Exhibit 10.7


 


CREDIT AND SECURITY AGREEMENT


 


dated as of March 31, 2010


 


among


 


BIOHORIZONS, INC., BIOLOK ACQUISITION CORP., BIOHORIZONS IMPLANT
SYSTEMS, INC., BIOLOK INTERNATIONAL INC. and ORTHOGEN CORPORATION, each as
Borrower and collectively as Borrowers,


 


and


 


MIDCAP FUNDING I, LLC,


 


as Administrative Agent and as a Lender


 


and


 


THE ADDITIONAL LENDERS


 


FROM TIME TO TIME PARTY HERETO


 


[Graphic]


 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 

















 


CREDIT AND SECURITY AGREEMENT


 


THIS CREDIT AND SECURITY AGREEMENT (as the same may be
amended, supplemented, restated or otherwise modified from time to time, the “Agreement”) is dated as of March 31, 2010 by and
between BIOHORIZONS, INC., a Delaware
corporation (“Parent”), BIOLOK
ACQUISITION CORP., a Delaware corporation, BIOHORIZONS
IMPLANT SYSTEMS, INC., a Delaware corporation (“BioHorizons”),
BIOLOK INTERNATIONAL INC., a Delaware
corporation (“Biolok”), ORTHOGEN
CORPORATION, a New Jersey corporation (“Orthogen”),
and any additional borrower that may hereafter be added to this Agreement (each
individually as a “Borrower” and
collectively as “Borrowers”), MIDCAP
FUNDING I, LLC, a Delaware limited liability company, individually
as a Lender, and as Administrative Agent, and the financial institutions or
other entities from time to time parties hereto, each as a Lender.


 


RECITALS


 


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


 


Immediately
prior to entering into this Agreement, Borrowers have completed a share
exchange pursuant to which Parent no longer is the holder, directly or
indirectly, of all equity interests of DTI Holdings, Inc. and its
Subsidiaries (such transaction, the “Share Exchange”).


 


AGREEMENT


 


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


 


ARTICLE 1 - DEFINITIONS


 


Section 1.1            Certain Defined Terms.  The following terms have the following
meanings:


 


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


 


“Acceleration Event” means the occurrence of an Event of
Default (i) in respect of which Administrative Agent has declared all or
any portion of the Obligations to be immediately due and payable pursuant to Section 10.2,
(ii) pursuant to Section 10.1(a), and/or (iii) pursuant
to either Section 10.1(e) and/or Section 10.1(f).


 


“Acceptance Notice” shall have the meaning set forth in Section 4.12
hereof.


 


“Accounts” means collectively (a) any right to payment
of a monetary obligation, whether or not earned by performance, (b) without
duplication, any “account” (as defined in the UCC), any accounts receivable
(whether in the form of payments for services rendered or goods sold, rents,
license fees or otherwise), any “health-care-insurance receivables” (as defined
in the


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


UCC),
any “payment intangibles” (as defined in the UCC) and all other rights to
payment and/or reimbursement of every kind and description, whether or not
earned by performance, (c) all accounts, “general intangibles” (as defined
in the UCC), Intellectual Property, rights, remedies, Guarantees, “supporting
obligations” (as defined in the UCC), “letter-of-credit rights” (as defined in
the UCC) and security interests in respect of the foregoing, all rights of
enforcement and collection, all books and records evidencing or related to the
foregoing, and all rights under the Financing Documents in respect of the
foregoing, (d) all information and data compiled or derived by any
Borrower or to which any Borrower is entitled in respect of or related to the
foregoing, and (e) all proceeds of any of the foregoing.


 


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


 


“Affiliate” means with respect to any Person (a) any
Person that directly or indirectly controls such Person, (b) any Person
which is controlled by or is under common control with such controlling Person,
and (c) each of such Person’s (other than, with respect to any Lender, any
Lender’s) officers or directors (or Persons functioning in substantially
similar roles) and the spouses, parents, descendants and siblings of such
officers, directors or other Persons. As used in this definition, the term “control”
of a Person means the possession, directly or indirectly, of the power to vote
five percent (5%) or more of any class of voting securities of such Person or
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.


 


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


 


“Applicable Margin” means, with respect to (a) Base Rate
Loans (other than Term Loans), 4.75%, (b) LIBOR Loans (other than Term
Loans) and all other Obligations (other than Base Rate Loans) 5.75%, and (c) with
respect to any Term Loan, (i) if a Base Rate Loan, (A) during the
period from the Closing Date through September 30, 2010, 4.75%, and (B) from
and after October 1, 2010, 7.75% and (ii) if a LIBOR Loan, (A) during
the period from the Closing Date through September 30, 2010, 5.75%, and (B) from
and after October 1, 2010, 8.75%.


 


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


 


“Base LIBOR Rate” means, for each Interest Period, the rate
per annum, determined by Administrative Agent in accordance with its customary
procedures, and utilizing such electronic or other quotation sources as it
considers appropriate (rounded upwards, if necessary, to the next 1/100%), to
be the rate at which Dollar deposits (for delivery on the first day of such
Interest Period or, if such day is not a Business Day on the preceding Business
Day) in the amount of $1,000,000 are offered to major banks in the London
interbank market on or about 11:00 a.m. (Eastern time) two (2) Business
Days prior to the date on which the LIBOR Rate will be


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


3

















 


effective,
for a term comparable to such Interest Period, which determination shall be
conclusive in the absence of manifest error.


 


“Base Rate” means a per annum rate of interest equal to the
greater of (i) 4.25% per annum and (ii) the rate of interest
announced, from time to time, within Wells Fargo at its principal office in San
Francisco as its “prime rate,” with the understanding that the “prime rate” is
one of Wells Fargo’s base rates (not necessarily the lowest of such rates) and
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto and is evidenced by the recording thereof
after its announcement in such internal publications as Wells Fargo may
designate; provided that Administrative Agent may, upon prior written notice to
Borrower, choose a reasonably comparable index or source to use as the basis
for the Base Rate.


 


“Base Rate Loans” shall mean any loans or advances made
pursuant to this Agreement that bear interest based upon the Base Rate.


 


“Birmingham Location” shall mean those premises leased by
BioHorizons and located at 2300 Riverchase Center, Building 800, Birmingham,
Alabama.


 


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


 


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


 


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


 


“Borrowing Base” means:


 


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


 


(b)           the product of (i) fifty percent
(50%) multiplied by (ii) the Orderly Liquidation Value of the Eligible
Inventory; minus


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


4

















 


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


 


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


 


“Calendar Month Interest Period” means any Interest Period
commencing on the first day of a calendar month and ending on the last day of
such calendar month.


 


“Canadian Account” means, individually and collectively,
those certain deposit accounts maintained by BioHorizons at a Canadian Bank.


 


“Canadian Account Debtor” means an Account Debtor making
payments in Canadian dollars.


 


“Canadian Bank” means a Canadian depository institution
designated from time to time by Administrative Agent.


 


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


 


“Change in Control” means (a) prior to the consummation
of the Qualified Initial Public Offering, any of the following, (i) with
respect to Parent, the Permitted Holders shall fail to own and control,
directly or indirectly, at least fifty-one percent (51%) of each class of the
outstanding equity interests of Parent; (ii) any pledge, assignment or
hypothecation of or Lien or encumbrance on any of the legal or beneficial
equity interests in the applicable Person; (iii) any change in the legal
or beneficial ownership or control of the outstanding voting equity interests
of the applicable Person necessary at all times to elect a majority of the
board of directors (or similar governing body) of each such Person and to
direct the management policies and decisions of such Person; (iv) the
applicable Person shall cease to, directly or indirectly, own and control one
hundred percent (100%) of each class of the outstanding equity interests of
each Subsidiary of such Person; and (v) any “Change of Control”, “Change
in Control” or terms of similar import under any document or instrument
governing or relating to Debt of or equity in such Person; provided,
however, that acquisition of securities of Parent by any Person acting as an
underwriter of such securities for the sole purpose of reselling such
securities to other Persons as part of the Qualified Initial Public Offering
shall not constitute a Change in Control and (b) from and after the
consummation of the Qualified Initial Public Offering, any of the following, (i) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership, directly or indirectly, of, or shall have acquired by contract or
otherwise, or shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or control over,
voting stock of Parent (or other securities convertible into such voting stock)
representing 40% or more of the combined voting power of all voting stock of
Parent; (ii) a majority of the members of the Board of Directors of any of
Borrower do not constitute Continuing Directors; (iii) Parent ceases to
own, directly or indirectly, one hundred percent


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


5

















 


(100%)
of each class of the outstanding equity interests of each Subsidiary of such
Person; and (iv) any “Change of Control”, “Change in Control” or terms of
similar import under any document or instrument governing or relating to Debt
of or equity in such Person. As used herein, “beneficial ownership” shall have
the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Act.


 


“Closing Date” means the date of this Agreement.


 


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


 


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


 


“Commitment Annex” means Annex A to this Agreement.


 


“Commitment Expiry Date” means two (2) years from the
Closing Date.


 


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


 


“Consolidated Subsidiary” means at any date any Subsidiary
the accounts of which would be consolidated with those of Parent (or any other
Person, as the context may require hereunder) in its consolidated financial
statements if such statements were prepared as of such date.


 


“Contingent Obligation” means, with respect to any Person,
any direct or indirect liability of such Person:  (a) with respect to any Debt of another
Person (a “Third Party Obligation”) if the
purpose or intent of such Person incurring such liability, or the effect
thereof, is to provide assurance to the obligee of such Third Party Obligation
that such Third Party Obligation will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Third Party Obligation will be protected, in whole or in part, against loss
with respect thereto; (b) with respect to any undrawn portion of any
letter of credit issued for the account of such Person or as to which such Person
is otherwise liable for the reimbursement of any drawing; (c) under any
Swap Contract; to the extent not yet due and payable; (d) to make
take-or-pay or similar payments if required regardless of nonperformance by any
other party or parties to an agreement; or (e) for any obligations of
another Person pursuant to any Guarantee or pursuant to any agreement to
purchase, repurchase or otherwise acquire any obligation or any property
constituting security therefor, to provide funds for the payment or discharge
of such obligation or to preserve the solvency, financial condition or level of
income of another Person. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so Guaranteed or otherwise supported or,
if not a fixed and determinable amount, the maximum amount so Guaranteed or
otherwise supported.


 


“Continuing Director” of a Person means (a) any member
of the Board of Directors who was a director (or comparable manager or managing
member) of such Person on the Closing


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


6

















 


Date,
and (b) any individual who becomes a member of the Board of Directors of
such Person after the Closing Date, if such individual was appointed or
nominated for election to the Board of Directors by a majority of the
Continuing Directors, but excluding any such individual originally proposed for
election in opposition to the Board of Directors of such Person in office at
the Closing Date in an actual or threatened election contest relating to the
election of the directors (or comparable managers or managing members) of such
Person and whose initial assumption of office resulted from such contest or the
settlement thereof.


 


“Controlled Group” means all members of any group of
corporations and all members of a group of trades or businesses (whether or not
incorporated) under common control which, together with any Borrower, are
treated as a single employer under Section 414(b), (c), (m) or (o) of
the Code or Section 4001(b) of ERISA.


 


“Credit Exposure” means any period of time during which the
Revolving Loan Commitment or Term Loan Commitment is outstanding or any Loan,
Reimbursement Obligation or other Obligation remains unpaid or any Letter of
Credit or Support Agreement not supported with cash collateral required by this
Agreement remains outstanding; provided, however, that no Credit Exposure shall be deemed to exist
solely due to the existence of contingent indemnification liability, absent the
assertion of a claim with respect thereto.


 


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


 


“Cure Payment” means, at any time that a Financial Covenant
Breach occurs giving rise to a Cure Right, a payment funded exclusively from
the Net Proceeds of an issuance of equity interests (whether shares of capital
stock, warrants, options or other rights entitling the holder thereof to
acquire shares of capital stock) by Borrower Representative or the receipt of a
cash contribution to the capital of Borrower Representative, in each case the
Net Proceeds or, with respect to a cash contribution, the proceeds, of which
are used by Borrower Representative to cure such Financial Covenant Breach, in
an amount not to exceed the amount necessary to cure such Financial Covenant
Breach, which payment (to the extent not utilized to repay Loans) shall be
added to EBITDA for the purpose of computing the financial covenants for the
period with respect to which the Cure Right arose.


 


“Cure Period” means the period expiring on the fifteenth
(15th) Business Day following the date on which the certificate calculating the
financial covenants for the applicable testing period is required to be
delivered pursuant to Section 4.1.


 


“Cure Right” means the right to cure a Financial Covenant
Breach during the Cure Period by making a Cure Payment; provided, that
the Cure Right may not be exercised more than (i) two (2) times in
any period of four (4) consecutive quarters or (ii) four (4) times
during the term of this Agreement


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


7

















 


“Debt” of a Person means at any date, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising and paid on a timely basis and
in the Ordinary Course of Business, (d) all capital leases of such Person,
(e) all non-contingent obligations of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit, banker’s
acceptance or similar instrument, (f) all equity securities of such Person
subject to repurchase or redemption otherwise than at the sole option of such
Person, (g) all obligations secured by a Lien on any asset of such Person,
whether or not such obligation is otherwise an obligation of such Person, (h) “earnouts”,
purchase price adjustments, profit sharing arrangements, deferred purchase
money amounts and similar payment obligations or continuing obligations of any
nature of such Person arising out of purchase and sale contracts; (i) all
Debt of others Guaranteed by such Person; (j) off-balance sheet
liabilities and/or Pension Plan or Multiemployer Plan liabilities of such
Person; (k) obligations arising under non-compete agreements; and (1) obligations
arising under bonus, deferred compensation, incentive compensation or similar
arrangements, other than those arising in the Ordinary Course of Business.
Without duplication of any of the foregoing, Debt of Borrowers shall include
any and all Loans and Letter of Credit Liabilities.


 


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


 


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


 


“Deposit Account Control Agreement” means an agreement, in
form and substance satisfactory to Administrative Agent, among Administrative
Agent, any Borrower and each financial institution in which such Borrower
maintains a Deposit Account, which agreement provides that (a) such
financial institution shall comply with instructions originated by
Administrative Agent directing disposition of the funds in such Deposit Account
without further consent by the applicable Borrower, and (b) such financial
institution shall agree that it shall have no Lien on, or right of setoff or
recoupment against, such Deposit Account or the contents thereof, other than in
respect of usual and customary service fees and returned items for which
Administrative Agent has been given value, in each such case expressly
consented to by Administrative Agent, and containing such other terms and
conditions as Administrative Agent may require, including as to any such agreement
pertaining to any Lockbox Account, providing that such financial institution
shall wire, or otherwise transfer, in immediately available funds, on a daily
basis to the Payment Account all funds received or deposited into such Lockbox
or Lockbox Account.


 


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


 


“EBITDA” has the meaning provided in the Compliance
Certificate.


 


“Eligible Accounts” means, subject to the criteria below, an
account receivable of a Borrower, which was generated in the Ordinary Course of
Business, which was generated


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


8

















 


originally
in the name of a Borrower and not acquired via assignment or otherwise, and
which Administrative Agent, in its good faith credit judgment and discretion,
deems to be an Eligible Account.  The net
amount of Eligible Accounts at any time shall be (a) the face amount of
such Eligible Accounts (provided if not invoiced in US Dollars, converted into
US Dollars using an exchange rate selected by Administrative Agent as of the
last day of the prior calendar month) as originally billed minus all cash
collections and other proceeds of such Account received from or on behalf of
the Account Debtor thereunder as of such date and any and all returns, rebates,
discounts (which may, at Administrative Agent’s option, be calculated on
shortest terms), credits, allowances or excise taxes of any nature at any time
issued, owing, claimed by Account Debtors, granted, outstanding or payable in
connection with such Accounts at such time, and (b) adjusted by applying
percentages (known as “liquidity factors”)
by payor and/or payor class based upon the applicable Borrower’s actual recent
collection history for each such payor and/or payor class in a manner
consistent with Administrative Agent’s underwriting practices and
procedures.  Such liquidity factors may
be adjusted by Administrative Agent from time to time as warranted by
Administrative Agent’s underwriting practices and procedures and using
Administrative Agent’s good faith credit judgment.  Without limiting the generality of the
foregoing, no Account shall be an Eligible Account if:


 


(a)           the Account remains unpaid more than
one hundred and fifty (150) days past the invoice date (but in no event more
than ninety (90) days after the due date);


 


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


 


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


 


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


 


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


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


9

















 


(g)           the Account is evidenced by Chattel
Paper or an Instrument of any kind, or has been reduced to judgment, unless
such Chattel Paper or Instrument has been delivered to Administrative Agent;


 


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


 


(i)            fifty percent (50%) or more of the
aggregate unpaid Accounts from the Account Debtor obligated on the Account are
not deemed Eligible Accounts under this Agreement for any reason;


 


(j)            the total unpaid Accounts of the
Account Debtor obligated on the Account exceed twenty percent (20%) of the net
amount of all Eligible Accounts owing from all Account Debtors (but only the
amount of the Accounts of such Account Debtor exceeding such 20% limitation
shall be considered ineligible);


 


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


 


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


 


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


 


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


 


(o)           the Account Debtor has its principal
place of business or executive office outside the United States or Canada,
unless the sale is supported by an irrevocable letter of credit or is subject
to a guaranty or credit insurance, in each case acceptable to Administrative
Agent in its sole discretion;


 


(p)           the Account is payable in a currency
other than United States or Canadian dollars;


 


(q)           the Account Debtor is an individual
(other than physicians, dentists and oral surgeons);


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


10

















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 


11














 


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


 


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


 


(j)            such Inventory is located (i) outside of the
continental United States or (ii) on premises where the aggregate amount
of all Inventory (valued at cost) of Borrowers located thereon is less than
$10,000;


 


(k)           such Inventory is not located at the Birmingham Location;


 


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


 


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


 


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


 


(o)           such Inventory has an expiration date within the next six (6) months;


 


(p)           such Inventory consists of products for which Borrowers
have a greater than twelve (12) month supply on hand;


 


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


 


(r)            such Inventory is subject to any licensing, patent,
royalty, trademark, trade name or copyright agreement with any third parties,
which agreement restricts the ability of Administrative Agent or any Lender to
sell or otherwise dispose of such Inventory and for which Administrative Agent
has not received a licensor consent executed by the applicable licensor in form
and substance satisfactory to Administrative Agent; or


 


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


 


“Eligible Swap Counterparty” means Administrative Agent, any
Affiliate of Administrative Agent, any Lender and/or any Affiliate of any
Lender, that (a) at any time it occupies such role or capacity (whether or
not it remains in such capacity) enters into a Swap Contract permitted
hereunder with any Borrower, and (b) in the case of a Lender or an
Affiliate of a Lender other than Administrative Agent, maintains a reporting
system acceptable to Administrative Agent with respect to Swap Contract
exposure and agrees with Administrative


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


12

















 


Agent
to provide regular reporting to Administrative Agent, in form and substance
reasonably satisfactory to Administrative Agent, with respect to such exposure.
In addition thereto, any Affiliate of a Lender shall, upon Administrative Agent’s
request, execute and deliver to Administrative Agent a letter agreement
pursuant to which such Affiliate designates Administrative Agent as its agent
and agrees to share, pro rata, all expenses relating to liquidation of the
Collateral for the benefit of such Affiliate.


 


“Environmental Laws” means any present and future federal,
state and local laws, statutes, ordinances, rules, regulations, standards,
policies and other governmental directives or requirements, as well as common
law, pertaining to the environment, natural resources, pollution, health
(including any environmental clean up statutes and all regulations adopted by
any local, state, federal or other Governmental Authority, and any statute,
ordinance, code, order, decree, law rule or regulation all of which
pertain to or impose liability or standards of conduct concerning medical waste
or medical products, equipment or supplies), safety or clean-up that apply to
any Borrower and relate to Hazardous Materials, including, without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980 (42 U.S.C. § 9601 et seq.), the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. § 5101 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.), the Federal Insecticide, Fungicide
and Rodenticide Act (7 U.S.C. § 136 et seq.), the
Emergency Planning and Community Right-to-Know Act (42 U.S.C. § 11001 et seq.), the Occupational Safety and Health Act (29 U.S.C.
§ 651 et seq.), the Residential Lead-Based
Paint Hazard Reduction Act (42 U.S.C. § 4851 et seq.),
any analogous state or local laws, any amendments thereto, and the regulations
promulgated pursuant to said laws, together with all amendments from time to
time to any of the foregoing and judicial interpretations thereof.


 


“Environmental Liens” means all Liens and other encumbrances
imposed pursuant to any Environmental Law, whether due to any act or omission
of any Borrower or any other Person.


 


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


 


“ERISA Plan” means any “employee benefit plan”, as such term
is defined in Section 3(3) of ERISA (other than a Multiemployer
Plan), which any Borrower maintains, sponsors or contributes to, or, in the
case of an employee benefit plan which is subject to Section 412 of the
Code or Title IV of ERISA, to which any Borrower or any member of the
Controlled Group may have any liability, including any liability by reason of
having been a substantial employer within the meaning of Section 4063 of
ERISA at any time during the preceding five (5) years, or by reason of
being deemed to be a contributing sponsor under Section 4069 of ERISA.


 


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


 


“Excluded Collateral” means any Borrower’s equipment now or
hereafter subject to purchase money security interests or capital lease
financings permitted hereunder; provided, however, that, upon the termination or lapse of any lease,
agreement or contract, such Borrower


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


13

















 


shall,
automatically and without the necessity of any further action on the part of
such Borrower or any other Person, be deemed to have granted to Administrative
Agent a security interest in and Lien upon all of such Borrower’s right, title
and interest in and to any such equipment and the same shall constitute
Collateral hereunder.


 


“Fee Letter” means that certain letter agreement between
Administrative Agent and Borrowers relating to fees payable to Administrative
Agent, for its own account, in connection with the execution of this Agreement.


 


“Financial Covenant Breach” means a breach or imminent breach
of a covenant set forth in Section 6.1.


 


“Financing Documents” means this Agreement, any Notes, the
Security Documents, the Fee Letter, any subordination or intercreditor
agreement pursuant to which any Debt and/or any Liens securing such Debt is
subordinated to all or any portion of the Obligations and all other documents,
instruments and agreements (other than any Swap Contract) related to the
Obligations and heretofore executed, executed concurrently herewith or executed
at any time and from time to time hereafter, as any or all of the same may be
amended, supplemented, restated or otherwise modified from time to time.


 


“Financing Transaction” shall have the meaning set forth in Section 4.12
hereof.


 


“Fixed Charge Coverage Ratio” has the meaning provided in the
Compliance Certificate.


 


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


 


“General Intangible” means any “general intangible” as
defined in Article 9 of the UCC, and any personal property, including
things in action, other than accounts, chattel paper, commercial tort claims,
deposit accounts, documents, goods, instruments, investment property,
letter-of-credit rights, letters of credit, money, and oil, gas or other
minerals before extraction, but including payment intangibles and software.


 


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


 


“Guarantee” by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase
or 


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


14

















 


payment
of) such Debt or other obligation (whether arising by virtue of partnership
arrangements, by agreement to keep-well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement conditions or
otherwise), or (b) entered into for the purpose of assuring in any other
manner the obligee of such Debt or other obligation of the payment thereof or
to protect such obligee against loss in respect thereof (in whole or in part), provided, however, that
the term Guarantee shall not include endorsements for collection or deposit in
the Ordinary Course of Business.  The
term “Guarantee” used as a verb has a
corresponding meaning.


 


“Guarantor” means any Credit Party that has executed or
delivered, or shall in the future execute or deliver, any Guarantee of any
portion of the Obligations.


 


“Hazardous Materials” means petroleum and petroleum products
and compounds containing them, including gasoline, diesel fuel and oil; explosives,
flammable materials; radioactive materials; polychlorinated biphenyls and
compounds containing them; lead and lead-based paint; asbestos or
asbestos-containing materials; underground or above-ground storage tanks,
whether empty or containing any substance; any substance the presence is
prohibited by any Environmental Laws; toxic mold, any substance that requires
special handling; and any other material or substance now or in the future
defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic
substance,” “toxic pollutant,” “contaminant,” “pollutant” or other words of
similar import within the meaning of any Environmental Law, including: (a) any
“hazardous substance” defined as such in (or for purposes of) CERCLA., or any
so-called “superfund” or “superlien” Law, including the judicial interpretation
thereof; (b) any “pollutant or contaminant” as defined in 42 U.S.C.A. §
9601(33); (c) any material now defined as “hazardous waste” pursuant to 40
C.F.R. Part 260; (d) any petroleum or petroleum by-products,
including crude oil or any fraction thereof; (e) natural gas, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel; (f) any “hazardous
chemical” as defined pursuant to 29 C.F.R. Part 1910; (g) any toxic
or harmful substances, wastes, materials, pollutants or contaminants
(including, without limitation, asbestos, polychlorinated biphenyls (“PCB’s”), flammable explosives, radioactive materials,
infectious substances, materials containing lead-based paint or raw materials
which include hazardous constituents); and (h) any other toxic substance
or contaminant that is subject to any Environmental Laws or other past or
present requirement of any Governmental Authority.


 


“Hazardous Materials Contamination” means contamination
(whether now existing or hereafter occurring) of the improvements, buildings,
facilities, personalty, soil, groundwater, air or other elements on or of the
relevant property by Hazardous Materials, or any derivatives thereof, or on or
of any other property as a result of Hazardous Materials, or any derivatives
thereof, generated on, emanating from or disposed of in connection with the
relevant property.


 


“IP Proceeds” means all accounts, general intangibles,
license and royalty fees and other revenues, proceeds, income or rights to
payment arising out of or relating to the use, sale, licensing, financing or
disposition of any of the Intellectual Property (nothing herein implying
Administrative Agent’s consent to any such sale, licensing, financing or
disposition).


 


“Indemnitees” has the meaning set forth in Section 12.14(b).


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


15

















 


“Instrument” means “instrument”, as defined in Article 9
of the UCC.


 


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


 


“Interest Period” means (a) at the time a LIBOR Loan is
made (or a Base Rate Loan is converted to a LIBOR Loan) a one-month period and (b) beginning
on the first calendar day of the first month next succeeding the date on which
a LIBOR Loan is made or converted from a Base Rate Loan and continuing at all
times thereafter, a Calendar Month Interest Period.


 


“Inventory” means “inventory” as defined in Article 9 of
the UCC.


 


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


 


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


 


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


 


“Lender” means each of (a) MCF, in its capacity as a
lender hereunder, (b) each other Person party hereto in its capacity as a
lender hereunder, (c) each other Person that becomes a party hereto as
Lender pursuant to Section 11.17, and (d) the respective
successors of all of the foregoing, and “Lenders” means all of the
foregoing.  In addition to the foregoing,
solely for the


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


16

















 


purpose
of identifying the Persons entitled to share in payments and collections from
the Collateral as more fully set forth in this Agreement and the Security
Documents, the term “Lender” shall
include Eligible Swap Counterparties. In connection with any such distribution
of payments and collections, Administrative Agent shall be entitled to assume
that no amounts are due to any Eligible Swap Counterparty unless such Eligible
Swap Counterparty has notified Administrative Agent of the amount of any such
liability owed to it prior to such distribution.


 


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


 


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


 


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


 


“LIBOR Deadline” shall have the meaning set forth in Section 2.1(b)(iv)(B).


 


“LIBOR Loan” shall mean any Loans made pursuant to this
Agreement that bear interest based upon the LIBOR Rate.


 


“LIBOR Option” shall have the meaning set forth in Section 2.1(b)(iv)(A).


 


“LIBOR Rate” means, for each LIBOR Loan, a per annum rate of
interest equal to the greater of (i) 2.75% and (ii) the rate
determined by Administrative Agent (rounded upwards, if necessary, to the next
1/100th%) by dividing (a) the Base LIBOR Rate for the Interest Period, by (b) the
sum of one minus the daily average during such Interest Period of the aggregate
maximum reserve requirement (expressed as a decimal) then imposed under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor thereto) for “Eurocurrency Liabilities” (as defined therein).


 


“Lien” means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind, in respect of
such asset.  For the purposes of this
Agreement and the other Financing Documents, any Borrower or any Subsidiary
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


17

















 


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


 


“Loan Account” has the meaning set forth in Section 2.6(b).


 


“Loan(s)” means the Term Loan, the Revolving Loans and each
and every advance under the Term Loan, or any combination of the foregoing, as
the context may require.  All references
herein to the “making” of a Loan or words of similar import shall mean, with
respect to the Term Loan, the making of any advance in respect of a Term Loan.


 


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


 


“Lockbox Account” means an account or accounts maintained at
the Lockbox Bank into which collections of Accounts are paid, which account or
accounts shall be, if requested by Administrative Agent, opened in the name of
Administrative Agent (or a nominee of Administrative Agent); provided that, the
“Lockbox Account” shall exclude the Canadian Account.


 


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


 


“Material Adverse Effect” means with respect to any event,
act, condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, (a) a
material adverse change in, or a material adverse effect upon, any of (i) the
condition (financial or otherwise), operations, business, properties or
prospects of any of the Credit Parties, (ii) the rights and remedies of
Administrative Agent or Lenders under any Financing Document, or the ability of
any Credit Party to perform any of its obligations under any Financing Document
to which it is a party, (iii) the legality, validity or enforceability of
any Financing Document, (iv) the existence, perfection or priority of any
security interest granted in any Financing Document, or (v) the value of
any material Collateral; or (b) an impairment to the likelihood that
Eligible Accounts in general will be collected and paid in the normal course of
a Borrowers’ business and upon the same schedule and with the same frequency as
such Borrowers’ recent collections history.


 


“Material Contracts” has the meaning set forth in Section 3.17.


 


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


 


“MCF” means MidCap Funding I, LLC, and its successors.


 


“Multiemployer Plan” means a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA to which any Borrower or any
other member of the Controlled Group (or any Person who in the last five years
was a member of the Controlled Group) is making or accruing an obligation to
make contributions or has within the preceding five plan years (as determined
on the applicable date of determination) made contributions.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


18

















 


“Net Offering Proceeds” means the aggregate cash proceeds
received by Parent in respect of any public offering of the securities of
Parent net of direct costs incurred in connection therewith (including, without
limitation, commissions payable to the underwriter of such offering and related
offering expenses).


 


“Net Proceeds” means, with respect to the sale or issuance of
any equity interests in connection with a Cure Payment, the excess of (i) the
aggregate amount received in cash in connection with such sale or issuance, over
(ii) the sum of (A) the reasonable fees, commissions, discounts and
other out-of-pocket expenses including, without limitation, related legal,
investment banking and accounting fees and disbursements incurred in connection
with such issuance and payable to a Person that is not an Affiliate of Borrower
or any Credit Party, and (B) all income and transfer taxes payable in
connection with such issuance, sale or other disposition, whether payable at
such time or thereafter.


 


“Non-Funding Lender” has the meaning set forth in Section 11.18.


 


“Note” has the meaning set forth in Section 2.3.


 


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


 


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


 


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


 


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


 


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


 


“Offer” shall have the meaning set forth in Section 4.12
hereof.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


19

















 


“Operative Documents” means the Financing Documents,
Subordinated Debt Documents, and any documents effecting any purchase or sale
or contribution or other transaction that is closing contemporaneously with the
closing of the financing under this Agreement.


 


“Option Period” shall have the meaning set forth in Section 4.12
hereof.


 


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


 


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


 


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


 


“Parent” has the meaning set forth in the first paragraph of
this Agreement.


 


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


 


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


 


“PBGC” means the Pension Benefit Guaranty Corporation and any
Person succeeding to any or all of its functions under ERISA.


 


“Pension Plan” means any ERISA Plan that is subject to Section 412
of the Code or Title IV of ERISA.


 


“Permits” shall have the meaning set forth in the Regulatory
Rider.


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


20

















 


“Permitted Asset Dispositions” means the following Asset
Dispositions provided that, at the time of such Asset Disposition, no Default
or Event of Default exists or would result from such Asset Disposition: (i) dispositions
of Inventory in the Ordinary Course of Business and not pursuant to any bulk
sale, (ii) dispositions of furniture, fixtures and equipment in the
Ordinary Course of Business that the applicable Borrower or Subsidiary
determines in good faith is no longer used or useful in the business of such
Borrower and its Subsidiaries, arid (iii) dispositions approved by
Administrative Agent.


 


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


 


“Permitted Contingent Obligations” means:  (a) Contingent Obligations arising in
respect of the Debt under the Financing Documents; (b) Contingent
Obligations resulting from endorsements for collection or deposit in the
Ordinary Course of Business; (c) Contingent Obligations arising under or
with respect to any Permitted Contest or Permitted Liens; (d) Contingent
Obligations outstanding on the date of this Agreement and set forth on Schedule
5.1 (but not including any refinancings, extensions, increases or
amendments to the indebtedness underlying such Contingent Obligations other
than extensions of the maturity thereof without any other change in terms); (e) Contingent
Obligations incurred in the Ordinary Course of Business with respect to surety
and appeal bonds, security deposits, performance bonds and other similar
obligations not to exceed $250,000 in the aggregate at any time outstanding; (f) Contingent
Obligations arising under indemnity agreements with title insurers to cause
such title insurers to issue to Administrative Agent mortgagee title insurance
policies; (g) Contingent Obligations arising with respect to customary
indemnification obligations in favor of purchasers in connection with dispositions
of personal property assets permitted under Section 5.6; (h) so
long as there exists no Event of Default both immediately before and
immediately after giving effect to any such transaction, Contingent Obligations
existing or arising under any Swap Contract, provided that such obligations are
(or were) entered into by Borrower or an Affiliate in the Ordinary Course of
Business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


21














 


Person
and not for purposes of speculation; and (i) other Contingent Obligations
not permitted by clauses (a) through (h) above, not to exceed
$250,000 in the aggregate at any time outstanding.


 


“Permitted Holders” means Healthpoint Capital Partners LP, Healthpoint
Capital Partners II LP, Healthpoint Capital Partners III LP, and any Subsidiary
of the foregoing; provided, however, such term shall not
include any so-called “portfolio company” of any of such Persons or to any
so-called holding company or Subsidiary of any so-called “portfolio company”.


 


“Permitted Indebtedness” means:  (a) Borrowers’ and its Subsidiaries’
Debt to Administrative Agent and each Lender under this Agreement and the other
Financing Documents; (b) Debt incurred as a result of endorsing negotiable
instruments received in the Ordinary Course of Business; (c) purchase
money Debt not to exceed $500,000 at any time (whether in the form of a loan or
a lease) used solely to acquire equipment used in the Ordinary Course of
Business and secured only by such equipment; (d) Debt existing on the date
of this Agreement and described on Schedule 5.1 (but not including any
refinancings, extensions, increases or amendments to such Debt other than
extensions of the maturity thereof without any other change in terms); (e) Debt,
if any, arising under Swap Contracts; (f) Debt constituting financed
insurance premiums; (g) trade accounts payable arising and paid on a
timely basis and in the Ordinary Course of Business; and (h) Subordinated
Debt.


 


“Permitted Investments” means:  (a) Investments shown on Schedule 5.7
and existing on the Closing Date; (b) (i) cash equivalents, and (ii) any
similar short term Investments permitted by Borrowers’ and its Subsidiaries’
investment policies, as amended from time to time, provided that such
investment policy (and any such amendment thereto) has been approved by
Administrative Agent; (c) Investments consisting of the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
Ordinary Course of Business; (d) Investments consisting of (i) travel
advances and employee relocation loans and other employee loans and advances in
the Ordinary Course of Business, and (ii) loans to employees, officers or
directors relating to the purchase of equity securities of Borrowers or their
Subsidiaries pursuant to employee stock purchase plans or agreements approved
by Borrowers’ Board of Directors (or other governing body), but the aggregate
of all such loans outstanding may not exceed $500,000 at any time; (e) Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of customers or suppliers and in settlement of delinquent
obligations of, and other disputes with, customers or suppliers arising in the
Ordinary Course of Business; (f) Investments consisting of notes
receivable of, or prepaid royalties and other credit extensions, to customers
and suppliers who are not Affiliates, in the Ordinary Course of Business;
provided that this subpart (f) shall not apply to Investments of Borrowers
in any Subsidiary; (g) Investments consisting of deposit accounts in which
Administrative Agent has received a Deposit Account Control Agreement; (h) Investments
consisting of the acquisition of all or substantially all of the assets or
capital stock of another Person provided that, after giving effect to such
acquisition, no Event of Default has occurred and is continuing or would exist
after giving effect to such acquisition, and such acquisition would not result
in a decrease of more than ten percent (10%) of the Tangible Net Worth of the
Borrowers; (i) Investments by any Borrower in any other Borrower made in
compliance with Section 4.11(c); and (j) other Investments in
an amount not exceeding $50,000 in the aggregate.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


22

















 


“Permitted Liens” means: 
(a) deposits or pledges of cash to secure obligations under workmen’s
compensation, social security or similar laws, or under unemployment insurance
(but excluding Liens arising under ERISA) pertaining to a Borrower’s or its
Subsidiary’s employees, if any; (b) deposits or pledges of cash to secure
bids, tenders, contracts (other than contracts for the payment of money or the
deferred purchase price of property or services), leases, statutory obligations,
surety and appeal bonds and other obligations of like nature arising in the
Ordinary Course of Business; (c) carrier’s, warehousemen’s, mechanic’s,
workmen’s, materialmen’s or other like Liens on Collateral, other than
Accounts, Inventory and Intellectual Property, arising in the Ordinary Course
of Business with respect to obligations which are not due, or which are being
contested pursuant to a Permitted Contest; (d) Liens on Collateral, other
than Accounts, Inventory and Intellectual Property, for taxes or other
governmental charges not at the time delinquent or thereafter payable without
penalty or the subject of a Permitted Contest; (e) attachments, appeal
bonds, judgments and other similar Liens on Collateral other than Accounts,
Inventory and Intellectual Property, for sums not exceeding $100,000 in the
aggregate arising in connection with court proceedings; provided,
however, that the execution or other
enforcement of such Liens is effectively stayed and the claims secured thereby
are the subject of a Permitted Contest; (f) with respect to real estate,
easements, rights of way, restrictions, minor defects or irregularities of
title, none of which, individually or in the aggregate, materially interfere
with the benefits of the security intended to be provided by the Security
Documents, materially affect the value or marketability of the Collateral,
impair the use or operation of the Collateral for the use currently being made
thereof or impair Borrowers’ ability to pay the Obligations in a timely manner
or impair the use of the Collateral or the ordinary conduct of the business of
any Borrower or any Subsidiary and which, in the case of any real estate which
is part of the Collateral, are set forth as exceptions to or subordinate
matters in the title insurance policy accepted by Administrative Agent insuring
the lien of the Security Documents; (g) Liens and encumbrances in favor of
Administrative Agent under the Financing Documents; (h) Liens on
Collateral other than Accounts, Inventory and Intellectual Property existing on
the date hereof and set forth on Schedule 5.2; and (i) any Lien on
any equipment securing Debt permitted under subpart (c) of the definition
of Permitted Indebtedness provided, however, that such Lien attaches concurrently with or within
twenty (20) days after the acquisition thereof.


