leased from
or to the Loan Parties and regardless of where located, including without limitation, (A)
the Collateral (as defined in the Security Agreements), (B) all avoidance power claims and
actions arising under Section 549 of the Bankruptcy Code relating to postpetition transfers
of Collateral and any proceeds thereof, (C) subject to entry of the Final Order, all
avoidance power claims and actions under Chapter 5 of the



 









 







Bankruptcy Code and any proceeds thereof, (D) subject to entry of the Final Order, the
security interest will not be subject to Section 551 of the Bankruptcy Code nor shall
Collateral be surcharged pursuant to Section 506(c) of the Bankruptcy Code, and (E) any
unencumbered assets of the Loan Parties.



          (b) The Borrowers jointly and severally warrant and covenant that, except as otherwise
expressly provided in this Section 8.01, upon the entry of the Recognition Order, the
Obligations of the Parent under the Loan Documents shall at all times be secured by a superpriority
charge and senior priming security interest over all of the present and future assets of the Parent
with priority over all existing liens and security (subject to the Carve Out and Liens permitted to
be equal or superior in priority pursuant to this Agreement).




          (c) Such Superpriority Claim and Liens referred to in Section 8.01(a) shall be subject
to the Carve Out, but shall otherwise be senior in priority to the adequate protection Liens
securing the Prepetition Lender Debt and all other Liens on the assets and properties of the
Borrowers other than Liens permitted under this Agreement, entitled to priority under applicable
nonbankruptcy law.




          SECTION 8.02. Collateral Security Perfection. The Borrowers agree to take all action
that any Agent or the Required Lenders may reasonably request as a matter of nonbankruptcy law to
perfect and protect the Collateral Agent’s Liens for the benefit of the Secured Parties upon the
Collateral and for such Liens to obtain the priority therefor contemplated hereby, including,
without limitation, executing and delivering such documents, instruments and financing statements,
providing such notices to third parties, obtaining such consents from any Governmental Authority
and providing such other instruments and documents in recordable form, as the Collateral Agent or
the Required Lenders may reasonably request. Each Loan Party hereby irrevocably authorizes the
Collateral Agent at any time and from time to time to file in any filing office in any Uniform
Commercial Code jurisdiction any initial financing statements and amendments thereto that (a)
indicate the Collateral (i) as all assets of such Loan Party or words of similar effect, regardless
of whether any particular asset comprised in the Collateral falls within the scope of Article 9 of
the Uniform Commercial Code of the State of Delaware or such other jurisdiction, or (ii) as being
of an equal or lesser scope or with greater detail, and (b) provide any other information required
by part 5 of Article 9 of the Uniform Commercial Code of the State of Delaware or such other
jurisdiction for the sufficiency or filing office acceptance of any financing statement or
amendment, including (i) whether any Loan Party is an organization, the type of organization and
any organization identification number issued to such Loan Party, and (ii) in the case of a
financing statement filed as a fixture filing, a sufficient description of real property to which
the Collateral relates. Each Borrower agrees to furnish any such information to the Agents
promptly upon request. Notwithstanding the provisions of this Section 8.02, the Agents and
the Lenders shall have the benefit of the Interim Order and the Final Order.




          SECTION 8.03. Guarantees. The Obligations shall be guaranteed by the Guarantors
pursuant to the terms of the Guaranty.




          SECTION 8.04. No Discharge; Survival of Claims. Pursuant to Section 1141(d)(4) of the
Bankruptcy Code, the Borrowers hereby waive any discharge of the






 









 







Obligations with respect to any plan of reorganization that shall not provide for the payment
in full in cash of the Obligations (other than contingent indemnification and reimbursement
Obligations in respect of which no claim for payment has been asserted by the Person entitled
thereto) under this Facility.




ARTICLE IX




MISCELLANEOUS



          SECTION 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or the Notes, nor consent to any departure by any Loan Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all Lenders (other than any Lender that is, at such time, a Defaulting
Lender), do any of the following at any time:





          (i) waive any of the conditions specified in Section 3.01 or, in the case of
the initial Borrowing, Section 3.03.




          (ii) change the number of Lenders or the percentage of (x) the Commitments or (y) the
aggregate unpaid principal amount of the Term Loans, that, in each case, shall be required
for the Lenders or any of them to take any action hereunder;




          (iii) release one or more Guarantors (or otherwise limit such Guarantors’ liability
with respect to the Obligations owing to the Agents and the Lender under the Guaranties) if
such release or limitation is in respect of all or substantially all of the value of the
Guaranties to the Lenders;




          (iv) release all or substantially all of the Collateral in any transaction or series
of related transactions;




          (v) amend this Section 9.01; or




          (vi) reduce the percentage specified in the definition of “Required Lenders”.



          (b) no amendment, waiver or consent shall, unless in writing and signed by the Required
Lenders and each Lender specified below for such amendment, waiver or consent:





          (i) increase the Commitments of a Lender without the consent of such Lender;




          (ii) reduce the principal of, or stated rate of interest on, the Term Loans owed to a
Lender or any fees or other amounts stated to be payable hereunder or under the other Loan
Documents to such Lender without the consent of such Lender; or



 









 







          (iii) postpone any date scheduled for any payment of principal of, or interest on, the
Term Loans pursuant to Section 2.03 or Section 2.05 or any date fixed for
any payment of fees hereunder in each case payable to a Lender without the consent of such
Lender;


provided further that no amendment, waiver or consent shall, unless in writing and signed by an
Agent in addition to the Lenders required above to take such action, affect the rights or duties of
such Agent under this Agreement or the other Loan Documents.




          SECTION 9.02. Notices, Etc. (a) All notices and other communications provided for
hereunder shall be either (x) in writing (including telecopy or electronic communication) and
mailed, telecopied or delivered or (y) as and to the extent set forth in Section 9.02(b)
and in the proviso to this Section 9.02(a), in an electronic medium and delivered as set
forth in Section 9.02(b), if to any Loan Party, to the Administrative Borrower at its
address at 16305 Swingley Ridge Road, Suite 300, Chesterfield, Missouri 63017, Attention: Patricia
Larson and Jane Franzier, Facsimile No. (636) 534-2301, E-mail Address:
patricia.larson@tlcvision.com and jane.franzier@tlcvision.com; if to any Lender party to this
Agreement, at its Lending Office specified opposite its name on Schedule I hereto, with a
copy to Proskauer Rose LLP at Three First National Plaza, 70 West Madison, Suite 3800, Chicago, IL
60602-4342, Attention Mark K. Thomas, Esq. and Paul V. Possinger, Esq., Facsimile No. (312)
962-3551, Email Address: mthomas@proskauer.com and ppossinger@proskauer.com; if to any other
Lender, at its Lending Office specified in the Assignment and Acceptance pursuant to which it
became a Lender; if to the Administrative Agent or the Collateral Agent, at its address at 110 East
59th Street, New York, NY 10022, Attention: Stephen P. Ewald, Facsimile No. (917) 677-8224, E-mail
Address: sewald@cantor.com; or, as to any party, at such other address as shall be designated by
such party in a written notice to the other parties; provided, however, that materials and
information described in Section 9.02(b) shall be delivered to the Administrative Agent in
accordance with the provisions thereof or as otherwise specified to the Administrative Borrower by
the Administrative Agent. All such notices and other communications shall, when mailed, telecopied,
or e-mailed, be effective when deposited in the mails, transmitted by telecopier or sent by
electronic communication, respectively, except that notices and communications to any Agent
pursuant to Article II, III or VII shall not be effective until received by such Agent. Delivery by
telecopier or other electronic means of an executed counterpart of a signature page to any
amendment or waiver of any provision of this Agreement or the Notes shall be effective as delivery
of an original executed counterpart thereof.




          (b) Each Borrower hereby agrees that it will provide to the Agents all information, documents
and other materials that it is obligated to furnish to the Agents pursuant to the Loan Documents,
including, without limitation, all notices, requests, financial statements, financial and other
reports, certificates and other information materials, but excluding any such communication that
(i) relates to a request for a new Borrowing, (ii) relates to the payment of any principal or other
amount due under this Agreement prior to the scheduled date therefor, (iii) provides notice of any
Default or Event of Default under this Agreement or (iv) is required to be delivered to satisfy any
condition precedent to the effectiveness of this Agreement and/or any Borrowing thereunder (all
such non-excluded communications being referred to herein collectively as “Communications”), by
transmitting the Communications in an electronic/soft medium in a format acceptable to the
applicable Agent to an electronic mail address specified by






 









 







the applicable Agent to the Administrative Borrower. In addition, the Administrative Borrower
agrees to continue to provide the Communications to each Agent in the manner specified in the Loan
Documents but only to the extent requested by the applicable Agent. The Borrower further agrees
that the Agents may make the Communications available to the Lenders by posting the Communications
on IntraLinks® or a substantially similar electronic transmission system (the “Platform”).




          (c) THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE”. THE AGENT PARTIES (AS DEFINED BELOW)
DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE COMMUNICATIONS, OR THE ADEQUACY OF THE PLATFORM
AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS OR OMISSIONS IN THE COMMUNICATIONS. NO WARRANTY OF ANY
KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR
FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT PARTIES IN CONNECTION WITH THE
COMMUNICATIONS OR THE PLATFORM. IN NO EVENT SHALL ANY AGENT OR ANY OF ITS AFFILIATES OR ANY OF
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, PARTNERS, AGENTS, ADVISORS OR REPRESENTATIVES
(COLLECTIVELY, “AGENT PARTIES”) HAVE ANY LIABILITY TO ANY LOAN PARTY, ANY LENDER PARTY OR ANY OTHER
PERSON OR ENTITY FOR DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, DIRECT OR INDIRECT,
SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES (WHETHER IN TORT, CONTRACT OR
OTHERWISE) ARISING OUT OF ANY LOAN PARTY’S OR AGENT’S TRANSMISSION OF COMMUNICATIONS THROUGH THE
INTERNET, EXCEPT TO THE EXTENT THE LIABILITY OF ANY AGENT PARTY IS FOUND IN A FINAL NON-APPEALABLE
JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE RESULTED PRIMARILY FROM SUCH AGENT PARTY’S
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.




          (d) Each Agent agrees that the receipt of the Communications by such Agent at its e-mail
address set forth above shall constitute effective delivery of the Communications to such Agent for
purposes of the Loan Documents. Each Lender agrees that notice to it (as provided in the next
sentence) specifying that the Communications have been posted to the Platform shall constitute
effective delivery of the Communications to such Lender for purposes of the Loan Documents. Each
Lender agrees to notify the Administrative Agent in writing (including by electronic communication)
from time to time of such Lender’s e-mail address to which the foregoing notice may be sent by
electronic transmission and (ii) that the foregoing notice may be sent to such e-mail address.
Nothing herein shall prejudice the right of any Agent Lender to give any notice or other
communication pursuant to any Loan Document in any other manner specified in such Loan Document.




          SECTION 9.03. No Waiver; Remedies. No failure on the part of any Lender or Agent to
exercise, and no delay in exercising, any right hereunder or under any Note or any other Loan
Document shall operate as a waiver thereof; nor shall any single or partial exercise of any such
right preclude any other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies provided by law.







 









 








          SECTION 9.04. Costs and Expenses. (a) The Borrowers agree to pay on demand (i) all
reasonable costs and expenses of each Agent in connection with the preparation, execution,
delivery, administration, modification and amendment of, or any consent or waiver under, the Loan
Documents (including, without limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses, (B) the reasonable fees and expenses of counsel for each Agent with
respect thereto, with respect to advising such Agent as to its rights and responsibilities, or the
perfection, protection or preservation of rights or interests, under the Loan Documents, with
respect to negotiations with any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may give rise to a
Default and with respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency, refinancing or restructuring of the financing under the Loan Documents in
the nature of a “work-out” or other similar proceeding involving creditors’ rights generally and
any proceeding ancillary thereto), (ii) all reasonable fees and expenses of counsel for the
Required Lenders (including, without limitation, Special Counsel, Stikeman Elliott LLP, as Canadian
counsel, and Pachulski Stang Ziehl & Jones LLP, as Delaware counsel) with respect to any matter
referred to in clause (a)(i) hereof to the same extent as if it were an Agent thereunder, and (iii)
all costs and expenses of each Agent and each Lender in connection with the enforcement of the Loan
Documents, whether in any action, suit or litigation, or any bankruptcy, insolvency or other
similar proceeding affecting creditors’ rights generally (including, without limitation, the
reasonable fees and expenses of counsel for Agents and each Lender with respect thereto).




          (b) The Borrowers agree to indemnify, defend and save and hold harmless each Agent, each
Lender and each of their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an “Indemnified Party”) from and against, and shall pay on demand, any and all
claims, damages, losses, disbursements associated with monitoring of the Cases, all appraisal
charges and other liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party,
in each case arising out of or in connection with or by reason of (including, without limitation,
in connection with any investigation, litigation or proceeding or preparation of a defense in
connection therewith) (i) the Facility, the actual or proposed use of the proceeds of the Term
Loans, the Loan Documents, or any of the transactions contemplated thereby, or (ii) the actual or
alleged presence of Hazardous Materials on any property of any Loan Party or any of its
Subsidiaries or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, disbursement, charge, liability or
expense is found in a final, non-appealable judgment by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this Section
9.04(b) applies, such indemnity shall be effective whether or not such investigation,
litigation or proceeding is brought by any Loan Party, its directors, shareholders or creditors,
any Indemnified Party or any other Person, and whether or not any Indemnified Party is otherwise a
party thereto. The Borrowers also agree not to assert any claim against any Agent, any Lender or
any of their Affiliates, or any of their respective officers, directors, employees, agents and
advisors, on any theory of liability, for special, indirect, consequential or punitive damages
arising out of or otherwise relating to the Facility, the actual or proposed use of the






 









 







proceeds of the Term Loans, the Loan Documents, or any of the transactions contemplated by the
Loan Documents.




          (c) If any payment of principal of any Term Loan is made by the Borrowers to or for the
account of a Lender other than on the last day of the Interest Period for such Term Loan, as a
result of a payment pursuant to Section 2.04, acceleration of the maturity of the Term
Loans pursuant to Section 6.01 or for any other reason, by an Eligible Assignee to a Lender
other than on the last day of the Interest Period for such Term Loan upon an assignment of rights
and obligations under this Agreement pursuant to Section 9.07, as a result of a demand by
the Borrowers pursuant to Section 2.07(d), or if the Borrowers fail to make any payment or
prepayment of any Term Loans for which a notice of prepayment has been given or that is otherwise
required to be made, whether pursuant to Section 2.03, Section 2.04 or Section
6.01 or otherwise, the Borrowers shall, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account of such Lender any
amounts required to compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment or such failure to pay or prepay, as the case may be,
including, without limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds acquired by any
Lender to fund or maintain such Term Loan.




          (d) If any Loan Party fails to pay when due any costs, expenses or other amounts payable by it
under any Loan Document, including, without limitation, fees and expenses of counsel and
indemnities, such amount may be paid on behalf of such Loan Party by the Administrative Agent or
any Lender, in its sole discretion.




          (e) Without prejudice to the survival of any other agreement of any Loan Party hereunder or
under any other Loan Document, the agreements and obligations of the Borrowers contained in
Section 2.07 and Section 2.09 and this Section 9.04 shall survive the
payment in full of principal, interest and all other amounts payable hereunder and under any of the
other Loan Documents.




          SECTION 9.05. Right of Set-off. Upon (a) the occurrence and during the continuance of
any Event of Default or (b) the acceleration of the Term Loans pursuant to the provisions of
Section 6.01, each Agent and each Lender and each of their respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by law, to set off
and otherwise apply any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Agent, such Lender or such
Affiliate to or for the credit or the account of any Loan Party against any and all of the
Obligations of such Loan Party now or hereafter existing under the Loan Documents, irrespective of
whether such Agent or such Lender shall have made any demand under this Agreement and although such
Obligations may be unmatured. Each Agent and each Lender agrees promptly to notify the Borrowers
after any such set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of each Agent and each
Lender and their respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such Agent, such Lender and
their respective Affiliates may have.







 









 








          SECTION 9.06. Binding Effect. This Agreement shall become effective when it shall
have been executed by the Borrowers, Guarantors and each Agent, and the Administrative Agent shall
have been notified by each initial Lender that such initial Lender has executed it, and thereafter
shall be binding upon and inure to the benefit of the Borrowers, Guarantors, each Agent and each
Lender and their respective successors and assigns, except that none of the Borrowers shall have
the right to assign its rights hereunder or any interest herein without the prior written consent
of each Lender.




          SECTION 9.07. Assignments and Participations. (a) Each Lender may and, so long as no
Default shall have occurred and be continuing, if demanded by the Administrative Borrower pursuant
to Section 2.07(d) upon at least five Business Days’ notice to such Lender and the
Administrative Agent, will assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including, without limitation, all or a portion of its
Commitment or Commitments, the Term Loans owing to it and the Note or Notes held by it); provided,
however, that (i) except in the case of an assignment to a Person that, immediately prior to such
assignment, was a Lender, an Affiliate of any Lender or an Approved Fund of any Lender or an
assignment of all of a Lender’s rights and obligations under this Agreement, the aggregate amount
of the Commitments being assigned to such Eligible Assignee pursuant to such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment) shall in no event
be less than $1,000,000 (or such lesser amount as shall be approved by the Administrative Agent
and, except during the initial syndication of the Commitments and the Term Loans, so long as no
Default shall have occurred and be continuing at the time of effectiveness of such assignment, the
Administrative Borrower), (ii) each such assignment shall be to an Eligible Assignee, (iii) each
such assignment made as a result of a demand by the Administrative Borrower pursuant to Section
2.07(d) shall be arranged by the Borrowers after consultation with the Administrative Agent and
shall be either an assignment of all of the rights and obligations of the assigning Lender under
this Agreement or an assignment of a portion of such rights and obligations made concurrently with
another such assignment or other such assignments that together cover all of the rights and
obligations of the assigning Lender under this Agreement, (iv) no Lender shall be obligated to make
any such assignment as a result of a demand by the Administrative Borrower pursuant to Section
2.07(d) unless and until such Lender shall have received one or more payments from either the
Borrowers or one or more Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Term Loans owing to such Lender, together with accrued interest
thereon to the date of payment of such principal amount and all other amounts payable to such
Lender under this Agreement, and (v) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, and shall deliver any Note or Notes (if any) subject to such assignment (provided such
delivery may occur after an assignment is effective), and shall pay a processing and recordation
fee of $3,500; provided, however, that for each such assignment made as a result of a demand by the
Administrative Borrower pursuant to Section 2.07(d), the Borrowers shall pay to the
Administrative Agent the applicable processing and recordation fee.




          (b) Upon such execution, delivery, acceptance and recording, from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender






 









 







hereunder and (ii) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than its rights under Section 2.07 and Section 2.09 to
the extent any claim thereunder relates to an event arising prior to such assignment) and be
released from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).




          (c) By executing and delivering an Assignment and Acceptance, each Lender assignor thereunder
and each assignee thereunder confirm to and agree with each other and the other parties thereto and
hereto as follows: (i) other than as provided in such Assignment and Acceptance, such assigning
Lender makes no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to be created under or
in connection with, any Loan Document or any other instrument or document furnished pursuant
thereto; (ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon any Agent, such assigning Lender 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 this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints and authorizes
each Agent to take such action as agent on its behalf and to exercise such powers and discretion
under the Loan Documents as are delegated to such Agent by the terms hereof and thereof, together
with such powers and discretion as are reasonably incidental thereto; and (vii) such assignee
agrees that it will perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender.




          (d) The Term Loans shall be issued in registered form and shall be transferable only upon a
register (the “Register”) maintained by the Administrative Agent as Registrar (the “Registrar”),
acting solely for this purpose as an agent of the Borrowers. The Registrar shall maintain the
Register at its address referred to in Section 9.02 for the recordation of the names and
addresses of the owners of the Term Loans and any related Notes from time to time. The Registrar
shall record each transfer of the Term Loans and any related Notes to a transferee on the Register
upon written notification by the registered owner of such transfer (with the Registrar being
allowed to rely conclusively on any such notification). The entries in the Register shall be
conclusive, and the Borrowers, the Agents and Lenders may deem and treat the Person whose name is
recorded in the Register pursuant to the terms hereof as the owner of the Term Loans and any
related Notes for the purpose of receiving payment of, or on account of, the principal and interest
due on the Loans and any related Notes and for all other purposes, notwithstanding notice to the
contrary; provided that, failure to make any such recordation, or






 









 







any error in such recordation, shall not affect any Lender’s Commitments or Borrower’s
Obligations in respect of any Term Loan. The Register shall be available for inspection by the
Borrowers and the Lenders, at any reasonable time and from time to time upon reasonable prior
notice. Each Borrower hereby designates the Administrative Agent to serve as the Borrowers’ agent
solely for purposes of maintaining the Register as provided in this Section 9.07, and each
Borrower hereby agrees that, to the extent such entity serves in such capacity, the Administrative
Agent and its affiliates, officers, directors, employees and agents shall constitute an
“Indemnified Party” under Section 9.04(b).



At the request of the registered owner of any Term Loan and any related Notes, the Registrar shall
note a collateral assignment of such Term Loan and any related Notes on the Register and, provided
that the Registrar has been given the name and address of such collateral assignee, the Registrar
(i) shall not permit any further transfers of such Term Loan and any related Notes on the Register
absent receipt of written consent to such transfers from such collateral assignee and (ii) shall
record the transfer of such Term Loan and any related Notes on the Register to such collateral
assignee (or such collateral assignee’s designee, nominee or assignee) upon written request by such
collateral assignee.




          (e) Upon its receipt of an Assignment and Acceptance executed by an assigning Lender and an
assignee, the Administrative Agent shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit C hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and (iii) give prompt
notice thereof to the Administrative Borrower and each other Agent. In the case of any assignment
by a Lender, within five (5) Business Days after its receipt of such notice, the Administrative
Borrower, at its own expense, shall execute and deliver to the Administrative Agent, upon receipt
of and in exchange for the surrendered Note or Notes (if any) if such Note is requested by the
Eligible Assignee, a new Note in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if any assigning Lender that had a Note or Notes prior to such
assignment has retained a Commitment hereunder, upon such Lender’s request a new Note in an amount
equal to the Commitment retained by it hereunder. Such new Note or Notes shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit A.




          (f) Each Lender may sell participations to one or more Persons (other than any Loan Party or
any of its Affiliates) in or to all or a portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the Term Loans owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender’s obligations under
this Agreement (including, without limitation, its Commitments) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Lender shall remain the holder of any such Note for all purposes of this
Agreement, (iv) the Borrowers, the Agents 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 and (v) no participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or consent would reduce the
principal of, or interest on, the Term Loans or any fees or other amounts payable hereunder, in
each case to the extent subject to






 









 







such participation, postpone any date fixed for any payment of principal of, or interest on,
the Term Loans or any fees or other amounts payable hereunder, in each case to the extent subject
to such participation, or release all or substantially all of the Collateral or the value of the
Guaranties.




          (g) Any Lender may, in connection with any assignment or participation or proposed assignment
or participation pursuant to this Section 9.07, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; provided, however, that, prior to any such disclosure, the
assignee or participant or proposed assignee or participant shall agree in writing to preserve the
confidentiality of any Information received by it from such Lender in accordance with Section
9.09(f).




          (h) Notwithstanding any other provision set forth in this Agreement, any Lender may at any
time create a security interest in all or any portion of its rights under this Agreement
(including, without limitation, the Term Loans owing to it and the Note or Notes (if any) held by
it) in favor of any Federal Reserve Bank in accordance with Regulation A of the Board of Governors
of the Federal Reserve System.




          (i) Notwithstanding anything to the contrary contained herein, any Lender that is a Fund may
create a security interest in all or any portion of the Term Loans owing to it and any Note or
Notes held by it to the trustee for holders of obligations owed, or securities issued, by such Fund
as security for such obligations or securities; provided that, unless and until such trustee
actually becomes a Lender in compliance with the other provisions of this Section 9.07, (i)
no such pledge shall release the pledging Lender from any of its obligations under the Loan
Documents and (ii) such trustee shall not be entitled to exercise any of the rights of a Lender
under the Loan Documents even though such trustee may have acquired ownership rights with respect
to the pledged interest through foreclosure or otherwise.




