Exhibit
10.25


 


SECURITIES
PURCHASE AGREEMENT


 


THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”),
dated as of January 5, 2009, is among AGA MEDICAL CORPORATION, a Minnesota
corporation (the “Company”), AGA MEDICAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), WCAS CAPITAL PARTNERS IV, L.P., a Delaware
limited partnership (the “Purchaser”), and, for purposes of Article XII
hereof, AMPLATZER MEDICAL SALES CORPORATION, a Minnesota corporation, as a
Guarantor hereunder.  Capitalized terms
used and not defined elsewhere in this Agreement are defined in Article I
hereof.


 


RECITALS


 


WHEREAS, Holdings and the Company are entering into
this Agreement, pursuant to which the Purchaser has agreed to purchase (i) from
the Company, and the Company has agreed to issue and sell to the Purchaser,
upon the terms and conditions hereinafter set forth, senior subordinated PIK
notes due 2012 (the “Notes”) in an aggregate principal amount of
$15,000,000 and in the form of Exhibit A hereto and (ii) from
Holdings, and Holdings has agreed to issue and sell to the Purchaser, upon the
terms and conditions hereinafter set forth, 1,879 shares of Series B  Preferred Stock of Holdings, par value $0.001
per share (the “Shares” and together with the Notes, the “Securities”),
the purchase and sale of such Securities to be consummated on the Closing Date
(as hereinafter defined) upon the terms and subject to the conditions set forth
in this Agreement; and


 


NOW, THEREFORE, the parties hereto agree as follows:


 


ARTICLE I



DEFINITIONS


 


SECTION 1.01       Certain Definitions.  The following terms have the meanings set
forth below:


 


“1933 Act” means the Securities Act of 1933.


 


“Action” means any claim, action, cause of
action or suit (whether in contract or tort or otherwise), litigation (whether at
law or in equity, whether civil or criminal), controversy, assessment,
arbitration, investigation, hearing, charge, complaint, demand, notice or
proceeding to, from, by or before any Governmental Authority.


 


“Affiliate” means, with respect to any specified
Person at any time means, (a) each Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such
specified Person at such time, (b) each Person who is at such time an
officer or director of, or direct or indirect beneficial holder of at least 20%
of any class of the Equity Interests of, such specified Person, (c) each
Person that is managed by a common group of executive officers and/or directors
as such specified Person, (d) the members of the immediate family (i) of
each officer, director or holder described in clause (b) and (ii) if
such specified 


 


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Person is an individual, of
such specified Person and (e) each Person of which such specified Person
or an Affiliate (as defined in clauses (a) through (d)) thereof will,
directly or indirectly, beneficially own at least 20% of any class of Equity
Interests at such time.


 


“Business” means the businesses conducted by
Holdings and its Subsidiaries and proposed to be conducted by Holdings and its
Subsidiaries.


 


“Business Day” means any weekday other than a
weekday on which banks in New York, New York are authorized or required to be
closed.


 


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


 


“Change of Control” means (a) a “Change
of Control”, as defined in the certificate of incorporation of Holdings or any
certificate of designations relating to any preferred stock of Holdings or the
Company or (b) a “Change in Control”, as defined in the Credit Agreement
or under any other indebtedness of Holdings or the Company.


 


“Closing Date” means the date on which the
Closing actually occurs.


 


“Code” means the U.S. Internal Revenue Code
of 1986, as amended.


 


“Compensation” means, with respect to any
Person, all salaries, compensation, remuneration, bonuses or benefits of any
kind or character whatever (including issuances or grants of Equity Interests),
made directly or indirectly by the Company to such Person or Affiliates of such
Person.


 


“Contemplated Transactions” means the
transactions contemplated by the execution of this Agreement and the issuance
of the Securities.


 


“Contractual Obligation” means, with respect
to any Person, any contract, agreement, deed, mortgage, lease, license,
commitment, promise, undertaking, arrangement or understanding, whether written
or oral and whether express or implied, or other document or instrument
(including any document or instrument evidencing or otherwise relating to any
Indebtedness,) to which or by which such Person is a party or otherwise subject
or bound or to which or by which any property, business, operation or right of
such Person is subject or bound.


 


“Credit Agreement” means the Amended and
Restated Credit Agreement, dated as of April 28, 2006, among the Company,
Holdings, Lehman Commercial Paper Inc., Lehman Brothers Commercial Bank, Bank
of America, N.A., Citicorp USA, Inc. and Wachovia Bank, National
Association, as Lenders, and each of the other lenders party thereto from time
to time, Lehman Brothers Inc. and Citigroup Global Markets Inc., as Arrangers,
Citigroup Global Markets Inc., as Syndication Agent and Lehman Commercial Paper
Inc., as Administrative Agent for the Lenders, as the same may be amended,
restated, extended, amended and restated, refinanced, replaced or otherwise
modified from time to time.


 


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


 


“Environmental Laws” means any Legal
Requirement relating to (a) releases or threatened releases of Hazardous
Substances, (b) pollution or protection of public health or the
environment or worker safety or health or (c) the manufacture, handling,
transport, use, treatment, storage, or disposal of Hazardous Substances.


 


“Equity Interests” means (a) any capital
stock, share, partnership or membership interest, unit of participation or
other similar interest (however designated) in any Person and (b) any
option, warrant, purchase right, conversion right, exchange rights or other
Contractual Obligation which would entitle any Person to acquire any such
interest in such Person or otherwise entitle any Person to share in the equity,
profit, earnings, losses or gains of such Person (including stock appreciation,
phantom stock, profit participation or other similar rights).


 


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


 


“ERISA Affiliate” means any trade or business
(whether or not incorporated) that, together with the Company, is treated as a
single employer under Section 414 of the Code.


 


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


 


“Financial Officer” means the interim chief
financial officer, chief financial officer, principal accounting officer,
treasurer or controller of the Company, in each case in his or her capacity as
such.


 


“GAAP” means generally accepted accounting
principles in the United States as in effect from time to time.


 


“Government Order” means any order, writ,
judgment, injunction, decree, stipulation, ruling, determination or award
entered by or with any Governmental Authority.


 


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“Governmental Authority” means any United
States federal, state or local or any foreign government, or political
subdivision thereof, or any multinational organization or authority or any
authority, agency or commission entitled to exercise any administrative,
executive, judicial, legislative, criminal, police, regulatory or taxing
authority or power, any court or tribunal (or any department, bureau or
division of any of the foregoing), or any arbitrator or arbitral body.


 


“Guarantor” means any Subsidiary Loan Party
(as defined in the Credit Agreement).


 


“Holder” means any holder of Securities.


 


“Indebtedness” with respect to any Person,
means, without duplication, (a) all obligations of such Person for
borrowed money or with respect to deposits or advances of any kind, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all obligations of such Person upon which interest
charges are customarily paid, (d) all obligations of such Person under
conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of
the deferred purchase price of property or services (excluding trade accounts
payable and accrued obligations incurred in the ordinary course of business), (f) all
obligations of others secured by (or for which the holder of such obligations
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, but limited, in the event such secured
obligations are nonrecourse to such Person, to the fair value of such property,
(g) all guarantees by such Person of the obligations of any other Person, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent
or otherwise, of such Person as an account party or applicant in respect of
letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’
acceptances.  The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such
Person is liable therefor as a result of such Person’s ownership interest in or
other relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.  Notwithstanding the foregoing, the term “Indebtedness”
shall not include post-closing payment adjustments, earn-outs or non-compete
payments to which the seller in any acquisition is or may become entitled or
amounts that any member of management, the employees or consultants of Holdings
or its Subsidiaries may become entitled to under any cash incentive plan in
existence from time to time.


 


“Intellectual Property” means all proprietary
rights of every kind and nature, including all rights and interests pertaining
to or deriving from: (i) patents, copyrights, mask work rights,
technology, know-how, processes, trade secrets, algorithms, inventions, works,
proprietary data, databases, formulae, research and development data and
computer software or firmware; (ii) trademarks, trade names, service
marks, service names, brands, trade dress and logos, and the goodwill and
activities associated therewith; (iii) domain names, rights of privacy and
publicity, moral rights, and proprietary rights of any kind or nature, however
denominated, throughout the world in all media now known or hereafter created; (iv) any
and all registrations, applications, recordings, licenses, common-law rights
and Contractual Obligations relating to any of the foregoing; and (v) all
Actions and rights to sue at law or in equity for any past or future
infringement or other impairment of any of the foregoing, including the right
to receive all ·  


 


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proceeds and damages
therefrom, and all rights to obtain renewals, continuations, divisions or other
extensions of legal protections pertaining thereto.


 


“Legal Requirement” means any United States
federal, state or local or foreign law, statute, standard, ordinance, code,
rule, regulation, resolution or promulgation, or any Governmental Order, or any
license, franchise, permit or similar right granted under any of the foregoing,
or any similar provision having the force or effect of law.


 


“Liability” means, with respect to any
Person, any liability or obligation of such Person whether known or unknown,
whether asserted or unasserted, whether determined, determinable or otherwise,
whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, whether incurred or consequential, whether due or
to become due and whether or not required under GAAP to be accrued on the
financial statements of such Person.


 


“Lien” means any charge, claim, community or
other marital property interest, condition, equitable interest, lien, license,
option, pledge, security interest, mortgage, right of way, easement,
encroachment, servitude, right of first offer or first refusal, buy/sell
agreement and any other restriction or covenant with respect to, or condition
governing the use, construction, voting (in the case of any security or equity
interest), transfer, receipt of income or exercise of any other attribute of
ownership.


 


“Material Adverse Effect” means a material
adverse effect on (a) the business, operations, assets, liabilities,
financial condition or results of operations of the Holdings and its
Subsidiaries, taken as a whole, whether or not covered by insurance, (b) the
ability of the Holdings or its Subsidiaries to perform any obligation under
this Agreement or the Notes or (c) the rights of or benefits available to
the Holders under this Agreement or the Notes.


 


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


 


“Ordinary Course of Business” means an action
taken by any Person in the course of such Person’s business which is consistent
with the past customs and practices of such Person (including past practice
with respect to quantity, amount, magnitude and frequency, standard employment
and payroll policies and past practice with respect to management of working
capital).


 


“Organizational Documents” means, with
respect to any Person (other than an individual), (a) the certificate or
articles of incorporation or organization and any joint venture, limited
liability company, operating or partnership agreement and other similar
documents adopted or filed in connection with the creation, formation or
organization of such Person and (b) all by-laws, voting agreements and
similar documents, instruments or agreements relating to the organization or
governance of such Person, in each case, as amended or supplemented.


 


“Parent” means any direct or indirect parent
of which Holdings is a wholly owned subsidiary.


 


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


 


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“Person” means any individual or corporation,
association, partnership, limited liability company, joint venture, joint stock
or other company, business trust, trust, organization, Governmental Authority
or other entity of any kind.


 


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


 


“Required Holders” means Holders holding not
less than 51% in aggregate principal amount of the Notes at the time
outstanding.


 


“Senior Agent” means Lehman Commercial Paper
Inc., as Administrative Agent under the Credit Agreement, or any successor in
such capacity.


 


“Senior Debt” means all principal, premium
(if any), interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not a claim for post-filing interest is allowed or allowable in any such
proceedings), fees, charges, expenses, indemnification and reimbursement
obligations and all other amounts and obligations payable by the Company under
the Credit Agreement.


 


“Subsidiary” means, with respect to any
specified person, any other Person of which such specified Person will, at the
time, directly or indirectly through one or more Subsidiaries, (a) own at
least 50% of the outstanding capital stock (or other shares of beneficial
interest) entitled to vote generally, (b) hold at least 50% of the
partnership, limited liability company, joint venture or similar interests or (c) be
a general partner, managing member or joint venturer.


 


“Tax” or “Taxes” means (a) any
and all federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, accumulated earnings, environmental, customs duties, capital stock,
franchise, profits, withholding, social security (or similar, including FICA),
unemployment, disability, real property, personal property, sales, use,
transfer, registration, value added, alternative or add-on minimum, estimated,
or other tax of any kind or any charge of any kind in the nature of (or similar
to) taxes whatsoever, including any interest, penalty, or addition thereto,
whether disputed or not and (b) any Liability for the payment of any
amounts of the type described in clause (a) of this definition as a result
of being a member of an affiliated, consolidated, combined or unitary group for
any period, as a result of any tax sharing or tax allocation agreement,
arrangement or understanding, or as a result of being liable for another person’s
taxes as a transferee or successor, by contract or otherwise.


 


“Tax Return” means any return, declaration,
report, claim for refund or information return or statement relating to Taxes,
including any schedule or attachment thereto, and including any amendment
thereof.


 


“Treasury Regulations” means the regulations
promulgated under the Code.


 


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


 


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SECTION 1.02       Accounting Principles.  The character or amount of any asset,
liability, capital account or reserve and of any item of income or expense to
be determined, and any consolidation or other accounting computation to be
made, and the construction of any definition containing a financial term,
pursuant to this Agreement shall be determined or made in accordance with GAAP,
consistently applied, unless such principles are inconsistent with the express
requirements of this Agreement.


 


SECTION 1.03       Other Definitional Provisions; Construction.  Whenever the context so requires, neuter
gender includes the masculine and feminine, the singular number includes the
plural and vice versa.  The words “hereof”
“herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not in any particular
provision of this agreement, and references to section, article, annex,
schedule, exhibit and like references are references to this Agreement unless
otherwise specified.  A Default or Event
of Default shall “continue” or be “continuing” until such Default or Event of
Default has been cured or waived by the Purchaser.  References in this Agreement to any Persons
shall include such Persons’ successors and permitted assigns.  Other terms contained in this Agreement
(which are not otherwise specifically defined herein) shall have meanings
provided in Article 9 of the New York Uniform Commercial Code on the date
hereof to the extent the same are used or defined therein.


 


ARTICLE II



ISSUANCE AND SALE OF SECURITIES


 


SECTION 2.01       Issuance, Sale and Delivery of the
Securities.  Upon the terms and
subject to the conditions of this Agreement, on the Closing Date, Holdings
shall issue, sell and deliver the Shares and the Company shall issue, sell and
deliver the Notes, in each case, to the Purchaser, and the Purchaser shall
purchase the Shares from Holdings and the Notes from the Company, for an
aggregate purchase price of $15,000,000. 
The Purchaser shall pay the purchase price of the Shares to Holdings and
of the Notes to the Company by wire transfer of immediately available funds to
accounts designated by Holdings and the Company, as applicable.


 


SECTION 2.02       The Closing.  The purchase and sale of the Securities (the “Closing”)
will take place at the offices of the Company, located at 5050 Nathan Lane
North, Plymouth, Minnesota 55442, on the first date the conditions set forth in
Article VI have been satisfied or waived by the applicable parties, or at
such other place and on such other date as Holdings, the Company and the
Purchaser may agree in writing, in each case, subject to the satisfaction or
waiver of the conditions set forth in Article VI.  The failure to consummate the purchase and
sale provided for in this Agreement on the date and time and at the place
specified herein will not relieve any party to this Agreement of any obligation
under this Agreement.


 


SECTION 2.03       Aggregate Value.  Holdings, the Company and the Purchaser
acknowledge and agree that the aggregate value of the Notes is $13,120,457.00
and the aggregate value of the Shares is $1,879,543.00 and in each case will be
represented as such by each such party for federal, state and local tax
purposes.


 


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ARTICLE III



REPAYMENT OF THE NOTES


 


SECTION 3.01       Interest.


 


(a)           The Company covenants and agrees to make payments of
accrued interest on the Notes, at the rate of 10% per annum and payable
semiannually in arrears, on January 1 and July 1 of each year,
commencing on July 1, 2009 (each such payment date being referred to as an
“Interest Payment Date”).  The
Company shall pay interest on overdue principal at the rate of 12% per annum
and shall pay interest on overdue installments of interest at the rate of 12%
per annum to the extent lawful.  Interest
shall be computed on the basis of a 360-day year of twelve 30-day months.


 


(b)           If


 


(i)            the
Company is prohibited by Article XI of this Agreement from paying all or
any portion of the accrued interest that is due and payable on any Interest
Payment Date, or


 


(ii)           the
Required Holders agree in writing to defer all or a portion of the accrued
interest that is due and payable on any Interest Payment Date,


 


then such amount of accrued interest shall be
multiplied by 1.2 (such product being referred to as the “PIK Interest”)
and the PIK Interest shall be added to the principal amount of the Note on such
Interest Payment Date (with the result that such interest shall have accrued at
an effective rate of 12% instead of 10% through such Interest Payment Date).


 


SECTION 3.02       Repayment.  The Company covenants and agrees to repay the
unpaid principal balance of the Notes in full, together with all accrued and
unpaid interest, fees and other amounts due hereunder in one payment of the
principal amount as is then outstanding, together with all accrued and unpaid
interest, fees and other amounts due hereunder on July 28, 2012; provided that notwithstanding the foregoing, such date shall
be October 28, 2013 if both the Senior Subordinated Notes (as defined in
the Credit Agreement) and the Sponsor Preferred Stock (as defined in the Credit
Agreement) have been repaid, redeemed, repurchased, defeased (on terms and
conditions satisfactory to the Senior Agent) or otherwise retired in full in
one or more transactions otherwise on or prior to January 28, 2012.


 


SECTION 3.03       Optional Prepayment.  Subject to the terms of the Credit Agreement,
the Company may prepay all or any part of the principal amount of the Notes, at
any time and from time to time, without premium or penalty.


 


SECTION 3.04       Mandatory Prepayment on Initial Public
Offering.  Subject to the terms of
the Credit Agreement, if a Parent, Holdings, the Company or any of its
Subsidiaries consummates a public offering of equity securities pursuant to an
effective registration statement filed under the 1933 Act yielding gross
proceeds of not less than $75,000,000 (an “IPO”), the Company shall
prepay the Notes, without penalty or premium, in an aggregate amount equal to
the net proceeds of such public offering, less the portion of such net 


 


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proceeds that is required to
be applied to prepay the Senior Debt pursuant to the Credit Agreement.


 


SECTION 3.05       Mandatory Prepayment on Change of
Control.  If a Change of Control occurs,
the Company shall prepay in full the outstanding principal amount of the Notes,
without penalty or premium.  Prior to
complying with this Section 3.05, but in any event within 30 days
following a Change of Control, the Company will either repay all its
outstanding Senior Debt or obtain the requisite consents, if any, under the
Credit Agreement to permit the prepayment of the Notes.


 


SECTION 3.06       Notice of Prepayment and Other Notices.  The Company shall give written notice of any
prepayment of any of the Notes or any portion thereof pursuant to Section 3.03
not less than five Business Days prior to the date fixed for such
prepayment.  The Company shall give such
notice of prepayment and all other notices to be given to the Holders at the
address designated for such Holders on the register on the date of mailing such
notice of prepayment or other notice. 
Upon notice of prepayment being given as aforesaid, the Company shall be
irrevocably obligated to prepay, on the date therein fixed for prepayment, the
Notes or the portion thereof, as the case may be, so called for prepayment, at
the principal amount thereof so called for prepayment, together with interest
accrued thereon to the date fixed for such prepayment.  A prepayment of less than all of the outstanding
principal amount of the Notes shall not relieve the Company of its obligation
to make scheduled payments of interest payable in respect of the principal
remaining outstanding on any Interest Payment Date.


 


SECTION 3.07       Surrender of Note; Notation Thereon.  Upon any prepayment of a portion of the
principal amount of the Notes, the Holder, at its option, may require the
Company to execute and deliver at the expense of the Company (except for taxes
or governmental charges imposed in connection therewith), upon surrender of the
Notes, new Notes registered in the name of the Holder or such other persons as
may be designated by the Holder for the principal amount of the Notes then
remaining unpaid, dated as of the date to which interest has been paid on the principal
amount of the Notes then remaining unpaid, or may present the Notes to the
Company for notation of the payment of the portion of the principal amount of
the Notes so prepaid.


 


SECTION 3.08       Taxes.  Any and all payments by the Company under
this Agreement and the Notes that are made to or for the benefit of the Holder
shall be made free and clear of and without deduction for any Taxes, excluding
taxes imposed on the Holder’s net income or capital and franchise taxes imposed
on the Holder by the jurisdiction under the laws of which the Holder is
organized or any political subdivision thereof (all such nonexcluded Taxes
being hereinafter referred to as “Covered Taxes”).  If the Company shall be required by law to
deduct any Covered Taxes from or in respect of any sum payable under this
Agreement and the Notes to the Holder, the sum payable shall be increased as
may be necessary so that after making all required deductions of Covered Taxes
(including deductions of Covered Taxes applicable to additional sums payable
under this paragraph), the Holder receives an amount equal to the sum it would
have received had no such deductions been made. 
The Company shall make such deductions and the Company shall pay the
full amount so deducted to the relevant taxation authority or other authority
in accordance with applicable law.  In
addition, the Company agrees to pay any present or future stamp, documentary,
excise, privilege, intangible or similar levies 


 


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that arise at any time or
from time to time from any payment made under this Agreement or the Notes or
from the execution or delivery by the Company or from the filing or recording
or maintenance of, or otherwise with respect to the exercise by the Holder of
its respective rights under this Agreement or the Notes (collectively, “Other
Taxes”).  The Company will indemnify
the Holder for the full amount of Covered Taxes imposed on or with respect to
amounts payable hereunder and Other Taxes, and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto.  Payment of this indemnification
shall be made within 30 days from the date the Holder provides the Company with
a certificate certifying and setting forth in reasonable detail the calculation
thereof as to the amount and type of such Taxes.  Any such certificates submitted by the Holder
in good faith to the Company shall, absent manifest error, be final, conclusive
and binding on all parties.  The
obligation of the Company under this Section 3.08 shall survive the
payment of the Notes and the termination of this Agreement.


 


SECTION 3.09       Maximum Lawful Rate.  This Agreement and the Notes are hereby
limited by this Section 3.09.  In no
event, whether by reason of acceleration of the maturity of the amounts due
hereunder or otherwise, shall interest and fees contracted for, charged,
received, paid or agreed to be paid to the Holder exceed the maximum amount
permissible under such applicable law. 
If, from any circumstance whatsoever, interest and fees would otherwise
be payable to the Holder in excess of the maximum amount permissible under such
applicable law, the interest and fees shall be reduced to the maximum amount
permitted under applicable law.  If from
any circumstance, the Holder shall have received anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excess of interest shall be applied to the reduction of the
principal amount of the Notes, in such manner as may be determined by the
Holder, and not to the payment of fees or interest, or if such excessive
interest exceeds the unpaid balance of the principal amount of the Notes, such
excess shall be refunded to the Company.


 


SECTION 3.10       Certain Waivers.  The Company unconditionally waives (a) any
rights to presentment, demand, protest or (except as expressly required hereby)
notice of any kind, and (b) any rights of rescission, setoff, counterclaim
or defense to payment under the Notes or otherwise that the Company may have or
claim against the Holder.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND THE COMPANY


 


In order to induce the Purchaser to enter into this
Agreement and purchase the Securities, each of Holdings and the Company hereby
represents and warrants to the Purchaser as follows:


 


SECTION 4.01       Organization; Subsidiaries.  Each of Holdings and the Company is (a) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization and (b) is duly qualified to do business
and in good standing in each jurisdiction in which it owns or leases Real
Property and in each other jurisdiction in which the failure to so qualify has
not had, and is not reasonably likely to have, a Material Adverse Effect.  Holdings and the Company has delivered to the
Purchaser true, accurate and complete copies of (x) the Organizational
Documents of Holdings and the Company and (y) the minute books of Holdings
and the Company which contain records of all meetings held of, and other 


 


10

















 


corporate actions taken by,
its stockholders, Board of Directors and any committees appointed by its Board
of Directors.  Except as set forth on Schedule
4.01 hereto, the Company has no Subsidiaries and does not own any Equity
Interests of any other Person.


 


SECTION 4.02       Power and Authorization.  The execution, delivery and performance of
this Agreement by Holdings and the Company and the Notes by the Company and the
consummation of the Contemplated Transactions are within the power and
authority of Holdings and the Company and have been duly authorized by all
necessary action on the part of Holdings and the Company.  This Agreement (a) has been duly
executed and delivered by Holdings and the Company and (b) is a legal,
valid and binding obligation of Holdings and the Company, enforceable against
Holdings and the Company in accordance with its terms.  Holdings and the Company has the full power
and authority necessary to own and use its Assets and carry on the Business.


 


SECTION 4.03       Authorization of Governmental
Authorities.  No action by (including
any authorization, consent or approval), or in respect of, or filing with, any
Governmental Authority, except for the filing of the Restated Charter (as
defined in Section 6.08), is required for, or in connection with, the
valid and lawful (a) authorization, execution, delivery and performance of
this Agreement by Holdings and the Company and the Notes by the Company or (b) the
consummation of the Contemplated Transactions by Holdings and the Company.


 


SECTION 4.04       Noncontravention.  Neither the execution, delivery and
performance of this Agreement by Holdings and the Company or the Notes by the
Company nor the consummation of the Contemplated Transactions will: (a) assuming
the taking of any action by (including any authorization, consent or approval),
or in respect of, or any filing with, any Governmental Authority violate any
Legal Requirement applicable to Holdings or the Company; (b) result in a
breach or violation of, or default under, any Contractual Obligation of
Holdings or the Company; (c) require any action by (including any
authorization, consent or approval) or in respect of (including notice to), any
Person under any Contractual Obligation of Holdings or the Company; (d) result
in the creation or imposition of any Lien upon, or the forfeiture of, any
Asset; or (e) result in a breach or violation of, or default under, the
Organizational Documents of Holdings or the Company.


 


SECTION 4.05       The Securities.


 


(a)           The Shares, when issued and delivered and paid for in
compliance with the provisions of this Agreement, will be validly issued, fully
paid and non-assessable; and


 


(b)           The Notes have been duly executed and delivered by the
Company and constitute a legal, valid and binding obligation of the Company
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.


 


11














 


SECTION 4.06                    Financial
Statements.


 


(a)                                  The Company has
heretofore furnished to the Purchaser its consolidated balance sheet and
consolidated statements of operations and comprehensive income, stockholders’
equity and cash flows as of and for the fiscal years ended December 31,
2006 and December 31, 2007, reported on by Ernst & Young LLP,
independent public accountants.  Such
financial statements present fairly, in all material respects, the financial
position and results of operations and cash flows of the Company and its
Subsidiaries as of such dates and for such periods in accordance with GAAP
consistently applied.


 


(b)                                 The Company has
heretofore furnished to the Purchaser its pro forma consolidated balance sheet
as of the Closing Date, prepared giving effect to the Contemplated Transactions
as if the Contemplated Transactions had occurred on such date.  Such pro forma consolidated balance sheet (i) has
been prepared in good faith based on the same assumptions used to prepare the
pro forma financial statements provided to the Purchaser (which assumptions are
believed by the Company to be reasonable), (ii) accurately reflects all
adjustments necessary to give effect to the Contemplated Transactions and (iii) presents
fairly, in all material respects, the pro forma financial position of the
Company and the Subsidiaries as of the Effective Date as if the Contemplated
Transactions had occurred on such date.


 


(c)                                  Except as
disclosed in the financial statements referred to above or the notes thereto,
after giving effect to the Contemplated Transactions, none of Holdings or its
Subsidiaries has, as of the Closing Date, any material direct or contingent
liabilities.


 


(d)                                 No event,
change or condition has occurred that has had, or is reasonably likely to have,
a material adverse effect on the business, operations, assets, liabilities,
financial condition or results of operations of Holdings and its Subsidiaries,
taken as a whole, since December 31, 2007.


 


ARTICLE V



REPRESENTATIONS AND WARRANTIES OF THE PURCHASER


 


The Purchaser represents and warrants to Holdings
and the Company that:


 


SECTION 5.01                    Organization.  The Purchaser is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.


 


SECTION 5.02                    Power and
Authorization.  The
execution, delivery and performance by the Purchaser of this Agreement and the
consummation of the Contemplated Transactions are within the power and
authority of the Purchaser and have been duly authorized by all necessary
action on the part of the Purchaser. 
This Agreement (a) has been duly executed and delivered by the
Purchaser and (b) is a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.


 


SECTION 5.03                    Authorization
of Governmental Authorities.  No action by (including any authorization,
consent or approval), or in respect of, or filing with, any Governmental
Authority (including any state securities filing in New York) is required for,
or in


 


12

















 


connection with, the valid
and lawful (a) authorization, execution, delivery and performance by the
Purchaser of this Agreement or (b) the consummation of the Contemplated
Transactions by the Purchaser.


 


SECTION 5.04                    Noncontravention.  Neither the execution, delivery and
performance by the Purchaser of this Agreement nor the consummation of the
Contemplated Transactions will:  (a) assuming
the taking of any action by (including any authorization, consent or approval)
or in respect of, or any filing with, any Governmental Authority, violate any
provision of any Legal Requirement applicable to the Purchaser; (b) result
in a breach or violation of, or default under, any Contractual Obligation of
the Purchaser; (c) require any action by (including any authorization,
consent or approval) or in respect of (including notice to), any Person under
any Contractual Obligation; or (d) result in a breach or violation of, or
default under, such Purchaser’s Organizational Documents.


 


SECTION 5.05                    Purchase for
Investment.  The
Purchaser is purchasing the Securities for investment for such Purchaser’s own
account and not with a view to, or for sale in connection with, any
distribution thereof.


 


SECTION 5.06                    Private
Placement.


 


(a)                                  The Purchaser’s
financial situation is such that the Purchaser can afford to bear the economic
risk of holding the Securities for an indefinite period of time, and the
Purchaser can afford to suffer the complete loss of the Purchaser’s investment
in the Securities.


 


(b)                                 The Purchaser’s
knowledge and experience in financial and business matters are such that the
Purchaser is capable of evaluating the merits and risks of the Purchaser’s
investment in the Securities or the Purchaser has been advised by a
representative possessing such knowledge and experience.


 


(c)                                  The Purchaser
understands that the Securities acquired hereunder are a speculative investment
which involves a high degree of risk of loss of the entire investment therein,
that there will be substantial restrictions on the transferability of the
Securities and that following the date hereof there will be no public market
for the Securities and that, accordingly, it may not be possible for the
Purchaser to sell or pledge the Securities, or any interest in the Securities,
in case of emergency or otherwise.


 


(d)                                 The Purchaser
and the Purchaser’s representatives, including, to the extent the Purchaser
deems appropriate, the Purchaser’s legal, professional, financial, tax and
other advisors, have reviewed all documents provided to them in connection with
the Purchaser’s investment in the Securities, and the Purchaser understands and
is aware of the risks related to such investment.


 


(e)                                  The Purchaser
and the Purchaser’s representatives have been given the opportunity to examine
all documents and to ask questions of, and to receive answers from, Holdings,
the Company and their respective representatives concerning Holdings and the
Company, the terms and conditions of the Purchaser’s acquisition of the
Securities and related matters and to obtain all additional information which
the Purchaser or the Purchaser’s representatives deem necessary.


 


13

















 


(f)                                    The Purchaser
is an “accredited investor” as such term is defined in Regulation D promulgated
under the 1933 Act.


 


(g)                                 The Purchaser
does not have any plan or intention to sell, exchange, transfer or otherwise
dispose of (including by way of gift) any of its Securities immediately after
the purchase of the Securities.


 


SECTION 5.07                    No Brokers.  The Purchaser has no Liability of any kind to
any broker, finder or agent with respect to the Contemplated Transactions for
which Holdings or the Company could be Liable.


 


ARTICLE VI



CONDITIONS


 


The obligation of the Purchaser to consummate the Closing
is subject to the prior fulfillment of each the following conditions:


 


SECTION 6.01                    Representations
and Warranties.  The
representations and warranties of Holdings and the Company contained in this
Agreement and in any document, instrument or certificate delivered hereunder (a) that
are not qualified by materiality or Material Adverse Effect will be true and
correct in all material respects at and as of the Closing with the same force
and effect as if made as of the Closing and (b) that are qualified by
materiality or Material Adverse Effect will be true and correct in all respects
at and as of the Closing with the same force and effect as if made as of the
Closing, in each case, other than representations and warranties that expressly
speak only as of a specific date or time, which will be true and correct as of
such specified date or time.


 


SECTION 6.02                    Performance.  Holdings and the Company will have performed
and complied in all material respects, with all agreements, obligations and
covenants contained in this Agreement that are required to be performed or
complied with by it at or prior to the Closing.


 


SECTION 6.03                    Compliance
Certificate.  Holdings
and the Company will have delivered to the Purchaser a certificate certifying
their compliance with the conditions set forth in Sections 6.01, 6.02 and 6.09.


 


SECTION 6.04                    Qualifications.  No provision of any applicable Legal
Requirement and no Government Order will prohibit the consummation of any of
the Contemplated Transactions.


 


SECTION 6.05                    Absence of
Litigation.  No Action
will be pending or threatened in writing which may result in a Government Order
(nor will there be any Government Order in effect) (i) which would prevent
consummation of any of the Contemplated Transactions, (ii) which would result
in any of the Contemplated Transactions being rescinded following consummation,
(iii) which would limit or otherwise adversely affect the right of the
Purchaser to own the Securities or (iv) would compel the Purchaser or any
Affiliate of the


 


14

















 


Purchaser to dispose of all
or any material portion of the business or assets of the Purchaser or
Affiliate.


 


SECTION 6.06                    Consents, etc.  All actions by (including any authorization,
consent or approval) or in respect of (including notice to), or filings with,
any Governmental Authority or other Person that are required to consummate the
Contemplated Transactions or as otherwise reasonably requested by the
Purchaser, will have been obtained or made, in a manner reasonably satisfactory
in form and substance to the Purchaser, and no such authorization, consent or
approval will have been revoked.


 


SECTION 6.07                    Proceedings and
Documents.  All
corporate and other proceedings in connection with the Contemplated Transactions
and all documents incident thereto will be reasonably satisfactory in form and
substance to the Purchaser and its counsel, and they will have received all
such counterpart original and certified or other copies of such documents as
they may reasonably request.


 


SECTION 6.08                    Restated
Articles.  Holdings
will have filed with the Secretary of State of Delaware an Amended and Restated
Certificate of Incorporation, in form and substance reasonably satisfactory to
the Purchaser (the “Restated Charter”), and such Restated Charter shall
have been accepted by such Secretary of State. 
This Agreement and the Securities will have been executed and delivered
to the Purchaser.


 


SECTION 6.09                    No Material
Adverse Change.  Since December 31,
2007, there shall not have occurred any event, change, condition, circumstance
or state of facts that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


SECTION 6.10                    Restated Senior
Subordinated Note.  The Company
will have issued to the Purchaser, as the current holder of that certain 10%
Senior Subordinated Note due July 28, 2012, dated July 28, 2005, in
the aggregate principal amount of $50,000,000 (the “Existing Original Sub
Note”), a new senior subordinated note in the form attached hereto as Exhibit B
which shall amend, restate and replace the Existing Original Sub Note in its
entirety.


 


ARTICLE VII



AFFIRMATIVE COVENANTS


 


Until the principal of and interest on the Notes and
all fees, expenses and other amounts payable under this Agreement and Notes
shall have been paid in full, the Company covenants and agrees that:


 


SECTION 7.01                    Financial
Statements and Other Information.  The Company will furnish to the Holders:


 


(a)                                  within 90 days
(or such shorter period as the SEC shall specify for the filing of annual
reports on Form 10-K) after the end of each fiscal year of the Company
commencing with the fiscal year ended December 31, 2008, (i) its
audited consolidated balance sheet and consolidated statements of operations
and comprehensive income, stockholders’ equity


 


15

















 


and cash flows as of the end
of and for such fiscal year, and the related notes thereto, setting forth in
each case in comparative form the figures for the previous fiscal year, all
reported on by independent public accountants of recognized national standing
(without a “going concern” or like qualification or exception and without any
qualification or exception as to the scope of such audit) to the effect that
such consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Company and the
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied, and (ii) if at any time the Company is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act, a “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” that
describes the financial condition and results of operations of the Company and
its consolidated Subsidiaries;


 


(b)                                 within 45 days
(or such shorter period as the SEC shall specify for the filing of quarterly
reports on Form 10-Q) after the end of each of the first three fiscal
quarters of each fiscal year of the Company commencing with the fiscal quarter
ending March 31, 2009, its consolidated balance sheet and consolidated
statements of operations and comprehensive income, stockholders’ equity and
cash flows as of the end of and for such fiscal quarter and the then-elapsed
portion of the fiscal year, setting forth in each case in comparative form the
figures for the corresponding period or periods of (or, in the case of the
balance sheet, as of the end of) the previous fiscal year, all certified by a
Financial Officer as presenting fairly in all material respects the financial
condition and results of operations of the Company and the Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;


 


(c)                                  concurrently
with any delivery of financial statements under Section 7.01(a) or
7.01(b), a certificate of a Financial Officer (i) certifying as to whether
a Default has occurred and, if a Default has occurred, specifying the details
thereof and any action taken or proposed to be taken with respect thereto, (ii) setting
forth reasonably detailed calculations demonstrating compliance with Sections
8.03, 8.04 and 8.05 and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the Company’s audited
financial statements referred to in Section 4.06 and, if any such change
has occurred, specifying the effect of such change on the financial statements
accompanying such certificate, and (iv) certifying as to the calculation
of Consolidated EBITDA (as defined in the Credit Agreement) on a Pro Forma
Basis (as defined in the Credit Agreement) for the four fiscal quarter period
ending on the date of such financial statements and accompanied by reasonably
detailed supporting evidence, it being understood that each of the calculations
described in this paragraph (c) shall provide a reconciliation to the
financial statements delivered under paragraphs (a) and (b) above;


 


(d)                                 concurrently
with any delivery of financial statements under Section 7.01(a) above,
a certificate of the accounting firm that reported on such financial statements
stating whether they obtained knowledge during the course of their examination
of such financial statements of any Default and, if such knowledge has been
obtained, describing such Default (which certificate may be limited to the
extent required by accounting rules or guidelines);


 


(e)                                  within 30 days
after the commencement of each fiscal year of the Company, a detailed consolidated
budget for such fiscal year (including a projected consolidated


 


16

















 


balance sheet and
consolidated statements of projected operations and cash flows as of the end of
and for such fiscal year) and, promptly when available, any significant
revisions of such budget;


 


(f)                                    promptly after
the same become publicly available, copies of all periodic and other reports,
proxy statements and other materials filed by the Company or any Subsidiary
with the SEC or with any national securities exchange, as applicable; and


 


(g)                                 promptly
following any request therefor, such other information regarding the
operations, business affairs and financial condition of the Company or any
Subsidiary or any Company Plan, or compliance with the terms of this Agreement
or the Notes, as the Holders may reasonably request.


 


SECTION 7.02                    Notices of
Material Events.  The Company
will furnish to the Holders, written notice of the following promptly after
obtaining knowledge thereof:


 


(a)                                  the occurrence
of any Default;


 


(b)                                 the filing or
commencement of any action, suit or proceeding by or before any arbitrator or
Governmental Authority against or affecting the Company or any Subsidiary that,
if adversely determined, is reasonably likely to result in a Material Adverse
Effect;


 


(c)                                  the occurrence
of any ERISA Event that alone or together with any other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Company
and the Subsidiaries in an aggregate amount exceeding $5,000,000;


 


(d)                                 the receipt by
the Company or any Subsidiary of (i) any notice of any loss of (A) accreditation
from the Joint Commission on Accreditation of Healthcare Organizations or (B) any
governmental right, qualification, permit, accreditation, approval,
authorization, license or franchise or (ii) any notice, compliance order
or adverse report issued by any Governmental Authority that, if not promptly
complied with or cured, could result in the suspension or forfeiture of any
material governmental right, qualification, permit, accreditation, approval,
authorization, license or franchise necessary for the Company or any Subsidiary
to carry on its business as now conducted or as proposed to be conducted,
including the right or authorization to sell, distribute, market or donate any
product, or any material restriction, limitation, or prohibition on the
specific use or indication of any product;


 


(e)                                  any claims by
any third parties relating to alleged infringement by Holdings, the Company or
any Subsidiary of any material third party Intellectual Property;


 


(f)                                    any material
developments regarding the FCPA Claims (as defined in the Credit Agreement);
and


 


(g)                                 any other
development that results in, or is reasonably likely to result in, a Material
Adverse Effect.


 


Each notice delivered under this Section 7.02
shall be accompanied by a statement of a Financial Officer or other executive
officer of the Company setting forth the details of the event or


 


17

















 


development requiring such notice and any action
taken or proposed to be taken with respect thereto.


 


SECTION 7.03                    Existence;
Conduct of Business.  The Company
will, and will cause each of the Subsidiaries to, do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, qualifications, permits, approvals, accreditations,
authorizations, licenses, franchises, patents, copyrights, trademarks and trade
names material to the conduct of its business; provided
that the foregoing shall not prohibit any merger, consolidation, liquidation or
dissolution permitted under Section 8.01.


 


SECTION 7.04                    Payment of
Taxes.  The Company will, and will
cause each of the Subsidiaries to, pay its Tax liabilities, before the same
shall become delinquent or in default, except where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b) the
Company or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively
suspends the enforcement of any Lien securing such obligation and (d) the
failure to make payment pending such contest is not reasonably likely to result
in a Material Adverse Effect.


 


SECTION 7.05                    Maintenance of
Properties.  The Company
will, and will cause each of the Subsidiaries to, keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted.


 


SECTION 7.06                    Insurance.  The Company will, and will cause each of the
Subsidiaries to, maintain, with financially sound and reputable insurance
companies (which may include self-insurance), insurance in such amounts (with
no greater risk retention) and against such risks as are customarily maintained
by companies of established repute engaged in the same or similar businesses
operating in the same or similar locations. 
The Company will furnish to the Holders, upon written request,
information in reasonable detail as to the insurance so maintained.


 


SECTION 7.07                    Books and
Records; Inspection and Audit Rights.  The Company will, and will cause each of the
Subsidiaries to, keep proper books of record and account in which full, true
and correct entries are made of all dealings and transactions in relation to
its business and activities.  The Company
will, and will cause each of the Subsidiaries to, permit any representatives
designated by the Holders, upon reasonable prior notice, to visit and inspect
its properties during normal business hours, to examine and make extracts from
its books and records, including environment assessment reports and Phase I or
Phase II studies, and to discuss its affairs, finances and condition with its
officers and independent accountants (provided that the Company shall be
provided the opportunity to participate in any such discussions with its
independent accountants), all at such reasonable times and as often as
reasonably requested.


 


SECTION 7.08                    Compliance with
Laws.  The Company will cause each of
the Subsidiaries to comply with all Requirements of Law, including
Environmental Laws, applicable to it or its property, except where the failure
to do so, individually or in the aggregate, is not reasonably likely to result
in a Material Adverse Effect.


 


18

















 


SECTION 7.09                    Additional
Subsidiaries.  If any
additional Subsidiary is formed or acquired after the Closing Date (or any
Subsidiary becomes a Subsidiary Loan Party or guarantees Indebtedness of any
Person other than a Subsidiary Loan Party), the Company will, promptly after
such Subsidiary is formed or acquired, promptly cause such Subsidiary to
execute a joinder to this Agreement substantially in the form attached as Exhibit C
hereto.


 


ARTICLE VIII



NEGATIVE COVENANTS


 


Until the principal of and interest on the Notes and
all fees, expenses and other amounts payable under this Agreement and Notes
shall have been paid in full, the Company covenants and agrees that:


 


SECTION 8.01                    Fundamental Changes.


 


(a)                                  The Company
will not, nor will it permit any Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or liquidate or dissolve, except that, if at the time thereof and immediately
after giving effect thereto no Default shall have occurred and be continuing, (i) any
Person may merge into the Company in a transaction in which the surviving
entity is a Person organized or existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if such surviving
entity is not the Company, such Person expressly assumes, in writing, all the
obligations the Company under this Agreement and the Notes, (ii) any
Person may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary and (iii) any Subsidiary may liquidate or dissolve
if the Company determines in good faith that such liquidation or dissolution is
in the best interests of the Company and is not materially disadvantageous to
the Holders.


 


(b)                                 The Company
will not, nor will it permit any Subsidiary to, engage to any material extent
in any business other than businesses of the type conducted by the Company and
the Subsidiaries on the Closing Date and businesses reasonably related or
incidental thereto.


 


SECTION 8.02                    Amendment of
Material Documents.  The Company
will not, nor will it permit any Subsidiary to, (a) amend, modify or waive
any of its rights under its Organizational Documents to the extent such
amendment, modification or waiver would be materially adverse to the Holders or
(b) amend, modify or add any covenant or event of default with respect to
the Senior Debt which could reasonably be expected to restrict the Company from
making payments under this Agreement or the Notes permitted to be made under
the Credit Agreement as in effect on the date hereof.


 


SECTION 8.03                    Interest
Expense Coverage Ratio.  The
Company will not permit the ratio (the “Interest Expense Coverage Ratio”)
of (a) Consolidated EBITDA (as defined in the Credit Agreement) to (b) cash
interest expense of the Company and its Subsidiaries, in each case for any
period of four consecutive fiscal quarters ending on the last day of each
fiscal quarter, to be less than 2.00 to 1.00.


 


19

















 


SECTION 8.04                    Leverage Ratio.  The Company will not permit the Leverage
Ratio (as defined in the Credit Agreement) as of any date set forth below to
exceed the ratio set forth opposite such date:


 


	
   

  	
  Date

  	
   

  	
  Ratio

  	
   

  
	
   

  	
  March 31, 2009

  	
   

  	
  5.00
  to 1.00

  	
   

  
	
   

  	
  June 30, 2009

  	
   

  	
  5.00
  to 1.00

  	
   

  
	
   

  	
  September 30, 2009

  	
   

  	
  4.75
  to 1.00

  	
   

  
	
   

  	
  December 31, 2009

  	
   

  	
  4.50
  to 1.00

  	
   

  
	
   

  	
  March 31, 2010

  	
   

  	
  4.25
  to 1.00

  	
   

  
	
   

  	
  June 30, 2010

  	
   

  	
  4.25
  to 1.00

  	
   

  
	
   

  	
  September 30, 2010

  	
   

  	
  4.25
  to 1.00

  	
   

  
	
   

  	
  December 31, 2010 and thereafter

  	
   

  	
  4.00
  to 1.00

  	
   

  



 


SECTION 8.05                    Maximum Capital
Expenditures.  The Company
will not, nor will it permit any Subsidiary to, incur or make any Capital
Expenditures (as defined in the Credit Agreement) except and as set forth
below:


 


	
   

  	
  Fiscal Year

  	
   

  	
  Maximum 

  Capital Expenditures

  	
   

  
	
   

  	
  2009

  	
   

  	
  $11
  million

  	
   

  
	
   

  	
  2010

  	
   

  	
  $11
  million

  	
   

  
	
   

  	
  2011

  	
   

  	
  $11
  million

  	
   

  



 


provided, however, that to the extent that
actual Capital Expenditures for any such fiscal year shall be less than the
maximum amount set forth above for such fiscal year (without giving effect to
the carryover permitted by this proviso), the difference between said stated
maximum amount and such actual Capital Expenditures shall, in addition, be
available for Capital Expenditures in the next succeeding fiscal year; provided further, however, that
no portion of the such amount carried over from the previous fiscal year shall
be allocated to Capital Expenditures in the next fiscal year until the amount
allocated to the current fiscal year is exhausted.


 


ARTICLE IX



TRANSFER OF NOTES


 


SECTION 9.01                    Restricted
Securities.  The
Purchaser acknowledges that the Notes have not been registered under the 1933
Act and may be resold only if registered pursuant to the provisions of the 1933
Act or if an exemption from registration is available, and that the Company is
not required to register the Notes.


 


20

















 


SECTION 9.02                    Legends.  The Company may place an appropriate legend
on the Notes owned by the Purchaser concerning the restrictions set forth in
this Article IX.  Upon the
assignment or transfer by the Purchaser or any of its successors or assignees
of all or any part of the Notes, the term “Purchaser” as used herein shall
thereafter mean, to the extent thereof, the then Holder or Holders of such
Notes, or portion thereof.


 


SECTION 9.03                    Transfer of
Notes.  Subject to Section 9.02
hereof, a Holder may transfer such Note to a new Holder, or may exchange such
Note for Notes of different denominations, by surrendering such Note to the
Company duly endorsed for transfer or accompanied by a duly executed instrument
of transfer naming the new Holder (or the current Holder if submitted for
exchange only), together with written instructions for the issuance of one or
more new Notes specifying the respective principal amounts of each new Note and
the name of each new Holder and each address therefor.  The Company shall simultaneously deliver to
such Holder or its designee such new Notes and shall mark the surrendered Notes
as canceled.  In lieu of the foregoing
procedures, a Holder may assign a Note (in whole but not in part) to a new
Holder by sending written notice to the Company of such assignment specifying
the new Holder’s name and address; in such case, the Company shall promptly
acknowledge such assignment in writing to both the old and new Holder.  The Company shall not be required to
recognize any subsequent Holder of a Note unless and until the Company has
received reasonable assurance that all applicable transfer taxes have been
paid.


 


SECTION 9.04                    Replacement of
Lost Notes.  Upon
receipt of evidence reasonably satisfactory to the Company of the mutilation,
destruction, loss or theft of any Notes and the ownership thereof, the Company
shall, upon the written request of the Holder of such Notes, execute and
deliver in replacement thereof new Notes in the same form, in the same original
principal amount and dated the same date as the Notes so mutilated, destroyed,
lost or stolen; and such Notes so mutilated, destroyed, lost or stolen shall
then be deemed no longer outstanding hereunder. 
If the Notes being replaced have been mutilated, they shall be
surrendered to the Company; and if such replaced Notes have been destroyed,
lost or stolen, such Holder shall furnish the Company with an indemnity in writing
to save it harmless in respect of such replaced Notes.


 


SECTION 9.05                    No Other
Representations Affected. 
Nothing contained in this Article IX shall limit the full force or
effect of any representation, agreement or warranty made herein or in connection
herewith to the Purchaser.


 


ARTICLE X



EVENTS OF DEFAULT


 


SECTION 10.01              Events of Default.  If any one or more of the following events
(each, an “Event of Default”) occurs and is continuing:


 


(a)                                  Default in the
payment of the principal of the Notes when and as the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
acceleration or otherwise; or


 


21

















 


(b)                                 Default in the
payment of any interest or any other amount (other than an amount referred to
in Section 9.01(a) above) due under the Notes, when and as the same
becomes due and payable, and such default continues for a period of three
Business Days; or


 


(c)                                  Default in the
due observance or performance by the Company of any covenant, condition or
agreement contained in Sections 7.03 or 8.01; or


 


(d)                                 Default in the
due observance or performance by the Company of any covenant, condition or
agreement contained in this Agreement or the Notes (other than those specified
in Sections 9.01(a), 9.01(b) or 9.01(c) above) and such default
continues unremedied for a period of 30 days after notice thereof from the
Holders to the Company; or


 


(e)                                  any
representation or warranty made or deemed made in or in connection with this
Agreement or the issuance of the Notes, or any representation, warranty,
statement or information contained in any report, certificate, financial
statement or other instrument furnished pursuant to this Agreement or the Note,
proves to have been false in any material respect when so made, deemed made or
furnished; or


 


(f)                                    the entry of a
decree or order for relief by a court having jurisdiction in the premises in
respect of Holdings or its Subsidiaries in an involuntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar laws, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of Holdings or its Subsidiaries for any substantial part
of any of their respective properties, or ordering the winding-up or
liquidation of any of their affairs and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive days; or


 


(g)                                 the commencement
by Holdings or its Subsidiaries of a voluntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any other
applicable federal or state bankruptcy, insolvency or other similar laws, or
the consent by any of them to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of Holdings or its Subsidiaries for any substantial part of
their respective properties, or the making by any of them of any assignment for
the benefit of creditors, or the failure of Holdings or its Subsidiaries
generally to pay its debts as such debts become due; or


 


(h)                                 Default occurs
under the terms of any Indebtedness of Holdings or any of its Subsidiaries in
an aggregate principal amount exceeding $10,000,000 and such default (i) consists
of the failure to pay any amount of such Indebtedness when due, whether by
acceleration or otherwise or (ii) results in the acceleration of the
maturity of such indebtedness;


 


(i)                                     one or more
judgments for the payment of money in an aggregate amount (in each case to the
extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage in writing and has the ability to perform) in excess of
$10,000,000 is rendered against Holdings, any of its Subsidiaries, or any
combination thereof and the same remains undischarged for a period of 30
consecutive days during which execution is not


 


22














 


effectively stayed, or any
action is legally taken by a judgment creditor to levy upon assets or
properties of Holdings or any of its Subsidiaries to enforce any such judgment;


 


(j)            the Guarantees pursuant to this Agreement shall cease to
be in full force and effect (other than in accordance with the terms of this
Agreement) or shall be asserted by Holdings or any of its Subsidiaries not to
be in effect or not to be legal, valid and binding obligations;


 


then, the Required Holders may, at their option, by notice
to the Company, declare all the Notes to be forthwith due and payable,
whereupon the principal of the Notes, together with accrued interest thereon,
shall become forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are expressly waived by the Company; provided, however, that
in any event described in Sections 10.01(f) or 10.01(g), all the Notes,
together with interest accrued thereon, shall automatically become due and
payable, without presentment, demand, protest or any other notice of any kind,
all of which are hereby expressly waived by the Company.


 


At any time after any declaration of acceleration as
to the Notes has been made as provided in this Section 10.01, the Required
Holders may, by notice to the Company, rescind such declaration and its
consequences, if (a) the Company has paid all overdue installments of
interest on the Notes and all principal that has become due otherwise than by
such declaration of acceleration and (b) all other Defaults and Events of
Default under this Agreement and the Notes (other than nonpayments of principal
and interest that have become due solely by reason of acceleration) have been
remedied or cured or have been waived pursuant to this paragraph; provided, however, that
no such rescission will extend to or affect any subsequent Default or Event of
Default or impair any right consequent thereon.


 


SECTION 10.02     Suits for Enforcement.  If an Event of Default specified in Sections
10.01(a) or 10.01(b) occurs and is continuing or the Notes become
immediately due and payable in accordance with this Section, the Holders may
proceed to protect and enforce their rights by suit in equity, action at law
and/or by other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or in aid of the exercise
of any power granted in this Agreement, or may proceed to enforce the payment
of the Notes or to enforce any other legal or equitable right of the Holders.  In case of any Default under this Agreement,
the Company will pay to the Holders such amounts as shall be sufficient to
cover the costs and expenses of the Holders due to said Default, including,
without limitation, collection costs and reasonable attorneys’ fees.


 


ARTICLE
XI


 


SUBORDINATION
OF NOTES


 


The Notes are subordinated in right of payment to
all Senior Debt to the extent and in the manner provided in this Article XI.


 


SECTION 11.01     Liquidation, Dissolution, or Bankruptcy.  Upon any payment or distribution to creditors
of the Company in a liquidation or dissolution of the 


 


23

















 


Company, in a bankruptcy,
reorganization, insolvency, receivership or similar proceeding relating to the
Company or its property, in an assignment for the benefit of the Company’s
creditors, or in any marshaling of the Company’s assets and liabilities:


 


(a)           holders of Senior Debt will be entitled to receive payment
in full in cash or cash equivalents of all Senior Debt before the Holders of
the Notes are entitled directly or indirectly to receive any payment of
principal of or interest on the Notes, except the Holders of the Notes may
receive and retain (i) debt securities that are subordinated to the Senior
Debt to at least the same extent as the Notes or (ii) equity interests;
and


 


(b)           until payment in full in cash or cash equivalents of all
Senior Debt, any payment to which the Holders of the Notes would be entitled
but for the foregoing clause (a) will be made to holders of Senior Debt as
their interests may appear.


 


SECTION 11.02     Senior Debt Default.  The Company shall not pay principal of, or
interest on, the Notes, and shall not repurchase, redeem or otherwise retire
any Notes (collectively, “pay the Notes”) if (a) any principal, premium
or interest in respect of any Senior Debt is not paid when due after any
applicable grace period or (b) any other default on Senior Debt occurs and
the maturity of such Senior Debt is accelerated in accordance with its terms
unless, in either case, (i) the default has been cured or waived and any
such acceleration has been rescinded or (ii) such Senior Debt has been
paid in full; provided, however,
that the Company may pay the Notes without regard to the foregoing if the
Company receives written notice approving such payment from the Senior
Agent.  During the continuation of any
default (other than a default described in clause (a) or (b) of the
preceding sentence) with respect to any Senior Debt pursuant to which the
maturity thereof may be accelerated immediately without further notice (except
any notice required to effect the acceleration) or the expiration of any
applicable grace period, the Company shall not pay the Notes for a period (a “Payment
Blockage Period”) commencing upon the receipt by the Company of written
notice of such default from the Senior Agent specifying an election to effect a
Payment Blockage Period (a “Payment Blockage Notice”) and ending 179
days thereafter.  The Payment Blockage
Period will end earlier if the Payment Blockage Period is terminated (A) by
written notice to the Company from the Senior Agent, (B) because such
default is no longer continuing, or (C) because such Senior Debt has been
repaid in full.  Unless the holders of
such Senior Debt or the Senior Agent have accelerated the maturity of such
Senior Debt and not rescinded such acceleration, the Company may (unless
otherwise prohibited as described in the first sentence of this paragraph)
resume payments on the Notes after the end of such Payment Blockage Period.  Not more than one Payment Blockage Notice may
be given in any consecutive 360-day period, irrespective of the number of
defaults with respect to the Senior Debt that have occurred during such period.


 


SECTION 11.03     When Distribution Must Be Paid Over.  If a distribution or payment is made to the
Holders of the Notes that is prohibited by Section 11.01 or 11.02, the
Holders of the Notes who receive such distribution or payment shall hold it in
trust for holders of the Senior Debt and pay it over to them as their interests
may appear.


 


SECTION 11.04     Subrogation.  After all Senior Debt is paid in full in cash
and cash equivalents and until the Notes are paid in full, the Holders of the
Notes shall be subrogated to the rights of the holders of Senior Debt to receive
distributions applicable to Senior 


 


24

















 


Debt.  A distribution made under this Article XI
to holders of Senior Debt that otherwise would have been made to the Holders of
the Notes is not, as between the Company and the Holders of the Notes, a
payment by the Company on such Senior Debt.


 


SECTION 11.05     Subordination May Not Be Impaired.  The holders of Senior Debt may, at any time
and from time to time, without the consent of or notice to the Holders of the
Notes, without incurring responsibility to the Holders of the Notes and without
impairing or releasing the subordination provided in this Article XI or
the obligations hereunder of the Holders of the Notes to the holders of such
Senior Debt, do any one or more of the following:  (a) change the manner, place, terms or
time of payment or extend the time of payment of, or renew or alter, such
Senior Debt or any instrument evidencing the same or any agreement under which
such Senior Debt is outstanding; (b) sell, exchange, impair, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Debt; (c) release any person liable in any manner for the
collection or payment of such Senior Debt; and (d) exercise or refrain
from exercising any rights against the Company or any other person.


 


SECTION 11.06     Distribution or Notice to Senior Agent.  Whenever a distribution is to be made or a
notice given to holders of Senior Debt, the distribution may be made and the
notice given to the Senior Agent.


 


SECTION 11.07     Relative Rights; Right To Accelerate.  Article XI defines the relative rights
of the Holders of the Notes and holders of Senior Debt.  Nothing in this Agreement or the Notes
shall:  (a) impair, as between the
Company and the Holders of the Notes, the obligation of the Company, which is
absolute and unconditional, to pay principal of and interest on the Notes in
accordance with their terms; or (b) prevent any Holder of the Notes from
exercising its available remedies upon an Event of Default, subject to the
rights of holders of Senior Debt to receive distributions or payments otherwise
payable to the Holders of the Notes.  The
failure to make a payment pursuant to the Notes by reason of any provision in
this Article XI shall not be construed as preventing the occurrence of an
Event of Default.  If payment of the
Notes is accelerated when any Senior Debt is outstanding, the Company may not
pay the Notes until five Business Days after the Senior Agent receives notice
of such acceleration and, thereafter, may pay the Notes only if the Notes
otherwise permits payment at that time.


 


SECTION 11.08     Reliance by Holders of Senior Debt.  The Purchaser acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Debt, whether such
Senior Debt was created or acquired before or after the issuance of the Notes,
to acquire and continue to hold, or to continue to hold, such Senior Debt and
such holder of such Senior Debt shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.


 


25

















 


ARTICLE
XII


 


GUARANTEE


 


SECTION 12.01     Guarantee.


 


(a)           Subject to this Article XII, each Guarantor hereby,
jointly and severally, unconditionally guarantees to each Holder of a Note,
irrespective of the validity and enforceability of this Agreement, the Notes or
the obligations of the Company hereunder or thereunder, that:


 


(i)            the
principal of, premium and additional interest, if any, and interest on the
Notes shall be promptly paid in full when due, whether at maturity, by
acceleration, redemption or otherwise, and interest on the overdue principal of
and interest on the Notes, if any, if lawful, and all other obligations of the
Company to the Holders hereunder or thereunder shall be promptly paid in full
or performed, all in accordance with the terms hereof and thereof; and


 


(ii)           in
case of any extension of time of payment or renewal of any Notes or any of such
other obligations, that same shall be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, whether at
stated maturity, by acceleration or otherwise.


 


Failing payment when due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors shall be
jointly and severally obligated to pay the same immediately.  Each Guarantor agrees that this is a guarantee
of payment and not a guarantee of collection.


 


(b)           The Guarantors hereby agree that their obligations
hereunder are unconditional, irrespective of the validity, regularity or
enforceability of the Notes or this Agreement, the absence of any action to
enforce the same, any waiver or consent by the Required Holders with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a
guarantor.  Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands
whatsoever and covenant that this Guarantee shall not be discharged except by
complete performance of the obligations contained in the Notes and this
Agreement or by release in accordance with the provisions of this Agreement.


 


(c)           If the Holders are required by any court or otherwise to
return to the Company, the Guarantors or any custodian, trustee, liquidator or
other similar official acting in relation to either the Company or the
Guarantors, any amount paid by the Company or the Guarantors to the Holders,
this Guarantee, to the extent theretofore discharged, shall be reinstated in
full force and effect.


 


(d)           Each Guarantor agrees that it shall not be entitled to any
right of subrogation in relation to the Holders in respect of any obligations
guaranteed hereby until 


 


26

















 


payment in full of all
obligations guaranteed hereby.  Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders, on the other hand, the maturity of the obligations guaranteed
hereby may be accelerated for the purposes of this Guarantee, notwithstanding
any stay, injunction or other prohibition preventing such acceleration in
respect of the obligations guaranteed hereby, and in the event of any
declaration of acceleration of such obligations, such obligations (whether or
not due and payable) shall forthwith become due and payable by the Guarantors
for the purpose of this Guarantee.  The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Guarantee.


 


SECTION 12.02     Subordination of Guarantee.  The obligations of each Guarantor under its
Guarantee pursuant to this Article XII shall be junior and subordinated to
the Senior Debt of such Guarantor on the same basis as the Notes are junior and
subordinated to Senior Debt of the Company as set forth in Article XI for
the purposes of the foregoing sentence, the Holders shall have the right to
receive and/or retain payments by any of the Guarantors only at such times as
they may receive and/or retain payments in respect of the Notes pursuant to
this Agreement.


 


SECTION 12.03     Limitation on Guarantor Liability.  Each Guarantor, and by its acceptance of
Notes, each Holder, hereby confirms that it is the intention of all such
parties that the Guarantee of such Guarantor not constitute a fraudulent
transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or
state law to the extent applicable to any Guarantee.  To effectuate the foregoing intention, the
Holders and the Guarantors hereby irrevocably agree that the obligations of
such Guarantor shall be limited to the maximum amount that shall, after giving
effect to such maximum amount and all other contingent and fixed liabilities of
such Guarantor that are relevant under such laws, and after giving effect to
any collections from, rights to receive contribution from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under this Article XII, result in the obligations of such
Guarantor under its Guarantee not constituting a fraudulent transfer or
conveyance.


 


SECTION 12.04     Guarantor May Consolidate, etc., on
Certain Terms.


 


(a)           Except as otherwise provided in this Article XII, no
Guarantor may sell or otherwise dispose of all or substantially all of its
assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person) another Person, other than either of the
Company or another Guarantor, unless immediately after giving effect to such
transaction, no Default or Event of Default exists and either:


 


(i)            the
Person (if other than either of the Company or a Guarantor) acquiring the
property in any such sale or disposition or the Person (if other than either of
the Company or a Guarantor) formed by or surviving any such consolidation or
merger unconditionally assumes all the obligations of the Guarantor, pursuant
to a joinder in form and substance reasonably satisfactory to the joinder
attached hereto as Exhibit C; or


 


(ii)           the
net proceeds of such sale or other disposition are applied not in contravention
to provisions of this Agreement.


 


27

















 


(b)           In case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by joinder, executed
and delivered to the Holders and satisfactory in form to the Holders, of the
due and punctual performance of all of the covenants and conditions of this
Agreement to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor.  All the
Guarantees shall in all respects have the same legal rank and benefit under
this Agreement as the Guarantees theretofore and thereafter issued in
accordance with the terms of this Agreement as though all of such Guarantees
had been issued at the date of the execution hereof.


 


(c)           Except as set forth in Sections 7.03 or 8.01 and 12.04,
nothing contained in this Agreement or in any of the Notes shall prevent any consolidation
or merger of a Guarantor with or into either of the Company or another
Guarantor, or shall prevent any sale or conveyance of the property of a
Guarantor as an entirety or substantially as an entirety to the Company or
another Guarantor.


 


SECTION 12.05     Releases.


 


(a)           The Guarantee of a Guarantor will be released:


 


(i)            in
connection with any sale or other disposition of all or substantially all of
the assets of that Guarantor (including by way of merger or consolidation) to a
Person that is not (either before or after giving effect to such transaction)
the Company or a Subsidiary;


 


(ii)           in
connection with any sale or other disposition of all of the Equity Interests of
that Guarantor to a Person that is not (either before or after giving effect to
such transaction) the Company or a Subsidiary;


 


(iii)          if
that Guarantor is released from its guarantee under the Credit Agreement; or


 


(iv)          upon
termination of this Agreement.


 


(b)           If any Guarantor is released from its Guarantee, any of
its Subsidiaries that are Guarantors will be released from their Guarantees, if
any.


 


(c)           Any Guarantor not released from its obligations under its
Guarantee as provided in this Article XII shall remain liable for the full
amount of principal of and interest on the Notes and for the other obligations
of any Guarantor under this Agreement as provided in this Article XII.


 


ARTICLE
XIII


 


MISCELLANEOUS


 


SECTION 13.01     Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, 


 


28

















 


except that (a) each of
Holdings and the Company may not assign or transfer its rights hereunder or any
interest herein or delegate its duties hereunder and (b) the Purchaser
shall have the right to assign its rights hereunder and under the Securities in
accordance with Article IX.


 


SECTION 13.02     Amendments, Waivers and Consent.  This Agreement may be amended, and the
observance of any term hereof may be waived (either retroactively or
prospectively) with (and only with) the written consent of Holdings, the
Company and the Required Holders; provided, however, that no such amendment or waiver may, without the
prior written consent of the Holder of each Note then outstanding and affected
thereby, (a) subject any Holder to any additional obligation, (b) reduce
the principal of (or premium, if any) or rate of interest on, any Note, (c) postpone
the date fixed for any payment of principal of (or premium, if any) or interest
on any Note (other than a deferral of interest pursuant to Section 3.01(b) or
a waiver of any increase in the interest rate on the Notes upon the occurrence
of an Event of Default pursuant to Article X), (d) change the ranking
or priority of the Notes or the percentage of the aggregate principal amount of
the Notes the Holders of which shall be required to consent or take any other
action under this Section 13.02 or any other provision of this Agreement, (e) modify
or change any provision of this Agreement or the related definitions affecting
the subordination or ranking of the Notes or any Guarantee in a manner which
adversely affects the Holders or (f) release any Guarantor from any of its
obligations under its Guarantee or this Agreement otherwise than in accordance
with the terms of this Agreement.  No
amendment or waiver of this Agreement will extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or thereby impair any right consequent thereon.  As used herein, the term this “Agreement” and
references thereto shall mean this Agreement as it may from time to time be
amended, supplemented or modified.


 


SECTION 13.03     No Implied Waivers; Cumulative Remedies;
Writing Required.  No delay or failure
in exercising any right, power or remedy hereunder shall affect or operate as a
waiver thereof; nor shall any single or partial exercise thereof or any
abandonment or discontinuance of steps to enforce such a right, power or remedy
preclude any further exercise thereof or of any other right, power or
remedy.  The rights and remedies
hereunder are cumulative and not exclusive of any rights or remedies that the
Purchaser or any Holders would otherwise have. 
Any waiver, permit, consent or approval of any kind or character of any
breach or default under this Agreement or any such waiver of any provision or
condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.


 


SECTION 13.04     Transfer Taxes.  All transfer taxes, fees and duties under
applicable law incurred in connection with the sale and transfer of the
Securities under this Agreement will be borne and paid by the Company and it
shall promptly reimburse the Purchaser for any such tax, fee or duty which any
of them is required to pay under applicable law.


 


SECTION 13.05     Reimbursement of Expenses.  The Company upon demand shall pay or
reimburse the Purchaser for all fees and expenses incurred or payable by the
Purchaser (including, without limitation, reasonable fees and expenses of
special counsel for the Purchaser), from time to time (a) arising in
connection with the negotiation, preparation and execution of this Agreement or
the Notes and all other instruments and documents to be delivered hereunder or
thereunder or arising in connection with the Contemplated Transactions 


 


29

















 


hereunder or thereunder, (b) relating
to any amendments, waivers or consents pursuant to the provisions hereof or thereof,
and (c) arising in connection with the enforcement of this Agreement or
collection of the Notes.


 


SECTION 13.06     Holidays.  Whenever any payment or action to be made or
taken hereunder or under the Notes shall be stated to be due on a day which is not
a Business Day, such payment or action shall be made or taken on the next
following Business Day, and such extension of time shall be included in
computing interest or fees, if any, in connection with such payment or action.


 


SECTION 13.07     Notices.  All notices and other communications given to
or made upon any party hereto in connection with this Agreement shall, except
as otherwise expressly herein provided, be in writing (including telecopy, but
in such case, a confirming copy will be sent by another permitted means) and
mailed via certified mail, telecopied or delivered by guaranteed overnight
parcel express service or courier to the respective parties, as follows:


 


If
to Holdings or the Company, to it at:


 


AGA
Medical Corporation


5050
Nathan Lane North


Plymouth,
MN 55442


Facsimile:
(763) 513-9226


Attention:
President and Chief Executive Officer


 


with
a copy to:


 


Simpson
Thacher & Bartlett LLP


425
Lexington Avenue


New
York, NY  10017


Facsimile:
(212) 455-2502


Attention:
Kenneth B. Wallach, Esq.


 


If
WCAS CP IV, to it at:


 


c/o
Welsh, Carson, Anderson & Stowe


320
Park Avenue, Suite 2500


New
York, NY 10022


Facsimile:
(212) 893-9583


Attention:
Paul B. Queally and Sean M. Traynor


 


with
a copy to:


 


Ropes &
Gray LLP


1211
Avenue of the Americas


New
York, NY 10036


Facsimile:
(646) 728-1513


Attention:
Othon A. Prounis, Esq.


 


30

















 


or in accordance with any subsequent written
direction from the recipient party to the sending party.  All such notices and other communications
shall, except as otherwise expressly herein provided, be effective upon
delivery if delivered by courier or overnight parcel express service; in the
case of certified mail, three Business Days after the date sent; or in the case
of telecopy, when received.


 


SECTION 13.08     Survival.  All representations, warranties, covenants
and agreements of Holdings and the Company contained herein or made in writing
in connection herewith shall survive the execution and delivery of this
Agreement and the purchase of the Securities and shall continue in full force
and effect so long as any Securities are outstanding and until payment in full
of all of the Company’s obligations hereunder or thereunder.  All obligations relating to indemnification
hereunder shall survive any termination of this Agreement and shall continue
for the length of any applicable statute of limitations.


 


SECTION 13.09     Governing Law.  This Agreement will be governed by and
construed and interpreted in accordance with the laws of the State of New York.


 


SECTION 13.10     Jurisdiction, Venue; Service of Process.


 


(a)           Jurisdiction. 
Each party to this Agreement, by its execution hereof, (i) hereby
irrevocably submits to the exclusive jurisdiction of the state courts of the
State of New York or the United States District Court located in New York
County in the State of New York for the purpose of any Action between the
parties arising in whole or in part under or in connection with this Agreement,
the Notes or the Contemplated Transactions, (ii) hereby waives to the
extent not prohibited by applicable law, and agrees not to assert, by way of
motion, as a defense or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that any such Action
brought in one of the above-named courts should be dismissed on grounds of
forum non conveniens, should be transferred or
removed to any court other than one of the above-named courts, or should be
stayed by reason of the pendency of some other proceeding in any other court
other than one of the above-named courts, or that this Agreement or the subject
matter hereof may not be enforced in or by such court and (iii) hereby
agrees not to commence any such Action other than before one of the above-named
courts.  Notwithstanding the previous
sentence a party may commence any Action in a court other than the above-named
courts solely for the purpose of enforcing an order or judgment issued by one of
the above-named courts.


 


(b)           Venue.  Each
party agrees that for any Action between the parties arising in whole or in
part under or in connection with this Agreement, such party bring Actions only
in courts located in New York County in the State of New York.  Each party further waives any claim and will
not assert that venue should properly lie in any other location within the
selected jurisdiction.


 


(c)           Service of Process. 
Each party hereby (i) consents to service of process in any Action
between the parties arising in whole or in part under or in connection with
this Agreement in any manner permitted by New York law, (ii) agrees that
service of process made 


 


31

















 


in accordance with clause (i) or
made by registered or certified mail, return receipt requested, at its address
specified pursuant to Section 13.07, will constitute good and valid
service of process in any such Action and (iii) waives and agrees not to
assert (by way of motion, as a defense, or otherwise) in any such Action any
claim that service of process made in accordance with clause (i) or (ii) does
not constitute good and valid service of process.


 


SECTION 13.11     Jury Trial Waiver.  TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY
WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING IN WHOLE OR IN PART UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE CONTEMPLATED TRANSACTIONS, WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE.  THE PARTIES AGREE THAT ANY OF
THEM MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE
OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES
IRREVOCABLY TO WAIVE ITS RIGHT TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER
BETWEEN THEM RELATING TO THIS AGREEMENT, THE ANCILLARY AGREEMENTS OR ANY OF THE
CONTEMPLATED TRANSACTIONS WILL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.


 


SECTION 13.12     Severability.  Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law in any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating any other provision of this Agreement.


 


SECTION 13.13     Headings.  Article, section and subsection headings in
this Agreement are included for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.


 


SECTION 13.14     Indemnity.  Each of Holdings and the Company hereby agrees
to indemnify, defend and hold harmless the Purchaser and their officers,
directors, employees, agents and representatives, and their respective
successors and assigns in connection with any losses, claims, damages,
liabilities and expenses, including reasonable attorneys’ fees, to which any
Purchaser may become subject (other than as a result of the gross negligence or
willful misconduct of any such Person), insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or by reason of any
investigation, litigation or other proceedings related to or resulting from any
act of, or omission by, Holdings or its Subsidiaries or any officer, director,
employee, agent or representative of Holdings or its Subsidiaries with respect
to the Contemplated Transactions, the Notes, the Organizational Documents or
any agreements entered into in connection with any such agreements, instruments
or documents and to reimburse the Purchaser and each such Person, upon demand,
for any legal or other expenses incurred in connection with investigating or
defending any such loss, claim, damage, liability, expense or action.  To the extent that the foregoing undertakings
may be unenforceable for any reason, each of Holdings and the Company agrees to
make the maximum contribution to the 


 


32

















 


payment and satisfaction of
indemnified liabilities set forth in this Section 13.14 which is
permissible under applicable law.


 


[Remainder
of Page Intentionally Left Blank]


 


33














 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.


 


	
  THE COMPANY:

  	
  AGA MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Barr

  
	
   

  	
   

  	
  Name: John Barr

  
	
   

  	
   

  	
  Title: President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  HOLDINGS:

  	
  AGA MEDICAL HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John Barr

  
	
   

  	
   

  	
  Name: John Barr

  
	
   

  	
   

  	
  Title: President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE PURCHASER:

  	
  WCAS CAPITAL PARTNERS IV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  WCAS CP IV Associates LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Sean M. Traynor

  
	
   

  	
   

  	
  Name: Sean M. Traynor

  
	
   

  	
   

  	
  Title: Managing Member

  



 

















 


	
  GUARANTOR:

  	
  AMPLATZER MEDICAL SALES CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Ronald E. Lund

  
	
   

  	
   

  	
  Name: Ronald E. Lund

  
	
   

  	
   

  	
  Title: Secretary

  



 

















 


EXHIBIT A


 


FORM OF


SENIOR SUBORDINATED PIK
NOTE


 


THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY IS
SUBORDINATED IN THE MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN
SECURITIES PURCHASE AGREEMENT, DATED AS OF [·], 200[·], AS AMENDED, BY AND AMONG THE ISSUER,
HOLDINGS AND THE HOLDER AND THE HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE
HEREOF, IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF SUCH AGREEMENT.


 


THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”)
AS DEFINED BY SECTION 1273(a)(1) OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.  THE FOLLOWING
INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION REPORTING REQUIREMENTS SET
FORTH IN TREASURY REGULATION 1.1275-3.


 


THE ISSUE PRICE OF THIS NOTE IS $13,120,457.  THE AMOUNT OF OID ON THIS NOTE IS
$1,879,543.  THE ISSUE DATE OF THIS NOTE
IS [·], 200[·].  THE PER ANNUM YIELD TO MATURITY OF THIS NOTE
IS [·]% COMPOUNDED SEMI-ANNUALLY.


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM
UNDER SAID LAWS.


 


AGA
MEDICAL CORPORATION


 


Senior Subordinated PIK
Note


due July 28, 2012


 


	
  $15,000,000

  	
   

  	
  [·], 200[·]

  



 


AGA Medical Corporation, a Minnesota corporation (the “Issuer”),
for value received, hereby promises to pay to WCAS Capital Partners IV, L.P., a
Delaware limited partnership or registered assigns (collectively, the “Holder”),
the principal sum of FIFTEEN MILLION DOLLARS ($15,000,000), plus PIK interest
(if any), with interest thereon on the terms and conditions set forth in the
hereinafter defined Securities Purchase Agreement.


 


Notwithstanding any provision to the contrary in this
Note or the Securities Purchase Agreement, the Company shall not be required to
pay, and the Holder shall not be permitted to contract for, take, reserve, charge
or receive, any compensation, which constitutes interest under applicable law
in excess of the maximum amount of interest permitted by law.


 


This Note is issued pursuant to that certain
Securities Purchase Agreement, dated as of [·], 200[·] (as amended, restated or otherwise
modified from time to time, the “Securities


 


A-1

















 


Purchase Agreement”), by and among the Issuer, Holdings and the Holder
and Holder is entitled to the benefits thereof. 
All capitalized terms used but not defined herein shall have the
meanings respectively ascribed to them in the Securities Purchase
Agreement.  Each Holder of this Note will
be deemed, by its acceptance hereof, to have agreed to the provisions and to
have made the representations and warranties set forth in Article IV of
the Securities Purchase Agreement.


 


This Note is transferable only by surrender hereof at
the principal office of the Company, duly endorsed, accompanied by a written
instrument of transfer duly executed by the registered Holder of this Note as
shown in the register of the Company or as otherwise permitted under the
Securities Purchase Agreement.


 


This Note is also subject to mandatory and optional
prepayment, in whole or from time to time in part, at the times and on the
terms specified in the Securities Purchase Agreement, but not otherwise.


 


If an Event of Default (as such term is defined in the
Securities Purchase Agreement) occurs and is continuing, the unpaid principal
of this Note may be declared or otherwise become due and payable in the manner,
at the price (including any applicable premium) and with the effect provided in
the Securities Purchase Agreement.


 


This Note and the rights and obligations of the
parties hereto shall be deemed to be contracts under the laws of the State of
New York and for all purposes shall be governed by and construed and enforced
in accordance with the laws of said State.


 


[Signature
page follows]


 


A-2

















 


IN WITNESS WHEREOF, this Note is executed and
delivered as of the date first set forth above.


 


 


	
   

  	
  AGA MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


[AGA Medical Corporation
10% Senior Subordinated Note due July 28, 2012]


 

















 


EXHIBIT B


 


FORM OF AMENDED AND RESTATED 

SENIOR SUBORDINATED PIK NOTE


 


This Amended and Restated Senior Subordinated PIK Note due July 28,
2012, amends and restates the 10% Senior Subordinated Note due July 28,
2012, dated July 28, 2005, issued by AGA Medical Corporation, a Minnesota
corporation in favor of WCAS Capital Partners IV, L.P., a Delaware limited
partnership, to read in its entirety as follows:


 


THIS NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY IS SUBORDINATED IN THE
MANNER AND TO THE EXTENT SET FORTH IN THAT CERTAIN SECURITIES PURCHASE
AGREEMENT, DATED AS OF JULY 28, 2005, AS AMENDED, BY AND AMONG THE ISSUER AND
THE HOLDER AND THE HOLDER OF THIS INSTRUMENT, BY ITS ACCEPTANCE HEREOF,
IRREVOCABLY AGREES TO BE BOUND BY THE PROVISIONS OF SUCH AGREEMENT.


 


THIS NOTE IS ISSUED WITH ORIGINAL ISSUE DISCOUNT (“OID”) AS DEFINED BY SECTION 1273(a)(1) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. 
THE FOLLOWING INFORMATION IS PROVIDED PURSUANT TO THE INFORMATION
REPORTING REQUIREMENTS SET FORTH IN TREASURY REGULATION 1.1275-3.


 


THE ISSUE PRICE OF THIS NOTE IS $43,475,752.51.  THE AMOUNT OF OID ON THIS NOTE IS
$6,524,247.49.   THE ISSUE DATE OF THIS
NOTE IS JULY 28, 2005.  THE PER ANNUM
YIELD TO MATURITY OF THIS NOTE IS 13.30706% COMPOUNDED SEMI-ANNUALLY.


 


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID
LAWS.


 


AGA MEDICAL CORPORATION


 


Amended and Restated


Senior Subordinated PIK Note


due July 28, 2012


 


	
  $50,000,000

  	
   

  	
  July 28, 2005

  



 


AGA Medical Corporation, a Minnesota
corporation (the “Issuer”), for value received, hereby promises to pay
to WCAS Capital Partners IV, L.P., a Delaware limited partnership or registered
assigns (collectively, the “Holder”), the principal sum of FIFTY MILLION
DOLLARS ($50,000,000), plus PIK interest (if any), with interest thereon on the
terms and conditions set forth in the hereinafter defined Securities Purchase
Agreement.


 


Notwithstanding any provision to the contrary
in this Note or the Securities Purchase Agreement, the Company shall not be
required to pay, and the Holder shall not be permitted to 


 


1

















 


contract for, take, reserve, charge or receive,
any compensation, which constitutes interest under applicable law in excess of
the maximum amount of interest permitted by law.


 


This Note is issued pursuant to that certain
Securities Purchase Agreement, dated as of July 28, 2005 (as amended,
restated or otherwise modified from time to time, the “Securities Purchase
Agreement”), by and among the Issuer and the Holder and Holder is entitled
to the benefits thereof.  All capitalized
terms used but not defined herein shall have the meanings respectively ascribed
to them in the Securities Purchase Agreement. 
Each Holder of this Note will be deemed, by its acceptance hereof, to
have agreed to the provisions and to have made the representations and
warranties set forth in Article 4 of the Securities Purchase Agreement.


 


This Note is transferable only by surrender
hereof at the principal office of the Company, duly endorsed, accompanied by a
written instrument of transfer duly executed by the registered Holder of this
Note as shown in the register of the Company or as otherwise permitted under
the Securities Purchase Agreement.


 


This Note is also subject to mandatory and
optional prepayment, in whole or from time to time in part, at the times and on
the terms specified in the Securities Purchase Agreement, but not otherwise.


 


If an Event of Default (as such term is
defined in the Securities Purchase Agreement) occurs and is continuing, the
unpaid principal of this Note may be declared or otherwise become due and
payable in the manner, at the price (including any applicable premium) and with
the effect provided in the Securities Purchase Agreement.


 


This Note and the rights and obligations of
the parties hereto shall be deemed to be contracts under the laws of the State
of New York and for all purposes shall be governed by and construed and
enforced in accordance with the laws of said State.


 


[Signature page follows]


 


2

















 


IN WITNESS WHEREOF, this Note is executed and
delivered as of the date first set forth above.


 


 


	
   

  	
  AGA MEDICAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 

















 


EXHIBIT C


 


FORM OF JOINDER


 


JOINDER NO.
         dated as of [·], to the Securities Purchase Agreement (the “Securities
Purchase Agreement”), dated as of [·], 200[·], among AGA MEDICAL CORPORATION, a Minnesota
corporation (the “Company”), AGA MEDICAL HOLDINGS, INC., a Delaware
corporation (“Holdings”) and WCAS Capital Partners IV, L.P., a Delaware
limited partnership (the “Purchaser”).


 


A.            Capitalized terms used in this Joinder
and not otherwise defined in this Joinder shall have the meanings assigned to
such terms in the Securities Purchase Agreement.


 


B.            Holdings, the Company and the Purchaser
have entered into the Securities Purchase Agreement to provide for the issuance
and sale by the Company to the Purchaser of an aggregate initial principal
amount of $15,000,000 of Senior Subordinated PIK Notes due July 28, 2012
(the “Notes”).  Section 7.09
of the Securities Purchase Agreement provides that additional Subsidiaries of
the Company become parties to the Securities Purchase Agreement by execution
and delivery of an instrument in the form of this Joinder.  The undersigned Subsidiary (the “New
Subsidiary”) is executing this Joinder in accordance with the requirements
of the Securities Purchase Agreement to become a party to the Securities
Purchase Agreement.


 


Accordingly, the Company and the New Subsidiary agree
as follows:


 


SECTION 1. 
In accordance with Section 7.09 of the Securities Purchase
Agreement, the New Subsidiary by its signature below becomes a Guarantor under
the Securities Purchase Agreement with the same force and effect as if
originally named therein as a Purchaser and the New Subsidiary hereby agrees to
all the terms and provisions of the Securities Purchase Agreement applicable to
it as a Guarantor thereunder.  Each
reference to a “Guarantor” in the Securities Purchase Agreement shall be deemed
to include the New Subsidiary.  The
Securities Purchase Agreement is hereby incorporated in this Agreement by
reference.


 


SECTION 2. 
The New Subsidiary represents and warrants to the Company that this
Joinder has been duly authorized, executed and delivered by it and constitutes
its legal, valid and binding obligation, enforceable against it in accordance
with its terms.


 


SECTION 3. 
This Joinder may be executed in counterparts, each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.  This Joinder shall
become effective when the Company shall have received a counterpart of this
Joinder that bears the signature of the New Subsidiary and the Company has
executed a counterpart hereof.  Delivery
of an executed signature page to this Joinder by facsimile transmission
shall be as effective as delivery of a manually signed counterpart of this Joinder.


 


SECTION 4. 
The New Subsidiary hereby represents and warrants that set forth under
its signature hereto is (i) the true and correct legal name of the New
Subsidiary, (ii) its jurisdiction of formation, (iii) its Federal
Taxpayer Identification Number or its organizational identification number and (iv) the
location of its chief executive office.


 


C-1

















 


SECTION 5. 
Except as expressly supplemented hereby, the Securities Purchase
Agreement shall remain in full force and effect.


 


SECTION 6. 
THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.


 


SECTION 7. 
Any provision of this Joinder held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof and in the Securities Purchase Agreement; the invalidity of a
particular provision in a particular jurisdiction shall not invalidate such
provision in any other jurisdiction.  The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.


 


SECTION 8. 
All communications and notices hereunder shall be in writing and given
as provided in Section 13.07 of the Securities Purchase Agreement.


 


[Remainder
of Page Intentionally Left Blank]


 


C-2

















 


IN WITNESS WHEREOF, the New Subsidiary and the Company
have duly executed this Joinder to the Securities Purchase Agreement as of the
day and year first above written.


 


 


	
   

  	
  [NAME OF NEW SUBSIDIARY],

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Legal Name:

  
	
   

  	
  Jurisdiction of Formation:

  
	
   

  	
  Location of Chief Executive Office:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  AGA MEDICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: