Document:

EXHIBIT 4.5

 

AMENDED AND RESTATED

 

STOCK PURCHASE AGREEMENT

 

This AMENDED AND RESTATED STOCK PURCHASE AGREEMENT,
dated as of July 28, 2005 (as amended or otherwise modified, the “Agreement”),
is between WELSH, CARSON, ANDERSON & STOWE IX, L.P., a Delaware limited
partnership (“WCAS IX”), the co-investors of WCAS IX listed on the
signature pages hereto (collectively with WCAS IX, the “Investors”),
Franck L. Gougeon (“Gougeon”), and AGA MEDICAL CORPORATION, a Minnesota
corporation (the “Company”).

 

RECITALS

 

WHEREAS, the Company, Gougeon, Michael Afremov (“Afremov”)
and Kurt Amplatz (“Amplatz”) are parties to civil litigation styled, Michael Afremov v. Kurt Amplatz et al., District Court File No. CT02-017734
(the “Litigation”), which is pending in the District Court for the
Fourth Judicial District, County of Hennepin, State of Minnesota (the “Court”);

 

WHEREAS, pursuant to an Order and Memorandum dated August 3,
2004, the Court ordered Afremov and Gougeon each to submit a proposal to the
Court setting forth respective terms on which each of them would purchase all
of the other’s shares of capital stock in the Company;

 

WHEREAS, on December 28, 2004, the Court entered
an Order for Judgment on Buyout Motions (the “Original Buyout Order”),
which, inter alia, ordered the buyout of all
the outstanding shares of stock of Afremov in the Company, pursuant to, and
subject to the terms of, such Order and this Agreement (the “Afremov Buyout”);

 

WHEREAS, on January 18, 2005, the Investors,
Gougeon and the Company entered into a Stock Purchase Agreement (the “Original
Agreement”) pursuant to which the Investors would purchase from the
Company, and the Company would issue and sell to the Investors shares of the
Company’s Series A Convertible Preferred Stock, par value $0.001 per share
(the “Series A Preferred Stock”), which shares are convertible into
shares of common stock of the Company, par value $0.01 per share (“Common
Stock”), and the Company would use the proceeds of such investment,
together with proceeds from other Contemplated Transactions, to consummate the
Afremov Buyout;

 

WHEREAS, on March 31, 2005, the Court entered an
Amended Order for Judgment on Buyout Motions (the “Final Order”);

 

WHEREAS, on April 20, 2005, Gougeon, Afremov and
Amplatz, entered into a Confidential Settlement and Mutual Release Agreement
(the “Settlement Agreement”), pursuant to which such parties agreed to
settle the Litigation provided, among other things, that the Afremov Buyout is
consummated on or prior to July 29, 2005; and

 

 

WHEREAS, in connection with the Settlement Agreement,
the Investors, Gougeon and the Company desire to amend and restate the Original
Agreement to provide for certain amendments necessary to consummate the
settlement contemplated thereby and otherwise to reflect certain changes in the
business of the Company since the date of the Original Agreement;

 

AGREEMENT

 

NOW THEREFORE, in
consideration of the premises and mutual promises herein made, and in
consideration of the representations, warranties and covenants herein contained,
the Investors, the Company and Gougeon hereby agree as follows:

 

1.                                      CERTAIN
DEFINITIONS; CERTAIN RULES OF CONSTRUCTION.

 

1.1           As
used herein, the following terms will have the following meanings:

 

“1933 Act” means the Securities Act of 1933.

 

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

 

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

 

“Ancillary Agreements” means the Stockholders
Agreement, Registration Rights Agreement, the Gougeon Employment Agreement, the
Settlement Agreement, the Contribution and Exchange Agreement and the Releases.

 

“Business” means the businesses conducted by
the Company and proposed to be conducted by the Company.

 

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

 

“Closing Cash Amount” means the cash and cash
equivalents of the Company that would be listed on the consolidated balance
sheet of the Company dated as of the Closing Date (but immediately prior to
giving effect to the consummation of the Contemplated Transactions) and
prepared in accordance with GAAP.

 

2

 

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

 

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

 

“Company’s Knowledge” means the actual
knowledge, after reasonable investigation, of Gougeon, Mike Smithson, Mark
Cibuzar, Jodi Raus, Ken Lock, Gary Thill and such other employees and agents of
the Company (including employees of Manchester Companies, Inc. who work on
the Company’s account with such entity) who would reasonably by expected to
have knowledge of the matter in question.

 

“Company Technology” means any and all
Technology used or useful in connection with the Business and any and all
Intellectual Property in any and all such Technology.

 

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

 

“Contemplated Transactions” means, collectively,
the transactions contemplated by this Agreement, including (a) the filing
of the Restated Articles with the Secretary of State of Minnesota, (b) the
issuance and sale of the Shares, (c) the execution of the Senior Credit
Facility and making of the loans contemplated thereby, (d) the execution
of the Subordinated Debt Agreement and issuance of the notes contemplated
thereby, (e) the execution, delivery and performance of the Ancillary
Agreements, (f) the payment of the Dividend, (g) the consummation of
the Afremov Buyout, and (h) the adoption of the Restated Bylaws by the
Company.

 

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

 

“Contribution and Exchange Agreement”
means that certain Contribution and Exchange Agreement, in form and substance
reasonably satisfactory to WCAS IX, to be entered into between Gougeon, WCAS IX
and the other parties thereto.

 

“Debt” means, with respect to any Person, all
obligations (including all obligations in respect of principal, accrued
interest, penalties, fees and premiums) of such Person (a) for borrowed
money (including overdraft facilities), (b) evidenced by notes, bonds,
debentures or similar Contractual Obligations, (c) for the deferred
purchase price of property, goods or services (other than trade payables or
accruals incurred in the Ordinary Course of Business), (d) under capital
leases (in accordance with GAAP), (e) in respect of letters of credit and
bankers’ acceptances, (f) for Contractual Obligations relating to interest
rate protection, swap agreements and collar agreements and (g) in the nature
of guarantees of the obligations described in clauses (a) through (f) above
of any other Person.

 

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

 

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

 

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

 

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

 

“Excluded Items” means those items disclosed on
the Schedules hereto which are specifically referenced as “Excluded Items” on
such Schedules.

 

“Expiration Date” means the later of (i) the
sixtieth day after the Company receives the final audited balance sheet of the
Company as at December 31, 2005 and the related audited consolidated
statements of income, cash flow and changes in stockholders’ equity of the
Company for the fiscal year then ended, accompanied by any notes thereto and
the report of the Company’s independent auditors, and (ii) the one-year
anniversary of the Closing Date.

 

“Facilities” means any buildings, plants,
improvements or structures located on the Real Property.

 

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

 

“Gougeon Employment Agreement” means the
employment agreement, in form and substance reasonably satisfactory to WCAS IX,
to be entered into between the Company and Gougeon at or prior to the Closing.

 

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

 

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

 

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“HSR Act” means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.

 

“Indemnity Claim” means a claim for indemnity
under Section 10.2.

 

“Indemnity Deductible Amount” means (i) $21,000,000
plus (ii) the Closing Cash Amount less (iii) the Target Cash Amount; provided,
that the Indemnity Deductible Amount shall not be less than $0.

 

“Indemnified Party” means with respect to any
Indemnity Claim, the Investor Indemnified Person asserting such claim under Section 10.2.

 

“Indemnifying Party” means, with respect to any
Indemnity Claim, the Company or Gougeon, as the case may be.

 

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

 

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

 

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

 

“Material Adverse Effect” means any change in,
or effect on, the Business, operations, Assets, prospects or condition
(financial or otherwise) of the Company which, when considered either
individually or in the aggregate together with all other adverse changes or
effects with respect to which such phrase is used in this Agreement, is, or is
reasonably likely to be, materially adverse to the Business, operations,
Assets, prospects or condition (financial or otherwise) of the Company, taken
as a whole.

 

“Ordinary Course of
Business” means an action taken by any Person in the course of such Person’s
business which is consistent with the past customs and practices of such Person

 

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(including past practice
with respect to quantity, amount, magnitude and frequency, standard employment
and payroll policies and past practice with respect to management of working
capital).

 

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

 

“Permits” means,
with respect to any Person, any license, franchise, permit, consent, approval,
right, privilege, certificate or other similar authorization issued by, or
otherwise granted by, any Governmental Authority or any other Person to which
or by which such Person is subject or bound or to which or by which any
property, business, operation or right of such Person is subject or bound.

 

“Permitted Encumbrance”
means (a) statutory liens for current Taxes, special assessments or other
governmental charges not yet due and payable or the amount or validity of which
is being contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with GAAP, (b) mechanics’,
materialmen’s, carriers’, workers’, repairers’ and similar statutory liens
arising or incurred in the Ordinary Course of Business which liens have not had
and are not reasonably likely to have a Material Adverse Effect, (c) liens
securing the purchase price or lease payments for equipment obtained by the
Company in the Ordinary Course of Business which liens have not had and are not
reasonably likely to have a Material Adverse Effect, (d) zoning,
entitlement, building and other land use regulations imposed by governmental
agencies having jurisdiction over any Owned Real Property which are not
violated in any material respect by the current use and operation of the Owned
Real Property, (e) deposits or pledges made in connection with, or to
secure payment of, worker’s compensation, unemployment insurance, old age
pension programs mandated under applicable Legal Requirements or other social
security, (f) covenants, conditions, restrictions, easements, encumbrances
and other similar matters of record affecting title to but not adversely
affecting current occupancy or use of the Owned Real Property in any material
respect and (g) restrictions on the transfer of securities arising under
federal and state securities laws.

 

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

 

“Registration Rights Agreement”
means that certain Registration Rights Agreement, in form and substance
reasonably satisfactory to WCAS IX, to be entered into between Gougeon, WCAS IX
and the other parties thereto.

 

“Releases” means the Mutual
General Release Agreement, dated as of January 18, 2005, the Mutual
General Release Agreement, to be dated as of the Closing Date, and the other
agreements providing for a release of claims and waiver of rights, including
appeal rights with respect to the Litigation, in the form reasonably
satisfactory to WCAS IX, executed by each of the Company, 

 

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Gougeon
and Amplatz and, to the extent required by WCAS IX, their respective
Affiliates.

 

“Sale Transaction”
means any (i) merger, consolidation or other business combination
transaction involving the Company or any of its Affiliates, (ii) sale or
other disposition of material assets of the Company or (iii) issuance,
sale or other disposition of any Equity Interests of the Company.

 

“Senior Credit
Facility” means that certain new senior credit facility to be entered into
by the Company on or prior to the Closing Date, pursuant to which up to
$122,000,000 will be made available to the Company.

 

“Subordinated Debt Agreement”
means that certain securities purchase agreement to be entered into by the
Company and WCAS Capital Partners IV, L.P. on or prior to the Closing Date, pursuant
to which up to $50,000,000 will be made available to the Company.

 

“Stockholders Agreement” means
that certain Stockholders Agreement, in form and substance reasonably
satisfactory to WCAS IX, to be entered into between Gougeon, WCAS IX and the other
parties thereto.

 

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

 

“Target Cash Amount”
means $53,500,000.

 

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

 

“Tax Benefit”
means the sum of the amount by which the actual Tax Liability of the Company to
the applicable Governmental Authority is reduced (including, without limitation,
by or as a result of a deduction, increase in basis, entitlement to refund,
credit or otherwise, whether available in the current taxable year, as an
adjustment to the taxable income in any other taxable year or as a carryforward
or carryback, as applicable).

 

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

 

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amendment thereof.

 

“Technology” means
all inventions, works, discoveries, innovations, know-how, information
(including ideas, research and development, know-how, formulas, compositions,
processes and techniques, data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, business and marketing plans and
proposals, documentation and manuals), computer software, firmware, computer
hardware, integrated circuits and integrated circuit masks, electronic,
electrical and mechanical equipment and all other forms of technology,
including improvements, modifications, works in process, derivatives or
changes, whether tangible or intangible, embodied in any form, whether or not
protectible or protected by patent, copyright, mask work right, trade secret
law or otherwise, and all documents and other materials recording any of the
foregoing.

 

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

 

1.2           Except as otherwise explicitly
specified to the contrary, (a) references to a Section, Article, Exhibit or
Schedule means a Section or Article of, or Schedule or Exhibit to
this Agreement, unless another agreement is specified, (b) the word “including”
will be construed as “including without limitation,” (c) references to a
particular statute or regulation include all rules and regulations
thereunder and any predecessor or successor statute, rules or regulation,
in each case as amended or otherwise modified from time to time, (d) words
in the singular or plural form include the plural and singular form,
respectively and (e) references to a particular Person include such Person’s
successors and assigns to the extent not prohibited by this Agreement.

 

2.                                    PURCHASE
AND SALE OF SHARES; DIVIDEND; RELEASE.

 

2.1            Purchase
and Sale of Shares.  At the Closing,
subject to the terms and conditions of this Agreement, each Investor agrees,
severally and not jointly, to purchase, and the Company agrees to sell and
issue to each Investor, the number of shares of Series A Preferred Stock
(collectively, the “Shares”) set forth in the column designated “Minimum
Shares” opposite such Investor’s name on Schedule 2.1 hereto, at a cash
purchase price of $1,000 per share (the “Purchase Price”); provided,
that at the Closing, in the event the Closing Cash Amount is less than the
Target Cash Amount, each Investor agrees, severally and not jointly, to
purchase, and the Company agrees to sell and issue to each Investor, up to the
number of Shares set forth in the column designated “Maximum Shares” opposite
such Investor’s name on Schedule 2.1 hereto at the Purchase Price, with
the aggregate amount of such additional shares to be (a) the lesser of (i) difference
between the Closing Cash Amount and the Target Cash Amount and (ii) $20,000,000,
divided by (b) the Purchase Price, and the specific amount of additional
Shares to be purchased by each Investor to be a pro rata
portion of such aggregate additional Shares based on the difference, if any,
between such “Minimum Shares” and such “Maximum Shares” set forth opposite such
Investor’s name.

 

2.2            The
Closing.  The purchase and sale of
the Shares (the “Closing”) will take place at the offices of Ropes &
Gray LLP, 45 Rockefeller Plaza, New York, New York 10111 on the first date the
conditions set forth in Sections 7 and 8 have been satisfied or waived by the
applicable parties, or at such other place and on such other date as the
Company and WCAS IX may agree in writing, in each case, subject to the
satisfaction or waiver of the conditions set forth

 

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in Sections 7 and 8.  Except as
otherwise provided in Section 9, the failure to consummate the purchase
and sale provided for in this Agreement on the date and time and at the place
specified herein will not relieve any party to this Agreement of any obligation
under this Agreement.

 

2.3                                 Closing Deliveries.  At the Closing, each Investor will deliver
cash by wire transfer of immediately available federal funds to the account
designated in writing not fewer than two Business Days prior to the scheduled
Closing Date by the Company, an amount equal to the aggregate Purchase Price to
be paid by such Investor for the Shares to be purchased hereunder, in each
case, against delivery to such Investor of a certificate or certificates
evidencing such Shares.  At the Closing,
the Company will deliver to the Investors a certificate indicating its
calculation of the Closing Cash Amount, which calculation will be reasonably
satisfactory to the Investors.

 

2.4                                 Dividend.  In connection
with the Closing, the Board of Directors of the Company shall declare a
dividend on its outstanding shares of Common Stock as of the date of execution
of this Agreement in the aggregate amount of $20,000,000 (the “Dividend”).  The Dividend shall be payable on the Closing
Date to Gougeon and Afremov, the Company’s stockholders of record as of the
date of execution of this Agreement, in equal shares of $10,000,000, based on
the pro rata ownership of Common Stock of each such stockholder on such date; provided,
that:

 

(a) of the
amount of the Dividend to be paid to Gougeon (i) an amount equal to the
aggregate principal amount of any loans made by the Company to Gougeon,
including loans made in December 2003 and November 2004, together
with any accrued and unpaid interest thereon, will be retained by the Company
as payment in full satisfaction of such loans, and (ii) the remaining
portion of the Dividend payable to Gougeon shall be paid to him in cash on the
Closing Date, and

 

(b) subject
to the terms of the Settlement Agreement, the amount of the Dividend to be paid
to Afremov will be retained by the Company as partial payment for the loans,
including any accrued and unpaid interest thereon, made by the Company to
Afremov that are currently outstanding and are payable upon consummation of the
Contemplated Transactions.

 

2.5                                Release.  In compliance
with decretal paragraph 5 of the Final Order to include herein release language
which at a minimum contains the language set forth in that decretal paragraph
5, Schedule 2.5 attached hereto sets forth the Mutual General Release
Agreement agreed to between the parties thereto (the “Mutual General Release
Agreement”).  The signatories to the
Mutual General Release Agreement are not signatories to this Agreement by
reason of their execution of such agreement. 
The execution and delivery of the Mutual General Release Agreement by
all parties thereto occurred contemporaneously with execution and delivery of
the Original Agreement.  The parties
intend to execute a new Release, substantially in the form of the Mutual
General Release Agreement, as of the Closing Date.  Gougeon and WCAS IX acknowledge that
notwithstanding the provisions of the Mutual General Release Agreement (or any
other Release), the letter agreement, dated as of November 29, 2004
between such parties remains in full force and effect and provisions of the
Mutual General Release Agreement (or any other Release) do not apply to such
letter.

 

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2.6           Contribution and
Exchange Agreement.  Immediately upon
consummation of the Afremov Buyout, Gougeon and the Investors shall cause the
Company to enter into the Contribution and Exchange Agreement and, subject to
the terms and conditions therein, consummate the transactions contemplated
thereby.

 

3.                                       REPRESENTATIONS
AND WARRANTIES OF THE COMPANY AND GOUGEON.

 

In order to induce the
Investors to enter into and perform this Agreement and to consummate the
Contemplated Transactions, the Company and Gougeon, jointly and severally,
represent and warrant to the Investors as follows:

 

3.1           Organization; Subsidiaries.
The Company is (a) duly organized, validly existing and in good standing
under the laws of the State of Minnesota and (b) is duly qualified to do
business and in good standing in each jurisdiction in which it owns or leases
Real Property and in each other jurisdiction in which the failure to so qualify
has not had, and is not reasonably likely to have, a Material Adverse Effect.  The Company has delivered to the Investors
true, accurate and complete copies of (x) the Organizational Documents of
the Company and (y) the minute books of the Company which contain records
of all meetings held of, and other corporate actions taken by, its
stockholders, Board of Directors and any committees appointed by its Board of
Directors. Except as disclosed on Schedule 3.1, the Company has no
Subsidiaries and does not own any Equity Interests of any other Person.

 

3.2           Power
and Authorization.  The execution,
delivery and performance by the Company of this Agreement and each Ancillary
Agreement to which it is a party and the consummation of the Contemplated
Transactions are within the power and authority of the Company and have been
duly authorized by all necessary action on the part of the Company.  This Agreement and each Ancillary Agreement
to which it is a party (a) has been (or, in the case of Ancillary
Agreements to be entered into after the date hereof and at or prior to the
Closing, will be) duly executed and delivered by the Company and (b) is
(or, in the case of Ancillary Agreements to be entered into after the date
hereof and at or prior to the Closing, will be) a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.  The Company has the full
power and authority necessary to own and use its Assets and carry on the
Business.

 

3.3           Authorization
of Governmental Authorities.  Except
as disclosed on Schedule 3.3, no action by (including any
authorization, consent or approval), or in respect of, or filing with, any
Governmental Authority is required for, or in connection with, the valid and
lawful (a) authorization, execution, delivery and performance by the
Company of this Agreement and each Ancillary Agreement to which it is a party
or (b) the consummation of the Contemplated Transactions by the Company.

 

3.4           Noncontravention.  Except as disclosed on Schedule 3.4,
neither the execution, delivery and performance by the Company of this
Agreement or any Ancillary Agreement nor the consummation of the Contemplated
Transactions will: (a) assuming the taking of any action by (including any
authorization, consent or approval), or in respect of, or any filing with, any
Governmental Authority, in each case, as disclosed on Schedule 3.3,
violate any Legal 

 

10

 

Requirement applicable to the Company; (b) result
in a breach or violation of, or default under, any Contractual Obligation of
the Company; (c) require any action by (including any authorization,
consent or approval) or in respect of (including notice to), any Person under
any Contractual Obligation of the Company; (d) result in the creation or
imposition of an Encumbrance upon, or the forfeiture of, any Asset; or (e) result
in a breach or violation of, or default under, the Organizational Documents of
the Company.

 

3.5                                 Capitalization of the Company.

 

3.5.1                                  Outstanding Capital Stock.

 

(a)           As of the date of this Agreement, the
entire authorized capital stock of the Company consists of 8,000,000 shares of
Common Stock, and 2,000,000 shares of undesignated Preferred Stock, par value
$0.01 per share, of which 400,000 shares of Common Stock are outstanding and no
shares of such Preferred Stock are outstanding. 
All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued, and are fully paid and non-assessable.  The Company has not violated the 1933 Act,
any state “blue sky” or securities laws, any other similar Legal Requirement or
any preemptive or other similar rights of any Person in connection with the
issuance or redemption of any of its Equity Interests.

 

(b)           Upon the filing of the Restated
Articles with the Secretary of State of Minnesota, the authorized capital stock
of the Company will consist of 380,000 shares of Common Stock, and 148,524
shares of Series A Preferred Stock.

 

3.5.2                                  Ownership.

 

(a)           As of the date of this Agreement, all
of the outstanding Equity Interests of the Company are held of record and
beneficially owned by the Persons and in the respective amounts set forth in Schedule 3.5.  The Company has delivered to the Investors
true, accurate and complete copies of the stock ledger of the Company which
reflects all issuances, transfers, repurchases and cancellations of shares of
its capital stock.

 

(b)           After giving effect to the
Contemplated Transactions, all the outstanding shares of capital stock of the
Company shall be owned as set forth on Schedule 3.5.

 

3.5.3                                  The Shares.  The Shares, when issued and delivered and
paid for in compliance with the provisions of this Agreement, will be validly
issued, fully paid and non-assessable. 
The shares of Common Stock issuable upon conversion of the Shares (the “Conversion
Shares”) have been duly and validly reserved and, when issued in compliance
with the provisions of the Restated Articles, will be validly issued, fully
paid and nonassessable.

 

3.5.4                                  Encumbrances, etc.  Except as disclosed on Schedule 3.5: (a) there
are no preemptive rights or other similar rights in respect of Shares, the
Conversion Shares or 

 

11

 

any
other Equity Interests in the Company, (b) except as imposed by applicable
securities laws, there are no Encumbrances on, or other Contractual Obligations
relating to, the ownership, transfer or voting of the Shares, the Conversion
Shares or any other Equity Interests in the Company, or otherwise affecting the
rights of any holder of the Equity Interests in the Company, (c) except
for the Contemplated Transactions, there is no Contractual Obligation, or
provision in the Organizational Documents of the Company which obligates it to
purchase, redeem or otherwise acquire, or make any payment (including any
dividend or distribution) in respect of, any Equity Interests in the Company
and (d) there are no existing rights with respect to registration under
the 1933 Act of any Equity Interests in the Company.

 

3.6                                 Financial Statements.

 

3.6.1                                  Financial Statements.  The Company has delivered to the Investors
copies of each of the following: (a) the audited balance sheets of the
Company as at December 31, 2004 (respectively, the “Most Recent Balance
Sheet,” and the “Most Recent Balance Sheet Date”), December 31,
2003 and December 31, 2002 and the related audited consolidated statements
of income, cash flow and changes in stockholders’ equity of the Company for the
fiscal years then ended, accompanied by any notes thereto and the report of the
Company’s independent auditors (collectively, the “Audited Financials”);
and (b) the unaudited balance sheets of the Company as at May 31,
2005 and the related unaudited statement of income, cash flow and changes in
stockholders’ equity of the Company for the five months then ended (the “Interim
Financials” and together with the Audited Financials, collectively the “Financials”)].

 

3.6.2                                  Compliance with GAAP, etc.  Except as disclosed on Schedule 3.6,
the Financials (including any notes thereto) (a) are complete and correct
and were prepared in accordance with the books and records of the Company, (b) have
been prepared in accordance with GAAP, consistently applied (subject, in the
case of the Interim Financials, to normal year-end audit adjustments, the
effect of which will not, individually or in the aggregate, be materially
adverse and the absence of notes that, if presented, would not differ
materially from those included in the most recent Audited Financials) and (c) fairly
present the financial position of the Company as at the respective dates
thereof and the results of the operations of the Company and changes in
financial position for the respective periods covered thereby.

 

3.7                                 Absence of Undisclosed Liabilities.  The Company has no
Liabilities except for (a) Liabilities set forth on Schedule 3.7, (b) Liabilities
set forth on the face of the Most Recent Balance Sheet, and (c) Liabilities
incurred in the Ordinary Course of Business since the Most Recent Balance Sheet
Date (none of which results from, arises out of, or relates to any breach or
violation of, or default under, a Contractual Obligation or Legal Requirement).

 

3.8                                 Absence of Certain Developments.  Since the Most
Recent Balance Sheet Date, the Business has been conducted in the Ordinary
Course of Business and, except for matters disclosed on Schedule 3.8:

 

(a)           the Company has not (i) amended
its Organizational Documents, 

 

12

 

(ii) amended
any term of its outstanding Equity Interests or other securities or (iii) issued,
sold, granted, or otherwise disposed of, its Equity Interests or other
securities;

 

(b)           the Company has not become liable in
respect of any guarantee or has incurred, assumed or otherwise become liable in
respect of any Debt;

 

(c)           the Company has not sold any Assets
(other than sales of inventory in the Ordinary Course of Business) or permitted
any of its Assets to become subject to an Encumbrance other than a Permitted
Encumbrance;

 

(d)           the Company has not (i) made any
declaration, setting aside or payment of any dividend or other distribution
with respect to, or any repurchase, redemption or other acquisition of, any of
its capital stock or other Equity Interests or (ii) entered into, or
performed, any transaction with, or for the benefit of, any director or officer
(other than payments made to officers and directors in the Ordinary Course of
Business);

 

(e)           there has been no material loss,
destruction, damage or eminent domain taking (in each case, whether or not
insured) affecting the Business or any material Asset;

 

(f)            the Company has not increased the
Compensation payable or paid, whether conditionally or otherwise, to (i) any
employee, consultant or agent other than in the Ordinary Course of Business, or
(ii) any director or officer of the Company;

 

(g)           the Company has not entered into any
Contractual Obligation providing for the employment or consultancy of any
Person on a full-time, part-time, consulting or other basis or otherwise
providing Compensation or other benefits to any officer, director, employee or
consultant; the Company has not made any change in its methods of accounting or
accounting practices (including with respect to reserves);

 

(h)           the Company has not made any capital
expenditure in excess of $100,000;

 

(i)            the Company has not made, changed or
revoked any material Tax election, elected or changed any method of accounting
for Tax purposes, settled any Action in respect of Taxes or entered into any
Contractual Obligation in respect of Taxes with any Governmental Authority;

 

(j)            the Company has not terminated or
closed any Facility, business or operation;

 

(k)           the Company has not adopted any
Employee Plan or, except in accordance with terms thereof as in effect on the
Most Recent Balance Sheet Date, increased any benefits under any Employee Plan;

 

(l)            the Company has not written up or
written down any of its material Assets or revalued its inventory, or made any
changes with respect to accounting policies, 

 

13

 

procedures
and practices (other than as required by GAAP);

 

(m)          the Company has not settled or
compromised any pending or threatened Action involving potential payments by or
to the Company of more than $50,000;

 

(n)           the Company has not entered into any
Contractual Obligation to do any of the things referred to elsewhere in this Section 3.8;
and

 

(o)           no event or circumstance has occurred
which has had, or is reasonably likely to have, a Material Adverse Effect.

 

3.9                                 Assets.  Except as disclosed on Schedule 3.9,
the Company has sole and exclusive, good and marketable title to, or, in the
case of property held under a lease or other Contractual Obligation, a sole and
exclusive, enforceable leasehold interest in, or right to use, all of its
properties, rights and assets, whether real or personal and whether tangible or
intangible, including all assets reflected in the Most Recent Balance Sheet or
acquired after the Most Recent Balance Sheet Date (except for such assets which
have been sold or otherwise disposed of since the Most Recent Balance Sheet
Date in the Ordinary Course of Business) (collectively, the “Assets”).  Except as disclosed on Schedule 3.9,
none of the Assets is subject to any Encumbrance other than Permitted
Encumbrances.  The Assets comprise all of
the assets, properties and rights of every type and description, whether real
or personal, tangible or intangible, used or necessary to the conduct of the
Business and are adequate to conduct the Business.

 

3.10                           Accounts Receivables.  All accounts and notes receivable reflected
on the Most Recent Balance Sheet and all accounts and notes receivable arising
subsequent to the Most Recent Balance Sheet Date and on or prior to the Closing
Date, have arisen or will arise in the Ordinary Course of Business, represent
or will represent legal, valid, binding and enforceable obligations to the
Company, subject to consistently recorded reserves for bad debts established as
of a date prior to the Closing Date in accordance with GAAP and in a
commercially reasonable manner consistent with past practice, and, to the
Company’s Knowledge, will not be subject to any contests, claims, counterclaims
or setoffs.

 

3.11                           Real Property.

 

3.11.1         Schedule 3.11 sets forth a list
of all real property owned by the Company (the “Owned Real Property”)
and describes each leasehold interest in real property leased, subleased by,
licensed or with respect to which a right to use or occupy has been granted to
or by the Company (such leased Real Property together with the Owned Real
Property, the “Real Property”), and specifies the lessor or lessors of
such leased property, and identifies each lease or any other Contractual
Obligation under which such property is leased (the “Real Property Leases”).  Except as described on Schedule 3.11
there are no written or oral subleases, licenses, concessions, occupancy
agreements or other Contractual Obligations granting to any other Person the
right of use or occupancy of the Real Property and there is no Person (other
than the Company and any lessor(s) of leased Real Property) in possession
of the leased Real Property.

 

14

 

3.11.2         The Company is not obligated to pay any
leasing or brokerage commission as a result of the Contemplated
Transactions.  There is no pending or, to
Company’s Knowledge, threatened eminent domain taking affecting any of the Real
Property.  The Company has delivered to
the Investors true, correct and complete copies of the Real Property Leases
including all amendments, modifications, notices or memoranda of lease thereto
and all estoppel certificates or subordinations, non-disturbance and attornment
agreements related thereto.

 

3.11.3         None of the Facilities currently
existing on the Real Property encroaches upon, and any Facilities under
construction on the Real Property will not encroach upon, the real property of
any other Person.  No facility of any
other Person encroaches upon the Real Property. 
Each Facility is supplied with utilities and other services (including
gas, electricity, water, drainage, sanitary sewer, storm sewer, fire protection
and telephone) necessary for the operation of such Facility as the same is
currently operated or currently proposed to be operated.  Each parcel of Real Property abuts on, and
has direct vehicular access to, a public road, or has access to a public road
via a permanent, irrevocable appurtenant easement benefiting the parcel of Real
Property, in each case, to the extent necessary for the conduct of the
Business.

 

3.11.4         The Real Property and its current use,
occupancy and operation by the Company and the Facilities located thereon do not
(a) constitute a nonconforming use under any applicable building, zoning,
subdivision or other land use or similar Legal Requirements or (b) otherwise
violate or conflict with any covenants, conditions, restrictions or other
Contractual Obligations, including the requirements of any applicable
Encumbrances thereto.  The Company (a) is
not in violation of any material Legal Requirement relating to Real Property,
including setback requirements, zoning restrictions and ordinances, building,
life, access, safety, health and fire codes and ordinances affecting the Real
Property, or (b) has not received notice of any eminent domain,
condemnation or similar proceeding pending or, to the Company’s Knowledge,
threatened, or any Government Order relating thereto.

 

3.12                           Equipment.  Except as described on Schedule 3.12,
all of the fixtures and other improvements to the Real Property included in the
Assets (including any Facilities) and all of the tangible personal property
other than inventory included in the Assets (the “Equipment”) (a) are
adequate and suitable for their present and intended uses, (b) are in good
working order, operating condition and state of repair, (c) have no
defects (whether patent or latent) and (d) have been maintained in
accordance with normal industry practice.

 

3.13                           Intellectual Property.

 

3.13.1         The Company is the sole owner of or has
the sole right to use all Company Technology, and none of the Company
Technology is in the possession, custody, or control of any Person other than
the Company.

 

3.13.2         Except as disclosed on Schedule 3.13,
the Company (a) has not interfered with, infringed upon, misappropriated,
or otherwise come into conflict with any Intellectual Property rights of third
parties or (b) has not received any written or, if 

 

15

 

received
by the Company within the last 90 days, oral, charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that a Person must license or refrain from using
any Intellectual Property rights of any third party in connection with the
conduct of the Business or the use of the Company Technology).  To the Company’s Knowledge, no third party
has interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Company Technology.

 

3.13.3         Schedule 3.13 identifies (a) all
registered Intellectual Property which has been issued to the Company or
relates to the Business, (b) each pending application for registration
which the Company has made with respect to any Company Technology, (c) each
Contractual Obligation which the Company has granted to any third party with
respect to any of (a) or (b) above and (d) each Contractual
Obligation which the Company has granted to any third party with respect to
Company Technology that is not included in (a) or (b) above.  True, accurate and complete copies of all
such registrations, applications and Contractual Obligations, in each case, as
amended, or otherwise modified and in effect, have been made available to the
Investors, as well as true, accurate and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of each such
item.  Each such registration is valid
and subsisting.  Schedule 3.13
also identifies each unregistered trade name, trade dress, trademark or service
mark used by the Company or in connection with the Business or the Company
Technology.

 

3.13.4         With respect to each item of Company
Technology: (a) the Company possesses all right, title, and interest in
and to such item, free and clear of any Encumbrance; (b) such item is not
subject to any outstanding Government Order, and no Action is pending or, to
the Company’s Knowledge, threatened, which challenges the legality, validity,
enforceability, use or ownership of such item; and (c) except as disclosed
on Schedule 3.13, the Company has not agreed and does not have a
Contractual Obligation to indemnify any Person for or against any interference,
infringement, misappropriation or other conflict with respect to such item.

 

3.13.5         Schedule 3.13 identifies each
item of Company Technology that any Person besides the Company owns and that is
used by the Company or in connection with the Business pursuant to any license
(other than commercial off-the-shelf or shrink-wrap computer software
licenses), sublicense or other Contractual Obligation (the “Licenses”).  Except as disclosed on Schedule 3.13,
there are no royalties for the use of any such Company Technology.  The Company has made available to the
Investors true, accurate and complete copies of all of the Licenses, in each
case, as amended or otherwise modified and in effect.  With respect to each such item identified on Schedule
3.13:  (a) such item is not
subject to any outstanding Government Order, and no Action is pending or, to
the Company’s Knowledge, threatened which challenges the legality, validity or
enforceability of such item and (b) the Company has not granted any
sublicense or similar right with respect to any License covering such item.

 

3.13.6         All Products made, used, or licensed
under any registered patents that are part of the Company Technology are
properly marked with patent notices, except 

 

16

 

where
the failure to do has not had, and is not reasonably likely to have, a Material
Adverse Effect.  All Products and other
materials that use any trademark or service mark that is part of the Company
Technology or otherwise used in the Business bear proper trademark notices,
except where the failure to do has not had, and is not reasonably likely to
have, a Material Adverse Effect.  All
works that are part of the Company Technology and provided or published to
third parties are marked with proper copyright notices, except where the
failure to do has not had, and is not reasonably likely to have, a Material
Adverse Effect.

 

3.13.7         Except as described on Schedule 3.13,
all current and former employees and contractors of the Company who contributed
to the Company Technology have executed enforceable Contractual Obligations
that assign to the Company all Intellectual Property rights to any inventions,
improvements, discoveries or information relating to the Business.

 

3.13.8         Except as described on Schedule 3.13,
none of the Company Technology constitutes or is dependent on any open source
computer code, and none of the Company Technology is subject to any License or
other Contractual Obligation that would require the Company to divulge to any
Person any source code or trade secret that is part of the Company Technology.

 

3.13.9         The Company use and dissemination of
any and all data and information concerning consumers of its products or users
of any web sites operated by the Company is in compliance with all material
applicable privacy policies, terms of use, and laws.  The Contemplated Transactions as of the
Closing will not violate any privacy policy, terms of use, or Laws relating to
the use, dissemination, or transfer of such data or information.

 

3.14                           Legal Compliance; Permits.

 

3.14.1         Compliance.  The Company is not in breach or violation of,
or default under: (a) its Organizational Documents nor, to the Company’s
Knowledge, is there a basis which could constitute such a breach, violation or
default; or (b) any Legal Requirement nor, to Company’s Knowledge, is
there a basis which could constitute such a breach, violation or default,
except for breaches, violation or defaults (i) disclosed on Schedule 3.14
and (ii) which have not had, and are not reasonably likely to have, a
Material Adverse Effect.

 

3.14.2         Permits.  The Company has been duly granted all Permits
under all Legal Requirements necessary for the conduct of the Business.  Except as disclosed on Schedule 3.14,
(a) such Permits are valid and in full force and effect, (b) the
Company is not in breach or violation of, or default under, any such Permit,
and, to the Company’s Knowledge, no basis exists which, with notice or lapse of
time or both, would constitute any such breach, violation nor default and (c) such
Permits will continue to be valid and in full force and effect, on identical
terms immediately following the consummation of the Contemplated Transactions.

 

17

 

3.15                           Tax Matters.

 

3.15.1         The Company has timely filed, or has
caused to be timely filed on its behalf, all Tax Returns required to be filed
by it in accordance with all Legal Requirements.  All such Tax Returns were true, correct and
complete in all respects.  Except as
described on Schedule 3.15, (i) all Taxes owed by the Company
(whether or not shown on any Tax Return) have been timely paid in full, (ii) the
Company has not received notice from an authority in a jurisdiction where the
Company does not file Tax Returns that the Company is or may be subject to
taxation by that jurisdiction, and (iii) to the Company’s Knowledge, there
is no basis for any such claim to be made. 
There are no Encumbrances with respect to Taxes upon any Asset other
than Permitted Encumbrances for current Taxes not yet due and payable.

 

3.15.2         The Company has deducted, withheld and
timely paid to the appropriate Governmental Authority all Taxes required to be
deducted, withheld or paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party,
and the Company has complied with all reporting and recordkeeping requirements.

 

3.15.3         Except as disclosed on Schedule 3.15,
to the Company’s Knowledge, there is no dispute, audit, investigation,
proceeding or claim concerning any Tax Liability of the Company pending, being
conducted, claimed, raised by a Governmental Authority in writing.  The Company has provided or made available to
the Investors true, correct and complete copies of all Tax Returns, examination
reports, and statements of deficiencies filed, assessed against, or agreed to
by the Company for the last three years.

 

3.15.4         The Company has not waived any statute
of limitations in respect of Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency. 
The Company has not executed any power of attorney with respect to any
Tax, other than powers of attorney that are no longer in force.  No closing agreements, private letter
rulings, technical advice memoranda or similar agreements or rulings relating
to Taxes have been entered into or issued by any Governmental Authority with or
in respect of the Company.

 

3.15.5         The Company has not made any payments,
or has been or is a party to any agreement, contract, arrangement or plan that
could result in it making payments, that have resulted or would result,
separately or in the aggregate, in the payment of any “excess parachute payment”
within the meaning of Code Section 280G or in the imposition of an excise
Tax under Code Section 4999 (or any corresponding provisions of state,
local or foreign Tax law) or that were or would not be deductible under Code
Sections 162 or 404.

 

3.15.6         The Company has never been a member of
an “affiliated group” within the meaning of Code Section 1504(a) filing
a consolidated federal income Tax Return (other than the “affiliated group” the
common parent of which is the Company). 
The Company is not a party to any Contractual Obligation relating to Tax
sharing or Tax allocation.  The Company
has no Liability for the Taxes of any Person (other than the 

 

18

 

Company)
under Treasury Regulation 1.1502-6 (or any similar provision of state, local or
foreign law), as a transferee or successor, by contract or otherwise.

 

3.15.7         The Company has not filed a consent
under Code Section 341(f).

 

3.15.8         The Company is not and has not been
required to make any adjustment pursuant to Code Section 481(a) (or
any predecessor provision) or any similar provision of state, local or foreign
tax law by reason of any change in any accounting methods, will not be required
to make such an adjustment as a result of the Contemplated Transactions, and
there is no application pending with any Governmental Authority requesting
permission for any changes in any of its accounting methods for Tax
purposes.  To the Company’s Knowledge, no
Governmental Authority has proposed any such adjustment or change in accounting
method.

 

3.15.9         The Company will not be required to
include any amount in taxable income or exclude any item of deduction or loss
from taxable income for any taxable period (or portion thereof) ending after
the Closing Date as a result of (a) any “closing agreement” as described
in Code Section 7121 (or any corresponding or similar provision of state,
local or foreign Income Tax law) executed on or prior to the Closing Date, (b) any
deferred intercompany gain or excess loss account described in Treasury
Regulations under Code Section 1502 (or any corresponding or similar
provision or administrative rule of federal, state, local or foreign
Income Tax law), (c) installment sale or open transaction disposition made
on or prior to the Closing Date, (d) any prepaid amount received on or
prior to the Closing Date or (e) any change in Legal Requirements.

 

3.15.10       The Company does not own any property of
a character, the indirect transfer of which, pursuant to this Agreement, would
give rise to any documentary, stamp, or other transfer Tax.

 

3.16                           Employee Benefit Plans.

 

3.16.1         For purposes of this Agreement, “Employee
Plan” means any plan, program, agreement, policy or arrangement, whether or
not reduced to writing, and whether covering a single individual or a group of
individuals, that is (a) a welfare plan within the meaning of Section 3(1) of
ERISA, (b) a pension benefit plan within the meaning of Section 3(2) of
ERISA, (c) a stock bonus, stock purchase, stock option, restricted stock,
stock appreciation right or similar equity-based plan or (d) any other
deferred-compensation, retirement, welfare-benefit, bonus, incentive or
fringe-benefit plan, program or arrangement.

 

3.16.2         Schedule 3.16 lists all Employee
Plans as to which the Company sponsors, maintains, contributes or is obligated
to contribute, or under which the Company has or may have any Liability, or
which benefits any current or former employee, director, consultant or
independent contractor of the Company or the beneficiaries or dependents of any
such Person (each a “Company Plan”). 
With respect to each Company Plan, the Company has delivered to the
Investors true, accurate and complete copies of each of the following:  (a) if the plan has been reduced to
writing, the 

 

19

 

plan
document together with all amendments thereto, (b) if the plan has not
been reduced to writing, a written summary of all material plan terms, (c) if
applicable, copies of any trust agreements, custodial agreements, insurance
policies, administrative agreements and similar agreements, and investment
management or investment advisory agreements, (d) copies of any summary
plan descriptions, employee handbooks or similar employee communications, (e) in
the case of any plan that is intended to be qualified under Code Section 401(a),
a copy of the most recent determination letter from the IRS and any related
correspondence, and a copy of any pending request for such determination, (f) in
the case of any funding arrangement intended to qualify as a VEBA under Code Section 501(c)(9),
a copy of the IRS letter determining that it so qualifies and (g) in the
case of any plan for which Forms 5500 are required to be filed, a copy of the
two most recently filed Forms 5500, with schedules attached.

 

3.16.3         The Company or any other Person that
would be considered a single employer with the Company under the Code or ERISA
has never maintained a plan subject to Title IV of ERISA or Code Section 412,
including any “multiemployer plan” as defined in Section 4001(a)(8) of
ERISA.

 

3.16.4         Each Company Plan that is intended to
be qualified under Code Section 401(a) is so qualified.  Each Company Plan, including any associated
trust or fund, has been administered in accordance with its terms and with
applicable Legal Requirements, except where any noncompliance has not had a
Material Adverse Effect, and, to the Company’s Knowledge, nothing has occurred
with respect to any Company Plan that has subjected or could subject the
Company to a penalty under Section 502 of ERISA or to an excise tax under
the Code, or that has subjected or could subject any participant in, or
beneficiary of, a Company Plan to a tax under Code Section 4973.  Each Company Plan that is a qualified
contribution plan is, to the Company’s Knowledge, an “ERISA Section 404(c) Plan”
within the meaning of the applicable Department of Labor regulations.

 

3.16.5         All required contributions to, and
premium payments on account of, each Company Plan have been made on a timely
basis.

 

3.16.6         There is no pending or, to the Company’s
Knowledge, threatened Action relating to a Company Plan, other than routine
claims in the Ordinary Course of Business for benefits provided for by the
Company Plans.  No Company Plan is or,
within the last six years, has been the subject of an examination or audit by a
Governmental Authority, is the subject of an application or filing under, or is
a participant in, a government-sponsored amnesty, voluntary compliance,
self-correction or similar program.

 

3.16.7         Except as required under Section 601
et seq. of ERISA, no Company Plan
provides benefits or coverage in the nature of health, life or disability
insurance following retirement or other termination of employment.

 

3.17                           Environmental Matters.  Except as disclosed on Schedule 3.17, (a) the
Company is, and has been, in compliance with all material Environmental Laws, (b) there
has been no release or, to the Company’s Knowledge, threatened release of any
pollutant, petroleum or any 

 

20

 

fraction thereof, contaminant or toxic
or hazardous material (including toxic mold), substance or waste (each a “Hazardous
Substance”) on, upon, into or from any site currently or heretofore owned,
leased or otherwise used by the Company, (c) there have been no Hazardous
Substances generated by the Company that have been disposed of or come to rest
at any site that has been included in any published U.S. federal, state or
local “superfund” site list or any other similar list of hazardous or toxic
waste sites published by any Governmental Authority in the United States, (d) there
are no underground storage tanks located on, no PCBs (polychlorinated
biphenyls) or PCB-containing Equipment used or stored on, and no hazardous
waste as defined by the Resource Conservation and Recovery Act stored on, any
site owned or operated by the Company, except for the storage of hazardous
waste in compliance with Environmental Laws and (e) the Company has made
available to the Investors true, accurate and complete copies of all material
environmental records, reports, notifications, certificates of need, permits,
pending permit applications, correspondence, engineering studies, and
environmental studies or assessments, in each case as amended and in effect.

 

3.18                           Contracts.

 

3.18.1         Contracts. Except as disclosed
on Schedule 3.18, the Company is not bound by or a party to:

 

(a)           any Contractual Obligation (or group
of related Contractual Obligations) for the purchase or sale of inventory, raw
materials, commodities, supplies, goods, products, equipment or other personal
property, or for the furnishing or receipt of services, in each case, the
performance of which will extend over a period of more than one year or which
provides for actual or anticipated annual payments to or by the Company in
excess of $50,000 or aggregate payments to or by the Company in excess of
$100,000;

 

(b)           (i) any capital lease or (ii) any
other lease or other Contractual Obligation relating to the Equipment providing
for aggregate rental payments in excess of  $100,000,
under which any Equipment is held or used by the Company;

 

(c)           any Contractual Obligation, other
than Real Property Leases or leases relating to the Equipment, relating to the
lease or license of any Asset, including Technology and Intellectual Property
(and including all customer license and maintenance agreements, but excluding
all commercial off-the-shelf or shrink-wrap computer software licenses) that is
not included on Schedule 3.13;

 

(d)           any Contractual Obligation relating
to the acquisition or disposition of (i) any business of the Company
(whether by merger, consolidation or other business combination, sale of
securities, sale of assets or otherwise) or (ii) any asset other than in
the Ordinary Course of Business;

 

(e)           any Contractual Obligation under
which the Company is, or may become, obligated to pay any amount in respect of
indemnification obligations, purchase price adjustment or otherwise in
connection with any (i) acquisition or disposition of assets or securities
(other than the sale of inventory in the Ordinary 

 

21

 

Course
of Business), (ii) merger, consolidation or other business combination or (iii) series
or group of related transactions or events of the type specified in clauses (i) and
(ii) above;

 

(f)            any Contractual Obligation
concerning or consisting of a partnership, limited liability company or joint
venture agreement;

 

(g)           any Contractual Obligation (or group
of related Contractual Obligations) (i) under which the Company has
created, incurred, assumed or guaranteed any Debt in excess of $100,000 or (ii) under
which the Company has permitted any Asset to become Encumbered (other than a
Permitted Encumbrance);

 

(h)           any Contractual Obligation under
which any other Person has guaranteed any Debt of the Company;

 

(i)            any Contractual Obligation relating
to confidentiality or non-competition (whether the Company is subject to or the
beneficiary of such obligations);

 

(j)            any Contractual Obligation under
which the Company is, or may become, obligated to incur any severance pay or
special Compensation obligations which would become payable by reason of, this
Agreement or the Contemplated Transactions;

 

(k)           any Contractual Obligation under
which the Company is, or may, have any Liability to any investment bank, broker,
financial advisor, finder’s agreement or other similar Person (including an
obligation to pay any legal, accounting, brokerage, finder’s, or similar fees
or expenses in connection with this agreement or the Contemplated
Transactions);

 

(l)            any profit sharing, stock option,
stock purchase, stock appreciation, deferred compensation, severance, or other
plan or arrangement for the benefit of the Company’s current or former
directors, officers, and employees;

 

(m)          any Contractual Obligation providing
for the employment or consultancy with an individual on a full-time, part-time,
consulting or other basis or otherwise providing Compensation or other benefits
to any officer, director, employee or consultant (other than an Employee Plan);

 

(n)           any agency, dealer, distributor,
sales representative, marketing or other similar agreement; or

 

(o)           any other Contractual Obligation (or
group of related Contractual Obligations) the performance of which involves
consideration in excess of $100,000  over
the life of such Contractual Obligation

 

The
Company has delivered to the Investors true, accurate and complete copies of 

 

22

 

each written
Contractual Obligation listed on Schedule 3.18, in each case, as amended
or otherwise modified and in effect.  The
Company has delivered to the Investors a written summary setting forth the
terms and conditions of each oral Contractual Obligation listed on Schedule
3.18.

 

3.18.2         Enforceability, etc.  To the Company’s Knowledge, each Contractual
Obligation required to be disclosed on Schedule 3.11 (Real Property Leases),
3.12 (Intellectual Property), 3.15 (Employee Plans), 3.18 (Contracts), 3.19
(Affiliate Transactions), 3.20 (Customers and Suppliers) or 3.23 (Insurance)
(each, a “Disclosed Contract”) is enforceable against each party to such
Contractual Obligation, and is in full force and effect, and, subject to
obtaining any necessary consents disclosed in Schedule 3.4, will
continue to be so enforceable and in full force and effect on identical terms
immediately following the consummation of the Contemplated Transactions.

 

3.18.3         Breach, etc.  Neither the Company nor, to the Company’s
Knowledge, any other party to any Disclosed Contract is in breach or violation
of, default under, or has repudiated any provision of, any Disclosed Contract.

 

3.19                           Affiliate Transactions.  Except as disclosed on Schedule 3.19,
no Affiliate of the Company, Afremov, Gougeon or Amplatz is an officer,
director, employee, consultant, competitor, creditor, debtor, customer,
distributor, supplier or vendor of, or is a party to any Contractual Obligation
with, the Company.  Except as disclosed
on Schedule3.19, no such Affiliate owns any Asset used in, or necessary
to, the Business.

 

3.20                           Customer and Supplier.  Schedule 3.20 sets forth a complete
and accurate list of (a) the 20 largest customers of the Company (measured
by aggregate billings) during the two fiscal years ended December 31,
2003, indicating the existing Contractual Obligations, if any, with each such
Customer by product or service provided and (b) the 20 largest suppliers
of materials, products or services to the Company (measured by the aggregate
amount purchased by the Company) during the two fiscal years ended December 31,
2003, indicating the Contractual Obligations, if any, for continued supply from
each such supplier.  The relationships of the Company with the customers and the
suppliers required to be listed on Schedule 3.20 are good commercial
working relationships and none of such customers or the suppliers has since the
Most Recent Balance Sheet Date canceled, terminated or otherwise materially
altered (including any material reduction in the rate or amount of sales or
purchases or material increase in the prices charged or paid, as the case may be),
or, since the Most Recent Balance Sheet Date, notified the Company of any
intention to do any of the foregoing or otherwise threatened in writing to
cancel, terminate or materially alter (including any material reduction in the
rate or amount of sales or purchases, as the case may be) its relationship with
the Company.  Except as described on Schedule
3.20, as of the date hereof, to the Company’s Knowledge, there is no reason
to believe that there will be any change in the relationship of the Company
with the customers and suppliers required to be listed on Schedule 3.20
as a result of the Contemplated Transactions.

 

3.21                           Employees.  There are no labor troubles (including any
work slowdown, lockout, stoppage, picketing or strike) pending, or to the
Company’s Knowledge, threatened between the Company, on the one hand, and its
employees, on the other hand.  No
employee of the Company 

 

23

 

is represented by a labor union and the
Company is not a party to, or otherwise subject to, any collective bargaining
agreement or other labor union contract. 
No petition has been filed or proceedings instituted by an employee or
group of employees of the Company with any labor relations board seeking
recognition of a bargaining representative, and, to the Company’s Knowledge,
there is no organizational effort currently being made or threatened by, or on
behalf of, any labor union to organize employees of the Company and no demand
for recognition of employees of the Company has been made by, or on behalf of,
any labor union.  Except as disclosed on Schedule
3.21, no executive officer’s or other key employee’s employment with the
Company has been terminated for any reason nor has any such officer or employee
notified the Company of his or her intention to resign or retire in the last
year.

 

3.22                           Litigation; Governmental Orders.

 

3.22.1         Litigation.  Except as disclosed on Schedule 3.22
(which matters, other than the NMT Dispute (as defined below), have not had,
and are not reasonably likely to have, a Material Adverse Effect), there is no
Action to which the Company is a party (either as plaintiff or defendant) or to
which its Assets are subject pending, or to the Company’s Knowledge,
threatened, which may affect the Company or its ownership of, or interest in,
any Asset or the use or exercise by the Company of any Asset.  Except as described on Schedule 3.22,
there is no Action to which the Company is a party (either as plaintiff or
defendant) or to which its Assets are subject pending, or to the Company’s
Knowledge, threatened, which (a) in any manner challenges or seeks the
rescission of, or seeks to prevent, enjoin, alter or materially delay the
consummation of, or otherwise relates to, this Agreement and the Contemplated
Transactions, or (b) may result in any change in the current equity
ownership of the Company, nor, to the Company’s Knowledge, is there any basis
for any of the foregoing.  Except as
disclosed on Schedule 3.22, there is no Action which the Company
presently intends to initiate.

 

3.22.2         Governmental Orders.  Except as disclosed on Schedule 3.22,
no Governmental Order has been issued which is applicable to, or otherwise
affects, the Company or its Assets or the Business.

 

3.23                           Product Warranties; Defects; Liability.

 

3.23.1         Except as disclosed in Schedule 3.23
(and except for other Liabilities for which there is a reserve which meets the
standards described in the following sentence), each product designed,
manufactured, marketed, sold, leased, licensed, delivered or installed by the
Company (collectively, the “Products”) is, and at all times has been, (a) in
compliance with all applicable Legal Requirements, (b) fit for the
ordinary purposes for which it is intended to be used and (c) in
conformity with any and all Contractual Obligations, express and implied
warranties, promises and affirmations of fact made by the Company.  The Company does not have any Liability (and,
to the Company’s Knowledge, there is no basis for any present or future Action
giving rise to any Liability) for replacement or repair of any Products or
other damages in connection with any Products, subject only to the reserve for
product warranty claims set forth on the face of the Most Recent Balance Sheet,
as adjusted for the passage of time in accordance with GAAP, applied on a basis
consistent with the principles applied in the preparation of the 

 

24

 

Most
Recent Balance Sheet, which reserve is adequate to address all such
Liabilities.  Each Product contains
adequate warnings, the content and display of which conform with applicable
Legal Requirements and current industry practice.  There is no design or other defect with
respect to any Product.

 

3.23.2         Except as disclosed in Schedule 3.23,
no Product is subject to any guaranty, warranty, or other indemnity beyond the
applicable standard terms and conditions of sale, lease or license.  Schedule 3.23 includes a summary of
the standard terms and conditions of sale, lease or license for the Company
(including applicable guaranty, warranty, and indemnity provisions).

 

3.23.3         Except as disclosed on Schedule 3.23,
there is no Action to which the Company is a party pending, or to the Company’s
Knowledge, threatened relating to, or otherwise involving, alleged defects in
the Products or services provided by the Company, the failure of any such
Products or services to meet certain specifications, or the failure of any such
Products or services to have adequate warnings, and, to the Company’s
Knowledge, there is no basis for any of the foregoing.  Schedule 3.23 sets forth all concluded
Actions (including the disposition thereof) against the Company during the last
three years relating to, or otherwise involving, alleged defects in the
Products or services provided by the Company, the alleged failure of any such
services or Products to meet certain specifications, or the failure of any
Products or services to have adequate warnings. 
Except as described on Schedule 3.23, the Company does not have
any Liability, and, to the Company’s Knowledge, there is no basis for any
present or future Action giving rise to any Liability, arising out of any
injury to any Person or property as a result of any services provided by the
Company, or the ownership, possession, or use of the Products.

 

3.24                           Insurance.  Schedule 3.24 sets forth a list of
current insurance policies, including policies by which the Company, or any of
its Assets, employees, officers or directors or the Business is insured (the “Liability
Policies”) and, their respective expiration dates.  The list includes for each Liability Policy
the type of policy, form of coverage, policy number and name of insurer.  The Company has made available to the
Investors true, accurate and complete copies of all Liability Policies, in each
case, as amended or otherwise modified and in effect.  Schedule 3.24 describes any
self-insurance arrangements affecting the Company.  The Company maintains, in full force and
effect with financially sound and reputable insurers, insurance with respect to
its Assets and the Business, in such amounts and against such losses and risks
as is customarily carried by Persons engaged in the same or similar business
and as is required under the terms of any applicable Real Property Leases or
other Contractual Obligations.  Except as
disclosed on Schedule 3.24, to the Company’s Knowledge, no insurer plans
to raise the premiums for, or materially alter the coverage under, any
Liability Policy.  Except as disclosed on
Schedule 3.24, the Company will after the Closing continue to have
coverage under all of the Liability Policies with respect to events occurring
prior to the Closing.

 

3.25                           No Brokers.  Except as disclosed on Schedule 3.25,
the Company has no Liability of any kind to, and is not subject to any claim
of, any broker, finder or agent in connection with the Contemplated
Transactions.

 

25

 

3.26         Disclosure.  The representations and warranties contained
in this Section 3 and in the documents, instruments and certificates and
all diligence material and information, furnished by the Company to the
Investors, prospective lenders under the Senior Credit Facility and the
Subordinated Debt Agreement and their representatives do not contain and will
not contain any untrue statement of fact or omit to state any material fact
necessary in order to make the statements and information contained therein not
misleading.

 

4                                          REPRESENTATIONS AND WARRANTIES OF GOUGEON.

 

Gougeon represents and warrants to the
Investors that:

 

4.1           Power
and Authorization.  This Agreement
and each Ancillary Agreement to which Gougeon is (or will be) a party (a) has
been (or, in the case of Ancillary Agreements to be entered into at or prior to
the Closing, will be) duly executed and delivered by Gougeon and (b) is
(or in the case of Ancillary Agreements to be entered into at or prior to the
Closing, will be) a legal, valid and binding obligation of Gougeon, enforceable
against him in accordance with its terms.

 

4.2           Authorization
of Governmental Authorities.  Except
as disclosed on Schedule 4.2, no action by (including any authorization,
consent or approval), or in respect of, or filing with, any Governmental
Authority is required for, or in connection with, the valid and lawful (a) authorization,
execution, delivery and performance by Gougeon of this Agreement and each
Ancillary Agreement to which it is (or will be) a party or (b) the
consummation of the Contemplated Transactions by Gougeon.

 

4.3           Noncontravention.  Except as disclosed on Schedule 4.3,
neither the execution, delivery and performance by Gougeon of this Agreement or
any Ancillary Agreement to which he is (or will be) a party nor the
consummation of the Contemplated Transactions will: (a) assuming the
taking of any action by (including any authorization, consent or approval), or
in respect of, or any filing with, any Governmental Authority, in each case, as
disclosed on Schedule 4.2, violate any provision of any Legal
Requirement applicable to Gougeon; (b) result in a breach or violation of,
or default under, any Contractual Obligation of Gougeon; or (c) require
any action by (including any authorization, consent or approval) or in respect
of (including notice to), any Person under any Contractual Obligation.

 

4.4           No
Brokers.  Except as disclosed on Schedule
4.4, Gougeon has no Liability of any kind to any broker, finder or agent
with respect to the Contemplated Transactions for which the Investors or the
Company could be Liable.

 

5                                          REPRESENTATIONS AND WARRANTIES OF THE
INVESTORS.

 

Each Investor, severally and not
jointly with the other Investors, represents and warrants to the Company and
Gougeon that:

 

5.1           Organization.  Such Investor (if not an individual) is duly
organized, validly existing and in good standing under the laws of the jurisdiction
of its organization.

 

5.2           Power
and Authorization.  The execution,
delivery and performance by such 

 

26

 

Investor (if not an individual) of this
Agreement and each Ancillary Agreement to which it is (or will be) a party and
the consummation of the Contemplated Transactions are within the power and
authority of such Investor and have been duly authorized by all necessary
action on the part of such Investor. 
This Agreement and each Ancillary Agreement to which such Investor is
(or will be) a party (a) has been (or, in the case of Ancillary Agreements
to be entered into at or prior to the Closing, will be) duly executed and
delivered by such Investor and (b) is (or in the case of Ancillary
Agreements to be entered into at or prior to the Closing, will be) a legal,
valid and binding obligation of such Investor, enforceable against such
Investor in accordance with its terms.

 

5.3                                 Authorization of Governmental Authorities.  Except as disclosed
on Schedule 5.3, no action by (including any authorization, consent
or approval), or in respect of, or filing with, any Governmental Authority
(including any state securities filing in New York) is required for, or in
connection with, the valid and lawful (a) authorization, execution,
delivery and performance by such Investor of this Agreement and each Ancillary
Agreement to which it is (or will be) a party or (b) the consummation of
the Contemplated Transactions by such Investor.

 

5.4                                 Noncontravention.  Neither the execution, delivery and
performance by such Investor of this Agreement or any Ancillary Agreement to
which it is (or will be) a party nor the consummation of the Contemplated
Transactions will: (a) assuming the taking of any action by (including any
authorization, consent or approval) or in respect of, or any filing with, any
Governmental Authority, in each case, as disclosed on Schedule 5.3,
violate any provision of any Legal Requirement applicable to such Investor; (b) result
in a breach or violation of, or default under, any Contractual Obligation of
such Investor; (c) require any action by (including any authorization,
consent or approval) or in respect of (including notice to), any Person under
any Contractual Obligation; or (d) result in a breach or violation of, or
default under, such Investor’s Organizational Documents (if not an individual).

 

5.5                                 Purchase for Investment.  Such Investor is purchasing the Shares being
purchased by such Investor hereunder for investment for such Investor’s own
account and not with a view to, or for sale in connection with, any
distribution thereof.

 

5.6                                 Private Placement.

 

5.6.1           Such Investor’s financial situation
is such that such Investor can afford to bear the economic risk of holding the
Shares being purchased by such Investor hereunder for an indefinite period of
time, and such Investor can afford to suffer the complete loss of such Investor’s
investment in the Shares.

 

5.6.2           Such Investor’s knowledge and
experience in financial and business matters are such that such Investor is
capable of evaluating the merits and risks of such Investor’s investment in the
Shares or such Investor has been advised by a representative possessing such
knowledge and experience.

 

5.6.3           Such Investor understands that the
Shares acquired hereunder are a speculative investment which involves a high
degree of risk of loss of the entire investment therein, that there will be
substantial restrictions on the transferability of the 

 

27

 

Shares
and that following the date hereof there will be no public market for the
Shares and that, accordingly, it may not be possible for such Investor to sell
or pledge the Shares, or any interest in the Shares, in case of emergency or
otherwise.

 

5.6.4           Such Investor and such Investor’s
representatives, including, to the extent such Investor deems appropriate, such
Investor’s legal, professional, financial, tax and other advisors, have
reviewed all documents provided to them in connection with such Investor’s
investment in the Shares, and such Investor understands and is aware of the
risks related to such investment.

 

5.6.5           Such Investor is an “accredited
investor” as such term is defined in Regulation D promulgated under the 1933
Act.

 

5.6.6           No Investor has any plan or intention
to sell, exchange, transfer or otherwise dispose of (including by way of gift)
any of its shares of Series A Preferred Stock immediately after the
purchase of any such Shares.

 

5.7                                 No Brokers.  Such Investor has no Liability of any kind to
any broker, finder or agent with respect to the Contemplated Transactions for
which the Company or Gougeon could be Liable.

 

6                                         COVENANTS.

 

6.1                                 Closing; Further Assurances.  Subject to the terms and conditions of this
Agreement, each of the parties will use its commercially reasonable efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper, or advisable in order to consummate and make
effective the Contemplated Transactions (including satisfaction, but not waiver,
of the closing conditions set forth in Sections 7 and 8).  From time to time after the Closing, each of
the parties hereto, at the request of any other party hereto and without
further consideration, shall execute and deliver such further instruments of
transfer and assignment and take such other actions as a party may reasonably
require to more effectively transfer and assign to, and vest in, the Investors,
the Shares and all rights thereto and to fully implement the provisions of this
Agreement.

 

6.2                                 Operation of Business.

 

6.2.1           Conduct of Business.  The Company will:

 

(a)           conduct the Business only in the
Ordinary Course of Business;

 

(b)           maintain the value of the Business as
a going concern;

 

(c)           preserve intact its business
organization and relationships with third parties (including lessors,
licensors, suppliers, distributors and customers) and employees; and

 

(d)           consult with WCAS IX prior to taking
any action or entering into

 

28

 

any
transaction that may be of strategic importance to the Company.

 

6.2.2                                  Investors’ Consent.  Without limiting the generality of Section 6.2.1,
without the written consent of WCAS IX, the Company will not:

 

(a)                                  take or omit to take any action that would cause the
representations and warranties in Section 3 to be untrue at, or as of any
time prior to, the Closing Date;

 

(b)                                 settle its outstanding patent infringement dispute with NMT
Medical, Inc. (the “NMT Dispute”); and

 

(c)                                  take or omit to take any action which, if taken or omitted
to be taken between the Most Recent Balance Sheet Date and the date of this
Agreement would have been required to be disclosed on Schedule 3.8.

 

6.3                                 Notices and Consents.  The Company will give all notices to, make
all filings with and use their commercially reasonable efforts to obtain all
authorizations, consents or approvals from, any Governmental Authority or other
Person that are set forth on Schedule 3.3 and Schedule 3.4 or as
otherwise reasonably requested by the Investors. Gougeon will give all notices
to, make all filings with and use his commercially reasonable efforts to obtain
all authorizations, consents or approvals from, any Governmental Authority or
other Person that are set forth on Schedule 4.2 and Schedule 4.3
or as otherwise reasonably requested by the Investors.  Each Investor will give all notices to, make
all filings with and use its commercially reasonable efforts to obtain all
authorizations, consents or approvals from, any Governmental Authority or other
Person that are set forth on Schedule 5.3 or as otherwise reasonably
requested by the Company or Gougeon.

 

6.4                                 Access to Premises.  Until the Closing Date, the Company will
permit the Investors, prospective lenders under the Senior Credit Facility and
their respective representatives to have full access (at reasonable times and
upon reasonable notice) to all officers of the Company and to all premises,
properties, books, records (including Tax records), contracts, financial and
operating data and information and documents pertaining to the Company and make
copies of such books, records, contracts, data, information and documents as
the Investors, such prospective lenders or their respective representatives may
reasonably request.

 

6.5                                 Notice of Developments.  Until the Closing Date, the Company will give
WCAS IX prompt written notice upon becoming aware of any material development
affecting the Assets, Liabilities, Business, financial condition, operations or
prospects of the Company, or any event or circumstance that could reasonably be
expected to result in a breach of, or inaccuracy in, any of the Company’s
representations and warranties; provided, however, that no such
disclosure will be deemed to prevent or cure any such breach of, or inaccuracy
in, amend or supplement any Schedule to, or otherwise disclose any exception
to, any of the representations and warranties set forth in this Agreement.

 

6.6                                 Publicity.  No public announcement or disclosure will be
made by any party with respect to the subject matter of this Agreement or the
Contemplated Transactions without the 

 

29

 

prior written consent of WCAS IX, the
Company and Gougeon; provided, however, that the provisions of
this Section 6.6 will not prohibit (a) any private disclosure by any
prospective lender under the Senior Credit Facility in the ordinary course to
any such Person’s representatives, potential investors or participants, so long
as each such recipient is under an obligation to keep such disclosed
information confidential, (b) any disclosure required by any applicable
Legal Requirements (in which case the disclosing party will provide the other
parties with the opportunity to review in advance the disclosure) or (c) any
disclosure made in connection with the enforcement of any right or remedy
relating to this Agreement or the Contemplated Transactions.

 

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

 

6.8                                 Non-Solicitation.  Gougeon and the Company shall, and shall
cause their respective Affiliates and their and such Affiliates’ respective
officers, directors, shareholders, employees or agents to, immediately
terminate all discussions or negotiations existing on the date hereof, if any,
with any Person with respect to, or any that could reasonably be expected to
lead to, or that contemplate the possibility of a Sale Transaction.  Until the Closing or earlier termination of
this Agreement in accordance with Section 9, Gougeon and, from the date
the Company executes this Agreement, the Company shall not, and shall instruct
their respective Affiliates and their and such Affiliates’ respective officers,
directors, shareholders, employees or agents not to, (i) solicit,
facilitate or encourage any proposal with respect to a Sale Transaction; (ii) solicit
the employment of, or offer to employ, any employee of the Company or any
related entity with any other entity; (iii) enter into any discussions
with any Person or provide to any Person any information with respect to any
proposal with respect to a Sale Transaction; or (iv) discuss or negotiate,
or enter into any sale or other agreement with respect to a Sale
Transaction.  Any failure by the
respective officers, directors, shareholders and agents of the Company or
Gougeon or their respective Affiliates to comply with the terms of this Section 6.8
shall be deemed to constitute a breach by the Company and Gougeon of this Section 6.8.

 

6.9                                 Use of Proceeds.  The Company shall apply the proceeds from the
sale of the Shares to the Investors, the loans under the Senior Credit Facility
and Subordinated Debt Agreement and certain existing cash of the Company to (a) fund
the Afremov Buyout, (b) repay all Debt under Disclosed Contracts, if any, (c) pay
the Dividend, (d) pay fees and expenses relating to the Contemplated
Transactions, and (e) general working capital purposes.

 

7                                         CONDITIONS TO THE INVESTORS’ OBLIGATIONS AT
THE CLOSING.

 

The
obligations of each Investor to consummate the Closing is subject to the prior
fulfillment of each of the following conditions:

 

7.1                                 Representations and Warranties.  The representations
and warranties of the Company and Gougeon contained in this Agreement and in
any document, instrument or certificate delivered hereunder (a) that are
not qualified by materiality or Material Adverse Effect 

 

30

 

will be true and correct in all
material respects at and as of the Closing with the same force and effect as if
made as of the Closing and (b) that are qualified by materiality or
Material Adverse Effect will be true and correct in all respects at and as of
the Closing with the same force and effect as if made as of the Closing, in
each case, other than representations and warranties that expressly speak only
as of a specific date or time, which will be true and correct as of such
specified date or time.

 

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

 

7.3                                 Compliance Certificate.  The Company will have delivered to WCAS IX a
certificate certifying its compliance with the conditions set forth in Sections
7.1, 7.2, 7.10 and 7.12.

 

7.4                                 Qualifications.  Any applicable waiting periods (and any
extensions thereof) under the HSR Act will have expired or otherwise been
terminated.  No provision of any
applicable Legal Requirement and no Government Order will prohibit the
consummation of any of the Contemplated Transactions.

 

7.5                                 Absence of Litigation.

 

7.5.1                                  The Final Order and the Settlement Agreement shall each
continue to be in full force and effect.

 

7.5.2                                  No Action will be pending or threatened in writing which may
result in a Governmental Order (nor will there be any Governmental Order in
effect) (a) which would prevent consummation of any of the Contemplated
Transactions, (b) which would result in any of the Contemplated
Transactions being rescinded following consummation, (c) which would limit
or otherwise adversely affect the right of any Investor to own the Shares
(including the right to vote the Shares) or (d) would compel any Investor
or any of Affiliate of any Investor to dispose of all or any material portion
of the business or assets of such Investor or Affiliate.

 

7.6                                 Legal Opinion.  WCAS IX will have received from Parsinen
Kaplan Rosberg & Gotlieb P.A., counsel to Gougeon (or other counsel
reasonably acceptable to WCAS IX), its opinion with respect to the Contemplated
Transactions, which opinion will be in form and substance satisfactory to
it.  Such opinion will, at the request of
WCAS IX, be confirmed to any lender under the Subordinated Debt Agreement or the
Senior Credit Facility.

 

7.7                                 Consents, etc.  All actions by (including any authorization,
consent or approval) or in respect of (including notice to), or filings with,
any Governmental Authority or other Person that are required to consummate the
Contemplated Transactions, as disclosed in Schedule 3.3, Schedule 3.4,
Schedule 4.2 or Schedule 4.3, or as otherwise reasonably
requested by the Investors, will have been obtained or made, in a manner
reasonably satisfactory in form and substance to the Investors, and no such
authorization, consent or approval will have been revoked.

 

31

 

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

 

7.9                                 Restated Articles; Ancillary Agreements.  The Company will
have filed with the Secretary of State of Minnesota an Amended and Restated
Articles of Incorporation, in form and substance reasonably satisfactory to
WCAS IX (the “Restated Articles”), and such Restated Articles shall have
been accepted by such Secretary of State. 
Each of the Ancillary Agreements will have been executed and delivered
to WCAS IX by each of the other parties thereto (other than the Investors and,
in the case of the Contribution and Exchange Agreement only, the Company).

 

7.10                           Certain Legal Matters.

 

7.10.1                            The delivery sheath recall initiated by the Company during
the week of November 22, 2004 (the “Recall”), or the facts and
circumstances arising out of or relating to the Recall, shall not have had, and
shall not reasonably be expected to have, any adverse effect on the Business,
operations, Assets, prospects or condition (financial or otherwise) of the
Company, including without limitation (i) a deterioration in the
relationship of the Company with, or increase in the level of oversight by, the
U.S. Food and Drug Administration (“FDA”), or any Governmental Authority
exercising comparable regulatory authority in any jurisdiction, (ii) an
increased risk of Actions against the Company by or on behalf of end-users of
the Products or by any Person involved in the design, manufacture, testing,
marketing or implantation of any Product, (iii) a deterioration in the
Company’s reputation or reduction in demand for the Products, in any market in
which the Company now operates the Business or proposes to conduct the Business
following consummation of the Contemplated Transactions, (iv) an increase
in the Company’s operating expenses, or (v) an adverse effect on the
Company’s ability to supply, design, manufacture, market or implant any Product.

 

7.10.2                            The facts and circumstances arising out of or relating to
any actual or threatened Actions by any Governmental Authority, other than
pursuant to Section 7.10.1, against the Company, Afremov, Gougeon or
Amplatz shall not have had, and shall not reasonably be expected to have, any
adverse effect on the Business, operations, Assets, prospects or condition
(financial or otherwise) of the Company (it being understood that for purposes
of this Section 7.10.2 only, the incurrence by the Company of reasonable
legal fees and expenses and the reasonable deployment of resources of the
Company (including time spent by management), in each case, in response to any
such actual or threatened Actions, will not by themselves constitute such an
adverse effect).

 

7.11                           Financing.  The Company shall have entered into a Senior
Credit Facility in form and substance reasonably satisfactory to WCAS IX, and
received at least $107,000,000 pursuant to such Senior Credit Facility.  The Company shall have entered into a
Subordinated Debt Agreement in form and substance reasonably satisfactory to
WCAS IX, and received at least $50,000,000 pursuant to such Subordinated Debt
Agreement.

 

32

 

7.12                           No Material Adverse Change.  Since the Most Recent Balance Sheet Date,
there shall not have occurred any event, change, condition, circumstance or
state of facts that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

8                                         CONDITIONS TO GOUGEON’S AND THE COMPANY’S
OBLIGATIONS AT THE CLOSING.

 

The
obligations of Gougeon to consummate the Closing is subject to the prior
fulfillment of each of the following conditions and the obligations of the
Company to consummate the Closing is subject to the prior fulfillment of each
of the conditions set forth in Sections 8.1 through 8.8:

 

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

 

8.2                                 Performance.  The Investors will have performed and
complied with, in all material respects, all agreements, obligations and
covenants contained in this Agreement that are required to be performed or
complied with by the Investors at or prior to the Closing.

 

8.3                                 Compliance Certificate.  The Investors will have delivered to the
Company a certificate certifying their compliance with conditions set forth in Section 8.1
and 8.2.

 

8.4                                 Qualifications.  Any applicable waiting periods (and any
extensions thereof) under the HSR Act will have expired or otherwise been
terminated.  No provision of any
applicable Legal Requirement and no Government Order will prohibit the
consummation of any of the Contemplated Transactions.

 

8.5                                 Absence of Litigation.

 

8.5.1                                  The Final Order and the Settlement Agreement shall each
continue to be in full force and effect.

 

8.5.2                                  No Action will be pending or threatened in writing which may
result in Governmental Order, nor will there be any Governmental Order in
effect, (a) which would prevent consummation of any of the Contemplated
Transactions or (b) which would result in any of the Contemplated
Transactions being rescinded following consummation (and no such Governmental
Order will be in effect).

 

8.6                                 Consents, etc.  All actions by (including any authorization,
consent or approval) or in respect of (including notice to), or filings with,
any Governmental Authority or other 

 

33

 

Person that are required to consummate
the Contemplated Transactions, as disclosed in Schedule 5.3, will have
been obtained or made, in a manner reasonably satisfactory in form and
substance to the Company, and no such authorization, consent or approval will
have been revoked.

 

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

 

8.8                                 Ancillary Agreements.  Each of the Ancillary Agreements to which any
Investor is a party will have been executed and delivered to the Company by
each of the other parties thereto (other than the Company and Gougeon).

 

8.9                                 No Material Adverse Change.  Since the Most Recent Balance Sheet Date,
there shall not have occurred any event, change, condition, circumstance or
state of facts that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

9                                         TERMINATION.

 

9.1                                 Termination of Agreement.  This Agreement may be terminated (the date on
which the Agreement is terminated, the “Termination Date”) at any time
prior to the Closing:

 

(a)                                  by mutual written consent of WCAS IX, Gougeon and the
Company;

 

(b)                                 by either WCAS IX, the Company or Gougeon by providing
written notice to the other at any time after July 29, 2005; provided
that the party seeking to exercise such right is not then in breach in any
material respect of any of its obligations under this Agreement;

 

(c)                                  by either WCAS IX, the Company or Gougeon if a final
nonappealable Governmental Order permanently enjoining or otherwise prohibiting
the Closing will have been issued by a Governmental Authority of competent
jurisdiction;

 

(d)                                 by WCAS IX if either (i) there will be a breach of, or
inaccuracy in, any representation or warranty of the Company or Gougeon
contained in this Agreement as of the date of this Agreement or as of any
subsequent date (other than representations or warranties that expressly speak
only as of a specific date or time, with respect to which such Investor’s right
to terminate will arise only in the event of a breach of, or inaccuracy in,
such representation or warranty as of such specified date or time), or (ii) the
Company or Gougeon will have breached, not satisfied or violated in any
material respect any of their respective covenants and agreements contained in
this Agreement, which breach, inaccuracy, non-satisfaction or violation
described in clauses (i) or (ii) above, would give rise, or could
reasonably be expected to give rise, to a failure of a condition set forth in 

 

34

 

Section 7
and cannot be or has not been cured on or before ten Business Days after WCAS
IX notifies the Company of such breach, inaccuracy, non-satisfaction or
violation; or

 

(e)                                  by either the Company or Gougeon if either (i) there
will be a breach of, or inaccuracy in, any representation or warranty of any
Investor contained in this Agreement as of the date of this Agreement or as of
any subsequent date (other than representations or warranties that expressly
speak only as of a specific date or time, with respect to which the Company’s
right to terminate will arise only in the event of a breach of, or inaccuracy
in, such representation or warranty as of such specified date or time), or (ii) any
Investor will have breached, not satisfied or violated in any material respect
any of its covenants and agreements contained in this Agreement, which breach,
inaccuracy, non-satisfaction or violation described in clauses (i) or (ii) above
would give rise, or could reasonably be expected to give rise, to a failure of
the condition set forth in Section 8 and cannot be or has not been cured
on or before ten Business Days after the Company notifies WCAS IX of such
breach, inaccuracy, non-satisfaction or violation.

 

9.2                                 Effect of Termination.  In the event of the termination of this
Agreement pursuant to Section 9.1, this Agreement – other than the
provisions of Section 3.25, 4.4, 5.5 (No Brokers), 6.6 (Publicity),
9.2 (Effect of Termination), 10 (Survival; Indemnification),11.1
(Expenses), 11.10 (Governing Law), 11.11 (Jurisdiction), and
11.13 (Waiver of Jury Trial) – will then be null and void and have no
further force and effect and all other rights and Liabilities of the parties
hereunder will terminate without any Liability of any party to any other party,
except for Liabilities arising in respect of breaches under this Agreement by
any party on or prior to the Termination Date.

 

10                                    SURVIVAL; INDEMNIFICATION.

 

10.1                           Survival.  All representations and warranties contained
in or made pursuant to this Agreement or any Ancillary Agreement shall survive
execution and delivery of this Agreement and the Ancillary Agreements for a
period beginning on the date hereof and ending on the Expiration Date; provided,
that (a) the representations and warranties set forth in Sections 3.1
(Organization), 3.2 (Power and Authorization), 3.4(d) (Noncontravention),
3.5 (Capitalization), 3.25 (No Brokers), 4.1 (Power and
Authorization) or 4.4 (No Brokers) shall survive indefinitely; and (b) the
representations and warranties set forth in Sections 3.14.1(Compliance with
Legal Requirements), 3.15 (Tax Matters), 3.16 (Employee Benefit Plans) or 3.17
(Environmental Regulation) shall survive until the thirtieth day after the
expiration of the applicable statute of limitations (taking into account any
tolling periods and other extensions). All covenants and agreements contained
in or made pursuant to this Agreement or any Ancillary Agreement shall survive
execution and delivery of this Agreement and the Ancillary Agreements and the
Closing.

 

10.2                           Indemnification.

 

10.2.1                            Indemnification.  Subject to the limitations set forth in Section 10.2.2,
the Company and Gougeon will, on a joint and several basis, indemnify and hold 

 

35

 

harmless
the Investors and each of their Affiliates, and the representatives (including
legal, professional, financial, tax and other advisors) and Affiliates of each
of the foregoing Persons (each, an “Investor Indemnified Person”), from,
against and in respect of any and all Actions, Liabilities, Governmental
Orders, Encumbrances, losses (including without limitation any diminution in
value of the Shares, the Conversion Shares or other Equity Interests hereafter
acquired by the Investors as a result of or arising in connection with (a) and
(b) below, and, for
the avoidance of doubt, including any such diminution in value resulting from
the application of this Section 10.2.1 and the payment of any amounts by
the Company hereunder including to the Investors),
damages, bonds, dues, assessments, fines, penalties, Taxes, fees, costs
(including costs of investigation, defense and enforcement of this Agreement as
incurred), expenses or amounts paid in settlement (in each case, including
reasonable attorneys’ and experts fees and expenses as incurred), whether or
not involving a Third Party Claim (collectively, “Losses”), incurred or
suffered by the Investor Indemnified Persons or any of them as a result of,
arising out of or directly or indirectly relating to:

 

(a)                                  any fraud of the Company or Gougeon, the federal grand jury
subpoenas received by the Company and Afremov from U.S. Department of Justice
on or about November 17, 2004, the Excluded Items (including, without
limitation, any amounts invested in the Company (or, following the contribution
and exchange contemplated by the Contribution and Exchange Agreement, any
parent thereof) by any Investor Indemnified Person as a result of the facts and circumstances discussed in the Fredrikson &
Byron P.A. Report of Investigation for AGA Medical Corporation, dated July 13,
2005) or any breach of, or
inaccuracy in, any representation or warranty made by the Company or Gougeon in
this Agreement, any Ancillary Agreement or in any document, Schedule,
instrument or certificate delivered pursuant to this Agreement (in each case,
as such representation or warranty would read if all qualifications as to “the
Company’s Knowledge” and materiality, including each reference to the defined
term “Material Adverse Effect,” were deleted therefrom); or

 

(b)                                 any breach or violation of any covenant or agreement of the
Company or Gougeon (including this Section 10.2.1) to the extent required
to be performed or complied with by the Company or Gougeon prior to the Closing
in or pursuant to this Agreement or any Ancillary Agreement.

 

10.2.2                            Limitations.

 

(a)                                  The Company will have no obligation to indemnify the
Investor Indemnified Persons pursuant to Section 10.2.1(a) solely in
respect of Losses arising from the breach of, or inaccuracy in, any
representation or warranty made by the Company or Gougeon described therein
unless the aggregate amount of all such Losses incurred or suffered by the
Investor Indemnified Persons exceeds the Indemnity Deductible Amount (at which
point the Investor Indemnified Persons will be indemnified for all such Losses
in excess of the Indemnity Deductible Amount); provided, that the
foregoing limitations will not apply to claims for indemnification pursuant to Section 10.2.1(a) solely
in respect of breaches of, or 

 

36

 

inaccuracies
in, representations and warranties set forth in Section 3.15 (Tax
Matters).

 

(b)                                 Gougeon will have no obligation to indemnify the Investor
Indemnified Persons pursuant to Section 10.2.1(a) solely in respect
of Losses arising from the breach of, or inaccuracy in, any representation or
warranty made by the Company or Gougeon described therein unless the aggregate
amount of all such Losses incurred or suffered by the Investor Indemnified
Persons exceeds the Indemnity Deductible Amount (at which point, the Investor
Indemnified Persons will be indemnified for all such Losses in excess of the
Indemnity Deductible Amount) and Gougeon’s aggregate liability in respect of
any such claims will not exceed $95,000,000 plus an amount equal to the
additional aggregate Purchase Price, if any, paid by the Investors pursuant to
the proviso in Section 2.1 (the “Cap”); provided, that the
foregoing limitations will not apply to claims for indemnification pursuant to Section 10.2.1(a) solely
in respect of breaches of, or inaccuracies in, representations and warranties
set forth in Section 3.15 (Tax Matters); and provided further,
that the Cap will also not apply to claims for indemnification pursuant to Section 10.2.1(a) solely
in respect of breaches of, or inaccuracies in, representations and warranties
set forth in Sections 3.1 (Organization), 3.2 (Power and Authorization), 3.4(d) (Noncontravention),
3.5 (Capitalization), 3.14.1 (Legal Compliance), 3.16 (Employee Benefit Plans),
3.17 (Environmental), 3.25 (No Brokers), 4.1 (Power and Authorization) and 4.4
(No Brokers).

 

(c)                                  All payments to be made by the Company pursuant to this Section 10
will be made in cash.  All payments to be
made by Gougeon pursuant to this Section 10 will be made, at Gougeon’s
option, in cash or through the transfer of capital stock of the Company (or,
following the contribution and exchange contemplated by the Contribution and
Exchange Agreement, any parent thereof) held by Gougeon (including any of his
successors, assigns and transferees) on such date with a fair value equal to
such payment obligation, determined as of the Closing Date, as adjusted to
reflect the diminution in value of such capital stock resulting from any
Losses, to the applicable Investor Indemnified Persons.  At any time when shares of capital stock will
be used to satisfy his indemnification obligations hereunder, any such shares
which have an automatic accruing dividend or other preferential rights will
first be used to satisfy such obligations, and then, after all such shares have
been so transferred, any other shares of such capital stock then held by
Gougeon (including his successors, assigns and transferees) will be used to
satisfy such obligations. The fair value of any shares of capital stock to be
used to satisfy any indemnification obligations hereunder shall be determined,
as of the Closing Date, jointly by the Gougeon and WCAS IX at the time such
payment is to be made; provided, that the value of shares of capital
stock which have an accruing dividend shall be the accrued value of such
shares.  If such parties are unable to
reach agreement within a reasonable period of time, the fair value of such
shares shall be determined, as of the Closing Date, by an independent appraiser
experienced in valuing such type of securities jointly selected by Gougeon and
WCAS IX.  The determination of such
appraiser shall 

 

37

 

be
final and binding upon the parties, and the fees and expenses of such appraiser
shall be borne by Gougeon.

 

(d)                                 All payments to be made by the Company or Gougeon pursuant
to claims for indemnification pursuant to Section 10.2.1(a) solely in
respect of breaches of, or inaccuracies in, representations and warranties set
forth in Section 3.15 (Tax Matters) shall be reduced, if and to the extent
there have been any (i) actual Tax Benefits to the Company prior to the
time such payment is to be made, which Tax Benefits result from items 1 or 2
disclosed on Schedule 10.2.2(d), or (ii) actual cash received by
the Company prior to the time such payment is to be made, which cash is
received as a result of items 3 or 4 disclosed on Schedule 10.2.2(d),
and, in the case of (i) and (ii) of this Section 10.2.2(d), if
requested by WCAS IX, such Tax Benefits or cash are verified in writing by the
Company’s independent accountants.

 

(e)                                  The Investors acknowledge that Gougeon will contribute up to
$15,000,000 of the proceeds he receives from the Contemplated Transactions to a
newly formed limited partnership to be known as the Gougeon Family Limited
Partnership (the “Family Partnership”). 
Prior to the contribution of such proceeds, no other contributions will
have been made to the Family Partnership. 
Thereafter, Gougeon may contribute additional assets (other than shares
of capital stock of the Company (or, following the contribution and exchange
contemplated by the Contribution and Exchange Agreement, any parent thereof))
to the Family Partnership, if and to the extent Gougeon has received
distributions from the Family Partnership equal to or greater than the fair
market value of such additional contributed assets.  Except for contributions of assets contemplated
by the immediately preceding sentence, no additional contributions will be made
to the Family Partnership.  Provided that
there has not been any breach or violation of this paragraph (e), if any claim
becomes due from Gougeon pursuant to Section 10.2.1(a) solely in
respect of Losses arising from the breach of, or inaccuracy in, any
representation or warranty made by the Company or Gougeon described therein,
the Investors shall have no rights against Gougeon’s interest in, or the assets
held in, the Family Partnership.  Upon
receiving any notice of any such claim, Gougeon will, if requested, provide
WCAS IX with reasonable documentation evidencing all contributions made and
distributions from the Family Partnership, including reasonable documentation
evidencing the fair market value of any non-cash contributions or
distributions.

 

(f)                                    Claims for indemnification pursuant to any other provision
of Section 10.2.1 are not subject to the limitations set forth in this Section 10.2.2.

 

(g)                                 If, following the Closing, any claim becomes due from
Gougeon pursuant to Section 10 in respect of any Losses, Gougeon shall
have no rights against the Company, or any director, officers, employee or
stockholder thereof (in their capacity as such), whether by reason of
contribution, indemnification, subrogation or otherwise, in respect of any such
claim, and shall not take any action against the Company or any person or
entity in respect thereof.

 

38

 

Notwithstanding
anything to the contrary contained herein, none of Gougeon, the Company, the
Investors nor any Investor Indemnified Person shall assert any claims against
any officers, directors, attorneys, employees, or agents of the Company (other
than Gougeon), arising out of or with respect to this Agreement or the
Contemplated Transactions, including any Ancillary Agreement or any other
document, Schedule, instrument or certificate delivered pursuant to or in
connection therewith, or any action, inaction, statement or omission pertaining
thereto (whether such right sounds in contract or tort, or by reason of
contribution, indemnification, subrogation, or otherwise), including without
limitation any right arising with respect to Section 10 in respect of any
Losses suffered by reason of any breach of, or inaccuracy in, any
representation or warranty made by the Company or Gougeon.

 

10.2.3                            Time for Claims.  No claim may be made or suit instituted
seeking indemnification pursuant to Section 10.2.1(a) for any breach
of, or inaccuracy in, any representation or warranty unless a written notice
describing such breach or inaccuracy in reasonable detail in light of the
circumstances then known to the Indemnified Party, is provided to the
Indemnifying Party prior to the expiration of such representation or warranty
set forth in Section 10.1 (unless the time of expiration of such
representation or warranty shall be extended pursuant to equitable tolling,
fraudulent concealment or similar doctrines).

 

10.2.4                            Third Party Claims.

 

(a)                                  Notice of Claim.  If any third party notifies an Indemnified
Party with respect to any matter (a “Third Party Claim”) which may give
rise to an Indemnity Claim against an Indemnifying Party under this Section 10,
then the Indemnified Party will promptly give written notice to the
Indemnifying Party; provided, however, that no delay on the part
of the Indemnified Party in notifying the Indemnifying Party will relieve the
Indemnifying Party from any obligation under this Section 10, except to the
extent such delay actually and materially prejudices the Indemnifying Party.

 

(b)                                 Assumption of Defense, etc.  The Indemnifying Party will be entitled to
participate in the defense (although not to appear as though counsel of record)
of any Third Party Claim that is the subject of a notice given by the
Indemnified Party pursuant to Section 10.2.4.  In addition, 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 (i) the Indemnifying Party gives written notice to the Indemnified
Party within fifteen days after the Indemnified Party has given notice of the
Third Party Claim that the Indemnifying Party will indemnify the Indemnified
Party from and against the entirety of any and all Losses the Indemnified Party
may suffer resulting from, arising out of, relating to, in the nature of, or
caused by the Third Party Claim, (ii) the Indemnifying Party provides the
Indemnified Party with evidence reasonably acceptable to the Indemnified Party
that the Indemnifying Party will have adequate financial resources to defend
against the Third Party 

 

39

 

Claim
and fulfill its indemnification obligations hereunder, (iii) the Third
Party Claim involves only money damages and does not seek an injunction or
other equitable relief against the Indemnified Party, (iv) the Indemnified
Party has not been advised by counsel that an actual or potential conflict
exists between the Indemnified Party and the Indemnifying Party in connection
with the defense of the Third Party Claim, (v) the Third Party Claim does
not relate to or otherwise arise in connection with Taxes or any criminal or
regulatory enforcement Action, (vi) settlement of, an adverse judgment
with respect to or the Indemnifying Party’s conduct of the defense of the Third
Party Claim is not, in the good faith judgment of the Indemnified Party, likely
to be adverse to the Indemnified Party’s reputation or continuing business
interests (including its relationships with current or potential customers,
suppliers or other parties material to the conduct of its business) and (vii) the
Indemnifying Party conducts the defense of the Third Party Claim actively and
diligently.  The Indemnified Party may
retain separate co-counsel at its sole cost and expense and participate
(although not to appear as though counsel of record) in the defense of the
Third Party Claim; provided, however, that the Indemnifying Party
will pay the fees and expenses of counsel retained by the Indemnified Party
that are incurred prior to Indemnifying Party’s assumption of control of the
defense of the Third Party Claim.

 

(c)                                  Limitations on Indemnifying Party.  The Indemnifying
Party will not consent to the entry of any judgment or enter into any
compromise or settlement with respect to the Third Party Claim without the
prior written consent of the Indemnified Party, not to be unreasonably
withheld, conditioned or delayed, unless such judgment, compromise or
settlement (i) provides for the payment by the Indemnifying Party of money
as sole relief for the claimant, (ii) results in the full and general
release of the Indemnified Party from all liabilities arising or relating to,
or in connection with, the Third Party Claim and (iii) involves no finding
or admission of any violation of Legal Requirements or the rights of any Person
and has no effect on any other claims that may be made against the Indemnified
Party.

 

(d)                                 Indemnified Party’s Control.  If the Indemnifying Party does not deliver
the notice contemplated by Section 10.2.4(b) within 15 days after the
Indemnified Party has given notice of the Third Party Claim, or otherwise at
any time fails to conduct the defense of the Third Party Claim actively and
diligently, the Indemnified Party may defend, and may consent to the entry of
any judgment or enter into any compromise or settlement with respect to, the
Third Party Claim in any manner it may deem appropriate (and the Indemnified
Party need not consult with, or obtain any consent from, the Indemnifying Party
in connection therewith).  If such notice
is given on a timely basis and the Indemnifying Party conducts the defense of
the Third Party Claim actively and diligently but any of the other conditions
in Section 10.2.4(b) is or becomes unsatisfied, the Indemnified Party
may defend, and may consent to the entry of any judgment or enter into any
compromise or settlement with respect to, the Third Party Claim; provided,
however, that the Indemnifying Party will not be bound by the entry of
any such judgment consented to, or any such compromise or settlement effected, 

 

40

 

without
its prior written consent (which consent will not be unreasonably withheld,
conditioned or delayed).  In the event
that the Indemnified Party conducts the defense of the Third Party Claim
pursuant to this Section 10.2.4, the Indemnifying Party will (i) advance
the Indemnified Party promptly and periodically for the costs of defending
against the Third Party Claim (including reasonable attorneys’ fees and
expenses) and (ii) remain responsible for any and all other Losses that
the Indemnified Party may incur or 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 Section 10.

 

(e)                                  Consent to Jurisdiction Regarding Third Party Claim.  The Company and
Gougeon, each in its and his capacity as an Indemnifying Party, hereby consents
to the non-exclusive jurisdiction of any court in which any Third Party Claim
may brought against any Indemnified Party for purposes of any claim which such
Indemnified Party may have against such Indemnifying Party pursuant to this
Agreement in connection with such Third Party Claim, and in furtherance
thereof, the provisions of Section 11.11 are incorporated herein by
reference, mutatis mutandis.

 

10.2.5                            Exclusive Remedy.  Except for remedies that cannot be waived as
a matter of law or as provided in Section 11.12, if the Closing occurs,
indemnification pursuant to this Section 10 shall be the exclusive remedy
for any breach of this Agreement (including any representation, warranty,
covenant and agreement contained in this Agreement), other than in respect of
claims based on conduct constituting fraud, intentional misrepresentation or
the violation of law.

 

11                                  MISCELLANEOUS

 

11.1                           Expenses.  Each of the parties hereto will be
responsible for their own costs and expenses in connection with the negotiation,
execution and consummation of the Contemplated Transactions; provided,
that if and to the extent of the consummation of the Contemplated Transactions,
the Company will pay all such costs and expenses of Gougeon and the Investors; provided,
further, that if this Agreement is terminated in accordance with Section 9.1
(other than a termination pursuant to Section 9.1(e)), Gougeon will pay
the out-of-pocket costs and expenses of the Investors, including any fees and
expenses payable to any advisors of the Investors, up to an aggregate
$2,500,000.  At the time of, and subject
to, the consummation of the Afremov Buyout, the Company shall pay to WCAS
Management Corporation, or another designee of WCAS IX, a financing fee equal
to $2,440,000 payable in immediately available funds at the Closing.

 

11.2                           Notices.  All notices, requests, demands, claims and
other communications required or permitted to be delivered, given or otherwise
provided under this Agreement must be in writing and must be delivered, given
or otherwise provided: (a) by hand (in which case, it will be effective
upon delivery); (b) by facsimile (in which case, it will be effective upon
receipt of confirmation of good transmission); or (c) by overnight
delivery by a nationally recognized courier service (in which case, it will be
effective on the Business Day after being deposited with such courier service);
in each case, to the address (or facsimile number) listed below:

 

41

 

If to the Company, to it at:

 

AGA
Medical Corporation

682
Mendelssohn Avenue

Golden
Valley, Minnesota 55427

Telephone number: (763) 513-9227

Facsimile number: (763) 513-9226

Attention: Chief Executive Officer

 

If to Investor, to it at:

 

c/o Welsh, Carson, Anderson & Stowe

320 Park Avenue, Suite 2500

New York, New York 10022

Telephone number: (212) 893-9500

Facsimile number: (212) 893-9583

Attention: Paul B. Queally and Sean M. Traynor

 

with a copy to:

 

Ropes &
Gray LLP

45 Rockefeller Plaza

New York, New York 10111

Telephone number:  (212) 841-5785

Facsimile number: (212) 841-5725

Attention: Othon A. Prounis, Esq.

 

If to Gougeon, to him at:

 

4930
St. Croix Avenue North

Golden
Valley, Minnesota 55422

Telephone number: (763) 521-7143

Facsimile number: (763) 521-7143

 

with a copy to:

 

Parsinen
Kaplan Rosberg & Gotlieb P.A.

100
South Fifth Street, Suite 110

Minneapolis,
Minnesota 55402

Facsimile number: (612) 333-6798

Attention: Jude Anne Carluccio, Esq.

 

Each of the parties to this Agreement may specify a
different address or facsimile number by giving notice in accordance with this Section 11.2
to each of the other parties hereto.

 

11.3                           Succession and Assignment; No Third-Party Beneficiary.  Subject to the
immediately following sentence, this Agreement will be binding upon and inure
to the benefit of 

 

42

 

the parties hereto and their respective
successors and permitted assigns, each of which such successors and permitted
assigns will be deemed to be a party hereto for all purposes hereof.  No party may assign, delegate or otherwise
transfer either this Agreement or any of its rights, interests, or obligations
hereunder without the prior written approval of the other parties; provided,
however, that any Investor may assign any or all of its rights and
interests hereunder to one or more of its Affiliates.  Any purported assignment, delegation or
transfer other than pursuant to the preceding sentence shall be null and void ab initio. 
Except as expressly provided herein, this Agreement is for the sole
benefit of the parties and their permitted successors and assignees and nothing
herein expressed or implied will give or be construed to give any Person, other
than the parties and such successors and assignees, any legal or equitable
rights hereunder.

 

11.4                           Amendments and Waivers.  No amendment or waiver of any provision of
this Agreement will be valid and binding unless it is in writing and signed, in
the case of an amendment, by WCAS IX, Gougeon and the Company, or in the case
of a waiver, by the party against whom the waiver is to be effective.  No waiver by any party of any breach or
violation or, default under or inaccuracy in any representation, warranty or
covenant hereunder, whether intentional or not, will be deemed to extend to any
prior or subsequent breach, violation, default of, or inaccuracy in, any such
representation, warranty or covenant hereunder or affect in any way any rights
arising by virtue of any prior or subsequent such occurrence.  No delay or omission on the part of any party
in exercising any right, power or remedy under this Agreement will operate as a
waiver thereof.

 

11.5                           Entire Agreement.  This Agreement, together with the other
Ancillary Agreements and any documents, instruments and certificates explicitly
referred to herein or therein, constitutes the entire agreement among the
parties hereto with respect to the subject matter hereof and supersedes any and
all prior discussions, negotiations, proposals, undertakings, understandings
and agreements, whether written or oral, with respect thereto.

 

11.6                           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute but one and the same instrument.  Facsimile signatures hereon shall be deemed
original signatures hereon.

 

11.7                           Severability.  Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction will 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.  In the event that any provision hereof would,
under applicable law, be invalid or unenforceable in any respect, each party hereto
intends that such provision will be construed by modifying or limiting it so as
to be valid and enforceable to the maximum extent compatible with, and possible
under, applicable law.

 

11.8                           Headings.  The headings contained in this Agreement are
for convenience purposes only and will not in any way affect the meaning or
interpretation hereof.

 

11.9                           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 will be construed as if drafted jointly by the parties
and no presumption or burden of proof will arise favoring or disfavoring any
party by virtue of the authorship of any of the 

 

43

 

provisions of this Agreement.  The parties intend that each representation,
warranty and covenant contained herein will have independent significance.  If any party has breached or violated, or if
there is an inaccuracy in, any representation, warranty or covenant contained
herein in any respect, the fact that there exists another representation,
warranty or covenant relating to the same subject matter (regardless of the
relative levels of specificity) which the party has not breached or violated,
or in respect of which there is not an inaccuracy, will not detract from or
mitigate the fact that the party has breached or violated, or there is an
inaccuracy in, the first representation, warranty or covenant.  Any references to the Company throughout the
representations or warranties shall include references to each of the
subsidiaries of the Company.  Any
affirmative covenant made by the Company hereunder shall include a covenant to
cause each of its subsidiaries to engage in the required activity, if
applicable.  Any negative covenant made
by the Company hereunder shall include a covenant not to cause any of its
subsidiaries to engage in the applicable activity.

 

11.10                     Governing Law.  This Agreement, the rights of the parties and
all Actions arising in whole or in part under or in connection herewith, will
be governed by and construed in accordance with the domestic substantive laws
of the State of New York, without giving effect to any choice or conflict of
law provision or rule that would cause the application of the laws of any
other jurisdiction.

 

11.11                     Jurisdiction; Venue; Service of Process.

 

11.11.1                      Jurisdiction.  Subject to the provisions of Section 10.4.5,
each party to this Agreement, by its execution hereof, (a) hereby
irrevocably submits to the exclusive jurisdiction of the state courts of the
State of New York or the United States District Court located in New York
County in the State of New York for the purpose of any Action between the
parties arising in whole or in part under or in connection with this Agreement,
the Ancillary Agreements or the Contemplated Transactions, (b) hereby
waives to the extent not prohibited by applicable law, and agrees not to
assert, by way of motion, as a defense or otherwise, in any such Action, any
claim that it is not subject personally to the jurisdiction of the above-named
courts, that its property is exempt or immune from attachment or execution,
that any such Action brought in one of the above-named courts should be
dismissed on grounds of forum non conveniens,
should be transferred or removed to any court other than one of the above-named
courts, or should be stayed by reason of the pendency of some other proceeding
in any other court other than one of the above-named courts, or that this
Agreement or the subject matter hereof may not be enforced in or by such court
and (c) hereby agrees not to commence any such Action other than before
one of the above-named courts. 
Notwithstanding the previous sentence a party may commence any Action in
a court other than the above-named courts solely for the purpose of enforcing
an order or judgment issued by one of the above-named courts.

 

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

 

44

 

11.11.3                      Service of Process.  Each party hereby (a) consents to
service of process in any Action between the parties arising in whole or in
part under or in connection with this Agreement in any manner permitted by New
York law, (b) agrees that service of process made in accordance with
clause (a) or made by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 11.2, will
constitute good and valid service of process in any such Action and (c) waives
and agrees not to assert (by way of motion, as a defense, or otherwise) in any
such Action any claim that service of process made in accordance with clause (a) or
(b) does not constitute good and valid service of process.

 

11.12                     Specific Performance.  Each of the parties acknowledges and agrees
that the other parties 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 or violated.  Accordingly, each of the parties agrees that,
without posting bond or other undertaking, the other parties will be entitled
to an injunction or injunctions to prevent breaches or violations 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 any state thereof having jurisdiction over the parties and the matter
in addition to any other remedy to which it may be entitled, at law or in
equity.  Each party further agrees that,
in the event of any action for specific performance in respect of such breach
or violation, it will not assert that the defense that a remedy at law would be
adequate.

 

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

 

45

 

IN WITNESS WHEREOF, each of the undersigned has
executed this Agreement as an agreement as of the date first above written.

 

 

	
  THE INVESTORS:

  	
  WELSH, CARSON,
  ANDERSON & STOWE IX, L.P.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  WCAS IX
  Associates, L.L.C.,

  
	
   

  	
   

  	
  its general
  partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Russell L. Carson

  
	
   

  	
  Thomas E. McInerney

  
	
   

  	
  Robert A. Minicucci

  
	
   

  	
  Anthony J. de Nicola

  
	
   

  	
  Paul B. Queally

  
	
   

  	
  Jonathan M. Rather -
  IRA

  
	
   

  	
  Sanjay Swani

  
	
   

  	
  D. Scott Mackesy

  
	
   

  	
  John D. Clark

  
	
   

  	
  James R. Matthews

  
	
   

  	
  John Almedia, Jr.

  
	
   

  	
  Sean M. Traynor

  
	
   

  	
  WCAS Profit Sharing
  Plan

  
	
   

  	
  Michael E. Donovan

  
	
   

  	
  Eric J. Lee

  
	
   

  	
  Brian T. Regan

  
	
   

  	
  Lucas Garman

  
	
   

  	
  David Mintz

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  WCAS MANAGEMENT
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Jonathan
  Rather

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  THE BRUCE K. ANDERSON

  
	
   

  	
  2004 IRREVOCABLE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Mary R.
  Anderson

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  THE PATRICK WELSH

  
	
   

  	
  2004 IRREVOCABLE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Carol Welsh

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

	
   

  	
  /s/ Lauren
  Melkus

  
	
   

  	
  Lauren Melkus

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ROUNDTABLE ASSOCIATES LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David F.
  Bellet

  
	
   

  	
   

  	
  Name: David F.
  Bellet

  
	
   

  	
   

  	
  Title: Managing
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELECT GLOBAL INVESTORS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Rocco A.
  Ortenzio

  
	
   

  	
   

  	
  Name: Rocco A.
  Ortenzio

  
	
   

  	
   

  	
  Title: General
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Jeffrey Jay

  
	
   

  	
  Jeffery Jay

  

 

 

	
  GOUGEON:

  	
  /s/ Franck
  Gougeon

  
	
   

  	
  Franck Gougeon

  
	
   

  	
   

  
	
   

  	
   

  
	
  THE COMPANY:

  	
  AGA MEDICAL
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ John Borg

  
	
   

  	
   

  	
  John Borg,
  Receiver-Interim CEO*

  

 

	
   

  	
  *Notwithstanding
  anything contained elsewhere to the contrary, it is understood and agreed
  that John Borg, whose signature appears on behalf of the Company, has, by
  direction of the Hennepin County District Court, State of Minnesota, in its
  Order for Judgment On Buyout Motions, dated December 28, 2004, executed
  this agreement solely in his representative and court-appointed capacity as
  Receiver-Interim CEO (as defined and set forth in the May 22, 2003 Order
  of Judge Karasov, as later modified and amended). Mr. Borg has made no
  substantive review of the terms and conditions of this agreement nor has he
  conducted any inquiry regarding the accuracy of such matters (the due
  diligence having been conducted through Mr. Gougeon and the managers,
  employees, distributors, customers and vendors of the Company).  Mr. Borg’s signature is intended to
  bind the Company to the Agreement, but he joins individually in none of the
  covenants, representations, warranties, or other undertakings contained
  herein. 

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  

 

 

SCHEDULE
2.1

 

	
  Investor

  	
   

  	
  Minimum

  Shares

  	
   

  	
  Aggregate

  Purchase

  Price

  	
   

  	
  Maximum

  Shares

  	
   

  	
  Aggregate

  Purchase

  Price

  	
   

  
	
  Welsh, Carson, Anderson & Stowe IX, L.P.

  	
   

  	
  117,039

  	
   

  	
  $

  	
  117,039,000

  	
   

  	
  136,517

  	
   

  	
  $

  	
  136,517,000

  	
   

  
	
  Patrick Welsh 2004 Irrevocable Trust

  	
   

  	
  388

  	
   

  	
  388,000

  	
   

  	
  452

  	
   

  	
  452,000

  	
   

  
	
  Russell L. Carson

  	
   

  	
  388

  	
   

  	
  388,000

  	
   

  	
  452

  	
   

  	
  452,000

  	
   

  
	
  Bruce K. Anderson 2004 Irrevocable Trust

  	
   

  	
  388

  	
   

  	
  388,000

  	
   

  	
  452

  	
   

  	
  452,000

  	
   

  
	
  Thomas E. McInerney

  	
   

  	
  388

  	
   

  	
  388,000

  	
   

  	
  452

  	
   

  	
  452,000

  	
   

  
	
  Robert A. Minicucci

  	
   

  	
  382

  	
   

  	
  382,000

  	
   

  	
  445

  	
   

  	
  445,000

  	
   

  
	
  Anthony J. de Nicola

  	
   

  	
  326

  	
   

  	
  326,000

  	
   

  	
  380

  	
   

  	
  380,000

  	
   

  
	
  Paul B. Queally

  	
   

  	
  326

  	
   

  	
  326,000

  	
   

  	
  380

  	
   

  	
  380,000

  	
   

  
	
  Jonathan M. Rather — IRA

  	
   

  	
  98

  	
   

  	
  98,000

  	
   

  	
  114

  	
   

  	
  114,000

  	
   

  
	
  Sanjay Swani

  	
   

  	
  92

  	
   

  	
  92,000

  	
   

  	
  107

  	
   

  	
  107,000

  	
   

  
	
  D. Scott Mackesy

  	
   

  	
  92

  	
   

  	
  92,000

  	
   

  	
  107

  	
   

  	
  107,000

  	
   

  
	
  John D. Clark

  	
   

  	
  92

  	
   

  	
  92,000

  	
   

  	
  107

  	
   

  	
  107,000

  	
   

  
	
  James R. Matthews

  	
   

  	
  92

  	
   

  	
  92,000

  	
   

  	
  107

  	
   

  	
  107,000

  	
   

  
	
  John Almedia, Jr.

  	
   

  	
  24

  	
   

  	
  24,000

  	
   

  	
  27

  	
   

  	
  27,000

  	
   

  
	
  Sean M. Traynor

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  	
  116

  	
   

  	
  116,000

  	
   

  
	
  WCAS Profit Sharing Plan

  	
   

  	
  50

  	
   

  	
  50,000

  	
   

  	
  50

  	
   

  	
  50,000

  	
   

  
	
  Michael E. Donovan

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  
	
  Eric J. Lee

  	
   

  	
  50

  	
   

  	
  50,000

  	
   

  	
  50

  	
   

  	
  50,000

  	
   

  
	
  Brian T. Regan

  	
   

  	
  25

  	
   

  	
  25,000

  	
   

  	
  25

  	
   

  	
  25,000

  	
   

  
	
  Lucas Garman

  	
   

  	
  25

  	
   

  	
  25,000

  	
   

  	
  25

  	
   

  	
  25,000

  	
   

  
	
  David Mintz

  	
   

  	
  10

  	
   

  	
  10,000

  	
   

  	
  10

  	
   

  	
  10,000

  	
   

  
	
  WCAS Management Corporation

  	
   

  	
  10

  	
   

  	
  10,000

  	
   

  	
  10

  	
   

  	
  10,000

  	
   

  
	
  Lauren Melkus

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  
	
  Roundtable Associates LLP

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  	
  100

  	
   

  	
  100,000

  	
   

  
	
  Select Global Investors, LP

  	
   

  	
  250

  	
   

  	
  250,000

  	
   

  	
  250

  	
   

  	
  250,000

  	
   

  
	
  Jeffrey Jay

  	
   

  	
  1,000

  	
   

  	
  1,000,000

  	
   

  	
  1,000

  	
   

  	
  1,000,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  122,000

  	
   

  	
  $

  	
  122,000,000

  	
   

  	
  142,000

  	
   

  	
  $

  	
  142,000,000

  	
   

  

 

 

SCHEDULE
2.5

 

Mutual General Release Agreement

 

This
Mutual General Release Agreement (“Release”) is made by and among the
undersigned (each referred to as a “Party” and collectively referred to as the “Parties”).

 

WHEREAS, the
undersigned are interested persons and/or parties to that certain litigation
venued in Hennepin County District Court, namely, Afremov v. Amplatz. et al.,
Court File No. CT 02-017734 (the “Pending Action”); and

 

WHEREAS, the signatory
Parties hereto identified as Franck Gougeon, the Investors, and AGA Medical
Corporation (the “Company”) are also signatories to that certain Stock Purchase
Agreement executed contemporaneously herewith (the “Agreement”); and

 

WHEREAS, the
undersigned desire to fully and finally resolve and settle all issues, differences
and actual and potential claims between them, including specifically, but not
limited to, all claims that were or could have been alleged in the Pending
Action.

 

NOW THEREFORE, in
consideration of the mutual promises set forth herein, the Parties agree as
follows:

 

1.             Recitals.
The recitals set forth above are incorporated herein by reference.

 

2.             Defined
Terms. All terms not otherwise defined herein shall be as
defined in the Agreement to which this Release is attached as Schedule 2.5.

 

3.             Mutual
General Release.

 

(a)           Each Party hereby
releases and forever discharges every other Party to this Release, including
each Party’s respective owners, officers, directors, employees, predecessors, attorneys,
agents, heirs, executors, successors and assigns from absolutely all claims
that they have, or may have, against any of the other Parties to this Release, arising out of any fact, circumstance
or occurrence of any kind or nature up through the date of this Release. This
release includes a release of all claims, known or unknown, contingent or
non-contingent, matured or unmatured, including but not limited to the
involvement of any of the Parties in the Pending Action, or in the due
diligence, drafting, or negotiations related to this Release or any other
aspect of the Contemplated Transactions (the “Released Claims”). The Parties
hereby declare and represent that in making this Release it is understood and
agreed that the Parties are relying entirely upon their own judgment, belief, and
knowledge of the nature, extent and duration of said Released Claims and that
the Parties have not been influenced to any extent whatsoever in making this
Release by any representations or statements regarding said Released Claims, or
regarding any other matters, made by the Parties or by any person or persons
representing any of them; provided, however, that all rights concerning
representations, warranties, agreements, promises or covenants expressly set
forth in the Agreement are preserved and not released, as are all rights of the
Investor Indemnified Persons against Gougeon and the Company arising out of
matters described in Section 10 of the Agreement.

 

 

(b)           Subject to the last
sentence of Paragraph 3 (a), the Parties: (i) hereby expressly waive any
rights they may have under any statutes or common law principles with respect
to the Released Claims which may limit the extension of this Release to claims
which the Parties do not know or suspect to exist in their favor at the time of
executing this Release, which if known by them may have materially affected
their release of the other Parties; and (ii) further acknowledge that they
may hereafter discover facts different from, or in addition to, those which the
Parties now know or believe to be true with respect to the Released Claims, and
agree that, in such event, this Release shall nevertheless be and remain
effective in all respects with respect to the Released Claims, notwithstanding
such different or additional facts, or the discovery thereof.

 

(c)           Each Party, severally
but not jointly, represents and warrants that it or he has not assigned or
otherwise transferred any interest in any of the Released Claims.

 

(d)          Subject to the last
sentence of Paragraph 3 (a), the Parties: (i) covenant that they will not
sue or otherwise prosecute claims against any other Party with respect to any
of the Released Claims; and (ii) acknowledge and agree that it shall be
sufficient for dismissal with prejudice of any such action that this executed
Release be presented to any court of competent jurisdiction.

 

(e)           The Parties
acknowledge and agree that the other Parties are direct or intended third party
beneficiaries of this Release for purposes of this Paragraph 3.

 

(f)           It is anticipated
that this Release will be executed in substantially the same form as of the
Closing Date, with effect up to the Closing Date, and the Parties agree to
cooperate to execute such additional release document (s) as of the
Closing Date.

 

4.             Additional Released Persons.  Franck Gougeon,
the Investors, and the Company each further releases and forever discharges the
following persons and entities and their respective owners, officers, directors,
employees, predecessors, attorneys, agents, heirs, executors, successors and
assigns (“Additional Released Persons”) from any and all Released Claims
pursuant and subject to the same terms and conditions set forth in Paragraph 3 as fully as if
the Additional Released Persons were named in Paragraph 3 as “Parties”
benefiting from the release and discharge granted therein to such Parties:

 

Bassford
Remele, A Professional Association;

 

Fredrikson &
Byron, P.A.; provided that the release of Fredrikson & Byron shall not
apply to contract and employment law advice and related services of the type
performed by Fredrikson & Byron as outside counsel to the Company
prior to appointment of the Receiver which do not arise in connection with the
litigation giving rise to the Order or any investigations or other proceedings
related thereto or to any matter involving parties to such litigation other
than the Company;

 

Halleland,
Lewis, Nilan, Sipkins & Johnson P.A.;

 

 

Manchester
Companies, Inc;

 

Merrill
Corporation;

 

Michael
J. O’Rourke, Esq. and Kelly & Jacobson; 

 

Briggs
and Morgan.

 

5.             Litigation
Counsel Disclaimer and Release. Franck Gougeon,
the Company and the Investors hereby agree to the following:

 

(a)           The law firm of
Bassford Remele, A Professional Association, and its attorneys Lewis A. Remele
and Dale M. Wagner (“Litigation Counsel”) are signing the Agreement and this
Release solely as a legal representative for the Company for the purpose of
effectuating the intent of the Order and Litigation Counsel have no intent to
obligate themselves as to any of the covenants, undertakings or obligations of
the Company under the Release or the Agreement.

 

(b)           Litigation Counsel
shall not be considered a party to the Release or the Agreement despite their
signature thereon, except with respect to Litigation Counsel’s status as a
third party beneficiary pursuant to Paragraph 4 of the Release and Section 10.2.2(f) of
the Agreement.

 

(c)           Litigation Counsel
have received no consideration nor will they receive any consideration in
exchange for signing the Release and the Agreement on behalf of the Company.

 

(d)           Litigation Counsel
neither make nor join in any of the covenants, representations or warranties
made on behalf of any of the parties in the Agreement.

 

(e)           None of the
obligations or requirements imposed upon any of the parties in the Agreement
are enforceable as against Litigation Counsel, except that such parties reserve
their right to request that the Court with jurisdiction over the Pending Action
compel Litigation Counsel to execute the Agreement and to execute, or cause to
be executed; all documents on behalf of the Company
necessary to effectuate the Contemplated Transactions according to the terms and
conditions of the Agreement.

 

(f)            Irrespective of
Litigation Counsel’s status as a signatory to the Agreement, the parties to the
Agreement covenant not to sue Litigation Counsel in connection with any dispute
that in any way arises out of the Agreement or any of the terms thereof, except
that such parties reserve their right to request that the Court with
jurisdiction over the Pending Action compel Litigation Counsel to execute the Agreement
and to execute, or cause to be executed, all documents on behalf of the Company
necessary to effectuate the Contemplated Transactions according to the terms
and conditions of the Agreement. It shall be sufficient for dismissal with
prejudice of any claim or action brought against Litigation Counsel in
violation of this Paragraph 5 that this Release be presented to the court. The
Company shall defend, indemnify and hold harmless Litigation Counsel from any
and all claims asserted against Litigation Counsel by Franck Gougeon, the
Investors or the Company in contravention of this Paragraph 5(f).

 

 

6.             Voluntary &
knowing Action.  The Parties
acknowledge that they have read and understand the terms of this Agreement; that
they have been represented by counsel of their choice throughout the
negotiation of this Release; and that they are voluntarily entering into this
Release.

 

7.             Execution
in Counterparts.  This Release
may be executed in any number of counterparts, and by different Parties upon
different counterparts, with the same effect as if the signatures thereto were
upon the same instrument. Each counterpart shall be deemed an
original but together all counterparts shall constitute one and the same
instrument. The date of execution of this Release shall be the last date any
individual counterpart was signed by any of the Parties. Facsimile signatures
hereon shall be deemed original signatures hereon.

 

[The balance of this page is intentionally left
blank]

 

 

IN WITNESS WHEREOF, the Parties have caused this
Mutual General Release Agreement to be executed on the date set forth below.

 

 

	
  Dated:

  	
  1-18-05

  	
   

  	
  /s/
  Franck Gougeon

  
	
   

  	
   

  	
  Franck
  Gougeon, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE INVESTORS:

  	
   

  	
  WELSH, CARSON, ANDERSON & STOWE IX, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  WCAS IX Associates, L.L.C., its general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  By:

  	
  /s/
  Sean M. Traynor

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Sean M. Traynor

  
	
   

  	
   

  	
   

  	
   

  	
  Title:    Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Patrick
  J. Welsh

  
	
   

  	
   

  	
  Russell
  L. Carson

  
	
   

  	
   

  	
  Bruce
  K. Anderson

  
	
   

  	
   

  	
  Thomas
  E. McInerney

  
	
   

  	
   

  	
  Robert
  A. Minicucci

  
	
   

  	
   

  	
  Anthony
  J. de Nicola

  
	
   

  	
   

  	
  Paul
  B. Queally

  
	
   

  	
   

  	
  Jonathan
  M. Rather

  
	
   

  	
   

  	
  Sanjay
  Swani

  
	
   

  	
   

  	
  D.
  Scott Mackesy

  
	
   

  	
   

  	
  John
  D. Clark

  
	
   

  	
   

  	
  James
  R. Matthews

  
	
   

  	
   

  	
  John
  Almedia, Jr.

  
	
   

  	
   

  	
  Sean
  M. Traynor

  
	
   

  	
   

  	
  WCAS
  Profit Sharing Plan

  
	
   

  	
   

  	
  Michael
  E. Donovan

  
	
   

  	
   

  	
  Eric
  J. Lee

  
	
   

  	
   

  	
  Brian
  T. Regan

  
	
   

  	
   

  	
  Ankur
  Kumar

  
	
   

  	
   

  	
  Clinton
  M. Biondo

  
	
   

  	
   

  	
  David
  Mintz

  
	
   

  	
   

  	
  Rona
  Drogy

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  By:

  	
  /s/
  Jonathan M. Rather

  
	
   

  	
   

  	
   

  	
   

  	
  Name:  Jonathan M.
  Rather

  
	
   

  	
   

  	
   

  	
   

  	
  Title:    Managing Member

  

 

 

	
   

  	
   

  	
  AGA
  MEDICAL CORPORATION RECEIVER AND INTERIM CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  /s/
  John W. Borg

  
	
   

  	
   

  	
  By:
  John W. Borg

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  /s/
  John W. Borg

  
	
   

  	
   

  	
  John
  W. Borg, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AGA
  MEDICAL CORPORATION SPECIAL LITIGATION COMMITTEE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  /s/
  Roger W. Meyer

  
	
   

  	
   

  	
  By:
  Roger W. Meyer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
  1-18-05

  	
   

  	
  /s/
  Roger W. Meyer

  
	
   

  	
   

  	
  Roger
  W. Meyer, individually

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AGA
  MEDICAL CORPORATION

  
	
   

  	
   

  	
  By
  Bassford Remele, a Professional Association Litigation Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated:

  	
   

  	
   

  	
  By:

  	
   

  

 

 

Schedules
to that Certain Amended and Restated Stock Purchase Agreement,

Dated July 28, 2005, By and Among

Welsh, Carson, Anderson & Stowe IX, L.P., the other Investors 

referred to therein,

AGA Medical Corporation, and Franck Gougeon

 

These Schedules are being
delivered pursuant to, and constitute exceptions to the representations and
warranties contained in, that certain Amended and Restated Stock Purchase
Agreement, dated as of July 28, 2005, by and among Welsh, Carson, Anderson &
Stowe IX, L.P., the other Investors referred to therein, AGA Medical
Corporation, and Franck Gougeon (the “Agreement”), and are an integral part
thereof.

 

Any terms defined in the
Agreement shall have the same meaning when used in these Schedules as when used
in the Agreement, unless otherwise defined herein or the context requires
otherwise. The numbers of these Schedules correspond to the section numbers in
the Agreement; provided, however, that any information disclosed
herein under any Schedule shall be deemed disclosed and incorporated into any
other Schedule herein if the applicability of such information thereto is
appropriate and reasonably inferred. Inclusion of a matter herein shall not be
deemed an admission that such matter is material or has had, or is reasonably
likely to have, a Material Adverse Effect. Items marked with an asterisk (*) have
been designated Excluded Items.

 

 

Schedule
3.1

 

Organization;
Subsidiaries

 

1.             The Company has two wholly owned Subsidiaries: Amplatzer
Medical Sales Corporation, a Minnesota corporation, and AGA Medical FSC, Inc.,
a non-operational Barbados corporation. AGA Medical FSC, Inc. is in the
process of being dissolved by the Company.

 

2.             There are limited minutes available for the meetings
of the shareholders or the Board of Directors for the year 2002 due to notes
not being taken.

 

3.             The Company is in the process of qualifying Amplatzer
Medical Sales to do business in Illinois, Maryland, and New York.

 

 

Schedule 3.3

 

Authorization of Governmental Authorities

 

1.             Authorization, execution, delivery and performance of
the Agreement by the Company is contingent on the issuance of a Government
Order by the Court approving the same. The consummation of the Contemplated
Transactions is contingent on the entry by the Court of the Final Order.

 

2.             A Certification and Report Form For Certain
Mergers and Acquisitions has been filed by the Company with the U.S. Federal
Trade Commission and Department of Justice pursuant to the Hart-Scott-Rudino
Antitrust Improvements Act of 1976. The Company received oral confirmation of
early termination of the approval waiting period for this application from the
Federal Trade Commission on July 11, 2005.

 

3.             SEC Form D to be filed.

 

 

Schedule
3.4

 

Noncontravention

 

1.             The Lease between the Company and Cambridge Apartments
Inc., dated October 3, 1995, as amended, relating to the Company’s
facility at 682 Mendelssohn Avenue, Golden Valley, MN states that “Tenant shall
not assign this Lease or sublet all or any part of the Premises without the
prior written consent of Landlord” and that “any change in the control of the
Tenant shall be deemed to be a transfer under this Lease.” The term “change in
control” is not defined in the Lease, and the Company believes that the
transactions contemplated in the Agreement do not constitute such a change in
control. Notwithstanding the forgoing, the Company received written consent to
the transaction from Cambridge Apartments Inc. as of July 18, 2005.

 

 

Schedule
3.5

 

Capitalization
of the Company

 

1.             The information set forth in this Schedule 3.5
is qualified in its entirety by the Litigation.

 

Schedule 3.5.2 (a)

 

	
  Person

  	
   

  	
  Amount

  
	
  Franck Gougeon

  	
   

  	
  200,000 shares of
  Common Stock

  
	
  Michael Afremov

  	
   

  	
  200,000 shares of
  Common Stock

  

 

Schedule 3.5.2 (b)

 

	
  Person

  	
   

  	
  Amount

  
	
  AGA Medical Holdings, Inc.

  	
   

  	
  200,000 shares of
  Common Stock

  

 

Schedule 3.5.4

 

1.             Agreement As To Corporate Stock of AGA Medical
Corporation, dated April 1, 1997, by and among AGA Medical Corporation, Kurt
Amplatz, Franck Gougeon and Michael Afremov.

 

2.             All of Afremov’s shares have been pledged to Maslon
Edelman Borman & Brand, LLP and Sulloway and Hollis, PLLC. Both are
counsel to Afremov.

 

 

Schedule
3.6

 

Financial
Statements

 

1.             Between 2001 and July 2004, William Liebesny, former
IT/IS Manager with the Company, purchased software purportedly worth
approximately $4.2 million on hardware and software. The actual assets
purchased with such sums are valued at approximately $500,000. The Company
believes that the discrepancy is appropriately reflected in the Company’s 2003
and 2004 financial statements.

 

2.             See Preliminary Report of Manchester Companies, Inc.,
dated October 26, 2004.

 

3.             The Company may write-down certain inventory purchased
from Minnesota Extrusion, Inc. Afremov and Gougeon are currently disputing
whether the inventory in question is obsolete. Assuming all of the inventory
subject to the dispute is obsolete, the amount of write-down will be
approximately $1,900,000.00. The Company believes the amounts of reserves
reflected in its financial statements are adequate to reflect such write-downs.

 

4.             The calculation of certain foreign exchange amounts
and the pass-through entries from the Company’s 2004 financial statements
underwent a review that resulted in a positive correcting entry to the October 2004
financials in the amount of $1,389,000. The correcting entry covered the period
from January 2004 to September 2004.

 

 

Schedule
3.7

 

Absence
of Undisclosed Liabilities

 

1.             See Schedule 3.6

 

2.             See Schedule 3.22

 

3.             See Schedule 3.23

 

4.             The Contemplated Transactions will constitute a Change
of Control under the severance plans described in Sections 1 and 2 of Schedule
3.16, below

 

5.             The Company still has payments due of approximately
$119,000 for the $219,000 remodeling that was undertaken at the Company’s Schmidt
Lake Road facility during 2005.

 

6.             Facts and circumstances discussed in the Fredrikson &
Byron P.A. Report of Investigation for AGA Medical Corporation, dated July 13,
2005.*

 

 

Schedule
3.8

 

Absence
of Certain Developments

 

1.             See Schedule 3.6

 

2.             See Section 2 of Schedule 3.11, below

 

3.             See Section 3.13.2 of Schedule 3.13, below

 

4.             See Sections 1 and 2 of Schedule 3.14

 

5.             See Sections 1 and 3 of Schedule 3.16

 

6.             See Schedule 3.18 (re: Contractual
Obligations entered into in 2004)

 

7.             See Schedule 3.19

 

8.             See Schedule 3.22

 

9.             See Schedule 3.23

 

10.           See Schedule 3.25

 

11.           On July 24, 2004, the Court approved a settlement
of the claims between Company and Afremov. The only obligation of the Company
or Afremov in connection with the settlement is that Afremov must contribute $5
million to nonprofit charitable entities from any proceeds he realizes from the
Closing of the Contemplated Transactions.

 

12.           On November 30, 2004, the Court instructed the
Company to pay Afremov back pay and to pay Afremov’s salary going forward. The
Company paid Afremov’s back pay to December 19, 2003 and will continue to
pay Afremov’s salary until the Closing of the Contemplated Transactions.

 

13.           In June 2004, the Company settled a lawsuit
brought against it by Minnesota Extrusion, Inc. for $2.5 million, $1.0
million of which was paid by Company’s insurer Chubb.

 

14.           The Company adopted the AGA Medical Corporation
Severance Plan for Managing Directors in December 2004 and amended the
same in January 2005.

 

15.           The Company has entered into the Interim Research
Agreement with Dr. Amplatz, dated effective May 9, 2005.

 

16.           The Company purchased a 288 Braid Carrier machine for
approximately $200,000 in 2005.

 

 

17.           Due to changes in tax law, the Company is now allowed
to expense, and has begun expensing pre-paid insurance on its financial
statements prior to the date such expenses are incurred. The Company is in the
process of filing a form 3115 with the IRS to acknowledge this change in tax
accounting practices.

 

18.           The Company has adopted an education reimbursement
plan for the benefit of its employees.

 

19.           The Company undertook an approximately $219,000
capital improvement/remodeling project at its Schmidt Lake Road facility during
the spring of 2005.

 

20.           The Company hold a Humanitarian Device Exemption
approval from the FDA for the PFO device. The FDA is currently considering
removing Humanitarian Device Exemption approval from the Company and all other
companies marketing PFO devices due to concerns over off-label use of PFO
devices by physicians. The Company is in ongoing discussions with the FDA
concerning alternatives to maintain its Humanitarian Device Exemption approval
for the PFO device.

 

21.           U. S. Bank National Association established Letter of
Credit Number SLCMMSP03734 in the aggregate amount of $300,000 on behalf of the
Company in the favor of Chubb & Son, a division of Federal Insurance
Company, dated June 20, 2005, expiring March 19, 2006.

 

22.           Facts and circumstances discussed in the Fredrikson &
Byron P.A. Report of Investigation for AGA Medical Corporation, dated July 13,
2005.*

 

 

Schedule
3.9

 

Assets

 

1.             See Schedule 3.11

 

2.             See Section 3.13.2 of Schedule 3.13, below

 

3.             See Section 3.18.1(c) of Schedule 3.18, below

 

 

Schedule
3.11

 

Real
Property

 

1.             Company owns a 189,000 square-foot
facility (as per the title documents; however, Opus has recently re-measured
this facility in connection with a capital improvement project, and has
measured the facility to contain 210,000 square feet) on 27 acres located at
9700 Schmidt Lake Road, Plymouth, Minnesota.

 

2.             Easement Agreement dated January 9,
2004 between Company and Qwest Corporation relating to the property owned by
Company and located at 9700 Schmidt Lake Road, Plymouth, Minnesota. The
Easement Agreement incorporates a Site Lease Agreement, dated January of
2004, between Company and Qwest Wireless, LLC. The Company is in the process of
terminating this Easement Agreement.

 

3.             Pursuant to an Office/Warehouse Lease,
dated October 3rd, 1995, and amended September 18, 2003, between
Company and Cambridge Apartments, Inc. (successor in interest to original
party to contract), Company leases 41,000 square-foot facility located at 682
Mendelssohn Avenue, Golden Valley, Minnesota.

 

 

Schedule 3.12

 

Equipment

 

1.             The Facility located at 9700 Schmidt Lake
Road, Plymouth, Minnesota will require substantial additions and renovations.
The Company believes the cost of such additions and renovations will be between
$5,000,000 and $7,000,000, but may be as much as $15,000,000.

 

 

Schedule
3.13

 

Intellectual
Property

 

Section 3.13.2

 

1.                                       See Schedule 3.22

 

2.                                       See generally Memo to Company from James T.
Nikolai dated August 26, 2004

 

3.                                       See generally Memo to Company from James T.
Nikolai dated October 6, 2003

 

4.                                       Mark Boucek has made claims that he
should have been named as a co-inventor on the Company’s intravascular
flow-restrictor patent application. The Company has provided Mr. Boucek
with a draft royalty agreement and form of assignment, which have not been
signed at this time.

 

5.                                       At a Board meeting in January 2004,
Michael Afremov claimed he should be named as a co-inventor on the Company’s
patent application for multi-layered braided structures for occluding vascular
defects. Messrs. Oslund, Amplatz, and Thill were named as inventors in the
application. On Jan 19th, 2004, copies of the application were sent to Afremov.
On Feb 13th, 2004, copies of the application were sent to Afremov’s counsel. The
Company’s counsel never received a response from Afremov regarding either
communication. A subsequent investigation by the Company did not reveal any
evidence that would substantiate Afremov’s claim.

 

6.                                       In connection with claims asserted by the
Company for violation of its intellectual property rights in India, Globe
Bio-Medicals has asserted that the Company’s intellectual property rights are
invalid or unenforceable. Globe Bio-Medicals may also be selling infringing
devices in South America.

 

7.                                       In connection with claims asserted by the
Company for violation of its intellectual property rights in China, the
following companies have filed petitions in China to invalidate certain of the
Company’s patents granted by China:

 

Shenzhen Lifetech
Scientific, Inc.

Shanghai Shape Memoried
Medical, Inc.

Shanghai Shape Memory
Alloy Material Co., LTD

Beijing Starway Medical
Supplies, LTD

Shenzhen City Xianjian Science
and Technology Co., LTD

Shenzhen Xianjian Science
and Technology Co., LTD

Shenzhen Xianjian
Technology Co., LTD

Beijing HYSJ Science and
Technology Co., LTD

 

 

The Company believes that
certain of the above listed Chinese entities are related to each other, are
different names for the same organization, or are cooperating with each other. The
Company has commenced litigation in China to enforce its patent rights against
certain of these companies.

 

8.                                       Frank Kotula was an employee of the
University of Minnesota at the time he did the work on the inventions which are
the subject of his Royalty Agreements. The University of Minnesota may have a
potential claim if Frank Kotula was working using University of Minnesota
equipment or was working on University of Minnesota time. Dr. Amplatz
worked on these same inventions while under an employment agreement with the
University of Minnesota. Several years ago, the Company may have inaccurately certified
to the University of Minnesota regarding the existence of any remunerative
arrangement between Dr. Amplatz and the Company.

 

9.                                       In India, a Delhi High Court decision
concerning a failure to register under the India Design Act may have been based
in part on a determination that the Company’s copyright registration was
ineffective.

 

10.                                 See generally Memo to Roger W. Meyer, Company
Litigation Coordinator, dated December 12, 2003, from John F. Thuente of
Patterson, Thuente, Skaar & Christensen, P. A.

 

11.                                 See generally Memo to Company dated January 30,
2003 from James T. Nikolai

 

12.                                 See generally Memo to Company dated May 25,
2004 from James T. Nikolai

 

13.                                 See generally Memo to Company dated January 14,
1998 from Paul T. Dietz

 

Section 3.13.3

 

1.                                       The Company owns the following patents:

 

	
  TITLE

  	
   

  	
  COUNTRY

  	
   

  	
  PATENT NO.

  	
   

  	
  PATENT DATE

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  United States

  	
   

  	
  6334864

  	
   

  	
  1/1/2002

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  United States

  	
   

  	
  6402772

  	
   

  	
  6/11/2002

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Eurasia

  	
   

  	
  003973

  	
   

  	
  12/25/2003

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  South Africa

  	
   

  	
  2002/8841

  	
   

  	
  1/28/2004

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Singapore

  	
   

  	
  92089

  	
   

  	
  7/31/03

  	
   

  
	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Australia

  	
   

  	
  2001261620

  	
   

  	
  6/24/2004

  	
   

  
	
  intravascular flow
  restrictor

  	
   

  	
  United States

  	
   

  	
  6638257

  	
   

  	
  10/28/2003

  	
   

  

 

 

	
  method and apparatus
  for occluding aneurysms

  	
   

  	
  United States

  	
   

  	
  6168622

  	
   

  	
  1/2/2001

  	
   

  
	
  method and apparatus
  for occluding aneurysms

  	
   

  	
  United States

  	
   

  	
  6506204

  	
   

  	
  1/14/2003

  	
   

  
	
  method and apparatus
  for occluding aneurysms

  	
   

  	
  EPO

  	
   

  	
  0902704

  	
   

  	
  8/20/2003

  	
   

  
	
  method of forming
  medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6123715

  	
   

  	
  9/26/2000

  	
   

  
	
  method of forming
  medical, devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6368339

  	
   

  	
  4/9/2002

  	
   

  
	
  method of forming
  medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6447531

  	
   

  	
  9/10/2002

  	
   

  
	
  method of forming
  medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6579303

  	
   

  	
  6/17/2003

  	
   

  
	
  method of forming
  medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6599308

  	
   

  	
  7/29/2003

  	
   

  
	
  method of forming
  medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6682546

  	
   

  	
  1/27/2004

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  United States

  	
   

  	
  5944738

  	
   

  	
  8/31/1999

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  Australia

  	
   

  	
  737934

  	
   

  	
  12/20/2001

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  Eurasia

  	
   

  	
  002106

  	
   

  	
  12/24/2001

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  China PRC

  	
   

  	
  ZL98813470.5

  	
   

  	
  4/2/2003

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  Hong Kong

  	
   

  	
  HK1032892

  	
   

  	
  6/13/2003

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  South Korea

  	
   

  	
  400506

  	
   

  	
  9/23/2003

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  Japan

  	
   

  	
  3524494

  	
   

  	
  2/20/2004

  	
   

  
	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  Canada

  	
   

  	
  2319521

  	
   

  	
  5/4/2004

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  5725552

  	
   

  	
  3/10/1998

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  5846261

  	
   

  	
  12/8/1998

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Australia

  	
   

  	
  711677

  	
   

  	
  2/3/2000

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Australia

  	
   

  	
  727012

  	
   

  	
  3/15/2001

  	
   

  

 

	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Eurasia

  	
   

  	
  001480

  	
   

  	
  4/23/2001

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Eurasia

  	
   

  	
  001447

  	
   

  	
  4/23/2001

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Canada

  	
   

  	
  2252913

  	
   

  	
  6/25/2002

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  China PRC

  	
   

  	
  ZL98808876.2

  	
   

  	
  10/2/2002

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  China PRC

  	
   

  	
  ZL97194488.1

  	
   

  	
  4/30/2003

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  South Korea

  	
   

  	
  393441

  	
   

  	
  7/22/2003

  	
   

  
	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Canada

  	
   

  	
  2302164

  	
   

  	
  3/2/2004

  	
   

  
	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  United States

  	
   

  	
  6468301

  	
   

  	
  10/22/2002

  	
   

  
	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Singapore

  	
   

  	
  92088

  	
   

  	
  7/31/2003

  	
   

  
	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Eurasia

  	
   

  	
  003693

  	
   

  	
  8/28/2003

  	
   

  

 

 

	
  retrievable self
  expanding stent

  	
   

  	
  United States

  	
   

  	
  6468303

  	
   

  	
  10/22/2002

  	
   

  
	
  retrievable self
  expanding stent

  	
   

  	
  Eurasia

  	
   

  	
  004287

  	
   

  	
  2/26/2004

  	
   

  
	
  retrievable self
  expanding stent

  	
   

  	
  Australia

  	
   

  	
  2001249146

  	
   

  	
  5/6/2004

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  United States

  	
   

  	
  6210338

  	
   

  	
  4/3/2001

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  United States

  	
   

  	
  6241678

  	
   

  	
  6/5/2001

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Eurasia

  	
   

  	
  002415

  	
   

  	
  4/25/2002

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Australia

  	
   

  	
  752585

  	
   

  	
  2/20/2003

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Australia

  	
   

  	
  762205

  	
   

  	
  10/2/2003

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  New Zealand

  	
   

  	
  518276

  	
   

  	
  2/9/2004

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  South Korea

  	
   

  	
  428820

  	
   

  	
  4/13/2004

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Eurasia

  	
   

  	
  004855

  	
   

  	
  8/26/2004

  	
   

  
	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  China PRC

  	
   

  	
  ZL99809569.9

  	
   

  	
  11/9/2004

  	
   

  
	
  Repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Australia

  	
   

  	
  2001247364

  	
   

  	
  11/19/2004

  	
   

  
	
  alignment member for
  delivering anon-symmetric device with a pre-defined orientation

  	
   

  	
  China PRC

  	
   

  	
  ZL01803164.1

  	
   

  	
  4/27/2005

  	
   

  
	
  Repositionable and
  recapturable vascular stent/graft

  	
   

  	
  China PRC

  	
   

  	
  ZL01112410.5

  	
   

  	
  4/20/2005

  	
   

  
	
  Sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  China PRC

  	
   

  	
  ZL00816390.1

  	
   

  	
  4/20/2005

  	
   

  
	
  Sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Japan

  	
   

  	
  3643309

  	
   

  	
  2/4/2005

  	
   

  
	
  Sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Singapore

  	
   

  	
  92060

  	
   

  	
  11/30/2004

  	
   

  
	
  Sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  South Korea

  	
   

  	
  463297

  	
   

  	
  12/15/2004

  	
   

  
	
  Retrievable self
  expanding stent

  	
   

  	
  South Korea

  	
   

  	
  451476

  	
   

  	
  9/23/2004

  	
   

  
	
  Repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Sri Lanka

  	
   

  	
  12877

  	
   

  	
  3/12/2001

  	
   

  
	
  Retrievable self
  expanding stent

  	
   

  	
  Sri Lanka

  	
   

  	
  12876

  	
   

  	
  9/30/2004

  	
   

  
	
  alignment member for
  delivering anon-symmetric device witha pre-defined orientation

  	
   

  	
  Sri Lanka

  	
   

  	
  12875

  	
   

  	
  9/30/2004

  	
   

  

 

2.             The Company owns the following registered trademarks and
has the following trademark applications pending:

 

	
  TRADE
  MARK

  	
   

  	
  COUNTRY

  	
   

  	
  REGISTRATION
  NO.

  	
   

  	
  DATE

  	
   

  
	
  AMPLATZER

  	
   

  	
  Australia

  	
   

  	
  744470

  	
   

  	
  9/22/1997

  	
   

  
	
  AMPLATZER

  	
   

  	
  Canada

  	
   

  	
  500695

  	
   

  	
  9/16/1998

  	
   

  
	
  AMPLATZER

  	
   

  	
  China PRC

  	
   

  	
  1247606

  	
   

  	
  2/14/1999

  	
   

  
	
  AMPLATZER

  	
   

  	
  European
  Community

  	
   

  	
  633917

  	
   

  	
  2/26/1999

  	
   

  
	
  AMPLATZER

  	
   

  	
  Japan

  	
   

  	
  4231110

  	
   

  	
  1/14/1999

  	
   

  
	
  AMPLATZER

  	
   

  	
  Russian Fed.

  	
   

  	
  171204

  	
   

  	
  1/14/1999

  	
   

  
	
  TORQVUE &
  Design

  	
   

  	
  United States

  	
   

  	
  2818165

  	
   

  	
  2/24/2004

  	
   

  
	
  AMPLATZER

  	
   

  	
  United States

  	
   

  	
  2144604

  	
   

  	
  3/17/1998

  	
   

  
	
  TORQVUE

  	
   

  	
  United States

  	
   

  	
  2760128

  	
   

  	
  9/2/2003

  	
   

  
	
  Pending Application:

  AMPLATZER

  	
   

  	
  India

  	
   

  	
  Serial No. 769603

  	
   

  	
  9/22/1997

  	
   

  

 

 

3.                                       The Company
owns the following registered copyrights:

 

	
  TITLE

  	
   

  	
  COUNTRY

  	
   

  	
  REGISTRATION
  NO.

  	
   

  	
  DATE

  
	
  amplatzer
  occlusion devices asd pda pfo vsd

  	
   

  	
  United States

  	
   

  	
  TX5532900

  	
   

  	
  7/11/2002

  

 

4.                                       The Company has
the following patent applications pending:

 

	
  Australia

  	
   

  	
  3/16/2005

  	
   

  	
  2005201132

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Australia

  	
   

  	
  12/5/2002

  	
   

  	
  2002360495

  	
   

  	
  intravascular flow
  restrictor

  
	
  Brazil

  	
   

  	
  3/16/2005

  	
   

  	
  PI0500995-2

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Brazil

  	
   

  	
  12/5/2002

  	
   

  	
  PI0215626-1

  	
   

  	
  intravascular flow
  restrictor

  
	
  Brazil

  	
   

  	
  5/16/2001

  	
   

  	
  PI01095366

  	
   

  	
  retrievable self
  expanding stent

  
	
  Brazil

  	
   

  	
  3/12/2001

  	
   

  	
  PI01095374

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  Brazil

  	
   

  	
  5/16/2001

  	
   

  	
  PI01108158

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  Canada

  	
   

  	
  12/5/2002

  	
   

  	
  2477725

  	
   

  	
  intravascular flow
  restrictor

  
	
  Canada

  	
   

  	
  3/16/2005

  	
   

  	
   

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Canada

  	
   

  	
  5/16/2001

  	
   

  	
  2408943

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  Canada

  	
   

  	
  3/12/2001

  	
   

  	
  2403613

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  Canada

  	
   

  	
  3/12/2001

  	
   

  	
  2402101

  	
   

  	
  retrievable self
  expanding stent

  
	
  Canada

  	
   

  	
  11/28/2000

  	
   

  	
  2392940

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Canada

  	
   

  	
  7/30/1999

  	
   

  	
  2341228

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Canada

  	
   

  	
  7/10/1995

  	
   

  	
  2194669

  	
   

  	
  method of forming
  medical devices; intravascular occlusion devices

  
	
  China PRC

  	
   

  	
  3/18/2005

  	
   

  	
  200510071608.4

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  China PRC

  	
   

  	
  10/22/2004

  	
   

  	
  200410087702.4

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  China PRC

  	
   

  	
  1/21/2003

  	
   

  	
  03102917.5

  	
   

  	
  intravascular flow restrictor
  

  
	
  China PRC

  	
   

  	
  3/27/2001

  	
   

  	
  01112212.9

  	
   

  	
  retrievable self
  expanding stent

  
	
  EPO

  	
   

  	
  3/11/2005

  	
   

  	
  05251472.6

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  

 

 

	
  EPO

  	
   

  	
  12/17/2001

  	
   

  	
  01204926.8

  	
   

  	
  method of forming
  medical devices; intravascular occlusion devices

  
	
  EPO

  	
   

  	
  5/16/2001

  	
   

  	
  01935533.8

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  EPO

  	
   

  	
  3/12/2001

  	
   

  	
  01920293.6

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  EPO

  	
   

  	
  3/12/2001

  	
   

  	
  01922330.4

  	
   

  	
  retrievable self
  expanding stent

  
	
  EPO

  	
   

  	
  7/30/1990

  	
   

  	
  99941088

  	
   

  	
  sizing catheter for
  measuring septal defects

  
	
  EPO

  	
   

  	
  11/28/2000

  	
   

  	
  00992348.3

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  EPO

  	
   

  	
  10/12/1998

  	
   

  	
  98953347.6

  	
   

  	
  percutaneous catheter
  directed constricting occlusion device

  
	
  EPO

  	
   

  	
  9/1/1998

  	
   

  	
  98946804.6

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  EPO

  	
   

  	
  4/14/1997

  	
   

  	
  97922307

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  EPO

  	
   

  	
  7/10/1995

  	
   

  	
  95926193.4

  	
   

  	
  method of forming
  medical devices; intravascular occlusion devices

  
	
  EPO

  	
   

  	
  12/5/2002

  	
   

  	
  02795754.7

  	
   

  	
  intravascular flow
  restrictor

  
	
  Eurasia

  	
   

  	
  3/18/2005

  	
   

  	
  200500381

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Eurasia

  	
   

  	
  9/22/2004

  	
   

  	
  200401098

  	
   

  	
  intravascular flow
  restrictor

  
	
  Hong Kong

  	
   

  	
  12/24/2003

  	
   

  	
  03109386.0

  	
   

  	
  intravascular flow
  restrictor

  
	
  Hong Kong

  	
   

  	
  6/17/2003

  	
   

  	
  03104315.7

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Hong Kong

  	
   

  	
  3/12/2003

  	
   

  	
  03101775.6

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  Hong Kong

  	
   

  	
  9/17/2002

  	
   

  	
  02106792.5

  	
   

  	
  retrievable self
  expanding stent

  
	
  Hong Kong

  	
   

  	
  9/13/2002

  	
   

  	
  02106707.9

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Hong Kong

  	
   

  	
  11/16/2001

  	
   

  	
  01108087.6

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Hong Kong

  	
   

  	
  1/22/2002

  	
   

  	
  02100488.7

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  Hong Kong

  	
   

  	
  9/21/2000

  	
   

  	
  00105963.2

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  Hong Kong

  	
   

  	
   

  	
   

  	
  99104670.1

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  Hong Kong

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  India

  	
   

  	
  3/18/2005

  	
   

  	
  602/DEL/2005

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  India

  	
   

  	
  8/4/2004

  	
   

  	
  14471DEL/2004

  	
   

  	
  alignment member for delivering
  a non-symmetric device with a pre-defined orientation

  
	
  India

  	
   

  	
  7/12/2004

  	
   

  	
  1283/DEL/2004

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  

 

 

	
  India

  	
   

  	
  3/1/2004

  	
   

  	
  338/DEL/2004

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  India

  	
   

  	
  9/8/2003

  	
   

  	
  1114/DEL/2003

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  India

  	
   

  	
  9/8/2003

  	
   

  	
  1115/DEL/2003

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices 

  
	
  India

  	
   

  	
  5/7/2002

  	
   

  	
  IN/PCT/2002/00476/DEL

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  India

  	
   

  	
  3/12/2001

  	
   

  	
  1N/PCT/2002/00860/DEL

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  India

  	
   

  	
  3/12/2001

  	
   

  	
  00862/DEL

  	
   

  	
  retrievable self
  expanding stent

  
	
  India

  	
   

  	
  11/28/2000

  	
   

  	
  00452/DEL

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  India

  	
   

  	
  8/13/1999

  	
   

  	
  1106/de199

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  India

  	
   

  	
  9/30/1998

  	
   

  	
  2908de198

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  India

  	
   

  	
  9/30/1998

  	
   

  	
  2910/de198

  	
   

  	
  percutaneous catheter
  directed constricting occlusion device

  
	
  India

  	
   

  	
  12/5/2002

  	
   

  	
  2528/delnp/2004

  	
   

  	
  intravascular flow
  restrictor

  
	
  Indonesia

  	
   

  	
  3/18/2005

  	
   

  	
  P00200500145

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Indonesia

  	
   

  	
  8/31/2004

  	
   

  	
  W00200401861

  	
   

  	
  intravascular flow
  restrictor  

  
	
  Indonesia

  	
   

  	
  5/16/2001

  	
   

  	
  W00200202307

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  Indonesia

  	
   

  	
  3/12/2001

  	
   

  	
  W00200202305

  	
   

  	
  retrievable self
  expanding stent

  
	
  Indonesia

  	
   

  	
  3/12/2001

  	
   

  	
  W00200202306

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  Japan

  	
   

  	
  3/18/2005

  	
   

  	
  2005-078665

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Japan

  	
   

  	
  12/5/2002

  	
   

  	
  2003-572629

  	
   

  	
  intravascular flow
  restrictor

  
	
  Japan

  	
   

  	
  11/28/2000

  	
   

  	
  2001-539510

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  
	
  Japan

  	
   

  	
  5/16/2001

  	
   

  	
  2001-583635

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  Japan

  	
   

  	
  3/21/2001

  	
   

  	
  2001-570325

  	
   

  	
  retrievable self
  expanding stent

  
	
  Japan

  	
   

  	
  3/12/2001

  	
   

  	
  2001-570203

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  Japan

  	
   

  	
  9/1/1998

  	
   

  	
  2000-510380

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  Japan

  	
   

  	
  4/14/1997

  	
   

  	
  540871/97

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  
	
  Japan

  	
   

  	
  7/10/1995

  	
   

  	
  8-504395

  	
   

  	
  method of forming
  medical devices; intravascular occlusion devices

  
	
  Mexico

  	
   

  	
  3/16/2005

  	
   

  	
  PAa2005002928

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Mexico

  	
   

  	
  12/5/2002

  	
   

  	
  PAa2004008439

  	
   

  	
  intravascular flow
  restrictor

  

 

 

	
  Mexico

  	
   

  	
  5/16/2001

  	
   

  	
  PAa2002011196

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  New Zealand

  	
   

  	
  12/5/2002

  	
   

  	
  534953

  	
   

  	
  intravascular flow
  restrictor

  
	
  Singapore

  	
   

  	
  3/9/2005

  	
   

  	
  200502755-2

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  Singapore

  	
   

  	
  3/12/2001

  	
   

  	
  2002058691

  	
   

  	
  retrievable self
  expanding stent

  
	
  Sri Lanka

  	
   

  	
  12/5/2001

  	
   

  	
   

  	
   

  	
  intravascular flow
  restrictor

  
	
  Singapore

  	
   

  	
  12/5/2002

  	
   

  	
  13453

  	
   

  	
  intravascular flow
  restrictor

  
	
  South Africa

  	
   

  	
  3/14/2005

  	
   

  	
  2005/02143

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  South Africa

  	
   

  	
  12/5/2002

  	
   

  	
  2004/6757

  	
   

  	
  intravascular flow
  restrictor

  
	
  South Korea

  	
   

  	
  3/18/2005

  	
   

  	
  200522530

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  South Korea

  	
   

  	
  12/5/2002

  	
   

  	
  2004-7013649

  	
   

  	
  intravascular flow
  restrictor

  
	
  South Korea

  	
   

  	
  11/11/2002

  	
   

  	
  2002-7015106

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  
	
  South Korea

  	
   

  	
  3/12/2001

  	
   

  	
  2002-7012653

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  United States

  	
   

  	
  1/11/2005

  	
   

  	
  11/033233

  	
   

  	
  open structure sizing
  device

  
	
  United States

  	
   

  	
  3/19/2004

  	
   

  	
  10/804993

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  
	
  United States

  	
   

  	
  4/7/2003

  	
   

  	
  10/408805

  	
   

  	
  intravascular flow
  restrictor

  
	
  United States

  	
   

  	
  8/27/2002

  	
   

  	
  10/228230

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  
	
  United States

  	
   

  	
  5/19/2000

  	
   

  	
  09/574974

  	
   

  	
  method of forming
  medical devices: intravascular occulusion devices

  

 

5.                                       See Section 3.18.1(c) of
Schedule 3.18, below

 

6.                                       The Company
operates under the unregistered tradename “AGA Medical Corporation.”

 

7.                                       The Company
owns the following domain names:

 

Amplatzer.com

Agamedical.com

Occluder.com

 

Section 3.13.4

 

1.                                       See Section 3.18.1(c) of
Schedule 3.18, below

 

Section 3.13.5

 

1.                                       See Section 3.18.1(c) of
Schedule 3.18, below

 

 

Section 3.13.7

 

1.             As of July, 2005, all
current employees have signed employment agreements.

 

2.             There are several former
employees that never executed employment agreements, but were not actively
involved in research or product development. Those former employees are listed
below with their title and duties

 

	
  NAME

  	
   

  	
  TITLE/DUTIES

  
	
  Jacquie
  Brooking

  	
   

  	
  Complaints
  Coordinator; complaint processing, trend analysis, Regulatory reporting, and
  returned goods closing.

  
	
  William
  Liebesny

  	
   

  	
  IT/IS
  Manager; purchase of IT hardware, software, supplies, services and licensing.

  
	
  Nicole
  McKeon

  	
   

  	
  Marketing
  Communications Coordinator; generate, coordinate, revise and produce
  marketing materials.

  
	
  Greg
  Herr

  	
   

  	
  Clinical
  Data Analyst; develop and maintain clinical databases.

  
	
  Heidi
  Hitchcock

  	
   

  	
  Controller/IS
  Manager

  
	
  Sara
  Coon

  	
   

  	
  Regulatory
  Affairs Coordinator; assist with processing US and international regulatory
  submissions.

  
	
  Jamie
  Gabrielson

  	
   

  	
  Shipping
  Supervisors

  
	
  Gary
  Larson

  	
   

  	
   

  
	
  Zhiquan
  Huang

  	
   

  	
  Clinical
  Research Monitor; monitor clinical studies.

  
	
  Josh
  Rettig

  	
   

  	
  Quality
  Control Inspector; incoming materials, in-process and final product
  inspection.

  
	
  Carol
  Kramer

  	
   

  	
  Part-time
  Temporary Intern with Clinical Department.

  
	
  Tony
  Hull

  	
   

  	
  Part-time
  Administrative Temporaries for Clinical, Sales and Marketing, and Customer
  Service Departments.

  
	
  Grace
  Bury

  	
   

  	
   

  
	
  Kara
  Cibuzar

  	
   

  	
   

  
	
  Anne
  Marxen-Kuennen

  	
   

  	
  Field
  Clinical Specialists; provide technical, educational and sales support to
  U.S. customers.

  
	
  Danielle
  Charon

  	
   

  	
   

  
	
  Dylan
  Freund

  	
   

  	
  Part-time
  Production and Facilities/Maintenance Temporary.

  
	
  Matt
  Greenstein

  	
   

  	
  IT
  Assistant.

  
	
  Kelly
  Strohmayer

  	
   

  	
  Production
  Specialists

  
	
  Soyan
  Aing

  	
   

  	
   

  
	
  Yan
  Gao

  	
   

  	
   

  
	
  Bee
  Vue

  	
   

  	
   

  
	
  Bahao
  Liu

  	
   

  	
   

  
	
  Joe
  Johnson

  	
   

  	
  Shipping/Receiving
  Agent

  
	
  Laurel
  Ritter

  	
   

  	
  Receptionist

  
	
  Esther
  Fairbourne

  	
   

  	
  Clinical
  Data Administrator; data entry in clinical databases.

  

 

Section 3.13.8

 

1.             The Company provides certain
technical information that may be considered trade secrets to private companies
that assist in obtaining regulatory medical device approval in foreign
countries.

 

 

Schedule 3.14

Legal Compliance; Permits

 

1.             The FDA has subjected the
Company to its Application Integrity Policy (“AlP”). See Quintiles
Application Integrity Policy Audit Report for Company by Quintiles Consulting,
dated July 30, 2004.

 

2.             On November 8, 2004,
the Company’s premarket approval for the Amplatzer Muscular VSD Occluder device
was found to be incomplete by the FDA.

 

3.             At least one audit by AMTAC
has uncovered European non-compliance incidents. Each such incident has been
resolved to the satisfaction of AMTAC.

 

4.             The Company holds a
Humanitarian Device Exemption approval from the FDA for the PFO device. The FDA
is currently considering removing Humanitarian Device Exemption approval from
the Company and all other companies marketing PFO devices due to concerns over
off-label use of PFO devices by physicians. The Company is in ongoing
discussions with the FDA concerning alternatives to maintain its Humanitarian
Device Exemption approval for the PFO device.

 

5.             Facts and circumstances
discussed in the Fredrikson & Byron P.A. Report of Investigation for
AGA Medical Corporation, dated July 13, 2005.*

 

 

Schedule 3.15

Tax Matters

1.             See Schedule 3.6

 

2.             The Company is the subject
of an IRS audit of its 2000, 2001, and 2002 tax years that commenced in early
2004. The audit has been concluded, and the Company has received formal written
notice of the closure (which also states that any inquiries with regard to the
2003 tax year have been completed), dated March 9, 2005.*

 

3.             The Company believes there
may be some additional federal tax liability on excessive retained earnings.*

 

 

Schedule 3.16

 

Employee Benefit Plans

 

1.             AGA Medical Corporation
Severance Plan (adopted in May of 2004)

 

2.             AGA Medical Corporation
Severance Plan for Managing Directors (adopted in December 2004, amended February 2,
2005)

 

3.             Mass Mutual provides the AGA
Employee Savings Plan

 

4.             2004 Quarterly Incentive
Plan, as documented in a memorandum dated December 19, 2003. For each
regular, full-time or part-time employee, on the last day of each quarter, the
Company pays an incentive bonus based on annual base compensation then in
effect. The Company pro-rates bonuses payable to new hires who started
mid-quarter. This amount is entirely separate from the 2004 year-end bonus, which
is based on the financial performance of the Company and the individual
performance of eligible employees.

 

Further,
the Company paid a first quarter retention bonus for the first quarter of 2005
in an amount of 28% of each employee’s base compensation for the first quarter
of 2005. Another retention bonus of 28% of each employee’s base compensation
for the second quarter was paid for the second quarter of 2005. This is
anticipated to be the final retention bonus under this policy.

 

5.             Although it is not obligated
to do so, the Company has historically paid a year-end bonus to all employees.
This discretionary bonus is not formally documented. The following table sets
forth the average annual bonus for the annual periods indicated, expressed as a
percentage of base salary:

 

	
  2004

  	
   

  	
  20

  	
  %

  
	
  2003

  	
   

  	
  27

  	
  %

  
	
  2002

  	
   

  	
  25

  	
  %

  
	
  2001

  	
   

  	
  20

  	
  %

  
	
  2000

  	
   

  	
  18

  	
  %

  
	
  1999

  	
   

  	
  15

  	
  %

  
	
  1998

  	
   

  	
  11

  	
  %

  

 

6.             Medica Choice Select Master
Group Contract provides for health and dental

 

7.             The Hartford provides for
long-term disability, short-term disability, life insurance, and accidental
death & dismemberment

 

8.             Partial payment of Health
Club Membership fees

 

9.             Flexible spending account

 

 

10.           Reimbursement of up to
$5,000 per year for Company-related education

 

 

Schedule 3.17

 

Environmental Matters

 

1.             See Phase I
Environmental Site Assessment, dated December 22, 2002, by Braun Intertec
Corporation

 

 

Schedule 3.18

 

Contracts

 

Section 3.18.1(a)

 

1.             Supplier
Agreements with Cartika Medical, LSA LLC, Via Biomedical, Inc., Lake
Region Manufacturing, Fort Wayne Metals Corporation, Mendell Machine &
Manufacturing, Zeus Corporation, Steris Corporation*, Fluortek Inc.*,
Quan/Emerteq Medical, Noble-Met Limited*, and Johnson Printing and Packaging*

 

2.             Payments to the
following law firms: Briggs & Morgan; Fredrikson & Byron;
Maslon Edelman Borman & Brand; Robins Kaplan Miller & Ciresi;
Winthrop & Weinstine; Lindquist & Vennum; Parsinen Kaplan;
Sulloway & Hollis P.L.L.C.; and Bassford & Remele

 

3.             Manufacturing
and Supply Agreement between Company and Catheter & Disposal
Technology, Inc., dated June 21, 2004

 

4.             Purchasing
Contract Agreement between Company and Contour Plastics, Inc., dated December 15,
2003

 

5.             Forming Fixture
Samples Loan Agreement between Company and J & J Machine, Inc.,
dated May 1, 2003

 

6.             Agreement for
Calibration between Company and Palen/Kimball Company, dated August 1,
2001

 

7.             Agreement for
EU Authorized Representative Contract for Services between the Company and QFI,
dated August 7, 2003

 

8.             Non-disclosure
Agreement between Company and Medical Extrusion Technology*

 

9.             Non-disclosure
Agreement between Company and Medical Profiles & Engineering*

 

10.           Contract Sterilization Agreement, dated November 12,
1997, between the Company and Quality Sterilization Services, Inc.

 

11.           Rofin-Sinar, Inc. purchases pursuant to
standard terms and conditions set forth in the Company’s sample supplier
agreement.*

 

12.           Vendor payments to the following vendors: First
American Title Insurance (re: title insurance for the 9700 Schmidt Lake Road
facility), J.A. Price Agency Inc. (re: insurance), Bassett Creek Travel (no
contract, $10,000 deposit), Espiria (see Section 12 of Schedule 3.22), Medica (re:
employee benefit plan for health and dental insurance), and Federal Express (no
contract, only an account with negotiated rates)

 

 

13.           Engagement Agreement between Company and Manchester
Companies, Inc., dated as of July 14, 2004; Interim CFO Agreement
between Company and Manchester Companies, Inc., dated September 8,
2004.

 

14.           Payments to the receiver and the Special Litigation
Committee and their respective counsels

 

15.           Distribution Agreement and Confidential Sales
Agreements with:

 

BioAssist
Comercial Ltd, January 30, 2003

Baylis
Medical Company, December 19, 2003

Sutura
Ltd., May 21, 2003

Surgimed,
November 8, 2002

ab
medica s.p.a., January 2, 2004

KCPMED
Co., Ltd., November 6, 2002

ACE
Medical spol, s.r.o., September 20, 2002

EGAMED
Bratislava, spol. s.r.o., December 17, 2002

IZASA
SA, January 27, 2004

BVM
Medical Ltd, October 6, 2003

Hoang
Duc Pharmaceuticals Co., Ltd., February 23, 2003

Diseno
Y Desarrollo Medico, SA. DE. C.V., March 30, 2004

 

16.           General Consulting Agreement between Company and
Quintiles Consulting, dated January 13, 2004

 

17.           Confidential Disclosure Agreement between Company
and Dr. Ruben Quintero, Florida Perinatal Associates, dated September 28,
2004

 

18.           Confidential Disclosure Agreement between Company
and Robin Shandas, dated September 24, 2003

 

19.           Confidential Disclosure Agreement between Company
and Alignex, Inc., dated January 14, 2004

 

20.           See Section 3.18.1(m) of
this Schedule 3.18, below

 

21.           Courseware, Construction, and Services Agreement
between the Company and Medical Simulation Corp., dated March 2005.

 

22.           Manufacturing and Supply Agreement, between the
Company and Catheter & Disposables Technology, Inc., dated June 21,
2004

 

23.           Tooling & Equipment Agreement, between the
Company and Contour Plastics, Inc., undated and unsigned

 

 

24.           Exclusive Supply Agreement, between the Company and
LSA LLC, dated July 1, 1999

 

Section 3.18.1(c)

 

1.             Royalty Agreement, dated November 1,
2000, between Curtis Amplatz and Company

 

2.             Exclusive Licensing
Agreement, dated June 29, 2001, between Company and Microvena

 

3.             Royalty Agreement, dated June 29,
2001, between Company and Microvena

 

4.             Royalty Agreement, dated July 10,
1997, between Frank Kotula and Company

 

5.             Royalty Agreement, dated June 4,
1999, between Frank Kotula and Company

 

6.             Royalty Sharing Agreement,
dated July 19, 2001, between Frank Kotula and Company

 

7.             Royalty Agreement, dated April 22,
1996, between Company, Curtis Amplatz, and Frank Kotula

 

8.             Assignment from Microvena to
Company, dated July 3, 2001

 

Section 3.18.1(g)

 

1.             U.S. Bank
National Association established Letter of Credit Number SLCMMSP03734 in the
aggregate amount of $300,000 on behalf of the Company in the favor of Chubb &
Son, a division of Federal Insurance Company, dated June 20, 2005,
expiring March 19, 2006.

 

Section 3.18.1(i)

 

1.             See Section 3.18.1(a) of
this Section 3.18, above

 

2.             See Section 3.18.1(c) of
this Section 3.18, above

 

3.             See Section 3.18.1(m) of
this Schedule 3.18, below

 

Section 3.18.1(j)

 

1.             See Schedule 3.16, above

 

Section 3.18.1(k)

 

1.             See Schedule
3.25, below

 

 

Section 3.18.1(1)

 

1.             See Schedule 3.16, above

 

Section 3.18.1(m)

 

1.             Consulting
agreements with certain MDs: Zahid Amin*, David T. Balzer*, John L. Bass*,
Robert Beekman III*, Farhouch Berdjis*, Peter Block*, John D. Carroll, KakChen
Chan*, John Cheatham*, Makram Ebeid*, Jose A. Ettedgui*, Sheldon Goldberg*,
Ronald Grifka*, William Hellenbrand*, Ziyad Hijazi, Frank Ing*, Thomas K.
Jones*, John Lasala*, Daniel McCormick*, John Moore*, Charles Mullins*,
Hitendra Patel*, Wolfgang Radtke*, Albert Rocchini*, Carlos Ruiz*, Michael
Slack*, Richard Smalling, Michael Vance*, David Wax*, Thomas Zellers*, Peter
Hesslein, Charles Kleinman, Jamie Lohr, Michael Mooney, Jeffrey Saver, Norman
H. Silverman, Anna Tsirka, Edgar Pineda, Sherman Sorenson, Edward Bove, Irfan
Altafullah, Scott Schultz, Schunichi Homma, Timothy Tanke

 

2.             The following
physicians have worked for the Company: Bernard Meier, Evan M. Zahn, Michael
Landzberg, Emile Bacha, J. Kevin Harrison, Kimberly A. Krabill, Nathaniel
Sanderson, Phillip Moore, Brian Whisenant, Colin Cowley, William Torress

 

3.             Other
consulting agreements with Dorothee Aepplie, Steve Peterson, Cynthia
Herrington, David J. Maki*, Frank Caley*, Rachid Farouk Idriss*, Beatrice M.
Trembath, Brian P. Short*, Damon N. Struyk*, John G. Davenport, Qi Ling Cao*,
Acumen Healthcare Solutions*, Amtac Certification Services, Braun Intertec
Corp.*, American Security, BWBR Architects, Creative Data & Design,
Dashe & Thompson, Datamedical Corp.*, Chris Gassett*, Financial
Advisors LLC*, Florida Institute for Fetal*, Glen Itskovich, Nigel Key, Brian
T. Larkin, Kroll Associates Inc.*, MPLS Drafting Services, Inc.*,
Manchester, Michael Ferraro, Quintiles Medical Technology, RCRI, Regulatory &
Clinical Research*, Revis & Associates Inc., RLK-Kuusisto*, Shenehon
Company*, Celeste Culberth*, Ernst & Young*, Opus, Otis Elevator, EMI,
Marsden, Cramer Building Services, Midwest Maintenance, Randy’s Sanitation,
Ketchum Metz, David Balzer*, Diane Book*, Andrew Charles*, Karisa Coad*, Tom
Crosby*, Rima Dafer*, Victor Davila-Roman*, Nancy Futrell*, G&G Statistical
Consulting, Inc.*, Mark Galantowicz*, Deborah Gersony*, Larry Goldstein*,
David Gremmels*, James Grotta*, John Hermans*, Integra Clinical Solutions
Inc.*, Knickelbine Design*, Medanalytics Inc.*, Medical Technology*, Newsworthy
Communications*, David Overman*, Steven Roh*, Stephen Silberstein*, Craig
Stinar*, Nancy Stinar*, Frederick Taylor*, David Thaler*, David Tirschwell*,
Jonathan Tobis*,

 

4.             The Company has
relationships with the following: Softbrands Manufacturing, QC Inspection
Services, and Tompkins Bros.

 

5.             Employment agreements
with Moua, Olson, Peterson, Rhodes, Schwartzwald, Sierra, Spurbeck, Tate, Thao,
Thomas, Vang, Veltum-Dockter, Afremov, Ahlstrom, Bakken, Feig, Freund, Gardner,
Hall, Hammer, Ipsen, Jacobsen, Knapton, Lane, Lee, Locher, Moore, Morton,
Sandra Alexander, Daniel Amundson, Allison Ballou, Lydia Bilyk,

 

 

George
R. Bisker, Philip C. Bowman, John Brendza, Jacqueline Brooking, Mark Busch,
Neil L. Carter, Amy Chopp, Mark Cibuzar, Gail Cook, Bill Farrell, Dylan Freund,
Sara J. Gries, Steven D. Harrison, Dean Hensel, Dao Her, Yu-Xiang Hu, S. Lea
Hanley, Chad  Hunting, Amanda Johnson, Jennifer Kelly, Eric
Robert Kirscher, Kay Klatz, Serena Klein, Dale Krohn, Dale Krohn, Pahoua Lee,
Teng Lee, Linda Madden, Michael McKenzie, Julie Messer, Jackie Mitre, Brandon Morton,
Dale Nelson, Erik D. O’Green, Jana Oman, John Oslund, Jason Peik, Rachael
Pesta, Lori L. Rotzenberg, Patrick Russo, Barbara J. Schwankl, Kristin A.
Schwartz, Pa Thao, Suzanne Tummel, Xai Vang, Robert Wagner, Matthew Whaley,
Ying Xiong, Maren Yurick, James Zamora, Shanelle Zellinger-Fernandez

 

6.             Employment Agreement, dated
as of February 1, 1996, by and between the Company and Gougeon

 

7.             Employment Agreement, dated
as of November 1, 1995, by and between the Company and Michael Afremov

 

8.             Employment Agreement, dated
as of November 1, 2000, between Company and Michael Smithson

 

9.             Employment Agreement, dated
as of July 6, 2000, between the Company and Kenneth Lock

 

10.           Independent Contractor
Agreement between Company and Jeffrey Allan Miller dated August 1, 1995

 

11.           Consulting Agreement between
Company and Dr. Christoph Boosfeld dated January 1, 2004

 

12.           Consulting Agreement between
Company and Theodore Johnson, dated October 18, 2004

 

13.           See Section 3.13.7
of Schedule 3.13, above

 

14.           The Company has hired, and
has employment agreements with the following individuals:

 

	
  Name

  	
   

  	
  Hire Date

  
	
  Rolbiecki, Jerilynn

  	
   

  	
  07/11/2005

  
	
  Yang, Lou

  	
   

  	
  06/27/2005

  
	
  Burnside, Michael

  	
   

  	
  06/13/2005

  
	
  Young, Dick

  	
   

  	
  06/13/2005

  
	
  Yang, Junshu

  	
   

  	
  05/16/2005

  
	
  Yuhala, Kimberly J

  	
   

  	
  05/16/2005

  
	
  Bond, Judith

  	
   

  	
  04/18/2005

  
	
  Thome, Troy B.

  	
   

  	
  04/11/2005

  
	
  Pinor, Wendy S.

  	
   

  	
  03/14/2005

  
	
  Omer, Wesley W.

  	
   

  	
  03/02/2005

  
	
  Freilino, Jodi

  	
   

  	
  02/28/2005

  
	
  Palzer,
  Michael G.

  	
   

  	
  02/28/2005

  
	
  Tan,
  Susan

  	
   

  	
  01/28/2005

  
	
  Natzel,
  James M.

  	
   

  	
  01/10/2005

  
	
  Vogt,
  Kathleen

  	
   

  	
  01/10/2005

  
	
  Busch,
  Christine M.

  	
   

  	
  01/05/2005

  

 

 

Section 3.18.1(n)

 

1.             See  Section 3.18.1(a) of this Schedule
3.18, above

 

2.             See Section 3.18.1(m) of
this Schedule 3.18, above

 

Section 3.18.1(o)

Charitable
payments pursuant to the Confidential Settlement and Mutual General Release
Agreement, by and among Franck Gougeon, Michael Afremov, and Dr. Kurt
Amplatz, dated April 20, 2005.

 

 

Schedule 3.19

 

Affiliate Transactions

 

1.             Pursuant that certain
Confidential Agreement, dated as of November 28, 2004, Gougeon borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

2.             Pursuant that certain
Agreement, dated as of December 11, 2003, Gougeon borrowed $1,500,000, to
be repaid on demand by the Company any time after final resolution of Michael
Afremov v. Kurt Amplatz et al.

 

3.             Pursuant that certain
Confidential Agreement, dated as of August 19, 2004, Afremov borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

4.             Pursuant that certain
Agreement, dated as of September 3, 2003, Afremov borrowed $1,500,000, to
be repaid on demand by the Company any time after final resolution of Michael
Afremov v. Kurt Amplatz et al.

 

5.             Pursuant to that certain
Agreement, dated as of December 22, 2004, Afremov borrowed $5,000,000, to
be repaid on demand by the Company any time after final resolution of Michael
Afremov v. Kurt Amplatz et al.

 

6.             See Section 3.18.1(m) of
Schedule 3.18, above (re: Afremov and Gougeon Employment Agreements)

 

7.             Pursuant that certain
Confidential Agreement, dated as of April 25, 2005, Afremov borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

8.             Pursuant that certain
Confidential Agreement, dated as of May 18, 2005, Afremov borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

9.             Pursuant that certain
Confidential Agreement, dated as of June 18, 2005, Afremov borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

10.           Pursuant that certain
Confidential Agreement, dated as of July 18, 2005, Afremov borrowed
$2,000,000, to be repaid on demand by the Company any time after final
resolution of Michael Afremov v. Kurt Amplatz et
al.

 

 

Schedule 3.20

 

Customer and Supplier Lists

 

1.             See Section 13
of Schedule 3.8

 

2.             Top 20 Suppliers for 2002:

 

Minnesota
Extrusions

Foremost
Machining Co. Inc.

Frank
Kotula

Curtis
Amplatz

J.A.
Price Agency

LSA
LLC

Bassett
Creek Travel

Medica

Federal
Express

Accellent
Cardiology - Star Guide Corporation

Creative
Data and Design

Fort
Wayne Metals Corporation

Oppenheimer
Shareholder Services

Nikolai
Mersereau & Dietz

Cambridge
Apts. Inc.

US
Bank — AGA

Ernst &
Young LLP

B-Braun
Medical Inc.

Minuteman
Press

 

3.             Top 20 Suppliers for 2003:

 

Frank
Kotula

J.A.
Price Agency Inc.

Curtis
Amplatz

Cartika
Medical

Foremost
Machining Co., Inc.

Minnesota
Extrusions

Medica

University
of Minnesota

Bassett
Creek Travel

LSA
LLC

Federal
Express

Via
Biomedical, Inc.

Ernst &
Young, LLP

Cambridge
Apartments, Inc.

 

 

U.S.
Bank — AGA

Nikolai
Mersereau & Deitz

M2
Meeting Management

Cirks
Construction, Inc.

Minuteman
Express

DHL
Express

 

4.             Top 20 Suppliers for 2004

 

Cartika
Medical

J.A.
Price Agency, Inc.

Frank
Kotula

Curtis
Amplatz

Via
Biomedical, Inc.

Medica

Bassett
Creek Travel

Ernst &
Young, LLP

Federal
Express

U.S.
Bank — AGA

Mobile
Lock & Safe Co.

Hennepin
County Treasurer

Minuteman
Express

Cambridge
Apaitments, Inc.

Nikolai
Mersereau & Deitz

Quintiles
Consulting

LSA
LLC

Foremost
Machining Co., Inc.

Shenehon
Company

Mendell
Machine & Manuf.

 

5.             Top 20 Customers for 2002:

 

AB
Medica

BVM
Medical Limited

Since
Intl Development Ltd.

Med-Impulse

Baylis
Medical Company Inc.

Izasa
S.A.

Medtel
Australia

Thimar
Al-Jazirah Corporation

Hijazi
for Medical Supplies

Surgimed

Ace
Medical Spol, S.R.O.

LDS
Hospital

Deutsches
Herzzentrum Berlin

Institut
Jantung Negara SDN. B

 

 

St.
Louis Children’s Hospital

Mayo
Clinic

BioAssist
Comercial LTDA.

The
University of Chicago Hospital

Inselspital/Hopital
De L’ile

Egamed
Bratislava, Spol S RO

 

6.             Top 20 Customers for 2003

 

AB
Medica

BVM
Medical Limited

Since
Intl Development Ltd.

Med-Impulse

Baylis
Medical Company Inc.

Izasa
S.A.

Medtel
Australia

Ace
Medical Spol, S.R.O.

LDS
Hospital

Surgimed

Thimar
Al-Jazirah Corporation

Deutsches
Herzzentrum Berlin

Mayo
Clinic

BioAssist
Comercial LTDA.

St.
Louis Children’s Hospital

Hijazi
for Medical Supplies

Inselspital/Hopital
De L’ile

Institut
Jantung Negara SDN. B

The
University of Chicago Hospital

Egamed
Bratislava, Spol S RO

 

7.             Top 20 Customers for 2004

 

AB
Medica

BVM
Medical Limited

Since
Int’l Development Ltd.

Med-Impulse

Baylis
Medical Company Inc.

Izasa
S.A.

Hijazi
for Medical Supplies

Thimar
A1-Jazirah Corporation

Ace
Medical Spol, S.R.O.

Medtel
Australia

Surgimed

LDS
Hospital

Institut
Jantung Negara SDN. B

Deutsches
Herzzentrum Berlin

 

 

Egamed
Bratislava, Spol S RO

Inselspital/Hopital De L’ile

BioAssist Comercial LTDA

Mayo Clinic

The University of Chicago Hospital

St. Louis Children’s Hospital

 

 

Schedule 3.21

 

Employees

 

1.             Theodore
Johnson, former Controller of Company, resigned in September 2004.

 

2.             William Liebesny, former
IT/IS Manager, and a few of his key staff, have resigned or been dismissed. See Section 8 of Schedule 3.22.

 

3.             The Company has
terminated Rachael Pesta, Darin Nielson, and Bill Farrel.

 

 

Schedule 3.22

 

Litigation; Government Orders

 

1.             See Schedule
3.3

 

2.             See Section 3.13.2 of Schedule 3.13, above

 

3.             See Sections 2 and 3 of  Schedule 3.15

 

4.             See Section 3.23.3 of Schedule 3.23, below

 

5.             In March 1999,
the Company was named as a defendant in a patent infringement lawsuit by
Nitinol Medical Technology (NMT). NMT alleged that the Company was infringing
on U.S. Patent No. 5,108,420. In April 1999, the Company served its
response and counterclaims denying liability. In April 2001, the United
States District Court for the District of Massachusetts granted NMT’s motion to
stay all proceedings pending reexamination of the patent in question by the
United States Patent and Trademark Office and, in December 2003, the Court
dismissed the Company’s and NMT’s claims and counterclaim, without prejudice,
because the reexamination proceedings were still not complete. Based on the
reexamination proceedings, NMT re-filed its infringement suit in the District
of Massachusetts in December 2004. The Company filed a declaratory
judgment action in the United States District Court for the District of
Minnesota which has been transferred to the District of Massachusetts for
adjudication. The Company has asserted defenses and affirmative claims on both
invalidity and non-infringement grounds and believes it will prevail on the
merits. The parties have engaged in preliminary settlement discussions.

 

6.             The
University of Minnesota has approached the Company regarding possible
infringement of the University’s patent 6,077,281. The Company does not believe
that the Company’s patents infringe the ‘281 patent.

 

7.             The
Company was contacted by Dr. Paul S. Teirstein in November of 2004 of
possible infringement of his U.S. Patent 5,499,995 for a Body Passageway
Closure Apparatus. The Company does not believe that Dr. Teirstein’s
claims have merit.

 

8.             The
Company is currently involved in litigation with former employee William
Liebesny and Creative Data & Design. See Section 1 of Schedule 3.6. The Company is claiming that Liebesny fraudulently overcharged the
Company for computer and software equipment purchases, using Creative Data and
Design as the entity to perpetrate the fraud. In Liebesny’s November 1,
2004 counterclaim, Liebesny alleges breach of contract, unlawful dominion and
control of property, and conversion, and seeks a $50,000 penalty for violation
of the Minnesota Civil Liability for Theft Statute, damages in excess of $50,000,
and payment of costs and attorney’s fees. On July 20, 2005, the Hennepin

 

 

County
Attorney charged Liebesny with 10 felony counts of theft by swindle for his
allegedly illegal conduct towards the company.

 

9.             Rachael Pesta,
a former employee of the Company, has threatened to bring a defamation  action against the Company related to her
termination.

 

10.           Threatened Product Liability
Claims:

 

a.             Patient Koberl.
ASD. Right side arterial embolism. Austria. Strict liability. St. Paul
Travelers has reserved $450,950

 

b.             Physician
Cheatham. Muscular VSD. Death of clinical study patient. AGA not named, only Dr. Cheatham.

 

c.             Physician
Paolillo/Patient John Boxall. ASD (32mm). Embolized with surgical removal.
Plaintiffs counsel has sent an offer to settle for $25,000.00.

 

d.             Physician
Donnelly/Patient Abby Spector. ASD (18mm) Erosion, required recessitation,
neurological deficit, vision disturbances. Insurance company on notice of
possible products liability claim.

 

e.             Physician
Peart. PDA & 180 Degree Del Sys. Premature release of device.

 

f.              Physician
Ducas. ASD (26mm) Death. AGA served on 9/14/04.

 

11.           On or around November 17, 2004, the Company
received a Subpoena from the United 
States Attorney’s Office. A copy of the Subpoena has been provided to
the Investors.

 

12.           The Company has withheld payment on, and disputed
certain invoices related to, forensic 
services provided by a court-appointed computer forensic expert, Mark
Lanterman, and his former employer, Espiria. The Company believes that such
invoices are not payable because Mr. Lanterman has advised the Company
that certain amounts billed by Espiria were duplicated items or estimates,
rather than actual completed services. The Company  believes certain other invoices are not
payable because a subcontractor retained by Espiria, Counterpane, was violating
the terms of Counterpane’s contract with the Company. Mr. Lanterman and
Espiria are currently parties to litigation that arose based on a dispute
involving alleged improprieties by an Espiria executive, Mr. Lanterman’s
subsequent departure, and Mr. Lanterman’s formation of a separate entity,
Computer Forensic Services, which continued to do business for, and has been
paid by, the Company.

 

The
Company believes that Espiria’s current claims against the Company are
approximately $50,000.00. The Company’s accountants will assess the need for
any reserves.

 

 

Schedule 3.23

 

Product Warranties; Defects; Liability

 

Section 3.23.1

 

1.             See Schedule
3.22

 

2.             See Section 3.23.3
of this Schedule 3.23, below

 

Section 3.23.2

 

1.             The following are the
standard warranty terms in distributor contracts:

 

The
only warranties AGA makes with respect to Products are the description of
Products and “Instructions for Use” on shipping containers and documents, sales
and technical literature published by AGA, and the specific terms of an express
product warranty, if any, given by AGA in connection with the sale of
individual product units.

 

THE
EXCLUSIVE REMEDY FOR A PRODUCT THAT IS DEFECTIVE IS ITS REPAIR, REPLACEMENT OR
REPURCHASE, AS DESIGNATED BY AGA, EXCEPT IN RESPECT TO PERSONAL INJURIES
SUFFERED IN CONNECTION WITH THE PRODUCTS, BUT AGA DISCLAIMS LIABILITY FOR
INJURIES OR LOSSED CAUSED BY OR ASSOCIATED WITH USE OF THE PRODUCTS OTHERWISE
THAN IN STRICT ACCORDANCE WITH AGA’S INSTRUCTIONS AND USER MANUALS, OR PRODUCTS
THAT HAVE BEEN TAMPERED WITH OR DAMAGED.

 

AGA
DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED BUT NOT LIMITED TO THE
WARRANTIES OR MERCHANTIBILITY AND FITNESS FOR A PARTICULAR PURPOSE. AGA FURTHER
DISCLAIMS LIABILITY TO DISTRIBUTOR AND  ALL
OTHERS FOR ALL CONSEQUENTIAL, INCIDENTAL AND SPECIAL DAMAGES CAUSED BY OR IN
CONNECTION WITH THE PRODUCTS, THEIR USE OF MISUSE, AND THEIR PERFORMANCE OR
NON-PERFORMANCE.

 

Distributor
agrees that the price of the Products has been established on the basis of the
allocation of risk and liability expressed in this Paragraph 19, and by its
separate initialing of this Paragraph acknowledges that Distributor has
specifically reviewed and is fully aware of the provisions of this Paragraph
and assumes and accepts the allocation of risks expressed herein.

 

 

Section 3.23.3

 

1.             See Schedule 3.22

 

2.             In October 2004,
the Company became aware of a residue on certain delivery sheaths. During the
week of November 8, 2004, Company management determined that the residue
may require a recall. The Company notified the FDA on November 19, 2004
and initiated an official recall notice on November 22, 2004.

 

On
November 29, 2004, the Company became aware of a similar residue on
certain dilators. Shipments of products using the dilators were halted on December 1,
2004 and customers were instructed not to use any delivery systems utilizing
the dilator. On December 8, 2004, the Company initiated a full recall of
all dilators in the field.

 

The
recall was classified by the FDA as a Class II Recall. Almost 13,000
delivery systems worldwide were reported defective, with over 90% of the
reported units recovered and awaiting certified destruction. The company
remains in Backorder on approximately 800 units. The legitimacy and potential
materiality of any claims by customers have not yet been fully ascertained. The
Recall has been closed, or has closing paperwork pending, with all applicable
regulatory authorities.

 

3.             On November 28,
2004, a MedWatch Report was sent to the FDA regarding the death of an
81-year-old patient, possibly due to the contaminated delivery sheath described
in Item 2 above. The Company’s insurance broker has confirmed that the decedent’s
family has not yet brought any claims, and that the autopsy suggested death
from causes unrelated to the delivery sheath.*

 

 

Schedule 3.24

 

Insurance

 

1.             Philadelphia
Indemnity Ins. Co: Director & Officer, Employment Liability, Fiduciary
Liability in the amount of $5,000,000; Expires March 19, 2006; Policy
number PHSD126947

 

2.             Chubb / Federal
Insurance Company: Products Policy (Primary Layer) in the amount of $5,000,000;
Expires March 19, 2006; Policy number 7350-55-98 MIN

 

3.             Allied World
Assurance: Excess Products Policy (5 x/o 5) in the amount of $5,000,000;
Expires March 19, 2006; Policy number AW0199209

 

4.             Axis Specialty
Insurance Company: Excess Products Policy (10 x/o 10) in the amount of
$10,000,000; Expires March 19, 2006. Policy number AAU701428/01/2005

 

5.             Columbia
Casualty Company / CAN: Excess Products Policy (10 x/o 20) in the amount of
$10,000,000; Expires March 19, 2006. Policy number ADE2082665330-0

 

6.             Federal
Insurance Company: Automobile Coverage in the amount of $1,000,000; Expires March 19,
2006; Policy number (05) 7350-55-97

 

7.             Chubb/Federal
Insurance Company: Worker’s Compensation and Employer’s Liability Policy in the
amount of $1,000,000; Expires March 19, 2006; Policy number (06) 717034-45

 

8.             Chubb/Federal
Insurance Company: Non Products Excess and Umbrella Insurance in the amount of
$10,000,000; Expires March 19, 2006; Policy number 9363-15-35 MIN

 

9.             Chubb/Federal
Insurance Company: Personal Property $38,000,000; Business Interuption
$30,000,000; Building $20,627,000; General Liability $2,000,000; Employee
Benefits $1,000,000 / $3,000,000; (includes global extension); Expires March 19,
2006; Policy number 3579-50-33 MIN

 

10.           St. Paul Travelers: Crime Plus Policy, in the amount
of $1,000,000, Expires March 19, 2006; Policy number 104497124

 

11.           Landmark American Ins. Co.: Medical Professional
Liability Policy in the amount of $1,000,000 / $5,000,000; Expires February 2,
2006; Policy number LHM705853.

 

12.           The Company holds a key man life insurance policy on
the life of Franck Gougeon in the amount of $7,000,000 with Northwestern
Mutual, policy number 14900457.

 

 

Schedule 3.25

 

No Brokers

 

1.             Engagement Agreement, as of June 2004, between Goldsmith Agio Helms
Securities,  Inc. and Franck Gougeon.

 

 

Schedule 4.2

 

Authorization of Governmental
Authorities

 

1.             See Schedule 3.3

 

 

Schedule 4.3

 

Noncontravention

1.             See Schedule 3.3

 

 

Schedule 4.4

 

No Brokers

1.             See Schedule 3.25

 

 

SCHEDULE
5.3

 

1.             Authorization, execution,
delivery and performance of the Agreement by the Investors is contingent on the
issuance of a Government Order by the Court approving the same.  The consummation of the Contemplated Transactions
is contingent on the entry by the Court of the Final Order.

 

2.             A Certification and Report Form For Certain
Mergers and Acquisitions has been filed by the Investors with the U.S. Federal
Trade Commission and Department of Justice pursuant to the Hart-Scott-Rodino
Antitrust Improvements Act of 1976.  The
Investors received confirmation of early termination of the approval waiting
period for this application from the Federal Trade Commission on July 11,
2005.

 

3.             SEC Form D with respect to the offering to the
Investors.

 

 

SCHEDULE
10.2.2(d)

 

1.             In the matter of  Hutchinson
Technology, Inc. vs. Commissioner of Revenue — Case Nos. A04-1245,
A04-1247: Hutchinson Technology, Inc. (“Hutchinson”), sought to
avoid paying taxes on income generated by foreign subsidiaries.  The tax court denied its claims for refunds
of corporate franchise tax and Hutchinson appealed.  The issues on appeal were whether
Hutchinson’s foreign subsidiary, HTI Export, Ltd. (“HEX”), qualified as a
foreign operating corporation under Minnesota law and whether Hutchinson
“accrued” genuine “fees” from HEX for state tax purposes where Hutchinson
allocated a portion of its “indirect costs” to HEX for federal tax
purposes.  On June 9, 2005, the
Minnesota Supreme Court ruled in favor of Hutchinson.  The court’s ruling clears the way for the
Company to seek:  (a) recovery of up
to approximately $600,000 in refunds relative to income generated by its
foreign subsidiary, AGA Medical FSC, Inc., for FY2000 and FY2001 and
(b) application of approximately $800,000 in capital loss carry forward
attributable to AGA Medical FSC, Inc.

 

2.             Pursuant to the Settlement Agreement, the Company will
make a donation of $2,500,000 to a charity designated by, and in the name of,
Michael Afremov, and a donation of $2,500,000 to a new charitable entity to be
named after Kurt Amplatz, as well as a settlement payment of $2,500,000 to
Michael Afremov for expenses incurred in connection with the Litigation. To the
extent they are deductible, the charitable contributions and settlement payment
may result in savings of $1,900,000 and $950,000, respectively (assuming the
same 38% combined federal and state Effective Rate used to calculate deferred
tax assets).

 

3.             Payments from Chubb relative to the Litigation and the
NMT Dispute in the amount of approximately $3,300,000 and $500,000,
respectively, are expected.

 

4.             The amount, if any, by which
the Closing Date Cash Amount exceeds $58,500,000.Exhibit 10.1

 

 

AMENDED AND RESTATED CREDIT
AGREEMENT

 

consisting of a

 

$25,000,000

Revolving Credit
Facility,

 

and

 

$215,000,000 

Tranche B Term Loan
Facility

 

dated as of

 

April 28, 2006,

 

among

 

AGA Medical Corporation,

as Borrower

 

AGA Medical Holdings, Inc.

 

The Lenders Party Hereto
from Time to Time

Lehman Brothers Inc. and
Citigroup Global Markets Inc.,

as Joint Lead Arrangers
and Joint Bookrunners

Citigroup Global Markets
Inc.

as Syndication Agent

 

Lehman Commercial Paper
Inc.,

as Administrative Agent

 

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
   

  	
   

  
	
  ARTICLE I         Definitions

  	
  1

  
	
  SECTION 1.01.

  	
  Defined Terms

  	
  1

  
	
  SECTION 1.02.

  	
  Classification of Loans and Borrowings

  	
  26

  
	
  SECTION 1.03.

  	
  Terms Generally

  	
  26

  
	
  SECTION 1.04.

  	
  Accounting Terms; GAAP

  	
  26

  
	
  SECTION 1.05.

  	
  Specified Transactions

  	
  27

  
	
  SECTION 1.06.

  	
  Letter of Credit Amounts

  	
  27

  
	
  ARTICLE II        The
  Credits

  	
  27

  
	
  SECTION 2.01.

  	
  Loans and Commitments

  	
  27

  
	
  SECTION 2.02.

  	
  Loans and Borrowings

  	
  27

  
	
  SECTION 2.03.

  	
  Requests for Borrowings

  	
  28

  
	
  SECTION 2.04.

  	
  Swingline Loans

  	
  29

  
	
  SECTION 2.05.

  	
  Letters of Credit

  	
  30

  
	
  SECTION 2.06.

  	
  Funding of Borrowings

  	
  35

  
	
  SECTION 2.07.

  	
  Interest Elections

  	
  35

  
	
  SECTION 2.08.

  	
  Termination and Reduction of Commitments

  	
  37

  
	
  SECTION 2.09.

  	
  Repayment of Loans; Evidence of Debt

  	
  37

  
	
  SECTION 2.10.

  	
  Amortization of Tranche B Term Loans

  	
  38

  
	
  SECTION 2.11.

  	
  Prepayment of Loans

  	
  39

  
	
  SECTION 2.12.

  	
  Fees

  	
  41

  
	
  SECTION 2.13.

  	
  Interest

  	
  41

  
	
  SECTION 2.14.

  	
  Alternate Rate of Interest

  	
  42

  
	
  SECTION 2.15.

  	
  Increased Costs

  	
  42

  
	
  SECTION 2.16.

  	
  Break Funding Payments

  	
  43

  
	
  SECTION 2.17.

  	
  Taxes

  	
  44

  
	
  SECTION 2.18.

  	
  Payments Generally; Pro Rata Treatment; Sharing of
  Setoffs

  	
  45

  
	
  SECTION 2.19.

  	
  Mitigation Obligations; Replacement of Lenders

  	
  47

  
	
  SECTION 2.20.

  	
  Incremental Extensions of Credit

  	
  47

  
	
  ARTICLE III      Representations
  and Warranties

  	
  49

  
	
  SECTION 3.01.

  	
  Organization; Power

  	
  49

  
	
  SECTION 3.02.

  	
  Authorization; Enforceability

  	
  49

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 3.03.

  	
  Governmental Approvals; No Conflicts

  	
  49

  
	
  SECTION 3.04

  	
  Financial Condition; No Material Adverse Change

  	
  49

  
	
  SECTION 3.05.

  	
  Properties

  	
  50

  
	
  SECTION 3.06.

  	
  Litigation and Environmental Matters

  	
  50

  
	
  SECTION 3.07.

  	
  Compliance with Laws and Agreements

  	
  51

  
	
  SECTION 3.08.

  	
  Investment and Holding Company Status

  	
  51

  
	
  SECTION 3.09.

  	
  Taxes

  	
  51

  
	
  SECTION 3.10.

  	
  ERISA

  	
  52

  
	
  SECTION 3.11.

  	
  Disclosure

  	
  52

  
	
  SECTION 3.12.

  	
  Subsidiaries

  	
  52

  
	
  SECTION 3.13.

  	
  Insurance

  	
  52

  
	
  SECTION 3.14.

  	
  Labor Matters

  	
  52

  
	
  SECTION 3.15.

  	
  Solvency

  	
  52

  
	
  SECTION 3.16.

  	
  Senior Indebtedness

  	
  53

  
	
  SECTION 3.17.

  	
  Fraud and Abuse

  	
  53

  
	
  ARTICLE IV      Conditions

  	
  53

  
	
  SECTION 4.01.

  	
  Closing Date

  	
  53

  
	
  SECTION 4.02.

  	
  Each Credit Event

  	
  55

  
	
  ARTICLE V        Affirmative
  Covenants

  	
  56

  
	
  SECTION 5.01.

  	
  Financial Statements and Other Information

  	
  56

  
	
  SECTION 5.02.

  	
  Notices of Material Events

  	
  58

  
	
  SECTION 5.03.

  	
  Information Regarding Collateral

  	
  58

  
	
  SECTION 5.04.

  	
  Existence; Conduct of Business

  	
  59

  
	
  SECTION 5.05.

  	
  Payment of Obligations

  	
  59

  
	
  SECTION 5.06.

  	
  Maintenance of Properties

  	
  59

  
	
  SECTION 5.07.

  	
  Insurance

  	
  59

  
	
  SECTION 5.08.

  	
  Casualty and Condemnation

  	
  59

  
	
  SECTION 5.09.

  	
  Books and Records; Inspection and Audit Rights

  	
  59

  
	
  SECTION 5.10.

  	
  Compliance with Laws

  	
  60

  
	
  SECTION 5.11.

  	
  Use of Proceeds and Letters of Credit

  	
  60

  
	
  SECTION 5.12.

  	
  Additional Subsidiaries; Holdings

  	
  60

  

 

ii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 5.13.

  	
  Further Assurances

  	
  60

  
	
  SECTION 5.14.

  	
  Post Closing Matters

  	
  61

  
	
  ARTICLE VI      Negative
  Covenants

  	
  61

  
	
  SECTION 6.01.

  	
  Indebtedness; Certain Equity Securities

  	
  61

  
	
  SECTION 6.02.

  	
  Liens

  	
  63

  
	
  SECTION 6.03.

  	
  Fundamental Changes

  	
  64

  
	
  SECTION 6.04.

  	
  Investments, Loans, Advances, Guarantees and
  Acquisitions

  	
  65

  
	
  SECTION 6.05.

  	
  Asset Sales

  	
  67

  
	
  SECTION 6.06.

  	
  Sale and Leaseback Transactions

  	
  67

  
	
  SECTION 6.07.

  	
  Swap Agreements

  	
  68

  
	
  SECTION 6.08.

  	
  Restricted Payments; Certain Payments of
  Indebtedness

  	
  68

  
	
  SECTION 6.09.

  	
  Transactions with Affiliates

  	
  70

  
	
  SECTION 6.10.

  	
  Restrictive Agreements

  	
  71

  
	
  SECTION 6.11.

  	
  Amendment of Material Documents

  	
  72

  
	
  SECTION 6.12.

  	
  Interest Expense Coverage Ratio

  	
  72

  
	
  SECTION 6.13.

  	
  Leverage Ratio

  	
  73

  
	
  SECTION 6.14.

  	
  Intentionally Deleted

  	
  73

  
	
  SECTION 6.15.

  	
  Maximum Capital Expenditures

  	
  73

  
	
  ARTICLE VII     Events
  of Default

  	
  74

  
	
  SECTION 7.01.

  	
  Events of Default

  	
  74

  
	
  SECTION 7.02.

  	
  Borrower’s Right to Cure

  	
  77

  
	
  SECTION 7.03.

  	
  Exclusion of Immaterial Subsidiaries

  	
  77

  
	
  ARTICLE VIII    The
  Agents

  	
  78

  
	
  SECTION 8.01.

  	
  The Agents

  	
  78

  
	
  ARTICLE IX      Miscellaneous

  	
  79

  
	
  SECTION 9.01.

  	
  Notices

  	
  79

  
	
  SECTION 9.02.

  	
  Waivers; Amendments

  	
  80

  
	
  SECTION 9.03.

  	
  Expenses; Indemnity; Damage Waiver

  	
  82

  
	
  SECTION 9.04.

  	
  Successors and Assigns

  	
  84

  
	
  SECTION 9.05.

  	
  Survival

  	
  87

  
	
  SECTION 9.06.

  	
  Counterparts; Integration; Effectiveness

  	
  87

  

 

iii

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 9.07.

  	
  Severability

  	
  87

  
	
  SECTION 9.08.

  	
  Right of Setoff

  	
  87

  
	
  SECTION 9.09.

  	
  Governing Law; Jurisdiction; Consent to Service of
  Process

  	
  88

  
	
  SECTION 9.10.

  	
  WAIVER OF JURY TRIAL

  	
  88

  
	
  SECTION 9.11.

  	
  Headings

  	
  88

  
	
  SECTION 9.12.

  	
  Confidentiality

  	
  88

  
	
  SECTION 9.13.

  	
  Interest Rate Limitation

  	
  89

  
	
  SECTION 9.14.

  	
  USA Patriot Act

  	
  89

  
	
  SECTION 9.15.

  	
  Release of Collateral

  	
  89

  
	
  SECTION 9.16.

  	
  Amendment and Restatement

  	
  89

  

 

iv

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  Schedule 1.01

  	
  — Mortgaged Property

  
	
  Schedule 2.01

  	
  — Commitments

  
	
  Schedule 3.05

  	
  — Real Property

  
	
  Schedule 3.12

  	
  — Subsidiaries

  
	
  Schedule 3.13

  	
  — Insurance

  
	
  Schedule 4.01 (h) 

  	
  — Sources and
  Uses

  	 

	
  Schedule 5.14

  	
  — Post-Closing Matters

  
	
  Schedule 6.01

  	
  — Existing Indebtedness

  
	
  Schedule 6.02

  	
  — Existing Liens

  
	
  Schedule 6.04

  	
  — Existing Investments

  
	
  Schedule 6.06

  	
  — Sale Leaseback Properties

  
	
  Schedule 6.09

  	
  — Existing Transactions with Affiliates

  
	
  Schedule 6.10

  	
  — Existing Restrictions

  

 

	
  EXHIBITS:

  	
   

  
	
   

  	
   

  
	
  Exhibit A

  	
  — Form of Assignment and Assumption

  
	
  Exhibit B-l

  	
  — Form of Opinion of Ropes & Gray LLP

  
	
  Exhibit B-2

  	
  — Form of Opinion of The Holstein Law Firm

  
	
  Exhibit C

  	
  — Form of Collateral Agreement

  
	
  Exhibit D

  	
  — Form of Perfection Certificate

  
	
  Exhibit E

  	
  — Form of Borrowing Request

  
	
  Exhibit F

  	
  — Form of Interest Election Request

  

 

v

 

This AMENDED AND RESTATED CREDIT AGREEMENT (the “Agreement”),
dated as of April 28, 2006, among AGA MEDICAL CORPORATION, a Minnesota
corporation, (the “Borrower”) AGA MEDICAL HOLDINGS, INC., a Delaware
corporation (“Holdings”), LEHMAN COMMERCIAL PAPER INC., LEHMAN BROTHERS
COMMERCIAL BANK, BANK OF AMERICA, N.A., CITICORP USA, INC., WACHOVIA BANK,
NATIONAL ASSOCIATION, as lenders, and each of the other lenders party hereto
from time to time (individually a “Lender”, and, collectively, the “Lenders”)
LEHMAN BROTHERS INC. AND CITIGROUP GLOBAL MARKETS INC, as joint lead arrangers
and joint bookrunners (in such capacity, the “Arrangers”), CITIGROUP
GLOBAL MARKETS INC, as syndication agent (in such capacity, the “Syndication
Agent”) and LEHMAN COMMERCIAL PAPER INC., as administrative agent (in such
capacity, the “Administrative Agent”) amends and restates in its
entirety the Existing Credit Agreement (as defined below).

 

W  I  T
N  E  S  S  E  T  H:

 

WHEREAS, the Borrower, Holdings, Lehman Commercial Paper Inc., Citicorp
USA, Inc., Deutsche Bank Trust Company Americas, Wachovia Bank, National
Association, as lenders and the Administrative Agent are parties to the Credit
Agreement, dated as of July 28, 2005 (as amended, supplemented or modified
prior to the date hereof, the “Existing Credit Agreement”);

 

WHEREAS, the Borrower has requested that the Lenders amend and restate
the Existing Credit Agreement to, among other things, add a new tranche B term
loan thereto, increase the aggregate principal amount of available Revolving
Credit Loans to $25,000,000 and amend the financial covenants (including
deleting the maximum senior leverage ratio covenant). In connection therewith,
the Borrower intends to (i) repay the Term Loans (as defined in the
Existing Credit Agreement), together with accrued and unpaid interest thereon,
outstanding under the Existing Credit Agreement, (ii) pay a dividend to
Holdings (as defined herein), and (iii) pay fees and expenses incurred in
connection with the foregoing (the transactions described in the foregoing
being referred to collectively as the “Transactions”); and

 

WHEREAS, (a) this Agreement, on the terms and subject to the
conditions set forth herein, shall amend and restate the Existing Credit
Agreement in its entirety as of the Closing Date, (b) this Agreement shall
not constitute a novation of the obligations and liabilities existing under the
Existing Credit Agreement or evidence payment of all or any of such obligations
and liabilities or constitute a release of any of the liens or security interests
granted in connection therewith and (c) from and after the Closing Date,
the Existing Credit Agreement shall be of no further force or effect, except to
evidence the Obligations (as defined therein) incurred, the representations and
warranties made, liens and security interests granted and the actions or
omissions performed or required to be performed thereunder prior to the Closing
Date;

 

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

 

ARTICLE I

 

Definitions

 

SECTION 1.01.  Defined
Terms. As used in this Agreement, the following terms have the meanings
specified below:

 

“ABR”, when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Alternate Base Rate.

 

 

“Additional Lender” has the meaning set forth in Section 2.20.

 

“Additional Subordinated Debt” means unsecured Indebtedness of the
Borrower (that may be guaranteed by those Subsidiaries that are Loan Parties)
that (a) does not have a stated maturity date prior to the date that is
180 days after the Tranche B Term Loan Maturity Date, (b) does not require
any scheduled payment of principal (including pursuant to a sinking fund
obligation) or amortization prior to the date that is 180 days after the
Tranche B Term Loan Maturity Date, (c) is (and all guarantees with respect
thereto are) subordinated to the Obligations on terms (i) no less
favorable to the Lenders than the terms of the Senior Subordinated Notes or (ii) in
the case of high yield debt securities, customary for senior subordinated high
yield debt securities or as are reasonably satisfactory to the Administrative
Agent, (d) contains non-pricing terms (including covenants, events of
default, remedies, redemption provisions and sinking fund provisions) (i) no
less favorable to the Lenders than the terms of the Senior Subordinated Notes
taken as a whole or (ii) customary for senior subordinated high yield debt
securities and (e) bears a market rate of interest as determined by the
Borrower’s Board of Directors.

 

“Adjusted LIBO Rate” means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/100 of 1 %) equal to (a) the LIBO Rate for
such Interest Period multiplied by (b) the Statutory Reserve Rate.

 

“Administrative Agent” means Lehman Commercial Paper Inc., in
its capacity as administrative agent for the Lenders under the Loan Documents.

 

“Administrative Questionnaire” means an administrative
questionnaire in a form supplied by the Administrative Agent.

 

“Affiliate” means, with respect to a specified Person, any other
Person that directly, or indirectly through one or more intermediaries,
Controls, is Controlled by or is under common Control with the Person
specified.

 

“Agents” means the Administrative Agent, the Collateral Agent
and the Syndication Agent.

 

“Agreement” means the Existing Credit Agreement as amended and
restated by this Amended and Restated Credit Agreement and as the same may be
renewed, extended, modified, supplemented or amended from time to time.

 

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

 

“Applicable Percentage” means, with respect to any Revolving
Lender, the percentage of the aggregate Revolving Commitments represented by such
Lender’s Revolving Commitment. If the Revolving Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the
Revolving Commitments most recently in effect, giving effect to any assignments
that occur thereafter.

 

“Approved Fund” has the meaning assigned to such term in Section 9.04(b).

 

2

 

“Assignment and Assumption” means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04) and accepted by the Administrative
Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.

 

“Available Amount” means, the sum, without duplication, of:

 

(a) the sum (determined on a cumulative basis and
in no event less than zero) of the Borrower’s Portion of Excess Cash Flow for
all fiscal years ending after January 1, 2006, plus

 

(b) the amount of Net Proceeds actually received
by the Borrower from the issuance by Holdings of any Equity Interests (or
capital contribution in respect thereof) after the Original Closing Date that
was not (i) required to be applied to prepay Loans pursuant to Section 2.1l(c)(x) or
(ii) used to pay non-recurring cash charges or expenses in an aggregate
amount not to exceed $45,000,000 since the Original Closing Date incurred by
the Borrower and its Subsidiaries, plus

 

(c) the amount of Net Proceeds actually received
by the Borrower from the issuance after the Original Closing Date of Qualified
Holdings Debt that was not used to pay non-recurring cash charges or expenses
in an aggregate amount not to exceed $25,000,000 incurred by the Borrower and
its Subsidiaries, plus

 

(d) an amount equal to any returns (including
dividends, interest, distributions, returns of principal and profits on sale)
actually received by the Borrower or any of the Subsidiaries in cash in respect
of any Investments made after the Original Closing Date pursuant to Section 6.04(xvi),
minus

 

(e) the sum, without duplication, of (i) the
aggregate amount of Investments made after the Original Closing Date pursuant
to Section 6.04(xvi), (ii) the aggregate amount of Restricted
Payments made after the Original Closing Date pursuant to Section 6.08(a)(ix),
(iii) the aggregate amount of Net Proceeds of an IPO used to prepay,
redeem, defease, repurchase or otherwise retire the Senior Subordinated Notes
and (iv) the aggregate amount of payments made after the Original Closing
Date pursuant to Section 6.08(b)(iii) (other than such payments made
with proceeds of any Additional Subordinated Debt permitted by Section 6.01).

 

“Board” means the Board of Governors of the Federal Reserve
System of the United States of America.

 

“Borrower” has the meaning set forth in the preamble to this
Agreement.

 

“Borrower’s Portion of Excess Cash Flow” means, on any date from
and after January 1, 2007, the portion of Excess Cash Flow for the
immediately preceding full fiscal year of the Borrower for which financial
statements have been delivered pursuant to Section 5.01 that has not been,
or is not required to be, applied to prepay Loans pursuant to Section 2.1l(d).

 

“Borrowing” means (a) Loans of the same Class and Type
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) a
Swingline Loan.

 

3

 

“Borrowing Request” means a request by the Borrower for a
Borrowing in accordance with Section 2.03, provided that a written
Borrowing Request shall be substantially in the form of Exhibit E,
or such other form as shall be approved by the Administrative Agent.

 

“Business Day” means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed, provided that when used in connection with a
Eurodollar Loan, the term “Business Day” shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.

 

“Capital Expenditures” means, for any period (and without
duplication), (a) the additions to property, plant and equipment and other
capital expenditures of the Borrower and any of the Subsidiaries that are (or
would be) set forth in a consolidated statement of cash flows of the Borrower
for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by the Borrower and the Subsidiaries during such period; provided
that Capital Expenditures shall not include (i) expenditures to the extent
they are made with the proceeds of the issuance by Holdings of Equity Interests
(or capital contributions in respect thereof) after the Original Closing Date
to the extent not Otherwise Applied, Additional Subordinated Debt or Qualified
Holdings Debt, (ii) investments permitted under Section 6.04,
including Permitted Acquisitions, (iii) expenditures that constitute a
reinvestment of the Net Proceeds of any event described in clause (a) or (b) of
the definition of the term “Prepayment Event”, to the extent permitted by Section 2.1l(c),
and (iv) the purchase price of equipment purchased during such period to
the extent the consideration therefor consists of any combination of (x) used
or surplus equipment traded in at the time of such purchase and (y) the
proceeds of a concurrent sale of used or surplus equipment.

 

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

 

“Change in Control” means:

 

(a) the acquisition of record ownership by any
Person other than Holdings of any Equity Interests in the Borrower,

 

(b) prior to an IPO, the failure by the Permitted
Investors to own, directly or indirectly, beneficially or of record, Equity
Interests in Holdings representing a majority of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests in Holdings,

 

(c) after an IPO, (i) the acquisition of
ownership, directly or indirectly, beneficially or of record, by any Person or
group (within the meaning of the Securities Exchange Act of 1934, as amended,
and the rules of the SEC thereunder as in effect on the date hereof) of
Equity Interests in Holdings representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests in Holdings and (ii) the ownership, directly or indirectly,
beneficially or of record, by the Permitted Investors of Equity Interests in
Holdings representing in the aggregate a lesser percentage of the aggregate
ordinary voting power represented by the issued and outstanding Equity
Interests in Holdings than such Person or group,

 

4

 

(d) occupation of a majority of the seats (other
than vacant seats) on the Board of Directors of Holdings by Persons who were
not (i) nominated by the Board of Directors of Holdings, (ii) appointed
by directors so nominated or (iii) nominated by the Permitted Investors,
or

 

(e) the occurrence of a “Change of Control”, as
defined in any of the Senior Subordinated Notes Documents, any indenture or
other instrument, agreement of other document evidencing or governing any
Qualified Holdings Debt or any certificate of designations relating to the
Qualified Preferred Stock.

 

“Change in Law” means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender
or the Issuing Bank (or, for purposes of Section 2.15(b), by any lending
office of such Lender or by such Lender’s or the Issuing Bank’s holding
company, if any) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

 

“Charges” has the meaning set forth in Section 9.13.

 

“Class”, when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are Revolving
Loans, Tranche B Term Loans or Swingline Loans and, when used in reference to
any Commitment, refers to whether such Commitment is a Revolving Commitment or
a Tranche B Term Loan Commitment.

 

“CLO” has the meaning assigned to such term in Section 9.04(b).

 

“Code” means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended from time to time.

 

“Collateral” means any and all “Collateral”, as defined in any
applicable Security Document.

 

“Collateral Agent” means Lehman Commercial Paper Inc., in its
capacity as collateral agent for the Lenders under this Agreement and any
Security Document.

 

“Collateral Agreement” means the Guarantee and Collateral
Agreement among the Loan Parties and the Collateral Agent, substantially in the
form of Exhibit C.

 

“Collateral and Guarantee Requirement” means the requirement
that:

 

(a) the Collateral Agent shall have received from
each Loan Party either (i) a counterpart of the reaffirmation of the
Collateral Agreement duly executed and delivered on behalf of such Loan Party
or (ii) in the case of any Person that becomes a Loan Party after the
Closing Date, a supplement to the Collateral Agreement, in the form specified
therein, duly executed and delivered on behalf of such Loan Party;

 

(b) all outstanding Equity Interests of (i) the
Borrower and (ii) each Subsidiary owned directly by any Loan Party shall
have been pledged pursuant to the Collateral Agreement (except that the Loan
Parties shall not be required to pledge more than 65% of the outstanding voting
Equity Interests of any Foreign Subsidiary) and the Collateral Agent shall have
received

 

5

 

all certificates or other instruments representing such Equity
Interests, together with undated stock powers or other instruments of transfer
with respect thereto endorsed in blank;

 

(c) all Indebtedness of Holdings, the Borrower
and each Subsidiary that is owing to any Loan Party shall be evidenced by a
promissory note and shall have been pledged pursuant to the Collateral
Agreement, and the Collateral Agent shall have received all such promissory
notes, together with undated instruments of transfer with respect thereto endorsed
in blank;

 

(d) all documents and instruments, including
Uniform Commercial Code financing statements, required by law or reasonably
requested by the Collateral Agent to be filed, registered or recorded to create
the Liens intended to be created by the Collateral Agreement and perfect such
Liens to the extent required by the Collateral Agreement, shall have been
executed, filed, registered or recorded or delivered to the Collateral Agent
for filing, registration or recording;

 

(e) the Collateral Agent shall have received (i) counterparts
of a Mortgage (or, if applicable, an amendment thereto) with respect to each
Mortgaged Property duly executed and delivered by the record owner of such
Mortgaged Property, (ii) a policy or policies of title insurance issued by
a nationally recognized title insurance company insuring the Lien of each such
Mortgage as a valid first-priority Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by Section 6.02,
together with such endorsements, coinsurance and reinsurance as the Collateral
Agent or the Required Lenders may reasonably request, and such surveys,
appraisals, legal opinions and other documents as the Collateral Agent or the
Required Lenders may reasonably request with respect to any such Mortgage or
Mortgaged Property; and

 

(f) each Loan Party shall have obtained all
material consents and approvals required to be obtained by it in connection
with the execution and delivery of all Security Documents to which it is a
party, the performance of its obligations thereunder and the granting by it of
the Liens thereunder.

 

Notwithstanding anything to the contrary in this Agreement or any
Security Document, no Loan Party shall be required to pledge or grant security
interests in particular assets if, in the reasonable judgment of the
Administrative Agent or the Collateral Agent, the costs of creating or
perfecting such pledges or security interests in such assets (including any
mortgage, stamp, intangibles or other tax) are excessive in relation to the
benefits to the Lenders therefrom.

 

“Commitment” with respect to any Lender, each of the Tranche B
Term Loan Commitment, Revolving Credit Commitment and any Commitment in respect
of an Incremental Extension of Credit or any combination thereof (as the
context requires).

 

“Consolidated EBITDA” means, for any period, Consolidated Net
Income for such period plus

 

(a) without duplication and to the extent deducted in determining
such Consolidated Net Income for such period, the sum of: (i) (A) consolidated
interest expense of the Borrower and its subsidiaries for such period and (B) interest
expense of Holdings to the extent paid or payable in cash during such period
and financed by a Restricted Payment by the Borrower to the extent permitted
hereunder and funded from consolidated operating cash flow of the Borrower, (ii) (A) consolidated
income tax expense of the Borrower and its subsidiaries for such period and (B) income
tax expense of Holdings for such period to the extent paid in such period using
the proceeds of Restricted Payments

 

6

 

made by the
Borrower pursuant to clause (v) of Section 6.08(a), (iii) all
amounts attributable to depreciation and amortization expense of the Borrower
and its subsidiaries for such period, (iv) any non-cash charges for such
period (but excluding (A) any non-cash charge in respect of an item that
was included in Consolidated Net Income in a prior period and (B) any
non-cash charge that relates to the write-down or write-off of inventory), (v) any
fees and expenses made or incurred by Holdings, the Borrower and its
subsidiaries in connection with the Original Transactions and/or the
Transactions that are paid, accrued or reserved for within 180 days of the
consummation of the Original Transactions or the Transactions, as applicable, (vii) any
non-recurring fees, cash charges and other cash expenses (A) made or
incurred by the Borrower and its subsidiaries in connection with any Permitted
Acquisition, including severance, relocation and facilities closing costs, that
are paid, accrued or reserved for within 180 days of such transaction or (B) incurred
in connection with the issuance of Equity Interests or Indebtedness or the
extinguishment of Indebtedness, (viii) other cash expenses incurred during
such period in connection with a Permitted Acquisition to the extent that such
expenses are reimbursed in cash during such period pursuant to indemnification
provisions of any agreement relating to such transaction, (ix) fees paid
to any Sponsor or Sponsor Affiliate under Section 6.09(h), (viii) Consolidated
Net Income attributable to minority interests of a subsidiary (less the amount
of any mandatory cash distribution with respect to any minority interest other than
in connection with a proportionate discretionary cash distribution with respect
to the interest held by the Borrower or any subsidiary), (x) cash expenses
incurred during such period in connection with extraordinary casualty events to
the extent such expenses are reimbursed (or reasonably anticipated to be
reimbursed) in cash by insurance during such period (or in a subsequent period)
and (xi) non-recurring cash charges or expenses incurred by the Borrower and
its Subsidiaries, minus

 

(b) without duplication and to the extent included in determining
such Consolidated Net Income, (i) any cash payments made during such
period in respect of non-cash charges described in clause (a)(iv) taken in
a prior period and (ii) any non-cash items of income for such period, all
determined on a consolidated basis in accordance with GAAP, and

 

(c) (without duplication) plus unrealized losses and minus
unrealized gains in each case in respect of Swap Agreements, as determined in
accordance with GAAP.

 

“Consolidated Net Income” means, for any period, the net income
or loss of the Borrower and its subsidiaries for such period determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded from Consolidated Net Income (a) the income of any subsidiary to
the extent that the declaration or payment of dividends or other distributions
by such subsidiary of that income is not at the time permitted by a Requirement
of Law or any agreement or instrument applicable to such subsidiary, except to
the extent of the amount of cash dividends or other cash distributions actually
paid to the Borrower or any subsidiary during such period (unless the income of
any subsidiary receiving such dividend or distribution would be excluded from
Consolidated Net Income pursuant to this proviso), and (b) any gains or
losses attributable to sales of assets out of the ordinary course of business
and any extraordinary losses or gains. Notwithstanding the foregoing, (1) the
income of any Permitted Joint Venture that is not a subsidiary shall be
included in Consolidated Net Income during any four quarter period only to the
extent of the amount of cash dividends or other cash distributions of such
income actually paid to the Borrower or any subsidiary prior to the date
financial statements are required to be delivered pursuant to Section 5.01
(a) or (b) for the most recent fiscal period (unless the income of
the subsidiary receiving such dividend or distribution would be excluded from
Consolidated Net Income pursuant to this definition) and (2) for purposes
of calculating the “Available Amount”, Consolidated Net Income shall be
increased (without duplication) by the amount of cash dividends or other cash
distributions actually paid to the Borrower or any subsidiary (unless the income
of the subsidiary receiving such dividend or distribution would be excluded
from Consolidated Net Income pursuant to this definition) since the Original
Closing Date, to the extent not previously included therein.

 

7

 

“Contribution and Exchange Agreement” means the Contribution and
Exchange Agreement, dated as of July 28, 2005, among Holdings, the
Borrower and the shareholders of the Borrower listed on the signature pages thereto.

 

“Control” means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. “Controlling” and “Controlled” have meanings
correlative thereto.

 

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

 

“dollars” or “$” refers to lawful money of the United
States of America.

 

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

 

“Environmental Laws” means all laws (including the common law),
rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices or binding agreements issued, promulgated or entered into by or with
any Governmental Authority, relating in any way to the environment,
preservation or reclamation of natural resources, the presence, management,
Release or threatened Release of any Hazardous Material, or to health and
safety matters.

 

“Environmental Liability” means liabilities, obligations,
damages, claims, actions, suits, judgments, orders, fines, penalties, fees, expenses
and costs (including administrative oversight costs, natural resource damages
and medical monitoring, investigation or remediation costs), whether contingent
or otherwise, arising out of or relating to (a) compliance or
non-compliance with any Environmental Law, (b) the generation, use,
handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the Release
or threatened Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.

 

“Equity Interests” means shares of capital stock, 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 from the issuer thereof.

 

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

 

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

 

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

 

8

 

Plan, (f) the
incurrence by the Borrower or any of its ERISA Affiliates of any liability with
respect to the withdrawal or partial withdrawal from any Plan or Multiemployer
Plan or (g) the receipt by the Borrower or any ERISA Affiliate of any
notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA
Affiliate of any notice, concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.

 

“Eurodollar”, when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.

 

“Event of Default” has the meaning assigned to such term in Section 7.01.

 

“Excess Cash Flow” means, for any fiscal year, the sum (without
duplication) of:

 

(a) Consolidated Net Income for such fiscal year,
adjusted to exclude any gains or losses attributable to Prepayment Events; plus

 

(b) depreciation, amortization and other non-cash
charges or losses (including deferred income taxes) deducted in determining
such Consolidated Net Income for such fiscal year; plus

 

(c) the amount, if any, by which Net Working
Capital decreased during such fiscal year (except as a result of
reclassification of items from short-term to long-term); minus

 

(d) the sum of (i) any non-cash gains or
non-cash items of income included in determining Consolidated Net Income for
such fiscal year plus (ii) the amount, if any, by which Net Working
Capital increased during such fiscal year (except as a result of
reclassification of items from long-term to short-term); minus

 

(e) the amount of Capital Expenditures of the
Borrower and its subsidiaries in such fiscal year (except to the extent
attributable to the incurrence of Capital Lease Obligations or otherwise
financed by incurring Long-Term Indebtedness); minus

 

(f) the aggregate principal amount of Long-Term
Indebtedness repaid or prepaid by the Borrower and its subsidiaries during such
fiscal year, excluding (i) Indebtedness in respect of Revolving Loans and
Letters of Credit (unless there is a corresponding reduction in the aggregate
Revolving Commitments), (ii) Tranche B Term Loans prepaid pursuant to Section 2.11
(a), (c) or (d), and (iii) repayments or prepayments of Long-Term
Indebtedness financed by the incurrence of other Long-Term Indebtedness by a
Parent or any Loan Party or the issuance of Equity Interests (or capital
contributions in respect thereof) after the Original Closing Date to the extent
not Otherwise Applied; minus

 

(g) the amount of Restricted Payments made by a
Loan Party in such fiscal year pursuant to clauses (iii), (iv), (v), (vii),
(viii), (x), (xi), (xiii) and (xv) of Section 6.08(a); minus

 

(h) to the extent not deducted in the calculation
of Consolidated Net Income, the amount of Investments made by a Loan Party in
such fiscal year pursuant to clauses (i), (iv)(B), (v)(B), (xv) and (xvii) of Section 6.04;
minus

 

9

 

(i) cash Taxes paid in such fiscal year that did
not reduce Consolidated Net Income for such fiscal year; minus

 

(j) cash payments made during such fiscal year in
respect of non-cash charges that increased Excess Cash Flow in any prior fiscal
year.

 

“Excluded Taxes” means, with respect to the Administrative
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) income
or franchise taxes imposed on (or measured by) its net income by the United
States of America, or by the jurisdiction under the laws of which such
recipient is organized or in. which its principal office is located or, in the
case of any Lender, in which its applicable lending office is located, (b) any
branch profits taxes imposed by the United States of America or any similar tax
imposed by any other jurisdiction described in clause (a) above, (c) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Borrower under Section 2.19 (b)), any withholding tax that is
in effect and would apply to amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office), except to the extent that such Foreign Lender (or its
assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to any withholding tax pursuant to Section 2.17(a), and (d) any
withholding tax that is attributable to a Foreign Lender’s failure to comply
with Section 2.17(e).

 

“Existing Credit Agreement” as defined in the recitals hereto.

 

“Fair Market Value” means the value that would be paid by a
willing buyer to an unaffiliated willing seller in a transaction not involving
distress or necessity of either party, determined in good faith by the Board of
Directors, chief executive officer or chief financial officer of the Borrower.

 

“FCPA” means the Foreign Corrupt Practices Act and the
regulations promulgated thereunder, as amended from time to time.

 

“FCPA Claims” means all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments and suits of any kind or
nature that are asserted against, paid or payable by any Loan Party or any
Subsidiary thereof, in connection with non-compliance with FGPA and any other
related, applicable statute.

 

“Federal Funds Effective Rate” means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.

 

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

 

“Financial Performance Covenants” means the covenants of the
Borrower set forth in Sections 6.12 and 6.13.

 

“Foreign Lender” means any Lender that is organized under the
laws of a jurisdiction other than that in which the Borrower is located. For
purposes of this definition, the United States of

 

10

 

America, each
State thereof and the District of Columbia shall be deemed to constitute a
single jurisdiction.

 

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

 

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

 

“Governmental Authority” means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state 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.

 

“Guarantee” of or by any Person (the “guarantor”) means
any obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other obligation
of any other Person (the “primary obligor”) in any manner, whether
directly or indirectly, and including any obligation of the guarantor, direct
or indirect, (a) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness or other obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness or other obligation
of the payment thereof, (c) to maintain working capital, equity capital or
any other financial statement condition or liquidity of the primary obligor so
as to enable the primary obligor to pay such Indebtedness or other obligation
or (d) as an account party or applicant in respect of any letter of credit
or letter of guaranty issued to support such Indebtedness or obligation, provided
that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business. The amount of any Guarantee of any
guaranteeing person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which the Guarantee is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee.

 

“Hazardous Materials” means all explosive, radioactive,
infectious, chemical, biological, medical, hazardous or toxic materials,
substances, wastes or other pollutants, including petroleum or petroleum
byproducts, asbestos or asbestos-containing materials, polychlorinated
biphenyls, radon gas and all other materials, substances or wastes of any
nature regulated pursuant to any Environmental Law.

 

“Holdings” has the meaning set forth in the preamble to this
Agreement.

 

“Inactive Subsidiary” means a Subsidiary that (a) conducts
no business operations, (b) has total assets with a fair market value of
not more than $500,000 individually and not more than $1,000,000 in the
aggregate for all Inactive Subsidiaries and (c) has no Indebtedness
outstanding.

 

“Incremental Extensions of Credit” has the meaning set forth in Section 2.20.

 

“Incremental Facility Amendment” has the meaning set forth in Section 2.20.

 

“Incremental Facility Closing Date” has the meaning set forth in
Section 2.20.

 

“Indebtedness” of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid, (d) all
obligations of such Person under conditional sale

 

11

 

or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding trade accounts payable and accrued obligations
incurred in the ordinary course of business), (f) all obligations of
others secured by (or for which the holder of such obligations has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, but limited, in the event such secured obligations are
nonrecourse to such Person, to the fair value of such property, (g) all
Guarantees by such Person of the obligations of any other Person, (h) all
Capital Lease Obligations of such Person, (i) all obligations, contingent
or otherwise, of such Person as an account party or applicant in respect of
letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers’ acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
Notwithstanding the foregoing, the term “Indebtedness” shall not include
post-closing payment adjustments, earn-outs or non-compete payments to which
the seller in any Permitted Acquisition is or may become entitled or amounts
that any member of management, the employees or consultants of Holdings, the
Borrower or any of the Subsidiaries may become entitled to under any cash
incentive plan in existence from time to time.

 

“Indemnified Taxes” means Taxes other than Excluded Taxes.

 

“Indemnitee” has the meaning set forth in Section 9.03(b).

 

“Information” has the meaning set forth in Section 9.12.

 

“Interest Election Request” means a request by the Borrower to
convert or continue a Revolving Borrowing or a Tranche B Term Loan Borrowing in
accordance with Section 2.07, provided that a written Interest
Election Request shall be substantially in the form of Exhibit F,
or such other form as shall be approved by the Administrative Agent.

 

“Interest Expense Coverage Ratio” has the meaning set forth in Section 6.12.

 

“Interest Payment Date” means (a) with respect to any ABR
Loan (including a Swingline Loan), the last day of each March, June, September and
December and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of a Eurodollar Borrowing with an Interest Period of more than
three months’ duration, each day prior to the last day of such Interest Period
that occurs at intervals of three months’ duration after the first day of such
Interest Period.

 

“Interest Period” means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day in the calendar month that is one, two, three
or six months thereafter (or nine or twelve months thereafter if, at the time
of the relevant Borrowing, all Lenders participating therein agree to make an
interest period of such duration available), as the Borrower may elect, provided
that (a) if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business
Day, and (b) any Interest Period that commences on the last Business Day
of a calendar month (or on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period) shall end on the last
Business Day of the last calendar month of such Interest Period. For purposes
hereof, the date of a Borrowing initially

 

12

 

shall be the date
on which such Borrowing is made and thereafter shall be the effective date of
the most recent conversion or continuation of such Borrowing.

 

“IPO” means a bona fide underwritten initial public offering of
Equity Interests of Holdings after the Closing Date.

 

“ISP” means, with respect to any Letter of Credit, the “International
Standby Practices 1998” published by the Institute of International Banking Law &
Practice (or such later version thereof as may be in effect at the time of
Issuance).

 

“Issuer Document” means all applications for Letters of Credit
by the Borrower and all documents between the Issuing Bank and the Borrower
related to the issuance of such Letters of Credit.

 

“Issuing Bank” means Lehman Brothers Bank, FSB or a Lender designated
by the Borrower with the consent of the Administrative Agent and the Borrower
(which consent shall not be unreasonably withheld) and such Lender or such
other Lender designated as an “Issuing Bank” pursuant to Section 2.05(k).
The Issuing Bank may, in its discretion, arrange for one or more Letters of
Credit to be issued by Affiliates of the Issuing Bank, in which case the term “Issuing
Bank” shall include any such Affiliate with respect to Letters of Credit issued
by such Affiliate.

 

“LC Advance” has meaning set forth in Section 2.05(c).

 

“LC Disbursement” means a payment made by the Issuing Bank
pursuant to a Letter of Credit.

 

“LC Exposure” means, at any time, the sum of (a) the
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. For purposes of
computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.06.
For all purposes of this Agreement, if on any date of determination a Letter of
Credit has expired by its terms but any amount may still be drawn thereunder by
reason of the operation of Rule 3.14 of the ISP, such Letter of Credit
shall be deemed to be “outstanding” in the amount so remaining to be drawn. The
LC Exposure of any Revolving Lender at any time shall be its Applicable
Percentage of the aggregate LC Exposure at such time, “Lenders” means
the Persons listed on Schedule 2.01 and any other Person that shall have
become a party hereto pursuant to an Assignment and Assumption or an
Incremental Facility Amendment, other than any such Person that ceases to be a
party hereto pursuant to an Assignment and Assumption. Unless the context
otherwise requires, the term “Lenders” includes the Swingline Lender.

 

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

 

“Letter of Credit Expiration Date” means the date that is five
Business Days prior to the Revolving Maturity Date then in effect (or if such
day is not a Business Day, the next preceding Business Day).

 

“Leverage Ratio” means, on any date, the ratio of (a) Total
Indebtedness on such date to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters of the Borrower ended on such date (or, if
such date is not the last day of a fiscal quarter, ended on the last day of the
fiscal quarter of the Borrower most recently ended prior to such date).

 

13

 

“LIBO Rate” means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Telerate Page 3750 (or on any
successor or substitute page of such service, or any successor to or
substitute for such service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the “LIBO Rate” with respect to
such Eurodollar Borrowing for such Interest Period shall be the rate at which
dollar deposits for a comparable amount and for a maturity comparable to such
Interest Period are offered by the principal London office of the
Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period.

 

“Lien” means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset or other arrangement to provide priority or
preference with respect to such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party (other
than customary rights of first refusal and tag, drag and similar rights in
joint venture agreements (other than any such agreement in respect of any
Subsidiary)) with respect to such securities.

 

“Loan Documents” means this Agreement, the promissory notes, if
any, executed and delivered pursuant to Section 2.09 (e), any Incremental
Facility Amendment, the Collateral Agreement and the other Security Documents.

 

“Loan Parties” means Holdings, the Borrower, the Subsidiary Loan
Parties and each Permitted Joint Venture Loan Party.

 

“Loans” means the loans made by the Lenders to the Borrower
pursuant to this Agreement or an Incremental Facility Amendment.

 

“Long-Term Indebtedness” means any Indebtedness that, in
accordance with GAAP, constitutes (or, when incurred, constituted) a long-term
liability.

 

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

 

“Material Disposition” means the sale by the Borrower or any
Subsidiary of assets (including the capital stock of a Subsidiary or a business
unit) for aggregate consideration (including amounts received in connection
with post-closing payment adjustments, earn-outs and noncompete payments) of at
least $5,000,000.

 

“Material Indebtedness” means Indebtedness (other than the Loans
and Letters of Credit), or obligations in respect of one or more Swap
Agreements of any one or more of Holdings, the Borrower and the Subsidiaries in
an aggregate principal amount exceeding $10,000,000. For purposes of
determining Material Indebtedness, the “principal amount” of the obligations of
the Borrower or any

 

14

 

Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.

 

“Maximum Rate” has the meaning set forth in Section 9.13.

 

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

 

“Mortgage” means a mortgage, deed of trust, assignment of leases
and rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations. Each Mortgage shall be reasonably
satisfactory in form and substance to the Collateral Agent.

 

“Mortgaged Property” means, initially, each parcel of real
property and the improvements thereto owned by a Loan Party and identified on Schedule
1.01 and includes each other parcel of real property owned by a Loan Party
and improvements thereto with respect to which a Mortgage is granted pursuant
to Section 5.12 or 5.13.

 

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

 

“Net Proceeds” means, with respect to any event, (a) the
cash proceeds received in respect of such event including (i) any cash
received in respect of any non-cash proceeds (including any cash payments received
by way of deferred payment of principal pursuant to a note or installment
receivable or purchase price adjustment receivable or otherwise, but excluding
any interest payments), but only as and when received, (ii) in the case of
a casualty, insurance proceeds and (iii) in the case of a condemnation or
similar event, condemnation awards and similar payments, net of (b) the
sum of (i) all reasonable fees and out-of-pocket expenses paid to third
parties (other than Affiliates) in connection with such event, (ii) in the
case of a sale, transfer or other disposition of an asset (including pursuant
to a sale and leaseback transaction or a casualty or a condemnation or similar
proceeding), the amount of all payments required to be made as a result of such
event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event and (iii) the
amount, of all taxes paid (or reasonably estimated to be payable) and the
amount of any reserves established to fund liabilities reasonably estimated to
be payable, in each case during the year that such event occurred or the next
succeeding year and that are directly attributable to such event (as determined
reasonably and in good faith by a Financial Officer), provided that no
net proceeds calculated in accordance with the foregoing of less than $500,000
realized in a single transaction or series of related transactions shall
constitute Net Proceeds.

 

“Net Working Capital” means, at any date, (a) the consolidated
current assets of the Borrower and its subsidiaries as of such date (excluding
cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Borrower and its subsidiaries as of such date (excluding
current liabilities in respect of Indebtedness). Net Working Capital at any
date may be a positive or negative number. Net Working Capital increases when
it becomes more positive or less negative and decreases when it becomes less
positive or more negative.

 

“Non-Consenting Lender” has the meaning set forth in Section 9.02(b).

 

“Obligations” has the meaning assigned to such term in the
Collateral Agreement.

 

“Original Closing Date” means July 28, 2005.

 

15

 

“Original Transaction Documents” means the Stock Purchase
Agreement, the Contribution and Exchange Agreement, the Settlement Agreement,
the Research Agreement, the Stockholders Agreement and the other agreements to
be entered into in connection with the Original Transactions, all schedules,
exhibits and annexes to each of the foregoing and all side letters, instruments
and agreements affecting the terms of any of the foregoing or entered into in
connection therewith.

 

“Original Transactions” means “Transactions” as defined in the
Existing Credit Agreement.

 

“Other Taxes” means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies of the United States or any political subdivision thereof arising
from any payment made under any Loan Document or from the execution, delivery
or enforcement of, or from the filing or recording of or otherwise with respect
to the exercise by the Administrative Agent or the Lenders of their rights
under, any Loan Document.

 

“Otherwise Applied” means, with respect to any Net Proceeds, the
amount of such Net Proceeds that was (i) required to prepay the Loans
pursuant to Section 2.11 or (ii) otherwise previously applied under
the Loan Documents.

 

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

 

“Participant” has the meaning set forth in Section 9.04(c).

 

“Patriot Act” has the meaning set forth in Section 9.14.

 

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

 

“Perfection Certificate” means a certificate in the form of Exhibit D
or any other form approved by the Collateral Agent.

 

“Permitted Acquisitions” means any acquisition by the Borrower
or any Subsidiary Loan Party at least 80% of all outstanding Equity Interests
(other than directors’ qualifying shares or shares issued to foreign nationals
to the extent required by applicable law) in, all or substantially all the
assets of, or all or substantially all the assets constituting a division or
line of business of, a Person if (a) such acquisition was not preceded by,
or consummated pursuant to, a hostile offer (including a proxy contest), (b) no
Default has occurred and is continuing or would result therefrom, (c) after
giving effect to such acquisition, the Borrower and the Subsidiary Loan Party
shall have aggregate unused and available Revolving Commitments and
unrestricted cash and Permitted Investments of not less than $3,000,000, (d) such
acquisition and all transactions related thereto are consummated in accordance
in all material respects with all applicable laws, (e) all actions
required to be taken with respect to such acquired or newly formed Subsidiary
(if a Domestic Subsidiary) or assets (if held by a Domestic Subsidiary) to
cause such Person to become a Loan Party under Sections 5.12 and 5.13 shall
have been taken (or shall be taken promptly thereafter), (f) the Borrower
and the Subsidiaries are in compliance on a Pro Forma Basis with the Financial
Performance Covenants recomputed as of the last day of the most recently ended
fiscal quarter of the Borrower for which financial statements are available,
and (g) the Borrower has delivered to the Administrative Agent an officer’s
certificate to the effect set forth in clauses (a), (b), (c), (d), (e) and
(f) above, together with all relevant financial information for the Person
or assets to be acquired.

 

16

 

“Permitted Encumbrances” means:

 

(a) Liens imposed by law for taxes that are not
yet due or are being contested in compliance with Section 5.05;

 

(b) carriers’, warehousemen’s, mechanics’,
materialmen’s, repairmen’s and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not overdue by
more than 30 days or are being contested in compliance with Section 5.05;

 

(c) pledges and deposits made in the ordinary
course of business in compliance with workers’ compensation, unemployment
insurance and other social security laws or regulations;

 

(d) deposits to secure the performance of bids,
trade contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature;

 

(e) judgment liens in respect of judgments that
do not constitute an Event of Default under paragraph (k) of Section 7.01;

 

(f) easements, zoning restrictions,
rights-of-way, minor defects or irregularities of title and other similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not either
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary, in each case in any
material respect;

 

(g) landlords’ and lessors’ and other like Liens
in respect of rent not in default;

 

(h) any Liens shown on the title insurance
policies in favor of the Collateral Agent insuring the Liens of the Mortgages;
and

 

(i) leases or subleases which are subordinate to
the Lien of any Mortgage, provided that the term “Permitted Encumbrances”
shall not include any Lien securing Indebtedness.

 

“Permitted Investments” means:

 

(a) direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of acquisition
thereof;

 

(b) investments in commercial paper maturing
within 365 days from the date of acquisition thereof and having, at such date
of acquisition, a credit rating from S&P or Moody’s of at least’A2 or P2,
respectively;

 

(c) investments in certificates of deposit,
banker’s acceptances and time deposits maturing within 365 days from the date
of acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof that has a combined capital and surplus and undivided profits of not
less than $500,000,000;

 

17

 

(d) fully collateralized repurchase agreements
with a term of not more than 30 days  for
securities described in clause (a) above and entered into with a financial
institution satisfying the criteria described in clause (c) above; and

 

(e) investments in money market funds that comply
with the criteria set forth in SEC Rule 2a-7 under the Investment Company
Act of 1940, as amended, substantially all of whose assets are invested in
investments of the type described in clauses (a) through (d) above.

 

“Permitted Investors” means, collectively, (A) Welsh,
Carson, Anderson & Stowe IX, L.P., WCAS Capital Partners IV, L.P. and
its Sponsor Affiliates and (B) (i) Franck Gougeon and each of the
other directors, officers and employees of the Borrower who owned capital stock
of Holdings on the first date the Borrower became a wholly owned subsidiary of
Holdings; (ii) the spouses, ancestors, siblings, descendants (including
children or grandchildren by adoption) and the descendants of any of the
siblings of the Persons referred to in clause (i); (iii) in the event of
the incompetence or death of any of the Persons described in clauses (i) or
(ii), such Person’s estate, executor, administrator, committee or other
personal representative, in each case who at any particular date shall be the
beneficial owner or have the right to acquire, directly or indirectly, capital
stock of the Borrower or Holdings (or any other direct or indirect parent
company of the Borrower); (iv) any trust created for the benefit of the
Persons described in any of clauses (i) through (iii) or any trust
for the benefit of any such trust; or (v) any Person Controlled by any of
the Persons described in any of clauses (i) through (iv).

 

“Permitted Joint Venture” means any investment by which the
Borrower or any Subsidiary Loan Party acquires at least 10% but not more than
80% of the Equity Interests of any Person.

 

“Permitted Joint Venture Loan Party” means any Permitted Joint
Venture which (x) is a subsidiary of the Borrower or any Subsidiary Loan
Party and (y) satisfies the terms of the Collateral and Guarantee
Requirement.

 

“Permitted Security” means (a) common stock of Holdings or (b) Qualified
Preferred Stock, in each case (x) issued to the Permitted Investors for
cash or (y) issued to any other Person that made a direct or indirect
equity investment in the Borrower in connection with the Original Transactions.

 

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

 

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

 

“Prepayment Event” means:

 

(a) any sale, transfer or other disposition
(excluding pursuant to a sale and leaseback transaction permitted under Section 6.06)
of any property or asset of Holdings, the Borrower or any Subsidiary in excess
of $2,000,000 in any fiscal year, other than dispositions described in clauses
(a), (b), (c) and (d) of Section 6.05; or

 

(b) any casualty or other insured damage to, or
any taking under power of eminent domain or by condemnation or similar
proceeding of, any property or asset of Holdings, the Borrower or any
Subsidiary with a fair value immediately prior to such event equal to or
greater than $1,000,000; or

 

18

 

(c) the issuance by Holdings, the Borrower or any
Subsidiary of any Equity Interests, or the receipt by Holdings, the Borrower or
any Subsidiary of any capital contribution, other than (i) Permitted
Securities or any other capital contribution to Holdings by holders of
Permitted Securities (so long as such capital contribution is not made in
exchange for Equity Interests that are not Permitted Securities), (ii) any
issuance of directors’ qualifying shares, (iii) any issuance by the
Borrower or any Subsidiary of common Equity Interests to, or receipt of any
such capital contribution from, Holdings, the Borrower or any other Subsidiary,
(iv) any issuance to management, employees or consultants of Holdings, the
Borrower or any of the Subsidiaries under any employment or similar agreement,
stock option or stock purchase plan or benefit plan in existence from time to
time; (v) any issuance, the proceeds of which are used to fund a Permitted
Acquisition, (vi) any issuance, the proceeds of which are used to pay non-recurring
cash charges or expenses incurred by the Borrower and its Subsidiaries in an
aggregate amount not to exceed $45,000,000 since the Original Closing Date, (vii) an
IPO or any follow-on public offering or issuance or (viii) any issuance of
Qualified Preferred Stock, the proceeds of which are used to prepay, redeem,
defease, repurchase or otherwise retire any Senior Subordinated Notes or any
Sponsor Preferred Stock; or

 

(d) the incurrence by Holdings, the Borrower or
any Subsidiary of any Indebtedness, other than Indebtedness permitted under Section 6.01
or permitted by the Required Lenders pursuant to Section 9.02.

 

“Prime Rate” means the prime lending rate as set forth on the
British Banking Association Telerate Page 5 (or such other comparable page as
may, in the opinion of the Administrative Agent, replace such page for the
purpose of displaying such rate), as in effect from time to time; each change
in the Prime Rate shall be effective from and including the date such change is
publicly announced as being effective. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate actually available.

 

“Pro Forma Basis” means, for purposes of calculating the
Leverage Ratio or the Interest Expense Coverage Ratio for any period, that any
Specified Transaction that has been consummated in such period and the
following transactions in connection therewith shall be deemed to have occurred
as of the first day of such period:

 

(a) income statement items (whether positive or
negative) attributable to the property or Person subject to such Specified
Transaction, in the case of a Permitted Acquisition,

 

(b) any retirement of Indebtedness, and

 

(c) any Indebtedness incurred or assumed by
Holdings, the Borrower or any of their subsidiaries in connection therewith (or
in any Specified Transaction) and if such Indebtedness has a floating or
formula rate, it shall have an implied rate of interest for the applicable
period for purposes of this definition determined by utilizing the rate which
is or would be in effect with respect to such Indebtedness as at the relevant
date of determination;

 

provided
that the foregoing pro forma adjustments may be applied to any such test solely
to the extent that such adjustments are consistent with the definition of “Consolidated
EBITDA” and give effect to events (including cost savings) to the extent they (i) have
been certified by an officer of the Borrower (with reasonably detailed
supporting calculations) as (1) reasonably attributable to, or made possible
by, the transaction and (2) reasonably expected to have a continuing
impact on Holdings and its Subsidiaries or the Borrower and its Subsidiaries,
as applicable; (ii) are supportable and quantifiable by good faith
assumptions believed to be reasonable at the time made or (iii) for all
purposes other than determining the

 

19

 

“Revolving Loan
Applicable Rate” or the “Term Loan Applicable Rate”, as applicable, relate to
the business that is the subject of such Specified Transaction, and are
reasonably determined by the Borrower to be probable based upon specifically
identifiable actions to be taken within 12 months after the date of such
Specified Transaction, and, in each case are certified by a Financial Officer
(accompanied by reasonably detailed supporting evidence).

 

“Proposed Change” has the meaning set forth in Section 9.02(b).

 

“Qualified Holdings Debt” means unsecured Indebtedness of
Holdings or a Parent issued to Permitted Investors, including additional
unsecured Subordinated Indebtedness that (a) is not subject to any
Guarantee by the Borrower or any Subsidiary Loan Party, (b) does not
mature prior to the date that is 180 days after the Tranche B Term Loan
Maturity Date, (c) has no scheduled amortization or payments of principal
prior to such 180th day, (d) does not require any payments in cash of
interest or other amounts in respect of the principal thereof for at least four
(4) years from the date of issuance or incurrence thereof, and (e) has
subordination provisions and other non-pricing terms and conditions that are (i) no
less favorable to the Lenders than the analogous provisions of the Senior
Subordinated Notes Documents or (ii) customary for senior high yield debt
securities.

 

“Qualified Preferred Stock” means any Sponsor Preferred Stock
and any other preferred stock of Holdings that (a) does not require the
payment of cash dividends (it being understood that cumulative dividends shall
be permitted), (b) is not mandatorily redeemable pursuant to a sinking
fund obligation or otherwise prior to the date that is 180 days after the
Tranche B Term Loan Maturity Date (other than upon an event of default or
change in control, provided that any such payment is subordinated
(whether by contract or pursuant to the charter of Holdings or the certificate
of designations of such preferred stock) in right of payment to the Obligations
on the terms set forth in the certificate of incorporation of Holdings in
existence on the Closing Date or such other terms reasonably satisfactory to
the Administrative Agent), (c) contains no maintenance covenants, other
covenants materially adverse to the Lenders or remedies (other than voting
rights and rights relating to the constitution of the board of directors) and (d) is
convertible only into common equity of Holdings or securities that would
constitute Qualified Preferred Stock.

 

“Ratings Condition” means the Borrower shall have, as of the
most recent applicable determination date, a Moody’s corporate family rating of
B1 or better (with a stable outlook or better) and a S&P corporate credit
rating of BB- or better (with a stable outlook or better).

 

“Register” has the meaning set forth in Section 9.04(b).

 

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

 

“Release” means any release, spill, emission, leaking, dumping,
injection, pouring, deposit, disposal, discharge, dispersal, leaching or
migration into or through the environment or within or upon any building,
structure, facility or fixture.

 

“Required Lenders” means, at any time, Lenders having Revolving
Exposures, Tranche B Term Loans, Loans in respect of Incremental Extensions of
Credit, if any, and unused Commitments representing more than 50% of the
aggregate Revolving Exposures, outstanding Tranche B Term Loans, outstanding
Loans in respect of Incremental Extensions of Credit, if any, and unused Commitments
at such time.

 

20

 

“Requirement of Law” means, with respect to any Person, (i) the
charter, articles or certificate of organization or incorporation and bylaws or
other organizational or governing documents of such Person and (ii) any
statute, law, treaty, rule, regulation, order, decree, writ, injunction or
determination of any arbitrator or court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject.

 

“Research Agreement” means the Interim Research Agreement, dated
as of May 6, 2005, between the Borrower, Amplatz Research Agreement, Co.
and Dr. Kurt Amplatz.

 

“Restricted Payment” means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in Holdings, the Borrower or any Subsidiary, or any payment thereon
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancellation or termination of any Equity Interests in Holdings,
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such Equity Interests in Holdings, the Borrower or any Subsidiary.

 

“Revolving Available Credit” means, at any time, (a) the
then effective Revolving Commitments minus (b) the aggregate
Revolving Exposure at such time.

 

“Revolving Availability Period” means the period from and
including the Original Closing Date to but excluding the earlier of (a) the
Revolving Maturity Date and (b) the date of termination of the Revolving
Commitments.

 

“Revolving Commitment” means, with respect to each Lender, the
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit and Swingline Loans hereunder, expressed as
an amount representing the maximum possible aggregate amount of such Lender’s
Revolving Exposure hereunder, as such commitment may be (a) reduced from
time to time pursuant to Section 2.08 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04.
The initial amount of each Lender’s Revolving Commitment is set forth on Schedule
2.01 or in the Assignment and Assumption pursuant to which such Lender
shall have assumed its Revolving Commitment, as applicable. The aggregate
amount of the Lenders’ Revolving Commitments on the Closing Date is
$25,000,000.

 

“Revolving Exposure” means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender’s Revolving
Loans and its LC Exposure and Swingline Exposure at such time.

 

“Revolving Lender” means a Lender with a Revolving Commitment
or, if the Revolving Commitments have terminated or expired, a Lender with
Revolving Exposure.

 

“Revolving Loan” means a Loan made pursuant to clause (c) of
Section 2.01.

 

“Revolving Loan Applicable Rate” means, for any day with respect
to (a) any Revolving Loan that is an ABR Loan or Eurodollar Loan or (b) the
commitment fees payable hereunder in respect of the Revolving Commitments, the
applicable rate per annum set forth below under the caption “ABR Spread”, “Eurodollar
Spread” or “Commitment Fee Rate”, as applicable, in each case, based upon the
Leverage Ratio as of the most recent determination date, provided that
prior to the date of delivery to the Administrative Agent, pursuant to Section 5.01,
of the Borrower’s consolidated financial information for the Borrower’s fiscal
quarter ended June 30, 2006, the “Revolving Loan Applicable Rate” for
purposes of clauses (a) and (b) above shall be the applicable rate
per annum set forth below in Category 1.

 

21

 

	
  Leverage Ratio

  	
   

  	
  ABR

  Spread

  	
   

  	
  Eurodollar

  Spread

  	
   

  	
  Commitment

  Fee Rate

  	
   

  
	
  Category 1

  > 4.50x

  	
   

  	
  150 bps

  	
   

  	
  250 bps

  	
   

  	
  50 bps

  	
   

  
	
  Category 2

  > 4.00x and < 4.50x

  	
   

  	
  125 bps

  	
   

  	
  225 bps

  	
   

  	
  50 bps

  	
   

  
	
  Category 3

  > 3.00x and < 4.00x

  	
   

  	
  100 bps

  	
   

  	
  200 bps

  	
   

  	
  37.5 bps

  	
   

  
	
  Category 4

  < 3.00x

  	
   

  	
  75 bps

  	
   

  	
  175 bps

  	
   

  	
  37.5 bps

  	
   

  

 

For purposes of the foregoing, (a) the Leverage Ratio shall be
determined on a Pro Forma Basis as of the end of each fiscal quarter of the
Borrower based upon the Borrower’s consolidated financial statements delivered
pursuant to Section 5.01 (a) or (b), and (b) each change in the
Revolving Loan Applicable Rate resulting from a change in the Leverage Ratio
shall be effective during the period commencing on and including the date of
delivery to the Administrative Agent of such consolidated financial statements
indicating such change and ending on the date immediately preceding the
effective date of the next such change, provided that the Leverage
Ratio, for purposes of determining the Revolving Loan Applicable Rate, shall be
deemed to be in Category 1 (i) at any time that an Event of Default, has
occurred and is continuing or (ii) at the option of the Administrative
Agent or at the request of the Required Lenders if the Borrower fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.

 

“Revolving Maturity Date” means July 28, 2011.

 

“S&P” means Standard & Poor’s Ratings Group, Inc.

 

“SEC” means the Securities and Exchange Commission or any
Governmental Authority succeeding to any of its principal functions.

 

“Securities Purchase Agreement” means the Securities Purchase
Agreement dated as of July 28, 2005, among the Borrower, the Subsidiaries
listed therein and WCAS Capital Partners IV, L.P. in respect of the Senior
Subordinated Notes.

 

“Security Documents” means the Collateral Agreement, the
Mortgages and each other security agreement or other instrument or document
executed and delivered pursuant to Section 5.12 or 5.13 to secure any of
the Obligations.

 

“Senior Subordinated Notes” means the 10% Senior Subordinated
Notes due 2012 issued by the Borrower on July 28, 2005 in the aggregate
principal amount of $50,000,000 and the Indebtedness represented thereby.

 

“Senior Subordinated Notes Documents” means the Securities
Purchase Agreement and all other instruments, agreements and other documents
evidencing or governing the Senior Subordinated Notes or providing for any
Guarantee or other right in respect thereof.

 

22

 

“Settlement Agreement” means the Confidential Settlement and
Mutual Release Agreement, dated as of April 20, 2005, among Franck L.
Gougeon, Michael Afremov and Kurt Amplatz.

 

“Specified Interests” means any Equity Interests of Holdings
beneficially owned by Franck Gougeon and, solely with respect to Franck
Gougeon, Permitted Investors described in clauses (B)(ii), (iii), (iv) and
(v) of the definition thereof.

 

“Specified Property” means the property and improvements thereon
owned by the Borrower as of the Closing Date located at 682 Mendelssohn Avenue,
Golden Valley, Minnesota 55427.

 

“Specified Transactions” means (a) any Permitted
Acquisition, (b) any Material Disposition and (c) any proposed
incurrence of Indebtedness in respect of which the Interest Expense Coverage
Ratio or the Leverage Ratio is by the terms of this Agreement required to be
calculated on a Pro Forma Basis.

 

“Sponsor” means Welsh, Carson, Anderson & Stowe IX,
L.P.

 

“Sponsor Affiliate” means (i) each Affiliate of the Sponsor
that is neither an operating company nor a company controlled by an operating
company, (ii) each partner, officer, director, principal or member of the
Sponsor or any Sponsor Affiliate and (iii) any spouse, parent or lineal
descendant (including by adoption) of any of the foregoing who are natural
persons and any trust for the benefit of such persons.

 

“Sponsor Preferred Stock” means all preferred Equity Interests
of Holdings held by the Sponsor and any Sponsor Affiliate as of the Closing
Date, together with any accumulation, accretion or other increase in the amount
thereof pursuant to the terms thereof or the charter of Holdings.

 

“Statutory Reserve Rate” means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the bank serving as the
Administrative Agent is subject with respect to the Adjusted LIBO Rate, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board). Such reserve percentages shall include those
imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any
comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Stock Purchase Agreement” means the Amended and Restated Stock
Purchase Agreement, dated as of July 28, 2005, among the Sponsor, the
co-investors of the Sponsor listed on the signature pages thereto, Franck
L. Gougeon and the Borrower.

 

“Stockholders Agreement” means the Stockholders Agreement, dated
as of July 28, 2005, among the Sponsor, Franck L. Gougeon and the
Borrower.

 

“Subordinated Indebtedness” means, Indebtedness of the Borrower
or any Subsidiary that is contractually subordinated to the Obligations.

 

“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

 

23

 

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 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.

 

“Subsidiary” means any subsidiary of the Borrower, other than
any Permitted Joint Venture that is not a Permitted Joint Venture Loan Party.

 

“Subsidiary Loan Party” means any Domestic Subsidiary (other
than any Inactive Subsidiary for which the Borrower has not satisfied the
Collateral and Guarantee Requirement).

 

“Supermaiority Lenders” means Lenders having Revolving
Exposures, Tranche B Term Loans, Loans in respect of Incremental Extensions of
Credit, if any, and unused Commitments representing more than 75% of the
aggregate Revolving Exposures, outstanding Tranche B Term Loans, outstanding
Loans in respect of Incremental Extensions of Credit, if any, and unused
Commitments at such time.

 

“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 phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.

 

“Swingline Exposure” means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the aggregate
Swingline Exposure at such time.

 

“Swingline Lender” means Lehman Commercial Paper Inc., in its
capacity as lender of Swingline Loans hereunder.

 

“Swingline Loan” means a Loan made pursuant to Section 2.04.

 

“Taxes” means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.

 

“Term Loan Applicable Rate” means, for any day with respect to
any Tranche B Term Loan that is an ABR Loan or Eurodollar Loan, the applicable
rate per annum set forth below under the caption “ABR Spread” or ‘‘Eurodollar
Spread”, as applicable, in each case, based upon the Leverage Ratio as of the
most recent determination date, provided that prior to the date of
delivery to the Administrative Agent, pursuant to Section 5.01, of the
Borrower’s consolidated financial information for the Borrower’s fiscal quarter
ended June 30, 2006, the “Term Loan Applicable Rate” for purposes of the
foregoing shall be the applicable rate per annum set forth below in Category 1.

 

24

 

	
  Leverage

  Ratio

  	
   

  	
  ABR

  Spread

  	
   

  	
  Eurodollar

  Spread

  	
   

  
	
  Category 1

  >4.50x

  	
   

  	
  125 bps

  	
   

  	
  225 bps

  	
   

  
	
  Category 2

  >3.00x and < 4.50x

  	
   

  	
  100 bps

  	
   

  	
  200 bps

  	
   

  
	
  Category 3

  < 3.00x (and satisfaction of the Ratings
  Condition)

  	
   

  	
  75 bps

  	
   

  	
  175 bps

  	
   

  

 

For purposes of the foregoing, (a) the Leverage Ratio shall be
determined on a Pro Forma Basis as of the end of each fiscal quarter of the
Borrower based upon the Borrower’s consolidated financial statements delivered
pursuant to Section 5.01(a) or (b), and (b) each change in the
Term Loan Applicable Rate resulting from a change in the Leverage Ratio shall
be effective during the period commencing on and including the date of delivery
to the Administrative Agent of such consolidated financial statements
indicating such change and ending on the date immediately preceding the
effective date of the next such change, provided that the Leverage
Ratio, for purposes of determining the Term Loan Applicable Rate, shall be
deemed lo be in Category 1 (i) at any time that an Event of Default has
occurred and is continuing or (ii) at the option of the Administrative
Agent or at the request of the Required Lenders if the Borrower fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b), during the period from the
expiration of the time for delivery thereof until such consolidated financial
statements are delivered.

 

“Total Indebtedness” means, as of any date, an amount equal to (a) aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries at
such date minus (b) cash and Cash Equivalents owned by the Loan Parties on
such date in an aggregate amount not to exceed $25,000,000, determined on a
consolidated basis in accordance with GAAP.

 

“Tranche B Term Loan”: as defined in Section 2.01.

 

“Tranche B Term Loan Commitment”: as to any Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the
Borrower hereunder in a principal amount not to exceed the amount set forth
under the heading “Tranche B Term Loan Commitment” opposite such Lender’s name
on Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case
may be, in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The original aggregate amount of the Tranche B Term Loan
Commitments is $215,000,000.

 

“Tranche B Term Loan Lender”: each Lender that has a tranche B
Term Loan Commitment or is the holder of a Tranche B Term Loan.

 

“Tranche B Term Loan Maturity Date”: means April 28, 2013; provided,
that notwithstanding the foregoing, the Tranche B Term Loan Maturity Date will
be January 28, 2012 if both the Senior Subordinated Notes and the Sponsor
Preferred Stock have been not been repaid, redeemed, repurchased, defeased (on
terms and conditions satisfactory to the Administrative Agent) or otherwise retired
in full in one or more transactions otherwise permitted under this Agreement on
or prior to January 28, 2012.

 

25

 

“Tranche B Term Loan Percentage”: as to any Tranche B Term Loan
Lender at any time, the percentage which such Lender’s Tranche B Term Loan
Commitment then constitutes of the aggregate Tranche B Term Loan Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender’s Tranche B Term Loans then outstanding
constitutes of the aggregate principal amount of the Tranche B Term Loans then
outstanding).

 

“Transactions” has the meaning set forth in the preamble to this
Agreement.

 

“Type”, when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.

 

“Unreimbursed Amount” means all unpaid and matured reimbursement
or repayment obligations of the Borrower to the Issuing Bank with respect to
amounts drawn under Letters of Credit.

 

“wholly owned” means with respect to any Person, a subsidiary of
such Person all the outstanding Equity Interests of which (other than (x) directors’
qualifying shares and (y) shares issued to foreign nationals to the extent
required by applicable law) are owned by such Person and/or by one or more
wholly owned subsidiaries of such Person.

 

“Withdrawal Liability” means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in ER1SA.

 

SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class (e.g.,
a “Revolving Loan”) or by Type (e.g., a “Eurodollar Loan”) or by Class and
Type (e.g., a “Eurodollar Revolving Loan”). Borrowings also may be
classified and referred to by Class (e.g., a “Revolving Borrowing”)
or by Type (e.g., a “Eurodollar Borrowing”) or by Class and Type (e.g.,
a “Eurodollar Revolving Borrowing”).

 

SECTION 1.03. Terms Generally. The definitions
of terms herein shall apply equally to the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without
limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. Unless the context requires otherwise (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed
to include such Person’s successors and assigns, (c) the words “herein”, “hereof”
and “hereunder”, and words of similar import, shall be construed to refer to
this Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement, (e) the words “asset” and “property” shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights and (f) any reference herein to a Tranche B Term Loan
shall be construed to include the “Term Loans” (as defined in the Existing
Credit Agreement) to the extent such reference relates to the period prior to
the Closing Date.

 

SECTION 1.04. Accounting Terms; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP as in effect from time to time, provided
that if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision (including any definition) hereof to
eliminate the effect

 

26

 

of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision
(including any definition) hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.

 

SECTION 1.05. Specified Transactions. Notwithstanding
anything to the contrary herein, solely for purposes of determining the
Interest Expense Coverage Ratio and the Leverage Ratio, with respect to any
period during which any Specified Transaction occurs, such ratios shall be
calculated with respect to such period and such Specified Transaction (and all
other Specified Transactions that have been consummated during such period) on
a Pro Forma Basis.

 

SECTION 1.06. Letter of Credit Amounts. Unless otherwise
specified herein, the amount of a Letter of Credit at any time shall be deemed
to be the stated amount of such Letter of Credit in effect at such time; provided,
however, that with respect to any Letter of Credit that, by its terms or
the terms of any Issuer Document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the maximum stated amount of such Letter of Credit
after giving effect to all such increases, whether or not such maximum stated
amount is in effect at such time.

 

ARTICLE II

 

The Credits

 

SECTION 2.01. Loans and Commitments. Subject to the terms
and conditions set forth herein, each Lender agrees (a) to make term loans
to the Borrower on the Closing Date (each, a “Tranche B Term Loan”) in a
principal amount not exceeding such Lender’s Tranche B Term Loan Commitment and
(b)(i) on the Closing Date all Revolving Loans under (and as defined in)
the Existing Credit Agreement shall be deemed to be Revolving Loans outstanding
under this Agreement, (ii) the Revolving Commitments shall be increased
from $15,000,000 to $25,000,000 and (iii) to make Revolving Loans to the
Borrower from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender’s Revolving
Exposure exceeding such Lender’s Revolving Commitment. Within the foregoing
limits and subject to the terms and conditions set forth herein, the Borrower
may borrow, prepay and reborrow Revolving Loans. Amounts repaid or prepaid in
respect of Tranche B Term Loans may not be reborrowed.

 

SECTION 2.02. Loans and Borrowings.

 

(a) Each Loan (other than a Swingline Loan) shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their respective Commitments of the applicable
Class. The failure of any Lender to make any Loan required to be made by it
shall not relieve any other Lender of its obligations hereunder, provided
that the Commitments of the Lenders are several and no Lender shall be
responsible for any other Lender’s failure to make Loans as required.

 

(b) Subject to Section 2.14, each Revolving Borrowing and
Tranche B Term Loan Borrowing shall be comprised entirely of ABR Loans or
Eurodollar Loans as the Borrower may request in accordance herewith, provided
that all Borrowings made on the Closing Date must be made as ABR Borrowings.
Each Swingline Loan shall be an ABR Loan.

 

27

 

(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $500,000 and not less than $1,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $250,000 and not less than $500,000. Borrowings of more
than one Type and Class may be outstanding at the same time. There shall
not at any time be more than a total of 10 Eurodollar Borrowings outstanding.
Notwithstanding anything to the contrary herein, an ABR Revolving Borrowing or
Swingline Loan may be in an aggregate amount (i) that is equal to the
entire unused balance of the aggregate Revolving Commitments or (ii) that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e).

 

(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Revolving Maturity Date or the Tranche B Term Loan Maturity Date, as
applicable.

 

SECTION 2.03. Requests for Borrowings. To request a
Revolving Borrowing or Tranche B Term Loan Borrowing, the Borrower shall notify
the Administrative Agent of such request in writing (a) in the case of a
Eurodollar Borrowing, not later than 12:00 noon, New York City time, three
Business Days before the date of the proposed Borrowing or (b) in the case
of an ABR Borrowing, not later than 12:00 noon, New York City time, one
Business Day before the date of the proposed Borrowing, provided that
any such notice of an ABR Revolving Borrowing to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.05(e) may be given
not later than 10:00 a.m., New York City time, on the date of the proposed
Borrowing. Each written Borrowing Request shall specify the following
information in compliance with Section 2.02:

 

(i)        whether
the requested Borrowing is to be a Revolving Borrowing or a Tranche B Term Loan
Borrowing;

 

(ii)       the
aggregate amount of such Borrowing;

 

(iii)      the
date of such Borrowing, which shall be a Business Day;

 

(iv)      whether
such Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;

 

(v)       in the
case of a Eurodollar Borrowing, the initial Interest Period to be applicable
thereto, which shall be a period contemplated by the definition of the term “Interest
Period”; and

 

(vi)      the
location and number of the Borrower’s account to which funds are to be
disbursed, which shall comply with the requirements of Section 2.06.

 

If no election as
to the Type of Borrowing is specified, then the requested Borrowing shall be an
ABR Borrowing. If no Interest Period is specified with respect to any requested
Eurodollar Borrowing, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration. Promptly following receipt of a
Borrowing Request in accordance with this Section 2.03, the Administrative
Agent shall advise each Lender of the details thereof and of the amount of such
Lender’s Loan to be made as part of the requested Borrowing.

 

28

 

SECTION 2.04. Swingline Loans.

 

(a) Subject to the terms and conditions set forth herein, the
Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time during the Revolving Availability Period, in an aggregate principal amount
at any time outstanding that will not result in (i) the aggregate
principal amount of outstanding Swingline Loans exceeding $5,000,000 or (ii) the
aggregate Revolving Exposures exceeding the aggregate Revolving Commitments, provided
that the Swingline Lender shall not be required to make a Swingline Loan to
refinance an outstanding Swingline Loan. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow;
prepay and reborrow Swingline Loans.

 

(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request in writing, not later than 2:00 p.m.,
New York City time, on the day of a proposed Swingline Loan. Each such notice
shall be irrevocable and shall specify the requested date (which shall be a
Business Day) and amount of the requested Swingline Loan. The Administrative
Agent will promptly advise the Swingline Lender of any such notice received
from the Borrower. The Swingline Lender shall make each Swingline Loan
available to the Borrower by means of a credit to the general deposit account
of the Borrower maintained with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e), by remittance to the Issuing Bank) by 3:00 p.m.,
New York City time, on the requested date of such Swingline Loan.

 

(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 12:00 noon, New York City time, on any
Business Day require the Revolving Lenders to acquire participations on such
Business Day in all or a portion of the Swingline Loans outstanding. Such
notice shall specify the aggregate amount of Swingline Loans in which Revolving
Lenders will participate. Promptly upon receipt of such notice, the
Administrative Agent will give notice thereof to each Revolving Lender,
specifying in such notice such Lender’s Applicable Percentage of such Swingline
Loan or Swingline Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Lender’s
Applicable Percentage of such Swingline Loan or Swingline Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. Each Revolving Lender shall comply with
its obligation under this paragraph by wire transfer of immediately available
funds, in the same manner as provided in Section 2.06 with respect to
Loans made by such Lender (and Section 2.06 shall apply, mutatis  mutandis,
to the payment obligations of the Revolving Lenders), and the Administrative
Agent shall promptly pay to the Swingline Lender the amounts so received by it
from the Revolving Lenders. The Administrative Agent shall notify the Borrower
of any participations in any Swingline Loan acquired pursuant to this paragraph,
and thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear, provided that any
such payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.

 

29

 

SECTION 2.05. Letters of Credit.

 

(a) (i) General. On the Closing Date (i) all
Letters of Credit under the Existing Credit Agreement shall continue to be
Letters of Credit outstanding under this Agreement and (ii) subject to the
terms and conditions set forth herein, the Borrower may request the issuance of
Letters of Credit for its own account (or for the account of any of its
subsidiaries so long as the Borrower is a co-applicant), in a form reasonably
acceptable to the Administrative Agent and the Issuing Bank, at any time and
from time to time during the Revolving Availability Period. In the event of any
inconsistency between the terms and conditions of this Agreement and the terms
and conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the Issuing
Bank relating to any Letter of Credit, the terms and conditions of this
Agreement shall control.

 

(ii) The Issuing Bank shall not issue any Letter of Credit, if:

 

(A) the expiry date of such requested Letter of
Credit would occur more than one year after the date of issuance, unless the
Required Lenders have approved such expiry date; provided, however,
that any Letter of Credit with a one-year term may provide for the renewal
thereof for additional one-year periods (which in no event shall extend beyond
the expiry date referred to in (B) below); or

 

(B) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date, unless all the
Lenders have approved such expiry date.

 

(iii) The Issuing Bank shall not be under any obligation to issue
any Letter of Credit if:

 

(A) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit, or any law
applicable to the Issuing Bank or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
the Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which the Issuing
Bank is not otherwise compensated hereunder) not in effect on the Closing Date,
or shall impose upon the Issuing Bank any unreimbursed loss, cost or expense
which was not applicable on the Closing Date and which the Issuing Bank in good
faith deems material to it;

 

(B) except as otherwise agreed by the
Administrative Agent and the Issuing Bank, such Letter of Credit is in an
initial stated amount less than $25,000, in the case of a standby Letter of
Credit; or

 

(C) such Letter of Credit is to be denominated in
a  currency
other than Dollars.

 

(D) a default of any Lender’s obligations to fund
under Section 2.05(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered into
satisfactory arrangements with the Borrower or such Lender to eliminate the L/C
Issuer’s risk with respect to such Lender

 

(iv) The Issuing Bank shall not amend any Letter of Credit if the
Issuing Bank would not be permitted at such time to issue such Letter of Credit
in its amended form under the terms hereof.

 

30

 

(v) The Issuing Bank shall be under no obligation to amend any
Letter of Credit if:

 

(A) the Issuing Bank would have no obligation at
such time to issue such Letter of Credit in its
amended form under the terms hereof, or

 

(B) the beneficiary of such Letter of Credit does
not accept the proposed amendment to such Letter of Credit.

 

(b) Notice of Issuance, Amendment. Renewal. Extension: Certain
Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit), the
Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the Issuing
Bank) to the Issuing Bank and the Administrative Agent (reasonably in advance
of the requested date of issuance, amendment, renewal or extension) a notice
requesting the issuance of a Letter of Credit, or identifying the Letter of
Credit to be amended, renewed or extended, and specifying the date of issuance,
amendment, renewal or extension (which shall be a Business Day), the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c) of
this Section 2.05), the amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Bank, the Borrower also shall submit a letter of
credit application on the Issuing Bank’s standard form in connection with any
request for a Letter of Credit. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension, (i) the
LC Exposure shall not exceed $10,000,000 and (ii) the aggregate Revolving
Exposures shall not exceed the aggregate Revolving Commitments.

 

Promptly after receipt of any letter of credit application, the Issuing
Bank will confirm with the Administrative Agent (by telephone or in writing) that
the Administrative Agent has received a copy of such letter of credit
application from the Borrower and, if not, the Issuing Bank will provide the
Administrative Agent with a copy thereof. Unless the Issuing Bank has received
written notice from any Lender, the Administrative Agent or any Loan Party, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the
terms and conditions hereof, the Issuing Bank shall, on the requested date,
issue a Letter of Credit for the account of the Borrower (or the applicable
Subsidiary) or enter into the applicable amendment, as the case may be, in each
case in accordance with the Issuing Bank’s usual and customary business
practices.

 

The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim
of noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the Issuing Bank. The Borrower shall be
conclusively deemed to have waived any such claim against the Issuing Bank and
its correspondents unless such notice is given aforesaid.

 

(c) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the Lenders, the
Issuing Bank hereby grants to each Revolving Lender, and each Revolving Lender
hereby acquires from the Issuing Bank, a participation in such Letter of Credit
equal to such Lender’s Applicable Percentage of the aggregate amount available
to be drawn under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and unconditionally
agrees to pay to the Administrative Agent, for the account of the Issuing Bank,
such Lender’s Applicable Percentage of each LC Disbursement (an “LC Advance”)
made by the Issuing Bank

 

31

 

and not reimbursed by the
Borrower on the date due as provided in paragraph (e) of this Section 2.05,
or of any reimbursement payment required to be refunded to the Borrower for any
reason. Each Revolving Lender acknowledges and agrees that its obligation to
acquire participations pursuant to this paragraph in respect of Letters of
Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made
without any offset, abatement, withholding or reduction whatsoever.

 

(d) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse
such LC Disbursement by paying to the Administrative Agent an amount equal to
such LC Disbursement not later than 12:00 noon, New York, City time, on (i) the
date that such LC Disbursement is made, if the Borrower shall have received
notice of such LC Disbursement prior to 10:00 a.m., New York City time, on
such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 12:00 noon, New York City time, on
the Business Day that the Borrower receives such notice, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt,
or (ii) the Business Day immediately following the day that the Borrower
receives such notice, if such notice is not received prior to such time on the
day of receipt; provided that, the Borrower may, subject to the
conditions to borrowing set forth herein, request (and, if the Borrower fails
to reimburse such LC Disbursement when due, the Borrower shall be deemed to
have requested) in accordance with Section 2.03 or 2.04 that such LC
Disbursement be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower’s obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan (and the time for reimbursement of such
LC Disbursement shall automatically be extended to the Business Day following
such request or deemed request). If the Borrower fails to make such payment
when due, the Administrative Agent shall notify each Revolving Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender’s Applicable Percentage thereof. Promptly following
receipt of such notice, each Revolving Lender shall pay to the Administrative
Agent its Applicable Percentage of the payment then due from the Borrower, in
the same manner as provided in Section 2.06 with respect to Loans made by
such Lender (and Section 2.06 shall apply, mutatis  mutandis,
to the payment obligations of the Revolving Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Revolving Lenders. Promptly following receipt by the Administrative Agent
of any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse
the Issuing Bank, then to such Lenders and the Issuing Bank as their interests
may appear. Any payment made by a Revolving Lender pursuant to this paragraph to
reimburse the Issuing Bank for any LC Disbursement (other than the funding of
ABR Revolving Loans or a Swingline Loan as contemplated above) shall not
constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.

 

(e) Repayment of Participations.

 

(i) At any time after the Issuing Bank has made a payment under
any Letter of Credit and has received from any Lender such Lender’s LC Advance
in respect of such payment in accordance with Section 2.05(c), if the
Administrative Agent receives for the account of the Issuing Bank any payment
in respect of the related Unreimbursed Amount or interest thereon (whether
directly from the Borrower or otherwise, including proceeds of cash collateral
applied thereto by the Administrative Agent), the Administrative Agent will
distribute to such Lender its Applicable Percentage thereof (appropriately
adjusted, in the case of interest payments, to reflect the period of time
during which such Lender’s LC Advance was outstanding) in the same funds as
those received by the Administrative Agent.

 

32

 

(ii) If any payment received by the Administrative Agent for the
account of the Issuing Bank pursuant to Section 2.05(d) is required to be
returned (including pursuant to any settlement entered into by the Issuing Bank
in its discretion), each Lender shall pay to the Administrative Agent for the
account of the Issuing Bank its Applicable Percentage thereof on demand of the
Administrative Agent, plus interest thereon from the date of such demand to the
date such amount is returned by such Lender, at a rate per annum equal to the
Federal Funds Rate from time to time in effect. The obligations of the Lenders
under this clause shall survive the payment in full of the Obligations and the
termination of this Agreement.

 

(f) Obligations Absolute. The Borrower’s obligation to
reimburse LC Disbursements as provided in paragraph (d) of this Section 2.05
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement under any and all
circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit or this Agreement, or any term or
provision therein, (ii) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent or invalid in any respect or
any statement therein being untrue or inaccurate in any respect, (iii) payment
by the Issuing Bank under a Letter of Credit against presentation of a draft or
other document that does not comply with the terms of such Letter of Credit, or
(iv) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section 2.05,
constitute a legal or equitable discharge of, or provide a right of setoff
against, the Borrower’s obligations hereunder. Neither the Administrative
Agent, the Lenders nor the Issuing Bank, nor any of their Related Parties,
shall have any liability or responsibility by reason of or in connection with
the issuance or transfer of any Letter of Credit or any payment or failure to
make any payment thereunder (irrespective of any of the circumstances referred
to in the preceding sentence), or any error, omission, interruption, loss or
delay in transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document required to
make a drawing thereunder), any error in interpretation of technical terms or
any consequence arising from causes beyond the control of the Issuing Bank, provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential or punitive damages, claims in respect of which are hereby waived
by the Borrower to the extent permitted by applicable law) suffered by the
Borrower that are caused by the Issuing Bank’s failure to exercise care when
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof. The parties hereto expressly agree that,
in the absence of gross negligence or willful misconduct on the part of the
Issuing Bank (as finally determined by a court of competent jurisdiction), the
Issuing Bank shall be deemed to have exercised care in each such determination.
In furtherance of the foregoing and without limiting the generality thereof,
the parties agree that, with respect to documents presented that appear on
their face to be in substantial compliance with the terms of a Letter of
Credit, the Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further investigation,
regardless of any notice or information to the contrary, or refuse to accept
and make payment upon such documents if such documents are not in strict
compliance with the terms of such Letter of Credit.

 

Each Lender and the Borrower agree that, in paying any drawing under a
Letter of Credit, the Issuing Bank shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. None of the Issuing Bank, the Administrative
Agent, any of their respective Related Parties nor any correspondent,
participant or assignee of the Issuing Bank shall be liable to any Lender for (i) any
action taken or omitted in connection herewith at the request or with the
approval of the Lenders or the Required Lenders, as applicable; (ii) any
action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of

 

33

 

the acts or
omissions of any beneficiary or transferee with respect to its use of any
Letter of Credit; provided, however, that this assumption is not
intended to, and shall not, preclude the Borrower’s pursuing such rights and
remedies as it may have against the beneficially or transferee at law or under
any other agreement.

 

(g) Disbursement Procedures. The Issuing Bank shall,
promptly following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing Bank shall
promptly notify the Administrative Agent and the Borrower in writing of such
demand for payment and whether the Issuing Bank has made or will make an LC
Disbursement thereunder, provided that any failure to give or delay in
giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such
LC Disbursement in accordance with paragraph (e) of this Section 2.05.

 

(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans, provided
that, if the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (e) of this Section 2.05, then Section 2.13(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the account of
the Issuing Bank, except that interest accrued on and after the date of payment
by any Revolving Lender pursuant to paragraph (d) of this Section 2.05
to reimburse the Issuing Bank shall be for the account of such Lender to the
extent of such payment.

 

(i) Replacement of the Issuing Bank. The Issuing Bank may
be replaced at any time by written agreement among the Borrower, the
Administrative Agent and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b).
From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term “Issuing Bank” shall be
deemed to refer to such successor or to any previous Issuing Bank, or to such
successor and all previous Issuing Banks, as the context shall require. After
the replacement of the Issuing Bank hereunder, the replaced Issuing Bank shall
remain a party hereto and shall continue to have all the rights and obligations
of the Issuing Bank under this Agreement with respect to Letters of Credit
issued by it prior to such replacement, but shall not be required to issue
additional Letters of Credit.

 

(j) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower receives notice
from the Administrative Agent or the Required Lenders (or, if the maturity of
the Loans has been accelerated, Revolving Lenders with LC Exposure representing
greater than 50% of the aggregate LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Collateral Agent, in the name of the Collateral Agent and for the
benefit of the Lenders, an amount in cash equal to 105% of the LC Exposure as
of such date plus any accrued and unpaid interest thereon, provided
that the obligation to deposit such cash collateral shall become effective
immediately, and such deposit shall become immediately due and payable, without
demand or other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower described in paragraph (h) or (i) of Section 7.01.
The Borrower also shall deposit cash collateral pursuant to this paragraph as
and to the extent required by Section 2.1 l(b). Each such deposit shall be
held by the Collateral Agent as collateral for the payment and performance of
the obligations of the Borrower under this Agreement. The Collateral Agent
shall have

 

34

 

exclusive dominion
and control, including the exclusive right of withdrawal, over such account.
Other than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower’s risk and expense, such deposits
shall not bear interest. Interest or profits, if any, on such investments shall
accumulate in such account. Moneys in such account shall be applied by the
Administrative Agent to reimburse the Issuing Bank for LC Disbursements for
which it has not been reimbursed and, to the extent not so applied, shall be
held for the satisfaction of the reimbursement obligations of the Borrower for
the LC Exposure at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Lenders with LC Exposure
representing greater than 50% of the aggregate LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the Borrower
is required to provide an amount of cash collateral hereunder as a result of
the occurrence of an Event of Default, such amount (to the extent not applied
as aforesaid) shall be returned to the Borrower within three Business Days
after all Events of Default have been cured or waived.

 

(k) Additional Issuing Banks. The Borrower may at any time,
and from time to time, designate one or more additional Lenders to act as an
issuing bank under this Agreement with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld) and such Lender. Any Lender
designated as an issuing bank pursuant to this Section 2.05(k) shall
be deemed to be and shall have all the rights and obligations of an “Issuing
Bank” hereunder.

 

SECTION 2.06. Funding of Borrowings.

 

(a) Each Lender shall make each Loan to be made by it hereunder on
the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders, provided
that Swingline Loans shall be made as provided in Section 2.04. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request, provided that ABR
Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in Section 2.05(e) shall be remitted by the Administrative
Agent to the Issuing Bank.

 

(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed Borrowing that such Lender will not make
available to the Administrative Agent such Lender’s share of such Borrowing,
the Administrative Agent may assume that such Lender has made such share
available on such date in accordance with paragraph (a) of this Section 2.06
and may, in reliance upon such assumption and in its sole discretion, make
available to the Borrower a corresponding amount. In such event, if a Lender
has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount With interest thereof for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment
to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation or (ii) in the case of the Borrower, the interest
rate applicable to ABR Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender’s Loan
included in such Borrowing.

 

SECTION 2.07. Interest Elections.

 

(a) Each Revolving Borrowing and Tranche B Term Loan Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a Eurodollar Borrowing,

 

35

 

shall have an
initial Interest Period as specified in such Borrowing Request or as designated
by Section 2.03. Thereafter, the Borrower may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section 2.07. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing. This Section 2.07 shall not apply to
Swingline Borrowings, which may not be converted or continued.

 

(b) To make an election pursuant to this Section 2.07, the
Borrower shall notify the Administrative Agent of such election in writing by
the time that a Borrowing Request would be required under Section 2.03 if
the Borrower were requesting a Revolving Borrowing of the Type resulting from
such election to be made on the effective date of such election.

 

(c) Each written Interest Election Request shall specify the
following information in compliance with Section 2.02:

 

(i)        the
Borrowing to which such Interest Election Request applies and, if different
options are being elected with respect to different portions thereof, the
portions thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);

 

(ii)       the
effective date of the election made pursuant to such Interest Election Request,
which shall be a Business Day;

 

(iii)      whether
the resulting Borrowing is to be an ABR Borrowing or a Eurodollar Borrowing;
and

 

(iv)      if the
resulting Borrowing is a Eurodollar Borrowing, the Interest Period to be
applicable thereto after giving effect to such election, which shall be a
period contemplated. by the definition of the term “Interest Period”.

 

If any such
Interest Election Request requests a Eurodollar Borrowing but does not specify
an Interest Period, then the Borrower shall be deemed to have selected an
Interest Period of one month’s duration.

 

(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and of
such Lender’s portion of each resulting Borrowing.

 

(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an BAR Borrowing.

 

(f) Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing, (i) no outstanding Borrowing may be
converted to or continued as a Eurodollar Borrowing and (ii) unless
repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing at the
end of the Interest Period applicable thereto.

 

36

 

SECTION 2.08. Termination and Reduction of Commitments.

 

(a) Unless previously terminated, (i) the Tranche B Term Loan
Commitments shall terminate at 5:00 p.m., New York City time, on the
Closing Date and (ii) the Revolving Commitments shall terminate on the
Revolving Maturity Date.

 

(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments of any Class, provided that (i) each
reduction of the Commitments of any Class shall be in an amount that is an
integral multiple of $250,000 and not less than $500,000 and (ii) the
Borrower shall not terminate or reduce the Revolving Commitments if, after
giving effect to any concurrent prepayment of the Revolving Loans in accordance
with Section 2.11, the aggregate Revolving Exposures would exceed the
aggregate Revolving Commitments.

 

(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (b) of
this Section 2.08 at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by the Borrower pursuant to this Section 2.08 shall be irrevocable, provided
that a notice of termination of the Revolving Commitments delivered by the
Borrower may state that such notice is conditioned upon the effectiveness of
other credit facilities, in which case such notice may be revoked by the
Borrower (by notice to the Administrative Agent on or prior to the specified
effective date) if such condition is not satisfied. Any termination or
reduction of the Commitments of any Class shall be permanent. Each
reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.

 

SECTION 2.09. Repayment of Loans; Evidence of Debt.

 

(a) The Borrower hereby unconditionally promises to pay (i) to
the Administrative Agent for the account of each Lender the then unpaid
principal amount of each Revolving Loan of such Lender on the Revolving
Maturity Date, (ii) to the Administrative Agent for the account of each
Lender the then unpaid principal amount of each Tranche B Term Loan of such
Lender as provided in Section 2.10 and (iii) the then unpaid
principal amount of each Swingline Loan on the earlier of the Revolving
Maturity Date and the first date after such Swingline Loan is made that is the
15th or last day of a calendar month and is at least two Business Days after
such Swingline Loan is made; provided that on each date that a Revolving
Borrowing is made, the Borrower shall repay all Swingline Loans then
outstanding.

 

(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.

 

(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Class and
Type thereof and the Interest Period applicable thereto, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder for the account of the Lenders
and each Lender’s share thereof.

 

(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section 2.09 shall be prima
facie evidence of the existence and amounts of the obligations recorded
therein, provided that the failure of any Lender or the Administrative
Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrower to repay the Loans in accordance with the
terms of this Agreement.

 

37

 

(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Administrative Agent. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by
one or more promissory notes in such form payable to the order of the payee
named therein (or, if such promissory note is a registered note, to such payee
and its registered assigns).

 

SECTION 2.10. Amortization of Tranche B Term Loans.

 

(a) Subject to adjustment pursuant to paragraph (c) of this Section 2.10,
the Borrower shall repay Tranche B Term Loan Borrowings on each date set forth
below in the aggregate principal amount set forth opposite such date:

 

	
  Date

  	
   

  	
  Amount

  	
   

  
	
  June 30, 2006

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2006

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2006

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 30, 2007

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2007

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2007

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2007

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2008

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2008

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2008

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2008

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2009

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2009

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2009

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2009

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2010

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2010

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2010

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2010

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2011

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2011

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2011

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2011

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2012

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  June 30, 2012

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  September 30, 2012

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  December 31, 2012

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  March 31, 2013

  	
   

  	
  $

  	
  537,500

  	
   

  
	
  Tranche B Term Loan Maturity Date

  	
   

  	
  $

  	
  199,950,000

  	
   

  

 

38

 

(b) To the extent not previously paid, all Tranche B Term Loans
shall be due and payable on the Tranche B Term Loan Maturity Date.

 

(c) Any mandatory prepayment of a Tranche B Term Loan Borrowing
shall be applied (i) first, to reduce, in the direct order of
maturity, the scheduled repayments of the Tranche B Term Loan Borrowing to be
made pursuant to this Section 2.10 on the four consecutive scheduled
payment dates next following the date of such prepayment unless and until each
such scheduled repayment has been eliminated as a result of reductions
hereunder, and (ii) second, to reduce ratably the remaining
scheduled repayments of the then outstanding amounts thereof. Any optional
prepayment of a Tranche B Term Loan borrowing shall be applied as directed by
the Borrower to the Administrative Agent.

 

SECTION 2.11. Prepayment of Loans.

 

(a) The Borrower shall have the right at any time and from time to
time to prepay any Borrowing in whole or in part, subject to the requirements
of this Section 2.11 and Section 2.16.

 

(b) In the event and on such occasion that the aggregate Revolving
Exposures exceeds the aggregate Revolving Commitments, the Borrower shall
prepay Revolving Borrowings or Swingline Borrowings (or, if no such Borrowings
are outstanding, deposit cash collateral in an account with the Collateral
Agent pursuant to Section 2.05(j)) in an aggregate amount equal to such
excess.

 

(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of Holdings, the Borrower or any Subsidiary in respect
of any Prepayment Event, the Borrower shall, promptly after such Net Proceeds
are received by Holdings, the Borrower or such Subsidiary (and in any event not
later than the fifth Business Day after such Net Proceeds are received), prepay
Tranche B Term Loan Borrowings in an aggregate amount equal to:

 

(x) in the case of a prepayment event described
in clause (c) of the definition of the term “Prepayment Event”, (I) 50%
of such Net Proceeds if the Leverage Ratio at the end of the immediately
preceding fiscal quarter for which financial statements are available is
greater than 5.00 to 1.00, (II) 25% of such Net Proceeds if the Leverage
Ratio at the end of the immediately preceding fiscal quarter for which
financial statements are available is greater than 4.25 to 1.00 and less than
or equal to 5.00 to 1,00 and (III) none of such Net Proceeds if the
Leverage Ratio at the end of the immediately preceding fiscal quarter is less
than or equal to 4.25 to 1.00, and

 

(y) in the case of all other Prepayment Events,
100% of such Net Proceeds,

 

provided
that in the case of any event described in clause (a) or (b) of the
definition of the term “Prepayment Event”, if the Borrower shall deliver to the
Administrative Agent a certificate of a Financial Officer to the effect that
the Borrower and the Subsidiaries intend to apply the Net Proceeds from such
event (or a portion thereof specified in such certificate), within 365 days
after receipt of such Net Proceeds, to acquire or replace real property,
equipment or other tangible assets (excluding inventory other than inventory
ancillary to the acquisition or replacement tangible assets) to be used in the
business of the Borrower and the Subsidiaries, and certifying that no Default
has occurred and is continuing, then no prepayment shall be required pursuant
to this paragraph in respect of the Net Proceeds specified in such certificate,
except to the extent of any such Net Proceeds therefrom that have not been so
applied or contractually committed in writing by the end of such 365-day period
(and, if so contractually committed in writing but not applied prior to the end
of such 365-day period, applied within 90 days of the end of such period),
promptly after which time a prepayment shall be required in an amount equal to
such Net Proceeds that have not been so applied.

 

39

 

(d) Following the end of each fiscal year of the Borrower,
commencing with the fiscal year ending December 31, 2006, the Borrower
shall prepay Tranche B Term Loan Borrowings in an aggregate amount equal to:

 

(x) the excess of (A) 50% of Excess Cash
Flow over (B) prepayments of Tranche B Term Loans under Section 2.11 (a) during
such fiscal year (other than prepayments with the proceeds from sales of
Permitted Securities, an IPO and Qualified Holdings Debt) for any fiscal year
for which the Leverage Ratio at the end of such fiscal year is greater than
4.50 to 1.00,

 

(y) the excess of (A) 25% of Excess Cash
Flow over (B) prepayments of Tranche B Term Loans under Section 2.1l(a) during
such fiscal year (other than prepayments with the proceeds from sales of
Permitted Securities, an IPO and Qualified Holdings Debt) for any fiscal year
for which the Leverage Ratio at the end of such fiscal year is less than or
equal to 4.50 to 1.00 and greater than 4.00 to 1.00, and

 

(z) none of Excess Cash Flow for any fiscal year
for which the Leverage Ratio at the end of such fiscal year is less than or
equal to 4.00 to 1.00.

 

Each prepayment pursuant to this paragraph shall be made within five
Business Days of the date on which financial statements are delivered pursuant
to Section 5.01 with respect to the fiscal year for which Excess Cash Flow
is being calculated (and in any event within 95 days after the end of such
fiscal year).

 

(e) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall determine in accordance with Section 2.10(c) the
Borrowing or Borrowings to be prepaid and shall specify such determination in
the notice of such prepayment pursuant to paragraph (f) of this Section 2.11.

 

(f) The Borrower shall notify the Administrative Agent (and, in
the case of prepayment of a Swingline Loan, the Swingline Lender) in writing of
any prepayment hereunder (i) in the case of prepayment of a Eurodollar
Borrowing, not later than 12:00 noon, New York City time, three Business Days
before the date of prepayment, (ii) in the case of prepayment of an ABR
Borrowing, not later than 12:00 noon, New York City time, one Business Day
before the date of prepayment or (iii) in the case of prepayment of a
Swingline Loan, not later than 2:00 p.m., New York City time, on the date
of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to
be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment, provided that, if a notice
of optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.08,
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.08. Promptly following receipt of any
such notice (other than a notice relating solely to Swingline Loans), the
Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of
a mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied
by accrued interest to the extent required by Section 2.13 but shall in no
event include premium or penalty.

 

40

 

SECTION 2.12. Fees.

 

(a) The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a commitment fee, which shall accrue at the Revolving
Loan Applicable Rate on the average daily unused amount of each Revolving
Commitment of such Lender during the period from and including the Original
Closing Date to but excluding the date on which the aggregate Revolving
Commitments terminate. Accrued commitment fees shall be payable in arrears in
respect of the Revolving Commitments, on the last Business Day of March, June, September and
December of each year and on the date on which the Revolving Commitments
terminate, commencing on the first such date to occur after the Original
Closing Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). For purposes of computing commitment
fees with respect to Revolving Commitments, a Revolving Commitment of a Lender
shall be deemed to be used to the extent of the outstanding Revolving Loans and
LC Exposure of such Lender (and the Swingline Exposure of such Lender shall be
disregarded for such purpose).

 

(b) The Borrower agrees to pay (i) to the Administrative
Agent for the account of each Revolving Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at the same
Revolving Loan Applicable Rate used to determine the interest rate applicable
to Eurodollar Revolving Loans (minus 0.125% per annum) on the average daily
amount of such Lender’s LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Original Closing Date to but excluding the later of the date on which such
Lender’s Revolving Commitment terminates and the date on which such Lender
ceases to have any LC Exposure, and (ii) to the Issuing Bank a fronting
fee, which shall accrue at a rate equal to 0.125% per annum on the average
daily amount of the LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Original Closing Date to but excluding the later of the date of termination of
the Revolving Commitments and the date on which there ceases to be any LC
Exposure, as well as the Issuing Bank’s standard fees with respect to the
issuance, amendment, renewal or extension of any Letter of Credit or processing
of drawings thereunder. Participation fees and fronting fees shall be payable
on the last Business Day of March, June, September and December of
each year, commencing on the first such date to occur after the Original
Closing Date, provided that all such fees shall be payable on the date
on which the Revolving Commitments terminate and any such fees accruing after
the date on which the Revolving Commitments terminate shall be payable on
demand. Any other fees payable to the Issuing Bank pursuant to this paragraph
shall be payable within 10 days after demand. All participation fees and
fronting fees shall be computed on the basis of a year of 360 days and shall be
payable for the actual number of days elapsed (including the first day but
excluding the last day).

 

(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately agreed
upon between the Borrower and the Administrative Agent.

 

(d) All fees payable hereunder shall be paid on the dates due, in
immediately, available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.

 

SECTION 2.13. Interest.

 

(a) The Loans comprising each ABR Borrowing (including each
Swingline Loan) shall bear interest at the Alternate Base Rate plus the
Revolving Loan Applicable Rate or the Term Loan Applicable Rate, as applicable.

 

41

 

(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Revolving Loan Applicable Rate or the Term Loan
Applicable Rate, as applicable.

 

(c) Notwithstanding the foregoing, if any principal of or interest
on any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2%  plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section 2.13
or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this Section 2.13.

 

(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and, in the case of Revolving Loans,
upon termination of the Revolving Commitments, provided that (i) interest
accrued pursuant to paragraph (c) of this Section 2.13 shall be
payable on demand, (ii) in the event of any repayment or prepayment of any
Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the
Revolving Availability Period), accrued interest on the principal amount repaid
or prepaid shall be payable on the date of such repayment or prepayment and (iii) in
the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.

 

(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative
Agent, and such determination shall be conclusive absent manifest error.

 

SECTION 2.14. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:

 

(a) the Administrative Agent determines (which determination shall
be conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or

 

(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate for such Interest Period will  not adequately and fairly reflect the
cost to such Leaders of making or maintaining their Loans included in such
Borrowing for such Interest Period;

 

then the
Administrative Agent shall give notice thereof to the Borrower and the Lenders
in writing as promptly as practicable thereafter and, until the Administrative
Agent notifies the Borrower and the Lenders that the circumstances giving rise
to such notice no longer exist, (i) any Interest, Election Request that
requests the conversion of any Borrowing to, or continuation of any Borrowing
as, a Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing
Request requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.

 

SECTION 2.15. Increased Costs.

 

(a) If any Change in Law shall:

 

42

 

(i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank;
or

 

(ii) impose on any Lender or the Issuing Bank or
the London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;

 

and the result of
any of the foregoing shall be to increase the cost to such Lender of making or
maintaining any Eurodollar Loan (or of maintaining its obligation to make any
such Loan) or to increase the cost to such Lender or the Issuing Bank of
participating in, issuing or maintaining any Letter of Credit or to reduce the
amount of any sum received or receivable by such Lender or the Issuing Bank
hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuing Bank, as applicable, such additional amount
or amounts as will compensate such Lender or the Issuing Bank, as applicable,
for such additional costs incurred or reduction suffered.

 

(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender’s or the Issuing Bank’s capital or on the
capital of such Lender’s or the Issuing Bank’s holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender’s or the Issuing Bank’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or the Issuing Bank’s
policies and the policies of such Lender’s or the Issuing Bank’s holding
company with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender or the Issuing Bank, as applicable, such additional
amount or amounts as will compensate such Lender or the Issuing Bank or such
Lender’s or the Issuing Bank’s holding company for any such reduction suffered.

 

(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank
or its holding company, as applicable, as specified in paragraph (a) or (b) of
this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank, as applicable, the amount shown as due on any such certificate
within 10 days after receipt thereof.

 

(d) Failure or delay on the part of any Lender or the Issuing Bank
to demand compensation pursuant to this Section 2.15 shall not constitute
a waiver of such Lender’s or the Issuing Bank’s right to demand such
compensation, provided that the Borrower shall not be required to
compensate a Lender or the Issuing Bank pursuant to this Section 2.15 for
any increased costs or reductions incurred more than 270 days prior to the date
that such Lender or the Issuing Bank, as applicable, notifies the Borrower of
the Change in Law giving rise to such increased costs or reductions and of such
Lender’s or the Issuing Bank’s intention to claim compensation therefor, provided
further, that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the 270-day period referred to above shall
be extended to include the period of retroactive effect thereof.

 

SECTION 2.16.  Break
Funding Payments. In the event of (a) the payment of any principal of
any Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of an Event of Default), (b) the conversion
of any Eurodollar Loan other than on the last day of the Interest Period
applicable thereto, (c) the failure to borrow, convert, continue or prepay
any Revolving Loan or Tranche B Term Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.11 (f) and is revoked in accordance

 

43

 

therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to Section 2.19,
then, in any such event, the Borrower shall compensate each Lender for the
loss, cost and expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense to any Lender shall be deemed to include an
amount determined by such Lender to be the excess, if any, of (i) the
amount of interest that would have accrued on the principal amount of such Loan
had such event not occurred, at the Adjusted LIBO Rate that would have been
applicable to such Loan, for the period from the date of such event to the last
day of the then current Interest Period therefor (or, in the case of a failure
to borrow, convert or continue, for the period that would have been the
Interest Period for such Loan), over (ii) the amount of interest that
would accrue on such principal amount for such period at the interest rate that
such Lender would bid were it to bid, at the commencement of such period, for
dollar deposits of a comparable amount and period from other banks in the
eurodollar market. A certificate of any Lender setting forth any amount or
amounts that such Lender is entitled to receive pursuant to this Section 2.16
shall be delivered to the Borrower and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 10 days after receipt thereof. Notwithstanding the
foregoing, no additional amounts shall be due and payable pursuant to this Section 2.16
to the extent that on the relevant due date the Borrower deposits in a
Prepayment Account an amount equal to any payment of Eurodollar Loans otherwise
required to be made on a date that is not the last day of the applicable Interest
Period; provided that on the last day of the applicable Interest Period,
the Administrative Agent shall be authorized, without any further action by or
notice to or from the Borrower or any other Loan Party, to apply such amount to
the prepayment of such Eurodollar Loans. For purposes of this Agreement, the
term “Prepayment Account” shall mean a non-interest bearing account established
by the Borrower with the Administrative Agent and over which the Administrative
Agent shall have exclusive dominion and control, including the right of
withdrawal for application in accordance with this Section 2.16.

 

SECTION 2.17. Taxes.

 

(a) Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall be made free and
clear of and without deduction for any Indemnified Taxes or Other Taxes, provided
that if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.17) the
Administrative Agent, Lender or Issuing Bank (as applicable) receives an amount
equal to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.

 

(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

 

(c) The Borrower shall indemnify the Administrative Agent, each
Lender and the Issuing Bank, within 30 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent, such Lender or the Issuing Bank, as applicable, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder or under any other Loan Document (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under
this Section 2.17) and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or the Issuing Bank, or by
the

 

44

 

Administrative
Agent on its own behalf or on behalf of a Lender or the Issuing Bank, shall be
conclusive absent manifest error.

 

(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, if any,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.

 

(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), on or prior to the Original Closing Date in
the case of each Foreign Lender that is a signatory hereto, and on the date of assignment
pursuant to which it becomes a Lender in the case of each other Lender and from
time to time thereafter as reasonably requested by either of the Borrower or
the Administrative Agent, such properly completed and executed documentation
prescribed by applicable law or reasonably requested by the Borrower as will
permit such payments to be made without withholding or at a reduced rate, provided
that such Foreign Lender has received written notice from the Borrower advising
it of the availability of such exemption or reduction and supplying all
applicable documentation.

 

(f) If the Administrative Agent or a Lender determines, in its
sole discretion, that it has received a refund of any Indemnified Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 2.17,
it shall pay over such refund to the Borrower (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower under this
Section 2.17 with respect to the Indemnified Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund), provided
that the Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to the Borrower plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to
the Administrative Agent or such Lender in the event the Administrative Agent
or such Lender is required to repay such refund to such Governmental Authority.
This Section 2.17 shall not be construed to require the Administrative
Agent or any Lender to make available its tax returns (or any other information
relating to its taxes that it deems confidential) to the Borrower or any other
Person.

 

SECTION 2.18. Payments Generally; Pro Rata Treatment: Sharing
of Setoffs.

 

(a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 3:00 p.m., New York City time), on the date
when due, in immediately available funds, without setoff or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 745 Seventh Avenue,
New York, New York, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons
entitled thereto and payments pursuant to other Loan Documents shall be made to
the Persons specified therein. The Administrative Agent shall distribute any
such payments received by it for the account of any other

 

45

 

Person to the
appropriate recipient promptly following receipt thereof. If any payment under
any Loan Document shall be due on a day that is not a Business Day, the date
for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for
the period of such extension. All payments under each Loan Document shall be
made in dollars.

 

(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
unreimbursed LC Disbursements, interest and fees then due hereunder, such funds
shall be applied (i) first, towards payment of interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii) second,
towards payment of principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due  to such parties.

 

(c) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or interest
on any of its Revolving Loans, Tranche B Term Loans or participations in LC
Disbursements or Swingline Loans resulting in such Lender receiving payment of
a greater proportion of the aggregate amount of its Revolving Loans, Tranche B
Term Loans and participations in LC Disbursements and Swingline Loans and
accrued interest thereon than the proportion received by any other Lender, then
the Lender receiving such greater proportion shall purchase (for cash at face
value) participations in the Revolving Loans, Tranche B Term Loans and
participations in LC Disbursements and Swingline Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by
the Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Revolving Loans, Tranche B Term Loans and
participations in LC Disbursements and Swingline Loans, provided that (i) if
any such participations are purchased and all or any portion of the payment
giving rise thereto is recovered, such participations shall be rescinded and
the purchase price restored to the extent of such recovery, without interest,
and (ii) the provisions of this paragraph shall not be construed to apply
to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in LC Disbursements to any assignee or participant,
other than to the Borrower or any Subsidiary or Affiliate thereof (as to which
the provisions of this paragraph shall apply). The Borrower consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against the Borrower rights of setoff and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.

 

(d) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the Issuing Bank
hereunder that the Borrower will not make such payment, the Administrative
Agent may assume that the Borrower has made such payment on such date in
accordance herewith and may, in reliance upon such assumption and in its sole
discretion, distribute to the Lenders or the Issuing Bank, as applicable, the
amount due. In such event, if the Borrower has not in fact made such payment,
then each of the Lenders or the Issuing Bank, as applicable, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or Issuing Bank with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Administrative Agent, at the greater of the Federal
Funds Effective Rate and a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation.

 

(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(c), 2.05(d) or (e), 2.06(a), 2.18(d) or
9.03(c), then the Administrative Agent may, in its

 

46

 

discretion
(notwithstanding any contrary provision hereof); apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender’s obligations under such Sections until all such unsatisfied
obligations are fully paid.

 

SECTION 2.19. Mitigation Obligations; Replacement of Lenders.

 

(a) If any Lender requests compensation under Section 2.15,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.17,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would
eliminate or reduce amounts payable pursuant to Section 2.15 or 2.17, as
applicable, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.

 

(b) If any Lender requests compensation under Section 2.15,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without recourse
(in accordance with and subject to the restrictions contained in Section 9.04),
all its interests, rights and obligations under this Agreement to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that (i) the Borrower
shall have received the prior written consent of the Administrative Agent (and
if a Revolving Commitment is being assigned, the Issuing Bank and the Swingline
Lender), which consent shall not unreasonably be withheld, (ii) such
Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements and Swingline
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrower (in the case of all other
amounts) and (iii) in the case of any such assignment resulting from a
claim for compensation under Section 2.15 or payments required to be made
pursuant to Section 2.17, such assignment will result in a material
reduction in such compensation or payments. A Lender shall not be required to
make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.

 

SECTION 2.20. Incremental Extensions of Credit. Subject to
the terms and conditions set forth herein, the Borrower may at any time and
from time to time during the Revolving Availability Period or until the Tranche
B Term Loan Maturity Date, as applicable, by notice to the Administrative Agent
(whereupon the Administrative Agent shall promptly deliver a Copy to each of the
Lenders), request to add additional term loans or additional revolving
commitments (together, the “Incremental Extensions of Credit”) in
minimum principal amounts of $10,000,000; provided that such amount may
be less than $10,000,000 if such amount represents all the remaining
availability under the aggregate principal amount set forth below; provided,
further, that (x) immediately prior to and after giving effect to
any Incremental Facility Amendment (as defined below), no Default has occurred
or is continuing or shall result therefrom and (y) the Borrower shall be
in compliance on a Pro Forma Basis with the Financial Performance Covenants
recomputed as of the last day of the most recently ended fiscal quarter of the
Borrower for which financial statements are available. The Incremental
Extensions of Credit:

 

(a) shall be in an aggregate principal amount not exceeding
$75,000,000,

 

47

 

(b) shall rank pari  passu in right of payment and
right of security in respect of the Collateral with the Revolving Loans and
Tranche B Term Loans and

 

(c) other than amortization, pricing or maturity date, shall have
the same terms as the Tranche B Term Loans or Revolving Commitments, as
applicable, existing immediately prior to the effectiveness of such Incremental
Facility Amendment (the “Existing Extensions of Credit”);

 

provided
that (i) if the applicable interest rate margin (which, for such purposes
only, shall be deemed to include all upfront of similar fees or original issue
discount payable to all Lenders providing such Incremental Extensions of
Credit) relating to the Incremental Extensions of Credit that are revolving
loans and/or term loans, as applicable, exceeds the Revolving Loan Applicable
Rate or Term Loan Applicable Rate, as applicable (which, for such purposes
only, shall be deemed to include all upfront or similar fees or original issue
discount payable to all Lenders providing such Existing Extensions of Credit)
relating to the Revolving Loans and the Tranche B Term Loans, respectively, by
more than 0.50%, the Revolving Loan Applicable Rate or Term Loan Applicable
Rate, as applicable, relating to the applicable Existing Extensions of Credit
shall be adjusted to be equal to the applicable interest rate margin (which,
for such purposes only, shall be deemed to include all upfront or similar fees
or original issue discount payable to all Lenders providing such Incremental
Extensions of Credit) relating to the applicable Incremental Extensions of
Credit minus 0.50%, (ii) the Incremental Extensions of Credit in
the form of term loans shall not have a final maturity date earlier than, the
Tranche B Term Loan Maturity Date, (iii) the Incremental Extensions of
Credit in the form of revolving loans shall not have a final maturity date
earlier than the Revolving Maturity Date, (iv) the Incremental Extensions
of Credit in the form other loans shall not have a weighted average life that
is shorter than that of the then-remaining weighted average life of the
Existing Extensions of Credit that are Tranche B Term Loans and (v) the
Incremental Extensions of Credit in the form of revolving loans shall not
require any mandatory commitment reductions, mandatory prepayments or scheduled
payments other than those applicable to the Revolving Loans and Revolving
Commitments. The Borrower shall by written notice offer each Lender providing
Existing Extensions of Credit (an “Existing Lender”) the opportunity for
no less than ten (10) Business Days after delivery of the notice to commit
to provide its pro  rata portion (based on the amount of its
outstanding Term Loans or outstanding Revolving Loans and unused Revolving
Commitments, as applicable, on the date of such notice) of any requested
Incremental Extension of Credit, provided that no Existing Lender shall
be obligated to provide any Incremental Extension of Credit unless it so
agrees. Any additional bank, financial institution, Existing Lender or other
Person that elects to extend Incremental Extensions of Credit shall be
reasonably satisfactory to the Borrower and the Administrative Agent and, in
the case of Incremental Extensions of Credit in the form of revolving loans,
the Issuing Bank and the Swing Line Lender (any such bank, financial
institution, Existing Lender or other Person being called an “Additional Lender”)
and shall become a Lender under this Agreement pursuant to an amendment (an “Incremental
Facility Amendment”) to this Agreement giving effect to the modifications
permitted by this Section 2.20 and, as appropriate, the other Loan
Documents and executed by the Borrower, each Additional Lender and the
Administrative Agent. Commitments in respect of Incremental Extensions of
Credit shall be Commitments under this Agreement. An Incremental Facility
Amendment may, without the consent of any other Lenders, effect such amendments
to this Agreement and the other Loan Documents as may be necessary or
appropriate, in the opinion of the Administrative Agent, to effect the
provisions of this Section 2.20 (including voting provisions applicable to
the Additional Lenders comparable to the provisions of clause (B) of the
second proviso of Section 9.02(b)). The effectiveness of any Incremental
Facility Amendment shall be subject to the satisfaction on the date thereof
(each, an “Incremental Facility Closing Date”) of each of the conditions
set forth in Section 4.02 (it being understood that all references to “the
date of such Borrowing” in such Section 4.02 shall be deemed to refer to
the Incremental Facility Closing Date). The proceeds of the Incremental
Extensions of Credit shall be used for working capital and general corporate
purposes (including Permitted Acquisitions).

 

48

 

ARTICLE III

 

Representations and Warranties

 

The Borrower represents and warrants to the Lenders that:

 

SECTION 3.01. Organization: Power. Each of Holdings, the
Borrower and the Subsidiaries (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority and all governmental rights, qualifications, approvals,
authorizations, permits, accreditations, licenses and franchises material to
the business of the Borrower and the Subsidiaries taken as a whole that are
necessary to own its assets, to carry on its business as now conducted and as
proposed to be conducted and to execute, deliver and perform its obligations
under each Loan Document to which it is a party and (c) except where the
failure to do so, individually or in the aggregate, is not reasonably likely to
result in a Material Adverse Effect, is qualified to do business in, and is in
good standing in, every jurisdiction where such qualification is required.

 

SECTION 3.02. Authorization: Enforceability. The
Transactions to be entered into by each Loan Party have been duly authorized by
all necessary corporate or other action and, if required, stockholder action.
This Agreement has been duly executed and delivered by each of Holdings and the
Borrower and constitutes, and each other Loan Document to which any Loan Party
is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of Holdings, the Borrower or
such Loan Party, as applicable, enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.

 

SECTION 3.03. Governmental Approvals: No Conflicts. The
Transactions (a) do not require any consent or approval of, registration
or filing with, or any other action by, any Governmental Authority, except such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect Liens created under the Loan Documents, (b) will
not violate any Requirement of Law applicable to Holdings, the Borrower or any
of the Subsidiaries, as applicable, (c) will not violate or result in a
default under any indenture or other material agreement or instrument binding
upon Holdings, the Borrower or any of the Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by Holdings, the
Borrower or any of the Subsidiaries or give rise to a right of, or result in,
termination, cancellation or acceleration of any material obligation
thereunder, and (d) will not result in the creation or imposition of any
Lien on any asset of Holdings, the Borrower or any of the Subsidiaries, except
Liens created under the Loan Documents. No certifications by any Governmental
Authority are required for operation of the business of the Borrower and the
Subsidiaries that are not in place, except for such certifications and
agreements, the absence of which do not materially and adversely affect the
operation of the business.

 

SECTION 3.04. Financial Condition: No Material Adverse Change.

 

(a) The Borrower has
heretofore furnished to the Lenders its consolidated balance sheet and
consolidated statements of operations and comprehensive income, stockholders’
equity and cash flows (i) as of and for the fiscal year ended December 31,
2005, reported on by Ernst & Young LLP, independent public accountants.
Such financial statements present fairly, in all material respects, the
financial position and results of operations and cash flows of the Borrower and
the Subsidiaries as of such dates and for such periods in accordance with GAAP
consistently applied, subject to year-end audit , adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.

 

49

 

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

 

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

 

(d) No event, change or condition has occurred that has had, or is
reasonably likely to have, a material adverse effect on the business,
operations, assets, liabilities, financial condition or results of operations
of Holdings, the Borrower and the Subsidiaries, taken as a whole, since December 31,
2005; provided, that, to the extent covered by a cash investment by the
Permitted Investors or other Persons (other than any Loan Party or Subsidiary
thereof) directly or indirectly in the Borrower, the FCPA Claims shall not be
deemed to have a material adverse effect on the business, operations, assets,
liabilities, financial condition or results of operations of Holdings, the
Borrower and the Subsidiaries, taken as a whole.

 

SECTION 3.05. Properties.

 

(a) Each of Holdings, the Borrower and the Subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business (including its Mortgaged Properties), free and clear
of all Liens, except for Permitted Encumbrances and minor defects in title that
do not interfere in any material respect with its ability to conduct its
business or to utilize such properties for their intended purposes.

 

(b) Each of Holdings, the Borrower and the Subsidiaries owns,
licenses or possesses the right to use all trademarks, trade names, copyrights,
patents and other intellectual property material to its business, and the use
thereof by Holdings, the Borrower and the Subsidiaries to their knowledge has
not been asserted to infringe upon the rights of any other Person.

 

(c) Schedule 3.05 sets forth the address of each real
property that is owned or leased by Holdings, the Borrower or any of the
Subsidiaries as of the Closing Date.

 

(d) As of the Closing Date, neither Holdings or the Borrower nor
any of the Subsidiaries has received written notice of, or has knowledge of,
any pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation. As of the
Closing Date, neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.

 

SECTION 3.06. Litigation and Environmental Matters.

 

(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of
Holdings, the Borrower or any Subsidiary, threatened against or affecting
Holdings, the Borrower or any Subsidiary that are reasonably likely to have a
Material Adverse Effect or that are reasonably likely to adversely affect in
any material

 

50

 

respect the
ability of the Loan Parties to consummate the Transactions or the other
transactions contemplated hereby; provided, that, to the extent covered
by a cash investment by the Permitted Investors or other Persons (other than
any Loan Party or Subsidiary thereof) directly or indirectly in the Borrower,
the FCPA Claims shall not be deemed to have a material adverse effect on the
business, operations, assets, liabilities, financial condition or results of
operations of Holdings, the Borrower and the Subsidiaries, taken as a whole.

 

(b) Neither Holdings, the Borrower nor any Subsidiary is subject
to any judgment or pending or threatened legal claim involving Intellectual
Property (as defined in the Collateral Agreement) owned by any third party,
and, to the knowledge of Holdings, the Borrower or any Subsidiary, there is no
basis for any such claim, that individually or in the aggregate could
reasonably be expected to result in a Material Adverse Effect.

 

(c) Except with respect to any other matters that, individually or
in the aggregate, are not reasonably likely to result in a Material Adverse
Effect, neither Holdings, the Borrower nor any Subsidiary (i) has failed
to comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability or (iii) knows of any basis
for any Environmental Liability.

 

SECTION 3.07. Compliance with Laws and Agreements. (a) Except
with respect to any matters that, individually or in the aggregate, are not
material to the business of the Borrower and the Subsidiaries, taken as a
whole, and except for the FCPA Claims, each of Holdings, the Borrower and the
Subsidiaries is in compliance with all material Requirements of Law applicable
to it or its property and all material indentures, agreements and other
instruments binding (b) Holdings, the Borrower and any Subsidiary and, to
the knowledge of Borrower all entities and individuals acting on their behalf,
possess and are in compliance with all material certificates, licenses, approvals,
waivers, consents, authorizations and permits issued by, and have made all
declarations and filings with, the appropriate federal, state, local or foreign
regulatory authorities reasonably necessary to conduct its business, including
without limitation all those that may be required by the United States Food and
Drug Administration (“FDA”). Holdings, the Borrower and any Subsidiary are in
all material respects in compliance with all statutes, rules, regulations,
ordinances, orders, decrees and guidance documents applicable to the ownership,
testing, development, manufacture, packaging, processing, recordkeeping, use,
distribution, marketing, labeling, promotion, sale, offer for sale, storage,
import, export or disposal of any product or product candidate subject to, or
potentially subject to, regulation under the Federal Food, Drug and Cosmetic
Act (“FFDCA”) and implementing regulations. All studies, tests and preclinical
and clinical trials conducted by or on behalf of Holdings, the Borrower and any
Subsidiary are being and were, if completed, conducted in compliance with
experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and applicable local, state and federal laws,
rules, regulations and guidance documents, including, but not limited to, the
FFDCA and its implementing regulations upon it or its property.

 

SECTION 3.08. Investment and Holding Company Status.
Neither Holdings, the Borrower nor any Subsidiary is (a) an “investment
company” as defined in, or subject to regulation under, the Investment Company
Act of 1940, as amended or (b) a “holding company” as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935, as
amended.

 

SECTION 3.09. Taxes. Each of Holdings, the Borrower and the
Subsidiaries has timely filed or caused to be filed all Federal and other
material Tax returns and reports required to have been filed and has paid or
caused to be paid all Taxes required to have been paid by it, except (a) any
Taxes that are being contested in good faith by appropriate proceedings and for
which Holdings, the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves in accordance

 

51

 

with GAAP or (b) to
the extent that the failure to do so is not reasonably likely to result in a
Material Adverse Effect.

 

SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably likely to occur that, when taken together with all other such ERISA
Events for which liability is reasonably likely to occur, is reasonably likely
to result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the
date of the most recent financial statements reflecting such amounts, exceed
the fair value of the assets of such Plan.

 

SECTION 3.1l. Disclosure. None of the other reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in
connection with the negotiation of the Existing Credit Agreement or this
Agreement or any other Loan Document or delivered hereunder or thereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, provided that the foregoing shall not apply
to any projected financial information other than the projected financial
information provided to the Lenders prior to the Closing Date, and with respect
to such projected financial information, Holdings and the Borrower represent
only that such information was prepared in good faith based upon assumptions
believed by them to be reasonable at the time delivered and as of the Closing
Date. As of the date of the Agreement, Holdings, the Borrower and each Subsidiary
have disclosed to the Lenders all facts regarding the FCPA Claims that are
known to it that could reasonably be expected to have a Material Adverse
Effect.

 

SECTION 3.12. Subsidiaries. As of the Closing Date, the
Borrower does not have any subsidiaries other than the Subsidiaries, Permitted
Joint Ventures and Inactive Subsidiaries listed on Schedule 3.12. Schedule
3.12 sets forth the name of, and the ownership or beneficial interest of
Borrower in, each subsidiary, and identifies each Subsidiary that is a
Subsidiary Loan Party, in each case as of the Closing Date.

 

SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of Holdings, the
Borrower and the Subsidiaries as of the Closing Date. As of the Closing Date,
all premiums in respect of such insurance have been paid. Holdings and the
Borrower believe that the insurance maintained by or on behalf of the Borrower
and the Subsidiaries is adequate.

 

SECTION 3.14. Labor Matters. As of the Closing Date, there
are no strikes, lockouts or slowdowns against Holdings, the Borrower or any
Subsidiary pending or, to the knowledge of the Borrower, threatened. The hours
worked by and payments made to employees of the Borrower and the Subsidiaries
have not been in violation of the Fair Labor Standards Act or any other
applicable Federal, state, local or foreign law dealing with such matters. All
payments due from Holdings, the Borrower or any Subsidiary, or for which any
claim may be made against Holdings, the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have
been paid or accrued as a liability on the books of Holdings, the Borrower or
such Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which Holdings, the Borrower or any
Subsidiary is bound.

 

SECTION 3.15. Solvency. Immediately after the consummation
of the Transactions to occur on the Closing Date, (a) the fair value of
the assets of each Loan Party, at a fair valuation, will exceed its debts and
liabilities, subordinated, contingent or otherwise, (b) the present fair
saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable

 

52

 

liability of its
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured, (c) each Loan
Party will be able to pay its debts and liabilities, subordinated, contingent
or otherwise, as such debts and liabilities become absolute and matured, and (d) no
Loan Party will have unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted following the Closing Date, in each case after giving
effect to any rights of indemnification, contribution or subrogation arising among
the Subsidiary Loan Parties pursuant to the Collateral Agreement or by law.

 

SECTION 3.16. Senior Indebtedness. The Obligations
constitute “Senior Debt” or a comparable term under and as defined in the
Senior Subordinated Notes Documents and in the documentation governing any
Additional Subordinated Debt.

 

SECTION 3.17. Fraud and Abuse. None of Holdings, the
Borrower or any Subsidiary, nor any of their respective partners, members,
stockholders, officers or directors, acting on behalf of Holdings, the Borrower
or any Subsidiary, have engaged on behalf of Holdings, the Borrower or any
Subsidiary in any activities that are prohibited under 42 U.S.C. § 1320a-7, 42
U.S.C. § 1320a-7a, 42 U.S.C. § 1320a-7b, 42 U.S.C. § 1395nn, 31 U.S.C. § 3729
et seq., or the regulations promulgated thereunder, or related Requirements of
Law, or under any similar state law or regulation, or that are prohibited by
binding rules of professional conduct, including (a) knowingly and
willfully making or causing to be made a false statement or misrepresentation
of a material fact in any application for any benefit or payment, (b) knowingly
and willfully making or causing to be made any false statement or
misrepresentation of a material fact for use in determining rights to any
benefit or payment, (c) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another, with intent to secure
such benefit or payment fraudulently, (d) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration (i) in return for referring
an individual to a Person for the furnishing or arranging for the fumishing of
any item or service for which payment may be made, in whole or in part or (ii) in
return for purchasing, leasing or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service or item for which
payment may be made, in whole or in part and (e) making any prohibited
referral for designated health services, or presenting or causing to be
presented a claim or bill to any individual or other entity for designated
health services furnished pursuant to a prohibited referral. Neither Holdings,
the Borrower nor any Subsidiary shall be considered to be in breach of this Section 3.18
so long as (a) it shall have taken such actions (including implementation
of appropriate internal controls) as may be reasonably necessary to prevent
such prohibited actions and (b) such prohibited actions as have occurred,
individually or in the aggregate, are not reasonably likely to have a Material
Adverse Effect.

 

ARTICLE IV

 

Conditions

 

SECTION 4.01. Closing Date. The obligations of the Lenders
to make Loans and of the Issuing Bank to issue Letters of Credit hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived):

 

(a) The Administrative Agent shall have received from each party
hereto either (i) a counterpart of this Agreement signed on behalf of such
party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.

 

53

 

(b) A reaffirmation (or at the request of the Administrative
Agent, an amendment and restatement) of the Security Documents including,
without limitation, the Guarantee and Collateral Agreement, the Control
Agreements (as defined in the Guarantee and Collateral Agreement), the Patent
Security Agreement (as defined in the Guarantee and Collateral Agreement), the
Trademark Security Agreement (as defined in the Guarantee and Collateral
Agreement) and the Copyright Security Agreement (as defined in the Guarantee
and Collateral Agreement), in each case duly executed and delivered by each
respective Loan Party.

 

(c) The Administrative Agent shall have received a written opinion
(addressed to the Administrative Agent and the Lenders and dated the Closing
Date) of each of (i) Ropes & Gray LLP, counsel for Holdings and
the Borrower, substantially in the form of Exhibit B-l, and (ii) The
Holstein Law Firm, substantially in the form of Exhibit B-2, and,
in the case of each such opinion required by this paragraph, covering such
other matters relating to the Loan Parties, the Loan Documents or the
Transactions as the Administrative Agent shall reasonably request.

 

(d) The Administrative Agent shall have received such documents
and certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each Loan
Party, the authorization of the Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents or the Transactions, all in
form and substance reasonably satisfactory to the Administrative Agent.

 

(e) The Administrative Agent shall have received a certificate,
dated the Closing Date and signed by a Financial Officer, confirming compliance
with the conditions set forth in paragraphs (a) and (b) of Section 4.02.

 

(f) The Lenders and the Administrative Agent shall have received
all fees and other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses (including fees, charges and disbursements of counsel)
required to be reimbursed or paid by the Borrower hereunder or under any other
Loan Document.

 

(g) The Administrative Agent shall have received a completed
Perfection Certificate dated the Closing Date and signed by a Financial Officer
and a legal officer of the Borrower, together with all attachments contemplated
thereby, including the results of a search of the Uniform Commercial Code (or
equivalent) filings made with respect to the Loan Parties in the jurisdictions
contemplated by the Perfection Certificate and copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by Section 6.02
or have been released.

 

(h) The sources and uses for the Transactions shall be as set
forth on Schedule 4.01(h). The capital structure of each Loan Party after the
Transactions shall be otherwise substantially consistent with information
provided to each Lender prior to the date hereof or to the extent of any
changes after the date hereof, as reasonably satisfactory to the Lenders.

 

(i) The Transactions to be consummated on the Closing Date shall
have been consummated pursuant to documents in form and substance reasonably
satisfactory to the Lenders and, in each case, no provision of any such
document shall have been waived, amended, supplemented or otherwise modified in
a manner materially adverse to the Lenders, except with the consent of the
Lenders (not to be unreasonably withheld).

 

54

 

(j) All requisite material Governmental Authorities and third
parties shall have approved or consented to (i) the Transactions, (ii) the
financing contemplated hereby and (iii) the continuing operations of the
Borrower and its subsidiaries, and in each case such approvals and consents
shall be in full force and effect.

 

(k) The Lenders shall have received (i) with respect to the
Borrower, audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal year ended December 31, 2005, (ii) unaudited
interim consolidated financial statements of the Borrower and its Subsidiaries
for each quarterly or monthly period ended prior to the Closing Date to the
extent available, in each case pursuant to clauses (i) and (ii), in form
and substance reasonably satisfactory to the Administrative Agent, and (iii) a
pro forma consolidated balance sheet of the Borrower and its Subsidiaries as at
the date of the most recent consolidated balance sheet delivered pursuant to
this paragraph, adjusted to give effect to the consummation of the Transactions
and the financings contemplated hereby as if such transactions had occurred on
such date, which balance sheet shall not be materially inconsistent with the
forecasts previously provided to the Lenders.

 

(l) The Lenders shall have received a certificate from the
Borrower, dated the Closing Date and signed by a Financial Officer of Borrower,
confirming that, except with respect to the FCPA Claims (to the extent
supported by cash on hand or a cash investment directly or indirectly in the
Borrower), since December 31, 2005, there has been no Material Adverse
Effect as described in clauses (a) and (b) of the definition thereof.

 

(m) The Administrative Agent shall have received a certificate
dated the Closing Date and signed by the president or a vice president of the
Borrower or a Financial Officer, in form and substance reasonably satisfactory
to the Administrative Agent, together with such other evidence  reasonably
requested by the Lenders, confirming the solvency of the Borrower and its
subsidiaries on a consolidated basis after giving effect to the Transactions.

 

(n) Each Lender shall have received all documentation and other
information required by bank, regulatory authorities under applicable “know
your customer” and Anti-Money Laundering rules and regulations as any
Lender may reasonably request, including without limitation, the USA Patriot
Act.

 

(o) All “Term Loans” outstanding under (and as defined in) the
Existing Credit Agreement shall have been repaid in full.

 

The Administrative Agent shall notify the Borrower and the Lenders of
the Closing Date, and such notice shall be conclusive and binding.

 

SECTION 4.02. Each Credit Event. The obligation of each
Lender to make any Loan and of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit, is subject to receipt of the request therefor in
accordance herewith and to the satisfaction of the following conditions:

 

(a) The representations and warranties of each Loan Party set
forth in the Loan Documents shall be true and correct in all material respects
(except to the extent any such representation or warranty is qualified by “materially”,
“Material Adverse Effect” or a similar term, in which case such representation
and warranty shall be true and correct in all respects) on and as of the date
of such Borrowing or the date of issuance, amendment, renewal or extension of
such Letter of Credit, as applicable, except to the extent such representations
and warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct (or true and correct
in all material respects, as the case may be) as of such earlier date).

 

55

 

(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.

 

Each Borrowing (provided
that a conversion or continuation of a Borrowing shall not constitute a “Borrowing”
for purposes of this Section 4.02) and each issuance, amendment, renewal
or extension of a Letter of Credit shall be deemed to constitute a
representation and warranty by Holdings and the Borrower on the date thereof as
to the matters specified in paragraphs (a) and (b) of this Section 4.02.

 

ARTICLE V

 

Affirmative Covenants

 

Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees, expenses and other amounts payable
under any Loan Document shall have been paid in full and all Letters of Credit
shall have expired or terminated and all LC Disbursements shall have been
reimbursed, each of Holdings and the Borrower covenants and agrees with the
Lenders that:

 

SECTION 5.01.  Financial
Statements and Other Information. The Borrower will furnish to the
Administrative Agent (for distribution to each Lender):

 

(a) within 90 days (or such shorter period as the SEC shall
specify for the filing of annual reports on Form 10-K) after the end of
each fiscal year of the Borrower commencing with the fiscal year ended December 31,
2005, (i) its audited consolidated balance sheet and consolidated
statements of operations and comprehensive income, stockholders’ equity and
cash flows as of the end of and for such fiscal year, and the related notes
thereto, setting forth in each case in comparative form the figures for the
previous fiscal year, all reported on by independent public accountants of
recognized national standing (without a “going concern” or like qualification
or exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and the Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, and (ii) if at any time the Borrower is not
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act, a “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” that describes the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries;

 

(b) within 45 days (or such shorter period as the SEC shall
specify for the filing of quarterly reports on Form 10-Q) after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower
commencing with the fiscal quarter ending March 31, 2006, its consolidated
balance sheet and consolidated statements of operations and comprehensive
income, stockholders’ equity and cash flows as of the end of and for such
fiscal quarter and the then-elapsed portion of the fiscal year, setting forth
in each case in comparative form the figures for the corresponding period or
periods of (or, in the case of the balance sheet, as of the end of) the
previous fiscal year, all certified by a Financial Officer as presenting fairly
in all material respects the financial condition and results of operations of
the Borrower and the Subsidiaries on a consolidated basis in accordance with
GAAP consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;

 

(c) concurrently with any delivery of financial statements under
paragraph (a) or (b) above, a certificate of a Financial Officer (i) certifying
as to whether a Default has occurred and, if a Default has occurred, specifying
the details thereof and any action taken or proposed to be taken with respect
thereto, (ii) setting forth (A) reasonably detailed calculations
demonstrating compliance with

 

56

 

Sections 6.12,
6.13 and 6.15 (including (x) any prepayment of the Loans as set forth in
the definition of “Leverage Ratio” and (y) any exercise of the rights set
forth in Section 7.02) and (B) in the case of financial statements
delivered under paragraph (a) above beginning in 2007 with respect to
fiscal year 2006, reasonably detailed calculations of Excess Cash Flow, (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the Borrower’s audited financial statements referred to in Section 3.04
and, if any such change has occurred, specifying the effect of such change on
the financial statements accompanying such certificate, and (iv) certifying
as to the calculation of Consolidated EBITDA on a Pro Forma Basis for the four
fiscal quarter period ending on the date of such financial statements and
accompanied by reasonably detailed supporting evidence, it being understood
that each of the calculations described in this paragraph (c) shall
provide a reconciliation to the financial statements delivered under paragraphs
(a) and (b) above;

 

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

 

(e) concurrently with the issuance of any Indebtedness permitted
by Sections 6.01(a)(xii) and (xiii), or a Restricted Payment permitted by Section 6.08(a)(ix),
a certificate of a Financial Officer certifying as to (i) the Leverage
Ratio accompanied by reasonably detailed supporting evidence, (ii) the use
of proceeds from such issuance and (iii) whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any action
taken or proposed to be taken with respect thereto, it being understood that
each of the calculations described in this paragraph (e) shall provide a
reconciliation to the financial statements delivered under paragraphs (a) and
(b) above;

 

(f) within 30 days after the commencement of each fiscal year of
the Borrower, a detailed consolidated budget for such fiscal year (including a
projected consolidated balance sheet and consolidated statements of projected
operations and cash flows as of the end of and for such fiscal year) and,
promptly when available, any significant revisions of such budget;

 

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

 

(h) concurrently (or promptly thereafter) with the delivery of any
notices to the Holders (as defined in the Securities Purchase Agreement) of the
Senior Subordinated Notes, copies of such notices;

 

(i) as promptly as practicable and no later than 5 Business Days
prior to the effectiveness thereof, (i) copies of substantially final
drafts of any proposed amendment, supplement, waiver or other modification with
respect to any documentation governing the Senior Subordinated Notes and (ii) notice
of any transfers of any interests in the Senior Subordinated Notes other than
to the Sponsor or a Sponsor Affiliate; and

 

(j) promptly following any request therefor, such other
information regarding the operations, business affairs and financial condition
of Holdings, the Borrower or any Subsidiary or any Plan, or compliance with the
terms of any Loan Document, as the Administrative Agent or any Lender may
reasonably request.

 

57

 

SECTION 5.02. Notices of Material Events. Holdings and the
Borrower will furnish to the Administrative Agent (for distribution to each
Lender), through the Administrative Agent, written notice of the following
promptly after obtaining knowledge thereof:

 

(a) the occurrence of any Default;

 

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

 

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

 

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

 

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

 

(f) any materially adverse developments regarding the FCPA Claims;
and

 

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

 

Each notice
delivered under this Section 5.02 shall be accompanied by a statement of a
Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.

 

SECTION 5.03. Information Regarding Collateral.

 

(a) The Borrower will furnish to the Collateral Agent prompt
written notice of any change (i) in any Loan Party’s corporate name, (ii) in
the jurisdiction of incorporation or organization of any Loan Party or (iii) in
any Loan Party’s organizational identification number. The Borrower agrees not
to effect or permit any change referred to in the preceding sentence unless all
filings have been made under the Uniform Commercial Code or otherwise that are
required in order for the Collateral Agent to continue at all times following
such change to have a valid, legal and perfected security interest in all the
Collateral. The Borrower also agrees promptly to notify the Collateral Agent if
any material portion of the Collateral is damaged or destroyed.

 

(b) Each year, at the time of delivery of annual financial
statements pursuant to Section 5.01 (a), the Borrower shall deliver to the
Collateral Agent a certificate executed by a Financial

 

58

 

Officer and the
chief legal officer of the Borrower setting forth the information required
pursuant to the Perfection Certificate or confirming that there has been no change
in such information since the date of the Perfection Certificate delivered on
the Closing Date or the date of the most recent certificate delivered pursuant
to this Section.

 

SECTION 5.04. Existence; Conduct of Business. Each of
Holdings and the Borrower will, and will cause each of the Subsidiaries to, do
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its legal existence and the rights, qualifications, permits,
approvals, accreditations, authorizations, licenses, franchises, patents,
copyrights, trademarks and trade names material to the conduct of its business;
provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03.

 

SECTION 5.05. Payment of Obligations. Each of Holdings and
the Borrower will, and will cause each of the Subsidiaries to, pay its Tax
liabilities, before the same shall become delinquent or in default, except
where (a) the validity or amount thereof is being contested in good faith
by appropriate proceedings, (b) Holdings, the Borrower or such Subsidiary
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, (c) such contest effectively suspends the enforcement of any
Lien securing such obligation and (d) the failure to make payment pending
such contest is not reasonably likely to result in a Material Adverse Effect.

 

SECTION 5.06. Maintenance of Properties. Each of Holdings
and the Borrower will, and will cause each of the Subsidiaries to, keep and
maintain all property material to the conduct of its business in good working
order and condition, ordinary wear and tear excepted.

 

SECTION 5.07. Insurance. Each of Holdings and the Borrower
will, and will cause each of the Subsidiaries to, maintain, with financially
sound and reputable insurance companies (which may include self-insurance), (a) insurance
in such amounts (with no greater risk retention) and against such risks as are
customarily maintained by companies of established repute engaged in the same
or similar businesses operating in the same or similar locations and (b) all
insurance required to be maintained pursuant to the Security Documents. The
Borrower will furnish to the Lenders, upon request of the Administrative Agent,
information in reasonable detail as to the insurance so maintained.

 

SECTION 5.08. Casualty and Condemnation. The Borrower (a) will
furnish to the Administrative Agent and the Lenders prompt written notice of
any casualty or other insured damage to any material portion of the Collateral
or the commencement of any action or proceeding for the taking of any material
portion of the Collateral or interest therein under power of eminent domain or
by condemnation or similar proceeding and (b) will ensure that the Net
Proceeds of any such event (whether in the form of insurance proceeds,
condemnation awards or otherwise) are collected and applied in accordance with
the applicable provisions of this Agreement and the Security Documents.

 

SECTION 5.09. Books and Records; Inspection and Audit Rights.
Each of Holdings and the Borrower will, and will cause each of the Subsidiaries
to, keep proper books of record and account in which full, true and correct
entries are made of all dealings and transactions in relation to its business
and activities. Each of Holdings and the Borrower will, and will cause each of
the Subsidiaries to, permit any representatives designated by the
Administrative Agent or any Lender, upon reasonable prior notice, to visit and
inspect its properties during normal business hours, to examine and make
extracts from its books and records, including environment assessment reports
and Phase I or Phase II studies, and to discuss its affairs, finances and
condition with its officers and independent accountants (provided that
the Borrower shall be provided the opportunity to participate in any such
discussions with its independent accountants), all at such reasonable times and
as often as reasonably requested.

 

59

 

SECTION 5.10. Compliance with Laws. Each of Holdings and
the Borrower will cause each of the Subsidiaries to comply with all
Requirements of Law, including Environmental Laws, applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
is not reasonably likely to result in a Material Adverse Effect.

 

SECTION 5.11. Use of Proceeds and Letters of Credit. The
proceeds of the Tranche B Term Loans will be used by the Borrower on the
Closing Date in the manner described in Schedule 4.01(h) and for working
capital and for other general corporate purposes (including, without
limitation, to finance permitted acquisitions). The proceeds of the Revolving
Loans (except as described above), Swingline Loans and Letters of Credit will
be used only for working capital and for other general corporate purposes
(including, without limitation, to finance permitted acquisitions). No part of
the proceeds of any Loan and no Letter of Credit will be used, whether directly
or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.

 

SECTION 5.12. Additional Subsidiaries; Holdings. If any
additional Subsidiary is formed or acquired after the Closing Date (or if (x) any
Inactive Subsidiary that is not a Subsidiary Loan Party ceases to qualify as an
Inactive Subsidiary or (y) a Permitted Joint Venture that is not otherwise
a Permitted Joint Venture Loan Party becomes a wholly owned Subsidiary of the
Borrower or is not restricted by contract from executing the Security
Documents), the Borrower will, promptly after such Subsidiary or Permitted
Joint Venture is formed or acquired, notify the Collateral Agent and the
Lenders (through the Administrative Agent) thereof and promptly cause the
Collateral and Guarantee Requirement to be satisfied with respect to such
Subsidiary or Permitted Joint Venture and with respect to any Equity Interest
in or Indebtedness of such Subsidiary or Permitted Joint Venture owned by or on
behalf of any Loan Party.

 

SECTION 5.13. Further Assurances.

 

(a) Each of Holdings and the Borrower will, and will cause each
Subsidiary Loan Party to, execute any and all further documents, financing
statements, agreements and instruments, and take all such further actions
(including the filing and recording of financing statements, fixture filings,
mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which the Administrative Agent or the Required Lenders may
reasonably request, to cause the Collateral and Guarantee Requirement to be and
remain satisfied, all at the expense of the Loan Parties. Each of Holdings and
the Borrower also agrees to provide to the Collateral Agent, from time to time
upon reasonable request, evidence reasonably satisfactory to the Administrative
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Documents.

 

(b) If any material assets (including any real property (other
than any leased real property) or improvements thereto or any interest therein,
other than any real property with a fair value of less than $2,500,000) are
acquired by the Borrower or any Subsidiary Loan Party after the Closing Date
(other than assets constituting Collateral under the Collateral Agreement that
become subject to the Lien in favor of the Collateral Agreement upon
acquisition thereof), the Borrower will notify the Administrative Agent and the
Lenders thereof and, if requested by the Administrative Agent or the Required
Lenders, the Borrower will cause such assets to be subjected to a Lien securing
the Obligations and will take, and cause the Subsidiary Loan Parties to take,
such actions as shall be necessary or reasonably requested by the
Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section 5.13, all at the expense
of the Loan Parties, provided that the Collateral Agent may, in its
reasonable judgment, grant extensions of time for compliance or exceptions with
the provisions of this paragraph by any Loan Party.

 

60

 

SECTION 5.14. Post Closing Matters. Holdings and the
Borrower shall, and shall cause each Subsidiary to, comply with the terms and
conditions set forth on Schedule 5.14

 

ARTICLE VI

 

Negative Covenants

 

Until the Commitments have expired or been terminated and the principal
of and interest on each Loan and all fees, expenses and other amounts payable
under any Loan Document have been paid in full and all Letters of Credit have
expired or terminated and all LC Disbursements shall have been reimbursed, each
of Holdings and the Borrower covenants and agrees with the Lenders that:

 

SECTION 6.01. Indebtedness; Certain Equity Securities.

 

(a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:

 

(i) Indebtedness created under the Loan
Documents;

 

(ii) the Senior Subordinated Notes;

 

(iii) [Intentionally Deleted];

 

(iv) Indebtedness existing on the Original
Closing Date and set forth in Schedule 6.01 and extensions, renewals and
replacements of any such Indebtedness, provided that such extending,
renewal or replacement Indebtedness (A) shall not be in a principal amount
that exceeds the principal amount of the Indebtedness being extended, renewed
or replaced (plus accrued interest and premium thereon), (B) shall
not have an earlier maturity date or a decreased weighted average life than the
Indebtedness being extended, renewed or replaced, (C) shall be
subordinated to the Obligations on the same terms (or, from a Lender’s
perspective, better terms) as the Indebtedness being extended, renewed or
replaced and (D) there is no obligor of such Indebtedness that is not
either (x) an obligor of such Indebtedness on the Closing Date or (y) otherwise
permitted to incur such Indebtedness by another clause of this Section 6.01;

 

(v) Indebtedness of the Borrower owed to any
Subsidiary and of any Subsidiary owed to the Borrower or any other Subsidiary, provided
that Indebtedness of the Borrower owed to any Subsidiary and Indebtedness of
any Subsidiary owed to the Borrower or any other Subsidiary shall be
subordinated to the Obligations on terms reasonably satisfactory to the
Administrative Agent;

 

(vi) Guarantees by the Borrower of Indebtedness
of any Subsidiary and by any Subsidiary of Indebtedness of the Borrower or any
other Subsidiary, provided that (A) the Indebtedness so Guaranteed
is permitted by this Section 6.01, (B) Guarantees permitted under
this clause (vi) shall be subordinated to the Obligations of the Borrower
or the applicable Subsidiary to the same extent and on the same terms as the
Indebtedness so Guaranteed is subordinated to the Obligations and (C) except
in the case of Foreign Subsidiaries that provide Guarantees of Indebtedness of
other Foreign Subsidiaries, no Subsidiary shall Guarantee any Indebtedness
unless it is a Subsidiary Loan Party;

 

(vii) Indebtedness of the Borrower or any
Subsidiary incurred to finance the acquisition, construction or improvement of
any fixed or capital assets, including Capital Lease

 

61

 

Obligations, and any Indebtedness assumed by the Borrower or any
Subsidiary in connection with the acquisition of any such assets or secured by
a Lien on any such assets prior to the acquisition thereof, and extensions,
renewals and replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof (including the principal and any accrued
but unpaid interest or premium in respect thereof), provided that (A) such
Indebtedness is incurred prior to or within 120 days after such acquisition or
the completion of such construction or improvement, (B) that the aggregate
principal amount of Indebtedness permitted by this clause (vii) in respect
of the Specified Property shall not exceed at any time outstanding $25,000,000
and (C) the aggregate principal amount of all other Indebtedness permitted
by this clause (vii) shall not exceed at any time outstanding $10,000,000;

 

(viii) (A) Indebtedness of any Person that
becomes a Subsidiary after the date hereof, provided that (1) such
Indebtedness exists at the time such Person becomes a Subsidiary and is not
created in contemplation of or in connection with such Person becoming a
Subsidiary and (2) the aggregate amount of Indebtedness permitted by this
clause (viii) (including subclause (B)) shall not exceed $5,000,000 at any
time outstanding, and (B) any refinancings, renewals and replacements of
any such Indebtedness pursuant to the preceding clause (A) that do not
increase the outstanding principal amount (plus accrued interest and
premium) thereof;

 

(ix) Indebtedness owed to any Person (including
obligations in respect of letters of credit for the benefit of such Person)
providing workers’ compensation, health, disability or other employee benefits
or property, casualty or liability insurance pursuant to reimbursement or
indemnification obligations to such Person, in each case incurred in the ordinary
course of business;

 

(x) Indebtedness of the Borrower or any
Subsidiary in respect of performance bonds, bid bonds, appeal bonds, surety
bonds, performance and completion guarantees and similar obligations, in each
case provided in the ordinary course of business;

 

(xi) Indebtedness of any Loan Party pursuant to Swap
Agreements permitted by Section 6.07;

 

(xii) with respect to Holdings, Qualified Holdings
Debt; provided, that no Default has occurred and is continuing or would
result therefrom;

 

(xiii) with respect to the Borrower and the
Guarantors, Additional Subordinated Debt so long as (other than if the proceeds
thereof will be applied to the prepayment, repayment, redemption, repurchase,
defeasance or other retirement of the Senior Subordinated Notes) after giving
effect to the incurrence of such Additional Subordinated Debt on a Pro Forma
Basis, the Leverage Ratio would be less than the Leverage Ratio set forth in Section 6.13
for such date minus 0.25, provided, that the Net Proceeds of such
Additional Subordinated Debt are used, promptly after such Net Proceeds are
received, (A) for Capital Expenditures, (B) for Investments, (C) to
consummate one or more Permitted Acquisitions, (D) to prepay, repay,
redeem, defease, repurchase or otherwise retire any Subordinated Indebtedness, (E) non-recurring
cash charges incurred by the Borrower and its Subsidiaries in an aggregate
amount not to exceed $25,000,000 or (F) to prepay Tranche B Term Loans
pursuant to Section 2.11 (a); provided  further that no
Default has occurred and is continuing or would result therefrom;

 

(xiv) Indebtedness representing deferred compensation
to employees of the Borrower and the Subsidiaries incurred in the ordinary
course of business;

 

62

 

(xv) Indebtedness in respect of promissory notes
issued to consultants, employees or directors or former employees, consultants
or directors in connection with repurchases of Equity Interests permitted by Section 6.08(a)(iii) or
(x)(v);

 

(xvi) Indebtedness of any Foreign Subsidiary or any
Subsidiary of the Borrower that is not a Loan Party in an amount not to exceed
$10,000,000 at any time outstanding;

 

(xvii) other Indebtedness of the Borrower or any
Subsidiary in an aggregate principal amount not exceeding $20,000,000.

 

(b) The Borrower will not, and Holdings and the Borrower will not
permit any Subsidiary to, issue any preferred Equity Interests.

 

(c) Holdings will not issue any preferred Equity Interests other
than Qualified Preferred Stock.

 

SECTION 6.02. Liens. Neither Holdings nor the Borrower
will, nor will they permit any Subsidiary to, create, incur, assume or permit
to exist any Lien on any property or asset now owned or hereafter acquired by
it, or assign or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:

 

(i) Liens created by the Loan Documents;

 

(ii) Permitted Encumbrances;

 

(iii) any Lien on any property or asset of the
Borrower or any Subsidiary existing on the Original Closing Date and set forth
in Schedule 6.02; provided that (A) such Lien shall not
apply to any other property or asset of the Borrower or any Subsidiary and (B) such
Lien shall secure only those obligations which it secures on the Original
Closing Date and extensions, renewals and replacements thereof that do not
increase the outstanding principal amount thereof (plus accrued interest
and premium thereon);

 

(iv) any Lien existing on any property or asset
prior to the acquisition thereof by the Borrower or any Subsidiary or existing
on any property or asset of any Person that becomes a Subsidiary after the date
hereof prior to the time such Person becomes a Subsidiary, provided that
(A) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, as applicable, (B) such
Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (C) such Lien shall secure only those obligations that it
secures on the date of such acquisition or the date such Person becomes a
Subsidiary, as applicable, and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof (plus
accrued interest and premium thereon);

 

(v) Liens on fixed or capital assets acquired,
constructed or improved by the Borrower or any Subsidiary, provided that
(A) such security interests secure Indebtedness permitted by clause (vii) of
Section 6.01 (a), (B) except with respect to the Specified Property,
such security interests and the Indebtedness secured thereby are incurred prior
to or within 120 days after such acquisition or the completion of such
construction or improvement, (C) the Indebtedness secured thereby does not
exceed 100% of the cost of acquiring, constructing or improving such fixed or
capital assets and (D) such security interests shall not apply to any
other property or assets of the Borrower or any Subsidiary;

 

63

 

(vi) Liens of a collecting bank arising in the
ordinary course of business under Section 4-208 of the Uniform Commercial
Code in effect in the relevant jurisdiction covering only the items being
collected upon;

 

(vii) Liens arising out of sale and leaseback
transactions permitted by Section 6.06;

 

(viii) Liens granted by a Subsidiary that is not
a Loan Party in favor of the Borrower or another Loan Party in respect of
Indebtedness owed by such Subsidiary;

 

(ix) licenses, sublicenses, leases or subleases
granted to others not interfering in any material respect with the business of
the Borrower or any Subsidiary;

 

(x) Liens on assets of any Foreign Subsidiary
securing Indebtedness (and related obligations) permitted by Section 6.01 (a) (xvi);
and

 

(xi) Liens on assets of the Borrower or the
Subsidiaries not otherwise permitted by this Section 6.02, so long as
neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair value (determined as of the
date such Lien is incurred) of the assets subject thereto exceeds $5,000,000 at
any time outstanding, provided that in no event shall Holdings, the
Borrower or any Subsidiary create, incur, assume or permit to exist any Lien on
any Equity Interests of the Borrower or any Subsidiary.

 

SECTION 6.03. Fundamental Changes.

 

(a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, merge into or consolidate with any other Person, or permit
any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing, (i) any
Person may merge into the Borrower in a transaction in which the surviving
entity is a Person organized or existing under the laws of the United States of
America, any State thereof or the District of Columbia and, if such surviving
entity is not the Borrower, such Person expressly assumes, in writing, all the
obligations the Borrower under the Loan Documents, (ii) any Person may
merge into any Subsidiary in a transaction in which the surviving entity is a
Subsidiary and, if any party to such merger is a Subsidiary Loan Party, is or
becomes a Subsidiary Loan Party concurrently with such merger, (iii) any
Subsidiary (other than a Subsidiary Loan Party) may liquidate or dissolve if
the Borrower determines in good faith that such liquidation or dissolution is
in the best interests of the Borrower and is not materially disadvantageous to
the Lenders and (iv) any asset sale permitted by Section 6.05(g) may
be effected through the merger of a subsidiary of the Borrower with a third
party, provided that any such merger referred to in clauses (i), (ii), (iii) or
(iv) above involving a Person that is not a wholly owned Subsidiary
immediately prior to such merger shall not be permitted unless also permitted
by Section 6.04.

 

(b) The Borrower will not, and Holdings and the Borrower will not
permit any Subsidiary to, engage to any material extent in any business other
than businesses of the type conducted by the Borrower and the Subsidiaries on
the Closing Date and businesses reasonably related or incidental thereto.

 

(c) Holdings will not engage in any business or activity other
than the ownership of all the outstanding shares of capital stock of the
Borrower and engaging in corporate and administrative functions and other
activities incidental thereto. Holdings will not own or acquire any assets
(other than Equity Interests of the Borrower and the cash proceeds of any
Restricted Payments permitted by Section 6.08 or proceeds of any issuance
of Indebtedness or Equity Interests permitted by this Agreement

 

64

 

pending
application as required by this Agreement) or incur any liabilities (other than
liabilities under and permitted to be incurred under the Loan Documents and
reasonably incurred in connection with its maintenance of its existence and
activities incidental thereto).

 

SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions. Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, purchase or acquire (including pursuant to any merger with
any Person that was not a wholly owned Subsidiary prior to such merger) any
Equity Interests in or evidences of indebtedness or other securities (including
any option, warrant or other right to acquire any of the foregoing) of, make
any loans or advances to, Guarantee any obligations of, or make any investment
or any other interest in, any other Person, or purchase or otherwise acquire
(in one transaction or a series of transactions) any assets of any other Person
constituting a business unit (collectively, “Investments”), except:

 

(i) Permitted Acquisitions, provided that
the sum of all consideration payable in connection with such Permitted
Acquisitions shall not exceed $50,000,000 in the aggregate for the term of the
Agreement;

 

(ii) Permitted Investments;

 

(iii) Investments set forth on Schedule 6.04;

 

(iv) Investments by Holdings in the Borrower and
by the Borrower and the Subsidiaries in Equity Interests in their respective
Subsidiaries, provided that (A) any such Equity Interests held by a
Loan Party shall be pledged pursuant to the Collateral Agreement (subject to
the limitations applicable to common stock of a Foreign Subsidiary referred to
in the definition of “Collateral and Guarantee Requirement”) and (B) the
aggregate amount of investments (other than investments set forth on Schedule
6.04) by Loan Parties in Subsidiaries that are not Loan Parties (together
with outstanding intercompany loans permitted under clause (B) to the
proviso to Section 6.04(v) and outstanding Guarantees permitted to be
incurred under clause (B) to the proviso to Section 6.04(vi)) shall
not exceed $10,000,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs);

 

(v) loans or advances made by the Borrower to any
Subsidiary and made by any Subsidiary to the Borrower or any other Subsidiary, provided
that (A) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged pursuant to the Collateral Agreement and
(B) the amount of such loans and advances made by Loan Parties to
Subsidiaries that are not Loan Parties (together with outstanding investments
permitted under clause (B) to the proviso to Section 6.04(iv) and
outstanding Guarantees permitted under clause (B) to the proviso to Section 6.04(vi))
shall not exceed $10,000,000 at any time outstanding (in each case determined without
regard to any write-downs or write-offs);

 

(vi) Guarantees constituting Indebtedness
permitted by Section 6.01, provided that (and without limiting the
foregoing) the aggregate principal amount of Indebtedness of Subsidiaries that
are not Loan Parties that is Guaranteed by any Loan Party (together with
outstanding investments permitted under clause (B) to the proviso to Section 6.04(iv) and
outstanding intercompany loans permitted under clause (B) to the proviso
to Section 6.04(v)) shall not exceed $10,000,000 at any time outstanding
(in each case determined without regard to any write-downs or write-offs);

 

(vii) receivables or other trade payables owing
to the Borrower or any Subsidiary if created or acquired in the ordinary course
of business consistent with past practice and payable or

 

65

 

dischargeable in accordance with customary trade terms, provided
that such trade terms may include such concessionary trade terms as the
Borrower or any such Subsidiary deems reasonable under the circumstances;

 

(viii) Investments consisting of Equity
Interests, obligations, securities or other property received in settlement of
delinquent accounts of and disputes with customers and suppliers in the
ordinary course of business and owing to the Borrower or any Subsidiary or in
satisfaction of judgments;

 

(ix) Investments by the Borrower or any
Subsidiary in payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business;

 

(x) loans or advances by the Borrower or any
Subsidiary to employees made in the ordinary course of business (including
travel, entertainment and relocation expenses) of the Borrower or any
Subsidiary not exceeding $2,000,000 in the aggregate at any time outstanding
(determined without regard to any write-downs or write-offs of such loans or
advances);

 

(xi) Investments in the form of Swap Agreements permitted
by Section 6.07;

 

(xii) Investments of any Person existing at the time
such Person becomes a Subsidiary of the Borrower or consolidates or merges with
the Borrower or any of the Subsidiaries (including in connection with a
Permitted Acquisition) so long as such investments were not made in
contemplation of such Person becoming a Subsidiary or of such consolidation or
merger;

 

(xiii) Investments received in connection with the
dispositions of assets permitted by Section 6.05;

 

(xiv) Investments constituting deposits described in
clauses (c) and (d) of the definition of the term “Permitted
Encumbrances”;

 

(xv) Investments in Permitted Joint Ventures in an
amount determined at cost not to exceed $15,000,000 outstanding at any time
plus an amount equal to any returns (including dividends, interest,
distributions, returns of principal and profits on sale) actually received in
cash in respect of any such Investments (which amount shall not exceed the
amount of such Investment valued at cost at the time such Investment was made);

 

(xvi) Investments by the Borrower or any Subsidiary in
an aggregate amount, as valued at cost at the time each such Investment is made
and including all related commitments for future advances, not exceeding the
Available Amount immediately prior to the time of the making of any such
Investment; provided that Investments in Permitted Joint Ventures made
pursuant to this subsection (xvi) shall be limited to the amount of Net
Proceeds actually received by the Borrower from the issuance by Holdings of any
Equity Interests (or capital contribution in respect thereof) after the Closing
Date that was not required to be applied to prepay Loans pursuant to Section 2.11
(c)(x), plus the amount of Net Proceeds actually received by the
Borrower from the issuance after the Closing Date of Qualified Holdings Debt;
and

 

(xvii) Investments by the Borrower or any Subsidiary
in an aggregate amount not to exceed the sum of (A) $40,000,000 (of which
$20,000,000 shall be available for royalty lump-sum payments and similar
transactions) and (B) an amount equal to any returns (including dividends,
interest, distributions, returns of principal and profits on sale) actually
theretofore 

 

66

 

received in cash in respect of any such investment, loan or advance
(which amount shall not exceed the amount of such Investment valued at cost at
the time such Investment was made).

 

SECTION 6.05. Asset Sales. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, sell, transfer, lease or
otherwise dispose of any asset, including any Equity Interest owned by it, nor
will the Borrower permit any Subsidiary to issue any additional Equity Interest
in such Subsidiary (other than to the Borrower or another Subsidiary in
compliance with Section 6.04), except:

 

(a) sales, transfers and dispositions of (i) inventory
in the ordinary course of business and (ii) used, obsolete, worn out or
surplus equipment or property in the ordinary course of business;

 

(b) sales, transfers and dispositions to the
Borrower or any Subsidiary, provided that any such sales, transfers or
dispositions involving a Subsidiary that is not a Loan Party shall be made in
compliance with Section 6.09;

 

(c) sales, transfers and dispositions of accounts
receivable in connection with the compromise, settlement or collection thereof
consistent with past practice;

 

(d) sales, transfers and dispositions of property
to the extent such property constitutes an investment permitted by clauses
(ii), (viii), (xii) and (xiv) of Section 6.04;

 

(e) sale and leaseback transactions permitted by Section 6.06,
including, without limitation, the sale and leaseback of the properties listed
on Schedule 6.06 and the Specified Property;

 

(f) dispositions resulting from any casualty or
other insured damage to, or any taking under power of eminent domain or by
condemnation or similar proceeding of, any property or asset of the Borrower or
any Subsidiary;

 

(g) sales, transfers and other dispositions of
assets (other than Equity Interests in a Subsidiary unless all Equity Interests
in such Subsidiary are sold) that are not permitted by any other paragraph of
this Section 6.05, provided that the aggregate fair value of all
assets sold, transferred or otherwise disposed of in reliance upon this
paragraph (g) shall not exceed $10,000,000 during the term of this
Agreement; and

 

(h) exchanges of property for similar replacement
property for fair value;

 

provided
that all sales, transfers, leases and other dispositions permitted hereby
(other than those permitted by paragraphs (b), (c) and (f) above)
shall be made for fair value and (other than those permitted by paragraphs (b),
(d) and (h) above) for at least 75% cash consideration, plus
(for all such sales, transfers, leases and other dispositions permitted hereby)
an aggregate additional amount of non-cash consideration in the amount of
$2,500,000 (it being understood that for purposes of paragraph (a) above,
accounts receivable received in the ordinary course and any property received
in exchange for used, obsolete, worn out or surplus equipment or property and
any non-cash consideration that was actually converted into cash within 6
months following the applicable sale, transfer, lease or other disposition by
the Borrower or any of its Subsidiaries shall be deemed to constitute cash
consideration).

 

SECTION 6.06.  Sale and Leaseback Transactions.
Neither Holdings nor the Borrower will, nor will they permit any Subsidiary to,
enter into any arrangement, directly or indirectly, whereby it

 

67

 

shall sell or
transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred, except for (x) any
such sale of any fixed or capital assets by the Borrower or any Subsidiary that
is made for cash consideration in an amount not less than the fair value of
such fixed or capital asset and is consummated within 120 days after the
Borrower or such Subsidiary acquires or completes the construction of such
fixed or capital asset, (y) sale and leaseback transactions with respect
to properties acquired after the Closing Date, where the Fair Market Value of
such properties in the aggregate does not to exceed $5,000,000 or (z) the
sale and leaseback of the properties listed on Schedule 6.06 and the
Specified Property.

 

SECTION 6.07. Swap Agreements. Neither Holdings nor the
Borrower will, nor will they permit any Subsidiary to, enter into any Swap
Agreement, except (a) Swap Agreements entered into to hedge or mitigate
risks to which the Borrower or any Subsidiary has actual exposure (other than
those in respect of Equity Interests of the Borrower or any of the
Subsidiaries) and (b) Swap Agreements entered into in order to effectively
cap, collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Borrower or any Subsidiary.

 

SECTION 6.08. Restricted Payments; Certain Payments of
Indebtedness.

 

(a) Neither Holdings nor the Borrower will, nor will they permit
any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, or incur any obligation (contingent or
otherwise) to do so, except:

 

(i) each of Holdings and the Borrower may declare
and pay dividends with respect to its common stock payable solely in additional
shares of its common stock, and, with respect to its preferred stock, payable
solely in additional shares of such preferred stock or in shares of its common
stock;

 

(ii) Subsidiaries may declare and pay dividends ratably
with respect to their capital stock, membership or partnership interests or
other similar Equity Interests;

 

(iii) Holdings may (or may make Restricted
Payments to allow a Parent to) purchase or redeem (and the Borrower may declare
and pay dividends or make other distributions to Holdings, the proceeds of
which are used by Holdings or a Parent to purchase or redeem) Equity Interests
of Holdings or a Parent acquired by employees, consultants or directors of
Holdings, the Borrower or any Subsidiary upon such Person’s death, disability,
retirement or termination of employment, provided that the aggregate
amount of such purchases or redemptions under this clause (iii) shall not
exceed $10,000,000 during the term of this Agreement;

 

(iv) the Borrower may make Restricted Payments to
Holdings to be used by Holdings solely to pay (or to make Restricted Payments
to allow a Parent to pay) its franchise taxes and other fees required to
maintain its corporate existence and to pay for general corporate and overhead
expenses (including salaries and other compensation of employees) incurred by
Holdings or a Parent in the ordinary course of its business, provided
that such Restricted Payments shall not exceed $2,000,000 in any fiscal year;

 

(v) the Borrower may make Restricted Payments to
Holdings in an amount necessary to enable Holdings to pay (or make Restricted
Payments to allow a Parent to pay) the Taxes directly attributable to (or
arising as a result of) the operations of a Parent, Holdings, the Borrower and
the Subsidiaries, provided that (A) the amount of such Restricted
Payments shall

 

68

 

not exceed the amount that the Borrower and the Subsidiaries would be
required to pay in respect of Federal, state and local taxes were the Borrower
and the Subsidiaries to pay such taxes as stand-alone taxpayers (including any
interest or penalties thereon, if applicable) and (B) all Restricted
Payments made to Holdings or a Parent pursuant to this clause (v) are used
by Holdings or a Parent for the purposes specified herein within 20 days of the
receipt thereof;

 

(vi) cashless repurchases of Equity Interests of
Holdings deemed to occur upon exercise of stock options or warrants if such
Equity Interests represent a portion of the exercise price of such options or
warrants;

 

(vii) the Borrower may make Restricted Payments
to Holdings to make interest payments on Qualified Holdings Debt so long as (A) no
Default or Event of Default has occurred and is continuing or would result therefrom
and (B) the Leverage Ratio after giving pro forma effect thereto is equal
to or less than 3.75 to 1.00;

 

(viii) the Borrower may make Restricted Payments
to Holdings (and Holdings may make Restricted Payments with such amounts
received from the Borrower) to pay management, consulting and advisory fees to
any Sponsor or Sponsor Affiliate to the extent permitted by Section 6.09;

 

(ix) the Borrower and the Subsidiaries may make
additional Restricted Payments (and Holdings may make Restricted Payments with
such amounts received from the Borrower) in an aggregate amount not exceeding
the Available Amount immediately prior to the time of the making of such
Restricted Payment; provided, that (A) immediately prior to and
after giving effect to such Restricted Payment, the Leverage Ratio is less than
or equal to 4.25 to 1.00 and (B) no Default or Event of Default has
occurred and is continuing or would result therefrom;

 

(x) the Borrower may make Restricted Payments to
Holdings to pay any nonrecurring fees, cash charges and cost expenses incurred
in connection with the issuance of Equity Interests, in each case only lo the
extent that such transaction is not consummated;

 

(xi) payments to former stockholders of the Borrower
in connection with the exercise of appraisal rights under applicable law;

 

(xii) the payment of dividends described in Schedule
4.01(h);

 

(xiii) the Borrower and its Subsidiaries may make
additional Restricted Payments (and Holdings may make Restricted Payments with
such amounts received from the Borrower) in an aggregate amount not to exceed
$10,000,000, provided that no Default or Event of Default has occurred
and is continuing or would result therefrom;

 

(xiv) subject to the requirements of Section 2.11,
Holdings may make Restricted Payments with the Net Proceeds received by
Holdings from any issuance of any Equity Interests (or capital contribution in
respect thereof) or Qualified Holdings Debt to the extent such Net Proceeds are
not contributed or otherwise received by the Borrower or any of its
Subsidiaries; provided that no Default or Event of Default has occurred
and is continuing or would result therefrom; and

 

(xv) the Borrower may make Restricted Payments to
Holdings and Holdings may purchase or redeem the Specified Interests in accordance
with the Stockholders Agreement in an aggregate amount not to exceed
$20,000,000; provided, that (A) no Default or Event of Default

 

69

 

has occurred and is continuing or would result therefrom and (B) after
giving effect thereto and any Borrowings to finance the payment thereof, the
Borrower is in pro forma compliance with the financial covenants set forth in
Sections 6.12 and 6.13.

 

(b) The Borrower will not nor will it permit any Subsidiary to,
make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect
of principal of or interest on, or any payment or other distribution (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of, any Subordinated Indebtedness (other than
intercompany loans among Subsidiaries and the Borrower), except:

 

(i) payment of regularly scheduled interest and
principal payments as and when due in respect of any Subordinated Indebtedness,
other than as prohibited by the subordination provisions thereof;

 

(ii) the conversion or exchange of any
Subordinated Indebtedness into, or redemption, repurchase, prepayment,
defeasance or other retirement of any such Indebtedness with the Net Proceeds
of the issuance by Holdings or a Parent of, (A) Equity Interests (or
capital contributions in respect thereof) after the Closing Date to the extent
not Otherwise Applied or (B) Qualified Holdings Debt, plus any fees
and expenses in connection with such conversion, exchange, redemption,
repurchase, prepayment, defeasance or other retirement;

 

(iii) so long as no Default or Event of Default
has occurred and is continuing or would result therefrom, the prepayment,
repayment, redemption, defeasance, repurchase or other retirement of
Subordinated Indebtedness (A) in an aggregate amount not to exceed the
Available Amount; provided, that immediately prior to and after giving
effect to such payments, the Leverage Ratio is less than or equal to 4.25 to
1.00, or (B) with proceeds received from the incurrence of Additional
Subordinated Debt permitted by Section 6.01; and

 

(iv) so long as no Default or Event of Default
has occurred and is continuing or would result therefrom, the prepayment,
redemption, defeasance, repurchase or other retirement of the Senior
Subordinated Notes with the proceeds of an IPO.

 

(c) Neither Holdings nor the Borrower will allow,
at any time, less than 51 % of the Senior Subordinated Notes to be held by one
or more of the Sponsor and the Sponsor Affiliates.

 

SECTION 6.09. Transactions with Affiliates. Neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except

 

(a) transactions that are at prices and on terms
and conditions not less favorable to Holdings, the Borrower or such Subsidiary
than could be obtained on an arm’s-length basis from unrelated third parties,

 

(b) (i) transactions between or among the
Borrower and the Subsidiary Loan Parties, and (ii) transactions between or
among the Borrower and its subsidiaries consistent with past practice and made
in the ordinary course,

 

(c) any investment permitted under Section 6.04(iv),
6.04(v), 6.04(vii) or 6.04(xiii),

 

70

 

(d) any Indebtedness permitted under Section 6.01(a)(v) and
Section 6.01(a)(xii),

 

(e) any Restricted Payment permitted under Section 6.08,

 

(f) loans or advances to employees permitted
under Section 6.04,

 

(g) any lease entered into between the Borrower or
any Subsidiary, as lessee, and any of the Affiliates (as of the Closing Date)
of the Borrower or entity controlled by such Affiliates, as lessor, which is
approved in good faith by a majority of the disinterested members of the Board
of Directors of the Borrower,

 

(h) so long as no Default described in Section 7.01(b) and
no Event of Default has occurred and is continuing, the Borrower may pay, or
may pay cash dividends to enable Holdings to pay, (A) customary
management, consulting, monitoring or advisory fees to the Sponsor or any
Sponsor Affiliates in an aggregate amount not greater than $500,000 during any
fiscal year (plus any unpaid management, consulting, monitoring or advisory
fees within such amount accrued in any prior year) and (B) fees in respect
of any financings, acquisitions or dispositions with respect to which the
Sponsor or any Sponsor Affiliate acts as an adviser to Holdings, the Borrower
or any Subsidiary in an amount not to exceed 2.0% of the value of any such
transaction,

 

(i) any contribution to the capital of Holdings
directly or indirectly by the Permitted Investors or any purchase of Equity
Interests of Holdings by the Permitted Investors not prohibited by this
Agreement,

 

(j) the payment of reasonable fees to directors
of Holdings, the Borrower or any Subsidiary who are not employees of Holdings,
the Borrower or any Subsidiary, and compensation and employee benefit
arrangements paid to, and indemnities provided for the benefit of, directors,
officers or employees of Holdings, the Borrower or any Subsidiary in the
ordinary course of business,

 

(k) any issuances of securities or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment agreements, stock options and stock ownership plans
approved by the Borrower’s Board of Directors,

 

(l) transactions pursuant to agreements set forth
on Schedule 6.09 and any amendments thereto to the extent such
amendments are not materially less favorable to the Borrower or such Subsidiary
Loan Party than those provided for in the original agreements,

 

(m) employment and severance arrangements entered
into in the ordinary course of business and approved by the Borrower’s Board of
Directors between a Parent, Holdings, the Borrower or any Subsidiary and any
employee thereof, and

 

(n) the Transactions, including the payment of
the dividend and all related fees and expenses.

 

SECTION 6.10. Restrictive Agreements.

 

(a) Subject to clauses (b) through (d) below, neither
Holdings nor the Borrower will, nor will they permit any Subsidiary to,
directly or indirectly, enter into, incur or permit to exist any agreement or
other arrangement that prohibits, restricts or imposes any condition upon (i) the
ability of Holdings, the Borrower or any Subsidiary to create, incur or permit
to exist any Lien upon any of its

 

71

 

property or assets
or (ii) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary.

 

(b) The foregoing clause (a) shall not apply to restrictions
and conditions (i) imposed by law or by any Loan Document, Senior
Subordinated Notes Document or documentation governing any Additional
Subordinated Debt or Indebtedness of a Foreign Subsidiary permitted to be
incurred under this Agreement (provided that such restrictions shall
apply only to such Foreign Subsidiary) (ii) existing on the date hereof
identified on Schedule 6.10 (but shall apply to any extension or renewal
of, or any amendment or
modification expanding the scope of, any such restriction or condition), (iii) contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder and (iv) imposed by any
customary provisions restricting assignment of any agreement entered into the
ordinary course of business.

 

(c) The foregoing clause (a)(i) shall not apply to
restrictions or conditions (i) imposed by any agreement relating to
secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and (ii) imposed
by customary provisions in leases restricting the assignment thereof.

 

(d) The foregoing clause (a)(ii) shall not apply to customary
provisions in joint venture agreements relating to purchase options, rights of
first refusal or call or similar rights of a third party that owns Equity
Interests in such joint venture.

 

SECTION 6.11. Amendment of Material Documents. Neither
Holdings nor the Borrower will; nor will they permit any Subsidiary to, amend,
modify or waive any of its rights under (a) any Senior Subordinated Notes
Document, (b) the documentation governing any Qualified Holdings Debt, (c) the
documentation governing any Additional Subordinated Debt (d) any Original
Transaction Document or (e) its certificate of incorporation, by-laws or
other organizational documents, in each case to the extent such amendment,
modification or waiver would be materially adverse to the Lenders.

 

SECTION 6.12. Interest Expense Coverage Ratio. The Borrower
will not permit the ratio (the “Interest Expense Coverage Ratio”) of (a) Consolidated
EBlTDA to (b) cash interest expense of Holdings and its subsidiaries, in
each case for any period of four consecutive fiscal quarters (or, if less, the
number of full fiscal quarters subsequent to the Original Closing Date) ending
on any date set forth below, to be less than the ratio set forth below opposite
such date:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  September 30,
  2006

  	
   

  	
  1.75 to l.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  1.75 to 1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  2.00 to 1.00

  	
   

  

 

72

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  June 30,
  2008

  	
   

  	
  2.00 to 1.00

  	
   

  
	
  September 30,
  2008 and thereafter

  	
   

  	
  2.25 to 1.00

  	
   

  

 

provided, that for the purposes of determining the ratio
described above for the fiscal quarter ending September 30, 2006 and December 31,
2006, cash interest expense of Holdings and its subsidiaries for the relevant
period shall be deemed to equal cash interest expense of Holdings and its
subsidiaries for such fiscal quarter (and, in the case of each such
determination, each previous fiscal quarter commencing after the Closing Date) multiplied
by 2 and 4/3, respectively; provided, further, that any such cash
interest expense that is payable semi-annually and reflected as cash interest
expense on a semi-annual basis shall not be subject to the foregoing proviso to
the extent that the relevant semi-annual period is not contained in full in the
applicable period of four consecutive fiscal quarters.

 

SECTION 6.13. Leverage Ratio. The Borrower will not permit
the Leverage Ratio as of any date set forth below to exceed the ratio set forth
opposite such date:

 

	
  Date

  	
   

  	
  Ratio

  	
   

  
	
  September 30,
  2006

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  6.50 to 1.00

  	
   

  
	
  March 31,
  2007

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  6.25 to 1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  6.00 to 1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  5.75 to 1.00

  	
   

  
	
  March 31,
  2008

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  5.50 to 1.00

  	
   

  
	
  September 30,
  2008 .

  	
   

  	
  5.25 to 1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  5.00 to 1.00

  	
   

  
	
  March 31,
  2009

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  June 30,
  2009

  	
   

  	
  4.75 to 1.00

  	
   

  
	
  September 30,
  2009

  	
   

  	
  4.50 to 1.00

  	
   

  
	
  December 31,
  2009

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  March 31,
  2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  June 30,
  2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  September 30,
  2010

  	
   

  	
  4.00 to 1.00

  	
   

  
	
  December 31,
  2010 and thereafter

  	
   

  	
  3.75 to 1.00

  	
   

  

 

SECTION 6.14. Intentionally Deleted.

 

SECTION 6.15. Maximum Capital Expenditures. The Borrower
will not, nor will it permit any Subsidiary to, incur or make any Capital
Expenditures except and as set forth below:

 

73

 

	
   

  	
   

  	
  Maximum

  	
   

  
	
  Fiscal Year

  	
   

  	
  Capital Expenditures

  	
   

  
	
  2006

  	
   

  	
  $

  	
  15 million

  	
   

  
	
  2007

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2008

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2009

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2010

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2011

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2012

  	
   

  	
  $

  	
  10 million

  	
   

  
	
  2013

  	
   

  	
  $

  	
  10 million

  	
   

  

 

provided,
however, that to the extent that actual Capital Expenditures made in any
such fiscal year shall be less than the maximum amount set forth above for such
fiscal year (without giving effect to the carryover permitted by this proviso),
the difference between said stated maximum amount and such actual Capital
Expenditures shall, in addition, be available for Capital Expenditures in the
next succeeding fiscal year and, in the case of fiscal year 2006, the excess of
$15,000,000 over actual Capital Expenditures made in fiscal year 2005 shall
also be available; provided further, however, that no portion of the such
amount carried over from the previous fiscal year shall be allocated to Capital
Expenditures in the next fiscal year until the amount allocated to the current
fiscal year is exhausted.

 

ARTICLE VII

 

Events of Default

 

SECTION 7.01. Events of Default. If any of the following
events (any such event, an “Event of Default”) shall occur:

 

(a) the Borrower shall fail to pay any principal of any Loan or
any reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or otherwise;

 

(b) the Borrower shall fail to pay any interest on any Loan or any
fee or any other amount (other than an amount referred to in paragraph (a) of
this Section 7.01) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three Business Days;

 

(c) any representation or warranty made or deemed made by or on
behalf of Holdings, the Borrower or any Subsidiary in or in connection with any
Loan Document or any amendment or modification thereof or waiver thereunder, or
in any report, certificate, financial statement or other document furnished
pursuant to or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, shall prove to have been incorrect
in any material respect (except to the extent any such representation or
warranty is qualified by “materially,” “Material Adverse

 

74

 

Effect” or a
similar term, in which case such representation or warranty shall prove to have
been incorrect in any respect) when made or deemed made;

 

(d) Holdings or the Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02, 5.03, 5.04
(with respect to the existence of Holdings and the Borrower), 5.11 or in Article VI;

 

(e) Holdings, the Borrower or any Subsidiary Loan Party shall fail
to observe or perform any covenant, condition or agreement contained in any
Loan Document (other than those specified in paragraph (a), (b) or (d) of
this Section 7.01), and such failure shall continue unremedied for. a
period of 30 days after notice thereof from the Administrative Agent to the
Borrower (which notice will be given at the request of any Lender);

 

(f) Holdings, the Borrower or any Subsidiary shall fail to make
any payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become due and
payable (after giving effect to any applicable grace period);

 

(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its
or their behalf to cause any Material Indebtedness to become due, or to require
the prepayment, repurchase, redemption or defeasance thereof, prior to its
scheduled maturity, provided that this paragraph (g) shall not
apply to secured Indebtedness that becomes due as a result of the voluntary
sale or transfer of the property or assets (to the extent not prohibited under
this Agreement) securing such Indebtedness;

 

(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Holdings, the Borrower or any Subsidiary or its debts, or
of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for Holdings, the Borrower or any Subsidiary or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;

 

(i) Holdings, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in paragraph (h) of this Section 7.01,
(iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Subsidiary or for a substantial part of its assets, (iv) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors or (vi) take any formal action for the purpose of effecting any
of the foregoing;

 

(j) Holdings, the Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they
become due;

 

(k) one or more judgments for the payment of money (to the extent
not paid or covered by insurance provided by a carrier that has acknowledged
its obligation to pay such claim in writing and that has a credit rating of at
least “A” by A.M. Best Company, Inc.) in an aggregate amount in
excess of $10,000,000 shall be rendered against Holdings, the Borrower, any
Subsidiary or any

 

75

 

combination
thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action
shall be legally taken by a judgment creditor to attach or levy upon any assets
of Holdings, the Borrower or any Subsidiary to enforce any such judgment;

 

(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and the Subsidiaries in an aggregate amount exceeding $10,000,000 for all
periods;

 

(m) any Lien purported to be created under any Security Document
shall cease to be, or shall be asserted by any Loan Party not to be, a valid
and perfected Lien on any Collateral with a fair value in excess of $5,000,000,
with the priority required by the applicable Security Document, except (i) as
a result of the sale or other disposition of the applicable Collateral in a
transaction permitted under the Loan Documents or (ii) as a result of the
Administrative Agent’s failure to maintain possession of any stock
certificates, promissory notes or other instruments delivered to it under the
Collateral Agreement;

 

(n) any Loan Document shall cease to be in full force and effect
(other than in accordance with the terms of the Loan Documents) or shall for
any reason be asserted by any Loan Party not to be a legal, valid and binding
obligation of any party thereto;

 

(o) the Guarantees of the Obligations by Holdings and the
Subsidiary Loan Parties pursuant to the Collateral Agreement shall cease to be
in full force and effect (other than in accordance with the terms of the Loan
Documents) or shall be asserted by Holdings, the Borrower or any Subsidiary
Loan Party not to be in effect or not to be legal, valid and binding
obligations;

 

(p) the Senior Subordinated Notes, any Additional Subordinated
Debt, any Qualified Holdings Debt or any Guarantees thereof shall cease, for
any reason, to be validly subordinated to the Obligations or the obligations of
Holdings and the Subsidiary Loan Parties in respect of their Guarantees under
the Collateral Agreement, as applicable, as provided in the Senior Subordinated
Notes Documents, the documentation governing any Additional Subordinated Debt
or the documentation governing any Qualified Holdings Debt, as applicable, or
any Loan Party or the holders of at least 25% in aggregate principal amount of
the Senior Subordinated Notes, any series of Additional Subordinated Debt or
any series of Qualified Holdings Debt shall so assert; or

 

(q) a Change in Control shall occur;

 

then, and in every
such event (other than an event with respect to the Borrower described in
paragraph (h) or (i) of this Section 7.01), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or
in part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower;
and in case of any event with respect to the Borrower described in paragraph (h) or
(i) of this Section 7.01, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with
accrued interest thereon and all fees and other obligations of the Borrower

 

76

 

accrued hereunder,
shall automatically become due and payable, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower.

 

SECTION 7.02. Borrower’s Right to Cure.

 

(a) Notwithstanding anything to the contrary contained in Section 7.01,
in the event that the Borrower fails to comply with the requirement of any
Financial Performance Covenant, until the expiration of the fifth Business Day
subsequent to the date on which financial statements with respect to the fiscal
period for which such Financial Performance Covenant is being measured are
required to be delivered pursuant to Section 5.01, Holdings shall have the
right to issue Permitted Securities (the “Cure Right”), and upon the
receipt by the Borrower of cash (such amount of cash being referred to as the “Cure
Amount”) pursuant to the exercise by Holdings of such Cure Right, such
Financial Performance Covenants shall be recalculated giving effect to the
following pro forma adjustments:

 

(i) Consolidated EBITDA shall be increased,
solely for the purpose of determining the existence of a Default or Event of
Default under the Financial Performance Covenants with respect to any period of
four consecutive fiscal quarters that includes the fiscal quarter for which the
Cure Right was exercised and not for any other purpose under this Agreement, by
an amount equal to the Cure Amount; and

 

(ii) if, after giving effect to the foregoing
recalculations, the Borrower shall then be in compliance with the requirements
of all Financial Performance Covenants (including for purposes of Section 4.02),
the Borrower shall be deemed to have satisfied the requirements of the Financial
Performance Covenants as of the relevant date of determination with the same
effect as though there had been no failure to comply therewith at such date,
and the applicable breach or default of the Financial Performance Covenants
that had occurred shall be deemed cured for the purposes of this Agreement.

 

(b) Notwithstanding anything herein to the contrary, the Cure
Amount shall not exceed $10,000,000; provided that any such prepayment
shall not reduce any Lender’s Revolving Commitment; provided  further
that (a) in each four fiscal quarter period there shall be a period of at
least two fiscal quarters in which no Cure Right is made, (b) in each
eight fiscal quarter period there shall be a period of at least four
consecutive fiscal quarters during which no Cure Right is made and (c) the
Cure Amount shall be no greater than the amount required to cause Borrower to
be in compliance with such Financial Performance Covenant.

 

SECTION 7.03. Exclusion of Immaterial Subsidiaries. Solely
for the purposes of determining whether a Default has occurred under clause (h) or
(i) of Section 7.01, any reference in any such clause to any
Subsidiary shall be deemed not to include any Subsidiary affected by any event
or circumstance referred to in any such clause that did not, as of the last day
of the fiscal quarter of the Borrower most recently ended, have assets with a
value in excess of 5% of the consolidated total assets of the Borrower and the
Subsidiaries or 5% of the total revenues of the Borrower and the Subsidiaries
as of such date; provided that if it is necessary to exclude more than
one Subsidiary from clause (h) or (i) of Section 7.01 pursuant
to this Section 7.03 in order to avoid an Event of Default thereunder, all
excluded Subsidiaries shall be considered to be a single consolidated
Subsidiary for purposes of determining whether the condition specified above is
satisfied.

 

77

 

ARTICLE VIII

 

The Agents

 

SECTION 8.01.  The Agents.
Each of the Lenders and the Issuing Bank hereby irrevocably appoints the
Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms of the Loan Documents, together with such
actions and powers as are reasonably incidental thereto. For purposes of this Article VIII,
all references to the Administrative Agent shall be deemed to be references to
both the Administrative Agent and the Collateral Agent.

 

The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.

 

The Administrative Agent shall not have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall
not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Administrative Agent is required to
exercise in writing as directed by the Required Lenders (or such other number
or percentage of the Lenders as shall be necessary under the circumstances as
provided in Section 2.05(j) and Section 9.02), and (c) except
as expressly set forth in the Loan Documents, the Administrative Agent shall
not have any duty to disclose, and shall not be liable for the failure to
disclose, any information relating to Holdings, the Borrower or any of the
Subsidiaries that is communicated to or obtained by the bank serving as
Administrative Agent or any of its Affiliates in any capacity. The
Administrative Agent shall not be liable for any action taken or not taken by
it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02) or in the absence of its own
gross negligence or willful misconduct. The Administrative Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Administrative Agent by Holdings, the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered thereunder or
in connection therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the validity, enforceability, effectiveness or genuineness
of any Loan Document or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article IV or elsewhere in any
Loan Document, other than to confirm receipt of items expressly required to be
delivered to the Administrative Agent.

 

The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The
Administrative Agent also may rely upon any statement made to it orally or by
telephone and believed by it to be made by the proper Person, and shall not
incur any liability for relying thereon. The Administrative Agent may consult
with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more subagents
appointed by the Administrative Agent. The Administrative Agent and any such
subagent may perform any and all its duties and exercise its rights and

 

78

 

powers through
their respective Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such subagent and to the Related Parties of each
Administrative Agent and any such subagent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.

 

The Administrative Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Administrative Agent which shall be a bank with an
office in New York, New York, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Administrative Agent hereunder by a successor,
such successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder. The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the Administrative Agent’s
resignation hereunder, the provisions of this Article and Section 9.03
shall continue in effect for the benefit of such retiring Administrative Agent,
its subagents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as
Administrative Agent.

 

Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue lo make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or related agreement or any document
furnished hereunder or thereunder.

 

The Issuing Bank shall act on behalf of the Lenders with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
Issuing Bank shall have all of the benefits and immunities (i) provided to
this Article VIII with respect to any acts taken or omissions suffered by
the LC Issuer in connection with Letters of Credit issued by it or proposed to
be issued by it and Issuer Documents pertaining to such Letters of Credit as
fully as if the term “Administrative Agent” as used in this Article VIII
included the Issuing Bank with respect to such acts or omissions, and (B) as
additionally provided herein with respect to the issuing Bank.

 

The Arrangers and the Syndication Agent, in their respective capacities
as such, shall have no duties or responsibilities, and shall incur no
liability, under this Agreement and the other Loan Documents.

 

ARTICLE IX

 

Miscellaneous

 

SECTION 9.01. Notices.

 

(a) All notices and other communications provided for herein shall
be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:

 

79

 

(i) if to the Borrower, to AGA Medical
Corporation, 682 Mendelssohn Avenue, Golden Valley, Minnesota 55427, Attention:
Chief Executive Officer (Telecopy No. (763) 513-9226);

 

(ii) if to the Administrative Agent, the
Collateral Agent or the Swingline Lender, to Lehman Commercial Paper Inc., 745
Seventh Avenue, New York, New York 10019, Attention: Maritza Ospine (Telecopy No. (646)
758-4648), with a copy to Weil, Gotshal & Manges LLP, 767 Fifth
Avenue, New York, NY 10153, Attention: Andrew Colao, Esq. Telecopy No. (212
310-8007); and

 

(iii) if to any other Lender, to it at its
address (or telecopy number) set forth in its Administrative Questionnaire.

 

(b) Notices and other communications to the Lenders hereunder may
be delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall
not apply to notices pursuant to Article II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.

 

(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the Administrative
Agent (and, in the case of the Administrative Agent, by written notice to the
Borrower). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.

 

SECTION 9.02. Waivers; Amendments.

 

(a) No failure or delay by the Administrative Agent, the Issuing
Bank, the Collateral Agent, the Swingline Lender or any Lender in exercising
any right or power hereunder or under any other Loan Document shall operate as
a waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent, the
Issuing Bank, the Collateral Agent, the Swingline Lender and the Lenders
hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver
of any provision of any Loan Document or consent to any departure by any Loan
Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 9.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be construed as a waiver
of any Default, regardless of whether the Administrative Agent, any Lender, the
Collateral Agent, the Swingline Lender or the Issuing Bank may have had notice
or knowledge of such Default at the time.

 

(b) Except as provided in Section 2.20 with respect to an
Incremental Facility Amendment (or to give effect to any restatement of this
Agreement, the substantive terms of which are otherwise permitted hereby),
neither this Agreement nor any other Loan Document nor any provision hereof or
thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders or, in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered

 

80

 

into by the
Administrative Agent and the Loan Party or Loan Parties that are parties
thereto, in each case with the consent of the Required Lenders; provided
that no such agreement shall

 

(i) increase the Commitment of any Lender without
the written consent of such Lender,

 

(ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,

 

(iii) postpone the maturity of any Loan, or any
scheduled date of payment of the principal amount of any Tranche B Term Loan
under Section 2.10, the required date of reimbursement of any LC
Disbursement, or any date for the payment of any interest or fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the
written consent of each Lender affected thereby,

 

(iv) change Section 2.18(b) or (c) in
a manner that would alter the pro  rata sharing of payments
required thereby, without the written consent of each Lender,

 

(v) change any of the provisions of this Section 9.02
or the percentage set forth in the definition of “Required Lenders” or any
other provision of any Loan Document specifying the number or percentage of
Lenders (or Lenders of any Class) required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (or each Lender of such Class, as
applicable),

 

(vi) release Holdings or any Subsidiary Loan
Party from its Guarantee under the Collateral Agreement (except as provided in Section 9.15
or in the Collateral Agreement) or limit its liability in respect of such
Guarantee, without the written consent of each Lender,

 

(vii) release all or substantially all the
Collateral from the Liens of the Security Documents (except as provided in Section 9.15
or in the Collateral Agreement), without the written consent of each Lender, or

 

(viii) change any provisions of any Loan Document
in a manner that by its terms adversely affects the rights in respect of
payments due to Lenders holding Loans of any Class differently than those
holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each adversely affected Class, or

 

(ix) impose restrictions on assignments and
participations that are more restrictive than, or additional to, those set
forth in Section 9.04, without the written consent of each Lender affected
thereby,

 

provided,
further, that (A) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent, the Issuing
Bank or the Swingline Lender without the prior written consent of the
Administrative Agent, the Issuing Bank or the Swingline Lender, as applicable,
and (B) any waiver, amendment or modification of this Agreement that by
its terms affects the rights or duties under this Agreement of the Revolving
Lenders (but not the Tranche B Term Loan Lenders) or the Tranche B Term Loan
Lenders (but not the Revolving Lenders) may be effected by an agreement or
agreements in writing entered into by Holdings, the Borrower and requisite
percentage in interest of the affected Class of

 

81

 

Lenders that would
be required to consent thereto under this Section 9.02(b) if such Class of
Lenders were the only Class of Lenders hereunder at the time. In
connection with any proposed amendment, modification, waiver or termination (a “Proposed
Change”) requiring the consent of all affected Lenders, if the consent of
the Supermajority Lenders (and, to the extent any Proposed Change requires the
consent of Lenders holding Loans of any Class pursuant to clause (viii) of
this Section 9.02(b), the consent of not less than 75% in interest of the
outstanding Loans and unused Commitments of such Class) to such Proposed Change
is obtained, but the consent to such Proposed Change of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this Section 9.02(b) being referred to as a “Non-Consenting
Lender”), then, so long as the Lender that is acting as the Administrative
Agent is not a Non-Consenting Lender, at the Borrower’s request, any assignee
that is acceptable to the Administrative Agent shall have the right, with the
Administrative Agent’s consent, to purchase from such Non-Consenting Lender,
and such Non-Consenting Lender agrees that it shall, upon the Borrower’s
request, sell and assign to such assignee, at no expense to such Non-Consenting
Lender, all the Commitments, Tranche B Term Loans and Revolving Exposure of
such Non-Consenting Lender for an amount equal to the principal balance of all
Tranche B Term Loans and Revolving Loans (and funded participations in
Swingline Loans and unreimbursed LC Disbursements) held by such Non-Consenting
Lender and all accrued interest and fees with respect thereto through the date
of sale (including amounts under Sections 2.15, 2.16 and 2.17), such purchase
and sale to be consummated pursuant to an executed Assignment and Assumption in
accordance with Section 9.04(b) (which Assignment and Assumption need
not be signed by such Non-Consenting Lender).

 

(c) Notwithstanding the provisions of clause (b), this Agreement
may be amended (or amended and restated) with the written consent of the
Required Lenders, the Administrative Agent, Holdings and the Borrower (i) to
add one or more additional credit facilities to this Agreement and to permit
the extensions of credit from time to time thereunder and the accrued interest
and fees in respect thereof to share ratably in the benefits of this Agreement
and the other Loan Documents with the Tranche B Term Loans and the Revolving
Loans  and the accrued interest
and fees in respect thereof, and (ii) to include appropriately the Lenders
holding such credit facilities in any determination of the Required Lenders. In
addition, this Agreement may be amended with the written consent of the
Administrative Agent, Holdings, the Borrower and the Lenders providing the
relevant Replacement Term Loans (as defined below) to permit the refinancing of
all outstanding Tranche B Term Loans (the “Refinanced Tranche B Term Loans”)
with a replacement term loan tranche hereunder (the “Replacement Term Loans”);
provided that (i) the aggregate principal amount of such
Replacement Term Loans shall not exceed the aggregate principal amount of such
Refinanced Tranche B Term Loans, (ii) the Term Loan Applicable Rate for
such Replacement Term Loans shall not be higher than the Term Loan Applicable
Rate for such Refinanced Tranche B Term Loans, (iii) the weighted average
life to maturity of such Replacement Term Loans shall not be shorter than the
weighted average life to maturity of such Refinanced Tranche B Term Loans at
the time of such refinancing (except to the extent of nominal amortization for
periods where amortization has been eliminated as a result of prepayment of the
Tranche B Term Loans) and (iv) all other terms applicable to such
Replacement Term Loans shall be substantially identical to, or less favorable
to the Lenders providing such Replacement Term Loans than, those applicable to
such Refinanced Tranche B Term Loans, except to the extent necessary to provide
for covenants and other terms applicable to any period after the latest final
maturity of the Tranche B Term Loans in effect immediately prior to such
refinancing.

 

SECTION 9.03. Expenses; Indemnity; Damage Waiver.

 

(a) The Borrower shall pay (i) all reasonable out-of-pocket
expenses incurred by the Agents and their respective Affiliates, including the
reasonable fees, charges and disbursements of counsel for the Agents and
charges of Intralinks, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of the Loan
Documents or any amendments,

 

82

 

modifications or
waivers of the provisions thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket
expenses incurred by the Issuing Bank in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder and (iii) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Issuing Bank or any Lender, including
the reasonable fees, charges and disbursements of any counsel for the
Administrative Agent, the Issuing Bank or any Lender, in connection with the
enforcement or protection of its rights in connection with the Loan Documents,
including its rights under  this Section 9.03,
or in connection with the Loans made or Letters of Credit issued hereunder,
including all such reasonable out-of-pocket expenses incurred during any workout,
restructuring or negotiations in respect of such Loans or Letters of Credit.

 

(b) The Borrower shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, and each Related Party of any of the foregoing
Persons (each such Person being called an “Indemnitee”), and hold each
Indemnitee harmless, from and against any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated 
hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or Release of Hazardous
Materials on or from any Mortgaged Property or any other property currently or
formerly owned or operated by the Borrower or any of its Subsidiaries, or any
actual or alleged Environmental Liability related in any way to the Borrower or
any of its Subsidiaries or  their
respective properties or operations, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought
by a third party or by the Borrower or any other Loan Party, and regardless of
whether any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses are finally judicially
determined by a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee.

 

(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to the Administrative Agent, the Issuing Bank or the
Swingline Lender under paragraph (a) or (b) of this Section 9.03
(and without limiting its obligation to do so), each Lender severally agrees to
pay to the Administrative Agent, the Issuing Bank or the Swingline Lender, as
applicable, such Lender’s pro  rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought)
of such unpaid amount, provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as  applicable, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in
its capacity as such; provided further that any obligation to indemnify
the Issuing Bank or the Swingline Lender pursuant to this Section 9.03(c) shall
be limited to Revolving Lenders only. For purposes hereof, a Lender’s “pro
rata share” shall be determined based upon its share of the aggregate
Revolving Exposures, outstanding Tranche B Term Loans and unused Commitments at
the time.

 

(d) To the extent permitted by applicable law, neither Holdings
nor the Borrower shall assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.

 

83

 

(e) All amounts due under this Section 9.03 shall be payable
not later than three days after written demand therefor.

 

(f) The Borrower agrees that any indemnification or other
protection provided to any . “Indemnitee pursuant to the Existing Credit
Agreement (including pursuant to Section 9.03 thereof) or any other Loan
Document (as defined in the Existing Credit Agreement and each an “Existing
Loan Document”) shall survive the effectiveness of this Agreement and any
indemnification or other protection provided to any Indemnitee pursuant to the
Existing Credit Agreement, any other Existing Loan Document, this Agreement
(including pursuant to this Section 9.03) or any other Loan Document shall
(i) survive payment in full of the Obligations and (ii) inure to the
benefit of any Person that was at any time an Indemnitee under the Existing
Credit Agreement, any other Existing Loan Document, this Agreement or any other
Loan Document.

 

SECTION 9.04. Successors and Assigns.

 

(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that (i) the Borrower may not assign
or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of each Lender (and any attempted assignment or transfer
by the Borrower without such consent shall be null and void) and (ii) no
Lender may assign or otherwise transfer its rights or obligations hereunder
except in accordance with this Section. Nothing in this Agreement, express or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), Participants
(to the extent provided in paragraph (c) of this Section 9.04) and,
to the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.

 

(b) (i) Subject to the conditions set forth in paragraph (b)(ii) below,
any Lender may assign to one or more assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written
consent (such consent, other than in the case of the Borrower, not to be
unreasonably withheld or delayed) of:

 

(1) the Borrower, provided that no consent
of the Borrower shall be required for an assignment to a Lender, an Affiliate
of a Lender, an Approved Fund (as defined below), for an assignment of all or
any portion of a Tranche B Term Loan or, if an Event of Default pursuant to Section 7.01
(a), (b), (h) or (i) has occurred and is continuing, any other
assignee;

 

(2) the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
of all or any portion of a Tranche B Term Loan to a Lender, an Affiliate of a
Lender or an Approved Fund; and

 

(3) the Issuing Bank, provided that no
consent of the Issuing Bank shall be required for an assignment of all or any
portion of a Tranche B Term Loan.

 

(ii) Assignments shall be subject to the following conditions:

 

(1) except in the case of an assignment to a
Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender’s Commitment or Loans of any
Class, the amount of the Commitment or Loans of the assigning

 

84

 

Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $2,500,000 or, in the case of a
Tranche B Term Loan, $1,000,000 (treating simultaneous assignments by or to
related Approved Funds as a single assignment for purposes of such requirement)
and the assigning Lender (if it shall retain any commitments or Loans) shall
have commitments and Loans aggregating at least $2,500,000 in the case of
Revolving Credit Loans and $1,000,000 in the case of Tranche B Term Loans, in
each case unless each of the Borrower and the Administrative Agent otherwise
consents; provided that no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing;

 

(2) each partial assignment shall be made as an
assignment of a proportionate part of all the assigning Lender’s rights and
obligations under this Agreement; provided that this clause shall not be
construed to prohibit assignment of a proportionate part of all the assigning
Lender’s rights and obligations in respect of one Class of Commitments or
Loans;

 

(3) the parties to each assignment shall execute
and deliver to the Administrative Agent an Assignment and Assumption, together
with a processing and recordation fee of $3,500; provided that only one
such fee shall be imposed in the case of simultaneous assignments by or to
related Approved Funds; and

 

(4) the assignee, if it is not already a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire.

 

For purposes of this Section 9.04(b):

 

“Approved Fund” means (a) a CLO and (b) with
respect to any Lender that is a fund which invests in bank loans and similar
extensions of credit, any other fund that invests in bank loans and similar
extensions of credit and is managed or advised by the same investment advisor
as such Lender or by an Affiliate of such investment advisor.

 

“CLO” means any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course and is administered or managed by a Lender or an Affiliate of
such Lender.

 

(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section 9.04, from and after the effective
date specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). Any
assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in such
rights and obligations in accordance with paragraph (c) of this Section 9.04.

 

(iv) The Administrative Agent, acting for this purpose as an agent
of the Borrower, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Commitment of, and principal amount of
the Loans and LC Disbursements owing to, each Lender pursuant to the terms
hereof

 

85

 

from time to time
(the “Register”). The entries in the Register shall be conclusive absent
manifest error, and the Borrower, the Administrative Agent, the Issuing Banks
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be available
for inspection by the Borrower, the Issuing Banks and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.

 

(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee’s completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b) of
this Section 9.04 and any written consent to such assignment required by
paragraph (b) of this Section 9.04, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.

 

(c) (i) Any Lender may, without the consent of the Borrower,
the Administrative Agent, the Issuing Banks or the Swingline Lender, sell
participations to one or more banks or other entities (a “Participant”)
in all or a portion of such Lender’s rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans owing to
it), provided that (A) such Lender’s obligations under this
Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrower, the Administrative Agent, the Issuing Banks and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender’s rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement, provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver described in the first proviso
to Section 9.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section 9.04, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section 9.04. To the
extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.18(c) as though it were
a Lender.

 

(ii) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 2.17
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 2.17(e) as
though it were a Lender.

 

(d) Any
Lender may, without the consent of the Borrower or the Administrative Agent, at
any time pledge, assign or grant a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge, assignment or grant to secure obligations to a Federal Reserve
Bank, and this Section 9.04 shall not apply to any such pledge, assignment
or grant of a security interest, provided that no such pledge,
assignment or grant of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledge or assignee for such
Lender as a party hereto.

 

86

 

SECTION 9.05.  Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall have independent
significance and be considered to have been relied upon by the other parties
hereto and shall survive the execution and delivery of the Loan Documents and
the making of any Loans and issuance of any Letters of Credit, regardless of
any investigation made by any such other party or on its behalf and
notwithstanding that the Administrative Agent, the Issuing Bank or any Lender
may have had notice or knowledge of any Default or incorrect representation, or
warranty at the time any credit is extended hereunder, and shall, continue in
full force and effect as long as the principal of or any accrued interest on
any Loan or any fee or any other amount payable under this Agreement is
outstanding and unpaid or any. Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated. The provisions of Sections
2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.

 

SECTION 9.06. Counterparts; Integration;
Effectiveness. This Agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract. This Agreement, the other Loan Documents and any separate
letter agreements with respect to fees payable to the Administrative Agent
constitute the entire contract among the parties relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral
or written, relating to the subject matter hereof. Except as provided in Section 4.01,
this Agreement shall become effective when it shall have been executed by the
Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Delivery of an executed counterpart of a signature page of this Agreement
by telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement.

 

SECTION 9.07. Severability. Any provision
of this Agreement held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction.

 

SECTION 9.08. Right of Setoff. If an Event
of Default shall have occurred and be continuing, each Lender and each of its
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other obligations at any time owing by such Lender or Affiliate to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower how or hereafter existing under this Agreement held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement and although such obligations may be unmatured. The
applicable Lender shall notify the Borrower and the Administrative Agent of
such setoff or application, provided that any failure to give or any
delay in giving such notice shall not affect the validity of any such setoff or
application under this Section 9.08. The rights of each Lender under this Section 9.08
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.

 

87

 

SECTION 9.09. Governing
Law; Jurisdiction; Consent to Service of Process.

 

(a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.

 

(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, 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 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 or any other Loan Document
shall affect any right that the Administrative Agent, the Issuing Bank or any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against Holdings, the Borrower or their
respective properties in the courts of any jurisdiction.

 

(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection that it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this Section 9.09.
Each of the parties 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.

 

(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices in Section 9.01. Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.

 

SECTION 9.10.  WAIVER OF
JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT 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
IT 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 9.10.

 

SECTION 9.11.  Headings.
Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part of this Agreement and shall
not affect the construction of, or be taken into consideration in interpreting,
this Agreement.

 

SECTION 9.12. Confidentiality. Each of the Administrative
Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality
of the Information (as defined below), except that Information may be disclosed
(a) to its and its Affiliates’ directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such information
confidential), (b) to the extent requested by any regulatory authority or 

 

88

 

self-regulatory
authority, (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party to this
Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this Section 9.12,
to (i) any assignee of or Participant in, or any prospective assignee of
or Participant in, any of its rights or obligations under this Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the
consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section 9.12
or (ii) becomes available to the Administrative Agent, any Issuing Bank or
any Lender on a noncofidential basis from a source other than Holdings or the
Borrower, provided that such source is not actually known by such
disclosing party to be bound by an agreement containing provisions
substantially the same as those contained in this Section 9.12. For the
purposes of this Section 9.12, the term “Information” means all
information received from Holdings or the Borrower relating to Holdings or the
Borrower or its business, other than any such information that is available to
the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential
basis prior to disclosure by Holdings or the Borrower, provided that, in
the case of information received from Holdings, the Borrower or any Subsidiary
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality
of Information as provided in this Section 9.12 shall be considered to
have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.

 

SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts that are treated as
interest on such Loan under applicable law (collectively, the “Charges”),
shall exceed the maximum lawful rate (the “Maximum Rate”) that may be
contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section 9.13 shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by such Lender.

 

SECTION 9.14. USA Patriot Act. Each Lender hereby notifies
the Borrower that pursuant to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot
Act”), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Patriot Act.

 

SECTION 9.15. Release of Collateral. Upon any sale or other
transfer be any Loan Party of any Collateral that is permitted under this
Agreement, or upon the effectiveness of any written consent to the release of
the security interest granted hereby in any Collateral pursuant to Section 9.02
of this Agreement, the security interest in such Collateral shall be
automatically released.

 

SECTION 9.16. Amendment and Restatement.

 

(a) On the Closing Date, the Existing Credit Agreement shall be
amended and restated in its entirety by this Agreement, and the Existing Credit
Agreement shall thereafter be of no further force and effect, except to
evidence the incurrence by the Borrower of the “Obligations” under and

 

89

 

as defined in the
Existing Credit Agreement (whether or not such “Obligations” are contingent as
of the Closing Date). This Agreement is not in any way intended to constitute a
novation of the obligations and liabilities existing under the Existing Credit
Agreement. The indebtedness and obligations evidenced by this Agreement and the
Loan Documents shall be and shall continue to be secured as set forth in the
Existing Credit Agreement, as amended and restated by this Agreement, and all
of the Loan Documents prior to the Closing Date, and the Liens granted to the
Administrative Agent pursuant to the Loan Documents (as defined in the Existing
Credit Agreement) shall continue in full force and effect during the term of
this Agreement and any renewals thereof.

 

(b) The terms and conditions of this Agreement and the
Administrative Agent’s, the Lenders’ and the Issuing Bank’s rights and remedies
under this Agreement and the other Loan Documents shall apply to all of the
Obligations incurred under the Existing Credit Agreement.

 

(c) On and after the Closing Date, (i) all references to the
Existing Credit Agreement (or to any amendment or any amendment and restatement
thereof) in the Loan Documents (other than this Agreement) shall be deemed to
refer to the Existing Credit Agreement, as amended and restated hereby, (ii) all
references to any article, section or sub-clause of the Existing Credit
Agreement or in any Loan Document (but not herein) shall be amended to become,
mutatis mutandis, references to the corresponding provisions of this Agreement
and (iii) except as the context otherwise provides, on or after the
Closing Date, all references to this Agreement herein (including for purposes
of indemnification and reimbursement of fees) shall be deemed to be reference
to the Existing Credit Agreement, as amended and restated hereby.

 

(d) This amendment and restatement is limited as written and is
not a consent to any other amendment, restatement or waiver, whether or not
similar and, except as expressly provided herein or in any other Loan Document,
all terms and conditions of the Loan Documents remain in full force and effect
unless otherwise specifically amended hereby or any other Loan Document.

 

90

 

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

 

	
   

  	
   

  	
  AGA MEDICAL
  CORPORATION,

  as Borrower

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Franck
  Gougeon

  
	
   

  	
   

  	
  Name: 

  	
  Franck Gougeon

  
	
   

  	
   

  	
  Title: 

  	
  President &
  CEO

  
					

 

 

	
   

  	
   

  	
  AGA MEDICAL
  HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Franck
  Gougeon

  
	
   

  	
   

  	
  Name:

  	
  Franck Gougeon

  
	
   

  	
   

  	
  Title:

  	
  President &
  CEO

  
					

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED
CREDIT AGREEMENT]

 

 

	
   

  	
   

  	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.,

  as Lender and Administrative Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Craig Malloy

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Craig Malloy

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Authorized
  Signatory

  
						

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
   

  	
   

  	
   

  	
  LEHMAN BROTHERS
  COMMERCIAL 

  BANK,

  as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ George James

  
	
   

  	
   

  	
   

  	
  Name:

  	
  George James

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Chief Credit Officer

  
						

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
   

  	
   

  	
   

  	
  BANK OF AMERICA,
  N.A.,

  as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ John A.
  Fulton

  
	
   

  	
   

  	
   

  	
  Name:

  	
  John A. Fulton

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
   

  	
   

  	
   

  	
  CITICORP USA,
  INC.,

  as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Hector
  Guenther

  
	
   

  	
   

  	
   

  	
  Name:

  	
       HECTOR
  GUENTHER

  
	
   

  	
   

  	
   

  	
  Title:

  	
             Vice
  President

  
						

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

	
   

  	
   

  	
   

  	
  WACHOVIA BANK,
  NATIONAL

  ASSOCIATION,

  as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Jeanette A.
  Griffin

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jeanette A.
  Griffin

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Director

  
						

 

 

[SIGNATURE PAGE TO AMENDED AND RESTATED CREDIT AGREEMENT]

 

 

SCHEDULES TO
AMENDED AND RESTATED CREDIT AGREEMENT

 

Set forth herein are the Schedules to the
Amended and Restated Credit Agreement, dated as of April 28, 2006 (as
further amended, restated, supplemented or otherwise modified from time to
time, the “Credit Agreement”), among AGA Medical Holdings, Inc. (“Holdings”),
AGA Medical Corporation (the “Borrower”), the Lenders and Issuing Banks
party thereto and Lehman Commercial Paper Inc., as Administrative Agent.
Capitalized terms used but not defined herein have the meanings assigned to
such terms in the Credit Agreement.

 

INDEX OF
SCHEDULES

 

	
  Schedule 1.01

  	
   

  	
  Mortgaged Property

  
	
  Schedule 2.01

  	
   

  	
  Commitments

  
	
  Schedule 3.05

  	
   

  	
  Real Property

  
	
  Schedule 3.12

  	
   

  	
  Subsidiaries

  
	
  Schedule 3.13

  	
   

  	
  Insurance

  
	
  Schedule 40.1(h)

  	
   

  	
  Sources and Uses

  
	
  Schedule 5.14

  	
   

  	
  Post-Closing Matters

  
	
  Schedule 6.01

  	
   

  	
  Existing Indebtedness

  
	
  Schedule 6.02

  	
   

  	
  Existing Liens

  
	
  Schedule 6.04

  	
   

  	
  Existing Investments

  
	
  Schedule 6.06

  	
   

  	
  Sale Leaseback Properties

  
	
  Schedule 6.09

  	
   

  	
  Existing Transactions with Affiliates

  
	
  Schedule 6.10

  	
   

  	
  Existing Restrictions

  

 

 

Schedule 1.01

 

Mortgaged Property

 

	
  Mortgagor

  	
   

  	
  Mortgaged Property Address

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  County

  
	
  AGA Medical Corporation

  	
   

  	
  9700 Schmidt Lake Road

  	
   

  	
  Plymouth

  	
   

  	
  MN

  	
   

  	
  Hennepin

  

 

 

Schedule 2.01

 

Commitments

 

	
  Lender

  	
   

  	
  Revolving Credit Facility

  Committed Amount

  	
   

  	
  Term Loan Facility

  Commitment Amount

  	
   

  
	
  Lehman Brothers Commercial Bank

  	
   

  	
  $

  	
  9,500,000

  	
   

  	
  —

  	
   

  
	
  Lehman Commercial Paper Inc.

  	
   

  	
  —

  	
   

  	
  $

  	
  215,000,000

  	
   

  
	
  Citicorp USA, Inc.

  	
   

  	
  $

  	
  6,300,000

  	
   

  	
  —

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  4,600,000

  	
   

  	
  —

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $

  	
  4,600,000

  	
   

  	
  —

  	
   

  
	
  Total

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
  215,000,000

  	
   

  

 

 

Schedule 3.05

 

Real Property

 

Owned Real Property:

 

	
  Owner

  	
   

  	
  Address

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  Code

  
	
  AGA Medical
  Corporation

  	
   

  	
  9700 Schmidt Lake Road

  	
   

  	
  Plymouth

  	
   

  	
  Minnesota

  	
   

  	
  55442

  

 

Leased Real Property:

 

	
  Tenant

  	
   

  	
  Address

  	
   

  	
  City

  	
   

  	
  State

  	
   

  	
  Zip

  Code

  
	
  AGA Medical Corporation

  	
   

  	
  682 Mendelssohn Avenue

  	
   

  	
  Golden Valley

  	
   

  	
  Minnesota

  	
   

  	
  55427

  

 

 

Schedule 3.12

 

Subsidiaries

 

	
  Entity

  	
   

  	
  Certificate No.

  	
   

  	
  Registered Owner

  	
   

  	
  Number and Class

  (if applicable) of

  Equity Interests

  	
   

  	
  Percentage of

  Equity Interests

  	
   

  
	
  AGA Medical Corporation

  	
   

  	
  5

  	
   

  	
  AGA
  Medical Holdings, Inc.

  	
   

  	
  200,000
  shares common stock

  	
   

  	
  100

  	
  %

  
	
  Amplatzer Medical Sales Corporation

  	
   

  	
  1

  	
   

  	
  AGA
  Medical Corporation

  	
   

  	
  10,000
  shares common stock

  	
   

  	
  100

  	
  %

  
	
  AGA Medical FSC, Inc.*†

  	
   

  	
  1

  	
   

  	
  AGA
  Medical Corporation

  	
   

  	
  1
  ordinary share

  	
   

  	
  100

  	
  %

  
	
  AGA Medical Switzerland Sárl†

  	
   

  	
  n/a

  	
   

  	
  AGA
  Medical Corporation

  	
   

  	
  19,000
  CHF paid in capital

  	
   

  	
  95

  	
  %

  

 

* Inactive subsidiary

† Not a Loan Party

 

 

Schedule 3.13

 

Insurance

 

1.             Philadelphia Indemnity
Ins. Co: Director & Officer, Employment Liability, Fiduciary Liability
in the amount of $10,000,000; Expires March 19, 2007; Policy number
PHSD126947.

 

2.             Chubb / Federal
Insurance Company: Products Policy (Primary Layer) in the amount of $5,000,000;
Expires March 19, 2007; Policy number 7350-55-98 MIN.

 

3.             Allied World
Assurance: Excess Products Policy (5 x/o 5) in the amount of $5,000,000;
Expires March 19, 2007; Policy number AW0199209.

 

4.             Axis Specialty
Insurance Company: Excess Products Policy (10 x/o 10) in the amount of
$10,000,000; Expires March 19, 2007. Policy number AAU701428/01/2005.

 

5.             Columbia Casualty
Company / CAN: Excess Products Policy (10 x/o 20) in the amount of $10,000,000;
Expires March 19, 2007. Policy number ADE2082665330-0.

 

6.             Chubb/Federal
Insurance Company: Automobile Coverage in the amount of $1,000,000; Expires March 19,
2007; Policy number (05) 7350-55-97.

 

7.             Chubb/Federal
Insurance Company: Worker’s Compensation and Employer’s Liability Policy in the
amount of $1,000,000; Expires March 19, 2007; Policy number (06)
7170-34-45.

 

8.             Chubb/Federal
Insurance Company: Non Products Excess and Umbrella Insurance in the amount of
$10,000,000; Expires March 19, 2007; Policy number 9363-15-35 MIN.

 

9.             Chubb/Federal
Insurance Company: Personal Property $38,000,000; Business Interruption
$30,000,000; Building $20,627,000; General Liability $2,000,000; Employee
Benefits $1,000,000 / $3,000,000; (includes global extension); Expires March 19,
2007; Policy number 3579-50-33 MIN.

 

10.           St. Paul Travelers:
Crime Plus Policy, in the amount of $1,000,000, Expires March 19, 2007;
Policy number 104497124.

 

11.           Landmark American Ins.
Co.: Medical Professional Liability Policy in the amount of $1,000,000 /
$5,000,000; Expires February 2, 2007; Policy number LHM705853.

 

12.           Chubb/Federal Insurance
Company: Computer Property-Blanket in the amount of $3,500,000; Expires March 19,
2007; Policy number 3579-50-33.

 

 

13.           Chubb/Federal Insurance
Company: Commercial Inland Marine-Transportation in the amount of $500,000 and
Personal Property any other location in the amount of $300,000; Expires on March 19,
2007; Policy number 3579-50-33.

 

14.           Great American
Insurance: Excess Executive Protection-claims made in the amount of
$10,000,000; Expires on March 19, 2007; Policy number DMX0009951.

 

2

 

Schedule 4.01(h)

 

Sources and Uses

 

	
  Sources

  	
   

  	
  Uses

  	
   

  
	
  (dollars in millions)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Term Loan Borrowing

  	
   

  	
  $

  	
  215.0

  	
   

  	
  Dividend to Stockholders

  	
   

  	
  $

  	
  99.9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Repayment of Existing Term Loans

  	
   

  	
  104.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Fees and Expenses

  	
   

  	
  2.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Cash on hand

  	
   

  	
  8.1

  	
   

  
	
  Total Sources

  	
   

  	
  $

  	
  215.0

  	
   

  	
  Total Uses

  	
   

  	
  $

  	
  215.0

  	
   

  

 

 

Schedule 5.14

 

Post-Closing Matters

 

To the extent not delivered on or prior to
the Closing Date, within the periods set forth below (or such later date as may
be agreed by the Administrative Agent in its reasonable discretion), the
Borrower shall deliver, or cause to be delivered, to the Administrative Agent
the following documents, in each case, in form and substance as is reasonably
satisfactory to the Administrative Agent:

 

1.             On
or prior to the 180th day following the Closing Date, Commodity Account Control
Agreements, Deposit Account Control Agreements and Securities Account Control
Agreements as the Collateral Agent deems reasonably necessary or advisable in
order to effectively grant a valid, perfected and enforceable security interest
in favor of the Collateral Agent for the benefit of the Secured Parties in the
Commodity Accounts, the Deposit Accounts and the Securities Accounts of each
Loan Party that are not Excluded Accounts, duly executed by such Loan Party and
the applicable bank or securities intermediary, as the case may be, together
with an opinion of counsel covering such matters as the Collateral Agent may
reasonably require.

 

2.             On
or prior to the 30th day following the Closing Date, evidence that Amplatzer
Medical Sales Corporation is qualified to do business as a foreign corporation
in California, West Virginia, Illinois, Maryland and New York.

 

3.             On
or prior to the 30th day following the Closing Date, an Amendment to the
Combination Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Financing Statement, entered into as of December 22, 2005 pursuant
to the Existing Credit Agreement, duly executed and notarized by the Borrower
and the Administrative Agent.

 

 

Schedule 6.01

 

Existing Indebtedness

 

Letters of Credit:

 

	
  Applicant

  	
   

  	
  Issuing Bank

  	
   

  	
  Beneficiary

  	
   

  	
  Number

  	
   

  	
  Amount

  	
   

  
	
  AGA
  Medical Corporation

  	
   

  	
  U.S. Bank National
  Association

  	
   

  	
  Chubb & Son, a
  division of Federal Insurance Company

  	
   

  	
  SLCMMSP03734

  	
   

  	
  $

  	
  300,000

  	
   

  
											

 

 

Schedule 6.02

 

Existing Liens

 

1.             Easement
Agreement dated January 9, 2004 between Company and Qwest Corporation
relating to the property owned by Company and located at 9700 Schmidt Lake
Road, Plymouth, Minnesota. The Easement Agreement incorporates a Site Lease
Agreement, dated January of 2004, between Company and Qwest Wireless, LLC.

 

2.             Financing
Liens:

 

	
  Debtor

  	
   

  	
  Jurisdiction

  	
   

  	
  File No.

  	
   

  	
  Filing

  Date

  	
   

  	
  Filing

  	
   

  	
  Secured Party

  	
   

  	
  Description of

  Collateral

  
	
  AGA Medical  Corporation

  	
   

  	
  MN Secretary of  State

  	
   

  	
  20036789369

  	
   

  	
  3/13/03

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital, LLC

  	
   

  	
  Leased equipment

  
	
  AGA Medical  Corporation

  	
   

  	
  MN Secretary of  State

  	
   

  	
  20036927985

  	
   

  	
  3/27/03

  	
   

  	
  UCC-1

  	
   

  	
  IOS Capital, LLC

  	
   

  	
  Leased equipment

  

 

 

Schedule 6.04

 

Existing Investments

 

1.             The
proposed acquisition of the direct marketing and distribution business of BVM
Medical Ltd. (“BVM”) by Amplazter Medical Sales Corporation (“Amplatzer”)
pursuant to the terms of that certain Term Sheet, dated as of March 29,
2006, between BVM and Amplatzer.

 

 

Schedule 6.06

 

Sale Leaseback Properties

 

1.             9700
Schmidt Lake Road, Plymouth, Minnesota 55442.

 

 

Schedule 6.09

 

Existing Transactions with Affiliates

 

1.             Omnibus
Amendment Agreement, dated as of April 28, 2006, among Holdings, the
Borrower, Welsh Carson Anderson & Stowe IX, L.P. (“WCAS IX”)
and Franck Gougeon.

 

2.             Amended and
Restated Stock Purchase Agreement, dated as of July 28, 2005 (as amended
or otherwise modified through the Closing Date), among WCAS IX, the
co-investors of WCAS IX, Franck L. Gougeon and the Borrower.

 

3.             Stockholders
Agreement, dated as of July 28, 2005 (as amended or otherwise modified
through the Closing Date), among Holdings, WCAS IX, WCAS Capital Partners IV,
L.P. (“WCAS CP IV”), each of the other stockholders party thereto, and
Franck Gougeon.

 

4.             Registration
Rights Agreement, dated as of July 28, 2005, among Holdings, WCAS IX, WCAS
CP IV, each of the other investors party thereto, and Franck Gougeon.

 

5.             Employment
Agreement, dated as of July 28, 2005, by and between the Borrower and
Franck Gougeon.

 

6.             Senior
Subordinated Note, dated as of July 28, 2005, between the Borrower, as
issuer, and WCAS CP IV, as holder.

 

7.             Securities
Purchase Agreement, dated as of July 28, 2005 and as amended on April 28,
2006, between WCAS CP IV and the Borrower.

 

8.             Contribution
and Exchange Agreement, dated as of July 28, 2005, among Holdings, the
Borrower and the shareholders of the Borrower party thereto.

 

 

Schedule 6.10

 

Existing Restrictions

 

None.

 

 

EXHIBIT A

 

FORM OF ASSIGNMENT AND
ASSUMPTION

 

This Assignment and Assumption is dated as of the
date set forth below (the “Effective Date”) and is entered into by and
between the Assignor (as defined below) and the Assignee (as defined below).
Capitalized terms used in this Assignment and Assumption and not otherwise
defined herein have the meanings specified in the Amended and Restated Credit
Agreement dated as of April [    ], 2006 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among AGA Medical Corporation (the “Borrower”), the Lenders and Issuing
Banks from time to time party thereto and Lehman Commercial Paper Inc., as
Administrative Agent (the “Administrative Agent”), receipt of a copy of
which is hereby acknowledged by the Assignee. The Standard Terms and Conditions
set forth in Annex I attached hereto (the “Standard Terms”) are hereby
agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby
irrevocably sells and assigns to the Assignee, and the Assignee hereby
irrevocably purchases and assumes from the Assignor, subject to and in
accordance with the Standard Terms and the Credit Agreement, as of the
Effective Date inserted by the Administrative Agent as contemplated below (a) all
the Assignor’s rights and obligations in its capacity as a Lender under the
Credit Agreement and any other documents or instruments delivered pursuant
thereto to the extent related to the amount and percentage interest identified
below of all of such outstanding rights and obligations of the Assignor under
the facilities identified below (including any letters of credit or swingline
loans included in such facilities) and (b) to the extent permitted to be
assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (a) above (the rights
and obligations sold and assigned pursuant to clauses (a) and (b) above
being referred to herein collectively as the “Assigned Interest”). Such
sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by the Assignor.

 

 

1.                                       Assignor:

 

2.                                       Assignee:

 

(a)                                  Assignee is an
Affiliate of.

 

(b)                                 Assignee is an
Approved Fund:

 

3.                                       Borrower: AGA
MEDICAL CORPORATION

 

4.                                       Administrative
Agent: Lehman Commercial Paper Inc., as Administrative Agent under the Credit
Agreement.

 

5.                                       Assigned
Interest:

 

	
  Facility Assigned(1)

  	
   

  	
  Aggregate Amount of All

  Lenders’ Commitments

  and Loans

  	
   

  	
  Amount of

  Commitments and

  Loan Assigned

  	
   

  	
  Percentage of

  Global Commitment

  Assigned

  	
   

  
	
  Revolving Facility

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  
	
  Tranche B Term Loan Facility

  	
   

  	
  $

  	
  215,000,000

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  

 

Effective Date:

 

(1)           Select as applicable.

 

2

 

The terms sets forth in this Assignment and
Assumption are hereby agreed to:

 

 

	
   

  	
  as
  Assignor

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

The terms set forth by this Assignment and
Assumption are hereby agreed to:

 

 

	
   

  	
  as
  Assignee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

[SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION]

 

 

	
   

  	
  Consented
  to and Accepted:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC.,

  
	
   

  	
  as
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Consented
  to and Accepted:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  as
  Issuing Bank

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

Consented to:

 

AGA MEDICAL CORPORATION

 

 

	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

[SIGNATURE PAGE TO
ASSIGNMENT AND ASSUMPTION]

 

 

ANNEX 1

 

STANDARD TERMS AND
CONDITIONS

FOR ASSIGNMENT AND ASSUMPTION

 

1.             Representations
and Warranties.

 

1.1           Assignor
The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the Assigned Interest, (ii) the Assigned Interest is
free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute
and deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby, and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, any of its Subsidiaries or Affiliates or any other Person
obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document. From and
after the Effective Date, the Assignor shall, to the extent provided in this
Assignment and Assumption, relinquish its rights and be released from its
obligations under the Credit Agreement.

 

1.2           Assignee.
The Assignee (a) represents and warrants that (i) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment and Assumption and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender, (iii) from
and after the Effective Date, it shall be bound by the provisions of the Credit
Agreement as a Lender thereunder and, to the extent of the Assigned Interest,
shall have the obligations of a Lender thereunder, (iv) it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 5.01 of the Credit Agreement, and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Assumption
and to purchase the Assigned Interest, on the basis of which it has made such
analysis and decision independently and without reliance on the Administrative
Agent or any other Lender, and (v) if it is a Foreign Lender, attached to
this Assignment and Assumption is any documentation required to be delivered by
it pursuant to Section 2.17(e) of the Credit Agreement, duly
completed and executed by the Assignee, (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender and (c) appoints
and authorizes the Administrative 

 

 

Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under the Credit Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to such
Administrative Agent or Collateral Agent, as the case may be, by the terms
thereof, together with such powers as are incidental thereto.

 

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

 

3.             General
Provisions. This Assignment and Assumption shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns. This Assignment and Assumption may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall constitute
an original, but all of which when taken together shall constitute a single
contract. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by facsimile or other electronic transmission shall
be as effective as delivery of a manually executed counterpart of this
Assignment and Assumption. This Assignment and Assumption shall be construed in
accordance with and governed by the law of the State of New York.

 

 

Exhibit
B-1

 

	
  

  	
  

  

  

  ROPES & GRAY LLP

  

  45 ROCKEFELLER PLAZA     NEW YORK, NY
  10111-0087    212-841-5700     F212-841-5725

  

  BOSTON       NEW YORK        SAN FRANCISCO       WASHINGTON, DC 

  

 

April 28, 2006

 

To the Administrative Agent 

and each Lender party to the

Credit Agreement referred to below

 

Ladies and Gentlemen:

 

This opinion is being furnished to you
pursuant to the Amended and Restated Credit Agreement, dated as of April 28,
2006 (the “Amended and Restated Credit Agreement”), among AGA Medical
Holdings, Inc., a Delaware corporation (“Holdings”), AGA Medical
Corporation, a Minnesota corporation (the “Company”), the Lenders party
thereto from time to time, Lehman Brothers Inc. and Citigroup Global Markets
Inc., as Joint Lead Arrangers and Joint Bookrunners, Citigroup Global Markets
Inc., as Syndication Agent, and Lehman Commercial Paper Inc., as Administrative
Agent, in connection with the closing held this day under the Amended and
Restated Credit Agreement.  Unless
otherwise defined herein, capitalized terms used herein have the meanings set
forth in the Amended and Restated Credit Agreement.

 

We have acted as special counsel to Holdings,
the Company, and Amplatzer Medical Sales Corporation, a Minnesota corporation
(the “Subsidiary Guarantor” and, together with Holdings and the Company,
the “Loan Parties”) in connection with the Amended and Restated Credit
Agreement and the Reaffirmation of the Security Documents, dated as of April 28,
2006, by the Loan Parties and acknowledged by the Administrative Agent (the “Reaffirmation”
and together with the Amended and Restated Credit Agreement, the “Credit
Documents”).

 

We have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents and
records and have made such investigation of fact and such examination of law as
we have deemed appropriate in order to enable us to render the opinions set
forth herein.  In conducting such
investigation, we have relied, without independent verification, upon
certificates of officers of Holdings, the Company and the Subsidiary Guarantor,
public officials and other appropriate persons, and on the representations and
warranties as to matters of fact and on the covenants as to the application of
proceeds contained in the Credit Documents.

 

In rendering the opinions set forth below, we
have assumed that (a) each of the Company and the Subsidiary Guarantor is
validly existing and in good standing under the laws of its jurisdiction of
organization, (b) each of the Company and the Subsidiary Guarantor has the
power and authority to execute and deliver each of the Credit Documents to
which it is a party and to perform its obligations thereunder, (c) each of
the Company and the Subsidiary Guarantor

 

 

has duly authorized,
executed and delivered each of the Credit Documents to which it is a party and (d) the
execution and delivery by each of the Company and the Subsidiary Guarantor of
each of the Credit Documents to which it is a party and the performance by each
such Person of its obligations thereunder will not violate any law of its
jurisdiction of organization or any other applicable laws (except the Covered
Laws (as defined below)).

 

The opinions expressed herein are limited to
matters governed by the laws of the State of New York, the General Corporation
Law of the State of Delaware in the case of Holdings and the federal laws of
the United States of America (collectively, the “Covered Laws”) and
solely with respect to paragraph 8 below, Article 9 of the Delaware
Uniform Commercial Code.

 

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

 

1.             Holdings (a) is a corporation validly existing and
in good standing under the laws of the State of Delaware and (b) has the
corporate power and authority to conduct the business in which it is engaged,
and to execute, deliver and perform its obligations under each of the Credit
Documents.

 

2.             Holdings has duly authorized, executed and delivered
each of the Credit Documents to which it is party.

 

3.             Each of the Credit Documents to which each of the Loan
Parties is a party constitutes the valid and binding obligation of each such
Person as is party thereto and is enforceable against each such Person in
accordance with its terms.

 

4.             The execution and delivery by each of the Loan Parties
of the Credit Documents to which such Person is party and the performance by
such Person of its obligations thereunder will not (a) in the case of
Holdings, violate the certificate of incorporation or bylaws of Holdings, (b) violate
any Covered Laws, and (c) result in a breach of, or constitute a default
under, any of the agreements listed on Schedule I hereto.

 

5.             Except as may be required in order to perfect the Liens
contemplated by the Collateral Agreement and the other Security Documents,
under the Covered Laws, no consent, approval, license or exemption by, or order
or authorization of, or filing, recording or registration with, any
governmental authority is required to be obtained by the Loan Parties in
connection with the execution and delivery of the Credit Documents to which
each such Person is party or the performance by each such Person of its
obligations thereunder.

 

6.             No Loan Party is an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

 

7.             Neither the making of the loans under the Amended and
Restated Credit Agreement, nor the application of the proceeds thereof on the
date hereof as provided in the 

 

2

 

Amended and Restated Credit
Agreement, will violate Regulations T, U or X of the Board of Governors of the
Federal Reserve System as in effect on the date hereof.

 

8.             After giving effect to the execution and delivery of the
Credit Documents, the security interest in the Collateral described in the
Collateral Agreement granted by the Loan Parties under the Collateral
Agreement, as reaffirmed pursuant to the Reaffirmation, continues to be a valid
and perfected security interest to the same extent as immediately prior to
giving effect to the execution and delivery of the Credit Documents (as to
which matters, as of the Original Closing Date, we refer you to our opinion
dated July 28, 2005 as to the Company and the Subsidiary Guarantor and our
opinion dated July 28, 2005 as to Holdings (together the “Original
Opinions”), in each case, subject to the assumptions, qualifications,
exclusions and limitations stated in the Original Opinions, which apply herein
to the same extent as stated therein).

 

Our opinion that the Credit Documents to
which each of the Loan Parties are party constitute the valid and binding
obligation of such of the foregoing Persons as are party thereto, enforceable
against each such Person party thereto in accordance with its terms, is subject
to (i) bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance and other laws of general application affecting the rights and
remedies of creditors and secured parties and (ii) general principles of
equity.  We express no opinion with
respect to the Reaffirmation as pertaining to obligations under any Loan
Documents (other than the Amended and Restated Credit Agreement) except to the
extent our Original Opinions included an opinion that such Loan Documents
constituted the valid and binding obligation of the Loan Parties party thereto,
enforceable against each such Loan Party in accordance with its terms, in each
case, subject to the assumptions, qualifications, exclusions and limitations
stated in the Original Opinions.

 

The opinions expressed herein do not purport
to cover, and we express no opinion with respect to, the applicability of Section 548
of the federal Bankruptcy Code or any comparable provision of state law.

 

The opinions expressed herein are subject to
the qualification that the enforceability of provisions in the Credit Documents
and the Security Documents (collectively, the “Documents”) providing for
indemnification or contribution may be limited by public policy
considerations.  In addition, we express
no opinion as to (i) the extent to which broadly worded waivers may be
enforced, (ii) the enforceability of any provision which purports to grant
the right of setoff to an affiliate of a lender or a purchaser of a
participation in the loans outstanding thereunder or which permits the exercise
of a right of setoff against amounts not then due or (iii) the
enforceability of any provisions providing for conclusive presumptions or
determinations, non-effectiveness of oral modifications, powers of attorney,
waiver of or consent to service of process and venue, waiver of offset or
defenses, or which constitutes a penalty or forefeiture.  In connection with the provisions of the
Documents whereby the parties submit to the jurisdiction of the courts of the
United States of America located in the State of New York, we note the
limitations of 28 U.S.C. §§ 1331 and 1332 on subject matter jurisdiction of the
federal courts.

 

3

 

In addition, certain provisions contained in
the Documents, including the grant of powers of attorney thereunder, may be
unenforceable in whole or in part but the inclusion of such provisions in the
Documents does not affect the validity of any of the other provisions thereof,
and the remaining provisions of the Credit Documents are sufficient for the
practical realization of the benefits intended to be provided thereby.

 

This opinion is being furnished only to the
addressees and is solely for their benefit and the benefit of their permitted
assignees that becomes a Lender or the Administrative Agent under the Amended
and Restated Credit Agreement.  This
opinion may not be relied upon for any other purpose or by any other Person,
without our prior written consent.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Ropes & Gray LLP

  

 

4

 

Schedule I

 

Material Agreements

 

1.             Omnibus Amendment Agreement, dated as of April 28,
2006 (the “Amendment Agreement”), among AGA Medical Holdings, Inc.,
AGA Medical Corporation, Welsh Carson Anderson & Stowe IX, L.P. and
Franck Gougeon.

 

2.             Stockholders Agreement, dated as of July 28, 2005
(as amended by the Amendment Agreement), among AGA Medical Holdings, Inc.,
Welsh Carson Anderson & Stowe IX, L.P., WCAS Capital Partners IV,
L.P., each of the other stockholders party thereto and Franck Gougeon.

 

3.             Registration Rights Agreement, dated as of July 28,
2005, among AGA Medical Holdings, Inc., Welsh Carson Anderson &
Stowe IX, L.P., WCAS Capital Partners IV, L.P., each of the other investors
party thereto and Franck Gougeon.

 

4.             Amended and Restated Stock Purchase Agreement, dated as
of July 28, 2005 (as amended by the Amendment Agreement), by and among AGA
Medical Corporation, Welsh Carson Anderson & Stowe IX, L.P., Franck
Gougeon and the other parties thereto.

 

5.             Securities Purchase Agreement, dated as of July 28,
2005 (as amended by Amendment No.1 thereto dated as of April 28, 2006),
between WCAS Capital Partners IV, L.P. and AGA Medical Corporation.

 

 

EXHIBIT B-2

 

Holstein Law Firm

150 South Fifth Street, Suite 370

Minneapolis, Minnesota 55402

(612) 435-0230 (main)

(612) 435-0231 (fax)

wwwholsteinlawfirm.com

 

April 28, 2006

 

Lehman Commercial Paper Inc.,

as Administrative Agent,
Collateral Agent

and Issuing Bank (the
“Collateral Agent”)

745 Seventh Avenue

New York, New York 10019

 

Citicorp
USA, Inc.

Deutsche
Bank Trust Company Americas

Wachovia
Bank, National Association

 

(all
of the addressees, collectively, the “Lenders”)

 

RE:                            Loan in
the amount of $240,000,000 from Lenders to AGA Medical Corporation (“Borrower”)

 

Ladies and Gentlemen:

 

We have acted as special counsel for Borrower
in connection with the execution and delivery today of, and the consummation of
the transactions contemplated by, the $215,000,000 term loan (the “Term Loan”) and the $25,000,000 revolving line of credit
(the “Revolving Loan”; the Term Loan and the
Revolving Loan are referred to, collectively, as the “Loans”)
from Lenders to Borrower.  Capitalized
terms used but not defined herein shall have the meanings assigned to such
terms in the Amended and Restated Credit Agreement (described below).

 

1.                                      Documents
Reviewed.

 

1.1.                             For purposes of
rendering our opinion set forth herein, we have reviewed originals or copies of
the following documents (each, a “Loan
Document”, and collectively, the “Loan
Documents”), all dated as of the date of this letter unless
otherwise specified:

 

(a)                                  Amended and
Restated Credit Agreement between Lenders and Borrower;

 

 

(b)                                 Guarantee and
Collateral Agreement executed by Borrower in favor of the Collateral Agent
dated as of July 28, 2005;

 

(c)                                  UCC-1 Financing
Statements naming Borrower and Subsidiary (as defined below) as debtor and
naming Lenders as secured party (the “Financing
Statements”);

 

(d)                                 Patent Security
Agreement dated as of July 28, 2005;

 

(e)                                  Trademark
Security Agreement dated as of July 28, 2005;

 

(f)                                    Copyright
Security Agreement dated as of July 28, 2005; and

 

(g)                                 Reaffirmation
Agreement.

 

1.2.                             For purposes of
rendering our opinion set forth herein, we have also reviewed the Amended and
Restated Articles of Incorporation and Bylaws of Borrower, the Articles of
Incorporation and Bylaws of Amplatzer Medical Sales Corporation, a Minnesota
corporation and wholly-owned subsidiary of Borrower (“Subsidiary”), and the records of corporate
proceedings taken by Borrower and Subsidiary in connection with the Loan
Documents and the transactions contemplated therein, as provided and certified
to us by Borrower as being true, correct and complete (the “Authority Documents”).  We have also examined originals, or copies
certified or otherwise identified to our satisfaction, of such other documents,
made such investigation of matters of fact and reviewed such matters of law as
we have deemed necessary as a basis for the opinions hereinafter expressed.

 

1.3.                             For purposes of
rendering our opinion set forth herein, we have also reviewed such certificates
of public officials, and other certificates, instruments and documents as we
deemed necessary to render an opinion on the matters hereinafter set forth (“Public Records”).

 

2.                                      Assumptions.  In our examination and in making this
opinion, we have assumed the matters described below.

 

2.1.                             Unless
specifically stated otherwise, the laws of the United States and New York as of
the date hereof and as they are applied and construed as of the date hereof,
will apply to the interpretation, validity and enforceability of the Loan
Documents, and the Loan Documents, when executed and delivered, will be legal,
valid and binding obligations enforceable in accordance with their respective
terms.

 

2.2.                             The
authenticity of all documents, certificates, records and instruments submitted
to us as originals, the genuineness of all signatures, the legal age and
capacity of all natural persons, the truthfulness, accuracy and completeness of
all statements of fact contained in any document, certificate, record or
instrument and the conformity of all

 

2

 

documents, certificates,
records and instruments submitted to us as copies to the authentic, complete
and accurate originals thereof.

 

2.3.                              The Loan
Documents which provide for execution by parties other than Borrower and
Subsidiary have been duly authorized, executed and delivered by such parties,
are within such parties’ corporate power, where applicable, and constitute such
parties’ legal, valid and binding obligations enforceable in accordance with
their respective terms, and that such parties are in compliance with all
applicable laws, rules and regulations governing the conduct of their
businesses and the subject transaction, including those of Minnesota regarding
engaging in the business of making mortgage loans.

 

2.4.                              The Loan
Documents accurately reflect the complete understanding of the parties thereto
and contain the entire agreement of those parties with respect to the
transactions contemplated by the Loan Documents, to the extent the foregoing
affects any of the opinions expressed herein.

 

2.5.                              If any of the
Lenders are required to be qualified to transact business in Minnesota, then
such Lenders have obtained the necessary certificate of authority to transact
business in Minnesota.

 

2.6.                              The parties to
the Loan Documents, and their successors and/or assigns, will: (a) act in
good faith and in circumstances and a manner which are commercially reasonable
in the exercise of any rights or enforcement of any remedies under the Loan
Documents; (b) not engage in any conduct in the exercise of such rights or
enforcement of such remedies that would constitute other than fair and
impartial dealing or would be unconscionable or otherwise contrary to public
policy; and (c) comply with all requirements of applicable procedural and
substantive law in exercising any rights or enforcing any remedies under the
Loan Documents.

 

2.7.                              All Public
Records reviewed by us are accurate and complete.

 

2.8.                              All exhibits
and schedules have been (or will be) properly and correctly completed and
attached to the Loan Documents.  The
transactions evidenced by the Loan Documents have been consummated.

 

3.                                      Opinions.  Based upon our examination of the Loan
Documents, and the documents referred to in Sections 1.2 and 1.3, and the
foregoing facts and assumptions, and subject to the qualifications and
exceptions set forth below, it is our opinion that:

 

3.1.                              The Borrower
and Subsidiary are corporations, duly incorporated and validly existing under
the laws of the State of Minnesota and are in good standing under such
laws.  The Borrower and Subsidiary have
all requisite corporate power to own and operate their respective properties
and assets, and to carry on their business as presently conducted.  Based solely on the representations of the
Company, the Borrower and Subsidiary are qualified to do business as a foreign
corporation in all jurisdictions where

 

3

 

the character of the
property owned or leased or the nature of the business transacted makes such
qualification necessary and the failure to be so qualified would have a material
adverse effect on the Borrower or Subsidiary; exclusive of Illinois, Maryland
and New York, where Subsidiary’s qualifications are pending/in process.

 

3.2.                              The Borrower
and Subsidiary have all requisite legal and corporate power to execute and
deliver the Loan Documents, to borrow money from the Lenders and to carry out
and perform their respective obligations under the terms of the Loan Documents,
as applicable.

 

3.3.                              All corporate
action on the part of the Borrower and Subsidiary, their directors and
stockholders necessary for the authorization, execution and delivery of the
Loan Documents by the Borrower and Subsidiary and the performance by the
Borrower and Subsidiary of their respective obligations under the Loan
Documents have been taken.  Each of the
Loan Documents to which Borrower or Subsidiary is a party has been duly and
validly executed and delivered by the Borrower or Subsidiary, respectively, and
the Financing Statements (to the extent to be filed in Minnesota) constitute
lawful and binding obligations, legally enforceable in accordance with their
respective terms, except as may be limited by (a) bankruptcy, insolvency,
reorganization, arrangement, moratorium, or other similar laws affecting the
rights and remedies of creditors generally and (b) general principles of
equity.

 

3.4.                              The execution
and delivery by the Borrower and Subsidiary of the Loan Documents and the
performance by the Borrower and Subsidiary of their respective obligations
under the Loan Documents do not violate any provisions of the Borrower’s or
Subsidiary’s articles of incorporation or bylaws, or any provisions of any
applicable federal or Minnesota law, rule or regulation known by us to be
customarily and generally applicable to transactions of this nature.  The execution and delivery by the Borrower
and Subsidiary of the Loan Documents and the performance by the Borrower and
Subsidiary of their respective obligations under the Loan Documents do not
violate, or constitute a default under any judgment or decree known to us that
is binding upon the Borrower or Subsidiary.

 

3.5.                              Except as
disclosed in the Amended and Restated Credit Agreement, to our knowledge, there
are no actions, suits, proceedings or investigations pending against the
Borrower, Subsidiary or their properties before any court or governmental
agency, nor has the Borrower or Subsidiary received any threat thereof.

 

3.6.                              No notice to,
consents from, or registration with, any Minnesota governmental authority which
we would recognize as being generally applicable to the Loans is required to be
made or obtained in connection with the authorization, execution, delivery and
performance of the Loan Documents and the Borrower or Subsidiary.

 

3.7.                              The proper
place to file the Financing Statements to perfect the security interest
described in the Guarantee and Collateral Agreement is the office of the
Secretary of State of Minnesota.  The
Financing Statements authorized by the Borrower

 

4

 

and Subsidiary are
sufficient in form to perfect, when so filed, each of the liens and security
interests in the personal property collateral described therein, to the extent
such liens and security interests are capable of being perfected by filing.

 

4.                                      Exceptions.  The opinions set forth above are further
subject to the following exceptions:

 

4.1.                              We express no
opinion as to any agreements, documents or instruments other than the Loan
Documents even though such agreements, documents or instruments may be
referenced in a Loan Document, and we express no opinion with respect to the
enforceability of the Loan Documents to the extent that the Loan Documents are
rendered unenforceable as a result of the unenforceability of such other
agreements, documents or instruments.

 

4.2.                              We express no
opinion with respect to the effect of any law other than the existing laws,
ordinances and regulations of the United States and Minnesota as of the date
hereof, as they are applied and construed as of the date hereof.

 

4.3.                              We express no
opinion as to the enforceability of provisions of the Loan Documents purporting
to give Lenders self-help remedies, to the extent such self-help remedies are
inconsistent with the UCC or provisions of Chapter 576 the Minnesota Statutes.

 

4.4.                              We express no
opinion as to the perfection of any security interest created by the Loan
Documents that cannot be perfected through filing with the Minnesota Secretary
of State.

 

4.5.                              We express no
opinion as to the enforceability of provisions of the Loan Documents to the
extent that they contain:

 

(a)                                  Waivers by any
parties of any constitutional rights or remedies, to the extent such waivers
are prohibited by law or in equity;

 

(b)                                 Waivers of
objections to venue or waivers of the right to a jury trial, or provisions in
which the parties submit to the jurisdiction of particular courts, to the
extent such waivers or submissions are prohibited by law or in equity;

 

(c)                                  Grants to
Lenders of unlimited powers of attorney or rights to endorse instruments, to
the extent such grants are prohibited by law or in equity or purport to grant
remedies to the holder that are not generally available to a secured party;

 

(d)                                 Cumulative
remedies to the extent such cumulative remedies purport to compensate, or would
have the effect of compensating, the party entitled

 

5

 

to the benefits in any
amount in excess of the actual loss suffered by such party;

 

(e)                                  Waivers of the
right of redemption, to the extent such waivers are prohibited by law or in
equity;

 

(f)                                    Indemnification
provisions to the extent they are against public policy or they purport to
provide indemnity against the indemnified party’s violation of any state or
federal security laws or regulations, or against the indemnified party’s
negligence, willful misconduct or illegal acts;

 

(g)                                 Provisions
stating that failure to exercise or delay in exercising rights or remedies will
not operate as a waiver of any such right or remedy or which purport to render
ineffective any waiver, modification or amendment not in writing;

 

(h)                                 Disclaimers and
other liability limitations with respect to third parties;

 

(i)                                     Provisions
which purport to obligate the Borrower or Subsidiary to execute any document
after the closing of the Loans if such execution could result in a material
change to the Borrower’s or Subsidiary’s rights;

 

(j)                                     Provisions
relating to choice of law or forum selection, consent to jurisdiction, venue or
service of process;

 

(k)                                  Provisions
which purport to confer upon Lenders as the holder of any note contained in the
Loan Documents all of the rights of a holder in due course of negotiable
instruments;

 

(l)                                     Waivers of any
defenses arising by reason of Lenders’ failure to mitigate damages; and

 

(m)                               Provisions
which purport to waive or release procedural or statutory rights to notice or
rights of a debtor or duties of a secured party to the extent such rights and
duties may not be waived by virtue of Minnesota Statutes Section 336.9-602.

 

4.6.                              We express no
opinion on the status of title to the real property or personal property
described in the Loan Documents or the priority of the Loan Documents relative
to other interests in any property securing promissory notes issued pursuant to
the Loan Documents, if any (the “Notes”). 
We also do not express any opinion as to the accuracy or adequacy of the
description of any property contained in the Loan Documents.

 

4.7.                              We express no
opinion as to the strict enforceability of each and every remedy set forth in
the Loan Documents, that every remedy available to Lenders in Minnesota has
been included or that any remedy will be the highest or best remedy, but

 

6

 

the Loan Documents do
provide legally adequate remedies for the practical realization of the
principal benefits of the security provided thereby.

 

4.8.                              We express no
opinion with respect to the application of or the compliance with any
applicable laws governing the use, development, operation or ownership of any
property, including without limitation, environmental laws, building codes,
zoning and other land use restrictions, occupational safety and health laws and
use and occupancy permits.

 

4.9.                              We express no
opinion as to the effect of (a) any federal or state fraudulent conveyance
or transfer law, including, without limitation, Section 548 of the United
States Bankruptcy Code, and (b) Section 552 of the United States
Bankruptcy Code insofar as such opinions address security interests or in
connection with post petition after-acquired property.

 

4.10.                        We express no
opinion with respect to the application of any usury law or other law regarding
the amount of interest permitted to be charged to borrowers by lenders.

 

4.11.                        We express no
opinion with regard to the ability of any party to collect or be reimbursed for
costs and expenses, including attorneys’ fees, to the extent that its rights
may be limited to reasonable fees and expenses as determined by a court or it
is not the prevailing party in the action.

 

4.12.                        We express no
opinion with regard to any right of Lenders to exercise remedies upon the
happening of a non-material breach of the Loan Documents.

 

5.                                      Qualifications.  The opinions set forth above are further
subject to the following qualifications:

 

5.1.                              The terms “knowledge”, “to our knowledge” and similar terms mean that, during the
course of this firm’s representation of the Borrower, no contrary information
came to the attention of Linda Holstein or Anh Le Kremer, the attorneys in our
firm who have devoted substantive attention to the matters directly related to
the Loan Documents, without having conducted any independent investigation,
verification or inquiry, except as specifically described in this opinion.  Whenever such term is used, no opinion is
expressed as to matters that in fact exist but are not actually known by such
lawyers, and no inference as to our knowledge concerning any facts may be drawn
as a result of the limited representation undertaken by us.  No inference as to our knowledge with respect
to the factual matters upon which we have so qualified our opinions should be
drawn from the fact of our representation of the Borrower.

 

5.2.                              As to matters
of fact relevant to this opinion, we have relied solely upon (a) our
examination of the documents referred to above and have assumed the current
accuracy and completeness of the information obtained from public officials and
records included in the documents referred to above; (b) our actual
knowledge (i.e., present,

 

7

 

conscious awareness); and (c) the
representations and warranties of the Borrower and Subsidiary, as set forth in
the Loan Documents.  We have made no
independent investigation or other attempt to verify the accuracy of any of
such information, representations or warranties or to determine the existence
or non-existence of any other factual matters, or consulted with other
attorneys in our firm with respect to the matters covered thereby, except as
expressly set forth herein; however, we are not aware of any facts that
would lead us to believe that any of the opinions expressed herein are not
accurate.

 

5.3.                              Lenders’
ability to enforce the Loan Documents may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or transfer and
other similar laws now or hereafter in effect relating to or affecting
creditors’ rights generally.

 

5.4.                              Enforcement of
Lenders’ rights and remedies under the Loan Documents is subject to the effect
of general principles of equity, including without limitation, limitations on
the availability of equitable remedies (including the discretion of courts in
granting or withholding equitable relief with respect to such enforcement) and
concepts of materiality, reasonableness, good faith and fair dealing and other
similar doctrines affecting the enforceability of agreements generally,
regardless of whether such enforcement is considered in a proceeding in equity
or at law.

 

5.5.                              Minn.  Stat. §290.371, subd. 4, provides that any
corporation required to file a Notice of Business Activities Report does not
have a cause of action upon which it may bring suit under the laws of Minnesota
unless the corporation has filed a Notice of Business Activities Report and
that the use of the Minnesota state courts for all contracts executed and all causes
of action that arose before the end of the period for which the corporation
failed to file a required report is precluded. 
We express no opinion as to whether Lenders are obligated to file
Minnesota Business Activity Reports, nor as to whether any of them is subject
to Minnesota taxes, including the corporate franchise tax (i.e. state income
tax), as a result of the present transaction. 
Insofar as the foregoing opinions may relate to the enforceability of
any agreement under the laws of Minnesota or any Minnesota state court, we have
assumed that any parties seeking to enforce the Loan Documents are, and will
continue at all times to be, exempt from the requirement of filing a Notice of
Business Activities Report, or if not exempt, have duly filed and will continue
to duly file, a Notice of Business Activities Report.

 

5.6.                              Under Article 9
of the UCC, the Financing Statements will be effective for a period of five
years from the date of due filing, unless sooner terminated by Lenders, and
will terminate at the expiration of said five-year period unless continuation
statements under Article 9 (as the same may be amended) are filed within
six months prior to said expiration in the appropriate office in the state
where the debtor is “located” at that time.

 

5.7.                              Without
limiting any other qualifications set forth herein, the opinions expressed
herein are subject to the effect of generally applicable laws that (a) provide
for

 

8

 

the enforcement of oral
waivers or modifications where a material change of position in reliance
thereon has occurred or provide that a course of performance may operate as a
waiver, (b) limit the availability of a remedy under certain circumstances
where another remedy has been elected, (c) limit the enforceability of
provisions releasing, exculpating or exempting a party from, or requiring
indemnification of a party for, liability for its own action or inaction, to
the extent the action or inaction involves gross negligence, recklessness,
willful misconduct or unlawful conduct, (d) limit the right of a creditor
to use force or cause a breach of the peace in enforcing rights, (e) relate
to the sale or disposition of collateral or the requirements of a commercially
reasonable sale, (f) may limit the enforceability of provisions imposing
increased interest rates or late payment charges upon delinquency in payment or
default, providing for liquidated damages or for premiums upon default or
acceleration; (g) provide for limitation of actions.

 

5.8.                              We do not
assume any responsibility for the accuracy, completeness or fairness of any
information, including, but not limited to, financial information, furnished to
you by the Borrower or Subsidiary, in any capacity, concerning the business,
assets, and affairs of the Borrower or Subsidiary or any other information
furnished to you by the Borrower or Subsidiary or furnished by us as counsel to
Borrower, except for our conclusions of law in this opinion letter.

 

5.9.                              This opinion is
limited to matters expressly stated herein, and no opinion is implied or may be
inferred beyond the matters expressly stated. 
We furnish this opinion as counsel for the Borrower solely for the
purposes contemplated by the Loan Documents. 
The opinions expressed herein may be relied upon only by Lenders,
Lenders’ successors and assigns, participants in the Loans, any placement
agent, underwriter or principal of any rating agency rating any securities
evidencing interests in or secured by the Loans, and only in connection with
the Loans.  Our opinion may not be used,
quoted from, referred to or relied upon by Lenders or by any other person for
any other purpose, nor may copies be delivered to any other person, without in
each instance our prior written consent; except that Lenders may deliver copies
of this opinion to (a) Lenders’ independent accountants, attorneys and
other professional advisors acting on Lenders’ behalf in connection with the
Loans or the transactions contemplated thereby, and rating agency rating any
securities (as described above in this paragraph) or auditing, monitoring or
evaluating Lenders’ investments or Lenders’ compliance with investment grading
or evaluation, (b) governmental regulatory agencies having jurisdiction
over Lenders to the extent disclosure of the opinion is required by applicable
law or regulations, (c) designated persons pursuant to order or legal
process of any court or governmental agency or authority of competent
jurisdiction; and (d) prospective purchasers of the Notes and participants
in the Loans, or if otherwise required by law. 
We have no obligation to provide Lenders with any additional information
that may come to our attention after the date hereof or to revise or reissue
this opinion with respect to any change in law or any event, fact, circumstance
or transaction which occurs after the date hereof.  This opinion is not intended to be an
indemnification or hold harmless agreement or undertaking on our part.

 

9

 

5.10.                        Perfection of
security interests may be limited to the extent that any of the non-real estate
collateral described in the Financing Statements is: (a) property in which
a security interest cannot be perfected by filing with the Secretary of State
of Minnesota under Article 9 of the Uniform Commercial Code in effect in
Minnesota, Minnesota Statutes, Sections 336.9-101 et. seq. (2000) (the “UCC”); (b) consumer goods or accounts
resulting from the sale thereof; (c) a beneficial interest in a trust or
decedent’s estate; (d) deposit accounts, except to the extent that Lenders
has perfected its security interest in those deposit accounts by control of the
deposit accounts as required under the UCC; (e) commercial tort claims,
letters of credit or letter of credit rights; (f) goods subject to
certificates of title (including, without limitation, motor vehicles); (g) equipment
to be used in farming operations, farm products, agricultural or farm property,
accounts or general intangibles arising from or relating to the sale of farm
products, or crops; (h) timber; (i) minerals, oil, gas or the like;
or (j) items which are subject to a statute or treaty of the United States
of America which provides for a national or international certificate of title
for the perfection of a security interest therein or which specifies a place of
filing different from that specified in the UCC for filing to perfect such
security interest.

 

5.11.                        The
enforceability of the Loan Documents is limited by the extent to which the
parties to the Loan Documents, and their successors and/or assigns: (a) fail
to act in good faith and, with respect to the exercise of remedies under the
UCC, in circumstances and a manner which are commercially reasonable in the
exercise of any rights or enforcement of any remedies under the Loan Documents;
(b) engage in any conduct in the exercise of such rights or enforcement of
such remedies that would constitute other than fair and impartial dealing or
would be unconscionable or otherwise contrary to public policy, and (c) fail
to comply with all requirements of applicable procedural and substantive law in
exercising any rights or enforcing any remedies under the Loan Documents.

 

5.12.                        All Uniform
Commercial Code filings may become unperfected: (a) in the event of a
change in the name, identity or structure of any debtor, (b) in the event
of a change in the state of organization of any debtor, and (c) in the
event that Lenders fails to continue to maintain the effectiveness of
perfection of the Financing Statements under the Uniform Commercial Code.

 

5.13.                        The
enforceability of the Loan Documents may be limited by the extent to which the
parties to the Loan Documents have entered into agreements which are not
reflected in the Loan Documents.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  HOLSTEIN LAW FIRM, P.L.L.C.

  

 

10

 

EXHIBIT C

	
   

  

 

GUARANTEE AND COLLATERAL AGREEMENT

 

dated as of

 

[           ]

 

among

 

AGA MEDICAL CORPORATION,

 

as Borrower

 

and

 

LEHMAN COMMERCIAL PAPER INC.

 

as Collateral Agent

	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  DEFINITION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 1.01.

  	
  Credit
  Agreement

  	
   

  	
  1

  
	
  Section 1.02.

  	
  Other
  Defined Terms

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  GUARANTEE

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 2.01.

  	
  Guarantee

  	
   

  	
  6

  
	
  Section 2.02.

  	
  Guarantee
  of Payment

  	
   

  	
  6

  
	
  Section 2.03.

  	
  No
  Limitations

  	
   

  	
  6

  
	
  Section 2.04.

  	
  Reinstatement

  	
   

  	
  7

  
	
  Section 2.05.

  	
  Agreement
  To Pay; Subrogation

  	
   

  	
  7

  
	
  Section 2.06.

  	
  Information

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  PLEDGE OF SECURITIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 3.01.

  	
  Pledge

  	
   

  	
  8

  
	
  Section 3.02.

  	
  Delivery
  of the Pledged Collateral

  	
   

  	
  8

  
	
  Section 3.03.

  	
  Representations,
  Warranties and Covenants

  	
   

  	
  9

  
	
  Section 3.04.

  	
  Certification
  of Limited Liability Company and Limited Partnership Interests

  	
   

  	
  10

  
	
  Section 3.05.

  	
  Registration
  in Nominee Name; Denominations

  	
   

  	
  11

  
	
  Section 3.06.

  	
  Voting
  Rights; Dividends and Interest

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECURITY INTERESTS IN PERSONAL PROPERTY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 4.01.

  	
  Security
  Interest

  	
   

  	
  13

  
	
  Section 4.02.

  	
  Representations
  and Warranties

  	
   

  	
  15

  
	
  Section 4.03.

  	
  Covenants

  	
   

  	
  16

  
	
  Section 4.04.

  	
  Other
  Actions

  	
   

  	
  19

  
	
  Section 4.05.

  	
  Covenants
  Regarding Patent, Trademark and Copyright Collateral

  	
   

  	
  21

  
	
  Section 4.06.

  	
  Cash
  Management System, Securities Accounts and Commodity Accounts

  	
   

  	
  23

  

 

i

 

	
  ARTICLE V

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  REMEDIES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 5.01.

  	
  Remedies
  upon Default

  	
   

  	
  24

  
	
  Section 5.02.

  	
  Application
  of Proceeds

  	
   

  	
  25

  
	
  Section 5.03.

  	
  Grant
  of License To Use Intellectual Property

  	
   

  	
  26

  
	
  Section 5.04.

  	
  Securities
  Act

  	
   

  	
  26

  
	
  Section 5.05.

  	
  Communications
  with Obligors; Grantors Remain Liable

  	
   

  	
  27

  
	
  Section 5.06.

  	
  Deficiency

  	
   

  	
  28

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  INDEMNITY, SUBROGATION AND SUBORDINATION

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 6.01.

  	
  Indemnity
  and Subrogation

  	
   

  	
  28

  
	
  Section 6.02.

  	
  Contribution
  and Subrogation

  	
   

  	
  29

  
	
  Section 6.03.

  	
  Subrogation

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  MISCELLANEOUS

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Section 7.01.

  	
  Notices

  	
   

  	
  29

  
	
  Section 7.02.

  	
  Waivers;
  Amendment

  	
   

  	
  30

  
	
  Section 7.03.

  	
  Collateral
  Agent’s Fees and Expenses; Indemnification

  	
   

  	
  30

  
	
  Section 7.04.

  	
  Duty
  of Collateral Agent

  	
   

  	
  31

  
	
  Section 7.05.

  	
  Successors
  and Assigns

  	
   

  	
  31

  
	
  Section 7.06.

  	
  Survival
  of Agreement

  	
   

  	
  31

  
	
  Section 7.07.

  	
  Counterparts;
  Effectiveness; Several Agreement

  	
   

  	
  31

  
	
  Section 7.08.

  	
  Severability

  	
   

  	
  32

  
	
  Section 7.09.

  	
  Right
  of Set-Off

  	
   

  	
  32

  
	
  Section 7.10.

  	
  GOVERNING
  LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS

  	
   

  	
  32

  
	
  Section 7.11.

  	
  WAIVER
  OF JURY TRIAL

  	
   

  	
  33

  
	
  Section 7.12.

  	
  Headings

  	
   

  	
  33

  
	
  Section 7.13.

  	
  Security
  Interest Absolute

  	
   

  	
  33

  
	
  Section 7.14.

  	
  Termination
  or Release

  	
   

  	
  34

  
	
  Section 7.15.

  	
  Additional
  Subsidiaries; Holdings

  	
   

  	
  34

  
	
  Section 7.16.

  	
  Collateral
  Agent Appointed Attorney-in-Fact

  	
   

  	
  35

  
	
  Section 7.17.

  	
  Further
  Assurances

  	
   

  	
  36

  

 

ii

 

	
  Schedules

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule
  I

  	
  Subsidiary
  Loan Parties

  	
   

  	
   

  
	
  Schedule
  II

  	
  Pledged
  Stock; Debt Securities

  	
   

  	
   

  
	
  Schedule
  III

  	
  Intellectual
  Property

  	
   

  	
   

  
	
  Schedule
  IV

  	
  Commercial
  Tort Claims

  	
   

  	
   

  
	
  Schedule
  V

  	
  Deposit
  Accounts

  	
   

  	
   

  
	
  Schedule
  VI

  	
  Securities
  Accounts

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibits

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit I

  	
  Form of
  Supplement

  	
   

  	
   

  
	
  Exhibit II

  	
  Form of
  Deposit Account Control Agreement

  	
   

  	
   

  
	
  Exhibit III

  	
  Form of
  Securities Account Control Agreement

  	
   

  	
   

  
	
  Exhibit IV

  	
  Form of
  Patent Security Agreement

  	
   

  	
   

  
	
  Exhibit V

  	
  Form of
  Trademark Security Agreement

  	
   

  	
   

  
	
  Exhibit VI

  	
  Form of
  Copyright Security Agreement

  	
   

  	
   

  

 

iii

 

GUARANTEE
AND COLLATERAL AGREEMENT (this “Agreement”) dated as of July 28,
2005, among AGA MEDICAL CORPORATION, a Minnesota corporation, AMPLATZER MEDICAL
SALES CORPORATION, a Minnesota corporation and LEHMAN COMMERCIAL PAPER INC., as
Collateral Agent.

 

Reference
is made to the Credit Agreement dated as of July 28, 2005 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among AGA Medical Corporation (the “Borrower”), Bank of America, N.A.,
Citicorp USA, Inc., Deutsche Bank Trust Company Americas, Wachovia Bank,
National Association and Lehman Commercial Paper Inc., as Administrative Agent.
The Lenders have agreed to extend credit to the Borrower subject to the terms
and conditions set forth in the Credit Agreement. The obligations of the
Lenders to extend such credit are conditioned upon, among other things, the
execution and delivery of this Agreement. Holdings and the Subsidiary Loan
Parties (each as defined below) are affiliates of the Borrower, will derive
substantial benefits from the extension of credit to the Borrower pursuant to
the Credit Agreement and are willing to execute and deliver this Agreement in
order to induce the Lenders to extend such credit. Accordingly, the parties
hereto agree as follows:

 

ARTICLE
I

 

Definitions

 

Section 1.01.          Credit
Agreement.  (a) Capitalized
terms used in this Agreement and not otherwise defined in this Agreement have
the meanings specified in the Credit Agreement. All terms defined in the New
York UCC (as defined in this Agreement) and not defined in this Agreement have
the meanings specified therein.

 

(b)           The rules of construction
specified in Section 1.03 of the Credit Agreement also apply to this
Agreement, mutatis mutandis.

 

Section 1.02.          Other
Defined Terms. As used in this Agreement, the following terms have the
meanings specified below:

 

“Account” has the meaning assigned to such term in Section 9-102(a)(2) of
the New York UCC.

 

“Account Debtor” means any Person who is or who may become
obligated to any Grantor under, with respect to or on account of an Account.

 

“Article 9 Collateral” has the meaning assigned to such
term in Section 4.01. “Collateral” means Article 9 Collateral and
Pledged Collateral.

 

“Commodity Account Control Agreement” means a control agreement
in a form that is reasonably satisfactory to the Collateral Agent and the
Borrower establishing the Collateral Agent’s Control with respect to any
Commodity Account.

 

“Constituent Documents” means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation or certificate of
formation (or the equivalent

 

 

organizational
documents) of such Person, (b) the by-laws, operating agreement (or the
equivalent governing documents) of such Person and (c) any document
setting forth the manner of election and duties of the directors or managing
members of such Person (if any) and the designation, amount or relative rights,
limitations and preferences of any class or series of such Person’s Stock.

 

“Control” shall mean (i) in the case of each Deposit
Account, “control”, as such term is defined in Section 9-104 of the New
York UCC, (ii) in the case of any Securities Account, “control” as such
term is defined in Section 8-106 of the New York UCC, and (iii) in
the case of any Commodity Account, “control”, as such term is defined in
section 9-106 of the New York UCC.

 

“Control Agreements” means, collectively, the Deposit Account
Control Agreements, the Securities Account Control Agreements and the Commodity
Account Control Agreements.

 

“Copyright License” means any written agreement, now or
hereafter in effect, granting any right to any third party under any copyright
now or hereafter owned by any Grantor or that such Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.

 

“Copyrights” means all of the following now owned or hereafter
acquired by any Grantor: (a) all copyright rights in any work subject to the
copyright laws of the United States or any other country, whether as author,
assignee, transferee or otherwise and (b) all registrations and
applications for registration of any such copyright in the United States or any
other country, including registrations, recordings, supplemental registrations
and pending applications for registration in the United States Copyright
Office, including those listed on Schedule III.

 

“Credit Agreement” has the meaning assigned to such term in the
preliminary statement in this Agreement.

 

“Deposit Account Control Agreement” means an agreement
substantially in the form annexed hereto as Exhibit II or such
other form as is reasonably satisfactory to the Collateral Agent and the
Borrower establishing Collateral Agent’s Control with respect to any Deposit
Account.

 

“Deposit Accounts” means, collectively, with respect to each
Grantor, (i) all “deposit accounts” as such term is defined in the New
York UCC and in any event shall include the LC Account and all accounts and
sub-accounts relating to any of the foregoing accounts and (ii) all cash,
funds, checks, notes and instruments from time to time on deposit in any of the
accounts or sub-accounts described in clause (i) of this definition.

 

“Federal Securities Laws” has the meaning assigned to such term
in Section 5.04.

 

2

 

“General Intangibles” means all “General Intangibles” of any
Grantor as defined in Section 9-102(42) of the New York UCC.

 

“Grantors” means Holdings (upon Holdings becoming a party hereto
pursuant to Section 5.12(b) of the Credit Agreement), the Borrower
and the Subsidiary Loan Parties.

 

“Guarantors” means Holdings and the Subsidiary Loan Parties.

 

“Instrument” has the meaning specified in Article 9 of the
New York UCC.

 

“Intellectual Property” means all intellectual and similar
property of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor, including inventions, designs, Patents, Copyrights,
Licenses, Trademarks, trade secrets, confidential or proprietary technical and
business information, know-how or other data or information, software and
databases and all embodiments or fixations thereof and related documentation,
registrations and franchises, and all additions, improvements and accessions
to, and books and records describing or used in connection with, any of the
foregoing.

 

“Investment Property” means the collective reference to (i) all
“investment property” as such term is defined in Section 9-102(a)(49) of
the New York UCC

 

“Issuers” means the collective reference to each issuer of any
Investment Property.

 

“LC Account” means any account established and maintained in
accordance with the provisions of Section 2.05(j) of the
Credit Agreement and all property from time to time on deposit in such LC
Account.

 

“License” means any Patent License, Trademark License, Copyright
License or other license or sublicense agreement to which any Grantor is a
party, including those listed on Schedule III.

 

“Loan Document Obligations” means (a) the due and punctual
payment by the Borrower of (i) the principal of and interest (including
interest accruing at the then applicable rate provided in the Credit Agreement
after the maturity of the Loans and interest and interest accruing at the then
applicable rate provided in the Credit Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) and obligations to provide cash collateral, and (iii) all
other monetary obligations of the Borrower to any of the Secured Parties under
the Credit Agreement and each other Loan Document, including obligations to pay
fees, costs,

 

3

 

expense
reimbursement obligations and indemnification obligations, whether primary,
secondary, direct, indirect, absolute, contingent, due or to become due, now
existing or hereinafter incurred, fixed or otherwise (including monetary obligations
incurred during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding), (b) the due and punctual performance of all other obligations
of the Borrower under or pursuant to the Credit Agreement and each other Loan
Document, and (c) the due and punctual payment and performance in full of
all the obligations of each other Loan Party under or pursuant to this
Agreement and each other Loan Document. It is understood that Loan Document
Obligations shall not include Swap Agreement Obligations.

 

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

 

“Obligations” means (a) Loan Document Obligations and (b) the
Swap Agreement Obligations.

 

“Patent License” means any written agreement, now or hereafter
in effect, granting to any third party any right to make, use or sell any
invention on which a patent, now or hereafter owned by any Grantor or that any
Grantor otherwise has the right to license, is in existence, or granting to any
Grantor any right to make, use or sell any invention on which a patent, now or
hereafter owned by any third party, is in existence, and all rights of any
Grantor under any such agreement.

 

“Patents” means all of the following now owned or hereafter
acquired by any Grantor:  (a) all
letters patent of the United States or the equivalent thereof in any other
country, all registrations and recordings thereof, and all applications for
letters patent of the United States or the equivalent thereof in any other
country, including registrations, recordings and pending applications in the
United States Patent and Trademark Office or any similar offices in any other
country, including those listed on Schedule III, and (b) all reissues,
continuations, divisions, continuations-in-part, renewals or extensions
thereof, and the inventions disclosed or claimed therein, including the right
to make, use and/or sell the inventions disclosed or claimed therein.

 

“Pledged Collateral” has the meaning assigned to such term in Section 3.01.

 

“Pledged Debt Securities” has the meaning assigned to such term
in Section 3.01.

 

“Pledged Securities” means any promissory notes, stock
certificates or other securities now or hereafter included in the Pledged
Collateral, including all certificates, instruments or other documents
representing or evidencing any Pledged Collateral.

 

“Pledged Stock” has the meaning assigned to such term in Section 3.01.

 

“Proceeds” has the meaning specified in Section 9-102(a)(64)
of the New York UCC.

 

4

 

“Receivable” means any right to payment for goods sold, leased,
licensed, assigned or otherwise disposed of, or for services rendered, whether
or not such right is evidenced by an Instrument or Chattel Paper and whether or
not it has been earned by performance (including, without limitation, any
Account).

 

“Secured Parties” means (a) the Lenders, (b) the
Collateral Agent, (c) the Administrative Agent, (d) the Issuing Bank,
(e) each counterparty that is a Lender or an Affiliate of a Lender to any
Swap Agreement with a Loan Party the obligations under which constitute
Obligations and (f) the successors and assigns of each of the foregoing.

 

“Security” has the meaning assigned to it under Section 8-102(a)(15)
of the New York UCC.

 

“Securities Account Control Agreement” means an agreement
substantially in the form annexed hereto as Exhibit III or an
agreement in a form that is reasonably satisfactory to the Collateral Agent and
the Borrower establishing the Collateral Agent’s Control with respect to any
Securities Account.

 

“Security Interest” has the meaning assigned to such term in Section 4.01.

 

“Stock” means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.

 

“Subsidiary Loan Parties” means (a) the Subsidiaries
identified on Schedule I and (b) each other Subsidiary that becomes a
party to this Agreement as a Subsidiary Loan Party after the Effective Date.

 

“Swap Agreement Obligations” means the obligations of each Loan
Party under each Swap Agreement that (i) is in effect on the Effective
Date with a counterparty that is a Lender or an Affiliate of a Lender as of the
Effective Date or (ii) is entered into after the Effective Date with any
counterparty that is a Lender or an Affiliate of a Lender at the time such Swap
Agreement is entered into but only to the extent that, and only so long as, the
obligations under the Swap Agreements are secured and guaranteed pursuant
hereto.

 

“Trademark License” means any written agreement, now or
hereafter in effect, granting to any third party any right to use any trademark
now or hereafter owned by any Grantor or that any Grantor otherwise has the
right to license, or granting to any Grantor any right to use any trademark now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement.

 

“Trademarks” means all of the following now owned or hereafter
acquired by any Grantor: (a) all trademarks, service marks, trade names,
domain names, corporate names, company names, business names, fictitious
business names, trade styles, trade dress, logos, other source or business
identifiers, designs and general intangibles of like nature, now existing or
hereafter adopted or acquired, all registrations and recordings thereof, and
all registration and recording applications filed in connection therewith,
including

 

5

 

registrations
and registration applications in the United States Patent and Trademark Office
or any similar offices in any State of the United States or any other country
or any political subdivision thereof, and all extensions or renewals thereof,
including those listed on Schedule III, (b) all goodwill associated
therewith or symbolized thereby and (c) all other assets, rights and
interests that uniquely reflect or embody such goodwill.

 

ARTICLE
II

 

Guarantee

 

Section 2.01.          Guarantee.  Each Guarantor unconditionally and
irrevocably guarantees, jointly with the other Guarantors and severally, as a
primary obligor and not merely as a surety, for the ratable benefit of the
Secured Parties and their respective successors, indorsees, transferees and
assigns, the punctual payment and performance in full of the Obligations when
due (whether at stated maturity, by acceleration or otherwise). Each Guarantor
further agrees that the Obligations may be extended or renewed, in whole or in
part, or amended or modified, without notice to or further assent from it, and
that it will remain bound upon its guarantee notwithstanding any extension,
renewal, amendment or modification of the Obligations. Each Guarantor waives
presentment to, demand of payment from and protest to the Borrower or any other
Loan Party of the Obligations and also waives notice of acceptance of its
guarantee and notice of protest for nonpayment and notice of default or
non-payment.

 

Section 2.02.          Guarantee
of Payment.  Each Guarantor further
agrees that its guarantee hereunder constitutes a guarantee of payment when due
and not of collection, and waives any right to require that any resort be had
by the Collateral Agent or any other Secured Party to any security held for the
payment of the Obligations or to any balance of any Deposit Account or credit
on the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other Person.

 

Section 2.03.          No
Limitations.  (a) Except for
termination of a Guarantor’s obligations hereunder as expressly provided in Section 7.13,
the obligations of each Guarantor hereunder shall not be subject to any
reduction, limitation, impairment or termination for any reason, including any
claim of waiver, release, surrender, alteration or compromise, and shall not be
subject to any defense or set-off, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality or unenforceability of the
Obligations or otherwise. Without limiting the generality of the foregoing, the
obligations of each Guarantor hereunder shall not be discharged or impaired or
otherwise affected by (i) the failure of the Collateral Agent or any other
Secured Party to assert any claim or demand or to enforce any right or remedy
under the provisions of any Loan Document or otherwise; (ii) any
rescission, waiver, amendment or modification of, or any release from any of
the terms or provisions of, any Loan Document or any other agreement, including
with respect to any other Guarantor under this Agreement; (iii) the
release of, impairment of or failure to perfect any Lien held by the Collateral
Agent or any other Secured Party for the payment and performance of the
Obligations or any of them; (iv) any default, failure or delay, willful or
otherwise, in the performance of the Obligations; or (v) any other act or
omission that may or might in any manner or to any extent vary the risk of any
Guarantor or otherwise operate as a discharge of any Guarantor as a matter of
law or equity (other than the indefeasible payment in full in cash of the
Obligations). Each Guarantor expressly

 

6

 

authorizes
the Collateral Agent (i) to take and hold security for the payment and
performance of the Obligations, (ii) to exchange, waive or release any or
all such security (with or without consideration), (iii) to enforce or
apply such security and direct the order and manner of any sale thereof in its
sole discretion or (iv) to release or substitute any one or more other
guarantors or obligors upon or in respect of the Obligations, all without
affecting the obligations of any Guarantor hereunder.

 

(b)           To the fullest extent permitted by
applicable law, each Guarantor waives any defense based on or arising out of
any defense of the Borrower or any other Loan Party or the unenforceability of
the Obligations or any part thereof from any cause, or the cessation from any
cause of the liability of the Borrower or any other Loan Party, other than the
indefeasible payment in full in cash of all the Obligations. The Collateral
Agent and the other Secured Parties may, at their election, foreclose on any
security held by one or more of them by one or more judicial or nonjudicial
sales, accept an assignment of any such security in lieu of foreclosure,
compromise or adjust any part of the Obligations, make any other accommodation
with the Borrower or any other Loan Party or exercise any other right or remedy
available to them against the Borrower or any other Loan Party, without
affecting or impairing in any way the liability of any Guarantor hereunder
except to the extent the Obligations have been fully and indefeasibly paid in
full in cash. To the fullest extent permitted by applicable law, each Guarantor
waives any defense arising out of any such election even though such election
operates, pursuant to applicable law, to impair or to extinguish any right of
reimbursement or subrogation or other right or remedy of such Guarantor against
the Borrower or any other Loan Party, as applicable, or any security.

 

Section 2.04.          Reinstatement.  Each of the Guarantors agrees that its
guarantee hereunder shall continue to be effective or be reinstated, as
applicable, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by the Collateral Agent or any other
Secured Party upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower, any other Loan Party or otherwise or upon
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its property,
or otherwise, all as though such payments had not been made.

 

Section 2.05.          Agreement
To Pay; Subrogation. In furtherance of the foregoing and not in limitation
of any other right that the Collateral Agent or any other Secured Party has at
law or in equity against any Guarantor by virtue hereof, upon the failure of
the Borrower or any other Loan Party to pay any Obligation when and as the same
shall become due, whether at maturity, by acceleration, after notice of
prepayment or otherwise, each Guarantor hereby promises to and will forthwith
pay, or cause to be paid, without setoff or counterclaim, to the Collateral
Agent for distribution to the applicable Secured Parties in cash the amount of
such unpaid Obligation. Upon payment by any Guarantor of any sums to the
Collateral Agent as provided above, all rights of such Guarantor against the
Borrower or any other Loan Party arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subject to Article VI.

 

Section 2.06.          Information.
Each Guarantor assumes all responsibility for being and keeping itself informed
of the Borrower’s and each other Loan Party’s financial condition

 

7

 

and
assets and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that such
Guarantor assumes and incurs hereunder and agrees that none of the Collateral
Agent or the other Secured Parties will have any duty to advise such Guarantor
of information known to it or any of them regarding such circumstances or
risks.

 

ARTICLE
III

 

Pledge
of Securities

 

Section 3.01.          Pledge.
As security for the prompt payment or performance, as applicable, in full of
the Obligations when due (whether at stated maturity, by acceleration or
otherwise), each Grantor hereby grants to the Collateral Agent, its successors
and assigns, for the ratable benefit of the Secured Parties, a security
interest in, all of such Grantor’s right, title and interest in, to and under (a) the
shares of capital stock and other Equity Interests of the Borrower and each
Subsidiary owned by it and listed on Schedule II and any other Equity Interests
of a Subsidiary obtained in the future by such Grantor and the certificates
representing all such Equity Interests (the “Pledged Stock”), provided
that the Pledged Stock shall not include more than 65% of the outstanding
voting Equity Interests of any Foreign Subsidiary; (b)(i) the debt securities
listed opposite the name of such Grantor on Schedule II, (ii) any debt
securities issued after the Effective Date to such Grantor by Holdings, the
Borrower, each Subsidiary and any other Person and (iii) the promissory
notes and any other instruments evidencing such debt securities (the “Pledged
Debt Securities”); (c) all other property that may be delivered to and
held by the Collateral Agent pursuant to the terms of this Section 3.01; (d) subject
to Section 3.06, all payments of principal or interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of, in exchange for or upon the conversion of,
and all other Proceeds received in respect of, the securities referred to in
clauses (a), (b) and (c) above; (e) subject to Section 3.06,
all rights and privileges of such Grantor with respect to the securities and
other property referred to in clauses (a), (b), (c) and (d) above;
and (f) all Proceeds of any of the foregoing (the items referred to in
clauses (a) through (f) above being collectively referred to as the “Pledged
Collateral”).

 

TO
HAVE AND TO HOLD the Pledged Collateral, together with all right, title,
interest, powers, privileges and preferences pertaining or incidental thereto,
unto the Collateral Agent, its successors and assigns, for the ratable benefit
of the Secured Parties, forever, subject, however, to the terms,
covenants and conditions hereinafter set forth.

 

Section 3.02.          Delivery
of the Pledged Collateral.  (a) Each
Grantor represents and warrants that all certificates, agreements or
instruments representing or evidencing the Pledged Collateral in existence on
the date hereof have been delivered to the Collateral Agent in suitable form
for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank. Each Grantor agrees promptly to deliver or
cause to be delivered to the Collateral Agent any and all Pledged Securities.

 

(b)           Each Grantor will cause any
Indebtedness for borrowed money owed to such Grantor by any Person (other than
a Loan Party) which is (A) in excess of $500,000 and (B)

 

8

 

evidenced by a duly executed
promissory note to be pledged and delivered to the Collateral Agent pursuant to
the terms hereof.

 

(c)           Upon delivery to the Collateral
Agent, (i) any Pledged Securities shall be accompanied by undated stock
powers duly executed in blank or other undated instruments of transfer
reasonably satisfactory to the Collateral Agent and by such other instruments
and documents as the Collateral Agent may reasonably request and (ii) all
other property comprising part of the Pledged Collateral shall be accompanied
by proper instruments of assignment duly executed by the applicable Grantor and
such other instruments or documents as the Collateral Agent may reasonably
request. Each delivery of Pledged Securities shall be accompanied by a schedule
describing such Pledged Securities, which schedule shall be attached hereto as
a supplement to Schedule II and made a part hereof, provided that
failure to attach any such schedule hereto shall not affect the validity of
such pledge of such Pledged Securities. Each schedule so delivered shall
supplement any prior schedules so delivered.

 

Section 3.03.          Representations,
Warranties and Covenants. The Grantors jointly and severally represent,
warrant and covenant to and with the Collateral Agent, for the benefit of the
Secured Parties, that:

 

(a)           Schedule II
correctly sets forth the percentage of the issued and outstanding shares (or
units or other comparable measure) of each class of the Equity Interests of the
issuer thereof represented by the Pledged Stock and includes all Equity
Interests, debt securities and promissory notes required to be pledged
hereunder in order to satisfy the Collateral and Guarantee Requirement;

 

(b)           the Pledged Stock
and Pledged Debt Securities have been duly and validly authorized and issued by
the issuers thereof and (i) in the case of Pledged Stock, are fully paid
and nonassessable and (ii) in the case of Pledged Debt Securities, are
legal, valid and binding obligations of the issuers thereof;

 

(c)           except for the security interests
granted hereunder, each of the Grantors (i) is and, subject to any
transfers made in compliance with the Credit Agreement, will continue to be the
direct owner, beneficially and of record, of the Pledged Securities indicated
on Schedule II as owned by such Grantor, (ii) has good and marketable
title to and holds the same free and clear of all Liens, other than Liens
created by any Loan Document and Liens permitted by Section 6.02 of the
Credit Agreement, (iii) will make no sale, exchange, assignment, pledge,
hypothecation or transfer of, or grant any option with respect to, or create or
permit to exist any security interest in or other Lien on, the Pledged
Collateral, other than Liens created by any Loan Document, Liens permitted by Section 6.02
of the Credit Agreement and transfers made in compliance with the Credit
Agreement, (iv) will defend its title or interest thereto or therein
against any and all Liens (other than Liens created by any Loan Document and
Liens permitted by Section 6.02 of the Credit Agreement), however arising,
of all Persons whomsoever;

 

(d)           except for restrictions and limitations
imposed by (i) the Loan Documents, (ii) securities laws generally or (iii) customary
provisions in joint venture agreements relating to purchase options, rights for
first refusal, tag, drag, call or similar rights of a

 

9

 

third
party that owns Equity Interests in such joint venture, the Pledged Collateral
is and will continue to be freely transferable and assignable, and none of the
Pledged Collateral is or will be subject to any option, right of first refusal,
shareholders agreement, charter or by-law provision or contractual restriction
of any nature that might prohibit, impair, delay or otherwise affect the pledge
of such Pledged Collateral hereunder, the sale or disposition thereof pursuant
hereto or the exercise by the Collateral Agent of rights and remedies
hereunder;

 

(e)           each of the Grantors has the power
and authority to pledge the Pledged Collateral pledged by it hereunder in the
manner hereby done or contemplated;

 

(f)            no consent or approval of any
Governmental Authority, any securities exchange or any other Person was or is
necessary to the validity of the pledge affected hereby (other than such as
have been obtained and are in full force and effect);

 

(g)           by virtue of the execution and delivery
by the Grantors of this Agreement, when any Pledged Securities are delivered to
the Collateral Agent in accordance with this Agreement, the Collateral Agent
will obtain, for the benefit of the Secured Parties, a legal, valid and
perfected lien upon and security interest in such Pledged Securities as
security for the payment and performance of the Obligations;

 

(h)           the pledge effected hereby is
effective to vest in the Collateral Agent, for the ratable benefit of the
Secured Parties, the rights of the Collateral Agent in the Pledged Collateral
as set forth in this Agreement; and

 

(i)            each Grantor shall (unless in the
reasonable judgment of its board of directors such actions will be detrimental
to the conduct of its business) use its commercially reasonable efforts to
obtain all consents, approvals, modifications or amendments required to effect
the pledge pursuant to the terms hereof of such Grantor’s right, title and
interest in each Permitted Joint Venture that is not a Permitted Joint Venture
Loan Party.

 

Section 3.04.          Certification
of Limited Liability Company and Limited Partnership Interests.  (a) Each Grantor acknowledges and agrees
that each interest in any limited liability company or limited partnership
controlled by any Grantor and acquired after the Effective Date and pledged
hereunder that is represented by a certificate, shall be a “security” within
the meaning of Article 8 of the New York UCC and shall be governed by Article 8
of the New York UCC.

 

(b)           Each Grantor further acknowledges and
agrees that (i) the interests in any limited liability company or limited
partnership controlled by such Grantor and pledged hereunder that are not
represented by a certificate are not “securities” within the meaning of Article 8
of the New York UCC and (ii) such Grantor shall at no time elect to treat
any such interest as a “security” within the meaning of Article 8 of the
New York UCC or issue any certificate representing such interest, unless such
Grantor provides prompt written notification to the Collateral Agent of such
election and promptly (but in no case later than 10 Business Days) pledges any
such certificate to the Collateral Agent pursuant to the terms hereof.

 

10

 

Section 3.05.          Registration
in Nominee Name; Denominations. The Collateral Agent, on behalf of the
Secured Parties, shall have the right (in its sole and absolute discretion) to
hold the Pledged Securities in the name of the applicable Grantor, endorsed or
assigned in blank or in favor of the Collateral Agent or, upon the occurrence
and during the continuation of an Event of Default, in its own name as pledgee
or the name of its nominee (as pledgee or as sub-agent). Each Grantor will
promptly give to the Collateral Agent copies of any notices or other
communications received by it with respect to Pledged Securities registered in
the name of such Grantor. The Collateral Agent shall at all times upon the
occurrence and during the continuation of an Event of Default have the right to
exchange the certificates representing Pledged Securities for certificates of
smaller or larger denominations for any purpose consistent with this Agreement.

 

Section 3.06.          Voting
Rights; Dividends and Interest.  (a) Unless
and until an Event of Default shall have occurred and be continuing and the
Collateral Agent shall have notified the Grantors that their rights under this Section 3.06
are being suspended:

 

(i)            Each Grantor shall
be entitled to exercise any and all voting and other consensual rights and
powers inuring to an owner of Pledged Securities or any part thereof for any
purpose consistent with the terms in this Agreement, the Credit Agreement and
the other Loan Documents, provided that such rights and powers shall not
be exercised in any manner that would reasonably be expected to materially and
adversely affect the rights inuring to a holder of any Pledged Securities or
the rights and remedies of any of the Collateral Agent or the other Secured
Parties under this Agreement or the Credit Agreement or any other Loan Document
or the ability of the Secured Parties to exercise the same.

 

(ii)           The Collateral Agent shall execute
and deliver to each Grantor, or cause to be executed and delivered to such
Grantor, all such proxies, powers of attorney and other instruments as such
Grantor may reasonably request for the purpose of enabling such Grantor to
exercise the voting and other consensual rights and powers it is entitled to
exercise pursuant to subparagraph (i) above.

 

(iii)          Each Grantor shall be entitled to
receive and retain any and all dividends, interest, principal and other
distributions paid on or distributed in respect of the Pledged Securities to
the extent and only to the extent that such dividends, interest, principal and
other distributions are permitted by, and otherwise paid or distributed in
accordance with, the terms and conditions of the Credit Agreement, the other
Loan Documents and applicable laws, provided that any noncash dividends,
interest, principal or other distributions that would constitute Pledged Stock
or Pledged Debt Securities, whether resulting from a subdivision, combination
or reclassification of the outstanding Equity Interests of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any part
thereof, or in redemption thereof, or as a result of any merger, consolidation,
acquisition or other exchange of assets to which such issuer may be a party or
otherwise, shall be and become part of the Pledged Collateral, and, if received
by any Grantor, shall not be commingled by such Grantor with any of its other
funds or property but shall be held separate and apart therefrom, shall be held
in trust for the benefit of the Collateral Agent and the other Secured Parties
and shall be forthwith delivered to the

 

11

 

Collateral
Agent in the same form as so received (with any necessary endorsement as
described in Section 3.03(c) or otherwise).

 

(b)           Upon the occurrence and during the continuation
of an Event of Default, after the Collateral Agent shall have notified the
Grantors of the suspension of their rights under paragraph (a)(iii) of
this Section 3.06, all rights of any Grantor to dividends, interest,
principal or other distributions that such Grantor is authorized to receive
pursuant to paragraph (a)(iii) of this Section 3.06 shall cease, and
all such rights shall thereupon become vested in the Collateral Agent, which
shall have the sole and exclusive right and authority to receive and retain
such dividends, interest, principal or other distributions. All dividends,
interest, principal or other distributions received by any Grantor contrary to
the provisions of this Section 3.06 shall be held in trust for the benefit
of the Collateral Agent and the other Secured Parties, shall be segregated from
other property or funds of such Grantor and shall be forthwith delivered to the
Collateral Agent upon demand in the same form as so received (with any
necessary endorsement). Any and all money and other property paid over to or
received by the Collateral Agent pursuant to the provisions of this paragraph (b) shall
be retained by the Collateral Agent in an account to be established by the
Collateral Agent upon receipt of such money or other property and shall be
applied in accordance with the provisions of Section 5.02. After all
Events of Default have been cured or waived and the Borrower has delivered to
the Collateral Agent a certificate to that effect, the Collateral Agent shall
promptly repay to each Grantor (without interest) all dividends, interest,
principal or other distributions that such Grantor would otherwise be permitted
to retain pursuant to the terms of paragraph (a)(iii) of this Section 3.06
and that remain in such account.

 

(c)           Upon the occurrence and during the
continuation of an Event of Default, after the Collateral Agent shall have
notified the Grantors of the suspension of their rights under paragraph (a)(i) of
this Section 3.06, all rights of any Grantor to exercise the voting and
other consensual rights and powers it is entitled to exercise pursuant to
paragraph (a)(i) of this Section 3.06, and the obligations of the
Collateral Agent under paragraph (a)(ii) of this Section 3.06, shall
cease, and all such rights shall thereupon become vested in the Collateral
Agent, which shall have the sole and exclusive right and authority to exercise
such voting and other consensual rights and powers, provided that,
unless otherwise directed by the Required Lenders, the Collateral Agent shall
have the right from time to time following and during the continuation of an
Event of Default to permit the Grantors to exercise such rights. After all
Events of Default have been cured or waived, the Grantors shall have the right
to exercise the voting and consensual rights and powers that they would
otherwise be entitled to exercise pursuant to the terms of paragraph (a)(i) above.

 

(d)           Any notice given by the Collateral
Agent to the Grantors suspending their rights under paragraph (a) of this Section 3.06
(i) may be given by telephone if promptly confirmed in writing, (ii) may
be given to one or more of the Grantors at the same or different times and (iii) may
suspend the rights of the Grantors under paragraph (a)(i) or paragraph (a)(iii) of
this Section 3.06 in part without suspending all such rights (as specified
by the Collateral Agent in its sole and absolute discretion) and without
waiving or otherwise affecting the Collateral Agent’s rights to give additional
notices from time to time suspending other rights so long as an Event of
Default has occurred and is continuing.

 

12

 

ARTICLE
IV

 

Security
Interests in Personal Property

 

Section 4.01.          Security
Interest.  (a) As security for
the payment or performance, as applicable, in full of the Obligations, each
Grantor hereby grants to the Collateral Agent, its successors and assigns, for
the ratable benefit of the Secured Parties, a security interest (the “Security
Interest”) in all right, title or interest in or to any and all of the
following assets and properties now owned or at any time hereafter acquired by
such Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest (collectively, the “Article 9 Collateral”):

 

(i)            all Accounts;

 

(ii)           all Chattel Paper;

 

(iii)          all cash and Deposit Accounts;

 

(iv)          all Documents;

 

(v)           all Equipment;

 

(vi)          all General Intangibles;

 

(vii)         all Instruments;

 

(viii)        all Intellectual
Property;

 

(ix)          all Inventory;

 

(x)           all Investment
Property;

 

(xi)          all
Letter-of-credit rights;

 

(xii)         the commercial
tort claims specified on Schedule IV;

 

(xiii)        all books and
records pertaining to the Article 9 Collateral;

 

(xiv)        all Goods and other
property not otherwise described above; and

 

(xv)         to the extent not otherwise included,
all Proceeds and products of any and all of the foregoing and all collateral
security, supporting obligations and guarantees given by any Person with
respect to any of the foregoing.

 

Notwithstanding
the foregoing, the Article 9 Collateral shall not include (i) any
Equipment that is subject to a purchase money lien or capital lease permitted
under the Credit Agreement to the extent the documents relating to such
purchase money lien or capital lease would not permit such Equipment to be
subject to the Security Interests created hereby, (ii) any general
intangibles or other rights arising under any joint venture agreements to the
extent that customary provisions in

 

13

 

such
agreements governing or entered into by such joint ventures (other than with
respect to any general intangibles or other rights held by a Grantor in any
Permitted Joint Venture Loan Party) would not permit such general intangibles
or other rights to be subject to the Security Interests created hereby; provided,
however, each Grantor shall (unless in the reasonable judgment of its board of
directors such actions will be detrimental to the conduct of its business) use
its commercially reasonable efforts to obtain all consents, approvals,
modifications or amendments required to effect the grant of security interest
pursuant to the terms hereof in such Grantor’s right, title and interest in
such joint ventures and (iii) any lease, license or other contract if the
grant of a security interest therein in the manner contemplated by this
Security Agreement, under the terms thereof or under applicable law, is
prohibited or would give any other party thereto (other than a Grantor) the
right to terminate such lease, license or other contract (the foregoing being
collectively referred to as “Excluded Property”); provided that
the exclusions in clauses (ii) and (iii) shall only apply to the
extent that any such prohibition or termination right would not be rendered ineffective
pursuant to the New York UCC or any other applicable law and provided
further, that if and when any property shall cease to be Excluded Property,
such property shall be deemed at all times from and after the date hereof to
constitute Article 9 Collateral.

 

(b)           Each Grantor hereby irrevocably
authorizes the Collateral Agent at any time and from time to time to file in
any relevant jurisdiction any initial financing statements (including fixture
filings) with respect to the Article 9 Collateral or any part thereof and
amendments thereto that (i) indicate the Collateral as “all assets” of
such Grantor or such other description as the Collateral Agent may determine
and (ii) contain the information required by Article 9 of the Uniform
Commercial Code of each applicable jurisdiction for the filing of any financing
statement or amendment, including (A) whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor and (B) in the case of a financing statement
filed as a fixture filing or covering Article 9 Collateral constituting
minerals or the like to be extracted or timber to be cut, a sufficient
description of the real property to which such Article 9 Collateral
relates. Each Grantor agrees to provide such information to the Collateral
Agent promptly upon request.

 

Each
Grantor also ratifies its authorization for the Collateral Agent to file in any
relevant jurisdiction any initial financing statements (including fixture
filings, as applicable) or other appropriate filings, recordings or
registrations or amendments thereto if filed prior to the date hereof.

 

The
Collateral Agent is further authorized to file with the United States Patent
and Trademark Office or United States Copyright Office (or any successor office
or any similar office in any other country) such documents as may be necessary
or advisable for the purpose of perfecting, confirming, continuing, enforcing
or protecting the Security Interest granted by each Grantor, without the
signature of any Grantor, and naming any Grantor or the Grantors as debtors and
the Collateral Agent as secured party.

 

(c)           The Security Interest is granted as
security only and shall not subject the Collateral Agent or any other Secured
Party to, or in any way alter or modify, any obligation or liability of any
Grantor with respect to or arising out of the Article 9 Collateral.

 

14

 

Section 4.02.          Representations
and Warranties. The Grantors jointly and severally represent and warrant to
the Collateral Agent and the other Secured Parties that:

 

(a)           Each
Grantor has good and valid rights in and title to the Article 9 Collateral
and has full power and authority to grant to the Collateral Agent, for the ratable
benefit of the Secured Parties, the Security Interest in such Article 9
Collateral pursuant hereto and to execute, deliver and perform its obligations
in accordance with the terms in this Agreement, without the consent or approval
of any other Person other than any consent or approval that has been obtained.

 

(b)           The Perfection Certificate has been
duly prepared, completed and executed and the information set forth therein,
including the exact legal name of each Grantor, is correct and complete in all material
respects as of the Effective Date. The Uniform Commercial Code financing
statements (including fixture filings, as applicable) or other appropriate
filings, recordings or registrations prepared by the Collateral Agent based
upon the information provided to the Collateral Agent in the Perfection
Certificate for filing in each governmental, municipal or other office
specified in Schedule 2 to the Perfection Certificate (or specified by notice
from the Borrower to the Collateral Agent after the Effective Date in the case
of filings, recordings or registrations required by Section 5.03(a), 5.03(b) or
5.12 of the Credit Agreement), are all the filings, recordings and
registrations (other than filings required to be made in the United States
Patent and Trademark Office and the United States Copyright Office in order to
perfect the Security Interest in Article 9 Collateral consisting of United
States Patents, United States registered Trademarks (and Trademarks for which
United States registration applications are pending) and United States
registered Copyrights) that are necessary to publish notice of and protect the
validity of and to establish a legal, valid and perfected security interest in
favor of the Collateral Agent, for the ratable benefit of the Secured Parties,
in respect of all Article 9 Collateral in which the Security Interest may
be perfected by filing, recording or registration in the United States (or any
political subdivision thereof) and its territories and possessions, and no
further or subsequent filing, refiling, recording, rerecording, registration or
reregistration is necessary in any such jurisdiction, except as provided under
applicable law with respect to the filing of continuation statements. Each
Grantor represents and warrants that a fully executed agreement in the form
hereof and containing a description of all Article 9 Collateral consisting
of Intellectual Property with respect to United States Patents and United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
have been delivered to the Collateral Agent for recording by the United States
Patent and Trademark Office and the United States Copyright Office pursuant to
35 U.S.C. § 261, 15 U.S.C. § 1060 or 17 U.SC. § 205 and the regulations
thereunder, as applicable, and otherwise as may be required pursuant to the
laws of any other necessary jurisdiction, to protect the validity of and to
establish a legal, valid and perfected security interest in favor of the
Collateral Agent, for the ratable benefit of the Secured Parties, in respect of
all Article 9 Collateral consisting of United States Patents, United
States registered Trademarks (and Trademarks for which United States
registration applications are pending) and United States registered Copyrights
in which a security interest may be perfected by filing, recording or
registration in the United States (or any political subdivision thereof) and
its territories and possessions, and no further or subsequent filing, refiling,
recording, rerecording, registration or reregistration is necessary (other than
such actions as are necessary to perfect the Security Interest with respect to
any Article 9 Collateral consisting of United States Patents, United
States

 

15

 

registered Trademarks (and
Trademarks for which United States registration applications are pending) and
United States registered Copyrights acquired or developed after the date
hereof).

 

(c)           The
Security Interest constitutes (i) a legal and valid security interest in
all the Article 9 Collateral securing the payment and performance of the
Obligations, (ii) subject to the filings described in Section 4.02(b),
a perfected security interest in all Article 9 Collateral in which a
security interest may be perfected by filing, recording or registering a
financing statement or analogous document in the United States (or any
political subdivision thereof) and its territories and possessions pursuant to
the Uniform Commercial Code or other applicable law in such jurisdictions and (iii) a
security interest that shall be perfected in all Article 9 Collateral in
which a security interest may be perfected upon the receipt and recording of
this Agreement with the United States Patent and Trademark Office and the
United States Copyright Office, as applicable, within the three-month period
(commencing as of the date hereof) pursuant to 35 U.S.C. § 261 or 15 U.S.C. §
1060 or the one-month period (commencing as of the date hereof) pursuant to 17
U.S.C. § 205 and otherwise as may be required pursuant to the laws of any other
necessary jurisdiction. The Security Interest is and shall be prior to any
other Lien on any of the Article 9 Collateral, other than Permitted
Encumbrances and Liens that are permitted by the Credit Agreement and that have
priority as a matter of applicable law.

 

(d)           The Article 9
Collateral is owned by the Grantors free and clear of any Lien, except for
Liens permitted under Section 6.02 of the Credit Agreement. None of the
Grantors has filed or consented to the filing of (i) any financing
statement or analogous document under the Uniform Commercial Code or any other
applicable laws covering any Article 9 Collateral, (ii) any
assignment in which any Grantor assigns any Collateral or any security
agreement or similar instrument covering any Article 9 Collateral with the
United States Patent and Trademark Office or the United States Copyright Office
or (iii) any assignment in which any Grantor assigns any Article 9
Collateral or any security agreement or similar instrument covering any Article 9
Collateral with any foreign governmental, municipal or other office, which
financing statement or analogous document, assignment, security agreement or similar
instrument is still in effect, except, in each case, for Liens permitted under Section 6.02
of the Credit Agreement.

 

Section 4.03.          Covenants.  (a) Each Grantor agrees promptly (but in
no case more than 90 days) to notify the Collateral Agent in writing of any
change (i) in its corporate name, (ii) in the location of its chief
executive office or its principal place of business, (iii) in its identity
or type of organization or corporate structure, (iv) in its Federal
Taxpayer Identification Number or organizational identification number and (v) in
its jurisdiction of organization. Each Grantor agrees to promptly provide the
Collateral Agent with certified organizational documents reflecting any of the
changes described in the first sentence of this Section 4.03(a). Each
Grantor agrees not to effect or permit any change referred to in the second
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral
Agent to continue at all times following such change to have a valid, legal and
perfected first priority security interest (subject to Liens permitted under Section 6.02
of the Credit Agreement) in the Article 9 Collateral. Each Grantor agrees
promptly to notify the Collateral Agent if any portion of the Article 9
Collateral material to a Grantor’s business owned or held by such Grantor is
damaged or destroyed.

 

16

 

(b)           Each Grantor agrees to maintain, at
its own cost and expense, such complete and accurate records with respect to
the Article 9 Collateral owned by it as is consistent with its current
practices and in accordance with such standard practices used in industries
that are the same as or similar to those in which such Grantor is engaged, but
in any event to include complete accounting records indicating all payments and
proceeds received with respect to any part of the Article 9 Collateral,
and, at such time or times as the Collateral Agent may reasonably request,
promptly to prepare and deliver to the Collateral Agent a duly certified
schedule or schedules in form and detail reasonably satisfactory to the
Collateral Agent showing the identity, amount and location of any and all Article 9
Collateral.

 

(c)           Each year, at the time of delivery of
annual financial statements with respect to the preceding fiscal year pursuant
to Section 5.01(a) of the Credit Agreement, the Borrower shall
deliver to the Collateral Agent a certificate executed by a Financial Officer
of the Borrower setting forth the information required pursuant to the
Perfection Certificate or confirming that there has been no material change in
such information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this Section 4.03(c). Each certificate delivered pursuant to this Section 4.03(c) shall
identify in the format of Schedule III all Intellectual Property of any Grantor
in existence on the date thereof and not then listed on such Schedules or
previously so identified to the Collateral Agent.

 

(d)           Each Grantor shall, at its own
expense, take any and all actions necessary to defend title to the Article 9
Collateral (other than Article 9 Collateral that is deemed by the board of
directors of such Grantor to be immaterial to the conduct of its business)
against all Persons and to defend the Security Interest of the Collateral Agent
in the Article 9 Collateral and the priority thereof against any Lien not
expressly permitted pursuant to Section 6.02 of the Credit Agreement.
Nothing in this Agreement shall prevent any Grantor from discontinuing the
operation or maintenance of any of its assets or properties if such
discontinuance is (x) in the judgment of its board of directors, desirable
in the conduct of its business and (y) permitted by the Credit Agreement.

 

(e)           Each Grantor agrees, at its own
expense, to execute, acknowledge, deliver and cause to be duly filed all such
further instruments and documents and take all such actions as the Collateral
Agent may from time to time reasonably request to better assure, preserve,
protect and perfect the Security Interest and the rights and remedies created
hereby, including the payment of any fees and taxes required in connection with
the execution and delivery of this Agreement, the granting of the Security
Interest and the filing of any financing statements (including fixture filings)
or other documents (including execution of agreements in the form of Exhibits
IV, V and VI and filing such agreements with the United States Patent and
Trademark Office or United States Copyright Office, as applicable) in
connection herewith or therewith. If any amount payable to any Grantor under or
in connection with any of the Article 9 Collateral shall be or become
evidenced by any promissory note or other instrument in excess of $500,000,
such note or instrument shall be immediately pledged and delivered to the
Collateral Agent, duly endorsed in a manner satisfactory to the Collateral
Agent.

 

(f)            The Collateral Agent and such
Persons as the Collateral Agent may reasonably designate shall have the right,
at the Grantors’ own cost and expense, to inspect the

 

17

 

Article 9 Collateral,
all records related thereto (and to make extracts and copies from such records)
and the premises upon which any of the Article 9 Collateral is located, to
discuss the Grantors’ affairs with the officers of the Grantors and their
independent accountants and to verify under reasonable procedures, in
accordance with Section 5.09 of the Credit Agreement, the validity,
amount, quality, quantity, value, condition and status of, or any other matter
relating to, the Article 9 Collateral, including, (upon the occurrence and
during the continuation of a Default or with the consent of the applicable
Grantor (not to be unreasonably withheld)) in the case of Accounts or other Article 9
Collateral in the possession of any third person, by contacting Account Debtors
or the third person possessing such Article 9 Collateral for the purpose
of making such a verification. Subject to Section 9.12 of the Credit
Agreement, the Collateral Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.

 

(g)           At its option, the Collateral Agent
may discharge past due Taxes, assessments, charges, fees or Liens at any time
levied or placed on the Article 9 Collateral and not permitted pursuant to
Section 6.02 of the Credit Agreement, and may pay for the maintenance and
preservation of the Article 9 Collateral to the extent any Grantor fails
to do so as required by the Credit Agreement or this Agreement, and each
Grantor jointly and severally agrees to reimburse the Collateral Agent on demand
for any payment made or any expense incurred by the Collateral Agent pursuant
to the foregoing authorization, provided that nothing in this paragraph
shall be interpreted as excusing any Grantor from the performance of, or
imposing any obligation on the Collateral Agent or any Secured Party to cure or
perform, any covenants or other promises of any Grantor with respect to Taxes,
assessments, charges, fees, Liens and maintenance as set forth in this
Agreement or in the other Loan Documents.

 

(h)           If at any time any Grantor shall take
a security interest in any property of an Account Debtor or any other Person
with a value in excess of $500,000 to secure payment and performance of an
Account, such Grantor shall promptly assign such security interest to the
Collateral Agent. Such assignment need not be filed of public record unless
necessary to continue the perfected status of the security interest against
creditors of and transferees from the Account Debtor or other Person granting
the security interest.

 

(i)            Each Grantor shall remain liable to
observe and perform all the conditions and material obligations to be observed
and performed by it under each contract, agreement or instrument relating to
the Article 9 Collateral, all in accordance with the terms and conditions
thereof, and each Grantor jointly and severally agrees to indemnify and hold
harmless the Collateral Agent and the other Secured Parties from and against
any and all liability for such performance.

 

(j)            None of the Grantors shall make or
permit to be made an assignment, pledge or hypothecation of the Article 9
Collateral or shall grant any other Lien in respect of the Article 9
Collateral, except as permitted by the Credit Agreement. Subject to the
immediately following sentence, none of the Grantors shall make or permit to be
made any transfer of the Article 9 Collateral and each Grantor shall
remain at all times in possession of the Article 9 Collateral owned by it,
except as permitted by Sections 6.02 and 6.05 of the Credit Agreement. Without
limiting the generality of the foregoing, each Grantor agrees that it shall not
permit any Inventory to be in the possession or control of any warehouseman,
agent, bailee, or processor at

 

18

 

any time unless (x) the
aggregate fair value of the Inventory in the possession of or subject to the
control of such Person is less than $500,000 or (y) such Person shall have
been notified of the Security Interest and shall have acknowledged in writing,
in form and substance reasonably satisfactory to the Collateral Agent, that
such warehouseman, agent, bailee or processor holds the Inventory for the
benefit of the Collateral Agent subject to the Security Interest and shall act
upon the instructions of the Collateral Agent without further consent from the
Grantor, and that such warehouseman, agent, bailee or processor further agrees
to waive and release any Lien held by it with respect to such Inventory,
whether arising by operation of law or otherwise.

 

(k)           None of the Grantors will, without
the Collateral Agent’s prior written consent, grant any extension of the time
of payment of any Accounts included in the Article 9 Collateral,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof or allow
any credit or discount whatsoever thereon, other than compromises,
compoundings, settlements and collections made in the ordinary course of
business or in accordance with the reasonable business judgment of such
Grantor.

 

(l)            The Grantors, at their own expense,
shall maintain or cause to be maintained insurance covering physical loss or
damage to the Inventory and Equipment in accordance with the requirements set
forth in Section 5.07 of the Credit Agreement. Each Grantor irrevocably
makes, constitutes and appoints the Collateral Agent (and all officers,
employees or agents designated by the Collateral Agent) as such Grantor’s true
and lawful agent (and attorney-in-fact) for the purpose, upon the occurrence
and during the continuation of an Event of Default, of making, settling and
adjusting claims in respect of Article 9 Collateral under policies of
insurance, endorsing the name of such Grantor on any check, draft, instrument
or other item of payment for the proceeds of such policies of insurance and for
making all determinations and decisions with respect thereto. In the event that
any Grantor at any time or times shall fail to obtain or maintain any of the
policies of insurance required under the Credit Agreement or to pay any premium
in whole or part relating thereto, the Collateral Agent may, without waiving or
releasing any obligation or liability of the Grantors hereunder or any Event of
Default, in its sole reasonable discretion, obtain and maintain such policies
of insurance and pay such premium and take any other actions with respect
thereto as the Collateral Agent deems advisable. All sums disbursed by the
Collateral Agent in connection with this paragraph, including reasonable attorneys’
fees, court costs, out-of-pocket expenses and other charges relating thereto,
shall be payable, upon demand, by the Grantors to the Collateral Agent and
shall be additional Obligations secured hereby.

 

(m)          Each Grantor shall maintain, in form
and manner reasonably satisfactory to the Collateral Agent, records of its
Chattel Paper and its books, records and documents evidencing or pertaining
thereto.

 

Section 4.04.          Other
Actions.  In order to insure the
attachment, perfection and priority of, and the ability of the Collateral Agent
to enforce, the Security Interest, each Grantor agrees, in each case at such
Grantor’s own expense, to take the following actions with respect to the
following Article 9 Collateral:

 

19

 

(a)           Instruments and
Tangible Chattel Paper. Each Grantor represents and warrants that each
Instrument and each item of Tangible Chattel Paper with a value in excess of
$500,000 in existence on the date hereof has been properly endorsed, assigned
and delivered to the Collateral Agent, accompanied by instruments of transfer
or assignment duly executed in blank. If any Grantor shall at any time hold or
acquire any Instruments or Chattel Paper with a value in excess of $500,000
individually or $1,000,000 in the aggregate, such Grantor shall forthwith
endorse, assign and deliver the same to the Collateral Agent, accompanied by
such undated instruments of transfer or assignment duly executed in blank as
the Collateral Agent may from time to time reasonably request.

 

(b)           Electronic Chattel Paper and
Transferable Records. If any Grantor at any time holds or acquires an
interest in any electronic chattel paper or any “transferable record,” as that
term is defined in Section 201 of the Federal Electronic Signatures in
Global and National Commerce Act, or in Section 16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction,. such
Grantor shall promptly notify the Collateral Agent thereof and, at the request
of the Collateral Agent, shall take such action as the Collateral Agent may
reasonably request to vest in the Collateral Agent control under New York UCC Section 9-105
of such electronic chattel paper or control under Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act or, as
applicable, Section 16 of the Uniform Electronic Transactions Act, as in
effect in such jurisdiction, of such transferable record. The Collateral Agent
agrees with such Grantor that the Collateral Agent will arrange, pursuant to
procedures reasonably satisfactory to the Collateral Agent and so long as such
procedures will not result in the Collateral Agent’s loss of control, for the
Grantor to make alterations to the electronic chattel paper or transferable
record permitted under UCC Section 9-105 or, as applicable, Section 201
of the Federal Electronic Signatures in Global and National Commerce Act or Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Grantor
with respect to such electronic chattel paper or transferable record.

 

(c)           Letter-of-Credit Rights. If
any Grantor is at any time a beneficiary under a letter of credit now or
hereafter issued in favor of such Grantor in an amount in excess of $500,000,
such Grantor shall promptly notify the Collateral Agent thereof and, at the
request and option of the Collateral Agent, such Grantor shall, pursuant to an
agreement in form and substance reasonably satisfactory to the Collateral
Agent, either (i) arrange for the issuer and any confirmer of such letter
of credit to consent to an assignment to the Collateral Agent of the proceeds
of any drawing under such letter of credit or(ii) arrange for the
Collateral Agent to become the transferee beneficiary of such letter of credit,
with the Collateral Agent agreeing, in each case, that the proceeds of any
drawing under such letter of credit are to be paid to the applicable Grantor
unless an Event of Default has occurred or is continuing.

 

(d)           Commercial Tort Claims. If any
Grantor shall at any time hold or acquire a commercial tort claim in an amount
reasonably estimated to exceed $500,000, the Grantor shall promptly notify the
Collateral Agent thereof in a writing signed by such

 

20

 

Grantor
including a summary description of such claim and grant to the Collateral
Agent, for the ratable benefit of the Secured Parties, in such writing a
security interest therein and in the proceeds thereof, all upon the terms of
this Agreement, with such writing to be in form and substance reasonably
satisfactory to the Collateral Agent.

 

Section 4.05.          Covenants
Regarding Patent, Trademark and Copyright Collateral.

 

(a)           Each Grantor agrees (i) that it
will not do any act or omit to do any act (and will exercise commercially
reasonable efforts to prevent its licensees from doing any act or omitting to
do any act) whereby any Patent that is material to the conduct of such Grantor’s
business would become in validated, forfeited, abandoned or dedicated to the
public and (ii) that it shall continue to mark any products covered by a
Patent with the relevant patent number as necessary and sufficient in its
reasonable judgment to establish and preserve its material rights under
applicable patent laws.

 

(b)           Each Grantor (either itself or
through its licensees or its sublicensees) will, for each Trademark material to
the conduct of such Grantor’s business, (i) maintain such Trademark in
full force free from any claim of abandonment or invalidity for non-use, (ii) use
commercially reasonable efforts to maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with
notice of Federal or foreign registration (or, if such Trademark is
unregistered, display such Trademark with notice as required for unregistered
Trademarks) to the extent necessary and sufficient to establish and preserve
its maximum rights under applicable law and (iv) not knowingly use or
knowingly permit the use of such Trademark or any Trademark License in any
violation of any third party rights.

 

(c)           Each Grantor (either itself or
through its licensees or sublicensees) will, for each work covered by a
Copyright material to the conduct of such Grantor’s business, continue to
publish, reproduce, display, adopt and distribute the work with appropriate
copyright notice as necessary and sufficient in its reasonable judgment to
establish and preserve its material rights under applicable copyright laws.

 

(d)           Each Grantor shall notify the
Collateral Agent promptly if it knows that any Patent, Trademark or Copyright
material to the conduct of its business could reasonably be expected to become
abandoned, lost or dedicated to the public, or of any materially adverse
determination or development (including the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, United States Copyright Office or any court or similar office
of any country) regarding such Grantor’s ownership of any Patent, Trademark or
Copyright, its right to register the same, or its right to keep and maintain
the same.

 

(e)           In no event shall any Grantor, either
itself or through any agent, employee, licensee or designee, file an
application with respect to any Patent, Trademark or Copyright with the United
States Patent and Trademark Office, United States Copyright Office or any
office or agency in any political subdivision of the United States or in any
other country or any political subdivision thereof, unless it promptly informs
the Collateral Agent and, upon request of the Collateral Agent, executes and
delivers any and all agreements, instruments, documents and papers as the
Collateral Agent may reasonably request to evidence the Collateral Agent’s

 

21

 

security interest in such
Patent, Trademark or Copyright, and each Grantor hereby appoints the Collateral
Agent as its attorney-in-fact to execute and file such writings as are
reasonably necessary for the foregoing purposes, all acts of such attorney
being hereby ratified and confirmed; such power, being coupled with an
interest, is irrevocable.

 

(f)            Each Grantor will take all
reasonably necessary steps that are consistent with the practice in any
proceeding before the United States Patent and Trademark Office, United States
Copyright Office or any office or agency in any political subdivision of the
United States or in any other country or any political subdivision thereof, to
maintain and pursue each registration or application that is material to the
conduct of such Grantor’s business relating to the Patents, Trademarks and/or
Copyrights (and to obtain the relevant grant or registration) and to maintain
each issued Patent and each registration of the Trademarks and Copyrights that is
material to the conduct of any Grantor’s business, including timely filings of
applications for renewal, affidavits of use, affidavits of incontestability and
payment of maintenance fees, and, if consistent with good business judgment, to
initiate opposition, interference and cancellation proceedings against third
parties.

 

(g)           In the event that any Grantor knows
that any Article 9 Collateral consisting of a Patent, Trademark or
Copyright material to the conduct of any Grantor’s business has been or is about
to be infringed, misappropriated or diluted by a third party, such Grantor
promptly shall notify the Collateral Agent and shall, if consistent with good
business judgment, promptly sue for infringement, misappropriation or dilution
and to recover any and all damages for such infringement, misappropriation or
dilution (and take any actions required by applicable law prior to instituting
such suit), and take such other actions as are appropriate under the
circumstances to protect such Article 9 Collateral. Nothing in this
Agreement shall prevent any Grantor from discontinuing the use or maintenance
of any Article 9 Collateral consisting of a Patent, Trademark or
Copyright, or require any Grantor to pursue any claim of infringement,
misappropriation or dilution, if (x) such Grantor so determines in its
good business judgment and (y) it is not prohibited by the Credit
Agreement.

 

(h)           Upon and during the continuation of
an Event of Default, each Grantor shall, at the request of the Collateral
Agent, use its commercially reasonable efforts to obtain all requisite consents
or approvals by the licensor of each material Copyright License, Patent License
or Trademark License to effect the assignment of all such Grantor’s right,
title and interest thereunder to the Collateral Agent or its designee.

 

22

 

Section 4.06.          Cash
Management System, Securities Accounts and Commodity Accounts.

 

(a)           Deposit Accounts. As of the
date hereof each Grantor has neither opened nor maintains any Deposit Accounts
other than the accounts listed on Schedule V and (ii) each of the Deposit
Accounts that is designated on such Schedule V as a controlled account is, or
will be on or prior to the date set forth on Schedule 5.14 to the Credit Agreement,
subject to the terms of a Deposit Account Control Agreement. No Grantor shall
hereafter establish and maintain any Deposit Account unless (1) the
applicable Grantor shall have given the Collateral Agent 30 days’ prior written
notice of its intention to establish such new Deposit Account with a Bank, (2) such
Bank shall be reasonably acceptable to the Collateral Agent and (3) such
Bank and such Grantor shall have duly executed and delivered to the Collateral
Agent a Deposit Account Control Agreement with respect to such Deposit Account.
The Collateral Agent agrees with each Grantor that the Collateral Agent shall
not give any instructions directing the disposition of funds from time to time
credited to any Deposit Account or withhold any withdrawal rights from such
Grantor with respect to funds from time to time credited to any Deposit Account
except upon the occurrence and during the continuation of an Event of Default.
No Grantor shall grant Control of any Deposit Account to any person other than
the Collateral Agent.

 

(b)           Securities Accounts and Commodity
Accounts. As of the date hereof each Grantor has no Securities Accounts or
Commodity Accounts other than those listed in Schedule V and the
Collateral Agent has a perfected first priority security interest in such
Securities Accounts and Commodity Accounts by Control. No Grantor shall
hereafter establish and maintain any Securities Account or Commodity Account
with any Securities Intermediary or Commodity Intermediary unless(1) the
applicable Grantor shall have given the Collateral Agent 30 days’ prior written
notice of its intention to establish such new Securities Account or Commodity
Account with such Securities Intermediary or Commodity Intermediary, (2) such
Securities Intermediary or Commodity Intermediary shall be reasonably
acceptable to the Collateral Agent and (3) such Securities Intermediary or
Commodity Intermediary, as the case may be, and such Grantor shall have duly
executed and delivered a Control Agreement with respect to such Securities Account
or Commodity Account, as the case may be. Each Grantor shall accept any cash
and Investment Property in trust for the benefit of the Collateral Agent and
within one (1) Business Day of actual receipt thereof, deposit any and all
cash and Investment Property (other than any Investment Property pledged
pursuant to Section 3.02 received by it into a Deposit Account or
Securities Account subject to Collateral Agent’s Control. The Collateral Agent
agrees with each Grantor that the Collateral Agent shall not give any
Entitlement Orders or instructions or directions to any issuer of
uncertificated securities, Securities Intermediary or Commodity Intermediary,
and shall not withhold its consent to the exercise of any withdrawal or dealing
rights by such Grantor, unless an Event of Default has occurred and is
continuing or, after giving effect to any such investment and withdrawal
rights, would occur. No Grantor shall grant control over any Investment
Property to any person other than the Collateral Agent.

 

(c)           The provisions of this Section 4.06
shall not apply to (x) any Excluded Accounts or (y) any other Deposit
Accounts, Securities Accounts or Commodities Accounts opened or maintained by
the Grantors (such accounts, “Non-Excluded Accounts”) to the extent that the
aggregate average available daily balance over the immediately preceding
12-month

 

23

 

period for all such
Non-Excluded Accounts shall not at any time exceed $1,500,000; provided
that to the extent such balance exceeds $1,500,000, the Grantors agree to
promptly (but in no case longer than the greater of (x) 60 days or (y) such
longer period as agreed to by the Collateral Agent in its reasonable judgment)
grant Control over certain Non-Excluded Accounts not covered by Control
Agreements, as selected by the Grantors, such that immediately after
implementing Control Agreements, such balance as recalculated shall not exceed
$1,500,000. For purposes of this clause (c), “Excluded Accounts” includes (A) the
LC Account or any Deposit Account for which the Collateral Agent is the Bank, (B) any
Securities Account or Commodities Account for which the Collateral Agent is the
Securities Intermediary or the Commodity Intermediary, respectively, (C) any
Deposit Account maintained solely for payroll purposes or holding solely
restricted cash in connection with self-insurance programs, (D) Deposit
Accounts, Securities Accounts and Commodities Accounts that are subject to
Control Agreements and (E) during a six-month period following any
Permitted Acquisition, any Deposit Accounts, Securities Accounts and
Commodities Accounts acquired by a Grantor in connection with such Permitted
Acquisition.

 

ARTICLE
V

 

Remedies

 

Section 5.01.          Remedies
upon Default.  Upon the occurrence and
during the continuation of an Event of Default, each Grantor agrees to deliver
each item of Collateral to the Collateral Agent on demand, and it is agreed
that the Collateral Agent shall have the right to take any of or all the
following actions at the same or different times: (a) with respect to any Article 9
Collateral consisting of Intellectual Property, on demand, to cause the
Security Interest to become an assignment, transfer and conveyance of any of or
all such Article 9 Collateral by the applicable Grantors to the Collateral
Agent, for the ratable benefit of the Secured Parties, or to license or
sublicense, whether general, special or otherwise, and whether on an exclusive
or nonexclusive basis, any such Article 9 Collateral throughout the world
on such terms and conditions and in such manner as the Collateral Agent shall
determine (other than in violation of any then-existing licensing arrangements
to the extent that waivers cannot be obtained), and (b) with or without
legal process and with or without prior notice or demand for performance, to
take possession of the Article 9 Collateral and without liability for
trespass to enter any premises where the Article 9 Collateral may be
located for the purpose of taking possession of or removing the Article 9
Collateral and, generally, to exercise any and all rights afforded to a secured
party under the Uniform Commercial Code or other applicable law. Without
limiting the generality of the foregoing, each Grantor agrees that the
Collateral Agent shall have the right, subject to the mandatory requirements of
applicable law, to sell or otherwise dispose of all or any part of the
Collateral at a public or private sale or at any broker’s board or on any
securities exchange, for cash, upon credit or for future delivery as the
Collateral Agent shall deem appropriate. Each such purchaser at any sale of
Collateral shall hold the property sold absolutely, free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and appraisal that 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.

 

24

 

The
Collateral Agent shall give the applicable Grantors 10 days’ written notice
(which each Grantor agrees is reasonable notice within the meaning of Section 9-611
of the New York UCC or its equivalent in other jurisdictions) of the Collateral
Agent’s intention to make any sale of Collateral. Such notice, in the case of a
public sale, shall state the time and place for such sale and, in the case of a
sale at a broker’s board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Collateral,
or portion thereof, will first be offered for sale at such board or exchange.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix and
state in the notice (if any) of such sale. At any such sale, the Collateral, or
portion thereof, to be sold may be sold in one lot as an entirety or in
separate parcels, as the Collateral Agent may determine in its sole and
absolute discretion. The Collateral Agent shall not be obligated to make any
sale of any Collateral if it shall determine not to do so, regardless of the
fact that notice of sale of such Collateral shall have been given. The
Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case any sale of all or any part of the Collateral is made on
credit or for future delivery, the Collateral so sold may be retained by the
Collateral Agent until the sale price is paid by the purchaser or purchasers
thereof, but the Collateral Agent and the other Secured Parties shall not incur
any liability in case any such purchaser or purchasers shall fail to take up
and pay for the Collateral so sold and, in case of any such failure, such
Collateral may be sold again upon like notice. At any public (or, to the extent
permitted by law, private) sale made pursuant to this Agreement, any Secured
Party may bid for or purchase, free (to the extent permitted by law) from any
right of redemption, stay, valuation or appraisal on the part of any Grantor
(all said rights being also hereby waived and released to the extent permitted
by law), the Collateral or any part thereof offered for sale and may make
payment on account thereof by using any claim then due and payable to such
Secured Party from any Grantor as a credit against the purchase price, and such
Secured Party may, upon compliance with the terms of sale, hold, retain and
dispose of such property without further accountability to any Grantor
therefor. For purposes hereof, a written agreement to purchase the Collateral
or any portion thereof shall be treated as a sale thereof; the Collateral Agent
shall be free to carry out such sale pursuant to such agreement and no Grantor
shall be entitled to the return of the Collateral or any portion thereof
subject thereto, notwithstanding the fact that after the Collateral Agent shall
have entered into such an agreement, all Events of Default shall have been
remedied and the Obligations paid in full. As an alternative to exercising the
power of sale herein conferred upon it, the Collateral Agent may proceed by a
suit or suits at law or in equity to foreclose this Agreement and to sell the
Collateral or any portion thereof pursuant to a judgment or decree of a court
or courts having competent jurisdiction or pursuant to a proceeding by a
court-appointed receiver. Any sale pursuant to the provisions of this Section 5.01
shall be deemed to conform to the commercially reasonable standards as provided
in Section 9-610(b) of the New York UCC or its equivalent in other
jurisdictions.

 

Section 5.02.          Application
of Proceeds.  The Collateral Agent
shall apply the proceeds of any collection or sale of Collateral pursuant to
this Article V, including any Collateral consisting of cash, as follows:

 

25

 

FIRST, to the payment of all costs and expenses incurred by the
Collateral Agent and the Administrative Agent in connection with such
collection or sale or otherwise in connection with this Agreement, any other
Loan Document or any of the Obligations, including all court costs and the fees
and expenses of its agents and legal counsel, the repayment of all advances
made by the Collateral Agent hereunder or under any other Loan Document on
behalf of any Grantor and any other costs or expenses incurred in connection
with the exercise of any right or remedy hereunder or under any other Loan
Document;

 

SECOND, to the payment in full of the Obligations (the amounts so
applied to be distributed among the Secured Parties pro rata in accordance with
the amounts of the Obligations owed to them on the date of any such
distribution); and

 

THIRD, to the Grantors, their successors or assigns, or as a court of
competent jurisdiction may otherwise direct.

 

The
Collateral Agent shall have sole and absolute discretion as to the time of
application of any such proceeds, moneys or balances in accordance with this
Agreement. Upon any sale of Collateral by the Collateral Agent (including
pursuant to a power of sale granted by statute or under a judicial proceeding),
the receipt of the Collateral Agent or of the officer making the sale shall be
a sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Collateral Agent
or such officer or be answerable in any way for the misapplication thereof.

 

Section 5.03.          Grant
of License To Use Intellectual Property. For the purpose of enabling the
Collateral Agent to exercise rights and remedies under this Agreement at such
time as the Collateral Agent shall be lawfully entitled to exercise such rights
and remedies, each Grantor hereby grants to the Collateral Agent an
irrevocable, nonexclusive license (exercisable without payment of royalty or
other compensation to the Grantors) to use, license or sublicense any of the Article 9
Collateral consisting of Intellectual Property now owned or hereafter acquired
by such Grantor, and wherever the same may be located, and including in such
license reasonable access to all media in which any of the licensed items may
be recorded or stored and to all computer software and programs used for the
compilation or printout thereof. The use of such license by the Collateral
Agent shall be exercised, at the option of the Collateral Agent, only upon the
occurrence and during the continuation of an Event of Default, provided
that any license, sublicense or other transaction entered into by the
Collateral Agent in accordance herewith shall be binding upon the Grantors
notwithstanding any subsequent cure of an Event of Default.

 

Section 5.04.          Securities
Act. In view of the position of the Grantors in relation to the Pledged
Collateral, or because of other current or future circumstances, a question may
arise under the Securities Act of 1933, as now or hereafter in effect, or any
similar statute hereafter enacted analogous in purpose or effect (such Act and
any such similar statute as from time to time in effect being called the “Federal
Securities Laws”), with respect to any disposition of the Pledged
Collateral permitted hereunder. Each Grantor understands that compliance with
the Federal Securities Laws might very strictly limit the course of conduct of
the Collateral Agent if

 

26

 

the
Collateral Agent were to attempt to dispose of all or any part of the Pledged
Collateral, and might also limit the extent to which or the manner in which any
subsequent transferee of any Pledged Collateral could dispose of the same. Similarly,
there may be other legal restrictions or limitations affecting the Collateral
Agent in any attempt to dispose of all or part of the Pledged Collateral under
applicable Blue Sky or other state securities laws or similar laws analogous in
purpose or effect. Each Grantor recognizes that in light of such restrictions
and limitations the Collateral Agent may, with respect to any sale of the
Pledged Collateral, limit the purchasers to those who will agree, among other
things, to acquire such Pledged Collateral for their own account, for
investment, and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that in light of such restrictions and
limitations, the Collateral Agent, in its sole and absolute discretion (a) may
proceed to make such a sale whether or not a registration statement for the
purpose of registering such Pledged Collateral or part thereof shall have been
filed under the Federal Securities Laws and (b) may approach and negotiate
with a single potential purchaser to effect such sale. Each Grantor
acknowledges and agrees that any such sale might result in prices and other
terms less favorable to the seller than if such sale were a public sale without
such restrictions. In the event of any such sale, the Collateral Agent shall
incur no responsibility or liability for selling all or any part of the Pledged
Collateral at a price that the Collateral Agent, in its sole and absolute
discretion, may in good faith deem reasonable under the circumstances, notwithstanding
the possibility that a substantially higher price might have been realized if
the sale were deferred until after registration as aforesaid or if more than a
single purchaser were approached. The provisions of this Section 5.04 will
apply notwithstanding the existence of a public or private market upon which
the quotations or sales prices may exceed substantially the price at which the
Collateral Agent sells.

 

Section 5.05.          Communications
with Obligors; Grantors Remain Liable.

 

(a)           The Collateral Agent shall have the
right, at any time after the occurrence and during the continuance of an Event
of Default, to make test verifications of the Receivables in any manner and
through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Collateral Agent may
require in connection with such test verifications. At any time and from time
to time after the occurrence and during the continuance of an Event of Default,
upon the Collateral Agent’s request and at the expense of the relevant Grantor,
such Grantor shall cause independent public accountants or others satisfactory
to the Collateral Agent to furnish to the Collateral Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Receivables.

 

(b)           The Collateral Agent hereby
authorizes each Grantor to collect such Grantor’s Receivables, subject to the
Collateral Agent’s direction and control after the occurrence and during the
continuance of an Event of Default, and the Collateral Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the Collateral Agent at any
time after the occurrence and during the continuance of an Event of Default,
any payments of Receivables, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Deposit Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in Section 5.02,
and (ii) until so turned over, shall be held by such Grantor in trust

 

27

 

for the Collateral Agent and
the Secured Parties, segregated from other funds of such Grantor. Each such
deposit of Proceeds of Receivables shall be accompanied by a report identifying
in reasonable detail the nature and source of the payments included in the
deposit.

 

(c)           At the Collateral Agent’s request at
any time after the occurrence and during the continuance of an Event of
Default, each Grantor shall deliver to the Collateral Agent all original and
other documents evidencing, and relating to, the agreements and transactions
which gave rise to the Receivables, including, without limitation, all original
orders, invoices and shipping receipts.

 

(d)           The Collateral Agent in its own name
or in the name of others may at any time after the occurrence and during the
continuance of an Event of Default communicate with obligors about the
Receivables to verify with them to the Collateral Agent’s satisfaction the
existence, amount and terms of any Receivables.

 

(e)           Upon the request of the Collateral
Agent at any time after the occurrence and during the continuance of an Event
of Default, each Grantor shall notify obligors on the Receivables that the
Receivables have been assigned to the Collateral Agent for the ratable benefit
of the Secured Parties and that payments in respect thereof shall be made
directly to the Collateral Agent.

 

(f)            Anything herein to the contrary
notwithstanding, each Grantor shall remain liable under each of the Receivables
(or any agreement giving rise thereto) to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise thereto. Neither the Collateral
Agent nor any Secured Party shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Collateral Agent or any Secured Party
of any payment relating thereto, nor shall the Collateral Agent or any Secured
Party be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.

 

Section 5.06.          Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Collateral Agent or any Secured Party to collect such
deficiency.

 

ARTICLE
VI

 

Indemnity,
Subrogation and Subordination

 

Section 6.01.          Indemnity
and Subrogation.  In addition to all
such rights of indemnity and subrogation as the Guarantors may have under
applicable law (but subject to Section 6.03), the Borrower agrees that (a) in
the event a payment of any Obligation shall be

 

28

 

made
by any Guarantor under this Agreement, the Borrower shall indemnify such
Guarantor for the full amount of such payment and such Guarantor shall be
subrogated to the rights of the Person to whom such payment shall have been
made to the extent of such payment and (b) in the event any assets of any
Grantor shall be sold pursuant to this Agreement or any other Security Document
to satisfy in whole or in part any Obligation owed to any Secured Party, the
Borrower shall indemnify such Grantor in an amount equal to the fair value of
the assets so sold.

 

Section 6.02.          Contribution
and Subrogation. Each Guarantor and Grantor (a “Contributing Party”)
agrees (subject to Section 6.03) that, in the event a payment shall be
made by any other Guarantor hereunder in respect of any Obligation or assets of
any other Grantor shall be sold pursuant to any Security Document to satisfy
any Obligation owed to any Secured Party and such other Guarantor or Grantor
(the “Claiming Party”) shall not have been fully indemnified by the
Borrower as provided in Section 6.01, the Contributing Party shall
indemnify the Claiming Party in an amount equal to the amount of such payment
or the greater of the book value or the fair value of such assets, as
applicable, in each case multiplied by a fraction of which the numerator shall
be the net worth of the Contributing Party on the date hereof and the
denominator shall be the aggregate net worth of all the Guarantors and Grantors
on the date hereof (or, in the case of any Guarantor or Grantor becoming a
party hereto pursuant to Section 7.15, the date of the supplement hereto
executed and delivered by such Guarantor or Grantor). Any Contributing Party
making any payment to a Claiming Party pursuant to this Section 6.02 shall
be subrogated to the rights of such Claiming Party under Section 6.01 to
the extent of such payment.

 

Section 6.03.          Subrogation. Notwithstanding
any provision in this Agreement to the contrary, no Guarantor or Grantor shall
be entitled to be subrogated to any of the rights of the Collateral Agent or
any Secured Party against the Borrower or any other Guarantor or Grantor or any
collateral security or guarantee or right of offset held by the Collateral
Agent or any Secured Party for the payment of the Loan Document Obligations,
nor shall any Guarantor or Grantor seek or be entitled to seek any contribution
or reimbursement from the Borrower or any other Guarantor in respect of
payments made by the Borrower or such Guarantor or Grantor hereunder, until all
amounts owing to the Collateral Agent and the Secured Parties by the Borrower
on account of the Loan Document Obligations are fully and finally paid in cash,
no Letter of Credit shall be outstanding and the Commitments are terminated. No
failure on the part of the Borrower or any Guarantor or Grantor to make the
payments required by Sections 6.01 and 6.02 (or any other payments required
under applicable law or otherwise) shall in any respect limit the obligations
and liabilities of any Guarantor or Grantor with respect to its Obligations
hereunder, and each Guarantor and Grantor shall remain liable for the full
amount of the Obligations of such Guarantor or Grantor hereunder.

 

ARTICLE
VII

 

Miscellaneous

 

Section 7.01.          Notices. All communications and
notices hereunder shall (except as otherwise expressly permitted in this
Agreement) be in writing and given as provided in Section 9.01 of the
Credit Agreement, provided that any communication or notice hereunder
from the Collateral Agent to any Loan Party upon the occurrence and during the
continuation of

 

29

 

an
Event of Default may be given by telephone if promptly confirmed in writing.
All communications and notices hereunder to any Subsidiary Loan Party shall be
given to it in care of the Borrower as provided in Section 9.01 of the
Credit Agreement.

 

Section 7.02.          Waivers; Amendment.  (a) No failure or delay by any Secured
Party in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Secured Parties hereunder and under the other Loan Documents are cumulative
and are not exclusive of any rights or remedies that they would otherwise have.
No waiver of any provision in this Agreement or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section 7.02, and then such waiver
or consent shall be effective only in the specific instance and for the purpose
for which given. Without limiting the generality of the foregoing, the making
of a Loan or issuance of a Letter of Credit shall not be construed as a waiver
of any Default, regardless of whether any Secured Party may have had notice or
knowledge of such Default at the time. No notice or demand on any Loan Party in
any case shall entitle any Loan Party to any other or further notice or demand
in similar or other circumstances.

 

(b)           Neither this Agreement nor any
provision hereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Collateral Agent and the
Loan Party or Loan Parties with respect to which such waiver, amendment or
modification is to apply, subject to any consent required in accordance with Section 9.02
of the Credit Agreement.

 

Section 7.03.          Collateral Agent’s Fees and
Expenses; Indemnification.  (a) The
parties hereto agree that the Collateral Agent shall be entitled to
reimbursement of its reasonable out-of-pocket expenses incurred hereunder as
provided in Section 9.03 of the Credit Agreement.

 

(b)           Without limitation of its
indemnification obligations under the other Loan Documents, each Grantor and
each Guarantor jointly and severally agrees to indemnify the Collateral Agent
and the other Indemnitees (as defined in Section 9.03 of the Credit
Agreement) against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related out-of-pocket expenses, including the
fees, charges and disbursements of any counsel for any Indemnitee, incurred by
or asserted against any Indemnitee arising out of, in connection with, or as a
result of, the execution, delivery or performance of this Agreement or any
actual or prospective claim, litigation, investigation or proceeding relating
to any of the foregoing agreements or instruments contemplated hereby, or to
the Collateral, whether or not any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related out-of-pocket
expenses are determined by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee or any of
its Related Parties.

 

(c)           Any such amounts payable as provided
hereunder shall be additional Obligations secured hereby and by the other
Security Documents. The provisions of this Section 7.03 shall remain
operative and in full force and effect regardless of the termination of this

 

30

 

Agreement or any other Loan
Document, the consummation of the transactions contemplated hereby, the
repayment of any of the Obligations, the invalidity or unenforceability of any
term or provision of this Agreement or any other Loan Document, or any investigation
made by or on behalf of the Collateral Agent or any other Secured Party. All
amounts due under this Section 7.03 shall be payable on written demand
therefor.

 

Section 7.04.          Duty of Collateral Agent. The
Collateral Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as the Collateral Agent deals with similar property for its own account.
Neither the Collateral Agent, any Secured Party nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Collateral Agent and the Secured Parties hereunder are solely
to protect the Collateral Agent’s and the Secured Parties’ interests in the
Collateral and shall not impose any duty upon the Collateral Agent or any
Secured Party to exercise any such powers. The Collateral Agent and the Secured
Parties shall be accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor
for any act or failure to act hereunder, except for their own bad faith, gross
negligence or willful misconduct.

 

Section 7.05.          Successors and Assigns.
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the permitted successors and assigns of
such party; and all covenants, promises and agreements by or on behalf of any
Guarantor, Grantor or the Collateral Agent that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and assigns
and shall inure to the benefit of the other Secured Parties and their
respective successors and assigns; provided that except as permitted by
the Credit Agreement no Guarantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Collateral Agent.

 

Section 7.06.          Survival of Agreement. All
covenants, agreements, representations and warranties made by the Loan Parties
in the Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the execution and delivery of the Loan Documents and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any Lender or on its behalf and notwithstanding that the Administrative Agent,
the Collateral Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time
any credit is extended under the Credit Agreement, and shall continue in full
force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under any Loan Document is
outstanding and unpaid or any Letter of Credit is outstanding and so long as
the Commitments have not expired or terminated.

 

Section 7.07.          Counterparts; Effectiveness;
Several Agreement. This Agreement may be executed in counterparts, each of
which shall constitute an original but all of which,

 

31

 

when
taken together, shall constitute single contract. Delivery of an executed
signature page to this Agreement by facsimile transmission shall be as
effective as delivery of a manually signed counterpart of this Agreement. This
Agreement shall become effective as to any Loan Party when a counterpart hereof
executed on behalf of such Loan Party shall have been delivered to the Collateral
Agent and a counterpart hereof shall have been executed on behalf of the
Collateral Agent, and thereafter shall be binding upon such Loan Party and the
Collateral Agent and their respective permitted successors and assigns, and
shall inure to the benefit of such Loan Party, the Administrative Agent, the
Collateral Agent and the other Secured Parties and their respective successors
and assigns, except that no Loan Party shall have the right to assign or
transfer its rights or obligations hereunder or any interest in this Agreement
or in the Collateral (and any such assignment or transfer shall be void) except
as contemplated by this Agreement or the Credit Agreement. This Agreement shall
be construed as a separate agreement with respect to each Loan Party and may be
amended, modified, supplemented, waived or released with respect to any Loan
Party without the approval of any other Loan Party and without affecting the
obligations of any other Loan Party hereunder.

 

Section 7.08.          Severability. Any provision in
this Agreement held to be invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; the invalidity
of a particular provision in a particular jurisdiction shall not invalidate
such provision in any other jurisdiction. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

 

Section 7.09.          Right of Set-Off.  If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of any Loan
Party against any of and all the obligations of such Loan Party now or
hereafter existing under this Agreement owed to such Lender, irrespective of
whether or not such Lender shall have made any demand under this Agreement and
although such obligations may be unmatured. The applicable Lender shall notify
the Borrower, the Collateral Agent and the Administrative Agent of such set-off
or application, provided that any failure to give or any delay in giving
such notice shall not affect the validity of any such set-off or application
under this Section 7.09. The rights of each Lender under this Section 7.09
are in addition to other rights and remedies (including other rights of
set-off) which such Lender may have.

 

Section 7.10.          GOVERNING LAW; JURISDICTION;
CONSENT TO SERVICE OF PROCESS.  (a) THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.

 

(b)           Each of the parties hereto hereby
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the Supreme Court of the State of New York sitting
in New York County and of the United States District Court of the Southern
District of New York, and any appellate court from any thereof, in any action
or proceeding

 

32

 

arising out of or relating
to this Agreement or any other Loan Document, 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 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 or any other Loan Document
shall affect any right that the Collateral Agent, the Issuing Bank, any Lender
or any Loan Party may otherwise have to bring any action or proceeding relating
to this Agreement or any other Loan Document in the courts of any jurisdiction.

 

(c)           Each of the Loan Parties hereby
irrevocably and unconditionally waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section 7.10. Each of the parties 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.

 

(d)           Each party to this Agreement
irrevocably consents to service of process in the manner provided for notices
in Section 7.01. Nothing in this Agreement or any other Loan Document will
affect the right of any party to this Agreement to serve process in any other
manner permitted by law.

 

Section 7.11.          WAIVER OF JURY TRIAL. EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY).

 

Section 7.12.          Headings. Article and Section headings
and the Table of Contents used in this Agreement are for convenience of
reference only, are not part of this Agreement and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Agreement.

 

Section 7.13.          Security Interest Absolute. All
rights of the Collateral Agent hereunder, the Security Interest, the grant of a
security interest in the Pledged Collateral and all obligations of each Grantor
and Guarantor hereunder shall be absolute and unconditional irrespective of (a) any
lack of validity or enforceability of the Credit Agreement, any other Loan
Document, any agreement with respect to any of the Obligations or any other
agreement or instrument relating to any of the foregoing, (b) any change
in the time, manner or place of payment of, or in any other term of, all or any
of the Obligations, or any other amendment or waiver of or any consent to any
departure from the Credit Agreement, any other Loan Document or any other
agreement or instrument, (c) any exchange, release or non-perfection of
any Lien on other collateral, or any release or amendment or waiver of or
consent under or departure from any guarantee, securing or guaranteeing all or
any of the Obligations, or (d) any other

 

33

 

circumstance
that might otherwise constitute a defense available to, or a discharge of, any
Grantor or Guarantor in respect of the Obligations or this Agreement.

 

Section 7.14.          Termination or Release.  (a) This Agreement and the Guarantees
made in this Agreement shall terminate and the Security Interest and all other
security interests granted hereby shall be automatically released when all the
Loan Document Obligations have been indefeasibly paid in full and the Lenders
have no further commitment to lend under the Credit Agreement, the LC Exposure
has been reduced to zero and the Issuing Bank has no further obligations to
issue Letters of Credit under the Credit Agreement.

 

(b)           A Person which was a Loan Party
immediately prior to the consummation of any transaction permitted by the
Credit Agreement shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Person shall be
automatically released upon the consummation of any transaction permitted by
the Credit Agreement as a result of which such Person ceases to be a Loan
Party.

 

(c)           Upon any sale or other transfer by
any Grantor of any Collateral that is permitted under the Credit Agreement, or
upon the effectiveness of any written consent to the release of the security
interest granted hereby in any Collateral pursuant to Section 9.02 of the
Credit Agreement, the security interest in such Collateral shall be
automatically released.

 

(d)           In connection with any termination or
release pursuant to paragraph (a), (b) or (c) of this Section 7.14,
the Collateral Agent shall execute and deliver to any Person, at such Person’s
expense, all documents that such Person shall reasonably request to evidence
such termination or release of its obligations or the Security Interests in its
Collateral. Any execution and delivery of documents pursuant to this Section 7.14
shall be without recourse to or warranty by the Collateral Agent.

 

Section 7.15.          Additional Subsidiaries; Holdings.

 

(a)           Pursuant to Section 5.12 of the
Credit Agreement, each Subsidiary of a Loan Party that was not in existence or
not a Subsidiary on the date of the Credit Agreement and is not (x) an
Inactive Subsidiary (other than an Inactive Subsidiary that has satisfied the
Collateral and Guarantee Requirement) or (y) a Permitted Joint Venture
(other than a Permitted Joint Venture Loan Party), is required to enter in this
Agreement as a Subsidiary Loan Party upon becoming such a Subsidiary. Upon
execution and delivery by the Collateral Agent and a Subsidiary of an
instrument in the form of Exhibit I hereto, such Subsidiary shall become a
Subsidiary Loan Party hereunder with the same force and effect as if originally
named as a Subsidiary Loan Party in this Agreement. The execution and delivery
of any such instrument shall not require the consent of any other Loan Party
hereunder. The rights and obligations of each Loan Party hereunder shall remain
in full force and effect notwithstanding the addition of any new Loan Party as
a party to this Agreement.

 

(b)           Upon Holdings becoming a party to the
Credit Agreement, Holdings is required to enter into this Agreement as a Loan
Party. Upon execution and delivery by the Collateral Agent and Holdings of an
instrument in the form of Exhibit I hereto, Holdings shall become a Loan
Party hereunder with the same force and effect as if originally named as a Loan

 

34

 

Party in this Agreement. The
execution and delivery of any such instrument shall not require the consent of
any other Loan Party hereunder. The rights and obligations of each Loan Party
hereunder shall remain in full force and effect notwithstanding the addition of
any new Loan Party as a party to this Agreement.

 

Section 7.16.          Collateral Agent Appointed
Attorney-in-Fact.  (a) Each
Grantor hereby irrevocably appoints the Collateral Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact of such Grantor with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the provisions of this Agreement and
taking any appropriate action and executing any and all documents and instruments
that the Collateral Agent may deem necessary or desirable to accomplish the
purposes hereof. Without limiting the generality of the foregoing, each Grantor
hereby gives the Collateral Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor to do any of the
following:

 

in
the name of such Grantor or in its own name, or otherwise, to take possession
and endorse, assign, collect and/or deliver any and all notes, acceptances,
checks, drafts, money orders or other instruments of payment due under any
Receivable or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Collateral Agent for the purpose of collecting any
and all such moneys due under any Receivable or with respect to any other
Collateral whenever payable;

 

in
the case of Intellectual Property, execute and deliver, and have recorded, any
and all agreements, instruments, documents and papers as the Collateral Agent
may request to evidence the Collateral Agent’s and the Secured Parties’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;

 

pay
or discharge taxes and Liens levied or placed on or threatened against the
Collateral, effect any repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor and the costs
thereof;

 

execute,
in connection with any sale provided for in Section 5.01, any
indorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral;

 

(1) direct
any party liable for any payment under any of the Collateral to make payment of
any and all moneys due or to become due thereunder directly to the Collateral
Agent or as the Collateral Agent shall direct; (2) ask or demand for,
collect, and receive payment of and receipt for, any and all moneys, claims and
other amounts due or to become due at any time in respect of or arising out of
any Collateral; (3) sign and indorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral; (6) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Collateral Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any

 

35

 

such
Copyright, Patent or Trademark pertains), throughout the world for such term or
terms, on such conditions, and in such manner, as the Collateral Agent shall in
its sole discretion determine; and (8) generally, sell, transfer, pledge
and make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Collateral Agent were the
absolute owner thereof for all purposes, and do, at the Collateral Agent’s
option and such Grantor’s expense, at any time, or from time to time, all acts
and things which the Collateral Agent deems necessary to protect, preserve or
realize upon the Collateral and the Collateral Agent’s and the Secured Parties’
security interests therein and to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do; and

 

license
or sublicense whether on an exclusive or non-exclusive basis, any Intellectual
Property for such term and on such conditions and in such manner as the
Collateral Agent shall in its sole judgment determine and, in connection
therewith, such Grantor hereby grants to the Collateral Agent for the benefit
of the Secured Parties a royalty-free, world-wide irrevocable license of its
Intellectual Property.

 

Anything
in this Section 7.16(a) to the contrary notwithstanding, the
Collateral Agent agrees that it will not exercise any rights under the power of
attorney provided for in this Section 716(a) unless an Event of
Default shall have occurred and be continuing.

 

(b)           If any Grantor fails to perform or
comply with any of its agreements contained herein, the Collateral Agent, at
its option, but without any obligation so to do, may perform or comply, or
otherwise cause performance or compliance, with such agreement.

 

(c)           The expenses of the Collateral Agent
incurred in connection with actions undertaken as provided in this Section 7.16,
together with interest thereon at a rate per annum equal to the rate per annum
at which interest would then be payable on past due Revolving Loans that are
ABR Loans under the Credit Agreement, from the date of payment by the
Collateral Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the Collateral Agent on demand.

 

(d)           Each Grantor hereby ratifies all that
said attorneys shall lawfully do or cause to be done by virtue hereof. All
powers, authorizations and agencies contained in this Agreement are coupled
with an interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.

 

Section 7.17.          Further Assurances.
Notwithstanding anything to the contrary herein, the parties hereto agree to
comply with the requirements set forth in Section 5.13 of the Credit
Agreement.

 

[Signature Pages to Follow]

 

36

 

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

 

	
   

  	
  AGA
  MEDICAL CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  AMPLATZER
  MEDICAL SALES CORPORATION,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC., as Collateral Agent,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

37

 

Exhibit I to the 

Guarantee and

Collateral Agreement

 

SUPPLEMENT
NO.             
dated as of [ ], to the Guarantee and Collateral Agreement dated as of July 28,
2005, among AGA MEDICAL CORPORATION, a Minnesota corporation (the “Borrower”),
Amplatzer Medical Sales Corporation (the “Subsidiary Guarantor”; the
Subsidiary Guarantor and the Borrower are referred to collectively herein as
the “Grantors”) and Lehman Commercial Paper Inc., a [New York] banking
corporation (“Lehman”), as Collateral Agent (in such capacity, the “Collateral
Agent”).

 

A.            Reference is made to the Credit
Agreement dated as of July 28, 2005 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
Bank of America, N.A., Citicorp USA, Inc., Deutsche Bank Trust Company
Americas, Wachovia Bank, National Association and Lehman, as Administrative
Agent.

 

B.            Capitalized terms used in this
Agreement and not otherwise defined in this Agreement shall have the meanings
assigned to such terms in the Credit Agreement and the Collateral Agreement
referred to therein.

 

C.            The Grantors have entered into the
Collateral Agreement in order to induce the Lenders to make Loans and the
Issuing Bank to issue Letters of Credit. Section 7.15 of the Collateral Agreement
provides that [Holdings] [additional Subsidiaries] of the Borrower may become
[Subsidiary] Loan Parties under the Collateral Agreement by execution and
delivery of an instrument in the form of this Supplement. The undersigned
[Subsidiary] [Holdings] (the “[New Subsidiary] [Holdings”) is executing
this Supplement in accordance with the requirements of the Credit Agreement to
become a [Subsidiary] Loan Party under the Collateral Agreement in order to
induce the Lenders to make additional Loans and the Issuing Bank to issue
additional Letters of Credit and as consideration for Loans previously made and
Letters of Credit previously issued.

 

Accordingly,
the Collateral Agent and [the New Subsidiary] [Holdings] agree as follows:

 

SECTION 1.           In accordance with Section 7.15
of the Collateral Agreement, [the New Subsidiary] [Holdings] by its signature
below becomes a [Subsidiary] Loan Party, a Grantor and a Guarantor under the
Collateral Agreement with the same force and effect as if originally named
therein as a [Subsidiary] Loan Party and [the New Subsidiary] [Holdings] hereby
(a) agrees to all the terms and provisions of the Collateral Agreement
applicable to it as a [Subsidiary] Loan Party, Grantor and Guarantor thereunder
and (b) represents and warrants that the representations and warranties
made by it as a Grantor and Guarantor thereunder are true and correct on and as
of the date hereof. In furtherance of the foregoing, [the New Subsidiary]
[Holdings], as security for the payment and performance in full of the
Obligations (as defined in the Collateral Agreement), does hereby create and
grant to the Collateral Agent, its successors and assigns, for the ratable
benefit of the Secured Parties, their successors and assigns, a security 

 

I-1

 

interest
in and lien on all [the New Subsidiary’s] [Holdings’] right, title and interest
in and to the Collateral (as defined in the Collateral Agreement) of the New
Subsidiary. Each reference to a “Guarantor” or “Grantor” in the Collateral
Agreement shall be deemed to include [the New Subsidiary] [Holdings]. The
Collateral Agreement is hereby incorporated in this Agreement by reference.

 

SECTION 2.           [The New Subsidiary][Holdings]
represents and warrants to the Collateral Agent and the other Secured Parties
that this Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.

 

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

 

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

 

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

 

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

 

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

 

SECTION 8.           All communications and notices
hereunder shall be in writing and given as provided in Section 7.01 of the
Collateral Agreement.

 

SECTION 9.           [The New Subsidiary] [Holdings]
agrees to reimburse the Collateral Agent for its reasonable out-of-pocket
expenses in connection with this Supplement, including the reasonable fees,
other charges and disbursements of counsel for the Collateral Agent.

 

I-2

 

IN
WITNESS WHEREOF, [the New Subsidiary] [Holdings] and the Collateral Agent have
duly executed this   the Collateral
Agreement as of the day and year first above written.

 

	
   

  	
  [NAME
  OF [NEW SUBSIDIARY] [HOLDINGS]],

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  Legal Name:

  
	
   

  	
  Jurisdiction of Formation:

  
	
   

  	
  Location of Chief Executive Office:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN
  COMMERCIAL PAPER INC., as Collateral Agent,

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

I-3

 

Schedule I

to the Supplement No.    

to the Guarantee and

Collateral Agreement

 

LOCATION OF COLLATERAL

 

	
  Description

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EQUITY INTERESTS

  
	
   

  
	
  Issuer

  	
   

  	
  Number of 

  Certificate

  	
   

  	
  Registered Owner

  	
   

  	
  Number and 

  Class of

  Equity Interests

  	
   

  	
  Percentage of 

  Equity Interests

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  
	
  DEBT SECURITIES

  
	
   

  
	
  Issuer

  	
   

  	
  Principal

  Amount

  	
   

  	
  Date of Note

  	
   

  	
  Maturity Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  INTELLECTUAL PROPERTY

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.             Copyrights

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Owner

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.            Copyright Applications

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Owner

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  	
  Date

  Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.           Copyright Licenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Licensee

  	
   

  	
  Licensor

  	
   

  	
  Title

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
																							

 

 

IV.           Patents

 

	
  Registered
  Owner

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.            Patent Applications

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Owner

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Date

  Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.           Patent Licenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Licensee

  	
   

  	
  Licensor

  	
   

  	
  Mark

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.          Trademarks

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Owner

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.        Trademark Applications

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Registered
  Owner

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Date

  Filed

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.           Trademark Licenses

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Licensee

  	
   

  	
  Licensor

  	
   

  	
  Type

  	
   

  	
  Registration

  Number

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
																										

 

 

 

 

 

EXHIBIT D

 

FORM OF PERFECTION CERTIFICATE

 

Reference
is made to the Amended and Restated Credit Agreement, dated as of April 28,
2006 (as further amended, restated, supplemented or otherwise modified from
time to time, the “Credit Agreement”), among AGA Medical Holdings, Inc.
(“Holdings”), AGA Medical Corporation (the “Borrower”), the
Lenders and Issuing Banks party thereto and Lehman Commercial Paper Inc., as
Administrative Agent. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement or the Collateral Agreement referred
to therein, as applicable.

 

As
used herein, the term “Companies” means Holdings and each of its
Subsidiaries.

 

The
undersigned, the Director of Finance and Controller and the General Counsel,
respectively, of the Borrower, hereby certify to the Administrative Agent and
each other Secured Party as follows:

 

Section 1.               Names  (a)  Attached hereto as Schedule
1A is (i) the exact legal name of each Company as such name appears in
its respective certificate or document of formation, (ii) each other legal
name such Company has had in the past five years, including the date of the
relevant name change, and (iii) each other name, including trade names and
similar appellations, such Company or any of its divisions or other business
units has used in connection with the conduct of its business or the ownership
of its properties at any time during the past five years.

 

(b)           Except as set forth on Schedule 1B
hereto, no Company has changed its identity or business structure in any way
within the past five years. Changes in identity and business structure include
mergers, acquisitions and consolidations, as well as any change in form, nature
or jurisdiction of formation. If any merger, acquisition or consolidation has
occurred, Schedule 1B sets forth the information required by Sections 1
and 2 of this certificate as to each acquiree and each other constituent party
to such merger, acquisition or consolidation.

 

(c)           Attached hereto as Schedule 1C
is the (i) jurisdiction of formation of each Company that is a registered
organization, (ii) organizational identification number, if any, (iii) address
(including the county) of the chief executive office of such Company and (iv) the
federal taxpayer identification number of each Company.

 

Section 2.               Locations  (a)  Attached hereto as Schedule
2A is a list of all real property held by each Company, whether owned or
leased, the name of the Company that owns or leases said property. Copies of
any deeds, title insurance policies, surveys and other records relating to the
real property listed on Schedule 2A have been delivered to the
Administrative Agent.

 

(b)           Attached hereto as Schedule 2B
is (i) the name and address of any Person other than a Company that has
possession of any Collateral (indicating whether such Person holds such
Collateral subject to a Lien (including, but not limited to, warehousemen’s,
mechanics’ and other statutory liens)) and (ii) any other addresses where
a Company maintains 

 

 

or has maintained during the
previous four months a place of business or any Collateral (other than Accounts
and General Intangibles) not otherwise identified on Schedule 1C, Schedule
2A or Schedule 2B.

 

Section 3.               Unusual Transactions  All Accounts have been originated, and all
Inventory has been acquired, by the Companies in the ordinary course of
business.

 

Section 4.               File Search Reports  File search reports have been obtained from
the (a) Uniform Commercial Code (“UCC”) filing office related to
each location of a Company identified in Schedules 1C, 2A and 2B
(other than locations identified pursuant to clause (i) of Section 2(b) and
(b) county recorder’s office related to the county where each Mortgaged
Property is located. The search reports obtained pursuant to this Section 4
reflect no liens against any of the Collateral or any Mortgaged Property other
than those liens permitted under the Credit Agreement.

 

Section 5.               UCC Filings  UCC financing statements have been prepared
for filing in the appropriate UCC filing office related to the jurisdiction of
formation for each Company. Attached hereto as Schedule 5 is a true and
correct list of each such filing and the UCC filing office in which such filing
is to be made.

 

Section 6.               Equity Interests  Attached hereto as Schedule 6 is a true and
correct list of all the Equity Interests owned by Holdings and each subsidiary
of Holdings (including the Borrower), specifying the Company, issuer and
certificate number of, and the number and percentage of ownership represented
by, such Equity Interests.

 

Section 7.               Debt Instruments  Attached hereto as Schedule 7 is a
true and correct list of all debt instruments and other indebtedness held by
Holdings and each subsidiary of Holdings (including the Borrower), specifying
any promissory notes or intercompany notes evidencing such debt instruments or
indebtedness.

 

Section 8.               Advances and Transfers  Attached hereto as Schedule 8 is a
true and correct list of all (a) advances made by (i) Holdings to the
Borrower or any Subsidiary, (ii) the Borrower to Holdings or any
Subsidiary and (iii) any Subsidiary to the Borrower, Holdings or any other
Subsidiary, in each case other than those identified on Schedule 7,
which advances will be, on and after the date hereof, evidenced by one or more
intercompany notes pledged to the Administrative Agent under the Collateral
Agreement and (b) unpaid intercompany transfers of goods sold and
delivered by the Borrower to any Subsidiary or by any Subsidiary to any other
Subsidiary.

 

Section 9.               Mortgage Filings  Attached hereto as Schedule 9 is a
true and correct list, with respect to each Mortgaged Property, of the (a) exact
name of the Person that owns such property as such name appears in its
certificate of formation, (b) if different from the name identified
pursuant to clause (a), exact name of the current record owner of such property
as such name appears in the records of the county recorder’s office for such
property identified pursuant to the following clause and (c) county
recorder’s office in which a Mortgage with respect to such property must be
filed or recorded in order for the Administrative Agent to obtain a perfected
security interest therein.

 

2

 

Section 10.             Intellectual Property  Attached hereto as Schedule 10, in
proper form for filing with the United States Patent and Trademark Office or
the United States Copyright Office, as applicable, is a true and correct list
of each Company’s (i) Copyrights, Copyright Applications and Copyright
Licenses, (ii) Patents, Patent Applications and Patent Licenses and (iii) Trademarks,
Trademark Applications and Trademark Licenses, in each case including the name
of the registered owner, relevant reference number, relevant date, a brief
description thereof, the relevant country and, if applicable, the licensee and
licensor.

 

Section 11.             Commercial Tort Claims  Attached hereto as Schedule 11 is a
true and correct list of commercial tort claims held by any Company, including
a brief description thereof.

 

Section 12.             Deposit Accounts and Securities
Accounts  Attached hereto as Schedule
12 is a true and correct list of deposit accounts and securities accounts
maintained by each Company, including the name and address of the depositary or
securities institution, the type of account and the account number.

 

[Signature Page to Follow]

 

3

 

EXHIBIT D

 

IN
WITNESS WHEREOF, the undersigned have duly executed this certificate on this 28th day of April, 2006.

 

 

	
   

  	
  AGA
  MEDICAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  David
  Aberle

  
	
   

  	
  Title:

  	
  Director
  of Finance and Controller

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  Peter
  Rother

  
	
   

  	
  Title:

  	
  General
  Counsel

  
				

 

[Signature
Page to AGA Perfection Certificate]

 

 

EXHIBIT
D

 

Schedule 1A

 

Names

 

	
  Company’s Exact Legal Name

  	
   

  	
  Former Names 

  (Including Date of Change)

  	
   

  	
  Other Names

  
	
  AGA Medical
  Holdings, Inc.

  	
   

  	
  None

  	
   

  	
  None

  
	
  AGA Medical Corporation

  	
   

  	
  None

  	
   

  	
  None

  
	
  Amplatzer Medical Sales
  Corporation

  	
   

  	
  None

  	
   

  	
  None

  
	
  AGA Medical
  FSC, Inc.

  	
   

  	
  None

  	
   

  	
  None

  
	
  AGA Medical Switzerland
  Sari

  	
   

  	
  None

  	
   

  	
  None

  

 

 

Schedule 1B

 

Changes in Identity or
Business Structure

 

None.

 

 

Schedule 1C

 

Jurisdiction of Formation, Organizational Identification Number

and Chief Executive Office Address

 

	
  Company

  	
   

  	
  Jurisdiction 

  of Formation

  	
   

  	
  Organizational

  Identification 

  Number

  	
   

  	
  Chief Executive Office 

  Address 

  (Including County)

  	
   

  	
  Federal Taxpayer 

  Identification Number

  
	
  AGA
  Medical Holdings, Inc.

  	
   

  	
  Delaware

  	
   

  	
  3998472

  	
   

  	
  682
  Mendelssohn Avenue,  

  Golden Valley, MN 55427  

  (Hennepin County)

  	
   

  	
  20-4757212

  
	
  AGA
  Medical Corporation

  	
   

  	
  Minnesota

  	
   

  	
  8T-881

  	
   

  	
  682
  Mendelssohn Avenue,  

  Golden Valley, MN 55427  

  (Hennepin County)

  	
   

  	
  41-1815457

  
	
  Amplatzer
  Medical Sales Corporation

  	
   

  	
  Minnesota

  	
   

  	
  12K-944

  	
   

  	
  682
  Mendelssohn Avenue,  

  Golden Valley, MN 55427  

  (Hennepin County)

  	
   

  	
  37-1450639

  
	
  AGA
  Medical FSC, Inc.

  	
   

  	
  Barbados

  	
   

  	
  n/a

  	
   

  	
  682
  Mendelssohn Avenue,  

  Golden Valley, MN 55427  

  (Hennepin County)

  	
   

  	
  98-0193980

  
	
  AGA
  Medical Switzerland Sàrl

  	
   

  	
  Switzerland

  	
   

  	
  n/a

  	
   

  	
  Chapelle
  19a  

  CH2034 Peseux  

  Switzerland

  	
   

  	
  98-0488706

  

 

 

Schedule 2A

 

Location of Owned or Leased
Real Property

 

I.              Owned
Real Properties

 

	
  Property Address

  	
   

  	
  Owner

  
	
  9700
  Schmidt Lake Road,  

  Plymouth, Minnesota 55442

  	
   

  	
  AGA
  Medical Corporation

  

 

II.            Leased
Real Properties

 

	
  Property Address

  	
   

  	
  Tenant

  
	
  682
  Mendelssohn Avenue, 

  Golden Valley, Minnesota 55427

  	
   

  	
  AGA
  Medical Corporation

  

 

 

Schedule 2B

 

Other Persons and Other
Addresses

 

I.              Other
Persons Who Hold Collateral

 

None.

 

II.            Companies’
Other Addresses

 

None.

 

 

Schedule 5

 

UCC Filings

 

	
  Company

  	
   

  	
  UCC Filing Office

  
	
  AGA
  Medical Holdings, Inc.

  	
   

  	
  Secretary
  of State, DE

  
	
  AGA
  Medical Corporation

  	
   

  	
  Secretary
  of State, MN

  
	
  Amplatzer
  Medical Sales Corporation

  	
   

  	
  Secretary
  of State, MN

  

 

 

Schedule 6

 

Equity Interests

 

	
  Holder

  	
   

  	
  Issuer

  	
   

  	
  Certificate 

  Number

  	
   

  	
  Number of 

  Equity Interests

  	
   

  	
  Percentage of 

  Ownership

  	
   

  
	
  AGA
  Medical Holdings, Inc.

  	
   

  	
  AGA
  Medical Corporation

  	
   

  	
  5

  	
   

  	
  200,000
  shares common stock

  	
   

  	
  100

  	
  %

  
	
  AGA
  Medical Corporation

  	
   

  	
  Amplatzer
  Sales Corporation

  	
   

  	
  1

  	
   

  	
  10,000
  shares common stock

  	
   

  	
  100

  	
  %

  
	
  AGA
  Medical Corporation

  	
   

  	
  AGA
  Medical FSC, Inc.

  	
   

  	
  1

  	
   

  	
  1
  ordinary share

  	
   

  	
  100

  	
  %

  
	
  AGA
  Medical Corporation

  	
   

  	
  AGA
  Medical Switzerland Sàrl

  	
   

  	
  n/a

  	
   

  	
  19,000
  CHF paid in capital

  	
   

  	
  95

  	
  %

  

 

 

Schedule 7

 

Debt Instruments

 

Letters
of Credit:

 

	
  Applicant

  	
   

  	
  Issuing Bank

  	
   

  	
  Beneficiary

  	
   

  	
  Number

  	
   

  	
  Amount

  	
   

  
	
  AGA
  Medical Corporation

  	
   

  	
  U.S.
  Bank National Association

  	
   

  	
  Chubb &
  Son, a division of Federal Insurance Company

  	
   

  	
  SLCMMSP03734

  	
   

  	
  $

  	
  300,000

  	
   

  
											

 

 

Schedule 8

 

Advances and Transfers

 

Intercompany
Note, dated as of July 28, 2005, between AGA Medical Corporation and
Amplatzer Medical Sales Corporation.

 

 

Schedule 9

 

Mortgaged Property

 

	
  Record Owner

  	
   

  	
  Address

  	
   

  	
  County Recorder’s Office

  
	
  AGA
  Medical Corporation

  	
   

  	
  9700
  Schmidt Lake Road  

  Plymouth, MN 55442

  	
   

  	
  Hennepin
  County Recorder  

  300 South Sixth Street  

  Minneapolis MN 55487-0083  

  (612) 348-3050

  

 

 

 

 

Schedule 10

 

Intellectual Property

 

I.              Copyrights

 

	
  Registered Owner

  	
   

  	
  Title

  	
   

  	
  Country

  	
   

  	
  Registration 

  Number

  	
   

  	
  Registration 

  Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  amplatzer
  occlusion devices asd pda pfo vsd

  	
   

  	
  United States

  	
   

  	
  TX5532900

  	
   

  	
  7/11/2002

  

 

II.            Copyright
Applications

 

None.

 

III.           Copyright
Licenses

 

None.

 

IV.           Patents

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Patent 

  Number

  	
   

  	
  Patent Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Australia

  	
   

  	
  762205

  	
   

  	
  10/2/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Australia

  	
   

  	
  752585

  	
   

  	
  2/20/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  Australia

  	
   

  	
  737934

  	
   

  	
  12/20/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Australia

  	
   

  	
  727012

  	
   

  	
  3/15/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Australia

  	
   

  	
  711677

  	
   

  	
  2/3/2000

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Australia

  	
   

  	
  2001261620

  	
   

  	
  6/24/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Australia

  	
   

  	
  2001249146

  	
   

  	
  5/6/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Australia

  	
   

  	
  2001247364

  	
   

  	
  11/19/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  Canada

  	
   

  	
  2319521

  	
   

  	
  5/4/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Canada

  	
   

  	
  2302164

  	
   

  	
  3/2/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Canada

  	
   

  	
  2252913

  	
   

  	
  6/25/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  Canada

  	
   

  	
  2194669

  	
   

  	
  7/5/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Canada

  	
   

  	
  2341228

  	
   

  	
  10/11/2005

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Patent 

  Number

  	
   

  	
  Patent Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Canada

  	
   

  	
  2408943

  	
   

  	
  11/8/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  China PRC

  	
   

  	
  ZL99809569.9

  	
   

  	
  11/9/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  China PRC

  	
   

  	
  ZL98813470.5

  	
   

  	
  4/2/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  China PRC

  	
   

  	
  ZL98808876.2

  	
   

  	
  10/2/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  China PRC

  	
   

  	
  ZL97194488.1

  	
   

  	
  4/30/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  China PRC

  	
   

  	
  ZL01803164.1

  	
   

  	
  4/27/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  China PRC

  	
   

  	
  ZL01112410.5

  	
   

  	
  4/20/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  China PRC

  	
   

  	
  ZL00816390.1

  	
   

  	
  4/20/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  China PRC

  	
   

  	
  ZL01112212.9

  	
   

  	
  8/10/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  China PRC

  	
   

  	
  ZL03102917.5

  	
   

  	
  1/2/2006

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  and apparatus for occluding aneurysms

  	
   

  	
  EPO

  	
   

  	
  0902704

  	
   

  	
  8/20/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  EPO

  	
   

  	
  0808138

  	
   

  	
  10/5/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Eurasia

  	
   

  	
  004855

  	
   

  	
  8/26/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Eurasia

  	
   

  	
  004287

  	
   

  	
  2/26/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Eurasia

  	
   

  	
  003973

  	
   

  	
  12/25/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Eurasia

  	
   

  	
  003693

  	
   

  	
  8/28/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Eurasia

  	
   

  	
  002415

  	
   

  	
  4/25/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  Eurasia

  	
   

  	
  002106

  	
   

  	
  12/24/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Eurasia

  	
   

  	
  001480

  	
   

  	
  4/23/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Eurasia

  	
   

  	
  001447

  	
   

  	
  4/23/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  Hong Kong

  	
   

  	
  HK1032892

  	
   

  	
  6/13/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Hong Kong

  	
   

  	
  HK1038871

  	
   

  	
  7/29/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Hong Kong

  	
   

  	
  HK1045250

  	
   

  	
  8/10/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Hong Kong

  	
   

  	
  HK1051958

  	
   

  	
  8/12/2005

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Patent 

  Number

  	
   

  	
  Patent Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  India

  	
   

  	
  192376

  	
   

  	
  919/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Japan

  	
   

  	
  3643309

  	
   

  	
  2/4/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  Japan

  	
   

  	
  3524494

  	
   

  	
  2/20/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Japan

  	
   

  	
  3706337

  	
   

  	
  8/5/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  Japan

  	
   

  	
  3742113

  	
   

  	
  11/18/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  New Zealand

  	
   

  	
  518276

  	
   

  	
  2/9/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  New Zealand

  	
   

  	
  538682

  	
   

  	
  2/9/2006

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Singapore

  	
   

  	
  92089

  	
   

  	
  2/21/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Singapore

  	
   

  	
  92088

  	
   

  	
  7/31/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Singapore

  	
   

  	
  92060

  	
   

  	
  11/30/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Singapore

  	
   

  	
  92087

  	
   

  	
  6/30/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  South Africa

  	
   

  	
  2002/8841

  	
   

  	
  1/28/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  South Korea

  	
   

  	
  463297

  	
   

  	
  12/15/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  South Korea

  	
   

  	
  451476

  	
   

  	
  9/23/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  South Korea

  	
   

  	
  428820

  	
   

  	
  4/13/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  South Korea

  	
   

  	
  400506

  	
   

  	
  9/23/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  South Korea

  	
   

  	
  393441

  	
   

  	
  7/22/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/grant

  	
   

  	
  South Korea

  	
   

  	
  536788

  	
   

  	
  12/8/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  South Korea

  	
   

  	
  508469

  	
   

  	
  8/8/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Sri Lanka

  	
   

  	
  12877

  	
   

  	
  9/30/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding stent

  	
   

  	
  Sri Lanka

  	
   

  	
  12876

  	
   

  	
  9/30/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Sri Lanka

  	
   

  	
  12875

  	
   

  	
  9/30/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6682546

  	
   

  	
  1/27/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  United States

  	
   

  	
  6638257

  	
   

  	
  10/28/2003

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Patent 

  Number

  	
   

  	
  Patent Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6599308

  	
   

  	
  7/29/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6579303

  	
   

  	
  6/17/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  and apparatus for occluding aneurysms

  	
   

  	
  United States

  	
   

  	
  6506204

  	
   

  	
  1/14/2003

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  United States

  	
   

  	
  6468303

  	
   

  	
  10/22/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  United States

  	
   

  	
  6468301

  	
   

  	
  10/22/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6447531

  	
   

  	
  9/10/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  United States

  	
   

  	
  6402772

  	
   

  	
  6/11/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6368339

  	
   

  	
  4/9/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  United States

  	
   

  	
  6334864

  	
   

  	
  1/1/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  United States

  	
   

  	
  6241678

  	
   

  	
  6/5/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  United States

  	
   

  	
  6210338

  	
   

  	
  4/3/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  and apparatus for occluding aneurysms

  	
   

  	
  United States

  	
   

  	
  6168622

  	
   

  	
  1/2/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  6123715

  	
   

  	
  9/26/2000

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  United States

  	
   

  	
  5944738

  	
   

  	
  8/31/1999

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  5846261

  	
   

  	
  12/8/1998

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  United States

  	
   

  	
  5725552

  	
   

  	
  3/10/1998

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  United States

  	
   

  	
  6932837

  	
   

  	
  8/23/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  United States

  	
   

  	
  7001409

  	
   

  	
  2/21/2006

  

 

V.            Patent
Applications

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Application 

  Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  Australia

  	
   

  	
  2005201132

  	
   

  	
  3/16/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  Australia

  	
   

  	
  2002360495

  	
   

  	
  12/5/2002

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Application 

  Date

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  Brazil

  	
   

  	
  PI0500995-2

  	
   

  	
  3/16/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  Brazil

  	
   

  	
  PI0215626-1

  	
   

  	
  12/5/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Brazil

  	
   

  	
  PI01095366

  	
   

  	
  9/25/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Brazil

  	
   

  	
  PI01095374

  	
   

  	
  9/25/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Brazil

  	
   

  	
  PI01108158

  	
   

  	
  5/16/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  Canada

  	
   

  	
  2477725

  	
   

  	
  12/5/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  Canada

  	
   

  	
  2501033

  	
   

  	
  3/16/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  Canada

  	
   

  	
  2403613

  	
   

  	
  3/12/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  Canada

  	
   

  	
  2402101

  	
   

  	
  3/12/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  Canada

  	
   

  	
  2392940

  	
   

  	
  11/28/2000

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  China PRC

  	
   

  	
  200510071608.4

  	
   

  	
  3/18/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  China PRC

  	
   

  	
  200410087702.4

  	
   

  	
  10/22/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  EPO

  	
   

  	
  05251472.6

  	
   

  	
  3/11/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  method
  of forming medical devices; intravascular occlusion devices

  	
   

  	
  EPO

  	
   

  	
  01204926.8

  	
   

  	
  12/17/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  alignment
  member for delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  EPO

  	
   

  	
  01935533.8

  	
   

  	
  5/16/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  repositionable
  and recapturable vascular stent/graft

  	
   

  	
  EPO

  	
   

  	
  01920293.6

  	
   

  	
  3/12/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  retrievable
  self expanding shunt

  	
   

  	
  EPO

  	
   

  	
  01922330.4

  	
   

  	
  3/12/2001

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring septal defects

  	
   

  	
  EPO

  	
   

  	
  99941988

  	
   

  	
  7/30/1999

  
	
  AGA
  Medical Corporation

  	
   

  	
  sizing
  catheter for measuring cardiovascular structures

  	
   

  	
  EPO

  	
   

  	
  00992348.3

  	
   

  	
  11/28/2000

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed constricting occlusion device

  	
   

  	
  EPO

  	
   

  	
  98953347.6

  	
   

  	
  10/12/1998

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  EPO

  	
   

  	
  98946804.6

  	
   

  	
  9/1/1998

  
	
  AGA
  Medical Corporation

  	
   

  	
  percutaneous
  catheter directed intravascular occlusion devices

  	
   

  	
  EPO

  	
   

  	
  97922307

  	
   

  	
  4/14/1997

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  EPO

  	
   

  	
  02795754.7

  	
   

  	
  12/5/2002

  
	
  AGA
  Medical Corporation

  	
   

  	
  multi-layer
  braided structures for occluding vascular defects

  	
   

  	
  Eurasia

  	
   

  	
  200500381

  	
   

  	
  3/18/2005

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  Eurasia

  	
   

  	
  200401098

  	
   

  	
  9/22/2004

  
	
  AGA
  Medical Corporation

  	
   

  	
  intravascular
  flow restrictor

  	
   

  	
  Hong Kong

  	
   

  	
  03109386.0

  	
   

  	
  12/24/2003

  

 

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Application

  Date

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for measuring cardiovascular
  structures

  	
   

  	
  Hong Kong

  	
   

  	
  03104315.7

  	
   

  	
  6/17/2003

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Hong
  Kong

  	
   

  	
  03101775.6

  	
   

  	
  3/12/2003

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Hong
  Kong

  	
   

  	
  02106707.9

  	
   

  	
  9/13/2002

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Hong
  Kong

  	
   

  	
  01108087.6

  	
   

  	
  11/16/2001

  
	
  AGA Medical Corporation

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Hong
  Kong

  	
   

  	
  00105963.2

  	
   

  	
  9/21/2000

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Hong
  Kong

  	
   

  	
  03100702.3

  	
   

  	
  1/16/2006

  
	
  AGA Medical Corporation

  	
   

  	
  repositionable and
  recaputrable vascular stent/graft

  	
   

  	
  Hong
  Kong

  	
   

  	
  05106531.8

  	
   

  	
  8/1/2005

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  India

  	
   

  	
  602DEL2005

  	
   

  	
  3/18/2005

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  India

  	
   

  	
  14471DEL

  	
   

  	
  8/4/2004

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  India

  	
   

  	
  12831DEL2004

  	
   

  	
  7/12/2004

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  India

  	
   

  	
  338DEL2004

  	
   

  	
  3/1/2004

  
	
  AGA Medical Corporation

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  India

  	
   

  	
  1114DEL2003

  	
   

  	
  9/8/2003

  
	
  AGA Medical Corporation

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  India

  	
   

  	
  1115DEL2003

  	
   

  	
  9/8/2003

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  India

  	
   

  	
  00476/DEL

  	
   

  	
  5/7/2002

  
	
  AGA Medical Corporation

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  India

  	
   

  	
  00860/DEL

  	
   

  	
  3/12/2001

  
	
  AGA Medical Corporation

  	
   

  	
  retrievable self expanding
  shunt

  	
   

  	
  India

  	
   

  	
  00862/DEL

  	
   

  	
  3/12/2001

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  India

  	
   

  	
  00452/DEL

  	
   

  	
  11/28/2000

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  India

  	
   

  	
  1106/de199

  	
   

  	
  8/13/1999

  
	
  AGA Medical Corporation

  	
   

  	
  percutaneous catheter
  directed constricting occlusion device

  	
   

  	
  India

  	
   

  	
  2910/de198

  	
   

  	
  9/30/1998

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  India

  	
   

  	
  2528/delnp/2004

  	
   

  	
  12/5/2002

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Indonesia

  	
   

  	
  P00200500145

  	
   

  	
  3/18/2005

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  Indonesia

  	
   

  	
  W00200401861

  	
   

  	
  8/31/2004

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Indonesia

  	
   

  	
  00200202307

  	
   

  	
  5/16/2001

  
	
  AGA Medical Corporation

  	
   

  	
  retrievable self expanding
  stent

  	
   

  	
  Indonesia

  	
   

  	
  00200202305

  	
   

  	
  3/12/2001

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Application

  Date

  
	
  AGA Medical Corporation

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Indonesia

  	
   

  	
  00200202306

  	
   

  	
  3/12/2001

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  Japan

  	
   

  	
  2003-572629

  	
   

  	
  8/31/2004

  
	
  AGA Medical Corporation

  	
   

  	
  sizing catheter for
  measuring cardiovascular structures

  	
   

  	
  Japan

  	
   

  	
  2001-539510

  	
   

  	
  11/28/2000

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Japan

  	
   

  	
  2001-583635

  	
   

  	
  5/16/2001

  
	
  AGA Medical Corporation

  	
   

  	
  retrievable self expanding
  shunt

  	
   

  	
  Japan

  	
   

  	
  2001-570325

  	
   

  	
  3/21/2001

  
	
  AGA Medical Corporation

  	
   

  	
  repositionable and
  recapturable vascular stent/graft

  	
   

  	
  Japan

  	
   

  	
  2001-570203

  	
   

  	
  3/12/2001

  
	
  AGA Medical Corporation

  	
   

  	
  percutaneous catheter
  directed intravascular occlusion devices

  	
   

  	
  Japan

  	
   

  	
  2000-510380

  	
   

  	
  9/1/1998

  
	
  AGA Medical Corporation

  	
   

  	
  method of forming medical
  devices; intravascular occlusion devices

  	
   

  	
  Japan

  	
   

  	
  8-504395

  	
   

  	
  7/10/1995

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Japan

  	
   

  	
  2005-078665

  	
   

  	
  3/18/2005

  
	
  AGA Medical Corporation

  	
   

  	
  method of forming medical
  devices; intravascular occlusion devices

  	
   

  	
  Japan

  	
   

  	
  2005-319544

  	
   

  	
  11/2/2005

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Mexico

  	
   

  	
  PAa2005002928

  	
   

  	
  3/16/2005

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  Mexico

  	
   

  	
  PAa2004008439

  	
   

  	
  8/31/2004

  
	
  AGA Medical Corporation

  	
   

  	
  alignment member for
  delivering a non-symmetric device with a pre-defined orientation

  	
   

  	
  Mexico

  	
   

  	
  011196

  	
   

  	
  5/16/2001

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  New
  Zealand

  	
   

  	
  534953

  	
   

  	
  8/27/2004

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Singapore

  	
   

  	
  200502755-2

  	
   

  	
  3/9/2005

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  Singapore

  	
   

  	
  200405312-0

  	
   

  	
  8/30/2004

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  South
  Africa

  	
   

  	
  2005/02143

  	
   

  	
  3/14/2005

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  South
  Africa

  	
   

  	
  2004/6757

  	
   

  	
  12/5/2002

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  South
  Korea

  	
   

  	
  200522530

  	
   

  	
  3/18/2005

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  South
  Korea

  	
   

  	
  2004-7013649

  	
   

  	
  9/1/2004

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  Sri
  Lanka

  	
   

  	
   

  	
   

  	
  12/5/2002

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  Sri
  Lanka

  	
   

  	
   

  	
   

  	
  3/19/2005

  
	
  AGA Medical Corporation

  	
   

  	
  open structure sizing
  device

  	
   

  	
  United
  States

  	
   

  	
  11/033233

  	
   

  	
  1/11/2005

  
	
  AGA Medical Corporation

  	
   

  	
  multi-layer braided
  structures for occluding vascular defects

  	
   

  	
  United
  States

  	
   

  	
  10/804993

  	
   

  	
  3/19/2004

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular flow
  restrictor

  	
   

  	
  United
  States

  	
   

  	
  10/408805

  	
   

  	
  4/7/2003

  
	
  AGA Medical Corporation

  	
   

  	
  intravascular deliverable
  stent for reinforcement of abdominal aortic aneurysm

  	
   

  	
  United
  States

  	
   

  	
  11/331640

  	
   

  	
  1/13/2006

  

 

 

	
  Registered Owner

  	
   

  	
  Patent Title

  	
   

  	
  Country

  	
   

  	
  Application

  Number

  	
   

  	
  Application

  Date

  
	
  AGA Medical Corporation

  	
   

  	
  flanged occlusion devices
  and methods

  	
   

  	
  United
  States

  	
   

  	
  60/560825

  	
   

  	
  4/8/2004

  

 

VI.                                 Patent
Licenses

 

On March 24, 2006, NMT Medical, Inc.
and Lloyd A Marks granted an exclusive patent license to AGA Medical Corporation
of United States Patent No. 5,108,420 (titled “Aperture Occlusion Device”),
issued on April 28, 1992, on United States Patent Application Serial No. 07/649,593
(filed February 1, 1991).

 

VII.                             Trademarks

 

	
  Registered
  Owner

  	
   

  	
  Trademark

  	
   

  	
  Country

  	
   

  	
  Registration

  Number

  	
   

  	
  Registration

  Date

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  Australia

  	
   

  	
  744470

  	
   

  	
  9/22/1997

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  Canada

  	
   

  	
  500695

  	
   

  	
  9/16/1998

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  China
  PRC

  	
   

  	
  1247606

  	
   

  	
  2/14/1999

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  European
  Community

  	
   

  	
  633917

  	
   

  	
  2/26/1999

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  Japan

  	
   

  	
  4231110

  	
   

  	
  1/14/1999

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  Russian
  Fed.

  	
   

  	
  171204

  	
   

  	
  1/14/1999

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  United
  States

  	
   

  	
  2144604

  	
   

  	
  3/17/1998

  
	
  AGA Medical Corporation

  	
   

  	
  TORQVUE

  	
   

  	
  United
  States

  	
   

  	
  2760128

  	
   

  	
  9/2/2003

  
	
  AGA Medical Corporation

  	
   

  	
  TORQVUE &
  Design

  	
   

  	
  United
  States

  	
   

  	
  2818165

  	
   

  	
  2/24/2004

  

 

VIII.                         Trademark
Application

 

	
  Registered
  Owner

  	
   

  	
  Trademark

  	
   

  	
  Country

  	
   

  	
  Serial No.

  	
   

  	
  Date

  Filed

  
	
  AGA Medical Corporation

  	
   

  	
  AMPLATZER

  	
   

  	
  United
  States

  	
   

  	
  769603

  	
   

  	
  9/22/1997

  

 

IX.                                 Trademark
Licenses

 

None.

 

 

EXHIBIT
D

 

Schedule 11

 

Commercial
Tort Claims

 

AGA v.
William Liebesny, Brent Peterson, Creative Data & Design, Inc.,
JZ Technologies, Inc. and Karen Liebesny, Hennepin County,
Minnesota, Court File No. CT 04-13823, pursuant to which the Borrower
seeks to recover approximately $1.6 million plus damages against a former
employee of the Borrower and persons affiliated with such former employee
(collectively, the “Defendants”) in connection with the Defendants’
alleged defrauding of the Borrower. The Borrower believes that it is unlikely
that substantial amounts will be recovered from the Defendants in the
above-referenced civil action.

 

 

EXHIBIT
D

 

Schedule 12

 

Deposit
Accounts and Securities Accounts

 

	
  Institution

  	
   

  	
  Account

  Description

  	
   

  	
  Institution Address

  	
   

  	
  Institution

  Account Name

  	
   

  	
  Institution

  Account

  Number

  	
   

  	
  Currency

  
	
  US Bank National
  Association

  	
   

  	
  Cash - Checking

  	
   

  	
  James Kellogg

  Commercial Banking

  BC-MN-H03W

  US Bancorp Center

  800 Nicollet Mall

  Minneapolis, MN 55402

  612-303-3513

  	
   

  	
  Premium Business Checking

  	
   

  	
  1
  047 7401 4799

  	
   

  	
  US
  Dollars

  
	
  US Bank National
  Association

  	
   

  	
  Cash - Checking

  	
   

  	
  James Kellogg

  Commercial Banking

  BC-MN-H03W

  US Bancorp Center

  800 Nicollet Mall

  Minneapolis, MN 55402

  612-303-3513

  	
   

  	
  Basic Business Checking
  with Interest

  	
   

  	
  1
  801 9208 8896

  	
   

  	
  US
  Dollars

  
	
  US Bank National
  Association

  	
   

  	
  Cash - Checking

  	
   

  	
  James Kellogg

  Commercial Banking

  BC-MN-H03W

  US Bancorp Center

  800 Nicollet Mall

  Minneapolis, MN 55402

  612-303-3513

  	
   

  	
  Eurodollar Investment Sweep

  	
   

  	
  2
  731 0128 8606

  	
   

  	
  US
  Dollars

  
	
  US Bank National
  Association

  	
   

  	
  Cash - Savings

  	
   

  	
  James Kellogg

  Commercial Banking

  BC-MN-H03W

  US Bancorp Center

  800 Nicollet Mall

  Minneapolis, MN 55402

  612-303-3513

  	
   

  	
  Preferred Business Money
  Market

  	
   

  	
  1
  731 0131 6730

  	
   

  	
  US
  Dollars

  
	
  Piper Jaffray

  	
   

  	
  Cash - Savings 2

  	
   

  	
  Joann Hinnenthal

  800 Nicollet Mall

  Minneapolis, MN 55402

  800-333-6000

  	
   

  	
  Money Market

  	
   

  	
  1021-0335

  	
   

  	
  US
  Dollars

  
	
  US Bank National
  Association

  	
   

  	
  Petty Cash

  	
   

  	
  James Kellogg

  Commercial Banking

  BC-MN-H03W

  US Bancorp Center

  800 Nicollet Mall

  Minneapolis, MN 55402

  612-303-3513

  	
   

  	
  Premium Business Checking

  	
   

  	
  1
  047 5678 1001

  	
   

  	
  US
  Dollars

  
	
  Deutsche Bank AG

  	
   

  	
  Deutsche Bank - Euro

  	
   

  	
  Dirk Hillenbrand

  Borsenplatz 7-11

  D-60313 Frankfurt Germany

  email:dirk.hillenbrand@db.com

  	
   

  	
  N/A

  	
   

  	
  175-3284

  	
   

  	
  Euro

  

 

 

	
  Institution

  	
   

  	
  Account

  Description

  	
   

  	
  Institution Address

  	
   

  	
  Institution

  Account Name

  	
   

  	
  Institution

  Account

  Number

  	
   

  	
  Currency

  
	
  Deutsche Bank AG

  	
   

  	
  Deutsche Bank - Euro

  	
   

  	
  Dirk Hillenbrand

  Borsenplatz 7-11

  D-60313 Frankfurt Germany

  email:dirk.hillenbrand@db.com

  	
   

  	
  N/A

  	
   

  	
  175-3284

  	
   

  	
  Euro

  
	
  Deutsche Bank AG

  	
   

  	
  Deutsche Bank - USD

  	
   

  	
  Dirk Hillenbrand

  Borsenplatz 7-11

  D-60313 Frankfurt Germany

  email:dirk.hillenbrand@db.com

  	
   

  	
  N/A

  	
   

  	
  175-3284

  	
   

  	
  US
  Dollars

  
	
  Credit Suisse

  	
   

  	
  Current

  	
   

  	
  Credit Suisse

  CH-2001 Neuchatel

  Switzerland

  	
   

  	
  N/A

  	
   

  	
  547687-1

  	
   

  	
  CHF

  

 

 

Exhibit
E

 

BORROWING REQUEST

 

Lehman Commercial Paper Inc.,

as Administrative Agent for

the Lenders,

	
  Attention:

  	
  Carmen
  Pi-Santana

  
	
   

  	
  745
  Seventh Avenue

  
	
   

  	
  New
  York, New York 10019

  
	
   

  	
  Fax: (646) 834-2379

  

 

April 27, 2006

 

Ladies and Gentlemen:

 

The undersigned, AGA Medical Corporation, a
Minnesota corporation (the “Borrower”), refers to the Amended and
Restated Credit Agreement to be dated as of April 28, 2006 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
the Borrower, the Lenders and Issuing Banks from time to time party thereto and
Lehman Commercial Paper Inc., as Administrative Agent (in such capacity, the “Administrative
Agent”). Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. The
Borrower hereby gives you notice pursuant to Section 2.03 of the Credit
Agreement that it requests a Borrowing under the Credit Agreement, and in that
connection sets forth below the terms on which such Borrowing is requested to
be made:

 

	
  (A)

  	
  Date
  of Borrowing

  (which
  is a Business Day)

  	
  April 28,
  2006

  
	
   

  	
   

  	
   

  
	
  (B)

  	
  Principal
  Amount of Borrowing

  	
  $215,000,000

  
	
   

  	
   

  	
   

  
	
  (C)

  	
  Class of
  Borrowing

  	
  Tranche
  B Term Loan

  
	
   

  	
   

  	
   

  
	
  (D)

  	
  Type
  of Borrowing

  	
  ABR
  Borrowing

  
	
   

  	
   

  	
   

  
	
  (E)

  	
  Interest
  Period and the last day thereof

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  (F)

  	
  Funds
  are requested to be disbursed to the Borrower’s account as follows (Account No.
  104774014799)

  

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  AGA MEDICAL CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  by:

  	
  /s/ Frank Gougeon

  
	
   

  	
   

  	
  Name: Frank Gougeon

  
	
   

  	
   

  	
  Title:   President &
  CEO

  
				

 

 

[SIGNATURE PAGE TO
INTEREST ELECTION REQUEST]

 

2

 

Exhibit
F

 

INTEREST ELECTION REQUEST

 

Lehman Commercial Paper Inc.,

as Administrative Agent for

the Lenders,

	
  Attention:

  	
  Carmen
  Pi-Santana

  
	
   

  	
  745
  Seventh Avenue

  
	
   

  	
  New
  York, New York 10019

  
	
   

  	
  Fax: (646) 834-2379

  

 

April 28, 2006

 

Ladies and Gentlemen:

 

Reference is made to the Amended and Restated Credit
Agreement dated as of April 28, 2006 (as amended, supplemented or
otherwise modified from time to time, the “Credit  Agreement”),
the Borrower, the Lenders and Issuing Banks from time to time party thereto and
Lehman Commercial Paper Inc., as Administrative Agent (in such capacity, the “Administrative
Agent”). Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement. This
notice constitutes an Interest Election Request, and the Borrower hereby
requests the conversion or continuation of a Borrowing under the Credit
Agreement, and in that connection the Borrower specifies the following
information with respect to the Borrowing to be converted or continued as
requested hereby:

 

	
   

  	
  (A)

  	
  Borrowing
  to which this request applies:  Tranche
  B Term Loan (ABR Borrowing)

  
	
   

  	
   

  	
   

  
	
   

  	
  (B)

  	
  Principal
  amount of the Borrowing to be converted/continued:  $215,000,000

  
	
   

  	
   

  	
   

  
	
   

  	
  (C)

  	
  Effective
  date of election (which is a Business Day): 
  May 3, 2006

  
	
   

  	
   

  	
   

  
	
   

  	
  (D)

  	
  Interest
  rate basis of resulting Borrowing:  Eurodollar
  Borrowing

  
	
   

  	
   

  	
   

  
	
   

  	
  (E)

  	
  Interest
  Period of resulting Borrowing:  3-month
  LIBOR

  

 

[Signature Page Follows]

 

 

The Borrower hereby represents and warrants to the
Administrative Agent and the Lenders that, on the date of this Borrowing
Request and on the date of the related Borrowing, the conditions to lending
specified in Section 4.02 of the Credit Agreement have been satisfied.

 

	
   

  	
  AGA
  MEDICAL CORPORATION,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Franck Gougeon

  
	
   

  	
   

  	
  Name:  Franck Gougeon

  
	
   

  	
   

  	
  Title:    President &
  CEO

  

 

 

[SIGNATURE PAGE TO
BORROWING REQUEST]

 

2

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