          (j) In addition to any other assignment permitted pursuant to this Section 9.07, the
Loan Parties hereby acknowledge that (i) the Lenders, their Affiliates and Approved Funds
(“Securitizing Parties”) may sell or securitize the Term Loans (a “Securitization”) through the
pledge of the Term Loans as collateral security for loans to a Securitizing Party or the assignment
or issuance of direct or indirect interests in the Term Loans (such as, for instance,
collateralized loan obligations), and (ii) such Securitization may be rated by a rating agency.
The Loan Parties shall reasonably cooperate with the Securitizing Parties to effect the
Securitization including, without limitation, by (A) amending this Agreement and the other Loan
Documents, and executing such additional documents, as reasonably requested by the Lenders in
connection with the Securitization; provided that (1) any such amendment or additional
documentation does not impose material additional costs on Borrowers and (2) any such amendment or
additional documentation does not materially adversely affect the rights, or materially increase
the obligations, of the Borrowers under the Loan Documents or change or affect in a manner adverse
to the Borrowers the financial terms of the Term Loans, (B) providing such information as may be
reasonably requested by the Lenders or rating agencies in connection with the rating of the Term
Loans or the Securitization, and (C) providing a certificate (1) agreeing to indemnify the
Securitizing Parties, or any party providing credit support or otherwise participating in the
Securitization, including any investors in a securitization entity (collectively,






 









 







the “Securitization Parties”) for any losses, claims, damages or liabilities (the
“Securitization Liabilities”) to which the Securitizing Parties or such Securitization Parties may
become subject insofar as the Securitization Liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any Loan Document or in any
writing delivered by or on behalf of any Loan Party to the Securitizing Parties in connection with
any Loan Document or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading, and such
indemnity shall survive any transfer by the Lenders or their successors or assigns of the Term
Loans, and (2) agreeing to reimburse the Loan Parties and the other Securitization Parties for any
legal or other expenses reasonably incurred by such Persons in connection with defending the
Securitization Liabilities.




          SECTION 9.08. Execution in Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall constitute one and
the same agreement. Delivery by telecopier or other electronic means of an executed counterpart of
a signature page to this Agreement shall be effective as delivery of an original executed
counterpart of this Agreement.




          SECTION 9.09. Confidentiality. Each Agent and Lender agrees to maintain the
confidentiality of the Information, except that Information may be disclosed (a) to its Affiliates
and to its and its Affiliates’ respective partners, directors, officers, employees, agents,
counsel, accountants, advisors, investors, and other representatives (collectively,
“Representatives”) (it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep such Information
confidential), or to rating agencies, (b) to the extent requested by any regulatory authority
purporting to have jurisdiction over it (including any self-regulatory authority), (c) to the
extent required by applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under
any other Loan Document or any action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) to any assignee or pledgee of or
participant in, or any prospective assignee or pledge of or participant in, any of its rights or
obligations under this Agreement, provided that such parties agree to be bound by confidentiality
provisions substantially similar to those hereunder, and to the Representatives of the foregoing
parties, (g) with the consent of the Borrowers, or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 9.09 or (ii) becomes
available to any Agent, any Lender, or any of their respective Representatives on a
non-confidential basis from a source other than the Borrowers. The terms of this provision shall
supersede and replace any previous agreement regarding the non-disclosure of confidentiality of the
Information. This provision shall terminate upon termination of this Agreement. Any Person
required to maintain the confidentiality of Information as provided in this Section 9.09
shall be considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person would accord
to its own confidential information.







 









 








          SECTION 9.10. Public Disclosure. (a) Other than pleadings filed in the Bankruptcy
Court in connection with the Chapter 11 Cases, no Loan Party or Affiliate thereof will in the
future issue any press releases or other public disclosure using the name of any Agent or its
Affiliates or any Lender or its Affiliates or referring to this Agreement or the other Loan
Documents without at least two (2) Business Days’ prior notice to the Administrative Agent and
without the prior written consent of the relevant party, which shall not be unreasonably withheld,
unless (and only to the extent that) such Loan Party or Affiliate is required to do so under law
and then, in any event, such Loan Party or Affiliate will consult with the Administrative Agent
before issuing such press release or other public disclosure.




          (b) No Lender or Affiliate thereof will in the future issue any press releases or other public
disclosure (including, without limitation, the publication of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement) using the name of
any Borrower or its Affiliates or referring to this Agreement or the other Loan Documents without
at least two (2) Business Days’ prior notice to the Administrative Borrower and without the prior
written consent of the Administrative Borrower, which shall not be unreasonably withheld, unless
(and only to the extent that) such Lender or Affiliate is required to do so under law and then, in
any event, such Lender or Affiliate will consult with the Administrative Borrower before issuing
such press release or other public disclosure. The Administrative Agent reserves the right to
provide to industry trade organizations information necessary and customary for inclusion in league
table measurements.




          SECTION 9.11. Release or Subordination of Collateral/Release of Guarantor. Upon the
sale, lease, transfer or other disposition of any item of Collateral or the incurrence of Liens
permitted under Section 5.02(a)(iv) or Section 5.02(a)(v) (or the sale of a Loan
Party that is a Subsidiary of any Borrower) in accordance with the terms of the Loan Documents, the
Collateral Agent will release its Lien on and security interest in such Collateral, or release or
subordinate its Lien in case of Liens permitted under Section 5.02(a)(iv) or Section
5.02(a)(v), and, at the Borrowers’ expense, execute and deliver to such Loan Party such
documents as such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the Collateral Documents or
subordinate the Lien of the applicable Agent on such item of Collateral to such Lien in accordance
with the terms of the Loan Documents.




          SECTION 9.12. Patriot Act Notice. Each Lender and each Agent (for itself and not on
behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the
Patriot Act, it is required to obtain, verify and record information that identifies each Loan
Party, which information includes the name and address of such Loan Party and other information
that will allow such Lender or such Agent, as applicable, to identify such Loan Party in accordance
with the Patriot Act. The Borrowers shall, and shall cause each of their Subsidiaries to, provide
such information and take such actions as are reasonably requested by any Agent or any Lender in
order to assist the Agents and the Lenders in maintaining compliance with the Patriot Act.




          SECTION 9.13. Jurisdiction, Etc. (a) Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the
Bankruptcy Court, and any appellate court therefrom, in any action or






 









 







proceeding arising out of or relating to this Agreement or any of the other Loan Documents to
which it is a party, 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 the Bankruptcy 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 any party may otherwise have to bring any
action or proceeding relating to this Agreement or any of the other Loan Documents in the courts of
any jurisdiction.




          (b) Each of the parties hereto irrevocably and unconditionally waives, to the fullest extent
it may legally and effectively do so, any objection that it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or any of
the other Loan Documents to which it is a party in the Bankruptcy Court. 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.




          (c) Each of Holdco, TLC Management and each Guarantor hereby irrevocably appoints the
Administrative Borrower as its authorized agent to accept service of process in any suit, action or
proceeding arising out of or relating to this Agreement or any of the other Loan Documents, and
agrees that such service of process may be made upon the Administrative Borrower and that the
failure of the Administrative Borrower to give any notice of any such service of process shall not
impair or affect the validity of such service or of any judgment rendered in any action or
proceeding based thereon. Each of Holdco, TLC Management and each Guarantor hereby further
irrevocably consents to the service of process in any such action or proceeding by the mailing
thereof by any Lender by registered or certified mail, postage pre-paid, to it at its address
specified herein.




          SECTION 9.14. Governing Law. This Agreement and the Notes shall be governed by, and
construed in accordance with, the laws of the State of New York.




          SECTION 9.15. Waiver of Jury Trial. Each of the Borrowers, the Guarantors, the Agents
and the Lenders irrevocably waives all right to trial by jury in any action, proceeding or
counterclaim (whether based on contract, tort or otherwise) arising out of or relating to any of
the Loan Documents, the Term Loans, or the actions of any Agent or any Lender in the negotiation,
administration, performance or enforcement thereof.




          SECTION 9.16. Release. Subject to applicable terms of the Interim Order and Final
Order, each Loan Party hereby acknowledges effective upon entry of the Final Order, that no Loan
Party has a defense, counterclaim, offset, recoupment, cross-complaint, claim or demand of any kind
or nature whatsoever that can be asserted to reduce or eliminate all or any part of such Loan
Party’s liability to repay the Agents or any Lender as provided in this Agreement or to seek
affirmative relief or damages of any kind or nature from the Agents or any Lender. Each Loan
Party, in its own right, on behalf of their bankruptcy estates, and on behalf of all their
successors, assigns, Subsidiaries and any Affiliates and any Person acting for and on behalf of, or
claiming through them, (collectively, the “Releasing Parties”), hereby fully, finally






 









 







and forever releases and discharges the Agents and Lenders and all of their respective past
and present officers, directors, servants, agents, attorneys, assigns, heirs, parents,
subsidiaries, and each Person acting for or on behalf of any of them (collectively, the “Released
Parties”) of and from any and all past, present and future actions, causes of action, demands,
suits, claims, liabilities, Liens, lawsuits, adverse consequences, amounts paid in settlement,
costs, damages, debts, deficiencies, diminution in value, disbursements, expenses, losses and other
obligations of any kind or nature whatsoever, whether in law, equity or otherwise (including,
without limitation, those arising under Sections 541 through 550 of the Bankruptcy Code and
interest or other carrying costs, penalties, legal, accounting and other professional fees and
expenses, and incidental, consequential and punitive damages payable to third parties), whether
known or unknown, fixed or contingent, direct, indirect, or derivative, asserted or unasserted,
foreseen or unforeseen, suspected or unsuspected, now existing, heretofore existing or which may
heretofore accrue against any of the Released Parties, whether held in a personal or representative
capacity, and which in each case are based on any act, fact, event or omission or other matter,
cause or thing occurring at or from any time prior to and including the date hereof in any way,
directly or indirectly arising out of, connected with or relating to this Agreement, the Orders,
and the transactions contemplated hereby, and all other agreements, certificates, instruments and
other documents and statements (whether written or oral) related to any of the foregoing.









 









 








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




	 	 	 	 	 
	 	BORROWERS



TLC VISION (USA) CORPORATION

 	 
	 	By:  	/s/ William McManus
 	 
	 	 	Name:  	William McManus 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	TLC VISION CORPORATION

 	 
	 	By:  	/s/ William McManus
 	 
	 	 	Name:  	William McManus 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 
	 	TLC MANAGEMENT SERVICES INC.

 	 
	 	By:  	/s/ William McManus
 	 
	 	 	Name:  	William McManus 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 




 









 





	 	 	 	 	 	 	 
	 	 	GUARANTORS
	 
	 	 	 	 	 	 
	 	 	AMERICAN EYE INSTRUMENTS, INC.
	 	 	LASER EYE SURGERY, INC.
	 	 	LASER VISION CENTERS, INC.
	 	 	LVCI CALIFORNIA, LLC
	 

	 	 	 	By:
	 	Laser Vision Centers, Inc., its Member
	 	 	SIGHTPATH MEDICAL INC.
	 	 	OR PARTNERS, INC.
	 	 	O.R. PROVIDERS, INC.
	 	 	SOUTHEAST MEDICAL, INC.
	 	 	SOUTHERN OPHTHALMICS, INC.
	 	 	TLC CAPITAL CORPORATION
	 	 	TLC FLORIDA EYE LASER CENTER, LLC
	 

	 	 	 	By:
	 	TLC THE LASER CENTER
	 

	 	 	 	 	 	(INSTITUTE) INC., ITS MEMBER
	 	 	TLC LASER EYE CENTERS (ATAC), LLC
	 	 	TLC LASER EYE CENTERS (REFRACTIVE I) INC.
	 	 	TLC MIDWEST EYE LASER CENTER, INC.
	 	 	TLC THE LASER CENTER (ANNAPOLIS) INC.
	 	 	TLC THE LASER CENTER (BALTIMORE MANAGEMENT) LLC
	 	 	TLC THE LASER CENTER (BALTIMORE) INC.
	 	 	TLC THE LASER CENTER (BOCA RATON) LIMITED PARTNERSHIP
	 

	 	 	 	By:
	 	(NORTHEAST) INC., ITS GENERAL
	 

	 	 	 	 	 	PARTNER
	 	 	TLC THE LASER CENTER (CAROLINA) INC.
	 	 	TLC THE LASER CENTER (CONNECTICUT) L.L.C.
	 

	 	 	 	By:
	 	TLC THE LASER CENTER
	 

	 	 	 	 	 	(NORTHEAST) INC., ITS SOLE
	 

	 	 	 	 	 	MEMBER
	 	 	TLC THE LASER CENTER (INSTITUTE) INC.
	 	 	TLC THE LASER CENTER (NORTHEAST) INC.
	 	 	TLC VC, LLC
	 	 	TLC VISION SOURCE, INC.
	 	 	TLC WHITTEN LASER EYE ASSOCIATES, LLC
	 

	 	 	 	By:
	 	TLC THE LASER CENTER
	 

	 	 	 	 	 	(NORTHEAST) INC., ITS MEMBER
	 	 	TRUVISION, INC.
	 	 	TRUVISION CONTACTS, INC.
	 	 	TRUVISION PROVIDER ONLINE SERVICES, INC.
	 	 	VALLEY LASER EYE CENTER, LLC
	 

	 		 	By:
	 	LASER VISION CENTERS, INC., ITS SOLE
	 

	 	 	 	 	 	MEMBER






 









 






	 	 	 	 	 
	 	 	 
	 	By:  	                          /s/ William McManus
 	 
	 	 	Name:  	William McManus 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 




 









 





	 	 	 	 	 
	 	TLC THE LASER CENTER (MONCTON) INC.

RHEO CLINIC INC.



VISION CORPORATION

 	 
	 	By:  	/s/ William McManus
 	 
	 	 	Name:  	William McManus 	 
	 	 	Title:  	Interim Chief Financial Officer 	 
	 




 









 





	 	 	 	 	 
	 	AGENTS



Cantor Fitzgerald Securities,

as Administrative Agent and Collateral Agent

 	 
	 	By:  	/s/ Shawn Mathews
 	 
	 	 	Name:  	Shawn Mathews 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	LENDERS



Cantor Fitzgerald Securities,

as Administrative Agent and Collateral Agent

 	 
	 	By:  	/s/ Shawn Mathews
 	 
	 	 	Name:  	Shawn Mathews 	 
	 	 	Title:  	Chief Financial Officer 	 
	 




 









 





SCHEDULE D-1 TO SENIOR DIP CREDIT AGREEMENT




U.S. SECURITY AGREEMENT




Dated December 23, 2009



From



The Grantors referred to herein



as Grantors



to



Cantor Fitzgerald Securities



as Collateral Agent



 









 





T A B L E O F C O N T E N T S



	 	 	 
	SECTION 1.

	 	GRANT OF SECURITY
	SECTION 2.

	 	SECURITY FOR OBLIGATIONS
	SECTION 3.

	 	GRANTORS REMAIN LIABLE
	SECTION 4.

	 	DELIVERY AND CONTROL OF SECURITY COLLATERAL
	SECTION 5.

	 	MAINTAINING THE ACCOUNT COLLATERAL
	SECTION 6.

	 	REPRESENTATIONS AND WARRANTIES
	SECTION 7.

	 	FURTHER ASSURANCES
	SECTION 8.

	 	AS TO EQUIPMENT AND INVENTORY
	SECTION 9.

	 	INSURANCE
	SECTION 10.

	 	POST-CLOSING CHANGES; COLLECTIONS ON ASSIGNED AGREEMENTS, RECEIVABLES AND RELATED CONTRACTS
	SECTION 11.

	 	AS TO INTELLECTUAL PROPERTY COLLATERAL
	SECTION 12.

	 	VOTING RIGHTS; DIVIDENDS; ETC
	SECTION 13.

	 	AS TO LETTER-OF-CREDIT RIGHTS
	SECTION 14.

	 	COMMERCIAL TORT CLAIMS
	SECTION 15.

	 	TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES
	SECTION 16.

	 	COLLATERAL AGENT APPOINTED ATTORNEY IN FACT
	SECTION 17.

	 	COLLATERAL AGENT MAY PERFORM
	SECTION 18.

	 	THE COLLATERAL AGENT’S DUTIES
	SECTION 19.

	 	REMEDIES
	SECTION 20.

	 	INDEMNITY AND EXPENSES
	SECTION 21.

	 	AMENDMENTS; WAIVERS; ADDITIONAL GRANTORS; ETC
	SECTION 22.

	 	NOTICES, ETC
	SECTION 23.

	 	CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT
AGREEMENT
	SECTION 24.

	 	RELEASE; TERMINATION
	SECTION 25.

	 	EXECUTION IN COUNTERPARTS
	SECTION 26.

	 	GOVERNING LAW
	SECTION 27.

	 	MATTERS RELATING TO SECURITY






 









 






	 	 	 	 	 
	Schedules
	 	 	 	 
	 
	 	 	 	 
	Schedule I

	 	-
	 	Investment Property
	Schedule II

	 	-
	 	Pledged Deposit Accounts
	Schedule III

	 	-
	 	Intellectual Property
	Schedule IV

	 	-
	 	Commercial Tort Claims
	Schedule V

	 	-
	 	Location, Chief Executive Office, Type of Organization, Jurisdiction of
Organization and Organizational Identification Number
	Schedule VI

	 	-
	 	Locations of Equipment and Inventory
	Schedule VII

	 	-
	 	Letters of Credit
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of U.S. Intellectual Property Security Agreement
	Exhibit B

	 	-
	 	Form of U.S. Intellectual Property Security Agreement Supplement
	Exhibit C

	 	-
	 	Form of U.S. Security Agreement Supplement






 









 





U.S. SECURITY AGREEMENT




          U.S. SECURITY AGREEMENT dated December 23, 2009 made by TLC VISION (USA) CORPORATION, a
Delaware corporation, as a debtor and a debtor in possession (“Holdco”) and TLC Management
Services, Inc., a Delaware corporation, as a debtor and a debtor in possession (“TLC
Management”) and the other Persons listed on the signature pages hereof (Holdco, TLC Management
and the Persons so listed being, collectively, the “Grantors”), to CANTOR FITZGERALD
SECURITIES, as collateral agent (in such capacity, together with any successor collateral agent
appointed pursuant to Article VII of the Credit Agreement (as hereinafter defined), the
“Collateral Agent”) for the Secured Parties (as defined in the Credit Agreement).




          WHEREAS, Holdco, TLC Management and TLC Vision Corporation, a New Brunswick corporation, as a
debtor and a debtor in possession (the “Parent” together with Holdco and TLC Management
being referred to herein as the “Borrowers”), have entered into a Senior Secured Super
Priority Debtor in Possession Credit Agreement dated as of the date hereof (said Agreement, as it
may hereafter be amended, amended and restated, supplemented or otherwise modified from time to
time, being the “Credit Agreement”) with the Lenders party thereto and Cantor Fitzgerald
Securities, as administrative agent for such Lenders and collateral agent for the Secured Parties;




          WHEREAS, on December 21, 2009 (the “Petition Date”), the Borrowers filed a petition
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware;




          WHEREAS, subsequent to the Petition Date, the Parent filed a petition under Part IV of the
Companies’ Creditors Arrangements Act (Canada), as ancillary relief sought in the Ontario Superior
Court of Justice (Commercial List);




          WHEREAS, the Borrowers intend to continue to operate their business pursuant to Sections 1107
and 1108 of the Bankruptcy Code;




          WHEREAS, the Borrowers have requested that the Lenders provide financing to the Borrowers
consisting of a senior super priority term loan facility in an amount up to $15,000,000 (the
“Facility”) pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, the Lenders have indicated their willingness to agree to extend the Facility to the
Borrowers, all on terms and conditions set forth in the Credit Agreement and in the Order pursuant
to Sections 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, each Grantor is the owner of the shares of stock or other Equity Interests (the
“Initial Pledged Equity”) set forth opposite such Grantor’s name on and as otherwise
described in Part I of Schedule I hereto and issued by the Persons named therein and of the
indebtedness (the “Initial Pledged Debt”) set forth opposite such Grantor’s name on and as
otherwise described in Part II of Schedule I hereto and issued by the obligors named
therein;




 









 








          WHEREAS, each Grantor is the owner of the deposit accounts (the “Pledged Deposit
Accounts”) set forth opposite such Grantor’s name on Schedule II hereto;




          WHEREAS, it is a condition precedent to the making of the term loans otherwise extending
credit to the Borrowers under the Credit Agreement that the Grantors shall have granted the
security interest contemplated by this Agreement;




          WHEREAS, terms defined in the Credit Agreement and not otherwise defined in this Agreement are
used in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in
this Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined
below) are used in this Agreement as such terms are defined in such Article 8 or 9.




          NOW, THEREFORE, for and in consideration of the foregoing, each Grantor hereby agrees with the
Collateral Agent for the ratable benefit of the Secured Parties as follows:




          1. Grant of Security. Each Grantor hereby grants to the Collateral Agent, for the
ratable benefit of the Secured Parties, a security interest in and assigns, mortgages, charges,
hypothecates, and pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
such Grantor’s right, title and interest in and to the following, in each case, as to each type of
property described below, whether now owned or hereafter acquired by such Grantor, wherever
located, and whether now or hereafter existing or arising (collectively, the “Collateral”):





          1.1. all equipment in all of its forms, including, without limitation, all
machinery, tools, motor vehicles, vessels, furniture and fixtures, and all parts
thereof and all accessions thereto, including, without limitation, computer programs
and supporting information that constitute equipment within the meaning of the UCC
(any and all such property being the “Equipment”);




          1.2. all inventory in all of its forms, including, without limitation, (i) all
raw materials, work in process, finished goods and materials used or consumed in the
manufacture, production, preparation or shipping thereof, (ii) goods in which such
Grantor has an interest in mass or a joint or other interest or right of any kind
(including, without limitation, goods in which such Grantor has an interest or right
as consignee) and (iii) goods that are returned to or repossessed or stopped in
transit by such Grantor), and all accessions thereto and products thereof and
documents therefor, including, without limitation, computer programs and supporting
information that constitute inventory within the meaning of the UCC (any and all
such property being the “Inventory”);




          1.3. all accounts (including, without limitation, health-care-insurance
receivables), chattel paper (including, without limitation, tangible chattel paper
and electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general intangibles
(including, without limitation, payment intangibles) and other obligations of any
kind, whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services and whether or not earned by performance, and all



 









 







rights now or hereafter existing in and to all supporting obligations and in
and to all security agreements, mortgages, Liens, leases, letters of credit and
other contracts securing or otherwise relating to the foregoing property (any and
all of such accounts, chattel paper, instruments, deposit accounts, letter-of-credit
rights, general intangibles and other obligations, to the extent not referred to in
clause (d), (e) or (f) below, being the “Receivables,” and any and all such
supporting obligations, security agreements, mortgages, Liens, leases, letters of
credit and other contracts being the “Related Contracts”);




          1.4. the following (the “Security Collateral”):




          1.4.1. the Initial Pledged Equity and the certificates, if any, representing
the Initial Pledged Equity, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the Initial
Pledged Equity and all warrants, rights or options issued thereon or with respect
thereto;




          1.4.2. the Initial Pledged Debt and the instruments, if any, evidencing the
Initial Pledged Debt, and all interest, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Initial Pledged Debt;




          1.4.3. all additional shares of stock and other Equity Interests from time to
time acquired by such Grantor in any manner (such shares and other Equity Interests,
together with the Initial Pledged Equity, being the “Pledged Equity”), and
the certificates, if any, representing such additional shares or other Equity
Interests, and all dividends, distributions, return of capital, cash, instruments
and other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of such shares or other Equity Interests
and all warrants, rights or options issued thereon or with respect thereto;




          1.4.4. all additional indebtedness from time to time owed to such Grantor (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged
Debt”) and the instruments, if any, evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such indebtedness;




          1.4.5. all security entitlements with respect to all financial assets from time
to time credited to any and all securities accounts owned by any Grantor, and all
financial assets, and all dividends, distributions, return of capital, interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such security
entitlements or financial assets and all warrants, rights or options issued thereon
or with respect thereto; and



 









 






          1.4.6. all other investment property (including, without limitation, all (A)
securities, whether certificated or uncertificated, (B) security entitlements, (C)
securities accounts, (D) commodity contracts and (E) commodity accounts) in which
such Grantor has now, or acquires from time to time hereafter, any right, title or
interest in any manner, and the certificates or instruments, if any, representing or
evidencing such investment property, and all dividends, distributions, return of
capital, interest, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all of
such investment property and all warrants, rights or options issued thereon or with
respect thereto;




          1.5. each of the agreements to which such Grantor is now or may hereafter
become a party, in each case as such agreements may be amended, amended and
restated, supplemented or otherwise modified from time to time (collectively, the
“Assigned Agreements”), including, without limitation, (i) all rights of
such Grantor to receive moneys due and to become due under or pursuant to the
Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements,
(iii) claims of such Grantor for damages arising out of or for breach of or default
under the Assigned Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder (all such Collateral being the “Agreement
Collateral”);