 


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


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


23

















 


“Pro Rata Share” means (a) with respect to a Lender’s
obligation to make advances in respect of a Term Loan and such Lender’s right
to receive payments of principal and interest with respect to the Term Loans,
the Term Loan Commitment Percentage of such Lender, ((b) with respect to a
Lender’s obligation to make Revolving Loans, such Lender’s right to receive the
unused line fee described in Section 2.2(b), such Lender’s
obligation to purchase interests and participations in Letters of Credit and
related Support Agreement liabilities and obligations, and such Lender’s
obligation to share in Letter of Credit Liabilities and to receive the related
Letter of Credit fee described in Section 2.5(b), the Revolving
Loan Commitment Percentage of such Lender, (c) with respect to a Lender’s
right to receive payments of principal and interest with respect to Revolving
Loans, such Lender’s Revolving Loan Exposure with respect thereto; and (d) for
all other purposes (including without limitation the indemnification
obligations arising under Section 11.6) with respect to any Lender,
the percentage obtained by dividing (i) the
sum of the Revolving Loan Commitment Amount and Term Loan Commitment Amount of
such Lender (or, in the event the Revolving Loan Commitment and Term Loan
Commitment shall have been terminated, such Lender’s then existing Revolving
Loan Outstandings or then outstanding principal advances of such Lender under
the Term Loan, as applicable), by (ii) the
sum of the Revolving Loan Commitment and Term Loan Commitment Amount (or, in
the event the Revolving Loan Commitment or Term Loan Commitment shall have been
terminated, the then existing Revolving Loan Outstandings or then outstanding
principal advances of such Lenders under the Term Loan, as applicable) of all
Lenders.


 


“Qualified Initial Public Offering” means a public offering
of the securities of Parent pursuant to an effective registration statement
filed under the Securities Act, that is fully underwritten pursuant to a firm
commitment contract and with respect to which the product of (a) the price
to the public per share multiplied by (b) the aggregate number of
offered shares will yield Net Offering Proceeds of at least $50,000,000.


 


“Regulatory Rider” means the Regulatory Rider dated the date
hereof among Borrowers, Administrative Agent and Lenders, as amended,
supplemented, restated or otherwise modified from time to time.


 


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


 


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


 


“Responsible Officer” means any of the Chief Executive
Officer, Chief Financial Officer or, solely with respect to a Borrowing Base
Certificate and Notice of Borrowing, Controller of the applicable Borrower.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


24

















 


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


 


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


 


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


 


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


 


“Revolving Loan Commitment” means, as of any date of
determination, the aggregate Revolving Loan Commitment Amounts of all Lenders
as of such date.


 


“Revolving Loan Commitment Amount” means, as to any Lender,
the dollar amount set forth opposite such Lender’s name on the Commitment Annex
under the column “Revolving Loan Commitment Amount” (if such Lender’s name is
not so set forth thereon, then the dollar amount on the Commitment Annex for
the Revolving Loan Commitment Amount for such Lender shall be deemed to be
zero), as such amount may be adjusted from time to time by any amounts assigned
(with respect to such Lender’s portion of Revolving Loans outstanding and its
commitment to make Revolving Loans) pursuant to the terms of any and all
effective assignment agreements to which such Lender is a party.


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


25

















 


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


 


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


 


“Revolving Loan Outstandings” means at any time of
calculation (i) the sum of the then existing aggregate outstanding
principal amount of Revolving Loans plus the then
existing Letter of Credit Liabilities and (ii) when used with reference to
any single Lender, the sum of the then existing outstanding principal amount of
Revolving Loans advanced by such Lender plus the then
existing Letter of Credit Liabilities for the account of such Lender.


 


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


 


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


 


“Securities Act” means the Securities Act of 1933, as amended
from time to time.


 


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


 


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


 


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


 


“Settlement Date” has the meaning set forth in Section 11.13(a)(ii).


 


“Solvent” means, with respect to any Person, that such Person
(a) owns and will own assets the fair saleable value of which are (i) greater
than the total amount of its liabilities (including Contingent Obligations),
and (ii) greater than the amount that will be required to pay the probable
liabilities of its then existing debts as they become absolute and matured
considering all financing alternatives and potential asset sales reasonably
available to it; and (b) does not intend to incur and does not believe
that it will incur debts beyond its ability to pay such debts as they become
due.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


26

















 


“Subordinated Debt” means any Debt of Borrowers incurred
pursuant to the terms of the Subordinated Debt Documents and with the prior
written consent of Administrative Agent, all of which documents must be in form
and substance acceptable to Administrative Agent in its sole discretion.


 


“Subordinated Debt Documents” means any documents evidencing
and/or securing Debt governed by a Subordination Agreement, all of which
documents must be in form and substance acceptable to Administrative Agent in
its sole discretion.


 


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


 


“Subsidiary” means, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of
the board of directors of such corporation (irrespective of whether, at the
time, capital stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingency) is
at the time, directly or indirectly, owned legally or beneficially by such
Person or one or more Subsidiaries of such Person, or with respect to which any
such Person has the right to vote or designate the vote of more than fifty
percent (50%) of such capital stock whether by proxy, agreement, operation of
law or otherwise, and (b) any partnership or limited liability company in
which such Person and/or one or more Subsidiaries of such Person shall have an
interest (whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%) or of which any such Person is a
general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.


 


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


 


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


 


“Swap Contract” means any “swap agreement”, as defined in Section 101
of the Bankruptcy Code, that is obtained by Borrower to provide protection
against fluctuations in interest or currency exchange rates, but only if
Administrative Agent provides its prior written consent to the entry into such “swap
agreement”.


 


“Tangible Net Worth” means, on any date, the consolidated
total assets of Borrowers and their Subsidiaries minus, (i) any amounts
attributable to (a) goodwill, (b) intangible items such as
unamortized debt discount and expense, patents, trademarks and service marks
and names, copyrights and research and development expenses except prepaid
expenses, and (c) reserves not already deducted from assets, and (ii) Total
Liabilities.


 


Portions of this Exhibit were omitted and have
been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


27

















 


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


 


“Term Loan” has the meaning set forth in Section 2.1(a).


 


“Term Loan Commitment” means the sum of each Lender’s Term
Loan Commitment Amount, which is equal to Five Million Dollars ($5,000,000.00).


 


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


 


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


 


“Term Loan Termination  Date” means the
earliest to occur of (a) June 30, 2011, (b) the date that is
five (5) Business Days after the date on which Parent commences a
Qualified Initial Public Offering (or, if earlier, the date on which the
underwriter distributes the proceeds of such Qualified Initial Public
Offering), or (c) any date on which Administrative Agent accelerates the
maturity of the Loans pursuant to Section 10.2.


 


“Termination Date” means the earlier to occur of (a) the
Commitment Expiry Date, or (b) any date on which Administrative Agent
accelerates the maturity of the Loans pursuant to Section 10.2.


 


“Total Liabilities” means, on any day, obligations that
should, under GAAP, be classified as liabilities on Borrowers’ consolidated
balance sheet, including all Debt.


 


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


 


“United States” means the United States of America.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


28

















 


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


 


Section 1.2            Accounting Terms and
Determinations.  Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder (including, without
limitation, determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder shall be
prepared on a consolidated basis in accordance with GAAP applied on a basis
consistent with the most recent audited consolidated financial statements of
each Borrower and its consolidated subsidiaries delivered to Administrative
Agent and each of the Lenders on or prior to the Closing Date.  If at any time any change in GAAP would
affect the computation of any financial ratio or financial requirement set
forth in any Financing Document, and either Borrowers or the Required Lenders
shall so request, the Administrative Agent, the Lenders and Borrowers shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the
approval of the Required Lenders); provided,
however, that until so amended, (a) such
ratio or requirement shall continue to be computed in accordance with GAAP
prior to such change therein and (b) Borrowers shall provide to the
Administrative Agent and the Lenders financial statements and other documents
required under this Agreement which include a reconciliation between
calculations of such ratio or requirement made before and after giving effect
to such change in GAAP.  All amounts used
for purposes of financial calculations required to be made herein shall be
without duplication.  Notwithstanding any
other provision contained herein, all terms of an accounting or financial
nature used herein shall be construed, and all computations of amounts and
ratios referred to herein shall be made, without giving effect to any election
under Statement of Financial Accounting Standards 159 (or any other Financial
Accounting Standard having a similar result or effect) to value any
Indebtedness or other liabilities of any Credit Party or any Subsidiary of any
Credit Party at “fair value”, as defined therein.


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


29

















 


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


 


Section 1.4            Funding and Settlement
Currency.  Unless
otherwise specified herein, the settlement of all payments and fundings
hereunder between or among the parties hereto shall be made in lawful money of
the United States and in immediately available funds.


 


Section 1.5            Riders.  All Riders attached hereto, including,
without limitation, the Regulatory Rider, are hereby incorporated herein by
this reference and made a part hereof.


 


ARTICLE 2 - LOANS AND LETTERS OF CREDIT


 


Section 2.1            Loans.


 


(a)           Term Loans.


 


(i)            Term Loan Amounts.  On the terms and subject to the conditions
set forth herein, the Lenders severally hereby agree to make to Borrowers a
term loan in an original principal amount equal to the Term Loan Commitment (“Term Loan”).  Each Lender’s obligation to fund the Term
Loan shall be limited to such Lender’s Term Loan Commitment Percentage, and no
Lender shall have any obligation to fund any portion of any Term Loan required
to be funded by any other Lender, but not so funded.  No Borrower shall have any right to reborrow
any portion of the Term Loan that is repaid or prepaid from time to time.  The Term Loan shall be funded in one advance
on the Closing Date.  Borrowers shall
deliver to Administrative Agent a Notice of Borrowing with respect to the
proposed Term Loan advance, such Notice of Borrowing to be delivered no later
than noon (Eastern time) two (2) Business Days prior to the Closing Date.


 


(ii)           Scheduled Repayments;
Mandatory Prepayments; Optional Prepayments.


 


(A)          The outstanding principal
amount of the Term Loan shall become immediately due and payable in full on the
Term Loan Termination Date.


 


(B)           There shall become due and
payable and Borrowers shall prepay the Term Loan in the following amounts and
at the following times:


 


(i)            Unless Administrative Agent shall otherwise consent
in writing, on the date on which any Credit Party (or Administrative Agent as
loss payee or assignee) receives any casualty proceeds in excess of $25,000 of
assets upon which Administrative Agent maintained a Lien, an amount equal to
one hundred percent (100%) of such proceeds (net of out-of-pocket expenses and
repayment of secured debt permitted under clause (c) of the definition of
Permitted Indebtedness and encumbering the property that suffered such
casualty), or such lesser portion of such proceeds as Administrative Agent
shall elect to apply to the Obligations;


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


30

















 


(ii)           an amount equal to any interest that is deemed to be
in excess of the Maximum Lawful Rate (as defined below) and is required to be
applied to the reduction of the principal balance of the Loans by any Lender as
provided for in Section 2.8;


 


(iii)          unless Administrative Agent shall otherwise consent
in writing, upon receipt by any Credit Party of the proceeds of any Asset
Disposition that is not made in the Ordinary Course of Business, an amount
equal to one hundred percent (100%) of the net cash proceeds of such asset
disposition (net of out-of-pocket expenses and repayment of secured debt
permitted under clause (c) of the definition of Permitted Indebtedness and
encumbering such asset), or such lesser portion as Administrative Agent shall
elect to apply to the Obligations; and


 


(iv)          unless Administrative Agent shall otherwise consent
in writing, upon receipt by any Credit Party of any extraordinary receipts or
the proceeds from the incurrence of Debt or issuance and sale of any Debt or
equity securities (including, without limitation from the Qualified Initial
Public Offering), an amount equal to one hundred percent (100%) of such
extraordinary receipts, or such lesser portion as Administrative Agent shall
elect to apply to the Obligations.


 


Notwithstanding the foregoing and so long as no
Event of Default or Default then exists: (1) any such casualty proceeds in
excess of $250,000 (other than with respect to Inventory and any real property,
unless Administrative Agent shall otherwise elect) may be used by Borrowers
within one hundred eighty (180) days from the receipt of such proceeds to
replace or repair any assets in respect of which such proceeds were paid so
long as (x) prior to the receipt of such proceeds, Borrowers have
delivered to Administrative Agent a reinvestment plan detailing such
replacement or repair acceptable to Administrative Agent in its reasonable
discretion and (y) such proceeds are deposited into an account with
Administrative Agent promptly upon receipt by such Borrower; and (2) proceeds
of personal property asset dispositions that are not made in the Ordinary
Course of Business (other than Collateral upon which the Borrowing Base is
calculated or Intellectual Property, unless Administrative Agent shall
otherwise elect) may be used by Borrowers within one hundred eighty (180) days
from the receipt of such proceeds to purchase new or replacement assets of
comparable value provided that such proceeds are deposited into an account with
Administrative Agent promptly upon receipt by such Borrower.  All sums held by Administrative Agent pending
reinvestment as described in subsections (1) and (2) above shall be
deemed additional collateral for the Obligations and may be commingled with the
general funds of Administrative Agent.


 


(C)           Borrowers may from time to
time, with at least two (2) Business Days prior delivery to Administrative
Agent of an appropriately completed Payment Notification, prepay the Term Loan
in whole or in part; provided, however, that each such prepayment shall be in
an amount equal to $100,000 or a higher integral multiple of $25,000 and shall
be accompanied by any prepayment fees required hereunder.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


31














 


(iii)          All Prepayments.  Except as this Agreement may specifically
provide otherwise, all prepayments of the Term Loan shall be applied by
Administrative Agent to the Obligations in inverse order of maturity.  The monthly payments required under Schedule
2.1 shall continue in the same amount (for so long as the Term Loan and/or (if
applicable) any advance thereunder shall remain outstanding) notwithstanding
any partial prepayment, whether mandatory or optional, of the Term Loan.


 


(iv)          LIBOR Rate.


 


(A)          Except as provided in
subsection (B) below, the Term Loan shall be a LIBOR Loan.


 


(B)           In the event that any change
in market conditions or any law, regulation, treaty, or directive, or any
change therein or in the interpretation of application thereof; shall at any
time after the date hereof, in the reasonable opinion of any Lender, make it
unlawful or impractical for such Lender to maintain LIBOR Loans or to continue
such maintaining, or to determine or charge interest rates at the LIBOR Rate, (x) such
Lender shall give notice of such changed circumstances to Administrative Agent
and Borrowers and Administrative Agent promptly shall transmit the notice to
each other Lender, (y) in the case of the pro rata share of the Term Loan
held by such Lender and then outstanding, the date specified in such Lender’s
notice shall be deemed to be the last day of the Interest Period of such
portion of the Term Loan, and interest upon such portion thereafter shall
accrue interest at the rate then applicable to Base Rate Loans, and (z) such
portion of the Term Loan shall remain a Base Rate Loan until such Lender
determines that it would no longer be unlawfUl or impractical to do so.


 


(C)           Anything to the contrary contained herein
notwithstanding, neither Administrative Agent nor any Lender is required
actually to acquire eurodollar deposits to fund or otherwise match fund any
Obligation as to which interest accrues based on the LIBOR Rate.


 


(b)           Revolving Loans.


 


(i)            Revolving Loans and
Borrowings.  On the
terms and subject to the conditions set forth herein, each Lender severally
agrees to make Loans to Borrowers from time to time as set forth herein (each a
“Revolving Loan”, and
collectively, “Revolving Loans”)
equal to such Lender’s Revolving Loan Commitment Percentage of Revolving Loans
requested by Borrowers hereunder, provided, however, that after giving effect thereto, the Revolving
Loan Outstandings shall not exceed the Revolving Loan Limit. Borrowers shall
deliver to Administrative Agent a Notice of Borrowing with respect to each
proposed Revolving Loan Borrowing, such Notice of Borrowing to be delivered no
later than 1:00 P.M. (Eastern Time) two (2) Business Days prior to
the date of such proposed borrowing (or, if Borrowers are requesting LIBOR
Loans, not later than the LIBOR Deadline). 
Each Borrower and each Revolving Lender hereby authorizes Administrative
Agent to make Revolving Loans on behalf of Revolving Lenders, at any 


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


32

















 


time in its sole discretion, (A) as provided in
Section 2.5(c), with respect to obligations arising under Support
Agreements and/or Lender Letters of Credit, and (B) to pay principal owing
in respect of the Loans and interest, fees, expenses and other charges payable
by any Credit Party from time to time arising under this Agreement or any other
Financing Document.  The Borrowing Base
shall be determined by Administrative Agent based on the most recent Borrowing
Base Certificate delivered to Administrative Agent in accordance with this
Agreement and such other information as may be available to Administrative
Agent.  Without limiting any other rights
and remedies of Administrative Agent hereunder or under the other Financing
Documents, the Revolving Loans shall be subject to Administrative Agent’s
continuing right to withhold from the Borrowing Base reserves, and to increase
and decrease such reserves from time to time, if and to the extent that in
Administrative Agent’s good faith credit judgment and discretion, such reserves
are necessary.  Administrative Agent
further shall adjust the Borrowing Base to limit the portion thereof relating
to the Orderly Value of Eligible Inventory to not more than forty percent (40%)
of the Borrowing Base at all times. 
Notwithstanding anything to the contrary set forth in this Section 2.1(b),
if Borrowers request a LIBOR Loan in the Notice of Borrowing, Borrowers also
shall have satisfied the conditions set forth in Section 2.1(b)(iv) with
respect to the funding of LIBOR Loans.


 


(ii)           Mandatory Revolving Loan Repayments and Prepayments.


 


(A)          The Revolving Loan
Commitment shall terminate on the Termination Date.  On such Termination Date, there shall become
due, and Borrowers shall pay, the entire outstanding principal amount of each
Revolving Loan, together with accrued and unpaid Obligations pertaining
thereto, including without limitation accrued and unpaid interest thereon to,
but excluding, the Termination Date.


 


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


 


(C)           Principal payable on account
of Revolving Loans shall be payable by Borrowers to Administrative Agent (A) immediately
upon the receipt by any Borrower or Administrative Agent of any payments on or
proceeds from any of the Accounts, to the extent of such payments or proceeds,
as further described in Section 2.11 below, and (B) in full on
the Termination Date.


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


33

















 


(iv)          LIBOR Option.


 


(A)          In lieu of having interest
charged at the rate based upon the Base Rate, Borrowers shall have the option
(the “LIBOR Option”) to have
interest on all or a portion of the Revolving Loans be charged at a rate of
interest based upon the LIBOR Rate.  If
Borrowers previously shall have exercised the LIBOR Option as to all or a
portion of the Revolving Loans hereunder, except to the extent as otherwise
provided in this Agreement or if Borrowers shall have notified Administrative
Agent in writing before the applicable LIBOR Deadline of its intention to
convert such LIBOR Loan into a Base Rate Loan, each LIBOR Loan shall be
continued without further action by Borrowers, Administrative Agent or any
Lender as a LIBOR Loan with a Calendar Month Interest Period.  At any time that an Event of Default has
occurred and is continuing, Borrowers no longer shall have the option to
request that Revolving Loans bear interest at a rate based upon the LIBOR Rate
and Administrative Agent shall have the right to convert the interest rate on
all outstanding LIBOR Loans to the rate then applicable to Base Rate Loans
hereunder. Borrowers may prepay all or part of any LIBOR Loan at any time.


 


(B)           Borrowers may, at any time
and from time to time, so long as no Event of Default has occurred and is
continuing, elect to exercise the LIBOR Option by notifying Administrative
Agent prior to 1:00 P.M. (Eastern time) on the date that is at least four (4) Business
Days prior to the following (such 1:00 P.M. deadline on the applicable
date is referred to as the “LIBOR Deadline”):  (i) the effectiveness of Borrowers’
exercise of the LIBOR Option as to all, or a specified portion of, the Loans in
the case of any Base Rate Loans to be converted into LIBOR Loans or (ii) the
date of the proposed borrowing of a LIBOR Loan from the initial date of such
Revolving Loan.  Notice of Borrowers’
election of the LIBOR Option for a permitted portion of the Revolving Loans
pursuant to this Section shall be made by delivery to Administrative Agent
of a Loan Request received by Administrative Agent before the LIBOR Deadline, or
by telephonic or email notice received by Administrative Agent before the LIBOR
Deadline (to be confirmed by delivery to Administrative Agent of a Notice of
Borrowing.


 


(C)           The LIBOR Rate for each
LIBOR Loan shall be set two (2) Business Days prior to the date of the
initial advance of a LIBOR Loan (or, in the case of the exercise of a LIBOR
Option with respect to all or part of an outstanding Base Rate Loan, two (2) Business
Days prior to the date on which the LIBOR Option is exercised with respect to such
Loans).  From and after the first day of
the next calendar month after the LIBOR Option is exercised and continuing
thereafter, except to the extent as otherwise provided in the Agreement or if
Borrowers shall have notified Administrative Agent in writing before the
applicable LIBOR Deadline of its intention to convert such LIBOR Loan into a
Base Rate Loan, the LIBOR Rate shall be adjusted to the LIBOR Rate for a
Calendar Month Interest Period determined by Administrative Agent on the second
full Business Day next preceding the first day of each calendar month.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


34

















 


(D)          The LIBOR Rate may be
adjusted by Administrative Agent with respect to any Lender on a prospective
basis to take into account any additional or increased costs to such Lender of
maintaining or obtaining any eurodollar deposits or increased costs, in each
case, due to changes in Applicable Law occurring subsequent to the commencement
of the then applicable Interest Period, including changes in tax laws (except
changes of general applicability in corporate income tax laws) and changes in
the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), which additional or increased costs would
increase the cost of funding loans bearing interest at the LIBOR Rate. In any
such event, the affected Lender shall give Borrowers and Administrative Agent
notice of such a determination and adjustment and Administrative Agent promptly
shall transmit the notice to each other Lender and, upon its receipt of the
notice from the affected Lender, Borrowers may, by notice to such affected
Lender (y) require such Lender to furnish to Borrowers a statement setting
forth the basis for adjusting such LIBOR Rate and the method for determining
the amount of such adjustment, or (z) repay the LIBOR Rate Loans with
respect to which such adjustment is made.


 


(E)           In the event that any change
in market conditions or any law, regulation, treaty, or directive, or any
change therein or in the interpretation of application thereof, shall at any
time after the date hereof, in the reasonable opinion of any Lender, make it
unlawful or impractical for such Lender to fund or maintain LIBOR Rate Loans or
to continue such funding or maintaining, or to determine or charge interest
rates at the LIBOR Rate, such Lender shall give notice of such changed
circumstances to Administrative Agent and Borrowers and Administrative Agent
promptly shall transmit the notice to each other Lender and (y) in the
case of any LIBOR Loans of such Lender that are outstanding, the date specified
in such Lender’s notice shall be deemed to be the last day of the Interest
Period of such LIBOR Loans, and interest upon the LIBOR Loans of such Lender
thereafter shall accrue interest at the rate then applicable to Base Rate
Loans, and (z) Borrower shall not be entitled to elect the LIBOR Option
until such Lender determines that it would no longer be unlawful or impractical
to do so.


 


(F)           Anything to the contrary
contained herein notwithstanding, neither Administrative Agent nor any Lender
is required actually to acquire eurodollar deposits to fund or otherwise match
fund any Obligation as to which interest accrues based on the LIBOR Rate.


 


(v)           Commitment Reduction.  After the first anniversary of the Closing
Date, Borrowers may at any time reduce the Revolving Loan Commitment to
$10,000,000 without fee or penalty; provided that Borrowers shall not reduce
the Revolving Loan Commitment Amount if, after giving effect to such reduction
and any prepayment of Revolving Loans made in connection therewith, (A) the
sum of the outstanding balance of Revolving Loans would exceed the Revolving
Loan Commitment, or (B) the sum of the outstanding balance of Revolving
Loans would exceed the then-current Borrowing Base. Borrowers shall notify
Administrative Agent of any election to reduce the Revolving Loan Commitment
under this section at least three (3) Business 


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


35

















 


Days prior to the effective date of such reduction,
specifying such election and the effective date thereof.  Each notice delivered by Borrowers pursuant
to this Section 2.1(b)(v) shall be irrevocable.  No reduction of the Revolving Loan Commitment
shall entitle the Borrowers to require Administrative Agent to release its
Liens on, and security interests in, any Collateral unless the Revolving Loan
Commitment is terminated in connection therewith and all Obligations have been
fully and finally paid and satisfied. Administrative Agent will promptly notify
the Lenders of any reduction of the Revolving Loan Commitment under this Section 2.1(b)(v).  Upon any reduction of the Revolving Loan
Commitment, each Lender’s Revolving Loan Commitment Amount shall be reduced by
a proportionate amount so as to maintain the same Pro Rata Percentage of the
Revolving Loan Commitment as such Lender held immediately prior to such
reduction.


 


Section 2.2            Interest, Interest
Calculations and Certain Fees.


 


(a)           Interest.  From and following the Closing Date, (i) LIBOR
Loans and the other Obligations (other than Base Rate Loans) shall bear
interest at the sum of the LIBOR Rate plus the Applicable Margin and (ii) Base
Rate Loans shall bear interest at the sum of the Base Rate plus the Applicable
Margin.  Interest on the Loans shall be paid
in arrears on the first (1st) day of each month and on the maturity of such
Loans, whether by acceleration or otherwise. Interest on all other Obligations
shall be payable upon demand.  For
purposes of calculating interest, all funds transferred from the Payment
Account for application to any Revolving Loans or the Term Loan shall be
subject to a six Business Day clearance period and all interest accruing on
such funds during such clearance period shall accrue for the benefit of
Administrative Agent, and not for the benefit of the Lenders.


 


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


 


(c)           Exit Fee.  Borrowers shall pay to Administrative Agent,
for the benefit of all Lenders committed to make Term Loan advances, as
compensation for the costs of making funds available to Borrowers under this
Agreement an exit fee (the “Exit Fee”)
calculated in accordance with this subsection and upon the date or dates
required under this subsection. The Exit Fee shall be equal to $450,000. Upon
any repayment of any portion of the Term Loan (whether voluntary, involuntary or
mandatory) a portion of the Exit Fee shall be due in the following amount: that
percentage which is obtained by dividing the amount prepaid by the then
outstanding principal balance of the Term Loan. 
Any remaining unpaid amount of the Exit Fee shall be due and payable on
the Term Loan Termination Date.  All fees
payable pursuant to this paragraph shall be deemed fully accrued and earned as
of the Closing Date.


 


(d)           Fee Letter.  In addition to the other fees set forth
herein, the Borrowers agree to pay Administrative Agent the fees set forth in
the Fee Letter.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


36

















 


(e)           Audit Fees.  Borrowers shall pay to Administrative Agent,
for its own account and not for the benefit of any other Lenders, all
reasonable fees and expenses in connection with audits of Borrowers’ books and
records, audits, valuations or appraisals of the Collateral, audits of
Borrowers’ compliance with applicable Laws and such other matters as
Administrative Agent shall deem appropriate, which shall be due and payable on
the first Business Day of the month following the date of issuance by
Administrative Agent of a written request for payment thereof to Borrowers.


 


(f)            Wire Fees.  Borrowers shall pay to Administrative Agent,
for its own account and not for the account of any other Lenders, on written
demand, fees for incoming and outgoing wires made for the account of Borrowers,
such fees to be based on Administrative Agent’s then current wire fee schedule
(available upon written request of the Borrowers).


 


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


 


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


 


(i)            Automated Clearing House
Payments.  If
Administrative Agent so elects, monthly payments of interest shall be paid to
Administrative Agent by Automated Clearing House debit of immediately available
funds from the financial institution account designated by Borrower
Representative in the Automated Clearing House debit authorization executed by
Borrowers or Borrower Representative in connection with this Agreement, and
shall be effective upon receipt. Borrowers shall execute any and all forms and
documentation necessary from time to time to effectuate such automatic
debiting. In no event shall any such payments be refunded to Borrowers.


 


(j)            Prepayment Fee.  If Lenders’ funding obligations in respect of
the Revolving Loan Commitment under this Agreement terminate for any reason
(whether by voluntary termination by Borrowers, by reason of the occurrence of
an Event of Default or otherwise) prior to the Commitment Expiry Date,
Borrowers shall pay to Administrative Agent, for the benefit of all Lenders
committed to make Revolving Loans on the Closing Date, a fee as compensation
for the costs of such Lenders being prepared to make funds available to
Borrowers under this Agreement, equal to an amount determined by multiplying
the Revolving Loan Commitment that was in effect on the Closing Date by the
following applicable percentage amount: 
five percent (5.0%) for the first year following the Closing Date, and
three percent  


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


37

















 


(3.0%) for the second year
following the Closing Date.  All fees
payable pursuant to this paragraph shall be deemed fully earned and
non-refundable as of the Closing Date.


 


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


 


Section 2.4            RESERVED.


 


Section 2.5            Letters of Credit and Letter
of Credit Fees.


 


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


 


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


 


(ii)           after giving effect to such
issuance, increase or extension, (A) the aggregate Letter of Credit
Liabilities under all Letters of Credit do not exceed $0, and (B) the
Revolving Loan Outstandings do not exceed the Revolving Loan Limit.


 


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


 


Notwithstanding
anything to the contrary set forth herein, Borrowers agree and acknowledge that
no part of the Revolving Loan Commitment will be available for the issuance of
a Letter of Credit until such times as Administrative Agent notifies Borrower
Representative that a Lender party to this Agreement is an LC Issuer.


 


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


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


38

















 


pay promptly to the LC
Issuer any fronting or other fees that it may charge in connection with any
Letter of Credit.


 


(c)           Reimbursement Obligations of
Borrowers.  If either (i) Administrative
Agent shall make a payment to an LC Issuer pursuant to a Support Agreement, or (ii) any
Lender shall notify Administrative Agent that it has made payment in respect of
a Lender Letter of Credit, (A) the applicable Borrower shall reimburse
Administrative Agent or such Lender, as applicable, for the amount of such
payment by the end of the day on which Administrative Agent or such Lender
shall make such payment and (B) Borrowers shall be deemed to have
immediately requested that Revolving Lenders make a Revolving Loan, in a
principal amount equal to the amount of such payment (but solely to the extent
such Borrower shall have failed to directly reimburse Administrative Agent or,
with respect to Lender Letters of Credit, the applicable LC Issuer, for the
amount of such payment).  Administrative
Agent shall promptly notify Revolving Lenders of any such deemed request and
each Revolving Lender (other than any such Revolving Lender that was a
Non-Funding Lender at the time the applicable Supported Letter of Credit or
Lender Letter of Credit was issued) hereby agrees to make available to Administrative
Agent not later than noon (Eastern time) on the Business Day following such
notification from Administrative Agent such Revolving Lender’s Pro Rata Share
of such Revolving Loan.  Each Revolving
Lender (other than any applicable Non-Funding Lender specified above) hereby
absolutely and unconditionally agrees to fund such Revolving Lender’s Pro Rata
Share of the Loan described in the immediately preceding sentence., unaffected
by any circumstance whatsoever, including, without limitation, (x) the
occurrence and continuance of a Default or Event of Default, (y) the fact
that, whether before or after giving effect to the making of any such Revolving
Loan, the Revolving Loan Outstandings exceed or will exceed the Revolving Loan
Limit, and/or (z) the non-satisfaction of any conditions set forth in Section 7.2.
Administrative Agent hereby agrees to apply the gross proceeds of each
Revolving Loan deemed made pursuant to this Section 2.5(c) in
satisfaction of Borrowers’ reimbursement obligations arising pursuant to this Section 2.5(c).  Borrowers shall pay interest, on demand, on
all amounts so paid by Administrative Agent pursuant to any Support Agreement
or to any applicable Lender in honoring a draw request under any Lender Letter
of Credit for each day from the date of such payment until Borrowers reimburse
Administrative Agent or the applicable Lender therefore (whether pursuant to
clause (A) or (B) of the first sentence of this subsection (c)) at a
rate per annum equal to the sum of two percent (2%) plus the interest rate
applicable to Revolving Loans for such day.


 


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


 


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


 


(ii)           the existence of any claim,
set-off, defense or other right which any Borrower may have at any time against
the beneficiary of any Letter of Credit, the LC Issuer (including any claim for
improper payment), Administrative Agent, any 


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


39

















 


Lender or any other Person, whether in connection
with any Financing Document or any unrelated transaction, provided,
however, that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;


 


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


 


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


 


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


 


(e)           Deposit Obligations of
Borrowers.  In the
event any Letters of Credit are outstanding at the time that Borrowers prepay
in full or are required to repay the Obligations or the Revolving Loan
Commitment is terminated, Borrowers shall (i) deposit with Administrative
Agent for the benefit of all Revolving Lenders cash in an amount equal to one
hundred and ten percent (110%) of the aggregate outstanding Letter of Credit
Liabilities to be available to Administrative Agent, for its benefit and the
benefit of issuers of Letters of Credit, to reimburse payments of drafts drawn
under such Letters of Credit and pay any fees and expenses related thereto, and
(ii) prepay the fee payable under Section 2.5(b) with
respect to such Letters of Credit for the full remaining terms of such Letters
of Credit assuming that the full amount of such Letters of Credit as of the
date of such repayment or termination remain outstanding until the end of such
remaining terms.  Upon termination of any
such Letter of Credit and provided no Event of Default has occurred and is
continuing, the unearned portion of such prepaid fee attributable to such
Letter of Credit shall be refunded to Borrowers, together with the deposit
described in the preceding clause (i) to the extent not previously applied
by Administrative Agent in the manner described herein.


 


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


 


(i)            Concurrently with the
issuance of each Supported Letter of Credit, Administrative Agent shall be
deemed to have sold and transferred to each Revolving Lender, and each such
Revolving Lender shall be deemed irrevocably and immediately to have purchased
and received from Administrative Agent, without recourse or warranty, an
undivided interest and participation in, to the extent of such Lender’s Pro
Rata Share, Administrative Agent’s Support Agreement liabilities and
obligations in respect of such Supported Letter of Credit and Borrowers’
Reimbursement Obligations with respect thereto. 
Concurrently with the issuance of each Lender Letter of Credit, the LC
Issuer in respect thereof shall be deemed to have sold and transferred to each
Revolving Lender, and each such Revolving Lender shall be deemed irrevocably
and immediately to have purchased and received from such LC Issuer, without
recourse or warranty, an undivided interest and participation in, to the extent
of such Lender’s Pro Rata Share, such Lender Letter of Credit and Borrowers’
Reimbursement Obligations with respect thereto. 
Any purchase obligation arising pursuant to the immediately two
preceding sentences shall be absolute and unconditional and shall not be
affected by any circumstances whatsoever.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


40

















 


(ii)           If either (x) Administrative
Agent makes any payment or disbursement under any Support Agreement and/or (y) an
LC Issuer makes any payment or disbursement under any Lender Letter of Credit,
and (A) Borrowers have not reimbursed Administrative Agent or the
applicable LC Issuer, as applicable, in full for such payment or disbursement
in accordance with Section 2.5(c), or (B) any reimbursement
under any Support Agreement or Lender Letter of Credit received by
Administrative Agent or any LC Issuer, as applicable, from any Credit Party is
or must be returned or rescinded upon or during any bankruptcy or
reorganization of any Credit Party or otherwise, each Revolving Lender shall be
irrevocably and unconditionally obligated to pay to Administrative Agent or the
applicable LC Issuer, as applicable, its Pro Rata Share of such payment or
disbursement (but no such payment shall diminish the Obligations of Borrowers
under Section 2.5(c)).  To
the extent any such Revolving Lender shall not have made such amount available
to Administrative Agent or the applicable LC Issuer, as applicable, by 12:00 p.m.
(Eastern time) on the Business Day on which such Lender receives notice from
Administrative Agent or the applicable LC Issuer, as applicable, of such
payment or disbursement, or return or rescission, as applicable, such Lender
agrees to pay interest on such amount to Administrative Agent or the applicable
LC Issuer, as applicable, forthwith on demand accruing daily at the Federal
Funds Rate, for the first three (3) days following such Lender’s receipt
of such notice, and thereafter at the Base Rate plus the Base Rate Margin in
respect of Revolving Loans. Any such Revolving Lender’s failure to make
available to Administrative Agent or the applicable LC Issuer, as applicable,
its Pro Rata Share of any such payment or disbursement, or return or
rescission, as applicable, shall not relieve any other Lender of its obligation
hereunder to make available such other Revolving Lender’s Pro Rata Share of
such payment, but no Revolving Lender shall be responsible for the failure of
any other Lender to make available such other Lender’s Pro Rata Share of any
such payment or disbursement, or return or rescission.


 


Section 2.6            General Provisions Regarding
Payment; Loan Account.


 


(a)           All payments to be made by
each Borrower under any Financing Document, including payments of principal and
interest made hereunder and pursuant to any other Financing Document, and all
fees, expenses, indemnities and reimbursements, shall be made without set-off,
recoupment or counterclaim, in lawful money of the United States and in
immediately available funds.  If any
payment hereunder becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension (it being understood and agreed that,
solely for purposes of calculating financial covenants and computations
contained herein and determining compliance therewith, if payment is made, in
full, on any such extended due date, such payment shall be deemed to have been
paid on the original due date without giving effect to any extension
thereto).  Any payments received in the
Payment Account before 12:00 p.m. (Eastern time) on any date shall be
deemed received by Administrative Agent on such date, and any payments received
in the Payment Account after 12:00 p.m. (Eastern time) on any date shall
be deemed received by Administrative Agent on the next succeeding Business
Day.  In the absence of receipt by
Administrative Agent of a written designation by Borrower Representative, at
least two (2) Business Days prior to such prepayment, that such prepayment
is to be applied to a Term Loan, Borrowers and each Lender


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


41














 


hereby authorize and direct
Administrative Agent, subject to the provisions of Section 10.6  hereof, to apply such prepayment against then
outstanding Revolving Loans, and second, if no Revolving Loans are then
outstanding, pro rata against all outstanding Term Loans in accordance with the
provisions of Section 2.1(a)(iii); provided, that if Administrative
Agent at any time determines that payments received by Administrative Agent
were in respect of a mandatory prepayment event, Administrative Agent shall apply
such payments in accordance with the provisions of Section 2.1(a)(ii) and
shall be fully authorized by Borrowers and each Lender to make corresponding
Loan Account Reversals in respect thereof.


 


(b)           Administrative Agent shall
maintain a loan account (the “Loan Account”)
on its books to record Loans and other extensions of credit made by the Lenders
hereunder or under any other Financing Document, and all payments thereon made
by each Borrower. All entries in the Loan Account shall be made in accordance
with Administrative Agent’s customary accounting practices as in effect from
time to time.  The balance in the Loan
Account, as recorded in Administrative Agent’s books and records at any time
shall be conclusive and binding evidence of the amounts due and owing to
Administrative Agent by each Borrower absent manifest error; provided, however, that
any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower’s duty to pay all amounts owing hereunder or
under any other Financing Document. 
Administrative Agent shall endeavor to provide Borrowers with a monthly
statement regarding the Loan Account (but neither Administrative Agent nor any
Lender shall have any liability if Administrative Agent shall fail to provide any
such statement).  Unless any Borrower
notifies Administrative Agent of any objection to any such statement
(specifically describing the basis for such objection) within ninety (90) days
after the date of receipt thereof, it shall be deemed final, binding and
conclusive upon Borrowers in all respects as to all matters reflected therein.


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


42

















 


computing interest payable with reference to
the Maximum Lawful Rate applicable to any Lender, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made.


 


Section 2.8            Taxes; Capital Adequacy.


