Document:

Exhibit 10.1

CREDIT
AGREEMENT

 

among

 

A.D.A.M.,
INC.,

as Borrower,

INTEGRATIVE
MEDICINE COMMUNICATIONS, INC.,

NIDUS INFORMATION SERVICES, INC.,

ONLINE BENEFITS, INC.,

BENERGY OUTSOURCING STRATEGIES, INC.

and

CAPTIVA
SOFTWARE, INC.,

as Guarantors

and

CAPITALSOURCE
FINANCE LLC,

as Agent

 

Dated as of 

August 14, 2006

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
  CREDITS

  	
  2

  
	
   

  	
  2.1

  	
  Revolving Facility

  	
  2

  
	
   

  	
  2.2

  	
  Term Loans

  	
  2

  
	
   

  	
  2.3

  	
  Letters of Credit

  	
  3

  
	
   

  	
  2.4

  	
  Evidence of Loans

  	
  3

  
	
   

  	
  2.5

  	
  Interest

  	
  4

  
	
   

  	
  2.6

  	
  Procedures for Advances under the Revolving Facility

  	
  5

  
	
   

  	
  2.7

  	
  LIBOR Loans

  	
  5

  
	
   

  	
  2.8

  	
  Voluntary Prepayments

  	
  8

  
	
   

  	
  2.9

  	
  Mandatory Payments and Prepayments

  	
  9

  
	
   

  	
  2.10

  	
  Promise to Pay; Manner of Payment.

  	
  12

  
	
   

  	
  2.11

  	
  Payments by Agent

  	
  12

  
	
   

  	
  2.12

  	
  Computation of Interest and Fees; Lawful Limits

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
  FEES

  	
  13

  
	
   

  	
  3.1

  	
  Commitment Fee

  	
  13

  
	
   

  	
  3.2

  	
  Unused Line Fee

  	
  13

  
	
   

  	
  3.3

  	
  Administrative Fee

  	
  13

  
	
   

  	
  3.4

  	
  Prepayment Premium

  	
  13

  
	
   

  	
  3.5

  	
  Letter of Credit Fees

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
  CONDITIONS PRECEDENT

  	
  14

  
	
   

  	
  4.1

  	
  Conditions to Initial Advance, Funding of the Term
  Loans and the Closing

  	
  15

  
	
   

  	
  4.2

  	
  Conditions to each Advance and Funding of the Term
  Loans

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
  REPRESENTATIONS AND WARRANTIES

  	
  16

  
	
   

  	
  5.1

  	
  Organization and Authority

  	
  16

  
	
   

  	
  5.2

  	
  Loan Documents and Related Documents

  	
  16

  
	
   

  	
  5.3

  	
  Subsidiaries, Capitalization and Ownership Interests

  	
  17

  
	
   

  	
  5.4

  	
  Properties and Locations

  	
  17

  
	
   

  	
  5.5

  	
  Other Agreements

  	
  18

  
	
   

  	
  5.6

  	
  Litigation

  	
  18

  
	
   

  	
  5.7

  	
  Environmental Matters

  	
  19

  
	
   

  	
  5.8

  	
  Tax Returns; Governmental Reports

  	
  19

  
	
   

  	
  5.9

  	
  Financial Statements and Reports

  	
  19

  
	
   

  	
  5.10

  	
  Compliance with Law; ERISA; Business

  	
  19

  
	
   

  	
  5.11

  	
  Intellectual Property

  	
  20

  
	
   

  	
  5.12

  	
  Permits; Labor

  	
  21

  
	
   

  	
  5.13

  	
  No Default; Solvency

  	
  21

  
	
   

  	
  5.14

  	
  Insurance

  	
  21

  
	
   

  	
  5.15

  	
  Margin Stock; Regulated Entities; Tax Regulations;
  OFAC; Patriot Act

  	
  21

  
	
   

  	
  5.16

  	
  Broker’s or Finder’s Commissions

  	
  22

  

 

 i
 

 

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  5.17

  	
  Disclosure

  	
  22

  
	
   

  	
  5.18

  	
  Incorporation of Certain Representations and
  Warranties

  	
  22

  
	
   

  	
  5.19

  	
  Survival

  	
  22

  
	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
  AFFIRMATIVE COVENANTS

  	
  23

  
	
   

  	
  6.1

  	
  Reporting, Collateral and Other Information

  	
  23

  
	
   

  	
  6.2

  	
  Conduct of Business; Maintenance of Existence and
  Assets

  	
  23

  
	
   

  	
  6.3

  	
  Compliance with Legal and Other Obligations

  	
  24

  
	
   

  	
  6.4

  	
  Insurance

  	
  24

  
	
   

  	
  6.5

  	
  Inspection

  	
  25

  
	
   

  	
  6.6

  	
  Use of Proceeds

  	
  26

  
	
   

  	
  6.7

  	
  Further Assurances; Post Closing Deliveries

  	
  26

  
	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
  NEGATIVE COVENANTS

  	
  27

  
	
   

  	
  7.1

  	
  Financial Covenants

  	
  28

  
	
   

  	
  7.2

  	
  Indebtedness

  	
  28

  
	
   

  	
  7.3

  	
  Liens

  	
  29

  
	
   

  	
  7.4

  	
  Consolidations, Mergers and Investments

  	
  30

  
	
   

  	
  7.5

  	
  Restricted Payments

  	
  31

  
	
   

  	
  7.6

  	
  Transactions with Affiliates

  	
  32

  
	
   

  	
  7.7

  	
  Transfer of Assets

  	
  32

  
	
   

  	
  7.8

  	
  Contingent Obligations

  	
  33

  
	
   

  	
  7.9

  	
  Organizational Documents; Accounting Changes; Use of
  Proceeds; Insurance; Business

  	
  33

  
	
   

  	
  7.10

  	
  Related Documents and Subordinated Debt

  	
  34

  
	
   

  	
  7.11

  	
  Negative Pledges

  	
  34

  
	
   

  	
  7.12

  	
  Certain Specific Agreements

  	
  35

  
	
   

  	
  7.13

  	
  Shareholder Blocking Rights

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
  EVENTS OF DEFAULT

  	
  35

  
	
   

  	
  8.1

  	
  Events of Default

  	
  35

  
	
   

  	
  8.2

  	
  Effect of Event of Default

  	
  38

  
	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
  RIGHTS AND REMEDIES AFTER DEFAULT

  	
  38

  
	
   

  	
  9.1

  	
  Rights and Remedies

  	
  38

  
	
   

  	
  9.2

  	
  Application of Proceeds

  	
  40

  
	
   

  	
  9.3

  	
  Rights to Appoint Receiver

  	
  41

  
	
   

  	
  9.4

  	
  Attorney in Fact

  	
  41

  
	
   

  	
  9.5

  	
  Rights and Remedies not Exclusive

  	
  41

  
	
   

  	
  9.6

  	
  Changes in Law or Policy

  	
  42

  
	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
  WAIVERS AND JUDICIAL PROCEEDINGS

  	
  42

  
	
   

  	
  10.1

  	
  Certain Waivers

  	
  42

  
	
   

  	
  10.2

  	
  Delay; No Waiver of Defaults

  	
  42

  
	
   

  	
  10.3

  	
  Jury Waiver

  	
  43

  
	
   

  	
  10.4

  	
  Amendment and Waivers

  	
  43

  

 

 ii
 

 

	
  

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  

  	
  10.5

  	
  Survival

  	
  44

  
	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
  AGENT PROVISIONS; SETTLEMENT

  	
  44

  
	
   

  	
  11.1

  	
  Agent

  	
  44

  
	
   

  	
  11.2

  	
  Intentionally Omitted

  	
  49

  
	
   

  	
  11.3

  	
  Set-off and Sharing of Payments

  	
  49

  
	
   

  	
  11.4

  	
  Disbursement of Funds under Revolving Facility

  	
  50

  
	
   

  	
  11.5

  	
  Settlements; Payments; and Information

  	
  50

  
	
   

  	
  11.6

  	
  Dissemination of Information

  	
  52

  
	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
  MISCELLANEOUS

  	
  52

  
	
   

  	
  12.1

  	
  Governing Law; Jurisdiction; Service of Process;
  Venue

  	
  52

  
	
   

  	
  12.2

  	
  Successors and Assigns; Assignments and
  Participations

  	
  53

  
	
   

  	
  12.3

  	
  Reinstatement; Application of Payments

  	
  55

  
	
   

  	
  12.4

  	
  Indemnity

  	
  56

  
	
   

  	
  12.5

  	
  Notice

  	
  57

  
	
   

  	
  12.6

  	
  Severability; Captions; Counterparts

  	
  57

  
	
   

  	
  12.7

  	
  Expenses

  	
  57

  
	
   

  	
  12.8

  	
  Entire Agreement

  	
  58

  
	
   

  	
  12.9

  	
  Approvals and Duties

  	
  58

  
	
   

  	
  12.10

  	
  Confidentiality and Publicity

  	
  59

  
	
   

  	
  12.11

  	
  No Consequential Damages

  	
  60

  
	
   

  	
   

  	
   

  	
   

  
	
  XIII.

  	
  TAXES

  	
  60

  
	
   

  	
  13.1

  	
  Taxes

  	
  60

  
	
   

  	
  13.2

  	
  Certificates of Lenders.

  	
  62

  
	
   

  	
  13.3

  	
  Survival.

  	
  63

  
	
   

  	
  13.4

  	
  Replacement of Lender in Respect of Increased Costs.

  	
  63

  
	
   

  	
   

  	
   

  	
   

  
	
  XIV.

  	
  GUARANTY

  	
  63

  
	
   

  	
  14.1

  	
  Guaranty

  	
  63

  
	
   

  	
  14.2

  	
  Guaranty Absolute

  	
  64

  
	
   

  	
  14.3

  	
  Waivers

  	
  65

  
	
   

  	
  14.4

  	
  Continuing Guaranty; Assignments

  	
  66

  
	
   

  	
  14.5

  	
  Maximum Liability

  	
  67

  
	
   

  	
  14.6

  	
  Subordination

  	
  68

  
	
   

  	
  14.7

  	
  Subrogation

  	
  68

  

 

 iii

 

CREDIT AGREEMENT

This CREDIT
AGREEMENT (this “Agreement”),
dated as of August 14, 2006, is entered into by and among A.D.A.M., INC., a
Georgia corporation (“Borrower”);
INTEGRATIVE MEDICINE COMMUNICATIONS, INC., a Massachusetts corporation (“Integrative Medicine”), NIDUS INFORMATION SERVICES, INC., a
Delaware corporation (“Nidus”),
ONLINE BENEFITS, INC., a Delaware corporation (“Online
Benefits), BENERGY OUTSOURCING STRATEGIES, INC., a Delaware
corporation (“Benergy”), and CAPTIVA SOFTWARE,
INC., a Florida corporation (“Captiva”), as
Guarantors and additional Credit Parties; the financial institutions from time
to time parties hereto, as Lenders hereunder; and CAPITALSOURCE FINANCE LLC, a
Delaware limited liability company (in its individual capacity, “CapitalSource”), as administrative agent for the Lenders
(CapitalSource, in such capacity, “Agent”).

WHEREAS, the Credit
Parties have requested that Lenders make available to Borrower (i) a revolving
credit facility (including a letter of
credit sub-facility) (the “Revolving Facility”)
in a maximum amount not to exceed the Facility Cap in effect from time to time
(the amount of which, initially, shall be Two Million Dollars ($2,000,000)),
(ii) a Term Loan A in an aggregate original principal amount of Twenty Million
Dollars ($20,000,000), and (iii) a Convertible Term Loan in an aggregate
principal amount of Five Million Dollars ($5,000,000), the proceeds of which,
in each case, shall be used by Borrower for purposes permitted under, and
otherwise in accordance with and subject to the terms of, this Agreement.

WHEREAS, Lenders
are willing to make the Revolving Facility and the Term Loans available to
Borrower, upon the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in
consideration of the foregoing, and for other good and valuable consideration,
the receipt, sufficiency and adequacy of which hereby are acknowledged, the
parties hereto hereby agree as follows:

1.             DEFINITIONS

For purposes of the Loan Documents and all schedules,
exhibits, annexes and attachments thereto, in addition to the definitions
elsewhere in this Agreement and the other Loan Documents, the terms listed in Appendix
A hereto shall have the respective meanings assigned to such terms in Appendix
A hereto, which is incorporated herein and made a part hereof.  All capitalized terms used which are not
specifically defined herein shall have the respective meanings assigned to them
in Revised Article 9 of the UCC to the extent the same are used or defined
therein.  Unless otherwise specified in
any Loan Document, this Agreement, any other Loan Document and any agreement or
contract referred to herein or in Appendix A hereto shall mean such
agreement or contract, as modified, amended, supplemented or restated and in
effect from time to time, subject to any applicable restrictions set forth in
such Loan Document.  Unless otherwise
specified, as used in the Loan Documents or in any certificate, report,
instrument or other document made or delivered pursuant to any of the Loan
Documents, all accounting terms not defined in Appendix A hereto or
elsewhere in this Agreement or any other Loan Document shall have the meanings
assigned to such terms in and shall be interpreted in accordance with
GAAP.  If any change in GAAP results in a
change in the calculation of the

 

financial covenants or
interpretation of related provisions of this Agreement or any other Loan
Document, then Borrower, Agent and Lenders agree to amend such provisions of
this Agreement so as to equitably reflect such changes in GAAP with the desired
result that the criteria for evaluating the Credit Parties’ financial condition
shall be the same after such change in GAAP as if such change had not been
made, provided that, notwithstanding any other provision of this Agreement, the
Requisite Lenders’ agreement to any amendment of such provisions shall be
sufficient to bind all Lenders; and, provided further, until such time as the
financial covenants and the related provisions of this Agreement have been
amended in accordance with the terms of this paragraph, the calculations of
financial covenants and the interpretation of any related provisions shall be
calculated and interpreted in accordance with GAAP as in effect immediately
prior to such change in GAAP.

II.            CREDITS

2.1          Revolving
Facility

Subject to the terms and conditions set forth in this
Agreement, each Revolving Lender agrees to make available to Borrower its Pro
Rata Share of Advances under the Revolving Facility from time to time during
the Term; provided, that (i) the Pro Rata Share of Advances of any Revolving
Lender shall not at any time exceed such Revolving Lender’s Commitment under
the Revolving Facility and (ii) the aggregate amount of all Advances at any
time outstanding under the Revolving Facility shall not exceed the Facility Cap
in effect at such time less the Letter of Credit Usage then in effect.  The obligations of the Revolving Lenders
under the Revolving Facility shall be several, and not joint or joint and
several.  The Revolving Facility is a
revolving credit facility that may be drawn, repaid and redrawn from time to
time as permitted under this Agreement. 
Borrower may not at any time increase, reduce or otherwise adjust the
Facility Cap.  Agent shall have the right
to establish and readjust from time to time, in its Permitted Discretion,
reserves under the Revolving Facility, which reserves shall have the effect of
reducing the amounts otherwise available to be disbursed to Borrower under the
Revolving Facility.

2.2          Term
Loans

(a)           Subject
to the terms and conditions set forth in this Agreement, each Term A Lender
agrees to loan to Borrower on the Closing Date such Term A Lender’s Pro Rata
Share of Term Loan A, which, in the aggregate for all Term A Lenders, shall be
in the original principal amount of Twenty Million Dollars ($20,000,000).  Term Loan A is not a revolving credit
facility and may not be drawn, repaid and redrawn and any repayments or
prepayments of principal on Term Loan A shall permanently reduce Term Loan
A.  The obligations of the Term A Lenders
hereunder are several and not joint or joint and several.  Borrower irrevocably authorizes Agent and the
Term A Lenders to disburse the proceeds of Term Loan A on the Closing Date in
accordance with the applicable Borrowing Certificate.

(b)           Subject
to the terms and conditions set forth in this Agreement and the Conversion and
Registration Rights Agreement, each Convertible Term Lender agrees to loan to
Borrower on the Closing Date such Convertible Term Lender’s Pro Rata Share of
the Convertible Term Loan, which, in the aggregate for all Convertible Term
Lenders, shall be in the

 2
 

 

original principal amount
of Five Million Dollars ($5,000,000). 
The Convertible Term Loan is not a revolving credit facility and may not
be drawn, repaid and redrawn and any repayments or prepayments of principal on
the Convertible Term Loan shall permanently reduce the Convertible Term
Loan.  All or any portion of the
Principal Balance of the Convertible Term Loan shall be convertible into Common
Stock of Borrower at the option of the Convertible Term Lenders at any time on
or prior to the last day of the Term pursuant and subject to the terms and
conditions of the Conversion and Registration Rights Agreement.  The obligations of the Convertible Term
Lenders hereunder are several and not joint or joint and several.  Borrower irrevocably authorizes Agent and the
Convertible Term Lenders to disburse the proceeds of the Convertible Term Loan
on the Closing Date in accordance with the applicable Borrowing Certificate.

2.3          Letters
of Credit

Subject to the terms and conditions set forth in this
Agreement and on Appendix B hereto, Borrower shall have the right to request,
and the Revolving Lenders agree to incur, or purchase participations in,
Letters of Credit in respect of Borrower and the other Credit Parties.

2.4          Evidence
of Loans

(a)           Each
Lender shall maintain, in accordance with its usual practice, electronic or
written records evidencing the indebtedness and obligations to such Lender
resulting from each Loan made by such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.

(b)           Agent
shall maintain electronic or written records in which it will record (i) the
amount of each Loan made hereunder, each Prime Rate Loan and each LIBOR Loan
and any applicable Interest Periods, (ii) the amount of any principal and/or
interest due and payable and/or to become due and payable from Borrower to each
Lender hereunder and (iii) all amounts received by Agent hereunder from
Borrower and each Lender’s share thereof.

(c)           The
entries in the electronic or written records maintained pursuant to Section
2.4(b) (the “Register”) shall be prima facie
evidence of the existence and amounts of the obligations and indebtedness
therein recorded; provided, however, that the failure of Agent to maintain such
records or any error therein shall not in any manner affect the obligations of
Borrower to repay the Loans or Obligations in accordance with their terms.  The Register shall be subject to the terms of
Section 12.2(c).

(d)           Agent will
account to Borrower monthly with a statement of Advances under the Revolving
Facility and any charges and payments made pursuant to this Agreement, and in
the absence of demonstrable error, such accounting rendered by Agent shall be
deemed final, binding and conclusive unless Agent is notified by Borrower in
writing to the contrary within fifteen (15) calendar days of Receipt of such
accounting, which notice shall be deemed an objection only to items
specifically objected to therein.

 3
 

 

(e)           Borrower
agrees that:

(i)            upon
written notice by Agent to Borrower that a promissory note or other evidence of
indebtedness is requested by Agent (for itself or on behalf of any Lender) to
evidence the Loans and other Obligations owing or payable to, or to be made by,
such Lender, Borrower promptly shall (and in any event within three (3)
Business Days of any such request) execute and deliver to Agent an appropriate
promissory note or notes in form and substance reasonably satisfactory to Agent
and Borrower, payable to the order of such Lender in a principal amount equal
to the amount of the Loans owing or payable to such Lender;

(ii)           all
references to “Notes” in the Loan Documents shall mean Notes, if any, to the
extent issued (and not returned to Borrower for cancellation) hereunder, as the
same may be amended, supplemented, modified, divided and/or restated and in
effect from time to time;

(iii)          upon
Agent’s written request (for itself or on behalf of any Lender), and in any
event within three (3) Business Days of any such request, Borrower shall
execute and deliver to Agent new Notes and/or split or divide the Notes, or any
of them, in exchange for the then existing subject Notes, in such smaller
amounts or denominations as Agent or such Lender shall specify; provided, that
the aggregate principal amount of such new, split or divided Notes shall not
exceed the aggregate principal amount of the Notes outstanding at the time such
request is made; and provided, further, that such Notes that are replaced shall
then be deemed no longer outstanding hereunder and shall be replaced by such
new Notes and returned to Borrower within a reasonable period of time after
Agent’s receipt of the replacement Notes; and

(iv)          upon
receipt of evidence reasonably satisfactory to Borrower of the mutilation,
destruction, loss or theft of any Notes and the ownership thereof, Borrower
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 Borrower after Agent’s receipt of the replacement Notes; and if
such replaced Notes have been destroyed, lost or stolen, such holder shall
furnish Borrower with an indemnity in writing reasonably acceptable to Borrower
to save it and the other Credit Parties harmless in respect of such replaced
Notes.

2.5          Interest

(a)           Subject to
Section 2.5(c), (i) each Prime
Rate Loan shall bear interest at a rate per annum equal to the Prime Rate in
effect from time to time plus the Applicable Margin in effect from time
to time, and (ii) each LIBOR Loan shall bear interest at a rate per annum equal
to the LIBOR Rate applicable thereto plus the Applicable Margin in
effect from time to time.

(b)           Accrued
interest on each Prime Rate Loan shall be due and payable in cash in arrears on
each Interest Payment Date and on the date of any prepayment of Loans pursuant
to Sections 2.8 and 2.9.  Accrued
interest on each LIBOR Loan shall be due and

 4
 

 

payable in cash in
arrears on the last day of the Interest Period applicable to such LIBOR Loan,
and on the date of any prepayment of Loans pursuant to Sections 2.8 and 2.9.

(c)           Upon the
occurrence and during the continuance of any Event of Default, the Obligations
shall bear interest at the Default Rate. 
In all such events, and notwithstanding the date on which application of
the Default Rate is communicated to Borrower, the Obligations shall bear
interest at the Default Rate from the date such Event of Default occurs until
any and all Events of Default are waived in writing in accordance with the
terms of this Agreement.  Interest which
accrues on the Obligations at the Default Rate shall be payable in cash upon
demand.  Neither Agent nor Lenders shall
be required to (i) accelerate the maturity of the Loans, (ii) terminate any
Commitment or (iii) exercise any other rights or remedies under the Loan
Documents or applicable law in order to charge interest hereunder at the
Default Rate.

2.6          Procedures
for Advances under the Revolving Facility

Each Advance under the Revolving Facility shall be
made upon Borrower’s irrevocable written notice to Agent requesting an Advance
under the Revolving Facility in the form of a completed Borrowing Certificate,
which Borrowing Certificate shall be delivered to Agent not later than 12:00
p.m. (New York City time) at least one (1) but not more than four (4) Business
Days prior to the proposed Business Day on which such requested Advance is to
be made (the “Borrowing Date”).  Each such completed Borrowing Certificate
requesting an Advance under the Revolving Facility shall:

(a)           specify
the proposed Borrowing Date of the requested Advance, which shall be a Business
Day;

(b)           specify
the principal amount of the requested Advance (which shall be in an aggregate
minimum principal amount of $200,000 and integral multiples of $100,000 in
excess thereof); and

(c)           certify
the matters contained in Section 4.2.

On each Borrowing Date, Borrower irrevocably
authorizes Agent and Revolving Lenders to disburse the proceeds of the
requested Advance to the applicable account of Borrower specified in the
applicable Borrowing Certificate, which shall constitute one of the accounts
subject to an Account Control Agreement (or to such other account, if approved
by Agent, as to which Borrower shall instruct Agent in writing), for credit to
Borrower via Federal funds wire transfer no later than 3:00 p.m. (New York City
time).  Anything herein contained to the contrary
notwithstanding, Agent and Lenders shall be entitled to rely upon the authority
of any officer of Borrower for communications with and instructions from
Borrower, including, without limitation, for purposes of this Section 2.6 and
Section 2.7, until Agent has received written notice from Borrower that such
officer no longer has such authority.

2.7          LIBOR
Loans

(a)           Subject to
the provisions of Section 2.7(b) and provided no Default or Event of Default
exists, Borrower from time to time may elect to have all or a portion of the
Principal Balance bear or continue to bear interest determined by reference to
a LIBOR Rate for

 5
 

 

an Interest Period.  Such election shall be exercised by delivery
of a LIBOR Election Notice to Agent by facsimile transmission to 4445 Willard
Avenue, Chevy Chase, Maryland 20815, Telecopy No.:  (301) 841-2313, Attention:  Corporate Finance Group, Portfolio Manager,
not later than 1:00 p.m. (New York City time) at least three (3) Business Days
prior to the Business Day on which the requested Interest Period will commence.
 Agent shall determine (which
determination shall, absent manifest error, be presumptively correct) the LIBOR
Rate applicable to the relevant LIBOR Loan on the applicable Interest Rate
Determination Date and promptly shall give notice thereof to Borrower.  Any LIBOR Election Notice received by Agent
shall be irrevocable.  Upon the
expiration of an Interest Period the applicable LIBOR Loan shall be converted
to and become a Prime Rate Loan unless such LIBOR Loan has been continued as a
LIBOR Loan in accordance with this Section 2.7(a).

(b)           Each LIBOR
Loan shall be in an amount not less than $100,000 or integral multiples of
$100,000 in excess thereof.  At no time
shall more than six (6) LIBOR Loans be in effect.

(c)           If prior
to the commencement of any Interest Period, Agent determines that Dollar
deposits of the relevant amount for the relevant Interest Period are not
available in the London interbank eurodollar market or the rate at which such
Dollar deposits are being offered will not adequately and fairly reflect the
cost to Lenders of maintaining a LIBOR Rate for such Interest Period, or that
the making or funding of LIBOR Loans has become impracticable as a result of an
event occurring after the Closing Date which in the opinion of Agent materially
affects such Loans, or that by reason of circumstances affecting such market,
adequate and reasonable means do not exist for ascertaining the LIBOR Rate
applicable to such Interest Period, Agent promptly shall give notice of such
determination to Borrower and, so long as such circumstances shall continue,
(i) no Lender Party shall be under any obligation to make or convert any Prime
Rate Loans into LIBOR Loans and (ii) on the last day of the current Interest
Period for each LIBOR Loan, such LIBOR Loan, unless then repaid in full,
automatically shall convert to a Prime Rate Loan.

(d)           In the
event that by reason of a change in any law, regulation or requirement or
interpretation thereof by any Governmental Authority, or, after the date
hereof, the imposition of any requirement of any such Governmental Authority,
whether or not having the force of law, including the imposition of any reserve
and/or special deposit requirement (other than reserves included in the
Eurocurrency Reserve Requirements), any Lender Party shall be subjected to any
tax, levy, impost, charge, fee, duty, deduction or withholding of any kind
whatsoever (other than any tax imposed upon the total net income of any Lender
Party) and if any such measures shall result in an increase in the cost to any
Lender Party of maintaining any LIBOR Loan or in a reduction in the amount of
principal or interest receivable by any Lender Party in respect thereof, then
Borrower shall pay to Agent, for the benefit of Lenders, within ten (10) days
after receipt of a notice from Agent (which notice shall be accompanied by a
statement in reasonable detail setting forth the basis for the calculation
thereof, which calculation, in the absence of manifest error, shall be
presumptively correct, and a copy of such notice concurrently therewith shall
be delivered to each Lender), an amount equal to such increased cost or reduced
amount, provided that Borrower shall not be obligated to pay any such increased
cost or reduced amount which accrued prior to the day which is 180 days prior
to the date upon which Agent first makes demand therefor.

 6
 

 

(e)           If at any
time a change in any law, treaty or regulation, or any interpretation thereof
by any Governmental Authority, shall make it (or, in the good faith judgment of
such Lender Party cause a substantial question as to whether it is) unlawful
for any Lender Party to make, maintain or fund its share of any LIBOR Loan,
then, upon the occurrence of such event, Agent shall notify Borrower thereof
and thereupon (i) no Lender Party shall be under any obligation to make or
convert any Prime Rate Loans into LIBOR Loans and (ii) on the last day of the
current Interest Period for each LIBOR Loan (or, in any event, on such earlier
date as may be required by the relevant law, treaty, regulation or interpretation
thereof), such LIBOR Loan, unless then repaid in full, automatically shall
convert to a Prime Rate Loan.

(f)            In
addition to any other payments payable by Borrower to the Lender Parties
pursuant to the Loan Documents, Borrower shall indemnify and reimburse each
Lender Party on demand for any expense which any Lender Party may sustain,
including without limitation, any expense resulting from their contractual
obligations in connection with applicable Dollar deposits, as a consequence of
(i) any withdrawal by Borrower of any LIBOR Election Notice before it becomes
effective, (ii) any failure by Borrower to borrow the amount set forth in any
LIBOR Election Notice on the date specified therefor, (iii) any failure of
Borrower to make any payment when due of any amount payable with respect to any
LIBOR Loan and (iv) any prepayment of any LIBOR Loan prior to the expiration of
the Interest Period applicable thereto. 
Such expense shall be deemed to include an amount determined by Agent to
be the excess, if any, of (x) the amount of interest which would have accrued
on the principal amount of such LIBOR Loan had such event not occurred, at the
LIBOR Rate that would have been applicable to such LIBOR Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, for the period that would
have been the Interest Period for such LIBOR Loan), over (y) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which Agent would bid were it to bid, at the commencement of such
period, for Dollar deposits of a comparable amount and period from other banks
in the London interbank eurodollar market.

(g)           Each
Lender Party may, if it so elects, fulfill its commitment as to any LIBOR Loan
by causing a foreign branch or Affiliate of such Lender Party to make such
Loan; provided that in such event for the purposes of this Agreement such Loan
shall be deemed to have been made by such Lender Party and the obligation of
Borrower to repay such Loan shall nevertheless be to the Lender Party and shall
be deemed held by it, to the extent of such Loan, for the account of such
branch or Affiliate.

(h)           Notwithstanding
any provision of this Agreement to the contrary, each Lender Party shall be
entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if such Lender
Party actually had funded and maintained each LIBOR Loan during each Interest
Period for such Loan through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
LIBOR Rate for such Interest Period.

(i)            Determinations
and statements of any Lender Party pursuant to Sections 2.7(c), (d), (e) and
(f) shall be conclusive absent demonstrable error.  Each Lender Party may use reasonable
averaging and attribution methods in determining compensation under Sections
2.7(d)

 7
 

 

and (f), and the
provisions of such Sections shall survive the repayment of the Obligations and
the termination of the Commitments and this Agreement.

2.8          Voluntary
Prepayments

(a)           Subject to
the terms of this Section 2.8 and
Section 3.4, Borrower may prepay to Agent, for the ratable benefit of
the applicable Lenders, the Principal Balance of the Revolving Loans and/or the
Principal Balance of Term Loan A, in whole or in part, at any time.  Borrower may not prepay the Principal Balance
of the Convertible Term Loan at any time unless the Requisite Convertible Term
Lenders elect to accept any such prepayment in accordance with Section
2.8(c).  The Convertible Term Lenders may
accept or decline to accept any such prepayment in the sole and absolute
discretion of the Convertible Term Lenders.

(b)           No LIBOR
Loan may be prepaid in part. 
Concurrently with any prepayment of a LIBOR Loan prior to the expiration
of the Interest Period applicable thereto, Borrower shall pay all breakage fees
and other amounts due under Section 2.7(f) as a consequence of such prepayment.

(c)           If
Borrower elects to make any prepayment pursuant to this Section 2.8 (other than
any prepayment of the Revolving Loans), Borrower shall give irrevocable notice
of such prepayment (a “Voluntary Prepayment
Notice”) to Agent not less than seven (7) Business Days prior to the
date such prepayment is to be made, specifying (i) the date on which such
prepayment is to be made and (ii) the amount of such prepayment.  Each Voluntary Prepayment Notice shall be
accompanied by a certificate of a Responsible Officer of Borrower on behalf of
Borrower stating that such payment is being made in compliance with this
Section 2.8.  Agent promptly shall
provide a copy of each Voluntary Prepayment Notice to the Convertible Term
Lenders.  Within three (3) Business Days
after a Convertible Term Lender’s receipt of a copy of such Voluntary
Prepayment Notice, such Convertible Term Lender shall give Agent irrevocable
notice as to whether such Convertible Term Lender elects to accept such
prepayment (an “Voluntary Prepayment Election Notice”).  If any Convertible Term Lender fails to
deliver a Voluntary Prepayment Election Notice to Agent within such three (3)
Business Day period, such Convertible Term Lender shall be deemed for all
purposes hereunder to have declined to accept such prepayment.  Notice of prepayment having been so given,
the aggregate principal amount of so specified to be prepaid (other than, if
the Requisite Convertible Term Lenders have not elected to accept such
prepayment, any portion of such principal amount in excess of the Principal
Balance of Term Loan A then outstanding), together with accrued interest
thereon and the applicable Prepayment
Premium, if any, shall be due and payable on the prepayment date set
forth in such notice.

(d)           Any
voluntary prepayment with respect to the Revolving Loan shall be applied in the
following order of priority to the payment of: 
(i) any and all Obligations that are due and owing pursuant to the terms
of the Loan Documents, except the Principal Balance and accrued and unpaid
interest thereon; (ii) accrued and unpaid interest on the Principal Balance
then due and owing; and (iii) the Principal Balance of the Revolving Loans
without a corresponding permanent reduction in the Facility Cap.  Any voluntary prepayment with respect to the
Term Loan(s) shall be applied in the following order of priority of the payment
of:  (i) any and all Obligations that are
due and owing pursuant to the terms of the Loan Documents, except

 8
 

 

the Principal Balance and
accrued and unpaid interest thereon; and either (ii) if the Requisite
Convertible Term Lenders have not elected to accept such prepayment, (A)
accrued and unpaid interest on the portion of the Principal Balance of Term
Loan A being prepaid; (B) the Prepayment Premium applicable to the portion of
the Principal Balance of Term Loan A being prepaid, and (C) the remaining
scheduled installments of the Principal Balance of Term Loan A in the inverse
order of maturities, or (iii) if the Requisite Convertible Term Lenders have
elected to accept such prepayment, (A) accrued and unpaid interest on the
portion of the Principal Balance of the Term Loans being prepaid; (B) the
Prepayment Premium, if any, applicable to the portion of the Principal Balance
of the Term Loans being prepaid, and (C) the Principal Balance of the Term
Loans in proportion to the Principal Balance of each Term Loan then outstanding
(and any such application to the Principal Balance of Term Loan A shall be
applied to the remaining scheduled installments of the Principal Balance of
Term Loan A in the inverse order of maturities).

(e)           All
prepayments made pursuant to this Section 2.8 shall be designated as a
prepayment pursuant to this Section 2.8 on the applicable wire.  The amount of any partial prepayment of the
Principal Balance shall be $100,000 or integral multiples of $100,000 in excess
thereof.

2.9          Mandatory
Payments and Prepayments

(a)           The
Principal Balance of Term Loan A shall be paid in installments on the dates and
in the respective amounts set forth below:

	
  Payment Date

  	
   

  	
  Amount of Installment

  
	
  December 31, 2007

  	
   

  	
  $

  	
  1,000,000

  
	
  March 31, 2008

  	
   

  	
  $

  	
  1,000,000

  
	
  June 30, 2008

  	
   

  	
  $

  	
  1,000,000

  
	
  September 30, 2008

  	
   

  	
  $

  	
  1,000,000

  
	
  December 31, 2008

  	
   

  	
  $

  	
  1,250,000

  
	
  March 31, 2009

  	
   

  	
  $

  	
  1,250,000

  
	
  June 30, 2009

  	
   

  	
  $

  	
  1,250,000

  
	
  September 30, 2009

  	
   

  	
  $

  	
  1,250,000

  
	
  December 31, 2009

  	
   

  	
  $

  	
  1,250,000

  
	
  March 31, 2010

  	
   

  	
  $

  	
  1,250,000

  
	
  June 30, 2010

  	
   

  	
  $

  	
  1,250,000

  
	
  September 30, 2010

  	
   

  	
  $

  	
  1,250,000

  
	
  December 31, 2010

  	
   

  	
  $

  	
  1,500,000

  
	
  March 31, 2011

  	
   

  	
  $

  	
  1,500,000

  
	
  June 30, 2011

  	
   

  	
  $

  	
  1,500,000

  

 9
 

 

(b)           The
then remaining Principal Balance, including the Principal Balance of the
Revolving Loans, any remaining Principal Balance of Term Loan A, the Principal
Balance of the Convertible Term Loan and all other Obligations shall be due and
payable in full, if not earlier in accordance with this Agreement, on the
Maturity Date.

(c)           If any
Credit Party or any Subsidiary of any Credit Party, whether in a single
transaction or a series of transactions:

(i)            sells
or transfers any Property (other than any Qualified Asset Sale);

(ii)           sells
or issues any Capital Stock (excluding sales or issuances of Permitted
Securities to the extent no Default or Event of Default has occurred and is continuing
or would be caused thereby or result therefrom);

(iii)          receives
any property damage insurance award or any other insurance proceeds of any
kind, including, without limitation, proceeds from any life insurance or
business interruption insurance;

(iv)          incurs
any Indebtedness other than Permitted Indebtedness;

(v)           receives
any portion of the Exchange Fund (as defined in the Closing Date Acquisition
Agreement) under Section 2.9 of the Closing Date Acquisition Agreement); or

(vi)          receives
or any Common Stock from the Escrow Fund (as defined in the Closing Date
Acquisition Agreement) under Article VII of the Closing Date Acquisition
Agreement;

then Borrower shall prepay the Loans and the other
Obligations in an amount equal to one hundred percent (100%) of the Net
Proceeds thereof (or, in the case of the foregoing clause (vi), in an amount
equal to the Required Indemnity Prepayment Amount), which prepayment shall be
applied thereto in accordance with Section 2.9(f); provided, that, the foregoing notwithstanding, if Borrower
reasonably expects the Net Proceeds of any such sale or transfer in respect of
the foregoing clause (i) or any such property damage insurance award under the
foregoing clause (iii), or a portion thereof, to be reinvested in productive assets
of a kind then used or usable in the Business, and, within one hundred eighty
(180) days after such occurrence, enters into a binding commitment to make such
reinvestment (which reinvestment shall be made within two hundred seventy (270)
days after such occurrence), then Borrower shall deliver such Net Proceeds, or

 10

 

applicable portion thereof, to Agent to be, at Agent’s
election, (x) applied to the Revolving Loans (without resulting in a permanent
reduction in the Revolving Loan Commitment) or (y) held by Agent in a cash
collateral account pending such reinvestment.

(d)           On or
before the day of delivery to Agent of Borrower’s annual audited financial
statements in accordance with the terms of this Agreement, but in any event no
later than the ninetieth (90th)
day after the end of each fiscal year of Borrower (commencing with the fiscal
year of Borrower ending December 31, 2007, Borrower shall furnish to Agent a
written calculation of Excess Cash Flow for such fiscal year and deliver to
Agent, for application to the Loans and the other Obligations in accordance
with Section 2.9(f), an amount
equal to fifty percent (50%) of
such Excess Cash Flow.

(e)           Any
balance of Advances under the Revolving Facility outstanding at any time in
excess of the Facility Cap in effect at such time, less the Letter of Credit Usage then in effect, shall be
immediately due and payable by Borrower without the necessity of any notice or
demand.

(f)            (i)            Promptly
after becoming aware of any mandatory prepayment under Section 2.9(c) or (d),
Agent shall notify each Convertible Term Lender of such mandatory prepayment (a
“Mandatory Prepayment Notice”).  Within three (3) Business Days after a
Convertible Term Lender’s receipt of such Mandatory Prepayment Notice, such
Convertible Term Lender shall give Agent irrevocable notice as to whether such
Convertible Term Lender elects to require
prepayment of the Convertible Term Loan from the proceeds of such prepayment in
accordance with this Section 2.9(f) (a “Mandatory
Prepayment Election Notice”). 
If any Convertible Term Lender fails to deliver a Mandatory Prepayment
Election Notice to Agent within such three (3) Business Day period, such
Convertible Term Lender shall be deemed for all purposes hereunder to have
declined to accept such prepayment.

(ii)           All prepayments pursuant to Sections 2.9(c) and (d) shall be applied in the
following order of priority to the payment of: 
(i) any and all Obligations that are due and owing pursuant to the terms
of the Loan Documents, except the Principal Balance and accrued and unpaid interest
thereon; and either (ii) if the Requisite Convertible Term Lenders have not
elected to require such prepayment, (A) accrued and unpaid interest on the
portion of the Principal Balance of Term Loan A being prepaid; (B) the
Prepayment Premium applicable to the portion of the Principal Balance of Term
Loan A being prepaid, (C) the remaining scheduled installments of the Principal
Balance of Term Loan A in the inverse order of maturities, (D) accrued and
unpaid interest on the Principal Balance of the Revolving Loans, and (E) the
Principal Balance of the Revolving Loans (with a corresponding permanent reduction in the Facility Cap), or
(iii) if the Requisite Convertible Term Lenders have elected to require such
prepayment, (A) accrued and unpaid interest on the portion of the Principal
Balance of the Term Loans being prepaid; (B) the Prepayment Premium, if any,
applicable to the portion of the Principal Balance of the Term Loans being
prepaid, (C) the Principal Balance of the Term Loans in proportion to the
Principal Balance of each Term Loan then outstanding (and any such application
to the Principal Balance of Term Loan A shall be applied to the remaining
scheduled installments of the Principal Balance of Term Loan A in the inverse

 11
 

 

order of
maturities), (D) accrued and unpaid interest on the Principal Balance of the
Revolving Loans, and (E) the Principal Balance of the Revolving Loans (with a corresponding permanent reduction in
the Facility Cap).

2.10        Promise
to Pay; Manner of Payment.

Borrower absolutely and unconditionally promises to
pay, when due and payable pursuant hereto, principal, interest and all other
amounts and Obligations payable hereunder and under any other Loan Document,
without any right of rescission and without any deduction whatsoever, including
any deduction for set-off, recoupment or counterclaim, notwithstanding any
damage to, defects in or destruction of the Collateral or any other event,
including obsolescence of any property or improvements.  Any payments made by the Credit Parties
(other than payments automatically paid through Advances under the Revolving
Facility as provided herein) shall be made by wire transfer on the date when
due, without offset, deduction or counterclaim, in Dollars, in immediately
available funds to such account as may be indicated in writing by Agent to
Borrower from time to time.  Any such
payment received after 2:00 p.m. (New York City time) on any date shall be
deemed received on the next succeeding Business Day, and any applicable
interest or fees shall continue to accrue in respect thereof.  Whenever any payment under any Loan Document
shall be stated to be due or shall become due and payable on a day other than a
Business Day, the due date thereof shall be extended to, and such payment shall
be made on, the next succeeding Business Day, and such extension of time in
such case shall be included in the computation of payment of any interest (at
the interest rate in effect during such extension) and/or fees, as the case may
be.

2.11        Payments
by Agent

Should any Obligation required to be paid under any
Loan Document remain unpaid beyond any applicable cure period, such Obligation
may be paid by Agent, on behalf of Lenders, which non-payment shall be deemed
an automatic request for an Advance under the Revolving Facility as of the date
such payment is or was due, and Borrower hereby irrevocably authorizes
disbursement of any such funds to Agent, for the benefit of Lenders, by way of
direct payment of the relevant amount, interest or other Obligation without
necessity of any demand.  Any sums
expended or amounts paid by Agent and/or Lenders as a result of any Credit
Party’s failure to pay, perform or comply with any Loan Document or any of the
Obligations may be charged to Borrower’s account as an Advance under the
Revolving Facility and added to the Obligations, and shall be payable
immediately upon demand.

2.12        Computation
of Interest and Fees; Lawful Limits

All interest and fees owing from time to time under
the Loan Documents shall be computed on the basis of a year of 360 days and for
the actual number of days elapsed in each calculation period, as
applicable.  In no contingency or event
whatsoever, whether by reason of acceleration or otherwise, shall the interest
and other charges paid or agreed to be paid to Agent, for the benefit of
Lenders, or Lenders for the use, forbearance or detention of money hereunder
exceed the maximum rate permissible under applicable law which a court of
competent jurisdiction shall, in a final determination, deem applicable
hereto.  If, due to any circumstance
whatsoever, fulfillment of any provision hereof, at the time performance of
such provision shall

 12
 

 

be due, shall exceed any
such limit, then, the obligation to be so fulfilled shall be reduced to such
lawful limit, and, if Agent or Lenders shall have received interest or any
other charges of any kind which might be deemed to be interest under applicable
law in excess of the maximum lawful rate, then such excess shall be applied
first to any unpaid fees and charges hereunder, then to the unpaid principal
balance owed by Borrower hereunder, and if the then remaining excess interest
is greater than the previously unpaid principal balance, Agent and Lenders
shall promptly refund such excess amount to Borrower and the provisions hereof
shall be deemed amended to provide for such permissible rate.  The terms and provisions of this Section 2.12
shall control to the extent any other provision of any Loan Document is
inconsistent herewith.  Borrower warrants
that the Loans are the result of a commercial loan transaction within the
meaning of Sections 12-101(c) and 12-103(e), Commercial Law Article,
Annotated Code of Maryland.

III.           FEES

3.1          Commitment
Fee

On the Closing Date, Borrower shall pay to Agent, for
the ratable benefit of Lenders, a nonrefundable commitment fee equal to Five
Hundred Forty Thousand Dollars ($540,000), which commitment fee shall be deemed
fully earned and due and payable on the Closing Date and in addition to any
other fee from time to time payable under the Loan Documents.

3.2          Unused
Line Fee

Borrower shall pay to Agent, for the ratable benefit
of Revolving Lenders, an unused line fee (the “Unused Line Fee”), payable monthly
in arrears on the first day of each calendar month, commencing with the month
immediately succeeding the month in which the Closing Date occurs, in an amount
equal to one-half of one percent (0.5%)
per annum of the difference derived by subtracting (a) the daily average amount
of (x) the aggregate outstanding
Advances (determined as of the end of each day) under the Revolving Facility and (y) the Letter of Credit Usage, in each
case outstanding during the preceding month, from (b) the Facility Cap
as in effect during such preceding month.

3.3          Administrative
Fee

Borrower shall pay Agent for
its own account a $25,000 administrative fee (the “Administrative Fee”) on the Closing Date and on each
anniversary of the Closing Date.  Each
Administrative Fee shall be deemed fully earned on the date payable.

3.4          Prepayment
Premium

If (a) the Obligations are accelerated or any Credit
Party or other Person otherwise prepays, or is required to prepay, the
Principal Balance of Term Loan A in full and, if the Requisite Convertible Term
Lenders have elected to accept or require such prepayment, the Principal
Balance of Term Loan B in full (in each case other than as a result of any
mandatory prepayment under Section 2.9(c)(iii) or 2.9(d)) (each, a “Termination”),
then, on the effective date of such Termination, Borrower shall pay to Agent,
for the ratable benefit of Lenders (in addition to the then outstanding
principal, accrued interest and other Obligations owing pursuant

 13
 

 

to the terms of this
Agreement and any other Loan Document), as yield maintenance for the loss of
bargain and not as a penalty, a prepayment premium (“Prepayment
Premium”) equal to (i) 2.0% of the Principal Balance of the Term
Loans so accelerated, prepaid or required to be prepaid immediately prior to
such Termination if such Termination occurs prior to the first anniversary of
the Closing Date and (ii) 1.0% of the Principal Balance of the Term Loans so
accelerated, prepaid or required to be prepaid immediately prior to such
Termination if such Termination occurs on or after the first anniversary of the
Closing Date but prior to the second anniversary of the Closing Date.

3.5          Letter
of Credit Fees

Borrower shall pay to Agent,
for the ratable benefit of Revolving Lenders, a Letter of Credit fee equal to
(i) three percent (3.00%) per annum of the aggregate undrawn face amount of all
outstanding Standby Letters of Credit issued for the account of Borrower (the “Standby Letter of Credit Fee”), which fee
shall be payable in arrears on each Interest Payment Date and (ii) one quarter
of one percent (.25%) of the aggregate undrawn face amount of any such
Documentary Letter of Credit issued for the account of Borrower and payable
upon issuance (together with the Standby Letter of Credit Fees plus normal and
customary issuance, presentation, amendment, processing and other
administrative costs and expenses incurred by L/C Issuer, the “Letter of Credit Fees”).  Upon the occurrence and during the
continuance of any Event of Default, all Letter of Credit Fees shall be payable
on demand at a rate equal to the Letter of Credit Fee, plus two percent
(2.00%) per annum, in each case on the aggregate undrawn face amount of all
outstanding Letters of Credit issued for the account of Borrower.  Borrower shall also pay on demand the normal
and customary administrative charges for issuance, amendment, negotiation,
renewal or extension of any Standby Letter of Credit or Documentary Letter of
Credit imposed by the L/C Issuer.

On demand by Agent at any time after the occurrence
and during the continuance of any Event of Default, Borrower will cause cash to
be deposited and maintained in an account with Agent, as cash collateral, in an
amount equal to one hundred and five percent (105%) of the Letter of Credit
Usage, and Borrower hereby irrevocably authorizes Agent, in its discretion, on
Borrower’s behalf and in Borrower’s name, to open such an account and to make
and maintain deposits therein, or in an account opened by Borrower, in the
amounts required to be made by Borrower, out of the proceeds of Accounts or
other Collateral or out of any other funds of any Credit Party coming into any
Revolving Lender’s possession at any time. 
Agent will invest such cash collateral (less applicable reserves) in
such short-term money-market items as to which Agent in its Permitted
Discretion may determine and the net return on such investments shall be
credited to such account and constitute additional cash collateral.  Borrower may not withdraw amounts credited to
any such account except upon the earlier of (i) payment and performance in full
of all Obligations (other than contingent
indemnification obligations under the Loan Documents for which no claim giving
rise thereto has been asserted) and termination of this Agreement and
(ii) at such time as such Event of Default no longer exists, unless Agent
determines in its Permitted Discretion not to release such amounts.

 14
 

 

IV.           CONDITIONS
PRECEDENT

4.1          Conditions
to Initial Advance, Funding of the Term Loans and the Closing

The obligations of Agent and Lenders to consummate the
transactions contemplated herein, to make the initial Advance under the
Revolving Facility (the “Initial Advance”)
and to fund the Term Loans in each case are, in addition to the conditions
precedent specified in Section 4.2, subject to the delivery of all documents
listed on, the taking of all actions set forth on and the satisfaction of each
of the conditions precedent listed on Exhibit D hereto, all in a manner, form
and substance satisfactory to Agent in its sole discretion.

4.2          Conditions
to each Advance and Funding of the Term Loans

The obligations of Lenders to make any Advance under
the Revolving Facility (including, without limitation, the Initial Advance)
and/or to fund the Term Loans on the Closing Date are subject, in each case, to
the satisfaction of each of the following:

(a)           in the
case of an Advance, Borrower shall have delivered to Agent a Borrowing Certificate
for such Advance;

(b)           each of
the representations and warranties made by each Credit Party and each other
Person party thereto (other than Agent and Lenders) in the Loan Documents shall
be true and correct in all respects before and after giving effect to funding
of the Term Loans and/or making of such Advance (except to the extent such
representations and warranties expressly relate to an earlier date, in which
case they shall have been true and correct in all respects as of such earlier
date);

(c)           no Default
or Event of Default shall have occurred or be continuing or exist after giving
effect to the requested Advance and/or funding of the Term Loans on the
relevant Borrowing Date;

(d)           immediately
after giving effect to the requested Advance, the aggregate outstanding
principal amount of Advances under the Revolving Facility shall not exceed the
Facility Cap then in effect, less the
Letter of Credit Usage then in effect;

(e)           no
liabilities or obligations with respect to any Credit Party of any nature shall
exist which, either individually or in the aggregate, reasonably could be
likely to have or result in a Material Adverse Effect and, since the date of
the then most recent audited financial statements delivered to Agent and
Lenders hereunder, no Material Adverse Effect shall have occurred; and

(f)            if the
Borrowing Date for any such Advance is on or after the date Agent and Lenders
have received the Compliance Certificate for the calendar quarter ending
September 30, 2006, then, assuming such Advance had been made on the last day
of the calendar quarter most recently ended prior to the Borrowing Date for
which Agent and Lenders have received a Compliance Certificate, the Leverage
Ratio would have been less than or equal to the maximum ratio set forth in Item
1 of Exhibit B-1 for the calendar quarter most recently ended prior to such
Borrowing Date.

 15
 

 

Each Borrowing Certificate submitted shall constitute
a representation and warranty by each Credit Party, as of the date of each such
notice and as of the relevant Borrowing Date, that the conditions in Section
4.1 and this Section 4.2 are satisfied.

V.            REPRESENTATIONS
AND WARRANTIES

Each Credit Party, jointly and severally, represents
and warrants to the Lender Parties as follows:

5.1          Organization
and Authority

Each Credit Party, and each Subsidiary of each Credit
Party, is a corporation, partnership or limited liability company, as the case
may be, duly organized or formed, validly existing and in good standing under
the laws of its jurisdiction of organization or formation.  Each Credit Party, and each Subsidiary of
each Credit Party, (a) has all requisite corporate, partnership or limited
liability company power and authority to own its Properties and carry on its business
as now being conducted and as contemplated in the Loan Documents and the
Related Documents, (b) is duly qualified and licensed to do business in and in
good standing in each jurisdiction where the failure so to qualify or be
licensed or qualified reasonably could be expected to result in a Material
Adverse Effect, and (c) has all requisite corporate, partnership or limited
liability company power and authority (i) to execute, deliver and perform the
Loan Documents and the Related Documents to which it is a party, (ii) with
respect to Borrower, to borrow hereunder, (iii) to consummate the transactions
contemplated by the Loan Documents and the Related Documents and (iv) to grant
the Liens pursuant to the Security Documents to which it is a party.

5.2          Loan
Documents and Related Documents

The execution, delivery and performance by each Credit
Party of the Loan Documents and the Related Documents to which it is a party,
and the consummation by such Credit Party of the transactions contemplated
thereby, (a) have been duly authorized by all requisite corporate, partnership
or limited liability company action, as applicable, of such Credit Party, and
such Loan Documents and Related Documents have been duly executed and delivered
by or on behalf of such Credit Party; (b) do not violate any provisions of (i)
any applicable law, statute, rule, regulation, ordinance or tariff, (ii) any
order, injunction, writ or decree of any Governmental Authority binding on such
Credit Party or any of their respective Properties, or (iii) the Organizational
Documents of such Credit Party, or any agreement between such Credit Party and
its shareholders, members, partners or equity owners or among any such
shareholders, members, partners or equity owners (other than the Prior Online
Benefits Shareholder Agreement, the violation of which could not reasonably be
expected to have a Material Adverse Effect); (c) are not in conflict with, and
do not result in a breach or default of or constitute an event of default, or
an event, fact, condition or circumstance which, with notice or passage of
time, or both, would constitute or result in a conflict, breach, default or
event of default under, any indenture, agreement or other instrument to which
such Credit Party is a party, or by which the Properties of such Credit Party
are bound, the effect of which reasonably could be expected to result in,
either individually or in the aggregate, a Material Adverse Effect; (d) except
as contemplated by the Security Documents, will not result in the creation or
imposition of any Lien of any nature upon any of the Properties of any Credit
Party; and (e) do not require the consent, approval or

 16
 

 

authorization of, or
filing, registration or qualification with, any Governmental Authority or any
other Person, except for (i) except for filings in connection with the
perfection of the Liens created by the Security Documents, (ii) filing of a
Form 8-K and certain of the Loan Documents and the Related Documents with the
Securities and Exchange Commission, (iii) the filing of a notification form for
the listing of additional shares with the NASDAQ stock market and (iv) the
filing of a certificate of merger with the Delaware Secretary of State as
contemplated by the Closing Date Acquisition Agreement.  Each of the Loan Documents and the Related
Documents to which a Credit Party, is a party constitutes the legal, valid and
binding obligation of such Credit Party, enforceable against such Credit Party
in accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization or other similar law
affecting the enforceability of creditors’ rights generally and to the effect
of general principles of equity which may limit the availability of equitable
remedies (whether in a proceeding at law or in equity).

5.3          Subsidiaries,
Capitalization and Ownership Interests

As of the Closing Date, no Credit Party has any
Subsidiaries other than those Persons listed as Subsidiaries on Schedule 5.3.  Schedule 5.3 states the authorized and
issued Capital Stock of each Credit Party, the number and class (both voting
and non-voting) of each share, unit, interest or other item of such Capital
Stock issued and outstanding of such Credit Party, in the case of Borrower, the
top ten beneficial and record owners thereof as of the Closing Date and the
number and class owned by each, and, in the case of each other Credit Party,
the beneficial and record owners thereof as of the Closing Date.  The outstanding Capital Stock of each Credit
Party has been duly authorized and validly issued and are fully paid and
nonassessable and each Person listed on Schedule 5.3 as of the Closing
Date as owning Capital Stock of any Credit Party other than Borrower owns
beneficially and of record all of the Capital Stock it is listed as owning free
and clear of any Liens other than Liens created by the Security Documents.  Schedule 5.3 lists the directors and
managers of each Credit Party as of the Closing Date.  Except as listed on Schedule 5.3, no
Credit Party (a) owns any interest or participates or engages in any joint
venture, partnership or similar arrangements with any Person, (b) is a party to
or has knowledge of any agreements restricting the transfer of its Capital
Stock (other than the Prior Online Benefits Shareholder Agreement, the
restrictions contained in which could not reasonably be expected to have a
Material Adverse Effect), (c) has issued any rights which can be convertible
into or exchangeable or exercisable for any of its Capital Stock, or any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, any of its Capital
Stock or any securities convertible into or exchangeable or exercisable for any
of its Capital Stock, (d) is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any of its Capital
Stock or (e) has any stock appreciation rights, phantom stock plan or similar
rights or obligations outstanding.  No
owner or holder of any Capital Stock in any Credit Party has any Shareholder
Blocking Rights.

5.4          Properties
and Locations

Each Credit Party is the sole owner and has good,
valid and marketable title to, or a valid leasehold interest in, license of, or
right to use, all of its Properties, whether personal or real, in each
instance, necessary or used in the Ordinary Course of Business, free and clear
of all Liens

 17
 

 

other than Permitted
Liens.  All tangible personal Property of
each Credit Party is in good repair, working order and condition (normal wear
and tear excepted) and is suitable and adequate for the uses for which they are
being used or are intended.  Schedule
5.4 lists as of the Closing Date (i) the locations of the chief executive
office of each Credit Party, all locations of Collateral and all books and
records in connection therewith or in any way relating thereto or evidencing
the Collateral, (ii) identifies the common address and use of each such
location, (iii) indicates whether such location is owned or leased by such
Credit Party or whether such Credit Party is entitled to occupy or use such
location by virtue of a license or easement, (iv) if such location is leased,
describes the parties to and date of such lease and the name and current
address of the landlord under the lease, (v) if such location is owned, sets
forth a complete and accurate legal description for such location and (vi) if
such Credit Party occupies or uses such location by virtue of a license or
easement agreement, describes such license or easement agreement with
reasonable specificity.

5.5          Other
Agreements

No Credit Party is (a) a party to any judgment, order
or decree or any agreement, document or instrument, or subject to any
restriction, which adversely affects its ability to execute and deliver, or
perform under, any Loan Document or Related Document to which it is a
party or to pay the Obligations, (b) in default in any material respect
in the performance, observance or fulfillment of any obligation, covenant or
condition contained in any Related Document, nor is there any event, fact,
condition or circumstance which, with notice or passage of time or both, would
constitute or result in a material conflict, breach, default or event of
default under, any Related Document, (c) in default in the performance,
observance or fulfillment of any obligation, covenant or condition contained in
any other agreement, document or instrument to which it is a party or to which
any of its Properties are subject, which default reasonably could be expected
to result in a Material Adverse Effect, nor is there any event, fact, condition
or circumstance which, with notice or passage of time or both, would constitute
or result in a conflict, breach, default or event of default under, any of the
foregoing which reasonably could be expected to result in a Material Adverse
Effect, or (d) a party or subject to any agreement, document or instrument with
respect to, or obligation to pay any, service or management fee with respect
to, the ownership, operation, leasing or performance of any of its Business
other than service and licensing agreements in the Ordinary Course of Business.

5.6          Litigation

Except as set forth on Schedule 5.6, there are
no actions, suits, proceedings or investigations pending or, to the knowledge
of the Credit Parties, threatened against any Credit Party that (a) questions
or reasonably could be expected to prevent the validity of any of the Loan
Documents or Related Documents or the right of such Credit Party to enter into
any Loan Document or any Related Document or to consummate the transactions
contemplated thereby, or (b) reasonably could be expected to result in, either
individually or in the aggregate, a Material Adverse Effect.  No Credit Party is a party or subject to any
order, writ, injunction, judgment or decree of any Governmental Authority.

 18
 

 

5.7          Environmental
Matters

Each Credit Party is, and the operations of each
Credit Party are, in compliance with all applicable Environmental Laws in all
material respects.  No Credit Party has
been notified of any action, suit, proceeding or investigation (a) relating in
any way to compliance by or liability of such Credit Party under any
Environmental Laws, (b) which otherwise deals with any Hazardous Substance or
any Environmental Law, or (c) which seeks to suspend, revoke or terminate any
license, permit or approval necessary for the generation, handling, storage,
treatment or disposal of any Hazardous Substance.

5.8          Tax
Returns; Governmental Reports

Each Credit Party (a) has filed all federal, state,
foreign and local tax returns and other material reports which are required by
law to be filed by such Credit Party, and (b) has paid all taxes, assessments,
fees and other governmental charges, including, without limitation, payroll and
other employment related taxes, in each case that are due and payable, except
for items that such Credit Party currently is contesting in good faith by
appropriate proceedings and for which adequate reserves have been established
in accordance with GAAP and no notice of Lien has been filed or recorded.

5.9          Financial
Statements and Reports

All financial statements relating to any Credit Party
that have been and hereafter may be delivered to Agent or any Lender by any
Credit Party (a) are consistent with the books of account and records of the
Credit Parties, (b) have been prepared in accordance with GAAP on a consistent
basis throughout the indicated periods, subject to, in the case of interim
unaudited financial statements, the lack of footnote disclosure and normal
year-end adjustments, and (c) present fairly in all material respects the
consolidated financial condition, assets and liabilities and results of
operations of the Credit Parties at the dates and for the relevant periods
indicated in accordance with GAAP on a basis consistently applied.  The Credit Parties have no material
obligations or liabilities of any kind that are not disclosed in such audited
financial statements, and since the date of the most recent financial
statements submitted to Agent and Lenders, there has not occurred any Material
Adverse Effect or, to Credit Parties’ knowledge, any event or condition that
reasonably could be expected to result in a Material Adverse Effect.

5.10        Compliance
with Law; ERISA; Business

Each Credit Party (a) is in compliance with all laws,
statutes, rules, regulations, ordinances and tariffs of any Governmental
Authority applicable to such Credit Party, the Business and/or such Credit
Party’s Properties or operations, including, without limitation, ERISA, the
Patriot Act and any other laws or regulations pertaining to the Business, and
(b) is not in violation of any order of any Governmental Authority or other
board or tribunal, except, in the case of both (a) and (b), where any such
noncompliance or violation reasonably could not be expected to result in,
either individually or in the aggregate, a Material Adverse Effect.  There is no event, fact, condition or
circumstance which, with notice or passage of time, or both, would constitute
or result in any noncompliance with, or any violation of, any of the foregoing,
in each case except where any such noncompliance or violation reasonably could
not be expected to

 19
 

 

result in, either
individually or in the aggregate, a Material Adverse Effect.  No Credit Party has (i) engaged in any “Prohibited
Transactions,” as defined in Section 406 of ERISA and Section 4975 of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder, (ii) failed to meet any applicable minimum funding
requirements under Section 302 of ERISA in respect of its plans and no funding
requirements have been postponed or delayed, (iii) knowledge of any event or
occurrence which would cause the Pension Benefit Guaranty Corporation to
institute proceedings under Title IV of ERISA to terminate any of its employee
benefit plans, (iv) any fiduciary responsibility under ERISA for investments
with respect to any plan existing for the benefit of Persons other than its
employees or former employees, or (v) withdrawn, completely or partially, from
any multi-employer pension plans so as to incur liability under the
MultiEmployer Pension Plan Amendments of 1980. 
With respect to each Credit Party, there exists no event described in
Section 4043 of ERISA, excluding Subsections 4043(b)(2) and 4043(b)(3) thereof,
for which the thirty (30) day notice period contained in 12 C.F.R. § 2615.3 has
not been waived.  Each Credit Party has
maintained in all material respects all records required to be maintained by
any applicable Governmental Authority.

5.11        Intellectual
Property

Except as set forth on Schedule 5.11, as of the
Closing Date, or as thereafter otherwise disclosed in writing to Agent from
time to time, no Credit Party owns, licenses or utilizes any patents, patent
applications, trademarks, trademark applications, trade names, service marks,
service mark applications, copyrights or copyright applications.  Each Credit Party owns directly, or is
entitled to use by license or otherwise, all Intellectual Property used in,
necessary for or material to the conduct of such Credit Party’s Business.  All items listed on Schedule 5.11 as
of the Closing Date are and, at all times after the Closing Date (except to the
extent no longer deemed necessary for or material to the conduct of the
Business of the Credit Parties in the good faith business judgment of the
Credit Parties) will be: (a) subsisting and have not been adjudged invalid or
unenforceable, in whole or part; and (b) valid, in full force and effect and
not in known conflict with the rights of any Person.  Each Credit Party has made all filings and
recordings necessary in the exercise of reasonable and prudent business
judgment to protect its interest in the Intellectual Property of such Credit
Party in the United States Patent and Trademark Office, and the United States
Copyright Office and in corresponding offices throughout the world, as
appropriate.  Each Credit Party has
performed all acts and has paid and will continue to pay all required fees and
taxes to maintain each and every item of the Intellectual Property of such
Credit Party in full force and effect, except such items of Intellectual
Property as are no longer deemed necessary for or material to the conduct of
the businesses of the Credit Parties in the reasonable business judgment of the
Credit Parties.  As of the Closing Date,
no litigation is pending or, to the knowledge of each Credit Party, threatened
which contains allegations respecting the validity, enforceability,
infringement or ownership of any of the Intellectual Property of any Credit
Party.  No Credit Party is in breach of
or default under the provisions of any of the foregoing, nor is there any
event, fact, condition or circumstance which, with notice or passage of time or
both, would constitute or result in a conflict, breach, default or event of
default under, any of the foregoing which reasonably could be expected to
result in, either individually or in the aggregate, a Material Adverse Effect.

 20

 

5.12        Permits; Labor

Each Credit Party is in
compliance with, and has, all Permits necessary or required by applicable law
or Governmental Authorities for the operation of its Business as presently
conducted and as proposed to be conducted, and for the execution, delivery and
performance by, and enforcement against, such Credit Party of each Loan
Document and Related Document, except where noncompliance, violation or lack
thereof reasonably could not be expected to result in, either individually or
in the aggregate, a Material Adverse Effect. 
No Credit Party (a) is in breach of or default under the provisions of
any of the foregoing, nor is there any event, fact, condition or circumstance
which, with notice or passage of time or both, would constitute or result in a
conflict, breach, default or event of default under, any of the foregoing which
reasonably could be expected to result in, either individually or in the
aggregate, a Material Adverse Effect, and (b) is nor has been involved in any
labor dispute, strike, walkout or union organization.

5.13        No Default; Solvency

No Default or Event of
Default exists.  Each Credit Party is
and, after giving effect to the transactions and the Indebtedness contemplated
by the Loan Documents and the transactions contemplated by the Related
Documents, will be, Solvent.

5.14        Insurance

All insurance policies of
the Credit Parties or otherwise relating to their Properties as of the Closing
Date are listed and described on Schedule 5.14.

5.15        Margin Stock; Regulated Entities; Tax Regulations; OFAC;
Patriot Act

(a)           The Credit Parties are not engaged in
the business of extending credit for the purpose of purchasing or carrying any “margin
stock” or “margin security” (within the meaning of Regulations T, U or X issued
by the Board of Governors of the Federal Reserve System), and no proceeds of
the Loans will be used to purchase or carry any margin stock or margin security
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or margin security.

(b)           No Credit Party or any Person
controlling any Credit Party is (a) an “investment company” within the meaning
of the Investment Company Act of 1940; or (b) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other Federal
or state statute or regulation limiting its ability to incur Indebtedness.

(c)           No Credit Party (i) is a Person whose
property or interest in property is blocked or subject to blocking pursuant to
Section 1 of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any dealings or
transactions prohibited by Section 2 of such executive order, or is otherwise
associated with any such Person in any manner violative of such Section 2, or
(iii) is a Person on the list of Specially Designated Nationals and Blocked
Persons or in violation of the limitations or prohibitions under any other U.S.
Department of Treasury’s Office of Foreign Assets Control regulation or
executive order (“OFAC”).

 21
 

 

(d)           No part of the proceeds of the Loans
will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order
to obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.

5.16        Broker’s or Finder’s Commissions

Except as set forth on Schedule
5.16, no broker’s, finder’s or placement fee or commission is or will be
payable to any broker, investment banker or agent engaged by any Credit Party
or any of its officers, directors or agents with respect to the transactions
contemplated by this Agreement, the other Loan Documents and the Related
Documents, except for fees payable to Agent and Lenders.

5.17        Disclosure

No Loan Document
or any other agreement, document, report, certificate or statement furnished to
Agent or any Lender by or on behalf of any Credit Party in connection with the
transactions contemplated by or pursuant to the Loan Documents, nor any representation
or warranty made by any Credit Party in any Loan Document, contains any untrue
statement of a material fact or omits to state any fact necessary to make the
factual statements therein taken as a whole not materially misleading as of the
time made or delivered in light of the circumstances under which it was made or
furnished.  There is no fact known to any
Credit Party which has not been disclosed to Agent and Lenders in writing which
reasonably could be expected to result in, either individually or in the
aggregate, a Material Adverse Effect.

5.18        Incorporation of Certain Representations and Warranties

As of the Closing Date,
(a) each of the representations and warranties contained in the Related
Documents made by any Credit Party is true and correct in all respects and (b)
to the knowledge of each Credit Party, each of the representations and
warranties contained in the Related Documents made by Persons other than a
Credit Party is true and correct in all respects.  The Credit Parties agree that, by this
reference, such representations and warranties contained in the Related
Documents delivered by the Credit Parties, without limiting any of the
representations and warranties otherwise contained herein or in any other Loan
Document, hereby are incorporated herein, mutatis
mutandis, for the benefit of Agent and Lenders.

5.19        Survival

Each Credit Party agrees
that the representations and warranties contained in the Loan Documents are
made with the knowledge and intention that Agent and Lenders are relying and
will rely thereon.  All such
representations and warranties will survive the execution and delivery of this
Agreement, the Closing and the making of any and all Advances and/or the
funding of the Term Loans.

 22
 

 

VI.           AFFIRMATIVE COVENANTS

Each Credit Party,
jointly and severally, covenants and agrees that, until the full performance
and satisfaction, and indefeasible payment in full in cash, of all the
Obligations (other than contingent indemnification Obligations to the extent no
claim giving rise thereto has been asserted) and the termination of all
Commitments and this Agreement:

6.1          Reporting, Collateral and Other Information

(a)           Reporting.  The Credit Parties shall maintain a system of
accounting established and administered in accordance with sound business
practices to permit the preparation of financial statements in conformity with
GAAP (provided that interim financial statements shall not be required to have
footnote disclosure and may be subject to normal year-end adjustments).  The Credit Parties shall furnish to Agent and
each Lender, at the times, for the periods and otherwise in accordance with the
terms of Exhibit C attached hereto, all statements (financial or otherwise),
budgets, projections, reports, listings, calculations, certificates, notices
and other materials described on such Exhibit C-1.

(b)           Collateral
Deliverables; Related Actions. 
Each Credit Party shall, and shall cause each of its Subsidiaries to
comply with each of the agreements, covenants and undertakings set forth in
Exhibit C-2, in accordance with the terms thereof, and represents and warrants
to the Lender Parties that the representations and warranties thereon contained
are true, correct and complete.

6.2          Conduct of Business; Maintenance of Existence and Assets

Each Credit Party shall,
and shall cause each of its Subsidiaries to:

(a)           engage solely in the Business as
heretofore conducted and engage therein in accordance with good business
practices customary to its industry, and preserve the goodwill and business of
the customers, suppliers and others having material business relations with it;

(b)           collect its Accounts in the Ordinary
Course of Business;

(c)           maintain and preserve all of its
Properties used or useful in its Business in good working order and condition
(normal wear and tear excepted and except as may be disposed of in accordance
with the terms of the Loan Documents) and from time to time make all necessary
repairs, renewals and replacements thereof;

(d)           maintain and preserve in full force
and effect its organizational existence and good standing under the laws of its
state or jurisdiction of incorporation, organization or formation, as
applicable;

(e)           maintain and preserve in full force
and effect all Permits and qualifications and remain in good standing except as
would not reasonably be expected to result in, either individually or in the
aggregate, a Material Adverse Effect; and

 23
 

 

(f)            maintain, comply with and keep in
full force and effect and renew its Intellectual Property the non-preservation,
non-compliance or loss of which or failure to maintain reasonably could be
expected to result, either individually or in the aggregate, in a Material
Adverse Effect.

6.3          Compliance with Legal and Other Obligations

Each Credit Party shall,
and shall cause each of its Subsidiaries to:

(a)           comply with all laws, statutes, rules, regulations, ordinances and
tariffs of all Governmental Authorities applicable to it or its Business,
Properties or operations, except where the failure to comply would not
reasonably be expected to result in, either individually or in the aggregate, a
Material Adverse Effect;

(b)           pay all taxes, assessments, fees,
governmental charges, claims for labor, supplies, rent and all other
obligations, lawful claims or liabilities of any kind or nature, except
obligations, liabilities and claims being contested in good faith by
appropriate proceedings diligently prosecuted which stay the enforcement of any
Lien and against which adequate reserves are being maintained in accordance
with GAAP;

(c)           subject to any subordination
provisions in favor of the Lender Parties and/or other restrictions herein set
forth, perform in accordance with its terms each contract, agreement or other
arrangement to which it is a party or by which it or any of the Collateral is
bound, except where the failure to so perform would not reasonably be expected
to result in, either individually or in the aggregate, a Material Adverse
Effect;

(d)           pay and perform, as the same shall
become due and payable or be required to be performed, all of its obligations,
liabilities and Indebtedness, but subject to any subordination provisions
contained herein and/or in any instrument or agreement evidencing or pertaining
to such obligations, liabilities and Indebtedness, except where the failure to
so pay or perform would not reasonably be expected to result in, either
individually or in the aggregate, a Material Adverse Effect; and

(e)           properly file all reports required to
be filed with any Governmental Authority, except where the failure to file
would not reasonably be expected to result in a Material Adverse Effect.

6.4          Insurance

Each Credit Party shall
keep all of its insurable Properties adequately insured against losses, damages
and hazards as are customarily insured against by businesses engaging in
similar activities or the Business or owning similar Properties and at least
the minimum amount required by applicable law and any other agreement to which
such Credit Party is a party or pursuant to which such Credit Party provides
any services, including, without limitation, liability, property and business
interruption insurance, as applicable;
provided the amount of business interruption insurance shall not be less than
$1,000,000 from the Closing Date through September 30, 2006 and at all times
$3,000,000 thereafter; and
maintain general liability insurance at all times against liability on account
of damage to Persons and Property having such

 24
 

 

limits,
deductibles, exclusions and co-insurance and other provisions as are customary
for a business engaged in activities similar to those of such Credit Party; all
of the foregoing insurance policies and coverage levels to (i) be satisfactory
to Agent in its Permitted Discretion, (ii) name Agent, for the benefit of the
Lender Parties, as loss payee/mortgagee in respect of property damage and
casualty insurance, additional insured in respect of liability insurance and
assignee in respect of business interruption insurance, and (iii) expressly
provide that they cannot be altered, amended, modified, canceled or terminated
without at least thirty (30) days’ prior written notice to Agent from the
insurer, and that they inure to the benefit of Agent, for the benefit of the
Lender Parties, notwithstanding any action or omission or negligence of or by
such Credit Party, or any insured thereunder. 
Upon request of Agent or any Lender, Borrower shall furnish to Agent,
with sufficient copies for each Lender, at reasonable intervals (but not more
than once per calendar year) a certificate of a Responsible Officer on behalf of
Borrower (and, if requested by Agent, any insurance broker of Borrower) setting
forth the nature and extent of all insurance maintained by Borrower and its
Subsidiaries in accordance with this Section 6.4.  Unless Borrower provides Agent with evidence
of the insurance coverage required by this Agreement, Agent may purchase
insurance at Borrower’s expense to protect Agent’s and Lenders’ interests in
the Credit Parties’ Properties.  This
insurance may, but need not, protect the Credit Parties’ interests.   The coverage that Agent purchases may not
pay any claim that any Credit Party makes or any claim that is made against any
Credit Party in connection with said Property. 
Borrower may later cancel any insurance purchased by Agent, but only
after providing Agent with satisfactory evidence to Agent, and written
acknowledgment thereof, that Borrower has obtained insurance as required by
this Agreement.  If Agent purchases
insurance, Borrower shall be responsible for the costs of that insurance,
including interest and any other charges Agent may impose in connection with
the placement of insurance, until the effective date of the cancellation or
expiration of the insurance. The costs of the insurance shall be added to the
Obligations and payable on demand.  The costs
incurred by Agent of the insurance may be more than the costs of insurance
Borrower may be able to obtain on its own.

6.5          Inspection

Each Credit Party shall
permit the representatives of Agent from time to time during normal business
hours upon reasonable notice to (i) visit and inspect any of such Credit Party’s
offices or properties or any other place where Collateral is located to inspect
the Collateral and/or to examine and/or to audit all of such Credit Party’s
books of account, records, reports and other papers, (ii) make copies and
extracts therefrom and (iii) discuss such Credit Party’s Business, operations,
prospects, properties, assets, liabilities, condition and/or Accounts with its
officers and independent public accountants (and by this provision such
officers and accountants are authorized to discuss the foregoing); provided,
however, that (x) Borrower shall not be obligated to reimburse Agent for more
than two (2) visits, inspections, examinations and audits under the foregoing
clause (i) conducted during any fiscal year while no Event of Default exists
(it being agreed and understood that the Borrower shall be obligated to
reimburse Agent for all such visits, inspections, examinations and audits
conducted while any Event of Default exists), and (y) no notice shall be
required to do any of the foregoing if any Event of Default has occurred and is
continuing.

 25
 

 

6.6          Use of Proceeds

Borrower, a provider of
health-related content and applications, educational software, and benefits
management and benefits brokerage solutions for the educational, healthcare,
benefits, human resources and consumer markets, shall use the proceeds from the
Term Loans and Advances under the Revolving Facility solely for paying costs,
fees and expenses incurred in financing the acquisition of the outstanding
Capital Stock of Online Benefits, a provider of online healthcare content and
benefits management, for the purchase or generation from time to time of
additional receivables after the
Closing Date and/or for any other lawful purposes not otherwise prohibited by
the Loan Documents.

6.7          Further Assurances; Post Closing  Deliveries

(a)           Each Credit Party shall, and shall
cause each of its Subsidiaries to, within five (5) Business Days after demand
by Agent or Requisite Lenders, take such further actions, obtain such consents
and approvals and duly execute and deliver such further agreements,
assignments, instructions or documents as may be requested in their Permitted
Discretion in order to carry out the purposes, terms and conditions of the Loan
Documents and the transactions contemplated thereby, whether before, at or
after the performance and/or consummation of the transactions contemplated
hereby or the occurrence of any Default or Event of Default.

(b)           Without limiting any other provision
of any Loan Document, each Credit Party shall, and shall cause each of its
Subsidiaries to, execute and deliver, or cause to be executed and delivered, to
Agent all agreements, instruments, documents and other deliveries, and take or
cause to be taken all actions, and otherwise perform, observe and comply with
all obligations and covenants, set forth on Schedule 6.7 hereto within
the applicable time periods set forth thereon.

(c)           Each Credit Party shall, and shall
cause its Subsidiaries to, (i) execute, deliver and/or record any and all
financing statements, continuation statements, stock powers, instruments and
other documents, or cause the execution, delivery an/or recording of any and
all of the foregoing, that are necessary or required under law or otherwise
requested by Agent to create, perfect or preserve the pledge of the Collateral
to Agent and the Lien on the Collateral in favor of Agent, for the benefit of
the Lender Parties (and each Credit Party irrevocably grants Agent the right,
at Agent’s option, to file any or all of the foregoing), and (ii) defend the
Collateral and the Lien in favor of Agent, for the benefit of the Lender
Parties, against all claims and demands of all Persons (other than Permitted
Liens).  Without limiting the generality
of the foregoing and except as otherwise approved in writing by Requisite
Lenders, (i) each Credit Party shall, and shall cause its Subsidiaries to,
guarantee the Obligations of Borrower and grant to Agent, for the benefit of
the Lender Parties, a Lien on all of its Property to secure such guarantee, and
(ii) Borrower shall grant a first priority Lien on all of its Property and,
without limiting the foregoing, pledge the Capital Stock of each of its
Subsidiaries, in each case to Agent, for the benefit of the Lender Parties, to
secure the Obligations.  In furtherance
thereof, each Subsidiary of Borrower shall execute a Joinder Agreement and
become a party to such of the Loan Documents, including this Agreement, and as
an additional Guarantor or in such other capacity as Agent shall elect, and the
Credit Parties shall deliver to Agent an opinion of counsel,

 26
 

 

in form and
substance satisfactory to Agent in its Permitted Discretion, with respect to
such Joinder Agreement and any documents executed in connection therewith.

(d)           Concurrently with (i) the execution
by any Credit Party, as lessee, of any lease pertaining to real property, such
Credit Party shall deliver to Agent (A) an executed copy thereof, (B) at the
option of Agent, either a leasehold mortgage upon or a collateral assignment of
such lease in favor of Agent, in either case in form and substance acceptable
to Agent in its Permitted Discretion, (C) if requested by Agent, a Landlord
Waiver and Consent from the Landlord under such lease, (D) at the option of
Agent, a lender’s policy of title insurance, in such form and amount and
containing such endorsements as shall be satisfactory to Agent in its Permitted
Discretion, insuring the Lien of such leasehold mortgage or collateral
assignment of lease, together with a survey of such real property, which survey
shall be of a recent enough date and in sufficient detail so as to permit the
title company issuing such policy to eliminate any survey exceptions to such
policy and (E) such other documents and assurances with respect to such real
property as Agent may require in its Permitted Discretion, and (ii) the
execution by any Credit Party of any contract relating to the acquisition by
such Credit Party of real property, an executed copy of such contract and,
concurrently with the closing of the purchase of such real property, (A) if
requested by Agent, a first mortgage or deed of trust in favor of Agent, for
the benefit of the Lender Parties, on such real property, in form and substance
acceptable to Agent in its Permitted Discretion, (B) if requested by Agent, a
lender’s policy of title insurance, in such form and amount and containing such
endorsements as shall be satisfactory to Agent in its Permitted Discretion, (C)
if requested by Agent, a survey of such real property, which survey shall be of
a recent enough date and in sufficient detail so as to permit the title company
issuing such policy to eliminate any survey exceptions to such policy, (D) if
requested by Agent, a recent environmental assessment of such real property by
a third party acceptable to Agent, and the results thereof shall be
satisfactory to Agent in its Permitted Discretion, and (E) such other documents
and assurances with respect to such real property as Agent may require in its
Permitted Discretion.

(e)           Each Credit Party shall, and shall
cause its Subsidiaries to, upon the exercise by Agent, or any Lender of any
power, right, privilege or remedy pursuant to any Loan Document or under
applicable law or at equity which requires any consent, approval, registration,
qualification or authorization of any Person (including, without limitation,
any Governmental Authority), execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments and other documents
that may be so required for such consent, approval or authorization.  Without limiting the foregoing, upon the
exercise by Agent, or any Lender of any right or remedy under any Loan Document
which requires any consent, approval or registration with, consent,
qualification or authorization by, any Governmental Authority or other Person,
each Credit Party shall execute and deliver, or cause the execution and
delivery of, all applications, certificates, instruments and other documents
that Agent, or any Lender may be required to obtain for itself or on its behalf
for such consent, approval or authorization.

VII.         NEGATIVE COVENANTS

Each Credit Party,
jointly and severally, covenants and agrees that, until the full performance
and satisfaction, and indefeasible payment in full in cash, of all Obligations
(other

 27
 

 

than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) and the termination of all Commitments and this Agreement:

7.1          Financial Covenants

No Credit Party shall,
and no Credit Party shall cause or permit any of its Subsidiaries to, violate
any of the financial covenants set forth in Exhibit B-1, calculated and
determined as of the respective dates and for the respective periods set forth
thereon.

7.2          Indebtedness

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, create,
incur, assume, suffer to exist, or otherwise become or remain directly or
indirectly liable with respect to, any Indebtedness, except the following
(collectively, “Permitted Indebtedness”):

(a)           Indebtedness of the Credit Parties
evidenced by the Loan Documents;

(b)           any Indebtedness of the Credit
Parties existing on the Closing Date and set forth on Schedule 7.2
hereto, including extensions and replacements thereof provided that the
principal amount of such Indebtedness as of the date of such extension or
replacement is not increased and the maturity and weighted average life thereof
are not shortened;

(c)           Indebtedness of the Credit Parties constituting
Capital Lease Obligations or Purchase Money Debt not to exceed $750,000 in the aggregate at any time outstanding,
provided that no Default or Event of Default exists and is continuing at the
time any such Indebtedness is incurred or would be created by the incurrence of
any such Indebtedness;

(d)           inter-company unsecured Indebtedness
arising from loans made by Borrower to its domestic Wholly-Owned Subsidiaries
that are Credit Parties to fund working capital requirements of such
Subsidiaries in the Ordinary Course of Business; provided, that, that upon the
request of Agent, such Indebtedness shall be evidenced by promissory notes
having terms (including subordination terms) satisfactory to Agent, the sole
originally executed counterparts of which shall be pledged and delivered to
Agent, for the benefit of the Lender parties, as security for the Obligations;

(e)           Subordinated Debt of Borrower and its Subsidiaries not to exceed
$1,000,000 in the aggregate principal outstanding at any time to the extent such
Indebtedness has remains subject to the terms and conditions of the applicable
Subordination Agreement;

(f)            other unsecured Indebtedness of
Borrower and its Subsidiaries not to exceed $250,000 in the aggregate
outstanding at any time;

(g)           the eBenX Obligations, provided the
principal amount thereof does not exceed $1,500,000 at any time.

 28
 

 

7.3          Liens

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, directly
or indirectly, make, create, incur, assume or suffer to exist any Lien upon,
in, against or with respect to any part of, or any pledge of, any of the
Collateral or any of its other Property or Capital Stock, whether now owned or
hereafter acquired, except the following (collectively, “Permitted
Liens”):

(a)           Liens created by the Loan Documents
or otherwise arising in favor of Agent, for the benefit of the Lender Parties;

(b)           Liens imposed by law for taxes,
assessments or charges of any Governmental Authority (i) that are not yet due
or (ii) which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained by such Credit Party or Subsidiary in accordance with GAAP
and, with respect to this clause (ii), all such Liens secure claims not
exceeding $100,000 in the aggregate at any time;

(c)           statutory Liens of landlords,
carriers, warehousemen, mechanics and/or materialmen and other similar Liens
imposed by law or that arise by operation of law in the Ordinary Course of Business
that, in any such case, are only for amounts not yet due or which are being
contested in good faith by appropriate proceedings (which have the effect of
preventing the forfeiture or sale of the Property subject thereto) and with
respect to which adequate reserves or other appropriate provisions are being
maintained by such Person in accordance with GAAP;

(d)           Liens (other than any Lien imposed by
ERISA) incurred or deposits or pledges made in the Ordinary Course of Business
(including, without limitation, surety bonds and appeal bonds) in connection
with workers’ compensation, unemployment insurance and other types of social
security benefits or to secure the performance of tenders, bids, leases, trade
contracts, statutory obligations and other similar obligations (other than for
the repayment of Indebtedness);

(e)           (i) purchase money Liens and Liens
arising under Capital Leases securing Indebtedness permitted under Section
7.2(c); provided, that (i) any such Lien attaches only to the Property acquired
with the proceeds of such Indebtedness, (ii) any such Lien attaches to the
subject Property concurrently with or within twenty (20) days after the
acquisition thereof, and (iii) the principal amount of the Indebtedness secured
thereby does not exceed 100% of the value of such Property;

(f)            any attachment or judgment Lien
provided that the enforcement of such Lien is effectively stayed and such Lien
secures claims not otherwise constituting an Event of Default;

(g)           easements, rights of way,
restrictions, zoning ordinances, reservations, covenants and other similar
charges, title exceptions or encumbrances relating to real Property of the
Credit Parties incurred in the Ordinary Course of Business that, either
individually or in the aggregate, are not substantial in amount, do not
interfere in any material respect with the use of

 29
 

 

the Property
affected or the ordinary conduct of the Business of the Credit Parties and do
not result in material diminution in value of the Property subject thereto;

(h)           Liens disclosed on Schedule 7.3
as of the Closing Date; and

(i)            Liens granted under the eBenX Loan
Documents as in effect on the Closing Date.

7.4          Consolidations, Mergers and Investments

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, directly
or indirectly, (i) merge, liquidate, amalgamate or consolidate with or into, or
convey, transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) any of its Property to or in favor of, any Person,
(ii) purchase, own, hold, invest in or otherwise acquire any obligations or
Capital Stock of, or any other interest in, any Person (including the
establishment or creation of any Subsidiary) or any joint venture, or otherwise
consummate or commit to make any Acquisition (including by way of merger,
consolidation or other combination), (iii) purchase, own, hold, invest in or
otherwise acquire any “investment property” (as defined in the UCC), or (iv)
make, permit to exist or commit to make any loans, advances or extensions of
credit to or for the benefit of any Person, or assume, guarantee, indemnify,
endorse, contingently agree to purchase or otherwise become liable for or upon
or incur any obligation of, any Person (the items described in the foregoing clauses
(ii), (iii) and (iv) sometimes are referred to as “Investments”),
except:

(a)           Investments created by the Loan
Documents;

(b)           trade credit extended by Borrower or
any of its Subsidiaries in the Ordinary Course of Business;

(c)           Investments constituting
inter-company Indebtedness to the extent permitted under Section 7.2(e);

(d)           loans to employees and advances by
Borrower for business travel and similar temporary advances made in the
Ordinary Course of Business to officers, directors and employees, not to exceed
$25,000 in the aggregate at any time outstanding;

(e)           the endorsement of negotiable
instruments for deposit or collection or similar transactions in the Ordinary
Course of Business;

(f)            Investments in cash and Cash
Equivalents with respect to which Agent, for the benefit of the Lender Parties,
has a first priority and perfected Lien, as security for the Obligations;

(g)           Investments in securities (whether
debt or equity) received by Borrower or any of its Subsidiaries in connection
with the bankruptcy or reorganization of any customer or supplier of Borrower
or such Subsidiary;

 30

 

(h)           Borrower and its Subsidiaries may
consummate transactions otherwise permitted under Sections 7.5, 7.7 and 7.8;

(i)            upon not less than ten (10) Business
Days’ prior written notice to Agent, any Wholly-Owned Subsidiary of Borrower
may merge with, or dissolve or liquidate into, or transfer its Property to a domestic Wholly-Owned Subsidiary of
Borrower that is a Credit Party, provided that, with respect to any such
merger, such domestic
Wholly-Owned Subsidiary shall be the continuing or surviving entity; and

(j)            Permitted Acquisitions.

7.5          Restricted Payments

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, (i)
declare, pay or make any dividend or distribution of cash, securities or other
Property on any shares of its Capital Stock, (ii) apply any of its Property to
the acquisition, redemption or other retirement of any of its Capital Stock,
(iii) make any payment or prepayment of principal of, premium, if any,
interest, fees, redemption, exchange, purchase, retirement, defeasance, sinking
fund or similar payment with respect to, any Subordinated Debt or (iv) pay any
management, service, consulting, non-competition or similar fee or any
compensation to any Affiliate of any Credit Party or any officer, director or employee
of any Credit Party or any Affiliate of any Credit Party (the items described
in clauses (i), (ii), (iii) and (iv) above sometimes are referred to herein as “Restricted Payments”). 
Notwithstanding the foregoing:

(a)           any Wholly-Owned Subsidiary of Borrower
may declare and pay dividends and other distributions to Borrower or to any
other domestic Wholly-Owned
Subsidiary of Borrower that is a Credit Party;

(b)           Borrower may declare and make
dividend payments or other distributions payable solely in Permitted
Securities;

(c)           Borrower may, upon termination of an
employee of any Credit Party, redeem for cash any Capital Stock of Borrower
owned by such employee, provided, that all of the following conditions are
satisfied with respect to each such distribution:

(i)            no
Default or Event of Default has occurred and is continuing or would arise as a
result of such redemption;

(ii)           after
giving effect to such redemption, the Credit Parties are in compliance on a pro
forma basis with the financial covenants referenced in Section 7.1(a)
(recomputed for the most recent period for which financial statements have been
delivered in accordance with the terms hereof after giving effect thereto);

(iii)          the
aggregate amount paid in respect of such redemptions shall not exceed $250,000 in any fiscal year of Borrower or $500,000
during the Term; and

(iv)          after
giving effect to such redemption, not less than $500,000 is readily available
for borrowing under the Revolving Facility.

 31
 

 

(d)           Borrower may make payments on or in
respect of Subordinated Debt to the extent otherwise permitted under the
applicable Subordination Agreement; and

(e)           the Credit Parties may pay (i)
reasonable compensation to officers and employees for actual services rendered
to Borrower and its Subsidiaries in the Ordinary Course of Business, and (ii)
directors’ fees and reimbursement of actual out-of-pocket expenses incurred in
connection with attending board of director meetings not to exceed in the
aggregate, with respect to all such items described in the foregoing clause
(ii), $50,000 in any fiscal year of Borrower.

7.6          Transactions with Affiliates

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, enter
into or consummate any transaction with any Affiliate of such Person other
than:

(a)           as expressly permitted by, and
subject to the terms of, this Agreement;

(b)           compensation and employment
arrangements with employees in the Ordinary Course of Business and to the
extent otherwise permitted under Section 7.5(e); and

(c)           other transactions pursuant to
written agreements between a Credit Party or its Subsidiary and any such
Affiliates that are entered into in the Ordinary Course of Business and
pursuant to the reasonable requirements of the business of such Credit Party; provided,
that such transactions and agreements are on fair and reasonable terms not less
favorable to such Person than would be obtained in an arm’s length transaction
between unrelated parties of equal bargaining power.

7.7          Transfer of Assets

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, directly
or indirectly, sell, lease, transfer, convey, assign or otherwise dispose of
(whether in a single transaction or a series of transactions) any Property or
any interest therein, issue or sell any Capital Stock, or agree to do any of
the foregoing, except that:

(a)           Borrower and its Subsidiaries may
sell obsolete, worn out, replaced or excess equipment that is no longer needed
in the Ordinary Course of Business and has a book value not exceeding $250,000
in the aggregate in any fiscal year;

(b)           Borrower and its Subsidiaries may
sell inventory and use cash in
the Ordinary Course of Business;

(c)           Borrower and its Subsidiaries may
sell other Properties not specifically permitted otherwise in this Section 7.7
(other than Capital Stock of a Credit Party) to the extent that (i) Borrower or
such Subsidiary complies with the mandatory prepayment provisions of Section
2.9(c) in connection therewith (to the extent the proceeds thereof are not
reinvested in accordance with the terms of such Section 2.9(c)), (ii) such sale
is for fair market value and the aggregate fair market value of all assets so
sold does not exceed $250,000 in any fiscal year,

 32
 

 

(iii) no Default
or Event of Default exists or otherwise would result therefrom and (iv) the
sole consideration therefor received by Borrower or such Subsidiary is cash;

(d)           Borrower may issue Permitted
Securities provided that Borrower complies with the mandatory prepayment
provisions of Section 2.9(c) in connection therewith;
and

(e)           transactions otherwise permitted
under Sections 7.3, 7.4 and 7.5 to the extent permitted thereunder.