          1.6. the following (collectively, the “Account Collateral”):




          1.6.1. the Pledged Deposit Accounts and all funds and financial assets from
time to time credited thereto (including, without limitation, all Cash Equivalents),
and all certificates and instruments, if any, from time to time representing or
evidencing the Pledged Deposit Accounts;




          1.6.2. all promissory notes, certificates of deposit, checks and other
instruments from time to time delivered to or otherwise possessed by the Collateral
Agent for or on behalf of such Grantor in substitution for or in addition to any or
all of the then existing Account Collateral; and




          1.6.3. all interest, dividends, distributions, cash, instruments and other
property from time to time received, receivable or otherwise distributed in respect
of or in exchange for any or all of the then existing Account Collateral; and




          1.7. the following (collectively, the “Intellectual Property
Collateral”):




          1.7.1. all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements
thereto (“Patents”);




          1.7.2. all trademarks, service marks, domain names, trade dress, logos,
designs, slogans, trade names, business names, corporate names and other source



 









 







identifiers, whether registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use trademark and service mark
applications to the extent that, and solely during the period in which, the grant of
a security interest therein would impair the validity or enforceability of such
intent-to-use trademark and service mark applications under applicable federal law),
together, in each case, with the goodwill symbolized thereby (“Trademarks”);




          1.7.3. all copyrights, including, without limitation, copyrights in Computer
Software (as hereinafter defined), internet web sites and the content thereof,
whether registered or unregistered (“Copyrights”);




          1.7.4. all computer software, programs and databases (including, without
limitation, source code, object code and all related applications and data files),
firmware and documentation and materials relating thereto, together with any and all
maintenance rights, service rights, programming rights, hosting rights, test rights,
improvement rights, renewal rights and indemnification rights and any substitutions,
replacements, improvements, error corrections, updates and new versions of any of
the foregoing (“Computer Software”);




          1.7.5. all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and data,
including, without limitation, technical data, financial, marketing and business
data, pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all
other intellectual, industrial and intangible property of any type, including,
without limitation, industrial designs and mask works;




          1.7.6. all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications for
registration set forth in Schedule III hereto, together with all reissues,
divisions, continuations, continuations-in-part, extensions, renewals and
reexaminations thereof;




          1.7.7. all tangible embodiments of the foregoing, all rights in the foregoing
provided by international treaties or conventions, all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such Grantor
accruing thereunder or pertaining thereto;




          1.7.8. all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the foregoing to which such
Grantor, now or hereafter, is a party or a beneficiary, including, without
limitation, the agreements set forth in Schedule III hereto (“IP
Agreements”); and




          1.7.9. any and all claims for damages and injunctive relief for past, present
and future infringement, dilution, misappropriation, violation, misuse or



 









 







breach with respect to any of the foregoing, with the right, but not the
obligation, to sue for and collect, or otherwise recover, such damages;




          1.8. the commercial tort claims described in Schedule IV hereto
(together with any commercial tort claims as to which the Grantors have complied
with the requirements of Section 14, the “Commercial Tort Claims
Collateral”);




          1.9. all books and records (including, without limitation, customer lists,
credit files, printouts and other computer output materials and records) of such
Grantor pertaining to any of the Collateral;




          1.10. all avoidance power claims or actions under section 549 of the Bankruptcy
Code relating to postpetition transfers of Collateral and proceeds thereof, and
subject to the entry of the Final Order, all avoidance power claims or actions under
chapter 5 of the Bankruptcy Code and any proceeds thereof; and




          1.11. all proceeds of, collateral for, income, royalties and other payments now
or hereafter due and payable with respect to, and supporting obligations relating
to, any and all of the Collateral (including, without limitation, proceeds, proceeds
of proceeds, collateral and supporting obligations that constitute property of the
types described in clauses (a) through (i) of this Section 1) and, to the
extent not otherwise included, all (A) payments under insurance (whether or not the
Collateral Agent is the loss payee thereof), or any indemnity, warranty or guaranty,
payable by reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral, and (B) cash.



          Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and
no Grantor shall be deemed to have granted a security interest in, (a) any Intellectual Property
Collateral, if the grant of such security interest shall constitute or result in the abandonment,
invalidation or rendering unenforceable any right, title or interest of such Grantor therein; (b)
in any license, contract or agreement to which such Grantor is a party or any of its rights or
interests thereunder, including, without limitation, with respect to any pledged partnership
interests or any pledged limited liability company interests, to the extent, but only to the
extent, that such a grant would, under the terms of such license, contract or agreement (including,
without limitation, any partnership agreements or any limited liability company agreements), or
otherwise, be prohibited by or result in a breach or termination of the terms of, or constitute a
default under or termination of any such license, contract or agreement (other than to the extent
that any such term would be rendered ineffective pursuant to Section 9-406 of the UCC (or any
successor provision) of any relevant jurisdiction or any other applicable law (including the
Bankruptcy Code) or principles of equity) or would otherwise constitute a violation of law,
regulation or policy; provided, however, that immediately upon the ineffectiveness, lapse or
termination of any such provision, the Collateral shall include, and each Grantor shall be deemed
to have granted a security interest in, all such rights and interests as if such provision had
never been in effect; (c) in any of the outstanding capital stock of a “controlled foreign
corporation” as defined in the Internal Revenue Code of 1986, as amended from time to time (each, a
“Controlled Foreign Corporation”), in excess of 65% of the voting power of all classes of
capital stock of such controlled foreign corporation entitled to vote to the






 









 







extent such security interest would result in a material adverse tax event under the United
States tax laws; or (d) property owned by any Grantor that is subject to a purchase money Lien or a
Capitalized Lease to the extent such purchase money Lien or Capitalized Lease is permitted under
the Credit Agreement if the contract or other agreement in which such Lien is granted (or if the
documentation providing for such purchase money Lien or Capitalized Lease prohibits or requires the
consent of any Person other than the Borrowers and their Affiliates as a condition to the creation
of any other Lien on such property); provided, that the respective Grantor uses commercially
reasonable efforts to permit the Collateral Agent to obtain a Lien on such property subject to the
prior Lien under such purchase money Lien or Capitalized Lease, as the case may be.




          2. Security for Obligations. This Agreement secures, in the case of each Grantor, the
payment of all Obligations of such Grantor now or hereafter existing under the Loan Documents,
whether direct or indirect, absolute or contingent, and whether for principal, reimbursement
obligations, interest, fees, premiums, penalties, indemnifications, contract causes of action,
costs, expenses or otherwise (all such Obligations being the “Secured Obligations”).
Without limiting the generality of the foregoing, this Agreement secures, as to each Grantor, the
payment of all amounts that constitute part of the Secured Obligations and would be owed by such
Grantor to any Secured Party under the Loan Documents but for the fact that they are unenforceable
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding
involving a Loan Party. Each Grantor acknowledges that (a) value has been given, (b) it has rights
in the Collateral of such Grantor or the power to transfer rights in the Collateral of such Grantor
to the Collateral Agent (other than after-acquired Collateral), (c) it has not agreed to postpone
the time of attachment of any of the security interests created under this Agreement, and (d) it
has received a copy of this Agreement.




          3. Grantors Remain Liable. Anything herein to the contrary notwithstanding, (a) each
Grantor shall remain liable under the contracts and agreements included in such Grantor’s
Collateral to the extent set forth therein to perform all of its duties and obligations thereunder
to the same extent as if this Agreement had not been executed, (b) the exercise by the Collateral
Agent of any of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and (c) no Secured Party
shall have any obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement or any other Loan Document, nor shall any Secured Party be
obligated to perform any of the obligations or duties of any Grantor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.




          4. Delivery and Control of Security Collateral. 4.1. All certificates or instruments
representing or evidencing Security Collateral shall be delivered to and held by or on behalf of
the Collateral Agent pursuant hereto and shall be in suitable form for transfer by delivery, or
shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form
and substance satisfactory to the Collateral Agent. The Collateral Agent shall have the right at
any time to exchange certificates or instruments representing or evidencing Security Collateral for
certificates or instruments of smaller or larger denominations.





          4.2. With respect to any Security Collateral that constitutes an uncertificated
security, the relevant Grantor will cause the issuer thereof, at the



 









 







reasonable request of the Collateral Agent, either (i) to register the
Collateral Agent as the registered owner of such security or (ii) to agree with such
Grantor and the Collateral Agent that such issuer will comply with instructions with
respect to such security originated by the Collateral Agent without further consent
of such Grantor, such agreement to be in form and substance satisfactory to the
Collateral Agent (such agreement being an “Uncertificated Security Control
Agreement”).




          4.3. With respect to the Securities Account and any Security Collateral that
constitutes a security entitlement as to which the financial institution acting as
Collateral Agent hereunder is not the securities intermediary, the relevant Grantor,
at the reasonable request of the Collateral Agent, will cause the securities
intermediary with respect to such Account or security entitlement either (i) to
identify in its records the Collateral Agent as the entitlement holder thereof or
(ii) to agree with such Grantor and the Collateral Agent that such securities
intermediary will comply with entitlement orders originated by the Collateral Agent
without further consent of such Grantor, such agreement to be in form and substance
satisfactory to the Collateral Agent (a “Securities Account Control
Agreement”).




          4.4. The Collateral Agent shall have the right, at any time in its discretion
and without notice to any Grantor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Security Collateral,
subject only to the revocable rights specified in Section 12(a).




          4.5. Upon the reasonable request of the Collateral Agent, each Grantor will
notify each issuer of Security Collateral granted by it hereunder that such Security
Collateral is subject to the security interest granted hereunder.



          5. Maintaining the Account Collateral. So long as any Loan or any other Obligation
(other than contingent indemnification and reimbursement claims in respect of which no claim
for payment has been asserted by the Person entitled thereto) of any Loan Party under any Loan
Document shall remain unpaid, or any Lender shall have any Commitment, each Grantor will maintain
deposit accounts as provided under the Credit Agreement.




          6. Representations and Warranties. Each Grantor represents and warrants as follows:





          6.1. Such Grantor’s exact legal name, location, chief executive office, type of
organization, jurisdiction of organization and organizational identification number,
as of the date hereof, is set forth in Schedule V hereto.




          6.2. Such Grantor is the legal and beneficial owner of the Collateral granted
or purported to be granted by it free and clear of any Lien, claim, option or right
of others, except for the security interest created under this Agreement or
permitted under the Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of such Collateral or listing



 









 







such Grantor or any trade name of such Grantor as debtor is on file in any
recording office, except such as may have been filed in favor of the Collateral
Agent relating to the Loan Documents or as otherwise permitted under the Credit
Agreement.




          6.3. All of the Equipment and Inventory of such Grantor are located at
the places specified therefor in Schedule VI hereto or at another location
as to which such Grantor has complied with the requirements of Section 8(a)
except for mobile laser equipment, Equipment being repaired and Equipment otherwise
maintained at other locations in the ordinary course of business. Such Grantor has
exclusive possession and control of its Equipment and Inventory, other than (i)
Equipment being repaired, and (ii) Inventory stored at any leased premises or
warehouse for which a landlord’s or warehouseman’s agreement, in form and substance
satisfactory to the Collateral Agent, is in effect.




          6.4. None of the Receivables or Agreement Collateral is evidenced by a
promissory note or other instrument that has not been delivered to the Collateral
Agent.




          6.5. If such Grantor is an issuer of Security Collateral, such Grantor confirms
that it has received notice of the security interest granted hereunder.




          6.6. The Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and, in the case of any entity, the equity of which is
Pledged Equity that is a corporation, is fully paid and non assessable. The Pledged
Debt pledged by such Grantor hereunder has been duly authorized, authenticated or
issued and delivered, is the legal, valid and binding obligation of the issuers
thereof, is evidenced by one or more promissory notes (which promissory notes have
been delivered to the Collateral Agent) and, to the knowledge of such Grantor, is
not in default.




          6.7. The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule I hereto. The Initial Pledged Debt constitutes all of
the outstanding indebtedness owed to such Grantor by the issuers thereof and, to the
extent evidenced by an instrument and in a principal amount in excess of $150,000,
as indicated on Schedule I hereto.




          6.8. Such Grantor has no investment property, other than the investment
property listed on Schedule I hereto and additional investment property as
to which such Grantor has complied with the requirements of Section 4.




          6.9. Such Grantor has no deposit accounts constituting Collateral, other than
the Pledged Deposit Accounts listed on Schedule II hereto and additional
Pledged Deposit Accounts as to which such Grantor has complied with the applicable
requirements of Section 5.



 









 






          6.10. Such Grantor, is not a beneficiary or assignee under any letter of
credit, other than the letters of credit described in Schedule VII hereto
and additional letters of credit as to which such Grantor has complied with the
requirements of Section 13.




          6.11. This Agreement creates in favor of the Collateral Agent for the benefit
of the Secured Parties a valid and continuing first priority security interest in
the Collateral granted by such Grantor, upon entry of the Order (subject only to the
Carve Out and Liens permitted to be equal or superior in priority pursuant to the
Credit Agreement), securing the payment of the Secured Obligations; all filings and
other actions (including, without limitation, actions necessary to obtain control of
Collateral as provided in Sections 9-104, 9-106 and 9-107 of the UCC but excluding
actions necessary to perfect the Collateral Agent’s security interest with respect
to Collateral evidenced by a certificate of title) necessary to perfect the security
interest in the Collateral granted by such Grantor have been duly made or taken and
are in full force and effect with respect to Collateral in which a security interest
can be perfected by the filing of a Uniform Commercial Code financing statement, the
filing or recordation with the U.S. Patent and Trademark Office or the obtaining of
control as provided in Sections 9-104, 9-106 and 9-107 of the UCC, except as
otherwise permitted hereunder; and such security interest is first priority (subject
to the Carve Out and Liens permitted to be equal or superior in priority pursuant to
the Credit Agreement).




          6.12. Except for the approval of the Bankruptcy Court pursuant to the Order, no
authorization or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is required for
(i) the grant by such Grantor of the security interest granted hereunder or for the
execution, delivery or performance of this Agreement by such Grantor, except for the
filing of financing and continuation statements under the UCC, (ii) the perfection
or maintenance of the security interest created hereunder (including the first
priority nature of such security interest subject to Liens permitted to be equal or
superior in priority pursuant to the Credit Agreement), except for the filing of
financing and continuation statements under the UCC taking possession of cash and
money, the recordation of the Intellectual Property Security Agreement referred to
in Section 11(f) with the U.S. Patent and Trademark Office and the U.S.
Copyright Office, which Agreements will be duly recorded and are in full force and
effect, and the actions described in Section 4 with respect to the Security
Collateral, which actions have been taken and are in full force and effect, except
with respect to Collateral evidenced by a certificate of title or (iii) the exercise
by the Collateral Agent of its voting or other rights provided for in this Agreement
or the remedies in respect of the Collateral pursuant to this Agreement, except as
may be required in connection with the disposition of any portion of the Security
Collateral by laws affecting the offering and sale of securities generally.




          6.13. [Intentionally omitted.]



 









 






          6.14. As to itself and its Intellectual Property Collateral:




          6.14.1. The operation of such Grantor’s business as currently conducted or as
now contemplated to be conducted and the use of the Intellectual Property Collateral
in connection therewith do not, to such Grantor’s knowledge, conflict with,
infringe, misappropriate, dilute, misuse or otherwise violate the intellectual
property rights of any third party.




          6.14.2. Such Grantor is the exclusive owner or licensed owner of all right,
title and interest in and to the Intellectual Property Collateral, and is entitled
to use all Intellectual Property Collateral subject only to the terms of the IP
Agreements.




          6.14.3. The Intellectual Property Collateral set forth on Schedule III
hereto includes all of the issued patents, patent applications, domain names,
trademark registrations and applications, and copyright registrations and
applications owned by such Grantor and all IP Agreements to which such Grantor is a
party or beneficiary as of the date hereof.




          6.14.4. The Intellectual Property Collateral material to the business of the
Grantors is subsisting and has not been adjudged invalid or unenforceable in whole
or part, and to the best of such Grantor’s knowledge, is valid and enforceable.
Such Grantor is not aware of any uses of any item of Intellectual Property
Collateral that could be expected to lead to such item becoming invalid or
unenforceable.




          6.14.5. As to each item of Intellectual Property Collateral material to the
business of the Grantors, taken as a whole, such Grantor has made or performed all
filings, recordings and other acts and has paid all required fees and taxes to
maintain and protect its interest in each such item of Intellectual Property
Collateral in full force and effect, including, without limitation, recordations of
any of its interests in the Patents and Trademarks with the U.S. Patent and
Trademark Office and in corresponding national and international patent offices, and
recordation of any of its interests in the Copyrights with the U.S. Copyright Office
and in corresponding national and international copyright offices. Such Grantor has
used proper statutory notice in connection with its use of each patent, trademark
and copyright in the Intellectual Property Collateral material to the business of
the Grantors taken as a whole.




          6.14.6. No claim, action, suit, investigation, litigation or proceeding has
been asserted or is pending or, to such Grantor’s knowledge, threatened against such
Grantor (A) based upon or challenging or seeking to deny or restrict the Grantor’s
rights in or use of any of the Intellectual Property Collateral material to the
business of the Grantors, (B) to such Grantor’s knowledge, alleging that the
Grantor’s rights in or use of the Intellectual Property Collateral or that any
services provided by, processes used by, or products manufactured or sold by, such
Grantor infringe, misappropriate, dilute, misuse or otherwise violate any



 









 







patent, trademark, copyright or any other proprietary right of any third party,
or (C) alleging that the Intellectual Property Collateral is being licensed or
sublicensed in violation or contravention of the terms of any license or other
agreement. To such Grantor’s knowledge, no Person is engaging in any activity that
infringes, misappropriates, dilutes, misuses or otherwise violates the Intellectual
Property Collateral or the Grantor’s rights in or use thereof. Except as set forth
on Schedule III hereto, such Grantor has not granted any license, release,
covenant not to sue, non-assertion assurance, or other right to any Person with
respect to any part of the Intellectual Property Collateral. The consummation of
the transactions contemplated by the Loan Documents will not result in the
termination or impairment of any of the Intellectual Property Collateral.




          6.14.7. With respect to each IP Agreement, to such Grantor’s knowledge: (A)
such IP Agreement is valid and binding and in full force and effect and represents
the entire agreement between the respective parties thereto with respect to the
subject matter thereof; (B) such IP Agreement will not cease to be valid and binding
and in full force and effect on terms identical to those currently in effect as a
result of the rights and interest granted herein, nor will the grant of such rights
and interest constitute a breach or default under such IP Agreement or otherwise
give any party thereto a right to terminate such IP Agreement; (C) such Grantor has
not received any notice of termination or cancellation under such IP Agreement; (D)
such Grantor has not received any notice of a breach or default under such IP
Agreement, which breach or default has not been cured; (E) such Grantor has not
granted to any other third party any rights, adverse or otherwise, under such IP
Agreement; and (F) neither such Grantor nor, to the knowledge of such Grantor, any
other party to such IP Agreement is in breach or default thereof in any material
respect, and no event has occurred that, with notice or lapse of time or both, would
constitute such a breach or default or permit termination, modification or
acceleration under such IP Agreement.




          6.14.8. To the best of such Grantor’s knowledge, (A) none of the Trade Secrets
of such Grantor has been used, divulged, disclosed or appropriated to the detriment
of such Grantor for the benefit of any other Person other than such Grantor; (B) no
employee, independent contractor or agent of such Grantor has misappropriated any
trade secrets of any other Person in the course of the performance of his or her
duties as an employee, independent contractor or agent of such Grantor; and (C) no
employee, independent contractor or agent of such Grantor is in default or material
breach of any term of any employment agreement, non-disclosure agreement, assignment
of inventions agreement or similar agreement or contract relating in any way to the
protection, ownership, development, use or transfer of such Grantor’s Intellectual
Property Collateral.




          6.14.9. No Grantor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral that is material to the
business of the Grantors, taken as a whole or that would impair the validity or
enforceability of such material Intellectual Property Collateral.



 









 






          6.15. Such Grantor has no commercial tort claims other than those listed in
Schedule IV hereto and additional commercial tort claims as to which such
Grantor has complied or will comply with the requirements of Section 14.



          7. Further Assurances. 7.1. Each Grantor agrees that from time to time, at the
expense of such Grantor, such Grantor will promptly execute and deliver, or otherwise authenticate,
all further instruments and documents, and take all further action that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor hereunder or by the
Orders or to enable the Collateral Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral of such Grantor. Without limiting the generality of the foregoing,
each Grantor will promptly with respect to Collateral of such Grantor: (i) if any such Collateral
shall be evidenced by a promissory note or other instrument or chattel paper, deliver and pledge to
the Collateral Agent hereunder such note or instrument or chattel paper duly indorsed and
accompanied by duly executed instruments of transfer or assignment, all in form and substance
satisfactory to the Collateral Agent; (ii) file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary or desirable, or as
the Collateral Agent may reasonably request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iii) at the reasonable request of
the Collateral Agent, take all action to ensure that the Collateral Agent’s security interest is
noted on any certificate of title related to any Collateral evidenced by a certificate of title;
and (iv) deliver to the Collateral Agent evidence that all other actions that the Collateral Agent
may deem reasonably necessary or desirable in order to perfect and protect the security interest
granted or purported to be granted by such Grantor under this Agreement has been taken.





          7.2. Each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, including, without
limitation, one or more financing statements indicating that such financing
statements cover all assets or all personal property (or words of similar effect) of
such Grantor, regardless of whether any particular asset described in such financing
statements falls within the scope of the UCC or the granting clause of this
Agreement. A photocopy or other reproduction of this Agreement shall be sufficient
as a financing statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.




          7.3. Each Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of such
Grantor and such other reports in connection with such Collateral as the Collateral
Agent may reasonably request, all in reasonable detail.



          8. As to Equipment and Inventory. 8.1. Each Grantor will keep its Equipment,
Inventory, and other tangible personal property (other than Inventory sold in accordance with the
terms of the Credit Agreement and except for mobile laser equipment and Equipment being repaired in
the ordinary course of business) at the places therefor specified in






 









 







Section 6(c) or, upon 30 days’ prior written notice to the Collateral Agent, at such
other places designated by such Grantor in such notice, except as provided in Section 6(c).





          8.2. Each Grantor will cause its Equipment to be maintained and preserved in
the same condition, repair and working order as when new, ordinary wear and tear
excepted, and will forthwith, or in the case of any loss or damage to any of such
Equipment as soon as practicable after the occurrence thereof, make or cause to be
made all repairs, replacements and other improvements in connection therewith that
are necessary or desirable to such end. Each Grantor will promptly furnish to the
Collateral Agent a statement respecting any loss or damage exceeding $10,000 per
occurrence to any of its Equipment or Inventory.



          9. Insurance. 9.1. Each Grantor will, at its own expense, maintain insurance with
respect to its Equipment and Inventory in such amounts, against such risks, in such form and with
such insurers, as shall be satisfactory to the Collateral Agent from time to time. Each policy of
each Grantor for liability insurance shall provide for all losses to be paid on behalf of the
Collateral Agent and such Grantor as their interests may appear, and each policy for property
damage insurance shall provide for all losses to be paid directly to the Collateral Agent. Each
such policy shall in addition (i) name such Grantor and the Collateral Agent as insured parties
thereunder (without any representation or warranty by or obligation upon the Collateral Agent) as
their interests may appear, (ii) contain the agreement by the insurer that any loss thereunder
shall be payable to the Collateral Agent, upon its reasonable request, notwithstanding any action,
inaction or breach of representation or warranty by such Grantor, (iii) provide that there shall be
no recourse against the Collateral Agent for payment of premiums or other amounts with respect
thereto and (iv) provide that at least 10 days’ prior written notice of cancellation or of lapse
shall be given to the Collateral Agent by the insurer. Each Grantor will, if so reasonably
requested by the Collateral Agent, deliver to the Collateral Agent original or duplicate policies
of such insurance and, as often as the Collateral Agent may reasonably request, a report of a
reputable insurance broker with respect to such insurance. Further, each Grantor will, at the
reasonable request of the Collateral Agent, duly execute and deliver instruments of assignment of
such insurance policies to comply with the requirements of Section 8 and cause the insurers
to acknowledge notice of such assignment.





          9.2. Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 9 may be paid directly to the Person who shall have
incurred liability covered by such insurance.