 


(a)           All payments of principal
and interest on the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp, documentary, payroll, employment, property or franchise taxes
and other taxes, fees, duties, levies, assessments, withholdings or other
charges of any nature whatsoever (including interest and penalties thereon)
imposed by any taxing authority, excluding taxes imposed on or measured by
Administrative Agent’s or any Lender’s net income by the jurisdictions under
which Administrative Agent or such Lender is organized or conducts business
(other than solely as the result of entering into any of the Financing Documents
or taking any action thereunder) (all non-excluded items being called “Taxes”). 
If any withholding or deduction from any payment to be made by any
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable Law, then Borrowers will:  (i) pay
directly to the relevant authority the full amount required to be so withheld
or deducted; (ii) promptly forward to Administrative Agent an official
receipt or other documentation satisfactory to Administrative Agent evidencing
such payment to such authority; and (iii) pay to Administrative Agent for
the account of Administrative Agent and Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually received by
Administrative Agent and each Lender will equal the full amount Administrative
Agent and such Lender would have received had no such withholding or deduction
been required.  If any Taxes are directly
asserted against Administrative Agent or any Lender with respect to any payment
received by Administrative Agent or such Lender hereunder, Administrative Agent
or such Lender may pay such Taxes and Borrowers will promptly pay such
additional amounts (including any penalty, interest or expense) as is necessary
in order that the net amount received by such Person after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount
such Person would have received had such Taxes not been asserted so long as
such amounts have accrued on or after the day which is one hundred eighty (180)
days prior to the date on which Administrative Agent or such Lender first made
written demand therefor.


 


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


 


(c)           Each Lender that (i) is
organized under the laws of a jurisdiction other than the United States, and
(ii)(A) is a party hereto on the Closing Date or (B) purports to
become an assignee of an interest as a Lender under this Agreement after the
Closing Date (unless such Lender was already a Lender hereunder immediately
prior to such assignment) (each such Lender a “Foreign Lender”) shall execute and deliver to each of
Borrowers and Administrative Agent one or more (as Borrowers or Administrative
Agent may reasonably request) United States Internal Revenue Service Forms
W-8ECI, W-8BEN, W-8IMY (as 


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


43

















 


applicable) and other
applicable forms, certificates or documents prescribed by the United States
Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender’s entitlement to a complete exemption from
withholding or deduction of Taxes. Borrowers shall not be required to pay
additional amounts to any Lender pursuant to this Section 2.8 with
respect to United States withholding and income Taxes to the extent that the
obligation to pay such additional amounts would not have arisen but for the
failure of such Lender to comply with this paragraph other than as a result of
a change in law.


 


(d)           If any Lender shall
determine in its commercially reasonable judgment that the adoption or taking
effect of, or any change in, any applicable Law regarding capital adequacy, in
each instance, after the Closing Date, or any change after the Closing Date in
the interpretation, administration or application thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation,
administration or application thereof, or the compliance by any Lender or any
Person controlling such Lender with any request, guideline or directive
regarding capital adequacy (whether or not having the force of law) of any such
Governmental Authority, central bank or comparable agency adopted or otherwise
taking effect after the Closing Date, has or would have the effect of reducing
the rate of return on such Lender’s or such controlling Person’s capital as a
consequence of such Lender’s obligations hereunder or under any Support
Agreement or Lender Letter of Credit to a level below that which such Lender or
such controlling Person could have achieved but for such adoption, taking
effect, change, interpretation, administration, application or compliance
(taking into consideration such Lender’s or such controlling Person’s policies
with respect to capital adequacy) then from time to time, upon written demand
by such Lender (which demand shall be accompanied by a statement setting forth
the basis for such demand and a calculation of the amount thereof in reasonable
detail, a copy of which shall be furnished to Administrative Agent), Borrowers
shall promptly pay to such Lender such additional amount as will compensate
such Lender or such controlling Person for such reduction, so long as such
amounts have accrued on or after the day which is one hundred eighty (180) days
prior to the date on which such Lender first made demand therefor.


 


(e)           If any Lender requires
compensation under Section 2.8(d), or requires any Borrower to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.8(a), then, upon the
written request of Borrower Representative, such Lender shall use reasonable
efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder (subject to
the terms of this Agreement) to another of its offices, branches or affiliates,
if, in the judgment of such Lender, such designation or assignment (i) would
eliminate or materially reduce amounts payable pursuant to any such subsection,
as the case may be, in the future, and (ii) would not subject such Lender
to any unreimbursed cost or expense and would not otherwise be disadvantageous
to such Lender (as determined in its sole discretion). Borrowers hereby agree
to pay all reasonable costs and expenses incurred by any Lender in connection
with any such designation or assignment.


 


Section 2.9            Appointment of Borrower
Representative.  Each
Borrower hereby designates Borrower Representative as its representative and
agent on its behalf for the purposes of issuing Notices of Borrowing, Notices
of LC Credit Events and Borrowing Base Certificates, and giving instructions
with respect to the disbursement of the proceeds of the Loans, requesting 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


44

















 


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


 


Section 2.10         Joint and Several Liability;
Rights of Contribution; Subordination and Subrogation.


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


45

















 


individual Person named as
one of the Borrowers herein (as well as to all such Persons taken as a whole),
such that the occurrence of any of the events described in Section 10.1
of this Agreement as to any Person named as one of the Borrowers herein shall
constitute an Event of Default even if such event has not occurred as to any
other Persons named as the Borrowers or as to all such Persons taken as a
whole.


 


(b)           Notwithstanding any
provisions of this Agreement to the contrary, it is intended that the joint and
several nature of the liability of each Borrower for the Obligations and the
Liens granted by Borrowers to secure the Obligations, not constitute a
Fraudulent Conveyance (as defined below). 
Consequently, Administrative Agent, Lenders and each Borrower agree that
if the liability of a Borrower for the Obligations, or any Liens granted by
such Borrower securing the Obligations would, but for the application of this
sentence, constitute a Fraudulent Conveyance, the liability of such Borrower
and the Liens securing such liability shall be valid and enforceable only to
the maximum extent that would not cause such liability or such Lien to constitute
a Fraudulent Conveyance, and the liability of such Borrower and this Agreement
shall automatically be deemed to have been amended accordingly.  For purposes hereof, the term “Fraudulent
Conveyance” means a fraudulent conveyance under Section 548 of Chapter 11
of Title II of the Bankruptcy Code or a fraudulent conveyance or fraudulent
transfer under the applicable provisions of any fraudulent conveyance or
fraudulent transfer law or similar law of any state, nation or other
governmental unit, as in effect from time to time.


 


(c)           Administrative Agent is
hereby authorized, without notice or demand (except as otherwise specifically
required under this Agreement) and without affecting the liability of any
Borrower hereunder, at any time and from time to time, to (i) renew,
extend or otherwise increase the time for payment of the Obligations; (ii) with
the written agreement of any Borrower, change the terms relating to the
Obligations or otherwise modify, amend or change the terms of any Note or other
agreement, document or instrument now or hereafter executed by either Borrower
and delivered to Administrative Agent for any Lender; (iii) accept partial
payments of the Obligations; (iv) take and hold any Collateral for the
payment of the Obligations or for the payment of any guaranties of the
Obligations and exchange, enforce, waive and release any such Collateral; (v) apply
any such Collateral and direct the order or manner of sale thereof
Administrative Agent, in its sole discretion, may determine; and (vi) settle,
release, compromise, collect or otherwise liquidate the Obligations and any
Collateral therefor in any manner, all surety defenses being hereby waived by
each Borrower. Without limitations of the foregoing, with respect to the
Obligations, each Borrower hereby makes and adopts each of the agreements and
waivers set forth in each Guarantee, the same being incorporated hereby by
reference.  Except as specifically
provided in this Agreement or any of the other Financing Documents,
Administrative Agent shall have the exclusive right to determine the time and
manner of application of any payments or credits, whether received from any
Borrower or any other source, and such determination shall be binding on all
Borrowers.  All such payments and credits
may be applied, reversed and reapplied, in whole or in part, to any of the
Obligations that Administrative Agent shall determine, in its sole discretion,
without affecting the validity or enforceability of the Obligations of the
other Borrower.


 


(d)           Each Borrower hereby agrees
that, except as hereinafter provided, its obligations hereunder shall be
unconditional, irrespective of (i) the absence of any attempt to collect
the Obligations from any obligor or other action to enforce the same; (ii) the
waiver or 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


46

















 


consent by Administrative
Agent with respect to any provision of any instrument evidencing the
Obligations, or any part thereof, or any other agreement heretofore, now or
hereafter executed by a Borrower and delivered to Administrative Agent; (iii) failure
by Administrative Agent to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or collateral for the
Obligations; (iv) the institution of any proceeding under the Bankruptcy
Code, or any similar proceeding, by or against a Borrower or Administrative
Agent’s election in any such proceeding of the application of Section 1111(b)(2) of
the Bankruptcy Code; (v) any borrowing or grant of a security interest by
a Borrower as debtor-in-possession, under Section 364 of the Bankruptcy
Code; (vi) the disallowance, under Section 502 of the Bankruptcy
Code, of all or any portion of Administrative Agent’s claim(s) for
repayment of any of the Obligations; or (vii) any other circumstance other
than payment in full of the Obligations which might otherwise constitute a
legal or equitable discharge or defense of a guarantor or surety.


 


(e)           Borrowers hereby agree, as
between themselves, that to the extent that Administrative Agent, on behalf of
Lenders, shall have received from any Borrower any Recovery Amount (as defined
below), then the paying Borrower shall have a right of contribution against
each other Borrower in an amount equal to such other Borrower’s contributive
share of such Recovery Amount; provided, however, that in the event any
Borrower suffers a Deficiency Amount (as defined below), then the Borrower
suffering the Deficiency Amount shall be entitled to seek and receive
contribution from and against the other Borrowers in an amount equal to the
Deficiency Amount; and provided further, that in no event shall the aggregate
amounts so reimbursed by reason of the contribution of any Borrower equal or
exceed an amount that would, if paid, constitute or result in Fraudulent Conveyance.  Until all Obligations have been paid and
satisfied in full, no payment made by or for the account of a Borrower
including, without limitation, (i) a payment made by such Borrower on
behalf of the liabilities of any other Borrower, or (ii) a payment made by
any other Guarantor under any Guarantee, shall entitle such Borrower, by
subrogation or otherwise, to any payment from such other Borrower or from or
out of such other Borrower’s property. 
The right of each Borrower to receive any contribution under this Section 2.10(e) or
by subrogation or otherwise from any other Borrower shall be subordinate in
right of payment to the Obligations and such Borrower shall not exercise any
right or remedy against such other Borrower or any property of such other
Borrower by reason of any performance of such Borrower of its joint and several
obligations hereunder, until the Obligations have been indefeasibly paid and
satisfied in full, and no Borrower shall exercise any right or remedy with
respect to this Section 2.10(e) until the Obligations have
been indefeasibly paid and satisfied in full. As used in this Section 2.10(e),
the term “Recovery Amount” means the amount of proceeds received by or credited
to Administrative Agent from the exercise of any remedy of the Lenders under
this Agreement or the other Financing Documents, including, without limitation,
the sale of any Collateral. As used in this Section 2.10(e), the
term “Deficiency Amount” means any amount that is less than the entire amount a
Borrower is entitled to receive by way of contribution or subrogation from, but
that has not been paid by, the other Borrowers in respect of any Recovery
Amount attributable to the Borrower entitled to contribution, until the
Deficiency Amount has been reduced to zero through contributions and
reimbursements made under the terms of this Section 2.10(e) or
otherwise.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


47

















 


Section 2.11         Collections; Lockbox Account
and Canadian Account.


 


(a)           Borrowers shall maintain a
lockbox (the “Lockbox”) with a
United States depository institution designated from time to time by
Administrative Agent (the “Lockbox Bank”),
subject to the provisions of this Agreement, and shall execute with the Lockbox
Bank a Deposit Account Control Agreement and such other agreements related to
such Lockbox as Administrative Agent may require.  Borrowers further shall execute with the
applicable Canadian Bank a Deposit Account Control Agreement and such other
agreements related to each Canadian Account as Administrative Agent may
require.  Subject to Section 2.11(e) below,
Borrowers shall ensure that all collections of Accounts are paid directly from
Account Debtors (i) into the Lockbox for deposit into the Lockbox Account,
(ii) directly into the Lockbox Account, and/or (iii) solely with
respect to Accounts owing from Canadian Account Debtors, directly into the
Canadian Account.


 


(b)           All funds deposited into a
Lockbox Account shall be transferred into the Payment Account by the close of
each Business Day.  Borrowers shall manually
transfer all funds on deposit in the Canadian Account into the Payment Account
at least once per month, or more frequently as directed by Administrative
Agent.


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


48

















 


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


 


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


 


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


 


ARTICLE 3 - REPRESENTATIONS AND WARRANTIES


 


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


 


Section 3.1            Existence and Power.  Each Credit Party is an entity as specified
on Schedule 3.1, is duly organized, validly existing and in good
standing under the laws of the jurisdiction specified on Schedule 3.1
and no other jurisdiction, has the same legal name as it 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


49

















 


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


 


Section 3.2            Organization and
Governmental Authorization; No Contravention.  The execution, delivery and performance by
each Credit Party of the Operative Documents to which it is a party are within
its powers, have been duly authorized by all necessary action pursuant to its
Organizational Documents, require no further action by or in respect of, or
filing with, any Governmental Authority and do not violate, conflict with or
cause a breach or a default under (a) any Law applicable to any Credit
Party or any of the Organizational Documents of any Credit Party, or (b) any
agreement or instrument binding upon it, except for such violations, conflicts,
breaches or defaults as could not, with respect to this clause (b), reasonably
be expected to have a Material Adverse Effect.


 


Section 3.3            Binding Effect.  Each of the Operative Documents to which any
Credit Party is a party constitutes a valid and binding agreement or instrument
of such Credit Party, enforceable against such Credit Party in accordance with
its respective terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles.


 


Section 3.4            Capitalization.  The authorized equity securities of each of
the Credit Parties as of the Closing Date is as set forth on Schedule 3.4.  All issued and outstanding equity securities
of each of the Credit Parties are duly authorized and validly issued, fully
paid, nonassessable, free and clear of all Liens other than those in favor of
Administrative Agent for the benefit of Administrative Agent and Lenders, and
such equity securities were issued in compliance with all applicable Laws.  The identity of the holders of the equity
securities of each of the Credit Parties and the percentage of their
fully-diluted ownership of the equity securities of each of the Credit Parties
as of the Closing Date is set forth on Schedule 3.4.  No shares of the capital stock or other
equity securities of any Credit Party, other than those described above, are
issued and outstanding as of the Closing Date. 
Except as set forth on Schedule 3.4, as of the Closing Date there
are no preemptive or other outstanding rights, options, warrants, conversion
rights or similar agreements or understandings for the purchase or acquisition
from any Credit Party of any equity securities of any such entity.


 


Section 3.5            Financial Information.  All information delivered to Administrative
Agent and pertaining to the financial condition of any Credit Party fairly
presents the financial position of such Credit Party as of such date in
conformity with GAAP (and as to unaudited financial statements, subject to
normal year end adjustments and the absence of footnote disclosures).  


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


50

















 


Since September 30, 2008, there has been
no material adverse change in the business, operations, properties, prospects
or condition (financial or otherwise) of any Credit Party.


 


Section 3.6            Litigation.  Except as set forth on Schedule 3.6 as
of the Closing Date, and except as hereafter disclosed to Administrative Agent
in writing, there is no Litigation pending against, or to such Borrower’s
knowledge threatened against or affecting, any Credit Party or, to such Borrower’s
knowledge, any party to any Operative Document other than a Credit Party.  There is no Litigation pending in which an
adverse decision could reasonably be expected to have a Material Adverse Effect
or which in any manner draws into question the validity of any of the Financing
Documents.


 


Section 3.7            Ownership of Property.  Each Borrower and each of its Subsidiaries is
the lawful owner of, has good and marketable title to and is in lawful
possession of, or has valid leasehold interests in, all properties and other
assets (real or personal, tangible, intangible or mixed) purported or reported
to be owned or leased (as the case may be) by such Person, subject to Permitted
Liens.


 


Section 3.8            No Default.  No Event of Default, or to such Borrower’s
knowledge, Default, has occurred and is continuing.  No Credit Party is in breach or default under
or with respect to any contract, agreement, lease or other instrument to which
it is a party or by which its property is bound or affected, which breach or
default could reasonably be expected to have a Material Adverse Effect.


 


Section 3.9            Labor Matters.  As of the Closing Date, there are no strikes
or other labor disputes pending or, to any Borrower’s knowledge, threatened
against any Credit Party. Hours worked and payments made to the employees of
the Credit Parties have not been in violation of the Fair Labor Standards Act
or any other applicable Law dealing with such matters.  All payments due from the Credit Parties, or
for which any claim may be made against any of them, on account of wages and
employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books, as the case may be.  The consummation of the transactions
contemplated by the Financing Documents will not give rise to a right of
termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which it is a party or by which it is bound.


 


Section 3.10         Regulated Entities.  No Credit Party is an “investment company” or
a company “controlled” by an “investment company” or a “subsidiary” of an “investment
company,” all within the meaning of the Investment Company Act of 1940.


 


Section 3.11         Margin Regulations.  None of the proceeds from the Loans have been
or will be used, directly or indirectly, for the purpose of purchasing or
carrying any “margin stock” (as defined in Regulation U of the Federal Reserve
Board), for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any “margin stock” or for any other
purpose which might cause any of the Loans to be considered a “purpose credit”
within the meaning of Regulation T, U or X of the Federal Reserve Board.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


51














 


Section 3.12         Compliance With Laws;
Anti-Terrorism Laws.


 


(a)           Each Credit Party is in
compliance with the requirements of all applicable Laws, except for such. Laws
the noncompliance with which could not reasonably be expected to have a
Material Adverse Effect.


 


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


 


Section 3.13         Taxes.  All federal, state and local tax returns,
reports and statements required to be filed by or on behalf of each Credit
Party have been filed with the appropriate Governmental Authorities in all
jurisdictions in which such returns, reports and statements are required to be
filed and, except to the extent subject to a Permitted Contest, all Taxes
(including real property Taxes) and other charges shown to be due and payable
in respect thereof have been timely paid prior to the date on which any fine,
penalty, interest, late charge or loss may be added thereto for nonpayment
thereof.  Except to the extent subject to
a Permitted Contest, all state and local sales and use Taxes required to be
paid by each Credit Party have been paid. 
All federal and state returns have been filed by each Credit Party for
all periods for which returns were due with respect to employee income tax
withholding, social security and unemployment taxes, and, except to the extent
subject to a Permitted Contest, the amounts shown thereon to be due and payable
have been paid in full or adequate provisions therefor have been made.


 


Section 3.14         Compliance with ERISA.


 


(a)           Each ERISA Plan (and the
related trusts and funding agreements) complies in form and in operation with,
has been administered in compliance with, and the terms of each ERISA Plan
satisfy, the applicable requirements of ERISA and the Code in all material
respects.  Each ERISA Plan which is
intended to be qualified under Section 401(a) of the Code is so qualified,
and the United States Internal Revenue Service has issued a favorable
determination letter with respect to each such ERISA Plan which may be relied
on currently. No Credit Party has incurred liability for any material excise
tax under any of Sections 4971 through 5000 of the Code.


 


(b)           Except as could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect, each Borrower and each Subsidiary is in compliance with the
applicable provisions of ERISA and the provision of the Code relating to Plans
and the regulations and published interpretations therein. During the
thirty-six (36) month 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


52

















 


period prior to the Closing
Date or the making of any Loan or the issuance of any Letter of Credit, (i) no
steps have been taken to terminate any Pension Plan and (ii) no
contribution failure has occurred with respect to any Pension Plan sufficient
to give rise to a Lien under Section 302(f) of ERISA.  No condition exists or event or transaction
has occurred with respect to any Pension Plan which could result in the
incurrence by any Credit Party of any material liability, fine or penalty.  No Credit Party has incurred liability to the
PBGC (other than for current premiums) with respect to any employee Pension
Plan.  All contributions (if any) have
been made on a timely basis to any Multiemployer Plan that are required to be
made by any Credit Party or any other member of the Controlled Group under the
terms of the plan or of any collective bargaining agreement or by applicable
Law; no Credit Party nor any member of the Controlled Group has withdrawn or
partially withdrawn from any Multiemployer Plan, incurred any withdrawal
liability with respect to any such plan or received notice of any claim or
demand for withdrawal liability or partial withdrawal liability from any such
plan, and no condition has occurred which, if continued, could result in a
withdrawal or partial withdrawal from any such plan, and no Credit Party nor
any member of the Controlled Group has received any notice that any
Multiemployer Plan is in reorganization, that increased contributions may be
required to avoid a reduction in plan benefits or the imposition of any excise
tax, that any such plan is or has been funded at a rate less than that required
under Section 412 of the Code, that any such plan is or may be terminated,
or that any such plan is or may become insolvent.


 


Section 3.15         Consummation of Operative
Documents; Brokers.  Except for
fees payable to Administrative Agent and/or Lenders, no broker, finder or other
intermediary has brought about the obtaining, making or closing of the
transactions contemplated by the Operative Documents, and no Credit Party has
or will have any obligation to any Person in respect of any finder’s or
brokerage fees, commissions or other expenses in connection herewith or
therewith. Except for fees payable to Administrative Agent and/or Lenders, no
broker, finder or other intermediary has brought about the obtaining, making or
closing of the transactions contemplated by the Financing Documents, and no
Credit Party has or will have any obligation to any Person in respect of any
finder’s or brokerage fee in connection herewith or therewith.


 


Section 3.16         Related Transactions.  All transactions contemplated by the
Operative Documents to be consummated on or prior to the date hereof have been
so consummated (including, without limitation, the disbursement and transfer of
all funds in connection therewith) in all material respects pursuant to the
provisions of the applicable Operative Documents, true and complete copies of
which have been delivered to Administrative Agent, and in compliance with all
applicable Law, except for such Laws the noncompliance with which would not
reasonably be expected to have a Material Adverse Effect.


 


Section 3.17         Material Contracts.  Except for the Operative Documents and the
other agreements set forth on Schedule 3.17 (collectively with the
Operative Documents, the “Material Contracts”),
as of the Closing Date there are no (a) employment agreements covering the
management of any Credit Party, (b) collective bargaining agreements or
other similar labor agreements covering any employees of any Credit Party, (c) agreements
for managerial, consulting or similar services to which any Credit Party is a
party or by which it is bound, (d) agreements regarding any Credit Party,
its assets or operations or any investment therein to which any of its
equityholders is a party or by which it is bound, (e) real estate leases,
Intellectual Property licenses or other lease or license agreements to which
any Credit Party is a 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


53

















 


party, either as lessor or lessee, or as
licensor or licensee (other than licenses arising from the purchase of “off the
shelf’ products), or (f) customer, distribution, marketing or supply
agreements to which any Credit Party is a party, in each case with respect to
the preceding clauses (a), (c), (d), (e) and (f) requiring payment of
more than $200,000 in any year, (g) partnership agreements to which any
Credit Party is a general partner or joint venture agreements to which any
Credit Party is a party, (h) third party billing arrangements to which any
Credit Party is a party, or (i) any other agreements or instruments to
which any Credit Party is a party, and the breach, nonperformance or
cancellation of which, or the failure of which to renew, could reasonably be
expected to have a Material Adverse Effect. 
Schedule 3.17 sets forth, with respect to each real estate lease
agreement to which any Borrower is a party (as a lessee) as of the Closing
Date, the address of the subject property and the annual rental (or, where
applicable, a general description of the method of computing the annual
rental).  The consummation of the
transactions contemplated by the Financing Documents will not give rise to a
right of termination in favor of any party to any Material Contract (other than
any Credit Party), except for such Material Contracts the noncompliance with
which would not reasonably be expected to have a Material Adverse Effect.


 


Section 3.18         Compliance with
Environmental Requirements; No Hazardous Materials.


 


Except in each case as set forth on Schedule 3.18:


 


(a)           no notice, notification,
demand, request for information, citation, summons, complaint or order has been
issued, no complaint has been filed, no penalty has been assessed and no
investigation or review is pending, or to such Borrower’s knowledge, threatened
by any Governmental Authority or other Person with respect to any (i) alleged
violation by any Credit Party of any Environmental Law, (ii) alleged
failure by any Credit Party to have any Permits required in connection with the
conduct of its business or to comply with the terms and conditions thereof, (iii) any
generation, treatment, storage, recycling, transportation or disposal of any
Hazardous Materials, or (iv) release of Hazardous Materials; and


 


(b)           no property now owned or
leased by any Credit Party and, to the knowledge of each Borrower, no such
property previously owned or leased by any Credit Party, to which any Credit
Party has, directly or indirectly, transported or arranged for the
transportation of any Hazardous Materials, is listed or, to such Borrower’s
knowledge, proposed for listing, on the National Priorities List promulgated
pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state list
or is the subject of federal, state or local enforcement actions or, to the
knowledge of such Borrower, other investigations which may lead to claims
against any Credit Party for clean-up costs, remedial work, damage to natural
resources or personal injury claims, including, without limitation, claims
under CERCLA.


 


For
purposes of this Section 3.18, each Credit Party shall be deemed to
include any business or business entity (including a corporation) that is, in
whole or in part, a predecessor of such Credit Party.


 


Section 3.19         Intellectual Property.  Each Credit Party owns, is licensed to use or
otherwise has the right to use, all Intellectual Property that is material to
the condition (financial or other), business or operations of such Credit
Party. All Intellectual Property existing as of the 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


54

















 


Closing Date which is issued, registered or
pending with any United States or foreign Governmental Authority (including
without limitation any and all applications for the registration of any
Intellectual Property with any such United States or foreign Governmental
Authority) and all licenses under which any Borrower is the licensee of any
such registered Intellectual Property (or any such application for the
registration of Intellectual Property) owned by another Person are set forth on
Schedule 3.19.  Such Schedule
3.19 indicates in each case whether such registered Intellectual Property
(or application therefore) is owned or licensed by such Credit Party, and in
the case of any such licensed registered Intellectual Property (or application
therefore), lists the name and address of the licensor and the name and date of
the agreement pursuant to which such item of Intellectual Property is licensed
and whether or not such license is an exclusive license and indicates whether
there are any purported restrictions in such license on the ability to such
Credit Party to grant a security interest in and/or to transfer any of its
rights as a licensee under such license. 
Except as indicated on Schedule 3.19, the applicable Credit Party
is the sole and exclusive owner of the entire and unencumbered right, title and
interest in and to each such registered Intellectual Property (or application
therefore) purported to be owned by such Credit Party, free and clear of any
Liens and/or licenses in favor of third parties or agreements or covenants not
such sue third parties for infringement. 
All registered Intellectual Property of each Credit Party is duly and
properly registered, filed or issued in the appropriate office and
jurisdictions for such registrations, filings or issuances, except where the
failure to do so would not reasonably be expected to have a Material Adverse
Effect.  No Credit Party is party to, nor
bound by, any material license or other agreement with respect to which any
Credit Party is the licensee that prohibits or otherwise restricts such Credit
Party from granting a security interest in such Borrower’s interest in such
license or agreement or other property. 
To such Borrower’s knowledge, each Credit Party conducts its business
without infringement or claim of infringement of any Intellectual Property
rights of others and there is no infringement or claim of infringement by
others of any Intellectual Property rights of any Credit Party, which
infringement or claim of infringement could reasonably be expected to have a
Material Adverse Effect.


 


Section 3.20         Solvency.  After giving effect to the Loan advance and
the liabilities and obligations of each Borrower under the Operative Documents,
each Borrower and each additional Credit Party is Solvent.


 


Section 3.21         Full Disclosure.  None of the written information (financial or
otherwise) furnished by or on behalf of any Credit Party to Administrative
Agent or any Lender in connection with the consummation of the transactions
contemplated by the Operative Documents, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the
statements contained herein or therein not misleading in light of the
circumstances under which such statements were made.  All financial projections delivered to Administrative
Agent and the Lenders by Borrowers (or their agents) have been prepared on the
basis of the assumptions stated therein. 
Such projections represent each Borrower’s best estimate of such
Borrower’s future financial performance and such assumptions are believed by
such Borrower to be fair and reasonable in light of current business
conditions; provided, however, that Borrowers can give no
assurance that such projections will be attained.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


55

















 


Section 3.22         Interest Rate.  The rate of interest paid under the Notes and
the method and manner of the calculation thereof do not violate any usury or
other law or applicable Laws, any of the Organizational Documents or any of the
Operative Documents.


 


Section 3.23         Subsidiaries.  No Borrower owns any stock, partnership
interests, limited liability company interests or other equity securities
except for Permitted Investments.


 


Section 3.24         Representations and
Warranties Incorporated from Operative Documents.  As of the Closing Date, each of the
representations and warranties made in the Operative Documents by each of the
parties thereto is true and correct in all material respects, and such
representations and warranties are hereby incorporated herein by reference with
the same effect as though set forth in their entirety herein, as qualified
therein, except to the extent that such representation or warranty relates to a
specific date, in which case such representation and warranty shall be true as
of such earlier date.


 


ARTICLE 4 - AFFIRMATIVE COVENANTS


 


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


 


Section 4.1            Financial Statements and
Other Reports.  Each
Borrower will deliver to Administrative Agent: 
(1) as soon as available, but no later than thirty (30) days after
the last day of each month, a company prepared consolidated balance sheet, cash
flow and income statement covering Borrowers’ and its Consolidated Subsidiaries’
consolidated operations during the period, prepared under GAAP, consistently
applied, certified by a Responsible Officer and in a form acceptable to
Administrative Agent; (2) as soon as available, but no later than one
hundred fifty (150) days after the last day of Borrower’s fiscal year, audited
consolidated financial statements prepared under GAAP, consistently applied,
together with an unqualified opinion on the financial statements from an
independent certified public accounting firm acceptable to Administrative Agent
in its reasonable discretion; (3) within five (5) days of delivery or
filing thereof, copies of all statements, reports and notices made available to
Borrower’s security holders and copies of all reports and other filings made by
Borrower with any stock exchange on which any securities of any Borrower are
traded and/or the SEC; (4) a prompt report of any legal actions pending or
threatened against any Borrower or any of its Subsidiaries that could result in
damages or costs to Borrower or any of its Subsidiaries of Fifty Thousand
Dollars ($50,000) or more; (5) prompt written notice of an event that
materially and adversely affects the value of any Intellectual Property; and (6) budgets,
sales projections, operating plans and other financial information and
information, reports or statements regarding the Borrowers, their business and
the Collateral as Administrative Agent may from time to time reasonably
request.  Each Borrower will, within
thirty (30) days after the last day of each month, deliver to Administrative
Agent with the monthly financial statements, a duly completed Compliance
Certificate signed by a Responsible Officer setting forth calculations showing
compliance with the financial covenants set forth in this Agreement. Promptly
upon their becoming available, Borrowers shall deliver to Administrative Agent
copies of all Swap Contracts and Material Contracts.  Each Borrower will, once every five (5) Business
Days, deliver to Administrative Agent a duly completed Borrowing Base
Certificate signed by a Responsible Officer, with aged listings of accounts
receivable and accounts payable (by invoice date).


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


56

















 


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


 


Section 4.3            Maintenance of Existence.  Each Borrower will preserve, renew and keep
in full force and effect and in good standing, and will cause each Subsidiary
to preserve, renew and keep in full force and effect and in good standing,
their respective existence and their respective rights, privileges and
franchises necessary or desirable in the normal conduct of business.


 


Section 4.4            Maintenance of Property;
Insurance.


 


(a)           Each Borrower will keep, and
will cause each Subsidiary to keep, all property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted.
If all or any part of the Collateral useful or necessary in its business, or
upon which any Borrowing Base is calculated, becomes damaged or destroyed, each
Borrower will promptly and completely repair and/or restore the affected
Collateral in a good and workmanlike manner, regardless of whether
Administrative Agent agrees to disburse insurance proceeds or other sums to pay
costs of the work of repair or reconstruction.


 


(b)           Upon completion of any
Permitted Contest, Borrowers shall, and will cause each Subsidiary to, promptly
pay the amount due, if any, and deliver to Administrative Agent proof of the
completion of the contest and payment of the amount due, if any, following
which Administrative Agent shall return the security, if any, deposited with
Administrative Agent pursuant to the definition of Permitted Contest.


 


(c)           Each Borrower will maintain (i) casualty
insurance on all real and personal property on an all risks basis (including
the perils of flood, windstorm and quake), covering the repair and replacement
cost of all such property and coverage, business interruption and rent loss
coverages with extended period of indemnity (for the period required by
Administrative Agent from time to time) and indemnity for extra expense, in
each case without application of coinsurance and with agreed amount
endorsements, (ii) general and professional liability insurance (including
products/completed operations liability coverage) and (iii) such other
insurance coverage in such amounts and with respect to such risks as
Administrative Agent may request from time to time, pursuant to the Insurance
Requirements attached hereto as Schedule 4.4; provided,
however, that, in no event shall such
insurance be in amounts or with coverage less than, or with carriers with
qualifications inferior to, any of the insurance or carriers in existence as of
the Closing Date (or required to be in existence after the Closing Date under a



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


57

















 


Financing Document).  All such insurance shall be provided by
insurers having an A.M. Best policyholders rating reasonably acceptable to
Administrative Agent.


 


(d)           On or prior to the Closing
Date, and at all times thereafter, each Borrower will cause Administrative
Agent to be named as an additional insured, assignee and lender loss payee
(which shall include, as applicable, identification as mortgagee), as
applicable, on each insurance policy required to be maintained pursuant to this
Section 4.4 pursuant to endorsements in form and content acceptable
to Administrative Agent.  Borrowers will
deliver to Administrative Agent and the Lenders (i) on the Closing Date, a
certificate from Borrowers’ insurance broker dated such date showing the amount
of coverage as of such date, and that such policies will include effective
waivers (whether under the terms of any such policy or otherwise) by the
insurer of all claims for insurance premiums against all loss payees and
additional insureds and all rights of subrogation against all loss payees and
additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each
additional insured, assignee and loss payee and that no cancellation, reduction
in amount or material change in coverage thereof shall be effective until at
least thirty (30) days after receipt by each additional insured, assignee and
loss payee of written notice thereof, (ii) on an annual basis, and upon
the request of any Lender through Administrative Agent from time to time full
information as to the insurance carried, (iii) within fifteen (15) days of
receipt of notice from any insurer, a copy of any notice of cancellation,
nonrenewal or material change in coverage from that existing on the date of
this Agreement, and (iv) forthwith, notice of any cancellation or
nonrenewal of coverage by any Borrower, and (v) at least 60 days prior to
expiration of any policy of insurance, evidence of renewal of such insurance
upon the terms and conditions herein required.


 


(e)           In the event any Borrower
fails to provide Administrative Agent with evidence of the insurance coverage
required by this Agreement, Administrative Agent may purchase insurance at
Borrowers’ expense to protect Administrative Agent’s interests in the
Collateral.  This insurance may, but need
not, protect such Borrower’s interests. 
The coverage purchased by Administrative Agent may not pay any claim
made by such Borrower or any claim that is made against such Borrower in
connection with the Collateral.  Such
Borrower may later cancel any insurance purchased by Administrative Agent, but
only after providing Administrative Agent with evidence that such Borrower has
obtained insurance as required by this Agreement.  If Administrative Agent purchases insurance
for the Collateral, Borrowers will be responsible for the costs of that
insurance to the fullest extent provided by law, including interest and other
charges imposed by Administrative Agent in connection with the placement of the
insurance, until the effective date of the cancellation or expiration of the
insurance.  The costs of the insurance
may be added to the Obligations.  The
costs of the insurance may be more than the cost of insurance such Borrower is
able to obtain on its own.


 


Section 4.5            Compliance with Laws.  Each Borrower will comply, and cause each
Subsidiary to comply, with the requirements of all applicable Laws and Material
Contracts, except to the extent that failure to so comply could not reasonably
be expected to (a) have a Material Adverse Effect, or (b) result in
any Lien upon either (i) a material portion of the assets of any such
Person in favor of any Governmental Authority, or (ii) any Accounts or
Inventory.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


58

















 


Section 4.6            Inspection of Property,
Books and Records.  Each
Borrower will keep, and will cause each Subsidiary to keep, proper books of
record substantially in accordance with GAAP in which full, true and correct
entries shall be made of all dealings and transactions in relation to its
business and activities; and will permit, and will cause each Subsidiary to
permit, at the sole cost of the applicable Borrower or any applicable
Subsidiary, representatives of Administrative Agent and of any Lender (but at
such Lender’s expense unless such visit or inspection is made concurrently with
Administrative Agent) to visit and inspect any of their respective properties,
to examine and make abstracts or copies from any of their respective books and
records, to conduct a collateral audit and analysis of their respective
operations and the Collateral, to verify the amount and age of the Accounts,
the identity and credit of the respective Account Debtors, to review the
billing practices of Borrowers and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants as often as may reasonably be desired.  In the absence of an Event of Default,
Administrative Agent or any Lender exercising any rights pursuant to this Section 4.6
shall give the applicable Borrower or any applicable Subsidiary commercially
reasonable prior notice of such exercise. 
No notice shall be required during the existence and continuance of any
Default or any time during which Administrative Agent reasonably believes a
Default exists.


 


Section 4.7            Use of Proceeds.  Borrowers shall use the proceeds of the Term
Loan and the Revolving Loans solely for (a) transaction fees incurred in
connection with the Financing Documents and the refinancing on the Closing Date
of Debt, and (b) for working capital needs of Borrowers and their
Subsidiaries.  No portion of the proceeds
of the Loans will be used for family, personal, agricultural or household use.


 


Section 4.8            Reserved.


 


Section 4.9            Notices of Litigation and
Defaults.


 


(a)           Borrowers will give prompt
written notice to Administrative Agent (i) of any litigation or
governmental proceedings pending or threatened (in writing) against Borrowers
or other Credit Party which would reasonably be expected to have a Material
Adverse Effect with respect to Borrowers or any other Credit Party or which in
any manner calls into question the validity or enforceability of any Financing
Document, (ii) if any Credit Party is in breach or default under or with
respect to any Material Contract, or if any Credit Party is in breach or
default under or with respect to any other contract, agreement, lease or other
instrument to which it is a party or by which its property is bound or
affected, which breach or default could reasonably be expected to have a
Material Adverse Effect, (iii) of any strikes or other labor disputes
pending or, to any Borrower’s knowledge, threatened against any Credit Party, (iv) if
there is any infringement or claim of infringement by any other Person with
respect to any Intellectual Property rights of any Credit Party that could
reasonably be expected to have a Material Adverse Effect, or if there is any
claim by any other Person that any Credit Party in the conduct of its business
is infringing on the Intellectual Property Rights of others, and (v) of
all returns, recoveries, disputes and claims that involve more than $100,000.


 


(b)           Without limiting or
contradicting any other more specific provision of this Agreement, promptly
(and in any event within three (3) Business Days) upon any Borrower
becoming aware of the existence of any Default or Event of Default, Borrowers
shall give 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


59

















 


written notice to
Administrative Agent of such occurrence, which such notice shall include a
reasonably detailed description of such Default or Event of Default.


 


(c)           Borrowers represent and
warrant that Schedule 4.9 sets forth a complete list of all matters
existing as of the Closing Date for which notice could be required under this Section and
all litigation or governmental proceedings pending or threatened (in writing)
against Borrowers or other Credit Party as of the Closing Date.


 


Section 4.10         Hazardous Materials;
Remediation.


 


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


 


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


 


Section 4.11         Further Assurances.


 


(a)           Each Borrower will, and will
cause each Subsidiary to, at its own cost and expense, cause to be promptly and
duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as may from time to time be necessary or as
Administrative Agent or the Required Lenders may from time to time reasonably
request in order to carry out the intent and purposes of the Financing
Documents and the transactions contemplated thereby, including all such actions
to (i) establish, create, preserve, protect and perfect a first priority
Lien (subject only to Permitted Liens) in favor of Administrative Agent for
itself and for the benefit of the Lenders on the Collateral (including
Collateral acquired after the date hereof), and (ii) unless Administrative
Agent shall agree otherwise in writing, cause all Subsidiaries of Borrowers to
be jointly and severally obligated with the other Borrowers under all covenants
and obligations under this Agreement, including the obligation to repay the
Obligations. Without limiting the generality of the foregoing, (x) Borrowers
shall, at the time of the delivery of any Compliance Certificate disclosing the
acquisition by an Credit Party of any registered Intellectual Property or
application for the registration of Intellectual Property, deliver to
Administrative Agent a duly completed and executed Supplement to the applicable
Credit 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


60

















 


Party’s Patent Security
Agreement or Trademark Security Agreement in the form of the respective Exhibit thereto
and (y) at the request of Administrative Agent, following the disclosure
by Borrowers on any Compliance Certificate of the acquisition by any Credit
Party of any rights under a license as a licensee with respect to any
registered Intellectual Property or application for the registration of any
Intellectual Property owned by another Person, Borrowers shall execute any
documents requested by Administrative Agent to establish, create, preserve,
protect and perfect a first priority lien in favor of Administrative Agent, to
the extent legally possible, in such Borrower’s rights under such license and
shall use their commercially reasonable best efforts to obtain the written
consent of the licensor which such license to the granting in favor of
Administrative Agent of a Lien on such Borrower’s rights as licensee under such
license.


 


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


 


(c)           Upon the formation or
acquisition of a new Subsidiary, Borrowers shall (i) pledge, have pledged
or cause or have caused to be pledged to the Administrative Agent pursuant to a
pledge agreement in form and substance satisfactory to the Administrative
Agent, all of the outstanding shares of equity interests or other equity
interests of such new Subsidiary owned directly or indirectly by any Borrower,
along with undated stock or equivalent powers for such certificates, executed
in blank; (ii) unless Administrative Agent shall agree otherwise in
writing, cause the new Subsidiary to take such other actions (including
entering into or joining any Security Documents) as are necessary or advisable
in the reasonable opinion of the Administrative Agent in order to grant the
Administrative Agent, acting on behalf of the Lenders, a first priority Lien on
all real and personal property of such Subsidiary in existence as of such date
and in all after acquired property, which first priority Liens are required to
be granted pursuant to this Agreement; (iii) unless Administrative Agent
shall agree otherwise in writing, cause such new Subsidiary to either (at the
election of Administrative Agent) become a Borrower hereunder with joint and
several liability for all obligations of Borrowers hereunder and under the
other Financing Documents pursuant to a joinder agreement or other similar
agreement in form and substance satisfactory to Administrative Agent or to
become a Guarantor of the obligations of Borrowers hereunder and under the
other Financing Documents pursuant to a guaranty and suretyship agreement in
form and substance satisfactory to Administrative Agent; and (iv) cause
the new Subsidiary to deliver certified copies of such Subsidiary’s certificate
or articles of incorporation, together with good standing certificates, by-laws
(or other operating agreement or governing documents), resolutions of the Board
of Directors or other governing body, approving and authorize the execution and
delivery of the Security Documents, incumbency certificates and to execute
and/or deliver such other documents and legal opinions or to take such other
actions as may be requested by the Administrative Agent, in each case, in form
and substance satisfactory to the Administrative Agent.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


61














 


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


 


(e)           Without limiting the terms
of subsection (d) above, Borrowers agree at all times during the term
hereof to maintain exact duplicate copies of all records relating to all
Eligible Accounts owing to any Borrower at the Birmingham Location,
notwithstanding the fact that the billing and collection efforts of such
Borrower may be conducted from another location.


 


Section 4.12         Right of First Refusal.  Borrowers hereby agree that if, at any time
during the term hereof, any Borrower receives from a third party an offer, term
sheet or commitment, or any Borrower makes a proposal substantially acceptable
to or accepted by any person or entity (all of the foregoing being referred to
as an “Offer”), which Offer
provides for working capital financing, accounts receivable financing, or
inventory financing, the applicable Borrower shall first forward the Offer to
MCF, which shall have five (5) Business Days after receipt thereof (the “Option Period”) to agree to provide similar
financing in the place of such person or entity upon the terms and conditions
set forth in the Offer and to notify the applicable Borrower in writing of MCF’s
acceptance of the Offer (the “Acceptance
Notice”).  If the Borrower has
not received an Acceptance Notice within the Option Period, the Borrower shall
be free to consummate the transaction described in the Offer with the third
party providing the Offer (the “Financing
Transaction”); provided, however, that the foregoing, and MCF’s
failure to respond to issue an Acceptance Notice, shall not be construed as a
waiver of any of the terms, covenants or conditions of the Financing
Documents.  In the event that the
Financing Transaction is not consummated under similar terms with such person
or entity during the one hundred twenty (120) day period following the
expiration of the Option Period, or any material term is changed, the
applicable Borrower shall not be permitted to consummate the Financing
Transaction without again complying with this Section.  The right of first refusal granted to MCF
hereunder shall survive until the earlier to occur of (a) the date that is
six months following the date on which the Obligations are paid in full and (b) the
Commitment Expiry Date.  For purposes of
this Section, “MCF” shall mean and include either of MCF or any other parent
company, subsidiary or Affiliate of MCF. 
Nothing in this Section is intended, or shall be construed, to
constitute Administrative Agent’s, MCF’s or any other Lender’s consent to the
consummation of any transaction described in any Offer.


 


Section 4.13         Power of Attorney.  Each of the officers of Administrative Agent
is hereby irrevocably made, constituted and appointed the true and lawful
attorney for Borrowers (without requiring any of them to act as such) with full
power of substitution to do the following: (a) after the occurrence and
during the continuance of an Event of Default endorse the name of Borrowers
upon any and all checks, drafts, money orders, and other instruments for the
payment of money that are payable to Borrowers and constitute collections on
Borrowers’ Accounts; (b) so long as Administrative Agent has provided not
less than three (3) Business Days’ prior written notice to 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


62

















 


Borrower to perform the same and Borrower has
failed to take such action, execute in the name of Borrowers any schedules,
assignments, instruments, documents, and statements that Borrowers are
obligated to give Administrative Agent under this Agreement; (c) after the
occurrence and during the continuance of an Event of Default, take any action
Borrowers are required to take under this Agreement; (d) so long as
Administrative Agent has provided not less than three (3) Business Days’
prior written notice to Borrower to perform the same and Borrower has failed to
take such action, do such other and further acts and deeds in the name of
Borrowers that Administrative Agent may deem necessary or desirable to enforce
any Account or other Collateral or perfect Administrative Agent’s security
interest or Lien in any Collateral; and (e) after the occurrence and
during the continuance of an Event of Default, do such other and further acts
and deeds in the name of Borrowers that Administrative Agent may deem necessary
or desirable to enforce its rights with regard to any Account or other
Collateral. This power of attorney shall be irrevocable and coupled with an
interest.


 


Section 4.14         Borrowing Base Collateral
Administration.


 


(a)           All data and other
information relating to Accounts or other intangible Collateral shall at all
times be kept by Borrowers at their respective principal offices and shall not
be moved from such locations without (i) providing prior written notice to
Administrative Agent, and (ii) obtaining the prior written consent of Administrative
Agent, which consent shall not be unreasonably withheld.


 


(b)           Borrowers shall provide
prompt written notice to each Person who either is currently an Account Debtor
or becomes an Account Debtor at any time following the date of this Agreement
that directs each Account Debtor to make payments into the Lockbox, and hereby
authorizes Administrative Agent, upon Borrowers’ failure to send such notices
within ten (10) days after the date of this Agreement (or ten (10) days
after the Person becomes an Account Debtor), to send any and all similar
notices to such Person.  Administrative
Agent reserves the right to notify Account Debtors that Administrative Agent
has been granted a Lien upon all Accounts.


 


(c)           Borrowers will conduct a
physical count of the Inventory at least twice per year and at such other times
as Administrative Agent requests, and Borrowers shall provide to Administrative
Agent a written accounting of such physical count in form and substance
satisfactory to Administrative Agent. 
Each Borrower will maintain at all times a perpetual inventory system.
Each Borrower will keep adequate records at all times as to the quantity,
source, quality and characteristics of its Inventory and will use commercially
reasonable efforts to at all times keep its Inventory in good and marketable
condition.  In addition to the foregoing,
from time to time, Administrative Agent may require Borrowers to obtain and
deliver to Administrative Agent appraisal reports in form and substance and
from appraisers reasonably satisfactory to Administrative Agent stating the
then current fair market values of all or any portion of Inventory owned by
each Borrower or any Subsidiaries.


 


(d)           Borrowers will use
commercially reasonable efforts to at all times keep its FF&E in good
repair and physical condition, ordinary wear and tear excepted.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


63

















 


(e)           In addition to the
foregoing, from time to time, Administrative Agent may require Borrowers to
obtain and deliver to Administrative Agent appraisal reports in form and
substance and from appraisers reasonably satisfactory to Administrative Agent
stating the then current fair market values of all or any portion of Inventory,
Intellectual Property and FF&E owned by each Borrower or any Subsidiaries;
provided, that so long as no Event of Default or Default has occurred,
Borrowers shall be liable for such fees and expenses for no more than one (1) such
appraisal for each of Inventory, Intellectual Property and FF&E in any
given calendar year.


 


ARTICLE 5 - NEGATIVE COVENANTS


 


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


 


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


 


Section 5.2            Liens.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, create, assume or suffer to exist any
Lien on any asset now owned or hereafter acquired by it, except for Permitted
Liens.  Without limiting the generality
of the foregoing, no Borrower will, or will permit any Subsidiary to, directly
or indirectly, create, assume or suffer to exist any Lien on any of its or
their Intellectual Property, except for Permitted Liens.


 


Section 5.3            Restricted Distributions.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, declare, order, pay, make or set apart
any sum for any Restricted Distribution; provided,
however, that the following
Restricted Distributions may be paid: (a) at any time, dividends may be
paid by any Subsidiary of any Borrower to such parent Borrower (and/or to any
intermediate Subsidiary who is also a Borrower); (b) any Borrower may pay
dividends solely in common stock; and (c) Borrower may repurchase the
stock of former employees, directors or consultants pursuant to stock
repurchase agreements so long as an Event of Default does not exist at the time
of such repurchase and would not exist after giving effect to such repurchase,
provided that such repurchase does not exceed $500,000 in the aggregate per
fiscal year.


 


Section 5.4            Restrictive Agreements.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly (a) enter into or assume any
agreement (other than the Financing Documents and any agreements for purchase
money debt permitted under clause (c) of the definition of Permitted
Indebtedness) prohibiting the creation or assumption of any Lien upon its
properties or assets, whether now owned or hereafter acquired, or (b) create
or otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind (except as provided by the Financing
Documents) on the ability of any Subsidiary to: (i) pay or make Restricted
Distributions to any Borrower or any Subsidiary; (ii) pay any Debt owed to
any Borrower or any Subsidiary; (iii) make loans or advances to any
Borrower or any Subsidiary; or (iv) transfer any of its property or assets
to any Borrower or any Subsidiary.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


64

















 


Section 5.5            Offering of Stock or Equity.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, commence a public offering of its
securities that is not a Qualified Initial Public Offering.  Without limiting the terms and conditions of Section 5.3,
no Borrower will, or will permit any Subsidiary to, directly or indirectly, use
the proceeds of a Qualified Initial Public Offering to make a Restricted
Distribution before the Term Loan is paid in full.


 


Section 5.6            Consolidations, Mergers and
Sales of Assets; Change in Control.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly (a) consolidate or merge or
amalgamate with or into any other Person, or (b) consummate any asset
dispositions other than Permitted Asset Dispositions. No Borrower will suffer
or permit to occur any Change in Control with respect to itself, any Subsidiary
or any Guarantor.


 


Section 5.7            Purchase of Assets,
Investments.  No Borrower
will, or will permit any Subsidiary to, directly or indirectly (a) acquire
or enter into any agreement to acquire any assets other than in the Ordinary
Course of Business or as permitted under clause (h) of the definition of
Permitted Investments; (b) engage or enter into any agreement to engage in
any joint venture or partnership with any other Person; or (c) acquire or
own or enter into any agreement to acquire or own any Investment in any Person
other than Permitted Investments.


 


Section 5.8            Transactions with Affiliates.  Except as otherwise disclosed on Schedule
5.8, and except for transactions that are disclosed to Administrative Agent
in advance of being entered into and which contain terms that are no less
favorable to the applicable Borrower or any Subsidiary, as the case may be,
than those which might be obtained from a third party not an Affiliate of any
Credit Party, no Borrower will, or will permit any Subsidiary to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of any Borrower.


 


Section 5.9            Modification of
Organizational Documents.  No
Borrower will, or will permit any Subsidiary to, directly or indirectly, amend
or otherwise modify any Organizational Documents of such Person, except for
Permitted Modifications.


 


Section 5.10         Modification of Certain
Agreements.  No Borrower
will, or will permit any Subsidiary to, directly or indirectly, amend or
otherwise modify any Material Contract, which amendment or modification in any
case:  (a) is contrary to the terms
of this Agreement or any other Financing Document; (b) could reasonably be
expected to be adverse to the rights, interests or privileges of the
Administrative Agent or the Lenders or their ability to enforce the same; (c) results
in the imposition or expansion in any material respect of any obligation of or
restriction or burden on any Borrower or any Subsidiary; or (d) reduces in
any material respect any rights or benefits of any Borrower or any Subsidiaries
(it being understood and agreed that any such determination shall be in the
discretion of the Administrative Agent). 
Each Borrower shall, prior to entering into any amendment or other
modification of any of the foregoing documents, deliver to Administrative Agent
reasonably in advance of the execution thereof, any final or execution form
copy of amendments or other modifications to such documents, and such Borrower
agrees not to take, nor permit any of its Subsidiaries to take, any such action
with respect to any such documents without obtaining such approval from
Administrative Agent.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


65

















 


Section 5.11         Conduct of Business.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, engage in any line of business other
than those businesses engaged in on the Closing Date and described on Schedule
5.11 and businesses reasonably related thereto.


 


Section 5.12         Lease Payments.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, incur or assume (whether pursuant to a
Guarantee or otherwise) any liability for rental payments except in the
Ordinary Course of Business.


 


Section 5.13         Limitation on Sale and
Leaseback Transactions.  No
Borrower will, or will permit any Subsidiary to, directly or indirectly, enter
into any arrangement with any Person whereby, in a substantially
contemporaneous transaction, any Borrower or any Subsidiaries sells or
transfers all or substantially all of its right, title and interest in an asset
and, in connection therewith, acquires or leases back the right to use such
asset.


 


Section 5.14         Deposit Accounts and
Securities Accounts.  Schedule
5.14 lists all of the Deposit Accounts and Securities Accounts of each
Borrower as of the Closing Date.  No
Borrower will, or will permit any Subsidiary organized within the United States
of America or Canada to, directly or indirectly, establish any new bank
account, Deposit Account or Securities Account without prior written notice to
Administrative Agent and unless Administrative Agent, such Borrower or such
Subsidiary and the bank, financial institution or securities intermediary at
which the account is to be opened enter into a control agreement regarding such
account pursuant to which such bank, financial institution or securities
intermediary acknowledges the security interest of Administrative Agent in such
account, agrees to comply with instructions originated by Administrative Agent
directing disposition of the funds or investment property or securities in the
account without further consent from any Borrower or Subsidiary, and agrees to
subordinate and limit any security interest the bank, financial institution or
securities intermediary may have in the account on terms satisfactory to
Administrative Agent.  The provisions of
this Section requiring Deposit Account Control Agreements shall not apply
to Deposit Accounts exclusively used for payroll, payroll taxes and other
employee wage and benefit payments to or for the benefit of Borrowers’
employees and identified to Administrative Agent by Borrowers as such.


 


Section 5.15         Compliance with
Anti-Terrorism Laws. 
Administrative Agent hereby notifies Borrowers that pursuant to the
requirements of Anti-Terrorism Laws, and Administrative Agent’s policies and
practices, Administrative Agent is required to obtain, verify and record
certain information and documentation that identifies Borrowers and its
principals, which information includes the name and address of each Borrower
and its principals and such other information that will allow Administrative
Agent to identify such party in accordance with Anti-Terrorism Laws.  No Borrower will, or will permit any
Subsidiary to, directly or indirectly, knowingly enter into any Material
Contracts with any Blocked Person or any Person listed on the OFAC Lists.  Each Borrower shall immediately notify
Administrative Agent if such Borrower has knowledge that any Borrower, any
additional Credit Party or any of their respective Affiliates or agents acting
or benefiting in any capacity in connection with the transactions contemplated
by this Agreement is or becomes a Blocked Person or becomes listed on the OFAC
Lists or (a) is convicted on, (b) pleads novo contendere to, (c) is
indicted on, or (d) is arraigned and held over on charges involving money
laundering or predicate crimes to money laundering. No Borrower will, or will
permit any Subsidiary to, directly or indirectly, (i) conduct any 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


66

















 


business or engage in any transaction or
dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit
of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in Executive Order No. 13224
or other Anti-Terrorism Law.


 


ARTICLE 6 - FINANCIAL COVENANTS


 


Borrowers
agree that, so long as any Credit Exposure exists:


 


Section 6.1            Fixed Charge Coverage Ratio.


 


(a)           Until the last day of the
fiscal quarter in which the Term Loan is paid in full, Borrowers will not
permit the Fixed Charge Coverage Ratio for any period set forth below to be
less than the ratio set forth below for such period:


 


	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  Fiscal
  quarter ending on June 30, 2010, measured on a trailing 9-month basis
  (which shall be the Defined Period for purposes of the Compliance
  Certificate)

  	
   

  	
  2.0 to 1.0

  
	
   

  	
   

  	
   

  
	
  Any
  given fiscal quarter ending on or after September 30, 2010, measured on
  a trailing 12-month basis (which shall be the Defined Period for purposes of
  the Compliance Certificate)

  	
   

  	
  2.0 to 1.0

  



 


(b)           Beginning with the next
fiscal quarter immediately following the fiscal quarter in which the Term Loan
is paid in full, Borrowers will not permit the Fixed Charge Coverage Ratio for
any period set forth below to be less than the ratio set forth below for such
period:


 


	
  Period

  	
   

  	
  Ratio

  
	
   

  	
   

  	
   

  
	
  Any
  given fiscal quarter, measured on a trailing 12-month basis (which shall be
  the Defined Period for purposes of the Compliance Certificate)

  	
   

  	
  1.0 to 1.0

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


67

















 


Notwithstanding
the foregoing, Administrative Agent may (in its sole discretion) for any fiscal
quarter replace the ratio set forth above with a less-restrictive ratio as
Administrative Agent shall from time to time specify in writing to Borrower
Representative.


 


Section 6.2            Evidence of Compliance.  Borrowers shall furnish to Administrative
Agent, together with the financial reporting required of Borrower in Section 4.1
hereof, evidence (in form and content satisfactory to Lender) of Borrowers’
compliance with the covenants in this Article and evidence that no Event
of Default specified in this Article has occurred. Such evidence shall
include, without limitation, (a) a statement and report, on a form
approved by Administrative Agent, detailing Borrowers’ calculations, and (b) if
requested by Administrative Agent, back-up documentation (including, without
limitation, invoices, receipts and other evidence of costs incurred during such
quarter as Administrative Agent shall reasonably require) evidencing the
propriety of the calculations.


 


ARTICLE 7 - CONDITIONS


 


Section 7.1            Conditions to Closing.  The obligation of each Lender to make the
initial Loans, of Administrative Agent to issue any Support Agreements on the
Closing Date and of any LC Issuer to issue any Lender Letter of Credit on the
Closing Date shall be subject to the receipt by Administrative Agent of each
agreement, document and instrument set forth on the closing checklist prepared
by Administrative Agent or its counsel, each in form and substance satisfactory
to Administrative Agent, and such other closing deliverables reasonably
requested by Administrative Agent and Lenders, and to the satisfaction of the
following conditions precedent, each to the satisfaction of Administrative
Agent and Lenders and their respective counsel in their sole discretion:


 


(a)           evidence of the consummation
of the transactions (other than the funding of the Loan and the closing of any
acquisition for which the proceeds of the Loan are purchase money) contemplated
by the Operative Documents, including without limitation the Share Exchange and
the finding of any and all investments contemplated by the Operative Documents;


 


(b)           the payment of all fees,
expenses and other amounts due and payable under each Financing Document;


 


(c)           since September 30,
2008, the absence of any material adverse change in any aspect of the business,
operations, properties, prospects or condition (financial or otherwise) of any
Credit Party or any seller of any assets or business to be purchased by any
Borrower contemporaneous with the Closing Date, or any event or condition which
could reasonably be expected to result in such a material adverse change; and


 


(d)           the receipt of the initial
Borrowing Base Certificate, prepared as of the Closing Date.


 


Each
Lender, by delivering its signature page to this Agreement, shall be
deemed to have acknowledged receipt of, and consented to and approved, each
Financing Document, each additional Operative Document and each other document,
agreement and/or instrument required to be approved by Administrative Agent,
Required Lenders or Lenders, as applicable, on the Closing Date.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


68

















 


Section 7.2            Conditions to Each Loan,
Support Agreement and Lender Letter of Credit.  The obligation of the Lenders to make a Loan
(other than Revolving Loans made pursuant to Section 2.5(c)) or an
advance in respect of any Loan, of Administrative Agent to issue any Support
Agreement or of any LC Issuer to issue any Lender Letter of Credit, (including
on the Closing Date) is subject to the satisfaction of the following additional
conditions:


 


(a)           in the case of a Revolving
Loan Borrowing, receipt by Administrative Agent of a Notice of Borrowing (or
telephonic notice if permitted by this Agreement) and updated Borrowing Base
Certificate, in the case of any Support Agreement or Lender Letter of Credit,
receipt by Administrative Agent of a Notice of LC Credit Event in accordance
with Section 2.5(a), and in the case of a Term Loan advance,
receipt by Administrative Agent of a Notice of Borrowing;


 


(b)           the fact that, immediately
after such borrowing and after application of the proceeds thereof or after
such issuance, the Revolving Loan Outstandings will not exceed the Revolving
Loan Limit;


 


(c)           the fact that, immediately
before and after such advance or issuance, no Default or Event of Default shall
have occurred and be continuing;


 


(d)           the fact that the
representations and warranties of each Credit Party contained in the Financing
Documents shall be true, correct and complete on and as of the date of such
borrowing or issuance, except to the extent that any such representation or
warranty relates to a specific date in which case such representation or
warranty shall be true and correct as of such earlier date; and


 


(e)           the fact that no adverse
change in the condition (financial or otherwise), properties, business,
prospects, or operations of Borrowers or any other Credit Party shall have
occurred and be continuing with respect to Borrowers or any Credit Party since
the date of this Agreement.


 


Each
giving of a Notice of LC Credit Event hereunder, each giving of a Notice of
Borrowing hereunder and each acceptance by any Borrower of the proceeds of any
Loan made hereunder shall be deemed to be (y) a representation and
warranty by each Borrower on the date of such notice or acceptance as to the
facts specified in this Section, and (z) a restatement by each Borrower
that each and every one of the representations made by it in any of the
Financing Documents is true and correct in all material respects as of such
date (except to the extent that such representations and warranties expressly
relate solely to an earlier date).


 


Section 7.3            Searches.  Before the Closing Date, and thereafter (as
and when determined by Administrative Agent in its discretion), Administrative
Agent shall have the right to perform, all at Borrowers’ expense, the searches
described in clauses (a), (b), (c) and (d) below against Borrowers
and any other Credit Party, the results of which are to be consistent with
Borrowers’ representations and warranties under this Agreement and the
satisfactory results of which shall be a condition precedent to all advances of
Loan proceeds, all issuances of Lender Letters of Credit and all undertakings
in respect of Support Agreements:  (a) UCC
searches with the Secretary of State of the jurisdiction in which the
applicable Person is organized; (b) 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


69

















 


judgment, pending litigation, federal tax
lien, personal property tax lien, and corporate and partnership tax lien
searches, in each jurisdiction searched under clause (a) above; and (c) searches
of applicable corporate, limited liability company, partnership and related
records to confirm the continued existence, organization and good standing of
the applicable Person and the exact legal name under which such Person is
organized.


 


Section 7.4            Post Closing Requirements.  Borrowers shall complete each of the post closing
obligations and/or provide to Administrative Agent each of the documents,
instruments, agreements and information listed on Schedule 7.4 attached
hereto on or before the date set forth for each such item thereon, each of
which shall be completed or provided in form and substance satisfactory to
Administrative Agent.


 


ARTICLE 8 -  [RESERVED]


 


ARTICLE 9 - SECURITY AGREEMENT


 


Section 9.1            Generally.  As security for the payment and performance
of the Obligations, and without limiting any other grant of a Lien and security
interest in any Security Document, Borrowers hereby assign and grant to
Administrative Agent, for the benefit of itself and Lenders, a continuing first
priority Lien on and security interest in, upon, and to the personal property
set forth on Schedule 9.1 attached hereto and made a part hereof.


 


Section 9.2            Representations and
Warranties and Covenants Relating to Collateral.


 


(a)           Each Borrower has good title
to, has rights in, and the power to transfer each item of Collateral upon which
it purports to grant a Lien hereunder, free and clear of any and all Liens
except Permitted Liens.  Except as set
forth on Schedule 9.2, each Borrower is the sole owner of the registered
Intellectual Property it purports to own. To the knowledge of Borrowers after
due inquiry, each patent is valid and enforceable and no part of the
Intellectual Property of Borrowers has been judged invalid or unenforceable, in
whole or in part, and no claim has been made that any part of the registered
Intellectual Property of Borrowers violates the rights of any third party.  Schedule 9.2 sets forth (i) each
chief executive office and principal place of business of each Borrower and
each of their respective Subsidiaries and (ii) all of the addresses
(including all warehouses) at which any of the Collateral is located and/or
books and records of Borrowers regarding any of the Collateral are kept, which
such Schedule 9.2 indicates in each case which Borrower(s) have
Collateral and/or books and records located at such address, and, in the case
of any such address not owned by one or more of the Borrowers(s), indicates the
nature of such location (e.g., leased business location operated by
Borrower(s), third party warehouse, consignment location, processor location,
etc.) and the name and address of the third party owning and/or operating such
location.


 


(b)           Without limiting the
generality of Section 3.2, except as indicated on Schedule 3.19
with respect to any rights of any Borrower as a licensee under any license of
Intellectual Property owned by another Person, and except for the filing of
financing statements under the UCC, no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or consent of
any other Person is required for (i) the grant by each Borrower to
Administrative Agent of the security interests and Liens in the Collateral
provided 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


70

















 


for under this Agreement and
the other Security Documents (if any), or (ii) the exercise by Administrative
Agent of its rights and remedies with respect to the Collateral provided for
under this Agreement and the other Security Documents or under any applicable
Law, including the UCC and neither any such grant of Liens in favor of
Administrative Agent or exercise of rights by Administrative Agent shall
violate or cause a default under any agreement between any Borrower and any
other Person relating to any such collateral, including any license to which a
Borrower is a party, whether as licensor or licensee, with respect to any
Intellectual Property, whether owned by such Borrower or any other Person.


 


(c)           As of the Closing Date, no
Borrower has any ownership interest in any Chattel Paper (as defined in Article 9
of the UCC), letter of credit rights, commercial tort claims, Instruments,
documents or investment property (other than equity interests in any
Subsidiaries of such Borrower disclosed on Schedule 4.4) or Intellectual
Property (other than Intellectual Property disclosed on Schedule 3.19),
and Borrowers shall give notice to Administrative Agent promptly (but in any
event not later than the delivery by Borrowers of the next Compliance
Certificate required pursuant to Section 4.1 above) upon the
acquisition by any Borrower of any such Chattel Paper, letter of credit rights,
commercial tort claims, Instruments, documents, investment property or
Intellectual Property.  No Person other
than Administrative Agent or (if applicable) any Lender has “control” (as
defined in Article 9 of the UCC) over any Deposit Account, investment
property (including Securities Accounts and commodities account), letter of
credit rights or electronic chattel paper in which any Borrower has any
interest (except for such control arising by operation of law in favor of any
bank or securities intermediary or commodities intermediary with whom any
Deposit Account, Securities Account or commodities account of Borrowers is
maintained).


 


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


 


(e)           Borrowers shall not adjust,
settle or compromise the amount or payment of any Account, or release wholly or
partly any Account Debtor, or allow any credit or discount thereon (other than
adjustments, settlements, compromises, credits and discounts in the Ordinary
Course of Business, made while no Default exists and in amounts which are not
material with respect to the Account and which, after giving effect thereto, do
not cause the Borrowing Base to


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


71














 


be less than the Revolving
Loan Outstandings) without the prior written consent of Administrative
Agent.  Without limiting the generality
of this Agreement or any other provisions of any of the Financing Documents relating
to the rights of Administrative Agent after the occurrence and during the
continuance of an Event of Default, Administrative Agent shall have the right
at any time after the occurrence and during the continuance of an Event of
Default to: (i) exercise the rights of Borrowers with respect to the
obligation of any Account Debtor to make payment or otherwise render
performance to Borrowers and with respect to any property that secures the
obligations of any Account Debtor or any other Person obligated on the
Collateral, and (ii) adjust, settle or compromise the amount or payment of
such Accounts.


 


(f)            Without limiting the
generality of Sections 9.2(c) and 9.2(e):


 


(i)            Borrowers shall deliver to
Administrative Agent all tangible Chattel Paper and all Instruments and
documents owned by any Borrower and constituting part of the Collateral duly
endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Administrative
Agent.  Borrowers shall provide
Administrative Agent with “control” (as defined in Article 9 of the UCC)
of all electronic Chattel Paper owned by any Borrower and constituting part of
the Collateral by having Administrative Agent identified as the assignee on the
records pertaining to the single authoritative copy thereof and otherwise
complying with the applicable elements of control set forth in the UCC.  Borrowers also shall deliver to
Administrative Agent all security agreements securing any such Chattel Paper
and securing any such Instruments. Borrowers will mark conspicuously all such
Chattel Paper and all such Instruments and documents with a legend, in form and
substance satisfactory to Administrative Agent, indicating that such Chattel
Paper and such instruments and documents are subject to the security interests and
Liens in favor of Administrative Agent created pursuant to this Agreement and
the Security Documents.  Borrowers shall
comply with all the provisions of Section 5.14 with respect to the
Deposit Accounts and Securities Accounts of Borrowers.


 


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


 


(iii)          Borrowers shall promptly
advise Administrative Agent upon any Borrower becoming aware that it has any
interests in any commercial tort claim that constitutes part of the Collateral,
which such notice shall include descriptions of the events and circumstances
giving rise to such commercial tort claim and the dates such events and
circumstances occurred, the potential defendants with respect such commercial
tort claim and any court proceedings that have been instituted with respect to
such commercial tort claims, and Borrowers shall, with respect to any such
commercial 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


72

















 


tort claim, execute and deliver to Administrative
Agent such documents as Administrative Agent shall request to perfect, preserve
or protect the Liens, rights and remedies of Administrative Agent with respect
to any such commercial tort claim.


 


(iv)          Except for Accounts and
Inventory in an aggregate amount of $25,000, no Accounts or Inventory or other
Collateral shall at any time be in the possession or control of any warehouse,
consignee, bailee or any of Borrowers’ agents or processors without prior
written notice to Administrative Agent and the receipt by Administrative Agent,
if Administrative Agent has so requested, of warehouse receipts, consignment
agreements or bailee lien waivers (as applicable) satisfactory to
Administrative Agent prior to the commencement of such possession or control.
Borrower has notified Administrative Agent that Inventory is currently located
at the locations set forth on Schedule 9.2.  Borrowers shall, upon the request of
Administrative Agent, notify any such warehouse, consignee, bailee, agent or
processor of the security interests and Liens in favor of Administrative Agent
created pursuant to this Agreement and the Security Documents, instruct such
Person to hold all such Collateral for Administrative Agent’s account subject
to Administrative Agent’s instructions and shall obtain an acknowledgement from
such Person that such Person holds the Collateral for Administrative Agent’s
benefit.


 


(v)           Borrowers shall cause all
equipment and other tangible Personal Property other than Inventory to be
maintained and preserved in the same condition, repair and in working order as
when new, ordinary wear and tear excepted, and shall promptly make or cause to
be made all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end.  Upon request of Administrative Agent,
Borrowers shall promptly deliver to Administrative Agent any and all
certificates of title, applications for title or similar evidence of ownership
of all such tangible Personal Property and shall cause Administrative Agent to
be named as lienholder on any such certificate of title or other evidence of
ownership.  Borrowers shall not permit
any such tangible Personal Property to become fixtures to real estate unless
such real estate is subject to a Lien in favor of Administrative Agent.


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


73

















 


(vii)         As of the Closing Date, no
Borrower holds, and after the Closing Date Borrowers shall promptly notify
Administrative Agent in writing upon creation or acquisition by any Borrower
of, any Collateral which constitutes a claim against any Governmental
Authority, including, without limitation, the federal government of the United
States or any instrumentality or agency thereof, the assignment of which claim
is restricted by any applicable Law, including, without limitation, the federal
Assignment of Claims Act and any other comparable Law. Upon the request of
Administrative Agent, Borrowers shall take such steps as may be necessary or
desirable, or that Administrative Agent may request, to comply with any such
applicable Law.


 


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


 


ARTICLE 10 - EVENTS OF DEFAULT


 


Section 10.1         Events of Default.


 


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


 


(a)           (i)  any Borrower shall
fail to pay within five (5) days of when due any principal, interest,
premium or fee under any Financing Document or any other amount payable under
any Financing Document, or (ii) there shall occur any default in the
performance of or compliance with any of the following sections of this
Agreement:  Article 5; Article 6;
Sections 4.4 and 4.6; and Section 2.11; provided
that, a Financial Covenant Breach shall not be an Event of Default hereunder
unless (A) such Financial Covenant Breach is not cured within the Cure
Period by the exercise of a Cure Right or (B) a Cure Right with respect to
such Financial Covenant Breach is unavailable to Borrowers;


 


(b)           any Credit Party defaults (i) in
the performance of or compliance with any term contained in this Agreement or
in any other Financing Document (other than occurrences described in other
provisions of this Section 10.1 for which a different grace or cure
period is specified or for which no grace or cure period is specified and
thereby constitute immediate Events of Default) and such default is not
remedied by the Credit Party or waived by Administrative Agent within thirty
(30) days, or (ii) in the performance of or compliance with Section 4.1
of this Agreement and such default is not remedied by the Credit Party or
waived by Administrative Agent within three (3) days;


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


74

















 


(d)           failure of any Credit Party
to pay when due or within any applicable grace period any principal, interest
or other amount on Debt in excess of $200,000 (other than the Loans) or in
respect of any Swap Contract, or the occurrence of any breach, default,
condition or event with respect to any Debt (other than the Loans) or in
respect of any Swap Contract, if the effect of such failure or occurrence is to
cause or to permit the holder or holders of any such Debt, or the counterparty
under any such Swap Contract, to cause, Debt or other liabilities having an
individual principal amount in excess of $200,000 or having an aggregate
principal amount in excess of $200,000 to become or be declared due prior to
its stated maturity;


 


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


 


(f)            an involuntary case or other
proceeding shall be commenced against any Credit Party or any Subsidiary of a
Borrower seeking liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part
of its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of forty-five (45) days; or an order for
relief shall be entered against any Credit Party or any Subsidiary of a
Borrower under applicable federal bankruptcy, insolvency or other similar law
in respect of (i) bankruptcy, liquidation, winding-up, dissolution or
suspension of general operations, (ii) composition, rescheduling,
reorganization, arrangement or readjustment of, or other relief from, or stay
of proceedings to enforce, some or all of the debts or obligations, or (iii) possession,
foreclosure, seizure or retention, sale or other disposition of, or other
proceedings to enforce security over, all or any substantial part of the assets
of such Credit Party or Subsidiary;


 


(g)           (i) institution of any
steps by any Person to terminate a Pension Plan if as a result of such
termnination any Credit Party or any member of the Controlled Group could be
required to make a contribution to such Pension Plan, or could incur a
liability or obligation to such Pension Plan, in excess of $100,000, (ii) a
contribution failure occurs with respect to any Pension Plan sufficient to give
rise to a Lien under Section 302(f) of ERISA, or (iii) there
shall occur any withdrawal or partial withdrawal from a Multiemployer Plan and
the withdrawal liability (without unaccrued interest) to Multiemployer Plans as
a result of such withdrawal (including any outstanding withdrawal liability
that any Credit Party or any member of the Controlled Group have incurred on
the date of such withdrawal) exceeds $100,000;


 


(h)           one or more judgments or
orders for the payment of money (not paid or fully covered by insurance
maintained in accordance with the requirements of this Agreement and as to
which the relevant insurance company has acknowledged coverage) aggregating in
excess of $100,000 shall be rendered against any or all Credit Parties and
either (i) enforcement 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


75

















 


proceedings shall have been
commenced by any creditor upon any such judgments or orders, or (ii) there
shall be any period of twenty (20) consecutive days during which a stay of
enforcement of any such judgments or orders, by reason of a pending appeal,
bond or otherwise, shall not be in effect;


 


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


 


(j)            indictment of any Credit
Party by any Governmental Authority;


 


(k)           an event of default occurs
under any Guarantee of any portion of the Obligations;


 


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


 


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


 


(n)           the occurrence of any fact,
event or circumstance that could reasonably be expected to result in a Material
Adverse Effect, if such default shall have continued unremedied for a period of
twenty (20) days after written notice from Administrative Agent.


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


76

















 


Section 10.3         UCC Remedies.


 


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


 


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


 


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


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


77

















 


state and local regulatory authorities having
jurisdiction over the Borrowers’ affairs, all of which contacts Borrowers
hereby irrevocably authorize.


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


78

















 


Section 10.4         Cash Collateral.  If (a) any Event of Default specified in
Section 10.1(e) or 10.1(f) shall occur, (b) the
Obligations shall have otherwise been accelerated pursuant to Section 10.2,
or (c) the Revolving Loan Commitment and the obligations of Administrative
Agent and the Lenders with respect thereto shall have been terminated pursuant
to Section 10.2, then without any request or the taking of any other
action by Administrative Agent or the Lenders, Borrowers shall immediately
comply with the provisions of Section 2.5(e) with respect to
the deposit of cash collateral to secure the existing Letter of Credit
Liability and future payment of related fees.


 


Section 10.5         Default Rate of Interest.  At the election of Administrative Agent or
Required Lenders, after the occurrence of an Event of Default and for so long
as it continues, (a) the Loans and other Obligations shall bear interest
at rates that are five percent (5.0%) per annum in excess of the rates
otherwise payable under this Agreement, and (b) the fee described in Section 2.5(b) shall
increase by a rate that is five percent (5.0%) in excess of the rate otherwise
payable under such Section.


 


Section 10.6         Setoff Rights.  During the continuance of any Event of
Default, each Lender is hereby authorized by each Borrower at any time or from
time to time, with reasonably prompt subsequent notice to such Borrower (any
prior or contemporaneous notice being hereby expressly waived) to set off and
to appropriate and to apply any and all (a) balances held by such Lender
or any of such Lender’s Affiliates at any of its offices for the account of
such Borrower or any of its Subsidiaries (regardless of whether such balances
are then due to such Borrower or its Subsidiaries), and (b) other property
at any time held or owing by such Lender to or for the credit or for the
account of such Borrower or any of its Subsidiaries, against and on account of
any of the Obligations; except that no Lender shall exercise any such right
without the prior written consent of Administrative Agent.  Any Lender exercising a right to set off
shall purchase for cash (and the other Lenders shall sell) interests in each of
such other Lender’s Pro Rata Share of the Obligations as would be necessary to
cause all Lenders to share the amount so set off with each other Lender in
accordance with their respective Pro Rata Share of the Obligations.  Each Borrower agrees, to the fullest extent
permitted by law, that any Lender and any of such Lender’s Affiliates may
exercise its right to set off with respect to the Obligations as provided in
this Section 10.5.


 


Section 10.7         Application of Proceeds.


 


(a)           Notwithstanding anything to
the contrary contained in this Agreement, upon the occurrence and during the
continuance of an Event of Default, (a) each Borrower irrevocably waives
the right to direct the application of any and all payments at any time or
times thereafter received by Administrative Agent from or on behalf of such
Borrower or any other Guarantor of all or any part of the Obligations, and, as
between Borrowers on the one hand and Administrative Agent and Lenders on the
other, Administrative Agent shall have the continuing and exclusive right to
apply and to reapply any and all payments received against the Obligations in
such manner as Administrative Agent may deem advisable notwithstanding any
previous application by Administrative Agent.


 


(b)           Notwithstanding anything to
the contrary contained in this Agreement, if an Acceleration Event shall have
occurred, and so long as it continues, Administrative Agent 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


79

















 


shall apply any and all
payments received by Administrative Agent in respect of the Obligations, and
any and all proceeds of Collateral received by Administrative Agent, in the
following order:  first, to all
fees, costs, indemnities, liabilities, obligations and expenses incurred by or
owing to Administrative Agent with respect to this Agreement, the other
Financing Documents or the Collateral; second, to all fees, costs,
indemnities, liabilities, obligations and expenses incurred by or owing to any
Lender with respect to this Agreement, the other Financing Documents or the Collateral;
third, to accrued and unpaid interest on the Obligations (including any
interest which, but for the provisions of the Bankruptcy Code, would have
accrued on such amounts); fourth, to the principal amount of the
Obligations outstanding and to provide cash collateral to secure any and all
Letter of Credit Liability and future payment of related fees, as provided for
in Section 2.5(e); and fifth to any other indebtedness or
obligations of Borrowers owing to Administrative Agent or any Lender under the
Financing Documents and sixth, to the Obligations owing to any Eligible
Swap Counterparty in respect of any Swap Contracts.  Any balance remaining shall be delivered to
Borrowers or to whoever may be lawfully entitled to receive such balance or as
a court of competent jurisdiction may direct. In carrying out the foregoing, (x) amounts
received shall be applied in the numerical order provided until exhausted prior
to the application to the next succeeding category, and (y) each of the
Persons entitled to receive a payment in any particular category shall receive
an amount equal to its pro rata share of amounts available to be applied
pursuant thereto for such category.


 


(c)           Following the occurrence and
continuance of an Event of Default, but absent the occurrence and continuance
of an Acceleration Event, Administrative Agent shall apply any and all payments
received by Administrative Agent in respect of the Obligations, and any and all
proceeds of Collateral received by Administrative Agent, in such order as Administrative
Agent may from time to time elect.


 


Section 10.8         Waivers.


 


(a)           Except as otherwise provided
for in this Agreement and to the fullest extent permitted by applicable law,
each Borrower waives: (i) presentment, demand and protest, and notice of
presentment, dishonor, intent to accelerate, acceleration, protest, default,
nonpayment, maturity, release, compromise, settlement, extension or renewal of
any or all Financing Documents, the Notes or any other notes, commercial paper,
accounts, contracts, documents, Instruments, Chattel Paper and Guarantees at
any time held by Lenders on which any Borrower may in any way be liable, and
hereby ratifies and confirms whatever Lenders may do in this regard; (ii) all
rights to notice and a hearing prior to Administrative Agent’s or any Lender’s
taking possession or control of, or to Administrative Agent’s or any Lender’s
replevy, attachment or levy upon, any Collateral or any bond or security which
might be required by any court prior to allowing Administrative Agent or any
Lender to exercise any of its remedies; and (iii) the benefit of all
valuation, appraisal and exemption Laws. 
Each Borrower acknowledges that it has been advised by counsel of its
choices and decisions with respect to this Agreement, the other Financing
Documents and the transactions evidenced hereby and thereby.


 


(b)           Each Borrower for itself and
all its successors and assigns, (i) agrees that its liability shall not be
in any manner affected by any indulgence, extension of time, renewal, waiver,
or modification granted or consented to by Lender; (ii) consents to any
indulgences and all extensions of time, renewals, waivers, or modifications
that may be granted by Administrative 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


80

















 


Agent or any Lender with
respect to the payment or other provisions of the Financing Documents, and to
any substitution, exchange or release of the Collateral, or any part thereof,
with or without substitution, and agrees to the addition or release of any
Borrower, endorsers, guarantors, or sureties, or whether primarily or
secondarily liable, without notice to any other Borrower and without affecting
its liability hereunder; (iii) agrees that its liability shall be
unconditional and without regard to the liability of any other Borrower,
Administrative Agent or any Lender for any tax on the indebtedness; and (iv) to
the fullest extent permitted by law, expressly waives the benefit of any
statute or rule of law or equity now provided, or which may hereafter be
provided, which would produce a result contrary to or in conflict with the
foregoing.


 


(c)           To the extent that
Administrative Agent or any Lender may have acquiesced in any noncompliance
with any requirements or conditions precedent to the closing of the Loans or to
any subsequent disbursement of Loan proceeds, such acquiescence shall not be
deemed to constitute a waiver by Administrative Agent or any Lender of such
requirements with respect to any future disbursements of Loan proceeds and
Administrative Agent may at any time after such acquiescence require Borrowers
to comply with all such requirements. 
Any forbearance by Administrative Agent or Lender in exercising any
right or remedy under any of the Financing Documents, or otherwise afforded by
applicable law, including any failure to accelerate the maturity date of the
Loans, shall not be a waiver of or preclude the exercise of any right or remedy
nor shall it serve as a novation of the Notes or as a reinstatement of the
Loans or a waiver of such right of acceleration or the right to insist upon
strict compliance of the terms of the Financing Documents. Administrative Agent’s
or any Lender’s acceptance of payment of any sum secured by any of the
Financing Documents after the due date of such payment shall not be a waiver of
Administrative Agent’s and such Lender’s right to either require prompt payment
when due of all other sums so secured or to declare a default for failure to
make prompt payment.  The procurement of
insurance or the payment of taxes or other Liens or charges by Administrative
Agent as the result of an Event of Default shall not be a waiver of
Administrative Agent’s right to accelerate the maturity of the Loans, nor shall
Administrative Agent’s receipt of any condemnation awards, insurance proceeds,
or damages under this Agreement operate to cure or waive any Credit Party’s
default in payment of sums secured by any of the Financing Documents.


 


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


 


(e)           Nothing contained herein or
in any other Financing Document shall be construed as requiring Administrative
Agent or any Lender to resort to any part of the Collateral for the
satisfaction of any of Borrowers’ obligations under the Financing Documents in
preference or priority to any other Collateral, and Administrative Agent may
seek satisfaction out of all of the Collateral or any part thereof, in its
absolute discretion in respect of Borrowers’


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


81














 


obligations under the
Financing Documents.  In addition,
Administrative Agent shall have the right from time to time to partially
foreclose upon any Collateral in any manner and for any amounts secured by the
Financing Documents then due and payable as determined by Administrative Agent
in its sole discretion, including, without limitation, the following
circumstances:  (i) in the event any
Borrower defaults beyond any applicable grace period in the payment of one or
more scheduled payments of principal and/or interest, Administrative Agent may
foreclose upon all or any part of the Collateral to recover such delinquent
payments, or (ii) in the event Administrative Agent elects to accelerate
less than the entire outstanding principal balance of the Loans, Administrative
Agent may foreclose all or any part of the Collateral to recover so much of the
principal balance of the Loans as Lender may accelerate and such other sums
secured by one or more of the Financing Documents as Administrative Agent may
elect.  Notwithstanding one or more
partial foreclosures, any unforeclosed Collateral shall remain subject to the
Financing Documents to secure payment of sums secured by the Financing
Documents and not previously recovered.


 


(f)            To the fullest extent
permitted by law, each Borrower, for itself and its successors and assigns,
waives in the event of foreclosure of any or all of the Collateral any
equitable right otherwise available to any Credit Party which would require the
separate sale of any of the Collateral or require Administrative Agent or
Lenders to exhaust their remedies against any part of the Collateral before
proceeding against any other part of the Collateral; and further in the event
of such foreclosure each Borrower does hereby expressly consent to and
authorize, at the option of Administrative Agent, the foreclosure and sale
either separately or together of each part of the Collateral.


 


Section 10.9         Injunctive Relief.  The parties acknowledge and agree that, in
the event of a breach or threatened breach of any Credit Party’s obligations
under any Financing Documents, Administrative Agent and Lenders may have no
adequate remedy in money damages and, accordingly, shall be entitled to an
injunction (including, without limitation, a temporary restraining order,
preliminary injunction, writ of attachment, or order compelling an audit)
against such breach or threatened breach, including, without limitation,
maintaining any cash management and collection procedure described herein.  However, no specification in this Agreement
of a specific legal or equitable remedy shall be construed as a waiver or
prohibition against any other legal or equitable remedies in the event of a
breach or threatened breach of any provision of this Agreement.  Each Credit Party waives, to the fullest
extent permitted by law, the requirement of the posting of any bond in
connection with such injunctive relief. 
By joining in the Financing Documents as a Credit Party, each Credit
Party specifically joins in this Section as if this Section were a
part of each Financing Document executed by such Credit Party.


 


Section 10.10       Marshalling; Payments Set
Aside.  Neither Administrative Agent
nor any Lender shall be under any obligation to marshal any assets in payment
of any or all of the Obligations. To the extent that Borrower makes any payment
or Administrative Agent enforces its Liens or Administrative Agent or any
Lender exercises its right of set-off, and such payment or the proceeds of such
enforcement or set-off is subsequently invalidated, declared to be fraudulent
or preferential, set aside, or required to be repaid by anyone, then to the
extent of such recovery, the Obligations or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefore, shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or set-off had not occurred.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


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ARTICLE 11 - ADMINISTRATIVE AGENT


 


Section 11.1         Appointment and
Authorization.  Each Lender
hereby irrevocably appoints and authorizes Administrative Agent to enter into
each of the Financing Documents to which it is a party (other than this
Agreement) on its behalf and to take such actions as Administrative Agent on
its behalf and to exercise such powers under the Financing Documents as are
delegated to Administrative Agent by the terms thereof, and/or by the terms of
any interlender or agency agreement entered into among Administrative Agent and
Lenders, together with all such powers as are reasonably incidental
thereto.  Subject to the terms of Section 11.16
and to the terms of the other Financing Documents and/or any such interlender
or agency agreement, Administrative Agent is authorized and empowered to amend,
modify, or waive any provisions of this Agreement or the other Financing
Documents on behalf of Lenders.  The
provisions of this Article 11 are solely for the benefit of Administrative
Agent and Lenders and neither any Borrower nor any other Credit Party shall
have any rights as a third party beneficiary of any of the provisions hereof.
In performing its functions and duties under this Agreement, Administrative
Agent shall act solely as agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Borrower or any other Credit Party.  Administrative Agent may perform any of its
duties hereunder, or under the Financing Documents and/or any such interlender
or agency agreement, by or through its agents or employees.


 


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


 


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


 


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


 


Section 11.5         Liability of Administrative
Agent.  Neither Administrative Agent
nor any of its directors, officers, agents or employees shall be liable to any
Lender for any action taken or not taken by it in connection with the Financing
Documents, except that Administrative Agent shall be liable with respect to its
specific duties set forth hereunder but only to the extent of its own gross
negligence or willful misconduct in the discharge thereof as determined by a
final non-appealable judgment of a court of competent jurisdiction.  Neither Administrative Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


83

















 


ascertain, inquire into or verify (a) any
statement, warranty or representation made in connection with any Financing
Document or any borrowing hereunder; (b) the performance or observance of
any of the covenants or agreements specified in any Financing Document; (c) the
satisfaction of any condition specified in any Financing Document; (d) the
validity, effectiveness, sufficiency or genuineness of any Financing Document,
any Lien purported to be created or perfected thereby or any other instrument
or writing furnished in connection therewith; (e) the existence or
non-existence of any Default or Event of Default; or (f) the financial
condition of any Credit Party. Administrative Agent shall not incur any
liability by acting in reliance upon any notice, consent, certificate,
statement, or other writing (which may be a bank wire, telex, facsimile or
electronic transmission or similar writing) believed by it to be genuine or to
be signed by the proper party or parties. 
Administrative Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith and if any such apportionment
or distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to
such Lender any such erroneous payments received by them).


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


84

















 


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


 


Section 11.9         Collateral Matters.  Lenders irrevocably authorize Administrative
Agent, at its option and in its discretion, to (a) release any Lien
granted to or held by Administrative Agent under any Security Document (i) upon
termination of the Loan Commitment and payment in full of all Obligations, and,
to the extent required by Administrative Agent in its sole discretion, the
expiration, termination or cash collateralization (to the satisfaction of
Administrative Agent) of all Swap Contracts secured, in whole or in part, by
any Collateral; or (ii) constituting property sold or disposed of as part
of or in connection with any disposition permitted under any Financing Document
(it being understood and agreed that Administrative Agent may conclusively rely
without further inquiry on a certificate of a Responsible Officer as to the
sale or other disposition of property being made in full compliance with the
provisions of the Financing Documents); and (b) release or subordinate any
Lien granted to or held by Administrative Agent under any Security Document
constituting personal property described in Section 5.6 (it being
understood and agreed that Administrative Agent may conclusively rely without
further inquiry on a certificate of a Responsible Officer as to the
identification of any personal property described in Section 5.6).  Upon request by Administrative Agent at any
time, Lenders will confirm Administrative Agent’s authority to release and/or
subordinate particular types or items of Collateral pursuant to this Section 11.9.


 


Section 11.10       Agency for Perfection.  Administrative Agent and each Lender hereby
appoint each other Lender as agent for the purpose of perfecting Administrative
Agent’s security interest in assets which, in accordance with the Uniform
Commercial Code in any applicable jurisdiction, can be perfected by possession
or control.  Should any Lender (other
than Administrative Agent) obtain possession or control of any such assets,
such Lender shall notify Administrative Agent thereof, and, promptly upon
Administrative Agent’s request therefor, shall deliver such assets to
Administrative Agent or in accordance with Administrative Agent’s instructions
or transfer control to Administrative Agent in accordance with Administrative
Agent’s instructions.  Each Lender agrees
that it will not have any right individually to enforce or seek to enforce any
Security Document or to realize upon any Collateral for the Loan unless
instructed to do so by Administrative Agent (or consented to by Administrative
Agent, as provided in Section 11.7), it being understood and agreed
that such rights and remedies may be exercised only by Administrative Agent.


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


85

















 


to such Default or Event of Default as may be
requested by Required Lenders (or all or such other portion of the Lenders as
shall be prescribed by this Agreement) in accordance with the terms
hereof.  Unless and until Administrative
Agent has received any such request, Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interests of Lenders.


 


Section 11.12       Assignment by Administrative
Agent; Resignation of Administrative Agent; Successor Administrative Agent.


 


(a)           Administrative Agent may at
any time assign its rights, powers, privileges and duties hereunder to (i) another
Lender or (ii) any Person to whom Administrative Agent, in its capacity as
a Lender, has assigned (or will assign, in conjunction with such assignment of
agency rights hereunder) 50% or more of its Loan, in each case without the
consent of the Lenders or Borrowers. 
Following any such assignment, Administrative Agent shall give notice to
the Lenders and Borrowers.  An assignment
by Administrative Agent pursuant to this subsection (a) shall not be
deemed a resignation by Administrative Agent for purposes of subsection (b) below.


 


(b)           Without limiting the rights
of Administrative Agent to designate an assignee pursuant to subsection (a) above,
Administrative Agent may at any time give notice of its resignation to the
Lenders and Borrowers.  Upon receipt of
any such notice of resignation, Required Lenders shall have the right to
appoint a successor Administrative Agent. 
If no such successor shall have been so appointed by Required Lenders
and shall have accepted such appointment within ten (10) Business Days
after the retiring Administrative Agent gives notice of its resignation, then
the retiring Administrative Agent may on behalf of the Lenders, appoint a
successor Administrative Agent; provided that if Administrative Agent shall
notify Borrowers and the Lenders that no Person has accepted such appointment,
then such resignation shall nonetheless become effective in accordance with
such notice from Administrative Agent that no Person has accepted such
appointment and, from and following delivery of such notice, (i) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Financing Documents and (ii) all
payments, communications and determinations provided to be made by, to or
through Administrative Agent shall instead be made by or to each Lender
directly, until such time as Required Lenders appoint a successor
Administrative Agent as provided for above in this paragraph.


 


(c)           Upon (i) an assignment
permitted by subsection (a) above or (ii) the acceptance of a
successor’s appointment as Administrative Agent pursuant to subsection (b) above,
such successor shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring (or retired) Administrative
Agent, and the retiring Administrative Agent shall be discharged from all of
its duties and obligations hereunder and under the other Financing Documents
(if not already discharged therefrom as provided above in this paragraph).  The fees payable by Borrowers to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between Borrowers and such successor.  After the retiring Administrative Agent’s
resignation hereunder and under the other Financing Documents, the provisions
of this Article and Section 11.12 shall continue in effect for
the benefit of such retiring Administrative Agent and its sub-agents in respect
of any actions 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


86

















 


taken or omitted to be taken
by any of them while the retiring Administrative Agent was acting or was
continuing to act as Administrative Agent.


 


Section 11.13       Payment and Sharing of
Payment.


 


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


 


(i)            Administrative Agent shall
have the right, on behalf of Revolving Lenders to disburse funds to Borrowers
for all Revolving Loans requested or deemed requested by Borrowers pursuant to
the terms of this Agreement. Administrative Agent shall be conclusively
entitled to assume, for purposes of the preceding sentence, that each Revolving
Lender, other than any Non-Funding Revolving Lenders, will fund its Pro Rata
Share of all Revolving Loans requested by Borrowers. Each Revolving Lender
shall reimburse Administrative Agent on demand, in accordance with the
provisions of the immediately following paragraph, for all funds disbursed on
its behalf by Administrative Agent pursuant to the first sentence of this
clause (i), or if Administrative Agent so requests, each Revolving Lender will
remit to Administrative Agent its Pro Rata Share of any Revolving Loan before
Administrative Agent disburses the same to a Borrower. If Administrative Agent
elects to require that each Revolving Lender make funds available to
Administrative Agent, prior to a disbursement by Administrative Agent to a
Borrower, Administrative Agent shall advise each Revolving Lender by telephone,
facsimile or e-mail of the amount of such Revolving Lender’s Pro Rata Share of
the Revolving Loan requested by such Borrower no later than noon (Eastern time)
on the date of funding of such Revolving Loan, and each such Revolving Lender
shall pay Administrative Agent on such date such Revolving Lender’s Pro Rata
Share of such requested Revolving Loan, in same day funds, by wire transfer to
the Payment Account, or such other account as may be identified by
Administrative Agent to Revolving Lenders from time to time. If any Lender
fails to pay the amount of its Pro Rata Share of any funds advanced by
Administrative Agent pursuant to the first sentence of this clause (i) within
one (1) Business Day after Administrative Agent’s demand, Administrative
Agent shall promptly notify Borrower Representative, and Borrowers shall
immediately repay such amount to Administrative Agent. Any repayment required
by Borrowers pursuant to this Section 11.13 shall be accompanied by
accrued interest thereon from and including the date such amount is made
available to a Borrower to but excluding the date of payment at the rate of
interest then applicable to Revolving Loans. 
Nothing in this Section 11.13 or elsewhere in this Agreement
or the other Financing Documents shall be deemed to require Administrative
Agent to advance funds on behalf of any Lender or to relieve any Lender from
its obligation to fulfill its commitments hereunder or to prejudice any rights
that Administrative Agent or any Borrower may have against any Lender as a
result of any default by such Lender hereunder.


 


(ii)           On a Business Day of each
week as selected from time to time by Administrative Agent, or more frequently
(including daily), if Administrative Agent so elects (each such day being a “Settlement Date”), Administrative Agent
will advise each Revolving Lender by telephone, facsimile or e-mail of the
amount of each such Revolving Lender’s percentage interest of the Revolving
Loan balance as of the close of 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


87

















 


business of the Business Day immediately preceding
the Settlement Date. In the event that payments are necessary to adjust the
amount of such Revolving Lender’s actual percentage interest of the Revolving
Loans to such Lender’s required percentage interest of the Revolving Loan
balance as of any Settlement Date, the Revolving Lender from which such payment
is due shall pay Administrative Agent, without setoff or discount, to the
Payment Account not later than 1:00 p.m. (Eastern time) on the Business
Day following the Settlement Date the full amount necessary to make such
adjustment.  Any obligation arising
pursuant to the immediately preceding sentence shall be absolute and
unconditional and shall not be affected by any circumstance whatsoever.  In the event settlement shall not have
occurred by the date and time specified in the second preceding sentence,
interest shall accrue on the unsettled amount at the Federal Funds Rate, for
the first three (3) days following the scheduled date of settlement, and
thereafter at the LIBOR Rate plus the LIBOR Margin applicable to Revolving
Loans.


 


(iii)          On each Settlement Date,
Administrative Agent shall advise each Revolving Lender by telephone, facsimile
or e-mail of the amount of such Revolving Lender’s percentage interest of
principal, interest and fees paid for the benefit of Revolving Lenders with
respect to each applicable Revolving Loan, to the extent of such Revolving
Lender’s Revolving Loan Exposure with respect thereto, and shall make payment to
such Revolving Lender not later than 1:00 p.m. (Eastern time) on the
Business Day following the Settlement Date of such amounts in accordance with
wire instructions delivered by such Revolving Lender to Administrative Agent,
as the same may be modified from time to time by written notice to
Administrative Agent; provided, however, that, in the case such Revolving
Lender is a Defaulted Lender, Administrative Agent shall be entitled to set off
the funding short-fall against that Defaulted Lender’s respective share of all
payments received from any Borrower.


 


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


 


(v)           It is understood that for
purposes of advances to Borrowers made pursuant to this Section 11.13,
Administrative Agent will be using the funds of Administrative Agent, and
pending settlement, (a) all funds transferred from the Payment Account to
the outstanding Revolving Loans shall be applied first to advances made by
Administrative Agent to Borrowers pursuant to this Section 11.13
and (b) all interest accruing on such advances shall be payable to
Administrative Agent.


 


(vi)          The provisions of this Section 11.13(a) shall
be deemed to be binding upon Administrative Agent and Lenders notwithstanding
the occurrence of any 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


88

















 


Default or Event of Default, or any insolvency or
bankruptcy proceeding pertaining to any Borrower or any other Credit Party.


 


(b)           Term Loan Payments.  Payments of principal, interest and fees in
respect of the Term Loan will be settled on the date of receipt if received by
Administrative Agent on the last Business Day of a month or on the Business Day
immediately following the date of receipt if received on any day other than the
last Business Day of a month.


 


(c)           Return of Payments.


 


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


 


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


 


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


 


(e)           Sharing of Payments.  If any Lender shall obtain any payment or
other recovery (whether voluntary, involuntary, by application of setoff or
otherwise) on account of any Loan (other than pursuant to the terms of Section 2.8(d))
in excess of its pro rata share of payments entitled pursuant to the other
provisions of this Section 11.13, such Lender shall purchase from
the other Lenders such participations in extensions of credit made by such
other Lenders (without recourse, representation or warranty) as shall be
necessary to cause such purchasing Lender to share the excess payment or other
recovery ratably with each of them; provided, however, that if all or any
portion of the excess payment or other recovery is thereafter required to be
returned or otherwise recovered from such purchasing Lender, such portion of
such purchase shall be rescinded and each Lender which has sold a participation
to the 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


89

















 


purchasing Lender shall
repay to the purchasing Lender the purchase price to the ratable extent of such
return or recovery, without interest. Each Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this clause (d) may,
to the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to Section 10.5) with respect to such
participation as fully as if such Lender were the direct creditor of Borrowers
in the amount of such participation).  If
under any applicable bankruptcy, insolvency or other similar law, any Lender
receives a secured claim in lieu of a setoff to which this clause (d) applies,
such Lender shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the Lenders
entitled under this clause (d) to share in the benefits of any recovery on
such secured claim.


 


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


 


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


 


Section 11.16       Amendments and Waivers.


 


(a)           No provision of this
Agreement or any other Financing Document may be materially amended, waived or
otherwise modified unless such amendment, waiver or other modification is in
writing and is signed or otherwise approved by Borrowers, the Required Lenders
and any other Lender to the extent required under Section 11.16(b);
provided, however,
that Administrative Agent shall be entitled, in its sole and absolute discretion,
to waive any financial covenant of any Credit Party (for no more than two
consecutive quarters) and to provide its written consent to a proposed Swap
Contract without the consent of any other Lender.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


90

















 


(b)           In addition to the required
signatures under Section 11.16(a), no provision of this Agreement
or any other Financing Document may be amended, waived or otherwise modified
unless such amendment, waiver or other modification is in writing and is signed
or otherwise approved by the following Persons:


 


(i)            if any amendment, waiver or
other modification would increase a Lender’s funding obligations in respect of
any Loan, by such Lender; and/or


 


(ii)           if the rights or duties of
Administrative Agent or LC Issuer are affected thereby, by Administrative Agent
and LC Issuer, as the case may be;


 


provided, however, that, in each of (i) and (ii) above, no
such amendment, waiver or other modification shall, unless signed or otherwise
approved in writing by all the Lenders directly affected thereby, (i) reduce
the principal of, rate of interest on or any fees with respect to any Loan or
Reimbursement Obligation or forgive any principal, interest (other than default
interest) or fees (other than late charges) with respect to any Loan or
Reimbursement Obligation; (ii) postpone the date fixed for, or waive, any
payment (other than any mandatory prepayment pursuant to Section 2.1(b)(ii))
of principal of any Loan or of any Reimbursement Obligation, or of interest on
any Loan or Reimbursement Obligation (other than default interest) or any fees
provided for hereunder (other than late charges) or postpone the date of
termination of any commitment of any Lender hereunder; (iii) change the
definition of the term Required Lenders or the percentage of Lenders which
shall be required for Lenders to take any action hereunder; (iv) release
all or substantially all of the Collateral, authorize any Borrower to sell or
otherwise dispose of all or substantially all of the Collateral or release any
Guarantor of all or any portion of the Obligations or its Guarantee obligations
with respect thereto, except, in each case with respect to this clause (iv), as
otherwise may be provided in this Agreement or the other Financing Documents
(including in connection with any disposition permitted hereunder); (v) amend,
waive or otherwise modify this Section 11.16(b) or the
definitions of the terms used in this Section 11.16(b) insofar
as the definitions affect the substance of this Section 11.16(b); (vi) consent
to the assignment, delegation or other transfer by any Credit Party of any of
its rights and obligations under any Financing Document or release any Borrower
of its payment obligations under any Financing Document, except, in each case
with respect to this clause (vi), pursuant to a merger or consolidation
permitted pursuant to this Agreement; or (viii) amend any of the
provisions of Section 10.7 or amend any of the definitions Pro Rata
Share, Revolving Loan Commitment, Term Loan Commitment, Revolving Loan
Commitment Amount, Term Loan Commitment Amount, Revolving Loan Commitment
Percentage, Term Loan Commitment Percentage or that provide for the Lenders to
receive their Pro Rata Shares of any fees, payments, setoffs or proceeds of
Collateral hereunder.  It is hereby
understood and agreed that all Lenders shall be deemed directly affected by an
amendment, waiver or other modification of the type described in the preceding
clauses (iii), (iv), (v), (vi) and (vii) of the preceding sentence.


 


(c)           Without limitation of the
provisions of the preceding clause (a) and (b), no waiver, amendment or
other modification to this Agreement shall, unless signed by each Eligible Swap
Counterparty then in existence, modify the provisions of Section 10.7
in any manner adverse to the interests of each such Eligible Swap Counterparty.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


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Section 11.17       Assignments and
Participations.


 


(a)           Assignments.


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


92

















 


(iv)          Notwithstanding the foregoing provisions of this Section 11.17(a) or
any other provision of this Agreement, any Lender may at any time pledge or
assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; provided, however, that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.


 


(v)           Notwithstanding the foregoing provisions of this Section 11.17(a) or
any other provision of this Agreement, Administrative Agent has the right, but
not the obligation, to effectuate assignments of Loan via an electronic
settlement system acceptable to Administrative Agent as designated in writing
from time to time to the Lenders by Administrative Agent (the “Settlement Service”).  At any time when the Administrative Agent
elects, in its sole discretion, to implement such Settlement Service, each such
assignment shall be effected by the assigning Lender and proposed assignee
pursuant to the procedures then in effect under the Settlement Service, which
procedures shall be consistent with the other provisions of this Section 11.17(a).  Each assigning Lender and proposed Eligible
Assignee shall comply with the requirements of the Settlement Service in
connection with effecting any assignment of Loan pursuant to the Settlement
Service.  With the prior written approval
of Administrative Agent, Administrative Agent’s approval of such Eligible
Assignee shall be deemed to have been automatically granted with respect to any
transfer effected through the Settlement Service.  Assignments and assumptions of the Loan shall
be effected by the provisions otherwise set forth herein until Administrative
Agent notifies Lenders of the Settlement Service as set forth herein.


 


(b)           Participations.  Any Lender may at any time, without the
consent of, or notice to, any Borrower or Administrative Agent, sell to one or
more Persons participating interests in its Loan, commitments or other
interests hereunder (any such Person, a “Participant”).  In the event of a sale by a Lender of a
participating interest to a Participant, (i) such Lender’s obligations
hereunder shall remain unchanged for all purposes, (ii) Borrowers and
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations hereunder, and (iii) all
amounts payable by each Borrower shall be determined as if such Lender had not
sold such participation and shall be paid directly to such Lender.  Each Borrower agrees that if amounts
outstanding under this Agreement are due and payable (as a result of
acceleration or otherwise), each Participant shall be deemed to have the right
of set-off in respect of its participating interest in amounts owing under this
Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement; provided, however, that
such right of set-off shall be subject to the obligation of each Participant to
share with Lenders, and Lenders agree to share with each Participant, as
provided in Section 11.5.


 


(c)           Replacement of Lenders.  Within thirty (30) days after: (i) receipt
by Administrative Agent of notice and demand from any Lender for payment of
additional costs as provided in Section 2.8(d), which demand shall not
have been revoked, (ii) any Borrower is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any
Lender pursuant to Section 2.8(a), (iii) any Lender is a Defaulted
Lender, and the


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


93

















 


circumstances causing such
status shall not have been cured or waived; or (iv) any failure by any Lender
to consent to a requested amendment, waiver or modification to any Financing
Document in which Required Lenders have already consented to such amendment,
waiver or modification but the consent of each Lender, or each Lender affected
thereby, is required with respect thereto (each relevant Lender in the
foregoing clauses (i) through (iv) being an “Affected Lender”) each of Borrower
Representative and Administrative Agent may, at its option, notify such
Affected Lender and, in the case of Borrowers’ election, the Administrative
Agent, of such Person’s intention to obtain, at Borrowers’ expense, a
replacement Lender (“Replacement Lender”)
for such Lender, which Replacement Lender shall be an Eligible Assignee and, in
the event the Replacement Lender is to replace an Affected Lender described in
the preceding clause (iv), such Replacement Lender consents to the requested
amendment, waiver or modification making the replaced Lender an Affected
Lender.  In the event Borrowers or
Administrative Agent, as applicable, obtains a Replacement Lender within ninety
(90) days following notice of its intention to do so, the Affected Lender shall
sell, at par, and assign all of its Loan and funding commitments hereunder to
such Replacement Lender in accordance with the procedures set forth in Section 11.17(a);
provided, however, that (A) Borrowers shall have reimbursed such Lender
for its increased costs and additional payments for which it is entitled to
reimbursement under Section 2.8(a) or Section 2.8(d),
as applicable, of this Agreement through the date of such sale and assignment,
and (B) Borrowers shall pay to Administrative Agent the $3,500 processing
fee in respect of such assignment.  In
the event that a replaced Lender does not execute an Assignment Agreement pursuant
to Section 11.17(a) within five (5) Business Days after
receipt by such replaced Lender of notice of replacement pursuant to this Section 11.17(c) and
presentation to such replaced Lender of an Assignment Agreement evidencing an
assignment pursuant to this Section 11.17(c), such replaced Lender
shall be deemed to have consented to the terms of such Assignment Agreement,
and any such Assignment Agreement executed by Administrative Agent, the
Replacement Lender and, to the extent required pursuant to Section 11.17(a),
Borrowers, shall be effective for purposes of this Section 11.17(c) and
Section 11.17(a).  Upon any
such assignment and payment, such replaced Lender shall no longer constitute a “Lender”
for purposes hereof, other than with respect to such rights and obligations
that survive termination as set forth in Section 12.1.


 


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


 


Section 11.18       Funding and Settlement
Provisions Applicable When Non-Funding Lenders Exist.


 


So
long as Administrative Agent has not waived the conditions to the funding of
Revolving Loans set forth in Section 7.2, any Lender may deliver a
notice to Administrative Agent stating that such Lender shall cease making
Revolving Loans due to the non-satisfaction of one or more conditions to
funding Loans set forth in Section 7.2, and specifying any such
non-satisfied conditions. Any Lender delivering any such notice shall become a
non-funding Lender (a “Non-Funding Lender”)
for purposes of this Agreement commencing on the Business Day following receipt
by Administrative Agent of such notice, and shall cease to be a Non-Funding
Lender on the date on which (i) such Lender has either revoked the
effectiveness of such notice or acknowledged in writing to each of
Administrative Agent the satisfaction of the condition(s) 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


94

















 


specified
in such notice, or (ii) Required Lenders waive the conditions to the
funding of such Loans giving rise to such notice by Non-Funding Lender.  Each Non-Funding Lender shall remain a Lender
for purposes of this Agreement to the extent that such Non-Funding Lender has
Revolving Loans Outstanding in excess of zero or Term Loans outstanding in
excess of zero; provided, that during any period
of time that any Non-Funding Lender exists, and notwithstanding any provision
to the contrary set forth herein, the following provisions shall apply:


 


(a)           For purposes of determining the Pro
Rata Share of each Revolving Lender under clause (d) of the definition of
such term, each Non-Funding Lender shall be deemed to have a Revolving Loan
Commitment Amount and Term Loan Commitment Amount as in effect immediately
before such Lender became a Non-Funding Lender.


 


(b)           Except as provided in clause (a) above,
the Revolving Loan Commitment Amount and Term Loan Commitment Amount of each
Non-Funding Lender shall be deemed to be zero.


 


(c)           The Revolving Loan Commitment at any
date of determination during such period shall be deemed to be equal to the sum
of (i) the aggregate Revolving Loan Commitment Amounts of all Lenders,
other than the Non-Funding Lenders as of such date, plus (ii) the
aggregate Revolving Loan Outstandings of all Non-Funding Lenders as of such
date.


 


(d)           The Term Loan Commitment at any date
of determination during such period shall be deemed to be equal to the sum of (i) the
aggregate Term Loan Commitment Amounts of all Lenders, other than the
Non-Funding Lenders as of such date, plus (ii) the aggregate principal
amount outstanding under the Term Loans of all Non-Funding Lenders as of such
date.


 


(e)           Administrative Agent shall have no
right to make or disburse Revolving Loans or Term Loan advances for the account
of any Non-Funding Lender pursuant to Section 11.13, or to assume
that any Non-Funding Lender will fund its Pro Rata Share of any Revolving Loans
requested by Borrower during such period.


 


(f)            Administrative Agent shall have no
right to make or disburse Revolving Loans for the account of any Non-Funding
Lender pursuant to Section 2.1(b)(i) to pay interest, fees,
expenses and other charges of any Credit Party, other than reimbursement obligations
that have arisen pursuant to Section 2.5(c) in respect of
Letters of Credit issued at the time such Non-Funding Lender was not then a
Non-Funding Lender.


 


(g)           Administrative Agent shall have no
right to (i) make or disburse Revolving Loans as provided in Section 2.1(b)(i) for
the account of any Revolving Lender that was a Non-Funding Lender at the time
of issuance of any Letter of Credit for which funding or reimbursement
obligations have arisen pursuant to Section 2.5(c), or (ii) assume
that any Revolving Lender that was a Non-Funding Lender at the time of issuance
of such Letter of Credit will fund any portion of the Revolving Loans to be
funded pursuant to Section 2.5(c) in respect of such Letter of
Credit. In addition, no Revolving Lender that was a Non-Funding Lender at the
time of issuance of any Letter of Credit for which funding or reimbursement


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


95

















 


obligations have arisen
pursuant to Section 2.5(c), shall have an obligation to fund any
portion of the Revolving Loans to be funded pursuant to Section 2.5(c) in
respect to such Letter of Credit, or to make any payment to Administrative
Agent or the L/C Issuer, as applicable, under Section 2.5(f)(ii) in
respect of such Letter of Credit, or be deemed to have purchased any interest
or participation in such Letter of Credit from Administrative Agent or the L/C
Issuer, as applicable, under Section 2.5(f)(i).


 


(h)           To the extent that Administrative
Agent applies proceeds of Collateral or other payments received by
Administrative Agent to repayment of Revolving Loans pursuant to Section 10.7,
such payments and proceeds shall be applied first in respect of Revolving Loans
made at the time any Non-Funding Lenders exist, and second in respect of all
other outstanding Revolving Loans.


 


Section 11.19       Buy-Out Upon Refinancing.  MCF shall have the right to purchase from the
other Lenders all of their respective interests in the Loan at par in
connection with any refinancing of the Loan upon one or more new economic
terms, but which refinancing is structured as an amendment and restatement of
the Loan rather than a payoff of the Loan.


 


Section 11.20       Definitions.  As used in this Article 11, the
following terms have the following meanings:


 


“Additional Titled Administrative Agents” has the meaning set
forth in Section 11.15.


 


“Affected Lender” has the meaning set forth in Section 11.17(c).


 


“Approved Fund” means any (a) investment company, fund,
trust, securitization vehicle or conduit that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the Ordinary Course of Business or (b) any
Person (other than a natural person) which temporarily warehouses loans for any
Lender or any entity described in the preceding clause (a) and that, with
respect to each of the preceding clauses (a) and (b), is administered or
managed by (i) a Lender, (ii) an Affiliate of a Lender, or (iii) a
Person (other than a natural person) or an Affiliate of a Person (other than a
natural person) that administers or manages a Lender.


 


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


 


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


 


“Eligible Assignee” means (a) a Lender, (b) an
Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person
(other than a natural person) approved by Administrative Agent; provided, however, that
notwithstanding the foregoing, (x) “Eligible Assignee”
shall not include any Borrower or any of a Borrower’s Affiliates and (y) no
proposed assignee intending to assume any unfunded portion of the Term Loan
Commitment shall be an Eligible Assignee unless such proposed assignee either
already holds a portion of such Revolving Loan


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


96

















 


Commitment
or Term Loan Commitment, or has been approved as an Eligible Assignee by
Administrative Agent.


 


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


 


“Replacement Lender” has the meaning set forth in Section 11.17(c).


 


“Settlement Service” has the meaning set forth in Section 11.17(a)(v).


 


Section 11.21       Deed of Hypothec.  For the purposes of holding any security
granted by any Borrower or any other Credit Party pursuant to the laws of the
Province of Quebec to secure payment of any bond issued by any Borrower or any
Credit Party, each Lender hereby irrevocably appoints and authorizes
Administrative Agent and, to the extent necessary, ratifies the appointment and
authorization of Administrative Agent, to act as the person holding the power
of attorney (i.e., “fondé de pouvoir”) (in such capacity, the “Attorney”) of Administrative Agent and the
Lenders as contemplated under Article 2692 of the Civil Code of Québec,
and to enter into, to take and to hold on its behalf, and for its benefit, any
hypothec, and to exercise such powers and duties that are conferred upon the
Attorney under any hypothec.  Moreover,
without prejudice to such appointment and authorization to act as the person
holding the power of attorney as aforesaid, each Lender hereby irrevocably
appoints and authorizes Administrative Agent (in such capacity, the “Custodian”) to act as agent and custodian
for and on behalf of itself and the Lenders to hold and be the sole registered
holder of any bond which may be issued under any hypothec, the whole
notwithstanding Section 32 of An Act respecting the special powers of
legal persons (Quebec) or any other applicable law, and to execute all related
documents.  Each of the Attorney and the
Custodian shall: (a) have the sole and exclusive right and authority to
exercise, except as may be otherwise specifically restricted by the terms
hereof, all rights and remedies given to the Attorney and the Custodian (as
applicable) pursuant to any hypothec, bond, pledge, applicable laws or otherwise,
(b) benefit from and be subject to all provisions hereof with respect to
Administrative Agent mutatis mutandis, including, without limitation, all such
provisions with respect to the liability or responsibility to and
indemnification by the Lenders, and (c) be entitled to delegate from time
to time any of its powers or duties under any hypothec, bond, or pledge on such
terms and conditions as it may determine from time to time.  Any person who becomes a Lender shall, by its
execution of an assignment agreement, be deemed to have consented to and
confirmed:  (i) the Attorney as the
person holding the power of attorney as aforesaid and to have ratified, as of
the date it becomes a Lender, all actions taken by the Attorney in such
capacity, and (ii) the Custodian as the agent and custodian as aforesaid
and to have ratified, as of the date it becomes a Lender, all actions taken by
the Custodian in such


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


97

















 


capacity. 
The substitution of Administrative Agent pursuant to this Agreement
shall also constitute the substitution of the Attorney and the Custodian.


 


ARTICLE 12 - MISCELLANEOUS


 


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


 


Section 12.2         No Waivers.  No failure or delay by Administrative Agent
or any Lender in exercising any right, power or privilege under any Financing
Document shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. 
The rights and remedies herein and therein provided shall be cumulative
and not exclusive of any rights or remedies provided by law.  Any reference in any Financing Document to
the “continuing” nature of any Event of Default shall not be construed as
establishing or otherwise indicating that any Borrower or any other Credit
Party has the independent right to cure any such Event of Default, but is
rather presented merely for convenience should such Event of Default be waived
in accordance with the terms of the applicable Financing Documents.


 


Section 12.3         Notices.


 


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


 


(b)           Notices and other communications to
the parties hereto may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved from time to time by Administrative Agent, provided,
however, that the foregoing shall not
apply to notices sent directly to any Lender if such Lender has


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


98

















 


notified the Administrative
Agent that it is incapable of receiving notices by electronic
communication.  The Administrative Agent
or Borrower Representative may, in their discretion, agree to accept notices
and other communications to them hereunder by electronic communications
pursuant to procedures approved by it, provided, however, that approval of such procedures may be limited to
particular notices or communications.


 


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


 


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


 


Section 12.5         Headings.  Headings and captions used in the Financing
Documents (including the Exhibits, Schedules and Annexes hereto and thereto)
are included for convenience of reference only and shall not be given any
substantive effect.


 


Section 12.6         Confidentiality.  Administrative Agent and each Lender shall
hold all non-public information regarding the Credit Parties and their
respective businesses identified as such by Borrowers and obtained by
Administrative Agent or any Lender pursuant to the requirements hereof in
accordance with such Person’s customary procedures for handling information of
such nature, except that disclosure of such information may be made (a) to
their respective agents, employees, Subsidiaries, Affiliates, attorneys,
auditors, professional consultants, rating agencies, insurance industry
associations and portfolio management services, (b) to prospective
transferees or purchasers of any interest in the Loans, Administrative Agent or
a Lender, and to prospective contractual counterparties (or the professional
advisors thereto) in Swap Contracts permitted hereby, provided, however,
that any such Persons are bound by obligations of confidentiality, (c) as
required by Law, subpoena, judicial order or similar order and in connection
with any litigation, (d) as may be required in connection with the
examination, audit or similar investigation of such Person, and (e) to a
Person that is a trustee, investment advisor, collateral manager, servicer,
noteholder or secured party in a Securitization (as hereinafter defined) in
connection with the administration, servicing and reporting on the assets
serving as collateral for such Securitization. For the purposes of this
Section, “Securitization” shall mean (i) the pledge of the Loans as
collateral security for loans to a Lender or (ii) a public or private
offering by a Lender or any of its Affiliates or their respective successors
and assigns, of securities which represent an interest in, or which are
collateralized, in whole or in part, by the Loans. Confidential information
shall include only such information identified as such at the time


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


99

















 


provided to Administrative Agent and shall
not include information that either: (i) is in the public domain, or
becomes part of the public domain after disclosure to such Person through no
fault of such Person, or (ii) is disclosed to such Person by a Person
other than a Credit Party, provided,
however, Administrative Agent
does not have actual knowledge that such Person is prohibited from disclosing
such information.  The obligations of
Administrative Agent and Lenders under this Section 12.6 shall supersede
and replace the obligations of Administrative Agent and Lenders under any
confidentiality agreement in respect of this financing executed and delivered
by Administrative Agent or any Lender prior to the date hereof.


 


Section 12.7         Waiver of Consequential and
Other Damages.  To the
fullest extent permitted by applicable law, no Borrower shall assert, and each
Borrower hereby waives, any claim against any Indemnitee (as defined below), on
any theory of liability, for special, indirect, consequential or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of this Agreement, any other Financing Document or any
agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof.  No Indemnitee shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated
hereby or thereby.


 


Section 12.8         GOVERNING LAW; SUBMISSION TO
JURISDICTION.  THIS AGREEMENT, EACH NOTE AND EACH OTHER FINANCING
DOCUMENT, AND ALL MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM
(WHETHER SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF MARYLAND, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.  EACH BORROWER HEREBY CONSENTS TO THE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF
MONTGOMERY, STATE OF MARYLAND AND IRREVOCABLY AGREES THAT, SUBJECT TO
ADMINISTRATIVE AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE OTHER FINANCING DOCUMENTS SHALL BE LITIGATED
IN SUCH COURTS.  EACH BORROWER EXPRESSLY
SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY
DEFENSE OF FORUM NON CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE
OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE
MADE UPON SUCH BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS
AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE
SAME HAS BEEN POSTED.


 


Section 12.9         WAIVER OF JURY TRIAL.  EACH
BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THE FINANCING


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


100

















 


DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR
PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH BORROWER, ADMINISTRATIVE AGENT AND EACH
LENDER ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS
AGREEMENT AND THE OTHER FINANCING DOCUMENTS, AND THAT EACH WILL CONTINUE TO
RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS.  EACH BORROWER, ADMINISTRATIVE AGENT AND EACH
LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE OPPORTUNITY OF REVIEWING
THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS.


 


Section 12.10       Publication; Advertisement.


 


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


 


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


 


Section 12.11       Counterparts; Integration.  This Agreement and the other Financing
Documents may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. Signatures by facsimile or by electronic mail
delivery of an electronic version of any executed signature page shall
bind the parties hereto.  This Agreement
and the other Financing Documents constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


101














 


Section 12.12       No Strict Construction.  The parties hereto have participated jointly
in the negotiation and drafting of this Agreement.  In the event an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.


 


Section 12.13       Lender Approvals.  Unless expressly provided herein to the contrary,
any approval, consent, waiver or satisfaction of Administrative Agent or
Lenders with respect to any matter that is the subject of this Agreement, the
other Financing Documents may be granted or withheld by Administrative Agent
and Lenders in their sole and absolute discretion and credit judgment.


 


Section 12.14       Expenses; Indemnity.


 


(a)           Borrowers hereby agree to promptly
pay (i) all costs and expenses of Administrative Agent (including without
limitation the fees, costs and expenses of counsel to, and independent
appraisers and consultants retained by Administrative Agent) in connection with
the examination, review, due diligence investigation, documentation,
negotiation, closing and syndication of the transactions contemplated by the
Financing Documents, in connection with the performance by Administrative Agent
of its rights and remedies under the Financing Documents and in connection with
the continued administration of the Financing Documents including (A) any
amendments, modifications, consents and waivers to and/or under any and all
Financing Documents and (B) any periodic public record searches conducted
by or at the request of Administrative Agent (including, without limitation,
title investigations, UCC searches, fixture filing searches, judgment, pending
litigation and tax lien searches and searches of applicable corporate, limited
liability, partnership and related records concerning the continued existence,
organization and good standing of certain Persons), (ii) without
limitation of the preceding clause (i), all costs and expenses of
Administrative Agent in connection with the creation, perfection and
maintenance of Liens pursuant to the Financing Documents, (iii) without
limitation of the preceding clause (i), all costs and expenses of Administrative
Agent in connection with (A) protecting, storing, insuring, handling,
maintaining or selling any Collateral, (B) any litigation, dispute, suit
or proceeding relating to any Financing Document, and (C) any workout,
collection, bankruptcy, insolvency and other enforcement proceedings under any
and all of the Financing Documents, (iv) without limitation of the
preceding clause (i), all costs and expenses of Administrative Agent in
connection with Administrative Agent’s reservation of funds in anticipation of
the funding of the initial Loans to be made hereunder, and (v) all costs
and expenses incurred by Lenders in connection with any litigation, dispute,
suit or proceeding relating to any Financing Document and in connection with
any workout, collection, bankruptcy, insolvency and other enforcement
proceedings under any and all Financing Documents, whether or not
Administrative Agent or Lenders are a party thereto.  If Administrative Agent or any Lender uses
in-house counsel for any of these purposes, Borrowers further agree that the
Obligations include reasonable charges for such work commensurate with the fees
that would otherwise be charged by outside legal counsel selected by
Administrative Agent or such Lender for the work perfonned.


 


(b)           Each Borrower hereby agrees to
indemnify, pay and hold harmless Administrative Agent and Lenders and the
officers, directors, employees, trustees, agents,


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


102

















 


investment advisors,
collateral managers, servicers, and counsel of Administrative Agent and Lenders
(collectively called the “Indemnitees”)
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including the fees and disbursements of
counsel for such Indemnitee) in connection with any investigative, response,
remedial, administrative or judicial matter or proceeding, whether or not such
Indemnitee shall be designated a party thereto and including any such
proceeding initiated by or on behalf of a Credit Party, and the reasonable
expenses of investigation by engineers, environmental consultants and similar
technical personnel and any commission, fee or compensation claimed by any broker
(other than any broker retained by Administrative Agent or Lenders) asserting
any right to payment for the transactions contemplated hereby, which may be
imposed on, incurred by or asserted against such Indemnitee as a result of or
in connection with the transactions contemplated hereby or by the other
Operative Documents (including (i)(A) as a direct or indirect result of
the presence on or under, or escape, seepage, leakage, spillage, discharge,
emission or release from, any property now or previously owned, leased or
operated by Borrower, any Subsidiary or any other Person of any Hazardous
Materials, (B) arising out of or relating to the offsite disposal of any
materials generated or present on any such property or (C) arising out of
or resulting from the environmental condition of any such property or the
applicability of any governmental requirements relating to Hazardous Materials,
whether or not occasioned wholly or in part by any condition, accident or event
caused by any act or omission of Borrower or any Subsidiary, and (ii) proposed
and actual extensions of credit under this Agreement) and the use or intended
use of the proceeds of the Loans and Letters of Credit, except that Borrower
shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the gross negligence or willful misconduct of such
Indemnitee, as determined by a final non-appealable judgment of a court of
competent jurisdiction.  To the extent
that the undertaking set forth in the immediately preceding sentence may be
unenforceable, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable Law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.


 


(c)           Notwithstanding any contrary
provision in this Agreement, the obligations of Borrowers under this Section 12.14
shall survive the payment in full of the Obligations and the termination of
this Agreement.  NO INDEMNITEE SHALL BE
RESPONSIBLE OR LIABLE TO THE BORROWERS OR TO ANY OTHER PARTY TO ANY FINANCING
DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER THIS
AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.


 


Section 12.15       [RESERVED].


 


Section 12.16       Reinstatement.  This Agreement shall remain in full force and
effect and continue to be effective should any petition or other proceeding be
filed by or against any Credit Party for liquidation or reorganization, should
any Credit Party become insolvent or make an assignment for the benefit of any
creditor or creditors or should an interim receiver, receiver,


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


103

















 


receiver and manager or trustee be appointed
for all or any significant part of any Credit Party’s assets, and shall
continue to be effective or to be reinstated, as the case may be, if at any
time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise
be restored or returned by any obligee of the Obligations, whether as a
fraudulent preference reviewable transaction or otherwise, all as though such
payment or performance had not been made. 
In the event that any payment, or any part thereof, is rescinded,
reduced, restored or returned, the Obligations shall be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.


 


Section 12.17       Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of Borrowers and Administrative Agent and each Lender arid
their respective successors and permitted assigns.


 


Section 12.18       USA PATRIOT Act Notification.  Administrative Agent (for itself and not on
behalf of any Lender) and each Lender hereby notifies Borrowers that pursuant
to the requirements of the USA PATRIOT Act, it is required to obtain, verify
and record certain information and documentation that identifies Borrowers,
which information includes the name and address of Borrower and such other
information that will allow Administrative Agent or such Lender, as applicable,
to identify Borrowers in accordance with the USA PATRIOT Act.


 


[SIGNATURES APPEAR ON FOLLOWING PAGES]


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


104

















 


(Signature Page to Credit and Security Agreement)


 


IN
WITNESS WHEREOF, intending to be legally bound, and intending that this
agreement constitute an agreement executed under seal, the undersigned have
executed this Credit and Security Agreement under seal as of the day and year
first hereinabove set forth.


 


	
  BORROWERS:

  	
  BIOHORIZONS,
  INC., a Delaware corporation

  
	
   

  	
  BIOLOK
  ACQUISITION CORP., a Delaware corporation

  
	
   

  	
  BIOHORIZONS
  IMPLANT SYSTEMS, INC., a Delaware corporation

  
	
   

  	
  BIOLOK
  INTERNATIONAL INC., a Delaware corporation

  
	
   

  	
  ORTHOGEN
  CORPORATION, a New Jersey corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Kendyl Lowe

  	
  (SEAL)

  
	
   

  	
   

  	
  Kendyl
  Lowe

  
	
   

  	
   

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
  As
  Chief Financial Officer of each of the above entities and in such capacity,
  intending by this signature to legally bind each of the above entities

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  c/o
  BioHorizons Implant Systems, Inc.

  
	
   

  	
  2300
  Riverchase Center

  
	
   

  	
  Suite 800

  
	
   

  	
  Birmingham,
  Alabama 35244

  
	
   

  	
  Attn:
  Kendyl Lowe, Chief Financial Officer

  
	
   

  	
  Facsimile:
  (205) 870-0304

  
	
   

  	
  E-Mail:
  klowe@biohorizons.com

  
	
   

  	
   

  
	
   

  	
  With
  copies to:

  
	
   

  	
   

  
	
   

  	
  Mintz
  Levin Cohn Ferris Glovsky and Popeo, P.C.

  
	
   

  	
  666
  Third Avenue

  
	
   

  	
  New
  York, NY 10017

  
	
   

  	
  Attn:
  James M. McKnight, Esquire

  
	
   

  	
  Facsimile:
  (212) 983-3115

  
	
   

  	
  E-Mail:
  jmcknight@mintz.com

  



 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


(Signature Page to Credit and Security
Agreement)


 


	
  ADMINISTRATIVE
  AGENT:

  	
  MIDCAP
  FUNDING I, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Brett Robinson

  	
  (SEAL)

  
	
   

  	
   

  	
  Brett
  Robinson

  
	
   

  	
   

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  7735
  Old Georgetown Rd. Suite 400

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attn:
  Account Manager for BioHorizons transaction

  
	
   

  	
  Facsimile:
  301-941-1450

  
	
   

  	
   

  
	
   

  	
  Payment
  Account Designation:

  



 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


(Signature Page to Credit and Security
Agreement)


 


	
  LENDER:

  	
  MIDCAP
  FUNDING I, LLC, a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ Brett Robinson

  	
  (SEAL)

  
	
   

  	
   

  	
  Brett
  Robinson

  
	
   

  	
   

  	
  Managing
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  7735
  Old Georgetown Rd. Suite 400

  
	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
  Attn:
  Account Manager for BioHorizons transaction

  
	
   

  	
  Facsimile:
  301-941-1450

  



 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 

















 


ANNEXES, EXHIBITS, RIDERS AND SCHEDULES


 


	
  ANNEXES

  
	
   

  	
   

  
	
  Annex A

  	
  Commitment
  Annex

  
	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  
	
  Exhibit A

  	
  Reserved

  
	
  Exhibit B

  	
  Compliance
  Certificate

  
	
  Exhibit C

  	
  Borrowing
  Base Certificate

  
	
  Exhibit D

  	
  Notice
  of Borrowing

  
	
   

  	
   

  
	
  RIDERS

  
	
   

  	
   

  
	
  Regulatory Rider

  
	
   

  	
   

  
	
  SCHEDULES

  
	
   

  	
   

  
	
  Schedule 3.1

  	
  Existence,
  Organizational ID Numbers, Foreign Qualification, Prior Names

  
	
  Schedule 3.4

  	
  Capitalization

  
	
  Schedule 3.6

  	
  Litigation

  
	
  Schedule 3.17

  	
  Material
  Contracts

  
	
  Schedule 3.18

  	
  Environmental
  Compliance

  
	
  Schedule 3.19

  	
  Intellectual
  Property

  
	
  Schedule 4.4

  	
  Insurance

  
	
  Schedule 4.9

  	
  Notice

  
	
  Schedule 5.1

  	
  Debt;
  Contingent Obligations

  
	
  Schedule 5.2

  	
  Liens

  
	
  Schedule 5.7

  	
  Permitted
  Investments

  
	
  Schedule 5.8

  	
  Affiliate
  Transactions

  
	
  Schedule 5.11

  	
  Business
  Description

  
	
  Schedule 5.14

  	
  Deposit
  Accounts and Securities Accounts

  
	
  Schedule 7.4

  	
  Post-Closing
  Obligations

  
	
  Schedule 9.1

  	
  Collateral

  
	
  Schedule 9.2

  	
  Location
  of Collateral

  



 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 














 


Annex A to Credit Agreement
(Commitment Annex)


 


	
  Lender

  	
   

  	
  Revolving
  Loan

  Commitment

  Amount

  	
   

  	
  Revolving

  Loan

  Commitment

  Percentage

  	
   

  	
  Term Loan

  Commitment

  Amount

  	
   

  	
  Term Loan

  Commitment

  Percentage

  	
   

  
	
  MidCap Funding I, LLC

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
  100

  	
  %

  	
  $

  	
  5,000,000

  	
   

  	
  100

  	
  %

  
	
  TOTALS

  	
   

  	
  $

  	
  12,500,000

  	
   

  	
  100

  	
  %

  	
  $

  	
  5,000,000

  	
   

  	
  100

  	
  %

  



 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as
amended.


 

















 


Exhibit A to Credit Agreement (Reserved)


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 














 


Exhibit B to Credit Agreement (Compliance Certificate)


 


COMPLIANCE CERTIFICATE


 


Date:               ,    


 


This
certificate is given by                                       ,
a Responsible Officer of BioHorizons Implant Systems, Inc. (the “Borrower Representative”), pursuant to that certain Credit
and Security Agreement dated as of March 31, 2010 among the Borrower
Representative, BioHorizons, Inc., BioLok Acquisition Corp., BioLok
International Inc., Orthogen Corporation and any additional Borrower that may
hereafter be added thereto (collectively, “Borrowers”),
MidCap Funding I, LLC, individually as a Lender and as Administrative Agent,
and the financial institutions or other entities from time to time parties
hereto, each as a Lender (as such agreement may have been amended, restated,
supplemented or otherwise modified from time to time, the “Credit
Agreement”).  Capitalized
terms used herein without definition shall have the meanings set forth in the
Credit Agreement.


 


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


 


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


 


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


 


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


 


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


 


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


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


1

















 


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


 


(g)                                 If the Credit Agreement
contemplates a lien on the deposit accounts or investment accounts of the
Borrowers and/or Guarantors in favor of Administrative Agent, Schedule 4
attached hereto contains a complete and accurate statement of all deposit or
investment accounts maintained by Borrowers or Guarantors;


 


(h)                                 Except as described in the Credit
Agreement or in Schedule 5 attached hereto, the undersigned has no
knowledge of any current, pending or threatened:


 


(i)                                     litigation against the Borrowers
or Guarantors;


 


(ii)                                  inquiries, investigations or
proceedings concerning the business affairs, practices, licensing or
reimbursement entitlements of Borrowers or Guarantors;


 


(iii)                               default by Borrowers or Guarantors
under any material contract to which either of them is a party, including,
without limitation, any leases.


 


(i)                                     Except as noted on Schedule 6
attached hereto, no Borrower or Guarantor has acquired, by purchase, by the
approval or granting of any application for registration (whether or not such
application was previously disclosed to Administrative Agent by Borrowers) or
otherwise, any Intellectual Property that is registered with any United States
or foreign Governmental Authority, or has filed with any such United States or
foreign Governmental Authority, any new application for the registration of any
Intellectual Property, or acquired rights under a license as a licensee with
respect to any such registered Intellectual Property (or any such application
for the registration of Intellectual Property) owned by another Person, that
has not previously been reported to Administrative Agent on Schedule 3.17
to the Credit Agreement or any Schedule 6 to any previous Compliance
Certificate delivered by the Company to Administrative Agent.


 


(j)                                     Except as noted on Schedule 7
attached hereto, no Borrower or Guarantor has acquired, by purchase or
otherwise, any Chattel Paper, Letter of Credit Rights, Instruments,
Documents or Investment Property that has not previously been reported to
Administrative Agent on any Schedule 7 to any previous Compliance
Certificate delivered by Borrower Representative to Administrative Agent.


 


(k)                                  Except as noted on Schedule 8
attached hereto, no Borrower or Guarantor is aware of any Commercial Tort Claim
that has not previously been reported to Administrative Agent on any Schedule
8 to any previous Compliance Certificate delivered by Borrower
Representative to Administrative Agent.


 


(l)                                     QUARTERLY ONLY: 
Borrower and Guarantor are in compliance with the covenants contained in
Article 6 of the Credit Agreement, and in any Guarantee constituting a
part of the Financing Documents, as demonstrated by the calculation of such
covenants below, except as set forth below; in determining such compliance, the
following calculations have been 


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


2

















 


made:  [See attached worksheets].  Such calculations and the certifications
contained therein are true, correct and complete.


 


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


 


	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BIOHORIZONS
  IMPLANT SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


3

















 


Schedules to Compliance Certificate


 


Schedule
1 — Non-Compliance with Covenants


 


Schedule
2 — Business Locations and Names of Borrowers and Guarantors


 


Schedule
3 — Unpaid Tax or Withholding Obligations


 


Schedule
4 — List of all Deposit and Investment Accounts of Borrowers and Guarantors


 


Schedule
5 —Pending Litigation, Inquiries or Investigations; Defaults under
Material Contracts


 


Schedule
6 — Newly Acquired Intellectual Property and Intellectual Property Licenses


 


Worksheet(s) for
Financial or Other Covenant Calculations


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


4

















 


EBITDA Worksheet (Attachment to Compliance Certificate)


 


EBITDA
for the applicable measurement period (the “Defined
Period”) is defined as follows:


 


	
  Net
  income (or loss) for the Defined Period of Borrowers and their Consolidated
  Subsidiaries, but excluding: (a) the income (or loss) of any Person
  (other than Subsidiaries of Borrowers) in which Borrowers or any of their
  Subsidiaries has an ownership interest unless received by Borrower or their
  Subsidiary in a cash distribution; and (b) the income (or loss) of any
  Person accrued prior to the date it became a Subsidiary of Borrowers or is
  merged into or consolidated with Borrowers

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus:

  	
  Any
  provision for (or less any benefit from) income and franchise taxes deducted
  in the determination of net income for the Defined Period

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Interest
  expense, net of interest income, deducted in the determination of net income
  for the Defined Period

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Amortization
  and depreciation deducted in the determination of net income for the Defined
  Period

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Other
  non-cash expenses (or less other non-cash gains or income) deducted in the
  determination of net income for the Defined Period and for which no cash
  outlay (or cash receipt) is foreseeable prior to the Commitment Expiry Date

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA
  for the Defined Period

  	
   

  	
  $

  	
   

  	
   

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


5

















 


Fixed Charge Coverage Ratio Worksheet (Attachment to Compliance
Certificate)


 


Fixed
Charge Coverage Ratio for the applicable measurement period (the “Defined Period”) is defined as follows:


 


	
  Fixed Charges:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Interest
  expense ($           ),
  net of interest income ($           ),
  interest paid in kind ($           )
  and amortization of capitalized fees and expenses incurred to consummate the
  transactions contemplated by the Financing Documents and included in interest
  expense ($           ),
  included in the determination of net income of Borrowers and their
  Consolidated Subsidiaries for the Defined Period (“Total
  Interest Expense”)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plus:

  	
  Any
  provision for (or less any benefit from) income or franchise taxes included
  in the determination of net income for the Defined Period *

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Scheduled
  payments of principal for the Defined Period with respect to all Debt
  (including the portion of scheduled payments under capital leases allocable
  to principal but excluding mandatory prepayments required by Section 2.1(b)(ii) and
  excluding scheduled repayments of Revolving Loans and other Debt subject to
  reborrowing to the extent not accompanied by a concurrent and permanent
  reduction of the Revolving Loan Commitment (or equivalent loan commitment))

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating Cash Flow:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  EBITDA
  for the Defined Period (calculated in the manner required by EBITDA Worksheet
  attached to the Compliance Certificate)

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:

  	
  Unfinanced
  capital expenditures for the Defined Period

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  To
  the extent not already reflected in the calculation of EBITDA, other
  capitalized costs, defined as the gross amount paid in cash and capitalized
  during the Defined Period, as long term assets, other than amounts
  capitalized during the Defined Period as capital expenditures for property,
  plant and equipment or similar fixed asset accounts

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Operating Cash Flow

  	
   

  	
  $

  	
   

  	
   

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


1

















 


	
  Fixed
  Charge Coverage Ratio (Ratio of Operating Cash Flow to Fixed Charges) for the
  Defined Period

  	
   

  	
       to 1.0

  
	
   

  	
   

  	
   

  
	
  Minimum
  Fixed Charge Coverage for the Defined Period

  	
   

  	
         to 1.0

  
	
   

  	
   

  	
   

  
	
  In
  Compliance

  	
   

  	
  Yes/No

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


2

















 


Exhibit C to Credit Agreement (Borrowing Base Certificate)


 





 


MidCap Financial


Borrowing Base Report


 


	
  BBR Date

  	
  March 31,
  2010

  	
   

  	
  Report #:

  	
   

  	
   

  	
  Aging Date

  	
   

  



 


Name:     BIOHORIZONS
IMPLANT SYSTEMS, INC.; BIOLOK INTERNATIONAL INC.; and ORTHOGEN CORPORATION


 


	
   

  	
   

  	
   

  	
   

  	
  A/R

  	
   

  	
  TOTALS

  	
   

  
	
   

  	
   

  	
  A/R CATEGORY

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Net
  Eligible Accounts

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  2.

  	
   

  	
  Liquidity
  Factor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3a

  	
   

  	
  Total
  Eligible Accounts before credit balances

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  3b

  	
   

  	
  Less:
  Reserve against eligible accounts

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  4.

  	
   

  	
  Total
  Eligible Accounts

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Computation of Availability

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Total
  Eligible Accounts:

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  6a.

  	
   

  	
  (Less): Cash Posted Since Last
  Aging

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6b.

  	
   

  	
  Add: Revenue Posted Since Last Aging

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6c.

  	
   

  	
  Plus/(Minus): Adjustments

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  7.

  	
   

  	
  Net
  Eligible Accounts

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  8.

  	
   

  	
  Advance
  Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Net
  Availability

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  10.

  	
   

  	
  Add:
  Inventory Availability (see attached)

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Net
  Availability before IP

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  13.

  	
   

  	
  Total
  Net Availability

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Computation of Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Facility
  Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Available
  to Borrow (not to exceed limit)

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  16.

  	
   

  	
  Loan
  Balance on Prior Borrowing Base Certificate

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  17.

  	
   

  	
  (Less): Cash Collections since
  last Borrowing Base Certificate

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  18.

  	
   

  	
  Increase/(Decrease): Adjustments

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  19.

  	
   

  	
  Loan
  Advances

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Ending
  Loan Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Letter
  of Credit Outstandings

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  22.

  	
   

  	
  Overall
  Reserve

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  
	
  23.

  	
   

  	
  Remaining
  Availability

  	
   

  	
   

  	
   

  	
  $

  	
   —

  	
   

  



 


Pursuant to, and in accordance with, the
terms and provisions of the Loan Documents (“Documents”), between MIDCAP
FINANCIAL, LLC(“Secured Party”) and BIOHORIZONS IMPLANT SYSTEMS, INC.;
BIOLOK INTERNATIONAL INC.; and ORTHOGEN CORPORATION (“Borrower”), Borrower is
executing and delivering to Secured Party this Borrowing Base Report
accompanied by supporting data (collectively referred to as “Report”). Borrower
warrants and represents to Secured Party that this Report is true, correct, and
based on information contained in Borrower’s own financial accounting records.


Borrower, by the execution of this Report:


(a)  Hereby ratifies, confirms, and
affirms all of the terms, and further certifies that the Borrower is in
compliance with the Loan Documents as of March 31, 2010:


(b)  Hereby certifies that the Borrower
has paid all State and Federal payroll witholding taxes immediately due and
payable through March 31, 2010.


This document does not supercede any
provisions of the Loan and Security Agreement. Capitalized Terms used herein
and not otherwise defined shall have the meaning ascribed to them in the Loan
and Security Agreement between Secured Party and Borrower dated March 30,
2010.


 


	
   

  	
   

  	
   

  	
  (Responsible
  Officer’s Signature)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Print
  Name)

  
	
   

  	
   

  	
   

  	
  (Title)

  



 


Portions
of this Exhibit were omitted and have been filed separately with the Secretary
of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


1

















 


Exhibit D to Credit Agreement (Notice of Borrowing)


 


[BORROWER REPRESENTATIVE]


 


Date:                ,      


 


This
certificate is given by                                     ,
a Responsible Officer of BioHorizons Implant Systems, Inc. (“Borrower Representative”), pursuant to Section 2.1(b)(i) of
that certain Credit and Security Agreement dated as of March 31, 2010
among Borrower Representative, BIOHORIZONS, INC.,
BIOLOK ACQUISITION CORP., BIOLOK INTERNATIONAL INC. and ORTHOGEN CORPORATION (collectively, “Borrowers”),
the Lenders from time to time party thereto and MidCap Funding I, LLC, as
Administrative Agent for lenders (as such agreement may have been amended,
restated, supplemented or otherwise modified from time to time the “Credit Agreement”). 
Capitalized terms used herein without definition shall have the meanings
set forth in the Credit Agreement.


 


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


 


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


 


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


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Authorized
  Signatory for Borrower Representative

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


1

















 


Exhibit E to Credit Agreement (Payment Notification)


 


[BORROWER REPRESENTATIVE]


 


Date:                   ,       


 


Reference
is hereby made to that certain Credit and Security Agreement dated as of March 31,
2010 among Borrower Representative,                                            
(collectively, “Borrowers”), the Lenders from time
to time party thereto and MidCap Funding I, LLC, as Administrative Agent for
lenders (as such agreement may have been amended, restated, supplemented or
otherwise modified from time to time the “Credit Agreement”).  Capitalized terms used herein without
definition shall have the meanings set forth in the Credit Agreement.


 


Please
be advised that funds in the amount of $                     
will be wire transferred to Administrative Agent on                   ,
20   .  Such funds
shall constitute a prepayment of the Term Loans, with such prepayments to be
applied in the manner specified in Section 2.1(a)(iii).


 


Fax
to MCF Operations 301-941-1450 no later than noon Eastern time.


 


Note:
Funds must be received no later than noon Eastern time for same day application


 


Wire
Instructions:


 


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


 


	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
  Authorized
  Signatory for Borrower Representative

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


1






 










 


REGULATORY RIDER


 


This
Regulatory Rider (as the same may be amended, supplemented, restated or
otherwise modified from time to time, this “Regulatory
Rider”) is made a part of and is incorporated by reference into that
certain Credit and Security Agreement (as the same may be amended,
supplemented, restated or otherwise modified from time to time, the “Credit Agreement”), dated as of
March 31, 2010, by and among BIOHORIZONS, INC.,
a Delaware corporation (“Parent”),
BIOLOK ACQUISITION CORP., a
Delaware corporation (“Acquisition”),
BIOHORIZONS IMPLANT SYSTEMS, INC.,
a Delaware corporation (“BioHorizons”),
BIOLOK INTERNATIONAL INC., a
Delaware corporation (“Biolok”), ORTHOGEN CORPORATION, a New Jersey
corporation (“Orthogen”),  and any additional borrower that may
hereafter be added to the Credit Agreement (collectively, “Borrowers” and each individually, a “Borrower”), MIDCAP FUNDING I, LLC, individually as a Lender, and as
Administrative Agent, and the financial institutions or other entities from
time to time parties to the Credit Agreement, each as a Lender.


 


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


 


Section 1.              Definitions; Other Definition
Provisions.  All
capitalized terms not otherwise defined in this Rider shall have the meanings
given them in the Credit Agreement.  The
provisions of Section 1.3 of the Credit Agreement shall apply in
interpreting this Regulatory Rider.


 


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


 


“Correction” means repair,
modification, adjustment, relabeling, destruction or inspection (including
patient monitoring) of a product without its physical removal to some other
location; or any plan in response to a state or federal notice of violation or
deficiency, such as, without limitation, FDA 483 inspection reports, FDA
warning letters, and any plans to implement, monitor and audit ongoing
compliance with plans of correction.


 


“Device Application” means
a 510(k) premarket notification or premarket approval (PMA) application,
as appropriate, as those terms are defined in the FDCA.


 


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


 


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


 


“Good Manufacturing Practice”
means current good manufacturing practices, as set forth in the Quality System
Regulation, 21 C.F.R. Part 820.


 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


“Market Withdrawal” means
a Person’s Removal or Correction of a distributed product which involves a
minor violation that would not be subject to legal action by the FDA or which
involves no violation, e.g., normal stock rotation practices, routine equipment
adjustments and repairs, etc.


 


“Permits” means all
governmental licenses, authorizations, supplier numbers, registrations,
permits, device authorizations and approvals, certificates, franchises,
qualifications, accreditations, consents, approvals, listings, certificates,
product clearances or approvals, marketing authorizations and all other
licenses, authorizations, registrations, permits, consents and approvals or
exemptions thereto required in connection with the conduct of any Borrower’s or
any Subsidiary’s business or to comply with any applicable Laws, including,
without limitation, establishment registrations, device listings, Investigational
Device Exemptions (IDEs), 510(k) exemptions, 510(k) clearances, and
PMA approvals, as those terms are defined in the FDCA and implementing
regulations, and those issued by state governments, environmental protection
agency permits, and any and all licenses, patents, trademarks and other
intellectual property rights necessary for the conduct of any Borrower’s or
Subsidiary’s business.


 


“Products” means any
services provided or products manufactured, sold, developed, tested or marketed
by any Borrower or any of its Subsidiaries.


 


“Recall” means a Person’s
Removal or Correction of a marketed product that the FDA considers to be in
violation of the laws it administers and against which the FDA would initiate
legal action, e.g., seizure.


 


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


 


“Required Permit” means a
Permit (a) issued or required under Laws applicable to the business of any
Borrower or any of its Subsidiaries or necessary in the manufacturing,
importing, exporting, possession, ownership, warehousing, marketing, promoting,
sale, labeling, furnishing, distribution or delivery of goods or services under
Laws applicable to the business of any Borrower or any of its Subsidiaries or
any Device Application (including without limitation, at any point in time, all
licenses, approvals and permits issued by the FDA or any other applicable
Governmental Authority necessary for the testing, manufacture, marketing or
sale of any Product by any Borrower or any of its Subsidiaries as such
activities are being conducted by such Person with respect to such Product at
such time), and (b) issued by any Person from which any Borrower or any of
its Subsidiaries has received an accreditation. 
This shall include all state government registrations and certifications
applicable to the operation of the business of any Borrower or any of its
Subsidiaries necessary for the manufacture or repair of dental prosthetic appliances
and related Products.


 


“Specified Laws” means all
applicable laws relating to the operation of private label and other medical
device product distributions, and the possession, control, warehousing,
marketing, sale and distribution of medical devices, including without 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


2

















 


limitation,
the Food Drug and Cosmetic Act of 1938 (21 U.S.C. § 801 et seq., Current Good
Manufacturing Practices (CGMP) requirements of the Quality System regulation
for medical devices, as specified in Title 21, Code of Federal Regulations, Part 820
(21 C.F.R. 820), the Occupational Health and Safety Act (29 U.S.C. § 651 et
seq.), any laws pertaining to the storage and disposal of biomedical and other
hazardous waste, and any implementing regulations to any of the foregoing or
other applicable state or federal laws. 
This shall include all guidelines and standards established by state
government agencies or dental laboratory national associations for the
manufacture or repair of dental prosthetic appliances and related Products.


 


“Transport and Disposal Agreement”
means an agreement for the transport and disposal of hazardous wastes in
accordance with all applicable Laws, as the same may be amended, supplemented,
restated, modified or replaced from time to time.


 


“Stock Recovery” means a
Person’s Removal or Correction of a product that has not been marketed or that
has not left the direct control of such Person, i.e., the product is located on
the premises owned by, or under the control of, such Person and no portion of
the lot has been released for sale or use.


 


Section 2.              Additional Representations and
Warranties.  The
following is hereby appended to the Credit Agreement as new Section 3.25:


 


Section 3.25         Compliance
of Products.


 


(a)           Each
Borrower and each Subsidiary:


 


(i)            has
obtained all Required Permits, or has contracted with third parties holding
Required Permits, necessary for compliance with all Laws including the
Specified Laws, and all such Required Permits are current and each holder of
such Required Permits is in material compliance with the terms and conditions
of all such Required Permits;


 


(ii)           has
been operating in compliance in all material respects with all reporting and
regulatory requirements imposed upon it as well as the Specified Laws,
including reporting to FDA and other agencies, to include state government
agencies of product deviations, contamination or of device malfunctions and/or
device-related serious injuries or deaths and reporting to FDA of Corrections
or Removals, when and as required under the FDCA;


 


(iii)          has
not, and none of its officers, directors, employees, shareholders, their agents
or affiliates have, made an untrue statement of material fact or fraudulent
statement to the FDA or failed to disclose a material fact required to be
disclosed to the FDA, committed an act, made a statement, or failed to make a
statement that could reasonably be expected to provide a basis for the FDA to
invoke its policy respecting “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities,” set forth in 56 Fed. Regulation 46191
(September 10, 1991);


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


3

















 


(iv)          has
not received any notice that any Governmental Authority, including the FDA, the
Office of the Inspector General of HHS, the United States Department of Justice
or any equivalent foreign agency, has commenced or threatened to initiate any
action to enjoin a Credit Party, or any of its officers, directors, employees,
shareholders, agents or Affiliates, from conducting their respective businesses
at any facility owned or used by any of them, or for any material civil
penalty, injunction, seizure or criminal action, or which would result in the
revocation, transfer, surrender, suspension or other material impairment of any
Required Permit;


 


(v)           is
not a participant in any federal program whereby any federal, state or local
government or quasi-governmental body, agency, board or other authority may
have the right to recover funds by reason of the advance of federal funds,
including those authorized under the Hill-Burton Act (42 U.S.C. 291, et seq.);


 


(vi)          has
not been threatened to be (A) excluded from United States health care
programs pursuant to 42 U.S.C. §1320a7 and related regulations, (B) “suspended”
or “debarred” from selling products to the United States government or its
agencies pursuant to the Federal Acquisition Regulation, relating to debarment
and suspension applicable to federal government agencies generally (48 C.F.R.
Subpart 9.4), or other applicable laws or regulations, or (C) made a party
to any other action by any governmental authority that may prohibit it from
selling products to any governmental or other purchaser pursuant to any Law;


 


(vii)         is
in compliance with all Environmental Laws;


 


(viii)        maintains
or causes to be maintained a standard of care in the storage, use,
transportation and disposal of all Products, medical equipment, medical
supplies, medical products and medical waste, of any kind and in any form, that
is at least comparable to that which exists on the date of this Agreement and
that is in conformity in all material respects with all applicable regulations
and Laws;


 


(ix)           maintains
or causes to be maintained corporate regulatory compliance program (“CCP”) in accordance with Specified Laws and
customary business practices for each Borrower which includes at least the
following components:  (A) specific
officer within high-level personnel identified as having overall responsibility
for regulatory compliance (B) training and education programs which
effectively communicate the compliance standards and procedures to employees
and agents;(C) policies and procedures to allow employees and other agents
to anonymously report criminal or suspect conduct and potential compliance
problems; (D) consistent enforcement of compliance policies including
discipline of 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


4

















 


individuals
responsible for the failure to detect violations of the CCP; and
(E) mechanisms to immediately respond to detected violations of the CCP;


 


(x)            except
as set forth on Schedule 3.25(a)(x), has not received from the FDA
at any time Warning Letters, Form FDA-483 inspection reports, “Untitled
Letter,” other correspondence or notice setting forth allegedly objectionable
observations or alleged violations of laws and regulations enforced by the FDA,
including the FDCA, or any comparable correspondence from any state or local
authority responsible for regulating medical device products and
establishments, or any comparable correspondence from any foreign counterpart
of the FDA, or any comparable correspondence from any foreign counterpart of
any state or local authority with regard to any Product or the manufacture,
processing, packing, or holding thereof;


 


(xi)           except
as set forth on Schedule 3.25(a)(xi), has not engaged in any
Recalls, Market Withdrawals, or other forms of product retrieval from the
marketplace of any Products at any time;


 


(xii)          has
entered into, or will enter into as required, an agreement with a reputable and
qualified Person for the transport and disposal of hazardous wastes pursuant to
which such Person has agreed to provide such transport and disposal services at
all facilities at which such biomedical wastes and hazardous wastes are
generated in conformity in all material respects with all applicable
regulations and Laws and such Transport and Disposal Agreement remains in full
force and effect;


 


(xiii)         maintains
or causes to be maintained a policy that prevents the exposure of employees or
contractors to bloodborne pathogens by prohibiting staff from handling returned
or used Product if such Product is not received in a decontaminated manner;


 


(b)           Parent
and BioHorizons each hereby represents and warrants, in addition to
Section (a)(i) through (xiii) that it;


 


(i)            has
implemented or is causing to be implemented all corrective actions agreed to in
response to observations and/or deficiencies noted in any inspection or audit
by any Governmental Authority or other licensing organization at each
respective facility including but not limited to all corrective actions
outlined in the response to the FDA Warning letter issued to BioHorizons
Implant Systems, Inc. on December 27, 2004 and to address any
deficiencies raised in the FDA 483 Inspectional Observations issued to
BioHorizons on August 18, 2006;


 


(ii)           conducts
sufficient and regular internal quality audits, evaluations of
suppliers/contractors, and conducts management review 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


5

















 


meetings
at regularly defined intervals in compliance with Specified Laws;


 


(iii)          has
implemented a procedure to conduct follow-up investigations to maintain full
documentation of each batch of finished devices to meet applicable acceptable
criteria before release for distribution in accordance with Specified Laws;


 


(iv)          has
implemented a procedure to conduct follow-up investigations to complaints
involving the failure of devices to meet specifications and documents the
reasons for the lack of investigations if none are undertaken, and that such
procedure provides for the complete review and evaluation of complains and that
all complaints received are processed in a uniform and timely matter and in
compliance with Specified Laws;


 


(v)           has
implemented a procedure to conduct and document adequate corrective and preventive
actions in response to complaints involving the failure of medical devices to
meet specifications in compliance with the requirements of Specified Laws;


 


(vi)          has
implemented a procedure for validation and verification of design changes prior
to implementation of such changes in compliance with Specified Laws;


 


(vii)         has
ensured that the medical device reporting procedure within the company’s
internal systems provides for timely transmission of complete medical device
reports to FDA in compliance with Specified Laws; and


 


(viii)        has
taken all such actions necessary to ensure the hiring of adequate staff to
perform regulatory functions and that all individuals holding responsibility
for regulatory functions, in a management or supervisory capacity, possess the
requisite experience, training and certifications to carry out their job
responsibilities.


 


(c)           With
respect to Products:


 


(i)            No
Borrower or any Subsidiary of any Borrower has acquired, received, or otherwise
transferred any human tissue or organs for valuable consideration for use in
human transplantation, in violation of any Law.


 


(ii)           Schedule 3.25(c)(ii) hereto
lists all Required Permits issued by a Governmental Authority in North America
relating to a Product and/or the applicable Borrower’s manufacture, sale,
development, testing or marketing thereof maintained by Borrowers as of the
Closing Date, together with the applicable Product category corresponding to
the 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


6

















 


Required
Permits.  Borrowers have delivered to
Administrative Agent on or prior to the Closing Date copies of all such
Required Permits.  If, after the Closing
Date, any Borrower acquires or renews any Required Permit issued by a
Governmental Authority in North America relating to a Product and/or the
applicable Borrower’s manufacture, sale, development, testing or marketing
thereof issued, such Borrower shall promptly deliver a copy of such new or
renewed Required Permit along with a copy of an amended and restated Schedule 3.25(c)(ii);


 


(iii)          each
Product has been and/or shall be manufactured, imported, possessed, owned,
warehoused, marketed, promoted, sold, labeled, furnished, distributed and
marketed in accordance with all applicable Permits and Laws, including but not
limited to the FDCA;


 


(iv)          Without
limiting the generality of Section 3.25(a)(i) above, with
respect to any Product being tested or manufactured by any Borrower or any
Subsidiary of any Borrower, such Person has received, and such Product shall be
the subject of, all Required Permits needed in connection with the testing or
manufacture of such Product as such testing is currently being conducted by or
on behalf of such Person, and such Person has not received any notice from any
applicable Government Authority, including the FDA, that such Government
Authority is conducting an investigation or review of (A) such Person’s
manufacturing facilities and processes for such Product which have disclosed
any material deficiencies or violations of Laws (including healthcare laws)
and/or the Required Permits related to the manufacture of such Product, or
(B) any such Required Permit or that any such Required Permit has been
revoked or withdrawn, nor has any such Governmental Authority issued any order
or recommendation stating that the development, testing and/or manufacturing of
such Product by such Person should cease;


 


(v)           Without
limiting the generality of Section 3.25(a)(i) above, with
respect to any Product marketed or sold by any Borrower or any Subsidiary of
any Borrower, such Person shall have received, and such Product shall be the
subject of, all Required Permits needed in connection with the marketing and
sales of such Product as currently being marketed or sold by such Person, and
such Person has not received any notice from any applicable Governmental
Authority, including the FDA, that such Governmental Authority is conducting an
investigation or review of any such Required Permit or approval or that any
such Required Permit has been revoked or withdrawn, nor has any such Governmental
Authority issued any order or recommendation stating that such marketing or
sales of such Product cease or that such Product be withdrawn from the
marketplace; and


 


(vi)          Borrowers
and their Subsidiaries have not experienced any significant failures in their
manufacturing of any Product such that the 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


7

















 


amount
of such Product successfully manufactured by them in accordance with all
specifications thereof and the Required Payments related thereto in any month
shall decrease significantly with respect to the quantities of such Product
produced in the prior month.


 


(d)           Parent
and BioHorizons each hereby represent and warrant, in addition to
Section (c)(i) through (vi) that, with respect to Products:


 


(i)            Each
Product commercially distributed within the past 12 months is not adulterated
or misbranded within the meaning of the FDCA;


 


(ii)           Each
Product is not an article prohibited from introduction into interstate commerce
under the provisions of Sections 510(k) or 515 of the FDCA;


 


(iii)          Each
Product has been and/or shall be designed and manufactured in accordance with
Good Manufacturing Practice as defined in the Quality System Regulation 21
C.F.R. Part 820;


 


(e)           Neither
the execution nor performance by any Borrower or any of its Subsidiaries of any
Financing Documents or other Operative Documents, nor the exercise of any
remedies by any party thereunder, will adversely affect any of the Required
Permits.


 


Section 3.              Additional Affirmative Covenants.  The following is hereby appended to the
Credit Agreement as new Section 4.15:


 


Section 4.15         Covenants
Regarding Products and Compliance with Required Permits


 


(a)           Without
limiting the generality of Section 4.5, in connection with the
development, testing, manufacture, marketing or sale of each and any Product by
any Borrower or any of its Subsidiaries, such Person shall comply fully and
completely in all respects with all Required Permits at all times issued by any
Government Authority, including the FDA, with respect to such development,
testing, manufacture, marketing or sales of such Product by such Person as such
activities are at any such time being conducted by such Person, including the
timely filing (after giving effect to any extension duly obtained) of all
notifications, reports, submissions, Required Permit renewals, cost reports and
other reports of every kind whatsoever required by Laws (which reports shall be
materially accurate and complete in all respects and not misleading in any
respect and shall not remain open or unsettled) and shall operate in a manner
such that the Required Permits remain in full force and effect.


 


(b)           Without
limiting the generality of Section 4.9, Borrowers shall immediately and in
any case within three (3) Business Days give written notice to
Administrative Agent upon any Borrower or any of its Subsidiaries becoming
aware that any of the representations and warranties set forth in this
Regulatory


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


8






 










 


Rider
with respect to any Product have become incorrect in any respect (provided
that, for the avoidance of doubt, the giving of such notice shall not cure or
result in the automatic waiver of any Default or Event of Default that may have
resulted from such breach of such representation or warranty).


 


(c)           Borrowers
and their Subsidiaries shall maintain in full force and effect the Transport
and Disposal Agreement or such other agreement in form and substance for the
transport and disposal of hazardous wastes with respect to all facilities at
which such waste is generated.


 


(d)           Parent
and BioHorizons and their Subsidiaries shall maintain or cause to be maintained
a policy that prevents the exposure of employees or contractors to bloodborne
pathogens by prohibiting staff from handling returned or used Product if such
Product is not received in a decontaminated manner.


 


Section 4.              Additional Covenants Regarding
Products and Compliance with Required Permits.  The following is hereby appended to the
Credit Agreement as new Section 4.16:


 


Section 4.16           Products
and Compliance with Required Permits.  Parent and BioHorizons each:


 


(a)           shall maintain or cause to be maintained all corrective
actions agreed to in response to observations and/or deficiencies noted in any inspection
or audit by any Governmental Authority or other licensing organization at each
respective facility;


 


(b)           shall conduct ongoing sufficient and regular internal
quality system audits, evaluations of suppliers/contractors, and conduct
management review meetings at defined intervals adequate to achieve compliance
in accordance with Specified Laws;


 


(c)           shall maintain or cause to be maintained full
documentation for each batch or finished devices to meet applicable acceptance
criteria before release for distribution in compliance with Specified Laws;


 


(d)           shall conduct follow-up investigations involving the
failure of devices to meet specifications and document the reasons for the lack
of investigations if none are undertaken and shall maintain or cause to be
maintained procedures that provide for the full review and evaluation of
complaints in a uniform and timely manner and in compliance with Specified
Laws;


 


(e)           shall conduct and document adequate corrective and
preventive actions in response to complaints involving failure of medical
devices to meet specifications in compliance with the requirements of Specified
Laws;


 


(f)            shall maintain or cause to be maintained validation and
verification of design changes prior to implementation of such changes in
compliance with Specified Laws;


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


9

















 


(g)           shall maintain or cause to be maintained a procedure
within the company’s internal system that provides for timely transmission of
complete medical device reports to FDA in compliance with Specified Laws; and


 


(h)           shall maintain adequate staffing of regulatory personnel
with the requisite experience, training and certifications to carry out their
job responsibilities in compliance with Specified Laws.


 


Section 5.              Additional Negative Covenants.  The following sections are hereby appended to
the Credit Agreement as new Section 5.16 and new Section 5.17:


 


Section 5.16         Covenants
Regarding Required Permits.  No Credit Party shall (a) suffer or
permit to occur (i) any transfer of a Required Permit or rights thereunder
to any Person (other than a Borrower or Administrative Agent); or (ii) any
rescission, withdrawal, revocation, termination, amendment or modification of
or other alteration to the nature, tenor or scope of any Required Permit except
for any such amendment, modification or other alteration the effect of which is
to expand such Person’s business and which does not have a Material Adverse
Effect and does not materially adversely affect the Administrative Agent’s
rights and remedies with respect to the Collateral; or (b) rescind,
withdraw, revoke, amend, modify, supplement, or otherwise alter the nature,
tenor or scope of the Required Permits.


 


Section 5.17         Human
Tissue or Organs.  No Credit
Party shall acquire, receive, or otherwise transfer any human tissue or organs
for valuable consideration for use in human transplantation in violation of any
Law.


 


Section 6.              Events of Default.  In addition to the events listed in
Section 10.1, the occurrence of any of the following conditions and/or
events, whether voluntary or involuntary, by operation of law or otherwise,
shall constitute an “Event of Default” under the Credit Agreement:


 


(a)           the
institution of any proceeding by FDA or similar Governmental Authority to order
the withdrawal of any Product or Product category that is material to any
Borrower’s or any Subsidiary’s business from the market or to enjoin any such
Person or any representative of any such Person from manufacturing, marketing,
selling or distributing any Product or Product category that is material to
such Person’s business;


 


(b)           the
institution of any action or proceeding by any FDA or any other Governmental
Authority to revoke, suspend, reject, withdraw, limit, or restrict any Required
Permit held by any Borrower or any Subsidiary of any Borrower or any
representative of such Person if the same could reasonably be expected to
result in a Material Adverse Effect or a material adverse change in, or a
material adverse effect upon, the prospects of such Person;


 


(c)           the
commencement of any enforcement action against any Borrower or any Subsidiary
of any Borrower by FDA or any other Governmental Authority if such enforcement
action could reasonably be expected to result in a 


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


10

















 


Material
Adverse Effect or a material adverse change in, or a material adverse effect
upon, the prospects of such Person;


 


(d)           the
recall of any Product from the market, the voluntary withdrawal of any Product
from the market, or actions to discontinue the sale of any Product, if the same
could reasonably be expected to result in a Material Adverse Effect or a
material adverse change in, or a material adverse effect upon, the prospects of
the applicable Borrower or Subsidiary;


 


(e)           a
change in Law, including a change in FDA policies or procedures or state
government agency policies or procedures, occurs which could reasonably be
expected to have a Material Adverse Effect or a material adverse change in, or
a material adverse effect upon, the prospects of any Borrower or any Subsidiary
of any Borrower; or


 


(f)            the
termination of any agreements with manufacturers that supply any Product or any
components of any Product or any changes to any agreements with manufacturers
that supply any Product or any components of any Product that could reasonably
be expected to have a Material Adverse Effect or a material adverse change in,
or a material adverse effect upon, the prospects of the applicable Borrower or
Subsidiary.


 


(Signature Page Follows)


 


Portions of this Exhibit were omitted
and have been filed separately with the Secretary of the Commission pursuant to
the Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


11

















 


(Signature
Page to Regulatory Rider)


 


 


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


 


 


	
  BORROWERS:

  	
   

  	
  BIOHORIZONS, INC., a Delaware corporation

  BIOLOK ACQUISITION CORP., a
  Delaware corporation

  BIOHORIZONS IMPLANT SYSTEMS, INC., a Delaware corporation

  BIOLOK INTERNATIONAL INC., a Delaware corporation

  ORTHOGEN CORPORATION, a New
  Jersey corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Kendyl Lowe

  	
  (SEAL)

  
	
   

  	
   

  	
   

  	
  Kendyl
  Lowe

  	
   

  
	
   

  	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  
	
   

  	
   

  	
   

  	
  As Chief Financial Officer of each of the above entities
  and in such capacity, intending by this signature to legally bind each of the
  above entities

  



 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


(Signature
Page to Regulatory Rider)


 


 


	
  ADMINISTRATIVE
  AGENT:

  	
  MIDCAP
  FUNDING I, LLC,  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett Robinson

  
	
   

  	
   

  	
  Brett Robinson

  
	
   

  	
   

  	
  Managing Director

  



 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


(Signature
Page to Regulatory Rider)


 


 


	
  LENDER:

  	
  MIDCAP
  FUNDING I, LLC,  a Delaware
  limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Brett Robinson

  
	
   

  	
   

  	
  Brett Robinson

  
	
   

  	
   

  	
  Managing Director

  



 


Portions of this Exhibit were omitted and
have been filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 






 










 


Regulatory Rider


 


DISCLOSURE SCHEDULE 3.25(a)(x)


 


FDA Warning Letters, Forms FDA-483 Inspection Reports, “Untitled
Letters”, Etc.


 


BioHorizons


 


1.             Form FDA-483
observations Nov. 2004


 


2.             Warning Letter 2005-NOL-08


 


3.             Form FDA-483
observations Aug. 2006


 


BioLok


 


1.             Form FDA-483
observations May 2003


 


2.             Form FDA-483
observations Feb. 2006


 


DISCLOSURE SCHEDULE 3.25(a)(xi)


 


Recalls, Market Withdrawals, Etc.


 


BioHorizons


 


1.             Recall Numbers Z-0925-5 &
Z-0926-5 (CLOSED)


 


2.             Recall Number Z-252-2007 (CLOSED)


 


3.             Recall Number
Z-0692-2007 (CLOSED)


 


4.             Recall Number
Z-0693-2007 (CLOSED)


 


5.             Recall Number
Z-0694-2007 (CLOSED)


 


6.             Recall Number
Z-1164-2007 (CLOSED)


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


7.             Recall Number
Z-0801-2007 (CLOSED)


 


8.             Correction
Number 1060818-01/04/08-001-C (CLOSED)


 


9.             Correction Number
1060818-01/22/08-002-C (CLOSED)


 


10.           Stock Recovery for VIP 2.1 Rev. A (CLOSED)


 


11.           Correction Number 1060818-02/26/09-001-C (CLOSED)


 


12.           Correction Number 1060818-022210-001-C (a Class III, Non-reportable correction involving the Impression
Coping Hex-to-Flat orientation misalignment; only impacts the restoration
process if the clinician mixes parts during the impression process)


 


13.           Correction Number 1060818-022210-001-R (a Class III, Non-reportable correction involving the 3inOne
Abutment Hex-to-Flat orientation misalignment; only impacts the restoration
process if the clinician mixes parts during the impression process)


 


BioLok


 


1.             Correction
Number 1054056-4/13/07-001-R (CLOSED)


 


2.             Correction
Number 1045056-03/03/08-001-R (CLOSED)


 


3.             Correction
Number 1045056-04/18/08-002-C (CLOSED)


 


DISCLOSURE SCHEDULE 3.25(c)(ii)


 


Required Permits


 


BioHorizons


 


1.             CDRH Annual
Registration of Device Establishment 1060818


 


2.             CBER Annual
Establishment Registration and Listing of FEI:1000592496


 


3.             FDA Medical Device
Listing registrations for:


 


DZE, Implants


NHA,
Abutments


DZL,
Tissue Tack System


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


2

















 


DZA,
Drills


ELZ,
Preformed Crowns


LLZ,
Treatment Planning Software


EHY,
Preformed Impression Tray


NDP,
Surgical Guide


 


4.             California
Provisional Tissue Bank License CNC 80263


 


5.             Florida Tissue
Bank License Certificate #564


 


6.             New York State
Provisional License for Tissue Bank Operation TS043


 


7.             State of
Alabama License No. 19379


 


8.             City of Hoover,
Alabama Business License Serial No. 73901


 


BioLok


 


BioLok
no longer has any active permits. All 510(k)s were transferred to BioHorizons
Implant Systems, Inc. (“Implant Systems”). The Implant Systems versions of
the microlok parts it manufactures are covered under the existing product
listings. The manufacturing facility in Deerfield, FL is no longer registered
or active.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 


3






 










 


DISCLOSURE SCHEDULES


TO CREDIT AND SECURITY AGREEMENT


 


among


 


BIOHORIZONS, INC, BIOLOK ACQUISITION CORP., BIOHORIZONS IMPLANT
SYSTEMS, INC., BIOLOK INTERNATIONAL INC. and ORTHOGEN CORPORATION, each as
Borrower and collectively as Borrowers,


 


and


 


MidCap Financial, LLC, individually as a Lender, and as Administrative
Agent, and the financial institutions or other entities from time to time
parties thereto, each as a Lender.


 


Dated:  March 31, 2010


 


Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities
Act of 1933, as amended.


 

















 


	
  Schedule
  3.1

  	
   

  	
  Existence
  and Power, Organizational ID Numbers, Foreign Qualification, Prior Names

  
	
  Schedule
  3.4

  	
   

  	
  Capitalization

  
	
  Schedule
  3.6

  	
   

  	
  Litigation

  
	
  Schedule
  3.17

  	
   

  	
  Material
  Contracts

  
	
  Schedule
  3.18

  	
   

  	
  Environmental
  Compliance

  
	
  Schedule
  3.19

  	
   

  	
  Intellectual
  Property

  
	
  Schedule
  4.4

  	
   

  	
  Insurance

  
	
  Schedule
  4.9

  	
   

  	
  Notice

  
	
  Schedule
  5.1

  	
   

  	
  Debt;
  Permitted Contingent Obligations

  
	
  Schedule
  5.2

  	
   

  	
  Permitted
  Liens

  
	
  Schedule
  5.7

  	
   

  	
  Permitted
  Investments

  
	
  Schedule
  5.8

  	
   

  	
  Affiliate
  Transactions

  
	
  Schedule
  5.11

  	
   

  	
  Business
  Description

  
	
  Schedule
  5.14

  	
   

  	
  Deposit
  Accounts and Securities Accounts

  
	
  Schedule
  9.2

  	
   

  	
  Location
  of Collateral

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 3.1


 


[Existence and Power, Organizational ID Numbers, Foreign Qualification,
Prior Names]


 


	
  Credit
  Party

  	
   

  	
  Federal

  Taxpayer

  ID#

  	
   

  	
  State

  of

  Org.

  	
   

  	
  States Qualified

  As Foreign

  Entity

  	
   

  	
  Other Names in

  Last 5 Years

  	
   

  	
  Previously

  Incorporated

  in Another

  State?

  
	
  BioHorizons, Inc.

  	
   

  	
  20-5912502

  	
   

  	
  DE

  	
   

  	
  None

  	
   

  	
  HealthpointCapital
  Dental Holdings, Inc.

  BH
  Holdings 1, Inc.

  	
   

  	
  No

  
	
  BIOHORIZONS
  IMPLANT SYSTEMS, INC.

  	
   

  	
  63-1163766

  	
   

  	
  DE

  	
   

  	
  Alabama

  	
   

  	
  None

  	
   

  	
  No

  
	
  BioLok
  Acquisition Corp.

  	
   

  	
  None.

  	
   

  	
  DE

  	
   

  	
  None

  	
   

  	
  Tumbler
  Holdings, Inc.

  	
   

  	
  No

  
	
  BioLok
  International Inc.

  	
   

  	
  65-0317138

  	
   

  	
  DE

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  No

  
	
  Orthogen
  Corporation

  	
   

  	
  22-3463248

  	
   

  	
  NJ

  	
   

  	
  None

  	
   

  	
  None

  	
   

  	
  No

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 3.4


[Capitalization]


 


1.     Equity Structure of the Loan Parties


 


Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities Act of
1933, as amended.


 















 


BioHorizons, Inc. Post Spin Capitalization Table


 


	
   

  	
   

  	
  Series A Preferred

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $1000/unit

  	
   

  	
  Rolling

  	
   

  	
  Option

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Common Stock

  	
   

  
	
   

  	
   

  	
  # of Shares Issued

  	
   

  	
  Common Stock

  	
   

  	
  Holders

  	
   

  	
  Common Stock A

  	
   

  	
  Common Stock B

  	
   

  	
  Common Stock C

  	
   

  	
  Total

  	
   

  	
  %

  	
   

  
	
  HealthpointCapital
  Partners, L.P.

  	
   

  	
  40,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3,349,502

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  3,349,502

  	
   

  	
  15.0

  	
  %

  
	
  HealthpointCapital
  Partners II, L.P

  	
   

  	
  196,641

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  7,030,200

  	
   

  	
  7,857,617

  	
   

  	
   

  	
   

  	
  14,887,817

  	
   

  	
  66.9

  	
  %

  
	
  Greenpark

  	
   

  	
  10,000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  460,557

  	
   

  	
  313,179

  	
   

  	
   

  	
   

  	
  773,736

  	
   

  	
  3.5

  	
  %

  
	
  Rolling Common Stock
  Holders

  	
   

  	
  11,880

  	
   

  	
  994,838

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  994,838

  	
   

  	
  4.5

  	
  %

  
	
  Option Holders

  	
   

  	
  4,612

  	
   

  	
   

  	
   

  	
  386,229

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  386,229

  	
   

  	
  1.7

  	
  %

  
	
  Active BioHorizons
  Management/Employee*

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  952,983

  	
   

  	
  191,492

  	
   

  	
  217,578

  	
   

  	
  1,362,053

  	
   

  	
  6.1

  	
  %

  
	
  Active DTI
  Management/Employee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  0.0

  	
  %

  
	
  Former DTI Management/Employee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  0

  	
   

  	
  69,242

  	
   

  	
   

  	
   

  	
  69,242

  	
   

  	
  0.3

  	
  %

  
	
  Former BioH
  Management/Employee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  148,524

  	
   

  	
  7,417

  	
   

  	
   

  	
   

  	
  155,941

  	
   

  	
  0.7

  	
  %

  
	
  SAB,
  Consultants & Audit Committee

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  73,803

  	
   

  	
  42,000

  	
   

  	
   

  	
   

  	
  115,803

  	
   

  	
  0.5

  	
  %

  
	
  Other

  	
   

  	
  500

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  35,883

  	
   

  	
   

  	
   

  	
  35,883

  	
   

  	
  0.2

  	
  %

  
	
  ILS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  131,559

  	
   

  	
   

  	
   

  	
  131,559

  	
   

  	
  0.6

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  263,634

  	
   

  	
  994,838

  	
   

  	
  386,229

  	
   

  	
  12,015,569

  	
   

  	
  8,648,389

  	
   

  	
   

  	
   

  	
  22,262,602

  	
   

  	
  100

  	
  %

  



 


Liquidation Preference


1) $263,633,730 of Series A Preferred Stock (including Rolling
Common Stock & Option Holders


2) $35,400,000 Common Stock A preference


3) Common Stock C preference of up to $5,550,326 which will be split
7.24% for Common Stock C holders and 92.76% for Series A Holders and
Common Stock A holders between $212,335,990 and $289,000,000


 


Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities Act of
1933, as amended.


 














 


	
  Company

  	
   

  	
  Stockholder

  	
   

  	
  #/ Class of Shares

  	
   

  	
  % Ownership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
  BioHorizons, Inc.

  	
   

  	
  100
  common shares

  	
   

  	
  100%(1)

  
	
  BioLok
  Acquisition Corp.

  	
   

  	
  BioHorizons, Inc.

  	
   

  	
  100
  common shares

  	
   

  	
  100%

  
	
  BioLok
  International Inc.

  	
   

  	
  BioLok
  Acquisition Corp.

  	
   

  	
  100
  common shares

  	
   

  	
  100%

  
	
  Orthogen
  Corporation

  	
   

  	
  BioLok
  International Inc.

  	
   

  	
  100
  common shares

  	
   

  	
  100%

  



 


2.             Other
Agreements Regarding Equity Securities


 


(i)           Holders of options in
BioHorizons Implant Systems, Inc.


 


(a.)          Options Retained (not yet exercised)


 


	
  Allen, Edward P

  	
   

  	
  26,631

  
	
  Bidez, Martha Warren

  	
   

  	
  47,760

  
	
  Franken, Dianne

  	
   

  	
  1,168

  
	
  Greer, Winston

  	
   

  	
  11,680

  
	
  Griffin, Terrance

  	
   

  	
  2,920

  
	
  Hamilton, Kent

  	
   

  	
  4,602

  
	
  Henderson, Amanda

  	
   

  	
  1,168

  
	
  Holmes, Jon

  	
   

  	
  1,064

  
	
  Jividen, Glenn

  	
   

  	
  4,950

  
	
  Leeper, Douglas

  	
   

  	
  1,752

  
	
  Lowe, Kendyl

  	
   

  	
  8,760

  
	
  Marais, Eugene

  	
   

  	
  1,168

  
	
  McInnis, Linda

  	
   

  	
  1,168

  
	
  Misch V, Carl

  	
   

  	
  6,923

  
	
  Molz, Fred

  	
   

  	
  2,336

  
	
  Neri, Mark

  	
   

  	
  5,840

  
	
  Pikos, Michael

  	
   

  	
  53,215

  
	
  Pollack, Alan

  	
   

  	
  1,064

  
	
  Rosene, William

  	
   

  	
  12,264

  
	
  Rosenfield, Kim

  	
   

  	
  8,760

  
	
  Strong, J. Todd

  	
   

  	
  11,680

  



 






(1) 
There are also options to purchase shares of BioHorizons Implant
Systems, Inc. (see list below); however, the option holders may elect to
purchase shares of BioHorizons, Inc. instead (which is the more likely
outcome).


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


(b.)          Holders of Outstanding
Shares in BioHorizons, Inc. (for Options Exercised)


 


	
  Boggan, R. Steven

  	
   

  	
  81,758

  	
   

  
	
  Grotz, Werner

  	
   

  	
  2,920

  	
   

  
	
  McCallum, Scotty

  	
   

  	
  5,840

  	
   

  
	
  Pratt, James

  	
   

  	
  8,760

  	
   

  
	
  Ross, William

  	
   

  	
  70,079

  	
   

  



 


(ii)           Amendment to Stock Option
Agreement(s) by and among BioHorizons Implant Systems, Inc., BH Holdings
I, Inc. and the option participants, relating to options listed in 2(i) above.
(Amendment is regarding the right of option holders to convert options into
parent shares). Options are at the BioHorizons Implant Systems, Inc.
level.  Upon exercise, there is a put and
a call whereby either the company or the optionee may elect to convert their
shares of BioHorizons Implant Systems, Inc. into shares of BioHorizons, Inc.


 


(iii)          There are no warrants, other
than the 5% warrant coverage on the new Amended and Restated Subordinated Note,
in connection with HealthpointCapital Partners II, LP.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 3.6


 


[Litigation]


 


1.     Jack T. Krauser
has filed a complaint in the Circuit Court of the 15th Judicial Circuit for
Palm Beach County, Florida against BioHorizons, Inc., Biolok International, Inc.
and BioHorizons Implant Systems, Inc., alleging breaches under a
settlement agreement requiring the payment of royalties on products sold by the
company.  The complaint was served on March 8,
2010.  The company believes it has made
all royalty payments in full and has otherwise complied with the settlement
agreement and will therefore defend this litigation vigorously.


 


2.     On February 19,
2010, an attorney representing PKP, LLC (“PKP”), a vendor that provides
anodizing services, sent a letter to BioHorizons claiming that BioHorizons was
in default under an agreement between BioHorizons and PKP.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities
Act of 1933, as amended.


 

















 


Schedule 3.17


 


[Material Contracts]


 


(a)           Management Employment
Agreements


 


(i) BioHorizons
Implant Systems, Inc.


 


Employment
Agreement with R. Steven Boggan dated June 23, 2006


 


Amendment
to Employment Agreement with J. Todd Strong dated August 20, 2006.


 


Employment
Agreement with Clark Barousse dated July 29, 2008.


 


Employment
Agreement with Michael P. VandenKolk dated October 1, 2007.


 


Employment
Agreement with Kendyl D. Lowe dated June 26, 2009.


 


Employment
Agreement with David P. Dutil dated March 18, 2010.


 


(b)           Collective Bargaining
Agreements or Other Labor Agreements


 


None.


 


(c)           Managerial, Consulting and
Similar Services Agreements


 


(i) BioHorizons
Implant Systems, Inc.


 


2007
Dental Advisory Agreement with Dr. Michael A. Pikos effective January 1,
2007-  In exchange for certain fees
($[***] annual consulting fee, plus $[***] exhibit fee per MAP Institute
course, plus $[***] annually for marketing and course support, plus $[***]
lecture fee per speaking engagement), Dr. Michael A. Pikos serves of the
board of dental advisors (BioHorizons Advisory Board), participates in product
development teams, performs research as requested, publishes papers, and gives
outside lectures/courses on company-specified topics.


 


Amended
and Restated Agreement between BioHorizons Implant Systems, Inc. and Carl
E. Misch, an individual; Carl E. Misch, D.D.S., PC (a/k/a Advanced Implant
Dentistry); and Misch Implant Institute, Inc. dated July 2005,
effective January 1, 2005- In exchange for certain fees ($[***] annual
consulting fee, plus $[***] annual exhibit fee), Dr. Carl E. Misch agrees
to serve as Chief Dental Director of the Company and commits at least 30 days in
each calendar year to fulfill his obligations under the agreement. These
obligations include performing lectures, supervising and advising clinicians in
clinical trials, exclusively promoting products of the Company in all


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


presentations,
including those of the Misch Implant Institute, and providing prospective
customer contact information related to Misch Implant Institute graduates.


 


Amendment
to the Agreement dated January 1, 2005 between BioHorizons Implant Systems, Inc.
and Carl E. Misch.  The amendment takes
effect on July 1, 2006- This amendment speaks to the amount of
compensation only. The lecture fee for lectures is $[***] each for the first 12
per year, and $[***] each after that. The annual exhibit fee to the Misch
Implant Institute increased from $[***] to $[***].


 


(d)           Interested Party
Transactions


 


None.


 


(e)           Real Estate Leases;
Intellectual Property Licenses


 


(i) BioHorizons
Implant Systems, Inc.


 


(1) Real
Estate Leases


 


Lease
with Colonial Properties Trust for office space at 2300 Riverchase Center,
Building 800, Birmingham, AL, effective August 1, 2007 - annual rent
$603,294.


 


(2) Intellectual
Property Licenses


 


None.


 


(ii) BioLok
International Inc.


 


None.


 


(iii) Orthogen
Leases


 


(1) Real Estate Leases


 


None.


 


(2) Intellectual Property Licenses


 


In
November, 2007, Orthogen Corp. granted to Orthogen, LLC was a license for
non-dental use of patent application 10/903812 (Surgical Implant for promotion
of osseo-integration).


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


(f)            Customer, Distribution,
Marketing or Supply Agreements


 


(i) BioHorizons
Implant Systems, Inc.


 


Distributor
Agreement between BioHorizons Implant Systems, Inc. and LifeCell
Corporation effective August 8, 2000 (**Per the distribution agreement
with LifeCell Corporation effective August 8, 2000 as amended effective August 8,
2003, BioHorizons Implant Systems, Inc. is appointed as the exclusive
authorized distributor of certain products within the “Sales Territory” of
Australia, Canada, Singapore, South Korea, Taiwan and the United States**)


 


Amendment
to Distributor Agreement between BioHorizons Implant Systems, Inc. and
LifeCell Corporation effective August 8, 2003


 


Agreement
between Osteotech, Inc. and BioHorizons Implant Systems, Inc. dated
            , 2010
(U.S. Distribution)


 


Agreement
between Osteotech, Inc. and BioHorizons Implant Systems, Inc. dated
            , 2010
(International Distribution)


 


Carrier
Agreement between BioHorizons Implant Systems, Inc. and United Parcel
Service, Inc. effective January 5, 2009


 


Addendum
to Carrier Agreement between BioHorizons Implant Systems, Inc. and United
Parcel Service, Inc. effective January 30, 2010


 


Distributor
Agreement between Zest Anchors, Inc. and BioHorizons Implant Systems, Inc.
dated November 21, 2005


 


Oral
Agreement between BioHorizons Implant Services, Inc. and Medgrupe to distribute
BioHorizons products in Lithuania.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and BioHorizons srl.
(Romania), dated January 1, 2003. 
Territory:  Romania.


 


Oral
Agreement between BioHorizons Implant Systems, Inc. and Implamax Ltd. to
distribute BioHorizons products in Russia.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Prime Medical
Supplies, effective January 1, 2004. 
Territory:  United Arab Emirates.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Maximum DLYA
Stomatologii effective January 1, 2005. 
Territory:  Ukraine.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Oral
Agreement between BioHorizons Implant Systems, Inc. and Flexident GmbH to
distribute BioHorizons products in Switzerland.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Specialists’
Dental Supplies Limited, effective January 1, 2005.  Territory: 
Hong Kong and Macau.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Biodent Limited
Partnership, effective January 1, 2005.  Territory: 
Thailand.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Katara Dental
Private Limited, effective January 1, 2003.  Territory: 
India.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Bioplant Service &
Support, effective January 1, 2005. 
Territory:  Malaysia.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and International
Dental Supply, Inc., effective June 1, 2003.  Territory: 
Philippines.


