Document:

Exhibit 10.13

 

*              Portions
of this exhibit have been omitted pursuant to a request for confidential
treatment and have been filed separately with the Commission.

 

MANAGEMENT RIGHTS PURCHASE AGREEMENT

 

THIS MANAGEMENT RIGHTS
PURCHASE AGREEMENT (“Agreement”), dated as of July 27, 2005, is by and
among Parthenon Management Partners,
LLC, a California limited liability company (the “Company”), Andrew A.
Brooks, M.D. and Randhir S. Tuli, both residents of the State of California
(each an “Owner” and, collectively, the “Owners”) (the Company and the Owners
being, collectively, the “Sellers”) and SymbionARC Management Services, Inc.,
a Tennessee corporation (“Purchaser”). 
The Company, Owners and Purchaser are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.”  Symbion Ambulatory Resource Centres, Inc.,
a Tennessee corporation (“SARC”), joins herein solely for the purposes of
manifesting its agreement with Article VIII hereof.

 

RECITALS:

 

WHEREAS, as of the
date hereof, the Owners collectively own 100% of the outstanding membership
interests of the Company; and

 

WHEREAS, the Owners
are the holders of outstanding membership interests comprised of membership
units of ownership (collectively, the “Ownership Interests”) in Specialty Surgical
Centers, LLC, a California limited liability company (the “Beverly Hills LLC”),
Specialty Surgical Center of Encino, LLC, a California limited liability
company (the “Encino LLC”), Specialty Surgical Center of Irvine, LLC, a
California limited liability company (the “Irvine LLC”), Specialty Surgical
Center of Arcadia, LLC, a California limited liability company (the “Arcadia
LLC”) and Specialty Surgical Center of Thousand Oaks, LLC, a California limited
liability company (the “Thousand Oaks LLC”) (each an “LLC” and collectively,
the “LLCs”); and

 

WHEREAS, the Beverly Hills LLC leases space for, owns the assets of,
and operates an outpatient surgery center located at 9575 Brighton Way, Suite 100,
Beverly Hills, CA 90210 (the “Brighton Center”) and owns a 99% general partner
interest in Specialty Surgical Center of Beverly Hills, L.P., a California
limited partnership (the “Wilshire Partnership”), which leases space for, owns
the assets of, and operates an outpatient surgery center located at 8670 Wilshire
Boulevard, Suite300, Beverly Hills, CA 90211 (the “Wilshire Center”);

 

WHEREAS, the Encino LLC owns a 99% general partner interest in
Specialty Surgical Center of Encino, L.P., a California limited partnership
(the “Encino Partnership”), which leases space for, owns the assets of, and
operates an outpatient surgery center located at 16501 Ventura Boulevard, Suite 103,
Encino, CA  91436 (the “Encino Center”);

 

WHEREAS, the Irvine LLC owns a 99% general partner interest in
Specialty Surgical Center of Irvine, L.P., a California limited partnership
(the “Irvine Partnership”), which leases space for, owns the assets of, and
operates an outpatient surgery center located at 15825 Laguna Canyon Road, Suite 200,
Irvine, CA 92618 (the “Irvine Center”);

 

WHEREAS, the Arcadia LLC owns a 99% general partner interest in
Specialty Surgical Center of Arcadia, L.P., a California limited partnership
(the “Arcadia Partnership”), which leases space for, owns the assets of, and
operates an outpatient surgery center located at 51 North Fifth Avenue, Suite 101,
Arcadia, CA 91006 (the “Arcadia Center”);

 

 

WHEREAS, the Thousand Oaks LLC intends to lease space for, own the
assets of, and operate an outpatient surgery center located at 696 Hampshire
Road, Thousand Oaks, CA 91361 (the “Thousand Oaks Center”);

 

WHEREAS, the Brighton Center, the Wilshire Center, the Encino Center,
the Irvine Center, the Arcadia Center and the Thousand Oaks Center are referred
to individually as a “Center” and, collectively, the “Centers”; and

 

WHEREAS, the Beverly
Hills LLC and the Encino LLC are referred to individually as an “Existing
Center LLC” and, together, as the “Existing Center LLCs”; and

 

WHEREAS, the Irvine
LLC, the Arcadia LLC and the Thousand Oaks LLC are referred to individually as
a “Developing Center LLC” and, collectively, as the “Developing Center LLCs”;

 

WHEREAS, in the case of each LLC that is a member of a Partnership, the
Partnership of which the LLC is a Member is referred to hereinafter as that LLC’s
“Applicable Partnership”;

 

WHEREAS, Affiliates of Purchaser have entered
into a Purchase Agreement, of even date herewith (the “Membership Interest
Purchase Agreement”), pursuant to which such Affiliates of Purchaser will
acquire units of membership interest in each LLC (the “Ownership Interests”)
from the members of each such LLC (including the Owners) and will acquire the
right and option to acquire additional Ownership Interests from such members of
each such LLC (including the Owners), all as further described in the
Membership Interest Purchase Agreements; and

 

WHEREAS, in addition to the Ownership Interests,
the Owners and the Company collectively own rights in and to those certain
economic interests that entitle such Persons to receive consideration for and
obligate such Persons to perform certain management responsibilities for each
Center (collectively, the “Management Rights”) under Sections 5.6(a) and
5.6(b) of the Operating Agreement of the Beverly Hills LLC, Sections 5.6(a) and
6.4(b) of the Operating Agreement of the Encino LLC, Sections 5.7(a) and
6.2(f) of each the Operating Agreement of the Irvine LLC, the Operating
Agreement of the Arcadia LLC and the Operating Agreement of the Thousand Oaks
LLC;

 

WHEREAS, as a
condition to the closing of the transactions contemplated by the Membership
Interest Purchase Agreement, each LLC is required to terminate the Management
Rights and in lieu thereof execute and deliver to one or more Affiliates of
Purchaser identified on Schedule 1 hereto a Management Agreement
substantially in the form of Exhibit 1.2 hereto (each a “Management
Agreement”), pursuant to which such Affiliate(s) of Purchaser shall become
entitled to receive consideration
for and obligate such Affiliate(s) of
Purchaser to perform certain
management responsibilities for and on behalf of each Center from and after the date of the Closing
(as defined in the Membership Interest Purchase Agreement); and

 

WHEREAS, in order to
convey and assign the Management Rights so as to permit the Existing Center
LLCs and Developing Center LLCs to cancel them and execute and deliver the
Management Agreements, the Sellers desire to sell to Purchaser, and Purchaser
desires to purchase from the Sellers, the Management Rights on the terms and
conditions of this Agreement; and

 

NOW, THEREFORE, in
consideration of the foregoing and of the promises and mutual covenants
contained herein, the Parties hereby agree as follows:

 

2

 

I.  PURCHASE AND SALE OF MANAGEMENT RIGHTS

 

1.1.                              Purchase and Sale of Management
Rights.  Subject to the
terms and conditions hereof, in reliance upon the representations and
warranties of the other Parties set forth herein, and in exchange for the
payment of the Purchase Price hereunder and the other covenants and obligations
set forth herein, at the Closing (as hereinafter defined), Purchaser agrees to
purchase from the Sellers, and the Sellers agree to sell, assign, transfer and
deliver to Purchaser, the Management Rights. 
The Management Rights being transferred hereunder do not include, and
the Sellers shall retain, the right to any compensation earned, or rights to
reimbursement of expenses thereunder with respect to all periods prior to the
Closing.

 

1.2.                              Consideration.

 

(a)                                  Subject to the terms
and conditions hereof, in reliance upon the representations and warranties of
the Sellers set forth herein, and as consideration for the assignment of the
Management Rights and the other covenants and obligations set forth herein,
Purchaser agrees to tender to the 
Sellers as the purchase price hereunder (I) FIVE MILLION EIGHT
HUNDRED SIXTEEN THOUSAND DOLLARS ($5,816,000) (the “Initial Purchase Price”),
and (II) the Deferred Payment (if any) with respect to each Center.  The Initial Purchase Price (less the (i) aggregate
amount of “Individual Escrow Amounts” set forth on Exhibit A to the MIPA
with respect to each Seller’s sale of the Management Rights and (ii) AH
Escrow Amount defined below) shall be payable to the Sellers at the
Closing.  The Deferred Payment with
respect to any Center shall be paid to the Sellers at the end of the Payment
Period (as defined in Consulting Agreement) for that Center.  All payments due hereunder shall be made in
immediately available funds by electronic wire transfer to an account
designated by the Sellers. No party will take any steps intended to delay
collection of Fees.

 

(b)                                 From the Initial
Purchase Price, an amount equal to THREE HUNDRED THIRTY THREE THOUSAND THREE
HUNDRED THIRTY THREE AND NO/100 DOLLARS ($333,333.00) (the “AH Escrow Amount”)
shall be withheld from delivery to the Sellers and, instead, be delivered to
the Escrow Agent in cash at Closing, by wire transfer of immediately available
funds, pursuant to the Escrow Agreement substantially in the form of Exhibit 1.2(b) (the
“Escrow Agreement”) attached to this Agreement and incorporated into this
Agreement by reference. The Parties acknowledge and agree that the AH Escrow
Amount represents that portion of the Initial Purchase Price that is
consideration for the Management Rights of Sellers with respect to the Thousand
Oaks Center.  If there shall have been a
Successful Syndication of the Thousand Oaks LLC on or before December 31,
2005, then within ten (10) days after the Successful Syndication, the
Purchaser shall instruct the Escrow Agent to distribute the AH Escrow Amount to
the Sellers.  If there shall not have
been a Successful Syndication of the Thousand Oaks LLC on or before December 31,
2005, then all of the AH Escrow Amount shall be returned to the Purchaser, and
Purchaser shall have no obligation hereunder to acquire Management Rights with
respect to the Thousand Oaks LLC and the Initial Purchase Price under Section 1.2(a) shall
be deemed to have automatically been reduced by the amount of the AH Escrow
Amount.  As used herein, “Successful
Syndication” means the closing of the sale of not less than sixty percent (60%)
of the membership interests in the Thousand Oaks LLC to not fewer than fifteen
(15) suitable purchasers (for this purpose, individual physician members of a “Physician
Entity” (as defined in the Operating Agreement of the Thousand Oaks LLC) who
are anticipated to use the Thousand Oaks Center as an extension of their
practices will each be counted as an individual purchaser), all of whom must be
acceptable to the Purchaser in such Purchaser’s reasonable discretion.

 

(b)                                 Not later than the
date described in Section 1.2(a), Purchaser shall calculate in good faith
the amount of the Deferred Payment then due and deliver to the Sellers a
statement (the

 

3

 

“Statement”) setting forth
such calculation in reasonable detail together with a check for the amount
shown as due thereunder.  The Sellers
shall be entitled to audit the books and records of the Manager and its
affiliates upon which any Statement is based. 
The Sellers shall pay all costs and expenses of the audit unless such
examination shows an underpayment of at least ten percent (10%) or more of the
total amount payable during the period covered by the audit, in which case the
costs of the audit shall be paid by the Purchaser.  Any underpayment will bear interest at prime
plus 2%, and the amount of such underpayment shall be paid by Purchaser within
two (2) business days of its calculation.

 

(c)                                  As used herein,

 

(i)                                     “Deferred Payment”
means (i) three and one-half (3.5) times the TTM Fees (defined below) with
respect to an Existing Center LLC, or (ii) two and seventy two
one-hundredths (2.72) times the TTM Fees with respect to a Developing Center
LLC, such calculations being based for purposes hereof on the product of, in
the case of Existing Center LLCs, seven (7.0), and in the case of Developing
Center LLCs, six and eight-tenths (6.8), in all cases multiplied by the
percentage of Fees required by the Consulting Agreement to be paid to Sellers
as a “Consulting and Oversight Fee” (defined that term is defined in Section 2.1
of the Consulting Agreement); provided, however, in the event
that a Repurchase Notice shall have been delivered in accordance with Section 1.4(f) of
the Membership Interest Purchase Agreement and the election provided in Section 1.4(g)(2) of
the Membership Interest Purchase Agreement shall have been made, then the
Deferred Payment with respect to such Developing Center LLC shall instead equal
the Management Agreement Termination Fee (as defined in such Section 1.4(f))
and provided further, however, that the Deferred Payment for any Center
shall be zero in the event the Payment Period ends as a result of (i) a
termination of the related Management Agreement in accordance with Section 1.4(g) of
the Membership Interest Purchase Agreement or (ii) Manager (or its
affiliates) ceasing to be the manager of that Center following the natural
expiration of the term of the relevant Management Agreement.

 

(ii)                                  “Fees” means, with
respect to a Center, all fees payable to Manager and its Affiliates, without
any deductions whatsoever, under a Management Agreement (but not the amount of
any expense reimbursements made under the Management Agreements).  No amendment or termination of any Management
Agreement will affect the calculation of the Fees, which will continue to be
calculated based on the terms of the Management Agreement in force on the date
hereof unless otherwise consented in writing by the Sellers.

 

(iii)                               “TTM Fees” means, with
respect to a Center, the Fees actually received by Purchaser and its Affiliates
under and pursuant to a Management Agreement for the twelve calendar months
ending with the month prior to the date on which the applicable payment is due
(such date being the “Payment Term Ending Date”).

 

1.3.                              Assignment.  The sale, assignment, transfer and delivery
of the Management Rights shall be made by each Seller’s execution and delivery
at the Closing of an Assignment substantially in the form attached as Exhibit 1.3
hereto (the “Assignment”) and the delivery by each LLC (or its Applicable
Partnership) of the executed Management Agreement. From and after the closing
of the transactions contemplated by the Membership Interest Purchase Agreement,
the Management Rights shall be cancelled and, thereafter, the Management
Agreements shall supersede and replace the Management Rights.

 

1.4.                              No Assumption of
Liabilities.  Purchaser shall
not assume, at the Closing or otherwise, any liability of any Seller, and each
Seller covenants and agrees to satisfy, when due, all of its liabilities,
indebtedness and obligations.  Purchaser
shall not be responsible, from and after the Closing or otherwise, for 

 

4

 

any other of the Sellers’ leases,
contracts, liabilities, indebtedness or any other obligations incurred by a
Seller, fixed or contingent, disclosed or undisclosed.

 

1.5.                              Closing.  The sale and purchase of the Management
Rights and other activities provided for herein (the “Closing”) shall take
place at Waller Lansden Dortch and Davis, PLLC, 511 Union Street, Suite 2700,
Nashville, Tennessee 37219, or at such other place as the Parties may agree
upon, on the first business day following the satisfaction (or waiver) of all
of the conditions to closing set forth in Articles VI and VII hereof (such date
being the “Closing Date”), and the Closing shall be deemed effective at 12:01 a.m.
on the Closing Date.

 

1.6.                              Interpretation.  In this Agreement, unless the context
otherwise requires:

 

(a)                                  references to this Agreement are
references to this Agreement and to the Schedules and Exhibits attached hereto;

 

(b)                                 references to Articles and Sections are
references to articles and sections of this Agreement;

 

(c)                                  references to any Party to this Agreement
shall include references to its respective successors and permitted assigns;

 

(d)                                 references to a judgment shall include
references to any order, writ, injunction, decree, determination or award of
any court or tribunal;

 

(e)                                  references to a person shall include
references to any individual, company, body corporate, association, limited
liability company, firm, joint venture, trust or governmental entity or agency;

 

(f)                                    the terms “hereof,” “herein,” “hereby”
and derivative or similar words will refer to this entire Agreement;

 

(g)                                 references to any document (including
this Agreement) are references to that document as amended, consolidated,
supplemented, novated or replaced by the Parties from time to time;

 

(h)                                 the word “including” shall mean including
without limitation;

 

(i)                                     each representation, warranty and
covenant contained herein shall have independent significance and, if any party
hereto has breached 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 such party has not breached shall not detract from or
mitigate the fact that the party is in breach of the first representation,
warranty or covenant, provided that indemnification for any such breach shall
be only in accordance with and subject to the limitations of Article VIII
hereof; and

 

(j)                                     in respect of a party, the term “Affiliate”
shall mean any entity controlling, controlled by or under common control with
such party.

 

5

 

II. 
REPRESENTATIONS AND WARRANTIES OF SELLERS

 

Except as set forth in
a Schedule called for hereunder (each of which shall refer to a specific
section to which such Schedule shall apply), the Owners and the Company hereby
jointly and severally represent and warrant to Purchaser as follows:

 

2.1.                              Authorization and
Binding Effect of Owners.  The Company and
each Owner has all necessary authority and power to execute and deliver this
Agreement and consummate the transactions contemplated hereby and has taken all
action required to be taken to authorize the execution, delivery and
performance of this Agreement.  This
Agreement constitutes a valid and binding agreement or commitment against the
Company and the Owners in accordance with its terms.  The execution of this Agreement by the
Company and the Owners, the performance by the Company and the Owners of their
obligations hereunder and the consummation of the transactions contemplated
hereby by the Company and the Owners will not require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, or permit termination of, or result in the creation or
imposition of any lien upon any properties, assets or business of the Company
or an Owner under any note, bond, indenture, mortgage, deed of trust, lease,
franchise, permit, authorization, license, contract, instrument or other
agreement or commitment or any order, judgment or decree to which any of them
is a party or by which any of them of their respective assets or properties is
bound or encumbered, except as indicated on Schedule 2.1
hereof.  No notice to, filing or
registration with or authorization, consent or approval of any public body or
governmental or regulatory authority is necessary for the consummation by the
Company or the Owners of the transactions contemplated by this Agreement,
except as indicated on Schedule 2.1 hereto.  Each Owner is a resident of the State of
California.

 

2.2.                              Organization of the
Company.  The Company is a
limited liability company duly organized and validly existing in good standing
under the laws of the State of California, has full power and authority to own
and operate its property and to carry on its business as now being conducted,
and is duly qualified to do business in each jurisdiction in which the nature
of its property or business requires.

 

2.3.                              Capitalization.  The Owners own 100% of the issued and
outstanding equity securities of the Company.

 

2.4.                              Representations Regarding the Management Rights.

 

(a)                                  The Management Rights
are being transferred hereunder free and clear of any liens or claims, and upon
amendment of the Operating Agreements, no person will have any further claim
thereunder for periods following the Closing Date.  Attached hereto as Schedule 2.4(a) are
state and local UCC searches on the Sellers and, except as disclosed thereon,
the Sellers have good title to the Management Rights, free and clear of all
liens, claims or encumbrances.  Schedule
2.4(a) reflects all security interests relating to the Management
Rights in every place where security interests created or perfected by filing
are legally required to be filed and include copies of all such financing
statements.

 

(b)                                 Each Seller is in compliance with the terms and
requirements of the Management Rights; no event or circumstance exists that
(with or without notice or lapse of time) contravenes, conflicts with, is in a
violation or breach of, or gives any party the right to declare a default on
such Management Rights or exercise any remedy with respect thereto, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Management Right; no LLC or Applicable Partnership has given or received
any written unresolved notice or other unresolved written communication
regarding any actual, alleged, possible, or potential violation or breach of,
or default under, any Management Right; and there is no litigation,
arbitration, governmental claim, investigation or proceeding, pending or, to
the knowledge of any Seller, threatened, against any Seller at law or in
equity, before any court, arbitration tribunal or governmental 

 

6

 

agency, relating to any of the Management Rights, and no
Seller knows of any facts on which claims may legitimately or reasonably be
hereafter made against a Seller and relating to any of the Management Rights.

 

2.5.                              Calculation of
Management Fees.  Each Seller acknowledges that the Initial Purchase Price
for the Management Rights was determined by multiplying the revenues of the
Sellers derived from the Management Rights in the Existing Center LLCs for the
twelve month period ended December 31, 2004, times three and one-half
(3.5), plus an additional one million dollars ($1,000,000) as consideration for
the Management Rights in the Developing Center LLCs.  The revenues of the Sellers derived from the
Management Rights during the twelve month periods ended December 31, 2003
and 2004 were $1,424,180.68 and $1,392,087.78 respectively.

 

2.6.                              Court Orders, Decrees and Compliance with Laws.  There is not
outstanding or, to the Company’s or any Owners’ knowledge, threatened, any
order, writ, injunction or decree or any court, governmental agency or
arbitration tribunal against or affecting the Company, the Management
Rights.  The Company is in compliance
with all applicable federal, state and local laws, regulations and
administrative orders, except where noncompliance therewith would not have an
adverse effect on the Company or the Management Rights, and has received no
unresolved notices of alleged violations thereof.  There are no proceedings against the Company
and, to each Owners’ and the Company’s knowledge, no governmental authority is
currently conducting an investigation and no such investigation or proceeding
is being threatened.

 

2.7.                              No Finders or Brokers.  Neither the Company nor any Owner has engaged
any finder or broker in connection with the transactions contemplated
hereunder.

 

2.8                                 Licenses.  Except as set forth on Schedule 2.8,
no licenses, permits or approvals have been needed and/or have been required by
law for Sellers to exercise the Management Rights or to discharge the
obligations associated therewith.

 

2.9                                 No Untrue or
Inaccurate Representation or Warranty.  No representation or warranty by Owners or
the Company set forth in this Agreement contains or will contain any untrue
statement of fact, or omits or will omit to state a fact necessary to make the
statements therein not misleading.

 

III. 
REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and
warrants to the Company and the Owners as follows:

 

3.1.                              Organization
and Standing.  Purchaser
is a corporation duly organized, validly existing and in good standing under
the laws of the State of Tennessee and has full corporate power and authority
to conduct its business as now being conducted and is duly qualified to do
business in each jurisdiction in which the nature of its property or business
requires.

 

3.2.                              Authorization
and Binding Effect.  Purchaser
has all necessary authority and corporate power to execute and deliver this
Agreement and consummate the transactions contemplated hereby and has taken all
action required to be taken by or on the part of Purchaser to authorize the
execution, delivery and performance of this Agreement.  This Agreement constitutes a valid and
binding agreement enforceable against Purchaser in accordance with its
terms.  The execution of this Agreement
by Purchaser, the performance by Purchaser of its obligations hereunder and the
consummation of the transaction contemplated hereby by Purchaser will not
require any consent, approval or notice under, or violate, breach, be in
conflict with or constitute a default (or an event that, with notice or lapse
of time or both, would constitute a default) under, or permit termination of,
or result in the creation or imposition of any lien upon any properties, assets
or business of Purchaser under any note, bond, indenture, mortgage, deed of
trust, lease, franchise, permit, authorization, license, contract, instrument
or other agreement or 

 

7

 

commitment or any order, judgment or decree
to which Purchaser is a party or by which Purchaser or any of its assets or
properties is bound or encumbered, except as indicated on Schedule 3.2
hereof.  Assuming the accuracy of the
representations in Section 2.2 hereof, no notice to, filing or
registration with or authorization, consent or approval of any public body or
governmental or regulatory authority is necessary for the consummation by
Purchaser of the transaction contemplated by this Agreement, except as
indicated on Schedule 3.2 hereto.

 

3.3.                              Ownership.  Purchaser is a wholly-owned direct or
indirect subsidiary of SARC, which is a wholly owned subsidiary of Symbion, Inc.,
a Delaware corporation.

 

3.4.                              No Finders or
Brokers.  Purchaser has not engaged any
finder or broker in connection with the transactions contemplated hereunder.

 

3.5.                              No Untrue or
Inaccurate Representation or Warranty.  No representation or warranty by Purchaser
set forth in this Agreement contains or will contain any untrue statement of
fact, or omits or will omit to state a fact necessary to make the statements
therein not misleading.

 

IV.  COVENANTS OF PURCHASER

 

4.1                                 Best Efforts.  Purchaser hereby covenants and agrees to take
all necessary corporate action and to use its reasonable best efforts to obtain
all consents and approvals required to carry out the transactions contemplated
herein and to satisfy the conditions specified herein.
Between the date hereof and the Closing Date, Purchaser will use reasonable
efforts to keep the representations and warranties contained in Article III
hereof true and correct at and as of the Closing Date (except for changes
contemplated, permitted or required by this Agreement) and so that the
conditions to be satisfied by Purchaser at the Closing shall have been
satisfied

 

4.2.                              Notification of
Certain Matters.  Until
the Closing Date, Purchaser promptly advise the Sellers in writing of (i) any
change or event that would cause any condition to closing in Article VI or
VII to be unable to be satisfied, (ii) any notice or other communication
from any Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement and (iii) the
existence of any matter arising or discovered which would have been required to
be set forth or described in a disclosure schedule delivered pursuant to Article III
of this Agreement.  Purchaser shall
promptly notify the Sellers of any action, suit or proceeding that shall be
instituted or threatened against Purchaser to restrain, prohibit or otherwise
challenge the legality of any transaction contemplated by this Agreement.

 

V.  COVENANTS OF SELLERS

 

5.1.                              Best Efforts.  Each Owner and the Company shall take all
necessary action and use reasonable best efforts to obtain all consents and
approvals required to carry out the transactions contemplated herein and to
satisfy the conditions specified herein.

 

5.2.                              Access and
Information.  Between
the date hereof and the Closing, the Sellers shall cooperate fully in the
providing Purchaser full access to all records of the Centers and any Seller,
and Owners shall confer on a regular and frequent basis with one or more
representatives of Purchaser to report material operational matters of the
Centers and to report the general status of ongoing operations of the
Centers.  Owners shall notify Purchaser
of any material adverse change in the financial position, earnings or business
of the Company
after the date hereof and prior to the
Closing and any unexpected emergency or other unanticipated change in the
business of the Company and of any governmental complaints, investigations or
hearings or adjudicatory proceedings (or communications indicating that the

 

8

 

same
may be contemplated) or of any other matter which may be material to the
Company and shall keep Purchaser reasonably informed of such events.

 

5.3.                              Conduct of
Business.  Between
the date hereof and the Closing Date, except as contemplated by the
transactions completed by the Membership Interest Purchase Agreement and
hereunder, or otherwise approved by Purchaser in its sole discretion, the
Sellers shall
conduct their business insofar as it is
related to the Management Rights only in the ordinary course thereof consistent
with past practice and use reasonable efforts to keep the representations and
warranties contained in Article II hereof true and correct at and as of
the Closing Date (except for changes contemplated, permitted or required by
this Agreement) and so that the conditions to be satisfied by the Sellers at
the Closing shall have been satisfied.

 

5.4.                              Notification of
Certain Matters.  Until
the Closing Date, the Sellers shall promptly advise Purchaser in writing of (i) any
change or event that would cause any condition to closing in Article VI or
VII to be unable to be satisfied, (ii) any notice or other communication
from any Person alleging that the consent of such Person is or may be required
in connection with the transactions contemplated by this Agreement, and (iii) the
existence of any matter arising or discovered which would have been required to
be set forth or described in a disclosure schedule delivered pursuant to Article II
of this Agreement.  Each Seller shall
promptly notify Purchaser of any action, suit or proceeding that shall be
instituted or threatened against such Seller to restrain, prohibit or otherwise
challenge the legality of any transaction contemplated by this Agreement.

 

5.5.                              Exclusivity .  During the period from the date of this
Agreement until its termination in accordance with Article IX hereof, each
Owner and the Company shall not, and will cause each of its and their
respective agents, employees, and affiliates to not, except as expressly
contemplated herein, directly or indirectly, initiate, encourage, conduct or
hold discussions with any corporation, partnership, person or other entity
(other than Purchaser and its Affiliates) (a “Third Party”) concerning:

 

(a)                                  a purchase,
affiliation, joint venture or lease of all, or a material part of, the
Management Rights, the Company or any Center by a Third Party;

 

(b)                                 the management of any
Center by a Third Party;

 

(c)                                  the transfer by any
Seller of any of its ownership in the Company, the Management Rights or the
Centers to a Third Party; or

 

(d)                                 the issuance by the
Company of any debt, equity or hybrid securities.

 

If
an Owner or the Company shall receive any unsolicited offer or correspondence
relating to a transaction of the type described in this Section 5.5, such
Owner or the Company, as the case may be, shall promptly notify Purchaser of
any such transaction or negotiations and disclose the terms of any such
proposal.

 

5.6.                              Acknowledgement
of Reliance and Inducement. 
The Sellers acknowledge and agree that their execution, delivery and
performance of the Consulting Agreement, and specifically the covenants and
obligations set forth in Article IV thereof, were a material inducement
for the affiliates of Manager to enter into and to consummation the
transactions contemplated by this Agreement and the MIPA, and Purchaser would
not have entered into or consummated the transactions contemplated by this
Agreement and the MIPA unless the Sellers had agreed to the provisions of Article IV
of the Consulting Agreement.  This
acknowledgement is not intended to imply or support any increased damages
(beyond those 

 

9

 

specified herein and/or in the MIPA) for
any breach of this Agreement, nor shall it be used for such purpose.

 

VI.  CONDITIONS TO CLOSING BY
PURCHASER

 

Except as may be
waived by Purchaser, the obligations of Purchaser to purchase the Management
Rights and to consummate the transactions contemplated hereby on the Closing
Date shall be subject to the satisfaction on or prior to the Closing Date of
the following conditions:

 

6.1.                              Compliance.  All of
the representations and warranties of the Company and Owners contained in Article II
of this Agreement shall be true as of the date of this Agreement and as of the
time of the Closing, except as would not individually or in the aggregate have
a material adverse effect on the Company, the Business or the results of
operations or financial condition of any Center and the Company and the Owners
shall have performed or complied with all covenants and conditions required by
this Agreement to be performed or complied with by it prior to or at the
Closing, except for noncompliance which would not individually or in the
aggregate have a material adverse effect on the Company, the Business or the
results of operations or financial condition of any Center.  Purchaser shall have been furnished a
certificate dated the Closing Date and signed by an Owner or authorized
representative of the Company to the foregoing effect.

 

6.2.                              Consents, Authorizations, Etc.  All necessary licenses, certifications,
permits and approvals from federal, state and local governmental units for the
transactions contemplated hereby shall have been issued to the Company in form
and substance reasonably satisfactory to Purchaser.

 

6.3.                              No Action or Proceeding. 
No action or proceeding shall have been brought or threatened before any
court or administrative agency to prevent the consummation of, or to seek
damages in a material amount by reason of, the transactions contemplated
hereby, and no governmental authority shall have asserted that these
transactions constitute a violation of law or give rise to liability on the
part of Purchaser or the Company.

 

6.4.                              Good Standing Certificate. 
Owners shall have delivered to Purchaser a good standing certificate
issued with respect to the Company, issued by the Secretary of State of the
State of California, dated as of a date that is not more than 15 days prior to
the Closing Date.

 

6.5.                              No Material Adverse Effect. 
The operations of the Company shall have been conducted in the ordinary
course of business, consistent with past practice, and from December 31,
2004 until the Closing, no event shall have occurred or have been threatened,
which has or would have a material and adverse effect upon the operations of
the Company, the Business or their respective prospects; and none of the
Company and the Assets shall have sustained any loss or damage, whether or not
insured, that affects materially and adversely the value of the Management
Rights.

 

6.6                                 Membership Interest Purchase Agreement
Closing.  The “Closing” under the Membership Interest
Purchase Agreement shall have occurred.

 

6.7                                 Consulting Agreement. 
The Purchaser shall have executed and delivered to the Company the
Consulting Agreement, in the form attached hereto as Exhibit 6.7 (the “Consulting
Agreement”).

 

6.8                                 Assignment Agreement. 
Each Seller shall have delivered to the Purchaser a duly executed
Assignment.

 

6.9                                 Closing
Certificate.  At the Closing, Purchaser shall have received
copies of the

 

10

 

following, in each
case certified as of the Closing Date by the managing members of the Company:

 

(a)                                  resolutions of the members of the Company
authorizing the execution, delivery and performance of this Agreement and the
other agreements that the Company is required to execute and deliver pursuant
to the terms of this Agreement; and

 

(b)                                 the signature and incumbency of the
managing members of the Company authorized to execute and deliver this
Agreement and the other agreements and certificates that the Company is
required to deliver on or before the Closing Date pursuant to this Agreement.

 

6.10.                        Opinion of Counsel.  Purchaser
shall have received from counsel to Sellers an opinion in form and substance as
set forth in Exhibit 6.10 attached to this Agreement, addressed to
Purchaser and dated as of the Closing Date.

 

6.11.                        Waiver of Conditions. 
Purchaser may waive any condition of this Article VI to the extent
permitted by applicable law.  Such waiver
shall not affect Purchaser’s remedies under this Agreement with respect to the
waived condition, or otherwise.

 

VII.  CONDITIONS TO CLOSING BY
THE COMPANY

 

Except as may be
waived in writing by Owners and the Company, the obligations of the Company and
the Owners to consummate the transactions contemplated hereby on the Closing
Date shall be subject to the satisfaction on or prior to the Closing Date of
the following conditions:

 

7.1.                              Compliance.  All of
the representations and warranties made by Purchaser contained in Article III
of this Agreement shall be true as of the date of this Agreement and as of the
time of Closing, except as would not individually or in the aggregate have a
material adverse effect on Purchaser’s ability to consummate the transactions
contemplated by this Agreement, and Purchaser shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing, except for noncompliance which
would not individually or in the aggregate have a material adverse effect on
Purchaser’s ability to consummate the transactions contemplated by this
Agreement.  The Sellers shall have been
furnished with a certificate, dated the Closing Date, of a duly authorized
officer of Purchaser to the foregoing effect.

 

7.2.                              Secretary’s Certificate. 
At the Closing, the Sellers shall have received copies of the following,
in each case certified as of the Closing Date by a Secretary or an Assistant
Secretary of Purchaser:

 

(a)                                  resolutions of the board of directors of
Purchaser’s authorizing the execution, delivery and performance of this
Agreement and the other agreements that Purchaser is required to execute and
deliver pursuant to the terms of this Agreement; and

 

(b)                                 the signature and incumbency of the
officers of Purchaser authorized to execute and deliver this Agreement and the
other agreements and certificates that Purchaser is required to deliver on or
before the Closing Date pursuant to this Agreement.

 

7.3.                              Consent, Authorizations, Etc. All necessary consents, authorizations,
licenses, certifications, permits and approvals from federal, state and local
governmental units for the transactions contemplated hereby, and for continued
operation of the Business as an ambulatory surgery center following the
consummation of the transactions contemplated hereby, shall have been issued to
the Company in form and substance reasonably satisfactory to Owners.

 

11

 

7.4.                              No Action or Proceeding. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation of, or to seek damages in a material amount by reason of, the
transactions contemplated hereby, and no governmental authority shall have
asserted that these transactions constitute a violation of law or give rise to
liability on the part of Owners.

 

7.5.                              Good Standing Certificate. Purchaser shall have delivered to
Owners a good standing certificate issued with respect to Purchaser by the
Secretary of the State of Tennessee.  Such
good standing certificate shall be dated as of a date that is not more than 15
days prior to the Closing Date.

 

7.6.                              Membership Interest Purchase Agreement
Closing.  The “Closing” under the Membership Interest
Purchase Agreement shall have occurred.

 

7.7.                              Consulting Agreement. 
The Company shall have executed and delivered to Purchaser the
Consulting Agreement.

 

7.8.                              Purchase Price. 
The Sellers shall have received the Initial Purchase Price (less the AH
Escrow Amount) and the Escrow Agent shall have received the AH Escrow Amount.

 

7.9                                 Opinion of Counsel.  The
Sellers shall have received from counsel to Purchaser an opinion in form and
substance as set forth in Exhibit 7.9 attached to this Agreement,
addressed to the Sellers and dated as of the Closing Date.

 

7.10.                        Waiver of Conditions. 
Owners and the Company may waive any conditions of this Article VII
to the extent permitted by applicable law. 
Such waiver shall not affect Owners’ or the Company’s remedies under
this Agreement with respect to the waived condition, or otherwise.

 

VIII.  INDEMNIFICATION

 

The Parties acknowledge and agree that the provisions
of Article VIII of the MIPA shall govern and control all indemnification
for breaches of the reps, warranties, and covenants contained herein.  Except for remedies of injunctive and
provisional relief, if the Closing occurs, Article VIII of the MIPA shall
be the sole and exclusive remedy for breach of, or inaccuracy in, any
representation, warranty, or covenant contained herein, or otherwise in respect
of the transactions contemplated hereby.

 

IX.  TERMINATION

 

9.1.                              Termination
Events. This
Agreement may be terminated and the transaction abandoned at any time prior to
the Closing Date as follows:

 

(a)                                  By the mutual written consent of
Purchasers and the Owners;

 

(b)                                 By the Owners (acting together) or
Purchasers if the Closing has not occurred by August 31, 2005.

 

(c)                                  By Purchasers if there has been a
material violation or breach of any of the Sellers’ covenants contained in this
Agreement which has not been waived by Purchasers in writing;

 

12

 

(d)                                 By the Owners, if there has been a
material violation or breach of any of the Purchaser’s covenants contained in
this Agreement which has not been waived by Owners in writing.

 

9.2.                              Notice of
Termination.  In the
event of such termination by either Purchaser or Owners pursuant to Section 9.1
hereof, written notice shall forthwith be given to the other party or parties
hereto.

 

9.3.                              Consequences of
Termination.  In the event
this Agreement is terminated as provided in Section 9.1 above, (a) Purchaser
shall deliver to Owners all documents (and copies thereof in its possession)
concerning the Company previously delivered by Owners or the Company to
Purchaser; and (b) none of the parties hereto nor any of their respective
shareholders, directors, officers, agents or consultants shall have any
liability to the other party for costs, expenses, loss of anticipated profits,
consequential damages or otherwise, except for any intentional breach of any of
the provisions of this Agreement.

 

X. 
MISCELLANEOUS

 

10.1.                        Schedules and Other
Instruments.  Each
Schedule and Exhibit to this Agreement shall be considered a part hereof
as if set forth herein in full.

 

10.2.                        Additional Assurances.  The provisions of this Agreement shall be
self-operative and shall not require further agreement by the Parties except as
may be herein specifically provided to the contrary; provided, however, at the
reasonable request and expense of a Party, the other Party or Parties shall
execute such additional instruments and take such additional actions as the
requesting Party may deem necessary to effectuate this Agreement.  In addition and from time to time after Closing,
Owners and the Company shall execute and deliver such other instruments of
conveyance and transfer, and take such other actions as Purchaser reasonably
may request, to effectively convey and transfer full right, title and interest
to, vest in, and place Purchaser in legal, equitable and actual possession of
the Management Rights.  Owners and the
Company shall also furnish Purchaser with such information and documents in
that Party’s possession or under that Party’s control, or which Owners and the
Company can execute or cause to be executed, as will enable Purchaser to
prosecute any and all petitions, applications, claims and demands relating to
or constituting a part of the Management Rights. Additionally, each Party
hereto shall cooperate with one another and use their respective reasonable efforts
to have their respective present directors, officers and employees cooperate
with one another on and after Closing in furnishing information, evidence,
testimony and other assistance in connection with any action, proceeding,
arrangement or dispute of any nature with respect to matters pertaining to all
periods prior to Closing in respect of the items subject to this Agreement,
provided that any Party hereto will reimburse the other Parties hereto for all
costs and expenses incurred by the other Parties hereto in connection
therewith.

 

10.3.                        Consented Assignment. 
Anything contained herein to the contrary notwithstanding, this
Agreement shall not constitute an agreement to assign any claim, right,
contract, license, lease, commitment, sales order or purchase order if an
attempted assignment thereof without the consent of the other Party thereto
would constitute a breach thereof or in any material way affect the rights of
Owners and the Company, as appropriate, thereunder, unless such consent is
obtained.  If such consent is not
obtained, or if an attempted assignment would be ineffective or would
materially affect the rights thereunder of Owners and the Company so that
Purchaser would not in fact receive all such rights, the Parties shall
cooperate in any reasonable arrangement designed to provide for the Parties the
benefits under any such claim, right, contract, license, lease, commitment,
sales order or purchase order, including, without limitation, enforcement of
any and all rights of Owners and the Company, against the other party or
parties thereto arising out of the breach or cancellation by such other party
or otherwise.

 

13

 

10.4.                        Legal Fees and Costs.  In the event a Party elects to incur legal
expenses to enforce or interpret any provision of this Agreement by judicial
proceedings, the prevailing Party will be entitled to recover such legal
expenses, including, without limitation, reasonable attorney’s fees, costs and
necessary disbursements at all court levels, in addition to any other relief to
which such Party shall be entitled.

 

10.5.                        Choice of Law and Venue.  The Parties agree that this Agreement shall
be governed by and construed in accordance with the laws of the State of
California, without reference to its conflicts of law provisions. The Parties
hereto hereby designate all courts of record sitting in Los Angeles County,
California, both state and federal, as the exclusive forums where any action,
suit or proceeding in respect of or arising out of this Agreement, or the
transactions contemplated by this Agreement shall be prosecuted as to all
Parties, their successors and assigns, and by the foregoing designations the
Parties hereto consent to the exclusive jurisdiction and venue of such courts.

 

10.6.                        Benefit/Assignment.  Subject to provisions herein to the contrary,
this Agreement shall inure to the benefit of and be binding upon the Parties
hereto and their respective legal representatives, successors and assigns; provided,
however, that no Party may assign this Agreement without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld; provided, further, however, that any Party may,
without the prior written consent of the other Party, assign its rights and
delegate its duties hereunder to one or more of its affiliates as long as such
assignment will not relieve the assigning Party of its obligations hereunder.
This Agreement is intended solely for the benefit of the Parties hereto and is
not intended to, and shall not, create any enforceable third party beneficiary
rights.

 

10.7.                        Cost of Transaction.  Except as otherwise provided herein, whether
or not the transactions contemplated hereby shall be consummated, the Parties
agree as follows:  (i) Owners and the
Company will pay the fees, expenses, and disbursements of Owners and the
Company and their agents, representatives, accountants, and counsel incurred in
connection with the subject matter hereof and any amendments hereto; and (ii) Purchaser
shall pay the fees, expenses and disbursements of Purchaser and its agents,
representatives, accountants and counsel incurred in connection with the
subject matter hereof and any amendments hereto.

 

10.8.                        Confidentiality.

 

(a)                                  The information, documents
and instruments delivered to Purchaser by Owners and the Company or their
agents and the information, documents and instruments delivered to Owners and
the Company by Purchaser or its respective agents are of a confidential and
proprietary nature.  Each of the Parties hereto
agrees that both prior and subsequent to the Closing it will maintain the
confidentiality of all such confidential information, documents or instruments
delivered to it by each of the other Parties hereto or their agents in
connection with the negotiation of this Agreement or in compliance with the
terms, conditions and covenants hereof and will only disclose such information,
documents and instruments to its duly authorized officers, directors,
representatives and agents.  Each of the
Parties hereto further agrees that if the transactions contemplated hereby are
not consummated, it will return all such documents and instruments and all
copies thereof in its possession to the other Party to this Agreement.  Each of the Parties hereto recognizes that any
breach of this Section would result in irreparable harm to the other
Parties to this Agreement and their affiliates and that therefore each of them
shall be entitled to an injunction to prohibit any such breach or anticipated
breach, without the necessity of posting a bond, cash or otherwise, in addition
to all of their other legal and equitable remedies.  Nothing in this Section 10.8, however,
shall prohibit the use of such confidential information, documents or
information for such governmental filings as in the reasonable opinion of
Owners’ counsel or Purchaser’s counsel are required by law or governmental
regulations, provided that reasonable notice is provided to the other Parties.

 

14

 

(b)                                 The Parties hereto agree that the terms
and conditions of this Agreement, and all other agreements and instruments
executed and delivered by the respective Parties in connection with this
Agreement (the “Transaction Documents”) shall remain confidential.  Neither Purchaser nor Owners and the Company
nor their respective agents and representatives shall distribute the
Transaction Documents or any drafts thereof, or any part thereof, to any third
party unless required by law to do so or in connection with the required approvals
by the LLCs.

 

10.9.                        Public Announcements.  The Sellers agree that they shall not
release, publish or otherwise make available to the public in any manner
whatsoever any information or announcement regarding the transactions herein
contemplated without the prior written consent of the other Party, except for
information and filings reasonably necessary to be directed to governmental
agencies to fully and lawfully effect the transactions herein contemplated or
required in connection with securities and other laws.

 

10.10.                  Waiver of Breach.  The waiver by any Party of a breach or
violation of any provision of this Agreement shall not operate as, or be
construed to constitute, a waiver of any subsequent breach of the same or any
other provision hereof.

 

10.11.                  Notice.  Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be deemed effectively given
upon receipt or refusal to accept receipt when delivered personally, upon
facsimile (if the sending facsimile machine prints confirmation of receipt by
the receiving machine and notice is given by other means permitted by this Section within
one business day thereafter) or the next Business Day when sent by overnight
courier, with delivery prepaid thereon and overnight delivery specified, or
five days after being deposited in the United States mail, with postage prepaid
thereon, or certified or registered mail, return receipt requested, addressed
as follows:

 

	
  Sellers:

  	
  To the addresses set forth on the signature page.

  
	
   

  	
   

  
	
  With a simultaneous

  	
  Sheppard, Mullin, Richter & Hampton LLP

  
	
  copy to:

  	
  333 South Hope Street, 48th Floor

  
	
   

  	
  Los Angeles, California 90071

  
	
   

  	
  Attention: Lawrence M. Braun

  
	
   

  	
   

  
	
  and to

  	
  Guth | Christopher LLP

  
	
   

  	
  10866 Wilshire Blvd, Suite 1250

  
	
   

  	
  Los Angeles, California 90024

  
	
   

  	
  Attention: Theodore E. Guth

  
	
   

  	
   

  
	
  Purchaser
  or SARC:

  	
  c/o
  Symbion, Inc.

  
	
   

  	
  40
  Burton Hills Boulevard, Suite 500

  
	
   

  	
  Nashville,
  Tennessee 37215

  
	
   

  	
  Attention:
  President

  
	
   

  	
   

  
	
  With a simultaneous

  	
  Waller Lansden Dortch & Davis, PLLC

  
	
  copy to:

  	
  511 Union Street, Suite 2700

  
	
   

  	
  Nashville, Tennessee 37219-1760

  
	
   

  	
  Attention:
  Joseph A. Sowell, III, Esq.

  

 

or
to such other address, and to the attention of such other person or officer as
any Party may designate, with copies thereof to the respective counsel thereof
as notified by such Party.

 

15

 

10.12.                  Severability.  In the event any provision of this Agreement
is held to be invalid, illegal or unenforceable for any reason and in any
respect, such invalidity, illegality, or unenforceability shall in no event
affect, prejudice or disturb the validity of the remainder of this Agreement,
which shall be and remain in full force and effect, enforceable in accordance
with its terms.

 

10.13.                  Gender and Number.  Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine
and neuter, and the number of all words herein shall include the singular and
plural.

 

10.14.                  Divisions and Headings.  The divisions of this Agreement into sections
and subsections and the use of captions and headings in connection therewith
are solely for convenience and shall have no legal effect in construing the
provisions of this Agreement.

 

10.15.                  Survival.  All of the covenants and agreements made by
the Parties in this Agreement or pursuant hereto in any certificate, instrument
or document which are to be performed after closing shall survive the
consummation of the transactions described herein and shall not be deemed
merged into any instruments or agreements delivered at Closing or thereafter,
and no other covenants and agreements shall survive the Closing but shall be
deemed merge into any instruments or agreements delivered at Closing.

 

10.16.                  Entire Agreement/Amendment.  This Agreement supersedes all previous
contracts, and constitutes the entire agreement of whatsoever kind or nature
existing between or among the Parties respecting the within subject matter and
no Party shall be entitled to benefits other than those specified herein.  As between or among the Parties, no oral
statements or prior written material not specifically incorporated herein shall
be of any force and effect.  The Parties
specifically acknowledge that in entering into and executing this Agreement,
the Parties rely solely upon the representations and agreements contained in
this Agreement and no others.  All prior
representations or agreements, whether written or verbal, not expressly
incorporated herein are superseded and no changes in or additions to this
Agreement shall be recognized unless and until made in writing and signed by
all Parties hereto.  This Agreement may
be executed in two or more counterparts, each and all of which shall be deemed
an original and all of which together shall constitute but one and the same
instrument.

 

10.17.                  Waiver of Jury Trial.  EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.  THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO
DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT NOT LIMITED TO,
THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN, COMMON LAW OR ANY
APPLICABLE STATUTE OR REGULATIONS.  EACH
PARTY HERETO ACKNOWLEDGES THAT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHTS
TO DEMAND TRIAL BY JURY.

 

10.18.                  Tax Advice and Reliance.  Except as expressly provided in this
Agreement, none of the Parties (nor any of the Parties’ respective counsel,
accountants or other representatives) has made or is making any representations
to any other Party (or to any other Party’s counsel, accountants or other
representatives) concerning the consequences of the transactions contemplated
hereby under applicable tax laws. Each Party has relied solely upon the tax
advice of its own employees or of representatives engaged by such Party and not
on any such advice provided by any other Party hereto.

 

10.19.                  No Rescission.  No Party shall be entitled to rescind the
transactions contemplated hereby by virtue of any failure of any Party’s
representations and warranties herein to have been true or any failure by any
Party to perform its obligations hereunder.

 

16

 

10.20.                  Counterparts.  This Agreement may be executed in multiple
counterparts (including by means of telecopied signature pages), any one of
which need not contain the signatures of more than one Party, each of which
shall be enforceable against the Parties executing such counterparts, and all
of which together shall constitute one instrument.

 

IN WITNESS WHEREOF,
the parties hereto have duly executed this Agreement as of the day and year
first above written.

 

	
   

  	
  PARTHENON MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Randhir S. Tuli

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Andrew A. Brooks, M.D.

  
	
   

  	
  Andrew A. Brooks, M.D.

  
	
   

  	
   

  
	
   

  	
  14159 Beresford Dr.

  
	
   

  	
  Beverly Hills, California 90210

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Randhir S. Tuli

  
	
   

  	
  Randhir S. Tuli

  
	
   

  	
   

  
	
   

  	
  19248 Allandale Dr.

  
	
   

  	
  Tarzana, California 91356

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices

  
	
   

  	
   

  
	
   

  	
  SYMBIONARC MANAGEMENT SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ William Webb

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Chief Development Officer and Senior Vice President

  

 

The undersigned joins herein solely for the purposes
of Article VIII hereof.

 

SYMBION AMBULATORY RESOURCE CENTRES, INC.

 

	
  By:

  	
  /s/ William Webb

  	
   

  
	
   

  	
   

  	
   

  
	
  Name: 

  	
  William Webb

  	
   

  
	
   

  	
   

  	
   

  
	
  Title: 

  	
  Chief Development Officer and
  Senior Vice President 

  	
   

  

 

17

 

EXHIBIT 1.2

 

Form of Management Agreement

 

(Attached as Exhibit 6.9A to
the Purchase Agreement)

 

 

EXHIBIT 6.9A

 

FORM OF
MANAGEMENT AGREEMENT

 

THIS MANAGEMENT AGREEMENT
(this “Agreement”) is made and entered into as of the
         day of
                          ,
2005, by and between SYMBIONARC MANAGEMENT
SERVICES, INC., a Tennessee corporation (the “Manager”), and [[1]],
a California limited liability company (the “Owner”).

 

RECITALS:

 

WHEREAS, Owner owns and operates, directly or
through a partnership of which it is the general partner, the ambulatory
surgery center(s) located at the address identified on Schedule A
hereto (the “Center”).

 

WHEREAS, the Manager has certain expertise in
the management of ambulatory surgery centers; and

 

WHEREAS, the Owner and Manager each desire
that the Owner engage the Manager to assist with the management of the Center
and to provide certain non-medical services to the Center, pursuant to the
terms of this Agreement.

 

NOW, THEREFORE, in consideration of the
foregoing premises, which are hereby incorporated into this Agreement as an
integral part hereof and not as mere recitals hereto, and of the promises and
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

 

I.                                         GENERAL

 

1.1.                              As
of the Effective Date, as defined in Section 2.1 below, the Owner hereby
retains the Manager as the sole and exclusive manager of the Center, for the
purpose of rendering management, administration and purchasing services and
support, and other management support needed for the operation of the Center on
the basis hereafter set forth, subject to the written policies established by
the Owner, which policies shall be consistent with applicable state and federal
law, and subject to the terms, conditions, authorizations and limitations set
forth in this Agreement.

 

1.2.                              The
Manager shall perform all of the services described in Article III and Article IV
hereof for the account of and as agent of the Owner. All such services shall be
rendered using the Manager’s commercially reasonable efforts and subject to the
control of the Owner, which shall have final authority in all matters relating
to the Center’s operations.

 

1.3.                              For
the term hereof, the Owner hereby irrevocably appoints the Manager to be the
Owner’s attorney-in-fact with full power on the Owner’s behalf and in its name,
or in the name of the Center, to enter into any and all contracts relating to
the affairs of the Center so long as such contracts are not with affiliates of
Manager, unless otherwise permitted under that certain Amended and Restated
Operating Agreement of the Owner, effective as of the date hereof. The Manager
may incur, in the name of the Owner or Center, any obligation for repairs,
equipment, additions or betterments to the Center, as the Manager reasonably
deems necessary. The Owner agrees to execute a limited power of attorney and/or
any other instrument reasonably requested by the Manager to evidence such
appointment.

 

 

1.4                                 The
Owner operates a licensed surgical facility and shall have all authority to act
in accordance with applicable law. The Manager shall have no authority
whatsoever with respect to the actual rendition of surgical and/or other
medical and professional services at the Center.

 

1.5.                              The
parties hereby acknowledge and agree that no benefits to the parties hereunder
require or are in any way contingent upon the admission, recommendation,
referral or any other arrangement for the provision of any item or service
offered by the Owner or any of its affiliates, to any patients of the Center,
or the Owner’s employees or agents. The Manager shall neither have nor exercise
any control or direction over the number, type, or recipient of patient
referrals made by physicians, and nothing in this Agreement shall be construed
as directing or influencing such referrals. None of the Manager’s activities
contemplated under this Agreement or otherwise shall constitute obligations of
the Manager to generate patient flow or business to the Center. Further, there
is absolutely no intent for the Manager in any manner to be compensated to
generate patients for the Center. Rather, the Owner has engaged the Manager to
manage the business aspects of the Center in order to enable the Owner to focus
on delivering the highest quality of patient care.

 

II.                                     TERM
AND TERMINATION

 

2.1.                              The
term of this Agreement shall commence as of the date first above written (the “Effective
Date”), and unless this Agreement is earlier terminated pursuant to the
provisions hereof, shall continue for a term of the greater of: (i) fifteen
(15) years, (ii) until any loans made by the Manager or an affiliate of
the Manager to the Owner have been paid, or (iii) until any liability of
the Manager or an affiliate of the Manager for any debt or obligation of the
Owner has been released. This Agreement shall automatically renew for two (2) additional
terms of five (5) years each, unless one party gives the other party one
hundred eighty (180) days’ prior written notice of termination before the
expiration of the then- current term. Nothing herein shall require the Manager
or any affiliate of the Manager to loan money to the Owner or otherwise become
liable for any debt or obligation of the Owner.

 

2.2.                              The
Owner shall have the right to terminate this Agreement upon the Manager’s
material breach of this Agreement. In the event termination is for an alleged
material breach by the Manager, the Owner shall provide the Manager written
notice of such material breach. Such notice shall describe in reasonable detail
the basis upon which the Owner believes such termination is justified and a
suggested method for curing such breach. Upon receipt of such notice, the
Manager shall have sixty (60) days during which to attempt to cure the material
breach under this Agreement, and upon such cure being effected, the Owner’s
right to terminate shall cease and this Agreement will continue in full force
and effect. Furthermore, if upon expiration of such cure period the Manager is
still diligently pursuing effectuation of such cure, or if the Manager has
diligently attempted to effect such a cure within such cure period but cannot
complete such cure because of the failure of a third party (such as a
governmental agency) to act within such period, then the Manager shall have a
reasonable time (not to exceed in any event an additional 180 days) beyond such
cure period to complete its cure of the alleged basis for the Owner’s election
to terminate. Failure of the Owner to deliver a notice of termination of breach
pursuant to this Section 2.2 shall not relieve the Manager of any
liability on account of the breach.

 

2.3.                              The
Manager shall have the right to terminate this Agreement upon the Owner’s
material breach of this Agreement. In the event termination is for an alleged
material breach by the Owner, the Manager shall provide the Owner written
notice of such alleged material breach. Such notice shall describe in detail
the basis upon which the Manager believes such termination is justified and a
suggested method for curing such breach. Upon receipt of such notice, the Owner
shall have the applicable cure period listed below during which to attempt to
cure any alleged default under this Agreement, and upon such cure being
effected, the Manager’s right to terminate shall cease and this Agreement will
continue in full force and effect. The cure periods for a breach of this
Agreement shall be as follows: (i) ten (10) days for the 

 

2

 

failure of the Owner to pay money hereunder, (ii) thirty
(30) days in the event that the Owner’s breach materially and adversely affects
patient safety and quality of care, and (iii) ninety (90) days for all
other breaches. Furthermore, if upon expiration of the applicable cure period
the Owner is still diligently pursuing effectuation of such cure, or if the
Owner has diligently attempted to effect such a cure within such cure period
but cannot complete such cure because of the failure of a third party (such as
a governmental agency) to act within such period, then the Owner shall have a
reasonable time beyond such cure period to complete its cure of the alleged
basis for the Manager’s election to terminate; provided, however, that this
extension of the applicable cure period shall only apply with respect to the
breaches described in items (ii) and (iii) directly above.
Notwithstanding the foregoing, the Manager shall have the right to suspend the
provision of services under this Agreement in the event that the Owner fails to
pay any of the compensation payable pursuant to Article V as and when due.
The Manager shall also have the right to terminate this Agreement by giving
written notice to the Owner if: (w) the Owner is suspended or prohibited
from participating in the Medicare or Medicaid programs or is excluded from
entering into health care provider agreements with any material portion of the
managed care or health care insurance industry and such suspension, prohibition
or exclusion is not rescinded within thirty (30) days following the
commencement thereof, (x) the Owner allows any physician to be or remain
on the Center’s medical staff who does not comply or no longer complies with
the requirements for membership on such medical staff, (y) the Owner
dissolves or liquidates, or (z) the Owner fails to pay any money owed
under any other arrangement between the Manager and Owner or between the Owner
and any third party.

 

2.4.                             If
either party shall appoint or consent to the appointment of a receiver, trustee
or liquidator of such party or of all or a substantial part of its assets, file
a voluntary petition in bankruptcy, make a general assignment for the benefit
of creditors, file a petition seeking reorganization or arrangements with
creditors or to take advantage of any insolvency law, or if an order, judgment
or decree shall be entered by any court of competent jurisdiction, on the
application of a creditor, adjudicating such party bankrupt or insolvent, and
such order, judgment or decree shall continue unstayed and in effect for any
period of ninety (90) days, then, in case of any such event, the term of this
Agreement shall terminate, at the option of the other party, upon written
notice to the first party.

 

2.5.                             Upon
termination of this Agreement, the Owner shall owe to the Manager the full
amount of any fees owing pursuant to the terms hereof, up through and including
the date of termination, and any sums of money owed by the Owner to the Manager
shall be paid immediately, prorated through the termination date. Upon
termination hereof, the Manager’s obligations to perform services hereunder shall
completely cease; provided, however, that the Owner and Manager shall perform
such matters as are necessary to wind up their activities under this Agreement
in an orderly manner. Each party shall have the right to pursue legal or
equitable relief, as may be available depending upon the circumstances of the
termination.

 

III.                                 MANAGEMENT
SERVICES

 

3.1.                             Subject
to the provisions of this Agreement, the Manager shall during the term hereof
provide the following services and assistance to the Owner in connection with
the operation of the Center:

 

(a)           Assisting
the Owner to maintain the accreditation of the Center (if the Center is
accredited) with the proper agencies and insurance companies, including JCAHO
or AAAHC;

 

(b)           Hiring
and providing certain non-physician personnel to perform services at the
Center, including the administrator of the Center, all as further described
below in Section 3.2;

 

(c)           Negotiating
reimbursement and fee payment methods, in coordination with the Owner, with the
appropriate third party payors and state and federal agencies;

 

3

 

(d)           Establishing
staffing schedules, wage structures and personnel policies for all
non-physician personnel;

 

(e)           Recommending
to the Owner patient charges for services provided by the Center;

 

(f)            Assisting
Owner in developing operating policies and procedures, and providing standard
operating manuals for operating and procedure rooms, provided Owner shall have
final authority to adopt and implement same;

 

(g)           Providing
standard formats for all charts, invoices, and other forms used in the
operation of the Center;

 

(h)           Assisting
the Owner in the Owner’s purchase, lease or disposition of all supplies and
equipment including information systems hardware and software used in the
operation of the Center;

 

(i)            Directing
the day-to-day non-medical operations of the Center to ensure the operations
are conducted in a businesslike manner;

 

(j)            Performing
all non-medical oversight responsibilities for the Owner;

 

(k)           Assisting
the Owner in the Owner’s negotiation or retention of contractual relationships
for anesthesia services, radiology services, and pathology services, as
appropriate; and

 

(l)            Assisting
the Center to operate in compliance with all laws and assisting the Center and
Owner to develop a comprehensive compliance policy and implement same.

 

3.2.                             The
Manager shall furnish to the Owner the services of all personnel reasonably
necessary for the effective operation of the Center, other than: (i) physicians
and (ii) any and all allied health professionals determined by the Manager
and the Owner to be most properly employed or contracted by the Owner for
purposes of payor requirements or applicable provisions of law. Consistent with
applicable laws, the Manager shall make all hiring, retention, and termination
decisions, determine compensation and staffing levels, individual work hours,
personnel policies, employee benefit programs, and the terms, conditions,
obligations and privileges of employment or retention for all personnel who are
employed or retained by the Manager and who provide services to the Owner. With
respect to any and all clinical personnel (meaning the personnel referenced in
items (i) and (ii) above) (collectively the “Clinical Personnel”)
providing services to, through or on behalf of the Owner, the Owner shall make
all hiring, retention, and termination decisions, determine compensation and
staffing levels, individual work hours, personnel policies, employee benefit
programs, and the terms, conditions, obligations and privileges of employment
or retention of such Clinical Personnel. Furthermore, the Owner shall have the
right and obligation to direct and supervise the delivery of clinical
assistance (if any) by any personnel furnished by the Manager. To the extent
(if any) that an employee of the Manager assists any Clinical Personnel in
performing clinical functions, such employee of the Manager shall be subject to
the professional direction and supervision of such Clinical Personnel with
respect to such assistance only, and in his or her performance of such clinical
functions, shall not be subject to any direction or control by the Manager,
except as may be specifically authorized by the Owner. However, the preceding
sentence does not in any way create an employment relationship between the
Owner and the Manager’s employee and does not in any way modify the employment
relationship between the Manager and such employee. The Owner shall be solely
responsible for the payment of its Clinical Personnel’s compensation and
benefits (if any), any applicable payroll taxes and all other taxes and charges
now or hereafter applicable to them.

 

4

 

IV.                                ACCOUNTING
AND BOOKKEEPING SERVICES

 

4.1.                             The
Manager agrees to perform the following accounting and bookkeeping services for
the Owner in the operation of the Center:

 

(a)           Receive
for and deposit in a bank account (the “Center Account”) as directed by the
Owner, separate from any monies of the Manager, all funds received from the
operation of the Center and supervise the disbursement of such funds for the
operation of the Center. The Center Account shall be in the Owner’s name and
sole custody without the Manager having the right to draft checks on such
account. The Owner and Manager will ensure that the Center Account is managed
in accordance with applicable law regarding the assignment and reassignment of
Medicare accounts receivable. In addition, the Manager, through its on-site
billing personnel, shall prepare bills for the Owner, with all billing in the
name of and on behalf of the Owner;

 

(b)           Maintain
the books of account, including all journals and ledgers, check register and
payroll records;

 

(c)           Post
all patient and other charges, including necessary analysis and corrections;

 

(d)           Establish
billing, receivables, credit and collection policies and procedures and oversee
such activity;

 

(e)           Process
vendors’ invoices and other accounts payable; prepare cheeks for such payables
and obtain the signature of the Owner’s authorized representatives;

 

(f)            Prepare
or contract for processing payroll checks from time sheet summaries prepared
under the Manager’s supervision including applicable tax deposits;

 

(g)           Contract
for preparation of the Owner’s tax returns provided that the fees paid to
independent accountants will be the responsibility of the Owner;

 

(h)           Prepare
monthly bank reconciliations;

 

(i)            Prepare
monthly and annual financial statements, including without limitation,
unaudited balance sheet, profit and loss statements and statement of cash flow,
the format of which shall be compatible with the information systems of the
Owner;

 

(j)            Conduct
meetings, no less than quarterly, or as otherwise necessary with the Owner’s
personnel, either telephonically or on-site as required; and

 

(k)           Respond
to patient complaints.

 

V.                                    FEE
FOR SERVICES

 

5.1.                             Commencing
upon the Effective Date of this Agreement, for each month during which the
Manager renders services in accordance herewith, the Owner shall pay the
Manager for such services a fee of [      ]
percent ([      ]%) [Note: for
Irvine, Arcadia and AH/TO, this will be: “a fee equal to the greater of (a) *
percent (*%) of Net Revenues (as hereinafter defined), and (b) $*; for
Beverly Hills it’s *%; for Encino it’s *%] of Net Revenues (as
hereinafter defined), payable monthly (the “Accrued Fee”); provided, however,
for purposes of the monthly payment of fees under this Article V, in no
event will actual fees paid to Manager in any month exceed
[      ] percent
([      ]%) [Note, this 

 

5

 

will be identical to the percentage used
above.] of actual cash receipts in such month (the “Cash
Payment”). In addition, upon termination of this Agreement, Owner shall pay
Manager an amount equal to the difference between the Accrued Fees less the
Cash Payment calculated over the term of this Agreement. “Net Revenues” shall
mean all of the gross revenues of the Owner calculated in accordance with GAAP
(as hereinafter defined), less contractual adjustments and bad debt
adjustments. “GAAP” means United States generally accepted accounting
principles and practices as in effect from time to time, applied consistently
by the Owner throughout the periods involved. A partial month will be prorated
based on a thirty (30) day period. On or before the tenth (10th) day of each
calendar month, the Owner shall deliver to the Manager the fee owed for the
immediately preceding calendar month. In the event of the termination or
expiration of this Agreement, the Manager shall be paid all earned and accrued
compensation provided for hereunder. Notwithstanding the foregoing, contractual
adjustments and had debt allowance shall be evaluated no less than monthly
based on actual experience to be applied to the current period with respect to
determining Manager’s fee.

 

5.2.                              The
Manager shall be reimbursed on a monthly basis for its direct expenses
reasonably incurred for the benefit of Owner in connection with the management
of the Center (it being agreed that where such expenses are also attributable
to other operations of the Manager unrelated to the Owner or the Center, they
shall be allocated among all such operations in a reasonable manner), including
(i) legal fees, consulting, and other professional fees incurred on behalf
of the Owner, (ii) the cost of all of the Manager’s personnel who are on
site at the Center and furnish day to day services to the Owner, (iii) the
cost of the Manager’s personnel who are not onsite, not regularly assigned to
provide services to the Owner and who provide specialized services (e.g.
off-site billing and coding consulting) to the Owner, and (iv) fees
related to monthly closing processes and reporting services provided to the
Owner by Manager’s Nashville-based closing team, and (v) other direct expenses
incurred on behalf of the Owner; including any of Manager’s out-of-pocket
expenses of Manager’s personnel who provide services of benefit to the Owner
but who are not on-site at the Center full-time incurred in connection with its
management of the Center, such as, without limitation, travel expenses such as
transportation, meals, hotels, Manager’s entertainment expenses (not salary)
related to Manager’s in-market personnel who are performing services for
purposes of developing the Center, etc. Subject to the applicable provisions
above, reimbursement shall not include salary and benefits of Manager’s
visiting personnel assigned to oversee the Center’s operations. Any
reimbursable expenses and unpaid fees due to matters outside the control of
Manager or its affiliate (e.g., financial or operating results, payor problems,
reimbursement rates, etc.) shall accrue interest at the lesser of eight (8%)
percent per annum or the highest rate allowed by law.

 

5.3.                              Owner
acknowledges that, pursuant to a Consulting Agreement, of even date herewith
(the “Consulting Agreement”) among Manager and the prior “Managing Members” of
the Owner (the “Consultants”), the Consultants are entitled to receive a
portion of the fees described under Section 5.1 as consideration for
certain services performed by the Consultants for the benefit of the Owner and
the Center, under the terms and conditions set forth in the Consulting
Agreement. At the request of the Manager (revocable at any time), Owner shall
remit directly to the Consultants that portion of the fees under Section 5.1
to which the Consultants are entitled (as calculated by the Manager) pursuant
to the Consulting Agreement, and the fees payable to the Manager shall be
reduced by the amount paid directly to the Consultants. In no event shall Owner
be required to pay in excess of the amount set forth in Section 5.1.

 

VI.                                INSURANCE

 

6.1.                              During
the term of this Agreement, the Owner and the Manager shall, at the Owner’s
sole cost and expense, obtain and maintain with commercial carriers reasonably
acceptable to the Manager (the Owner’s carriers are hereby deemed acceptable to
Manager) the following insurance coverage:

 

6

 

(a)           appropriate
workers’ compensation coverage for all personnel who are working at the Center
and who are employed by either the Owner or the Manager; and

 

(b)           professional,
casualty and comprehensive general liability insurance covering the Owner and
personnel working at the Center in such amounts, on such basis and upon such
terms and conditions as the Owner and the Manager deem appropriate; and

 

(c)           casualty
and comprehensive general liability insurance which shall insure against loss
of or physical damage to the Center and the furniture, fixtures and equipment
therein, under standard all-risk coverage (including but not limited to fire,
smoke, lightening, wind storm, explosion, vehicle damage, riot, civil
commotion, vandalism and malicious mischief) and shall also include damage due
to flood and earthquake unless waived by the Manager.

 

6.2.                             The
Manager shall be named an additional insured under all insurance policies
procured by the Owner hereunder. The right of the Manager to invoke the
protection of such policies shall be severable from and independent of the
Owner’s rights, and these policies shall not be terminable or non-renewable
except upon thirty (30) days’ written notice to the Manager. No later than
thirty (30) days following the execution of this Agreement and thirty (30) days
following the end of each policy year, the Owner shall give to the Manager a
copy of the endorsements naming the Manager an additional insured. Such
insurance policies shall contain endorsements which reflect the primary
liability of the Owner’s insurance carrier for all covered losses provided for
herein, notwithstanding any insurance which may be maintained by the Manager or
any affiliate of the Manager. The Owner hereby waives any right of contribution
with respect to the loss covered under such policies (or with respect to deductibles
thereunder) against the Manager or any of the Manager’s insurance carriers.

 

VII.                            DUTIES
AND RESPONSIBILITIES OF THE OWNER

 

7.1.                             The
Owner shall operate the Center on a full-time basis and, in conjunction with
the medical staff, shall be responsible for the medical care of the patients of
the Center and shall provide professional medical services to such patients in
a manner that is in accordance with the prevailing standards and practices in
the community and in compliance with all applicable laws and regulations. The
Owner shall establish clinical standards and oversee the performance of such
standards.

 

7.2.                             The
Owner shall admit physicians (the “Medical Staff Physicians”) to the medical
staff of the Center to render the surgical and other medical services at the
Center. The Owner shall ensure that each such Medical Staff Physician shall
maintain: (i) an unrestricted license to practice medicine in the State of
California, (ii) good standing with the medical board of the State of
California, (iii) a Federal Drug Enforcement Administration certificate, (iv) a
State of California controlled dangerous substance certificate without
restrictions, (v) such hospital medical staff memberships and clinical
privileges appropriate to his or her specialty, as determined by the Owner and
sufficient to meet the requirements of payors, (vi) his or her skills
through continuing education and training, (vii) professional liability
insurance for his or her specialty in such amounts as agreed upon by the
Manager and the Owner from time to time, and (viii) such other
requirements as are reasonably requested by the Center of its medical staff.

 

7.3.                             The
Owner, with the assistance of the Manager, may recruit members to the medical
staff of the Center and will carry out such administrative functions as may be
appropriate for such recruitment, including advertising for and identifying
potential candidates, examining and investigating the credentials of such
potential candidates, arranging interviews with such potential candidates, and
interviewing and making the ultimate decision as to whether to admit such
individual to the medical staff of the Center. Any expenses incurred in the
recruitment of medical staff to the Center shall be expenses of the Owner.

 

7

 

7.4.                              The
Owner shall ensure that at all times during the term, each Medical Staff
Physician complies with the bylaws of the medical staff and the rules and
regulations of the Center. The rendition of all medical services and the
supervision of all personnel rendering medical services at the Center shall be
the sole and exclusive responsibility of the Owner, acting in conjunction with
the Medical Staff Physicians.

 

7.5.                              Subject
to compliance with confidentiality and other applicable laws, if any
disciplinary actions or professional liability actions are initiated against
any Medical Staff Physician or any physician extender or other personnel of the
Center, the Owner shall promptly inform the Manager of such action and the underlying
facts and circumstances after the Owner becomes aware thereof.

 

7.6.                              The
Owner, with the assistance of Manager, shall comply with any and all federal,
state and local statutes, regulations, rules, orders or other requirements that
the Owner is responsible for undertaking which affect the Center and/or its
operations, including without limitation the Center’s billing, coding and
collection practices and systems. The Owner, with the assistance of Manager,
shall obtain and maintain all licenses and accreditations as are necessary for
the provision of medical and health care services and the operation of an
ambulatory surgery center.

 

7.7.                              With
respect to legal compliance issues, the Owner understands and agrees that the
Owner shall be solely responsible for complying with, and ensuring its
compliance with, all applicable federal and state laws, rules and
regulations, including without limitation, all Medicare, Medicaid, billing and
coding laws, rules and regulations related to the obligations of Owner hereunder.
Manager shall be responsible for complying with, and ensuring the Center’s
compliance with, all applicable federal and state laws, rules and
regulations with respect to those actions Manager is solely responsible for
undertaking pursuant to this Agreement. Although the Owner may consult with the
Manager regarding compliance issues, the parties hereby explicitly acknowledge
and agree that it shall be the Owner’s sole responsibility to comply with, and
to determine whether the Owner and the Center are in compliance with, any
applicable Medicare or Medicaid laws, rules or regulations or any other
applicable federal or state laws, rules or regulations.

 

7.8.                              The
Owner shall ensure that the Medical Staff Physicians participate in various
aspects of the managed care arrangements of the Center as required by the
applicable payor contracts. The professional services provided by the Center
and the medical staff shall at all times be provided in accordance with
applicable standards, laws and regulations applying to the medical profession.
The Center and the medical staff shall comply with all payor contracts.
Notwithstanding the foregoing, no physician shall be required to become a party
to any payor contract.

 

VIII.                        INDEPENDENT
CONTRACTOR STATUS

 

Notwithstanding any provision contained
herein to the contrary, each of the Owner and the Manager understand and agree
that the parties hereto intend to act and perform as independent contractors
and that therefore neither the Owner nor the Manager is an employee, partner,
joint venturer, or agent of the other. Nothing in this Agreement shall be
construed as placing the parties in a relationship of employer-employee,
partners, joint venturers, or principal-agent. Neither party shall have the
right to make any promises, warranties or representations, or to assume or
create any obligations, on behalf of the other party, except as otherwise
expressly provided herein. The Owner and Manager agree to be solely and
entirely responsible for their respective acts and for the acts of any of its
employees and agents.

 

IX.                                CONFIDENTIAL
INFORMATION

 

9.1.                              For
the purpose of this Agreement, the term “Manager Confidential Information”
shall include the following: (a) all documents and other materials
primarily developed by the Manager, including but 

 

8

 

not limited to, all memoranda, clinical
manuals, handbooks, production books, educational material and audio or visual
recordings primarily developed by the Manager which contain information
relating to the Operation of the Center or its programs (excluding written
materials distributed to patients in the operation of the Center as promotion
for the Center), (b) all methods, techniques and procedures primarily
developed by the Manager which are utilized in providing services to patients
in the Center and are not readily available through sources in the public
domain and (c) all trademarks, trade names, service marks, or protected
software of the Manager and their related data files. Additionally, the
specific items listed on Schedule 13 hereto, shall be Manager Confidential
Information. For purposes of this Agreement, the term “Owner Confidential
information” shall include the following: (i) financial information of the
Owner or the Center, (ii) medical records of patients receiving services
at the Center, (iii) data relating to patient care and outcomes (whether
individually identifiable with respect to any one patient or aggregated with
information relating to multiple patients), (iv) risk management records,
and (v) such other information that specifically pertains to the Owner and
is proprietary to the Owner. Notwithstanding anything herein to the contrary,
unless otherwise specified under applicable law, the Owner shall be deemed the
records owner for purposes of California law of all patient records at the
Center. The confidentiality of patient records is governed by the Health
Insurance Portability and Accountability Act (“HIPAA”) and the Business
Associate Agreement discussed in Section 11.2. To the extent of any
conflict between any of this Article IX, Section 11.2 and the
Business Associate Agreement, Section 11.2 shall control, then the
Business Associate Agreement, then this Article IX.

 

9.2.                              The
Owner acknowledges and agrees that the Manager Confidential Information is
owned by the Manager and has been disclosed to it in confidence and with the
understanding that it constitutes valuable business information developed by
the Manager at great expenditure of time, effort and money. The Owner agrees
that it shall not, without the express prior written consent of the Manager,
use the Manager Confidential information for any purpose other than the
performance or enforcement of this Agreement or the operation of the Center nor
allow anyone access to such except on a need to know basis. The Owner further
agrees to keep strictly confidential and hold in trust all Manager Confidential
Information and not disclose or reveal such information to any third party
without the express prior consent of the Manager or in connection with
enforcement of this Agreement. The Manager agrees that the Owner shall have a
non-exclusive, royalty-free right to use the Manager Confidential Information,
subject to the foregoing restrictions, during the term of this Agreement and
for up to twelve months (12) after the expiration or termination of this
Agreement as is reasonably needed to maintain patient quality standard until
such time as replacement materials that do not constitute Manager Confidential
Information may be created and implemented.

 

9.3.                              The
Manager acknowledges and agrees that the Owner Confidential Information is
owned by the Owner and has been disclosed to it in confidence and with the
understanding that it constitutes valuable business information developed by
the Owner at great expenditure of time, effort and money. The Manager agrees
that it shall not, without the express prior written consent of the Owner, use
the Owner Confidential Information for any purpose other than the performance
of this Agreement or the operation of the Center nor allow anyone access to
such except on a need to know basis. The Manager further agrees to keep
strictly confidential and hold in trust all Owner Confidential Information and
not disclose or reveal such information to any third party (other than the
affiliates of the Manager) without the express prior written consent of the
Owner or in connection with enforcement of this Agreement. In connection with
the foregoing, the Manager shall ensure that its affiliates also maintain the
confidentiality of the Owner Confidential Information in accordance with the
terms hereof.

 

9.4.                              If
the Owner or the Manager or any of their respective representatives are
requested by a person or entity to disclose the Manager Confidential Information
or the Owner Confidential Information, respectively, in any legal, quasi-legal
or administrative proceeding, the Owner or the Manager shall promptly notify
the other party of such request so that the other party may take, at its
expense, such steps

 

9

 

necessary to protect the Manager Confidential
Information or Owner Confidential Information, as applicable. If the Owner or
the Manager is thereafter required to disclose the Manager Confidential
Information or the Owner Confidential Information, as applicable, to the person
or entity compelling such disclosure only the part of such information as is
required by law to be disclosed shall be disclosed.

 

9.5.          Upon
termination of this Agreement by either party for any reason whatsoever, each
party shall forthwith return to the other party all material constituting or
containing Confidential Information of the other party, in a format that is
usable or capable of conversion by such other party to a usable format, and no
party thereafter shall use, appropriate, or reproduce such information or
disclose such information to any third party, provided, however, Manager agrees
to cooperate with Owner and the Center, after termination, in the transition to
different management of the Center. All costs of converting Confidential
Information to a format useable by the recipient shall be borne by the
recipient.

 

9.6.          The
Manager and Owner shall each have the right to use any technical or business
expertise obtained during the course of its engagement hereunder in connection
with its management of any other facility.

 

X.            NOTICES

 

Any notice, demand or communication required,
permitted, or desired to be given hereunder shall be deemed effectively given
upon receipt or refusal to accept receipt when delivered personally, by facsimile
or other electronic means or overnight courier, or five (5) days after
being deposited in the United States mail, with postage prepaid thereon, or
certified or registered mail, return receipt requested, addressed as follows:

 

	
   

  	
  The Owner:

  	
  [[1]]

  
	
   

  	
   

  	
  [[2]]

  
	
   

  	
   

  	
  Attn.: President/Chief Manager

  
	
   

  	
   

  	
   

  
	
   

  	
  The Manager:

  	
  SymbionARC Management Services, Inc.

  
	
   

  	
   

  	
  40 Burton Hills Blvd., Suite 500

  
	
   

  	
   

  	
  Nashville, Tennessee 37215

  
	
   

  	
   

  	
  Attn.: President

  

 

or to such other address, and to the
attention of such other person or officer as any party may designate, with
copies thereof to the respective counsel thereof as notified by such party.

 

XI.           COMPLIANCE PROGRAM/HIPAA

 

11.1.        The
Owner acknowledges that the Manager has implemented a compliance program for
its employed staff, and the Owner agrees to refrain from any activities that
could in any way cause the Manager’s staff to act in a manner that is
inconsistent with such compliance program. Specifically, but without
limitation, the Owner agrees to abide by Medicare and Medicaid billing and
coding requirements, including proper documentation of services, and the Owner
agrees to adopt by-laws for its medical staff which will prohibit the medical
staff from engaging in any activities that could in any way cause the Manager’s
staff to act in a manner that is inconsistent with such compliance program.
Prohibitions contained in the by-laws shall include an adequate remedy for
breach thereof by any member of the medical staff. The Owner will at all times
cooperate with and assist the Manager’s staff in submitting complete and proper
bills on behalf of the Owner. The Manager may, but is not obligated to,
recommend from time to time that the Owner take certain actions that the
Manager deems necessary to comply with applicable laws and regulations, and the
Owner will promptly cooperate with the Manager in determining 

 

10

 

whether such actions are appropriate and
necessary. The Manager may terminate this Agreement in accordance with Article II
upon its reasonable determination that the Owner’s failure to take the
recommended action could cause the Manager to be in violation of its compliance
program or in violation of applicable laws or regulations. Furthermore, the
Manager shall not be deemed in breach of this Agreement if it prohibits its
staff from taking any actions that it reasonably deems to be in violation of
its compliance program or in violation of applicable laws or regulations.

 

11.2.        The
Owner acknowledges as part of Manager’s compliance program Manager shall be
implementing policies and procedures to comply with the Health Insurance
Portability and Accountability Act (“HIPAA”). Both parties agree to abide by
HIPAA, its regulations and the policies implemented by Manager as well as any
other applicable federal, state, or local privacy or patient confidentiality
laws, and the Manager shall use its commercially reasonable efforts to do the
same. The Owner agrees to adopt any necessary HIPAA provisions in its Medical
Staff by-laws applicable to Medical Staff. The Manager may, but is not
obligated to, recommend from time to time that the Owner take certain actions
that the Manager deems necessary to comply with HIPAA and its applicable
regulations, and the Owner will promptly cooperate with the Manager in
determining whether such actions are appropriate and necessary. The parties
will enter into a Business Associate Agreement mutually acceptable to Owner and
Manager. The Manager may also, if it determines such is necessary, enter into
Business Associate Agreements as defined in HIPAA in the Owner’s Nam and on
behalf of the Owner. Neither party shall be deemed in breach of this Agreement
if fails to take or prohibits its staff from taking any actions that it
reasonably deems to be in violation of HIPAA or its applicable regulations.

 

XII.         INDEMNIFICATION

 

12.1.        The
Owner agrees to indemnify and hold harmless the Manager, its affiliates and
shareholders, and their respective shareholders, directors, officers, employees
and agents (collectively, a “Manager Indemnified Party”) from and against any
and all losses, claims, damages, liabilities, costs and expenses (including
reasonable attorneys’ fees and expenses related to the defense of any claims)
(a “Loss”), which may be asserted against any of the Manager Indemnified
Parties, in connection with the Manager’s provisions of services to Owner,
including Manager’s performance of its duties hereunder if such Loss has not
been caused by the gross negligence or willful misconduct of a Manager Indemnified
Party, including without limitation matters relating to: (i) alleged or
actual failure by the governing body, board of directors and/or similar body of
the Owner to perform any of its duties, (ii) any pending or threatened
medical malpractice or other tort claims asserted against the Manager relating
to the Center, (iii) any action against the Manager brought by any medical
staff members or former employees, or for matters occurring before the
beginning of the Term of this Agreement, (iv) any act or omission by any
medical staff member, or employee, or other personnel who were under the
supervision of a member of the medical staff as a result of providing medical
services to such medical staff member’s patient, and (v) any violation of
any requirement applicable to the Center under any federal, state or local
environmental, hazardous waste or similar law or regulation. In no event shall
the Owner have any liability for any special, exemplary, punitive or
consequential damages (including loss of profit or revenue) suffered or
incurred by any Manager Indemnified Party, other than claims for the
non-payment of fees and expenses under Article V hereof.

 

12.2.        The
Manager agrees to indemnify and hold harmless the Owner and its partners,
members, governors, managers, officers, employees and agents (collectively, an “Owner
Indemnified Party”) from and against all Loss which may be asserted against an
Owner Indemnified Party as a result of the gross negligence or willful
misconduct of the Manager in connection with the performance by the Manager of
its duties hereunder if such Loss has not been caused by the gross negligence
or willful misconduct of an Owner Indemnified Party. *

 

11

 

12.3.        Other
than claims for the non-payment of fees and expenses under Article V
hereof, this Article XII shall constitute the sole remedy of the parties
hereto with respect to any Loss and/or any claim (including any Loss resulting
from a third party claim) if such Loss and/or claim arises out of this
Agreement, the services provided by the Manager and/or the relationship created
hereby, whether such claim is based in contract, tort, or otherwise, but
excluding claims arising out of willful misconduct or fraud.

 

XIII.        USE OF NAME/PROPRIETARY PROPERTY

 

13.1.        The
Owner hereby grants to the Manager the nonexclusive right, license and
privilege to use the Owner’s logo, if any, and the name “[[1]]” alone or as a
portion of or in connection with the corporate name of the Manager during the
term, and subject to all of the terms and conditions provided herein. The Owner
agrees to provide the Manager with access, without charge, to the outcomes and
other data developed by the Owner for use in the operation of the Center. The
Manager may include its name and the name of the Owner on any letterhead,
professional announcements, brochures, promotional materials, private
placements, public offerings, and the like relating to the Owner or the
Manager.

 

13.2.        The
Manager is and shall be the sole owner and holder of all right, title and
interest to the proprietary property of the Manager consisting of all
copyright, service mark and trademark rights and interests in the logo,
management information and other systems, forms, form contracts, and policy
manuals relating to the Center, but in all cases only if primarily developed by
the Manager and, in all events, excluding any logos purchased or created solely
by the Owner. The Owner agrees that it shall not at any time knowingly harm,
misuse or bring into disrepute the proprietary property of the Manager. The
Manager agrees that the Owner shall have a non-exclusive, royalty-free right to
use such proprietary information, subject to the foregoing restrictions, during
the term of this Agreement and for up to twelve months (12) after the
expiration or termination of this Agreement as is reasonably needed to maintain
patient quality standard until such time as replacement materials that do not
constitute proprietary information of Manager may be created and implemented.

 

XIV.        CHANGES IN LAW

 

The parties hereto have made all reasonable
efforts to ensure that this Agreement represents and memorializes the economic
arrangement between the parties hereto and that it complies with all applicable
laws, including, but not limited to, all applicable health care laws. The
parties are aware that there may be no clear or definitive guidance with
respect to the applicability of various health care laws to the management
arrangement contained herein including, but not limited to, the management fee
arrangement. While the parties have attempted to review and analyze all
applicable laws in an effort to comply with same, the parties acknowledge that
the applicable health care laws, and interpretations thereof, are often vague
and are constantly changing. The parties therefore understand and acknowledge
that as applicable law, and interpretations thereof, become more settled, this
Agreement may need to be amended in order to comply with such law, or
interpretations thereof, as the case may be. In the event there is such a
change in law or the interpretations thereof, whether by statute, regulation,
agency or judicial decision, or otherwise, that has any material effect on any
term of this Agreement, or in the event that reputable counsel with experience
in health law matters to one (1) party determines that any term of this
Agreement poses a material risk of violating such laws, then the applicable
term(s) of this Agreement shall be subject to renegotiation and either
party may request renegotiation of the affected term or terms 

 

12

 

of this
Agreement, upon written notice to the other party, to remedy such condition. In
the interim, the parties shall perform their obligations hereunder in full compliance
with applicable law. The parties expressly recognize that upon request for
renegotiation, each party has a duty and obligation to the other only to
renegotiate the affected term(s) in good faith and, further, the parties
expressly agree that their consent to proposals submitted by the other party
during renegotiation efforts shall not be unreasonably withheld. The parties
further expressly recognize that in any such renegotiation, the relative
economics to each of the parties shall be preserved. Should the parties be
unable to renegotiate the term or terms so affected so as to bring it/them into
compliance with the statute, regulation, decision or interpretation that
rendered it/them unlawful or unenforceable within thirty (30) days of the date
on which notice of a desired renegotiation is given, then either party shall be
entitled, after the expiration of said thirty (30) day period, to terminate
this Agreement upon sixty (60) additional days written notice to the other
party, provided that such party has received an opinion of reputable legal
counsel, which legal counsel and opinion are reasonably acceptable to the other
party, that it is more likely than not that this Agreement violates applicable
law.

 

XV.         MISCELLANEOUS

 

15.1.        Upon
the written request of the Secretary of Health and Human Services or the
Comptroller General or any of their duly authorized representatives, the
Manager and any of its affiliates providing services with a value or cost of
$10,000 or more over a twelve (12) month period shall make available to the
Secretary the contracts, books, documents and records that are necessary to
verify the nature and extent of the cost of providing such services. Such
inspection shall be available up to four years after the rendering of such services.
The parties agree that any applicable attorney-client, accountant-client or
other legal privilege shall not be deemed waived by virtue of this Agreement.

 

15.2.        The
parties agree that this Agreement shall be governed by and construed in
accordance with the laws of the State of California. The parties hereto hereby
designate all courts of record sitting in Los Angeles County, California, both
state and federal, as the exclusive forums where any action, suit or proceeding
in respect of or arising out of this Agreement, or the transactions
contemplated by this Agreement shall be prosecuted as to all parties, their
successors and assigns, and by the foregoing designations the parties hereto
consent to the jurisdiction and venue of such courts. In the event of any
action, suit or proceeding brought by one party hereto against the other to
enforce any provision of this Agreement, the prevailing party in such
litigation shall be entitled to recover attorneys’ fees and costs of litigation
in addition to all other remedies available at law or in equity.

 

15.3.        Subject
to provisions herein to the contrary, this Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective legal
representatives, successors and permitted assigns.

 

15.4.        No
party may assign this Agreement without the prior written consent of the other
party, which consent shall not be unreasonably withheld; provided, however,
that the Manager may, without the prior written consent of the Owner, assign
its rights and delegate its duties hereunder: (i) to one (1) or more
of its affiliates, provided it is understood that Manager shall remain liable
for the obligations hereunder notwithstanding such assignment and (ii) to
a third party as part of a sale of substantially all of the Manager’s assets.
In addition, Manager may collaterally assign this Agreement to any lending
institution, for security purposes or as collateral, from which the Manager
obtains financing. A merger, consolidation, change in shareholders or controlling
interest, or stock-for-stock exchange by the Manager shall not be deemed to
constitute an assignment of this Agreement.

 

15.5.        This
Agreement is intended solely for the benefit of the parties hereto and is not
intended to, and shall not create any enforceable third party beneficiary
rights.

 

13

 

15.6.        This
Agreement may only be amended in a writing signed by the parties. The waiver by
any party of a breach or violation of any provision of this Agreement shall not
operate as, or be construed to constitute, a waiver of any subsequent breach of
the same or any other provision hereof.

 

15.7.        In
the event any provision of this Agreement is held to be invalid, illegal or
unenforceable for any reason and in any respect, such invalidity, illegality,
or unenforceability shall in no event affect, prejudice or disturb the validity
of the remainder of this Agreement, which shall be and remain in full force and
effect, enforceable in accordance with its terms.

 

15.8.        Whenever
the context of this Agreement requires, the gender of all words herein shall
include the masculine, feminine and neuter, and the number of all words herein
shall include the singular and plural.

 

15.9.        The
divisions of this Agreement into sections and subsections and the use of
captions and headings in connection therewith are solely for convenience and
shall have no legal effect in construing the provisions of this Agreement.

 

15.10.      This
Agreement supersedes all previous contracts, and constitutes the entire
agreement of whatsoever kind or nature existing between or among the parties
respecting the within subject matter and no party shall be entitled to benefits
other than those specified herein. As between or among the parties, no oral
statements or prior written material not specifically incorporated herein shall
be of any force and effect. The parties specifically acknowledge that in
entering into and executing this Agreement, the parties rely solely upon the
representations and agreements contained in this Agreement and no others. All
prior representations or agreements, whether written or verbal, not expressly
incorporated herein are superseded and no changes in or additions to this
Agreement shall be recognized unless and until made in writing and signed by
all parties hereto. This Agreement may be executed in two (2) or more
counterparts, each and all of which shall be deemed an original and all of
which together shall constitute but one (1) and the same instrument.

 

15.11.      Each
party hereto hereby irrevocably waives any and all rights it may have to demand
that any action, proceeding or counterclaim arising out of or in any way
related to this Agreement or the relationships of the parties hereto be tried
by jury. This waiver extends to any and all rights to demand a trial by jury
arising from any source including, but not limited to, the constitution of the
United States or any State therein, common law or any applicable statute or
regulation. Each party hereto acknowledges that is knowingly and voluntarily
waiving its rights to demand trial by jury.

 

15.12.      The
provisions of Article IX, XII and XV and Article 13.2 shall survive
any termination or expiration of this Agreement.

 

15.13.      Each
party shall, at the reasonable request and expense of any other party hereto,
execute and deliver to such other party all such further instruments,
assignments, assurances and other documents, and take such actions as such
other party may reasonably request in connection with the carrying out of this
Agreement.

 

15.14.      The
language in all parts of this Agreement shall be construed, in all cases,
according to its fair meaning. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.

 

15.15.      The
Owner shall at all times during the term, and at all times thereafter, make
available to the Manager for inspection by its authorized representatives
during regular business hours, at the principal place of business of the Owner,
any records of the Owner determined by the Manager to be necessary to 

 

14

 

perform its services and carry out its
responsibilities hereunder or necessary for the defense of any legal or
administrative action or claim relating to said records or necessary for any
other reasonable purpose.

 

15.16.      As
used herein, “affiliate” means, as to the Person (as hereinafter defined) in
question, any Person that directly or indirectly controls, is controlled by, or
is under control with, the Person in question and any successors or assigns of
such Person; and the term “control” means possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person whether through ownership of voting securities, by contract or
otherwise. “Person” means an association, a corporation, a limited liability
company, an individual, a partnership, a limited liability partnership, a trust
or any other entity or organization.

 

[Remainder of page intentionally
left blank.]

 

15

 

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

 

	
   

  	
  MANAGER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SYMBIONARC MANAGEMENT SERVICES, INC., a

  Tennessee corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Charles T. Neal, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  OWNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [[1]], a California limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  [                              ]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  

 

16

 

SCHEDULE A

 

CENTERS

 

[Beverly:

 

1.             9575
Brighton Way, Suite 100, Beverly Hills, CA 90210.

 

2.             8670
Wilshire Boulevard, Suite 300, Beverly Hills, CA 90211.]

 

[Encino: 16501 Ventura Boulevard, Suite 103,
Encino, CA 91436]

 

[Irvine: 15825 Laguna Canyon Road, Suite 200,
Irvine, CA 92618.]

 

[Arcadia: 51 North Fifth Avenue, Suite 101,
Arcadia, CA 91006.]

 

[Thousand Oaks: 696 Hampshire Road, Thousand
Oaks, CA 91361.]

 

[Van Nuys: 6815 Noble Avenue, Van Nuys, CA
91405.]

 

17

 

SCHEDULE B

 

SARC*/Manager’s Accounting Manual

 

SARC/Manager’s Administrators Manual

 

SARC/Manager’s Corporate Compliance Manual

 

SARC/Manager’s Human Resource Manual

 

SARC/Manager’s Job Description and
Performance Appraisal Manual

 

SARC/Manager’s Clinical Policy and Procedures

 

SARC/Manager’s HIPAA Manual

 

*SARC = Symbion Ambulatory Resource Centers, Inc.

 

18

 

EXHIBIT 1.2(B)

 

Form of Escrow Agreement

 

(To be attached at Closing)

 

 

ESCROW AGREEMENT

 

THIS ESCROW AGREEMENT (this “Agreement”), dated
as of                     ,
2005, is by and among Parthenon Management Partners, LLC, a California limited
liability company (the “Company”), Andrew A. Brooks, M.D. and Randhir S.
Tuli, both residents of the State of California (each an “Owner” and,
collectively the “Owners”) (the Company and the Owners being,
collectively, the “Sellers”), SymbionARC Management Services, Inc.,
a Tennessee corporation (the “Purchaser”), and Bank of America, N.A. (the “Escrow Agent”).

 

RECITALS

 

A.                                   Concurrently
with the execution of this Agreement, the Purchaser is acquiring certain
management rights from the Sellers as described in the Management Rights
Purchase Agreement dated                   ,
2005 (the “Purchase Agreement”), a copy of which is attached hereto as Exhibit A.

 

B.                                     The
execution and delivery of this Agreement is a condition to the consummation of
the transactions contemplated by the Purchase Agreement.

 

C.                                     Capitalized
terms used in this Agreement but not defined are used in this Agreement as
defined in the Purchase Agreement.

 

NOW THEREFORE, in consideration of the mutual promises
and subject to the terms and conditions herein contained, and other good and
valuable consideration, had and received, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree as follows:

 

1.                                       Appointment
of Escrow Agent.  The Purchaser and
the Sellers hereby appoint and designate the Escrow Agent as the escrow agent
for the purposes set forth in this Agreement, and the Escrow Agent hereby
accepts such appointment under the terms and conditions set forth in this
Agreement.  Notwithstanding the
references in this Agreement to the Purchase Agreement, the Purchaser and the
Sellers acknowledge that the Escrow Agent is not a party to the Purchase
Agreement for any purpose or responsible for its interpretation or enforcement.

 

2.                                       Deposit
in Escrow.  Simultaneously with the
execution and delivery of this Agreement, the Purchaser shall deposit with the
Escrow Agent (for the account of Sellers) an aggregate amount equal to THREE
HUNDRED THIRTY THREE THOUSAND THREE HUNDRED THIRTY THREE AND NO/100 DOLLARS
($333,333.00) (together with all income earned thereon, the “Escrow Funds”).
The Escrow Agent shall hold and disburse the Escrow Funds in accordance with
the terms and conditions of this Agreement. 
The Escrow Funds shall not be
subject to lien or attachment by any creditor of any party hereto and shall be
used solely for the purpose set forth in the Purchase Agreement.  Except as expressly stated herein, the Escrow
Funds shall not be available to, and shall not be used by, the Escrow Agent to set
off any obligations of either the Purchaser or the Sellers owing to the Escrow
Agent in any capacity.

 

3.                                       Investment.  The Escrow Agent shall invest the Escrow
Funds in such manner as is jointly specified in writing from time to time by
the Purchaser and the Sellers.  Absent
such direction, the Escrow Agent shall invest the Escrow Funds in Bank of
America Funds, National Tax-Free Money Market Fund.  Any investment income realized on the Escrow
Funds shall be distributed to the Sellers quarterly in accordance with each
Seller’s respective “Pro Rata Share” as set forth on Exhibit B and
shall not become part of the Escrow Funds. 
Promptly following the conclusion of each calendar quarter, the Escrow
Agent shall deliver to each Seller a written statement of account with respect
to any investment income realized on the Escrow Funds in accordance with their
Pro Rata Shares.

 

In accordance with
Proposed Treasury Regulations §1.468B-8, the Purchaser shall be treated as the
owner of the Escrow Funds for federal and state income tax purposes while it is
held by the Escrow Agent, and the Escrow Agent shall, for each calendar year
(or portion thereof) for which the Escrow Fund is so held report the interest
earned on the Escrow Funds on IRS Form 1099 and corresponding state income
tax forms with applicable law and regulations, showing the Escrow Agent as the
payor and showing the Purchaser as the payee unless the Purchaser

 

 

and Sellers’ Committees shall have delivered to the Escrow Agent a
statement that specifies otherwise in accordance with Proposed Treasury
Regulations §1.468B-8(f).  As a matter
between the Sellers and the Purchaser with which Escrow Agent need not be
concerned, the Sellers and the Purchaser agree that upon distribution of any
portion of the Escrow Fund to the Sellers (i) a portion of each
distribution made to a Seller out of the Escrow Fund shall be considered a
contingent payment to the Seller by the applicable Purchaser with respect to a
debt instrument described to which Internal Revenue Code Section 1274
applies, (ii) the appropriate portion of each distribution so made to the
Seller shall be treated as original issue discount on a debt instrument issued
by the applicable Purchaser to the Seller, calculated in accordance with
Treasury Regulations Section 1.1275-4(c) based on the short-term
applicable federal rate (as defined in Section 1274(d) of the
Internal Revenue Code) for July, 2005, and (iii) the Purchaser shall not
take any position on a tax return inconsistent with the foregoing or
inconsistent with installment sale reporting by the Sellers with respect to the
portion of distributions to the Sellers out of the Escrow Fund not so treated
as original issue discount.

 

4.                                       Distributions.

 

(a)                                  The Escrow Agent shall disburse the
Escrow Funds not later than the second business day next following receipt of a
statement signed by Purchaser (the “Instruction Letter”) instructing the
Escrow Funds to be distributed to the Sellers in accordance with their Pro Rata
Shares.  Disbursements to each Seller
shall be paid by wire transfer of immediately available funds to the bank
account listed for such Seller on Exhibit A hereto, or as otherwise
indicated by such Seller in a written notice to the Escrow Agent in accordance
with the provisions of Section 10. 
Upon such payment, this Agreement (other than Section 5, 6, 8(b) and
9) shall automatically terminate.

 

(b)                                 If the Escrow Agent shall not have
received an Instruction Letter from the Purchaser on or before December 31,
2005, it will disburse the Escrow Funds to the Purchaser not later than the second
business day next following December 31, 2005.  Upon such payment, this Agreement (other than
Section 5, 6, 8(b) and 9) shall automatically terminate.

 

(c)                                  Without limiting the foregoing, the Escrow Agent shall
not make any payment or distribution of Escrow Funds except as and in the
manner expressly provided by this Escrow Agreement.

 

5.                                       Escrow
Agent Compensation.  The Escrow Agent
is to be compensated $1,500.00 for the performance of its duties under this
Agreement (the “Escrow Fees”). 
All initial Escrow Fees shall be paid in equal amounts by the Purchaser
on the one hand and the Sellers on the other hand, and they shall be jointly
and severally responsible therefor (with a right of contribution as between the
Purchaser for 50% of such fees and the Sellers for 50% of such fees, which
shall be pro rated among the Sellers in accordance with the Sellers’ Pro Rata
Shares).  If any fees or expenses of the
Escrow Agent are not paid in full when due, the Escrow Agent may deduct the
unpaid portion of such additional fees or expenses, if any, from any payment to
be made to the Purchaser or the Sellers hereunder.  This Section shall survive any
termination of this Agreement.

 

6.                                       Obligations
and Liabilities of the Escrow Agent.

 

(a)                                  The
Escrow Agent has no duties or obligations other than those specifically set
forth in this Agreement.

 

(b)                                 The
Escrow Agent is not responsible in any manner whatsoever for any failure or
inability of any party other than the Escrow Agent to honor any of the
provisions of this Agreement.

 

(c)                                  The
Escrow Agent is fully protected in acting or refraining from acting upon and
relying upon any written notice (including, without limitation, any Certificate
of Instruction, Resolution Certificate or Litigation Certificate), direction,
request, waiver, consent, receipt or other paper or document that the Escrow
Agent in good faith believes to have been signed or presented by the proper
party or parties.  The Escrow Agent shall
not be responsible for or have any duty to ascertain or inquire into the
contents of any written notice (including, without limitation, any Certificate
of Instruction, Resolution Certificate or Litigation Certificate), direction,
request, waiver, consent, receipt or other paper or document delivered
hereunder.  Without limiting the
generality of the foregoing, the Escrow Agent shall not be responsible for or
have any duty to ascertain or inquire as to the validity,

 

 

enforceability, sufficiency or genuineness of any Certificate of
Instruction, Resolution Certificate or Litigation Certificate.

 

(d)                                 The
Escrow Agent will not be liable for any error of judgment or for any act done
or step taken or omitted by it in good faith or for any mistake in fact or law
or for anything that it may do or refrain from doing in connection with this
Agreement, except for its own gross negligence, willful misconduct or act of
bad faith.

 

(e)                                  In
the event that the Escrow Agent (i) shall be uncertain as to its duties or
rights hereunder or (ii) shall receive conflicting instructions, claims or
demands from the Purchaser or the Sellers, the Escrow Agent shall be entitled
to refrain from taking any action other than to keep safely all property held
in escrow as to which a dispute exists until (A) the Escrow Agent shall be
directed otherwise in writing by the Sellers and the Purchaser or (B) in
any event, until the Escrow Agent shall be directed by a court order.

 

(f)                                    The
Escrow Agent may consult with, and obtain advice from, legal counsel in the
event of any dispute or construction of any of the provisions of this Agreement
or its duties under this Agreement, and the Escrow Agent will incur no
liability and will be fully protected in acting or refraining from acting in
good faith in accordance with the advice of such counsel.

 

7.                                       Automatic
Succession; Resignation and Removal of Escrow Agent.

 

(a)                                  Any company into which the Escrow Agent
may be merged or with which it may be consolidated or any company to whom the
Escrow Agent may transfer a substantial amount of its global escrow business,
will be the successor to the Escrow Agent without the execution or filing of
any paper or further act on the part of any parties, except that written notice
must be provided to the Purchaser and the Sellers, notwithstanding anything in
this Agreement to the contrary.

 

(b)                                 The Escrow Agent may resign as escrow
agent at any time with or without cause by giving written notice to the
Purchaser and the Sellers, such resignation to be effective 30 calendar days
following the date such notice is given. 
In addition, the Purchaser and the Sellers jointly may remove the Escrow
Agent as escrow agent at any time with or without cause by an instrument (which
may be executed in counterparts), given to the Escrow Agent, which instrument
must designate the effective date of such removal.  If any such resignation or removal occurs, a
successor escrow agent will be appointed by the Purchaser and the Sellers.  Any such successor escrow agent shall deliver
to the Purchaser and the Sellers a written instrument accepting such
appointment and upon such delivery it will succeed to all of the rights and
duties of the Escrow Agent under this Agreement and will be entitled to receive
the Escrow Funds.

 

(c)                                  If the Purchaser and all of the Sellers
are unable to agree upon a successor escrow agent or have failed to appoint a
successor escrow agent prior to the expiration of 30 calendar days following
the date of the notice of resignation or removal, the then acting escrow agent
shall appoint as a successor escrow agent a banking institution of national or
regional prominence.  Any such
appointment will be binding upon all of the parties to this Agreement.

 

(d)                                 Upon acknowledgment by any successor
escrow agent of the receipt of the Escrow Funds, the then replaced escrow agent
will be fully relieved of all duties, responsibilities and obligations under
this Agreement except (i) with respect to actions previously taken or
omitted by such replaced escrow agent and (ii) the provisions of Articles
5, 6, 8(b) and 9 shall continue in effect for the benefit of such replaced
escrow agent and its affiliates, officers, directors, employees, agents and
advisors with respect to actions previously taken or omitted by such replaced
escrow agent.

 

8.                                       Disputes.

 

(a)                                  In the event of any dispute between the
parties hereto, the Escrow Agent may tender into the registry or custody of any
court of competent jurisdiction all money or property in its hands delivered to
it pursuant to this Agreement, together with such pleadings as it deems
appropriate, and shall, thereupon, be discharged from all further duties and
liabilities under this Agreement; provided, however, that the filing of any
such

 

 

legal proceedings shall
not deprive Escrow Agent of its compensation hereunder earned prior to such
filing and discharge of Escrow Agent of its duties hereunder.

 

(b)                                 Notwithstanding anything in this
Agreement to the contrary, in the event that the Escrow Agent incurs any fees
and expenses in connection with any dispute under this Agreement for which it
is entitled to reimbursement under this Agreement, the Purchaser and the
Sellers shall promptly reimburse the Escrow Agent therefor in equal amounts by
the Purchaser on the one hand and the Sellers on the other hand, and they shall
be jointly and severally responsible therefor (with a right of contribution as
between the Purchaser for 50% of such expenses and the Sellers for 50% of such
expenses, which shall be pro rated among the Sellers in accordance with the
Sellers’ Pro Rata Shares).  If any fees
or expenses of the Escrow Agent are not paid in full when due, the Escrow Agent
may deduct the unpaid portion of such additional fees and expenses, if any,
from any payment to be made to the Purchaser or the Sellers hereunder.  This Section shall survive any
termination of this Agreement.

 

9.                                       Indemnification
of Escrow Agent.  In partial
consideration of the Escrow Agent’s acceptance of this appointment, the
Purchaser and the Sellers shall indemnify the Escrow Agent and its affiliates,
officers, directors, employees, agents and advisors (each an “Indemnitee”),
and hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses (including, among other things, reasonable
attorneys’ fees and expenses) incurred by it to any person or party (including
Purchaser or any Seller) by reason of its having accepted such appointment or
in carrying out the terms of this Agreement, all of which shall be borne in
equal amounts by the Purchaser on the one hand and the Sellers on the other
hand, and they shall be jointly and severally responsible therefor (with a
right of contribution as between the Purchaser for 50% of such indemnification
and the Sellers for 50% of such indemnification, which shall be pro rated among
the Sellers in accordance with the Sellers’ Pro Rata Shares).  Notwithstanding the foregoing, no indemnity
need be paid in case of the Escrow Agent’s gross negligence or willful
misconduct.  If any amounts owing under
this Section 9 are not paid in full when due, the Escrow Agent may deduct
the unpaid portion of such amounts, if any, from any payment to be made to the
Purchaser or the Sellers hereunder.  This
Section shall survive any termination of this Agreement.

 

10.                                 Notices.  All notices must be in writing and will be
deemed to have been given (i) if delivered in person or by a nationally
recognized overnight courier service or (ii) upon confirmation of receipt
if sent by facsimile, to the following addresses:

 

(a)                                  If to the Purchaser:

 

c/o Symbion, Inc.

40 Burton Hills Boulevard, Suite 500

Nashville, Tennessee  37215

Attention:  President

Facsimile No: (615) 234-5999

 

with a copy to:

 

Waller Lansden Dortch &
Davis, PLLC

511 Union Street, Suite 2700

Nashville, Tennessee
37219

Attention:  Joseph A. Sowell, III, Esq.

Facsimile No.:  (615) 244-6804

 

(b)                                 If to the Sellers:

 

To the addresses set
forth on the signature page

with copies to counsel to
the LLCs and the Sellers, respectively:

 

 

Sheppard, Mullin, Richter & Hampton
LLP

333 South Hope Street, 48th Floor

Los Angeles, California 90071

Attention:  Lawrence M. Braun

Facsimile No: (213) 443-2776

 

and

 

Guth | Christopher LLP

10866 Wilshire Blvd, Suite 1250

Los Angeles, California 90024

Attention: Theodore E. Guth

Facsimile No: (310) 470-8354

 

(c)                                  If to the Escrow Agent:

 

Bank
of America, N.A.

414
Union Street

Nashville,
Tennessee 37219

Attention:  Elizabeth Knox

Facsimile
No.:  (615) 749-4951

 

with a
copy to:

 

Moore & Van Allen PLLC

100 N. Tryon St., Floor 47

Charlotte, North Carolina 28202-4003

Attention: Win Porter

Facsimile No.: (704)
331-1032

 

11.                                 Binding
Effect.  This Agreement is binding
and inures to the benefit of the parties and their respective successors and
permitted assigns.

 

12.                                 Assignment.  This Agreement may not be assigned or
transferred, by operation of law or otherwise except pursuant to Section 7(a) or
upon a written agreement executed by the Sellers, the Purchaser and the Escrow
Agent; provided, however, that the Purchaser may assign this
Agreement to any of its lenders or any Affiliate of the Purchaser and each
Seller may assign this Agreement to any partner, member or owner (direct or
indirect) of such Seller or any entity controlled by such Seller or its
partner, member or owner.

 

13.                                 Third
Party Beneficiaries.  Nothing in this
Agreement is intended or will be construed to confer on any person other than
the parties or their successors and assigns any rights or benefits under this
Agreement.

 

14.                                 Headings.  The headings in this Agreement are intended
solely for the convenience of reference and will be given no effect in the
construction or interpretation of this Agreement.

 

15.                                 Exhibits.  The Exhibits and other attachments hereto
will be deemed to be a part of this Agreement.

 

16.                                 Counterparts.  This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of which
together will constitute one and the same document.

 

17.                                 Governing
Law and Venue.  This Agreement must
be governed by and construed under California law, without regard to conflict
of laws principles.  The parties hereto
hereby designate all courts of record sitting in Los Angeles County,
California, both state and federal, as the exclusive forums where any action,
suit or proceeding in respect of or arising out of this Agreement, or the
transactions contemplated by this Agreement shall be

 

 

prosecuted as to all
parties, their successors and assigns, and by the foregoing designations the
parties hereto consent to the exclusive jurisdiction and venue of such courts.

 

18.                                 Amendment.  No amendment of this Agreement is binding
unless made in a written instrument that specifically refers to this Agreement
and is signed by the Purchaser, the Sellers and the Escrow Agent.

 

19.                                 Entire
Agreement.  This Agreement and the
Purchase Agreement (solely with respect to the Sellers and the Purchaser)
contain the entire understanding among the parties and supersede any prior
understanding and agreements between them, in each case respecting this subject
matter.  There are no representations,
agreements or understandings, oral or written, between or among the parties to
this Agreement relating to the subject matter of this Agreement that are not
fully expressed in this Agreement or the Purchase Agreement (solely with
respect to the Sellers and the Purchaser).

 

Signature page follows.

 

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first above written.

 

	
   

  	
  ESCROW AGENT:

  
	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  SYMBIONARC MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SELLERS:

  
	
   

  	
   

  
	
   

  	
  PARTHENON MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  By: 

  	
   

  
	
   

  	
  Name: 

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Andrew A. Brooks, M.D.

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Randhir S. Tuli

  
	
   

  	
  Address for notices:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

EXHIBIT A

 

Purchase Agreement

 

 

EXHIBIT B

 

	
  Sellers

  	
   

  	
  Wiring Instructions

  	
   

  	
  Pro Rata Share

  	
   

  
	
  Andrew
  A. Brooks, M.D.

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Randhir
  S. Tuli

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Parthenon
  Management Partners, LLC

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT 1.3

 

Form of Assignment

 

(See Attached)

 

 

EXHIBIT
1.3

 

FORM OF ASSIGNMENT

 

This ASSIGNMENT (this “Assignment”)
dated as of
                          ,
2005 is between Parthenon Management Partners, LLC, a California limited
liability company, Andrew A. Brooks, M.D., a resident of the state of
California and Randhir S. Tuli, a resident of the state of California  (collectively, “Assignors” and each
individually an “Assignor”) and SymbionARC Management Services, Inc., a
Tennessee corporation (“Assignee”). 
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Management Rights Purchase Agreement (as
hereinafter defined).

 

W I T N E S S E T H :

 

WHEREAS, as of the date
hereof, Assignors own rights in and to certain economic interests (the “Management
Rights”) that entitle Assignors to receive consideration for and obligate
Assignors to perform certain management responsibilities for each of the
Brighton Center, the Wilshire Center, the Encino Center, the Irvine Center, the
Arcadia Center and the Thousand Oaks Center; and

 

WHEREAS, Assignors and
Assignee are parties to that certain Management Rights Purchase Agreement,
dated as of July 27, 2005 (the “Management Rights Purchase Agreement”),
providing for, among other things, the transfer and assignment to Assignee by
Assignors of all of Assignors’ Management Rights, in consideration of the
payment of the Purchase Price therefor, in the amount and manner and on the
terms and conditions provided in the Management Rights Purchase Agreement; and

 

WHEREAS, the parties now
desire to carry out the intent and purpose of the Management Rights Purchase
Agreement by Assignors’ execution and delivery to Assignee of this instrument
evidencing the vesting in Assignee of all of Assignors’ Management Rights, in
addition to such other instruments as Assignee shall have otherwise received or
may hereafter request.

 

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

 

1.             Transfer and Assignment.  Assignors
hereby convey, assign, transfer and deliver to Assignee, its successors and
assigns, to have and to hold all and singular to its and their use and benefit
all right, title and interest, legal and equitable, in and to Assignors’
Management Rights, free and clear of any and all claims, liens, security
interests, rights of first refusal, options, warrants or other encumbrances of
any nature.

 

2.             Purchase Price.  On the date
hereof, Assignee shall deliver to Assignor the portion of the Purchase Price to
which Assignor is entitled, as provided in the Management Rights Purchase
Agreement.

 

3.             Cooperation.  The parties,
from time to time after the delivery of this Assignment, will to the extent
permitted by law and agreements to which they are a party, upon the reasonable
request of the other party hereto, execute, acknowledge and deliver all such
further documents as may be reasonably required for the assignment and transfer
of the Management Rights to Assignee.

 

4.             Benefit; Purpose; Modification. 
This Assignment shall inure to the benefit of Assignors, Assignee and
their respective legal representatives, successors and assigns.  The sole purpose hereof is to assign and
transfer the Management Rights to Assignee and not to create third party
beneficiary rights. Therefore, this Assignment may be modified by a writing
signed by Assignors and Assignee without the consent of any third party.

 

 

IN WITNESS WHEREOF, the
parties hereto have caused this Assignment to be duly executed in several
counterparts (each of which shall constitute an original hereof) by their
respective duly authorized officers as of the date first above written.

 

 

	
   

  	
  PARTHENON
  MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ANDREW A. BROOKS, M.D.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RANDHIR
  S. TULI

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SYMBIONARC
  MANAGEMENT SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  

 

 

EXHIBIT 6.7

 

Form of Consulting Agreement

 

(See Attached)

 

 

CONSULTING
AGREEMENT

 

This CONSULTING AGREEMENT (this “Agreement”), dated as
of
                        ,
2005 (the “Effective Date”), is by and between SymbionARC Management Services, Inc.,
a Tennessee corporation (the “Manager”) and Parthenon Management Partners, LLC, a California limited liability company  (the “Contractor”), Andrew A. Brooks, M.D. and Randhir S.
Tuli (each an “Owner” and, together, the “Owners”).  The Owners own all of the outstanding equity
securities of the Contractor.

 

W I T N
E S S E T H:

 

WHEREAS, the Manager manages each of those ambulatory
surgery centers or other healthcare facilities identified on Schedule 1
hereto (each a “Center” and, collectively, the “Centers”), which Centers shall
be classified on such Schedule 1 as being an “Existing Center” or a “Developing
Center” ; and

 

WHEREAS, pursuant to that certain Management Rights
Purchase Agreement, dated
                  ,
2005 (the “MRPA”), Contractor and the Owners have sold to Manager all of their
rights in and to those certain economic interests that entitle Contractor and
the Owners to receive consideration for and obligate them to perform certain
management responsibilities for each Center; and

 

WHEREAS, the Manager desires to enter into this
Agreement with the Contractor pursuant to which Contractor will provide the
Manager with (A) consulting and oversight services relating to the
operation of the Centers and the transition of management of the Centers, and (B) assistance
in the identification and consummation of opportunities to develop and acquire
Surgical Businesses (as defined below), and the Contractor desires to provide
such all such services to the Manager.

 

NOW, THEREFORE, the Manager, the Contractor and the
Owners agree as follows:

 

ARTICLE I

DUTIES OF THE CONTRACTOR

 

1.1.         Generally. 
The Manager hereby retains the Contractor and the Owners for the purpose
of providing consulting and oversight services to the Manager relating to the
operation of the Centers identified on Schedule 1 hereto and the transition
of management of such Centers.  In
performing their obligations under this Agreement, the Contractor and the
Owners shall act in good faith and with reasonable diligence and devote their
reasonable best efforts to the duties set forth herein, in all respects subject
to the reasonable control of the Manager. 
The Manager and the Contractor agree and acknowledge that the Manager is
relying on the efforts and expertise of the Contractor and the Owners.  Contractors will not be required to pay for
any operating costs of the Centers.

 

1.2.         Duties of the Contractor. 
The Contractor and the Owners covenant and agree:

 

a.             to provide those services set forth on Exhibit 1.2
attached hereto for each Center during that Center’s Payment Period;

 

b.             that the Contractor and the Owners shall
perform such services in a business-like manner in accordance with such
reasonable policies and directives adopted by the Manager from time to time and
communicated in writing to the Contractor and the Owners; and

 

c.             to take all reasonable actions and
execute all documents necessary to carry out the terms and purposes of this
Agreement.

 

 

1.3.         Duties of the Manager. 
The Manager covenants and agrees:

 

a.       to provide such information and guidance
as is reasonably necessary for the Contractor to satisfy its contractual
obligations under this contract in a timely manner; and

 

b.       to take all reasonable actions and
execute all documents necessary to carry out the terms and purposes of this
Agreement.

 

1.4.         No Partnership. 
The Contractor, the Owners and the Manager affirmatively state that they
do not have the intention and are not forming a joint venture or partnership
for tax or any other purposes.  The
relationship created hereby is that of agents (the Contractor and the Owners)
contracting with a principal (the Manager) as independent contractors.

 

1.5          DEA and CLIA Certificates. 
The Manager shall use commercially reasonable efforts to transition
promptly the DEA and CLIA certificates currently in place at the Existing
Centers and Developing Centers held in Dr. Brooks’ name to the name of the
respective Centers.  Until such
certificates are so reissued, Dr. Brooks agrees to have such registrations
and certificates continue in his name, to take any actions required in
connection therewith as reasonably requested by the Manager and to execute any
necessary and appropriate power of attorney or other document to effectuate
this arrangement.  The Manager shall
reimburse Dr. Brooks for his reasonable expenses in connection with this
arrangement.

 

ARTICLE II

FEES PAYABLE TO THE CONTRACTOR

 

2.1.         Consulting and Oversight Fee.  During all Payment Periods (as defined below), the
Manager shall pay the Contractor for the services rendered under Article I
hereof a fee (the “Consulting and Oversight Fee”) equal to the sum of:

 

(A)          fifty percent (50%) of the aggregate
gross amount of all Management Fees (as defined below) actually collected by
Manager from an Existing Center during such Existing Center’s Payment Period;
and

 

(B)           forty percent (40%) of the aggregate
gross amount of all Management Fees actually collected by Manager from a
Developing Center during such Developing Center’s Payment Period.

 

“Payment Period” shall mean, with respect to any
Center, the period commencing on the Payment Commencement Date and ending on
the earlier of (x) the date, if any, on which Manager and/or its
affiliates purchase all of the “Option Interests” (as defined in the MIPA)
owned by Owners and Contractor in such Center pursuant to Section 1.4 of
the Purchase Agreement, dated
            , 2005,
to which Owners, several affiliates of Manager and others are parties (the “MIPA”),
(y) the termination of Contractor’s obligations under Section 1.2
hereof with respect to such Center or (z) the termination of the Agreement
under Section 3.2, 3.3 or 3.4 hereof. 
The “Payment Commencement Date” shall be (I) the Effective Date
with respect to (a) any Existing Center and (b) any Developing Center
at which procedures are being regularly performed as of the Effective Date, and
(II) with respect to any other Developing Center, the date on which the
first procedure is performed at such Developing Center.

 

2.2.         Calculation of Management Fees.  As used herein, “Management Fees” means all fees (but
not the amount of any reimbursements made under the Management Agreements)
payable, without any deductions whatsoever, under Section 5.1 of each of
those certain Management Agreements (the 

 

2

 

“Management
Agreements”) entered into or to be entered into between the Manager and each of
the Centers.  No amendment of any
Management Agreement will affect the calculation of the Management Fees, which
will continue to be calculated based on the terms of the Management Agreement
in force on the date hereof unless otherwise consented in writing by the
Contractor.  The expiration in accordance
with its terms of the term of a Management Agreement shall not be an amendment
for purposes of the preceding sentence. 
The Consulting and Oversight Fee shall be payable monthly on or before
the fifteenth (15th) day following the month in question and
will be accompanied by a statement setting forth in reasonable detail the
calculation of the amount due (a “Statement”). 
No party will take any steps intended to delay collection of Management
Fees, nor shall the assignment of this Agreement eliminate any obligation of
the Manager to pay to Contractor the amounts provided for herein.  The Contractor shall be entitled to cause an
independent certified public accountant reasonably satisfactory to the Manager
to perform an audit of the books and records of the Manager and its affiliates
upon which any Statement is based.  The
Contractor shall pay all costs and expenses of the audit unless such
examination shows an underpayment of at least five percent (5%) or more of the
total amount payable during the period covered by the audit, in which case the
costs of the audit shall be paid by the Manager.  Any underpayment (or overpayment) will bear
interest at prime plus 2%, and the amount of each underpayment (or overpayment)
shall be paid by Manager (or Contractor, as the case may be) within two (2) business
days of its calculation.

 

2.3.         Reimbursement of Contractor.  The Contractor shall be also reimbursed on a monthly
basis for its reasonable, out of pocket, direct expenses incurred in connection
with the services provided hereunder as are reasonably approved in advance by
the Manager or consistent with its policies for reimbursement of expenses
generally applicable to its senior managers.

 

ARTICLE III

TERM AND TERMINATION

 

3.1.         Term.  The term (the “Term”) of this Agreement shall
commence as of the Effective Date and, unless this Agreement is terminated
pursuant to this Article III, shall continue until the latest to occur of (i) the
date on which all Payment Periods shall have ended, (ii) the fifth
anniversary of the Effective Date and (iii) the date on which there remain
no outstanding Development Notices and Acquisition Notices (as defined
below).  As used herein, the “Initial Term”
shall consist of the period between the Effective Date and the second
anniversary of the Effective Date.  In
the event of the termination or expiration of this Agreement, the Contractor
shall be paid all earned and accrued compensation (but only upon and promptly
after Manager’s receipt of the Management Fees for which Contractor has earned
such compensation) and reimbursements provided for hereunder.

 

3.2.         Termination for the Contractor’s Breach.  The Manager
shall have the right to terminate this Agreement following the occurrence of a
Contractor/Owner Material Breach (as defined below).  In the event termination is for an alleged
Contractor/Owner Material Breach, the Manager shall provide the Contractor
written notice of such alleged Contractor/Owner Material Breach describing in
detail the basis upon which the Manager believes such termination is
justified.  The Contractor shall have
forty five (45) days (but only five (5) days in the case of any payment
default) from receipt of such notice during which to attempt to cure any
alleged Contractor/Owner Material Breach. 
Furthermore, if the Contractor has diligently attempted to effect such a
cure within such cure period but cannot complete such cure because of the
failure of a third party (such as a governmental agency) to act within such
period, then the Contractor shall have a reasonable time (not to exceed 180
days) beyond such cure period to complete its cure of the alleged basis for the
Manager’s election to terminate.  Upon a
cure being effected, the Manager’s right to terminate shall cease, and this
Agreement will continue in full force and effect. As used herein, a “Contractor/Owner
Material Breach” means (a) a breach by any Covered Party of the provisions
of Section 4.4 hereof, (b) a material breach by any Covered Party of
any restrictive covenant to

 

3

 

which a Covered Party is subject that is contained in
any of the agreements identified on Exhibit 3.2 hereto or, to the
extent not more restrictive than the terms of those covenants, any operating
agreement or partnership agreement of an entity that succeeds any entity
identified thereon or any operating agreement or partnership agreement entered
into as a part of an Acquisition Project or Development Project, (c) the
habitual breach of an Owner to perform the duties set forth on Exhibit 1.2
hereto in any material respect or (d) or the material breach by an Owner
of its obligations under Sections 5.2. 
In addition to the termination right in this Section 3.2, upon any
Contractor/Owner Material Breach which is not cured within the time period
provided for cure (if any), Manager shall recover from the Contractor and
Owners: (I) any and all damages and remedies to which it may be entitled,
and (II) at the option of Manager exercised in writing within sixty (60)
days after discovery of any breach described in clause (a) of the
definition of Contractor/Owner Material Breach which either (i) is a
knowing or willful breach or (ii) occurs during the Initial Term, Manager
may step into (without payment to any Covered Party therefor) the entire
position of any and all Covered Parties (with respect to all interests,
management contracts, remuneration, fees, etc.) in any project or activities
undertaken in violation of Section 4.4. 
The parties acknowledge and agree that clause (II) is provided for
herein because of the inherent uncertainty of the damages that may be proven
under clause (I), and such damages may be claimed not to the exclusion of
damages under clause (I).  The parties
have made provision therefor, not as a penalty, but to compensate the Manager
for the significant damages that would be suffered by the Manager as a result.

 

3.3.         Termination for Manager’s Breach.  The Contractor
shall have the right to terminate this Agreement following the occurrence of a
Manager Material Breach (as defined below) of this Agreement.  In the event termination is for an alleged
Manager Material Breach, the Contractor shall provide the Manager written
notice of such alleged Manager Material Breach describing in detail the basis
upon which the Contractor believes such termination is justified.  The Manager shall have forty five (45) days
(but only five (5) days in the case of any payment default) from receipt
of such notice during which to attempt to cure any alleged Manager Material
Breach, and upon such cure being effected, the Contractor’s right to terminate
shall cease and this Agreement will continue in full force and effect.  Furthermore, if the Manager has diligently attempted
to effect such a cure within such cure period but cannot complete such cure
because of the failure of a third party (such as a governmental agency) to act
within such period, then the Manager shall have a reasonable time (not to
exceed 180 days) beyond such cure period to complete its cure of the alleged
basis for the Contractor’s election to terminate.  As used herein, a “Manager Material Breach”
means Manager’s failure to pay when due any fee payable to Contractor under Section 2.1
or Section 4.3 or its material breach of its obligations under Sections
4.2 or 5.1.

 

3.4.         Termination
on Transfer.  If at any
time Manager or an affiliate of Manager either ceases to own an interest in any
Center identified on Schedule 1 hereto or ceases to be obligated to
perform the services to such center required pursuant to the applicable
Management Agreement (whether because such Management Agreement is terminated,
amended, assigned or Manager or its affiliate otherwise disposes of its
interest therein), then the Manager shall give written notice to Contractor not
later than ten (10) days prior to the disposition of Manager’s or its
affiliate’s interest in such Center and/or the assignment, termination or
disposition of Manager’s (or its affiliates) interest in such Management
Agreement, and during the ninety (90) period thereafter, Contractor may declare
its obligations under Section 1.2 with respect to such Center thereafter
null, void and of no further force and effect, upon which Manager’s obligations
under Section 2 with respect to such Center shall terminate.  In the event that Symbion, Inc., a
Delaware corporation, or its successor or acquiror (by any form of
transaction), shall cease to own, directly or indirectly, all of the
outstanding equity interests of Manager, then Contractor may treat such event
as a disposition of Manager’s interest each of the Centers for purposes of this
Section 3.4; provided, for the avoidance of doubt, a change in control,
acquisition of, or sale of all assets by Symbion, Inc. shall not give rise
to the right of Contractor to treat such event as a disposition of Manager’s
interest under this provision.

 

4

 

ARTICLE IV

SPECIAL RIGHTS REGARDING DEVELOPMENT; RESTRICTIVE COVENANTS

 

4.1.         Generally. 
The Contractor and the Owners will not be required to provide services
on a full-time or (except as provided in this Article IV) exclusive basis,
but shall devote such time and effort as are reasonably required to perform the
Contractor’s duties hereunder.  The
Owners shall, during the Term, devote such time and effort as reasonably
necessary for identifying and pursuing Development Projects and Acquisition
Projects in the Restricted Area, and shall use reasonable diligence to identify
Suitable Opportunities.  As used in this Article IV:
“Covered Parties” means the Contractor, the Owners, any entity controlled by
the Contractor or an Owner, a member of an Owner’s immediate family, or any
entity controlled by or under common control with an Owner or a member of an
Owner’s immediate family or any combination of the foregoing; “Surgical
Business” means any health care business which provides a facility in which
surgical procedures are performed and shall include, without limitation, a
specialty hospital, hospital or ambulatory surgery center; and “Restricted Area”
means the territory described on Exhibit 4.1 attached hereto.

 

4.2.         Development Opportunities. 
If Contractor or either Owner, anytime prior to the fifth anniversary of
the Effective Date, identifies or learns of a Suitable
Opportunity (as defined below) to develop a Surgical Business within the
Restricted Area, the Contractor shall give written notice to the Manager of
each such Suitable Opportunity (the “Development Notice”).  The Manager shall consult with the Contractor
regarding each such Suitable Opportunity, and Contractor shall reasonably
cooperate with the Manager in ascertaining all information about each such
Suitable Opportunity as Manager shall reasonably request.  Each such Suitable Opportunity that Manager
elects to pursue (a “Development Project”) shall be operated pursuant to the
terms of an Operating Agreement substantially in the form of Exhibit 4.2(A) hereto
and managed by Manager (or an affiliate of Manager) pursuant to a Management
Agreement substantially in the form of Exhibit 4.2(B) hereto,
in each case with such amendments as Manager shall reasonably request without
changing the
substance of the economic relationships or (in any material respects) the
rights or obligations of the Contractor contained in such Exhibits 4.2(A) and
4.2(B).  The Contractor and the
Manager shall initially have equal levels of ownership (prior to the offering
of any ownership interests therein to qualified and suitable third party
purchasers thereof) in
any Development Project; provided, however, to acquire such
ownership, Contractor shall (i) contribute cash for equity in the same
proportion as the Manager (or its affiliate) and on the same basis as
physicians investing in such Development Project and (ii) provide or
guaranty its proportion (based on its ownership interest) of such Development
Project’s indebtedness provided by or guaranteed by the Manager (or its
affiliate), in all cases such amounts to be reasonably determined by the
Manager in good faith.  The Manager shall
not be required to permit ownership by the Contractor as to a particular
Development Project, if neither the closing of an initial investment in or
commencement of material construction on such Development Project shall have
commenced within 18 months after the giving of the Development Notice.  If (i) Manager fails to indicate its interest in pursuing in
good faith and with reasonable diligence any opportunity for developing a
Surgical Business by written notice to Contractor within 45 days after receipt
of the Development Notice, (ii) Manager subsequently decides that it does not intend to
pursue such opportunity in good faith and with reasonable diligence (in which
case Manager will promptly send a written notice to Contractor) or (iii) at
any time Contractor sends Manager a written notice stating that Contractor
believes that Manager has not been pursuing such opportunity in good faith and
with reasonable diligence and describing the action(s) that, if taken by
Manager, would cause Contractor to believe that Manager is pursuing such
opportunity in good faith and with reasonable diligence, and Manager fails to
give reasonable assurances to Contractor of Manager’s good faith and reasonable
diligence in pursuing such opportunity within 20 days of receipt of such
notice, then such opportunity shall be
deemed to be a “Rejected Development”; 
provided, however, no Development Project shall be deemed to be a
Rejected Development any time prior to the second anniversary of the Effective
Date.  As used herein, “Suitable Opportunity” means an
opportunity that is reasonably consistent (as determined in

 

5

 

good faith by Owners) with parameters established from
time to time by Manager such that a reasonable person might conclude that
Symbion would be interested in pursuing such opportunity.  Consultant and Owners will not have any
obligation to provide services with respect to any Development Project after its
opening unless they reach agreement with Manager on a sharing of the management
fees for that Development Project.

 

4.3.         Acquisition Opportunities. 
If Contractor or either Owner, anytime prior to the fifth anniversary of
the Effective Date, identifies or learns of a Suitable Opportunity for Manager
or any affiliate of Manager to acquire (by any form of transaction, including the purchase
of securities from any Person, including existing owners thereof) an interest
in the equity or the assets of an existing Surgical Business within the Restricted
Area, the Contractor shall give written notice to the Manager of each such Suitable
Opportunity (the “Acquisition
Notice”).  The Manager shall consult with
the Contractor regarding each such Suitable Opportunity, and Contractor shall reasonably cooperate
with the Manager in ascertaining all information about each such Suitable
Opportunity as
Manager shall reasonably request.  The
Manager and/or its affiliates and the Contractor will work in good faith with
regard to such Suitable Opportunity that Manager elects to pursue
(an “Acquisition Project”). Upon the closing of the acquisition of an interest in or the assets
of a Qualified Acquisition Project, the Contractor shall receive from the
Manager a fee, payable in cash, equal to * percent (*%) of the gross purchase
price paid by Manager for its interest in the Qualified Acquisition Project
(inclusive of a proportionate amount of assumed indebtedness but exclusive of a
proportionate amount of any working capital acquired in excess of a normalized
working capital amount, such proportionate amount being equal to the percentage
interest acquired by Manager in the Qualified Acquisition Project).  Additionally, Contractor shall be entitled to
receive from Manager a share of all Management Fees actually collected by
Manager, as and when collected, from an Acquired Facility during the two years
after the later of (x) the closing of the acquisition or (y) with
respect to any center at which procedures are not being regularly performed as
of the closing of the acquisition, the date on which the first procedure is
performed at such center, which share shall equal * percent of the net revenues
of such Acquired Facility (or a comparable share relative to the Manager’s
management fees if based on some other amount). 
As used herein, “Qualified Acquisition Project” shall mean an
Acquisition Project identified in an Acquisition Notice with respect to which
the Manager or its affiliate acquires an interest in the equity or the assets
of within 18 months after the giving of the Acquisition Notice. 
If (i) Manager
fails to indicate its interest in pursuing in good faith and with reasonable
diligence any opportunity for acquiring such Surgical
Business by written notice to Contractor within 45 days after receipt of the
Acquisition Notice, (ii) Manager
subsequently decides that it does not intend to pursue such opportunity in good
faith and with reasonable diligence (in which case Manager will promptly send a
written notice to Contractor) or (iii) at any time Contractor sends Manager
a written notice stating that Contractor believes that Manager has not been
pursuing such opportunity in good faith and with reasonable diligence and
describing the action(s) that, if taken by Manager, would cause Contractor
to believe that Manager is pursuing such opportunity in good faith and with
reasonable diligence, and Manager fails to give reasonable assurances to
Contractor of Manager’s good faith and with reasonable diligence in pursuing
such opportunity within 20 days of receipt of such notice, then such opportunity shall be deemed to be a “Rejected
Acquisition”;  provided, however, no
Acquisition Project shall be deemed to be a Acquisition Development any time
prior to the second anniversary of the Effective Date. Consultant and Owners will not have any
obligation to provide services with respect to any Acquisition Project after
its acquisition unless they reach agreement with Manager on a sharing of the
management fees for that Project.