          10. Post-Closing Changes; Collections on Assigned Agreements, Receivables and Related
Contracts. 10.1. No Grantor will change its name, type of organization, jurisdiction of
organization, organizational identification number or location from those set forth in Section
6(a) of this Agreement without first giving at least 30 days’ prior written notice to the
Collateral Agent and taking all action required by the Collateral Agent for the purpose of
perfecting or protecting the security interest granted by this Agreement. Each Grantor will hold
and preserve its records relating to the Collateral, including, without limitation, the Assigned
Agreements and Related Contracts, and will permit representatives of the Collateral Agent at any
time during normal business hours to inspect and make abstracts from such records and other
documents. If






 









 







any Grantor does not have an organizational identification number and later obtains one, it
will forthwith notify the Collateral Agent of such organizational identification number.





          10.2. Except as otherwise provided in this subsection (b), each Grantor will
continue to collect, at its own expense, all amounts due or to become due such
Grantor under the Assigned Agreements, Receivables and Related Contracts. In
connection with such collections, such Grantor may take such action as such Grantor
or the Collateral Agent may deem necessary or advisable to enforce collection of the
Assigned Agreements and otherwise exercise all of its rights under the Assigned
Agreements as it deems appropriate, Receivables and Related Contracts; provided,
however, that the Collateral Agent shall have the right at any time, upon the
occurrence and during the continuance of an Event of Default and upon written
notice to such grantor of its intention to do so, to notify the Obligors under any
Assigned Agreements, Receivables and Related Contracts of the assignment of such
Assigned Agreements, Receivables and Related Contracts to the Collateral Agent and
to direct such Obligors to make payment of all amounts due or to become due to such
Grantor thereunder directly to the Collateral Agent and, upon such notification and
at the expense of such Grantor, to enforce collection of any such Assigned
Agreements, Receivables and Related Contracts, to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such Grantor
might have done, and to otherwise exercise all rights with respect to such Assigned
Agreements, Receivables and Related Contracts, including, without limitation, those
set forth set forth in Section 9-607 of the UCC. After receipt by any Grantor of
the notice from the Collateral Agent referred to in the proviso to the preceding
sentence, (i) all amounts and proceeds (including, without limitation, instruments)
received by such Grantor in respect of the Assigned Agreements, Receivables and
Related Contracts of such Grantor shall be received in trust for the benefit of the
Collateral Agent hereunder, shall be segregated from other funds of such Grantor and
shall be forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary endorsement) and either (A) released to such Grantor so long as
no Event of Default shall have occurred and be continuing or (B) if any Event of
Default shall have occurred and be continuing, applied as provided in Section
19(b) and (ii) such Grantor will not adjust, settle or compromise the amount or
payment of any Receivable or amount due on any Assigned Agreement or Related
Contract, release wholly or partly any Obligor thereof or allow any credit or
discount thereon. Except for the Carve Out, no Grantor will permit or consent to
the subordination of its right to payment under any of the Assigned Agreements,
Receivables and Related Contracts to any other indebtedness or obligations of the
Obligor thereof.



          11. As to Intellectual Property Collateral. 11.1. With respect to each item of its
Intellectual Property Collateral material to the business of the Grantors, taken as a whole, each
Grantor agrees to take, at its expense, all reasonable steps, and shall not knowingly omit to do
any act, including, without limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright
Office and any other governmental authority, to (i) maintain the validity and enforceability of
such Intellectual Property Collateral and maintain such Intellectual Property






 









 







Collateral in full force and effect, and (ii) pursue the registration and maintenance of each
patent, trademark, or copyright registration or application, now or hereafter included in such
Intellectual Property Collateral of such Grantor, including, without limitation, the payment of
required fees and taxes, the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the U.S. Copyright Office or other governmental authorities, the filing of
applications for renewal or extension, the filing of affidavits under Sections 8 and 15 of the U.S.
Trademark Act, the filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the participation in interference,
reexamination, opposition, cancellation, infringement and misappropriation proceedings. No Grantor
shall, without the written consent of the Collateral Agent, discontinue use of or otherwise abandon
any Intellectual Property Collateral material to the business of the Grantors, taken as a whole, or
abandon any right to file an application for patent, trademark, or copyright, unless such Grantor
shall have previously determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of such Grantor’s business and that the
loss thereof would not be reasonably likely to have a Material Adverse Effect.





          11.2. Each Grantor agrees promptly to notify the Collateral Agent if such
Grantor becomes aware (i) that any item of the Intellectual Property Collateral
material to the business of the Grantors, taken as a whole, may have become
abandoned, placed in the public domain, invalid or unenforceable, or of any adverse
determination or development regarding such Grantor’s ownership or use of any such
Intellectual Property Collateral or its right to register the same or to keep and
maintain and enforce the same, or (ii) of any adverse determination or the
institution of any proceeding (including, without limitation, the institution of any
proceeding in the U.S. Patent and Trademark Office or any court) regarding any item
of the Intellectual Property Collateral material to the business of the Grantors.




          11.3. In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral material to the business of the Grantors, taken as
a whole, is being infringed or misappropriated by a third party, such Grantor shall
promptly notify the Collateral Agent and shall take all reasonable actions, at its
expense, to protect or enforce such Intellectual Property Collateral, including,
without limitation, suing for infringement or misappropriation and for an injunction
against such infringement or misappropriation.




          11.4. Each Grantor shall use proper statutory notice in connection with its use
of each item of material Intellectual Property Collateral.




          11.5. Each Grantor shall take all steps which it or the Collateral Agent deems
reasonable and appropriate under the circumstances to preserve and protect each item
of its Intellectual Property Collateral material to the business of the Grantors,
taken as a whole, including, without limitation, maintaining the quality of any and
all products or services used or provided in connection with any of the material
Trademarks, consistent with the quality of the products and services as of the date
hereof, and taking all steps necessary to ensure that all licensed users of any of
the material Trademarks use such consistent standards of quality.



 









 






          11.6. With respect to its Intellectual Property Collateral, each Grantor agrees
to execute or otherwise authenticate an agreement, in substantially the form set
forth in Exhibit A hereto or otherwise in form and substance satisfactory to
the Collateral Agent (an “Intellectual Property Security Agreement”), for
recording the security interest granted hereunder to the Collateral Agent in such
Intellectual Property Collateral with the U.S. Patent and Trademark Office, the U.S.
Copyright Office and any other governmental authorities necessary to perfect the
security interest hereunder in such Intellectual Property Collateral.




          11.7. Each Grantor agrees that should it obtain an ownership interest in or
license to any item of the type set forth in Section 1(g) that is not on the
date hereof a part of the Intellectual Property Collateral (“After-Acquired
Intellectual Property”) (i) the provisions of this Agreement shall automatically
apply thereto, and (ii) any such After-Acquired Intellectual Property and, in the
case of trademarks, the goodwill symbolized thereby, shall automatically become part
of the Intellectual Property Collateral subject to the terms and conditions of this
Agreement with respect thereto. Each Grantor shall give prompt written notice to
the Collateral Agent identifying the After-Acquired Intellectual Property, and such
Grantor shall execute and deliver to the Collateral Agent with such written notice,
or otherwise authenticate, an agreement substantially in the form of Exhibit B
hereto or otherwise in form and substance satisfactory to the Collateral Agent (an
“IP Security Agreement Supplement”) covering such After-Acquired
Intellectual Property, which IP Security Agreement Supplement shall be recorded with
the U.S. Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such After-Acquired Intellectual Property.



          12. Voting Rights; Dividends; Etc. 12.1. So long as no Event of Default shall have
occurred and be continuing:





          12.1.1. Each Grantor shall be entitled to exercise any and all voting and other
consensual rights pertaining to the Security Collateral of such Grantor or any part
thereof for any purpose; provided however, that such Grantor will not exercise or
refrain from exercising any such right if such action would have a material adverse
effect on the value of the Security Collateral or any part thereof.




          12.1.2. Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided, however, that any
and all




          (a) dividends, interest and other distributions paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Security Collateral,



 









 






          (b) dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital,
capital surplus or paid in surplus and




          (c) cash paid, payable or otherwise distributed in respect of principal
of, or in redemption of, or in exchange for, any Security Collateral




shall be, and shall be forthwith delivered to the Collateral Agent
to hold as, Security Collateral and shall, if received by such
Grantor, be received in trust for the benefit of the Collateral
Agent, be segregated from the other property or funds of such
Grantor and be forthwith delivered to the Collateral Agent as
Security Collateral in the same form as so received (with any
necessary indorsement).




          12.1.3. The Collateral Agent will execute and deliver (or cause to be executed
and delivered) to each Grantor all such proxies and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to exercise
the voting and other rights that it is entitled to exercise pursuant to paragraph
(i) above and to receive the dividends or interest payments that it is authorized to
receive and retain pursuant to paragraph (ii) above.




          12.2. Upon the occurrence and during the continuance of an Event of Default:




          12.2.1. All rights of each Grantor (x) to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to Section 12(a)(i) shall, upon notice to such Grantor by
the Collateral Agent, cease and (y) to receive the dividends, interest and other
distributions that it would otherwise be authorized to receive and retain pursuant
to Section 12(a)(ii) shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon have the sole
right to exercise or refrain from exercising such voting and other consensual rights
and to receive and hold as Security Collateral such dividends, interest and other
distributions.




          12.2.2. All dividends, interest and other distributions that are received by
any Grantor contrary to the provisions of paragraph (i) of this Section
12(b) shall be received in trust for the benefit of the Collateral Agent, shall
be segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received (with
any necessary indorsement).



          13. As to Letter-of-Credit Rights. 13.1. Each Grantor, by granting a security
interest in its Receivables consisting of letter-of-credit rights to the Collateral Agent, intends
to (and hereby does) assign to the Collateral Agent its rights (including its contingent rights) to
the






 









 







proceeds of all Related Contracts consisting of letters of credit of which it is or hereafter
becomes a beneficiary or assignee. Each Grantor will promptly use its best efforts to cause the
issuer of each letter of credit and each nominated person (if any) with respect thereto to consent
to such assignment of the proceeds thereof pursuant to a consent in form and substance satisfactory
to the Collateral Agent and deliver written evidence of such consent to the Collateral Agent.





          13.2. Upon the occurrence and during the continuance of an Event of Default,
each Grantor will, promptly upon reasonable request by the Collateral Agent, (i)
notify (and such Grantor hereby authorizes the Collateral Agent to notify) the
issuer and each nominated person with respect to each of the Related Contracts
consisting of letters of credit that the proceeds thereof have been assigned to the
Collateral Agent hereunder and any payments due or to become due in respect thereof
are to be made directly to the Collateral Agent or its designee and (ii) arrange for
the Collateral Agent to become the transferee beneficiary of letter of credit.



          14. Commercial Tort Claims. Each Grantor will promptly give notice to the Collateral
Agent of any commercial tort claim that may arise after the date hereof and will immediately
execute or otherwise authenticate a supplement to this Agreement, and otherwise take all necessary
action, to subject such commercial tort claim to the first priority (subject to the Carve Out and
Liens permitted to be equal or superior in priority pursuant to the Credit Agreement) security
interest created under this Agreement.




          15. Transfers and Other Liens; Additional Shares. 15.1. Each Grantor agrees that it
will not (i) sell, assign or otherwise dispose of, or grant any option with respect to, any of the
Collateral, other than sales, assignments and other dispositions of Collateral, and options
relating to Collateral, permitted under the terms of the Credit Agreement, or (ii) create or suffer
to exist any Lien upon or with respect to any of the Collateral of such Grantor except for the
pledge, assignment and security interest created under this Agreement and Liens permitted under the
Credit Agreement.





          15.2. Each Grantor agrees that it will (i) cause each issuer of the Pledged
Equity pledged by such Grantor not to issue any Equity Interests or other securities
in addition to or in substitution for the Pledged Equity issued by such issuer,
except to such Grantor, and (ii) pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all additional Equity Interests or other
securities of each issuer of the Pledged Equity.



          16. Collateral Agent Appointed Attorney in Fact. Each Grantor hereby irrevocably
appoints the Collateral Agent such Grantor’s attorney in fact, with full authority in the place and
stead of such Grantor and in the name of such Grantor or otherwise, from time to time, upon the
occurrence and during the continuation of an Event of Default, in the Collateral Agent’s
discretion, to take any action and to execute any instrument that the Collateral Agent may deem
necessary or advisable to accomplish the purposes of this Agreement, including, without limitation:







 









 









          16.1. to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to Section 9,




          16.2. to ask for, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral,




          16.3. to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and




          16.4. to file any claims or take any action or institute any proceedings that
the Collateral Agent may deem necessary or desirable for the collection of any of
the Collateral or otherwise to enforce compliance with the terms and conditions of
any Assigned Agreement or the rights of the Collateral Agent with respect to any of
the Collateral.



          17. Collateral Agent May Perform. If any Grantor fails to perform any agreement
contained herein on or after the date required for performance thereof, the Collateral Agent may,
but without any obligation to do so and without notice, itself perform, or cause performance of,
such agreement, and the expenses of the Collateral Agent incurred in connection therewith shall be
payable by such Grantor under, and to the extent provided in, Section 20.




          18. The Collateral Agent’s Duties. 18.1. The powers conferred on the Collateral Agent
hereunder are solely to protect the Secured Parties’ interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking action with respect to
calls, conversions, exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not any Secured Party has or is deemed to have knowledge of such matters, or as to the
taking of any necessary steps to preserve rights against any parties or any other rights pertaining
to any Collateral. The Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which it accords its own property.





          18.2. Anything contained herein to the contrary notwithstanding, the Collateral
Agent may from time to time, when the Collateral Agent deems it to be necessary,
appoint one or more subagents (each a “Subagent”) for the Collateral Agent
hereunder with respect to all or any part of the Collateral. In the event that the
Collateral Agent so appoints any Subagent with respect to any Collateral, (i) the
assignment and pledge of such Collateral and the security interest granted in such
Collateral by each Grantor hereunder shall be deemed for purposes of this Security
Agreement to have been made to such Subagent, in addition to the Collateral Agent,
for the ratable benefit of the Secured Parties, as security for the Secured
Obligations of such Grantor, (ii) such Subagent shall automatically be vested, in
addition to the Collateral Agent, with all rights, powers, privileges, interests and
remedies of the Collateral Agent hereunder with respect to such Collateral, and
(iii) the term “Collateral Agent,” when used herein in relation to



 









 







any rights, powers, privileges, interests and remedies of the Collateral Agent
with respect to such Collateral, shall include such Subagent; provided, however,
that no such Subagent shall be authorized to take any action with respect to any
such Collateral unless and except to the extent expressly authorized in writing by
the Collateral Agent.



          19. Remedies. If any Event of Default shall have occurred and be continuing:





          19.1. The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral), the Bankruptcy Code, or
any other applicable law, and also may: (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon reasonable request of the
Collateral Agent forthwith, assemble all or part of the Collateral as directed by
the Collateral Agent and make it available to the Collateral Agent at a place and
time to be designated by the Collateral Agent that is reasonably convenient to both
parties; (ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of the
Collateral Agent’s offices or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as the Collateral Agent may deem commercially reasonable;
(iii) occupy any premises owned or leased by any of the Grantors where the
Collateral or any part thereof is assembled or located for a reasonable period in
order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise any and
all rights and remedies of any of the Grantors under or in connection with the
Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise require
payment of any amount under, or performance of any provision of, the Assigned
Agreements, the Receivables, the Related Contracts and the other Collateral, (B)
withdraw, or cause or direct the withdrawal, of all funds with respect to the
Account Collateral and (C) exercise all other rights and remedies with respect to
the Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, including, without limitation, those set forth in Section 9-607 of the
UCC. Each Grantor agrees that, to the extent notice of sale shall be required by
law, at least ten days’ notice to such Grantor of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make any
sale of Collateral regardless of notice of sale having been given. The Collateral
Agent may adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.




          19.2. Any cash held by or on behalf of the Collateral Agent and all cash
proceeds received by or on behalf of the Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Collateral may, in
the discretion of the Collateral Agent, be held by the Collateral Agent as
collateral



 









 







for, and/or then or at any time thereafter paid (after payment of any amounts
payable to the Collateral Agent pursuant to Section 20) in whole or in part
by the Collateral Agent for the ratable benefit of the Secured Parties against, all
or any part of the Secured Obligations (other than contingent indemnification
and reimbursement claims in respect of which no claim for payment has been asserted
by the Person entitled thereto), in the following manner:




          19.2.1. first, paid to the Collateral Agent for any amounts then owing to the
Collateral Agent pursuant to Section 9.04 of the Credit Agreement or otherwise under
the Loan Documents; and




          19.2.2. second, ratably, paid to the Secured Parties for any amounts then owing
to them, in their capacities as such, under the Loan Documents and the ratably in
accordance with the amounts then owing to the Secured Parties.



          Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent and
remaining after payment in full of all the Secured Obligations shall be paid over to the applicable
Grantor or to whomsoever may be lawfully entitled to receive such surplus.





          19.3. All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other funds
of such Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement).




          19.4. The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set off and otherwise
apply all or any part of the Secured Obligations against any funds held with respect
to the Account Collateral or in any other deposit account.




          19.5. The Collateral Agent may send to each bank, securities intermediary or
issuer party to any Deposit Account Control Agreement, Securities/Deposit Account
Control Agreement, Securities Account Control Agreement or Uncertificated Security
Control Agreement a “Notice of Exclusive Control” as defined in and under such
Agreement; provided, that the Collateral Agent shall use reasonable commercial
efforts to rescind such “Notice of Exclusive Control” within a reasonable period of
time following the date on which no Default or Event of Default exists.




          19.6. In the event of any sale or other disposition of any of the Intellectual
Property Collateral of any Grantor, the goodwill symbolized by any Trademarks
subject to such sale or other disposition shall be included therein, and such
Grantor shall supply to the Collateral Agent or its designee such Grantor’s know-how
and expertise, and documents and things relating to any Intellectual Property
Collateral subject to such sale or other disposition, and such Grantor’s customer
lists and other records and documents relating to such Intellectual



 









 







Property Collateral and to the manufacture, distribution, advertising and sale
of products and services of such Grantor.




          19.7. The Collateral Agent may realize upon the Collateral and enforce the
rights of the Collateral Agent and the Secured Parties by (i) appointment by
instrument in writing of a receiver (which term as used in this Agreement includes a
receiver and manager) or agent of all or any part of the Collateral and the removal
or replacement from time to time of any receiver or agent, and (ii) institution of
proceedings in any court of competent jurisdiction for the appointment of a receiver
of all or any part of the Collateral.



          20. Indemnity and Expenses. 20.1. Each Grantor agrees to indemnify, defend and save
and hold harmless each Secured Party and each of their Affiliates and their respective officers,
directors, employees, agents and advisors (each, an “Indemnified Party”) from and against,
and shall pay on demand, any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in connection with or
resulting from this Agreement (including, without limitation, enforcement of this Agreement),
except to the extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted from such Indemnified
Party’s gross negligence or willful misconduct.





          20.2. Each Grantor will upon demand pay to the Collateral Agent the amount of
any and all reasonable expenses, including, without limitation, the reasonable fees
and expenses of its counsel and of any experts and agents, that the Collateral Agent
may incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or other
realization upon, any of the Collateral of such Grantor, (iii) the exercise or
enforcement of any of the rights of the Collateral Agent or the other Secured
Parties hereunder or (iv) the failure by such Grantor to perform or observe any of
the provisions hereof.



          21. Amendments; Waivers; Additional Grantors; Etc. 21.1. No amendment or waiver of
any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the Collateral Agent, and
then such waiver or consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Collateral Agent or any other Secured Party
to exercise, and no delay in exercising any right hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.





          21.2. Upon the execution and delivery by any Person of a security agreement
supplement in substantially the form of Exhibit C hereto (each a
“Security Agreement Supplement”), such Person shall be referred to as an
“Additional Grantor” and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to “Grantor” shall also
mean and be a reference to such Additional Grantor, each reference in this



 









 







Agreement and the other Loan Documents to the “Collateral” shall also mean and
be a reference to the Collateral granted by such Additional Grantor and each
reference in this Agreement to a Schedule shall also mean and be a reference to the
schedules attached to such Security Agreement Supplement.



          22. Notices, Etc. All notices and other communications provided for hereunder shall
be either (i) in writing (including facsimile communications) and mailed, sent via facsimile or
otherwise delivered or (ii) by electronic mail (if electronic mail addresses are designated as
provided below) confirmed immediately in writing, in the case of the Administrative Borrower or the
Collateral Agent, addressed to it at its address specified in the Credit Agreement and, in the case
of each Grantor other than the Borrowers, addressed to it at its address set forth opposite such
Grantor’s name on the signature pages hereto or on the signature page to the Security Agreement
Supplement pursuant to which it became a party hereto; or, as to any party, at such other address
as shall be designated by such party in a written notice to the other parties. All such notices
and other communications shall, when mailed, sent by facsimile, electronic mail or otherwise, be
effective when deposited in the mails, sent by facsimile, sent by electronic mail and confirmed in
writing, or otherwise delivered (or confirmed by a signed receipt), respectively, addressed as
aforesaid; except that notices and other communications to the Collateral Agent shall not be
effective until received by the Collateral Agent. Delivery by facsimile of an executed counterpart
of any amendment or waiver of any provision of this Agreement or of any Security Agreement
Supplement or Schedule hereto shall be effective as delivery of an original executed counterpart
thereof.




          23. Continuing Security Interest; Assignments under the Credit Agreement. This
Agreement shall create a continuing security interest in the Collateral and shall (a) remain in
full force and effect until the latest of (i) the payment in full in cash of the Secured
Obligations (other than contingent indemnification and reimbursement claims in respect of which
no claim for payment has been asserted by the Person entitled thereto) and (ii) the Maturity
Date (b) be binding upon each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights
and obligations under the Credit Agreement (including, without limitation, all or any portion of
its Commitments, the Loans owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise, in each case as provided in the Credit
Agreement.




          24. Release; Termination. 24.1. Upon any sale, lease, transfer or other disposition
of any item of Collateral of any Grantor in accordance with the terms of the Loan Documents (other
than sales of Inventory, equipment and other obsolete or worn-out equipment in the ordinary course
of business), the Collateral Agent will, at such Grantor’s expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence the release of such
item of Collateral from the assignment and security interest granted hereby; provided, however,
that (i) at the time of such request and such release no Event of Default shall have occurred and
be continuing, (ii) such Grantor shall have delivered to the Collateral Agent, at least ten
Business Days prior to the date of the proposed release, a written request for release






 









 







describing the item of Collateral and the terms of the sale, lease, transfer or other
disposition in reasonable detail, including, without limitation, the price thereof and any expenses
in connection therewith, together with a form of release for execution by the Collateral Agent and
a certificate of such Grantor to the effect that the transaction is in compliance with the Loan
Documents and as to such other matters as the Collateral Agent may reasonably request and (iii) the
proceeds of any such sale, lease, transfer or other disposition required to be applied, or any
payment to be made in connection therewith, in accordance with Section 2.03 of the Credit Agreement
shall, to the extent so required, be paid or made to, or in accordance with the instructions of,
the Collateral Agent when and as required under Section 2.03 of the Credit Agreement.





          24.2. Upon the latest of (i) the payment in full in cash of the Secured
Obligations, (other than contingent indemnification and reimbursement claims in
respect of which no claim for payment has been asserted by the Person entitled
thereto) and (ii) the Maturity Date, the pledge and security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantor. Upon any such termination, the Collateral Agent will, at the
applicable Grantor’s expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination.



          25. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an executed counterpart of
a signature page to this Agreement by facsimile or other electronic means shall be effective as
delivery of an original executed counterpart of this Agreement.




          26. Governing Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York.




          27. Matters Relating to Security.





          27.1. As set forth in the Order, each Grantor hereby agrees that upon the
effectiveness of the Order, (i) the Secured Obligations shall constitute allowed
administrative expenses in such Grantor’s Chapter 11 Case having priority over all
administrative expenses of and unsecured claims against such Grantor now existing or
hereafter arising, of any kind or nature whatsoever, including without limitation
all administrative expenses of the kind specified in Sections 503(b) and 507(b) of
the Bankruptcy Code, subject, as to priority, only to the Carve-Out and (B) the
security interest shall not be subject to Section 551 of the Bankruptcy Code nor
shall the Collateral be charged pursuant to Section 506(c) of the Bankruptcy Code.




          27.2. The security interest and the administrative priority granted by and
pursuant to this Agreement hereof may be independently granted by the Loan Documents
and by other Loan Documents hereafter entered into. This Agreement, the Interim
Order, the Final Order and such other Loan Documents supplement each other, and the
grants, priorities, rights and remedies of Collateral Agent hereunder and thereunder
are cumulative.