 


Exclusive
Distribution Agreement between BioHorizons Implant Systems, Inc. and JAE
IL, effective September 25, 1998. Territory:  South Korea.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Shogun Healthcare, Inc.  Territory: 
Taiwan.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Shanghai Tia Jing
Medical Instrument Co., Ltd., effective January 1, 2004.  Territory: 
China.  Signed only by
BioHorizons.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Same Day
Solutions, effective April 15, 2005. 
Territory:  Portugal.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and A. G. Alloys Ltd.,
effective January 1, 2001. 
Territory:  Israel


 


Distribution Agreement dated
August 15, 2006 by and between BioHorizons Implant Systems, Inc. and
Valley Trade (Egypt).


 


Distribution Agreement dated
August 9, 2006 by and between BioHorizons Implant Systems, Inc. and
Caiman Dental Co., Ltd. (Japan).


 


Agreement by and between
BioHorizons Implant Systems, Inc. and Caiman Dental Co., Ltd.
appointing Caiman Dental Co., Ltd. as distributor in Japan, dated September 13,
2006.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Eldex CJSC,
effective January 1, 2010. 
Territory:  Armenia.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Romy-Dent Ltd.,
effective January 1, 2009. 
Territory:  Bulgaria.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Medical Solutions,
effective January 1, 2009. 
Territory:  Greece and Cyprus.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Biomain AB,
effective July 1, 2009. 
Territory:  Sweden.


 


Distribution
Agreement between BioHorizons Implant Systems, Inc. and Medical World
Company, effective January 1, 2009. 
Territory:  Libya.


 


Distribution Agreement
between BioHorizons Implant Systems, Inc. and Exsemed, S.A. de C.V.,
effective July 1, 2009. 
Territory:  Mexico.


 


(ii) BioLok
International Inc.


 


Foreign
distribution agreements for consideration of more than $200,000 per year:


 


	
  Importacion
  Dental S.A.

  	
  Spain

  
	
  IMS/Class Implant

  	
  Italy

  
	
  BioDental/Casa Schmidt

  	
  Argentina

  
	
  J&J
  Dental / Chong Int.

  	
  Korea

  



 


(g)          Partnership Agreements


 


None.


 


(h)           Third Party Billing
Arrangements


 


None.


 


(i)            Other Agreements


 


(i) BioHorizons
Implant Systems, Inc.


 


Cease
and Desist Agreement with Sybron Dental Specialties dated July 5, 2005


 


Subordinated Debt Agreements
dated March 31, 2006, June 30, 2006 and December 31, 2008 by and
between BioHorizons Implant Systems, Inc. and BioHorizons GmbH (agreement
in German)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Waiver For a Claim Under
Condition of Improvement dated December 5, 2008 by and between BioHorizons
Implant Systems, Inc. and BioHorizons GmbH


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 














 


Schedule 3.18


 


[Environmental Compliance]


 


None.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 3.19


 


[Intellectual Property]


 


Issued US Patents


 


	
  Patent
  Title

  	
   

  	
  Patent No.

  	
   

  	
  Assignee

  	
   

  	
  Issue Date

  	
   

  	
  Expiration

  Date

  
	
  Dental
  Implant System

  	
   

  	
  5415545

  	
   

  	
  BioLok(1)

  	
   

  	
  05/16/1995

  	
   

  	
  02/12/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Micromechanical
  Seal

  	
   

  	
  5447434

  	
   

  	
  BioLok(1)

  	
   

  	
  09/05/1995

  	
   

  	
  02/14/2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Method
  of Manufacturing a Dental Abutment

  	
   

  	
  5622499

  	
   

  	
  BioLok(1)

  	
   

  	
  04/22/1997

  	
   

  	
  04/10/2015

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Design
  process for skeletal implants to optimize cellular response

  	
   

  	
  5628630

  	
   

  	
  UAB
  Research Foundation(2)

  	
   

  	
  05/13/1997

  	
   

  	
  12/15/2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  implants to optimize cellular response

  	
   

  	
  5823777

  	
   

  	
  BioHorizons(3)

  	
   

  	
  10/20/1998

  	
   

  	
  12/15/2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abutment-mount
  system for dental implants

  	
   

  	
  5927979

  	
   

  	
  BioHorizons

  	
   

  	
  07/27/1999

  	
   

  	
  12/15/2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Design
  process for skeletal implants to optimize cellular response

  	
   

  	
  5954504

  	
   

  	
  BioHorizons(3)

  	
   

  	
  09/21/1999

  	
   

  	
  03/31/2017

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Buttress
  Thread Implant

  	
   

  	
  5964766

  	
   

  	
  BioLok(1)

  	
   

  	
  10/12/1999

  	
   

  	
  10/12/2016

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ball-topped
  screw for facilitating the making of an impression of a dental implant and
  method of using the same

  	
   

  	
  6045361

  	
   

  	
  BioHorizons

  	
   

  	
  04/04/2000

  	
   

  	
  03/31/2017

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abutment-mount
  with square driving surface

  	
   

  	
  6068480

  	
   

  	
  BioHorizons

  	
   

  	
  05/30/2000

  	
   

  	
  03/31/2017

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abutment-mount
  system for dental implants

  	
   

  	
  6083004

  	
   

  	
  BioHorizons

  	
   

  	
  07/04/2000

  	
   

  	
  03/31/2017

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Irrigation drill with Internal Anti-backwash baffle

  	
   

  	
  6106292

  	
   

  	
  BioLok

  	
   

  	
  08/22/2000

  	
   

  	
  08/02/2019

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Buttress
  Thread Dental Implant

  	
   

  	
  6149432

  	
   

  	
  BioLok

  	
   

  	
  11/21/2000

  	
   

  	
  12/27/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Analog
  Dental Wrench

  	
   

  	
  6162053

  	
   

  	
  BioLok

  	
   

  	
  12/19/2000

  	
   

  	
  11/01/2019

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Implantation
  of Surgical Implants with calcium sulfate

  	
   

  	
  6224635

  	
   

  	
  BioLok(4)

  	
   

  	
  05/01/2001

  	
   

  	
  11/06/2018

  



 






(1) Assigned to Minimatic (predecessor name of BioLok)


(2) Subject to UAB License Agreement (exclusive license)


(3) Co-owned with UAB Research Foundation; subject to UAB License
Agreement (exclusive license)


(4) Non-exclusive ownership interest; subject to HJD License Agreement


(5) Subject to HJD License Agreement (exclusive)


(6) Subject to Spiralock License Agreement (exclusive for the field of
dental implants)


(7) Subject to R&J Innovations License Agreement (exclusive for
marketing of Licensed Products)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


	
  Patent
  Title

  	
   

  	
  Patent No.

  	
   

  	
  Assignee

  	
   

  	
  Issue Date

  	
   

  	
  Expiration

  Date

  
	
  Micromechanical
  Seal for Dental Implant Systems

  	
   

  	
  6375464

  	
   

  	
  BioLok

  	
   

  	
  04/23/2002

  	
   

  	
  09/25/2020

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surgical
  fastener driver

  	
   

  	
  6402759

  	
   

  	
  BioHorizons

  	
   

  	
  06/11/2002

  	
   

  	
  12/10/2019

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Implant
  with Enlarged Proximal Segment

  	
   

  	
  6406296

  	
   

  	
  BioLok

  	
   

  	
  06/18/2002

  	
   

  	
  12/27/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Implant with Repeating Microgeometric Surface Patterns

  	
   

  	
  6419491

  	
   

  	
  BioLok(5)

  	
   

  	
  07/16/2002

  	
   

  	
  11/02/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Implant having dual bio-affinity collar

  	
   

  	
  6454569

  	
   

  	
  BioLok(5)

  	
   

  	
  09/24/2002

  	
   

  	
  11/02/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surgical
  Implant System, Article and Kit

  	
   

  	
  6582228

  	
   

  	
  BioLok(5)

  	
   

  	
  06/24/2003

  	
   

  	
  11/06/2018

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Implant/Abutment Interface and System having prong and Channel
  interconnections

  	
   

  	
  6648643

  	
   

  	
  BioLok

  	
   

  	
  11/18/2003

  	
   

  	
  12/19/2021

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surgical
  Fastener system

  	
   

  	
  6830573

  	
   

  	
  BioHorizons

  	
   

  	
  12/14/2004

  	
   

  	
  12/10/2019

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  drill system and method of use

  	
   

  	
  6863529

  	
   

  	
  BioHorizons

  	
   

  	
  03/08/2005

  	
   

  	
  05/20/2022

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Method
  of Bone Expansion and Compression for Receiving a Dental Implant Using
  Threaded Expanders

  	
   

  	
  7241144

  	
   

  	
  BioLok

  	
   

  	
  7/10/2007

  	
   

  	
  7/30/2023

  



 






(1) Assigned to Minimatic (predecessor name of BioLok)


(2) Subject to UAB License Agreement (exclusive license)


(3) Co-owned with UAB Research Foundation; subject to UAB License
Agreement (exclusive license)


(4) Non-exclusive ownership interest; subject to HJD License Agreement


(5) Subject to HJD License Agreement (exclusive)


(6) Subject to Spiralock License Agreement (exclusive for the field of
dental implants)


(7) Subject to R&J Innovations License Agreement (exclusive for
marketing of Licensed Products)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Issued
Foreign Patents


 


	
  Patent
  Title

  	
   

  	
  Patent No.

  	
   

  	
  Country

  	
   

  	
  Applicant

  	
   

  	
  Issue Date

  	
   

  	
  Expiration

  Date

  
	
  Dental
  Implant having a dual bio-affinity collar

  	
   

  	
  0673676

  	
   

  	
  Korea

  	
   

  	
  BioLok

  	
   

  	
  06/19/2001

  	
   

  	
  06/19/2021

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Control
  of Cell Growth

  	
   

  	
  EP0746273

  	
   

  	
  Europe

  	
   

  	
  BioLok/HJD(5)

  	
   

  	
  11/02/2004

  	
   

  	
  11/02/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Control
  of Cell Growth

  	
   

  	
  CA2175660

  	
   

  	
  Canada

  	
   

  	
  BioLok/HJD(5)

  	
   

  	
  07/05/2005

  	
   

  	
  11/02/2013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Implant having a dual bio-affinity collar

  	
   

  	
  2002215305

  	
   

  	
  Australia

  	
   

  	
  BioLok

  	
   

  	
  06/19/2001

  	
   

  	
  6/19/2021

  



 






(1) Assigned to Minimatic (predecessor name of BioLok)


(2) Subject to UAB License Agreement (exclusive license)


(3) Co-owned with UAB Research Foundation; subject to UAB License
Agreement (exclusive license)


(4) Non-exclusive ownership interest; subject to HJD License Agreement


(5) Subject to HJD License Agreement (exclusive)


(6) Subject to Spiralock License Agreement (exclusive for the field of
dental implants)


(7) Subject to R&J Innovations License Agreement (exclusive for
marketing of Licensed Products)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Pending
U.S. Patent Applications


 


None.


 






(1) Assigned to Minimatic (predecessor name of BioLok)


(2) Subject to UAB License Agreement (exclusive license)


(3) Co-owned with UAB Research Foundation; subject to UAB License
Agreement (exclusive license)


(4) Non-exclusive ownership interest; subject to HJD License Agreement


(5) Subject to HJD License Agreement (exclusive)


(6) Subject to Spiralock License Agreement (exclusive for the field of
dental implants)


(7) Subject to R&J Innovations License Agreement (exclusive for
marketing of Licensed Products)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Pending
International & Foreign Patent Applications (all
applications filed by BioLok International, Inc.)


 


	
  Title

  	
   

  	
  Filing Date

  	
   

  	
  Country

  	
   

  	
  Appln. No.

  
	
  Maxillofacial
  Surgical Elements Having Ordered Microgeometric Surface Patterns

  	
   

  	
  02/01/2001

  	
   

  	
  Europe

  	
   

  	
  01908781.6

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dental
  Implant having a dual bio-affinity collar

  	
   

  	
  06/19/2001

  	
   

  	
  Canada

  	
   

  	
  2414671

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Europe

  	
   

  	
  01983914.1

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Israel

  	
   

  	
  153698

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Micromechanical
  Seal for Dental Implant Systems

  	
   

  	
  09/19/2001

  	
   

  	
  Europe

  	
   

  	
  01973194.2

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Method
  of Bone Expansion and Compression for Receiving a Dental Implant Using
  Threaded Expanders

  	
   

  	
  07/24/2004

  	
   

  	
  China

  	
   

  	
  200480022077.3

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Europe

  	
   

  	
  04779341.9

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Japan

  	
   

  	
  2006-522013

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Korea

  	
   

  	
  2006-7001699

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surgical
  Implant for promotion of osseo-integration

  	
   

  	
  04/07/2005

  	
   

  	
  Canada

  	
   

  	
  2556409

  



 






(1) Assigned to Minimatic (predecessor name of BioLok)


(2) Subject to UAB License Agreement (exclusive license)


(3) Co-owned with UAB Research Foundation; subject to UAB License
Agreement (exclusive license)


(4) Non-exclusive ownership interest; subject to HJD License Agreement


(5) Subject to HJD License Agreement (exclusive)


(6) Subject to Spiralock License Agreement (exclusive for the field of
dental implants)


(7) Subject to R&J Innovations License Agreement (exclusive for
marketing of Licensed Products)


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Orthogen License Agreement


 


The
following patents and patent applications (which, to the extent based on joint
HJD/Orthogen microgeometry technology, are subject to the License Agreement
dated as of August 4, 1999 by and between Hospital For Joint Diseases
Orthopaedic Institute, as licensor, and Orthogen Corporation, as licensee)
have been sub-licensed by Orthogen Corporation (a wholly owned subsidiary of
BioLok International Inc.) to Orthogen, LLC (in which Parent holds a 49% equity
interest):


 


	
  Patents
  and

  Applications

  	
   

  	
  Title

  
	
  #11/799262

  	
   

  	
  Orthopedic
  implants having ordered microgeometric surface patterns

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 














 


U.S.
Registered Trademarks


 


	
  Description

  	
   

  	
  Registration/Appln. No.

  	
   

  	
  Status

  	
   

  	
  Owner

  
	
  Bonegen
  Calcium Sulfate Hemihydrate

  	
   

  	
  3232475

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Laser-lok

  	
   

  	
  2465070

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BIOHORIZONS

  	
   

  	
  2794089

  	
   

  	
  LIVE

  	
   

  	
  BioHorizons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BIOHORIZONS

  	
   

  	
  2794090

  	
   

  	
  LIVE

  	
   

  	
  BioHorizons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Autotac

  	
   

  	
  2814871

  	
   

  	
  LIVE

  	
   

  	
  BioHorizons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lok-Screw

  	
   

  	
  2824626

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Osseo-Lok

  	
   

  	
  2905587

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bio-cera

  	
   

  	
  2908000

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mem-lok

  	
   

  	
  2941090

  	
   

  	
  LIVE

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mineross

  	
   

  	
  3218922

  	
   

  	
  LIVE

  	
   

  	
  BioHorizons

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spiralock

  	
   

  	
  1123588

  	
   

  	
  LIVE

  	
   

  	
  Spiralock(6)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  AS123

  	
   

  	
  Not
  registered

  	
   

  	
  N/A

  	
   

  	
  R&J
  Innovations(7)

  



 


Domain
Names


 


	
  Description

  	
   

  	
  Owner

  
	
  Biolok.com;
  bio-lok.com; biolokftp.com; biolokimplants.com; biolokinternational.com;
  bonegen.com; laserlok.com; bioloknews.com

  	
   

  	
  BioLok

  
	
   

  	
   

  	
   

  
	
  Biohorizons.com;
  maximusos.com

  	
   

  	
  BioHorizons

  



 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


	
  License
  Agreement

  	
   

  	
  Address

  	
   

  	
  Restrictions on Transfer

  
	
  UAB
  Research Foundation (“UAB”)

  	
   

  	
  AB
  770

  1530 3rd Ave S

  Birmingham, AL 35294-0107

  	
   

  	
  Written
  consent required.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New
  York University School of Medicine/ Hospital of Joint Diseases (“HJD”)*

  	
   

  	
  New
  York University

  Industrial Liaison/Technology

  Transfer

  650 First Avenue, 6th Floor

  New York, NY 10016

  	
   

  	
  Written
  consent required.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Spiralock

  	
   

  	
  Madison
  Tech Center

  25219 Dequindre Road

  Madison Heights, MI 48071-0629

  	
   

  	
  Written
  consent required, but may be transferred in conjunction with a transfer of
  all or substantially all assets/stock w/o such consent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  R&J
  Innovations

  	
   

  	
  7631
  Grand Ave.

  Winterpark, FL 32792

  	
   

  	
  Written
  consent required, but may be transferred to an affiliate or in conjunction
  with a transfer of all or substantially all assets w/o such consent.

  



 






*The
Hospital for Joint Diseases merged with NYU Hospitals Center (“NYUHC”), a
subsidiary of New York University (NYU) of which NYU is the sole member, on January 1,
2006, with NYUHC being the surviving entity. NYUHC then assigned all of its
patents to NYU.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 4.4


 


[Insurance]


 


[See Attached]


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 





 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 





 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 





 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 





 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 





 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 

















 


Schedule 4.9


 


[Notices]


 


See
Schedule 3.6.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 















 


Schedule 5.1


 


[Debt; Contingent Obligations]


 


	
   

  	
   

  	
  Type

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Current

  	
   

  	
  Long Term

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
  (Line, Term,

  	
   

  	
  Secured/

  	
   

  	
   

  	
   

  	
  Interest

  	
   

  	
  Original

  	
   

  	
  Maturity

  	
   

  	
  Repayment

  	
   

  	
  Accrued

  	
   

  	
  Portion

  	
   

  	
  Portion

  	
   

  	
  Debt

  	
   

  
	
  Lenders

  	
   

  	
  Mortgage...)

  	
   

  	
  Unsecured

  	
   

  	
  Collateral

  	
   

  	
  Rate

  	
   

  	
  Balance

  	
   

  	
  Date

  	
   

  	
  Terms

  	
   

  	
  Interest

  	
   

  	
  Debt (A)

  	
   

  	
  Debt (B)

  	
   

  	
  (A) + (B)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SteelChase Financial Services, Inc.

  	
   

  	
  Lease

  	
   

  	
   

  	
   

  	
  Cubicles

  	
   

  	
  4.82

  	
  %

  	
  158,000

  	
   

  	
  07/2011

  	
   

  	
  48 months

  	
   

  	
  —

  	
   

  	
  (33,026

  	
  )

  	
  121,695

  	
   

  	
  88,669

  	
   

  
	
  AEL Financials, LLC.

  	
   

  	
  Lease

  	
   

  	
   

  	
   

  	
  Bionix
  Equipment

  	
   

  	
  7.98

  	
  %

  	
  105,000

  	
   

  	
  12/2012

  	
   

  	
  60 months

  	
   

  	
  —

  	
   

  	
  12,038

  	
   

  	
  79,464

  	
   

  	
  91,502

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Total

  	
   

  	
  -0-

  	
   

  	
  36,574,913

  	
   

  	
  10,686,001

  	
   

  	
  47,260,914

  	
   

  



 






*No contingent obligations.


 


Portions of this Exhibit were omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment pursuant to Rule 406 of the
Securities Act of 1933, as amended.


 














 


Schedule 5.2


 


[Liens]


 


BioHorizons
Implant Systems, Inc.


 


1.             Debtor:
BioHorizons Implant Systems, Inc.


Secured
Party: U.S. Express Leasing, Inc.


Date
Lien Filed: 12/04/2006


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


2.             Debtor:
BioHorizons Implant Systems, Inc.


Secured
Party: Steelcase Financial Services Inc


Date
Lien Filed: 6/15/2007


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


3.             Debtor:
BioHorizons Implant Systems, Inc.


Secured
Party: Key Equipment Finance, Inc.


Date
Lien Filed: 1/31/2008


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


4.             Debtor:
BioHorizons Implant Systems, Inc.


Secured
Party: Mitel Leasing, Inc.


Date
Lien Filed: 8/01/2008


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


BioLok
International Inc.


 


1.             Debtor: BioLok
International Inc.


Secured
Party: Orix Financial Services, Inc.


Date
Lien Filed: 09/14/2005


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


2.             Debtor: BioLok
International Inc.


Secured
Party: Orix Financial Services, Inc.


Date
Lien Filed: 11/22/2005


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


3.             Debtor: BioLok
International Inc.


Secured
Party: Equilease Financial Services, Inc.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Date
Lien Filed: 1/25/2008


Jurisdiction
of Lien: State of Delaware


Collateral:
Specified equipment.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Schedule 5.7


 


[Permitted Investments]


 


None.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Schedule 5.8


 


[Affiliate Transactions]


 


Subordinated
Debt Agreements dated March 2006, June 2006, and December 2008
by and between BioHorizons Implant Systems, Inc. and BioHorizons GmbH
cover a cumulative intercompany debt amount of 2,130,000 euros.  The Agreements state that BioHorizons Implant
Systems, Inc, as the parent company, agrees to subordinate its intercompany
receivable from BioHorizons GmbH behind all other creditors of BioHorizons
GbmH.


 


In
the regular course of business, BioHorizons Implant Systems, Inc.
transfers inventory for sale to each of its foreign sales offices, whether
branches or subsidiaries, recorded as an intercompany sale using a transfer
price that meets the “arms length transaction” standard. These intercompany
sales generate a receivable on the Borrower’s books which is due from the
respective Affiliate (non-Borrower). Foreign sales offices are located in
Canada, Spain, Germany, the United Kingdom, Australia, Mexico and Chile.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Schedule 5.11


 


[Business Description]


 


Developing,
manufacturing and distributing oral reconstructive devices, including but not
limited to dental implants and tissue regeneration products.


 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Schedule 5.14


 


[Deposit Accounts and Securities Accounts]


 


BIOHORIZONS, INC


BANK
ACCOUNTS


 


	
  Description

  	
   

  	
  Bank

  	
   

  	
  DDA Account

  	
   

  	
  Loan Party

  	
   

  	
  Notes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Current Accounts in Operation

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BioHorizons
  Control Disbursements

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BioHorizons
  Payroll

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BioHorizons
  Proceeds (RB Proceeds)

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BioHorizons
  Receipts Depository

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BIS
  Disbursements Depository

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BioHorizons
  Canada

  	
   

  	
  BMO

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  BioHorizons
  Canada

  	
   

  	
  BMO

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  
	
  Money
  Market Sweep

  	
   

  	
  Regions

  	
   

  	
   

  	
   

  	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
   

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 

















 


Schedule 7.4


 


POST-CLOSING MATTERS


 


BIOHORIZONS


 


1.             On or before
the thirtieth (30th) calendar day following the Closing Date (or such later
date as Administrative Agent, in its sole discretion, shall permit in writing),
Borrowers shall deliver to Administrative Agent fully executed Blocked Account
Agreements, acceptable to Administrative Agent, entered into with Bank of
Montreal, for each Canadian Account in accordance with Section 2.11 of the
Agreement;


 


2.             On or before the thirtieth (30th)
calendar day following the Closing Date (or such later date as Administrative
Agent, in its sole discretion, shall permit in writing), Borrowers shall
provide file stamped UCC-3 financing statements amending the lien of record by
Key Equipment Finance, Inc. against BioHorizons Implant
Systems, Inc., lien number 20080454874 filed with the Secretary of State
of Delaware, to remove the lien on any property other than the Equipment that
is the subject of that certain Lease Agreement dated January 24, 2008 between
Key Equipment Finance, Inc., as assignee of AEL Financial, LLC, and
BioHorizons Implant Systems, Inc. (the “Key Lease”), and the proceeds of such Equipment, in
form and substance satisfactory to Administrative Agent;


 


3.             On or before the thirtieth (30th)
calendar day following the Closing Date (or such later date as Administrative
Agent, in its sole discretion, shall permit in writing), Borrowers shall
deliver to Administrative Agent a copy of the Key Lease, and any schedules
thereto, amended to release and remove the lien on any property other than the
Equipment that is the subject of the Key Lease and proceeds thereof; and


 


4.             On or before the sixtieth (60th)
calendar day following the Closing Date (or such later date as Administrative
Agent, in its sole discretion, shall permit in writing), Borrowers shall
deliver to Administrative Agent executed Security Interest Consent Agreements
with: (a) LifeCell Corporation; and (b) Osteotech.


 


Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities
Act of 1933, as amended.


 

















 


Schedule 9.1 — Collateral


 


The
Collateral consists of all of Borrower’s right, title and interest in and to
the following, whether now owned or hereafter created, acquired or arising, and
all proceeds and products of the following:


 


All
goods, Accounts (including health-care insurance receivables),
Equipment, Inventory, contract rights or rights to payment of money,
leases, license agreements, franchise agreements, General Intangibles (except
as provided below), commercial tort claims, documents, instruments (including
any promissory notes), chattel paper (whether tangible or electronic), cash,
deposit accounts, securities accounts, fixtures, letter of credit rights
(whether or not the letter of credit is evidenced by a writing), securities,
and all other investment property, supporting obligations, and financial
assets, whether now owned or hereafter acquired, wherever located; and


 


All
of Borrowers’ books relating to the foregoing, and any and all claims, rights
and interests in any of the above and all substitutions for, additions,
attachments, accessories, accessions and improvements to and replacements,
products, proceeds and insurance proceeds of any or all of the foregoing.


 


Notwithstanding
the foregoing, the Collateral shall exclude the Excluded Collateral.


 


Portions of this Exhibit were omitted and have been filed separately
with the Secretary of the Commission pursuant to the Registrant’s application
requesting confidential treatment pursuant to Rule 406 of the Securities
Act of 1933, as amended.


 

















 


Schedule 9.2


 


[Location of Collateral]


 


The
Chief Executive Office for all locations is 2300 Riverchase Center, Birmingham,
Alabama 35244. Further the books and records for each Borrower are located at
2300 Riverchase Center, Birmingham, Alabama 35244.


 


	
  Loan Party

  	
   

  	
  Principal Place of Business

  	
   

  	
  Leased

  (Yes/No)

  	
   

  	
  Name and Address of Owner

  
	
  BioHorizons, Inc.

  	
   

  	
  2300
  Riverchase Center

  Birmingham, Alabama 35244

  	
   

  	
  Yes

  	
   

  	
  Colonial
  Properties Trust, 569 Brookwood Village, Suite 851, Homewood, Alabama
  35209

  
	
  Biolok
  Acquisition Corp.

  	
   

  	
  2300
  Riverchase Center

  Birmingham, Alabama 35244

  	
   

  	
  Yes

  	
   

  	
  Colonial
  Properties Trust, 569 Brookwood Village, Suite 851, Homewood, Alabama
  35209

  
	
  BioHorizons
  Implant Systems, Inc.

  	
   

  	
  2300
  Riverchase Center

  Birmingham, Alabama 35244

  	
   

  	
  Yes

  	
   

  	
  Colonial
  Properties Trust, 569 Brookwood Village, Suite 851, Homewood, Alabama
  35209

  
	
  Biolok
  International Inc.

  	
   

  	
  2300
  Riverchase Center

  Birmingham, Alabama 35244

  	
   

  	
  Yes

  	
   

  	
  Colonial
  Properties Trust, 569 Brookwood Village, Suite 851, Homewood, Alabama
  35209

  
	
  Orthogen
  Corporation

  	
   

  	
  2300
  Riverchase Center

  Birmingham, Alabama 35244

  	
   

  	
  Yes

  	
   

  	
  Colonial
  Properties Trust, 569 Brookwood Village, Suite 851, Homewood, Alabama
  35209

  



 


Portions
of this Exhibit were omitted and have been filed separately with the
Secretary of the Commission pursuant to the Registrant’s application requesting
confidential treatment pursuant to Rule 406 of the Securities Act of 1933,
as amended.


 






 










 


REVOLVING
LOAN NOTE


 


	
  $12,500,000.00

  	
   

  	
  Bethesda,
  Maryland

  
	
   

  	
   

  	
  March 31,
  2010

  



 


FOR VALUE RECEIVED, each of
the undersigned, BIOHORIZONS, INC., a Delaware
corporation (“Parent”), BIOLOK ACQUISITION CORP.,
a Delaware corporation (“Acquisition”), BIOHORIZONS
IMPLANT SYSTEMS, INC., a Delaware corporation (“BioHorizons”),
BIOLOK INTERNATIONAL INC., a Delaware
corporation (“International”), and ORTHOGEN CORPORATION,
a New Jersey corporation (“Orthogen”, and together with Parent, Acquisition,
BioHorizons, and International, individually, each a “Borrower” and
collectively, “Borrowers”), hereby jointly and severally unconditionally
promises to pay to the order of MIDCAP FUNDING I, LLC,
a Delaware limited liability company (together with its successors and assigns,
“Lender”) at the office of Administrative Agent (as defined herein) at
7735 Old Georgetown Rd., Suite 400, Bethesda, MD 20814, or at such other
place as Administrative Agent may from time to time designate in writing, in lawful
money of the United States of America and in immediately available funds, in
the principal sum of TWELVE MILLION FIVE HUNDRED THOUSAND and NO/100 DOLLARS
($12,500,000.00), or, if less, the aggregate unpaid principal amount of all
Revolving Loans made or deemed made by Lender to Borrowers under the terms of
that certain Credit and Security Agreement of even date herewith (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), by and among Borrowers, such other borrowers that may become “Borrowers”
under the Credit Agreement, various financial institutions as are, or may from
time to time become, parties thereto as lenders (including without limitation,
Lender) and MidCap Funding I, LLC, individually as a Lender, and as
administrative agent (in such capacity and together with its successors and
assigns, “Administrative Agent”). All capitalized terms used herein
(which are not otherwise specifically defined herein) shall be used in this
Revolving Loan Note (this “Note”) as defined in the Credit Agreement.


 


1.             The outstanding principal balance of the Revolving Loans
evidenced by this Note shall be payable in full on the Termination Date, or on
such earlier date as provided for in the Credit Agreement.


 


2.             This Note is issued in accordance with the provisions of
the Credit Agreement and is entitled to the benefits and security of the Credit
Agreement and the other Financing Documents, and reference is hereby made to
the Credit Agreement for a statement of the terms and conditions under which
the Revolving Loans evidenced hereby may be made and are required to be repaid.


 


3.             Each Borrower promises to pay interest from the date
hereof until payment in full hereof on the unpaid principal balance of the
Revolving Loans evidenced hereby at the per annum rate or rates set forth in
the Credit Agreement. Interest on the unpaid principal balance of the Revolving
Loans evidenced hereby shall be payable on the dates and in the manner set
forth in the Credit Agreement. Interest as aforesaid shall be calculated in accordance
with the terms of the Credit Agreement.


 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


4.             Upon and after the occurrence of an Event of Default,
and as provided in the Credit Agreement, the Revolving Loans evidenced by this
Note may be declared, and immediately shall become, due and payable without demand,
notice or legal process of any kind; provided, however,
that upon the occurrence of an Event of Default pursuant to the provisions of Section 10.1(e) or
Section 10.1(f) of the Credit Agreement, the Revolving Loans
evidenced by this Note shall automatically be due and payable, without demand,
notice or acceleration of any kind whatsoever.


 


5.             Payments received in respect of the Revolving Loans
shall be applied as provided in the Credit Agreement.


 


6.             Presentment, demand, protest and notice of presentment,
demanc, nonpayment and protest are each hereby waived by each Borrower.


 


7.             No waiver by Administrative Agent or any Lender of any
one or more defaults by the undersigned in the performance of any of its
obligations under this Note shall operate or be construed as a waiver of any
future default or defaults, whether of a like or different nature, or as a
waiver of any obligation of any Borrower to any other lender under the Credit
Agreement.


 


8.             No provision of this Note may be amended, waived or
otherwise modified unless such amendment, waiver or other modification is in
writing and is signed or otherwise approved by Borrowers, the Required Lenders
and any other lender under the Credit Agreement to the extent required under Section 11.16
of the Credit Agreement.


 


9.             THIS NOTE SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF MARYLAND WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


10.           Whenever possible each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any provision of or obligation under this Note shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.


 


11.           Whenever in this Note reference is made to Administrative
Agent, Lender or Borrowers, such reference shall be deemed to include, as
applicable, a reference to their respective successors and assigns. The
provisions of this Note shall be binding upon each Borrower and its successors
and assigns, and shall inure to the benefit of Lender and its successors and
assigns.


 


12.           In addition to and without limitation of any of the
foregoing, this Note shall be deemed to be a Financing Document and shall
otherwise be subject to all of general terms and conditions contained in Article 12
of the Credit Agreement, mutatis mutandis.


 


(Signatures
to Appear on Following Page)


 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


2

















 


(Signature
Page to Revolving Loan Note)


 


IN
WITNESS WHEREOF, intending to be legally bound, and intending than,
this Note constitute an instrument duly executed under seal, the undersigned
have executed this Note under seal as of the day and year first hereinabove set
forth.


 


	
  BORROWERS:

  	
  BIOHORIZONS, INC., a Delaware
  corporation

  
	
   

  	
  BIOLOK ACQUISITION
  CORP., a Delaware corporation

  
	
   

  	
  BIOHORIZONS IMPLANT
  SYSTEMS, INC., a Delaware corporation

  
	
   

  	
  BIOLOK INTERNATIONAL
  INC., a Delaware corporation

  
	
   

  	
  ORTHOGEN CORPORATION, a New Jersey
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  Kendyl Lowe

  	
  (SEAL)

  
	
   

  	
   

  	
  Kendyl Lowe

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  As Chief Financial
  Officer of each of the above entities and in such capacity, intending by this
  signature to legally bind each of the above entities

  



 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


TERM
LOAN NOTE


 


	
  $5,000,000.00

  	
  Bethesda,
  Maryland

  
	
   

  	
  March 31,
  2010

  



 


FOR VALUE RECEIVED, each of
the undersigned, BIOHORIZONS, INC., a Delaware
corporation (“Parent”), BIOLOK
ACQUISITION CORP., a Delaware corporation (“Acquisition”),
BIOHORIZONS IMPLANT SYSTEMS, INC., a
Delaware corporation (“BioHorizons”), BIOLOK INTERNATIONAL INC., a Delaware corporation (“International”), and ORTHOGEN CORPORATION,
a New Jersey corporation (“Orthogen”, and
together with Parent, Acquisition, BioHorizons, and International,
individually, each a “Borrower” and collectively, “Borrowers”),
hereby jointly and severally unconditionally promises to pay to the order of MIDCAP FUNDING I, LLC, a Delaware limited liability company
(together with its successors and assigns, “Lender”) at the office of
Administrative Agent (as defined herein) at 7735 Old Georgetown Rd., Suite 400,
Bethesda, MD 20814, or at such other place as Administrative Agent may from time
to time designate in writing, in lawful money of the United States of America
and in immediately available funds, in the principal sum of FIVE MILLION and
NO/100 DOLLARS ($5,000,000.00), pursuant to the terms of that certain Credit
and Security Agreement of even date herewith (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
by and among Borrowers, such other borrowers that may become “Borrowers” under
the Credit Agreement, various financial institutions as are, or may from time
to time become, parties thereto as lenders (including, without limitation,
Lender) and MidCap Funding I, LLC, individually as Lender, and as agent (in
such capacity and together with its successors and assigns, “Administrative
Agent”).  All capitalized terms used
herein (which are not otherwise specifically defined herein) shall be used in
this Term Loan Note (this “Note”) as defined in the Credit Agreement.


 


1.             The outstanding principal balance of the Term Loan
evidenced by this Note shall be payable in full on the Term Loan Termination
Date, or on such earlier date as provided for in the Credit Agreement.


 


2.             This Note is issued in accordance with the provisions of
the Credit Agreement and is entitled to the benefits and security of the Credit
Agreement and the other Financing Documents, and reference is hereby made to
the Credit Agreement for a statement of the terms and conditions under which
the Term Loan evidenced hereby was made and is required to be repaid.


 


3.             Each Borrower promises to pay interest from the date
hereof until payment in full hereof on the unpaid principal balance of the Term
Loan evidenced hereby at the per annum rate or rates set forth in the Credit
Agreement. Interest on the unpaid principal balance of the Term Loan evidenced
hereby shall be payable on the dates and in the manner set forth in the Credit
Agreement. Interest as aforesaid shall be calculated in accordance with the
terms of the Credit Agreement.


 


4.             Upon and after the occurrence of an Event of Default,
and as provided in the Credit Agreement, the Term Loan evidenced by this Note
may be declared, and immediately shall become, due and payable without demand,
notice or legal process of any kind; provided, 


 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 

















 


however, that upon the
occurrence of an Event of Default pursuant to the provisions of Section 10.1(e) or
Section 10.1(f) of the Credit Agreement, the Term Loan
evidenced by this Note shall automatically be due and payable, without demand,
notice or acceleration of any kind whatsoever.


 


5.             Payments received in respect of the Term Loan shall be
applied as provided in the Credit Agreement.


 


6.             Presentment, demand, protest and notice of presentment,
demand, nonpayment and protest are each hereby waived by Borrowers.


 


7.             No waiver by Administrative Agent or any Lender of any
one or more defaults by the undersigned in the performance of any of its
obligations under this Note shall operate or be construed as a waiver of any
future default or defaults, whether of a like or different nature, or as a
waiver of any obligation of Borrowers to any other lender under the Credit
Agreement.


 


8.             No provision of this Note may be amended, waived or
otherwise modified unless such amendment, waiver or other modification is in
writing and is signed or otherwise approved by Borrowers, the Required Lenders
and any other lender under the Credit Agreement to the extent required under Section 11.16
of the Credit Agreement.


 


9.             THIS NOTE SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF MARYLAND WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.


 


10.           Whenever possible each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any provision of or obligation under this Note shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.


 


11.           Whenever in this Note reference is made to Administrative
Agent, Lender or Borrowers, such reference shall be deemed to include, as
applicable, a reference to their respective successors and assigns.  The provisions of this Note shall be binding
upon each Borrower and its successors and assigns, and shall inure to the
benefit of Lender and its successors and assigns.


 


12.           In addition to and without limitation of any of the
foregoing, this Note shall be deemed to be a Financing Document and shall
otherwise be subject to all of general terms and conditions contained in Article 12
of the Credit Agreement, mutatis mutandis.


 


(Signatures
to Appear on Following Page)


 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.


 


2

















 


Signature
Page to Term Loan Note


 


IN WITNESS WHEREOF,
intending to be legally bound, and intending that this Note constitute an
instrument executed under seal, the undersigned have executed this Note under
seal as of the day and year first hereinabove set forth.


 


	
  BORROWERS:

  	
  BIOHORIZONS, INC., a Delaware
  corporation

  
	
   

  	
  BIOLOK ACQUISITION CORP., a Delaware
  corporation

  
	
   

  	
  BIOHORIZONS IMPLANT
  SYSTEMS, INC., a Delaware corporation

  
	
   

  	
  BIOLOK INTERNATIONAL
  INC., a Delaware corporation

  
	
   

  	
  ORTHOGEN CORPORATION, a New
  Jersey corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /S/
  Kendyl Lowe

  	
  (SEAL)

  
	
   

  	
   

  	
  Kendyl Lowe

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  As Chief Financial
  Officer of each of the above entities and in such capacity, intending by this
  signature to legally bind each of the above entities

  



 


Portions of this Exhibit were omitted and have been
filed separately with the Secretary of the Commission pursuant to the
Registrant’s application requesting confidential treatment pursuant to Rule 406
of the Securities Act of 1933, as amended.