Document:

exv10w15

 

EXHIBIT 10.15

CREDIT AND SECURITY AGREEMENT

dated as of December 15, 2006

by and among

OREXIGEN THERAPEUTICS, INC.

and each additional Person joined as a borrower from time to time,

collectively, Borrowers

and

MERRILL LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES INC.,

as Agent and as a Lender

and

THE ADDITIONAL LENDERS

FROM TIME TO TIME PARTY HERETO

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE 1 - DEFINITIONS	 	 	1	 
	Section 1.1.
	 	Certain Defined Terms	 	 	1	 
	Section 1.2.
	 	Accounting Terms and Determinations	 	 	13	 
	Section 1.3.
	 	Other Definitional Provisions	 	 	14	 
	Section 1.4.
	 	Funding and Settlement Currency	 	 	14	 
	Section 1.5.
	 	Riders	 	 	14	 
	ARTICLE 2 - LOANS AND LETTERS OF CREDIT	 	 	14	 
	Section 2.1.
	 	Loans	 	 	14	 
	Section 2.2.
	 	Interest, Interest Calculations and Certain Fees	 	 	16	 
	Section 2.3.
	 	Notes	 	 	18	 
	Section 2.4.
	 	[RESERVED]	 	 	18	 
	Section 2.5.
	 	[RESERVED]	 	 	18	 
	Section 2.6.
	 	General Provisions Regarding Payment; Loan Account	 	 	18	 
	Section 2.7.
	 	Maximum Interest	 	 	18	 
	Section 2.8.
	 	Taxes; Capital Adequacy	 	 	19	 
	Section 2.9.
	 	Appointment of Borrower Representative	 	 	20	 
	Section 2.10.
	 	Joint and Several Liability	 	 	20	 
	Section 2.11.
	 	[RESERVED]	 	 	21	 
	ARTICLE 3 - REPRESENTATIONS AND WARRANTIES	 	 	21	 
	Section 3.1.
	 	Existence and Power	 	 	21	 
	Section 3.2.
	 	Organization and Governmental Authorization; No Contravention	 	 	21	 
	Section 3.3.
	 	Binding Effect	 	 	21	 
	Section 3.4.
	 	Capitalization	 	 	21	 
	Section 3.5.
	 	Financial Information	 	 	22	 
	Section 3.6.
	 	Litigation	 	 	22	 
	Section 3.7.
	 	Ownership of Property	 	 	22	 
	Section 3.8.
	 	No Default	 	 	22	 
	Section 3.9.
	 	Labor Matters	 	 	22	 
	Section 3.10.
	 	Regulated Entities	 	 	22	 
	Section 3.11.
	 	Margin Regulations	 	 	22	 
	Section 3.12.
	 	Compliance With Laws; Anti-Terrorism Laws	 	 	23	 

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	Section 3.13.
	 	Taxes	 	 	23	 
	Section 3.14.
	 	Compliance with ERISA	 	 	23	 
	Section 3.15.
	 	Consummation of Operative Documents; Brokers	 	 	23	 
	Section 3.16.
	 	Related Transactions	 	 	24	 
	Section 3.17.
	 	Material Contracts	 	 	24	 
	Section 3.18.
	 	Compliance with Environmental Requirements; No Hazardous Materials	 	 	24	 
	Section 3.19.
	 	Intellectual Property	 	 	25	 
	Section 3.20.
	 	Solvency	 	 	25	 
	Section 3.21.
	 	Full Disclosure	 	 	25	 
	Section 3.22.
	 	Interest Rate	 	 	25	 
	Section 3.23.
	 	Subsidiaries	 	 	25	 
	Section 3.24.
	 	Representations and Warranties Incorporated from Operative Documents	 	 	26	 
	ARTICLE 4 - AFFIRMATIVE COVENANTS	 	 	26	 
	Section 4.1.
	 	Financial Statements and Other Reports	 	 	26	 
	Section 4.2.
	 	Payment and Performance of Obligations	 	 	26	 
	Section 4.3.
	 	Maintenance of Existence	 	 	26	 
	Section 4.4.
	 	Maintenance of Property; Insurance	 	 	26	 
	Section 4.5.
	 	Compliance with Laws	 	 	27	 
	Section 4.6.
	 	Inspection of Property, Books and Records	 	 	27	 
	Section 4.7.
	 	Use of Proceeds	 	 	28	 
	Section 4.8.
	 	Estoppel Certificates	 	 	28	 
	Section 4.9.
	 	Notices of Litigation and Defaults	 	 	28	 
	Section 4.10.
	 	Hazardous Materials; Remediation	 	 	28	 
	Section 4.11.
	 	Further Assurances	 	 	28	 
	Section 4.12.
	 	Updates of Representations	 	 	29	 
	Section 4.13.
	 	Power of Attorney	 	 	30	 
	Section 4.14.
	 	Collateral Administration	 	 	30	 
	Section 4.15.
	 	[RESERVED]	 	 	30	 
	ARTICLE 5 - NEGATIVE COVENANTS	 	 	30	 
	Section 5.1.
	 	Debt; Contingent Obligations	 	 	30	 
	Section 5.2.
	 	Liens	 	 	30	 
	Section 5.3.
	 	Restricted Distributions	 	 	31	 
	Section 5.4.
	 	Restrictive Agreements	 	 	31	 

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	Section 5.5.
	 	[RESERVED]	 	 	31	 
	Section 5.6.
	 	Consolidations, Mergers and Sales of Assets; Change in Control	 	 	31	 
	Section 5.7.
	 	Purchase of Assets, Investments	 	 	31	 
	Section 5.8.
	 	Transactions with Affiliates	 	 	31	 
	Section 5.9.
	 	Modification of Organizational Documents	 	 	31	 
	Section 5.10.
	 	Modification of Certain Agreements	 	 	32	 
	Section 5.11.
	 	Conduct of Business	 	 	32	 
	Section 5.12.
	 	Lease Payments	 	 	32	 
	Section 5.13.
	 	Limitation on Sale and Leaseback Transactions	 	 	32	 
	Section 5.14.
	 	Deposit Accounts and Securities Accounts	 	 	32	 
	Section 5.15.
	 	Compliance with Anti-Terrorism Laws	 	 	32	 
	ARTICLE 6 - FINANCIAL COVENANTS	 	 	33	 
	ARTICLE 7 - CONDITIONS	 	 	33	 
	Section 7.1.
	 	Conditions to Closing	 	 	33	 
	Section 7.2.
	 	Conditions to Each Loan	 	 	33	 
	Section 7.3.
	 	Searches	 	 	34	 
	Section 7.4.
	 	Post Closing Requirements	 	 	34	 
	Section 7.5.
	 	Special Funding Conditions	 	 	34	 
	ARTICLE 8 - REGULATORY MATTERS	 	 	34	 
	ARTICLE 9 - SECURITY AGREEMENT	 	 	35	 
	Section 9.1.
	 	Generally	 	 	35	 
	Section 9.2.
	 	Representations and Warranties and Covenants Relating to Collateral	 	 	35	 
	Section 9.3.
	 	UCC Remedies	 	 	37	 
	ARTICLE 10 - EVENTS OF DEFAULT	 	 	39	 
	Section 10.1.
	 	Events of Default	 	 	39	 
	Section 10.2.
	 	Acceleration and Suspension or Termination of Term Loan Commitment	 	 	41	 
	Section 10.3.
	 	[RESERVED]	 	 	41	 
	Section 10.4.
	 	Default Rate of Interest	 	 	41	 
	Section 10.5.
	 	Setoff Rights	 	 	41	 
	Section 10.6.
	 	Application of Proceeds	 	 	41	 
	Section 10.7.
	 	Waivers	 	 	42	 
	Section 10.8.
	 	Injunctive Relief	 	 	43	 
	Section 10.9.
	 	Marshalling	 	 	43	 

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	ARTICLE 11 - AGENT	 	 	43	 
	Section 11.1.
	 	Appointment and Authorization	 	 	43	 
	Section 11.2.
	 	Right to Perform, Preserve and Protect	 	 	44	 
	ARTICLE 12 - MISCELLANEOUS	 	 	44	 
	Section 12.1.
	 	Survival	 	 	44	 
	Section 12.2.
	 	No Waivers	 	 	44	 
	Section 12.3.
	 	Notices	 	 	44	 
	Section 12.4.
	 	Severability	 	 	45	 
	Section 12.5.
	 	Amendments and Waivers	 	 	45	 
	Section 12.6.
	 	Assignments; Participations	 	 	46	 
	Section 12.7.
	 	Headings	 	 	46	 
	Section 12.8.
	 	Confidentiality	 	 	46	 
	Section 12.9.
	 	Waiver of Consequential and Other Damages	 	 	47	 
	Section 12.10.
	 	GOVERNING LAW; SUBMISSION TO JURISDICTION	 	 	47	 
	Section 12.11.
	 	WAIVER OF JURY TRIAL	 	 	47	 
	Section 12.12.
	 	Publication; Advertisement	 	 	47	 
	Section 12.13.
	 	Counterparts; Integration	 	 	48	 
	Section 12.14.
	 	No Strict Construction	 	 	48	 
	Section 12.15.
	 	Time	 	 	48	 
	Section 12.16.
	 	Lender Approvals	 	 	48	 
	Section 12.17.
	 	Expenses; Indemnity	 	 	48	 
	Section 12.18.
	 	[RESERVED]	 	 	49	 
	Section 12.19.
	 	Reinstatement	 	 	49	 

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CREDIT AND SECURITY AGREEMENT

     THIS CREDIT AND SECURITY AGREEMENT (as the same may be amended, supplemented, restated or
otherwise modified from time to time, the “Agreement”) is dated as of December 15, 2006 by and
among OREXIGEN THERAPEUTICS, INC., a Delaware corporation, and any additional Borrower that may
hereafter be added to this Agreement (each individually as a “Borrower” and collectively as
“Borrowers”), MERRILL LYNCH CAPITAL, a division of Merrill Lynch Business Financial Services Inc.,
individually as a Lender, and as Administrative Agent, and the financial institutions or other
entities from time to time parties hereto, each as a Lender.

RECITALS

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

AGREEMENT

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

ARTICLE 1 — DEFINITIONS

     Section 1.1. Certain Defined Terms.

     The following terms have the following meanings:

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

     “Accounts” means collectively (a) any right to payment of a monetary obligation, whether or
not earned by performance, (b) without duplication, any “account” (as defined in the UCC), any
accounts receivable (whether in the form of payments for services rendered or goods sold, rents,
license fees or otherwise), any “health-care-insurance receivables” (as defined in the UCC), any
“payment intangibles” (as defined in the UCC) and all other rights to payment and/or reimbursement
of every kind and description, whether or not earned by performance, (c) all “general intangibles”
(as defined in the UCC) (excluding general intangibles that are “Excluded Property” (as defined on
Schedule 9.1 attached hereto and made part hereof) but including any general intangibles that may
be IP Proceeds (as defined on Schedule 9.1 attached hereto and made part hereof)), rights,
remedies, Guarantees, “supporting obligations” (as defined in the UCC), “letter-of-credit rights”
(as defined in the UCC) and security interests in respect of the foregoing, all rights of
enforcement and collection relating to the foregoing, all books and records evidencing or related
to the foregoing, and all rights under the Operative Documents in respect of the foregoing, (d) all
information and data compiled or derived by any Borrower or to which any Borrower is entitled in
respect of or related to the foregoing, and (e) all proceeds of any of the foregoing.

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

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

 

 

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

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

     “Base Rate” means, with respect to each respective individual advance made under the Term
Loan, a fixed rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to
(a) the rate of interest which is identified and normally published by Bloomberg Professional
Service Page BBAM 1 as the offered rate for loans in United States dollars for the period of one
(1) month under the caption British Bankers Association LIBOR Rates as of 11:00 a.m. (London time)
on the second full Business Day prior to the date such advance was made; divided by (b) the sum of
one minus the daily average during the preceding month of the aggregate maximum reserve requirement
(expressed as a decimal) then imposed under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor thereto) for “Eurocurrency Liabilities” (as defined therein). If
Bloomberg Professional Service (or another nationally-recognized rate reporting source acceptable
to Administrative Agent) no longer reports the LIBOR or Administrative Agent determines in good
faith that the rate so reported no longer accurately reflects the rate available to Administrative
Agent in the London Interbank Market or if such index no longer exists or if Page BBAM 1 no longer
exists or accurately reflects the rate available to Administrative Agent in the London Interbank
Market, Administrative Agent may select a comparable replacement index or replacement page, as the
case may be.

     “Base Rate Margin” means, with respect to each respective individual advance made under the
Term Loan, a percentage rate per annum as follows:

	 	 	 	 	 
	Date of Advance	 	Applicable Base Rate Margin Percentage
	Advances made on or after the
Closing Date but on or before
December 31, 2006
	 	 	3.75	%
	 
	 	 	 	 
	Advances made on or after January
1, 2007 but on or before March 31,
2007
	 	 	4.00	%
	 
	 	 	 	 
	Advances made on or after April 1,
2007 but on or before June 30,2007
	 	 	4.25	%

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

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

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

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

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

     “Change in Control” means any of the following events: (a) any Person or two or more Persons
acting in concert, other than any one or more of the Existing Investors (as defined below) shall
have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract
or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will
result in its or their acquisition of or control over, voting stock of Principal Borrower (or other
securities convertible into such voting stock) representing 50% (or, after the successful
completion of an initial public offering of the common stock of Principal Borrower, 40%) or more of
the combined voting power of all voting stock of Principal Borrower or (b) Principal Borrower
ceases to own all of the outstanding capital stock of any other Borrower. As used herein,
“beneficial ownership” shall have the meaning provided in Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934. For the purposes of this definition, the
“Existing Investors” shall consist of Kleiner Perkins Caufield & Byers Holdings, Domain Associates,
Morganthaler, Sofinnova Venture Partners, NIF Investors, BA Venture Partners and Montreux Equity
Partners, and the Permitted Affiliates of each.

     “Closing Date” means the date of this Agreement.

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

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

     “Commitment Annex” means Annex A to this Agreement.

     “Commitment Expiry Date” means three (3) years from the earlier to occur of (a) June 30, 2010
or (b) the last funding of any portion of the Term Loan.

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

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

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

     “Credit Exposure” means any period of time during which the Term Loan Commitment is
outstanding or any Obligation remains unpaid or outstanding; provided, however, that no Credit
Exposure shall be deemed to exist

3

 

solely due to the existence of contingent indemnification liability, absent the assertion of a
claim with respect thereto.

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

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

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

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

     “Deposit Account Control Agreement” means an agreement, in form and substance reasonbly
satisfactory to Administrative Agent, among Administrative Agent, any applicable Borrower and each
bank or financial institution in which such Borrower maintains a Deposit Account, which agreement
provides that (a) such bank or financial institution acknowledges the security interest of
Administrative Agent in such Deposit Account, (b) such bank or financial institution shall comply
with instructions originated by Administrative Agent directing disposition of the funds in such
Deposit Account without further consent by the applicable Borrower, and (c) such bank or financial
institution shall agree that it shall have no Lien on, or right of setoff or recoupment against,
such Deposit Account or the contents thereof, other than in respect of usual and customary service
fees and of returned items for which Administrative Agent has been given value, in each such case
expressly consented to by Administrative Agent, and containing such other terms and conditions as
Administrative Agent may require.

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

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

4

 

analogous state or local laws, any amendments thereto, and the regulations promulgated
pursuant to said laws, together with all amendments from time to time to any of the foregoing and
judicial interpretations thereof.

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

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

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

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

     “Excluded Property” has the meaning set forth in Schedule 9.1.

     “Exit Fee” has the meaning set forth in Section 2.2(f).

     “Extraordinary Receipts” means any cash received by or paid to or for the account of any
Credit Party not in the Ordinary Course of Business (and not consisting of proceeds described in
any of clauses (i) and/or (iii) of Section 2.1(a)(ii)(B)), including, without limitation, amounts
received in respect of foreign, United States, State or local tax refunds, pension plan reversions,
purchase price and other monetary adjustments made pursuant to any acquisition document and/or
indemnification payments made pursuant to any acquisition document (other than such indemnification
payments to the extent that the amounts so received are applied by a Credit Party for the purpose
of replacing, repairing or restoring any assets or properties of a Credit Party, or satisfying the
condition giving rise to the claim for indemnification or otherwise covering any out-of-pocket
expenses incurred by any Credit Party in obtaining such payments). “Extraordinary Receipts” shall,
however, exclude the proceeds of any equity issuance in Principal Borrower or any other capital
raising transaction.

     “Financing Documents” means this Agreement, any Notes, the Security Documents, any fee letter
among Merrill Lynch and any of the Borrowers relating to the transactions contemplated hereby, any
subordination or intercreditor agreement pursuant to which any Debt and/or any Liens securing such
Debt is subordinated to all or any portion of the Obligations and all other documents, instruments
and agreements related to the Obligations and heretofore executed, executed concurrently herewith
or executed at any time and from time to time hereafter, as any or all of the same may be amended,
supplemented, restated or otherwise modified from time to time.

     “Foreign Lender” has the meaning set forth in Section 2.8(c).

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

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

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     “Guarantee” by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation, or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part) (in each case under clause (a) or (b)
whether arising by virtue of partnership arrangements, by agreement to keep-well or to make capital
contributions or loans, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise), provided, however, that the term Guarantee
shall not include endorsements for collection or deposit in the Ordinary Course of Business. The
term “Guarantee” used as a verb has a corresponding meaning.

     “Guarantor” means any Credit Party that has executed or delivered, or shall in the future
execute or deliver, any Guarantee of any portion of the Obligations. The parties hereto
acknowledge that there is no Guarantor as of the date hereof.

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

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

     “Healthcare Laws” means all applicable Laws relating to the possession, control, warehousing,
marketing, sale and distribution of pharmaceuticals, the operation of medical or senior housing
facilities (such as, but not limited to, nursing homes, skilled nursing facilities, rehabilitation
hospitals, intermediate care facilities and adult care facilities), patient healthcare, patient
healthcare information, patient abuse, the quality and adequacy of medical care, rate setting,
equipment, personnel, operating policies, fee splitting, including, without limitation, (a) all
federal and state fraud and abuse laws, including, without limitation, the federal Anti-Kickback
Statute (42 U.S.C. §1320a-7b(6)), the Stark Law (42 U.S.C. §1395nn), the civil False Claims Act (31
U.S.C. §3729 et seq.), (b) TRICARE, (c) HIPAA, (d) Medicare, (e) Medicaid, (f) quality, safety and
accreditation standards and requirements of all applicable state laws or regulatory bodies, (g) all
laws, policies, procedures, requirements and regulations pursuant to which Healthcare Permits are
issued, and (h) any and all other applicable health care laws, regulations, manual provisions,
policies and administrative guidance, each of (a) through (h) as may be amended from time to time.

     “Indemnitees” has the meaning set forth in Section 12.17.

     “Intellectual Property” means, with respect to any Person, all patents, patent applications
and like protections, including improvements, divisions, continuation, renewals, reissues,
extensions and continuations in

6

 

part of the same, trademarks, trade names, trade styles, trade dress, service marks, logos and
other business identifiers and, to the extent permitted under applicable law, any applications
therefore, whether registered or not, and the goodwill of the business of such Person connected
with and symbolized thereby, copyright rights, copyright applications, copyright registrations and
like protections in each work of authorship and derivative works, whether published or unpublished,
know-how and processes, operating manuals, trade secrets, rights to unpatented inventions and all
applications and licenses therefor, used in or necessary for the conduct of business by such Person
and all claims for damages by way of any past, present or future infringement of any of the
foregoing.

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

     “IP Proceeds” has the meaning set forth in Schedule 9.1.

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

     “Lender” means each of (a) Merrill Lynch, in its capacity as a lender hereunder, (b) each
other Person party hereto in its capacity as a lender hereunder, (c) each other Person that becomes
a party hereto as Lender pursuant to Section 12.6, and (d) the respective successors of all of the
foregoing, and “Lenders” means all of the foregoing.

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

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

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

     “Loans” means the Term Loan and each and every advance under the Term Loan. All references
herein to the “making” of a Loan or words of similar import shall mean, with respect to the Term
Loan, the making of any advance in respect of a Term Loan.

     “Material Adverse Effect” means with respect to any event, act, condition or occurrence of
whatever nature (including any adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), whether singly or in conjunction with any other event or
events, act or acts, condition or conditions, occurrence or occurrences, whether or not related,
which cause a material adverse change in, or a material adverse effect upon, any of (i) the
condition (financial or otherwise), operations, business or properties of any of the Credit
Parties, (ii) the rights and remedies of Administrative Agent or Lenders under any Financing
Document, or the ability of any Credit Party to perform any of its material obligations under any
Financing Document to which it is a party, (iii) the legality, validity or enforceability of any
Financing Document, or (iv) the existence, perfection or priority of any security interest granted
in any Financing Document with respect to any material Collateral (including any material portion
of the Collateral taken as a whole).

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

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

     “Merrill Lynch” means Merrill Lynch Capital, a division of Merrill Lynch Business Financial
Services Inc., and its successors.

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

     “Notes” shall have the meaning set forth in Section 2.3.

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

     “Obligations” means all obligations, liabilities and indebtedness (monetary (including
post-petition interest, whether or not allowable or allowed) or otherwise) of each Credit Party
under this Agreement or any other Financing Document, in each case howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or
to become due.

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

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

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

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

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

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

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

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

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

     “Permits” means all governmental licenses, authorizations, provider numbers, supplier numbers,
registrations, permits, drug or device authorizations and approvals, certificates, franchises,
qualifications, accreditations, consents and approvals required under all applicable Laws and
required in order to carry on its business as now conducted.

8

 

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

     “Permitted Contest” means, with respect to any tax obligation or other obligation allegedly or
potentially owing from any Borrower to any governmental tax authority or other third party, a
contest maintained in good faith by appropriate proceedings promptly instituted and diligently
conducted and with respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made on the books and records and financial
statements of the applicable Borrower(s); provided, however, that (a) compliance with the
obligation that is the subject of such contest is effectively stayed during such challenge; (b)
Borrowers’ title to, and its right to use, the Collateral is not adversely affected thereby and
Administrative Agent’s Lien and priority on the Collateral are not adversely affected, altered or
impaired thereby; (c) Borrowers have given prior written notice to Administrative Agent of
Borrowers’ intent to so contest the obligation; (d) in the case of real estate taxes or assessments
or mechanic’s, workmen’s, materialmen’s or other like Liens with respect to any real estate which
is part of the Collateral, Borrowers have obtained an endorsement, in form and substance
satisfactory to Administrative Agent, to the loan policy of title insurance issued to
Administrative Agent insuring over any Lien created by such obligation, or Borrowers have deposited
with Administrative Agent a bond or other security satisfactory to Administrative Agent, in its
reasonable discretion, against loss or injury by reason of such contest or the non-payment of such
obligation or charge (and if such security is cash, Administrative Agent may, but shall not be
obligated to, deposit the same in an interest-bearing account and interest accrued thereon, if any,
shall be deemed to constitute a part of such security for purposes of this Agreement, but
Administrative Agent (i) makes no representation or warranty as to the rate or amount of interest,
if any, which may accrue thereon and shall have no liability in connection therewith and (ii) shall
not be deemed to be a trustee or fiduciary with respect to its receipt of any such security and any
such security may be commingled with other monies of Administrative Agent); (e) the Collateral or
any part thereof or any interest therein shall not be in any danger of being sold, forfeited or
lost by reason of such contest by Borrowers; (f) Borrowers have given Administrative Agent notice
of the commencement of such contest and upon request by Administrative Agent, from time to time,
notice of the status of such contest by Borrowers and/or confirmation of the continuing
satisfaction of this definition; and (g) upon a final determination of such contest, Borrowers
shall promptly comply with the requirements thereof.

     “Permitted Contingent Obligations” means: (a) Contingent Obligations arising in respect of
the Debt under the Financing Documents; (b) Contingent Obligations resulting from endorsements for
collection or deposit in the Ordinary Course of Business; (c) Contingent Obligations arising under
or with respect to any Permitted Contest or Permitted Liens; (d) Contingent Obligations outstanding
on the date of this Agreement and set forth on Schedule 5.1; (e) Contingent Obligations
incurred in the Ordinary Course of Business with respect to surety and appeal bonds, performance
bonds and other similar obligations not to exceed $25,000 in the aggregate at any time outstanding;
(f) Contingent Obligations arising under indemnity agreements with title insurers to cause such
title insurers to issue to Administrative Agent mortgagee title insurance policies with respect to
any real estate Collateral (if any); (g) Contingent Obligations arising with respect to customary
indemnification obligations in favor of purchasers in connection with dispositions permitted under
Section 5.6; (h) [RESERVED]; (i) [RESERVED]; and (j) other Contingent Obligations not permitted by
clauses (a) through (i) above, not to exceed $500,000 in the aggregate at any time outstanding.

     “Permitted Indebtedness” means: (a) Borrower’s Debt to Administrative Agent and each Lender
under this Agreement and the other Financing Documents; (b) Debt incurred as a result of endorsing
negotiable instruments received in the Ordinary Course of Business; (c) purchase money Debt not to
exceed $100,000 at any time (whether in the form of a loan or a lease) used solely to acquire
equipment used in the Ordinary Course of Business and secured only by such equipment; (d) Debt
existing on the date of this Agreement and described on Schedule 5.1 (but not including any
refinancings, extensions, increases or amendments to such Debt other than extensions of the
maturity thereof without any other change in terms); (e) [RESERVED]; (f) [RESERVED]; and (g) trade
accounts payable arising and paid on a timely basis and in the Ordinary Course of Business.

9

 

     “Permitted Investments” means: (a) Investments shown on Schedule 5.7 and existing on
the Closing Date; (b) (i) cash equivalents, and (ii) any similar short term Investments permitted
by Borrowers’ investment policy, as amended from time to time, provided that such investment policy
(and any such amendment thereto) has been reasonably approved in writing by Administrative Agent;
(c) Investments consisting of the endorsement of negotiable instruments for deposit or collection
or similar transactions in the Ordinary Course of Business; (d) Investments consisting of (i)
travel advances and employee relocation loans and other employee loans and advances in the Ordinary
Course of Business, and (ii) loans to employees, officers or directors relating to the purchase of
equity securities of Borrowers or their Subsidiaries pursuant to employee stock purchase plans or
agreements approved by Borrowers’ Board of Directors (or other governing body); (e) Investments
(including debt obligations) received in connection with the bankruptcy or reorganization of
customers or suppliers and in settlement of delinquent obligations of, and other disputes with,
customers or suppliers arising in the Ordinary Course of Business; (f) Investments consisting of
notes receivable of, or prepaid royalties and other credit extensions to, customers and suppliers
who are not Affiliates, in the Ordinary Course of Business; provided that this subpart (f) shall
not apply to Investments of Borrowers in any Subsidiary; (g) Investments consisting of deposit
accounts in which Administrative Agent has received a Deposit Account Control Agreement; (h)
Investments consisting of the acquisition of all or substantially all of the assets or capital
stock of another Person provided that, after giving effect to such acquisition, no Event of Default
has occurred and is continuing or would exist after giving effect to such acquisition, and such
acquisition would not result in a decrease of more than twenty percent (20%) of the Tangible Net
Worth of the Borrowers; (i) Investments by any Borrower in any other Borrower made in compliance
with Section 4.9(c); and (j) other Investments in an amount not exceeding $1,000,000 in the
aggregate, provided that, except to the extent Administrative Agent has agreed otherwise in
writing, “Permitted Investments” shall not include any assets that are issued outside of the United
States held by Borrower in a Securities Account if and to the extent that the applicable Securities
Account Control Agreement covering such Securities Account shall exclude such foreign assets from
the coverage of such Securities Account Control Agreement.

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

10

 

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

     “Permitted Transfers” means the collective reference to one or more transfers, via a sale and
not by pledge or hypothecation, as follows: (a) any holder of direct or indirect ownership or
voting interests in the Borrowers which is a partnership may transfer such holder’s rights to such
holder’s constituent partners, retired partners (including spouses, ancestors, lineal descendants
and siblings of such partners or spouses who acquire such interests by gift, will or intestate
succession) or their respective Affiliates, (b) any holder of direct or indirect ownership or
voting interests in the Borrowers which is a limited liability company may transfer such holder’s
right to such holder’s members, (c) any holder of direct or indirect ownership or voting interests
in the Borrowers which is a natural person may transfer such holder’s rights to any immediate
family member or to any trust created for the benefit of such holder or his or her immediate family
members, and (d) any holder of direct or indirect ownership or voting interests in the Borrowers
may transfer such holder’s rights to a Permitted Affiliate of such holder provided in each case
that no such transfer may be made to any Person that is a Blocked Person.

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

     “Prepayment Fee” shall have the meaning set forth in Section 2.2(g).

     “Principal Borrower” means Orexigen Therapeutics, Inc.

     “Pro Rata Share” means (a) with respect to a Lender’s obligation to make advances in respect
of the Term Loan and such Lender’s right to receive payments of principal and interest with respect
to the Term Loan, the Term Loan Commitment Percentage of such Lender, and (b) for all other
purposes with respect to any Lender, the percentage obtained by dividing (i) the sum of the Term
Loan Commitment Amount of such Lender (or, in the event the Term Loan Commitment shall have been
terminated, the then outstanding principal advances of such Lender under the Term Loan), by (ii)
the sum of the Term Loan Commitment Amount (or, in the event the Term Loan Commitment shall have
been terminated, the then outstanding principal advances of such Lenders under the Term Loan) of
all Lenders.

     “Required Lenders” means at any time Lenders holding (a) sixty-six and two thirds percent (66
2/3%) or more of the Term Loan Commitment, or (b) if the Term Loan Commitment has been terminated,
sixty-six and two thirds percent (66 2/3%) or more of the aggregate outstanding principal balance
of the Loans.

     “Responsible Officer” means any of the Chief Executive Officer or Chief Financial Officer of
the applicable Borrower.

     “Restricted Distribution” means as to any Person (a) any dividend or other distribution
(whether in cash, securities or other property) on any equity interest in such Person (except those
payable solely in its equity interests of the same class), (b) any payment on account of (i) the
purchase, redemption, retirement, defeasance, surrender, cancellation, termination or acquisition
of any equity interests in such Person or any claim respecting the purchase or sale of any equity
interest in such Person or (ii) any option, warrant or other right to acquire any equity interests
in such Person (c) any management fees, salaries or other fees or compensation to any Person
holding an equity interest in a Borrower or a Subsidiary of a Borrower (other than (A) payments of
salaries to individuals, (B) directors fees, (C) the issuance of stock options or restricted stock
to employees, consultants and board members,

11

 

and (D) advances and reimbursements to employees or directors, all in the Ordinary Course of
Business and consistent with past practices), an Affiliate of a Borrower or an Affiliate of any
Subsidiary of a Borrower, (d) any lease or rental payments to an Affiliate or Subsidiary of a
Borrower, or (e) repayments of or debt service on loans or other indebtedness held by any Person
holding an equity interest in a Borrower or a Subsidiary of a Borrower, an Affiliate of a Borrower
or an Affiliate of any Subsidiary of a Borrower unless permitted under and made pursuant to a
subordination agreement applicable to such loans or other indebtedness.

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

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

     “Securities Account Control Agreement” means an agreement, in form and substance reasonably
satisfactory to Administrative Agent, among Administrative Agent, any applicable Borrower and each
securities intermediary in which such Borrower maintains a Securities Account, which agreement
provides that (a) such securities intermediary acknowledges the security interest of Administrative
Agent in such Securities Account, (b) such securities intermediary shall comply with entitlement
orders and any other instructions originated by Administrative Agent directing disposition of the
assets and funds in such Securities Account without further consent by the applicable Borrower, and
(c) such securities intermediary shall agree that it shall have no Lien on, or right of setoff or
recoupment against, such Securities Account or the contents thereof, other than in respect of usual
and customary service fees and of returned items for which Administrative Agent has been given
value, in each such case expressly consented to by Administrative Agent, and containing such other
terms and conditions as Administrative Agent may require

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

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

     “Specified Merger” means a merger, consolidation or amalgamation of Principal Borrower with
any other Person which is not a Blocked Person provided that (i) the Principal Borrower is the
surviving entity, (ii) the holders of the equity interests in the Principal Borrower immediately
prior to such consolidation or merger or amalgamation represent more than fifty percent (50%) of
the aggregate outstanding equity interests of the Principal Borrower immediately following such
consolidation or merger or amalgamation and (iii) such consolidation or merger or amalgamation
would not result in a decrease of more than twenty percent (20%) of the Tangible Net Worth of the
Principal Borrower.

     “Stated Rate” shall have the meaning set forth in Section 2.7.

     “Subsidiary” means, with respect to any Person, (a) any corporation of which an aggregate of
more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of whether, at the
time, capital stock of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such Person, or with
respect to which any such Person has the right to vote or designate the vote of more than fifty
percent (50%) of

12

 

such capital stock whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more Subsidiaries of
such Person shall have an interest (whether in the form of voting or participation in profits or
capital contribution) of more than fifty percent (50%) or of which any such Person is a general
partner or may exercise the powers of a general partner. Unless the context otherwise requires,
each reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.

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

     “Taxes” has the meaning set forth in Section 2.7.

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

     “Term Loan Commitment” means the sum of each Lender’s Term Loan Commitment Amount, which is
equal to $17,000,000.

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

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

     “Term Note” means any Note evidencing any portion of the Term Loan.

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

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

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

     “United States” means the United States of America.

     Section 1.2. Accounting Terms and Determinations. Unless otherwise specified herein, all
accounting terms used herein shall be interpreted, all accounting determinations hereunder
(including, without limitation, determinations made pursuant to the exhibits hereto) shall be made,
and all financial statements required to be delivered hereunder shall be prepared on a consolidated
basis in accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of each Borrower and its consolidated subsidiaries delivered to
Administrative Agent and each of the Lenders on or prior to the Closing Date. If at any

13

 

time any change in GAAP would affect the computation of any financial ratio or financial
requirement set forth in any Financing Document, and either Borrowers or the Required Lenders shall
so request, the Administrative Agent, the Lenders and Borrowers shall negotiate in good faith to
amend such ratio or requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided, however, that until so amended,
(a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such
change therein and (b) Borrowers shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement which include a
reconciliation between calculations of such ratio or requirement made before and after giving
effect to such change in GAAP. All amounts used for purposes of financial calculations required to
be made herein shall be without duplication.

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

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

     Section 1.5. Riders. All Riders attached hereto are hereby incorporated herein by this
reference and made a part hereof.

ARTICLE 2 — LOANS AND LETTERS OF CREDIT

     Section 2.1. Loans.

     (a) Term Loans.

          (i) Term Loan Amounts. On the terms and subject to the conditions set forth herein, the
Lenders hereby agree to make to Borrowers a term loan in an original principal amount equal to the
Term Loan Commitment (“Term Loan”). Each Lender’s obligation to fund the Term Loan shall be
limited to such Lender’s Term Loan Commitment Percentage, and no Lender shall have any obligation
to fund any portion of any Term Loan required to be funded by any other Lender, but not so funded.
No Borrower shall have any right to reborrow any portion of the Term Loan that is repaid or prepaid
from time to time. The Term Loan may be funded in multiple advances in an aggregate amount not to
exceed the Term Loan Commitment, but no advances under the Term Loan shall be made after June 30,
2007, and any portion of the Term Loan Commitment not funded as of the close of business on such
June 30, 2007 shall thereupon automatically be terminated and the Term Loan Commitment Amount of
each Lender as of such date shall be reduced by such Lender’s Pro Rata Share of such total
reduction in the Term Loan Commitment. Lenders shall have no obligation to make more than one (1)
advance in respect of the Term Loan per calendar month and Lenders shall have no obligation to make
any advance of the Term Loan that is less than $1,000,000 (other than any final disbursement).
Borrowers shall deliver to Administrative Agent a Notice of Borrowing with respect to each proposed
Term Loan advance, such Notice of Borrowing to be delivered no later than 2:00 PM (Chicago time)
two (2) Business Days prior to such proposed borrowing. Notwithstanding anything to the contrary
provided for in the foregoing or otherwise in this Agreement, as of the close of business on March
31, 2007, if the total aggregate amount of all advances under the Term Loan requested by Borrowers
and funded by Lenders as of such date does not equal or exceed $10,000,000, then as of such date
the Term Loan Commitment

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shall be automatically reduced by an amount equal to the difference between $10,000,000 and
such total aggregate amount of all advances under the Term Loan made as of such date and the Term
Loan Commitment Amount of each Lender as of such date shall be reduced by such Lender’s Pro Rata
Share of such total reduction in the Term Loan Commitment.

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

               (A) There shall become due and payable, and Borrowers shall repay the Term Loan through,
scheduled payments as set forth on Schedule 2.1 attached hereto. Notwithstanding the payment
schedule set forth above, the outstanding principal amount of the Term Loan shall become
immediately due and payable in full on the Termination Date.

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

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

                    (ii) an amount equal to any interest that is deemed to be in excess of the Maximum Lawful Rate
(as defined below) and is required to be applied to the reduction of the principal balance of the
Loans by any Lender as provided for in Section 2.7;

                    (iii) upon receipt by any Credit Party of the proceeds of any asset disposition not made in
the Ordinary Course of Business or not pertaining to Inventory, an amount equal to one hundred
percent (100%) of the net cash proceeds of such asset disposition (net of out-of-pocket expenses
and repayment of secured debt permitted under clause (c) of the definition of Permitted
Indebtedness and encumbering such asset), or such lesser portion as Administrative Agent shall
elect to apply to the Obligations; provided that, for the avoidance of doubt, in this
Section 2.1(a)(ii)(B), “asset disposition” shall include any consideration, including up-front
payments and royalties or licensing fees paid over time, received by any Credit Party in connection
with any exclusive license entered into by such Credit Party as licensor with respect to any
Intellectual Property of such Credit Party; and

                    (iv) upon receipt by any Credit Party of any Extraordinary Receipts, an amount equal to one
hundred percent (100%) of such Extraordinary Receipts, or such lesser portion as Administrative
Agent shall elect to apply to the Obligations.

     Notwithstanding the foregoing and so long as no Event of Default or Default then exists, (i)
casualty proceeds in an amount up to $,1000,000 may be used by Borrowers within one hundred eighty
(180) days from the receipt of such proceeds to replace or repair any assets in respect of which
such proceeds were paid so long as (x) prior to the receipt of such proceeds, Borrowers have
delivered to Administrative Agent a reinvestment plan detailing such replacement or repair
acceptable to Administrative Agent in its reasonable discretion and (y) such proceeds are deposited
into an account with Administrative Agent promptly upon receipt by such Borrower and (2) proceeds
of asset dispositions not made in the Ordinary Course of Business may be used by Borrowers within
one hundred eighty (180) days from the receipt of such proceeds to purchase new or replacement
assets of comparable value so long as such proceeds are deposited into an account with
Administrative Agent promptly upon receipt by such Borrower (provided that, nothing
contained in the foregoing shall be deemed under any circumstances to constitute a consent by
Administrative Agent and/or any Lender regarding any such asset dispositions not made in the
Ordinary Course of Business which is not otherwise permitted under the terms of this Agreement nor
to establish any expectation or course of dealing or conduct binding upon Administrative Agent
and/or any Lender that any such consent with respect to any such asset dispositions not made in the
Ordinary Course of Business not otherwise permitted under the terms of this Agreement be given).
All sums held by Administrative Agent pending reinvestment as described the foregoing sentence
shall be deemed additional collateral for the Obligations and may
be commingled with the general funds of Administrative Agent.

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               (C) Borrowers may from time to time, with at least two (2) Business Days prior delivery to
Administrative Agent of an appropriately completed Payment Notification, prepay any advance(s)
under Term Loan in whole or in part; provided, however, that each such prepayment shall be
accompanied by any Prepayment Fees and Exit Fees required hereunder and that each such partial
prepayment must be in a minimum amount of at least $5,000,000.

          (iii) All Prepayments. Except as this Agreement may specifically provide otherwise, all
prepayments of the Term Loan shall be applied by Administrative Agent to the regularly scheduled
repayments to become due on the Term Loan in accordance with Schedule 2.1, with such proceeds to be
applied first to the satisfaction of the regularly scheduled repayment with the latest due date
then outstanding, and after repayment in full of such installment then to the next regularly
scheduled repayments with the next latest due date then outstanding, and so on until the entire
amount of such prepayment shall have been so applied. The monthly payments required under Schedule
2.1 shall continue in the same amount (for so long as the Term Loan and/or (if applicable) any
advance thereunder shall remain outstanding) notwithstanding any partial prepayment, whether
mandatory or optional, of the Term Loan. Notwithstanding anything to the contrary contained in the
foregoing, in the event that there have been multiple advances under the Term Loan each of which
such advances has a separate amortization schedule of principal payments under Schedule 2.1
attached hereto, each prepayment of the Term Loan shall be applied by Administrative Agent to
reduce and prepay the principal balance of the earliest-made advance then outstanding in the manner
described in the first sentence of this paragraph (iii) with respect to such advance until such
earliest-made advance is paid in full (and to the extent the total amount of any such partial
prepayment shall exceed the outstanding principal balance of such earliest-made advance, the
remainder of such prepayment shall be applied successively to the remaining advances under the Term
Loan in the direct order of the respective advance dates in the manner provided for in this
sentence).

     (b) [RESERVED]

     Section 2.2. Interest, Interest Calculations and Certain Fees.

     (a) Interest. From and following the Closing Date, the Loans and the other Obligations shall
bear interest at the sum of the Base Rate plus the applicable Base Rate Margin (provided that, in
the case of any Obligations other than the Loans, such Obligations shall bear interest as of any
date at the highest rate applicable to any of the advances under the Term Loan outstanding on such
date), subject to the provisions of Section 10.4 below regarding default rates of interest.
Interest on the Loans shall be paid in arrears on the first (1st) day of each month and on the
maturity of such Loans, whether by acceleration or otherwise. Interest on all other Obligations
shall be payable on demand and upon the Termination Date. For purposes of calculating interest,
all funds transferred from the Payment Account for application to the Term Loan shall be subject to
a two (2) Business Day clearance period.

     (b) [RESERVED].

     (c) [RESERVED].

     (d) Commitment Fee. Contemporaneous with Borrowers execution of this Agreement, Borrowers
shall pay Administrative Agent, for its own account and not for the benefit of any other Lenders, a
fee in an amount equal to the Term Loan Commitment multiplied by one-half of one percent (0.50%).
All fees payable pursuant to this paragraph shall be deemed fully earned and non-refundable as of
the Closing Date.

     (e) [RESERVED].

     (f) Exit Fee. Upon repayment of the Term Loan in full for any reason and at any time
(whether by voluntary prepayment by Borrowers, by reason of the occurrence of an Event of Default,
upon the maturity of the Term Loan, or otherwise), Borrowers shall pay to Administrative Agent for
the benefit of all Lenders committed to

16

 

make Term Loan advances, as compensation for the costs of making funds available to Borrowers
under this Agreement, an exit fee (the “Exit Fee”) calculated in accordance with this subsection.
The total Exit Fee due under this Agreement shall be equal to the greater of (x) an amount equal to
(1) the total aggregate original principal amount of all advances under the Term Loan requested by
Borrowers and funded by Lenders under Section 2.1(a) above multiplied by (2) five percent (5.00%)
and (y) $500,000. All fees payable pursuant to this paragraph shall be deemed fully earned and
non-refundable as of the Closing Date.

     (g) Prepayment Fee. If any advance under the Term Loan is prepaid at any time, in
whole or in part, for any reason (whether by voluntary prepayment by Borrowers, by reason of the
occurrence of an Event of Default, or otherwise) prior to its scheduled maturity date as provided
for under Schedule 2.1 attached hereto, or if the Term Loan shall become accelerated and due and
payable in full prior to the Commitment Expiry Date, Borrowers shall pay to Administrative Agent,
for the benefit of all Lenders committed to make Term Loan advances, as compensation for the costs
of such Lenders making funds available to Borrowers under this Agreement, a prepayment fee (the
“Prepayment Fee”) calculated in accordance with this subsection. The Prepayment Fee shall be equal
to three percent (3.00%) of the amount prepaid at any time. The Prepayment Fee shall not apply to
or be assessed upon any prepayment made by Borrowers if such payments were required by
Administrative Agent to be made pursuant to Section 2.1(a)(ii)(B) subpart (i) (relating to casualty
proceeds), subpart (ii) (relating to payments exceeding the Maximum Lawful Rate), subpart (iii)
(relating to asset dispositions) (unless, in the case of such subpart (iii), Borrower and
Administrative Agent and Lenders have agreed otherwise in connection with any consent granted by
Administrative Agent and/or Lenders to any asset dispositions not otherwise permitted under this
Agreement) or subpart (iv) (relating to Extraordinary Receipts). All fees payable pursuant to this
paragraph shall be deemed fully earned and non-refundable as of the Closing Date.

     (h) Audit Fees. Borrowers shall pay to Administrative Agent, for its own account and not for
the benefit of any other Lenders, all reasonable fees and expenses in connection with audits of
Borrowers’ books and records, audits, valuations or appraisals of the Collateral, audits of
Borrowers’ compliance with applicable Laws and such other matters as Administrative Agent shall
deem appropriate, which shall be due and payable on the first Business Day of the month following
the date of issuance by Administrative Agent of a written request for payment thereof to Borrowers;
provided, that so long as no Event of Default or Default has occurred, Borrowers shall be liable
for such fees and expenses for no more than one (1) such audits in any given calendar year.

     (i) Wire Fees. Borrowers shall pay to Administrative Agent, for its own account and not for
the account of any other Lenders, on written demand, any and all fees, costs or expenses which
Administrative Agent pays to a bank or other similar institution (including, without limitation,
any fees paid by Administrative Agent to any other Lender) arising out of or in connection with (i)
the forwarding to Borrowers or any other Person on behalf of Borrowers, by Administrative Agent, of
proceeds of the Loans made by any Lender to Borrowers pursuant to this Agreement, and (ii) the
depositing for collection, by Administrative Agent, of any check or item of payment received or
delivered to Administrative Agent on account of Obligations.

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

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

     (l) Automated Clearing House Payments. If Administrative Agent so elects, monthly payments of
interest and amortization shall be paid to Administrative Agent by Automated Clearing House debit
of immediately available funds from the financial institution account designated by Borrower
Representative in the Automated Clearing House debit authorization executed by Borrowers or
Borrower Representative in connection with this Agreement, and shall be effective upon receipt.
Borrowers shall execute any and all forms and documentation

17

 

necessary from time to time to effectuate such automatic debiting. In no event shall any such
payments be refunded to Borrowers.

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

     Section 2.4. [RESERVED].

     Section 2.5. [RESERVED].

     Section 2.6. General Provisions Regarding Payment; Loan Account.

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

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

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

18

 

(other than interest) payable hereunder, and if no such principal or other amounts are then
outstanding, such excess or part thereof remaining shall be paid to Borrowers. Any such reduction
in the principal balance shall be applied to the Obligations owing to Lenders in accordance with
the Pro Rata Share of each Lender. In computing interest payable with reference to the Maximum
Lawful Rate applicable to any Lender, such interest shall be calculated at a daily rate equal to
the Maximum Lawful Rate divided by the number of days in the year in which such calculation is
made.

     Section 2.8. Taxes; Capital Adequacy.

     (a) All payments of principal and interest on the Loans and all other amounts payable
hereunder shall be made free and clear of and without deduction for any present or future income,
excise, stamp, documentary, payroll, employment, property or franchise taxes and other taxes, fees,
duties, levies, assessments, withholdings or other charges of any nature whatsoever (including
interest and penalties thereon) imposed by any taxing authority, excluding taxes imposed on or
measured by Administrative Agent’s or any Lender’s net income by the jurisdictions under which
Administrative Agent or such Lender is organized or conducts business (other than solely as the
result of entering into any of the Financing Documents or taking any action thereunder) (all
non-excluded items being called “Taxes”). If any withholding or deduction from any payment to be
made by any Borrower hereunder is required in respect of any Taxes pursuant to any applicable Law,
then Borrowers will: (i) pay directly to the relevant authority the full amount required to be so
withheld or deducted; (ii) promptly forward to Administrative Agent an official receipt or other
documentation satisfactory to Administrative Agent evidencing such payment to such authority; and
(iii) pay to Administrative Agent for the account of Administrative Agent and Lenders such
additional amount or amounts as is necessary to ensure that the net amount actually received by
Administrative Agent and each Lender will equal the full amount Administrative Agent and such
Lender would have received had no such withholding or deduction been required. If any Taxes are
directly asserted against Administrative Agent or any Lender with respect to any payment received
by Administrative Agent or such Lender hereunder, Administrative Agent or such Lender may pay such
Taxes and Borrowers will promptly pay such additional amounts (including any penalty, interest or
expense) as is necessary in order that the net amount received by such Person after the payment of
such Taxes (including any Taxes on such additional amount) shall equal the amount such Person would
have received had such Taxes not been asserted so long as such amounts have accrued on or after the
day which is two hundred seventy (270) days prior to the date on which Administrative Agent or such
Lender first made written demand therefor.

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

     (c) Each Lender that (i) is organized under the laws of a jurisdiction other than the United
States, and (ii)(A) is a party hereto on the Closing Date or (B) purports to become an assignee of
an interest as a Lender under this Agreement after the Closing Date (unless such Lender was already
a Lender hereunder immediately prior to such assignment) (each such Lender a “Foreign Lender”)
shall execute and deliver to each of Borrowers and Administrative Agent one or more (as Borrowers
or Administrative Agent may reasonably request) United States Internal Revenue Service Forms W-8EW,
W-8BEN, W-8IMY (as applicable) and other applicable forms, certificates or documents prescribed by
the United States Internal Revenue Service or reasonably requested by Administrative Agent
certifying as to such Lender’s entitlement to a complete exemption from withholding or deduction of
Taxes. Borrowers shall not be required to pay additional amounts to any Lender pursuant to this
Section 2.7 with respect to United States withholding and income Taxes to the extent that the
obligation to pay such additional amounts would not have arisen but for the failure of such Lender
to comply with this paragraph other than as a result of a change in law.

     (d) If any Lender shall determine in its commercially reasonable judgment that the adoption or
taking effect of, or any change in, any applicable Law regarding capital adequacy, in each
instance, after the Closing Date, or any change after the Closing Date in the interpretation,
administration or application thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation, administration or application thereof, or the compliance by
any Lender or any Person controlling such Lender with any request,

19

 

guideline or directive regarding capital adequacy (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency adopted or otherwise taking
effect after the Closing Date, has or would have the effect of reducing the rate of return on such
Lender’s or such controlling Person’s capital as a consequence of such Lender’s obligations
hereunder to a level below that which such Lender or such controlling Person could have achieved
but for such adoption, taking effect, change, interpretation, administration, application or
compliance (taking into consideration such Lender’s or such controlling Person’s policies with
respect to capital adequacy) then from time to time, upon written demand by such Lender (which
demand shall be accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be furnished to
Administrative Agent), Borrowers shall promptly pay to such Lender such additional amount as will
compensate such Lender or such controlling Person for such reduction, so long as such amounts have
accrued on or after the day which is two hundred seventy (270) days prior to the date on which such
Lender first made demand therefor.

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

     Section 2.9. Appointment of Borrower Representative. Each Borrower hereby designates Borrower
Representative as its representative and agent on its behalf for the purposes of issuing Notices of
Borrowing, and giving instructions with respect to the disbursement of the proceeds of the Loans,
giving and receiving all other notices and consents hereunder or under any of the other Financing
Documents and taking all other actions (including in respect of compliance with covenants) on
behalf of any Borrower or Borrowers under the Financing Documents. Borrower Representative hereby
accepts such appointment. Notwithstanding anything to the contrary contained in this Agreement, no
Borrower other than Borrower Representative shall be entitled to take any of the foregoing actions.
The proceeds of each Loan made hereunder shall be advanced to or at the direction of Borrower
Representative and if not used by Borrower Representative in its business (for the purposes
provided in this Agreement) shall be deemed to be immediately advanced by Borrower Representative
to the appropriate other Borrower hereunder as an intercompany loan (collectively, “Intercompany
Loans”). All proceeds of Collateral of each Borrower received by Administrative Agent and applied
to the Obligations shall be deemed to be repayments of the Intercompany Loans owing by such
Borrower to Borrower Representative. Borrowers shall maintain accurate books and records with
respect to all Intercompany Loans and all repayments thereof. Administrative Agent and each Lender
may regard any notice or other communication pursuant to any Financing Document from Borrower
Representative as a notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or all Borrowers hereunder to
Borrower Representative on behalf of such Borrower or all Borrowers. Each Borrower agrees that
each notice, election, representation and warranty, covenant, agreement and undertaking made on its
behalf by Borrower Representative shall be deemed for all purposes to have been made by such
Borrower and shall be binding upon and enforceable against such Borrower to the same extent as if
the same had been made directly by such Borrower.

     Section 2.10. Joint and Several Liability. Borrowers are defined collectively to include all
Persons named as one of the Borrowers herein; provided, however, that any references herein to “any
Borrower”, “each Borrower” or similar references, shall be construed as a reference to each
individual Person named as one of the Borrowers herein. Each Person so named shall be jointly and
severally liable for all of the obligations of Borrowers under this Agreement. Each Borrower,
individually, expressly understands, agrees and acknowledges, that the credit facilities would not
be made available on the terms herein in the absence of the collective credit of all of the Persons
named as the Borrowers herein, the joint and several liability of all such Persons, and the
cross-collateralization of the collateral of all such Persons. Accordingly, each Borrower,
individually acknowledges that the benefit to each of the Persons named as one of the Borrowers as
a whole constitutes reasonably equivalent value, regardless of the amount of the credit facilities
actually borrowed by, advanced to, or the amount of collateral provided by, any

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individual Borrower. In addition, each entity named as one of the Borrowers herein hereby
acknowledges and agrees that all of the representations, warranties, covenants, obligations,
conditions, agreements and other terms contained in this Agreement shall be applicable to and shall
be binding upon and measured and enforceable individually against each Person named as one of the
Borrowers herein as well as all such Persons when taken together. By way of illustration, but
without limiting the generality of the foregoing, the terms of Section 10.1 of this Agreement are
to be applied to each individual Person named as one of the Borrowers herein (as well as to all
such Persons taken as a whole), such that the occurrence of any of the events described in Section
10.1 of this Agreement as to any Person named as one of the Borrowers herein shall constitute an
Event of Default even if such event has not occurred as to any other Persons named as the Borrowers
or as to all such Persons taken as a whole.

     Section 2.11. [RESERVED].

ARTICLE 3 — REPRESENTATIONS AND WARRANTIES

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

     Section 3.1. Existence and Power. Each Credit Party is an entity as specified on Schedule
3.1, is duly organized, validly existing and in good standing under the laws of the
jurisdiction specified on Schedule 3.1 and no other jurisdiction, has the same legal name
as it appears in such Credit Party’s Organizational Documents and an organizational identification
number (if any), in each case as specified on Schedule 3.1 (except to the extent of any
change in the foregoing information as to any Credit Party following the Closing Date so long as
such change was made and notice of such change was given to Administrative Agent in accordance with
Section 9.2(d)) and has all powers and all Permits necessary or desirable in the operation of its
business as presently conducted or as proposed to be conducted, except where the failure to have
such Permits could not reasonably be expected to have a Material Adverse Effect. Each Credit Party
is qualified to do business as a foreign entity in each jurisdiction in which it is required to be
so qualified, which jurisdictions as of the Closing Date are specified on Schedule 3.1,
except where the failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 3.1, no Credit Party, over the five (5)
year period preceding the Closing Date, (a) has had any name other than its current name, or (b)
was incorporated or organized under the laws of any jurisdiction other than its current
jurisdiction of incorporation or organization.

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

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

     Section 3.4. Capitalization. The authorized equity securities of each of the Credit Parties
as of the Closing Date is as set forth on Schedule 3.4. All issued and outstanding equity
securities of each of the Credit Parties are duly authorized and validly issued, fully paid and
nonassessable, and, in the case of all Credit Parties other than Principal Borrower, are free and
clear of all Liens other than those in favor of Administrative Agent for the benefit of
Administrative Agent and Lenders, and such equity securities were issued in compliance with all
applicable Laws. The identity of the holders of the equity securities of each of the Credit
Parties and the percentage of their fully-diluted ownership of the equity securities of each of the
Credit Parties as of the Closing Date is set forth on Schedule 3.4. No shares of the
capital stock or other equity securities of any Credit Party, other than those

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described above, are issued and outstanding as of the Closing Date. Except as set forth on
Schedule 3.4, as of the Closing Date there are no preemptive or other outstanding rights,
options, warrants, conversion rights or similar agreements or understandings for the purchase or
acquisition from any Credit Party of any equity securities of any such entity. Except as set forth
on Schedule 3.4, none of the authorized and/or issued capital stock or other equity
securities of any Credit Party are subject to any mandatory repurchase or redemption provisions or
put rights in favor of any holder thereof (not including any repurchase or redemption provisions
exercisable solely at the option of such Credit Party) or otherwise constitute Debt under the
definition set forth herein or are subject to any provisions requiring the mandatory payment of any
dividends at any time (not including any specified dividends which accrue at specified times but
which are payable only as, when and if declared by the board of directors or other similar
governance body or manager or partner of such Credit Party and/or upon liquidation of such Credit
Party).

     Section 3.5. Financial Information. All information delivered to Administrative Agent and
pertaining to the financial condition of any Credit Party fairly presents the financial position of
such Credit Party as of the date of such information in conformity with GAAP (and as to unaudited
financial statements, subject to normal year end adjustments and the absence of footnote
disclosures). Since December 31, 2005, there has been no material adverse change in the business,
operations, properties, prospects or condition (financial or otherwise) of any Credit Party.

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

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

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

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

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

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

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     Section 3.12. Compliance With Laws; Anti-Terrorism Laws.

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

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

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

     Section 3.14. Compliance with ERISA.

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

     (b) During the thirty-six (36) month period prior to the Closing Date or the making of any
Loan, (i) no steps have been taken to terminate any Pension Plan and (ii) no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section
302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any
Pension Plan which could result in the incurrence by any Credit Party of any material liability,
fine or penalty. No Credit Party has incurred liability to the PBGC (other than for current
premiums) with respect to any employee Pension Plan. All contributions (if any) have been made on
a timely basis to any Multiemployer Plan that are required to be made by any Credit Party or any
other member of the Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable Law; no Credit Party nor any member of the Controlled Group has
withdrawn or partially withdrawn from any Multiemployer Plan, incurred any withdrawal liability
with respect to any such plan or received notice of any claim or demand for withdrawal liability or
partial withdrawal liability from any such plan, and no condition has occurred which, if continued,
could result in a withdrawal or partial withdrawal from any such plan, and no Credit Party nor any
member of the Controlled Group has received any notice that any Multiemployer Plan is in
reorganization, that increased contributions may be required to avoid a reduction in plan benefits
or the imposition of any excise tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is or may be terminated, or that
any such plan is or may become insolvent.

     Section 3.15. Consummation of Operative Documents; Brokers. Except for fees payable to
Administrative Agent and/or Lenders, no broker, finder or other intermediary has brought about the
obtaining, making or closing of the transactions contemplated by the Operative Documents, and no
Credit Party has or will

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have any obligation to any Person in respect of any finder’s or brokerage fees, commissions or
other expenses in connection herewith or therewith. All brokerage and finder’s fees, commissions
and other expenses payable in connection with the transactions contemplated by the Operative
Documents have been paid in full by Borrowers contemporaneously with the execution of the Financing
Documents and the initial funding of the Loan.

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

     Section 3.17. Material Contracts. Except for the Operative Documents and the other agreements
set forth on Schedule 3.17 (collectively with the Operative Documents, the “Material
Contracts”), as of the Closing Date there are no (a) employment agreements covering the management
of any Credit Party, (b) collective bargaining agreements or other similar labor agreements
covering any employees of any Credit Party, (c) agreements for managerial, consulting or similar
services to which any Credit Party is a party or by which it is bound, (d) agreements regarding any
Credit Party, its assets or operations or any investment therein to which any of its equityholders
is a party or by which it is bound (not including agreements relating solely to the sale or grant
of equity interests without any provisions dealing with rights or obligations binding on such
purchasers or grantees to consent to particular transactions by such Credit Party (other than
standard provisions describing the voting rights of the equity interests being sold so long as such
voting rights are identical to the rights of all other equity interests of the same class as such
equity interests being sold) or other such similar provisions more typically found in a
“shareholders agreement”), (e) real estate leases, Intellectual Property licenses or other lease or
license agreements to which any Credit Party is a party, either as lessor or lessee, or as licensor
or licensee (other than licenses arising from the purchase of “off the shelf” or commercially
available products), or (f) customer, distribution, marketing or supply agreements to which any
Credit Party is a party, (g) partnership agreements to which any Credit Party is a general partner
or joint venture agreements to which any Credit Party is a party, (h) third party billing
arrangements to which any Credit Party is a party, or (i) any other agreements or instruments to
which any Credit Party is a party, and the breach, nonperformance or cancellation of which, or the
failure of which to renew, could reasonably be expected to have a Material Adverse Effect (provided
that, in each case with respect to the preceding clauses (a), (c), (d), (e) and (f), no such
agreement or contract shall be included unless payments by the applicable Credit Party of more than
$50,000 in any year is required or reasonably anticipated with respect to such contract or
agreement). Schedule 3.17 sets forth, with respect to each real estate lease agreement to
which any Borrower is a party (as a lessee) as of the Closing Date, the address of the subject
property, the name and address of the landlord and the annual rental (or, where applicable, a
general description of the method of computing the annual rental). The consummation of the
transactions contemplated by the Financing Documents and the other Operative Documents will not
give rise to a right of termination in favor of any party to any Material Contract (other than any
Credit Party).

     Section 3.18. Compliance with Environmental Requirements; No Hazardous Materials.

     Except in each case as set forth on Schedule 3.18:

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

     (b) no property now owned or leased by any Credit Party and, to the knowledge of each
Borrower, no such property previously owned or leased by any Credit Party, on which any Credit
Party has generated, stored or disposed of or to which any Credit Party has, directly or
indirectly, transported or arranged for the transportation of, any Hazardous Materials, is listed
or, to such Borrower’s knowledge, proposed for listing, on the National Priorities

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List promulgated pursuant to CERCLA, or CERCLIS (as defined in CERCLA) or any similar state
list or is the subject of federal, state or local enforcement actions or, to the knowledge of such
Borrower, other investigations which may lead to claims against any Credit Party for clean-up
costs, remedial work, damage to natural resources or personal injury claims, including, without
limitation, claims under CERCLA.

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

     Section 3.19. Intellectual Property. Each Credit Party owns, is licensed to use or otherwise
has the right to use, all Intellectual Property that is material to the condition (financial or
other), business or operations of such Credit Party. All Intellectual Property existing as of the
Closing Date and registered with any United States or foreign Governmental Authority (including
without limitation any and all applications for the registration of any Intellectual Property with
any such United States or foreign Governmental Authority) and all licenses under which any Borrower
is the licensee of any such registered Intellectual Property (or any such application for the
registration of Intellectual Property) owned by another Person (other than “off the shelf” or
commercially available Intellectual Property) are set forth on Schedule 3.19. Such Schedule 3.19
indicates in each case whether such registered Intellectual Property (or application therefore) is
owned or licensed by such Credit Party, and in the case of any such licensed registered
Intellectual Property (or application therefore), lists the name and address of the licensor and
the name and date of the agreement pursuant to which such item of Intellectual Property is licensed
and whether or not such license is an exclusive license and indicates whether there are any
purported restrictions in such license on the ability of such Credit Party to grant a security
interest in and/or to transfer any of its rights as a licensee under such license. Except as
indicated on Schedule 3.19, the applicable Credit Party is the sole and exclusive owner of the
entire and unencumbered right, title and interest in and to each such registered Intellectual
Property (or application therefore) purported to be owned by such Borrower, free and clear of any
Liens and/or licenses in favor of third parties or agreements or covenants not to sue third parties
for infringement. All Intellectual Property of each Credit Party is protected and/or duly and
properly registered, filed or issued in the appropriate office and jurisdictions for such
registrations, filings or issuances, except where the failure to do so would not reasonably be
expected to have a Material Adverse Effect. To such Borrower’s actual knowledge, each Credit Party
conducts its business without infringement or claim of infringement of any Intellectual Property
rights of others and there is no infringement or claim of infringement by others of any
Intellectual Property rights of any Credit Party, which infringement or claim of infringement could
reasonably be expected to have a Material Adverse Effect.

     Section 3.20. Solvency. Each Borrower and each additional Credit Party is Solvent.

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

     Section 3.22. Interest Rate. The rate of interest paid under the Notes and the method and
manner of the calculation thereof do not violate any of the Organizational Documents or any of the
Operative Documents. Assuming that the proceeds of the Loans will be used for the purposes
permitted in Section 4.7 below and also assuming that the Lender is a licensee under the California
Finance Lenders Law, Cal. Fin. Code sec 22000, et. seq,, the rate of interest paid under the Notes
and the method and manner of the calculation thereof do not violate any applicable Laws (including
any usury law).

     Section 3.23. Subsidiaries. Borrowers do not own any stock, partnership interests, limited
liability company interests or other equity securities except for Permitted Investments.

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

ARTICLE 4 — AFFIRMATIVE COVENANTS

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

     Section 4.1. Financial Statements and Other Reports. Each Borrower will deliver to
Administrative Agent: (1) as soon as available, but no later than forty-five (45) days after the
last day of each fiscal quarter, a company prepared consolidated balance sheet, cash flow and
income statement covering Borrower’s consolidated operations during the period, prepared under
GAAP, consistently applied, certified by a Responsible Officer and in a form acceptable to
Administrative Agent, (2) as soon as available, but no later than ninety (90) days after the last
day of Borrower’s fiscal year, audited consolidated financial statements prepared under GAAP,
consistently applied, together with an unqualified opinion on the financial statements from an
independent certified public accounting firm acceptable to Administrative Agent in its reasonable
discretion; (3) on a monthly basis promptly following receipt thereof from the applicable financial
institutions, copies of the account statements for all of Borrowers’ Deposit Accounts and
Securities Account; (4) within five (5) days of delivery or filing thereof, copies of all
statements, reports and notices made available to Borrower’s security holders and copies of all
reports and other filings made by Borrower with any stock exchange on which any securities of any
Borrower are traded and/or the SEC; (5) a prompt report of any legal actions pending or threatened
against Borrower or any of its Subsidiaries that could result in damages or costs to Borrower or
any of its Subsidiaries of Fifty Thousand Dollars ($50,000) or more; (6) prompt written notice of
an event that materially and adversely affects the value of any Intellectual Property; (7) within
ten (10) days of Principal Borrower’s receipt thereof, a copy of any notice received by Principal
Borrower from the required number of holders of the Series A Preferred Stock and Series B Preferred
Stock of the Principal Borrower stating that such holders have elected to invoke any of their
rights requiring the Principal Borrower to manditorily redeem any or all of such Series A Preferred
Stock and Series B Preferred Stock of the Principal Borrower, and (8) budgets, sales projections,
operating plans and other financial information and information, reports or statements regarding
the Borrowers, their business and the Collateral as Administrative Agent may from time to time
reasonably request. Each Borrower will, in conjunction with the delivery of each set of financial
statements required under clauses (1) and (2) above, deliver to Administrative Agent with a duly
completed Compliance Certificate signed by a Responsible Officer, which shall inter alia, set forth
calculations showing compliance with the financial covenants set forth in this Agreement, if any.

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

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

     Section 4.4. Maintenance of Property; Insurance.

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

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

     (c) Each Borrower will maintain, and will cause each Subsidiary to maintain, (i) all insurance
described on Schedule 4.4, upon the terms and with the coverages and rights in favor of
Administrative Agent and Lenders as described in Schedule 4.4, and (ii) such other
insurance coverage in such amounts and with respect to such risks as Administrative Agent may
reasonably from time to time request provided, however, that, in no event shall such insurance be
in amounts or with coverage less than, or with carriers with qualifications inferior to, any of the
insurance or carriers in existence as of the Closing Date (or required to be in existence after the
Closing Date under a Financing Document), as evidenced by the insurance certificates attached
hereto as Schedule 4.4. All such insurance shall be provided by insurers having an A.M.
Best policyholders rating reasonably acceptable to Administrative Agent.

     (d) On or prior to the Closing Date, and at all times thereafter, each Borrower will cause
Administrative Agent to be named as an additional insured, assignee and lender loss payee (which
shall include, as applicable, identification as mortgagee), as applicable, on each insurance policy
required to be maintained pursuant to this Section 4.4 pursuant to endorsements in form and content
acceptable to Administrative Agent. Borrowers will deliver to Administrative Agent and the Lenders
(i) on the Closing Date, a certificate from Borrowers’ insurance broker dated such date showing the
amount of coverage as of such date, and that such policies will include effective waivers (whether
under the terms of any such policy or otherwise) by the insurer of all claims for insurance
premiums against all loss payees and additional insureds and all rights of subrogation against all
loss payees and additional insureds, and that if all or any part of such policy is canceled,
terminated or expires, the insurer will forthwith give notice thereof to each additional insured,
assignee and loss payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least thirty (30) days after receipt by each
additional insured, assignee and loss payee of written notice thereof, (ii) upon the request of any
Lender through Administrative Agent from time to time full information as to the insurance carried,
(iii) within five (5) days of receipt of notice from any insurer, a copy of any notice of
cancellation, nonrenewal or material change in coverage from that existing on the date of this
Agreement, and (iv) forthwith, notice of any cancellation or nonrenewal of coverage by any
Borrower.

     (e) In the event any Borrower fails to provide Administrative Agent with evidence of the
insurance coverage required by this Agreement, Administrative Agent may (but shall have no
obligation to) purchase insurance at Borrowers’ expense to protect Administrative Agent’s interests
in the Collateral, and the costs and expenses of Administrative Agent in obtaining and paying the
premiums on any such insurance shall constitute part of the Obligations for which the Borrowers are
jointly and severally liable hereunder and which are secured by the Collateral.

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

     Section 4.6. Inspection of Property, Books and Records. Each Borrower will keep, and will
cause each Subsidiary to keep, proper books of record substantially in accordance with GAAP in
which full, true and correct entries shall be made of all dealings and transactions in relation to
its business and activities; and will permit, and will cause each Subsidiary to permit, at the sole
cost of Borrowers, representatives of Administrative Agent and of any Lender (but at such Lender’s
expense unless such visit or inspection is made concurrently with

27

 

Administrative Agent) to visit and inspect any of their respective properties, to examine and
make abstracts or copies from any of their respective books and records, to conduct a collateral
audit and analysis of their respective operations and the Collateral, to verify the amount and age
of the Accounts, the identity and credit of the respective Account Debtors, to review the billing
practices of Borrower and to discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants as often as may reasonably be
desired. In the absence of an Event of Default, Administrative Agent or any Lender exercising any
rights pursuant to this Section 4.6 shall give the applicable Borrower or any applicable Subsidiary
commercially reasonable prior notice of such exercise. No notice shall be required during the
existence and continuance of any Event of Default or any time during which Administrative Agent
reasonably believes an Event of Default exists.

     Section 4.7. Use of Proceeds. No portion of the proceeds of the Loans will be used for
family, personal, agricultural or household use.

     Section 4.8. Estoppel Certificates. After written request by Administrative Agent, Borrowers,
within fifteen (15) days and at their expense, will furnish Administrative Agent with a statement,
duly acknowledged and certified, setting forth (a) the amount of the original principal amount of
the Notes, and the unpaid principal amount of the Notes, (b) the rate of interest of the Notes, (c)
the date payments of interest and/or principal were last paid, (d) any offsets or defenses to the
payment of the Obligations, and if any are alleged, the nature thereof, (e) that the Notes and this
Agreement have not been modified or if modified, giving particulars of such modification, and (f)
that there has occurred and is then continuing no Default or Event of Default or if such Default or
Event of Default exists, the nature thereof, the period of time it has existed, and the action
being taken to remedy such Default or Event of Default.

     Section 4.9. Notices of Litigation and Defaults.

     (a) Borrowers will give prompt written notice to Administrative Agent of any litigation or
governmental proceedings pending or threatened (in writing) against Borrowers or other Credit Party
which would reasonably be expected to have a Material Adverse Effect with respect to Borrowers or
any other Credit Party.

     (b) Without limiting or contradicting any other more specific provision of this Agreement,
promptly (and in any event within three (3) Business Days) upon any Borrower becoming aware of the
existence of any Default or Event of Default, Borrowers shall give written notice to Administrative
Agent of such occurrence, which such notice shall include a reasonably detailed description of such
Default or Event of Default.

     Section 4.10. Hazardous Materials; Remediation.

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

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

     Section 4.11. Further Assurances.

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     (a) Each Borrower will, and will cause each Subsidiary to, at its own cost and expense, cause
to be promptly and duly taken, executed, acknowledged and delivered all such further acts,
documents and assurances as may from time to time be necessary or as Administrative Agent or the
Required Lenders may from time to time reasonably request in order to carry out the intent and
purposes of the Financing Documents and the transactions contemplated thereby, including all such
actions to (i) establish, create, preserve, protect and perfect a first priority Lien (subject only
to Permitted Liens) in favor of Administrative Agent for the benefit of the Lenders on the
Collateral (including Collateral acquired after the date hereof), and (ii) unless Administrative
Agent shall agree otherwise in writing, cause all Subsidiaries of Borrowers to be jointly and
severally obligated with the other Borrowers under all covenants and obligations under this
Agreement, including the obligation to repay the Obligations.

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

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

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

     Section 4.12. Updates of Representations. Borrowers shall deliver to Administrative Agent
within ten (10) days of the written request of Administrative Agent an Officer’s Certificate
updating all of the representations and warranties contained in this Agreement and the other
Financing Documents, together with an update of all applicable Schedules, and certifying that all
of the representations and warranties contained in this Agreement and the other Financing
Documents, as updated pursuant to such Officer’s Certificate and updated Schedules, are true,
accurate and complete as of the date of such Officer’s Certificate and updated Schedules.

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     Section 4.13. Power of Attorney. Each of the officers of Administrative Agent is hereby
irrevocably made, constituted and appointed the true and lawful attorney for Borrowers (without
requiring any of them to act as such) with full power of substitution to do the following: (a)
endorse the name of Borrowers upon any and all checks, drafts, money orders, and other instruments
for the payment of money that are payable to Borrowers and constitute collections on Borrowers’
Accounts (provided that, unless an Event of Default has occurred and is continuing, Administrative
Agent shall not exercise the power described in this clause (a) unless Administrative Agent has
first provided not less than three (3) Business Days’ prior written notice to Borrower to perform
the same and Borrower has failed to take such action); (b) so long as Administrative Agent has
provided not less than three (3) Business Days’ prior written notice to Borrower to perform the
same and Borrower has failed to take such action, execute in the name of Borrowers any schedules,
assignments, instruments, documents, and statements that Borrowers are obligated to give
Administrative Agent under this Agreement; (c) after the occurrence and during the continuance of
an Event of Default, take any action Borrowers are required to take under this Agreement; (d) so
long as Administrative Agent has provided not less than three (3) Business Days’ prior written
notice to Borrower to perform the same and Borrower has failed to take such action, do such other
and further acts and deeds in the name of Borrowers that Administrative Agent may deem necessary or
desirable to enforce any Account or other Collateral or perfect Administrative Agent’s security
interest or Lien in any Collateral; and (e) after the occurrence and during the continuance of an
Event of Default, do such other and further acts and deeds in the name of Borrowers that
Administrative Agent may deem necessary or desirable to enforce its rights with regard to any
Account or other Collateral. This power of attorney shall be irrevocable and coupled with an
interest.

     Section 4.14. Collateral Administration.

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

     (b) Administrative Agent reserves the right to notify Account Debtors that Administrative
Agent has been granted a Lien upon all Accounts.

     (c) Upon reasonable request of Administrative Agent (such request not to be made more than
twice per year (unless an Event of Default has occurred and is continuing)), Borrowers will conduct
a physical count of the Inventory and Borrowers shall provide to Administrative Agent a written
accounting of such physical count in form and substance satisfactory to Administrative Agent.
Borrowers will use commercially reasonable efforts to at all times keep its Inventory, if any, in
good and marketable condition.

     Section 4.15. [RESERVED].

ARTICLE 5 — NEGATIVE COVENANTS

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

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

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

30

 

     Section 5.3. Restricted Distributions. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, declare, order, pay, make or set apart any sum for any Restricted
Distribution; provided, however, that the following Restricted Distributions may be paid: (a) at
any time, dividends may be paid by any Subsidiary of any Borrower to such parent Borrower (and/or
to any intermediate Subsidiary who is also a Borrower); (b) any Borrower may pay dividends solely
in common stock; and (c) Borrower may repurchase the stock of former employees, directors or
consultants pursuant to stock repurchase agreements so long as an Event of Default does not exist
at the time of such repurchase and would not exist after giving effect to such repurchase, provided
that such repurchase does not exceed $50,000 in the aggregate per fiscal year.

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

     Section 5.5. [RESERVED]

     Section 5.6. Consolidations, Mergers and Sales of Assets; Change in Control. No Borrower
will, or will permit any Subsidiary to, directly or indirectly (a) consolidate or merge or
amalgamate with or into any other Person without Administrative Agent’s prior written consent
(which shall not be unreasonably conditioned, withheld or delayed), provided that, if
Administrative Agent shall elect not to consent to any Specified Merger, then, notwithstanding
anything to the contrary contained in this Agreement (specifically including Section 2.2(g) above)
Borrowers shall have the right to prepay the Loans in full and terminate this Agreement and the
other Loan Documents without payment of any Prepayment Fee (provided that nothing contained in the
foregoing shall limit Borrowers’ liability and obligations in any circumstances with respect to any
Exit Fee that may be owing under Section 2.2(f) above), or (b) consummate any asset dispositions
other than (i) dispositions of Inventory in the Ordinary Course of Business and not pursuant to any
bulk sale, (ii) dispositions of personal property assets (other than Accounts) for cash and fair
value that the applicable Borrower determines in good faith is no longer used or useful in the
business of such Borrower and its Subsidiaries, and (iii) the granting of non-exclusive licenses
(or exclusive licenses limited to a particular geographic range or field of use). No Borrower will
suffer or permit to occur any Change in Control with respect to itself, any Subsidiary or any
Guarantor other than Permitted Transfers with respect to such Persons without Administrative
Agent’s prior written consent (which shall not be unreasonably conditioned, withheld or delayed).

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

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

     Section 5.9. Modification of Organizational Documents. No Borrower will, or will permit any
Subsidiary to, directly or indirectly, amend or otherwise modify any Organizational Documents of
such Person, except for (a) Permitted Modifications and (b) in the case of Primary Borrower, any
modifications and amendments to the Organizational Documents of Primary Borrower in connection with
any initial public offering of the capital stock or other equity interests of Primary Borrower or
in connection with the issuance of any “Series C” capital

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stock of Primary Borrower to satisfy the conditions set forth in Section 7.5 below, or any
other transaction not prohibited by this Agreement so long as, (i) in any such case, no such
modifications or amendments to the Organizational Documents of Primary Borrower could reasonably be
expected to be adverse to the rights, interests or privileges of the Administrative Agent or the
Lenders with respect to the Obligations, the Collateral and the Financing Documents or their
ability to enforce the same and (ii) Borrowers shall give at least five (5) Business Days prior
written notice to Administrative Agent of any such proposed modifications or amendments (which such
notice shall include a copy of the proposed modifications and/or amendments); provided
that, notwithstanding anything to the contrary contained in the foregoing, and without limiting
the generality of the provisions of Section 5.1, no Borrower will, or will permit any Subsidiary
to, authorize and/or issue any capital stock or other equity securities which are subject to any
mandatory repurchase or redemption provisions or put rights in favor of any holder thereof (not
including any repurchase or redemption provisions exercisable solely at the option of such Borrower
or Subsidiary) or otherwise constitute Debt under the definition set forth herein or are subject to
any provisions requiring the mandatory payment of any dividends at any time (not including any
specified dividends which accrue at specified times but which are payable only as, when and if
declared by the board of directors or other similar governance body or manager or partner of such
Borrower or Subsidiary and/or upon liquidation of such Borrower or Subsidiary).

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

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

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

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

     Section 5.14. Deposit Accounts and Securities Accounts. Schedule 5.14 lists all of
the Deposit Accounts and Securities Accounts of each Borrower as of the Closing Date. No Borrower
will, or will permit any Subsidiary to, directly or indirectly, establish any new bank account,
Deposit Account or Securities Account without prior written notice to Administrative Agent and
unless Administrative Agent, such Borrower or such Subsidiary and the bank, financial institution
or securities intermediary at which the account is to be opened enter into a Deposit Account
Control Agreement or Securities Account Control Agreement prior to or concurrently with the
establishment of such bank account, Deposit Account or Securities Account.

     Section 5.15. Compliance with Anti-Terrorism Laws. Administrative Agent hereby notifies
Borrowers that pursuant to the requirements of Anti-Terrorism Laws, and Administrative Agent’s
policies and practices, Administrative Agent is required to obtain, verify and record certain
information and documentation that identifies Borrowers and its principals, which information
includes the name and address of each Borrower and its

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principals and such other information that will allow Administrative Agent to identify such
party in accordance with Anti-Terrorism Laws. No Borrower will, or will permit any Subsidiary to,
directly or indirectly, knowingly enter into any Operative Documents or Material Contracts (or
contracts or agreements that would have been Material Contracts had they existed on the date
hereof) with any Blocked Person or any Person listed on the OFAC Lists. Each Borrower shall
immediately notify Administrative Agent if such Borrower has knowledge that any Borrower or any
additional Credit Party becomes a Blocked Person or becomes listed on the OFAC Lists or (a) is
convicted on, (b) pleads nolo contendere to, (c) is indicted on, or (d) is arraigned and held over
on charges involving money laundering or predicate crimes to money laundering. No Borrower will,
or will permit any Subsidiary to, directly or indirectly, (i) conduct any business or engage in any
transaction or dealing with any Blocked Person, including, without limitation, the making or
receiving of any contribution of funds, goods or services to or for the benefit of any Blocked
Person, (ii) deal in, or otherwise engage in any transaction relating to, any property or interests
in property blocked pursuant to Executive Order No. 13224, any similar executive order or other
Anti-Terrorism Law, or (iii) engage in or conspire to engage in any transaction that evades or
avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in Executive Order No. 13224 or other Anti-Terrorism Law.

ARTICLE 6 — FINANCIAL COVENANTS

     [RESERVED]

ARTICLE 7 — CONDITIONS

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

     (a) evidence of the consummation of the transactions (other than the funding of the Loans and
the closing of any acquisition for which the proceeds of the Loans are purchase money) contemplated
by the Operative Documents;

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

     (c) the absence, since December 31, 2005, of any material adverse change in any aspect of the
business, operations, properties or condition (financial or otherwise) of any Credit Party or any
seller of any assets or business to be purchased by any Borrower contemporaneous with the Closing
Date, or any event or condition which could reasonably be expected to result in such a material
adverse change; and

     (d) all of Borrower’s existing Debt (other than accounts payable to third-party vendors
incurred in the ordinary course of business), including without limitation, any related party debt,
shall be fully subordinated to the Obligations pursuant to Subordination Agreements that are
requested by and satisfactory to the Administrative Agent in its sole discretion.

     Section 7.2. Conditions to Each Loan.

     The obligation of the Lenders to make any advance in respect of any Loan (including on the
Closing Date) is subject to the satisfaction of the following additional conditions:

     (a) receipt by Administrative Agent of a Notice of Borrowing;

     (b) [RESERVED]

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

     (d) the fact that the representations and warranties of each Credit Party contained in the
Financing Documents, as the same may be updated pursuant to Section 4.12, shall be true, correct
and complete on and as of the date of such borrowing, except to the extent that any such
representation or warranty relates to a specific date in which case such representation or warranty
shall be true and correct as of such earlier date; and

     (e) no event, fact or circumstance that could reasonably be expected to have a Material
Adverse Effect shall have occurred and be continuing since the date of this Agreement.

     Each giving of a Notice of Borrowing hereunder and each acceptance by any Borrower of the
proceeds of any Loan made hereunder shall be deemed to be (y) a representation and warranty by each
Borrower on the date of such notice or acceptance as to the facts specified in this Section, and
(z) a restatement by each Borrower that each and every one of the representations made by it in any
of the Financing Documents is as and to the extent provided for in clause (d) above.

     Section 7.3. Searches. Before the Closing Date, and thereafter (as and when determined by
Administrative Agent in its discretion), Administrative Agent shall have the right to perform, all
at Borrowers’ expense, the searches described in clauses (a), (b), (c) and (d) below against
Borrowers and any other Credit Party, the results of which are to be consistent with Borrowers’
representations and warranties under this Agreement and the satisfactory results of which shall be
a condition precedent to all advances of Loan proceeds: (a) UCC searches with the Secretary of
State of each jurisdiction in which the applicable Person is organized, and, if applicable, local
UCC fixture filings searches in each jurisdiction where any real estate Collateral or fixtures
Collateral is located; (b) judgment, pending litigation, federal tax lien, personal property tax
lien, and corporate and partnership tax lien searches, in the state and/or local filing offices (as
applicable) of each jurisdiction where the applicable Person maintains its executive offices, a
place of business, or assets and the jurisdiction in which the applicable Person is organized; (c)
real property title and lien searches in each jurisdiction in which any real property Collateral is
located; and (d) searches of applicable corporate, limited liability company, partnership and
related records to confirm the continued existence, organization and good standing of the
applicable Person and the exact legal name under which such Person is organized.

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

     Section 7.5. Special Funding Conditions. Without limiting the generality of Sections 7.1 and
7.2 above, the obligations of Lenders to make the initial advance under the Term Loan, whether such
initial advance is made on the Closing Date or thereafter, shall be subject to the additional
condition precedent that, prior to the delivery of any Notice of Borrowing in respect of such
initial advance, Primary Borrower shall have completed the authorization, issuance and sale of
shares of additional “Series C” capital stock of Primary Borrower pursuant to a private placement,
which such “Series C” capital stock shall not be subject to any mandatory repurchase or redemption
provisions or put rights in favor of any holder thereof (not including any repurchase or redemption
provisions exercisable solely at the option of Primary Borrower) or otherwise constitute Debt
under the definition set forth herein or be subject to any provisions requiring the mandatory
payment of any dividends at any time (not including any specified dividends which accrue at
specified times but which are payable only as, when and if declared by the board of directors of
Primary Borrower and/or upon liquidation of Primary Borrower), and Primary Borrower shall have
received net proceeds of such issuance and sale of such “Series C” capital stock in an amount of
not less than $20,000,000 and have deposited such net proceeds into a Deposit Account or Securities
Account subject to Deposit Account Control Agreement or Securities Account Control Agreement (as
applicable) in favor of Administrative Agent.

ARTICLE 8 — REGULATORY MATTERS

     [RESERVED]

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ARTICLE 9 — SECURITY AGREEMENT

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

     Section 9.2. Representations and Warranties and Covenants Relating to Collateral.

     (a) Schedule 9.2 sets forth (i) each chief executive office and principal place of business of
each Borrower and each of their respective Subsidiaries and (ii) all of the addresses (including
all warehouses) at which any of the Collateral is located and/or books and records of Borrowers
regarding any of the Collateral are kept, which such Schedule 9.2 indicates in each case which
Borrower(s) have Collateral and/or books and records located at such address, and, in the case of
any such address not owned by one or more of the Borrowers(s), indicates the nature of such
location (e.g., leased business location operated by Borrower(s), third party warehouse,
consignment location, processor location, etc.) and the name and address of the third party owning
and/or operating such location.

     (b) Without limiting the generality of Section 3.2, except as indicated on Schedule 3.19 with
respect to any rights of any Borrower as a licensee under any license of Intellectual Property
owned by another Person, and except for the filing of financing statements under the UCC, no
authorization, approval or other action by, and no notice to or filing with, any Governmental
Authority or consent of any other Person is required for (i) the grant by each Borrower to
Administrative Agent of the security interests and Liens in the Collateral provided for under this
Agreement and the other Security Documents (if any), or (ii) the exercise by Administrative Agent
of its rights and remedies with respect to the Collateral provided for under this Agreement and the
other Security Documents or under any applicable Law, including the UCC, and neither any such grant
of Liens in favor of Administrative Agent or exercise of rights by Administrative Agent shall
violate or cause a default under any agreement between any Borrower and any other Person relating
to any such collateral, including, except as indicated on Schedule 3.19, any license to which a
Borrower is a party, whether as licensor or licensee, with respect to any Intellectual Property,
whether owned by such Borrower or any other Person.

     (c) As of the Closing Date, no Borrower has any ownership interest in any Chattel Paper,
Letter-of-Credit Rights, Commercial Tort Claims, Instruments, Documents or Investment Property
(other than equity interests in any Subsidiaries of such Borrower disclosed on Schedule 3.4), and
Borrowers shall give notice to Administrative Agent promptly (but in any event not later than the
delivery by Borrowers of the next Compliance Certificate required pursuant to Section 4.1 above)
upon the acquisition by any Borrower of any such Chattel Paper, Letter-of-Credit Rights, Commercial
Tort Claims, Instruments, Documents or Investment Property. No Person other than Administrative
Agent or (if applicable) any Lender has “control” (as defined in Article 9 of the UCC) over any
Deposit Account, Investment Property (including Securities Accounts and Commodities Account),
Letter-of-Credit Rights or Electronic Chattel Paper in which any Borrower has any interest (except
for such control arising by operation of law in favor of any bank or securities intermediary or
commodities intermediary with whom any Deposit Account, Securities Account or Commodities Account
of Borrowers is maintained).

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

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     (e) Borrowers shall not adjust, settle or compromise the amount or payment of any Account, or
release wholly or partly any Account Debtor, or allow any credit or discount thereon (other than
adjustments, settlements, compromises, credits and discounts in the Ordinary Course of Business
made while no Default or Event of Default exists and in amounts which are not material with respect
to the Account) without the prior written consent of Administrative Agent. Without limiting the
generality of this Agreement or any other provisions of any of the Financing Documents relating to
the rights of Administrative Agent after the occurrence and during the continuance of an Event of
Default, Administrative Agent shall have the right at any time after the occurrence and during the
continuance of an Event of Default to: (i) exercise the rights of Borrowers with respect to the
obligation of any Account Debtor to make payment or otherwise render performance to Borrowers and
with respect to any property that secures the obligations of any Account Debtor or any other Person
obligated on the Collateral, and (ii) adjust, settle or compromise the amount or payment of such
Accounts.

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

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

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

          (iii) Borrowers shall promptly advise Administrative Agent upon any Borrower becoming aware
that it has any interests in any Commercial Tort Claim that constitutes part of the Collateral,
which such notice shall include descriptions of the events and circumstances giving rise to such
Commercial Tort Claim and the dates such events and circumstances occurred, the potential
defendants with respect such Commercial Tort Claim and any court proceedings that have been
instituted with respect to such Commercial Tort Claim, and Borrowers shall, with respect to any
such Commercial Tort Claim, execute and deliver to Administrative Agent such documents as
Administrative Agent shall request to perfect, preserve or protect the Liens, rights and remedies
of Administrative Agent with respect to any such Commercial Tort Claim.

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

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

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

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

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

     Section 9.3. UCC Remedies.

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

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

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

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

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

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

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

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

     (d) Subject to any terms, conditions, restrictions and obligations (including any transfer
restrictions and/or royalty obligations) set forth in any Intellectual Property license agreement
scheduled under Section 3.19, Administrative Agent and each Lender is hereby granted (which grant
shall be irrevocable until such time as the Obligations are indefeasibly paid in full and this
Agreement and the other Loan Documents shall have been terminated) a non-exclusive license or other
right to use, without any royalty or charge of any kind owing to Borrowers, Borrowers’ labels, mask
works, rights of use of any name, any other Intellectual Property and advertising matter, and any
similar property as it pertains to the Collateral, in advertising for sale, and selling any

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Collateral and, in connection with Administrative Agent’s exercise of its rights under this
Article, Borrowers’ transferable rights under all licenses and all franchise agreements inure to
Administrative Agent’s and each Lender’s benefit.

ARTICLE 10 — EVENTS OF DEFAULT

     Section 10.1. Events of Default.

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

     (a) any Borrower shall fail to pay when due any principal, interest, premium or fee under any
Financing Document or any other amount payable under any Financing Document, or there shall occur
any default in the performance of or compliance with any of the following sections of this
Agreement: Article 5; Article 6; Sections 4.1, 4.4 and 4.6, provided that, in the case of
any such default with respect to Section 4.1, such failure has not been cured within five (5)
Business Days after notice thereof from Administrative Agent to Borrowers (but further provided
that, if any such default with respect to Section 4.1 occurs more than twice in any consecutive
twelve (12) month period, Borrowers shall not be entitled to such notice and cure period);

     (b) any Credit Party defaults in the performance of or compliance with any term contained in
this Agreement or in any other Financing Document (other than occurrences described in other
provisions of this Section 10.1 for which a different grace or cure period is specified or for
which no grace or cure period is specified and thereby constitute immediate Events of Default) and
such default is not remedied by the Credit Party within fifteen (15) days following receipt by
Borrowers of notice from Administrative Agent of the occurrence of such default, or, if such
default cannot be cured within that time, then such additional time as may be necessary, if, within
such fifteen (15) days, Borrower has commenced and is diligently pursuing the remedies necessary to
cure such default, provided that such additional period shall in no event be greater than fifteen
(15) additional days;

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

     (d) failure of any Credit Party to pay when due or within any applicable grace period any
principal, interest or other amount on Debt (other than the Loans) or the occurrence of any breach,
default, condition or event with respect to any Debt (other than the Loans), if the effect of such
failure or occurrence is to cause, or to permit the holder or holders of any such Debt to cause,
Debt or other liabilities having an individual principal amount in excess of $25,000 or having an
aggregate principal amount in excess of $25,000 to become or be declared due prior to its stated
maturity;

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

     (f) an involuntary case or other proceeding shall be commenced against any Credit Party or any
Subsidiary of a Borrower seeking liquidation, reorganization or other relief with respect to it or
its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of
it or any substantial part of its property, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of forty-five (45) days; or an order for relief shall
be entered against any Credit Party or any Subsidiary of a Borrower under applicable bankruptcy,
insolvency or other similar law in respect of (i) bankruptcy, liquidation, winding-up, dissolution
or

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suspension of general operations, (ii) composition, rescheduling, reorganization, arrangement
or readjustment of, or other relief from, or stay of proceedings to enforce, some or all of the
debts or obligations, or (iii) possession, foreclosure, seizure or retention, sale or other
disposition of, or other proceedings to enforce security over, all or any substantial part of the
assets of such Credit Party or Subsidiary;

     (g) (i) institution of any steps by any Person to terminate a Pension Plan if as a result of
such termination any Credit Party could be required to make a contribution to such Pension Plan, or
could incur a liability or obligation to such Pension Plan, in excess of $25,000 (including a
circumstance where a member of the Controlled Group could be required to make such a contribution
or could incur such a liability and such member of the Controlled Group is not reasonably likely to
be able to satisfy such contribution or liability from its own assets), (ii) a contribution failure
occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA, or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Plan
and the withdrawal liability (without unaccrued interest) to Multiemployer Plans as a result of
such withdrawal (including any outstanding withdrawal liability that any Credit Party or any member
of the Controlled Group have incurred on the date of such withdrawal) could reasonably be expected
to result in an annual liability (including any liability that required to be paid in one lump sum)
to a Credit Party in excess of $25,000;

     (h) one or more judgments or orders for the payment of money (not paid or fully covered by
insurance maintained in accordance with the requirements of this Agreement and as to which the
relevant insurance company has acknowledged coverage) aggregating in excess of $500,000 shall be
rendered against any or all Credit Parties and either (i) enforcement proceedings shall have been
commenced by any creditor upon any such judgments or orders, or (ii) there shall be any period of
twenty (20) consecutive days during which a stay of enforcement of any such judgments or orders, by
reason of a pending appeal, bond or otherwise, shall not be in effect;

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

     (j) the institution by any Governmental Authority of criminal proceedings against any Credit
Party and such criminal proceedings remain undismissed for a period of forty-five (45) days;

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

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

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

     (n) the occurrence of any fact, event or circumstance that could reasonably be expected to
result in a Material Adverse Effect, if such default shall have continued unremedied for a period
of ten (10) days after written notice from Administrative Agent;

     (o) Administrative Agent determines, based on information available to it and in its
reasonable judgment, that there is a reasonable likelihood that Borrowers shall fail to comply with
one or more financial covenants in Article 6, if any, during the next succeeding financial
reporting period; or

     (p) the required number of holders of the Series A Preferred Stock and Series B Preferred
Stock of the Principal Borrower shall deliver a notice to the Primary Borrower stating that such
holders have elected to invoke any of their rights requiring the Principal Borrower to manditorily
redeem any or all of such Series A Preferred Stock and Series B Preferred Stock of the Principal
Borrower but only if such notice to the Primary Borrower establishes one or more required payment
dates in connection with such redemption that is or are earlier than the Commitment Expiry Date.

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

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

     Section 10.3. [RESERVED].

     Section 10.4. Default Rate of Interest. At the election of and following written notice to
Borrowers from Administrative Agent or Required Lenders, after the occurrence of an Event of
Default and for so long as it continues, the Loans and other Obligations shall bear interest at
rates that are three and one-half percent (3.50%) per annum in excess of the rates otherwise
payable under this Agreement; provided that, notwithstanding anything to the contrary
contained in the foregoing or otherwise in this Agreement, the increased rates of default interest
provided for in this section shall be applicable automatically and immediately upon the occurrence
and during the continuance of any Event of Default occurring under Section 10.1(e) or 10.1(f) above
without the necessity of any further affirmative action or notice of any kind by any party.

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

     Section 10.6. Application of Proceeds. Notwithstanding anything to the contrary contained in
this Agreement, upon the occurrence and during the continuance of an Event of Default, (a) each
Borrower irrevocably waives the right to direct the application of any and all payments at any time
or times thereafter received by Administrative Agent from or on behalf of such Borrower or any
other Guarantor of all or any part of the Obligations, and, as between Borrowers on the one hand
and Administrative Agent and Lenders on the other, Administrative Agent shall have the continuing
and exclusive right to apply and to reapply any and all payments received against the Obligations
in such manner as Administrative Agent may deem advisable notwithstanding any previous application
by Administrative Agent, and (b) the proceeds of any sale of, or other realization upon, all or any
part of the Collateral shall be applied: first, to all fees, costs, indemnities,
liabilities, obligations and expenses incurred by or owing to Administrative Agent with respect to
this Agreement, the other Financing Documents or the Collateral; second, to all fees,
costs, indemnities, liabilities, obligations and expenses incurred by or owing to any Lender with
respect to this Agreement, the other Financing Documents or the Collateral; third, to
accrued and unpaid interest on the Obligations (including any interest which, but for the
provisions of the Bankruptcy Code, would have accrued on such amounts); fourth, to the
principal amount of the Obligations outstanding; and fifth to

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any other indebtedness or Obligations of Borrowers owing to Administrative Agent or any Lender
under the Financing Documents. Any balance remaining shall be delivered to Borrowers or to whoever
may be lawfully entitled to receive such balance or as a court of competent jurisdiction may
direct. In carrying out the foregoing, (x) amounts received shall be applied in the numerical
order provided until exhausted prior to the application to the next succeeding category, and (y)
each of the Persons entitled to receive a payment in any particular category shall receive an
amount equal to its pro rata share of amounts available to be applied pursuant thereto for such
category.

     Section 10.7. Waivers.

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

     (b) Each Borrower for itself and all its successors and assigns, (i) agrees that its liability
shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or
modification granted or consented to by Lender; (ii) consents to any indulgences and all extensions
of time, renewals, waivers, or modifications that may be granted by Administrative Agent or any
Lender with respect to the payment or other provisions of the Financing Documents, and to any
substitution, exchange or release of the Collateral, or any part thereof, with or without
substitution, and agrees to the addition or release of any Borrower, endorsers, guarantors, or
sureties, or whether primarily or secondarily liable, without notice to any other Borrower and
without affecting its liability hereunder; (iii) agrees that its liability shall be unconditional
and without regard to the liability of any other Borrower, Administrative Agent or any Lender for
any tax on the indebtedness; and (iv) to the fullest extent permitted by law, expressly waives the
benefit of any statute or rule of law or equity now provided, or which may hereafter be provided,
which would produce a result contrary to or in conflict with the foregoing.

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

     (d) Without limiting the generality of anything contained in this Agreement or the other
Financing Documents, each Borrower agrees that if an Event of Default is continuing (i)
Administrative Agent and Lenders shall not be subject to any “one action” or “election of remedies”
law or rule, and (ii) all Liens and other rights, remedies or privileges provided to Administrative
Agent or Lenders shall remain in full force and effect until

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Administrative Agent or Lenders have exhausted all remedies against the Collateral and any
other properties owned by Borrowers and the Financing Documents and other security instruments or
agreements securing the Loans have been foreclosed, sold and/or otherwise realized upon in
satisfaction of Borrowers’ obligations under the Financing Documents.

     (e) Nothing contained herein or in any other Financing Document shall be construed as
requiring Administrative Agent or any Lender to resort to any part of the Collateral for the
satisfaction of any of Borrowers’ obligations under the Financing Documents in preference or
priority to any other Collateral, and Administrative Agent may seek satisfaction out of all of the
Collateral or any part thereof, in its absolute discretion in respect of Borrowers’ obligations
under the Financing Documents. In addition, Administrative Agent shall have the right from time to
time to partially foreclose upon any Collateral in any manner and for any amounts secured by the
Financing Documents then due and payable as determined by Administrative Agent in its sole
discretion, including, without limitation, the following circumstances: (i) in the event any
Borrower defaults beyond any applicable grace period in the payment of one or more scheduled
payments of principal and/or interest, Administrative Agent may foreclose upon all or any part of
the Collateral to recover such delinquent payments, or (ii) in the event Administrative Agent
elects to accelerate less than the entire outstanding principal balance of the Loans,
Administrative Agent may foreclose all or any part of the Collateral to recover so much of the
principal balance of the Loans as Lender may accelerate and such other sums secured by one or more
of the Financing Documents as Administrative Agent may elect. Notwithstanding one or more partial
foreclosures, any unforeclosed Collateral shall remain subject to the Financing Documents to secure
payment of sums secured by the Financing Documents and not previously recovered.

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

     Section 10.8. Injunctive Relief. The parties acknowledge and agree that, in the event of a
breach or threatened breach of any Credit Party’s obligations under any Financing Documents,
Administrative Agent and Lenders may have no adequate remedy in money damages and, accordingly,
shall be entitled to an injunction (including, without limitation, a temporary restraining order,
preliminary injunction, writ of attachment, or order compelling an audit) against such breach or
threatened breach, including, without limitation, maintaining any cash management and collection
procedure described herein. However, no specification in this Agreement of a specific legal or
equitable remedy shall be construed as a waiver or prohibition against any other legal or equitable
remedies in the event of a breach or threatened breach of any provision of this Agreement. Each
Credit Party waives, to the fullest extent permitted by law, the requirement of the posting of any
bond in connection with such injunctive relief. By joining in the Financing Documents as a Credit
Party, each Credit Party specifically joins in this Section as if this Section were a part of each
Financing Document executed by such Credit Party.

     Section 10.9. Marshalling. Administrative Agent and Lenders shall have no obligation to
marshal any assets in favor of any Credit Party, or against or in payment of any of the other
Obligations or any other obligation owed to Administrative Agent or Lenders by any Credit Party and
each Credit Party hereby waives any such right to marshalling (and by joining in the Financing
Documents as a Credit Party, each Credit Party specifically joins in this Section as if this
Section were a part of each Financing Document executed by such Credit Party).

ARTICLE 11 — AGENT

     Section 11.1. Appointment and Authorization. Each Lender hereby irrevocably appoints and
authorizes Administrative Agent to be such Lender’s agent under and with respect to this Agreement
and the other Financing Documents and the transactions contemplated hereby and thereby to the
extent provided for herein and therein and in any separate interlender or agency agreement entered
into by Lenders and Administrative in connection herewith and therewith and more specifically
(without limiting the generality of the foregoing) to enter into each of the Financing Documents to
which such Lender is a party (other than this Agreement) on its behalf and to take such actions as
Administrative Agent on such Lender’s behalf and to exercise such powers under the

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Financing Documents as are delegated to Administrative Agent by the terms thereof, and/or by
the terms of any interlender or agency agreement entered into among Administrative Agent and
Lenders, together with all such powers as are reasonably incidental thereto. Subject to the terms
of Section 12.5 below and the other Financing Documents and/or any such interlender or agency
agreement, Administrative Agent is authorized and empowered to amend, modify, or waive any
provisions of this Agreement or the other Financing Documents on behalf of Lenders. The provisions
of this Article 11 are solely for the benefit of Administrative Agent and Lenders and neither any
Borrower nor any other Credit Party shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under this Agreement, Administrative
Agent shall act solely as agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any Borrower or any
other Credit Party. Administrative Agent may perform any of its duties hereunder, or under the
Financing Documents and/or any such interlender or agency agreement, by or through its agents or
employees.

     Section 11.2. Right to Perform, Preserve and Protect. If any Credit Party fails to perform
any obligation hereunder or under any other Financing Document, Administrative Agent itself may,
but shall not be obligated to, cause such obligation to be performed at Borrowers’ expense.
Administrative Agent is further authorized by Borrowers and the Lenders to make expenditures from
time to time which Administrative Agent, in its reasonable business judgment, deems necessary or
desirable to (a) preserve or protect the business conducted by Borrowers and the other Credit
Parties, the Collateral, or any portion thereof and/or (b) enhance the likelihood of, or maximize
the amount of, repayment of the Loans and other Obligations. Each Borrower hereby agrees to
reimburse Administrative Agent on demand for any and all costs, liabilities and obligations
incurred by Administrative Agent pursuant to this Section 11.2, together with interest thereon at
the applicable default rate hereunder.

ARTICLE 12 — MISCELLANEOUS

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

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

     Section 12.3. Notices.

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

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     (b) Notices and other communications to the parties hereto may be delivered or furnished by
electronic communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved from time to time by Administrative Agent, provided, however, that the
foregoing shall not apply to notices sent directly to any Lender if such Lender has notified the
Administrative Agent that it is incapable of receiving notices by electronic communication. The
Administrative Agent or Borrower Representative may, in their discretion, agree to accept notices
and other communications to them hereunder by electronic communications pursuant to procedures
approved by it, provided, however, that approval of such procedures may be limited to particular
notices or communications.

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

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

     Section 12.5. Amendments and Waivers.

     (a) No provision of this Agreement or any other Financing Document may be amended, waived or
otherwise modified unless such amendment, waiver or other modification is in writing and is signed
or otherwise approved by Borrowers, the Administrative Agent and the Required Lenders; provided
that

          (i) no such amendment, waiver or other modification that would have the effect of increasing
or reducing a Lender’s Term Loan Commitment or Term Loan Commitment Amount or Term Loan Commitment
Percentage shall be effective as to such Lender without such Lender’s written consent or signature;

          (ii) no such amendment, waiver or modification that would affect the rights and duties of
Administrative Agent shall be effective without Administrative Agent’s written consent or
signature;

          (iii) no such amendment, waiver or other modification shall, unless signed by all the Lenders
directly affected thereby, (A) reduce the principal of, rate of interest on or any fees with
respect to any Loan or forgive any principal, interest (other than default interest) or fees (other
than late charges) with respect to any Loan (B) postpone the date fixed for, or waive, any payment
of principal of any Loan or of interest on any Loan (other than default interest) or any fees
provided for hereunder (other than late charges) or for any termination of any commitment; (C)
change the definition of the term Required Lenders or the percentage of Lenders which shall be
required for Lenders to take any action hereunder; (D) release all or substantially all or any
material portion of the Collateral, authorize any Borrower to sell or otherwise dispose of all or
substantially all or any material portion of the Collateral or release any Guarantor of all or any
portion of the Obligations or its Guarantee obligations with respect thereto, except, in each case
with respect to this clause (D), as otherwise may be provided in this Agreement or the other
Financing Documents (including in connection with any disposition permitted hereunder); (E) amend,
waive or otherwise modify this Section 12.5 or the definitions of the terms used in this Section
12.5 insofar as the definitions affect the substance of this Section 12.5; (F) consent to the
assignment, delegation or other transfer by any Credit Party of any of its rights and obligations
under any Financing Document or release any Borrower of its payment obligations under any Financing
Document, except, in each case with respect to this clause (F), pursuant to a merger or
consolidation permitted pursuant to this Agreement or (G) amend any of the provisions of Section
10.6 or amend any of the definitions Pro Rata Share, Term Loan Commitment, Term Loan Commitment
Amount, Term Loan Commitment Percentage or that provide for the Lenders to receive their Pro Rata
Shares of any fees, payments, setoffs or proceeds of Collateral hereunder. It is hereby understood
and agreed that all Lenders shall be

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deemed directly affected by an amendment, waiver or other modification of the type described
in the preceding clauses (C), (D), (E), (F) and (G) of the preceding sentence.

     Section 12.6. Assignments; Participations.

     (a) Assignments by Lenders.

          (i) Each Lender may at any time assign or grant participations in all or any portion of such
Lender’s Loans and interest in the Term Loan Commitment, together with all related obligations of
such Lender hereunder, but only with the prior written consent of Administrative Agent, provided,
that such consent shall not be required in connection with any assignment or granting of a
participation by any Lender to an Affiliate of such Lender. If Administrative Agent grants its
consent to any such assignment by a Lender, such Lender shall thereupon be released of any further
obligations under this Agreement. Each Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided,
however, that no such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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

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

     (c) The provisions of this Agreement and the other Financing Documents shall be binding upon,
and shall inure to the benefit of, the successors and permitted assigns of each party hereto or
thereto.

     Section 12.7. Headings. Headings and captions used in the Financing Documents (including the
Exhibits, Schedules and Annexes hereto and thereto) are included for convenience of reference only
and shall not be given any substantive effect.

     Section 12.8. Confidentiality. Administrative Agent and each Lender shall hold all non-public
information regarding the Credit Parties and their respective businesses identified as such by
Borrowers and obtained by Administrative Agent or any Lender pursuant to the requirements hereof in
accordance with such Person’s customary procedures for handling information of such nature, except
that disclosure of such information may be made (a) to their respective agents, employees,
Subsidiaries, Affiliates, attorneys, auditors, professional consultants, rating agencies, insurance
industry associations and portfolio management services, (b) to prospective transferees or
purchasers of any interest in the Loans, (or the professional advisors thereto), provided, however,
that any such Persons shall have agreed to be bound by the provisions of this Section 12.8, (c) as
required by Law, subpoena, judicial order or similar order and in connection with any litigation,
(d) as may be required in connection with the examination, audit or similar investigation of such
Person, and (e) to a Person that is a trustee, investment advisor, collateral manager, servicer,
noteholder or secured party in a Securitization (as hereinafter defined) in connection with the
administration, servicing and reporting on the assets serving as collateral for such
Securitization. For the purposes of this Section, “Securitization” shall mean a public or private
offering by a Lender or any of its Affiliates or their respective successors and assigns, of
securities which represent an interest in, or which are collateralized, in whole or in part, by the
Loans. Confidential information shall include only such information identified as such at the time
provided to Administrative Agent and shall not include information that either: (i) is in the
public domain, or becomes part of the public domain after disclosure to such Person through no
fault of such Person, or (ii) is disclosed to such Person by a Person other than a Credit Party,
provided, however, Administrative

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Agent does not have actual knowledge that such Person is prohibited from disclosing such
information. The obligations of Administrative Agent and Lenders under this Section 12.8 shall
supersede and replace the obligations of Administrative Agent and Lenders under any confidentiality
agreement in respect of this financing executed and delivered by Administrative Agent or any Lender
prior to the date hereof.

     Section 12.9. Waiver of Consequential and Other Damages. To the fullest extent permitted by
applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any
Indemnitee (as defined below), on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as
a result of this Agreement, any other Financing Document or any agreement or instrument
contemplated hereby or thereby, the transactions contemplated hereby or thereby, any Loan or the
use of the proceeds thereof. No Indemnitee shall be liable for any damages arising from the use by
unintended recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in connection with this
Agreement or the other Financing Documents or the transactions contemplated hereby or thereby.

     Section 12.10. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT, EACH NOTE AND EACH
OTHER FINANCING DOCUMENT, AND ALL MATTERS RELATING HERETO OR THERETO OR ARISING THEREFROM (WHETHER
SOUNDING IN CONTRACT LAW, TORT LAW OR OTHERWISE), SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES. EACH BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED WITHIN CHICAGO, STATE OF ILLINOIS AND IRREVOCABLY AGREES THAT, SUBJECT TO ADMINISTRATIVE
AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER FINANCING DOCUMENTS SHALL BE LITIGATED IN SUCH COURTS. EACH BORROWER EXPRESSLY SUBMITS AND
CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT AND
SERVICE SO MADE SHALL BE COMPLETE TEN (10) DAYS AFTER THE SAME HAS BEEN POSTED.

     Section 12.11. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH
BORROWER, ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY. EACH BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT
EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS,
AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH
BORROWER, ADMINISTRATIVE AGENT AND EACH LENDER WARRANTS AND REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY
WAIVES ITS JURY TRIAL RIGHTS, TO THE EXTENT PERMITTED BY APPLICABLE LAW.

     Section 12.12. Publication; Advertisement.

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

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

     Section 12.13. Counterparts; Integration. This Agreement and the other Financing Documents
may be signed in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument. Signatures by
facsimile or by email delivery of an electronic version of an executed signature page shall bind
the parties hereto. This Agreement and the other Financing Documents constitute the entire
agreement and understanding among the parties hereto and supersede any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.

     Section 12.14. No Strict Construction. The parties hereto have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.

     Section 12.15. Time. Time is of the essence in each Borrower’s and each other Credit Party’s
performance under this Agreement and all other Financing Documents.

     Section 12.16. Lender Approvals. Unless expressly provided herein to the contrary, any
approval, consent, waiver or satisfaction of Administrative Agent or Lenders with respect to any
matter that is the subject of this Agreement, the other Financing Documents may be granted or
withheld by Administrative Agent and Lenders in their sole and absolute discretion and credit
judgment.

     Section 12.17. Expenses; Indemnity

     (a) Borrowers agree to pay all reasonable legal, audit and appraisal fees and all other
reasonable out-of-pocket charges and expenses incurred by Administrative Agent and Lenders
(including the fees and expenses of Administrative Agent’s counsel, advisors and consultants) in
connection with the negotiation, preparation, legal review and execution of each of the Financing
Documents, including but not limited to UCC and judgment lien searches and UCC filings and fees for
post-closing UCC and judgment lien searches. In addition, Borrowers shall pay all such fees and
expenses associated with any amendments, modifications and terminations to the Financing Documents
following closing. If Administrative Agent or any Lender uses in-house counsel for any of these
purposes, Borrowers further agree that the Obligations include reasonable charges for such work
commensurate with the fees that would otherwise be charged by outside legal counsel selected by
Administrative Agent or such Lender for the work performed.

     (b) Borrowers agree to pay all out-of-pocket charges and expenses incurred by Administrative
Agent (including the fees and expenses of Administrative Agent’s counsel, advisers and consultants)
in connection with the administration of this Agreement and the other Financing Documents and the
credit facilities provided hereunder and thereunder, the administration, enforcement, protection or
preservation of any right or claim of Administrative Agent, the termination of this Agreement, the
termination of any Liens of Administrative Agent on the Collateral, or the collection of any
amounts due under the Financing Documents, including any such charges and expenses incurred in
connection with any “work-out” or with any proceeding under the Bankruptcy Code with respect to any
Credit Party. If Administrative Agent uses in-house counsel for any of these purposes (i.e., for
any task in connection with the enforcement, protection or preservation of any right or claim of
Administrative Agent and Lenders and the collection of any amounts due under the Financing
Documents or in connection with any other

48

 

purpose mentioned in the foregoing sentence), Borrowers further agree that the Obligations
include reasonable charges for such work commensurate with the fees that would otherwise be charged
by outside legal counsel selected by Administrative Agent for the work performed.

     (c) Borrowers hereby indemnify and agree to defend (with counsel acceptable to Administrative
Agent) and hold harmless Administrative Agent and Lenders, their partners, officers, agents and
employees (collectively in the singular, “Indemnitee”) from and against any liability, loss, cost,
expense (including reasonable attorneys’ fees and expenses for both in-house and outside counsel),
claim, damage, suit, action or proceeding ever suffered or incurred by any Indemnitee or in which
an Indemnitee may ever be or become involved (whether as a party, witness or otherwise) (a) arising
from any Credit Party’s failure to observe, perform or discharge any of its covenants, obligations,
agreements or duties under the Financing Documents, (b) arising from the breach of any of the
representations or warranties contained in any Financing Document, (c) arising by reason of this
Agreement, the other Financing Documents or the transactions contemplated hereby or thereby, or (d)
relating to claims of any Person with respect to the Collateral; provided, however, Borrower shall
not be liable under this Section 12.17(c) to the extent such loss is solely related to Indemnitee’s
gross negligence or willful misconduct.

     (d) Notwithstanding any contrary provision in this Agreement, the obligations of Borrowers
under this Section 12.17 shall survive the payment in full of the Obligations and the termination
of this Agreement. NO INDEMNITEE SHALL BE RESPONSIBLE OR LIABLE TO THE BORROWERS OR TO ANY OTHER
PARTY TO ANY FINANCING DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OR ANY OTHER
PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER THIS AGREEMENT OR ANY OTHER FINANCING DOCUMENT OR AS A RESULT OF ANY OTHER
TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.

     Section 12.18. [RESERVED].

     Section 12.19. Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition or other proceeding be filed by or against any Credit
Party for liquidation or reorganization, should any Credit Party become insolvent or make an
assignment for the benefit of any creditor or creditors or should an interim receiver, receiver,
receiver and manger or trustee be appointed for all or any significant part of any Credit Party’s
assets, and shall continue to be effective or to be reinstated, as the case may be, if at any time
payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a fraudulent preference reviewable transaction or otherwise, all as though
such payment or performance had not been made. In the event that any payment, or any part thereof,
is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced
only by such amount paid and not so rescinded, reduced, restored or returned.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

49

 

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

	 	 	 	 	 	 	 
	 	 	BORROWER:	 	 
	 
	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ Graham Cooper	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	Graham Cooper	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Chief Financial Officer	 	 
	 
	 
	 
	 
	 
	 
	 

	 	 	 	 	 
	 

	 	Address:	 	 
	 
	 

	 	 	 	12481 High Bluff Drive
	 

	 	 	 	San Diego, CA 92130
	 

	 	 	 	Attn: Chief Financial Officer
	 

	 	 	 	Facsimile: 1- (800) 854-8389.
	 

	 	 	 	E-Mail: gcooper@orexigen.com

	 	 	 
	UNITED STATES OF AMERICA

	 	:
	STATE OF

	 	: S.S.
	COUNTY OF

	 	:

     Before me, a Notary Public for the said County and State, personally appeared
                                         known to me or satisfactorily proven to me to be
 Graham K. Cooper  of Orexigen Therapeutics, Inc., and s/he acknowledged to me that s/he
executed the foregoing Credit Agreement as an authorized officer of said entity, that the said
instrument was signed on behalf of said entity as authorized by its Board of Directors or other
applicable entity governance authority and that s/he acknowledged said instrument to be the free
act and deed of said corporation.

     IN WITNESS WHEREOF, I hereunto set my hand and official seal.

	 	 	 	 	 
	 
	 	/s/ M. Gail Woznak	 	 
	 
	 	 

Notary Public	 	 
	 

	 	My Commission Expires:
12-10-08	 	 

[Signature Page 1 of 3 to Merrill Lynch/Orexigen Credit Agreement]

50

 

	 	 	 	 	 	 	 
	 	 	AGENT:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL,	 	 
	 	 	a division of Merrill Lynch Business Financial Services Inc.,

as Administrative Agent and a Lender
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ [illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	[illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Vice President	 	 
	 

	 	 	 	 

	 	 

Address:

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Account Manager for MLC-HCF Orexigen transaction

Facsimile: 1-866-231-8408

E-Mail: MLC_HCF_ABL1@ml.com

With copies to:

Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (312) 499-3245

Merrill Lynch Capital

7700 Wisconsin Ave., Suite 400

Bethesda, Maryland 20814

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (866) 341-9053

Blank Rome LLP

130 N. 18th Street

One Logan Square

Philadelphia, PA 19103

Attn: Lawrence F. Flick, II, Esq.

Facsimile Number: (215) 569-5555

Payment Account Designation:

          LaSalle Bank

          200 West Monroe

          Chicago, IL 60606

          ABA #: 071000505

          Account Name: MLBFS Healthcare           Finance

          Account #: 5800395088

          Attention: Orexigen Therapeutics

[Signature Page 2 of 3 to Merrill Lynch/Orexigen Credit Agreement]

51

 

	 	 	 	 	 	 	 
	 	 	LENDERS:	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL,	 	 
	 	 	a division of Merrill Lynch Business Financial Services Inc.,

as Lender
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ [illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	[illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Vice President	 	 
	 

	 	 	 	 

	 	 

Address:

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Account Manager for MLC-HCF Orexigen transaction

Facsimile: 1-866-231-8408

E-Mail: MLC_HCF_ABL1@ml.com

With copies to:

Merrill Lynch Capital

222 N. LaSalle Street, 16th Floor

Chicago, Illinois 60601

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (312) 499-3245

Merrill Lynch Capital

7700 Wisconsin Ave., Suite 400

Bethesda, Maryland 20814

Attn: Group Senior Transaction Attorney, Healthcare Finance

Facsimile Number: (866) 341-9053

Blank Rome LLP

130 N. 18th Street

One Logan Square

Philadelphia, PA 19103

Attn: Lawrence F. Flick, II, Esq.

Facsimile Number: (215) 569-5555

[Signature Page 3 of 3 to Merrill Lynch/Orexigen Credit Agreement]

52

 

     Annex A to Credit Agreement (Commitment Annex)

	 	 	 	 	 	 	 	 	 
	 	 	Term Loan	 	Term Loan
	 	 	Commitment	 	Commitment
	Lender	 	Amount	 	Percentage
	Merrill Lynch Capital
	 	$	17,000,000	 	 	 	100	%
	 
	 	 	 	 	 	 	 	 
	TOTALS
	 	$	17,000,000	 	 	 	100	%

Exhibit A - Page 1

 

	 	 	 
	

	 	Exhibit A to Credit Agreement (Reserved)

Exhibit A - Page 2

 

	 	 	 
	

	 	Exhibit B to Credit Agreement (Compliance Certificate)

COMPLIANCE CERTIFICATE

Date:                     ,           

     This certificate is given by                                         , a Responsible Officer of Orexigen
Therapeutics, Inc. (the “Company”), pursuant to that certain Credit and Security Agreement dated as
of                     , 2006 among the Company and any additional Borrower that may from time to time be
added thereto (collectively, “Borrowers”), Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., individually as a Lender and as Administrative Agent, and the
financial institutions or other entities from time to time parties hereto, each as a Lender (as
such agreement may have been amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the
meanings set forth in the Credit Agreement.

     The undersigned Responsible Officer, acting solely in his/her capacity as such a Responsible
Officer of the Company, hereby certifies to Administrative Agent and Lenders that:

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

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

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

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

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

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

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

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

          (i) Litigation against the Borrowers or Guarantors;

Exhibit B - Page 1

 

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

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

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

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

Sincerely,

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 

Schedules to Compliance Certificate

     Schedule 1 – Non-Compliance with Covenants

     Schedule 2 – Business Locations and Names of Borrowers and Guarantors

     Schedule 3 – Tax Liens; Unpaid Tax or Withholding Obligations

     Schedule 4 – List of all Deposit Account and Securities Accounts of Borrowers and Guarantors

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

     Schedule 6 – Newly Acquired Intellectual Property and Intellectual Property Licenses

Exhibit B - Page 2

 

	 	 	 
	

	 	Exhibit C to Credit Agreement (Reserved)

Exhibit C - Page 1

 

	 	 	 
	

	 	Exhibit D to Credit Agreement (Notice of Borrowing)

[BORROWER REPRESENTATIVE]

Date:                     ,           

     This certificate is given by                                         , a Responsible Officer of Orexigen
Therapeutics, Inc. (“Borrower Representative”), pursuant to Section 2.1(b)(i) of that certain
Credit and Security Agreement dated as of                     ,            among Borrower Representative and
any additional Borrower that may from time to time be added thereto (“Borrowers”), the Lenders from
time to time party thereto and Merrill Lynch Capital, a division of Merrill Lynch Business
Financial Services Inc., as Administrative Agent for Lenders (as such agreement may have been
amended, restated, supplemented or otherwise modified from time to time the “Credit Agreement”).
Capitalized terms used herein without definition shall have the meanings set forth in the Credit
Agreement.

     The undersigned Responsible Officer hereby gives notice to Administrative Agent of Borrower
Representative’s request to on [ date ] borrow $[                    ] of the Term Loan.

     The undersigned officer hereby certifies that, both before and after giving effect to the
request above (a) each of the conditions precedent set forth in Section 7.2 and Section 7.3 have
been satisfied, (b) all of the representations and warranties contained in the Credit Agreement and
the other Financing Documents are true, correct and complete as of the date hereof, except to the
extent such representation or warranty relates to a specific date, in which case such
representation or warranty is true, correct and complete as of such earlier date, and (c) no
Default or Event of Default has occurred and is continuing on the date hereof.

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

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory for Borrower Representative

Exhibit D - Page 1

 

	 	 	 
	

	 	Exhibit E to Credit Agreement (Payment Notification)

[BORROWER REPRESENTATIVE]

Date:                     ,           

     Reference is hereby made to the Credit and Security Agreement dated                     , 20      among
Orexigen Therapeutics, Inc. (“Borrower Representative”) and any additional Borrower that may from
time to time be added thereto (“Borrowers”), Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., as Administrative Agent and the financial institutions party
thereto. Capitalized terms used here have the meanings ascribed thereto in the Credit Agreement.

     Please be advised that funds in the amount of $                     will be wire transferred to
Administrative Agent on                     , 200_. Such funds shall constitute [an optional] [a mandatory]
prepayment of the Term Loans, with such prepayments to be applied in the manner specified in
Section 2.1(a)(iii). [Such mandatory prepayment is being made pursuant to Section                      of
the Credit Agreement.]

     Fax to MLC Operations 312-499-3336 no later than noon Chicago time.

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

     Wire Instructions:

	 	 	 	 	 
	 

	 	Bank Name:
	 	LaSalle Bank National Association
	 

	 	 	 	200 West Monroe
	 

	 	 	 	Chicago, IL 60606
	 

	 	ABA#
	 	071000505
	 

	 	Account Name:
	 	MLBFS Healthcare Finance
	 

	 	Account #:
	 	5800395088
	 

	 	Reference:
	 	Orexigen Therapeutics
	 

	 	Address:
	 	Merrill Lynch Capital
	 

	 	 	 	222 N. LaSalle Street, 16th Floor
	 

	 	 	 	Chicago, IL 60601

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

	 	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:
	 	Authorized Signatory for Borrower Representative

Exhibit E - Page 1

 

	 	 	 
	

	 	Pharma Rider

PHARMA RIDER

     This Pharma Rider is made a part of and is incorporated by reference into that certain Credit
and Security Agreement (the “Credit Agreement”) dated December 6, 2006 by and among OREXIGEN
THERAPEUTICS, INC., a Delaware corporation, and any additional Borrower that may hereafter be added
to this Agreement (each individually as a Borrower and collectively as Borrowers), MERRILL LYNCH
CAPITAL, a division of Merrill Lynch Business Financial Services Inc., individually as a Lender,
and as Administrative Agent, and the financial institutions or other entities from time to time
parties hereto, each as a Lender.

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

     Section 1 Definitions. All capitalized terms not otherwise defined in this Rider shall have
the meanings given them in the Credit Agreement.

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

     “Correction” means repair, modification, adjustment, relabeling, destruction or inspection
(including patient monitoring) of a product without its physical removal to some other location.

     “DEA” means the Drug Enforcement Administration of the United States of America and any
successor agency thereof.

     “Drug Application” means a new drug application, an abbreviated drug application, or a product
license application for any Product, as appropriate, as those terms are defined in the FDCA.

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

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

     “Good Manufacturing Practices” means current good manufacturing practices, as set forth in 21
C.F.R. Parts 210 and 211.

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

     “Permits” means licenses, certificates, accreditations, product clearances or approvals,
provider numbers or provider authorizations, marketing authorizations, other authorizations,
registrations, permits, consents and approvals required in connection with the conduct of any
Borrower’s or any Subsidiary’s business or to comply with any applicable Laws, including, without
limitation, drug listings and drug establishment registrations under 21 U.S.C. Section 510,
registrations issued by DEA under 21 U.S.C. Section 823 (if applicable to any Product), and those
issued by State governments for the conduct of any Borrower’s or any Subsidiary’s business.

     “Products” means any products manufactured, sold, developed, tested or marketed by any
Borrower or any of its Subsidiaries, including without limitation, those products set forth on
Exhibit F (as updated from time to time in accordance with Section 3.25(c)(i) below), provided
that, if Obligors shall fail to comply with their obligations under Section 3.25(c)(i) to give
notice to Agent and update Exhibit F prior to manufacturing, selling, developing,

 

 

testing or marketing any new Product, any such improperly undisclosed Product shall be deemed
to be including in this definition..

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

     “Required Permit” means a Permit (a) issued or required under Laws applicable to the business
of any Borrower or any of its Subsidiaries or necessary in the manufacturing, importing, exporting,
possession, ownership, warehousing, marketing, promoting, sale, labeling, furnishing, distribution
or delivery of goods or services under Laws applicable to the business of any Borrower or any of
its Subsidiaries or any Drug Application (including without limitation, at any point in time, all
licenses, approvals and permits issued by the FDA or any other applicable Governmental Entity
necessary for the testing, manufacture, marketing or sale of any Product by any applicable
Borrower(s) as such activities are being conducted by such Borrower(s) with respect to such Product
at such time), and (b) issued by any Person from which Borrower or any of its Subsidiaries has, as
of the Closing Date, received an accreditation.

     “Specific Laws” means all applicable Laws relating to the operation of private label and other
drug distributions, and the possession, control, warehousing, marketing, sale and distribution of
pharmaceuticals, including, without limitation, all federal and state laws governing the sale and
distribution of drugs, biologicals and supplements, including the Controlled Substances Act (21
U.S.C. §§ 801 et seq..), the Food, Drug and Cosmetic Act of 1938 (21 U.S.S. §§ 801 et seq..), the
Dietary Supplement Health and Education Act (P.L. 103-417 (1994) and the Omnibus Budget and
Reconciliation Act of 1990 (P. L. 101-508 (1990)), and also the Generic Drug Enforcement Act of
1992.

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

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

     Section 3.25 Compliance of Products.

     (a) Each Credit Party:

          (i) has obtained all Required Permits, or has contracted with third parties holding
Required Permits, necessary for compliance with all Laws and all such Required Permits are
current;

          (ii) has not used the services of any Person debarred under the provisions of the
Generic Drug Enforcement Act of 1992, 21 U.S.C. Section 335a (a) or (b);

          (iii) warrants and represents that none of its officers, directors, employees,
shareholders, their agents or affiliates has been convicted of any crime or engaged in any
conduct for which debarment is mandated by 21 U.S.C. Section 335a (a) or authorized by 21
U.S. Section 335a (b);

          (iv) warrants and represents that none of its officers, directors, employees,
shareholders, their agents or affiliates has made an untrue statement of material fact or
fraudulent statement to the FDA or failed to disclose a material fact required to be
disclosed to the FDA, committed an act, made a statement, or failed to make a statement that
could reasonably be expected to provide a basis for the FDA to invoke its policy respecting
“Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities,” set forth in
56 Fed. Regulation 46191 (September 10, 1991);

          (v) has not received any written notice that any Governmental Authority, including
without limitation the FDA, the DEA, the Office of the Inspector General of HHS or the
United States Department of Justice has commenced or threatened to initiate any action
against a Credit Party, any action

 

 

to enjoin a Credit Party, their officers, directors, employees, shareholders or their
agents and Affiliates, from conducting their businesses at any facility owned or used by
them or for any material civil penalty, injunction, seizure or criminal action;

          (vi) except as set forth on Schedule 3.25, has not received from the FDA or the DEA,
at any time since January 1, 2003, a Warning Letter, Form FDA-483, “Untitled Letter,” other
correspondence or notice setting forth allegedly objectionable observations or alleged
violations of laws and regulations enforced by the FDA or the DEA, or any comparable
correspondence from any state or local authority responsible for regulating drug products
and establishments, or any comparable correspondence from any foreign counterpart of the FDA
or DEA, or any comparable correspondence from any foreign counterpart of any state or local
authority with regard to any Product or the manufacture, processing, packing, or holding
thereof; and

          (vii) except as set forth on Schedule 3.25, has not engaged in any Recalls, Market
Withdrawals, or other forms of product retrieval from the marketplace of any Products since
January 1, 2003.

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

          (c) With respect to Products:

          (i) All Products are listed on Exhibit F and Borrowers have delivered to
Administrative Agent on or prior to the Closing Date all Required Permits relating to such
Products issued or outstanding as of the Closing Date; provided, however, that, if after the
Closing Date, any Borrower wishes to manufacture, sell, develop, test or market any new
Product, Borrowers shall give prior written notice to Administrative Agent of such intention
(which shall include a brief description of such Product, plus copies of all Required
Permits relating to such new Product and/or the applicable Borrower’s manufacture, sale,
development, testing or marketing thereof issued or outstanding as of the date of such
notice) along with a copy of an amended and restated Exhibit F; and further, provided, that,
if Borrower shall at any time obtain any new or additional Required Permits from the FDA,
DEA, or parallel state or local authorities, or foreign counterparts of the FDA, DEA, or
parallel state or local authorities, with respect to any Product which has previously been
disclosed to Administrative Agent, Borrower shall promptly give written notice to
Administrative Agent of such new or additional Required Permits, along with a copy thereof);

          (ii) Each Product is not adulterated or misbranded within the meaning of the FDCA;

          (iii) Each Product is not an article prohibited from introduction into interstate
commerce under the provisions of Sections 404, 505 or 512 of the FDCA;

          (iv) Each Product that is sold pursuant to a Credit Party’s belief that it is not a
“new drug”, as that term is defined in 21 U.S.C. Section 321(p), is generally recognized by
qualified experts as safe and effective for its intended uses as those terms have been
interpreted by FDA and the United States Supreme Court, and has been used for a material
extent and for a material time for such uses;

 

 

          (v) Each Product for which a Drug Efficacy Study Implementation (DESI) Notice has been
published in the Federal Register and each Product that is identical to, related to, or
similar to such a drug conforms with the requirements set forth in such DESI Notice;

          (vi) Each Product has been and/or shall be manufactured, imported, possessed, owned,
warehoused, marketed, promoted, sold, labeled, furnished, distributed and marketed in
accordance with all applicable Permits and Laws;

          (vii) Each Product has been and/or shall be manufactured in accordance with Good
Manufacturing Practices;

          (viii) Without limiting the generality of Section 3.25(a)(i) above, with respect to any
Product being tested or manufactured by any Borrower, Borrower has received, and such
Product shall be the subject of, all Required Permits needed in connection with the testing
or manufacture of such Product as such testing is currently being conducted by or on behalf
of Borrower, and Borrowers have not received any notice from any applicable Government
Authority, specifically including the FDA, that such Government Authority is conducting an
investigation or review of (A) Borrowers’ manufacturing facilities and processes for such
Product which have disclosed any material deficiencies or violations of Laws (including
Healthcare laws) and/or the Required Permits related to the manufacture of such Product, or
(B) any such Required Permit or that any such Required Permit has been revoked or withdrawn,
nor has any such Governmental Authority issued any order or recommendation stating that the
development, testing and/or manufacturing of such Product by Borrower should cease;

          (ix) Without limiting the generality of Section 3.25(a)(i) above, with respect to any
Product marketed or sold by any Borrower, Borrower shall have received, and such Product
shall be the subject of, all Required Permits needed in connection with the marketing and
sales of such Product as currently being marketed or sold by Borrower, and Borrowers have
not received any notice from any applicable Governmental Authority, specifically including
the FDA, that such Governmental Authority is conducting an investigation or review of any
such Required Permit or approval or that any such Required Permit has been revoked or
withdrawn, nor has any such Governmental Authority issued any order or recommendation
stating that such marketing or sales of such Product cease or that such Product be withdrawn
from the marketplace; and

          (x) Borrowers have not (since the Closing Date) experienced any significant failures in
their manufacturing of any Product such that the amount of such Product successfully
manufactured by Borrower in accordance with all specifications thereof and the Required
Payments related thereto in any month shall decrease significantly with respect to the
quantities of such Product produced in the prior month.

     Section 3 Additional Affirmative Covenants. The following is hereby appended to the Credit
Agreement as new Section 4.16:

     Section 4.16 Covenants Regarding Products and Compliance with Required Permits

          (a) Without limiting the generality of Section 4.5, in connection with the development,
testing, manufacture, marketing or sale of each and any Product by any Borrower, Borrowers shall
comply fully and completely in all material respects with all Required Permits at all times issued
by any Government Authority, specifically including the FDA, with respect to such development,
testing, manufacture, marketing or sales of such Product by Borrower as such activities are at any
such time being conducted by Borrowers.

          (b) Without limiting the generality of Section 4. 16 above, Borrowers shall immediately and in
any case within three (3) Business Days give written notice to Administrative Agent upon any
Borrower becoming aware that any of the representations and warranties set forth in Section 3.25
with respect to any Product have become incorrect in any material respect (provided that, for the
avoidance of doubt, the giving of such notice

 

 

shall not cure or result in the automatic waiver of any Default or Event of Default that may
have resulted from such breach of such representation or warranty).

     Section 4 Permitted Investments. The definition of Permitted Investments as used in the
Credit Agreement is hereby modified to include the following: purchases by Borrowers of the rights
to test, develop, manufacture, sell or market any new pharmaceutical, drug or medical device
(and/or any Intellectual Property related thereto) that will upon such purchase become a Product of
Borrowers (provided that, nothing in the foregoing shall be interpreted or construed to contradict
or limit any of Borrowers’ obligations under Section 3.25 above, particularly including without
limitation the obligations of Borrowers to give prior written notice to Administrative Agent of
Borrowers’ intentions to begin testing, developing, manufacturing, selling or marketing any new
Product).

     Section 5 Events of Default. In addition to the events listed in Section 10.1, the occurrence
of any of the following conditions and/or events, whether voluntary or involuntary, by operation of
law or otherwise, shall constitute an “Event of Default” under the Credit Agreement:

          (a) the institution of any proceeding by FDA or similar Governmental Authority to order the
withdrawal of any Product or Product category from the market or to enjoin Credit Party or any
representative of a Credit Party from manufacturing, marketing, selling or distributing any Product
or Product category;

          (b) the institution of any action or proceeding by any DEA, FDA, or any other Governmental
Authority to revoke, suspend, reject, withdraw, limit, or restrict any Required Permit held by a
Credit Party or any representative of a Credit Party;

          (c) the commencement of any enforcement action against any Credit Party by DEA or FDA, or any
other Governmental Authority in connection with any Product or the testing, manufacturing,
marketing, selling or distributing thereof;

          (d) the recall of any Products from the market, the voluntary withdrawal of any Products from
the market, or actions to discontinue the sale of any Products;

          (e) a change in Law, including a change in FDA or DEA policies or procedures, occurs which
could reasonably be expected to have a Material Adverse Effect; or

          (f) the termination of any agreements with manufacturers that supply any Products or any
components of any Products or any changes to any agreements with manufacturers that supply any
Products or any components of any Products that could reasonably be expected to have a Material
Adverse Effect.

     provided that, notwithstanding the events described in Sections 5(a) through 5(f) of
this Pharma Rider set forth above, a request by any Governmental Authority requiring any Credit
Party to take some form of corrective action that is unaccompanied by the triggering criteria
listed in such Sections 5(a) through 5(f) above shall not constitute an Event of Default.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Pharma Rider as of the date of the
Credit Agreement.

	 	 	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 	 	 
	 	 	OREXIGEN THERAPEUTICS, INC.
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ GRAHAM COOPER	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	Graham Cooper	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Chief Financial Officer	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	 	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL,
	 	 	a division of Merrill Lynch Business Financial Services Inc., 
as Administrative Agent and a Lender
	 
	 	 	 	 	 	 
	 
	 	By:	 	/s/ [illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	[illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Vice President	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	LENDERS:
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH CAPITAL,
	 	 	a division of Merrill Lynch Business Financial Services Inc.,

as Lender
	 
	 	By:	 	/s/ [illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Name:	 	[illegible]	 	 
	 
	 
	 
	 
	 
	 
	 

	 
	 	Title:	 	Vice President	 	 
	 

	 	 	 	 

	 	 

[Signature Page for Pharma Rider to Merrill Lynch/Orexigen Credit Agreement]exv10w16

 

EXHIBIT 10.16

SETTLEMENT AGREEMENT

     This Settlement Agreement (“Agreement”) is entered into by and among: Duke University, a North
Carolina nonprofit and educational institution; Orexigen Therapeutics, Inc., a Delaware
corporation; Elan Corporation, plc, an Irish corporation; Elan Pharma International Ltd., an Irish
corporation; Elan Pharmaceuticals, Inc., a Delaware corporation; Eisai Inc., a Delaware
corporation; Eisai Co., Ltd., a Japanese corporation; and Julianne E. Jennings, an individual (all
collectively referred to herein as the “Parties” or, individually, the “Party”).

RECITALS

     WHEREAS, on May 6, 2002, Elan filed Provisional Application No. 60/378,446, which was
converted into U.S. Patent Application No. 10/429,474 on May 2, 2003, relating to the use of
zonisamide for weight loss treatment and naming Jennings as the sole inventor;

     WHEREAS, in April 2004, Elan transferred any and all rights it had in U.S. Patent Application
No. 10/429,474 to Eisai Inc., and Eisai Inc. is presently the owner of U.S. Patent Application No.
10/429,474;

     WHEREAS, on May 17, 2002, Duke filed Provisional Application No. 60/380,874, which was
converted into U.S. Patent Application No. 10/440,404 on May 19, 2003, relating to the use of
zonisamide and other compounds for weight loss treatment and naming Kishore M. Gadde and Ranga R.
Krishnan as co-inventors;

     WHEREAS, on July 12, 2004, Duke and Orexigen filed a civil action in the United States
District Court for the Middle District of North Carolina against Elan, Eisai, and Jennings, which
action is entitled, Duke University and Orexigen Therapeutics, Inc., v. Elan Corporation, plc, Elan
Pharma International Ltd., Elan Pharmaceuticals, Inc., Eisai, Inc., Eisai Co., Ltd., and Julianne
E. Jennings, Civil Action No. 1:04CV00532 (“the Action”);

1

 

     WHEREAS, in the Action, Duke and Orexigen sought a declaration to correct inventorship and
assignment of U.S. Patent Application No. 10/429,474, and asserted various other claims;

     WHEREAS, in the Action, Elan, Eisai, and Jennings filed motions to dismiss the Action, which
were granted in part and denied in part;

     WHEREAS, the Parties recognize the uncertainty of the outcome of disputed complex litigation,
such as the Action, and the extended period of time that it could take to resolve matters through
litigation;

     WHEREAS, the Parties wish to contain the fees, costs, and expenses associated with the Action,
and have independently concluded that their respective interests would be best served by
compromising and thereby terminating and concluding the Action; and

     WHEREAS, the Parties intend to bring to close all current and prospective litigation in the
United States relating to the Eisai Patent(s) and the Duke Patent(s) (as those terms are defined in
this Agreement), as set forth herein.

     NOW, THEREFORE, for good, valuable, and reciprocal consideration given and received, the
sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties agree
as follows:

1. DEFINITIONS. The following terms have the meanings ascribed to them, whether in the singular or
plural:

     1.1 “Duke” means Duke University and shall include and encompass Duke’s divisions,
subsidiaries, sub-entities, partners, joint-ventures, affiliates, owners, executives, officers,
directors, administrators, successors, agents, insurers, underwriters, legal representatives, and
present, past, or future parents.

2

 

     1.2 “Orexigen” means Orexigen Therapeutics, Inc. and shall include and encompass Orexigen’s
divisions, subsidiaries, sub-entities, partners, joint-ventures, affiliates, owners, executives,
officers, directors, administrators, successors, agents, insurers, underwriters, legal
representatives, and present, past, or future parents.

     1.3 “Elan” means Elan Corporation, plc, Elan Pharma International Ltd., and Elan
Pharmaceuticals, Inc. and shall include and encompass each of their divisions, subsidiaries,
sub-entities, partners, joint-ventures, affiliates, owners, executives, officers, directors,
administrators, successors, agents, insurers, underwriters, legal representatives, and present,
past, or future parents.

     1.4 “Eisai” means Eisai Inc. and Eisai Co., Ltd. and shall include and encompass each of their
divisions, subsidiaries, sub-entities, partners, joint-ventures, affiliates, owners, executives,
officers, directors, administrators, successors, agents, insurers, underwriters, legal
representatives, and present, past, or future parents, and shall also include any successors in
interest to or assigns of the Eisai Patent(s), defined herein.

     1.5 “Jennings” means Julianne E. Jennings.

     1.6 “Eisai Patent(s)” means any patent that includes a claim which encompasses the use of
zonisamide as the sole active ingredient to treat obesity or other weight-related disorders or
conditions that (a) issues from U.S. Patent Application No. 10/429,474 filed on May 2, 2003, or (b)
issues from any other U.S. patent application claiming in whole or in part the benefit of the
filing date of, or which is otherwise based on the disclosure in, U.S. Patent Application No.
10/429,474 filed on May 2, 2003 or U.S. Provisional Application No. 60/378,446 filed on May 6,
2002.

     1.7 “Duke Patent(s)” means any patent that includes a claim which encompasses the use of
zonisamide as the sole active ingredient to treat obesity or other weight-related disorders or
conditions that (a) issues from U.S. Patent Application No. 10/440,404 filed on May 19, 2003, or
(b) issues from any other U.S. patent application claiming in whole or in part the benefit of the

3

 

filing date of, or which is otherwise based on the disclosure in, U.S. Patent Application No.
10/440,404 filed on May 19, 2003 or U.S. Provisional Application No. 60/380,874 filed on May 17,
2002.

     1.8 “Orexigen’s Product” means any product containing zonisamide in combination with any other
active pharmaceutical agent, including but not limited to bupropion, wherein zonisamide and the
other active pharmaceutical agent may be administered as a single dosage form or as separate dosage
forms, the product being intended for use in the treatment of humans, including but not limited to
the treatment of obesity or other weight-related disorders or conditions.

     1.9 “Effective Date” means the date that this Agreement has been signed by all of the Parties,
which may be accomplished by counterparts.

     1.10 “Zonegran Product” means the pharmaceutical product currently approved by the FDA
pursuant to NDA 20-789 and marketed in the United States by Eisai Inc. under the trademark
ZONEGRAN®.

     1.11 “Gadde” means Kishore M. Gadde.

     1.12 “Krishnan” means Ranga R. Krishnan.

     1.13 “Person” means any individual, entity, corporation, partnership, joint venture, limited
liability company, trust or unincorporated organization.

2. DISMISSAL AND RELEASES

     2.1 Dismissal of Action. Within five (5) days of the Effective Date, the Parties shall
execute, and Duke and Orexigen shall cause their counsel to file, a Stipulation of Dismissal in the
form attached as Exhibit A, which the Parties intend will dismiss Duke’s and Orexigen’s

4

 

pending claims in the Action with prejudice in accordance with Federal Rule of Civil Procedure
41(a)(1)(ii).

     2.2 Release by Duke and Orexigen. Duke and Orexigen, in consideration of the
agreements set forth herein, and intending to be legally bound, irrevocably release and forever
discharge Elan, Eisai, and Jennings from any actions, causes of action, claims, suits, obligations,
liabilities, and demands whatsoever, whether in law, in equity or otherwise, arising under the laws
of the United States or any State within the United States, whether known or unknown, asserted or
unasserted, existing as of the Effective Date, based upon, arising out of or in any way relating to
either (a) the Action, or (b) the Duke Patent(s).

     2.3 Release by Elan, Eisai, and Jennings. Elan, Eisai, and Jennings, in consideration
of the agreements set forth herein, and intending to be legally bound, irrevocably release and
forever discharge Duke and Orexigen from any actions, causes of action, claims, suits, obligations,
liabilities, and demands whatsoever, whether in law, in equity or otherwise, arising under the laws
of the United States or any State within the United States, whether known or unknown, asserted or
unasserted, existing as of the Effective Date, based upon, arising out of or in any way relating to
either (a) the Action, or (b) the Eisai Patent(s).

     2.4 Limitations on Releases. The releases set forth above in Paragraphs 2.2 and 2.3
are limited to the United States only and do not apply to, and the Parties expressly reserve their
rights with respect to, any and all actions, causes of action, claims, suits, obligations,
liabilities, and demands whatsoever outside the United States. In addition, the releases set forth
above in Paragraphs 2.2 and 2.3 do not apply to:

     (a) Any claims based upon or arising out of the rights and obligations created by this
Agreement; or

     (b) The rights of the Parties with respect to the Duke Patent(s) and the Eisai Patent(s) in
any and all present or future proceedings in the U.S. Patent and Trademark Office, including but
not limited to any interference proceeding relating to the Duke Patent(s), the Eisai Patent(s), or
the applications for those patents.

5

 

     2.5 Waiver. Each Party acknowledges being familiar with Section 1542 of the
California Civil Code, which reads as follows:

A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if
known by him or her must have materially affected his or her settlement with the
debtor.

Each Party acknowledges and agrees that the Party is releasing unknown claims and waives all rights
that the Party may have under Civil Code Section 1542 or under any other statute or common law
principle of similar effect.

3. COVENANT NOT TO SUE

     3.1 By Duke and Orexigen. Duke and Orexigen, hereby covenant that they will not,
individually or collectively, assert the Duke Patent(s) or any application for the Duke Patent(s)
against Elan, Eisai or Jennings or any of their successors, assigns, licensees, sublicensees,
customers, distributors, suppliers, or users, for any conduct relating to the Zonegran Product,
whether occurring before, on, or after the Effective Date. Duke and Orexigen shall impose this
covenant on any third party to which Duke and Orexigen, may, after the Effective Date, assign,
convey, sell, lease, encumber, license, sublicense, or otherwise transfer or grant any right in or
to the Duke Patent(s) or any right or interest therein. Breach of any portion of this Paragraph
3.1 shall constitute a material breach of this Agreement.

     3.2 By Elan, Eisai and Jennings. Elan, Eisai, and Jennings hereby covenant that they
will not, individually or collectively, assert the Eisai Patent(s) or any application for the Eisai
Patent(s) against Duke or Orexigen or any of their successors, assigns, licensees, sublicensees,
customers, distributors, suppliers, or users, for any conduct relating to Orexigen’s Product,
whether occurring before, on, or after the Effective Date. Elan, Eisai, and Jennings shall impose
this covenant on any third party to which Elan, Eisai, or Jennings may, after the Effective Date,
assign, convey, sell, lease, encumber, license, sublicense, or otherwise transfer or grant any
right in or to the Eisai Patent(s) or any right or interest therein. Breach of any portion of this
Paragraph 3.2 shall constitute a material breach of this Agreement.

6

 

4. REPRESENTATIONS AND WARRANTIES

     4.1 By the Parties. Each Party represents and warrants that (a) it has not assigned or
transferred to any other persons or entities any of its claims, demands, or causes of action
settled and released herein, (b) it has the full power and authority to enter into this Agreement
and to perform its obligations hereunder, (c) this Agreement is binding on and enforceable against
it by the other Parties in accordance with its terms, and (d) the compliance by each of the Parties
with its obligations hereunder will not conflict with or result in a breach of any agreement to
which such Party is a party or is otherwise bound.

     4.2 By Jennings. Jennings represents that she has assigned all of her right, title,
and interest in the Eisai Patent(s) to Elan, and that she is currently unaware of any Person with
any right, title, or interest in the Eisai Patent(s) other than Eisai Inc. and/or Elan. Jennings
further represents that she is not currently seeking and does not currently possess any patent
rights in the United States relating to the use of zonisamide for the treatment of obesity or other
weight-related disorders or conditions.

     4.3 By Elan. Elan represents that it assigned all of its right, title, and interest
in the Eisai Patent(s) to Eisai, and that it is currently unaware of any Person with any right,
title, or interest in the Eisai Patent(s) other than Eisai Inc. Elan further represents that it is
not currently seeking and does not currently possess any patent rights in the United States
relating to the use of zonisamide for the treatment of obesity or other weight-related disorders or
conditions.

     4.4 By Eisai. Eisai represents that Eisai Inc. has not assigned or otherwise
transferred any right, title, or interest in the Eisai Patent(s), and that it is currently unaware
of any Person with any right, title, or interest in the Eisai Patent(s) other than Eisai Inc.
Eisai further represents that, other than the Eisai Patent(s), it is not currently seeking and does
not currently possess any patent rights in the United States relating to the use of zonisamide for
the treatment of obesity or other weight-related disorders or conditions.

7

 

     4.5 By Duke and Orexigen. Duke represents that Gadde and Krishnan have assigned all
of their right, title, and interest in the Duke Patent(s) to Duke. Duke further represents that it
has not assigned, licensed or otherwise transferred any right, title, or interest in the Duke
Patent(s) to any Person, except to Orexigen. Orexigen represents that it has not assigned,
licensed or otherwise transferred any right, title, or interest in the Duke Patent(s) to any
Person, except to Duke. Duke and Orexigen further represent that they are currently unaware of any
Person with any right, title, or interest in the Duke Patent(s), other than Duke and Orexigen.

5. TERM

     5.1 Term. This Agreement shall become effective on the Effective Date and shall
continue in force until the latter of (a) the expiration of the last of the Eisai Patent(s) and the
Duke Patent(s), or (b) the final abandonment of all U.S. patent applications for the Eisai
Patent(s) and the Duke Patent(s).

6. GENERAL

     6.1 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of North Carolina (regardless of its or any other jurisdiction’s choice of law
principles).

     6.2 Further Assurances. Each Party agrees to take or cause to be taken such further
actions, and to execute, deliver, and file, or cause to be executed, delivered, and filed, such
further documents and instruments and to obtain such consents, as may be reasonably required or
requested in order to effectuate fully the purposes, terms, and conditions of this Agreement.

     6.3 Severability. If any term, clause, or provision of this Agreement shall be
determined to be invalid or unenforceable, the unenforceable or invalid article or provision shall
be deemed deleted from this Agreement and replaced with an article or provision which accomplishes,
to the extent possible, the original business purpose of such article or provision in

8

 

an enforceable and valid manner, and the validity of any other term, clause, or provision shall not
be affected.

     6.4 Counterparts. This Agreement may be executed (including, without limitation, by
facsimile signature) in one or more counterparts, with the same effect as if the Parties had signed
the same document. Each counterpart so executed shall be deemed to be an original, and all such
counterparts shall be construed together and shall constitute one Agreement.

     6.5 Entire Agreement; Amendment. This Agreement, including Exhibit A attached hereto,
which is incorporated herein by reference, constitutes the entire understanding and only agreement
between the Parties with respect to the subject matter hereof and supersedes any and all prior or
contemporaneous negotiations, representations, agreements, and understandings, written or oral,
that the Parties may have reached with respect to the subject matter hereof. No agreements
altering or supplementing the terms hereof may be made except by means of a written document signed
by the duly authorized representatives of each of the Parties.

     6.6 Agency. Nothing herein contained shall be deemed to create or give rise to an
agency, joint venture, or partnership relationship or any fiduciary duty among the Parties.

     6.7 Waivers and Amendments. Failure by any Party to enforce any provision of this
Agreement shall not be deemed a waiver of that provision or of any other provision of this
Agreement. Any claim of waiver of any right, obligation, term, or condition of this Agreement and
any claim that any provision of this Agreement has been modified or amended shall be null and void
unless such waiver, modification, or amendment is made in writing and signed by authorized
representatives of all Parties.

     6.8 Assignment. This Agreement may be assigned by any Party.

     6.9 Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the Parties, their respective successors and assigns.

9

 

     6.10 Legal Counsel. All Parties have engaged legal counsel in the drafting,
negotiating, and finalizing of this Agreement and any presumption against the drafter of any
particular provision herein (or against the drafter of this Agreement as a whole) shall be of no
effect whatsoever and each Party covenants to, and shall, refrain from asserting or relying upon
any such presumption.

     6.11 Notices. All notices required or permitted to be given hereunder shall be given
in writing, sent by facsimile and first class mail, and shall be sent as follows:

If to Duke:

Robert L. Taber, Ph.D.

Vice Chancellor, Science and Technology Development

Duke University Medical Center

Room 121 Davison Building, Box 3701

Durham, NC 27710

Fax: 919-681-7642

with a copy to:

Craig S. Summers

Knobbe, Martens, Olson & Bear, LLP

2040 Main Street, 14th Floor

Irvine, CA 92614

Fax: 949-760-9502

If to Orexigen:

Anthony A. McKinney

Chief Operating Officer

Orexigen Therapeutics, Inc.

12481 High Bluff Drive, Suite 150

San Diego, CA 92130

Fax: 949-271-3791

10

 

with a copy to:

Craig S. Summers

Knobbe, Martens, Olson & Bear, LLP

2040 Main Street, 14th Floor

Irvine, CA 92614

Fax: 949-760-9502

If to Elan:

Richard T. Collier

EVP & General Counsel

Elan Corporation, plc

3000 Horizon Drive

King of Prussia, PA 19406

Fax: 610-313-8845

with a copy to:

Steven C. Cherny

Latham & Watkins, LLP

885 Third Avenue, Suite 1000

New York, NY 10022

Fax: 212-751-4864

If to Eisai:

Eisai Inc.

Glenpointe Centre West

500 Frank W. Burr Blvd.

Teaneck, N.J. 07666

Fax: 201-692-9120

Attn: General Counsel

11

 

After February 1, 2007 to:

Eisai Inc.

100 Tice Boulevard

Woodcliff Lake, NJ 07667

Attn: General Counsel

with a copy to:

Covington & Burling LLP

One Front Street

San Francisco, CA 94111

Fax: 415-591-6091

Attn: Scott Schrader, Esq.

If to Jennings:

Julianne E. Jennings

12404 Mona Lisa Street

San Diego, CA 92130

Fax: 212-751-4864

with a copy to:

Steven C. Cherny

Latham & Watkins, LLP

885 Third Avenue, Suite 1000

New York, NY 10022

Fax: 212-751-4864

12

 

     IN WITNESS WHEREOF, the Parties hereto have caused their duly authorized representatives to
execute this Agreement.

	 	 	 	 	 	 	 	 	 
	DUKE UNIVERSITY	 	 	 	OREXIGEN THERAPEUTICS, INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Robert Taber
	 	 	 	By:
	 	/s/ Gary D. Tollefson
	 

	 	 
	 	 	 	 	 	 
	Name: Robert Taber	 	 	 	Name: Gary D. Tollefson
	Title: Vice Chancellor	 	 	 	Title: CEO/President
	Date: 12/1/06	 	 	 	Date: 07 Dec. 2006
	 
	 	 	 	 	 	 	 	 
	ELAN CORPORATION, PLC	 	 	 	ELAN PHARMA INT’L LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ William F. Daniel
	 	 	 	By:
	 	/s/ William F. Daniel
	 

	 	 
	 	 	 	 	 	 
	Name: William F. Daniel	 	 	 	Name: William F. Daniel
	Title: EVP and Company Secretary	 	 	 	Title: Director
	Date: 7 December 2006	 	 	 	Date: 7 December 2006
	 
	 	 	 	 	 	 	 	 
	ELAN PHARMACEUTICALS, INC.	 	 	 	EISAI INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Richard T. Collier
	 	 	 	By:
	 	/s/ Alexander Scott
	 

	 	 
	 	 	 	 	 	 
	Name: Richard T. Collier	 	 	 	Name: Alexander Scott
	Title: EVP & General Counsel	 	 	 	Title: VP. Business Development
	Date: 7 December 2006	 	 	 	Date: December 12, 2006
	 
	 	 	 	 	 	 	 	 
	EISAI CO., LTD.	 	 	 	JULIANNE E. JENNINGS
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Nobuo Deguchi
	 	 	 	By:
	 	/s/ Julianne E. Jennings
	 

	 	 
	 	 	 	 	 	 
	Name: Nobuo Deguchi	 	 	 	Name: Julianne E. Jennings
	Title: Senior Vice President	 	 	 	Title:	 	 
	 

	 	 	 	 	 	 	 	 
	Date: Dec. 14th, 2006	 	 	 	Date: 11 December 2006

13

 

EXHIBIT A

 

 

IN THE UNITED STATES DISTRICT COURT

FOR THE MIDDLE DISTRICT OF NORTH CAROLINA

Durham Division

	 	 	 	 	 	 	 
	DUKE UNIVERSITY, a North Carolina

	 	 	)	 	 	 
	nonprofit and educational institution; and

	 	 	)	 	 	 
	OREXIGEN THERAPEUTICS, INC., a

	 	 	)	 	 	 
	Delaware corporation,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Plaintiffs,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	v.

	 	 	)	 	 	 
	 

	 	 	)	 	 	Civil Action No. 1:04CV00532
	ELAN CORPORATION, plc, an Irish

	 	 	)	 	 	 
	corporation; ELAN PHARMA

	 	 	)	 	 	 
	INTERNATIONAL LTD., an Irish corporation;

	 	 	)	 	 	 
	ELAN PHARMACEUTICALS, INC., a

	 	 	)	 	 	 
	Delaware corporation; EISAI, INC., a Delaware

	 	 	)	 	 	 
	corporation; EISAI CO., LTD., a Japanese

	 	 	)	 	 	 
	corporation; and JULIANNE E. JENNINGS, an

	 	 	)	 	 	 
	individual,

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	Defendants.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 

STIPULATION OF DISMISSAL

     DUKE UNIVERSITY, a North Carolina nonprofit and educational institution; and OREXIGEN
THERAPEUTICS, INC., a Delaware corporation, Plaintiffs, and ELAN CORPORATION, plc, an Irish
corporation; ELAN PHARMA INTERNATIONAL LTD., an Irish corporation; ELAN PHARMACEUTICALS, INC., a
Delaware corporation; EISAI, INC., a Delaware corporation; and EISAI CO., LTD., a Japanese
corporation, and JULIANNE E. JENNINGS, an individual, Defendants, having settled and resolved this
action, HEREBY STIPULATE AND AGREE that this action be, and it hereby is, dismissed with prejudice
pursuant to Fed.R.Civ.P. 41(a)(1)(ii). Each party shall bear its own costs and attorneys’ fees.

 

 

	 	 	 	 	 
	 

	 	 	 	DUKE UNIVERSITY and OREXIGEN
	 

	 	 	 	THERAPEUTICS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Blas P. Arroyo (N.C. Bar # 9860)
	 

	 	 	 	ALSTON & BIRD LLP
	 

	 	 	 	Suite 4000, Bank of America Plaza
	 

	 	 	 	101 South Tryon Street
	 

	 	 	 	Charlotte, NC 28280
	 

	 	 	 	Telephone: (704) 444-1000
	 

	 	 	 	Facsimile: (704) 444-1111
	 
	 	 	 	 
	 

	 	 	 	Craig S. Summers
	 

	 	 	 	Paul A. Stewart
	 

	 	 	 	Sheila N. Swaroop
	 

	 	 	 	KNOBBE MARTENS OLSON & BEAR, LLP
	 

	 	 	 	2040 Main Street, 14th Floor
	 

	 	 	 	Irvine, CA 92614
	 
	 	 	 	 
	 

	 	 	 	ELAN CORPORATION, plc, ELAN PHARMA
	 

	 	 	 	INTERNATIONAL LTD., and ELAN
	 

	 	 	 	PHARMACEUTICALS, INC., and JULIANNE
	 

	 	 	 	E. JENNINGS
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Mack Sperling (N.C. Bar # 11094)
	 

	 	 	 	BROOKS, PIERCE, MCLENDON,
	 

	 	 	 	HUMPHREY & LEONARD LLP
	 

	 	 	 	200 Renaissance Plaza
	 

	 	 	 	230 North Elm St.
	 

	 	 	 	PO Box 26000
	 

	 	 	 	Greensboro, NC 27420
	 

	 	 	 	Telephone: (336) 373-8850
	 

	 	 	 	Facsimile: (336) 378-1001
	 
	 	 	 	 
	 

	 	 	 	Steven C. Cherney
	 

	 	 	 	LATHAM & WATKINS LLP
	 

	 	 	 	885 Third Ave., Suite 1000
	 

	 	 	 	New York, NY 10022-4802

- 2 -

 

	 	 	 	 	 
	 

	 	 	 	EISAI, INC. and EISAI CO., LTD.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Richard A. Coughlin (N.C. Bar #                     )
	 

	 	 	 	SMITH MOORE LLP
	 

	 	 	 	Wachovia Tower, Suite 1400
	 

	 	 	 	300 North Greene Street
	 

	 	 	 	Post Office Box 21927
	 

	 	 	 	Greensboro, NC 27420
	 

	 	 	 	Telephone: (336) 378-5471
	 

	 	 	 	Facsimile: (336) 378-5400
	 
	 	 	 	 
	 

	 	 	 	Christopher N. Sipes, Esq.
	 

	 	 	 	Natalie M. Derzko, Esq.
	 

	 	 	 	Jason M. Knott, Esq.
	 

	 	 	 	COVINGTON & BURLING
	 

	 	 	 	1201 Pennsylvania Ave. NW
	 

	 	 	 	Washington, DC 20004
	 
	 	 	 	 
	 

	 	 	 	Scott A. Schrader, Esq.
	 

	 	 	 	COVINGTON & BURLING
	 

	 	 	 	One Front Street
	 

	 	 	 	San Francisco, CA 94111

SO
ORDERED this ___ day of                                         , 2006.

	 	 	 
	 	 	 
	United States District Judge

	 	 

- 3 -

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