 









 






          27.3. The security interest granted hereunder shall be deemed valid, binding,
continuing, enforceable and fully-perfected first priority (subject only to the
Carve-Out and Liens permitted to be equal or superior in priority pursuant to the
Credit Agreement) Liens on the Collateral by entry of the Interim Order and the
Final Order, as the case may be. Collateral Agent shall not be required to file any
financing statements, notices of Lien or similar instruments in any jurisdiction or
filing office or to take any other action in order to validate or perfect the Liens
and security interests granted by or pursuant to this Agreement, the Interim Order,
the Final Order or any other Loan Document.




          27.4. The security interest, the priority of the security interest, and the
administrative priorities and other rights and remedies granted to Collateral Agent
pursuant to this Agreement, the Interim Order, the Final Order and the other
Collateral Documents (specifically including but not limited to the existence,
validity, enforceability, extent, perfection and priority of the Security Interest)
and the administrative priority provided herein and therein shall not be modified,
altered or impaired in any manner by any other financing or extension of credit or
incurrence of debt by any Grantor (pursuant to Section 364 of the Bankruptcy Code or
otherwise), or by any dismissal or conversion of any Bankruptcy Case, or by any
other act or omission whatsoever. Without limitation, notwithstanding any such
order, financing, extension, incurrence, dismissal, conversion, act or omission:




          27.4.1. except for the Carve-Out, no costs or expenses of administration which
have been or may be incurred in the Chapter 11 Case or any conversion of the same or
in any other proceedings related thereto, and no priority claims, are or will be
prior to or on a parity with any claim of Collateral Agent or any Lender against any
Grantor in respect of any Secured Obligation;




          27.4.2. the security interest granted to Collateral Agent pursuant to this
Agreement, the Interim Order, the Final Order and the other Collateral Documents
shall constitute valid, binding, continuing, enforceable and fully-perfected first
priority (subject only to the Carve-Out and Liens permitted to be equal or superior
in priority pursuant to the Credit Agreement) Liens and shall be prior to all other
Liens (except the Carve-Out and Liens permitted to be equal or superior in priority
pursuant to the Credit Agreement) and interests, now existing or hereafter arising,
in favor of any other creditor or any other Person whatsoever; and




          27.4.3. the security interest granted to Collateral Agent pursuant to this
Agreement, the Interim Order, the Final Order and the Collateral Documents shall
continue to be valid, binding, continuing, enforceable and fully-perfected without
the necessity for Collateral Agent to file any financing statements or to otherwise
perfect the security interest under applicable non-bankruptcy law.



 









 





          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.




	 	 	 	 	 
	 	[GRANTOR]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 




 











 





EXHIBIT D-2 TO SENIOR DIP CREDIT AGREEMENT




CANADIAN SECURITY AGREEMENT



Dated December 23, 2009



From



The Grantors referred to herein



as Grantors



to



Cantor Fitzgerald Securities



as Collateral Agent








 









 








TABLE OF CONTENTS




	 	 	 
	SECTION 1.

	 	GRANT OF SECURITY
	 
	 	 
	SECTION 2.

	 	SECURITY FOR OBLIGATIONS AND ATTACHMENT
	 
	 	 
	SECTION 3.

	 	GRANTORS REMAIN LIABLE
	 
	 	 
	SECTION 4.

	 	DELIVERY AND CONTROL OF SECURITY COLLATERAL
	 
	 	 
	SECTION 5.

	 	MAINTAINING THE ACCOUNT COLLATERAL
	 
	 	 
	SECTION 6.

	 	REPRESENTATIONS AND WARRANTIES
	 
	 	 
	SECTION 7.

	 	FURTHER ASSURANCES
	 
	 	 
	SECTION 8.

	 	AS TO EQUIPMENT AND INVENTORY
	 
	 	 
	SECTION 9.

	 	INSURANCE
	 
	 	 
	SECTION 10.

	 	POST-CLOSING CHANGES; COLLECTIONS ON ASSIGNED AGREEMENTS, RECEIVABLES AND RELATED CONTRACTS
	 
	 	 
	SECTION 11.

	 	AS TO INTELLECTUAL PROPERTY COLLATERAL
	 
	 	 
	SECTION 12.

	 	VOTING RIGHTS; DIVIDENDS; ETC
	 
	 	 
	SECTION 13.

	 	AS TO LETTER-OF-CREDIT RIGHTS
	 
	 	 
	SECTION 14.

	 	TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES
	 
	 	 
	SECTION 15.

	 	COLLATERAL AGENT APPOINTED ATTORNEY IN FACT
	 
	 	 
	SECTION 16.

	 	COLLATERAL AGENT MAY PERFORM
	 
	 	 
	SECTION 17.

	 	THE COLLATERAL AGENT’S DUTIES
	 
	 	 
	SECTION 18.

	 	REMEDIES
	 
	 	 
	SECTION 19.

	 	INDEMNITY AND EXPENSES
	 
	 	 
	SECTION 20.

	 	AMENDMENTS; WAIVERS; ADDITIONAL GRANTORS; ETC
	 
	 	 
	SECTION 21.

	 	NOTICES, ETC
	 
	 	 
	SECTION 22.

	 	CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER THE CREDIT AGREEMENT
	 
	 	 
	SECTION 23.

	 	RELEASE; TERMINATION
	 
	 	 
	SECTION 24.

	 	EXECUTION IN COUNTERPARTS
	 
	 	 
	SECTION 25.

	 	GOVERNING LAW
	 
	 	 
	SECTION 26.

	 	MATTERS RELATING TO SECURITY






 









 






	 	 	 	 	 
	Schedules
	 	 	 	 
	 
	 	 	 	 
	Schedule I

	 	-
	 	Investment Property
	Schedule II

	 	-
	 	Pledged Deposit Accounts
	Schedule III

	 	-
	 	Intellectual Property
	Schedule IV

	 	-
	 	Location, Chief Executive Office, Type of Organization, Jurisdiction of
Organization and Organizational Identification Number
	Schedule V

	 	-
	 	Locations of Equipment, Inventory and Other Tangible Personal Property
	Schedule VI

	 	-
	 	Letters of Credit
	 
	 	 	 	 
	Exhibits
	 	 	 	 
	 
	 	 	 	 
	Exhibit A

	 	-
	 	Form of Intellectual Property Security Agreement
	Exhibit B

	 	-
	 	Form of Intellectual Property Security Agreement Supplement
	Exhibit C

	 	-
	 	Form of Security Agreement Supplement











 









 








CANADIAN SECURITY AGREEMENT




          CANADIAN SECURITY AGREEMENT dated December 23, 2009 made by TLC VISION CORPORATION, a New
Brunswick corporation, as a debtor and a debtor in possession (the “Parent”), and the other Persons
listed on the signature pages hereof (the Parent and the Persons so listed being, collectively, the
“Grantors”), to CANTOR FITZGERALD SECURITIES, as collateral Agent (in such capacity, together with
any successor collateral agent appointed pursuant to Article VII of the Credit Agreement (as
hereinafter defined), the “Collateral Agent”) for the Secured Parties (as defined in the Credit
Agreement).




          WHEREAS, TLC Vision (USA) Corporation, as a debtor and a debtor in possession (“Holdco”), and
TLC Management Services Inc., as a debtor and a debtor in possession (“TLC Management”) and the
Parent (the Parent together with Holdco and TLC Management being referred to herein as the
“Borrowers”), have entered into a Senior Secured Super Priority Debtor in Possession Credit
Agreement dated as of the date hereof (said Agreement, as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, being the “Credit Agreement”) with
the Lenders party thereto and Cantor Fitzgerald Securities, as administrative agent for such
Lenders and collateral Agent for the Secured Parties;




          WHEREAS, on December 21, 2009 (the “Petition Date”), the Borrowers filed a petition under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware;




          WHEREAS, subsequent to the Petition Date, the Parent filed a petition under Part IV of the
Companies’ Creditors Arrangements Act (Canada), as ancillary relief sought in the Ontario Superior
Court of Justice (Commercial List);




          WHEREAS, the Borrowers intend to continue to operate their business pursuant to Sections 1107
and 1108 of the Bankruptcy Code;




          WHEREAS, the Borrowers have requested that the Lenders provide financing to the Borrowers
consisting of a senior super priority term loan facility in an amount up to $15,000,000 (the
“Facility”) pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, the Lenders have indicated their willingness to agree to extend the Facility to the
Borrowers, all on terms and conditions set forth in the Credit Agreement and in the Order pursuant
to Sections 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, each Grantor is the owner of the shares of stock or other Equity Interests (the
“Initial Pledged Equity”) set forth opposite such Grantor’s name on and as otherwise described in
Part I of Schedule I hereto and issued by the Persons named therein and of the indebtedness
(the “Initial Pledged Debt”) set forth opposite such Grantor’s name on and as otherwise described
in Part II of Schedule I hereto and issued by the obligors named therein.




          WHEREAS, each Grantor is the owner of the deposit accounts (the “Pledged Deposit Accounts”)
set forth opposite such Grantor’s name on Schedule II hereto.







 









 








          WHEREAS, it is a condition precedent to the making of the term loans otherwise extending
credit to the Borrowers under the Credit Agreement that the Grantors shall have granted the
security interest contemplated by this Agreement.




          WHEREAS, terms defined in the Credit Agreement and not otherwise defined in this Agreement are
used in this Agreement as defined in the Credit Agreement. Further, unless otherwise defined in
this Agreement or in the Credit Agreement, terms defined in Article 8 or 9 of the UCC (as defined
below) are used in this Agreement as such terms are defined in such Article 8 or 9.




          NOW, THEREFORE, for and in consideration of the foregoing, each Grantor hereby agrees with the
Collateral Agent for the ratable benefit of the Secured Parties as follows:




          1. Grant of Security.




          Each Grantor hereby grants to the Collateral Agent, for the ratable benefit of the Secured
Parties, a security interest in, and assigns, mortgages, charges, hypothecates and pledges to the
Collateral Agent for the ratable benefit of the Secured Parties, such Grantor’s right, title and
interest in and to the following, in each case, as to each type of property described below,
whether now owned or hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the “Collateral”):




          (a) all equipment in all of its forms, including, without limitation, all machinery, tools,
motor vehicles, vessels, furniture and fixtures, and all parts thereof and all accessions thereto,
including, without limitation, computer programs and supporting information that constitute
equipment within the meaning of the PPSA (as such term is defined in the Credit Agreement) (the
“PPSA”) and the UCC (any and all such property being the “Equipment”);




          (b) all inventory in all of its forms, including, without limitation, (i) all raw materials,
work in process, finished goods and materials used or consumed in the manufacture, production,
preparation or shipping thereof, (ii) goods in which such Grantor has an interest in mass or a
joint or other interest or right of any kind (including, without limitation, goods in which such
Grantor has an interest or right as consignee) and (iii) goods that are returned to or repossessed
or stopped in transit by such Grantor), and all accessions thereto and products thereof and
documents therefor, including, without limitation, computer programs and supporting information
that constitute inventory within the meaning of the UCC and the PPSA (any and all such property
being the “Inventory”);




          (c) all accounts (including, without limitation, health-care-insurance receivables), chattel
paper (including, without limitation, tangible chattel paper and electronic chattel paper),
instruments (including, without limitation, promissory notes), deposit accounts, letter-of-credit
rights, general intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services and whether or not earned by performance, and all rights now or
hereafter existing in and to all supporting obligations and in and to all security agreements,
mortgages, Liens, leases, letters of credit and other contracts securing or otherwise relating to
the foregoing property (any and all of such accounts, chattel paper, instruments,






 









 







deposit accounts, letter-of-credit rights, general intangibles and other obligations, to the
extent not referred to in clause (d), (e) or (f) below, being the “Receivables,” and any and all
such supporting obligations, security agreements, mortgages, Liens, leases, letters of credit and
other contracts being the “Related Contracts”);




          (d) the following (the “Security Collateral”):





          (i) the Initial Pledged Equity and the certificates, if any, representing the Initial
Pledged Equity, and all dividends, distributions, return of capital, cash, instruments and
other property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of the Initial Pledged Equity and all warrants, rights or
options issued thereon or with respect thereto;




          (ii) the Initial Pledged Debt and the instruments, if any, evidencing the Initial
Pledged Debt, and all interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of
the Initial Pledged Debt;




          (iii) all additional shares of stock and other Equity Interests from time to time
acquired by such Grantor in any manner (such shares and other Equity Interests, together
with the Initial Pledged Equity, being the “Pledged Equity”), and the certificates, if any,
representing such additional shares or other Equity Interests, and all dividends,
distributions, return of capital, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for any or all of
such shares or other Equity Interests and all warrants, rights or options issued thereon or
with respect thereto;




          (iv) all additional indebtedness from time to time owed to such Grantor (such
indebtedness, together with the Initial Pledged Debt, being the “Pledged Debt”) and the
instruments, if any, evidencing such indebtedness, and all interest, cash, instruments and
other property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such indebtedness;




          (v) all financial assets, and all dividends, distributions, return of capital,
interest, cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such security
entitlements or financial assets and all warrants, rights or options issued thereon or with
respect thereto; and




          (vi) all security entitlements with respect to all financial assets from time to time
credited to any and all securities accounts owned by any Grantor, and all other investment
property (including, without limitation, all (A) securities, whether certificated or
uncertificated, (B) security entitlements, (C) securities accounts, (D) commodity contracts
and (E) commodity accounts) in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the certificates or instruments,
if any, representing or evidencing such investment property, and all dividends,
distributions, return of capital, interest, cash, instruments and other



 









 







property from time to time received, receivable or otherwise distributed in respect of
or in exchange for any or all of such investment property and all warrants, rights or
options issued thereon or with respect thereto;



          (e) each of the agreements to which such Grantor is now or may hereafter become a party, in
each case as such agreements may be amended, amended and restated, supplemented or otherwise
modified from time to time (collectively, the “Assigned Agreements”), including, without
limitation, (i) all rights of such Grantor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii) claims of
such Grantor for damages arising out of or for breach of or default under the Assigned Agreements
and (iv) the right of such Grantor to terminate the Assigned Agreements, to perform thereunder and
to compel performance and otherwise exercise all remedies thereunder (all such Collateral being the
“Agreement Collateral”);




          (f) the following (collectively, the “Account Collateral”):





          (i) the Pledged Deposit Accounts and all funds and financial assets from time to time
credited thereto (including, without limitation, all Cash Equivalents), and all certificates
and instruments, if any, from time to time representing or evidencing the Pledged Deposit
Accounts;




          (ii) all promissory notes, certificates of deposit, checks and other instruments from
time to time delivered to or otherwise possessed by the Collateral Agent for or on behalf of
such Grantor in substitution for or in addition to any or all of the then existing Account
Collateral; and




          (iii) all interest, dividends, distributions, cash, instruments and other property from
time to time received, receivable or otherwise distributed in respect of or in exchange for
any or all of the then existing Account Collateral; and



          (g) the following (collectively, the “Intellectual Property Collateral”):





          (i) all patents, patent applications, utility models and statutory invention
registrations, all inventions claimed or disclosed therein and all improvements thereto
(“Patents”);




          (ii) all trademarks, service marks, domain names, trade dress, logos, designs, slogans,
trade names, business names, corporate names and other source identifiers, whether
registered or unregistered, together, in each case, with the goodwill symbolized thereby
(“Trademarks”);




          (iii) all copyrights, including, without limitation, copyrights in Computer Software
(as hereinafter defined), internet web sites and the content thereof, whether registered or
unregistered (“Copyrights”);



 









 






          (iv) all computer software, programs and databases (including, without limitation,
source code, object code and all related applications and data files), firmware
and documentation and materials relating thereto, together with any and all maintenance
rights, service rights, programming rights, hosting rights, test rights, improvement rights,
renewal rights and indemnification rights and any substitutions, replacements, improvements,
error corrections, updates and new versions of any of the foregoing (“Computer Software”);




          (v) all confidential and proprietary information, including, without limitation,
know-how, industrial designs, integrated circuit topographics, trade secrets, manufacturing
and production processes and techniques, inventions, research and development information,
databases and data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and customer and
supplier lists and information (collectively, “Trade Secrets”), and all other intellectual,
industrial and intangible property of any type, including, without limitation, industrial
designs and mask works;




          (vi) all registrations and applications for registration for any of the foregoing,
including, without limitation, those registrations and applications for registration set
forth in Schedule III hereto, together with all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations thereof;




          (vii) all tangible embodiments of the foregoing, all rights in the foregoing provided
by international treaties or conventions, all rights corresponding thereto throughout the
world and all other rights of any kind whatsoever of such Grantor accruing thereunder or
pertaining thereto;




          (viii) all agreements, permits, consents, orders and franchises relating to the
license, development, use or disclosure of any of the foregoing to which such Grantor, now
or hereafter, is a party or a beneficiary, including, without limitation, the agreements set
forth in Schedule III hereto (“IP Agreements”); and




          (ix) any and all claims for damages and injunctive relief for past, present and future
infringement, dilution, misappropriation, violation, misuse or breach with respect to any of
the foregoing, with the right, but not the obligation, to sue for and collect, or otherwise
recover, such damages;



          (h) all books and records (including, without limitation, customer lists, credit files,
printouts and other computer output materials and records) of such Grantor pertaining to any of the
Collateral;




          (i) all avoidance power claims or actions under section 549 of the Bankruptcy Code relating to
postpetition transfers of Collateral and proceeds thereof, and subject to the entry of the Final
Order, all avoidance power claims or actions under chapter 5 of the Bankruptcy Code and any
proceeds thereof; and




 









 








          (j) all proceeds of, collateral for, income, royalties and other payments now or hereafter due
and payable with respect to, and supporting obligations relating to, any and all of the Collateral
(including, without limitation, proceeds, proceeds of proceeds, collateral and supporting
obligations that constitute property of the types described in clauses (a) through (i) of
this Section 1) and, to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee thereof), or any indemnity,
warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of
the foregoing Collateral, and (B) cash.




          Notwithstanding anything herein to the contrary, in no event shall the Collateral include, and
no Grantor shall be deemed to have granted a security interest in, (a) any consumer goods or shares
in any unlimited company or unlimited liability corporation at any time owned or otherwise held by
such Grantor; (b) any Intellectual Property Collateral, if the grant of such security interest
shall constitute or result in the abandonment, invalidation or rendering unenforceable any right,
title or interest of such Grantor therein; (c) in any license, contract or agreement to which such
Grantor is a party or any of its rights or interests thereunder, including, without limitation,
with respect to any pledged partnership interests or any pledged limited liability company
interests, to the extent, but only to the extent, that such a grant would, under the terms of such
license, contract or agreement (including, without limitation, any partnership agreements or any
limited liability company agreements), or otherwise, be prohibited by or result in a breach or
termination of the terms of, or constitute a default under or termination of any such license,
contract or agreement (other than to the extent that any such term would be rendered ineffective
pursuant to Section 9-406 of the UCC (or any successor provision) or PPSA of any relevant
jurisdiction or any other applicable law (including the Bankruptcy Code) or principles of equity)
or would otherwise constitute a violation of law, regulation or policy; provided, however, that
immediately upon the ineffectiveness, lapse or termination of any such provision, the Collateral
shall include, and each Grantor shall be deemed to have granted a security interest in, all such
rights and interests as if such provision had never been in effect; (d) any of the outstanding
capital stock of a “controlled foreign corporation” as defined in the Internal Revenue Code of
1986, as amended from time to time (each, a “Controlled Foreign Corporation”), in excess of 65% of
the voting power of all classes of capital stock of such controlled foreign corporation entitled to
vote to the extent such security interest would result in a material adverse tax event under the
United States tax laws; or (e) all equipment and other property to the extent, but only to the
extent, that such a grant would, under the terms of any contract or agreement to which such Grantor
is a party in connection with certain industrial revenue obligations, be prohibited by or would
otherwise result in a breach or termination of the terms of, or constitute a default under or
termination of any such contract or agreement or would otherwise constitute a violation of law,
regulation or policy; provided, however, that immediately upon the ineffectiveness, lapse or
termination of any such provision precluding the grant of security interest on such property, the
Collateral shall include, and each Grantor shall be deemed to have granted a security interest in,
all such rights and interests as if such provision had never been in effect; or (f) property owned
by any Grantor that is subject to a purchase money Lien or a Capitalized Lease to the extent such
purchase money Lien or Capitalized Lease is permitted under the Credit Agreement if the contract or
other agreement in which such Lien is granted (or if the documentation providing for such purchase
money Lien or Capitalized Lease prohibits or requires the consent of any Person other than the
Borrowers and their Affiliates as a condition to




 









 







the creation of any other Lien on such property);
provided, that the respective Grantor uses commercially reasonable efforts to permit the Collateral
Agent to obtain a Lien on such property subject to the prior Lien under such purchase money Lien or
Capitalized Lease, as the case may be.




          2. Security for Obligations and Attachment.




          This Agreement secures, in the case of each Grantor, the payment of all Obligations of such
Grantor now or hereafter existing under the Loan Documents, whether direct or indirect, absolute or
contingent, and whether for principal, reimbursement obligations, interest, fees, premiums,
penalties, indemnifications, contract causes of action, costs, expenses or otherwise (all such
Obligations being the “Secured Obligations”). Without limiting the generality of the foregoing,
this Agreement secures, as to each Grantor, the payment of all amounts that constitute part of the
Secured Obligations and would be owed by such Grantor to any Secured Party under the Loan Documents
but for the fact that they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving a Loan Party. Each Grantor acknowledges that (a)
value has been given, (b) it has rights in the Collateral of such Grantor or the power to transfer
rights in the Collateral of such Grantor to the Collateral Agent (other than after-acquired
Collateral), (c) it has not agreed to postpone the time of attachment of any of the security
interests created under this Agreement, and (d) it has received a copy of this Agreement.




          3. Grantors Remain Liable.




          Anything herein to the contrary notwithstanding, (a) each Grantor shall remain liable under
the contracts and agreements included in such Grantor’s Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by the Collateral Agent of any of the rights hereunder shall
not release any Grantor from any of its duties or obligations under the contracts and agreements
included in the Collateral and (c) no Secured Party shall have any obligation or liability under
the contracts and agreements included in the Collateral by reason of this Agreement or any other
Loan Document, nor shall any Secured Party be obligated to perform any of the obligations or duties
of any Grantor thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.




          4. Delivery and Control of Security Collateral.




          (a) All certificates or instruments representing or evidencing Security Collateral shall be
delivered to and held by or on behalf of the Collateral Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the Collateral Agent.
The Collateral Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing Security Collateral for certificates or instruments of smaller or larger
denominations.




          (b) With respect to any Security Collateral that constitutes an uncertificated security, the
relevant Grantor will cause the issuer thereof, at the reasonable request of the





 









 







Collateral Agent,
either (i) to register the Collateral Agent as the registered owner of such security or (ii) to
agree with such Grantor and the Collateral Agent that such issuer will comply with instructions
with respect to such security originated by the Collateral Agent without further consent of such
Grantor, such agreement to be in form and substance satisfactory to the Collateral Agent (such
agreement being an “Uncertificated Security Control Agreement”).




          (c) With respect to any Security Collateral that constitutes a security entitlement as to
which the financial institution acting as Collateral Agent hereunder is not the securities
intermediary, the relevant Grantor, at the reasonable request of the Collateral Agent, will cause
the securities intermediary with respect to such Account or security entitlement either (i) to
identify in its records the Collateral Agent as the entitlement holder thereof or (ii) to agree
with such Grantor and the Collateral Agent that such securities intermediary will comply with
entitlement orders originated by the Collateral Agent without further consent of such Grantor, such
agreement to be in form and substance satisfactory to the Collateral Agent (a “Securities Account
Control Agreement”).




          (d) The Collateral Agent shall have the right, at any time in its discretion and without
notice to any Grantor, to transfer to or to register in the name of the Collateral Agent or any of
its nominees any or all of the Security Collateral, subject only to the revocable rights specified
in Section 12(a).




          (e) Upon the reasonable request of the Collateral Agent, each Grantor will notify each issuer
of Security Collateral granted by it hereunder that such Security Collateral is subject to the
security interest granted hereunder.




          5. Maintaining the Account Collateral.




          So long as any Loan or any other Obligation (other than contingent indemnification and
reimbursement claims in respect of which no claim for payment has been asserted by the Person
entitled thereto) of any Loan Party under any Loan Document shall remain unpaid, or any Lender
shall have any Commitment, each Grantor will maintain deposit accounts as provided under the Credit
Agreement.




          6. Representations and Warranties.




          Each Grantor represents and warrants as follows:




          (a) Such Grantor’s exact legal name, location, chief executive office, type of organization,
jurisdiction of organization and organizational identification number, as of the date hereof, as of
the date hereof, is set forth in Schedule IV hereto.




          (b) Such Grantor is the legal and beneficial owner of the Collateral granted or purported to
be granted by it free and clear of any Lien, claim, option or right of others, except for the
security interest created under this Agreement or permitted under the Credit Agreement. No
effective financing statement or other instrument similar in effect covering all or any part of
such Collateral or listing such Grantor or any trade name of such Grantor as debtor is on file in




 









 







any recording office, except such as may have been filed in favor of the Collateral Agent relating
to the Loan Documents or as otherwise permitted under the Credit Agreement.




          (c) All of the Equipment and Inventory of such Grantor are located at the places specified
therefor in Schedule V hereto or at another location as to which such Grantor has complied
with the requirements of Section 8(a) except for mobile laser equipment, Equipment being
repaired and Equipment otherwise maintained at other locations in the ordinary course of business.
Such Grantor has exclusive possession and control of its Equipment and
Inventory, other than (i) Equipment being repaired, and (ii) Inventory stored at any leased
premises or warehouse for which a landlord’s or warehouseman’s agreement, in form and substance
satisfactory to the Collateral Agent, is in effect.




          (d) None of the Receivables or Agreement Collateral is evidenced by a promissory note or other
instrument that has not been delivered to the Collateral Agent.




          (e) If such Grantor is an issuer of Security Collateral, such Grantor confirms that it has
received notice of the security interest granted hereunder.




          (f) The Pledged Equity pledged by such Grantor hereunder has been duly authorized and validly
issued, in the case of any entity, the equity of which is Pledged Equity that is a corporation, and
is fully paid and non assessable. The Pledged Debt pledged by such Grantor hereunder has been duly
authorized, authenticated or issued and delivered, is the legal, valid and binding obligation of
the issuers thereof, is evidenced by one or more promissory notes (which promissory notes have been
delivered to the Collateral Agent) and, to the knowledge of such Grantor is not in default.




          (g) The Initial Pledged Equity pledged by such Grantor constitutes the percentage of the
issued and outstanding Equity Interests of the issuers thereof indicated on Schedule I
hereto. The Initial Pledged Debt constitutes all of the outstanding indebtedness owed to such
Grantor by the issuers thereof and, to the extent evidenced by an instrument and in a principal
amount in excess of $150,000, as indicated on Schedule I hereto.




          (h) Such Grantor has no investment property other than the investment property listed on
Schedule I hereto and additional investment property as to which such Grantor has complied
with the requirements of Section 4.




          (i) Such Grantor has no deposit accounts constituting Collateral, other than the Pledged
Deposit Accounts listed on Schedule II hereto and additional Pledged Deposit Accounts as to
which such Grantor has complied with the applicable requirements of Section 5.




          (j) Such Grantor is not a beneficiary or assignee under any letter of credit, other than the
letters of credit described in Schedule VI hereto and additional letters of credit as to
which such Grantor has complied with the requirements of Section 13.




          (k) This Agreement creates in favor of the Collateral Agent for the benefit of the Secured
Parties a valid and continuing first priority security interest in the Collateral granted by such
Grantor, upon entry of the Order (subject only to the Carve Out and the Liens permitted




 









 







to be equal
or superior in priority pursuant to the Credit Agreement), securing the payment of the Secured
Obligations; all filings and other actions (including, without limitation, actions necessary to
obtain control of Collateral as provided in the Securities Transfer Act (and other provincial
equivalents) but excluding actions necessary to perfect the Collateral Agent’s security interest
with respect to Collateral evidenced by a certificate of title) necessary to perfect the security
interest in the Collateral granted by such Grantor have been duly made or taken and are in full
force and effect with respect to Collateral in which a security interest can be perfected by the
filing of a Uniform Commercial Code financing statement, the filing or recordation with the Patent
and Trademark Office or the obtaining of control as provided in the Securities Transfer
Act (and other provincial equivalents), except as otherwise permitted hereunder; and such
security interest is first priority (subject to the Carve Out and Liens permitted to be equal or
superior in priority pursuant to the Credit Agreement).




          (l) No authorization or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or any other third party is required for (i) the grant by
such Grantor of the security interest granted hereunder or for the execution, delivery or
performance of this Agreement by such Grantor, (ii) the perfection or maintenance of the security
interest created hereunder (including the first priority nature of such security interest subject
to Liens permitted to be equal or superior in priority pursuant to the Credit Agreement), except
for the filing of financing and continuation statements under the UCC or PPSA, the recordation of
the Intellectual Property Security Agreements referred to in Section 11(f) with the
Canadian Intellectual Property Office, which Agreements will be duly recorded and are in full force
and effect, and the actions described in Section 4 with respect to the Security Collateral,
which actions have been taken and are in full force and effect, except with respect to Collateral
evidenced by a certificate of title or (iii) the exercise by the Collateral Agent of its voting or
other rights provided for in this Agreement or the remedies in respect of the Collateral pursuant
to this Agreement, except as may be required in connection with the disposition of any portion of
the Security Collateral by laws affecting the offering and sale of securities generally.




          (m) [Intentionally omitted.]




          (n) As to itself and its Intellectual Property Collateral:





          (i) The operation of such Grantor’s business as currently conducted or as now
contemplated to be conducted and the use of the Intellectual Property Collateral in
connection therewith do not, to such Grantor’s knowledge, conflict with, infringe,
misappropriate, dilute, misuse or otherwise violate the intellectual property rights of any
third party.




          (ii) Such Grantor is the exclusive owner or licensed owner of all right, title and
interest in and to the Intellectual Property Collateral, and is entitled to use all
Intellectual Property Collateral subject only to the terms of the IP Agreements.




          (iii) The Intellectual Property Collateral set forth on Schedule III hereto
includes all of the issued patents, patent applications, domain names, trademark
registrations and applications, and copyright registrations and applications owned by such



 









 







Grantor and all IP Agreements to which such Grantor is a party or beneficiary as of the date
hereof.




          (iv) The Intellectual Property Collateral material to the business of the Grantors is
subsisting and has not been adjudged invalid or unenforceable in whole or part, and to the
best of such Grantor’s knowledge, is valid and enforceable. Such Grantor is not aware of
any uses of any item of Intellectual Property Collateral that could be expected to lead to
such item becoming invalid or unenforceable.




          (v) As to each item of Intellectual Property Collateral material to the business of the
Grantors, taken as a whole, such Grantor has made or performed all
filings, recordings and other acts and has paid all required fees and taxes to maintain
and protect its interest in each such item of Intellectual Property Collateral in full force
and effect, including, without limitation, recordations of any of its interests in the
Patents and Trademarks with the Canadian Intellectual Property Office, and in corresponding
national and international patent offices, and recordation of any of its interests in the
Copyrights with the Canadian Intellectual Property Office and in corresponding national and
international copyright offices. Such Grantor has used proper statutory notice in
connection with its use of each patent, trademark and copyright in the Intellectual Property
Collateral material to the business of the Grantors taken as a whole.




          (vi) No claim, action, suit, investigation, litigation or proceeding has been asserted
or is pending or, to such Grantor’s knowledge, threatened against such Grantor (A) based
upon or challenging or seeking to deny or restrict the Grantor’s rights in or use of any of
the Intellectual Property Collateral material to the business of the Grantors, (B) to such
Grantor’s knowledge, alleging that the Grantor’s rights in or use of the Intellectual
Property Collateral or that any services provided by, processes used by, or products
manufactured or sold by, such Grantor infringe, misappropriate, dilute, misuse or otherwise
violate any patent, trademark, copyright or any other proprietary right of any third party,
or (C) alleging that the Intellectual Property Collateral is being licensed or sublicensed
in violation or contravention of the terms of any license or other agreement. To such
Grantor’s knowledge, no Person is engaging in any activity that infringes, misappropriates,
dilutes, misuses or otherwise violates the Intellectual Property Collateral or the Grantor’s
rights in or use thereof. Except as set forth on Schedule III hereto such Grantor
has not granted any license, release, covenant not to sue, non-assertion assurance, or other
right to any Person with respect to any part of the Intellectual Property Collateral. The
consummation of the transactions contemplated by the Loan Documents will not result in the
termination or impairment of any of the Intellectual Property Collateral.




          (vii) With respect to each IP Agreement, to such Grantor’s knowledge: (A) such IP
Agreement is valid and binding and in full force and effect and represents the entire
agreement between the respective parties thereto with respect to the subject matter thereof;
(B) such IP Agreement will not cease to be valid and binding and in full force and effect on
terms identical to those currently in effect as a result of the rights and interest granted
herein, nor will the grant of such rights and interest constitute a breach or



 









 







default under
such IP Agreement or otherwise give any party thereto a right to terminate such IP
Agreement; (C) such Grantor has not received any notice of termination or cancellation under
such IP Agreement; (D) such Grantor has not received any notice of a breach or default under
such IP Agreement, which breach or default has not been cured; (E) such Grantor has not
granted to any other third party any rights, adverse or otherwise, under such IP Agreement;
and (F) neither such Grantor nor, to the knowledge of such Grantor, any other party to such
IP Agreement is in breach or default thereof in any material respect, and no event has
occurred that, with notice or lapse of time or both, would constitute such a breach or
default or permit termination, modification or acceleration under such IP Agreement.




          (viii) To the best of such Grantor’s knowledge, (A) none of the Trade Secrets of such
Grantor has been used, divulged, disclosed or appropriated to the detriment of such Grantor
for the benefit of any other Person other than such Grantor; (B) no employee, independent
contractor or agent of such Grantor has misappropriated any trade secrets of any other
Person in the course of the performance of his or her duties as an employee, independent
contractor or agent of such Grantor; and (C) no employee, independent contractor or agent of
such Grantor is in default or material breach of any term of any employment agreement,
non-disclosure agreement, assignment of inventions agreement or similar agreement or
contract relating in any way to the protection, ownership, development, use or transfer of
such Grantor’s Intellectual Property Collateral.




          (ix) No Grantor or Intellectual Property Collateral is subject to any outstanding
consent, settlement, decree, order, injunction, judgment or ruling restricting the use of
any Intellectual Property Collateral that is material to the business of the Grantors, taken
as a whole, or that would impair the validity or enforceability of such material
Intellectual Property Collateral.



          7. Further Assurances.




          (a) Each Grantor agrees that from time to time, at the expense of such Grantor, such Grantor
will promptly execute and deliver, or otherwise authenticate, all further instruments and
documents, and take all further action that may be necessary or desirable, or that the Collateral
Agent may reasonably request, in order to perfect and protect any pledge or security interest
granted or purported to be granted by such Grantor hereunder or by the Orders or to enable the
Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any
Collateral of such Grantor. Without limiting the generality of the foregoing, each Grantor will
promptly with respect to Collateral of such Grantor: (i) if any such Collateral shall be evidenced
by a promissory note or other instrument or chattel paper, deliver and pledge to the Collateral
Agent hereunder such note or instrument or chattel paper duly indorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance satisfactory to the
Collateral Agent; (ii) file such financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable, or as the Collateral Agent may
reasonably request, in order to perfect and preserve the security interest granted or purported to
be granted by such Grantor hereunder; (iii) at the reasonable



 









 






request of the Collateral Agent, take
all action to ensure that the Collateral Agent’s security interest is noted on any certificate of
title related to any Collateral evidenced by a certificate of title; and (iv) deliver to the
Collateral Agent evidence that all other actions that the Collateral Agent may deem reasonably
necessary or desirable in order to perfect and protect the security interest granted or purported
to be granted by such Grantor under this Agreement has been taken.




          (b) Each Grantor hereby authorizes the Collateral Agent to file one or more financing or
continuation statements, and amendments thereto, including, without limitation, one or more
financing statements indicating that such financing statements cover all assets or all personal
property (or words of similar effect) of such Grantor, regardless of whether any particular asset
described in such financing statements falls within the scope of the UCC or PPSA or the granting
clause of this Agreement. A photocopy or other reproduction of this
Agreement shall be sufficient as a financing statement where permitted by law. Each Grantor
ratifies its authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.




          (c) Each Grantor will furnish to the Collateral Agent from time to time statements and
schedules further identifying and describing the Collateral of such Grantor and such other reports
in connection with such Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.




          8. As to Equipment and Inventory.




          (a) Each Grantor will keep its Equipment, Inventory and other tangible personal property
(other than Inventory sold in accordance with the terms of the Credit Agreement and except for
mobile laser equipment and Equipment being repaired in the ordinary course of business) at the
places therefor specified in Section 6(c) or, upon 30 days’ prior written notice to the
Collateral Agent, at such other places designated by such Grantor in such notice, except as
provided in Section 6(c).




          (b) Each Grantor will cause its Equipment to be maintained and preserved in the same
condition, repair and working order as when new, ordinary wear and tear excepted, and will
forthwith, or in the case of any loss or damage to any of such Equipment as soon as practicable
after the occurrence thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such end. Each Grantor
will promptly furnish to the Collateral Agent a statement respecting any loss or damage exceeding
$10,000 per occurrence to any of its Equipment or Inventory.




          9. Insurance.




          (a) Each Grantor will, at its own expense, maintain insurance with respect to its Equipment
and Inventory in such amounts, against such risks, in such form and with such insurers, as shall be
satisfactory to the Collateral Agent from time to time. Each policy of each Grantor for liability
insurance shall provide for all losses to be paid on behalf of the Collateral Agent and such
Grantor as their interests may appear, and each policy for property damage insurance shall provide
for all losses to be paid directly to the Collateral Agent. Each such policy shall in addition (i)
name such Grantor and the Collateral Agent as insured parties




 









 







thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as their interests may
appear, (ii) contain the agreement by the insurer that any loss thereunder shall be payable to the
Collateral Agent, upon its reasonable request, notwithstanding any action, inaction or breach of
representation or warranty by such Grantor, (iii) provide that there shall be no recourse against
the Collateral Agent for payment of premiums or other amounts with respect thereto and (iv) provide
that at least 10 days’ prior written notice of cancellation or of lapse shall be given to the
Collateral Agent by the insurer. Each Grantor will, if so reasonably requested by the Collateral
Agent, deliver to the Collateral Agent original or duplicate policies of such insurance and, as
often as the Collateral Agent may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, each Grantor will, at the reasonable request of the Collateral
Agent, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of Section 8 and cause the insurers
to acknowledge notice of such assignment.




          (b) Reimbursement under any liability insurance maintained by any Grantor pursuant to this
Section 9 may be paid directly to the Person who shall have incurred liability covered by
such insurance.




          10. Post-Closing Changes; Collections on Assigned Agreements, Receivables and Related
Contracts. (a) No Grantor will change its name, type of organization, jurisdiction of
organization, organizational identification number or location from those set forth in Section 6(a)
of this Agreement without first giving at least 30 days’ prior written notice to the Collateral
Agent and taking all action required by the Collateral Agent for the purpose of perfecting or
protecting the security interest granted by this Agreement. Each Grantor will hold and preserve
its records relating to the Collateral, including, without limitation, the Assigned Agreements and
Related Contracts, and will permit representatives of the Collateral Agent at any time during
normal business hours to inspect and make abstracts from such records and other documents. If any
Grantor does not have an organizational identification number and later obtains one, it will
forthwith notify the Collateral Agent of such organizational identification number.




          (b) Except as otherwise provided in this subsection (b), each Grantor will continue to
collect, at its own expense, all amounts due or to become due such Grantor under the Assigned
Agreements, Receivables and Related Contracts. In connection with such collections, such Grantor
may take such action as such Grantor or the Collateral Agent may deem necessary or advisable to
enforce collection of the Assigned Agreements and otherwise exercise all of its rights under the
Assigned Agreements as it deems appropriate, Receivables and Related Contracts; provided, however,
that the Collateral Agent shall have the right at any time, upon the occurrence and during the
continuance of an Event of Default and upon written notice to such grantor of its intention to do
so, to notify the Obligors under any Assigned Agreements, Receivables and Related Contracts of the
assignment of such Assigned Agreements, Receivables and Related Contracts to the Collateral Agent
and to direct such Obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Collateral Agent and, upon such notification and at the expense of such
Grantor, to enforce collection of any such Assigned Agreements, Receivables and Related Contracts,
to adjust, settle or compromise the amount or payment thereof, in the same manner and to the same
extent as such Grantor might have done, and to otherwise exercise all rights with respect to such
Assigned Agreements,




 









 







Receivables and Related Contracts, including, without limitation, those set
forth set forth in Section 9-607 of the UCC or in the PPSA. After receipt by any Grantor of the
notice from the Collateral Agent referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including, without limitation, instruments) received by such Grantor in
respect of the Assigned Agreements, Receivables and Related Contracts of such Grantor shall be
received in trust for the benefit of the Collateral Agent hereunder, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent in the same form as
so received (with any necessary endorsement) and either (A) released to such Grantor so long as no
Event of Default shall have occurred and be continuing or (B) if any Event of Default shall have
occurred and be continuing, applied as provided in Section 18(b) and (ii) such Grantor will
not adjust, settle or compromise the amount or payment of any Receivable or amount due on any
Assigned Agreement or Related Contract, release wholly or partly any Obligor thereof or allow
any credit or discount thereon. Except for the Carve Out, no Grantor will permit or consent
to the subordination of its right to payment under any of the Assigned Agreements, Receivables and
Related Contracts to any other indebtedness or obligations of the Obligor thereof.




          11. As to Intellectual Property Collateral.




          (a) With respect to each item of its Intellectual Property Collateral material to the business
of the Grantors, each Grantor agrees to take, at its expense, all reasonable steps, and shall not
knowingly omit to do any act, including, without limitation, in the Canadian Intellectual Property
Office and any other relevant governmental authority, to (i) maintain the validity and
enforceability of such Intellectual Property Collateral and maintain such Intellectual Property
Collateral in full force and effect, and (ii) pursue the registration and maintenance of each
patent, trademark, or copyright registration or application, now or hereafter included in such
Intellectual Property Collateral of such Grantor, including, without limitation, the payment of
required fees and taxes, the filing of responses to office actions issued by the Canadian
Intellectual Property Office or other governmental authorities, the filing of applications for
renewal or extension, continuation, continuation-in-part, reissue and renewal applications or
extensions, the payment of maintenance fees and the participation in interference, reexamination,
opposition, cancellation, infringement and misappropriation proceedings. No Grantor shall, without
the written consent of the Collateral Agent, discontinue use of or otherwise abandon any
Intellectual Property Collateral material to the business of the Grantors, taken as a whole, or
abandon any right to file an application for patent, trademark, or copyright, unless such Grantor
shall have previously determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of such Grantor’s business and that the
loss thereof would not be reasonably likely to have a Material Adverse Effect.




          (b) Each Grantor agrees promptly to notify the Collateral Agent if such Grantor becomes aware
(i) that any item of the Intellectual Property Collateral material to the business of the Grantors,
taken as a whole, may have become abandoned, placed in the public domain, invalid or unenforceable,
or of any adverse determination or development regarding such Grantor’s ownership or use of any
such Intellectual Property Collateral or its right to register the same or to keep and maintain and
enforce the same, or (ii) of any adverse determination or the institution
of any proceeding
(including, without limitation, the institution



 









 







of any proceeding in the Canadian Intellectual
Property Office or any court) regarding any item of the Intellectual Property Collateral material
to the business of the Grantors.




          (c) In the event that any Grantor becomes aware that any item of the Intellectual Property
Collateral material to the business of the Grantors, taken as a whole, is being infringed or
misappropriated by a third party, such Grantor shall promptly notify the Collateral Agent and shall
take all reasonable actions, at its expense, to protect or enforce such Intellectual Property
Collateral, including, without limitation, suing for infringement or misappropriation and for an
injunction against such infringement or misappropriation.




          (d) Each Grantor shall use proper statutory notice in connection with its use of each item of
material Intellectual Property Collateral.




          (e) Each Grantor shall take all steps which it or the Collateral Agent deems reasonable and
appropriate under the circumstances to preserve and protect each item of its Intellectual Property
Collateral material to the business of the Grantors, taken as a whole, including, without
limitation, maintaining the quality of any and all products or services used or provided in
connection with any of the material Trademarks, consistent with the quality of the products and
services as of the date hereof, and taking all steps necessary to ensure that all licensed users of
any of the material Trademarks use such consistent standards of quality.




          (f) With respect to its Intellectual Property Collateral, each Grantor agrees to execute or
otherwise authenticate an agreement, in substantially the form set forth in Exhibit A
hereto or otherwise in form and substance satisfactory to the Collateral Agent (an “Intellectual
Property Security Agreement”), for recording the security interest granted hereunder to the
Collateral Agent in such Intellectual Property Collateral with the Canadian Intellectual Property
Office and any other governmental authorities necessary to perfect the security interest hereunder
in such Intellectual Property Collateral.




          (g) Each Grantor agrees that should it obtain an ownership interest in or license to any item
of the type set forth in Section 1(g) that is not on the date hereof a part of the
Intellectual Property Collateral (“After-Acquired Intellectual Property”) (i) the provisions of
this Agreement shall automatically apply thereto, and (ii) any such After-Acquired Intellectual
Property and, in the case of trademarks, the goodwill symbolized thereby, shall automatically
become part of the Intellectual Property Collateral subject to the terms and conditions of this
Agreement with respect thereto. Each Grantor shall give prompt written notice to the Collateral
Agent identifying the After-Acquired Intellectual Property, and such Grantor shall execute and
deliver to the Collateral Agent with such written notice, or otherwise authenticate, an agreement
substantially in the form of Exhibit B hereto or otherwise in form and substance
satisfactory to the Collateral Agent (an “IP Security Agreement Supplement”) covering such
After-Acquired Intellectual Property, which IP Security Agreement Supplement shall be recorded with
the Canadian Intellectual Property Office and any other relevant governmental authorities necessary
to perfect the security interest hereunder in such After-Acquired Intellectual Property.




 









 








          12. Voting Rights; Dividends; Etc.




          (a) So long as no Event of Default shall have occurred and be continuing:





          (i) Each Grantor shall be entitled to exercise any and all voting and other consensual
rights pertaining to the Security Collateral of such Grantor or any part thereof for any
purpose; provided however, that such Grantor will not exercise or refrain from exercising
any such right if such action would have a material adverse effect on the value of the
Security Collateral or any part thereof.




          (ii) Each Grantor shall be entitled to receive and retain any and all dividends,
interest and other distributions paid in respect of the Security Collateral of such Grantor
if and to the extent that the payment thereof is not otherwise prohibited by the terms of
the Loan Documents; provided, however, that any and all




          (1) dividends, interest and other distributions paid or payable other than in
cash in respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any Security Collateral,




          (2) dividends and other distributions paid or payable in cash in respect of any
Security Collateral in connection with a partial or total liquidation or dissolution
or in connection with a reduction of capital, capital surplus or paid in surplus and




          (3) cash paid, payable or otherwise distributed in respect of principal of, or
in redemption of, or in exchange for, any Security Collateral


shall be, and shall be forthwith delivered to the Collateral Agent to hold as, Security Collateral
and shall, if received by such Grantor, be received in trust for the benefit of the Collateral
Agent, be segregated from the other property or funds of such Grantor and be forthwith delivered to
the Collateral Agent as Security Collateral in the same form as so received (with any necessary
indorsement).





          (iii) The Collateral Agent will execute and deliver (or cause to be executed and
delivered) to each Grantor all such proxies and other instruments as such Grantor may
reasonably request for the purpose of enabling such Grantor to exercise the voting and other
rights that it is entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain pursuant to
paragraph (ii) above.



          (b) Upon the occurrence and during the continuance of an Event of Default:





          (i) All rights of each Grantor (x) to exercise or refrain from exercising the voting
and other consensual rights that it would otherwise be entitled to exercise pursuant to
Section 12(a)(i) shall, upon notice to such Grantor by the Collateral Agent, cease
and (y) to receive the dividends, interest and other distributions that it would



 









 







otherwise
be authorized to receive and retain pursuant to Section 12(a)(ii) shall
automatically cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Security Collateral such
dividends, interest and other distributions.




          (ii) All dividends, interest and other distributions that are received by any Grantor
contrary to the provisions of paragraph (i) of this Section 12(b) shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other funds of
such Grantor and shall be forthwith paid over to the Collateral Agent as Security Collateral
in the same form as so received (with any necessary indorsement).



          13. As to Letter-of-Credit Rights.




          (a) Each Grantor, by granting a security interest in its Receivables consisting of
letter-of-credit rights to the Collateral Agent, intends to (and hereby does) assign to the
Collateral Agent its rights (including its contingent rights) to the proceeds of all Related
Contracts consisting of letters of credit of which it is or hereafter becomes a beneficiary or
assignee. Each Grantor will promptly use its best efforts to cause the issuer of each letter of
credit and each nominated person (if any) with respect thereto to consent to such assignment of the
proceeds thereof pursuant to a consent in form and substance satisfactory to the Collateral Agent
and deliver written evidence of such consent to the Collateral Agent.




          (b) Upon the occurrence and during the continuance of an Event of Default, each Grantor will,
promptly upon reasonable request by the Collateral Agent, (i) notify (and such Grantor hereby
authorizes the Collateral Agent to notify) the issuer and each nominated person with respect to
each of the Related Contracts consisting of letters of credit that the proceeds thereof have been
assigned to the Collateral Agent hereunder and any payments due or to become due in respect thereof
are to be made directly to the Collateral Agent or its designee and (ii) arrange for the Collateral
Agent to become the transferee beneficiary of letter of credit.




          14. Transfers and Other Liens; Additional Shares.




          (a) Each Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or grant
any option with respect to, any of the Collateral, other than sales, assignments and other
dispositions of Collateral, and options relating to Collateral, permitted under the terms of the
Credit Agreement, or (ii) create or suffer to exist any Lien upon or with respect to any of the
Collateral of such Grantor except for the pledge, assignment and security interest created under
this Agreement and Liens permitted under the Credit Agreement.




          (b) Each Grantor agrees that it will (i) cause each issuer of the Pledged Equity pledged by
such Grantor not to issue any Equity Interests or other securities in addition to or in
substitution for the Pledged Equity issued by such issuer, except to such Grantor, and (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all
additional Equity Interests or other securities of each issuer of the Pledged Equity.





 









 








          15. Collateral Agent Appointed Attorney in Fact.




          Each Grantor hereby irrevocably appoints the Collateral Agent such Grantor’s attorney in fact,
with full authority in the place and stead of such Grantor and in the name of such Grantor or
otherwise, from time to time, upon the occurrence and during the continuation of an Event of
Default, in the Collateral Agent’s discretion, to take any action and to execute any instrument
that the Collateral Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:




          (a) to obtain and adjust insurance required to be paid to the Collateral Agent pursuant to
Section 9,




          (b) to ask for, demand, collect, sue for, recover, compromise, receive and give acquittance
and receipts for moneys due and to become due under or in respect of any of the Collateral,




          (c) to receive, indorse and collect any drafts or other instruments, documents and chattel
paper, in connection with clause (a) or (b) above, and




          (d) to file any claims or take any action or institute any proceedings that the Collateral
Agent may deem necessary or desirable for the collection of any of the Collateral or otherwise to
enforce compliance with the terms and conditions of any Assigned Agreement or the rights of the
Collateral Agent with respect to any of the Collateral.




          16. Collateral Agent May Perform.




          If any Grantor fails to perform any agreement contained herein on or after the date required
for performance thereof, the Collateral Agent may, but without any obligation to do so and without
notice, itself perform, or cause performance of, such agreement, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by such Grantor under, and to the extent
provided in Section 19.




          17. The Collateral Agent’s Duties.




          (a) The powers conferred on the Collateral Agent hereunder are solely to protect the Secured
Parties’ interest in the Collateral and shall not impose any duty upon it to exercise any such
powers. Except for the safe custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Collateral Agent shall have no duty as to any
Collateral, as to ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relative to any Collateral, whether or not any Secured Party
has or is deemed to have knowledge of such matters, or as to the taking of any necessary steps to
preserve rights against any parties or any other rights pertaining to any Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation
of any Collateral in its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.





 











 





          (b) Anything contained herein to the contrary notwithstanding, the Collateral Agent may from
time to time, when the Collateral Agent deems it to be necessary, appoint one or more subagents
(each a “Subagent”) for the Collateral Agent hereunder with respect to all or any part of the
Collateral. In the event that the Collateral Agent so appoints any Subagent with respect to any
Collateral, (i) the assignment and pledge of such Collateral and the security interest granted in
such Collateral by each Grantor hereunder shall be deemed for purposes of this Security Agreement
to have been made to such Subagent, in addition to the Collateral Agent, for the ratable benefit of
the Secured Parties, as security for the Secured Obligations of such Grantor, (ii) such Subagent
shall automatically be vested, in addition to the Collateral Agent, with all rights, powers,
privileges, interests and remedies of the Collateral Agent hereunder with respect to such
Collateral, and (iii) the term “Collateral Agent,” when used herein in relation to any rights,
powers, privileges, interests and remedies of the Collateral Agent with respect to such Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be authorized to take
any action with respect to any such Collateral unless and except to the extent expressly authorized
in writing by the Collateral Agent.




          18. Remedies.




          If any Event of Default shall have occurred and be continuing:




          (a) The Collateral Agent may exercise in respect of the Collateral, in addition to other
rights and remedies provided for herein or otherwise available to it, all the rights and remedies
of a secured party upon default under the UCC or the PPSA (whether or not the UCC or the PPSA
applies to the affected Collateral), the Bankruptcy Code, or any other applicable law, and also
may: (i) require each Grantor to, and each Grantor hereby agrees that it will at its expense and
upon reasonable request of the Collateral Agent forthwith, assemble all or part of the Collateral
as directed by the Collateral Agent and make it available to the Collateral Agent at a place and
time to be designated by the Collateral Agent that is reasonably convenient to both parties; (ii)
without notice except as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent’s offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable; (iii) occupy any premises owned or leased by any of the Grantors where the
Collateral or any part thereof is assembled or located for a reasonable period in order to
effectuate its rights and remedies hereunder or under law, without obligation to such Grantor in
respect of such occupation; and (iv) exercise any and all rights and remedies of any of the
Grantors under or in connection with the Collateral, or otherwise in respect of the Collateral,
including, without limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of, the Assigned Agreements,
the Receivables, the Related Contracts and the other Collateral, (B) withdraw, or cause or direct
the withdrawal, of all funds with respect to the Account Collateral and (C) exercise all other
rights and remedies with respect to the Assigned Agreements, the Receivables, the Related Contracts
and the other Collateral, including, without limitation, those set forth in the PPSA or
Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten days’ notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable notification. The
Collateral Agent shall not be obligated to make any sale of






 









 







Collateral regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and place to which it was so
adjourned.




          (b) Any cash held by or on behalf of the Collateral Agent and all cash proceeds received by or
on behalf of the Collateral Agent in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the Collateral Agent, be held by
the Collateral Agent as collateral for, and/or then or at any time thereafter paid (after payment
of any amounts payable to the Collateral Agent pursuant to Section 20) in whole or in part
by the Collateral Agent for the ratable benefit of the Secured Parties against, all or any part of
the Secured Obligations (other than contingent indemnification and reimbursement claims in respect
of which no claim for payment has been asserted by the Person entitled thereto) in the following
manner:





          (i) first, paid to the Collateral Agent for any amounts then owing to the Collateral
Agent pursuant to Section 9.04 of the Credit Agreement or otherwise under the Loan
Documents; and




          (ii) second, ratably, paid to the Secured Parties for any amounts then owing to them,
in their capacities as such, under the Loan Documents and the ratably in accordance with the
amounts then owing to the Secured Parties.



          Any surplus of such cash or cash proceeds held by or on the behalf of the Collateral Agent and
remaining after payment in full of all the Secured Obligations shall be paid over to the applicable
Grantor or to whomsoever may be lawfully entitled to receive such surplus.




          (c) All payments received by any Grantor under or in connection with any Assigned Agreement or
otherwise in respect of the Collateral shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Grantor and shall be forthwith paid over to the
Collateral Agent in the same form as so received (with any necessary indorsement).




          (d) The Collateral Agent may, without notice to any Grantor except as required by law and at
any time or from time to time, charge, set off and otherwise apply all or any part of the Secured
Obligations against any funds held with respect to the Account Collateral or in any other deposit
account.




          (e) The Collateral Agent may send to each bank, securities intermediary or issuer party to any
Deposit Account Control Agreement, Securities/Deposit Account Control Agreement, Securities Account
Control Agreement or Uncertificated Security Control Agreement a “Notice of Exclusive Control” as
defined in and under such Agreement; provided, that the Collateral Agent shall use reasonable
commercial efforts to rescind such “Notice of Exclusive Control” within a reasonable period of time
following the date on which no Default or Event of Default exists.







 









 








          (f) In the event of any sale or other disposition of any of the Intellectual Property
Collateral of any Grantor, the goodwill symbolized by any Trademarks subject to such sale or other
disposition shall be included therein, and such Grantor shall supply to the Collateral Agent or its
designee such Grantor’s know-how and expertise, and documents and things relating to any
Intellectual Property Collateral subject to such sale or other disposition, and such Grantor’s
customer lists and other records and documents relating to such Intellectual Property Collateral
and to the manufacture, distribution, advertising and sale of products and services of such
Grantor.




          (g) The Collateral Agent may realize upon the Collateral and enforce the rights of the
Collateral Agent and the Secured Parties by (i) appointment by instrument in writing of a receiver
(which term as used in this Agreement includes a receiver and manager) or agent of all or any part
of the Collateral and the removal or replacement from time to time of any receiver or agent, and
(ii) institution of proceedings in any court of competent jurisdiction for the appointment of a
receiver of all or any part of the Collateral.




          19. Indemnity and Expenses.




          (a) Each Grantor agrees to indemnify, defend and save and hold harmless each Secured Party and
each of their Affiliates and their respective officers, directors, employees, agents and advisors
(each, an “Indemnified Party”) from and against, and shall pay on demand, any and all claims,
damages, losses, liabilities and expenses (including, without limitation, reasonable fees and
expenses of counsel) that may be incurred by or asserted or awarded against any Indemnified Party,
in each case arising out of or in connection with or resulting from this Agreement (including,
without limitation, enforcement of this Agreement), except to the extent such claim, damage, loss,
liability or expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party’s gross negligence or willful misconduct.




          (b) Each Grantor will upon demand pay to the Collateral Agent the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, that the Collateral Agent may incur in connection with (i) the
administration of this Agreement, (ii) the custody, preservation, use or operation of, or the sale
of, collection from or other realization upon, any of the Collateral of such Grantor, (iii) the
exercise or enforcement of any of the rights of the Collateral Agent or the other Secured Parties
hereunder or (iv) the failure by such Grantor to perform or observe any of the provisions hereof.




          20. Amendments; Waivers; Additional Grantors; Etc.




          (a) No amendment or waiver of any provision of this Agreement, and no consent to any departure
by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and
signed by the Collateral Agent, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on the part of the
Collateral Agent or any other Secured Party to exercise, and no delay in exercising any right
hereunder, shall operate as a waiver thereof; nor shall any single or partial






 









 







exercise of any such right preclude any other or further exercise thereof or the exercise of
any other right.




          (b) Upon the execution and delivery by any Person of a security agreement supplement in
substantially the form of Exhibit C hereto (each a “Security Agreement Supplement”), such
Person shall be referred to as an “Additional Grantor” and shall be and become a Grantor hereunder,
and each reference in this Agreement and the other Loan Documents to “Grantor” shall also mean and
be a reference to such Additional Grantor, each reference in this Agreement and the other Loan
Documents to the “Collateral” shall also mean and be a reference to the Collateral granted by such
Additional Grantor and each reference in this Agreement to a Schedule shall also mean and be a
reference to the schedules attached to such Security Agreement Supplement.




          21. Notices, Etc.




          All notices and other communications provided for hereunder shall be either (i) in writing
(including facsimile communications) and mailed, sent via facsimile or otherwise delivered or (ii)
by electronic mail (if electronic mail addresses are designated as provided below) confirmed
immediately in writing, in the case of the Administrative Borrower or the Collateral Agent,
addressed to it at its address specified in the Credit Agreement and, in the case of each Grantor
other than the Borrowers, addressed to it at its address set forth opposite such Grantor’s name on
the signature pages hereto or on the signature page to the Security Agreement Supplement pursuant
to which it became a party hereto; or, as to any party, at such other address as shall be
designated by such party in a written notice to the other parties. All such notices and other
communications shall, when mailed, sent by facsimile, electronic mail or otherwise, be effective
when deposited in the mails, sent by facsimile, sent by electronic mail and confirmed in writing,
or otherwise delivered (or confirmed by a signed receipt), respectively, addressed as aforesaid;
except that notices and other communications to the Collateral Agent shall not be effective until
received by the Collateral Agent. Delivery by facsimile of an executed counterpart of any
amendment or waiver of any provision of this Agreement or of any Security Agreement Supplement or
Schedule hereto shall be effective as delivery of an original executed counterpart thereof.




          22. Continuing Security Interest; Assignments under the Credit Agreement.




          This Agreement shall create a continuing security interest in the Collateral and shall (a)
remain in full force and effect until the latest of (i) the payment in full in cash of the Secured
Obligations (other than contingent indemnification and reimbursement claims in respect of which no
claim for payment has been asserted by the Person entitled thereto), and (ii) the Maturity Date,
(b) be binding upon each Grantor, its successors and assigns and (c) inure, together with the
rights and remedies of the Collateral Agent hereunder, to the benefit of the Secured Parties and
their respective successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Lender may assign or otherwise transfer all or any portion of its rights
and obligations under the Credit Agreement (including, without limitation, all or any portion of
its Commitments, the Loans owing to it and the Note or Notes, if any, held by it) to any other
Person, and such other Person shall thereupon become vested with all the






 









 







benefits in respect thereof granted to such Lender herein or otherwise, in each case as
provided in the Credit Agreement.




          23. Release; Termination.




          (a) Upon any sale, lease, transfer or other disposition of any item of Collateral of any
Grantor in accordance with the terms of the Loan Documents (other than sales of Inventory,
equipment and other obsolete or worn-out equipment in the ordinary course of business), the
Collateral Agent will, at such Grantor’s expense, execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided, however, that (i) at
the time of such request and such release no Event of Default shall have occurred and be
continuing, (ii) such Grantor shall have delivered to the Collateral Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release describing the item
of Collateral and the terms of the sale, lease, transfer or other disposition in reasonable detail,
including, without limitation, the price thereof and any expenses in connection therewith, together
with a form of release for execution by the Collateral Agent and a certificate of such Grantor to
the effect that the transaction is in compliance with the Loan Documents and as to such other
matters as the Collateral Agent may reasonably request and (iii) the proceeds of any such sale,
lease, transfer or other disposition required to be applied, or any payment to be made in
connection therewith, in accordance with Section 2.03 of the Credit Agreement shall, to the extent
so required, be paid or made to, or in accordance with the instructions of, the Collateral Agent
when and as required under Section 2.03 of the Credit Agreement.




          (b) Upon the latest of (i) the payment in full in cash of the Secured Obligations (other than
contingent indemnification and reimbursement claims in respect of which no claim for payment has
been asserted by the Person entitled thereto), and (ii) the Maturity Date, the pledge and security
interest granted hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantor. Upon any such termination, the Collateral Agent will, at the applicable
Grantor’s expense, execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.




          24. Execution in Counterparts.




          This Agreement may be executed in any number of counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this Agreement by facsimile
or other electronic means shall be effective as delivery of an original executed counterpart of
this Agreement.




          25. Governing Law.




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







 









 








          26. Matters Relating to Security.




          (a) As set forth in the Order, each Grantor hereby agrees that upon the effectiveness of the
Order (i) the Secured Obligations shall constitute allowed administrative expenses in such
Grantor’s Chapter 11 Case having priority over all administrative expenses of and unsecured claims
against such Grantor now existing or hereafter arising, of any kind or nature whatsoever, including
without limitation all administrative expenses of the kind specified in Sections 503(b) and 507(b)
of the Bankruptcy Code, subject, as to priority, only to the Carve-Out and (B) the security
interest shall not be subject to Section 551 of the Bankruptcy Code nor shall the Collateral be
charged pursuant to Section 506(c) of the Bankruptcy Code.




          (b) The security interest and the administrative priority granted by and pursuant to this
Agreement hereof may be independently granted by the Loan Documents and by other Loan Documents
hereafter entered into. This Agreement, the Interim Order, the Final Order and such other Loan
Documents supplement each other, and the grants, priorities, rights and remedies of Collateral
Agent hereunder and thereunder are cumulative.




          (c) The security interest granted hereunder shall be deemed valid, binding, continuing,
enforceable and fully-perfected first priority (subject only to the Carve-Out and Liens permitted
to be equal or superior in priority pursuant to the Credit Agreement) Liens on the Collateral by
entry of the Interim Order and the Final Order, as the case may be. Collateral Agent shall not be
required to file any financing statements, notices of Lien or similar instruments in any
jurisdiction or filing office or to take any other action in order to validate or perfect the Liens
and security interests granted by or pursuant to this Agreement, the Interim Order, the Final Order
or any other Loan Document.




          (d) The security interest, the priority of the security interest, and the administrative
priorities and other rights and remedies granted to Collateral Agent pursuant to this Agreement,
the Interim Order, the Final Order and the other Collateral Documents (specifically including but
not limited to the existence, validity, enforceability, extent, perfection and priority of the
Security Interest) and the administrative priority provided herein and therein shall not be
modified, altered or impaired in any manner by any other financing or extension of credit or
incurrence of debt by any Grantor (pursuant to Section 364 of the Bankruptcy Code or otherwise), or
by any dismissal or conversion of any Bankruptcy Case, or by any other act or omission whatsoever.
Without limitation, notwithstanding any such order, financing, extension, incurrence, dismissal,
conversion, act or omission:





          (i) except for the Carve-Out, no costs or expenses of administration which have been or
may be incurred in the Chapter 11 Case or any conversion of the same or in any other
proceedings related thereto, and no priority claims, are or will be prior to or on a parity
with any claim of Collateral Agent or any Lender against any Grantor in respect of any
Secured Obligation;




          (ii) the security interest granted to Collateral Agent pursuant to this Agreement, the
Interim Order, the Final Order and the other Collateral Documents shall constitute valid,
binding, continuing, enforceable and fully-perfected first priority (subject only to the
Carve-Out and Liens permitted to be equal or superior in priority



 









 







pursuant to the Credit Agreement) Liens and shall be prior to all other Liens (except
the Carve-Out and Liens permitted to be equal or superior in priority pursuant to the Credit
Agreement) and interests, now existing or hereafter arising, in favor of any other creditor
or any other Person whatsoever; and




          (iii) the security interest granted to Collateral Agent pursuant to this Agreement, the
Interim Order, the Final Order and the Collateral Documents shall continue to be valid,
binding, continuing, enforceable and fully-perfected without the necessity for Collateral
Agent to file any financing statements or to otherwise perfect the security interest under
applicable non-bankruptcy law.



[Remainder of page intentionally left blank.]






 









 








          IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.




	 	 	 	 	 	 	 
	Address for Notices:	 	 	 	[GRANTOR]
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 


	 	 
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Address for Notices:	 	 	 	TLC VISION CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 


	 	 
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Address for Notices:	 	 	 	TLC THE LASER CENTER (MONCTON) INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 


	 	 
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Address for Notices:	 	 	 	RHEO CLINIC INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 


	 	 
	 	 	 	Title:
	 
	 	 	 	 	 	 
	Address for Notices:	 	 	 	VISION CORPORATION
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:
	 


	 	 
	 	 	 	Title:






 









 






EXHIBIT E TO SENIOR DIP CREDIT AGREEMENT




GUARANTY



Dated as of December 23, 2009



From



THE GUARANTORS NAMED HEREIN



as Guarantors



in favor of



CANTOR FITZGERALD SECURITIES



as



Collateral Agent



 









 





TABLE OF CONTENTS




	 	 	 
	SECTION 1.

	 	GUARANTY; LIMITATION OF LIABILITY
	 
	SECTION 2.

	 	GUARANTY ABSOLUTE
	 
	SECTION 3.

	 	WAIVERS AND ACKNOWLEDGMENTS
	 
	SECTION 4.

	 	SUBROGATION
	 
	SECTION 5.

	 	PAYMENTS FREE AND CLEAR OF TAXES, ETC
	 
	SECTION 6.

	 	REPRESENTATIONS AND WARRANTIES
	 
	SECTION 7.

	 	COVENANTS
	 
	SECTION 8.

	 	AMENDMENTS, GUARANTY SUPPLEMENTS, ETC
	 
	SECTION 9.

	 	NOTICES, ETC
	 
	SECTION 10.

	 	NO WAIVER; REMEDIES
	 
	SECTION 11.

	 	RIGHT OF SET-OFF
	 
	SECTION 12.

	 	INDEMNIFICATION
	 
	SECTION 13.

	 	SUBORDINATION
	 
	SECTION 14.

	 	CONTINUING GUARANTY; ASSIGNMENTS UNDER THE CREDIT AGREEMENT
	 
	SECTION 15.

	 	EXECUTION IN COUNTERPARTS
	 
	SECTION 16.

	 	GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC
	 
	SECTION 17.

	 	CREDIT AGREEMENT, ORDER






 









 






GUARANTY




          GUARANTY dated as of December 23, 2009 made by the Persons listed on the signature pages
hereof (such Persons so listed, collectively, the “Guarantors” and, individually, each a
“Guarantor”) in favor of Cantor Fitzgerald Securities as collateral agent (in such
capacity, together with any successor collateral agent appointed pursuant to Article VII of the
Credit Agreement (as hereinafter defined), the “Collateral Agent”) for the Secured Parties
(as defined in the Credit Agreement referred to below).




          WHEREAS, TLC Vision (USA) Corporation, a Delaware corporation, as a debtor and a
debtor-in-possession (“Holdco”), TLC Vision Corporation, a New Brunswick corporation, as a
debtor and a debtor-in-possession (the “Parent”), and TLC Management Services Inc., a
Delaware corporation, as a debtor and a debtor-in-possession (“TLC Management”, and
together with Holdco and the Parent, the “Borrowers”) are party to a Senior Secured Super
Priority Debtor in Possession Credit Agreement dated as of the date hereof (as amended, amended and
restated, supplemented or otherwise modified from time to time, the “Credit Agreement”);
with certain Lenders party thereto, and Cantor Fitzgerald Securities, as administrative agent for
such Lenders and collateral agent for the Secured Parties; the capitalized terms defined therein
and not otherwise defined herein being used herein as therein defined);




          WHEREAS, on December 21, 2009 (the “Petition Date”), the Borrowers filed a petition
under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware;




          WHEREAS, subsequent to the Petition Date, the Parent filed a petition under Part IV of the
Companies’ Creditors Arrangements Act (Canada) (the “CCAA”), as ancillary relief sought in
the Ontario Superior Court of Justice (Commercial List);




          WHEREAS, the Borrowers intend to continue to operate their business pursuant to Sections 1107
and 1108 of the Bankruptcy Code;




          WHEREAS, the Borrowers have requested that the Lenders provide financing to the Borrowers
consisting of a senior secured super priority term loan facility in an amount up to $15,000,000
(the “Facility”) pursuant to Sections 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, the Lenders have indicated their willingness to agree to extend the Facility to the
Borrowers, all on terms and conditions set forth in the Credit Agreement and in the Order pursuant
to Section 364(c) and 364(d) of the Bankruptcy Code;




          WHEREAS, Each Guarantor will derive substantial direct and indirect benefits from the
transactions contemplated by the Credit Agreement;




          WHEREAS, it is a condition precedent to the making of the Term Loans by the Lenders under the
Credit Agreement that each Guarantor shall have executed and delivered this Guaranty.




          NOW, THEREFORE, for and in consideration of the foregoing, each Guarantor, jointly and
severally with each other Guarantor, hereby agrees as follows:







 









 








          1. Guaranty; Limitation of Liability. (a) Each Guarantor hereby absolutely, unconditionally
and irrevocably guarantees the punctual payment when due, whether at scheduled maturity or on any
date of a required prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan Documents (including,
without limitation, any extensions, modifications, substitutions, amendments or renewals of any or
all of the foregoing Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action, costs, expenses or
otherwise (such Obligations being the “Guaranteed Obligations”), and agrees to pay any and all
expenses (including, without limitation, reasonable fees and expenses of counsel) incurred by the
Collateral Agent or any other Secured Party in enforcing any rights under this Guaranty or any
other Loan Document. Without limiting the generality of the foregoing, each Guarantor’s liability
shall extend to all amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.




          (b) Each Guarantor, and by its acceptance of this Guaranty, the Collateral Agent and each
other Secured Party, hereby confirms that it is the intention of all such Persons that this
Guaranty and the Obligations of each Guarantor hereunder not constitute a fraudulent transfer or
conveyance for purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign, federal or state law to
the extent applicable to this Guaranty and the Obligations of each Guarantor hereunder. To
effectuate the foregoing intention, the Collateral Agent, the other Secured Parties and the
Guarantors hereby irrevocably agree that the Obligations of each Guarantor under this Guaranty at
any time shall be limited to the maximum amount as will result in the Obligations of such Guarantor
under this Guaranty not constituting a fraudulent transfer or conveyance. For purposes hereof,
“Bankruptcy Law” means any proceeding of the type referred to in Title 11, U.S. Code, the
Bankruptcy and Insolvency Act (Canada), the CCAA, or any similar foreign, federal, provincial or
state law for the relief of debtors.