7.8          Contingent Obligations

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to, enter
into, create, assume, suffer to exist or incur any Contingent Obligations or
assume, guarantee, indemnity, endorse, contingently agree to purchase or
otherwise become liable for or upon or incur any obligation of any Person,
except:

(a)           Borrower or any of its Subsidiaries
may enter into guarantees of Indebtedness of Borrower or any such Subsidiary
otherwise permitted under Section 7.2;

(b)           Borrower and its Subsidiaries may
endorse checks for collection in the Ordinary Course of Business;

(c)           Borrower may enter into unsecured Interest Rate Agreements in the
Ordinary Course of Business for bona fide hedging purposes and not for
speculation with Agent’s prior written consent;

(d)           Contingent Obligations of Borrower
and its Subsidiaries incurred in the Ordinary Course of Business with respect
to surety and appeal bonds, performance bonds and other similar obligations; and

(e)           ordinary Contingent Obligations of
Borrower and its Subsidiaries arising under indemnity agreements to title
insurers to cause such title insurers to issue to Agent title insurance
policies.

7.9          Organizational Documents; Accounting Changes; Use of
Proceeds; Insurance; Business

No Credit Party shall,
and no Credit Party shall permit or cause any of its Subsidiaries to:

(a)           amend, modify, restate or change any
of its Organizational Documents in any material respect or in any respect
adverse to Agent or Lenders, or, without the prior written consent of Agent
(but without limiting the prohibitions on mergers involving any Credit Party
otherwise permitted under Section 7.4(h)), reincorporate or reorganize itself
under the laws of any jurisdiction other than the jurisdiction in which it is
incorporated or organized as of the Closing Date;

(b)           make any significant change in
accounting treatment or reporting practices, except as required by GAAP, or
change its fiscal year;

 33
 

 

(c)           use any proceeds of any Loans,
directly or indirectly, for “purchasing” or “carrying” “margin stock” as
defined in Regulations T, U or X of the Board of Governors of the Federal
Reserve System, or to repay or refinance Indebtedness incurred to so “purchase”
or “carry” “margin stock,” or otherwise in violation of applicable law or this
Agreement;

(d)           amend, modify, restate or change any
insurance policy in any material respect (including, without limitation, any
increase in the amount of any deductibles payable by the Credit Parties under
any such insurance policy or any change in the scope of coverage, coverage
amount, beneficiaries, loss payees and/or additional insureds), except changes
in the term of coverage in connection with renewals thereof in the Ordinary
Course of Business; or

(e)           engage, directly or indirectly, in
any business other than the Business.

7.10        Related Documents and Subordinated Debt

(a)           No Credit Party shall, and no Credit
Party shall permit or cause any of its Subsidiaries to, (i) amend, supplement,
waive or otherwise modify any of the terms or provisions of, and will not fail
to enforce or diligently pursue its remedies under, any Related Document to
which it is a party, as in effect on the Closing Date, in any manner adverse to
Agent or any Lender or which reasonably could be expected to result in a
Material Adverse Effect, or (ii) take or fail to take any other action under
any Related Document to which it is a party that reasonably could be expected
to result in a Material Adverse Effect.

(b)           No Credit Party shall, and no Credit
Party shall permit or cause any of its Subsidiaries to, directly or indirectly,
amend, supplement or otherwise modify the terms of any Subordinated Debt if
such amendment, supplement or modification is prohibited by the applicable
Subordination Agreement.

(c)           No Credit Party shall amend,
supplement or otherwise modify any of the terms or provisions of the eBenX Loan
Documents as in effect on the Closing Date.

7.11        Negative Pledges

Except as a result
of the Loan Documents, no Credit Party shall, and no Credit Party shall permit
or cause any of its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any consensual
restriction or encumbrance of any kind on the ability of any such Subsidiary to
pay dividends or make any other distribution on any of such Subsidiary’s
Capital Stock or to pay fees or make other payments and distributions to
Borrower or any of its Subsidiaries.  No
Credit Party shall, and no Credit Party shall permit or cause any of its
Subsidiaries to, directly or indirectly, enter into, assume or become subject
to any contract or agreement that prohibits or otherwise restricts the
existence of any Lien upon any of its Property in favor of Agent, for the
benefit of the Lender Parties, whether now owned or hereafter acquired except
in connection with any document or instrument governing Liens related to
Purchase Money Debt and Capital Leases which, in each case, otherwise
constitute Permitted Liens.

 34
 

 

7.12        Certain Specific Agreements

(a)           Neither any Credit Party nor any
Subsidiary of any Credit Party (i) will be or become a Person whose Property or
interests in Property are blocked or subject to blocking pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit or Support
Terrorism (66 Fed. Reg. 49079(2001), (ii) will engage in any in any dealings or
transactions prohibited by Section 2 of such executive order, or otherwise be
associated with any such Person in any manner violative of Section 2 of such
executive order, or (iii) otherwise will become a Person on the list of
Specially Designated Nationals and Blocked Persons or in violation of the
limitations or prohibitions under any other OFAC regulation or executive order.

(b)           No Credit Party shall enter into any
agreement (excluding shrink-wrap licenses of mass-marketed,
commercially-available software) which restricts or prohibits the grant of a
security interest therein in favor of Agent or any change of control of
ownership of the Credit Parties.

7.13        Shareholder Blocking Rights

No Credit Party shall
issue or permit to be outstanding any Capital Stock which grants or provides
any direct or indirect owner or holder thereof any Shareholder Blocking Rights.

VIII.        EVENTS OF DEFAULT

8.1          Events of Default

The occurrence of any one
or more of the following shall constitute an “Event
of Default”:

(a)           any Credit Party shall fail to pay
when due and payable (i) any principal or premium payment provided for or
required under this Agreement and/or the Notes, or (ii) within two (2) Business
Days after the same shall become due and payable, any interest, fees or other
Obligations (other than principal or
premium) provided for or required under this Agreement or the other Loan
Documents, in any such case described in the foregoing clause (i) or (ii),
whether on any payment date, at maturity, by reason of acceleration, by notice
of intention to prepay, by required prepayment or otherwise); provided, that, the foregoing clause (ii)
notwithstanding, if any Credit Party fails to make regularly scheduled payments
of interest when due and payable more than twice in any year (without giving
effect to any grace or cure period set forth in the foregoing clause (ii)), an
Event of Default automatically shall be deemed to occur on the third such
instance during such year;

(b)           any representation, statement or
warranty made or deemed made by any Credit Party, or any other Person (other
than Agent or any Lender) in any Loan Document or in any other certificate,
document, report or opinion delivered pursuant to any Loan Document to which it
is a party shall not be true and correct in all material respects or shall have
been false or misleading in any material respect on the date when made or
deemed to have been made (except to the extent already qualified by
materiality, in which case it shall have been true and correct in

 35
 

 

all respects and
shall not have been false or misleading in any respect on the date when made or
deemed to have been made);

(c)           any Credit Party or other Person
party thereto (other than Agent or any Lender) shall be in violation, breach or
default of, or shall fail to perform, observe or comply with, any covenant,
obligation or agreement set forth in, or any event of default occurs under, any
Loan Document and such violation, breach, default, event of default or failure
shall not be cured within the applicable period, if any, set forth in the
applicable Loan Document; provided that, with respect to the affirmative
covenants set forth in Article VI and the affirmative covenants set forth in
the Conversion and Registration Rights Agreement (other than Sections 6.1, 6.2,
6.3(b), 6.4, 6.5 or 6.7(b), and Sections 2(f), 2(g), 6, 7 and 8 of the
Conversion and Registration Rights Agreement, for which no cure period shall
apply), any such violation, breach, default, event of default or failure shall
result in any Event of Default only if it remains uncured for thirty (30)
calendar days after the earlier of (i) Receipt by such Person of written notice
of such violation, breach, default, event of default or failure and (ii) the
time at which such Person or any authorized officer thereof knew or became
aware, or should reasonably have known or been aware, of such violation,
breach, default, event of default or failure;

(d)           (i) any of the Loan Documents ceases
for any reason to be in full force and effect or (ii) any Lien created under
any Loan Documents ceases to constitute a valid first priority perfected Lien
(other than with respect to Property subject only to Priority Permitted Liens)
on the Collateral in accordance with the terms thereof;

(e)           one or more judgments or decrees is
or are rendered against the Credit Parties, any Subsidiary of any Credit Party
or any of them in an amount in excess of $250,000 individually or $500,000 in
the aggregate (excluding judgments and decrees to the extent covered by third
party insurance of such Persons where such coverage has been acknowledged by
the insurer), which is/are not satisfied, stayed, vacated or discharged of
record within thirty (30) calendar days of being rendered;

(f)            (i) any default or breach (other
than any default or breach of the eBenX Loan Documents), occurs, which is not
cured within any applicable grace or cure period, (x) in any payment of amounts
due in excess of $250,000, either individually or in the aggregate, with
respect to any Indebtedness or other obligations (other than the Obligations)
of any Credit Party or any Subsidiary of any Credit Party, either individually
or in the aggregate or (y) in the performance, observance or fulfillment of any
provision contained in any agreement, contract, document or instrument to which
any Credit Party or any Subsidiary of any Credit Party is a party or to which
any of its Property is subject or bound (1) under or pursuant to which any
Indebtedness or other obligations in excess of $250,000, either individually or
in the aggregate, was issued, created, assumed, guaranteed or secured and such
default or breach permits the holder of any such Indebtedness or obligations to
accelerate the maturity thereof, or (2) that is between any Credit Party and Agent
or any Lender or any Affiliate of Agent or any Lender (other than the Loan
Documents); or (ii) any Indebtedness or other obligations of any Credit Party
in excess of $250,000, either individually or in the aggregate, is declared to
be due and payable or is required to be prepaid prior to the stated maturity
thereof;

 36
 

 

(g)           any Credit Party or any Subsidiary of
any Credit Party shall (i) be unable to pay its debts generally as they become
due, (ii) file a petition under any insolvency statute, (iii) make a general
assignment for the benefit of its creditors, (iv) commence a proceeding for the
appointment of a receiver, trustee, liquidator or conservator of itself or of
the whole or any substantial part of its Property or shall otherwise be
dissolved or liquidated, or (v) file a petition seeking reorganization or
liquidation or similar relief under any Debtor Relief Law or any other
applicable law or statute;

(h)           (i) a court of competent jurisdiction
shall (A) enter an order, judgment or decree appointing a custodian, receiver,
trustee, liquidator or conservator of any Credit Party or any Subsidiary of any
Credit Party or the whole or any substantial part of any such Person’s
Properties, which shall continue unstayed and in effect for a period of sixty
(60) calendar days, (B) approve a petition filed against any Credit Party or
any Subsidiary of any Credit Party seeking reorganization, liquidation or
similar relief under the any Debtor Relief Law or any other applicable law or
statute, which is not dismissed within sixty (60) calendar days, or (C) under
the provisions of any Debtor Relief Law or other applicable law or statute,
assume custody or control of any Credit Party or any Subsidiary of any Credit
Party or of the whole or any substantial part of any such Person’s Properties,
which is not irrevocably relinquished within sixty (60) calendar days, or (ii)
there is commenced against any Credit Party or any Subsidiary of any Credit
Party any proceeding or petition seeking reorganization, liquidation or similar
relief under any Debtor Relief Law or any other applicable law or statute (A)
which is not unconditionally dismissed within sixty (60) calendar days after
the date of commencement or (B) in respect of which such Credit Party or any
Subsidiary of any Credit Party takes any action to indicate its approval of or
consent to any such proceeding or petition;

(i)            any Change of Control or any
Material Adverse Effect occurs;

(j)            Agent or any Lender receives any
evidence that any Credit Party has directly or indirectly been engaged in any
type of activity which, in Agent’s Permitted Discretion, could result in
forfeiture of any material portion of Collateral to any Governmental Authority,
which shall have continued unremedied for a period of twenty (20) calendar days
after written notice from Agent;

(k)           uninsured damage to, or uninsured
loss, theft or destruction of, any portion of the Collateral occurs that
exceeds $250,000 in the aggregate;

(l)            (i) any Credit Party is (A)
criminally indicted or convicted of a felony or (B) charged under any law that
could lead to forfeiture of any material portion of Collateral, or (ii) any
director or senior officer of any Credit Party is (A) criminally indicted or
convicted of a felony for fraud or dishonesty in connection with the Business
or (B) charged under any law that could lead to forfeiture of any material
portion of Collateral;

(m)          the issuance of any process for levy,
attachment or garnishment or execution upon or any judgment against any Credit
Party or any of its material Property or against any material portion of the
Collateral, in any case which is not satisfied, stayed, vacated, dismissed or
discharged within thirty (30) calendar days of being issued or executed;

 37
 

 

(n)           (i) the subordination provisions of
any Subordination Agreement and/or the subordination provisions contained in or
otherwise pertaining to any agreement or instrument governing any Subordinated
Debt shall for any reason be revoked or invalidated, or otherwise cease to be
in full force and effect, or (ii) any Person shall contest in any manner the
validity or enforceability thereof, deny that it has any further liability or
obligation thereunder, or take any action in violation thereof or fail to take
any action required by the terms thereof, or (iii) the Obligations, for any
reason shall not have the priority contemplated by this Agreement, the
Subordination Agreements or such subordination provisions;

(o)           an “Event of Default” under any other
Loan Document occurs (to the extent, with respect to any such other Loan
Document, not otherwise constituting an Event of Default hereunder); or

(p)           any Credit Party is enjoined,
restrained or in any way prevented by the order of any court or other
Governmental Authority from conducting all or any part of its business for more
than fifteen (15) calendar days which is reasonably likely to be, have or
result in a Material Adverse Effect.

8.2          Effect of Event of Default

If an Event of
Default occurs and is continuing, notwithstanding any other provision of any
Loan Document, (a) Agent may (and at the request of Requisite Lenders, shall),
by notice to Borrower (i) terminate Lenders’ Commitments and obligations
hereunder, whereupon the same shall immediately terminate, and (ii) declare all
or any of the Loans and/or any Notes, all interest thereon and all other
Obligations to be due and payable immediately (provided, that in the case of
any Event of Default under Section 8.1(g) or (h), all of the foregoing
automatically and without any act by Agent or any Lender shall be due and
payable immediately and Lenders’ Commitments and obligations hereunder shall
immediately terminate; in each case without presentment, demand, protest or
notice of any kind, all of which hereby are expressly waived by the Credit
Parties), and (b) without limiting any of the other rights and/or remedies of
Agent and Lenders, no action permitted to be taken under Article VII
hereof may be taken to the extent such action is expressly prohibited during
the existence of an Event of Default.

IX.                                RIGHTS
AND REMEDIES AFTER DEFAULT

9.1          Rights and Remedies

(a)           In addition to the acceleration and
other provisions set forth in Article VIII, upon the occurrence and
during the continuation of an Event of Default, Agent shall have the right to
(and at the request of Requisite Lenders, shall) exercise any and all rights
and remedies provided for in any Loan Document, under the UCC or at law or in
equity, including, without limitation, the right to (i) apply any Property of
any Credit Party held by Agent, for the benefit of the Lender Parties, or any
Lender to reduce the Obligations, (ii) foreclose the Liens created under the
Loan Documents, (iii) realize upon, take possession of and/or sell or otherwise
transfer any Collateral or securities pledged, with or without judicial
process, (iv) exercise all rights and powers with respect to the Collateral as
any Credit Party might exercise, (v) collect and send notices regarding the
Collateral, with or without judicial process, (vi) by its own means

 38
 

 

or with judicial
assistance, enter any premises at which Collateral and/or pledged securities
are located, or render any of the foregoing unusable or dispose of the
Collateral and/or pledged securities on such premises without any liability for
rent, storage, utilities, or other sums, and no Credit Party shall resist or
interfere with such action, (vii) at Credit Parties’ expense, require that all
or any part of the Collateral be assembled and made available to Agent at any
place designated by Agent in its Permitted Discretion, (viii) reduce or
otherwise change the Facility Cap, and/or (ix) relinquish or abandon any
Collateral or securities pledged or any Lien thereon.  Notwithstanding any provision of any Loan
Document, Agent, in its Permitted Discretion, shall have the right, at any time
that any Credit Party fails to do so, and from time to time, without prior
notice, to: (i) obtain insurance covering any of the Collateral to the extent
required hereunder; (ii) pay for the performance of any of the Obligations;
(iii) discharge taxes, levies and/or Liens on any of the Collateral that are in
violation of any Loan Document; and (iv) pay for the maintenance, repair and/or
preservation of the Collateral.  Such
expenses and advances shall be added to the Obligations until reimbursed to
Agent and shall be secured by the Collateral and payable on demand, and such
payments by Agent shall not be construed as a waiver by Agent or Lenders of any
Event of Default or any other rights or remedies of Agent and Lenders.

(b)           The Credit Parties jointly and severally
agree that notice received by any of them at least ten (10) calendar days
before the time of any intended public sale, or the time after which any
private sale or other disposition of Collateral is to be made, shall be deemed
to be reasonable notice of such sale or other disposition.  If permitted by applicable law, any
perishable Collateral which threatens to speedily decline in value or which is
sold on a recognized market may be sold immediately by Agent without prior
notice to any Credit Party.  At any sale
or disposition of Collateral or securities pledged, Agent may (to the extent
permitted by applicable law) purchase all or any part thereof free from any
right of redemption by the Credit Parties, which right hereby is waived and
released.  The Credit Parties jointly and
severally covenant and agree not to, and not to permit or cause any of their
Subsidiaries to, interfere with or impose any obstacle to Agent’s exercise of
its rights and remedies with respect to the Collateral.  In dealing with or disposing of the
Collateral or any part thereof, Agent and Lenders shall not be required to give
priority or preference to any item of Collateral or otherwise to marshal assets
or to take possession or sell any Collateral with judicial process.

(c)           Each Credit Party hereby grants to
Agent, for the benefit of the Lender Parties, after the occurrence and during
the continuance of an Event of Default, an irrevocable, nonexclusive license
(exercisable without payment of royalty or other compensation to such Credit
Party) to use, assign, license or sublicense any Intellectual Property, now
owned or hereafter acquired by such Credit Party, and wherever the same may be
located, including in such license reasonable access as to all media in which
any of the licensed items may be recorded or stored and to all computer
programs and used for the compilation or printout thereof.  All proceeds received by Agent or Lenders in
connection with such license shall be used by Agent or Lenders to satisfy the
Obligations.

(d)           In addition to the acceleration and
other provisions set forth in Article VIII, upon the occurrence and
during the continuation of an Event of Default, each Credit Party shall take
any action that Agent, for the benefit of itself and the Lenders, may request
in order to enable Agent to obtain and enjoy the full rights and benefits
granted to Agent hereunder.

 39
 

 

(e)           In addition to any rights of Agent
and Lenders set forth in this Agreement (including Appendix B) or any other
Loan Document, if an Event of Default has occurred and is continuing or this
Agreement (or the Revolving Facility) shall be terminated for any reason, then
Agent may, and upon request of Lenders holding at least a majority of the
principal amount of Advances shall, demand (which demand shall be deemed to
have been delivered automatically upon any acceleration of the Loans and other
obligations hereunder pursuant to Section 9), and Borrower shall thereupon
deliver to Agent, to be held for the benefit of Agent and the Revolving
Lenders, an amount of cash equal to 105% of the amount of Letter of Credit
Usage as additional collateral security for the Obligations in respect of any
outstanding Letters of Credit and L/C Undertakings.  Agent may at any time apply any or all of
such cash and cash collateral to the payment of any or all of the Obligations
in respect of any Letters of Credit or Letter of Credit Usage.

9.2          Application of Proceeds

In addition to any other
rights and remedies Agent and Lenders have under the Loan Documents, the UCC,
at law or in equity, all payments received after the occurrence and during the
continuation of any Event of Default, and all proceeds collected or received
from collecting, holding, managing, renting, selling or otherwise disposing of
all or any part of the Collateral or any proceeds thereof upon exercise of
remedies hereunder upon the occurrence and during the continuation of an Event
of Default, shall be applied in the following order of priority:

(i)            first,
to the payment of all costs and expenses of such collection, holding, managing,
renting, selling or disposition, and of conducting the Credit Parties’
Businesses and of maintenance, repairs, replacements, alterations, additions
and improvements of or to the Collateral, and to the payment of all sums which
Agent or Lenders may be required or may elect to pay, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments that Agent or Lenders may be required or
authorized to make under any provision of the Loan Documents (including,
without limitation, in each such case, in-house documentation and diligence
fees and legal expenses, search, audit, recording, professional and filing fees
and expenses and attorneys’ fees and all expenses, liabilities and advances
made or incurred in connection therewith);

(ii)           second,
to payment of all accrued unpaid interest on the Obligations and fees owed to
the Agent and Lenders, in such order as Agent may determine;

(iii)          third,
pro rata to payment of principal of the Obligations;

(iv)          fourth,
to payment of any other amounts owing constituting Obligations in such order as
Agent may determine; and

(v)           fifth,
any surplus then remaining to the Credit Parties, unless otherwise provided by
law or directed by a court of competent jurisdiction;

provided that the Credit
Parties shall be liable for any deficiency if such proceeds are insufficient to
satisfy all of the Obligations or any of the other items referred to in this
Section 9.2.  In

 40

 

carrying out the foregoing, (x) amounts received shall
be applied in the numerical order provided until exhausted prior to the
application to the next succeeding category; and (y) each of the Lenders shall
receive an amount equal to its pro rata share of amounts available to be
applied pursuant to clauses (i), (ii), (iii) and (iv) above.

9.3                               Rights
to Appoint Receiver

Without limiting any other rights, options and
remedies Agent and Lenders have under the Loan Documents, the UCC, at law or in
equity, upon the occurrence and during the continuation of an Event of Default,
Agent and Lenders shall have the right to apply for and have a receiver
appointed by a court of competent jurisdiction in any action taken by Agent to
enforce its and Lenders’ rights and remedies in order to manage, protect and
preserve the Collateral, to sell or dispose of the Collateral, to continue the
operation of the Businesses of the Credit Parties and to collect all revenues
and profits thereof and apply the same to the payment of all expenses and other
charges of such receivership including the compensation of the receiver and to
the payments as aforesaid until a sale or other disposition of such Collateral
shall be finally made and consummated. 
To the extent not prohibited by applicable law, each Credit Party hereby
irrevocably consents to, and waives any right to object to or otherwise
contest, the appointment of, a receiver as provided above.  Each Credit Party (i) grants such waiver and
consent knowingly after having discussed the implications thereof with counsel,
(ii) acknowledges that (A) the uncontested right to have a receiver appointed
for the foregoing purposes is considered essential by Agent and Lenders in
connection with the enforcement of their rights and remedies hereunder and
under the other Loan Documents and (B) the availability of such appointment as
a remedy under the foregoing circumstances was a material factor in inducing
Lenders to make the Loans to Borrower and (iii) to the extent not prohibited by
applicable law, agrees to enter into any and all stipulations in any legal
actions, or agreements or other instruments required or reasonably appropriate
in connection with the foregoing, and to cooperate fully with Agent and Lenders
in connection with the assumption and exercise of control by any receiver over
all or any portion of the Collateral.

9.4                               Attorney
in Fact

Each Credit Party hereby irrevocably appoints Agent,
for the benefit of the Lender Parties, as its attorney in fact to take any
action Agent or Requisite Lenders deem necessary or desirable upon the
occurrence and during the continuation of an Event of Default to protect and
realize upon the Liens in the Collateral, including the execution and delivery
of any and all documents or instruments related to the Collateral in such
Credit Party’s name, and said appointment shall create in Agent, for the
benefit of the Lender Parties, a power coupled with an interest.

9.5                               Rights
and Remedies not Exclusive

As among the Lender Parties on one hand and the Credit
Parties on the other hand, Agent and Lenders shall have the right in their sole
discretion to determine which rights, Liens and/or remedies Agent and/or
Lenders may at any time pursue, relinquish, subordinate or modify, and such
determination shall not in any way modify or affect any of Agent’s or Lenders’
rights, Liens or remedies under any Loan Document, applicable law or
equity.  The enumeration of any 

 41
 

 

rights and remedies in
any Loan Document is not intended to be exhaustive, and all rights and remedies
of Agent and the Lenders described in any Loan Document are cumulative and are
not alternative to or exclusive of any other rights or remedies which Agent and
Lenders otherwise may have.  The partial
or complete exercise of any right or remedy shall not preclude any other
further exercise of such or any other right or remedy.

9.6                               Changes
in Law or Policy

Each Credit Party, Agent
and each Lender acknowledge their intent that, upon the occurrence of an Event
of Default, Agent shall receive, to the fullest extent permitted by law and
governmental policy, all rights necessary or desirable to obtain, use or sell
the Collateral, and to exercise all remedies available to Agent under the Loan
Documents, the UCC or other applicable law. 
Each Credit Party, Agent and each Lender further acknowledge and agree
that, in the event of changes in law or governmental policy occurring
subsequent to the date hereof that affect in any manner Agent’s rights of
access to, or use or sale of, the Collateral, or the procedures necessary to
enable Agent to obtain such rights of access, use or sale, Agent, Lenders and
each Credit Party shall execute an amendment to the Loan Documents, in such
manner as Agent reasonably shall request, in order to provide Agent such rights
to the greatest extent possible consistent with then applicable law and
governmental policy.

X.                                    WAIVERS
AND JUDICIAL PROCEEDINGS

10.1                        Certain
Waivers

Except as expressly provided for herein, each Credit
Party hereby waives set-off, counterclaim, demand, presentment, protest, all
defenses with respect to any and all instruments and all notices and demands of
any description, and the pleading of any statute of limitations as a defense to
any demand under any Loan Document.  Each
Credit Party hereby waives any and all defenses and counterclaims it may have
or could interpose in any action or procedure brought by Agent or any Lender to
obtain a court order recognizing the assignment of, or Lien of Agent, for the
benefit the Lender Parties, in and to, any Collateral, other than the defense
of full performance and satisfaction, and indefeasible payment in full in cash,
of all Obligations (other than contingent indemnification Obligations to the
extent no claim giving rise thereto has been asserted) and the termination of
all Commitments and this Agreement.

10.2                        Delay;
No Waiver of Defaults

No course of action or dealing, renewal, release or
extension of any provision of any Loan Document, or single or partial exercise
of any such provision, or delay, failure or omission on Agent’s or any Lender’s
part in enforcing any such provision shall affect the liability of any Credit
Party or operate as a waiver of such provision or affect the liability of any
Credit Party or preclude any other or further exercise of such provision.  No waiver by any party to any Loan Document
of any one or more defaults by any other party in the performance of any of the
provisions of any Loan Document shall operate or be construed as a waiver of
any future default, whether of a like or different nature, and each such waiver
shall be limited solely to the express terms and provisions of such
waiver.  Notwithstanding any other
provision of any Loan Document, by completing the Closing under this Agreement
and/or by making Advances and/or 

 42
 

 

funding the Term Loans, neither
Agent nor any Lender waives any breach of any representation or warranty of any
Credit Party under any Loan Document, and all of Agent’s and Lenders’ claims
and rights resulting from any such breach or misrepresentation hereby
specifically are reserved.

10.3                        Jury
Waiver

EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES
ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION ARISING UNDER THE
LOAN DOCUMENTS OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES WITH RESPECT TO THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE.  EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY.

10.4                        Amendment
and Waivers

Except as otherwise provided herein, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or consent to any departure by the Credit Parties or any
of them therefrom, shall be effective unless the same shall be in writing and
signed by Requisite Lenders (or Agent at the direction of the Requisite
Lenders) and Borrower (or such Credit Party); provided, that no amendment,
modification, termination or waiver shall, unless in writing and signed by
Borrower (or such Credit Party) and each Lender directly affected thereby, do
any of the following: (i) increase the Commitment of any individual Lender
(which action shall be deemed to directly affect all Lenders); (ii) reduce the
principal of, rate (or cash rate) of interest on or fees payable with respect
to any Loan or other Obligation; (iii) extend the scheduled due date, or reduce
the amount due on any scheduled due date, of any installment of principal,
interest or fees payable under any Loan Document, or waive, forgive, extend,
defer or postpone the payment thereof; (iv) change the percentage of the
Commitments, of the aggregate unpaid principal amount of the Loans, or of
Lenders which shall be required for Lenders, Agent or any of them to take any
action hereunder (which action shall be deemed to directly affect all Lenders)
or alter, as between or among the Revolving Lenders and Term Lenders or the
Term A Lenders and the Convertible Term Lenders, the amount payable to each
hereunder; (v) except as otherwise permitted herein or in the other Loan
Documents, release any Guaranty or release any material portion of the
Collateral (which action shall be deemed to directly affect all Lenders)
(provided, that consent to such release shall not be required if such release
is made after the occurrence and during the continuation of an Event of Default
in connection with the sale or disposition of the Collateral by Agent otherwise
permitted hereunder); (vi) amend, modify or waive this Section 10.4 or the
definitions of the terms used in this Section 10.4 insofar as the definitions
affect the substance of this Section 10.4 (which action shall be deemed to
directly affect all Lenders); and/or (vii) consent to the assignment or other
transfer by any Credit Party or any other party to any Loan Documents (other
than Agent or any 

 43
 

 

Lender) of any of their
rights and obligations under any Loan Document; and provided, further, that no
amendment, modification, termination or waiver affecting the rights or duties
of Agent under any Loan Document shall be effective unless in writing and
signed by Agent, in addition to Lenders required hereinabove to take such
action.  Notwithstanding anything
contained in this Agreement to the contrary (A) no waiver or consent with
respect to any Default (if in connection therewith Revolving Lenders have
exercised their right to suspend the making or incurrence of Advances) or any
Event of Default shall be effective for purposes of the conditions precedent to
the making of Advances unless the same shall be in writing and signed by
Revolving Lenders holding at least a majority
of the Commitments in respect of the Revolving Facility and (B) the Conversion
and Registration Rights Agreement may be amended only in accordance with the terms
thereof.  Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 10.4
shall be binding upon Agent, each Lender and the Credit Parties.

10.5                        Survival

All obligations, covenants, agreements,
representations, warranties, waivers and indemnities made by each Credit Party
in the Loan Documents shall survive the execution and delivery of the Loan
Documents, the Closing, the making and funding of the Loans and any termination
of this Agreement until all Obligations (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted) are
fully performed and indefeasibly paid in full in cash and all Commitments have
been terminated; provided, that, the obligations and provisions of Sections
3.4, 10.1, 10.3, 10.5, 12.3, 12.4, 12.7, 12.9, 12.10 and 12.11, Article XI
and Article XIII shall survive the termination of the Loan Documents and
any payment, in full or in part, of the Obligations.

XI.                                AGENT
PROVISIONS; SETTLEMENT

11.1                        Agent

(a)                                  Appointment.  Each Lender hereby designates and appoints
CapitalSource as the administrative agent, payment agent and collateral agent
under this Agreement and the other Loan Documents and each Lender hereby
irrevocably authorizes CapitalSource, as Agent for such Lender, to take such
action or to refrain from taking such action on its behalf under the provisions
of this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are delegated to Agent by the terms of this Agreement
and the other Loan Documents, together with such other powers as are reasonably
incidental thereto.  Agent agrees to act
as such on the conditions contained in this Article XI.  The provisions of this Article XI are
solely for the benefit of Agent and Lenders, and the Credit Parties shall have
no rights as third-party beneficiaries of any of the provisions of this Article
XI other than the second sentence of Section 11.1(h)(iii).  Agent may perform any of its duties
hereunder, or under the Loan Documents, by or through its agents, employees or
sub-agents.

(b)                                 Nature of Duties.  In performing its functions and duties under
this Agreement, Agent is acting solely on behalf of Lenders, and its duties are
administrative in nature, and does not assume and shall not be deemed to have
assumed, any obligation toward or relationship of agency or trust with or for
Lenders, other than as expressly set forth herein and in 

 44
 

 

the other Loan Documents,
or the Credit Parties.  Agent shall have
no duties, obligations or responsibilities except those expressly set forth in
this Agreement or in the other Loan Documents. 
Agent shall not have by reason of this Agreement or any other Loan
Document a fiduciary relationship in respect of any Lender.  Each Lender shall make its own independent
investigation of the financial condition and affairs of the Credit Parties in
connection with the extension of credit hereunder and shall make its own
appraisal of the creditworthiness of the Credit Parties.  Except for information, notices, reports and
other documents expressly required to be furnished to Lenders by Agent
hereunder or given to Agent for the account of or with copies for Lenders,
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the Closing Date or at any
time or times thereafter.  If Agent seeks
the consent or approval of any Lenders to the taking or refraining from taking
any action hereunder, then Agent shall send prior written notice thereof to
each Lender.  Agent shall promptly notify
each Lender in writing any time that the applicable percentage of Lenders have
instructed Agent to act or refrain from acting pursuant hereto.

(c)                                  Rights, Exculpation, Etc.  Neither Agent nor any of its officers,
directors, managers, members, equity owners, employees, attorneys or agents
shall be liable to any Lender for any action lawfully taken or omitted by them
hereunder or under any of the other Loan Documents, or in connection herewith
or therewith; provided that the foregoing shall not prevent Agent from being be
liable to the extent of its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction on a final and nonappealable
basis.  Notwithstanding the foregoing,
Agent shall be obligated on the terms set forth herein for performance of its
express duties and obligations hereunder. 
Agent shall not be liable for any apportionment or distribution of
payments made by it in good faith, and if any such apportionment or
distribution is subsequently determined to have been made in error, the sole
recourse of any Lender to whom payment was due but not made shall be to recover
from the other Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree promptly to
return to such Lender any such erroneous payments received by them).  In performing its functions and duties
hereunder, Agent shall exercise the same care which it would in dealing with
loans for its own account.  Agent shall
not be responsible to any Lender for any recitals, statements, representations
or warranties made by the Credit Parties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any of the other Loan Documents or the
transactions contemplated thereby, or for the financial condition of the Credit
Parties.  Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions, or conditions of this Agreement or any of the Loan Documents
or the financial condition of the Credit Parties, or the existence or possible
existence of any Default or Event of Default. 
Agent may at any time request instructions from Lenders with respect to
any actions or approvals which by the terms of this Agreement or of any of the
other Loan Documents Agent is permitted or required to take or to grant, and
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from taking any action or withholding any approval under
any of the Loan Documents until it shall have received such instructions from
the applicable percentage of Lenders. 
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting under
this Agreement or any of the other Loan Documents in accordance with the
instructions of the 

 45
 

 

applicable percentage of
Lenders and, notwithstanding the instructions of Lenders, Agent shall have no
obligation to take any action if it, in good faith, believes that such action
exposes Agent or any of its officers, directors, managers, members, equity
owners, employees, attorneys or agents to any personal liability unless Agent
receives an indemnification satisfactory to it from Lenders with respect to such
action.

(d)                                 Reliance. 
Agent shall be entitled to rely upon any written notices, statements,
certificates, orders or other documents or any telephone message or other
communication (including any writing, telex, telecopy or telegram) believed by
it in good faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters pertaining to this
Agreement or any of the other Loan Documents and its duties hereunder or
thereunder, upon advice of legal counsel, independent accountants and other
experts selected by Agent in its sole discretion.

(e)                                  Indemnification.  Each Lender, severally and not (i) jointly or
(ii) jointly and severally, agrees to reimburse and indemnify and hold harmless
Agent and its officers, directors, managers, members, equity owners, employees,
attorneys and agents (to the extent not reimbursed by the Credit Parties),
ratably according to their respective Pro Rata Share in effect on the date on
which indemnification is sought under this subsection of the total outstanding
Obligations (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Pro Rata Share immediately prior to such date
of the total outstanding Obligations), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances, or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against Agent or
any of its officers, directors, managers, members, equity owners, employees,
attorneys or agents in any way relating to or arising out of this Agreement or
any of the other Loan Documents or any action taken or omitted by Agent under
this Agreement or any of the other Loan Documents; provided, however, that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, advances or disbursements to the extent resulting from Agent’s gross
negligence or willful misconduct as determined by a court of competent
jurisdiction on a final and nonappealable basis.  The obligations of Lenders under this Article
XI shall survive the payment in full of the Obligations and the termination
of this Agreement.

(f)                                    CapitalSource Individually.  With respect to the Loans made by it and the
Notes issued to it, CapitalSource shall have, and may exercise, the same rights
and powers hereunder and under the other Loan Documents, and is subject to the
same obligations and liabilities, as and to the extent set forth herein and the
other Loan Documents as any other Lender. 
The terms “Lenders” or “Requisite Lenders” or any similar terms shall,
unless the context clearly otherwise indicates, include CapitalSource in its
individual capacity as a Lender or one of the Requisite Lenders.  CapitalSource may lend money to, and
generally engage in any kind of banking, trust or other business with, any
Credit Party or any Subsidiary or Affiliate of any Credit Party as if it were
not acting as Agent pursuant hereto.

 46
 

 

(g)                                 Successor Agent.

(i)                                     Resignation.  Agent may resign from the performance of all
or part of its functions and duties hereunder at any time by giving at least
thirty (30) calendar days’ prior written notice to Borrower and Lenders.  Such resignation shall take effect upon the
acceptance by a successor Agent of appointment pursuant to clause (ii) below or
as otherwise provided below.

(ii)                                  Appointment of Successor.  Upon any such notice of resignation pursuant
to clause (g)(i) of this Section 11.1, Requisite Lenders shall appoint a
successor Agent with the consent of Borrower, which consent shall not be
unreasonably withheld, delayed or conditioned (or required if any Default or
Event of Default exists).  If a successor
Agent shall not have been so appointed within said thirty (30) calendar day
period referenced in clause (g)(i) above, the retiring Agent, upon notice to
Borrower, may, on behalf of Lenders, appoint a successor Agent with the consent
of Borrower, which consent shall not be unreasonably withheld, delayed or
conditioned (or required if any Default or Event of Default exists), who shall
serve as Agent until such time as Requisite Lenders appoint a successor Agent
as provided above.  If no successor Agent
has been appointed pursuant to the foregoing within said thirty (30) calendar
day period, the resignation shall become effective and Requisite Lenders
thereafter shall perform all the duties of Agent hereunder, until such time, if
any, as Requisite Lenders appoint a successor Agent as provided above.

(iii)                               Successor Agent.  Upon the acceptance of any appointment as
Agent under the Loan Documents by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and, upon the earlier of such acceptance or
the effective date of the retiring Agent’s resignation, the retiring Agent
shall be discharged from its duties and obligations under the Loan Documents,
provided that any indemnity rights or other rights in favor of such retiring
Agent shall continue after and survive such resignation and succession.  After any retiring Agent’s resignation as
Agent under the Loan Documents, the provisions of this Article XI shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under the Loan Documents.

(h)                                 Collateral Matters.

(i)                                     Collateral. 
Each Lender agrees that any action taken by Agent or the Requisite
Lenders (or, where required by the express terms of this Agreement, a greater
number of Lenders) in accordance with the provisions of this Agreement or of
the other Loan Documents relating to the Collateral, and the exercise by Agent
or the Requisite Lenders (or, where so required, such greater number of
Lenders) of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all of Lenders and Agent.  Without
limiting the generality of the foregoing, the Agent shall have the sole and
exclusive right and authority to (A) act as the disbursing and collecting agent
for Lenders with respect to all payments and collections arising in connection
herewith and with the Loan Documents in connection with the Collateral; (B)
execute and deliver each Loan Document relating to the Collateral and each
Subordination Agreement and accept delivery of each such agreement delivered by
the Credit Parties or any of their Subsidiaries; (C) act as collateral 

 47
 

 

agent for Lenders
for purposes of the perfection of all security interests and Liens created by
such agreements and all other purposes stated therein; (D) manage, supervise
and otherwise deal with the Collateral; (E) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
Liens created or purported to be created by the Loan Documents relating to the
Collateral; and (F) except as may be otherwise specifically restricted by the
terms hereof or of any other Loan Document, exercise all right and remedies
given to such Agent and Lenders with respect to the Collateral under the Loan
Documents relating thereto, applicable law or otherwise.

(ii)                                  Release of Collateral.  Lenders hereby irrevocably authorize Agent,
at its option and in its discretion, to release any Lien granted to or held by
Agent, for the benefit the of Lender Parties, upon any Property covered by the
Loan Documents (A) upon termination of this Agreement and payment and
satisfaction in full of all Obligations (other than contingent indemnification
Obligations to the extent no claim giving rise thereto has been asserted); (B)
constituting Property being sold or disposed of if Borrower certifies to Agent
that the sale or disposition is made in compliance with the provisions of the
Loan Documents (and Agent may rely conclusively on any such certificate,
without further inquiry); or (C) constituting Property leased to any Credit
Party under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not been,
and is not intended by such Credit Party to be, renewed or extended.

(iii)                               Confirmation of Authority; Execution of Releases.  Without in any manner limiting Agent’s
authority to act without any specific or further authorization or consent by
Lenders (as set forth in Section 11.1(h)(i) and (ii)), each Lender agrees to
confirm in writing, upon request by Borrower, the authority to release any
Property covered by this Agreement or the Loan Documents conferred upon Agent
under Section 11.1(h)(ii).  So long
as no Event of Default exists, upon receipt by Agent of confirmation from the
requisite percentage of Lenders of its authority to release any particular item
or types of Property covered by this Agreement or the other Loan Documents, and
upon at least five (5) Business Days’ prior written request by Borrower, Agent
shall (and hereby is irrevocably authorized by Lenders to) execute such
documents as may be necessary to evidence the release of the Liens granted to
Agent, for the benefit of the Lender Parties, herein or pursuant hereto upon
such Collateral; provided, however, that (A) Agent shall not be required to
execute any such document on terms which, in Agent’s opinion, would expose
Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty (other than that
such Collateral is free and clear, on the date of such delivery, of any and all
Liens arising from such Person’s own acts), and (B) such release shall not in
any manner discharge, affect or impair the Obligations or any Liens upon (or
obligations of the Credit Parties or any Subsidiary of any Credit Party in
respect of all interests retained by the Credit Parties or any Subsidiary of
any Credit Party, including, without limitation, the proceeds of any sale, all
of which shall continue to constitute part of the Property covered by this
Agreement or the Loan Documents).

(iv)                              Absence of Duty.  Agent shall have no obligation whatsoever to
any Lender or any other Person to assure that the Property covered by this
Agreement or 

 48
 

 

the other Loan
Documents exists or is owned by any Credit Party or is cared for, protected or
insured or has been encumbered or that the Liens granted to Agent, on behalf of
the Lender Parties, herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected, enforced or maintained
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure, or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent in this Section 11.1(h) or in any of the Loan Documents; it
being understood and agreed that in respect of the Property covered by this
Agreement or the other Loan Documents, or any act, omission or event related
thereto, Agent may act in any manner it may deem appropriate, in its
discretion, given Agent’s own interest in Property covered by this Agreement or
the Loan Documents as one of Lenders and Agent shall have no duty or liability
whatsoever to any of the other Lenders; provided, that Agent shall exercise the
same care which it would in dealing with loans for its own account.

(i)                                     Agency for Perfection.  Each Lender hereby appoints Agent as agent
for the purpose of perfecting Lenders’ security interest in Collateral which,
in accordance with Article 9 of the UCC in any applicable jurisdiction, can be
perfected only by possession.  Should any
Lender (other than Agent) obtain possession of any such Collateral, such Lender
shall hold such Collateral for purposes of perfecting a security interest
therein for the benefit of the Lender Parties, notify Agent thereof and,
promptly upon Agent’s request therefor, deliver such Collateral to Agent or
otherwise act in respect thereof in accordance with Agent’s instructions.

(j)                                     Exercise of Remedies.  Except as set forth in Section 11.3, each
Lender agrees that it will not have any right individually to enforce or seek
to enforce this Agreement or any other Loan Document or to realize upon any
Collateral security for the Loans or other Obligations; it being understood and
agreed that such rights and remedies may be exercised only by Agent in
accordance with the terms of the Loan Documents.

11.2                        Intentionally
Omitted

11.3                        Set-off
and Sharing of Payments

In addition to any rights and remedies now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuation of any Event of
Default, each Lender is hereby authorized by the Credit Parties at any time or
from time to time, to the fullest extent permitted by law, with notice to Agent
and without notice to Borrower or any other Person other than Agent (such
notice being hereby expressly waived) to set off and to appropriate and to
apply any and all (a) balances (general or special, time or demand, provisional
or final) held by such Lender at any of its offices for the account of any
Credit Party (regardless of whether such balances are then due to any Credit
Party), and (b) other Property at any time held or owing by such Lender to or
for the credit or for the account of any Credit Party, against and on account
of any of the Obligations which are not paid when due; provided, that no Lender
or any such holder shall exercise any such right without prior written notice
to Agent.  Any Lender that has exercised
its right to set-off or otherwise has received any payment on account of the
Obligations shall, to the extent the amount of any such set off or payment
exceeds its Pro Rata Share of payments obtained by all of the Lenders on
account of 

 49
 

 

such Obligations,
purchase for cash (and the other Lenders or holders of the Loans shall sell)
participations in each such other Lender’s or holder’s Pro Rata Share of
Obligations as would be necessary to cause such Lender to share such excess
with each other Lenders or holders in accordance with their respective Pro Rata
Shares; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such purchasing Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery.  Each Credit Party
agrees, to the fullest extent permitted by law, that (a) any Lender or holder
may exercise its right to set-off with respect to amounts in excess of its Pro
Rata Share of the Obligations and may sell participations in such excess to
other Lenders and holders, and (b) any Lender so purchasing a participation in
the Loans made or other Obligations held by other Lenders may exercise all
rights of set-off, bankers’ lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender were a direct holder of Loans
and other Obligations in the amount of such participation.

11.4                        Disbursement
of Funds under Revolving Facility

Agent may, on behalf of Revolving Lenders, disburse
funds to Borrower for Advances requested. 
Each Revolving Lender shall reimburse Agent on demand for its Pro Rata
Share of all funds disbursed on its behalf by Agent, or if Agent so requests,
each Revolving Lender shall remit to Agent its Pro Rata Share of any Advance before
Agent disburses such Advance to Borrower. 
If Agent so elects to require that funds be made available prior to
disbursement to Borrower, Agent shall advise each Revolving Lender by
telephone, telex or telecopy of the amount of such Revolving Lender’s Pro Rata
Share of such requested Advance no later than one (1) Business Day prior to the
funding date applicable thereto, and each such Revolving Lender shall pay Agent
such Revolving Lender’s Pro Rata Share of such requested Loan, in same day
funds, by wire transfer to Agent’s account not later than 2:00 p.m. (New York
City time).  If Agent shall have
disbursed funds to Borrower on behalf of any Revolving Lender and such
Revolving Lender fails to pay the amount of its Pro Rata Share forthwith upon
Agent’s demand, Agent shall promptly notify Borrower, and Borrower shall
immediately repay such amount to Agent. 
Any repayment by Borrower required pursuant to this Section 11.4 shall
be without premium or penalty.  Nothing
in this Section 11.4 or elsewhere in this Agreement or the other Loan
Documents, including, without limitation, the provisions of Section 11.5, shall
be deemed to require Agent to advance funds on behalf of any Revolving Lender
or to relieve any Revolving Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that Agent or Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder.

11.5                        Settlements;
Payments; and Information

(a)                                  Advances; Payments; Interest and Fee Payments

(i)                                     The
amount of outstanding Loans pursuant to Advances may fluctuate from day to day
through Agent’s disbursement of funds to, and receipt of funds from,
Borrower.  In order to minimize the
frequency of transfers of funds between Agent and each Revolving Lender,
notwithstanding terms to the contrary set forth in Section 11.4, Advances and
repayments thereof may be settled according to the procedures described in
Sections 11.5(a)(ii) and 11.5(a)(iii). 
Payments of principal on the Term

 50

 

Loans will be
settled, in accordance with each Lender’s Pro Rata Share, on the first Business
Day after such payments are received. 
Notwithstanding these procedures, each Revolving Lender’s obligation to
fund its Pro Rata Share of any Advances made by Agent to Borrower will commence
on the date such Advances are made by Agent. 
Nothing contained in this Agreement shall obligate a Revolving Lender to
make an Advance at any time any Default or Event of Default exists.  All such payments will be made by such Lender
without set-off, counterclaim or deduction of any kind.

(ii)                                  Once
each week, or more frequently (including daily), if Agent so elects (each such
day being a “Settlement Date”), Agent will
advise each Revolving Lender by 1:00 p.m. (New York City time) on a Business
Day by telephone, telex or telecopy of the amount of each such Revolving Lender’s
Pro Rata Share of the outstanding Advances. 
In the event payments are necessary to adjust the amount of such
Revolving Lender’s share of the Advances to such Lender’s Pro Rata Share of the
Advances, the party from which such payment is due will pay the other party, in
same day funds, by wire transfer to the other’s account not later than 2:00
p.m. (New York City time) on the Business Day following the Settlement Date.

(iii)                               On
the first Business Day of each month (“Interest Settlement Date”),
Agent will advise each Lender by telephone or facsimile of the amount of
interest and fees charged to and collected from Borrower for the preceding
month in respect of the applicable Loans. 
Provided that such Lender has made all payments required to be made by
it under this Agreement, Agent will pay to such Lender, by wire transfer to
such Lender’s account (as specified by such Lender on Schedule A of this
Agreement as amended by such Lender from time to time after the date hereof
pursuant to the notice provisions contained herein or in the applicable Lender
Addition Agreement) not later than 2:00 p.m. (New York City time) on the next
Business Day following the Interest Settlement Date, such Lender’s share of
such interest and fees.

(b)                                 Availability of Lenders’ Pro Rata Share

(i)                                     Unless
Agent has been notified by a Revolving Lender prior to any proposed funding
date of such Lender’s intention not to fund its Pro Rata Share of an Advance
requested by Borrower, Agent may assume that such Revolving Lender will make
such amount available to Agent on the proposed funding date or the Business Day
following the next Settlement Date, as applicable; provided, however, nothing
contained in this Agreement shall obligate a Revolving Lender to make an
Advance at any time any Default or Event of Default exists.  If such amount is not, in fact, made
available to Agent by such Revolving Lender when due, Agent will be entitled to
recover such amount on demand from such Revolving Lender without set-off,
counterclaim or deduction of any kind.

(ii)                                  Nothing
contained in this Section 11.5(b) will be deemed to relieve a Lender of its
obligation to fulfill its commitments or to prejudice any rights Agent or
Borrower may have against such Lender as a result of any default by such Lender
under this Agreement.

 51
 

 

(c)                                  Return of Payments

(i)                                     If
Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
any Credit Party and such related payment is not received by Agent, then Agent
will be entitled to recover such amount from such Lender without set-off,
counterclaim or deduction of any kind.

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

11.6                        Dissemination
of Information

Upon request by a Lender, Agent will distribute
promptly to such Lender, unless previously provided by any Credit Party to such
Lender, copies of all notices, schedules, reports, projections, financial
statements, agreements and other material and information, including, without
limitation, financial and reporting information received from the Credit
Parties or generated by a third party (and excluding only internal information
generated by CapitalSource for its own use as a Lender or as Agent), as
provided for in this Agreement and the other Loan Documents as received by
Agent.  Agent shall not be liable to any
of the Lenders for any failure to comply with its obligations under this
Section 11.6, except to the extent that such failure is attributed to Agent’s
gross negligence or willful misconduct and results in demonstrable damages to
such Lender as determined, in each case, by a court of competent jurisdiction
on a final and non-appealable basis.

XII.                            MISCELLANEOUS

12.1                        Governing
Law; Jurisdiction; Service of Process; Venue

The Loan Documents shall be governed by and construed
in accordance with the internal laws of the State of Maryland without giving effect to its choice of law provisions
that would result in the application of the laws of a different
jurisdiction.  Any judicial proceeding
against any Credit Party with respect to the Obligations, any Loan Document or
any related agreement may be brought in any federal court of competent
jurisdiction located in Baltimore City, Maryland or any state court of
competent jurisdiction located in Montgomery County, Maryland.  By execution and delivery of each Loan
Document to which it is a party, each Credit Party (i) accepts the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any judgment rendered thereby, (ii) waives personal service of
process, (iii) agrees that service of process upon it may be made by certified
or registered mail, return receipt requested, pursuant to Section 12.5, and
(iv) waives any objection to jurisdiction and venue of any action instituted
hereunder and agrees not to assert any defense based on lack of jurisdiction,
venue, 

 52
 

 

convenience or forum
nonconveniens.  Nothing shall affect the
right of Agent or any Lender to serve process in any manner permitted by law or
shall limit the right of Agent or any Lender to bring proceedings against any
Credit Party in the courts of any other jurisdiction having jurisdiction.  Any judicial proceedings against Agent or any
Lender involving, directly or indirectly, the Obligations, any Loan Document or
any related agreement shall be brought only in a federal court of competent
jurisdiction located in Baltimore City, Maryland or a state court of competent
jurisdiction located in Montgomery County, Maryland.

12.2                        Successors
and Assigns; Assignments and Participations

(a)                                  Subject
to Section 12.2(h), each Lender may, at any time and from time to time, assign
all or any portion of its rights and delegate all or a portion of its
obligations under this Agreement and the other Loan Documents (including all of
its rights and obligations with respect to the Loans) to one or more Eligible
Assignees (each, a “Transferee”)
with the prior written consent of Agent; provided, that such Transferee and such assigning Lender shall execute
and deliver to Agent for acceptance and recording in the Register, a Lender
Addition Agreement, which shall be in form and substance acceptable to Agent in
its Permitted Discretion; and provided, further, that so long as no Default or
Event of Default exists and is continuing, no Lender may assign all or any
portion of its rights or delegate all or any portion of its obligations in
respect of the Convertible Term Loan without the prior written consent of
Borrower, which consent shall not be unreasonably withheld, delayed or
conditioned.  Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Lender Addition Agreement, (i) the Transferee thereunder shall
be a party hereto and, to the extent provided in such Lender Addition
Agreement, have the same rights, benefits and obligations of a Lender
hereunder, (ii) the assigning Lender shall be relieved of its obligations
hereunder with respect to its Commitment or assigned portion thereof, as the
case may be, to the extent that such obligations shall have been expressly
assumed by the Transferee pursuant to such Lender Addition Agreement (and, in
the case of a Lender Addition Agreement covering all or the remaining portion
of an assigning Lender’s rights and obligations under this Agreement, such
assigning Lender shall cease to be a party hereto but shall nevertheless
continue to be entitled to the benefits of Sections 12.4 and 12.7) and (iii)
each Transferee of all or any portion of the Convertible Term Loan shall
execute a counterpart of the Conversion and Registration Rights Agreement.  Borrower hereby acknowledges and agrees that
any assignment will give rise to a direct obligation of Borrower to the
Transferee and that the Transferee shall be a “Lender” hereunder and under the
other Loan Documents.

(b)                                 Each
Lender at any time may sell participations in all or any part of its rights and
obligations under this Agreement and the other Loan Documents (including all of
its rights and obligations with respect to the Loans) to one or more Persons
(each, a “Participant”).  In the event of any such sale by a Lender of
a participation to a Participant, such Lender’s obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Loan (and any Note evidencing such Loan)
for all purposes under this Agreement and the other Loan Documents and Borrower
and Agent shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement and
the other Loan Documents.  Any agreement
pursuant to which any Lender shall sell any such participation shall provide
that such Lender shall retain the sole right 

 53
 

 

and responsibility to
exercise such Lender’s rights and enforce each Credit Party’s obligations
hereunder, including the right to consent to any amendment, supplement,
modification or waiver of any provision of this Agreement or any of the other
Loan Documents; provided, that such participation agreement may provide that
such Lender will not agree, without the consent of the Participant, to any
amendment, supplement, modification or waiver to the extent resulting in: (i)
any reduction in the principal amount, interest rate or fees payable with
respect to any Loan in which such Participant participates; (ii) any extension
of the date fixed for any payment of principal, interest or fees payable with
respect to any Loan in which such Participant participates; and (iii) any
release of all or substantially all of the Collateral (other than in accordance
with the terms of this Agreement or the other Loan Documents).  The Credit Parties hereby acknowledge and
agree that the Participant under each participation shall, solely for the
purposes of Sections 10.5, 12.4 and 12.7 of this Agreement, be considered to be
a “Lender” hereunder.

(c)                                  Agent,
on behalf of Borrower, shall maintain at its address referred to in Section
12.5 a copy of each Lender Addition Agreement delivered to it and the Register
for the recordation of the names and addresses of the Lenders and the
Commitment of, and the principal amount of the Loans owing to, and the Notes,
if any, evidencing such Loans owned by, each Lender from time to time.  Anything contained in this Agreement to the
contrary notwithstanding, each of the Credit Parties, Agent and the Lenders
shall treat each Person whose name is recorded in such Register as the owner of
the Loans, the Notes and the Commitments recorded therein for all purposes of
this Agreement.  The Register shall be
available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.

(d)                                 Notwithstanding
anything in this Agreement to the contrary, no assignment under Section 12.2(a)
of any rights or obligations under or in respect of the Loans or the Notes
evidencing such Loans shall be effective unless and until (i) Agent shall have recorded the
assignment pursuant to Section 12.2(c) and
(ii) the assignor Lender or the Transferee has paid to Agent a processing fee
in the amount of $3,500 (provided no such processing fee shall be required to
be paid in connection with an assignment by a Lender to another Lender, an
Eligible Assignee that is an Affiliate of such Lender or a Related Fund of such
Lender).  Upon its receipt of a
Lender Addition Agreement executed by an assigning Lender and an Transferee,
Agent shall (i) promptly accept such Lender Addition Agreement and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give prompt notice of such acceptance and
recordation to the Lenders and Borrower. 
On or prior to such effective date, the assigning Lender shall surrender
any outstanding Notes held by it all or a portion of which are being assigned,
and Borrower, at its own expense, shall, upon the request of Agent, the
assigning Lender or the Transferee, as applicable, execute and deliver to
Agent, within five (5) Business Days of any request, new Notes to reflect the
interest held by the assigning Lender and its Transferee.

(e)                                  Except
as otherwise provided in this Section 12.2, no Lender shall, as between
Borrower and that Lender, be relieved of any of its obligations hereunder as a
result of any sale, assignment, transfer or negotiation of, or granting of
participations in, all or any part of the Loans or other Obligations owed to
such Lender.  Each Lender may furnish any
information concerning the Credit Parties in the possession of that Lender from
time to time to assignees and 

 54
 

 

participants (including
prospective assignees and participants), subject to confidentiality
requirements, if any, hereunder.

(f)                                    Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
create a security interest in all or any portion of its rights under this
Agreement, including, without limitation, the Loans owing to it and the Notes
held by it and the other Loan Documents and Collateral.

(g)                                 Each
Credit Party agrees to provide commercially reasonable best efforts to assist
any Lender in assigning or selling participations in all or any part of any
Loans made by such Lender to another Person identified by such Lender.

(h)                                 Notwithstanding
anything in the Loan Documents to the contrary, (i) CapitalSource and its
Affiliates shall not be required to execute or deliver a Lender Addition
Agreement in connection with any transaction involving CapitalSource and any of
its Affiliates, or the lenders or funding or financing sources of CapitalSource
or any of its Affiliates, (ii) subject to the provisions at the end of this
paragraph, no lender to or Affiliate, funding or financing source of
CapitalSource or any of its Affiliates shall be considered a Transferee, and
(iii) there shall be no limitation or restriction on (A) the ability of
CapitalSource or any of its Affiliates to assign or otherwise transfer any Loan
Document, Commitment or Obligation to any such Affiliate or lender or financing
or funding source or (B) any such lender’s or funding or financing source’s
ability to assign or otherwise transfer any Loan Document, Commitment or
Obligation; provided, however, CapitalSource shall continue to be liable as a “Lender”
under the Loan Documents unless such Affiliate, lender or funding or financing
source executes and delivers a Lender Addition Agreement and thereby becomes a “Lender.”

(i)                                     The
Loan Documents shall inure to the benefit of each Lender, Agent, each
Transferee, each Participant (to the extent otherwise expressly provided herein
only) and all future holders of the Loans, the Notes, the Obligations and/or
any of the Collateral, and each of their respective successors and
assigns.  Each Loan Document shall be
binding upon the Persons other than Lenders and Agent that are parties thereto
and their respective successors and assigns; provided that, no such Person
shall assign, delegate or transfer any Loan Document or any of its rights or
obligations thereunder without the prior written consent of Agent and each
Lender.  No rights are intended to be
created under any Loan Document for the benefit of any third party donee, creditor
or incidental beneficiary of any Credit Party. 
Nothing contained in any Loan Document shall be construed as a
delegation to Agent or any Lender of any other Person’s duty of performance.

12.3                        Reinstatement;
Application of Payments

To the extent that any payment made or received with
respect to the Obligations is subsequently invalidated, determined to be
fraudulent or preferential, set aside, defeased or required to be repaid to a
trustee, debtor in possession, receiver, custodian or any other Person under
any Debtor Relief Law, common law or equitable cause or any other law, then the
Obligations intended to be satisfied by such payment shall be revived and shall
continue as if such payment had not been received by Agent or any Lender and
the Liens created by the Security Documents shall be revived automatically
without any action on the part of any party 

 55
 

 

hereto and shall continue
as if such payment had not been received by Agent or such Lender.  Except as specifically provided in this
Agreement, any payments with respect to the Obligations received shall be
credited and applied in such manner and order as Agent shall decide in its sole
discretion.  Anything contained in any
Loan Document to the contrary notwithstanding, only upon payment in full in cash
and performance of all of the Obligations (other than contingent
indemnification Obligations for which no unsatisfied claim has been asserted),
termination of the Commitments and the execution and delivery of a written
release by the Credit Parties of all claims against Agent and Lenders, and so
long as no suits, actions proceedings, or claims are pending or threatened
against any Indemnified Person asserting any damages, losses or liabilities
that are indemnified liabilities hereunder, shall Agent deliver to Borrower
termination statements, mortgage releases and other documents necessary or
appropriate to evidence the termination of the Liens securing the Obligations.

12.4                        Indemnity

The Credit Parties, jointly and severally, hereby
indemnify Agent and each Lender, and their respective Affiliates, managers,
members, officers, employees, agents, representatives, successors, assigns,
accountants and attorneys (collectively, the “Indemnified
Persons”) from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and
disbursements of any kind or nature whatsoever (including, without limitation,
reasonable fees and disbursements of counsel and in-house documentation and
diligence fees and legal expenses) which may be imposed on, incurred by or
asserted against any Indemnified Person with respect to or arising out of, or
in any litigation, proceeding or investigation instituted or conducted by any
Person with respect to any aspect of, or any transaction contemplated by, or
any matter related to, any Loan Document, any Related Document or any
agreement, document or transaction contemplated thereby, whether or not such
Indemnified Person is a party thereto, except to the extent a final and
nonappealable order of judgment binding on such Indemnified Person of a court
of competent jurisdiction determines the same arose out of the gross negligence
or willful misconduct of such Indemnified Person.  If any Indemnified Person uses in-house
counsel for any purpose for which the Credit Parties are responsible to pay or
indemnify, the Credit Parties expressly agree that their indemnification
obligations include reasonable charges for such work commensurate with the fees
that would otherwise be charged by outside legal counsel selected by such
Indemnified Person in its sole discretion for the work performed.  Agent agrees to give Borrower reasonable
notice of any event of which Agent becomes aware for which indemnification may
be required under this Section 12.4, and Agent may elect (but is not obligated)
to direct the defense thereof.  Any
Indemnified Person may take such actions as it deems necessary and appropriate
to investigate, defend or settle any event or take other remedial or corrective
actions with respect thereto as may be necessary for the protection of such
Indemnified Person or the Collateral. 
Notwithstanding the foregoing, if any insurer agrees to undertake the
defense of an event (an “Insured Event”),
Agent agrees not to exercise its right to select counsel to defend the event if
that would cause Borrower’s insurer to deny coverage; provided, however, that
each Indemnified Person reserves the right to retain counsel to represent such
Indemnified Person with respect to an Insured Event at its sole cost and
expense.  To the extent that Agent or any
Lender obtains recovery from a third party other than an Indemnified Person of
any of the amounts that the Credit Parties have paid to Agent or any Lender
pursuant to the indemnity set forth in this Section 12.4, then Agent and/or any
such Lender shall promptly pay to Borrower the amount of such recovery.  Without 

 56
 

 

limiting any of the
foregoing, the Credit Parties, jointly and severally, indemnify the Indemnified
Parties for all claims for brokerage fees or commissions (other than claims of
a broker with whom such Indemnified Party has directly contracted in writing)
which may be made in connection with any aspect of, or any transaction
contemplated by or referred to in, or any matter related to, any Loan Document,
any Related Document or any other agreement, document or transaction
contemplated thereby.

12.5                        Notice

Any notice or request under any Loan Document shall be
given to any party to this Agreement at such party’s address set forth beneath
its signature on the signature page to this Agreement, or at such other address
as such party hereafter may specify in a notice given in the manner required
under this Section 12.5.  Any notice or
request hereunder shall be given only by, and shall be deemed to have been
received upon (each, a “Receipt”):  (i) registered or certified mail, return
receipt requested, on the date on which such notice or request is received as
indicated in such return receipt, (ii) delivery by a nationally recognized
overnight courier, one (1) Business Day after deposit with such courier, or
(iii) facsimile or electronic transmission, in each case upon telephone or
further electronic communication from the recipient acknowledging receipt
(whether automatic or manual from recipient), as applicable.

12.6                        Severability;
Captions; Counterparts

If any provision of any Loan Document is adjudicated
to be invalid under applicable laws or regulations, such provision shall be
inapplicable to the extent of such invalidity without affecting the validity or
enforceability of the remainder of the Loan Documents which shall be given
effect so far as possible.  The captions
in the Loan Documents are intended for convenience and reference only and shall
not affect the meaning or interpretation of the Loan Documents.  The Loan Documents may be executed in one or
more counterparts (which taken together, as applicable, shall constitute one
and the same instrument) and by facsimile transmission, which facsimile
signatures shall be considered original executed counterparts.  Each party to this Agreement agrees that it
will be bound by its own facsimile signature and that it accepts the facsimile
signature of each other party.

12.7                        Expenses

The Credit Parties hereby jointly and severally agree
to pay on demand, whether or not the Closing occurs, all costs and expenses
incurred by Agent, Lenders and/or their Affiliates, including, without
limitation, documentation and diligence fees and expenses, all search, audit,
appraisal, recording, professional and filing fees and expenses and all other
out-of-pocket charges and expenses (including, without limitation, UCC and
judgment and tax lien searches and UCC filings and fees for post-Closing UCC
and judgment and tax lien searches and wire transfer fees and audit expenses),
and attorneys’ fees and expenses, (i) in any effort to enforce, protect or
collect payment of any Obligation or to enforce any Loan Document, any Related
Document or any related agreement, document or instrument, (ii) in connection
with entering into, negotiating, preparing, reviewing and executing the Loan
Documents, the Related Documents and/or any related agreements, documents or
instruments, (iii) arising in any way out of the administration of the
Obligations, the syndication of the Loans or the taking or refraining 

 57
 

 

from taking by Agent or
any Lender of any action requested by any Credit Party, (iv) in connection with
instituting, maintaining, preserving, enforcing and/or foreclosing on the Liens
in any of the Collateral or securities pledged under the Loan Documents,
whether through judicial proceedings or otherwise, (v) in defending or
prosecuting any actions, claims or proceedings arising out of or relating to
Agent’s and/or Lenders’ transactions with the Credit Parties, (vi) in seeking,
obtaining or receiving any advice with respect to its rights and obligations
under any Loan Document, any Related Document and any related agreement,
document or instrument, (vii) arising out of or relating to any Default or
Event of Default or occurring thereafter or as a result thereof, (viii) in
connection with all actions, visits, audits and inspections undertaken by Agent
or Lenders or their Affiliates pursuant to the Loan Documents, any Related
Document, and/or (ix) in connection with any modification, restatement, supplement,
amendment, waiver or extension of any Loan Document, any Related Document
and/or any related agreement, document or instrument.  All of the foregoing shall be charged to
Borrower’s account and shall be part of the Obligations.  If Agent, any Lender or any of their
Affiliates uses in-house counsel for any purpose under any Loan Document for
which the Credit Parties are responsible to pay or indemnify, the Credit
Parties expressly agree that their Obligations include reasonable charges for
such work commensurate with the fees that would otherwise be charged by outside
legal counsel selected by Agent, such Lender or such Affiliate in its sole
discretion for the work performed. 
Without limiting the foregoing, Borrower shall pay all taxes (other than
taxes based upon or measured by a Lender’s income or revenues or any personal
property tax), if any, in connection with the issuance of any Note and the
filing and/or recording of any documents and/or financing statements.

12.8                        Entire
Agreement

This Agreement and the other Loan Documents to which
the Credit Parties are parties constitute the entire agreement between and
among the Credit Parties, Agent and Lenders with respect to the subject matter
hereof and thereof, and supersede all prior agreements and understandings
(including, without limitation, the Summary of Terms dated on or about July 21,
2006) relating to the subject matter hereof or thereof.  Execution of this Agreement by the Credit
Parties constitutes a full, complete and irrevocable release of any and all
claims which any Credit Party may have at law or in equity in respect of all
prior discussions and understandings, oral or written, relating to the subject
matter of this Agreement and the other Loan Documents.  Each party hereto acknowledges that it has
been advised by counsel in connection with the negotiation and execution of
this Agreement and is not relying upon oral representations or statements
inconsistent with the terms and provisions hereof.

12.9                        Approvals
and Duties

Unless expressly provided herein to the contrary, any
approval, consent, waiver or satisfaction of Agent or Lenders with respect to
any matter that is the subject of any Loan Document may be granted or withheld
by Agent or Lenders, as applicable, in their sole and absolute discretion.  Other than Agent’s duty of reasonable care
with respect to Collateral delivered pursuant to the Loan Documents in
accordance with applicable law (to the extent not waivable), Agent and Lenders
shall have no responsibility for or obligation or duty with respect to any of
the Collateral or any matter or proceeding arising out of or relating thereto,
including, 

 58
 

 

without limitation, any
obligation or duty to collect any sums due in respect thereof or to protect or
preserve any rights pertaining thereto.

12.10                 Confidentiality
and Publicity

(a)                                  The
Credit Parties agree, and agree to cause each of its Affiliates, (i) except to
the extent  required by applicable law or
regulations (in which case each Credit Party shall, and shall cause its
Affiliates to, use its best efforts to obtain confidential treatment of such
information), not to transmit or disclose any provision of any Loan Document to
any Person (other than to such Credit Party’s directors, advisors, counsel,
accountants and officers on a need-to-know basis), in any such case without
Agent’s prior written consent, and (ii) to inform all Persons of the
confidential nature of the Loan Documents and to direct them not to disclose
the same to any other Person and to require each of them to be bound by these
provisions.  Agent and each Lender
reserve the right to review and approve all materials that the Credit Parties
or any of their Affiliates prepare that contain Agent’s or such Lender’s name
or describe or refer to any Loan Document, any of the terms thereof or any of
the transactions contemplated thereby. 
The Credit Parties shall not, and shall not permit any of their
Affiliates to, use either Agent’s or any Lender’s name (or the name of any of
Agent’s or any Lender’s Affiliates) in connection with any of its Business;
provided, that Borrower may disclose the Lenders’ names, the aggregate
principal amount of the Loans outstanding and other principal terms of such
Loans to (x) its shareholders and other equity owners and prospective
purchasers of debt or equity securities of Borrower and (y) Governmental
Authorities regulating the Business in accordance with applicable legal
requirements.  Nothing contained in any
Loan Document is intended to permit or authorize any Credit Party or any of its
Affiliates to contract on behalf of Agent or any Lender.

(b)                                 Agent
and each Lender agree to exercise their best efforts to maintain in confidence,
in accordance with its customary procedures for handling confidential
information, all written non-public information that any Credit Party furnishes
to Agent or such Lender on a confidential basis clearly identified as such (“Confidential Information”), other than any such
Confidential Information that becomes generally available to the public other
than as a result of a breach by Agent or any Lender of its obligations
hereunder or that is or becomes available to Agent or any Lender from a source
other than a Credit Party and that is not, to the actual knowledge of the
recipient thereof, subject to obligations of confidentiality with respect
thereto; provided, however, that Agent and each Lender shall, in any event,
have the right to deliver copies of any such information, and to disclose any
such information, to:

(i)                                     its
affiliates, lenders, funding or financing sources (or its affiliates’ or
lenders’ funding or financing sources), directors, officers, trustees,
partners, employees, agents, attorneys, professional consultants, portfolio
management services and rating agencies;

(ii)                                  any
other Lender and any successor Agent;

(iii)                               (A)
any Person to which any Lender offers to sell any Loan or any part thereof or
interest or participation therein, or (B) any Person if the disclosure consists
of general portfolio information and does not identify any Credit Party
specifically by name;

 59
 

 

(iv)                              any
federal or state regulatory authority or examiner, or any insurance industry
association, regulating or having jurisdiction over Agent or any Lender;

(v)                                 any
Person that provides statistical analysis and information services to CapitalSource;
and

(vi)                              any
other Person to which such delivery or disclosure may be necessary or
appropriate (A) in compliance with any applicable law, rule, regulation or
order, (B) in response to any subpoena or other legal process or informal
investigative demand, (C) in connection with any litigation to which Agent or
such Lender is a party, or (D) in connection with the exercise or enforcement,
or potential exercise or enforcement, of any of the rights and/or remedies of
Agent and/or the Lenders under this Agreement and the other Loan Documents at
any time during the existence of an Event of Default.

Further, the foregoing notwithstanding, the Credit
Parties agree that Agent, any Lender or any Affiliate of Agent or any Lender
may (i) disclose a general description of transactions arising under the Loan
Documents and the Related Documents for advertising, marketing or other similar
purposes, and (ii) use any Credit Party’s name, logo or other indicia germane
to such party in connection with such advertising, marketing or other similar
purposes. The obligations of Agent and Lenders under this Section 12.10 shall
supersede and replace the obligations of Agent and Lenders under any
confidentiality agreement in respect of the financing evidenced hereby executed
and delivered by Agent or any Lender prior to the date hereof.

12.11                 No
Consequential Damages

Neither Agent nor any Lender, nor any agent or
attorney of Agent or any Lender, shall be liable to any Credit Party or any
other Person on any theory of liability for any special, indirect,
consequential or punitive damages.

XIII.                     TAXES

13.1                        Taxes

(a)                                  Subject
to Section 13.1(g), any and all payments by Borrower or any other Credit Party
to each Lender or Agent under this Agreement or any other Loan Document shall
be made free and clear of, and without deduction or withholding for, any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and Agent, such taxes (including income taxes or franchise
taxes) as are imposed on or measured by the net income of such Lender or Agent,
respectively, by the jurisdiction under the laws of which such Lender or Agent,
as the case may be, is organized or maintains a Lending Office or any political
subdivision thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as “Taxes”).

(b)                                 In
addition, Borrower and the other Credit Parties shall pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies

 60

 

which arise from any
payment made hereunder or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as “Other Taxes”).

(c)                                  Subject
to Section 13.1(g), the Credit Parties shall indemnify and hold harmless each
Lender and Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 13.1) paid by such Lender or Agent and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted.  Payment under this
indemnification shall be made within ten (10) days from the date any Lender or
Agent makes written demand therefor.

(d)                                 If
any Credit Party shall be required by law to deduct or withhold any Taxes or
Other Taxes from or in respect of any sum payable hereunder to any Lender or
Agent, then, subject to Section 13.1(g):

(i)                                     the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 13.1), such Lender or Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions been made;

(ii)                                  such
Credit Party shall make such deductions; and

(iii)                               such
Credit Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

(e)                                  Within
ten (10) days after the date of any payment by any Credit Party of Taxes or
Other Taxes, Borrower shall furnish to Agent (and the applicable Lender) the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to Agent (and the applicable Lender).

(f)                                    Each
Lender that is not a citizen or resident of the United States of America, a
corporation, partnership or other entity created or organized in or under the
laws of the United States (or any jurisdiction thereof), or any estate or trust
that is subject to federal income taxation regardless of the source of its
income (a “Non-U.S. Lender”) shall deliver to
Borrower and  Agent two (2) copies of
each U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or any
subsequent versions thereof or successors thereto, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio
interest”, a Form W-8BEN, or any subsequent versions thereof or successors
thereto (and a certificate representing that such Non-U.S. Lender is not a “bank”
for purposes of Section 881(c) of the Code, is not a ten (10%) percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
Borrower and is not a controlled foreign corporation related to Borrower
(within the meaning of Section 864(d)(4) of the Code)), properly completed and
duly executed by such Non-U.S. Lender claiming complete exemption from, or a
reduced rate of, U.S. federal withholding tax on all payments by Borrower under
this Agreement and the other Loan Documents. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this 

 61
 

 

Agreement.  In addition, each Non-U.S. Lender shall
deliver such forms promptly upon the obsolescence or invalidity of any form
previously delivered by such Non-U.S. Lender. 
Each Non-U.S. Lender shall promptly notify Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to Borrower (or any other form of certification adopted
by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
section, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this subsection that such Non-U.S. Lender is not legally able to deliver.

(g)                                 Borrower
will not be required to pay any additional amounts in respect of United States
Federal income tax pursuant to Section 13.1(d) to any Lender for the account of
any Lending Office of such Lender:

(i)                                     if
the obligation to pay such additional amounts would not have arisen but for a
failure by such Lender to comply with its obligations under Section 13.1(f) in
respect of such Lending Office; or

(ii)                                  if
such Lender shall have delivered to Borrower a Form W-8BEN and/or Form W-8ECI
(or any subsequent versions thereof or successors thereto) in respect of such
Lending Office pursuant to Section 13.1(f), and such Lender shall not at any
time be entitled to exemption from deduction or withholding of United States
Federal income tax in respect of payments by Borrower hereunder for the account
of such Lending Office for any reason other than a change in United States law,
treaty or regulations or in the official interpretation of such law or
regulations by any Governmental Authority charged with the interpretation or
administration thereof (whether or not having the force of law) after the date
of delivery of such Form W-8BEN and/or Form W-8ECI (or any subsequent versions
thereof or successors thereto).

(h)                                 If,
at any time, Borrower requests any Lender to deliver any forms or other
documentation pursuant to Section 13.1(f), then Borrower shall, on demand of
such Lender through Agent, reimburse such Lender for any costs and expenses
(including attorneys’ fees and expenses) reasonably incurred by such Lender in
the preparation or delivery of such forms or other documentation.

(i)                                     If
Borrower is required to pay additional amounts to any Lender or Agent pursuant
to Section 13.1(d), then such Lender shall use its reasonable efforts
(consistent with legal and regulatory restrictions) to change the jurisdiction
of its Lending Office so as to eliminate any such additional payment by
Borrower which may thereafter accrue if such change in the judgment of such
Lender is not otherwise disadvantageous to such Lender.

13.2                        Certificates
of Lenders.

Any Lender claiming reimbursement or compensation
pursuant to this Article XIII shall deliver to Borrower (with a copy to Agent)
a certificate setting forth in reasonable detail the amount payable to such
Lender hereunder and such certificate shall be conclusive and binding on the
Credit Parties in the absence of manifest error.

 62
 

 

13.3                        Survival.

The agreements and obligations of the Credit Parties
in this Article XIII shall survive the payment of all other Obligations.

13.4                        Replacement
of Lender in Respect of Increased Costs.

Within forty-five (45) days after receipt by Borrower
of written notice and demand from any Lender (an “Affected
Lender”) for payment of additional costs as provided in Section
13.1, Borrower may, at its option, notify Agent and such Affected
Lender of Borrower’s intention to obtain, at Borrower’s expense, a
replacement Lender (“Replacement Lender”)
for such Affected Lender, which Replacement
Lender shall be reasonably satisfactory to Agent.  In the event Borrower obtains a Replacement
Lender within ninety (90) days following notice of its intention to do so, the
Affected Lender shall sell and assign its Loans and Commitments to such
Replacement Lender, provided that Borrower has reimbursed such Affected Lender
for its increased costs for which it is entitled to reimbursement under this
Agreement through the date of such sale and assignment.

XIV.                       GUARANTY

14.1                        Guaranty

Each Guarantor jointly and severally hereby
unconditionally and irrevocably guarantees the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
each other Credit Party, including, without limitation, Borrower, now or
hereafter existing under any Loan Document, whether for principal, interest
(including, without limitation, all interest that accrues after the
commencement of any proceeding of Borrower or any other Credit Party under any
Debtor Relief Laws), fees, commissions, expense reimbursements,
indemnifications or otherwise (such obligations, to the extent not paid by
Borrower, the “Guaranteed Obligations”), and
agrees to pay any and all costs, fees and expenses (including counsel fees and
expenses) incurred by Agent and Lenders in enforcing any rights under the
guaranty set forth in this Article XIV. 
Without limiting the generality of the foregoing, each Guarantor’s
liability shall extend to all amounts that constitute part of the Guaranteed
Obligations and would be owed by Borrower or any other Credit Party to Agent
and Lenders under any Loan Document, but for the fact that they are
unenforceable or not allowable due to the existence of any proceeding under any
Debtor Relief Laws involving Borrower or any other Credit Party.  This guaranty is a guaranty of payment and
not of collection.

Should a claim be made upon Agent or any Lender at any
time for repayment of any amount received by Agent or any Lender in payment of
the Obligations, or any part thereof, whether received from any Credit Party or
received by Agent or any Lender as the proceeds of Collateral, by reason
of:  (i) any judgment, decree or order of
any court or administrative body having jurisdiction over Agent or any Lender
or any of their property, or (ii) any settlement or compromise of any such
claim effected by Agent or any Lender, in its sole discretion, with the
claimant (including a Credit Party), each Guarantor shall remain liable to
Agent or any such Lender for the amount so repaid to the same extent as if such
amount had never originally been 

 63
 

 

received by Agent or any
such Lender, notwithstanding any termination hereof or the cancellation of any
note or other instrument evidencing any of the Obligations.

14.2                        Guaranty
Absolute

Each Guarantor jointly and severally guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms
of the Loan Documents, regardless of any law regulation or order now or
hereafter in effect in any jurisdiction affecting any such terms or the rights
of Agent or Lenders with respect thereto. 
The obligations of each Guarantor under this Article XIV are
independent of the Guaranteed Obligations of the other Guarantors, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce such obligations, irrespective of whether any action is brought
against any Credit Party or whether any Credit Party is joined in any such
action or actions.  The liability of each
Guarantor under this Article XIV shall be irrevocable, absolute and
unconditional irrespective of, and each Guarantor hereby irrevocably waives any
defenses it may now or hereafter have in any way relating to, any or all of the
following:

(a)                                  any
lack of validity or enforceability of any Loan Document or any agreement or
instrument relating thereto;

(b)                                 the
absence of any attempt to collect the Obligations from any other Credit Party,
or the absence of any other action to enforce the same;

(c)                                  the
failure by Agent and/or any Lender to take any steps to perfect and maintain
its security interest in, or to preserve its rights to, any security or
collateral for the Obligations of any other Credit Party;

(d)                                 any
change in the time, manner or place of payment of, or in any other term of, all
or any of the Guaranteed Obligations, or any other amendment or waiver of or
any consent to departure from any Loan Document, including, without limitation,
any increase in the Guaranteed Obligations resulting from the extension of additional
credit to any Credit Party or otherwise;

(e)                                  any
taking, exchange or release of a Lien on, any Collateral, or any taking,
release or amendment or waiver of or consent to departure from any other
guarantee, for all or any of the Guaranteed Obligations;

(f)                                    any
change, restructuring or termination of the corporate, limited liability
company or partnership structure or existence of any Credit Party;

(g)                                 Agent’s
and/or any Lender’s election, in any proceeding instituted under the Bankruptcy
Code, of the application of Section 1111(b)(2) of the Bankruptcy Code;

(h)                                 any
borrowing or grant of a security interest by any other Credit Party, as
debtor-in-possession under Section 364 of the Bankruptcy Code;

 64
 

 

(i)                                     the
disallowance of all or any portion of Agent’s and/or any Lender’s claim(s) for
the repayment of the Obligations of any other Credit Party under Section 502 of
the Bankruptcy Code; or

(j)                                     any
other circumstance (including, without limitation, any statute of limitations)
or any existence of or reliance on any representation by Agent or Lenders that
might otherwise constitute a defense available to, or a discharge of, any
Credit Party or any other guarantor or surety.

This Article XIV shall continue to be effective
or be reinstated, as the case may be, if at any time any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned to Agent or
Lenders or any other Person upon the insolvency, bankruptcy or reorganization
of Borrower or any other Credit Party or otherwise, all as though such payment
had not been made.

14.3                        Waivers

Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Article XIV and any requirement that Agent or
Lenders marshal any assets in favor of any Credit Party or against or in
payment of any or all of the Obligations, exhaust any right or take any action
against any other Credit Party, any other Person or any Collateral.  During the existence of any Event of Default,
Agent may proceed directly and at once, without notice, against any Credit
Party to collect and recover the full amount, or any portion of the
Obligations, without first proceeding against any other Credit Party or any
other Person, or against any security or collateral for the Obligations.  Each Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated herein and that the waiver set forth in this Section 14.3 is
knowingly made in contemplation of such benefits.  Each Guarantor hereby waives any right to
revoke this Article XIV, and acknowledges that this Article XIV
is continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.

If bankruptcy or reorganization proceedings at any
time are instituted by or against any Credit Party under any Debtor Relief Law,
then each Guarantor hereby: (i) expressly and irrevocably agrees not to assert
any and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification, set off or any other rights that could accrue to
a surety against a principal, to a guarantor against a maker or obligor, to an
accommodation party against the party accommodated, to a holder or transferee
against a maker, or to the holder of a claim against any Person, and which such
Guarantor may have or hereafter acquire against any Person in connection with
or as a result of such Credit Party’s execution, delivery and/or performance of
this Agreement, or any other documents to which such Credit Party is a party or
otherwise, until the full performance and satisfaction, and indefeasible
payment in full in cash, of all Obligations (other than contingent
indemnification Obligations to the extent no claim giving rise thereto has been
asserted) and the termination of the Commitments and this Agreement; (ii)
expressly and irrevocably agrees that it shall not assert any such rights
against any other Credit Party or Person (including any surety), either
directly or as an attempted set off to any action commenced against such Credit
Party or Person by Agent or a Lender or any other Person, until the full
performance and satisfaction, and indefeasible 

 65
 

 

payment in full in cash,
of all Obligations (other than contingent indemnification Obligations to the
extent no claim giving rise thereto has been asserted) and the termination of
the Commitments and this Agreement; and (iii) acknowledges and agrees (A) that
this waiver is intended to benefit Agent and Lenders and shall not limit or
otherwise affect such Guarantor’s liability hereunder or the enforceability of
this Agreement, and (B) that Agent and Lenders and their successors and assigns
are intended beneficiaries of this waiver, and the agreements set forth in this
Section 14.3 and their rights under this Section 14.3 shall survive payment in
full of the Obligations.

EACH GUARANTOR WAIVES THE FILING OF A CLAIM WITH A
COURT IN THE EVENT OF RECEIVERSHIP OR BANKRUPTCY OF ANY CREDIT PARTY, AND
WAIVES EVERY DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF WHICH SUCH
GUARANTOR MAY NOW HAVE OR HEREAFTER MAY HAVE TO ANY ACTION BY AGENT OR ANY
LENDER IN ENFORCING THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, EVERY
DEFENSE, COUNTERCLAIM OR SETOFF WHICH SUCH GUARANTOR MAY NOW HAVE, OR HEREAFTER
MAY HAVE, AGAINST ANOTHER CREDIT PARTY OR ANY OTHER PARTY LIABLE TO AGENT OR
ANY LENDER IN ANY MANNER.  AS FURTHER
SECURITY, ANY AND ALL DEBTS AND LIABILITIES NOW OR HEREAFTER ARISING AND OWING
TO GUARANTOR BY ANY OTHER CREDIT PARTY, OR TO ANY OTHER PARTY LIABLE TO AGENT
OR ANY LENDER, ARE HEREBY SUBORDINATED TO AGENT’S AND ANY SUCH LENDER’S CLAIMS
AND UPON THE OCCURRENCE OF AN EVENT OF DEFAULT ARE ASSIGNED TO AGENT FOR THE
BENEFIT OF LENDERS.  EACH GUARANTOR
RATIFIES AND CONFIRMS WHATEVER AGENT OR A LENDER MAY DO PURSUANT TO THE TERMS
HEREOF, AND AGREES THAT NEITHER AGENT NOR ANY LENDER SHALL BE LIABLE FOR ANY
ERROR IN JUDGMENT OR MISTAKES OF FACT OR LAW. 
EACH GUARANTOR HEREBY AGREES THAT IT MAY BE JOINED AS A PARTY DEFENDANT
IN ANY LEGAL PROCEEDING (INCLUDING, BUT NOT LIMITED TO, A FORECLOSURE
PROCEEDING) INSTITUTED BY AGENT OR ANY LENDER AGAINST ANY OTHER CREDIT PARTY.

14.4                        Continuing
Guaranty; Assignments

This Article XIV is a continuing guaranty and
shall (a) remain in full force and effect until the indefeasible payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Article XIV and the termination of this Agreement, (b) be binding
upon each Guarantor, its successors and assigns and (c) inure to the benefit
of, and be enforceable by, Agent and Lenders and their respective successors,
pledgees, transferees and assigns. 
Without limiting the generality of the foregoing clause (c), any Lender
may pledge, assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Commitments and the Loans owing to it) to any other Person, and
such other Person shall thereupon become vested with all the benefits in
respect thereof granted such Lender herein or otherwise, in each case as
provided in this Agreement.

 66
 

 

14.5                        Maximum
Liability

The provisions of this Guaranty are severable, and in
any action or proceeding involving any state corporate law, or any Debtor
Relief Law, if the obligations of any Guarantor under this Guaranty would
otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of such Guarantor’s liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the Guarantors or
the Lenders, be automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding (such highest
amount determined hereunder being the relevant Guarantor’s “Maximum Liability”).  This Section with respect to the Maximum
Liability of each Guarantor is intended solely to preserve the rights of the
Lenders to the maximum extent not subject to avoidance under applicable law,
and no Guarantor nor any other person or entity shall have any right or claim
under this Section with respect to such Maximum Liability, except to the extent
necessary so that the obligations of any Guarantor hereunder shall not be
rendered voidable under applicable law. 
Each Guarantor agrees that the Guaranteed Obligations may at any time
and from time to time exceed the Maximum Liability of each Guarantor without
impairing this Guaranty or affecting the rights and remedies of the Lender
Parties hereunder, provided that, nothing in this sentence shall be construed
to increase any Guarantor’s obligations hereunder beyond its Maximum Liability.

In furtherance of the foregoing, to the extent that
any Guarantor shall, under this Agreement as a Guarantor, repay any Obligations
with respect to which such Guarantor has not received reasonably equivalent
value (an “Accommodation Payment”), then the
Guarantor making such Accommodation Payment shall be entitled to contribution
and indemnification from, and be reimbursed by, each of the other Credit
Parties in an amount, for each of such other Credit Parties, equal to a
fraction of such Accommodation Payment, the numerator of which fraction is such
other Credit Party’s Allocable Amount and the denominator of which is the sum
of the Allocable Amounts of all of the Credit Parties.  As of any date of determination, the “Allocable Amount” of each Credit Party shall be equal to
the maximum amount of liability for Accommodation Payments which could be
asserted against such Credit Party hereunder without (i) rendering such Credit
Party “insolvent” within the meaning of Section 101 (31) of the Bankruptcy
Code, Section 2 of the Uniform Fraudulent Transfer Act (“UFTA”)
or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”),
(ii) leaving such Credit Party with unreasonably small capital or assets,
within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA
or Section 5 of the UFCA, or (iii) leaving such Credit Party unable to pay its
debts as they become due within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA or Section 5 of the UFCA.  All rights and claims of contribution,
indemnification, and reimbursement under this Section 14.5 shall be subordinate
in right of payment to the prior indefeasible payment in full in cash of the
Obligations.  The provisions of this
Section 14.5 shall, to the extent inconsistent with any provision in any Loan
Document, supersede such inconsistent provision.

To the extent that any payment to, or realization by,
any Lender or Agent on the Obligations exceeds the limitations of this Section
14.5 and is otherwise subject to avoidance and recovery in any such proceeding,
the amount subject to avoidance shall in all events be limited to the amount by
which such actual payment or realization exceeds such limitation, and this 

 67
 

 

Agreement as limited
shall in all events remain in full force and effect and be fully enforceable
against such Credit Party.  This Section
14.5 is intended solely to reserve the rights of Lenders and Agent hereunder
against each Guarantor, in such proceeding to the maximum extent permitted by
applicable Debtor Relief Laws and no Credit Party, guarantor of the Obligations
or other Person shall have any right, claim or defense under this Section 14.5
that would not otherwise be available under applicable Debtor Relief Laws in
such proceeding.

14.6                        Subordination

Each of the Guarantors hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, the
payment of any amounts due with respect to the indebtedness owing by Borrower
to a Guarantor or by amounts due with respect to the indebtedness owing by
Borrower to a Guarantor or by any Guarantor to any other Guarantor is hereby
subordinated to the prior payment in full in cash of the Obligations.  Each Guarantor hereby agrees that, after the
occurrence and during the continuance of any Default or Event of Default, such
Guarantor shall not demand, sue for or otherwise attempt to collect any
indebtedness of Borrower or any other Guarantor owing to such Guarantor until
the Obligations shall have been paid in full in cash.  If, notwithstanding the foregoing sentence,
such Guarantor shall collect, enforce or receive any amounts in respect of such
indebtedness, such amounts shall be collected, enforced and received by such
Guarantor as trustee for the Lender Parties, and such Guarantor shall deliver
any such amounts to Agent for application to the Obligations.

14.7                        Subrogation

No Guarantor shall exercise any rights that it may now
have or hereafter acquire against any other Credit Party or any other guarantor
or that arise from the existence, payment, performance or enforcement of such
Guarantor’s obligations under this Article XIV, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution
or indemnification and any right to participate in any claim or remedy of Agent
and Lenders against any other Credit Party or any other Guarantor or any Collateral,
whether or not such claim, remedy or right arises in equity or under contract,
statute or common law, including, without limitation, the right to take or
receive from any other Credit Party or any other Guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security solely on account of such claim, remedy or right, unless
and until all of the Guaranteed Obligations and all other amounts payable under
this Article XIV shall have been indefeasibly paid in full in cash and
all Commitments to lend hereunder shall have terminated; provided, however, no
Guarantor shall have any rights hereunder against any other Guarantor if all or
any portion of the Guaranteed Obligations shall have been satisfied with
proceeds from the exercise of remedies in respect of the Capital Stock of such
Guarantor pursuant to a Pledge Agreement. 
If any amount shall be paid to any Guarantor in violation of the
immediately preceding sentence, such amount shall be held in trust for the
benefit of Agent and Lenders and shall forthwith be paid to Agent to be
credited and applied to the Guaranteed Obligations and all other amounts
payable under this Article XIV, whether matured or unmatured, in
accordance with the terms of this Agreement, or to be held as Collateral for
any Guaranteed Obligations or other amounts payable under this Article XIV
thereafter arising.  If (i) any Guarantor
shall make payment to Agent and Lenders of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Article XIV shall be paid in full in cash and 

 68
 

 

(iii) all Commitments to
lend hereunder shall have been terminated, Agent and Lenders will, at such
Guarantor’s request and expense, execute and deliver to such Guarantor or
appropriate documents, without recourse and without representation or warranty,
reasonably necessary to evidence the transfer by subrogation to such Guarantor
of an interest in the Guaranteed Obligations resulting from such payment by
such Guarantor.

[REMAINDER
OF PAGE INTENTIONALLY BLANK; SIGNATURE PAGES FOLLOW]

 69

 

IN WITNESS WHEREOF, each of the parties has duly
executed this Credit Agreement as of the date first written above.

	
  BORROWER:

  	
   

  	
  A.D.A.M., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  

 

	
  

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
  INTEGRATIVE MEDICINE 

  COMMUNICATIONS, INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
  NIDUS INFORMATION SERVICES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
					

 

 

	
  GUARANTOR:

  	
   

  	
  ONLINE BENEFITS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
					

 

	
  GUARANTOR:

  	
   

  	
  BENERGY OUTSOURCING STRATEGIES,

  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTOR:

  	
   

  	
  CAPTIVA SOFTWARE, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
  1600 RiverEdge Parkway, Suite 100

  
	
   

  	
   

  	
  Atlanta, Georgia 30328

  
	
   

  	
   

  	
  Attention:

  	
  Kevin S. Noland

  
	
   

  	
   

  	
  Telephone:

  	
  (770) 541-5145

  
	
   

  	
   

  	
  FAX:

  	
  (770) 988-0611

  
	
   

  	
   

  	
  E-MAIL:

  	
  ksnoland@adamcorp.com

  
					

 

 

 

	
  AGENT AND A LENDER:

  	
   

  	
  CAPITALSOURCE FINANCE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CapitalSource Finance LLC

  
	
   

  	
   

  	
  4445 Willard Avenue, 12th Floor

  
	
   

  	
   

  	
  Chevy Chase, Maryland 20815

  
	
   

  	
   

  	
  Attention:

  	
  Corporate Finance Group, Portfolio Manager

  
	
   

  	
   

  	
  Telephone:

  	
  (301) 841-2700

  
	
   

  	
   

  	
  FAX:

  	
  (301) 841-2313

  
	
   

  	
   

  	
  E-MAIL:

  	
  dzimmerman@capitalsource.com

  
					

 

Appendix A

Definitions

Appendix B

Letters of Credit

EXHIBITS

	
  Exhibit A

  	
   

  	
  Form of Borrowing Certificate

  
	
  Exhibit B-1

  	
   

  	
  Financial Covenants

  
	
  Exhibit B-2

  	
   

  	
  Form of Compliance Certificate

  
	
  Exhibit C-1

  	
   

  	
  Reporting Requirements

  
	
  Exhibit C-2

  	
   

  	
  Collateral Reporting and Other Requirements

  
	
  Exhibit D

  	
   

  	
  Closing Conditions

  
	
  Exhibit E

  	
   

  	
  LIBOR Election Notice

  

SCHEDULES

	
  Schedule A

  	
   

  	
  Lenders/Commitments

  
	
  Schedule 5.3

  	
   

  	
  Subsidiaries, Capitalization and Ownership Interests

  
	
  Schedule 5.4

  	
   

  	
  Properties and Locations

  
	
  Schedule 5.6

  	
   

  	
  Litigation

  
	
  Schedule 5.11

  	
   

  	
  Intellectual Property

  
	
  Schedule 5.14

  	
   

  	
  Insurance

  
	
  Schedule 5.16

  	
   

  	
  Broker’s or Finder’s Commissions

  
	
  Schedule 6.7

  	
   

  	
  Further Assurances and Post Closing Deliverables

  
	
  Schedule 7.2

  	
   

  	
  Permitted Indebtedness

  
	
  Schedule 7.3

  	
   

  	
  Permitted Liens

  

 

Schedule 6.7

Post Closing Deliverables

In accordance with Section 6.7 of the Agreement, the
following actions, items and deliverables, which were not completed on or
before the Closing Date as otherwise required by the Agreement, shall be
completed, taken and/or delivered to Required Lenders’ satisfaction on or
before the respective dates specified below. 
The Credit Parties acknowledge that the Lenders are accommodating them
by permitting the Credit Parties to complete the following actions, items and
deliverables on a post-Closing basis.  As
such, the failure to take, comply with or provide any of the actions or items
referred to below on or before the respective due date set forth below shall
constitute an immediate Event of Default under the Agreement, without further
notice or action by or on behalf of Agent, any Lender or any other Person.  Nothing in this Schedule 6.7 shall
limit the effect of any provision of the Agreement or the Credit Parties’
obligations thereunder.  Capitalized
terms used but not otherwise defined in this Schedule 6.7 shall have the
meanings assigned to it in the Agreement.

1.             Borrower
shall cause the original stock certificates of Benergy and Captiva to be
delivered to or as directed to Agent within one (1) Business Day after the
Closing Date.  Borrower shall pay to
Agent a fee of $10,000 for each day after such Business Day that such original
stock certificates have not been delivered to Agent.

2.             On
or before September 14, 2006 Borrower shall deliver to Agent either (i) an
Account Control Agreement executed by Bank of America and the applicable Credit
Party covering all deposit and other accounts maintained by the Credit Parties
at Bank of America or (ii) evidence that all such deposit and other accounts
have been closed.  Until such Account Control
Agreement or evidence is delivered, no Credit Party shall permit the aggregate
amount of cash and other investments maintained in such deposit and other
accounts to exceed $150,000 at any time.

 

Exhibit A

Form of Borrowing Certificate

Please see attached.

 

BORROWING CERTIFICATE

DATED AS OF            ,
20    

Reference
is made to that certain Credit Agreement dated as of August 14, 2006 (as
amended through the date hereof, the “Credit Agreement”) by and among
A.D.A.M., Inc., a Georgia corporation, the other Credit Parties party thereto,
the financial institutions from time to time parties thereto, as Lenders
thereunder, and CapitalSource Finance
LLC, a Delaware limited liability company, as administrative agent for
the Lenders.  All capitalized terms used
but not elsewhere defined herein shall have the respective meanings ascribed to
such terms in the Credit Agreement.

In
accordance with Section 4.2 of the Credit Agreement, Borrower hereby
irrevocably requests an Advance in the amount of $        
to be made on              ,
20    (the “Borrowing Date”), which day is a
Business Day.

In
connection with the requested Advance, Borrower, by the undersigned duly
authorized officer, hereby certifies to Agent and Lenders, in accordance with
the Credit Agreement and the other Loan Documents, that:

(a)           The
certifications, representations, calculations and statements herein will be
true and correct in all respects as of the date hereof and as of the Borrowing
Date;

(b)           each
of the representations and warranties made by each Credit Party and each other
Person party thereto (other than Agent and Lenders) in the Loan Documents are
true and correct in all respects before and after giving effect to funding of
the requested Advance (except to the extent such representations and warranties
expressly relate to an earlier date, in which case they shall have been true
and correct in all material respects as of such earlier date);

(c)           no
Default or Event of Default shall have occurred and be continuing or will exist
after giving effect to the requested Advance on the Borrowing Date;

(d)           immediately
after giving effect to the requested Advance, the aggregate outstanding
principal amount of Advances under the Revolving Facility shall not exceed the
Facility Cap then in effect less the Letter of Credit Usage then in effect;

(e)           no
liabilities or obligations with respect to any Credit Party of any nature exist
which, either individually or in the aggregate, reasonably could be likely to
have or result in a Material Adverse Effect and, since the date of the most
recent audited financial statements delivered to Agent and Lenders under the
Credit Agreement, no Material Adverse Effect has occurred; and

(f)            if the Borrowing Date for the
requested Advance is on or after the date Agent and Lenders have received the
Compliance Certificate for the calendar quarter ending September 30, 2006,
then, assuming such Advance had been made on the last day

 

of the calendar quarter most recently ended prior to
the Borrowing Date for which Agent and Lenders have received a Compliance
Certificate, the Leverage Ratio would have been less than or equal to     :1.00
as of such day (i.e., the maximum ratio set forth in Item 1 of Exhibit B-1 of
the Credit Agreement for the calendar quarter most recently ended prior to such
day), as demonstrated by the calculation attached hereto.

IN
WITNESS WHEREOF, the undersigned has caused this Borrowing
Certificate to be executed on behalf of the Credit Parties as of the date first
written above.

	
   

  	
  A.D.A.M., INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
  Title:

  	
  CEO

  

 

 

BORROWING CERTIFICATE

Date:
                 ,
20    (the “Computation Date”)

CALCULATION
OF EBITDA

Three Month Period Ending December
31, 2006

Six Month Period Ending March 31,
2007

Nine Month Period Ending June 30,
2007

or

Twelve Month Period Ending on
September 30, 2007

or the last day of any calendar quarter thereafter

(each, a “Computation Period”)

	
  EBITDA for the
  applicable Computation Period is defined as follows (all of the following
  determined in accordance with GAAP):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Net income (or loss) of Borrower and its
  Subsidiaries on a consolidated basisfor such
  Computation Period taken as a single accounting period determined in
  conformity with GAAP, excluding (i) the income (or loss) of any Person
  in which Borrower or any of its Subsidiaries has a joint interest, except to
  the extent of the amount of dividends or other distributions actually paid in
  cash to Borrower or such Subsidiary by such Person during such Computation
  Period, (ii) the income (or loss) of any Person accrued prior to the date it becomes a Credit Party or
  is merged into or consolidated with a Credit Party or that Person’s assets
  are acquired by Borrower or any Subsidiary of Borrower that is a Credit
  Party, (iii) the income of any Subsidiary of Borrower to the extent that the
  declaration or payment of dividends or similar distributions of that income
  by that Subsidiary is not at the time permitted by operation of the terms of
  the charter or any agreement, instrument, judgment, decree, order, statute,
  rule or governmental regulation applicable to that Subsidiary, (iv)
  compensation expense resulting from the issuance of capital stock,
  equity-related incentives, stock options, stock appreciation rights or
  similar incentive compensation issued to former or current employees,
  including officers, of any Credit Party, or the exercise of such options or
  rights, in each case to the extent the obligation (if any) associated
  therewith is not expected to be settled by the payment of cash by any Credit
  Party or any Affiliate thereof prior to the sale of all or substantially all
  of the assets or equity of the Credit Parties, and (v) compensation
  expense resulting from the repurchase of capital stock, equity options and
  rights described in clause (iv) of this definition (“Net
  Income”)

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:  

  	
  “Interest Expense” for such Computation
  Period (defined as total interest expense generated during the Computation Period
  

  	
   

  	
   

  
				

 

 

	
   

  	
  (including attributable to conditional sales
  contracts, Capital Leases and other title retention agreements in accordance
  with GAAP) of Borrower and its Subsidiaries on a consolidated basis with
  respect to all outstanding Indebtedness, including accrued interest, interest
  paid in kind, cash fees due or payable with respect to such Indebtedness and
  capitalized interest and fees owed with respect to letters of credit, but
  excluding commissions, discounts and fees owed with respect to bankers’
  acceptance financing, and net costs under Qualifying Interest Rate
  Agreements), in each case to the extent deducted in determining such Net
  Income)

  	
   

  	
  $          

  
	
  Plus:

  	
  franchise, income and other taxes and similar charges to the extent
  deducted in determining such Net Income

  	
   

  	
  $          

  
	
  Plus:

  	
  depreciation and amortization expense to the extent deducted in
  determining such Net Income

  	
   

  	
  $          

  
	
  Plus:

  	
  all other non-cash and/or non-recurring charges and expenses
  (including non-cash charges resulting from an increase in inventory as a
  result of the application of FASB Statement 141 and non-cash charges arising
  by reason of “impairment losses” under FASB Statement 142 and FASB Statement
  144) approved by Agent in its Permitted Discretion and otherwise to the
  extent deducted in determining such Net Income, but specifically excluding
  (A) accruals for cash expenses made in the Ordinary Course of Business and
  (B) write-offs of accounts receivable

  	
   

  	
  $          

  
	
  Plus:

  	
  loss from any sale of assets, other than sales of inventory in the
  Ordinary Course of Business, to the extent deducted in determining such Net
  Income

  	
   

  	
  $          

  
	
  Plus:

  	
  extraordinary losses to the extent deducted in determining such Net
  Income

  	
   

  	
  $          

  
	
  Less:

  	
  gain from any sale of assets, other than sales in the Ordinary Course
  of Business, to the extent included in determining such Net Income

  	
   

  	
  $          

  
	
  Less:

  	
  extraordinary gains to
  the extent included in determining such Net Income

  	
   

  	
  $          

  
	
  Less:

  	
  all non-cash and/or non-recurring revenue to the extent included in
  determining such Net Income

  	
   

  	
  $          

  

 

 

 

	
  Less:

  	
  proceeds of insurance (other than business
  interruption insurance) to the extent included in determining such Net Income

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  EBITDA for the
  Computation Period:

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Minimum EBITDA
  for the Computation Period required under Credit Agreement

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

LEVERAGE RATIO

	
  Total
  Indebtedness of the Credit Parties on a consolidated basis at the Computation
  Date, including, without limitation, all Indebtedness under the Loan
  Documents, in each case together with all accrued interest thereon
  (including, without limitation, all interest paid in kind), and all Capital
  Lease Obligations, and including, without duplication, Contingent Obligations
  consisting of guarantees of Indebtedness that otherwise would constitute
  Total Debt of other Persons and all discounts, deductions or allocations
  relating or applicable to or arising from any equity or equity participation
  or fees, whether under GAAP or otherwise, plus the amount of the
  requested Advance (“Total Debt”)

  	
   

  	
   

  $           

  
	
   

  	
   

  	
   

  
	
  EBITDA for the
  Computation Period (as calculated in the manner set forth above) multiplied
  by (a) 4.00 if the Computation Date is December 31, 2006, (b) 2.00 if the
  Computation Date is March 31, 2007, (c) 1.34 if the Computation Date is June
  30, 2007 and (d) 1.00 if the Computation Date is September 30, 2007 or the
  last day of any calendar quarter thereafter

  	
   

  	
   

  $           

  
	
   

  	
   

  	
   

  
	
  Leverage Ratio
  (Total Debt divided by EBITDA) on the Computation Date

  	
   

  	
       to 1.00

  
	
   

  	
   

  	
   

  
	
  Maximum Leverage
  Ratio for the applicable period permitted under Credit Agreement

  	
   

  	
       to 1.00

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

 

 

Exhibit
B-1

Financial
Covenants

1.             Minimum EBITDA.  No Credit Party shall permit EBITDA for the
Computation Period (as defined in Exhibit B-2) ending on any date set forth in
the table below to be less than the minimum amount set forth in the table below
opposite such date:

	
  Date

  	
   

  	
  Minimum EBITDA

  	
   

  
	
  December 31,
  2006

  	
   

  	
  $

  	
  1,599,000

  	
   

  
	
  March 31, 2007

  	
   

  	
  $

  	
  3,122,000

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  4,812,000

  	
   

  
	
  September 30,
  2007

  	
   

  	
  $

  	
  6,605,000

  	
   

  
	
  December 31,
  2007

  	
   

  	
  $

  	
  7,021,000

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  7,467,000

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  8,132,000

  	
   

  
	
  September 30,
  2008

  	
   

  	
  $

  	
  8,250,000

  	
   

  
	
  December 31,
  2008

  	
   

  	
  $

  	
  8,500,000

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  8,750,000

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  9,000,000

  	
   

  
	
  September 30,
  2009

  	
   

  	
  $

  	
  9,250,000

  	
   

  
	
  December 31, 2009 and
  the last day of each calendar quarter thereafter

  	
   

  	
  $

  	
  9,500,000

  	
   

  

“EBITDA” shall be
calculated in the manner set forth on Exhibit B-2.

2.             Leverage Ratio.  No Credit Party shall permit the Leverage
Ratio as of any date set forth below to exceed the maximum ratio set forth in
the table below opposite such date:

	
  Date

  	
   

  	
  Maximum Leverage Ratio

  	
   

  
	
  December 31,
  2006

  	
   

  	
  4.10

  	
   

  
	
  March 31, 2007

  	
   

  	
  4.10

  	
   

  
	
  June 30, 2007

  	
   

  	
  4.05

  	
   

  
	
  September 30,
  2007

  	
   

  	
  3.95

  	
   

  
	
  December 31,
  2007

  	
   

  	
  3.50

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.15

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.90

  	
   

  
	
  September 30,
  2008

  	
   

  	
  2.70

  	
   

  
	
  December 31,
  2008

  	
   

  	
  2.45

  	
   

  
	
  March 31, 2009

  	
   

  	
  2.30

  	
   

  
	
  June 30, 2009

  	
   

  	
  2.05

  	
   

  
	
  September 30,
  2009

  	
   

  	
  1.85

  	
   

  
	
  December 31,
  2009

  	
   

  	
  1.70

  	
   

  
	
  March 31, 2010

  	
   

  	
  1.60

  	
   

  
	
  June 30, 2010

  	
   

  	
  1.50

  	
   

  
	
  September 30,
  2010

  	
   

  	
  1.40

  	
   

  
	
  December 31,
  2010

  	
   

  	
  1.25

  	
   

  
	
  March 31, 2011

  	
   

  	
  1.15

  	
   

  
	
  June 30, 2011 and the
  last day of each calendar quarter thereafter

  	
   

  	
  1.00

  	
   

  

 1
 

 

The “Leverage Ratio”
shall be calculated in the manner set forth in Exhibit B-2.

3.             Fixed Charge Coverage Ratio.  No Credit Party shall permit the Fixed Charge
Coverage Ratio as of any date set forth in the table below to be less than the
minimum ratio set forth in the table below opposite such date:

	
  Date

  	
   

  	
  Minimum Fixed Charge Coverage Ratio

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.05

  	
   

  
	
  March 31, 2007

  	
   

  	
  2.20

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.30

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.40

  	
   

  
	
  December 31, 2007

  	
   

  	
  1.85

  	
   

  
	
  March 31, 2008

  	
   

  	
  1.50

  	
   

  
	
  June 30, 2008

  	
   

  	
  1.35

  	
   

  
	
  September 30, 2008

  	
   

  	
  1.25

  	
   

  
	
  December 31, 2008

  	
   

  	
  1.30

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.40

  	
   

  
	
  June 30, 2009

  	
   

  	
  1.45

  	
   

  
	
  September 30, 2009 and
  the last day of each calendar quarter thereafter

  	
   

  	
  1.50

  	
   

  

The “Fixed Charge
Coverage Ratio” shall be calculated in the manner set forth in Exhibit B-2.

4.             Interest Coverage Ratio.  No Credit Party shall permit the Interest
Coverage Ratio as of any date set forth in the table below to be less than the
minimum ratio set forth in the table below opposite such date:

	
  Date

  	
   

  	
  Minimum Interest Coverage Ratio

  	
   

  
	
  December 31, 2006

  	
   

  	
  2.75

  	
   

  
	
  March 31, 2007

  	
   

  	
  2.75

  	
   

  
	
  June 30, 2007

  	
   

  	
  2.80

  	
   

  
	
  September 30, 2007

  	
   

  	
  2.90

  	
   

  
	
  December 31, 2007

  	
   

  	
  3.10

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.35

  	
   

  
	
  June 30, 2008 and the
  last day of each calendar quarter thereafter

  	
   

  	
  3.50

  	
   

  

 

 2
 

 

The “Interest Coverage
Ratio” shall be calculated in the manner set forth in Exhibit B-2.

5.             Capital Expenditures.  No Credit Party shall make or commit to make
Capital Expenditures for any fiscal year (or shorter period) set forth in the
table below in an aggregate amount exceeding the dollar limitation set forth in
the table below with respect to
such fiscal year (or shorter period):

	
  Fiscal Year/Period:

  	
   

  	
  Limitation

  	
   

  
	
  Fiscal year
  ending December 31, 2006

  	
   

  	
  $

  	
  450,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Fiscal year
  ending December 31, 2007

  	
   

  	
  $

  	
  1,200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Each fiscal year
  thereafter

  	
   

  	
  $

  	
  1,200,000

  	
   

  

 

 3

 

Exhibit B-2

Form of Compliance Certificate

Please See Attached

 

 

COMPLIANCE CERTIFICATE

A.D.A.M., Inc.

Date:           ,
       .

This Compliance
Certificate (this “Certificate”) is given by A.D.A.M., Inc., a Georgia
corporation (the “Borrower”),
pursuant to Section 6.1(a) of that certain Credit Agreement dated as of August
14, 2006 (as the same has been amended, modified, supplemented or restated
through the date hereof, the “Credit Agreement”) among Borrower, the other
Credit Parties, CapitalSource Finance LLC, a Delaware limited liability
company, in its capacity as administrative agent for the Lenders (in such
capacity, “Agent”), and the Lenders thereunder. 
Capitalized terms used herein without definition shall have the meanings
set forth in the Credit Agreement.

The officer executing
this Certificate is the                     
of Borrower, and as such is duly authorized to execute and deliver this
Certificate on behalf of Borrower.  By so
executing this Certificate, the Borrower hereby certifies to the Lender Parties
that:

(a)           the
financial statements delivered with this Certificate in accordance with
subsection 6.1(a) of the Credit Agreement fairly present in all material
respects the consolidated results of operations and financial condition of the
Borrower as of, and for the respective periods ending on, the dates of such
financial statements;

(b)           Borrower
has reviewed the relevant terms of the Loan Documents and the condition of
Borrower and the other Credit Parties;

(c)           no
Default or Event of Default has occurred or is continuing, except as set forth
in Schedule 1 hereto, which includes a description of the nature and
status and period of existence of such Default or Event of Default, if any, and
what action Borrower has taken, and is undertaking and proposes to take with
respect thereto; and

(d)           Borrower
and the other Credit Parties are in compliance with all financial covenants set
forth on Exhibit B-1 to the Credit Agreement, as demonstrated by the
calculations of such covenants below, except as set forth in Schedule 1
hereto.

 

 

IN WITNESS WHEREOF,
Borrower has caused this Certificate to be executed by the                              
of Borrower this      day of            ,
20  .

	
  

  	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Kevin S. Noland

  	
   

  
	
   

  	
   

  	
  Title:

  	
  CEO

  	
   

  

 

 

COMPLIANCE CERTIFICATE

Date:
           ,
20   (the “Computation Date”)

 

CALCULATION
OF EBITDA

Three Month Period Ending December 31, 2006

Six Month Period Ending March 31, 2007

Nine Month Period Ending June 30, 2007

or

Twelve Month Period Ending on September 30, 2007

or the last day of any calendar quarter thereafter

(each, a “Computation Period”)

 

	
  EBITDA  for
  the applicable Computation Period is defined as follows (all of the following
  determined in accordance with GAAP):

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Net income (or loss) of Borrower and its
  Subsidiaries on a consolidated basisfor such
  Computation Period taken as a single accounting period determined in
  conformity with GAAP, excluding (i) the income (or loss) of any Person
  in which Borrower or any of its Subsidiaries has a joint interest, except to
  the extent of the amount of dividends or other distributions actually paid in
  cash to Borrower or such Subsidiary by such Person during such Computation Period,
  (ii) the income (or loss)
  of any Person accrued prior to the date it becomes a Credit Party or is
  merged into or consolidated with a Credit Party or that Person’s assets are
  acquired by Borrower or any Subsidiary of Borrower that is a Credit Party, (iii)
  the income of any Subsidiary of Borrower to the extent that the declaration
  or payment of dividends or similar distributions of that income by that
  Subsidiary is not at the time permitted by operation of the terms of the
  charter or any agreement, instrument, judgment, decree, order, statute, rule
  or governmental regulation applicable to that Subsidiary, (iv) compensation
  expense resulting from the issuance of capital stock, equity-related
  incentives, stock options, stock appreciation rights or similar incentive
  compensation issued to former or current employees, including officers, of
  any Credit Party, or the exercise of such options or rights, in each case to
  the extent the obligation (if any) associated therewith is not expected to be
  settled by the payment of cash by any Credit Party or any Affiliate thereof
  prior to the sale of all or substantially all of the assets or equity of the
  Credit Parties, and (v) compensation expense resulting from the
  repurchase of capital stock, equity options and rights described in clause (iv)
  of this definition (“Net Income”)

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       “Interest Expense” for such
  Computation Period (defined as total interest expense generated during the
  Computation 

  	
   

  	
   

  

 

 

 

	
   

  	
   

  	
   

  
	
  Period (including attributable to conditional sales
  contracts, Capital Leases and other title retention agreements in accordance
  with GAAP) of Borrower and its Subsidiaries on a consolidated basis with
  respect to all outstanding Indebtedness, including accrued interest, interest
  paid in kind, cash fees due or payable with respect to such Indebtedness and
  capitalized interest and fees owed with respect to letters of credit, but
  excluding commissions, discounts and fees owed with respect to bankers’
  acceptance financing, and net costs under Qualifying Interest Rate
  Agreements), in each case to the extent deducted in determining such Net
  Income)

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       franchise, income and other taxes and
  similar charges to the extent deducted in determining such Net Income

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       depreciation and amortization expense to
  the extent deducted in determining such Net Income

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       all
  other non-cash and/or non-recurring charges and expenses (including non-cash
  charges resulting from an increase in inventory as a result of the
  application of FASB Statement 141 and non-cash charges arising by reason of “impairment
  losses” under FASB Statement 142 and FASB Statement 144) approved by Agent in
  its Permitted Discretion and otherwise to the extent deducted in determining
  such Net Income, but specifically excluding (A) accruals for cash expenses
  made in the Ordinary Course of Business and (B) write-offs of accounts
  receivable

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       loss
  from any sale of assets, other than sales of inventory in the Ordinary Course
  of Business, to the extent deducted in determining such Net Income

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       extraordinary
  losses to the extent deducted in determining such Net Income

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Less:       gain from any sale of assets, other than
  sales in the Ordinary Course of Business, to the extent included in
  determining such Net Income

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  Less:       extraordinary
  gains to the extent included in determining such Net Income

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Less:       all non-cash and/or non-recurring revenue
  to the extent included in determining such Net Income

  	
   

  	
   

  $          

  

 

 

 

	
  Less:       proceeds of insurance (other than
  business interruption insurance) to the extent included in determining such
  Net Income

  	
   

  	
   

  $          

  
	
   

  	
   

  	
   

  
	
  EBITDA for the Computation Period:

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Minimum EBITDA for the Computation Period required
  under Credit Agreement

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

 

 

COMPLIANCE CERTIFICATE

Date:
           ,
20   (the “Computation Date”)

 

LEVERAGE
RATIO

	
  Total Indebtedness of the
  Credit Parties on a consolidated basis at the Computation Date, including,
  without limitation, all Indebtedness under the Loan Documents, in each case
  together with all accrued interest thereon (including, without limitation,
  all interest paid in kind), and all Capital Lease Obligations, and including,
  without duplication, Contingent Obligations consisting of guarantees of
  Indebtedness that otherwise would constitute Total Debt of other Persons and
  all discounts, deductions or allocations relating or applicable to or arising
  from any equity or equity participation or fees, whether under GAAP or
  otherwise (“Total Debt”)

  	
   

  	
   

  $           

  
	
   

  	
   

  	
   

  
	
  EBITDA for the Computation Period (as calculated in
  the manner set forth above) multiplied by (a) 4.00 if the Computation Date is
  December 31, 2006, (b) 2.00 if the Computation Date is March 31, 2007, (c)
  1.34 if the Computation Date is June 30, 2007 and (d) 1.00 if the Computation
  Date is September 30, 2007 or the last day of any calendar quarter thereafter

  	
   

  	
   

  $           

  
	
   

  	
   

  	
   

  
	
  Leverage Ratio (Total Debt divided by EBITDA) on the
  Computation Date

  	
   

  	
      
  to 1.00

  
	
   

  	
   

  	
   

  
	
  Maximum Leverage Ratio for the applicable period
  permitted under Credit Agreement

  	
   

  	
      
  to 1.00

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

 

 

COMPLIANCE CERTIFICATE

Date:            ,
20   (the “Computation Date”)

FIXED CHARGE COVERAGE RATIO

	
  Fixed Charges of Borrower on
  a consolidated basis for the Computation Period:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Scheduled and other required payments of principal
  on Total Debt (as calculated in the manner set forth above in “Leverage
  Ratio”) for such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       Interest
  Expense (calculated in the manner set forth above in “EBITDA”) paid,
  or required to be paid, in cash during such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Plus:       dividends,
  redemptions, equity repurchases and/or distributions paid in cash (other than
  distributions to Borrower or any Subsidiary by any Subsidiary of Borrower and
  Tax Distributions) during such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Fixed
  Charges

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  EBITDA for the
  Computation Period (calculated in the manner set forth above in “EBITDA”)

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Less:       Unfinanced
  Capital Expenditures made during such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Less:       income
  taxes paid in cash during such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Less:       Tax
  Distributions paid in cash during such Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Operating Cash Flow

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Fixed Charge Coverage
  Ratio (Operating Cash Flow divided by Fixed Charges)

  	
   

  	
       
  to 1.00

  
	
   

  	
   

  	
   

  
	
  Minimum Fixed Charge
  Coverage Ratio for the applicable period required under Credit Agreement

  	
   

  	
       
  to 1.00

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

 

 

COMPLIANCE CERTIFICATE

Date:
           ,
20   (the “Computation Date”)

INTEREST COVERAGE RATIO

	
  Interest Expense (calculated
  in the manner set forth above in “EBITDA”) for the Computation Period

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  EBITDA for the Computation Period (calculated in the
  manner set forth above in “EBITDA”)

  	
   

  	
  $          

  
	
   

  	
   

  	
   

  
	
  Interest Coverage Ratio (EBITDA divided by Interest
  Expense)

  	
   

  	
      
  to 1.00

  
	
   

  	
   

  	
   

  
	
  Minimum Interest Coverage Ratio for the applicable
  period required under Credit Agreement

  	
   

  	
      
  to 1.00

  
	
   

  	
   

  	
   

  
	
  In Compliance

  	
   

  	
  Yes/No

  

 

 

COMPLIANCE CERTIFICATE

 

Date:
           ,
20  

SCHEDULE 1 TO EXHIBIT B-2

CONDITIONS OR EVENTS
WHICH CONSTITUTE A DEFAULT OR 

EVENT OF DEFAULT

If any condition or event
exists that constitutes a Default or Event of Default, specify nature and
period of existence and what action Borrower has taken, is taking or proposes
to take with respect thereto; if no such condition or event exists, state “None.”

 

Exhibit C-1

Reporting
Requirements

 

(a)           Financial Reports.  The Credit Parties shall furnish to Agent and
each Lender:

 

(i)            as soon as available and in any
event within ninety (90) calendar days after the end of each fiscal year of
Borrower, audited consolidated financial statements of Borrower, including the
notes thereto, consisting of a consolidated balance sheet at the end of such
fiscal year and the related consolidated statements of income, retained
earnings and cash flows and owners’ equity for such fiscal year, which
financial statements shall be prepared by and accompanied by a certificate and
an opinion of Tauber & Balser or any “Big Four” or any other nationally
recognized independent certified public accounting firm satisfactory to Agent
in its Permitted Discretion (which opinion shall be without (1) a “going
concern” qualification, (2) any qualification or exception as to the scope of
such audit and (3) any qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of Section 7.1(a)), and
which certificate shall state that such financial statements present fairly in
all material respects the financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years;

 

(ii)           as soon as available and in any event
within forty-five (45) calendar days after the end of each fiscal quarter of
Borrower, unaudited consolidated and consolidating financial statements of
Borrower consisting of a balance sheet and statements of income, retained
earnings and cash flows and owners’ equity as of the end of such fiscal
quarter, all certified on behalf of Borrower by a Responsible Officer as being
complete and correct and fairly presenting, in accordance with GAAP, the
financial position and the results of operations of Borrower, subject to normal
year-end adjustments and the absence of footnote disclosure; and

 

(iii)          as soon as available and in any event
within thirty (30) calendar days after the end of each calendar month,
unaudited consolidated and consolidating financial statements of Borrower
consisting of a balance sheet and statements of income, retained earnings and
cash flows and owners’ equity as of the end of such calendar month, all
certified on behalf of Borrower by a Responsible Officer as being complete and
correct and fairly presenting, in accordance with GAAP, the financial position
and the results of operations of Borrower, subject to normal year-end
adjustments and the absence of footnote disclosure.

 

All such financial statements shall be prepared in
accordance with GAAP consistently applied with prior periods (subject, as to
interim statements, to normal year-end adjustments and the absence of footnote
disclosure).  With each delivery of quarterly and annual financial
statements, Borrower also shall deliver to Agent and each Lender  a completed Compliance Certificate certified
on behalf of Borrower by a Responsible Officer and such other supporting

 1
 

 

documentation with respect to the figures and
information in the Compliance Certificate as Agent shall request in its
Permitted Discretion.

(b)           Other Materials.  The Credit Parties shall furnish to Agent and
Lenders:

 

(i)            concurrently with the delivery of
annual and quarterly financial statements pursuant to clauses (a)(i) and
(a)(ii) above:

 

(1)           a report listing and describing
material details about any and all new contracts entered into by any Credit
Party during the preceding fiscal year or quarter which generate or are
expected to generate more than $200,000 per year in revenue;

 

(2)           an operating report for each Credit
Party, which includes a detailed comparison of the actual year-to-date
operating results against (A) the projected operating budget delivered
hereunder for the current or prior fiscal year and (B) the actual operating
results for the same period during the prior fiscal year, in each case
inclusive of profit and loss statements;

 

(3)           a report specifying all past due
amounts, fees, payables and balances owing to any Governmental Authority (other
than for taxes) as of the last day of such ended fiscal year or quarter; and

 

(4)           a management report, in reasonable detail,
signed by a Responsible Officer of Borrower, describing the operations and
financial condition of the Credit Parties for the quarter and portion of the
fiscal year then ended (or for the fiscal year then ended in the case of annual
financial statements); and

 

(ii)           as soon as available and in any event
within ten (10) calendar days after the preparation, receipt or issuance
thereof or request by Agent or any Lender therefor, as applicable:

 

(1)           copies of any reports submitted to
the Credit Parties by their independent accountants in connection with any
interim audit of the books of such Person or any of its Affiliates and copies
of each management control letter provided by such independent accountants; and

 

(2)           such additional information,
documents, statements, reports and other materials as Agent or any Lender may
request from time to time in its Permitted Discretion.

 

(c)           Notices.  The Credit Parties shall promptly, and in any
event within five (5) Business Days after any Credit Party or any Responsible
Officer of any Credit Party obtains knowledge thereof, notify Agent and each
Lender in writing of:

 

 2
 

 

 

(i)            any pending or threatened
litigation, suit, investigation, arbitration, enforcement action, dispute
resolution proceeding or administrative or regulatory proceeding brought or
initiated by or against any Credit Party or otherwise affecting or involving or
relating to any Credit Party or any Credit Party’s Property to the extent (A)
the amount in controversy exceeds $100,000 individually or $150,000 in the
aggregate for all such events or (B) to the extent any of the foregoing seeks
injunctive relief against a Credit Party;

 

(ii)           the occurrence or existence of any
Default or Event of Default, which notice shall specify the nature, status and
period of existence thereof and the actions proposed to be taken with respect
thereto;

 

(iii)          any other development, event, fact,
circumstance or condition that reasonably could be expected to result in a
Material Adverse Effect, in each case describing the nature and status thereof
and the actions proposed to be taken with respect thereto;

 

(iv)          any matter(s) in the amount of
$100,000 individually or $150,000 in the aggregate, in existence at any time
adversely affecting the value, enforceability or collectibility of any of the
Collateral;

 

(v)           to the extent not duplicative of
deliveries made hereunder, any notice (including any notice of default or
acceleration), information or other delivery given or made by or delivered to
or received by any Credit Party to or from any lender of any such Credit Party,
together with copies thereof, as applicable;

 

(vi)          (A) the receipt of any notice or
request from any Governmental Authority regarding any liability or claim of
liability in the amount equal to or exceeding $100,000 individually or $150,000
in the aggregate or (B) any action taken or threatened to be taken by any
Governmental Authority (or any notice of any of the foregoing) with respect to
any Credit Party which reasonably could be expected to result in a Material Adverse
Effect;

 

(vii)         receipt or giving of any notice by any
Credit Party regarding termination of any lease of real Property (other than by
expiration of the term) or any senior officer or executive, or the loss,
termination or expiration of any material contract to which any Credit Party is
a party or by which its Properties or assets are subject or bound;

 

(viii)        the filing, recording or assessment of
any federal, state, local or foreign tax Lien against any Collateral or any
Credit Party; or

 

(ix)           the creation, establishment or
acquisition of any Subsidiary or the issuance by Borrower of any Capital Stock
in respect thereof.

 

Each notice in accordance with the foregoing shall be
accompanied by a written statement by a Responsible Officer on behalf of Borrower
setting forth details of the occurrence referred to

 3
 

 

therein, and describing with particularity any and all
clauses or provisions of this Agreement and the other Loan Documents that have
been breached or violated.

(d)           Operating Budget and
Projections; Updates. 
Borrower shall furnish to Agent and each Lender on or prior to the
Closing Date (other than with respect to the following clause (ii)) and for
each fiscal year of Borrower thereafter not less than fifteen (15) calendar
days prior to the commencement of such fiscal year, (i) consolidated and
consolidating month by month projected operating budgets, projections, profit
and loss statements, income statements, balance sheets and cash flow reports of
and for the Credit Parties for such upcoming fiscal year (including an income
statement for and a balance sheet as at the end of each such month), and annual
projections for the fiscal years then remaining in the Term, in each case
prepared in accordance with GAAP consistently applied with prior periods (subject
to normal year-end adjustments and the absence of footnote disclosure), and
(ii) revisions of and supplements to the disclosure schedules to the Loan
Documents to the extent necessary to disclose new or changed facts or
circumstances after the Closing Date; provided, that delivery or receipt
thereof by Agent and Lenders shall not constitute a waiver by Agent or any
Lender or a cure of any Default or Event of Default resulting in connection
with the matters so disclosed.

 

(e)           Shareholder/Equity Holder
Reports and Government Filings. 
The Credit Parties shall furnish to Agent, concurrently with the sending
or filing thereof, copies of all proxy statements, financial statements and
reports which any Credit Party has made available to its shareholders or other
equity owners as a class or any class or series of shareholders or other equity
owners as a class or series, and copies of all regular, periodic and special
reports, financial statements or registration statements which any Credit Party
files with the Securities and Exchange Commission, any stock exchange or any
Governmental Authority.

 4

 

Exhibit C-2

Collateral
Reporting and Other Requirements

(a)           Collateral Reporting.  Each Credit Party shall, and shall cause each
of its Subsidiaries to:

(i)            provide Agent with not less than
thirty (30) days’ prior written notice of any change in such Credit Party’s
legal name, organizational identification number, if any, federal employer
identification number, chief place of business or chief executive office,
corporate or organizational form or jurisdiction of organization, or of any new
location for any of its Property;

(ii)           notify Agent promptly in writing (A)
prior to any change in the proposed use by such Credit Party or Subsidiary of
any tradename or fictitious business name and (B) upon obtaining knowledge that
any application or registration relating to any Intellectual Property (whether
now or hereafter existing) may become abandoned or dedicated, or of any adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court) regarding
such Credit Party’s or Subsidiary’s ownership of any Intellectual Property, its
right to register the same, or to keep and maintain the same;

(iii)          promptly notify Agent of any
Commercial Tort Claim acquired by it and, unless otherwise consented to by
Agent, enter into a supplement to the Security Agreement to which it is a party
granting to Agent, for the benefit of the Lender Parties, a Lien on and
security interest in such Commercial Tort Claim;

(iv)          upon acquiring or receiving any of the
same, deliver and pledge to Agent any and all Instruments, negotiable
Documents, Chattel Paper and certificated Securities (accompanied by stock
powers executed in blank) duly endorsed and/or accompanied by such instruments
of assignment and transfer executed by such Person in such form and substance
as Agent may request; provided, that so long as no Event of Default shall have
occurred and be continuing, each Credit Party or Subsidiary may retain for
collection in the Ordinary Course of Business any Instruments, negotiable
Documents and Chattel Paper received by such Person in the Ordinary Course of
Business; provided, further, that if any such Credit Party or Subsidiary
retains possession of any Instruments, negotiable Documents or Chattel Paper
pursuant to the terms hereof, each such Instrument, negotiable Documents and
Chattel Paper shall be marked with the following legend: “This writing and the
obligations evidenced or secured hereby are subject to the security interest of
CapitalSource Finance LLC, as Agent, as secured party, for the benefit of
certain Lender Parties”;

(v)           deliver to Agent an updated Schedule
I (Filing Jurisdictions), Schedule II (Capital Stock, Instruments, Documents,
Letter of Credit Rights and Chattel Paper), Schedule III (Organizational
Identification, Offices, Location of Collateral and Records

 1
 

 

Concerning
Collateral) and/or Schedule IV (Motor Vehicles) of the Security Agreement to
which it is a party within five (5) Business Days of any change thereto;

(vi)          prior to any Credit Party opening any
new deposit or securities accounts, such Credit Party shall give Agent not less
than ten (10) Business Days’ prior written notice of its intention to do so and
shall deliver to Agent a revised version of Schedule V (Deposit Accounts) of
the Security Agreement to which it is a party showing any changes thereto
within five (5) Business Days of any such change (and shall otherwise obtain
and deliver to Agent an Account Control Agreement in respect thereof in
accordance with the terms of such Security Agreement);

(vii)         advise Agent promptly, in reasonable
detail, (A) of any Lien (other than a Permitted Lien) or claim made or asserted
against any of the Collateral [or “Excluded Collateral” (as defined in the
Security Agreements)], and (B) of the occurrence of any other event which could
reasonably be expected to have a Material Adverse Effect on the value of the
Collateral or on the Liens created hereunder or under any other Loan Document;

(viii)         promptly, and in any event within three
(3) Business Days after becoming a beneficiary, notify Agent of the issuance of
any letter of credit of which such Credit Party or Subsidiary is a beneficiary;

(ix)           promptly notify Agent of any
Collateral [or “Excluded Collateral” (as defined in the Security Agreements)]
which constitutes a claim against the United States government or any
instrumentality or agent thereof, the assignment of which claim is restricted
by federal law and, upon the request of Agent, such Credit Party or Subsidiary
shall take such steps as may be necessary to comply with any applicable federal
assignment of claims laws or other comparable laws; and

(x)            promptly comply with all of the
terms and conditions of each Security Agreement to which such Credit Party or
Subsidiary is a party as is necessary or desirable to ensure the attachment,
granting, creation, perfection, continuation and/or enforceability of a Lien,
in favor of Agent, for the benefit of the Lender Parties, as a result of any of
the events or circumstances described in the other clauses of this paragraph
(a).

(b)           Intentionally
Omitted.

 2

 

Exhibit D

Closing Conditions

(a)           Agent
shall have received (i) the Loan Documents executed by each Credit Party and
the other parties thereto and (ii) a completed Borrowing Certificate for the
Initial Advance executed by Borrower;

(b)           Agent
shall have received (i) a report of UCC financing statement, tax, pending suit
and judgment lien searches as requested by Agent, and such report shall show no
Liens on the Collateral (other than Permitted Liens and Liens to be terminated
at Closing), (ii) each document (including, without limitation, any UCC
financing statements) required by any Loan Document or under law or requested
by Agent to be filed, registered or recorded to create and perfect, in favor of
Agent, for the benefit of the Lender Parties, a first priority Lien upon the
Collateral, subject only to Priority Permitted Liens, and (iii) evidence of
each such filing, registration and recordation and of the payment by Borrower
of any necessary fee, tax or expense relating thereto;

(c)           Agent
shall have received evidence (i) of repayment in full and termination of all
liabilities and obligations of the Credit Parties to not permitted under
Section 7.1 and all related documents, agreements and instruments and of all
Liens and Uniform Commercial Code financing statements relating thereto,
including, without limitation, any Liens and/or Uniform Commercial Code
financing statements covering or relating to any assets or properties of any
equity holders of any Credit Party, (ii) of release and termination of, or
Agent’s authority to release and terminate, any and all Liens and/or Uniform
Commercial Code financing statements in, on, against or with respect to any of
the Collateral, other than Permitted Liens, and (iii) that all prior lockbox
and blocked account arrangements are terminated;

(d)           Agent
shall have received (i) the Charter and Good Standing Documents, (ii) a
certificate of the secretary or assistant secretary of each Credit Party, dated
the Closing Date, as to the incumbency and signature of the Persons executing
the Loan Documents and the Related Documents on behalf of such Credit Party,
(iii) the written legal opinions of counsel and/or special counsel for the
Credit Parties, and (iv) a certificate executed by an Responsible Officer of
Borrower, which contains a representation and warranty by Borrower as of the
Closing Date that the conditions contained in this Agreement have been
satisfied;

(e)           Agent
shall be satisfied with all corporate and other proceedings, documents,
instruments and other legal matters in connection with the transactions
contemplated by the Loan Documents and the Related Documents (including, but
not limited to, those relating to corporate and capital structures of each
Credit Party), and shall have received such consents, approvals and agreements
from such third parties as Agent and its counsel shall determine in their
Permitted Discretion are necessary or desirable;

(f)            the
Related Transactions shall have closed in the manner contemplated by the
Related Documents, the terms and conditions of which shall be satisfactory to
Agent, and Agent shall have received certified copies of the Related Documents
and the eBenX Loan Documents;

 1
 

 

(g)           Agent
shall have received original certificates of all required insurance policies,
and confirmation that such certificates are in effect and that the premiums
then due and owing with respect thereto have been paid in full, which
certificates shall name the Agent, for the benefit of the Lender Parties, as
sole beneficiary, loss payee or additional insured, as applicable;

(h)           Agent
shall have received (or shall receive simultaneously with the funding of the
Term Loans and/or Initial Advance, as applicable) all fees, charges and
expenses due and payable to Agent and Lenders on or prior to the Closing Date
pursuant to the Loan Documents;

(i)            Agent
shall have completed its due diligence examinations of each Credit Party,
including, without limitation, (i) examination of the Collateral and its
financial due diligence, (ii) an examination of the terms and conditions of all
obligations owed by the Credit Parties deemed material by Agent, the results of
which shall be satisfactory to Agent, and (iii) customer reference checks and
calls, credit checks and background checks with respect to the relevant key
management and principals of each Credit Party;

(j)            no
Material Adverse Effect shall have occurred since December 31, 2005 and Agent
shall have received the audited financial statements of the Credit Parties for
the fiscal year of the Credit Parties ended December 31, 2005 and the unaudited
financial statements of the Credit Parties on a consolidated, consolidating and
pro-forma basis for the six (6) month period ending and as of June 30, 2006;

(k)           Agent
shall have received evidence that (i) consolidated EBITDA of Borrower for the
twelve (12) month period ending on June 30, 2006 was at least Five Million
Three Hundred Nineteen Thousand Dollars ($5,319,000), and (ii) the ratio of (x)
total Indebtedness of the Credit Parties as of the Closing Date after giving
effect to the consummation of the transactions contemplated by the Related
Documents, payment of all costs and expenses in connection therewith and
funding of Loans on the Closing Date, to (y) consolidated EBITDA of the
Borrower for such twelve (12) month period shall not be greater than 4.70 to
1.00;

(l)            after
giving effect to the consummation of the transactions contemplated by the
Related Documents, payment of all costs and expenses in connection therewith
and the funding of the any Loans on the Closing Date, no Revolving Loans shall
be advanced on the Closing Date;

(m)          Agent
shall have received certified copies of all documents requested by Agent
evidencing or pertaining to the sources and uses of funds to consummate the
Related Transactions;

(n)           Agent
shall have received such other approvals, opinions, documents, agreements,
instruments, certificates and materials as Agent or any Lender may request in
their Permitted Discretion;

(o)           the
Credit Parties shall have demonstrated to Agent’s satisfaction in its Permitted
Discretion that (i) their operations comply, in all respects deemed material by
Agent, in its Permitted Discretion, with all applicable federal, state, foreign
and local laws, statutes and 

 2
 

 

regulations, (ii) their
operations are not the subject of any governmental investigation, evaluation or
any remedial action which could result in any expenditure or liability deemed
material by Agent, in its Permitted Discretion, and (iii) they have no
liabilities or obligations (whether contingent or otherwise) that Agent, in its
Permitted Discretion, determines could reasonably be expected to have a
Material Adverse Effect;

(p)           Agent
shall have received copies of all Permits required for the Credit Parties and
each Guarantor to conduct the business in which it is currently engaged or is
contemplated pursuant to the Loan Documents the absence of which would
reasonably be expected to have or result in a Material Adverse Effect;

(q)           Agent
shall have received evidence that all Shareholder Blocking Rights, if any, have
been waived pursuant to an agreement, in form and substance satisfactory to
Agent in its Permitted Discretion, by each holder of such Shareholder Blocking
Rights; and

 3

 

EXHIBIT E

FORM OF LIBOR ELECTION NOTICE

DATED AS OF                              ,
         

TO:         CapitalSource Finance LLC

4445 Willard Avenue, Twelfth Floor

Chevy Chase, Maryland 20815

Attention: Corporate Finance Group, Portfolio Manager

Facsimile No.        (301) 841-2313

Ladies
and Gentlemen:

Reference is made to that certain Credit Agreement
dated as of August 14, 2006 (as amended through the date hereof, the “Credit
Agreement”), by and among A.D.A.M., Inc., a Delaware
corporation, the other Credit Parties party thereto, the financial institutions
from time to time parties thereto, as Lenders thereunder, and CapitalSource
Finance LLC, a Delaware limited liability company, as administrative agent for
the Lenders.  Capitalized terms used but
not elsewhere defined herein shall have the respective meanings ascribed to
such terms in the Credit Agreement.

In
accordance with Section 2.7 of the Credit Agreement, Borrower hereby
irrevocably requests that Lenders:

[(a)          disburse
as a LIBOR Loan, on                               ,
          , $                  
of the $                  
portion of the Principal Balance of [Term Loan A][the Convertible Term
Loan][Revolving Facility] requested pursuant to that certain Borrowing
Certificate of even date herewith, such LIBOR Loan to bear interest determined
by reference to the LIBOR Rate for an Interest Period of                            
months;]

[(b)          continue
as a LIBOR Loan, on                            ,
         , $                  
of the $                  
portion of the Principal Balance of [Term Loan A][the Convertible Term
Loan][Revolving Facility] now bearing interest determined by reference to a
LIBOR Rate for an additional Interest Period of                            
months; and/or]

[(c)          convert
to a LIBOR Loan, on                            ,
         , $                  
of the $                  
portion of the Principal Balance of [Term Loan A][the Convertible Term
Loan][Revolving Facility] now bearing interest determined by reference to the
Prime Rate, such LIBOR Loan to bear interest determined by reference to the
LIBOR Rate for an Interest Period of                            
months.]

Borrower
hereby represents and warrants to the Lender Parties that no Default or Event
of Default exists.

	
  

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  A.D.A.M., Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  	
   

  
	
   

  	
  Name:

  	
  Kevin S. Noland

  	
   

  
	
   

  	
  Title:

  	
  CEO

  	
   

  

 

 1

 

APPENDIX A

DEFINITIONS

The following terms are defined in the Sections or
subsections referenced opposite such terms:

	
  “Accommodation Payment”

  	
  14.5

  
	
  “Administrative Fee”

  	
  3.3

  
	
  “Affected Lender”

  	
  13.4

  
	
  “Agent”

  	
  Preamble

  
	
  “Agreement”

  	
  Preamble

  
	
  “Allocable Amount”

  	
  12.13(c)

  
	
  “Benergy”

  	
  Preamble

  
	
  “Borrower”

  	
  Preamble

  
	
  “Borrowing Date”

  	
  2.6

  
	
  “CapitalSource”

  	
  Preamble

  
	
  “Captiva”

  	
  Preamble

  
	
  “Confidential Information”

  	
  12.10(b)

  
	
  “Documentary Letter of Credit”

  	
  Appendix B

  
	
  “EBITDA”

  	
  Exhibit B-2

  
	
  “Event of Default”

  	
  8.1

  
	
  “Fixed Charge Coverage Ratio”

  	
  Exhibit B-2

  
	
  “Fixed Charges”

  	
  Exhibit B-2

  
	
  “Guaranteed Obligations”

  	
  14.1

  
	
  “Indemnified Persons”

  	
  12.4

  
	
  “Initial Advance”

  	
  4.1

  
	
  “Insured Event”

  	
  12.4

  
	
  “Integrative Medicine”

  	
  Preamble

  
	
  “Interest Coverage Ratio”

  	
  Exhibit B-2

  
	
  “Interest Expense”

  	
  Exhibit B-2

  
	
  “Interest Settlement Date”

  	
  11.5(a)(iii)

  
	
  “Investments”

  	
  7.4

  
	
  “L/C Undertaking”

  	
  Appendix B

  
	
  “Letters of Credit”

  	
  Appendix B

  
	
  “Letter of Credit Fees”

  	
  3.5(a)

  
	
  “Leverage Ratio”

  	
  Exhibit B-2

  
	
  “Mandatory Prepayment Notice”

  	
  2.9(f)

  
	
  “Mandatory Prepayment Election Notice”

  	
  2.9(f)

  
	
  “Maximum Liability”

  	
  14.5

  
	
  “Net Income”

  	
  Exhibit B-1

  
	
  “Nidus”

  	
  Preamble

  
	
  “Non-U.S. Lender

  	
  13.1(f)

  
	
  “OFAC”

  	
  5.15(c)

  
	
  “Online Benefits”

  	
  Preamble

  
	
  “Other Taxes”

  	
  13.1(b)

  
	
  “Participant”

  	
  12.2(b)

  

 

 1
 

 

 

	
  “Permitted
  Indebtedness”

  	
  7.2

  
	
  “Permitted Liens”

  	
  7.3

  
	
  “Prepayment Premium”

  	
  3.4

  
	
  “Receipt”

  	
  12.5

  
	
  “Register”

  	
  2.4(c)

  
	
  “Replacement Lender”

  	
  13.4

  
	
  “Restricted Payments”

  	
  7.5

  
	
  “Revolving Facility”

  	
  Recitals

  
	
  “Settlement Date”

  	
  11.5(a)(ii)

  
	
  “Standby Letter of Credit”

  	
  Appendix B

  
	
  “Standby Letter of Credit Application”

  	
  Appendix B

  
	
  “Standby Letter of Credit Fee”

  	
  3.5(a)

  
	
  “Taxes”

  	
  13.1(a)

  
	
  “Termination”

  	
  3.4(a)

  
	
  “Total Debt”

  	
  Exhibit B-2

  
	
  “Total Debt Service”

  	
  Exhibit B-2

  
	
  “Transferee”

  	
  12.2(a)

  
	
  “UFCA”

  	
  14.5

  
	
  “UFTA”

  	
  14.5

  
	
  “Unused Line Fee”

  	
  3.2

  
	
  “Voluntary Prepayment Notice”

  	
  2.8(c)

  
	
  “Voluntary Prepayment Election Notice”

  	
  2.8(c)

  

In addition to the terms
defined elsewhere in the Agreement, the following terms have the following
meanings:

“Account Control Agreement” shall mean, with
respect to any deposit account, securities account or other account of any
Credit Party, an agreement, in form and substance satisfactory to Agent in its
Permitted Discretion, among Agent, such Credit Party and the financial
institution at which such account is maintained, pursuant to which, among other
things, Agent, for the benefit of the Lender Parties, has “control” under the
UCC over, and otherwise has a first priority and perfected Lien on, such
account and all Property from time to time on deposit or otherwise credited to
such account.

“Acquisition” shall mean any transaction or
series of related transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of all or substantially all of the assets of
a Person, or of any business or division of a Person, (b) the acquisition of
more than fifty percent (50%) of the Capital Stock of any Person or otherwise
causing any Person to become a Subsidiary of a Credit Party, or (c) a merger,
amalgamation, consolidation or other combination with another Person.

“Advance” shall mean any borrowing under the
Revolving Facility.

“Affiliate” or “affiliate” shall mean,
as to any initial Person, any other Person (a) that, directly or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, such initial Person, (b) who is a current or former
director or officer (i) of such initial Person, (ii) of any Subsidiary of such
initial Person, or (iii) of any other Person 

 2
 

 

described in clause (a)
above with respect to such initial Person, or (c) which, directly or indirectly
through one or more intermediaries, is the beneficial or record owner (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of
five percent (5%) or more of any class of the outstanding Capital Stock of such
initial Person.  For purposes of this
definition, the term “control” (and the correlative terms, “controlled by” and “under
common control with”) shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and/or policies of a
Person, whether through ownership of securities or other interests, by contract
or otherwise.

“Applicable Margin” shall mean, for any date,
the rate per annum set forth below opposite the level (the “Level”) then
in effect, it being understood that the Applicable Margin for (i) Revolving
Loans consisting of LIBOR Loans shall be the percentage set forth under the
column “Revolver LIBOR Margin,” (ii) Revolving Loans consisting of Prime Rate
Loans shall be the percentage set forth under the column “Revolver Prime Rate
Margin,” (iii) any portion of the Principal Balance of Term Loan A consisting
of LIBOR Loans shall be the percentage set forth under the column “Term Loan A
LIBOR Margin,” (iv) any portion of the Principal Balance of Term Loan A
consisting of Prime Rate Loans shall be the percentage set forth under the
column “Term Loan A Prime Rate Margin,” (v) any portion of the Principal
Balance of the Convertible Term Loan consisting of LIBOR Loans shall be the
percentage set forth under the column “Convertible Term Loan LIBOR Margin” and
(vi) any portion of the Principal Balance of the Convertible Term Loan
consisting of Prime Rate Loans shall be the percentage set forth under the
column “Convertible Term Loan Prime Rate Margin:”

	
  Revolver 

  LIBOR 

  Margin

  	
   

  	
  Revolver 

  Prime Rate 

  Margin

  	
   

  	
  Term Loan 

  A LIBOR 

  Margin

  	
   

  	
  Term Loan 

  A Prime 

  Rate 

  Margin

  	
   

  	
  Convertible 

  Term Loan 

  LIBOR Margin

  	
   

  	
  Convertible 

  Term Loan 

  Prime Rate 

  Margin

  	
   

  
	
  4.00

  	
  %

  	
  2.75

  	
  %

  	
  4.00

  	
  %

  	
  2.75

  	
  %

  	
  2.50

  	
  %

  	
  1.25

  	
  %

  

 

“Applicable Rate” shall mean, at any time, the
interest rates applicable to the Loans and other Obligations under this
Agreement at such time.

“Bankruptcy Code” shall mean the Federal
Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.), as amended and
in effect from time to time and the regulations issued from time to time
thereunder.

“Borrowing Certificate” shall mean a Borrowing
Certificate substantially in the form of Exhibit A hereto.

“Business” shall mean the lines of business of
Borrower carried on by Borrower on the Closing Date as a provider of
health-related content and applications, educational software, and benefits
management and benefits brokerage solutions, for the educational, healthcare,
benefits, human resources and consumer markets.

 3
 

 

“Business Day” shall mean any day other than a
Saturday, Sunday or other day on which the Federal Reserve or Agent is closed
and, in the case of a Business Day which relates to a determining a LIBOR Rate,
on which dealings are carried on in the London interbank eurodollar market.

“Capital Lease” shall mean, as to any Person,
any lease of any interest in any kind of Property by that Person as lessee that
is, should be or should have been recorded as a “capital lease” in accordance
with GAAP.

“Capital Lease Obligations” shall mean all
obligations of any Person under Capital Leases, in each case taken at the
amount thereof accounted for as a liability in accordance with GAAP.

“Capital Expenditures” shall mean, for any period
with respect to the Credit Parties, the sum (without duplication) of all
expenditures (whether paid in cash or accrued as liabilities) made by the
Credit Parties and their Subsidiaries during the Computation Period that are or
are required to be treated as capital expenditures under GAAP, including
capitalized product development costs but excluding (a) expenditures
constituting the cash purchase price paid during such period in respect of the
Closing Date Acquisition and any other Acquisition approved by Agent (which
approval may be given or withheld in the sole and absolute discretion of the
Requisite Lenders) and consummated by any Credit Party during such period; and
(b) expenditures made in connection with the replacement, substitution or
restoration of assets to the extent financed, in accordance with the terms
hereof, from insurance proceeds paid on account of the loss of or damage to the
assets being replaced or restored or from the proceeds of sales of assets
permitted hereunder.

“Capital Stock” shall mean, as to any Person
that is a corporation, the authorized shares of such Person’s capital stock,
including all classes of common, preferred, voting and nonvoting capital stock,
and, as to any Person that is not a corporation or an individual, the
partnership, membership or other ownership interests in such Person, including,
without limitation, the right to share in profits and losses, the right to
receive distributions of cash and other Property, and the right to receive
allocations of items of income, gain, loss, deduction and credit and similar
items from such Person, whether or not such interests include voting or similar
rights entitling the holder thereof to exercise control over such Person,
collectively with, in any such case, all warrants, options and other rights to
purchase or otherwise acquire, and all other instruments convertible into or
exchangeable for, any of the foregoing.

“Cash Equivalents” shall mean (a) securities
issued, or directly and fully guaranteed or insured, by the United States or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States is pledged in support thereof) having maturities of not
more than six (6) months from the date of acquisition, (b) U.S. dollar
denominated time deposits, certificates of deposit and bankers’ acceptances of
(i) any domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000, or (ii) any bank (or the parent company of
such bank) whose short-term commercial paper rating from Standard & Poor’s
Ratings Services (“S&P”) is at least A-2 or the equivalent thereof or from
Moody’s Investors Service, Inc. (“Moody’s”) is at least P-2 or the equivalent
thereof in each case with maturities of not more than six (6) months from the
date of acquisition (any bank meeting the 

 4
 

 

qualifications specified
in clauses (b)(i) or (ii), an “Approved Bank”), (c) repurchase obligations with
a term of not more than seven (7) days for underlying securities of the types
described in clause (a) above entered into with any Approved Bank, (d)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-2
or the equivalent thereof by S&P or at least P-2 or the equivalent thereof
by Moody’s, or guaranteed by any industrial company with a long term unsecured
debt rating of at least A or A2, or the equivalent of each thereof, from
S&P or Moody’s, as the case may be, and in each case maturing within six
(6) months after the date of acquisition, and (e) investments in money market
funds substantially all of whose assets are comprised of securities of the type
described in clauses (a) through (d) above.

“Change of Control”
shall mean the occurrence of any of the following:

(i)            any “change in/of control” or
similar event as defined in any Organizational Document of any Credit Party or
in any Employment Agreement or any document governing Indebtedness of any
Credit Party in excess of $250,000;

(ii)           (a) any Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934
shall acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated
under such Act) of more than 30% of the outstanding Capital Stock (on a fully
diluted basis and taking into account any securities or contract rights
exercisable, exchangeable or convertible into equity securities) of Borrower
having voting rights in the election of directors under normal circumstances;
(b) during any period of two consecutive years a majority of the members of the
Board of Directors of Borrower shall cease to be Continuing Members (for
purposes of the foregoing, “Continuing Member”
means a member of the Board of Directors of Borrower who either (x) was a
member of Borrower’s Board of Directors on the Closing Date and has been such
continuously thereafter or (y) became a member of such Board of Directors after
the day before the Closing Date and whose election or nomination for election
was approved by a vote of the majority of the Continuing Members then members
of Borrower’s Board of Directors);

(iii)          Borrower ceases to own and control, beneficially and of record, one
hundred percent (100%) of the issued and outstanding Capital Stock of each of
its Subsidiaries, free and clear of all Liens, rights, options, warrants or
other similar agreements or understandings, other than Liens in favor of Agent,
for the benefit of the Lender Parties;

(iv)          Kevin Noland ceases to be employed as
the sole Chief Executive Officer
of Borrower or otherwise dies or becomes disabled and, in any case, shall not
have been replaced within sixty (60) calendar days by an interim sole Chief Executive Officer, and within
one hundred eighty (180) days by a permanent sole Chief Executive Officer, each to have similar experience and
qualifications as the sole Chief
Executive Officer being replaced or otherwise satisfactory to Requisite
Lenders in their Permitted Discretion, or any such replacement sole Chief Executive Officer ceases such
employment or otherwise dies or becomes disabled unless replaced in the same
time period and with an individual 

 5
 

 

having similar
experience and qualifications as the sole Chief Executive Officer being replaced or otherwise satisfactory
to Requisite Lenders in their Permitted Discretion; or

(v)           any Credit Party is subject to
Shareholder Blocking Rights which have not been waived pursuant to an agreement
in form and substance satisfactory to Agent in its Permitted Discretion.

“Charter and Good Standing Documents” shall
mean, for each Credit Party, (i) a copy of the certificate of incorporation or
formation (or other applicable charter document) certified as of a date not
more than ten (10) Business Days prior to the Closing Date by the applicable
Governmental Authority of the jurisdiction of incorporation or organization of
such Credit Party, (ii) a copy of the bylaws or similar Organizational
Documents of such Credit Party certified as of a date not more than ten (10)
Business Days prior to the Closing Date by the corporate secretary or assistant
secretary of such Credit Party (or its general partner or managing member, as
the case may be), (iii) an original certificate of good standing as of a date
acceptable to Agent issued by the applicable Governmental Authority of the
jurisdiction of incorporation or organization of such Credit Party and of every
other jurisdiction in which such Credit Party has an office or conducts
business or is otherwise required to be in good standing, and (iv) copies of
the resolutions of the Board of Directors or Managers (or other applicable
governing body) and, if required, stockholders, members, partners or other
equity owners, authorizing the execution, delivery and performance of the Loan
Documents and the Related Documents to which such Credit Party is a party,
certified by a Responsible Officer of such Person as of the Closing Date.

“Closing” shall mean the satisfaction, or
written waiver by Agent and Requisite Lenders, of all of the conditions
precedent set forth in this Agreement required to be satisfied prior to the
disbursement of the Initial Advance, the Term Loans and consummation of the
other transactions contemplated hereby.

“Closing Date” shall mean the date of this
Agreement.

“Closing Date Acquisition” shall mean the
merger of [OB Merger, Inc., a Delaware corporation], with and into Online
Benefits pursuant to the Closing Date Acquisition Agreement.

“Closing Date Acquisition Agreement” shall mean
the Agreement and Plan of Merger dated as of August 14, 2006 among Borrower, OB
Merger, Inc., a Delaware corporation, and Online Benefits.

“Closing Date Acquisition Documents” shall
mean, collectively, the Closing Date Acquisition Agreement and all other
agreements, documents, certificates and instruments executed and/or delivered
in connection therewith.

“Code” shall mean the Internal Revenue Code of
1986, and regulations promulgated thereunder.

“Collateral” shall mean, collectively, all
Property, interests in Property, collateral and/or security granted and/or
securities pledged to Agent, for the benefit of the Lender Parties, or any
Lender by the Credit Parties and any other Person pursuant to the Loan
Documents, including, without limitation, all Property in which a Lien is
granted pursuant to the Security Documents.

 6
 

 

“Collateral Assignment of Closing Date Acquisition
Documents” shall mean a collateral assignment of the Closing Date
Acquisition Documents, pursuant to which the relevant Credit Parties, with the
written consent of Online Benefits, collaterally assign all of their respective
rights, title and interest in, to and under the Closing Date Acquisition
Documents to Agent, for the benefit of the Lender Parties, and which is in form
and substance satisfactory to Agent in its Permitted Discretion.

“Commitment” or “Commitments” shall
mean:

(i)            with respect to the Revolving
Facility, as to any Revolving Lender, the aggregate commitment of such
Revolving Lender to make Advances, as set forth on Schedule A hereto or
in the most recent Lender Addition Agreement, if any, executed by such
Revolving Lender;

(ii)           as to all Revolving Lenders, the
aggregate commitment of all Revolving Lenders to make Advances;

(iii)          with respect to Term Loan A, as to any
Term A Lender, the aggregate commitment of such Term A Lender to fund its Pro
Rata Share of Term Loan A, as set forth on Schedule A or in the most recent
Lender Addition Agreement, if any, executed by such Term A Lender;

(iv)          as to all Term A Lenders, the
aggregate commitment of all Term A Lenders to fund Term Loan A; and

(v)           with respect to the Convertible Term
Loan, as to any Convertible Term Lender, the aggregate commitment of such
Convertible Term Lender to fund its Pro Rata Share of the Convertible Term
Loan, as set forth on Schedule A or in the most recent Lender Addition
Agreement, if any, executed by such Convertible Term Lender;

(vi)          as to all Convertible Term Lenders,
the aggregate commitment of all Convertible Term Lenders to fund the
Convertible Term Loan;

(vii)         as to all Lenders, the aggregate
commitments of all Lenders to fund the Loans;

in each case as the same may be reduced, modified or
terminated from time to time pursuant to this Agreement.

“Common Stock” shall mean common stock, $0.01
par value, of Borrower.

“Compliance Certificate” shall mean a
compliance certificate executed by a Responsible Officer of Borrower in the
form of Exhibit B-2 hereto.

“Contingent Obligations” shall mean, as to any
Person, any agreement, undertaking or arrangement by which such Person assures,
guarantees, endorses, contingently agrees to purchase or provides funds for the
payment of, or otherwise becomes or is contingently liable upon, any
Indebtedness, leases, dividends or other obligations (“primary obligations”) of
any 

 7
 

 

other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the net worth
or solvency of the primary obligor, including, without limitation, any
so-called “keepwell” or “makewell” agreement, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation, (d) otherwise to assure or to hold harmless the
owner of such primary obligation against loss in respect thereof, (e) with
respect to any letter of credit of such Person or as to which that Person is
otherwise liable for reimbursement of drawings, or (f) with respect to any
Interest Rate Agreement; provided, however, that the term “Contingent
Obligation” shall not include endorsements of instruments for deposit or
collection in the Ordinary Course of Business.  The amount of any Contingent Obligation shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.

“Conversion and Registration Rights Agreement”
shall mean that certain Conversion and Registration Rights Agreement dated as
of the Closing Date between Borrower and Agent, for the benefit of the
Convertible Term Lenders, as the same may be amended from time to time in
accordance with the terms thereof.

“Convertible Term Lenders” shall mean the
Persons from time to time named on Schedule A under the heading “Convertible
Term Lenders,” together with their respective successors and permitted assigns
(but not, except as expressly set forth herein, any Participant that otherwise
is not a party to this Agreement).  For
avoidance of doubt, any Convertible Term Lender who has converted the entire
Principal Balance of the Convertible Term Loan held by such Convertible Term
Lender into Common Stock of Borrower pursuant to the Conversion and
Registration Rights Agreement shall no longer be considered to be a Convertible
Term Lender.

“Convertible Term Loan” shall mean the
convertible term loan made by the Convertible Term Lenders to Borrower on the
Closing Date pursuant to Section 2.2 in the aggregate original principal amount
of Five Million Dollars ($5,000,000), and all Obligations related thereto.

“Credit Party” shall mean Borrower or any
Subsidiary of Borrower.

“Credit Parties” shall mean Borrower and all
Subsidiaries of Borrower.

“Debtor Relief Law” shall mean, collectively,
the Bankruptcy Code and all other applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, receivership, insolvency, reorganization
or similar debtor relief laws from time to time in effect affecting the rights
of creditors generally, in each case as amended from time to time.

“Default” shall mean any event, fact,
circumstance or condition that, with the giving of applicable notice or passage
of time or both, would constitute, be or result in an Event of Default.

 8
 

 

“Default Rate” shall mean a per annum rate
equal to the Applicable Rate plus 2.0% per annum (it being understood that the
Default Rate with respect to all payment Obligations under the Loan Documents
other than in respect of the Principal Balance shall be a per annum rate equal to
the Prime Rate in effect from time to time plus four and three-quarters
percent (4.75%) per annum).

“Distribution” shall mean any fee, payment,
dividend, distribution, bonus, payment or other remuneration of any kind, and
any repayment or prepayment of or debt service on loans or other indebtedness.

“Dollars” and “$” shall mean lawful
money of the United States of America.

“eBenX” shall mean eBenX, Inc., a Minnesota
corporation.

“eBenX Joint Development Agreement” shall mean
that certain Joint Development Agreement dated as of August 31, 2001 between
Online Benefits and eBenX.

“eBenX Loan Agreement” shall mean that certain
Loan Agreement dated as of August 31, 2001 between Online Benefits and eBenX.

“eBenX Loan Documents” shall mean the eBenX
Note, the eBenX Loan Agreement, the eBenX Security Agreement, the eBenX Joint
Development Agreement and all other documents, instruments and agreements
executed and delivered by Online Benefits and/or eBenX pursuant thereto or in
connection therewith, all as amended, modified, supplemented or restated from
time to time.

“eBenX Note” shall mean that certain
Subordinated Line of Credit Note dated August 31, 2001 in the original
principal amount of $1,500,000 made by Online Benefits in favor of eBenX.

“eBenX Obligations” shall mean all
Indebtedness, liabilities and other obligations due and owing by any Credit
Party to eBenX, whether under the eBenX Loan Documents or otherwise.

“eBenX Security Agreement” shall mean that
certain Security Agreement dated as of August 31, 2001 between Online Benefits
and eBenX.

“EBITDA” shall have the meaning ascribed to
such term in, and be calculated in the manner set forth in, Exhibit B-2.

“Eligible Assignee” shall mean any of the
following:  (a) a commercial bank
organized under the laws of the United States, or any state thereof; (b) a
commercial bank organized under the laws of any other country; (c) a finance
company, insurance company or other financial institution or fund which is
engaged in making, purchasing or otherwise investing in commercial loans or
other debt obligations for its own account in its ordinary course of business;
or (d) a Related Fund.

“Employment Agreements” shall mean,
collectively, (i) that certain Employment Agreement dated February 21, 2002
between Kevin Noland and Borrower, as amended and in 

 9
 

 

effect on the Closing
Date, (ii) that certain Employment Agreement dated April 10, 2006 between Mark
Adams and Borrower, (iii) that certain Employment Agreement of even date
herewith between Alan Cohen and Borrower and (iv) that certain Employment
Agreement of even date herewith between John Gedney and Borrower, in each case
as the same may be amended, modified and otherwise supplemented in accordance
with the terms hereof.

“Environmental Laws” shall mean, collectively,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, the Superfund Amendment and Reauthorization Act of 1986, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the Clean Air
Act, the Clean Water Act, any other “Superfund” or “Superlien” law and all
other federal, state and local and foreign environmental, land use, zoning,
health, chemical use, safety and sanitation laws, statutes, ordinances and
codes relating to the protection of the environment and/or governing the use,
storage, treatment, generation, transportation, processing, handling,
production or disposal of Hazardous Substances, in each case, as amended, and
the legally-binding rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of Governmental Authorities with respect
thereto.

“ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended, and the regulations thereunder.

“Eurocurrency Reserve
Requirements” for any day as applied to a LIBOR Loan shall mean the
aggregate (without duplication) of the rates (expressed as a decimal rounded
upward to the nearest 1/100th of (%)) as determined by Agent of the then stated
maximum reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve System of the United States or
other Governmental Authority, or any successor thereto, having jurisdiction
with respect thereto) prescribed for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of such Board maintained by a
member bank of the Federal Reserve System.

“Excess Cash Flow” shall mean, for any fiscal
year, without duplication, an amount equal to the sum of (a) the Net Income of
Borrower for such period, plus (b) to the extent deducted in
determining such Net Income, depreciation expense, amortization expense
(including the amortization or impairment of goodwill), and accrued non-cash
Interest Expense for such fiscal year plus (c) an amount equal to the
aggregate net cash proceeds of the sale, lease, transfer or other disposition
of assets by any Credit Party or any of its Subsidiaries during such fiscal
year to the extent not required to be applied to mandatory prepayments or
payments on the Term Loans or otherwise used or designated to be used for
reinvestment purposes in accordance with the terms hereof, plus (d) the
amount of any cash tax refunds received by any Credit Party during such fiscal
year, less (e) an amount equal to the aggregate amount of all
prepayments of the Term Loans in excess of required repayments, less (f)
Unfinanced Capital Expenditures (other than any Unfinanced Capital Expenditures
made to consummate any Permitted Acquisition) during such fiscal year to the
extent permitted hereunder, less (g) an amount equal to the sum of all
regularly scheduled payments and optional and/or mandatory payments of
principal on Indebtedness of any Credit Party actually made during such period
to the extent permitted hereunder, less (h) cash distributions permitted
hereunder, Tax Distributions during such period to the extent

 10

 

permitted hereunder, and
payments of any working capital adjustments under the Closing Date Acquisition
Documents.

“Facility Cap” shall mean, initially, Two
Million Dollars ($2,000,000), as
reduced from time to time in accordance with the terms of this Agreement.

“Fair Valuation” shall mean the determination
of the value of the consolidated assets of a Person on the basis of the amount
which may be realized by a willing seller within a reasonable time through
collection or sale of such assets at market value on a going concern basis to
an interested buyer who is willing to purchase under ordinary selling
conditions in an arm’s length transaction.

“GAAP” shall mean generally accepted accounting
principles in the United States of America in effect from time to time as
applied by nationally recognized accounting firms.

“Governmental Authority” shall mean any
federal, state, foreign, municipal, national, provincial, local or other
governmental department, court, commission, board, bureau, agency or
instrumentality or political subdivision thereof, or any entity or officer
exercising executive, legislative or judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case,
whether of the United States or a state, territory or possession thereof, a
foreign sovereign entity or country or jurisdiction or the District of
Columbia.

“Guarantor” shall mean Integrative Medicine,
Nidus, Online Benefits, Benergy, Captiva and any other Credit Party other than
Borrower, and “Guarantors” shall mean all such Persons.

“Guaranty” shall mean any guaranty executed by
a Guarantor, including, without limitation, the guaranty effectuated by Article
XIV of this Agreement or any guaranty set forth in a Pledge Agreement
executed by a Person relating to the Capital Stock of Borrower or any of its
Subsidiaries.

“Hazardous Substances” shall mean any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances
or related materials as defined in or other substances or materials regulated
by or subject to, or which may form the basis of liability under, any
applicable Environmental Law.

“Hedging Agreement” shall mean any swap
agreements (as defined in Section 101 of the Bankruptcy Code) and any other
agreements or arrangements designed to provide protection against fluctuations
in interest or currency exchange rates.

“Indebtedness” of any Person shall mean,
without duplication: (a) all indebtedness for borrowed money; (b) all
obligations issued, undertaken or assumed as the deferred purchase price of
property or services (other than trade payables incurred and paid in the
Ordinary Course of Business of such Person); (c) the face amount of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder and all
reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments
issued by such Person; (d) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred
in connection with the acquisition of 

 11
 

 

property, assets or
businesses; (e) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either case
with respect to Property acquired by such Person (even though the rights and
remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property); (f) all Capital Lease
Obligations; (g) the principal balance outstanding under any synthetic lease,
off-balance sheet loan or similar off balance sheet financing products; (h) all
indebtedness referred to in clauses (a) through (g) above secured by (or for
which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in Property (including accounts and
contracts rights) owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness; and (i) all Contingent
Obligations in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (h) above.

“Intellectual Property” shall mean all present
and future:  trade secrets, know-how and
other proprietary information; trademarks, trademark applications, internet
domain names, service marks, trade dress, trade names, business names, designs,
logos, slogans (and all translations, adaptations, derivations and combinations
of the foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights and copyright applications; (including
copyrights for computer programs) and all tangible and intangible property
embodying the copyrights, unpatented inventions (whether or not patentable);
patents and patent applications; industrial design applications and registered
industrial designs; license agreements related to any of the foregoing and
income therefrom; books, records, writings, computer tapes or disks, flow
diagrams, specification sheets, computer software, source codes, object codes,
executable code, data, databases and other physical manifestations, embodiments
or incorporations of any of the foregoing; the right to sue for all past, present
and future infringements of any of the foregoing; all other intellectual
property; and all common law and other rights throughout the world in and to
all of the foregoing.

“Intellectual Property Security Agreement”
shall mean an Acknowledgment of Intellectual Property Collateral Lien executed
by a Credit Party in favor of Agent, for the benefit of the Lender Parties, as
the same may be modified, amended, restated or supplemented from time to time.

“Interest Payment Date” shall mean the first
day of each calendar month.

“Interest Period”
shall mean a period (i) commencing (A) on the applicable date of disbursement
of a Loan or Advance, if Borrower prior thereto has elected pursuant to Section
2.7 to have all or a portion of the Loans or Advances to be disbursed on such
date bear interest from such date determined by reference to a LIBOR Rate, (B)
with respect to the conversion of all or a portion of a Prime Rate Loan to a
LIBOR Loan, on the Business Day specified by Borrower in the applicable LIBOR
Election Notice and (C) with respect to the continuation as a LIBOR Loan of all
or a portion of a then existing LIBOR Loan after the expiration of the Interest
Period applicable to such existing LIBOR Loan, on the last day of the Interest
Period applicable to such existing LIBOR Loan, and (ii) ending one, two or
three months thereafter; provided, however:

 12
 

 

(a)           if any Interest Period otherwise
would end on a day that is not a Business Day, such Interest Period shall end
on the next succeeding Business Day, unless the result of such extension would
be to carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the immediately preceding Business Day;

(b)           any Interest Period that begins on a
day for which there is no numerically corresponding day in the last month of
such Interest Period shall end on the last Business Day of the last month of
such Interest Period;

(c)           Borrower may not select any Interest
Period for any portion of the Principal Balance of Term Loan A if, after giving
effect to such selection, the Principal Balance of Term Loan A consisting of
LIBOR Loans having Interest Periods ending after any date on which an
installment of Term Loan A is scheduled to be repaid would exceed the aggregate
Principal Balance of Term Loan A scheduled to be outstanding after giving
effect to such repayment; and

(d)           Borrower may not select any Interest
Period for any portion of the Principal Balance of the Revolving Loan that
would extend beyond the last day of the Term for Revolving Loans.

“Interest Rate Agreement”
shall mean any interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to hedge the position with respect to
interest rates.

“Interest Rate
Determination Date” shall mean the date for determining a LIBOR Rate, which
date shall be two Business Days prior to the Business Day on which the
applicable Interest Period will commence.

“Joinder Agreement” shall mean an agreement, in
form and substance satisfactory to Agent in its Permitted Discretion, pursuant
to which, among other things, a Person becomes a party to, and bound by the
terms of, this Agreement and/or the other Loan Documents in the same capacity
and to the same extent as either Borrower or a Guarantor, as Agent may determine.

“Landlord Waiver and Consent” shall mean a
waiver or consent, in form and substance satisfactory to Agent in its Permitted
Discretion, pursuant to which a mortgagee, owner or lessor of real property on
which any Collateral is stored or otherwise located, or a warehouseman,
processor or other bailee of any Property of any Credit Party, (i) acknowledges
and consents to the Liens of Agent, for the benefit of the Lender Parties, (ii)
waives any Liens held by such Person on such Property, and (iii) in the case of
any such agreement with a mortgagee or lessor, (a) permits Agent access to and
use of such real Property for a reasonable amount of time following the
occurrence and during the continuance of an Event of Default to assemble,
complete and sell any Collateral stored or otherwise located thereon, and (b)
consents to the right of Agent to assume the underlying lease or assign the
underlying lease to a third party in connection with the exercise of the
collateral assignment or mortgage of such underlying lease in favor of Agent,
for the benefit of the Lender Parties.

 13
 

 

“L/C Disbursement”
shall mean any payment by the L/C Issuer pursuant to a Letter of Credit.

“L/C Issuer” shall
mean any banking institution designated by Agent in its Permitted Discretion
that, agrees, in its sole discretion, to become an L/C Issuer for purposes of
issuing Letters of Credit or L/C Undertakings pursuant to Section 2.3.

“Lender” shall mean any of the Persons from
time to time named on Schedule A under the headings “Revolving Lenders,”
“Term A Lenders” and/or “Convertible Term Lenders,” and their respective
successors and permitted assigns (but not, except as expressly set forth
herein, any Participant that otherwise is not a party to this Agreement), and “Lenders”
shall mean all of them collectively.

“Lender Addition Agreement” shall mean an
agreement among Agent, a Lender and such Lender’s assignee regarding their
respective rights and obligations with respect to assignments of the
Commitments, Loans and other interests under this Agreement and the other Loan
Documents, in form and substance acceptable to Agent in its Permitted
Discretion.

“Lender Parties” shall mean, collectively,
Agent and Lenders, and “Lender Party” shall mean any of them.

“Lending Office” shall mean, with respect to
any Lender, the office or offices of such Lender specified as its “Lending
Office” below its name on the applicable signature page hereto, or such other
office or offices of such Lender as it may from time to time notify Borrower
and Agent.

“Letter of Credit Usage”
shall mean, as of any date of determination, the sum, without duplication, of
(i) the aggregate undrawn amount of all outstanding Letters of Credit, plus
[(ii) 100% of the amount of outstanding time drafts accepted by an Underlying
Issuer as a result of drawings under Underlying Letters of Credit], plus
[(ii)][(iii)] the aggregate unreimbursed amount of all drawn Letters of Credit,
in each case as of such date of determination.

“LIBOR Election Notice”
shall mean a notice by Borrower to Agent to have a portion of the Principal
Balance bear interest determined by reference to a LIBOR Rate, in the form of Exhibit
E attached hereto.

“LIBOR Loan” shall
mean each portion of the Principal Balance which bears interest determined by
reference to a LIBOR Rate.

“LIBOR
Rate” shall mean for each Interest Period a rate of interest equal to (i)
the rate per annum (rounded upwards to the nearest 1/100th of 1%) at which
Dollar deposits in an amount comparable to the amount of the relevant LIBOR
Loan and for a period equal to such Interest Period are offered in the London
interbank eurodollar market as displayed in the Bloomberg
Financial Markets system (or other authoritative source selected by
Agent in its sole discretion, or, if the Bloomberg Financial
Markets system or another authoritative source is not available, as
otherwise determined by Agent in its sole discretion) as of 11:00 A.M. (London
time) on the applicable Interest Rate Determination Date, divided by (ii) 1.00
minus the Eurocurrency Reserve Requirements in effect on the applicable
Interest Rate Determination 

 14
 

 

Date.  The LIBOR Rate shall be adjusted with respect
to any LIBOR Loan outstanding on the effective date of any change in the
Eurocurrency Reserve Requirements as of such effective date.

“Lien” shall mean any mortgage, pledge,
security interest, encumbrance, transfer or other restriction, lien or charge
of any kind or any other priority arrangement (including any agreement to give
any of the foregoing, any conditional sale or other title retention agreement
or any lease in the nature thereof), or any other arrangement pursuant to which
title to the Property is retained by or vested in some other Person for
security purposes.

“Loan” or “Loans” shall mean,
individually or collectively, respectively, the Term Loans and the Advances
under the Revolving Facility.

“Loan Documents” shall mean, collectively, this
Agreement, the Notes, the Security Documents, the Conversion and Registration
Rights Agreement, all Borrowing Certificates, all Compliance Certificates, the
Subordination Agreements, all side letters executed at or after the Closing
Date between Agent and/or any Lender and any Credit Party, and all other
agreements, documents, instruments and certificates heretofore or hereafter
executed or delivered to Agent or any Lender in connection with any of the
foregoing or the Loans (other than the Closing Date Acquisition Documents), in
each case as the same may be amended, modified or supplemented from time to
time.

“Material Adverse Effect” shall mean any event,
condition, obligation, liability or circumstance or set of events, conditions,
obligations, liabilities or circumstances or any change(s) which:

(i)            has, had or reasonably could be
expected to have a material adverse effect upon or change in (a) the legality,
validity or enforceability of any Loan Document or (b) the perfection or
priority of any Lien granted to Agent or any Lender under any of the Security
Documents;

(ii)           has been or reasonably could be
expected to be material and adverse to the value of any of the Collateral or to
the business, operations, prospects, properties, assets, liabilities or
condition (financial or otherwise) of the Credit Parties taken as a whole; or

(iii)          has materially impaired or reasonably
could be expected to materially impair the ability of the Credit Parties, taken
as a whole, or any other Person (other than any Lender Party) to perform any of
the Obligations or its obligations, or to consummate the transactions, under
the Loan Documents.

“Maturity Date” shall mean the earliest to
occur of (i) the acceleration (whether automatic or by written notice) of any
Obligations in accordance with the terms of this Agreement, (ii) Agent’s demand
of payment of any Obligations in accordance with the terms hereof and (iii) the
last day of the Term.

“Mortgage” shall mean a mortgage, deed of
trust, deed to secure debt, leasehold mortgage, leasehold deed of trust,
leasehold deed to secure debt or similar instrument creating a Lien on real
Property or on any interest in real Property, in form and substance
satisfactory to Agent in its Permitted Discretion.

 15
 

 

“Net Proceeds” shall mean:

(a)           in respect of any issuance of debt or
equity, cash proceeds and non-cash proceeds received or receivable in
connection therewith, net of underwriting discounts and reasonable
out-of-pocket costs and expenses paid or incurred in connection therewith in
favor of any Person that is not an Affiliate of any Credit Party;

(b)           in respect of any disposition,
casualty, condemnation, taking or other event of loss, proceeds in cash, checks
or other cash equivalent financial instruments (including Cash Equivalents) as
and when received by the Person making such disposition or all insurance
proceeds received on account of such casualty, condemnation, taking or other
event of loss, in any such case net of: (i) in the event of a disposition, (x)
the direct costs relating to such disposition excluding amounts payable to
Borrower or any Affiliate of any Credit Party, (y) sale, use or other
transaction taxes paid or payable as a result thereof, and (z) amounts required
to be applied to repay principal, interest and prepayment premiums and
penalties on Indebtedness (other than the Obligations) secured by a Lien on the
asset that is the subject of such disposition; and (ii) in the event of a
casualty, condemnation, taking or other event of loss, (x) all money actually
applied to repair or reconstruct the damaged property or property affected by
the condemnation or taking in accordance with the terms hereof, (y) all of the
costs and expenses reasonably incurred in connection with the collection of
such proceeds, award or other payments, and (z) any amounts retained by or
paid to parties having superior rights to such proceeds, awards or other
payments; and

(c)           in respect of payment of the
undistributed portion of the Exchange Fund (as defined in the Closing Date
Acquisition Agreement), the amount of such payment less all of the costs and
expenses reasonably incurred in connection with the collection of such payment.

“Notes” shall mean a Note payable to the order
of any Lender executed by Borrower evidencing one or more Loans, together with
any promissory notes or other instruments issued in substitution therefor or
replacement thereof, in each case as the same may be amended, modified,
divided, split, supplemented and/or restated from time to time.

“Obligations” shall mean, without duplication,
all present and future obligations, Indebtedness and liabilities of Borrower
and/or any other Credit Party or other Person to Agent and/or the other Lender
Parties at any time and from time to time of every kind, nature and description
arising under any Loan Document, whether direct or indirect, secured or
unsecured, joint and/or several, absolute or contingent, due or to become due,
matured or unmatured, now existing or hereafter arising, contractual or
tortious or liquidated or unliquidated, including, without limitation, all
interest, fees, charges, expenses and/or amounts paid or advanced by Agent or
any other Lender Party to, on behalf of or for the benefit of any such Person
for any reason at any time, obligations of performance as well as obligations
of payment, and all interest, fees and other amounts that accrue after the
commencement of any proceeding under any Debtor Relief Law by or against any
such Person or its Properties.

 16
 

 

“Ordinary Course of Business” shall mean, in
respect of any transaction involving any Credit Party, the ordinary course of
such Credit Party’s business, as conducted by such Credit Party in accordance
with past practices or reasonable business judgment and undertaken by such
Credit Party in good faith and not for purposes of evading any covenant or
restriction in any Loan Document.

“Organizational Documents” shall mean (a) for
any corporation, the certificate or articles of incorporation, the bylaws, any
certificate of designation or other instrument relating to the rights of
preferred shareholders or stockholders of such corporation, any shareholder
rights agreement and all applicable resolutions of the Board of Directors (or
any committee thereof) of such corporation, (b) for any partnership, the
partnership agreement and, if applicable, the certificate of limited
partnership, and (c) for any limited liability company, the operating agreement
and articles or certificate of formation or organization.

“Patriot Act” shall mean the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001, P.L. 107-56, as amended.

“Payment Office”
shall mean initially the address set forth beneath Agent’s name on the
signature page of this Agreement, and thereafter, such other office of Agent,
if any, which it may designate by notice to Borrower to be the Payment Office.

“Permit” shall mean any license, lease, power, permit,
franchise, certificate, authorization or approval issued by a Governmental
Authority.

“Permitted
Acquisition” shall mean any Acquisition by Borrower or a domestic
Wholly-Owned Subsidiary of Borrower in a transaction that satisfies each of the
following requirements:

(a)           such
Acquisition is not a hostile or contested acquisition;

(b)           as
soon as available, but not less than thirty days prior to such Acquisition,
Agent shall have received (i) a written summary of such Acquisition, (ii) a
summary financial analysis of the Target and (iii) income statement of the
Target with operating statistics, pro forma balance sheet, and pro forma cash
flow statements;

(c)           the
Target shall have had positive EBITDA for the prior four (4) consecutive fiscal
quarters and (i) shall be located in the United States of America, (ii) shall
be organized under laws of one of the United States of America, and (iii) shall
not be engaged, directly or indirectly, in any line of business other than the
Business;

(d)           Borrower have demonstrated to the
satisfaction of Agent in its Permitted Discretion that Borrower will be in pro
forma compliance with Section 7.1 after giving effect to the consummation of
such Acquisition;

(e)           both
before and after giving effect to such Acquisition, each of the representations
and warranties in the Loan Documents is true and correct in all material
respects and no Default or Event of Default exists, will exist, or would result
therefrom;

 17
 

 

(f)            the
aggregate consideration to be paid by Borrower (including any Indebtedness
assumed or issued in connection therewith, the amount thereof to be calculated
in accordance with GAAP and expenses incurred in connection therewith) in
connection with all such Acquisitions is less than or equal to $5,000,000 in
cash and $10,000,000 in Permitted Securities;

(g)           no Credit Party shall, as a result of
or in connection with any such Acquisition, assume or incur any direct or
contingent liabilities (whether relating to environmental, tax, litigation, or
other matters) that could reasonably be expected to have a Material Adverse
Effect;

(h)           if
such Acquisition is (i) an acquisition of the Capital Stock of a Target, the
Acquisition is structured so that the Target shall become a Wholly-Owned
Subsidiary of a Borrower, (ii) an acquisition of assets, the Acquisition is
structured so that Borrower or one of its domestic Wholly-Owned Subsidiaries
shall acquire such assets; or (iii) an acquisition by merger, the Acquisition
is structured so that Borrower or a domestic Wholly-Owned Subsidiary of
Borrower is the surviving entity;

(i)            Agent
shall have received such UCC, state and Federal tax lien, pending suit and
judgment searches against the Target and any newly-formed Subsidiary of
Borrower formed to consummate the Acquisition and Lien release letters and
other documents as Agent may require in its Permitted Discretion to evidence
the termination of Liens on the assets or business to be acquired;

(j)            consents
shall have been obtained in favor of Agent to the collateral assignment of
rights and indemnities under the related acquisition documents and opinions of
counsel for the applicable Credit Party and (if delivered to the applicable
Credit Party), the selling party in favor of Agent and Lenders shall have been
delivered to Agent;

(k)           the
provisions of Section 6.7 shall have been satisfied and the Target
(if such Acquisition is structured as an acquisition of the Capital Stock of
the Target) or Borrower or the applicable Wholly-Owned Subsidiary of Borrower
(if such Acquisition is structured as a purchase of assets or a merger and
Borrower or a Wholly-Owned Subsidiary of Borrower is the surviving entity)
shall have executed and delivered to Agent such documents as Agent may require
to join with any into the Loan Documents and grant to Agent a first priority
Lien (subject in priority only to Priority Permitted Liens) in all of the
assets of such Target or surviving entity, and their respective Subsidiaries,
each in form and substance satisfactory to Agent;

(l)            concurrently
with the consummation of such Acquisition, Agent shall have received conformed
copies of all closing documents and deliveries prepared in connection with the
Acquisition (and Borrower shall deliver complete copies of all executed closing
documents and deliveries prepared in connection with the Acquisition as soon as
reasonably possible following the effective date of the Acquisition but in no
event later than thirty days following such effective date); and

 18
 

 

(m)          a
certificate, in form, scope and substance reasonably acceptable to Agent of a
Responsible Officer of Borrower confirming satisfaction of each of the
foregoing conditions precedent shall have been delivered to Agent prior to such
Acquisition.

“Permitted Discretion” shall mean, with respect
to any Person, a determination or judgment made by such Person in good faith in
the exercise of reasonable (from the perspective of a secured lender) credit or
business judgment.

“Permitted Securities” shall mean any shares,
units or interests of or warrants to acquire Capital Stock of Borrower that by
their terms (or by the terms of any security into which they are convertible or
for which they are exchangeable) or upon the happening of any event or
otherwise (A) are not convertible or exchangeable for Indebtedness or any
shares, units or interests of Capital Stock that are not Permitted Securities,
(B) (i) do not mature and (ii) are not putable or redeemable at the option of
the holder thereof, in each case under clause (i) or (ii) in whole or in part
on or prior to the date that is six (6) months after the earlier of the
scheduled end of the Term or the actual payment in full in cash of the
Obligations, (C) do not require or mandate payments of dividends or
distributions in cash on or prior to the date that is six (6) months after the earlier
of the scheduled end of the Term or the actual payment in full in cash of the
Obligations, (D) are unsecured and by operation of law or by legally binding
agreement are subordinated in right of repayment, liens, security and remedies
to all of the Obligations and to all of Agent’s and the other Lender Parties’
rights, Liens and remedies, (E) are not sold, issued or otherwise transferred
in connection with or as a part of a Public Offering, and/or (F) to the extent
the same are subject to or provide for any Shareholder Blocking Rights, all
such Shareholder Blocking Rights have been waived pursuant to an agreement in
form and satisfactory to Agent in its Permitted Discretion.

“Person” shall mean an individual, a
partnership, a corporation, a limited liability company, a business trust, a
joint stock company, a trust, an unincorporated association, a joint venture, a
Governmental Authority or any other entity of whatever nature.

“Pledge Agreement” shall mean any pledge
agreement between Agent and any Credit Party, as the same be amended, modified,
supplemented or restated from time to time.

“Prime Rate” shall mean a fluctuating per annum
rate of interest equal at all times to the rate of interest announced publicly
from time to time by Citibank, N.A. as its base rate; provided, that such rate
is not necessarily the best rate offered to its customers and, should Agent be
unable to determine such rate, such other indication of the prevailing prime
rate of interest as reasonably may be chosen by Agent; provided, further, that
each change in the fluctuating rate of interest shall take effect
simultaneously with the corresponding change in the Prime Rate.

“Prime Rate Loan”
shall mean each portion of the Principal Balance which bears interest
determined by reference to the Prime Rate.

“Prime Rate Portion”
shall mean the Principal Balance and all other Obligations other than the
portion thereof consisting of LIBOR Loans.

“Principal Balance”
shall mean the outstanding principal balance of the Loans or any specified portion
thereof.

 19

 

“Prior Online Benefits Shareholder Agreement”
shall mean that certain Stockholders’ Agreement dated as of March 21, 2000
among Online Benefits and each of its Stockholders party thereto, as amended
and in effect on the Closing Date.

“Priority Permitted Liens” shall mean Permitted
Liens contemplated by and permitted under Sections 7.3(b), (d) and/or (e).

“Property” shall mean all types of real,
personal or mixed property and all types of tangible or intangible property.

“Pro Rata Share” shall mean:

(a)           with
respect any Revolving Lender as to all Revolving Lenders, the percentage
obtained by dividing (i) the Commitment of that Revolving Lender under the
Revolving Facility by (ii) all such Commitments of all Revolving Lenders under
the Revolving Facility; provided, however, that if any such Commitment of a
Revolving Lender is terminated pursuant to the terms hereof, then “Pro Rata
Share” means the percentage obtained by dividing (x) the Principal Balance of
the Revolving Loans owing to such Revolving Lender by (y) the Principal Balance
of the Revolving Loans;

(b)           with
respect any Term A Lender as to all Term A Lenders, the percentage obtained by
dividing (i) the Principal Balance of Term Loan A owing to such Term A Lender
by (ii) the Principal Balance of Term Loan A; and

(c)           with
respect any Convertible Term Lender as to all Convertible Term Lenders, the
percentage obtained by dividing (i) the Principal Balance of the Convertible
Term Loan owing to such Convertible Term Lender by (ii) the Principal Balance
of the Convertible Term Loan; and

(d)           with
respect to any Lender as to all Lenders, the percentage obtained by dividing
(i) the Principal Balance owing to such Lender and such Lender’s Commitments by
(ii) the Principal Balance and all Lenders’ Commitments;

in any case described in
(a), (b) or (c) above, as such percentage may be adjusted by assignments
permitted pursuant to Section 12.2.

“Public Offering” shall mean any offer or sale
of securities pursuant to any registration statement filed and effective with
the Securities and Exchange Commission or any other applicable Governmental
Authority.

“Purchase Money Debt” shall mean Indebtedness,
other than the Obligations, incurred by any Credit Party to purchase tangible
personal property.

“Qualified Asset Sale” shall mean any sale,
transfer or other disposition by Borrower or any of its Subsidiaries permitted
under Section 7.7(a), (b) or (d).

“Qualifying Interest Rate Agreement” shall mean
any Interest Rate Agreement entered into by Borrower in the Ordinary Course of Business
(for bona fide hedging purposes and not for speculation) with one or more
financial institutions acceptable to Agent in its Permitted 

 20
 

 

Discretion and on such
terms and conditions as are customary and otherwise satisfactory to Agent.

“Real Estate” shall mean each parcel of real
Property owned by any Credit Party.

“Related Documents” shall mean, collectively,
the Closing Date Acquisition Documents and the Employment Agreements.

“Related Fund” shall mean (a) any fund, trust
or similar entity that invests in commercial loans in the ordinary course of
its business and is advised or managed by (i) a Lender, (ii) an Affiliate of a
Lender, (iii) the same investment advisor that manages a Lender or (iv) an
Affiliate of an investment advisor that manages a Lender or (b) any finance
company, insurance company or other financial institution which temporarily
warehouses Loans for any Lender or any Person described in clause (a) above.

“Related Transactions” shall mean the making of
the Loans and the consummation of the Closing Date Acquisition.

“Requisite Convertible Term Lenders” shall mean
at any time Convertible Term Lenders then holding more than sixty six and two-thirds percent (66-2/3%)
of the Principal Balance of the Convertible Term Loan.  For purposes of this definition, all
Convertible Term Lenders that are Affiliates and each Convertible Term Lender
and its Related Funds shall be deemed to constitute one, single Convertible
Term Lender.

“Required Indemnity
Prepayment Amount” shall mean, at any time that Borrower receives Common
Stock from the Escrow Fund (as defined in the Closing Date Acquisition
Agreement) in respect of any claim for indemnification under the Closing Date
Acquisition Agreement other than any indemnified liability settled by the payment
of cash by Borrower, a cash amount equal to 50% of (i) the number of shares of
Common Stock received from the Escrow Fund multiplied by the Average Closing
Price (as defined in the Closing Date Acquisition Agreement), less (ii) all of
the costs and expenses reasonably incurred in connection with the prosecution,
enforcement, settlement and collection of the related claim for
indemnification.

“Requisite Lenders” shall mean at any time (a)
if the Commitments under the Revolving Facility have not terminated, Lenders
then holding more than sixty six and
two-thirds percent (66-2/3%) of the sum of the Commitments under
the Revolving Facility then in effect, plus the Principal Balance of the
Term Loans then outstanding, or (b) if the Commitments under the Revolving
Facility have terminated, Lenders then holding more than sixty six and two-thirds percent (66-2/3%)
of the sum of the Principal Balance
plus outstanding participations in Letter of Credit Usage; provided,
that, if there are only two (2) Lenders under the Loan Documents, then
Requisite Lenders shall constitute both such Lenders.  For purposes of this definition, all Lenders
that are Affiliates and each Lender and its Related Funds shall be deemed to
constitute one, single Lender.

“Responsible Offer” shall mean the chief
executive officer or the president of Borrower or any other officer having
substantially the same authority and responsibility; or, with respect to
compliance with financial covenants or delivery of financial information, the
chief financial 

 21
 

 

officer or the treasurer
of Borrower, or any other officer having substantially the same authority and
responsibility.

“Revolving Lenders” shall mean the Persons from
time to time named on Schedule A under the heading “Revolving Lenders,”
together with their respective successors and permitted assigns (but not,
except as expressly set forth herein, any Participant that otherwise is not a
party to this Agreement).

“Revolving Loans” shall mean, collectively, the
Advances made by Revolving Lenders to Borrower under the Revolving Facility and
all Obligations related thereto.

“Securities Act” shall mean the Securities Act
of 1933, as amended.

“Security Agreements” shall mean any security
or pledge agreement executed by a Person in favor of Agent, for the benefit of
the Lender Parties, to secure the Obligations.

“Security Documents” shall mean, collectively,
the Security Agreements, the Pledge Agreements, the Guarantees, the Collateral
Assignment of Closing Date Acquisition Documents, any Mortgages, the Intellectual
Property Security Agreements, all Account Control Agreements, all Landlord
Waivers and Consents, all UCC financing statements and all other agreements,
documents and instruments that create or perfect the Liens in the Collateral,
as the same may be modified, amended or supplemented from time to time.

“Shareholder Blocking Rights” shall mean any
rights of any owner (direct or indirect) of any Capital Stock of any Credit
Party pursuant to the terms of any agreement or Organizational Document (i) to
consent, or to require such owner’s consent, to any foreclosure by the Agent
under any Pledge Agreement or otherwise to the exercise of any of Agent’s
rights and remedies thereunder or (ii) to restrain, delay, impair or otherwise
interfere with Agent in the event of Agent’s exercise of its rights under a
Pledge Agreement.

“Solvent” shall mean, as to any Person at any
time, that (a) the fair value of the Property of such Person is greater than
the amount of such Person’s liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(32)(A) of the Bankruptcy Code and, in the
alternative, for purposes of the Uniform Fraudulent Transfer Act; (b) the
present fair saleable value of the Property of such Person is not less than the
amount that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured; (c) such Person is able to
realize upon its Property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person’s ability to pay as
such debts and liabilities mature; and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s Property would constitute unreasonably
small capital.

“Subordinated Debt” shall mean any
Indebtedness, contingent equity, earnout or other obligations of Borrower or
any of its Subsidiaries that is unsecured and has subordination terms,
covenants, pricing and other terms which have been approved in writing by Agent and with 

 22
 

 

respect to which the
holder thereof has executed and delivered to Agent a Subordination Agreement.

“Subordination Agreement” shall mean any
agreement between Agent and the holders of Subordinated Debt pursuant to which
such Subordinated Debt is subordinated in right of payment, liens, security and
remedies to all of the Obligations and all of the Lender Parties’ rights, Liens
and remedies, in form and substance satisfactory to Agent.

“Subsidiary” shall mean, as to any initial
Person, any other Person in which more than fifty percent (50%) of all equity,
membership, partnership or other ownership interests is owned directly or
indirectly by such initial Person or one or more of its Subsidiaries.  For purposes of the Loan Documents, any
reference to “Subsidiary” shall be deemed to refer to a Subsidiary of Borrower
unless the context provides otherwise.

“Target”
means a Person whose assets or Capital Stock are proposed to be acquired by
Borrower or a domestic Wholly-Owned Subsidiary of Borrower in an Acquisition.

“Term” shall mean the period commencing on the
Closing Date and ending on August 14, 2011.

“Term A Lenders” shall mean the Persons from
time to time named on Schedule A under the heading “Term A Lenders,”
together with their respective successors and permitted assigns (but not,
except as expressly set forth herein, any Participant that otherwise is not a
party to this Agreement).

“Term Lenders” shall mean the Term A Lenders
and the Convertible Term Lenders.

“Term Loan A” shall mean the term loan made by
the Term A Lenders to Borrower on the Closing Date pursuant to Section 2.2 in
the aggregate original principal amount of Twenty Million Dollars
($20,000,000), and all Obligations related thereto.

“Term Loans” shall mean Term Loan A and the
Convertible Term Loan.

“UCC” shall mean the Uniform Commercial Code as
in effect in the State of Maryland
from time to time; provided, that to the extent the UCC is used to define any
term herein or in any other Loan Document and such term is defined differently
in different Articles or Divisions of the UCC the definition of such term
contained in Article or Division 9 shall govern.

“Underlying Issuer”
shall mean a third Person that is the beneficiary of an L/C Undertaking and has
issued a letter of credit at the request of the L/C Issuer for the benefit of
Borrower.

“Underlying Letter of
Credit” shall mean a documentary letter of credit that has been issued by
an Underlying Issuer.

“Unfinanced Capital Expenditures” shall mean
all Capital Expenditures other than Capital Expenditures financed with the
proceeds of Permitted Indebtedness
(Permitted Indebtedness, for this purpose, does not include Advances under the
Revolving Facility).

 23
 

 

“Wholly-Owned Subsidiary” shall mean any
Subsidiary in which (other than directors’ qualifying shares required by law)
one hundred percent (100%) of the equity, at the time as of which any
determination is being made, is owned, beneficially and of record, by Borrower
or by one or more of the other Wholly-Owned Subsidiaries of Borrower, or both.

 24

 

APPENDIX B

LETTERS OF CREDIT

(a)           Subject to the terms
and conditions of this Agreement, Agent agrees to cause the L/C Issuer from
time to time during the Term to issue standby letters of credit or documentary
letters of credit for the account of Borrower (each standby letter of credit or
documentary letter of credit, as applicable, a “Letter of Credit”) or to
purchase participations or execute indemnities or reimbursement obligations
(each such undertaking, an “L/C Undertaking”)
with respect to documentary letters of credit which comply with the provisions
of this Appendix B issued by an Underlying Issuer for the account of
Borrower (each Letter of Credit or L/C Undertaking, as the context requires,
constituting or relating to a documentary letter of credit is referred to in
this Agreement as a “Documentary Letter of
Credit” and each Letter of Credit or L/C Undertaking, as the context
requires, constituting or relating to a standby letter of credit is referred to
in this Agreement as a “Standby Letter of Credit”);
provided, however, that the L/C Issuer will not be required to
issue, purchase or execute a requested Documentary Letter of Credit or a
requested Standby Letter of Credit if any of the following would result after
giving effect thereto:  (i) the Letter of
Credit Usage would exceed the Facility Cap minus the amount of Advances
then outstanding or (ii) the aggregate face amount of all Standby Letters
of Credit and Documentary Letters of Credit then outstanding would exceed
$500,000.  If L/C Issuer is obligated to
advance funds under a Documentary Letter of Credit, Borrower immediately shall
reimburse such L/C Disbursement to L/C Issuer by paying to Agent an amount
equal to such L/C Disbursement not later than 1:00 p.m. (New York City time) on
the date that such L/C Disbursement is made, if Borrower shall have received
written or telephonic notice of such L/C Disbursement prior to 12:00 p.m. (New
York City time) on such date, or, if such notice has not been received by
Borrower prior to such time on such date, then not later than 1:00 p.m. (New
York City time), on the first Business Day that Borrower has such notice prior
to 12:00 p.m. (New York City time), and, in the absence of such reimbursement,
the L/C Disbursement immediately and automatically shall be deemed to be an
Advance hereunder and, thereafter, shall bear interest at the Applicable Rate
for Advances.  To the extent an L/C
Disbursement is deemed to be an Advance hereunder, Borrower’s obligation to
reimburse such L/C Disbursement shall be discharged and replaced by the
resulting Advance.  The Documentary
Letters of Credit and Standby Letters of Credit that have not been drawn upon
shall not bear interest.

(b)           Borrower may from time
to time request Agent to assist Borrower in establishing or opening (i) a
Standby Letter of Credit by delivering to L/C Issuer with a copy to Agent, at
the Payment Office, the L/C Issuer’s standard form of standby letter of credit
application (the “Standby Letter of Credit Application”) completed to the
satisfaction of the L/C Issuer (in the exercise of its Permitted Discretion),
and such other certificates, documents and other papers and information as
Agent or L/C Issuer may reasonably request, or (ii) a Documentary Letter of Credit by delivering to L/C
Issuer, with a copy to Agent, at the Payment Office, the L/C Issuer’s standard
form of documentary letter of credit application (each “Documentary Letter of Credit Application”) completed to the satisfaction of the L/C Issuer (in the
exercise of its Permitted Discretion), and such other certificates, documents
and other papers and information as Agent or L/C Issuer may reasonably
request.  If requested by Agent or L/C

 1
 

 

Issuer, Borrower also
shall be an applicant under the application with respect to any Underlying
Letter of Credit that is to be the subject of an L/C Undertaking.

(c)           Each Documentary Letter
of Credit and each Standby Letter of Credit (and, in each case, each
corresponding Underlying Letter of Credit) shall, among other things, (i) be in
form and substance acceptable to the L/C Issuer (in the exercise of its
Permitted Discretion), including the requirement that the amounts payable
thereunder must be payable in Dollars, (ii) provide for the payment of sight or
time drafts when presented for honor thereunder in accordance with the terms
thereof and when accompanied by the documents described therein, (iii) in the
case of a Documentary Letter of Credit, have an expiry date not later than one
hundred and eighty (180) days after such Documentary Letter of Credit’s date of
issuance and in no event later than 30 days prior to the last day of the Term,
and (iv) in the case of a Standby Letter of Credit, have an expiry date not
later than twelve (12) months after such Standby Letter of Credit’s date of
issuance and in no event later than 30 days prior to the last day of the
Term.  Each Standby Letter of Credit
Application and each Standby Letter of Credit shall be subject to the
International Standby Practices (ISP98) issued by the Institute for
International Banking Law and Practice, Inc., and any amendments or revision
thereof.

(d)           In connection with the
issuance of any Letter of Credit, Borrower shall indemnify, save and hold
Agent, each Revolving Lender and each L/C Issuer harmless from any loss, cost,
expense or liability, including, without limitation, payments made by Agent,
any Revolving Lender or any L/C Issuer, and reasonable out-of-pocket expenses
and reasonable attorneys’ fees incurred by Agent, any Revolving Lender or any
L/C Issuer arising out of, or in connection with, any Letter of Credit to be
issued for the account of Borrower, except for any such losses, costs, expenses
or liabilities arising out of Agent’s, such Revolving Lender’s or such L/C
Issuer’s gross negligence or willful misconduct.  Borrower shall be bound by the L/C Issuer’s
regulations and reasonable good faith interpretations of any Letter of Credit
issued or created for Borrower’s account, although this interpretation may be
different from Borrower’s own; and, neither Agent nor any Revolving Lender, any
L/C Issuer, nor any of its correspondents shall be liable for any error,
negligence, or mistakes, whether of omission or commission, in following
Borrower’s instructions or those contained in any Letter of Credit or of any
modifications, amendments or supplements thereto or in issuing or paying any
Letter of Credit, except for, and solely to the extent of, Agent’s, any
Revolving Lender’s, such L/C Issuer’s or such correspondents’ gross negligence
or willful misconduct.

(e)           Borrower shall authorize
and direct the L/C Issuer and each Underlying Issuer to name Borrower as the “Account
Party” therein and to accept and rely upon the L/C Issuer’s instructions and
agreements with respect to all matters arising in connection with the
Documentary Letters of Credit and the Standby Letters of Credit and the
applications therefor.

(f)            In connection with all
Documentary Letters of Credit issued or caused to be issued by the L/C Issuer
under this Agreement, Borrower hereby appoints Agent, L/C Issuer and each Underlying
Issuer, or the respective designee(s) of any of them, as its attorney, with
full power and authority (i) to sign and/or endorse Borrower’s name upon any
warehouse or other receipts or any letter of credit applications; (ii) to sign
Borrower’s name on bills of lading; (iii) to clear Inventory through the United
States of America Customs Department (“Customs”) in the name of
Borrower, L/C Issuer, Underlying Issuer, Agent or Agent’s, L/C Issuer’s or
Underlying

 2
 

 

Issuer’s designee, and to
sign and deliver to Customs officials powers of attorney in the name of
Borrower for such purpose; (iv) to complete in the name of Agent, L/C Issuer,
Underlying Issuer or Agent’s, L/C Issuer’s or Underlying Issuer’s designee, any
order, sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof; (v) to clear and resolve any
questions of non-compliance of documents; (vi) to give any instructions as to
acceptance or rejection of any documents or goods; (vii) to execute any and all
applications for steamship or airways guarantees, indemnities or delivery
orders; (viii) to grant any extensions of the maturity of, time of payment for,
or time of presentation of, any drafts, acceptances, or documents; and (ix) to
agree to any amendments, renewals, extensions, modifications, changes or
cancellation of any of the terms or conditions of any of the applications,
Documentary Letters of Credit, drafts or acceptances; all in Agent’s, L/C
Issuer’s or Underlying Issuer’s sole name, and the L/C Issuer shall be entitled
to comply with and honor any and all such documents or instruments executed by
or received solely from Agent, all without notice to or consent from
Borrower.  Agent, L/C Issuer, Underlying
Issuer and their agents or attorneys will not be liable for any acts or
omissions or for any error of judgment or mistakes of fact or law, except gross
negligence or willful misconduct.  This
power, being coupled with an interest, may only be exercised by Agent or L/C
Issuer if an Event of Default has occurred and is continuing and is irrevocable
as long as any Documentary Letters of Credit remain outstanding.  Borrower hereby authorizes and directs any
Underlying Issuer to deliver to the L/C Issuer all instruments, documents, and
such other writings and property received by such Underlying Issuer pursuant to
such Underlying Letters of Credit and to accept and rely upon the L/C Issuer’s
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.

(g)           Except as expressly
provided for herein, neither Agent, L/C Issuer, any Revolving Lender nor any
Underlying Issuer shall be responsible for: the existence, character, quality,
quantity, condition, packing, value or delivery of the goods purporting to be
represented by any documents; any differences or variation in the character,
quality, quantity, condition, packing, value or delivery of the goods from that
expressed in the documents; the validity, sufficiency or genuineness of any
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent, or
forged; the time, place, manner or order in which shipment is made; partial or
incomplete shipment, or failure or omission to ship any or all of the goods
referred to in the Documentary Letters of Credit or documents; any deviation
from instructions, delay, default, or fraud by the shipper and/or any one else
in connection with the Collateral or the shipping thereof; or any breach of
contract between the shipper or vendors and Borrower.

(h)           Borrower must ensure
that any necessary import, export or other licenses or certificates for the
import or handling of the Collateral will have been promptly procured; all
foreign and domestic governmental laws and regulations in regard to the
shipment and importation of the Collateral or the financing thereof will have
been promptly and fully complied with in all material respects; and any
certificates in that regard that Agent and/or L/C Issuer may at any time
request will be promptly furnished. 
Borrower warrants and represents that all shipments made under any such
Documentary Letters of Credit are in accordance in all material respects with
the governmental laws and regulations of the countries in which the shipments
originate and terminate, and are not prohibited by any such law and
regulations.  Borrower assumes all risk,
liability and responsibility for, and agrees to pay and discharge all present
and

 3
 

 

future local, state,
federal or foreign taxes, duties, or levies in respect of the Collateral and/or
the applicable Documentary Letter of Credit. 
Any embargo, restriction, laws, customs or regulations of any country,
state, city or other political subdivision where the Collateral is or may be
located or wherein payments are to be made or wherein drafts may be drawn,
negotiated, accepted, or paid shall be solely at Borrower’s risk, liability and
responsibility.

(i)            Each Revolving Lender
shall, to the extent of its Pro Rata Share of the aggregate amount of all
disbursements made with respect to the Letters of Credit, be deemed to have
irrevocably purchased an undivided participation in each L/C Disbursement and
each Advance made as a consequence of such disbursement.  If at the time a L/C Disbursement is made the
unpaid balance of Advances exceeds or would exceed, with the making of such L/C
Disbursement, the Facility Cap and if such L/C Disbursement is not reimbursed
by Borrower within one (1) Business Day, then Agent shall promptly notify each
Revolving Lender, and upon Agent’s demand each Revolving Lender shall pay to
Agent such Revolving Lender’s Pro Rata Share of such unreimbursed disbursement
together with such Revolving Lender’s Pro Rata Share of Agent’s unreimbursed
costs and expenses relating to such unreimbursed disbursement.  Upon receipt by Agent of a repayment from
Borrower of any amount disbursed by Agent for which Agent had already been
reimbursed by the Revolving Lenders, Agent shall deliver to each of the Revolving
Lenders that Revolving Lender’s Pro Rata Share of such repayment.  Each Revolving Lender’s participation
commitment shall continue until the last to occur of any of the following
events: (i) L/C Issuer ceases to be obligated to issue or to cause the issuance
of Letters of Credit hereunder; (ii) no Letter of Credit remains outstanding
and uncancelled; or (iii) all Persons (other than Borrower) have been fully
reimbursed for all payments made under or relating to all Letters of Credit.

(j)            The obligations of a
Revolving Lender to make payments to Agent for the account of Agent or the L/C
Issuer with respect to a Letter of Credit shall be irrevocable, without any
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:

(i)            any
lack of validity or enforceability of this Agreement or any of the Loan
Documents;

(ii)           the
existence of any claim, setoff, defense or other right that Borrower may have
at any time against a beneficiary named in such Letter of Credit or any
transferee of such Letter of Credit (or any Person for which any such
transferee may be acting), Agent, L/C Issuer, any Revolving Lender, or any
other person, whether in
connection with this Agreement, such Letter of Credit, the transactions contemplated herein or any
related transactions (including any underlying transactions between Borrower or
any other party and the beneficiary named in such Letter of Credit);

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

 4
 

 

(iv)          the
surrender or impairment of any security for the performance or observance of
any of the terms of this Agreement or any of the Loan Documents;

(v)           any
failure by Agent or the L/C Issuer to provide any notices required pursuant to
this Agreement relating to such Letter of Credit;

(vi)          any
payment by the L/C Issuer under any of the Letters of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit (if, in the good faith opinion of the L/C Issuer, such
prepayment is deemed to be appropriate); or

(vii)         the
occurrence and continuation of any Default or Event of Default;

provided, however, that after
paying in full its reimbursement obligation hereunder, nothing herein shall
adversely affect the right of Borrower or any Revolving Lender, as the case may
be, to commence any proceeding against such L/C Issuer for any wrongful
disbursement made by such L/C Issuer under a Letter of Credit as a result or
solely to the extent of acts or omissions constituting gross negligence or
willful misconduct on the part of such L/C Issuer;

(k)           If by reason of (i) any
change in any applicable law, treaty, rule, or regulation or any change in the
interpretation or application thereof by any Governmental Authority, or (ii) compliance
by any Underlying Issuer or Revolving Lender with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):

(1)           any
reserve, deposit, or similar requirement is or shall be imposed or modified in
respect of any Letter of Credit issued hereunder, or

(2)           there
shall be imposed on any Underlying Issuer, Revolving Lender or Agent any other
condition regarding any Letter of Credit issued pursuant hereto;

and the result of the foregoing is to increase,
directly or indirectly, the cost to any Underlying Issuer, Revolving Lender or
Agent of issuing, making, guaranteeing, or maintaining any Letter of Credit or
to reduce the amount receivable in respect thereof by any Underlying Issuer,
Revolving Lender or Agent, then, and in any such case, Agent may, at any time
within a reasonable period after the additional cost is incurred or the amount
received is reduced, notify Borrower, and Borrower shall pay on demand such
amounts as Agent may specify to be necessary to compensate Agent and Revolving
Lenders for such additional cost or reduced receipt, together with interest on
such amount from the date of such demand until payment in full thereof at the
Applicable Rate for Advances.  The
determination by Agent of any amount due pursuant to this Section 2.23, as set
forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto.

 5
 

 

(l)            Borrower acknowledges
and agrees that certain of the Documentary Letters of Credit may provide for
the presentation of time drafts to the Underlying Issuer.  If an Underlying Issuer accepts such a time
draft that is presented under and in accordance with an Underlying Letter of
Credit, it is acknowledged and agreed that (i) the Documentary Letter of Credit
will require the L/C Issuer to reimburse the Underlying Issuer for amounts paid
on account of such time draft on or after the maturity date thereof, (ii) the
pricing provisions hereof (including Section 3.7(a)) shall continue to
apply, until payment of such time draft on or after the maturity date thereof,
as if the Underlying Letter of Credit were still outstanding, and (iii) on the
date on which L/C Issuer makes payment to the Underlying Issuer of the amounts
paid on account of such time draft, Borrower immediately shall reimburse such
amount to L/C Issuer and such amount shall constitute an L/C Disbursement
hereunder.

(m)          If any
portion of the Letter of Credit Usage, whether or not then due and payable,
remains unpaid or outstanding on the Revolving Loan Maturity Date or such
earlier date as this Agreement may be terminated pursuant to Section 11.1,
Borrower shall:  (A) provide cash
collateral therefor in the manner described in Section 3.7(b); or (B) cause all
such Letters of Credit and guaranties thereof, if any, to be canceled and
returned; or (C) deliver a stand-by letter (or letters) of credit in guarantee
of such portion of the Letter of Credit Usage, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty (30) additional
days) as, and in an amount equal to at least 105% of the aggregate maximum
amount then available to be drawn under, such Letters of Credit to which such
outstanding Letter of Credit Usage relate and shall be issued by a Person, and
shall be subject to such terms and conditions, as are satisfactory to Agent in
its Permitted Discretion.

 6

 

SCHEDULE A

Lenders/Commitments

	
  Revolving
  Lenders

  	
   

  	
  Revolving Commitment

  
	
   

  	
   

  	
   

  
	
  CapitalSource Finance LLC

  	
   

  	
  $

  	
  2,000,000

  
	
  4445 Willard Avenue, 12th Floor

  	
   

  	
   

  
	
  Chevy Chase, Maryland 20815

  	
   

  	
   

  
	
  Attention:

  	
  Corporate Finance Group, Portfolio Manager

  	
   

  	
   

  
	
  Telephone:

  	
  (301) 841-2700

  	
   

  	
   

  
	
  Fax:

  	
  (301) 841-2313

  	
   

  	
   

  
	
  E-mail:

  	
  dzimmerman@capitalsource.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wire Instructions:

  	
   

  	
   

  
	
  Bank:

  	
  Bank of America

  	
   

  	
   

  
	
  Account:

  	
  003939396662

  	
   

  	
   

  
	
  ABA:

  	
  026009593

  	
   

  	
   

  
	
  Account Name:

  	
  CapitalSource Funding LLC – CFG

  	
   

  	
   

  
	
  Reference:

  	
  A.D.A.M., Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  2,000,000

  
						

 

	
  Term A
  Lenders

  	
   

  	
  Term Loan A
  Commitment

  
	
   

  	
   

  	
   

  
	
  CapitalSource Finance LLC

  	
   

  	
  $

  	
  20,000,000

  
	
  4445 Willard Avenue, 12th Floor

  	
   

  	
   

  
	
  Chevy Chase, Maryland 20815

  	
   

  	
   

  
	
  Attention:

  	
  Corporate Finance Group, Portfolio Manager

  	
   

  	
   

  
	
  Telephone:

  	
  (301) 841-2700

  	
   

  	
   

  
	
  Fax:

  	
  (301) 841-2313

  	
   

  	
   

  
	
  E-mail:

  	
  dzimmerman@capitalsource.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wire Instructions:

  	
   

  	
   

  
	
  Bank:

  	
  Bank of America

  	
   

  	
   

  
	
  Account:

  	
  003939396662

  	
   

  	
   

  
	
  ABA:

  	
  026009593

  	
   

  	
   

  
	
  Account Name:

  	
  CapitalSource Funding LLC – CFG

  	
   

  	
   

  
	
  Reference:

  	
  A.D.A.M., Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  20,000,000

  
						

 

 

 

	
  Convertible
  Term Lenders

  	
   

  	
  Convertible
  Term Loan

  
	
   

  	
   

  	
   

  
	
  CapitalSource Finance LLC

  	
   

  	
  $

  	
  5,000,000

  
	
  4445 Willard Avenue, 12th Floor

  	
   

  	
   

  
	
  Chevy Chase, Maryland 20815

  	
   

  	
   

  
	
  Attention:

  	
  Corporate Finance Group, Portfolio Manager

  	
   

  	
   

  
	
  Telephone:

  	
  (301) 841-2700

  	
   

  	
   

  
	
  Fax:

  	
  (301) 841-2313

  	
   

  	
   

  
	
  E-mail:

  	
  dzimmerman@capitalsource.com

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Wire Instructions:

  	
   

  	
   

  
	
  Bank:

  	
  Bank of America

  	
   

  	
   

  
	
  Account:

  	
  003939396662

  	
   

  	
   

  
	
  ABA:

  	
  026009593

  	
   

  	
   

  
	
  Account Name:

  	
  CapitalSource Funding LLC – CFG

  	
   

  	
   

  
	
  Reference:

  	
  A.D.A.M., Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  5,000,000

  
	
   

  	
   

  	
   

  
	
  Total Commitments:

  	
   

  	
  $

  	
  27,000,000Exhibit 10.2

CONVERSION
AND REGISTRATION RIGHTS AGREEMENT

CONVERSION
AND REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 14, 2006,
by and between A.D.A.M., Inc., a Georgia corporation (the “Company”), and CapitalSource Finance LLC, a
Delaware limited liability company and its successors and assigns (each a “Purchaser”).

PRELIMINARY STATEMENT

A.            In connection with the Credit Agreement of even date
herewith by and among the Company, the Purchaser and certain other parties
(such Credit Agreement, as the same may be amended, modified, supplemented or
restated from time to time, hereinafter is referred to as the “Credit Agreement”), the Company has agreed,
upon the terms and subject to the conditions of the Credit Agreement and this
Agreement, to grant the Purchaser the right to convert all or any portion of
the Convertible Term Loan into shares of the Company’s  common stock, par value $0.01 per share (the “Common Stock”), on the terms set forth in
this Agreement.

B.            To induce the Purchaser to execute and deliver the Credit
Agreement, the Company has agreed to provide certain registration rights under
the Securities Act of 1933, as amended, and the rules and regulations
thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state
securities laws.

NOW,
THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Investors hereby agree as follows:

1.             DEFINITIONS.

As
used in this Agreement, the following terms shall have the following meanings:

(a)           “Closing
Price” with respect to a share of Common Stock on any day shall mean
the closing sale price regular way on such day or, in case no such sale takes
place on such day, the average of the reported closing bid and asked prices,
regular way, in each case on the Principal Market, or, if not quoted or listed
or admitted to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of the Common Stock on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service.

(b)           “Common
Shares” means the shares of Common Stock issued or issuable pursuant
to the terms of this Agreement.

(c)           “Conversion
Price” means $6.37 per share of Common Stock, as such amount may be
adjusted from time to time pursuant to Section 2(c) below.

(d)           “Convertible
Term Loan” means the “Convertible Term Loan”, as defined in the
Credit Agreement.

 

(e)           “Delay
Payment Rate” means (i) during the first three weeks of a Damages
Accrual Period, an amount per week (or portion thereof) per share of Common
Stock equal to 0.5% of the higher of the Conversion Price or the Market Price
of such share, (ii) during the next three weeks of a Damages Accrual Period, an
amount per week (or portion thereof) per share of Common Stock equal to 1% of
the higher of the Conversion Price or the Market Price of such share, and (iii)
during the remainder of a Damages Accrual Period, an amount per week (or
portion thereof) per share of Common Stock equal to 2% of the higher of the
Conversion Price or the Market Price of such share.

(f)            “Delivery
Delay Payment Rate” means an amount per day (or portion thereof) per
share of Common Stock equal to 0.5% of the higher of the Conversion Price or
the Market Price of such share.

(g)           “Fundamental
Transaction” means any of (i) any reclassification or change of the
outstanding shares of Common Stock (other than a subdivision or combination,
including a reverse stock split), (ii) any consolidation, merger or combination
of the Company with another Person as a result of which holders of Common Stock
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, (iii)
any statutory exchange, as a result of which holders of Common Stock generally
shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iv)
any sale or conveyance of all or substantially all of the assets of the
Company.  Notwithstanding the foregoing, a
transaction will not be deemed to constitute a Fundamental Transaction if its
sole purpose is to change the state of incorporation of the Company or to
create a holding company that will be owned in the same proportions by the
persons or entities that held the Company’s securities immediately prior to
such transactions.

(h)           “Investor”
means (i) a Purchaser, (ii) any other holder of any portion of the Convertible
Term Loan, and (iii) any transferee or assignee of a Purchaser or such other
holder to whom a Purchaser or holder assigns its rights under this Agreement
and who agrees to become bound by the provisions of this Agreement in
accordance with Section 10.

(i)            “Market
Price” means, with respect to a share of Common Stock on a
particular day, the average of the Closing Prices for Common Stock over the
thirty (30) day period ending one (1) Trading Day prior to the date of
determination.

(j)            “Person”
means a corporation, a limited liability company, an association, a
partnership, an organization, a business, an individual, a governmental or
political subdivision thereof or a governmental agency.

(k)           “Principal
Market” means the NASDAQ Capital Market or if the Common Stock is
not traded on such market, then the principal securities exchange or trading
market for the Common Stock.

(l)            “Register,”
“registered,” and “registration” refer to a registration
effected by preparing and filing one or more Registration Statements (as
defined below) in compliance with the Securities Act and pursuant to Rule 415
under the Securities Act or any successor rule providing for offering
securities on a continuous or delayed basis (“Rule
415”), and the 

 2
 

 

declaration or ordering of effectiveness of such
Registration Statement(s) by the United States Securities and Exchange Commission
(the “SEC”).

(m)          “Registrable
Securities” means (i) the Common Shares, (ii) any shares of capital
stock issued or issuable with respect to the Common Shares as a result of any
stock split, stock dividend, recapitalization, exchange or similar event or otherwise,
without regard to any limitations on the issuance of the Common Shares and
(iii) any securities of the Company issued upon the reclassification of any of
the foregoing.

(n)           “Registration
Delay” means the occurrence of any of (i) a Registration Statement
in connection with a Demand Registration covering all of the Registrable
Securities required to be covered thereby is not filed with the SEC on or
before the deadline described in the last sentence of Section 3(a) or is not
declared effective by the SEC on or before the deadline described in the last
sentence of Section 3(a), (ii) on any day during the Registration Period (other
than during an Allowable Grace Period, as defined in Section 4(r)), any
Registrable Security required to be included in such Registration Statement
cannot be sold pursuant to such Registration Statement as a matter of law or
because the Company has failed to perform its obligations under this Agreement
within the applicable time period required for such performance (including,
without limitation, because of a failure to keep such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement or to register a sufficient number of
shares of Common Stock), or (iii) a Grace Period (as defined in Section 4(r))
exceeds the length of an Allowable Grace Period.

(o)           “Registration
Statement” means a registration statement or registration statements
of the Company filed under the Securities Act covering the Registrable
Securities.

(p)           “Share
Delivery Delay” means the failure of the Company to issue and
deliver any shares to be issued pursuant to Section 2 in the manner and within
the timeframe set forth in Section 2(b).

(q)           “Trading
Day” means (x) a day on which the Principal Market is open for
business or (y) if the applicable security is not so listed on a Principal
Market or admitted for trading or quotation, any day that is not (i) a Saturday
or a Sunday, or (ii) a day on which banking institutions in the State of
Maryland are authorized or obligated by law or regulation to close.

2.             CONVERSION

(a)           An Investor may at any time, and from
time to time, convert all or any portion of the then-outstanding principal
balance of the Convertible Term Loan held by such Investor into that number of
shares of fully paid and nonassessable shares of Common Stock equal to the
amount of the principal being converted divided by the Conversion Price.  An Investor may exercise its conversion right,
in whole or in part, any number of times while the Convertible Term Loan
remains outstanding.

(b)           In order to effect a conversion
pursuant to Section 2(a), an Investor shall deliver a written notice of its
intention to convert all or any portion of the principal amount of the
Convertible Term Loan (a “Notice of
Conversion”) to the Company. 
The Company shall, as 

 3
 

 

soon as practicable but in no event later than five
(5) Trading Days after the delivery of the Notice of Conversion, (i) issue and
deliver the number of shares of Common Stock to which the Investor shall be
entitled by, at the option of the Investor, either (A) if the Company is able
to do so, crediting such number of shares to the Investor’s or its designee’s
balance account with The Depository Trust Company through its Deposit Withdrawal
Agent Commission system, or (B) issuing and delivering to the address specified
in the Notice of Conversion, a certificate or certificates in such
denominations as may be requested in the Notice of Conversion, registered in
the name of the Investor or its designee, and (ii) if requested by the
Investor, issue and deliver a promissory note in the form specified in the
Credit Agreement in the amount of any unconverted portion of the Convertible
Term Loan held by such Investor.  The
conversion will be deemed to have been made on the date the Notice of
Conversion is delivered to the Company. 
The Investor will be treated for all purposes as the record holder or
holders of the Common Shares on the date of such delivery of the Notice of
Conversion.  The Company will pay any and
all taxes (other than taxes based upon income) and other governmental charges
that may be imposed with respect to the issuance and delivery of the Common
Shares on any conversion hereunder.  No
fractional shares of Common Stock are to be issued on any conversion hereunder,
but the Company will instead round down to the next whole number the number of
shares of Common Stock to be issued on the conversion.

(c)           If at any time or from time to time
after the date hereof:

(i)            the Company effects a subdivision of
the outstanding Common Stock, the Conversion Price in effect immediately before
that subdivision shall be proportionately decreased.  Conversely, if at any time or from time to
time after the date hereof the Company combines the outstanding shares of
Common Stock into a smaller number of shares, the Conversion Price in effect
immediately before the combination shall be proportionately increased.  Any adjustment under this Section 2(c)(i)
shall become effective at the close of business on the date the subdivision or
combination becomes effective;

(ii)           the Company pays a dividend or other
distribution in additional shares of Common Stock, the Conversion Price that is
then in effect shall be decreased by multiplying such Conversion Price then in
effect by a fraction, (A) the numerator of which is the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance, and (B) the denominator of which is the total number of shares of
Common Stock issued and outstanding immediately prior to the time of such
issuance plus the number of shares of Common Stock issuable in payment of such
dividend or distribution.  If the Company
fixes a record date to determine which holders of Common Stock are entitled to
receive such dividend or other distribution, the Conversion Price shall be
fixed as of the close of business on such record date and the number of shares
of Common Stock shall be calculated immediately prior to the close of business
on such record date;

(iii)          the Common Stock is changed into the
same or a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this 

 4
 

 

Section 2(c)), in any
such event the Investors shall then have the right to convert the Convertible
Term Loan into the kind and amount of stock and other securities and property
receivable upon such recapitalization, reclassification or other change by
holders of the maximum number of shares of Common Stock into which such
Convertible Term Loan could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or property by the
terms thereof; and

(iv)          there is a capital reorganization of
the Common Stock or the merger or consolidation of the Company with or into
another corporation or another entity or person (other than a recapitalization,
subdivision, combination, reclassification, exchange or substitution of shares
provided for elsewhere in this Section 2(c)), as a part of such capital
reorganization, provision shall be made so that the Investors shall thereafter
be entitled to receive upon conversion of the Convertible Term Loan the number
of shares of stock or other securities or property of the Company to which a
holder of the number of shares of Common Stock deliverable upon conversion
would have been entitled on such capital reorganization, subject to adjustment
in respect of such stock or securities by the terms thereof.  In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 2 with
respect to the rights of the Investor after the capital reorganization to the
end that the provisions of this Section 2 (including adjustment of the
applicable Conversion Price then in effect and the number of shares issuable
upon conversion) shall be applicable after that event and be as nearly
equivalent as practicable.

(d)           In each case of an adjustment or
readjustment of the Conversion Price or other terms under Section 2(c), the
Company, at its expense, shall compute such adjustment or readjustment in
accordance with the provisions thereof and promptly prepare a certificate
showing such adjustment or readjustment, and shall deliver such notice to each
Investor.  The certificate shall set
forth such adjustment or readjustment, showing in reasonable detail the facts
upon which such adjustment or readjustment is based, including a statement of
(i) the Conversion Price at the time in effect, and (ii) the type and amount,
if any, of other property which at the time would be received upon conversion
of the Convertible Term Loan.

(e)           Prior to the exercise of the
conversion right hereunder, the Investor will not be entitled to vote or be
deemed the holder of any of the capital stock of the Company issuable upon such
conversion, nor will anything contained herein be construed to confer on the
Investor the rights of a stockholder of the Company or the right to vote for
the election of directors or on any matter submitted to stockholders at any
meeting thereof, or give or withhold consent to any corporate action or to
receive notice of meetings or other actions affecting stockholders, or to
receive dividends or subscription rights or otherwise, by virtue of having the
conversion rights hereunder.

(f)            The Company shall not, by amendment
of its Articles of Incorporation, by-laws, or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue, or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in the carrying out of all
the provisions of this Section 2 and in the taking of 

 5
 

 

all the action as may be reasonably necessary or
appropriate in order to protect the rights of the Investors to convert the
Convertible Term Loan hereunder.

(g)           Upon (i) any taking by the Company of
a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, or (ii) any Fundamental Transaction or other capital
reorganization of the Company, any reclassification or recapitalization of the
capital stock of the Company, or any voluntary or involuntary dissolution, liquidation
or winding up of the Company, subject to the requirements of applicable law,
including, but not limited to, Regulation FD, the Company shall deliver to each
Investor at least ten (10) days prior to the record date or transaction
specified therein a notice specifying (A) the date on which any such record is
to be taken for the purpose of such dividend or distribution and a description
of such dividend or distribution, (B) the date on which any such Fundamental
Transaction, reorganization, reclassification, recapitalization, dissolution,
liquidation or winding up is expected to become effective, and (C) the date, if
any, that is to be fixed as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock
(or other securities) for securities or other property deliverable upon such
Fundamental Transaction, reorganization, reclassification, recapitalization,
dissolution, liquidation or winding up.

(h)           The Company shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of the Convertible
Term Loan, such number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of the entire Convertible Term
Loan.  If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of the entire Convertible Term Loan, the Company will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purpose.

(i)            The Company hereby represents to
each Investor that, and shall at all times ensure that, all Common Shares
issued pursuant to this Agreement will, upon issuance, be validly issued, fully
paid and non-assessable and free from all taxes, liens and charges with respect
to the issuance thereof, and shall not be subject to preemptive rights or other
similar rights of stockholders of the Company.

(j)            If a Share Delivery Delay occurs,
the Company shall pay to the applicable Investor (the “Delivery Delay Payments”), as liquidated
damages and not as a penalty, and calculated for each share of Common Stock to
which the Share Delivery Delay relates, an accruing amount per each such share
equal to the Delivery Delay Payment Rate for each day (or portion thereof)
during the Delivery Damages Accrual Period, plus any actual losses incurred by
such Investor resulting from such Share Delivery Delay (including those
incurred with respect to any “short” positions required to be covered). The
Delivery Delay Payments shall accrue from the first day of the applicable Share
Delivery Delay through the date it is cured (the “Delivery Damages Accrual Period”), and shall be payable in
cash to the applicable Investor on the last business day of each calendar
week.  The parties hereto agree that the
liquidated damages provided for in this Section 2(i) constitute a reasonable
estimate of the damages that may be incurred by an Investor by reason of Share
Delivery Delay.

 6
 

 

3.             REGISTRATION.

(a)           Demand Registrations.  The Company shall use its best efforts to
qualify and maintain its qualification for registration of resales on Form S-3
or any comparable or successor form or forms, including taking such action as
is necessary to enable the Investors to utilize Form S-3 for the resale of
Registrable Securities.  At any time the
Company is qualified for the use of Form S-3, the Investors shall have the
right to request registrations on Form S-3 (a “Demand
Registration”), with such requests to be in writing (a “Demand Notice”) and shall state the number
of shares of Registrable Securities to be disposed of and the intended plan of
disposition of such shares by such Investors; provided, however, that the
Company shall not be obligated to effect any such Demand Registration (i) if
the Investors, together with the holders of any other securities of the Company
entitled to inclusion in such Demand Registration, propose to sell Registrable
Securities and such other securities (if any) on Form S-3 at an aggregate price
to the public of less than $1,000,000, 
or (ii) if, in the preceding twelve-month period, the Company has
effected two (2) such Demand Registrations under this Section 3(a) in such
period.  A Demand Registration shall be
an underwritten registration only with the Company’s prior written consent,
which consent shall not be unreasonably withheld or delayed.  If a request complying with the requirements
of this Section 3(a) is delivered to the Company:

(i)            the Company shall (A) promptly give
written notice of the proposed registration to all other Investors, (B) within
forty-five (45) days after receipt of the Demand Notice (the “Filing Deadline”), file with the SEC a
Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Investors joining in such
request as are specified in a written request received by the Company within
fifteen (15) days after the written notice from the Company referenced above is
mailed or delivered, and (C) cause such Registration Statement to be declared
effective by the SEC as soon as possible, but in no event later than the
earlier of (1) the tenth business day after the SEC advises the Company that
either (x) it will not review such Registration Statement or (y) it has no
further comments with respect to such Registration Statement, and (2) one
hundred thirty five (135) days after the Demand Notice (the earlier of such
dates, the “Effectiveness Deadline”);
and

(ii)           if the registration is for an
underwritten offering:

(1)           the right of any Investor to
participate in an underwritten registration shall be conditioned upon such
Investor’s participation in such underwriting and the inclusion of such
Investor’s Registrable Securities in the underwriting (unless otherwise
mutually agreed by a majority in interest of the Investors and such Investor
with respect to such participation and inclusion) to the extent provided in
this Agreement.  An Investor may elect to
include in such underwriting all or a part of the Registrable Securities such
Investor holds (subject to the other provisions of this Agreement); and

(2)           if the Company shall request
inclusion in any registration pursuant to Section 3(a) of securities being sold
for its own account (or for the account of other persons (other than Investors)
having piggyback registration rights) in any registration pursuant to Section
3(a), the Investors may offer to include such securities in the underwriting
and may 

 7
 

 

condition such offer on
their acceptance of the further applicable provisions of this Agreement.  The Company shall (together with all
Investors and other persons proposing to distribute their securities through
such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected for such underwriting
by a majority in interest of the Investors participating (subject to the
approval of the Company, which approval shall not be unreasonably withheld or
delayed).  Notwithstanding any other
Investors that marketing factors require a limitation on the number of shares
to be underwritten, the number of shares to be included in the underwriting or
registration shall be allocated (A) first, pro rata among the participating
Investors in accordance with their respective ownership of Registrable
Securities, and (B) second, if additional shares may still be included, among
the Company and such other persons in such manner as the Company and such
persons shall agree. If a person who has requested inclusion in such
registration as provided above does not agree to the terms of any such
underwriting, such person shall be excluded therefrom by written notice from
the Company, the underwriter(s) or the Investors.  Any Registrable Securities or other
securities excluded or withdrawn from such underwriting shall also be withdrawn
from such registration.  If shares are so
withdrawn from the registration and if the number of shares to be included in
such registration was previously reduced as a result of marketing factors
pursuant to this Section 3(a), then the Company shall offer to all holders who
have retained rights to include securities in the registration the right to
include additional securities in the registration in an aggregate amount equal
to the number of shares so withdrawn, with such shares to be allocated among
such persons requesting additional inclusion in accordance with the priority
set forth above.

If at the time of any
request for a Demand Registration pursuant to this Section 3, (a) a
registration of the Company’s securities under the Securities Act has become
effective within the past ninety (90) days or (b) (i) the Company’s Board of
Directors determines in good faith that such Demand Registration would
reasonably be expected to have a material adverse effect on the Company, as a
whole, or any proposal or plan by the Company or any of its subsidiaries to
engage in any acquisition of assets (other than in the ordinary course of
business) or any merger, consolidation, tender offer, reorganization or similar
transaction and (ii) the Company furnishes to such holders of Registrable
Securities a certificate signed by the President of the Company stating that,
in the good faith judgment of the Company’s Board of Directors, it would have
such a material adverse affect, then the Company may direct that such request
be delayed for a period not in excess of sixty (60) days from the earlier of
the effective date of such offering, the date of commencement of such other
material activity or the date of the request by the Investors requesting such
Demand Registration, as the case may be; provided, that such right to delay a
request pursuant to this paragraph to be exercised by the Company not more than
once in any three hundred sixty-five (365) day period.

(b)           Piggy-Back Registrations.  If the Company proposes to file with the SEC
a Registration Statement relating to an offering for its own account or the
account of others under the Securities Act of any of its shares of Common  Stock (other than on Form S-4 or Form S-8 (or
their equivalents at such time) relating to securities to be issued solely in
connection with any acquisition of any entity or business or to equity
securities issuable in connection with stock option or other employee benefit
plans approved by the board of directors of the Company) the Company shall
promptly send to each Investor written notice of the Company’s intention to
file a Registration Statement and of such Investor’s rights under this Section
3(b) and, if within fifteen 

 8
 

 

(15) days after receipt of such notice, such Investor
shall so request in writing, the Company shall include in such Registration
Statement all or any part of the Registrable Securities such Investor requests
to be registered, subject to the priorities set forth in this Section 3(b)
below.  No right to registration of
Registrable Securities under this Section 3(b) shall be construed to limit any
registration required under Section 3(a). 
The obligations of the Company under this Section 3(b) may be waived by
Investors holding a majority of the Registrable Securities.  If an offering in connection with which an
Investor is entitled to registration under this Section 3(b) is an underwritten
offering, then each Investor whose Registrable Securities are included in such
Registration Statement shall, unless otherwise agreed by the Company, offer and
sell such Registrable Securities in an underwritten offering using the same
underwriter or underwriters and, subject to the provisions of this Agreement,
on the same terms and conditions as other shares of Common Stock included in
such underwritten offering.  If a
registration pursuant to this Section 3(b) is to be an underwritten public
offering and the managing underwriter(s) advise the Company in writing, that in
their reasonable good faith opinion, marketing or other factors dictate that a
limitation on the number of shares of Common Stock which may be included in the
Registration Statement is necessary to facilitate and not adversely affect the
proposed offering, then the Company shall include in such registration: (1)
first, all securities the Company proposes to sell for its own account and (2)
second, up to the full number of securities proposed to be registered for the
account of the Investors entitled to registration under this Section 3(b), pro
rata among such Investors on the basis of the number of Registrable Securities
that each of them requested to be included in such registration.  The Company shall have the right to postpone
or withdraw any registration effected pursuant to this Section 3(b) without
obligation to any holder of Registrable Shares.

(c)           Allocation of Registrable
Securities.  The initial number of
Registrable Securities included in any Registration Statement and each increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC.  In the event that an Investor
sells or otherwise transfers any of such Investor’s Registrable Securities,
each transferee shall be allocated a pro rata portion of the then remaining
number of Registrable Securities included in such Registration Statement for
such transferor.  Any shares of Common
Stock included in a Registration Statement and which remain allocated to any
Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata
based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement.

(d)           Legal Counsel.  Subject to Section 6 of this Agreement, the
Investors holding at least a majority of the Registrable Securities shall have
the right to select one legal counsel to review and comment upon any
registration pursuant to this Agreement (“Legal
Counsel”), which shall be such counsel as is designated by the
holders of a majority of Registrable Securities and of which the Company and
its counsel have been given prior notice. The Legal Counsel shall not represent
any Investor that sends such counsel written notice that such Investor does not
wish such counsel to represent it in connection with the matters discussed in
this Section 3(d).  The Investors, other
than any Investor that delivers the notice discussed in the preceding sentence,
hereby waive any conflict of interest or potential conflict of interest that
may arise as a result of the representation of such Investors by the Legal
Counsel in connection with 

 9
 

 

the subject matter of this Agreement.  These provisions will not prohibit any other
counsel to an Investor from reviewing and commenting on any registration filed
pursuant to this Agreement at no cost to the Company.  The Company shall reasonably cooperate with
Legal Counsel in performing the Company’s obligations under this Agreement.

(e)           Ineligibility for Form S-3.  In the event that Form S-3 is not available
for any registration of Registrable Securities hereunder, the Company shall (i)
register the sale of the Registrable Securities on another appropriate form
reasonably acceptable to the holders of a majority of the Registrable
Securities and (ii) undertake to register subsequently the Registrable
Securities on Form S-3 as soon as such form is available, provided that the
Company shall maintain the effectiveness of the prior Registration Statement
then in effect until such time as a Registration Statement on Form S-3 covering
the Registrable Securities has been declared effective by the SEC.

(f)            Failure to File, Obtain and
Maintain Effectiveness of Registration Statement.  If a Registration Delay occurs the Company
shall pay to each holder of Registrable Securities (the “Registration Delay Payments”), as
liquidated damages and not as a penalty, and calculated for each share of
Common Stock required to be covered for resale at such time pursuant to the
terms of Section 3(a) then outstanding that is a Registrable Security and not
covered for resale at such time pursuant to the terms of a Registration
Statement, an accruing amount per each such share equal to the Delay Payment
Rate for each week (or portion thereof) during the Damages Accrual Period;
provided that such Registration Delay Payments shall be paid only to the Investors
that have complied with their obligations under Section 5 of this Agreement
with respect thereto. The Registration Delay Payments shall accrue from the
first day of the applicable Registration Delay through the date it is cured
(the “Damages Accrual Period”),
and shall be payable in cash to the record holders of the Registrable
Securities entitled thereto on the last business day of each calendar
month.  The parties hereto agree that the
liquidated damages provided for in this Section 3(f) constitute a reasonable
estimate of the damages that may be incurred by holders of Registrable
Securities by reason of the failure of the Registration Statement to be filed
or declared effective or available for effecting resales of Registrable
Securities in accordance with the provisions hereof.

4.             RELATED OBLIGATIONS.

At such time as the
Company is obligated to file a Registration Statement with the SEC pursuant to
Section 3(a), the Company will use its commercially reasonable best efforts to
effect the registration of the Registrable Securities in accordance with the
intended plan of distribution thereof and, pursuant thereto, the Company shall
have the following obligations:

(a)           The Company shall promptly prepare
and file with the SEC a Registration Statement with respect to the Registrable
Securities (but in no event later than the Filing Deadline) and use its
commercially reasonable best efforts to cause such Registration Statement
relating to the Registrable Securities to become effective as soon as
practicable after such filing (but in no event later than the applicable
Effectiveness Deadline).  The Company
shall keep each Registration Statement effective pursuant to Rule 415 at all
times until the earlier of (i) the date as of which all of the Investors may
sell all of the Registrable Securities covered by such Registration Statement
without restriction pursuant to Rule 144(k) promulgated under the 

 10
 

 

Securities Act (or successor thereto), (ii) the date
on which the Investors shall have sold all the Registrable Securities covered
by such Registration Statement either pursuant to the Registration Statement or
in one or more transactions in which the acquirer obtained unlegended
certificates representing the Registrable Securities so purchased, or (iii) the
third anniversary of the effectiveness of such Registration Statement (the “Registration Period”), which Registration
Statement (including any amendments or supplements thereto and prospectuses
contained therein) shall not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein, or necessary to
make the statements therein (in the case of any prospectus only, in light of
the circumstances under which they were made) not misleading.

(b)           The Company shall prepare and file
with the SEC such amendments (including post-effective amendments) and
supplements to a Registration Statement and the prospectus used in connection
with such Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the Securities Act, as may be necessary to keep such
Registration Statement effective at all times during the Registration Period,
and, during such period, comply with the provisions of the Securities Act with
respect to the disposition of all Registrable Securities of the Company covered
by such Registration Statement until such time as all of such Registrable
Securities shall have been disposed of in accordance with the intended plan of
distribution by the seller or sellers thereof as set forth in such Registration
Statement.  In the case of amendments and
supplements to a Registration Statement which are required to be filed pursuant
to this Agreement (including pursuant to this Section 4(b)) by reason of the
Company filing a report on Form 10-K, Form 10-Q or Form 8-K or any analogous
report under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Company shall have
incorporated such report by reference into the Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the Exchange Act report is filed which created the
requirement for the Company to amend or supplement the Registration Statement.

(c)           The Company shall (a) permit Legal
Counsel and any legal counsel for a particular Investor to review and comment
upon those sections of (i) the Registration Statement which are applicable to
the Investors at least five (5) business days prior to its filing with the SEC
and (ii) all other Registration Statements and all amendments and supplements
to all Registration Statements which are applicable to the Investors (except
for Proxy Statements, Annual Reports on Form 10-K, Quarterly Reports on Form
10-Q and Current Reports on Form 8-K and any similar or successor reports) within
a reasonable number of days prior to the their filing with the SEC and (b) not
file any document in a form to which Legal Counsel or such legal counsel
reasonably objects.  The Company shall
furnish to Legal Counsel, without charge, (i) any correspondence from the SEC
or the staff of the SEC to the Company or its representatives relating to any
Registration Statement, provided the Legal Counsel shall keep such
correspondence confidential and shall not provide copies thereof to any
Investor without the Investor’s express prior written consent, (ii) promptly
after the same is prepared and filed with the SEC, one copy of any Registration
Statement and any amendment(s) thereto, including financial statements and
schedules and all exhibits and (iii) upon the effectiveness of any Registration
Statement, one copy of the prospectus included in such Registration Statement
and all amendments and supplements thereto. 
The Company shall reasonably cooperate with Legal Counsel and such other
legal counsel in performing the Company’s obligations pursuant to this Section
4.

 

 11

 

 

(d)           The Company shall furnish to each
Investor whose Registrable Securities are included in any Registration
Statement, without charge, (i) promptly after the same is prepared and filed
with the SEC, at least one copy of such Registration Statement and any
amendment(s) thereto, including financial statements and schedules, and all
exhibits and each preliminary prospectus, (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the prospectus included in such
Registration Statement and all amendments and supplements thereto (or such
other number of copies as such Investor may reasonably request) and (iii) such
other documents, including copies of any preliminary or final prospectus, as
such Investor may reasonably request from time to time in order to facilitate
the disposition of the Registrable Securities owned by such Investor.  The Company shall comply with the
requirements of Rule 153 and 172 with respect to the filing of a final
prospectus with the SEC.

(e)           The Company shall use its
commercially reasonable best efforts to (i) register and qualify (if necessary)
the Registrable Securities covered by a Registration Statement under all other
securities or “blue sky” laws of such jurisdictions in the United States, (ii)
prepare and file in those jurisdictions, such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be reasonably necessary to maintain the effectiveness
thereof during the Registration Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the Registration Period, and (iv) take all other actions
reasonably necessary or advisable to qualify the Registrable Securities for
sale in such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (w) make any
change in the Company’s Articles of Incorporation or by-laws that the Company’s
board of directors determines in good faith to be contrary to the best
interests of the Company and its shareholders, 
(x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 4(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. 
The Company shall promptly notify Legal Counsel and each Investor who
holds Registrable Securities of the receipt by the Company of any notification
with respect to the suspension of the registration or qualification of any of
the Registrable Securities for sale under the securities or “blue sky” laws of
any jurisdiction in the United States or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.

(f)            As promptly as practicable after
becoming aware of such event or development, the Company shall notify Legal
Counsel and each Investor in writing of the happening of any event as a result
of which the prospectus included in a Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and promptly prepare a supplement or amendment to such Registration
Statement to correct such untrue statement or omission, and deliver ten (10)
copies of such supplement or amendment to Legal Counsel and each Investor (or
such other number of copies as Legal Counsel or such Investor may reasonably
request).  The Company shall also
promptly notify Legal Counsel and each Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to
Legal Counsel and each Investor by facsimile on the same day of such
effectiveness), (ii) of any request by the SEC for amendments or supplements to
a 

 12
 

 

Registration Statement or related prospectus or
related information, and (iii) of the Company’s reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

(g)           The Company shall use its
commercially reasonable best efforts to prevent the issuance of any stop order
or other suspension of effectiveness of a Registration Statement, or the
suspension of the qualification of any of the Registrable Securities for sale
in any jurisdiction and, if such an order or suspension is issued, to obtain
the withdrawal of such order or suspension at the earliest possible moment and
to notify Legal Counsel and each Investor who holds Registrable Securities
being sold of the issuance of such order and the resolution thereof or its
receipt of actual notice of the initiation or threat of any proceeding for such
purpose.

(h)           In the event of an underwritten
offering in accordance with and pursuant to the terms of this Agreement, at the
reasonable request of any Investor and at such Investor’s expense, the Company
shall use its commercially reasonable best efforts to furnish to such Investor,
on the date of the effectiveness of the Registration Statement and thereafter
from time to time on such dates as an Investor may reasonably request (i) a
letter, dated such date, from the 
Company’s independent certified public accountants in form and substance
as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering, and (ii) an opinion, dated as
of such date, of counsel representing the Company for purposes of such
Registration Statement, in form, scope and substance as is customarily given in
an underwritten public offering, addressed to the Investors.

(i)            The Company shall, upon reasonable
notice and during normal business hours, make available for inspection by (i)
any Investor, (ii) Legal Counsel and any other legal counsel representing an
Investor and (iii) one firm of accountants or other agents retained by the
Investors (collectively, the “Inspectors”)
all pertinent financial and other records, and pertinent corporate documents
and properties of the Company (collectively, the “Records”), which are requested for any purpose reasonably
related to the Investors’ rights and/or the Company’s obligations under this
Agreement, and cause the Company’s officers, directors and employees to supply
all information which any Inspector may reasonably request; provided, however,
that each Inspector which is not a party hereto shall agree in writing prior to
obtaining access to any Records, and each Investor hereby agrees, to hold in
strict confidence and shall not make any disclosure (except to an Investor
similarly bound by the terms hereof) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in any Registration
Statement or is otherwise required under the Securities Act, (b) the release of
such Records is ordered pursuant to a final, non-appealable subpoena or order
from a court or government body of competent jurisdiction, or (c) the
information in such Records has been made generally available to the public
other than by disclosure in violation of this or any other agreement of which
the Inspector has knowledge.  Neither the
Company nor any Inspector of a particular Investor shall provide any confidential
information to any other Investor unless such Investor is first informed of the
confidential nature of such information and given a reasonable opportunity to
determine whether to accept disclosure of such confidential information.  The Company shall not be required to disclose
any confidential information in such Records to any Inspector until and unless
such Inspector shall have entered into confidentiality agreements with the
Company with respect 

 13
 

 

thereto, substantially in the form of this Section 4(i).
Each Investor receiving the Records agrees that it shall, if permitted by
applicable law, upon learning that disclosure of such Records is sought in or
by a court or governmental body of competent jurisdiction or through other
means, give prompt notice to the Company prior to making any such disclosure
and allow the Company, at its expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, the Records deemed
confidential.  Each Investor undertaking
an inspection pursuant to this Section 4(i) shall, and shall instruct its other
Inspectors to, use commercially reasonable efforts to perform any such
inspection in a manner designed to not materially disrupt the business
activities of the Company.

(j)            The Company shall hold in confidence
and not make any disclosure of information concerning an Investor provided to
the Company unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such information
is necessary to avoid or correct a misstatement or omission in any Registration
Statement, (iii) the release of such information is ordered pursuant to a
subpoena or other final, non-appealable order from a court or governmental body
of competent jurisdiction, (iv) such information has been made generally
available to the public other than by disclosure in violation of this Agreement
or any other agreement or (v) such Investor consents to the form and content of
any such disclosure.  The Company agrees
that it shall, if permitted by applicable law, upon learning that disclosure of
such information concerning an Investor is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to such Investor prior to making any such disclosure and allow
such Investor, at the Investor’s expense, to undertake appropriate action to
prevent disclosure of, or to obtain a protective order for, such information.

(k)           The Company shall use its
commercially reasonable best efforts either to (i) cause all the Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange, or (ii) secure designation and
quotation of all the Registrable Securities covered by the Registration
Statement on The NASDAQ Capital Market. 
The Company shall pay all fees and expenses in connection with
satisfying its obligation under this Section 4(k).

(l)            The Company shall cooperate with the
Investors who hold Registrable Securities being offered and, to the extent
applicable, to facilitate the timely preparation and delivery of certificates
(not bearing any restrictive legend) representing the Registrable Securities to
be offered pursuant to a Registration Statement and enable such certificates to
be in such denominations or amounts, as the case may be, as the Investors may
reasonably request and registered in such names as the Investors may request.

(m)          The Company shall provide a transfer
agent and registrar of all such Registrable Securities not later than the
effective date of such Registration Statement.

(n)           If requested by an Investor, the
Company shall (i) as soon as practicable incorporate in a prospectus supplement
or post-effective amendment, as necessary, such information as an Investor
requests to be included therein relating to the Investor and the sale and distribution
of Registrable Securities, including, without limitation, information with
respect to 

 14
 

 

the number of Registrable Securities being offered or
sold, the purchase price being paid therefor and any other terms of the
offering of the Registrable Securities to be sold in such offering; and (ii) as
soon as practicable make all required filings of such prospectus supplement or
post-effective amendment after being notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment.

(o)           The Company shall use its
commercially reasonable best efforts to cause the Registrable Securities
covered by the applicable Registration Statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to consummate the disposition of such Registrable Securities within the United
States.

(p)           The Company shall otherwise use its
commercially reasonable best efforts to comply with all applicable rules and
regulations of the SEC in connection with any registration hereunder.

(q)           Within two (2) business days after a
Registration Statement which covers applicable Registrable Securities is
ordered effective by the SEC, the Company shall deliver, and shall cause legal
counsel for the Company to deliver, to the transfer agent for such Registrable
Securities (with copies to the Investors whose Registrable Securities are
included in such Registration Statement) confirmation that such Registration
Statement has been declared effective by the SEC.

(r)            Notwithstanding anything to the
contrary in this Section 4, at any time after the applicable Registration
Statement has been declared effective by the SEC, the Company may delay the
disclosure of material non-public information concerning the Company the disclosure
of which at the time is not, in the good faith opinion of the Board of
Directors of the Company and its counsel, in the best interest of the Company
and, in the opinion of counsel to the Company, otherwise required (a “Grace Period”); provided, that the Company
shall promptly (i) notify the Investors in writing of the existence of material
non-public information giving rise to a Grace Period (provided that in each
notice the Company will not disclose the content of such material non-public
information to the Investors) and the date on which the Grace Period will
begin, and (ii) notify the Investors in writing of the date on which the Grace
Period ends; and, provided further, that (A) no Grace Periods shall exceed
forty-five (45) consecutive days, and (B) during any consecutive three hundred
sixty-five (365) day period, such Grace Periods shall not exceed an aggregate
of sixty (60) days (an “Allowable Grace
Period”).  For purposes of
determining the length of a Grace Period above, the Grace Period shall begin on
and include the date the holders receive the notice referred to in clause (i)
and shall end on and include the later of the date the holders receive the
notice referred to in clause (ii) and the date referred to in such notice.  The provisions of Section 4(g) hereof shall
not be applicable during the period of any Allowable Grace Period.  Upon expiration of the Grace Period, the
Company shall again be bound by the first sentence of Section 4(f) with respect
to the information giving rise thereto unless such material non-public
information is no longer applicable.

 15
 

 

5.             OBLIGATIONS OF THE INVESTORS.

(a)           At least fifteen (15) days prior to
the first anticipated filing date of a Registration Statement, the Company
shall notify each Investor in writing of the information the Company requires
from each such Investor if such Investor elects to have any of such Investor’s
Registrable Securities included in such Registration Statement.  It shall be a condition precedent to the
obligations of the Company to complete the registration pursuant to this
Agreement with respect to the Registrable Securities of a particular Investor
that such Investor shall furnish to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request, in each case within fifteen (15) days of being notified by
the Company of its necessity.

(b)           Each Investor by such Investor’s
acceptance of the Registrable Securities agrees to cooperate with the Company
as reasonably requested by the Company in connection with the preparation and
filing of any Registration Statement hereunder, unless such Investor has
notified the Company in writing of such Investor’s election to exclude all of
such Investor’s Registrable Securities from such Registration Statement.

(c)           Each Investor agrees that, upon
receipt of any notice from the Company of the happening of any event of the
kind described in Section 4(g) or the first sentence of 4(f), such Investor
will immediately discontinue disposition of Registrable Securities pursuant to
any Registration Statement(s) covering such Registrable Securities until such
Investor’s receipt of the copies of the supplemented or amended prospectus
contemplated by Section 4(g) or the first sentence of 4(f) or receipt of notice
that no supplement or amendment is required. 
Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement
in connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor’s receipt
of a notice from the Company of the happening of any event of the kind
described in Section 4(g) or the first sentence of Section 4(f) and for which
the Investor has not yet settled.

(d)           As promptly as practicable after
becoming aware of such event, each Investor shall notify the Company in writing
of the happening of any event as a result of which the information provided in
writing by such Investor to the Company expressly for use in the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omission to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.

(e)           Each Investor hereby agrees that it
shall not sell or otherwise transfer or dispose of any of the Common Shares held
by such Investor prior to August 14, 2007, other than to an “Affiliate” or “Related
Fund” (each as defined in the Credit Agreement).  In addition, each Investor agrees that, for
so long as such Investor is subject to the volume limitations pursuant to Rule
144 promulgated under the Securities Act, such Investor will not, in any
particular month, sell or otherwise transfer or dispose of Common Shares for an
aggregate sale price that exceeds an amount equal to 25% of the aggregate
dollar amount of all sales of the Common Stock on the Principal Market during
the then-preceding month; provided, that such foregoing restrictions 

 16
 

 

shall not apply to any sale, transfer or disposition
of Common Shares (i) to an investment bank or similar institution reasonably acceptable
to the Company, (ii) to a “Qualified Institutional Buyer” (as defined in the
Securities Act), (iii) under a Registration Statement pursuant to Section 3(a)
or 3(b) of this Agreement, or (iv) to an Affiliate or Related Fund.

6.             EXPENSES OF REGISTRATION.

All expenses incurred in
connection with registrations, filings or qualifications pursuant to Sections 3
and 4 of this Agreement, including, without limitation, all registration,
listing and qualifications fees, printers and accounting fees, transfer agent
fees and fees and disbursements of counsel for the Company (but excluding
underwriting discounts and commissions, which shall be the responsibility of
the Investors participating in such registration), shall be paid by the
Company.  The Company shall also
reimburse the Investors for the reasonable and documented fees and
disbursements of Legal Counsel in connection with registration, filing or
qualification pursuant to Sections 3 and 4 of this Agreement, which
reimbursement of fees and disbursements of Legal Counsel shall not exceed
$10,000 per registration.  The Company
shall pay all of the Investors’ reasonable costs (including fees and
disbursements of the Legal Counsel) incurred in connection with the successful
enforcement of the Investors’ rights under this Agreement. Notwithstanding the
foregoing, each seller of Registrable Securities shall pay all fees and
disbursements of all counsel (other than the Legal Counsel) retained by such
seller and all selling expenses, including, without limitation, all
underwriting discounts, selling commissions, transfer taxes and other similar
expenses, to the extent required by applicable law.

7.             INDEMNIFICATION.

In the event any
Registrable Securities are included in a Registration Statement under this
Agreement:

(a)           To the fullest extent permitted by
law, the Company will, and hereby does, indemnify, hold harmless and defend
each Investor, the directors, officers, partners, employees, agents,
representatives of, and each Person, if any, who controls any Investor within
the meaning of the Securities Act or the Exchange Act (each, an “Investor Indemnified Person”), against any
losses, claims, damages, liabilities, judgments, fines, penalties, charges,
costs, reasonable attorneys’ fees, amounts paid in settlement or expenses,
joint or several, (collectively, “Claims”)
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the SEC, whether pending or threatened, whether or not an indemnified
party is or may be a party thereto (“Indemnified
Damages”), to which any of them may become subject insofar as such
Claims (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact in a Registration Statement or any
post-effective amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other “blue sky” laws of
any jurisdiction in which Registrable Securities are offered (“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the 

 17
 

 

final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in light of the circumstances under which the
statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any other
law, including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation by the
Company of the terms of this Agreement (the
matters in the foregoing clauses (i) through (iv) being, collectively, “Violations”).  Subject to Section 7(c), the Company shall
reimburse the Investors and each such controlling person, promptly as such
expenses are incurred and are due and payable, for any legal fees or
disbursements or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. 
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(a): (i) shall not apply
to a Claim by an Investor Indemnified Person arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to the Company by such Investor Indemnified Person
expressly for use in connection with the preparation of the Registration
Statement or any such amendment thereof or supplement thereto, if such
prospectus was timely made available by the Company pursuant to Section 4(d);
(ii) shall not be available to the extent such Claim is based on a failure of
the Investor to deliver or to cause to be delivered the prospectus made
available by the Company, (A) if such prospectus was timely made available by
the Company pursuant to Section 4(d) and (B) the Company had notified the
Investor that such prospectus was required to be delivered by the Investor as a
result of the Company’s failure to comply with the conditions of Rule 172(c)
under the Securities Act; (iii) shall not apply to amounts paid in settlement
of any Claim, if such settlement is effected without the prior written consent
of the Company, which consent shall not be unreasonably withheld; and (iv)
shall not apply to sales by such Investor under an outdated or defective
prospectus after the Company has notified such Investor in writing that the
prospectus is outdated or defective and prior to the receipt of notice by such
Investor from the Company that sales may be resumed and/or the use of the
applicable prospectus may be resumed and provided that a corrected prospectus
would have avoided such Claims..  Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Investor Indemnified Person and shall survive the
transfer of the Registrable Securities by the Investors pursuant to Section 10.

(b)           In connection with any Registration
Statement in which an Investor is participating, each such Investor agrees to
severally and not jointly indemnify, hold harmless and defend, to the same
extent and in the same manner as is set forth in Section 7(a), the Company, each
of its directors, each of its officers who signs the Registration Statement,
each of the Company’s agents or representatives, and each Person, if any, who
controls the Company within the meaning of the Securities Act or the Exchange
Act (each an “Company Indemnified Party”),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon: (i) such
Investor’s failure to comply with the prospectus delivery requirements of the
Securities Act after being advised by the Company that it has not satisfied the
conditions of Rule 172 and that such Investor is, as a consequence, required to
deliver a prospectus in connection with any disposition of Registrable
Securities and has provided the Investor with a reasonably sufficient number of
copies of a current prospectus to be 

 18
 

 

used in connection with any such dispositions or (ii)
any untrue statement of a material fact contained in any Registration
Statement, any prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each
case to the extent, but only to the extent that, (1) such untrue statements or
omissions are based upon information regarding such Investor or its plan of
distribution that was furnished in writing to the Company by such Investor
expressly for use therein, or (2) sales by such Investor under an outdated or
defective prospectus after the Company has notified such Investor in writing
that the prospectus is outdated or defective and prior to receipt of notice by
such Investor from the Company that sales may be resumed and/or the use of the
applicable prospectus may be resumed and provided that a corrected prospectus
would have avoided such Claims.  Subject
to Section 7(d), such Investor will reimburse any legal or other expenses
reasonably incurred by a Company Indemnified Party in connection with
investigating or defending any such Claim; provided, however that (x) the
indemnity agreement contained in this Section 7(b) and the agreement with
respect to contribution contained in Section 8 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of such Investor, which consent shall not be unreasonably
withheld, and (y) an Investor shall be liable under this Section 7(b) for only
that amount of a Claim or Indemnified Damages as does not exceed the net
proceeds to such Investor as a result of the sale of the Registrable Securities
pursuant to the Registration Statement giving rise to such liability.  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of such Company
Indemnified Party and shall survive the transfer of the Registrable Securities
by the Investors pursuant to Section 10. 
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 7(b) with respect to any
prospectus shall not inure to the benefit of any Company Indemnified Party if
the untrue statement or omission of material fact contained in the prospectus
was corrected on a timely basis in the prospectus, as then amended or
supplemented.

(c)           Promptly after receipt by an Investor
Indemnified Person or Company Indemnified Party under this Section 7 of notice
of the commencement of any action or proceeding (including any governmental
action or proceeding) involving a Claim, such Investor Indemnified Person or
Company Indemnified Party shall, if a Claim in respect thereof is to be made
against any indemnifying party under this Section 7, deliver to the
indemnifying party a written notice of the commencement thereof, and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume control of the defense thereof with counsel
mutually satisfactory to the indemnifying party and the Investor Indemnified
Person or the Company Indemnified Party, as the case may be; provided, however,
that an Investor Indemnified Person or Company Indemnified Party shall have the
right to retain its own counsel with the fees and expenses of not more than one
counsel for such Investor Indemnified Person or Company Indemnified Party to be
paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Investor Indemnified Person or Company Indemnified Party and the indemnifying
party would be inappropriate due to actual or potential conflicting interests
between such Investor Indemnified Person or Company Indemnified Party and any
other party represented by such counsel in such proceeding.  In the case of an Investor Indemnified
Person, legal counsel referred to in the immediately preceding sentence (the “Investor  Legal
Counsel”) shall be selected by the Investors holding a majority in
interest of the Registrable Securities included in the Registration 

 19
 

 

Statement to which the Claim relates.  The Investor Legal Counsel shall not
represent any Investor Indemnified Person that sends such counsel written
notice that such Investor Indemnified Person does not wish such counsel to
represent it in connection with the matters discussed in this Section.  The Investor Indemnified Persons, other than
any Investor Indemnified Person that delivers the notice discussed in the
preceding sentence, hereby waive any conflict of interest or potential conflict
of interest that may arise as a result of the representation of such Investor
Indemnified Persons by the Investor Legal Counsel in connection with the
subject matter of the Claim.  The Company
Indemnified Party or Investor Indemnified Person shall cooperate with the
indemnifying party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Company Indemnified Party or
Investor Indemnified Person which relates to such action or claim.  The indemnifying party shall keep the Company
Indemnified Party or Investor Indemnified Person apprised as to the status of
the defense or any settlement negotiations with respect thereto.  No indemnifying party shall be liable for any
settlement of any action, claim or proceeding effected without its prior
written consent, which consent shall not be unreasonably withheld.  No indemnifying party shall, without the
prior written consent of the Company Indemnified Party or Investor Indemnified
Person, consent to entry of any judgment or enter into any settlement or other
compromise which (i) does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Company Indemnified Party or
Investor Indemnified Person of a release from all liability in respect of such
claim or litigation, (ii) requires any admission of wrongdoing by the Company
Indemnified Party or Investor Indemnified Party or (iii) obligates or requires
a Company Indemnified Party or Investor Indemnified Party to take, or refrain
from taking, any action.  Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Company Indemnified Party or Investor
Indemnified Person with respect to all third parties, firms or corporations
relating to the matter for which indemnification has been made.  The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Investor Indemnified Person or Company Indemnified Party under this Section 7,
except to the extent that the indemnifying party is materially prejudiced in
its ability to defend such action.

(d)           The indemnification required by this
Section 7 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.

(e)           The indemnity agreements contained
herein shall be in addition to (i) any cause of action or similar right of the
Company Indemnified Party or Investor Indemnified Person against the
indemnifying party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law.

8.             CONTRIBUTION.

If for any reason the
indemnification provided for in Section 7 hereof is unavailable to a Company
Indemnified Party or an Investor Indemnified Party or insufficient to hold it
harmless, other than as expressly specified therein, then the indemnifying
party shall contribute to the amount paid or payable by the Company Indemnified
Party or the Investor Indemnified Party, as applicable, as a result of Claims
in such proportion as is appropriate to reflect the relative fault of 

 20
 

 

the indemnified party and
the indemnifying party, as well as any other relevant equitable
considerations.  No person guilty of
fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation.  In no
event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all
expenses paid by such holder in connection with any claim relating to this
Section 8 and the amount of any damages such holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or
alleged omission) received by it upon the sale of the Registrable Securities
giving rise to such contribution obligation.

9.             REPORTS UNDER THE EXCHANGE ACT.

With a view to making
available to the Investors the benefits of Rule 144 promulgated under the
Securities Act or any other similar rule or regulation of the SEC that may at
any time permit the Investors to sell securities of the Company to the public
without registration (“Rule 144”),
the Company agrees to:

(a)           make and keep public information
available, as those terms are understood and defined in Rule 144;

(b)           file with the SEC in a timely manner
all reports and other documents required of the Company under the Securities
Act and the Exchange Act so long as the Company remains subject to such
requirements (it being understood that nothing herein shall limit the Company’s
obligations under the Securities Purchase Agreement) and the filing of such
reports and other documents is required for the applicable provisions of Rule
144; and

(c)           furnish to each Investor so long as
such Investor owns Registrable Securities, promptly upon request, (i) a written
statement by the Company that it has complied with the reporting requirements
of Rule 144, the Securities Act and the Exchange Act and (ii) such other
information as may be reasonably requested to permit the Investors to sell such
securities pursuant to Rule 144 without registration.

10.          ASSIGNMENT.

The rights under this
Agreement shall be automatically assignable by an Investor to any transferee of
all or any portion of Registrable Securities if: (i) the Investor agrees in
writing with the transferee or assignee to assign such rights, and a copy of
such agreement is furnished to the Company within a reasonable time after such
assignment; (ii) the Company is, within a 
reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such rights are being transferred or
assigned; (iii) the transferee or assignee agrees in writing with the Company
to be bound by all of the provisions contained herein; and (iv) such transferee
would be, after giving effect to the proposed transfer, the beneficial owner of
at least Seventy Five Thousand (75,000) Registrable Securities.  No transferee of rights under this Agreement
shall be entitled to include any Registrable Securities on a Registration
Statement unless it previously has provided the Company the written notice
referred to in clause (ii) of the preceding sentence.

 

 21

 

11.          AMENDMENT.

Provisions of this
Agreement may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and Investors who
then hold more than sixty six and two-thirds percent (66-2/3%) of the
Registrable Securities; provided, that an amendment to a provision of Section 2
or any defined term contained therein shall instead require the written consent
of the Company and Investors who then hold more than sixty six and two-thirds
percent (66-2/3%) of the outstanding principal balance of the Convertible Term
Loan.  Any amendment or waiver effected
in accordance with this Section 11 shall be binding upon each Investor and the
Company.

12.          LEGENDS.

(a)           Each certificate representing Common
Shares shall (unless otherwise permitted by the provisions of this Agreement)
be stamped or otherwise imprinted with a legend substantially similar to the
following:

THE SHARES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD OR TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS
AND UNTIL REGISTERED UNDER SUCH ACT OR UNLESS THE COMPANY HAS RECEIVED AN
OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY TO THE COMPANY,
THAT SUCH REGISTRATION IS NOT REQUIRED.

(b)           The Company shall promptly reissue
unlegended certificates at the request of any holder thereof if (A) such shares
are registered pursuant to a Registration Statement, or (B) the holder shall
have obtained an opinion of counsel, at such holder’s expense (which counsel
may be counsel to the Company) and reasonably acceptable to the Company, to the
effect that the securities proposed to be disposed of may lawfully be so
disposed of without registration, qualification or other compliance with any
legend.

(c)           Any legend endorsed on an instrument
pursuant to applicable state securities laws and any stop-transfer instructions
with respect to such securities shall be removed upon receipt by the Company of
an order of the appropriate blue sky authority authorizing such removal.

13.          MISCELLANEOUS.

(a)           A particular Investor’s registration
rights under this Agreement shall expire upon the later of (i) the third
anniversary of the final repayment and/or conversion of the Convertible Term
Loan, and (ii) the first date on which all Registrable Securities held by such
Investor (and its affiliates) may be sold pursuant to Rule 144 during any
ninety (90) day period.

(b)           For the purposes of determining the
rights of the parties hereto, including the right to approve matters pursuant
to the terms hereof, a Person is deemed to be a holder of Registrable
Securities whenever such Person owns or is deemed to own of record such
Registrable Securities or holds a conversion right exercisable for such
Registrable Securities.  When the number
of Registrable Securities shall be determined, the number shall be deemed to
include not only outstanding Common Shares but also any Common Shares issuable
pursuant to the terms of this 

 22
 

 

Agreement.  If
the Company receives conflicting instructions, notices or elections from two or
more Persons with respect to the same Registrable Securities, the Company shall
act upon the basis of instructions, notice or election received from the
registered owner of such Registrable Securities.

(c)           Any notice or request under this
Agreement shall be given to any party to this Agreement at such party’s address
set forth beneath its signature on the signature page to this Agreement, or at such
other address as such party hereafter may specify in a notice given in the
manner required under this Section 13(c). 
Any notice or request hereunder shall be given only by, and shall be
deemed to have been received upon:  (i)
registered or certified mail, return receipt requested, on the date on which
such notice or request is received as indicated in such return receipt, (ii)
delivery by a nationally recognized overnight courier, one (1) Trading Day
after deposit with such courier, or (iii) facsimile transmission, upon
communication from the recipient acknowledging receipt (whether automatic or
manual from recipient), as applicable.

(d)           Failure of any party to exercise any
right or remedy under this Agreement or otherwise, or delay by a party in exercising
such right or remedy, shall not operate as a waiver thereof.  If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the remainder
of this Agreement in that jurisdiction or the validity or enforceability of any
provision of this Agreement in any other jurisdiction.

(e)           This Agreement shall be governed by
and construed in accordance with the internal laws of the State of Maryland without
giving effect to its choice of law provisions that would result in the
application of the laws of a different jurisdiction.  Any judicial proceeding against any party
with respect to this Agreement may be brought in any federal court of competent
jurisdiction located in Baltimore City, Maryland or any state court of
competent jurisdiction located in Montgomery County, Maryland.  By execution and delivery of this Agreement,
each party (i) accepts the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any judgment rendered thereby, (ii) waives
personal service of process, (iii) agrees that service of process upon it may
be made by certified or registered mail, return receipt requested, pursuant to
Section 13(c), and (iv) waives any objection to jurisdiction and venue of any
action instituted hereunder and agrees not to assert any defense based on lack
of jurisdiction, venue, convenience or forum nonconveniens.  Nothing shall affect the right of any
Investor to serve process in any manner permitted by law or shall limit the
right of any Investor to bring proceedings against the Company in the courts of
any other jurisdiction having jurisdiction. 
Any judicial proceedings against any Investor involving, directly or
indirectly, this Agreement shall be brought only in a federal court of
competent jurisdiction located in Baltimore City, Maryland or a state court of
competent jurisdiction located in Montgomery County, Maryland.

(f)            EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION
ARISING UNDER THIS AGREEMENT OR IN ANY WAY CONNECTED WITH OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES WITH RESPECT TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR 

 23
 

 

OTHERWISE.  EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT
MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES TO THE WAIVER OF THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY.

(g)           This Agreement, the Credit Agreement
and the other Loan Documents (as defined in the Credit Agreement) constitute
the entire agreement among the parties hereto with respect to the subject
matter hereof and thereof.  There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein and therein.  This
Agreement, the Credit Agreement and the other Loan Documents supersede all
prior agreements and understandings among the parties hereto with respect to
the subject matter hereof and thereof.

(h)           Subject to the requirements of
Section 10, this Agreement shall inure to the benefit of and be binding upon
the permitted successors and assigns of each of the parties hereto.

(i)            The captions in this Agreement are
intended for convenience and reference only and shall not affect the meaning or
interpretation of this Agreement.

(j)            This Agreement may be executed in
two or more counterparts (which taken together, shall constitute one and the
same instrument) and by facsimile transmission, which facsimile signatures
shall be considered original executed counterparts.  Each party to this Agreement agrees that it
will be bound by its own facsimile signature and that it accepts the facsimile
signature of each other party.

(k)           Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.

(l)            All consents and other
determinations to be made by the Investors pursuant to this Agreement shall be
made, unless otherwise specified in this Agreement, by Investors holding a
majority of the Registrable Securities, determined as if all of the Common
Shares issuable pursuant to this Agreement had been issued.

(m)          The language used in this Agreement
will be deemed to be the language chosen by the parties to express their mutual
intent and no rules of strict construction will be applied against any party.

(n)           This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other Person.

 24
 

 

(o)           Each Investor represents and warrants
to the Company as follows:

(i)            On the date hereof and on each date
that such Investor exercises the conversion right set forth in Section 2, such
Investor is an “accredited investor” as defined in Regulation D of the
Securities Act.

(ii)           The Convertible Term Loan is being
acquired by such Investor for investment for its own account, not as a nominee
or agent, and not with a view to the distribution of any part thereof, and not
with any present intention to distribute any of the Common Shares issuable
thereunder.  Such Investor has no present
intention of selling, granting any participation in or otherwise distributing
any of the Common Shares in a manner contrary to the Securities Act or to any
applicable state securities laws.

(iii)          Such Investor is further aware that
the shares of Common Shares issued, or to be issued, to it are “restricted
securities” under federal securities laws in that they are being, or will be,
acquired from the Company in a transaction not involving a public offering and
that under such laws such shares may be resold only in compliance with the
Securities Act.  Such Investor represents
that it is familiar with Rule 144, as presently in effect, and understands the
resale limitations imposed thereby and by the Securities Act.

 

[remainder of this
page intentionally left blank]

 

 25

 

 

IN WITNESS WHEREOF, the parties have executed this Conversion and
Registration Rights Agreement as of the date first set forth above.

 

	
  THE COMPANY:

  	
  A.D.A.M., Inc.

  
	
   

  	
  a Georgia corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin S. Noland

  
	
   

  	
  Name:

  	
  Kevin S. Noland

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  1600 RiverEdge
  Parkway, Suite 100

  Atlanta, Georgia 30328

  Attn: Kevin Noland

  FAX: (770) 988-0611

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PURCHASER:

  	
  CAPITALSOURCE FINANCE
  LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4445 Willard Avenue,
  12th Floor

  Chevy Chase, Maryland 20815

  Attn: Corporate Finance Group, Portfolio Manager

  FAX: (301) 841-2313

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy (which
  shall not constitute notice) to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Bell, Boyd &
  Lloyd LLC

  70 W. Madison, Suite 3100

  Chicago, Illinois 60602

  Attn: Michael L. Owen

  FAX: (312) 345-9064

  

 

 

A.D.A.M., Inc.
Conversion and Registration Rights Agreement

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00108-of-00352.parquet"}]]