Document:

Exhibit 10.13

 

EXECUTION COPY

 

PLEDGE AND
SECURITY AGREEMENT

 

 

dated as of
December 6, 2006

 

 

among

 

TALECRIS
BIOTHERAPEUTICS HOLDINGS CORP.

 

TALECRIS
BIOTHERAPEUTICS, INC.

 

PRECISION
PHARMA SERVICES, INC.

 

TALECRIS
PLASMA RESOURCES, INC.

as Grantors,

 

the other Grantors party hereto,

 

and

 

MORGAN
STANLEY SENIOR FUNDING, INC.

as
Administrative Agent

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1

  	
  DEFINITIONS

  	
  1

  
	
  1.1

  	
  General Definitions

  	
  1

  
	
  1.2

  	
  Definitions; Interpretation

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 2

  	
  GRANT OF SECURITY

  	
  12

  
	
  2.1

  	
  Grant of Security

  	
  12

  
	
  2.2

  	
  Excluded Collateral

  	
  12

  
	
   

  	
   

  	
   

  
	
  SECTION 3

  	
  SECURITY FOR OBLIGATIONS

  	
  13

  
	
  3.1

  	
  Security for Obligations

  	
  13

  
	
  3.2

  	
  Continuing Liability under Collateral

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 4

  	
  REPRESENTATIONS AND WARRANTIES AND COVENANTS

  	
  13

  
	
  4.1

  	
  Generally

  	
  13

  
	
  4.2

  	
  Equipment and Inventory

  	
  15

  
	
  4.3

  	
  Receivables Contracts

  	
  17

  
	
  4.4

  	
  Investment Related Property

  	
  19

  
	
  4.5

  	
  Material Contracts

  	
  25

  
	
  4.6

  	
  Letter of Credit Rights

  	
  26

  
	
  4.7

  	
  Intellectual Property

  	
  26

  
	
  4.8

  	
  Commercial Tort Claims

  	
  29

  
	
   

  	
   

  	
   

  
	
  SECTION 5

  	
  FURTHER ASSURANCES; ADDITIONAL GRANTORS

  	
  29

  
	
  5.1

  	
  Further Assurances

  	
  29

  
	
  5.2

  	
  Additional Grantors

  	
  30

  
	
   

  	
   

  	
   

  
	
  SECTION 6

  	
  ADMINISTRATIVE AGENT APPOINTED ATTORNEY-IN-FACT

  	
  30

  
	
  6.1

  	
  Power of Attorney

  	
  30

  
	
   

  	
   

  	
   

  
	
  SECTION 7

  	
  REMEDIES

  	
  32

  
	
  7.1

  	
  Generally

  	
  32

  
	
  7.2

  	
  Application of Proceeds

  	
  33

  
	
  7.3

  	
  Sales on Credit

  	
  34

  
	
  7.4

  	
  Investment Related Property

  	
  34

  
	
  7.5

  	
  Intellectual Property, etc

  	
  34

  
	
   

  	
   

  	
   

  
	
  SECTION 8

  	
  ADMINISTRATIVE AGENT

  	
  36

  
	
   

  	
   

  	
   

  
	
  SECTION 9

  	
  CONTINUING SECURITY INTEREST; TRANSFER OF SECURED
  OBLIGATIONS

  	
  37

  
	
   

  	
   

  	
   

  
	
  SECTION 10

  	
  STANDARD OF CARE; ADMINISTRATIVE AGENT MAY PERFORM

  	
  37

  
	
   

  	
   

  	
   

  
	
  SECTION 11

  	
  INDEMNITY AND EXPENSES

  	
  38

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 12

  	
  MISCELLANEOUS

  	
  38

  
	
  12.1

  	
  Notices

  	
  38

  
	
  12.2

  	
  Expenses

  	
  38

  
	
  12.3

  	
  Amendments and Waivers

  	
  38

  
	
  12.4

  	
  Successors and Assigns

  	
  38

  
	
  12.5

  	
  Survival of Representations, Warranties and
  Agreements

  	
  39

  
	
  12.6

  	
  Marshaling; Payments Set Aside

  	
  39

  
	
  12.7

  	
  Severability

  	
  39

  
	
  12.8

  	
  Headings

  	
  39

  
	
  12.9

  	
  GOVERNING LAW

  	
  39

  
	
  12.10

  	
  CONSENT TO JURISDICTION

  	
  39

  
	
  12.11

  	
  WAIVER OF JURY TRIAL

  	
  40

  
	
  12.12

  	
  Counterparts

  	
  40

  
	
  12.13

  	
  Effectiveness

  	
  40

  
	
  12.14

  	
  Entire Agreement

  	
  40

  
	
  12.15

  	
  Certain Grantors Not Parties

  	
  40

  
	
  12.16

  	
  Intercreditor Agreement

  	
  40

  
	
  12.17

  	
  Parallel Debt

  	
  41

  

 

iii

 

	
  SCHEDULE I – GENERAL
  INFORMATION

  
	
   

  
	
  SCHEDULE II – COLLATERAL LOCATIONS

  
	
   

  
	
  SCHEDULE III – INVESTMENT
  RELATED PROPERTY

  
	
   

  
	
  SCHEDULE IV – MATERIAL
  CONTRACTS

  
	
   

  
	
  SCHEDULE V – LETTERS OF
  CREDIT

  
	
   

  
	
  SCHEDULE VI – INTELLECTUAL
  PROPERTY

  
	
   

  
	
  SCHEDULE VII – COMMERCIAL
  TORT CLAIMS

  
	
   

  
	
  Annex I – Pledge
  Supplement

  
	
   

  
	
  Annex II – New Grantor
  Pledge Supplement

  
	
   

  
	
  Annex III – Patent
  Security Agreement

  
	
   

  
	
  Annex IV – Trademark
  Security Agreement

  
	
   

  
	
  Annex V – Copyright
  Security Agreement

  
	
   

  
	
  Annex VI – Collateral
  Access Agreement

  
	
   

  
	
  Annex VII – Bailee
  Agreement

  

 

iv

 

THE EXERCISE BY THE ADMINISTRATIVE AGENT OR ANY LENDER HEREUNDER OF ITS
RIGHTS HEREUNDER IS SUBJECT TO THE TERMS, CONDITIONS AND RESTRICTIONS IN THE
INTERCREDITOR AGREEMENT REFERRED TO IN SECTION 12.16 BELOW.

 

This PLEDGE AND SECURITY AGREEMENT, dated as of
December 6, 2006 (this “Security Agreement”),
among TALECRIS BIOTHERAPEUTICS HOLDINGS CORP., a Delaware corporation, TALECRIS
BIOTHERAPEUTICS, INC., a Delaware corporation, PRECISION PHARMA SERVICES, INC.,
a Delaware corporation and TALECRIS PLASMA RESOURCES, INC., a Delaware
corporation, as Grantors, and the other Grantors from time to time party to
this Security Agreement, in favor of MORGAN STANLEY SENIOR FUNDING, INC. (“Morgan Stanley”) as the administrative agent for each of the
Secured Parties (together with its successor(s) in such capacity, the “Administrative Agent”) (terms used in the preamble and the
recitals to this Security Agreement that are not otherwise defined have the
meanings set forth below or incorporated by reference, as provided below).

 

RECITALS:

 

WHEREAS reference is made to that certain
First Lien Term Loan Credit Agreement, dated as of the date hereof (as it may
be amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among
the Borrowers, the Lenders and the Administrative Agent;

 

WHEREAS each Grantor
will realize substantial direct and indirect benefits as a result of the
transactions contemplated by the Credit Agreement;

 

WHEREAS subject to
the terms and conditions of the Credit Agreement, certain Grantors may enter
into one or more Swap Agreements with one or more Lenders or Affiliates of the
Lenders;

 

WHEREAS in
consideration of the extensions of credit and other accommodations of the
Lenders and the Administrative Agent (and their respective Affiliates) pursuant
to the Credit Agreement and the Swap Agreements, respectively, each  Grantor has agreed to grant a security
interest in (subject to the limitations set forth herein) substantially all of
such Grantor’s assets to secure all Obligations and all Guaranteed Obligations
(the “Secured Obligations”) as
more specifically set forth herein; and

 

WHEREAS each security interest granted herein
in respect to the Secured Obligations is subject to the terms, conditions and
restrictions in the Intercreditor Agreement, dated as the date hereof (as it
may be amended restated, supplemented or otherwise modified from time to time,
the “Intercreditor Agreement”), by and among Morgan Stanley, for itself and in
its capacity as agent for the Lenders and as agent for the Second Lien Term
Lenders, and Wachovia Bank, National Association, for itself and in its
capacity as agent for the Revolving Lenders.

 

NOW, THEREFORE, in consideration of the premises
and the agreements, provisions and covenants herein contained, each  Grantor party hereto and the
Administrative Agent agree as follows:

 

SECTION 1          DEFINITIONS

 

1.1          General Definitions. In this Security Agreement, the
following terms (whether or not bolded) shall have the following meanings (such
definitions to be equally applicable to the singular and plural forms thereof):

 

 

“Account
Debtor” means each Person who is obligated on a
Receivables Contract or any Supporting Obligation related thereto.

 

“Accounts” means all
“accounts” as defined in Article 9 of the UCC,
including Health-Care-Insurance Receivables.

 

“Additional Grantors” shall
have the meaning set forth in Section 5.2.

 

“Administrative
Agent” shall have the meaning set forth in the
preamble.

 

“Authenticate” means
“authenticate” as defined in Article 9 of the UCC.

 

“Authorized Officer” means, with respect to
any Person, any of the principal executive officers, managing members or
general partners of such Person but, in any event, with respect to financial
matters, a Financial Officer.

 

“Bailee Agreement” means
a Bailee Agreement substantially in the form of Annex VII or otherwise
reasonably acceptable to the Administrative Agent.

 

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

 

“Bonus Plan” means the Talecris
Biotherapeutics Holdings Corp. Special Recognition Bonus Plan effective as of
October 1, 2006.

 

“Borrowers” means Talecris Biotherapeutics Holdings
Corp., a Delaware corporation, Talecris Biotherapeutics, Inc., a Delaware
corporation, Precision Pharma Services, Inc., a Delaware corporation, Talecris
Plasma Resources, Inc., a Delaware corporation and each other direct or
indirect subsidiary of any such Person that is or becomes a Borrower from time
to time pursuant to the terms in the Credit Agreement, and their respective
successors.

 

“Cash Proceeds” means
all proceeds of any Collateral consisting of cash, checks and other near-cash
items.

 

“Chattel Paper” means
all “chattel paper” as defined in Article 9 of the UCC, including, without
limitation, “electronic chattel paper” or “tangible chattel paper”, as each
term is defined in the UCC.

 

“Collateral”
shall have the meaning set forth in Section 2.1.

 

“Collateral Access Agreement”
means a Collateral Access Agreement substantially in the form of Annex VI
or otherwise reasonably acceptable to the Administrative Agent.

 

“Collateral
Accounts” shall have the meaning set forth in Section
4.4.4.

 

 “Collateral
Documents” means,
collectively, this Security Agreement, the Mortgages and any other documents
granting a Lien upon the Collateral as security for payment of the Obligations.

 

“Collateral Records” means
books, records, ledger cards, files, correspondence, customer lists,
blueprints, technical specifications, manuals, computer software, computer
printouts, tapes, disks and other electronic storage media and related data
processing software and similar items that 

 

2

 

at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof or
realization thereupon.

 

“Collateral Support” means
all property (real or personal) assigned, hypothecated or otherwise securing
any Collateral and shall include any security agreement or other agreement
granting a lien or security interest in such real or personal property;
provided, that, such term shall not include the voting Equity Interests of any
Foreign Subsidiary in excess of sixty-five percent (65%) of the issued and
outstanding Equity Interests of such Foreign Subsidiary entitled to vote
(representing not greater than sixty-five percent (65%) of the total combined
voting power of all classes of Equity Interests entitled to vote) (within the
meaning of Treas. Reg. Section 1.956-2(c)(2) or any successor or similar
statute).

 

“Collection Account” shall have the meaning set forth in Section
4.4.4.

 

“Commercial Tort Claims” means
all “commercial tort claims” as defined in the UCC, including, without
limitation, all commercial tort claims listed and described with specification
on Schedule VII (as such schedule may be amended or supplemented from
time to time).

 

“Commodities Accounts” (i)
means all “commodity accounts” as defined in Article 9 of the UCC and (ii)
shall include, without limitation, all of the accounts listed on Schedule
III under the heading “Commodities Accounts” (as such schedule may be
amended or supplemented from time to time).

 

“Copyright Licenses” means
any and all agreements granting any right in, to or under Copyrights (whether
such Grantor is licensee or licensor thereunder) including, without limitation,
each agreement referred to in Schedule VI (as such schedule may be
amended or supplemented from time to time).

 

“Copyrights” means
all United States, state and foreign copyrights, including but not limited to
copyrights in software and databases, and all Mask Works (as defined under 17
U.S.C. 901 of the U.S. Copyright Act), whether registered or unregistered, now
or hereafter in force, and, with respect to any and all of the foregoing: (i)
all registrations and applications therefor including, without limitation, the
applications referred to in Schedule VI (as such schedule may be amended
or supplemented from time to time), (ii) all extensions and renewals thereof,
(iii) all rights corresponding thereto throughout the world, (iv) all rights to
sue for past, present and future infringements thereof, (v) all licenses,
claims, damages and proceeds of suit arising therefrom, and (vi) all payments and
royalties and rights to payments and royalties arising out of the sale, lease,
license, assignment, or other disposition thereof.

 

“Copyright Security Agreement”
means the agreement substantially in the form of Annex V.

 

“Credit
Agreement” shall have the meaning set forth in the
recitals.

 

“Deposit Accounts” (i)
means all “deposit accounts” as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all of the accounts listed on Schedule III
under the heading “Deposit Accounts” (as such schedule may be amended or
supplemented from time to time).

 

“Documents” means
all “documents” as defined in Article 9 of the UCC.

 

“Documents Evidencing Goods”
means all Documents evidencing, representing or issued in connection with
Goods.

 

3

 

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

 

 “Effective Date” means the date on which the conditions
specified in Section 4.01 of the Credit Agreement are satisfied (or waived
in accordance with Section 9.02 of the Credit Agreement).

 

“Equipment” means:  (i) all “equipment” as defined in the UCC,
(ii) all machinery, manufacturing equipment, data processing equipment,
computers, office equipment, furnishings, furniture, appliances, and tools (in
each case, regardless of whether characterized as equipment under the UCC),
(iii) all Fixtures and (iv) all accessions or additions thereto, all parts
thereof, whether or not at any time of determination incorporated or installed
therein or attached thereto, and all replacements therefor, wherever located,
now or hereafter existing.

 

“Equity Interests” means shares of capital
stock (whether preferred or common), partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or
other equity ownership interests in a Person, and any warrants, options or
other rights entitling the holder thereof to purchase or acquire any such
equity interest.

 

“Excluded Cash Accounts” means €1,500,000 of
the Loan Parties’ Collections at  any one time
in accounts located in Germany and (ii) $3,700,000 of amounts collected on
behalf of Hema-Quebec.

 

“Financial Officer” means the chief financial
officer, principal accounting officer, treasurer, vice president – finance, or
controller of the applicable Person.

 

“Fixtures” means all “fixtures” as defined in
Article 9 of the UCC.

 

“Foreign Subsidiary” means any Subsidiary of a
Borrower that is organized under the laws of a jurisdiction other than the
United States, a State thereof or the District of Columbia.

 

 “GAAP” means generally accepted accounting principles in the
United States.

 

“General Intangibles” (i) means all “general intangibles”
as defined in Article 9 of the UCC, including
“payment intangibles” also as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all interest rate or currency protection or
hedging arrangements, all tax refunds and all licenses, permits, concessions
and authorizations, (in each case, regardless of whether characterized as
general intangibles under the UCC).

 

“Goods” (i) means
all “goods” as defined in Article 9 of the UCC and (ii) shall include, without
limitation, all Inventory, Equipment, Documents Evidencing Goods and Software Embedded
In Goods.

 

“Governmental Authority” means the government
of the United States, any other nation or any political subdivision thereof,
whether state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.

 

 “Guaranteed
Obligations” means, collectively, the “Guaranteed
Obligations” as defined in any Guarantee made by any Person guaranteeing
payment and performance of the Obligations.

 

“Grantor”
means the Borrowers, any Subsidiary Guarantor or any
Additional Grantors.

 

4

 

 “Health-Care-Insurance
Receivable” means “health-care-insurance receivable”
as defined in Article 9 of the UCC.

 

 “Instruments”
means all “instruments” as defined in Article 9 of the
UCC.

 

“Insurance” means:  (i) all insurance policies covering any or
all of the Collateral (regardless of whether the Administrative Agent is the
loss payee thereof)  and (ii) any
key man life insurance policies.

 

 “Intellectual
Property” means, collectively, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses.

 

“Intellectual Property Licenses” means,
collectively, the Copyright Licenses, Patent Licenses, Trademark Licenses, and
Trade Secret Licenses.

 

“Inventory” means:  (i) all “inventory” as defined in Article 9
of the UCC and (ii) all goods held for sale or lease or to be furnished under
contracts of service or so leased or furnished, all raw materials, work in
process, finished goods, and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing or production of
such inventory or otherwise used or consumed in any  Grantor’s business; all goods in which any Grantor has an
interest in mass or a joint or other interest or right of any kind; and all
goods which are returned to or repossessed by any Grantor, and all accessions
thereto and products thereof (in each case, regardless of whether characterized
as inventory in Article 9 of the UCC).

 

“Investment Accounts”
means the Collateral Accounts, Securities Accounts, Commodities Accounts and
Deposit Accounts.

 

“Investment Related Property” means:  (a) all “investment property” (as such term
is defined in Article 9 of the UCC) and (b) all of the following (regardless of
whether classified as investment property under the UCC): all (i) Pledged
Equity Interests, (ii) Pledged Debt, (iii) the Investment Accounts and (iv)
Certificates of Deposit.

 

“Lender” means a lender having a commitment or credit
exposure under the Credit Agreement.

 

“Letter of Credit” means
any letter of credit issued pursuant to this Security Agreement.

 

“Letter of Credit Right” means
“letter-of-credit right” as defined in Article 9 of the UCC.

 

 “Lien” means with
respect to any asset, (i) any mortgage, deed of trust, lien, pledge,
hypothecation, collateral assignment, encumbrance, charge or security interest
in, on or of such asset, and (ii) the interest of a vendor or a lessor under
any conditional sale agreement, capital lease or title retention agreement (or
any financing arrangement having substantially the same economic effect as any
of the foregoing) relating to such asset.

 

“Loan
Documents” means the Credit Agreement and all other “Loan
Documents”, as defined in the Credit Agreement.

 

“Loan
Parties” means each Borrower and each Subsidiary
Guarantor.

 

5

 

“Lock
Box Agreement” shall have the meaning set forth in Section
4.4.4.

 

“Lock
Boxes” shall have the meaning set forth in Section
4.4.4.

 

“Material Contract”
means any contract or other arrangement to which any Grantor is a party for
which breach, nonperformance, cancellation or failure to renew would have a
Material Adverse Effect.

 

“Money”
means “money” as defined in Article 1 of the UCC.

 

“Morgan Stanley” shall have the meaning set forth in the preamble.

 

“Mortgages” means any mortgage, charge, deed of trust,
leasehold mortgage, leasehold deed of trust, debenture or other agreement which
conveys or evidences a Lien in favor of the Administrative Agent, for the
benefit of the Administrative Agent and the Secured Parties, on the right,
title and interest of a Loan Party in and to real property owned or leased by
such Loan Party.

 

“Non-Assignable Contract”
means any agreement, contract or license to which any Grantor is a party that
by its terms purport to restrict or prevent or penalize the assignment or
granting of a security interest therein (either by its terms or by any federal
or state statutory prohibition or otherwise irrespective of whether such
prohibition or restriction is enforceable under Section 9-406 through 409 of
the UCC).

 

“Non-payment Contract”
means any contract or agreement to which any Grantor is a party other than any
contract where the account debtor’s principal obligation is a monetary
obligation; provided, that, Non-payment Contracts shall not include any
Receivables Contracts.

 

“Obligation” means “Obligation” as defined in
the Credit Agreement.

 

“Original
Obligations”
shall have the meaning set forth in Section 12.17(a).

 

“Parallel
Debt Security” shall have the meaning set forth in Section
12.17.

 

“Parallel
Obligations” shall have the
meaning set forth in Section 12.17(a).

 

“Parent” means Talecris Biotherapeutics
Holdings Corp., a Delaware corporation.

 

“Patent Licenses” means
all agreements granting any right in, to, or under Patents (whether such
Grantor is licensee or licensor thereunder) including without limitation, each
agreement referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time).

 

“Patents” means all
United States and foreign patents and certificates of invention, or similar
industrial property rights, now or hereafter in force, including, but not
limited to each patent referred to in Schedule VI (as such schedule may
be amended or supplemented from time to time), and with respect to any and all
of the foregoing, (i) all applications therefore including, without
limitations, the patent applications referred to in Schedule VI (as such
schedule may be amended or supplemented from time to time), (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations thereof, (ii) all rights corresponding thereto throughout the
world, (ii) all inventions and improvements described therein, (iv) all rights
to sue for past, present and future infringements thereof, (v) all licenses,
claims, damages, and proceeds of suit arising therefrom, and (v) all payments and

 

6

 

royalties and rights to payments and royalties arising out of the sale,
lease, license, assignment, or other disposition thereof.

 

“Patent Security Agreement”
means the agreement substantially in the form of Annex III.

 

“Payment
Intangible” means
“payment intangible” as defined in Article 9 of the UCC.

 

 “Person” means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity of whatever nature.

 

“Pledged Alternative Equity Interests”
means all participation or other interests (subject to Section 2.2) in
any equity or profits of any business entity and the certificates, if any,
representing such interests, all dividends, distributions, cash, warrants,
rights, options, instruments, securities and other property or proceeds from
time to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such interests and any other warrant, right or
option to acquire any of the foregoing; provided, that, Pledged Alternative
Equity Interests shall not include any Pledged Stock, Pledged Partnership
Interests, Pledged LLC Interests and Pledged Trust Interests.

 

“Pledged Debt” means
all indebtedness for borrowed money owed to such Grantor, whether or not
evidenced by any instrument or promissory note, including, without limitation,
all indebtedness described on Schedule III under the heading “Pledged
Debt” (as such schedule may be amended or supplemented from time to time), all
monetary obligations owing to any Grantor from any other Grantor, the
instruments evidencing any of the foregoing, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing.

 

“Pledged Equity Interests” means
all Pledged Stock, Pledged LLC Interests, Pledged Partnership Interests,
Pledged Trust Interests and Pledged Alternative Equity Interests.

 

“Pledged LLC Interests” means
all interests (subject to Section 2.2) in any limited liability company
including, without limitation, all limited liability company interests listed
on Schedule III under the heading “Pledged LLC Interests” (as such
schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such limited liability company interests and
any interest of such Grantor on the books and records of such limited liability
company or on the books and records of any securities intermediary pertaining
to such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such limited liability company interests and any other
warrant, right or option to acquire any of the foregoing.

 

“Pledged Partnership Interests” means
all interests (subject to Section 2.2) in any general partnership,
limited partnership, limited liability partnership or other partnership
including, without limitation, all partnership interests listed on Schedule
III under the heading “Pledged Partnership Interests” (as such schedule may
be amended or supplemented from time to time) and the certificates, if any,
representing such partnership interests and any interest of such Grantor on the
books and records of such partnership or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such partnership
interests and any other warrant, right or option to acquire any of the
foregoing.

 

7

 

“Pledged Stock” means
all shares of capital stock owned by such Grantor (subject to Section 2.2),
including, without limitation, all shares of capital stock described on Schedule III
under the heading “Pledged Stock” (as such schedule may be amended or
supplemented from time to time), and the certificates, if any, representing
such shares and any interest of such Grantor in the entries on the books of the
issuer of such shares or on the books of any securities intermediary pertaining
to such shares, and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares and any other warrant, right or option to acquire
any of the foregoing.

 

“Pledged Trust Interests” means
all interests (subject to Section 2.2) in a Delaware business trust or
other trust including, without limitation, all trust interests listed on Schedule
III under the heading “Pledged Trust Interests” (as such schedule may be
amended or supplemented from time to time) and the certificates, if any,
representing such trust interests and any interest of such Grantor on the books
and records of such trust or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such trust interests and any other
warrant, right or option to acquire any of the foregoing.

 

“Proceeds” means (i)
all “proceeds” as defined in Article 9 of the UCC, (ii)  all payments or distributions made with
respect to any Investment Related Property and (iii) whatever is receivable or
received when Collateral or proceeds are sold, leased, licensed, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary.

 

“Receivables Contracts” means
all (i) Accounts, (ii) Chattel Paper, (iii) Payment Intangibles, (iv)
Instruments and (v) to the extent not otherwise covered above, all other rights
to payment, whether or not earned by performance, for goods or other property
sold, leased, licensed, assigned or otherwise disposed of, or services rendered
or to be rendered, regardless of how classified under the UCC together with all
of Grantors’ rights, if any, in any goods or other property giving rise to such
right to payment and all Collateral Support and Supporting Obligations related
thereto and all Receivables Records; provided, that, Receivables Contracts
shall not include any Investment Related Property.

 

“Receivables Records” means
(i) all original copies of all documents, instruments or other writings or
electronic records or other Records evidencing the Receivables Contracts, (ii)
all books, correspondence, credit or other files, Records, ledger sheets or
cards, invoices, and other papers relating to Receivables Contracts, including,
without limitation, all tapes, cards, computer tapes, computer discs, computer
runs, record keeping systems and other papers and documents relating to the
Receivables Contracts, whether in the possession or under the control of
Grantor or any computer bureau or agent from time to time acting for Grantor or
otherwise, (iii) all evidences of the filing of financing statements and the
registration of other instruments in connection therewith, and amendments,
supplements or other modifications thereto, notices to other creditors or
agents thereof, and certificates, acknowledgments, or other writings,
including, without limitation, lien search reports, from filing or other
registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or non-written forms of information
related in any way to the foregoing or any Receivables Contracts.

 

“Record” means “record” as defined in
Article 9 of the UCC.

 

“Representation Date” means
each of (i) the date hereof, (ii) each date on which a Loan is made and (iii)
each date on which any Letter of Credit is issued, renewed or extended.

 

8

 

“Revolving Obligation” means “Obligation” as defined in the
Revolving Credit Agreement.

 

“Revolving Credit Agreement” means the Revolving Credit Agreement, dated
as of the date hereof, among the Borrowers and the lenders party thereto.

 

“Revolving Lenders” means a lender having a commitment or credit
exposure under the Revolving Credit Agreement.

 

 “Second
Lien Obligation” means “Obligation” as defined in the Second Lien Term Loan Credit
Agreement.

 

“Second Lien Term Loan Credit Agreement” means the Second Lien Term Loan Credit
Agreement, dated as of the date hereof, among the Borrowers and the lenders party
thereto.

 

“Second Lien Term Lenders” means a lender having a commitment or credit
exposure under the Second Lien Term Loan Credit Agreement.

 

“Secured
Obligations” shall have the meaning set forth in the
recitals.

 

“Secured Parties”
means, collectively, (i) the Administrative Agent, (ii) the Lenders, and
(iii) any Lender or Affiliate of a Lender which is (or at the time such
Swap Agreement was entered into, was) a counterparty to any Swap Obligation
with any Borrower.

 

“Securities” means
any stock, shares, partnership interests, voting trust certificates,
certificates of interest or participation in any profit-sharing agreement or
arrangement, options, warrants, bonds, debentures, notes, or other 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 Accounts” (i)
means all “securities accounts” as defined in Article 8 of the UCC and (ii)
shall include, without limitation, all of the accounts listed on Schedule
III under the heading “Securities Accounts” (as such schedule may be
amended or supplemented from time to time).

 

“Security
Agreement” shall have the meaning set forth in the
preamble.

 

“Security Agreements” means this Security Agreement and any other
pledge or security agreement entered into, after the date of this Security
Agreement, by any Borrower (as required by the Credit Agreement or any other
Loan Document).

 

“Software Embedded in Goods”
means, with respect to any Goods, any computer program embedded in Goods and
any supporting information or documentation provided in connection with the
program if (i) the program is associated with the Goods in such a manner that
the program customarily is considered part of the Goods or (ii) by becoming the
owner of the Goods a person acquires a right to use the program in connection
with the Goods.

 

“Specified Canadian Account” means Account
4665967101 at JPMorgan Chase Bank, N.A., Toronto Branch, or an Affiliate
thereof or such other accounts as the Grantors shall designate in writing to
the Administrative Agent, in each case maintained in Canadian dollars.

 

9

 

“Specified Canadian Lock Box Account” means
Lock Box 2409 at JPMorgan Chase Bank, N.A., Toronto Branch, or an Affiliate
thereof or such other lock box accounts as the Grantors shall designate in
writing to the Administrative Agent.

 

“State” means a
State of the United States, the District of Columbia, Puerto Rico, the United
States Virgin Islands, or any territory or insular possession subject to the
jurisdiction of the United States.

 

“Subsidiary” means, with respect to any Person
(the “parent”) at any date, any corporation, limited liability company,
partnership, association or other entity the accounts of which would be
consolidated with those of the parent in the parent’s consolidated financial
statements if such financial statements were prepared in accordance with GAAP
as of such date, as well as any other corporation, limited liability company,
partnership, association or other entity (a) of which securities or other
ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or, in the case of a partnership, more than 50% of
the general partnership interests are, as of such date, owned, controlled or
held, or (b) that is, as of such date, otherwise Controlled, by the parent or
one or more subsidiaries of the parent or by the parent and one or more
subsidiaries of the parent.

 

 “Subsidiary Guarantor”
means each Domestic Subsidiary that has executed and delivered to the
Administrative Agent the Subsidiary Guaranty (including by means of a delivery
of a supplement thereto) and their respective successors.

 

“Subsidiary Guaranty” means the guaranty
executed and delivered by an Authorized Officer of the Borrower, each other
Domestic Subsidiary existing on the Effective Date and each Domestic Subsidiary
that becomes a Subsidiary Guarantor pursuant to the terms of the Credit
Agreement, substantially in the form of Exhibit D thereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.

 

“Supporting Obligation” means
all “supporting obligations” as defined in Article 9 of the UCC.

 

“Swap Agreement” means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial
or pricing indices or measures of economic, financial or pricing risk or value
or any similar transaction or any combination of these transactions; provided,
that, no (i) phantom stock or similar plan providing for payments only on
account of services provided by current or former directors, officers,
employees or consultants of any Borrower or any Subsidiary, or (ii) purchase
and sale agreements for supplies of inventory intended for actual use in the
business of the Borrowers, shall be a Swap Agreement.

 

“Swap Obligations” of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Swap
Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Swap Agreement transaction.

 

“Trade Secret Licenses” means
any and all agreements granting any right in or to Trade Secrets (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time).

 

10

 

“Trade Secrets” means
all trade secrets and all other confidential or proprietary information and
know-how, whether or not reduced to a writing or other tangible form, now or
hereafter in force, owned or used in, or contemplated at any time for use in,
the business of any Grantor (all of the foregoing being collectively called a “Trade
Secret”), including with respect to any and all of the foregoing:  (i) all documents and things embodying,
incorporating, or referring in any way thereto, (ii) all rights to sue for
past, present and future infringement thereof, and (iii) all licenses, claims,
damages, and proceeds of suit arising therefrom, and (iv) all payments and
royalties and rights to payments and royalties arising out of the sale, lease,
license, assignment, or other dispositions thereof.

 

“Trademark Licenses” means
any and all agreements granting any right in or to Trademarks (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time).

 

“Trademarks” means
all United States, state and foreign trademarks, service marks, certification
marks, collective marks, trade names, corporate names, d/b/as, business names,
fictitious business names, Internet domain names, trade styles, logos, other
source or business identifiers, designs and general intangibles of a like
nature, rights of publicity and privacy pertaining to the names, likeness,
signature and biographical data of natural persons, now or hereafter in force,
and, with respect to any and all of the foregoing:  (i) all registrations and applications
therefor including, but not limited to, the registrations and applications
referred to in Schedule VI (as such schedule may be amended or
supplemented from time to time), (ii) the goodwill of the business symbolized
thereby, (iii) all rights corresponding thereto throughout the world, (iv) all
rights to sue for past, present and future infringement or dilution thereof or
for any injury to goodwill, (v) all licenses, claims, damages, and proceeds of
suit arising therefrom, and (vi) all payments and royalties and rights to
payments and royalties arising out of the sale, lease, license assignment or
other disposition thereof.

 

“Trademark Security Agreement”
means the agreement set forth in Annex IV.

 

“UCC” means the
Uniform Commercial Code as in effect from time to time in the State of New
York.

 

“USPTO” shall have the meaning set forth in Section
2.2.

 

1.2          Definitions; Interpretation. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to “Sections,” “Annexes” and “Schedules”
shall be to Sections, Annexes and Schedules, as the case may be, of this
Security Agreement unless otherwise specifically provided. Section headings in
this Security Agreement are included herein for convenience of reference only
and shall not constitute a part of this Security Agreement for any other
purpose or be given any substantive effect. Any of the terms defined herein
may, unless the context otherwise requires, be used in the singular or the
plural, depending on the reference. 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
nonlimiting 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. If any conflict or
inconsistency exists between this Security Agreement and the Credit Agreement,
the Credit Agreement shall govern. All references herein to provisions of the
UCC shall include all successor provisions under any subsequent version or amendment
to any Article of the UCC.

 

11

 

SECTION 2          GRANT OF SECURITY

 

2.1          Grant of Security. Each  Grantor that is a
party to this Security Agreement hereby grants to the Administrative
Agent a security interest and continuing lien on all of such Grantor’s right,
title and interest in, to and under all personal property of such Grantor
including, but not limited to, the following, in each case whether now owned or
existing or hereafter acquired or arising and wherever located (all of which,
subject to Section 2.2, being hereinafter collectively referred to as
the “Collateral”):

 

(i)  Documents;

 

(ii)  Goods (including Documents Evidencing Goods
and Software Embedded in Goods);

 

(iii)  Insurance;

 

(iv)  Intellectual Property;

 

(v)  Investment Related Property;

 

(vi)  Letter of Credit Rights;

 

(vii)  Money;

 

(viii)Non-payment
Contracts;

 

(ix)  Receivables Contracts and Receivable Records;

 

(x)  Commercial Tort Claims;

 

(xi)  to the extent not otherwise included above,
all General Intangibles, Material Contracts, motor vehicles and other personal
property of any kind and all Collateral Records, Collateral Support and
Supporting Obligations relating to any of the foregoing; and

 

(xii)  to the extent not otherwise included above,
all Proceeds, products, accessions, rents and profits of or in respect of any
of the foregoing.

 

2.2          Excluded Collateral. Notwithstanding the foregoing, the
security interest granted under Section 2.1 shall not attach to and the
term “Collateral” shall not include (a) any Lease, license, permit, concession,
authorization, Material Contract, property rights or agreement to which each
Grantor is a party or any of the Grantor’s rights or interests thereunder if
the grant of such security interest shall constitute or result in (i) the
abandonment, invalidation or unenforceability of any material right, title or
interest of any  Grantor therein or
(ii) a termination pursuant to the terms of, or a default which would give rise
to a right to terminate under, any such Lease, license, permit, concession,
authorization, Material Contract, property rights or agreement (other than to
the extent that any such term would be rendered ineffective pursuant to
Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or
provisions) of any relevant jurisdiction or any other applicable law (including
the Bankruptcy Code) or principles of equity), (b) applications filed in the
U.S. Patent and Trademark Office (the “USPTO”)
to register trademarks or service marks on the basis of any Grantor’s “intent
to use” such marks unless and until the filing of a “Statement of Use” or “Amendment
to Allege Use” has been filed and accepted, whereupon such applications shall
be automatically subject to the Lien granted herein and

 

12

 

deemed included in the
Collateral, (c) any of the Equity Interests of a Foreign Subsidiary in excess
of sixty-five percent (65%) of
the issued and outstanding Equity Interests of such Foreign Subsidiary entitled
to vote (representing not greater than sixty-five percent (65%) of the total
combined voting power of all classes of Equity Interests entitled to vote)
(within the meaning of Treas. Reg. Section 1.956-2(c)(2) or any successor or
similar statute), (d) Equity Interests in Excluded Joint Ventures, (e) any
assets subject to a Capital Lease Obligation or purchase money security
interest to the extent that contract governing such transactions prohibits the
granting of a lien in such assets and (f) an amount equal to $55,362,740 held
in account number 134757548 at JPMorgan Chase Bank until December 31, 2006.

 

SECTION 3          SECURITY FOR OBLIGATIONS

 

3.1          Security for Obligations. This Security Agreement secures, and
the Collateral is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of 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
any successor provision thereof)), of all Secured Obligations.

 

3.2          Continuing Liability under Collateral. Notwithstanding anything herein to
the contrary, (a) each  Grantor
shall remain liable for all obligations under the Collateral and nothing
contained herein is intended or shall be a delegation of duties to the
Administrative Agent or any Secured Party, (b) each Grantor shall remain liable
under each of the agreements included in the Collateral (including, without
limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests), to perform all of the obligations undertaken by such Grantor
thereunder, all in accordance with and pursuant to the terms and provisions
thereof and neither the Administrative Agent nor any Secured Party shall have
any obligation or liability under any of such agreements by reason of or
arising out of this Security Agreement or any other document related thereto
nor shall the Administrative Agent nor any Secured Party have any obligation to
make any inquiry as to the nature or sufficiency of any payment received by
such Grantor or have any obligation to take any action to collect or enforce
any rights under any agreement included in the Collateral (including, without
limitation, any agreements relating to Pledged Partnership Interests or Pledged
LLC Interests), and (iii) the exercise by the Administrative Agent of any of
the Administrative Agent’s rights hereunder shall not release any Grantor from
any of the Administrative Agent’s duties or obligations under the contracts and
agreements included in the Collateral.

 

SECTION 4          REPRESENTATIONS AND WARRANTIES AND
COVENANTS

 

4.1          Generally.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that:

 

(i)  subject to the filing of all UCC financing
statements naming such  Grantor party hereto as “grantor” and the
Administrative Agent as “administrative agent” and describing the Collateral in
the filing offices set forth opposite such Grantor’s name on Section (E) of Schedule
I (as such schedule may be amended or supplemented from time to time), the
execution of a deposit account control agreement, the recording of the
Trademark Security Agreement and the Patent Security Agreement in the USPTO
within three (3) months of the date hereof, and the recording of the Copyright
Security Agreement in the U.S. Copyright Office within thirty (30) days of the
date hereof, against the U.S. applied-for or other Intellectual Property owned
by such Grantor included in the Collateral, the security interests granted to
the Administrative Agent hereunder 

 

13

 

constitute valid and perfected Liens (subject only to
Liens permitted by Section 6.02 of the Credit Agreement) to the extent that
such security interests may be perfected by such filings or control agreements;
provided, that, recording of the Trademark Security Agreement and the Patent
Security Agreement in the USPTO and the Copyright Security Agreement with the
U.S. Copyright Office may be necessary to perfect the security interest of the
Administrative Agent in issued Patents, and registrations and applications for
other U.S. Intellectual Property that are acquired by the Grantors after the
date hereof; and the taking of actions outside the United States may be
required in order to perfect the Administrative Agent’s Lien in foreign
registered or applied-for Intellectual Property owned by such Grantor;

 

(ii)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, other than the financing statements
filed in favor of the Administrative Agent, no effective UCC financing
statement, fixture filing or other instrument similar in effect under any
applicable law covering all or any part of the Collateral is on file in any
filing or recording office except for (x) financing statements for which proper
termination statements have been delivered to the Administrative Agent for
filing and (y) financing statements filed in connection with Liens permitted by
Section 6.02 of the Credit Agreement;

 

(iii)  no authorization, approval or other action
by, and no notice to or filing with, any Governmental Authority or regulatory
body is required for (x) the pledge or grant by any Grantor of the Liens
purported to be created in favor of the Administrative Agent hereunder or for
the execution, delivery and performance of this Security Agreement by any Grantor, (y) the perfection or maintenance of
the security interests hereunder, including the priority of such security
interest or the exercise by the Administrative Agent of the Administrative
Agent’s rights and remedies hereunder or (z) the exercise by
Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created hereunder or provided for by
applicable law), except (1) for the filings contemplated by clause (i) in this Section
4.1, (2) the initiation of judicial process by the Administrative Agent to
exercise remedies, and (3) as may be required, in connection with the
disposition of any Investment Related Property, by laws generally affecting the
offering and sale of Securities or as may be required under federal laws pertaining
to Intellectual Property, including the filing of the Patent, Trademark, and
Copyright Security Agreements with USPTO and U.S. Copyright Office;

 

(iv)  all actions and consents, including all
filings, notices, registrations and recordings necessary for the exercise by
the Administrative Agent of the voting rights provided for in this Security
Agreement have been made or obtained, except for the taking of actions outside
the United States that may be required to secure the Administrative Agent’s
voting rights with respect to any foreign stock, except to the extent otherwise
required by the Loan Documents;

 

(v)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Section (A) of Schedule I (as
such schedule may be amended or supplemented from time to time) accurately sets
forth:  (w) the type of organization of
such Grantor, (x) the jurisdiction of organization of such Grantor, (y) such
Grantor’s organizational identification number (and such Grantor represents and
warrants that during the four months preceding the date hereof (or, if later,
the date such Grantor becomes a party hereto) such Grantor has not had a
different organizational identification number), and (z) the jurisdiction where
such Grantor maintains such Grantor’s chief executive office or such Grantor’s
sole place of business (or if such Grantor is a natural person, such Grantor’s
principal residence and principal place of business), and for the one-year
period preceding the date hereof, where it has been located.

 

14

 

(vi)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, the full legal name of such Grantor
is as set forth in Section (A) of Schedule I and that such Grantor does
not do (and during the past five (5) years has not done), business under any
other name (including any trade-name or fictitious business name), except for
those names set forth in Section (B) of Schedule I (as such schedule may
be amended or supplemented from time to time);

 

(vii)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, except as provided in Section (C) of Schedule
I, such Grantor has not changed such Grantor’s name, jurisdiction of
organization, chief executive office or sole place of business (or, if such
Grantor is a natural person, principal residence or principal place of
business) or such Grantor’s corporate structure in any way (e.g. by merger,
consolidation, change in corporate form or otherwise) within the past five (5)
years; and

 

(viii)  none of the Collateral constitutes, or is the
Proceeds of, “farm products” (as defined in the UCC).

 

(b)           Covenants and Agreements. Each  Grantor hereby covenants and agrees that:

 

(i)  except for the security interest created by
this Security Agreement, such Grantor shall not create or suffer to exist any
Lien upon or with respect to any of the Collateral, except Liens permitted by
Section 6.02 of the Credit Agreement, and such Grantor shall defend the
Collateral against all Persons (other than the holder of any Lien permitted by
Section 6.02 of the Credit Agreement with respect to such Lien) at any time
claiming any interest therein; and

 

(ii)  such Grantor shall not change such Grantor’s
name, sole place of business (or principal residence if such Grantor is a
natural person), chief executive office, type of organization, organizational
identification number or jurisdiction of organization unless such Grantor shall
have (a) notified the Administrative Agent in writing prior to any such change
or establishment, identifying such new proposed name, sole place of business
(or principal residence if such Grantor is a natural person), chief executive
office, organizational identification number or jurisdiction of organization, (b)
if such change is material and if requested by the Administrative Agent,
executed and delivered to the Administrative Agent a completed Pledge
Supplement, substantially in the form of Annex I, together with all
applicable Supplements to Schedules thereto, and providing such other
information in connection therewith as the Administrative Agent may reasonably
request, and (c) subject to the terms, conditions and restrictions in the
Intercreditor Agreement, taken all actions necessary or advisable to maintain
the continuous validity, perfection and the same or better priority of the
Administrative Agent’s security interest in the Collateral granted or intended
to be granted and agreed to hereby.

 

4.2          Equipment and Inventory.

 

(a)           Representations and Warranties.
Each  Grantor party hereto represents and warrants,
on each Representation Date, that:

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, all of the Equipment and Inventory
included in the Collateral is (and in connection with all of the Equipment and
Inventory included in the Collateral and located in Alabama, Arizona or Florida
for the past five (5) years has been) kept only at the locations specified in Schedule II
(as such schedule may be amended or supplemented from time to time);

 

15

 

(ii)  any Inventory now or hereafter produced by
any  Grantor included in the
Collateral has been and will be produced in compliance with the requirements of
the Fair Labor Standards Act, as amended, except as could not reasonably be
expected to have a Material Adverse Effect; and

 

(iii)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, except as set forth on Schedule II,
none of the Inventory or Equipment included in the Collateral is in the
possession of an issuer of a negotiable document (as defined in Section 7-104
of the UCC) therefor or otherwise in the possession of a bailee or
warehouseman.

 

(b)           Covenants and Agreements. Each  Grantor covenants and agrees that:

 

(i)  such Grantor shall keep the Equipment and
Inventory (other than Equipment and Inventory having a value not to exceed
$100,000 at any location or $1,000,000 in the aggregate) in the locations
specified on Schedule II (as such schedule may be amended or
supplemented from time to time) unless such Grantor shall have (a) notified the
Administrative Agent in writing promptly after any change in locations,
identifying such new locations and providing such other information in
connection therewith as the Administrative Agent may reasonably request, (b)
taken all action necessary or reasonably requested with respect to such
Equipment or Inventory required to be compliance with clause (ii) of
this Section 4.2(b) and (c) delivered to the Administrative Agent a
Collateral Access Agreement for each such new location to the extent required
by the Credit Agreement;

 

(ii)  such Grantor shall take all actions necessary
or reasonably requested by the Administrative Agent to maintain the continuous
validity, perfection and the same or better priority of the Administrative
Agent’s security interest in the Collateral intended to be granted and agreed
to hereby, or to enable the Administrative Agent to exercise and enforce such
Grantor’s rights and remedies hereunder, with respect to such Equipment and
Inventory;

 

(iii)  such Grantor shall keep records of the
Inventory that are correct and accurate in all material respects so as to
permit reporting required by Section 5.01(h) of the Credit Agreement;

 

(iv)  subject to the terms, conditions and
restrictions in the Intercreditor Agreement, such Grantor shall not deliver any
Document Evidencing any Goods in excess of $1,000,000 in the aggregate to any
Person other than the issuer of such Document to claim the Goods evidenced
therefor or the Administrative Agent;

 

(v)  if any Equipment or Inventory is in
possession or control of any third party, including, without limitation, any
warehouseman, bailee or agent, such  Grantor
shall join with the Administrative Agent in notifying the third party of the
Administrative Agent’s security interest and, subject to the terms, conditions
and restrictions in the Intercreditor Agreement, using commercially reasonable
efforts (A) to obtain a Bailee Agreement or other Authenticated acknowledgment
from such third party that such Grantor is holding the Equipment and Inventory
for the benefit of the Administrative Agent, or (B), if unavailable, to enter
into other arrangements satisfactory to the Administrative Agent to protect the
interest of the Administrative Agent in such Equipment or Inventory; and

 

(vi)  with respect to any item of Equipment which
is covered by a certificate of title under a statute of any jurisdiction under
the law of which indication of a security interest on such certificate is
required as a condition of perfection thereof, upon the request of the 

 

16

 

Administrative Agent, (A) provide information with
respect to any such Equipment in excess of $50,000 individually or $250,000 in
the aggregate and (B) at any time (I) when the Grantors have such Equipment
with an aggregate value in excess of $2,000,000 or (II) during the continuance
of an Event of Default, execute and file with the registrar of motor vehicles
or other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on such certificate of title issued with respect to Equipment
with the value referred to in clause (vi)(A) of this Section 4.2(b) in
connection with the initial filings required under clause (vi)(B) in this Section
4.2(b), and thereafter on or before the last day of each calendar quarter,
deliver to the Administrative Agent copies of all such applications or other
documents filed pursuant to clause (vi)(B) in this Section 4.2(b) during
such calendar quarter and copies of all such certificates of title issued
during such calendar quarter indicating the security interest created hereunder
in the items of Equipment covered thereby.

 

4.3          Receivables Contracts.

 

(a)           Representations and Warranties.
Each  Grantor party hereto represents and warrants,
on each Representation Date, that:

 

(i)  each Receivables Contract included in the
most recent Borrowing Base Certificate (a) to the best of such Grantor’s
knowledge, is and will be the legal, valid and binding obligation of the
Account Debtor in respect thereof, representing an unsatisfied obligation of
such Account Debtor, (b) to the best of such Grantor’s knowledge, is and will
be enforceable in accordance with its terms, (c) is not, as of the date of the
most recent Borrowing Base Certificate, subject to any setoffs, defenses,
taxes, counterclaims (except with respect to refunds, returns and allowances in
the ordinary course of business with respect to damaged merchandise) that are
not reflected therein, and (d) is in compliance with all material applicable
laws, whether federal, state, local or foreign; and

 

(ii)  to the extent requested by the Administrative
Agent, such  Grantor has delivered
to the Administrative Agent a complete and correct copy of each standard form
of document under which a Receivable Contract may arise.

 

(b)           Covenants and Agreements:  Each  Grantor
hereby covenants and agrees that:

 

(i)  such Grantor shall keep and maintain at such
Grantor’s own cost and expense, records of the Receivables Contracts that are
correct and accurate in all material respects so as to permit reporting
required by Section 5.01(h) of the Credit Agreement;

 

(ii)  such Grantor shall perform in all material
respects all of such Grantor’s obligations with respect to the Receivables
Contracts except where the failure to do so does not have a Material Adverse
Effect on the Borrowing Base, as reported in the most recently delivered
Borrowing Base Certificate;

 

(iii)  such Grantor shall not amend, modify,
terminate or waive any provision of any Receivable Contract in any manner that
could reasonably be expected to have a Material Adverse Effect on the value as
Collateral of the Receivables Contracts, taken as a whole, of any Person who is
an Account Debtor with respect to more than $1,000,000 of aggregate Receivables
Contracts to the Grantors;

 

17

 

(iv)  except as otherwise provided in this
subsection and except as could not reasonably be expected to have a Material
Adverse Effect, such  Grantor shall
continue to collect all amounts due or to become due to such Grantor under the
Receivables Contracts and any Supporting Obligation and diligently exercise
each material right such Grantor may have under any Receivables Contracts, any
Supporting Obligation or Collateral Support, in each case, at such Grantor’s
own expense; provided, that, notwithstanding the foregoing and subject to the
terms, conditions and restrictions in the Intercreditor Agreement, the
Administrative Agent shall have the right at any time following the occurrence
and during the continuation of an Event of Default to notify, or require any
Grantor to notify, any Account Debtor of the Administrative Agent’s security
interest in the Receivables Contracts and any Supporting Obligation and, in
addition, at any time following the occurrence and during the continuation of
an Event of Default, the Administrative Agent may, upon notice to the
Administrative Borrower and
subject to the terms, conditions and restrictions in the Intercreditor
Agreement:  (1) direct the Account
Debtors under any Receivables Contracts to make payment, of all amounts due or
to become due to such Grantor thereunder directly to the Administrative Agent;
(2) notify, or require any Grantor to notify, each Person maintaining a Lock
Box or similar arrangement to which Account Debtors under any Receivables
Contracts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such Lock Box or other arrangement directly to the Administrative
Agent; and (3) enforce, at the expense of such Grantor, collection of any such
Receivables Contracts and to adjust, settle or compromise the amount or payment
thereof, in the same manner and to the same extent as such Grantor might have
done; provided further, that, if the Administrative Agent notifies any Grantor
that the Administrative Agent has elected to collect the Receivables Contracts
in accordance with the preceding sentence, any payments of Receivables
Contracts received by such Grantor shall be forthwith (and in any event within
two (2) Business Days) deposited by such Grantor in the exact form received,
duly indorsed by such Grantor to the Administrative Agent if required, in the
Collateral Account maintained under the sole dominion and control of the
Administrative Agent, and until so turned over, all amounts and Proceeds
(including checks and other instruments) received by such Grantor in respect of
the Receivables Contracts, any Supporting Obligation or Collateral Support
shall be received in trust for the benefit of the Administrative Agent
hereunder and shall be segregated from other funds of such Grantor and such
Grantor shall not adjust, settle or compromise the amount or payment of any
Receivables Contract, or release wholly or partly any Account Debtor or obligor
thereof, or allow any credit or discount thereon; and

 

(v)  such Grantor shall use commercially
reasonable efforts to keep in full force and effect any Supporting Obligation
or Collateral Support relating to any Receivables Contract that is necessary
for such Receivables Contract to be an Eligible Account.

 

(c)           Delivery and Control of
Receivables Contracts. With respect to any Receivables Contracts in excess
of $100,000 individually or $2,000,000 in the aggregate that is evidenced by,
or constitutes, “tangible chattel paper” as defined in Article 9 of the UCC,
such  Grantor shall, subject to the terms,
conditions and restrictions in the Intercreditor Agreement, cause each
originally executed copy thereof to be delivered to the Administrative Agent
(or the Administrative Agent’s agent or designee) appropriately indorsed to the
Administrative Agent or indorsed in blank: 
(i) with respect to any such Receivables Contracts in existence on the
date hereof, on or prior to the date hereof and (ii) with respect to any such Receivables
Contracts hereafter arising, within thirty (30) days of such Grantor acquiring
rights therein. With respect to any Receivables Contracts in excess of $100,000
individually or $2,000,000 in the aggregate which would constitute “electronic
chattel paper” under the UCC, such  Grantor
shall, subject to the request of the Administrative Agent and subject to the
terms, conditions and restrictions in the Intercreditor Agreement, take all
steps necessary to give the Administrative Agent control over such Receivables
Contracts (as defined in Section 9-105 of the UCC):  (i) with respect to any 

 

18

 

such Receivables
Contracts in existence on the date hereof, on or prior to the date hereof and
(ii) with respect to any such Receivables Contracts hereafter arising, within
thirty (30) days of such Grantor acquiring rights therein.

 

4.4          Investment Related Property.

 

4.4.1       Pledged Equity
Interests.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that:

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Schedule III (as such schedule
may be amended or supplemented from time to time) sets forth under the headings
“Pledged Stock, “Pledged LLC Interests,” “Pledged Partnership Interests” and “Pledged
Trust Interests,” respectively, all of the Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests owned
directly by any  Grantor and such
Pledged Equity Interests constitute the percentage of issued and outstanding
shares of stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective issuers
thereof indicated on such Schedule III;

 

(ii)  there are no outstanding warrants, options or
other rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests issued with
regard to any Loan Party;

 

(iii)  without limiting the generality of clause
(iii) of Section 4.1(a), no consent of any Person including any other
general or limited partner, any other member of a limited liability company,
any other shareholder or any other trust beneficiary is necessary or desirable
in connection with the creation, perfection or priority status of the security
interest of the Administrative Agent in any Pledged Equity Interests; and

 

(iv)  except as has been disclosed to the Administrative
Agent, none of the Pledged LLC Interests nor Pledged Partnership Interests are
or represent interests in issuers that are: 
(a) registered as investment companies, (b) are dealt in or traded on
securities exchanges or markets or (c) have opted to be treated as securities
under the uniform commercial code of any jurisdiction.

 

(b)           Covenants and Agreements. Each  Grantor hereby covenants and agrees that:

 

(i)  without the prior written consent of the
Administrative Agent, such Grantor shall not vote to enable or take any other
action to cause any issuer of any Pledged Partnership Interests or Pledged LLC
Interests which are not securities (for purposes of the UCC) on the date hereof
to elect or otherwise take any action to cause such Pledged Partnership
Interests or Pledged LLC Interests to be treated as securities for purposes of
the UCC, unless such Grantor shall promptly notify the Administrative Agent in
writing of any such election or action and, in such event, subject to the
terms, conditions and restrictions in the Intercreditor Agreement, shall take
all steps necessary or advisable to establish the Administrative Agent’s “control”
thereof;

 

(ii)  such Grantor shall provide prompt notice to
the Administrative Agent of any change in the information contained in Schedule
III; and

 

19

 

(iii)  such  Grantor
consents to the grant by each other Grantor of a security interest in all
Investment Related Property that is Collateral to the Administrative Agent and,
without limiting the foregoing and subject to the terms, conditions and
restrictions in the Intercreditor Agreement, consents to the  transfer of any Pledged Partnership
Interest and any Pledged LLC Interest to the Administrative Agent or the
Administrative Agent’s nominee if an Event of Default has occurred and is
continuing and in such circumstances to the substitution of the Administrative
Agent or the Administrative Agent’s nominee as a partner in any partnership or
as a member in any limited liability company with all the rights and powers
related thereto.

 

4.4.2       Pledged Debt.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Schedule III (as such schedule
may be amended or supplemented from time to time) sets forth under the heading “Pledged
Debt” all of the Pledged Debt owned by any Grantor; and

 

(ii)  the Pledged Debt referred to in clause (i) in
this Section 4.4.2(a) constitutes all of the issued and outstanding
intercompany indebtedness evidenced by an instrument or certificated security
of the respective issuers thereof owing to such Grantor.

 

(b)           Covenants and Agreements. Each  Grantor hereby covenants and agrees that
such Grantor shall notify the Administrative Agent of any default under any
Pledged Debt that has caused, either in any case or in the aggregate, a
Material Adverse Effect.

 

4.4.3       Investment Accounts.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that:

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Schedule III (as such schedule
may be amended or supplemented from time to time) sets forth under the headings
“Securities Accounts” and “Commodities Accounts,” respectively, all of the
Securities Accounts and Commodities Accounts in which such  Grantor has an interest;

 

(ii)  such  Grantor
is the sole entitlement holder of each such Securities Account and Commodities
Account, and such Grantor has not consented to, and is not otherwise aware of,
any Person (other than the Administrative Agent pursuant hereto) having “control”
(within the meanings of Sections 8-106 and 9-106 of the UCC) over any such
Securities Account or Commodity Account or any securities or other property
credited thereto, in each case other than the interests of the representatives
for the Revolving Obligations and the Second Lien Obligations; and

 

(iii)  subject to the terms, conditions and
restrictions in the Intercreditor Agreement, such  Grantor has taken all actions required under any Loan
Document to establish the Administrative Agent’s “control” (within the meanings
of Sections 8-106 and 9-106 of the UCC) over any portion of the Investment
Related Property constituting Certificated Securities, Uncertificated
Securities, Securities Accounts, Securities Entitlements or Commodity Accounts
(each as defined in the UCC).

 

20

 

(b)           Delivery and Control. With
respect to any Investment Related Property consisting of Securities Accounts or
Securities Entitlements, subject to the terms, conditions and restrictions in
the Intercreditor Agreement, each Grantor shall cause the securities
intermediary maintaining such Securities Account or Securities Entitlement to
enter into an agreement in form and substance acceptable to the Administrative
Agent pursuant to which such Grantor shall agree to comply with the
Administrative Agent’s “entitlement orders” without further consent by such
Grantor. Each Grantor shall have entered into such control agreement or
agreements with respect to: (i) any Securities Accounts or Securities
Entitlements that exist on the Effective Date, as of or prior to the Effective
Date (or such longer period of time as may be agreed in writing by the
Administrative Agent) and (ii) any Securities Accounts or Securities
Entitlements that are created or acquired after the Effective Date, as of or
prior to the deposit or transfer of any such Securities Entitlements or funds,
whether constituting moneys or investments, into such Securities Accounts or
Deposit Accounts.

 

4.4.4       Deposit Accounts.

 

(a)           Representations and Warranties.
Each Grantor party hereto
hereby represents and warrants, on each Representation Date, that:

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Schedule III (as such schedule
may be amended or supplemented from time to time) sets forth under the heading “Deposit
Accounts”, all of the Deposit Accounts maintained by such Grantor in which all
cash, checks or similar payments relating to or constituting payments made in
respect of Receivables Contracts will be deposited (the “Collateral Accounts”);

 

(ii)  such Grantor is the sole account holder of
each such Collateral Account and such Grantor has not consented to, and is not
otherwise aware of, any Person (other than the Administrative Agent pursuant
hereto) having either sole dominion or control (within the meaning of common
law) or “control” (within the meaning of Section 9-104 of the UCC) over any
such Collateral Account or any money or other property deposited therein (other
than any such control which has been released or terminated prior to the
Effective Date and control arising by operation of law in favor of the
depository bank at which such Collateral Account is maintained), in each case
other than the interests of the representatives for the Revolving Obligations
and the Second Lien Obligations; and

 

(iii)  subject to the terms, conditions and
restrictions in the Intercreditor Agreement, such Grantor has taken all actions
required hereunder to establish the Administrative Agent’s “control” (within
the meaning of Section 9-104 of the UCC) over all Deposit Accounts (other than
any Deposit Accounts specially and exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of such
Grantor’s employees) and other than Deposit Accounts containing from time to
time no more than $15,000 individually and $75,000 in the aggregate.

 

(b)           Covenants and Agreements. Subject
in each case to the terms, conditions and restrictions in the Intercreditor
Agreement, each Grantor hereby covenants and agrees that:

 

(i)  on or before the Effective Date, such Grantor
shall (a) execute and deliver to the Administrative Agent, for each Collateral
Account, an agreement in form and substance satisfactory to the Administrative
Agent, pursuant to which the Administrative Agent shall have “control” (within
the meaning of Section 9-104 of the UCC) over such Collateral Account, and (b)
establish Lock Box service (the “Lock Boxes”)
with the bank(s) set forth on Schedule III under the heading “Lock Boxes”,
which Lock Boxes shall be subject to irrevocable Lock Box agreements in 

 

21

 

form and substance satisfactory to the Administrative
Agent and shall be accompanied by an acknowledgment by the bank where the Lock
Box is located of the Lien of the Administrative Agent granted hereunder and of
irrevocable instructions to wire all amounts collected therein (other than
amounts deposited in the Specified Canadian Lock Box Account and the Excluded
Cash Accounts, to the extent provided in clause (ii)  of this Section 4.4.4(b)) to the
Collateral Account (a “Lock Box Agreement”);

 

(ii)  subject to clause (b) of Section 6.15 of the
Credit Agreement, each Grantor shall direct all of its Account Debtors to
forward payments directly to Lock Boxes subject to Lock Box Agreements. Except
as otherwise provided below and in clause (b) of Section 6.15 of the Credit
Agreement with respect to the Specified Canadian Lock Box Account and the
Excluded Cash Accounts, the Administrative Agent shall have sole access to the
Lock Boxes at all times and each Grantor shall take all actions necessary to
grant the Administrative Agent such sole access. Except as otherwise provided
below and in clause (b) of Section 6.15 of the Credit Agreement with respect to
the Specified Canadian Lock Box Account and the Excluded Cash Accounts, at no
time shall any Grantor remove any item from a Lock Box or from a Collateral
Account without the Administrative Agent’s prior written consent. If any
Grantor should refuse or neglect to notify any Account Debtor to forward
payments directly to a Lock Box subject to a Lock Box Agreement after notice
from the Administrative Agent, the Administrative Agent shall, notwithstanding
the language set forth in clause (v) of Section 4.3(b), be entitled to
make such notification directly to the applicable Account Debtor. If
notwithstanding the foregoing instructions, any Grantor receives any Proceeds
of any Receivables Contract (except as permitted below with respect to the
Specified Canadian Lock Box Account and the Excluded Cash Accounts), such
Grantor shall receive such payments as the Administrative Agent’s trustee, and
shall immediately deposit all cash, checks or other similar payments related to
or constituting payments made in respect of Receivables Contracts received by
it to a Collateral Account. Except as otherwise provided below with respect to
the Specified Canadian Lock Box Account and the Excluded Cash Accounts, all
funds deposited into any Lock Box subject to a Lock Box Agreement or a
Collateral Account will be swept on a daily basis into a collection account
maintained by the Grantors with the Administrative Agent (the “Collection Account”). The Administrative
Agent shall hold and apply funds received into the Collection Account as
provided by the terms of Section 7.2. The Lock Box Agreement with
respect to the Specified Canadian Lock Box Agreement shall provide that, until
notice is given to the depository bank by the Administrative Agent, funds
deposited into the Specified Canadian Lock Box Account with respect to
Receivables Contracts payable in Canadian Dollars will be swept into the
Specified Canadian Account (and after such notice is given, such funds shall be
swept into a Collection Account specified by the Administrative Agent). The
Borrowers may use such funds to support its Canadian business and operations,
and may hold up to Cdn$1,000,000 in the Specified Canadian Account for such
purpose; provided, that any funds received in such account in excess of
such amount (or any funds received in dollars) shall be converted into dollars
(as applicable) and paid on a daily basis into a Collection Account. Further,
it is understood that any funds received in the Excluded Cash Accounts in
excess of the amounts specified in the definition of Excluded Lockbox Accounts
(or any funds received in dollars) shall be converted into dollars (as
applicable) and paid on a daily basis into a Collection Account.

 

(ii)  before opening or replacing any Collateral
Account, other Deposit Account, or establishing a new Lock Box, such Grantor
shall (a)  with respect to (i) (A) any Deposit Account specially and
exclusively used for payroll, payroll taxes and other employee wage and benefit
payments to or for the benefit of such Grantor’s employees, or (B) any other
than Deposit Account that will contain from time to time no more than $15,000
individually and $75,000 in the aggregate, provide prior written notice to the
Administrative Agent of the opening of such Deposit Account, or (ii) any other
Deposit Account, obtain the Administrative Agent’s consent in writing to the
opening of such Deposit Account or Lock Box, and (b) cause each bank or
financial institution in which such Grantor seeks to open (i) a Deposit Account
other than (A) any Deposit Account specially 

 

22

 

and exclusively used for payroll, payroll taxes and
other employee wage and benefit payments to or for the benefit of such Grantor’s
employees or (B) any other Deposit Account that will contain from time to time
no more than $15,000 individually and $75,000 in the aggregate, to enter into a
Deposit Account Control Agreement with the Administrative Agent in order to
give the Administrative Agent “control” (within the meaning of Section 9-104 of
the UCC) over such Deposit Account, or (ii) a Lock Box, to enter into a Lock
Box Agreement with the Administrative Agent in order to give the Administrative
Agent “control” (within the meaning of Section 9-104 of the UCC) over the Lock
Box. In the case of Deposit Accounts or Lock Boxes maintained with Lenders, the
terms of such Deposit Account Control Agreement or Lock Box Agreement shall be
subject to the provisions of the Credit Agreement regarding setoffs; and

 

(iii)  All amounts deposited in the Collateral
Accounts shall be deemed received by the Administrative Agent in accordance
with Section 2.16(a) of the Credit Agreement and shall, after having been
credited in immediately available funds to the Collection Account, be applied
(and allocated) by Administrative Agent in accordance with Section 2.16(b) of
the Credit Agreement. In no event shall any amount be so applied unless and
until such amount shall have been credited in immediately available funds to
the Collection Account.

 

4.4.5       Investment Related Property Generally.

 

(a)           Covenants and Agreements. Each  Grantor hereby covenants and agrees that:

 

(i)  in the event such Grantor acquires rights in
any Investment Related Property (other than Receivables Contracts, to the
extent not required to be delivered under Section 4.3(b)) after the date
hereof, such Grantor shall notify the Administrative Agent thereof; provided,
that, notwithstanding the foregoing, it is understood and agreed that the
security interest of the Administrative Agent shall attach to all Investment
Related Property included in the definition of Collateral immediately upon any
Grantor’s acquisition of rights therein and shall not be affected by the
failure of any Grantor to deliver notice as required hereby;

 

(ii)  except as provided in the next sentence, in
the event such Grantor receives any dividends, interest or distributions on any
Investment Related Property that is Collateral, or any securities or other
property upon the merger, consolidation, liquidation or dissolution of any issuer
of any Investment Related Property, then (a) such dividends, interest or
distributions and securities or other property shall be included in the
definition of Collateral without further action and (b) such Grantor shall
promptly take all steps, if any, necessary to ensure the validity, perfection,
priority and, if applicable, control of the Administrative Agent over such
Investment Related Property (including, without limitation, delivery thereof to
the Administrative Agent) and pending any such action such Grantor shall be
deemed to hold such dividends, interest, distributions, securities or other
property in trust for the benefit of the Administrative Agent and shall be
segregated from all other property of such Grantor; and

 

(iii)  if any issuer of any Investment Related
Property that is Collateral and that (A) is a Subsidiary or (B) represents an
investment of more than $2,500,000 by the Grantors, is located in a
jurisdiction outside of the United States, such  Grantor shall, upon the request of the Administrative Agent,
take such additional actions, including, without limitation, causing the issuer
to register the pledge on such issuer’s books and records or making such
filings or recordings, in each case as may be necessary or advisable, under the
laws of such issuer’s jurisdiction to insure the validity, perfection and
priority of the security interest of the Administrative Agent, and in each case
as the Administrative Agent shall reasonably (taking into account the costs of
delivery of such 

 

23

 

security documents and the benefits provided by such
security documents) request. Subject to the occurrence of an Event of Default
and to the terms, conditions and restrictions in the Intercreditor Agreement,
the Administrative Agent shall have the right, without notice to any Grantor,
to transfer all or any portion of the Investment Related Property to the
Administrative Agent’s name or the name of the Administrative Agent’s nominee
or agent. In addition, subject to the terms, conditions and restrictions in the
Intercreditor Agreement, the Administrative Agent shall have the right at any
time, without notice to any Grantor, to exchange any certificates or
instruments representing any Investment Related Property for certificates or
instruments of smaller or larger denominations.

 

(b)           Delivery and Control. Each  Grantor agrees that with respect to any
Investment Related Property that is Collateral in which such Grantor currently
has rights (other than Receivables Contracts, to the extent not required to be
delivered by Section 4.3(b)) such Grantor shall comply with the
provisions of this Section 4.4.5(b) on or before the Effective Date and
with respect to any Investment Related Property hereafter acquired by such
Grantor (other than Receivables Contracts, to the extent not required to be
delivered by Section 4.3(b)) such Grantor shall comply with the
provisions of this Section 4.4.5(b) promptly upon acquiring rights
therein, in each case in form and substance satisfactory to the Administrative
Agent. With respect to any Investment Related Property that is Collateral that
is represented by a certificate or that is an “instrument” (other than any
Investment Related Property credited to a Securities Account and other than Receivables
Contracts, to the extent not required to be delivered by Section 4.3(b)),
such Grantor shall cause such certificate or instrument to be delivered to the
Administrative Agent, indorsed in blank by an “effective indorsement” (as
defined in Section 8-107 of the UCC), regardless of whether such
certificate constitutes a “certificated security” for purposes of the UCC. With
respect to any Investment Related Property that is Collateral that is an “uncertificated
security” for purposes of the UCC  (other
than any “uncertificated securities” credited to a Securities Account and other
than Receivables Contracts, to the extent not required to be delivered by Section
4.3(b)), such Grantor shall cause the issuer of such uncertificated
security to either (i) register the Administrative Agent as the registered
owner thereof on the books and records of the issuer or (ii) execute an
agreement in form and substance satisfactory to the Administrative Agent,
pursuant to which such issuer agrees to comply with the Administrative Agent’s
instructions with respect to such uncertificated security without further
consent by such Grantor.

 

(c)           Voting and Distributions.

 

(i)  So long as no Event of Default shall have
occurred and be continuing and until the Administrative Borrower has received
notice from the Administrative Agent of the Administrative Agent’s intent to
exercise the Administrative Agent’s rights under this Section 4.4.5(c):

 

(A)  each  Grantor
shall be entitled to exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Investment Related Property or any
part thereof for any purpose not violative of the terms of this Security
Agreement or the Credit Agreement; it being understood, however, that neither
the voting by any Grantor of any Pledged Stock for, or any Grantor’s consent
to, the election of directors (or similar governing body) at a regularly
scheduled annual or other meeting of stockholders or with respect to incidental
matters at any such meeting, nor any Grantor’s consent to or approval of any
action otherwise permitted under this Security Agreement and the Credit
Agreement, shall be deemed inconsistent with the terms of this Security
Agreement or the Credit 

 

24

 

Agreement within the meaning of clause (i)(A) of this Section
4.4.5(c); and

 

(B)   the Administrative Agent shall promptly
execute and deliver (or cause to be executed and delivered) to  each  Grantor
all proxies and other instruments as any Grantor may from time to time
reasonably request for the purpose of enabling such Grantor to exercise the
voting and other consensual rights when and to the extent which such Grantor is
entitled to exercise pursuant to clause (i)(A) of this Section 4.4.5(c);
and

 

(ii)  subject to the occurrence and during the
continuation of an Event of Default and subject to the terms, conditions and
restrictions in the Intercreditor Agreement, after the Administrative Borrower
has received notice from the Administrative Agent of the Administrative Agent’s
intent to exercise the Administrative Agent’s rights under clause (ii) of this Section
4.4.5(c):

 

(A)  all rights of each Grantor to exercise
or refrain from exercising the voting and other consensual rights which such
Grantor would otherwise be entitled to exercise pursuant hereto shall cease and
all such rights shall thereupon become vested in the Administrative Agent who
shall thereupon have the sole right to exercise such voting and other
consensual rights; and

 

(B)   in order to permit the Administrative Agent
to exercise the voting and other consensual rights which such Grantor may be
entitled to exercise pursuant hereto and to receive all dividends and other
distributions which such Grantor may be entitled to receive hereunder: (1) such  Grantor shall promptly execute and deliver
(or cause to be executed and delivered) to the Administrative Agent all
proxies, dividend payment orders and other instruments as the Administrative
Agent may from time to time reasonably request and (2) such  Grantor acknowledges that the
Administrative Agent may utilize the power of attorney set forth in Section
6.

 

4.5          Material Contracts.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that:

 

(i)  Schedule IV (as such schedule may be
amended or supplemented from time to time) sets forth as of the Effective Date
or, if later, the date such Grantor becomes a party hereto, all of the Material
Contracts to which such Grantor has rights; and

 

(ii)  the Material Contracts, true and complete
copies (including any amendments or supplements thereof) of which have been
furnished to the Administrative Agent as in effect on the Effective Date and
thereafter to the extent required by clause (iii) of Section 4.5(b), are
enforceable except as could not reasonably be expected to have a Material
Adverse Effect.

 

(b)           Covenants and Agreements. Subject
to the terms, conditions and restrictions in the Intercreditor Agreement, each  Grantor hereby covenants and agrees that:

 

25

 

(i)  in addition to any rights under Section 4.3
relating to Receivables Contracts, the Administrative Agent may at any time
after the occurrence and during the continuance of an Event of Default, notify,
or require any Grantor to so notify, the counterparty on any Material Contract
of the security interest of the Administrative Agent therein. In addition,
after the occurrence and during the continuance of an Event of Default, the
Administrative Agent may, subject to written notice to the applicable Grantor,
notify, or require any Grantor to notify, the counterparty to make all payments
under the Material Contracts directly to the Administrative Agent;

 

(ii)  such  Grantor
shall deliver promptly to the Administrative Agent a copy of each material
demand, notice or document received by such Grantor relating in any way to any
Material Contract; and

 

(iii)  such  Grantor
shall deliver promptly to the Administrative Agent, and in any event within ten
(10) Business Days, after (1) any Material Contract of such Grantor is
terminated or amended in a manner that is materially adverse to such Grantor or
(2) any new Material Contract is entered into by such Grantor, a written
statement describing such event, with copies of such material amendments or new
contracts, delivered to the Administrative Agent (to the extent such delivery
is permitted by the terms of any such Material Contract; provided, that, no
prohibition on delivery shall be effective if such prohibition bargained for by
such Grantor with the intent of avoiding compliance with clause (iii) of this Section
4.5(b)), and an explanation of any actions being taken with respect
thereto.

 

4.6          Letter of Credit Rights.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, on each Representation Date, that:

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, all letters of credit with a face
value in excess of $1,000,000 to which such Grantor is the beneficiary is
listed on Schedule V  (as
such schedule may be amended or supplemented from time to time); and

 

(ii)  if the Administrative Agent has so requested,
such Grantor has obtained the consent of each issuer of any letter of credit
with a face value in excess of $1,000,000 to which such Grantor is the
beneficiary to the assignment of the Proceeds of such letter of credit to the
Administrative Agent.

 

(b)           Covenants and Agreements. Subject
to the terms, conditions and restrictions in the Intercreditor Agreement, each  Grantor hereby covenants and agrees that
with respect to any letter of credit with a face value in excess of $1,000,000
to which such Grantor is the beneficiary hereafter arising such Grantor shall
give notice thereof to the Administrative Agent and shall use commercially
reasonable efforts to obtain the consent of the issuer thereof to the
assignment of the Proceeds of the letter of credit to the Administrative Agent
and shall deliver to the Administrative Agent a completed Pledge Supplement,
substantially in the form of Annex I, together with all Supplements to
Schedules thereto.

 

4.7          Intellectual Property.

 

(a)           Representations and Warranties.
Except as disclosed in Section (E) of Schedule VI (as such schedule may
be amended or supplemented from time to time), each  Grantor party
hereto hereby represents and warrants, on each Representation Date,
that:

 

26

 

(i)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, Schedule VI (as such schedule
may be amended or supplemented from time to time) sets forth a true and
complete list of (i) all material United States and Canadian registrations of
and applications for Patents, Trademarks, and Copyrights owned by such  Grantor and (ii) all material Patent
Licenses, Trademark Licenses, Copyright Licenses, and Trade Secret Licenses (x)
granting rights to any third party to use any Intellectual Property owned by or
licensed to any Grantor or (y) granting rights to any Grantor to use
Intellectual Property owned by a third party and that is material to the
business of such Grantor;

 

(ii)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, all issued Patents and registrations
and applications for other Intellectual Property included in the Collateral are
standing in the name of such  Grantor
as identified on Schedule VI;

 

(iii)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, such Grantor is the sole and
exclusive owner of the entire right, title, and interest in and to all
Intellectual Property on Schedule VI (as such schedule may be amended or
supplemented from time to time), and, such Grantor owns or has the valid right
to use all other Intellectual Property used in or necessary to conduct such
Grantor’s business free and clear of all Liens, claims, encumbrances and
material licenses, granted by such Grantor, except for Liens permitted by
Section 6.02 of the Credit Agreement and the Intellectual Property Licenses set
forth on Schedule VI (as such schedule may be amended or supplemented
from time to time), in each case except as could not reasonably be expected to
have a Material Adverse Effect;

 

(iv)  as of the Effective Date or, if later, the
date such Grantor becomes a party hereto, all Intellectual Property owned by
such Grantor and licensed to such Grantor: (i) is subsisting, (ii) is valid and
enforceable, and (iii) has not been adjudged invalid or unenforceable, in whole
or in part, and such  Grantor has
performed all acts and has paid all renewal, maintenance, and other fees and
taxes required to maintain each item of Intellectual Property set forth on Schedule
VI, in full force and effect, in each case except as could not reasonably
be expected to have a Material Adverse Effect;

 

(v)  except as could not reasonably be expected to
have a Material Adverse Effect, no action or proceeding before any court or
administrative authority is pending or, to the best of Grantor’s knowledge,
threatened against Grantor challenging such Grantor’s right to register, the
validity of, or such Grantor’s rights to own, use, or license any Intellectual
Property;

 

(vi)  such  Grantor
has been using statutory notice of registration in connection with such Grantor’s
use of registered Trademarks, proper marking practices in connection with the
use of Patents, and appropriate notice of copyright in connection with the
publication of Copyrights material to the business of such Grantor, except in
each case where the failure to do so could not reasonably be expected to have a
Material Adverse Effect;

 

(vii)  the conduct of such Grantor’s business does
not infringe upon any material trademark, patent, copyright, trade secret or
similar intellectual property right owned or controlled by a third party, and
no claim is pending, or to the best of such Grantor’s knowledge, threatened,
that the conduct of such Grantor’s business or the use of any Intellectual
Property owned or used by Grantor violates the asserted rights of any third
party, in each case except as could not reasonably be expected to have a
Material Adverse Effect; and

 

(viii)  no third party is, to the best of such  Grantor’s knowledge,  infringing upon, misappropriating or
otherwise violating any Intellectual Property owned or used by 

 

27

 

such Grantor, or any of such Grantor’s respective
licensees, and no claims of infringement or other violation have been asserted
by any Grantor that remain unresolved, except as could not reasonably be
expected to have a Material Adverse Effect.

 

(b)           Covenants and Agreements. Each  Grantor hereby covenants and agrees as
follows:

 

(i)  except for Copyrights the loss of which could
not reasonably be expected to have a Material Adverse Effect, such Grantor
shall, within thirty (30) days of the creation or acquisition of any
Copyrightable work, apply to register the Copyright in the United States
Copyright Office and such Grantor shall record such Grantor’s interest in any
exclusive license of a Copyright to such Grantor in the U.S. Copyright Office
within thirty (30) days of the execution of such license;

 

(ii)  such Grantor shall promptly notify the
Administrative Agent if such Grantor knows or has reason to know that any item
of Intellectual Property included in the Collateral that is in use and has more
than negligible value may become (a) abandoned or dedicated to the public or
placed in the public domain, (b) invalid or unenforceable, or (c) subject to
any adverse determination or development (including the institution of
proceedings) in any action or proceeding in the USPTO, the United States
Copyright Office, any state registry, any foreign counterpart of the foregoing,
or any court arbitral tribunal or regulatory agency, in each case if such event
could reasonably be expected to have a Material Adverse Effect;

 

(iii)  in the event that any Intellectual Property
owned by or exclusively licensed to any Grantor is infringed, misappropriated,
diluted or otherwise violated by a third party, such Grantor shall promptly
take all reasonable actions to stop such infringement, misappropriation,
dilution or other violation and to protect such Grantor’s exclusive rights in
such Intellectual Property including, but not limited to, the initiation of a
suit for injunctive relief and to recover damages, in each case except as could
not reasonably be expected to have a Material Adverse Effect;

 

(iv)  such Grantor shall, concurrently with any
delivery of financial statements under Sections 5.01(a) or (b) of the Credit
Agreement, report to the Administrative Agent of any and all of the
following:  (i) the filing by Grantor or
on such Grantor’s behalf of any application to register any Intellectual
Property, owned by such Grantor in whole or in part, with the USPTO, the United
States Copyright Office, any state registry or any foreign counterpart of the
foregoing, (ii) the registration of any Intellectual Property owned by Grantor
in whole or in part by any such office, and (iii) the acquisition by such
Grantor of any issued Patent, or application or registration of any other
Intellectual Property, and, in each case, such Grantor shall deliver to the
Administrative Agent signed counterparts of the Trademark Security Agreement,
Patent Security Agreement, or Copyright Security Agreement, as applicable,
together with all Supplements to the Schedules thereto;

 

(v)  such Grantor shall use commercially
reasonable efforts to avoid the inclusion in any Patent License, Copyright
License, Trademark License, Trade Secret License or any other Contract
regarding Intellectual Property to which such Grantor hereafter becomes a
party, of provisions that would prevent the creation of a security interest in,
or the assignment of, such Grantor’s rights and interests under such Contract
or in any Intellectual Property acquired under such Contracts; and

 

(vi)  such Grantor shall use statutory notice of
registration in connection with such Grantor’s use of any of any registered
Trademarks, proper marking practices in connection 

 

28

 

with the use of Patents, and appropriate notice of
copyright in connection with the publication of Copyrighted material, except as
could not reasonably be expected to have a Material Adverse Effect.

 

4.8          Commercial Tort Claims.

 

(a)           Representations and Warranties.
Each  Grantor party hereto hereby represents and
warrants, as of the Effective Date or, if later, the date such Grantor becomes
a party hereto, that Schedule VII (as such schedule may be amended or
supplemented from time to time) sets forth all Commercial Tort Claims in excess
of $100,000 of such  Grantor; and

 

(b)           Covenants and Agreements. Each  Grantor hereby covenants and agrees that
with respect to any Commercial Tort Claim in excess of $1,000,000 hereafter
arising such Grantor shall deliver to the Administrative Agent a completed
Pledge Supplement, substantially in the form of Annex I, together with
all applicable Supplements to Schedules thereto, identifying such new
Commercial Tort Claims.

 

SECTION 5          FURTHER ASSURANCES; ADDITIONAL
GRANTORS

 

5.1          Further Assurances.

 

(a)           Each
Grantor agrees that from time to time, upon the request of the
Administrative Agent and at the expense of such Grantor, that such Grantor
shall promptly Authenticate, execute and deliver all further instruments and
documents, and take all further action, that may be necessary or that the
Administrative Agent may reasonably request, in order to create and/or maintain
the validity, perfection or priority of and protect any security interest
granted or purported to be granted hereby or to enable the Administrative Agent
to exercise and enforce the Administrative Agent’s rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of
the foregoing, such  Grantor shall
(subject to the terms, conditions and restrictions in the Intercreditor
Agreement):

 

(i)  file such financing or continuation
statements, or amendments thereto, and execute and deliver such other
agreements, instruments, endorsements, powers of attorney or notices, as may be
necessary, or as the Administrative Agent may reasonably request, in order to
perfect and preserve the security interests granted or purported to be granted
hereby;

 

(ii)  upon the request of the Administrative Agent,
take all actions necessary to ensure the recordation of appropriate evidence of
the liens and security interest granted hereunder in Intellectual Property (a)
with any U.S. federal intellectual property registry in which said Intellectual
Property is registered or in which an application for registration is pending,
including, without limitation, the USPTO and the United States Copyright Office
and (b) with any state or foreign intellectual property registry in which said
Intellectual Property is registered or in which an application for registration
is pending;

 

(iii)  if an Event of Default has occurred and is
continuing, upon the request by the Administrative Agent, assemble all or part
of the Collateral as directed by the Administrative Agent and make such
Collateral available to the Administrative Agent at a place to be designated by
the Administrative Agent that is reasonably convenient to both parties and
allow inspection of the Collateral by the Administrative Agent, or persons
designated by the Administrative Agent; and

 

29

 

(iv)  if an Event of Default has occurred and is
continuing, at the Administrative Agent’s request, appear in and defend any
action or proceeding that may affect such Grantor’s title to or the
Administrative Agent’s security interest in all or any part of the Collateral.

 

(b)           Subject to the terms, conditions and
restrictions in the Intercreditor Agreement, each Grantor party hereto hereby authorizes the
Administrative Agent to take all steps the Administrative Agent deems
reasonably necessary to maintain and preserve the Collateral, consistent with
the Grantor’s obligations to do so hereunder, all at the Grantor’s expense.

 

(c)           Each
Grantor party
hereto hereby authorizes the filing of any financing statements or
continuation statements, and amendments to financing statements, or any similar
document in any jurisdictions and with any filing offices as the Administrative
Agent may determine, in the Administrative Agent’s sole discretion, are
necessary or advisable to perfect the security interest granted to the
Administrative Agent herein. Such financing statements may describe the
Collateral in the same manner as described herein or may contain an indication
or description of collateral that describes such property in any other manner
as the Administrative Agent may determine, in the Administrative Agent’s sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
security interest in the Collateral granted to the Administrative Agent herein,
including, without limitation, describing such property as “all assets” or “all
personal property”, whether now owned or hereafter acquired. Each  Grantor shall furnish to the
Administrative Agent from time to time statements and schedules further
identifying and describing the Collateral and such other reports in connection
with the Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

 

(d)           Subject to the terms, conditions and
restrictions in the Intercreditor Agreement, each  Grantor party
hereto hereby authorizes the Administrative Agent to modify this
Security Agreement after obtaining such Grantor’s approval of or signature to
such modification by amending Schedule VI (as such schedule may be
amended or supplemented from time to time) to include reference to any right,
title or interest in any existing Intellectual Property or any Intellectual
Property acquired or developed by any Grantor after the execution hereof.

 

5.2          Additional Grantors. From
time to time subsequent to the date hereof, additional Domestic Subsidiaries
may become parties hereto as Additional Grantors, by executing and delivering
to the Administrative Agent a completed Pledge Supplement, substantially in the
form of Annex II. Subject to delivery of any such counterpart agreement
to the Administrative Agent, notice of which is hereby waived by the Grantors,
each Additional Grantor shall be a Grantor and shall be as fully a party hereto
as if such Additional Grantor were an original signatory hereto. Each  Grantor expressly agrees that such Grantor’s
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Grantor hereunder, nor by any election of
Administrative Agent not to cause any Subsidiary of any  Grantor to become an Additional Grantor hereunder.
This Agreement shall be fully effective as to any Grantor that is or becomes a
party hereto regardless of whether any other Person becomes or fails to become
or ceases to be a Grantor hereunder.

 

SECTION 6          ADMINISTRATIVE AGENT APPOINTED
ATTORNEY-IN-FACT

 

6.1          Power of Attorney. Each  Grantor party hereto hereby irrevocably
appoints the Administrative Agent (such appointment being coupled with an
interest) as such Grantor’s attorney-in-fact, with full authority in the place
and stead of such Grantor and in the name of such Grantor, the Administrative
Agent or otherwise, from time to time in the Administrative Agent’s discretion
to take any action and to execute any instrument that the Administrative Agent
may deem reasonably necessary or advisable to accomplish the purposes of this
Security Agreement (in each case subject to the terms, conditions and
restrictions in the Intercreditor Agreement) including, without limitation, the
following:

 

30

 

(a)           to prepare, sign, and file for
recordation in any Intellectual Property registry, appropriate evidence of the
lien and security interest granted herein in the Intellectual Property in the
name of such Grantor as assignor or pledgor;

 

(b)           to take or cause to be taken all
actions necessary to perform, or cause performance of, any agreement contained
herein in accordance with Section 10, including, without limitation,
access to pay or discharge taxes or Liens (other than Liens permitted by
Section 6.02 of the Credit Agreement) levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Administrative Agent in
the Administrative Agent’s sole discretion, any such payments made by the
Administrative Agent to become obligations of such Grantor to the
Administrative Agent, due and payable immediately without demand; and

 

(c)           subject to the occurrence and during
the continuance of any Event of Default:

 

(i)  to obtain and adjust insurance required to be
maintained by such Grantor or paid to the Administrative Agent pursuant to the
Loan Documents;

 

(ii)  to ask for, demand, collect, sue for,
recover, compound, receive and give acquittance and receipts for moneys due and
to become due under or in respect of any of the Collateral;

 

(iii)  to receive, endorse and collect any drafts or
other instruments, documents and chattel paper in connection with Section 6.1(b);

 

(iv)  to file any claims or take any action or
institute any proceedings that the Administrative Agent may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Administrative Agent with respect to any of the Collateral;
and

 

(v)  to sell, transfer, assign, lease, license,
pledge, make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent were the
absolute owner thereof for all purposes, and to do, at the Administrative Agent’s
option and such Grantor’s expense, at any time or from time-to-time, all acts
and things that the Administrative Agent deems reasonably necessary to protect,
preserve, or realize upon the Collateral and the Administrative Agent’s
security interest therein as fully and effectively as such Grantor might do.

 

(d)           The powers conferred on the
Administrative Agent hereunder are solely to protect the Administrative Agent’s
interest in the Collateral and the interests of the Secured Parties and shall
not impose any duty upon such Grantor to exercise any such powers. Except for
the exercise of reasonable care in the custody of any Collateral in the
Administrative Agent’s possession and the accounting for moneys actually
received by such Grantor hereunder, the Administrative Agent shall, subject to
the terms, conditions and restrictions in the Intercreditor Agreement, have no
duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in the
Administrative Agent’s possession if such Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords the
Administrative Agent’s own property. Neither the Administrative Agent nor any
of the 

 

31

 

Administrative Agent’s
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part of the Collateral or for any delay in
doing so.

 

SECTION 7          REMEDIES

 

7.1          Generally.

 

(a)           If any Event of Default shall have
occurred and be continuing, subject to the terms, conditions and restrictions
in the Intercreditor Agreement the Administrative Agent may exercise in respect
of the Collateral, in addition to all other rights and remedies provided for
herein or otherwise available to the Administrative Agent at law or in equity,
all the rights and remedies of the Administrative Agent on default under the
UCC (whether or not the UCC applies to the affected Collateral) to collect,
enforce or satisfy any Secured Obligations then owing, whether by acceleration
or otherwise, and also may (subject in each case to the Intercreditor
Agreement) pursue any of the following separately, successively or
simultaneously:

 

(i)  require any Grantor to, and each  Grantor hereby agrees that such Grantor
shall at such Grantor’s expense and promptly upon request of the Administrative
Agent forthwith, assemble all or part of the Collateral as directed by the
Administrative Agent and make the Collateral available to the Administrative
Agent at a place to be designated by the Administrative Agent that is
reasonably convenient to both parties;

 

(ii)  enter onto the property where any Collateral
is located and take possession thereof with or without judicial process;

 

(iii)  prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Administrative Agent
deems appropriate; provided, that, processed, reconditioned, or repaired
products that are sold under the Grantor’s Trademarks shall be of at least
substantially comparable quality to the same products those sold under such
Trademarks at the time of the Event of Default, and shall, if applicable, be
labeled as “reconditioned”, or the like, to the extent required by law; and

 

(iv)  without notice, except as specified below or
under the UCC, sell, assign, lease, license (on an exclusive or nonexclusive
basis, to the extent the Grantor has the lawful right to do so), or otherwise
dispose of the Collateral or any part thereof in one or more parcels at public
or private sale, at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, at such time or times and at such price
or prices and upon such other terms as may be commercially reasonable.

 

(b)           Subject in each case to the terms,
conditions and restrictions in the Intercreditor Agreement, the Administrative
Agent or any Secured Party may be the purchaser of any or all of the Collateral
at any public or private (to the extent the portion of the Collateral being
privately sold is of a kind that is customarily sold on a recognized market or
the subject of widely distributed standard price quotations) sale in accordance
with the UCC and the Administrative Agent, as Administrative Agent for and
representative of the Secured Parties, 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 sale made in accordance with the
UCC, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by the Administrative Agent at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of any Grantor, and  each  Grantor
party hereto hereby
waives (to the extent permitted by applicable law) all 

 

32

 

rights of redemption,
stay and/or appraisal which such Grantor now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Each  Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten (10) days notice
to such Grantor of the time and place of any public sale or the time after
which any private sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Administrative Agent may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which such sale was so adjourned. Each  Grantor agrees that it would not be
commercially unreasonable for the Administrative Agent to dispose of the
Collateral or any portion thereof by using Internet sites that provide for the
auction of assets of the types included in the Collateral or that have the
reasonable capability of doing so, or that match buyers and sellers of assets. Each  Grantor party hereto hereby waives any claims
against the Administrative Agent arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the
Administrative Agent accepts the first offer received and does not offer such
Collateral to more than one offeree. If the Proceeds of any sale or other
disposition of the Collateral are insufficient to pay all the Secured Obligations,
each  Grantor shall be liable for
the deficiency and the fees of any attorneys employed by the Administrative
Agent to collect such deficiency. Each  Grantor
further agrees that a breach of any of the covenants contained in this Section
7.1(b) will cause irreparable injury to the Administrative Agent, that the
Administrative Agent has no adequate remedy at law in respect of such breach
and, as a consequence, that each and every covenant contained in this Section
7.1(b) shall be specifically enforceable against such Grantor, and each
Grantor hereby waives and agrees not to assert any defenses against an action
for specific performance of such covenants except for a defense that no default
has occurred giving rise to the Secured Obligations becoming due and payable
prior to their stated maturities. Nothing in this Section 7.1(b) shall
in any way alter the rights of the Administrative Agent hereunder.

 

(c)           Subject to the terms, conditions and
restrictions in the Intercreditor Agreement, the Administrative Agent may sell
the Collateral without giving any warranties as to the Collateral. The
Administrative Agent may specifically disclaim or modify any warranties of
title or the like. This procedure will not be considered to adversely effect
the commercial reasonableness of any sale of the Collateral.

 

(d)           The Administrative Agent shall have
no obligation to marshal any of the Collateral.

 

7.2          Application of Proceeds. Subject to the terms,
conditions and restrictions in the Intercreditor Agreement, all Proceeds
received by the Administrative Agent in respect of any sale, any collection
from, or other realization upon all or any part of the Collateral shall be
applied in full or in part by the Administrative Agent against, the Secured
Obligations in the following order of priority: 
first, to the payment of all reasonable, out-of-pocket costs and
expenses of such sale, collection or other realization, including reasonable
compensation to the Administrative Agent and the Administrative Agent’s agents
and counsel, and all other reasonable, out-of-pocket expenses, liabilities and
advances made or incurred by the Administrative Agent in connection therewith,
and all amounts for which the Administrative Agent is entitled to
indemnification hereunder (in the Administrative Agent’s capacity as the
Administrative Agent) and all advances made by the Administrative Agent
hereunder in accordance with the terms hereof for the account of the applicable
Grantor, and to the payment of all costs and expenses paid or incurred by the
Administrative Agent in connection with the exercise of any right or remedy
hereunder or under any Loan Document, 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 Secured Obligations for the ratable benefit of each  Secured Party in the order set forth in
Section 2.16 of the Credit Agreement, and third, to the extent of any
excess of such Proceeds, to the payment to or subject to the order of such 

 

33

 

Grantor or to whosoever
may be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.

 

7.3          Sales on Credit. If Administrative Agent
sells any of the Collateral upon credit, Grantor will be credited only with
payments actually made by purchaser and received by Administrative Agent and
applied to Indebtedness of the Grantor. In the event the purchaser fails to pay
for the Collateral, Administrative Agent may resell the Collateral and Grantor
shall be credited with Proceeds of the sale.

 

7.4          Investment Related Property.

 

(a)           Each
Grantor recognizes that, by reason of certain prohibitions contained
in the Securities Act of 1933 and applicable state securities laws, the
Administrative Agent may be compelled, with respect to any sale of all or any
part of the Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Each  Grantor acknowledges
that any such private sale may be at prices and on terms less favorable than
those obtainable through a public sale without such restrictions (including a
public offering made pursuant to a registration statement under the Securities
Act); provided, that, notwithstanding such circumstances, each  Grantor agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner and that
the Administrative Agent shall have no obligation to engage in public sales and
no obligation to delay the sale of any Investment Related Property for the
period of time necessary to permit the issuer thereof to register the
Investment Related Property for a form of public sale requiring registration
under the Securities Act or under applicable state securities laws, even if
such issuer would, or should, agree to so register it. If the Administrative
Agent determines to exercise the Administrative Agent’s right to sell any or
all of the Investment Related Property, subject to written request, each  Grantor shall, and shall cause each issuer
of any Pledged Stock to be sold hereunder, each partnership and each limited
liability company from time to time to, furnish to the Administrative Agent all
such information as the Administrative Agent may request in order to determine
the number and nature of interest, shares or other instruments included in the
Investment Related Property which may be sold by the Administrative Agent in
exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.

 

(b)           Subject to the terms, conditions and
restrictions in the Intercreditor Agreement and subject to the occurrence and
during the continuation of an Event of Default, the Administrative Agent shall
have the right to apply the balance from any Deposit Account to the Secured
Obligations or instruct the bank at which any Deposit Account is maintained to
pay the balance of any Deposit Account to or for the benefit of the
Administrative Agent for application to the Secured Obligations.

 

7.5          Intellectual Property, etc.

 

(a)           Anything contained herein to the
contrary notwithstanding, subject to the terms, conditions and restrictions in
the Intercreditor Agreement and subject to the occurrence and during the continuation
of an Event of Default:

 

(i)  the Administrative Agent shall have the right
(but not the obligation) to bring suit or otherwise commence any action or
proceeding in the name of any Grantor, the Administrative Agent or otherwise,
in the Administrative Agent’s sole discretion, to enforce any 

 

34

 

Intellectual Property which is included in the
Collateral, in which event, such Grantor shall, at the request of the
Administrative Agent, do any and all lawful acts and execute any and all
documents required by the Administrative Agent in aid of such enforcement and
such Grantor shall promptly, upon demand, reimburse and indemnify the
Administrative Agent as provided in the Section in this Security Agreement
relating to indemnity and expenses (Section 11) in connection with the
exercise of the Administrative Agent’s rights under this Section 7.5;

 

(ii)  upon written demand from the Administrative
Agent, each  Grantor shall assign,
convey or otherwise transfer to the Administrative Agent, or the Administrative
Agent’s designee, all of such Grantor’s right, title and interest in and to the
Intellectual Property included in the Collateral, and shall execute and deliver
to the Administrative Agent such documents as are necessary to effectuate and
record such assignment, conveyance, or transfer of, or other evidence of
foreclosure upon, such Intellectual Property;

 

(iii)  in the event of any assignment, conveyance or
other transfer of any of the Trademarks included in the Collateral, the
goodwill symbolized by any such Trademarks shall be included in such sale or
transfer, and each Grantor shall supply to the Administrative Agent or the
Administrative Agent’s designee such Grantor’s reasonably available
manufacturing, advertising, and distribution know-how, and copies of records
embodying such know-how, relating to products and services theretofore sold
under such Trademarks;

 

(iv)  each  Grantor
agrees that an assignment, conveyance, or transfer of any Intellectual Property
included in the Collateral shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Administrative Agent receives Cash
Proceeds in respect of such assignment, conveyance, or other transfer of the
Intellectual Property;

 

(v)  the Administrative Agent shall have the right
to notify, or require each  Grantor
to notify, any obligors with respect to payments due or to become due to such
Grantor in respect of the Intellectual Property, of the existence of the
security interest created herein, to direct such obligors to make payment of
all such amounts directly to the Administrative Agent, and, upon such
notification and at the expense of such Grantor, to enforce collection of any
such amounts and to adjust, settle or compromise the amount of such payment, to
the same extent as such Grantor could have done;

 

(vi)  all amounts and Proceeds (including checks
and other instruments) received by any Grantor in respect of amounts due to
such Grantor in respect of the Collateral or any portion thereof shall be
received in trust for the benefit of the Administrative Agent hereunder, shall
be segregated from other funds of such Grantor and shall be forthwith paid over
or delivered to the Administrative Agent in the same form as so received (with
any necessary endorsement) to be held as cash Collateral and applied as
provided by the Section in this Security Agreement relating to Cash Proceeds (Section
7.6); and

 

(vii)  after notice from the Administrative Agent,
no Grantor  shall adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.

 

(b)           Subject to the terms, conditions and
restrictions of the Intercreditor Agreement, if (i) an Event of Default shall
have occurred and, by reason of cure, waiver, modification, amendment or
otherwise, no longer be continuing, (ii) no other Event of Default shall have
occurred and be continuing, (iii) an assignment or other transfer to the Administrative
Agent of any rights, title and interests in and to the Intellectual Property
shall have been previously made and shall have become 

 

35

 

absolute and effective,
and (iv) the Secured Obligations shall not have become immediately due and
payable, upon the written request of any  Grantor,
the Administrative Agent shall promptly execute and deliver to such Grantor, at
such Grantor’s sole cost and expense, such assignments or other transfer as may
be necessary to reassign to such Grantor any such rights, title and interests
as may have been assigned to the Administrative Agent as aforesaid, subject to
any disposition thereof (including a lease or license) that may have been made
by the Administrative Agent; provided, that, after giving effect to such
reassignment, the Administrative Agent’s security interest granted pursuant
hereto, as well as all other rights and remedies of the Administrative Agent
granted hereunder, shall continue to be in full force and effect; provided
further, that, the rights, title and interests so reassigned shall be free and
clear of any Liens granted by or on behalf of the Administrative Agent.

 

(c)           Subject to the terms, conditions and
restrictions of the Intercreditor Agreement and solely for the purpose of
enabling the Administrative Agent to exercise rights and remedies under this Section
7, at such time as the Administrative Agent shall be lawfully entitled to
exercise such rights and remedies, each  Grantor
party hereto hereby
grants to the Administrative Agent, to the extent such Grantor has the lawful
right to do so, an irrevocable, non-exclusive worldwide license (exercisable
without payment of royalty or other compensation to such Grantor), to use,
operate under, license, or sublicense any Intellectual Property now or
hereafter owned by or licensed to such Grantor, subject, in the case of
Trademarks, to the maintenance of quality standards with respect to the
products and services sold under such Trademarks at a level at least substantially
comparable to that prevailing at the time of Event of Default. The foregoing
license grant to the Administrative Agent is in addition to, and not in
limitation of, the Administrative Agent’s rights and remedies pursuant to Section
7.1 and Section 6.1.

 

SECTION 8          ADMINISTRATIVE AGENT

 

The Administrative Agent has been appointed to act as Administrative
Agent hereunder by each  Secured
Party either pursuant to the Loan Documents or by their acceptance of the
benefits hereof. The Administrative Agent shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Security Agreement, the Intercreditor Agreement
and the Credit Agreement. Without the written consent of the Secured Parties
that would be directly and adversely affected thereby, no amendment,
modification, termination, or consent shall be effective if the effect thereof
would release all or substantially all of the Collateral except as expressly
provided herein. In furtherance of the foregoing provisions of this Section
8, each Secured Party, by such Secured Party’s acceptance of the benefits
hereof, agrees that such Secured Party shall have no right individually to
realize upon any of the Collateral hereunder, it being understood and agreed by
such Secured Party that all rights and remedies hereunder may be exercised
solely by the Administrative Agent for the benefit of each Secured Party in
accordance with the terms of this Section 8. Upon the acceptance of any
appointment as Administrative Agent under the terms of the Credit Agreement by
a successor Administrative Agent, that successor Administrative Agent shall
thereby also be deemed the successor Administrative Agent and such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent
under this Security Agreement, and, subject to the terms, conditions and
restrictions of the Intercreditor Agreement, the retiring Administrative Agent
under this Security Agreement shall promptly (i) transfer to such successor
Administrative Agent all sums, Securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Administrative Agent under this Security Agreement, 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 

 

36

 

hereunder, whereupon such retiring or removed Administrative Agent
shall be discharged from the Administrative Agent’s duties and obligations
under this Security Agreement. After any retiring or removed Administrative
Agent’s resignation or removal hereunder as the Administrative Agent, the
provisions of this Security Agreement shall inure to the Administrative Agent’s
benefit as to any actions taken or omitted to be taken by the Administrative
Agent under this Security Agreement while the Administrative Agent was the
Administrative Agent hereunder.

 

SECTION 9                               CONTINUING
SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS

 

This Agreement
shall create a continuing security interest in the Collateral and shall remain
in full force and effect until the payment in full in cash of all Secured
Obligations, the cancellation or termination of the commitments and any other
contingent obligation included in the Secured Obligations (other than
Unliquidated Obligations) and the cash collateralization of Unliquidated
Obligations to the extent required by Section 9.02(d) of the Credit Agreement,
be binding upon each  Grantor, such
Grantor’s successors and assigns, and inure, together with the rights and
remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent and the Administrative Agent’s successors, transferees and
assigns. Without limiting the generality of the foregoing, but subject to the
terms, conditions and restrictions of the Loan Documents, including but not
limited to the Intercreditor Agreement,, each Secured Party may assign or
otherwise transfer any Secured Obligations held by such Secured Party to any
other Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to each  Secured
Party herein or otherwise. Subject to the terms, conditions and restrictions of
the Intercreditor Agreement, upon the payment in full in cash of all Secured Obligations,
the cancellation or termination of the commitments and any other contingent
obligation included in the Secured Obligations (other than Unliquidated
Obligations) and the cash collateralization of Unliquidated Obligations to the
extent required by Section 9.02(d) of the Credit Agreement, the security
interest granted hereby shall terminate hereunder and of record and all rights
to the Collateral shall revert and be deemed reassigned to Grantors. Upon any
such termination, the Administrative Agent shall, at the Grantors’ request and
expense, execute and deliver to Grantors  such
documents as Grantors shall reasonably request to evidence such termination
reversions and/or reassignment, without recourse, representation, or warranty
of any kind; provided, that, notwithstanding the provisions of this Section
9, this Security Agreement shall continue to be effective or be reinstated,
as the case may be, if at any time any amount received by any Secured Party in
respect of the Secured Obligations is rescinded or must otherwise be restored
or returned by any such Secured Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of any Grantor or upon the
appointment of any intervener or conservator of, or trustee or similar official
for any Grantor, or any substantial part of their respective properties, or
otherwise, all as though such payments had not been made.

 

SECTION
10        STANDARD OF CARE; ADMINISTRATIVE
AGENT MAY PERFORM

 

The powers
conferred on the Administrative Agent hereunder are solely to protect the
Administrative Agent’s interest in the Collateral and the interests of the
Secured Parties and shall not impose any duty upon the Administrative Agent to
exercise any such powers. Subject to the terms, conditions and restrictions of
the Intercreditor Agreement,  except for
the exercise of reasonable care in the custody of any Collateral in the
Administrative Agent’s possession and the accounting for moneys actually
received by the Administrative Agent hereunder, the Administrative Agent shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. The Administrative Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in the
Administrative Agent’s possession if such Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords the
Administrative Agent’s own property. Neither the Administrative Agent nor any
of the 

 

37

 

Administrative Agent’s directors, officers, employees or agents shall
be liable for failure to demand, collect or realize upon all or any part of the
Collateral or for any delay in doing so or shall be under any obligation to
sell or otherwise dispose of any Collateral subject to the request of any
Grantor or otherwise. If any Grantor fails to perform any agreement contained
herein, the Administrative Agent may perform, or cause performance of, such
agreement, and the expenses of the Administrative Agent incurred in connection
therewith shall be payable by such  Grantor
under the Section in this Security Agreement relating to the payment of
expenses (Section 12.2).

 

SECTION
11        INDEMNITY AND EXPENSES

 

(a)           Each
Grantor jointly and severally agrees to indemnify the Administrative
Agent and each of the Administrative Agent’s Related Parties pursuant to the
terms set forth in Section 9.03(b) of the Credit Agreement.

 

(b)           The obligations of each  Grantor in this Section 11
shall survive the termination of this Security Agreement and the discharge of
such Grantor’s other obligations under this Security Agreement, the Credit
Agreement, the Swap Agreements and any other Loan Documents.

 

SECTION
12        MISCELLANEOUS

 

12.1        Notices. All notices and other communications provided for
herein shall be shall be made at the addresses, in the manner and with the
effect provided in Section 9.01 of the Credit Agreement; provided, that, that
for this purpose, the address of each Grantor shall be the one specified
opposite the Grantor’s signature below.

 

12.2        Expenses. Each  Grantor
jointly and severally agrees to pay all expenses in connection herewith
pursuant to the terms set forth in Section 9.03(a) of the Credit Agreement.

 

12.3        Amendments and Waivers.

 

(a)           Administrative Agent’s Consent.
Other than as set forth in Section 5.2 and subject to Section 12.3(b),
no amendment, modification, termination or waiver of any provision of this
Security Agreement, or consent to any departure by any Grantor therefrom, shall
in any event be effective without the written concurrence of the Administrative
Agent (made in accordance with Section 9.02 of the Credit Agreement).

 

(b)           No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent in the exercise of
any power, right or privilege hereunder or under any other Loan 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. All rights, powers and remedies
existing under this Security Agreement and the other Loan Documents are
cumulative, and not exclusive of, any rights or remedies otherwise available.
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 the Administrative Agent
preclude the further exercise of any such right, power or remedy.

 

12.4        Successors and Assigns. This Agreement shall be
binding upon the parties hereto and their respective successors and permitted
assigns including all persons who become bound as debtor to this Security
Agreement. No  Grantor shall,
without the prior written consent of the Administrative Agent, assign any
right, duty or obligation hereunder, it being understood that mergers 

 

38

 

and consolidations
permitted by Section 6.03 of the Credit Agreement shall not be deemed an
assignment for purposes of this sentence.

 

12.5        Survival of Representations, Warranties
and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof; provided, that, notwithstanding anything herein
or implied by law to the contrary, the agreements of each  Grantor set forth in Section 11 and
Section 12.2 shall survive the payment of the Secured Obligations and
the termination hereof.

 

12.6        Marshaling; Payments Set Aside. Subject to the terms,
conditions and restrictions of the Intercreditor Agreement, Administrative
Agent shall not be under any obligation to marshal any assets in favor of any
Grantor or any other Person or against or in payment of any or all of the
Secured Obligations.

 

12.7        Severability. In case any provision in
or obligation hereunder 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.

 

12.8        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.

 

12.9        GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

 

12.10      CONSENT TO JURISDICTION.

 

(a)           EACH GRANTOR PARTY HERETO
HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR SUCH GRANTOR AND SUCH
GRANTOR’S PROPERTIES, TO THE NONEXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR
NEW YORK STATE COURT SITTING IN NEW YORK COUNTY IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT
OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT
OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT
ANY RIGHT THAT THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AGAINST ANY GRANTOR OR SUCH GRANTOR’S PROPERTIES IN THE COURTS OF ANY
JURISDICTION.

 

(b)           Each Grantor
party hereto hereby irrevocably and unconditionally waives, to the fullest
extent such Grantor may legally and effectively do so, any objection which such
Grantor may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Security Agreement in any court
referred to in Section 12.10(a). Each of the parties 

 

39

 

hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

 

(c)           Each party to this Security Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 12.1. Nothing in this Security Agreement will affect the
right of any party to this Security Agreement to serve process in any other
manner permitted by law.

 

12.11      WAIVER OF JURY TRIAL. EACH PARTY HERETO
HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT SUCH PARTY AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.

 

12.12      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.

 

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

 

12.14      Entire Agreement. This Agreement and the
other Loan Documents embody the entire agreement and understanding between each
Grantor party hereto and the Administrative Agent and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. Accordingly, the Loan Documents may not be
contradicted by evidence of prior, contemporaneous or subsequent oral
agreements of the parties. There are no unwritten oral agreements between the
parties.

 

12.15      Certain Grantors Not Parties. To the extent that any
covenant contained herein purports to bind any Grantor that is not a party
hereto, each such covenant shall be deemed to be a covenant of the Grantors
party hereto to comply with the terms of such covenant and to cause each
Grantor controlled by such covenant that is not a party hereto to comply with
the terms of such covenant as if such Grantor were a Grantor party hereto.

 

12.16      Intercreditor Agreement. Notwithstanding
anything herein to the contrary, the Lien and security interest granted to the
Administrative Agent pursuant to this Security Agreement and the exercise of
any right or remedy by the Administrative Agent hereunder is subject to the
terms, conditions and provisions of the Intercreditor Agreement in all respects.
In the event of any conflict between the terms of the Intercreditor Agreement
and this Security Agreement, the terms of the Intercreditor Agreement shall
govern and control; provided, that, this Agreement shall govern with regard to
matters set forth in Section 2 in the event of any conflict relating
thereto. With respect to the Liens and security interests securing the
Indebtedness and other Obligations incurred or arising under or evidenced by
this instrument and the rights and Obligations evidenced hereby with respect to
the priority of such 

 

40

 

Liens in the manner and
to the extent set forth in the Intercreditor Agreement, each holder of the
Obligations, by its acceptance hereof, irrevocably agrees to be bound by the
terms, conditions and provisions of the Intercreditor Agreement.

 

12.17      Parallel Debt. For the
purposes of taking and ensuring the continuing validity of security (“Parallel Debt Security”) under
the Collateral Documents subject to the laws of (or to the extent affecting
assets situated in) Germany, notwithstanding any contrary provision in this
Security Agreement or the Credit Agreement:

 

(a)                                              subject to Section 12.17(d), each Loan Party irrevocably and
unconditionally undertakes (such undertakings, the “Parallel Obligations”) to pay
to the Administrative Agent amounts equal to all present and future amounts
(the “Original
Obligations”) owing by such Loan Party to a Secured Party under the Credit
Agreement;

 

(b)                                             subject to Section 12.17(d), the Administrative Agent shall
have its own independent right to demand and receive payment of the Parallel
Obligations;

 

(c)                                              subject to Section 12.17(d), the Parallel Obligations shall
not limit or affect the existence of the Original Obligations for which the
Secured Parties shall have an independent right to demand payment;

 

(d)                                             notwithstanding paragraphs (a), (b) and (c) of this Section 12.17,
payment by any Loan Party of its Parallel Obligations shall to the same extent decrease and be
a good discharge of the corresponding Original Obligations owing to the
relevant Secured Parties and payment by any Loan Party of its Original
Obligations to the relevant Secured Parties shall to the same extent decrease
and be a good discharge of the Parallel Obligations owing by it to the
Administrative Agent;

 

(e)                                              the Parallel Obligations are owed to the Administrative Agent in its
own name on behalf of itself and not as agent or representative of any other
person nor as trustee and the Parallel Debt Security shall secure the Parallel
Obligations so owing;

 

(f)                                                without limiting or affecting the Administrative Agent’s right to
protect, preserve or enforce its rights under any Collateral Document, the
Administrative Agent undertakes to each Secured Party not to exercise its
rights in respect of the Parallel Obligations without the consent of the
relevant Secured Party; and

 

(g)                                             the Administrative Agent undertakes to pay to the Secured Parties
any amount collected or received by it in payment or partial payment of the
Parallel Obligations and, subject to the terms, conditions and restrictions in
the Intercreditor Agreement, shall distribute any amount so received to the
Secured Parties in accordance with the terms of this Security Agreement as if
such amounts had been received in respect of the Original Obligations.

 

41

 

IN WITNESS WHEREOF,
each  Grantor party hereto and the
Administrative Agent have caused this Security Agreement to be duly executed
and delivered by their respective officers thereunto duly authorized as of the
date first written above.

 

	
   

  	
  TALECRIS
  BIOTHERAPEUTICS HOLDINGS CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hanson

  	
   

  
	
   

  	
   

  	
  Name: John
  Hanson

  
	
   

  	
   

  	
  Title: Exec
  VP & CFO, Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TALECRIS
  BIOTHERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hanson

  	
   

  
	
   

  	
   

  	
  Name: John
  Hanson

  
	
   

  	
   

  	
  Title: Exec
  VP & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PRECISION
  PHARMA SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hanson

  	
   

  
	
   

  	
   

  	
  Name: John
  Hanson

  
	
   

  	
   

  	
  Title: Exec
  VP & CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TALECRIS
  PLASMA RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  Hanson

  	
   

  
	
   

  	
   

  	
  Name: John
  Hanson

  
	
   

  	
   

  	
  Title:  Exec VP & CFO

  
							

 

 

	
   

  	
  MORGAN
  STANLEY SENIOR FUNDING, INC.

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John
  McCann

  	
   

  
	
   

  	
   

  	
  Name: John
  McCann

  
	
   

  	
   

  	
  Title: Vice President

  

 

 

SCHEDULE I

TO PLEDGE AND SECURITY AGREEMENT

 

[Schedules and Annexes Intentionally Omitted]Exhibit 10.14.1

 

ASSET PURCHASE AGREEMENT

 

BY AND AMONG

 

IBR-BYR L.L.C.,

 

INTERNATIONAL BIORESOURCES,
L.L.C.,

 

IBR PLASMA CENTERS, L.L.C.,

 

TALECRIS PLASMA RESOURCES, INC.

 

AND

 

TALECRIS BIOTHERAPEUTICS
HOLDINGS CORP.

 

October 31, 2006

 

 

Table of Contents

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  1.

  	
  Definitions

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Basic
  Transaction

  	
  1

  
	
   

  	
  (a)

  	
  Purchase and
  Sale of Acquired Assets

  	
  1

  
	
   

  	
  (b)

  	
  Assumption
  of Assumed Liabilities

  	
  1

  
	
   

  	
  (c)

  	
  Purchase
  Price

  	
  1

  
	
   

  	
  (d)

  	
  Working
  Capital & Related Adjustments

  	
  4

  
	
   

  	
  (e)

  	
  The Closing

  	
  8

  
	
   

  	
  (f)

  	
  Deliveries
  at the Closing

  	
  8

  
	
   

  	
  (g)

  	
  Allocation

  	
  8

  
	
   

  	
  (h)

  	
  Holdings
  Common Stock

  	
  9

  
	
   

  	
  (i)

  	
  Adjustments
  to Shares of Holdings Common Stock

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Representations
  and Warranties of the Acquired Asset Entities

  	
  14

  
	
   

  	
  (a)

  	
  Organization

  	
  14

  
	
   

  	
  (b)

  	
  Authorization
  of Transaction

  	
  15

  
	
   

  	
  (c)

  	
  Noncontravention

  	
  15

  
	
   

  	
  (d)

  	
  Brokers’
  Fees

  	
  15

  
	
   

  	
  (e)

  	
  Title to
  Assets

  	
  15

  
	
   

  	
  (f)

  	
  Financial
  Statements

  	
  16

  
	
   

  	
  (g)

  	
  Events
  Subsequent to Most Recent Financial Statements

  	
  16

  
	
   

  	
  (h)

  	
  Undisclosed
  Liabilities

  	
  18

  
	
   

  	
  (i)

  	
  Legal
  Compliance

  	
  18

  
	
   

  	
  (j)

  	
  Tax Matters

  	
  19

  
	
   

  	
  (k)

  	
  Real Property

  	
  20

  
	
   

  	
  (l)

  	
  Intellectual
  Property

  	
  23

  
	
   

  	
  (m)

  	
  Tangible
  Assets

  	
  26

  
	
   

  	
  (n)

  	
  Inventory

  	
  26

  
	
   

  	
  (o)

  	
  Contracts

  	
  26

  
	
   

  	
  (p)

  	
  Notes and
  Accounts Receivable

  	
  28

  
	
   

  	
  (q)

  	
  Powers of
  Attorney

  	
  28

  
	
   

  	
  (r)

  	
  Insurance

  	
  28

  
	
   

  	
  (s)

  	
  Litigation

  	
  29

  
	
   

  	
  (t)

  	
  Warranty

  	
  29

  
	
   

  	
  (u)

  	
  Liability

  	
  29

  
	
   

  	
  (v)

  	
  Employees

  	
  30

  
	
   

  	
  (w)

  	
  Employee
  Benefits

  	
  30

  
	
   

  	
  (x)

  	
  Guaranties

  	
  31

  
	
   

  	
  (y)

  	
  Environmental,
  Health, and Safety Matters

  	
  32

  
	
   

  	
  (z)

  	
  Certain
  Business Relationships With Affiliates

  	
  33

  
	
   

  	
  (aa)

  	
  Books and
  Records

  	
  33

  
	
   

  	
  (bb)

  	
  Disclosure

  	
  33

  
	
   

  	
  (cc)

  	
  Undeveloped
  Centers

  	
  33

  
	
   

  	
  (dd)

  	
  Investment

  	
  33

  

 

i

 

	
  4.

  	
  Representations
  and Warranties of the Buyer and Holdings

  	
  34

  
	
   

  	
  (a)

  	
  Organization

  	
  34

  
	
   

  	
  (b)

  	
  Authorization
  of Transaction

  	
  34

  
	
   

  	
  (c)

  	
  Noncontravention

  	
  34

  
	
   

  	
  (d)

  	
  Brokers’
  Fees

  	
  35

  
	
   

  	
  (e)

  	
  Pro Forma
  Capitalization; Capitalization

  	
  35

  
	
   

  	
  (f)

  	
  Financial
  Statements

  	
  36

  
	
   

  	
  (g)

  	
  Events
  Subsequent to Most Recent Financial Statements

  	
  36

  
	
   

  	
  (h)

  	
  Undisclosed
  Liabilities

  	
  36

  
	
   

  	
  (i)

  	
  Legal
  Compliance

  	
  36

  
	
   

  	
  (j)

  	
  Litigation

  	
  37

  
	
   

  	
  (k)

  	
  Books and
  Records

  	
  37

  
	
   

  	
  (l)

  	
  Disclosure

  	
  37

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Pre-Closing
  Covenants

  	
  37

  
	
   

  	
  (a)

  	
  General

  	
  37

  
	
   

  	
  (b)

  	
  Human
  Resources Matters

  	
  37

  
	
   

  	
  (c)

  	
  Notices and
  Consents

  	
  38

  
	
   

  	
  (d)

  	
  Operation of
  Business

  	
  38

  
	
   

  	
  (e)

  	
  Preservation
  of Business

  	
  38

  
	
   

  	
  (f)

  	
  Access;
  Interim Financial Statements

  	
  39

  
	
   

  	
  (g)

  	
  Notice of
  Developments

  	
  40

  
	
   

  	
  (h)

  	
  Exclusivity

  	
  40

  
	
   

  	
  (i)

  	
  Maintenance
  of Leased Real Property

  	
  40

  
	
   

  	
  (j)

  	
  Leases

  	
  40

  
	
   

  	
  (k)

  	
  Title
  Insurance

  	
  41

  
	
   

  	
  (l)

  	
  Non-Disturbance
  Agreements

  	
  41

  
	
   

  	
  (m)

  	
  Advances
  Against Purchase Price

  	
  42

  
	
   

  	
  (n)

  	
  Recapitalization

  	
  43

  
	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Post-Closing
  and Other Covenants

  	
  43

  
	
   

  	
  (a)

  	
  General

  	
  43

  
	
   

  	
  (b)

  	
  Litigation
  Support

  	
  43

  
	
   

  	
  (c)

  	
  Transition

  	
  43

  
	
   

  	
  (d)

  	
  Confidentiality

  	
  44

  
	
   

  	
  (e)

  	
  Restrictive
  Covenants

  	
  44

  
	
   

  	
  (f)

  	
  Consent of
  Third Parties

  	
  45

  
	
   

  	
  (g)

  	
  Employee
  Matters

  	
  46

  
	
   

  	
  (h)

  	
  Options Upon
  Failure to Obtain Certain Lease Documents

  	
  48

  
	
   

  	
  (i)

  	
  Development
  and Certain Renovation Costs

  	
  50

  
	
   

  	
  (j)

  	
  Additional
  Centers

  	
  50

  
	
   

  	
  (k)

  	
  Covenants Regarding
  Holdings Common Stock

  	
  51

  
	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Conditions
  to Obligation to Close

  	
  51

  
	
   

  	
  (a)

  	
  Conditions
  to Obligation of the Buyer and Holdings

  	
  51

  
	
   

  	
  (b)

  	
  Conditions
  to Obligation of the Acquired Asset Entities

  	
  55

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Remedies for
  Breaches of this Agreement

  	
  56

  
	
   

  	
  (a)

  	
  Survival of
  Representations and Warranties

  	
  56

  

 

ii

 

	
   

  	
  (b)

  	
  Indemnification
  Provisions for the Benefit of the Buyer and Holdings

  	
  57

  
	
   

  	
  (c)

  	
  Indemnification
  Provisions for the Benefit of the Acquired Asset Entities

  	
  58

  
	
   

  	
  (d)

  	
  Matters
  Involving Third Parties

  	
  58

  
	
   

  	
  (e)

  	
  Determination
  of Adverse Consequences

  	
  59

  
	
   

  	
  (f)

  	
  Limitations
  on Indemnification

  	
  59

  
	
   

  	
  (g)

  	
  Recoupment
  Under the Escrow Agreement

  	
  60

  
	
   

  	
  (h)

  	
  Right of
  Setoff

  	
  61

  
	
   

  	
  (i)

  	
  Sole Remedy

  	
  61

  
	
   

  	
  (j)

  	
  Insurance
  and Tax Benefits

  	
  61

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Termination

  	
  62

  
	
   

  	
  (a)

  	
  Termination
  Agreement

  	
  62

  
	
   

  	
  (b)

  	
  Effect of
  Termination

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Miscellaneous

  	
  62

  
	
   

  	
  (a)

  	
  Press Releases
  and Public Announcements

  	
  63

  
	
   

  	
  (b)

  	
  No
  Third-Party Beneficiaries

  	
  63

  
	
   

  	
  (c)

  	
  Entire
  Agreement

  	
  63

  
	
   

  	
  (d)

  	
  Succession
  and Assignment

  	
  63

  
	
   

  	
  (e)

  	
  Counterparts

  	
  63

  
	
   

  	
  (f)

  	
  Headings

  	
  63

  
	
   

  	
  (g)

  	
  Notices

  	
  63

  
	
   

  	
  (h)

  	
  Governing
  Law

  	
  64

  
	
   

  	
  (i)

  	
  Amendments
  and Waivers

  	
  65

  
	
   

  	
  (j)

  	
  Severability

  	
  65

  
	
   

  	
  (k)

  	
  Expenses

  	
  65

  
	
   

  	
  (l)

  	
  Construction

  	
  65

  
	
   

  	
  (m)

  	
  Incorporation
  of Exhibits and Schedules

  	
  65

  
	
   

  	
  (n)

  	
  Specific
  Performance

  	
  65

  
	
   

  	
  (o)

  	
  Submission
  to Jurisdiction

  	
  66

  
	
   

  	
  (p)

  	
  Further Assurances

  	
  66

  
	
   

  	
  (q)

  	
  Tax Matters

  	
  67

  
	
   

  	
  (r)

  	
  Waiver of
  Jury Trial

  	
  67

  

 

Exhibits
and Schedules

 

	
  Exhibit A—
  Definitions

  
	
  Exhibit B—
  Escrow Agreement

  
	
  Exhibit C—
  Milestone Payments

  
	
  Exhibit D—
  Working Capital

  
	
  Exhibit E—
  Bill of Sale

  
	
  Exhibit F—
  Allocation Schedule

  
	
  Exhibit F-1—
  Buyer’s Disclosure Schedule

  
	
  Exhibit G—
  Holdings Pro Forma Capitalization Table

  
	
  Exhibit H—
  Parent Financial Statements

  
	
  Exhibit I—
  Human Resource Systems

  
	
  Exhibit J—
  Specifications for Undeveloped Centers (including freezer specifications)

  
	
  Exhibit K—
  Other Employees

  
	
  Exhibit L—
  Thirteen-Week Cash Flow Forecast

  

 

iii

 

	
  Exhibit L-1—
  Permitted Interest Expense

  
	
  Exhibit M—
  Restricted Area

  
	
  Exhibit M-1
  — Retained Employees

  
	
  Exhibit M-2—
  New Leases

  
	
  Exhibit N—
  Development Costs

  
	
  Exhibit O—
  Specifications for Additional Centers

  
	
  Exhibit P—
  Joinder to Restrictive Covenants

  
	
  Exhibit Q—
  Regulatory Transition Agreement

  
	
  Exhibit R—
  Stockholders Agreement

  
	
  Exhibit S—
  Profit-Sharing Agreement

  
	
  Exhibit T—
  License Agreement

  
	
  Exhibit T-1—
  Termination and Waiver Agreement

  
	
  Exhibit T-2—
  Acquired Contracts

  
	
  Exhibit U—
  IT Transition Services Agreement

  
	
  Exhibit V—
  Leases to be Amended

  
	
  Exhibit W—
  Open Centers

  
	
  Exhibit X—
  Undeveloped Centers

  
	
  Exhibit Y—
  Unlicensed Centers

  
	
  Exhibit Z—
  Form 8594

  
	
  Disclosure
  Schedule — Exceptions to the Acquired Asset Entities’ Representations and Warranties

  

 

iv

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase
Agreement (this “Agreement”) is made and entered into on October 31,
2006, by and among IBR-BYR L.L.C., a Louisiana limited liability company (“IBR
BYR”), International BioResources, L.L.C., a Louisiana limited liability
company (the “Parent”), IBR Plasma Centers, L.L.C., a Louisiana limited
liability company (“IBR PC” and, collectively with IBR BYR and the
Parent, the “Acquired Asset Entities”), Talecris Biotherapeutics
Holdings Corp., a Delaware corporation (“Holdings”), and Talecris Plasma
Resources, Inc., a Delaware corporation (the “Buyer”).
The Buyer, Holdings and the Acquired Asset Entities sometimes are referred to
collectively herein as the “Parties.”

 

This Agreement sets forth
the terms and conditions upon which the Buyer is purchasing the Acquired Assets
(defined below) and assuming the Assumed Liabilities (defined below) from the
Acquired Asset Entities, and the Acquired Asset Entities are selling the
Acquired Assets and transferring only the Assumed Liabilities to the Buyer.

 

Now, therefore, in
consideration of the representations, warranties, and covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which the Parties hereby acknowledge, the Parties, intending to
be legally bound, hereby agree as follows.

 

1.                                       Definitions.  All capitalized terms used but not otherwise
defined herein shall have the meanings assigned to them in Exhibit A
hereto.

 

2.                                       Basic
Transaction.

 

(a)                                  Purchase
and Sale of Acquired Assets.  On and
subject to the terms and conditions of this Agreement, the Buyer agrees to
purchase from the Acquired Asset Entities, and the Acquired Asset Entities
agree to sell, transfer, convey, and deliver to the Buyer, all of the Acquired
Assets at the Closing for the consideration specified below in this §2.

 

(b)                                 Assumption
of Assumed Liabilities.  On and
subject to the terms and conditions of this Agreement, the Buyer agrees to
assume and become responsible for the Assumed Liabilities at the Closing, but
will not assume or undertake at or after the Closing any other obligation or
Liability of any Acquired Asset Entity or any other Person not included within
clauses (a) through (c) of the definition of Assumed Liabilities.

 

(c)                                  Purchase
Price.  The maximum aggregate
purchase price for the Acquired Assets to be paid by the Buyer hereunder is
$135,000,000 (plus the amount of any purchase price adjustment in favor of the
Acquired Asset Entities pursuant to §2(d)), of which $100,000,000 shall be
payable in cash (the “Closing Cash Payment”) and the remainder shall be
payable in Holdings Common Stock as set forth in this §2(c), in each case
subject to adjustment as set forth in this Agreement (as so adjusted, the “Purchase
Price”). The Purchase Price shall be paid as follows:

 

(i)                                     At
Closing, the Buyer shall pay the Acquired Asset Entities the Preliminary
Closing Cash Payment, to be paid in the following order and priority: (A)
first, to each of APC Holdings, Inc., Haemonetics Corporation, St. Martin Bank
and Trust Company, Aventis Bio Services, Inc., Greg Stratiger, Robert Gagnard,
Oscar Davis, La Savoy Famille, LC, and Claus L. Winther (collectively, the “Lenders”),
to pay off all Indebtedness owed or owing to

 

1

 

such Lenders
by the Acquired Asset Entities in the amounts set forth in the applicable
Payoff Letters (as defined below); (B) then, to each of General Electric
Capital Corporation and Octapharma AG, to pay off Indebtedness owed or owing to
them in the amounts set forth in the applicable Payoff Letters and sufficient
to secure the release of any Security Interests of General Electric Capital
Corporation and Octapharma AG in the Acquired Assets; (C) then, to Talecris
Biotherapeutics, Inc. (“Talecris”) or its Affiliates to pay off any and
all Indebtedness and accounts payable owed or owing to Talecris or its
Affiliates (but excluding the aggregate amount of outstanding prepayments made
by Talecris pursuant to Section 2.7 of the Talecris Supply Agreement and the
aggregate amount of all outstanding Advances, if any, made pursuant to §5(m)
below); and (D) then, to the Acquired Asset Entities, the balance of the
Preliminary Closing Cash Payment. Notwithstanding the foregoing, if an Open
Center is placed on “delivery hold” by Talecris and not “reinstated” by
Talecris prior to the Closing, then the Buyer will reduce the Preliminary
Closing Cash Payment by $3,000,000 per each such Open Center, and retain such
amounts until Talecris removes such Open Center from “delivery hold.”  The Buyer shall pay to the Acquired Asset
Entities all amounts withheld pursuant to the immediately preceding sentence
within five Business Days after Talecris’s removal of such Open Center from “delivery
hold.”  The Buyer shall use commercially
reasonable efforts to cause any Open Center on “delivery hold” as of the
Closing to be reinstated as promptly as practicable following the Closing.

 

(ii)                                  Following
the Closing, for each Unlicensed Center that on or prior to June 30, 2008, and
for only the first Undeveloped Center that on or prior to December 31, 2008,
was inspected by both (A) the FDA as a condition to such center’s licensure by
the FDA for the collection, processing, storing, marketing, distribution, sale,
and research and development of plasma and plasma-derived products, and (B) the
PPTA as a condition to such center’s quality plasma procurement (i.e., QPP)
certification from the PPTA with respect to the plasma collected at such
center, the Buyer shall pay, or Holdings shall issue, as applicable, the
Validation Payment within five Business Days following the Buyer’s receipt of
such center’s official FDA license or QPP certification, whichever occurs
later, as follows:  (X) 50% of each
Validation Payment shall be delivered to the Escrow Agent to be held in escrow
and distributed in accordance with the terms and conditions of the escrow
agreement attached hereto as Exhibit B (the “Escrow Agreement”),
and (Y) subject to the Buyer’s rights under the next sentence, the other 50% of
each Validation Payment shall be delivered to the Parent. For the avoidance of
doubt, notwithstanding that it obtained an FDA license on or about October 30,
2006, the Milwaukee, Wisconsin center shall be considered an Unlicensed Center
for purposes of this §2(c)(ii). The Buyer shall have the right to retain the
first $100,000 payable under clause (Y) of the preceding sentence to reimburse
the Buyer for certain insurance costs to be incurred by the Buyer post-Closing,
as well as to retain the next $3,000,000 payable to the Parent under clause (Y)
of the preceding sentence (the “Development Cost Holdback”) until such
time as the Acquired Asset Entities’ reimbursement obligations under §6(i)
shall have been satisfied; provided, however, that if the
Buyer shall not have exercised its right to retain the Development Cost
Holdback, the Acquired Asset Entities shall nonetheless have the right,
exercisable upon written notice to the Buyer, to require the Buyer to retain
the Development Cost Holdback in lieu of reimbursing the Buyer pursuant to
§6(i). “Validation Payment” means (i) unless and until the Parent
exercises the option set forth in §2(h)(iii) below, the number of shares of
restricted Holdings Common Stock obtained by dividing (X) $1,428,570 (such
amount being the “stipulated value” of such shares being issued as a Validation
Payment) by (Y) the Applicable

 

2

 

Price, and
(ii) following the Parent’s exercise of the option set forth in §2(h)(iii)
below, $1,428,570 in cash. The Buyer shall use commercially reasonable efforts
to obtain such licensure and approval from the FDA and to request and obtain
such QPP certification at the earliest permitted date. In no event shall the
aggregate stipulated value of Holdings Common Stock issuable by Holdings and/or
cash payable by the Buyer as Validation Payments under this §2(c)(ii) exceed
$20,000,000 (inclusive of the $3,100,000 that the Buyer or Holdings, as the
case may be, is/are entitled to retain as set forth above).

 

(iii)                               Following
the Closing, the Buyer shall pay or issue, as applicable, the Milestone
Payments based on the criteria set forth on, and in accordance with the terms
and conditions of, Exhibit C attached hereto.

 

(iv)                              Notwithstanding
§2(c)(ii) and §2(c)(iii) to the contrary, upon the occurrence of any of the
following events, all Validation Payments and Milestone Payments not earned as
of the occurrence of such event shall thereupon be deemed earned and shall be
paid or deposited with the Escrow Agent in accordance with the terms and
conditions of this Agreement, as applicable:

 

(A)                              a
Change of Control;

 

(B)                                the
termination of any of two of the following three individuals’ (Lawrence Stern,
Alberto Martinez and Oscar Davis) respective management positions with Holdings
and the Buyer (provided that, in the case
of Lawrence Stern, as long as he remains a member of Holdings’ Board of
Directors he shall not be considered to have been terminated), other than any
termination, resignation or removal for cause or as a result of such individual’s
death or physical or mental disability;

 

(C)                                Holdings’
failure to pay the Repurchase Price within the 30 day period described in
§2(h)(ii) below;

 

(D)                               Holdings’
failure to provide the Letter of Credit as required under §2(h)(iv) below; or

 

(E)                                 Holdings’
breach of its obligations set forth in §6(k)(i) below.

 

(v)                                 If,
on or before the Closing, three or fewer of the Acquired Centers shall have
become subject to or affected by a Material Curtailment Event, the Acquired
Asset Entities may, notwithstanding §7(a) below, elect to exclude such Acquired
Center(s) from the Acquired Assets being purchased by the Buyer hereunder in
satisfaction of the related closing condition set forth in §7(a)(xviii) below,
in which case all amounts previously paid by Talecris for plasma collected at
such Acquired Center but not delivered to Talecris shall be repaid to Talecris
(notwithstanding anything in §2(c)(i)(C) to the contrary) and the Closing Cash
Payment and/or the Holdings Common Stock issuable pursuant to this Agreement
shall be reduced as follows:

 

3

 

	
  If the Acquired Center is an:

  	
  then the resultant reduction shall be:

  
	
   

  	
   

  
	
  Open Center

  	
  $3,000,000 in cash

  
	
   

  	
   

  
	
  Unlicensed Center

  	
  $1,428,000 in cash and one Validation
  Payment

  
	
   

  	
   

  
	
  Undeveloped Center

  	
  $833,000 in cash

  

 

(d)                                 Working
Capital & Related Adjustments.

 

(i)                                     Not
later than five Business Days prior to the Closing Date, the Acquired Asset
Entities shall prepare and deliver to the Buyer a statement (the “Pre-Closing
Statement”) reflecting the Acquired Asset Entities’ good faith calculations
of (A) the estimated Working Capital as of the opening of business on the
Closing Date (the “Estimated Working Capital”) and (B) the Preliminary
Closing Cash Payment to be paid at the Closing, which shall be subject to the
approval of the Buyer not to be unreasonably withheld. The Pre-Closing
Statement shall be accompanied by (A) the Estimated Closing Date Balance Sheet,
a detailed statement setting forth the estimated Excluded Business Sources
& Uses (the “Estimated Sources & Uses Statement”) and other
worksheets and data that support the Acquired Asset Entities’ calculations of
the Estimated Working Capital and the Preliminary Closing Cash Payment, (B) a
schedule of Inventory itemized by location, specifying the amount of Qual 1
Plasma, Qual 2 Plasma, qualified plasma, tested plasma and untested plasma at
each such location and in the aggregate, (C) the schedule of vacation and sick
days referred to in §6(g)(iii) below, and (D) a certificate from the managing
member or Chief Executive Officer of the Parent to the effect that (1) the Pre-Closing
Statement and the calculation of the Estimated Working Capital set forth
therein have been prepared in accordance with GAAP consistently applied with
the principles, methodology and assumptions used to prepare the Most Recent
Balance Sheet (with the application of GAAP governing in the event of a
conflict between the application of GAAP and consistent application of such
principles, methodology and assumptions), as well as the Working Capital
calculation derived therefrom attached hereto as Exhibit D, and (2) the
Pre-Closing Statement and the accompanying schedules, statements and other
materials are properly derived from the books and records of the Acquired Asset
Entities. Following delivery of the Pre-Closing Statement, the Acquired Asset
Entities shall deliver any other information that the Buyer may reasonably
request in order to verify the amounts reflected on the Pre-Closing Statement. If
all or any portion of the Pre-Closing Statement is not reasonably acceptable to
the Buyer, the Parties will negotiate in good faith to resolve such
disagreements during the five Business Day period following delivery of the
Pre-Closing Statement. If the Parties are unable to mutually agree on the
disputed amount(s), then, for purposes of this §2(d), the Estimated Working
Capital shall equal the average of the Acquired Asset Entities’ and the Buyer’s
respective estimates of such amounts.

 

(ii)                                  In
addition to the other adjustments set forth in this Agreement, the Closing Cash
Payment shall be adjusted at Closing as follows:

 

4

 

(A)                              If
the Estimated Sources & Uses Statement reflects uses of funds in excess of
sources of funds, then the Buyer shall subtract the amount of such excess from
the Closing Cash Payment. (For the avoidance of doubt, such amount shall not be paid or deducted
from any Acquired Asset, including any such Acquired Asset included in the
calculation of Working Capital hereunder.)  If the Estimated Sources & Uses Statement
reflects sources of funds in excess of uses of funds, then the Buyer shall add
the amount of such excess to the Closing Cash Payment.

 

(B)                                If
the Estimated Working Capital is less than the Target Working Capital, then the
Buyer shall subtract the amount of such shortfall from the Closing Cash Payment.
If the Estimated Working Capital is equal to or greater than the Target Working
Capital, then no adjustment shall be made to the Closing Cash Payment.

 

The Closing
Cash Payment, as adjusted pursuant to this §2(d)(ii), is referred to as the “Preliminary
Closing Cash Payment.”

 

(iii)                               As
promptly as practicable, but not later than 150 days following the Closing, the
Buyer, at its expense, shall cause Buyer’s Accountants to deliver to the
Acquired Asset Entities a statement (the “Post-Closing Statement”),
prepared in accordance with GAAP consistently applied with the principles, methodologies
and assumptions used to prepare the Most Recent Balance Sheet (with the
application of GAAP governing in the event of a conflict between the
application of GAAP and consistent application of such principles, methodology
and assumptions), as well as the Working Capital calculation derived therefrom
attached hereto as Exhibit D, setting forth their good faith calculation
of (A) the actual Working Capital as of the opening of business on the Closing
Date (the “Actual Working Capital”), and (B) the Final Closing Cash
Payment. The Post-Closing Statement shall be accompanied by the Closing Date
Balance Sheet and a detailed statement setting forth the actual Excluded
Business Sources & Uses (the “Actual Sources & Uses Statement”)
that support the Buyer and Buyer’s Accountants’ calculations of the Actual
Working Capital and the Final Closing Cash Payment. Upon reasonable notice
during normal business hours, at any time and from time to time, the Acquired
Asset Entities and Sellers’ Accountants shall be provided reasonable access to
the pertinent accounting books and records, work papers and the accounting
personnel of Buyer’s Accountants and the Buyer, and the Buyer and Buyer’s
Accountants shall have reasonable access to the pertinent accounting books and
records, work papers and the accounting personnel of the Acquired Asset
Entities and Sellers’ Accountants, during such 150 day period and thereafter
until the Final Closing Cash Payment (as defined below) has been finally
determined in accordance with this §2(d).

 

(iv)                              Upon
the delivery of the Pre-Closing Statement and continuing until the 90th
day following the Closing, the Buyer and its representatives shall have the
right to inspect all Inventory included in the Acquired Assets (including
without limitation, the packaging, labeling, storage and quality of plasma
Inventory and whether such plasma Inventory conforms with the schedule of
plasma Inventory attached to the Pre-Closing Statement) and the Acquired Asset
Entities shall be entitled to have a representative accompany the Buyer on such
inspection(s). In addition to any other adjustment that may result from this
§2(d), an appropriate downward adjustment will be reflected in the Buyer’s
calculation of Actual Working Capital for any plasma Inventory discovered
during such inspection(s) to be damaged, defective or otherwise non-

 

5

 

conforming (such
non-conformity to be determined based on the requirements of the applicable
supply agreement governing such plasma Inventory), which downward adjustment
shall be net of amounts paid to the Buyer for any such damaged, defective or
non-conforming plasma. The Buyer will use commercially reasonable efforts to
sell such damaged, defective or non-conforming plasma Inventory prior to final
determination of Actual Working Capital under this §2(d) at market rates for
such plasma at the time of sale. If the Buyer sells any such damaged, defective
or non-conforming plasma Inventory after the final determination of Actual Working
Capital under this §2(d), then the Buyer shall promptly remit the net proceeds
of such sale to the Acquired Asset Entities. An appropriate upward adjustment
will be reflected in the Buyer’s calculation of Actual Working Capital for any
plasma Inventory in excess of the plasma Inventory reflected in the schedule of
Inventory attached to the Pre-Closing Statement.

 

(v)                                 If
the Acquired Asset Entities disagree with the Buyer’s determination of any
component of the Actual Working Capital as set forth in the Post-Closing
Statement or any component of the Actual Sources & Uses Statement delivered
therewith, then within 30 days following the Acquired Asset Entities’ receipt
of the Post-Closing Statement, the Acquired Asset Entities shall notify the
Buyer in writing of their objection, setting forth in reasonable detail their
determination of the Actual Working Capital and the Actual Sources & Uses
Statement, and the basis of their disagreement. A failure by the Acquired Asset
Entities to so notify the Buyer in writing of its disagreement within such 30
days will constitute acceptance by the Acquired Asset Entities of the Buyer’s
calculation of the Actual Working Capital, the Actual Sources & Uses
Statement and the Final Closing Cash Payment. To the extent the Acquired Asset
Entities so notify the Buyer in writing of any such disagreements within such
30 days, the Buyer and the Acquired Asset Entities will negotiate in good faith
to resolve such disagreements during the 15 day period following notice by the
Acquired Asset Entities to the Buyer of such disagreements; provided, however, that any component of the Actual Working
Capital or the Actual Sources & Uses Statement not specifically disputed by
the Acquired Asset Entities in such written notice shall be deemed final and
binding on the Acquired Asset Entities, except to the extent any such component
of Actual Working Capital is adjusted as a result of a change in a component of
Actual Working Capital specifically disputed by the Acquired Asset Entities in
such written notice.

 

(vi)                              If
such disagreement is not resolved within such 15 day period, the disputed
matter(s) (which shall be limited to those matters set forth in the
Post-Closing Statement and, if applicable, the Actual Sources & Uses
Statement, and disputed by the Acquired Asset Entities pursuant to the written
notice referred to above) shall be promptly submitted to the Independent
Accounting Firm for final resolution. The Parties shall instruct the
Independent Accounting Firm to make a final determination of the disputed
Actual Working Capital and, if applicable, the Actual Sources & Uses
Statement in accordance with the guidelines set forth in this Agreement and to
render such a determination within 30 days after the retention of the
Independent Accounting Firm by the Buyer and the Acquired Asset Entities. The
Independent Accounting Firm will be requested to review only the matter(s) in
dispute between the Buyer and the Acquired Asset Entities and to determine the
Actual Working Capital and, if applicable, the Actual Sources & Uses
Statement in accordance with the provisions of this §2(d). In its
determination, the Independent Accounting Firm shall be entitled to rely on
work papers and similar items generated by Sellers’ Accountants, the Acquired
Asset Entities, Buyer’s Accountants and the Buyer in respect of their
determination of the Actual Working Capital and

 

6

 

the Actual
Sources & Uses Statement, and shall be instructed not to make any such
determinations based on independent review. The determination of the
Independent Accounting Firm shall be final and binding on the Parties with
respect to the disputed matters. The fees and expenses of the Independent
Accounting Firm shall be paid by the Party hereto (either the Buyer or the
Acquired Asset Entities, taken as a whole) whose determination of the disputed
matters, taken as a whole, was further away from the resolution of such
matters, taken as a whole, as determined by the Independent Accounting Firm. In
case the determination of the disputed matters, taken as a whole, is equally
accurate relative to the resolution of such matters as determined by the
Independent Accounting Firm, such fees and expenses shall be split evenly
between the Buyer and the Acquired Asset Entities, taken as a whole.

 

(vii)                           Once
the Actual Working Capital and the Actual Sources & Uses Statement become
final and binding upon the Parties pursuant to §2(d)(v) or §2(d)(vi) above, the
Buyer will promptly recalculate the Closing Cash Payment as follows:

 

(A)                              If
the Actual Sources & Uses Statement reflects uses of funds in excess of
sources of funds, then the Buyer shall subtract the amount of such excess from
the Closing Cash Payment. (For the avoidance of doubt, such amount shall not be paid or deducted
from any Acquired Asset, including any such Acquired Asset included in the
calculation of Working Capital hereunder.) 
If the Actual Sources & Uses Statement
reflects sources of funds in excess of uses of funds, then the Buyer shall add
the amount of such excess to the Closing Cash Payment.

 

(B)                                If
the Actual Working Capital is less than the Target Working Capital, then the
Buyer shall subtract the amount of such shortfall from the Closing Cash Payment.
If the Actual Working Capital is equal to or greater than the Target Working
Capital, then no adjustment shall be made to the Closing Cash Payment.

 

(C)                                The
Buyer shall subtract the Undisputed Fees from the Closing Cash Payment.

 

The Closing
Cash Payment, as adjusted pursuant to this §2(d)(vii), is referred to as the “Final
Closing Cash Payment.”  Within five
Business Days of such recalculation, the following payments shall be made:  (x) if the Final Closing Cash Payment is
greater than the Preliminary Closing Cash Payment, then the Buyer shall pay the
amount of such difference to the Acquired Asset Entities in immediately
available funds in accordance with the Acquired Asset Entities’ written wire
instructions, or (y) if the Preliminary Closing Cash Payment is greater than
the Final Closing Cash Payment, the Acquired Asset Entities shall jointly and
severally pay the amount of such difference to the Buyer in immediately
available funds pursuant to the Buyer’s written wire instructions. Notwithstanding
anything to the contrary set forth herein, the Buyer may (but shall not be
obligated to), with prior written notice to the Acquired Asset Entities, set
off all or a portion of any amounts required to be paid to the Buyer pursuant
to this §2(d)(vii) or §2(d)(viii) below against any amounts payable by the
Buyer to any Acquired Asset Entity, including, without limitation, any and all
(i) Validation Payments issuable or payable pursuant to §2(c)(ii) above, (ii)
Milestone Payments issuable or payable pursuant to §2(c)(iii) above, or (iii)
amounts payable under any Contract referenced in, or entered into pursuant to,
this Agreement.

 

7

 

(viii)                        Within
45 days following the Closing, the Buyer and Holdings shall submit to the
Acquired Asset Entities an invoice setting forth: (A) the fees attributable to
the Services (as defined in, and in accordance with Exhibit A to, the
Transition Services Agreement) provided to the Acquired Asset Entities with
respect to the Excluded Business during the period from (and including) October
21, 2006 through the Closing Date; and (B) any other direct or pass-through
costs (e.g., Federal Express
charges or travel expenses for the Acquired Asset Entities’ Representatives (as
defined in the Transition Services Agreement)) or other amounts attributable to
such Services provided during such period to which the Acquired Asset Entities
would be entitled to compensation or reimbursement under the Transition
Services Agreement, as if such agreement were in effect during such period. If
the Acquired Asset Entities, in good faith, dispute the validity or amount of
any charge on such invoice, then the Parties will negotiate in good faith to
resolve such disagreements during the five Business Day period following
delivery of such invoice. If the Parties are unable to mutually agree on the
disputed amount(s), then at the end of such five Business Day period the
Acquired Asset Entities shall jointly and severally pay the amount of all
undisputed charges to the Buyer in immediately available funds pursuant to the
Buyer’s written wire instructions, and the Parties thereafter shall resolve the
dispute pursuant to the procedures set forth in Section 3.1 of the Transition
Services Agreement.

 

(e)                                  The
Closing.  The closing of the
transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Reed Smith LLP, in New York, New York or at
such other venue as the Parties mutually agree commencing at 10:00 a.m. local
time on the later of (i) November 18, 2006 or (ii) the ending date, mutually
agreed upon by the Parties, of any regular or shortened payroll period for the
Acquired Asset Entities’ employees that follows the satisfaction or waiver of
all conditions to the obligations of the Parties to consummate the transactions
contemplated hereby (other than conditions with respect to actions the
respective Parties will take at the Closing itself) (the “Closing
Date”).

 

(f)                                    Deliveries
at the Closing.  At the Closing, (i)
the Acquired Asset Entities will deliver to the Buyer the various certificates,
instruments, and documents referred to in §5(j) and §7(a) below; (ii) the Buyer
will deliver to the Acquired Asset Entities the various certificates,
instruments, and documents referred to in §7(b) below; (iii) the Acquired Asset
Entities will execute and deliver to the Buyer a bill of sale and assignment
and assumption agreement in the form attached hereto as Exhibit E (the “Bill
of Sale”); (iv) the applicable Acquired Asset Entities will deliver payoff
letters executed by each of the Lenders, General Electric Capital Corporation
and Octapharma AG in form and substance reasonably satisfactory to the Buyer
(the “Payoff Letters”); (v) the Acquired Asset Entities will execute and
deliver such other instruments of sale, transfer, conveyance, and assignment as
the Buyer and its counsel reasonably may request; (vi) the Buyer will execute
and deliver to the Acquired Asset Entities the Bill of Sale; and (vii) the
Buyer will deliver to the Acquired Asset Entities the consideration specified
in §2(c)(i) above.

 

(g)                                 Allocation.
Exhibit F sets forth an allocation of the Purchase Price among the
Acquired Assets in accordance with Section 1060 of the Code and the Treasury
regulations thereunder (and any similar provision of state, local or foreign
law, as appropriate). The Parties shall report, act and file Tax Returns
(including, without limitation, IRS Forms 8594) in all respects and for all
purposes consistent with Exhibit F. No Party shall take any position
(whether in audits, Tax Returns or otherwise) which is inconsistent with such
allocation unless required to do so by applicable law.

 

8

 

(h)                                 Holdings
Common Stock.  

 

(i)                                     The shares of
restricted Holdings Common Stock to be issued pursuant to this Agreement shall
be issued at a per share price calculated at the date of issuance (the “Applicable
Price”) equal to the lower of (A) the per share price obtained by dividing
(x) the agreed upon equity value of Holdings of $2,100,000,000, less the
aggregate amount of dividends or distributions paid to Holdings’ stockholders
concurrently with the closing of the Recapitalization, up to a maximum
aggregate amount of $1,000,000,000, by (y) 10,730,790, which represents the
fully diluted number of issued and outstanding shares of Holdings Common Stock
reflected on Holdings pro forma capitalization table set forth in Exhibit G,
which number, among other things, reflects Holdings’ repurchase of shares of
Holdings Common Stock held by Bayer Healthcare LLC and does not give effect to
Management Equity (as such per share price may be adjusted pursuant to §2(i),
the “Agreed Upon Price”), or (B) 90% of the per share price offered to
the public set forth in the final prospectus in an initial public offering of
Holdings Common Stock (the “Discounted IPO Price”). To the extent that
there was an issuance of restricted Holdings Common Stock under this Agreement
prior to the Recapitalization (such that restricted Holdings Common Stock was
issued to the Parent based on the Agreed Upon Price calculated without the
deduction contemplated by clause (x) above for dividends or distributions paid
concurrently with the closing thereof), and thereafter (but before January 31,
2007) the Recapitalization shall be consummated, then the Parent shall be
entitled to receive a number of shares of restricted Holdings Common Stock
equal to the difference between (A) the number of shares of restricted Holdings
Common Stock that would have been issued if the Recapitalization had been
consummated on the date of issuance (i.e., based on the Agreed Upon Price
calculated with the deduction contemplated by clause (x) above for dividends or
distributions paid concurrently with the closing thereof), and (B) the number
of shares actually issued based on the Agreed Upon Price calculated without
giving effect to the Recapitalization. For the avoidance of doubt, no Acquired
Asset Entity shall be entitled to receive any distribution pursuant to the
Recapitalization except to the limited extent, if at all, provided in §2(i)(ii)(A)
below. To the extent that there was an issuance of restricted Holdings Common
Stock under this Agreement prior to an initial public offering (such that
restricted Holdings Common Stock was issued to the Parent based on the Agreed
Upon Price), and thereafter there shall have been an initial public offering in
which the Discounted IPO Price is less than the Agreed Upon Price, then the
Parent shall be entitled to receive a number of shares of restricted Holdings
Common Stock equal to the difference between (A) the number of shares of
restricted Holdings Common Stock that would have been issued if such Discounted
IPO Price were available on the date of issuance and (B) the number of shares
actually issued based on the Agreed Upon Price.

 

(ii)                                  If Holdings does not
complete an initial public offering of Holdings Common Stock by December 31,
2007, then the Parent shall have the one-time option, exercisable in its sole
discretion by delivering notice to Holdings pursuant to §10(g) on or before
June 30, 2008, to require Holdings to repurchase any or all Holdings Common
Stock then held by or on behalf of the Parent or its permitted transferees that
was previously issued pursuant to this Agreement. Holdings (or its designated
Affiliate) will repurchase the number of shares of Holdings Common Stock
specified in the Parent’s notice within 30 days of Holdings’ receipt of such
notice (such repurchase date, the “Repurchase Closing Date”). The
aggregate purchase price to be paid by Holdings (or its designated Affiliate) upon
any repurchase of Holdings Common Stock under this clause (ii) (the “Repurchase
Price”) shall be equal to the sum of (A) the product obtained by
multiplying (x) the number of shares of Holdings Common Stock to be

 

9

 

so repurchased by (y) the Applicable Price, plus
(y) interest, at a rate of 8% per annum, on the amount described in clause (A),
calculated on the basis of the actual days elapsed from the date of issuance of
the shares of Holdings Common Stock to December 31, 2007. No interest will be
paid on the amount described in clause (A) above for any period following
December 31, 2007, even though such repurchase may occur after such date; provided,
however, that if Holdings shall have failed to pay the Repurchase Price
within the 30 day period described above and failed to provide the Letter of
Credit as required under §2(h)(iv) below, then Holdings shall pay interest, at
a rate of 12% per annum, on the amount described in clause (A), calculated on the
basis of the actual days elapsed from the date of issuance of the shares of
Holdings Common Stock to the date on which the repurchase is completed.

 

(iii)                               If Holdings does not
complete an initial public offering of Holdings Common Stock by December 31, 2007,
then the Parent shall have the one-time option, exercisable in its sole
discretion by delivering notice to Holdings pursuant to §10(g) on or after the
earlier of (x) the Repurchase Closing Date or (y) June 30, 2008, to require
Holdings to pay any remaining payments to be made in restricted Holdings Common
Stock pursuant to §2(c) above in cash.

 

(iv)                              If Holdings consummates
the Recapitalization, then the loan documentation to be executed in connection
therewith shall provide for a letter of credit facility with a sublimit no less
than $35,000,000. During any period in which the facilities of the
Recapitalization are available to Holdings and the availability of the
revolving credit facility thereunder is less than or equal to $50,000,000,
Holdings shall cause to be issued to Parent a Letter of Credit in an amount
(which amount shall not exceed $35,000,000, the “L/C Amount”) equal to
the lesser of (A) the current availability under the revolving credit facility,
and (B) the sum of (i) the Repurchase Price of Holdings Common Stock then
eligible for repurchase pursuant to §2(h)(ii) hereof, plus (ii) the
aggregate stipulated value of any Validation Payments not yet then earned, plus
(iii) the aggregate stipulated value of any Milestone Payments not yet then earned.
Following the issuance of the Letter of Credit, the L/C Amount shall be
adjusted by Holdings, on a monthly basis, in accordance with the formula set
forth in clause (B) of the preceding sentence. Notwithstanding the foregoing,
Holdings shall only be required to provide the Letter of Credit for so long as
the availability of funds under Holdings’ then existing revolving credit
facility remains less than or equal to $50,000,000.

 

(i)                                     Adjustments
to Shares of Holdings Common Stock.  Subject
to the provisions of this Agreement and the Escrow Agreement requiring
Validation Payments, Milestone Payments, and any dividends or distributions or
sales proceeds thereof and any interest or other income earned thereon to be
delivered and held in escrow by the Escrow Agent, with respect to any Holdings
Common Stock issuable pursuant to this Agreement, prior to the issuance of such
Holdings Common Stock:

 

(i)                                     If Holdings
declares or pays a dividend on the outstanding shares of Holdings Common Stock
payable in Holdings Common Stock or other securities, then for each share of
Holdings Common Stock subsequently issued pursuant to this Agreement, the
Parent shall receive, without cost to the Parent, the total number and kind of
securities to which the Parent would have been entitled had the Parent owned
such shares of Holdings Common Stock of record as of the date the dividend
occurred. If Holdings subdivides the outstanding shares of Holdings Common
Stock by reclassification or otherwise into a greater number of shares, the number
of shares of Holdings Common Stock issuable to the Parent pursuant to the
Agreement

 

10

 

shall be proportionately increased as a
result of a proportionate decrease in the Applicable Price. If the outstanding
shares of Holdings Common Stock are combined or consolidated, by
reclassification or otherwise, into a lesser number of shares, the number of
shares of Holdings Common Stock issuable to the Parent pursuant to the
Agreement shall be proportionately decreased as a result of a proportionate
increase in the Applicable Price.

 

(ii)                                  If
Holdings issues or distributes to the holders of Holdings Common Stock
evidences of its indebtedness, any other securities of Holdings or any cash,
property or other assets, excluding (A) any such issuance or distribution of
$1,000,000,000 or less on or prior to January 31, 2007 pursuant to the
Recapitalization, (B) any stock dividend referred to in §2(i)(i), or (C) any
such issuance or distribution pursuant to a reclassification, exchange,
combination or substitution referred to in §2(i)(iii), then for each share of
Holdings Common Stock subsequently issued pursuant to this Agreement, the
Parent shall receive, without cost to the Parent, such evidences of
indebtedness, other securities of Holdings or cash, property or other assets of
Holdings to which the Parent would have been entitled had the Parent owned such
shares of Holdings Common Stock of record as of the date such issuance or
distribution occurred.

 

(iii)                               Upon
any reclassification, exchange, substitution, or other event that results in a
change of the number and/or class of the securities issuable to the Parent
pursuant to this Agreement, the Parent shall be entitled to receive, upon any
subsequent issuance of Holdings Common Stock (or other class of stock) pursuant
to this Agreement, the number and kind of securities and property that the
Parent would have received pursuant to this Agreement if the issuance of
Holdings Common Stock (or other class of stock) pursuant to this Agreement had
occurred immediately before such reclassification, exchange, substitution, or
other event. For the avoidance of doubt, this §2(i)(iii) shall not be
applicable to any exchange pursuant to Section 3.02 of the Stockholders
Agreement. Holdings or its successor shall promptly issue to the Acquired Asset
Entities written notice in accordance with §10(g) below, setting forth the
number and kind of such new securities or other property issuable pursuant to
this Agreement as a result of such reclassification, exchange, substitution or
other event that results in a change of the number and/or class of securities
issuable upon issuance of Holdings Common Stock (or other class of stock)
pursuant to this Agreement (such number and kind of new securities or other
property issuable pursuant to this Agreement shall be as nearly equivalent as
practicable to the number of shares of Holdings Common Stock issuable based on
the then Applicable Price contemplated herein). The provisions of this
§2(i)(iii) shall similarly apply to successive reclassifications, exchanges,
substitutions, or other events.

 

(iv)                              Prior to an initial
public offering of Holdings Common Stock, the Agreed Upon Price and the number
of shares of Holdings Common Stock issuable pursuant to this Agreement shall be
subject to adjustment from time to time as provided in this §2(i)(iv). In the
event that any adjustment of the Agreed Upon Price as required herein results
in a fraction of a cent, such Agreed Upon Price shall be rounded up or down to
the nearest cent. For purposes of this §2(i)(iv), all references to Holdings
Common Stock shall include Convertible Securities (as defined below) and
Options (as defined below) (collectively, “Common Stock Equivalents”); provided,  however,
that any and all references to Holdings
Common Stock, Convertible Securities, Options and Common Stock Equivalents
shall specifically exclude Management Equity.

 

(A)                              Adjustment of Agreed Upon Price. If and whenever Holdings issues or sells, or in
accordance with this §2(i)(iv) hereof is deemed to have issued or

 

11

 

sold, any shares of Holdings
Common Stock for a consideration per share less than the then Agreed Upon Price
or for no consideration (each, a “Dilutive Issuance”), then the Agreed
Upon Price shall be reduced to a price equal to the product of (1) the Agreed
Upon Price in effect immediately prior to such Dilutive Issuance, and (2) the
quotient obtained by dividing (a) the sum of (x) the total number of shares of Holdings
Common Stock outstanding immediately prior to such issuance and (y) the number
of shares of Holdings Common Stock that may be purchased for the consideration
received by Holdings upon such issuance at the Agreed Upon Price in effect
immediately prior to such Dilutive Issuance, by (b) the total number of shares
of Holdings Common Stock outstanding immediately after the issuance of such
Holdings Common Stock; provided, that for purposes hereof, all shares of
Holdings Common Stock that are issuable upon conversion, exercise or exchange
of Common Stock Equivalents shall be deemed outstanding immediately after the
issuance of such Common Stock Equivalents. Such adjustment shall be made
whenever such shares of Holdings Common Stock or Common Stock Equivalents are
issued.

 

(B)                                Effect on Agreed Upon Price of Certain Events. For purposes of determining the adjusted Agreed
Upon Price under §2(i)(iv) hereof, the following will be applicable:

 

(1)                                  Issuance of Rights or Options. If Holdings in any manner issues or grants any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Holdings Common Stock or other securities
exercisable, convertible into or exchangeable for Holdings Common Stock (“Convertible
Securities”) (such warrants, rights and options to purchase Holdings Common
Stock or Convertible Securities are hereinafter referred to as “Options”)
and the effective price per share for which Holdings Common Stock is issuable
upon the exercise of such Options is less than the Agreed Upon Price (“Below
Base Price Options”), then the maximum total number of shares of Holdings
Common Stock issuable upon the exercise of all such Below Base Price Options
(assuming full exercise, conversion or exchange of Convertible Securities, if
applicable) will, as of the date of the issuance or grant of such Below Base
Price Options, be deemed to be outstanding and to have been issued and sold by
Holdings for such price per share and the maximum consideration payable to
Holdings upon such exercise (assuming full exercise, conversion or exchange of
Convertible Securities, if applicable) will be deemed to have been received by
Holdings. For purposes of the preceding sentence, the “effective price per
share for which Holdings Common Stock is issuable upon the exercise of such
Below Base Price Options” is determined by dividing (i) the total amount,
if any, received or receivable by Holdings as consideration for the issuance or
granting of all such Below Base Price Options, plus the minimum aggregate
amount of additional consideration, if any, payable to Holdings upon the
exercise of all such Below Base Price Options, plus, in the case of Convertible
Securities issuable upon the exercise or conversion of such Below Base Price
Options, the minimum aggregate amount of additional consideration payable upon
the exercise, conversion or exchange thereof at the time such Convertible
Securities first become exercisable, convertible or exchangeable, by (ii) the
maximum total number of shares of Holdings Common Stock issuable upon the
exercise of all such Below Base Price Options (assuming full conversion of
Convertible Securities, if applicable). No further adjustment to the Agreed
Upon Price will be made upon the actual issuance of such Holdings Common Stock
upon

 

12

 

the exercise of such Below Base Price Options or upon the exercise,
conversion or exchange of Convertible Securities issuable upon exercise of such
Below Base Price Options.

 

(2)                                  Issuance of Convertible Securities. If Holdings in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than
where the same are issuable upon the exercise of Options) and the effective
price per share for which Holdings Common Stock is issuable upon such exercise,
conversion or exchange is less than the Agreed Upon Price, then the maximum
total number of shares of Holdings Common Stock issuable upon the exercise,
conversion or exchange of all such Convertible Securities will, as of the date
of the issuance of such Convertible Securities, be deemed to be outstanding and
to have been issued and sold by Holdings for such price per share and the
maximum consideration payable to Holdings upon such exercise (assuming full
exercise, conversion or exchange of Convertible Securities, if applicable) will
be deemed to have been received by Holdings. For the purposes of the preceding
sentence, the “effective price per share for which Holdings Common Stock is
issuable upon such exercise, conversion or exchange” is determined by
dividing (i) the total amount, if any, received or receivable by Holdings as
consideration for the issuance or sale of all such Convertible Securities, plus
the minimum aggregate amount of additional consideration, if any, payable to
Holdings upon the exercise, conversion or exchange thereof at the time such
Convertible Securities first become exercisable, convertible or exchangeable,
by (ii) the maximum total number of shares of Holdings Common Stock issuable
upon the exercise, conversion or exchange of all such Convertible Securities.
No further adjustment to the Agreed Upon Price will be made upon the actual
issuance of such Holdings Common Stock upon exercise, conversion or exchange of
such Convertible Securities.

 

(3)                                  Change in Option Price or Conversion Rate. If there is a change at any time in (i) the
amount of additional consideration payable to Holdings upon the exercise of any
Options; (ii) the amount of additional consideration, if any, payable to
Holdings upon the exercise, conversion or exchange of any Convertible
Securities; or (iii) the rate at which any Convertible Securities are
convertible into or exchangeable for Holdings Common Stock (in each such case,
other than under or by reason of provisions designed to protect against
dilution), the Agreed Upon Price in effect at the time of such change will be
readjusted to the Agreed Upon Price which would have been in effect at such
time had such Options or Convertible Securities still outstanding provided for such
changed additional consideration or changed conversion rate, as the case may
be, at the time initially granted, issued or sold.

 

(4)                                  Calculation of Consideration Received. If any Holdings Common Stock, Options or
Convertible Securities are issued, granted or sold for cash, the consideration
received therefor for purposes of this §2(i)(iv) will be the amount received by
Holdings therefor, before deduction of reasonable commissions, underwriting
allowances or other reasonable expenses paid or incurred by Holdings in
connection with such issuance, grant or sale. In case any Holdings Common
Stock, Options or Convertible Securities are issued or sold for a consideration
part or all of which shall be other than cash, the amount of the consideration
other than cash received by Holdings will be the fair market value of such
consideration, except where such consideration

 

13

 

consists of securities, in which case the amount of consideration
received by Holdings will be the fair market value (closing bid price, if
traded on any market) thereof as of the date of receipt. In case any Holdings
Common Stock, Options or Convertible Securities are issued in connection with
any merger or consolidation in which Holdings is the surviving corporation, the
amount of consideration therefor will be deemed to be the fair market value of
such portion of the net assets and business of the non-surviving corporation as
is attributable to such Holdings Common Stock, Options or Convertible
Securities, as the case may be. The fair market value of any consideration
other than cash or securities will be determined in good faith by an investment
banker or other appropriate expert of national reputation selected by Holdings
and reasonably acceptable to the holder hereof, with the costs of such
appraisal to be borne by Holdings.

 

(5)                                  Exceptions to Adjustment of Agreed Upon Price. Notwithstanding anything to the contrary herein,
this §2(i)(iv) shall not apply to the following:  (i) the issuance of any Management Equity;
(ii) the issuance of any securities, options or warrants in connection with an
initial public offering of Holdings Common Stock; (iii) the exercise,
conversion or exchange of any convertible or exchangeable securities, rights,
options or warrants issued and outstanding as of the date hereof; or (iv) the
issuance of securities, options or warrants to lenders or purchasers of debt
securities of Holdings or its subsidiaries in connection with debt incurred to
such lenders or purchasers.

 

(v)                                 In
connection with any adjustment pursuant to this §2(i), Holdings shall, upon
request of any holder of Holdings Common Stock issued pursuant to this
Agreement, furnish to such holder such information and documentation concerning
such adjustment or the transactions giving rise to such adjustment as such
holder may reasonably request, including, without limitation, information as to
the calculation of the adjustment or reports or other documents prepared by
accountants, investment bankers or other advisors in connection with such
adjustment or the transactions giving rise to such adjustment

 

3.                                       Representations
and Warranties of the Acquired Asset Entities.  The Acquired Asset Entities jointly and
severally represent and warrant to the Buyer and Holdings that the statements
contained in this §3 are correct and complete as of the date of this Agreement
and will be correct and complete as of the Closing Date (as though made then
and as though the Closing Date were substituted for the date of this Agreement throughout
this §3), except as set forth in the disclosure schedule accompanying this
Agreement and initialed by the Parties (the “Disclosure
Schedule”). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs contained in this §3. The
disclosures set forth in any such lettered and numbered paragraph in the
Disclosure Schedule shall qualify any other specific lettered and numbered
paragraph of this §3 if and to the extent that it is readily apparent from a
reasonable reading of the disclosure that such disclosure is applicable to such
other lettered and numbered paragraph of this §3. For example, the mere listing
(or inclusion of a copy) of a document or other item shall not be deemed
adequate to disclose an exception to a representation or warranty made herein
(unless the representation or warranty has to do with the existence of the
document or other item itself).

 

(a)                                  Organization.  Each Acquired Asset Entity is a limited
liability company duly formed, validly existing, and in good standing under the
laws of the jurisdiction of its formation,

 

14

 

with full limited liability company power and authority to operate the
Acquired Centers and conduct its business related thereto as now being operated
and conducted and to own or use the Acquired Assets that it owns or uses. Each
Acquired Asset Entity is duly qualified and authorized to transact business as
a foreign corporation and is in good standing in every jurisdiction where
required, except for such failures to qualify and be authorized as would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Acquired Assets, taken as a whole.

 

(b)                                 Authorization
of Transaction.  Each Acquired Asset
Entity has full power and authority (including full limited liability company
power and authority) to execute and deliver this Agreement and to perform its
obligations hereunder. Without limiting the generality of the foregoing, the
managers and, if required under Applicable Law, members of the Acquired Asset
Entities have duly authorized the execution, delivery, and performance of this
Agreement by the Acquired Asset Entities, as applicable. This Agreement
constitutes the valid and legally binding obligation of the Acquired Asset
Entities, enforceable against each of them in accordance with its terms and
conditions, except that such enforceability may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting or relating to creditors’
rights generally and is subject to general principles of equity.

 

(c)                                  Noncontravention.  Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in §2 above), will (i)
violate, in any material respect, any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, or other restriction of any
Governmental Authority to which any Acquired Asset Entity is subject or
violate, in any respect, any provision of the Certificate of Formation or
operating agreement of any Acquired Asset Entity, (ii) conflict with, result in
a breach of, constitute a default under, result in the acceleration of, create
in any party the right to accelerate, terminate, modify, or cancel, or require
any notice under any material Contract or other material arrangement to which
any Acquired Asset Entity is a party or by which any of them is bound or to
which any of their respective assets is subject, or (iii) result in the
imposition of any Security Interest upon any of the Acquired Assets. No
Acquired Asset Entity needs to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any Governmental Authority or
other third party in order for the Parties to consummate the transactions
contemplated by this Agreement (including the assignments and assumptions
referred to in §2 above).

 

(d)                                 Brokers’
Fees.  Except for fees payable to
Jefferies & Company, Inc., which will be paid by the Acquired Asset
Entities, no Acquired Asset Entity has any Liability or obligation to pay any
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which the Buyer or Holdings
could become liable or obligated.

 

(e)                                  Title
to Assets.  All of the Acquired
Assets are owned or leased by Acquired Asset Entities and not by any Affiliate
thereof or any other Person in which any Acquired Asset Entity or Affiliate
thereof has an interest or investment. The Acquired Asset Entities have good
and marketable title to, or a valid leasehold interest in, the Acquired Assets,
free and clear of all Security Interests or restrictions on transfer. There are
no existing agreements, options,

 

15

 

commitments, or rights with, of or to any Person to acquire any
material portion of the Acquired Asset Entities’, assets, properties or rights
included in the Acquired Assets or any interest therein.

 

(f)            Financial Statements.  Attached hereto as Exhibit H are the
following financial statements (collectively with the Audited Financial
Statements, the “Financial Statements”): (i) unaudited consolidated
balance sheets and statements of income, changes in stockholders’ equity, and
cash flow as of and for the fiscal years ended December 31, 2005 and 2004 for
the Parent (the “Draft Audited Financial Statements”); and (ii)
unaudited consolidated balance sheets and statements of income, changes in
stockholders’ equity, and cash flow (the “Most Recent Financial Statements”)
as of and for the eight months ended August 26, 2006 (the “Most Recent
Fiscal Month End”) for the Parent. The Financial Statements (including the
notes thereto) have been prepared in accordance with GAAP (including, in the
case of the Draft Audited Financial Statements, all audit adjustments proposed
by Deloitte & Touche on or before the date of this Agreement, but
excluding, in the case of the Most Recent Financial Statements, the absence of
footnotes and year-end adjustments) applied on a consistent basis throughout
the periods covered thereby, present fairly in all material respects the
financial condition of the Parent and its subsidiaries as of such dates and the
results of operations of the Parent and its subsidiaries for such periods, are
correct and complete in all material respects, and are consistent with the
books and records of the Parent and its subsidiaries (which books and records
are correct and complete in all material respects). The Acquired Asset Entities
have made available to the Buyer and Holdings all auditors’ reports to
management and attorneys’ letters to auditors for the last 3 years, if any.

 

(g)                                 Events
Subsequent to Most Recent Financial Statements.  Since August 26, 2006, there has not been any
Material Adverse Change in, any of the Acquired Assets, individually or in the
aggregate or any Material Curtailment Event with respect to any Acquired Center.
Without limiting the generality of the foregoing, since that date:

 

(i)                                     none
of the Acquired Assets Entities has sold, leased, transferred, or assigned any
of its assets, tangible or intangible, which if owned by such Acquired Asset
Entity on the date hereof would be included in the Acquired Assets, other than
for fair consideration in the Ordinary Course of Business or other than
transfers from one Acquired Asset Entity to another;

 

(ii)                                  none
of the Acquired Asset Entities has entered into any Contract (or series of
related Contracts) relating to the Acquired Centers either involving more than
$100,000 or outside the Ordinary Course of Business;

 

(iii)                               no
party (including the Acquired Asset Entities) has accelerated, terminated,
modified, or cancelled any Contract (or series of related Contracts) relating
to the Acquired Centers and involving more than $100,000 to which any Acquired
Asset Entity or any of the Acquired Centers is a party or by which any of them
is bound;

 

(iv)                              no
Acquired Asset Entity has imposed any Security Interest upon any of the
Acquired Assets;

 

16

 

(v)                                 no
Acquired Asset Entity has made any capital expenditure (or series of related
capital expenditures) in excess of $25,000 with respect to any Acquired Center
other than the capital expenditures set forth on §3(g)(v) of the Disclosure
Schedule or §6(e)(vii) below;

 

(vi)                              no
Acquired Asset Entity has issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money
or capitalized lease obligation secured by any of the Acquired Assets, either
involving more than $100,000 or outside the Ordinary Course of Business;

 

(vii)                           no
Acquired Asset Entity has delayed or postponed the payment of accounts payable
and other Liabilities relating to the Acquired Assets or the Assumed
Liabilities outside the Ordinary Course of Business;

 

(viii)                        no
Acquired Asset Entity has cancelled, compromised, waived, or released any right
or claim (or series of related rights and claims) relating to the Acquired
Centers and either involving more than $100,000 or outside the Ordinary Course
of Business;

 

(ix)                                no
Acquired Asset Entity has granted any license or sublicense of any rights under
or with respect to any Intellectual Property included in the Acquired Assets;

 

(x)                                   no
Acquired Asset Entity has experienced any damage, destruction, or loss
involving more than $5,000 (whether or not covered by insurance) at any
Acquired Center:

 

(xi)                                no
Acquired Asset Entity has made any loan to, or entered into any other
transaction with, any of its Employees relating to the Acquired Assets outside
the Ordinary Course of Business;

 

(xii)                             no
Acquired Asset Entity has entered into any employment Contract with any
Employee providing for annual compensation in excess of $75,000 or any
collective bargaining agreement, written or oral, with any Employee or modified
the terms of any such existing Contract or agreement with any Employee;

 

(xiii)                          no
Acquired Asset Entity has granted any increase in the base compensation of any
Employee outside the Ordinary Course of Business;

 

(xiv)                         no
Acquired Asset Entity has adopted, amended, modified, or terminated any bonus,
profit sharing, incentive, severance, or other plan, contract, or commitment
for the benefit of any Employees (or taken any such action with respect to any
other Employee Benefit Plan for the benefit of any Employees) other than the
implementation of additional employee retention programs set forth in Exhibit
I or otherwise approved by the Buyer;

 

(xv)                            no
Acquired Asset Entity has made any other material change in employment terms
for any of the Employees outside the Ordinary Course of Business;

 

(xvi)                         no
Acquired Asset Entity has declared, set aside, or paid any dividend or made any
distribution with respect to its membership interests (including, without
limitation, the payment of any special or preferred distributions or dividends
to Sealaska Corporation) or redeemed, purchased, or otherwise acquired any of
its membership interests;

 

17

 

(xvii)                      no
Acquired Asset Entity has made or pledged to make any charitable or other
capital contribution that would constitute an Assumed Liability outside the
Ordinary Course of Business;

 

(xviii)                   there
has not been any other occurrence, event, incident, action, failure to act, or
transaction relating to the Acquired Centers outside the Ordinary Course of
Business; and

 

(xix)                           no
Acquired Asset Entity has committed to any of the foregoing.

 

(h)                                 Undisclosed
Liabilities.  No Acquired Asset
Entity has, and none of the Acquired Assets is subject to any Liability, other
than those Liabilities (i) reflected or reserved against on the face of the
Most Recent Balance Sheet (rather than in any notes thereto, and then only up
to the amount set forth thereon with respect to each such line item), (ii)
under this Agreement and under any Contracts, Leases, purchase orders or
matters disclosed in the Disclosure Schedule hereto, (iii) incurred in the
Ordinary Course of Business and not required to be set forth in the Most Recent
Financial Statements under GAAP, and (iv) incurred in the Ordinary Course of
Business since the date of the Most Recent Financial Statements that,
individually or in the aggregate, would not be reasonably likely to result in a
Liability of any Acquired Asset Entity in excess of $100,000. None of the liabilities
described in clauses (ii) – (iv) above has resulted from, arose out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort (including, without limitation, professional liability),
infringement, violation of law, or environmental matter, including without
limitation those arising under Environmental, Health, and Safety Requirements.

 

(i)                                     Legal
Compliance.

 

(i)                                     The
Acquired Asset Entities have complied with all Applicable Law, except for such
noncompliance as would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect on the Acquired Assets taken as a
whole. None of the Acquired Asset Entities has received since the date of the
Most Recent Balance Sheet any notice from any Governmental Authority that the
operations of the Acquired Asset Entities’ business or any of the Acquired
Assets are being conducted in violation of any Applicable Law or are the
subject of any investigation or review pending or threatened by any
Governmental Authority relating to any alleged violation of Applicable Law
related to the Acquired Asset Entities’ business or any of the Acquired Assets,
except such notices as to violations or alleged violations that could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect on the Acquired Assets taken as a whole. The Acquired Asset
Entities has made available to the Buyer true and correct copies of (A) all
Governmental Orders relating to the Acquired Centers requiring, prohibiting or
limiting future activities and (B) other material agreements, arrangements or
understandings with Governmental Authorities with respect to the Acquired
Assets.

 

(ii)                                  Each
Biologics License Application relating to the products of the Acquired Asset
Entities in the United States has been approved by the FDA and has not been
suspended or revoked since such approval. The applicable Acquired Asset Entity
(or its designated agents) has filed or caused to be filed, since the date of
the Most Recent Balance Sheet, with the FDA all required notices, supplements,
updates, and annual and other reports,

 

18

 

including
adverse experience reports, with respect to each product of the Acquired Asset
Entities that is regulated by the FDA, except where such failure to file such
notices, supplements, updates and reports could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect on the
Acquired Assets taken as a whole.

 

(iii)                               None
of the Acquired Asset Entities has received any written notice since the date
of the Most Recent Balance Sheet that any Governmental Authority (including the
FDA) has commenced or, to the Knowledge of the Acquired Asset Entities, has
threatened to initiate any action (A) to withdraw any approval or authorization
of any Acquired Asset Entity relating to the Acquired Assets, (B) to limit the
ability of any Acquired Center to collect, process, deliver, store or sell
plasma or plasma-related products or (C) to request the recall or withdrawal of
any product of the Acquired Asset Entities included in the Acquired Assets.

 

(iv)                              All
operations relating to the collection, processing, storing, delivery and sale
of plasma and plasma-related products by the Acquired Asset Entities are being
conducted in compliance with current Good Manufacturing Practice requirements
and appropriate industry standards (i) in the country in which such activities
are being conducted and (ii) in each country in which the Acquired Asset
Entities collect, process, deliver, store or sell plasma or plasma-related
products, except where noncompliance therewith could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect
on the Acquired Assets taken as a whole.

 

(v)                                 §3(i)
of the Disclosure Schedule sets forth a list as of the date hereof of (A) all
Notices of Inspectional Observations (Form FDA 483), (B) all establishment
inspection reports and (C) all notices of violations, warning letters, recall
letters and any other similar documents received by any Acquired Asset Entity
from the FDA, the EMEA, the CPMP, or any other Governmental Authority, and the
responses thereto submitted by an Acquired Asset Entity, relating to the
products of the Acquired Asset Entities and/or arising out of the conduct of
the Acquired Asset Entities that in each case are (1) in the possession of the
Acquired Asset Entities, (2) involve activity that either (a) occurred since
the date of the Most Recent Balance Sheet or (b) is still outstanding or
pending with respect to a Governmental Authority and (3) relate to any Acquired
Center.

 

(j)                                     Tax
Matters.  With respect to each of the
Acquired Asset Entities:

 

(i)                                     Such
Party has filed all material Tax Returns that it was required to file or has
filed extensions with respect thereto. All such Tax Returns were correct and
complete in all material respects. All Taxes shown as due on such Tax Returns
have been paid. No claim has ever been made (in writing or, to the Knowledge of
the Acquired Asset Entities, otherwise) by an authority in a jurisdiction where
such Party does not file Tax Returns that it is or may be subject to taxation
by that jurisdiction. There are no Security Interests on any of the Acquired
Assets that arose in connection with any failure (or alleged failure) to pay
any Tax.

 

(ii)                                  Such
Party has withheld and paid all material Taxes required to have been withheld
and paid in connection with amounts paid or owing to any employee, independent
contractor, creditor, member, manager, or other third party and all W-2 and
1099 forms required with respect thereto have been properly completed and
timely filed.

 

19

 

(iii)                               There
is no dispute or claim concerning any Tax Liability of such Party claimed or
raised by any authority in writing. §3(j) of the Disclosure Schedule lists all
federal, state, local, and foreign income Tax Returns filed with respect to
such Party for taxable periods ended on or after December 31, 2001, indicates
those Tax Returns that have been audited, and indicates those Tax Returns that
currently are the subject of audit. Such Party has delivered to the Buyer
correct and complete copies of all federal income Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by such
Party since December 31, 2001.

 

(iv)                              Such
party has not waived any statute of limitations in respect of Taxes which
waiver has not expired or agreed to any extension of time with respect to a Tax
assessment or deficiency which extension has not expired.

 

(v)                                 The
unpaid Taxes of such Party (A) did not, as of the Most Recent Fiscal Month End,
exceed the reserve for Tax Liability (rather than any reserve for deferred
Taxes established to reflect timing differences between book and Tax income)
set forth on the face of the Most Recent Balance Sheet (rather than in any
notes thereto, and then only up to the amount set forth thereon with respect to
each such line item) and (B) do not exceed that reserve as adjusted for the
passage of time through the Closing Date in accordance with the past custom and
practice of such Party in filing its Tax Returns.

 

(vi)                              None
of the Assumed Liabilities is an obligation to make a payment that will not be
deductible by the Buyer under Code §280G. Such Party has disclosed on its
federal income Tax Returns all positions taken therein that could give rise to
a substantial understatement of federal income Taxes within the meaning of Code
§6662. Such Party (A) has not been a member of an Affiliated Group filing a
consolidated federal income Tax Return (other than a group the common parent of
which was the Parent) or (B) does not have any Liability for the Taxes of any
Person (other than any Acquired Asset Entity) under Reg. §1.1502-6 (or any
similar provision of state, local, or foreign law), as a transferee or
successor, by contract, or otherwise.

 

(vii)                           The
Acquired Asset Entities have made 95% of all operational expenditures for the
period between August 28, 2006 and October 20, 2006 set forth in the thirteen
week cash flow forecast attached hereto as Exhibit L.

 

(k)                                  Real
Property.

 

(i)                                     The
Acquired Asset Entities own no real property.

 

(ii)                                  §3(k)(ii)
of the Disclosure Schedule sets forth the address of each parcel of Leased Real
Property, and a true and complete list of all Leases for each such Leased Real
Property (including (a) the date and name of the parties to such Lease
document, (b) a reasonable estimation of the square footage for such parcel of
Leased Real Property, and (c) the average monthly rental rate for such parcel
of Lease Real Property from January 1, 2006 to September 30, 2006 (including
any common area fees and related expenses, estimated taxes and fees for storage
and parking (in each case, based on historical taxes and fees for such parcel
of Leased Real Property))). The Acquired Asset Entities have delivered to Buyer
a true and complete copy

 

20

 

of each such
Lease document, and in the case of any oral Lease, a written summary of the
material terms of such oral Lease. With respect to each of the Leases:

 

(A)                              such
Lease is legal, valid, binding, enforceable and in full force and effect with
respect to the Acquired Asset Entity that is a party thereto and, to the Knowledge
of the Acquired Asset Entities, with respect to each other party thereto;

 

(B)                                except
as set forth in §3(k)(ii) of the Disclosure Schedule, the transaction
contemplated by this Agreement does not require the consent of any other party
to such Lease and will not result in a breach of or default under such Lease;

 

(C)                                the
possession and quiet enjoyment of the Leased Real Property by the Acquired
Asset Entity party thereto under such Lease has not been disturbed, and to the
Knowledge of the Acquired Asset Entities, there are no material disputes
between the Acquired Asset Entity party to any Lease and the landlord under
such Lease;

 

(D)                               no
Acquired Asset Entity or, to the Knowledge of the Acquired Asset Entities, any
other party to the Lease is in breach or default of any material obligation
under such Lease, and, to the Knowledge of the Acquired Asset Entities, no
event has occurred or circumstance exists which, with the delivery of notice,
the passage of time or both, would constitute such a breach or default of any
material obligation, or permit the termination, modification or acceleration of
rent under such Lease;

 

(E)                                 no
security deposit or portion thereof deposited with respect to such Lease has
been applied in respect of a breach or default under such Lease which has not
been redeposited in full;

 

(F)                                 no
Acquired Asset Entity owes, or will owe in the future, any brokerage
commissions or finder’s fees with respect to such Lease;

 

(G)                                the
other party to such Lease is not an Affiliate of, and otherwise does not have
any economic interest in, the applicable Acquired Asset Entity;

 

(H)                               no
Acquired Asset Entity has subleased, licensed or otherwise granted any Person
the right to use or occupy such Leased Real Property or any portion thereof;

 

(I)                                    no
Acquired Asset Entity has collaterally assigned or granted any other Security
Interest in such Lease or any interest therein; and

 

(J)                                   there
are no liens or encumbrances on the estate or interest created by such Lease.

 

(iii)                               The
Leased Real Property comprises all of the real property used or intended to be
used in connection with the Acquired Centers.

 

(iv)                              To
the Knowledge of the Acquired Asset Entities, all buildings, structures,
fixtures, building systems and equipment, and all components thereof included
in the Leased

 

21

 

Real Property
(the “Improvements”) are in good condition
and repair and, with the exception of the Improvements on the Undeveloped
Centers, sufficient for the operation of the Acquired Centers. To the Knowledge
of the Acquired Asset Entities, there are no structural deficiencies or latent
defects affecting any of the Improvements and there are no facts or conditions
affecting any of the Improvements whether on-site or off-site which would, individually
or in the aggregate, interfere in any respect with the use or occupancy of the
Improvements or any portion thereof in the operation of the Acquired Centers as
currently conducted thereon, reasonable wear and tear not caused by neglect
excepted.

 

(v)                                 The
Acquired Asset Entities have not received written notice of, and to the
Knowledge of the Acquired Asset Entities, there is no condemnation,
expropriation or other proceeding in eminent domain, pending or threatened,
affecting any parcel of Leased Real Property or any portion thereof or interest
therein.

 

(vi)                              The
Acquired Asset Entities have not received any written notice of, nor does any
Acquired Asset Entity have Knowledge of, any violation by any Acquired Asset
Entity of any applicable building, zoning, subdivision, health and safety and
other land use laws, including The Americans with Disabilities Act of 1990, as
amended (collectively, the “Real Property Laws”)
and, to the Knowledge of the Acquired Asset Entities, the current use and
occupancy of the Leased Real Property and operation of the Acquired Assets
thereon does not violate any Real Property Laws.

 

(vii)                           §3(k)(vii)
of the Disclosure Schedule lists all material certificates of occupancy,
permits, licenses, franchises, approvals and authorizations (collectively, the “Real
Property Permits”) of all Governmental Authorities held by the Acquired
Asset Entities which are required to use or occupy the Leased Real Property or
operate the Acquired Centers as currently operated. The Acquired Asset Entities
have delivered to the Buyer a true and complete copy of all Real Property
Permits. No Acquired Asset Entity has received any notice from any Governmental
Authority or other entity having jurisdiction over the Leased Real Property
threatening a suspension, revocation, modification or cancellation of any Real
Property Permit.

 

(viii)                        To
the Knowledge of the Acquired Asset Entities, none of the Leased Real Property
or any portion thereof is located in a flood hazard area (as defined by the
Federal Emergency Management Agency)

 

(ix)                                With
respect to the Undeveloped Centers:

 

22

 

(A)                              To
the Knowledge of the Acquired Asset Entities, such parcel of Leased Real
Property has direct vehicular and pedestrian access to a public street
adjoining such Leased Real Property, or has vehicular and pedestrian access to
a public street via an insurable, permanent, irrevocable and appurtenant
easement benefiting such parcel of Leased Real Property, and such access is not
dependent on any land or other real property interest which is not included in
such Leased Real Property. None of the Improvements or any portion thereof is
dependent for its access, use or operation on any land, building, improvement
or other real property interest which is not included in such Leased Real
Property.

 

(B)                                To
the Knowledge of the Acquired Asset Entities, all water, oil, gas, electrical,
steam, compressed air, telecommunications, sewer, storm and waste water systems
and other utility services or systems for such Leased Real Property have been
installed and are operational and sufficient for the operation of the Acquired
Asset Entities’ business as currently conducted thereon. To the Knowledge of
the Acquired Asset Entities, each such utility service enters such Leased Real
Property from an adjoining public street or valid private easement in favor of
the supplier of such utility service or appurtenant to such Leased Real
Property, and is not dependent for its access, use or operation on any land, building,
improvement or other real property interest which is not included in such
Leased Real Property.

 

(C)                                The
classification of such parcel of Leased Real Property under applicable zoning
laws, ordinances and regulations permits the development, use and occupancy of
such parcel and the operation of the Acquired Asset Entities’ business as
currently conducted or proposed to be conducted by the Acquired Asset Entities
thereon, and permits the Improvements located thereon as currently constructed,
used and occupied. There are sufficient parking spaces, loading docks and other
facilities at such parcel to comply with such zoning laws, ordinances and
regulations. The use or occupancy of such Leased Real Property or any portion
thereof or the operation of such Undeveloped Centers, business as currently
contemplated to be conducted by the Acquired Asset Entities thereon is not
dependent on a “permitted nonconforming use” or “permitted non-conforming
structure” or similar variance, exemption or approval from any Governmental
Authority.

 

(l)                                     Intellectual
Property.

 

(i)                                     An
Acquired Asset Entity owns, or has the right to use pursuant to a valid and
enforceable written license, sublicense, Contract, or permission, all
Intellectual Property used or intended to be used in the operation of the
Acquired Centers as presently conducted and as presently proposed to be
conducted by the applicable Acquired Asset Entity (the “Seller Intellectual
Property”).

 

(ii)                                  The
Acquired Asset Entities have not interfered and do not interfere with, infringe
upon, misappropriate, or otherwise come into conflict with any Intellectual
Property rights of third parties, whether as a result of the continued
operation of its businesses as presently conducted or as presently proposed to
be conducted by the Acquired Asset Entities. No Acquired Asset Entity has
received any charge, complaint, claim, demand, or notice alleging any

 

23

 

such
interference, infringement, misappropriation, or violation (including any claim
that such Acquired Asset Entity must license or refrain from using any
Intellectual Property rights of any third party) or challenging the validity of
any Seller Intellectual Property. To the Knowledge of the Acquired Asset
Entities, no third party has interfered with, infringed upon, misappropriated,
or otherwise come into conflict with any Seller Intellectual Property.

 

(iii)                               §3(l)(iii)
of the Disclosure Schedule sets forth a correct and complete list of all Seller
Intellectual Property owned by the Acquired Asset Entities material to the
operation of the business as presently conducted or as presently proposed to be
conducted by the Acquired Asset Entities, and identifies each license,
sublicense, agreement, or other permission which any Acquired Asset Entity has
granted to any third party with respect to any Seller Intellectual Property
(together with any exceptions). The Acquired Asset Entities have delivered to
the Buyer correct and complete copies of all patents, registrations and applications
owned by the Acquired Asset Entities and included within the Seller
Intellectual Property, and all licenses, sublicenses, agreements, and
permissions (as amended to date) from the Acquired Asset Entities regarding the
Seller Intellectual Property and has made available to the Buyer correct and
complete copies of all other written documentation evidencing ownership and
prosecution (if applicable) of each such item.

 

(iv)                              With
respect to each item of Intellectual Property required to be identified in §3(l)(iii)
of the Disclosure Schedule:

 

(A)                              the
applicable Acquired Asset Entity owns and possesses all right, title, and
interest in and to the item, free and clear of any Security Interest, license,
or other restriction or limitation regarding use or disclosure;

 

(B)                                the
item is not, to the Knowledge of the Acquired Asset Entities, subject to any
outstanding injunction, judgment, order, decree, ruling, or charge;

 

(C)                                other
than as listed on §3(l)(iv)(c) of the Disclosure Schedule, to the Knowledge of
the Acquired Asset Entities, no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending or threatened
which challenges the legality, validity, enforceability, use, or ownership of
the item;

 

(D)                               no
Acquired Asset Entity has agreed to indemnify any Person for or against any
interference, infringement, misappropriation, or other conflict with respect to
the item; and

 

(E)                                 no
loss or expiration of the item is threatened, pending, or reasonably
foreseeable, except for patents expiring at the end of their statutory terms
(and not as a result of any act or omission by the Acquired Asset Entities,
including without limitation, a failure by the Acquired Asset Entities to pay
any required maintenance fees).

 

(v)                                 §3(l)(v)
of the Disclosure Schedule identifies each item of Seller Intellectual Property
material to the operation of the business as presently conducted or as
presently proposed to be conducted by the Acquired Asset Entities that any
third party owns and that the Acquired Asset Entities use in the operation of
the Acquired Assets pursuant to license, sublicense, Contract, or permission
(other than off-the-shelf “shrink-wrap” software). The

 

24

 

Acquired Asset
Entities have delivered to the Buyer correct and complete copies of all such
licenses, sublicenses, Contracts, and permissions (as amended to date). With
respect to each item of Seller Intellectual Property required to be identified
in §3(l)(v) of the Disclosure Schedule;

 

(A)                              the
license, sublicense, Contract, or permission covering the item is legal, valid,
binding, enforceable, and in full force and effect with respect to the
applicable Acquired Asset Entity (and, to the Knowledge of the Acquired Asset
Entities, with respect to the other parties thereto);

 

(B)                                the
license, sublicense, Contract, or permission will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms following
the consummation of the transactions contemplated hereby (including the
assignments and assumptions referred to in §2 above);

 

(C)                                the
applicable Acquired Asset Entity is not (and, to the Knowledge of the Acquired
Asset Entities, no other party to the license, sublicense, Contract, or
permission is) in material breach or default, and no event has occurred which
with notice or lapse of time would constitute a material breach or default by
the applicable Acquired Asset Entity (or, to the Knowledge of the Acquired
Asset Entities, by any other party thereto) or permit termination,
modification, or acceleration thereunder;

 

(D)                               no
party to the license, sublicense, Contract, or permission has repudiated any
provision thereof;

 

(E)                                 with
respect to each sublicense, the representations and warranties set forth in
subsections (A) through (D) above are true and correct with respect to the
underlying license;

 

(F)                                 to
the Knowledge of the Acquired Asset Entities, the underlying item of
Intellectual Property is not subject to any outstanding injunction, judgment,
order, decree, ruling, or charge;

 

(G)                                to
the Knowledge of the Acquired Asset Entities, no action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand is pending or
threatened which challenges the legality, validity, or enforceability of the underlying
item of Intellectual Property; and

 

(H)                               no
Acquired Asset Entity has granted any sublicense or similar right with respect
to the license, sublicense, Contract, or permission.

 

(vi)                              No
Acquired Asset Entity has any Knowledge of any new products, inventions,
procedures, or methods of manufacturing or processing that any competitors or
other third parties have developed which reasonably could be expected to
supersede or make obsolete any product or process of the Acquired Asset
Entities or to limit the business of the Acquired Asset Entities as presently
conducted.

 

(vii)                           The
Acquired Asset Entities have taken all commercially reasonable and necessary
action to maintain and protect all of the Seller Intellectual Property and the
Acquired

 

25

 

Asset Entities
shall take all steps commercially reasonable and necessary to ensure such
maintenance and protection until Closing in all material respects.

 

(viii)                        The
Acquired Asset Entities have complied in all material respects with and are
presently in compliance in all material respects with all foreign, federal,
state, local, governmental (including, but not limited to, the FDA, the Federal
Trade Commission and State Attorneys General), administrative or regulatory
laws, regulations, guidelines and rules applicable to any Seller Intellectual
Property and the Acquired Asset Entities shall take all steps necessary to
ensure such compliance until Closing.

 

(m)                               Tangible
Assets.  The Acquired Asset Entities
lease all buildings, and own or lease all machinery, Equipment, and other
tangible assets necessary for the operation of the Acquired Centers as
presently operated, except for buildings, machinery, Equipment and other assets
necessary for the operation of Undeveloped Centers as set forth in §3(cc) of
the Disclosure Schedule. §3(m) of the Disclosure Schedule sets forth a correct
and complete list of all material machinery, material Equipment and other
material tangible assets comprising the Acquired Assets. Each such tangible
asset is free from material defects (patent and latent), has been maintained in
accordance with normal industry practice in all material respects, is in good
operating condition and repair (subject to normal wear and tear), and is
suitable in all material respects for the purposes for which it presently is
used. Notwithstanding the above, each plasma freezer used or currently proposed
to be used by the Acquired Asset Entities at any Acquired Center is in
compliance in all material respects with and satisfies in all material respects
all applicable United States and European Union freezer specifications set
forth in Exhibit J hereto. On the Closing Date, each of the Open Centers
and Unlicensed Centers shall have on hand a level of donor cash that is substantially
the same as that maintained by the Acquired Asset Entities in the Ordinary
Course of the Business, but which in no event shall be less than a two days’
supply of donor cash.

 

(n)                                 Inventory.  §3(n) of the Disclosure Schedule sets forth a
schedule of the plasma Inventory as of August 26, 2006, itemized by location,
specifying the amount of Qual 1 Plasma, Qual 2 Plasma, qualified plasma, tested
plasma and untested plasma at each such location and in the aggregate. Except
as set forth in §3(n) of the Disclosure Schedule, at least 97% of the plasma
Inventory is merchantable and fit for the purpose for which it was procured or
collected, none of which is undeliverable, unusable, subject to rejection or
destruction or otherwise unsaleable, subject only to the reserve for inventory
writedown set forth on the face of the Most Recent Balance Sheet (rather than
in any notes thereto, and then only up to the amount set forth thereon with
respect to each such line item), as may be thereafter adjusted through the
Closing Date in accordance with the past custom and practice of the Acquired
Asset Entities and as reflected in the Pre-Closing Statement. On the Closing
Date, each of the Open Centers and Unlicensed Centers shall have on hand a
level of softgoods Inventory that is substantially the same as that maintained
by the Acquired Asset Entities in the Ordinary Course of the Business, but
which in no event shall be less than a two weeks’ supply of softgoods Inventory.
All of such softgoods Inventory is generally fit for the purpose for which it
is intended to be used.

 

(o)                                 Contracts.  §3(o) of the Disclosure Schedule lists the
following Contracts to which any of the Acquired Asset Entities is a party with
respect to the Acquired Assets or the Assumed Liabilities, in whole or in part:

 

26

 

(i)                                     any
Contract (or group of related Contracts) for the lease of personal property to
or from any Person providing for lease payments in excess of $100,000 per
annum;

 

(ii)                                  any
Contract (or group of related Contracts) for the purchase or sale of raw
materials, commodities, supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance of which will extend
over a period of more than one year, or involve consideration in excess of
$100,000;

 

(iii)                               any
Contract concerning a partnership or joint venture;

 

(iv)                              any
Contract (or group of related Contracts) under which it has created, incurred,
assumed, or guaranteed any indebtedness for borrowed money, or any capitalized
lease obligation, in excess of $100,000 or under which it has imposed a
Security Interest on any of its assets, tangible or intangible;

 

(v)                                 any
Contract as to the collection, processing, storing, sale, delivery or
distribution of plasma or plasma-related products;

 

(vi)                              any
confidentiality Contract or Contract pursuant to which any Acquired Asset
Entity has agreed not to compete in any business activity;

 

(vii)                           any
Contract between any Acquired Asset Entity and any of their Affiliates, members
or managers;

 

(viii)                        any
Contract relating to the acquisition of any Acquired Center or any material
portion of any Acquired Asset Entity’s assets that would be included in the
Acquired Assets if owned by the Acquired Asset Entities on the date hereof;

 

(ix)                                any
profit sharing, stock option, stock purchase, stock appreciation, deferred
compensation, severance, or other plan or arrangement for the benefit of any
Employee or former Employee that is not an Employee Benefit Plan listed in
§3(w) of the Disclosure Schedule;

 

(x)                                   any
collective bargaining Contract;

 

(xi)                                any
Contract for the employment of any Employee or prospective Employee on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $75,000 or providing severance benefits;

 

(xii)                             any
Contract under which it has advanced or loaned any amount to any Employees
outside the Ordinary Course of Business;

 

(xiii)                          any
Contract under which the consequences of a default or termination would
reasonably be expected to have a Material Adverse Effect;

 

(xiv)                         any
Contract with medical directors or other licensed physicians for any of the
Acquired Centers; or

 

27

 

(xv)                            any
other Contract (or group of related Contracts) the performance of which
involves consideration in excess of $100,000 or which is material to the
operation of any of the Acquired Centers.

 

The Acquired Asset Entities
have delivered to the Buyer a correct and complete copy of each written
Contract listed in §3(o) of the Disclosure Schedule (as amended to date) and a
written summary setting forth the terms and conditions of each oral Contract
referred to in §3(o) of the Disclosure Schedule. Such Contracts constitute all
Contracts necessary to operate the Acquired Centers, as presently operated.
With respect to each such Contract: (A) the Contract is legal, valid, binding,
enforceable, and in full force and effect with respect to the applicable
Acquired Asset Entity and, to the Knowledge of the Acquired Asset Entities,
with respect to each other party thereto; (B) the Contract will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in §2 above); (C) the
applicable Acquired Asset Entity is not, and to the Knowledge of the Acquired
Asset Entities, no other party thereto is in breach or default, and no event
has occurred which with notice or lapse of time would constitute a breach or
default by the applicable Acquired Asset Entity (or, to the Knowledge of the
Acquired Asset Entities, by any other party thereto), or permit termination,
modification, or acceleration, under the Contract; and (D) no party has
repudiated any provision of the Contract.

 

(p)                                 Notes
and Accounts Receivable.  All notes
and accounts receivable of the Acquired Asset Entities included in the Acquired
Assets are reflected properly on its books and records, are valid receivables
subject to no setoffs or counterclaims, are current and collectible in
accordance with their terms at their recorded amounts, subject only to the
reserve for bad debts set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto, and then only up to the amount set forth
thereon with respect to each such line item), as may be thereafter adjusted
through the Closing Date in accordance with the past custom and practice of the
Acquired Asset Entities and as reflected in the Pre-Closing Statement.

 

(q)                                 Powers
of Attorney.  There are no
outstanding powers of attorney executed on behalf of any Acquired Asset Entity
relating to the Acquired Assets.

 

(r)                                    Insurance.  §3(r) of the Disclosure Schedule sets forth
the following information with respect to each insurance policy (including
policies providing property, casualty, liability, and workers’ compensation
coverage and bond and surety arrangements) covering any of the Acquired
Centers, or to which any Acquired Asset Entity has been a party, a named
insured or otherwise the beneficiary of coverage relating to any of the
Acquired Assets, at any time within the past six (6) years:

 

(i)                                     the
name, address, and telephone number of the agent;

 

(ii)                                  the
name of the insurer, the name of the policyholder, and the name of each covered
insured;

 

(iii)                               the
policy number and the period of coverage;

 

28

 

(iv)                              the
scope (including an indication of whether the coverage was on a claim made,
occurrence, or other basis) and amount (including a description of how
deductibles and ceilings are calculated and operate) of coverage; and

 

(v)                                 a
description of any retroactive premium adjustments or other loss-sharing
arrangements.

 

With respect to each
insurance policy identified on §3(r) of the Disclosure Schedule as currently
maintained by the Acquired Asset Entities: (A) the policy is legal, valid,
binding, enforceable, and in full force and effect; (B) neither the applicable
Acquired Asset Entity nor, to the Knowledge of the Acquired Asset Entities, any
other party to the policy is in breach or default (including with respect to
the payment of premiums or the giving of notices), and, to the Knowledge of the
Acquired Asset Entities, and no event has occurred which, with notice or the
lapse of time, would constitute such a breach or default, or permit
termination, modification, or acceleration, under the policy; and (C) no party
to the policy has repudiated any provision thereof. The Acquired Centers (to
the extent in existence) have been covered during the past six (6) years by
insurance which is, in the judgment of the Acquired Asset Entities, in scope
and amount customary and reasonable for the operations in which the Acquired
Centers have been engaged during the aforementioned period. §3(r) of the
Disclosure Schedule describes any self-insurance arrangements affecting the
Acquired Asset Entities relating to the Acquired Assets.

 

(s)                                  Litigation.  §3(s) of the Disclosure Schedule sets forth
each instance in which the Acquired Asset Entities or any of the Acquired
Assets (i) is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge or (ii) is a party or, to the Knowledge of the Acquired Asset
Entities, is threatened to be made a party to any action, suit, proceeding,
hearing, or investigation of, in, or before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator. None of the actions, suits, proceedings, hearings, and investigations
set forth in §3(s) of the Disclosure Schedule would reasonably be expected to
have a Material Adverse Effect on the Acquired Assets.

 

(t)                                    Warranty.
 With respect to Acquired Asset Entities’
contracts relating to the Acquired Centers other than the Talecris Supply
Agreement:  (i) all plasma and
plasma-related products collected, processed, stored, sold or delivered by the
Acquired Asset Entities have been in conformity in all material respects with
all applicable contractual commitments and all express and implied warranties,
and no Acquired Asset Entity has any Liability for damages or otherwise in
connection therewith, subject only to the reserve for warranty claims set forth
on the face of the Most Recent Balance Sheet (rather than in any notes thereto,
and then only up to the amount set forth thereon with respect to each such line
item) as may be thereafter adjusted through the Closing Date in accordance with
the past custom and practice of the Acquired Asset Entities and as reflected in
the Pre-Closing Statement; and (ii) no plasma and plasma-related products
collected, processed, stored, sold or delivered by any Acquired Asset Entity
are subject to any guaranty, warranty, or other indemnity beyond or deviating
from the applicable standard terms and conditions of sale.

 

(u)                                 Liability.  No Acquired Asset Entity has any Liability
arising out of any injury to individuals or property as a result of the
collection, ownership, possession, or use of any plasma and plasma-related
products collected, processed, stored, sold or delivered by the Acquired Asset
Entities at or from an Acquired Center

 

29

 

(v)                                 Employees.  To the Knowledge of the Acquired Asset
Entities, no employee listed on Exhibit K has any plans to terminate
employment with any Acquired Asset Entity. No Acquired Asset Entity is a party
to or bound by any collective bargaining Contract, nor has it experienced any
strikes, grievances, claims of unfair labor practices, or other collective
bargaining disputes. No Acquired Asset Entity has committed any unfair labor
practice in violation of Applicable Law. To the Knowledge of the Acquired Asset
Entities, no organizational effort is presently being made or is threatened by
or on behalf of any labor union with respect to any employees of the Acquired
Asset Entities. Except as set forth in §3(v) of the Disclosure Schedule, each
Acquired Asset Entity has paid all salary, bonus and other amounts due and
owing to the Employees as of such Acquired Asset Entity’s most recent payroll
date.

 

(w)                               Employee
Benefits.

 

(i)                                     §3(w)
of the Disclosure Schedule lists each Employee Benefit Plan that any Acquired
Asset Entity maintains for any Employee, to which any Acquired Asset Entity
contributes or has any obligation to contribute, or with respect to which any
Acquired Asset Entity has any Liability or potential Liability and the Acquired
Asset Entities have delivered or otherwise made available all such Employee
Benefit Plans to the Buyer.

 

(A)                              Each
such Employee Benefit Plan (and each related trust, insurance contract, or
fund) has been maintained, funded and administered substantially in accordance
with the terms of such Employee Benefit Plan and the terms of any applicable
collective bargaining Contract and complies in form and in operation in all
material respects with the applicable requirements of ERISA, the Code, and
other applicable laws.

 

(B)                                The
requirements of COBRA have been met in all material respects with respect to
each such Employee Benefit Plan which is a group health plan subject to COBRA. The
Acquired Asset Entities have not incurred any indirect Liability under COBRA
with respect to any group health plan maintained by any ERISA Affiliate for any
Employee.

 

(C)                                All
contributions (including all employer contributions and employee salary
reduction contributions) required to be made to or under any Employee Benefit
Plan which is an Employee Pension Benefit Plan and all contributions for any
period ending on or before the Closing Date which are not yet due will be made
or accrued in accordance with the past custom and practice of the Acquired
Asset Entities. All premiums or other payments for all periods ending on or
before the Closing Date will have been paid or accrued with respect to each
such Employee Benefit Plan which is an Employee Welfare Benefit Plan.

 

(D)                               Each
such Employee Benefit Plan which is intended to meet the requirements of a “qualified
plan” under Code §401(a) has received a determination letter or is covered by
an opinion letter issued by the Internal Revenue Service that such Employee
Benefit Plan is so qualified, and, to the Knowledge of the Acquired Asset
Entities, nothing has occurred since the date of such determination or opinion
letter that

 

30

 

could
reasonably be expected to have an adverse effect on the qualified status of any
such Employee Benefit Plan which may not be cured.

 

(E)                                 The
Acquired Asset Entities have delivered or made available to the Buyer correct
and complete copies of the plan documents and, where applicable, of the summary
plan descriptions, the most recent determination or opinion letter received
from the Internal Revenue Service, the most recent annual report (IRS Form
5500, with all applicable attachments), and all related trust agreements,
insurance contracts, and other funding arrangements which implement each such
Employee Benefit Plan.

 

(ii)                                  No
Employee Benefit Plan is an Employee Pension Benefit Plan covered by Code §412,
ERISA §302 or Title IV of ERISA. No Acquired Asset Entity has incurred any
Liability, direct or indirect, under Title IV of ERISA which will not have been
satisfied prior to the Closing Date or which could become a Liability of Buyer.

 

(iii)                               No
Employee Benefit Plan contains any provision or is subject to any Applicable
Law that would prohibit the transactions contemplated by this Agreement or that
would give rise to any vesting of benefits, severance, termination, or other
payments or Liabilities as a result of the transactions contemplated by this
Agreement, and no payments or benefits under any Employee Benefit Plan or other
agreement of any Acquired Asset Entity will be considered “excess parachute
payments” under Section 280G of the Code. No Acquired Asset Entity has declared
or paid any bonus compensation in contemplation of the transactions
contemplated by this Agreement. No payments or benefits under any Employee
Benefit Plan or other agreement of any Acquired Asset Entity are, or are
expected to be, subject to the disallowance of a deduction under Section 162(m)
of the Code.

 

(iv)                              No
employee of any Acquired Asset Entity has been classified as an independent
contractor.

 

(v)                                 No
Employee Benefit Plan is a Multiemployer Plan and no Acquired Asset Entity nor
any ERISA Affiliate has contributed to, participated in or had (nor do they
currently have) any Liability (including withdrawal liability as defined in
ERISA §4201) with respect to any Multiemployer Plan covering any employee of
any Acquired Asset Entity within the preceding five years.

 

(vi)                              No
Employee Benefit Plan provides post-retirement medical, health, or life
insurance coverage to or for the benefit of current or future retired or
terminated directors, officers or Employees (or any spouse or other dependent
thereof) other than mandatory coverage required by COBRA.

 

(x)                                   Guaranties.  No Acquired Asset Entity is a guarantor or
otherwise is liable for any Liability or obligation (including Indebtedness) of
any other Person relating to any of the Acquired Assets, other than any such
Liability, obligation or Indebtedness that is being paid at Closing pursuant to
§2(c) above.

 

31

 

(y)                                 Environmental,
Health, and Safety Matters.

 

(i)                                     Each
of the Acquired Asset Entities and their respective Affiliates who own or owned
Leased Real Property have complied in all material respects and is currently in
material compliance with all Environmental, Health, and Safety Requirements
relating to the Acquired Assets.

 

(ii)                                  Without
limiting the generality of the foregoing, each of the Acquired Asset Entities
and their respective Affiliates who own or owned Leased Real Property has
obtained and complied in all material respects with, and is in material
compliance with, all permits, licenses and other authorizations that are
required pursuant to Environmental, Health, and Safety Requirements for the
occupation of the Acquired Centers; a list of all such permits, licenses and
other authorizations is set forth on §3(y) of the Disclosure Schedule.

 

(iii)                               None
of the Acquired Asset Entities or their respective Affiliates who own or owned
Leased Real Property have received any written or oral notice, report or other
information regarding any actual or alleged material violation of
Environmental, Health, and Safety Requirements, or any material Liabilities or
potential material Liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), including any investigatory, remedial or corrective
obligations, relating to the Acquired Centers arising under Environmental,
Health, and Safety Requirements.

 

(iv)                              To
the Acquired Asset Entities’ Knowledge, none of the following exists at any
Acquired Center: (A) underground storage tanks, (B) materials or equipment
containing polychlorinated biphenyls, or (C) landfills, surface impoundments,
or disposal areas.

 

(v)                                 To
the Acquired Asset Entities’ Knowledge, there are no friable
asbestos-containing materials at any Acquired Center, and none of the Acquired
Asset Entities is under any present obligation under Environmental, Health and
Safety Requirements to remove, abate or remediate any asbestos-containing
materials at any Acquired Center.

 

(vi)                              None
of the Acquired Asset Entities or their respective Affiliates who own or owned
Leased Real Property have treated, stored, disposed of, arranged for or
permitted the disposal of, transported, handled, or released any substance,
including without limitation any hazardous substance, at any Acquired Center,
or owned or operated any Acquired Center (and no such Acquired Center is contaminated
by any such substance) in a manner that has given or would give rise to
material liabilities relating to the same, including any liability for response
costs, corrective action costs, personal injury, property damage, natural
resources damages or attorney fees, pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Solid Waste
Disposal Act, as amended or any other Environmental, Health, and Safety
Requirements.

 

(vii)                           To
the Acquired Asset Entities’ Knowledge, except as set forth in §3(y) of the
Disclosure Schedule, neither this Agreement nor the consummation of the
transactions contemplated by this Agreement will result in any obligations for
site investigation or cleanup at any Acquired Center, or notification to or
consent of Government Authorities or third parties, pursuant to any of the
so-called “transaction-triggered” or “responsible property transfer”
Environmental, Health, and Safety Requirements.

 

32

 

(viii)                        No
Acquired Asset Entity has, either expressly or by operation of law, assumed or
undertaken any material Liability, including without limitation any obligation
for corrective or remedial action, of any other Person relating to Environmental,
Health, and Safety Requirements.

 

(z)                                   Certain
Business Relationships With Affiliates. 
Except as set forth on §3(z) of the Disclosure Schedule, no member,
manager or other Affiliate of any Acquired Asset Entity, nor any of their
respective Affiliates have been involved in any business arrangement or
relationship with any Acquired Asset Entity within the past 12 months relating
to the Acquired Assets, and no member, manager or other Affiliate of any
Acquired Asset Entity, nor any of their respective Affiliates, owns any asset,
tangible or intangible, which is used by the Acquired Asset Entities in the
development, management or operation of the Acquired Centers (including,
without limitation, any Seller Intellectual Property).

 

(aa)                            Books
and Records.  The Acquired Asset
Entities maintain accurate books and records reflecting their respective assets
and Liabilities and maintain proper and adequate internal accounting controls
and procedures, and no Acquired Asset Entity has received written notification
from any accountants, independent auditors or other consultants, or
Governmental Authorities challenging the adequacy or requesting modification of
such controls and procedures. Such controls and procedures provide assurance
that: (i) transactions are executed with management’s authorization; (ii)
transactions are recorded as necessary to permit preparation of the Acquired
Asset Entities financial statements and to maintain accountability for the
Acquired Asset Entities; (iii) access to the Acquired Asset Entities’ assets is
permitted only in accordance with management’s authorization; (iv) the
reporting of the assets of the Acquired Asset Entities is compared with
existing assets at regular intervals; and (v) accounts, notes and other
receivables are recorded accurately, and proper and adequate procedures are
implemented to effect the collection thereof on a current and timely basis.

 

(bb)                          Disclosure.  The representations and warranties contained
in this §3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this §3 not misleading.

 

(cc)                            Undeveloped
Centers.  §3(cc) of the Disclosure
Schedule sets forth, in reasonable detail, the status of each Undeveloped
Center, as well as a good faith estimate of the projected Development Costs (as
defined below) for each Undeveloped Center, which estimate is based upon
assumptions that the Acquired Asset Entities believe are reasonable and
consistent with their past practices. Each such Undeveloped Center meets the
general and specific specifications set forth on Exhibit J hereto.

 

(dd)                          Investment.  The Parent (i) understands that the shares of
Holdings Common Stock issuable hereunder have not been and will not be registered
under the Securities Act, or under any state securities laws, and are being
offered and sold in reliance upon federal and state exemptions for transactions
not involving any public offering, (ii) is acquiring such Holdings Common Stock
solely for its own account for investment purposes, and not with a view to the
distribution thereof (except for distributions of Holdings Common Stock for no
consideration to permitted transferees of Parent who will be bound by the
restrictions on transfer of Holdings Common Stock contemplated herein and in
the Stockholders Agreement (as defined below)),

 

33

 

(iii) is a sophisticated
investor with knowledge and experience in business and financial matters, (iv)
has received certain information concerning the Buyer and Holdings and has had
the opportunity to obtain additional information as desired in order to
evaluate the merits and the risks inherent in holding Holdings Common Stock,
(v) is able to bear the economic risk and lack of liquidity inherent in holding
Holdings Common Stock, and (vi) is an Accredited Investor for the reasons set
forth in §3(dd) of the Disclosure Schedule.

 

4.                                       Representations
and Warranties of the Buyer and Holdings.  
Each of the Buyer and Holdings represents and warrants, jointly and
severally, to the Acquired Asset Entities that the statements contained in this
§4 are correct and complete as of the date of this Agreement and will be
correct and complete as of the Closing Date (as though made then and as though
the Closing Date were substituted for the date of this Agreement throughout
this §4), except as set forth in the disclosure schedule of the Buyer and
Holdings attached hereto as Exhibit F-1 (“Buyer’s Disclosure Schedule”).
The Buyer’s Disclosure Schedule will be arranged in paragraphs corresponding to
the lettered and numbered paragraphs contained in this §4. The disclosures set
forth in any such lettered and numbered paragraph in the Buyer’s Disclosure
Schedule shall qualify any other specific lettered and numbered paragraph of
this §4 if and to the extent that it is readily apparent from a reasonable
reading of the disclosure that such disclosure is applicable to such other
lettered and numbered paragraph of this §4. For example, the mere listing (or
inclusion of a copy) of a document or other item shall not be deemed adequate
to disclose an exception to a representation or warranty made herein (unless
the representation or warranty has to do with the existence of the document or
other item itself).

 

(a)                                  Organization.   Such
Party is a corporation duly organized, validly existing, and in good standing
under the laws of the jurisdiction of its incorporation, with full corporate
power and authority to conduct its business as it is now being conducted and to
own or use the properties and assets that it purports to own or use. Such Party
is duly qualified and authorized to transact business as a foreign corporation
and is in good standing in every jurisdiction where required, except for such
failures as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on such Party. Such Party has made available
to the Acquired Asset Entities complete and correct copies of its certificate
of incorporation and bylaws, each as amended to the date hereof, and each as so
delivered is in full force and effect.

 

(b)                                 Authorization
of Transaction.   Such Party has full power and authority
(including full corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of such Party, enforceable against it
in accordance with its terms and conditions, except that such enforceability
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to creditors’ rights generally and is subject to general
principles of equity. The performance by such Party of its obligations under
this Agreement, including, in the case of Holdings, the issuance of Holdings
Common Stock to the Parent as provided herein, have been duly and validly
authorized by all necessary corporate action.

 

(c)                                  Noncontravention.   Neither the execution and the delivery of
this Agreement, nor the consummation of the transactions contemplated hereby
(including the assignments and assumptions referred to in §2 above and the
repurchase obligations referred to in §2(h)(ii) above), will (i) violate, in
any material respect, any constitution, statute, regulation, rule,

 

34

 

injunction, judgment, order,
decree, ruling, or other restriction of any Governmental Authority to which
such Party is subject or violate, in any respect, any provision of its
certificate of incorporation or bylaws, (ii) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under any material contract or other material arrangement to which such
Party is a party or by which it is bound or to which its assets is subject. Such
Party does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any Governmental Authority or other
third party, other than the filing of a Notification and Report Form and
related material with the Federal Trade Commission and the Antitrust Division
of the United States Department of Justice under the Hart-Scott-Rodino Act, in
order for the Parties to consummate the transactions contemplated by this
Agreement (including the assignments and assumptions referred to in §2 above
and the repurchase obligations referred to in §2(h)(ii) above).

 

(d)                                 Brokers’
Fees.  Such Party has no Liability or
obligation to pay any fees or commissions to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement for which the
Acquired Asset Entities could become liable or obligated.

 

(e)                                  Pro
Forma Capitalization; Capitalization. 
The pro forma capitalization table of Holdings set forth in Exhibit G
is correct and complete in all material respects as of the date hereof. The
authorized capital stock of Holdings consists of 100,000,000 shares of Holdings
Common Stock, of which no shares were outstanding as of the close of business
on the date hereof, and 5,000,000 shares of Series A Convertible Preferred
Stock and 5,000,000 shares of Series B Convertible Preferred Stock, par value
$0.01 per share (collectively, the “Holdings Preferred Stock”), of which
100,000 shares of Series A Convertible Preferred Stock and 192,310 shares of
Series B Convertible Preferred Stock were outstanding as of the close of
business on the date hereof. All of the outstanding shares of Holdings Common
Stock have been duly authorized and are validly issued, fully paid and
nonassessable. Holdings has no Holdings Common Stock or Holdings Preferred
Stock reserved for issuance, except that, as of the date hereof, there are (i)
approximately 8,100,00 shares of Holdings Common Stock issuable upon conversion
of Holdings’ outstanding 14% Junior Secured Convertible Notes due 2013, and
(ii) 1,449,873 shares of Holdings Common Stock reserved for issuance pursuant
to the Talecris Biotherapeutics Holdings Corporation 2005 Stock Option and
Incentive Plan, of which 1,147,266 shares underlie outstanding grants made
thereunder. The Buyer is an indirect wholly-owned subsidiary of Holdings. Holdings,
or a direct or indirect wholly-owned subsidiary of Holdings, owns 100% of the
outstanding shares of capital stock of each of Holdings’ subsidiaries. Except
as set forth above and on §4(e) of the Buyer’s Disclosure Schedule, there are
no preemptive or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements, calls, commitments or rights of any kind, including
stockholders’ agreements or registration rights agreements, that obligate
Holdings or any of its subsidiaries to issue or to sell any shares of capital
stock or other securities of Holdings or any of its subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable for,
or giving any Person a right to subscribe for or acquire, any securities of
Holdings or any of its subsidiaries, and no securities or obligation evidencing
such rights are authorized, issued or outstanding, or that obligate Holdings or
any of its subsidiaries to file a registration statement with the Securities
and Exchange Commission under specified circumstances. Holdings does not have
outstanding any bonds,

 

35

 

debentures, notes or other
obligations the holders of which have the right to vote (or convertible into or
exercisable for securities having the right to vote) with the stockholders of
Holdings on any matter.

 

(f)            Financial Statements.  Holdings has delivered to the Acquired Asset
Entities true, correct and complete copies of the following financial
statements (collectively, the “Holdings Financial Statements”): (i)
audited consolidated balance sheet and statements of income, changes in
stockholders’ equity, and cash flow as of December 31, 2005 and for the period
from inception (March 31, 2005) through December 31, 2005 for Holdings; and
(ii) unaudited consolidated balance sheet (the “Holdings Balance Sheet”)
and statements of income, changes in stockholders’ equity, and cash flow as of
and for the eight months ended August 31, 2006 for Holdings. The Holdings
Financial Statements (including the notes thereto) have been prepared in
accordance with GAAP (except for the absence of footnotes and year-end
adjustments with respect to unaudited statements) applied on a consistent basis
throughout the periods covered thereby, present fairly in all material respects
the financial condition of Holdings and its subsidiaries as of such dates and
the results of operations of Holdings and its subsidiaries for such periods,
are correct and complete in all material respects, and are consistent with the
books and records of Holdings and its subsidiaries (which books and records are
correct and complete in all material respects).

 

(g)                                 Events
Subsequent to Most Recent Financial Statements.  Since August 31, 2006, there has not been any
Material Adverse Change in the Buyer or Holdings. Without limiting the
generality of the foregoing, since that date (i) there have been no amendments
or changes in the certificate of incorporation or bylaws of Holdings; (ii)
except insofar as may be required by GAAP or Applicable Law, there has been no
material change in accounting principles, methods or practices by Holdings or
any of its subsidiaries; (iii) there has been no declaration, setting aside or
payment of any dividend or distribution with respect to any capital stock of
Holdings or any redemption or repurchase or other acquisition of any of its
securities; (iv) there has been no material purchase or material sale, lease,
transfer, assignment or other transaction by Holdings or any of its
subsidiaries of any of its assets, tangible or intangible; (v) neither Holdings
nor any of its subsidiaries has issued any material note, bond or other debt
security or created, incurred, assumed or guaranteed any material indebtedness
for borrowed money or material capitalized lease obligation; and (vi) neither
Holdings nor any of its subsidiaries has committed to any of the foregoing.

 

(h)                                 Undisclosed
Liabilities.  Neither Holdings nor
any of its subsidiaries is subject to any Liability, other than those
Liabilities (i) reflected or reserved against in the Holdings Balance Sheet
(rather than in any notes thereto, and then only up to the amount set forth
thereon with respect to each such line item); or (ii) incurred in the ordinary
course of the business of Holdings and its subsidiaries and not required to be
set forth in the Holdings Financial Statements under GAAP.

 

(i)                                     Legal
Compliance.  Holdings and its
subsidiaries have complied with all Applicable Law, except for such
noncompliance as would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect on Holdings. Since December 31, 2005, neither
Holdings nor any of its subsidiaries has received any notice from any
Governmental Authority that the operations of Holdings or any of its
subsidiaries are being

 

36

 

conducted in violation of any
Applicable Law or are the subject of any investigation or review pending or, to
the Knowledge of the Buyer and Holdings, threatened by any Governmental
Authority relating to any alleged violation of Applicable Law, except such
notices as to violations or alleged violations that could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect
on Holdings.

 

(j)                                     Litigation.  Neither Holdings nor any of its subsidiaries
is subject to any material outstanding injunction, judgment, order, decree,
ruling, or charge. Neither Holdings nor any of its subsidiaries is a party or,
to the Knowledge of the Buyer or Holdings, is threatened to be made a party to
any action, suit, proceeding, hearing, or investigation of, in, or before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction or before any arbitrator, except those that would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect on Holdings.

 

(k)                                  Books
and Records.  Holdings and its
subsidiaries maintain accurate books and records reflecting their assets and
Liabilities and maintain proper and adequate internal accounting controls and
procedures, and neither Holdings nor any of its subsidiaries has received
written notification from any accountants, independent auditors or other
consultants, or Governmental Authorities challenging the adequacy or requesting
modification of such controls and procedures. Such controls and procedures
provide assurance that: (i) transactions are executed with management’s
authorization; (ii) transactions are recorded as necessary to permit
preparation of Holdings’ and its subsidiaries’ financial statements and to
maintain accountability for the assets of Holdings and its subsidiaries; (iii)
access to the assets of Holdings and its subsidiaries is permitted only in
accordance with management’s authorization; (iv) the reporting of Holdings and
its subsidiaries’ assets is compared with existing assets at regular intervals;
and (v) accounts, notes and other receivables are recorded accurately, and
proper and adequate procedures are implemented to effect the collection thereof
on a current and timely basis.

 

(l)                                     Disclosure.  Neither the representations and warranties
contained in this §4 nor the documents identified in §4(l) of the Buyer’s
Disclosure Schedule contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this §4 or in such documents not misleading.

 

5.                                       Pre-Closing
Covenants.  The Parties agree as
follows with respect to the period between the execution of this Agreement and
the Closing.

 

(a)                                  General.  Each of the Parties will use its commercially
reasonable efforts to take all action and to do all things necessary, proper,
or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not waiver, of the
closing conditions set forth in §7 below).

 

(b)                                 Human
Resources Matters.  The Acquired
Asset Entities will use commercially reasonable efforts to implement human
resource systems, including with respect to recruiting, training and
certification at the Acquired Centers in accordance with the implementation
schedule and procedures set forth on Exhibit I hereto.

 

37

 

(c)                                  Notices
and Consents.  Each of the Acquired
Asset Entities will give any notices to third parties, and will use
commercially reasonable efforts to obtain any third party consents, that the
Buyer and Holdings may request in connection with the matters referred to in
§3(c) above. Each of the Parties will give any notices to, make any filings
with, and use commercially reasonable efforts to obtain any authorizations,
consents, and approvals of Governmental Authorities in connection with the
matters referred to in §3(c) and §4(c) above. Without limiting the generality of
the foregoing, each of the Parties will file any Notification and Report Forms
and related material that it may be required to file with the Federal Trade
Commission and the Antitrust Division of the United States Department of
Justice under the Hart-Scott-Rodino Act, will use commercially reasonable
efforts to obtain an early termination of the applicable waiting period, and
will make any further filings pursuant thereto that may be necessary, proper,
or advisable in connection therewith.

 

(d)                                 Operation
of Business.  The Acquired Asset
Entities will not engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business with respect to the
Acquired Centers without the consent of the Buyer, such consent not to be unreasonably
withheld or delayed. Without limiting the generality of the foregoing, no
Acquired Asset Entity will (i) declare, set aside, or pay any dividend or make
any distribution with respect to its membership interests or redeem, purchase,
or otherwise acquire any of its membership interests,  (ii) transfer any of the Acquired Assets or
employees between regions, plasma collection centers, or otherwise, (iii) make
any capital expenditure with respect to any Acquired Center in excess of
$25,000, other than as set forth in §3(g)(v) of the Disclosure Schedule or
§6(e)(vii) below, or (iv) otherwise engage in any practice, take any action, or
enter into any transaction of the sort described in §3(g) above. In addition,
as of the date immediately prior to the Closing Date, the Acquired Asset
Entities shall contribute to the Acquired Asset Entities’ 401(k) plan a
nonforfeitable discretionary employer contribution of at least $50,000,  allocated solely to the accounts of Transferred Employees. The
Acquired Asset Entities shall take any and all actions necessary to effectuate
the contribution described in the preceding sentence, including but not limited
to, amending the Acquired Asset Entities’ 401(k) plan.

 

(e)                                  Preservation
of Business.   The Acquired Asset
Entities will:

 

(i)                                     keep the business
of the Acquired Centers substantially intact, including the present operations,
physical facilities, working conditions at the Acquired Centers, and
relationships with lessors, licensors, suppliers, customers, and employees of
the Acquired Centers and will continue to conduct the business and operate Open
Centers and Unlicensed Centers included in the Acquired Centers in a manner
designed to maintain, and to the extent reasonably practicable, increase the
current and future production and delivery volumes of plasma at such Acquired
Centers while complying with Applicable Law and maintaining appropriate quality
standards, and otherwise  consistent
with past practices;

 

(ii)                                  subject to the Buyer’s
compliance with §5(m) below, pay all outstanding amounts owed or owing to any
and all vendors or suppliers of the Acquired Centers as and when such amounts
become due and payable and shall keep current all accounts payable relating to
the operation of the Acquired Centers (including, without limitation, all
accounts with Haemonetics Corporation), consistent with past practices (except
for any amounts disputed in good faith);

 

38

 

(iii)          continue
to use commercially reasonable efforts to address any and all regulatory and
compliance issues related to any and all FDA inspections, the recently
developed Corporate CAPA and the internal audits conducted by the Acquired
Asset Entities and any of their respective Affiliates;

 

(iv)          subject
to the Buyer’s providing funding pursuant to §5(m) below, maintain adequate
liquidity consistent with the thirteen week cash flow forecast attached hereto
as Exhibit L to continue the build out or development of the Undeveloped
Centers and Unlicensed Centers and the acquisition of equipment and other
tangible assets reasonably necessary or desirable for the operation and
development of such centers;

 

(v)           use
commercially reasonable efforts to continue its consulting engagement with
Focus CVS (including, without limitation, maintaining and paying the agreed
on-time completion bonus) and cooperate with Focus CVS in a manner reasonably
designed to produce the following deliverables: 
full donor management software validation scripts, traceability
analysis, hazard analysis, development and entering of test data for scripts
and release of the software to validation and production;

 

(vi)          process
and use commercially reasonable efforts to reduce the backlog of each Acquired
Center’s Lookbacks  such that, as of the Closing Date, no unprocessed
Lookback is more than four weeks old;

 

(vii)         use
commercially reasonable efforts to cause its testing staff (or outside
consultants) to execute as many validation scripts for the Haemonetics
automated donor management system as practicable; and

 

(viii)        subject
to §5(j) below, use commercially reasonable efforts to negotiate lease
agreements for the following Acquired Centers and additional plasma collection
centers referenced in §6(j):  Fort Worth
(3), TX, Monroe (2), LA, Augusta, GA, Indianapolis, IN, Dayton, OH, Toledo, OH
and McAllen, TX.

 

Notwithstanding anything contained in this Agreement to the contrary,
to the extent any trade payable or other current Liability of any Acquired
Asset Entity incurred in the Ordinary Course of Business is more than 30 days
past due and not being disputed in good faith, the Acquired Asset Entities will
pay any and all such amounts owed or owing.

 

(f)            Access; Interim Financial
Statements.  The Acquired Asset
Entities will permit the Buyer and its representatives to have reasonable
access during normal business hours, upon reasonable prior notice, to such
premises, properties, personnel (including the Acquired Asset Entities’
respective directors, officers, managers, members, employees, counsel,
independent accountants, consultants and other advisors), books and records
(including Tax records and financial, operating and other data), Contracts, and
documents of or pertaining to the Acquired Assets as the Buyer may reasonably
request, provided that the activities of the Buyer in connection with any such
access shall be conducted so as to minimize any disruption of the operations of
the Acquired Asset Entities. For each of the Parent’s fiscal months beginning
with September 2006 through the Closing, the Acquired Asset Entities will
deliver to the Buyer and Holdings, no later than 30 days after each such fiscal
month’s end, the Parent’s unaudited consolidated and consolidating balance
sheets and statements of income, changes in stockholders’ equity, and cash flow
as of the date of the such fiscal month end and for the year-to-date period
then ended. Additionally, the Acquired Asset Entities will deliver to the Buyer

 

39

 

and Holdings, prior to the
Closing Date, the Parent’s pro forma consolidated balance sheets and statements
of income, changes in stockholders’ equity, and cash flow as of and for the
nine months ended September 30, 2006, which financial statements shall not
reflect or give effect to any assets and Liabilities that are not Acquired
Assets or Assumed Liabilities or the operations or activities of the Acquired
Asset Entities unrelated to the Acquired Centers.

 

(g)           Notice of Developments.  Each Party will give prompt written notice to
the other Party of any Material Adverse Change or, in the case of the Acquired
Asset Entities, any Material Curtailment Event causing a breach of any of its
respective representations and warranties in §3, §4 and §5 above. No disclosure
by any Party pursuant to this §5(g), however, shall be deemed to amend or
supplement the Disclosure Schedule or the Buyer’s Disclosure Schedule, as the
case may be, or to prevent or cure any misrepresentation, breach of warranty, or
breach of covenant; provided, however, that in the event that the
Closing occurs notwithstanding notice of any such Material Adverse Change or
Material Curtailment Event, the Party receiving such notice will be deemed to
have waived any claim that it may have in connection therewith and the
applicable sections of the Disclosure Schedule or the Buyer’s Disclosure
Schedule shall be deemed to be amended by such notice.

 

(h)           Exclusivity.  No Acquired Asset Entity will, directly or
indirectly through any Affiliate or other Person, (i) solicit, initiate, or
encourage the submission of any proposal or offer from any Person relating to
the acquisition of any membership interests or other voting securities, or any
of the Acquired Assets (including any acquisition structured as a merger,
consolidation, or share exchange) or (ii) participate in any discussions or
negotiations regarding, furnish any information with respect to, assist or
participate in, or facilitate in any other manner any effort or attempt by any
Person to do or seek any of the foregoing. The Acquired Asset Entities will
notify the Buyer immediately if any Person makes any proposal, offer, inquiry,
or contact with respect to any of the foregoing. Nothing in this §5(h) shall
limit any Acquired Asset Entity from undertaking any of the aforementioned
activities solely with respect to assets other than Acquired Assets or assets
related to the additional plasma collection centers under §6(j) hereof.

 

(i)            Maintenance of Leased Real
Property.  The Acquired Asset
Entities will, to the extent required of the applicable Acquired Asset Entity
under the applicable Lease, maintain the Leased Real Property, including all of
the Improvements, in substantially the same condition as of the date of this
Agreement, ordinary wear and tear not caused by neglect excepted, and shall not
demolish, alter, modify or remove any of the existing Improvements, or erect
new Improvements on the Leased Real Property or any portion thereof, without
the prior written consent of the Buyer. The Acquired Asset Entities shall use
commercially reasonable efforts to enforce the landlords’ obligations under the
Leases, including, without limitation, the making of required repairs.

 

(j)            Leases.  None of the Acquired Asset Entities shall
amend, modify, extend, renew or terminate any Lease, nor shall any of the
Acquired Asset Entities enter into any new lease, sublease, license or other
Contract for the development, use or occupancy of any real property relating to
any Acquired Center or Additional Center (including, without limitation, the
leases for the Toledo, OH, Indianapolis, IN, Augusta, GA, Fort Worth (3), TX,
Dayton, OH, Monroe (2), LA, Raleigh, NC and McAllen, TX centers and any other
New Lease), without the prior

 

40

 

written consent of the Buyer,
which consent shall not be unreasonably withheld or delayed. Notwithstanding
the above, the Acquired Asset Entities shall (i) in the case of any Lease
identified in §3(l)(ii) of the Disclosure Schedule with an Affiliate of an
Acquired Asset Entity or any member or manager of an Acquired Asset Entity or
any of their respective Affiliates (each, an “Affiliate Lease”), execute
and deliver, and cause the other party or parties to such Affiliate Lease to
execute and deliver, to the Buyer and Holdings all Lease Closing Documents with
respect to such Affiliate Lease; and (ii) in the case of all Leases other than
Affiliate Leases (each, a “Non-Affiliate Lease”), execute and deliver,
and use commercially reasonable efforts to cause the other party or parties to
such Non-Affiliate Lease to execute and deliver, all Lease Closing Documents
with respect to such Non-Affiliate Lease; provided,
however, none of the Acquired
Asset Entities shall be required to incur any out-of-pocket, third party costs,
fees or expenses or advance funds on behalf of the Buyer in excess of an
aggregate amount of $50,000 in connection with its obligations under this
clause (ii) and §§5(k) and 5(l) below (the “Expense Cap”).

 

(k)           Title Insurance.  To the extent requested by the Buyer, the
Acquired Asset Entities shall use commercially reasonable efforts to assist the
Buyer in obtaining the commitments (the “Title Commitments”) for a 1992
ALTA Owner’s Title Insurance Policy with leasehold endorsements or other form
of policy reasonably acceptable to the Buyer for the Leased Real Property,
issued by a title insurance company satisfactory to the Buyer (the “Title
Company”) and title insurance policies from the Title Company prior to the
Closing, including using commercially reasonable efforts to remove from title
any liens or encumbrances which are not Permitted Encumbrances and furnishing
the Title Company such affidavits or memoranda, but not indemnities or other
assurances (other than “gap indemnities” which shall be reasonably satisfactory
to the Acquired Asset Entities), as the Title Company may reasonably request to
issue the Title Policies; provided,
however, that none of the
Acquired Asset Entities shall be required to provide any affidavits, memoranda,
indemnities or other assurances (other than “gap indemnities” which shall be
reasonably satisfactory to the Acquired Asset Entities) that would require any
Acquired Asset Entity to incur any liability or to make any representation,
warranty or other statement with respect to any matter for which a similar
representation, warranty or other statement is not expressly provided in this
Agreement or which would extend the duration of or increase the extent of any
Acquired Asset Entity’s liability with respect to any matter. The Buyer shall
pay all fees, costs and expenses with respect to, arising out of or in
connection with obtaining the Title Commitments or any title insurance
policies, and none of the Acquired Asset Entities shall be required to incur
any out-of-pocket, third party costs, fees or expenses or advance funds on
behalf of the Buyer in excess of the Expense Cap.

 

(l)            Non-Disturbance Agreements.  The Acquired Asset Entities will use
commercially reasonable efforts to obtain and deliver to the Buyer a
non-disturbance agreement with respect to each Lease identified in §3(l)(ii) of
the Disclosure Schedule, in form and substance satisfactory to the Buyer, from
each lender encumbering any real property underlying the Leased Real Property
for such Lease, provided that no Acquired Asset Entity shall be required to
incur any out-of-pocket, third party costs, fees or expenses or advance funds
on behalf of the Buyer in excess of the Expense Cap.

 

41

 

(m)          Advances Against Purchase Price.

 

(i)            Without
limiting the generality of §§5(d) and (e) above, from and after the date of
this Agreement, the Acquired Asset Entities shall maintain their existing
revolving credit facility with General Electric Capital Corporation and use
such facility to fund their existing operations as they have done in the
ordinary course of business, consistent with past practices. As a condition
precedent to submitting any Advance Request to the Buyer pursuant to §5(m)(ii)
below, the Acquired Asset Entities shall have first exhausted their
availability under such facility. Additionally, notwithstanding any other
provision of the Talecris Supply Agreement to the contrary, as of October 20,
2006, Talecris shall not make any additional advances to the Acquired Asset
Entities against the $12,000,000 prepayment line established thereunder.

 

(ii)           The
Acquired Asset Entities may require the Buyer to loan the Acquired Asset
Entities, in one or more installments evidenced by unsecured promissory notes
(each, an “Advance” and collectively, “Advances”), up to an
aggregate amount of $5,000,000 by submitting a written request for an Advance
to the Buyer (each, an “Advance Request”). Each Advance Request shall
specify the aggregate amount of the requested Advance, as well as specifically
itemize the amount of, and identify in reasonable detail nature of, the
proposed use(s) of the funds so advanced within each of the following
categories:

 

(A)         interest
expense incurred by the Acquired Asset Entities in the ordinary course of the
Acquired Centers’ business between November 4, 2006 and November 18, 2006 and
set forth in Exhibit L-1 hereto (“Permitted Interest Expense”); provided,
however, that the foregoing period shall be extended from
November 18, 2006 to the Closing Date if the Closing is delayed by reason of
the failure of any condition precedent under §7(b) hereof that results solely
from the Buyer’s or Holdings’ breach of any representation, warranty, or
covenant contained in this Agreement; and  provided  further
that Permitted Interest Expense shall not include any interest payable
(1) to any Acquired Asset Entity, any member or manager or any Acquired Asset
Entity, or any Affiliate of any Acquired Asset Entity or member or manager
thereof (including, without limitation, Greg Stratiger, Robert Gagnard, Oscar
Davis, La Savoy Famille, LC, and Claus L. Winther), (2) to Haemonetics
Corporation, or (3) as a result of any breach or default under any Contract or
other obligation of any Acquired Asset Entity;

 

(B)          capital
expenditures incurred by the Acquired Asset Entities in the ordinary course of
the Acquired Centers’ business between October 20, 2006 and the Closing Date (“Capital
Expenditures”); and

 

(C)          operating
expenses, incurred by the Acquired Asset Entities in the ordinary course of the
Acquired Centers’ business between October 20, 2006 and the Closing Date (“Operating
Expenses”).

 

All Advances shall be subject to the prior written approval of the
Buyer, such approval not to be unreasonably withheld. Except for Permitted
Interest Expense and except as may otherwise be approved by the Buyer in
writing, in its sole and absolute discretion, the Buyer shall not be required
to make any Advance with respect to any financing activity of any Acquired
Asset Entity, including, without limitation, any principal, interest, deferred
or lease payment. Exhibit L sets forth the Acquired Asset Entities’ good
faith projections of Permitted Interest Expense, Capital Expenditures and
Operating Expenditures for which the Acquired Asset Entities intend to make
Advance Requests prior to November 18, 2006.

 

42

 

(iii)          If
Closing shall not occur on or before the Deadline Date, then the aggregate
amount of outstanding Advances, plus interest thereon, at a rate of 8% per
annum, shall be payable within 60 calendar days of the Deadline Date. Interest
on each Advance shall be calculated on the basis of the actual days elapsed
from the date of each Advance to the date of repayment in a 360-day year
consisting of twelve 30-day months

 

(n)           Recapitalization.  Upon the closing of the Recapitalization,
Holdings shall have a surplus (as calculated in accordance with Applicable Law
and excluding any contingent liabilities relating to the Validation Payments
and the Milestone Payments) of at least $75,000,000.

 

6.             Post-Closing  and  Other
Covenants.  The Parties agree as
follows with respect to the period following the Closing.

 

(a)           General.  In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the Parties will take such further action (including the
execution and delivery of such further instruments and documents, and
furnishing copies of Tax records with respect to the Acquired Assets and the
Assumed Liabilities to the Acquired Asset Entities) as the other Party
reasonably may request, at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under §8 below).
The Acquired Asset Entities acknowledge and agree that from and after the
Closing, the Buyer will be entitled to possession of all documents, books,
records (including donor records), agreements, and financial data of any sort
relating to the Acquired Assets, the Assumed Liabilities or the Transferred
Employees, excluding federal income Tax records, and the Acquired Asset
Entities shall retain at its discretion one copy of all other Tax records. The
Buyer shall assume and perform the obligations associated with the maintenance
of such documents, books, records and financial data, including record
retention requirements imposed under Applicable Law.

 

(b)           Litigation Support.  In the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving any of the Acquired Assets or Assumed
Liabilities, the other Party will cooperate with the contesting or defending
Party and its counsel in the contest or defense, make available its personnel,
and provide such testimony and access to its books and records as shall be
necessary in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under §8 below).

 

(c)           Transition.  Neither Party will take any action that is
designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of the other Party from
maintaining the same business relationships with such other Party after the
Closing as it maintained with such other Party prior to the Closing (in the
case of the Acquired Asset Entities, with respect to the operation of the
Acquired Centers). The Acquired Asset Entities will refer all customer
inquiries relating to the Acquired Assets or the Assumed Liabilities to the
Buyer from and after the Closing.

 

43

 

(d)           Confidentiality.  The Acquired Asset Entities will treat and
hold as such all of the Confidential Information, refrain from using any of the
Confidential Information except in connection with this Agreement, and deliver
promptly to the Buyer or destroy, at the request and option of the Buyer, all
tangible embodiments (and all copies) of the Confidential Information which are
in its possession. In the event that any Acquired Asset Entity is requested or
required (by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, such Acquired Asset Entity
will notify the Buyer promptly of the request or requirement so that the Buyer may
seek an appropriate protective order or waive compliance with the provisions of
this §6(d). If, in the absence of a protective order or the receipt of a waiver
hereunder, such Acquired Asset Entity is, on the advice of counsel, compelled
to disclose any Confidential Information to any tribunal or else stand liable
for contempt, such Acquired Asset Entity, as applicable, may disclose the
Confidential Information to the tribunal; provided,
however, that such Acquired Asset Entity shall use commercially reasonable
efforts to obtain, at the request of the Buyer, an order or other assurance
that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as the Buyer shall designate.

 

(e)           Restrictive Covenants.

 

(i)            For a period of
three years from and after the Closing Date, none of the Acquired Asset
Entities, Rodney Savoy and Robert Gagnard (collectively, the “Seller
Restricted Parties”) will, directly or indirectly through an Affiliate, a
family member or otherwise, own, open or operate any plasma collection center
within the Seller Restricted Area (as defined on Exhibit M hereto). For
a period of three years from and after the Closing Date, neither Buyer nor
Holdings (together, the “Buyer Restricted Parties”) will, directly or
indirectly, through an Affiliate or otherwise, use the Licensed Materials (as
defined in the License Agreement) to own, open or operate any plasma collection
center within the Buyer Restricted Area (as defined on Exhibit M
hereto).

 

(ii)           For a period of
three years from and after the Closing Date, none of the Seller Restricted
Parties will, directly or indirectly, on his, her or its own behalf or in
combination with others, hire, engage or solicit for employment or consulting
services, the Key Employees, other individuals identified on Exhibit K
hereto or any of the Buyer’s employees, except that (A) such restrictions shall
not apply with respect to any such Person who is terminated by the Buyer after
the Closing; and (B) such restrictions shall lapse after the first anniversary
of the Closing Date with respect to any such Person employed in human resources
or finance functions for the Acquired Asset Entities immediately prior to the
Closing and who declines relocation requested by the Buyer.  For a period
of three years from and after the Closing Date, none of the Buyer Restricted
Parties will, directly or indirectly, on his, her or its own behalf or in
combination with others, hire, engage or solicit for employment or consulting
services any post-Closing employee of the Acquired Asset Entities (including,
without limitation, the employees listed on Exhibit M-1), except that
such restrictions shall not apply with respect to any such Person who is
terminated by any Acquired Asset Entity after the Closing. 
Notwithstanding the foregoing, this §3(e)(ii) shall not prevent non-targeted
solicitations of employment that are widely disseminated or made available to
the general public, or the hiring of any personnel responding thereto.

 

44

 

(iii)          From and after the
date of this Agreement, none of the Seller Restricted Parties shall disparage
Buyer, Holdings or any of their respective directors, officers, members,
managers, partners, employees or agents. From and after the date of this
Agreement, neither the Buyer nor Holdings nor any of their respective
directors, officers, members, managers, partners, employees or agents, shall
disparage any of the Acquired Asset Entities or any of their respective directors,
officers, members, managers, partners, employees or agents.

 

(iv)          From and after the
date of this Agreement, none of the Seller Restricted Parties will, directly or
indirectly, on his, her or its own behalf or in combination with others,
purchase, own or hold an economic interest, whether as an owner, partner,
shareholder, agent, employee, consultant or (without limitation by the specific
enumeration of the foregoing) otherwise, in any of the Leased Real Property
other than as specifically set forth on §3(cc) of the Disclosure Schedule.

 

(v)           The Parties, on
their own behalf and on behalf of other Persons within the scope of the
covenants set forth in this §6(e), recognize that the territorial, time and
scope limitations of this §6(e) are reasonable and necessary for the protection
of such Parties, Affiliates and Persons, and in the event that any such
territorial, time or scope limitation is ruled unreasonable by a court of
competent jurisdiction, the Parties agree to empower and urge the court to reduce
any such territorial, time or scope limitations to reasonable and enforceable
limits under the circumstances, and this Agreement shall be enforceable as so
modified after the expiration of the time within which the judgment may be
appealed. In the event of any breach of subsection (i) or (ii) above, the time
period of the breached covenant shall be extended for the period of such breach.
Each of the Parties shall be entitled to all rights and remedies at law and in
equity in connection with any breach of this §6(e).

 

(vi)          The Parties
acknowledge that payment of the Purchase Price by the Buyer, the sale of the
Acquired Assets by the Acquired Asset Entities and the other representations,
warranties, and covenants herein contained other mutual promises set forth
herein constitute good and valid consideration for the covenants of the Parties
in this §6(e).

 

(f)            Consent of Third Parties.  This Agreement shall not constitute an
agreement to assign any Acquired Asset (including, without limitation, any
Contract or Lease) or any claim or right or any benefit arising thereunder or
resulting therefrom if such assignment, without the consent of a third party
thereto, would constitute a breach or other contravention of such Acquired
Asset or in any way adversely affect the rights of the Buyer thereunder. Except
as may otherwise be set forth in §5(j) above and §6(h) below, each Party will
use its commercially reasonable efforts (but without any payment of money in
excess of the Expense Cap, unless required under the terms and conditions of
the specific Contract or Lease being assigned, or the incurrence of any
additional liability) to obtain the consent of the other parties to any such
Acquired Asset or any claim or right or any benefit arising thereunder for the
assignment thereof to the Buyer as Buyer may request. Except as may otherwise
be set forth in §5(j) above and §6(h) below, if such consent is not obtained,
or if an attempted assignment thereof would be ineffective or would adversely
affect the rights of the Buyer thereunder so that the Buyer would not in fact
receive all such rights, then Acquired Asset Entities and the Buyer will
cooperate in a mutually agreeable arrangement, including sub-contracting,
sub-licensing, or sub-leasing to the Buyer, designed to provide the Buyer after
the Closing with the benefits intended to be assigned

 

45

 

to the Buyer with respect to
the underlying Acquired Asset, including in the case of any Acquired Asset that
is a Contract, enforcement of rights thereunder at the cost and for the account
of the Buyer, and, provided that the Buyer receives all such benefits, the
Buyer shall pay or satisfy any Assumed Liabilities with respect to such
Contract as and when they are due, to the extent Buyer would have been
responsible therefor hereunder if such consent or approval had been obtained. Nothing
in this §6(f) shall be deemed a waiver by the Buyer of its right to have
received on or before the Closing an effective assignment of all the Acquired
Assets as a condition to Closing under §7(a) hereof. If there shall be any
conflict between this §6(f) and the specific provisions of §5(j) above and
§6(h) below, the provisions of §5(j) above and §6(h) below shall control.

 

(g)                                 Employee
Matters.

 

(i)            Offers of
Employment.  Effective as of the
close of business on the Closing Date, Buyer shall offer at-will employment to
all of the employees listed on Exhibit K (which shall be updated through
the Closing Date, subject to the Buyer’s reasonable approval thereof) who are
in good standing on the Closing Date (each, a “Closing Date Employee”),
contingent upon the Closing, for at least the same rate of base salary, wages
and/or commissions and the same job position in effect immediately prior to the
Closing. A Closing Date Employee will become an employee of Buyer (a “Transferred
Employee”), if at all, on or as of: (1) the Closing Date, if such Closing
Date Employee is then actively at work; (2) the Closing Date, if such Closing
Date Employee is absent from work on such date due to authorized vacation, jury
duty or other authorized temporary leave of absence and returns to active
employment following the end of the vacation or leave of absence or the
completion of jury duty, as the case may be; or (3) the date such Closing Date
Employee returns to active employment, in the case of a Closing Date Employee
who, on the Closing Date, is absent from work due to maternity leave, military
leave or long term disability with a right to return to his or her job, and who
returns to active employment within the time required under the original terms
and conditions applicable to such absence. Notwithstanding the foregoing, the
Buyer shall not be obligated to hire any Closing Date Employee who fails to
provide the Buyer documentation as required by applicable federal or state laws
in connection with the commencement of such employment or who fails to pass the
Buyer’s pre-employment background check.

 

(ii)           Retained
Obligations of the Acquired Asset Entities. Effective as of the Closing
Date, the Acquired Asset Entities shall terminate the employment of each
Transferred Employee. Unless and except to the extent included in the
calculation of Actual Working Capital, the Buyer shall have no obligation
whatsoever to pay all or any part of, and the Acquired Asset Entities shall
remain responsible for the payment of (1) unpaid salaries, wages, bonuses,
incentive compensation, or payroll items accrued through the Closing Date, (2)
any bonuses or other amounts which, as of the Closing Date, have been earned by
Employees as a result of or arising from the transactions contemplated herein,
and (3) any amounts payable to any Employee terminated prior to the Closing
Date. The Buyer shall have no obligations or Liabilities which arise prior to
or directly from the Acquired Asset Entities’ termination of the employment of
the Transferred Employees pursuant to this §6(g)(ii) to provide COBRA
continuation coverage to any Employee, including but not limited to such
obligations or Liabilities with respect to any “M & A qualified
beneficiaries” of the Acquired Asset Entities, as defined in Treas. Reg.
54.4980B-9(A-4).

 

46

 

(iii)          Vacation and
Sick Days. With respect to unused vacation days and sick pay, Buyer will
assume responsibility for and credit each Transferred Employee with such number
of unused vacation days and sick pay credited to such Transferred Employee as
of the Closing Date in accordance with the Acquired Asset Entities’ policies
applicable to the Transferred Employee (but only to the extent accrued and
included in the calculation of Working Capital under §2(d)). Concurrently with
the delivery of the Pre-Closing Statement under §2(d) above, the Acquired Asset
Entities will provide the Buyer with a schedule setting forth the number of
unused vacation days and sick pay credited to each of its employees as of the
Closing Date, together with such other information as is reasonably required
for Buyer to carry out its obligations under this paragraph. After the
Transferred Employees use any vacation and sick leave that is transferred as of
the Closing Date, all future vacation and sick leave accrual for Transferred
Employees will be pursuant to the Buyer’s established policies for such
benefits.

 

(iv)          Benefit Plan
Coverage. Buyer agrees that, as of the Closing Date and through the second
anniversary of the Closing Date, Buyer shall provide or otherwise make
available to the Transferred Employees a level of group health care benefits
which, individually, is not materially less favorable to the Transferred
Employees than the group health care benefits provided or made available to
them by the Acquired Asset Entities immediately prior to the Closing and, to
the extent permitted in providing group health care benefits, Buyer will
recognize all deductibles and coinsurance payments accrued by the Transferred
Employees during the plan year in which the Closing Date occurs and to waive
any preexisting condition limitations for the Transferred Employees to the extent
such conditions were waived or satisfied prior to the Closing Date under the
terms of the Acquired Asset Entities’ corresponding group health plan. Buyer
further agrees that, beginning no later than January 1, 2007 and through the
second anniversary of the Closing Date, Buyer shall maintain and sponsor a
401(k) plan that recognizes service with the Acquired Asset Entities for the
purpose of determining eligibility and vesting (but not for purposes of benefit
accrual) and that provides Transferred Employees with benefits that are not
materially less favorable than those provided to such Transferred Employees
under the Acquired Asset Entities’ 401(k) plan. Buyer shall recognize the
service of Transferred Employees with the Acquired Asset Entities and its
Affiliates for the purposes of determining eligibility to participate and
vesting under any severance, paid time off or other similar plan, policy or
arrangement of Buyer under which such Transferred Employees are otherwise
covered.

 

(v)           Payroll Tax Administration.
To the extent permitted by law, including, without limitation, Revenue
Procedure 2004-53, Buyer will file (with the federal government and the
state(s), where appropriate) a single Form W-2 for the 2006 taxable year for
each Transferred Employee reporting the wages paid by both Buyer and the
Acquired Asset Entities to any such Transferred Employee. The Acquired Asset
Entities will furnish or cause to be furnished to Buyer all information and
documentation relating to periods ending on or prior to the Closing Date
necessary for Buyer to prepare and distribute Forms W-2 for the year ending
December 31, 2006 to the Transferred Employees on or before January 15, 2007. In
addition, each of the Acquired Asset Entities, on the one hand, and Buyer, on
the other hand, will file Forms 941 for the quarter during which the Closing
occurs, reflecting the wages and deposits made during its period of ownership
with respect to the Transferred Employees. To the extent permitted by law, the
Acquired Asset Entities and Buyer shall treat Buyer as a “successor employer”
and the Acquired Asset Entities and their Affiliates as a “predecessor,” within
the meaning of Sections 3121(a)(1) and 3306(b)(1) of the Code with respect to
the Transferred Employees for purposes of

 

47

 

taxes imposed
under the Federal Unemployment Tax Act and the United States Federal Insurance
Contributions Act.

 

(h)                                 Options
Upon Failure to Obtain Certain Lease Documents.

 

(i)            For purposes of
this §6(h):

 

(A)          “Affected Center”
means, (x) for purposes of clause (ii) hereunder, any Undeveloped Center or
Additional Center set forth in Exhibit M-2 for which the Acquired Asset
Entities have failed to obtain a lease on the terms and conditions set forth in
Exhibit M-2 (each, a “New Lease”); and (y) for purposes of the
remainder of this §6(h), any Acquired Center underlying any Lease under §5(j)
for which the Acquired Asset Entities have failed to obtain any corresponding
Lease Closing Document.

 

(B)           “Substitute Center”
means:  (X) if the Affected Center is an
Open Center, a plasma collection center that produces and delivers plasma at
volumes not less than 95% of the production and delivery volumes of the
Affected Center and of a quality consistently equivalent to or better than that
of the Affected Center; (Y) if the Affected Center is an Unlicensed Center, a
plasma collection center that produces, and reasonably can be expected to
deliver, plasma at volumes not less than 95% of the production and expected
delivery volumes of the Affected Center and of a quality consistently
equivalent to or better than the Affected Center; and (Z) if the Affected
Center is an Undeveloped Center or an Additional Center, a plasma collection
center that has the capacity (including, without limitation, square footage,
projected number of collection stations, freezer and storage capacity)
reasonably equivalent to the Affected Center.

 

(ii)           If the Acquired
Asset Entities fail to obtain any New Lease, then as promptly as practicable
after such failure, the Acquired Asset Entities shall propose one or more
Substitute Centers to the Buyer until such time as the Buyer approves, in its
sole and absolute discretion, one such Substitute Center as an acceptable
substitute for such Affected Center. Thereafter, such Substitute Center shall
be deemed an Acquired Center for all purposes under this Agreement. The
Acquired Asset Entities will continue to use commercially reasonable efforts to
obtain any such New Leases not previously obtained. If the Acquired Asset
Entities do obtain a New Lease for any previously substituted Affected Center,
then the Buyer shall have the option, in its sole and absolute discretion, to
return the Substitute Center to the Acquired Asset Entities and accept the
Affected Center in its place.

 

(iii)          If the Acquired
Asset Entities fail to obtain any Lease Closing Document with respect to any of
the Leases under §5(j), then the Buyer shall, in its sole discretion, select
any of the following options with respect to each Affected Center:  (A) the Buyer shall purchase such Affected
Center (the “Purchase Option”); (B) if the Acquired Asset Entities
propose a Substitute Center, the Buyer shall purchase the Substitute Center in
lieu of such Affected Center (the “Substitution Option”), in which case
such Substitute Center shall be deemed an Acquired Center for all purposes
under this Agreement; or (C) the Buyer and the Acquired Asset Entities shall
execute and deliver an agency agreement, for a initial term of no less than one
year and otherwise in form and substance reasonably acceptable to the Parties,
pursuant to which the Acquired Asset Entities shall (as applicable) continue
the development of, and collect, store and deliver plasma at and from, such
Affected Center as the Buyer’s agent (using, to the extent

 

48

 

permitted by
Applicable Law, employees or subcontractors of the Buyer, the Buyer’s
management and operations procedures) (such option, together with the Purchase
Option and the Substitution Option, the “Workaround Options”), in each
case subject to the further provisions of this §6(h). If there shall be more
than one Affected Center, the Buyer may, in its sole discretion, select the
same or different Workaround Option(s) for such Affected Centers.

 

(iv)          If the Buyer selects
(A) the Purchase Option and/or (B) the Substitution Option using a Substitute
Center for which the Acquired Asset Entities likewise failed to obtain any
Lease Closing Document, the Acquired Asset Entities will continue to use
commercially reasonable efforts for a period of 6 months from the Closing Date
to obtain all Lease Closing Document(s) not previously obtained. If, at the end
of such 6-month period, the Acquired Asset Entities shall have fully complied
with their obligations hereunder, yet shall have still failed to obtain any
such Lease Closing Document(s) for any Acquired Center purchased by the Buyer
under the Purchase Option or the Substitution Option, then the Buyer shall have
the option, exercisable in its sole discretion by delivering notice to the
Acquired Asset Entities pursuant to §10(g) on or before the 9-month anniversary
of the Closing Date, to sell to the Acquired Asset Entities (and, if exercised,
the Acquired Asset Entities shall have the obligation to repurchase from the
Buyer) such Acquired Center for the consideration and on the other terms set
forth in clause §6(h)(iii) below (the “Put Option”). Notwithstanding
anything contained herein to the contrary, the Buyer may, in its sole discretion
and upon prior written notice to the Acquired Asset Entities, elect to deduct
any amounts to be paid or delivered by the Acquired Asset Entities upon
exercise of the Put Option in accordance with this §6(h)(ii) and §6(h)(iii)
above from any Validation Payments or Milestone Payments to be paid or issued
pursuant to §§2(c)(ii) and 2(c)(iii) above.

 

(v)           If the Buyer
exercises the Put Option pursuant to §6(h)(ii) above, then, with respect to
each Acquired Center repurchased by the Acquired Asset Entities, the Acquired
Asset Entities shall pay or deliver to the Buyer the amount(s) of cash and/or
the Holdings Common Stock specified below:

 

	
  If the repurchased Acquired Center is an:

  	
   

  	
  then the Acquired Asset Entities shall pay, deliver and/or forfeit to
  Buyer:

  
	
   

  	
   

  	
   

  
	
  Open Center

  	
   

  	
  $3,000,000 in cash

  
	
   

  	
   

  	
   

  
	
  Unlicensed Center

  	
   

  	
  $1,428,000 in cash and one Validation Payment

  
	
   

  	
   

  	
   

  
	
  Undeveloped Center

  	
   

  	
  $833,000 in cash

  

 

; provided, however, that if a Substitute Center is then
available, the Buyer may, in its sole discretion, accept such Substitute Center
in lieu of the consideration specified above for the particular Acquired
Center, in which case such Substitute Center shall be deemed an Acquired Center
for all purposes under this Agreement. The closing of such sale and repurchase
shall take place as promptly as practicable after the date on which the Buyer
gives notice to the Acquired Asset Entities of its exercise of the Put Option,
but in no event later than 30 days following the date of such notice.

 

49

 

(i)            Development and Certain
Renovation Costs.

 

(i)            The Acquired Asset
Entities shall jointly and severally reimburse the Buyer for all reasonable and
documented costs and expenses incurred by the Buyer or any of its Affiliates in
connection with the build out or development of the Undeveloped Centers and the
acquisition of equipment and other tangible assets reasonably necessary or
desirable for the operation of such centers in accordance with Exhibit N
(collectively, “Development Costs”); provided, however, that the Acquired Asset Entities shall only be
responsible for reimbursement of such Development Costs incurred in accordance
with Exhibit N if and to the extent such Development Costs exceed
$3,000,000 in the aggregate. Notwithstanding the above, the Acquired Asset
Entities’ total obligations for reimbursement of Development Costs pursuant to
this §6(i)(i) shall not exceed $3,000,000. For example, (A) if the Buyer incurs
Development Costs of $5,500,000, then the Acquired Asset Entities would be
jointly and severally obligated to reimburse the Buyer for the $2,500,000 of
Development Costs in excess of the first $3,000,000, and (B) if the Buyer
incurs Development Costs of $6,500,000, then the Acquired Asset Entities would
be jointly and severally obligated to reimburse the Buyer for $3,000,000 of
Development Costs in excess of the first $3,000,000. All such Development Costs
to be reimbursed by the Acquired Asset Entities pursuant to this §6(i) shall be
deducted from the Development Cost Holdback. If the Development Cost Holdback
exceeds the aggregate amount of Development Costs to be reimbursed by the
Acquired Asset Entities pursuant to this §6(i)(i), then the Buyer shall pay the
amount of such excess to the Acquired Asset Entities as promptly as practicable
after the final calculation of the Development Costs.

 

(ii)           The Acquired Asset
Entities shall use commercially reasonable efforts to renovate and expand the
Licensed Center located in Monroe, Louisiana (referred to as Monroe #1), and
the Acquired Asset Entities shall be solely responsible for all costs and
expenses related to the renovation and expansion of such center.

 

(j)                                     Additional
Centers.  The Acquired Asset Entities
will build out and deliver to the Buyer four additional undeveloped plasma
collection centers (collectively, the “Additional Centers”) as follows:

 

	
  Additional Center:

  	
   

  	
  Delivery Deadline:

  
	
   

  	
   

  	
   

  
	
  Monroe, LA #2

  	
   

  	
  March 31,
  2007

  
	
   

  	
   

  	
   

  
	
  Toledo, OH

  	
   

  	
  June 30,
  2007

  
	
   

  	
   

  	
   

  
	
  McAllen, TX

  	
   

  	
  June 30,
  2007

  
	
   

  	
   

  	
   

  
	
  Fort Worth, TX #3

  	
   

  	
  October 31,
  2008

  

 

Each Additional Center (1) will
meet, as of their respective dates of delivery, the general and specific
specifications set forth on Exhibit O hereto, and (2) will be delivered
pursuant to an amendment to this Agreement, under which the Acquired Asset
Entities will make representations and warranties regarding such Additional
Center substantially similar to those

 

50

 

contained herein and otherwise
in form and substance acceptable to the Acquired Asset Entities, the Buyer and
Holdings.

 

(k)                                  Covenants
Regarding Holdings Common Stock.

 

(i)            Within
120 days following the Closing, Holdings will amend or terminate all
agreements, certificates or other documents identified on §4(c) of the Buyer’s
Disclosure Schedule that would prohibit, in whole or in part, the repurchase of
the Parent’s shares of Holdings Common Stock pursuant to §2(h)(ii) above.

 

(ii)           From
and after the date of this Agreement until the exercise or expiration of the
Parent’s repurchase right pursuant to §2(h)(ii) above, Holdings will not enter
into any agreement, certificate or other document that would expressly
prohibit, in whole or in part, the repurchase of the Parent’s shares of
Holdings Common Stock pursuant to §2(h)(ii).

 

(iii)          Holdings
shall at all times reserve and keep available out of its authorized but
unissued shares of Holdings Common Stock such number of its shares of Holdings
Common Stock as shall from time to time be sufficient to enable Holdings to
issue to Parent the shares of Holdings Common Stock to which the Parent is
entitled pursuant to the terms of this Agreement.

 

7.             Conditions  to  Obligation
to  Close.

 

(a)           Conditions to Obligation of the
Buyer and Holdings.  The obligation
of the Buyer and Holdings to consummate the transactions to be performed by
them in connection with the Closing is subject to satisfaction of the following
conditions:

 

(i)            the representations
and warranties set forth in §3 above shall be true and correct in all material
respects when made and as of the Closing Date, except with respect to the
representation in §3(bb) as well as such representations and warranties that
are qualified by the terms “material,” or contain terms such as “Material
Adverse Effect” or “Material Adverse Change,” in which case such
representations and warranties (as so written, including the term “material” or
“Material Adverse Effect” or “Material Adverse Change”) shall be true and
correct in all respects when made and as of the Closing Date;

 

(ii)           the Acquired Asset
Entities shall have performed and complied with all of their respective
covenants hereunder in all material respects through the Closing except with
respect to such covenants that are qualified by the terms “material,” or
contain terms such as “Material Adverse Effect” or “Material Adverse Change,”
in which case the Acquired Asset Entities shall have performed and complied
with all such covenants (as so written, including the term “material” or “Material
Adverse Effect” or “Material Adverse Change”) in all respects through the
Closing;

 

(iii)          The Acquired Asset
Entities shall have given all third party notices and obtained all third party
consents identified as a “required consent” in §§5(c) and 5(j); provided, however, that if any Acquired
Asset Entity fails to obtain any Lease Closing Document for any Lease under
§5(j) (other than Estoppel Certificates for Non-Affiliate Leases), the Buyer
and Holdings shall be entitled to exercise their Workaround Options pursuant to
§6(h) above but shall nonetheless be obligated to consummate the transactions
to be performed by it in

 

51

 

connection
with the Closing (assuming all other conditions set forth in this §7(a) shall
have been satisfied or waived);

 

(iv)          no action, suit, or
proceeding shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement, (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation, or (C)
materially adversely affect the right of the Buyer to own the Acquired Assets
and to operate the Acquired Centers (and no such injunction, judgment, order,
decree, ruling, or charge shall be in effect);

 

(v)           the Acquired Asset
Entities shall have delivered to the Buyer and Holdings a certificate to the effect
that each of the conditions specified above in §7(a)(i)-(iv) is satisfied in
all respects;

 

(vi)          all applicable
waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act
shall have expired or otherwise been terminated and the Acquired Asset
Entities, the Buyer and Holdings shall have received all other authorizations,
consents, and approvals of Governmental Authorities;

 

(vii)         Rodney Savoy and
Robert Gagnard shall each have executed and delivered a joinder to this
Agreement in substantially the form attached hereto as Exhibit P for the
limited purpose of expressly becoming obligated under §6(e) above and such
joinder shall be in full force and effect as of the Closing;

 

(viii)        the Parent shall
have executed and delivered the Regulatory Transition Agreement in
substantially the form attached hereto as Exhibit Q and such agreement
shall be in full force and effect as of the Closing;

 

(ix)           the Parent and its
members that are signatories thereto shall have executed and delivered the Stockholders
Agreement in substantially the form attached hereto as Exhibit R (the “Stockholders
Agreement”) and such agreement shall be in full force and effect at
Closing;

 

(x)            at least ten of the
Key Employees shall have executed employment agreements providing for at least
one year’s service post-Closing with the Buyer concurrently with the execution
of this Agreement; provided, however, that the number of
Key Employees required to execute employment agreements in accordance with this
provision shall be reduced to the extent that the employment agreement proposed
by the Buyer to any such Key Employee provides for less than such Key Employee’s
rate of base salary, wages and/or commissions, taken as a whole, and medical
and dental benefits, taken as a whole, in effect immediately prior to the
Closing;

 

(xi)           at least 90% of the
employees identified on Exhibit K hereto shall have executed letter
agreements regarding employment, confidentiality and non-competition in form
and substance reasonably satisfactory to the Buyer, and such letter agreements
shall be in full force and effect at Closing;

 

52

 

(xii)          the Acquired Asset
Entities shall have achieved each of the following operational metrics: (A) a
plasma delivery run rate from all Licensed Centers of 733,000 liters per year
annualized on a year to date basis; (B) a plasma collection run rate from all
Unlicensed Centers of 3,100 liters per week measured on a trailing three month
basis; (C) the Acquired Asset Entities’ standard operating procedures shall be
(x) completed to the reasonable satisfaction of the Buyer and so as to
accommodate implementation of the Haemonetics automated donor management system
in all material respects and (y) staged to permit training and implementation
of Acquired Center staff in such system’s operation, maintenance, validation
and on-going change control mechanisms; (D) the renovation and expansion of the
Licensed Centers located in Del Rio, Texas, Baton Rouge, Louisiana and Roanoke,
Virginia shall have been substantially completed; and (E) the current Microsoft
Great Plains application and data shall have logically separated into two
distinct instances, one of which shall support the Acquired Centers (i.e., the
Buyer’s instance), and another which shall support the plasma collection
centers not transferred to the Buyer hereunder (i.e., Seller’s instance);

 

(xiii)         Subject to the
Buyer’s compliance with its obligations under §5(m), the Acquired Asset
Entities shall have implemented the retention payments in Section 2 of Exhibit
I and accomplished the retention objectives set forth in Sections 3 of Exhibit
I hereto;

 

(xiv)        The FDA shall have
inspected one of the Unlicensed Centers located in Oklahoma City, Oklahoma,
Waco, Texas and Killeen, Texas, and (A) such inspections shall have revealed no
violations of FDA regulations requiring remedial or corrective action, (B) no
systemic deficiencies shall have been observed by the FDA during such
inspections, and (C) the inspection results shall have been classified by FDA
as requiring only voluntary action by such Unlicensed Centers;

 

(xv)         At least one of the
Unlicensed Centers shall have obtained approval from the FDA for the
collection, processing, storing, marketing, distribution, sale, and research
and development of plasma;

 

(xvi)        the Buyer and
Holdings shall have reasonably determined that the Acquired Asset Entities have
complied in all material respects with the covenants set forth in §10(p)(ii)
below;

 

(xvii)       there shall not have
been any Material Adverse Effect on the Acquired Assets taken as a whole nor
shall have there been any fact, circumstance or occurrence that has had or
could reasonably be expected to have a Material Adverse Effect on the Acquired
Assets taken as whole that continues to exist on the Closing Date;

 

(xviii)      there shall not have
been any Material Curtailment Event with respect to any of the Acquired Centers
nor shall there have been any fact, circumstance or occurrence that has
resulted or could reasonably be expected to result in a Material Curtailment
Event with respect to the Acquired Assets that continues to exist on the
Closing Date; provided, however, that if there shall be any
Material Curtailment Event with respect to three or fewer of the Acquired
Centers, the Buyer and Holdings shall nonetheless be obligated to consummate
the transactions to be performed by it in connection with the Closing (assuming
all other conditions

 

53

 

set forth in
this §7(a) shall have been satisfied or waived) if the Acquired Asset Entities
shall have elected the option set forth in §2(c)(v) above;

 

(xix)         the Acquired Asset
Entities shall deliver to the Buyer a non-foreign affidavit dated as of the
Closing Date and in form and substance required under the Treasury Regulations
issued pursuant to Section 1445 of the Internal Revenue Code so that the Buyer
is exempt from withholding any portion of the Purchase Price thereunder (the “FIRPTA Affidavit”);

 

(xx)          no damage or
destruction or other change has occurred with respect to any of the Leased Real
Property or any portion thereof that, individually or in the aggregate, would
have a Material Adverse Effect on the Acquired Assets taken as a whole;

 

(xxi)         the Acquired Asset
Entities shall have executed and delivered a Profit-Sharing Agreement with
respect to that certain Anthrax-Immune Source Plasma Program and Supply
Agreement, dated September 22, 2006, by and between Emergent Product
Development Gaithersburg Inc. and the Parent (which contract is being
transferred to the Buyer hereunder), in substantially the same form attached
hereto as Exhibit S and such Profit-Sharing Agreement shall be in full
force and effect as of the Closing;

 

(xxii)        the Parent shall
have executed and delivered the License Agreement in substantially the same
form attached hereto as Exhibit T and such agreement shall be in full
force and effect as of the Closing;

 

(xxiii)       the Parent shall
have executed and delivered the Termination and Waiver Agreement in
substantially the same form attached hereto as Exhibit T-1 and such
agreement shall be in full force and effect as of the Closing;

 

(xxiv)       the Buyer and
Holdings shall have received the audited consolidated balance sheet and
statements of income, changes in stockholders’ equity, and cash flow of the
Parent , including notes thereto, as of and for the fiscal years ended December
31, 2005 and 2004 (the “Audited Financial Statements”), including any
restatements thereof, and the related independent auditors’ opinions thereon,
and all auditors’ reports to management and attorneys’ letters to auditors
issued in connection therewith, such Audited Financial Statements shall be
consistent in all material respects with the Draft Audited Financial
Statements, and there shall been no material change, adjustment or other
deviation between the Draft Audited Financial Statements and the Audited
Financial Statements;

 

(xxv)        all actions to be
taken by the Acquired Asset Entities in connection with consummation of the
transactions contemplated hereby and all certificates, instruments, and other
documents required to effect the transactions contemplated hereby, including,
without limitation, the Payoff Letters, will be reasonably satisfactory in form
and substance to the Buyer and Holdings; and

 

(xxvi)       the Buyer shall have
entered into one or more agreements with Haemonetics Corporation and its
Affiliates, in form and substance reasonably satisfactory to the Buyer, with
respect to the software license, supply of equipment and related services to
the

 

54

 

Acquired
Centers similar to those granted and furnished to Parent pursuant to the
Haemonetics Agreements (as defined below).

 

The Buyer and Holdings may
waive any condition specified in this §7(a) if it executes a writing so stating
at or prior to the Closing.

 

(b)           Conditions to Obligation of the
Acquired Asset Entities.  The
obligation of the Acquired Asset Entities to consummate the transactions to be
performed by them in connection with the Closing is subject to satisfaction of
the following conditions:

 

(i)            the representations
and warranties set forth in §4 above shall be true and correct in all material
respects when made and as of the Closing Date, except with respect to the
representation in §4(l) as well as such representations and warranties that are
qualified by the terms “material,” or contain terms such as “Material Adverse
Effect” or “Material Adverse Change,” in which case such representations and
warranties (as so written, including the term “material” or “Material Adverse
Effect” or “Material Adverse Change”) shall be true and correct in all respects
when made and as of the Closing Date;

 

(ii)           the Buyer and
Holdings shall have performed and complied with all of their respective
covenants hereunder in all material respects through the Closing except to the
extent that such covenants are qualified by the terms “material,” or contain
terms such as “Material Adverse Effect” or “Material Adverse Change,” in which
case the Buyer and Holdings shall have performed and complied with all such
covenants (as so written, including the term “material” or “Material Adverse
Effect” or “Material Adverse Change”) in all respects through the Closing;

 

(iii)          no action, suit, or
proceeding shall be pending or threatened before any court or quasi-judicial or
administrative agency of any federal, state, local, or foreign jurisdiction or
before any arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation (and no such injunction, judgment, order, decree, ruling, or
charge shall be in effect);

 

(iv)          the Buyer and
Holdings shall have delivered to the Acquired Asset Entities a certificate to
the effect that each of the conditions specified above in §7(b)(i)-(iii) is
satisfied in all respects;

 

(v)           all applicable
waiting periods (and any extensions thereof) under the Hart-Scott-Rodino Act
shall have expired or otherwise been terminated and the Acquired Asset Entities
and the Buyer shall have received all other authorizations, consents, and
approvals of Governmental Authorities referred to in §3(c) and §4(c) above;

 

(vi)          the Buyer shall have
executed and delivered the IT Transition Services Agreement in substantially
the same form attached hereto as Exhibit U and such agreement shall be
in full force and effect as of the Closing;

 

55

 

(vii)         the Buyer shall have
executed and delivered a Profit-Sharing Agreement with respect to that certain
Anthrax-Immune Source Plasma Program and Supply Agreement, dated September 22,
2006, by and between Emergent Product Development Gaithersburg Inc. and the
Parent (which contract is being transferred to the Buyer hereunder), in
substantially the same form attached hereto as Exhibit S and such
Profit-Sharing Agreement shall be in full force and effect as of the Closing;

 

(viii)        the Buyer shall have
executed and delivered the License Agreement in substantially the same form
attached hereto as Exhibit T and such agreement shall be in full force
and effect as of the Closing;

 

(ix)           Holdings shall have
executed and delivered the Stockholders Agreement in substantially the form
attached hereto as Exhibit R and such agreement shall be in full force
and effect at Closing;

 

(x)            there shall not
have been any Material Adverse Effect on the Buyer or Holdings nor shall have
there been any fact, circumstance or occurrence that has had or could
reasonably be expected to have a Material Adverse Effect on the Buyer or
Holdings that continues to exist on the Closing Date;

 

(xi)           Talecris shall have
executed and delivered the Termination and Waiver Agreement in substantially
the same form attached hereto as Exhibit T-1 and such agreement shall be
in full force and effect as of the Closing;

 

(xii)          all actions to be
taken by the Buyer in connection with consummation of the transactions
contemplated hereby and all certificates, instruments, and other documents
required to effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Acquired Asset Entities; and

 

(xiii)         the Acquired Asset
Entities shall have received written releases and waivers of claims, executed
by Haemonetics Corporation and Haemonetics Enterprises, Inc., in form and
substance reasonably satisfactory to the Acquired Asset Entities, providing for
the full release of any claims arising from the Acquired Asset Entities’
execution of this Agreement and the transactions contemplated hereby,
including, without limitation, the failure of the Acquired Asset Entities to
cause the Buyer to assume the Haemonetics Agreements that Haemonetics
Corporation, Haemonetics Enterprises, Inc. or their Affiliates may have under
the Supply Agreement, dated May 31, 2002, by and between Haemonetics
Corporation and Parent, as amended, and the Software License Agreement, dated
August 23, 2005, by and between Haemonetics Enterprises, Inc. and Parent, as
amended (together, the “Haemonetics Agreements”).

 

The Acquired Asset Entities
may waive any condition specified in this §7(b) if it executes a writing so
stating at or prior to the Closing.

 

8.             Remedies  for  Breaches
of  this  Agreement.

 

(a)           Survival of Representations and
Warranties.  All of the
representations and warranties of the Buyer, Holdings and the Acquired Asset
Entities contained in this Agreement

 

56

 

(other than §3(j)) shall
survive the Closing and continue in full force and effect for a period of 30
months thereafter. The representations and warranties of the Acquired Asset
Entities contained in §3(j) of this Agreement shall survive the Closing and
continue in full force and effect forever thereafter (subject to any applicable
statutes of limitations).

 

(b)           Indemnification Provisions for the
Benefit of the Buyer and Holdings.

 

(i)            Subject to the
limitations set forth in §8(f), if any Acquired Asset Entity breaches (or in
the event any third party alleges facts that, if true, would mean any Acquired
Asset Entity has breached) any of its representations, warranties, and
covenants contained in this Agreement, and, if there is an applicable survival
period pursuant to §8(a) above, provided that the Buyer or Holdings makes a
written claim for indemnification against the Acquired Asset Entities pursuant
to §10(g) below within such survival period, then the Acquired Asset Entities
will jointly and severally indemnify and hold harmless the Buyer, Holdings and
their respective directors, officers, stockholders (other than any Acquired
Asset Entity or other holder of Holdings Common Stock issued hereunder),
agents, employees, representatives, attorneys, Affiliates and permitted successors
and assigns (collectively, the “Buyer Indemnified Parties”) from and
against the entirety of any Adverse Consequences any Buyer Indemnified Party
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences any Buyer Indemnified Party may suffer
after the end of any applicable survival period) resulting from, arising out
of, relating to, in the nature of, or caused by the breach (or the alleged
breach); provided that, if on the Closing Date, the Buyer or Holdings
had Knowledge of any such breach (or alleged breach) and proceeded with the
Closing, the Acquired Asset Entities shall not be liable for any Adverse
Consequences relating thereto.

 

(ii)           The Acquired Asset
Entities shall jointly and severally indemnify and hold harmless the Buyer
Indemnified Parties from and against the entirety of any Adverse Consequences
any Buyer Indemnified Party may suffer resulting from, arising out of, relating
to, in the nature of, or caused by:

 

(A)          any Liability of any
Acquired Asset Entity that is not an Assumed Liability (including any Liability
of any Acquired Asset Entity that becomes a Liability of the Buyer or Holdings
under any bulk transfer law of any jurisdiction, under any common law doctrine
of de facto merger or successor liability, under Environmental, Health, and
Safety Requirements, or otherwise by operation of law);

 

(B)           any Liability of any
Acquired Asset Entity for unpaid Taxes (other than accrued payroll, property
and sales taxes to the extent and only up to the amount, included in the final
determination of Actual Working Capital) with respect to any Tax year or
portion thereof ending on or before the Closing Date (for purposes of this
§8(b)(ii)(B), any Taxes levied with respect to the Acquired Assets for a Tax
period that includes (but does not end on) the Closing Date shall be
apportioned between the Acquired Asset Entities, on the one hand, and the Buyer
and Holdings, on the other, based on the closing of the books and records of
the Acquired Asset Entities as of the opening of business on the Closing Date,
provided that exemptions, allowances or deductions that are calculated on an
annual basis (including, but not limited to, depreciation and amortization
deductions) and any annual property or ad valorem Taxes

 

57

 

shall be
apportioned between the Acquired Asset Entities, on the one hand, and the Buyer
and Holdings, on the other, based upon the number of days of such period
included in the Tax period before (and including) the Closing Date and the
number of days of such Tax period after the Closing Date); or

 

(C)           any Liability of any
Acquired Asset Entity for the unpaid Taxes of any Person under Reg. §1.1502-6
(or any similar provision of Applicable Law), as a transferee or successor, by
contract, or otherwise.

 

(c)           Indemnification
Provisions for the Benefit of the Acquired Asset Entities.

 

(i)            Subject to the
limitations set forth in §8(f), if the Buyer or Holdings breaches (or in the
event any third party alleges facts that, if true, would mean the Buyer or
Holdings has breached) any of its representations, warranties, and covenants
contained in this Agreement, and, if there is an applicable survival period
pursuant to §8(a) above, provided that the Acquired Asset Entities make a
written claim for indemnification against the Buyer pursuant to §10(g) below
within such survival period, then the Buyer and Holdings will jointly and
severally indemnify and hold harmless the Acquired Asset Entities and their
respective officers, managers, members, agents, employees, representatives,
attorneys, Affiliates and permitted successors and assigns (collectively, the “Seller
Indemnified Parties”) from and against the entirety of any Adverse
Consequences any Seller Indemnified Party may suffer through and after the date
of the claim for indemnification (including any Adverse Consequences any Seller
Indemnified Party may suffer after the end of any applicable survival period)
resulting from, arising out of, relating to, in the nature of, or caused by the
breach (or the alleged breach); provided that, if on the Closing Date,
any Acquired Asset Entity had Knowledge of any such breach (or alleged breach)
and proceeded with the Closing, the Buyer and Holdings shall not be liable for
any Adverse Consequences relating thereto.

 

(ii)           The Buyer and
Holdings shall jointly and severally indemnify and hold harmless the Seller
Indemnified Parties from and against the entirety of any Adverse Consequences
the Acquired Asset Entities may suffer resulting from, arising out of, relating
to, in the nature of, or caused by any Assumed Liability.

 

(d)           Matters Involving
Third Parties.

 

(i)            If any third party
shall notify any Party (the “Indemnified Party”) with respect to any
matter (a “Third Party Claim”) which may give rise to a claim for
indemnification against the other Party (the “Indemnifying Party”) under
this §8, then the Indemnified Party shall promptly notify the Indemnifying
Party thereof in writing; provided, however,
that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the Indemnifying Party thereby
is prejudiced.

 

(ii)           The Indemnifying
Party will have the right to defend the Indemnified Party against the Third
Party Claim with counsel of its choice reasonably satisfactory to the
Indemnified Party so long as (A) the Indemnifying Party notifies the
Indemnified Party in writing within 15 days after the Indemnified Party has
given notice of the Third Party Claim that

 

58

 

the
Indemnifying Party will indemnify the Indemnified Party from and against the
entirety of any Adverse Consequences the Indemnified Party may suffer resulting
from, arising out of, relating to, in the nature of, or caused by the Third
Party Claim, (B) the Indemnifying Party provides the Indemnified Party with
evidence reasonably acceptable to the Indemnified Party that the Indemnifying
Party will have the financial resources to defend against the Third Party Claim
and fulfill its indemnification obligations hereunder, (C) the Third Party
Claim involves only money damages and does not seek an injunction or other
equitable relief, (D) settlement of, or an adverse judgment with respect to,
the Third Party Claim is not, in the good faith judgment of the Indemnified
Party, likely to establish a precedential custom or practice materially adverse
to the continuing business interests of the Indemnified Party, and (E) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.

 

(iii)          So long as the
Indemnifying Party is conducting the defense of the Third Party Claim in
accordance with §8(d)(ii) above, (A) the Indemnified Party may retain separate
co-counsel at its sole cost and expense and participate in the defense of the
Third Party Claim, (B) the Indemnified Party will not consent to the entry of
any judgment or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party, and (C) the
Indemnifying Party will not consent to the entry of any judgment or enter into
any settlement with respect to the Third Party Claim without the prior written
consent of the Indemnified Party.

 

(iv)          In the event any of
the conditions in §8(d)(ii) above is or becomes unsatisfied, however, (A) the
Indemnified Party may defend against, and consent to the entry of any judgment
or enter into any settlement with respect to, the Third Party Claim in any
manner it reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, the Indemnifying Party in connection
therewith), (B) the Indemnifying Party will reimburse the Indemnified Party
promptly and periodically for the costs of defending against the Third Party
Claim (including attorneys’ fees and expenses), and (C) the Indemnifying Party
will remain responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of, or caused
by the Third Party Claim to the fullest extent provided in this §8.

 

(e)                                  Determination
of Adverse Consequences.  All
indemnification payments under this §8 shall be deemed adjustments to the
Purchase Price.

 

(f)                                    Limitations
on Indemnification.

 

(i)            The
joint and several obligations of the Acquired Asset Entities under §8(b)(i) are
subject to the following limitations:

 

(A)          With respect to any
breach (or alleged breach) of any of the representations and warranties of the
Acquired Asset Entities contained in this Agreement (other than any breach or
alleged breach of §3(j)), the Acquired Asset Entities shall not be liable to
any Buyer Indemnified Party under §8(b)(i), (x) unless the Adverse Consequences sustained or incurred by the Buyer
Indemnified Parties with respect to a particular claim (or a series of related
claims) exceed $35,000 and (y) until Adverse Consequences incurred or
sustained by the Buyer Indemnified Parties
exceed $1,350,000

 

59

 

in the
aggregate, and in the case of clause (y) the Buyer Indemnified Parties shall be entitled to be indemnified for
the full amount of its claims, including the initial $1,350,000 thereof; and

 

(B)           With respect to any
breach (or alleged breach) of any of the representations and warranties of the
Acquired Asset Entities contained in this Agreement (other than any breach or
alleged breach of §3(j)), the Buyer
Indemnified Parties shall not be entitled to recover from the Acquired
Asset Entities under §8(b)(i) in excess of an amount equal, in the aggregate,
to the Cap Amount.

 

(ii)           The joint and several
obligations of the Buyer and Holdings pursuant to the provisions of §8(c)(i)
are subject to the following limitations:

 

(A)          With respect to any
breach (or alleged breach) of any of the representations and warranties of the
Buyer or Holdings contained in this Agreement, the Buyer or Holdings shall not
be liable to any Seller Indemnified Party under §8(c)(i), (x) unless the Adverse Consequences sustained or
incurred by the Seller Indemnified Parties with respect to a particular claim
(or a series of related claims) exceed $35,000 and (y) until Adverse
Consequences incurred or sustained by the Seller Indemnified Parties exceed $1,350,000
in the aggregate, and in the case of clause (y) the Seller Indemnified Parties
shall be entitled to be indemnified for the full amount of its claims,
including the initial $1,350,000 thereof; and

 

(B)           the Seller
Indemnified Parties shall not be entitled to recover from the Buyer and
Holdings under §8(c)(i) in excess of an amount equal, in the aggregate, to the
Cap Amount.

 

(iii)          The “Cap Amount”
means (A) from the date of this Agreement until (and including) the 18-month
anniversary of the closing date (the “18-Month Anniversary”),
$25,000,000; and (B) from the 18-Month Anniversary until (and including) the
30-month anniversary of the Closing Date, $15,000,000. Notwithstanding the
foregoing, if, as of the 18-Month Anniversary, there are one or more unresolved
claims for indemnification in respect of a breach (or alleged breach) of any
representation or warranty contained in this Agreement (other than any breach
or alleged breach of §3(j)) in excess of $15,000,000 in the aggregate, then the
Cap Amount set forth in clause (B) shall be increased by the amount of such
excess solely with respect to such unresolved claims, up to a maximum of
$25,000,000.

 

(g)                                 Recoupment
Under the Escrow Agreement.  From and
after the Closing (but subject to this §8), the Buyer Indemnified Parties shall
first be required to seek recovery with respect to any Adverse Consequences any
of them may suffer from the Escrow Amount in accordance with the terms of the
Escrow Agreement. If the Escrow Amount is insufficient to pay the entire amount
with respect to any Adverse Consequences for which indemnification is sought
under §8(b)(i) above, then the Validation Payments and Milestone Payments, to
the extent not previously deposited with the Escrow Agent, shall be the Buyer
Indemnified Parties’ sole source of recovery (the aggregate of all such
recoveries from all sources not to exceed the Cap Amount).

 

60

 

(h)           Right of Setoff.  Upon the written agreement of the Parties or
the entry of a final, non-appealable order, decree or judgment from a court of
competent jurisdiction or an arbitrator or arbitrators with respect to a
successful claim by any Buyer Indemnified Party for indemnification against the
Acquired Asset Entities pursuant to §8(b) above for any Adverse Consequences
suffered by such Buyer Indemnified Party, the Buyer shall provide the Acquired
Asset Entities a written demand for payment of such Adverse Consequences (the “Payment
Notice”). If within five Business Days following receipt of a Payment
Notice, the Acquired Asset Entities do not pay such Buyer Indemnified Party in
cash an amount equal to such Adverse Consequences, then the Buyer and Holdings
may, upon prior written notice to the Acquired Asset Entities, set off all or a
portion of the amount of such Adverse Consequences against any amounts payable
by the Buyer or Holdings to any Acquired Asset Entity, including, without
limitation, any and all (i) Validation Payments issuable or payable pursuant to
§2(c)(ii) above and (ii) Milestone Payments issuable or payable pursuant to
§2(c)(iii) above. Notwithstanding the above, in the event that no such payments
are due and issuable or payable, as the case may be, then all indemnification
payments under this §8 shall be paid in cash.

 

(i)            Sole Remedy.  Except for the Parties’ rights under §10(n)
hereof, and except to the extent that a claim involves fraud (as determined by
a non-appealable decision of a court of competent jurisdiction), the sole and
exclusive remedy for any breach or inaccuracy, or alleged breach or inaccuracy,
of any representation, warranty or covenant shall be indemnification in
accordance with this §8.

 

(j)            Insurance and Tax Benefits.

 

(i)            The
amount of any Adverse Consequences payable by a Party hereunder shall be net of
any (A) amounts actually recovered by the Indemnified Party under applicable
insurance policies, net of all expenses incurred in prosecuting such insurance
claim and (B) Tax benefit actually realized by the Indemnified Party arising
from the incurrence or payment of any such Adverse Consequences. In computing
the amount of any such Tax benefit, the Indemnified Party shall be deemed to
fully utilize, at the highest marginal tax rate then in effect, all Tax items
arising from the incurrence or payment of any indemnified Adverse Consequences.

 

(ii)           If
any Indemnified Party seeks indemnification
against an Indemnifying Party under this §8 for Adverse Consequences sustained or incurred by any Indemnified Party with
respect to a particular claim (or a series of related claims) in excess of
$100,000, then the Indemnified Party shall promptly make and pursue in
good faith a claim under any applicable insurance policies to recover such
Adverse Consequences. If the Buyer or Holdings pursues an insurance claim and
recovers amounts from the insurer in respect of such claim, then the Acquired
Asset Entities will reimburse the Buyer and Holdings for any additional
insurance premiums resulting directly from such recovery that are incurred by
either the Buyer or Holdings (or any Affiliate thereof that owns such policies)
over the five policy years following the year in which the recovery was
received. The amount for which the Acquired Asset Entities will reimburse the
Buyer, Holdings or their Affiliate pursuant to the preceding sentence will be
determined by the Buyer in good faith, based upon estimates received from its
insurers.

 

61

 

9.                                       Termination.

 

(a)                                  Termination
Agreement.  Certain of the Parties
may terminate this Agreement as provided below:

 

(i)            the Parties may
terminate this Agreement by mutual written consent at any time prior to the
Closing;

 

(ii)           the Buyer may
terminate this Agreement by giving written notice to the Acquired Asset
Entities at any time prior to the Closing (A) in the event any Acquired Asset
Entity has breached any material representation, warranty, or covenant
contained in this Agreement and such breach shall have had a Material Adverse
Effect on the Acquired Assets taken as a whole, the Buyer has notified the
Acquired Asset Entities of the breach, and the breach has continued without
cure for a period of 30 days after the notice of breach or (B) if the Closing
shall not have occurred on or before December 9, 2006 (the “Deadline Date”),
by reason of the failure of any condition precedent under §7(a) hereof (unless
the failure results primarily from the Buyer itself breaching any
representation, warranty, or covenant contained in this Agreement); provided, however,
that the Deadline Date shall automatically be extended to January 13, 2007 in
the event that the U.S. Department of Justice or the Federal Trade Commission
issues a request for additional information in connection with the parties’
Notification and Report Forms concerning the transactions described herein
under the Hart-Scott-Rodino Act;

 

(iii)          the Acquired Asset
Entities may terminate this Agreement by giving written notice to the Buyer at
any time prior to the Closing (A) in the event the Buyer has breached any
representation, warranty, or covenant contained in this Agreement and such
breach shall have had a Material Adverse Effect on the Buyer, the Acquired
Asset Entities have notified the Buyer of the breach, and the breach has
continued without cure for a period of 30 days after the notice of breach or
(B) if the Closing shall not have occurred on or before the Deadline Date, by
reason of the failure of any condition precedent under §7(b) hereof (unless the
failure results primarily from any Acquired Asset Entity itself breaching any representation,
warranty, or covenant contained in this Agreement); provided, however,
that the Deadline Date shall automatically be extended to January 13, 2007 in
the event that the U.S. Department of Justice or the Federal Trade Commission
issues a request for additional information in connection with the parties’
Notification and Report Forms concerning the transactions described herein
under the Hart-Scott-Rodino Act; and

 

(iv)          Either the Acquired
Asset Entities, on the one hand, or the Buyer and Holdings, on the other, may
terminate this Agreement by giving written notice to the other Party at any
time prior to the Closing if the Closing shall not have occurred on or before
January 13, 2007.

 

(b)                                 Effect
of Termination.  If any Party
terminates this Agreement pursuant to §9(a) above, all rights and obligations
of the Parties hereunder shall terminate without any Liability of any Party to
any other Party.

 

62

 

10.                                 Miscellaneous.

 

(a)                                  Press
Releases and Public Announcements.  No
Party shall issue any press release or make any public announcement relating to
the subject matter of this Agreement without the prior written approval of the
other Party; provided, however, that any Party
or its Affiliates may make any public disclosure it believes in good faith is
required by applicable law or any listing or trading agreement concerning its
publicly-traded securities (in which case the disclosing Party will use
commercially reasonable efforts to advise the other Party prior to making the
disclosure).

 

(b)           No Third-Party Beneficiaries.  This Agreement shall not confer any rights or
remedies upon any Person other than the Parties and their respective successors
and permitted assigns.

 

(c)           Entire Agreement.  This Agreement (including the documents
referred to herein) constitutes the entire agreement between the Parties and
supersedes any prior understandings, agreements, or representations by or
between the Parties, written or oral, to the extent they relate in any way to the
subject matter hereof.

 

(d)           Succession and Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior
written approval of the other Party; provided, however,
that the Buyer may (i) assign any or all of its rights and interests hereunder
to one or more of its Affiliates and (ii) designate one or more of its
Affiliates to perform its obligations hereunder (in any or all of which cases
the Buyer nonetheless shall remain responsible for the performance of all of
its obligations hereunder).

 

(e)           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.

 

(f)            Headings.  The section headings contained in this
Agreement are inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.

 

(g)           Notices.  All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two Business Days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:

 

If
to any Acquired Asset Entity:

 

International BioResources, L.L.C.

1100 Camellia Boulevard

Suite 201

Lafayette, Louisiana  70508

Fax:  (337) 931-6248

Attention:  Rodney Savoy

 

63

 

and

 

International BioResources, L.L.C.

1200 Camellia Boulevard

Suite 203

Lafayette, Louisiana  70508

Fax:  (337) 216-6644

Attention:  Ben Blanchet

 

and

 

Fulbright & Jaworski L.L.P.

666 Fifth Avenue

New York, New York  10103

Fax:  (212) 318-3400

Attention:  Neil Gold, Esq.

 

If
to the Buyer or Holdings:

 

Talecris Biotherapeutics
Holdings Corp.

PO Box 110526

4101 Research Commons

79 T.W. Alexander Drive

Research Triangle Park

North Carolina, USA 27709

Fax: (919) 316-6669

Attention: General Counsel

 

Copy
to:

 

Reed Smith LLP

599 Lexington Avenue

29th Floor

New York, NY 10022

Fax:  (212) 521-5450

Attention: David M. Grimes,
Esq.

 

Any Party may send any
notice, request, demand, claim, or other communication hereunder to the
intended recipient at the address set forth above using any other means
(including personal delivery, expedited courier, messenger service, facsimile,
ordinary mail, or electronic mail), but no such notice, request, demand, claim,
or other communication shall be deemed to have been duly given unless and until
it actually is received by the intended recipient. Any Party may change the
address to which notices, requests, demands, claims, and other communications
hereunder are to be delivered by giving the other Party notice in the manner
herein set forth.

 

(h)                                 Governing
Law.  This
Agreement shall be governed by and construed in accordance with the domestic
laws of the State of  New
York without giving effect to any choice or conflict of law
provision or rule (whether of the State of New York
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of New York.

 

64

 

(i)            Amendments and Waivers.  No amendment of any provision of this
Agreement shall be valid unless the same shall be in writing and signed by the
Parties. No waiver by any Party of any default, misrepresentation, or breach of
warranty or covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or breach of
warranty or covenant hereunder or affect in any way any rights arising by
virtue of any prior or subsequent such occurrence.

 

(j)            Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other jurisdiction.

 

(k)           Expenses.  Except as otherwise set forth in this §10(k),
each of the Buyer, Holdings and the Acquired Asset Entities will bear its own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby. The first
$300,000 of any and all transfer, documentary, sales, use, stamp, registration
and other such Taxes, and all conveyance fees, recording charges and other fees
and charges (including any penalties and interest) incurred in connection with
the consummation of the transactions contemplated by this Agreement (collectively,
“Transfer Taxes”) shall be paid split equally by the Acquired Asset
Entities, on the one hand, and the Buyer, on the other, when due, and any and
all Transfer Taxes in excess of $300,000 shall be paid by the Buyer when due. The
Buyer will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such Taxes, fees and charges, and, if
required by applicable law, the Acquired Asset Entities will, and the Buyer and
the Acquired Asset Entities will cause their respective Affiliates to, join in
the execution of any such Tax Returns and other documentation. In addition, the
Buyer shall pay the entirety of the HSR Filing Fee. Notwithstanding the
foregoing, Holdings shall reimburse the Acquired Asset Entities for all reasonable,
documented, out-of-pocket expenses associated with the Acquired Asset Entities’
preparation of SEC compliant financial statements and fulfillment of their
other obligations under §10(p)(ii) below.

 

(l)            Construction.  The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof
shall arise favoring or disfavoring any Party by virtue of the authorship of
any of the provisions of this Agreement. Any reference to any federal, state,
local, or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word “including” shall mean including without limitation.

 

(m)          Incorporation of Exhibits and
Schedules.  The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.

 

(n)           Specific Performance.  Each of the Parties acknowledges and agrees
that the other Party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or

 

65

 

any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in §10(o) below), in addition to any other remedy to which it may be
entitled, at law or in equity.

 

(o)           Submission to Jurisdiction.  Any action or proceeding seeking to enforce
any provision of, or based on any right arising out of, this Agreement may be
brought against any of the Parties in the courts of the State of New York,
County of New York, or, if it has or can acquire jurisdiction, in the United
States District Court for the Southern District of New York, and each of the
Parties consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any objection to
venue laid therein. Process in any action or proceeding referred to in the
preceding sentence may be served on any Party anywhere in the world.

 

(p)                                 Further
Assurances.

 

(i)            The Parties agree
after Closing: (a) to furnish upon request to each other Party such
information, (b) to execute and deliver to each other Party such documents, and
(c) to do such other acts and things as the other Parties may reasonably request
for the purpose of carrying out the intent and purpose of this Agreement and
the documents referred to herein.

 

(ii)           Without limiting
the generality of clause (i) above, from and after the date hereof, the
Acquired Asset Entities shall, and shall cause their respective officers,
directors, managers, members, employees, consultants and other representatives
to, cooperate with the Buyer and its Affiliates in connection with (a) the
preparation of audited and interim financial statements that satisfy all
applicable SEC regulations and other Applicable Laws for reporting companies,
(b) the preparation of pro forma financial statements satisfying the
requirements of Regulation S-X promulgated by the SEC, and (c) the consummation
and syndication of the debt financings undertaken by Holdings and Buyer in
connection with the Recapitalization and the transactions contemplated hereby
(which cooperation shall include, but not be limited to, delivery of executed
comfort letters, delivery of executed consents for inclusion in any public or
private financing documents or other documents filed with the SEC, consent to
the use of audit reports and other matters reasonably requested by the Buyer). The
Acquired Asset Entities shall use reasonable efforts to cause applicable
employees to execute and deliver to Holdings, as and when reasonably requested
by Holdings, customary management representation letters as required by
Holdings’ independent accountants or the Acquired Asset Entities’ independent
accountants in connection with historical audits of the financial statements of
the business of the Acquired Asset Entities being transferred hereunder and any
debt financing described in (c) above and to participate in presentation and
due diligence meetings relating to such financing.

 

(iii)          Without limiting
the generality of clause (i) above, during the period beginning on the Closing
Date and ending on December 31, 2009, the Buyer and Holdings shall provide the
Parent with monthly reports indicating (A) the status of FDA licensure at each
Unlicensed Center, (B) the status of QPP certification at each Unlicensed
Center, (C) the status of development and estimated timetable for the opening
of each Undeveloped Center and (D) the aggregate plasma production volume from
all Milestone Centers.

 

66

 

(iv)          From and after the
date hereof, the Acquired Asset Entities shall, and shall cause their
respective officers, directors, managers, members, employees, consultants and
other representatives to, cooperate with the efforts of the Buyer and its
Affiliates to receive reasonable assurances from Haemonetics Corporation that,
following the Closing, Haemonetics Corporation will make available to the Buyer
a sufficient number of plasmapherisis machines so as to enable the Buyer to
achieve its production targets at each of the Acquired Centers.

 

(q)                                 Tax
Matters.

 

(i)            Any agreement
between any Acquired Asset Entity and any of its Affiliates regarding
allocation or payment of Taxes or amounts in lieu of Taxes that, in each case,
may result in a Security Interest in any of the Acquired Assets shall be deemed
terminated at and as of the Closing.

 

(ii)           The Parties hereby
agree to provide each other with such cooperation and information as any of
them may reasonably request of the other Party in preparing and filing any Tax
Return, determining or contesting a Liability for Taxes or a right to a refund
of Taxes, participating in or conducting any audit or other proceeding in
respect of Taxes. The Parties shall make their respective officers, employees,
agents and representatives available on a basis mutually convenient to the
other party, to provide explanations of any documents or information provided
hereunder. Each of the Parties shall retain all Tax Returns, schedules and work
papers, records and other documents in its possession relating to Tax matters
of the Acquired Assets for each taxable period first ending after the Closing
Date and for all prior taxable periods until the later of (i) the expiration of
the statute of limitations of the taxable periods to which such Tax Returns and
other documents relate, without regard to extensions except to the extent
notified by the other Party in writing of such extensions for the respective
Tax periods, or (ii) six years following the due date (without extension) for
such Tax Returns.

 

(r)                                    Waiver
of Jury Trial.  EACH PARTY, TO THE
EXTENT PERMITTED BY LEGAL REQUIREMENTS, KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES ITS RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, EACH OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, AND ANY OTHER CONTRACTS OR TRANSACTIONS BETWEEN THE PARTIES, WHETHER
OCCURRING BEFORE OR AFTER THE DATE OF THIS AGREEMENT. THIS WAIVER APPLIES TO
ANY PROCEEDING, WHETHER SOUNDING IN CONTRACT TORT OR OTHERWISE.

 

[Remainder of this page
intentionally left blank.]

 

67

 

IN WITNESS
WHEREOF, the Parties hereto have executed this Agreement on the date first
above written.

 

 

	
  TALECRIS BIOTHERAPEUTICS
  HOLDINGS CORP.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ LAWRENCE D. STERN

  	
   

  
	
  Name:

  	
  Lawrence D. Stern

  	
   

  
	
  Title:

  	
  Executive Chairman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TALECRIS PLASMA RESOURCES,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ ALBERTO MARTINEZ

  	
   

  
	
  Name:

  	
  Alberto Martinez

  	
   

  
	
  Title:

  	
  President and CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  IBR-BYR L.L.C.

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ RODNEY L. SAVOY

  	
   

  
	
  Name:

  	
   Rodney l. Savoy

  	
   

  
	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
  IBR PLASMA CENTERS, L.L.C.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ RODNEY L. SAVOY

  	
   

  
	
  Name:

  	
  Rodney l. Savoy

  	
   

  
	
  Title:

  	
  CEO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  INTERNATIONAL BIORESOURCES,
  L.L.C.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ RODNEY L. SAVOY

  	
   

  
	
  Name:

  	
  Rodney l. Savoy

  	
   

  
	
  Title:

  	
  CEO

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