          (c) Each Guarantor hereby unconditionally and irrevocably agrees that in the event any payment
shall be required to be made to any Secured Party under this Guaranty or any other guaranty, such
Guarantor will contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.




          2. Guaranty Absolute. Each Guarantor guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of
any Secured Party with respect thereto. The Obligations of each Guarantor under or in respect of
this Guaranty are independent of the Guaranteed Obligations or any other Obligations of any other
Loan Party under or in respect of the Loan Documents, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrowers or any other Loan Party or whether the Borrowers or any
other Loan Party is joined in any such action or actions.






 









 







The liability of each Guarantor under
this Guaranty shall be irrevocable, absolute and
unconditional irrespective of, and each Guarantor hereby irrevocably waives any defenses it
may now have or hereafter acquire in any way relating to, any or all of the following:




          (a) any lack of validity or enforceability of any Loan Document or any agreement or instrument
relating thereto;




          (b) any change in the time, manner or place of payment of, or in any other term of, all or any
of the Guaranteed Obligations or any other Obligations of any other Loan Party under or in respect
of the Loan Documents, or any other amendment or waiver of or any consent to departure from any
Loan Document, including, without limitation, any increase in the Guaranteed Obligations resulting
from the extension of additional credit to any Loan Party or any of its Subsidiaries or otherwise;




          (c) any taking, exchange, release or non-perfection of any Collateral or any other collateral,
or any taking, release or amendment or waiver of, or consent to departure from, any other guaranty,
for all or any of the Guaranteed Obligations;




          (d) any manner of application of Collateral or any other collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other disposition of any
Collateral or any other collateral for all or any of the Guaranteed Obligations or any other
Obligations of any Loan Party under the Loan Documents or any other assets of any Loan Party or any
of its Subsidiaries;




          (e) any change, restructuring or termination of the corporate structure or existence of any
Loan Party or any of its Subsidiaries;




          (f) any failure of any Secured Party to disclose to any Loan Party any information relating to
the business, condition (financial or otherwise), operations, performance, properties or prospects
of any other Loan Party now or hereafter known to such Secured Party (each Guarantor waiving any
duty on the part of the Secured Parties to disclose such information);




          (g) the failure of any other Person to execute or deliver this Guaranty, any Guaranty
Supplement (as hereinafter defined) or any other guaranty or agreement or the release or reduction
of liability of any Guarantor or other guarantor or surety with respect to the Guaranteed
Obligations; or




          (h) any other circumstance (including, without limitation, any statute of limitations) or any
existence of or reliance on any representation by any Secured Party that might otherwise constitute
a defense available to, or a discharge of, any Loan Party or any other guarantor or surety (other
than payment in full and performance of the Guaranteed Obligations).



This Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time
any payment of any of the Guaranteed Obligations is rescinded or must otherwise be returned by any
Secured Party or any other Person upon the insolvency, bankruptcy or reorganization of the
Borrowers or any other Loan Party or otherwise, all as though such payment had not been made.







 









 








          3. Waivers and Acknowledgments. (a) Each Guarantor hereby unconditionally and irrevocably
waives promptness, diligence, notice of acceptance, presentment, demand for performance, notice of
nonperformance, default, acceleration, protest or dishonor and any other notice with respect to any
of the Guaranteed Obligations and this Guaranty and any requirement that any Secured Party protect,
secure, perfect or insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any Collateral.




          (b) Each Guarantor hereby unconditionally and irrevocably waives any right to revoke this
Guaranty and acknowledges that this Guaranty is continuing in nature and applies to all Guaranteed
Obligations, whether existing now or in the future.




          (c) Each Guarantor hereby unconditionally and irrevocably waives (i) any defense arising by
reason of any claim or defense based upon an election of remedies by any Secured Party that in any
manner impairs, reduces, releases or otherwise adversely affects the subrogation, reimbursement,
exoneration, contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor or any other Person
or any Collateral and (ii) any defense based on any right of set-off or counterclaim against or in
respect of the Obligations of such Guarantor hereunder.




          (d) Each Guarantor acknowledges that the Collateral Agent may, without notice to or demand
upon such Guarantor and without affecting the liability of such Guarantor under this Guaranty,
foreclose under any mortgage by nonjudicial sale, and each Guarantor hereby waives any defense to
the recovery by the Collateral Agent and the other Secured Parties against such Guarantor of any
deficiency after such nonjudicial sale and any defense or benefits that may be afforded by
applicable law.




          (e) Each Guarantor hereby unconditionally and irrevocably waives any duty on the part of any
Secured Party to disclose to such Guarantor any matter, fact or thing relating to the business,
condition (financial or otherwise), operations, performance, properties or prospects of any other
Loan Party or any of its Subsidiaries now or hereafter known by such Secured Party.




          (f) Each Guarantor acknowledges that it will receive substantial direct and indirect benefits
from the financing arrangements contemplated by the Loan Documents and that the waivers set forth
in Section 2 and this Section 3 are knowingly made in contemplation of such
benefits.




          4. Subrogation. Each Guarantor hereby unconditionally and irrevocably agrees not to exercise
any rights that it may now have or hereafter acquire against the Borrowers, any other Loan Party or
any other insider guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor’s Obligations under or in respect of this Guaranty or any other Loan Document,
including, without limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of any Secured Party against
the Borrowers, any other Loan Party or any other insider guarantor or any Collateral, whether or
not such claim, remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive






 









 







from the Borrowers, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed Obligations (other
than contingent indemnification and reimbursement obligations in respect of which no claim for
payment has been asserted by the Person entitled thereto) and all other amounts payable under this
Guaranty shall have been paid in full in cash, and the Commitments shall have expired or been
terminated. If any amount shall be paid to any Guarantor in violation of the immediately preceding
sentence at any time prior to the latest of (a) the payment in full in cash of the Guaranteed
Obligations (other than contingent indemnification and reimbursement obligations in respect of
which no claim for payment has been asserted by the Person entitled thereto) and all other amounts
payable under this Guaranty and (b) the Maturity Date, such amount shall be received and held in
trust for the benefit of the Secured Parties, shall be segregated from other property and funds of
such Guarantor and shall forthwith be paid or delivered to the Collateral Agent in the same form as
so received (with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty, whether matured or
unmatured, in accordance with the terms of the Loan Documents, or to be held as Collateral for any
Guaranteed Obligations or other amounts payable under this Guaranty thereafter arising. If (i) any
Guarantor shall make payment to any Secured Party of all or any part of the Guaranteed Obligations,
(ii) all of the Guaranteed Obligations (other than contingent indemnification and reimbursement
obligations in respect of which no claim for payment has been asserted by the Person entitled
thereto) and all other amounts payable under this Guaranty shall have been paid in full in cash,
and (iii) the Maturity Date shall have occurred, the Secured Parties will, at such Guarantor’s
request and expense, execute and deliver to such Guarantor appropriate documents, without recourse
and without representation or warranty, necessary to evidence the transfer by subrogation to such
Guarantor of an interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.




          5. Payments Free and Clear of Taxes, Etc. (a) Any and all payments made by any Guarantor
under or in respect of this Guaranty or any other Loan Document shall be made, in accordance with
Section 2.09 of the Credit Agreement, free and clear of and without deduction for any and all
present or future Taxes. If any Guarantor shall be required by law to deduct any Taxes from or in
respect of any sum payable under or in respect of this Guaranty or any other Loan Document to any
Secured Party, (i) the sum payable by such Guarantor shall be increased as may be necessary so that
after such Guarantor and the Collateral Agent have made all required deductions (including
deductions applicable to additional sums payable under this Section 5), such Secured Party receives
an amount equal to the sum it would have received had no such deductions been made, (ii) such
Guarantor shall make all such deductions and (iii) such Guarantor shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance with applicable law.




          (b) In addition, each Guarantor agrees to pay any present or future Other Taxes that arise
from any payment made by or on behalf of such Guarantor under or in respect of this Guaranty or any
other Loan Document or from the execution, delivery or registration of, performance under, or
otherwise with respect to, this Guaranty and the other Loan Documents.







 









 








          (c) Each Guarantor will indemnify each Secured Party for and hold it harmless against the full
amount of Taxes and Other Taxes, and for the full amount of Taxes imposed by any jurisdiction on
amounts payable under this Section 5, imposed on or paid by such Secured Party and any
liability (including penalties, additions to tax, interest and expenses) arising therefrom or with
respect thereto whether or not such amounts were correctly or legally imposed by the relevant
Governmental Authority). This indemnification shall be made within 30 days from the date such
Secured Party makes written demand therefor.




          (d) Within 30 days after the date of any payment of Taxes by or on behalf of any Guarantor,
such Guarantor shall furnish to the Collateral Agent, at its address referred to in
Section 9, the original or a certified copy of a receipt evidencing such payment, to the
extent such a receipt is issued therefor, or other written proof of payment thereof that is
reasonably satisfactory to the Collateral Agent. In the case of any payment hereunder by or on
behalf of any Guarantor through an account or branch outside the United States or by or on behalf
of such Guarantor by a payor that is not a United States person, if such Guarantor determines that
no Taxes are payable in respect thereof, such Guarantor shall furnish, or shall cause such payor to
furnish, to the Collateral Agent, at such address, an opinion of counsel acceptable to the
Collateral Agent stating that such payment is exempt from Taxes. For purposes of subsections (d)
and (e) of this Section 5, the terms “United States” and “United States
person” shall have the meanings specified in Section 7701 of the Internal Revenue Code.




          (e) Each Secured Party entitled to an exemption from, or reduction or, withholding tax shall,
on or prior to the date of its execution and delivery of the Credit Agreement in the case of each
Secured Party that is a party to the Credit Agreement as of the date hereof and on the date of the
Assignment and Acceptance pursuant to which it becomes a Secured Party in the case of each other
Secured Party, and from time to time thereafter as reasonably requested in writing by any Guarantor
(but only so long thereafter as such Secured Party remains lawfully able to do so), provide each of
the Collateral Agent and such Guarantor with two original Internal Revenue Service Forms W-8ECI or
W-8BEN or (in the case of a Secured Party that has certified in writing to the Collateral Agent
that it is not (i) a “bank” (as defined in Section 881(c)(3)(A) of the Internal Revenue Code), (ii)
a 10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code)
of any Guarantor or (iii) a controlled foreign corporation related to any Guarantor (within the
meaning of Section 864(d)(4) of the Internal Revenue Code)), Internal Revenue Service Form W-8BEN,
as appropriate, or any successor or other form prescribed by the Internal Revenue Service, or any
such form or forms as may be required under the laws of any jurisdiction other than the United
States as a condition to exemption from, or reduction of, withholding tax in such jurisdiction,
certifying that such Secured Party is exempt from or entitled to a reduced rate of United States
withholding tax on payments pursuant to this Guaranty or any other Loan Document or, in the case of
a Secured Party that has certified that it is not a “bank” as described above, certifying that such
Secured Party is a foreign corporation, partnership, estate or trust. If the forms provided by a
Secured Party at the time such Secured Party first becomes a party to the Credit Agreement indicate
a United States or other interest withholding tax rate, as applicable, in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and until such Secured
Party provides the appropriate forms certifying that a lesser rate applies, whereupon withholding
tax at such lesser rate only shall be considered excluded from Taxes for periods






 









 







governed by such
forms; provided, however, that if, a Secured Party becoming a party to the
Credit Agreement, at the effective date of the Assignment and Acceptance pursuant to which a
Secured Party becomes a party to the Credit Agreement, the Secured Party assignor was entitled to
payments under subsection (a) of this Section 5 in respect of United States withholding tax
with respect to interest paid at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with respect to the Secured
Party assignee on such date. If any form or document referred to in this subsection (e) and
requested by any Guarantor pursuant to this subsection (e) requires the disclosure of information,
other than information necessary to compute the tax payable and information required on the date
hereof by Internal Revenue Service Form W-8 BEN or W-8 ECI or the related certificate described
above, or any forms required by any jurisdiction other than the United States, that the applicable
Secured Party reasonably considers to be confidential, such Secured Party shall give notice thereof
to the Administrative Borrower and shall not be obligated to include in such form or document such
confidential information.




          (f) For any period with respect to which a Secured Party has failed to provide the
Administrative Borrower or any Guarantor with the appropriate form described in subsection (e)
above (other than if such failure is due to a change in law, or in the
interpretation or application thereof, occurring after the date on which a form , certificate or
other document originally was required to be provided or if such form, certificate or other
document otherwise is not required under subsection (e) above), such Secured Party shall not be
entitled to indemnification under subsection (a) or (c) of this Section 5 with respect to
Taxes imposed by the United States by reason of such failure; provided, however, that should a
Secured Party become subject to Taxes because of its failure to deliver a form, certificate or
other document required hereunder, such Guarantor shall take such steps as such Secured Party shall
reasonably request to assist such Secured Party to recover such Taxes.




          (g) Each Guarantor will make payment relative to each Obligation in the currency (the
“Original Currency”) in which the Borrowers are required to pay such Obligation. If a
Guarantor makes payment relative to any Guaranteed Obligation to the Collateral Agent or the
Secured Parties in a currency (the “Other Currency”) other than the Original Currency
(whether voluntarily or pursuant to an order or judgment of a court or tribunal of any
jurisdiction), such payment will constitute a discharge of the liability of such Guarantor
hereunder in respect of such Obligation only to the extent of the amount of the Original Currency
which the Collateral Agent or the Secured Parties are able to purchase with the amount it receives
on the date of receipt. If the amount of the Original Currency which the Collateral Agent or the
Secured Parties are able to purchase on the date of receipt is less than the amount of such
currency originally due to it in respect to the relevant Obligation, such Guarantor will indemnify
and save the Collateral Agent and the Secured Parties harmless from and against any loss or damage
arising as a result of such deficiency. This indemnity will constitute an obligation separate and
independent from the other obligations contained in this Guaranty, will give rise to a separate and
independent cause of action, will apply irrespective of any indulgence granted by the Collateral
Agent or the Secured Parties and will continue in full force and effect notwithstanding any
judgment or order in respect of any amount due hereunder or under any judgment or order.





 











 





          6. Representations and Warranties. Each Guarantor hereby makes each representation and
warranty made in the Loan Documents by the Borrowers with respect to such Guarantor.




          7. Covenants. Each Guarantor covenants and agrees that, so long as any part of the Guaranteed
Obligations (other than contingent indemnification and reimbursement obligations in respect of
which no claim for payment has been asserted by the Person entitled thereto) shall remain
unpaid or any Lender shall have any Commitment, such Guarantor will perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms, covenants and agreements set
forth in the Loan Documents on its or their part to be performed or observed or that the Borrowers
have agreed to cause such Guarantor or such Subsidiaries to perform or observe.




          8. Amendments, Guaranty Supplements, Etc. (a) No amendment or waiver of any provision of
this Guaranty and no consent to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the specific purpose for
which given; provided, however, that no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any Lender that is, at such time, a Defaulting Lender),
(a) reduce or limit the obligations of any Guarantor hereunder, release any Guarantor hereunder or
otherwise limit any Guarantor’s liability with respect to the Obligations owing to the Secured
Parties under or in respect of the Loan Documents, or (b) reduce the percentage specified in the
definition of “Required Lenders”.




          (b) Upon the execution and delivery by any Person of a guaranty supplement in substantially
the form of Exhibit A hereto (each, a “Guaranty Supplement”), (i) such Person shall be
referred to as a “Guarantor” and shall become and be a Guarantor hereunder, and each
reference in this Guaranty to a “Guarantor” shall also mean and be a reference to such
Guarantor, and each reference in any other Loan Document to a “Guarantor” shall also mean
and be a reference to such Guarantor and (ii) each reference herein to “this Guaranty”,
“hereunder”, “hereof” or words of like import referring to this Guaranty, and each
reference in any other Loan Document to the “Guaranty”, “thereunder”,
“thereof” or words of like import referring to this Guaranty, shall mean and be a reference
to this Guaranty as supplemented by such Guaranty Supplement.




          9. Notices, Etc. All notices and other communications provided for hereunder shall be in
writing (including electronic or facsimile communication) and mailed, faxed, sent via electronic
mail or delivered to it, if to any Guarantor, addressed to it in care of the Borrowers at the
Administrative Borrower’s address specified in Section 9.02 of the Credit Agreement, if to
Collateral Agent or any Lender, at its address specified in Section 9.02 of the Credit Agreement,
or, as to any party, at such other address as shall be designated by such party in a written notice
to each other party in accordance with Section 9.02 of the Credit Agreement. All such notices and
other communications shall, when mailed, faxed or sent via electronic mail, be effective when
deposited in the mails, transmitted by facsimile or via electronic mail, respectively. Delivery by
telecopier of an executed counterpart of a signature page to any amendment or waiver of any
provision of this Guaranty or of any Guaranty Supplement to be






 









 







executed and delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.




          10. No Waiver; Remedies. No failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.




          11. Right of Set-off. Upon (a) the occurrence and during the continuance of any Event of
Default and (b) the making of the request or the granting of the consent specified by Section 6.01
of the Credit Agreement to authorize the Collateral Agent to declare the Notes due and payable
pursuant to the provisions of said Section 6.01, the Collateral Agent and each Lender and each of
their respective Affiliates is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any time owing by the
Collateral Agent, such Lender or such Affiliate to or for the credit or the account of any
Guarantor against any and all of the Obligations of such Guarantor now or hereafter existing under
the Loan Documents, irrespective of whether the Collateral Agent or such Lender shall have made any
demand under this Guaranty or any other Loan Document and although such Obligations may be
unmatured. Collateral Agent and each Lender agrees promptly to notify such Guarantor after any
such set-off and application; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the Collateral Agent and each
Lender and their respective Affiliates under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that the Collateral Agent, such
Lender and their respective Affiliates may have.




          12. Indemnification. (a) Without limitation on any other Obligations of any Guarantor or
remedies of the Secured Parties under this Guaranty, each Guarantor shall, to the fullest extent
permitted by law, indemnify, defend and save and hold harmless each Secured Party and each of their
Affiliates and their respective officers, directors, employees, agents and advisors (each, an
“Indemnified Party”) from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees and expenses of
counsel) that may be incurred by or asserted or awarded against any Indemnified Party in connection
with or as a result of any failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of any Loan Party enforceable against such Loan Party in accordance with their terms;
provided, however, that no Guarantor shall be liable for any claims, damages, losses, liabilities
and expenses resulting from Secured Parties’ gross negligence or willful misconduct as found in a
final, non-appealable judgment by a court of competent jurisdiction.




          (b) Each Guarantor hereby also agrees that none of the Indemnified Parties shall have any
liability (whether direct or indirect, in contract, tort or otherwise) to any of the Guarantors or
any of their respective Affiliates or any of their respective officers, directors, employees,
agents and advisors, and each Guarantor hereby agrees not to assert any claim against any
Indemnified Party on any theory of liability, for special, indirect, consequential or






 









 







punitive damages arising out of or otherwise relating to the Facility, the actual or proposed
use of the proceeds of the Term Loans, the Loan Documents or any of the transactions contemplated
by the Loan Documents; provided, however, that each Indemnified Party shall be liable to any of the
Guarantors or any of their respective Affiliates or any of their respective officers, directors,
employees, agents and advisors for any claims for actual damages resulting from such Indemnified
Party’s gross negligence or willful misconduct as found in a final, non-appealable judgment by a
court of competent jurisdiction.




          (c) Without prejudice to the survival of any of the other agreements of any Guarantor under
this Guaranty or any of the other Loan Documents, the agreements and obligations of each Guarantor
contained in Section 1(a) (with respect to enforcement expenses), the last sentence of
Section 2, Section 5 and this Section 12 shall survive the payment in full
of the Guaranteed Obligations and all of the other amounts payable under this Guaranty.




          13. Subordination. Each Guarantor hereby subordinates any and all debts, liabilities and
other Obligations owed to such Guarantor by each other Loan Party (the “Subordinated Obligations”)
to the Guaranteed Obligations to the extent and in the manner hereinafter set forth in this Section
13:





          (A) Prohibited Payments, Etc. Except during the continuance of an
Event of Default, each Guarantor may receive regularly scheduled payments from any
other Loan Party on account of the Subordinated Obligations. After the occurrence
and during the continuance of any Event of Default, however, unless the Collateral
Agent otherwise agrees, no Guarantor shall demand, accept or take any action to
collect any payment on account of the Subordinated Obligations.




          (B) Prior Payment of Guaranteed Obligations. In any proceeding under
any Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the
Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not constituting
an allowed claim in such proceeding (“Post Petition Interest”)) (but
excluding any contingent indemnification and reimbursement obligations in respect of
which no claim for payment has been asserted by the Person entitled thereto) before
such Guarantor receives payment of any Subordinated Obligations.




          (C) Turn-Over. After the occurrence and during the continuance of any
Event of Default (including, to the extent permitted by law, the commencement and
continuation of any proceeding under any Bankruptcy Law relating to any other Loan
Party), each Guarantor shall, if the Collateral Agent so requests, collect, enforce
and receive payments on account of the Subordinated Obligations as trustee for the
Secured Parties and deliver such payments to the Collateral Agent on account of the
Guaranteed Obligations (including all Post Petition Interest), together with any
necessary endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Guarantor under the other provisions
of this Guaranty.



 









 






          (D) Collateral Agent Authorization. After the occurrence and during
the continuance of any Event of Default (including, to the extent permitted by law,
the commencement and continuation of any proceeding under any Bankruptcy Law
relating to any other Loan Party), the Collateral Agent is authorized and empowered
(but without any obligation to so do), in its discretion, (i) in the name of each
Guarantor, to collect and enforce, and to submit claims in respect of, Subordinated
Obligations and to apply any amounts received thereon to the Guaranteed Obligations
(including any and all Post Petition Interest) and (ii) to require each
Guarantor (A) to collect and enforce, and to submit claims in respect of,
Subordinated Obligations and (B) to pay any amounts received on such obligations to
the Collateral Agent for application to the Guaranteed Obligations (including any
and all Post Petition Interest).



          14. Continuing Guaranty; Assignments under the Credit Agreement. This Guaranty is a
continuing guaranty and shall (a) remain in full force and effect until the latest of (i) the
payment in full in cash of the Guaranteed Obligations (other than contingent indemnification and
reimbursement obligations in respect of which no claim for payment has been asserted by the Person
entitled thereto) and all other amounts payable under this Guaranty and (ii) the Maturity Date, (b)
be binding upon the Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Secured Parties and their successors, transferees and assigns. Without limiting
the generality of clause (c) of the immediately preceding sentence, any Secured Party may assign or
otherwise transfer all or any portion of its rights and obligations under the Credit Agreement
(including, without limitation, all or any portion of its Commitments, the Term Loans owing to it
and the Note or Notes held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party herein or otherwise,
in each case as and to the extent provided in Section 10.07 of the Credit Agreement. No Guarantor
shall have the right to assign its rights hereunder or any interest herein without the prior
written consent of the Secured Parties.




          15. Execution in Counterparts. This Guaranty and each amendment, waiver and consent with
respect hereto may be executed in any number of counterparts and by different parties thereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Guaranty by telecopier or other electronic means shall be
effective as delivery of an original executed counterpart of this Guaranty.




          16. Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a) This Guaranty shall be
governed by, and construed in accordance with, the laws of the State of New York.




          (b) Each Guarantor hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Guaranty or any of the other Loan





 









 







Documents to which it is or is to be a party, or for recognition or enforcement of any judgment,
and each Guarantor hereby irrevocably and unconditionally agrees that all claims in respect of
any such action or proceeding may be heard and determined in any such New York State court or, to
the extent permitted by law, in such federal court. Each Guarantor 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 Guaranty or any other
Loan Document shall affect any right that any party may otherwise have to bring any action or
proceeding relating to this Guaranty or any other Loan Document in the courts of any jurisdiction.




          (c) Each Guarantor irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection that it may now or hereafter have to the laying of
venue of any suit, action or proceeding arising out of or relating to this Guaranty or any of the
other Loan Documents to which it is or is to be a party in any New York State or federal court.
Each Guarantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any such court.




          (d) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.




          17. Credit Agreement, Order. In the event of any direct conflict between the terms and
conditions of this Guaranty and the Credit Agreement, the provisions of the Credit Agreement shall
govern and control. In the event of any inconsistency between the terms and conditions of this
Guaranty and the Order, the provisions of the Order shall govern and control.










 









 








     IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly executed and delivered
by its officer thereunto duly authorized as of the date first above written.



	 	 	 	 	 
	 	[GUARANTOR]

 	 
	 	By  	 	 
	 	 	Name:  	 	 
	 	 	Title: