Document:

EXHIBIT 10.31

 

CREDIT AND GUARANTY
AGREEMENT

 

dated as of March 9, 2007

 

among

 

RELIANT PHARMACEUTICALS,
INC.,

 

CERTAIN SUBSIDIARIES OF
RELIANT PHARMACEUTICALS, INC.,

as Guarantor Subsidiaries,

 

VARIOUS LENDERS,

 

GOLDMAN SACHS CREDIT
PARTNERS L.P.,

as Sole Lead Arranger, Sole Bookrunner, 

and Syndication Agent

 

and

 

GOLDMAN SACHS CREDIT
PARTNERS L.P.,

as Administrative Agent And Collateral Agent

 

 

$215,000,000 Senior Secured
Credit Facility

 

 

 

TABLE
OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  DEFINITIONS AND INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Definitions

  	
  1

  
	
  1.2.

  	
  Accounting Terms

  	
  26

  
	
  1.3.

  	
  Interpretation, etc

  	
  26

  
	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  LOANS

  	
  26

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Initial Term Loans

  	
  26

  
	
  2.2.

  	
  Delayed Draw Term Loans

  	
  27

  
	
  2.3.

  	
  [RESERVED]

  	
  28

  
	
  2.4.

  	
  [RESERVED]

  	
  28

  
	
  2.5.

  	
  Pro Rata Shares; Availability
  of Funds

  	
  28

  
	
  2.6.

  	
  Use of Proceeds

  	
  28

  
	
  2.7.

  	
  Evidence of Debt;
  Register; Lenders’ Books and Records; Notes

  	
  29

  
	
  2.8.

  	
  Interest on Loans

  	
  29

  
	
  2.9.

  	
  Conversion/Continuation

  	
  30

  
	
  2.10.

  	
  Default Interest

  	
  31

  
	
  2.11.

  	
  Fees

  	
  31

  
	
  2.12.

  	
  Scheduled Principal
  Payments

  	
  32

  
	
  2.13.

  	
  Voluntary Prepayments

  	
  32

  
	
  2.14.

  	
  Mandatory Prepayments

  	
  33

  
	
  2.15.

  	
  Application of Prepayments

  	
  34

  
	
  2.16.

  	
  General Provisions
  Regarding Payments.

  	
  35

  
	
  2.17.

  	
  Ratable Sharing

  	
  36

  
	
  2.18.

  	
  Making or Maintaining
  Eurodollar Rate Loans

  	
  37

  
	
  2.19.

  	
  Increased Costs; Capital
  Adequacy

  	
  38

  
	
  2.20.

  	
  Taxes; Withholding, etc.

  	
  39

  
	
  2.21.

  	
  Obligation to Mitigate

  	
  42

  
	
  2.22.

  	
  Defaulting Lenders

  	
  42

  
	
  2.23.

  	
  Removal or Replacement of
  a Lender

  	
  42

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  CONDITIONS PRECEDENT

  	
  43

  
	
   

  	
   

  	
   

  
	
  3.1.

  	
  Closing Date

  	
  43

  
	
  3.2.

  	
  Conditions to Delayed Draw
  Term Loans

  	
  46

  
	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
  47

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Organization; Requisite
  Power and Authority; Qualification

  	
  47

  
	
  4.2.

  	
  Capital Stock and
  Ownership

  	
  47

  
	
  4.3.

  	
  Due Authorization

  	
  47

  
	
  4.4.

  	
  No Conflict, Violation,
  Default.

  	
  47

  
	
  4.5.

  	
  Governmental Consents

  	
  48

  

 

i

 

	
  4.6.

  	
  Binding Obligation

  	
  48

  
	
  4.7.

  	
  Historical Financial
  Statements

  	
  48

  
	
  4.8.

  	
  Projections

  	
  48

  
	
  4.9.

  	
  No Material Adverse Change

  	
  49

  
	
  4.10.

  	
  Liquidity Option
  Agreements

  	
  49

  
	
  4.11.

  	
  Adverse Proceedings, etc.

  	
  49

  
	
  4.12.

  	
  Payment of Taxes

  	
  49

  
	
  4.13.

  	
  Properties

  	
  49

  
	
  4.14.

  	
  Environmental Matters

  	
  50

  
	
  4.15.

  	
  No Defaults

  	
  51

  
	
  4.16.

  	
  Material Contracts

  	
  51

  
	
  4.17.

  	
  Governmental Regulation.

  	
  51

  
	
  4.18.

  	
  Margin Stock

  	
  52

  
	
  4.19.

  	
  Employee Matters

  	
  52

  
	
  4.20.

  	
  Employee Benefit Plans

  	
  52

  
	
  4.21.

  	
  Certain Fees

  	
  52

  
	
  4.22.

  	
  Solvency

  	
  52

  
	
  4.23.

  	
  [RESERVED]

  	
  52

  
	
  4.24.

  	
  Permits, Compliance with
  Statutes, etc.

  	
  52

  
	
  4.25.

  	
  Disclosure

  	
  53

  
	
  4.26.

  	
  New Drug Applications

  	
  53

  
	
  4.27.

  	
  Quality of Inventory

  	
  53

  
	
  4.28.

  	
  Non-disclosure and
  Confidentiality Policies

  	
  53

  
	
  4.29.

  	
  Disclosure of Regulatory
  Approvals

  	
  53

  
	
  4.30.

  	
  Patriot Act

  	
  53

  
	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  AFFIRMATIVE COVENANTS

  	
  54

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Financial Statements and
  Other Reports

  	
  54

  
	
  5.2.

  	
  Existence

  	
  58

  
	
  5.3.

  	
  Payment of Taxes and
  Claims

  	
  58

  
	
  5.4.

  	
  Maintenance of Properties

  	
  58

  
	
  5.5.

  	
  Insurance

  	
  58

  
	
  5.6.

  	
  Books and Records;
  Inspections

  	
  59

  
	
  5.7.

  	
  Lenders Meetings

  	
  59

  
	
  5.8.

  	
  Compliance with Laws

  	
  59

  
	
  5.9.

  	
  Environmental

  	
  59

  
	
  5.10.

  	
  Subsidiaries

  	
  61

  
	
  5.11.

  	
  Additional Material Real
  Estate Assets

  	
  61

  
	
  5.12.

  	
  Segregated Account for
  Working Capital Collateral

  	
  61

  
	
  5.13.

  	
  Interest Rate Protection

  	
  61

  
	
  5.14.

  	
  Further Assurances

  	
  62

  
	
  5.15.

  	
  Personal Property
  Collateral Access Agreement

  	
  62

  
	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  NEGATIVE COVENANTS

  	
  62

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Indebtedness

  	
  62

  

 

ii

 

	
  6.2.

  	
  Liens

  	
  64

  
	
  6.3.

  	
  [RESERVED]

  	
  66

  
	
  6.4.

  	
  No Further Negative
  Pledges

  	
  66

  
	
  6.5.

  	
  Restricted Junior Payments

  	
  66

  
	
  6.6.

  	
  Restrictions on Subsidiary
  Distributions

  	
  67

  
	
  6.7.

  	
  Investments

  	
  67

  
	
  6.8.

  	
  Financial Covenants

  	
  68

  
	
  6.9.

  	
  Fundamental Changes;
  Disposition of Assets; Acquisitions

  	
  69

  
	
  6.10.

  	
  Disposal of Subsidiary
  Interests

  	
  70

  
	
  6.11.

  	
  Sales and Lease-Backs

  	
  70

  
	
  6.12.

  	
  Transactions with
  Shareholders and Affiliates

  	
  71

  
	
  6.13.

  	
  Conduct of Business

  	
  71

  
	
  6.14.

  	
  [RESERVED]

  	
  71

  
	
  6.15.

  	
  Provisions Related to
  Joint Ventures

  	
  71

  
	
  6.16.

  	
  Amendments or Waivers with
  Respect to Certain Indebtedness

  	
  71

  
	
  6.17.

  	
  Fiscal Year

  	
  71

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  GUARANTY

  	
  71

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Guaranty of the
  Obligations

  	
  71

  
	
  7.2.

  	
  Contribution by Guarantor
  Subsidiaries

  	
  72

  
	
  7.3.

  	
  Payment by Guarantor
  Subsidiaries

  	
  72

  
	
  7.4.

  	
  Liability of Guarantor
  Subsidiaries Absolute

  	
  73

  
	
  7.5.

  	
  Waivers by Guarantor
  Subsidiaries

  	
  74

  
	
  7.6.

  	
  Guarantor Subsidiaries’
  Rights of Subrogation, Contribution, etc

  	
  75

  
	
  7.7.

  	
  Subordination of Other
  Obligations

  	
  75

  
	
  7.8.

  	
  Continuing Guaranty

  	
  75

  
	
  7.9.

  	
  Authority of Guarantor
  Subsidiaries or Company

  	
  76

  
	
  7.10.

  	
  Financial Condition of
  Company

  	
  76

  
	
  7.11.

  	
  Bankruptcy, etc

  	
  76

  
	
  7.12.

  	
  Discharge of Guaranty Upon
  Sale of Guarantor Subsidiary

  	
  76

  
	
  7.13.

  	
  Restrictions on Guaranty

  	
  77

  
	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  EVENTS OF DEFAULT

  	
  77

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  Events of Default

  	
  77

  
	
  8.2.

  	
  Cure Right

  	
  79

  
	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  AGENTS

  	
  80

  
	
   

  	
   

  	
   

  
	
  9.1.

  	
  Appointment of Agents

  	
  80

  
	
  9.2.

  	
  Powers and Duties

  	
  80

  
	
  9.3.

  	
  General Immunity

  	
  80

  
	
  9.4.

  	
  Agents Entitled to Act as
  Lender

  	
  81

  
	
  9.5.

  	
  Lenders’ Representations,
  Warranties and Acknowledgment

  	
  81

  
	
  9.6.

  	
  Right to Indemnity

  	
  81

  
	
  9.7.

  	
  Successor Administrative
  Agent

  	
  82

  

 

iii

 

	
  9.8.

  	
  Collateral Documents and
  Guaranty

  	
  83

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  MISCELLANEOUS

  	
  84

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Notices

  	
  84

  
	
  10.2.

  	
  Expenses

  	
  85

  
	
  10.3.

  	
  Indemnity

  	
  86

  
	
  10.4.

  	
  Set-Off

  	
  86

  
	
  10.5.

  	
  Amendments and Waivers

  	
  87

  
	
  10.6.

  	
  Successors and Assigns;
  Participations

  	
  88

  
	
  10.7.

  	
  Independence of Covenants

  	
  91

  
	
  10.8.

  	
  Survival of
  Representations, Warranties and Agreements

  	
  91

  
	
  10.9.

  	
  No Waiver; Remedies
  Cumulative

  	
  91

  
	
  10.10.

  	
  Marshalling; Payments Set
  Aside

  	
  92

  
	
  10.11.

  	
  Severability.

  	
  92

  
	
  10.12.

  	
  Obligations Several;
  Independent Nature of Lenders’ Rights

  	
  92

  
	
  10.13.

  	
  Headings

  	
  92

  
	
  10.14.

  	
  APPLICABLE LAW

  	
  92

  
	
  10.15.

  	
  CONSENT TO JURISDICTION

  	
  93

  
	
  10.16.

  	
  WAIVER OF JURY TRIAL

  	
  93

  
	
  10.17.

  	
  Confidentiality

  	
  93

  
	
  10.18.

  	
  Usury Savings Clause

  	
  94

  
	
  10.19.

  	
  Counterparts

  	
  94

  
	
  10.20.

  	
  Effectiveness

  	
  94

  
	
  10.21.

  	
  Patriot Act

  	
  94

  
	
  10.22.

  	
  Electronic Execution of
  Assignments

  	
  94

  

 

iv

 

	
  APPENDICES:

  	
   

  	
  A-1

  	
   

  	
  Initial Term Loan
  Commitments

  
	
   

  	
   

  	
  A-2

  	
   

  	
  Delayed Draw Term Loan
  Commitments

  
	
   

  	
   

  	
  B

  	
   

  	
  Notice Addresses

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
  2.14(c)

  	
   

  	
  Outstanding Warrants

  
	
   

  	
   

  	
  4.1

  	
   

  	
  Jurisdictions of
  Organization and Qualification

  
	
   

  	
   

  	
  4.2

  	
   

  	
  Capital Stock and
  Ownership

  
	
   

  	
   

  	
  4.7

  	
   

  	
  Certain Liabilities

  
	
   

  	
   

  	
  4.9

  	
   

  	
  Certain Changes

  
	
   

  	
   

  	
  4.11

  	
   

  	
  Adverse Proceedings

  
	
   

  	
   

  	
  4.12

  	
   

  	
  Taxes

  
	
   

  	
   

  	
  4.13

  	
   

  	
  Title; Real Estate Assets

  
	
   

  	
   

  	
  4.13(c)

  	
   

  	
  Intellectual Property
  Rights

  
	
   

  	
   

  	
  4.16

  	
   

  	
  Material Contracts

  
	
   

  	
   

  	
  4.17(b)

  	
   

  	
  Non-compliance with
  Governmental Regulation

  
	
   

  	
   

  	
  4.24

  	
   

  	
  Legal Compliance

  
	
   

  	
   

  	
  4.26

  	
   

  	
  New Drug Applications

  
	
   

  	
   

  	
  4.29

  	
   

  	
  Material Regulatory
  Approvals; Material Patents and Patent Applications

  
	
   

  	
   

  	
  6.1(p)

  	
   

  	
  Leased and Financed
  Vehicles

  
	
   

  	
   

  	
  6.2(l)

  	
   

  	
  Certain Liens

  
	
   

  	
   

  	
  6.7

  	
   

  	
  Certain Investments

  
	
   

  	
   

  	
  6.12

  	
   

  	
  Certain Affiliate
  Transaction

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
  A-1

  	
   

  	
  Form
  of Funding Notice

  
	
   

  	
   

  	
  A-2

  	
   

  	
  Form
  of Conversion/Continuation Notice

  
	
   

  	
   

  	
  B-1

  	
   

  	
  Form
  of Initial Term Loan Note

  
	
   

  	
   

  	
  B-2

  	
   

  	
  Form
  of Delayed Draw Term Loan Note

  
	
   

  	
   

  	
  C

  	
   

  	
  Form
  of Compliance Certificate

  
	
   

  	
   

  	
  D-1

  	
   

  	
  Form
  of Opinion of Latham & Watkins LLP

  
	
   

  	
   

  	
  D-2

  	
   

  	
  Form
  of Opinion of Burns & Levinson LLP

  
	
   

  	
   

  	
  E

  	
   

  	
  Form
  of Assignment Agreement

  
	
   

  	
   

  	
  F

  	
   

  	
  Form
  of Certificate Re Non-bank Status

  
	
   

  	
   

  	
  G-1

  	
   

  	
  Form
  of Closing Date Certificate

  
	
   

  	
   

  	
  G-2

  	
   

  	
  Form
  of Solvency Certificate

  
	
   

  	
   

  	
  H

  	
   

  	
  Form
  of Counterpart Agreement

  
	
   

  	
   

  	
  I

  	
   

  	
  [Reserved]

  
	
   

  	
   

  	
  J

  	
   

  	
  [Reserved]

  
	
   

  	
   

  	
  K

  	
   

  	
  Form
  of Personal Property Collateral Access Agreement

  

 

v

 

CREDIT AND GUARANTY AGREEMENT

 

This CREDIT AND
GUARANTY AGREEMENT, dated as of March 9, 2007, is entered into by
and among RELIANT PHARMACEUTICALS, INC., a
corporation organized under the laws of the state of Delaware (“Company”), CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantor Subsidiaries, the Lenders party hereto from
time to time, GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”) as Lender, Sole Lead Arranger, Sole Bookrunner,
Syndication Agent (in such capacity, “Syndication Agent”)
as Administrative Agent (together with its permitted successors in such
capacity, “Administrative Agent”) and
Collateral Agent (together with its permitted successor in such capacity, “Collateral Agent”).

 

RECITALS:

 

WHEREAS, capitalized
terms used in these Recitals shall have the respective meanings set forth for
such terms in Section 1.1 hereof;

 

WHEREAS, Lenders have
agreed to make term loans to Company, in an aggregate principal amount not to
exceed $215,000,000, of which $170,000,000 will be borrowed on the Closing Date
and $45,000,000 will be available on a delayed draw basis. The proceeds of the
Initial Term Loans will be used to refinance the Existing Specified
Indebtedness with any excess for working capital, Permitted Acquisitions,
permitted capital expenditures, other general corporate purposes and to pay
fees and expenses incurred in connection with this Agreement and the amendment
to the Permitted Working Capital Facility of even date herewith. The proceeds
of the Delayed Draw Term Loans will be used for working capital, Permitted
Acquisitions, permitted capital expenditures and other general corporate
purposes;

 

WHEREAS, Company has
agreed to secure all of its Obligations by granting to Collateral Agent, for
the benefit of Secured Parties, (1)  a First Priority Lien on
substantially all of its assets, including a pledge of all of the Capital Stock
of each of its Domestic Subsidiaries, if any, and 100% of the non-voting
Capital Stock and 65% of the voting Capital Stock of each of its first-tier
Foreign Subsidiaries, if any, but excluding the accounts receivable that
comprise the Working Capital Collateral, and (2)  a second priority lien
on the Working Capital Collateral; and

 

WHEREAS, Guarantor
Subsidiaries have agreed to guarantee the obligations of Company hereunder and
to secure their respective Obligations by granting to Collateral Agent, for the
benefit of Secured Parties, a First Priority Lien on substantially all of their
respective assets, including a pledge of all of the Capital Stock of each of
their respective Domestic Subsidiaries, if any, and 100% of the nonvoting
Capital Stock and 65% of the voting Capital Stock of each of their respective
first-tier Foreign Subsidiaries, if any.

 

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

 

SECTION 1.         DEFINITIONS AND INTERPRETATION

 

1.1.         Definitions. The following
terms used herein, including in the preamble, recitals, exhibits and schedules
hereto, shall have the following meanings:

 

“Adjusted
Eurodollar Rate” means, for any Interest Rate Determination Date
with respect to an Interest Period for a Eurodollar Rate Loan, the rate per annum
obtained by dividing (and rounding upward to the next whole multiple of 1/16 of
1%) (i) (a) the rate per annum (rounded to the nearest 1/100 of 1%) 

 

 

equal
to the rate determined by Administrative Agent to be the offered rate which
appears on the page of the Telerate Screen which displays an average British
Bankers Association Interest Settlement Rate (such page currently being page
number 3740 or 3750, as applicable) for deposits (for delivery on the first day
of such period) with a term equivalent to such period in Dollars, determined as
of approximately 11:00 a.m. (London, England time) on such Interest Rate
Determination Date, or (b) in the event the rate referenced in the
preceding clause (a) does not appear on such page or service or if such
page or service shall cease to be available, the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent to be
the offered rate on such other page or other service which displays an average
British Bankers Association Interest Settlement Rate for deposits (for delivery
on the first day of such period) with a term equivalent to such period in
Dollars, determined as of approximately 11:00 a.m. (London, England time) on
such Interest Rate Determination Date, or (c) in the event the rates
referenced in the preceding clauses (a) and (b) are not available,
the rate per annum (rounded to the nearest 1/100 of 1%) equal to the offered
quotation rate to first class banks in the London interbank market by JPMorgan
Chase Bank, N.A. for deposits (for delivery on the first day of the relevant
period) in Dollars of amounts in same day funds comparable to the principal
amount of the applicable Loan of Administrative Agent, in its capacity as a
Lender, for which the Adjusted Eurodollar Rate is then being determined with
maturities comparable to such period as of approximately 11:00 a.m. (London,
England time) on such Interest Rate Determination Date, by (ii)  an amount
equal to (a) one minus (b) the Applicable Reserve Requirement.

 

“Administrative
Agent” as defined in the preamble hereto.

 

“Adverse
Proceeding” means any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any Governmental Authority,
domestic or foreign (including any Environmental Claims), whether pending or,
to the Knowledge of Company or any of its Subsidiaries, threatened in writing
against or adversely affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries.

 

“Affected
Lender” as defined in Section 2.18(b).

 

“Affected
Loans” as defined in Section 2.18(b).

 

“Affiliate”
means, as applied to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, that Person. For the
purposes of this definition, “control” (including, with correlative meanings,
the terms “controlling”, “controlled by” and “under common control with”), as
applied to any Person, means the possession, directly or indirectly, of the
power (i) to vote 10% or more of the Securities having ordinary voting
power for the election of directors (or individuals performing comparable
functions) of such Person or (ii)  to direct or cause the direction of the
management and policies of that Person, whether through the ownership of voting
securities or by contract or otherwise.

 

“Agent”
means each of GSCP, Syndication Agent, Administrative Agent and Collateral
Agent.

 

“Agent
Affiliates” as defined in Section 10.1(b).

 

“Aggregate
Amounts Due” as defined in Section 2.17.

 

“Aggregate
Payments” as defined in Section 7.2.

 

2

 

“Agreement”
means this Credit and Guaranty Agreement, dated as of March 9, 2007, as it may
be amended, restated, supplemented or otherwise modified from time to time.

 

“Applicable
Margin” means (i) with respect to Eurodollar Rate Loans, 3.25%
per annum and (ii)  with respect to Base Rate Loans, 2.25% per annum.

 

“Applicable
Reserve Requirement” means, at any time, for any Eurodollar Rate
Loan, the maximum rate, expressed as a decimal, at which reserves (including,
without limitation, any basic marginal, special, supplemental, emergency or
other reserves) are required to be maintained with respect thereto against “Eurocurrency
liabilities” (as such term is defined in Regulation D) under regulations issued
from time to time by the Board of Governors of the Federal Reserve System or
other applicable banking regulator. Without limiting the effect of the
foregoing, the Applicable Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
applicable Adjusted Eurodollar Rate or any other interest rate of a Loan is to
be determined, or (ii)  any category of extensions of credit or other
assets which include Eurodollar Rate Loans. A Eurodollar Rate Loan shall be deemed
to constitute Eurocurrency liabilities and as such shall be deemed subject to
reserve requirements without benefit of credit for proration, exceptions or
offsets that may be available from time to time to the applicable Lender. The
rate of interest on Eurodollar Rate Loans shall be adjusted automatically on
and as of the effective date of any change in the Applicable Reserve
Requirement.

 

“Approved
Electronic Communications” means any notice, demand, communication,
information, document or other material that any Credit Party provides to
Administrative Agent pursuant to any Credit Document or the transactions
contemplated therein which is distributed to the Agents or to the lenders by
means of electronic communications pursuant to Section 10.1(b).

 

“Asset Sale”
means a sale, lease or sub-lease (as lessor or sublessor), sale-and-leaseback,
assignment, conveyance, transfer or other disposition to, or any exchange of
property with, any Person (other than Company or any Guarantor Subsidiary), in
one transaction or a series of transactions, of all or any part of Company’s or
any of its Subsidiaries’ businesses, assets (other than Cash or Cash
Equivalents sold for the fair market value thereof) or properties of any kind,
whether real, personal, or mixed and whether tangible or intangible, whether
now owned or hereafter acquired, including, without limitation, the Capital
Stock of any of Company’s Subsidiaries and Unrestricted Subsidiaries, other
than (i) inventory sold, leased or otherwise disposed of in the ordinary
course of business (excluding any such sales by operations or divisions
discontinued or to be discontinued) and obsolete, worn out or surplus property
and (ii)  licenses and sublicenses granted by Company in the ordinary
course of business to enable third parties to manufacture inventory for sale by
Company or its Subsidiaries, or otherwise provide goods or services to Company
or its Subsidiaries, provided, that such licenses and sublicenses do not
permit the manufacture of products for, or the provision of services to,
Persons other than Company or its Subsidiaries and Persons providing services
to Company and its Subsidiaries.

 

“Assignment
Agreement” means an Assignment and Assumption Agreement
substantially in the form of Exhibit E, with such amendments or
modifications as may be approved by Administrative Agent.

 

“Authorized
Officer” means, as applied to any Person, any individual holding the
position of chief executive officer, president or one of its vice presidents
(or the equivalent thereof), and such Person’s chief financial officer, chief
operating officer, general counsel, treasurer or controller.

 

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

 

3

 

“Base Rate”
means, for any day, a rate per annum equal to the greater of (i) the Prime
Rate in effect on such day and (ii)  the Federal Funds Effective Rate in
effect on such day plus 1⁄2 of 1%. Any change in the Base Rate due to a change in
the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective day of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively.

 

“Base Rate
Loan” means a Loan bearing interest at a rate determined by
reference to the Base Rate.

 

“Beneficiary”
means each Agent and each Lender.

 

“Business Day”
means (i) any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of New York or is a day on which banking
institutions located in such state are authorized or required by law or other
governmental action to close and (ii)  with respect to all notices,
determinations, fundings and payments in connection with the Adjusted
Eurodollar Rate or any Eurodollar Rate Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the London interbank market.

 

“Capital
Lease” means, as applied to any Person, any lease of any property (whether
real, personal or mixed) by that Person as lessee that, in conformity with
GAAP, is or should be accounted for as a capital lease on the balance sheet of
that Person.

 

“Capital
Stock” means any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation),
including, without limitation, any preferred interests and preferred shares,
partnership interests and membership interests, and any and all warrants,
rights or options to purchase or other arrangements or rights to acquire any of
the foregoing.

 

“Cash”
means money, currency or a credit balance in any demand or Deposit Account.

 

“Cash
Equivalents” means, as at any date of determination,
(i) marketable securities (a) issued or directly and unconditionally
guaranteed as to interest and principal by the United States Government or
(b) issued by any agency of the United States the obligations of which are
backed by the full faith and credit of the United States, in each case maturing
within one year after such date; (ii)  marketable direct obligations
issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof, in each
case maturing within one year after such date and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody’s; (iii)  commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 from S&P or at least P-1 from Moody’s; (iv) 
certificates of deposit or bankers’ acceptances maturing within one year after
such date and issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any state thereof
or the District of Columbia or Puerto Rico that (a) is at least “adequately
capitalized” (as defined in the regulations of its primary Federal banking
regulator) and (b) has Tier 1 capital (as defined in such regulations) of
not less than $100,000,000; and (v)  shares of any money market mutual
fund that (a) has substantially all of its assets invested continuously in
the types of investments referred to in clauses (i) and (ii)  above,
(b) has net assets of not less than $500,000,000, and (c) has the
highest rating obtainable from either S&P or Moody’s.

 

“Certificate
re Non-Bank Status” means a certificate substantially in the form of
Exhibit F.

 

“CFC”
means a “controlled foreign corporation” within the meaning of Section 957
of the Code.

 

4

 

“cGMPs”
means the regulatory requirements for current good manufacturing practices
promulgated by the United States FDA under the Food and Drug Act, including at
21 C.F.R. § 210 et. seq. and
under the Public Health Service Act, Biological Products, 21 C.F.R. §§ 610-10,
as the same may be amended from time to time.

 

“Change of
Control” means, at any time,

 

(i)            any Person or “group” (within the meaning of Rules 13d-3 and
13d-5 under the Exchange Act) other than Specified Holders (a) prior to an
IPO shall have acquired beneficial ownership of 50% or more on a fully diluted
basis of the voting and/or economic interest in the Capital Stock of Company,
(b) after an IPO shall have acquired beneficial ownership of 35% or more
on a fully diluted basis of the voting and/or economic interest in the Capital
Stock of Company or (c) shall have obtained the power (whether or not
exercised) to elect a majority of the members of the board of directors (or
similar governing body) of Company;

 

(ii)           prior to an IPO, the Specified Holders fail to hold at least
25% of the Capital Stock of Company; and

 

(iii)          after an IPO the majority of the seats (other than vacant
seats) on the board of directors (or similar governing body) of Company cease
to be occupied by Persons who either (a) were members of the board of
directors of Company on the effective date of the IPO or (b) were nominated
for election by the board of directors of Company, a majority of whom were
directors on the effective date of the IPO or whose election or nomination for
election was previously approved by a majority of such director.

 

“Closing Date”
means the date of this Agreement, which shall be the date on which the Initial
Term Loans are made pursuant to Section 2.1.

 

“Closing Date
Certificate” means a Closing Date Certificate substantially in the
form of Exhibit G-1.

 

“Collateral”
means, collectively, all of the owned real property, personal property, mixed
property (including Capital Stock) and the Interest Reserve Funds in which
Liens are purported to be granted pursuant to the Collateral Documents as
security for the Obligations.

 

“Collateral
Agent” as defined in the preamble hereto.

 

“Collateral
Documents” means the Pledge and Security Agreement and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to Collateral
Agent, for the benefit of Secured Parties, a Lien on any owned real property,
personal property or mixed property of that Credit Party as security for the
Obligations.

 

“Collateral
Questionnaire” means a certificate in form satisfactory to Collateral
Agent that provides information with respect to the personal or mixed property
of each Credit Party.

 

“Commitment”
means an Initial Term Loan Commitment and/or a Delayed Draw Term Loan
Commitment, as the context may require.

 

“Company”
as defined in the preamble hereto.

 

5

 

“Compliance
Certificate” means a Compliance Certificate substantially in the
form of Exhibit C.

 

“Consolidated
Adjusted EBITDA” means, for any period, an amount determined for
Company and its Subsidiaries on a consolidated basis equal to
(i) Consolidated Net Income for such period, plus, to the extent reducing
Consolidated Net Income for such period, the sum, without duplication, of
amounts for (a) consolidated interest expense, (b) provisions for
taxes based on income, (c) total depreciation expense, (d)  total
amortization expense, (e)  other non-cash charges reducing Consolidated
Net Income, but excluding any such non-cash charge in respect of an item that
was included in Consolidated Net Income in a prior period or that results from
the write-down or write-off of inventory, (f)  fees and expenses incurred
during such period in connection with the negotiation, execution and delivery
of the Credit Documents and (g)  fees and expenses incurred during such
period in connection with any proposed IPO, minus (ii) 
(a) other non-cash gains increasing Consolidated Net Income for such
period and (b) other than Net Exercise Withholding Payments and payments
with respect to SARs made in accordance with their terms, any cash
disbursements during such period that relate to non-cash charges or the losses
added to Consolidated Net Income pursuant to clause (i)(e)  above.

 

“Consolidated
Capital Expenditures” means, for any period, the aggregate of all
expenditures of Company and its Subsidiaries during such period determined on a
consolidated basis that, in accordance with GAAP, are or should be included in “purchase
of property and equipment” or similar items reflected in the consolidated
statement of cash flows of Company and its Subsidiaries; provided that
Consolidated Capital Expenditures shall not include (i) expenditures to
the extent they are financed with the cash proceeds of a prepayment event
described in Sections 2.14(a) or (b), so long as such proceeds are
reinvested pursuant to the respective provisos thereto, (ii)  expenditures
made by Company or any Subsidiary as tenant in leasehold improvements, to the
extent that such expenditures have been reimbursed by the landlord and
(iii)  expenditures to the extent that they are financed with the net cash
proceeds from the issuance of Capital Stock of the Company (or an account of
existing Capital Stock of the Company) not later than six months after receipt
of such proceeds by the Company.

 

“Consolidated
Cash Interest Expense” means, for any period, total interest expense
(including that portion attributable to Capital Leases in accordance with GAAP
and capitalized interest) of Company and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of Company and its
Subsidiaries, including all commissions, discounts and other fees and charges
owed with respect to letters of credit and net costs under Interest Rate
Agreements, but excluding, however, any amount not payable in Cash, any amounts
paid in respect of penalties, charges or similar items (including breakage) in
respect of the Existing Specified Indebtedness that would otherwise constitute
interest expense in accordance with GAAP and any amounts referred to in Section 2.11
payable on or before the Closing Date.

 

“Consolidated
Current Assets” means, as at any date of determination, the total
assets of Company and its Subsidiaries on a consolidated basis that may
properly be classified as current assets in conformity with GAAP, excluding
Cash and Cash Equivalents.

 

“Consolidated
Current Liabilities” means, as at any date of determination, the
total liabilities of Company and its Subsidiaries on a consolidated basis that
may properly be classified as current liabilities in conformity with GAAP,
excluding borrowings under the Permitted Working Capital Facility and the
current portion of long-term debt.

 

“Consolidated
Excess Cash Flow” means, for any period, an amount (if positive)
equal to: (i) the sum, without duplication, of the amounts for such period
of (a) Consolidated Adjusted EBITDA, plus (b) the Consolidated
Working Capital Adjustment, minus (ii)  the sum, without
duplication, of the

 

6

 

amounts
for such period paid in cash from operating cash flow of (a) scheduled
repayments of Indebtedness for borrowed money and Capital Leases (excluding
repayments of revolving loans except to the extent the commitments in respect
thereof are permanently reduced in connection with such repayments and
excluding imputed interest expense in respect of Capital Leases),
(b) Consolidated Capital Expenditures (net of any proceeds of (y) 
any related financings with respect to such expenditures and (z) any sales of
assets used to finance such expenditures), (c) Consolidated Cash Interest
Expense, (d)  provisions for taxes based on income of Company and its
Subsidiaries paid in cash during such period, (e)  Cash payments made by
Company and its consolidated subsidiaries as part of the purchase price for a
Permitted Acquisition and expenses incurred to consummate such Permitted
Acquisition, and (f)  fees and expenses incurred during such period in
connection with the negotiation, execution and delivery of the Credit
Documents, the Working Capital Facility Credit Agreement, the Working Capital
Facility Security Agreement and any proposed IPO and fees, penalties and
expenses incurred under the Existing Specified Indebtedness, minus
(iii)  the Milestone Payment.

 

“Consolidated
Net Income” means, for any period, (i) the net income (or loss)
of Company and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period determined in conformity with GAAP, minus
(ii)  (a) the income (or loss) of any Person (other than a Subsidiary
of Company) in which any other Person (other than Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary of Company or
is merged into or consolidated with Company or any of its Subsidiaries or that
Person’s assets are acquired by Company or any of its Subsidiaries,
(c) the income of any Subsidiary of Company to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of that income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, (d)  any after-tax
gains or losses attributable to Asset Sales or returned surplus assets of any
Pension Plan, and (e)  (to the extent not included in clauses
(a) through (d)  above) any net extraordinary gains or net
extraordinary losses.

 

“Consolidated
Total Debt” means, as at any date of determination, the aggregate
stated balance sheet amount of all Indebtedness of Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

 

“Consolidated
Working Capital” means, as at any date of determination, the excess
of Consolidated Current Assets over Consolidated Current Liabilities.

 

“Consolidated
Working Capital Adjustment” means, for any period on a consolidated
basis, the amount (which may be a negative number) by which Consolidated
Working Capital as of the beginning of such period exceeds (or is less than)
Consolidated Working Capital as of the end of such period.

 

“Contractual
Obligation” means, as applied to any Person, any provision of any
Security issued by that Person or of any indenture, mortgage, deed of trust,
contract, undertaking, agreement or other instrument to which that Person is a
party or by which it or any of its properties is bound or to which it or any of
its properties is subject.

 

“Contributing
Guarantors” as defined in Section 7.2.

 

“Conversion/Continuation
Date” means the effective date of a continuation or conversion, as
the case may be, as set forth in the applicable Conversion/Continuation Notice.

 

7

 

“Conversion/Continuation
Notice” means a Conversion/Continuation Notice substantially in the
form of Exhibit A-2.

 

“Counterpart
Agreement” means a Counterpart Agreement substantially in the form
of Exhibit H delivered by a Credit Party pursuant to Section 5.10.

 

“Credit Date”
means the date of a Credit Extension.

 

“Credit
Document” means any of this Agreement, the Notes, if any, the
Collateral Documents, the Working Capital Intercreditor Agreement and all other
documents, instruments or agreements executed and delivered by a Credit Party
for the benefit of any Agent, or any Lender in connection herewith, and
including, for the avoidance of doubt, any Counterpart Agreement.

 

“Credit
Extension” means the making of the Loans.

 

“Credit Party”
means each Person (other than any Agent or any Lender or any other
representative thereof) from time to time party to a Credit Document.

 

“Cure Amount”
as defined in Section 8.2.

 

“Cure Right”
as defined in Section 8.2.

 

“Currency
Agreement” means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Company’s and its Subsidiaries’
operations and not for speculative purposes.

 

“Default”
means a condition or event that, after notice or lapse of time or both, would
constitute an Event of Default.

 

“Default
Excess” means, with respect to any Defaulting Lender, the excess, if
any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding
principal amount of Loans of all Lenders (calculated as if all Defaulting
Lenders (other than such Defaulting Lender) had funded all of their respective
Defaulted Loans) over the aggregate outstanding principal amount of all Loans
of such Defaulting Lender.

 

“Default
Period” means, with respect to any Defaulting Lender, the period
commencing on the date of the applicable Funding Default and ending on the
earliest of the following dates: 
(i) the date on which all Commitments are cancelled or terminated
and/or the Obligations are declared or become immediately due and payable,
(ii)  the date on which (a) the Default Excess with respect to such
Defaulting Lender shall have been reduced to zero (whether by the funding by
such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by
the non-pro rata application of any voluntary or mandatory prepayments of the
Loans in accordance with the terms of Section 2.13 or Section 2.14 or
by a combination thereof) and (b) such Defaulting Lender shall have
delivered to Company and Administrative Agent a written reaffirmation of its
intention to honor its obligations hereunder with respect to its Delayed Draw
Term Loan Commitment, and (iii)  the date on which Company, Administrative
Agent and Requisite Lenders waive all Funding Defaults of such Defaulting
Lender in writing.

 

“Defaulted
Loan” as defined in Section 2.22.

 

8

 

“Defaulting
Lender” as defined in Section 2.22.

 

“Delayed Draw
Expiration Date” means September 30, 2007.

 

“Delayed Draw
Term Loan” means a Delayed Draw Term Loan made by a Lender to
Company pursuant to Section 2.2(a).

 

“Delayed Draw
Term Loan Commitment” means the commitment of a Lender to make or
otherwise fund a Delayed Draw Term Loan and “Delayed Draw Term Loan Commitments”
means such commitments of all such Lenders in the aggregate. The amount of each
Lender’s Delayed Draw Term Loan Commitment, if any, is set forth on Appendix A-2
or in the applicable Assignment Agreement, subject to any adjustment or
reduction pursuant to the terms and conditions hereof. The aggregate amount of
the Delayed Draw Term Loan Commitments as of the Closing Date is $45,000,000.

 

“Delayed Draw
Term Loan Note” means a promissory note in the form of
Exhibit B-2, as it may be amended, supplemented or otherwise modified from
time to time.

 

“Deposit
Account” means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.

 

“Disqualified
Capital Stock” means any Capital Stock (other than the Existing
Preferred Stock) which, by its terms (or by the terms of any security or other
Capital Stock into which it is convertible or for which it is exchangeable), or
upon the happening of any event or condition (i) matures or is mandatorily
redeemable (other than solely for Capital Stock that is not otherwise
Disqualified Capital Stock), pursuant to a sinking fund obligation or
otherwise, (ii)  is redeemable at the option of the holder thereof (other
than solely for Capital Stock that is not otherwise Disqualified Capital
Stock), in whole or in part, (iii)  provides for the scheduled payments or
dividends in cash, or (iv)  is or becomes convertible into or exchangeable
for Indebtedness or any other Capital Stock that would constitute Disqualified
Capital Stock, in each case with respect to clauses (i) through
(iv) , prior to the date that is 180 days after the Maturity Date of the
Loans, except, in the case of clauses (i) and (ii) , if as a result
of a change of control or asset sale, so long as any rights of the holders
thereof upon the occurrence of such a change of control or asset sale event are
subject to the prior payment in full of all Obligations and the termination of
the Commitments).

 

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

 

“Domestic
Subsidiary” means any Subsidiary organized under the laws of the
United States of America, any State thereof or the District of Columbia.

 

“Eligible
Assignee” means (i) any Lender, any Affiliate of any Lender and
any Related Fund (any two or more Related Funds being treated as a single
Eligible Assignee for all purposes hereof), and (ii)  any commercial bank,
insurance company, investment or mutual fund or other entity that is an “accredited
investor” (as defined in Regulation D under the Securities Act) and which
extends credit or buys loans in the ordinary course; provided, no Person
that is or has publicly announced its intention to be a competitor of Company
(except any Person that is described in clauses (i) or (ii)  and is or
may be deemed to be a competitor of Company solely by virtue of being a lender
to, or Non-Controlling Equity Investor (as defined below) with respect to such
a competitor), other than an Affiliate of Company or its Subsidiaries, shall be
an Eligible Assignee. For purposes of the preceding sentence, “Non-Controlling
Equity Investor” means, with respect to the relevant entity, a Person that
(i) is not an Affiliate of such entity, (ii)  does not possess a seat
on the board of directors (or individuals performing comparable

 

9

 

functions)
of such entity and (iii)  does not possess, directly or indirectly, the
power to elect a member of the board of directors (or individuals performing
comparable functions) of such entity.

 

“Employee
Benefit Plan” means any “employee benefit plan” as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or
contributed to by, or required to be contributed by, Company, any of its
Subsidiaries or any of their respective ERISA Affiliates.

 

“Environmental
Claim” means any written communication regarding any investigation,
notice, notice of violation, claim, action, suit, proceeding, demand, abatement
order or other order or directive (conditional or otherwise), by any Governmental
Authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law; (ii)  in
connection with any Hazardous Material or any actual or alleged Hazardous
Materials Activity; or (iii)  in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.

 

“Environmental
Laws” means any and all current or future applicable foreign or
domestic, federal or state (or any subdivision of either of them), statutes,
ordinances, orders, rules, regulations, judgments and Governmental
Authorizations relating to (i) environmental matters, including those
relating to any Hazardous Materials Activity; (ii)  the generation, use, storage,
transportation or disposal of Hazardous Materials; or (iii)  occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, and any successor thereto, and the regulations thereunder.

 

“ERISA
Affiliate” means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations, within the meaning of
Section 414(b) of the Internal Revenue Code, of which that Person is
a member; (ii)  any trade or business (whether or not incorporated) which
is a member of a group of trades or businesses under common control, within the
meaning of Section 414(c) of the Internal Revenue Code, of which that
Person is a member; and (iii)  any member of an affiliated service group,
within the meaning of Section 414(m) or (o) of the Internal Revenue Code,
of which that Person is a member. Any former ERISA Affiliate of Company or any
of its Subsidiaries shall continue to be considered an ERISA Affiliate of
Company or any such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of Company or such
Subsidiary and with respect to liabilities for which Company or such Subsidiary
could be liable under the Internal Revenue Code or ERISA.

 

“ERISA Event”
means (i) a “reportable event” within the meaning of Section 4043 of
ERISA and the regulations issued thereunder with respect to any Pension Plan
(excluding those for which the provision for 30-day notice to the PBGC has been
waived by regulation); (ii)  the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with
Section 412(d)  of the Internal Revenue Code); (iii)  the
provision by the administrator of any Pension Plan pursuant to
Section 4041(a)(2)  of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA;
(iv)  the withdrawal by Company, any of its Subsidiaries or any of their
respective ERISA Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in liability to
Company, any of its Subsidiaries or any of their respective ERISA Affiliates
pursuant to Section 4063 or 4064 of ERISA; (v)  the institution by
the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension
Plan; (vi)  the imposition of liability on Company, any of its
Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) 
or 4069 of ERISA or by reason of the application of
Section 4212(c) of

 

10

 

ERISA;
(vii)  the occurrence of an act or omission which could give rise to the
imposition on Company, or any of its Subsidiaries of fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue Code or under
Section 409, Section 502(c), (i) or (l), or Section 4071 of
ERISA in respect of any Employee Benefit Plan; (viii)  the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
Company or any of its Subsidiaries in connection with any Employee Benefit
Plan; (ix) receipt from the Internal Revenue Service of notice of the failure
of any Pension Plan (or any other Employee Benefit Plan intended to be
qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the
failure of any trust forming part of any Pension Plan to qualify for exemption
from taxation under Section 501(a) of the Internal Revenue Code; or
(x)  the imposition of a Lien pursuant to Section 401(a)(29) or
412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any
Pension Plan.

 

“Eurodollar
Rate Loan” means a Loan bearing interest at a rate determined by
reference to the Adjusted Eurodollar Rate.

 

“Event of
Default” means each of the conditions or events set forth in
Section 8.1.

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended from time to time, and
any successor statute.

 

“Existing L/C”
means that certain letter of credit issued for the account of Company by
JPMorgan Chase Bank, N.A. with a face amount of $1,956,901.20.

 

“Existing Preferred
Stock” means, collectively, the Series A convertible, redeemable
preferred stock of Company, the Series B convertible, redeemable preferred
stock of Company, the Series C convertible, redeemable preferred stock of
Company and the Series D convertible, redeemable preferred stock of Company.

 

“Existing
Specified Indebtedness” means Indebtedness and other obligations
outstanding under (i) the First Lien Loan and Guaranty Agreement dated as
of April 13, 2005 (as amended from time to time), among Company, certain
subsidiaries of Company, GSCP, as lender, lead arranger, sole bookrunner and
syndication agent, the Bank of New York as administrative agent and collateral
agent and the lenders from time to time party thereto, and (ii)  the Third
Lien Loan and Guaranty Agreement dated as of April 13, 2005 (as amended from
time to time), among Company, certain subsidiaries of Company, Orchard First
Source Capital, Inc. (as successor to GSCP), as administrative agent and
collateral agent and the lenders from time to time party thereto.

 

“Facility”
means any real property (including all buildings, fixtures or other
improvements located thereon) now, hereafter or heretofore owned, leased,
operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates.

 

“Fair Share
Contribution Amount” as defined in Section 7.2.

 

“Fair Share”
as defined in Section 7.2.

 

“FDA”
as defined in Section 4.17(b).

 

“FDA
Regulation” means any rule, regulation or administrative order
promulgated or issued by the FDA.

 

11

 

“Federal
Funds Effective Rate” means for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided, (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii)  if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate charged to Administrative Agent, in its capacity as a Lender, on
such day on such transactions as determined by Administrative Agent.

 

“Financial
Officer Certification” means, with respect to the financial
statements for which such certification is required, the certification of the
principal financial officer of Company that such financial statements fairly
present, in all material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated, subject to changes resulting from
audit and normal year-end adjustments.

 

“Financial
Plan” as defined in Section 5.1(i).

 

“First
Priority” means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that such Lien is the only
Lien to which such Collateral is subject, other than any Permitted Lien.

 

“Fiscal
Quarter” means a fiscal quarter of any Fiscal Year.

 

“Fiscal Year”
means the fiscal year of Company and its Subsidiaries ending on December 31 of
each calendar year.

 

“Food and
Drug Act” means the Federal Food, Drug and Cosmetic Act, as amended,
21 U.S.C. § 301 et seq. and any successor act.

 

“Foreign
Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

 

“Funding
Default” as defined in Section 2.22.

 

“Funding
Guarantor” as defined in Section 7.2.

 

“Funding
Notice” means a notice substantially in the form of Exhibit A-1.

 

“GAAP”
means, subject to the limitations on the application thereof set forth in
Section 1.2, accounting principles generally accepted in the United States
in effect as of the date of determination thereof.

 

“Governmental
Acts” means any act (including any order or decree) or omission, of
any present or future Governmental Authority.

 

“Governmental
Authority” means any federal, state, municipal, national or other
government, governmental department, commission, board, bureau, court, agency
or instrumentality or political subdivision thereof or any entity, officer,
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government or any court, in each case whether
associated with a state of the United States, the United States, or a foreign
entity or government.

 

12

 

“Governmental
Authorization” means any permit, license, authorization, directive,
consent order or consent decree of or from any Governmental Authority.

 

“Grantor”
as defined in the Pledge and Security Agreement.

 

“Guaranteed
Obligations” as defined in Section 7.1.

 

“Guarantor
Subsidiary” means except as otherwise provided in Sections 5.10 or
7.13 each Domestic Subsidiary of Company.

 

“Guaranty”
means the guaranty of each Guarantor Subsidiary set forth in Section 7.

 

“Hazardous
Material” means any chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Governmental Authority or
which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.

 

“Hazardous
Materials Activity” means any past or current activity, event or
occurrence involving any Hazardous Materials, including the use, manufacture,
possession, storage, holding, presence, existence, location, Release,
threatened Release, discharge, placement, generation, transportation,
processing, construction, treatment, abatement, removal, remediation, disposal,
disposition or handling of any Hazardous Materials, and any corrective action
or response action with respect to any of the foregoing.

 

“Hedge
Agreement” means an Interest Rate Agreement or a Currency Agreement
entered into with a Lender Counterparty pursuant to Section 5.13 of this
Agreement or in the ordinary course of Company’s or any of its Subsidiaries’
businesses.

 

“HHS”
means the United States Department of Health and Human Services, or any
successor agency thereof.

 

“HHS
Regulation” means any rule, regulations or administrative order
promulgates or issued by the HHS.

 

“Highest
Lawful Rate” means the maximum lawful interest rate, if any, that at
any time or from time to time may be contracted for, charged, or received under
the laws applicable to any Lender which are now in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum nonusurious interest rate than applicable laws now
allow.

 

“Historical
Financial Statements” means, collectively, (i) the audited
financial statements of Company for the 2003, 2004 and 2005 Fiscal Years, each
consisting of a balance sheet and the related statement of operations,
stockholders’/member’s equity/deficit and cash flows for such Fiscal Year and
notes thereto, (ii)  the unaudited financial statements of Company for the
Fiscal Year ended December 31, 2006, consisting of a balance sheet as of
December 31, 2006 and the related statements of operations and cash flows for
such Fiscal Year and a statement of stockholders’ equity from the prior fiscal
year end through December 31, 2006 and notes thereto, and (iii)  the
unaudited financial statements of Company for the month ending January 31,
2007, consisting of a balance sheet as of January 31, 2007 and the related
statements of operations and cash flows for such month and a statement of
stockholders’ equity from the prior fiscal year end through January 31, 2007,
and, in the case of clause (ii) , together with a Financial Officer
Certification with respect thereto.

 

13

 

“Increased-Cost
Lenders” as defined in Section 2.23.

 

“Indebtedness”
as applied to any Person, means, without duplication, (i) all indebtedness
of such Person for borrowed money; (ii)  that portion of obligations of
such Person with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP; (iii)  notes payable
and drafts accepted by such Person representing extensions of credit whether or
not representing obligations for borrowed money; (iv)  any obligation owed
by such Person for all or any part of the deferred purchase price of property
or services (excluding any such obligations incurred under ERISA), which
purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof to the extent classified as a liability on
a balance sheet in conformity with GAAP or (b) evidenced by a note or
similar written instrument; (v)  all indebtedness secured by any Lien on
any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person; (vi)  the face amount of any
letter of credit (whether or not drawn) issued for the account of that Person
or as to which that Person is otherwise liable for reimbursement of drawings,
other than the Existing L/C to the extent cash collateralized; (vii) 
Disqualified Capital Stock; (viii)  the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another; (ix) any obligation of such Person the
primary purpose or intent of which is to provide assurance to an obligee that
the obligation of the obligor thereof will be paid or discharged, or any
agreement relating thereto will be complied with, or the holders thereof will
be protected (in whole or in part) against loss in respect thereof; (x) 
any liability of such Person for an obligation of another through any agreement
(contingent or otherwise) (a) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment
or discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), other than with respect to any
Net Exercise Withholding Payments or SARs or (b) to maintain the solvency
or any balance sheet item, level of income or financial condition of another
if, in the case of any agreement described under subclause (a) or
(b) of this clause (x) , the primary purpose or intent thereof is as
described in clause (ix) above; and (xi)  all obligations of such Person
in respect of any exchange traded or over the counter derivative transaction,
including any Interest Rate Agreement and Currency Agreement; provided
in no event shall obligations under any Interest Rate Agreement and any
Currency Agreement be deemed “Indebtedness” for any purpose under
Section 6.8.

 

“Indemnified
Liabilities” means, collectively, any and all liabilities,
obligations, losses, damages (including natural resource damages), penalties,
claims (including Environmental Claims), actions, judgments, suits, costs
(including the costs of any investigation, study, sampling, testing, abatement,
cleanup, removal, remediation or other response action necessary to remove,
remediate, clean up or abate any Hazardous Materials Activity), expenses and
disbursements of any kind or nature whatsoever (including the reasonable fees
and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding or hearing commenced or
threatened by any Person, whether or not any such Indemnitee shall be
designated as a party or a potential party thereto, and any reasonable fees or
reasonable expenses incurred by Indemnitees in enforcing the indemnity under
Section 10.3 herein), whether direct, indirect or consequential and
whether based on any federal, state or foreign laws, statutes, rules or
regulations (including securities and commercial laws, statutes, rules or
regulations and Environmental Laws), on common law or equitable cause or on
contract or otherwise, that may be imposed on, incurred by, or asserted against
any such Indemnitee (regardless of whether any Indemnitee is a party thereof),
in any manner relating to or arising out of (i) this Agreement or the
other Credit Documents or the transactions contemplated hereby or thereby
(including the use or intended use of the proceeds thereof, or any proper
enforcement of any of the Credit Documents (including any sale of, collection
from, or other realization upon any of the Collateral or the enforcement of the
Guaranty)); or (ii)  any Environmental Claim or any Hazardous Materials
Activity relating to or arising from, directly or

 

14

 

indirectly,
any past or present activity, operation, land ownership, or practice of Company
or any of its Subsidiaries.

 

“Indemnitee”
as defined in Section 10.3(a).

 

“Initial Term
Loan” means a Term Loan made by a Lender to Company pursuant to
Section 2.1(a).

 

“Initial Term
Loan Commitment” means the commitment of a Lender to make or
otherwise fund the Initial Term Loans and “Initial Term Loan
Commitments” means such commitments of all Lenders in the aggregate.
The amount of each Lender’s Initial Term Loan Commitment is set forth on
Appendix A or in the applicable Assignment Agreement. The aggregate amount of
the Initial Term Loan Commitments as of the Closing Date is $170,000,000 before
giving effect to the Loans made on the Closing Date.

 

“Initial Term
Loan Note” means a promissory note in the form of Exhibit B-1,
as it may be amended, supplemented or otherwise modified from time to time.

 

“Installment”
as defined in Section 2.12(a).

 

“Installment
Date” as defined in Section 2.12(a).

 

“Intellectual
Property Rights” as defined in Section 4.13(c).

 

“Interest
Coverage Ratio” means the ratio as of the last day of any Fiscal
Quarter of (i) Consolidated Adjusted EBITDA for the four-Fiscal Quarter
period then ended to (ii)  Consolidated Cash Interest Expense for such
four-Fiscal Quarter period.

 

“Interest
Payment Date” means with respect to (i) any Base Rate Loan, the
last Business Day of each calendar quarter, commencing on the first such date
to occur after the Closing Date and the final maturity date of such Loan; and
(ii)  any Eurodollar Rate Loan, the last day of each Interest Period
applicable to such Loan; provided, in the case of each Interest Period
of longer than three months “the Interest Payment Date” shall also include each
date that is three months, or an integral multiple thereof, after the
commencement of such Interest Period.

 

“Interest
Period” means, in connection with a Eurodollar Rate Loan, an interest
period of one, two, three or six months (or, with the consent of each
participating Lender, nine or twelve months), as selected by Company in the
Funding Notice or applicable Conversion/Continuation Notice,
(i) initially, commencing on the Closing Date or Conversion/Continuation
Date thereof, as the case may be; and (ii)  thereafter, commencing on the
day on which the immediately preceding Interest Period expires; provided,
(a) if an Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day unless no further Business Day occurs in such month, in which case such
Interest Period shall expire on the immediately preceding Business Day;
(b) provided, however, any Interest Period that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the following calendar month at the end of
such Interest Period) shall, end on the last Business Day of the calendar month
(or the Maturity Date, if earlier); and (c) no Interest Period shall
extend beyond the Maturity Date.

 

“Interest
Rate Agreement” means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging agreement
or other similar agreement or arrangement,

 

15

 

each
of which is for the purpose of hedging the interest rate exposure associated
with Company’s and its Subsidiaries’ operations and not for speculative
purposes.

 

“Interest
Rate Determination Date” means, with respect to any Interest Period,
the date that is two Business Days prior to the first day of such Interest
Period.

 

“Internal
Revenue Code” means the Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, and any successor statute, and
the regulations thereunder.

 

“Investment”
means (i) any direct or indirect purchase or other acquisition by Company
or any of its Subsidiaries of, or of a beneficial interest in, any of the
Securities of any other Person (other than a Guarantor Subsidiary); (ii) 
any direct or indirect redemption, retirement, purchase or other acquisition
for value, by any Subsidiary of Company from any Person (other than Company or
any Guarantor Subsidiary), of any Capital Stock of such Person; and (iii) 
any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
Company or any of its Subsidiaries to any other Person (other than Company or
any Guarantor Subsidiary), including all indebtedness and accounts receivable
from that other Person that are not current assets or did not arise from sales
to that other Person in the ordinary course of business. 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 to such Investment.

 

“IPO”
means a bona fide underwritten initial public offering of newly issued voting
common Capital Stock of Company resulting in net cash proceeds to the Company
of at least $150,000,000.

 

“Joint
Venture” means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided,
in no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.

 

“Knowledge”
means, with respect to any Credit Party, the actual knowledge of any
Responsible Officer of such Credit Party.

 

“Lender”
means each lender listed on the signature pages hereto as a Lender, and any
other Person that becomes a party hereto pursuant to an Assignment Agreement.

 

“Lender
Counterparty” means each Lender, each Agent and each of their
respective Affiliates counterparty to a Hedge Agreement (including any Person
who is an Agent or a Lender (and any Affiliate thereof) as of the Closing Date
but subsequently, after entering into a Hedge Agreement, ceases to be an Agent
or a Lender, as the case may be) including, without limitation, each such
Affiliate that appoints the Collateral Agent as its agent and agrees to be
bound by the Credit Documents as a Secured Party, subject to
Section 9.8(d) .

 

“Leverage
Ratio” means the ratio as of the last day of any Fiscal Quarter or
other date of determination of (i) Consolidated Total Debt as of such day
to (ii)  Consolidated Adjusted EBITDA for the four-Fiscal Quarter period
ending on such date (or if such date of determination is not the last day of a
Fiscal Quarter, for the four-Fiscal Quarters period ending as of the most
recently concluded Fiscal Quarter).

 

“Lien”
means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing (other than an agreement to grant a Lien on any Collateral that does
not result in attachment of the Lien within the meaning of

 

16

 

9-203
of the UCC until after the payment in full of the Obligations and termination
of all of the Commitments), any conditional sale or other title retention
agreement, and any lease in the nature thereof) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing
and (ii)  in the case of Securities, any purchase option, call or similar
right of a third party with respect to such Securities.

 

“Loan”
means a Delayed Draw Term Loan or an Initial Term Loan. Notwithstanding
anything to the contrary herein, to the extent any Delayed Draw Term Loans are
borrowed pursuant to Section 2.2, such Delayed Draw Term Loans and the
Initial Term Loans shall constitute the same Term Loans.

 

“Loan
Exposure” means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Loans and the Delayed
Draw Term Loan Commitment of such Lender.

 

“Margin Stock”
as defined in Regulation U of the Board of Governors of the Federal Reserve
System as in effect from time to time.

 

“Material
Adverse Effect” means any effect, event, change or state of fact
that, individually or in the aggregate, has resulted in, or would be reasonably
likely to result in, a material adverse effect with respect to (i) the
business operations, properties or financial condition of Company and its
Subsidiaries taken as a whole; (ii)  the ability of any Credit Party to
fully and timely perform its Obligations; (iii)  the legality, validity,
binding effect or enforceability against a Credit Party of a Credit Document to
which it is a party; or (iv)  the rights, remedies and benefits available
to, or conferred upon, any Agent, any Lender or any Secured Party under any Credit
Document.

 

“Material
Contract” means any contract or other arrangement to which Company
or any of its Subsidiaries is a party (other than the Credit Documents) of
which breach, nonperformance or cancellation could reasonably be expected to
have a Material Adverse Effect.

 

“Material
Real Estate Asset” means any fee-owned Real Estate Asset having a
fair market value in excess of $3,000,000 as of the date of the acquisition
thereof.

 

“Maturity
Date” means the earliest of (i) March 31, 2012 and (ii) 
the date that all Loans shall become due and payable in full hereunder, whether
by acceleration or otherwise.

 

“Merrill
Lynch” means Merrill Lynch Capital, Inc., as lender under the
Permitted Working Capital Facility, or any other lender thereunder.

 

“Milestone
Payment” means a milestone cash payment of $25,000,000 to be paid in
2007.

 

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

 

“Multiemployer
Plan” means any Employee Benefit Plan that is a “multiemployer plan”
as defined in Section 3(37) of ERISA.

 

“NAIC”
means The National Association of Insurance Commissioners, and any successor
thereto.

 

“Narrative
Report” means, with respect to the financial statements for which
such narrative report is required, a management’s discussion and analysis of
financial condition and results of operations of Company and its Subsidiaries
for the applicable Fiscal Year to which such financial statements relate.

 

17

 

“Net Asset
Sale Proceeds” means, with respect to any Asset Sale, an amount
equal to:

 

(i) Cash payments
(including any Cash received by way of deferred payment pursuant to, or by
monetization of, a note receivable or otherwise (including by way of milestone
payment), but only as and when so received) received by Company or any of its
Subsidiaries from such Asset Sale, minus (ii)  any bona fide direct
costs incurred in connection with such Asset Sale, including (a) income or
gains taxes payable by the seller as a result of any gain recognized in
connection with such Asset Sale, (b) payment of the outstanding principal
amount of, premium or penalty (including breakage), if any, and interest on any
Indebtedness (other than the principal amount of the Loans) that is secured by
a Lien on the stock or assets in question and that is required to be repaid
under the terms thereof as a result of such Asset Sale, and payment of legal
and other fees and expenses incurred in connection with the repayment of such
Indebtedness and (c) a reasonable reserve for any indemnification payments
(fixed or contingent) attributable to seller’s indemnities and representations
and warranties to purchaser in respect of such Asset Sale undertaken by Company
or any of its Subsidiaries in connection with such Asset Sale.

 

“Net Exercise
Withholding Payment” means a payment made by the Company to a taxing
authority made with respect to any taxable event arising from the election by a
holder of restricted Capital Stock issued or issuable under a Company equity
incentive plan to have the Company withhold shares of such Capital Stock
otherwise issuable under such plan having a fair market value equal to the sum
required to be so withheld (based upon the minimum statutory withholding rates
for Taxes applicable to the relevant amount of taxable income).

 

“Net
Insurance/Condemnation Proceeds” means an amount equal to:
(i) any Cash payments or proceeds received by Company or any of its
Subsidiaries (a) under any casualty insurance policy in respect of a
covered loss thereunder or (b) as a result of the taking of any assets of
Company or any of its Subsidiaries by any Person pursuant to the power of
eminent domain, condemnation or otherwise, or pursuant to a sale of any such
assets to a purchaser with such power under threat of such a taking, minus
(ii)  (a) any actual and reasonable costs incurred by Company or any
of its Subsidiaries in connection with the adjustment or settlement of any
claims of Company or such Subsidiary in respect thereof, and (b) any bona
fide direct costs incurred in connection with any sale of such assets as
referred to in clause (i)(b) of this definition, including income taxes
payable as a result of any gain recognized in connection therewith.

 

“Nonpublic
Information” means information which has not been disseminated in a
manner making it available to investors generally, within the meaning of
Regulation FD.

 

“Non-Consenting
Lender” as defined in Section 2.23.

 

“Non-US
Lender” as defined in Section 2.20(c).

 

“Note”
means a Delayed Draw Term Loan Note or an Initial Term Loan Note.

 

“Notice”
means the Funding Notice or a Conversion/Continuation Notice.

 

“Obligations”
means all obligations of every nature of each Credit Party from time to time
owed to the Agents (including former Agents), the Lenders (including former
Lenders or their affiliates) or any of them under any Credit Document or under
any Hedge Agreement, whether for principal, interest (including interest which,
but for the filing of a petition in bankruptcy with respect to such Credit
Party, would have accrued on any Obligation, whether or not a claim is allowed
against such Credit Party for such interest in the related bankruptcy
proceeding), fees, expenses, indemnification or otherwise.

 

“Obligee
Guarantor” as defined in Section 7.7.

 

18

 

“Organizational
Documents” means (i) with respect to any corporation, its
certificate or articles of incorporation or organization, as amended, and its
by-laws, as amended, (ii)  with respect to any limited partnership, its
certificate of limited partnership, as amended, and its partnership agreement,
as amended, (iii)  with respect to any general partnership, its
partnership agreement, as amended, and (iv) with respect to any limited
liability company, its certificate of formation or comparable documents, as amended,
and its operating agreement, as amended. In the event any term or condition of
this Agreement or any other Credit Document requires any Organizational
Document to be certified by a secretary of state or similar governmental
official, the reference to any such “Organizational Document” shall only be to
a document of a type customarily certified by such governmental official.

 

“Other Taxes”
means any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment
made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, any Credit Documents, excluding, however, such
taxes imposed as a result of an assignment by a Lender or the Administrative
Agent (other than an assignment resulting from a request from the Company under
Section 2.23).

 

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

 

“Pension Plan”
means any Employee Benefit Plan, other than a Multiemployer Plan, which is
subject to Section 412 of the Internal Revenue Code or Title IV or
Section 302 of ERISA.

 

“Permitted
Acquisition” means (a) any acquisition by Company or any
Guarantor Subsidiary, whether by purchase, merger or otherwise, of all or
substantially all of (1)  the assets, (2)  the Capital Stock, or
(3) a business line, product line (regardless of the stage of development)
or unit or a division, in each case, of any Person whose primary business
involves the research, development, testing, marketing, distribution or
manufacture of pharmaceuticals, or (b) a Permitted Minority Investment
(any of (a) or (b), an “Acquisition”); provided,

 

(i)            immediately prior to, and
after giving effect thereto, no Event of Default or, to the knowledge of the
Company, Default shall have occurred and be continuing or would result
therefrom;

 

(ii)           all transactions in
connection therewith shall be consummated, in all material respects, in
accordance with all applicable laws and in conformity with all applicable
Governmental Authorizations;

 

(iii)          in the case of the
Acquisition of Capital Stock, the Capital Stock (except for any such Securities
in the nature of directors’ qualifying shares required pursuant to applicable
law) acquired or otherwise issued by such Person or any newly formed Subsidiary
of Company in connection with such acquisition shall be owned by Company or a
Guarantor Subsidiary thereof, if applicable, and Company shall have taken, or
caused to be taken, as of the date such Person becomes a Subsidiary of Company,
each of the actions set forth in Sections 5.10 and/or 5.11, as applicable;

 

(iv)          the aggregate amount of cash
purchase price, including for this purpose assumed indebtedness (as distinct
from equity, royalty fees, licensing fees, promotional and marketing
investments and similar payments), by Company and its Subsidiaries in all such
Acquisitions shall not exceed (x)  $25,000,000 in any fiscal year, and
(y)  $100,000,000 during the period from the Closing Date through the
Maturity Date;

 

19

 

(v)           after giving effect to the
purchase price of each Acquisition, the sum of Company’s Cash on hand, Company’s
Cash Equivalents on hand and the remaining undrawn availability under the
Permitted Working Capital Facility following any such Acquisition shall be at
least $20,000,000;

 

(vi)          subject to the terms of the
Working Capital Intercreditor Agreement, all assets acquired shall become
Collateral and shall be subject to a First Priority Lien pursuant to the Pledge
and Security Agreement;

 

(vii)         Company shall have delivered
to Administrative Agent at least five Business Days prior to such proposed
Acquisition all information with respect to such acquired assets reasonably
requested by the Administrative Agent, including, without limitation, the
aggregate consideration for such Acquisition and pro forma financial
projections; and

 

(viii)        Company and its Subsidiaries
shall be in compliance with the financial covenants set forth in
Section 6.8 on a pro forma basis after giving effect to such acquisition
as of the last day of the Fiscal Quarter most recently ended, (as determined in
accordance with Section 6.8(d)).

 

“Permitted
Liens” means each of the Liens permitted pursuant to
Section 6.2.

 

“Permitted
Minority Investment” means any acquisition by Company or any
Guarantor Subsidiary, whether by purchase or otherwise, of less than all or
substantially all of (1)  the assets, (2)  the Capital Stock, or
(3) a business line, product line (regardless of the stage of development)
or unit or a division, of any Person whose primary business involves the
research, development, testing, marketing, distribution or manufacture of
pharmaceuticals; provided that the aggregate amount invested by Company
and its Guarantor Subsidiaries in all such acquisitions from and after the
Closing Date does not exceed $10,000,000.

 

“Permitted
Working Capital Facility” means the Indebtedness of Company
evidenced by the Working Capital Facility Credit Agreement.

 

“Person”
means and includes natural persons, corporations, limited partnerships, general
partnerships, limited liability companies, limited liability partnerships,
joint stock companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts or other organizations, whether
or not legal entities, and Governmental Authorities.

 

“Personal
Property Collateral Access Agreement” means an agreement
substantially in the form of Exhibit K, with such amendments or
modifications as may be approved by Collateral Agent in its reasonable
discretion, permitting Collateral Agent to access personal property of Company
or its Subsidiaries, held by a third party.

 

“Platform”
as defined in Section 5.1(q).

 

“Pledge and
Security Agreement” means the Pledge and Security Agreement, dated
as of the date hereof, among the Collateral Agent, Company and Guarantor
Subsidiaries from time to time party thereto, as it may be amended,
supplemented or otherwise modified from time to time.

 

“Prime Rate”
means the per annum rate of interest published in The Wall Street Journal, Money Rates Section as the
Prime Rate (currently defined as the base rate on corporate loans posted by at
least 75% of the nation’s thirty (30) largest banks), as in effect from time to
time. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate actually charged to any customer.

 

20

 

Agent
or any other Lender may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.

 

“Principal
Office” means, for Administrative Agent, its “Principal Office” as
set forth on Appendix B, or such other office as it may from time to time
designate in writing to Company and each Lender.

 

“Product”
means a specific pharmaceutical product or pharmaceutical product family or
pharmaceutical formulation in the development phase, except that for the
purposes of Sections 4.26, 4.27 and 4.29, Products means the products currently
being developed, marketed, sold and/or offered for sale in the Territory under
the following trademarks/tradenames: 
Rythmol® (including Rythmol® IR and Rythmol®
SR), InnoPran® (including InnoPran XL®), Omacor®
and all successor products thereto.

 

“Product
Recall Notice” means any written notice from the FDA stating that
any product or product line of any Credit Party or any of its Subsidiaries has
been or will be recalled.

 

“Projections”
as defined in Section 4.8.

 

“Pro Rata
Share” means, (i) with respect to all payments, computations
and other matters relating to the Loan Exposure of any Lender, the percentage
obtained by dividing (a) the Loan Exposure of that Lender by (b) the
aggregate Loan Exposure of all Lenders; and (ii)  with respect to the
Commitment of any Lender, the percentage obtained by dividing (a) the
Commitment of that Lender by (b) the aggregate Commitment of all Lenders.

 

“Real Estate
Asset” means, at any time of determination, any fee interest then
held by any Credit Party in any real property.

 

“Receivables”
as defined in the Pledge and Security Agreement.

 

“Receivables-Related
Assets” means (i) all rights of enforcement and collection,
remedies, guarantees, supporting obligations, letter-of-credit rights and
security interests, in each case, to the extent relating to the Receivables,
(ii)  all books and records, information and data evidencing or describing
the Receivables, whether compiled or derived by Company or any of its
Subsidiaries or to which Company or any of its Subsidiaries is entitled, in
whatever form or medium, that at any time evidence or contain information
relating to any of the Receivables, (iii)  all lockboxes and other
depositary accounts where the proceeds of Receivables are deposited to the
extent constituting proceeds of Receivables, (iv)  all accessions and
additions to, and substitutions and replacements of, any and all of the
foregoing, and (v)  all proceeds and products of the foregoing (including,
without limitation, payment intangibles, as such term is defined in the UCC).

 

“Receivables
Records” as defined in the Pledge and Security Agreement.

 

“Register”
as defined in Section 2.7(b).

 

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

 

“Regulation
FD” means Regulation FD as promulgated by the US Securities and
Exchange Commission under the securities Act and Exchange Act as in effect from
time to time.

 

“Regulatory Approvals”
as defined in Section 4.17(b).

 

21

 

“Related Fund” means, with respect to any Lender that is an
investment fund, any other investment fund that invests in or originates
commercial loans and that is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.

 

“Related Parties” means, with respect to any Person, such
Person’s Affiliates and the partners, directors, trustees, officers, employees,
counsel, agents and advisors of such Person and of such Person’s affiliates.

 

“Release” means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of any Hazardous Material into the environment
(including the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), including the movement
of any Hazardous Material through the air, soil, surface water or groundwater.

 

“Replacement Lender” as defined in Section 2.23.

 

“Required Hedge Amount” as defined in Section 5.13.

 

“Required Prepayment Date” as defined in Section 2.15(c).

 

“Requisite Lenders” means one or more Lenders having or
holding Loan Exposures representing more than 50% of the aggregate Loan
Exposure of all Lenders; provided, however, that for purposes of
this definition, Company, any Specified Holder or any Affiliate of Company or
of a Specified Holder that has become a Lender shall not be considered a Lender.

 

“Responsible Officer” means, as applied to any Person, any
individual holding the position of chief executive officer, president, chief
financial officer, vice president-finance, treasurer, controller or general
counsel.

 

“Restricted Junior Payment” means (i) any dividend or
other distribution, direct or indirect, on account of any shares of any class
of Capital Stock of Company now or hereafter outstanding, except a dividend
payable solely in shares of any class of Capital Stock to the holders of that
class; (ii)  any redemption, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of Company now or hereafter outstanding; (iii) 
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of Capital
Stock of Company now or hereafter outstanding; (iv)  management or similar
fees payable to a Specified Holder or any of its Affiliates (excluding
Guarantor Subsidiaries) and (v)  any payment or prepayment of principal,
cash interest, premium, if any, or redemption, purchase, retirement, defeasance
(including in substance or legal defeasance), sinking fund or similar payment
with respect to any Indebtedness incurred under Section 6.1(o).

 

“SARs” means stock or unit appreciation rights issued by the
Company and approved by its board of directors.

 

“S&P” means Standard & Poor’s Ratings Group, a
division of The McGraw-Hill Companies, Inc.

 

“Secured Parties” has the meaning assigned to that term in
the Pledge and Security Agreement.

 

“Securities” means any stock, shares, partnership interests,
limited liability company interests, voting trust certificates, certificates of
interest or participation in any profit-sharing agreement or arrangement (e.g.,
stock appreciation rights), options, warrants, bonds, debentures, notes, or
other

 

22

 

evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as “securities”
or any certificates of interest, shares or participations in temporary or
interim certificates for the purchase or acquisition of, or any right to
subscribe to, purchase or acquire, any of the foregoing.

 

“Securities Act” means the Securities Act of 1933, as amended
from time to time, and any successor statute.

 

“Solvency Certificate” means a Solvency Certificate of the
principal financial officer of Company substantially in the form of Exhibit G-2.

 

“Solvent” means, with respect to any Credit Party, that as of
the date of determination, both (i) (a) the sum of such Credit Party’s
debt (including contingent liabilities, but excluding liabilities from
mandatorily redeemable preferred shares that are not redeemable prior to the
Maturity Date) does not exceed the present fair saleable value of such Credit
Party’s assets at such date of determination; (b) such Credit Party’s
capital is not unreasonably small in relation to its business as contemplated
on the Closing Date and reflected in the Projections or with respect to any
transaction contemplated or undertaken after the Closing Date; and (c) such
Credit Party has not incurred and does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due (whether at maturity or otherwise); and (ii) 
such Credit Party is “solvent” within the meaning given that term and similar
terms under the Bankruptcy Code and applicable laws relating to fraudulent
transfers and conveyances in Delaware, Florida, Massachusetts, Nebraska, New
Jersey, New York and Ohio, and relating to federal fraudulent conveyance law as
set forth in § 548 of the Bankruptcy Code. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the amount
that, in light of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability (irrespective of whether such contingent liabilities meet the
criteria for accrual under Statement of Financial Accounting Standard No. 5).

 

“Special Purpose Entity” means a corporation or limited
liability company whose organizational documents contain limitations on
business activities, incurrence of Indebtedness and creation of Liens.

 

“Specified Holders” means collectively PharmBay Investors,
L.L.C., The Bay City Capital Fund II, L.P. and The Bay City Capital Fund III, L.P.
and their respective Affiliates.

 

“Subsidiary” means, with respect to any Person, any
corporation, partnership, limited liability company, association, joint venture
or other business entity of which more than 50% of the total voting power of
shares of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing similar
functions) having the power to direct or cause the direction of the management
and policies thereof is at the time owned or controlled, directly or
indirectly, by that Person, or the accounts of which would be consolidated with
those of such Person in its consolidated financial statements in accordance
with GAAP, if such statements were prepared as of such date, or one or more of
the other Subsidiaries of that Person or a combination thereof; provided,
in determining the percentage of ownership interests of any Person controlled
by another Person, no ownership interest in the nature of a “qualifying share”
of the former Person shall be deemed to be outstanding. Notwithstanding the
foregoing (and except for purposes of Sections 4.11, 4.12, 4.14, 4.20, 5.3,
5.8, 5.9 and 8.1(j), and the definition of “Unrestricted Subsidiary” contained
herein), an Unrestricted Subsidiary shall be deemed not to be a Subsidiary for
purposes of this Agreement.

 

23

 

“Subsidiary Redesignation” as defined in the definition of “Unrestricted
Subsidiary” contained in this Section 1.01.

 

“Syndication Agent” as defined in the preamble hereto.

 

“Tax” means any present or future tax, levy, impost, duty,
assessment, charge, fee, deduction or withholding of any nature and whatever
called (including interest and penalties), by whomsoever, on whomsoever and
wherever imposed, levied, collected, withheld or assessed; provided, “Tax
on the net income” of a Person shall be construed as a reference to a tax
imposed by the jurisdiction in which that Person is organized or in which that
Person’s applicable principal office (and/or, in the case of a Lender, its
lending office) is located or in which that Person (and/or in the case of
Lender, its lending office) is deemed to be doing business which is imposed on
or measured by (i) all or part of the net income (whether worldwide, or
only insofar as such income is considered to arise in or to relate to a
particular jurisdiction, or otherwise) of that Person (and/or, in the case of a
Lender, its applicable lending office); (ii)  branch profits taxes; or (iii) 
franchise or similar taxes imposed in lieu of taxes described in clauses (i) or
(ii)  above.

 

“Terminated Lender” as defined in Section 2.23.

 

“Territory” means the United States (including its
territories and possessions).

 

“Transaction Costs” means (i) the fees, and (ii) 
the reasonable costs and expenses payable by Company or any of Company’s
Subsidiaries on or before the Closing Date in connection with the transactions
contemplated by the Credit Documents.

 

“UCC” means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.

 

“Unadjusted Eurodollar Rate Component” means that component
of the interest costs to Company in respect of a Eurodollar Rate Loan that is
based upon the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate.

 

“Unrestricted Subsidiary” means any subsidiary that is
designated as an Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent; provided, that Company shall only be permitted to
so designate a new Unrestricted Subsidiary and so long as (a) no Event of
Default or, to the knowledge of the Company, Default has occurred and is
continuing or would result therefrom, (b) immediately after giving effect
to such designation (as well as all other such designations theretofore
consummated after the first day of the relevant period), Company and its
Subsidiaries shall be in compliance with the financial covenants set forth in Section 6.8
on a pro forma basis after giving effect to such designation as of the last day
of the Fiscal Quarter most recently ended, (as determined in accordance with Section 6.8(d)),
(c) such Unrestricted Subsidiary shall be capitalized (to the extent
capitalized by Company or any of its Subsidiaries) through Investments as permitted
by, and in compliance with, Section 6.7(b), and any prior or concurrent
Investments in such Subsidiary by Company or any of its Subsidiaries shall be
deemed to have been made under Section 6.7(b) and (d)  without
duplication of clause (c), any assets owned by such Unrestricted Subsidiary at
the time of the initial designation thereof shall be treated as Investments
pursuant to Section 6.7(b). Any Unrestricted Subsidiary may be designated
to be a Subsidiary for purposes of this Agreement (each, a “Subsidiary Redesignation”); provided, that (i) such
Unrestricted Subsidiary, both before and after giving effect to such
designation, shall be a wholly owned Subsidiary, (ii)  no Event of Default
or, to the knowledge of the Company, Default has occurred and is continuing or
would result therefrom, (iii)  immediately after giving effect to such
Subsidiary Redesignation (as well as all other Subsidiary Redesignations
theretofore consummated after the first day of the relevant period),

 

24

 

Company and its Subsidiaries shall be in compliance with the financial
covenants set forth in Section 6.8 on a pro forma basis after giving
effect to such designation as of the last day of the Fiscal Quarter most
recently ended, (as determined in accordance with Section 6.8(d) ), (iv) 
all representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on and as of
the date of such Subsidiary Redesignation (both before and after giving effect
thereto), unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date, and (v)  such Company shall have
delivered to the Administrative Agent an officer’s certificate executed by a
Responsible Officer of such Company, certifying to the best of such officer’s
knowledge, compliance with the requirements of preceding clauses (i) through
(iv), inclusive, and containing the calculations and information required by
the preceding clause (iii).

 

“U.S. Lender” as defined in Section 2.20(c).

 

“Waivable Prepayment” as defined in Section 2.15(c).

 

“Working Capital Collateral” means the collateral, including (i) all
accounts receivable for goods sold and services rendered by Company or any of
Company’s Subsidiaries, and rents license fees, and “payment intangibles” (as
that term is defined in the UCC now or hereafter in effect) in respect of the
foregoing and all proceeds or any of the foregoing (“Accounts”)
(including, without limitation, all Accounts constituting proceeds of
inventory); (ii)  all rights of enforcement and collection, remedies,
guarantees, supporting obligations, letter-of-credit rights and security
interests, in each case, in respect of the Accounts; (iii)  all books and
records, information and data evidencing or describing the Accounts, whether
compiled or derived by Company or any of its subsidiaries or to which Company
or any of its subsidiaries is entitled, in whatever form or medium, that at any
time evidence or contain information relating to any of the Accounts or are
otherwise necessary or helpful in the collection thereof or realization
thereon; (iv)  the lockbox where the proceeds of Accounts are deposited
(including any and all funds and other payments deposited therein); (v) 
all accessions and additions to, and substitutions and replacements of, any and
all of the foregoing; and (vi)  all proceeds and products of the foregoing
(including, without limitation, payment intangibles, as such term is defined in
the UCC), securing the Permitted Working Capital Facility, on which Merrill
Lynch (or the applicable Collateral Agent) has a Lien pursuant to the Working
Capital Facility Security Agreement.

 

“Working Capital Facility Credit Agreement” means the Credit
Agreement, dated as of August 19, 2004, as amended by the First Amendment dated
as of October 20, 2004, among Company and Merrill Lynch (or any subsequent
agent under the Working Capital Facility Credit Agreement) and other lenders
from time to time party thereunder, the Second Amendment dated as of April 13,
2005 and as further amended, restated supplemented and otherwise modified from
time to time (including the Third Amendment thereto being executed and
delivered concurrently with this Agreement), pursuant to which Company may
borrow up to a principal amount of $40,000,000 at any time outstanding, subject
to the terms and conditions thereof.

 

“Working Capital Facility Security Agreement” shall mean,
collectively, (i) the Second Amended and Restated Security Agreement,
dated as of April 13, 2005 between the Company and Merrill Lynch Capital, a
division of Merrill Lynch Business Financial Services, as agent and (ii) 
each other security agreement under which any additional Person may from time
to time subject Working Capital Collateral to a lien in favor of the Working
Capital Facility Lienholder (as defined in the Working Capital Intercreditor
Agreement), in each case, as amended, restated supplemented or otherwise
modified from time to time in accordance with the terms of the Working Capital
Intercreditor Agreement.

 

25

 

“Working Capital Intercreditor Agreement” means an
intercreditor and lien subordination agreement, dated as of the date hereof,
among the Collateral Agent and Merrill Lynch, pursuant to which the Lenders
shall agree not to take enforcement action with respect to the Working Capital
Collateral until the Working Capital Facility shall be paid in full; and
otherwise in a form reasonably satisfactory to the Collateral Agent and the
Requisite Lenders.

 

1.2.         Accounting Terms. Except
as otherwise expressly provided herein, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.
Financial statements and other information required to be delivered by Company
to Lenders pursuant to Section 5.1(a), 5.1(b) and 5.1(c) shall
be prepared in accordance with GAAP as in effect at the time of such
preparation. Subject to the foregoing, calculations in connection with the
definitions, covenants and other provisions hereof shall utilize accounting
principles and policies in conformity with those used to prepare the Historical
Financial Statements.

 

1.3.         Interpretation, etc. Any
of the terms defined herein may, unless the context otherwise requires, be used
in the singular or the plural, depending on the reference. References herein to
any Section, Appendix, Schedule or Exhibit shall be to a Section, an
Appendix, a Schedule or an Exhibit, as the case may be, hereof unless otherwise
specifically provided. The use herein of the word “include” or “including”,
when following any general statement, term or matter, shall not be construed to
limit such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
non-limiting language (such as “without limitation” or “but not limited to” or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that fall within the broadest
possible scope of such general statement, term or matter. The terms lease and
license shall include sub-lease and sub-license, as applicable.

 

SECTION 2.         LOANS

 

2.1.         Initial Term Loans.

 

(a)           Initial Term Loan Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make, on the Closing Date,
an Initial Term Loan to Company in an amount equal to such Lender’s Initial
Term Loan Commitment, such that the total Initial Term Loans of all Lenders
made on the Closing Date shall be $170,000,000. The Company may make only one
borrowing under the Initial Term Loan Commitments, which shall be on the
Closing Date. Any amount borrowed under this Section 2.1(a) and
subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and
2.14, all amounts owed hereunder with respect to the Initial Term Loans shall
be paid in full no later than the Maturity Date. Each Lender’s Initial Term
Loan Commitment shall terminate immediately and without further action on the
Closing Date after giving effect to the funding of such Lender’s Initial Term
Loan Commitment on such date.

 

(b)           Borrowing Mechanics for Initial Term Loans.

 

(i)            Company shall deliver to
Administrative Agent a fully executed Funding Notice not later than 1:00 p.m. (New
York City time) on the Closing Date. Promptly upon receipt by Administrative
Agent of such Funding Notice, Administrative Agent shall notify each Lender of
the proposed borrowing.

 

(ii)           Upon satisfaction or waiver of the
conditions precedent specified in Section 3.1, each Lender shall make its
Initial Term Loan available to Administrative Agent not later than 12:00 p.m. (New
York City time) on the Closing Date, by wire transfer of same day funds in
Dollars, at the Principal Office. Upon satisfaction or waiver of the conditions
precedent

 

26

 

specified in Section 3.1,
in accordance with the provisions set forth herein, Administrative Agent shall
make the proceeds of the Initial term Loans available to Company on the Closing
Date by causing an amount of same day funds in Dollars equal to the proceeds of
all such Initial Term Loans received by Administrative Agent from Lenders to be
credited to the account of Company as designated in the Funding Notice by
Company.

 

2.2.         Delayed Draw Term Loans.

 

(a)           Delayed Draw Term Loan Commitments. Subject to the terms and
conditions hereof, each Lender severally agrees to make up to two Delayed Draw
Term Loans to Company, in each case in an amount up to the remaining amount of
such Lender’s Delayed Draw Term Loan Commitment at the time of the making of
the applicable Delayed Draw Term Loan; provided that the aggregate
principal amount of Delayed Draw Term Loans drawn on each applicable Credit
Date shall not be less than $5,000,000 (unless the remaining Delayed Draw Term
Loan Commitment is less than $5,000,000, in which case such drawing shall be
the remaining amount of such commitment). Any amount borrowed under this Section 2.2(a) and
subsequently repaid or prepaid may not be reborrowed. Subject to Sections 2.13(a) and
2.14, all amounts owed hereunder with respect to the Delayed Draw Term Loans
shall be paid in full no later than the Maturity Date. Each Lender’s Delayed
Draw Term Loan Commitment shall be reduced upon the making of each Delayed Draw
Term Loan by an amount equal to the amount of such Delayed Draw Term Loan and
the unused Delayed Draw Term Loan Commitments shall terminate immediately and
without further action at 5:00 p.m. (New York City time) on the Delayed Draw
Expiration Date. For the avoidance of doubt, the only conditions applicable to
the making of a Delayed Draw Term Loan are those specified in Section 3.2.;
provided that the conditions in 3.1 have been satisfied on the Closing
Date and the applicable notices given under this Section 2.2.

 

(b)           Borrowing Mechanics for Delayed Draw Term Loans.

 

(i)            Whenever Company desires that
Lenders make Delayed Draw Term Loans, Company shall deliver to Administrative
Agent a telephonic notice or email notice promptly followed by a fully executed
Funding Notice no later than 12:00 noon (New York City time) at least three
Business Days in advance of the proposed Credit Date in the case of a
Eurodollar Rate Loan, and at least one Business Day in advance of the proposed
Credit Date in the case of a Base Rate Loan. Except as otherwise provided herein,
a Funding Notice for a Delayed Draw Term Loan that is a Eurodollar Rate Loan
shall be irrevocable on and after the related Interest Rate Determination Date,
and Company shall be bound to make a borrowing in accordance therewith.

 

(ii)           Notice of receipt of each Funding
Notice in respect of Delayed Draw Term Loans, together with the amount of each
Lender’s Pro Rata Share thereof, together with the interest rate, shall be
provided by Administrative Agent to each applicable Lender by telefacsimile
with reasonable promptness, but (provided Administrative Agent shall have
received such notice by 12:00 noon (New York City time)) not later than 4:00
p.m. (New York City time) on the same day as Administrative Agent’s receipt of
such Notice from Company.

 

(iii)          Upon satisfaction or waiver of the
conditions precedent specified in Section 3.2, each Lender shall make the
amount of its Delayed Draw Term Loan available to Administrative Agent not
later than 12:00 p.m. (New York City time) on the applicable Credit Date by
wire transfer of same day funds in Dollars, at the Principal Office designated
by Administrative Agent. Except as provided herein, upon satisfaction or waiver
of the conditions precedent specified in Section 3.2, Administrative Agent
shall make the proceeds of such Delayed Draw Term Loans available to Company on
the applicable Credit Date by causing an

 

27

 

amount of same day
funds in Dollars equal to the proceeds of all such Delayed Draw Term Loans
received by Administrative Agent from Lenders to be credited to the account of
Company at the Principal Office designated by Administrative Agent or such
other account as may be designated in writing to Administrative Agent by
Company.

 

(c)           The Company may at any time terminate, or from time to
time reduce, the Delayed Draw Term Loan Commitments, provided that each
reduction of the Delayed Draw Term Loan Commitments shall be in an amount that
is an integral multiple of $1,000,000 and not less than $1,000,000.

 

2.3.         [RESERVED].

 

2.4.         [RESERVED].

 

2.5.         Pro Rata Shares;
Availability of Funds.

 

(a)           Pro Rata Shares. All Loans shall be made, and all participations
purchased under Section 2.17, by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that
no Lender and Administrative Agent shall be responsible for any default by any
other Lender in such other Lender’s obligation to make a Loan requested under
this Agreement or purchase a participation required hereby under Section 2.17
nor shall any Commitment of any Lender be increased or decreased as a result of
a default by any other Lender in such other Lender’s obligation to make a Loan
requested under this Agreement or purchase a participation required hereby
under Section 2.17.

 

(b)           Availability of Funds. Unless Administrative Agent shall
have been notified by any Lender prior to the Closing Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender’s Loan requested on the Closing Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on the
Closing Date or Administrative Agent may, in its sole discretion make available
to Company a corresponding amount on the Closing Date. If such corresponding
amount is not in fact made available to Administrative Agent by such Lender but
Administrative Agent has made such amount available to Company, Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the Closing Date until
the date such amount is paid to Administrative Agent, at the customary rate set
by Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If Administrative Agent has made
such amount available to Company but such Lender does not pay such
corresponding amount forthwith upon Administrative Agent’s demand therefor,
Administrative Agent shall promptly notify Company and Company shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from the Closing Date until the date such amount
is paid to Administrative Agent, at the rate payable hereunder for Base Rate
Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any
Lender from its obligation to fulfill its Commitment hereunder or to prejudice
any rights that Company may have against any Lender as a result of any default
by such Lender hereunder.

 

2.6.         Use of Proceeds. The
proceeds of the Loans made pursuant to Section 2.1 shall be used by
Company, in the case of the Initial Term Loans, to refinance the Existing
Specified Indebtedness with any excess for working capital, Permitted
Acquisitions, permitted capital expenditures, other general corporate purposes
and to pay fees and expenses incurred in connection with this Agreement, the
Permitted Working Capital Facility or the Existing Specified Indebtedness and,
in the case of the Delayed Draw Term Loans, for working capital, Permitted
Acquisitions, permitted capital expenditures and other general corporate
purposes. No portion of the proceeds of any Credit Extension shall be used in
any

 

28

 

manner that causes or might cause such Credit Extension or the
application of such proceeds to violate Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System or any
other regulation thereof or to violate the Exchange Act.

 

2.7.         Evidence of Debt;
Register; Lenders’ Books and Records; Notes.

 

(a)           Lenders’ Evidence of Debt. Each Lender shall maintain on its
internal records an account or accounts evidencing the Obligations of Company
to such Lender, including the amounts of the Loans made by it, accrued interest
and fees thereon and each repayment and prepayment in respect thereof. Any such
recordation shall be conclusive and binding on Company, absent manifest error; provided,
that the failure to make any such recordation, or any error in such
recordation, shall not affect any Lender’s Commitment or Company’s Obligations
in respect of any applicable Loans; and provided, further, in the
event of any inconsistency between the Register and any Lender’s records, the
recordations in the Register (if applicable) shall govern.

 

(b)           Register. Administrative Agent shall maintain at the Principal
Office a register for the recordation of the names and addresses of Lenders and
the Commitments and Loans of each Lender from time to time (the “Register”). The Register shall be available for inspection
by Company or any Lender (with respect to an entry relating to such Lender’s
Loan) at any reasonable time and from time to time upon reasonable prior notice.
Administrative Agent shall record in the Register the Commitments and the
Loans, and each repayment or prepayment in respect of the principal amount of
the Loans, and any such recordation shall be conclusive and binding on Company
and each Lender, absent manifest error; provided, failure to make any
such recordation, or any error in such recordation, shall not affect any Lender’s
Commitment or Company’s Obligations in respect of any Loan. Company hereby
designates GSCP to serve as Company’s agent solely for purposes of maintaining
the Register as provided in this Section 2.7, and Company hereby agrees
that, to the extent GSCP serves in such capacity, GSCP and its Related Parties
shall constitute “Indemnitees” for purposes of this Agreement.

 

(c)           Notes. If so requested by any Lender by written notice to
Company (with a copy to Administrative Agent) at least two Business Days prior
to the Closing Date, or at any time thereafter, Company shall execute and
deliver to such Lender (and/or, if applicable and if so specified in such
notice, to any Person who is an assignee of such Lender pursuant to Section 10.6)
on the Closing Date (or, if such notice is delivered after the Closing Date,
promptly after Company’s receipt of such notice) a Note or Notes to evidence
such Lender’s Delayed Draw Term Loans or Initial Term Loans, as the case may be.

 

2.8.         Interest on Loans.

 

(a)           Except as otherwise set forth herein, each Loan shall
bear interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof as follows:

 

(i)            if a Eurodollar Rate Loan, at the
Adjusted Eurodollar Rate plus the Applicable Margin; or

 

(ii)           if a Base Rate Loan, at the Base
Rate plus the Applicable Margin.

 

(b)           The basis for determining the rate of interest with
respect to any Loan, and the Interest Period with respect to any Eurodollar
Rate Loan, shall be selected by Company and notified to Administrative Agent
and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be. If on any day a Loan is
outstanding with respect to which a Funding Notice or Conversion/Continuation
Notice has not been delivered to Administrative Agent in accordance with

 

29

 

the
terms hereof specifying the applicable basis for determining the rate of
interest, then for that day such Loan shall be a Base Rate Loan.

 

(c)           In the event Company fails to specify between a Base
Rate Loan or a Eurodollar Rate Loan in the applicable Funding Notice or
Conversion/Continuation Notice, such Loan (if outstanding as a Eurodollar Rate
Loan) will be automatically converted into a Base Rate Loan on the last day of
the then current Interest Period (or if outstanding as a Base Rate Loan will
remain as, or (if not then outstanding) will be made as, a Base Rate Loan). In
the event Company fails to specify an Interest Period for any Eurodollar Rate
Loan in the applicable Funding Notice or Conversion/Continuation Notice,
Company shall be deemed to have selected an Interest Period of one month. Prior
to 12:00 noon (New York City time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent
manifest error, be final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an interest rate
is then being determined for the applicable Interest Period and shall promptly
give notice thereof (in writing or by telephone confirmed in writing) to
Company and each Lender.

 

(d)           Interest payable pursuant to Section 2.8(a) shall
be computed (i) in the case of Base Rate Loans on the basis of a 365 day
or 366 day year, as the case may be, and (ii)  in the case of Eurodollar
Rate Loans, on the basis of a 360 day year, in each case for the actual number
of days elapsed in the period during which it accrues. In computing interest on
any Loan, the date of the making of such Loan or the first day of an Interest
Period applicable to such Loan or, with respect to a Base Rate Loan being
converted from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be
included, and the date of payment of such Loan or the expiration date of an
Interest Period applicable to such Loan or, with respect to a Base Rate Loan
being converted to a Eurodollar Rate Loan, the date of conversion of such Base
Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided,
if a Loan is repaid on the same day on which it is made, one day’s interest
shall be paid on that Loan.

 

(e)           Except as otherwise set forth herein, interest on each
Loan shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Loan; (ii)  upon any prepayment of that Loan, whether
voluntary or mandatory, to the extent accrued on the amount being prepaid; and (iii) 
at maturity, including final maturity; provided, however, with
respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall
instead be payable on the next Interest Payment Date.

 

2.9.         Conversion/Continuation.

 

(a)           Subject to Section 2.18 and so long as no Default
or Event of Default shall have occurred and then be continuing, Company shall
have the option:

 

(i)            to convert on the last day of an
Interest Period all of any Loan equal to $5,000,000 and integral multiples of
$5,000,000 in excess of that amount from Base Rate Loans to Eurodollar Rate
Loans, or vice versa; provided, a Eurodollar Rate Loan may only be
converted on the expiration of the Interest Period applicable to such
Eurodollar Rate Loan unless Company shall pay all amounts due under Section 2.18
in connection with any such conversion; or

 

(ii)           upon the expiration of any Interest
Period applicable to any Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $5,000,000 and integral multiples of $5,000,000 in excess
of that amount as a Eurodollar Rate Loan.

 

Notwithstanding
the foregoing, there shall be no more than nine (9) separate Eurodollar Loans
in existence at any one time.

 

30

 

(b)           Company shall deliver a Conversion/Continuation Notice
to Administrative Agent no later than 11:00 a.m. (New York City time) at least
one Business Day in advance of the proposed Conversion/Continuation Date (in
the case of a conversion to a Base Rate Loan) and at least three Business Days
in advance of the proposed Conversion/Continuation Date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). Except as
otherwise provided herein, a Conversion/Continuation Notice for conversion to,
or continuation of, any Eurodollar Rate Loans (or telephonic notice in lieu
thereof) shall be irrevocable and Company shall be bound to effect a conversion
or continuation in accordance therewith. Any Notice shall be executed by an
Authorized Officer in a writing delivered to Administrative Agent. In lieu of
delivering a Notice, Company may give Administrative Agent telephonic notice by
the required time prior to any conversion/continuation; provided, each
such notice shall be promptly confirmed in writing by delivery of the
applicable Notice to Administrative Agent on or before the applicable date of
continuation or conversion. Neither Administrative Agent nor any Lender shall
incur any liability to Company in acting upon any telephonic notice referred to
above that Administrative Agent believes in good faith to have been given by a
duly authorized officer or other person authorized on behalf of Company or for
otherwise acting in good faith.

 

2.10.       Default Interest. Upon
the occurrence and during the continuance of an Event of Default, (i) the
principal amount of all Loans outstanding, and (ii)  to the extent
permitted by applicable law, any interest, fees or other amounts (other than
principal) which are not paid when due, whether by acceleration or otherwise,
shall thereafter bear interest (including post-petition interest in any
proceeding under the Bankruptcy Code or other applicable bankruptcy laws
(including any such interest which, but for the filing of a petition in
bankruptcy, would have accrued, whether or not a claim is allowed for such
interest in the related bankruptcy proceeding)) and be payable on demand at a
rate that is 2% per annum in excess of the interest rate otherwise payable
hereunder, with respect to the applicable Loans (or, in the case of any such
fees and other amounts, at a rate which is 2% per annum in excess of the
interest rate otherwise payable hereunder); provided, in the case of
Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at
the time any such increase in interest rate is effective such Eurodollar Rate
Loans shall thereupon become Base Rate Loans and shall thereafter bear interest
payable upon demand at a rate which is 2% per annum in excess of the interest
rate otherwise payable hereunder for Base rate Loans. Payment or acceptance of
the increased rates of interest provided for in this Section 2.10 is not a
permitted alternative to timely payment and shall not constitute a waiver of
any Event of Default or otherwise prejudice or limit any rights or remedies of
Administrative Agent or any Lender.

 

2.11.       Fees.

 

(a)           Company agrees to pay to Agents such fees and expenses
in the amounts and at the times separately agreed upon in writing.

 

(b)           Company agrees to pay to the Administrative Agent for
the account of each Lender holding a Delayed Draw Term Loan Commitment, a
commitment fee, which shall accrue at a rate equal to one half of the
Applicable Margin in respect of Eurodollar Rate Loans, on the average daily
unused amount of the Delayed Draw Term Loan Commitment of such Lender during
the period from and including the Closing Date to but excluding the earlier of
the termination of the Delayed Draw Term Loan Commitment and the Delayed Draw
Expiration Date (calculated on the basis of a 365-day year and the actual
number of days elapsed), payable quarterly in arrears on the last Business Day
of March, June and/or September, and on the date on which such Delayed Draw
Term Loan Commitments terminate, commencing on the first such date to occur
after the date hereof.

 

31

 

2.12.       Scheduled Principal
Payments.

 

(a)           Scheduled Installments. The principal amounts of the Loans
shall be repaid in consecutive quarterly installments (each, an “Installment”) on the last Business Day of each Fiscal
Quarter (each, an “Installment Date”),
commencing June 30, 2007. Each Installment shall be equal to 0.25% (1% per
annum) of the outstanding principal balance of the Loans on the Closing Date. Each
Installment of Delayed Draw Term Loans shall be equal to 0.25% (1% per annum)
of the outstanding principal balance of the applicable Delayed Draw Term Loan
on the date such Delayed  Draw Term Loan
is made. Interest shall be payable on all principal paid pursuant to this Section 2.12(a),
as calculated pursuant to Section 2.8.

 

(b)           Notwithstanding the foregoing, the Loans together with
all other amounts owed hereunder, shall, in any event, be paid in full no later
than the Maturity Date.

 

2.13.       Voluntary Prepayments.

 

(a)           Voluntary Prepayments.

 

(i)            Any time and from time to time:

 

(1)           with respect to Base Rate Loans,
Company may prepay any such Loans on any Business Day in whole or in part, in
an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000
in excess of that amount; and

 

(2)           with respect to Eurodollar Rate
Loans, Company may prepay any such Loans on any Business Day in whole or in
part in an aggregate minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess of that amount.

 

(ii)           All such prepayments shall be made:

 

(1)           upon not less than one Business Day’s
prior written or telephonic notice in the case of Base Rate Loans; and

 

(2)           upon not less than three Business
Days’ prior written or telephonic notice in the case of Eurodollar Rate Loans,
unless Company compensates each Lender pursuant to Section 2.18(c) for
any losses, expenses or liabilities resulting from making such prepayments on
shorter notice or unless as provided in clause (iv)  below,

 

in each case given to Administrative Agent by 11:00
a.m. (New York City time) on the date required and, if given by telephone,
promptly confirmed in writing to Administrative Agent (and Administrative Agent
will notify each Lender). Upon the giving of any such notice, the principal
amount of the Loans specified in such notice shall become due and payable on
the prepayment date specified therein. Any such voluntary prepayment shall be
applied as specified in Section 2.15(a).

 

(iii)          Not less than three Business Days
prior to making any prepayment of any Eurodollar Rate Loans that would result
in breakage costs pursuant to Section 2.18(c), Company may request in
writing to Administrative Agent that Administrative Agent hold such funds
sufficient to pay the principal amount of such prepayment in escrow in an
interest-bearing account until the earliest such time that the Eurodollar Rate
Loans can be repaid without the

 

32

 

incurrence of such
breakage costs. Pending the Administrative Agent’s application of funds to make
such prepayment, such funds shall be held as part of the Collateral. Any
interest earned on amounts held in escrow shall be credited to and delivered to
Company. The Administrative Agent shall give Company and each lender three (3) Business
Days’ prior written or telephonic notice of the date on which such funds will
be applied to prepayments of the Loans. In accordance with Sections 2.16(a) and
(b), Company shall pay interest on the amount so prepaid, until such escrow
funds are applied to the applicable Eurodollar Rate Loan.

 

(b)           [Reserved].

 

(c)           [Reserved].

 

(d)           Prepayment Premium. In the event that for any reason any Loans are
prepaid in whole or in part prior to the first anniversary of the Closing Date
with the proceeds of new term loans having interest rate spreads that are lower
than the Applicable Margin, except as provided in Sections 2.14 and 2.23,
Company shall pay to Lenders having Loan Exposure a call premium equal to one
percent of the principal amount prepaid. Prepayments after the first
anniversary of the Closing Date through the Maturity Date shall not have any
call premiums.

 

2.14.       Mandatory Prepayments.

 

(a)           Asset Sales. No later than the second Business Day following the
date of receipt by Company or any of its Subsidiaries of any Net Asset Sale
Proceeds, Company shall prepay the Loans in an aggregate amount equal to such
Net Asset Sale Proceeds; provided, so long as no Event of Default shall
have occurred and be continuing, Company shall have the option, directly or
through one or more of its Guarantor Subsidiaries, to commit to invest, within
one year after receipt thereof (and, if so committed, to invest within 18
months after receipt thereof), any Net Asset Sale Proceeds; provided, further,
that if aggregate Net Asset Sale Proceeds from the Closing Date through the
applicable date of determination do not exceed $2,000,000 for any Fiscal Year,
Company shall have no obligation to prepay the Loans or reinvest the proceeds
thereof.

 

(b)           Insurance/Condemnation Proceeds. No later than the second Business
Day following the date of receipt by Company or any of its Subsidiaries, or
Administrative Agent as loss payee, of any Net Insurance/Condemnation Proceeds,
Company shall prepay the Loans in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds; provided, so long as no Event of
Default shall have occurred and be continuing, Company shall have the option,
directly or through one or more of its Subsidiaries, to commit to invest, within
one year after receipt thereof (and, if so committed, to invest within 18
months after receipt thereof), any Net Insurance/Condemnation Proceeds, up to
an aggregate amount for all such invested Net Insurance/Condemnation Proceeds
after the Closing Date not to exceed $35,000,000, which investment may include
the repair, restoration or replacement of the applicable assets thereof.

 

(c)           Issuance of Equity Securities. Company shall prepay the Loans no
later than the second Business Day following receipt by Company or any of its
Subsidiaries of all Cash proceeds (net of underwriting discounts and
commissions and other reasonable costs and expenses associated therewith,
including reasonable legal fees and expenses) received from a capital
contribution to, or the issuance of any Capital Stock, except for (i) equity
securities issued in an IPO; (ii)  Capital Stock issued in connection with
warrants outstanding as of December 31, 2006 (as specified on Schedule 2.14(c))
of Company or any of its Subsidiaries; and (iii)  Capital Stock or options
issued pursuant to any employee stock, arrangement, stock option compensation
plan, employment agreement or similar such plans.

 

33

 

(d)           Issuance of Debt. On the date of receipt by Company or any of its
Subsidiaries of any Cash proceeds from the incurrence of any Indebtedness of
Company or any of its Subsidiaries (other than with respect to any Indebtedness
permitted to be incurred pursuant to Section 6.1), Company shall prepay
the Loans in an aggregate amount equal to 100% of such proceeds, net of
underwriting discounts and commissions and other reasonable costs and expenses
associated therewith, including reasonable legal fees and expenses.

 

(e)           Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow for any Fiscal Year (commencing with the Fiscal
Year ending December 31, 2007), Company shall, no later than 105 days after the
end of such Fiscal Year, prepay the Loans in an aggregate amount equal to (i) 50%
of such Consolidated Excess Cash Flow minus (ii)  (x)  the
aggregate principal amount of voluntary prepayments of Loans made during such
Fiscal Year and (y)  50% of the aggregate principal amount of mandatory
prepayments of Loans pursuant to the other provisions of this Section 2.14,
to the extent the event or transaction giving rise to such mandatory prepayment
resulted in an increase to Consolidated Excess Cash Flow during such Fiscal
Year; provided, that if, as of the last day of such Fiscal Year, the
Leverage Ratio shall be less than 2.0 to 1.0, Company shall only be required to
make the prepayments otherwise required hereby in an amount equal to (i) 25%
of such Consolidated Excess Cash Flow minus (ii)  (x)  the
aggregate principal amount of voluntary prepayments of Loans made during such
Fiscal Year and (y)  25% of the aggregate principal amount of mandatory
prepayments of Loans pursuant to the other provisions of this Section 2.14,
to the extent the event or transaction giving rise to such mandatory prepayment
resulted in an increase to Consolidated Excess Cash Flow during such Fiscal
Year and provided  further, that Company shall not be required to
make any prepayments pursuant to this Section 2.14(e)  in respect of
such Fiscal Year’s Consolidated Excess Cash Flow if, as of the last day of such
Fiscal Year, the Leverage Ratio is less than 1.0 to 1.0.

 

(f)            Prepayment Certificate. Not less than one (1) 
Business Day prior to the date of any prepayment of the Loans pursuant to
Sections 2.14(a) through 2.14(d) , Company shall deliver to
Administrative Agent a certificate of an Authorized Officer demonstrating the
calculation of the amount of the applicable net proceeds. In the event that
Company shall subsequently determine that the actual amount received exceeded
the amount set forth in such certificate, Company shall promptly make an
additional prepayment of the Loans in the amount of such excess, and Company
shall concurrently therewith deliver to Administrative Agent a certificate of
an Authorized Officer demonstrating the derivation of such excess.

 

2.15.       Application of Prepayments.

 

(a)           Application of Voluntary Prepayments. Any prepayment of any Loan
pursuant to Section 2.13 shall be applied as specified by Company in the
applicable notice of prepayment; provided, in the event Company fails to
specify the Loans to which any such prepayment shall be applied, such
prepayment shall be applied in the manner set forth in Section 2.15(b).

 

(b)           Application of Mandatory Prepayments. Any amount required to be paid
pursuant to Sections 2.14(a) through 2.14(e)  shall be applied to
prepay Loans and reduce Commitments, if any, of the Lenders in accordance with
their respective Pro Rata Shares.

 

(c)           Waivable Mandatory Prepayment. Anything contained herein to the
contrary notwithstanding, so long as any Loans are outstanding, in the event
Company is required to make a mandatory prepayment (a “Waivable
Prepayment”) of the Loans pursuant to Section 2.14, then
Company shall, within two Business Days of knowledge of such Waivable
Prepayment, notify Administrative Agent in writing of the amount of such
prepayment, and Administrative Agent shall promptly thereafter notify each
Lender holding an outstanding Loan of the amount of such Lender’s Pro

 

34

 

Rata
Share of such Waivable Prepayment and such Lender’s option to refuse such
amount. Each such Lender may exercise such option by giving written notice, or
telephonic notice followed within one Business Day with written notice, to
Company and Administrative Agent of its election to do so, on or before noon
New York time on the second Business Day following receipt of Company’s notice
(the “Required Prepayment Date”) (it being
understood that any Lender that does not notify Company and Administrative
Agent of its election to exercise such option by noon New York time on the
Required Prepayment Date shall be deemed to have elected, as of such date, not
to exercise such option). On the Required Prepayment Date, Company shall pay to
Administrative Agent an amount equal to that portion of the Waivable Prepayment
payable to those Lenders that have elected not to exercise such option to
prepay the Loans of such Lenders in accordance with Section 2.15(b). Such
portion of the Waivable Prepayment not payable due to the election by any
Lender to waive rights to the Waivable Prepayment shall be offered to any
Lender, who shall have the right to receive such Lender’s pro rata share (as
between those non-waiving Lenders) of any additional amounts of the Waivable
Prepayment waived by other Lenders; provided, however, that no
Lender shall receive or be paid any amount in excess of such Lender’s Loan
Exposure.

 

(d)           Application of Prepayments of Loans to Base Rate Loans
and Eurodollar Rate Loans. Any prepayment of Loans shall be applied first to
Base Rate Loans to the full extent thereof before application to Eurodollar
Rate Loans, in each case in a manner that minimizes the amount of any payments
required to be made by Company pursuant to Section 2.18(c).

 

2.16.       General Provisions
Regarding Payments.

 

(a)           All payments by Company of principal of the Loans,
interest, fees and other Obligations shall be made in Dollars in same day
funds, without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 2:00 p.m. (New
York City time) on the date due at the Principal Office for the account of
Lenders.

 

(b)           All payments in respect of the principal amount of any
Eurodollar Rate Loan shall be accompanied by payment of accrued interest on the
principal amount being repaid or prepaid. All payments in respect of the
principal amount of any Base Rate Loan shall be payable on the next Interest
Payment Date, and all such payments (and, in any event, any payments in respect
of any Loan on a date when interest is due and payable with respect to such
Loan) shall be applied to the payment of interest then due and payable before
application to principal.

 

(c)           Administrative Agent shall promptly distribute to each
Lender at such address as such Lender shall indicate in writing, such Lender’s
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Administrative Agent (other than such fees, costs and expense
payable to any Agent, and such payments shall be first applied to such fees,
cost and expenses payable to such Agent).

 

(d)           Notwithstanding the foregoing provisions hereof, if
any Conversion Notice is withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans, Administrative Agent shall give effect thereto in apportioning
payments received thereafter.

 

(e)           [Reserved].

 

(f)            Company hereby authorizes Administrative Agent to
charge Company’s accounts (if any) with Administrative Agent in order to cause
timely payment to be made to Administrative Agent

 

35

 

of
all principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).

 

(g)           All payments received by Administrative Agent after
2:00 p.m. shall be deemed received on the next Business Day and any applicable
interest shall apply, and such payment shall be considered a nonconforming
payment. Any nonconforming payment may constitute or become a Default or Event
of Default in accordance with the terms of Section 8.1(a). Interest shall
continue to accrue on any principal as to which a nonconforming payment is made
until such funds become available funds (but in no event less than the period
from the date of such payment to the next succeeding applicable Business Day)
at the rate determined pursuant to Section 2.10 from the date such amount
was due and payable until the date such amount is paid in full.

 

(h)           If an Event of Default shall have occurred and not
otherwise been waived, and the maturity of the Obligations shall have been
accelerated pursuant to Section 8.1, all payments or proceeds received by
Agents hereunder in respect of any of the Obligations, shall be applied first, to the payment of all reasonable
costs and expenses of such sale, collection or other realization, including
reasonable compensation to the Administrative Agent and Collateral Agent and
their Related Parties, and all other reasonable expenses, liabilities and
advances made or incurred by the Administrative Agent and the Collateral Agent
and their Related Parties in connection therewith, and all amounts for which
the Collateral Agent and the Administrative Agent and their Related Parties are
entitled to indemnification hereunder (in their capacity as the Collateral
Agent or Administrative Agent or their Related Parties thereof, as applicable,
and not as a Lender) and all advances made by the Collateral Agent and the
Administrative Agent hereunder for the account of the applicable Grantor, and
to the payment of all costs and expenses paid or incurred by the Collateral
Agent and Administrative Agent and their Related Parties in connection with the
exercise of any right or remedy hereunder or under the Credit Agreement, all in
accordance with the terms hereof or thereof; second,
to the extent of any excess of such proceeds, to the payment of all other
Obligations for the ratable benefit of the Lenders; and third, to the extent of any excess of such
proceeds, to the payment to, or upon the order of, Company or Guarantor
Subsidiary or to whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.

 

2.17.       Ratable Sharing. Lenders
hereby agree among themselves that, except as otherwise provided in Section 2.16(h) ,
if any of them shall, whether by voluntary payment, through the exercise of any
right of set off or banker’s lien, by counterclaim or cross action or by the
enforcement of any right under the Credit Documents or otherwise, or as
adequate protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of the aggregate
amount of principal, interest, fees and other amounts then due and owing to
such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than
the proportion received by any other Lender in respect of the Aggregate Amounts
Due to such other Lender, then the Lender receiving such proportionately
greater payment shall (a) notify Administrative Agent and each other
Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the
other Lenders so that all such recoveries of Aggregate Amounts Due shall be
shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided,
if all or part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon the bankruptcy
or reorganization of Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without interest.
Company expressly consents to the foregoing arrangement and agrees that any
holder of a participation so purchased may exercise any and all rights of
banker’s lien, set off or counterclaim with respect to any and all monies owing
by Company to that holder

 

36

 

with respect thereto as fully as if that holder were owed the amount of
the participation held by that holder.

 

2.18.       Making or Maintaining
Eurodollar Rate Loans.

 

(a)           Inability to Determine Applicable Interest Rate. In the event that Administrative
Agent shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate,
Administrative Agent shall on such date give notice to Company and each Lender
of such determination, whereupon (i) no Loans may be made as, or converted
to, Eurodollar Rate Loans until such time as Administrative Agent notifies
Company and Lenders that the circumstances giving rise to such notice no longer
exist, and (ii)  any Funding Notice or Conversion/Continuation Notice
given by Company with respect to the Loans in respect of which such
determination was made shall be deemed to be rescinded by Company.

 

(b)           Illegality or Impracticability of Eurodollar Rate
Loans. In
the event that on any date any Lender shall have reasonably determined (which
determination shall be final and conclusive and binding upon all parties hereto
but shall be made only after consultation with Company and Administrative
Agent) that the making, maintaining or continuation of its Eurodollar Rate
Loans (i) has become unlawful as a result of compliance by such Lender in
good faith with any law, treaty, governmental rule, regulation, guideline or
order (or would conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the failure to
comply therewith would not be unlawful), or (ii)  has become
impracticable, as a result of contingencies occurring after the date hereof
which materially and adversely affect the London interbank market, then, and in
any such event, such Lender shall be an “Affected Lender” and it shall on that
day give notice (by facsimile or by telephone confirmed in writing) to Company
and Administrative Agent of such determination (which notice Administrative
Agent shall promptly notify each other Lender). Thereafter (1)  the
obligation of the Affected Lender to make Loans as, or to convert Loans to,
Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn
by the Affected Lender, (2)  to the extent such determination by the
Affected Lender relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Funding Notice or a Conversion/Continuation Notice, the
Affected Lender shall make such Loan as (or continue such Loan as or convert
such Loan to, as the case may be) a Base Rate Loan, (3) the Affected
Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur
of the expiration of the next Interest Period then in effect with respect to
the Affected Loans or when required by law, and (4) the Affected Loans
shall automatically convert into Base Rate Loans on the date of such
termination. Notwithstanding the foregoing, to the extent a determination by an
Affected Lender as described above relates to a Eurodollar Rate Loan then being
requested by Company pursuant to a Funding Notice or a Conversion/Continuation
Notice, Company shall have the option, subject to the provisions of Section 2.18(c),
to rescind such Funding Notice or Conversion/Continuation Notice as to all
Lenders by giving notice (by facsimile or by telephone confirmed in writing) to
Administrative Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above (which notice of
rescission Administrative Agent shall promptly notify each other Lender). Except
as provided in the immediately preceding sentence, nothing in this Section 2.18(b) shall
affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms hereof.

 

(c)           Compensation for Breakage or Non Commencement of
Interest Periods.
Company shall compensate each Lender, upon written request by such Lender
(which request shall set

 

37

 

forth
the basis for requesting such amounts), for all reasonable losses, expenses and
liabilities (including any interest paid by such Lender to Lenders of funds
borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense
or liability sustained by such Lender in connection with the liquidation or re
employment of such funds but excluding loss of anticipated profits) which such
Lender may sustain: (i) if for any reason (other than a default by such
Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Funding Notice or a telephonic request for borrowing,
or a conversion to or continuation of any Eurodollar Rate Loan does not occur
on a date specified therefor in a Conversion/Continuation Notice or a
telephonic request for conversion or continuation; (ii)  if any prepayment
or other principal payment of, or any conversion of, any of its Eurodollar Rate
Loans occurs on a date prior to the last day of an Interest Period applicable
to that Loan; (iii)  if any prepayment of any of its Eurodollar Rate Loans
is not made on any date specified in a notice of prepayment given by Company,
or (iv)  any prepayment of any of its Eurodollar Rate Loans is made on
less than three Business Days’ notice pursuant to Section 2.13(a)(iii)(2) .

 

(d)           Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of such Lender.

 

(e)           Assumptions Concerning Funding of Eurodollar Rate
Loans. Calculation
of all amounts payable to a Lender under this Section 2.18 and under Section 2.19
shall be made as though such Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America; provided,
however, each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be utilized only for the
purposes of calculating amounts payable under this Section 2.18 and under Section 2.19.

 

2.19.       Increased Costs; Capital
Adequacy.

 

(a)           Compensation For Increased Costs and Taxes. Subject to the provisions of Section 2.20
(which shall be controlling with respect to the matters covered thereby), in
the event that any Lender shall reasonably determine (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) that any law, treaty or governmental rule, regulation or order,
or any change therein or in the interpretation, administration or application
thereof (including the introduction of any new law, treaty or governmental
rule, regulation or order), or any determination of a court or governmental
authority, in each case that becomes effective after the date hereof, or
compliance by such Lender with any guideline, request or directive issued or
made after the date hereof by any central bank or other governmental or quasi-governmental
authority (whether or not having the force of law):  subjects such Lender (or its applicable
lending office) to any additional Tax (other than any Tax on the net income of
such Lender) with respect to this Agreement or any of the other Credit
Documents or any of its obligations hereunder or thereunder or any payments to
such Lender (or its applicable lending office) of principal, interest, fees or
any other amount payable hereunder; (ii)  imposes, modifies or holds
applicable any reserve (including any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC insurance or
similar requirement against assets held by, or deposits or other liabilities in
or for the account of, or advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of such Lender (other than any
such reserve or other requirements with respect to Eurodollar Rate Loans that
are reflected in the definition of Adjusted Eurodollar Rate); or (iii) 
imposes any other condition (other than with respect to a Tax matter) on or
affecting such Lender (or its applicable lending office) or its obligations
hereunder or the London

 

38

 

interbank
market; and the result of any of the foregoing is to increase the cost to such
Lender of agreeing to make, making or maintaining Loans hereunder or to reduce
any amount received or receivable by such Lender (or its applicable lending
office) with respect thereto; then, in any such case, Company shall promptly
pay to such Lender, upon receipt of the statement referred to in the next
sentence, such additional amount or amounts (in the form of an increased rate
of, or a different method of calculating, interest or otherwise as such Lender
in its sole discretion shall determine) as may be necessary to compensate such
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Administrative Agent) a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to such Lender under this
Section 2.19(a), which statement shall be conclusive and binding upon all
parties hereto absent manifest error.

 

(b)           Capital Adequacy Adjustment. In the event that any Lender shall
have reasonably determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender’s Loans or other obligations
hereunder with respect to the Loans to a level below that which such Lender or
such controlling corporation could have achieved but for such adoption,
effectiveness, phase-in, applicability, change or compliance (taking into
consideration the policies of such Lender or such controlling corporation with
regard to capital adequacy), then from time to time, within five Business Days
after receipt by Company from such Lender of the statement referred to in the
next sentence, Company shall pay to such Lender such additional amount or
amounts as will compensate such Lender or such controlling corporation on an
after-tax basis for such reduction. Such Lender shall deliver to Company (with
a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to
Lender under this Section 2.19(b), which statement shall be conclusive and
binding upon all parties hereto absent manifest error.

 

2.20.       Taxes; Withholding, etc.

 

(a)           Payments to Be Free and Clear. All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within
the United States of America or any political subdivision in or of the United
States of America or any other jurisdiction from or to which a payment is made
by or on behalf of any Credit Party or by any federation or organization of
which the United States of America or any such jurisdiction is a member at the
time of payment. In addition, each Credit Party shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.

 

(b)           Withholding of Taxes. If any Credit Party is required by
law to make any deduction or withholding on account of any such Tax from any
sum paid or payable by any Credit Party to Administrative Agent or any Lender
under any of the Credit Documents: (i) Company shall notify Administrative
Agent of any such requirement or any change in any such requirement as soon as
practicable after Company becomes aware of it; (ii)  Company shall pay any
such Tax before the date on which penalties attach thereto, such payment to be
made (if the liability to pay is imposed on any Credit Party) for its own
account or (if that liability is imposed on Administrative Agent or such
Lender, as the

 

39

 

case
may be) on behalf of and in the name of Administrative Agent or such Lender; (iii) 
the sum payable by such Credit Party in respect of which the relevant deduction
or withholding is required shall be increased to the extent necessary to ensure
that, after the making of that deduction or withholding, Administrative Agent
or such Lender, as the case may be, receives on the due date a net sum equal to
what it would have received had no such deduction or withholding been required
or made; and (iv)  within thirty days after paying any sum from which it
is required by law to make any deduction or withholding, Company shall deliver
to Administrative Agent evidence satisfactory to the other affected parties of
such deduction or withholding and of the remittance thereof to the relevant taxing
or other authority; provided, no such additional amount shall be
required to be paid to the Administrative Agent or any Lender under clause (iii) 
above except to the extent that any change after the date hereof (in the case
of the Administrative Agent and each Lender listed on the signature pages
hereof on the Closing Date) or after the effective date of an assignment or
appointment pursuant to which such Lender or a new Administrative Agent became
a party to this Agreement  in any such
requirement for a deduction or withholding as is mentioned therein shall result
in an increase in the rate of such deduction or withholding from that in effect
at the date hereof or at the date of such an assignment or appointment, as the
case may be, in respect of payments to such Lender or Administrative Agent; provided
further, no such additional amount shall be required to be paid to
Administrative Agent or any Lender under clause (iii)  above with respect
to backup withholding.

 

(c)           Evidence of Exemption From U.S. Withholding Tax. Each Lender (including for
purposes of this Section 2.20(c), the Administrative Agent) that is not a
United States Person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for United States federal income tax purposes (a “Non-US Lender”) shall deliver to Administrative Agent for
transmission to Company, on or prior to the Closing Date (in the case of each
Lender listed on the signature pages hereof on the Closing Date) or on or prior
to the date of the Assignment Agreement pursuant to which it becomes a Lender
(in the case of each other Lender), and at such other times as may be necessary
in the determination of Company or Administrative Agent (each in the reasonable
exercise of its discretion), (i) two original copies of Internal Revenue
Service Form W-8BEN or W-8ECI (or any successor forms), properly completed and
duly executed by such Lender, and such other documentation required under the
Internal Revenue Code and reasonably requested by Company or Administrative Agent
to establish that such Lender is not subject to deduction or withholding of
United States federal income tax with respect to any payments to such Lender of
principal, interest, fees or other amounts payable under any of the Credit
Documents, or (ii)  if such Lender is not a “bank” or other Person
described in Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form W-8BEN (with respect to
income tax treaty benefits) or W-8ECI pursuant to clause (i) above, a
Certificate re Non-Bank Status together with two original copies of the
appropriate Internal Revenue Service Form W-8 (or any successor form), properly
completed and duly executed by such Lender, and such other documentation
required under the Internal Revenue Code and reasonably requested by Company to
establish that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender of
interest payable under any of the Credit Documents. Each Lender that is a
United States person (as such term is defined in Section 7701(a)(30) of
the Internal Revenue Code) for United States federal income tax purposes (a “U.S. Lender”) shall deliver to Administrative Agent and
Company on or prior to the Closing Date (or, if later, on or prior to the date
on which such Lender becomes a party to this Agreement) two original copies of
Internal Revenue Service Form W-9 (or any successor form), properly completed
and duly executed by such Lender, certifying that such U.S. Lender is entitled
to an exemption from United States backup withholding tax, or otherwise prove
that it is entitled to such an exemption. Each Lender required to deliver any
forms, certificates or other evidence with respect to United States federal
income tax withholding matters pursuant to this Section 2.20(c) hereby
agrees, from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall

 

40

 

promptly
deliver to Administrative Agent for transmission to Company two new original
copies of Internal Revenue Service Form W-8BEN or W-8ECI, or a Certificate re
Non-Bank Status and two original copies of Internal Revenue Service Form W-8,
as the case may be, properly completed and duly executed by such Lender, and
such other documentation required under the Internal Revenue Code and
reasonably requested by Company to confirm or establish that such Lender is not
subject to deduction or withholding of United States federal income tax with
respect to payments to such Lender under the Credit Documents, or notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence. Company shall not be required to pay any
additional amount to any Non- US Lender under this Section 2.20 if such
Lender shall have failed (1)  to deliver the forms, certificates or other
evidence referred to in this Section 2.20(c), or (2)  to notify
Administrative Agent and Company of its inability to deliver any such forms,
certificates or other evidence, as the case may be; provided, if such
Lender shall have satisfied the requirements of the first sentence of this Section 2.20(c) on
the Closing Date or on the date of the Assignment Agreement pursuant to which
it became a Lender, as applicable, nothing in this Section 2.20(c) shall
relieve Company of its obligation to pay any additional amounts pursuant to
this Section 2.20 (to the extent the Company is otherwise required to pay
additional amounts pursuant to this Section 2.20) in the event that, as a
result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the
fact that such Lender is not subject to withholding as described herein.

 

(d)           Subject to the provisos in Section 2.20(b), the
Company shall indemnify the Administrative Agent and each Lender (each, a “Tax Indemnified Party”) within thirty (30) days after
written demand therefor, for the full amount of any Taxes or Other Taxes paid
by such Tax Indemnified Party (other than any Tax imposed on the net income of
such Tax Indemnified Party), with respect to this Agreement or any of the other
Credit Documents or any of its obligations hereunder or thereunder (including
such Taxes imposed or asserted on or attributable to amounts payable under this
Section 2.20), and any penalties, interest or reasonable expenses arising
therefrom. Notwithstanding the foregoing, the Company shall not be obligated to
make payment to a Tax Indemnified Party with respect to penalties, interest and
expenses if (i) such amounts arose as a result of the Tax Indemnified
Party’s failure to timely pay such Taxes; (ii)  written demand therefor
was not made within 180 days from the date on which such Tax Indemnified Party
received written notice of the imposition of such Taxes, (iii)  such
amounts arose or accrued after the Company’s satisfaction of its
indemnification obligations under this Section 2.20(d); or such amounts
are attributable to the Tax Indemnified Party’s gross negligence or willful
misconduct. A certificate containing reasonable detail as to the amount of such
payment or liability delivered to the Company by a Tax Indemnified Party shall
be conclusive absent manifest error. After a Tax Indemnified Party receives
written notice of the imposition of Taxes subject to this Section 2.20(d),
such Tax Indemnified Party will act in good faith to promptly notify the
Company of its obligations hereunder.

 

(e)           If the Administrative Agent or a Lender determines, in
its sole discretion, that is has received a refund of or credit against any
Taxes or Other Taxes as to which it has been indemnified by the Company or any
Credit Party with respect to which the Company or Credit Party has paid
additional amounts pursuant to this Section 2.20, it shall pay over such
refund or credit to Company (but only to the extent of amounts paid by Company
under this Section 2.20), net of all out-of-pocket expenses of the
Administrative Agent or such Lender without interest (other than any interest
paid by the relevant taxing authority with respect to such refund or credit); provided,
however, that Company, upon the request of the Administrative Agent or
such Lender, agrees to repay the amount paid over to Company to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such taxing authority or such
credit is subsequently denied. Nothing in this Section 2.20 shall be
construed to require the Agent or any Lender to make available its tax returns
(or any other information that it deems confidential) to Company or any other
Person.

 

41

 

2.21.       Obligation to Mitigate. Each
Lender agrees that, as promptly as practicable after the officer of such Lender
responsible for administering its Loans becomes aware of the occurrence of an
event or the existence of a condition that would cause such Lender to become an
Affected Lender or that would entitle such Lender to receive payments under Section 2.18,
2.19 or 2.20, it will, to the extent not inconsistent with the internal
policies of such Lender and any applicable legal or regulatory restrictions, use
reasonable efforts to (a) make, issue, fund or maintain its Credit
Extensions, including any Affected Loans, through another office of such
Lender, or (b) take such other measures as such Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender pursuant to Section 2.18,
2.19 or 2.20 would be materially reduced and if, as determined by such Lender
in its sole discretion, the making, funding or maintaining of the Loans through
such other office or in accordance with such other measures, as the case may
be, would not otherwise adversely affect the Loans, or the interests of such
Lender; provided, such Lender will not be obligated to utilize such
other office pursuant to this Section 2.21 unless Company agrees to pay
all incremental expenses incurred by such Lender as a result of utilizing such
other office as described in clause (a) above. A certificate as to the
amount of any such expenses payable by Company pursuant to this Section 2.21
(setting forth in reasonable detail the basis for requesting such amount)
submitted by such Lender to Company (with a copy to Administrative Agent) shall
be conclusive absent manifest error.

 

2.22.       Defaulting Lenders. Anything
contained herein to the contrary notwithstanding, in the event that any Lender
defaults (a “Defaulting Lender”) in its
obligation to fund (a “Funding Default”)
any Loan (a “Defaulted Loan”), then (a) during
any Default Period with respect to such Defaulting Lender, such Defaulting
Lender shall be deemed not to be a “Lender” for purposes of voting on any
matters (including the granting of any consents or waivers) with respect to any
of the Credit Documents; (b) to the extent permitted by applicable law,
until such time as the Default Excess with respect to such Defaulting Lender
shall have been reduced to zero, (i) any voluntary prepayment of the Loans
shall, if Company so directs at the time of making such voluntary prepayment,
be applied to the Loans of other Lenders as if such Defaulting Lender had no
Loans outstanding and the Loan Exposure of such Defaulting Lender were zero,
and (ii)  any mandatory prepayment of the Loans shall, if Company so
directs at the time of making such mandatory prepayment, be applied to the
Loans of other Lenders (but not to the Loans of such Defaulting Lender) as if
such Defaulting Lender had funded all Defaulted Loans of such Defaulting
Lender, it being understood and agreed that Company shall be entitled to retain
any portion of any mandatory prepayment of the Loans that is not paid to such
Defaulting Lender solely as a result of the operation of the provisions of this
clause (b); and (c) the Loan Exposure as at any date of determination
shall be calculated as if such Defaulting Lender had funded all Defaulted Loans
of such Defaulting Lender. No Commitment of any Lender shall be increased or
otherwise affected, and, except as otherwise expressly provided in this Section 2.22,
performance by Company of its obligations hereunder and the other Credit
Documents shall not be excused or otherwise modified as a result of any Funding
Default or the operation of this Section 2.22. The rights and remedies
against a Defaulting Lender under this Section 2.22 are in addition to
other rights and remedies which Company may have against such Defaulting Lender
with respect to any Funding Default and which Administrative Agent or any
Lender may have against such Defaulting Lender with respect to any Funding
Default.

 

2.23.       Removal or Replacement of a
Lender. Anything contained herein to the contrary notwithstanding, in the
event that: (a) (i) any Lender (an “Increased-Cost
Lender”) shall give notice to Company that such Lender is an
Affected Lender or that such Lender is entitled to receive payments under Section 2.18,
2.19 or 2.20, (ii)  the circumstances which have caused such Lender to be
an Affected Lender or which entitle such Lender to receive such payments shall
remain in effect, and (iii)  such Lender shall fail to withdraw such
notice within five Business Days after Company’s request for such withdrawal;
or (b) (i) any Lender shall become a Defaulting Lender, (ii) 
the Default Period for such Defaulting Lender shall remain in effect, and (iii) 
such Defaulting Lender shall fail to cure the default as

 

42

 

a result of which it has become a Defaulting Lender within five
Business Days after Company’s request that it cure such default; or (c) in
connection with any proposed amendment, modification, termination, waiver or
consent with respect to any of the provisions hereof as contemplated by Section 10.5(b),
the consent of Requisite Lenders shall have been obtained but the consent of
one or more of such other Lenders (each a “Non-Consenting Lender”)
whose consent is required shall not have been obtained; then, with respect to
each such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender
(the “Terminated Lender”), Company may, by
giving written notice to Administrative Agent and any Terminated Lender of its
election to do so, elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Commitments, if any, in full to one or more Eligible Assignees (each a “Replacement Lender”) in accordance with the provisions of Section 10.6
and Company shall pay the fees, if any, payable thereunder in connection with
any such assignment from an Increased Cost Lender or a Non-Consenting Lender
and the Defaulting Lender shall pay the fees, if any, payable thereunder in
connection with any such assignment from such Defaulting Lender; provided,
(1)  on the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, and (B) an amount equal to all accrued, but theretofore
unpaid fees owing to such Terminated Lender pursuant to Section 2.11; (2) 
on the date of such assignment, Company shall pay any amounts payable to such
Terminated Lender pursuant to Section 2.18(c), 2.19 or 2.20; or otherwise
as if it were a prepayment pursuant to Section 2.13 or 2.14, including, in
the case of any Increased-Cost Lender or any Non-Consenting Lender, prepayment
premiums pursuant to Section 2.13(d) ; and (3) in the event such
Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which
such Terminated Lender was a Non- Consenting Lender. Upon the prepayment of all
amounts owing to any Terminated Lender and the termination of such Terminated
Lender’s Commitments, if any, such Terminated Lender shall no longer constitute
a “Lender” for purposes hereof; provided, any rights of such Terminated
Lender to indemnification hereunder shall survive as to such Terminated Lender.

 

SECTION 3.        CONDITIONS
PRECEDENT

 

3.1.         Closing
Date. The obligation of any Lender to make a Credit Extension on the
Closing Date is subject to the reasonable satisfaction, or waiver in accordance
with Section 10.5, of the following conditions on or before the Closing
Date:

 

(a)           Credit Documents. Administrative Agent shall have received sufficient
copies of each Credit Document originally executed and delivered by each
applicable Credit Party for each Lender.

 

(b)           Organizational Documents; Incumbency. Administrative Agent shall have
received (i) sufficient copies of each Organizational Document executed
and delivered by each Credit Party, as applicable, and, to the extent
applicable, certified as of a recent date by the appropriate governmental
official, for each Lender, each dated the Closing Date or a recent date prior
thereto; (ii) signature and incumbency certificates of the officers of
such Person executing the Credit Documents to which it is a party; (iii) 
resolutions of the Board of Directors or similar governing body of each Credit
Party approving and authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents to which it is a party or by which it
or its assets may be bound as of the Closing Date, certified as of the Closing
Date by its secretary or an assistant secretary as being in full force and
effect without modification or amendment; (iv)  a good standing
certificate from the applicable Governmental Authority of each Credit Party’s
jurisdiction of incorporation, organization or formation and in each
jurisdiction in which it is qualified as a foreign corporation or other entity
to do business, each dated a recent date prior to the Closing Date; and (v) 
such other documents as Administrative Agent may reasonably request.

 

43

 

(c)           Organizational and Capital Structure. The organizational structure and
capital structure of Company and its Subsidiaries shall be as set forth on
Schedule 4.2.

 

(d)           Permitted Working Capital Facility Documents. Collateral Agent shall have
received the following agreements in form and substance reasonably satisfactory
to Requisite Lenders:

 

(i)            a certified copy of the Working
Capital Facility Credit Agreement and the Working Capital Facility Security
Agreement;

 

(ii)           a copy of the Working Capital
Intercreditor Agreement; and

 

(iii)          evidence satisfactory to
Administrative Agent that the borrowing availability (calculated after giving
effect to any loans to be made and letters of credit to be outstanding on the
Closing Date and without deduction for any minimum availability reserve) shall
not be less than $20,000,000.

 

(e)           Accuracy of Representations and Warranties. The representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects on and as of the Closing Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.

 

(f)            Existing Specified Indebtedness. On the Closing Date, Company and
its Subsidiaries shall have repaid in full all Existing Specified Indebtedness.
On the Closing Date, Company and its Subsidiaries shall have delivered to
Collateral Agent and Administrative Agent all documents or instruments
necessary to release all Liens, if any, securing such Existing Specified
Indebtedness.

 

(g)           Transaction Costs. On or prior to the Closing Date, Company shall have
delivered to Administrative Agent Company’s reasonable best estimate of the
Transactions Costs (other than fees payable to any Agent).

 

(h)           Governmental Authorizations and Consents. Each Credit Party shall have
obtained all Governmental Authorizations and all consents of other Persons, in
each case that are necessary or advisable in connection with the execution,
delivery and performance of the Credit Documents and each of the foregoing
shall be in full force and effect and in form and substance reasonably
satisfactory to Administrative Agent. All applicable waiting periods shall have
expired without any action being taken or threatened by any competent authority
which would restrain, prevent or otherwise impose adverse conditions on the
transactions contemplated by the Credit Documents or the financing thereof and
no action, request for stay, petition for review or rehearing, reconsideration,
or appeal with respect to any of the foregoing shall be pending, and the time
for any applicable agency to take action to set aside its consent on its own
motion shall have expired.

 

(i)            Absence of Default. As of the Closing Date, no event shall have occurred
and be continuing or would result from the consummation of the Credit Extension
on the Closing Date that would constitute an Event of Default or a Default.

 

(j)            Personal Property Collateral. In order to create in favor of
Collateral Agent, for the benefit of Secured Parties, a valid, perfected First
Priority security interest in the personal property Collateral, Collateral
Agent shall have received:

 

44

 

(i)            evidence satisfactory to Collateral
Agent of the compliance by Company of its obligations under the Pledge and
Security Agreement and the other Collateral Documents (including, without
limitation, its obligations to authorize the filing of UCC financing statements
and execute (if required) and deliver originals of securities, instruments and
chattel paper and any agreements governing deposit and/or securities accounts
as provided therein);

 

(ii)           A completed Collateral Questionnaire
dated the Closing Date and executed by an Authorized Officer of each Credit
Party, together with all attachments contemplated thereby, including (A) the
results of a recent search of all effective UCC financing statements (or
equivalent filings) made with respect to any personal or mixed property of any
Credit Party in the jurisdictions specified in the Collateral Questionnaire,
together with copies of all such filings disclosed by such search, and (B) UCC
termination statements (or similar documents) duly executed by all applicable
Persons for filing in all applicable jurisdictions as may be necessary to
terminate any effective UCC financing statements (or equivalent filings)
disclosed in such search (other than any such financing statements in respect
of Permitted Liens), as specified by the Collateral Agent or counsel to the
Administrative Agent; and

 

(iii)          evidence that each Credit Party
shall have taken or caused to be taken any other action, executed and delivered
or caused to be executed and delivered any other agreement, document and
instrument (including without limitation, any intercompany notes evidencing
Indebtedness permitted to be incurred pursuant to Section 6.1(b)) and made
or caused to be made any other filing and recording (other than as set forth
herein) reasonably required by Collateral Agent.

 

(k)           [Reserved].

 

(l)            Financial Statements; Projections. Lenders shall have received from
Company (i) the Historical Financial Statements and (ii)  the
Projections.

 

(m)          Evidence of Insurance. Collateral Agent shall have
received a certificate from Company’s insurance broker or other evidence
satisfactory to it that all insurance required to be maintained pursuant to Section 5.5
is in full force and effect and that Collateral Agent, for the benefit of
Lenders has been named as additional insured and loss payee thereunder to the
extent required under Section 5.5.

 

(n)           Opinion of Counsel to Credit Parties. Lenders and their respective counsel
shall have received originally executed copies of the favorable written opinion
of outside counsel for Credit Parties, in the form of Exhibit D-1 and D-2,
respectively, dated as of the Closing Date, addressed to Lenders and the
Agents, and otherwise in form and substance reasonably satisfactory to Lenders
and their respective counsel (and each Credit Party hereby instructs such
counsel to deliver such opinions to Agents and Lenders).

 

(o)           [Reserved].

 

(p)           Fees and Expenses. Company shall have paid to the Agents the fees and
expenses payable on or prior to the Closing Date referred to in Section 2.11.

 

(q)           Solvency Certificate. On the Closing Date,
Administrative Agent shall have received a Solvency Certificate from Company
dated the Closing Date and addressed to Administrative Agent and Lenders, and
in form, scope and substance reasonably satisfactory to Administrative Agent, 

 

45

 

with
appropriate attachments and demonstrating that Company and its Subsidiaries,
taken as a whole, are and will be Solvent.

 

(r)            Closing Date Certificate. Company shall have delivered to
Administrative Agent an originally executed Closing Date Certificate, together
with all attachments thereto.

 

(s)           Letter of Direction. Administrative Agent shall have
received a duly executed letter of direction from Company addressed to
Administrative Agent, on behalf of itself and Lenders, directing the
disbursement on the Closing Date of the proceeds of the Loans made on such date.

 

(t)            Patriot Act. Prior to the Closing Date, the Arranger shall have
received all documentation and other information required by bank regulatory
authorities under applicable “know-your-customer” and anti-money laundering
rules and regulations, including the U.S.A. Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)).

 

(u)           No Litigation. There shall not exist any action, suit,
investigation, litigation or proceeding pending or threatened in writing in any
court or before any arbitrator or Governmental Authority that, in the
reasonable opinion of Administrative Agent, singly or in the aggregate, that
could reasonably be expected to have a Material Adverse Effect.

 

(v)           Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby shall be reasonably satisfactory in form and substance to
Administrative Agent and its counsel, and Administrative Agent, Syndication
Agent and its counsel shall have received all such counterpart originals or
certified copies of such documents as Administrative Agent may reasonably
request.

 

Each Lender,
by delivering its signature page to this Agreement and funding a Loan on the
Closing Date, shall be deemed to have consented to and approved each Credit
Document and each other document required to be approved by any Agent,
Requisite Lenders or Lenders, as applicable on the Closing Date.

 

3.2.         Conditions to Delayed
Draw Term Loans.

 

(a)           Conditions Precedent. The obligation of each Lender to
make any Delayed Draw Term Loan on any Credit Date, including the Closing Date,
is subject to the satisfaction, or waiver in accordance with Section 9.5,
of the following conditions precedent:

 

(i)            Administrative Agent shall have
received a fully executed Funding Notice;

 

(ii)           after giving effect to the Delayed
Draw Term Loans requested on such Credit Date, Company shall be in pro forma
compliance with the covenants set forth in Sections 6.8(a), (b) and (c);

 

(iii)          as of such Credit Date, the
representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects on and as of that
Credit Date to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties shall have been
true and correct in all material respects on and as of such earlier date; and

 

46

 

 

(iv)          as of such Credit Date, no event
shall have occurred and be continuing or would result from the consummation of
the applicable Credit Extension that would constitute an Event of Default or a
Default;.

 

(b)           Notices. Any Notice shall be executed by an Authorized
Officer in a writing delivered to Administrative Agent. In lieu of delivering a
Notice, Company may give Administrative Agent telephonic notice by the required
time of any proposed borrowing or conversion/continuation, as the case may be; provided
each such notice shall be promptly confirmed in writing by delivery of the
applicable Notice to Administrative Agent on or before the applicable date of
borrowing or continuation/conversion or issuance. Neither Administrative Agent
nor any Lender shall incur any liability to Company in acting upon any
telephonic notice referred to above that Administrative Agent believes in good
faith to have been given by a duly authorized officer or other person
authorized on behalf of Company or for otherwise acting in good faith.

 

SECTION 4.         REPRESENTATIONS
AND WARRANTIES

 

In order to
induce Lenders to enter into this Agreement and to make each Credit Extension
to be made thereby, each Credit Party represents and warrants to each Lender,
on the Closing Date and each Credit Date, that the following statements are
true and correct:

 

4.1.         Organization; Requisite
Power and Authority; Qualification. Each of Company and its Subsidiaries (a) is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization as identified in Schedule 4.1, (b) has all
requisite power and authority to own and operate its properties, to carry on
its business as now conducted and as proposed to be conducted, to enter into
the Credit Documents to which it is a party and to carry out the transactions
contemplated thereby, and (c) is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except in jurisdictions
where the failure to be so qualified or in good standing has not had, and could
not be reasonably expected to have, a Material Adverse Effect.

 

4.2.         Capital Stock and
Ownership. All of the issued shares of Capital Stock of Company have been
duly and validly authorized and issued, and are fully paid and non assessable;
and all of the issued shares of Capital Stock of each Subsidiary of Company
have been duly and validly authorized and issued, are fully paid and non
assessable and are owned directly or indirectly by Company, free and clear of
all Liens, other than those created by the Credit Documents in favor of the
Collateral Agent. As of the date hereof, except as set forth in Schedule 4.2,
no options, warrants or other rights to purchase, agreements or other
obligations to issue, or rights to convert any obligations into or exchange any
securities for, shares of Capital Stock of Company or any of its Subsidiaries
are outstanding. Schedule 4.2 correctly sets forth the ownership interest of
Company and each of its Subsidiaries in their respective Subsidiaries as of the
Closing Date.

 

4.3.         Due Authorization. This
Agreement has been duly authorized, executed and delivered by each Credit Party.

 

4.4.         No Conflict, Violation,
Default.

 

(a)           The execution, delivery and compliance by each Credit
Party to each Credit Document to which it is a party and the consummation of
the transactions contemplated by the Credit Documents will not (i) conflict
with or result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which Company or any of its
Subsidiaries is a party or by which Company or any of its

 

47

 

Subsidiaries
is bound or to which any of the property or assets of Company or any of its
Subsidiaries is subject, other than such conflict, breach or violation as could
not reasonably be expected to have a Material Adverse Effect, (ii)  result
in or require the creation or imposition of any Lien upon any of the properties
or assets of Company or any of its Subsidiaries (other than the Liens created
by the Credit Documents in favor of the Collateral Agent) or (iii)  result
in any violation of the provisions of the Organizational Documents of Company
or any of its Subsidiaries or any statute or any order, rule or regulation of
any Governmental Authority having jurisdiction over Company or any of its
Subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
Governmental Authority is required for the consummation by the Credit Parties
of the transactions contemplated by the Credit Documents (other than the filing
of UCC financing statements to perfect the Collateral Agent’s Liens in certain
of the Collateral); and no approval of stockholders, members or partners or any
approval or consent of any Person under any Contractual Obligation of Company
or any of its Subsidiaries is required for the consummation by the Credit
Parties of the transactions contemplated by the Credit Documents, except for
such approvals or consents which have been obtained, and the execution and
delivery by the respective parties thereto of the Working Capital Intercreditor
Agreement.

 

(b)           Neither Company nor any of its Subsidiaries is (i) in
violation of its Organizational Documents or (ii)  in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which it is a party or by which it or
any of its properties may be bound, other than, in the case of clause (ii) ,
such defaults as could not reasonably be expected to have a Material Adverse
Effect, and no condition exists which, with the giving of notice or the lapse
of time or both, could reasonably be expected to constitute such a default.

 

4.5.         Governmental Consents. The
execution, delivery and performance by Credit Parties of the Credit Documents
to which they are parties and the consummation of the transactions contemplated
by this Agreement and the Collateral Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority, except for filings and recordings with
respect to the Collateral to be made, or otherwise delivered to Collateral
Agent for filing and/or recordation, as of the Closing Date.

 

4.6.         Binding Obligation. Each
Credit Document has been duly executed and delivered by each Credit Party that
is a party thereto and is the legally valid and binding obligation of such
Credit Party, enforceable against such Credit Party in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.

 

4.7.         Historical Financial
Statements. The Historical Financial Statements present fairly in all
material respects the financial position of Company as of the dates shown
thereon and its results of operations and cash flows for the periods specified
therein, and the Historical Financial Statements have been prepared in
conformity with GAAP (subject, in the case of the financial statements for the
month ended January 31, 2007 to the absence of footnotes and changes resulting
from audit and normal year-end adjustments); except as set forth on Schedule
4.7, as of the Closing Date, none of Company or any of its Subsidiaries has any
contingent liability or liability for taxes, long-term leases or unusual
forward or long-term commitments that are not reflected in the Historical
Financial Statements and which in any such case is material in relation to the
business, operations, properties, assets, condition (financial or otherwise) of
Company and its Subsidiaries taken as a whole.

 

4.8.         Projections. On and
as of the Closing Date, the Projections of Company and its Subsidiaries for the
period Fiscal Year 2007 through and including Fiscal Year 2011 (the “Projections”)

 

48

 

are based on good faith estimates and assumptions made by the
management of Company; provided, the Projections are not to be viewed as
representations and/or warranties or guarantees of any kind and that actual
results during the period or periods covered by the Projections may differ from
such Projections and that the differences may be material; provided, further,
as of the Closing Date, senior management of Company believed that the
Projections were reasonable.

 

4.9.         No Material Adverse
Change. Since December 31, 2006, no event, circumstance or change has
occurred that has caused, either in any case or in the aggregate, a Material
Adverse Effect.

 

4.10.       Liquidity Option Agreements.
There are no liquidity option agreements in effect the terms of which would
permit the holder(s) thereof to require the Company to make any cash payment in
respect of such liquidity option agreement prior to the time at which all of
the Loans are paid in full.

 

4.11.       Adverse Proceedings, etc.
Except as set forth on Schedule 4.11: (a) there are no legal or
governmental proceedings pending to which Company or any of its Subsidiaries is
a party or of which any property of Company or any of its Subsidiaries is the
subject which, if determined adversely to Company or any of its Subsidiaries,
would individually or in the aggregate have a Material Adverse Effect; and (b) to
Company’s Knowledge, no such proceedings have been threatened or contemplated
in writing by Governmental Authorities or other Persons.

 

4.12.       Payment of Taxes. Except
as otherwise permitted under Section 5.3 and as disclosed on Schedule
4.12, all material tax returns and reports of Company and its Subsidiaries
required to be filed by any of them have been timely filed, and all material
Taxes shown on such tax returns to be due and payable and all assessments, fees
and other governmental charges upon Company and its Subsidiaries and upon their
respective properties, assets, income, businesses and franchises which are due
and payable have been paid when due and payable, other than any such Taxes,
assessments, fees and charges that are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long
as (a) adequate reserve or other appropriate provision, as shall be
required in conformity with GAAP shall have been made therefor, and (b) in
the case of a Tax, assessment, fee or charge that has or may become a Lien
against any of the Collateral, such contest proceedings conclusively operate to
stay the sale of any portion of the Collateral to satisfy such Tax, assessment,
fee or charge.

 

4.13.       Properties.

 

(a)           Title. Except for Permitted Liens and except as disclosed
on Schedule 4.13, Company and its Subsidiaries have good and marketable title
to all personal property owned by them, in each case free and clear of all
Liens except such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by
Company and its Subsidiaries; and any real property and buildings held under
lease by Company and its Subsidiaries are held by them under valid, subsisting
and enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by Company and its Subsidiaries.

 

(b)           Real Estate. As of the Closing Date, Schedule 4.13 contains a
true, accurate and complete list of (i) all Material Real Estate Assets,
and (ii)  the lease of Company’s headquarters at the address listed on
Appendix B hereto (together with all amendments, modifications, supplements,
renewals or extensions of any thereof). The lease described in clause (ii) 
of the immediately preceding sentence is in full force and effect and
constitutes the legally valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.

 

49

 

(c)           Intellectual Property. Subject to the qualifications set
forth in this Section 4.13(c) below, Company and/or its Subsidiaries
own, or are licensed or otherwise have the right to use, all patents,
inventions, trademarks, service marks, trade names, domain names, copyrights,
and registrations and applications for the foregoing, know-how, manufacturing
processes, formulae, trade secrets, rights of publicity of natural persons and
any other intangible property and assets which are material to the businesses
of Company and its Subsidiaries as now conducted and as proposed to be
conducted (collectively, the “Intellectual Property
Rights”). Except as set forth on Schedule 4.13(c), Company does not
have any Knowledge of, and neither Company nor any of its Subsidiaries has
given any notice of, any pending conflicts with or infringement of or other
violation of any Intellectual Property Rights or Regulatory Approvals by any
third party, and no action, suit, arbitration, or legal, administrative or
other proceedings, or investigation is pending, or, to the Knowledge of
Company, threatened, which involves any Intellectual Property Rights and which
could reasonably be expected to have a Material Adverse Effect. Except as set
forth on Schedule 4.13(c), neither Company nor any of its Subsidiaries is
subject to any judgment, order, writ, injunction or decree of any Governmental
Authority or any arbitrator, or has entered into or is a party to any contract,
which restricts or impairs the use of any such Intellectual Property Rights or
Company’s or any of its Subsidiaries’ use of or right to use any of the
Intellectual Property Rights and which could reasonably be expected to have a
Material Adverse Effect. To the Knowledge of Company, except as set forth on
Schedule 4.13(c), no Intellectual Property Rights licensed to or by or
otherwise used by Company or any of its Subsidiaries, no services rendered or
products manufactured by or sold by Company or any of its Subsidiaries, and no
conduct of the business of Company or any of its Subsidiaries, infringes upon
or otherwise violates any intellectual property rights of any third party. Except
as set forth on Schedule 4.13(c), neither Company nor any of its Subsidiaries
has received notice of any pending conflict with or infringement upon such
third-party intellectual property rights. Except as set forth on Schedule
4.13(c), no claims have been asserted by any Person with respect to the
validity of or Company’s or any of its Subsidiaries’ ownership of or right to
use, the Intellectual Property Rights and, to the Knowledge of Company, there
is no reasonable basis for any such claim to be successful. Except as set forth
on Schedule 4.13(c), the Intellectual Property Rights are valid and enforceable
(to the extent such Intellectual Property Rights can be enforceable) and no
registration or application relating thereto that is material to the business
of Company or its Subsidiaries has lapsed, expired or been abandoned or
cancelled or is the subject of cancellation or other adversarial proceedings,
and all applications therefore are pending and are in good standing. Company
and its Subsidiaries have complied in all material respects with their
respective contractual obligations relating to the Intellectual Property Rights
used pursuant to licenses. Company and its Subsidiaries take reasonable
security measures that are adequate to retain trade secret protection in the
non-patented technology that is material to their business.

 

4.14.       Environmental Matters. Neither
Company nor any of its Subsidiaries nor any of their respective facilities or
operations are subject to any outstanding written order, consent decree or
settlement agreement with any Person relating to any Environmental Law, any
Environmental Claim, or any Hazardous Materials Activity that could reasonably
be expected to have a Material Adverse Effect. Neither Company nor any of its
Subsidiaries has received any letter or request for information under Section 104
of the Comprehensive Environmental Response, Compensation, and Liability Act
(42 U.S.C. § 9604) or any comparable state law. To Company’s Knowledge, there
are and have been no conditions, occurrences, or Hazardous Materials Activities
which could reasonably be expected to form the basis of an Environmental Claim
against Company or any of its Subsidiaries, which if adversely determined would
reasonably be expected to have a Material Adverse Effect. Neither Company nor
any of its Subsidiaries nor any predecessor of Company or any of its
Subsidiaries has filed any notice under any Environmental Law indicating past
or present treatment of Hazardous Materials at any of their respective
facilities, and none of Company’s or any of its Subsidiaries’ operations
involves the generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260 270 or any state equivalent. Compliance
with all current or reasonably foreseeable future requirements

 

50

 

pursuant to or under Environmental Laws could not be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect. No
event or condition has occurred or is occurring with respect to Company or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity that could reasonably be
expected to have a Material Adverse Effect. To Company’s Knowledge, no event or
condition has occurred with respect to any manufacturer of a material product
of Company or its Subsidiaries relating to any Environmental Law, and release
of Hazardous Materials or any Hazardous Materials Activity that could
reasonably be expected to have a Material Adverse Effect.

 

4.15.       No Defaults. Neither
Company nor any of its Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no condition exists which,
with the giving of notice or the lapse of time or both, could reasonably be
expected to constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, singularly or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.

 

4.16.       Material Contracts. Schedule
4.16 contains a true, correct and complete list of all the Material Contracts
in effect on the Closing Date, and except as described thereon, all such
Material Contacts are in full force and effect and to the Knowledge of Company,
no defaults by the counterparties to such Material Contracts currently exist
thereunder, other than any such defaults or failure to be in force and effect
which could not reasonably be expected to have a Material Adverse Effect.

 

4.17.       Governmental Regulation.

 

(a)           Neither Company nor any of its Subsidiaries is subject
to regulation under the Investment Company Act of 1940, as amended (the “Investment Company Act”); and neither Company nor any of its
Subsidiaries is, and after receipt of the Loans or the use of the Loan proceeds,
will be, an “investment company” as such term is defined in the Investment
Company Act.

 

(b)           Except as disclosed in Schedule 4.17(b)(i), Company
and each of its Subsidiaries is in compliance with all applicable laws,
statutes, ordinances, rules and regulations and has filed all applications and
has obtained all licenses, permits and approvals or other regulatory
authorizations of the Federal Food and Drug Administration (the “FDA”) and any other Governmental Authorities with regulatory
authority over the activities of Company and its Subsidiaries (including,
without limitation, all FDA approvals necessary for manufacturing or marketing
the products Company and each of its Subsidiaries currently manufacture or
market) (“Regulatory Approvals”), other than
where the failure to so be in compliance could reasonably be expected to have a
Material Adverse Effect.

 

(c)           The FDA has not commenced, or, to Company’s Knowledge,
threatened to initiate, any action to withdraw its approval of any product of
Company or its Subsidiaries or commenced or, to Company’s Knowledge, threatened
in writing to initiate any action to withdraw its approval of any facility of
Company or its Subsidiaries.

 

(d)           To Company’s Knowledge, the human clinical trials
conducted by or on behalf of Company or its Subsidiaries, or in which Company
or its Subsidiaries have participated, or the results thereof, were and, if
still pending, are being, conducted in accordance with applicable regulatory
requirements; Company has no Knowledge of any other studies or tests, the
results of which discredit the results of such human clinical trials; neither
Company nor its Subsidiaries have received any notice or correspondence from
the FDA or any other Governmental Authority requiring the termination or suspension
of any human clinical trials conducted by, or on behalf of, Company or its
Subsidiaries or in which Company or its Subsidiaries have participated, or any
modification of any clinical trials conducted

 

51

 

by,
or on behalf of, Company or its Subsidiaries or in which Company or its
Subsidiaries have participated.

 

4.18.       Margin Stock. Neither
Company nor any of its Subsidiaries is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. No part of the proceeds of the Loans
made to such Credit Party will be used to purchase or carry any Margin Stock or
to extend credit to others for the purpose of purchasing or carrying any Margin
Stock or for any purpose that violates, or is inconsistent with, the provisions
of Regulation T, U or X of the Board of Governors of the Federal Reserve System.

 

4.19.       Employee Matters. (a) Neither
Company nor any of its Subsidiaries is engaged in any unfair labor practice,
which could reasonably be expected to have a Material Adverse Effect and (b) there
is (i) no unfair labor practice complaint pending against Company or any
of its Subsidiaries, or to the Knowledge of Company, threatened against any of
them, before the National Labor Relations Board and no grievance or arbitration
proceeding arising out of or under any collective bargaining agreement that is
so pending against Company or any of its Subsidiaries, or to the Knowledge of
Company, threatened against any of them, (ii)  no strike or work stoppage
in existence or threatened involving Company or any of its Subsidiaries and (iii) 
to the Knowledge of Company, no union representation question existing with
respect to the employees of Company or any of its Subsidiaries and, to the
Knowledge of Company, no union organization activity that is taking place.

 

4.20.       Employee Benefit Plans. Company,
each of its Subsidiaries and each of their respective ERISA Affiliates are in
material compliance with all applicable provisions and requirements of ERISA
and the Internal Revenue Code with respect to each Employee Benefit Plan and
have performed all their obligations under each Employee Benefit Plan. Other
than in the ordinary course, no liability to the PBGC, the Internal Revenue
Service, any Employee Benefit Plan or any trust established under Title IV of
ERISA has been or is expected to be incurred by Company, any of its
Subsidiaries or any of their ERISA Affiliates. No ERISA Event has occurred or
is reasonably expected to occur. The present value of the aggregate benefit
liabilities under each Pension Plan sponsored, maintained or contributed to by
Company, any of its Subsidiaries or any of their ERISA Affiliates (determined
as of the end of the most recent plan year on the basis of the actuarial
assumptions specified for funding purposes in the most recent actuarial
valuation for such Pension Plan), did not exceed the aggregate current value of
the assets of such Pension Plan. None of Company, any of its Subsidiaries, or
any of their ERISA Affiliates has any Multiemployer Plan.

 

4.21.       Certain Fees. No broker’s
or finder’s fee or commission will be payable with respect hereto or any of the
transactions contemplated hereby, except for any such fees or commissions
payable to any Agent or Lender.

 

4.22.       Solvency. As of the
Closing Date, each Credit Party is and, upon the incurrence of any Obligation
by such Credit Party on the Closing Date, will be, Solvent.

 

4.23.       [RESERVED].

 

4.24.       Permits, Compliance with
Statutes, etc.   Except as disclosed
on Schedule 4.24:

 

(a)           Each of Company and its Subsidiaries is in compliance
with all applicable statutes, rules, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities, in respect of
the conduct of its business and the ownership of its property (including
compliance with all applicable Environmental Laws with respect to any Real
Estate Asset or governing its business and the requirements of any permits
issued under such Environmental Laws with respect to any

 

52

 

such
Real Estate Asset or the operations of Company or any of its Subsidiaries),
except in each of the foregoing cases, for such non compliance that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.

 

(b)           Company and its Subsidiaries possess all material
certificates, authorities or permits (including all certificates, authorities
and permits pursuant to Environmental Laws) issued by appropriate Governmental
Authorities necessary to conduct the business now operated by them and have not
received any notice of proceedings relating to the revocation or modification
of any such certificate, authority or permit.

 

4.25.       Disclosure. No
representation or warranty of any Credit Party contained in any Credit Document
or in any other document or certificate delivered to an Agent or the Lenders by
or on behalf of Company or any of its Subsidiaries or Unrestricted Subsidiaries
pursuant to such Credit Document contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections contained in such
materials are based upon good faith estimates and assumptions believed by
senior management of Company to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as representations, warranties or guarantees and that actual results
during the period or periods covered by any such projections may differ from
the projected results and that the differences may be material.

 

4.26.       New Drug Applications. To
Company’s Knowledge, except as set forth in Schedule 4.26, there exist no
pending abbreviated new drug applications or other applications filed by third
parties with respect to any of the Products for which there is no generic
equivalent product on the market, whereby any such third party could reasonably
be expected to obtain approval to make, have made, use, sell, offer for sale,
import, distribute, commercialize and otherwise dispose of any of the Products
in the Territory on or prior to the Closing Date.

 

4.27.       Quality of Inventory. To
the Knowledge of Company, all inventory of any Product in possession or control
of Company or any of its Subsidiaries (a) is not adulterated or misbranded
(within the meaning of the Food and Drug Act or the rules and regulations of
the FDA promulgated thereunder); and (b) is manufactured, labeled and
packaged in accordance with cGMPs and with all other applicable laws. Company
has taken reasonable precautions to ensure that all inventory of any Product in
possession or control of Company or any of its Subsidiaries (a) is not
adulterated or misbranded (within the meaning of the Food and Drug Act or the
rules and regulations of the FDA promulgated thereunder) and (b) is
manufactured, labeled and packaged in accordance with cGMPs and with all other
applicable laws.

 

4.28.       Non-disclosure and
Confidentiality Policies. Company has adopted and will use measures it
deems reasonably necessary and/or desirable to enforce non-disclosure and
confidentiality policies and has obtained agreements from employees,
consultants and other third parties that it deems reasonably necessary or
desirable to protect its Intellectual Property Rights.

 

4.29.       Disclosure of Regulatory
Approvals. A complete and correct list of all material Regulatory Approvals
and all material patents and patent applications owned or licensed by Company
or any of its Subsidiaries that cover the manufacture, marketing, use, sale,
offer for sale, importation, distribution, commercialization and other
disposition of the Products anywhere in the Territory is described in Schedule
4.29.

 

4.30.       Patriot Act. To the
extent applicable, each Credit Party is in compliance, in all material
respects, with the (i) Trading with the Enemy Act, as amended, and each of
the foreign assets control regulations of the Untied States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) and

 

53

 

any other enabling legislation or executive order relating thereto, and
(ii)  Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001) (the “Act”). No part of the proceeds of the Loans will be used,
directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.

 

SECTION 5.         AFFIRMATIVE
COVENANTS

 

Each Credit
Party covenants and agrees that so long as any Commitment is in effect and
until payment in full of all Obligations, each Credit Party shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this Section 5.

 

5.1.         Financial Statements and
Other Reports. Company will deliver to Administrative Agent for
distribution to each Lender:

 

(a)           Monthly Reports. As soon as available, and in any event within thirty
(30) days after the end of each month ending after the Closing Date (except any
such month as is the last month of a Fiscal Quarter), the consolidated balance
sheets of Company and its Subsidiaries as at the end of such month and the
previous Fiscal Year end and the related consolidated statements of operations
and cash flows of Company and its Subsidiaries for such month and for the
period from the beginning of the then current Fiscal Year to the end of such
month, setting forth in each case in comparative form the corresponding figures
for the corresponding periods of the previous Fiscal Year and a statement of
stockholders’ equity from the prior Fiscal Year end to the end of such month,
and with respect to the consolidated statement of operations, corresponding
figures from the Financial Plan for the current Fiscal Year, as modified from
time to time by management and approved by the Board of Directors of Company,
for such month and for the period from the beginning of the then current Fiscal
Year to the end of such month;

 

(b)           Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters of each Fiscal Year, the consolidated balance sheets of Company
and its Subsidiaries as at the end of such Fiscal Quarter and the previous
Fiscal Year end and the related consolidated statements of operations and cash
flows of Company and its Subsidiaries for such Fiscal Quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and a statement of stockholders’ equity from the prior Fiscal Year end to the
end of such month and, with respect to the consolidated statements of
operations, the corresponding figures from the Financial Plan for the current
Fiscal Quarter and from the prior Fiscal Year end to the end of such Fiscal Quarter,
as modified from time to time by management and approved by the Board of
Directors of Company, all in reasonable detail, together with a Financial
Officer Certification with respect thereto;

 

(c)           Annual Financial Statements. As soon as available, and (i) in
any event within 45 days after the Closing Date, the audited financial
statements of Company for the Fiscal Year ended December 31, 2006; (ii) 
in any event within ninety (90) days after the end of each Fiscal Year (other
than the Fiscal Year ended December 31, 2006), the consolidated and
consolidating balance sheets of Company and its Subsidiaries as at the end of
such Fiscal Year and the related consolidated (and with respect to statements
of operations, consolidating) statements of operations, stockholders’ equity
and cash flows of Company and its Subsidiaries for such Fiscal Year, setting
forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and, with respect to the consolidated

 

54

 

statement
of operations, the corresponding figures from the Financial Plan for the Fiscal
Year covered by such financial statements, as modified from time to time by
management and approved by the Board of Directors of Company, in reasonable
detail, together with a Financial Officer Certification and a Narrative Report
with respect thereto; provided, however, that until Company has
an operating Subsidiary, Company shall not be obligated to prepare
consolidating financial statements and (iii)  in any event within ninety
(90) days after the end of each Fiscal Year, with respect to such consolidated
financial statements (such statements to exclude the corresponding figures from
the Financial Plan), a report thereon of Ernst & Young, LLP or other
independent certified public accountants of recognized national standing
selected by Company, and reasonably satisfactory to Administrative Agent (which
report shall be unqualified as to going concern and scope of audit, and shall
state that such consolidated financial statements fairly present, in all
material respects, the consolidated financial position of Company and its
Subsidiaries as at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards), together with a written statement by such independent certified
public accountants stating that in connection with their audit, nothing came to
their attention that caused them to believe that Company failed to comply with
the terms, covenants, provisions or conditions of Sections 6.8(a), (b) or (c) of
this Agreement insofar as they relate to accounting matters. Their report will
indicate that their audit was not directed primarily towards obtaining
knowledge of such noncompliance;

 

(d)           Compliance Certificate. Together with each delivery of
financial statements of Company and its Subsidiaries pursuant to Sections 5.1(b) and
5.1(c), a duly executed and completed Compliance Certificate;

 

(e)           [RESERVED]

 

(f)            Notice of Default. Promptly upon any Responsible Officer of Company
obtaining knowledge (i) of any condition or event that constitutes a
Default or an Event of Default or that notice has been given to Company with
respect thereto; (ii)  that any Person has given any written notice to
Company or any of its Subsidiaries or taken any other action with respect to
any event or condition set forth in Section 8.1(b); or (iii)  of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, a certificate of an
Authorized Officer specifying the nature and period of existence of such
condition, event or change, or specifying the notice given and action taken by
any such Person and the nature of such claimed Event of Default, Default,
default, event or condition, and what action Company has taken, is taking and
proposes to take with respect thereto; provided, however, that
Company shall not be obligated under the foregoing provision to furnish any
information to the extent that furnishing such information would result in its
waiver of a privilege;

 

(g)           Notice of Litigation. Promptly upon any Responsible
Officer of Company obtaining knowledge of (i) the institution of, or non
frivolous written threat, as determined by Company in its reasonable business
judgment, of, any Adverse Proceeding not previously disclosed in writing by
Company to Lenders, or (ii)  any material development in any Adverse
Proceeding that, in the case of  either (i) or
(ii)  if adversely determined, could be reasonably expected to have a
Material Adverse Effect, or seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby, written notice thereof together with such
other information as may be reasonably available to Company to enable Lenders and
their counsel to evaluate such matters; provided, however, that
Company shall not be obligated under the foregoing provision to furnish any
information to the extent that furnishing such information would result in its
waiver of a privilege;

 

55

 

(h)           ERISA. (1)  Promptly upon becoming aware of the
occurrence of or forthcoming occurrence of any ERISA Event, a written notice
specifying the nature thereof, what action Company, any of its Subsidiaries or
any of their respective ERISA Affiliates has taken, is taking or proposes to
take with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto; and (2)  with reasonable promptness, copies of (x)  each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series)
filed by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan,
and (y)  copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;

 

(i)            Financial Plan. (1)  As soon as practicable and in any event no
later than thirty (30) days after the beginning of each Fiscal Year, a
consolidated budget and/or financial forecast with respect to the statement of
operations for such Fiscal Year (a “Financial Plan”),
including a Financial Plan of Company and its Subsidiaries for such Fiscal Year
containing monthly plans of the then-upcoming Fiscal Year and quarterly plans
thereafter for the next three Fiscal Years (but no later than 2012), together
with a pro forma Compliance Certificate for each such Fiscal Year and an
explanation of the assumptions on which such forecasts are based; and (2) 
reasonably promptly after each modification of the Financial Plan by management
and approval thereof by the Board of Directors, a copy of such modification;

 

(j)            Insurance Report. As soon as practicable and in any event within 90
days following the end of each Fiscal Year, a certificate from Company’s
insurance broker(s) in form and substance satisfactory to Administrative Agent
outlining all material insurance coverage maintained by Company as of the date
of such certificate;

 

(k)           Notice of Submissions to Governmental Authorities. Promptly after submission of any
material documents to any Governmental Authority in connection with any
investigation of any Credit Party other than routine inquiries by such
Governmental Authority, to the fullest extent permitted by applicable law,
notice, in reasonable detail, of the furnishing of such documents and
information to such Governmental Authority; following the receipt of such
notice, the Administrative Agent on reasonable notice to the Credit Party shall
have the right to review copies of such documents and information during the
business hours of the Credit Party at Company’s executive offices; provided,
however, that the Credit Party shall not be obligated to furnish such
notice or make such documents available for review, as the case may be, to the
extent that doing so would invalidate any privileged status granted by such
Governmental Authority with respect to the information contained in such notice
or in such documents and information, respectively, in which case, the Credit
Party shall furnish a notice, or a summary of the documents or information so provided,
respectively, that does not invalidate such privilege;

 

(l)            Notice Regarding Material Contracts. Promptly, and in any event within
ten Business Days (i) after any Material Contract of Company or any of its
Subsidiaries is terminated or amended in a manner that is materially adverse to
Company or such Subsidiary, as the case may be, or (ii) any new Material
Contract is entered into, a written statement describing such event, with
copies of such material amendments or new contracts, delivered to
Administrative Agent (to the extent such delivery is permitted by the terms of
the applicable Material Contract, provided, no such prohibition on
delivery shall be effective if it were bargained for by Company or its
applicable Subsidiary with the intent of avoiding compliance with this Section 5.1(l)),
and an explanation of any actions being taken with respect thereto;

 

(m)          FDA Violation Notices. Promptly, and in any event within
5 Business Days after any Credit Party has Knowledge of any material violation,
claim, complaint, charge or receipt of any

 

56

 

material
violation, claim, complaint or charge of or under the Food and Drug Act or any
material applicable statutes, rules, regulations, guidelines, policies orders
or directives administered or issued by the FDA, including without limitation
receipt by any Credit Party or any of its Subsidiaries of any Product Recall
Notice, other FDA notice satisfying the foregoing materiality standard or
amendment to such a previous Product Recall Notice or FDA notice that is
required to be disclosed under this Section 5.1(m), a statement of an
Authorized Officer setting forth the material details of such occurrence and
the actions, if any, which such Credit Party proposes to take with respect
thereto and in the case of a written document evidencing such event, together
with a true, correct and complete copy of such Product Recall Notice, FDA
Notice or amendment or other notice, as the case may be (other than to the
extent that provision of such documents or information to the Agents and the
Lenders would invalidate any privileged status granted by such Governmental
Authority with respect to such documents or information, in which case, the
Credit Parties shall furnish a summary of the documents or information so
provided that does not invalidate such privilege);

 

(n)           Information Regarding Collateral. (a) Company will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit
Party’s corporate name, (ii)  in any Credit Party’s identity or corporate
structure, (iii)  in any Credit Party’s jurisdiction of organization or (iv) 
in any Credit Party’s Federal Taxpayer Identification Number or state
organizational identification number. Company agrees not to effect or permit
any change referred to in the preceding sentence unless all filings have been
made under the UCC or otherwise that are required in order for Collateral Agent
to continue at all times following such change to have a valid, legal and
perfected First Priority Lien in all the Collateral (except the Working Capital
Collateral, in which Collateral Agent will have a valid, legal and perfected
second lien) and for the Collateral Agent at all times following such change to
have a valid, legal and perfected First Priority Lien (except the Working
Capital Collateral, in which Collateral Agent will have a valid, legal and
perfected second lien) as contemplated in the Collateral Documents. Company
also agrees promptly to notify Collateral Agent if any material portion of the
Collateral is damaged or destroyed;

 

(o)           Annual Collateral Verification. At the time of delivery of the
annual financial statements with respect to the preceding Fiscal Year pursuant
to Section 5.1(c), Company shall deliver to Collateral Agent an Officer’s
Certificate (i) confirming that there has been no change in such
information since the date of the Collateral Questionnaire delivered on the
Closing Date or identifying such changes should any exist, and (ii) 
certifying that all UCC financing statements (including fixtures filings, as
applicable) and all supplemental intellectual property security agreements or
other appropriate filings, recordings or registrations, have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above (or in such
Collateral Questionnaire) to the extent necessary to effect, protect and
perfect the security interests under the Collateral Documents for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period);

 

(p)           Other Information. (A) Promptly upon their becoming publicly available,
copies of (i) all financial statements, financial reports, notices and
proxy statements sent or made available generally by Company to its security
holders acting in such capacity or by any Subsidiary of Company to its security
holders other than Company or another Subsidiary of Company, (ii)  all
regular and periodic financial reports, reports filed under the Exchange Act
and all registration statements and prospectuses, if any, filed by Company or
any of its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission, and (iii)  all press releases and other statements
made available generally by Company or any of its Subsidiaries to the public
concerning material developments in the business of Company or any of its
Subsidiaries, and (B) such other information and data with respect to Company
or any of its Subsidiaries as from time to time may be reasonably requested by
Administrative Agent or any Lender; and

 

57

 

(q)           Concurrently with the delivery of any document or
notice required to be delivered pursuant to this Section 5.1, Company
shall indicate in writing whether such document or notice contains Nonpublic
Information. Company and each Lender acknowledge that certain of the Lenders
may be “public-side” Lenders (Lenders that do not wish to receive material non-public
information with respect to Company, its Subsidiaries or their securities) and,
if documents or notices required to be delivered pursuant to this Section 5.1
or otherwise are being distributed through IntraLinks/IntraAgency, SyndTrak or
another relevant website or other information platform (the “Platform”), any document or notice that Company has
indicated contains Nonpublic Information shall not be posted on that portion of
the Platform designated for such public-side Lenders. If Company has not
indicated whether a document or notice delivered pursuant to this Section 5.1
contains Nonpublic Information, Administrative Agent reserves the right to post
such document or notice solely on that portion of the Platform designated for
Lenders who wish to receive material nonpublic information with respect to Company,
its Subsidiaries and their securities.

 

5.2.         Existence. Except as
otherwise permitted under Section 6.9, each Credit Party will, and will
cause each of its Subsidiaries to, at all times preserve and keep in full force
and effect its existence and all rights and franchises, licenses and permits
material to its business; provided, no Credit Party (other than Company
with respect to existence) or any of its Subsidiaries shall be required to
preserve any such right or franchise, licenses or permits if such Person’s
board of directors (or similar governing body) shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
such Person, and that the loss thereof is not disadvantageous in any material
respect to such Person or to Lenders.

 

5.3.         Payment of Taxes and
Claims. Each Credit Party will, and will cause each of its Subsidiaries to,
pay all material Taxes imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty or
fine accrues thereon, and all claims (including claims for labor, services,
materials and supplies) for sums that have become due and payable and that by
law have or may become a Lien upon any of its properties or assets, prior to
the time when any penalty or fine shall be incurred with respect thereto; provided,
no such Tax or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long
as (a) adequate reserve or other appropriate provision, as shall be
required in conformity with GAAP shall have been made therefor, and (b) in
the case of a Tax or claim which has or may become a Lien against any of the
Collateral, such contest proceedings conclusively operate to stay the sale of
any portion of the Collateral to satisfy such Tax or claim. No Credit Party
will, nor will it permit any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person (other than Company
or any of its Subsidiaries).

 

5.4.         Maintenance of Properties.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition,
ordinary wear and tear excepted, all material properties used or useful in the
business of Company and its Subsidiaries and from time to time will make or
cause to be made all commercially reasonable repairs, renewals and replacements
thereof.

 

5.5.         Insurance. Company
will maintain or cause to be maintained, with financially sound and reputable
insurers, such public liability insurance, third party property damage
insurance and casualty insurance with respect to liabilities, losses or damage
in respect of the assets, properties and businesses of Company and its
Subsidiaries as may customarily be carried or maintained under similar
circumstances by Persons of established reputation engaged in similar
businesses, in each case in such amounts (giving effect to self insurance),
with such deductibles, covering such risks and otherwise on such terms and
conditions as shall be customary for such Persons. Without limiting the
generality of the foregoing, Company will maintain or cause to be maintained
replacement value casualty insurance on the Collateral

 

58

 

under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all
times carried or maintained under similar circumstances by Persons of
established reputation engaged in similar businesses. Each such policy of
insurance (other than directors and officers insurance policies) shall (i) name
Administrative Agent, on behalf of Lenders as an additional insured thereunder
as its interests may appear, (ii)  in the case of each casualty insurance
policy for which claim payments are payable to Company or its Subsidiaries,
contain a loss payable clause or endorsement, satisfactory in form and
substance to Administrative Agent, that names Administrative Agent, on behalf
of Lenders as the loss payee thereunder, and (iii)  in the case of all
insurance policies (other than directors and officers insurance), provide for
at least thirty days’ prior written notice to Administrative Agent of any
modification or cancellation of such policy. Notwithstanding clause (ii) 
of the preceding sentence, under any insurance policy in which Company or its
Subsidiaries are the loss payees, Company shall have the right to reinvest
insurance proceeds therefrom to the extent provided in Section 2.14(b).

 

5.6.         Books and Records;
Inspections. Each Credit Party will, and will cause each of its
Subsidiaries to, keep proper books of record and accounts in which full, true
and correct entries in conformity in all material respects with GAAP shall be
made of all dealings and transactions in relation to its business and
activities. Each Credit Party will, and will cause each of its Subsidiaries to,
permit any authorized representatives designated by any Lender to visit and
inspect any of the properties of any Credit Party and any of its respective
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their Responsible Officers, all upon reasonable notice
and at such reasonable times during normal business hours and as often as may
reasonably be requested, provided, however, that unless an Event
of Default shall have occurred and be continuing, the Lenders shall conduct
such inspections so as to avoid undue interference with the operations of
Company and its Subsidiaries. Upon request of any Lender, Company shall make
reasonable efforts to cause their independent public accountants to be
available for such discussion.

 

5.7.         Lenders Meetings. Company
will, upon the reasonable advance request of Administrative Agent or Requisite
Lenders, participate in a meeting of Administrative Agent and Lenders once
during each Fiscal Year (to be held at such location as may be agreed to by
Company and Administrative Agent) at such time as may be agreed to by Company
and Administrative Agent.

 

5.8.         Compliance with Laws. Each
Credit Party will comply, and shall cause each of its Subsidiaries and all
other Persons, if any, on or occupying any Facilities to comply, with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority (including all Environmental Laws, FDA Regulations and
HHS Regulations), noncompliance with which could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.

 

5.9.         Environmental.

 

(a)           Environmental Disclosure. Company will deliver to
Administrative Agent and Lenders:

 

(i)            as soon as practicable, copies of
all environmental audits, investigations, analyses and reports of any kind or
character that are in the control of or are reasonably available to Company,
whether prepared by personnel of Company or any of its Subsidiaries or by
independent consultants, Governmental Authorities or any other Persons, with
respect to significant environmental matters at any Facility or with respect to
any Environmental Claims that, in any such case, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect;

 

59

 

(ii)           promptly upon the occurrence
thereof, written notice describing in reasonable detail (1)  any Release
required to be reported to any federal, state or local Governmental Authority
under any applicable Environmental Laws that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, and (2) 
any remedial action taken by Company or any other Person in response to (A) any
Hazardous Materials Activities the existence of which has a reasonable
possibility of resulting in one or more Environmental Claims that, individually
or in the aggregate, could reasonably be expected to have a Material Adverse
Effect, or (B) any Environmental Claims that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect;

 

(iii)          as soon as practicable following the
sending or receipt thereof by Company or any of its Subsidiaries, a copy of any
and all written communications (provided, however, that Company shall
not be obligated under the foregoing provision to furnish any information that
would result in its waiver of a privilege), with respect to (1)  any
Environmental Claims that, individually or in the aggregate, have a reasonable
possibility of giving rise to a Material Adverse Effect, (2)  any Release
required to be reported to any federal, state or local Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, and (3) any request for information from any
Governmental Authority that suggests such agency is investigating whether
Company or any of its Subsidiaries may be potentially responsible for any
Hazardous Materials Activity that could reasonably be expected to have a
Material Adverse Effect;

 

(iv)          prompt written notice describing in
reasonable detail (1)  any proposed acquisition of stock, assets, or
property by Company or any of its Subsidiaries that could reasonably be
expected to (A) expose Company or any of its Subsidiaries to, or result in,
Environmental Claims that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect or (B) affect the ability of
Company or any of its Subsidiaries to maintain in full force and effect all
material Governmental Authorizations required under any Environmental Laws for
their respective operations, the absence of which could be reasonably expected
to have a Material Adverse Effect and (2)  any proposed action to be taken
by Company or any of its Subsidiaries to modify current operations in a manner
that could reasonably be expected to subject Company or any of its Subsidiaries
to any additional material obligations or requirements under any Environmental
Laws and which could reasonably be expected to have a Material Adverse Effect;
and

 

(v)           with reasonable promptness, such
other documents and information as from time to time may be reasonably
requested by Administrative Agent in relation to any matters disclosed pursuant
to this Section 5.9(a); provided, however, that Company
shall not be obligated under the foregoing provision to furnish any information
to the extent that furnishing such information would result in its waiver of a
privilege.

 

(b)           Hazardous Materials Activities, Etc. Each Credit Party shall promptly
take, and shall cause each of its Subsidiaries promptly to take, any and all
commercially reasonable actions necessary to (i) avoid engaging in any
Hazardous Materials Activities that would constitute a violation of applicable
Environmental Laws that could reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect, (ii)  cure any violation of
applicable Environmental Laws by such Credit Party or its Subsidiaries that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, and (iii)  make an appropriate response to any
Environmental Claim against such Credit Party or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder where failure to
do so could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.

 

60

 

5.10.       Subsidiaries. In the
event that any Person becomes a direct or indirect Domestic Subsidiary of Company
(with any Subsidiary Redesignation resulting in an Unrestricted Subsidiary
becoming a Subsidiary being deemed to constitute the acquisition of a
Subsidiary), Company shall (a) concurrently with such Person becoming a
Domestic Subsidiary cause such Domestic Subsidiary to become a Guarantor
Subsidiary hereunder and a Grantor under the Pledge and Security Agreement by
executing and delivering to Administrative Agent and Collateral Agent a
Counterpart Agreement, and (b) take all such actions and execute and
deliver, or cause to be executed and delivered, to Administrative Agent all
such documents, instruments, agreements, and certificates as are similar (and
as are relevant) to those described in Sections 3.1(b), 3.1(j), 3.1(m) and
3.1(n). In the event that any Person becomes a Foreign Subsidiary of Company,
Company shall (a) cause such Foreign Subsidiary to be wholly owned by a
Domestic Subsidiary of Company that is a Special Purpose Entity and (b) promptly
cause such Domestic Subsidiary to deliver, all such documents, instruments,
agreements, and certificates as are similar to those described in Sections
3.1(b), and Company shall take, or shall cause such Domestic Subsidiary to take
all of the commercially reasonable actions referred to in Section 3.1(j)(i) necessary
to grant and to perfect a First Priority Lien in favor of Collateral Agent, for
the benefit of Secured Parties, under the Pledge and Security Agreement in 65%
of the Capital Stock of such Foreign Subsidiary. With respect to each such
Subsidiary, Company shall promptly send to Administrative Agent written notice
setting forth with respect to such Person (i) the date on which such
Person became a Subsidiary of Company, and (ii)  all of the data required
to be set forth in Schedules 4.1 and 4.2 with respect to such Subsidiary of
Company; provided, such written notice shall be deemed to supplement
Schedule 4.1 and 4.2 for all purposes hereof. For the avoidance of doubt, each
direct or indirect Domestic Subsidiary other than an Unrestricted Subsidiary
shall remain a Guarantor Subsidiary and a grantor under the Pledge and Security
Agreement at all times until all Loans are paid in full. Notwithstanding
anything to the contrary in any Credit Document, (i) no Subsidiary that is
a CFC, or that is owned in whole or in part, directly or indirectly, by a CFC,
shall be required to pledge any of its assets or otherwise provide any security
of any of the Loans or any of the obligations of Company under any of the
Credit Documents, and (ii)  no Credit Party or Subsidiary shall be
required to pledge, directly or indirectly, more than 65% of the Capital Stock
of any CFC.

 

5.11.       Additional Material Real
Estate Assets. In the event that any Credit Party acquires a Material Real
Estate Asset or a Real Estate Asset owned or leased on the Closing Date becomes
a Material Real Estate Asset and such interest has not otherwise been made
subject to the Lien of the Collateral Documents in favor of Collateral Agent,
for the benefit of Secured Parties, then such Credit Party, contemporaneously
with acquiring such Material Real Estate Asset, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages,
documents, instruments, agreements, opinions and certificates with respect to each
such Material Real Estate Asset that Collateral Agent shall reasonably request
to create in favor of Collateral Agent, for the benefit of Secured Parties, a
valid and, subject to any filing and/or recording referred to herein, perfected
First Priority Lien in such Material Real Estate Assets and any related
personal property. In addition to the foregoing, Company shall, at the request
of Requisite Lenders, deliver, from time to time, to Administrative Agent such
appraisals of Real Estate Assets as are reasonably requested by any Agent or
Requisite Lenders.

 

5.12.       Segregated Account for
Working Capital Collateral. If Receivables-Related Assets include lockboxes
and other depositary accounts into which the proceeds of Receivables are
deposited, Company agrees that all such lockboxes and other depositary accounts
will be segregated accounts into which no other funds of Company shall be
deposited.

 

5.13.       Interest Rate Protection. Within
ninety (90) days following the Closing Date, and at all times thereafter, Company
shall ensure that an amount of the Loans equal to or greater than the Required
Hedge Amount (as described below) shall be subject to one or more Interest Rate
Agreements for a term of not less than the lesser of (i) the period of
time from the date of determination through the Maturity

 

61

 

Date and (ii)  two (2)  years and otherwise in form and
substance reasonably satisfactory to Administrative Agent; provided,
that such Interest Rate Agreements are available on commercially reasonable
terms. The “Required Hedge Amount” shall be
the amount equal to (x)  40% of the aggregate principal amount of the
total Indebtedness for borrowed money of Company and its Restricted
Subsidiaries then outstanding (excluding any Indebtedness outstanding under the
Working Capital Facility Credit Agreement), minus (y)  all amounts of such
Indebtedness already subject, on such date, to a fixed interest rate or other
Interest Rate Agreement effectively converting Company’s interest rate exposure
thereunder to a fixed rate.

 

5.14.       Further Assurances. At
any time or from time to time upon the request of Administrative Agent, each
Credit Party will, at its expense, promptly execute, acknowledge and deliver
such further documents and do such other acts and things as Administrative
Agent, Collateral Agent or Requisite Lenders may reasonably request in order to
effect fully the purposes of the Credit Documents. In furtherance and not in
limitation of the foregoing, each Credit Party shall take such actions as
Administrative Agent, Collateral Agent or Requisite Lenders may reasonably
request from time to time to ensure that the Obligations are guarantied by the
Guarantor Subsidiaries and are secured by substantially all of the assets of
Company and its Subsidiaries and all of the outstanding Capital Stock of
Company and its Subsidiaries (subject to limitations contained in the Credit
Documents with respect to Foreign Subsidiaries and other than assets as to
which the Administrative Agent, in its reasonable discretion, determines that
the cost of obtaining such security interest is excessive in relation to the
benefit to the Lenders of the security afforded thereby).

 

5.15.       Personal Property
Collateral Access Agreement. The Company shall use reasonable efforts to
deliver a Personal Property Collateral Access Agreement executed by the
applicable Credit Party and by Priority Healthcare Corporation with respect to
finished-goods or non-bulk sample Inventory (as defined in the Pledge and
Security Agreement) warehoused at Priority Healthcare Corporation facilities
located at 2450 Spiegel Drive, Groveport, Ohio 43125.

 

SECTION 6.         NEGATIVE
COVENANTS

 

Each Credit
Party covenants and agrees that, so long as any Commitment is in effect and
until payment in full of all Obligations, such Credit Party shall perform, and
shall cause each of its Subsidiaries to perform, all covenants in this Section 6.

 

6.1.         Indebtedness. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or guaranty, or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except, without
duplication:

 

(a)           the Obligations;

 

(b)           Indebtedness of any Guarantor Subsidiary to Company or
to any other Guarantor Subsidiary, or of Company to any Guarantor Subsidiary; provided,
(i) all such Indebtedness shall be subject to a First Priority Lien
pursuant to the Pledge and Security Agreement, (ii)  all such Indebtedness
shall be unsecured and subordinated in right of payment to the payment in full
of the Obligations, and (iii)  any payment by any such Guarantor
Subsidiary under any guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any Indebtedness owed by such Subsidiary to Company
or to any of its Subsidiaries for whose benefit such payment is made;

 

(c)           [RESERVED];

 

62

 

(d)           Indebtedness incurred by Company or any of its
Subsidiaries arising from agreements providing for indemnification, adjustment
of purchase price or similar obligations in connection with Permitted
Acquisitions or permitted dispositions of any business, assets or Subsidiary of
Company or any of its Subsidiaries;

 

(e)           Indebtedness which may be deemed to exist pursuant to
any performance, statutory, appeal or similar obligations incurred in the
ordinary course of business;

 

(f)            Indebtedness in respect of netting services, overdraft
protections and otherwise in connection with Deposit Accounts;

 

(g)           guaranties in the ordinary course of business of the
obligations of suppliers, customers, franchisees and licensees of Company and
its Subsidiaries;

 

(h)           guaranties by Company of Indebtedness of a Guarantor
Subsidiary or guaranties by a Guarantor Subsidiary of Indebtedness of Company
or another Guarantor Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section 6.1; provided,
that if the Indebtedness that is being guarantied is unsecured and/or
subordinated to the Obligations, the guaranty shall also be unsecured and/or
subordinated to the Obligations;

 

(i)            reimbursement obligations in respect of letters of
credit and surety bonds issued to support obligations of Company and its
Subsidiaries in the ordinary course of business in an aggregate amount not to
exceed at any time $7,500,000;

 

(j)            Indebtedness with respect to Capital Leases (i) with
respect to Company’s principal offices at Liberty Corner, New Jersey, if such
offices are held under a Capital Lease, in an aggregate amount not to exceed at
any time $10,000,000 and (ii)  otherwise in an aggregate amount not to
exceed at any time $3,000,000.

 

(k)           purchase money Indebtedness, in an aggregate amount
for all Indebtedness under this clause (k) not to exceed at any time
$10,000,000; provided, any such Indebtedness shall be secured only by
the asset acquired in connection with the incurrence of such Indebtedness;

 

(l)            the Permitted Working Capital Facility;

 

(m)          Indebtedness evidenced by the Interest Rate Agreements
and other Indebtedness and obligations owing under Hedge Agreements relating to
Loans hereunder and other Hedge Agreements entered into in order to manage
existing or anticipated interest rate, exchange rate or commodity price risks
and not for speculative purposes;

 

(n)           [RESERVED];

 

(o)           so long as no Event of Default shall be in existence
or would occur as a result of the incurrence thereof, other Indebtedness of
Company and/or its Subsidiaries, in an aggregate amount for all Indebtedness
under this clause (o) not to exceed $50,000,000 at any time outstanding, that
is unsecured and (ii)  junior in right of payment to the payment of the
Indebtedness arising or existing under this Agreement and the other Credit
Documents, and the terms of which require no scheduled amortization or other
scheduled payments of principal prior to at least one year after the Maturity
Date, provided, that such Indebtedness is subordinated to the
Obligations and the First Priority Lien of the Collateral Agent, pursuant to an
intercreditor agreement with the lenders under such subordinated Indebtedness
in form and substance reasonably acceptable to the Syndication Agent and the
Collateral Agent;

 

63

 

(p)           Indebtedness with respect to leases and financings of
vehicles for use by employees in the ordinary course of business, with such
initial amounts, as of the Closing Date, as described in Schedule 6.1(p), provided,
that financings that are securitizations are specifically excluded;

 

(q)           Indebtedness incurred in the ordinary course of
business to customs and revenue authorities consisting of the obligation to pay
customs duties in connection with the importation of goods;

 

(r)            (i) Indebtedness of a Person or Indebtedness
attaching to assets of a Person that, in either case, becomes a Subsidiary or
Indebtedness attaching to assets that are acquired by Company or any of its
Subsidiaries, in each case after the Closing Date as the result of a Permitted
Acquisition, in an aggregate amount not to exceed $10,000,000 at any one time
outstanding, provided that (x)  such Indebtedness existed at the
time such Person became a Subsidiary or at the time such assets were acquired
and, in each case, was not created in anticipation thereof and (y)  such
Indebtedness is not guaranteed in any respect by Company or any Subsidiary
(other than by any such person that so becomes a Subsidiary), and (ii) 
any refinancing, refunding, renewal or extension of any Indebtedness specified
in subclause (i) above, provided, that (1)  the principal
amount of any such Indebtedness is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal
or extension, (2)  the direct and contingent obligors with respect to such
Indebtedness are not changed and (3) such Indebtedness shall not be
secured by any assets other than the assets securing the Indebtedness being
renewed, extended or refinanced; and

 

(s)           other Indebtedness of Company and its Subsidiaries in
an aggregate amount not to exceed at any time $10,000,000; provided that
no more than $5,000,000 of Indebtedness incurred pursuant to this Section 6.1(s)
may be secured.

 

6.2.         Liens. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company or any of its
Subsidiaries, whether now owned or hereafter acquired or licensed, or any
income, profits or royalties therefrom, or file or permit the filing of, or
permit to remain in effect, any financing statement or other similar notice of
any Lien with respect to any such property, asset, income, profits or royalties
under the UCC of any State or under any similar recording or notice statute,
except, without duplication:

 

(a)           Subject to the terms of the Working Capital
Intercreditor Agreement, Liens in favor of Collateral Agent for the benefit of
Secured Parties granted pursuant to any Credit Document;

 

(b)           Liens for Taxes, assessments or governmental charges
or levies the payment of which is not required under Section 5.3;

 

(c)           statutory Liens of landlords, banks (and rights of set-off),
of carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and
other similar Liens imposed by law (other than any such Lien imposed pursuant
to Section 401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA
or securing Indebtedness for borrowed money unless permitted pursuant to
subsections (a), (e) , (m), (n), (t), (u) or (w) of this Section 6.2),
in each case incurred in the ordinary course of business (i) for amounts
not yet overdue or (ii)  for amounts that are overdue and that (in the
case of any such amounts overdue for a period in excess of five days) are being
contested in good faith by appropriate proceedings, so long as such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made for any such contested amounts;

 

(d)           Liens incurred in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance

 

64

 

of
tenders, statutory obligations, appeal bonds, bids, leases, government
contracts, trade contracts and other similar obligations (exclusive of
obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;

 

(e)           Liens on the Working Capital Collateral to secure the
obligations under the Permitted Working Capital Facility;

 

(f)            any interest or title of a lessor or sublessor under
any lease of real estate permitted hereunder;

 

(g)           Liens solely on any cash earnest money deposits made
by Company or any of its Subsidiaries in connection with any letter of intent
or purchase agreement permitted under the Credit Documents;

 

(h)           purported Liens evidenced by the filing of
precautionary UCC financing statements relating solely to operating leases of
personal property entered into in the ordinary course of business;

 

(i)            Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in connection
with the importation of goods;

 

(j)            Liens for Indebtedness permitted under Section 6.1(i),
provided, that such Liens encumber only Cash, Cash Equivalents or
Deposit Accounts in which the Collateral Agent does not have a Lien;

 

(k)           licenses of patents, copyrights, trademarks and other
intellectual property rights granted by Company or any of its Subsidiaries in
the ordinary course of business and not interfering in any respect with the
ordinary conduct of the business of Company or such Subsidiary;

 

(l)            Liens described in Schedule 6.2(l), but not the
extension of coverage thereof to other property or assets;

 

(m)          Liens securing Indebtedness permitted pursuant to Section 6.1(k);
provided, any such Lien shall encumber only the asset acquired with the
proceeds of such Indebtedness;

 

(n)           UCC financing statements filed within the week prior
to a refinancing of the Obligations to evidence the Liens securing such
refinanced Obligations (provided the granting of Liens to secure such
refinanced Obligations shall not be permitted);

 

(o)           Liens securing Indebtedness permitted pursuant to (i) Section 6.1(j)
and (ii)  Section 6.1(r); provided that, in the case of
Indebtedness permitted pursuant to Section 6.1(r), (A) such Lien is not
created in contemplation of or in connection with such acquisition or such
Person becoming a Subsidiary, as the case may be, (B) such Lien shall not apply
to any other property or asset of Company or any Subsidiary and (C) such Lien
shall secure only those obligations that it secures on the date of such
acquisition or the date such Person becomes a Subsidiary, as the case may be;

 

(p)           Liens in connection with attachments and judgments
(including judgment or appeal bonds) not constituting an Event of Default
hereunder; provided, that the judgments secured shall, within 30 days
after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days after the
expiration of any such stay;

 

65

 

(q)           easements, rights-of-way, restrictions (including
zoning restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing the use
of the encumbered Property for its intended purposes;

 

(r)            leases or subleases granted to others in the ordinary
course of business not interfering in any material respect with the business of
Company and its Subsidiaries;

 

(s)           normal and customary rights of setoff upon deposits of
cash in favor of banks or other depository institutions;

 

(t)            Liens assumed in connection with a Permitted
Acquisition, so long as such Liens cover only the assets acquired pursuant to
such Permitted Acquisition and were not created in contemplation thereof;

 

(u)           [RESERVED];

 

(v)           Liens arising in connection with consignments or
similar arrangements for the sale of goods in the ordinary course of business;

 

(w)          Liens on vehicles acquired with Indebtedness permitted
by Section 6.1(p); and

 

(x)            additional Liens not otherwise permitted by the
foregoing clauses of this Section 6.2; provided, that such
additional Liens permitted by this clause (y)  do not encumber property
and assets which at any time exceed $5,000,000 in fair market value.

 

6.3.         [RESERVED].

 

6.4.         No Further Negative
Pledges. Except with respect to (a) specific property encumbered to
secure payment of Indebtedness permitted by Section 6.1(k) or to be sold
pursuant to an executed agreement with respect to an Asset Sale permitted under
Section 6.9(c), (b) specific property as to which Liens are permitted
under Section 6.2 (provided any second lien of the Collateral Agent is not
thereby impaired), (c) property encumbered as collateral pursuant to the
Working Capital Facility Security Agreement, and (d)  restrictions by
reason of customary provisions restricting assignments, subletting or other
transfers contained in leases, licenses and similar agreements entered into in
the ordinary course of business (provided that such restrictions are limited to
the property or assets secured by such Liens or the property or assets subject
to such leases, licenses or similar agreements, as the case may be) no Credit
Party nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired, to secure the Obligations.

 

6.5.         Restricted Junior
Payments. No Credit Party shall, nor shall it permit any of its Subsidiaries
or Affiliates through any manner or means or through any other Person to,
directly or indirectly, declare, order, pay, make or set apart, or agree to
declare, order, pay, make or set apart, any sum for any Restricted Junior
Payment except that Company may make (a) regularly scheduled payments of
interest in respect of any Indebtedness permitted under Section 6.1(o) in
accordance with the terms of, and only to the extent required by, and subject
to the provisions contained in, the indenture or other agreement pursuant to
which such Indebtedness was issued, (b) payments required to repurchase
rights or obligations with respect to outstanding options granted by, and
restricted stock of, Company pursuant to the rights of the holders thereof and
the obligations of Company with respect thereof in an aggregate amount not to
exceed $5,000,000 during the term of this Agreement, (c) payments to
holders of SARs in

 

66

 

respect thereof in an amount not to exceed $15,000,000 in the aggregate
and (d)  distributions to a taxing authority in the amount of any Net
Exercise Withholding Payments.

 

6.6.         Restrictions on
Subsidiary Distributions. Except as provided in this Section 6.6, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of
Company to (a) pay dividends or make any other distributions on any of
such Subsidiary’s Capital Stock owned by Company or any other Subsidiary of
Company, (b) repay or prepay any Indebtedness owed by such Subsidiary to
Company or any other Subsidiary of Company, (c) make loans or advances to
Company or any other Subsidiary of Company, or (d)  transfer any of its
property or assets to Company or any other Subsidiary of Company other than
restrictions (i) in agreements evidencing Indebtedness permitted by Section 6.1(k)
and 6.1(r) that impose restrictions on the property so acquired and (ii) 
permitted under Section 6.4.

 

6.7.         Investments. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, make or own any Investment in any Person, including without
limitation any Joint Venture, except:

 

(a)           Investments in Cash and Cash Equivalents;

 

(b)           (i) equity Investments owned as of the Closing
Date in any Subsidiary, Investments made after the Closing Date in Guarantor
Subsidiaries; and (iii)  Investments by Company or any Subsidiary in any
Unrestricted Subsidiary; provided that the aggregate amount of
Investments made after the Closing Date by Company or any Subsidiary in
Unrestricted Subsidiaries shall not exceed $2,500,000 at any time outstanding
(with each Investment being valued at cost at the time such Investment is made
and net of dividends and distributions actually received by Company from
Unrestricted Subsidiaries in respect of any such Investments (but not to exceed
the cost of such Investment at the time made)).

 

(c)           Investments (i) in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors and (ii)  deposits, prepayments and other credits to suppliers
made in the ordinary course of business consistent with the past practices of
Company and its Subsidiaries;

 

(d)           intercompany loans to the extent permitted under Section 6.1(b);

 

(e)           [Reserved];

 

(f)            (i) loans and advances to employees of Company
and its Guarantor Subsidiaries made in the ordinary course of business in an
aggregate principal amount not to exceed $2,000,000 at any time outstanding,
and (ii)  Section 83(b) Loans to employees outstanding as of the
date hereof made to fund the early exercise of stock options in the amount of
$3,200,000 (excluding accrued interest added to the principal thereof);

 

(g)           Investments made in connection with Permitted
Acquisitions permitted pursuant to Section 6.9;

 

(h)           Investments existing on the date hereof and described
in Schedule 6.7;

 

67

 

(i)            receivables owing to Company or any of its
Subsidiaries or any receivables and advances to suppliers, in each case if
created, acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;

 

(j)            purchases of inventory, supplies, materials and
equipment or licenses, contributions or leases of intellectual property, in
each case in the ordinary course of business consistent with past practices;

 

(k)           other Investments in an aggregate amount not to exceed
at any time $2,500,000;

 

(l)            Investments consisting of cash on deposit with banks
or other depository institutions solely to the extent required in connection
with the maintenance of deposit accounts in the ordinary course of business;

 

(m)          other Investments in Subsidiaries other than wholly-owned
Guarantor Subsidiaries of Company in an aggregate amount not to exceed at any
time $2,500,000.

 

Notwithstanding
the foregoing, in no event shall any Credit Party make, or permit any of its
Subsidiaries to make, any Investment that results in or facilitates in any
manner any Restricted Junior Payment not otherwise permitted under the terms of
Section 6.5.

 

6.8.         Financial Covenants.

 

(a)           Interest Coverage Ratio. Company shall not permit the
Interest Coverage Ratio as of the last day of any Fiscal Quarter, beginning
with the Fiscal Quarter ending December 31, 2007, to be less than the
correlative ratio indicated:

 

	
  Fiscal Quarter Ended

  	
   

  	
  Interest Coverage Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  3.50 : 1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  4.00 : 1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  4.00 : 1.00

  	
   

  
	
  September 30, 2008 and thereafter

  	
   

  	
  4.25 : 1.00

  	
   

  

 

(b)           Leverage Ratio. Company shall not permit the Leverage Ratio as of
the last day of any Fiscal Quarter, beginning with the Fiscal Quarter ending
December 31, 2007, to exceed the correlative ratio indicated: 

 

	
  Fiscal Quarter Ended

  	
   

  	
  Interest Coverage Ratio

  	
   

  
	
  December 31, 2007

  	
   

  	
  3.50 : 1.00

  	
   

  
	
  March 31, 2008

  	
   

  	
  2.75 : 1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  2.25 : 1.00

  	
   

  

 

68

 

	
  Fiscal Quarter Ended

  	
   

  	
  Interest Coverage Ratio

  	
   

  
	
  September 30, 2008

  	
   

  	
  2.00 : 1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  2.00 : 1.00

  	
   

  
	
  March 31, 2009

  	
   

  	
  1.85 : 1.00

  	
   

  
	
  June 30, 2009 and thereafter

  	
   

  	
  1.75 : 1.00

  	
   

  

 

(c)           Maximum Consolidated Capital Expenditures. Company shall not, and shall not
permit its Subsidiaries to, make or incur Consolidated Capital Expenditures in
any Fiscal Year ending prior to or on the Maturity Date in an aggregate amount
for Company and its Subsidiaries in excess of $5,000,000; provided, such
amount for any Fiscal Year shall be increased by the amount by which $5,000,000
exceeds the Consolidated Capital Expenditures for the immediately preceding
Fiscal Year.

 

(d)           Certain Calculations. With respect to any period during
which a Permitted Acquisition, an Asset Sale, a designation of a Subsidiary as
an Unrestricted Subsidiary or a Subsidiary Redesignation has occurred (each, a “Subject Transaction”), for purposes of determining
compliance with the financial covenants set forth in this Section 6.8,
Consolidated Adjusted EBITDA shall be calculated with respect to such period on
a pro forma basis (including pro forma adjustments arising out of events which
are directly attributable to a specific transaction, are factually supportable
and are expected to have a continuing impact, in each case determined on a
basis consistent with Article 11 of Regulation S-X promulgated under the
Securities Act and as interpreted by the staff of the Securities and Exchange
Commission, which would include amounts attributed to acquired in-process
research and development and cost savings resulting from head count reduction,
closure of facilities and similar restructuring charges, which pro forma
adjustments shall be certified by the chief financial officer of Company) using
the historical financial statements of any business so acquired or to be
acquired or sold or to be sold and the consolidated financial statements of
Company and its Subsidiaries which shall be reformulated as if such Subject
Transaction, and any Indebtedness incurred or repaid in connection therewith,
had been consummated or incurred or repaid at the beginning of such period (and
assuming that such Indebtedness bears interest during any portion of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans incurred during
such period); provided that (x)  for any Subsidiary Redesignation
then being designated, effect shall be given to such Subsidiary Redesignation
and all other Subsidiary Redesignations after the first day of such period and
on or prior to the date of the respective Subsidiary Redesignation then being
designated, collectively, and (y)  for any designation of a Subsidiary as
an Unrestricted Subsidiary, effect shall be given to such designation and all
other designations of Subsidiaries as Unrestricted Subsidiaries after the first
day of such period and on or prior to the date of the then applicable
designation of a Subsidiary as an Unrestricted Subsidiary, collectively.

 

6.9.         Fundamental Changes;
Disposition of Assets; Acquisitions. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or license, exchange,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, assets or property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
whether now owned or hereafter acquired, leased or licensed, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment and Capital Expenditures in the ordinary course of
business) the business, property or fixed

 

69

 

assets of, or stock or other evidence of beneficial ownership of, any
Person or any division or line of business or other business unit of any
Person, except:

 

(a)           any wholly owned Subsidiary of Company may be merged
with or into Company or any Guarantor Subsidiary, or may be liquidated, wound
up or dissolved, or all or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any Guarantor
Subsidiary; provided, (i) in the case of such a merger, Company or
such Guarantor Subsidiary, as applicable shall be the continuing or surviving
Person, (ii)  Company gives the Agents ten days’ prior written notice of
such action, (iii)  no Default or Event of Default shall have occurred or
be continuing either before or after giving effect thereto, and (iv)  the
Collateral Agent’s Liens in the Collateral shall not be affected in any manner
thereby.

 

(b)           any Subsidiary (other than Company) (i) that is
no longer useful in the business of Company or (ii)  of which liquidation
or dissolution is in the best interest of Company, each as determined in good
faith and reasonable discretion by Company, may dissolve, liquidate or wind up
its affairs at any time; provided, that (x)  all assets of such
Subsidiary are transferred to another Credit Party, (y) such dissolution
is not materially disadvantageous to the Lenders, and (z) all Liens on assets
of such Subsidiary are maintained for the benefit of Collateral Agent
subsequent to any dissolution;

 

(c)           sales or other dispositions described in clauses (i), (ii) 
and (iii)  of the definition of “Asset Sale”;

 

(d)           Asset Sales, provided, (1)  except with
respect to the licensing of property in the ordinary course of business, the
consideration received for such assets shall be in an amount at least equal to
the fair market value thereof (determined in good faith by the board of directors
of Company (or similar governing body)) and (2)  no less than 75% thereof
shall be paid in Cash on the date of such sale or within six months thereafter;

 

(e)           disposals of obsolete, worn out or surplus property;

 

(f)            disposals of leased or financed automobiles in the
ordinary course of business;

 

(g)           Permitted Acquisitions;

 

(h)           Reinvestments permitted under Section 2.14(a) or
(b); and

 

(i)            Investments made in accordance with Section 6.7.

 

6.10.       Disposal of Subsidiary
Interests. Except for any sale of all of its interests in the Capital Stock
of any of its Subsidiaries in compliance with the provisions of Section 6.9,
no Credit Party shall, nor shall it permit any of its Subsidiaries to, (a) directly
or indirectly sell, assign, pledge or otherwise encumber or dispose of any
Capital Stock of any of its Subsidiaries, except to qualify directors if
required by applicable law; or (b) permit any of its Subsidiaries directly
or indirectly to sell, assign, pledge or otherwise encumber or dispose of any
Capital Stock of any of its Subsidiaries, except to another Credit Party
(subject to the restrictions on such disposition otherwise imposed hereunder),
or to qualify directors if required by applicable law.

 

6.11.       Sales and Lease-Backs. No
Credit Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, become or remain liable as lessee or as a guarantor or other surety
with respect to any lease of any property (whether real, personal or mixed),
whether now owned or hereafter acquired, 

 

70

 

which such Credit Party or such Subsidiary (a) has sold or
transferred or is to sell or to transfer to any other Person (other than
Company or any Guarantor Subsidiary), or (b) intends to use for substantially
the same purpose as any other property which has been or is to be sold or
transferred by such Credit Party to any Person (other than Company or any
Guarantor Subsidiary) in connection with such lease.

 

6.12.       Transactions with
Shareholders and Affiliates. No Credit Party shall, nor shall it permit any
of its Subsidiaries 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 holder of 10% or more of any
class of Capital Stock of Company or any of its Subsidiaries or with any
Affiliate of Company or of any such holder, on terms that are less favorable to
Company or that Subsidiary, as the case may be, than those that might be
obtained at the time from a Person who is not such a holder or Affiliate; provided,
the foregoing restriction shall not apply to (a) any transaction between
Company and any Guarantor Subsidiary; (b) reasonable and customary fees
paid and options granted to members of the board of directors (or similar
governing body) of Company and its Subsidiaries that are approved by the board
of directors of Company or such Subsidiary (or a committee thereof); (c) compensation
arrangements (including employment agreements, option agreements and restricted
stock agreements) for officers and other employees of Company and its
Subsidiaries entered into in the ordinary course of business that are approved
by the board of directors of Company or such Subsidiary (or a committee
thereof); (d)  transactions described in Schedule 6.12, including, with
respect to officers or directors of Company, only those transactions not in the
ordinary course of business and not on arms’ length terms; (e)  any
payments permitted under Section 6.5; (f)  loans to employees,
directors, officers, shareholders or agents to the extent permitted under Section 6.7(f) ;
(g)  Investments in any Credit Party or other Subsidiaries existing on the
Closing Date, and (h)  Investments (including Permitted Acquisitions)
permitted under Section 6.7(e)  and (g)  Investments on terms
that are not less favorable to Company than those that might be obtained from a
Person who is not an Affiliate.

 

6.13.       Conduct of Business. From
and after the Closing Date, no Credit Party shall, nor shall it permit any of
its Subsidiaries to, engage in any business other than (i) the businesses
engaged in by such Credit Party on the Closing Date and similar or related
businesses and (ii)  such other lines of business as may be consented to
by Requisite Lenders.

 

6.14.       [RESERVED].

 

6.15.       Provisions Related to Joint
Ventures. Notwithstanding anything to the contrary in this Agreement,
Company shall not (i) engage in any Asset Sale with a Joint Venture in
which Company has an equity interest or (ii)  permit any such Joint
Venture to incur any Indebtedness.

 

6.16.       Amendments or Waivers with
Respect to Certain Indebtedness. No Credit Party shall, nor shall it permit
any of its Subsidiaries to amend, waive or otherwise change the terms of the Permitted
Working Capital Facility, except in accordance with the terms of the Working
Capital Intercreditor Agreement; provided, that the Credit Parties shall
not be permitted to amend the Permitted Working Capital Facility in a manner
that materially and adversely affects the Credit Parties or the Lenders.

 

6.17.       Fiscal Year. No Credit
Party shall, nor shall it permit any of its Subsidiaries to change its Fiscal
Year end from December 31.

 

SECTION 7.         GUARANTY

 

7.1.         Guaranty of the
Obligations. Subject to the provisions of Section 7.2, Guarantor
Subsidiaries jointly and severally hereby irrevocably and unconditionally
guaranty to Administrative

 

71

 

Agent for the ratable benefit of the Beneficiaries the due and punctual
payment in full of all Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code)
(collectively, the “Guaranteed Obligations”).

 

7.2.         Contribution by Guarantor
Subsidiaries. All Guarantor Subsidiaries desire to allocate among
themselves (collectively, the “Contributing Guarantors”),
in a fair and equitable manner, their obligations arising under this Guaranty. Accordingly,
in the event any payment or distribution is made on any date by a Guarantor
Subsidiary (a “Funding Guarantor”) under this
Guaranty such that its Aggregate Payments exceeds its Fair Share as of such
date, such Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in an amount sufficient to cause each
Contributing Guarantor’s Aggregate Payments to equal its Fair Share as of such
date. “Fair Share” means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a) the
ratio of (i) the Fair Share Contribution Amount with respect to such
Contributing Guarantor to (ii) the aggregate of the Fair Share
Contribution Amounts with respect to all Contributing Guarantors multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Guaranty in respect of the obligations Guaranteed. “Fair
Share Contribution Amount” means, with respect to a Contributing Guarantor as
of any date of determination, the maximum aggregate amount of the obligations
of such Contributing Guarantor under this Guaranty that would not render its
obligations hereunder or thereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of the Bankruptcy Code or any
comparable applicable provisions of state law; provided, solely for
purposes of calculating the “Fair Share Contribution
Amount” with respect to any Contributing Guarantor for purposes of
this Section 7.2, any assets or liabilities of such Contributing Guarantor
arising by virtue of any rights to subrogation, reimbursement or
indemnification or any rights to or obligations of contribution hereunder shall
not be considered as assets or liabilities of such Contributing Guarantor. “Aggregate Payments” means, with respect to a Contributing
Guarantor as of any date of determination, an amount equal to (1)  the
aggregate amount of all payments and distributions made on or before such date
by such Contributing Guarantor in respect of this Guaranty (including, without
limitation, in respect of this Section 7.2), minus (2)  the aggregate
amount of all payments received on or before such date by such Contributing
Guarantor from the other Contributing Guarantors as contributions under this Section 7.2.
The amounts payable as contributions hereunder shall be determined as of the
date on which the related payment or distribution is made by the applicable
Funding Guarantor. The allocation among Contributing Guarantors of their
obligations as set forth in this Section 7.2 shall not be construed in any
way to limit the liability of any Contributing Guarantor hereunder. Each
Guarantor Subsidiary is a third party beneficiary to the contribution agreement
set forth in this Section 7.2.

 

7.3.         Payment by Guarantor
Subsidiaries. Subject to Section 7.2, Guarantor Subsidiaries hereby
jointly and severally agree, in furtherance of the foregoing and not in
limitation of any other right which any Beneficiary may have at law or in
equity against any Guarantor Subsidiary by virtue hereof, that upon the failure
of Company to pay any of the Guaranteed Obligations when and as the same shall
become due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including amounts that would become due but
for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code), Guarantor Subsidiaries will upon demand pay, or cause to be
paid, in Cash, to Administrative Agent for the ratable benefit of
Beneficiaries, an amount equal to the sum of the unpaid principal amount of all
Guaranteed Obligations then due as aforesaid, accrued and unpaid interest on
such Guaranteed Obligations (including interest which, but for Company’s
becoming the subject of a case under the Bankruptcy Code, would have accrued on
such Guaranteed Obligations, whether or not a claim is allowed against Company
for such interest in the related bankruptcy case) and all other Guaranteed
Obligations then owed to Beneficiaries as aforesaid.

 

72

 

7.4.         Liability of Guarantor Subsidiaries
Absolute. Each Guarantor Subsidiary agrees that its
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance that constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Guaranteed Obligations. In furtherance of the foregoing and without limiting
the generality thereof, each Guarantor Subsidiary agrees as follows:

 

(a)           this
Guaranty is a guaranty of payment when due and not of collectability. This
Guaranty is a primary obligation of each Guarantor Subsidiary and not merely a
contract of surety;

 

(b)           Administrative
Agent may enforce this Guaranty upon the occurrence of an Event of Default;

 

(c)           the
obligations of each Guarantor Subsidiary hereunder are independent of the
obligations of Company and the obligations of any other guarantor (including
any other Guarantor Subsidiary) of the obligations of Company, and a separate
action or actions may be brought and prosecuted against such Guarantor
Subsidiary whether or not any action is brought against Company or any of such
other guarantors and whether or not Company is joined in any such action or
actions;

 

(d)           payment
by any Guarantor Subsidiary of a portion, but not all, of the Guaranteed
Obligations shall in no way limit, affect, modify or abridge any Guarantor
Subsidiary’s liability for any portion of the Guaranteed Obligations which has
not been paid. Without limiting the generality of the foregoing, if Administrative
Agent is awarded a judgment in any suit brought to enforce any Guarantor
Subsidiary’s covenant to pay a portion of the Guaranteed Obligations, such
judgment shall not be deemed to release such Guarantor Subsidiary from its
covenant to pay the portion of the Guaranteed Obligations that is not the
subject of such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor Subsidiary, limit, affect, modify or abridge any
other Guarantor Subsidiary’s liability hereunder in respect of the Guaranteed
Obligations;

 

(e)           any
Beneficiary, upon such terms as it deems appropriate, without notice or demand
and without affecting the validity or enforceability hereof or giving rise to
any reduction, limitation, impairment, discharge or termination of any
Guarantor Subsidiary’s liability hereunder, from time to time may
(i) renew, extend, accelerate, increase the rate of interest on, or
otherwise change the time, place, manner or terms of payment of the Guaranteed
Obligations; (ii)  settle, compromise, release or discharge, or accept or
refuse any offer of performance with respect to, or substitutions for, the
Guaranteed Obligations or any agreement relating thereto and/or subordinate the
payment of the same to the payment of any other obligations; (iii) 
request and accept other guaranties of the Guaranteed Obligations and take and
hold security for the payment hereof or the Guaranteed Obligations; (iv) 
release, surrender, exchange, substitute, compromise, settle, rescind, waive,
alter, subordinate or modify, with or without consideration, any security for
payment of the Guaranteed Obligations, any other guaranties of the Guaranteed
Obligations, or any other obligation of any Person (including any other
Guarantor Subsidiary) with respect to the Guaranteed Obligations; (v) 
enforce and apply any security now or hereafter held by or for the benefit of
such Beneficiary in respect hereof or the Guaranteed Obligations and direct the
order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith or any
applicable security agreement, including foreclosure on any such security
pursuant to one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable, and even though such action
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of any Guarantor Subsidiary against Company or any
security for the Guaranteed Obligations; and (vi)  exercise any other
rights available to it under the Credit Documents; and

 

73

 

(f)            this
Guaranty and the obligations of Guarantor Subsidiaries hereunder shall be valid
and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Guaranteed Obligations), including the occurrence of any of the
following, whether or not any Guarantor Subsidiary shall have had notice or
knowledge of any of them: (i) any failure or omission to assert or enforce
or agreement or election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or remedy (whether
arising under the Credit Documents, at law, in equity or otherwise) with
respect to the Guaranteed Obligations or any agreement relating thereto, or
with respect to any other guaranty of or security for the payment of the
Guaranteed Obligations; (ii)  any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the terms or
provisions (including provisions relating to events of default) hereof, any of
the other Credit Documents or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guaranteed Obligations,
in each case whether or not in accordance with the terms hereof or such Credit
Document or any agreement relating to such other guaranty or security;
(iii) the Guaranteed Obligations, or any agreement relating thereto, at
any time being found to be illegal, invalid or unenforceable in any respect;
(iv)  the application of payments received from any source (other than
payments received pursuant to the other Credit Documents or from the proceeds
of any security for the Guaranteed Obligations, except to the extent such
security also serves as collateral for indebtedness other than the Guaranteed
Obligations) to the payment of indebtedness other than the Guaranteed
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Guaranteed Obligations; (v)  any Beneficiary’s
consent to the change, reorganization or termination of the corporate structure
or existence of Company or any of its Subsidiaries and to any corresponding
restructuring of the Guaranteed Obligations; (vi)  any failure to perfect
or continue perfection of a security interest in any collateral which secures
any of the Guaranteed Obligations; (vii)  any defenses, set-offs or
counterclaims which Company may allege or assert against any Beneficiary in
respect of the Guaranteed Obligations, including failure of consideration,
breach of warranty, payment, statute of frauds, statute of limitations, accord
and satisfaction and usury; (viii)  any bankruptcy, insolvency,
liquidation or dissolution of any Credit Party, and (ix) any other act or thing
or omission, or delay to do any other act or thing, which may or might in any
manner or to any extent vary the risk of any Guarantor Subsidiary as an obligor
in respect of the Guaranteed Obligations.

 

7.5.         Waivers by Guarantor Subsidiaries. Each
Guarantor Subsidiary hereby waives, for the benefit of Beneficiaries:
(a) any right to require any Beneficiary, as a condition of payment or
performance by such Guarantor Subsidiary, to (i) proceed against Company,
any other guarantor (including any other Guarantor Subsidiary) of the
Guaranteed Obligations or any other Person, (ii) proceed against or
exhaust any security held from Company, any such other guarantor or any other
Person, (iii) proceed against or have resort to any balance of any Deposit
Account or credit on the books of any Beneficiary in favor of Company or any
other Person, or (iv)  pursue any other remedy in the power of any
Beneficiary whatsoever; (b) any defense arising by reason of the
incapacity, lack of authority or any disability or other defense of Company or
any other Guarantor Subsidiary including any defense based on or arising out of
the lack of validity or the unenforceability of the Guaranteed Obligations or
any agreement or instrument relating thereto or by reason of the cessation of
the liability of Company or any other Guarantor Subsidiary from any cause other
than payment in full of the Guaranteed Obligations; (c) any defense based
upon any statute or rule of law which provides that the obligation of a surety
must be neither larger in amount nor in other respects more burdensome than
that of the principal; (d)  any defense based upon any Beneficiary’s
errors or omissions in the administration of the Guaranteed Obligations, except
behavior which amounts to bad faith; (e)  (i) any principles or provisions
of law, statutory or otherwise, which are or might be in conflict with the
terms hereof and any legal or equitable discharge of such Guarantor
Subsidiary’s obligations hereunder, (ii) any rights to set-offs,
recoupments and counterclaims against Beneficiaries, and (iii) promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any Lien or any property subject thereto; (f) notices,

 

74

 

demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder or any agreement or instrument related hereto,
notices of any renewal, extension or modification of the Guaranteed Obligations
or any agreement related thereto, notices of any extension of credit to Company
and notices of any of the matters referred to in Section 7.4 and any right
to consent to any thereof; and (g) any defenses or benefits that may be
derived from or afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms hereof.

 

7.6.         Guarantor Subsidiaries’ Rights of
Subrogation, Contribution, etc. Until the Guaranteed
Obligations shall have been indefeasibly paid in full and the Commitments shall
have terminated, each Guarantor Subsidiary hereby waives any claim, right or
remedy, direct or indirect, that such Guarantor Subsidiary now has or may
hereafter have against Company or any other Guarantor Subsidiary or any of its
assets in connection with this Guaranty or the performance by such Guarantor
Subsidiary of its obligations hereunder, in each case whether such claim, right
or remedy arises in equity, under contract, by statute, under common law or otherwise
and including without limitation (a) any right of subrogation,
reimbursement or indemnification that such Guarantor Subsidiary now has or may
hereafter have against Company with respect to the Guaranteed Obligations,
(b) any right to enforce, or to participate in, any claim, right or remedy
that any Beneficiary now has or may hereafter have against Company, and
(c) any benefit of, and any right to participate in, any collateral or
security now or hereafter held by any Beneficiary. In addition, until the
Guaranteed Obligations shall have been indefeasibly paid in full and the
Commitments shall have terminated, each Guarantor Subsidiary shall withhold
exercise of any right of contribution such Guarantor Subsidiary may have
against any other guarantor (including any other Guarantor Subsidiary) of the
Guaranteed Obligations, including, without limitation, any such right of
contribution as contemplated by Section 7.2. Each Guarantor Subsidiary
further agrees that, to the extent the waiver or agreement to withhold the
exercise of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent jurisdiction
to be void or voidable for any reason, any rights of subrogation, reimbursement
or indemnification such Guarantor Subsidiary may have against Company or
against any collateral or security, and any rights of contribution such
Guarantor Subsidiary may have against any such other guarantor, shall be junior
and subordinate to any rights any Beneficiary may have against Company, to all
right, title and interest any Beneficiary may have in any such collateral or
security, and to any right any Beneficiary may have against such other
guarantor. If any amount shall be paid to any Guarantor Subsidiary on account
of any such subrogation, reimbursement, indemnification or contribution rights
at any time when all Guaranteed Obligations shall not have been finally and
indefeasibly paid in full, such amount shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of Beneficiaries to be credited
and applied against the Guaranteed Obligations, whether matured or unmatured,
in accordance with the terms hereof.

 

7.7.         Subordination of Other Obligations. Any
Indebtedness of Company or any Guarantor Subsidiary now or hereafter held by
any Guarantor Subsidiary (the “Obligee Guarantor”)
is hereby subordinated in right of payment to the Guaranteed Obligations, and
any such Indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid
over to Administrative Agent for the benefit of Beneficiaries to be credited
and applied against the Guaranteed Obligations but without affecting, impairing
or limiting in any manner the liability of the Obligee Guarantor under any
other provision hereof.

 

7.8.         Continuing Guaranty. This
Guaranty is a continuing guaranty and shall remain in effect until all of the
Guaranteed Obligations shall have been paid in full and the Commitments shall
have terminated. Each Guarantor Subsidiary hereby irrevocably waives any right
to revoke this Guaranty as to future transactions giving rise to any Guaranteed
Obligations.

 

75

 

7.9.         Authority of Guarantor Subsidiaries or
Company. It is not necessary for any Beneficiary to
inquire into the capacity or powers of any Guarantor Subsidiary or Company or
the officers, directors or any agents acting or purporting to act on behalf of
any of them.

 

7.10.       Financial Condition of Company. Any
Credit Extension may be made to Company or converted from time to time without
notice to or authorization from any Guarantor Subsidiary regardless of the
financial or other condition of Company at the time of any such grant or
conversion, as the case may be. No Beneficiary shall have any obligation to
disclose or discuss with any Guarantor Subsidiary its assessment, or any
Guarantor Subsidiary’s assessment, of the financial condition of Company. Each
Guarantor Subsidiary has adequate means to obtain information from Company on a
continuing basis concerning the financial condition of Company and its ability
to perform its obligations under the Credit Documents, and each Guarantor
Subsidiary assumes the responsibility for being and keeping informed of the
financial condition of Company and of all circumstances bearing upon the risk
of nonpayment of the Guaranteed Obligations. Each Guarantor Subsidiary hereby
waives and relinquishes any duty on the part of any Beneficiary to disclose any
matter, fact or thing relating to the business, operations or conditions of
Company now known or hereafter known by any Beneficiary.

 

7.11.       Bankruptcy, etc.

 

(a)           The
obligations of Guarantor Subsidiaries hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any case or
proceeding, voluntary or involuntary, involving the bankruptcy, insolvency,
receivership, reorganization, liquidation or arrangement of Company or any
other Guarantor Subsidiary or by any defense which Company or any other
Guarantor Subsidiary may have by reason of the order, decree or decision of any
court or administrative body resulting from any such case or proceeding.

 

(b)           Each
Guarantor Subsidiary acknowledges and agrees that any interest on any portion
of the Guaranteed Obligations which accrues after the commencement of any case
or proceeding referred to in clause (a) above (or, if interest on any
portion of the Guaranteed Obligations ceases to accrue by operation of law by
reason of the commencement of such case or proceeding, such interest which but
for such case or proceeding would have accrued on such portion of the
Guaranteed Obligations, whether or not a claim is allowed for such interest in
the related case or proceeding) shall be included in the Guaranteed Obligations
because it is the intention of Guarantor Subsidiaries and Beneficiaries that
the Guaranteed Obligations which are guaranteed by Guarantor Subsidiaries
pursuant hereto should be determined without regard to any rule of law or order
which may relieve Company of any portion of such Guaranteed Obligations.
Guarantor Subsidiaries will permit any trustee in bankruptcy, receiver, debtor
in possession, assignee for the benefit of creditors or similar Person to pay
Administrative Agent, or allow the claim of Administrative Agent in respect of,
any such interest accruing after the date on which such case or proceeding is
commenced.

 

(c)           In
the event that all or any portion of the Guaranteed Obligations are paid by
Company, the obligations of Guarantor Subsidiaries hereunder shall continue and
remain in full force and effect or be reinstated, as the case may be, in the
event that all or any part of such payment(s) are rescinded or recovered
directly or indirectly from any Beneficiary as a preference, fraudulent
transfer or otherwise, and any such payments which are so rescinded or
recovered shall constitute Guaranteed Obligations for all purposes hereunder.

 

7.12.       Discharge of Guaranty Upon Sale of
Guarantor Subsidiary. If all of the Capital Stock of
any Guarantor Subsidiary or any of its successors in interest hereunder shall
be sold or otherwise disposed of (including by merger or consolidation) in
accordance with the terms and conditions hereof, the Guaranty of such Guarantor
Subsidiary or such successor in interest, as the case may be, hereunder

 

76

 

shall automatically be discharged and released without any further
action by any Beneficiary or any other Person effective as of the time of such
Asset Sale; provided that Agent shall execute customary release
documentation evidencing such discharge and release upon the Company’s
reasonable request.

 

7.13.       Restrictions on Guaranty. Notwithstanding
anything to the contrary in any Credit Document, no Subsidiary that is a CFC,
or that is owned in whole or in part, directly or indirectly by a CFC, shall be
required to provide any Guaranty of any of the obligations of the Company under
any of the Credit Documents.

 

SECTION 8.         EVENTS OF DEFAULT

 

8.1.         Events of Default. If
any one or more of the following conditions or events shall occur:

 

(a)           Failure
to Make Payments When Due. Failure by Company to pay (i) when due any
principal of any Loan, whether at stated maturity, by acceleration, by notice
of voluntary prepayment, by mandatory prepayment or otherwise; or (ii) 
any interest on any Loan or any fee or any other amount due hereunder within
three days after the date due; or

 

(b)           Default
in Other Agreements. (i) Failure of any Credit Party or any of their
respective Subsidiaries to pay when due any principal of or interest on or any
other amount payable in respect of one or more items of Indebtedness (other
than Indebtedness referred to in Section 8.1(a)) with an aggregate
principal amount of $7,500,000 or more, in each case beyond the grace period,
if any, provided therefor; or (ii)  breach or default by any Credit Party
with respect to any other material term of (1)  one or more items of
Indebtedness in the individual or aggregate principal amounts referred to in
clause (i) above or (2)  any loan agreement, mortgage, indenture or
other agreement relating to such item(s) of Indebtedness, in each case beyond
the grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness
(or a trustee on behalf of such holder or holders) to cause, that Indebtedness
to become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or

 

(c)           Breach
of Certain Covenants. Failure of any Credit Party to perform or comply with
any term or condition contained in Section 2.6, Section 5.2 or
Section 6; or

 

(d)           Breach
of Representations, etc. Any representation, warranty, certification or
other statement made by any Credit Party in any Credit Document or in any
statement or certificate by any Credit Party or any of its Subsidiaries in
writing pursuant hereto or thereto or in connection herewith or therewith shall
be false in any material respect as of the date made; or

 

(e)           Other
Defaults Under Credit Documents. Any Credit Party shall default in the
performance of or compliance with any term contained herein or any of the other
Credit Documents, other than any such term referred to in any other subsection
of this Section 8.1, and such default shall not have been remedied or waived
within thirty (30) days (in the case of other provisions of this Agreement)
after the earlier of (i) a Responsible Officer of such Credit Party
becoming aware of such default or (ii)  receipt by Company of notice from
Administrative Agent of such default; or

 

(f)            Involuntary
Bankruptcy; Appointment of Receiver, etc. (i) A court of competent
jurisdiction shall enter a decree or order for relief in respect of Company or
any of its Subsidiaries in an involuntary case under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or
(ii)  an involuntary case shall be commenced

 

77

 

against
Company or any of its Subsidiaries under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect; or
a decree or order of a court having jurisdiction in the premises for the
appointment of a receiver, liquidator, sequestrator, trustee, custodian or
other officer having similar powers over Company or any of its Subsidiaries, or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries, and any such event described in
this clause (ii)  shall continue for sixty days without having been
dismissed, bonded or discharged; or

 

(g)           Voluntary
Bankruptcy; Appointment of Receiver, etc. (i) Company or any of its
Subsidiaries shall have an order for relief entered with respect to it or shall
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries shall make any assignment for the benefit of
creditors; or (ii)  Company or any of its Subsidiaries shall be unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the board of directors (or similar governing body)
of Company or any of its Subsidiaries (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of the actions
referred to herein or in Section 8.1(f) ; or

 

(h)           Judgments
and Attachments. Any money judgment, writ or warrant of attachment or
similar process involving (x)  in any individual case an amount in excess
of $7,500,000 or (y) in the aggregate at any time an amount in excess of
$15,000,000 (in each case to the extent not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged
coverage) shall be entered or filed against Company or any of its Subsidiaries
or any of their respective assets and, in the case of clause (x) , shall
remain undischarged, unvacated, unbonded or unstayed for a period of sixty days
(or in any event later than five days prior to the date of any proposed sale
thereunder); or

 

(i)            Dissolution.
Any order, judgment or decree shall be entered against any Credit Party (except
any inactive or immaterial Subsidiary) decreeing the dissolution or split up of
such Credit Party and such order shall remain undischarged or unstayed for a
period in excess of thirty days; or

 

(j)            Employee
Benefit Plans. (i) There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be expected to
result in liability of Company or any of its Subsidiaries in excess of
$5,000,000 during the term hereof; or (ii)  there exists any fact or
circumstance that reasonably could be expected to result in the imposition of a
Lien or security interest under Section 412(n) of the Internal Revenue
Code or under ERISA.

 

(k)           Change
of Control. A Change of Control shall occur; or

 

(l)            Guaranties,
Collateral Documents and other Credit Documents. At any time after the
execution and delivery thereof, (i) the Guaranty for any reason, other
than the satisfaction in full of all Obligations or release thereof, shall
cease to be in full force and effect (other than in accordance with its terms)
or shall be declared to be null and void or any Guarantor Subsidiary shall
repudiate its obligations thereunder, (ii)  this Agreement or any
Collateral Document ceases to be in full force and effect (other than by reason
of a release of Collateral in accordance with the terms hereof or thereof or
the satisfaction in full of the Obligations in accordance with the terms
hereof) or shall be declared null and void, or

 

78

 

Collateral
Agent shall not have or shall cease to have a valid and perfected Lien in any
Collateral with a fair market value greater than $1,000,000 purported to be
covered by the Collateral Documents with the priority required by the relevant
Collateral Document, in each case for any reason other than the failure of
Collateral Agent or any Secured Party to take any action within its control, or
(iii)  any Credit Party shall contest the validity or enforceability of
any Credit Document in writing or deny in writing that it has any further
liability, including with respect to future advances by Lenders, under any
Credit Document to which it is a party or shall contest the validity or
perfection of any Lien in any Collateral purported to be covered by the
Collateral Documents;

 

THEN,
(1)  upon the occurrence of any Event of Default described in
Section 8.1(f)  or 8.1(g) , automatically, and (2)  upon
the occurrence of any other Event of Default, at the request of (or with the
consent of) Requisite Lenders, upon notice to Company by Administrative Agent,
(A) the Delayed Draw Term Loan Commitments, if any, of each Lender having such
Delayed Draw Term Loan Commitments shall immediately terminate; (B) each of the
following shall immediately become due and payable, in each case without
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by each Credit Party: (I) the unpaid principal
amount of and accrued interest on the Loans and (II) all other Obligations; and
(C) Collateral Agent may enforce any and all Liens and security interests
created pursuant to Collateral Documents.

 

8.2.         Cure Right. Notwithstanding
anything to the contrary contained in this Article VIII, in the event that
Company fails to comply with the requirements of any covenant set forth in
Section 6.8 (a) or (b) as of the end of any Fiscal Quarter,
Company shall have the right (the “Cure Right”)
(at any time during such Fiscal Quarter or thereafter until the date that is 10
days after the date the certificate calculating such financial covenants is
required to be delivered pursuant to Section 5.1(d)) to issue Capital
Stock for cash or otherwise receive cash contributions to the common equity of
Company, and thereupon such financial covenants shall be recalculated giving
pro forma effect to the following: (i) Consolidated Adjusted EBITDA shall
be increased solely for purposes of determining compliance with Sections
6.8(a) and (b) as of the end of such Fiscal Quarter and applicable
subsequent periods that include such Fiscal Quarter by an amount equal to the
Cash proceeds (net of any discounts or commissions and other reasonable costs
and expenses associated therewith, including reasonable legal fees and
expenses) from such Capital Stock issuance or cash contribution (the “Cure Amount”) and (ii)  if, after giving effect to the
foregoing recalculations (but not, for the avoidance doubt, taking into account
any repayment of Indebtedness in connection therewith), the requirements of all
such financial covenants shall be satisfied, then the requirements of such
financial covenants shall be deemed satisfied as of the relevant date of
determination with the same effect as though there had been no failure to
comply therewith at such date, and the applicable breach or default of such
financial covenants that had occurred shall be deemed cured for the purposes of
this Agreement. Notwithstanding anything herein to the contrary, (A) in each
consecutive four fiscal quarter period there shall be at least two Fiscal
Quarters in which the Cure Right is not exercised, (B) the Cure Amount shall be
no greater than the amount required for purposes of complying with such
financial covenants as of the end of the relevant Fiscal Quarter, (C) Company
may exercise its Cure Right hereunder no more than three times during the term
of this Agreement, (D) the aggregate Cure Amount of all Cure Rights exercised
hereunder shall not exceed $20,000,000 and (E) upon Administrative Agent’s
receipt of a notice from Company that Company intends to exercise the Cure
Right, until the 10th day following date of delivery of the certificate under
Section 5.1(d) , none of Administrative Agent or any Lender shall
exercise the right to accelerate the Loans or terminate the Commitments and
none of Administrative Agent, Collateral Agent or any other Lender or Secured
Party shall exercise any right to foreclose on or take possession of the Collateral
solely on the basis of an Event of Default having occurred and being continuing
under Section 6.8(a) or (b).

 

79

 

SECTION 9.         AGENTS

 

9.1.         Appointment of Agents. GSCP
is hereby appointed Syndication Agent hereunder, and each Lender hereby
authorizes Syndication Agent to act as its agent in accordance with the terms
hereof and the other Credit Documents. GSCP is hereby appointed Administrative
Agent hereunder and under the other Credit Documents and each Lender hereby
authorizes Administrative Agent to act as its agent in accordance with the
terms hereof and the other Credit Documents. Subject to Section 9.2 and
9.3(b), each Agent hereby agrees to act upon the express conditions contained
herein and the other Credit Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Agents and Lenders and no Credit
Party shall have any rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties hereunder, each
Agent shall act solely as an agent of Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company or any of its Subsidiaries. Syndication Agent,
without consent of or notice to any party hereto, may assign any and all of its
rights or obligations hereunder to any of its Affiliates. As of the Closing
Date, GSCP, in its capacity as Syndication Agent, shall not have any
obligations but shall be entitled to all benefits of this Section 9.

 

9.2.         Powers and Duties. Each
Lender irrevocably authorizes each Agent to take such action on such Lender’s
behalf and to exercise such powers, rights and remedies hereunder and under the
other Credit Documents as are specifically delegated or granted to such Agent
by the terms hereof and thereof, together with such powers, rights and remedies
as are reasonably incidental thereto. Each Agent shall have only those duties
and responsibilities that are expressly specified herein and the other Credit
Documents. Each Agent may exercise such powers, rights and remedies and perform
such duties by or through its Related Parties, agents, sub-agents, affiliates
or employees. The exculpatory provisions of this Agreement shall apply to any
such agent, Related Parties, sub-agents, affiliates and employees of any Agent
and any such agent or sub-agent, and shall apply to their respective activities
in connection with the activities of such Agent. No Agent shall have, by reason
hereof or any of the other Credit Documents, a fiduciary relationship in
respect of any Lender, regardless of whether a Default exists; and nothing
herein or any of the other Credit Documents, expressed or implied, is intended
to or shall be so construed as to impose upon any Agent any obligations or
discretionary duties in respect hereof or any of the other Credit Documents
except as expressly set forth herein or therein. No Agent shall be required to
take any action that, in its opinion or the opinion of its counsel, may expose
such Agent or any of its Related Party to liability or that is contrary to any
Credit Document or applicable law.

 

9.3.         General Immunity.

 

(a)           No
Responsibility for Certain Matters. No Agent or any Related Party shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any
other documents furnished or made by any Agent to Lenders or by or on behalf of
any Credit Party to any Agent or any Lender in connection with the Credit
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of any Credit Party or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Credit
Documents or as to the use of the proceeds of the Loans or as to the existence
or possible existence of any Event of Default or Default or to make any
disclosures with respect to the foregoing except as expressly set forth in the
Credit Documents. Anything contained herein to the contrary notwithstanding,
Administrative Agent shall not have any liability arising from confirmations of
the amount of outstanding Loans, except to the extent it would be liable
therefor pursuant to section 9.3(b). No Agent shall be required to take any
action that, in

 

80

 

its
opinion or the opinion of its counsel, may expose such Agent to liability or
that is contrary to any Credit Document or applicable law.

 

(b)           Exculpatory
Provisions. No Agent nor any of its Related Parties shall be liable to
Lenders for any action taken or omitted by any Agent under or in connection
with any of the Credit Documents except to the extent caused by such Agent’s
gross negligence, willful misconduct or bad faith as determined by a court of
competent jurisdiction by a final and nonappealable judgment. Each Agent may at
any time request instructions from Requisite Lenders or all affected Lenders
with respect to any actions or approvals, which by the terms of this Agreement
or any of the Credit Documents, such Agent is permitted or required to take or
to grant. Each Agent shall be entitled to refrain from any act or the taking of
any action (including the failure to take an action) in connection herewith or
any of the other Credit Documents or from the exercise of any power, discretion
or authority vested in it hereunder or thereunder unless and until such Agent
shall have received instructions in respect thereof from Requisite Lenders (or
such other Lenders as may be required to give such instructions under
Section 10.5) and, upon receipt of such instructions from Requisite Lenders
(or such other Lenders, as the case may be), such Agent shall be entitled to
act or (where so instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions. Without
prejudice to the generality of the foregoing, (i) each Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii)  no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or (where so instructed) refraining from acting hereunder
or any of the other Credit Documents in accordance with the instructions of
Requisite Lenders (or such other Lenders as may be required to give such
instructions under Section 10.5).

 

9.4.         Agents Entitled to Act as Lender. The
agency hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, any Agent in its individual
capacity as a Lender hereunder. With respect to its participation in the Loans,
each Agent shall have the same rights and powers hereunder as any other Lender
and may exercise the same as if it were not performing the duties and functions
delegated to it hereunder, and the term “Lender” shall, unless the context
clearly otherwise indicates, include each Agent in its individual capacity. Any
Agent and its Affiliates may accept deposits from, lend money to, own
securities of, and generally engage in any kind of banking, trust, financial
advisory or other business with Company or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and other
consideration from Company for services in connection herewith and otherwise
without having to account for the same to Lenders.

 

9.5.         Lenders’ Representations, Warranties
and Acknowledgment. Each Lender represents and
warrants that it has made its own independent investigation of the financial
condition and affairs of Company and its Subsidiaries in connection with Credit
Extensions hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of Company and its Subsidiaries. No Agent
shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of
Lenders, except as proved herein, or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession before
the making of the Loans or at any time or times thereafter, and no Agent shall
have any responsibility with respect to the accuracy of or the completeness of
any information provided to Lenders.

 

9.6.         Right to Indemnity. Each
Lender, in proportion to its Pro Rata Share, severally agrees to indemnify each
Agent and each of its Related Parties, to the extent that such Agent or any of
its Related Parties shall not have been reimbursed by any Credit Party under
Section 10.2 hereunder of, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,

 

81

 

expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as such Agent in any way relating to or arising out of this Agreement
or the other Credit Documents provided, no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent’s gross negligence, willful misconduct or bad faith as determined by a
court of competent jurisdiction by a final and nonappealable judgment. If any
indemnity furnished to any Agent for any purpose shall, in the opinion of such
Agent, be insufficient or become impaired, such Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished; provided, in no event shall this
sentence require any Lender to indemnify any Agent against any liability,
obligation, loss, damage, penalty, action, judgment, suit, cost, expense or
disbursement in excess of such Lender’s Pro Rata Share thereof; and provided,
further, this sentence shall not be deemed to require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement described in the proviso
in the immediately preceding sentence.

 

9.7.         Successor Administrative Agent. Administrative
Agent may resign at any time by giving thirty days’ prior written notice
thereof to Lenders and Company, and Administrative Agent may be removed at any
time with or without cause by an instrument or concurrent instruments in
writing delivered to Company and Administrative Agent and signed by Requisite
Lenders. Upon any such notice of resignation or any such removal, Requisite
Lenders shall have the right to appoint a successor Administrative Agent, upon
five Business Days’ notice to Company, and Company shall have the right to consent
to such successor Administrative Agent, such consent not to be unreasonably
withheld or delayed. If no such successor shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation or is
removed, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent meeting the qualifications set forth
above; provided, that if the Administrative Agent shall notify Company
and the Lenders that no qualifying Person has accepted such appointment, then
such resignation shall nonetheless become effective in accordance with such
notice and (1)  the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Credit Documents
(except that in the case of any collateral security held by the Administrative
Agent on behalf of the Lenders or the Agent under any of the Credit Documents,
the retiring Administrative Agent shall continue to hold such collateral
security until such time as a successor Administrative Agent is appointed) and
(2)  all payments, communications and determinations provided to, or made
by, or through the Administrative Agent shall instead be made by or to each
Lender, until such time as the Requisite Lenders appoint a successor
Administrative Agent as provided for above in this paragraph.

 

Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
under the Collateral Documents, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of
the successor Administrative Agent under the Credit Documents, and (ii) 
execute and deliver to such successor Administrative Agent such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Administrative
Agent of the security interests created under the Collateral Documents,
whereupon such retiring or removed Administrative Agent shall be discharged
from its duties and obligations hereunder (if not already discharged therefrom
as provided in the paragraph above). After any retiring or removed

 

82

 

Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.

 

Any
resignation or removal by GSCP as Administrative Agent pursuant to this
Section 9.7 shall also constitute its resignation as Collateral Agent.
Upon discharge of the Administrative Agent’s duties and obligations as set
forth above, (a) the retiring or removed Collateral Agent shall be
discharged from all of its respective duties and obligations hereunder or under
the other Credit Documents, and (b) any such successor Collateral Agent
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring or removed Collateral Agent.

 

9.8.         Collateral Documents and Guaranty.

 

(a)           Agents
under Collateral Documents and Guaranty. Each Lender hereby further
authorizes Administrative Agent or Collateral Agent, as applicable, on behalf
of and for the benefit of Lenders, to be the agent for and representative of
the Secured Parties with respect to the Guaranty, the Collateral and the
Collateral Documents; provided that neither Administrative Agent nor
Collateral Agent shall owe any fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or any other obligation whatsoever to any holder of
Obligations with respect to any Hedge Agreement. Each Lender, by its signature
hereto or by its signature to an Assignment Agreement, consents and agrees to
all terms of the Collateral Documents as such agreements may be in effect or
may be amended from time to time in accordance with their terms (including,
without limitation, the Working Capital Facility Intercreditor Agreement) and
agrees to be bound by such terms as they apply to the Collateral Agent acting
on behalf of such Lender. Subject to Section 10.5, without further written
consent or authorization from Lenders, Administrative Agent or Collateral
Agent, as applicable, may execute any documents or instruments necessary to
(i) in connection with a sale or disposition of assets permitted by this
Agreement, release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets or to which Requisite Lenders
(or such other Lenders as may be required to give such consent under
Section 10.5) have otherwise consented or (ii)  release any Guarantor
Subsidiary from the Guaranty pursuant to Section 7.12 or with respect to
which Requisite Lenders (or such other Lenders as may be required to give such
consent under Section 10.5) have otherwise consented.

 

(b)           Right
to Realize on Collateral and Enforce Guaranty. Anything contained in any of
the Credit Documents to the contrary notwithstanding, Company, Administrative
Agent, Collateral Agent and each Secured Party hereby agree that (i) no
Secured Party shall have any right individually to realize upon any of the
Collateral or to enforce the Guaranty, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Administrative
Agent, on behalf of the Secured Parties in accordance with the terms hereof and
all powers, rights and remedies under the Collateral Documents may be exercised
solely by Collateral Agent in accordance with the terms hereof, and (ii) 
in the event of a foreclosure by Collateral Agent on any of the Collateral
pursuant to a public or private sale or other disposition, Collateral Agent or
any Lender may be the purchaser or licensor of any or all of such Collateral at
any such sale or other disposition and Collateral Agent, as agent for and
representative of Secured Parties (but not any Lender or Lenders in its or
their respective individual capacities unless Requisite Lenders shall otherwise
agree in writing), shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the
Obligations as a credit on account of the purchase price for any collateral
payable by Collateral Agent at such sale or other disposition.

 

(c)           Rights
in Collateral and Intercreditor Agreements. The Company, Administrative
Agent, Collateral Agent and each Lender hereto acknowledge and agree that their

 

83

 

respective
rights in the Collateral as established under each Credit Document are subject
to the Working Capital Intercreditor Agreement.

 

(d)           Rights
under Hedge Agreements. No Hedge Agreement will create (or be deemed to
create) in favor of any Lender Counterparty that is a party thereto any rights
in connection with the management or release of any Collateral or of the
obligations of any Guarantor under the Credit Documents except as expressly
provided in Section 10.5(c)(v)  of this Agreement and
Section 7.2 of the Pledge and Security Agreement.

 

SECTION 10.       MISCELLANEOUS

 

10.1.       Notices. (a)  Notices Generally. Any notice or other
communication herein required or permitted to be given to a Credit Party,
Syndication Agent, Collateral Agent or Administrative Agent shall be sent to
such Person’s address as set forth on Appendix B or in the other relevant
Credit Document, and in the case of any Lender, the address as indicated on
Appendix B or otherwise indicated to Administrative Agent in writing. Except as
otherwise set forth in paragraph (b) below, each notice hereunder shall be
in writing and may be personally served, telexed or sent by telefacsimile or
United States mail or courier service and shall be deemed to have been given
when delivered in person or by courier service and signed for against receipt
thereof, upon receipt of telefacsimile or telex, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; provided, no notice to any Agent shall be effective until
received by such Agent; provided  further, any such notice or other
communication shall at the request of Administrative Agent be provided to any
subagent appointed pursuant to Section 9.3(c) hereto as designated by
Administrative Agent from time to time.

 

(b)           Electronic
Communications.

 

(i)            Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites, including the Platform)
pursuant to procedures approved by Administrative Agent, provided that
the foregoing shall not apply to notices to any Lender pursuant to
Section 2 if such Lender has notified Administrative Agent that it is
incapable of receiving notices under such Section by electronic
communication. Administrative Agent or Company may, in its discretion, agree to
accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that
approval of such procedures may be limited to particular notices or
communications. Unless 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 acknowledgement from the
intended recipient (such as by the “return receipt requested” function, as
available, return e-mail or other written acknowledgement), provided
that if such notice or other communication is not sent during the normal
business hours of the recipient, such notice or communication shall be deemed
to have been sent at the opening of business on the next Business Day for the
recipient, 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.

 

(ii)           Each of the Credit Parties
understands that the distribution of material through an electronic medium is
not necessarily secure and that there are confidentiality and other risks
associated with such distribution and agrees and assumes the risks associated
with such electronic distribution, except to the extent caused by the willful
misconduct, gross negligence or bad faith of Administrative Agent.

 

84

 

(iii)          The Platform and any Approved
Electronic Communications are provided “as is” and “as available”. None of the
Agents or any of their respective officers, directors, employees, agents,
advisors or representatives (the “Agent Affiliates”)
warrant the accuracy, adequacy, or completeness of the Approved Electronic
Communications or the Platform and each expressly disclaims liability for
errors or omissions in the Platform and the Approved Electronic Communications.
No warranty of any kind, express, implied or statutory, including any warranty
of merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects is made by the Agent
Affiliates in connection with the Platform or the Approved Electronic
Communications.

 

(iv)          Each of the Credit Parties, the
Lenders and the Agents agree that Administrative Agent may, but shall not be
obligated to, store any Approved Electronic Communications on the Platform in
accordance with Administrative Agent’s customary document retention procedures
and policies.

 

10.2.       Expenses.

 

(a)           Company
agrees to pay promptly (i) all the actual and reasonable costs and
expenses of preparation of the Credit Documents and any consents, amendments,
waivers or other modifications thereto (subject to clause (iii below);
(ii)  all the costs of furnishing all opinions by counsel for Company and
the other Credit Parties; (iii)  the reasonable fees, expenses and disbursements
of counsel to the Administrative Agent (provided that such fees, expenses and
disbursements shall be limited to those of a single law firm plus such local
counsel (not more than one per jurisdiction) as Agent shall deem reasonably
necessary), in connection with the negotiation, preparation, execution and
administration of the Credit Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by
Company; (iv)  all the actual reasonable costs and expenses of creating
and perfecting Liens in favor of Collateral Agent, for the benefit of Lenders
pursuant hereto, including filing and recording fees and expenses, Other Taxes,
search fees, title insurance premiums and reasonable fees, expenses and disbursements
of a single law firm acting as counsel to the Administrative Agent, and of
counsel to Company and the other Credit Parties providing any opinions that
Administrative Agent or Requisite Lenders may request in respect of the
Collateral or the Liens created pursuant to the Collateral Documents; (v) 
all the actual reasonable costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any appraisers, accountants,
consultants, advisors and agents employed or retained by Collateral Agent and
its counsel) in connection with the custody or preservation of any of the
Collateral following the occurrence of an Event of Default; (vi)  all
other actual and reasonable costs and expenses incurred by Administrative Agent
in connection with the negotiation, preparation and execution of any consents,
amendments, waivers or other modifications to any Credit Document; and
(vii)  after the occurrence of an Event of Default, all costs and
expenses, including reasonable attorneys’ fees and costs of settlement,
incurred by Administrative Agent and each Lender in enforcing any Obligations
of or in collecting any payments due from any Credit Party hereunder or under
the other Credit Documents by reason of such Event of Default (including in connection
with the sale, lease or license of, collection from, or other realization upon
any of the Collateral or the enforcement of the Guaranty) or in connection with
any refinancing or restructuring of the credit arrangements provided hereunder
in the nature of a “work out” or pursuant to any insolvency or bankruptcy cases
or proceedings.

 

(b)           Reimbursement.
To the extent that Company for any reason fails to indefeasibly pay any amount
required under this Section 10 to be paid by it to any Agent (or any sub-agent
thereof, or any Related Party of any of the foregoing), each Lender severally
agrees to pay to such Agent (or any such sub-agent) or such Related Party, as
the case may be, such Lender’s Pro Rata Share (determined as of the time that
the applicable unreimbursed expense or indemnity payment is sought) of such
unpaid

 

85

 

amount,
provided, that the reimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against any Agent (or any such sub-agent) in its capacity as such, or
against any Related Party of any of the foregoing acting for such Agent (or any
such sub-agent) in connection with such capacity). All amounts due under this Section 10.2(b) shall
be paid promptly after demand therefor.

 

10.3.       Indemnity.

 

(a)           In
addition to the payment of expenses pursuant to Section 10.2, whether or
not the transactions contemplated hereby shall be consummated, each Credit
Party agrees to defend (subject to Indemnitees’ selection of counsel),
indemnify, pay and hold harmless, each Agent and each Lender and each of their
Related Parties (each, an “Indemnitee”),
from and against any and all Indemnified Liabilities; provided, no
Credit Party shall have any obligation to any Indemnitee hereunder with respect
to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
from the breach of contract, gross negligence, willful misconduct or bad faith
of that Indemnitee as determined by a court of competent jurisdiction by a
final and nonappealable judgment; provided  further that no Credit
Party shall have any obligation to any Indemnitee hereunder with respect to Tax
matters, which shall be governed by Section 2.20. To the extent that the
undertakings to defend, indemnify, pay and hold harmless set forth in this
Section 10.3 may be unenforceable in whole or in part because they are
violative of any law or public policy, the applicable Credit Party shall,
subject to the proviso in the preceding sentence, contribute the maximum
portion that it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by Indemnitees
or any of them.

 

(b)           To
the extent permitted by applicable law, no Credit Party shall assert, and each
Credit Party hereby waives, any claim against Lenders, Agents and their
respective Related Parties, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
(whether or not the claim therefor is based on contract, tort or duty imposed
by any applicable legal requirement) arising out of, in connection with,
arising out of, as a result of, or in any way related to, this Agreement or any
Credit Document or any agreement or instrument contemplated hereby or thereby
or referred to herein or therein, the transactions contemplated hereby or
thereby, any Loan or the use of the proceeds thereof or any act or omission or
event occurring in connection therewith, and Company hereby waives, releases
and agrees not to sue upon any such claim or any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.

 

10.4.       Set-Off. In
addition to any rights now or hereafter granted under applicable law and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default each Lender and each Agent thereof is
hereby authorized by each Credit Party at any time or from time to time subject
to the consent of Administrative Agent (such consent not to be unreasonably
withheld or delayed), without prior notice to any Credit Party or to any other
Person (other than Administrative Agent), any such prior notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by such Lender or such Agent
to or for the credit or the account of any Credit Party against and on account
of the obligations and liabilities of any Credit Party to such Lender of such
Agent hereunder, irrespective of whether or not (a) such Lender or such
Agent shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Section 2 and although such obligations and
liabilities, or any of them, may be contingent or unmatured.

 

86

 

10.5.       Amendments and Waivers.

 

(a)           Requisite
Lenders’ Consent. Subject to the additional requirements of Sections
10.5(b) and 10.5(c), no amendment, modification, termination or waiver of
any provision of the Credit Documents, or consent to any departure by any
Credit Party therefrom, shall in any event be effective without the written
concurrence of the Requisite Lenders; provided that Administrative Agent
may, with the consent of Company only, amend, modify or supplement this
Agreement to cure any ambiguity, omission, defect or inconsistency, so long as
such amendment, modification or supplement does not adversely affect the rights
of any Lender.

 

(b)           Affected
Lenders’ Consent. Without the written consent of each Lender affected
thereby (other than a Defaulting Lender), no amendment, modification,
termination, or consent shall be effective if the effect thereof would:

 

(i)            extend the scheduled final maturity
of any Loan or Note;

 

(ii)           waive, reduce or postpone any
scheduled repayment (but not prepayment), or alter the required application of
any prepayment pursuant to Section 2.15, as applicable;

 

(iii)          reduce the principal of or the rate of
interest on any Loan (other than any waiver of any increase in the interest
rate applicable to any Loan pursuant to Section 2.10) or any fee or
premium payable hereunder;

 

(iv)          extend the time for payment of any
such interest or fees;

 

(v)           amend, modify, terminate or waive any
provision of this Section 10.5(b), Section 10.5(c) or any other
provision of this Agreement that expressly provides that the consent of all
Lenders is required;

 

(vi)          change the percentage of the
outstanding principal amount of the Loans that is required for the Lenders or
any of them to take any action hereunder or amend the definition of “Requisite Lenders” or “Pro Rata Share”,
or modify the amount of the Commitment of any Lender;

 

(vii)         release all or substantially all of the
Collateral or any material Guarantor Subsidiary from the Guaranty, or
subordinate any of the Collateral Agent’s Liens, in each case, except as
expressly provided in the Credit Documents; or

 

(viii)        consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under any Credit
Document, except as provided in Section 10.6.

 

(c)           Other
Consents. No amendment, modification, termination or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall:

 

(i)            increase any Delayed Draw Term Loan
Commitment of any Lender over the amount thereof then in effect without the
consent of such Lender; provided, no amendment, modification or waiver
of any condition precedent, covenant, Default or Event of Default shall
constitute an increase in any Delayed Draw Term Loan Commitment of any Lender;

 

(ii)           amend, modify, terminate or waive any
provision of Section 9 as the same applies to any Agent, or any other
provision hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent; or

 

87

 

(iii)          amend, modify or waive this Agreement
or the Pledge and Security Agreement so as to alter the ratable treatment of
Obligations arising under the Credit Documents and Obligations arising under
Hedge Agreements or the definition of “Lender Counterparty,”
“Hedge Agreement,” “Obligations,”
or “Secured Obligations” in each case in a
manner adverse to any Lender Counterparty with Obligations then outstanding
without the written consent of any such Lender Counterparty.

 

(d)           Execution
of Amendments, etc. Administrative Agent may, but shall have no obligation
to, with the concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 10.5 shall be binding
upon each Lender at the time outstanding, each future Lender and, if signed by
a Credit Party, on such Credit Party.

 

10.6.       Successors and Assigns; Participations.

 

(a)           Generally.
This Agreement shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and assigns of Lenders. No Credit Party’s rights or obligations
hereunder nor any interest therein may be assigned or delegated by any Credit
Party without the prior written consent of all Lenders. Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, Affiliates
of each of the Agents and Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.

 

(b)           Register.
Company, Administrative Agent and Lenders shall deem and treat the Persons
listed as Lenders in the Register as the holders and owners of the
corresponding Commitments and Loans listed therein for all purposes hereof,
and, except as provided in Section 10.6(i), no assignment or transfer of
any such Commitment or Loan shall be effective, in each case, unless and until
an Assignment Agreement effecting the assignment or transfer thereof, together
with the required forms and certificates regarding Tax matters and any fees
payable in connection with such assignment, shall have been delivered to and
accepted by Administrative Agent and recorded in the Register as provided in
Section 10.6(e) . Prior to such recordation, all amounts owed with
respect to the applicable Commitment or Loan shall be owed to the Lender listed
in the Register as the owner thereof, and any request, authority or consent of
any Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and binding
on any subsequent holder, assignee or transferee of the corresponding
Commitments or Loans.

 

(c)           Right
to Assign. Each Lender shall have the right at any time to sell, assign or
transfer all or a portion of its rights and obligations under this Agreement,
including all or a portion of its Loans owing to it or other Obligation (provided,
however, that pro rata assignments shall be required and each such
assignment shall be of a uniform, and not varying, percentage of all rights and
obligations under and in respect of any applicable Loan and any related
Commitment) (i) to any Person meeting the criteria of the definition of
“Eligible Assignee” upon the giving of notice to Company and Administrative
Agent by delivery of the fully executed Assignment Agreement; and (ii)  to
any other Person consented to by each of Company and Administrative Agent (such
consent not to be (x)  unreasonably withheld or delayed or, (y)  in
the case of Company, required at any time an Event of Default shall have
occurred and then be continuing); provided, further, each such
assignment (other than to any Person meeting the criteria of clause (i) of
the definition of “Eligible Assignee”) shall be in an aggregate amount of not
less

 

88

 

than
$1,000,000 (or such lesser amount as may be agreed to by Company and
Administrative Agent or as shall constitute the aggregate amount of the
Commitments or Loans of the assigning Lender).

 

(d)           Mechanics.
Except as provided in Section 10.6(i), the assigning Lender and the
assignee to each such assignment thereof shall execute and deliver to the
Administrative Agent an Assignment Agreement (such Assignment Agreement to be
(A) electronically executed and delivered to the Administrative Agent via an
electronic settlement system then acceptable to the Administrative Agent, which
shall initially be the settlement system of ClearPar, LLC, or (B) manually
executed and delivered, in either case without any additional processing or
recordation fees) and (ii)  such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding matters as
the assignee, if it shall not be a Lender immediately prior to the assignment,
under such Assignment Agreement may be required to deliver to Administrative
Agent pursuant to Section 2.20(c).

 

(e)           Notice
of Assignment. Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 10.6(d)  if applicable (and any forms, certificates or other
evidence required by this Agreement in connection therewith), Administrative
Agent shall record the information contained in such Assignment Agreement in
the Register and shall maintain a copy of such Assignment Agreement.

 

(f)            Representations
and Warranties of Assignee. Each Lender, upon execution and delivery hereof
or upon executing and delivering an Assignment Agreement, as the case may be,
represents and warrants as of the Closing Date or as of the applicable
Effective Date (as defined in the applicable Assignment Agreement) that
(i) it is an Eligible Assignee; (ii)  it has experience and expertise
in the making of or investing in commitments or 
loans such as the applicable Commitments or Loans, as the case may be;
and (iii)  it will make or invest in, as the case may be, its Commitments
or Loans for its own account in the ordinary course of its business and without
a view to distribution of such Commitments or Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 10.6, the
disposition of such Commitments or Loans or any interests therein shall at all
times remain within its exclusive control).

 

(g)           Effect
of Assignment. Subject to the terms and conditions of this
Section 10.6, as of the “Effective Date” specified in the applicable
Assignment Agreement: (i) the assignee thereunder shall have the rights
and obligations of a “Lender” hereunder to the extent such rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement and shall thereafter be a party hereto and a “Lender” for all
purposes hereof; (ii)  the assigning Lender thereunder shall, to the
extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 10.8) and be
released from its obligations hereunder (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender’s rights
and obligations hereunder, such Lender shall cease to be a party hereto; provided,
anything contained in any of the Credit Documents to the contrary
notwithstanding, such assigning Lender shall continue to be entitled to the
benefit of all indemnities hereunder as specified herein with respect to
matters arising out of the prior involvement of such assigning Lender as a
Lender hereunder); and (iii)  if any such assignment occurs after the
issuance of any Note hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as practicable,
surrender its applicable Notes to Administrative Agent for cancellation, and
thereupon Company shall issue and deliver new Notes, if so requested by the
assignee and/or assigning Lender, to such assignee and/or to such assigning Lender,
with appropriate insertions, to reflect the outstanding Loans of the assignee
and/or the assigning Lender. Except as provided in clause (i) below, any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with clauses (c) through (g)  shall be
treated for purposes of this

 

89

 

Agreement
as a sale by such Lender of a participation in such rights and obligations in
accordance with clause (h).

 

(h)           Participations.
(i)  Each Lender shall have the right at any time to sell one or more
participations to any Person (other than Company, any of its Subsidiaries or
any of its Affiliates) in all or any part of its Loans or in any other
Obligation.

 

(i)            The holder of any such
participation, other than an Affiliate or Related Fund of the Lender granting
such participation, shall not be entitled to require such Lender to take or
omit to take any action hereunder except with respect to any amendment,
modification or waiver that would (i) extend the final scheduled maturity
of any Loan or Note in which such participant is participating, or reduce the
rate or extend the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant’s participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (ii)  consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement or (iii)  release all or substantially all of the
Collateral under the Collateral Documents (except as expressly provided in the
Credit Documents) supporting the Loans hereunder in which such participant is
participating.

 

(ii)           Company agrees that each participant
shall be entitled to the benefits of Sections 2.18(c), 2.19 and 2.20 to the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (c) of this Section; provided, (x)  a
participant shall not be entitled to receive any greater payment under
Section 2.19 or 2.20 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such participant, unless the
sale of the participation to such participant is made with Company’s prior
written consent and (y)  a participant that would be a Non-US Lender if it
were a Lender shall not be entitled to the benefits of Section 2.20 unless
Company is notified of the participation sold to such participant and such
participant agrees, for the benefit of Company, to comply with
Section 2.20 as though it were a Lender; provided  further
that, except as specifically set forth in clauses (x)  and (y)  of
this sentence, nothing herein shall require any notice to Company or any other
Person in connection with the sale of any participation. To the extent
permitted by law, each participant also shall be entitled to the benefits of
Section 10.4 as though it were a Lender, provided such Participant agrees
to be subject to Section 2.17 as though it were a Lender.

 

(i)            Certain
Other Assignments and Participations. In addition to any other assignment
or participation permitted pursuant to this Section 10.6, (i) any
Lender may assign and/or pledge all or any portion of its Loans, the other
Obligations owed by or to such Lender, and its Notes, if any, to secure
obligations of such Lender to any other Person (including, without limitation,
any Federal Reserve Bank or any Federal Home Loan Bank) as collateral security
(including, without limitation, pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank); provided that no Lender, as between Company
and such Lender, shall be relieved of any of its obligations hereunder as a
result of any such assignment and pledge, and provided, further,
that in no event shall the applicable Federal Reserve Bank or Federal Home Loan
Bank, or other pledgee or trustee be considered to be a “Lender” or be entitled
to require the assigning Lender to take or omit to take any action hereunder
and (ii)  any Lender may assign any or all of its rights and obligations
under the Credit Documents to an Affiliate of such Lender or a Related Fund

 

90

 

of
such Lender without delivering an Assignment Agreement to Company or the
Administrative Agent or the payment of any processing fee or the giving of the
notice called for by Section 10.6(c)(i); provided, that (x) 
the Credit Parties and the Agents shall continue to deal solely and directly
with such assigning Lender in connection with the interest so assigned unless such
assignee is an Eligible Assignee and until such Lender and such Eligible
Assignee shall have executed and delivered an Assignment Agreement to Company
and the Administrative Agent for recordation, (y)  the failure of such
assigning Lender to deliver an Assignment Agreement to Company, the
Administrative Agent or any other Person shall not affect the legality,
validity or binding effect of such assignment and (z) the assigning Lender
shall maintain a register on behalf of Company comparable to the Register which
may be accessed upon reasonable notice and at such reasonable times during
normal business hours and as often as may reasonably be requested. For the
avoidance of doubt, any assignment contemplated by subclause (ii) above
that is effected by delivery of an Assignment Agreement shall be subject to all
other requirements set forth in this Section 10.6 for such assignment to
be effective. Nothing in this Agreement or any other Credit Document shall
prevent or prohibit a Lender from assigning or transferring all of a portion of
its rights and delegating all or a portion of its obligations under this
Agreement and the other Credit Documents to any lender to or financing source
of such Lender; provided, however, that no lender to or financing
source of such Lender shall be considered a Lender under this Agreement or any
other Credit Document, and such Lender shall continue to be liable and
obligated in all respects as a Lender under this Agreement and the other Credit
Documents (and the Agent, the Lenders and Company shall only be required to
communicate with, and otherwise deal with, such Lender as a Lender hereunder
and under the other Credit Documents), unless such assignee or transferee is an
Eligible Assignee and until such Eligible Assignee executes an Assignment
Agreement and thereby becomes a Lender hereunder and under the other Credit
Documents in accordance with the provisions of this Section 10.6.

 

10.7.       Independence of Covenants. All
covenants hereunder shall be given independent effect so that if a particular
action or condition is not permitted by any of such covenants, the fact that it
would be permitted by an exception to, or would otherwise be within the
limitations of, another covenant shall not avoid the occurrence of a Default or
an Event of Default if such action is taken or condition exists.

 

10.8.       Survival of Representations, Warranties
and Agreements. All representations, warranties and
agreements made herein shall survive the execution and delivery hereof and the
making of any Credit Extension. Notwithstanding anything herein or implied by
law to the contrary, the agreements of each Credit Party set forth in Sections
2.18(c), 2.19, 2.20, 7.11, 10.2, 10.3 and 10.4 and the agreements of Lenders
set forth in Section 2.17 and Section 9 shall survive the payment of
the Loans and the termination hereof.

 

10.9.       No Waiver; Remedies Cumulative. No
failure or delay on the part of any Agent or any Lender in the exercise of any
power, right or privilege hereunder or under any other Credit Document shall
impair such power, right or privilege or be construed to be a waiver of any
default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof
or of any other power, right or privilege. The rights, powers and remedies
given to each Agent and each Lender hereby are cumulative and shall be in
addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Credit Documents.
Any forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.

 

10.10.     Marshalling; Payments Set Aside. Neither
any Agent nor any Lender shall be under any obligation to marshal any assets in
favor of any Credit Party or any other Person or against or in payment of any
or all of the Obligations. To the extent that any Credit Party makes a payment
or payments to Administrative Agent or Lenders (or to Administrative Agent, on
behalf of Lenders), or

 

91

 

Administrative Agent or Lenders enforce any security interests or
exercise their rights of setoff, and such payment or payments or the proceeds
of such enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.

 

10.11.     Severability. In
case any provision in or obligation hereunder or any Note shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.

 

10.12.     Obligations Several; Independent Nature of
Lenders’ Rights. The obligations of Lenders hereunder
are several and no Lender shall be responsible for the obligations or
Commitment of any other Lender hereunder. Nothing contained herein or in any
other Credit Document, and no action taken by Lenders pursuant hereto or
thereto, shall be deemed to constitute Lenders as a partnership, an
association, a joint venture or any other kind of entity. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
hereof and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.

 

10.13.     Headings. Section headings
herein are included herein for convenience of reference only and shall not
constitute a part hereof for any other purpose or be given any substantive
effect.

 

10.14.     APPLICABLE LAW. THIS AGREEMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

 

10.15.     CONSENT TO JURISDICTION. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO OR ANY
OTHER CREDIT DOCUMENT, OR ANY OF THE OBLIGATIONS, SHALL BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW
YORK. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 10.1; AND (d)  AGREES THAT
SERVICE AS PROVIDED IN CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER SUCH PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; PROVIDED,
THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE
ADMINISTRATIVE AGENT OR COLLATERAL AGENT FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY
OTHER SECURITY FOR THE OBLIGATIONS,

 

92

 

OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
ADMINISTRATIVE AGENT  OR COLLATERAL
AGENT. EACH PARTY AGREES THAT, WITH RESPECT TO SUCH PARTY, SUBSECTIONS
(a) THROUGH (d)  ABOVE SHALL APPLY TO SUCH OTHER JURISDICTION.

 

10.16.     WAIVER OF JURY TRIAL. EACH OF THE PARTIES
HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY
CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE
OTHER CREDIT DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS
BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS
RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE PARTIES HERETO),
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.

 

10.17.     Confidentiality. Each
Agent and each Lender shall hold all non-public information regarding Company
and its Subsidiaries and their businesses identified as such by Company and
obtained by such Lender pursuant to the requirements hereof in accordance with
such Lender’s customary procedures for handling confidential information of
such nature, it being understood and agreed by Company that, in any event, each
Agent and each Lender may make (i) disclosures of such information to
Affiliates and Related Funds of such Lender or Agent and to their respective
agents and advisors (and to other Persons authorized by a Lender or Agent to
organize, present or disseminate such information in connection with
disclosures otherwise made in accordance with this Section 10.17),
(ii)  subject to the prior receipt of appropriate written confidentiality
undertakings, disclosures of such information reasonably required by any bona
fide or potential assignee, transferee or participant in connection with the
contemplated assignment, transfer or participation of any Loans or any
participations therein or by any direct or indirect contractual counterparties
(or the professional advisors thereto) to any swap or derivative transaction
relating to Company and its obligations (provided, such assignees,
transferees, participants, counterparties and advisors are advised of and agree
to be bound by either the provisions of this Section 10.17 or other
provisions at least as restrictive as this Section 10.17), (iii) 
disclosure to any rating agency when required by it, provided, that,
prior to any disclosure, such rating agency shall undertake in writing to
preserve the confidentiality of any confidential information relating to the
Credit Parties received by it from any of the Agents or any Lender, and
(iv)  disclosures required or requested by any Governmental Authority or
representative thereof or by the NAIC or pursuant to legal or judicial

 

93

 

process; provided, unless specifically prohibited by applicable
law or court order, each Lender shall make reasonable efforts to notify Company
of any request by any Governmental Authority or representative thereof (other
than any such request in connection with any examination of the financial
condition or other routine examination of such Lender by such Governmental
Authority) for disclosure of any such non public information prior to
disclosure of such information. In addition, each Agent and each Lender may
disclose the existence of this Agreement and the information about this
Agreement to market data collectors, similar services providers to the lending
industry, and service providers to the Agents and the Lenders in connection
with the administration and management of this Agreement and the other Credit
Documents.

 

10.18.     Usury Savings Clause. Notwithstanding
any other provision herein, the aggregate interest rate charged with respect to
any of the Obligations, including all charges or fees in connection therewith
deemed in the nature of interest under applicable law shall not exceed the
Highest Lawful Rate. If the rate of interest (determined without regard to the
preceding sentence) under this Agreement at any time exceeds the Highest Lawful
Rate, the outstanding amount of the Loans made hereunder shall bear interest at
the Highest Lawful Rate until the total amount of interest due hereunder equals
the amount of interest which would have been due hereunder if the stated rates
of interest set forth in this Agreement had at all times been in effect. In
addition, if when the Loans made hereunder are repaid in full the total
interest due hereunder (taking into account the increase provided for above) is
less than the total amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect, then to the extent permitted by law, Company shall pay to
Administrative Agent an amount equal to the difference between the amount of
interest paid and the amount of interest which would have been paid if the
Highest Lawful Rate had at all times been in effect. Notwithstanding the
foregoing, it is the intention of Lenders and Company to conform strictly to
any applicable usury laws. Accordingly, if any Lender contracts for, charges,
or receives any consideration which constitutes interest in excess of the
Highest Lawful Rate, then any such excess shall be cancelled automatically and,
if previously paid, shall at such Lender’s option be applied to the outstanding
amount of the Loans made hereunder or be refunded to Company.

 

10.19.     Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.

 

10.20.     Effectiveness. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and receipt by Company and Administrative Agent of
written or telephonic notification of such execution and authorization of
delivery thereof.

 

10.21.     Patriot Act. Each
Lender and Administrative Agent (for itself and not on behalf of any Lender)
hereby notifies Company that pursuant to the requirements of the Act, it is
required to obtain, verify and record information that identifies Company,
which information includes the name and address of Company and other
information that will allow such Lender or Administrative Agent, as applicable,
to identify Company in accordance with the Act.

 

10.22.     Electronic Execution of Assignments. The
words “execution,” “signed,” “signature,” and words of like import in any
Assignment Agreement shall be deemed to include electronic signatures or the
keeping of records in electronic form, each of which shall be of the same legal
effect, validity or enforceability as a manually executed signature or the use
of a paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable law, including the Federal Electronic Signatures
in Global and National Commerce Act, the New York State Electronic Signatures
and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.

 

94

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

	
   

  	
  RP SUB No.
  3(R), INC., as a Guarantor Subsidiary

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

	
   

  	
  RP SUB No.
  4(1) , INC., as a Guarantor Subsidiary

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

	
   

  	
  RP SUB No.
  5(D), INC., as a Guarantor Subsidiary

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

	
   

  	
  RP SUB No.
  6(O), INC., as a Guarantor Subsidiary

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

[Signature Page to the Credit and Guarantry
Agreement]

 

 

	
   

  	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.,
 as Administrative Agent and Collateral Agent

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized
  Signatory

  

 

[Signature Page to the Credit and Guarantry
Agreement]

 

APPENDIX A-1

TO CREDIT AGREEMENT

 

Initial Term Loan Commitments

 

	
  Lender

  	
   

  	
  Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Goldman Sachs Credit Partners L.P.

  	
   

  	
  $

  	
  170,000,000

  	
   

  	
  100%

  	
   

  
	
  Total

  	
   

  	
  $

  	
  170,000,000

  	
   

  	
  100%

  	
   

  

 

A-1

 

APPENDIX A-2

TO CREDIT
AGREEMENT

 

Delayed Draw Term Loan Commitments

 

	
  Lender

  	
   

  	
  Delayed Draw Term Loan

  Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Goldman Sachs Credit Partners L.P.

  	
   

  	
  $

  	
  45,000,000.00

  	
   

  	
  100.0%

  	
   

  
	
  Total

  	
   

  	
  $

  	
  45,000,000.00

  	
   

  	
  100%

  	
   

  

 

A-2

 

APPENDIX B

TO CREDIT
AGREEMENT

 

Notice Addresses

 

	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
  110 Allen
  Road

  
	
   

  	
  Liberty
  Corner, NJ 07938

  
	
   

  	
  Attention:

  	
  Bob
  Ferguson, Chief Financial Officer

  
	
   

  	
  Telephone:

  	
  (908)
  580-1200

  
	
   

  	
  Telecopier:

  	
  (908)
  542-9406

  
	
   

  	
  E-mail:

  	
  rferguson@reliantrx.com

  
	
   

  	
   

  
	
  in each
  case, with a copy to:

  
	
   

  	
  Latham &
  Watkins LLP

  
	
   

  	
  5800 Sears
  Tower

  
	
   

  	
  Chicago, IL
  60606

  
	
   

  	
  Attention:

  	
  Michael A.
  Pucker

  
	
   

  	
  Telephone:

  	
  (312)
  876-6518

  
	
   

  	
  Telecopier:

  	
  (312)
  993-9767

  
	
   

  	
  E-mail:

  	
  michael.pucker@lw.com

  
	
   

  
	
  RP SUB NO.
  3(R), INC.

  
	
  RP SUB NO.
  4(I), INC.

  
	
  RP SUB NO.
  5(D), INC.

  
	
  RP SUB NO.
  6(O), INC.

  
	
   

  	
  110 Allen
  Road

  
	
   

  	
  Liberty
  Corner, NJ  07938

  
	
   

  	
  Attention:

  	
  Bob
  Ferguson, Chief Financial Officer

  
	
   

  	
  Telephone:

  	
  (908)
  580-1200

  
	
   

  	
  Telecopier:

  	
  (908)
  542-9406

  
	
   

  	
  E-mail:

  	
  rferguson@reliantrx.com

  
	
   

  	
   

  
	
  in each
  case, with a copy to:

  
	
   

  	
  Latham &
  Watkins LLP

  
	
   

  	
  5800 Sears
  Tower Chicago, IL 60606

  
	
   

  	
  Attention:

  	
  Michael A.
  Pucker

  
	
   

  	
  Telephone:

  	
  (312)
  876-6518

  
	
   

  	
  Telecopier:

  	
  (312)
  993-9767

  
	
   

  	
  E-mail:

  	
  michael.pucker@lw.com

  
	
   

  	
   

  	
   

  
	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.,

  
	
   

  	
   

  
	
   

  	
  Goldman
  Sachs Credit Partners L.P.

  
	
   

  	
  85 Broad
  Street

  
	
   

  	
  New York,
  New York  10004

  
	
   

  	
  Attention:

  	
  Elizabeth
  Fischer

  
	
   

  	
  Telephone:

  	
  (212)
  902-1021

  
	
   

  	
  Telecopier:

  	
  (212)
  357-9110

  
	
   

  	
  E-mail:

  	
  elizabeth.fischer@gs.com

  

 

 

	
  with a copy
  to:

  
	
   

  
	
   

  	
  Goldman
  Sachs Credit Partners L.P.

  
	
   

  	
  85 Broad
  Street

  
	
   

  	
  New York,
  New York  10004

  
	
   

  	
  Attention:

  	
  Philip Green

  
	
   

  	
  Telephone:

  	
  (212)
  357-7580

  
	
   

  	
  Telecopier:

  	
  (212)
  357-4597

  
	
   

  	
  E-mail:

  	
  philip.f.green@gs.com

  
	
   

  	
   

  	
   

  
	
  For purposes
  of funding notices:

  
	
   

  
	
   

  	
  Goldman
  Sachs Credit Partners L.P.

  
	
   

  	
  85 Broad
  Street

  
	
   

  	
  New York,
  New York  10004

  
	
   

  	
  Attention:

  	
  Philip Green

  
	
   

  	
  Telephone:

  	
  (212)
  357-7580

  
	
   

  	
  Telecopier:

  	
  (212)
  357-4597

  
	
   

  	
  E-mail:

  	
  philip.f.green@gs.com

  
	
   

  	
   

  	
   

  

 

2

 

EXHIBIT A-1 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF FUNDING NOTICE

 

Reference is
made to the Credit and Guaranty Agreement, dated as of March 9,
2007 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among RELIANT PHARMACEUTICALS, INC. (“Company”),
CERTAIN SUBSIDIARIES OF COMPANY, as
Guarantor Subsidiaries, the Lenders party thereto from time to time and GOLDMAN SACHS CREDIT PARTNERS L.P. as Lender, Sole Lead
Arranger, Sole Bookrunner, Syndication Agent, Administrative Agent and
Collateral Agent

 

Pursuant to Section 2.1
(or, as applicable, Section 2.2) of the Credit Agreement, Company desires
that Lenders make the following Loans to Company in accordance with the
applicable terms and conditions of the Credit Agreement on [mm/dd/yy] (the “Credit Date”):

 

	
  o

  	
   

  	
  Base Rate Loans:

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  Eurodollar Rate Loans, with an Initial Interest

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
  Period of
                  
  Month(s):

  	
   

  	
   

  

 

Company hereby
certifies that:

 

(i) after
making the Loans requested on the Credit Date, the aggregate Loan Exposure
shall not exceed the Commitments then in effect;

 

(ii)  as
of the Credit Date, the representations and warranties contained in each of the
Credit Documents are true, correct and complete in all material respects on and
as of such Credit Date to the same extent as though made on and as of such
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case such representations and warranties
are true, correct and complete in all material respects on and as of such
earlier date; and

 

(iii)  as
of the Credit Date, no event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Default.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

A-1-1

 

Date:                    [mm/dd/yy]

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

A-1-2

 

EXHIBIT A-2 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF CONVERSION/CONTINUATION
NOTICE

 

Reference is
made to the Credit and Guaranty Agreement, dated as of March 9, 2007 (as it may
be amended, supplemented or otherwise modified, the “Credit
Agreement”; the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among RELIANT
PHARMACEUTICALS, INC. (“Company”), CERTAIN SUBSIDIARIES OF COMPANY, as Guarantor Subsidiaries,
the Lenders party thereto from time to time and GOLDMAN
SACHS CREDIT PARTNERS L.P. as Lender, Sole Lead Arranger, Sole
Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent.

 

Pursuant to Section 2.9
of the Credit Agreement, Company desires to convert or to continue the
following Loans, each such conversion and/or continuation to be effective as of
[mm/dd/yy]:

 

	
  $[      ,      ,      ]

  	
   

  	
  Eurodollar Rate Loans to be continued with Interest Period of
           month(s)

  
	
   

  	
   

  	
   

  
	
  $[      ,      ,      ]

  	
   

  	
  Base Rate Loans to be converted to Eurodollar Rate Loans with
  Interest Period of          month(s)

  
	
   

  	
   

  	
   

  
	
  $[      ,      ,      ]

  	
   

  	
  Eurodollar Rate Loans to be converted to Base Rate Loans

  

 

Company hereby
certifies that as of the date hereof, no event has occurred and is continuing
or would result from the consummation of the conversion and/or continuation
contemplated hereby that would constitute an Event of Default or a Default.

 

Date:                    [mm/dd/yy]

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

A-2-1

 

EXHIBIT B-1 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF INITIAL TERM LOAN NOTE

 

$[1][      ,      ,      ]

  [2][mm/dd/yy]

 

FOR VALUE
RECEIVED, RELIANT PHARMACEUTICALS, INC., a Delaware
corporation (“Company”), promises to pay [NAME
OF LENDER] (“Payee”) or its registered assigns,
on or before March 31, 2012, the unpaid
principal amount of its Loan under the Credit Agreement referred to below.

 

Company also
promises to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full, at the rates and at the times which shall be
determined in accordance with the provisions of that certain Credit and
Guaranty Agreement, dated as of March 9, 2007
(as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among RELIANT PHARMACEUTICALS, INC., CERTAIN SUBSIDIARIES OF COMPANY,
as Guarantor Subsidiaries, the Lenders party thereto from time to time and GOLDMAN SACHS CREDIT PARTNERS L.P., as Lender, Sole Lead
Arranger, Sole Bookrunner, Syndication Agent, Administrative Agent and
Collateral Agent.

 

This Note is
one of the “Initial Term Loan Notes” in the aggregate principal amount of one
hundred and seventy million dollars ($170,000,000)
and is issued pursuant to and entitled to the benefits of the Credit Agreement,
to which reference is hereby made for a more complete statement of the terms and
conditions under which the Loan evidenced hereby was made and is to be repaid.

 

All payments
of principal and interest in respect of this Note shall be made in lawful money
of the United States of America in same day funds at the Principal Office or at
such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment Agreement effecting the assignment or transfer of the obligations
evidenced hereby shall have been accepted by Administrative Agent and recorded
in the Register, Company, each Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, the failure to make a notation of any payment made
on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.

 

This Note is
subject to (i) mandatory prepayment and (ii)  voluntary prepayment at
the option of Company, each as provided in the Credit Agreement.

 

THIS NOTE AND
THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

1 Amount of Lender’s Loan

2 Date of
Issuance

 

B-1-1

 

Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

 

The terms of
this Note are subject to amendment only in the manner provided in the Credit
Agreement.

 

No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed and as
prescribed in the Credit Agreement.

 

Company
promises to pay all costs and expenses, including reasonable attorneys’ fees,
all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note. Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand, and, except
as required by Section 8.1 of the Credit Agreement upon the occurrence of
an Event of Default, notice of every kind.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

B-1-2

 

IN WITNESS
WHEREOF, Company has caused this Note to be duly
executed and delivered by its officer thereunto duly authorized as of the date
and at the place first written above.

 

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

B-1-3

 

	
  Date

  	
   

  	
  Amount
  of Principal

  Paid This Date

  	
   

  	
  Outstanding
  Principal

  Balance This Date

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

B-1-4

 

EXHIBIT B-2 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF DELAYED DRAW TERM LOAN
NOTE

 

$[3][      ,      ,      ]

  [4][mm/dd/yy]

 

FOR VALUE
RECEIVED, RELIANT PHARMACEUTICALS, INC., a Delaware
corporation (“Company”), promises to pay [NAME OF LENDER] (“Payee”) or its
registered assigns, on or before March 31, 2012,
the unpaid principal amount of its Loan under the Credit Agreement referred to
below.

 

Company also
promises to pay interest on the unpaid principal amount hereof, from the date
hereof until paid in full, at the rates and at the times which shall be
determined in accordance with the provisions of that certain Credit and
Guaranty Agreement, dated as of March 9, 2007 (as
it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among RELIANT PHARMACEUTICALS, INC., CERTAIN SUBSIDIARIES OF COMPANY,
as Guarantor Subsidiaries, the Lenders party thereto from time to time and GOLDMAN SACHS CREDIT PARTNERS L.P., as Lender, Sole Lead
Arranger, Sole Bookrunner, Syndication Agent, Administrative Agent and
Collateral Agent.

 

This Note is
one of the “Delayed Draw Term Loan Notes” in the aggregate principal amount of
forty five million dollars ($45,000,000)
and is issued pursuant to and entitled to the benefits of the Credit Agreement,
to which reference is hereby made for a more complete statement of the terms
and conditions under which the Loan evidenced hereby was made and is to be
repaid.

 

All payments
of principal and interest in respect of this Note shall be made in lawful money
of the United States of America in same day funds at the Principal Office or at
such other place as shall be designated in writing for such purpose in
accordance with the terms of the Credit Agreement. Unless and until an
Assignment Agreement effecting the assignment or transfer of the obligations
evidenced hereby shall have been accepted by Administrative Agent and recorded
in the Register, Company, each Agent and Lenders shall be entitled to deem and
treat Payee as the owner and holder of this Note and the obligations evidenced
hereby. Payee hereby agrees, by its acceptance hereof, that before disposing of
this Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest hereon has
been paid; provided, the failure to make a notation of any payment made
on this Note shall not limit or otherwise affect the obligations of Company
hereunder with respect to payments of principal of or interest on this Note.

 

This Note is
subject to (i) mandatory prepayment and (ii)  voluntary prepayment at
the option of Company, each as provided in the Credit Agreement.

 

THIS NOTE AND
THE RIGHTS AND OBLIGATIONS OF COMPANY AND PAYEE HEREUNDER SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK.

 

3 Amount of Lender’s Loan

4 Date of
Issuance

 

B-2-1

 

Upon the
occurrence of an Event of Default, the unpaid balance of the principal amount
of this Note, together with all accrued and unpaid interest thereon, may
become, or may be declared to be, due and payable in the manner, upon the
conditions and with the effect provided in the Credit Agreement.

 

The terms of
this Note are subject to amendment only in the manner provided in the Credit
Agreement.

 

No reference
herein to the Credit Agreement and no provision of this Note or the Credit
Agreement shall alter or impair the obligations of Company, which are absolute
and unconditional, to pay the principal of and interest on this Note at the
place, at the respective times, and in the currency herein prescribed and as
prescribed in the Credit Agreement.

 

Company
promises to pay all costs and expenses, including reasonable attorneys’ fees,
all as provided in the Credit Agreement, incurred in the collection and
enforcement of this Note. Company and any endorsers of this Note hereby consent
to renewals and extensions of time at or after the maturity hereof, without
notice, and hereby waive diligence, presentment, protest, demand, and, except
as required by Section 8.1 of the Credit Agreement upon the occurrence of
an Event of Default, notice of every kind.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

B-2-2

 

IN WITNESS
WHEREOF, Company has caused this Note to be duly executed
and delivered by its officer thereunto duly authorized as of the date and at
the place first written above.

 

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

B-2-3

 

	
  Date

  	
   

  	
  Amount
  of Principal

  Paid This Date

  	
   

  	
  Outstanding
  Principal

  Balance This Date

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

B-2-4

 

EXHIBIT C TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF COMPLIANCE CERTIFICATE

 

THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

 

1.                                       I
am the Principal Financial Officer of RELIANT PHARMACEUTICALS, INC.
(“Company”).

 

2.                                       I
have reviewed the terms of that certain Credit and Guaranty Agreement, dated as
of March 9, 2007 (as it may be amended,
supplemented or otherwise modified, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among Company, CERTAIN SUBSIDIARIES OF
COMPANY, as Guarantor Subsidiaries, the Lenders party thereto from
time to time and GOLDMAN SACHS CREDIT PARTNERS L.P.
as Lender, Sole Lead Arranger, Sole Bookrunner, Syndication Agent,
Administrative Agent and Collateral Agent, and I have made, or have caused to
be made under my supervision, a review in reasonable detail of the transactions
and condition of Company and its Subsidiaries during the accounting period
covered by the attached financial statements.

 

3.                                       The
examination described in paragraph 2 above did not disclose, and I have no
knowledge of, the existence of any condition or event which constitutes an
Event of Default or Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate [, except as set forth in a separate attachment, if any, to this
Certificate, describing in detail, the nature of the condition or event, the
period during which it has existed and the action which Company has taken, is
taking, or proposes to take with respect to each such condition or event].5

 

 

5 Text in brackets to be omitted if not
applicable.

 

C-1

 

The foregoing
certifications, together with the computation set forth in Annex A hereto
(relating to compliance with the covenants set forth in Section 6.8 of the
Credit Agreement) and the financial statements delivered with this Certificate
in support hereof (in accordance with Section 5.1(b) or Section 5.1(c) of
the Credit Agreement, as applicable) are made and delivered [mm/dd/yy] pursuant to Section 5.1(d)  of the
Credit Agreement.

 

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Title:

  

 

C-2

 

ANNEX A TO

COMPLIANCE CERTIFICATE

 

FOR THE FISCAL QUARTER ENDING
[  ] 

 

	
  Consolidated Total Revenues:

  	
   

  	
   

  	
   

  	
  $[      ,      ,      ]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Inventory Ratio

  	
   

  	
   

  	
   

  
	
  Month

  	
   

  	
  6-Month

  	
  12 Month

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

C-3

 

EXHIBIT D-1 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF OPINION OF LATHAM &
WATKINS LLP

 

[LATHAM
& WATKINS LLP LETTERHEAD]

 

[                 ]

 

 

The lenders listed on Annex
A hereto

 

        and

 

Goldman Sachs Credit
Partners L.P., as Lender, Sole Lead Arranger, Sole Bookrunner, Syndication
Agent, Administrative Agent and Collateral Agent

for the lenders listed on Annex A hereto

85 Broad Street

New York, New York 10004

 

Re:          Credit and Guaranty Agreement

Ladies and Gentlemen:

We have acted as special counsel to Reliant Pharmaceuticals, Inc., a
Delaware corporation (the “Borrower”) and the other credit parties set
forth on Annex B attached hereto (the “Guarantors”, together with
the Borrower, the “Credit Parties”), in connection with that certain
Credit and Guaranty Agreement dated as of March 9, 2007 (the “Credit
Agreement”), among the Credit Parties, the lenders from time to time party
thereto, Goldman Sachs Credit Partners L.P., as Lender, Sole Lead Arranger,
Sole Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent,
and the other Loan Documents (as defined below).

This letter is furnished pursuant to Section 3.1(n) of the
Credit Agreement.  Capitalized terms
defined in the Credit Agreement, used herein and not otherwise defined herein,
shall have the meanings given them in the Credit Agreement.

As such counsel, we have examined such matters of fact and questions of
law as we have considered appropriate for purposes of this letter, except where
a specified fact confirmation procedure is stated to have been performed (in
which case we have with your consent performed the stated procedure), and
except where a statement is qualified as to knowledge (in which case 

 

D-1-1

 

we have with your consent made no or limited
inquiry as specified below).  We have
examined, among other things, the following:

a.             The Credit Agreement;

b.             Pledge and Security Agreement dated
as of March 9, 2007 by the Credit Parties in favor of the Collateral Agent (the
“Security Agreement”);

c.             Patent Security Agreement dated as
of March 9, 2007 by the Credit Parties in favor of the Collateral Agent (the “Patent
Security Agreement”);

d.             Trademark Security Agreement dated
as of March 9, 2007 by the Credit Parties in favor of the Collateral Agent (the
“Trademark Security Agreement”);

e.             The agreements and instrument(s)
creating, evidencing or securing indebtedness of the Borrower for borrowed
money identified to us by an officer of the Borrower as material to the
Borrower and listed in Annex C (the “Specified Agreements”);

f.              The certificate of incorporation
and bylaws of the Borrower (the “Governing Documents”); and

g.             a photocopy of the UCC-1 financing
statement naming the Borrower as debtor and the Collateral Agent as secured
party, together with all schedules and exhibits to such financing statement, to
be filed in the Office of the Secretary of State of the State of Delaware, a
copy of which is attached hereto as Exhibit A and incorporated herein by
this reference (the “Delaware Financing Statement”).

The documents described in subsections
(a) - (d) above are referred to herein collectively as the “Loan
Documents.”  As used in this letter,
the “New York UCC” shall mean the Uniform Commercial Code as now in
effect in the State of New York.  As used
in this letter, “Applicable UCC” shall mean the New York UCC and/or the
Delaware UCC (as defined below), as applicable.

 

D-1-2

 

With your consent, we have relied upon the foregoing, including the
representations and warranties of the Credit Parties in the Loan Documents, and
upon certificates of officer(s) of the Credit Parties and of others with
respect to certain factual matters.  We
have not independently verified such factual matters.  However, except as otherwise expressly
indicated, we have not undertaken any independent inquiry to determine the
accuracy of any such statement.

We are opining herein as to the effect on the subject transaction only
of (i) the federal laws of the United States, (ii) the internal laws of the
State of New York, (iii) in our opinions set forth in paragraphs 1, 2, 4(i) and
4(iii) of this letter, the General Corporation Law of the State of Delaware
(the “DGCL”) and (iv) in our opinions set forth in paragraphs 6, 9(i)
and 11(i) of this letter (as they relate to the Delaware UCC), the Delaware
UCC.  Except as described in the previous
sentence, we express no opinion with respect to the applicability to the
opinions expressed herein, or the effect thereon, of the laws of any other
jurisdiction or, in the case of Delaware, any other laws, or as to any matters
of municipal law or the laws of any local agencies within any state.  With your permission, we have based our
opinions set forth in paragraphs 6, 9(i) and 11(i), exclusively upon our review
of Article 9 of the Uniform Commercial Code of the State of Delaware as set
forth in the CCH Secured Transactions Guide (without regard to judicial
interpretations thereof or any regulations promulgated thereunder or any other
laws of the State of Delaware), and referred to herein as the “Delaware UCC.”

Unless otherwise stated herein, our opinions herein are based upon our
consideration of only those statutes, rules and regulations which, in our
experience, are normally applicable to borrowers and guarantors in secured loan
transactions.  We express no opinion as
to any state or federal laws or regulations applicable to the subject
transactions because of the legal or regulatory status of any parties to the
Loan Documents or the legal or regulatory status of any of their
affiliates.  Various issues pertaining to
the internal laws of the Commonwealth of Massachusetts are addressed in the
opinion of Burns & Levinson LLP, separately provided to you.  We express no opinion with respect to those
matters, and to the extent elements of those opinions are necessary to the conclusions
expressed herein, we have, with your consent, assumed such matters.

Subject to the foregoing and the other matters set forth herein, as of
the date hereof:

 

D-1-3

 

1.             The
Borrower is a corporation under the DGCL with corporate power and authority to
enter into the Loan Documents and perform its obligations thereunder.  Based on certificates from public officials,
we confirm that the Borrower is validly existing and in good standing under the
laws of the State of Delaware and is qualified to do business in the following
States: California, Colorado, Connecticut, Georgia, New Jersey, Ohio,
Pennsylvania, Texas and Arizona.

2.             The
execution, delivery and performance of the Loan Documents by the Borrower have
been duly authorized by all necessary corporate action of the Borrower, and the
Loan Documents have been duly executed and delivered by the Borrower.

3.             Each
of the Loan Documents constitutes a legally valid and binding obligation of the
Credit Parties party thereto, enforceable against each such Credit Party in
accordance with its respective terms.

4.             The
execution and delivery of the Loan Documents by the Credit Parties, and the
borrowing of the initial loans by the Borrower and the granting of liens
pursuant to the Loan Documents by the Credit Parties, on the date hereof do
not:

(i)            In
the case of the Borrower, violate the provisions of the Governing Documents,

(ii)           result
in the breach of or a default under any of the Specified Agreements,

(iii)          violate
the DGCL or any federal or New York statute, rule, or regulation applicable to
the Credit Parties (including, without limitation, Regulations T, U or X of the
Board of Governors of the Federal Reserve System, assuming the Borrower
complies with the provisions of the Loan Documents relating to the use of
proceeds), or

(iv)          require
any consents, approvals, or authorizations to be obtained by the Borrower from,
or any registrations, declarations or filings to be made by the Borrower with,
any governmental authority, under the DGCL or any 

 

D-1-4

 

federal or New York statute, rule or regulation
applicable to the Borrower, except filings and recordings required in order to
perfect or otherwise protect the security interests under the Loan Documents.

5.             The
Security Agreement creates a valid security interest in favor of the Collateral
Agent for the benefit of the Secured Parties in that portion of the collateral
described in Section 2.1 of the Security Agreement in which each of the
Credit Parties party thereto has rights and a valid security interest may be
created under Article 9 of the New York UCC (the “UCC Collateral”),
which security interest secures the Secured Obligations as defined in the
Security Agreement.

6.             The
Delaware Financing Statement is in appropriate form for filing in the Office of
the Secretary of State of the State of Delaware.  Upon the proper filing of the Delaware
Financing Statement in the Office of the Secretary of State of the State of
Delaware, the security interest in favor of the Collateral Agent for the
benefit of the Secured Parties in the Borrower’s rights in the UCC Collateral
described in the Delaware Financing Statement will be perfected to the extent a
security interest in such UCC Collateral can be perfected under the Delaware
UCC by the filing of a financing statement in Delaware.

7.             Upon
delivery of that portion of the UCC Collateral consisting of the certificates
in registered form representing the Borrower’s ownership interests in the
Guarantors that constitute “certificated securities” within the meaning of
Section 8-102(a)(4) of the New York UCC and that are listed on Annex D
hereto (the “Pledged Securities”) to the Collateral Agent in, and while
located in, the State of New York, pursuant to the Security Agreement, indorsed
to the Collateral Agent or in blank, in each case, by an effective endorsement,
or accompanied by undated stock powers with respect thereto duly indorsed in
blank by an effective endorsement, the security interest in favor of the
Collateral Agent for the benefit of the Secured Parties in the Pledged
Securities will be perfected.  Upon such
delivery, the Collateral Agent’s security interest in the Pledged Securities
has priority over any other security interest in the Pledged Securities granted
by the Borrower assuming no other secured party has control of, and the absence
of any other control agreement with respect to, the Pledged Securities.

 

D-1-5

 

8.             To
the extent that the federal patent laws of the United States apply to security
interests in patents, the provisions of the Patent Security Agreement, together
with the Security Agreement, create a valid security interest in favor of the
Collateral Agent for the benefit of the Secured Parties in the United States
patents and patent applications set forth on Schedule I to the Patent
Security Agreement (the “Patent Collateral”), which security interest
will secure the Secured Obligations as defined in the Security Agreement.

9.             Upon
(i) the proper filing of the Delaware Financing Statement in the Office of the
Secretary of State of the State of Delaware and (ii) the proper recordation of
the Patent Security Agreement in the United States Patent and Trademark Office
(the “PTO”) against the Patent Collateral within three months from the
date thereof, the security interest in favor of the Collateral Agent for the
benefit of the Secured Parties in the Borrower’s rights in the Patent
Collateral will be perfected to the extent a security interest in such Patent Collateral
can be perfected under the Delaware UCC by the filing of a financing statement
in Delaware or by recording the Patent Security Agreement in the PTO.

10.           To
the extent that the federal trademark laws of the United States apply to
security interests in trademarks, the provisions of the Trademark Security
Agreement, together with the Security Agreement, create a valid security
interest in favor of the Collateral Agent for the benefit of the Secured
Parties in the United States trademarks set forth on Schedule I to the
Trademark Security Agreement (the “Trademark Collateral”), which
security interest will secure the Secured Obligations as defined in the
Security Agreement.

11.           Upon
(i) the proper filing of the Delaware Financing Statement in the Office of the
Secretary of State of the State of Delaware and (ii) the proper recordation of
the Trademark Security Agreement in the PTO against the Trademark Collateral
within three months from the date thereof, the security interest in favor of
the Collateral Agent for the benefit of the Secured Parties in the Borrower’s
rights in the Trademark Collateral will be perfected to the extent a security
interest in such Trademark Collateral can be perfected under the Delaware UCC
by the filing of a financing statement in Delaware or by recording the
Trademark Security Agreement in the PTO.

 

D-1-6

 

12.           None
of the Credit Parties is required to be registered as an “investment company”
within the meaning of the Investment Company Act of 1940, as amended.

Except as expressly set forth in paragraphs 5 through 11, our opinions
do not include opinions with respect to the creation, validity, perfection or
priority of any security interest or lien, and the opinions above do not include
any opinions with respect to compliance with laws relating to permissible rates
of interest.

Our opinions are subject to:

a.             the effects of bankruptcy,
insolvency, reorganization, preference, fraudulent transfer, moratorium or
other similar laws relating to or affecting the rights or remedies of
creditors, or the judicial application of foreign laws or governmental actions
affecting creditors’ rights;

b.             the effects of general principles
of equity, whether considered in a proceeding in equity or at law (including
the possible unavailability of specific performance or injunctive relief),
concepts of materiality, reasonableness, good faith and fair dealing, and the
discretion of the court before which a proceeding is brought;

c.             the invalidity under certain
circumstances under law or court decisions of provisions for the
indemnification or exculpation of or contribution to a party with respect to a
liability where such indemnification, exculpation or contribution is contrary
to public policy; and

d.             we express no opinion with respect
to (i) consents to, or restrictions upon, governing law, jurisdiction, venue,
arbitration, remedies or judicial relief;  (ii) advance waivers
of claims, defenses, rights granted by law, or notice, opportunity for hearing,
evidentiary requirements, statutes of limitation, trial by jury or at law, or
other procedural rights; (iii) waivers of broadly or vaguely stated
rights; (iv) covenants not to compete; (v) provisions for exclusivity, election
or cumulation of rights or remedies; (vi) provisions authorizing or validating
conclusive or discretionary determinations; (vii) grants of setoff rights; 

 

D-1-7

 

(viii) provisions to the effect that a
guarantor is liable as a primary obligor, and not as a surety;
(ix) provisions for the payment of attorneys’ fees where such payment is
contrary to law or public policy; (x) proxies, powers and trusts;
(xi) except as set forth in paragraph 4(ii) of this letter, provisions
prohibiting, restricting, or requiring consent to assignment or transfer of any
right or property; (xii) provisions for liquidated damages, default
interest, late charges, monetary penalties, make-whole premiums or other
economic remedies to the extent such provisions are deemed to constitute a
penalty; and (xiii) the severability, if invalid, of provisions to the
foregoing effect.

We express no opinion as to
federal or state securities laws, tax laws, antitrust or trade regulation laws,
insolvency or fraudulent transfer laws, antifraud laws, compliance with
fiduciary duty requirements, pension or employee benefit laws, usury laws, and
environmental laws (without limiting other laws excluded by customary
practice).

The opinions set forth above are also subject to (i) the
unenforceability of contractual provisions waiving or varying the rules listed
in Section 9-602 of the New York UCC, (ii) the unenforceability under
certain circumstances of contractual provisions respecting self-help or summary
remedies without notice of or opportunity for hearing or correction,
(iii) the effect of provisions of the New York UCC and other general legal
principles, which impose a duty to act in good faith and in a commercially
reasonable manner, and (iv) the effect of Sections 9-406, 9-407, 9-408 or 9-409
of the New York UCC on any provision of any Loan Document that purports to
prohibit, restrict, require consent for or otherwise condition the assignment
of rights under such Loan Document.

Insofar as our opinions require interpretation of the Specified
Agreements, with your consent, (i) we have assumed that all courts of
competent jurisdiction would enforce such agreements in accordance with their
plain meaning, (ii) to the extent that any questions of legality or legal
construction have arisen in connection with our review, we have applied the
laws of New York in resolving such questions, although certain of the Specified
Agreements may be governed by other laws which differ from the law of New York,
(iii) we express no opinion with respect to a breach or default under any
Specified Agreement that would occur only 

 

D-1-8

 

upon the happening of a contingency, and
(iv) we express no opinion with respect to any matters which require the
performance of a mathematical calculation or the making of a financial or
accounting determination.

Our opinions in paragraphs 5, 7, 8 and 10 above are limited to Article
9 of the New York UCC, and our opinions in paragraphs 6, 9(i) and 11(i) are
limited to Article 9  of the Delaware
UCC, and therefore those opinion paragraphs, among other things, do not address
collateral of a type not subject to, or excluded from the coverage of, Article
9, as the case may be, of the Applicable UCC. 
Additionally,

(1)           We express no opinion with respect to
the priority of any security interest or lien, except as expressly set forth in
paragraph 7.

(2)           We express no opinion with respect to
any agricultural lien or any collateral that consists of letter-of-credit
rights, commercial tort claims, goods covered by a certificate of title, claims
against any government or governmental agency, consumer goods, crops growing or
to be grown, timber to be cut, goods which are or are to become fixtures,
as-extracted collateral or cooperative interests.

(3)           We assume the descriptions of
collateral contained, or attached as schedules to, the Loan Documents
sufficiently describe the collateral intended to be covered by the Loan
Documents, and we express no opinion as to whether the phrases “all personal
property” or “all assets” or similarly general phrases would be sufficient to
create a valid security interest in the collateral or particular item or items
of collateral.

(4)           We have assumed that each of the
Credit Parties has, or with respect to after-acquired property will have,
rights in the collateral or the power to transfer rights in the collateral, and
that value has been given, and we express no opinion as to the nature or extent
of the Credit Parties’ rights in any of the collateral and we note that with respect
to any after-acquired property, the security interest will not attach until the
applicable Credit Party acquires such rights or power.

 

D-1-9

 

(5)           We call to your attention the fact
that the perfection of a security interest in “proceeds” (as defined in the
Applicable UCC) of collateral is governed and restricted by Section 9-315 of
the Applicable UCC.

(6)           We have assumed that the exact legal
name of the Borrower is as set forth in the copy of the organizational
documents certified by the Delaware Secretary of State, and we have also
assumed the accuracy of the other factual information set forth on the Delaware
Financing Statement.

(7)           Section 552 of the federal Bankruptcy
Code limits the extent to which property acquired by a debtor after the
commencement of a case under the federal Bankruptcy Code may be subject to a
security interest arising from a security agreement entered into by the debtor
before the commencement of such case.

(8)           We express no opinion with respect to
any property subject to a statute, regulation or treaty of the United States
whose requirements for a security interest’s obtaining priority over the rights
of a lien creditor with respect to the property preempt Section 9-310(a) of the
Applicable UCC.

(9)           We express no opinion with respect to
any goods which are accessions to, or commingled or processed with, other goods
to the extent that the security interest is limited by Section 9-335 or 9-336
of the Applicable UCC.

(10)         We express no opinion as to any
security interest in any portion of the collateral that is subject to an
agreement prohibiting, restricting or conditioning the assignment thereof
except to the extent that any such prohibitions or restrictions are rendered
ineffective under the Applicable UCC or any such conditions have been complied
with.

 

D-1-10

 

(11)         We express no opinion as to the
priority of the security interest as against any lien creditor to the extent
that such security interest purports to secure any advances or other
obligations other than those that are made without knowledge of the lien or
pursuant to a commitment entered into without knowledge of the liens.

(12)         Except as expressly set forth in
paragraphs 8 through 11, we express no opinion regarding any security interest
in any copyrights, patents, trademarks, service marks or other intellectual
property, the proceeds thereof or money due with respect to the lease, license
or use thereof except to the extent Article 9 of the New York UCC may be
applicable to the foregoing and, without limiting the generality of the
foregoing, we express no opinion as to the effect of any federal laws relating
to copyrights, patents, trademarks, service marks or other intellectual
property on the opinions expressed herein. 
In addition, we express no opinion as to any security interest in any
license of copyrights, patents, trademarks or other intellectual property
except to the extent that such license affirmatively permits the creation of a
security interest therein.

(13)         We express no opinion with respect to
the security interest of the Collateral Agent for the benefit of any Secured
Party other than the Lenders, except to the extent that the Collateral Agent
has been duly appointed as agent for such person.

With your
consent, we have assumed (a) that the Loan Documents have been duly authorized,
executed and delivered by the parties thereto other than the Borrower, (b) that
the Loan Documents constitute legally valid and binding obligations of the
parties thereto other than the Borrower and the Guarantors, enforceable against
each of them in accordance with their respective terms, and (c) that the
status of the Loan Documents as legally valid and binding obligations of the parties
is not affected by any (i) breaches of, or defaults under, agreements or
instruments, (ii) violations of statutes, rules, regulations or court or
governmental orders, or (iii) failures to obtain required consents,
approvals or authorizations from, or make required registrations, declarations
or filings with, governmental authorities, provided that we make no such
assumption to the extent we have opined as to such matters with respect to the
Borrower herein.  This letter is
furnished only to you and is solely for your benefit in connection with the 

 

 

D-1-11

 

transactions referenced in the
first paragraph.  This letter may not be
relied upon by you for any other purpose, or furnished to, assigned to, quoted
to or relied upon by any other person, firm or entity for any purpose, without
our prior written consent, which may be granted or withheld in our discretion.

 

At your
request, we hereby consent to reliance hereon by any future assignee of your
interest in the loans under the Credit Agreement pursuant to an assignment that
is made and consented to in accordance with the express provisions of Section
10.6 of the Credit Agreement, on the condition and understanding that (i)
this letter speaks only as of the date hereof, (ii) we have no responsibility
or obligation to update this letter, to consider its applicability or
correctness to other than its addressee(s), or to take into account changes in
law, facts or any other developments of which we may later become aware, and
(iii) any such reliance by a future assignee must be actual and reasonable
under the circumstances existing at the time of assignment, including any
changes in law, facts or any other developments known to or reasonably knowable
by the assignee at such time.

 

Very truly yours,

 

 

D-1-12

 

ANNEX A

Lenders

 

 

 

A-1

 

ANNEX B

Guarantors

 

 

 

 

 

 

 

 

B-1

 

ANNEX
C

 

Specified Agreements

 

 

 

 

 

 

 

 

 

C-1

 

ANNEX D

 

Pledged Securities

 

 

 

 

 

 

 

 

 

 

 

 

D-1

 

EXHIBIT A

 

Delaware Financing Statement

 

 

 

EXHIBIT D-2 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF OPINION OF BURNS &
LEVINSON LLP

 

[BURNS
& LEVINSON LLP LETTERHEAD]

 

[                 ]

 

 

Goldman Sachs Credit Partners, L.P., as Administrative Agent

and Collateral Agent

85 Broad Street

New York, New York 10004

 

Re:   Credit and Guaranty
Agreement dated as March 9, 2007
 among Reliant Pharmaceuticals Inc and certain
of its subsidiaries,
 Goldman Sachs Credit Partners L.P., as Sole Lead Arranger,
 Sole Bookrunner, Syndication Agent, Administrative Agent and
 Collateral Agent and the other Lenders parties thereto from time to time

 

Ladies and Gentlemen

 

In connection with the
above-referenced Credit and
Guaranty Agreement (the "Credit Agreement"), we have acted as special
counsel to the following Massachusetts corporations:

 

1.             RP Sub
No 5(D) Inc

2.             RP Sub
No 4(I) Inc

3.             RP Sub
No 6(0) Inc

4.             RP Sub
No 3(R) Inc

 

Each of such corporations is referred to herein as "Subsidiary" and collectively as the "Subsidiaries". Capitalized terms used without definition herein shall have the meanings they have by definition in the Credit Agreement or in the Pledge and Security Agreement referred to in the Credit Agreement.

 

As special counsel to the Subsidiaries in connection with the Credit Agreement, we have examined the Articles of Organization and Bylaws of each
Subsidiary (the "Governing
Documents") and the actions by Reliant Pharmaceuticals,
Inc. as sole shareholder of each Subsidiary. In addition, we have examined such other documents and made such investigation and
examination of law as we have deemed necessary for purposes of this opinion.

 

 

 

MASSACHUSETTS
• RHODE ISLAND • DISTRICT OF COLUMBIA

 

D-2-1

 

 

We have assumed the following in rendering this opinion:

 

(a)           The genuineness
of all signatures the capacity of all natural persons, and the authenticity of all documents submitted to us as originals and the completeness and conformity of original documents submitted to us as copies, whether certified or not.

 

(b)           Accuracy and completeness of all records made available to us by the Subsidiaries.

 

(c)           Accuracy and completeness of all representations and warranties of factual matters made by the Subsidiaries without any independent investigation on our part.

 

(d)           That the
governmental records examined by us are complete and accurate.

 

Except as explicitly set forth herein,
we have undertaken no factual
investigation in any regard. Nonetheless, nothing
has come to our attention in the course of our representation of the Subsidiaries that would lead us to question the accuracy or reasonableness of any of the assumptions made herein.

 

The opinions express herein are limited to matters governed by the internal laws of the Commonwealth of
Massachusetts and the federal
laws of the United States of America.

 

Based upon and subject to the foregoing and subject to the qualifications set forth below, we are of the opinion that:

 

1.             Each of the Subsidiaries is corporation duly organized and in corporate good standing under the laws of Massachusetts with
power and authority to own its properties and conduct its business and enter into the Credit Documents and perform its obligations thereunder.

 

2.             The execution,
delivery and performance of the Credit Documents by each of the Subsidiaries has been duly authorized by all necessary corporate action of each such Subsidiary, and the Credit Documents has been duly executed and delivered by each of the Subsidiaries party thereto.

 

 

D-2-2

 

3.             The execution
and delivery of the Credit Documents by each of the Subsidiaries, and the guaranty of the Loans by the Subsidiaries
pursuant to the Credit Documents do not:

 

(i)             violate the provisions of the Governing Documents;

 

(ii)            result
in the breach of or default under any of Material Contract;

 

(iii)           violate
Massachusetts General Laws chapter 156D or any federal or Massachusetts statute, rule or regulation applicable to any of the Subsidiaries (including without limitation Regulations G, T, U or X of the Board of Governors of the Federal Reserve System assuming compliance by the Subsidiaries with the provisions of the Credit Documents relating to use of proceeds of Loans), or

 

(iv)           require
any consents, approvals, or authorizations to be obtained by any of the Subsidiaries,
or any registrations, declarations or filings to be made by any of the Subsidiaries under any
federal or Massachusetts statute rule or regulation applicable to such Subsidiary except filings and recordings required in order to perfect or otherwise protect the security interests under the Credit Documents.

 

4.             The Pledge
and Security Agreement creates valid security interest
in favor of the Collateral Agent in that portion of the Collateral (as defined in the Pledge and Security Agreement) in which the Subsidiaries have rights and valid security interest may be created under Article of the UCC (the "Pledged UCC
Collateral").

 

5.             The financing
statements attached hereto as Exhibit A (the "Financing Statements") are in appropriate
form for filing under the UCC as codified in the Commonwealth of Massachusetts. Upon the proper filing of the Financing Statements with the Secretary of State of the Commonwealth of
Massachusetts (the "Massachusetts Filing Office"), the security interest in favor of the Collateral Agent for the benefit of the Lenders in the Pledged UCC Collateral described in the Financing Statements will be perfected to the extent security interest in such Pledged UCC Collateral can be perfected under the Massachusetts UCC by the filing of financing statement in that office.

 

6.             To the
extent that the federal patent laws of the United States apply to security interests in patents, the provisions of the Patent Security Agreement, together with the Pledge and
Security Agreement, create valid security interest
in favor of the Collateral Agent in the rights of Subsidiaries in the United
States patents and patent applications described in the Patent Security Agreement (the "Patent
Collateral").

 

D-2-3

 

7.             Upon (i) the proper filing of Financing Statements naming the Subsidiaries as debtor in the Massachusetts Filing
Office and (ii) the proper recordation of the Patent Security Agreement in the United States Patent and
Trademark Office ("PTO") against the
Patent Collateral within three months
of the date thereof the security interest in favor of the Collateral Agent in the Patent Collateral will be perfected to the extent a security interest in the Patent Collateral can
be perfected by filing financing statement
in the Massachusetts Filing Office or by recording the Patent Security Agreement in the PTO.

 

8.             To the
extent that the federal trademark laws of the United States apply to security interests in trademarks, the provisions of the Trademark Security Agreement together with the Pledge and Security Agreement, create valid security interest in favor of the Collateral Agent in the rights of the Subsidiaries in the United States trademarks described in the Trademark Security Agreement (the "Trademark
Collateral").

 

9.             Upon (i) the proper filing of Financing Statements naming
the Subsidiaries as  debtors in the Massachusetts Filing Office and (ii) the proper recordation of the Trademark Security Agreement in the PTO against the Trademark Collateral within three months of the date thereof, the security interest in favor of the Collateral Agent in the Trademark Collateral will be perfected to the extent security interest
in the Trademark Collateral can be perfected by filing financing statement in the Massachusetts Filing Office or by recording the Trademark Security Agreement in the PTO.

 

Our opinion that the security interests in the Pledged UCC Collateral, the Patent Collateral and the Trademark Collateral will be perfected by the filing of the Financing Statements, the Patent Security Agreement and the Trademark Security Agreement as described above is subject in all events to the qualification that such perfection may be limited by application of bankruptcy, reorganization,
insolvency or moratorium laws affecting the enforcement of creditors' rights generally. We express no opinion as to the priority of any security interest granted to the Collateral Agent in the Pledged UCC Collateral, the Patent Collateral or the Trademark Collateral
pursuant to the Pledge and Security Agreement.

 

This opinion is rendered only to you for yourself and as agent for the Lenders and is solely for your benefit and the benefit of the Lenders in connection with the transactions contemplated
by the Credit Documents. This opinion may not be relied upon for any other purpose, or furnished to, assigned to, quoted to or relied upon by any other person, firm or entity for any purpose,
without our prior written consent, which may be granted or withheld in our discretion.

 

D-2-4

 

At your request we hereby consent to reliance hereon by any future assignee of your interest in the loans under the Credit Agreement pursuant to an assignment that is made and consented to in accordance with the
provisions of Section 10.6(c) of the Credit Agreement, on the condition and understanding that: (i)
this letter speaks only as of the date hereof (ii) we have no responsibility or obligation to update this letter, to consider its applicability or correctness to parties other than you, or to take into account changes in law facts or any other developments of which we may later become aware, and (iii) any such reliance
by a future assignee must be actual and reasonable under the circumstances existing at
the time of assignments, including any changes in law, facts or any other development known to or reasonably knowable by the assignee at such time.

 

	
   

  	
  Very truly yours

  
	
   

  	
  BURNS LEV1NSON LLP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
  A partner

  

 

 

D-2-5

 

 

EXHIBIT A

 

 

Financing Statements

 

 

D-2-6

 

EXHIBIT E TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

This
Assignment and Assumption Agreement (the “Assignment”) is
dated as of the Effective Date set forth below and is entered into by and
between [Insert name of Assignor] (the “Assignor”) and
[Insert name of Assignee] (the “Assignee”). Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit and Guaranty Agreement identified below (as it may be amended,
supplemented or otherwise modified from time to time, the “Credit
Agreement”), receipt of a copy of which is hereby acknowledged by
the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached
hereto are hereby agreed to and incorporated herein by reference and made a
part of this Assignment as if set forth herein in full.

 

For an agreed
consideration, the Assignor hereby irrevocably sells and assigns to the
Assignee, and the Assignee hereby irrevocably purchases and assumes from the
Assignor, subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below, the interest in and to all of the
Assignor’s rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor’s outstanding
rights and obligations under the respective facilities identified below (the “Assigned Interest”). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and the Credit Agreement, without representation or warranty by the Assignor.

 

	
  1.

  	
   

  	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower(s):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Administrative Agent:

  	
   

  	
                                              ,
  as the administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit Agreement:

  	
   

  	
  The $215,000,000 Credit and Guaranty Agreement dated as of March 9,
  2007 among RELIANT PHARMACEUTICALS, INC., CERTAIN SUBSIDIARIES OF COMPANY, as Guarantor
  Subsidiaries, the Lenders party thereto from time to time and GOLDMAN SACHS CREDIT PARTNERS L.P., as Lender, Sole Lead
  Arranger, Sole Bookrunner, Syndication Agent, Administrative Agent and
  Collateral Agent.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned Interest:

  	
   

  	
   

  

 

E-1

 

	
  Aggregate Amount

  of Loans for all Lenders

  	
   

  	
  Amount of Loans

  Assigned

  	
   

  	
  Percentage Assigned of Loans

  [****6*]

  	
   

  
	
  $

  	
   

  	
  $

  	
   

  	
   

  	
                         %

  	
   

  
							

 

	
  Effective Date:
                              ,
  20

  	
   

  	
  [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE
  EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

  

 

7.                                       Notice and Wire
Instructions:

 

	
  [NAME OF ASSIGNOR]

  	
  [NAME OF ASSIGNEE]

  
	
   

  	
   

  
	
  Notices:

  	
  Notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
  Telecopier:

  
	
   

  	
   

  
	
  with a copy to:

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  	
  Attention:

  
	
   

  	
  Telecopier:

  	
   

  	
  Telecopier:

  

 

6 Set forth, to at least 9 decimals, as
a percentage of the Commitment/Loans of all Lenders thereunder.

 

E-2

 

	
  Wire Instructions:

  	
  Wire Instructions:

  
	
   

  	
   

  

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

E-3

 

The terms set
forth in this Assignment are hereby agreed to:

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME OF
  ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME OF
  ASSIGNEE]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Consented to
  and Accepted:7

  	
   

  
	
   

  	
   

  
	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.

  	
   

  
	
        as
  Administrative Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Consented
  to:

  	
   

  
	
   

  	
   

  
	
  RELIANT
  PHARMACEUTICALS, INC.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Title:

  	
   

  

 

 

7 If
necessary pursuant to Section 10.6(c)(ii) 
of the Credit Agreement.

 

E-4

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT

AND ASSUMPTION AGREEMENT

 

1.                                       Representations
and Warranties.

 

1.1.                              Assignor.

 

1.2.                              The
Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii)  the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) 
it has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and to consummate the transactions contemplated
hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with any
Credit Document, (ii)  the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement or any other instrument
or document delivered pursuant thereto, other than this Assignment (herein
collectively the “Credit Documents”),
or any collateral thereunder, (iii)  the financial condition of the
Company, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Credit Document or (iv)  the performance or observance by
the Borrower, any of its Subsidiaries or Affiliates or any other Person of any
of their respective obligations under any Credit Document.

 

1.3.                              Assignee.
The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and to consummate the transactions contemplated hereby and to become
a Lender under the Credit Agreement, (ii)  it meets all requirements of an
Eligible Assignee under the Credit Agreement, (iii)  from and after the
Effective Date, it shall be bound by the provisions of the Credit Agreement
and, to the extent of the Assigned Interest, shall have the obligations of a
Lender thereunder, (iv)  it has received a copy of the Credit Agreement
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and to
purchase the Assigned Interest on the basis of which it has made such analysis
and decision, and (v)  if it is a Non-U.S. Lender, attached to the
Assignment is any documentation required to be delivered by it pursuant to the
terms of the Credit Agreement, duly completed and executed by the Assignee; and
(b) agrees that (i) it will, independently and without reliance on
the Administrative Agent, the Assignor or any other Lender, and based on such
documents and information as it shall deem appropriate at that time, continue
to make its own credit decisions in taking or not taking action under the
Credit Documents, and (ii)  it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Documents are required
to be performed by it as a Lender.

 

2.                                       Payments.
From and after the Effective Date, the Administrative Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts that have accrued
to but excluding the Effective Date and to the Assignee for amounts that have
accrued from and after the Effective Date.8

 

8 GSCP/Administrative
Agent may adjust as necessary to conform with its internal systems.

 

E-5

 

3.                                       General
Provisions. This Assignment shall be binding upon, and inure to the benefit
of, the parties hereto and their respective successors and assigns. This
Assignment may be executed in any number of counterparts, which together shall
constitute one instrument. Delivery of an executed counterpart of a signature
page of this Assignment by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the laws of the State of New
York.

 

E-6

 

EXHIBIT F TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF CERTIFICATE RE NON-BANK
STATUS

 

Reference is
made to the Credit and Guaranty Agreement, dated as of March 9,
2007 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”; the terms defined therein and not
otherwise defined herein being used herein as therein defined), by and among RELIANT  PHARMACEUTICALS, INC.
(“Company”), CERTAIN
SUBSIDIARIES OF COMPANY, as Guarantor Subsidiaries, the Lenders
party thereto from time to time and GOLDMAN SACHS CREDIT
PARTNERS L.P., as Lender, Sole Lead Arranger, Sole Bookrunner,
Syndication Agent, Administrative Agent and Collateral Agent. Pursuant to Section 2.20(c) of
the Credit Agreement, the undersigned hereby certifies that it is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code of 1986, as amended.

 

	
   

  	
  [NAME OF
  LENDER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

F-1

 

EXHIBIT G-1 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF CLOSING DATE CERTIFICATE

 

THE
UNDERSIGNED HEREBY CERTIFY AS FOLLOWS:

 

1.                                       We
are, respectively, the Chief Executive Officer and the Chief Financial Officer
of RELIANT PHARMACEUTICALS, INC. (the “Company”).

 

2.                                       Pursuant
to Section 2.1 of the Credit and Guaranty Agreement dated as of March 9,
2007 (as it may be amended, supplemented or otherwise modified, the “Credit Agreement”) among the Company; certain Subsidiaries
of the Company, as Subsidiary Guarantors, the other lenders from time to time
party thereto and Goldman Sachs Credit Partners L.P., as Lender, Lead Arranger,
Sole Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent,
the Company requests that Lenders thereunder make a $170,000,000
Loan to the Company on March 9, 2007 (the “Closing Date”).

 

3.                                       We
have reviewed the terms of Section 3 of the Credit Agreement and the
definitions and provisions contained in the Credit Agreement relating thereto,
and in our opinion we have made, or have caused to be made under our
supervision, such examination or investigation as is necessary to enable us to
express an informed opinion as to the matters referred to herein.

 

4.                                       Capitalized
terms used but not otherwise defined herein have the meanings ascribed to them
in the Credit Agreement.

 

5.                                       Based
upon our review and examination described in paragraph 3 above, we certify, on
behalf of Company, that as of the date hereof:

 

a.                                       as
of the Closing Date, the representations and warranties contained in the Credit
Agreement are true and correct in all material respects on and as of the
Closing Date to the same extent as though made on and as of such date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties are true and
correct in all respects on and as of such earlier date;

 

b.                                      as
of the Closing Date, there does not exist any action, suit, investigation,
litigation or proceeding pending or threatened in writing in any court or
before any arbitrator or Governmental Authority that individually or in the
aggregate would reasonably be expected to have a Material Adverse Effect; and

 

c.                                       as
of the Closing Date, no event has occurred and is continuing or would result
from the consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Default.

 

6.                                       Each
Credit Party has requested outside counsel to deliver to Agents and Lenders on
the Closing Date favorable written opinions setting forth substantially the
matters in the opinions designated in Exhibit D-1 and D-2, annexed to the
Credit Agreement and otherwise in form and substance reasonably satisfactory to
Lenders and their respective counsel.

 

7.                                       Attached
hereto as Annex A are true and complete copies of (a) the Historical
Financial Statements, and (b) the Projections.

 

G-1-1

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

 

G-1-2

 

The foregoing
certifications are made and delivered as of March       ,
2007.

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:
  Bradley Shears

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name: Robert
  Ferguson III

  
	
   

  	
  Chief
  Financial Officer

  

 

G-1-3

 

ANNEX A

 

Historical Financial Statements and
Projections.

 

G-1-4

 

EXHIBIT G-2 TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF SOLVENCY CERTIFICATE

 

THE
UNDERSIGNED HEREBY CERTIFIES AS FOLLOWS:

 

1.                                       I
am the Chief Financial Officer of RELIANT PHARMACEUTICALS,
INC., a Delaware corporation (“Company”).

 

2.                                       Reference
is made to that certain Credit and Guaranty Agreement dated as of March 9, 2007
(as it may be amended, supplemented or otherwise modified, the “Credit Agreement”) among the Company; certain Subsidiaries
of the Company, as Subsidiary Guarantors; the Lenders from time to time party
thereto; and Goldman Sachs Credit Partners L.P., as Lender, Lead Arranger, Sole
Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent.

 

3.                                       Capitalized
terms used but not otherwise defined herein have the meanings ascribed to them
in the relevant Loan Agreement.

 

4.                                       I
have reviewed the terms of Sections 3 and 4 of the Credit Agreement and the
definitions and provisions contained in the Credit Agreement relating thereto,
and, in my opinion, have made, or have caused to be made under my supervision,
such examination or investigation as is necessary to enable me to express an
informed opinion as to the matters referred to herein.

 

5.                                       Based
upon my review and examination described in paragraph 4 above, I certify that
as of the date hereof, after giving effect to the consummation of the related
financings and the transactions contemplated by the Credit Documents (as
defined in the Credit Agreement), the Company and its Subsidiaries taken as a
whole is Solvent.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

G-2-1

 

The foregoing
certifications are made and delivered as of March       ,
2007.

 

	
   

  	
  RELIANT
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:  Robert Ferguson III

  
	
   

  	
  Chief
  Financial Officer

  

 

G-2-2

 

EXHIBIT H TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF COUNTERPART AGREEMENT

 

This COUNTERPART AGREEMENT, dated [mm/dd/yy]
(this “Counterpart Agreement”) is delivered
pursuant to that certain Credit and Guaranty Agreement, dated as of March 9, 2007 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”;
the terms defined therein and not otherwise defined herein being used herein as
therein defined), by and among RELIANT PHARMACEUTICALS, INC.
(“Company”), CERTAIN
SUBSIDIARIES OF COMPANY, as Guarantor Subsidiaries, the Lenders
party thereto from time to time and GOLDMAN SACHS CREDIT
PARTNERS L.P., as Lender, Sole Lead Arranger, Sole Bookrunner,
Syndication Agent, Administrative Agent and Collateral Agent.

 

Section 1.
Pursuant to Section 5.10 of the Credit Agreement,
the undersigned hereby:

 

(a)                                  agrees
that this Counterpart Agreement may be attached to the Credit Agreement and
that by the execution and delivery hereof, the undersigned becomes a Guarantor
under the Credit Agreement and agrees to be bound by all of the terms thereof;

 

(b)                                 represents
and warrants that each of the representations and warranties set forth in the
Credit Agreement and each other Credit Document and applicable to the
undersigned is true and correct both before and after giving effect to this
Counterpart Agreement, except to the extent that any such representation and
warranty relates solely to any earlier date, in which case such representation
and warranty is true and correct as of such earlier date;

 

(c)                                  no
event has occurred or is continuing as of the date hereof, or will result from
the transactions contemplated hereby on the date hereof, that would constitute
an Event of Default or a Default;

 

(d)                                 agrees
to irrevocably and unconditionally guaranty the due and punctual payment in
full of all Obligations when the same shall become due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand or
otherwise (including amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
§ 362(a)) and in accordance with Section 7 of the Credit Agreement;
and

 

(e)                                  the
undersigned hereby (i) agrees that this counterpart may be attached to the
Pledge and Security Agreement, (ii)  agrees that the undersigned will
comply with all the terms and conditions of the Security Agreement as if it
were an original signatory thereto, (iii)  grants to Secured Party (as
such term is defined in the Pledge and Security Agreement) a security interest
in all of the undersigned’s right, title and interest in and to all “Collateral”
(as such term is defined in the Pledge and Security Agreement) of the
undersigned, in each case whether now or hereafter existing or in which the
undersigned now has or hereafter acquires an interest and wherever the same may
be located and (iv)  delivers to Collateral Agent supplements to all
schedules attached to the Pledge and Security Agreement. All such Collateral
shall be deemed to be part of the “Collateral” and
hereafter subject to each of the terms and conditions of the Pledge and
Security Agreement.

 

Section 2.
The undersigned agrees from time to time, upon request
of Administrative Agent, to take such additional actions and to execute and
deliver such additional documents and instruments as Administrative Agent  may request to effect the transactions
contemplated by, and to carry out the intent of, this Agreement. Neither this
Agreement nor any term hereof may be changed, waived, discharged or

 

H-1

 

terminated, except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Agreement) against whom enforcement of such change, waiver,
discharge or termination is sought. Any notice or other communication herein
required or permitted to be given shall be given in pursuant to Section 10.1
of the Credit Agreement, and all for purposes thereof, the notice address of
the undersigned shall be the address as set forth on the signature page hereof.
In case any provision in or obligation under this Agreement 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.

 

THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND

ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

H-2

 

IN WITNESS
WHEREOF, the undersigned has caused this Counterpart
Agreement to be duly executed and delivered by its duly authorized officer as
of the date above first written.

 

	
   

  	
  [NAME OF
  SUBSIDIARY]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
  Address for
  Notices:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopier

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy
  to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Attention:

  	
   

  
	
   

  	
  Telecopier

  	
   

  
	
  ACKNOWLEDGED
  AND ACCEPTED,

  	
   

  
	
    as
  of the date above first written:

  	
   

  
	
   

  	
   

  
	
  GOLDMAN
  SACHS CREDIT PARTNERS L.P.,

  	
   

  
	
     as
  Administrative Agent and Collateral Agent

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
						

 

H-3

 

EXHIBIT K TO

CREDIT AND GUARANTY AGREEMENT

 

FORM OF PERSONAL PROPERTY
COLLATERAL ACCESS AGREEMENT

 

This PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT (this “Agreement”) is dated as of [        ]
[   ], 2007 and entered into by [                    ]
(“Warehouser”), GOLDMAN
SACHS CREDIT PARTNERS L.P. (“GSCP”), as
administrative agent and collateral agent (the “Agent”)
for the lenders (collectively, the “Lenders”) from
time to time party to the Credit and Guaranty Agreement (as defined below)
(Agent and Lenders, collectively, the “Secured Parties”).

 

RECITALS:

 

WHEREAS,
reference is made to that certain Credit and Guaranty Agreement, dated as of March 9, 2007 (as it may be amended, supplemented or
otherwise modified, the “Credit Agreement”),
by and among Reliant Pharmaceuticals, Inc. (the “Company”),
certain Subsidiaries of the Company, as Subsidiary Guarantors, the Lenders
party thereto from time to time and GSCP, as Lender, Sole Lead Arranger, Sole
Bookrunner, Syndication Agent, Administrative Agent and Collateral Agent,
pursuant to which Company has executed that certain Pledge and Security
Agreement and other Collateral Documents in relation to the Credit Agreement;

 

WHEREAS,
Company and Warehouser have entered into a servicing agreement (the “Servicing Agreement”) pursuant to which Warehouser has
possession of and holds all or a portion of the Company’s Inventory described
on Exhibit A annexed hereto at the Warehouser’s facility located at
its address listed on the signature page (the “Premises”);

 

WHEREAS,
Company’s repayment of the extensions of credit made by the Secured Parties
under the Credit Agreement will be secured, in part, by all Inventory of
Company (including all Inventory of Company now or hereafter located on the
Premises (the “Subject Collateral”));

 

WHEREAS,
the Secured Parties have requested that Warehouser execute this Agreement as a
condition to the extension of credit to Company under the Credit Agreement; and

 

WHEREAS,
Capitalized terms used but not otherwise defined herein have the meanings
ascribed to them in the Credit Agreement.

 

NOW,
THEREFORE, in consideration of these premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Warehouser hereby represents and warrants to, and
covenants and agrees with, the Secured Parties as follows:

 

1.                                       Warehouser
hereby (a) waives and releases unto each of the Agent and its successors
and assigns any and all rights granted by or under any present or future laws
to levy or distraint for rent or any other charges which may be due to
Warehouser against the Subject Collateral, and any and all other claims, liens
and demands of every kind which it now has or may hereafter have against the
Subject Collateral, and (b) agrees that any rights it may have in or to
the Subject Collateral, no matter how arising (to the extent not effectively
waived pursuant to clause (a) of this paragraph 1), shall be subordinate
to the rights of Secured Parties under the Credit Agreement and the Pledge and
Security Agreement. Warehouser acknowledges that the Subject Collateral is and
will remain personal property of the Company.

 

K-1

 

2.                                       Warehouser
certifies that (a) Warehouser is the Warehouser under the Servicing
Agreement, (b) the Servicing Agreement is in full force and effect and has
not been amended, modified, or supplemented except as set forth on Exhibit B
annexed hereto, (c) to the knowledge of Warehouser, there is no defense,
offset, claim or counterclaim by or in favor of Warehouser against Company
under the Servicing Agreement or against the obligations of Warehouser under
the Servicing Agreement, (d)  no notice of default has been given under or
in connection with the Servicing Agreement which has not been cured, and
Warehouser has no knowledge of the occurrence of any other default under or in
connection with the Servicing Agreement, and (e)  except as disclosed to
Secured Parties, no portion of the Premises is encumbered in any way by any
deed of trust or mortgage lien or ground or superior lease.

 

3.                                       Warehouser
consents to the placement of the Subject Collateral in the Premises, and
Warehouser grants to Agent a license to enter upon and into the Premises to do
any or all of the following with respect to the Subject Collateral: assemble,
have appraised, display, remove, maintain, prepare for sale or lease, repair,
transfer, or sell (at public or private sale). In entering upon or into the
Premises, Agent hereby agrees to indemnify, defend and hold Warehouser harmless
from and against any and all claims, judgments, liabilities, costs and expenses
incurred by Warehouser caused solely by Agent’s entering upon or into the
Premises and taking any of the foregoing actions with respect to the Subject
Collateral. Such costs shall include any damage to the Premises made by Agent
in severing and/or removing the Subject Collateral therefrom.

 

4.                                       Warehouser
agrees that it will not prevent Agent or its designee from entering upon the
Premises at all reasonable times to inspect or remove the Collateral. In the
event that Warehouser has the right to, and desires to, terminate the Servicing
Agreement, Warehouser will deliver notice (the “Warehouser’s Notice”) to each Collateral Agent to that effect. Within
the 45-day period after Agent receives the Warehouser’s Notice, Agent shall
have the right, but not the obligation, to cause the Subject Collateral to be
removed from the Premises. During such 45-day period, Warehouser will not
remove the Subject Collateral from the Premises nor interfere with Agent’s
actions in removing the Subject Collateral from the Premises or Agent’s actions
in otherwise enforcing its security interest in the Subject Collateral. Notwithstanding
anything to the contrary in this paragraph, Agent shall at no time have any
obligation to remove the Subject Collateral from the Premises.

 

5.                                       Warehouser
shall send to the Secured Parties a copy of any notice of default under the
Servicing Agreement sent by Warehouser to Company. In addition, Warehouser
shall send to Agent a copy of any notice received by Warehouser of a breach or
default under any other lease, mortgage, deed of trust, security agreement or
other instrument to which Warehouser is a party which may affect Warehouser’s
rights in, or possession of, the Premises.

 

6.                                       All
notices to the Secured Parties under this Agreement shall be in writing and
sent to the Agent at its address set forth on the signature page hereof by
facsimile, by electronic communication, by United States mail, or by overnight
delivery service.

 

7.                                       The
provisions of this Agreement shall continue in effect until Warehouser shall
have received Agent’s written certification that all amounts advanced under
each of the Agreements have been paid in full, in accordance with their
respective terms.

 

8.                                       This
Agreement and the rights and obligations of the parties hereunder shall be
governed by, and shall be construed and enforced in accordance with, the laws
of the State of New York.

 

K-2

 

[SIGNATURES FOLLOW ON NEXT PAGE]

 

K-3

 

IN WITNESS
WHEREOF, the undersigned have caused this Agreement to
be duly executed and delivered as of the day and year first set forth above.

 

 

	
  NOTICE ADDRESS:

  	
  “WAREHOUSER”

  
	
   

  	
   

  
	
  [                  ]

  	
  [                  ]

  
	
   

  	
   

  
	
  PREMISES

  	
  By:

  	
   

  	
   

  
	
  (if different from address listed above):

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							

 

K-4

 

By its
acceptance hereof, as of the day and year first set forth above, the Secured
Parties agree to be bound by the provisions hereof.

 

 

	
  NOTICE ADDRESS:

  	
  “AGENT”

  
	
   

  	
   

  
	
  85 Broad Street

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.

  
	
  New York, NY 10004

  	
   

  
	
  Attention:  Elizabeth Fischer

  	
  By:

  	
   

  	
   

  
	
  Telecopier:  (212) 902-1021

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

K-5

 

EXHIBIT A TO

PERSONAL PROPERTY COLLATERAL ACCESS AGREEMENT

 

Legal
Description of Inventory:Exhibit
10.32

 

CREDIT
AGREEMENT

 

DATED AS OF
AUGUST 19, 2004

 

AMONG

 

RELIANT
PHARMACEUTICALS, INC.,

a Delaware
corporation, as Borrower,

 

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

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  1

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
  Section
  1.1

  	
   

  	
  Certain
  Defined Terms.

  	
   

  	
  1

  
	
  Section
  1.2

  	
   

  	
  Accounting
  Terms and Determinations.

  	
   

  	
  14

  
	
  Section
  1.3

  	
   

  	
  Other
  Definitional Provisions.

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  2

  	
   

  	
  LOANS

  	
   

  	
  15

  
	
  Section
  2.1

  	
   

  	
  Reserved.

  	
   

  	
  15

  
	
  Section
  2.2

  	
   

  	
  Revolving
  Loans.

  	
   

  	
  15

  
	
  Section
  2.3

  	
   

  	
  Interest,
  Interest Calculations and Certain Fees.

  	
   

  	
  17

  
	
  Section
  2.4

  	
   

  	
  Notes.

  	
   

  	
  18

  
	
  Section
  2.5

  	
   

  	
  Reserved.

  	
   

  	
  19

  
	
  Section
  2.6

  	
   

  	
  General
  Provisions Regarding Payment; Loan Account.

  	
   

  	
  19

  
	
  Section
  2.7

  	
   

  	
  Maximum
  Interest.

  	
   

  	
  19

  
	
  Section
  2.8

  	
   

  	
  Taxes.

  	
   

  	
  20

  
	
  Section
  2.9

  	
   

  	
  Capital
  Adequacy.

  	
   

  	
  22

  
	
  Section
  2.10

  	
   

  	
  Collections
  and Lockbox Account.

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  3

  	
   

  	
  REPRESENTATION
  AND WARRANTIES

  	
   

  	
  24

  
	
  Section
  3.1

  	
   

  	
  Existence
  and Power.

  	
   

  	
  25

  
	
  Section
  3.2

  	
   

  	
  Organization
  and Governmental Authorization; No Contravention.

  	
   

  	
  25

  
	
  Section
  3.3

  	
   

  	
  Binding
  Effect.

  	
   

  	
  25

  
	
  Section
  3.4

  	
   

  	
  Capitalization.

  	
   

  	
  25

  
	
  Section
  3.5

  	
   

  	
  Financial
  Information.

  	
   

  	
  26

  
	
  Section
  3.6

  	
   

  	
  Litigation.

  	
   

  	
  26

  
	
  Section
  3.7

  	
   

  	
  Ownership
  of Property.

  	
   

  	
  26

  
	
  Section
  3.8

  	
   

  	
  No
  Default.

  	
   

  	
  27

  
	
  Section
  3.9

  	
   

  	
  Labor
  Matters.

  	
   

  	
  27

  
	
  Section
  3.10

  	
   

  	
  Regulated
  Entities.

  	
   

  	
  27

  
	
  Section
  3.11

  	
   

  	
  Margin
  Regulations.

  	
   

  	
  27

  
	
  Section
  3.12

  	
   

  	
  Compliance
  With Laws

  	
   

  	
  27

  
	
  Section
  3.13

  	
   

  	
  Taxes.

  	
   

  	
  27

  
	
  Section
  3.14

  	
   

  	
  Compliance
  with ERISA.

  	
   

  	
  28

  
	
  Section
  3.15

  	
   

  	
  Brokers.

  	
   

  	
  29

  
	
  Section
  3.16

  	
   

  	
  Reserved.

  	
   

  	
  29

  
	
  Section
  3.17

  	
   

  	
  Collective
  Bargaining Agreements.

  	
   

  	
  29

  
	
  Section
  3.18

  	
   

  	
  Compliance
  with Environmental Requirements; No Hazardous Materials.

  	
   

  	
  29

  
	
  Section
  3.19

  	
   

  	
  Intellectual
  Property.

  	
   

  	
  30

  
	
  Section
  3.20

  	
   

  	
  Real
  Property Interests.

  	
   

  	
  30

  
	
  Section
  3.21

  	
   

  	
  Solvency.

  	
   

  	
  30

  
	
  Section
  3.22

  	
   

  	
  Full
  Disclosure.

  	
   

  	
  30

  
	
  Section
  3.23

  	
   

  	
  OFAC
  Lists.

  	
   

  	
  31

  

 

i

 

	
  ARTICLE
  4

  	
   

  	
  AFFIRMATIVE
  COVENANTS

  	
   

  	
  31

  
	
  Section
  4.1

  	
   

  	
  Financial
  Statements and Other Reports.

  	
   

  	
  31

  
	
  Section
  4.2

  	
   

  	
  Payment
  and Performance of Obligations.

  	
   

  	
  34

  
	
  Section
  4.3

  	
   

  	
  Conduct
  of Business and Maintenance of Existence.

  	
   

  	
  35

  
	
  Section
  4.4

  	
   

  	
  Maintenance
  of Property; Insurance.

  	
   

  	
  35

  
	
  Section
  4.5

  	
   

  	
  Compliance
  with Laws.

  	
   

  	
  36

  
	
  Section
  4.6

  	
   

  	
  Inspection
  of Property, Books and Records.

  	
   

  	
  36

  
	
  Section
  4.7

  	
   

  	
  Use
  of Proceeds.

  	
   

  	
  37

  
	
  Section
  4.8

  	
   

  	
  Notification
  of Certain Events Pertaining to Collateral.

  	
   

  	
  37

  
	
  Section
  4.9

  	
   

  	
  Further
  Assurances.

  	
   

  	
  38

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  5

  	
   

  	
  NEGATIVE
  COVENANTS

  	
   

  	
  38

  
	
  Section
  5.1

  	
   

  	
  Debt.

  	
   

  	
  38

  
	
  Section
  5.2

  	
   

  	
  Liens.

  	
   

  	
  38

  
	
  Section
  5.3

  	
   

  	
  Restricted
  Distributions.

  	
   

  	
  40

  
	
  Section
  5.4

  	
   

  	
  Reserved.

  	
   

  	
  40

  
	
  Section
  5.5

  	
   

  	
  Reserved.

  	
   

  	
  40

  
	
  Section
  5.6

  	
   

  	
  Consolidations,
  Mergers and Sales of Assets.

  	
   

  	
  40

  
	
  Section
  5.7

  	
   

  	
  Purchase
  of Assets.

  	
   

  	
  41

  
	
  Section
  5.8

  	
   

  	
  Transactions
  with Affiliates.

  	
   

  	
  41

  
	
  Section
  5.9

  	
   

  	
  Modification
  of Organizational Documents.

  	
   

  	
  41

  
	
  Section
  5.10

  	
   

  	
  Fiscal
  Year.

  	
   

  	
  41

  
	
  Section
  5.11

  	
   

  	
  Conduct
  of Business.

  	
   

  	
  42

  
	
  Section
  5.12

  	
   

  	
  Bank
  Accounts.

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  6

  	
   

  	
  [INTENTIONALLY
  OMITTED]

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  7

  	
   

  	
  FINANCIAL
  COVENANTS

  	
   

  	
  42

  
	
  Section
  7.1

  	
   

  	
  Minimum
  Revenues

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  8

  	
   

  	
  CONDITIONS

  	
   

  	
  42

  
	
  Section
  8.1

  	
   

  	
  Conditions
  to Closing.

  	
   

  	
  42

  
	
  Section
  8.2

  	
   

  	
  Conditions
  to Each Loan.

  	
   

  	
  43

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  9

  	
   

  	
  EVENTS
  OF DEFAULT

  	
   

  	
  43

  
	
  Section
  9.1

  	
   

  	
  Events
  of Default.

  	
   

  	
  43

  
	
  Section
  9.2

  	
   

  	
  Acceleration
  and Suspension or Termination of Revolving Loan Commitment.

  	
   

  	
  45

  
	
  Section
  9.3

  	
   

  	
  Reserved

  	
   

  	
  46

  
	
  Section
  9.4

  	
   

  	
  Default
  Rate of Interest.

  	
   

  	
  46

  
	
  Section
  9.5

  	
   

  	
  Setoff
  Rights.

  	
   

  	
  46

  
	
  Section
  9.6

  	
   

  	
  Application
  of Proceeds.

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  10

  	
   

  	
  EXPENSES,
  INDEMNITY, TAXES AND RIGHT TO PERFORM

  	
   

  	
  47

  
	
  Section
  10.1

  	
   

  	
  Expenses.

  	
   

  	
  47

  
	
  Section
  10.2

  	
   

  	
  Indemnity.

  	
   

  	
  47

  
	
  Section
  10.3

  	
   

  	
  Taxes.

  	
   

  	
  48

  

 

ii

 

	
  Section
  10.4

  	
   

  	
  Right
  to Perform.

  	
   

  	
  48

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  11

  	
   

  	
  AGENT

  	
   

  	
  49

  
	
  Section
  11.1

  	
   

  	
  Appointment
  and Authorization.

  	
   

  	
  49

  
	
  Section
  11.2

  	
   

  	
  Agent
  and Affiliates.

  	
   

  	
  49

  
	
  Section
  11.3

  	
   

  	
  Action
  by Agent.

  	
   

  	
  49

  
	
  Section
  11.4

  	
   

  	
  Consultation
  with Experts.

  	
   

  	
  49

  
	
  Section
  11.5

  	
   

  	
  Liability
  of Agent.

  	
   

  	
  49

  
	
  Section
  11.6

  	
   

  	
  Indemnification.

  	
   

  	
  50

  
	
  Section
  11.7

  	
   

  	
  Right
  to Request and Act on Instructions.

  	
   

  	
  50

  
	
  Section
  11.8

  	
   

  	
  Credit
  Decision.

  	
   

  	
  51

  
	
  Section
  11.9

  	
   

  	
  Collateral
  Matters.

  	
   

  	
  51

  
	
  Section
  11.10

  	
   

  	
  Agency
  for Perfection.

  	
   

  	
  51

  
	
  Section
  11.11

  	
   

  	
  Notice
  of Default.

  	
   

  	
  51

  
	
  Section
  11.12

  	
   

  	
  Successor
  Agent.

  	
   

  	
  52

  
	
  Section
  11.13

  	
   

  	
  Disbursements
  of Revolving Loans; Payment.

  	
   

  	
  52

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  12

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  54

  
	
  Section
  12.1

  	
   

  	
  Survival.

  	
   

  	
  54

  
	
  Section
  12.2

  	
   

  	
  No
  Waivers.

  	
   

  	
  55

  
	
  Section
  12.3

  	
   

  	
  Notices.

  	
   

  	
  55

  
	
  Section
  12.4

  	
   

  	
  Severability.

  	
   

  	
  55

  
	
  Section
  12.5

  	
   

  	
  Amendments
  and Waivers.

  	
   

  	
  55

  
	
  Section
  12.6

  	
   

  	
  Assignments;
  Participations.

  	
   

  	
  56

  
	
  Section
  12.7

  	
   

  	
  Headings.

  	
   

  	
  58

  
	
  Section
  12.8

  	
   

  	
  Confidentiality.

  	
   

  	
  58

  
	
  Section
  12.9

  	
   

  	
  GOVERNING
  LAW; SUBMISSION TO JURISDICTION.

  	
   

  	
  58

  
	
  Section
  12.10

  	
   

  	
  WAIVER
  OF JURY TRIAL.

  	
   

  	
  59

  
	
  Section
  12.11

  	
   

  	
  Waiver
  of Consequential and Other Damages.

  	
   

  	
  59

  
	
  Section
  12.12

  	
   

  	
  Publication;
  Advertisement.

  	
   

  	
  59

  
	
  Section
  12.13

  	
   

  	
  Counterparts;
  Integration.

  	
   

  	
  60

  

 

iii

 

ANNEXES AND
EXHIBITS

 

	
  ANNEXES

  	
   

  	
   

  	
   

  	
   

  
	
  Annex
  A

  	
  -

  	
  Commitment
  Annex

  	
   

  	
   

  
	
  Annex
  B

  	
  -

  	
  Closing
  Checklist

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit
  A

  	
  -

  	
  Assignment
  Agreement

  	
   

  	
   

  
	
  Exhibit
  B

  	
  -

  	
  Notice
  of Borrowing

  	
   

  	
   

  
	
  Exhibit
  C

  	
  -

  	
  Compliance
  Certificate

  	
   

  	
   

  
	
  Exhibit
  D

  	
  -

  	
  Borrowing
  Base Certificate

  	
   

  	
   

  

 

 

CREDIT
AGREEMENT

 

CREDIT AGREEMENT dated as of August 19, 2004 among
RELIANT PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), the financial institutions
from time to time parties hereto, each as a Lender, and MERRILL LYNCH CAPITAL,
a division of Merrill Lynch Business Financial Services Inc., individually as a
Lender and as Agent.

 

RECITALS:

 

WHEREAS, Borrower desires that Lenders extend
certain revolving credit facilities to provide working capital financing for
Borrower and to provide funds for other general business purposes of Borrower;
and

 

WHEREAS, Borrower desires to secure all of its
Obligations under the Financing Documents by granting to Agent, for the benefit
of Agent and Lenders, a security interest in and lien upon all of its Accounts;
and

 

WHEREAS, each Subsidiary of Borrower is willing to
guaranty all of the Obligations of Borrower to Lenders under the Financing
Documents, and to grant to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon all of its Accounts.

 

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

 

ARTICLE 1

DEFINITIONS

 

Section 1.1 Certain
Defined Terms.

 

The following terms have the following meanings:

 

“Account” means, collectively, (a) any accounts receivable
for goods sold and services rendered by Borrower (including, without
limitation, all promotional fees, service fees and other similar fees owing to
Borrower from Novartis under and as described in the Novartis Agreement) or any
of Borrower’s Subsidiaries, or rents, license fees, “payment intangibles” (as
that term is defined in the UCC now or hereafter in effect) or otherwise in
respect of the foregoing and (b) all proceeds of any of the foregoing.

 

“Account Debtor”
means “account debtor”, as defined in Article 9 of the UCC.

 

“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) in the case of an individual, the
parents, descendants, siblings and spouse of such individual. As used in this
definition, the term “control” of
a Person means the possession, directly or indirectly, of the power to vote ten

 

1

 

percent
(10%) 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.

 

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

 

“Agent Advances”
has the meaning set forth in Section 2.2(a)(ii).

 

“Agreement”
means this Credit Agreement, as the same may be amended, supplemented, restated
or otherwise modified from time to time.

 

“Approved Goods or
Services” means goods sold or services rendered by Borrower in the
ordinary course of business, in compliance with all material Laws, to the
extent the failure to so comply would materially impact the ability of Borrower
to collect amounts owing from such sale, and reasonably related to the type of
goods sold or services rendered by Borrower throughout all or substantially all
of its business operations as of the Closing Date.

 

“Asset Disposition”
means any sale, lease, license or other consensual disposition by any Credit
Party of any asset, but excluding dispositions of Inventory and Equipment in
Borrower’s ordinary course of business.

 

“Assignee”
has the meaning set forth in Section 12.6(a).

 

“Assignment
Agreement” means an agreement substantially in the form of Exhibit
A hereto.

 

“Blocked Account”
has the meaning set forth in Section 6.1(d).

 

“Borrower”
means Reliant.

 

“Borrower’s
Account” means the account specified on the signature pages hereof
below Borrower’s name into which Loans (other than Agent Advances, which shall
be disbursed by Agent in a manner permitted by Section 2.2(a)(ii)) shall,
absent other written instructions, be made, or such other account as Borrower
may specify by written notice to Agent.

 

“Borrowing Base”
means, as of any date of calculation, a dollar amount calculated pursuant to
the Borrowing Base Certificate most recently delivered to Agent in accordance
with the terms hereof, equal to the sum of eighty-five percent (85%) of
Eligible Accounts minus reserves then established by Agent in its
commercially reasonable credit judgment. Notwithstanding the foregoing, in no
event shall (i) the aggregate Eligible Accounts receivable from Novartis
constitute more than seventy-five percent (75%) of all Eligible Accounts used
in the calculation of the Borrowing Base, (ii) the aggregate Eligible Accounts
receivable from each of Cardinal Health, McKesson Corporation or
AmerisourceBergen Services Corporation individually (and not collectively)
constitute more

 

2

 

than
forty percent (40%) of all Eligible Accounts used in the calculation of
Borrowing Base, or (iii) the aggregate Eligible Accounts receivable from any
other Account Debtor constitute more than twenty percent (20%) of all Eligible
Accounts used in the calculation of the Borrowing Base.

 

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

 

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

 

“Capital Lease”
of any Person means any lease of any property by such Person as lessee that
would, in accordance with GAAP, be required to be accounted for as a capital
lease on the balance sheet of such Person.

 

“Change of Control” means, at any time, any Person or ‘group”
(within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act) other than
Specified Holders (a) shall have acquired beneficial ownership of 51% or more
on a fully diluted basis of the voting interests in the capital stock of
Borrower or (b) shall have obtained the power (whether or not exercised) to
elect a majority of the members of the board of directors (or similar governing
body) of Borrower.

 

“Closing Checklist”
means the closing checklist attached as Annex B to this Agreement.

 

“Closing Date”
means the date of this Agreement.

 

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

 

“Collateral”
means all property, now existing or hereafter acquired, mortgaged or pledged
to, or purported to be subjected to a Lien in favor of, Agent, for the benefit
of Agent and Lenders, pursuant to the Security Documents.

 

“Commitment Annex”
means Annex A to this Agreement.

 

“Commitment Expiry
Date” means August 19, 2007.

 

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

 

“Consolidated
Subsidiary” means at any date any Subsidiary or other Person the
accounts of which would be consolidated with those of Borrower in its
consolidated financial statements if such statements were prepared as of such
date.

 

3

 

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

 

“Credit Exposure”
means any period of time during which the Revolving Loan Commitment is
outstanding or any Loan or other Obligation remains unpaid; provided, that no Credit Exposure shall be
deemed to exist solely due to the existence of contingent indemnification
liability, absent the assertion of a claim with respect thereto.

 

“Credit Party”
means Borrower and each Subsidiary.

 

“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
(excluding any such obligations under ERISA) which purchase price is due more
than six months from the date of incurrence, except trade accounts payable
arising and paid in the ordinary course of business, (d) all Capital Leases of
such Person properly classified as a liability on a balance sheet in accordance
with GAAP, (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 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, provided, that if
such obligations is not an obligation of such Person, such obligations
constitutes Debt of such other Person, and (h) all Debt of others Guaranteed by
such Person.

 

“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.

 

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

 

“Deposit Account”
means a “deposit account” (as defined in Article 9 of the UCC) of Borrower or
any of its Subsidiaries.

 

“Deposit Account
Control Agreement” means an agreement, in form and substance
satisfactory to Agent, among Agent, Borrower or a Subsidiary of Borrower
maintaining a Deposit Account at any bank, and such bank.

 

“EBITDA”
has the meaning as defined pursuant to the terms of the Compliance Certificate.

 

“Eligible Accounts”
has the meaning set forth below; provided,
that Agent may, from time to time, in the exercise of its commercially
reasonable credit judgment, and

 

4

 

following
written notice to the Borrower, change the criteria for Eligible Accounts set
forth below based on either: (a) an event, condition or other circumstance
arising after the Closing Date, or (b) an event, condition or other
circumstance existing on the Closing Date to the extent Agent has no notice
thereof from a Credit Party prior to the Closing Date, in either case under
clause (a) or (b) that materially and adversely affects or, in the good faith
credit judgment and discretion of Agent, could be expected to materially and
adversely affect the Accounts. For purposes of this Agreement, the net amount
of Eligible Accounts at any time shall be the face amount of such Eligible
Accounts less any and all, rebates (excluding rebates in connection with
Medicare, Medicaid and managed care contracts), discounts (which may, at Agent’s
option, be calculated on shortest terms), credits, allowances or excise taxes
of any nature at any time issued, owing, claimed by Account Debtors, granted,
outstanding or payable in connection with such Accounts at such time. Any
Accounts, which are not Eligible Accounts, shall nevertheless be part of the
Collateral. Subject to the foregoing, “Eligible
Account” means an Account of a Borrower, which was generated in
Borrower’s ordinary course of business, which was generated originally in the
name of the Borrower and not acquired via assignment or otherwise, and which
Agent, in its good faith commercially reasonable credit judgment and
discretion, deems to be an Eligible Account. Without limiting the generality of
the foregoing, no Account shall be an Eligible Account if:

 

5

 

(i) the Account remains unpaid more than sixty days
(60) days past its due date (but in any event no event more than: (x) two
hundred and twenty-five (225) days after the applicable goods have been
delivered in the case of Accounts arising from the sale of goods (and not
rendering of services) subject to special promotion terms during the first
month prior to and/or the first six (6) months following the initial shipment
of a newly available product, or (y) one hundred and five (105) days after the
applicable goods or services have been delivered or rendered in the case of all
other goods or services);

 

(ii) to the extent the Account is subject to any
defense, set-off, recoupment, counterclaim, deduction, discount, credit,
chargeback, freight claim, allowance, or adjustment of any kind to the extent
outside of the ordinary course of business (excluding rebates in connection
with Medicare, Medicaid and managed care contracts), or the applicable Borrower
is not able to bring suit or otherwise enforce its remedies against the Account
Debtor through judicial process, it being understood in each case that the
remaining balance of the Account shall be considered eligible, subject to
compliance with this definition of “Eligible Accounts”;

 

(iii) to the extent any part of any goods the sale
of which has given rise to the Account has been returned, rejected, lost, or
damaged, it being understood in each case that the remaining balance of the
Account shall be considered eligible, subject to compliance with this
definition of “Eligible Accounts”;

 

(iv) if the Account arises from the sale of goods,
the sale was not an absolute, bona  fide sale, or the sale was
made on consignment or on approval or on a sale-or-return or bill-and-hold or
progress billing basis, or the Account is not the valid, legally enforceable
obligations of the Account Debtor, or the sale was not made in compliance with
applicable Laws;

 

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

 

(vi) the Account is subject to a Lien other than a
Permitted Lien, or Lender does not have a first priority Lien on such Account
(including, without limitation, Accounts with respect to which Lender has
released its Lien in connection with the Borrower’s entry into a third-party
secured Debt facility following the Closing Date);

 

(vii) the Account is evidenced by chattel paper or
an instrument of any kind, or has been reduced to judgment, unless such chattel
paper or instrument has been delivered to Agent;

 

(viii) the Account Debtor is an Affiliate or
Subsidiary of a Credit Party, or, unless the Agent otherwise agrees in writing,
if the Account Debtor holds any Debt of a Credit Party;

 

6

 

(ix) more than twenty percent (20%) of the aggregate
balance of all Accounts owing from the Account Debtor obligated on the Account
are outstanding more than ninety (90) days past their due date (unless
otherwise approved in writing by Agent);

 

(x) fifty percent (50%) or more of the aggregate
unpaid Accounts from any single Account Debtor are not deemed Eligible Accounts
under this clauses (i), (viii) and (ix) of this definition of “Eligible
Accounts” (for the purposes of clarification, the ineligibility related to this
clause (x) shall only apply to each particular Account Debtor, fifty percent
(50%) of whose Accounts are not deemed Eligible Accounts due to the operation
of clause (i), (viii) and (ix) above);

 

(xi) reserved;

 

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

 

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

 

(xiv) the Account is an obligation of an Account
Debtor that has suspended business, made a general assignment for the benefit
of creditors, is unable to pay its debts as they become due or as to which a
petition has been filed (voluntary or involuntary) under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors;

 

(xv) the Account Debtor has its principal place of
business or executive office outside the United States (unless such foreign
Account Debtor’s Account is backed by a letter of credit by a domestic bank in
favor of the Borrower, a first priority perfected security interest in which
has been granted by Borrower in favor of Agent, each of the foregoing in form
and substance acceptable to Agent) or the Account is payable in a currency
other than United States dollars;

 

(xvi) the Account Debtor is an individual;

 

(xvii) the Account does not arise from the sale of
Approved Goods or Services;

 

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

 

(xix) the Account exceeds any credit limit
established by Agent in its commercially reasonable credit judgment (in which
case only such excess shall be considered ineligible), provided that any
Accounts outstanding at the time of the imposition of such credit limit shall
not be deemed ineligible solely due to the creation of such credit limit.

 

7

 

“Environmental
Laws” means any and all federal, state, local and foreign statutes,
laws, regulations, ordinances, rules, judgments, orders, decrees, codes,
permits, licenses, agreements and governmental restrictions, whether now or
hereafter in effect, relating to the environment or the effect of the
environment on human health or to emissions, discharges or releases of
pollutants, contaminants, Hazardous Materials or wastes into the environment,
including ambient air, surface water, ground water or land, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, Hazardous
Materials or wastes or the clean-up or other remediation thereof.

 

“Equipment”
means, collectively, “equipment” and “fixtures” (as each term is defined in
Article 9 of the UCC) of Borrower and the Subsidiaries.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

 

“ERISA Plan” means any “employee benefit plan”, as such
term is defined in Section 3(3) of ERISA (other than a Multiemployer Pension
Plan) including, without limitation, a Pension Plan, which Borrower maintains,
sponsors or contributes to.

 

“Event of Default”
has the meaning set forth in Section 9.1.

 

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

 

“Financing
Documents” means this Agreement, the Notes, the Security Documents,
the Information Certificate, any fee letter among Merrill Lynch and Borrower
relating to the transactions contemplated hereby and all other documents,
instruments and agreements contemplated herein or thereby and executed
concurrently herewith or 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.

 

“Fiscal Year”
means a fiscal year of Borrower, ending on December 31 of each calendar year.

 

“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 U.S.
accounting profession), which are applicable to the circumstances as of the
date of determination.

 

8

 

“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 (whether arising by virtue of partnership arrangements (such
Guarantee shall be valued at the actual liability to such partner), by
agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), or
(b) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part), provided 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.

 

“Hazardous
Materials” means (a) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
(b) asbestos, (c) polychlorinated biphenyls, (d) petroleum, its derivatives,
by-products and other hydrocarbons and (e) any other toxic, radioactive, caustic
or otherwise hazardous substance regulated under Environmental Laws.

 

“Hazardous
Materials Contamination” means contamination (whether now existing
or hereafter occurring) of the improvements, buildings, facilities,
personality, 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.

 

“Indemnitees”
has the meaning set forth in Section 10.2.

 

“Information
Certificate” means that certain Information Certificate of even date
herewith executed by Borrower and delivered to Agent, as amended pursuant to
Section 12.7 hereof.

 

“Intellectual
Property” means, with respect to any Person, all patents,
trademarks, trade names, copyrights, technology, know-how and processes, and
all applications therefor, used in or necessary for the conduct of business by
such Person.

 

“Inventory”
means all inventory, merchandise, goods and other personal property that are
held by or on behalf of Borrower for sale or lease or are distributed or are to
be distributed under a contract of service, or that constitute raw materials,
Work-In-Process, finished goods, returned goods or materials or supplies of any
kind, nature or description used or consumed or to be used or consumed in
Borrower’s business or in the processing, production, refurbishment, packaging,
labeling, promotion, delivery or shipping of the same, including all supplies
and embedded software, and all substitutions, replacements, additions or
accessions thereof and thereto. Without limiting the generality of the
foregoing, the term “Inventory” shall further include any “inventory” (as that
term is defined in Article 9 of the Uniform Commercial Code now or hereafter in
effect) of Borrower and the Subsidiaries.

 

9

 

“Investment”
means any investment in any Person, whether by means of acquiring or holding
securities, capital contribution, loan, time deposit or advance.

 

“Laws”
means, collectively, all federal, state and local laws, statutes, codes,
ordinances, orders, rules and regulations, including judicial opinions or
presidential authority in the applicable jurisdiction, now or hereafter in
effect, and in each case as amended or supplemented from time to time.

 

“Lender”
means each of (a) Merrill Lynch, (b) each other financial institution party
hereto, (c) each other Person that becomes a holder of a Note pursuant to
Section 12.6, (d) Agent, to the extent of any Agent Advances and other
Revolving Loans made by Agent which have not been settled among Lenders
pursuant to Section 11.13, and (e) the respective successors of all of the foregoing,
and Lenders means all of the foregoing.

 

“LIBOR”
means a rate per annum (rounded upwards, if necessary, to the nearest 1/16 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 the first day of each calendar month, for loans in U.S. dollars for the
period of one (1) month under the caption British Bankers Association LIBOR
Rates as of 11:00 a.m. (London time); 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 no longer reports the LIBOR
or Agent determines in good faith that the rate so reported no longer
accurately reflects the rate available to 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 Agent in the London Interbank Market,
Agent may select a replacement index or replacement page, as the case may be.

 

“LIBOR Margin”
means three percent (3.0%) per annum.

 

“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.

 

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

 

“Loans”
means the Revolving Loans.

 

“Lockbox”
has the meaning set forth in Section 2.10(a).

 

“Lockbox Bank”
has the meaning set forth in Section 2.10(a).

 

“Margin Stock”
has the meaning assigned thereto in Regulation U of the Federal Reserve Board.

 

“Material Adverse
Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation,

 

10

 

arbitration,
or governmental investigation or proceeding), whether singly or in conjunction
with any other event or events, act or acts, condition or conditions,
occurrence or occurrences, whether or not related, a material adverse change
in, or a material adverse effect upon, any of (a) the financial condition,
operations, business or properties of the Borrower (or the Credit Parties taken
as a whole), (b) the rights and remedies of Agent or Lenders under any
Financing Document, or the ability of any Credit Party to perform any of its
obligations under any Financing Document to which it is a party, or (c) the
existence, perfection or priority of any security interest granted in any
Financing Document with respect to any material Collateral or the value of any
material Collateral.

 

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

 

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

 

“Multiemployer
Pension Plan” means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Borrower or any member of the Controlled Group
may have any liability.

 

“Net Borrowing
Availability” has the meaning provided in the Borrowing Base
Certificate.

 

“Notes”
means the Revolving Loan Notes.

 

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

 

“Novartis
Agreement” means that certain Promotion Agreement dated as of
November 16, 2000 between Novartis Pharmaceuticals Corporation and Reliant
Pharmaceuticals, LLC, as amended.

 

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

 

“OFAC Lists”
means, collectively, the specially Designated Nationals and Blocked Persons
List maintained by the Office of Foreign Asset Control, Department of the
Treasury pursuant to Executive Order No. 13224, 66 Fed. Reg. 49079 (Sept. 25,
2001) and/or any other list of terrorists or terrorist organizations maintained
pursuant to any of the rules and regulations of Office of Foreign Asset
Control, Department of the Treasury or pursuant to any other applicable
Executive Orders.

 

“Operative
Documents” means the Financing Documents.

 

“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

 

11

 

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).

 

“Participant”
has the meaning set forth in Section 12.6(b).

 

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

 

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

 

“Pension Plan”
means any “employee benefit pension plan”, as such term is defined in Section
3(3) of ERISA (other than a Multiemployer Pension Plan) subject to Title IV of
ERISA or Section 412 of the Code, and to which 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 years, or by reason of being deemed to be
a contributing sponsor under Section 4069 of ERISA.

 

“Permitted Contest”
means 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; provided that
compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge.

 

“Permitted
Investments” shall mean: (a) securities issued or fully guaranteed
or insured by the United States Government or any agency thereof having
maturities of not more than twelve (12) months from the date of acquisition;
(b) certificates of deposit, time deposits, repurchase agreements, reverse
repurchase agreements, or bankers’ acceptances, having in each case a tenor of
not more than twelve (12) months, issued by Lender, or by any U.S. commercial
bank or any branch or agency of a non-U.S. bank licensed to conduct business in
the U.S. having combined capital and surplus of not less than $250,000,000; (c)
commercial paper of an issuer rated at least A-1 by Standard & Poor’s
Corporation or P-1 by Moody’s Investors Service Inc. and in either case having
a tenor of not more than twelve (12) months; and (d) investments in money
market mutual funds having assets in excess of $1,000,000,000 or more provided
substantially all of the assets are comprised of securities of the types
described in clauses (a) through (c) above.

 

“Permitted Liens”
means Liens permitted pursuant to Section 5.2.

 

“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
government or agency or political subdivision thereof.

 

12

 

“Pro Rata Share”
means with respect to a Lender’s obligation to make Revolving Loans, such
Lender’s right to receive payments of principal and interest with respect
thereto, such Lender’s right to receive the unused line fee described in
Section 2.3(b) and the Revolving Loan Commitment Percentage of such Lender.

 

“Required Lenders”
means at any time Lenders holding (a) fifty percent (50%) or more of the sum of
the Revolving Loan Commitment, or (b) if the Revolving Loan Commitment has been
terminated, fifty percent (50%) or more of the aggregate outstanding principal
balance of the Loans.

 

“Responsible
Officer” means any of the Chief Executive Officer, Chief Financial
Officer or other executive officer of Borrower.

 

“Restricted
Distribution” means as to any Person (a) any dividend or other distribution
on any equity interest in such Person (except those payable solely in its
equity interests), or (b) any payment (except those payable solely in its
equity interests) on account of (i) the purchase, redemption, retirement,
defeasance, surrender or acquisition of any equity interests in such Person, or
(ii) any option, warrant or other right to acquire any equity interests in such
Person.

 

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

 

“Revolving Loan
Commitment” means the sum of each Lender’s Revolving Loan Commitment
Amount.

 

“Revolving Loan
Commitment Amount” means, as to any Lender, the dollar amount set
forth opposite such Lender’s name on the Commitment Annex under the column “Revolving
Loan Commitment Amount”, or, if different, in the most recent Assignment
Agreement to which such Lender is a party.

 

“Revolving Loan
Commitment Percentage” means, as to any Lender, the percentage set
forth opposite such Lender’s name on the Commitment Annex under the column “Revolving
Loan Commitment Percentage”, or, if different, in the most recent Assignment
Agreement to which such Lender is a party.

 

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

 

“Revolving Loan
Note” has the meaning set forth in Section 2.4.

 

“Revolving Loan
Outstandings” means at any time of calculation the sum of the then
existing aggregate outstanding principal amount of Revolving Loans.

 

“Revolving Loans”
has the meaning set forth in Section 2.2(a), and includes all Agent Advances.

 

13

 

“Security
Documents” means any 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
Agent for its own benefit and the benefit of Lenders, as any or all of the same
may be amended, supplemented, restated or otherwise modified from time to time.

 

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

 

“Specified Holders”
means collectively PharmBay Investors, L.L.C., The Bay City Capital Fund II,
L.P. and The Bay City Capital Fund III, L.P. and their respective equity
holders and Affiliates.

 

“Stated Rate”
has the meaning set forth in Section 2.7(b).

 

“Subsidiary”
means, with respect to any Person, any corporation, limited liability company,
limited partnership or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person. Unless otherwise specified, the
term Subsidiary shall refer to a Subsidiary of Borrower.

 

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

 

“Termination Date”
has the meaning set forth in Section 2.2(c).

 

“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.

 

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 (except for changes concurred with by Borrower’s
independent public accountants) with the most recent audited consolidated
financial statements of Borrower and the applicable Consolidated Subsidiaries
delivered to Agent and each Lender; provided
that if (a) Borrower shall object to determining compliance with the provisions
of this Agreement on such basis by written notice delivered to Agent and
Lenders at the time of delivery of required financial statements due to any
change in GAAP or the rules promulgated with respect thereto, or (b) Agent or
the Required Lenders shall so object in writing by written notice delivered to
Borrower within sixty (60) days after delivery of such financial statements,
then such calculations shall be made on a basis consistent with the most recent
financial statements delivered by Borrower to Lenders as to which no such

 

14

 

objection
shall have been made. Upon receipt of written notice by Borrower that it wishes
to amend any provisions of this Agreement to eliminate the effect of any change
in GAAP on the operation of any such provision, the Agent shall so amend this
Agreement in a manner satisfactory to Borrower. 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” or “Exhibits” shall be to Articles, Sections, Annexes or Exhibits 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 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.

 

ARTICLE 2

LOANS

 

Section 2.1 Reserved.

 

Section 2.2 Revolving
Loans.

 

(a) Revolving
Loans and Borrowings.

 

(i) On the terms and subject to the conditions set
forth herein, each Lender severally agrees to make Loans to Borrower from time
to time as set forth herein equal to such Lender’s Revolving Loan Commitment
Percentage of revolving loans (“Revolving
Loans”) requested by Borrower hereunder, provided that after giving
effect thereto, the Revolving Loan Outstandings shall not exceed the Revolving
Loan Limit. Within the foregoing limits, Borrower may borrow under this Section
2.2(a)(i), prepay or repay Revolving Loans as required or permitted under this
Section 2.2 and reborrow Revolving Loans pursuant to this Section 2.2(a)(i).

 

(ii) Subject to the limitations set forth in this
Section 2.2(a)(ii), Agent is hereby authorized by Borrower and Lenders, from
time to time in Agent’s sole discretion, (A) after the occurrence of a Default
or an Event of Default, or (B) at any time that any of the other applicable
conditions precedent set forth in Section 8.2 have not been satisfied
(including without limitation the condition precedent that the Revolving Loan
Outstandings not exceed the Borrowing Base plus any other then outstanding
Agent Advances) and following the request of Borrower, to make Revolving Loans
to Borrower on behalf of Lenders which Agent, in its reasonable business
judgment, deems necessary or desirable (1) to preserve or protect the business
conducted by Borrower, the Collateral, or any portion thereof, (2) to enhance
the likelihood of, or maximize the amount of, repayment of the Loans and other
Obligations or (3) to pay any amount chargeable to Borrower

 

15

 

pursuant
to the terms of this Agreement, including interest payments and costs, fees and
expenses as described in Section 10.1 and/or Section 10.4 (any of the advances
described in this Section 2.2(a)(ii) being hereafter referred to as “Agent Advances”).

 

(b) Advancing
Revolving Loans.

 

(i) Borrower shall deliver to Agent a Notice of Borrowing
with respect to each proposed Revolving Loan Borrowing (other than Agent
Advances), such Notice of Borrowing to be delivered no later than noon (Chicago
time) one (1) Business Day prior to such proposed borrowing. Once given, except
as provided in Section 2.3(f)(ii), a Notice of Borrowing shall be irrevocable
and Borrower shall be bound thereby. Borrower hereby authorizes Lenders and
Agent to make Revolving Loans based on telephonic notices made by any Person
which Agent, in good faith, believes to be acting on behalf of Borrower.
Borrower agrees to deliver to Agent a Notice of Borrowing in respect of each
Revolving Loan requested by Borrower by telephone no later that one Business
Day following such request. If such Notice of Borrowing differs in any respect
from the action taken by Agent and Lenders, the records of Agent and Lenders
shall govern absent manifest error.

 

(ii) Borrower hereby authorizes Agent to make
Revolving Loans to pay interest, fees, expenses and other charges of any Credit
Party (excluding charges in respect of principal payments in respect of the
Loans) from time to time arising under this Agreement or any other Financing
Document; provided, that Agent
shall have no obligation at any time to make any Revolving Loan pursuant to the
provisions of this clause (ii).

 

(iii) The Borrowing Base shall be determined by
Agent based on the most recent Notice of Borrowing delivered to Agent in
accordance with this Agreement and such other information as may be available
to Agent. Without limiting any other rights and remedies of Agent hereunder or
under the other Financing Documents, the Revolving Loans shall be subject to
Agent’s continuing right to withhold from the Borrowing Base reserves, and to
increase and decrease such reserves from time to time, if and to the extent
that in Agent’s good faith and commercially reasonable credit judgment such
reserves are necessary, including to protect Agent’s interest in the Collateral
or to protect Agent against possible non-payment of Accounts for any reason by
Account Debtors or possible diminution of the value of any Collateral.

 

(iv) Agent, in its discretion, may further adjust
the Borrowing Base by applying percentages (known as “Liquidity Factors”) to Eligible Accounts by
Account Debtor based upon Borrower’s actual recent collection history for each
Account Debtor in a manner consistent with Agent’s underwriting practices and
procedures. Such Liquidity Factors may be adjusted by Agent from time to time
as warranted by Lender’s underwriting practices and procedures and using Agent’s
good faith credit judgment. Without in any way limiting the immediately
preceding sentence, Agent acknowledges and agrees, that as of the Closing Date,
based off of the Borrower’s recent collection history, Agent shall adjust the
Borrowing Base by applying a Liquidity Factor of ninety percent (90%) to all
Eligible Accounts of the Borrower other than Eligible Accounts arising from the
Novartis Agreement, which Eligible Accounts shall not be subject to the
application of a Liquidity Factor at the Closing Date.

 

16

 

(v) Agent may from time to time after notice to
Borrower change the form of Notice of Borrowing and shall at all times have the
right to request a separate Notice of Borrowing from each entity constituting
the Borrower.

 

(c) Mandatory
Revolving Loan Repayments and Prepayments.

 

(i) The Revolving Loan Commitment shall terminate
upon the earlier to occur of (i) the Commitment Expiry Date and (ii) the date
on which Agent or Required Lenders elect to terminate the Revolving Loan
Commitment pursuant to Section 9.2 (such earlier date being the “Termination Date”), and there shall become
due and Borrower shall pay on the Termination Date, the entire outstanding
principal amount of each Revolving Loan, together with accrued and unpaid
interest thereon to but excluding the Termination Date.

 

(ii) If at any time the Revolving Loan Outstandings
exceed the Revolving Loan Limit, then, on the second succeeding Business Day,
Borrower shall repay the Revolving Loans in an amount equal to such excess.

 

Section 2.3 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 LIBOR (determined as of the first day of each
calendar month) plus the LIBOR Margin.

 

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

 

(c) Collateral
Management Fee. On the first day of each calendar month
following the Closing Date Borrower shall pay Agent a fully earned and
non-refundable collateral management fee in the amount of $1,500.

 

(d) Deferred
Commitment Fee. If, prior to the thirty-third calendar month
anniversary of the Closing Date, (i) Borrower permanently prepays the
Obligations in full and terminates the Commitments, or (ii) the Lenders
terminate the Revolving Loan Commitment after the occurrence of an Event of
Default, Borrower shall pay to Agent, for the benefit of Lenders, as
compensation for the costs of Lenders being prepared to make funds available to
Borrower under this Agreement, an amount determined by multiplying the
percentage set forth below by $25,000,000: three percent (3.0%) for the first
eighteen (18) months following the Closing Date and one and one half percent
(1.5%) for the nineteenth through thirty-second months following the Closing Date.
No amount will be payable pursuant to this paragraph if Borrower voluntarily
prepays the Obligations in full or the Lenders terminate the Revolving Loan
Commitment due to, and during the continuance of an Event of Default after the
thirty-third calendar month anniversary of the Closing Date.

 

17

 

Notwithstanding
the foregoing subsection 2.3(d), in the event that Agent exercises its
right to implement reserves or new eligibility criteria not specifically provided
for in the Agreement, and the effect of the implementation of such reserves or
new eligibility criteria is to reduce the available Borrowing Base by more than
thirty five percent (35%) in comparison to the Borrowing Base calculated
without the effect of such reserves or new eligibility criteria, Borrower shall
be permitted to voluntarily and permanently prepay the Obligations in full and
terminate the Revolving Loan Commitments without incurring the deferred
commitment fee otherwise imposed under this subjection 2.3(d).

 

(e) Audit Fees.
Borrower shall pay to Agent all reasonable fees and expenses in connection with
audits of Borrower’s books and records, audits, valuations or appraisals of the
Collateral and such other matters as Agent shall deem appropriate, which shall
be due and payable on the first Business Day of the month following the date of
issuance by Agent of a request for payment thereof to Borrower, provided,
that unless an Event of Default shall have occurred and is continuing, Borrower
shall only be obligated to reimburse Agent and Lenders for the costs associated
with such audits, valuations and appraisals in an amount of up to $40,000 for
each successive one (1) year period following the Closing Date and provided,
further, that Agent shall be entitled to conduct such audits, valuations
and appraisals as permitted solely pursuant to Section 4.6 hereof.

 

(f) 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) days’ interest shall be charged. Interest on all Loans is
payable in arrears on the first day of each month and on the maturity of such
Loans, whether by acceleration or otherwise.

 

(g) Wire Fees.
Borrower shall pay to Agent, on demand, any and all fees, costs or expenses
which Agent or any participant pays to a bank or other similar institution
(including, without limitation, any fees paid by Agent to any participant)
arising out of or in connection with (i) the forwarding to Borrower or any
other Person on behalf of Borrower, by Agent, of proceeds of the Loans made by
Lender to Borrower pursuant to this Agreement, and (ii) the depositing for
collection, by Agent or any participant, of any check or item of payment
received or delivered to Agent or any participant on account of Obligations.

 

Section 2.4 Notes.

 

The portion of the Revolving Loans made by each
Lender shall be evidenced by a promissory note executed by Borrower (a “Revolving Loan Note”) in an original
principal amount equal to such Lender’s Pro Rata Share of the Revolving Loan
Commitment.

 

18

 

Section 2.5 Reserved.

 

Section 2.6 General
Provisions Regarding Payment; Loan Account.

 

(a) All payments to be made by Borrower under any Financing
Document, including payments of principal and interest on the Notes, and all
fees, expenses, indemnities and reimbursements, shall be made without set-off
or counterclaim, in lawful money of the United States of America 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.
Borrower shall make all payments in immediately available funds to the Payment
Account before noon (Chicago time) on the date when due. Notwithstanding
anything to the contrary set forth in this Section 2.6(a), Agent shall be
permitted, in its sole discretion, but subject to the limitations set forth in
Section 2.2(a)(ii), to satisfy any of the payment obligations described in this
Section 2.6(a) through the making of Agent Advances.

 

(b) Agent shall maintain a loan account (the “Loan Account”) on its books to record Loans
and other extensions of credit made by Lenders hereunder or under any other
Financing Document, and all payments thereon made by Borrower. All entries in
the Loan Account shall be made in accordance with Agent’s customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent’s most recent printout or other written statement, shall be
conclusive and binding evidence of the amounts due and owing to Agent by
Borrower absent clear and convincing evidence to the contrary; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect Borrower’s duty to pay all amounts owing hereunder or under
any other Financing Document. Unless Borrower notifies Agent in writing of any
objection to any such printout or statement (specifically describing the basis
for such objection) within thirty (30) days after the date of receipt thereof,
it shall be deemed final, binding and conclusive upon Borrower in all respects
as to all matters reflected therein.

 

Section 2.7 Maximum
Interest.

 

(a) In no event shall the interest charged with
respect to the Notes or any other obligations of Borrower under any Financing
Document exceed the maximum amount permitted under the laws of the State of
Illinois or of any other applicable jurisdiction.

 

(b) 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, that if at any
time thereafter the Stated Rate is less than the Maximum Lawful Rate, 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 received had the Stated Rate been (but for the
operation of this provision) the interest rate payable. Thereafter, the
interest rate payable shall be the Stated Rate unless and until the Stated Rate
again would exceed the Maximum Lawful Rate, in which event this provision shall
again apply.

 

19

 

(c) In no event shall the total interest received by
any Lender exceed the amount which it could lawfully have received had the
interest been calculated for the full term hereof at the Maximum Lawful Rate.
If, notwithstanding the prior sentence, any Lender has received interest
hereunder in excess of the Maximum Lawful Rate, such excess amount shall be applied
to the reduction of the principal balance of the Loans or to other amounts
(other than interest) payable hereunder, and if no such principal or other
amounts are then outstanding, such excess or part thereof remaining shall be
paid to Borrower.

 

(d) 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.

 

(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, excise, property or franchise taxes and other taxes, fees, duties,
levies, withholdings or other charges of any nature whatsoever imposed by any
taxing authority, excluding taxes imposed on or measured by Agent’s or any
Lender’s net income by the jurisdiction (or any political subdivision thereof)
under which Agent or such Lender is organized or conducts business (other than
solely as a result of entering into this Agreement or any other Financing
Documents or performing any obligations, receiving any payments or enforcing
any rights under this Agreement or any other Financing Document) (all
non-excluded items being called “Taxes”).
If any withholding or deduction from any payment to be made by Borrower
hereunder is required in respect of any Taxes pursuant to any applicable law,
rule or regulation, then Borrower will: (a) pay directly to the relevant
authority the full amount required to be so withheld or deducted; (b) promptly
forward to Agent an official receipt or other documentation reasonably
satisfactory to Agent evidencing such payment to such authority; and (c) pay to
Agent for the account of Agent and Lenders such additional amount or amounts as
is necessary to ensure that the net amount actually received by Agent and each
Lender will equal the full amount Agent and such Lender would have received had
no such withholding or deduction been required. If any Taxes are directly
asserted against Agent or any Lender with respect to any payment received by
Agent or such Lender hereunder, Agent or such Lender may pay such Taxes and
Borrower will promptly pay such additional amounts (including any penalty,
interest or expense) as is necessary in order that the net amount received by
such Agent or such Lender after the payment of such Taxes (including any Taxes
on such additional amount) shall equal the amount Agent or such Lender would
have received had such Taxes not been asserted so long as such amounts have
accrued on or after the day which is one hundred eighty (180) days prior to the
date on which Agent or such Lender first made demand therefor.

 

(b) If Borrower fails to pay any Taxes when due to
the appropriate taxing authority or fails to remit to Agent, for the account of
Agent and the respective Lenders, the

 

20

 

required
receipts or other required documentary evidence, Borrower shall indemnify Agent
and Lenders for any incremental Taxes, interest or penalties that may become
payable by 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 of America (or any political
subdivision thereof) and (ii)(A) is a party hereto on the Closing Date or (B)
becomes an assignee of an interest under this Agreement under Section 12.6(a)
after the Closing Date (unless such Lender was already a Lender hereunder
immediately prior to such assignment), shall execute and deliver to Borrower
and Agent one or more (as Borrower or Agent may reasonably request) Forms
W-8ECI, W-8BEN, W-8IMY (as applicable) or other applicable form, certificate or
other document prescribed by the United States Internal Revenue Service
certifying as to such Lender’s entitlement to a complete exemption from
withholding or deduction of Taxes. Borrower shall not be required to pay additional
amounts to any Lender pursuant to this Section 2.8 to the extent that (i) the
obligation to pay such additional amounts would not have arisen but for the
failure of such Lender to comply with this paragraph or (ii) the Lender is
subject to U.S. federal withholding tax at the time that it became party to
this Agreement notwithstanding the fact that the Lender complied with this
paragraph other than as a result of a change in law.

 

(d) If the Agent or a Lender determines in its
reasonable discretion that it has received a refund of any Taxes as to which it
has been indemnified by Borrower or with respect to which Borrower has paid
additional amounts pursuant to this Section 2.8, it shall pay over such refund
to Borrower (but only to the extent of indemnity payments made, or additional
amounts paid, by Borrower under this Section 2.8 with respect to Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Agent or such
Lender and without interest (other than any interest paid by the relevant
governmental authority with respect to such refund); provided, however,
that Borrower, upon the request of the Agent or such Lender, agrees to repay
the amount paid over to Borrower (plus any penalties, interest or other
charges imposed by the relevant governmental authority) to the Agent or such
Lender in the event the Agent or such Lender is required to repay such refund
to such governmental authority. Nothing contained in this Section 2.8(d) shall
require the Agent or any Lender to make available its tax returns or any other
information which it deems confidential to Borrower.

 

(e) If any Lender requires the Borrower to pay any
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to this Section 2.8, then 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
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to this Section 2.8, 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. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.

 

21

 

(f) If any Lender changes its residence, place of
business or applicable lending office, and the effect of such change, as of the
date thereof, would be to increase the amounts that Borrower is obligated to
pay under this Section 2.8, then the Borrower shall not be obligated to pay the
amount of such increase. Notwithstanding anything in this Section 2.8 to the
contrary, Borrower shall not have any obligation to a Lender or the Agent with
respect to Taxes or other indemnity payment to the extent arising from the
willful misconduct of such Lender, or the Agent, as applicable.

 

(g) Each Lender that (i) is organized under the laws
of the United States of America (or any political subdivision thereof), (ii)
(A) is a party hereto on the Closing Date or (B) becomes an assignee of an
interest under this Agreement under Section 12.6(a) after the Closing Date
(unless such Lender was already a Lender hereunder immediately prior to such
assignment) and (iii) is not an “exempt recipient” (as defined in Treasury
Regulation Section 1.6049-4(c)) with respect to which no withholding is
required, shall execute and deliver to Borrower and Agent one or more (as
Borrower or Agent may reasonably request) Forms W-9 or any successor form.
Borrower shall not be required to pay additional amounts to any Lender pursuant
to this Section 2.8 to the extent that the obligations to pay such additional
amounts would not have arisen but for the failure of such Lender to comply with
this paragraph..

 

Section 2.9 Capital
Adequacy.

 

(a)  If
any Lender shall reasonably determine that any change in, or the adoption or
phase-in of, any applicable law, rule or regulation regarding capital adequacy,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or the compliance by any Lender or
any Person controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, 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 change, adoption, phase-in or compliance (taking into consideration
such Lender’s or such controlling Person’s policies with respect to capital
adequacy) by an amount deemed by such Lender or such controlling Person to be
material, then from time to time, upon 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 Agent), Borrower shall pay to such Lender such additional
amount as will compensate such Lender or such controlling Person for such
reduction, so long as such amounts have accrued on or after the day which is
one hundred eighty (180) days prior to the date on which such Lender first made
demand therefor.

 

(b) If and to the extent Merrill Lynch’s share of
the Revolving Loan Commitment shall be less than or equal to fifty percent of
the Revolving Loan Commitment, if any Lender delivers to the Borrower any notice
or demand in accordance with subsection 2.9(a), the Borrower shall have the
right to replace each such Lender or Lenders (each a “Replaced Lender”) with up to two additional
banks or financial institutions acceptable to

 

22

 

the
Agent in its sole discretion (collectively, the “Replacement Lender”), provided that (a) at the time of any
replacement pursuant to this subsection 2.9(b), the Replacement Lender shall
enter into one or more Assignment and Assumption Agreements pursuant to, and in
accordance with, the terms of Section 12.6 (and with all processing fees
payable pursuant to said Section 11.6 to be paid by the Replacement Lender or,
at its option, the Borrower) pursuant to which the Replacement Lender shall
acquire all of the rights and obligations of the Replaced Lender hereunder and,
in connection therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (i) the principal of, and all accrued interest on,
all outstanding Loans of the Replaced Lender, and (ii) all accrued, but
theretofore unpaid, fees owing to the Replaced Lender, and (b) all other
obligations of the Borrower owing to the Replaced Lender shall be paid in full
to such Replaced Lender concurrently with such replacement.

 

Section 2.10 Collections
and Lockbox Account.

 

(a) Borrower shall maintain a lockbox (the “Lockbox”) with a United States depository
institution reasonably acceptable to Agent (the “Lockbox Bank”), subject to the provisions of this Agreement,
and shall execute with the Lockbox Bank a Deposit Account Control Agreement,
and such other agreements related to such Deposit Account Control Agreement as
Agent may reasonably require. Borrower shall ensure that all collections of
Accounts are paid directly from Account Debtors into the Lockbox for deposit
into a deposit account subject to the exclusive Control of Agent (a “Lockbox Account”); provided, however,
unless Agent shall otherwise direct by written notice to Borrower, Borrower
shall be permitted to cause Account Debtors who are individuals to pay Accounts
directly to Borrower, which Borrower shall then administer and apply in the
manner required below. All funds deposited into a Lockbox Account shall be
transferred into the Payment Account at the end of each Business Day.

 

(b) Notwithstanding anything in any lockbox
agreement to the contrary, Borrower agrees that it shall be liable for any fees
and charges in effect from time to time and charged by the Lockbox Bank in
connection with the Lockbox and the Lockbox Account, and that Agent shall have
no liability therefor. Borrower agrees to indemnify and hold Agent harmless
from any and all liabilities, claims, losses and demands whatsoever, including
reasonable attorneys’ fees and expenses, arising from or relating to actions of
Agent or the Lockbox Bank pursuant to this Section or any lockbox agreement,
unless any such action had been grossly negligent, in willful misconduct, in
breach of contract or in bad faith.

 

(c) Agent shall apply, on a daily basis, all funds
transferred into the Payment Account pursuant to this Section to reduce the
outstanding Obligations under the Facility in such order of application as
Agent shall elect.

 

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

 

23

 

(e) Borrower acknowledges and agrees that its
compliance with the terms of this Section is essential, and that Agent will
suffer immediate and irreparable injury and have no adequate remedy at law, if
Borrower, through its acts or omissions, causes or permits Account Debtors to
send payments other than to the Lockbox, or if Borrower fails to immediately
deposit collections of Accounts or proceeds of other Collateral in the Lockbox
Account as herein required.

 

(f) Borrower shall not, and Borrower shall not
suffer or permit any Credit Party to (i) withdraw any amounts from any Lockbox
Account, (ii) change the procedures or sweep instructions under the agreements
governing any Lockbox Accounts, or (iii) send to or deposit in any Lockbox
Account any funds other than payments made with respect to and proceeds of
Accounts. Borrower shall, and shall cause each Credit Party to, cooperate with
Agent in the identification and reconciliation on a daily basis of all amounts
received in or required to be deposited into the Lockbox Accounts. In addition,
if any such amount cannot be identified or reconciled to the reasonable
satisfaction of Agent, Agent may utilize its own staff or, if it deems
necessary, engage an outside auditor, in either case at Borrowers’ expense
(which in the case of Agent’s own staff shall be in accordance with Agent’s
then prevailing customary charges (plus expenses)), to make such examination
and report as may be necessary to identify and reconcile such amount.

 

(g) For purposes of calculating interest, all funds
transferred from the Payment Account for application to Borrower’s indebtedness
to Agent under any revolving credit facility shall be subject to a one (1)
Business Day clearance period.

 

(h) If as the result of collections of Accounts
pursuant to the terms and conditions of this Section a credit balance exists
with respect to the Payment Account, such credit balance shall not accrue
interest in favor of Borrower, but shall be transferred to Borrower’s operating
account two (2) times per week, or as otherwise requested by Borrower upon
reasonable advance notice to Agent.

 

(i) If Borrower breaches its obligation to direct
payments of the proceeds of the Collateral to the Lockbox Account, Lender, as
the irrevocably made, constituted and appointed true and lawful attorney for
Borrower pursuant to the Security Agreement, may, by the signature or other act
of any of Lender’s officers (without requiring any of them to do so), direct
any federal, state or private payor or fiscal intermediary to pay proceeds of
the Collateral to Borrower by directing payment to the Lockbox Account.

 

24

 

ARTICLE 3

REPRESENTATION
AND WARRANTIES

 

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

 

Section 3.1 Existence
and Power.

 

Each Credit Party is an entity as specified on the
Information Certificate, duly organized, validly existing and in good standing
under the laws of the jurisdiction specified on the Information Certificate,
has an organizational identification number (if any) as specified on the
Information Certificate, and has all powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted, except where the failure to have such licenses, authorizations, consents
and approvals would 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 the Information
Certificate, except where the failure to be so qualified would not reasonably
be expected to have a Material Adverse Effect.

 

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 body, agency or official and do not violate,
conflict with or cause a breach or a default under any provision of applicable
law or regulation or of the Organizational Documents of any Credit Party or of
any agreement, judgment, injunction, order, decree or other instrument binding
upon it, except for such violations, conflicts, breaches or defaults as would
not 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 the Information
Certificate. All issued and outstanding equity securities of each of the Credit
Parties are duly authorized and validly issued, fully paid, nonassessable, and
such equity securities were issued in compliance with all applicable state,
federal and foreign laws concerning the issuance of securities. The identity of
each holder of more than five percent (5%) of the equity securities of each of
the Credit Parties and the percentage of each such Person’s fully-diluted ownership
of the equity securities of each of the Credit Parties as of the Closing Date
is set forth on the Information Certificate.

 

25

 

Section 3.5 Financial
Information.

 

(a) The consolidated balance sheet of Borrower and
its Consolidated Subsidiaries as of December 31, 2003 and the related
consolidated statements of operations, stockholders’ equity (or comparable
calculation, if such Person is not a corporation) and cash flows for the fiscal
year then ended, reported on by Ernst & Young, copies of which have been
delivered to Agent, fairly present, in all material respects and in conformity
with GAAP, the consolidated financial position of Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations,
changes in stockholders’ equity (or comparable calculation) and cash flows for
such period.

 

(b) The unaudited consolidated balance sheet of
Borrower and its Consolidated Subsidiaries as of June 30, 2004 and the related
unaudited consolidated statements of operations and cash flows for the six (6)
months then ended, copies of which have been delivered to Agent, fairly
present, in all material respects and in conformity with GAAP applied on a
basis consistent with the financial statements referred to in Section 3.5(a),
the consolidated financial position of Borrower and its Consolidated
Subsidiaries as of such date and their consolidated results of operations and
cash flows for the six (6) months then ended (subject to normal year-end
adjustments and the absence of footnote disclosures).

 

(c) The information contained in the most recently
delivered Borrowing Base Certificate is complete and correct in all material
respects, and the amounts shown therein as “Eligible Receivables” has been
determined as provided in the Financing Documents.

 

(d) Since June 30, 2004, there has been no material
adverse change in the business, operations, properties or financial condition
of Borrower and its Consolidated Subsidiaries, taken as a whole.

 

Section 3.6 Litigation.

 

Except as set forth in the Information Certificate,
as of the Closing Date there is no action, suit or proceeding pending against,
or to Borrower’s knowledge threatened against or affecting, any Credit Party
before any court or arbitrator or any governmental body, agency or official in
which an adverse decision would 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.

 

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 material properties and other material
assets (real or personal, tangible, intangible or mixed) purported to be owned
or leased (as the case may be) by such Person on the balance sheet referred to
in Section 3.5(b), except as disposed of in the ordinary course of business.

 

26

 

Section 3.8 No
Default.

 

No Default or Event of Default has occurred and is
continuing and 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 would
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 Borrower’s knowledge, threatened against
any Credit Party. 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. No
Credit Party is a “holding company”, or a “subsidiary company” of a “holding
company”, or an “affiliate” of a “holding company” or of a “subsidiary company”
of a “holding company”, within the meaning of the Public Utility Holding
Company Act of 1935.

 

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, 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.

 

Section 3.12 Compliance
With Laws

 

As of the Closing Date, Borrower and each Subsidiary
is in compliance with the requirements of all applicable laws, ordinances,
rules, regulations and requests of governmental authorities, except for such
laws, ordinances, rules, regulations and requirements the noncompliance with
which would not reasonably be expected to have a Material Adverse Effect.

 

Section 3.13 Taxes.

 

Except to the extent subject to a Permitted Contest
or would not reasonably be likely to result in a Material Adverse Effect, all
material Federal, state and local (and in any event, income) tax returns,
reports and statements required to be filed by or on behalf of each

 

27

 

Credit
Party have been filed (within thirty (30) days of the applicable due date,
taking into account all applicable extensions) with the appropriate
governmental agencies in all jurisdictions in which such returns, reports and
statements are required to be filed, and all material Taxes (including material
real property Taxes) and other charges shown to be due and payable in respect
thereof have been paid and any fine, penalty, interest, late charge or loss
that may have been added thereto for nonpayment thereof. Except to the extent
subject to a Permitted Contest or except where noncompliance would not
reasonably be expected to have a Material Adverse Effect, all material state
and local sales and use Taxes required to be paid by each Credit Party have
been paid. Except to the extent subject to a Permitted Contest or except where
noncompliance would not reasonably be expected to have a Material Adverse
Effect, 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 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 or any
instance of noncompliance is eligible for correction under 2003-44 Revenue
Procedure. 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 or is reviewing an application for a favorable determination
letter with respect to each such ERISA Plan which may be relied on currently.
Borrower has not incurred liability for any material excise tax under 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 or the issuance of any Letter of
Credit and except as would not reasonably be expected to result in material
liability: (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 reasonably be expected to result in the incurrence by Borrower of any
material liability, fine or penalty. Borrower has not incurred liability to the
PBGC (other than for current premiums) with respect to any Pension Plan. All
contributions (if any) have been made on a timely basis to any Multiemployer
Pension Plan that are required to be made by Borrower or any other member of
the Controlled Group under the terms of the plan or of any collective
bargaining agreement or by applicable Law; neither Borrower nor any member of
the Controlled Group has withdrawn or partially withdrawn from any
Multiemployer Pension 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 neither Borrower nor any member of the
Controlled Group has received any notice that any Multiemployer Pension 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.

 

28

 

Section 3.15 Brokers.

 

Except as set forth in the Information Certificate,
no broker, finder or other intermediary has brought about the obtaining, making
or closing of the transactions contemplated by the Operative Documents, and no
Credit Party has or will have any obligation to any Person in respect of any
finder’s or brokerage fees in connection herewith or therewith.

 

Section 3.16 Reserved.

 

Section 3.17 Collective
Bargaining Agreements.

 

Except for the Operative Documents and the other
agreements set forth in the Information Certificate, as of the Closing Date
there are no collective bargaining agreements or other labor agreements
covering any employees of any Credit Party.

 

Section 3.18 Compliance
with Environmental Requirements; No Hazardous Materials.

 

Except in each case as set forth on the Information
Certificate:

 

(a) No Hazardous Materials have been released into
the environment, or deposited, discharged, placed or disposed of at, on, under
or near any properties now or, to the knowledge of the Credit Parties,
previously owned, leased or operated by any Credit Party in a manner that would
require the taking of any action under any Environmental Law or which would
reasonably be expected to have a Material Adverse Effect. No portion of any
such property is being used, or has been used at any previous time, for the
disposal, storage, treatment, processing or other handling of Hazardous
Materials in violation of any material Environmental Law nor is any such
property affected by any Hazardous Materials Contamination.

 

(b) To Borrower’s knowledge, no underground storage
tanks are located on any properties now or previously owned, leased or operated
by any Credit Party.

 

(c) No written notice, notification, demand,
complaint, citation, summons, investigation, administrative order, consent
order and agreement, litigation or settlement with respect to Hazardous
Materials or Hazardous Materials Contamination is in existence or, to Borrower’s
knowledge, proposed, threatened or anticipated with respect to or in connection
with the operation of any properties owned, leased or operated by any Credit
Party. All such properties and their uses, and any disposal of Hazardous
Materials from any thereof, comply with all material Environmental Laws.

 

(d) There has been no environmental investigation,
study, audit, test, review or other analysis conducted of which Borrower has
knowledge in relation to the current or prior business of Borrower or any
property or facility owned, leased or operated by any Credit Party which has
not been delivered to Agent.

 

29

 

(e) 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
and all such Intellectual Property existing as of the Closing Date and
registered with the U.S. government, any foreign government or any agency or
department thereof in the name of Borrower is set forth on the Information
Certificate. To Borrower’s knowledge, each Credit Party conducts its business
without infringement or claim of infringement of any Intellectual Property
rights of others and there is no infringement or claim of infringement by
others of any Intellectual Property rights of any Credit Party, which
infringement or claim of infringement would reasonably be expected to have a
Material Adverse Effect.

 

Section 3.20 Real
Property Interests.

 

Except for the ownership, leasehold or other
interests set forth in the Information Certificate, no Credit Party has, as of
the Closing Date, any ownership, leasehold or other interest in real property
where any Credit Party stores or maintains its books and records.

 

Section 3.21 Solvency.

 

Borrower, and Borrower and each Subsidiary on a
consolidated basis: (a) owns and will own assets the fair saleable value of
which are (i) greater than the total amount of its liabilities (including
contingent liabilities when due) 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.

 

Section 3.22 Full
Disclosure.

 

No representation or warranty made by any Credit
Party to Agent or any Lender in any of the Operative Documents, including
without limitation the information set forth in the Information Certificate,
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 the light of the circumstances under which such statements were made. All
financial projections contained in such materials have been prepared on the
basis of the assumptions stated therein. Such projections represent Borrower’s
good faith estimate of

 

30

 

Borrower’s
future financial performance and such assumptions are believed by Borrower to
be reasonable in light of current business conditions; provided that Borrower can give no
assurance that such projections will be attained.

 

Section 3.23 OFAC
Lists.

 

Neither Borrower, nor any owner or beneficial owner
of Borrower, is currently listed on the OFAC Lists.

 

ARTICLE 4

AFFIRMATIVE
COVENANTS

 

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

 

Section 4.1 Financial
Statements and Other Reports.

 

Borrower will maintain a system of accounting
established and administered in accordance with sound business practices to
permit preparation of financial statements in accordance with GAAP and to
provide the information required to be delivered to Lenders hereunder, and will
deliver to Agent, and, in the case of the deliveries required by paragraphs (a)
through (f) and (l) through (s), sufficient copies for each Lender:

 

(a) as soon as practicable and in any event within
thirty (30) days after the end of each month (or forty-five (45) days after the
end of the last month of Borrower’s Fiscal Year), a consolidated balance sheet
of Borrower and its Consolidated Subsidiaries as at the end of such month and the
previous Fiscal Year end and the related consolidated statements of operations
and cash flows for such month, and for the portion of the Fiscal Year ended at
the end of such month setting forth in comparative form the figures for the
corresponding periods of the previous Fiscal Year, all in reasonable detail and
certified by a Responsible Officer of Borrower as fairly presenting, in all
material respects, the financial condition and results of operations of
Borrower and its Consolidated Subsidiaries and as having been prepared in
accordance with GAAP applied on a basis consistent with the audited financial
statements of Borrower (subject to changes resulting from audit and normal year
end adjustments and the absence of footnotes;

 

(b) as soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, a consolidated balance
sheet of Borrower and its Consolidated Subsidiaries as of the end of such
Fiscal Year and the related consolidated statements of operations, stockholders’
equity and cash flows for such Fiscal Year, setting forth in each case in
comparative form the figures for the previous Fiscal Year, certified by a
Responsible Officer of Borrower (solely with respect to such consolidated
statements) without material qualification or exception (by Ernst & Young,
LLP or another independent public accountant reasonably acceptable to Agent of
nationally recognized standing) which qualification or exception would, in
either case, be reasonably be expected to have a Material Adverse Effect;

 

31

 

(c) together with each delivery of financial
statements pursuant to Sections 4.1(a) and 4.1(b), a Compliance Certificate;

 

(d) Reserved;

 

(e) promptly upon receipt thereof, copies of all
reports signed by Borrower’s independent public accountants submitted to any
Credit Party by independent public accountants in connection with each annual,
interim or special audit of the financial statements of any Credit Party made
by such accountants, including the management letter comments submitted by such
accountants in connection with their annual audit;

 

(f) promptly upon their becoming available, copies
of (i) all financial statements, material reports, material notices and proxy
statements sent or made available generally by any Credit Party to its security
holders, (ii) all regular and periodic reports and all registration statements
and prospectuses filed by any Credit Party with any securities exchange or with
the Securities and Exchange Commission or any successor, and (iii) all press
releases and other material statements made available generally by any Credit
Party concerning material developments in the business of any Credit Party;

 

(g) promptly upon any officer of any Credit Party
obtaining knowledge (i) of the existence of any Event of Default or Default, or
becoming aware that the holder of any Debt of any Credit Party has given any
notice to a Credit Party or taken any other action with respect to a claimed
default thereunder, (ii) of any change in any Credit Party’s certified
accountant or any resignation, or decision not to stand for re-election, by any
member of the audit committee of any Credit Party’s board of directors (or
comparable body), (iii) that any Person has given any notice to any Credit
Party or taken any other action with respect to a claimed default under the
Novartis Agreement or any material contract or agreement in respect of Borrower’s
right generally to manufacture, market, sell or distribute pharmaceuticals or
(iv) of the institution of any litigation or arbitration involving an alleged
liability of any Credit Party equal to or greater than $2,000,000 or any
adverse determination in any litigation or arbitration involving a potential
liability of any Credit Party equal to or greater than $2,000,000, notice
specifying the nature and period of existence of any such condition or event,
or specifying the notice given or action taken by such holder or Person and the
nature of such claimed default (including any Event of Default or Default),
event or condition, and what action the applicable Credit Party has taken, is
taking or proposes to take with respect thereto;

 

(h) promptly upon any officer of any Credit Party
obtaining knowledge of (i) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan, (ii) the
failure of any member of the Controlled Group to make a required contribution
on a timely basis to any ERISA Plan or to any Multiemployer Pension Plan, (iii)
the taking of any action with respect to a Pension Plan which could result in
the requirement that Borrower or any Subsidiary furnish a bond or other
security to the PBGC or such Pension Plan, (iv) the occurrence of reportable
event under Section 4043 of ERISA (for which a reporting requirement is not
waived) with respect to any Pension Plan, (v) the occurrence of any event with
respect to any Pension Plan or Multiemployer Pension Plan which could result in
the incurrence by any member of the Controlled Group of any material

 

32

 

liability,
fine or penalty (including any claim or demand for withdrawal liability or
partial withdrawal from any Multiemployer Pension Plan), (vi) any material
increase in the contingent liability of Borrower or any Subsidiary with respect
to any post-retirement welfare plan benefit, or (vii) the receipt by Borrower
or any Subsidiary of any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an 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, if any of the above would reasonably be expected to
have a Material Adverse Effect, notice specifying the nature and period of
existence of any such condition or event, or specifying the notice given or
action taken by such holder or Person, and what action the applicable Credit
Party has taken, is taking or proposed to take with respect thereto;

 

(i) promptly upon any officer of any Credit Party
obtaining knowledge of any complaint, order, citation, notice or other written
communication from any Person delivered to any Credit Party with respect to, or
if any officer of any Credit Party becomes aware of (x) the existence or
alleged existence of a violation of any material Environmental Law or the
incurrence of any liability, obligation, loss, damage, cost, expense, fine,
penalty or sanction or the requirement to commence any remedial action
resulting from or in connection with any air emission, water discharge, noise
emission, Hazardous Material or any other environmental, health or safety
matter at, upon, under or within any of the properties now or previously owned,
leased or operated by any Credit Party, or due to the operations or activities
of any Credit Party or any other Person on or in connection with any such
property or any part thereof or (y) any release on any of such properties of
Hazardous Materials in a quantity that is reportable under any applicable
Environmental Law, if any of the above would reasonably be expected to have a
Material Adverse Effect, notice specifying the nature and period of existence
of any such condition or event, or specifying the notice given or action taken
by such holder or Person, and what action the applicable Credit Party has
taken, is taking or proposes to take with respect thereto;

 

(j) [Reserved];

 

(k) copies of any material reports or notices
received from any Federal, state or local government agency or body (including,
without limitation, all reports and notices with respect to the suspension or
revocation of any governmental approval necessary to manufacture, market or
distribute a product in connection with the generation of Accounts); or, upon
Agent’s reasonable request, copies of any material tax returns or reports or
any other material reports or notices filed by any Credit Party with any
Federal, state or local governmental agency or body;

 

(l) within thirty (30) days subsequent to the
conclusion of each Fiscal Year, Borrower’s annual operating plans, operating
and capital expenditure budgets, and financial forecasts, including cash flow
projections covering proposed fundings, repayments, additional advances,
investments and other cash receipts and disbursements, each such Fiscal Year
presented on a monthly basis, all of which shall be in a format reasonably
consistent with projections, budgets and forecasts theretofore provided to
Lenders;

 

33

 

(m) as soon as available and in any event no later
than noon (Chicago Time) on a day each month as designated from time to time by
Agent, and from time to time upon the request of Agent, a Borrowing Base
Certificate as of the last day of the month most recently ended (or, in the
case of Borrowing Base Certificates requested more frequently than monthly, as
of the last day of the week most recently ended (or, in the case of Borrowing
Base Certificates requested more frequently than weekly, as of the second
preceding Business Day));

 

(n) as soon as available after the end of each month
(but in any event within ten (10) Business Days after the end thereof), and
from time to time upon the request of Agent, schedules of sales made, credits
issued and cash received for and during such month (or, in the case of such
schedules requested more frequently than monthly, as of the second preceding
Business Day);

 

(o) as soon as available after the end of each month
(but in any event within ten (10) Business Days after the end thereof), on a
monthly basis or more frequently as Agent may reasonably request, (i) agings of
Accounts, and (ii) such reconciliation reports from time to time reasonably
requested by Agent with respect to the Borrowing Base Certificate most recently
delivered to Agent, the financial statements of Borrower delivered to Agent,
Borrower’s general ledger and/or the reports required pursuant to this
paragraph, each in form and substance, and with such supporting detail and
documentation, as may be reasonably requested by Agent;

 

(p) upon Agent’s reasonable request after the
occurrence and during the continuance of an Event of Default, copies of customer
statements and credit memos, remittance advices and reports and copies of
deposit slips and bank statements;

 

(q) within two (2) Business Days after any request
therefor, such additional information in such detail concerning the amount,
composition and manner of calculation of the Borrowing Base as Agent or any
Lender may reasonably request; and

 

(r) with reasonable promptness, such other
information and data with respect to any Credit Party as from time to time may
be reasonably requested by Agent or any Lender.

 

Section 4.2 Payment
and Performance of Obligations.

 

Borrower (a) will pay and discharge, and cause each
Subsidiary to pay and discharge, at or before maturity, all of their respective
obligations and liabilities, including tax liabilities, except (i) where the
same may be the subject of a Permitted Contest or (ii) for such obligations
and/or liabilities the nonpayment or nondischarge of which would 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 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 would not reasonably be
expected to have a Material Adverse Effect.

 

34

 

Section 4.3 Conduct
of Business and Maintenance of Existence.

 

Borrower will continue, and will cause each
Subsidiary to continue, to engage in business of the same general type as they
now conduct and reasonable extensions and additions thereto and 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 and desirable
in the normal conduct of business, provided, no Credit Party or any of
its Subsidiaries shall be required to preserve any such existence, right or
franchise, licenses and permits if such Person’s board of directors (or similar
governing body) shall determine that the preservation thereof is no longer
desirable in the conduct of the business of such Person, and that the loss
thereof is not disadvantageous in any material respect to such Person or to
Lenders.

 

Section 4.4 Maintenance
of Property; Insurance.

 

(a) Borrower will keep, and will cause each
Subsidiary to keep, all property useful and necessary in its business in normal
working order and condition, ordinary wear and tear excepted.

 

(b) Borrower will maintain, and will cause each Subsidiary
to maintain, (i) physical damage insurance on all real and personal property on
an all risks basis, covering the repair and replacement cost of all such
property and public liability insurance (including products/completed
operations liability coverage), in each case of the kinds customarily carried
or maintained by Persons of established reputation engaged in similar
businesses and in amounts reasonably acceptable to Agent, and (ii) such other
insurance coverage (excluding business interruption) in such amounts and with
respect to such risks as Agent may reasonably request. All such insurance shall
be provided by insurers having an A.M. Best policyholders rating reasonably
acceptable to Agent. Agent hereby acknowledges that the insurance currently carried
by Borrower is acceptable to Agent as of the Closing Date.

 

(c) On or prior to the Closing Date, Borrower will
cause Agent to be named as an additional insured on each insurance policy
required to be maintained pursuant to this Section 4.4 pursuant to endorsements
in form and content reasonably acceptable to Agent. Borrower will deliver to
Agent (i) on the Closing Date, a certificate from Borrower’s 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 additional insureds and all rights of subrogation against all
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 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 of written notice thereof, (ii) on an
annual basis, and upon the request of any Lender through Agent from time to
time, information as to the insurance carried, (iii) within five (5) Business
Days of receipt of notice from any insurer, a copy of any notice

 

35

 

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 Borrower.

 

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

 

Section 4.5 Compliance
with Laws.

 

Borrower will comply, and cause each Subsidiary to
comply, with the requirements of all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including
Environmental Laws and ERISA and the rules and regulations thereunder), except
for such laws, ordinances, rules, regulations and requirements the noncompliance
with which would not reasonably be expected to have a Material Adverse Effect.

 

Section 4.6 Inspection
of Property, Books and Records.

 

Borrower will keep, and will cause each Subsidiary
to keep, proper books of record and account 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 representatives of Agent, at the sole cost of Borrower
or any applicable Subsidiary (at the expense of Borrower not to exceed one (1)
time per calendar year unless an Event of Default shall have occurred and is
continuing and subject to the expense limitation described in Section 2.3(e)
hereof) and of any Lender (but at such Lender’s expense and provided that
Lender’s representative accompanies Agent’s representative) 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 Accounts 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 and at
reasonable times during normal business hours. Agent shall be limited to one
such inspection during each year unless and for so long as an Event of Default
shall be continuing or the average daily balance of the Facility exceeds
thirty-five percent (35%) of Borrower’s Availability under the Borrower Base as
calculated on the most recently delivered Borrower Base Certificate. A
representative of the Borrower shall have an opportunity to be present during
all such visits. In the absence of an

 

36

 

Event
of Default, Agent or any Lender exercising any rights pursuant to this Section
4.6 shall give Borrower or any applicable Subsidiary commercially reasonable
prior written notice of such exercise. No notice shall be required during the
existence and continuance of any Event of Default.

 

Section 4.7 Use
of Proceeds.

 

The proceeds of Revolving Loans shall be used by
Borrower solely for the general corporate and working capital needs of
Borrower, and in any case, in compliance with applicable law.

 

Section 4.8 Notification
of Certain Events Pertaining to Collateral.

 

(a) Borrower shall notify Agent promptly of: (i) any
material delay in the performance by Borrower or any of its Subsidiaries of any
of their material obligations to any Account Debtor or the assertion of any
material claims, offsets, defenses or counterclaims by any Account Debtor, or
any material disputes with Account Debtors, or any settlement, adjustment or
compromise thereof, which, in each case, would reasonably be expected to result
in a Material Adverse Effect, and (ii) all adverse information known to any
Credit Party relating to the financial condition of any Account Debtor which
would reasonably be expected to result in a Material Adverse Effect. Borrower
hereby agrees not to grant to any Account Debtor, and to cause each of its
Subsidiaries not to grant to any Account Debtor, any credit, discount,
allowance or extension, or to enter into any agreement for any of the
foregoing, without Agent’s consent, except in the ordinary course of business.
So long as no Event of Default exists or has occurred and is continuing,
Borrower may settle, adjust or compromise, and may permit each of its
Subsidiaries to settle, adjust or compromise, any claim, offset, counterclaim
or dispute with any Account Debtor. At any time that an Event of Default exists
or has occurred and is continuing, Agent shall, at its option, have the
exclusive right to settle, adjust or compromise any claim, offset, counterclaim
or dispute with Account Debtors of any Credit Party or grant any credits,
discounts or allowances.

 

(b) With respect to each Account: (i) the amounts
shown on any invoice delivered to Agent or schedule thereof delivered to Agent
shall be true and complete in all material respects, (ii) no payments shall be
made thereon except payments to the Lockbox or Lockbox Account in accordance
with Section 2.10 of this Agreement, and (iii) there shall be no setoffs,
deductions, contras, defenses, counterclaims or disputes existing or asserted
with respect thereto outside of the ordinary course of Borrower’s (or its
Subsidiaries’ if applicable) business.

 

(c) Agent shall have the right at any time or times
following the occurrence and during the continuance of an Event of Default, in
Agent’s name or in the name of a nominee of Agent, to verify the validity,
amount or any other matter relating to any Account or other Collateral, by
mail, telephone, e-mail, facsimile transmission or otherwise. To facilitate the
exercise of the right described in the immediately preceding sentence, Borrower
hereby agrees to provide Agent upon reasonable request the name and address of
each Account Debtor of Borrower or any of its Subsidiaries.

 

37

 

Section 4.9 Further
Assurances.

 

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 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 establish, preserve, protect and perfect a first priority
Lien (subject only to Permitted Liens) in favor of Agent for the benefit of
Lenders on the Collateral (including Collateral acquired after the date
hereof), whether now owned or hereafter acquired. Borrower will cause each
hereafter acquired Subsidiary to, within ten (10) Business Days of the
acquisition of such Subsidiary and at its own cost and expense, execute a
joinder to the Subsidiary Guaranty and the Subsidiary Security Agreement, and
such other documents and agreements as Agent may reasonably require to obtain a
first priority perfected security interests in the assets of such Subsidiary
(subject to Permitted Liens, and otherwise consistent with the Security
Interests granted to Agent by Borrower in the Security Documents), all in form
an substance reasonably acceptable to Agent.

 

ARTICLE 5

NEGATIVE
COVENANTS

 

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

 

Section 5.1 Debt.

 

If and to the extent that Borrower incurs Debt that
is secured by any Inventory or Intellectual Property (to the extent necessary
to establish or to maintain a first priority perfected security interest in the
Accounts, or to enforce Agent’s first priority perfected security interest in
the Accounts) of Borrower, Borrower shall deliver to Agent an intercreditor
agreement with the holders of such other secured Debt, which intercreditor
agreement shall be reasonably satisfactory to Agent in form and substance,
including, without limitation, any provisions addressing the proceeds of any Inventory,
to the extent such proceeds constitute Lenders’ Collateral.

 

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
Collateral now owned or hereafter acquired by it, except:

 

(a) Liens created by the Security Documents;

 

(b) Liens existing on the date of this Agreement as
set forth in the Information Certificate;

 

(c) Liens for taxes or other governmental charges
not at the time delinquent or thereafter payable without penalty or the subject
of a Permitted Contest;

 

38

 

(d) Liens arising in the ordinary course of business
(i) in favor of carriers, warehousemen, mechanics and materialmen, and other
similar Liens imposed by law and (ii) in connection with worker’s compensation,
unemployment compensation and other types of social security (excluding Liens
arising under ERISA) or in connection with surety bonds, bids, performance
bonds and similar obligations) for sums not overdue or the subject of a
Permitted Contest and not involving any deposits or advances or borrowed money
or the deferred purchase price of property or services and, in each case, for
which it maintains adequate reserves;

 

(e) attachments, appeal bonds, judgments and other
similar Liens, for sums not exceeding $500,000 arising in connection with court
proceedings; provided that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are the subject of a Permitted Contest; and

 

(f) easements, rights of way, restrictions, minor
defects or irregularities in title and other similar Liens not interfering in
any material respect with the ordinary conduct of the business of Borrower or
any Subsidiary.

 

(g) bankers’ Liens, rights of setoff and other
similar Liens existing solely with respect to cash and cash equivalents on
deposit in one or more accounts maintained by Borrower or its Subsidiaries, in
each case granted in the ordinary course of business in favor of the bank or
banks with which such accounts are maintained, securing amounts owing to such
bank with respect to cash management and operating account arrangements,
including those involving pooled accounts and netting arrangements; provided
that in no case shall any such Liens secure (either directly or indirectly) the
repayment of any indebtedness;

 

(h) licenses or sublicenses of Intellectual Property
granted by Borrower in the ordinary course of business and not interfering in
any material respect with the ordinary conduct of the business of Borrower;

 

(i) Liens attaching solely to cash earnest money
deposits in connection with any letter of intent or purchase agreement in
connection with a permitted acquisition;

 

(j) Liens which arise under Article 4 of the UCC on
items in collection and documents and proceeds related thereto;

 

(k) Liens deemed to exist in connection with set-off
rights in the ordinary course of Borrower’s business;

 

(l) replacement, extension or renewal of any Lien
permitted herein in the same property previously subject thereto; and

 

(m) Liens which are subordinate to the Agent’s Lien
in the Collateral pursuant to an intercreditor agreement, in form and substance
satisfactory to Agent in its sole and absolute discretion, but solely to the
extent Agent, for the benefit of the Lenders, receives or waives a perfected
subordinate secured interest in those assets of the Borrower and its
Subsidiaries not constituting Collateral in which the other financial
institution party to such intercreditor agreement has a prior Lien, in form and
substance satisfactory to Agent in its sole and absolute discretion.

 

39

 

Section 5.3 Restricted
Distributions.

 

(a) After the occurrence and during the continuance
of an Event of Default, 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.

 

Section 5.4 Reserved.

 

Section 5.5 Reserved.

 

Section 5.6 Consolidations,
Mergers and Sales of Assets.

 

No Borrower will, or will permit any Subsidiary to,
directly or indirectly (a) consolidate or merge with or into any other Person
unless Borrower or a wholly-owned Subsidiary of Borrower is the surviving
entity, or (b) sell, lease, license or otherwise transfer, directly or
indirectly, any portion of the Collateral except that discounts in connection
with settlements or compromises thereof in the ordinary course of business
shall be permitted, (c) sell, lease, license or otherwise transfer, directly or
indirectly, any other assets of Borrower or its Subsidiaries, if, after giving
effect to such Asset Disposition any Default or Event of Default would result
from such Asset Disposition, provided, that:

 

(i)
Capital expenditures by Borrower and the Subsidiaries shall be permitted;

 

(ii)
(a) asset sales of used, negligible, worn out, uneconomical, obsolete or
surplus property by Borrower and its Subsidiaries in the ordinary course of
business and the abandonment or other asset sale of Intellectual Property that
is, in the reasonable judgment of Borrower or its applicable Subsidiary, no
longer economically practicable to maintain or useful in the conduct of the
business of Borrower or its applicable Subsidiary shall be permitted and (b) the
sale, lease or other disposal of any assets shall be permitted, so long as,
after giving effect to such Asset Disposition, no Event of Default would result
from such Asset Disposition;

 

(iii)
Permitted Investments may be made to the extent permitted by this Agreement;

 

(iv)
Borrower and its Subsidiaries may sell cash equivalents and use cash for
purposes that are not prohibited by the terms of this Agreement in the ordinary
course of business;

 

(v)
Borrower and its Subsidiaries may lease (as lessee or lessor) real or personal
property and may guaranty such lease, in each case, in the ordinary course of
business;

 

40

 

(vi)
any Credit Party may transfer property or lease to or acquire or lease property
from any Credit Party;

 

(vii)
asset sales by any Credit Party to any other Credit Party shall be permitted;

 

(viii)
sales of non-core assets owned by the targets of permitted acquisitions and
acquired as a result of such permitted acquisitions shall be permitted; and

 

(ix)
issuance of capital stock of or to Borrower (including warrants or options or
similar interests) shall be permitted.

 

Section 5.7 Purchase
of Assets.

 

No Borrower will, or will permit any Subsidiary to,
directly or indirectly acquire any assets other than in the ordinary course of
business if, after giving effect to such acquisition, any Event of Default
would result from such acquisition. No Borrower will, or will permit any
Subsidiary to, directly or indirectly make or acquire any Investment in any
Person if, after giving effect to such Investment, any Event of Default would
result from such Investment.

 

Section 5.8 Transactions
with Affiliates.

 

Except
(i) as disclosed in the Information Certificate, (ii) for transactions that are
disclosed to Agent in writing in advance of being entered into and which
contain terms that are no less favorable to Borrower or any Subsidiary, as the
case may be, than those which might be obtained from a third-party, (iii) as
expressly permitted by this Agreement; (iv) in the ordinary course of business
and pursuant to the reasonable requirements of the business of Borrower or its
Subsidiaries; (v) issuance of any equity or the receipt of any contributions to
the capital of Borrower or any Subsidiary; or (vi) the payment of reasonable
and customary fees paid to, and indemnity provided on behalf of, officers,
directors, employees and consultants of Borrower or any Subsidiary, 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 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 in a manner adverse to Agent without Agent’s written consent,
except for such amendments or other modifications required by law and fully
disclosed to Agent.

 

Section 5.10 Fiscal
Year.

 

No Borrower will, or will permit any Subsidiary to,
change its Fiscal Year without Agent’s written consent (such consent not to be
unreasonably withheld).

 

41

 

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 businesses reasonably related
thereto and reasonable extensions thereof.

 

Section 5.12 Bank
Accounts.

 

Without limiting the provisions of Section 2.10, no
Borrower will, or will permit any Subsidiary to, directly or indirectly,
establish any new bank account which payment or other deposits in respect of
Collateral are received without prior written notice to Agent and unless Agent,
Borrower or such Subsidiary and the bank at which the account is to be opened
enter into a control agreement regarding such bank account pursuant to which
such bank acknowledges the security interest of Agent in such bank account,
agrees to comply with instructions originated by Agent directing disposition of
the funds in the bank account without further consent from Borrower, and agrees
to subordinate and limit any security interest the bank may have in the bank
account on terms reasonably satisfactory to Agent.

 

ARTICLE 6

 

[INTENTIONALLY
OMITTED]

 

ARTICLE  7

FINANCIAL
COVENANTS

 

Section 7.1 Minimum
Revenues.

 

Borrower agrees, that so long as any Credit Exposure
exists, Borrower shall not permit the average monthly total revenues of
Borrower and its consolidated Subsidiaries (as provided in the financial
statements delivered to Agent pursuant to Section 4.1(a) hereof), calculated on
a trailing twelve month basis, to equal less than $11,600,000 per month for a
period of three (3) consecutive months.

 

ARTICLE 8

CONDITIONS

 

Section 8.1 Conditions
to Closing.

 

The obligation of each Lender to make the initial
Loans shall be subject to the receipt by Agent of each agreement, document and
instrument set forth on the Closing Checklist, each in form and substance
satisfactory to Agent, and to the consummation of the following conditions
precedent, each to the satisfaction of Agent and Lenders in their sole
discretion:

 

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

 

42

 

(b) the satisfaction of Agent as to the absence,
since June 30, 2004, of any material adverse change in any aspect of the
business, operations, properties or condition (financial or otherwise) of any
Credit Party; and

 

(c) receipt by Agent of each of the items on the
Closing Checklist and such other documents, instruments and/or agreements as
Agent may reasonably request.

 

Section 8.2 Conditions
to Each Loan.

 

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

 

(a) in the case of a Revolving Loan Borrowing,
receipt by Agent of a Notice of Borrowing in accordance with Section 2.2(b);

 

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

 

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

 

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

 

(e) Agent shall have received each document and
agreement set forth on that certain Post Closing Letter Agreement dated as of
even date herewith between Borrower and Agent and each condition set forth in
the Post Closing Letter Agreement shall have been satisfied.

 

Each borrowing, and each giving of a Notice of
Borrowing hereunder shall be deemed to be a representation and warranty by
Borrower on the date of such borrowing or notice as to the facts specified in
Sections 8.2(b), 8.2(c) and 8.2(d).

 

ARTICLE 9

EVENTS OF
DEFAULT

 

Section 9.1 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) Borrower shall fail to pay any principal under
any Financing Document when due, or any interest, premium or fee or any other
amount payable under any Financing Document within two days following its due
date;

 

43

 

(b) Borrower shall fail to observe or perform any
covenant contained in Section 4.1, Section 4.4, Section 4.7, Article 5 or
Article 7;

 

(c) 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 9.1 for which a different grace or cure period is specified or
which constitute immediate Events of Default) and such default is not remedied
or waived within thirty (30) days after the earlier of (i) receipt by Borrower
of notice from Agent or Required Lenders of such default or (ii) actual
knowledge of Borrower or any other Credit Party of such default;

 

(d) 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);

 

(e) (i) 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 and with respect to clause (f) of the definition
of Debt) having an aggregate principal amount in excess of $1,000,000 or having
an aggregate principal amount in excess of $1,000,000, or (ii) the occurrence
of any breach, default, condition or event with respect to any Debt (other than
the Loans and with respect to clause (f) of the definition of Debt), if the
effect of such failure or occurrence is to cause or to permit the holder or
holders thereof to cause, Debt having an individual principal amount in excess
of $2,500,000 or having an aggregate principal amount in excess of $2,500,000
to become or be declared due prior to its stated maturity;

 

(f) any Credit Party 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;

 

(g) an involuntary case or other proceeding shall be
commenced against any Credit Party 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

 

44

 

remain
undismissed and unstayed for a period of sixty (60) days; or an order for
relief shall be entered against any Credit Party under the federal bankruptcy
laws as now or hereafter in effect;

 

(h) (i) institution of any steps by any Person to
terminate a Pension Plan if as a result of such termination any Credit Party or
any member of the Controlled Group could be required to make a contribution to
such Pension Plan, or could incur a liability or obligation to such Pension
Plan, in excess of $2,500,000, (ii) a contribution failure occurs with respect
to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA, or (iii) there shall occur any withdrawal or partial withdrawal from a
Multiemployer Pension Plan and the withdrawal liability (without unaccrued
interest) to Multiemployer Pension Plans as a result of such withdrawal
(including any outstanding withdrawal liability that any Credit Party or any
member of the Controlled Group have incurred on the date of such withdrawal)
exceeds $2,500,000;

 

(i) one or more judgments or orders for the payment
of money aggregating in excess of $2,500,000 shall be rendered against any or
all Credit Parties and such judgments or orders shall continue unsatisfied and
unstayed for a period of twenty (20) days;

 

(j) a Change of Control shall have occurred,

 

(k) the accountant’s report or reports on the
audited statements delivered pursuant to Section 4.1(b) shall include any
material qualification or exception which in either case would reasonably be
expected to have a Material Adverse Effect.

 

(l) 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 secured thereby, subject to no prior or
equal Lien except Permitted Liens, or any Credit Party shall so assert in
writing;

 

(m) any Credit Party shall be prohibited or
otherwise materially restrained from conducting the business as a whole
theretofore conducted by it by virtue of any uninsured casualty, any labor
strike, any determination, ruling, decision, decree or order of any court or
regulatory authority of competent jurisdiction or any other event and such
uninsured casualty, labor strike, determination, ruling, decision, decree,
order or other event remains unstayed and in effect for any period of thirty
(30) days; or

 

(n) any of the Operative Documents shall for any
reason fail to constitute the valid and binding agreement of any party thereto
in any material respect, or any such party shall so assert in writing.

 

Section 9.2 Acceleration
and Suspension or Termination of Revolving Loan Commitment.

 

Upon the occurrence and during the continuance of an
Event of Default, Agent may, and shall if requested by Required Lenders, (a) by
notice to Borrower suspend or terminate the Revolving Loan Commitment, in whole
or in part (and, if in part, such reduction shall be pro rata among Lenders)
and/or (b) by notice to Borrower declare the

 

45

 

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 Borrower and Borrower will pay the same; provided that in the case of any of the
Events of Default specified in Section 9.1(f) or 9.1(g) above, without any
notice to Borrower or any other act by Agent or Lenders, the Revolving Loan
Commitment shall thereupon terminate and all of the Obligations shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by Borrower and Borrower will pay
the same.

 

Section 9.3 Reserved.

 

Section 9.4 Default
Rate of Interest.

 

At the election of 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 two percent (2.0%)
in excess of the rates otherwise payable under this Agreement.

 

Section 9.5 Setoff
Rights.

 

During the continuance of any Event of Default, each
Lender is hereby authorized by Borrower at any time or from time to time, with
reasonably prompt subsequent notice to 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 at any of its offices for
the account of Borrower or any of its Subsidiaries (regardless of whether such
balances are then due to 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 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 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. Borrower
agrees, to the fullest extent permitted by law, that any Lender may exercise
its right to set off with respect to the Obligations as provided in this
Section 9.5.

 

Section 9.6 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) Borrower irrevocably waives the right to direct the application
of any and all payments at any time or times thereafter received by Agent from
or on behalf of Borrower or any guarantor of all or any part of the
Obligations, and Agent shall have the continuing and exclusive right to apply
and to reapply any and all payments received at any time or times after the
occurrence and during the continuance of an Event of Default against the
Obligations in such manner as Agent may deem advisable notwithstanding any
previous application by Agent, and (b) in the absence of a specific
determination by Agent with respect thereto, the proceeds of any sale of, or
other

 

46

 

realization
upon, all or any part of the Collateral shall be applied: first, to all
fees, costs, indemnities and expenses incurred by or owing to Agent with
respect to this Agreement, the other Financing Documents or the Collateral; second,
to all fees, costs, indemnities 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 U.S. Bankruptcy
Code, would have accrued on such amounts); fourth, to the principal
amount of the Obligations outstanding; and fifth to any other
indebtedness or obligations of Borrower owing to Agent or any Lender under the
Financing Documents. Any balance remaining shall be delivered to Borrower or to
whomever may be lawfully entitled to receive such balance or as a court of
competent jurisdiction may direct.

 

ARTICLE 10

EXPENSES,
INDEMNITY, TAXES AND RIGHT TO PERFORM

 

Section 10.1 Expenses.

 

Borrower hereby agrees to promptly pay (a) all costs
and expenses of Agent (including without limitation the reasonable fees, costs
and expenses of counsel to, and independent appraisers and consultants retained
by Agent) in connection with the examination, review, due diligence
investigation, documentation, negotiation and closing of the transactions
contemplated by the Financing Documents, in connection with the performance by
Agent of its rights and remedies under the Financing Documents and in
connection with the continued administration of the Financing Documents
including any amendments, modifications, consents and waivers to and/or under
any and all Financing Documents, (b) without limitation of the preceding clause
(a), all costs and expenses of Agent in connection with the creation,
perfection and maintenance of Liens pursuant to the Financing Documents,
including lien searches, (c) without limitation of the preceding clause (a),
expenses of Agent in connection with protecting, storing, insuring, handling,
maintaining or selling any Collateral and in connection with any workout,
collection, bankruptcy, insolvency and other enforcement proceedings under any
and all of the Financing Documents, and (d) all costs and expenses incurred by
Lenders in connection with any workout, collection, bankruptcy, insolvency and
other enforcement proceedings under any and all Financing Documents, provided, that to the extent that the costs
and expenses referred to herein consist of fees, costs and expenses of counsel,
Borrower shall be obligated to pay such fees, costs and expenses for only one
counsel acting for all Lenders (other than Agent).

 

Section 10.2 Indemnity.

 

Borrower hereby agrees to indemnify, pay and hold
harmless Agent and Lenders and the officers, directors, employees and counsel
of Agent and Lenders (collectively called the “Indemnitees”) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the reasonable fees and disbursements of outside counsel for such Indemnitee)
in connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitee shall be designated a party thereto and
including any such proceeding initiated by or on behalf of a Credit Party,

 

47

 

and
the reasonable expenses of investigation by engineers, environmental
consultants and similar technical personnel and any commission, fee or
compensation claimed by any broker (other than any broker retained by Agent or
Lenders) asserting any right to payment for the transactions contemplated hereby,
which may be imposed on, incurred by or asserted against such Indemnitee as a
result of or in connection with the transactions contemplated hereby or by the
other Operative Documents (including (i)(A) as a direct or indirect result of
the presence on or under, or escape, seepage, leakage, spillage, discharge,
emission or release from, any property now or previously owned, leased or
operated by Borrower, any Subsidiary or any other Person of any Hazardous
Materials or any Hazardous Materials Contamination, (B) arising out of or
relating to the offsite disposal of any materials generated or present on any
such property or (C) arising out of or resulting from the environmental
condition of any such property or the applicability of any governmental
requirements relating to Hazardous Materials, whether or not occasioned wholly
or in part by any condition, accident or event caused by any act or omission of
Borrower or any Subsidiary, and (ii) proposed and actual extensions of credit
under this Agreement) and the use or intended use of the proceeds of the Notes
and Letters of Credit, except that no Borrower shall have any obligation
hereunder to an Indemnitee with respect to any liability resulting from the
gross negligence, willful misconduct or breach of contract of such Indemnitee,
as determined by a court of competent jurisdiction. To the extent that the
undertaking set forth in the immediately preceding sentence may be
unenforceable, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all such indemnified liabilities incurred by the Indemnitees or
any of them.

 

Section 10.3 Taxes.

 

Borrower agrees to pay all governmental assessments,
charges or taxes (except income, franchise or other similar taxes imposed on
Agent or Lenders), including any interest or penalties thereon, at any time
payable or ruled to be payable in respect of the existence, execution or
delivery of this Agreement or the other Financing Documents or the issuance of
the Notes or Letters of Credit and to indemnify and hold Agent and Lenders
harmless against liability in connection with any such assessments, charges or
taxes.

 

Section 10.4 Right
to Perform.

 

If, upon the occurrence and continuance of an Event of
Default, any Credit Party fails to perform any obligation hereunder or under
any other Financing Document, Agent itself may, but shall not be obligated to,
use its commercially reasonable efforts to cause such obligation to be
performed at Borrower’s expense and Borrower agrees to reimburse Agent therefor
on demand. All amounts owing hereunder or under any other Financing Document
may be satisfied in full, subject to the provisions of Section 2.2(a)(ii),
through the making of Agent Advances.

 

48

 

ARTICLE 11

AGENT

 

Section 11.1 Appointment
and Authorization.

 

Each Lender hereby irrevocably appoints and
authorizes Agent to enter into each of the Security Documents on its behalf and
to take such actions as Agent on its behalf and to exercise such powers under
the Financing Documents as are delegated to Agent by the terms thereof,
together with all such powers as are reasonably incidental thereto. Except as
otherwise expressly provided in Section 12.5 or by the terms of the Financing
Documents, 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 Agent
and Lenders and neither 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, 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
Borrower or any other Credit Party. Agent may perform any of its duties
hereunder, or under the Financing Documents, by or through its agents or
employees.

 

Section 11.2 Agent
and Affiliates.

 

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

 

Section 11.3 Action
by Agent.

 

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

 

Section 11.4 Consultation
with Experts.

 

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

 

Section 11.5 Liability
of Agent.

 

Neither Agent nor any of its directors, officers,
agents or employees shall be liable to any Lender for any action taken or not
taken by it in connection with the Financing Documents, except that Agent shall
be liable to the extent of its own gross negligence or

 

49

 

willful
misconduct as determined by a court of competent jurisdiction. Neither Agent
nor any of its directors, officers, agents or employees shall be responsible
for or have any duty to ascertain, inquire into or verify (i) any statement,
warranty or representation made in connection with any Financing Document or
any borrowing hereunder; (ii) the performance or observance of any of the
covenants or agreements specified in any Financing Agreement; (iii) the
satisfaction of any condition specified in any Financing Document, except
receipt of items required to be delivered to Agent; (iv) the validity,
effectiveness, sufficiency or genuineness of any Financing Document, any Lien
purported to be created or perfected thereby or any other instrument or writing
furnished in connection therewith; (v) the existence or non-existence of any
Default or Event of Default; or (vi) the financial condition of any Credit
Party. Agent shall not incur any liability by acting in reliance upon any
notice, consent, certificate, statement, or other writing (which may be a bank
wire, telex, facsimile or electronic transmission or similar writing) believed
by it to be genuine or to be signed by the proper party or parties. Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Lender to whom
payment was due but not made, shall be to recover from other Lenders any
payment in excess of the amount to which they are determined to be entitled
(and such other Lenders hereby agree to return to such Lender any such
erroneous payments received by them).

 

Section 11.6 Indemnification.

 

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

 

Section 11.7 Right
to Request and Act on Instructions.

 

Agent may at any time request instructions from
Lenders with respect to any actions or approvals which by the terms of this
Agreement or of any of the Financing Documents Agent is permitted or desires to
take or to grant, and if such instructions are promptly requested, Agent shall
be absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions from
Required Lenders or all or such other portion of Lenders as shall be prescribed
by this Agreement. Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting under this Agreement or any of the other Financing
Documents in accordance with the instructions of Required Lenders and,
notwithstanding the

 

50

 

instructions
of Required Lenders, Agent shall have no obligation to take any action if it
believes, in good faith, that such action exposes Agent to any liability for
which it has not received satisfactory indemnification in accordance with the
provisions of Section 11.6.

 

Section 11.8 Credit
Decision.

 

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

 

Section 11.9 Collateral
Matters.

 

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

 

Section 11.10 Agency
for Perfection.

 

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

 

Section 11.11 Notice
of Default.

 

Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default except with respect
to defaults in the payment of principal, interest and fees required to be paid
to Agent for the account of Lenders, unless Agent shall have received written
notice from a Lender or Borrower referring to this Agreement,

 

51

 

describing
such Default or Event of Default and stating that such notice is a “notice of
default”. Agent will notify each Lender of its receipt of any such notice.
Agent shall take such action with respect to such Default or Event of Default
as may be requested by Required Lenders in accordance with the terms hereof.
Unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable or in
the best interests of Lenders.

 

Section 11.12 Successor
Agent.

 

Agent may resign only with the consent of the
Borrower (such consent not to be unreasonably withheld or required if an Event
of Default shall have occurred and be continuing) by giving written notice
thereof to Lenders and Borrower. Upon any such resignation, Required Lenders
shall have the right to appoint a successor Agent. If no successor Agent shall have
been so appointed by Required Lenders, and shall have accepted such
appointment, within thirty (30) days after the retiring Agent gives notice of
resignation, then the retiring Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be an institution organized or licensed under the
laws of the United States of America or of any State thereof. Upon the
acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent’s
resignation hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.

 

Section 11.13 Disbursements
of Revolving Loans; Payment.

 

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

 

(i) Agent shall have the right, on behalf of
Lenders, to disburse funds to Borrower for all Revolving Loans requested by
Borrower pursuant to the terms of this Agreement. Absent the prior receipt by
Agent of a written notice from any Lender pursuant to which such Lender
notifies Agent that such Lender shall cease making Revolving Loans (whether due
to the existence of a Default or Event of Default or otherwise), Agent shall be
conclusively entitled to assume, for purposes of the preceding sentence, that
each Lender will fund its Pro Rata Share of all Revolving Loans requested by
Borrower. Each Lender shall reimburse Agent on demand, in accordance with the
provisions of the immediately following paragraph, for all funds disbursed on
its behalf by Agent pursuant to the preceding sentence, or if Agent so
requests, each Lender will remit to Agent its Pro Rata Share of any Revolving
Loan before Agent disburses the same to Borrower. If Agent elects to require
that each Lender make funds available to Agent, prior to a disbursement by
Agent to Borrower, Agent shall advise each Lender by telephone, facsimile or
e-mail of the amount of such Lender’s Pro Rata Share of the Revolving Loan
requested by Borrower no later than noon (Chicago time) on the date of funding
of such Revolving Loan, and each such Lender shall pay Agent on such date such
Lender’s Pro Rata Share of such requested Revolving Loan, in same day funds, by
wire transfer to the Payment Account, or such other account as

 

52

 

may
be identified in writing by Agent to Lenders from time to time. If any Lender
fails to pay the amount of its Pro Rata Share within one (1) Business Day after
Agent’s demand, Agent shall promptly notify Borrower, and Borrower shall
immediately repay such amount to Agent. Any repayment required pursuant to this
Section 11.13 shall be without premium or penalty. Nothing in this Section
11.13 or elsewhere in this Agreement or the other Financing Documents shall be
deemed to require Agent to advance funds on behalf of any Lender or to relieve
any Lender from its obligation to fulfill its commitments hereunder or to
prejudice any rights that Agent or Borrower may have against any Lender as a
result of any default by such Lender hereunder.

 

(ii) On a Business Day of each week as selected from
time to time by Agent, or more frequently (including daily), if Agent so elects
(each such day being a “Settlement Date”),
Agent will advise each Lender by telephone, facsimile or e-mail of the amount
of each such Lender’s Pro Rata Share of the Revolving Loan balance (including
any Agent Advances) as of the close of business of the Business Day immediately
preceding the Settlement Date. In the event that payments are necessary to
adjust the amount of such Lender’s actual Pro Rata Share of the Revolving Loan
balance to such Lender’s required Pro Rata Share of the Revolving Loan balance
as of any Settlement Date, the party from which such payment is due (i) shall
be deemed, irrevocably and unconditionally, to have purchased, without recourse
or warranty, an undivided interest and participation in the Revolving Loans
sufficient to equate such Lender’s actual Pro Rata Share of the Revolving Loan
balance as of such Settlement Date with such Lender’s required Pro Rata Share
of the Revolving Loans as of such date and (ii) shall pay Agent, without setoff
or discount, in same day funds, by wire transfer to the Payment Account not
later than noon (Chicago time) on the Business Day following the Settlement
Date the full purchase price for such interest and participation, equal to one
hundred percent (100%) of the principal amount of the Revolving Loans being
purchased and sold. In the event settlement shall not have occurred by the date
and time specified in the immediately preceding sentence, interest shall accrue
on the unsettled amount at the Federal Funds Rate, for the first three (3) days
following the scheduled date of settlement, and thereafter at LIBOR plus the
LIBOR Margin.

 

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

 

(iv) The provisions of this Section 11.13(a) shall
be deemed to be binding upon Agent and Lenders notwithstanding the occurrence
of any Default or Event of Default, or any insolvency or bankruptcy proceeding
pertaining to Borrower or any other Credit Party.

 

53

 

(b) Return of
Payments.

 

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

 

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

 

(c) Defaulted
Lenders. The failure of any Defaulted Lender to make any
Revolving Loan or any payment required by it hereunder shall not relieve any
other Lender of its obligations to make such Revolving Loan or payment, but
neither any Lender nor Agent shall be responsible for the failure of any
Defaulted Lender to make a Revolving Loan or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Defaulted Lender shall not have any voting or consent rights under or with
respect to any Financing Document or constitute a “Lender” (or be included in
the calculation of “Required Lenders” hereunder) for any voting or consent
rights under or with respect to any Financing Document. At Borrower’s request,
Agent in its sole and absolute discretion, or a Person specified by Borrower
and reasonably acceptable to Agent, shall have the right to purchase from any
Defaulted Lender, and each Defaulted Lender agrees that it shall, at Agent’s
request, sell and assign to Agent or such Person, all of the lending
commitments and commitment interests of that Defaulted Lender for an amount
equal to the principal balance of all Loans held by such Defaulted Lender and
all accrued interest and fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement. In the event that Borrower shall have notified Agent of its desire to
substitute a replacement Lender for a Defaulted Lender and Agent shall have
consented to such substitute or replacement Lender, Defaulted Lender shall be
required to sell all of its lending commitments and commitment interests to
such replacement Lender in accordance with the terms herein notwithstanding
such Defaulted Lender’s subsequent cure of its defaults 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 and the execution, sale and delivery of the Notes. The
indemnities and agreements set forth in Article 6 and Article 10 shall survive
the payment of the Obligations and any termination of this Agreement.

 

54

 

Section 12.2 No
Waivers.

 

No failure or delay by 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.

 

Section 12.3 Notices.

 

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
and 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 Agent and Borrower; provided, that
notices, requests or other communications shall be permitted by e-mail only
where expressly provided in the Financing Documents. Each such notice, request
or other communication shall be effective (i) if given by facsimile or e-mail,
when such notice is transmitted to the facsimile number or e-mail address
specified by this Section or (ii) if given by mail, prepaid overnight courier
or any other means, when received at the applicable address specified by this
Section.

 

Section 12.4 Severability.

 

In case any provision of or obligation under this
Agreement or the Notes 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.

 

Any provision of this Agreement or the Notes may be
amended or waived if, but only if, such amendment or waiver is in writing and
is signed by Borrower and the Required Lenders (and, if (x) any amendment would
increase either such Lender’s Revolving Loan Commitment Amount, by such Lender
and (y) the rights or duties of Agent are affected thereby, by Agent); provided that no such amendment or waiver
shall, unless signed by all Lenders; (i) reduce the principal of, rate of
interest on or any fees with respect to any Loan or Reimbursement Obligation;
(ii) postpone the date fixed for any payment (other than a payment pursuant to
Section 2.1(c)) of principal of any Loan, or of any Reimbursement Obligation or
of interest on any Loan or any Reimbursement Obligation or any fees hereunder
or for any termination of any commitment; (iii) change the definition of the term

 

55

 

Required
Lenders or the percentage of Lenders which shall be required for Lenders to
take any action hereunder; (iv) amend or waive 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; or (v) consent to the assignment,
delegation or other transfer by any Credit Party of any of its rights and
obligations under any Financing Document

 

Section 12.6 Assignments;
Participations.

 

(a) Assignments.

 

(i) Any Lender may at any time assign to one or more
Persons (any such Person, an “Assignee”)
all or any portion of such Lender’s Loans and interest in the Revolving Loan
Commitment, with the prior written consent of Agent and, so long as no Event of
Default exists, Borrower (which consent shall not be unreasonably withheld or
delayed and shall not be required for an assignment by a Lender to a Lender or
to an Affiliate of a Lender that is not a competitor of Borrower). Except as
Agent and Borrower may otherwise agree, any such assignment shall be in a
minimum aggregate amount equal to $5,000,000 or, if less, the assignor’s entire
interests in the Revolving Loan Commitment and outstanding Loans. Borrower and
Agent shall be entitled to continue to deal solely and directly with such
Lender in connection with the interests so assigned to an Assignee until Agent
shall have received and accepted an effective Assignment Agreement executed,
delivered and fully completed by the applicable parties thereto and a
processing fee of $3,500. Any attempted assignment not made in accordance with
this Section 12.6(a) shall be treated as the sale of a participation under
Section 12.6(b). Borrower shall be deemed to have granted its consent to any
assignment requiring its consent hereunder unless Borrower has expressly
objected to such assignment within five (5) Business Days after notice thereof.
Notwithstanding the forgoing, unless consented to by Borrower (such consent not
to be unreasonably withheld) and provided that no Event of Default has occurred
and is continuing, Merrill Lynch and its Affiliates shall continue to hold an
amount of the Revolving Loan Commitment equal to or greater than the lesser of
$10,000,000 and 40% of the aggregate Revolving Loan Commitment.

 

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

 

56

 

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

 

(iv) Notwithstanding the foregoing provisions of
this Section 12.6(a) or any other provision of this Agreement, any Lender may
at any time assign all or any portion of its Loans and its Note as collateral
security to a Federal Reserve Bank or, as applicable, to such Lender’s trustee
for the benefit of its investors (but no such assignment shall release any
Lender from any of its obligations hereunder).

 

(b) Participations.

 

Any Lender may at any time sell to one or more
Persons participating interests in its Loans, commitments or other interests
hereunder (any such Person, a “Participant”)
with the prior written consent of Agent and, so long as no Event of Default
shall have occurred and be continuing, Borrower (which consent shall not be
unreasonably withheld or delayed and shall not be required for a participation
by a Lender to a Lender or to an Affiliate that is not a competitor of
Borrower). Borrower shall be deemed to have granted its consent to any
participation requiring consent hereunder unless Borrower has expressly
objected to such participation within five (5) Business Days after notice
thereof. Except as Agent and Borrower may otherwise agree, any such
participation shall be in a minimum aggregate amount equal to $5,000,000 or, if
less, such Lender’s entire interests in the Revolving Loan Commitment and
outstanding Loans. In the event of a sale by a Lender of a participating
interest to a Participant, (a) such Lender’s obligations hereunder shall remain
unchanged for all purposes, (b) Borrower and Agent shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights
and obligations hereunder and (c) all amounts payable by Borrower shall be
determined as if such Lender had not sold such participation and shall be paid
directly to such Lender. No Participant shall have any direct or indirect
voting rights hereunder except with respect to any event described in Section
12.5 expressly requiring the unanimous vote of all Lenders or, as applicable,
all affected Lenders. Each Lender agrees to incorporate the requirements of the
preceding sentence into each participation agreement that such Lender enters
into with any Participant. Borrower agrees that if amounts outstanding under
this Agreement are due and payable (as a result of acceleration or otherwise),
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement and with respect
to any Letter of Credit to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided that such
right of set-off shall be subject to the obligation of each Participant to
share with Lenders, and Lenders agree to share with each Participant, as
provided in Section 9.5.

 

57

 

Section 12.7 Amendment
of Information Certificate.

 

Borrower may, from time to time, amend the
Information Certificate to reflect changes in the information, representations
and warranties contained therein to the extent such changes are the result of
actions, events or circumstances otherwise permitted hereunder. Each such
amendment shall by acceptable to, and in form and substance satisfactory to
Agent, and shall be effective only upon the written acknowledgement of Agent,
such Acknowledgment not to be unreasonably withheld.

 

Section 12.8 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 12.9 Confidentiality.

 

In handling any confidential information of any
Credit Party, Agent and each Lender shall exercise the same degree of care that
it exercises with respect to its own proprietary information of the same types
to maintain the confidentiality of any non-public information thereby received
or received pursuant to this Agreement, except that disclosure of such
information may be made: (i) to their respective agents, employees,
Subsidiaries, Affiliates, attorneys, auditors, professional consultants and
rating agencies, (ii) to insurance industry associations and portfolio
managements services for the purposes of syndicating the Loans or insuring
Collateral, provided that they
have agreed to be bound by the provisions of this Section 12.9, (iii) to
prospective transferees or purchasers of any interest in the Loans, provided
that they have agreed to be bound by the provisions of this Section 12.9, (iv)
as required by Law, subpoena, judicial order or similar order and in connection
with any litigation and (v) as may be required in connection with the
examination, audit or similar investigation of such Person. Confidential
information shall include only information provided to Agent or the Lenders,
and shall not include information that either: (x) is in the public domain, or
becomes part of the public domain after disclosure to such Person through no
fault of such Person, or (y) is disclosed to such Person by a third-party,
provided, however Agent does not have actual knowledge that such Person is
prohibited from disclosing such information. The obligations of Agent and
Lenders under this Section 12.9 shall supercede and replace the obligations of
Agent and Lenders under any confidentiality agreement in respect of this
financing executed and delivered by Agent or any Lender prior to the date
hereof.

 

Section 12.10 GOVERNING
LAW; SUBMISSION TO JURISDICTION.

 

THIS AGREEMENT, EACH NOTE AND EACH
OTHER FINANCING DOCUMENT 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. BORROWER HEREBY CONSENTS TO THE JURISDICTION
OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF COOK, STATE OF
ILLINOIS

 

58

 

AND IRREVOCABLY AGREES THAT, SUBJECT TO 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.
BORROWER EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. BORROWER HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE UPON BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, ADDRESSED TO BORROWER AT THE APPLICABLE 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.

 

EACH OF BORROWER, AGENT AND EACH
LENDER 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.

 

Section 12.12 Waiver
of Consequential and Other Damages.

 

To the fullest extent permitted by applicable law,
Borrower shall not assert, and Borrower hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of this Agreement, any other Financing Document
or any agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or Letter of Credit or the use of the
proceeds thereof. Absent gross negligence or willful misconduct, 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 12.13 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 without Merrill Lynch’s prior
written consent.

 

(b) Advertisement.
Subject to Borrower’s prior approval, each Credit Party hereby authorizes
Merrill Lynch to publish the name of such Credit Party and the amount of the
financing evidenced hereby in any “tombstone” or comparable advertisement which

 

59

 

Merrill
Lynch elects to publish. In addition, 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
Borrower 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 publication.

 

Section 12.14 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. 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.

 

- Remainder
of Page Intentionally Left Blank; Signature Pages Follow -

 

60

 

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.

 

	
   

  	
  RELIANT PHARMACEUTICALS, INC., a

  
	
   

  	
  Delaware
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  A Steven Franchak

  	
   

  
	
   

  	
  Name:

  	
  A.
  Steven Franchak

  
	
   

  	
  Title:

  	
  Vice
  President, Finance

  
	
   

  	
   

  	
   

  
	
   

  	
      Address:

  	
  110
  Allen Road

  
	
   

  	
   

  	
  Liberty
  Corner, New Jersey 07938

  
	
   

  	
   

  	
  Attn:
  President

  
	
   

  	
   

  	
  Facsimile
  number: (908) 542-9405

  
	
   

  	
   

  	
   

  
	
   

  	
  Borrower’s Account Designation:

  
	
   

  	
   

  	
   

  
	
   

  	
  Wachovia
  Bank, N.A.

  
	
   

  	
  ABA
  No.:

  
	
   

  	
  Account
  No.:

  
	
   

  	
  Account
  Name:

  
	
   

  	
  Reference:

  
	
   

  	
   

  	
   

  
	
   

  	
  MERRILL LYNCH CAPITAL, a division of 

  Merrill Lynch Business Financial Services Inc., 

  as Agent and a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Garrett W. Fletcher

  	
   

  
	
   

  	
  Name:

  	
  Garrett
  W. Fletcher

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  	
   

  
	
   

  	
      Notice

  
	
   

  	
      Address:

  	
  222
  North LaSalle Street, 16th Floor

  
	
   

  	
   

  	
  Chicago,
  IL 60601

  
	
   

  	
   

  	
  Attn:
  Portfolio Mgt. – Healthcare

  
	
   

  	
   

  	
  Facsimile
  number: (312) 750-6226

  
	
   

  	
   

  	
   

  
	
   

  	
      And
  to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  7700
  Wisconsin Avenue, Suite 400

  
	
   

  	
   

  	
  Bethesda,
  Maryland 20814

  
	
   

  	
   

  	
  Attn:
  Legal Department

  
	
   

  	
   

  	
  Facsimile
  number: (301) 907-2206

  
					

 

Credit Agreement

 

 

	
   

  	
  Payment Account Designation:

  
	
   

  	
   

  
	
   

  	
  LaSalle
  Bank

  
	
   

  	
  200
  West Monroe

  
	
   

  	
  Chicago,
  IL 60606

  
	
   

  	
  ABA
  No.:

  
	
   

  	
  Account
  No.:

  
	
   

  	
  Account
  Name:

  
	
   

  	
  Attention:
  ReliantPharmaceuticals

  

 

 

Annex A

 

Commitment
Annex

 

 

	
  Lender

  	
   

  	
  Revolving Loan

  Commitment

  Amount

  	
   

  	
  Revolving Loan

  Commitment

  Percentage

  	
   

  
	
  Merrill Lynch Capital

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTALS

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  100

  	
  %

  

 

Credit Agreement

 

 

Annex B

 

MERRILL
LYNCH CAPITAL

 

CLOSING CHECKLIST

 

RELIANT
PHARMACEUTICALS, INC.

 

$25,000,000
Revolving Loan Facility

 

CLOSING DATE:
August 19, 2004

 

PARTIES TO
THE TRANSACTION

 

	
  AGENT:

  	
   

  	
  MERRILL LYNCH CAPITAL

  7700 Wisconsin Avenue, Suite 400

  Bethesda, Maryland 20814

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Garrett Fletcher (garrett_fletcher@ml.com)

  
	
   

  	
   

  	
  Tel.: (301) 907-2226; Fax: (301) 907-2205

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lisa Lenderman (lisa_lenderman@ml.com)

  
	
   

  	
   

  	
  Tel.: (301) 907-2235; Fax: (301) 907-2205

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGENT’S COUNSEL:

  	
   

  	
  Katten Muchin Zavis Rosenman

  525 West Monroe Street, Suite 1600

  Chicago, Illinois 60661

  Telephone No.: (612) 902-5200

  Facsimile No.: (312) 902-1061

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Zack Wagman (zach.wagman@kmzr.com)

  
	
   

  	
   

  	
  Tel.: (312) 902-5229; Fax: (312) 577-4638

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Daniel M. Entsminger
  (daniel.entsminger@kmzr.com)

  
	
   

  	
   

  	
  Tel.: (312) 902-5631; Fax: (312) 577-4497

  
	
   

  	
   

  	
   

  
	
  BORROWER:

  	
   

  	
  Reliant Pharmaceuticals, Inc.

  110 Allen Road

  Liberty Corner, New Jersey 07938

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Larry Gyenes (lGyenes@reliantrx.com)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Steve Franchak (sfranchak@reliantrx.com)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Len Brooks (lbrooks@reliantrx.com)

  
	
   

  	
   

  	
  Tel.: (908) 860-4687; Fax: 908-860-4661

  
	
   

  	
   

  	
   

  

 

 

	
  COUNSEL TO BORROWER, HOLDINGS, SUBSIDIARY
  AND EQUITY SPONSOR:

  	
   

  	
  Latham & Watkins

  Sears Tower, Suite 5800

  233 South Wacker Drive

  Chicago, IL 60606-6401

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Bradley Kotler
  (bradley.kotler@lw.com)

  
	
   

  	
   

  	
  Tel.: (312) 876-7651; Fax: (312) 993-9767

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  David M. Buchanan (david.buchanan@lw.com)

  
	
   

  	
   

  	
  Tel.: (312) 876-6537; Fax: (312) 993-9767

  

 

	
  A.

  	
  Pre-Closing Documents

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Term Sheet

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Pre-Funding UCC Authorization Letter

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
  Loan Documents

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Credit Agreement

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Annex A

  	
   

  	
  Commitment Annex

  
	
   

  	
   

  	
  Annex B

  	
   

  	
  Closing Checklist

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exhibit A

  	
   

  	
  Form of Assignment and Acceptance

  
	
   

  	
   

  	
  Exhibit B

  	
   

  	
  Form Notice of Borrowing

  
	
   

  	
   

  	
  Exhibit C

  	
   

  	
  Form of Compliance Certificate

  
	
   

  	
   

  	
  Exhibit D

  	
   

  	
  Form of Borrowing Base Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  First Amendment to Credit Agreement

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Information Certificate

  
	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Revolving Note

  
	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Guaranty by Subsidiary

  
	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  Initial Borrowing Base Certificate

  
	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Notice of Borrowing and Letter of Direction

  
	
   

  	
   

  	
   

  
	
   

  	
  8.

  	
  Officer’s Closing Certificate

  
	
   

  	
   

  	
   

  
	
   

  	
  9.

  	
  Reciprocal Lien Subordination Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2

 

	
  C.

  	
  Security Documents

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Amended and Restated Security Agreements by Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Security Agreement by Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Security Agreement by Subsidiary

  
	
   

  	
   

  	
   

  
	
   

  	
  4.

  	
  Intellectual Property Security Agreement(s)

  
	
   

  	
   

  	
   

  
	
   

  	
  5.

  	
  Lockbox and Deposit Account Control Agreements between Borrower,
  Agent and Wachovia Bank

  
	
   

  	
   

  	
   

  
	
   

  	
  6.

  	
  UCC Financing (Listed on Exhibit A)

  
	
   

  	
   

  	
   

  
	
   

  	
  7.

  	
  Collateral Access Agreements between Borrower, Agent and The Realty
  Associates Fund V, L.P.

  
	
   

  	
   

  	
   

  
	
  D.

  	
  Collateral Due Diligence

  
	
   

  	
   

  
	
   

  	
  1.

  	
  Ore-Closing Lien Search Reports and Summary thereof

  
	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Post-Closing Lien Search Reports

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Insurance Certificates

  
	
   

  	
   

  	
   

  
	
  E.

  	
  Organizational Due Diligence

  
	
   

  	
   

  
	
   

  	
  1.

  	
  Borrower’s Secretary’s Certificate re:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exhibit A - By-Laws

  
	
   

  	
   

  	
  Exhibit B -   Resolutions

  
	
   

  	
   

  	
  Exhibit C – Consent of the Board of Directors Exhibit A - By-Laws

  
	
   

  	
   

  	
  Exhibit D – Chart Documents

  
	
   

  	
   

  	
  Exhibit E – Delaware Good Standing Certificate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
  Subsidiary’s Secretary’s Certificate re:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Exhibit A - By-Laws

  
	
   

  	
   

  	
  Exhibit B -   Resolutions

  
	
   

  	
   

  	
  Exhibit C – Chart Documents

  
	
   

  	
   

  	
  Exhibit D – Delaware Good Standing Certificate

  
	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
  Certificates of Borrower’s Good Standing certified by the Secretary
  of States of Delaware, Arizona, California, Colorado, Connecticut, Georgia,
  Illinois, New Jersey, Ohio, Pennsylvania & Texas

  
					

 

3

 

	
   

  	
  (a)
  Certificate of Subsidiary’s Good Standing certified by the Secretary of State
  of Delaware

  
	
   

  	
   

  
	
  F.

  	
  Attorney Options 

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Legal Opinion of Latham & Watkins, in its capacity as counsel to
  Borrower and the Subsidiary regarding the Loan Documents

  
	
   

  	
   

  	
   

  
	
  G.

  	
  Post Closing

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1.

  	
  Post-Closing Letter Agreement

  
	
   

  	
   

  	
   

  
	
  H.

  	
  Term Loan Facility Loan Documents

  
	
   

  	
   

  
	
   

  	
  1.

  	
  Loan Documents

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.

  	
  Fee and Indemnity Letter

  
	
   

  	
   

  	
  2.

  	
  Credit & Guaranty Agreement

  
	
   

  	
   

  	
  3.

  	
  Note for each Lender (Section 2.7(c)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  II.

  	
  Collateral Documents

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
  Pledge & Security Agreement together with certain Schedules

  
	
   

  	
   

  	
  5.

  	
  Short Form Patent and Trademark Security Agreement

  
	
   

  	
   

  	
  6.

  	
  Intentionally Omitted

  
	
   

  	
   

  	
  7.

  	
  Amendment to Merrill Lynch Security Agreement

  
	
   

  	
   

  	
  8.

  	
  U.S. Deposit Account Control Agreement (Wachovia)

  
	
   

  	
   

  	
  9.

  	
  U.S. Securities Account Control Agreement (Merrill Lynch)

  
	
   

  	
   

  	
  10.

  	
  UCC Filing

  
	
   

  	
   

  	
  11.

  	
  Recording of Security Interest in Patent and Trademarks with USPTO

  
	
   

  	
   

  	
  12.

  	
  UCC Search Reports, Patent/Trademark Search Reports

  
	
   

  	
   

  	
  13.

  	
  UCC Termination Statement (U.S. Bank)

  
	
   

  	
   

  	
  14.

  	
  UCC Termination Statement Diversified Capital, L.P.)

  
	
   

  	
   

  	
  15.

  	
  UCC Termination Statement (Bay City Capital Fund III)

  
	
   

  	
   

  	
  16.

  	
  Release of Grant Security Interest in IP Property.

  
	
   

  	
   

  	
  17.

  	
  Personal Property Collateral Access Agreement

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  III.

  	
  Loan Closing Documents

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  18.

  	
  RP Secretary’s Certificate

  
	
   

  	
   

  	
  19.

  	
  Certificate of Incorporation of RP

  
	
   

  	
   

  	
  20.

  	
  By-laws of RP

  
	
   

  	
   

  	
  21.

  	
  Signature & Incumbency Certificates of RP Officers

  
	
   

  	
   

  	
  22.

  	
  Board Resolutions of RP

  
	
   

  	
   

  	
  23.

  	
  RP Good Standing Certificate (Section 3.1(b)(iv)

  
	
   

  	
   

  	
  24.

  	
  RP Bring-down good standing certificate as of Closing Date

  
	
   

  	
   

  	
  25.

  	
  Certificate copy of Permitted Working Capital Facility, Security
  Agreement and all amendments

  

 

4

 

	
   

  	
   

  	
  26.

  	
  Reliant Pharmaceuticals Sub No. 1, Inc.

  
	
   

  	
   

  	
  27.

  	
  Certificate of Incorporation of RPSUB

  
	
   

  	
   

  	
  28.

  	
  By-laws of RPSUB

  
	
   

  	
   

  	
  29.

  	
  Signature & Incumbency Certificates of RPSUB Officers

  
	
   

  	
   

  	
  30.

  	
  Board of Resolutions of RPSUB

  
	
   

  	
   

  	
  31.

  	
  RPSUB Good Standing Certificate (Section 3.1(b)(iv)

  
	
   

  	
   

  	
  32.

  	
  RPSUB Bring-down Good Standing Certificate

  
	
   

  	
   

  	
  33.

  	
  Historical Financial Statements certified by RP Principal financial
  Officer

  
	
   

  	
   

  	
  34.

  	
  Projections (3.1)(l)

  
	
   

  	
   

  	
  35.

  	
  Certificate of Insurance(3.1(m)

  
	
   

  	
   

  	
  36.

  	
  Solvency Certificate (3.1(q))

  
	
   

  	
   

  	
  37.

  	
  Closing Date Certificate (3.1(r))

  
	
   

  	
   

  	
  38.

  	
  Funding Notice for Loan (2.1(b)(i))

  
	
   

  	
   

  	
  39.

  	
  Amendments to Liquidity Option Agreements

  
	
   

  	
   

  	
  40.

  	
  Assignments of Assumption Agreements

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  IV.

  	
  Opinions

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  41.

  	
  Opinion of Latham & Watkins

  
	
   

  	
   

  	
  42.

  	
  Opinion of Cleary, Gottlieb, Steen & Hamilton (Section 3.1(o))

  
	
   

  	
   

  	
   

  	
   

  

 

5

 

EXHIBIT A

 

UCC FINANCING
STATEMENTS

 

	
  Debtor

  	
   

  	
  Filing Jurisdiction

  	
   

  	
  Filing Number and Date

  	
   

  	
  Post-filing Search

  	
   

  
	
  Reliant Pharmaceuticals, Inc.

  	
   

  	
  Delaware
  Secretary of State

  	
   

  	
  42349795; 08/19/04

  	
   

  	
  Yes

  	
   

  
	
  Reliant Pharmaceuticals, Inc. (Amendment to
  Filing No. 42349795)

  	
   

  	
  Delaware
  Secretary of State

  	
   

  	
  42693648; 9/24/04

  	
   

  	
  Yes

  	
   

  
	
  RP Sub No. 1, Inc.

  	
   

  	
  Delaware Secretary
  of State

  	
   

  	
  42349803; 08/19/04

  	
   

  	
  Yes

  	
   

  

 

 

 

	
  

  	
   

  	
  Exhibit A to Credit Agreement (Assignment Agreement)

  

 

This Assignment Agreement (this “Assignment Agreement”) is entered into as
of                     
by and between the Assignor named on the signature page hereto (“Assignor”) and the Assignee named on the
signature page hereto (“Assignee”).
Reference is made to the Credit Agreement dated as of                     
(as amended or otherwise modified from time to time, the “Credit Agreement”) among RELIANT
PHARMACEUTICALS, INC., a Delaware corporation (“Borrower”), the financial institutions party thereto from time
to time, as Lenders, and Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., as Agent. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to them in the Credit
Agreement.

 

Assignor and Assignee hereby agree as follows:

 

1. Assignor hereby sells and assigns to Assignee,
and Assignee hereby purchases and assumes from Assignor the interests set forth
on the schedule attached hereto (the “Schedule”),
in and to Assignor’s rights and obligations under the Credit Agreement as of
the effective date set forth on the Schedule (the “Effective Date”). Such purchase and sale is made without
recourse, representation or warranty except as expressly set forth herein. On
the Effective Date, Assignee shall pay to Assignor an amount equal to the
aggregate amounts assigned pursuant to the Schedule (exclusive of unfunded
portions of the Revolving Loan Commitment) and Assignor shall pay to Assignee a
closing fee in respect of the transactions contemplated hereby in the amount
specified on the Schedule.

 

2. Assignor (i) represents that as of the Effective
Date, that it is the legal and beneficial owner of the interests assigned
hereunder free and clear of any adverse claim, (ii) makes no other
representation or warranty and assumes no responsibility with respect to any
statement, warranties or representations made in or in connection with the
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Credit Agreement, any other Financing
Documents or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any other Credit Party or any other
Person or the performance or observance by any Credit Party of its Obligations
under the Credit Agreement or any other Financing Documents or any other
instrument or document furnished pursuant thereto.

 

3. Assignee (i) confirms that it has received a copy
of the Credit Agreement and the other Financing Documents, together with copies
of the most recent financial statements delivered pursuant thereto and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment Agreement; (ii)
agrees that it will, independently and without reliance upon Agent, Assignor or
any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not

 

Exhibit A-1

 

taking
action under the Credit Agreement; (iii) appoints and authorizes Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Financing Documents as are delegated to Agent by the
terms thereof, together with such powers as are reasonably incidental thereto;
(iv) agrees that it will perform in accordance with their terms all obligations
which by the terms of the Credit Agreement are required to be performed by it
as a Lender; (v) represents that on the date of this Assignment Agreement it is
not presently aware of any facts that would cause it to make a claim under the
Credit Agreement; (vi) represents and warrants that Assignee is not a foreign
person (i.e., a person other than a United States person for United States
Federal income tax purposes) or, if it is a foreign person, that it has
delivered to Agent the documentation required to be delivered to Agent by
Section 13 below; and (vii) represents and warrants that it has experience and
expertise in the making or the purchasing of loans such as the Loans, and that
it has acquired the interests described herein for its own account and without
any present intention of selling all or any portion of such interests.

 

4. Each of Assignor and Assignee represents and
warrants to the other party hereto that it has full power and authority to
enter into this Assignment Agreement and to perform its obligations hereunder
in accordance with the provisions hereof, that this Assignment Agreement has
been duly authorized, executed and delivered by such party and that this
Assignment Agreement constitutes a legal, valid and binding obligation of such
party, enforceable against such party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors’ rights generally and by
general principles of equity.

 

5. Upon the effectiveness of this Assignment
Agreement pursuant to Section 13 below, (i) Agent shall register Assignee as a
Lender, pursuant to the terms of the Credit Agreement, (ii) Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder, (iii)
Assignor shall, to the extent provided in this Assignment Agreement, relinquish
its rights and be released from its obligations under the Credit Agreement and
(iv) Agent shall thereafter make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to Assignee. Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date by Agent or
with respect to the making of this assignment directly between themselves.

 

6. Each of Assignor and Assignee hereby agrees from
time to time, upon request of the other such party hereto, to take such
additional actions and to execute and deliver such additional documents and
instruments as such other party may reasonably request to effect the transactions
contemplated by, and to carry out the intent of, this Assignment Agreement.

 

7. Neither this Assignment Agreement nor any term
hereof may be changed, waived, discharged or terminated, except by an
instrument in writing signed by the party (including, if applicable, any party
required to evidence its consent to or acceptance of this Assignment Agreement)
against whom enforcement of such change, waiver, discharge or termination is
sought.

 

Exhibit A-2

 

8. For the purposes hereof and for purposes of the
Credit Agreement, the notice address of Assignee shall be as set forth on the
Schedule. Any notice or other communication herein required or permitted to be
given shall be in writing and delivered in accordance with the notice
provisions of the Credit Agreement.

 

9. In case any provision in or obligation under this
Assignment Agreement 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.

 

10. THIS ASSIGNMENT AGREEMENT 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.

 

11. This Assignment Agreement shall be binding upon,
and shall inure to the benefit of, the parties hereto and their respective
successors and assigns.

 

12. This Assignment Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures hereto were upon the same agreement.

 

13. This Assignment Agreement shall become effective
as of the Effective Date upon the satisfaction of each of the following
conditions: (i) the execution of a counterpart hereof by each of Assignor and
Assignee, (ii) the execution of a counterpart hereof by Agent and Borrower as
evidence of its consent hereto to the extent required pursuant to Section
12.6(a) of the Credit Agreement, (iii) the receipt by Agent of the
administrative fee referred to in Section 12.6(a) of the Credit Agreement, (iv)
in the event Assignee is a foreign person (i.e., a person other than a United
States person for United States Federal income tax purposes), the receipt by
Agent of Internal Revenue Service Form W-8BEN or Form W-8ECI or such other
forms, certificates or other evidence with respect to United States Federal
income tax withholding matters that are required under the Internal Revenue
Code to establish that Assignee shall be entitled to receive payments of
principal, interest and fees under the Credit Agreement free from or at a
reduced rate of withholding of United States Federal income tax properly
completed and executed by Assignee, and (v) the receipt by Agent of originals
or telecopies of the counterparts described above.

 

Exhibit A-3

 

The parties hereto have caused this Assignment
Agreement to be executed and delivered as of the date first written above.

 

	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Consented
  to:

  
	
   

  	
   

  
	
   

  	
  Merrill
  Lynch Capital, a division of Merrill 

  Lynch Business Financial Services Inc., as 

  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [RELIANT PHAMACEUTICALS, INC., a Delaware
  corporation]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  ]

  
					

 

Exhibit A-4

 

 

Schedule to Assignment
Agreement

 

	
  Assignor:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Assignee:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
   

  	
   

  

 

Credit Agreement dated as of
                    
among RELIANT PHARMACEUTICALS, INC., a Delaware corporation, as Borrower, the
financial institutions party thereto from time to time, as Lenders, and Merrill
Lynch Capital, a division of Merrill Lynch Business Financial Services Inc., as
Agent

 

Interests
Assigned:

 

	
  Commitment/Loan

  	
   

  	
  Revolving Loan Commitment

  	
   

  
	
  Assignor Amounts

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Amounts Assigned

  	
   

  	
  $

  	
   

  
	
  Assignor Amounts 

  (post-assignment)

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Closing Fee:

  	
   

  	
  $

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Assignee Information:

  	
   

  	
   

  	
   

  

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Address
  for Notices:

  	
   

  	
  Address
  for Payments:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Bank:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
   

  	
  ABA
  #:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Telephone:

  	
   

  	
   

  	
  Account #:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
   

  	
  Reference:

  	
   

  
						

 

Exhibit A-5

 

	
  

  	
   

  	
  Exhibit B to Credit
  Agreement (Notice of Borrowing)

  

 

NOTICE OF
BORROWING

 

RELIANT
PHARMACEUTICALS, INC.

 

Date:                  ,
          

 

This certificate is given by                        ,
a Responsible Officer of RELIANT PHARMACEUTICALS, INC., a Delaware corporation
(“Borrower”), pursuant to Section
[2.2(b)/2.3(e)] of that certain
Credit Agreement dated as of                         ,
            
among Borrower, the Lenders from time to time party thereto and Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as 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 Agent of Borrower’s request to, on [ date ], borrow $[                    ]
of Revolving Loans;

 

The undersigned officer hereby certifies that, both
before and after giving effect to the request above (i) each of the conditions
precedent set forth in Section 8.2(b), 8.2(c) and 8.2(d) have been satisfied,
(ii) all of the representations and warranties contained in the Credit Agreement
and the other Financing Documents are true, correct and complete in all
material respects as of the date hereof, and (iii) 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

  	
   

  	
  of Borrower

  

 

Exhibit B-1

 

	
  

  	
   

  	
  Exhibit C to Credit
  Agreement (Compliance Certificate)

  

 

COMPLIANCE
CERTIFICATE

 

RELIANT
PHARMACEUTICALS, INC.

 

Date:                     ,
        

 

This certificate is given by                         ,
a Responsible Officer of RELIANT PHARMACEUTICALS, INC., a Delaware corporation
(“Borrower”), pursuant to Section
4.1(c) of that certain Credit Agreement dated as of                   ,           
among Borrower, Lenders from time to time party thereto and Merrill Lynch
Capital, a division of Merrill Lynch Business Financial Services Inc., as 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 certifies
to Agent and Lenders that:

 

(a) the financial statements delivered with this
certificate in accordance with Section 4.1(a) and/or 4.1(b) of the Credit
Agreement fairly present in all material respects the results of operations and
financial condition of Borrower and the Subsidiaries as of the dates of 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 Borrower and the
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 Borrower has taken, is undertaking and
proposes to take with respect thereto; and

 

(d) Borrower is in compliance with the covenant(s)
contained in Article 7 of the Credit Agreement, as demonstrated by the
calculation of such covenants below, except as follows:                                         .

 

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

 

Exhibit C-1

 

	
   

  	
  By

  	
   

  
	
   

  	
  Name

  	
   

  
	
   

  	
  Title

  	
   

  	
  of Borrower

  

 

Exhibit C-2

 

	
  

  	
   

  	
  Exhibit D to Credit Agreement (Borrowing Base Certificate)

  

 

	
  Merrill
  Lynch Capital

  Accounts Receivable Borrowing Base Report

  	
  Merrill
  Lynch Capital

  
	
  BBR Date:

  	
  August 19, 2004

  	
  Report
  #:   

  	
   

  	
  July
  31, 2004

  
	
  Name:

  	
  Reliant Pharmaceuticals, Inc.

  	
   

  	
  Customer#   

  	
   

  

 

	
   

  	
   

  	
  TRADE

  	
   

  	
  LESCOL

  	
   

  	
  TOTALS

  	
   

  
	
   

  	
  A/R Category

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Billed Accounts Balance per aging dated
  07/31/04

  	
   

  	
  $

  	
  13,073,586

  	
   

  	
  $

  	
  14,756,525

  	
   

  	
  $

  	
  27,830,109

  	
   

  
	
  2.

  	
  (Loss): Intelligible (from next page)

  	
   

  	
  $

  	
  (2,912,954

  	
  ) 

  	
  $

  	
  6,109,048

  	
   

  	
  $

  	
  (9,021,642

  	
  )

  
	
  3.

  	
  Eligible Accounts

  	
   

  	
  $

  	
  10,160,992

  	
   

  	
  $

  	
  8,647,475

  	
   

  	
  $

  	
  18,808,461

  	
   

  
	
  4.

  	
  Liquidity Factor

  	
   

  	
  90.00

  	
  %

  	
  100.00

  	
  %

  	
  94.60

  	
  %

  
	
  5.

  	
  Total Eligible Accounts

  	
   

  	
  $

  	
  9,144,893

  	
   

  	
  $

  	
  8,647,475

  	
   

  	
  $

  	
  17,792,368

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Computation
  of Availability

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Total Eligible Accounts:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  17,792,368

  	
   

  
	
  7a.

  	
  (Less): Cash Posted Since Last Aging

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  7b.

  	
  Plus: Revenue Posted Since Last Aging

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  8.

  	
  Plus / (Minus): Adjustments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  9.

  	
  Net Eligible Accounts

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  17,792,368

  	
   

  
	
  10.

  	
  Advance Rate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  85

  	
  %

  
	
  11.

  	
  Net Availability

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15,123,513

  	
   

  
	
  12.

  	
  Less: Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  13.

  	
  Net Availability

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15,123,513

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Computation
  of Loan

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Facility Limit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  25,000,000

  	
   

  
	
  15.

  	
  Available to Borrower (not to exceed limit)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15,123,513

  	
   

  
	
  16.

  	
  Loan Balance on Prior Borrowing Base
  Certificate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  17.

  	
  (Less): Cash Collections since last
  Borrowing Base Certificate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  18.

  	
  Increase / (Decrease): Adjustments

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  19.

  	
  Loan Advances

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  20.

  	
  Ending Loan Balance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Letter of Credit Outstandings

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
  22.

  	
  Overall Reserve

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  Remaining Availability (Line 15-20 -
  21-22)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
  15,123,513

  	
   

  

 

Exhibit D-1

 

 

Pursuant to, and in accordance with, the
interest and provisions of the Loan Documents (“Documents”), between MERRILL
LYNCH CAPITAL, A DIVISION OF MERRILL LYNCH BUSINESS FINANCIAL SERVICES, INC.
(“Secured Party”) and Reliant Pharmaceuticals, Inc. (“Borrower”), Borrower is
executing and delivering to Secured Party this Borrowing Base Report accompanied
by supporting data (collectively referred to as “Report”).  Borrower warrants and represents to Secured
Party that this Report is true, correct, and based on information contained in
Borrower’s own financial accounting records.

Borrower, by the execution of this Report:

(a) 
Hereby ratifies, confirms, and affirms all of the terms, and further certifies
that the Borrower is in compliance with the Loan Documents as of August 19,
2004;

(b) 
Hereby certifies that the Borrower has paid all State and Federal
payroll withholding taxes immediately due and payable through August 19, 2004.

This document does not supercede any
provisions of the Loan and Security Agreement. 
Capitalized Terms used herein and not otherwise defined shall have the
meaning ascribed to them in the Loan and Security Agreement between Secured Party
and Borrower dated August 19, 2004.

 

	
   

  	
   

  
	
   

  	
  A. Steven

  
	
   

  	
  Vice President, Finance

  
	
   

  	
  August 19, 2004

  

 

 

Accounts Receivable Ineligibles

 

	
  Variable

  	
   

  	
  A/R Ineligible Category

  	
   

  	
  $ Amount

  TRADE

  	
   

  	
  $ Amount

  LESCOL

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Billed Accounts Receivable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Current

  	
   

  	
  $

  	
  12,156,028

  	
   

  	
  $

  	
  14,756,523

  	
   

  	
  $

  	
  26,912,551

  	
   

  
	
   

  	
  1 -30 Days

  	
   

  	
  $

  	
  1,261,530

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  1,261,530

  	
   

  
	
   

  	
  31 -60 Days

  	
   

  	
  $

  	
  128,669

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  128,669

  	
   

  
	
   

  	
  61 -90 Days

  	
   

  	
  $

  	
  53,128

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  53,128

  	
   

  
	
   

  	
  91 + Days

  	
   

  	
  $

  	
  (525,769

  	
  ) 

  	
  $

  	
  —

  	
   

  	
  $

  	
  (525,769

  	
  ) 

  
	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Subtotal Aged Accounts Receivable

  	
   

  	
  $

  	
  13,073,586

  	
   

  	
  $

  	
  14,756,523

  	
   

  	
  $

  	
  27,830,109

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less: Ineligible Accounts Receivable

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  60

  	
  Over 60 days past the Due Date

  	
   

  	
  $

  	
  (472,641

  	
  ) 

  	
  $

  	
  —

  	
   

  	
  $

  	
  (472,641

  	
  ) 

  
	
   

  	
  Private/Self
  Pay

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  60

  	
  Credits over 60 days

  	
   

  	
  $

  	
  1,291,155

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  1,291,155

  	
   

  
	
   

  	
  Debit memos < 60 days

  	
   

  	
  $

  	
  390,148

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  390,148

  	
   

  
	
   

  	
  Contras – Trade other

  	
   

  	
  $

  	
  518,606

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  518,606

  	
   

  
	
   

  	
  Contras – Trade McKesson

  	
   

  	
  $

  	
  924,429

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  924,429

  	
   

  
	
   

  	
  Contras – Trade Cardinal

  	
   

  	
  $

  	
  185,882

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  185,882

  	
   

  
	
   

  	
  Contras – Trade AmeriSource

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
  Contras – Novartis A/P

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  5,036,307

  	
   

  	
  $

  	
  5,036,307

  	
   

  
	
   

  	
  Novartis VA contract payback

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  1,072,741

  	
   

  	
  $

  	
  1,072,741

  	
   

  
	
  20

  	
  Cross Age, 20% rule

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
  Puerto Rico AVR < 60 days

  	
   

  	
  $

  	
  75,015.00

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  75,015

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
   

  	
   

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  	
  $

  	
  —

  	
   

  
	
  Total Ineligible Accounts Receivable

  	
   

  	
  $

  	
  2,912,594

  	
   

  	
  $

  	
  6,109,048

  	
   

  	
  $

  	
  9,021,642

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Eligible Accounts Receivable

  	
   

  	
  $

  	
  10,160,992

  	
   

  	
  $

  	
  8,647,475

  	
   

  	
  $

  	
  18,808,467

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00129-of-00352.parquet"}]]