 

4.4.         Exclusivity; Restrictions on
Ownership; Nonsolicitation.

 

(a)           Restriction on
Activities in Connection with Surgical Businesses.  Prior to the fifth anniversary of the Effective Date,
Contractor and Owners hereby covenant and agree with Manager that Contractor
and Owners will not, and will cause all Covered Parties to not, directly or
indirectly, except in

 

6

 

connection with (I) Acquisition Projects and
Development Projects being pursued with Manager and/or its affiliates, (II) (after the second anniversary of
the Effective Date) Rejected Developments or Rejected Acquisitions that
are not in any Symbion Facility Zone (as defined below) or (III) the “Center
for Orthopedic Surgery” located at 6815 Noble Avenue, Van Nuys, CA 91405: (i) develop,
acquire or own an interest in, lease, manage, joint venture with or be employed by
a Surgical Business in the Restricted Area, or commence or agree to do any of
the foregoing or enter into discussions with any other person with respect to
the foregoing; or (ii) render any service to (as an employee, independent contractor or
otherwise) intended to assist any person, partnership, corporation or other
entity (other than Manager and/or its affiliates) in any of the activities in
the foregoing clause (i); provided, however, that the purchase of
a publicly traded security of a corporation engaged in such business or service
shall not in itself be deemed violative of this Agreement so long as Covered
Parties do not own, directly or indirectly, more than five percent (5%) of such
corporation.  As used herein, a “Symbion
Facility Zone” means the geographic radius or other defined area that surrounds
any healthcare facility in which Manager or any of its affiliates owns an
interest on the date of the delivery of a Development Notice or an Acquisition
Notice (as the case may be) in which physician members or partners who own
interests in such facility are prohibited, by the terms of an operating
agreement or partnership agreement, from owning interests in and conducting
certain other activities with respect to businesses in competition with such
facility, but in any case not more than a 25 mile radius.

 

(b)                 Nonsolicitation and Interference.  Prior to the fifth anniversary of the
Effective Date, Contractor and Owners hereby covenant and agree with Manager
that Contractor and Owners will not, and will cause all Covered Parties to not,
directly or indirectly, except in connection with Acquisition Projects and
Development Projects being pursued with Manager and/or its affiliates, (i) interfere
with, disrupt or attempt to disrupt any past, present or prospective
relationship, contractual or otherwise, related to or arising from any
agreement, relationship or contractual arrangement between the Manager or any
of its affiliates and any customer, client, supplier, owner or prospective
owner of any Surgical Business of which Manager or its affiliates is also an
owner or employee of the Surgical Business or any of its subsidiaries or
affiliates or (ii) solicit, entice or induce any employee (including all
corporate officers and managers) of the Manager or any of its affiliates to
leave their employment with the Manager or its affiliates, or hire any such
employee to work in any capacity.  For so
long as Manager or its affiliates continues to manage an Existing Center, a
Developing Center, or a center resulting from a Acquisition Project or
Development Project, Contractor and Owners hereby covenant and agree with
Manager that Contractor and Owners will not, and will cause all Covered Parties
to not, directly or indirectly, except in connection with Acquisition Projects
and Development Projects being pursued in conjunction with Manager and/or its
affiliates, solicit, entice or induce any physician who owns an interest in
that center to cease or reduce his or her business relationships with such
center.

 

(c)           Other Provisions. 
The Owners and the Contractor agree that the covenants and
agreements contained herein are, taken as a whole, reasonable and necessary
with respect to the activities covered and will not challenge the geographic
scope and duration of any such covenants in any proceeding to enforce such covenants.  If a judicial determination is made that any
of the provisions of this Section 4.4 constitutes an unreasonable or
otherwise unenforceable restriction against the Owners and the Contractor, the
provisions of this Section 4.4 shall be rendered void only to the extent
that such judicial determination finds such provisions to be unreasonable or
otherwise unenforceable.  In this regard,
the parties hereto hereby agree that any judicial authority construing this
Agreement shall be empowered to reduce any portion of the territory or
prohibited business activity from the coverage of this Section 4.4 and to
apply the provisions of this Section 4.4 to the remaining portion of the
territory or the remaining business activities not so reduced by such judicial
authority.

 

(d)           Acknowledgement of Reliance and Inducement.  The Contractor and the Owners
acknowledge and agree that their execution, delivery and performance of this
Agreement, and specifically

 

7

 

the covenants and obligations set forth in this Article IV,
were a material inducement for the affiliates of Manager to enter into and to
consummation the transactions contemplated by the MIPA and the MRPA, and that
the affiliates of Manager who were “Purchasers” thereunder would not have
entered into or consummated the transaction contemplated by the MIPA and the
MRPA unless the Contractor and the Owners had agreed to the provisions of this Article IV.  This acknowledgement is not intended to imply
or support any increased damages for any breach of this Agreement, nor shall it
be used for such purpose.

 

ARTICLE V

INDEMNIFICATION

 

5.1.         Indemnification
by the Manager.  The Manager agrees to indemnify and hold
harmless the Contractor and the Owners, their affiliates and their respective
shareholders, members, directors, officers, employees and agents (each, a “Contractor
Indemnified Party”) from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys’ fees and
expenses related to the defense of any claims) (a “Loss”), which may be
asserted against any of the Contractor Indemnified Parties, in connection with
the Contractor’s provisions of services, including the Contractor’s performance
of its duties hereunder, if such Loss has not been caused by the gross
negligence or willful misconduct of a Contractor Indemnified Party.  In no event shall the Manager have any
liability for any special, exemplary, punitive or consequential damages
(including loss of profit or revenue) suffered or incurred by any Contractor
Indemnified Party.

 

5.2.         Indemnification
by the Contractor and Owners.  The Contractor and each Owner agrees to
indemnify and hold harmless the Manager and its members, shareholders,
partners, directors, and officers, employees and agents (each, a “Manager
Indemnified Party”) from and against all Loss which may be asserted against an
Manager Indemnified Party as a result of the gross negligence or willful
misconduct of the Contractor in connection with the performance by the
Contractor of its duties under Article I hereof if such Loss has not been
caused by the gross negligence or willful misconduct of an Manager Indemnified
Party.  *.  In no event shall the Contractor or Owners
have any liability for any special, exemplary, punitive or consequential
damages (including loss of profit or revenue) suffered or incurred by any
Manager Indemnified Party.

 

5.3.         Exclusivity
of Remedy.  Other than claims arising under Article IV
hereof and claims for the non-payment of fees and expenses under Article II
hereof, and except as provided in Section 3.2 hereof, this Article V
shall constitute the sole remedy of the parties hereto with respect to any Loss
and/or any claim (including any Loss resulting from a third party claim) if
such Loss and/or claim arises out of this Agreement, whether such claim is
based in contract, tort, or otherwise, but excluding claims arising out of
willful misconduct or fraud.

 

ARTICLE VI

MISCELLANEOUS

 

6.1.         This Agreement shall be construed to be
in accordance with any and all federal and state laws, including laws relating
to Medicare, Medicaid, and other third party payers.  In the event there is a change in such laws,
whether by statute, regulation, agency or judicial decision, that has any material
effect on any term of this Agreement, or in the event that counsel to one party
determines that any term of this Agreement poses a risk of violating such laws,
then the applicable term(s) of this Agreement shall be subject to
renegotiation and either party may request renegotiation of the affected term
or terms of this Agreement, upon written notice to the other party, to remedy
such condition. In the interim, the parties

 

8

 

shall perform their obligations hereunder in full
compliance with applicable law.  The
parties expressly recognize that upon request for renegotiation, each party has
a duty and obligation to the other only to renegotiate the affected term(s) in
good faith and, further, the parties expressly agree that their consent to
proposals submitted by the other party during renegotiation efforts shall not
be unreasonably withheld.

 

6.2.         Should the parties be unable to
renegotiate the term or terms so affected so as to bring it/them into compliance
with the statute, regulation or judicial opinion that rendered it/them unlawful
or unenforceable within thirty (30) days of the date on which notice of a
desired renegotiation is given, then either party shall be entitled, after the
expiration of said thirty (30) day period, to terminate this Agreement upon
sixty (60) additional days written notice to the other party.

 

6.3.         Upon the written request of the Secretary
of Health and Human Services or the Comptroller General or any of their duly
authorized representatives, the Contractor and any of its affiliates providing
services with a value or cost of $10,000 or more over a twelve (12) month
period shall make available to the Secretary the contracts, books, documents
and records that are necessary to verify the nature and extent of the cost of
providing such services.  Such inspection
shall be available up to four years after the rendering of such services.  The parties agree that any applicable
attorney-client, accountant-client or other legal privilege shall not be deemed
waived by virtue of this Agreement.

 

6.4.         Section and Article headings
are for convenience of reference only and shall not be used to construe the
meaning of any provision of this Agreement.

 

6.5.         This Agreement may be executed in any number
of counterparts, each of which shall be an original and all of which shall
together constitute one Agreement.

 

6.6.         Should any part of this Agreement be
invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity and enforceability of the remaining portions.

 

6.7.         The execution and performance of this
Agreement by each party has been duly authorized by all applicable laws and
regulations and all necessary corporate action, and this Agreement constitutes
the valid and enforceable obligation of each party in accordance with its
terms.

 

6.8.         This Agreement and the rights of the
parties shall be construed and enforced in accordance with the laws of the
State of California without regard to its principles of conflicts of laws.  Each party hereby irrevocably and
unconditionally consents to venue in any state or federal court located in (or
the district of which includes) Los Angeles, California (the “Los Angeles
Courts”) for any litigation arising out of or relating to this Agreement, and
each party hereby waives any objection to the laying of venue of any such
litigation in the Los Angeles Courts and agrees not to plead or claim in any
Los Angeles Court that such litigation brought therein has been brought in an
inconvenient forum.  Each party hereby
irrevocably and unconditionally consents to a Los Angeles Court applying
California law to any litigation arising out of or relating to this Agreement.

 

6.9.         This Agreement may not be modified except
in writing executed by the party to be charged.

 

6.10.       This Agreement constitutes the entire
Agreement of the parties hereto and supersedes all prior Agreements and
representations with respect to the subject matter hereof.

 

6.11.       The parties hereto have each negotiated
the terms hereof and reviewed this Agreement carefully.  It is the intent of the parties that each
word, phrase, and sentence and other part hereof shall be

 

9

 

given its plain meaning, and that rules of
interpretation or construction of contracts that would construe any ambiguity
of any part hereof against the draftsman, by virtue of being the draftsman,
shall not apply.

 

6.12.       This Section 6.13 shall become
effective upon such date as the Manager is required to be in full compliance
with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”)
and the applicable privacy regulations at 45 C.F.R. Parts 160 and 164, as
amended (“Federal Privacy Regulations”), or at any earlier date mutually agreed
upon in writing by the parties, and shall remain in effect for so long as
required by law.  The Contractor agrees
to comply with the following:

 

a.       The
Contractor shall not use any of the Centers’ “protected health information” as
defined in 45 C.F.R. Section 164.501 (“Protected Health Information”)
other than: (a) as required to perform the Contractor’s obligations under
this Agreement; (b) as is necessary for the Contractor’s proper management
and administration; and (c) as permitted by law.

 

b.       The
Contractor may only disclose the Centers’ Protected Health Information: (a) to
its “workforce” as defined in 45 C.F.R. Section 160.103 (the “Workforce”)
for the purposes of performing its obligations under this Agreement; (b) as
is necessary for the Contractor’s proper management and administration; and (c) to
perform its legal responsibilities.

 

c.       If the
Contractor carries out any of its duties under this Agreement through a
subcontractor, which duties, by their nature, involve the use, custody,
disclosure, creation of or access to the Centers’ Protected Health Information,
the Contractor shall enter into a written contract for such work and the
contract shall contain provisions substantially identical to the restrictions
and conditions set forth in this Section 13.

 

d.       The Contractor
may use or disclose the Centers’ Protected Health Information as is necessary
for the Contractor’s proper management and administration only if: (a) the
Contractor obtains reasonable written assurances from the person or entity to
whom the Centers’ Protected Health Information is disclosed that such person or
entity shall hold the Centers’ Protected Health Information confidentially and
only use or further disclose the Centers’ Protected Health Information as
required by law or for the purpose for which it was disclosed to the person or
entity; and (b) the person or entity agrees to notify the Contractor of
any unauthorized use or disclosure of the Centers’ Protected Health Information
of which the person or entity becomes aware.

 

e.       The
Contractor will implement appropriate safeguards to prevent the use or
disclosure of the Centers’ Protected Health Information by the Contractor or
its subcontractors other than as provided for in this Agreement.  If the Contractor becomes aware of any use or
disclosure of the Centers’ Protected Health Information by the Contractor or
its subcontractors not provided for in this Agreement, the Contractor shall
report such information to the Center.

 

f.        Upon a
patient’s request, the Contractor shall make available all or a portion of the
designated record sets as defined in 45 C.F.R. Section 164.501, containing
the Centers’ Protected Health Information 
which is stored or maintained by the Contractor or otherwise in the
possession of the Contractor or its subcontractors (“Designated Record Sets”)
in accordance with 45 C.F.R. Section 164.524 and 45 C.F.R. Section 164.526.  Upon a patient’s request, the Contractor
shall make available such information in the Contractor’s possession, custody
or control that is required to make the accounting required by 45 C.F.R. Section 164.528.

 

10

 

g.       To the
extent required by the Federal Privacy Regulations, the Contractor shall make
its internal practices, books, and records relating to the use and disclosure
of the Centers’ Protected Health Information received from, or created or
received by the Contractor on behalf of the Centers available to the Secretary
of the Department of Health and Human Services to the extent required for
determining compliance with 45 C.F.R. 164.504(e). Notwithstanding the
foregoing, no attorney-client, accountant-client, or other legal privilege
shall be deemed waived by virtue of this Section 13.

 

h.       Upon
expiration or termination of this Agreement, the Contractor shall return all of
the Centers’ Protected Health Information. 
In the event that the Contractor determines that returning or destroying
all copies of the Protected Health Information is not feasible, the Contractor
shall extend the protections contained in this Section 13 to that portion
of the Centers’ Protected Health Information which is not returned or destroyed
and limit further uses and disclosures of such Protected Health Information to
those purposes that make the return or destruction of such Protected Health
Information not feasible.

 

6.13.       All notices permitted or required by this
Agreement shall be deemed given when in writing and delivered personally via
overnight courier or deposited in the United States mail, postage prepaid,
return receipt requested, addressed to the other party at the address set forth
below or such other address as the party may designate in writing:

 

	
   

  	
  To the Manager:

  	
  SymbionARC Management Services, Inc.

  
	
   

  	
   

  	
  40 Burton Hills Blvd., Suite 500

  
	
   

  	
   

  	
  Nashville, Tennessee 37215

  
	
   

  	
   

  	
  Attn: President

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Joseph A. Sowell, III, Esq.

  
	
   

  	
   

  	
  Waller Lansden Dortch & Davis, PLLC

  
	
   

  	
   

  	
  511 Union Street, Suite 2700

  
	
   

  	
   

  	
  Nashville, Tennessee 37219

  
	
   

  	
   

  	
   

  
	
   

  	
  To the Contractor:

  	
  To the addresses set forth on the signature page

  
	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
  Guth | Christopher LLP

  
	
   

  	
   

  	
  10866 Wilshire Blvd, Suite 1250

  
	
   

  	
   

  	
  Los Angeles, California 90024

  
	
   

  	
   

  	
  Attention: Theodore E. Guth

  

 

6.14.       EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY.  THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO
DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT NOT LIMITED TO,
THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN, COMMON LAW OR ANY
APPLICABLE STATUTE OR REGULATIONS.  EACH
PARTY HERETO ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS
RIGHT TO DEMAND TRIAL BY JURY.

 

6.15.       The
Contractor shall not assign this Agreement without the written consent of the
Manager, which consent shall not be unreasonably withheld.  Except in the event of the merger or
consolidation of the Manager, or the sale by the Manager of substantially all
of its assets in which all of

 

11

 

the Management Agreements are also being assigned, the
Manager shall not assign this Agreement, other than to a subsidiary corporation
or other entity controlled by or under common control with the Manager and to
which all of the Management Agreements are being assigned, without the written
consent of the Contractor, which consent shall not be unreasonably withheld.

 

[Remainder of page intentionally left blank.]

 

12

 

IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date and year first hereinabove written.

 

 

	
   

  	
  “MANAGER”

  
	
   

  	
   

  
	
   

  	
  SYMBIONARC MANAGEMENT SERVICES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  “CONTRACTOR”

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PARTHENON
  MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  “OWNERS”

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Andrew
  A. Brooks, M.D.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address
  for Notices

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Randhir
  S. Tuli

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices

  

 

13

 

SCHEDULE 1

 

List of Centers

(as of the Effective Date)

 

Existing
Centers

 

1.                                       an outpatient surgery center located at
9575 Brighton Way, Suite 100, Beverly Hills, CA 90210 (the “Brighton
Center”).

 

2.                                       an outpatient surgery center located at
16501 Ventura Boulevard, Suite 103, Encino, CA  91436 (the “Encino Center”).

 

3.                                       an outpatient surgery center located at
8670 Wilshire Boulevard, Suite 300, Beverly Hills, CA 90211 (the “Wilshire
Center”).

 

Developing
Centers

 

1.                                       an outpatient surgery center located at 15825
Laguna Canyon Road, Suite 200, Irvine, CA 92618 (the “Irvine Center”).

 

2.                                       an outpatient surgery center located at
51 North Fifth Avenue, Suite 101, Arcadia, CA 91006 (the “Arcadia Center”).

 

3.                                       an outpatient surgery center located at
696 Hampshire Road, Thousand Oaks, CA 91361 (the “Agoura Hills Center”).

 

 

EXHIBIT 1.2

 

Services of Andrew A. Brooks, M.D.

 

Owner
shall use good faith and reasonable diligence in providing consulting and
management advisory services to assist Manager in its oversight of the
efficient operation of the Existing Centers, and Developing Centers.

 

Services of Randhir S. Tuli

 

Owner
shall use good faith and reasonable diligence in providing consulting and
management advisory services to assist Manager in the day to day operation
of  the Existing Centers and Developing
Centers, including, without limitation, monitoring and/or assisting Manager, as
Manager may reasonably request, with the following:

 

A.                                   obtaining or maintaining the
accreditation of a Center (if the Center is accredited) with the proper
agencies and insurance companies, including JCAHO or AAAHC;

 

B.                                     the hiring, employing,
supervising, directing, leasing and discharging all non-physician personnel
performing services at a Center;

 

C.                                     the negotiation by Centers
of reimbursement and fee payment methods, in coordination with Manager with the
appropriate third party payers and state and federal agencies;

 

D.                                    the establishment of
staffing schedules, wage structures and personnel policies for all personnel at
a Center;

 

E.                                      the determination and
setting of patient charges for services provided by a Center;

 

F.                                      the development and
provision by Manager of policies and operating procedures to all departments of
a Center;

 

G.                                     the development of standard
formats for all charts, invoices, and other forms used in the operation of a
Center;

 

H.                                    the purchase, lease or
disposition by a Center of all supplies and equipment used in the operation of
the Center;

 

I.                                         the day-to-day operations of
a Center;

 

J.                                        the negotiating
or retention of contractual relationships for anesthesia services, radiology
services, and pathology services, at a Center.

 

K.                                    the
establishment and functioning of accounting, billing, receivables, credit and
collection policies and procedures for the Centers.

 

L.                                    the development of systems
for handling patient complaints.

 

2

 

EXHIBIT 3.2

 

Agreements

 

1.                                     Amended and Restated Operating Agreement
of Specialty Surgical Center, LLC, a California limited liability company

 

2.                                     Amended and Restated Operating Agreement
of Specialty Surgical Center of Encino, LLC, a California limited liability
company

 

3.                                     Amended and Restated Operating Agreement
of Specialty Surgical Center of Irvine, LLC, a California limited liability
company

 

4.                                     Amended and Restated Operating Agreement
of Specialty Surgical Center of Arcadia, LLC, a California limited liability
company

 

5.                                     Amended and Restated Operating Agreement
of Specialty Surgical Center of Thousand Oaks, LLC, a California limited
liability company

 

3

 

EXHIBIT 4.1

 

Restricted Area

 

The Restricted Area shall consist of the following
counties in California:

 

	
  Fresno

  
	
  Imperial

  
	
  Inyo

  
	
  Kern

  
	
  Kings

  
	
  Los Angeles

  
	
  Madera

  
	
  Mariposa

  
	
  Merced

  
	
  Mono

  
	
  Monterrey

  
	
  Orange

  
	
  Riverside

  
	
  San Benito

  
	
  San Bernardino

  
	
  San Diego

  
	
  San Jose

  
	
  San Luis Obispo

  
	
  San Mateo

  
	
  Santa Barbara

  
	
  Santa Cruz

  
	
  Stanislaus

  
	
  Tulare

  
	
  Ventura

  

 

4

 

EXHIBIT 4.2(A)

 

Form of Operating Agreement

 

The Form of Operating Agreement shall be
substantially the same as the Operating Agreement of Specialty Surgical Center
of Arcadia, LLC executed and delivered at the closing of the transactions
contemplated by the MIPA, except that the provisions in respect of the “Second
Option” contained in the Operating Agreement of Specialty Surgical Center of
Thousand Oaks, LLC executed and delivered at the closing of the transactions
contemplated by the MIPA shall be incorporated therein.  Alternatively, it is agreed that a limited
partnership agreement containing substantially the same provisions shall
qualify as such an Operating Agreement if the entity through which such
opportunity is pursued is determined to be a limited partnership rather than a
limited liability company.

 

5

 

EXHIBIT 4.2(B)

 

Form of Management Agreement

 

The Form of
Management Agreement shall be substantially the same as the Management
Agreement attached as Exhibit 6.9A to the MIPA providing for a * percent (*%)
management fee.

 

6

 

EXHIBIT 6.10

 

Form of Sellers’ Opinion

 

(To be attached at Closing)

 

 

FORM OF LEGAL OPINION

 

SymbionARC Management Services, Inc.

Symbion Ambulatory Resource Centres, Inc.

c/o Symbion, Inc.

40 Burton Hills Boulevard, Suite 500

Nashville, Tennessee 37215

 

Ladies and Gentlemen:

 

We have acted as
counsel to Parthenon Management Partners, LLC (the “Company”)
and Andrew A. Brooks, M.D. and Randhir S. Tuli (each an “Owner”
and, collectively the “Owners” in
connection with the Management Rights Purchase Agreement (the “Purchase Agreement”) between those
parties and SymbionARC Management Services, Inc.. This opinion is given to
you pursuant to section 6.10 of the Purchase Agreement. Unless defined herein,
terms that are defined in the Purchase Agreement have the meanings herein given
them in the Purchase Agreement. The term “Management Documents”
means the Purchase Agreement, the Consulting Agreement between the Owners and
SymbionARC Management Services, Inc. and Symbion Ambulatory Resource Centres, Inc.
and the Escrow Agreement as defined in Section 1.2 (b) of the
Purchase Agreement.

 

In
connection with this opinion letter we have examined certain corporate records,
certificates and documents in rendering this opinion. In making such examinations,
we have made certain customary assumptions, such as the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
lack of any undisclosed modifications, waivers or amendments to any agreements
reviewed by us, the conformity to authentic originals of all documents
submitted to us as certified or photostatic copies and the truth and accuracy
of factual statements contained in such documents and certificates. Except as
expressly set forth herein, we have also assumed that the execution, delivery
and performance of any agreements or consents are within the powers of each
signatory and have been duly authorized and validly carried out. We have
further assumed without investigation the legal capacity of each Owner signing
documents in his individual capacity.

 

Based
upon and subject to the assumptions, limitations, qualifications and exceptions
stated herein, we are of the opinion that:

 

1.                                     The Company is a limited liability
company duly formed and validly existing and in good standing as a limited
liability company under the laws of the State of California and has all
requisite company power and authority to execute, deliver and perform all of
its obligations under the Management Documents to which it is party:

 

2.                                     The execution, delivery and performance
by the Company of the Management Documents to which it is party have been duly
authorized by all necessary company action.

 

3.                                     Each Management Document constitutes a
valid and binding agreement in accordance with its terms of each Owner and the
Company to which it is party.

 

 

4.                                     The execution and delivery by the Company
and each Owner of the Management Documents to which each is a party do not to
our knowledge violate or conflict with any law or governmental regulation.

 

The
opinions expressed herein are subject to the following assumptions,
limitations, qualifications and exceptions:

 

We
express no opinion with respect to:

 

(a)           the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws and legal and equitable
principles relating to, limiting or affecting the enforcement of creditors’
rights generally including, without limitation, preferences and fraudulent
conveyances and concepts of materiality, reasonableness, good faith, fair
dealing and unconscionability;

 

(b)           the discretion of courts in awarding
equitable remedies (regardless of whether considered in a proceeding in equity
or at law), including, but not limited to, specific performance or injunctive
relief;

 

(c)           the unenforceability under certain
circumstances of provisions stipulating a liquidated damages or imposing
penalties or forfeitures upon delinquency in payment or the occurrence of a
default or failure to perform certain acts, including, but not limited to,
provisions imposing penalties, forfeitures, reinstatement of rights or an
increase in interest or dividend rate upon the occurrence of a default or
failure to perform certain acts;

 

(d)           the enforceability of the
indemnification provisions of the Management Documents;

 

(e)           the enforceability of the
restrictions on competition of the Management Documents;

 

(e)           the application or contravention of Section 548
of the federal Bankruptcy Code and comparable provisions of state law or of any
antifraud laws, antitrust or trade regulation laws;

 

(f)            the enforceability of the choice of
law or choice of forum clauses, or any waiver of any right to trial by jury;
and

 

(g)           the effect of judicial decisions or
applicable law which permit the introduction of extrinsic evidence to modify
the terms or the interpretation of any agreement.

 

For
purposes of the opinions set forth in paragraph 1 with respect to good standing
of the Company, we are relying solely upon a certificate of good standing from
the State of California (a copy of which is attached hereto as Exhibit A). We express no
opinion with respect to such matters beyond the date of that certificate.

 

The
opinions set forth above in paragraph 4 are based upon our consideration of
only those statutes, rules and regulations which in our experience are
normally applicable to transactions such as those contemplated by the
Management Documents. We have not undertaken any research for purposes of
determining whether the Company or any Owner is 

 

2

 

subject to any law or other governmental requirement other than to
those laws and other requirements which in our experience a lawyer in the State
of California exercising customary professional diligence would reasonably
recognize to be directly applicable to persons in their circumstances as we
understand them.

 

We are
relying in part as to certain factual matters on a Certificate of the Company
and of each Owner, a copy of which is attached hereto as Exhibit B.
We have not undertaken any independent investigation to determine the existence
or nonexistence of such facts. Similarly, whenever our opinion herein with
respect to the existence or nonexistence of facts is qualified by the phrase “to
our knowledge”, or any similar phrase implying a limitation on the basis of
knowledge, such phrase means only that the individual attorneys in this firm
who devoted substantive attention to the matters involving the Management
Documents do not have actual knowledge that the facts as stated herein are
untrue. Such persons have not undertaken any investigation to determine the
existence or nonexistence of such facts in connection with the preparation of
this opinion, and no inference as to the extent of their investigation should
be drawn from the fact of our representation of the Company and the Owners. We
have not represented those entities in other matters.

 

We are
admitted to the bar in the State of California. Our opinions are limited to the
laws of the State of California and the United States of America, and we express
no opinion as to the laws of any other jurisdiction.

 

Our
opinion is rendered as of the date hereof and is based solely on existing laws,
present judicial interpretations and the facts as we understand them. We assume
no obligation to revise or supplement this opinion should those change, whether
by legislative action, judicial decision or otherwise.

 

This
opinion letter is rendered solely for your benefit in connection with the
Management Documents, and may not be relied upon by you for any other purpose
or furnished to, used, circulated, quoted or referred to, or relied upon by,
any other person without our prior written consent. Without our written
consent: (i) no person other than you may rely on this letter for any
purpose; (ii) this letter may not be cited or quoted in any financial
statement, prospectus, private placement memorandum or other similar document; (iii) this
letter may not be cited or quoted in any other document or communication which
might encourage reliance upon this letter by any person or for any purpose
excluded by the restrictions in this paragraph; and (iv) copies of this
letter may not be furnished to anyone for purposes of encouraging such
reliance.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Guth I Christopher LLP

  

 

3

 

Exhibit A

 

Certificate of Good
Standing of Parthenon Management Partners, LLC

 

4

 

Exhibit B

 

CERTIFICATE OF 

PARTHENON MANAGEMENT PARTNERS, LLC,

ANDREW BROOKS AND RANDHIR TULI 

IN SUPPORT OF OPINION OF 

GUTH | CHRISTOPHER LLP

 

August 1, 2005

 

The
undersigned, Andrew Brooks and Randhir Tuli hereby certify that they are,
respectively, the duly elected, qualified and acting Manager(s) of
Parthenon Management Partners, LLC, a California limited liability company (the
“Company”), and further certify in
support of the Opinion of Guth I Christopher LLP being rendered
pursuant to that certain Management Rights Purchase Agreement (the “Purchase Agreement”), dated as of July 27,
2005. Capitalized terms used but not defined herein or in the Opinion shall
have the meanings given them in the Purchase Agreement.

 

1.             Attached
hereto as Exhibit 1 are true,
complete and correct copies of resolutions duly adopted at meetings or by
written consents of the managers and members of the Company approving the
terms, conditions and provisions of the Management Documents. Said resolutions
have not been modified, amended or rescinded and remain in full force and
effect as of the date hereof. No other resolutions have been adopted by the
managers or members of the Company with respect to the Management Documents and
the transactions contemplated thereby and referred to therein.

 

2.             Andrew
Brooks and Randhir Tuli are the sole owners and managers of the Company. No other
person has any right to vote or consent with respect to any decision by the
members or managers of the Company.

 

3.             Attached
hereto as Exhibit 2 is a true,
complete and correct copy of the currently effective Operating Agreement of the
Company dated     . There has been no further amendment to
the Operating Agreement since such date, and no further amendment has been
authorized or approved by the managers or the members of the Company as of the
date hereof.

 

4.             Attached
hereto as Exhibit 3 is a true, complete
and correct copy of a certificate of good standing of the Company from the
state of California

 

5.             The
Company’s representations in the Purchase Agreement and each of the Management
Documents are true and correct in all respects as of the date hereof and may be
relied upon by Guth l Christopher LLP in rendering its Opinion.

 

5

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate as of the date
first  above written.

 

	
  PARTHENON MANAGEMENT PARTNERS,
  LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Andrew Brooks,
  individually and as managing member of Parthenon

  	
   

  	
  Randhir Tuli,
  individually and as managing member of Parthenon

  

 

6

 

EXHIBIT 1

 

Resolutions

 

(see attached document)

 

7

 

EXHIBIT 2

 

Operating Agreement

 

(see attached document)

 

8

 

EXHIBIT 3

 

Certificate of Good Standing

 

(see attached document)

 

9

 

EXHIBIT 7.9

 

Form of Purchasers’ Opinion

 

(To be attached at Closing)

 

 

August 1, 2005

 

To the Persons Set
Forth on Exhibit A Hereto

 

Ladies and
Gentlemen:

 

We have acted as counsel to Symbion Ambulatory Resource Centers, Inc.,
a Tennessee corporation (“SARC”), SymbionARC Management Services, Inc., a
Tennessee corporation (the “Manager”), SymbionARC Support Services, LLC, a
Tennessee limited liability company (“Symbion Support”), and SMBISS Beverly
Hills, LLC, a Tennessee limited liability company, SMBISS Encino, LLC, a
Tennessee limited liability company, SMBISS Irvine, LLC, a Tennessee limited
liability company, and SMBISS Arcadia, LLC, a Tennessee limited liability
company (each a Purchaser and collectively, the “Purchasers”), in connection
with the preparation, execution and
delivery of the Purchase Agreement, dated July 27, 2005 (the “Purchase
Agreement”) among SARC, the Purchasers and the members of Specialty Surgical
Center, LLC, a California limited liability company, Specialty Surgical Center
of Encino, LLC, a California limited liability company, Specialty Surgical
Center of Irvine, LLC, a California limited liability company, and Specialty
Surgical Center of Arcadia, LLC, a California limited liability company (each
an “LLC” and collectively, the “LLCs”) identified on Exhibit A to
the Purchase Agreement (each a “Seller” and, collectively, the “Sellers”), and
the Management Rights Purchase Agreement, dated July 27, 2005 (the “Management
Rights Purchase Agreement”) among SARC, the Manager and Parthenon Management
Partners, LLC, a California limited liability company (the “Company”), Andrew
A. Brooks, M.D. and Randhir S. Tuli (each an “Owner” and, collectively, the “Owners”)
and certain other agreements, instruments and documents related to the Purchase
Agreement and the Management Rights Purchase Agreement. This opinion is being
delivered to you at the request of the SARC pursuant to Section 7.9 of the
Management Rights Purchase Agreement. Capitalized terms used herein and not
otherwise defined herein shall have the same meanings herein as defined in the
Purchase Agreement.

 

In rendering the opinions set forth herein, we have examined and relied
on originals or copies, certified or otherwise identified to our satisfaction,
of the following:

 

(a)                                  the Purchase Agreement;

 

 

(b)                                 the Management
Rights Purchase Agreement;

 

(c)                                  the Consulting Agreement by and among the
Manager, the Company and the Owners;

 

(d)                                 Escrow Agreement by and among Bank of
America, N.A. (the “Escrow Agent”), the Manager, the Company and the Owners;

 

(e)                                  a certified copy of the Charter of SARC, as filed with the Tennessee
Secretary of State on August 9, 1995, as amended, and a certified copy of
the current Bylaws of SARC (collectively, the “SARC Governing Documents”);

 

(f)                                    a certified copy of the Charter of the Manager, as filed with the
Tennessee Secretary of State on April 15, 1998, as amended, and a
certified copy of the current Bylaws of the Manager (collectively, the “Manager
Governing Documents”);

 

(g)                                 a certified copy of the Articles of
Organization of Symbion Support, as filed with the Tennessee Secretary of State
on July 20, 2005 and a certified copy of the current Operating Agreement
of Symbion Support (collectively, the “Symbion Support Governing Documents”);

 

(h)                                 a certified copy of the Articles of Organization of each of the
Purchasers, as filed with the Tennessee Secretary of State on July 20,
2005, as amended, and a certified copy of the current Operating Agreement of
each of the Purchasers (collectively, the “Purchasers Governing Documents”,
together with the SARC Governing Documents, the Symbion Support Governing
Documents and the Manager Governing Documents the “Governing Documents”);

 

(i)                                     a certified copy of certain resolutions
of the Board of Directors of each of SARC and the Manager adopted on July 27,
2005;

 

(j)                                     a certified copy of certain resolutions
of the respective sole member of Symbion Support and each of the Purchasers
adopted on July 27, 2005;

 

(k)                                  a Certificate of Existence from the
Tennessee Secretary of State, dated July 25, 2005 attesting to the “good
standing” of the Manager and Symbion Support in such jurisdiction;

 

(l)                                     a Certificate of Existence from the
Tennessee Secretary of State, dated July 28, 2005 attesting to the “good
standing” of the SARC in such jurisdiction;

 

(m)                               a Certificate of Existence from the
Tennessee Secretary of State, dated July 27, 2005 attesting to the “good
standing” of each of the Purchasers in such jurisdiction;

 

2

 

(n)                                 a Certificate of Status from the
California Secretary of State, dated July 26, 2005 attesting to the “good
standing” as a foreign corporation of the Manager in such jurisdiction; and

 

(o)                                 a Certificate of Good Standing from the
California Secretary of State, dated July 27, 2005 attesting to the “good
standing” as a foreign limited liability company of each the Purchasers and
Symbion Support in such jurisdiction.

 

In addition, we have examined such other documents, agreements, and
certificates as we have deemed necessary or appropriate as a basis for the
opinion set forth below.

 

The documents described in clauses (a) through (d) above are
collectively referred to as the “Transaction Documents.”  References in opinion this to (i) “Applicable
Laws” shall mean those laws, rules and regulations of the State of Tennessee and of the United
States of America which, in our experience, are normally applicable to
transactions of the type contemplated by the Agreement without considering the
participation by SARC, the Manager, Symbion Support or any of the Purchasers
(collectively, the “Opinion Parties”) in any regulated industry; (ii) the
term “Governmental Authorities” means any Tennessee or federal executive, legislative, judicial,
administrative or regulatory body having jurisdiction over the Opinion Parties
without considering the participation by the Opinion Parties in any regulated
industry; (iii) the term “Governmental Approval” means any consent,
approval, license, authorization or validation of, or filing, recording or registration
with, any Governmental Authority without considering the participation by the
Opinion Parties in any regulated industry; and (iv) the term “Applicable
Orders” means those orders or decrees of Governmental Authorities which have
been specifically disclosed to us in writing by the Opinion Parties in Exhibit 1
hereto.

 

Assumptions

 

In our examination we have assumed the genuineness of all signatures
(other than those on behalf of the Opinion Parties), the legal capacity of
natural persons, the authenticity of all documents submitted to us as
originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies, and the authenticity of the originals of
such copies.  As to any facts material to
this opinion which we did not independently establish or verify, we have relied
upon statements and representations of the Opinion Parties and each of their
officers and other representatives and of public officials, and have assumed
that such matters remain true and correct through the date hereof.

 

We have further assumed, that:

 

(i)                                     The execution, delivery and performance
by each of the Opinion Parties of the Transaction Documents to which each is a
party does not and will not conflict with, contravene, violate or constitute a
default under (i) any lease, indenture, instrument or other agreement to 

 

3

 

which each of the
Opinion Parties or its property is subject, (ii) any rule, law or
regulation to which each of the Opinion Parties is subject (other than
Applicable Laws as to which we express our opinion in paragraph 7 herein) or (iii) any
judicial or administrative order or decree of any governmental authority (other
than Applicable Orders as to which we express our opinion in paragraph 7
herein).

 

(ii)                                  No authorization, consent or other
approval of, notice to or filing with any court, governmental authority or
regulatory body (other than Governmental Approvals as to which we express our
opinion in paragraph 7 herein) is required to authorize or is required in
connection with the execution, delivery or performance by each of the Opinion
Parties of any Transaction Documents to which it is a party or the transactions
contemplated thereby.

 

(iii)                               There is no action, suit or proceeding
pending or threatened against or affecting the Opinion Parties before any
court, governmental department, or other authority (other than Applicable
Orders as to which we express our opinion in paragraph 7 herein) which purports
to affect the legality, validity or enforceability of any Transaction Document
or the transactions contemplated thereby.

 

(iv)                              Each Transaction Document is the legal,
valid, and binding obligation of each party thereto other than the Opinion
Parties, enforceable against such other parties in accordance with its terms.

 

Members of this Firm preparing this Opinion are
admitted to practice in the State of Tennessee. 
We express no opinion as to the laws of any jurisdiction other than (i) the
laws of the State of Tennessee and (ii) the federal laws of the United
States of America to the extent specifically referred to herein.  We
call to your attention that all of the Transaction Documents specify that they
are to be governed by the laws of the State of California. In rendering the
opinions set forth herein, we have assumed, with your permission, that
Tennessee law governs the Transaction Documents notwithstanding contractual
choice of law clauses or conflicts of law principles to the contrary.  We call to your attention that the foregoing
assumption does not bind any court and is made solely to facilitate the
rendering of this opinion.  We further
call to your attention that we have made no investigation regarding the
differences, if any, between California law and Tennessee law, and we expressly
disclaim responsibility to do so.

 

Based upon the foregoing and subject to the limitations,
qualifications, exceptions, and assumptions set forth herein, we are of the
opinion that:

 

(1)                                  Each of SARC and the Manager is a
corporation existing and in good standing under the laws of the State of Tennessee.  The Manager is qualified to do business and
is in good standing as a foreign corporation under the laws of the State of
California.

 

4

 

(2)                                  Each of Symbion Support and the
Purchasers is a limited liability company existing in good standing under the
laws of the State of Tennessee.  Each of
Symbion Support and the Purchasers is qualified to do business and is in good
standing as a foreign limited liability company under the laws of the State of
California.

 

(3)                                  Each of SARC and the Manager has the
corporate power and authority to execute, deliver and perform all of its
obligations under each of the Transaction Documents to which it is a party.  Each of Symbion Support and the Purchasers has
the limited liability company power and authority to execute, deliver and
perform all of its obligations under each of the Transaction Documents to which
it is a party.

 

(4)                                  The execution and delivery of each of the
Transaction Documents to which each of SARC and the Manager is a party, and the
performance of all of its obligations under each such Transaction Document have
been authorized by all requisite corporate action on the part of SARC and the
Manager.

 

(5)                                  The execution and delivery of each of the
Transaction Documents to which each of Symbion Support and the Purchasers is a
party, and the performance of all of its obligations under each such
Transaction Document have been authorized by all requisite limited liability
company action on the party of each of Symbion Support and the Purchasers.

 

(6)                                  The Transaction Documents to which each
of the Opinion Parties is a party have each been executed and delivered by each
of the Opinion Parties.

 

(7)                                  The execution, delivery, and performance
by each of the Opinion Parties of each of the Transaction Documents to which it
is a party do not (i) conflict with each such party’s Governing Documents,
(ii) contravene any provision of any Applicable Law, (iii) require
any Governmental Approval, which has not been obtained or taken and is not in
full force and effect, except as set forth in the Purchase Agreement, or (iv) contravene
any applicable provision of any Applicable Order.

 

(8)                                  Each Transaction Document to which each
of the Opinion Parties is a party constitutes the valid and binding obligation
of such party, enforceable against such party in accordance with its terms.

 

5

 

Qualifications

 

The
opinions expressed above are subject to the following qualifications:

 

(i)                                     Enforcement may be limited by applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally.

 

(ii)                                  Enforcement may be limited by general
principles of equity (regardless of whether enforcement is sought in equity or
at law).

 

(iii)                               We express no opinion as to: (a) the
enforceability of the indemnification provisions in the Transaction Documents
or (b) the enforceability of any rights to liquidated damages, penalties,
punitive damages, indemnification, or contribution insofar as such rights
purport to limit or affect a claim based on tort or duty imposed by law.

 

(iv)                              We express no opinion as to provisions
that specify the law of a particular jurisdiction as governing law.

 

(v)                                 We express no opinion with respect to the
enforceability of (a) a requirement that provisions of the Transaction
Documents may only be waived in writing, (b) provisions stating that the
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of such right or remedy, (c) rights to attorneys’ fees to the
extent limited by applicable laws that provide that any recovery of attorneys’
fees is limited to reasonable attorneys’ fees, (d) provisions by which any
of the Opinion Parties waives the right to become a debtor under the U.S.
Bankruptcy Code or other bankruptcy law, (e) provisions stating that the
provisions of the Transaction Documents are severable, and (f) provisions
regarding confession of judgment which violate public policy.

 

(vi)                              We express no opinion as to the effect of
compliance or non-compliance of any party (other than the Opinion Parties) to
any of the transactions contemplated by any of the Transaction Documents with
any laws or regulations applicable because of the legal or regulatory status or
the nature of the business of any party (other than the Opinion Parties) to
such transactions.

 

(vii)                           We express no opinion regarding
provisions of the Transaction Documents that purport to confer jurisdiction
upon any court or which lay venue in a specific court or courts.

 

(viii)                        We express no opinion regarding the
enforceability of any covenants regarding confidentiality contained or
referenced in the Transaction Documents.

 

6

 

This opinion is given as of the date hereof, and we disclaim any
obligation to update this opinion letter after the date hereof.  This opinion is rendered only to the
addressee and is solely for its benefit in connection with the above
transactions.  This opinion may not be
relied upon by the addressee for any other purpose, or quoted to or relied upon
by any other person, firm, corporation, or other entity for any purpose without
our prior written consent.

 

Very truly yours,

 

7

 

Exhibit A

 

Parthenon
Management, LLC

Andrew A. Brooks,
M.D.

Randhir S. Tuli

 

 

Exhibit 1

 

Applicable Orders

 

None

 

 

SCHEDULE
1

 

Affiliate
of Purchaser

 

SymbionARC
Management, Inc.

 

 

SCHEDULE
2.1

 

Consents

 

None.

 

 

SCHEDULE
2.4(A)

 

UCC
Searches

 

See Attached.

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 17,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  PARTHENON
  MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  SECRETARY OF STATE, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

NOTE: SIMILAR NAMES FOUND, PLEASE SEE ATTACHED LISTING FOR DETAILS.

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone : (949) 955-9585   (800) 562-6439   Fax (800) 562-650

Internet Address:  cba@cbaclet.com

 

 

Search Date:        Jun. 17, 2005

 

CHARLES BACLET AND ASSOCIATES,
INC.

 

California Similar Name Addendum Report

 

Truncated search name:  PARTHENON        Effective Index Date:  Jun 13, 2005

 

Contains all debtor names not included on the final results report.

 

	
  Filing #

  	
   

  	
  Debtor Name

  	
   

  	
  Debtor Address

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  199719560617

  	
   

  	
  THE PARTHENON

  	
   

  	
  7357 E ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  200030962638

  	
   

  	
  PARTHENON
  ENTERPRISES INC. DBA BEAUTY FIRST

  	
   

  	
  10990 FOOTHILL
  BLVD STE 120; RANCHO CUCAMONGA

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  199913160386

  	
   

  	
  PARTHENON
  ENTERTAINMENT

  	
   

  	
  2201 N.
  HOLLYWOOD WY; BURBANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  200032760519

  	
   

  	
  THE PARTHENON
  GROUP LLC

  	
   

  	
  200 STTE ST;
  BOSTON

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  200032760523

  	
   

  	
  THE PARTHENON
  GROUP LLC

  	
   

  	
  200 STATE ST;
  BOSTON

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  199428660193

  	
   

  	
  PARTHENON
  RESTAURANT

  	
   

  	
  7357 ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  199605860308

  	
   

  	
  PARTHENON
  RESTAURANT

  	
   

  	
  7357 ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1992197633

  	
   

  	
  PARTHENON
  RESTAURANT

  	
   

  	
  7357 E ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1993138590

  	
   

  	
  PARTHENON
  RESTAURANT

  	
   

  	
  7357 ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1994157769

  	
   

  	
  PARTHENON
  RESTAURANT

  	
   

  	
  7357 ALONDRA
  BLVD; PARAMOUNT

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  200319660058

  	
   

  	
  PARTHENON
  SOFTWARE, INC.

  	
   

  	
  13259 KIBBINGS
  RD; SAN DIEGO

  

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 17,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  TULI, RANDHIR S.

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  SECRETARY OF
  STATE, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone :
(949) 955-9585   (800) 562-6439   Fax
(800) 562-650

Internet Address:  cba@cbaclet.com

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 17,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  BROOKS, ANDREW
  A. M.D.

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  SECRETARY OF STATE, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/13/05

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/13/05

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone :
(949) 955-9585   (800) 562-6439   Fax
(800) 562-650

Internet Address:  cba@cbaclet.com

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 24,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  PARTHENON
  MANAGEMENT PARTNERS, LLC

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  LOS ANGELES COUNTY RECORDER, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone :
(949) 955-9585   (800) 562-6439   Fax
(800) 562-650

Internet Address:  cba@cbaclet.com

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 24,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  TULI, RANDHIR S.

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  LOS ANGELES COUNTY RECORDER, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone :
(949) 955-9585   (800) 562-6439   Fax
(800) 562-650

Internet Address:  cba@cbaclet.com

 

 

	
  [CHARLES
  BACLET

  	
   

  	
   

  
	
  AND

  	
   

  	
   

  
	
  ASSOCIATES,
  INC.]

  	
   

  	
  CBA is an affiliate of
  National Registered Agents, Inc.

  

 

Search Report

 

	
   

  	
  REPORT
  DATE:

  	
   

  	
  June 24,
  2005

  
	
   

  	
  JOB
  NUMBER:

  	
   

  	
  54295

  
	
   

  	
  CLIENT REF. #:

  	
   

  	
  BROOKS / TULI

  

 

	
  SUBJECT
  NAME:

  	
   

  	
  BROOKS, ANDREW
  A.  M.D.

  
	
   

  	
   

  	
   

  
	
  JURISDICTION:

  	
   

  	
  LOS ANGELES COUNTY RECORDER, CALIFORNIA

  

 

	
  SEARCH:

  	
   

  	
  Through:

  	
   

  	
  Findings:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  U.C.C.
  Filings

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Federal
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State
  Tax Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO
  RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Abstracts of Judgment Liens

  	
   

  	
  06/17/2005

  	
   

  	
  NO RECORD

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other:

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

NOTE: THERE WERE NO RECORDS FOUND REFLECTING THE GIVEN NAME AND
ADDRESS.***

 

PLEASE NOTE:  “CBA”
has made every possible effort to acquire accurate information from the records
searched.  We guarantee the information
to be as accurate as REASONABLE CARE
can make it.  Therefore, the ultimate
responsibility for the accuracy of maintaining files remains with the State
agency from which the information was obtained and we accept NO LIABILITY beyond the exercise of REASONABLE
CARE in obtaining the above information.

 

2030 Main Street, Suite 1030  ·  Irvine, California 92614   Phone :
(949) 955-9585   (800) 562-6439   Fax
(800) 562-650

Internet Address:  cba@cbaclet.com

 

 

SCHEDULE
2.8

 

Permits

 

Business licenses in each local jurisdiction in which Parthenon
operates.  Copies of such business
licenses are attached hereto.

 

 

	
  

  	
   

  	
   

  	
  CITY OF BEVERLY HILLS

  	
   

  	
   

  	
   

  
	
  455 N. Rexford Dr.

  	
   

  	
  FINANCE ADMINISTRATION

  	
   

  	
   

  	
  C

  
	
  Beverly Hills, CA
  90210-4817

  	
   

  	
  BUSINESS TAX REGISTRATION

  	
   

  	
  Calendar Year:

  	
  2005

  
	
  310.285.2427

  	
   

  	
  PROFESSIONAL /
  SEMI-PROFESSIONAL

  	
   

  	
  Tax
  No:

  	
  New

  

 

	
  Business
  Address

  	
   

  	
  Business
  Information

  
	
   

  	
   

  	
   

  
	
  Parthenon
  Management Partners, LLC

  	
   

  	
  Starting Date:

  	
  6/29/05

  
	
  Business Name

  	
   

  	
  Class:

  	
  8999

  
	
  8670 Wilshire Blvd.

  	
  # 301

  	
   

  	
  Type:

  	
  Medical / Consulting

  
	
  Street Address

  	
  Suite

  	
   

  	
  Owner / Partners:

  	
  Randhir S. Tuli

  
	
  Beverly Hills

  	
  CA

  	
  90212

  	
   

  	
   

  	
  Andrew A. Brooks

  
	
  City

  	
  State

  	
  Zip

  	
   

  	
  Telephone:

  	
  310-360-3824

  
	
   

  	
   

  	
  Fax:

  	
  310-388-1552

  
	
  Mailing
  Address

  	
   

  	
  Proprietorship: (SS#)

  	
   

  
	
   

  	
   

  	
  Partnership: (FIN)

  	
   

  
	
  Parthenon Management Partners, LLC

  	
   

  	
  Corporation: (FIN)

  	
   

  
	
  Business Name

  	
   

  	
  Email Address:

  	
   

  
	
  8670 Wilshire Blvd.

  	
  # 301

  	
   

  	
  Web Site:

  	
   

  
	
  Street Address

  	
   

  	
   

  	
   

  
	
  Beverly Hills

  	
  CA

  	
  90212

  	
   

  	
   

  	
   

  
	
  City

  	
  State

  	
  Zip

  	
   

  	
   

  	
   

  
							

 

Please make account changes on reverse side

 

TAX
CALCULATION

 

	
  1.

  	
  This registration is for the period
  from:  06/29/05 to 12/31/05

  	
   

  	
   

  	
   

  
	
  2.

  	
  Tax basis: number of people
  employed previous year

  	
   

  	
  2.

  	
  1.60

  
	
  3.

  	
  Base — 1st 2080 hrs. at $1,095.41

  	
   

  	
  3.

  	
  1,095.41

  
	
  4.

  	
  Each additional hr. Pro /
  Semi at $0.52664

  	
   

  	
  4.

  	
  0.00

  
	
  5.

  	
  Each additional hr.
  Non-Prof. at $0.10580

  	
   

  	
  5.

  	
  110.03

  
	
  6.

  	
  Penalty Charge  0%

  	
   

  	
  6.

  	
  0.00

  
	
  7.

  	
  Previous Balance

  	
   

  	
  7.

  	
  0.00

  
	
  8.

  	
  Interest Charges (all)

  	
   

  	
  8.

  	
  0.00

  
	
  9.

  	
  Credit or Debit (other)

  	
   

  	
  9.

  	
  0.00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Total

  	
   

  	
  1,205.44

  
	
   

  	
  Payment Date         /       /       

  	
  Payment(s)

  	
   

  	
  0.00

  
	
  Please
  make check payable to:  City of Beverly
  Hills

  	
  Balance Due

  	
   

  	
  1,205.44

  

 

MESSAGE

 

ACCORDING TO SECTION 3-1.201 OF THE
MUNICIPAL CODE, EVERY BUSINESS MUST REGISTER WITH THE CITY AND PAY ALL BUSINESS
TAXES PRIOR TO THE FIRST DAY OF OPERATION. PAYMENTS WILL BE CONSIDERED
DELINQUENT AND A PENALTY WILL BE ASSESSED IF NOT RECEIVED WITHIN 30 DAYS OF THE
FIRST DAY OF OPERATION. PENALTIES ACCRUE AT A RATE OF 10% PER MONTH, TO A
MAXIMUM OF 50%, INTEREST AT 1.5% / MO.

 

I acknowledge that my receipt of a tax
certificate merely confirms that I have completed and filed the required tax
registration form with the Beverly Hills Department of Finance Administration
and paid the required taxes and other lawful charges.  I understand and agree that any tax certificate
which may be issued to me by the Beverly Hills Department of Finance
Administration does not authorize me to engage in any activity or to maintain
any condition in the City of Beverly Hills which violates any municipal laws,
including without limitation, building and zoning codes.  I fully understand that I am subject to all
enforcement remedies for a violation of any municipal code section
notwithstanding the issuance of a valid tax certificate to me.

 

	
  07/01/05

  	
   

  	
  /s/ Gaurav Singh

  	
   

  	
  Gaurav Singh

  	
   

  	
  Controller

  
	
  DATE

  	
   

  	
  AUTHORIZED SIGNATURE

  	
   

  	
  PRINT NAME

  	
   

  	
  TITLE

  

 

SIGN AND RETURN THIS COPY
WITH PAYMENT  REGISTRATION MUST BE FULLY
COMPLETED PRIOR TO ISSUANCE OF CERTIFICATE

 

 

CITY OF BEVERLY HILLS

 

	
  RECVD BY: CS

  	
   

  	
  CS100423101

  	
   

  
	
  PAYOR: VM

  	
   

  	
   

  	
   

  
	
  TODAY’S DATE:
  07/01/05

  	
   

  	
   

  	
   

  
	
  REGISTER DATE:
  07/01/05

  	
   

  	
  TIME: 13:37

  	
   

  

 

	
  DESCRIPTION

  	
   

  	
  AMOUNT

  	
   

  
	
  BUSINESS TAX

  	
   

  	
  $

  	
  1,205.44

  	
   

  
	
  CUST ID:
  00008317

  	
   

  	
   

  	
   

  
	
  TOTAL DUE:

  	
   

  	
  $

  	
  1,205.44

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  CHECK PAID:

  	
   

  	
  $

  	
  1,205.44

  	
   

  
	
  CHECK NO: 1105

  	
   

  	
   

  	
   

  
	
  TENDERED:

  	
   

  	
  $

  	
  1,205.44

  	
   

  
	
  CHANGE:

  	
   

  	
  $

  	
  .00

  	
   

  

 

 

SCHEDULE
3.2

 

Consents

 

None.Exhibit 10.1

 

EXECUTION VERSION

	
   

  	
   

  	
   

  

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of June 15, 2009

 

among

 

ROCKWOOD SPECIALTIES GROUP, INC.,

as US Borrower

 

ROCKWOOD SPECIALTIES LIMITED,

as UK Borrower

 

ROCKWOOD SPECIALTIES INTERNATIONAL, INC.,

as a Guarantor

 

The Several Lenders

from Time to Time Parties Hereto

 

 

CREDIT SUISSE,

as Administrative Agent

 

 

CREDIT SUISSE,

UBS SECURITIES LLC

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Joint Lead Arrangers and Joint
Bookrunners

	
   

  	
   

  	
   

  

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 1.

  	
  Definitions

  	
   

  	
  1

  
	
  1.1.

  	
  Defined
  Terms

  	
   

  	
  1

  
	
  1.2.

  	
  Exchange
  Rates

  	
   

  	
  61

  
	
  1.3.

  	
  Redenomination
  of Certain Foreign Currencies

  	
   

  	
  62

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  Amount
  and Terms of Credit

  	
   

  	
  63

  
	
  2.1.

  	
  Commitments

  	
   

  	
  63

  
	
  2.2.

  	
  Minimum
  Amount of Each Borrowing; Maximum Number of Borrowings

  	
   

  	
  68

  
	
  2.3.

  	
  Notice
  of Borrowing

  	
   

  	
  68

  
	
  2.4.

  	
  Disbursement
  of Funds

  	
   

  	
  70

  
	
  2.5.

  	
  Repayment
  of Loans; Evidence of Debt

  	
   

  	
  71

  
	
  2.6.

  	
  Conversions
  and Continuations

  	
   

  	
  75

  
	
  2.7.

  	
  Pro
  Rata Borrowings

  	
   

  	
  77

  
	
  2.8.

  	
  Interest

  	
   

  	
  77

  
	
  2.9.

  	
  Interest
  Periods

  	
   

  	
  78

  
	
  2.10.

  	
  Increased
  Costs, Illegality, etc.

  	
   

  	
  79

  
	
  2.11.

  	
  Compensation

  	
   

  	
  82

  
	
  2.12.

  	
  Change
  of Lending Office

  	
   

  	
  82

  
	
  2.13.

  	
  Notice
  of Certain Costs

  	
   

  	
  83

  
	
  2.14.

  	
  Incremental
  Facilities

  	
   

  	
  83

  
	
  2.15.

  	
  Incremental
  Refinancing Facilities

  	
   

  	
  85

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  Letters
  of Credit

  	
   

  	
  88

  
	
  3.1.

  	
  Letters
  of Credit

  	
   

  	
  88

  
	
  3.2.

  	
  Letter
  of Credit Requests

  	
   

  	
  89

  
	
  3.3.

  	
  Letter
  of Credit Participations

  	
   

  	
  90

  
	
  3.4.

  	
  Agreement
  to Repay Letter of Credit Drawings

  	
   

  	
  92

  
	
  3.5.

  	
  Increased
  Costs

  	
   

  	
  94

  
	
  3.6.

  	
  Successor
  Letter of Credit Issuer

  	
   

  	
  94

  
	
  3.7.

  	
  Defaulting
  Lenders and Letters of Credit

  	
   

  	
  95

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  Fees;
  Commitments

  	
   

  	
  96

  
	
  4.1.

  	
  Fees

  	
   

  	
  96

  
	
  4.2.

  	
  Voluntary
  Reduction of Revolving Credit Commitments and Extended Revolving Credit
  Commitments

  	
   

  	
  97

  
	
  4.3.

  	
  Mandatory
  Termination of Commitments

  	
   

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  Payments

  	
   

  	
  99

  
	
  5.1.

  	
  Voluntary
  Prepayments

  	
   

  	
  99

  
	
  5.2.

  	
  Mandatory
  Prepayments

  	
   

  	
  100

  
	
  5.3.

  	
  Method
  and Place of Payment

  	
   

  	
  104

  
	
  5.4.

  	
  Net
  Payments

  	
   

  	
  105

  
	
  5.5.

  	
  Computations
  of Interest and Fees

  	
   

  	
  108

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  Conditions
  Precedent to Initial Borrowing

  	
   

  	
  109

  
	
  6.1.

  	
  Credit
  Documents

  	
   

  	
  109

  

 

i

 

	
  6.2.

  	
  Collateral

  	
   

  	
  110

  
	
  6.3.

  	
  Legal
  Opinions

  	
   

  	
  112

  
	
  6.4.

  	
  Receipt
  of Senior Subordinated Notes and Senior Subordinated Loan Agreement Proceeds

  	
   

  	
  113

  
	
  6.5.

  	
  Equity
  Contributions

  	
   

  	
  113

  
	
  6.6.

  	
  Closing
  Certificates

  	
   

  	
  113

  
	
  6.7.

  	
  Corporate
  Proceedings of Each Credit Party

  	
   

  	
  113

  
	
  6.8.

  	
  Corporate
  Documents

  	
   

  	
  114

  
	
  6.9.

  	
  Fees

  	
   

  	
  114

  
	
  6.10.

  	
  Escrow
  Agreements; Acquisition

  	
   

  	
  114

  
	
  6.11.

  	
  Patriot
  Act

  	
   

  	
  114

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  Conditions
  Precedent to All Credit Events; Certain Funds Period; Clean-Up Period;
  Conditions Precedent to Restatement Date

  	
   

  	
  115

  
	
  7.1.

  	
  No
  Default; Representations and Warranties

  	
   

  	
  115

  
	
  7.2.

  	
  Notice
  of Borrowing; Letter of Credit Request

  	
   

  	
  115

  
	
  7.3.

  	
  Certain
  Funds Period

  	
   

  	
  115

  
	
  7.4.

  	
  Clean-Up
  Period

  	
   

  	
  117

  
	
  7.5.

  	
  UK
  Borrower

  	
   

  	
  118

  
	
  7.6.

  	
  Revolving
  Credit Loans and Extended Revolving Credit Loans

  	
   

  	
  118

  
	
  7.7.

  	
  Conditions
  Precedent to Restatement Date

  	
   

  	
  118

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  Representations,
  Warranties and Agreements

  	
   

  	
  118

  
	
  8.1.

  	
  Corporate
  Status

  	
   

  	
  118

  
	
  8.2.

  	
  Corporate
  Power and Authority

  	
   

  	
  119

  
	
  8.3.

  	
  No
  Violation

  	
   

  	
  119

  
	
  8.4.

  	
  Litigation

  	
   

  	
  119

  
	
  8.5.

  	
  Margin
  Regulations

  	
   

  	
  119

  
	
  8.6.

  	
  Governmental
  Approvals

  	
   

  	
  119

  
	
  8.7.

  	
  Investment
  Company Act

  	
   

  	
  120

  
	
  8.8.

  	
  True
  and Complete Disclosure

  	
   

  	
  120

  
	
  8.9.

  	
  Financial
  Condition; Financial Statements

  	
   

  	
  120

  
	
  8.10.

  	
  Tax
  Returns and Payments

  	
   

  	
  120

  
	
  8.11.

  	
  Compliance
  with ERISA

  	
   

  	
  121

  
	
  8.12.

  	
  Subsidiaries

  	
   

  	
  122

  
	
  8.13.

  	
  Patents,
  etc.

  	
   

  	
  122

  
	
  8.14.

  	
  Environmental
  Laws

  	
   

  	
  122

  
	
  8.15.

  	
  Properties

  	
   

  	
  122

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  Affirmative
  Covenants

  	
   

  	
  123

  
	
  9.1.

  	
  Information
  Covenants

  	
   

  	
  123

  
	
  9.2.

  	
  Books,
  Records and Inspections

  	
   

  	
  126

  
	
  9.3.

  	
  Maintenance
  of Insurance

  	
   

  	
  126

  
	
  9.4.

  	
  Payment
  of Taxes

  	
   

  	
  127

  
	
  9.5.

  	
  Consolidated
  Corporate Franchises

  	
   

  	
  127

  
	
  9.6.

  	
  Compliance
  with Statutes, Obligations, etc.

  	
   

  	
  127

  
	
  9.7.

  	
  ERISA

  	
   

  	
  127

  

 

ii

 

	
  9.8.

  	
  Good
  Repair

  	
   

  	
  128

  
	
  9.9.

  	
  Transactions
  with Affiliates

  	
   

  	
  128

  
	
  9.10.

  	
  End
  of Fiscal Years; Fiscal Quarters

  	
   

  	
  128

  
	
  9.11.

  	
  Additional
  Guarantors and Grantors

  	
   

  	
  129

  
	
  9.12.

  	
  Pledges
  of Additional Stock and Evidence of Indebtedness

  	
   

  	
  130

  
	
  9.13.

  	
  Use
  of Proceeds

  	
   

  	
  132

  
	
  9.14.

  	
  Changes
  in Business

  	
   

  	
  133

  
	
  9.15.

  	
  Further
  Assurances

  	
   

  	
  133

  
	
  9.16.

  	
  UK
  Borrower

  	
   

  	
  134

  
	
  9.17.

  	
  Sale
  and Purchase Agreement

  	
   

  	
  134

  
	
  9.18.

  	
  Post-Closing
  Obligations

  	
   

  	
  134

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  Negative
  Covenants

  	
   

  	
  136

  
	
  10.1.

  	
  Limitation
  on Indebtedness

  	
   

  	
  136

  
	
  10.2.

  	
  Limitation
  on Liens

  	
   

  	
  139

  
	
  10.3.

  	
  Limitation
  on Fundamental Changes

  	
   

  	
  141

  
	
  10.4.

  	
  Limitation
  on Sale of Assets

  	
   

  	
  144

  
	
  10.5.

  	
  Limitation
  on Investments

  	
   

  	
  145

  
	
  10.6.

  	
  Limitation
  on Dividends

  	
   

  	
  148

  
	
  10.7.

  	
  Limitations
  on Debt Payments and Amendments

  	
   

  	
  150

  
	
  10.8.

  	
  Limitations
  on Sale Leasebacks

  	
   

  	
  151

  
	
  10.9.

  	
  Senior
  Secured Debt to Consolidated EBITDA Ratio

  	
   

  	
  151

  
	
  10.10.

  	
  Consolidated
  EBITDA to Consolidated Interest Expense Ratio

  	
   

  	
  151

  
	
  10.11.

  	
  Capital
  Expenditures

  	
   

  	
  151

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  Events
  of Default

  	
   

  	
  152

  
	
  11.1.

  	
  Payments

  	
   

  	
  152

  
	
  11.2.

  	
  Representations,
  etc.

  	
   

  	
  152

  
	
  11.3.

  	
  Covenants

  	
   

  	
  152

  
	
  11.4.

  	
  Default
  Under Other Agreements

  	
   

  	
  153

  
	
  11.5.

  	
  Bankruptcy,
  etc.

  	
   

  	
  153

  
	
  11.6.

  	
  ERISA

  	
   

  	
  154

  
	
  11.7.

  	
  Guarantee

  	
   

  	
  154

  
	
  11.8.

  	
  Pledge
  Agreement

  	
   

  	
  154

  
	
  11.9.

  	
  Security
  Agreement

  	
   

  	
  154

  
	
  11.10.

  	
  Mortgages

  	
   

  	
  154

  
	
  11.11.

  	
  Foreign
  Guarantees

  	
   

  	
  155

  
	
  11.12.

  	
  Foreign
  Security Documents

  	
   

  	
  155

  
	
  11.13.

  	
  Subordination

  	
   

  	
  155

  
	
  11.14.

  	
  Judgments

  	
   

  	
  155

  
	
  11.15.

  	
  Change
  of Control

  	
   

  	
  155

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  The
  Administrative Agent

  	
   

  	
  156

  
	
  12.1.

  	
  Appointment

  	
   

  	
  156

  
	
  12.2.

  	
  Delegation
  of Duties

  	
   

  	
  156

  
	
  12.3.

  	
  Exculpatory
  Provisions

  	
   

  	
  156

  
	
  12.4.

  	
  Reliance
  by Administrative Agent

  	
   

  	
  157

  

 

iii

 

	
  12.5.

  	
  Notice
  of Default

  	
   

  	
  157

  
	
  12.6.

  	
  Non-Reliance
  on Administrative Agent and Other Lenders

  	
   

  	
  158

  
	
  12.7.

  	
  Indemnification

  	
   

  	
  158

  
	
  12.8.

  	
  Administrative
  Agent in its Individual Capacity

  	
   

  	
  159

  
	
  12.9.

  	
  Successor
  Agent

  	
   

  	
  159

  
	
  12.10.

  	
  Withholding
  Tax

  	
   

  	
  159

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  Collateral
  Allocation Mechanism

  	
   

  	
  160

  
	
  13.1.

  	
  Implementation
  of CAM

  	
   

  	
  160

  
	
  13.2.

  	
  Letters
  of Credit

  	
   

  	
  161

  
	
  13.3.

  	
  Net
  Payments Upon Implementation of CAM Exchange

  	
   

  	
  162

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  Miscellaneous

  	
   

  	
  163

  
	
  14.1.

  	
  Amendments
  and Waivers

  	
   

  	
  163

  
	
  14.2.

  	
  Notices

  	
   

  	
  165

  
	
  14.3.

  	
  No
  Waiver; Cumulative Remedies

  	
   

  	
  166

  
	
  14.4.

  	
  Survival
  of Representations and Warranties

  	
   

  	
  167

  
	
  14.5.

  	
  Payment
  of Expenses and Taxes

  	
   

  	
  167

  
	
  14.6.

  	
  Successors
  and Assigns; Participations and Assignments

  	
   

  	
  167

  
	
  14.7.

  	
  Replacements
  of Lenders under Certain Circumstances

  	
   

  	
  172

  
	
  14.8.

  	
  Adjustments;
  Set-off

  	
   

  	
  172

  
	
  14.9.

  	
  Counterparts

  	
   

  	
  173

  
	
  14.10.

  	
  Severability

  	
   

  	
  173

  
	
  14.11.

  	
  Integration

  	
   

  	
  173

  
	
  14.12.

  	
  GOVERNING
  LAW

  	
   

  	
  173

  
	
  14.13.

  	
  Submission
  to Jurisdiction; Waivers

  	
   

  	
  173

  
	
  14.14.

  	
  Acknowledgments

  	
   

  	
  174

  
	
  14.15.

  	
  WAIVERS OF JURY TRIAL

  	
   

  	
  174

  
	
  14.16.

  	
  Confidentiality

  	
   

  	
  174

  
	
  14.17.

  	
  Judgment
  Currency

  	
   

  	
  175

  
	
  14.18.

  	
  Permitted
  Amendments

  	
   

  	
  176

  
	
  14.19.

  	
  Effect
  of the Amendment and Restatement

  	
   

  	
  176

  

 

	
  SCHEDULES

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Schedule
  1.1 (a)

  	
  Additional
  Cost

  	
   

  	
   

  
	
  Schedule
  1.1 (b)

  	
  Mortgaged
  Properties

  	
   

  	
   

  
	
  Schedule 1.1
  (c)

  	
  Commitments
  and Addresses of Lenders

  	
   

  	
   

  
	
  Schedule 8.12

  	
  Subsidiaries

  	
   

  	
   

  
	
  Schedule 10.1

  	
  Closing
  Date Indebtedness

  	
   

  	
   

  
	
  Schedule 10.2

  	
  Closing
  Date Liens

  	
   

  	
   

  
	
  Schedule 10.5

  	
  Closing
  Date Investments

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A-1

  	
  Form of
  Canadian Guarantee

  	
   

  	
   

  
					

 

iv

 

	
  Exhibit A-2

  	
  Forms
  of Canadian Pledge Agreements

  	
   

  	
   

  
	
  Exhibit A-3

  	
  Form of
  Canadian Security Agreement

  	
   

  	
   

  
	
  Exhibit B

  	
  Forms
  of French Pledge Agreements

  	
   

  	
   

  
	
  Exhibit C-1

  	
  Forms
  of German Abstract Acknowledgements of Indebtedness

  	
   

  	
   

  
	
  Exhibit C-2

  	
  Form of
  German Assignment of Claims

  	
   

  	
   

  
	
  Exhibit C-3

  	
  Form of
  German Guarantee

  	
   

  	
   

  
	
  Exhibit C-4

  	
  Form of
  German Negative Pledge Agreement

  	
   

  	
   

  
	
  Exhibit C-5

  	
  Form of
  German Pledge Agreement

  	
   

  	
   

  
	
  Exhibit C-6

  	
  Forms
  of German Conditional Security Agreements

  	
   

  	
   

  
	
  Exhibit C-7

  	
  German
  Pledge Agreement (Brockhues)

  	
   

  	
   

  
	
  Exhibit D

  	
  Form of
  Guarantee

  	
   

  	
   

  
	
  Exhibit E-1

  	
  Form of
  Italian Guarantee

  	
   

  	
   

  
	
  Exhibit E-2

  	
  Forms
  of Italian Share Pledge Agreements

  	
   

  	
   

  
	
  Exhibit E-3

  	
  Form of
  Italian Trademark Pledge Agreement

  	
   

  	
   

  
	
  Exhibit F

  	
  Form of
  Mortgage (Real Property)

  	
   

  	
   

  
	
  Exhibit G

  	
  Form of
  Perfection Certificate

  	
   

  	
   

  
	
  Exhibit H

  	
  Form of
  Pledge Agreement

  	
   

  	
   

  
	
  Exhibit I

  	
  Form of
  Security Agreement

  	
   

  	
   

  
	
  Exhibit J-1

  	
  Form of
  Singapore Guarantee

  	
   

  	
   

  
	
  Exhibit J-2

  	
  Forms
  of Singapore Pledge Agreements

  	
   

  	
   

  
	
  Exhibit J-3

  	
  Form of
  Singapore Security Agreement

  	
   

  	
   

  
	
  Exhibit K

  	
  Forms
  of Taiwan Pledge Agreements

  	
   

  	
   

  
	
  Exhibit L-1

  	
  Form of
  UK Debenture

  	
   

  	
   

  
	
  Exhibit L-2

  	
  Form of
  UK Guarantee

  	
   

  	
   

  
	
  Exhibit L-3

  	
  Forms
  of UK Pledge Agreements

  	
   

  	
   

  
	
  Exhibit M

  	
  Form of
  Luxembourg Pledge Agreements

  	
   

  	
   

  
	
  Exhibit N

  	
  Form of
  Letter of Credit Request

  	
   

  	
   

  
	
  Exhibit O-1

  	
  Form of
  Opinion of Simpson Thacher & Bartlett LLP

  	
   

  	
   

  
	
  Exhibit O-2

  	
  Form of
  Opinion of Tom Riordan

  	
   

  	
   

  
	
  Exhibit O-3

  	
  Form of
  Opinion of Latham & Watkins LLP

  	
   

  	
   

  
	
  Exhibit O-4

  	
  Form of
  Opinion of Latham & Watkins LLP

  	
   

  	
   

  
	
  Exhibit O-5

  	
  Form of
  Opinion of Borden
  Ladner Gervais

  	
   

  	
   

  
	
  Exhibit O-6

  	
  Form of
  Opinion of Latham & Watkins LLP

  	
   

  	
   

  
	
  Exhibit O-7

  	
  Form of
  Opinion of Lee and Li

  	
   

  	
   

  
	
  Exhibit O-8

  	
  Form of
  Opinion of Norton Rose Milan

  	
   

  	
   

  
	
  Exhibit O-9

  	
  Form of
  Opinion of Burness

  	
   

  	
   

  
	
  Exhibit O-10

  	
  Form of
  Opinion of Arendt & Medernach

  	
   

  	
   

  
	
  Exhibit O-11

  	
  Form of
  Opinion of Local Counsel

  	
   

  	
   

  
	
  Exhibit P

  	
  Form of
  Closing Certificate

  	
   

  	
   

  
	
  Exhibit Q

  	
  Form of
  Assignment and Acceptance

  	
   

  	
   

  
	
  Exhibit R-1

  	
  Form of
  Promissory Note (Tranche A-1 Term Loans)

  	
   

  	
   

  
	
  Exhibit R-2

  	
  Form of
  Promissory Note (Tranche A-2 Term Loans)

  	
   

  	
   

  
	
  Exhibit R-3

  	
  Form of
  Promissory Note (Tranche E Term Loans)

  	
   

  	
   

  
	
  Exhibit R-4

  	
  Form of
  Promissory Note (Tranche G Term Loans)

  	
   

  	
   

  
	
  Exhibit R-5

  	
  Form of
  Promissory Note (Revolving Credit Loans)

  	
   

  	
   

  
	
  Exhibit R-6

  	
  Form of
  Promissory Note (Tranche H Term Loans

  	
   

  	
   

  

 

v

 

	
  Exhibit R-7

  	
  Form of
  Promissory Note (Tranche I Term Loans)

  	
   

  	
   

  
	
  Exhibit R-8

  	
  Form of
  Promissory Note (Extended Revolving Credit Loans and Swingline Loans)

  	
   

  	
   

  
	
  Exhibit S

  	
  Form of
  Confidentiality Agreement

  	
   

  	
   

  
	
  Exhibit T

  	
  Form of
  Post-Closing Schedule

  	
   

  	
   

  
	
  Exhibit U

  	
  Form of
  Joinder Agreement

  	
   

  	
   

  

 

vi

 

AMENDED AND RESTATED CREDIT AGREEMENT dated
as of June 15, 2009, among ROCKWOOD SPECIALTIES GROUP, INC., a Delaware
corporation (the “US Borrower”), ROCKWOOD SPECIALTIES LIMITED, a company
incorporated under the laws of England and Wales (the “UK Borrower”),
ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware corporation (“Holdings”),
the lending institutions from time to time parties hereto, CREDIT SUISSE, as
Administrative Agent and as Collateral Agent (such terms and each other
capitalized term used but not defined in this introductory statement having the
meaning provided in Section 1), and UBS SECURITIES LLC and GOLDMAN SACHS
CREDIT PARTNERS L.P., as Co-Syndication Agents.

 

WHEREAS, on the Closing Date, the US
Borrower, the UK Borrower, Holdings, the Administrative Agent and certain of
the Lenders entered into the Existing Credit Agreement pursuant to which
certain of the Lenders agreed to extend credit to the Borrowers on a revolving
credit basis and/or to make term loans to the US Borrower and the UK Borrower
as specified therein;

 

WHEREAS, the Borrowers desire that certain of
the Lenders and the other parties hereto agree to amend and restate the
Existing Credit Agreement in its entirety and to continue to extend credit
under the Existing Credit Agreement as amended and restated by this Agreement;

 

WHEREAS, the Required Lenders have, on or
prior to the Restatement Date, authorized and directed the Administrative Agent
to execute this Agreement pursuant to the Amendment Agreement;

 

WHEREAS, it is the intent of the parties
hereto that this Agreement not constitute a novation of the obligations and
liabilities of the parties under the Existing Credit Agreement and that this
Agreement amend and restate in its entirety the Existing Credit Agreement;

 

NOW, THEREFORE, the parties hereto agree to
amend and restate the Existing Credit Agreement as follows:

 

SECTION 1.           Definitions

 

1.1.          Defined Terms.  (a)   
As used herein, the following terms shall have the meanings specified in
this Section 1.1 unless the context otherwise requires (it being
understood that defined terms in this Agreement shall include in the singular
number the plural and in the plural the singular):

 

“ABR” shall mean, for any day, a rate
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day, (b) the Federal
Funds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) the
Eurodollar Rate for a one-month Interest Period on such day (or if such day is
not a Business Day, the immediately preceding Business Day) plus
1%.  Any change in the ABR due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be

 

 

effective as of the opening
of business on the effective day of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.

 

“ABR Loan” shall mean each Loan
bearing interest at the rate provided in Section 2.8(a) and, in any
event, shall include all Swingline Loans.

 

“Accepting Lenders” shall have the
meaning provided in Section 14.18.

 

“Acquired EBITDA” shall mean, with
respect to any Acquired Entity or Business, any Converted Restricted
Subsidiary, any Sold Entity or Business or any Converted Unrestricted
Subsidiary (any of the foregoing, a “Pro Forma Entity”) for any period,
the sum of the amounts for such period of, without duplication, (a) income
from continuing operations before income taxes and extraordinary items, (b) interest
expense, (c) depreciation expense, (d) amortization expense,
including amortization of deferred financing fees, (e) non-recurring
charges, (f) non-cash charges, (g) losses on asset sales and (h) restructuring
charges or reserves less the sum of the amounts for such period of (i) non-recurring
gains, (j) non-cash gains, (k) gains on asset sales and (l) interest
income, all as determined on a consolidated basis for such Pro Forma Entity in
accordance with GAAP.

 

“Acquired Entity or Business” shall
have the meaning provided in the definition of the term “Consolidated EBITDA”.

 

“Acquisition” shall mean the acquisition
by the US Borrower and/or certain of its Affiliates pursuant to the Sale and
Purchase Agreement of the outstanding capital stock (and the economic ownership
of certain assets and businesses subject to a fiduciary trust agreement) of
certain members of the Dynamit Nobel group (collectively, the “Target”)
from the New Sellers.

 

“Acquisition Agreements” shall mean
the Purchase Agreement and the Sale and Purchase Agreement.

 

“Acquisition Equity Contribution”
shall mean, in connection with the Acquisition, (a) the contribution by
investment entities controlled by KKR and DLJ Merchant Banking of approximately
$488,000,000 (assuming an exchange rate of $1.20 to €1.00 and subject to
adjustment based on the Sale and Purchase Agreement such that the amount of
such contribution, together with the amount described in Section 6.4, the
aggregate amount of the Term Loans funded on the Funding Date and the amount of
any Revolving Credit Loans funded on the Funding Date to finance the
Acquisition (which shall be accompanied by a proportionate increase in the
amount of such equity contribution), shall be sufficient to pay the purchase
price under the Sale and Purchase Agreement) in cash made on the Funding Date
to Parent in the form of common equity, (b) the use by Parent of the full
amount of such cash consideration described in clause (a) to purchase
common equity of PIK Holdco and/or to make a cash equity contribution to the
common equity of PIK Holdco, (c) the use by PIK Holdco of the full amount
of such cash consideration described in clause (b) (less up to $21,000,000
used to refinance a portion of the PIK Notes and pay related fees and
prepayment premiums) to purchase

 

2

 

common equity of Holdings
and/or to make a cash equity contribution to the common equity of Holdings and (d) the
use by Holdings of the full amount of such cash consideration described in
clause (c) to purchase common equity of the US Borrower and/or to make a
cash equity contribution to the common equity of the US Borrower.

 

“Acquisition Escrow Agreement” shall
mean the Acquisition Escrow Agreement dated as of the Funding Date among the
New Sellers, the US Borrower, Knight Erste Beteiligungs GmbH and The Bank of
New York, as Financing Escrow Agent.

 

“Additional Cost” shall mean, in
relation to any Foreign Currency Borrowing, the cost as calculated by the
Administrative Agent in accordance with Schedule 1.1(a) imputed to
each Lender participating in such Borrowing of compliance with the mandatory liquid
assets requirements of the Financial Services Authority (or other applicable
regulatory authority) during the applicable Interest Period, expressed as a
percentage.

 

“Adjusted Total Extended Revolving Credit
Commitment” shall mean at any time the Total Extended Revolving Credit
Commitment less the aggregate Extended Revolving Credit Commitments of all
Defaulting Lenders.

 

“Adjusted Total Revolving Credit
Commitment” shall mean at any time the Total Revolving Credit Commitment
less the aggregate Revolving Credit Commitments of all Defaulting Lenders.

 

“Adjusted Total Term Loan Commitment”
shall mean at any time the Total Term Loan Commitment less the Term Loan
Commitments of all Defaulting Lenders.

 

“Administrative Agent” shall mean CS,
together with its Affiliates, as the administrative agent for the Lenders under
this Agreement and the other Credit Documents. 
With respect to Foreign Currency Borrowings, the Administrative Agent
may be an Affiliate of CS for purposes of administering such Borrowings, and
all references herein to the term “Administrative Agent” shall be deemed to
refer to the Administrative Agent in respect of the applicable Borrowing or to
all Administrative Agents, as the context requires.

 

“Administrative Agent’s Office” shall
mean the office of the Administrative Agent located at Eleven Madison Avenue,
New York, NY 10010, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.

 

“Affiliate” shall mean, with respect
to any Person, any other Person directly or indirectly controlling, controlled
by, or under direct or indirect common control with such Person.  A Person shall be deemed to control (i) a
corporation if such Person possesses, directly or indirectly, the power (a) to
vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (b) to direct or cause the
direction of the management and policies of such corporation,

 

3

 

whether through the
ownership of voting securities, by contract or otherwise and (ii) any
other Person if such first Person possesses, directly or indirectly, the power
to direct or cause the direction of the management and policies of such
specified Person, whether through the ownership of voting securities, by
contract or otherwise.

 

“Agents” shall mean the Administrative
Agent, the Collateral Agent and the Co-Syndication Agents.

 

“Aggregate Extended Revolving Credit
Outstanding” shall have the meaning provided in Section 5.2(b).

 

“Aggregate Revolving Credit Outstanding”
shall have the meaning provided in Section 5.2(b).

 

“Agreement” shall mean this Credit
Agreement, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Amendment
Agreement” shall mean the Amendment
Agreement dated as of June 15, 2009 among Holdings, the Borrowers, the
Administrative Agent and the Lenders party thereto to which this Agreement
shall be attached.

 

“Amortization Amount” shall have the
meaning provided in Section 5.2(c).

 

“Applicable ABR Margin” shall mean at
any date, with respect to each ABR Loan that is (a) a Revolving Credit
Loan, 1.75% per annum, (b) an Extended Revolving Credit Loan or a
Swingline Loan, 3.25% per annum, (c) a Tranche E Term Loan, 1.50% per
annum and (d) a Tranche H Term Loan, 3.00% per annum.  Notwithstanding the foregoing, in the event
that the Tranche E Term Loans and/or the Tranche H Term Loans shall at any time
be rated at least Ba3 by Moody’s and at least BB- by S&P, as applicable,
the term “Applicable ABR Margin” shall mean, from and after such date and until
such time as such rating shall no longer be applicable, with respect to each
ABR Loan that is a Tranche E Term Loan and/or a Tranche H Term Loan, as
applicable, the applicable percentage per annum set forth above minus 0.25%.

 

“Applicable Eurodollar Margin” shall
mean at any date with respect to each Eurodollar Loan that is (a) a
Revolving Credit Loan, 3.00% per annum, (b) an Extended Revolving Credit
Loan, 4.50% per annum, (c) a Tranche A-1 Term Loan or a Tranche A-2 Term
Loan, 3.00% per annum, (d) a Tranche E Term Loan, 2.75%, (e) a
Tranche G Term Loan, 3.00% per annum, (f) a Tranche H Term Loan, 4.25% per
annum and (g) a Tranche I Term Loan, 4.50%.  Notwithstanding the foregoing, (a) in
the event that the Tranche E Term Loans and/or the Tranche H Term Loans shall
at any time be rated at least Ba3 by Moody’s and at least BB- by S&P, as
applicable, the term “Applicable Eurodollar Margin” shall mean, from and after
such date and until such time as such ratings shall no longer be applicable,
with respect to each Eurodollar Loan that is a Tranche E Term Loan and/or a
Tranche H Term Loan, as applicable, the applicable percentage per annum set
forth above minus 0.25% and (b) in the event that the Tranche G Term Loans
and/or the Tranche I Term Loans shall at any time be rated at least Ba3 by

 

4

 

Moody’s and at least BB- by
S&P, as applicable, the term “Applicable Eurodollar Margin” shall mean,
from and after such date and until such time as such ratings shall no longer be
applicable, with respect to each Eurodollar Loan that is a Tranche G Term Loan
and/or a Tranche I Term Loan, as applicable, the applicable percentage per annum
set forth above minus 0.25%.

 

“Approved Fund” shall have the meaning
provided in Section 14.6.

 

“Asset Sale Prepayment Event” shall
mean any sale, transfer or other disposition of any business units, assets or
other properties of the US Borrower or any of the Restricted Subsidiaries not
in the ordinary course of business (including any sale, transfer or other
disposition of any capital stock of any Subsidiary of the US Borrower owned by
the US Borrower or a Restricted Subsidiary). 
Notwithstanding the foregoing, the term “Asset Sale Prepayment Event”
shall not include any transaction permitted by Section 10.4, other than
transactions permitted by Section 10.4(b) and the transactions
permitted by Section 10.4(e) to the extent any Net Cash Proceeds in
respect of accounts receivable subject to receivables financing facilities or
factoring arrangements thereunder shall exceed $200,000,000 at any one time.

 

“Assignment and Acceptance” shall mean
an assignment and acceptance substantially in the form of Exhibit Q.

 

“Authorized Officer” shall mean the
Chairman of the Board, the President, the Chief Financial Officer, the
Treasurer or any other senior officer of the US Borrower designated as such in
writing to the Administrative Agent by the US Borrower.

 

“Available Amount” shall mean, on any
date (the “Reference Date”), an amount equal at such time to (a) the
sum of, without duplication, (i) for the purposes of Section 10.5(j),
Section 10.5(m), Section 10.11(b) and the first proviso to Section 10.7
(to the extent, in the case of the first proviso to Section 10.7, that the
Consolidated Total Debt to Consolidated EBITDA Ratio at such time and after
giving effect to the prepayment, repurchase, redemption or defeasance to be
completed on the Reference Date is less than 2.25 to 1.00), $600,000,000; provided,
however, that any portion of such $600,000,000 in excess of $90,000,000
can only be used to make investments permitted pursuant to Section 10.5(j) and
Section 10.5(m) and in no case shall such portion in excess of $90,000,000
be used, directly or indirectly, to declare or pay any Dividends or make any
payments pursuant to Section 10.7, (ii) the aggregate amount of Net
Cash Proceeds from Prepayment Events refused by Term Loan Lenders and retained
by the US Borrower or the UK Borrower, as the case may be, in accordance with Section 5.2(c)(iv) after
the Closing Date and on or prior to the Reference Date, (iii) an amount
equal to (x) the cumulative amount of Excess Cash Flow for all fiscal
years completed after the Closing Date and prior to the Reference Date minus
(y) the portion of such Excess Cash Flow that has been after the Closing
Date and on or prior to the Reference Date (or will be) applied to (A) the
prepayment of Loans in accordance with Section 5.2(a)(ii), (B) the
payment and or distribution of dividends by the US Borrower to Holdings to pay
cash interest of the 2011 Senior Notes in accordance with Section 10.6(f) or
(C) the redemption, repurchase or retirement of the 2011 Senior Notes, the
PIK Notes or the PIK

 

5

 

Refinancing Preferred Stock
in accordance with Section 10.6(g), (iv) the amount of any capital
contributions made in cash to the US Borrower from and including the Business
Day immediately following the Closing Date through and including the Reference
Date, including contributions with the proceeds from any issuance of equity
securities by any of the Borrower, the Parent Companies or Holdings, (v) the
aggregate amount of all cash dividends and other cash distributions received by
the US Borrower or any Restricted Subsidiary so long as such dividends or
distributions are then immediately distributed to the US Borrower or a
Guarantor from any Minority Investments or Unrestricted Subsidiaries after the
Closing Date and on or prior to the Reference Date (other than the portion of
any such dividends and other distributions that is used by the US Borrower or
any Guarantor to pay taxes), (vi) the aggregate amount of all cash
repayments of principal received by the US Borrower or any Guarantor from any
Minority Investments or Unrestricted Subsidiaries after the Closing Date and on
or prior to the Reference Date in respect of loans made by the US Borrower or
any Guarantor to such Minority Investments or Unrestricted Subsidiaries and (vii) the
aggregate amount of all net cash proceeds received by the US Borrower or any
Restricted Subsidiary so long as such proceeds are then immediately distributed
to the US Borrower or a Guarantor in connection with the sale, transfer or
other disposition of its ownership interest in any Minority Investment or
Unrestricted Subsidiary after the Closing Date and on or prior to the Reference
Date minus (b) the sum at such time of (i) the aggregate
amount of any investments (including loans) made by the US Borrower or any
Restricted Subsidiary pursuant to the proviso to Section 10.5(j) or
pursuant to Section 10.5(m) after the Restatement Date and on or
prior to the Reference Date, (ii) the aggregate amount of Capital
Expenditures made by the US Borrower or any of the Restricted Subsidiaries
after the Restatement Date and on or prior to the Reference Date pursuant to Section 10.11(b) and
(iii) the aggregate price paid by the US Borrower in connection with any
prepayment, repurchase or redemption of the Subordinated Notes (other than any
such prepayment made pursuant to sub-clause (z) of the proviso of Section 10.7(a))
or the Senior Subordinated Notes pursuant to Section 10.7(a) after
the Restatement Date and on or prior to the Reference Date.

 

“Available Commitment” shall mean an
amount equal to the excess, if any, of (a) the Dollar Equivalent of the
amount of the Total Revolving Credit Commitment over (b) the sum of (i) the
aggregate principal amount of all Revolving Credit Loans then outstanding and (ii) the
aggregate applicable Letter of Credit Outstanding at such time.

 

“Available Excess Cash Flow” shall
mean at any time (the “Reference Date”) (x) the cumulative amount
of Excess Cash Flow for all fiscal years completed after the Closing Date and
prior to the Reference Date minus (y) the portion at such time of
such Excess Cash Flow that has been after the Closing Date and on or prior to
the Reference Date (A) applied to (i) the prepayment of Loans in
accordance with Section 5.2(a)(ii), (ii) the payment and or
distribution of dividends by the US Borrower to Holdings to pay cash interest
of the 2011 Senior Notes in accordance with Section 10.6(f) or (iii) the
redemption, repurchase or retirement of the 2011 Senior Notes, the PIK Notes or
the PIK Refinancing Preferred Stock in accordance with Section 10.6(g) or
(B) utilized by the US Borrower or any Restricted Subsidiary (i) to
make any investments (including

 

6

 

loans) pursuant to Section 10.5(j) or
Section 10.5(m) after the Closing Date and on or prior to the Reference Date, (ii) to
make Capital Expenditures after the Closing Date and on or prior to the
Reference Date pursuant to Section 10.11(b) or (iii) in
connection with any prepayment, repurchase or redemption of the Subordinated
Notes (other than any such prepayment made pursuant to sub-clause (z) of
the proviso of Section 10.7(a))or the Senior Subordinated Notes pursuant
to Section 10.7(a) after the Closing Date and on or prior to the
Reference Date.

 

“Available Extended Commitment” shall
mean an amount equal to the excess, if any, of (a) the Dollar Equivalent
of the amount of the Total Extended Revolving Credit Commitment over (b) the
sum of (i) the aggregate principal amount of all Extended Revolving Credit
Loans (but not Swingline Loans) then outstanding and (ii) the aggregate
applicable Letter of Credit Outstanding at such time.

 

“Available Tranche A Commitment” shall
mean an amount equal to the excess, if any, of the Tranche A Term Loan Commitment
over the aggregate principal amount of all Tranche A-1 Term Loans and Tranche
A-2 Term Loans then outstanding.

 

“Bankruptcy Code” shall have the
meaning provided in Section 11.5.

 

“Board” shall mean the Board of
Governors of the Federal Reserve System of the United States (or any
successor).

 

“Borrowers” shall mean the US Borrower
and the UK Borrower.

 

“Borrowing” shall mean and include (a) the
incurrence of Swingline Loans from the Swingline Lender on a given date, (b) the
incurrence of one Type of Term Loan on the Funding Date (or resulting from
conversions on a given date after the Funding Date) having, in the case of
Eurodollar Term Loans, the same Interest Period (provided, that ABR
Loans incurred pursuant to Section 2.10(b) shall be considered part
of any related Borrowing of Eurodollar Term Loans), (c) the incurrence of
one Type of Revolving Credit Loan on a given date (or resulting from
conversions on a given date) having, in the case of Eurodollar Revolving Credit
Loans, the same Interest Period (provided, that ABR Loans incurred
pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of Eurodollar Revolving Credit Loans) and (d) the incurrence of
one Type of Extended Revolving Credit Loan on a given date (or resulting from conversions
on a given date) having, in the case of Eurodollar Extended Revolving Credit
Loans, the same Interest Period (provided, that ABR Loans incurred
pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of Eurodollar Extended Revolving Credit Loans).

 

“Brockhues” shall mean Brockhues GmbH &
Co. KG.

 

“Business Day” shall mean (a) for
all purposes other than as covered by clause (b) below, any day excluding
Saturday, Sunday and any day that shall be in The City of New York or London a
legal holiday or a day on which banking institutions are authorized by law or
other governmental actions to close and (b) with respect to all notices
and determinations in connection with, and payments of principal and interest
on,

 

7

 

Eurodollar Loans denominated
in Euro, any day that is a Business Day described in clause (a) and which
is also a day on which the TARGET payment system is open for the settlement of
payment in Euro; provided, that when used in connection with any
Eurodollar Loan (including with respect to all notices and determinations in
connection therewith and any payments of principal, interest or other amounts
thereon), the term “Business Day” shall also exclude any day on which banks are
not open for dealing in the London interbank market.

 

“Calculation Date” means (a) each
date on which a Borrowing of Foreign Currency Revolving Credit Loans or a
Borrowing of Foreign Currency Extended Revolving Credit Loans is requested, (b) each
date on which a Foreign Currency Letter of Credit is issued, (c) if
requested by the Administrative Agent, the last Business Day of a calendar
month, (d) if at any time the Aggregate Revolving Credit Outstandings
exceed 75% of the Total Revolving Credit Commitment or the Aggregate Extended
Revolving Credit Outstandings exceed 75% of the Total Extended Revolving Credit
Commitment, the last Business Day of each week and (e) if a Default or an
Event of Default shall have occurred and be continuing, such additional dates
as the Administrative Agent or the Required Lenders shall specify.

 

“CAM” shall mean the mechanism for the
allocation and exchange of interests in the Credit Facilities and collections
thereunder established under Section 13.

 

“CAM
Dollar Lender” shall mean any Lender that has made or holds no
Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans or Tranche
I Term Loans and has no Revolving Credit Commitment or Extended Revolving
Credit Commitment.

 

“CAM Exchange” shall mean the exchange
of the Lender’s interests provided for in Section 13.1.

 

“CAM Exchange Date” shall mean the
date on which (a) any event referred to in Section 11.5 shall occur
in respect of  Holdings, the US Borrower,
the UK Borrower or any Specified Subsidiary or (b) an acceleration of the
maturity of the Loans pursuant to Section 11 shall occur.

 

“CAM Percentage” shall mean, as to
each Lender, a fraction, expressed as a decimal, of which (a) the
numerator shall be the aggregate Dollar Equivalent (determined on the basis of
Exchange Rates prevailing on the CAM Exchange Date) of the Specified
Obligations owed to such Lender and such Lender’s participation in the
aggregate Letter of Credit Outstanding immediately prior to the CAM Exchange
Date and (b) the denominator shall be the aggregate Dollar Equivalent (as
so determined) of the Specified Obligations owed to all the Lenders and the
aggregate Letter of Credit Outstanding immediately prior to such CAM Exchange
Date.  For purposes of computing each
Lender’s CAM Percentage, all Specified Obligations and Letter of Credit
Exposures which are denominated in Foreign Currencies shall be translated into
Dollars at the Exchange Rate in effect on the CAM Exchange Date.

 

8

 

“Canadian Guarantee” shall mean the
Canadian Guarantee Agreement, made by each of the Canadian Guarantors in favor
of the Administrative Agent for the benefit of the Lenders to the UK Borrower
and the other Secured Parties named therein, substantially in the form of Exhibit A-1,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Canadian Guarantors” shall mean (a) each
Subsidiary of the US Borrower (other than an Unrestricted Subsidiary) on the
Funding Date that is a member of the Rockwood Group and that is incorporated
under the laws of Canada or any province or territory thereof and is a party to
the Canadian Guarantee and (b) each Subsidiary of the US Borrower that is
incorporated under the laws of Canada or any province or territory thereof and
that becomes a party to the Canadian Guarantee after the Funding Date pursuant
to Section 9.11.

 

“Canadian Pledge Agreements” shall
mean (a) the Canadian Pledge Agreement, entered into by the US Borrower
and the Administrative Agent for the benefit of the Lenders to the UK Borrower
and the other Secured Parties named therein and (b) the Canadian Pledge
Agreement entered into by the US Borrower and the Administrative Agent for the
benefit of the Lenders to the US Borrower and the other Secured Parties named
therein in each case, substantially in the form of Exhibit A-2(a) or
(b), as applicable, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Canadian Security Agreement” shall
mean the Canadian Security Agreement entered into by the Canadian Guarantors,
certain other Restricted Subsidiaries and the Administrative Agent for the
benefit of the Lenders to the UK Borrower and the other Secured Parties named
therein, substantially in the form of Exhibit A-3, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Capital Expenditures” shall mean, for
any period, the aggregate of all expenditures (whether paid in cash or accrued
as liabilities and including in all events all amounts expended or capitalized
under Capital Leases, but excluding any amount representing capitalized
interest) by the US Borrower and the Restricted Subsidiaries during such period
that, in conformity with GAAP, are or are required to be included as additions
during such period to property, plant or equipment reflected in the
consolidated balance sheet of the US Borrower and its Subsidiaries; provided,
that the term “Capital Expenditures” shall not include (a) expenditures
made in connection with the replacement, substitution or restoration of assets (i) to
the extent financed from insurance proceeds paid on account of the loss of or
damage to the assets being replaced or restored or (ii) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced, (b) the purchase price of equipment that is
purchased simultaneously with the trade-in of existing equipment to the extent
that the gross amount of such purchase price is reduced by the credit granted
by the seller of such equipment for the equipment being traded in at such time,
(c) the purchase of plant, property or equipment made within one year of
the sale of any asset to the extent purchased with the proceeds of such sale or
(d) expenditures that constitute any part of Consolidated Lease Expense.

 

9

 

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

 

“Capitalized Lease Obligations” shall
mean, as applied to any Person, all obligations under Capital Leases of such
Person or any of its Subsidiaries, in each case taken at the amount thereof
accounted for as liabilities in accordance with GAAP.

 

“Change of Control” shall mean and be
deemed to have occurred if (a)(i) KKR, DLJ Merchant Banking, their
respective Affiliates and the Management Group shall at any time not own, in
the aggregate, directly or indirectly, beneficially and of record, at least 35%
of the outstanding Voting Stock of Parent (other than as the result of one or
more widely distributed offerings of Parent Common Stock, in each case whether
by Parent or by KKR, DLJ Merchant Banking, their respective Affiliates or the
Management Group) and/or (ii) any person, entity or “group” (within the
meaning of Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended) shall at any time have acquired direct or indirect
beneficial ownership of a percentage of the outstanding Voting Stock of Parent
that exceeds the percentage of such Voting Stock then beneficially owned, in
the aggregate, by KKR, DLJ Merchant Banking, their respective Affiliates and
the Management Group, unless, in the case of either clause (i) or (ii) above,
KKR, DLJ Merchant Banking, their respective Affiliates and the Management Group
have, at such time, the right or the ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of Parent; and/or (b) at any time Continuing Directors shall not
constitute a majority of the Board of Directors of Parent; and/or (c) any
Person, other than any of the Parent Companies and any Person who receives
capital stock in PIK Holdco in connection with an investment made pursuant to Section 10.5(g),
acquires ownership, directly or indirectly, beneficially or of record, of any
equity interest (other than Qualified Preferred Stock or PIK Refinancing Preferred
Stock) of any nature in PIK Holdco; and/or (d) any Person, other than any
of the Parent Companies, acquires ownership, directly or indirectly,
beneficially or of record, of any equity interest (other than PIK Refinancing
Preferred Stock) of any nature in Holdings; and/or (e) any Person, other
than Holdings (directly) or any of the Parent Companies (indirectly), acquires
ownership, directly or indirectly, beneficially or of record, of any equity
interest of any nature in the US Borrower; and/or (f) a Change of Control
(as defined in any of the Subordinated Note Indenture, the 2011 Senior Notes
Indenture, the Senior Subordinated Notes Indenture, the Senior Subordinated
Loan Agreement or any PIK Notes Documents) shall have occurred.

 

“Class”, when used in reference to any
Loan or Borrowing, refers to whether such Loan, or the Loans comprising such
Borrowing, are Revolving Credit Loans, Extended Revolving Credit Loans, New
Revolving Loans, New Extended Revolving Loans, Tranche A-1 Term Loans, Tranche A-2
Term Loans, Tranche E Term Loans, New Tranche H Term Loans (or each Series),
New Tranche I Term Loans (or each Series), Tranche G Term Loans, Tranche H Term
Loans, Tranche I Term Loans, Incremental Refinancing Term Loans (or each
Series) or Swingline Loans and, when used in reference to any Commitment,
refers to whether such Commitment is a Revolving 

 

10

 

Credit Commitment, Extended
Revolving Credit Commitment, New Revolving Credit Commitment, New Extended Revolving
Credit Commitment, Tranche A Term Loan Commitment, Tranche E Term Loan
Commitment, New Tranche H Term Loan Commitment, New Tranche I Term Loan
Commitment, Tranche G Term Loan Commitment, Tranche H Term Loan Commitment,
Tranche I Term Loan Commitment or Incremental Refinancing Term
Loan Commitment.

 

“Clean-Up Period” shall have the
meaning provided in Section 7.4.

 

“Closing Date” shall mean July 31,
2004.

 

“Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.  Section references
to the Code are to the Code, as in effect at the Funding Date, and any
subsequent provisions of the Code, amendatory thereof, supplemental thereto or
substituted therefor.

 

“Collateral Agent” shall mean CS,
together with its Affiliates, as the collateral agent for the Lenders and the
other Secured Parties under this Agreement and the other Credit Documents.

 

“Collateral” shall have the meaning
provided in the Pledge Agreement, the Security Agreement, any Foreign Security
Document or any Mortgage, as applicable.

 

“Collateral Escrow Agent” shall mean
JPMorgan Chase Bank, as the collateral agent for the Administrative Agent under
the Financing Escrow Agreement.

 

“Commitment Fee Rate”
shall mean, with respect to the Available Commitment on any day, the rate per
annum set forth below opposite the Status in effect on such day:

 

	
  Status

  	
   

  	
  Commitment

  Fee Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Level I Status, Level II
  Status and Level III Status

  	
   

  	
  0.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Level IV Status

  	
   

  	
  0.375

  	
  %

  

 

Notwithstanding the foregoing, the term “Commitment
Fee Rate” shall mean 0.50%, during the period from and including the Funding
Date to but excluding the Initial Financial Statement Delivery Date.

 

“Commitments” shall mean, with respect
to each Lender, such Lender’s Term Loan Commitment, Revolving
Credit Commitment, Extended Revolving Credit Commitments, New Tranche H
Term Loan Commitment (if applicable), New Tranche I Term Loan Commitment
(if applicable), New Revolving Credit Commitment (if 

 

11

 

applicable), New Extended
Revolving Credit Commitment (if applicable) or Incremental Refinancing Term
Loan Commitment (if applicable).

 

“Confidential Information”
shall have the meaning provided in Section 14.16.

 

“Confidential Information Memorandum”
shall mean the Confidential Information Memorandum of the US Borrower dated June 2004,
delivered to the Lenders in connection with this Agreement.

 

“Consolidated Earnings” shall mean,
for any period, “income (loss) before the deduction of income taxes” of the US
Borrower and the Restricted Subsidiaries, excluding extraordinary items, for
such period, determined in a manner consistent with the manner in which such
amount was determined in accordance with the audited financial statements most
recently required to be delivered pursuant to Section 9.1(a).

 

“Consolidated EBITDA” shall mean, for
any period, the sum, without duplication, of the amounts for such period of (a) Consolidated
Earnings, (b) Consolidated Interest Expense, (c) depreciation
expense, (d) amortization expense, including amortization of deferred
financing fees, (e) extraordinary losses and non-recurring charges, (f) non-cash
charges, (g) losses on asset sales, (h) restructuring charges or
reserves (including severance, relocation costs and one-time compensation
charges and costs relating to the closures of facilities), (i) Transaction
Expenses to the extent deducted in determining Consolidated Earnings, (j) any
expenses or charges incurred in connection with any issuance of debt or equity
securities, (k) any fees and expenses related to Permitted Acquisitions, (l) any
deduction for minority interest expense and (m) items arising in
connection with litigation related to the timber business of the US Borrower
and its Subsidiaries (not exceeding $4,000,000 in the aggregate for any such
period and $9,000,000 in the aggregate during the term of this Agreement), less
the sum of the amounts for such period of (n) extraordinary gains and
non-recurring gains, (o) non-cash gains and (p) gains on asset sales,
all as determined on a consolidated basis for the US Borrower and the
Restricted Subsidiaries in accordance with GAAP; provided, that (i) except
as provided in clause (iv) below, there shall be excluded from
Consolidated Earnings for any period the income from continuing operations
before income taxes and extraordinary items of all Unrestricted Subsidiaries
for such period to the extent otherwise included in Consolidated Earnings,
except to the extent actually received in cash by the US Borrower or its
Restricted Subsidiaries during such period through dividends or other
distributions (it being understood that, to the extent that such income from
continuing operations before income taxes and extraordinary items of any such
Unrestricted Subsidiaries is excluded, the amounts set forth in clauses (b) through
(p) above with respect to any such Unrestricted Subsidiaries shall not be
included for purposes of determining Consolidated EBITDA for such period), (ii) there
shall be excluded from Consolidated Earnings for any period the income from
continuing operations before income taxes and extraordinary items of each
Foreign Joint Venture for such period corresponding to the percentage of
capital stock or other equity interests in such Foreign Joint Venture not owned
by the US Borrower or its Restricted Subsidiaries (other than Foreign Joint
Ventures) (it being understood that, to the extent that such 

 

12

 

income from continuing
operations before income taxes and extraordinary items of such Foreign Joint
Venture is excluded, the ratable amounts allocable to such non-owned capital
stock or equity interests of the amounts set forth in clauses (b) through (p) above
with respect to such Foreign Joint Venture shall not be included for purposes
of determining Consolidated EBITDA for such period), (iii) there shall be
excluded in determining Consolidated EBITDA non-operating
currency transaction gains and losses and (iv)(x) there shall be
included in determining Consolidated EBITDA for any period (A) the
Acquired EBITDA of any Person, property, business or asset (other than an
Unrestricted Subsidiary) acquired to the extent not subsequently sold,
transferred or otherwise disposed of (but not including the Acquired EBITDA of
any related Person, property, business or assets to the extent not so acquired)
by the US Borrower or any Restricted Subsidiary during such period (each such
Person, property, business or asset acquired and not subsequently so disposed
of, an “Acquired Entity or Business”), and the Acquired EBITDA of any
Unrestricted Subsidiary that is converted into a Restricted Subsidiary during
such period (each, a “Converted Restricted Subsidiary”), in each case
based on the actual Acquired EBITDA of such Acquired Entity or Business or
Converted Restricted Subsidiary for such period (including the portion thereof
occurring prior to such acquisition or conversion) and (B) for the
purposes of the definition of the term “Permitted Acquisition” and
Sections 10.3, 10.9 and 10.10, an adjustment in respect of each Acquired
Entity or Business equal to the amount of the Pro Forma Adjustment with respect
to such Acquired Entity or Business for such period (including the portion
thereof occurring prior to such acquisition or conversion) as specified in the
Pro Forma Adjustment Certificate delivered to the Lenders and the
Administrative Agent and (y) for purposes of determining the Consolidated
Total Debt to Consolidated EBITDA Ratio only, there shall be excluded in
determining Consolidated EBITDA for any period the Acquired EBITDA of any
Person, property, business or asset (other than an Unrestricted Subsidiary)
sold, transferred or otherwise disposed of by the US Borrower or any Restricted
Subsidiary during such period (each such Person, property, business or asset so
sold or disposed of, a “Sold Entity or Business”), and the Acquired
EBITDA of any Restricted Subsidiary that is converted into an Unrestricted
Subsidiary during such period (each, a “Converted Unrestricted Subsidiary”),
in each case based on the actual Acquired EBITDA of such Sold Entity or
Business or Converted Unrestricted Subsidiary for such period (including the
portion thereof occurring prior to such sale, transfer, disposition or
conversion).

 

“Consolidated EBITDA to Consolidated
Interest Expense Ratio” shall mean, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the relevant Test Period to (b) Consolidated
Interest Expense for such Test Period.

 

“Consolidated Interest Expense” shall
mean, for any period, the sum of (x) cash interest expense (including that
attributable to Capital Leases in accordance with GAAP), net of cash interest
income, of the US Borrower and the Restricted Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of the US Borrower and the
Restricted Subsidiaries, including all commissions, discounts and other fees
and charges owed with respect to letters of credit and bankers’ acceptance
financing and net costs under Hedge Agreements (other than currency swap
agreements, currency future or option contracts and other similar agreements),
but excluding, however, amortization of 

 

13

 

deferred financing costs and
any other amounts of non-cash interest, all as calculated on a consolidated
basis in accordance with GAAP plus (y) the aggregate amount of all
cash Dividends paid by the US Borrower to Holdings for such period pursuant to Section 10.6
to the extent such Dividends were used, either directly or indirectly, to make
cash interest payments on any outstanding 2011 Senior Notes; provided,
that (a) except as provided in clause (b) below, there shall be
excluded from Consolidated Interest Expense for any period the cash interest
expense (or income) of all Unrestricted Subsidiaries for such period to the
extent otherwise included in Consolidated Interest Expense and (b) for
purposes of the definition of the term “Permitted Acquisition” and
Sections 10.3, 10.9 and 10.10, there shall be included in determining
Consolidated Interest Expense for any period the cash interest expense (or
income) of any Acquired Entity or Business acquired during such period and of
any Converted Restricted Subsidiary converted during such period, in each case
based on the cash interest expense (or income) of such Acquired Entity or
Business or Converted Restricted Subsidiary for such period (including the
portion thereof occurring prior to such acquisition or conversion) assuming any
Indebtedness incurred or repaid in connection with any such acquisition or
conversion had been incurred or prepaid on the first day of such period.

 

“Consolidated Lease Expense” shall
mean, for any period, all rental expenses of the US Borrower and the Restricted
Subsidiaries during such period under operating leases for real or personal
property (including in connection with Permitted Sale Leasebacks), excluding
real estate taxes, insurance costs and common area maintenance charges and net
of sublease income, other than (a) obligations under vehicle leases
entered into in the ordinary course of business, (b) all such rental
expenses associated with assets acquired pursuant to a Permitted Acquisition to
the extent that such rental expenses relate to operating leases in effect at
the time of (and immediately prior to) such acquisition and (c) Capitalized
Lease Obligations, all as determined on a consolidated basis in accordance with
GAAP, provided that there shall be excluded from Consolidated Lease
Expense for any period the rental expenses of all Unrestricted Subsidiaries for
such period to the extent otherwise included in Consolidated Lease Expense.

 

“Consolidated Net Income” shall mean,
for any period, the consolidated net income (or loss) after the deduction of income
taxes of the US Borrower and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.

 

“Consolidated Net Sales” shall mean,
for any fiscal year or any Test Period, as the case may be, “net sales” of the
US Borrower and the Restricted Subsidiaries as set forth in the Section 9.1
Financials with respect to such Test Period or fiscal year, as applicable.

 

“Consolidated Total Assets” shall
mean, as of any date of determination, the total assets as set forth on the
most recent consolidated balance sheet of the US Borrower delivered pursuant to
Section 9.1(a) or (b), as applicable, and the Restricted Subsidiaries
prepared in accordance with GAAP.

 

14

 

“Consolidated Total Debt” shall mean,
as of any date of determination, (a) the sum of (i) all Indebtedness
of the US Borrower and the Restricted Subsidiaries for borrowed money
outstanding on such date and (ii) all Capitalized Lease Obligations of the
US Borrower and the Restricted Subsidiaries outstanding on such date, all
calculated on a consolidated basis in accordance with GAAP minus (b) the
aggregate amount of cash included in the cash accounts listed on the
consolidated balance sheet of the US Borrower and the Restricted Subsidiaries
as at such date (other than any such cash attributable to transactions
consummated pursuant to Section 10.4(e) in respect of accounts
receivable (or any portion thereof) that have not been collected during the
Test Period that includes such date of determination) up to a maximum amount of
$100,000,000 to the extent the use thereof for application to payment of
Indebtedness is not prohibited by law or any contract to which the US Borrower
or any of the Restricted Subsidiaries is a party.

 

“Consolidated Total Debt to Consolidated
EBITDA Ratio” shall mean, as of any date of determination, the ratio of (a)
Consolidated Total Debt as of the last day of the relevant Test Period to (b) Consolidated
EBITDA for such Test Period.

 

“Consolidated Working Capital” shall
mean, at any date, the excess of (a) the sum of all amounts (other than
cash, cash equivalents and bank overdrafts) that would, in conformity with
GAAP, be set forth opposite the caption “total current assets” (or any like
caption) on a consolidated balance sheet of Holdings, the US Borrower and the
Restricted Subsidiaries at such date over (b) the sum of all amounts that
would, in conformity with GAAP, be set forth opposite the caption “total
current liabilities” (or any like caption) on a consolidated balance sheet of
Holdings, the US Borrower and the Restricted Subsidiaries on such date, but
excluding (i) the current portion of any Funded Debt, (ii) without
duplication of clause (i) above, all Indebtedness consisting of Loans and
Letter of Credit Exposure to the extent otherwise included therein and (iii) the
current portion of deferred income taxes.

 

“Continuing Director” shall mean, at
any date, an individual (a) who is a member of the Board of Directors of
Parent on the Funding Date, (b) who, as at such date, has been a member of
such Board of Directors for at least the 12 preceding months, (c) who has been
nominated to be a member of such Board of Directors, directly or indirectly, by
KKR, DLJ Merchant Banking or one of their respective Affiliates or Persons
nominated by KKR, DLJ Merchant Banking or one of their respective Affiliates or
(d) who has been nominated to be a member of such Board of Directors by a
majority of the other Continuing Directors then in office.

 

“Continuing Lenders” shall mean those
Lenders under the Credit Agreement immediately prior to the Second Amendment
Effective Date that execute and deliver a signature page to the Second
Amendment specifically in the capacity of a “Continuing Lender”.

 

“Continuing Tranche C Term Loan Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Third Amendment Effective Date 

 

15

 

that execute and deliver a
signature page to the Third Amendment specifically in the capacity of a “Continuing
Tranche C Term Loan Lender”.

 

“Continuing Tranche D Term Loan Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Third Amendment Effective Date that execute and deliver a signature page to
the Third Amendment specifically in the capacity of a “Continuing Tranche D
Term Loan Lender”.

 

“Continuing Tranche F Term Loan Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Fourth Amendment Effective Date that execute and deliver a signature page to
the Fourth Amendment specifically in the capacity of a “Continuing Tranche F
Term Loan Lender.

 

“Converting Letters of Credit” shall
mean each Letter of Credit issued under the Existing Credit Agreement and
outstanding immediately prior to the Restatement Date.

 

“Converted Restricted Subsidiary”
shall have the meaning provided in the definition of the term “Consolidated
EBITDA”.

 

“Converted Unrestricted Subsidiary”
shall have the meaning provided in the definition of the term “Consolidated
EBITDA”.

 

“Co-Syndication Agents” shall mean UBS
Securities LLC and Goldman Sachs Credit Partners L.P.

 

“Credit Documents” shall mean this
Agreement, the Security Documents, the Financing Escrow Agreement, the Amendment
Agreement, each Letter of Credit and any promissory notes issued by the US
Borrower or the UK Borrower hereunder.

 

“Credit Event” shall mean and include
the making (but not the conversion or continuation) of a Loan and the issuance
of a Letter of Credit.

 

“Credit Facility” shall mean a
category of Commitments and extensions of credit thereunder.

 

“Credit Party” shall mean each of the
US Borrower, the UK Borrower, the Guarantors, the Foreign Subsidiary Guarantors
and each other Subsidiary of the US Borrower that is a party to a Credit
Document.

 

“CS” shall mean Credit Suisse and any
successor thereto.

 

“Cumulative Consolidated Net Income
Available to Stockholders” shall mean, as of any date of determination,
Consolidated Net Income less cash dividends paid by Holdings with respect to
its capital stock for the period (taken as one accounting period) commencing on
the Funding Date and ending on the last day of the most recent fiscal quarter
for which Section 9.1 Financials have been delivered to the Lenders under Section 9.1.

 

16

 

“Debt Incurrence Prepayment Event”
shall mean any issuance or incurrence by the US Borrower or any of the
Restricted Subsidiaries of any Indebtedness (including any issuance by the US
Borrower of Permitted Additional Subordinated Notes, any incurrence of
Incremental Refinancing Term Loans pursuant to Section 2.15, any
incurrence of Indebtedness pursuant to clause (ii) of Section 10.1(n) and
any incurrence of Indebtedness pursuant to Section 10.1(q) but
excluding any other Indebtedness permitted to be issued or incurred under Section 10.1
that is not expressly included herein).

 

“Default” shall mean any event, act or
condition that with notice or lapse of time, or both, would constitute an Event
of Default.

 

“Defaulting Lender” shall mean any
Lender with respect to which a Lender Default is in effect.

 

“Dividends” shall have the meaning
provided in Section 10.6.

 

“DLJ Merchant Banking” shall mean DLJ
Merchant Banking Partners III, L.P. and its Affiliates.

 

“Dollar Borrowing” shall mean a
Borrowing denominated in Dollars.

 

“Dollar Equivalent” shall mean, on any
date of determination, (a) with respect to any amount denominated in
Dollars, such amount, and (b) with respect to any amount denominated in
any Foreign Currency, the equivalent in Dollars of such amount, determined by
the Administrative Agent pursuant to Section 1.2(b) using the
applicable Exchange Rate with respect to such Foreign Currency at the time in
effect under the provisions of such Section 1.2.

 

“Dollar Extended Revolving Credit Loan”
shall mean an Extended Revolving Credit Loan denominated in Dollars and made
pursuant to Section 2.1(b).

 

“Dollar Letter of Credit” shall mean a
Letter of Credit denominated in Dollars and issued pursuant to Section 3.1.

 

“Dollar Revolving Credit Loan” shall
mean a Revolving Credit Loan denominated in Dollars and made pursuant to Section 2.1(b).

 

“Dollars” and “$” shall mean
dollars in lawful currency of the United States of America.

 

“Domestic Subsidiary” shall mean each
Subsidiary of the US Borrower that is organized under the laws of the
United States, any state or territory thereof or the District of Columbia.

 

“Drawing” shall have the meaning
provided in Section 3.4(b).

 

17

 

“Eligible Lender” shall mean, at any
time, a Person who, on any date on which interest is payable under this
Agreement, is a Person which is (a) beneficially entitled to the interest
payable to it under this Agreement and (b)(i) a UK Lender or (ii) a Treaty
Lender.

 

“EMU” shall mean Economic and Monetary
Union as contemplated in the Treaty on European Union.

 

“EMU Legislation” shall mean the
legislative measures of the European Union for the introduction of, changeover
to or operation of the Euro in one or more member states, being in part
legislative measures to implement EMU.

 

“Environmental Claims” shall mean any
and all administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigations
(other than internal reports prepared by the US Borrower or any of the
Subsidiaries (a) in the ordinary course of such Person’s business or (b) as
required in connection with a financing transaction or an acquisition or
disposition of real estate) or proceedings relating in any way to any
Environmental Law or any permit issued, or any approval given, under any such
Environmental Law (hereinafter, “Claims”), including (i) any and
all Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to health, safety or the environment.

 

“Environmental Law” shall mean any
applicable Federal, state, foreign or local statute, law, rule, regulation,
ordinance, code and rule of common law now or hereafter in effect and in
each case as amended, and any binding judicial or administrative interpretation
thereof, including any binding judicial or administrative order, consent decree
or judgment, relating to the environment, human health or safety or Hazardous
Materials.

 

“ERISA” shall mean the Employee
Retirement Income Security Act of 1974, as amended from time to time.  Section references to ERISA are to ERISA
as in effect at the Funding Date and any subsequent provisions of ERISA
amendatory thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each
person (as defined in Section 3(9) of ERISA) that together with the
US Borrower or a Subsidiary would be deemed to be a “single employer” within
the meaning of Section 414(b) or (c) of the Code or, solely for
purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.

 

“Euro” or “€” shall mean the
single currency of the European Union as constituted by the Treaty on European
Union and as referred to in the EMU Legislation.

 

18

 

“Eurodollar Extended Revolving Credit Loan”
shall mean any Extended Revolving Credit Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.

 

“Eurodollar Loan” shall mean any
Eurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar Extended
Revolving Credit Loan.

 

“Eurodollar Rate” shall mean, in the
case of any Eurodollar Term Loan, Eurodollar Revolving Credit Loan, Eurodollar
Extended Revolving Credit Loan (other than the Tranche A-1 Term Loans, the
Tranche A-2 Term Loans, the Tranche G Term Loans, the Tranche I Term Loans, any
Foreign Currency Revolving Credit Loan or any Foreign Currency Extended
Revolving Credit Loan), with respect to each day during each Interest Period
pertaining to such Eurodollar Loan, a rate equal to the higher of (a) 2.0% per
annum and (b) (i) the rate of interest per annum determined by the
Administrative Agent at approximately 11:00 a.m., London time, on the date
that is two Business Days prior to the commencement of such Interest Period by
reference to the British Bankers’ Association Interest Settlement Rates for
deposits in Dollars (as set forth by the Bloomberg Information Service or any
successor thereto or any other service selected by the Administrative Agent
which has been nominated by the British Bankers’ Association as an authorized
information vendor for the purpose of displaying such rates) for a period equal
to such Interest Period; provided, that, to the extent that an interest
rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “Eurodollar Rate” shall be the interest rate per annum
determined by the Administrative Agent to be the average of the rates per annum
at which deposits in Dollars in an amount comparable to such Borrowing are
offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the beginning of
such Interest Period multiplied by (ii) the Statutory Reserve Rate.  With respect to Eurodollar Borrowings
denominated in a Foreign Currency, the Eurodollar Rate for any Interest Period
shall be a rate equal to the higher of (a) 2.0% per annum and (b) (i) the
rate of interest per annum determined by the Administrative Agent at
approximately 11:00 a.m. (London time) on the Quotation Day for such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in the currency of such Borrowing (as set forth
by the Bloomberg Information Service or any successor thereto or any other
service selected by the Administrative Agent which has been nominated by the
British Bankers’ Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Interest Period; provided,
that, to the extent that an interest rate is not ascertainable pursuant to the
foregoing provisions of this sentence, the “Eurodollar Rate” shall be the
interest rate per annum determined by the Administrative Agent to be the
average of the rates per annum at which deposits in the currency of such
Borrowing in an amount comparable to such Borrowing are offered for such
relevant Interest Period to major banks in the London interbank market in
London, England by the Administrative Agent at approximately 11:00 a.m.
(London time) on the date that is two Business Days prior to the beginning of
such Interest Period multiplied by (ii) the Statutory Reserve Rate.

 

19

 

“Eurodollar Revolving Credit Loan”
shall mean any Revolving Credit Loan bearing interest at a rate determined by
reference to the Eurodollar Rate.

 

“Eurodollar Term Loan” shall mean any
Term Loan bearing interest at a rate determined by reference to the Eurodollar
Rate.

 

“Event of Default” shall have the
meaning provided in Section 11.

 

“Excess Cash Flow” shall mean, for any
period, an amount equal to the excess of (a) the sum, without duplication,
of (i) Consolidated Net Income for such period, (ii) an amount equal to
the amount of all non-cash charges to the extent deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital
for such period and (iv) an amount equal to the aggregate net non-cash
loss on the sale, lease, transfer or other disposition of assets by the US
Borrower and the Restricted Subsidiaries during such period (other than sales
in the ordinary course of business) to the extent deducted in arriving at such
Consolidated Net Income over (b) the sum, without duplication, of (i) an
amount equal to the amount of all non-cash credits included in arriving at such
Consolidated Net Income, (ii) the aggregate amount actually paid by the US
Borrower and the Restricted Subsidiaries in cash during such period on account
of Capital Expenditures (excluding the principal amount of Indebtedness
incurred in connection with such Capital Expenditures, whether incurred in such
period or in a subsequent period), (iii) the aggregate amount of all
prepayments of Revolving Credit Loans, Extended Revolving Credit Loans and
Swingline Loans made during such period to the extent accompanying reductions
of the Total Revolving Credit Commitments or the Total Extended Revolving
Credit Commitments, (iv) the aggregate amount of all principal payments of
Indebtedness of the US Borrower or the Restricted Subsidiaries (including any
Term Loans and the principal component of payments in respect of Capitalized
Lease Obligations but excluding Revolving Credit Loans, Extended Revolving
Credit Loans, Swingline Loans and voluntary prepayments of Term Loans pursuant
to Section 5.1) made during such period (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) an amount equal to the aggregate
net non-cash gain on the sale, lease, transfer or other disposition of assets
by the US Borrower and the Restricted Subsidiaries during such period (other
than sales in the ordinary course of business) to the extent included in
arriving at such Consolidated Net Income, (vi) increases in Consolidated
Working Capital for such period, (vii) payments by the US Borrower and the
Restricted Subsidiaries during such period in respect of long-term liabilities
of the US Borrower and the Restricted Subsidiaries other than Indebtedness, (viii) the
amount of investments made during such period pursuant to Section 10.5 to
the extent that such investments were financed with internally generated cash
flow of the US Borrower and the Restricted Subsidiaries, (ix) the amount
of dividends paid during such period pursuant to clause (b), (c), (d) or
(e) of the proviso to Section 10.6 to the extent such dividends were
paid with the proceeds of any amount referred to in paragraph (a) of
this definition, (x) the aggregate amount of expenditures actually made by the
US Borrower and the Restricted Subsidiaries in cash during such period
(including expenditures for the payment of financing fees) to the extent that
such expenditures are not expensed during such period and (xi) the aggregate
amount of any premium, make-whole or penalty 

 

20

 

payments actually paid in
cash by the US Borrower and the Restricted Subsidiaries during such period that
are required to be made in connection with any prepayment of Indebtedness.

 

“Exchange Rate” shall mean on any day,
with respect to any Foreign Currency, the rate at which such Foreign Currency
may be exchanged into Dollars, as set forth at approximately 11:00 a.m.
(London time) on such day on the Bloomberg Key Cross-Currency Rates Page for
such Foreign Currency.  In the event that
such rate does not appear on any Bloomberg Key Cross-Currency Rates Page, the
Exchange Rate shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the
Administrative Agent and the US Borrower, or, in the absence of such agreement,
such Exchange Rate shall instead be the arithmetic average of the spot rates of
exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such Foreign Currency are then being
conducted, at or about 10:00 a.m. (Local Time) on such date for the
purchase of Dollars for delivery two Business Days later, provided
that if at the time of any such determination, for any reason, no such spot
rate is being quoted, the Administrative Agent, after consultation with the US
Borrower, may use any reasonable method it deems appropriate to determine such
rate, and such determination shall be conclusive absent manifest error.

 

“Existing Credit Agreement” shall mean
the Credit Agreement, dated as of the Closing Date, among the US Borrower, the
UK Borrower, Holdings, Credit Suisse, as the Administrative Agent and
Collateral Agent and UBS Securities LLC and Goldman Sachs Credit Partners L.P.,
as Co-Syndication Agents, as amended or modified and in effect immediately
prior to the Restatement Date.

 

“Extended Commitment Fee Rate” shall
mean, with respect to the Available Extended Commitment on any day, 0.75% per
annum.

 

“Extended Revolving Credit Commitment”
shall mean, (a) with respect to each Lender that is an Extending Revolving
Credit Lender on the Restatement Date, the amount set forth on Schedule A to
the Amendment Agreement (as appended to the Amendment Agreement on the
Restatement Date) as such Lender’s Extended Revolving Credit Commitment and (b) in
the case of any Lender that becomes a Lender after the Restatement Date, the
amount specified as such Lender’s Extended Revolving Credit Commitment in the Assignment
and Acceptance pursuant to which such Lender assumed a portion of the Total
Extended Revolving Credit Commitment, in each case as the same may be changed
from time to time pursuant to the terms hereof.

 

“Extended Revolving Credit Commitment Percentage”
shall mean at any time, for each Lender, the percentage obtained by dividing (a) such
Lender’s Extended Revolving Credit Commitment by (b) the aggregate amount
of the Extended Revolving Credit Commitments; provided, that at any time
when the Total Extended Revolving Credit Commitment shall have been terminated,
each Lender’s Extended Revolving Credit Commitment Percentage shall be its
Extended Revolving Credit Commitment Percentage as in effect immediately prior
to such termination.

 

21

 

“Extended Revolving Credit Exposure”
shall mean, with respect to any Lender at any time, the sum of (a) the
aggregate principal amount of the Dollar Equivalent of the Extended Revolving
Credit Loans of such Lender then outstanding, (b) such Lender’s Letter of
Credit Exposure at such time and (c) such Lender’s Swingline Exposure at
such time.

 

“Extended Revolving Credit Loans”
shall have the meaning provided in Section 2.1(b).

 

“Extended Revolving Credit Maturity Date”
shall mean July 30, 2012, or, if such date is not a Business Day, the next
preceding Business Day.

 

“Extending Revolving Credit Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Restatement Date that execute and deliver a signature page to the
Amendment Agreement specifically in the capacity of an Extending Revolving
Credit Lender.

 

“Extending Tranche E Term Loan Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Restatement Date that execute and deliver a signature page to the
Amendment Agreement specifically in the capacity of an Extending Tranche E Term
Loan Lender.

 

“Extending Tranche G Term Loan Lenders”
shall mean those Lenders under the Credit Agreement immediately prior to the
Restatement Date that execute and deliver a signature page to the
Amendment Agreement specifically in the capacity of an Extending Tranche G Term
Loan Lender.

 

“Federal Funds Effective Rate” shall
mean, for any day, the weighted average of the per annum 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 of the quotations for the day
of such transactions received by the Administrative Agent from three federal
funds brokers of recognized standing selected by it.

 

“Fee Letter” shall mean the Senior
Secured Facilities Fee Letter dated April 19, 2004 among the US Borrower,
CS, UBS Loan Finance LLC, UBS Securities LLC and Goldman Sachs Credit Partners
L.P.

 

“Fees” shall mean all amounts payable
pursuant to, or referred to in, Section 4.1.

 

“Final Date” shall mean the date on which
the Revolving Credit Commitments shall have terminated, no Revolving Credit
Loans shall be outstanding and the applicable Letter of Credit Outstandings
shall have been reduced to zero.

 

“Final Extended Date” shall mean the
date on which the Extended Revolving Credit Commitments shall have terminated,
no Extended Revolving Credit 

 

22

 

Loans shall be outstanding
and the applicable Letter of Credit Outstandings shall have been reduced to
zero.

 

“Financing Escrow Agent” shall mean
The Bank of New York.

 

“Financing Escrow Agreement” shall
mean the Financing Escrow Agreement dated as of the Funding Date among the US
Borrower, the UK Borrower, PIK Holdco, Knight Erste Beteiligungs GmbH, the
Administrative Agent, the administrative agent under the Senior Subordinated
Loan Agreement, Allianz Lebensversicherungs-AG, Stuttgart, Allianz Capital
Partners GmbH, The Bank of New York, as Financing Escrow Agent, and JPMorgan
Chase Bank, as Collateral Escrow Agent.

 

“First Amendment” shall mean the First
Amendment to this Agreement, dated as of October 8, 2004.

 

“First Amendment Effective Date” shall
mean the date on which the First Amendment becomes effective.

 

“Foreign Currencies” shall mean Euro
and Sterling.

 

“Foreign Currency Borrowing” shall
mean a Borrowing comprised of Tranche A-1 Term Loans, Tranche A-2 Term Loans,
Tranche G Term Loans, Tranche I Term Loans, Foreign Currency Revolving Credit
Loans or Foreign Currency Extended Revolving Credit Loans.

 

“Foreign Currency Extended Revolving
Credit Loan” shall mean an Extended Revolving Loan denominated in a Foreign
Currency and made pursuant to Section 2.1(b).

 

“Foreign Currency Letter of Credit”
shall mean a Letter of Credit denominated in a Foreign Currency and issued pursuant
to Section 3.1.

 

“Foreign Currency Loan” shall mean a
Tranche A-1 Term Loan, Tranche A-2 Term Loan, Tranche G Term Loan, Tranche I
Term Loan, Foreign Currency Revolving Loan or Foreign Currency Extended
Revolving Loan.

 

“Foreign Currency Revolving Credit Loan”
shall mean a Revolving Loan denominated in a Foreign Currency and made pursuant
to Section 2.1(b).

 

“Foreign Joint Venture” shall mean any
Restricted Foreign Subsidiary in which the US Borrower and its Restricted
Subsidiaries own, collectively, less than 100% of the equity interests and
designated as such in a written notice to the Administrative Agent by the US
Borrower; provided, that in the event a Restricted Subsidiary not
previously designated by the US Borrower as a Foreign Joint Venture is
subsequently re-designated as a Foreign Joint Venture, (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in a Foreign Joint Venture in an amount equal to the product of (i) the
net worth of such re-designated Restricted Subsidiary immediately prior to such
re-designation (such net worth to be calculated without regard 

 

23

 

to any guarantee provided by
such re-designated Restricted Subsidiary) and (ii) the percentage of
capital stock or other equity interests in such Foreign Joint Venture owned by
the US Borrower or its Restricted Subsidiaries (other than Foreign Joint
Ventures) and (y) no Default or Event of Default would result from such
re-designation.

 

“Foreign Security Documents” shall
mean, collectively, (a) the UK Guarantee, (b) the UK Pledge
Agreements, (c) the UK Debenture, (d) the German Guarantee, (e) the
German Pledge Agreement, (f) the German Pledge Agreement (Brockhues), (g) the
German Assignment of Claims, (h) the German Conditional Security
Agreements, (i) the German Negative Pledge Agreement, (j) the German
Abstract Acknowledgments of Indebtedness, (k) the Italian Guarantee, (l) the
Italian Share Pledge Agreements, (m) the Italian Trademark Pledge Agreement,
(n) the Canadian Guarantee, (o) the Canadian Pledge Agreements, (p) the
Canadian Security Agreement, (q) the French Pledge Agreements, (r) the
Singapore Guarantee, (s) the Singapore Pledge Agreements, (t) the
Singapore Security Agreement, (u) the Taiwan Pledge Agreements, (v) the
Luxembourg Pledge Agreements, (w) any Mortgage over Mortgaged Property of
a Foreign Subsidiary, (x) any security document entered into by a
Restricted Foreign Subsidiary pursuant to Section 9.11 or 9.12 and (y) any
other security document entered into by a Restricted Foreign Subsidiary,
including, without limitation, any other security document entered into by a
Restricted Foreign Subsidiary as required by the Amendment Agreement to secure
any of the Obligations.

 

“Foreign Subsidiary” shall mean each
Subsidiary of the US Borrower that is not a Domestic Subsidiary, including the
UK Borrower.

 

“Foreign Subsidiary Guarantees” shall
mean (a) the UK Guarantee, (b) the German Guarantee, (c) the
Italian Guarantee, (d) the Canadian Guarantee, (e) the Singapore
Guarantee, (f) any guarantee agreement entered into by a Restricted
Foreign Subsidiary pursuant to Section 9.11 or 9.12 and (g) any other
guarantee agreement entered into by a Restricted Foreign Subsidiary to
guarantee any of the Obligations.

 

“Foreign Subsidiary Guarantors” shall
mean the UK Guarantors, the German Guarantors, the Italian Guarantors, the
Canadian Guarantors, the Singapore Guarantors and any other Foreign Subsidiary
that becomes a Foreign Subsidiary Guarantor pursuant to Section 9.11.

 

“Fourth Amendment” shall mean the
Fourth Amendment to this Agreement, dated as of March 23, 2007.

 

“Fourth Amendment Effective Date”
shall mean March 23, 2007, the date on which the conditions set forth in Section 3(c) of
the Fourth Amendment are satisfied.

 

“French Pledge Agreements” shall mean (a) the
French Pledge Agreement, entered into by the US Borrower and the Administrative
Agent for the benefit of the Lenders to the UK Borrower and the other Secured
Parties named therein and (b) the French Pledge Agreement entered into by
the US Borrower and the Administrative Agent for the benefit of the Lenders to
the US Borrower and the other 

 

24

 

Secured Parties named
therein, substantially in the form of Exhibit B(a) or (b), as
applicable, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Fronting Fee” shall have the meaning
provided in Section 4.1(d).

 

“Funded Debt” shall mean all
Indebtedness of the US Borrower and the Restricted Subsidiaries for borrowed
money that matures more than one year from the date of its creation or matures
within one year from such date that is renewable or extendable, at the option
of the US Borrower or one of the Restricted Subsidiaries, to a date more than
one year from such date or arises under a revolving credit or similar agreement
that obligates the lender or lenders to extend credit during a period of more
than one year from such date, including all amounts of Funded Debt required to
be paid or prepaid within one year from the date of its creation and, in the
case of the US Borrower, Indebtedness in respect of the Loans.

 

“Funding Date” shall mean July 30,
2004.

 

“GAAP” shall mean generally accepted
accounting principles in the United States of America as in effect from time to
time; provided, however, that if there occurs after the Funding
Date any change in GAAP that affects in any respect the calculation of any
covenant contained in Section 10, the Lenders and the US Borrower shall
negotiate in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenant with the intent of having the
respective positions of the Lenders and the US Borrower after such change in
GAAP conform as nearly as possible to their respective positions as of the
Funding Date and, until any such amendments have been agreed upon, the
covenants in Section 10 shall be calculated as if no such change in GAAP
has occurred.

 

“German Abstract Acknowledgments of Indebtedness”
shall mean (x) the agreement between the UK Borrower and the
Administrative Agent and (y) the agreement between the US Borrower and the
Administrative Agent, in each case substantially in the form of Exhibit C-1(a) or
(b), as applicable, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“German Assignment of Claims” shall
mean the agreement entered into by the German Guarantors, certain other
Restricted Subsidiaries and the Administrative Agent for the benefit of the
Lenders to the UK Borrower and the other Secured Parties named therein,
substantially in the form of Exhibit C-2, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“German Conditional Security Agreements”
shall mean the Agreements and all attachments and exhibits thereto,
substantially in the form of Exhibit C-6, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“German Guarantee” shall mean the
German Guarantee Agreement, made by each of the German Guarantors in favor of
the Administrative Agent for the benefit of the Lenders to the UK Borrower and
the other Secured Parties named therein, 

 

25

 

substantially in the form of
Exhibit C-3, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“German Guarantors” shall mean (a) each
Subsidiary of the US Borrower (other than an Unrestricted Subsidiary) on the
Funding Date that is a member of the Rockwood Group and that is incorporated
under the laws of Germany and is a party to the German Guarantee and (b) each
Subsidiary of the US Borrower that is incorporated under the laws of Germany
and that becomes a party to the German Guarantee after the Funding Date
pursuant to Section 9.11.

 

“German Negative Pledge Agreement”
shall mean the letter and all attachments and exhibits thereto from Rockwood
Pigmente Holding GmbH and Silo Pigmente GmbH to the Administrative Agent,
substantially in the form of Exhibit C-4, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“German Pledge Agreement” shall mean
the German Pledge Agreement entered into among the US Borrower, Rockwood
Specialties GmbH and the Administrative Agent for the benefit of the Lenders, substantially
in the form of Exhibit C-5, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“German Pledge Agreement (Brockhues)”
shall mean the German Pledge Agreement entered into among Silo Pigmente GmbH,
Rockwood Pigmente Holding GmbH and the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein,
substantially in the form of Exhibit C-7, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Governmental Authority” shall mean
any nation or government, any state or other political subdivision thereof, and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

“Guarantee” shall mean the Guarantee,
made by each Guarantor in favor of the Administrative Agent for the benefit of
the Secured Parties, substantially in the form of Exhibit D, as the same
may be amended, supplemented or otherwise modified from time to time.

 

“Guarantee and Collateral Exception Amount”
shall mean, at any time: (a)(i) $100,000,000 so long as the Senior Secured
Debt to Consolidated EBITDA Ratio as of the last day of the most recent period
for which Section 9.1 Financials are delivered by the US Borrower to the
Lenders under Section 9.1 is less than 2.00 to 1.00, (ii) $75,000,000
if the Senior Secured Debt to Consolidated EBITDA Ratio as of the last day of
the most recent period for which Section 9.1 Financials are delivered by
the US Borrower to the Lenders under Section 9.1 is equal to or greater
than 2.00 to 1.00 but less than 3.00 to 1.00 or (iii) $50,000,000 if the
Senior Secured Debt to Consolidated EBITDA Ratio as of the last day of the most
recent period for which Section 9.1 Financials are delivered by the US
Borrower to the Lenders under Section 9.1 is greater than or equal to 3.00
to 1.00 minus (b) the sum of (i) the aggregate amount of 

 

26

 

Indebtedness incurred or
assumed following the Restatement Date prior to such time pursuant to Section 10.1(j) or
(k) that is outstanding at such time and that was used to acquire, or was
assumed in connection with the acquisition of, capital stock and/or assets in
respect of which guarantees, pledges and security have not been given pursuant
to Sections 9.11 and 9.12, (ii) the lesser of (x) the aggregate
Increased Commitment Amount at such time and (y) $50,000,000, (iii) any
Indebtedness incurred following the Restatement Date by any Foreign Joint Venture
and (iv) the aggregate fair market value at the time each such investment
was made of all outstanding investments made following the Restatement Date
pursuant to Section 10.5(j) in respect of which guarantees, pledges
and security have not been given pursuant to Sections 9.11 and 9.12; provided,
that the Guarantee and Collateral Exception Amount shall be increased to the
extent that the Indebtedness and Investments deducted from the Guarantee and
Collateral Exception Amount prior to the Restatement Date are no longer
outstanding; provided  further, that if such amount is a negative
number, the Guarantee and Collateral Exception Amount shall be zero.

 

“Guarantee Obligations” shall mean, as
to any Person, any obligation of such Person guaranteeing or intended to
guarantee any Indebtedness of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, including any obligation of such
Person, whether or not contingent, (a) to purchase any such Indebtedness
or any property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
Indebtedness or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (c) to purchase property, securities or services primarily for
the purpose of assuring the owner of any such Indebtedness of the ability of
the primary obligor to make payment of such Indebtedness or (d) otherwise
to assure or hold harmless the owner of such Indebtedness against loss in
respect thereof; provided, however, that the term “Guarantee
Obligations” shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. 
The amount of any Guarantee Obligation shall be deemed to be an amount
equal to the stated or determinable amount of the Indebtedness in respect of
which such Guarantee Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.

 

“Guarantors” shall mean Holdings and
the US Subsidiary Guarantors.

 

“Hazardous Materials” shall mean (a) any
petroleum or petroleum products, radioactive materials, friable asbestos, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing regulated levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of “hazardous substances”, “hazardous waste”, “hazardous
materials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxic
substances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, which is prohibited, limited or regulated by
any Environmental Law.

 

27

 

“Hedge Agreements” shall mean interest
rate swap, cap or collar agreements, interest rate future or option contracts,
currency swap agreements, currency future or option contracts, commodity price
protection agreements or other commodity price hedging agreements, and other
similar agreements entered into by the US Borrower or any of the Restricted
Subsidiaries in the ordinary course of business (and not for speculative
purposes) in order to protect the US Borrower, the UK Borrower or any of the
Restricted Subsidiaries against fluctuations in interest rates, currency
exchange rates or commodity prices.

 

“Holdings” shall have the meaning
provided in the preamble to this Agreement.

 

“Increased Amount Date” shall have the
meaning provided in Section 2.14.

 

“Increased Commitment Amount” shall
have the meaning given to such term in Section 14.1.

 

“Incremental Refinancing Amount Date”
shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Revolving Credit
Commitments” shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Revolving Credit
Lender” shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Revolving Credit
Loan” shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Term Loan
Commitments” shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Term Loan Lender”
shall have the meaning given to such term in Section 2.15.

 

“Incremental Refinancing Term Loan”
shall have the meaning given to such term in Section 2.15.

 

“Incremental Revolving OID” shall have
the meaning given to that term in Section 2.15.

 

“Incremental Revolving Yield Differential”
shall have the meaning given to that term in Section 2.15.

 

“Indebtedness” of any Person shall
mean (a) all indebtedness of such Person for borrowed money, (b) the
deferred purchase price of assets or services that in accordance with GAAP
would be included as liabilities in the balance sheet of such 

 

28

 

Person, (c) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (d) all indebtedness of
a second Person secured by any Lien on any property owned by such first Person,
whether or not such indebtedness has been assumed, (e) all Capitalized
Lease Obligations of such Person, (f) all net obligations of such Person
under interest rate swap, cap or collar agreements, interest rate future or
option contracts, currency swap agreements, currency future or option
contracts, commodity price protection agreements or other commodity price
hedging agreements and other similar agreements and (g) without
duplication, all Guarantee Obligations of such Person; provided, that
Indebtedness shall not include trade payables and accrued expenses, in each
case payable directly or through a bank clearing arrangement and arising in the
ordinary course of business.

 

“Initial Financial Statement Delivery Date”
shall mean the date on which Section 9.1 Financials are delivered to the
Lenders under Section 9.1 for the first full fiscal quarter following the
Closing Date.

 

“Interest Period” shall mean, with
respect to any Term Loan, Revolving Credit Loan or Extended Revolving Credit
Loan, the interest period applicable thereto, as determined pursuant to Section 2.9.

 

“Italian Guarantee” shall mean the
Italian Guarantee Agreement, made by each of the Italian Guarantors in favor of
the Administrative Agent for the benefit of the Lenders to the UK Borrower and
the other Secured Parties named therein, substantially in the form of Exhibit E-1,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Italian Guarantors” shall mean (a) each
Subsidiary of the US Borrower (other than an Unrestricted Subsidiary) on the
Funding Date that is a member of the Rockwood Group and that is incorporated
under the laws of Italy and is a party to the Italian Guarantee and (b) each
Subsidiary of the US Borrower that is incorporated under the laws of Italy and
that becomes a party to the Italian Guarantee after the Funding Date pursuant
to Section 9.11.

 

“Italian Share Pledge Agreements”
shall mean (a) the Italian Pledge Agreement, entered into by the US
Borrower and the Administrative Agent for the benefit of the Lenders to the UK
Borrower and the other Secured Parties named therein and (b) the Italian Pledge
Agreement entered into by the US Borrower and the Administrative Agent for the
benefit of the Lenders to the US Borrower and the other Secured Parties named
therein, in each case, substantially in the form of Exhibit E-2(a) or
(b), as applicable, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Italian Trademark Pledge Agreement”
shall mean the unilateral pledge letter entered into by Rockwood Italia S.p.A.
in favor of the Administrative Agent for the benefit of the Lenders to the UK
Borrower and the other Secured Parties named therein, substantially in the form
of Exhibit E-3, as the same may be amended, supplemented or otherwise
modified from time to time.

 

29

 

“Joinder Agreement” means an agreement
substantially in the form of Exhibit U.

 

“Judgment Currency” shall have the
meaning set forth in Section 14.17.

 

“Judgment Currency Conversion Date”
shall have the meaning set forth in Section 14.17.

 

“KKR” shall mean each of Kohlberg
Kravis Roberts & Co., L.P. and KKR Associates, L.P.

 

“L/C Maturity Date” shall mean the
date that is (a) with respect to any Letters of Credit issued under the
Revolving Credit Commitment, five Business Days prior to the Revolving Credit
Maturity Date and (b) with respect to any Letters of Credit under the
Extended Revolving Credit Commitment, five Business Days prior to the Extended
Revolving Credit Maturity Date.

 

“L/C Participant” shall have the
meaning provided in Section 3.3(a).

 

“L/C Participation” shall have the
meaning provided in Section 3.3(a).

 

“L/C Reserve Account” shall have the
meaning provided in Section 13.2(a)

 

“Lender Default” shall mean (a) with
respect to the determination as to whether a Lender is a Defaulting Lender for
purposes of Section 5.1, Section 5.2 and Section 14.1 (and any
definitions used in such sections), (i) the failure (which has not been
cured) of a Lender to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 3.3 or (ii) a
Lender having notified the Administrative Agent and/or the US Borrower that it
does not intend to comply with the obligations under Section 2.1(b), 2.1(d)
or 3.3, in the case of either clause (i) or clause (ii) above, as a
result of the appointment of a receiver or conservator with respect to such
Lender at the direction or request of any regulatory agency or authority and (b)
with respect to the determination as to whether a Lender is a Defaulting Lender
for purposes of Section 3.7, Section 4.1 and Section 14.7, (i) the
failure (which has not been cured) of a Lender to make available its portion of
any Borrowing or to fund its portion of any unreimbursed payment under Section 3.3,
(ii) the notification by a Lender to any Borrower, the Administrative
Agent, the Letter of Credit Issuer, the Swingline Lender or any Lender in
writing that it does not intend to comply with any of its funding obligations
under this Agreement or a Lender making a public statement to the effect that
it does not intend to comply with its funding obligations under this Agreement
or under other agreements in which it commits to extend credit, (iii) the
failure, within three Business Days after request by the Administrative Agent,
of a Lender to confirm that it will comply with the terms of this Agreement
relating to its obligations to fund prospective Loans and participations in
then outstanding Letters of Credit and Swingline Loans, (iv) the failure
of a Lender to otherwise pay over to the Administrative Agent or any other
Lender any other amount required to be paid by it hereunder within three
Business Days of the date when due, unless the subject of a good faith dispute,
or (v) a Lender (A) 

 

30

 

becoming or being insolvent
or having a parent company that has become or is insolvent or (B) becoming
the subject of a bankruptcy or insolvency proceeding, or having a receiver,
conservator, trustee or custodian appointed for it, or taking any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment or having a parent company that has become
the subject of a bankruptcy or insolvency proceeding, or has had a receiver,
conservator, trustee or custodian appointed for it, or has taken any action in
furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment.

 

“Lenders” shall mean (a) the
Persons listed on Schedule 1.1(c), (b) effective as of the Third Amendment
Effective Date, the Persons listed on Schedule A to the Third Amendment (as
appended to the Third Amendment on the Third Amendment Effective Date), (c) effective
as of the Fourth Amendment Effective Date, the Persons listed on Schedule A to
the Fourth Amendment (as appended to the Fourth Amendment on the Fourth
Amendment Effective Date), (d) effective as of the Restatement Date, the
Persons listed on Schedules A and B to the Amendment Agreement (as appended to
the Amendment Agreement on the Restatement Date) and (e) any other Person
that becomes a party hereto pursuant to an Assignment and Acceptance, other
than any such Person that ceases to be a party hereto pursuant to an Assignment
and Acceptance or otherwise ceases to have any Loans or Commitments hereunder.

 

“Letter of Credit” shall mean each
standby letter of credit issued pursuant to Section 3.1.

 

“Letter of Credit Commitment” shall
mean $100,000,000, as the same may be reduced from time to time pursuant to Section 3.1.

 

“Letter of Credit Exposure” shall
mean, with respect to any Lender, at any time, the sum of (a) the Dollar
Equivalent of the amount of any Unpaid Drawings in respect of which such Lender
has made (or is required to have made) payments to the Letter of Credit Issuer
pursuant to Section 3.4(a) at such time and (b) such Lender’s
Revolving Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of the Letter of Credit Outstanding at such time
(excluding the portion thereof consisting of Unpaid Drawings in respect of
which the Lenders have made (or are required to have made) payments to the
Letter of Credit Issuer pursuant to Section 3.4(a)).

 

“Letter of Credit Fee” shall have the
meaning provided in Section 4.1(c).

 

“Letter of Credit Issuer” shall mean
CS, any of its Affiliates or any successor pursuant to Section 3.6.  The Letter of Credit Issuer may, in its
discretion, arrange for one or more Letters of Credit to be issued by
Affiliates of the Letter of Credit Issuer, including with respect to Foreign
Currency Letters of Credit, and in each such case the term “Letter of Credit
Issuer” shall include any such Affiliate with respect to Letters of Credit
issued by such Affiliate.  In the event
that there is more than one Letter of Credit Issuer at any time, references
herein and in the other Credit Documents to the 

 

31

 

Letter of Credit Issuer
shall be deemed to refer to the Letter of Credit Issuer in respect of the
applicable Letter of Credit or to all Letter of Credit Issuers, as the context
requires.

 

“Letter of Credit Outstanding” shall
mean, at any time, the sum of, without duplication, (a) the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit issued under the
Revolving Credit Commitment and (ii) the aggregate amount of all Unpaid
Drawings in respect of all Letters of Credit issued under the Revolving Credit
Commitment and (b) the sum of (i) the aggregate Stated Amount of all
outstanding Letters of Credit issued under the Extended Revolving Credit
Commitment and (ii) the aggregate amount of all Unpaid Drawings in respect of
all Letters of Credit issued under the Extended Revolving Credit Commitment.

 

“Letter of Credit Request” shall have
the meaning provided in Section 3.2.

 

“Level I Status” shall mean, on any
date, the circumstance that the Consolidated Total Debt to Consolidated EBITDA
Ratio is greater than or equal to 5.00 to 1.00 as of such date.

 

“Level II Status” shall mean, on any
date, the circumstance that Level I Status does not exist and the Consolidated
Total Debt to Consolidated EBITDA Ratio is greater than or equal to 4.50 to
1.00 as of such date.

 

“Level III Status” shall mean, on any
date, the circumstance that neither Level I Status nor Level II Status exists
and the Consolidated Total Debt to Consolidated EBITDA Ratio is greater than or
equal to 4.00 to 1.00 as of such date.

 

“Level IV Status” shall mean, on any
date, the circumstance that the Consolidated Total Debt to Consolidated EBITDA
Ratio is less than 4.00 to 1.00 as of such date.

 

“Lien” shall mean any mortgage,
pledge, security interest, hypothecation, assignment, lien (statutory or other)
or similar encumbrance (including any agreement to give any of the foregoing,
any conditional sale or other title retention agreement or any lease in the
nature thereof).

 

“Loan” shall mean any Revolving Credit
Loan, Extended Revolving Credit Loan, Swingline Loan, Term Loan, New
Revolving Loan, New Extended Revolving Loan, New Tranche H Term Loan, New
Tranche I Term Loans, Incremental Refinancing Revolving Credit Loan, or
Incremental Refinancing Term Loan made by any Lender hereunder.

 

“Local Time” shall mean (a) with
respect to a Loan, Borrowing or Letter of Credit denominated in Dollars, New
York time, and (b) with respect to a Eurodollar Loan or Eurodollar
Borrowing denominated in any Foreign Currency, London time.

 

“Luxembourg Pledge Agreements” shall mean
the Luxembourg Pledge Agreements entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other Secured Parties named therein, 

 

32

 

substantially in the form of
Exhibit M, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Management Group” shall mean, at any
time, the Chairman of the Board, any President, any Executive Vice President or
Vice President, any Managing Director, any Treasurer and any Secretary of any
of the Parent Companies, Holdings, the US Borrower or any Subsidiaries at such
time.

 

“Mandatory Borrowing” shall have the
meaning provided in Section 2.1(d).

 

“Material Adverse Change” shall mean
any change in the business, assets, operations, properties or financial
condition of Holdings, the US Borrower and its Subsidiaries, taken as a whole,
that would materially adversely affect the ability of Holdings, the US Borrower
and the other Credit Parties, taken as a whole, to perform their obligations
under this Agreement or any of the other Credit Documents.

 

“Material Adverse Effect” shall mean a
circumstance or condition affecting the business, assets, operations,
properties or financial condition of Holdings, the US Borrower and the
Subsidiaries, taken as a whole, that would materially adversely affect (a) the
ability of Holdings, the US Borrower and the other Credit Parties, taken as a
whole, to perform their obligations under this Agreement or any of the other
Credit Documents or (b) the rights and remedies of the Administrative
Agent and the Lenders under this Agreement or any of the other Credit
Documents.

 

“Material Subsidiary” shall mean, at
any date of determination, (a) the UK Borrower and (b) each other
Restricted Subsidiary of the US Borrower (i) whose total assets at the
last day of the Test Period ending on the last day of the most recent fiscal
period for which Section 9.1 Financials have been delivered were equal to
or greater than 5% of the Consolidated Total Assets of the US Borrower and the
Restricted Subsidiaries at such date or (ii) whose gross revenues for such
Test Period were equal to or greater than 5% of the consolidated gross revenues
of the US Borrower and the Restricted Subsidiaries for such period, in each
case determined in accordance with GAAP.

 

“Maturity Date” shall mean the Tranche
A-1 Term Loan Maturity Date, the Tranche A-2 Term Loan Maturity Date, Tranche E
Term Loan Maturity Date, the Tranche G Term Loan Maturity Date, Tranche H Term
Loan Maturity Date, Tranche I Term Loan Maturity Date, Extended Revolving
Credit Maturity Date or the Revolving Credit Maturity Date.

 

“Minimum Borrowing Amount” shall mean (a) with
respect to a Dollar Borrowing of Term Loans, Revolving Credit Loans or Extended
Revolving Credit Loans, $1,000,000, (b) with respect to a Foreign Currency
Borrowing of Term Loans, Revolving Credit Loans or Extended Revolving Credit
Loans, the smallest amount of the applicable Foreign Currency that has a Dollar
Equivalent in excess of $1,000,000 and (c) with respect to a Borrowing of
Swingline Loans, $100,000.

 

33

 

“Minority Investment” shall mean any
Person (other than a Subsidiary) in which the US Borrower or any Restricted
Subsidiary owns capital stock or other equity interests.

 

“Moody’s” shall mean Moody’s Investors
Service, Inc. or any successor by merger or consolidation to its business.

 

“Mortgage” shall mean a Mortgage,
Assignment of Leases and Rents, Security Agreement and Financing Statement or
other Security Document entered into by the owner of a Mortgaged Property and
the Administrative Agent for the benefit of the Lenders and the other Secured
Parties named therein in respect of that Mortgaged Property, substantially in
the form of Exhibit F or, in the case of Mortgaged Properties located
outside the United States of America, in such form as agreed between the US
Borrower and the Administrative Agent, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Mortgaged Property” shall mean,
initially, each parcel of real estate and the improvements thereto owned by a
Credit Party and identified on Schedule 1.1(b), and includes each other
parcel of real property and improvements thereto with respect to which a
Mortgage is granted pursuant to Section 9.15.

 

“Net Cash Proceeds” shall mean, with
respect to any Prepayment Event or the issuance after the Funding Date by the
US Borrower of any Senior Subordinated Notes or capital stock, (a) the
gross cash proceeds (including payments from time to time in respect of
installment obligations, if applicable, but only as and when received) received
by or on behalf of Holdings, the US Borrower or any of the Restricted
Subsidiaries in respect of such Prepayment Event or issuance, as the case may
be, less (b) the sum of:

 

(i)  in the case of any Prepayment
Event, the amount, if any, of all taxes paid or estimated to be payable by
Holdings, the US Borrower or any of the Restricted Subsidiaries in connection
with such Prepayment Event,

 

(ii)  in the case of any Prepayment
Event (other than a Debt Incurrence Prepayment Event), the amount of any
reasonable reserve established in accordance with GAAP against any liabilities
(other than any taxes deducted pursuant to clause (i) above) (x) associated
with the assets that are the subject of such Prepayment Event and (y) retained
by Holdings, the US Borrower or any of the Restricted Subsidiaries; provided,
that the amount of any subsequent reduction of such reserve (other than in
connection with a payment in respect of any such liability) shall be deemed to
be Net Cash Proceeds of such a Prepayment Event occurring on the date of such
reduction,

 

(iii)  in the case of any Prepayment
Event (other than a Debt Incurrence Prepayment Event), the amount of any
Indebtedness (other than any Indebtedness hereunder) secured by a Lien on the
assets that are the subject of such Prepayment Event to the extent that the
instrument creating or evidencing such 

 

34

 

Indebtedness requires that such Indebtedness be repaid upon
consummation of such Prepayment Event,

 

(iv)  in the case of any Asset Sale
Prepayment Event (other than an Asset Sale Prepayment Event consummated
pursuant to Section 10.4(e)), the amount of any proceeds of such Asset
Sale Prepayment Event that the US Borrower has reinvested (or intends to
reinvest within one year of the date of such Asset Sale Prepayment Event) in
the business of the US Borrower or any of the Restricted Subsidiaries (subject
to Section 9.14), provided that any portion
of such proceeds that has not been so reinvested within such one-year period
shall (x) be deemed to be Net Cash Proceeds of an Asset Sale Prepayment
Event occurring on the last day of such one-year period and (y) be applied
to the repayment of Term Loans in accordance with Section 5.2(a)(i); provided
further that, for purposes of the preceding proviso,
such one-year period shall be extended by up to twelve months (or, if less,
extended by up to the shortest period of time in excess of one year that such a
reinvestment period exists pursuant to, or may be extended under the terms of,
any instrument governing any publicly offered or privately placed Indebtedness
of Holdings or the US Borrower) from the last day of such one-year period so
long as (A) such proceeds are to be reinvested within such additional
twelve-month period under the US Borrower’s business plan as most recently
adopted in good faith by its Board of Directors and (B) the US Borrower
believes in good faith that such proceeds will be so reinvested within such
additional twelve-month period, and

 

(v)  in the case of any Prepayment Event
or the issuance by the US Borrower of any Senior Subordinated Notes or capital
stock, reasonable and customary fees, commissions, expenses, issuance costs,
discounts and other costs paid by either of the Parent Companies, Holdings, the
US Borrower or any of the Restricted Subsidiaries, as applicable, in connection
with such Prepayment Event or issuance, as the case may be (other than those
payable to either of the Parent Companies, Holdings, the US Borrower or any
Subsidiary of the US Borrower), in each case only to the extent not already
deducted in arriving at the amount referred to in clause (a) above.

 

“New Extended Revolving Loan” shall
have the meaning provided in Section 2.14.

 

“New Extended Revolving Loan Commitments”
shall have the meaning provided in Section 2.14.

 

“New Extended Revolving Loan Lender”
shall have the meaning provided in Section 2.14.

 

“New Loan Commitments” shall have the
meaning provided in Section 2.14.

 

“New Revolving Loan” shall have the
meaning provided in Section 2.14.

 

“New Revolving Loan Commitments” shall
have the meaning provided in Section 2.14.

 

35

 

“New Revolving Loan Lender” shall have
the meaning provided in Section 2.14.

 

“New Sellers” shall mean mg
technologies ag and certain of its subsidiaries that are parties to the Sale
and Purchase Agreement.

 

“New Tranche H Term Loan” shall have
the meaning provided in Section 2.14.

 

“New Tranche H Term Loan Commitments”
shall have the meaning provided in Section 2.14.

 

“New Tranche H Term Loan Lender” shall
have the meaning provided in Section 2.14.

 

“New Tranche I Term Loan” shall have
the meaning provided in Section 2.14.

 

“New Tranche I Term Loan Commitments”
shall have the meaning provided in Section 2.14.

 

“New Tranche I Term Loan Lender” shall
have the meaning provided in Section 2.14.

 

“Non-Defaulting Lender”
shall mean and include each Lender other than a Defaulting Lender.

 

“Non-Excluded Taxes” shall have the
meaning provided in Section 5.4(a).

 

“Notice of Borrowing” shall have the
meaning provided in Section 2.3.

 

“Notice of Conversion or Continuation”
shall have the meaning provided in Section 2.6.

 

“Obligations” shall have the meaning
assigned to such term in the applicable Security Documents.

 

“OID” shall have the meaning given to
that term in Section 2.15.

 

“Original Seller” shall mean Laporte
Plc.

 

“Parent” shall mean Rockwood Holdings, Inc.,
a Delaware corporation.

 

“Parent Common Stock” shall mean any
class of common stock of Parent outstanding after the Funding Date.

 

“Parent Companies” shall mean the
Parent, PIK Holdco and any direct or indirect wholly owned Subsidiary of Parent
or PIK Holdco that is a direct or indirect parent company of Holdings.

 

36

 

“Participant” shall have the meaning
provided in Section 14.6(c)(i).

 

“PBGC” shall mean the Pension Benefit
Guaranty Corporation established pursuant to Section 4002 of ERISA, or any
successor thereto.

 

“Perfection Certificate” shall mean a
certificate in the form of Exhibit G or any other form approved by the
Administrative Agent.

 

“Permitted Acquisition” shall mean the
acquisition, by merger or otherwise, by the US Borrower or any of the
Restricted Subsidiaries of assets or capital stock or other equity interests,
so long as (a) such acquisition and all transactions related thereto shall
be consummated in accordance with applicable law; (b) such acquisition
shall result in the issuer of such capital stock or other equity interests
becoming (i) a Restricted Subsidiary and (ii)(x) in the case of a
Restricted Domestic Subsidiary, a US Subsidiary Guarantor or (y) in the
case of a Restricted Foreign Subsidiary, a Foreign Subsidiary Guarantor, in
each case to the extent required by Section 9.11; (c) such acquisition
shall result in the Administrative Agent, for the benefit of the applicable
Lenders, being granted a security interest in any capital stock or any assets
so acquired to the extent required by Sections 9.11, 9.12 and/or 9.15; (d) after
giving effect to such acquisition, no Default or Event of Default shall have
occurred and be continuing; and (e) the US Borrower shall be in
compliance, on a pro  forma basis after giving effect to such
acquisition (including any Indebtedness assumed or permitted to exist or
incurred pursuant to Sections 10.1(j) and 10.1(k), respectively, and
any related Pro Forma Adjustment), with the covenants set forth in
Sections 10.9 and 10.10, as such covenants are recomputed as at the last
day of the most recently ended Test Period under such Sections as if such
acquisition had occurred on the first day of such Test Period.

 

“Permitted Additional Notes” shall
mean senior or senior subordinated notes, issued by the US Borrower, (i) the
terms of which (1) do not provide for any scheduled repayment or
redemption, mandatory repayment or redemption or sinking fund obligation prior
to the date that is 182 days following the date that is eight years after the
Funding Date (other than customary offers to purchase upon a change of control,
asset sale or event of loss and customary acceleration rights after an event of
default) and (2) to the extent senior subordinated notes,
provide for customary subordination to the Obligations under the Credit
Documents, (ii) the covenants, events of default, Subsidiary guarantees
and other terms of which (other than interest rate and redemption premiums),
taken as a whole, are not more restrictive to the US Borrower and the
Subsidiaries than those in the Subordinated Notes, (iii) which shall bear
a rate of interest determined by the Board of Directors of the US Borrower to
be a market rate of interest at the date of their issuance, (iv) of which
no Subsidiary of the US Borrower (other than a Guarantor) is an obligor under
such notes that is not an obligor under the Subordinated Notes and (v) the
principal amount of which, when taken together with the amount of any New Loan
Commitments hereunder (or New Revolving Loans, New Extended Revolving Loans,
New Tranche H Term Loans or New Tranche I Term Loans made pursuant thereto),
shall not exceed $250,000,000 in the aggregate.

 

37

 

“Permitted Additional PIK Notes” shall
mean (a) PIK Notes other than PIK Notes issued as Permitted PIK Debt and (b) PIK
Refinancing Indebtedness or PIK Refinancing Preferred Stock issued in
connection with any refinancing or replacement of PIK Notes issued under clause
(a) of this definition; provided, that the aggregate principal
amount of Permitted Additional PIK Notes and Permitted Additional Subordinated
Notes outstanding at any time shall not exceed $250,000,000, plus
accrued interest thereon as provided in the PIK Notes Documents or the
Subordinated Note Indenture, as the case may be.

 

“Permitted Additional Subordinated Notes”
shall mean (i) Subordinated Notes other than Subordinated Notes issued as
Permitted Subordinated Debt and/or (ii) Senior Subordinated Notes other
than Senior Subordinated Notes issued as Permitted Senior Subordinated Debt; provided,
that the aggregate principal amount of Permitted Additional PIK Notes and
Permitted Additional Subordinated Notes outstanding at any time shall not
exceed $250,000,000, plus accrued interest thereon as provided in the
PIK Notes Documents, the Subordinated Note Indenture or the Senior Subordinated
Notes Indenture, as the case may be.

 

“Permitted Amendments” shall mean an
extension of the final maturity date of the Extended Revolving Credit Loans and
the Extended Revolving Credit Commitments of the Accepting Lenders (provided,
that such extensions may not result in having more than two additional final
maturity date under this Agreement in any year without the consent of the
Administrative Agent) and in, connection therewith, any increase in the
Applicable ABR Margin and Applicable Eurodollar Margin with respect to the
applicable Loans and/or Commitments of the Accepting Lenders and the payment of
additional fees to the Accepting Lenders (such increase and/or payments to be
in the form of cash, equity interest or other property to the extent not
prohibited by this Agreement).

 

“Permitted Capital Expenditure Amount”
shall have the meaning provided in Section 10.11(a).

 

“Permitted Investments” shall mean (a) securities
issued or unconditionally guaranteed by the United States government or any agency
or instrumentality thereof, in each case having maturities of not more than 24
months from the date of acquisition thereof; (b) securities issued by any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof or any political subdivision of any
such state or any public instrumentality thereof having maturities of not more
than 24 months from the date of acquisition thereof and, at the time of
acquisition, having an investment grade rating generally obtainable from either
S&P or Moody’s (or, if at any time neither S&P nor Moody’s shall be
rating such obligations, then from another nationally recognized rating
service); (c) commercial paper issued by any Lender or any bank holding
company owning any Lender; (d) commercial paper maturing no more than
12 months after the date of creation thereof and, at the time of
acquisition, having a rating of at least A-2 or P-2 from either S&P or
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service); (e) domestic and 

 

38

 

eurodollar certificates of
deposit or bankers’ acceptances maturing no more than two years after the date
of acquisition thereof issued by any Lender or any other bank having combined
capital and surplus of not less than $250,000,000 in the case of domestic banks
and $100,000,000 (or the dollar equivalent thereof) in the case of foreign banks;
(f) repurchase agreements with a term of not more than 30 days for
underlying securities of the type described in clauses (a), (b) and (e) above
entered into with any bank meeting the qualifications specified in clause (e) above
or securities dealers of recognized national standing; (g) marketable
short-term money market and similar securities, having a rating of at least A-2
or P-2 from either S&P or Moody’s (or, if at any time neither S&P nor
Moody’s shall be rating such obligations, an equivalent rating from another
nationally recognized rating service); (h) shares of investment companies
that are registered under the Investment Company Act of 1940 and invest solely
in one or more of the types of securities described in clauses (a) through
(g) above; and (i) in the case of investments by any Restricted
Foreign Subsidiary or investments made in a country outside the United States
of America, other customarily utilized high-quality investments in the country
where such Restricted Foreign Subsidiary is located or in which such investment
is made.

 

“Permitted Liens” shall mean (a) Liens
for taxes, assessments or governmental charges or claims not yet due or which
are being contested in good faith and by appropriate proceedings for which
appropriate reserves have been established in accordance with GAAP; (b) Liens
in respect of property or assets of the US Borrower or any of the Subsidiaries
imposed by law, such as carriers’, warehousemen’s and mechanics’ Liens and
other similar Liens arising in the ordinary course of business, in each case so
long as such Liens arise in the ordinary course of business and do not
individually or in the aggregate have a Material Adverse Effect; (c) Liens
arising from judgments or decrees in circumstances not constituting an Event of
Default under Section 11.14; (d) Liens incurred or deposits made in
connection with workers’ compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business; (e) ground leases in respect of real
property on which facilities owned or leased by the US Borrower or any of its
Subsidiaries are located; (f) easements, rights-of-way, restrictions,
minor defects or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the business of
Holdings, the US Borrower and its Subsidiaries, taken as a whole; (g) any
interest or title of a lessor or secured by a lessor’s interest under any lease
permitted by this Agreement; (h) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (i) Liens on goods the purchase
price of which is financed by a documentary letter of credit issued for the
account of the US Borrower or any of its Subsidiaries; provided, that
such Lien secures only the obligations of the US Borrower or such Subsidiaries
in respect of such letter of credit to the extent permitted under Section 10.1;
(j) leases or subleases and licenses or sub-licenses granted to others not
interfering in any material respect with the business of Holdings, the US
Borrower and its Subsidiaries, taken as a whole; (k) Liens created in the
ordinary course of business in favor of banks and other financial institutions
over credit balances of any bank accounts of any of the Parent Companies,
Holdings, the US Borrower and the Restricted Subsidiaries held at such banks or

 

39

 

financial institutions, as
the case may be, to facilitate the operation of cash pooling and/or interest
set-off arrangements in respect of such bank accounts in the ordinary course of
business; and (l) Liens on accounts receivables, the account into which
such accounts receivable are paid and other related rights in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable, in each case, in
favor of the factoring or financing party in respect of such accounts
receivable; provided, that the applicable accounts receivable financing
facilities or factoring arrangements are permitted by Section 10.4(e).

 

“Permitted PIK Debt” shall mean (a) the
PIK Notes and (b) the 2011 Senior Notes; provided, that the
aggregate principal amount of such PIK Notes and 2011 Senior Notes (together
with the aggregate principal amount of the PIK Refinancing Indebtedness and the
aggregate liquidation preference of PIK Refinancing Preferred Stock, in each
case to the extent replacing the foregoing) outstanding at any time shall not
exceed $170,000,000, plus accrued interest and dividends in accordance
with the PIK Notes Documents or the 2011 Senior Notes Indenture, as applicable.

 

“Permitted Sale Leaseback” shall mean
any Sale Leaseback consummated by the US Borrower or any of the Restricted
Subsidiaries after the Funding Date; provided, that such Sale Leaseback
is consummated for fair value as determined at the time of consummation in good
faith by the US Borrower and, in the case of any Sale Leaseback (or series of
related Sales Leasebacks) the aggregate proceeds of which exceed $20,000,000,
the Board of Directors of the US Borrower (which such determination may take
into account any retained interest or other investment of the US Borrower or
such Restricted Subsidiary in connection with, and any other material economic
terms of, such Sale Leaseback).

 

“Permitted Senior Subordinated Debt”
shall mean (a) the Senior Subordinated Loans and (b) the Senior
Subordinated Notes to the extent that the Net Cash Proceeds therefrom are
applied to prepay the principal of, and accrued interest on, the Senior
Subordinated Loans or refinance or replace other Senior Subordinated Notes; provided
that the aggregate principal amount of such Senior Subordinated Loans and
Senior Subordinated Notes outstanding at any time shall not exceed the sum of
$350,000,000 and Є419,076,355.71 plus any redemption or prepayment
premiums payable in respect of the Senior Subordinated Loans.

 

“Permitted Subordinated Debt” shall
mean the Subordinated Notes, provided that the aggregate principal
amount of such Subordinated Notes outstanding at any time shall not exceed
$375,000,000.

 

“Person” shall mean any individual,
partnership, joint venture, firm, corporation, limited liability company,
association, trust or other enterprise or any Governmental Authority.

 

“PIK Holdco” shall mean Rockwood
Specialties Consolidated, Inc., a Delaware corporation.

 

40

 

“PIK Notes” shall mean pay-in-kind
loans and notes of PIK Holdco issued pursuant to the documents listed in clauses
(a) and (b) of the definition of the PIK Notes Documents.

 

“PIK Notes Documents” shall mean (a) the
PIK Bridge Loan Agreement dated as of November 20, 2000, as amended,
supplemented or otherwise modified from time to time, among PIK Holdco, as
Borrower, the lenders from time to time parties thereto, Merrill Lynch Capital
Corporation, as agent, and Merrill Lynch International, as arranger, pursuant
to which the PIK Notes were issued, (b) the PIK Note Purchase Agreement
between PIK Holdco and Allianz Lebensversicherungs-AG, Stuttgart, dated as of February 7,
2001, as the same may be amended, supplemented or otherwise modified from time
to time and (c) all agreements and instruments governing the issuance or
terms of any PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock.

 

“PIK Proceeds Equity Contribution”
shall mean the contribution by Holdings to the US Borrower as common equity of
an amount in cash equal to the amount of the Net Cash Proceeds of Permitted
Additional PIK Notes (other than Permitted Additional PIK Notes described in
clause (b) of the definition thereof) issued by PIK Holdco, with such
contribution made using the Net Cash Proceeds of a prior contribution in cash
by PIK Holdco to Holdings from the Net Cash Proceeds of the issuance by PIK
Holdco of such Permitted Additional PIK Notes.

 

“PIK Refinancing Indebtedness” shall
mean any Indebtedness of PIK Holdco or Holdings issued or given in exchange
for, or the proceeds of which are used substantially simultaneously with the
issuance thereof to refinance or replace, PIK Notes or Permitted Additional PIK
Notes incurred pursuant to the terms of this Agreement, so long as (i) the
aggregate principal amount of such Indebtedness does not exceed the aggregate
principal amount of the PIK Notes or Permitted Additional PIK Notes for which
such Indebtedness is being exchanged, or to be refinanced or replaced with such
Indebtedness, plus accrued interest, redemption premiums or dividends in
accordance with the PIK Notes Documents, (ii) such Indebtedness has a
maturity no earlier than the maturity of the PIK Notes or Permitted Additional
PIK Notes being refinanced or replaced, (iii) such Indebtedness does not
provide for the payment of interest in cash on any date that is earlier than
the date upon which interest or dividends may be paid in cash under the terms
of the PIK Notes or Permitted Additional PIK Notes being refinanced or
replaced, (iv) all other terms of such refinancing or replacement
Indebtedness are, taken as a whole, no more adverse to the interests of the
Lenders than those previously existing with respect to the PIK Notes or
Permitted Additional PIK Notes being refinanced or replaced and (v) such
refinancing or replacement Indebtedness shall bear a rate of interest
determined by the Board of Directors of PIK Holdco or Holdings, as applicable,
to be a market rate of interest at the date of such refinancing or replacement
and have other terms customary for similar issuances under similar market
conditions or otherwise be on terms reasonably acceptable to the Administrative
Agent.

 

“PIK Refinancing Preferred Stock”
shall mean any preferred capital stock or preferred equity interest of PIK
Holdco or Holdings issued or given in exchange for, or 

 

41

 

the proceeds of which are
used substantially simultaneously with the issuance thereof to refinance or
replace, PIK Notes or Permitted Additional PIK Notes incurred pursuant to the
terms of this Agreement, so long as (i) the aggregate liquidation preference
of such preferred capital stock or preferred equity interest does not exceed
the aggregate principal amount of the PIK Notes or Permitted Additional PIK
Notes for which such preferred capital stock or preferred equity interest is
being exchanged, or to be refinanced or replaced with such preferred capital
stock or preferred equity interest, plus accrued interest or dividends
in accordance with the PIK Notes Documents, (ii) such capital stock or
equity interest has a maturity no earlier than the maturity of the PIK Notes or
Permitted Additional PIK Notes being refinanced or replaced, (iii) such
capital stock or equity interest does not provide for the payment of dividends
in cash on any date that is earlier than the date upon which interest or
dividends may be paid in cash under the terms of the PIK Notes or Permitted
Additional PIK Notes being refinanced or replaced, (iv) all other terms of
such refinancing or replacement capital stock or equity interest are, taken as
a whole, no more adverse to the interests of the Lenders than those previously
existing with respect to the PIK Notes or Permitted Additional PIK Notes being
refinanced or replaced and (v) such refinancing or replacement capital
stock or equity interest shall bear a dividend rate determined by the Board of
Directors of PIK Holdco or Holdings, as applicable, to be a market dividend
rate at the date of such refinancing or replacement and have other terms
customary for similar issuances under similar market conditions or otherwise be
on terms reasonably acceptable to the Administrative Agent.

 

“Plan” shall mean any multiemployer or
single-employer plan, as defined in Section 4001 of ERISA and subject to
Title IV of ERISA, that is or was within any of the preceding five plan years
maintained or contributed to by (or to which there is or was an obligation to
contribute or to make payments to) the US Borrower, a Subsidiary or an ERISA
Affiliate.

 

“Pledge Agreement” shall mean the Pledge
Agreement, entered into by Holdings, the US Borrower, the other pledgors party
thereto and the Administrative Agent for the benefit of the Lenders,
substantially in the form of Exhibit H, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Post-Closing Schedule” shall have the
meaning provided in Section 9.18.

 

“Prepayment Event” shall mean any
Asset Sale Prepayment Event, Debt Incurrence Prepayment Event or any Permitted
Sale Leaseback.

 

“Prime Rate” shall mean the rate of
interest per annum announced from time to time by CS as its reference rate in
effect at its principal office in New York City (the Prime Rate not being
intended to be the lowest rate of interest charged by CS in connection with
extensions of credit to debtors); each change in the Prime Rate shall be
effective as of the opening of business on the date such change is announced as
being effective.

 

“Pro Forma Adjustment” shall mean, for
any Test Period that includes any of the six fiscal quarters first ending
following any Permitted Acquisition, with respect to 

 

42

 

the Acquired EBITDA of the
applicable Acquired Entity or Business or the Consolidated EBITDA of the
Borrower affected by such acquisition, the pro  forma increase or
decrease in such Acquired EBITDA or such Consolidated EBITDA, as the case may
be, projected by the US Borrower in good faith as a result of reasonably
identifiable and supportable net cost savings or additional net costs, as the
case may be, realizable during such period by combining the operations of such
Acquired Entity or Business with the operations of the US Borrower and its
Subsidiaries; provided, that so long as such net cost savings or
additional net costs will be realizable at any time during such six-quarter
period, it may be assumed, for purposes of projecting such pro forma
increase or decrease to such Acquired EBITDA or such Consolidated EBITDA, as
the case may be, that such net cost savings or additional net costs will be
realizable during the entire such period; provided  further, that
any such pro forma increase or decrease to such Acquired
EBITDA or such Consolidated EBITDA, as the case may be, shall be without
duplication for net cost savings or additional net costs actually realized
during such period and already included in such Acquired EBITDA or such
Consolidated EBITDA, as the case may be.

 

“Pro Forma Adjustment Certificate”
shall mean any certificate of an Authorized Officer of the US Borrower
delivered pursuant to Section 9.1(h) or setting forth the information
described in clause (iv) to Section 9.1(d).

 

“Purchase Agreement” shall mean the
Business and Share Sale and Purchase Agreement dated September 25, 2000,
between the Original Seller and Parent pursuant to which Parent, the US
Borrower and the Subsidiaries (i) acquired from the Original Seller (x) all
the Original Seller’s assets (including capital stock) primarily used in the
conduct of the Original Seller’s Plastics & Compounding, Water
Technologies, Timber Treatments, Water Treatments, GD Holmes, Electronics,
Pigments and Additives business divisions and (y) all the outstanding
capital stock of Laporte Electronics France, S.A. and (ii) assumed certain
liabilities of the Original Seller, all as provided in such purchase agreement,
for consideration payable to the Original Seller in the aggregate amount of
$1,175,000,000 in cash (subject to certain purchase price adjustments in
accordance with such purchase agreement).

 

“Qualified Preferred Stock” shall mean
any preferred capital stock or preferred equity interest of any of the Parent
Companies (a) that does not provide for any cash dividend payments or
other cash distributions in respect thereof on or prior to the Tranche G Term
Loan Maturity Date and (b) that by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable) or upon the happening of any event does not (i)(x) mature or
become mandatorily redeemable pursuant to a sinking fund obligation or
otherwise, (y) become convertible or exchangeable at the option of the holder
thereof for Indebtedness or preferred stock that is not Qualified Preferred
Stock or (z) become redeemable at the option of the holder thereof (other
than as a result of a change of control event), in whole or in part, in each
case on or prior to the first anniversary of the Tranche G Term Loan
Maturity Date and (ii) provide holders thereunder with any rights upon the
occurrence of a “change of control” event prior to the repayment of the
Obligations under the Credit Documents.

 

43

 

“Quotation Day” shall mean, with
respect to any Eurodollar Borrowing denominated in a Foreign Currency and any
Interest Period, the day on which it is market practice in the relevant
interbank market for prime banks to give quotations for deposits in the
currency of such Borrowing for delivery on the first day of such Interest
Period.  If such quotations would
normally be given by prime banks on more than one day, the Quotation Day will be
the last of such days.

 

“Real Estate” shall have the meaning
given to that term in Section 9.1(f).

 

“Recalculation Date” shall have the
meaning provided in Section 1.2.

 

“Reference Lender” shall mean CS.

 

“Refinancing Date” shall mean the date
that is 182 days prior to the maturity of the Subordinated Notes.

 

“Refinancing Series” shall have the
meaning given to that term in Section 2.15.

 

“Register” shall have the meaning
provided in Section 14.6(b)(iv).

 

“Regulation D” shall mean
Regulation D of the Board as from time to time in effect and any successor
to all or a portion thereof establishing reserve requirements.

 

“Regulation T” shall mean
Regulation T of the Board as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.

 

“Regulation U” shall mean
Regulation U of the Board as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.

 

“Regulation X” shall mean
Regulation X of the Board as from time to time in effect and any successor
to all or a portion thereof establishing margin requirements.

 

“Related Parties” means, with respect
to any specified Person, such Person’s Affiliates and the directors, officers,
employees, agents, trustees and advisors of such Person and any Person that
possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of such Person, whether through the ability to
exercise voting power, by contract or otherwise.

 

“Repayment Amount” shall mean any
Tranche A-1 Repayment Amount, any Tranche A-2 Repayment Amount, any
Tranche E Repayment Amount, any Tranche G Repayment Amount, any Tranche H
Repayment Amount or any Tranche I Repayment Amount.

 

44

 

“Repayment Date” shall mean a Tranche A-1
Repayment Date, a Tranche A-2 Repayment Date, a Tranche E Repayment Date, a
Tranche G Repayment Date, any Tranche H Repayment Date or any Tranche I
Repayment Date.

 

“Reportable Event” shall mean an event
described in Section 4043 of ERISA and the regulations thereunder.

 

“Required Extended Revolving Credit
Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding a majority of the Dollar Equivalent of the Adjusted Total Extended
Revolving Credit Commitment at such date or (b) if the Total Extended
Revolving Credit Commitment has been terminated, the holders (excluding
Defaulting Lenders) of a majority of the outstanding principal amount of the
Dollar Equivalent of the Extended Revolving Credit Loans and Letter of Credit
Exposures relating to Letters of Credit issued under the Extended Revolving
Credit Commitment (excluding the Loans and Letter of Credit Exposures of
Defaulting Lenders) in the aggregate at such date.

 

“Required Lenders” shall mean, at any
date, (a) Non-Defaulting Lenders having or holding a majority of the sum
of the Dollar Equivalent of (i) the Adjusted Total Revolving Credit
Commitment at such date, (ii) the Adjusted Total Extended Revolving Credit
Commitment at such date, (iii) the Adjusted Total Term Loan Commitment at
such date and (iv) the outstanding principal amount of the Term Loans
(excluding the Term Loans held by Defaulting Lenders) at such date or (b) if
the Total Revolving Credit Commitment, the Total Extended Revolving Credit
Commitment and the Total Term Loan Commitment have been terminated or for the
purposes of acceleration pursuant to Section 11, the holders (excluding
Defaulting Lenders) of a majority of the Dollar Equivalent of the outstanding
principal amount of the Loans and Letter of Credit Exposures (excluding the
Loans and Letter of Credit Exposures of Defaulting Lenders) in the aggregate at
such date.

 

“Required Revolving Credit Lenders”
shall mean, at any date, (a) Non-Defaulting Lenders having or holding a
majority of the Dollar Equivalent of the Adjusted Total Revolving Credit
Commitment at such date or (b) if the Total Revolving Credit Commitment
has been terminated, the holders (excluding Defaulting Lenders) of a majority
of the outstanding principal amount of the Dollar Equivalent of the Revolving
Credit Loans and Letter of Credit Exposures relating to Letters of Credit
issued under the Revolving Credit Commitment (excluding the Loans and Letter of
Credit Exposure of Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche A Lenders” shall
mean, at any date, Non-Defaulting Lenders having or holding a majority of the
sum of (a) the portion of the Adjusted Total Term Loan Commitment that
relates to Tranche A Term Loan Commitments at such date and (b) the
outstanding principal amount of the Tranche A-1 Term Loans and the Tranche A-2
Term Loans (excluding the Tranche A-1 Term Loans and Tranche A-2 Term Loans
held by Defaulting Lenders) in the aggregate at such date.

 

45

 

“Required Tranche E Term Loan Lenders”
shall mean, at any date, Non-Defaulting Lenders having or holding a majority of
the sum of (a) the portion of the Adjusted Total Term Loan Commitment that
relates to Tranche E Term Loan Commitments at such date and (b) the outstanding
principal amount of the Tranche E Term Loans (excluding the Tranche E Term
Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche G Term Loan Lenders”
shall mean, at any date, Non-Defaulting Lenders having or holding a majority of
the sum of (a) the portion of the Adjusted Total Term Loan Commitment that
relates to Tranche G Term Loan Commitments at such date and (b) the
outstanding principal amount of the Tranche G Term Loans (excluding the Tranche
G Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche H Term Loan Lenders”
shall mean, at any date, Non-Defaulting Lenders having or holding a majority of
the sum of (a) the portion of the Adjusted Total Term Loan Commitment that
relates to Tranche H Term Loan Commitments at such date and (b) the
outstanding principal amount of the Tranche H Term Loans (excluding the Tranche
H Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche I Term Loan Lenders”
shall mean, at any date, Non-Defaulting Lenders having or holding a majority of
the sum of (a) the portion of the Adjusted Total Term Loan Commitment that
relates to Tranche I Term Loan Commitments at such date and (b) the
outstanding principal amount of the Tranche I Term Loans (excluding the Tranche
I Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Requirement of Law” shall mean, as to
any Person, the Certificate of Incorporation and By-Laws or other
organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or assets or to which such Person or any of its property or assets is
subject.

 

“Restatement Date” shall mean the date
on which the conditions to the effectiveness of the amendment and restatement
of the Existing Credit Agreement as set forth herein that are specified in the
Amendment Agreement shall be satisfied.

 

“Restricted Domestic Subsidiary” shall
mean a Domestic Subsidiary that is a Restricted Subsidiary.

 

“Restricted Foreign Subsidiary” shall
mean a Foreign Subsidiary that is a Restricted Subsidiary.

 

“Restricted Subsidiary” shall mean any
Subsidiary of the US Borrower other than an Unrestricted Subsidiary.

 

46

 

“Revolver Refinancing
Indebtedness” shall mean Indebtedness issued or incurred under a new
revolving credit facility (a “Additional Refinancing Revolver”) that
permanently refinances, refunds, extends, renews or replaces all or a portion
of the Revolving Credit Commitments or the Extended Revolving Credit
Commitments hereunder; provided that (a) the available commitments
under such Additional Refinancing Revolver when added to any Revolving Credit
Commitments and Extended Revolving Credit Commitments not permanently
refinanced with such Additional Refinancing Revolver shall not exceed the sum of the Total Revolving Credit Commitments and the Total
Extended Revolving Credit Commitments outstanding immediately prior to the
Restatement Date, (b) the US Borrower and the UK Borrower shall
be the only borrowers under such Additional Refinancing Revolver and the
Subsidiary Guarantors shall be the only guarantors, if any, with respect
thereto, (c) such Additional Refinancing Revolver contains covenants and
events of default which, taken as a whole, are determined in good faith by the
Chief Financial Officer of the US Borrower to be the same in all material
respects as (or less restrictive than) the covenants and events of default
contained herein, (d) the maturity date of the Additional Refinancing
Revolver shall be no shorter than the final maturity of the Revolving Credit
Commitments or the Extended Revolving Credit Commitments that it is
refinancing, (e) the Indebtedness under such Additional Refinancing
Revolver, if secured, is secured only by Liens on the Collateral (and not by
any other assets) granted in favor of the Collateral Agent or another agent
appointed in connection with such Additional Refinancing Revolver that are
subject to the terms of an intercreditor agreement that is reasonably
satisfactory to the Collateral Agent and (f) the interest rate applicable
to the Additional Refinancing Revolver shall be determined by the US Borrower
and the applicable new lenders.

 

“Revolving Credit Commitment” shall
mean, (a) with respect to each Lender that is a Lender on the Funding
Date, the amount set forth opposite such Lender’s name on Schedule 1.1(c) as
such Lender’s “Revolving Credit Commitment” and (b) in the case of any
Lender that becomes a Lender after the Funding Date, the amount specified as
such Lender’s “Revolving Credit Commitment” in the Assignment and Acceptance
pursuant to which such Lender assumed a portion of the Total Revolving Credit
Commitment, in each case as the same may be changed from time to time pursuant
to the terms hereof.

 

“Revolving Credit Commitment Percentage”
shall mean at any time, for each Lender, the percentage obtained by dividing (a) such
Lender’s Revolving Credit Commitment by (b) the aggregate amount of the
Revolving Credit Commitments; provided, that at any time when the Total
Revolving Credit Commitment shall have been terminated, each Lender’s Revolving
Credit Commitment Percentage shall be its Revolving Credit Commitment
Percentage as in effect immediately prior to such termination.

 

“Revolving Credit Exposure” shall
mean, with respect to any Lender at any time, the sum of (a) the aggregate
principal amount of the Dollar Equivalent of the Revolving Credit Loans of such
Lender then outstanding and (b) such Lender’s Letter of Credit Exposure at
such time.

 

47

 

“Revolving Credit Loans” shall have
the meaning provided in Section 2.1(b).

 

“Revolving Credit Maturity Date” shall
mean the date that is six years after the Funding Date, or, if such date is not
a Business Day, the next preceding Business Day.

 

“Rockwood Group” shall mean the US
Borrower and its Restricted Subsidiaries immediately prior to the Acquisition.

 

“RSGI Dollar Debt Escrow Account”
shall mean Dollar Account Number 313122 established with the Financing Escrow
Agent, to be administered pursuant to the terms of the Financing Escrow
Agreement.

 

“RSGI Euro Debt Escrow Account” shall
mean Euro Account Number 7357879780 established with the Financing Escrow
Agent, to be administered pursuant to the terms of the Financing Escrow
Agreement.

 

“Sale and Purchase Agreement” shall
mean the Sale and Purchase Agreement, notarized on April 19, 2004, between
mg technologies ag, MG North America Holdings Inc., Knight Erste Beteiligungs-GmbH,
Knight Zweite Beteiligungs-GmbH, Knight Dritte Beteiligungs-GmbH, Knight Vierte
Beteiligungs-GmbH, Knight Fünfte Beteiligungs-GmbH and RW Holding Corp. as the
same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.

 

“Sale Leaseback” shall mean any
transaction or series of related transactions pursuant to which the US Borrower
or any of the Restricted Subsidiaries (a) sells, transfers or otherwise
disposes of any property, real or personal, whether now owned or hereafter
acquired, and (b) as part of such transaction, thereafter rents or leases
such property or other property that it intends to use for substantially the
same purpose or purposes as the property being sold, transferred or disposed.

 

“S&P” shall mean Standard &
Poor’s Ratings Services or any successor by merger or consolidation to its
business.

 

“SEC” shall mean the Securities and
Exchange Commission or any successor thereto.

 

“Second Amendment”
shall mean the Second Amendment to this Agreement, dated as of December 10,
2004.

 

“Second Amendment
Effective Date” shall mean the date on which the Second Amendment becomes
effective.

 

“Section 9.1 Financials” shall
mean the financial statements delivered, or required to be delivered, pursuant
to Section 9.1(a) or (b) together with the accompanying officer’s
certificate delivered, or required to be delivered, pursuant to Section 9.1(d).

 

48

 

“Secured Parties” shall have the
meaning assigned to such term in the applicable Security Documents.

 

“Security Agreement” shall mean the
Security Agreement entered into by the US Borrower, the other grantors party
thereto and the Administrative Agent for the benefit of the Lenders and the
other Secured Parties named therein, substantially in the form of Exhibit I,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Security Documents” shall mean,
collectively, (a) the Guarantee, (b) the Pledge Agreement, (c) the
Security Agreement, (d) the Foreign Security Documents, (e) the
Mortgages and (f) each other security agreement or other instrument or
document executed and delivered pursuant to Section 9.11 or 9.12 or
pursuant to any of the Security Documents to secure any of the Obligations.

 

“Seller” shall mean any Original
Seller or New Seller.

 

“Senior Secured Debt” shall mean, at
any time, Consolidated Total Debt at such time minus any unsecured
Indebtedness included therein.

 

“Senior Secured Debt to Consolidated
EBITDA Ratio” shall mean, as of any date of determination, the ratio of (a) Senior
Secured Debt as of the last day of the relevant Test Period to (b) Consolidated
EBITDA for such Test Period.

 

“Senior Subordinated Loan Agreement”
shall mean the Senior Subordinated Loan Agreement dated as of the Funding Date
among the US Borrower, as borrower, the several lenders from time to time party
thereto, CS, as administrative agent, Goldman Sachs Credit Partners L.P., as
syndication agent, UBS AG, Stamford Branch, as documentation agent, CS, UBS
Loan Finance LLC and Goldman Sachs Credit Partners L.P., as initial lenders,
and CS, UBS Securities LLC and Goldman Sachs Credit Partners L.P., as lead
arrangers, as the same may be amended, supplemented or otherwise modified from
time to time to the extent permitted by Section 10.7(b).

 

“Senior Subordinated Loans” shall mean
(a) subordinated loans made pursuant to the Senior Subordinated Loan
Agreement and having a final maturity not earlier than the date that is ten
years after the Closing Date and (b) any replacement or refinancing
thereof having terms no more materially adverse to the interests of the Lenders
than the terms thereof; provided, that any such amendment, replacement
or refinancing shall bear a rate of interest determined by the Board of
Directors of the US Borrower to be a market rate of interest at the date of
such amendment, replacement or refinancing and have other terms customary for
similar issuances under similar market conditions or otherwise be on terms
reasonably acceptable to the Administrative Agent.

 

“Senior Subordinated Notes” shall mean
(a) any Senior Subordinated Notes of the US Borrower issued after the
Funding Date pursuant to the Senior Subordinated Notes Indenture to refinance
any amounts outstanding under the Senior Subordinated Loan Agreement plus
any redemption or prepayment premiums payable in respect thereof and (b) any
replacement or refinancing thereof having terms no more 

 

49

 

materially adverse to the
interests of the Lenders than the terms thereof; provided, that any such
amendment, replacement or refinancing shall bear a rate of interest determined
by the Board of Directors of the US Borrower to be a market rate of interest at
the date of such amendment, replacement or refinancing and have other terms
customary for similar issuances under similar market conditions or otherwise be
on terms reasonably acceptable to the Administrative Agent.

 

“Senior Subordinated Notes Indenture”
shall mean any Indenture entered into after the Funding Date pursuant to which
the Senior Subordinated Notes are issued, as the same may be amended,
supplemented or otherwise modified from time to time to the extent permitted by
Section 10.7(b).

 

“Series” shall have the meaning provided in Section 2.14.

 

“Singapore Guarantee” shall mean the
Singapore Guarantee Agreement, made by each of the Singapore Guarantors in
favor of the Administrative Agent for the benefit of the Lenders to the UK
Borrower and the other Secured Parties named therein, substantially in the form
of Exhibit J-1, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Singapore Guarantors” shall mean (a) each
Subsidiary of the US Borrower (other than an Unrestricted Subsidiary) on the
Funding Date that is a member of the Rockwood Group and that is incorporated
under the laws of Singapore P.O.C. and is a party to the Singapore Guarantee
and (b) each Subsidiary of the US Borrower that is incorporated under the
laws of Singapore P.O.C. and that becomes a party to the Singapore Guarantee
after the Funding Date pursuant to Section 9.11.

 

“Singapore Pledge Agreements” shall
mean (a) the Singapore Pledge Agreement, entered into by the US Borrower
and the Administrative Agent for the benefit of the Lenders to the UK Borrower
and the other Secured Parties named therein and (b) the Singapore Pledge
Agreement entered into by the US Borrower and the Administrative Agent for the
benefit of the Lenders to the US Borrower and the other Secured Parties named
therein, in each case, substantially in the form of Exhibit J-2(a) or
(b), as applicable, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Singapore Security Agreement” shall
mean the Singapore Fixed and Floating Charge entered into by the Singapore
Guarantors, certain other Restricted Subsidiaries and the Administrative Agent
for the benefit of the Lenders to the UK Borrower and the other Secured Parties
named therein, substantially in the form of Exhibit J-3, as the same may
be amended, supplemented or otherwise modified from time to time.

 

“Sold Entity or Business” shall have
the meaning provided in the definition of the term “Consolidated EBITDA”.

 

50

 

“Specified Obligations” shall mean
Obligations consisting of (a) the principal and interest on Loans and (b) reimbursement
obligations in respect of Letters of Credit.

 

“Specified Subsidiary” shall mean, at
any date of determination, (a) any Material Subsidiary or (b) any
Unrestricted Subsidiary (i) whose total assets at the last day of the Test
Period ending on the last day of the most recent fiscal period for which Section 9.1
Financials have been delivered were equal to or greater than 15% of the
Consolidated Total Assets of the US Borrower and the Subsidiaries at such date
or (ii) whose gross revenues for such Test Period were equal to or greater
than 15% of the consolidated gross revenues of the US Borrower and the
Subsidiaries for such period, in each case determined in accordance with GAAP.

 

“Stated Amount” of any Letter of
Credit shall mean, as of any date of determination, the maximum amount then
available to be drawn thereunder, determined without regard to whether any
conditions to drawing could then be met.

 

“Status” shall mean, as to the US
Borrower as of any date, the existence of Level I Status, Level II Status,
Level III Status or Level IV Status on such date.  Changes in Status resulting from changes in
the Consolidated Total Debt to Consolidated EBITDA Ratio shall become effective
(the date of such effectiveness, the “Effective Date”) as of the first
day following the last day of the most recent fiscal year or period for which (a) Section 9.1
Financials are delivered to the Lenders under Section 9.1 and (b) an
officer’s certificate is delivered by the US Borrower to the Lenders setting
forth, with respect to such Section 9.1 Financials, the then-applicable
Status, and shall remain in effect until the next change to be effected
pursuant to this definition; provided, that (i) if the US Borrower
shall have made any payments in respect of interest or commitment fees during
the period (the “Interim Period”) from and including the Effective Date
to but excluding the day any change in Status is determined as provided above,
then the amount of the next such payment due on or after such day shall be
increased or decreased by an amount equal to any underpayment or overpayment so
made by the US Borrower during such Interim Period and (ii) each
determination of the Consolidated Total Debt to Consolidated EBITDA Ratio or
the Senior Secured Debt to Consolidated EBITDA Ratio, as applicable, pursuant
to this definition shall be made with respect to the Test Period ending at the
end of the fiscal period covered by the relevant financial statements.

 

“Statutory Reserve Rate” shall mean
for any day as applied to any Eurodollar Loan, 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
that are in effect on that day (including any marginal, special, emergency or
supplemental reserves), expressed as a decimal, as prescribed by the Board and
to which the Administrative Agent is subject, 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 

 

51

 

comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Sterling” or “£” shall mean
the lawful money of the United Kingdom.

 

“Subordinated Note Indenture” shall
mean any Indenture (including the Indenture dated as of July 23, 2003,
among the US Borrower, the guarantors party thereto and The Bank of New York,
as trustee), pursuant to which the Subordinated Notes are issued, as the same
may be amended, supplemented or otherwise modified from time to time to the
extent permitted by Section 10.7(b).

 

“Subordinated Notes” shall mean (a) the
10 5/8% Senior Subordinated Notes due 2011 of the US Borrower issued pursuant
to the Subordinated Note Indenture and (b) any replacement or refinancing
thereof having terms no more materially adverse to the interests of the Lenders
than the terms thereof; provided, that any such amendment, replacement
or refinancing shall bear a rate of interest determined by the Board of
Directors of the US Borrower to be a market rate of interest at the date of
such amendment, replacement or refinancing and have other terms customary for
similar issuances under similar market conditions or otherwise be on terms
reasonably acceptable to the Administrative Agent.

 

“Subsidiary” of any Person shall mean
and include (a) any corporation more than 50% of whose stock of any class
or classes having by the terms thereof ordinary voting power to elect a
majority of the directors of such corporation (irrespective of whether or not
at the time stock of any class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and (b) any
partnership, association, joint venture or other entity in which such Person
directly or indirectly through Subsidiaries has more than a 50% equity interest
at the time.  Unless otherwise expressly
provided, all references herein to a “Subsidiary” shall mean a Subsidiary of
the US Borrower.

 

“Successor Borrower” shall have the
meaning provided in Section 10.3(a).

 

“Successor UK Borrower” shall have the
meaning provided in Section 10.3(b).

 

“Swingline Commitment” shall mean
$75,000,000.

 

“Swingline Exposure” shall mean, at
any time, the aggregate principal amount of all Swingline Loans then
outstanding.  The Swingline Exposure of
any Lender at any time shall mean the sum of (a) the aggregate principal
amount of Swingline Loans then outstanding in respect of which such Lender has
made (or is required to have made) payments to the Swingline Lender pursuant to
Section 2.1(d) and (b) such Lender’s Extended Revolving Credit
Commitment Percentage of the aggregate Swingline Exposure at such time
(excluding the portion thereof consisting of Swingline Loans in respect of
which the Lenders have made (or are required to have made) payments to the
Swingline Lender pursuant to Section 2.1(d)).

 

52

 

“Swingline Lender” shall mean CS in its
capacity as lender of Swingline Loans hereunder.

 

“Swingline Loans” shall have the
meaning provided in Section 2.1(c).

 

“Swingline Maturity Date” shall mean,
with respect to any Swingline Loan, the date that is five Business Days prior
to the Extended Revolving Credit Maturity Date.

 

“Taiwan Pledge Agreements” shall mean (a) the
Taiwan Pledge Agreement, entered into by the US Borrower and the Administrative
Agent for the benefit of the Lenders to the UK Borrower and the other Secured
Parties named therein and (b) the Taiwan Pledge Agreement entered into by
the US Borrower and the Administrative Agent for the benefit of the Lenders to
the US Borrower and the other Secured Parties named therein, in each case,
substantially in the form of Exhibit K(a) or (b), as applicable, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“Target” shall have the meaning
provided in the definition of the term “Acquisition.”

 

“Term Loan” shall mean any Tranche A-1
Term Loan, Tranche A-2 Term Loan, Tranche E Term Loan, Tranche G Term Loan,
Tranche H Term Loan or Tranche I Term Loan (or, as the context may require, any
other term loan made hereunder prior to the Restatement Date).

 

“Term Loan Commitment”
shall mean, with respect to each Lender, such Lender’s Tranche A Term Loan
Commitment, Tranche E Term Loan Commitment, Tranche G Term Loan Commitment ,
Tranche H Term Loan Commitment and Tranche I Term Loan Commitment”.

 

“Test Period” shall mean, for any
determination under this Agreement, the four consecutive fiscal quarters of the
US Borrower then last ended.

 

“Third Amendment” shall mean the Third
Amendment to this Agreement, dated as of December 13, 2005.

 

“Third Amendment Effective Date” shall
mean the date on which the Third Amendment becomes effective.

 

“Total Commitment” shall mean the sum
of the Total Term Loan Commitment, the Total Revolving Credit Commitment and
the Total Extended Revolving Credit Commitment.

 

“Total Credit Exposure” shall mean, at
any date, the sum of (a) the Total Revolving Credit Commitment at such
date, (b) the Total Extended Revolving Credit Commitment at such date, (c) the
Total Term Loan Commitment at such date and (d) the outstanding principal
amount of all Term Loans at such date.

 

53

 

“Total Extended Revolving Credit
Commitment” shall mean the sum of the Extended Revolving Credit Commitments
of all the Lenders.  The Total Extended
Revolving Credit Commitment on the Restatement Date is
$[                    ](1).

 

“Total Revolving Credit Commitment”
shall mean the sum of the Revolving Credit Commitments of all the Lenders.  The Total Revolving Credit Commitment on the
Funding Date was $250,000,000.  The Total
Revolving Credit Commitment on the Restatement Date is
[                      ](2).

 

“Total Term Loan Commitment” shall
mean the sum of the Term Loan Commitments, New Tranche H Term Loan
Commitments (if applicable), New Tranche I Term Loan Commitments (if applicable)
and the Incremental Refinancing Term Loan Commitment (if applicable) of all the
Lenders.

 

“Tranche A Loans” shall have the
meaning provided in Section 14.6(b)(ii)(B).

 

“Tranche A-1 Repayment Amount”
shall have the meaning provided in Section 2.5(b)(i).

 

“Tranche A-2 Repayment Amount”
shall have the meaning provided in Section 2.5(b)(ii).

 

“Tranche A-1 Repayment Date”
shall have the meaning provided in Section 2.5(b)(i).

 

“Tranche A-2 Repayment Date”
shall have the meaning provided in Section 2.5(b)(ii).

 

“Tranche A-1 Term Loan” shall
have the meaning provided in Section 2.1(a).

 

“Tranche A-2 Term Loan” shall
have the meaning provided in Section 2.1(a).

 

“Tranche A Term Loan Commitment” shall
mean, (a) in the case of each Lender that is a Lender on the Funding Date,
the amount set forth opposite such Lender’s name on Schedule 1.1(c) as
such Lender’s “Tranche A Term Loan Commitment” and (b) in the case of any
Lender that becomes a Lender after the Funding Date, the amount specified as
such Lender’s “Tranche A Term Loan Commitment” in the Assignment and Acceptance
pursuant to which such Lender assumed a portion of the Total Term Loan
Commitment, in each case as the same may be changed from time to time pursuant
to the terms hereof.  The aggregate
Tranche A Term Loan Commitment on the Funding Date is €209,538,177.86.  It is understood and agreed that any Lender
having a Tranche A Term 

 

(1) To be inserted upon effectiveness of
Extended Revolving Credit Commitments.

(2) To be inserted upon effectiveness of
Extended Revolving Credit Commitments.

 

54

 

Loan Commitment or holding
Tranche A-1 Term Loans or Tranche A-2 Term Loans shall have (or hold) a pro
rata share of the Tranche A Term Loan Commitment, Tranche A-1 Term Loans
and Tranche A-2 Term Loans, as the case may be.

 

“Tranche A-1 Term Loan Maturity Date”
shall mean the date that is seven years after the Funding Date, or, if such
date is not a Business Day, the next preceding Business Day; provided, however,
that the Tranche A-1 Term Loan Maturity Date will automatically become the
Refinancing Date in the event that on or prior to the Refinancing Date either (a) the
Subordinated Notes shall not have been extended, renewed, replaced or otherwise
refinanced in full in accordance with the terms hereof by Indebtedness which
shall have a final maturity no earlier than (and which shall not require any
mandatory payments of principal in excess of $75,000,000 (except pursuant to
asset sale or change of control provisions that are no more materially adverse
to the interests of the Lenders than those relating to the Subordinated Notes
as in effect on the date hereof) any earlier than) the date that is 182 days
following the date that is seven years after the Funding Date or (b) legal
defeasance or similar arrangements reasonably satisfactory to the
Administrative Agent shall not have been made for the repayment or redemption
of the Subordinated Notes in full.

 

“Tranche A-2 Term Loan Maturity Date”
shall mean the date that is seven years after the Funding Date, or, if such
date is not a Business Day, the next preceding Business Day; provided, however,
that the Tranche A-2 Term Loan Maturity Date will automatically become the
Refinancing Date in the event that on or prior to the Refinancing Date either (a) the
Subordinated Notes shall not have been extended, renewed, replaced or otherwise
refinanced in full in accordance with the terms hereof by Indebtedness which
shall have a final maturity no earlier than (and which shall not require any
mandatory payments of principal in excess of $75,000,000 (except pursuant to
asset sale or change of control provisions that are no more materially adverse
to the interests of the Lenders than those relating to the Subordinated Notes
as in effect on the date hereof) any earlier than) the date that is 182 days
following the date that is seven years after the Funding Date or (b) legal
defeasance or similar arrangements reasonably satisfactory to the
Administrative Agent shall not have been made for the repayment or redemption
of the Subordinated Notes in full.

 

“Tranche C Term Loan Lender” shall
mean each Lender with a Tranche C Term Loan Commitment or with outstanding
Tranche C Term Loans.

 

“Tranche D Term Loan Lender” shall
mean each Lender with a Tranche D Term Loan Commitment or with outstanding Tranche
D Term Loans.

 

“Tranche E Repayment Amount”
shall have the meaning provided in Section 2.5(b)(iii).

 

“Tranche E Repayment Date” shall
have the meaning provided in Section 2.5(b)(iii).

 

55

 

“Tranche E Term Loan” shall mean
a Loan made to the US Borrower in Dollars on the Third Amendment Effective Date
pursuant to Section 3 of the Third Amendment.  On the Third Amendment Effective Date, the
aggregate principal amount of the Tranche E Term Loans shall be $1,139,275,000.00.  On the Restatement Date, the aggregate
principal amount of the Tranche E Term Loans shall be $142,041,093.39.

 

“Tranche E Term Loan Commitment” shall
mean, with respect to each Lender, the commitment of such Lender to make
Tranche E Term Loans hereunder pursuant to Section 3 of the Third
Amendment on the Third Amendment Effective Date.  The amount of each Lender’s Tranche E Term
Loan Commitment is set forth on Schedule A to the Third Amendment (as appended
to the Third Amendment on the Third Amendment Effective Date) or in the
Assignment and Acceptance pursuant to which such Lender assumed its Tranche E
Term Loan Commitment, in each case as the same may be changed from time to time
pursuant to the terms hereof.

 

“Tranche E Term Loan Lender” shall
mean each Lender with a Tranche E Term Loan Commitment or with outstanding
Tranche E Term Loans.

 

“Tranche E Term Loan Maturity Date”
shall mean the date that is eight years after the Funding Date, or, if such
date is not a Business Day, the next preceding Business Day; provided, however,
that the Tranche E Term Loan Maturity Date will automatically become the
Refinancing Date in the event that on or prior to the Refinancing Date either (a) the
Subordinated Notes shall not have been extended, renewed, replaced or otherwise
refinanced in full in accordance with the terms hereof by Indebtedness which
shall have a final maturity no earlier than (and which shall not require any
mandatory payments of principal in excess of $75,000,000 (except pursuant to asset
sale or change of control provisions that are no more materially adverse to the
interests of the Lenders than those relating to the Subordinated Notes as in
effect on the date hereof) any earlier than) the date that is 182 days
following the date that is eight years after the Funding Date or (b) legal
defeasance or similar arrangements reasonably satisfactory to the
Administrative Agent shall not have been made for the repayment or redemption
of the Subordinated Notes in full.

 

“Tranche F Term Loan Lender” shall
mean each Lender with a Tranche F Term Loan Commitment or with outstanding
Tranche F Term Loans.

 

“Tranche G Repayment Amount”
shall have the meaning provided in Section 2.5(b)(iv).

 

“Tranche G Repayment Date” shall
have the meaning provided in Section 2.5(b)(iv).

 

“Tranche G Term Loan” shall mean
a Loan made to the US Borrower in Euro on the Fourth Amendment Effective Date
pursuant to Section 3 of the Fourth Amendment.  On the Fourth Amendment Effective Date, the
aggregate principal amount of the Tranche G Term Loans shall be
€269,314,259.17. On the Restatement Date, the aggregate principal amount of the
Tranche G Term Loans shall be €65,435,999.09.

 

56

 

“Tranche G Term Loan
Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Tranche G Term Loans hereunder pursuant to Section 3 of the
Fourth Amendment on the Fourth Amendment Effective Date.  The amount of each Lender’s Tranche G Term
Loan Commitment is set forth on Schedule A to the Fourth Amendment (as appended
to the Fourth Amendment on the Fourth Amendment Effective Date) or in the
Assignment and Acceptance pursuant to which such Lender assumed its Tranche G
Term Loan Commitment, in each case as the same may be changed from time to time
pursuant to the terms hereof.

 

“Tranche G Term Loan Lender”
shall mean each Lender with a Tranche G Term Loan Commitment or with
outstanding Tranche G Term Loans.

 

“Tranche G Term Loan
Maturity Date” shall mean the date that is eight years after the Funding
Date, or, if such date is not a Business Day, the next preceding Business Day; provided,
however, that the Tranche G Term Loan Maturity Date will automatically
become the Refinancing Date in the event that on or prior to the Refinancing
Date either (a) the Subordinated Notes shall not have been extended,
renewed, replaced or otherwise refinanced in full in accordance with the terms
hereof by Indebtedness which shall have a final maturity no earlier than (and
which shall not require any mandatory payments of principal in excess of
$75,000,000 (except pursuant to asset sale or change of control provisions that
are no more materially adverse to the interests of the Lenders than those relating
to the Subordinated Notes as in effect on the date hereof) any earlier than)
the date that is 182 days following the date that is eight years after the
Funding Date or (b) legal defeasance or similar arrangements reasonably
satisfactory to the Administrative Agent shall not have been made for the
repayment or redemption of the Subordinated Notes in full.

 

“Tranche H Repayment Amount”
shall have the meaning provided in Section 2.5(b)(v).

 

“Tranche H Repayment Date”
shall have the meaning provided in Section 2.5(b)(v).

 

“Tranche H Term Loan”
shall mean a Loan made to the US Borrower in Dollars on the Restatement Date
pursuant to Section 3 of the Amendment Agreement.  On the Restatement Date, the aggregate
principal amount of the Tranche H Term Loans shall be $939,983,906.61.

 

“Tranche H Term Loan
Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Tranche H Term Loans hereunder pursuant to Section 3 of the
Amendment Agreement on the Restatement Date. 
The amount of each Lender’s Tranche H Term Loan Commitment is set forth
on Schedule A to the Amendment Agreement (as appended to the Amendment
Agreement on the Restatement Date) or in the Assignment and Acceptance pursuant
to which such Lender assumed its Tranche H Term Loan Commitment, in each case
as the same may be changed from time to time pursuant to the terms hereof.

 

57

 

“Tranche H Term Loan Lender”
shall mean each Lender with a Tranche H Term Loan Commitment or with
outstanding Tranche H Term Loans.

 

“Tranche H Term Loan
Maturity Date” shall mean May 15, 2014, or, if such date is not a
Business Day, the next preceding Business Day.

 

“Tranche I Repayment Amount”
shall have the meaning provided in Section 2.5(b)(vi).

 

“Tranche I Repayment Date”
shall have the meaning provided in Section 2.5(b)(vi).

 

“Tranche I Term Loan”
shall mean a Loan made to the US Borrower in Euro on the Restatement Date
pursuant to Section 4 of the Amendment Agreement.  On the Restatement Date, the aggregate
principal amount of the Tranche I Term Loans shall be €195,633,946.04.

 

“Tranche I Term Loan
Commitment” shall mean, with respect to each Lender, the commitment of such
Lender to make Tranche I Term Loans hereunder pursuant to Section 4 of the
Amendment Agreement on the Restatement Date. 
The amount of each Lender’s Tranche I Term Loan Commitment is set forth
on Schedule B to the Amendment Agreement (as appended to the Amendment
Agreement on the Restatement Date) or in the Assignment and Acceptance pursuant
to which such Lender assumed its Tranche I Term Loan Commitment, in each case
as the same may be changed from time to time pursuant to the terms hereof.

 

“Tranche I Term Loan Lender”
shall mean each Lender with a Tranche I Term Loan Commitment or with
outstanding Tranche I Term Loans.

 

“Tranche I Term Loan
Maturity Date” shall mean May 15, 2014, or, if such date is not a
Business Day, the next preceding Business Day.

 

“Transactions” shall
mean, collectively, (a) the execution, delivery and performance by the
Credit Parties of the Credit Documents, the Senior Subordinated Loan Agreement
and the Senior Subordinated Notes Indenture, in each case, to the extent they
are a party thereto, (b) the Borrowings hereunder, the borrowings under
the Senior Subordinated Loan Agreement, the issuance of the Senior Subordinated
Notes, the issuance of Letters of Credit and the use of proceeds of each of the
foregoing, (c) the granting of Liens pursuant to the Security Documents, (d) the
Acquisition, (e) the refinancing of the 2003 Credit Agreement and of
certain existing Indebtedness of the Target and (f) any other transaction
related to or entered into in connection with any of the foregoing.

 

“Transaction Expenses”
shall mean any fees or expenses incurred or paid by Parent or any of its
Subsidiaries in connection with the Transactions.

 

“Transferee” shall have
the meaning provided in Section 14.6(e).

 

58

 

“Treaty on European Union”
shall mean the Treaty of Rome of March 25, 1957, as amended by the Single
European Act 1986 and the Maastricht Treaty (which was signed in Maastricht on February 7,
1992 and came into force on November 1, 1993).

 

“Treaty Lender” shall
mean a Person who, by virtue of a double taxation agreement between the United
Kingdom and the country of residence of that Person, is (subject only to a
prior direction given to the UK Borrower by the United Kingdom Inland Revenue
following an application by that Person) eligible to receive payments from the
UK Borrower under this Agreement, (a) in the case of an original Lender
under this Agreement, without any deduction in respect of taxes or (b) in
the case of a Transferee, subject to a deduction in respect of taxes to an
extent no greater than that which applied to the original Lender from which the
Transferee acquired its Commitments.

 

“2003 Credit Agreement”
shall mean the Amended and Restated Credit Agreement dated as of December 8,
2003 among the US Borrower, the UK Borrower, Holdings, PIK Holdco, Parent, the
Lenders party thereto and JPMorgan Chase Bank, as administrative agent.

 

“2011 Senior Notes”
shall mean (a) the $70,000,000 initial aggregate principal amount
($112,341,229 aggregate principal amount at maturity) of 12% Senior Discount
Notes due 2011 of Holdings issued pursuant to the 2011 Senior Notes Indenture
and (b) any replacement or refinancing thereof having terms no more
materially adverse to the interests of the Lenders than the terms thereof.

 

“2011 Senior Notes Indenture”
shall mean any Indenture (including the Indenture dated as of July 23,
2003) issued by Holdings, pursuant to which the 2011 Senior Notes are issued,
as the same may be amended, supplemented or otherwise modified from time to
time to the extent permitted by Section 10.7(b).

 

“Type” shall mean (a) as
to any Tranche A-1 Term Loan, Tranche A-2 Term Loan, Tranche G Term Loan or
Tranche I Term Loan, its nature as a Eurodollar Term Loan, (b) as to any
Tranche E Term Loan or Tranche H Term Loans, its nature as an ABR Loan or a Eurodollar
Term Loan, (c) as to any Dollar Revolving Credit Loan or Dollar Extended
Revolving Credit Loan, its nature as an ABR Loan, a Eurodollar Revolving Credit
Loan or a Eurodollar Extended Revolving Credit Loan and (d) as to any
Foreign Currency Revolving Credit Loan or Foreign Currency Extended Revolving
Credit Loan, its nature as a Eurodollar Revolving Credit Loan or a Eurodollar
Extended Revolving Credit Loan.

 

“Unfunded Current Liability”
of any Plan shall mean the amount, if any, by which the present value of the
accrued benefits under the Plan as of the close of its most recent plan year,
determined in accordance with Statement of Financial Accounting Standards No. 87
as in effect on the Funding Date, based upon the actuarial assumptions that
would be used by the Plan’s actuary in a termination of the Plan, exceeds the
fair market value of the assets allocable thereto.

 

59

 

“UK Borrower” shall have
the meaning provided in the preamble to this Agreement.

 

“UK Borrower Debt Escrow
Account” shall mean Euro Account Number 8371059780 established by the
Financing Escrow Agent, to be administered pursuant to the terms of the
Financing Escrow Agreement.

 

“UK
Debenture” shall mean the Debenture entered into by the UK Borrower, the UK
Guarantors and the Administrative Agent for the benefit of the Lenders to the
UK Borrower and the other Secured Parties named therein, substantially in the
form of Exhibit L-1, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“UK Guarantee” shall
mean the UK Guarantee Agreement, made by the US Borrower and each of the UK
Guarantors in favor of the Administrative Agent for the benefit of the Lenders
to the UK Borrower and the other Secured Parties named therein, substantially
in the form of Exhibit L-2, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“UK Guarantors” shall
mean (a) each Subsidiary of the US Borrower (other than the UK Borrower
and any Unrestricted Subsidiary) on the Funding Date that is a member of the
Rockwood Group and that is incorporated under the laws of England and Wales and
(b) each Subsidiary of the US Borrower that is incorporated under the laws
of England and Wales and that becomes a party to the UK Guarantee after the
Funding Date pursuant to Section 9.11.

 

“UK Lender” shall mean a
Person who is (a) a company resident in the United Kingdom for tax
purposes, (b) a partnership each of whose members is a company so resident
or (c) a company not so resident in the United Kingdom for tax purposes,
but which carries on a trade in the United Kingdom through a branch or agency
and is subject to corporation tax on interest paid to it under this Agreement.

 

“UK Pledge Agreements”
shall mean (a) the Charge Over Shares, entered into by the US Borrower and
the Administrative Agent for the benefit of the Lenders to the UK Borrower and
the other Secured Parties named therein and (b) the Charge Over Shares,
entered into by the US Borrower and the Administrative Agent for the benefit of
the Lenders to the US Borrower and the other Secured Parties named therein, in
each case substantially in the form of Exhibit L-3(a) or (b), as
applicable, as the same may be amended, supplemented or otherwise modified from
time to time.

 

“Unpaid Drawing” shall
have the meaning provided in Section 3.4(a).

 

“Unrestricted Subsidiary”
shall mean (a) any Subsidiary of the US Borrower that is formed or
acquired after the Closing Date (other than a Subsidiary that becomes or is
required to become a Credit Party hereunder); provided, that at such
time (or promptly thereafter) the US Borrower designates such Subsidiary an
Unrestricted Subsidiary in a written notice to the Administrative Agent, (b) any
Restricted Subsidiary (other than a Restricted Subsidiary that is or becomes a
Credit Party) subsequently re-

 

60

 

designated as
an Unrestricted Subsidiary by the US Borrower in a written notice to the
Administrative Agent; provided, that (x) such re-designation shall
be deemed to be an investment on the date of such re-designation in an
Unrestricted Subsidiary in an amount equal to the sum of (i) the net worth
of such re-designated Restricted Subsidiary immediately prior to such
re-designation (such net worth to be calculated without regard to any guarantee
provided by such re-designated Restricted Subsidiary) and (ii) the
aggregate principal amount of any Indebtedness owed by such re-designated
Restricted Subsidiary to the US Borrower or any other Restricted Subsidiary
immediately prior to such re-designation, all calculated, except as set forth
in the parenthetical to clause (i), on a consolidated basis in accordance with
GAAP and (y) no Default or Event of Default would result from such
re-designation and (c) each Subsidiary of an Unrestricted Subsidiary; provided,
however, that at the time of any written re-designation by the US
Borrower to the Administrative Agent that any Unrestricted Subsidiary shall no
longer constitute an Unrestricted Subsidiary, such Unrestricted Subsidiary
shall cease to be an Unrestricted Subsidiary to the extent no Default or Event
of Default would result from such re-designation.  On or promptly after the date of its
formation, acquisition or re-designation, as applicable, each Unrestricted
Subsidiary (other than an Unrestricted Subsidiary that is a Foreign Subsidiary)
shall have entered into a tax sharing agreement containing terms that, in the
reasonable judgment of the Administrative Agent, provide for an appropriate allocation
of tax liabilities and benefits.

 

“US Borrower” shall have
the meaning provided in the preamble to this Agreement.

 

“US Subsidiary Guarantors”
shall mean (a) each Domestic Subsidiary (other than an Unrestricted
Subsidiary) on the Funding Date and (b) each Domestic Subsidiary that
becomes a party to the Guarantee after the Funding Date pursuant to Section 9.11.

 

“Voting Stock” shall
mean, with respect to any Person, shares of such Person’s capital stock having
the right to vote for the election of directors of such Person under ordinary
circumstances.

 

“Yield Differential”
shall have the meaning given to that term in Section 2.15.

 

(b)  The words “hereof,” “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section references are to Sections of this Agreement unless
otherwise specified.  The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.

 

1.2.          Exchange Rates.  (a)   
Not later than 1:00 p.m. (New York time) on each Calculation
Date, the Administrative Agent shall (i) determine the Exchange Rate as of
such Calculation Date with respect to each Foreign Currency to be used for
calculating the Dollar Equivalent and (ii) give notice thereof to the
Lenders and the US Borrower (on behalf of itself and the UK Borrower).  The Exchange Rates so determined

 

61

 

shall become effective on the relevant Calculation Date (a “Recalculation
Date”), shall remain effective until the next succeeding Recalculation
Date, and shall for all purposes of this Agreement (other than any provision
expressly requiring the use of a current Exchange Rate) be the Exchange Rates
employed in converting any amounts between Dollars and Foreign Currencies.

 

(b)  Not later than 5:00 p.m.
(New York time) on each Recalculation Date and each date on which Foreign
Currency Revolving Credit Loans or Foreign Currency Extended Revolving Credit
Loans are made, the Administrative Agent shall (i) determine the aggregate
amount of the Dollar Equivalents of (A) the principal amounts of the
Foreign Currency Revolving Credit Loans then outstanding (after giving effect
to any Foreign Currency Revolving Credit Loans or Foreign Currency Extended
Revolving Credit Loans, as applicable, made or repaid on such date), (B) the
face value of outstanding Foreign Currency Letters of Credit and (C) Unpaid
Drawings in respect of Foreign Currency Letters of Credit and (ii) notify
the Lenders and the US Borrower (on behalf of itself and the UK Borrower) of
the results of such determination.

 

(c)  For purposes of
determining compliance under Sections 10.4, 10.5, 10.6, 10.9, 10.10 and
10.11 with respect to any amount in a Foreign Currency, such amount shall be
deemed to equal the Dollar Equivalent thereof based on the average daily
Exchange Rate for such Foreign Currency for the most recent twelve-month period
immediately prior to the date of determination determined in a manner
consistent with that used in calculating Consolidated EBITDA for the related
period.  For purposes of determining
compliance with Sections 10.1 and 10.2, with respect to any amount of
Indebtedness in a Foreign Currency, compliance will be determined at the time
of incurrence thereof using the Dollar Equivalent thereof at the Exchange Rate
in effect at the time of such incurrence.

 

1.3.          Redenomination of Certain Foreign
Currencies.  (a)    Each obligation of any party to this
Agreement to make a payment denominated in Sterling on or after the date the
United Kingdom adopts the Euro as its lawful currency after the Funding Date
shall be redenominated into Euro at the time of such adoption (in accordance
with the EMU Legislation).  If, in
relation to Sterling, the basis of accrual of interest expressed in this
Agreement in respect of that currency shall be inconsistent with any convention
or practice in the London Interbank Market for the basis of accrual of interest
in respect of the Euro, such expressed basis shall be replaced by such
convention or practice with effect from the date on which the United Kingdom
adopts the Euro as its lawful currency; provided, that if any Foreign
Currency Borrowing in Sterling is outstanding immediately prior to such date,
such replacement shall take effect, with respect to such Foreign Currency
Borrowing, at the end of the then current Interest Period.

 

(b)  Each provision of
this Agreement shall be subject to such reasonable changes of construction as
the Administrative Agent, in consultation with the US Borrower and the
UK Borrower, may from time to time specify to be appropriate to reflect
the adoption of the Euro by the United Kingdom and any relevant market
conventions or practices relating to the Euro.

 

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SECTION 2.           Amount and Terms of Credit

 

2.1.          Commitments.  (a)   
Subject to and upon the terms and conditions herein set forth,

 

(i)  each Lender having a
Tranche A Term Loan Commitment severally agrees to make a loan or loans (each a
“Tranche A-1 Term Loan” and, collectively, the “Tranche A-1 Term
Loans”) to the US Borrower on the Funding Date in Euro, which Tranche A-1
Term Loans shall not exceed for any such Lender such Lender’s pro  rata
share of all Tranche A-1 Term Loans to be made on the Funding Date (based on
the percentage which such Lender’s Tranche A Term Loan Commitment represents of
the aggregate Tranche A Term Loan Commitments of all Lenders); provided,
that the aggregate principal amount of all Tranche A-1 Term Loans made on the
Funding Date shall not exceed €39,129,762.71;

 

(ii)  each Lender having a
Tranche A Term Loan Commitment severally agrees to make a loan or loans (each a
“Tranche A-2 Term Loan” and, collectively, the “Tranche A-2 Term
Loans”) to the UK Borrower on the Funding Date in Euro, which Tranche A-2
Term Loans shall not exceed for any such Lender such Lender’s pro  rata
share of all Tranche A-2 Term Loans to be made on the Funding Date (based on
the percentage which such Lender’s Tranche A Term Loan Commitment represents of
the aggregate Tranche A Term Loan Commitments of all Lenders); provided,
that the aggregate principal amount of all Tranche A-2 Term Loans made on the
Funding Date shall not exceed €128,500,779.57;

 

(iii)  each Lender having
a Tranche A Term Loan Commitment severally agrees to make a loan or loans on a
single date on or prior to September 30, 2004 to the US Borrower and/or
the UK Borrower, as directed by the US Borrower in a Notice of Borrowing
delivered in accordance with Section 2.3, the amount of which loans shall
not exceed for any such Lender such Lender’s pro  rata share of
all such loans to be made on the applicable date of borrowing (based on the
percentage which such Lender’s Tranche A Term Loan Commitment represents of the
aggregate Tranche A Term Loan Commitments of all Lenders); provided,
that the aggregate principal amount of all such loans made on the date of such
borrowing shall not exceed €41,907,635.58. 
The portion of such loans, if any, made on the date of such borrowing to
the US Borrower shall be “Tranche A-1 Term Loans” and the portion of such
loans, if any, made on the date of such borrowing to the UK Borrower shall be “Tranche
A-2 Term Loans” for all purposes under this Agreement.  In the event that the US Borrower shall not
deliver a Notice of Borrowing with respect to such loans on or prior to September 30,
2004 in accordance with Section 2.3, the US Borrower shall be deemed to
have requested on behalf of itself a Tranche A-1 Term Loan in the amount of €41,907,635.58
(and such Tranche A-1 Term Loan shall be funded on September 30, 2004 as
stated above), unless the US Borrower shall give the Administrative Agent at
the Administrative Agent’s Office written notice (or telephonic notice promptly
confirmed in writing) prior to 12:00 Noon (Local Time) at least three Business
Days prior to September 30, 2004 that no such loans are to be made to the
US Borrower or the UK Borrower;

 

63

 

(iv)  each Lender having a
Tranche E Term Loan Commitment severally agrees, pursuant to the Third
Amendment, to make a Tranche E Term Loan or Tranche E Term Loans on the Third
Amendment Effective Date to the US Borrower in Dollars, which Tranche E Term
Loans shall not exceed for any such Lender the Tranche E Term Loan Commitment
of such Lender as of the Third Amendment Effective Date; provided, that
each Continuing Tranche D Term Loan Lender having a Tranche E Term Loan
Commitment shall make Tranche E Term Loans on the Third Amendment Effective
Date by exchanging its existing term loans designated as “Tranche D Term Loans”
under the Credit Agreement immediately prior to the Third Amendment Effective
Date for Tranche E Term Loans in the manner contemplated by Section 3 of
the Third Amendment;

 

(v)  each Lender having a
Tranche G Term Loan Commitment severally agrees, pursuant to, and in accordance
with, the Fourth Amendment, to make a Tranche G Term Loan or Tranche G Term
Loans on the Fourth Amendment Effective Date to the US Borrower in Euro, which
Tranche G Term Loans shall not exceed for any such Lender the Tranche G Term
Loan Commitment of such Lender as of the Fourth Amendment Effective Date, provided
that each Continuing Tranche F Term Loan Lender having a Tranche G Term Loan
Commitment shall make Tranche G Term Loans on the Fourth Amendment Effective
Date by exchanging its existing term loans designated as “Tranche F Term Loans”
under the Credit Agreement immediately prior to the Fourth Amendment Effective
Date for Tranche G Term Loans in the manner contemplated by Section 3 of
the Fourth Amendment;

 

(vi)  each Lender having a
Tranche H Term Loan Commitment severally agrees, pursuant to the Amendment
Agreement, to be deemed to have made a Tranche H Term Loan or Tranche H Term
Loans on the Restatement Date to the US Borrower in Dollars, which Tranche H
Term Loans shall not exceed for any such Lender the Tranche H Term Loan
Commitment of such Lender as of the Restatement Date, by converting its
existing term loans designated as “Tranche E Term Loans” under the Existing
Credit Agreement immediately prior to the Restatement Date for Tranche H Term
Loans in the manner contemplated by Section 3 of the Amendment Agreement;
and

 

(vii)  each Lender having
a Tranche I Term Loan Commitment severally agrees, pursuant to the Amendment
Agreement, to be deemed to have made a Tranche I Term Loan or Tranche I Term
Loans on the Restatement Date to the US Borrower in Euro, which Tranche I Term
Loans shall not exceed for any such Lender the Tranche I Term Loan Commitment
of such Lender as of the Restatement Date, by converting its existing term
loans designated as “Tranche G Term Loans” under the Existing Credit Agreement
immediately prior to the Restatement Date for Tranche I Term Loans in the
manner contemplated by Section 4 of the Amendment Agreement.

 

Such Term Loans shall be made
on the Funding Date (except as provided in clause (iii), clause (iv), clause
(v), clause (vi) or clause (vii) above).  On the Restatement Date, the US Borrower
shall pay all amounts owing under Section 2.11 as a result of the
repayment or conversion of Tranche E Term Loans and Tranche G Term Loans as
required above in this Section 2.1(a). 
Such Term Loans (i) may, in respect of

 

64

 

Tranche E Term
Loans or Tranche H Term Loans and at the option of the US Borrower, be incurred
and maintained as, and/or converted into, ABR Loans or Eurodollar Term Loans, provided
that all such Term Loans made by each of the Lenders pursuant to the same
Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Term Loans of the same Type, (ii) shall, in respect of Tranche
A-1 Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans and Tranche I Term
Loans, be incurred and maintained as Eurodollar Term Loans, (iii) may be
repaid or prepaid in accordance with the provisions hereof, but once repaid or
prepaid, may not be reborrowed and (iv) shall not exceed in the aggregate
the total of all Tranche A Term Loan Commitments, Tranche E Term Loan
Commitments, Tranche G Term Loan Commitments, Tranche H Term Loan Commitments
or Tranche I Term Loan Commitments, as applicable.  On the Tranche A-1 Term Loan Maturity Date,
all Tranche A-1 Term Loans shall be repaid in full.  On the Tranche A-2 Term Loan Maturity Date,
all Tranche A-2 Term Loans shall be repaid in full.  On the Tranche E Term Loan Maturity Date, all
Tranche E Term Loans shall be repaid in full. 
On the Tranche G Term Loan Maturity Date, all Tranche G Term Loans shall
be repaid in full.  On the Tranche H Term
Loan Maturity Date, all Tranche H Term Loans shall be repaid in full.  On the Tranche I Term Loan Maturity Date, all
Tranche I Term Loans shall be repaid in full.

 

(b)  (i)  Subject to
and upon the terms and conditions herein set forth, each Lender having a
Revolving Credit Commitment severally agrees to make a loan or loans
denominated in Dollars (each a “Dollar Revolving Credit Loan” and,
collectively, the “Dollar Revolving Credit Loans” and, together with the
Foreign Currency Revolving Credit Loans, the “Revolving Credit Loans”)
and each Lender having an Extended Revolving Credit Commitment severally agrees
to make a loan or loans denominated in Dollars (each a “Dollar Extended
Revolving Credit Loan” and, collectively, the “Dollar Extended Revolving
Credit Loans” and, together with the Foreign Currency Extended Revolving
Credit Loans, the “Extended Revolving Credit Loans”) to the US Borrower
or the UK Borrower, as the case may be, which Dollar Revolving Credit Loans or
Dollar Extended Revolving Credit Loans (A) shall be made at any time and
from time to time on and after the Funding Date and prior to the Revolving
Credit Maturity Date or the Extended Revolving Credit Maturity Date, as
applicable, (B) may, at the option of the US Borrower or the UK Borrower,
as the case may be, be incurred and maintained as, and/or converted into, ABR
Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving
Credit Loans; provided, that all Dollar Revolving Credit Loans and all Dollar
Extended Revolving Credit Loans made by each of the Lenders pursuant to the
same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Dollar Revolving Credit Loans or Dollar Extended Revolving Credit
Loans of the same Type, (C) may be repaid and reborrowed in accordance
with the provisions hereof, (D) shall not, for any such Lender at any
time, after giving effect thereto and to the application of the proceeds
thereof, result in such Lender’s Revolving Credit Exposure or Extended
Revolving Credit Exposure, as applicable, at such time exceeding such Lender’s
Revolving Credit Commitment or Extended Revolving Credit Commitment, as
applicable, at such time and (E) shall not, after giving effect thereto
and to the application of the proceeds thereof, result at any time in the
aggregate amount of the Lenders’ Revolving Credit Exposures or Extended
Revolving Credit Exposures, as applicable, at such time exceeding the Total
Revolving Credit Commitment or the Total Extended

 

65

 

Revolving Credit Commitment, as applicable,
then in effect; provided  further, that (x) as of the
Restatement Date there shall be no Dollar Revolving Credit Loans outstanding
and (y) from and after the Restatement Date, no Dollar Revolving
Credit Loans may be requested of or made by any Lender having a Revolving
Credit Commitment until the Extended Revolving Credit Exposures shall be equal
to no less than the Total Extended Revolving Credit Commitment; provided,
however, that if, at such time that the Extended Revolving Credit
Exposure equals or exceeds the Total Extended Revolving Credit Commitment, the
US Borrower or the UK Borrower requests a Dollar Letter of Credit otherwise
permitted in accordance with Section 3, a portion of the outstanding
Dollar Extended Revolving Credit Loans shall be automatically deemed to be
refinanced and replaced by Revolving Credit Loans under the Revolving Credit
Commitment in an amount sufficient to allow such Letter of Credit to be issued
at such time under the Extended Revolving Credit Commitments so long as such
refinancing shall not result in any Lender’s Revolving Credit Exposure
exceeding such Lender’s Revolving Credit Commitment.

 

(ii)  Subject to and upon
the terms and conditions herein set forth, each Lender having a Revolving
Credit Commitment severally agrees to make a loan or loans denominated in a
Foreign Currency (each a “Foreign Currency Revolving Credit Loan” and,
collectively, the “Foreign Currency Revolving Credit Loans”) or an
Extended Revolving Credit Commitment severally agrees to make a loan or loans
denominated in a Foreign Currency (each a “Foreign Currency Extended
Revolving Credit Loan” and, collectively, the “Foreign Currency Extended
Revolving Credit Loans”) to the US Borrower or the UK Borrower, as the case
may be, which Foreign Currency Revolving Credit Loans or Foreign Currency
Extended Revolving Credit Loans (A) shall be made at any time and from
time to time on and after the Funding Date and prior to the Revolving Credit
Maturity Date or the Extended Revolving Credit Maturity Date, as applicable, (B) shall
be incurred and maintained entirely as Eurodollar Foreign Currency Revolving
Credit Loans or Eurodollar Foreign Currency Extended Revolving Credit Loans, (C) may
be repaid and reborrowed in accordance with the provisions hereof, (D) shall
not, for any such Lender at any time, after giving effect thereto and to the
application of the proceeds thereof, result in such Lender’s Revolving Credit
Exposure or Extended Revolving Credit Exposure, as applicable, at such time
exceeding such Lender’s Revolving Credit Commitment or Extended Revolving
Credit Commitment, as applicable, at such time and (E) shall not, after
giving effect thereto and to the application of the proceeds thereof, result at
any time in the aggregate amount of the Lenders’ Revolving Credit Exposures or
Extended Revolving Credit Exposures, as applicable, at such time exceeding the
Total Revolving Credit Commitment or the Total Extended Revolving Credit
Commitment, as applicable, then in effect; provided
further, that (x) as of the Restatement Date there shall be no Foreign
Currency Revolving Credit Loans outstanding and (y) from and after the
Restatement Date, no Foreign Currency Revolving Credit Loans may be
requested of or made by any Lender having a Revolving Credit Commitment until
the Extended Revolving Credit Exposures shall be equal to no less then than the
Total Extended Revolving Credit Commitment; provided, however,
that if, at such time that the Extended Revolving Credit Exposure equals or
exceeds the Total Extended Revolving Credit Commitment, the US Borrower or the
UK Borrower requests a Foreign Currency Letter of Credit otherwise permitted in
accordance with Section 3, a portion of the outstanding

 

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Foreign Currency Extended Revolving Credit
Loans shall be automatically deemed to be refinanced and replaced by Revolving
Credit Loans under the Revolving Credit Commitment in an amount sufficient to
allow such Letter of Credit to be issued at such time under the Extended
Revolving Credit Commitments so long as such refinancing shall not result in
any Lender’s Revolving Credit Exposure exceeding such Lender’s Revolving Credit
Commitment.

 

(iii)  Each Lender may at
its option make any Eurodollar Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided, that (A) any
exercise of such option shall not affect the obligation of the US Borrower or
the UK Borrower as the case may be, to repay such Loan and (B) in
exercising such option, such Lender shall use its reasonable efforts to
minimize any increased costs to the US Borrower or the UK Borrower as the case
may be, resulting therefrom (which obligation of the Lender shall not require
it to take, or refrain from taking, actions that it determines would result in
increased costs for which it will not be compensated hereunder or that it
determines would be otherwise disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 3.5 shall apply). 
On the Revolving Credit Maturity Date, all Revolving Credit Loans shall
be repaid in full.  On the Extended
Revolving Credit Maturity Date, all Extended Revolving Credit Loans shall be
repaid in full.

 

(c)  Subject to and upon
the terms and conditions herein set forth, the Swingline Lender in its
individual capacity agrees, at any time and from time to time on and after the
Funding Date and prior to the Swingline Maturity Date, to make a loan or loans
(each a “Swingline Loan” and, collectively, the “Swingline Loans”)
to the US Borrower in Dollars, which Swingline Loans (i) shall be ABR
Loans, (ii) shall have the benefit of the provisions of Section 2.1(d),
(iii) shall not exceed at any time outstanding the Swingline Commitment, (iv) shall
not, after giving effect thereto and to the application of the proceeds
thereof, result at any time in the aggregate amount of the Extended Revolving
Credit Exposures at such time exceeding the Total Extended Revolving Credit
Commitment then in effect and (v) may be repaid and reborrowed in
accordance with the provisions hereof. 
On the Swingline Maturity Date, each outstanding Swingline Loan shall be
repaid in full.  The Swingline Lender
shall not make any Swingline Loan after receiving a written notice from the US
Borrower, the UK Borrower or any Lender stating that a Default or Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice of (i) rescission of all such notices from
the party or parties originally delivering such notice or (ii) the waiver
of such Default or Event of Default in accordance with the provisions of Section 14.1.

 

(d)  On any Business Day,
the Swingline Lender may, in its sole discretion, give notice to the Lenders
that all then-outstanding Swingline Loans shall be funded with a Borrowing of
Extended Revolving Credit Loans, in which case Extended Revolving Credit Loans constituting
ABR Loans (each such Borrowing, a “Mandatory Borrowing”) shall be made
on the immediately succeeding Business Day by all Lenders pro  rata
based on each Lender’s Extended Revolving Credit Commitment Percentage, as
applicable, and the proceeds thereof shall be applied directly to the Swingline
Lender to

 

67

 

repay the Swingline Lender for such
outstanding Swingline Loans.  Each Lender
hereby irrevocably agrees to make such Extended Revolving Credit Loans upon one
Business Day’s notice pursuant to each Mandatory Borrowing in the amount and in
the manner specified in the preceding sentence and on the date specified to it
in writing by the Swingline Lender notwithstanding (i) that the amount of
the Mandatory Borrowing may not comply with the minimum amount for each
Borrowing specified in Section 2.2, (ii) whether any conditions
specified in Section 7 are then satisfied, (iii) whether a Default or
an Event of Default has occurred and is continuing, (iv) the date of such
Mandatory Borrowing or (v) any reduction in the Total Commitment after any
such Swingline Loans were made.  In the
event that, in the sole judgment of the Swingline Lender, any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including as a result of the commencement of a proceeding under the Bankruptcy
Code in respect of the Borrower), each Lender hereby agrees that it shall
forthwith purchase from the Swingline Lender (without recourse or warranty) such
participation of the outstanding Swingline Loans as shall be necessary to cause
the Lenders to share in such Swingline Loans ratably based upon their
respective Extended Revolving Credit Commitment Percentages, as applicable; provided,
that all principal and interest payable on such Swingline Loans shall be for
the account of the Swingline Lender until the date the respective participation
is purchased and, to the extent attributable to the purchased participation,
shall be payable to the Lender purchasing the same from and after such date of
purchase.

 

2.2.          Minimum Amount of Each Borrowing;
Maximum Number of Borrowings.  The
aggregate principal amount of each Borrowing of Term Loans, Revolving Credit
Loans, Extended Revolving Credit Loans or Swingline Loans shall be in a
multiple of the Dollar Equivalent of $100,000 and shall not be less than the
Minimum Borrowing Amount with respect thereto (except that Mandatory Borrowings
shall be made in the amounts required by Section 2.1(d)).  More than one Borrowing may be incurred on
any date; provided, that at no time shall there be outstanding more than
20 Borrowings of Eurodollar Loans under this Agreement.

 

2.3.          Notice of Borrowing.  (a)   
The US Borrower (on its own behalf and on behalf of the UK Borrower) shall
give the Administrative Agent at the Administrative Agent’s Office written
notice (or telephonic notice promptly confirmed in writing) of the Borrowing of
Term Loans (i) prior to 12:00 Noon (Local Time) at least three Business
Days prior to the date of Borrowing of Term Loans if all or any of such Term
Loans are to be initially Eurodollar Loans and (ii) prior to 10:00 a.m.(New
York time) on the date of the Borrowing of Term Loans if all such Term Loans
are to be ABR Loans.  Such notice
(together with each notice of a Borrowing of Revolving Credit Loans or Extended
Revolving Credit Loans pursuant to Section 2.3(b) and each notice of
a Borrowing of Swingline Loans pursuant to Section 2.3(c), a “Notice of
Borrowing”) shall be irrevocable and shall specify (i) the borrower of
the Term Loans, which shall be either the US Borrower or the UK Borrower, (ii) the
currency in which the Borrowing is to be made, which shall be either Dollars or
Euro, (iii) the aggregate principal amount of the Term Loans to be made, (iv) the
date of the borrowing (which shall be a Business Day and (other than in the
case of the Term Loans made available pursuant to Section 2.1(a)(iii),
(iv), (v) and (vi)) shall be the Funding Date) and (v) whether the
Term Loans

 

68

 

shall consist of ABR Loans and/or Eurodollar Term Loans and, if the
Term Loans are to include Eurodollar Term Loans, the Interest Period to be
initially applicable thereto.  The
Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing of
Term Loans, of such Lender’s proportionate share thereof and of the other
matters covered by the related Notice of Borrowing.

 

(b)  Whenever the US Borrower
or the UK Borrower desires to incur Revolving Credit Loans or Extended
Revolving Credit Loans hereunder (other than Mandatory Borrowings or borrowings
to repay Unpaid Drawings), it shall give the Administrative Agent at the
Administrative Agent’s Office as specified in Section 14.2, (i) prior
to 12:00 Noon (Local Time) at least three Business Days’ prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
and (ii) prior to 12:00 Noon (New York time) at least one Business
Day’s prior written notice (or telephonic notice promptly confirmed in writing)
of each Borrowing of ABR Loans; provided that for any deemed borrowing
of Revolving Credit Loans pursuant to Section 2.1(b)(i) and (ii) such
notice will not be required.  Each such
Notice of Borrowing, except as otherwise expressly provided in Section 2.10,
shall be irrevocable and shall specify (i) the borrower of the Revolving
Credit Loans or Extended Revolving Credit Loans, as applicable, which shall be
either the US Borrower or the UK Borrower, (ii) the currency in which the
Revolving Credit Loans or Extended Revolving Credit Loans, as applicable, are
to be made, which shall be Dollars or a Foreign Currency, (iii) the
aggregate principal amount of the Revolving Credit Loans or Extended Revolving
Credit Loans, as applicable, to be made pursuant to such Borrowing (which, in
the case of a Foreign Currency Borrowing, shall be stated in both the
applicable Foreign Currency and the Dollar Equivalent thereof), (iii) the
date of Borrowing (which shall be a Business Day), (iv) whether the
respective Borrowing shall consist of ABR Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans and, if Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans, the Interest
Period to be initially applicable thereto and (v) the number and location
of the account to which funds are to be disbursed.  The Administrative Agent shall promptly give
each Lender written notice (or telephonic notice promptly confirmed in writing)
of each proposed Borrowing of Revolving Credit Loans or Extended Revolving
Credit Loans, as applicable, of such Lender’s proportionate share thereof and
of the other matters covered by the related Notice of Borrowing.

 

(c)  Whenever the US
Borrower desires to incur Swingline Loans hereunder, it shall give the
Swingline Lender written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Swingline Loans prior to 2:30 p.m. (New York
time) on the date of such Borrowing. 
Each such notice shall be irrevocable and shall specify (i) the
aggregate principal amount of the Swingline Loans to be made pursuant to such
Borrowing, (ii) the date of Borrowing (which shall be a Business Day) and (iii) the
number and location of the account to which funds are to be disbursed.

 

69

 

(d)  Mandatory Borrowings
shall be made upon the notice specified in Section 2.1(d), with the US
Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the
making of Mandatory Borrowings as set forth in such Section.

 

(e)  Borrowings to
reimburse Unpaid Drawings shall be made upon the notice specified in Section 3.4(a).

 

(f)  Without in any way
limiting the obligation of the US Borrower or the UK Borrower, as the case may
be, to confirm in writing any notice it may give hereunder by telephone, the
Administrative Agent may act prior to receipt of written confirmation without
liability upon the basis of such telephonic notice believed by the
Administrative Agent in good faith to be from an Authorized Officer of the US
Borrower or the UK Borrower, as the case may be.  In each such case, the US Borrower and the UK
Borrower each hereby waive the right to dispute the Administrative Agent’s
record of the terms of any such telephonic notice.

 

2.4.          Disbursement of Funds.  (a)   
No later than 12:00 Noon (Local Time) on the date specified in each
Notice of Borrowing (including Mandatory Borrowings), each Lender will make
available its pro  rata portion, if any, of each Borrowing
requested to be made on such date in the manner provided below; provided,
that all Swingline Loans shall be made available in the full amount thereof by
the Swingline Lender no later than 3:00 p.m. (New York time) on the date
requested.

 

(b)  Each Lender shall
make available all amounts it is to fund under any Borrowing in Dollars or in
the applicable Foreign Currency, as the case may be, and in immediately
available funds to the Administrative Agent at the Administrative Agent’s
Office and the Administrative Agent will (except in the case of Mandatory
Borrowings and Borrowings to repay Unpaid Drawings) make available to (i) the
US Borrower by depositing to the US Borrower’s account that is designated to
the Administrative Agent the aggregate of the amounts so made available in
Dollars or in the applicable Foreign Currency, as the case may be, and the type
of funds received and (ii) the UK Borrower, by depositing to the UK
Borrower’s account that is designated to the Administrative Agent the aggregate
of the amounts so made available in Dollars or in the applicable Foreign Currency,
as the case may be, and the type of funds received.  Unless the Administrative Agent shall have
been notified by any Lender prior to the date of any such Borrowing that such
Lender does not intend to make available to the Administrative Agent its portion
of the Borrowing or Borrowings to be made on such date, the Administrative
Agent may assume that such Lender has made such amount available to the
Administrative Agent on such date of Borrowing, and the Administrative Agent,
in reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the US Borrower or the UK Borrower, as
the case may be, a corresponding amount. 
If such corresponding amount is not in fact made available to the
Administrative Agent by such Lender and the Administrative Agent has made
available same to the US Borrower or the UK Borrower, as the case may be, the
Administrative Agent shall be entitled to recover such corresponding amount
from such Lender.  If such Lender does
not pay such corresponding amount forthwith upon the Administrative Agent’s
demand therefor the Administrative Agent shall promptly notify the US

 

70

 

Borrower or the UK Borrower, as the case may
be, and the US Borrower or the UK Borrower, as the case may be, shall
immediately pay such corresponding amount to the Administrative Agent.  The Administrative Agent shall also be
entitled to recover from such Lender or the US Borrower or the UK Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the US Borrower or the UK Borrower, as the case may be,
to the date such corresponding amount is recovered by the Administrative Agent,
at a rate per annum equal to (i) if paid by such Lender, the Federal Funds
Effective Rate or (ii) if paid by the US Borrower or the UK Borrower, as
the case may be, the then-applicable rate of interest, calculated in accordance
with Section 2.8, for the respective Loans.

 

(c)  Nothing in this Section 2.4
shall be deemed to relieve any Lender from its obligation to fulfill its
commitments hereunder or to prejudice any rights that the US Borrower or the UK
Borrower, as the case may be, may have against any Lender as a result of any
default by such Lender hereunder (it being understood, however, that no Lender
shall be responsible for the failure of any other Lender to fulfill its
commitments hereunder).

 

2.5.          Repayment of Loans; Evidence of
Debt.  (a)    The US Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, on the Tranche A-1
Term Loan Maturity Date, the then-unpaid Tranche A-1 Term Loans, in Euro.  The UK Borrower shall repay to the Administrative
Agent, for the benefit of the Lenders, on the Tranche A-2 Term Loan
Maturity Date, the then-unpaid Tranche A-2 Term Loans, in Euro.  The US Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, on the Tranche E Term
Loan Maturity Date, the then-unpaid Tranche E Term Loans, in Dollars.  The US Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, on the Tranche G Term
Loan Maturity Date, the then-unpaid Tranche G Term Loans, in Euro.  The US Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, on the Tranche H Term
Loan Maturity Date, the then-unpaid Tranche H Term Loans, in Dollars.  The US Borrower shall repay to the Administrative
Agent, for the benefit of the Lenders, on the Tranche I Term Loan Maturity
Date, the then-unpaid Tranche I Term Loans, in Euro.  The US Borrower and the UK Borrower, as the
case may be, shall repay to the Administrative Agent in Dollars or the applicable
Foreign Currency, as the case may be, for the benefit of the Lenders, on the
Revolving Credit Maturity Date, the then-unpaid Revolving Credit Loans.  The US Borrower and the UK Borrower, as the
case may be, shall repay to the Administrative Agent in Dollars or the
applicable Foreign Currency, as the case may be, for the benefit of the
Lenders, on the Extended Revolving Credit Maturity Date, the then-unpaid
Extended Revolving Credit Loans.  The US
Borrower shall repay to the Administrative Agent in Dollars, for the account of
the Swingline Lender, on the Swingline Maturity Date, the then-unpaid Swingline
Loans.

 

(b)  (i)  The US
Borrower shall repay to the Administrative Agent, in Euro, for the benefit of
the Lenders of Tranche A-1 Term Loans, on each date set forth below (each
a “Tranche A-1 Repayment Date”), the principal amount of the
Tranche A-1 Term Loans equal to (x) the sum of the outstanding
principal amount of Tranche A-1

 

71

 

Term Loans immediately after funding on the
Funding Date and, if applicable, the outstanding principal amount of additional
Tranche A-1 Term Loans funded after the Funding Date pursuant to Section 2.1(a)(iii) multiplied
by (y) the percentage set forth below opposite such Tranche A-1
Repayment Date (each a “Tranche A-1 Repayment Amount”):

 

	
  Number of Months

  From Funding Date

  	
   

  	
  Tranche A-1

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  5.00%

  	
   

  
	
  24

  	
   

  	
  5.00%

  	
   

  
	
  30

  	
   

  	
  7.50%

  	
   

  
	
  36

  	
   

  	
  7.50%

  	
   

  
	
  42

  	
   

  	
  8.33%

  	
   

  
	
  48

  	
   

  	
  8.33%

  	
   

  
	
  54

  	
   

  	
  8.33%

  	
   

  
	
  60

  	
   

  	
  8.33%

  	
   

  
	
  66

  	
   

  	
  9.16%

  	
   

  
	
  72

  	
   

  	
  9.16%

  	
   

  
	
  78

  	
   

  	
  11.66%

  	
   

  
	
  Tranche A-1
  Term Loan Maturity Date

  	
   

  	
  11.70% or
  remainder

  	
   

  

 

(ii)  The UK Borrower
shall repay to the Administrative Agent, in Euro, for the benefit of the
Lenders of Tranche A-2 Term Loans, on each date set forth below (each a “Tranche A-2
Repayment Date”), the principal amount of the Tranche A-2 Term Loans
equal to (x) the sum of the outstanding principal amount of Tranche A-2
Term Loans immediately after funding on the Funding Date and, if applicable,
the outstanding principal amount of additional Tranche A-2 Term Loans funded
after the Funding Date pursuant to Section 2.1(a)(iii) multiplied by (y) the
percentage set forth below opposite such Tranche A-2 Repayment Date (each
a “Tranche A-2 Repayment Amount”):

 

72

 

	
  Number of Months

  From Funding Date

  	
   

  	
  Tranche A-2

  Repayment Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  18

  	
   

  	
  5.00%

  	
   

  
	
  24

  	
   

  	
  5.00%

  	
   

  
	
  30

  	
   

  	
  7.50%

  	
   

  
	
  36

  	
   

  	
  7.50%

  	
   

  
	
  42

  	
   

  	
  8.33%

  	
   

  
	
  48

  	
   

  	
  8.33%

  	
   

  
	
  54

  	
   

  	
  8.33%

  	
   

  
	
  60

  	
   

  	
  8.33%

  	
   

  
	
  66

  	
   

  	
  9.16%

  	
   

  
	
  72

  	
   

  	
  9.16%

  	
   

  
	
  78

  	
   

  	
  11.66%

  	
   

  
	
  Tranche A-2
  Term Loan Maturity Date

  	
   

  	
  11.70% or
  remainder

  	
   

  

 

(iii)  The US Borrower
shall repay to the Administrative Agent, in Dollars, for the benefit of the
Lenders of Tranche E Term Loans, on each date set forth below (each a “Tranche E
Repayment Date”), the principal amount of the Tranche E Term Loans
equal to (x) the outstanding principal amount of Tranche E Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche E Repayment Date (each a “Tranche E
Repayment Amount”):

 

	
  Number
  of Months

  From
  Funding Date

  	
   

  	
  Tranche
  E

  Repayment
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  60

  	
   

  	
  0.5%

  	
   

  
	
  66

  	
   

  	
  0.5%

  	
   

  
	
  72

  	
   

  	
  0.5%

  	
   

  
	
  78

  	
   

  	
  0.5%

  	
   

  
	
  84

  	
   

  	
  0.5%

  	
   

  
	
  90

  	
   

  	
  0.5%

  	
   

  
	
  Tranche E
  Term Loan Maturity Date

  	
   

  	
  93.0% or
  remainder

  	
   

  

 

(iv)  The US Borrower
shall repay to the Administrative Agent, in Euro, for the benefit of the
Lenders of Tranche G Term Loans, on each date set forth below (each a “Tranche G
Repayment Date”), the principal amount of the Tranche G Term Loans
equal to (x) the outstanding principal amount of Tranche G Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche G Repayment Date (each a “Tranche G
Repayment Amount”):

 

73

 

	
  Number
  of Months

  From
  Funding Date

  	
   

  	
  Tranche
  G

  Repayment
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  60

  	
   

  	
  0.5%

  	
   

  
	
  66

  	
   

  	
  0.5%

  	
   

  
	
  72

  	
   

  	
  0.5%

  	
   

  
	
  78

  	
   

  	
  0.5%

  	
   

  
	
  84

  	
   

  	
  0.5%

  	
   

  
	
  90

  	
   

  	
  0.5%

  	
   

  
	
  Tranche G
  Term Loan Maturity Date

  	
   

  	
  93.0% or
  remainder

  	
   

  

 

(v)  The US Borrower shall
repay to the Administrative Agent, in Dollars, for the benefit of the Lenders
of Tranche H Term Loans, on each date set forth below (each a “Tranche H
Repayment Date”), the principal amount of the Tranche H Term Loans
equal to (x) the outstanding principal amount of Tranche H Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche H Repayment Date (each a “Tranche H
Repayment Amount”):

 

	
  Number of Months

  From Funding Date

  	
   

  	
  Tranche H

  Repayment

  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  60

  	
   

  	
  0.5%

  	
   

  
	
  66

  	
   

  	
  0.5%

  	
   

  
	
  72

  	
   

  	
  0.5%

  	
   

  
	
  78

  	
   

  	
  0.5%

  	
   

  
	
  84 

  	
   

  	
  0.5%

  	
   

  
	
  90

  	
   

  	
  0.5%

  	
   

  
	
  96

  	
   

  	
  0.5%

  	
   

  
	
  102

  	
   

  	
  0.5%

  	
   

  
	
  108

  	
   

  	
  0.5%

  	
   

  
	
  114

  	
   

  	
  0.5%

  	
   

  
	
  Tranche H Term Loan Maturity Date

  	
   

  	
  95.0% or remainder

  	
   

  

 

(vi)  The US Borrower
shall repay to the Administrative Agent, in Euro, for the benefit of the
Lenders of Tranche I Term Loans, on each date set forth below (each a “Tranche I
Repayment Date”), the principal amount of the Tranche I Term Loans
equal to (x) the outstanding principal amount of Tranche I Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche I Repayment Date (each a “Tranche I
Repayment Amount”):

 

74

 

	
  Number of Months

  From Funding Date

  	
   

  	
  Tranche I

  Repayment

  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  60

  	
   

  	
  0.5%

  	
   

  
	
  66

  	
   

  	
  0.5%

  	
   

  
	
  72

  	
   

  	
  0.5%

  	
   

  
	
  78

  	
   

  	
  0.5%

  	
   

  
	
  84 

  	
   

  	
  0.5%

  	
   

  
	
  90

  	
   

  	
  0.5%

  	
   

  
	
  96

  	
   

  	
  0.5%

  	
   

  
	
  102

  	
   

  	
  0.5%

  	
   

  
	
  108

  	
   

  	
  0.5%

  	
   

  
	
  114

  	
   

  	
  0.5%

  	
   

  
	
  Tranche I
  Term Loan Maturity Date

  	
   

  	
  95.0% or
  remainder

  	
   

  

 

(c)  Each Lender shall
maintain in accordance with its usual practice an account or accounts
evidencing the Indebtedness of the US Borrower and the UK Borrower, as the case
may be, to the appropriate lending office of such Lender resulting from each
Loan made by such lending office of such Lender from time to time, including
the amounts of principal and interest payable and paid to such lending office
of such Lender from time to time under this Agreement.

 

(d)  The Administrative
Agent shall maintain the Register pursuant to Section 14.6(b)(iv), and a
subaccount for each Lender, in which Register and subaccounts (taken together)
shall be recorded (i) the amount and currency of each Loan made hereunder,
whether such Loan is a Term Loan, a Revolving Credit Loan or Extended Revolving
Credit Loan or a Swingline Loan, the Type of each Loan made 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 US Borrower and the UK
Borrower, as the case may be, to each Lender or the Swingline Lender hereunder
and (iii) the amount of any sum received by the Administrative Agent hereunder
from the US Borrower and the UK Borrower, as the case may be, and each Lender’s
share thereof.

 

(e)  The entries made in
the Register and accounts and subaccounts maintained pursuant to paragraphs (c) and
(d) of this Section 2.5 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations of
the US Borrower and the UK Borrower therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such account,
such Register or such subaccount, as applicable, or any error therein, shall
not in any manner affect the obligation of the US Borrower or the UK Borrower
to repay (with applicable interest) the Loans made to the US Borrower or the UK
Borrower by such Lender in accordance with the terms of this Agreement.

 

2.6.          Conversions and Continuations.  (a)   
The US Borrower shall have the option on any Business Day to convert all
or a portion equal to at least the Minimum

 

75

 

Borrowing Amount of the outstanding principal amount of Tranche E Term
Loans, Tranche H Term Loans, Dollar Revolving Credit Loans or Dollar Extended
Revolving Credit Loans of one Type into a Borrowing or Borrowings of another
Type and the US Borrower or the UK Borrower, as the case may be, shall have the
option on any Business Day to continue the outstanding principal amount of any
Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans as Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans, as the case may be, for an
additional Interest Period; provided, that (i) no partial
conversion of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans shall reduce the outstanding
principal amount of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans made pursuant to a single Borrowing
to less than the Minimum Borrowing Amount, (ii) ABR Loans may not be
converted into Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans if a Default or Event of Default is
in existence on the date of the conversion and the Administrative Agent has or
the Required Lenders have determined in its or their sole discretion not to
permit such conversion, (iii) Eurodollar Loans may not be continued as
Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans for an additional Interest Period if a Default or Event
of Default is in existence on the date of the proposed continuation and the
Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such continuation and (iv) Borrowings
resulting from conversions pursuant to this Section 2.6 shall be limited
in number as provided in Section 2.2. 
Each such conversion or continuation shall be effected by the US
Borrower or the UK Borrower, as the case may be, by giving the Administrative
Agent at the Administrative Agent’s Office prior to 12:00 Noon (Local Time) at
least three Business Days’ (or one Business Day’s notice in the case of a
conversion into ABR Loans) prior written notice (or telephonic notice promptly
confirmed in writing) (each a “Notice of Conversion or Continuation”)
specifying the Term Loans, Revolving Credit Loans or Extended Revolving Credit
Loans to be so converted or continued, the Type of Term Loans, Revolving Credit
Loans or Extended Revolving Credit Loans to be converted or continued into and,
if such Term Loans, Revolving Credit Loans or Extended Revolving Credit Loans
are to be converted into or continued as Eurodollar Term Loans, Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans, the
Interest Period to be initially applicable thereto.  The Administrative Agent shall give each
Lender notice as promptly as practicable of any such proposed conversion or
continuation affecting any of its Term Loans, Revolving Credit Loans or
Extended Revolving Credit Loans.

 

(b)  If any Default or
Event of Default is in existence at the time of any proposed continuation of
any Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar
Extended Revolving Credit Loans and the Administrative Agent has or the
Required Lenders have determined in its or their sole discretion not to permit
such continuation, such Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans shall be automatically
converted on the last day of the then-current Interest Period (i) in
respect of Tranche E Term Loans, Tranche H Term Loans, Dollar Revolving
Credit Loans and Dollar Extended Revolving Credit

 

76

 

Loans, into ABR Loans, and (ii) in
respect of Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche G
Term Loans, Tranche I Term Loans, Foreign Currency Revolving Credit Loans and
Foreign Currency Extended Revolving Credit Loans, into Eurodollar Loans with an
Interest Period of one month.  If upon
the expiration of any Interest Period in respect of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit
Loans, the US Borrower or the UK Borrower, as the case may be, has failed to
elect a new Interest Period to be applicable thereto as provided in
paragraph (a) above, (i) the US Borrower or the UK Borrower, as
the case may be, shall be deemed to have elected to convert such Dollar
Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans, as the case may be, into a
Borrowing of ABR Loans effective as of the expiration date of such current
Interest Period and (ii) the US Borrower or the UK Borrower, as the case
may be, shall be deemed to have elected to convert such Foreign Currency
Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans, as the case may be, into a
Borrowing of Eurodollar Loans with an Interest Period of one month effective as
of the expiration date of such then-current Interest Period.

 

2.7.          Pro Rata Borrowings.  Each Borrowing of Term Loans under this
Agreement shall be granted by the Lenders pro  rata on the basis
of their then-applicable Term Loan Commitments. 
Each Borrowing of Revolving Credit Loans or Extended Revolving Credit
Loans, as applicable, under this Agreement shall be granted by the Lenders pro
rata on the basis of their then-applicable Revolving Credit Commitments
or Extended Revolving Credit Commitments, as applicable.  It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.

 

2.8.          Interest.  (a)   
The unpaid principal amount of each ABR Loan shall bear interest from
the date of the Borrowing thereof until maturity (whether by acceleration or
otherwise) at a rate per annum that shall at all times be the Applicable ABR
Margin plus the ABR in effect from time to time.

 

(b)  The unpaid principal
amount of each Eurodollar Term Loan, Eurodollar Revolving Credit Loan or
Eurodollar Extended Revolving Credit Loan shall bear interest from the date of
the Borrowing thereof until maturity thereof (whether by acceleration or
otherwise) at a rate per annum that shall at all times be the Applicable
Eurodollar Margin in effect from time to time plus the relevant
Eurodollar Rate plus, in the case of Foreign Currency Loans, any
Additional Cost incurred by such Lender in respect of such Foreign Currency
Loans from time to time.

 

(c)  If all or a portion
of (i) the principal amount of any Loan or (ii) any interest payable
thereon shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum that is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto plus 2% or (y) in the case of
any overdue interest, to the extent permitted by

 

77

 

applicable law, the rate described in Section 2.8(a) plus
2% from and including the date of such non-payment to but excluding the date on
which such amount is paid in full (after as well as before judgment).

 

(d)  Interest on each Loan
shall accrue from and including the date of any Borrowing to but excluding the
date of any repayment thereof and shall be payable (i) in respect of each
ABR Loan, quarterly in arrears on the last day of each March, June, September and
December, (ii) in respect of each Eurodollar Term Loan, Eurodollar
Revolving Credit Loan or Eurodollar Extended Revolving Credit Loan, on the last
day of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each date occurring at three-month
intervals after the first Business Day of such Interest Period, (iii) in
respect of each Loan (except, other than in the case of prepayments, any ABR
Loan), on any prepayment (on the amount prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.  It is understood and agreed that, in the
event that the Acquisition is not consummated on July 31, 2004 and the
Loans are prepaid, interest on each Loan made on the Funding Date shall accrue
from and including the Funding Date to but excluding the date of the repayment
thereof in accordance with this Agreement and such interest shall be payable on
the date of such prepayment.

 

(e)  All computations of
interest hereunder shall be made in accordance with Section 5.5.

 

(f)  The Administrative
Agent, upon determining the interest rate for any Borrowing of Eurodollar
Loans, shall promptly notify the US Borrower (on its own behalf and on behalf
of the UK Borrower) and the relevant Lenders thereof.  Each such determination shall, absent clearly
demonstrable error, be final and conclusive and binding on all parties hereto.

 

2.9.          Interest Periods.  At the time the US Borrower or the UK
Borrower, as the case may be, gives a Notice of Borrowing or Notice of
Conversion or Continuation in respect of the making of, or conversion into or
continuation as, a Borrowing of Eurodollar Term Loans, Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans (in the case of the
initial Interest Period applicable thereto) or prior to 10:00 a.m. (Local
Time) on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans, the US Borrower or the UK
Borrower, as the case may be, shall have the right to elect by giving the Administrative
Agent written notice (or telephonic notice promptly confirmed in writing) the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the US Borrower or the UK Borrower, as the case may be, be a one,
two, three, six or (in the case of Revolving Credit Loans or Extended Revolving
Credit Loans, if available to all the Lenders making such loans as determined
by such Lenders in good faith based on prevailing market conditions) a nine or
twelve month period; provided, that the initial Interest Period may be
for a period less than one month if agreed upon by the US Borrower and the
Administrative Agent.  Notwithstanding
anything to the contrary contained above:

 

78

 

(a)  the initial Interest
Period for any Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans shall commence on the date
of such Borrowing (including the date of any conversion from a Borrowing of ABR
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding Interest Period
expires;

 

(b)  if any Interest
Period relating to a Borrowing of Eurodollar Term Loans, Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans begins on the last
Business Day of a calendar month or begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of the calendar
month at the end of such Interest Period;

 

(c)  if any Interest
Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided,
that if any Interest Period in respect of a Eurodollar Term Loan, Eurodollar
Revolving Credit Loan or Eurodollar Extended Revolving Credit Loan would
otherwise expire on a day that is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day; and

 

(d)  the US Borrower or
the UK Borrower, as the case may be, shall not be entitled to elect any
Interest Period in respect of any Eurodollar Term Loan, any Eurodollar
Revolving Credit Loan or any Eurodollar Extended Revolving Credit Loan if such
Interest Period would extend beyond the applicable Maturity Date of such Loan.

 

2.10.        Increased Costs, Illegality, etc.  (a)   
In the event that (x) in the case of clause (i) below,
the Administrative Agent or (y) in the case of clauses (ii) and (iii) below,
any Lender shall have reasonably determined (which determination shall, absent
clearly demonstrable error, be final and conclusive and binding upon all
parties hereto):

 

(i)  on any date for
determining the Eurodollar Rate for any Interest Period that (x) deposits
in the principal amounts of the Loans comprising such Eurodollar Borrowing and
in the currency in which such Loan is to be denominated are not generally
available in the relevant market or (y) by reason of any changes arising
on or after the Funding Date affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate; or

 

(ii)  at any time, that
such Lender shall incur increased costs or reductions in the amounts received
or receivable hereunder with respect to any Eurodollar Loans (other than any
such increase or reduction attributable to taxes) because of (x) any
change since the Funding Date in any applicable law, governmental rule,
regulation, guideline or order (or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, guideline or order), such

 

79

 

as, for example, without limitation, a change
in official reserve requirements, and/or (y) other circumstances affecting
the interbank Eurodollar market or the position of such Lender in such market;
or

 

(iii)  at any time, that
the making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Lender in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such governmental
rule, regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the Funding Date
that materially and adversely affects the interbank Eurodollar market;

 

then, and in any such event, such Lender (or
the Administrative Agent, in the case of clause (i) above) shall
within a reasonable time thereafter give notice (if by telephone, confirmed in
writing) to the US Borrower (on its own behalf and on behalf of the UK
Borrower) and to the Administrative Agent of such determination (which notice
the Administrative Agent shall promptly transmit to each of the other Lenders).  Thereafter (x) in the case of
clause (i) above, Eurodollar Term Loans, Eurodollar Revolving Credit
Loans and Eurodollar Extended Revolving Credit Loans shall no longer be
available until such time as the Administrative Agent notifies the US Borrower
(on its own behalf and on behalf of the UK Borrower) and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist (which notice the Administrative Agent agrees to give at such time when
such circumstances no longer exist), and any Notice of Borrowing or Notice of
Conversion given by the US Borrower or the UK Borrower with respect to
Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans that have not yet been incurred shall be deemed
rescinded by the US Borrower or the UK Borrower, (y) in the case of
clause (ii) above, the US Borrower or the UK Borrower, as the case
may be, shall pay to such Lender, promptly after receipt of written demand
therefor such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
reasonable discretion shall determine) as shall be required to compensate such
Lender for such increased costs or reductions in amounts receivable hereunder
(it being agreed that a written notice as to the additional amounts owed to
such Lender, showing in reasonable detail the basis for the calculation
thereof, submitted to the US Borrower or the UK Borrower, as the case may be,
by such Lender shall, absent clearly demonstrable error, be final and
conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the US Borrower or the UK Borrower, as the case
may be, shall take one of the actions specified in Section 2.10(b) as
promptly as possible and, in any event, within the time period required by law.

 

(b)  At any time that any
Eurodollar Loan is affected by the circumstances described in Section 2.10(a)(ii) or
(iii), the US Borrower or the UK Borrower, as the case may be, may (and in the
case of a Eurodollar Loan affected pursuant to Section 2.10(a)(iii) shall)
either (x) if the affected Eurodollar Loan is then being made pursuant to
a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the US
Borrower or the UK Borrower, as the case may be, was notified by a Lender
pursuant to Section

 

80

 

2.10(a)(ii) or (iii) or (y) if
the affected Eurodollar Loan is a Tranche E Term Loan, a Tranche H Term Loan, a
Dollar Revolving Credit Loan or a Dollar Extended Revolving Credit Loan and is
then outstanding, upon at least three Business Days’ notice to the
Administrative Agent, require the affected Lender to convert each such
Eurodollar Revolving Credit Loan, Eurodollar Extended Revolving Credit Loan and
Eurodollar Term Loan into an ABR Loan; provided, that if more than one
Lender is affected at any time, then all affected Lenders must be treated in
the same manner pursuant to this Section 2.10(b).

 

(c)  If, after the Funding
Date, the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, the National Association
of Insurance Commissioners, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Lender or its
parent with any request or directive made or adopted after the Funding Date
regarding capital adequacy (whether or not having the force of law) of any such
authority, association, central bank or comparable agency, has or would have
the effect of reducing the rate of return on such Lender’s or its parent’s
capital or assets as a consequence of such Lender’s commitments or obligations
hereunder to a level below that which such Lender or its parent could have
achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Lender’s or its parent’s policies with respect to
capital adequacy), then from time to time, promptly after demand by such Lender
(with a copy to the Administrative Agent), the US Borrower or the UK Borrower,
as the case may be, shall pay to such Lender such additional amount or amounts
as will compensate such Lender or its parent for such reduction, it being
understood and agreed, however, that a Lender shall not be entitled to such
compensation as a result of such Lender’s compliance with, or pursuant to any
request or directive to comply with, any such law, rule or regulation as
in effect on the Funding Date.  Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 2.10(c), will give prompt written notice
thereof to the US Borrower (on its own behalf and on behalf of the UK
Borrower), which notice shall set forth in reasonable detail the basis of the
calculation of such additional amounts, although the failure to give any such
notice shall not, subject to Section 2.13, release or diminish any of the
US Borrower’s or the UK Borrower’s, as the case may be, obligations to pay
additional amounts pursuant to this Section 2.10(c) upon receipt of
such notice.

 

(d)  Notwithstanding the
foregoing, in the case of Foreign Currency Revolving Credit Loans or Foreign
Currency Extended Revolving Credit Loans affected by the circumstances
described in Section 2.10(a)(i), as promptly as practicable but in no
event later than three Business Days after the giving of the required notice by
the Administrative Agent with respect to such circumstances, the Administrative
Agent (in consultation with the Lenders) shall negotiate with the US Borrower
in good faith in order to ascertain whether a substitute interest rate (a “Substitute
Rate”) may be agreed upon for the maintaining of existing Foreign Currency
Revolving Credit Loans or Foreign Currency Extended Revolving Credit
Loans.  If a Substitute Rate is agreed
upon by the US Borrower and all the Lenders, such Substitute Rate shall
apply.  If a Substitute Rate is not so
agreed upon by the US Borrower and all the Lenders within such time,

 

81

 

each Lender’s Foreign Currency Revolving
Credit Loans or Foreign Currency Extended Revolving Credit Loans, as
applicable, shall thereafter bear interest at a rate equal to the sum of (i) the
rate certified by such Lender to be its costs of funds (from such sources as it
may reasonably select out of those sources then available to it) for such
Foreign Currency Revolving Credit Loans or Foreign Currency Extended Revolving
Credit Loans, as applicable, plus (ii) the Applicable Eurodollar
Margin plus (iii), in the case of Foreign Currency Loans denominated in
Sterling only, any Additional Cost incurred by such Lender in respect of such
Sterling Foreign Currency Loans from time to time.

 

2.11.        Compensation.  If (a) any payment of principal of any
Eurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar Extended
Revolving Credit Loan is made by the US Borrower or the UK Borrower, as the
case may be, to or for the account of a Lender other than on the last day of
the Interest Period for such Eurodollar Loan as a result of a payment or
conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 14.7, as a
result of acceleration of the maturity of the Loans pursuant to Section 11
or for any other reason, (b) any Borrowing of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
is not made as a result of a withdrawn Notice of Borrowing, (c) any ABR
Loan is not converted into a Eurodollar Term Loan, Eurodollar Revolving Credit
Loan or Eurodollar Extended Revolving Credit Loan as a result of a withdrawn
Notice of Conversion or Continuation, (d) any Eurodollar Loan is not
continued as a Eurodollar Term Loan, Eurodollar Revolving Credit Loan or
Eurodollar Extended Revolving Credit Loan as a result of a withdrawn Notice of
Conversion or Continuation or (e) any prepayment of principal of any
Eurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar Extended
Revolving Credit Loan is not made as a result of a withdrawn notice of
prepayment pursuant to Section 5.1 or 5.2, the US Borrower or the UK
Borrower, as the case may be, shall, after receipt of a written request by such
Lender (which request shall set forth in reasonable detail the basis for
requesting such amount), pay to the Administrative Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that such Lender may reasonably incur as a result of
such payment, failure to convert, failure to continue or failure to prepay,
including any loss, cost or expense (excluding loss of anticipated profits)
actually incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by any Lender to fund or maintain such Eurodollar Loan.

 

2.12.        Change of Lending Office.  Each Lender agrees that, upon the occurrence
of any event giving rise to the operation of Section 2.10(a)(ii),
2.10(a)(iii), 2.10(b), 3.5 or 5.4 with respect to such Lender, it will, if
requested by the US Borrower or the UK Borrower, as the case may be, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event; provided,
that such designation is made on such terms that such Lender and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of any such
Section.  Nothing in this Section 2.12
shall affect or postpone any of the obligations of the US Borrower or the UK
Borrower, as the case may be, or the right of any Lender provided in Section 2.10,
3.5 or 5.4.

 

82

 

2.13.        Notice of Certain Costs.  Notwithstanding anything in this Agreement to
the contrary, to the extent any notice required by Section 2.10, 2.11, 3.5
or 5.4 is given by any Lender more than 180 days after such Lender has
knowledge (or should have had knowledge) of the occurrence of the event giving
rise to the additional cost, reduction in amounts, loss, tax or other
additional amounts described in such Sections, such Lender shall not be
entitled to compensation under Section 2.10, 2.11, 3.5 or 5.4, as the case
may be, for any such amounts incurred or accruing prior to the giving of such
notice to the US Borrower or the UK Borrower, as the case may be.

 

2.14.        Incremental Facilities.  The US Borrower may by written notice to the
Administrative Agent elect to request the establishment of one or more (x) new
Tranche H Term Loan Commitments (the “New Tranche H Term Loan Commitments”)
and/or new Tranche I Term Loans Commitments (the “New Tranche I Term Loan
Commitments”) and/or (y) new Revolving Credit Commitments (the “New
Revolving Credit Commitment”) and/or new Extended Revolving Credit
Commitments (the “New Extended Revolving Loan Commitments” and, together
with the New Tranche H Term Loan Commitments, the New Tranche I Term Loan
Commitment and the New Revolving Credit Commitments, the “New Loan
Commitments”), by an aggregate amount not less than $25,000,000
individually (or such lesser amount which shall be approved by the
Administrative Agent or such lesser amount that shall constitute the difference
between $250,000,000 and all such New Loan Commitments obtained prior to such
date), and integral multiples of $5,000,000 in excess of that amount, and in
any event, by an aggregate amount which, when taken together with the principal
amount of any Permitted Additional Notes, shall not exceed $250,000,000 in the
aggregate.  Each such notice shall
specify the date (each, an “Increased Amount Date”) on which the US
Borrower proposes that the New Loan Commitments shall be effective, which shall
be a date not less than 10 Business Days after the date on which such notice is
delivered to the Administrative Agent; provided, that the US Borrower
shall first offer the Lenders to provide all of the New Loan Commitments prior
to offering any other Person that is an eligible assignee pursuant to Section 14.6(b);
provided  further, that any Lender offered or approached to
provide all or a portion of the New Loan Commitments may elect or decline, in
its sole discretion, to provide a New Loan Commitment.  Such New Loan Commitments shall become
effective, as of such Increased Amount Date; provided, that (1) no
Default or Event of Default shall exist on such Increased Amount Date before or
after giving effect to such New Loan Commitments, as applicable; (2) both
before and after giving effect to the making of any Series of New Tranche
H Term Loans, New Tranche I Term Loans, New Revolving Loans, or New Extended
Revolving Loans, each of the conditions set forth in Section 7.1 and 7.2
shall be satisfied; (3) the US Borrower and its Subsidiaries shall be in pro
forma compliance with each of the covenants set forth in Sections 10.9
and 10.10 as of the last day of the most recently ended fiscal quarter after
giving effect to such New Loan Commitments and any investment to be consummated
in connection therewith; (4) the New Loan Commitments shall be effected
pursuant to one or more Joinder Agreements executed and delivered by the US
Borrower and Administrative Agent, and each of which shall be recorded in the
Register by the US Borrower and Administrative Agent, and shall be subject to
the requirements set forth in Section 5.4(b); (5) the US Borrower
shall make any payments required pursuant to Section 2.11 in connection
with the New Loan Commitments, as applicable; and (6) the US Borrower 

 

83

 

shall
deliver or cause to be delivered (i) a certificate of the US Borrower and
Holdings dated the Increased Amount Date, substantially in the form of Exhibit P,
with appropriate insertions, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Credit Party, and
attaching the documents referred to in Section 6.7 and 6.8 and, where
applicable, certifying as to the incumbency and specimen signature of each officer
executing any Credit Document or any other document delivered in connection
therewith on behalf of such Credit Party, (ii) the executed legal opinions
of Simpson Thacher and Bartlett LLP and Tom Riordan, general counsel of the
Credit Parties, in each case, substantially in the forms previously delivered
in connection with this Agreement and (iii) any other applicable documents
reasonably required by the Administrative Agent in connection with any such
transaction.  Any New Tranche H Term
Loans or New Tranche I Term Loans made on an Increased Amount Date shall be
designated a separate series (a “Series”) of New Tranche H Term Loans or
New Tranche H Term Loans, as applicable, for all purpose of this Agreement.

 

On
any Increased Amount Date on which New Revolving Loan Commitments or New
Extended Revolving Loan Commitments are effected, subject to the satisfaction
of the foregoing terms and conditions, (a) each of the Lenders with New
Revolving Loan Commitments or Extended Revolving Credit Commitments, as applicable,
shall assign to each Lender with a New Revolving Credit Commitment (each, a “New
Revolving Loan Lender”) or a New Extended Revolving Loan Commitments (each,
a “New Extended Revolving Loan Lender”), as applicable, and each of the
New Revolving Loan Lenders or New Extended Revolving Loan Lenders shall
purchase from each of the Lenders with Revolving Credit Commitments or Extended
Revolving Credit Commitments, as applicable, at the principal amount thereof
(together with accrued interest), such interests in the Revolving Credit Loans
or Extended Revolving Credit Loans, as applicable, outstanding on such
Increased Amount Date as shall be necessary in order that, after giving effect
to all such assignments and purchases, such Revolving Credit Loans or Extended
Revolving Credit Loans, as applicable, will be held by existing Lenders with
Revolving Credit Loans or Extended Revolving Credit Loans, as applicable, and
New Revolving Loan Lenders or New Extended Revolving Loan Lenders, as
applicable, ratably in accordance with their Revolving Credit Commitments or
Extended Revolving Credit Commitments after giving effect to the addition of
such New Revolving Credit Commitments or New Extended Revolving Credit
Commitments to the New Revolving Credit Commitments or Extended Revolving
Credit Commitments, (b) each New Revolving Credit Commitment or New
Extended Revolving Credit Commitment shall be deemed for all purposes a
Revolving Credit Commitment or an Extended Revolving Credit Commitment, as
applicable, and each Loan made thereunder (a “New Revolving Loan” or a “New
Extended Revolving Loan”, as applicable) shall be deemed, for all purposes,
a Revolving Credit Loan or an Extended Revolving Credit Loan and (c) each
New Revolving Loan Lender and New Extended Revolving Loan Lender shall become a
Lender with respect to the New Revolving Loan Commitment or New Extended
Revolving Loan Commitment, as applicable, and all matters relating thereto.

 

On
any Increased Amount Date on which any New Tranche H Term Loan Commitments or
New Tranche I Term Loan Commitments of any Series are effective, 

 

84

 

subject
to the satisfaction of the foregoing terms and conditions, (i) each Lender
with a New Tranche H Term Loan Commitment (each, a “New Tranche H Term Loan
Lender”) or New Tranche I Term Loan Commitment (each, a “New Tranche I
Term Loan Lender”) of any Series shall make a Loan to the US Borrower
(a “New Tranche H Term Loan” or a “New Tranche I Term Loan”, as
applicable) in an amount equal to its New Tranche H Term Loan Commitment or New
Tranche I Term Loan Commitment, as applicable, of such Series, and (ii) each
New Tranche H Term Loan Lender and New Tranche I Term Loan Lender of any Series shall
become a Lender hereunder with respect to the New Tranche H Term Loan
Commitment or New Tranche I Term Loan Commitment, as applicable, of such Series and
the New Tranche H Term Loans or New Tranche I Term Loans, as applicable, of
such Series made pursuant thereto.

 

The
terms and provisions of the New Tranche H Term Loans, New Tranche I Term Loans,
New Tranche H Term Loan Commitments and New Tranche I Term Loan Commitments of
any Series shall be, except as otherwise set forth herein or in the
Joinder Agreement, identical to the Tranche H Term Loans or the Tranche I Term
Loans, as applicable; provided, however, that (i) the
applicable maturity date of each Series shall be no shorter than the final
maturity of the Extended Revolving Credit Loans and the Tranche H Term Loans
and (ii) the rate of interest applicable to the New Tranche H Term Loans
and the New Tranche H Term Loans of each Series shall be determined by the
US Borrower and the applicable new Lenders and shall be set forth in each
applicable Joinder Agreement. The terms and provisions of the New Revolving
Loans, New Extended Revolving Loans, New Revolving Credit Commitments and New
Extended Revolving Credit Commitments shall be identical to the Revolving
Credit Loans, the Extended Revolving Credit Loans, the Revolving Credit
Commitments and the Extended Revolving Credit Commitments.

 

Each
Joinder Agreement may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Credit Documents as may be necessary
or appropriate, in the opinion of the Administrative Agent, to effect the
provision of this Section 2.14.

 

2.15.        Incremental Refinancing
Facilities.  The US
Borrower may by written notice to the Administrative Agent elect to request the
establishment of one or more new tranches of (x) Term Loan Commitments
(the “Incremental Refinancing Term Loan Commitments”), by an aggregate
amount not less than $25,000,000 individually (or such lesser amount which
shall be approved by the Administrative Agent), and integral multiples of
$5,000,000 in excess of that amount, the proceeds of which shall be used solely
to repay the Tranche A-1 Term Loans, the Tranche A-2 Term Loans, the Tranche E
Term Loans or the Tranche G Term Loans as required by Section 5.2 and (y) Revolving
Credit Commitments or Extended Revolving Credit Commitments (the “Incremental
Refinancing Revolving Credit Commitments”), by an aggregate amount not less
than $25,000,000 individually (or such lesser amount which shall be approved by
the Administrative Agent), and integral multiples of $5,000,000 in excess of
that amount, the proceeds of which shall be used solely to permanently replace
Revolving Credit Commitments or Extended Revolving Credit Commitments.  Each such notice shall specify the date
(each, an “Incremental Refinancing Amount Date”) on which the US 

 

85

 

Borrower
proposes that the Incremental Refinancing Term Loan Commitments or Incremental
Refinancing Revolving Credit Commitments shall be effective, which shall be a
date not less than 10 Business Days after the date on which such notice is
delivered to the Administrative Agent; provided, that the US Borrower
shall first offer the Lenders to provide all of the Incremental Refinancing
Term Loan Commitments or all Incremental Refinancing Revolving Credit
Commitments, as applicable, prior to offering any other Person that is an
eligible assignee pursuant to Section 14.6(b); provided  further,
that any Lender offered or approached to provide all or a portion of the
Incremental Refinancing Term Loan Commitments or the Incremental Refinancing
Revolving Credit Commitments may elect or decline, in its sole discretion, to
provide an Incremental Refinancing Term Loan Commitment or Incremental
Refinancing Revolving Credit Commitment, as applicable.  Such Incremental Refinancing Term Loan
Commitments and such Incremental Refinancing Revolving Credit Commitments, as
applicable, shall become effective, as of such Incremental Refinancing Amount
Date; provided, that (1) no Default or Event of Default shall exist
on such Incremental Refinancing Amount Date before or after giving effect to
such Incremental Refinancing Term Loan Commitments or such Incremental
Refinancing Revolving Credit Commitments, as applicable; (2) both before
and after giving effect to the making of any Series of Incremental
Refinancing Term Loans or any Incremental Refinancing Revolving Credit
Commitments, each of the conditions set forth in Section 7.1 and 7.2 shall
be satisfied; (3) the US Borrower and its Subsidiaries shall be in pro
forma compliance with each of the covenants set forth in Sections 10.9
and 10.10 as of the last day of the most recently ended fiscal quarter after
giving effect to such Incremental Refinancing Term Loan Commitments or such
Incremental Refinancing Revolving Credit Commitments; (4) the Incremental
Refinancing Term Loan Commitments and the Incremental Refinancing Revolving
Credit Commitments, as applicable, shall be effected pursuant to one or more
Joinder Agreements executed and delivered by the US Borrower and Administrative
Agent, and each of which shall be recorded in the Register by the US Borrower
and Administrative Agent, and shall be subject to the requirements set forth in
Section 5.4(b); (5) the US Borrower shall make any payments required
pursuant to Section 2.11 in connection with the Incremental Refinancing
Term Loan Commitments or Incremental Refinancing Revolving Credit Commitments,
as applicable; and (6) the US Borrower shall deliver or cause to be
delivered (i) a certificate of the US Borrower and Holdings dated the
Incremental Refinancing Amount Date, substantially in the form of Exhibit P,
with appropriate insertions, executed by the President or any Vice President
and the Secretary or any Assistant Secretary of such Credit Party, and
attaching the documents referred to in Section 6.7 and 6.8 and, where
applicable, certifying as to the incumbency and specimen signature of each
officer executing any Credit Document or any other document delivered in
connection therewith on behalf of such Credit Party, (ii) the executed
legal opinions of Simpson Thacher and Bartlett LLP and Tom Riordan, general
counsel of the Credit Parties, in each case, substantially in the forms
previously delivered in connection with this Agreement and (iii) any other
applicable documents reasonably required by the Administrative Agent in
connection with any such transaction. 
Any Incremental Refinancing Term Loans or Incremental Refinancing
Revolving Credit Commitments made on an Incremental Refinancing Amount Date
shall be designated a separate series (a “Refinancing Series”) of
Incremental Refinancing Term Loans or 

 

86

 

Incremental
Refinancing Revolving Credit Commitments, as applicable, for all purpose of
this Agreement.

 

The terms and provisions of any Term Loans
made under the Incremental Refinancing Term Loan Commitments shall be, except
as otherwise set forth herein or in the Joinder Agreement, identical to those
of the Tranche H Term Loans; provided, however, that (i) the
applicable maturity date of each Refinancing Series shall be no shorter
than the final maturity of the Tranche H Term Loans and (ii) the rate of
interest applicable to the Incremental Refinancing Term Loans of each
Refinancing Series shall be determined by the US Borrower and the
applicable new Lenders and shall be set forth in each applicable Joinder
Agreement; provided  further, that if the initial yield on any
Incremental Refinancing Term Loans (as determined by the Administrative Agent
to be equal to the sum of (x) the Eurodollar Rate (including any
applicable Eurodollar Rate floor) plus the Applicable Eurodollar Margin
applicable to the Incremental Refinancing Term Loans and (y) if the
Incremental Refinancing Term Loans are initially made at a discount or the Lenders
making the same receive a fee directly or indirectly from Holdings, either
Borrower or any Subsidiary for doing so (the amount of such fee, expressed as a
percentage of the Incremental Refinancing Term Loans, being referred to herein
as “OID”), the amount of such OID divided by the lesser of (A) the
average life to maturity of such Incremental Refinancing Term Loans and (B) four)
exceeds by more than 50 basis points (the amount of such excess above 50
basis points being referred to herein as the “Yield Differential”) the
Eurodolloar Rate plus the Applicable Eurodollar Margin then in effect for any
Eurodollar Rate Tranche H Term Loan or Tranche I Term Loan, then the Applicable
Margin then in effect for Term Loans shall automatically be increased by the
Yield Differential, effective upon the making of the Incremental Refinancing
Term Loans (and if the Eurodollar Rate margins on the Incremental Refinancing
Term Loans are subject to a leveraged-based pricing grid, appropriate increases
to the other Applicable Margins for the Term Loans, consistent with the
foregoing, shall be made).

 

On
any Incremental Refinancing Amount Date on which any Incremental Refinancing
Term Loan Commitments of any Refinancing Series are effective, subject to
the satisfaction of the foregoing terms and conditions, (i) each Lender
with a Incremental Refinancing Term Loan Commitment (each, a “Incremental
Refinancing Term Loan Lender”) of any Refinancing Series shall make a
Loan to the US Borrower (a “Incremental Refinancing Term Loan”) in an
amount equal to its Incremental Refinancing Term Loan Commitment of such
Refinancing Series, and (ii) each Incremental Refinancing Term Loan Lender
of any Refinancing Series shall become a Lender hereunder with respect to
the Incremental Refinancing Term Loan Commitment of such Refinancing Series and
the Incremental Refinancing Term Loans of such Refinancing Series made
pursuant thereto.

 

The terms and provisions of any Incremental
Refinancing Revolving Credit Loans made under the Incremental Refinancing
Revolving Credit Commitments shall be, except as otherwise set forth herein or
in the Joinder Agreement, identical to those of the Revolving Credit Loans or
Extended Revolving Credit Loans, as applicable; provided, however,
that (i) the applicable maturity date of such Refinancing Series shall

 

87

 

be no shorter than the final
maturity of the Revolving Credit Commitments or Extended Revolving Credit
Commitments, as applicable and (ii) the rate of interest applicable to the
Incremental Refinancing Revolving Credit Loans of each Refinancing Series shall
be determined by the US Borrower and the applicable new Lenders and shall be
set forth in each applicable Joinder Agreement.

 

On
any Incremental Refinancing Amount Date on which any Incremental Refinancing
Revolving Credit Commitments of any Refinancing Series are effective,
subject to the satisfaction of the foregoing terms and conditions, (i) each
Lender with a Incremental Refinancing Revolving Credit Commitment (each, a “Incremental
Refinancing Revolving Credit Lender”) of any Refinancing Series shall
commit to make Extended Revolving Credit Loans to the US Borrower (“Incremental
Refinancing Revolving Credit Loans”) in an amount equal to its Incremental
Refinancing Revolving Credit Commitment of such Refinancing Series, and (ii) each
Incremental Refinancing Revolving Credit Lender of any Refinancing Series shall
become a Lender hereunder with respect to the Incremental Refinancing Revolving
Credit Commitment of such Refinancing Series.

 

Each
Joinder Agreement may, without the consent of any other Lenders, effect such
amendments to this Agreement and the other Credit Documents as may be necessary
or appropriate, in the opinion of the Administrative Agent, to effect the
provision of this Section 2.15.

 

SECTION 3.       Letters of Credit

 

3.1.          Letters of Credit.  (a)   
Subject to and upon the terms and conditions herein set forth, (i) the
US Borrower or the UK Borrower, at any time and from time to time on or after the
Funding Date and prior to the L/C Maturity Date, may request that the Letter of
Credit Issuer issue for the account of the US Borrower or the UK Borrower, as
the case may be, a standby letter of credit or letters of credit in Dollars
(each a “Dollar Letter of Credit” and, collectively, the “Dollar
Letters of Credit”) in such form as may be approved by the Letter of Credit
Issuer in its reasonable discretion and (ii) the US Borrower or the UK
Borrower, at any time and from time to time on or after the Funding Date and
prior to the L/C Maturity Date, may request that the Letter of Credit Issuer
issue for the account of the US Borrower or the UK Borrower, as the case may
be, a standby letter of credit or letters of credit in a Foreign Currency (each
a “Foreign Currency Letter of Credit” and, collectively, the “Foreign
Currency Letters of Credit” and, together with the Dollar Letters of
Credit, the “Letters of Credit”) in such form as may be approved by the
Letter of Credit Issuer in its reasonable discretion.  Notwithstanding anything contained herein to
the contrary, it is acknowledged and agreed that, from and after the
Restatement Date, (a) all Letter of Credit Exposure with respect to
Converting Letters of Credit and any related Unpaid Drawings shall be deemed
for all purposes hereunder to be issued under the Extended Revolving Credit
Commitment, (b) there shall be an automatic adjustment to the
participations held by each Lender thereunder pursuant to Section 3.3 so
that the undivided participation and interest of the Lenders in each such
Converting Letter of Credit and any related Unpaid Drawing is deemed to be made
in respect of the Extended Revolving Credit Commitment as if such 

 

88

 

Converting
Letter of Credit were made on or after the Restatement Date and (c) all
Letters of Credit issued after the Restatement Date shall be issued under the
Extended Revolving Credit Commitment; provided, however, that if,
the Extended Revolving Credit Exposure equals or exceeds the Total Extended
Revolving Credit Commitment and all possible automatic refinancings of Extended
Revolving Loans have occurred pursuant to Section 2.1(b)(i) or (ii),
as applicable, then Letters of Credit may be issued under the Revolving Credit
Commitment.

 

(b)  Notwithstanding the foregoing, (i) no
Letter of Credit shall be issued the Dollar Equivalent of the Stated Amount of
which, when added to the Letter of Credit Outstanding at such time, would
exceed the Letter of Credit Commitment then in effect; (ii) no Letter of
Credit shall be issued the Dollar Equivalent of the Stated Amount of which
would cause (A) the aggregate amount of the Lenders’ Revolving Credit
Exposures at such time to exceed the Total Revolving Credit Commitment then in
effect or (B) the aggregate amount of the Lenders’ Extended Revolving
Credit Exposures at such time to exceed the Total Extended Revolving Credit
Commitment then in effect; (iii) each Letter of Credit shall have an
expiration date occurring no later than one year after the date of issuance
thereof, unless otherwise agreed upon by the Administrative Agent and the
Letter of Credit Issuer; provided, that any Letter of Credit may, upon
request of the US Borrower or the UK Borrower, as the case may be, provide for
the automatic renewal thereof for additional consecutive periods of one year or
less (which in no event shall extend beyond the L/C Maturity Date), subject to
any conditions specified in such Letter of Credit; and provided  further,
that in no event shall such expiration date occur later than the
L/C Maturity Date; (iv) each Letter of Credit shall be denominated in
Dollars or in a Foreign Currency; (v) no Letter of Credit shall be issued
if it would be illegal under any applicable law for the beneficiary of the Letter
of Credit to have a Letter of Credit issued in its favor; and (vi) no
Letter of Credit shall be issued by the Letter of Credit Issuer after it has
received a written notice from the US Borrower, the UK Borrower or any Lender
stating that a Default or Event of Default has occurred and is continuing until
such time as the Letter of Credit Issuer shall have received a written notice
of (x) rescission of such notice from the party or parties originally
delivering such notice or (y) the waiver of such Default or Event of
Default in accordance with the provisions of Section 14.1.

 

(c)  Upon at least one Business Day’s
prior written notice (or telephonic notice promptly confirmed in writing) to
the Administrative Agent and the Letter of Credit Issuer (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the US
Borrower (on its own behalf and on behalf of the UK Borrower) shall have the
right, on any day, permanently to terminate or reduce the Letter of Credit
Commitment in whole or in part; provided, that, after giving effect to
such termination or reduction, the Letter of Credit Outstanding shall not
exceed the Letter of Credit Commitment.

 

3.2.          Letter of Credit Requests.  (a)   
Whenever the US Borrower or the UK Borrower desires that a Letter of
Credit be issued for its account, it shall give the Administrative Agent and
the Letter of Credit Issuer at least five (or such lesser number as may be
agreed upon by the Administrative Agent and the Letter of Credit Issuer) 

 

89

 

Business
Days’ written notice thereof.  Each
notice shall be executed by the US Borrower or the UK Borrower, as the case may
be, and shall be in the form of Exhibit N (each a “Letter of Credit
Request”). The Administrative Agent shall promptly notify each Lender of
such issuance.

 

(b)  The making of each Letter of Credit
Request shall be deemed to be a representation and warranty by the US Borrower
or the UK Borrower, as the case may be, that the Letter of Credit may be issued
in accordance with, and will not violate the requirements of, Section 3.1(b).

 

3.3.          Letter of Credit
Participations.  (a)    Immediately upon the issuance by the Letter
of Credit Issuer of any Letter of Credit, the Letter of Credit Issuer shall be
deemed to have sold and transferred to each other Lender that has a Revolving
Credit Commitment or an Extended Revolving Credit Commitment, as applicable
(each such other Lender, in its capacity under this Section 3.3, an “L/C
Participant”), and each such L/C Participant shall be deemed irrevocably
and unconditionally to have purchased and received from the Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation
(each an “L/C Participation”), to the extent of such L/C Participant’s
Revolving Credit Commitment Percentage or Revolving Credit Commitment
Percentage, as applicable, in such Letter of Credit, each substitute letter of
credit, each drawing made thereunder and the obligations of the US Borrower or
the UK Borrower, as the case may be, under this Agreement with respect thereto,
and any security therefor or guaranty pertaining thereto (although Letter of
Credit Fees will be paid directly to the Administrative Agent for the ratable
account of the L/C Participants as provided in Section 4.1(c) and the
L/C Participants shall have no right to receive any portion of any Fronting
Fees).

 

(b)  In determining whether to pay under
any Letter of Credit, the Letter of Credit Issuer shall have no obligation
other than to confirm that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit.  Any action taken or omitted to be taken by
the Letter of Credit Issuer under or in connection with any Letter of Credit
issued by it, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for the Letter of Credit Issuer any resulting
liability.

 

(c)  In the event that the Letter of
Credit Issuer makes any payment under any Letter of Credit issued by it and the
US Borrower or the UK Borrower, as the case may be, shall not have repaid such
amount in full to the Letter of Credit Issuer pursuant to Section 3.4(a),
the Letter of Credit Issuer shall promptly notify the Administrative Agent who
will notify each applicable L/C Participant of such failure, and each such L/C
Participant shall promptly and unconditionally pay to the Administrative Agent,
for the account of the Letter of Credit Issuer, the amount of such L/C
Participant’s Revolving Credit Commitment Percentage or Extended Revolving
Credit Commitment Percentage, as applicable, of such unreimbursed payment in
Dollars or in the applicable Foreign Currency, as the case may be, and in
immediately available funds; provided, however, that no L/C
Participant shall be obligated to pay to the Administrative Agent for the
account of the Letter of Credit Issuer its Revolving Credit Commitment
Percentage or 

 

90

 

Extended Revolving Credit Commitment Percentage, as applicable, of such
unreimbursed amount arising from any wrongful payment made by the Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer.  If the Letter of
Credit Issuer so notifies, prior to 11:00 a.m. (Local Time) on any
Business Day, any L/C Participant required to fund a payment under a Letter of
Credit, such L/C Participant shall make available to the Administrative Agent
for the account of the Letter of Credit Issuer such L/C Participant’s Revolving
Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of the amount of such payment on such Business Day
in immediately available funds (or, if such notification is given after 11:00 a.m.
(Local Time) on any Business Day, such amount shall be made available on the
immediately following Business Day).  If
and to the extent such L/C Participant shall not have so made its Revolving
Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of the amount of such payment available to the
Administrative Agent for the account of the Letter of Credit Issuer, such L/C
Participant agrees to pay to the Administrative Agent for the account of the
Letter of Credit Issuer, forthwith on demand, such amount, together with
interest thereon for each day from such date until the date such amount is paid
to the Administrative Agent for the account of the Letter of Credit Issuer at
the Federal Funds Effective Rate.  The
failure of any L/C Participant to make available to the Administrative Agent
for the account of the Letter of Credit Issuer its Revolving Credit Commitment
Percentage or Extended Revolving Credit Commitment Percentage, as applicable,
of any payment under any Letter of Credit shall not relieve any other L/C
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of the Letter of Credit Issuer its Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, of any payment under such Letter of Credit on the date required, as
specified above, but no L/C Participant shall be responsible for the failure of
any other L/C Participant to make available to the Administrative Agent such
other L/C Participant’s Revolving Credit Commitment Percentage or Extended
Revolving Credit Commitment Percentage, as applicable, of any such payment.

 

(d)  Whenever the Letter of Credit
Issuer receives a payment in respect of an unpaid reimbursement obligation as
to which the Administrative Agent has received for the account of the Letter of
Credit Issuer any payments from the L/C Participants pursuant to paragraph (c) above,
the Letter of Credit Issuer shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay to each L/C Participant that has paid
its Revolving Credit Commitment Percentage or Extended Revolving Credit
Commitment Percentage, as applicable, of such reimbursement obligation, in
Dollars or the applicable Foreign Currency, as the case may be, and in
immediately available funds, an amount equal to such L/C Participant’s share
(based upon the proportionate aggregate amount originally funded by such L/C
Participant to the aggregate amount funded by all L/C Participants) of the
principal amount of such reimbursement obligation and interest thereon accruing
after the purchase of the respective L/C Participations.

 

(e)  The obligations of the L/C
Participants to make payments to the Administrative Agent for the account of
the Letter of Credit Issuer with respect to Letters 

 

91

 

of Credit shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall
be made in accordance with the terms and conditions of this Agreement under all
circumstances, including under any of the following circumstances:

 

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

 

(ii)  the existence of any claim,
set-off, defense or other right that the US Borrower or the UK Borrower, as the
case may be, may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Letter of Credit
Issuer, any Lender or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between the US
Borrower or the UK Borrower and the beneficiary named in any such Letter of
Credit);

 

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

 

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

 

(v)  the occurrence of any Default or
Event of Default;

 

provided, however,
that no L/C Participant shall be obligated to pay to the Administrative Agent
for the account of the Letter of Credit Issuer its Revolving Credit Commitment
Percentage or Extended Revolving Credit Commitment Percentage, as applicable,
of any unreimbursed amount arising from any wrongful payment made by the Letter
of Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer.

 

3.4.          Agreement to Repay Letter of
Credit Drawings.  (a)    The US Borrower or the UK Borrower, as the
case may be, hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Administrative Agent in Dollars or in the applicable Foreign
Currency, as the case may be, in immediately available funds at the
Administrative Agent’s Office, for any payment or disbursement made by the
Letter of Credit Issuer under any Letter of Credit (each such amount (including
the Dollar Equivalent thereof) so paid until reimbursed, an “Unpaid Drawing”)
immediately after, and in any event on the date of, such payment, with interest
on the amount so paid or disbursed by the Letter of Credit Issuer, to the
extent not reimbursed prior to 5:00 p.m. (Local Time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
excluding the date the Letter of Credit Issuer is reimbursed therefor at a rate
per annum that shall at all times be the Applicable ABR Margin plus the
ABR as in effect from time to time; provided, that, notwithstanding
anything contained in this Agreement to the contrary, (i) unless the US
Borrower or the UK Borrower, as the 

 

92

 

case
may be, shall have notified the Administrative Agent and the Letter of Credit
Issuer prior to 10:00 a.m. (Local Time) on the date of such drawing that
the US Borrower or the UK Borrower, as the case may be, intends to reimburse
the Letter of Credit Issuer for the amount of such drawing with funds other
than the proceeds of Loans, the US Borrower or the UK Borrower, as the case may
be, shall be deemed to have given a Notice of Borrowing to the Administrative
Agent requesting that the Lenders make Dollar Revolving Credit Loans or Dollar
Extended Revolving Credit Loans, as applicable, (each of which shall initially
be ABR Loans) or Foreign Currency Revolving Credit Loans or Foreign Currency
Extended Revolving Credit Loans (each of which shall be Eurodollar Loans with
an Interest Period of one month denominated in Sterling or Euro), as the case
may be, on the date on which such drawing is honored in an amount equal to the
amount of such drawing and (ii) the Administrative Agent shall promptly
notify each L/C Participant of such drawing and the amount of its Revolving
Credit Loan or Extended Revolving Credit Loan, as applicable, to be made in
respect thereof, and (x) in respect of Dollar Letters of Credit, each L/C
Participant shall be irrevocably obligated to make a Dollar Revolving Credit
Loan or a Dollar Extended Revolving Credit Loan, as applicable, in each case
that is an ABR Loan to the US Borrower or the UK Borrower, as the case may be,
in the amount of its Revolving Credit Commitment Percentage or Extended
Revolving Credit Commitment Percentage, as applicable, of the applicable Unpaid
Drawing by 12:00 noon (Local Time) on such Business Day by making the amount of
such Dollar Revolving Credit Loan or Dollar Extended Revolving Credit Loan, as
applicable, available to the Administrative Agent at the Administrative Agent’s
Office and (y) in respect of Foreign Currency Letters of Credit, each L/C
Participant shall be irrevocably obligated to make a Foreign Currency Revolving
Credit Loan or a Foreign Currency Extended Revolving Credit Loan, as
applicable, in each case that is a Eurodollar Loan with an Interest Period of
one month to the US Borrower or the UK Borrower, as the case may be,
denominated in Sterling or Euro, as the case may be, in the amount of its
Revolving Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of the applicable Unpaid Drawing by 12:00 noon
(London time) on such Business Day by making the amount of such Foreign
Currency Revolving Credit Loan or Foreign Currency Extended Revolving Credit
Loan, as applicable, available to the Administrative Agent at the Administrative
Agent’s Office.  Such Dollar Revolving
Credit Loans or Dollar Extended Revolving Credit Loans, Foreign Currency
Revolving Credit Loans or Foreign Currency Extended Revolving Credit Loans, as
the case may be, shall be made without regard to the Minimum Borrowing
Amount.  The Administrative Agent shall
use the proceeds of such Revolving Credit Loans or Extended Revolving Credit
Loans, as applicable, solely for the purpose of reimbursing the Letter of
Credit Issuer for the related Unpaid Drawing.

 

(b)  The US Borrower’s and the UK
Borrower’s obligations under this Section 3.4 to reimburse the Letter of
Credit Issuer with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment that the US Borrower, the UK Borrower or any other Person may have or
have had against the Letter of Credit Issuer, the Administrative Agent or any
Lender (including in its capacity as an L/C Participant), including any defense
based upon the failure of any drawing under a Letter of Credit (each a “Drawing”)
to conform to the terms of the Letter 

 

93

 

of Credit or any non-application or misapplication by the beneficiary
of the proceeds of such Drawing; provided, that the US Borrower or the
UK Borrower, as the case may be, shall not be obligated to reimburse the Letter
of Credit Issuer for any wrongful payment made by the Letter of Credit Issuer
under the Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter
of Credit Issuer.

 

3.5.          Increased Costs.  If after the Funding Date, the adoption of
any applicable law, rule or regulation, or any change therein, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or actual compliance by the Letter of Credit Issuer or
any L/C Participant with any request or directive made or adopted after the
Funding Date (whether or not having the force of law), by any such authority,
central bank or comparable agency shall either (a) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against letters of credit issued by the Letter of Credit Issuer, or any L/C
Participant’s L/C Participation therein, or (b) impose on the Letter of
Credit Issuer or any L/C Participant any other conditions affecting its
obligations under this Agreement in respect of Letters of Credit or L/C
Participations therein or any Letter of Credit or such L/C Participant’s L/C
Participation therein, and the result of any of the foregoing is to increase
the cost to the Letter of Credit Issuer or such L/C Participant of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount
of any sum received or receivable by the Letter of Credit Issuer or such L/C
Participant hereunder (other than any such increase or reduction attributable
to taxes) in respect of Letters of Credit or L/C Participations therein, then,
promptly after receipt of written demand to the US Borrower or the UK Borrower,
as the case may be, by the Letter of Credit Issuer or such L/C Participant, as
the case may be, (a copy of which notice shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent), the US Borrower or
the UK Borrower, as the case may be, shall pay to the Letter of Credit Issuer
or such L/C Participant such additional amount or amounts as will compensate
the Letter of Credit Issuer or such L/C Participant for such increased cost or
reduction, it being understood and agreed, however, that the Letter of Credit
Issuer or an L/C Participant shall not be entitled to such compensation as a
result of such Person’s compliance with, or pursuant to any request or
directive to comply with, any such law, rule or regulation as in effect on
the Funding Date.  A certificate
submitted to the US Borrower or the UK Borrower, as the case may be, by the
Letter of Credit Issuer or a L/C Participant, as the case may be, (a copy
of which certificate shall be sent by the Letter of Credit Issuer or such
L/C Participant to the Administrative Agent) setting forth in reasonable
detail the basis for the determination of such additional amount or amounts
necessary to compensate the Letter of Credit Issuer or such L/C Participant as
aforesaid shall be conclusive and binding on the US Borrower and the UK
Borrower absent clearly demonstrable error.

 

3.6.          Successor Letter of Credit
Issuer.  The Letter of Credit Issuer
may resign as Letter of Credit Issuer upon 60 days’ prior written notice to the
Administrative Agent, the Lenders and the US Borrower.  If the Letter of Credit Issuer shall resign
as Letter of Credit Issuer under this Agreement, then the US Borrower shall
appoint from among the Lenders with Extended Revolving Credit Commitments a
successor issuer of 

 

94

 

Letters
of Credit, whereupon such successor issuer shall succeed to the rights, powers
and duties of the Letter of Credit Issuer, and the term “Letter of Credit
Issuer” shall mean such successor issuer effective upon such appointment.  At the time such resignation shall become
effective, the US Borrower and the UK Borrower shall pay to the resigning
Letter of Credit Issuer all accrued and unpaid fees pursuant to
Sections 4.1(d) and (e).  The
acceptance of any appointment as the Letter of Credit Issuer hereunder by a
successor Lender shall be evidenced by an agreement entered into by such
successor, in a form satisfactory to the US Borrower and the Administrative
Agent and, from and after the effective date of such agreement, such successor
Lender shall have all the rights and obligations of the previous Letter of
Credit Issuer under this Agreement and the other Credit Documents.  After the resignation of the Letter of Credit
Issuer hereunder, the resigning Letter of Credit Issuer shall remain a party
hereto and shall continue to have all the rights and obligations of a Letter of
Credit Issuer under this Agreement and the other Loan Documents with respect to
Letters of Credit issued by it prior to such resignation, but shall not be required
to issue additional Letters of Credit. 
After any retiring Letter of Credit Issuer’s resignation as Letter of
Credit Issuer, the provisions of this Agreement relating to the Letter of
Credit Issuer shall inure to its benefit as to any actions taken or omitted to
be taken by it (a) while it was Letter of Credit Issuer under this
Agreement or (b) at any time with respect to Letters of Credit issued by
such Letter of Credit Issuer.

 

3.7.          Defaulting Lenders and
Letters of Credit.  If any
Letter of Credit Exposure exists at the time a Lender becomes a Defaulting
Lender, then:

 

(a)  all or any part of such Letter of
Credit Exposure shall be reallocated among the non-Defaulting Lenders in
accordance with their respective Extended Revolving Credit Commitment Percentage
but only to the extent (x) the sum of all non-Defaulting Lenders’ Extended
Revolving Credit Exposures plus such Defaulting Lender’s Letter of
Credit Exposure does not exceed the total of all non-Defaulting Lenders’
Extended Revolving Credit Commitments and (y) no Default or Event of
Default exists and is continuing;

 

(b)  if the reallocation described in
clause (a) above cannot, or can only partially, be effected, the US
Borrower shall within one Business Day following notice by the Administrative Agent
cash collateralize such Defaulting Lender’s Letter of Credit Exposure (after
giving effect to any partial reallocation pursuant to clause (a) above) in
accordance with the procedures set forth in Section 5.2(b) for so
long as such Letter of Credit Exposure is outstanding;

 

(c)  if the US Borrower cash
collateralizes any portion of such Defaulting Lender’s Letter of Credit
Exposure pursuant to Section 3.7(b), the US Borrower shall not be required
to pay any fees to such Defaulting Lender with respect to such Defaulting
Lender’s Letter of Credit Exposure during the period such Defaulting Lender’s
Letter of Credit Exposure is cash collateralized;

 

(d)  if the Letter of Credit Exposure of
the non-Defaulting Lenders is reallocated pursuant to Section 3.7(a), then
the fees payable to the Lenders pursuant to 

 

95

 

Sections 4.1(c) or (d) shall be adjusted in accordance with
such non-Defaulting Lenders’ Extended Revolving Credit Commitment Percentages;
or

 

(e)  if any Defaulting Lender’s LC
Exposure is neither cash collateralized nor reallocated pursuant to Section 3.7(a),
then, without prejudice to any rights or remedies of the Letter of Credit
Issuer or any Lender hereunder, all facility fees that otherwise would have
been payable to such Defaulting Lender (solely with respect to the portion of
such Defaulting Lender’s Commitment that was utilized by such LC Exposure) and
Letter of Credit Fees payable under Sections 4.1(c) or (d) with
respect to such Defaulting Lender’s Letter of Credit Exposure shall be payable
to the Letter of Credit Issuer until such Letter of Credit Exposure is cash
collateralized and/or reallocated.

 

So long as any Lender is a Defaulting Lender, the
Issuing Bank shall not be required to issue, amend or increase any Letter of
Credit, unless it is reasonably satisfied that the related exposure will be
100% covered by the Commitments of the non-Defaulting Lenders and/or cash
collateral will be provided by the Borrower in accordance with Section 3.7(c).

 

SECTION 4.       Fees; Commitments

 

4.1.          Fees.  (a)   
The US Borrower (on behalf of itself and the UK Borrower) agrees to pay
to the Administrative Agent in Dollars, for the account of each Lender having a
Revolving Credit Commitment (in each case pro  rata according to
the respective Revolving Credit Commitments of all such Lenders), a commitment
fee for each day from and including the Funding Date to but excluding the Final
Date.  Such commitment fee shall be
payable in arrears (i) on the last day of each March, June, September and
December (for the three-month period (or portion thereof) ended on such
day for which no payment has been received) and (ii) on the Final Date
(for the period ended on such date for which no payment has been received
pursuant to clause (i) above), and shall be computed for each day
during such period at a rate per annum equal to the Commitment Fee Rate in
effect on such day on the Available Commitments in effect on such day.  In addition, the US Borrower (on behalf of
itself and the UK Borrower) agrees to pay to the Administrative Agent in Euro,
for the account of each Lender having a Tranche A Term Loan Commitment (in each
case pro  rata according to the respective Tranche A Term Loan
Commitments of all such Lenders), a commitment fee for each day from and
including the Funding Date to but excluding the earlier of September 30,
2004 and the date of any Borrowing of Tranche A-1 Term Loans or Tranche A-2
Term Loans pursuant to Section 2.1(a)(iii).  Such commitment fee shall be payable in
arrears on the earlier of September 30, 2004 and the date of any Borrowing
of Tranche A-1 Term Loans or Tranche A-2 Term Loans pursuant to Section 2.1(a)(iii),
and shall be computed for each day during such period at a rate per annum equal
to 0.50% on the Available Tranche A Commitment in effect on such day.  Notwithstanding the foregoing, the US
Borrower shall not be obligated to pay any amounts to any Defaulting Lender
pursuant to this Section 4.1.

 

(b)  The US Borrower (on behalf of
itself and the UK Borrower) agrees to pay to the Administrative Agent in
Dollars, for the account of each Lender having an 

 

96

 

Extended Revolving Credit Commitment (in each case pro rata according to the respective Extended Revolving Credit
Commitments of all such Lenders), a commitment fee for each day from and
including the Restatement Date to but excluding the Final Extended Date.  Such commitment fee shall be payable in
arrears (i) on the last day of each March, June, September and December (for
the three-month period (or portion thereof) ended on such day for which no
payment has been received) and (ii) on the Final Extended Date (for the
period ended on such date for which no payment has been received pursuant to
clause (i) above), and shall be computed for each day during such period
at a rate per annum equal to the Extended Commitment Fee Rate on the Available
Extended Commitments in effect on such day. 
Notwithstanding the foregoing, the US Borrower shall not be obligated to
pay any amounts to any Defaulting Lender pursuant to this Section 4.1.

 

(c)  The US Borrower (on behalf of
itself and the UK Borrower) agrees to pay to the Administrative Agent in
Dollars for the account of the Lenders pro  rata on the basis of
their respective Letter of Credit Exposure, a fee in respect of each Letter of
Credit (the “Letter of Credit Fee”), for the period from and including
the date of issuance of such Letter of Credit to but excluding the termination
date of such Letter of Credit computed at the per annum rate for each day equal
to the Applicable Eurodollar Margin for Extended Revolving Credit Loans, or
with respect to Letters of Credit issued under the Revolving Credit
Commitments, the Applicable Eurodollar Margin for Revolving Credit Loans, in
each case, minus 0.125% per annum on the average daily Stated Amount of
such Letter of Credit.  Such Letter of
Credit Fees shall be due and payable quarterly in arrears on the last day of
each March, June, September and December and on the date upon which
the Total Extended Revolving Credit Commitment terminates and the Letter of
Credit Outstandings shall have been reduced to zero.

 

(d)  The US Borrower (on behalf of
itself and the UK Borrower) agrees to pay to the Administrative Agent in Dollars
for the account of the Letter of Credit Issuer a fee in respect of each Letter
of Credit issued by it (the “Fronting Fee”), for the period from and
including the date of issuance of such Letter of Credit to but excluding the
termination date of such Letter of Credit, computed at the rate for each day
equal to 0.125% per annum on the average daily Stated Amount of such Letter of
Credit.  Such Fronting Fees shall be due
and payable quarterly in arrears on the last day of each March, June, September and
December and on the date upon which the Total Extended Revolving Credit
Commitment terminates and the Letter of Credit Outstandings shall have been
reduced to zero.

 

(e)  The US Borrower (on behalf of
itself and the UK Borrower) agrees to pay directly to the Letter of Credit
Issuer in Dollars upon each issuance of, drawing under, and/or amendment of, a
Letter of Credit issued by it such amount as the Letter of Credit Issuer and
the US Borrower shall have agreed upon for issuances of, drawings under or
amendments of, letters of credit issued by it.

 

4.2.          Voluntary Reduction of
Revolving Credit Commitments and Extended Revolving Credit Commitments.  Upon at least one Business Day’s prior
written notice (or telephonic notice promptly confirmed in writing) to the Administrative

 

97

 

Agent
at the Administrative Agent’s Office (which notice the Administrative Agent
shall promptly transmit to each of the Lenders), the US Borrower (on behalf of
itself and the UK Borrower) shall have the right, without premium or penalty,
on any day, permanently to terminate or reduce (i) the Revolving Credit
Commitments and/or the Foreign Currency Revolving Commitments in whole or in
part; provided, that (a) any such reduction shall apply
proportionately and permanently to reduce the Revolving Credit Commitment or
the Foreign Currency Revolving Commitment, as the case may be, of each of the
Lenders, (b) any partial reduction pursuant to this Section 4.2 shall
be in the amount of at least the Dollar Equivalent of $1,000,000 and in
integral multiples of the Dollar Equivalent of $100,000 and (c) after
giving effect to such termination or reduction and to any prepayments of the
Loans made on the date thereof in accordance with this Agreement, the aggregate
amount of the Lenders’ Revolving Credit Exposures shall not exceed the Total
Revolving Credit Commitment or (ii) the Extended Revolving Credit
Commitments and/or the Foreign Currency Extended Revolving Commitments in whole
or in part; provided, that (a) any such reduction shall apply
proportionately and permanently to reduce the Extended Revolving Credit
Commitment or the Foreign Currency Extended Revolving Commitment, as the case
may be, of each of the Lenders, (b) any partial reduction pursuant to this
Section 4.2 shall be in the amount of at least the Dollar Equivalent of
$1,000,000 and in integral multiples of the Dollar Equivalent of $100,000 and (c) after
giving effect to such termination or reduction and to any prepayments of the
Loans made on the date thereof in accordance with this Agreement, the aggregate
amount of the Lenders’ Extended Revolving Credit Exposures shall not exceed the
Total Extended Revolving Credit Commitment.

 

4.3.          Mandatory Termination of
Commitments.  (a)    €167,630,542.28 of the Tranche A Term Loan
Commitments shall terminate at 5:00 p.m. (New York time) on the Funding
Date.  €41,907,635.58 of the Tranche A
Term Loan Commitments shall terminate at 5:00 p.m. (New York time) on September 30,
2004. All of the Tranche E Term Loan Commitments shall terminate at 5:00 p.m.
(New York time) on the Third Amendment Effective Date.  All of the Tranche G Term Loan Commitments
shall terminate at 5:00 p.m. (New York time) on the Fourth Amendment
Effective Date.  All of the Tranche H
Term Loan Commitments shall terminate at 5:00 p.m. (New York time) on the
Restatement Date.  All of the Tranche I
Term Loan Commitments shall terminate at 5:00 p.m. (New York time) on the
Restatement Date.

 

(b)  The Total Revolving Credit Commitment,
including the Total Foreign Currency Revolving Commitment, shall terminate at
5:00 p.m. (New York time) on the Revolving Credit Maturity Date.

 

(c)  The Total Extended Revolving Credit
Commitment, including the Total Foreign Currency Extended Revolving Commitment,
shall terminate at 5:00 p.m. (New York time) on the Extended
Revolving Credit Maturity Date.

 

(d)  The Swingline Commitment shall
terminate at 5:00 p.m. (New York time) on the Swingline Maturity Date.

 

98

 

(e)  In the event, that the US Borrower
or the UK Borrower incur any Revolver Refinancing Indebtedness or Incremental
Refinancing Revolving Credit Commitments, the portion of the Revolving Credit
Commitments or Extended Revolving Credit Commitments, as applicable,
permanently refinanced with such Revolver Refinancing Indebtedness or such
Incremental Refinancing Revolving Credit Commitments shall be reduced by the
amount of the new Revolver Refinancing Indebtedness or the new Incremental
Refinancing Revolving Credit Commitments.

 

SECTION 5.           Payments

 

5.1.          Voluntary Prepayments.  The US Borrower and the UK Borrower shall
have the right to prepay Term Loans, Revolving Credit Loans, Extended Revolving
Credit Loans and Swingline Loans, without premium or penalty, in whole or in
part from time to time on the following terms and conditions: (a) the US
Borrower (on its own behalf and on behalf of the UK Borrower) shall give the
Administrative Agent at the Administrative Agent’s Office (or, in the case of a
Swingline Loan, the Swingline Lender) written notice (or telephonic notice
promptly confirmed in writing) of its intent to make such prepayment, the
amount of such prepayment and (in the case of Eurodollar Term Loans, Eurodollar
Revolving Credit Loans and Eurodollar Extended Revolving Credit Loans) the
specific Borrowing(s) pursuant to which such prepayment shall be applied,
which notice shall be given by the US Borrower no later than (i) in the
case of Term Loans, Revolving Credit Loans or Extended Revolving Credit Loans,
10:00 a.m. (Local Time) one Business Day prior to, or (ii) in the
case of Swingline Loans, 10:00 a.m. (Local Time) on, the date of such
prepayment and shall promptly be transmitted by the Administrative Agent to
each of the Lenders or the Swingline Lender, as the case may be; (b) each
partial prepayment of any Borrowing of Term Loans, Revolving Credit Loans or
Extended Revolving Credit Loans shall be in a multiple of the Dollar Equivalent
of $100,000 and in an aggregate principal amount of the Dollar Equivalent of at
least $1,000,000 and each partial prepayment of Swingline Loans shall be in a
multiple of the Dollar Equivalent of $100,000 and in an aggregate principal
amount of at least the Dollar Equivalent of $100,000; provided, that no
partial prepayment of Eurodollar Term Loans, Eurodollar Revolving Credit Loans
or Eurodollar Extended Revolving Credit Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Term Loans, Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans made
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
for Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar
Extended Revolving Credit Loans; and (c) any prepayment of Eurodollar Term
Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving
Credit Loans pursuant to this Section 5.1 on any day other than the last
day of an Interest Period applicable thereto shall be subject to compliance by
the US Borrower or the UK Borrower, as the case may be, with the applicable
provisions of Section 2.11.  Each
prepayment in respect of any tranche of Term Loans pursuant to this Section 5.1
shall be (a) applied to Tranche A-1 Term Loans, Tranche A-2 Term
Loans, Tranche E Term Loans, Tranche G Term Loans, Tranche H Term Loans or
Tranche I Term Loans in such manner as the US Borrower (on its own behalf and
on behalf of the UK Borrower) may determine and (b) applied to reduce
Tranche A-1 Repayment Amounts, Tranche A-2 Repayment Amounts, Tranche E
Repayment Amounts, Tranche G Repayment Amounts,

 

99

 

Tranche H Repayment Amounts
or Tranche I Repayment Amounts in such order as the US Borrower (on its own
behalf and on behalf of the UK Borrower) may determine; provided, however,
that any prepayment pursuant to this Section 5.1 made prior to July 30,
2011 in respect of (i) Tranche E Term Loans or Tranche H Term Loans shall
be applied on a pro  rata basis collectively to both such tranches
and (ii) Tranche G Term Loans or Tranche I Term Loans shall be applied on
a pro  rata basis collectively to both such tranches; provided
further, that with respect to any prepayment of Term Loans pursuant to
this Section 5.1 made with the Net Cash Proceeds from any incurrence of
Indebtedness pursuant to clause (ii) of Section 10.1(n) which
are not required to be applied in accordance with Section 5.2, the US
Borrower (on its own behalf and on the behalf of the UK Borrower) may apply
such proceeds, at its election, to the Tranche A-1 Term Loans, the Tranche A-2
Term Loans, the Tranche E Term Loans and/or the Tranche G Term Loans in such
manner as it may determine and, following the repayment of the Tranche A-1 Term
Loans, the Tranche A-2 Term Loans, the Tranche E Term Loans and the Tranche G
Term Loans in full, in such manner as it may determine.  At the US Borrower’s election (on its own
behalf and on behalf of the UK Borrower) in connection with any prepayment
pursuant to this Section 5.1, such prepayment shall not be applied to any
Term Loan, Revolving Credit Loan or Extended Revolving Credit Loan of a
Defaulting Lender.  All voluntary
prepayments of all but not less than all of the Tranche H Term Loans and/or the
Tranche I Term Loans effected on or prior to the first anniversary of the
Restatement Date with the proceeds of a substantially concurrent issuance or
incurrence of new bank loans which (x) are incurred for the primary
purpose of refinancing the Tranche H Term Loans or Tranche I Term Loans, as the
case may be, and decreasing the Applicable ABR Margin or Applicable Eurodollar
Margin with respect thereto, (y) otherwise have terms and conditions (and
are in an aggregate principal amount) substantially the same as those of the
Tranche H Term Loans or Tranche I Term Loans, as the case may be, as in effect
prior to the prepayment thereof and (z) are not otherwise in connection
with a transaction and any transactions related thereto not permitted by this
Agreement (as determined prior to giving effect to any amendment or waiver of
this Agreement being adopted in connection with such transaction and related
transactions), shall be accompanied by a prepayment fee equal to 1.00% of the
aggregate principal amount of such prepayment.

 

5.2.          Mandatory Prepayments.  (a)    Term Loan Prepayments.  (i) 
On each occasion that a Prepayment Event occurs, the US Borrower and the UK
Borrower shall, within five Business Days after the occurrence of such
Prepayment Event, offer to prepay, in accordance with paragraph (c) below,
the principal amount of Term Loans in an amount equal to 100% of the Net Cash
Proceeds from such Prepayment Event; provided that if such Prepayment
Event is a Debt Incurrence Prepayment Event arising pursuant to clause (ii) of
Section 10.1(n), a prepayment pursuant to this Section 5.2(a)(i) shall
only be required from and after such time as there is $250,000,000 of
Indebtedness outstanding under such clause and such prepayment shall be in an
amount equal to 50% of the Net Cash Proceeds from such Prepayment Event.  For avoidance of doubt, no prepayment shall
be required pursuant to this Section 5.2(a)(i) for any Prepayment
Events that have occurred prior to the Fourth Amendment Effectiveness Date. 

 

100

 

(ii)  Not later than the date that is
six months after the last day of any fiscal year (commencing with the fiscal
year ending December 31, 2004), if the Consolidated Total Debt to
Consolidated EBITDA Ratio as of the end of such fiscal year is greater than or
equal to 3.50 to 1.00, the US Borrower and the UK Borrower shall offer to
prepay, in accordance with paragraph (c) below, the principal of Term
Loans in an amount equal to (w) 50% of Excess Cash Flow for such fiscal
year, minus (x) the amount of any such Excess Cash
Flow that the US Borrower has, after the end of such fiscal year and prior to
such date, reinvested in the business of the US Borrower or any of its
Subsidiaries (subject to Section 9.14), minus
(y) the principal amount of Term Loans voluntarily prepaid pursuant to Section 5.1
during such fiscal year and minus (z) an amount equal to
$10,000,000 for such fiscal year.

 

(b)  Aggregate Revolving Credit
Outstandings and Aggregate Extended Revolving Credit Outstandings.  If on any date the aggregate amount of the
Lenders’ Revolving Credit Exposures (all the foregoing, collectively, the “Aggregate
Revolving Credit Outstandings”) exceeds 103% of the Total Revolving Credit
Commitment as then in effect or the aggregate amount of the Lenders’ Extended
Revolving Credit Exposures (all the foregoing, collectively, the “Aggregate
Extended Revolving Credit Outstandings”) exceeds 103% of the Total Extended
Revolving Credit Commitment as then in effect, the US Borrower and/or the UK
Borrower, as the case may be, shall forthwith repay on such date the principal
amount of Swingline Loans and, after all Swingline Loans have been paid in
full, Revolving Credit Loans or Extended Revolving Credit Loans, as applicable,
in an amount equal to such excess.  If,
after giving effect to the prepayment of all outstanding Swingline Loans and
Revolving Credit Loans or Extended Revolving Credit Loans, as applicable, the
Aggregate Revolving Credit Outstandings exceed the Total Revolving Credit
Commitment then in effect or the Aggregate Extended Revolving Credit
Outstandings exceed the Total Extended Revolving Credit Commitment then in
effect, as applicable, the US Borrower and/or the UK Borrower, as the case may
be, shall pay to the Administrative Agent an amount in cash equal to such excess
and the Administrative Agent shall hold such payment for the benefit of the
Lenders as security for the obligations of the US Borrower and the UK Borrower
hereunder (including obligations in respect of Letter of Credit Outstandings)
pursuant to a cash collateral agreement to be entered into in form and
substance satisfactory to the Administrative Agent (which shall permit certain
investments in Permitted Investments satisfactory to the Administrative Agent,
until the proceeds are applied to the secured obligations).

 

(c)  Application to Repayment Amounts.  Each prepayment of Term Loans required by Section 5.2(a) shall
(unless otherwise indicated below) be initially allocated pro  rata
among the Tranche A-1 Term Loans, the Tranche A-2 Term Loans, the Tranche
E Term Loans, the Tranche G Term Loans, the Tranche H Term Loans and the
Tranche I Term Loans and each such prepayment of Term Loans (including those
prepayments described below) shall be applied to reduce the applicable
Repayment Amounts in such order as the US Borrower (on its own behalf and on
behalf of the UK Borrower) may determine up to an amount equal to the aggregate
amount of the applicable Repayment Amounts required to be made by the US
Borrower or the UK Borrower pursuant to Section 2.5(b)(i), (ii), (iii),
(iv), (v) or (vi), as the case may be, during the two year period

 

101

 

immediately
following the date of the prepayment (such amount being, the “Amortization
Amount”); provided, that to the extent that the amount of the
prepayment exceeds the Amortization Amount, such excess shall be applied
ratably to reduce the then remaining Repayment Amounts under such Term
Facility; provided  further, that, notwithstanding anything to the
contrary contained herein, with respect to any prepayment of Term Loans
required by Section 5.2(a) that results from a Debt Incurrence
Prepayment Event in respect of any incurrence of Incremental Refinancing Term
Loans pursuant to Section 2.15, any incurrence of Indebtedness pursuant to
clause (ii) of Section 10.1(n) and any incurrence of
Indebtedness pursuant to Section 10.1(q), such prepayment shall be
initially allocated pro  rata among the Tranche A-1 Term Loans,
the Tranche A-2 Term Loans, the Tranche E Term Loans and the Tranche G Term
Loans until such time as all such Term Loans have been repaid in full and,
other than with respect to a Debt Incurrence Prepayment Event in respect of any
incurrence of Indebtedness pursuant to Section 10.1(q), thereafter, pro
rata among the remaining Term Loans. 
With respect to each such prepayment, (i) the US Borrower (on its
own behalf and on behalf of the UK Borrower) will, not later than the date
specified in Section 5.2(a) for offering to make such prepayment,
give the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent provide notice of such prepayment to
each Term Loan Lender, (ii) each Tranche E Term Loan Lender, each Tranche
G Term Loan Lender, each Tranche H Term Loan Lender and each Tranche I Term
Loan Lender will have the right to refuse any such prepayment by giving written
notice of such refusal to the Administrative Agent within fifteen Business Days
after such Lender’s receipt of notice from the Administrative Agent of such
prepayment (and the US Borrower and the UK Borrower shall not prepay any such
Tranche E Term Loans, Tranche G Term Loan, Tranche H Term Loans and Tranche I
Term Loans until the date that is specified in the immediately following
clause), (iii) the US Borrower and the UK Borrower will make all such
prepayments not so refused upon the earlier of (x) such fifteenth Business
Day and (y) such time as the Administrative Agent has received notice from
each Lender that it consents to or refuses such prepayment and (iv) any
prepayment so refused may be retained by the US Borrower or the UK Borrower, as
the case may be; provided, that any prepayment so refused that relates
to Net Cash Proceeds from a Debt Incurrence Prepayment Event in respect of the
issuance of Permitted Additional Subordinated Notes shall be allocated pro
rata to the then outstanding Tranche A-1 Term Loans and Tranche A-2
Term Loans and shall be applied as set forth above in this paragraph (c).

 

(d)  Application to Term Loans.  With
respect to each prepayment of Term Loans required by Section 5.2(a), the
US Borrower (on its own behalf and on behalf of the UK Borrower) may, subject
to Section 5.2(c), designate the Types of Loans that are to be prepaid and
the specific Borrowing(s) pursuant to which made; provided, that (i) Eurodollar
Term Loans may be designated for prepayment pursuant to this Section 5.2
only on the last day of an Interest Period applicable thereto unless all
Eurodollar Term Loans with Interest Periods ending on such date of required
prepayment and all Term Loans that are ABR Loans have been paid in full; (ii) if
any prepayment of Eurodollar Term Loans made pursuant to a single Borrowing
shall reduce the outstanding Term Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Eurodollar Term Loans, such
Borrowing shall immediately be converted into ABR Loans; and (iii) in the
case of a prepayment of Tranche E Term Loans or Tranche G

 

102

 

Term Loans required by Section 5.2(a), the prepayment amount shall
be applied on a pro  rata basis to the then outstanding Loans of
the applicable Class, regardless of Type and, in the case of Eurodollar Term
Loans of the applicable Class, the Interest Period therefor.  In the absence of a designation by the US
Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its reasonable discretion
with a view, but no obligation, to minimize breakage costs owing under Section 2.11.

 

(e)  Application to Revolving Credit
Loans and Extended Revolving Credit Loans. 
With respect to each prepayment of Revolving Credit Loans or Extended
Revolving Credit Loans elected by the US Borrower pursuant to Section 5.1
or required by Section 5.2(b), the US Borrower (on its own behalf and on
behalf of the UK Borrower) may designate (i) the Types of Loans that are
to be prepaid and the specific Borrowing(s) pursuant to which made and (ii) the
Dollar Revolving Credit Loans, Foreign Currency Revolving Credit Loans, Dollar
Extended Revolving Credit Loans or Foreign Currency Extended Revolving Credit
Loans to be prepaid; provided, that (w) Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans may be designated for
prepayment pursuant to this Section 5.2 only on the last day of an
Interest Period applicable thereto unless all Eurodollar Revolving Credit Loans
or all Eurodollar Extended Revolving Credit Loans, as applicable, with Interest
Periods ending on such date of required prepayment and all ABR Loans have been
paid in full; (x) if any prepayment by the US Borrower of Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans made
pursuant to a single Borrowing shall reduce the outstanding Dollar Equivalent
of the Revolving Credit Loans or Extended Revolving Credit Loans, as
applicable, made pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount for Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving
Credit Loans, as applicable, such Borrowing shall immediately be converted into
ABR Loans; (y) each prepayment of any Loans made pursuant to a Borrowing
shall be applied pro  rata among such Loans; and (z) notwithstanding
the provisions of the preceding clause (y), no prepayment made pursuant to Section 5.2(a) or
Section 5.2(b) of Revolving Credit Loans or Extended Revolving Credit
Loans shall be applied to the Revolving Credit Loans or Extended Revolving
Credit Loans of any Defaulting Lender. 
In the absence of a designation by the US Borrower as described in the
preceding sentence, the Administrative Agent shall, subject to the above, make
such designation in its reasonable discretion with a view, but no obligation,
to minimize breakage costs owing under Section 2.11.

 

(f)  Eurodollar Interest Periods.  In lieu of making any payment pursuant to
this Section 5.2 in respect of any Eurodollar Loan other than on the last
day of the Interest Period therefor so long as no Default or Event of Default
shall have occurred and be continuing, the US Borrower or the UK Borrower, as
the case may be, at its option may deposit with the Administrative Agent an
amount equal to the amount of the Eurodollar Loan to be prepaid and such
Eurodollar Loan shall be repaid on the last day of the Interest Period therefor
in the required amount.  Such deposit
shall be held by the Administrative Agent in a corporate time deposit account
established on terms reasonably satisfactory to the Administrative Agent,
earning interest at the then-customary rate for accounts of such type.  Such deposit shall constitute cash collateral
for the Obligations; 

 

103

 

provided, that the US Borrower or the UK Borrower, as the
case may be, may at any time direct that such deposit be applied to make the
applicable payment required pursuant to this Section 5.2.

 

(g)  Minimum Amount.  No prepayment shall be required pursuant to Section 5.2(a)(i) unless
and until the amount at any time of Net Cash Proceeds from Prepayment Events
required to be applied at or prior to such time pursuant to such Section and
not yet applied at or prior to such time to prepay Term Loans pursuant to such Section exceeds
the Dollar Equivalent of $15,000,000 in the aggregate.

 

(h)  Foreign Asset Sales.  Notwithstanding any other provisions of this Section 5.2,
(i) to the extent that any of or all the Net Cash Proceeds of any asset
sale by a Restricted Foreign Subsidiary giving rise to an Asset Sale Prepayment
Event (a “Foreign Asset Sale”) are prohibited or delayed by applicable
local law from being repatriated to the United States or the United Kingdom,
the portion of such Net Cash Proceeds so affected will not be required to be
applied to repay Term Loans at the times provided in this Section 5.2 but
may be retained by the applicable Restricted Foreign Subsidiary so long, but
only so long, as the applicable local law will not permit repatriation to the
United States or the United Kingdom (the US Borrower and the UK Borrower
hereby agreeing to cause the applicable Restricted Foreign Subsidiary to
promptly take all actions required by the applicable local law to permit such
repatriation), and once such repatriation of any of such affected Net Cash
Proceeds is permitted under the applicable local law, such repatriation will be
immediately effected and such repatriated Net Cash Proceeds will be promptly
(and in any event not later than two Business Days after such
repatriation) applied (net of additional taxes payable or reserved against as a
result thereof) to the repayment of the Term Loans pursuant to this Section 5.2
and (ii) to the extent that the US Borrower (on its own behalf and on
behalf of the UK Borrower) has determined in good faith that repatriation of
any of or all the Net Cash Proceeds of any Foreign Asset Sale would have a
material adverse tax cost consequence with respect to such Net Cash Proceeds,
the Net Cash Proceeds so affected may be retained by the applicable Restricted
Foreign Subsidiary; provided, that, in the case of this
clause (ii), on or before the date on which any Net Cash Proceeds so
retained would otherwise have been required to be applied to reinvestments or
prepayments pursuant to Section 5.2(a), (x) the US Borrower or the UK
Borrower, as the case may be, applies an amount equal to such Net Cash Proceeds
to such reinvestments or prepayments as if such Net Cash Proceeds had been
received by the US Borrower or the UK Borrower, as the case may be, rather than
such Restricted Foreign Subsidiary, less the amount of additional taxes that
would have been payable or reserved against if such Net Cash Proceeds had been
repatriated (or, if less, the Net Cash Proceeds that would be calculated if
received by such Foreign Subsidiary) or (y) such Net Cash Proceeds are
applied to the repayment of Indebtedness of a Restricted Foreign Subsidiary.

 

5.3.          Method and Place of Payment.  (a)   
Except as otherwise specifically provided herein, all payments under
this Agreement shall be made by the US Borrower or the UK Borrower, without
set-off, counterclaim or deduction of any kind, to the Administrative Agent for
the ratable account of the Lenders entitled thereto, the Letter of Credit
Issuer or the Swingline Lender, as the case may be, not later than

 

104

 

12:00 Noon
(Local Time) on the date when due and shall be made (i) in the case of
amounts payable in Dollars, in immediately available funds at the
Administrative Agent’s Office and (ii) in the case of amounts payable in a
Foreign Currency, in immediately available funds at the Administrative Agent’s
Office or at such other office as the Administrative Agent shall specify for
such purpose by notice to the Borrower, it being understood that written or
facsimile notice by the US Borrower or the UK Borrower, as the case may be, to
the Administrative Agent to make a payment from the funds in the US Borrower’s
or the UK Borrower’s, as the case may be, account at the Administrative Agent’s
Office shall constitute the making of such payment to the extent of such funds
held in such account.  All payments under
each Credit Document (whether of principal, interest or otherwise) shall be
made (i) in the case of the principal of and interest on each Loan, in the
currency in which such Loan is denominated, (ii) in the case of
reimbursement obligations in respect of Letters of Credit, in the currency in
which such Letter of Credit is denominated, (iii) in the case of any
indemnification or expense reimbursement payment, in Dollars or Euro, as
requested by the Person entitled to receive such payment, or (iv) in all
other cases, in Dollars, in each case except as otherwise expressly provided
herein.  The Administrative Agent will
thereafter cause to be distributed on the same day (if payment was actually received
by the Administrative Agent prior to 2:00 p.m. (Local Time) on such day)
like funds relating to the payment of principal or interest or Fees ratably to
the Lenders entitled thereto.

 

(b)  Any payments under this Agreement
that are made later than 2:00 p.m. (Local Time) shall be deemed to have
been made on the next succeeding Business Day at the Administrative Agent’s
discretion.  Whenever any payment to be
made hereunder shall be stated to be due on a day that is not a Business Day,
the due date thereof shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.

 

5.4.          Net Payments. 
(a)    All payments made by
the US Borrower and the UK Borrower under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any
current or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding (i) net
income taxes and franchise taxes (imposed in lieu of net income taxes) imposed
on the Administrative Agent or any Lender and (ii) any taxes imposed on
the Administrative Agent or any Lender as a result of a current or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this
Agreement).  If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) are required to be withheld from any amounts payable to the
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent necessary
to yield to the Administrative Agent or such Lender (after payment of all
Non-Excluded Taxes)

 

105

 

interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement; provided, however, that the US
Borrower shall not be required to increase any such amounts payable to any
Lender that is not organized under the laws of the United States of America or
a state thereof (a “Non-U.S. Lender”) if such Lender fails to comply
with the requirements of paragraph (b) of this Section 5.4.  Whenever any Non-Excluded Taxes are payable
by the US Borrower or the UK Borrower, as the case may be, as promptly as
possible thereafter such US Borrower or UK Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt (or other
evidence acceptable to such Lender, acting reasonably) received by such US
Borrower or the UK Borrower showing payment thereof.  In addition, if the US Borrower or the UK
Borrower, as the case may be, fails to pay any Non-Excluded Taxes when due to
the appropriate taxing authority or fails to remit to the Administrative Agent
the required receipts or other required documentary evidence, the US Borrower
or the UK Borrower, as the case may be, shall indemnify the Administrative
Agent and the Lenders for any incremental taxes, interest, costs or penalties
that may become payable by the Administrative Agent or any Lender as a result
of any such failure.  The agreements in
this Section 5.4(a) shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder.

 

(b)  Each Non-U.S. Lender shall:

 

(i)  deliver to the US Borrower and the
Administrative Agent two copies of either (x) in the case of Non-U.S.
Lender claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of “portfolio interest”,
United States Internal Revenue Service Form W-8BEN (together with a
certificate representing that such Non-U.S. Lender is not a bank for purposes
of Section 881(c) of the Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Code) of the US
Borrower and is not a controlled foreign corporation related to the US Borrower
(within the meaning of Section 864(d)(4) of the Code)), or (y) Internal
Revenue Service Form W-8BEN or Form W-8ECI, in each case properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, U.S. Federal withholding tax on payments by the US
Borrower under this Agreement;

 

(ii)  deliver to the US Borrower and the
Administrative Agent two further copies of any such form or certification (or
any applicable successor form) on or before the date that any such form or
certification expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the US
Borrower; and

 

(iii)  obtain such extensions of time
for filing and complete such forms or certifications as may reasonably be
requested by the US Borrower or the Administrative Agent;

 

unless in any such case any change in treaty,
law or regulation has occurred prior to the date on which any such delivery
would otherwise be required that renders any such form

 

106

 

inapplicable or would prevent such Lender
from duly completing and delivering any such form with respect to it and such
Lender so advises the US Borrower and the Administrative Agent.  Each Person that shall become a Participant pursuant
to Section 14.6 or a Lender pursuant to Section 14.6 shall, upon the
effectiveness of the related transfer, be required to provide all the forms and
statements required pursuant to this Section 5.4(b); provided, that
in the case of a Participant such Participant shall furnish all such required
forms and statements to the Lender from which the related participation shall
have been purchased.  Notwithstanding
anything to the contrary, no Lender or Participant shall be required to deliver
any form or certification that it is not legally able to deliver.

 

(c)  The US Borrower shall not be
required to indemnify any Non-U.S. Lender, or to pay any additional amounts to
any Non-U.S. Lender, in respect of U.S. Federal withholding tax pursuant to
paragraph (a) above to the extent that (i) the obligation to
withhold amounts with respect to U.S. Federal withholding tax existed on the
date such Non-U.S. Lender became a party to this Agreement (or, in the case of
a Participant that is not organized under the laws of the United States of
America or a state thereof (a “Non-U.S. Participant”), on the date such
Non-U.S. Participant became a Participant hereunder); provided, however,
that this clause (i) shall not apply to the extent that (x) the
indemnity payments or additional amounts any Lender (or Participant) would be
entitled to receive (without regard to this clause (i)) do not exceed the
indemnity payment or additional amounts that the person making the assignment,
participation or transfer to such Lender (or Participant) would have been
entitled to receive in the absence of such assignment, participation or
transfer, or (y) such assignment, participation or transfer had been
requested by the US Borrower or the UK Borrower, (ii) the obligation to
pay such additional amounts would not have arisen but for a failure by such Non
U.S. Lender or Non U.S. Participant to comply with the provisions of paragraph (b) above
or (iii) any of the representations or certifications made by a Non-U.S.
Lender or Non-U.S. Participant pursuant to paragraph (b) above are incorrect
at the time a payment hereunder is made, other than by reason of any change in
treaty, law or regulation having effect after the date such representations or
certifications were made.

 

(d)  Where a Lender is not, or has
ceased to be, an Eligible Lender on the due date for payment of any sum under
this Agreement, the increased amount due under Section 5.4(a) hereof
shall be limited to the amount the UK Borrower would have had to pay if:

 

(i)  where that Lender had been a UK
Lender before ceasing to be an Eligible Lender, the Lender had remained a UK
Lender;

 

(ii)  where that Lender had been a
Treaty Lender before ceasing to be an Eligible Lender, the Lender had remained
a Treaty Lender and an appropriate direction had been given by the United
Kingdom Inland Revenue authorizing the UK Borrower to make payment with
deduction of tax at a reduced rate in accordance with the provisions of the
relevant double taxation agreement; or

 

107

 

(iii)  where that Lender had not been a
Eligible Lender, the Lender had been a UK Lender;

 

this Section 5.4(d) shall not apply
to the extent that the UK Borrower would have been required to make a deduction
or withholding on account of tax regardless of whether such Lender is an Eligible
Lender.

 

This Section 5.4(d) shall not apply
in circumstances where a Lender ceases to be an Eligible Lender due to a change
in the Requirement of Law or double taxation treaty or in its application or
interpretation, in each case taking effect after the Funding Date.

 

(e)  If the US Borrower or the UK
Borrower determines in good faith that a reasonable basis exists for contesting
any taxes for which indemnification has been demanded hereunder, the relevant
Lender or the Administrative Agent, as applicable, shall cooperate with such US
Borrower or UK Borrower in challenging such taxes at such US Borrower’s or UK
Borrower’s expense if so requested by such US Borrower or UK Borrower.  If any Lender or the Administrative Agent, as
applicable, receives a refund of a tax for which a payment has been made by the
US Borrower or the UK Borrower pursuant to this Agreement, which refund in the
good faith judgment of such Lender or Administrative Agent, as the case may be,
is attributable to such payment made by such US Borrower or UK Borrower, then
the Lender or the Administrative Agent, as the case may be, shall reimburse
such US Borrower or UK Borrower for such amount (together with any interest
received thereon) as the Lender or Administrative Agent, as the case may be,
determines to be the proportion of the refund as will leave it, after such
reimbursement, in no better or worse position than it would have been in if the
payment had not been required.  A Lender
or Administrative Agent shall claim any refund that it determines is available
to it, unless it concludes in its reasonable discretion that it would be
adversely affected by making such a claim. 
Neither any Lender nor the Administrative Agent shall be obliged to disclose
any information regarding its tax affairs or computations to the US Borrower or
the UK Borrower in connection with this paragraph (e) or any other
provision of this Section 5.4.

 

(f)  Each Lender represents and agrees
that, on the Funding Date and at all times during the term of this Agreement,
it is not and will not be a conduit entity participating in a conduit financing
arrangement (as defined in Section 7701(1) of the Code and the
regulations thereunder) with respect to the Borrowings hereunder unless the US
Borrower has consented to such arrangement prior thereto.

 

5.5.          Computations of Interest and Fees.  (a)   
Interest on Eurodollar Loans and, except as provided in the next
succeeding sentence, ABR Loans shall be calculated on the basis of a 360-day
year for the actual days elapsed. 
Interest on (i) Foreign Currency Revolving Credit Loans and Foreign
Currency Extended Revolving Credit Loans denominated in Sterling and (ii) ABR
Loans in respect of which the rate of interest is calculated on the basis of
the Prime Rate and interest on overdue interest shall be calculated on the
basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed.

 

108

 

(b)  Fees and Letter of Credit
Outstanding shall be calculated on the basis of a 365- (or 366-, as the case
may be) day year for the actual days elapsed.

 

SECTION 6.           Conditions Precedent to Initial
Borrowing

 

Subject to Section 7.3 and, in the case
of Sections 6.1(e) to 6.1(w) inclusive, Sections 6.2(b) to 6.2(h) inclusive,
Sections 6.2(k) and 6.2 (l) and Sections 6.3(c) to 6.3 (k) inclusive
(unless, in the case of Section 6.3(c), the UK Borrower shall be a
borrower hereunder on the Funding Date) and Sections 6.6 to 6.8 inclusive (in
each case, to the extent they relate to the UK Borrower (unless the UK Borrower
shall be a borrower hereunder on the Funding Date) and/or any Foreign
Subsidiary Guarantor), subject to Section 9.18 (but only to the extent set
forth on Schedule 9.18), the earlier of the initial Borrowing and the initial
issuance of any Letter of Credit under this Agreement is subject to the
satisfaction of the following conditions precedent:

 

6.1.          Credit Documents. 
The Administrative Agent shall have received each of the following:

 

(a)  this Agreement, executed and delivered
by a duly authorized officer of each of Holdings, the US Borrower, the UK
Borrower and each Lender;

 

(b)  the Guarantee, executed and
delivered by a duly authorized officer of each Guarantor;

 

(c)  the Pledge Agreement, executed and
delivered by a duly authorized officer of each pledgor party thereto;

 

(d)  the Security Agreement, executed
and delivered by a duly authorized officer of each grantor party thereto;

 

(e)  a Mortgage in respect of each
Mortgaged Property, executed and delivered by a duly authorized officer of each
mortgagor party thereto;

 

(f)  the UK Guarantee, executed and
delivered by a duly authorized officer of the UK Borrower;

 

(g)  the UK Pledge Agreements, executed
and delivered by a duly authorized officer of the US Borrower;

 

(h)  the UK Debenture, executed and
delivered by a duly authorized officer of the UK Borrower;

 

(i)  the German Abstract
Acknowledgements of Indebtedness, executed and delivered by a duly authorized
officer of each guarantor party thereto;

 

(j)  the German Assignment of Claims,
executed and delivered by a duly authorized officer of each guarantor party
thereto;

 

109

 

(k)  the German Guarantee, executed and
delivered by a duly authorized officer of each guarantor party thereto;

 

(l)  the German Pledge Agreement,
executed and delivered by a duly authorized officer of each pledgor party
thereto;

 

(m)  the German Negative Pledge
Agreement, executed and delivered by a duly authorized officer of each grantor
party thereto;

 

(n)  [Reserved];

 

(o)  the Canadian Guarantee, executed
and delivered by a duly authorized officer of each guarantor party thereto;

 

(p)  the Canadian Pledge Agreements,
executed and delivered by a duly authorized officer of each pledgor party
thereto;

 

(q)  the Canadian Security Agreement,
executed and delivered by a duly authorized officer of each grantor party
thereto;

 

(r)  the French Pledge Agreements,
executed and delivered by a duly authorized officer of each pledgor party
thereto;

 

(s)  the Taiwan Pledge Agreements,
executed and delivered by a duly authorized officer of each pledgor party
thereto;

 

(t)  the Italian Guarantee, executed and
delivered by a duly authorized officer of each guarantor party thereto;

 

(u)  the Italian Share Pledge
Agreements, executed and delivered by a duly authorized officer of each pledgor
party thereto;

 

(v)  the Italian Trademark Pledge
Agreement, executed and delivered by a duly authorized officer of each pledgor
party thereto; and

 

(w)  the Luxembourg Pledge Agreements,
executed and delivered by a duly authorized officer of each pledgor party
thereto.

 

6.2.          Collateral.  (a)    All outstanding equity interests in whatever
form of the US Borrower and each Restricted Subsidiary owned by or on behalf of
any Credit Party (other than a Restricted Foreign Subsidiary) shall have been
pledged pursuant to the Pledge Agreement (except that the Restricted
Subsidiaries shall not be required to pledge more than 65% of the outstanding
equity interests of any Restricted Foreign Subsidiary) and all certificates
representing securities pledged under the Pledge Agreement, accompanied by
instruments of transfer and undated stock powers endorsed in blank, shall have
been delivered to the Collateral Escrow Agent and shall be held in escrow
pursuant to the terms of the Financing Escrow Agreement.

 

110

 

(b)  All outstanding equity interests in
whatever form of the UK Borrower shall, except to the extent pledged pursuant
to the Pledge Agreement, have been pledged pursuant to the UK Pledge Agreements
and all certificates representing securities pledged under the UK Pledge
Agreements, accompanied by instruments of transfer and undated stock powers
endorsed in blank, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(c)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the German Pledge
Agreement shall have been pledged pursuant to the German Pledge Agreement and
all certificates representing securities pledged under the German Pledge
Agreement, accompanied by instruments of transfer and undated stock powers
endorsed in blank, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(d)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the Canadian Pledge
Agreements shall have been pledged pursuant to the Canadian Pledge Agreements
and all certificates representing securities pledged under the Canadian Pledge
Agreements, accompanied by instruments of transfer and undated stock powers
endorsed in blank, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(e)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the French Pledge
Agreements shall have been pledged pursuant to the French Pledge Agreements and
all certificates representing securities pledged under the French Pledge
Agreements, accompanied by instruments of transfer and undated stock powers
endorsed in blank, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(f)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the Taiwan Pledge
Agreements shall have been pledged pursuant to the Taiwan Pledge Agreements and
all duly endorsed certificates representing securities pledged under the Taiwan
Pledge Agreements, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(g)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the Italian Share
Pledge Agreements shall have been pledged pursuant to the Italian Share Pledge
Agreements and all certificates representing securities pledged under the
Italian Share Pledge Agreements, accompanied by instruments of transfer and
undated stock powers endorsed in blank, shall have been delivered to the
Collateral Escrow Agent and shall be held in escrow pursuant to the terms of
the Financing Escrow Agreement.

 

111

 

(h)  All outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the Luxembourg Pledge
Agreements shall have been pledged pursuant to the Luxembourg Pledge Agreements
and all certificates representing securities pledged under the Luxembourg
Pledge Agreements, accompanied by instruments of transfer and undated stock
powers endorsed in blank, shall have been delivered to the Collateral Escrow
Agent and shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(i)  All Indebtedness of Holdings, the
US Borrower and each Subsidiary that is owing to any Credit Party party to the
Pledge Agreement shall be evidenced by one or more global promissory notes and
shall have been pledged pursuant to the Pledge Agreement, and all such
promissory notes, together with instruments of transfer with respect thereto
endorsed in blank, shall have been delivered to the Collateral Escrow Agent and
shall be held in escrow pursuant to the terms of the Financing Escrow
Agreement.

 

(j)  All documents and instruments,
including Uniform Commercial Code financing statements, required by law or
reasonably requested by the Administrative Agent to be filed, registered or
recorded to create the Liens intended to be created by the Security Agreement
and to perfect such Liens to the extent required by, and with the priority
required by, the Security Agreement shall have been delivered to the
Administrative Agent for filing, registration or recording pending the Closing
Date.

 

(k)  All documents and instruments
required by law or reasonably requested by the Administrative Agent to be
filed, registered or recorded to create the Liens intended to be created by
each of the Foreign Security Documents and to perfect such Liens to the extent
required by, and with the priority required by, each of the Foreign Security
Documents shall have been delivered to the Administrative Agent for filing,
registration or recording pending the Closing Date.

 

(l)  The Administrative Agent shall have
received, in respect of each Mortgaged Property owned by the US Borrower or a
US Subsidiary Guarantor a policy or policies of title insurance issued by a
nationally recognized title insurance company insuring the Lien of each
Mortgage as a valid first Lien on the Mortgaged Property described therein,
free of any other Liens except as expressly permitted by Section 10.2 (and
subject to the release on the Closing Date of the liens thereon in respect of
the Existing Credit Agreement), together with such endorsements, coinsurance
and reinsurance as the Administrative Agent may reasonably request.

 

It is understood and agreed that the pledges
described in clauses (a) through (i) inclusive of this Section 6.2
shall become effective immediately and automatically upon the occurrence of the
Closing Date, but that prior to the Closing Date, such pledges (and the Liens
created thereby) shall not be effective.

 

6.3.          Legal Opinions.  The
Administrative Agent shall have received the executed legal opinions of (a) Simpson
Thacher & Bartlett LLP, special New York counsel to the US Borrower, substantially
in the form of Exhibit O-1, (b) Tom Riordan,

 

112

 

General
Counsel to the US Borrower, substantially in the form of Exhibit O-2, (c) Latham &
Watkins LLP, English legal counsel to the Administrative Agent, substantially
in the form of Exhibit O-3, (d) Latham & Watkins LLP, German
legal counsel to the Administrative Agent, substantially in the form of Exhibit O-4,
(e) Borden
Ladner Gervais, Canadian legal counsel to the Borrower,
substantially in the form of Exhibit O-5, (f) Latham &
Watkins, LLP French legal counsel to the Administrative Agent substantially in
the form of Exhibit O-6, (g) Lee and Li, Taiwan legal counsel to
the Administrative
Agent, substantially in the form of Exhibit O-7, (h) Norton Rose Milan, Italian legal counsel
to the Administrative Agent, substantially in the form of Exhibit O-8, (i) Burness,
Scotland legal counsel to the Administrative Agent, substantially in the form
of Exhibit O-9, (j) Arendt &
Medernach, Luxembourg
legal counsel to the Administrative Agent, substantially in the form of Exhibit O-10 and (k) local
counsel to the US Borrower in each jurisdiction where a Mortgaged Property in
the United States of America is located, substantially in the form of Exhibit O-11.
 The US Borrower, the UK Borrower, the
other Credit Parties and the Administrative Agent hereby instruct such counsel
to deliver such legal opinions.

 

6.4.          Receipt of Senior Subordinated Notes and Senior
Subordinated Loan Agreement Proceeds. 
Gross proceeds of not less than $350,000,000 and Є419,076,355.71
from the issuance of the Senior Subordinated Notes under the Senior
Subordinated Notes Indenture in a public offering or in a Rule 144A or
other private placement and/or borrowings under the Senior Subordinated Loan
Agreement shall have been deposited on the Funding Date in the RSGI Dollar Debt
Escrow Account and the RSGI Euro Debt Escrow Account, respectively, to be held
by the Financing Escrow Agent pursuant to the terms of the Financing Escrow
Agreement.

 

6.5.          Equity Contributions.  The Acquisition Equity Contribution shall
have been made and the full amount of the proceeds thereof shall have been
deposited on the Funding Date in escrow accounts held by the Financing Escrow
Agent pursuant to the terms of the Financing Escrow Agreement.

 

6.6.          Closing Certificates.  The Administrative Agent shall have received
a certificate of each Credit Party (other than the Singapore Guarantors), dated
the Funding Date, substantially in the form of Exhibit P, with appropriate
insertions, executed by the President or any Vice President and the Secretary
or any Assistant Secretary of such Credit Party, and attaching the documents
referred to in Sections 6.7 and 6.8 and, where applicable, certifying as to the
incumbency and specimen signature of each officer executing any Credit Document
or any other document delivered in connection herewith on behalf of such Credit
Party.

 

6.7.          Corporate Proceedings of Each Credit Party.  The Administrative Agent shall have received
a copy of the resolutions, in form and substance satisfactory to the
Administrative Agent, of the Board of Directors (or equivalent governing body)
of each Credit Party (or a duly authorized committee thereof) authorizing (a) the
execution, delivery and performance of the Credit Documents (and any agreements
relating thereto) to which it is a party, (b) in the case of the US
Borrower and the UK Borrower, the 

 

113

 

extensions
of credit contemplated hereunder and (c) the granting of the Liens
contemplated to be granted under the Security Documents.

 

6.8.          Corporate Documents. 
The Administrative Agent shall have received true and complete copies of
the certificate of incorporation and by-laws (or equivalent organizational
documents) of each Credit Party.

 

6.9.          Fees.  The
fees in the amounts previously agreed in writing by the Agents and the Lenders
to be received by the Lenders on the Closing Date and all expenses (including
the reasonable fees, disbursements and other charges of counsel to the
Administrative Agent) for which invoices have been presented on or prior to the
Funding Date shall, in each case, have been deposited on the Funding Date in an
escrow account held by the Financing Escrow Agent on behalf and for the account
of the Administrative Agent (or its nominee) pursuant to the terms of the
Financing Escrow Agreement.

 

6.10.        Escrow Agreements; Acquisition.  The full amount of the proceeds of the
Tranche A-1 Term Loans made on the Funding Date funded pursuant to Section 2.1(a)(v)(x) shall
be deposited on the Funding Date in the RSGI Euro Debt Escrow Account to be
held by the Financing Escrow Agent pursuant to the terms of the Financing
Escrow Agreement.  The full amount of the
proceeds of the Tranche A-2 Term Loans made on the Funding Date shall be
deposited on the Funding Date in the UK Borrower Debt Escrow Account to be held
by the Financing Escrow Agent pursuant to the terms of the Financing Escrow
Agreement.  The Administrative Agent
shall have received the Financing Escrow Agreement executed and delivered by a
duly authorized officer of each Person party thereto, which shall provide,
among other things, that as a condition precedent to the release of all funds
held in the RSGI Euro Debt Escrow Account, the RSGI Dollar Debt Account and the
UK Borrower Debt Escrow Account the Acquisition shall have been, or
simultaneously with the initial release of funds thereunder shall be,
consummated in accordance in all material respects with applicable law and the
Sale and Purchase Agreement without any amendment or waiver of any provision
relating to conditionality to closing thereunder.  The Administrative Agent shall have received
the Acquisition Escrow Agreement executed and delivered by a duly authorized
officer of each Person party thereto.

 

6.11.        Patriot Act. 
The Administrative Agent shall have received, at least five Business
Days prior to the Funding Date, all documents and other information required by
bank regulatory authorities under applicable “know your customer” and
anti-money laundering rules and regulations, including the Patriot Act and
requested by the Administrative Agent at least ten Business Days prior to the
Funding Date.

 

114

 

SECTION 7.           Conditions Precedent to All Credit
Events; Certain Funds Period; Clean-Up Period; Conditions Precedent to
Restatement Date

 

The agreement of each Lender to make any Loan
requested to be made by it on any date (excluding Mandatory Borrowings) and the
obligation of the Letter of Credit Issuer to issue Letters of Credit on any
date is subject to the satisfaction of the following conditions precedent:

 

7.1.          No Default; Representations and Warranties.  Subject to Section 7.3 and Section 7.4,
at the time of each Credit Event and also after giving effect thereto (a) no
Default or Event of Default shall have occurred and be continuing and (b) all
representations and warranties made by any Credit Party contained herein or in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been
made on and as of the date of such Credit Event (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects as of such earlier date) (it being understood that no
such representation or warranty made on the Funding Date shall be deemed to be
not true and correct solely as a result of the fact that the Funding Date shall
not occur simultaneously with the Closing Date).

 

7.2.          Notice of Borrowing; Letter of Credit Request.  (a)  Prior to the making of each Term
Loan, each Revolving Credit Loan (other than any Revolving Credit Loan made pursuant
to Section 3.4(a)), each Extended Revolving Credit Loan (other than any
Extended Revolving Credit Loan made pursuant to Section 3.4(a))  and each Swingline Loan, the Administrative
Agent shall have received a Notice of Borrowing (whether in writing or by
telephone) meeting the requirements of Section 2.3.

 

(b)  Prior to the issuance of each
Letter of Credit, the Administrative Agent and the Letter of Credit Issuer
shall have received a Letter of Credit Request meeting the requirements of Section 3.2(a).

 

The acceptance of the benefits of each Credit
Event shall constitute a representation and warranty by each Credit Party to
each of the Lenders that all the applicable conditions specified above exist as
of that time.

 

7.3.          Certain Funds Period.  Once each of the conditions precedent set
forth in Section 6.1(a), 6.4, 6.5 and 6.10 shall have been satisfied and
if each of the conditions precedent set forth in Sections 6.2(m) and 6.9
shall be satisfied contemporaneously with the initial Borrowings hereunder, the
Lenders shall only be entitled to (a) decline to make available any Term
Loan to be made on the Funding Date or any Revolving Credit Loan to be made on
the Funding Date or (b) exercise any right to cancel or terminate any Term
Loan Commitment to make a Term Loan on the Funding Date or any Revolving Credit
Commitment to make a Revolving Credit Loan on the Funding Date, in each case to
finance the Acquisition, the refinancing of the 2003 Credit Agreement, the
refinancing of certain existing Indebtedness of the Target, the payment of

 

115

 

Transaction
Expenses and any other transactions relating to the foregoing, if any of the
following events, circumstances or conditions shall be present:

 

(i)  all outstanding equity interests in
whatever form of each Restricted Subsidiary owned directly by the US Borrower
(after giving effect to the Acquisition) shall not have been pledged pursuant
to the Pledge Agreement pending the Closing Date (except that the US Borrower
shall not be required to pledge more than 65% of the equity interests of any
Restricted Foreign Subsidiary to support the obligations of the US Borrower) or
all certificates representing such pledged securities, accompanied by
instruments of transfer and undated stock powers endorsed in blank, shall not
have been delivered to the Collateral Escrow Agent to be held in escrow
pursuant to the terms of the Financing Escrow Agreement;

 

(ii)  any failure of any condition
precedent set forth in Section 6.1 clauses (b) through (d) inclusive,
6.2(a) (except, in the case of Section 6.2(a), to the extent any
actions are required to be taken by a Foreign Subsidiary), 6.2(i), 6.2(j),
6.3(a), 6.3(b), 6.3(c) (in the case of Section 6.3(c), only if the UK
Borrower shall be a borrower hereunder on the Funding Date), 6.6, 6.7, 6.8
(except, in the case of Sections 6.6, 6.7 and 6.8, to the extent such Sections
relate to a Foreign Subsidiary, other than the UK Borrower if the UK Borrower
shall be a borrower hereunder on the Funding Date) or 6.11 to be satisfied to
the extent that such condition relates directly to (x) the US Borrower or (y) any
Restricted Subsidiary that is a member of the Rockwood Group that is legally
able to satisfy such condition, provided that, in the case of this
clause (y), each Restricted Subsidiary that is a member of the Rockwood Group
shall have used reasonable efforts to avoid any such legal prohibition;

 

(iii)  any default of any covenant in
the first sentence of Section 9.17;

 

(iv)  any event described in Section 11.5
shall occur with respect to the US Borrower or the UK Borrower, provided
that, in the case of any such event with respect to the UK Borrower, the
Lenders shall not be required to make any Loan to the UK Borrower but instead
shall be required to make such Loan to the US Borrower subject to the terms of Section 6
and this Section 7.3;

 

(v)  the US Borrower or the UK Borrower
shall fail to pay any amounts due and payable under this Agreement, any other
Credit Document or the Fee Letter;

 

(vi)  any Credit Document or any
material provision thereof shall cease to be in full force and effect with
respect to the US Borrower or any Restricted Subsidiary that is a member of the
Rockwood Group (other than (x) pursuant to the terms hereof or thereof, (y) as
a result of acts or omissions of the Administrative Agent or any Lender or (z) as
a result of any legal prohibition affecting any Restricted Subsidiary that is a
member of the Rockwood Group; provided, that, in the case of this clause
(z), each Restricted Subsidiary that is a member of the Rockwood Group shall
have used reasonable efforts to avoid any such legal prohibition) or any of the
US Borrower or any

 

116

 

Restricted Subsidiary that is a member of the Rockwood Group shall deny
or disaffirm in writing its obligations under any Credit Document (other than
pursuant to the terms hereof or thereof);

 

(vii)  any breach by the US Borrower
(with respect to itself) or by any Restricted Subsidiary that is a member of
the Rockwood Group (other than, in the case of any Restricted Subsidiary that
is a member of the Rockwood Group, as a result of any legal prohibition
affecting such Restricted Subsidiary; provided, that such Restricted
Subsidiary shall have used reasonable efforts to avoid any such legal
prohibition) of any covenant in Section 10.1, 10.2, 10.6 or 10.7; or

 

(viii)  any breach by the US Borrower
(with respect to itself) or by any Restricted Subsidiary that is a member of
the Rockwood Group (other than, in the case of any Restricted Subsidiary that
is a member of the Rockwood Group, as a result of any legal prohibition
affecting such Restricted Subsidiary; provided, that such Restricted
Subsidiary shall have used reasonable efforts to avoid any such legal
prohibition) of any representation or warranty in Section 8.1 or 8.2.

 

Further, the Lenders shall not be entitled to
exercise any right of set-off against the proceeds of the Term Loans or any
Revolving Credit Loan made on the Funding Date to finance the Acquisition, the
refinancing of the 2003 Credit Agreement, the refinancing of certain existing
Indebtedness of the Target, the payment of Transaction Expenses and any other
transaction related to any of the foregoing.

 

Notwithstanding the foregoing, if any condition
precedent to the initial Borrowing set forth in Section 6 of this
Agreement is not satisfied but as a result of the foregoing provisions of this Section 7.3
the Lenders are nonetheless required to make Loans on the Funding Date, there shall
be, subject to Section 7.4, an Event of Default under Section 11 on
the day following the Closing Date and all rights and remedies shall be
available to the Lenders to the extent they would have been available but for
this Section 7.3 (even though they were not available prior to such date).

 

7.4.          Clean-Up Period. 
From the period from the Funding Date until the date which falls (a) 25
days after the Funding Date, in the case of circumstances affecting the US
Borrower and any Subsidiary that is a member of the Rockwood Group or (b) 90
days after the Funding Date, in the case of circumstances affecting any other
Subsidiary (such period described in clauses (a) and (b), the “Clean-Up
Period”), a breach of representation or warranty or a breach of covenant or
a Default or an Event of Default hereunder shall not be deemed to be a breach
of representation or warranty or a breach of covenant or a Default or an Event
of Default hereunder, as the case may be, if and for so long as, during such
Clean-Up Period, the circumstances giving rise to the relevant breach of
representation or warranty or breach of covenant or Default or Event of
Default:

 

(i)  are capable of being cured and, if
Holdings, the US Borrower or any Subsidiary that is a member of the Rockwood Group
or (after the date that is 30 days after the Funding Date) any other Restricted
Subsidiary is aware of the relevant

 

117

 

circumstances at the time and there exists no legal prohibition
affecting any Restricted Subsidiary which would prevent such cure, reasonable
efforts are being made to cure the same;

 

(ii)  have not been procured by or
approved by Holdings, the US Borrower or any Subsidiary that is a member of the
Rockwood Group or (if arising after the date that is 30 days after the Funding
Date) any other Restricted Subsidiary that is not a member of the Rockwood
Group unless such other Restricted Subsidiary was legally bound to take such
action; and

 

(iii)  do not have a Material Adverse
Effect;

 

provided, that if the relevant
circumstances are continuing at the end of the applicable Clean-Up Period there
shall be a breach of representation or warranty, breach of covenant, Default or
Event of Default, as the case may be, on such date.

 

7.5.          UK Borrower. 
Notwithstanding any of the foregoing provisions in this Section 7
(but subject to the proviso contained in Section 7.3(iv)), the agreement
of each Lender to make any Loan to the UK Borrower on any date and the
obligation of the Letter of Credit Issuer to issue Letters of Credit for the
account of the UK Borrower on any date is subject to the satisfaction of the
conditions set forth in Section 6.3(c) and Sections 6.6 to 6.8
inclusive (in each case, to the extent they relate to the UK Borrower) on or
prior to such date.

 

7.6.          Revolving Credit Loans and Extended Revolving Credit
Loans.  In the case of any Revolving
Credit Loan, at the time of the applicable Credit Event the Extended Revolving
Credit Exposures shall be equal to no less than the Total Extended Revolving
Credit Commitment.

 

7.7.          Conditions Precedent to Restatement Date.  The effectiveness  of the amendment and restatement of the
Existing Credit Agreement in the form of this Agreement is subject to the
satisfaction of the conditions set forth in Section 6 of the Amendment
Agreement.

 

SECTION 8.           Representations, Warranties and
Agreements

 

In order to induce the Lenders to enter into
this Agreement, to make the Loans and issue or participate in Letters of Credit
as provided for herein, each of Holdings, the US Borrower and the UK Borrower
make the following representations and warranties to, and agreements with, the
Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans and the issuance of the Letters of
Credit:

 

8.1.          Corporate Status. 
Each of Holdings, the US Borrower, the UK Borrower and each Material
Subsidiary (a) is a duly organized and validly existing corporation or
other entity in good standing under the laws of the jurisdiction of its organization
and has the corporate or other organizational power and authority to own its
property and assets and to transact the business in which it is engaged and (b) has
duly

 

118

 

qualified
and is authorized to do business and is in good standing in all jurisdictions
where it is required to be so qualified, except where the failure to be so
qualified could not reasonably be expected to result in a Material Adverse
Effect.

 

8.2.          Corporate Power and Authority.  Each Credit Party has the corporate or other
organizational power and authority to execute, deliver and carry out the terms
and provisions of the Credit Documents to which it is a party and has taken all
necessary corporate or other organizational action to authorize the execution,
delivery and performance of the Credit Documents to which it is a party.  Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Credit
Party enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and subject to general principles of equity.

 

8.3.          No Violation. 
Neither the execution, delivery or performance by any Credit Party of
the Credit Documents to which it is a party nor compliance with the terms and
provisions thereof nor the consummation of the Transactions and the other
transactions contemplated hereby or thereby will (a) contravene any
applicable provision of any material law, statute, rule, regulation, order,
writ, injunction or decree of any court or governmental instrumentality, (b) result
in any breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien upon any of the property or assets of
any of Holdings, the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries (other than Liens created under the Credit Documents) pursuant to,
the terms of any material indenture (including the Senior Subordinated Notes
Indenture, the Senior Subordinated Loan Agreement, the Subordinated Note Indenture,
and the 2011 Senior Notes Indenture), loan agreement, lease agreement,
mortgage, deed of trust, agreement or other material instrument to which any of
Holdings, the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries is a party or by which it or any of its property or assets is
bound or (c) violate any provision of the certificate of incorporation,
By-Laws or other constitutional documents of Holdings, the US Borrower, the UK
Borrower or any of the Restricted Subsidiaries.

 

8.4.          Litigation. 
There are no actions, suits or proceedings (including Environmental
Claims) pending or, to the knowledge of any of Holdings, the US Borrower or the
UK Borrower, threatened with respect to any of Holdings, the US Borrower, the
UK Borrower or any of the Subsidiaries that could reasonably be expected to
result in a Material Adverse Effect.

 

8.5.          Margin Regulations. 
Neither the making of any Loan hereunder nor the use of the proceeds
thereof will violate the provisions of Regulation T, U or X of the Board.

 

8.6.          Governmental Approvals.  No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any Governmental Authority is required to authorize or is
required in connection with 

 

119

 

(a) the
execution, delivery and performance of any Credit Document or (b) the
legality, validity, binding effect or enforceability of any Credit Document,
except any of the foregoing the failure of which to obtain or make could not
reasonably be expected to have a Material Adverse Effect.

 

8.7.          Investment Company Act.  Neither Holdings nor the US Borrower is an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

8.8.          True and Complete Disclosure.  (a)  None of the factual information and
data (taken as a whole) heretofore or contemporaneously furnished by any of
Holdings, the US Borrower, the UK Borrower, any of the Subsidiaries or any of
their respective authorized representatives in writing to the Administrative
Agent and/or any Lender on or before the Funding Date (including (i) the
Confidential Information Memorandum and (ii) all information contained in
the Credit Documents) for purposes of or in connection with this Agreement or
any transaction contemplated herein contained any untrue statement or omitted
to state any material fact necessary to make such information and data (taken
as a whole) not misleading at such time in light of the circumstances under
which such information or data was furnished, it being understood and agreed
that for purposes of this Section 8.8(a), such factual information and
data shall not include projections and pro  forma financial
information.

 

(b)  The projections and pro  forma
financial information contained in the information and data referred to in
paragraph (a) above were based on good faith estimates and assumptions
believed by such Persons to be reasonable at the time made, it being recognized
by the Lenders that such projections as to future events are not to be viewed
as facts and that actual results during the period or periods covered by any
such projections may differ from the projected results.

 

8.9.          Financial Condition; Financial Statements.  The (a) unaudited and audited historical
consolidated financial information of the US Borrower as set forth in the
Confidential Information Memorandum, (b) audited financial statements of the Target for each of the fiscal years
ended September 30, 2001 and September 30, 2002, the three months
ended December 31, 2002 and the twelve months ended December 31, 2003 and (c) audited
balance sheet of the US Borrower and the related audited statements of
operations and cash flows (in each case to be provided pursuant to Section 9.1(a) and
(b)), in each case present or will, when provided, present fairly in all
material respects the combined financial position of each of the US Borrower
and the Target (as applicable) at the respective dates of said information,
statements and results of operations for the respective periods covered
thereby.  The audited financial
statements referred to in this Section 8.9 have been prepared in
accordance with GAAP consistently applied except to the extent provided in the
notes to said financial statements.  There has been no Material Adverse Change since December 31,
2003, other than solely as a result of changes in general economic conditions.

 

8.10.        Tax Returns and Payments.  Each of Holdings, the US Borrower, the UK
Borrower and the Subsidiaries has filed all federal income tax returns and all

 

120

 

other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material taxes and assessments payable by it that have become due,
other than those not yet delinquent or contested in good faith.  Each of, Holdings, the US Borrower, the UK
Borrower and each of the Subsidiaries have paid, or have provided adequate
reserves (in the good faith judgment of the management of the US Borrower) in
accordance with GAAP for the payment of, all material federal, state and
foreign income taxes applicable for all prior fiscal years and for the current
fiscal year to the Closing Date.  To the
extent that any breach of any of the representations or warranties in this Section 8.10
relates to a period, event or action prior to the Closing Date in respect of
which Holdings, the US Borrower and/or the Restricted Subsidiaries are
indemnified to the extent of the breach by any Seller pursuant to either
Acquisition Agreement, there shall be deemed to be no breach thereof; provided,
that such a breach will exist if the applicable Seller does not satisfy its
indemnification obligations to the extent and in respect of the circumstances
giving rise to such breach within a reasonable time of being notified by
Holdings, the US Borrower and/or the Restricted Subsidiaries of such
circumstances (such Persons hereby agreeing to so notify the applicable Seller
promptly of such circumstances).

 

8.11.        Compliance with ERISA. 
Each Plan is in compliance with ERISA, the Code and any applicable
Requirement of Law; no Reportable Event has occurred (or is reasonably likely
to occur) with respect to any Plan; no Plan is insolvent or in reorganization
(or is reasonably likely to be insolvent or in reorganization), and no written
notice of any such insolvency or reorganization has been given to any of
Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate; no Plan
(other than a multiemployer plan) has an accumulated or waived funding deficiency
(or is reasonably likely to have such a deficiency); none of Holdings, the US
Borrower, any Subsidiary or any ERISA Affiliate has incurred (or is reasonably
likely expected to incur) any liability to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code or has been notified in writing that it will incur any
liability under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted (or are reasonably likely to be instituted) to
terminate or to reorganize any Plan or to appoint a trustee to administer any
Plan, and no written notice of any such proceedings has been given to any of
Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate; and no lien
imposed under the Code or ERISA on the assets of any of Holdings, the US
Borrower or any Subsidiary or any ERISA Affiliate exists (or is reasonably
likely to exist) nor has any of Holdings, the US Borrower, any Subsidiary or
any ERISA Affiliate been notified in writing that such a lien will be imposed
on the assets of any of Holdings, the US Borrower, any Subsidiary or any ERISA
Affiliate on account of any Plan, except to the extent that a breach of
any of the representations, warranties or agreements in this Section 8.11
would not result, individually or in the aggregate, in an amount of liability
that would be reasonably likely to have a Material Adverse Effect or relates to
any matter disclosed in the financial statements of the US Borrower contained
in the Confidential Information Memorandum. 
No Plan (other than a multiemployer plan) has an Unfunded Current
Liability that would, individually or when taken together with any other liabilities
referenced in this Section 8.11, be reasonably likely to have a Material
Adverse Effect.  With respect to Plans
that are multiemployer plans (as defined in Section 3(37) of ERISA), the
representations and warranties in this Section 8.11, other than any made
with respect to

 

121

 

(a) liability
under Section 4201 or 4204 of ERISA or (b) liability for termination
or reorganization of such Plans under ERISA, are made to the best knowledge of
the US Borrower.  To the extent that any
breach of any of the representations or warranties in this Section 8.11
relates to a period, event or action prior to the Closing Date in respect of
which Holdings, the US Borrower and/or the Restricted Subsidiaries are
indemnified to the extent of the breach by any Seller pursuant to either
Acquisition Agreement, there shall be deemed to be no breach thereof; provided,
that such a breach will exist if the applicable Seller does not satisfy its
indemnification obligations to the extent and in respect of the circumstances
giving rise to such breach within a reasonable time of being notified by
Holdings, the US Borrower and/or the Restricted Subsidiaries of such
circumstances (such Persons hereby agreeing to so notify the applicable Seller
promptly of such circumstances).

 

8.12.        Subsidiaries. 
Holdings does not have any Subsidiaries other than the US Borrower and
its Subsidiaries.  Schedule 8.12 lists
each Subsidiary of the US Borrower (and the direct and indirect ownership
interest of the US Borrower therein), in each case existing on the Funding Date
(after giving effect to the Acquisition). 
To the knowledge of the US Borrower, after due enquiry, each Material
Subsidiary as of the Funding Date (after giving effect to the Acquisition) has
been so designated on Schedule 8.12.

 

8.13.        Patents, etc. 
Holdings, the US Borrower, the UK Borrower  and each of the Restricted Subsidiaries have
obtained all patents, trademarks, servicemarks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, except where the failure to obtain
any such rights could not reasonably be expected to have a Material Adverse
Effect.

 

8.14.        Environmental Laws. 
(a)    Except as could not
reasonably be expected to have a Material Adverse Effect: (i) each of
Holdings, the US Borrower, the UK Borrower and each of the Subsidiaries are in
compliance with all Environmental Laws in all jurisdictions in which Holdings,
the US Borrower and each of the Subsidiaries are currently doing business
(including having obtained all material permits required under Environmental
Laws); (ii) each of Holdings, the US Borrower and the UK Borrower will
comply and cause each of the Subsidiaries to comply with all such Environmental
Laws (including all permits required under Environmental Laws); and (iii) none
of Holdings, the US Borrower, the UK Borrower and each of the Subsidiaries has
become subject to any Environmental Claim or any other liability under any
Environmental Law.

 

(b)  None of Holdings, the US Borrower,
the UK Borrower or any of the Subsidiaries has treated, stored, transported,
released or disposed of Hazardous Materials at or from any currently or
formerly owned Real Estate or facility relating to its business in a manner
that could reasonably be expected to have a Material Adverse Effect.

 

8.15.        Properties. 
Each of Holdings, the US Borrower, the UK Borrower and each of the
Subsidiaries have good title to or leasehold interest in all properties that

 

122

 

are
necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, free and clear of all Liens (other
than any Liens permitted by this Agreement) and except where the failure to
have such good title could not reasonably be expected to have a Material
Adverse Effect.

 

SECTION 9.           Affirmative Covenants

 

Each of the US Borrower and the UK Borrower
and, with respect to Section 9.12(c) and 9.15 only, Holdings, hereby
covenants and agrees that on the Funding Date and thereafter, for so long as
this Agreement is in effect and until the Commitments, the Swingline Commitment
and each Letter of Credit have terminated and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:

 

9.1.          Information Covenants.  The US Borrower will furnish to each Lender
and the Administrative Agent:

 

(a)  Annual Financial Statements.  As soon as available and in any event on or
before the date on which such financial statements are required to be filed
with the SEC (or, if such financial statements are not required to be filed
with the SEC, on or before the date that is 90 days after the end of each
such fiscal year), the consolidated balance sheet of (i) the US Borrower
and the Restricted Subsidiaries and (ii) the US Borrower and its
Subsidiaries, in each case as at the end of such fiscal year prepared in
accordance with GAAP, and the related consolidated statement of operations and
cash flows for such fiscal year, each prepared in accordance with GAAP, setting
forth comparative consolidated figures for the preceding fiscal year, and
certified by independent certified public accountants of recognized national
standing whose opinion shall not be qualified as to the scope of audit or as to
the status of the US Borrower, the UK Borrower or any of the Material
Subsidiaries as a going concern, together in any event with a certificate of
such accounting firm stating that in the course of its regular audit of the
business of the US Borrower, the UK Borrower and the Material Subsidiaries,
which audit was conducted in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge of any Default or
Event of Default relating to Section 10.9 or 10.10 that has occurred and
is continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof.

 

(b)  Quarterly Financial Statements.  As soon as available and in any event on or
before the date on which such financial statements are required to be filed
with the SEC with respect to each of the first three quarterly accounting
periods in each fiscal year of the US Borrower (or, if such financial
statements are not required to be filed with the SEC, on or before the date
that is 45 days after the end of each such quarterly accounting period),
the consolidated balance sheet of (i) the US Borrower and the Restricted
Subsidiaries and (ii) the US Borrower and its Subsidiaries, in each case
as at the end of such quarterly period and the related consolidated statement
of operations for such quarterly accounting period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly period, and the related
consolidated statement of cash flows for 

 

123

 

the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and setting forth comparative consolidated figures for the
related periods in the prior fiscal year or, in the case of such consolidated
balance sheet, for the last day of such quarterly period in the prior fiscal
year, each prepared in accordance with GAAP, all of which shall be certified by
an Authorized Officer of the US Borrower, subject to changes resulting from
audit and normal year-end audit adjustments.

 

(c)  Budgets.  Within 60 days after the commencement of
each fiscal year of the US Borrower, consolidated budgets of each of the US
Borrower, the US Borrower and its Restricted Subsidiaries, the UK Borrower and
the UK Borrower and its Restricted Subsidiaries in reasonable detail for the
fiscal year as customarily prepared by management of the US Borrower and the UK
Borrower for their internal use, setting forth the principal assumptions upon
which such budgets are based.

 

(d)  Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Sections 9.1(a) and (b), a certificate of an
Authorized Officer of the US Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth (i) the
calculations required to establish whether the US Borrower and the Subsidiaries
were in compliance with the provisions of Sections 10.9 and 10.10 as at
the end of such fiscal year or period, as the case may be, (ii) a
specification of any change in the identity of the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such fiscal
year or period, as the case may be, from the Restricted Subsidiaries,
Unrestricted Subsidiaries and Foreign Subsidiaries, respectively, provided to
the Lenders on the Funding Date or the most recent fiscal year or period, as
the case may be, (iii) the then applicable Status and (iv) the amount
of any Pro Forma Adjustment not previously set forth in a Pro Forma Adjustment
Certificate or any change in the amount of a Pro Forma Adjustment set forth in
any Pro Forma Adjustment Certificate previously provided and, in either case,
in reasonable detail, the calculations and basis therefor.  At the time of the delivery of the financial
statements provided for in Section 9.1(a), (i) a certificate of an
Authorized Officer of the US Borrower setting forth in reasonable detail the
Available Amount as at the end of the fiscal year to which such financial
statements relate and (ii) a certificate of an Authorized Officer and the
chief legal officer of the US Borrower (x) setting forth the information
required pursuant to Section 2 of the Perfection Certificate or confirming
that there has been no change in such information since the Funding Date or the
date of the most recent certificate delivered pursuant to this subsection (d)(ii),
as the case may be, and (y) certifying that all Uniform Commercial Code
financing statements (including fixture filings, as applicable) or other
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations, containing a description of the Collateral
have been filed of record in each governmental, municipal or other appropriate
office in each jurisdiction identified pursuant to clause (x) above
to the extent necessary to protect and perfect the security interests under the
Security Documents.

 

(e)  Notice of Default or Litigation.  Promptly after an Authorized Officer of any
of the US Borrower, the UK Borrower or any of the Subsidiaries obtains
knowledge thereof, notice of (i) the occurrence of any event that
constitutes a Default or 

 

124

 

Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action any of the US Borrower or the UK
Borrower proposes to take with respect thereto, and (ii) any litigation or
governmental proceeding pending against any of the US Borrower, the UK Borrower
or any of the Subsidiaries that could reasonably be expected to result in a
Material Adverse Effect.

 

(f)  Environmental Matters.  The US Borrower and the UK Borrower will
promptly advise the Lenders in writing after obtaining knowledge of any one or
more of the following environmental matters, unless such environmental matters
would not, individually or when aggregated with all other such matters, be
reasonably expected to result in a Material Adverse Effect:

 

(i)  any pending or threatened
Environmental Claim against any of the US Borrower, the UK Borrower or any of
the Subsidiaries or any Real Estate;

 

(ii)  any condition or occurrence on any
Real Estate that (x) results in noncompliance by any of the US Borrower,
the UK Borrower or any of the Subsidiaries with any applicable Environmental
Law or (y) could reasonably be anticipated to form the basis of an
Environmental Claim against any of Holdings, the US Borrower, the UK Borrower
or any of the Subsidiaries or any Real Estate;

 

(iii)  any condition or occurrence on
any Real Estate that could reasonably be anticipated to cause such Real Estate
to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Estate under any Environmental Law; and

 

(iv)  the taking of any removal or
remedial action in response to the actual or alleged presence of any Hazardous
Material on any Real Estate.

 

All such notices shall describe in reasonable
detail the nature of the claim, investigation, condition, occurrence or removal
or remedial action and the response thereto. 
The term “Real Estate” shall mean land, buildings and
improvements owned or leased by any of the US Borrower, the UK Borrower or any
of the Subsidiaries, but excluding all operating fixtures and equipment,
whether or not incorporated into improvements.

 

(g)  Other Information.  Promptly upon filing thereof, copies of any
filings (including on Form 10-K, 10-Q or 8-K) or registration statements
with, and reports to, the SEC or any analogous Government Authority in any
relevant jurisdiction by any of the US Borrower, the UK Borrower or any of the
Subsidiaries (other than amendments to any registration statement (to the
extent such registration statement, in the form it becomes effective, is
delivered to the Lenders), exhibits to any registration statement and, if
applicable, any registration statements on Form S-8) and copies of all
financial statements, proxy statements, notices and reports that any of the US
Borrower, the UK Borrower or any of the Subsidiaries shall send to the holders
of any publicly issued debt of any of Holdings, the US Borrower, the UK
Borrower and/or any of the Subsidiaries (including any Senior Subordinated
Notes and Subordinated Notes, (in each case whether publicly issued or not)) in
their capacity as such holders (in each case to the extent not

 

125

 

theretofore delivered to the Lenders pursuant to this Agreement) and,
with reasonable promptness, such other information (financial or otherwise) as
the Administrative Agent on its own behalf or on behalf of any Lender may
reasonably request in writing from time to time.

 

(h)  Pro Forma Adjustment Certificate.  Not later than the consummation of the
acquisition of any Acquired Entity or Business by the US Borrower or any
Restricted Subsidiary for which there shall be a Pro Forma Adjustment and not
later than any date on which financial statements are delivered with respect to
any four-quarter period in which a Pro Forma Adjustment is made as a result of
the consummation of the acquisition of any Acquired Entity or Business by the
US Borrower or any Restricted Subsidiary for which there shall be a Pro Forma
Adjustment, a certificate of an Authorized Officer of the US Borrower setting
forth the amount of such Pro Forma Adjustment and, in reasonable detail, the
calculations and basis therefor.

 

(i)  Collection of Accounts
Receivable.  Promptly following
written request of the same from the Administrative Agent, but no more
frequently than on one occasion during each 10-Business Day period following
the delivery of each officer’s certificate referred to in Section 9.1(d),
such information regarding the collection by the US Borrower or any of the
Restricted Subsidiaries or, to the extent that such information is available to
the US Borrower or any of the Restricted Subsidiaries with the use of
commercially reasonable efforts, any other Person of accounts receivable that
have been subjected to a transaction consummated pursuant to Section 10.4(e).

 

9.2.          Books, Records and Inspections.  Each of 
the US Borrower and the UK Borrower will, and will cause each of the
Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or the Required Lenders to visit and inspect any of the
properties or assets of the US Borrower, the UK Borrower and any such
Subsidiary in whomsoever’s possession to the extent that it is within such
party’s control to permit such inspection, and to examine the books of account
of the US Borrower, the UK Borrower and any such Subsidiary and discuss the
affairs, finances and accounts of the US Borrower, the UK Borrower and of any
such Subsidiary with, and be advised as to the same by, its and their officers
and independent accountants, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or the Required Lenders may
desire.

 

9.3.          Maintenance of Insurance.  Each of the US Borrower and the UK Borrower
will, and will cause each of the Material Subsidiaries to, at all times
maintain in full force and effect, with insurance companies that the US
Borrower believes (in the good faith judgment of the management of the US
Borrower) are financially sound and responsible at the time the relevant
coverage is placed or renewed, insurance in at least such amounts and against
at least such risks (and with such risk retentions) as are usually insured
against in the same general area by companies engaged in the same or a similar
business; and will furnish to the Lenders, upon written request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried.

 

126

 

9.4.          Payment of Taxes. 
Each of the US Borrower and the UK Borrower will pay and discharge, and
will cause each of the Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful material claims that,
if unpaid, could reasonably be expected to become a material Lien upon any
properties of the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries; provided, that neither the US Borrower, the UK Borrower
nor any of the Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings if it has maintained adequate reserves (in the good faith judgment
of the management of the US Borrower) with respect thereto in accordance with
GAAP.

 

9.5.          Consolidated Corporate Franchises.  Each of the US Borrower and the UK Borrower
will do, and will cause each Material Subsidiary to do, or cause to be done,
all things necessary to preserve and keep in full force and effect its
existence, corporate rights and authority, except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; provided, however, that the US Borrower and its
Subsidiaries may consummate any transaction permitted under Section 10.3,
10.4 or 10.5.

 

9.6.          Compliance with Statutes, Obligations, etc.  Each of the US Borrower and the UK Borrower
will, and will cause each Subsidiary to, comply with all applicable laws,
rules, regulations and orders, except to the extent the failure to do so could
not reasonably be expected to have a Material Adverse Effect.

 

9.7.          ERISA. 
Promptly after any of the US Borrower or any Subsidiary or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following
events that, individually or in the aggregate (including in the aggregate such
events previously disclosed or exempt from disclosure hereunder, to the extent
the liability therefor remains outstanding), would be reasonably likely to have
a Material Adverse Effect, the US Borrower will deliver to each of the Lenders
a certificate of an Authorized Officer or any other senior officer of the US
Borrower setting forth details as to such occurrence and the action, if any,
that the US Borrower, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices (required, proposed or otherwise)
given to or filed with or by US Borrower, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant (other than notices relating to an
individual participant’s benefits) or the Plan administrator with respect
thereto: that a Reportable Event has occurred; that an accumulated funding
deficiency has been incurred or an application is to be made to the Secretary
of the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan;
that a Plan having an Unfunded Current Liability has been or is to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA (including the giving of written notice thereof); that a Plan has an
Unfunded Current Liability that has or will result in a lien under ERISA or the
Code; that proceedings will be or have been instituted to terminate a Plan
having an Unfunded Current Liability 

 

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(including
the giving of written notice thereof); that a proceeding has been instituted
against the US Borrower, a Subsidiary or an ERISA Affiliate pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan; that the PBGC has
notified the US Borrower, any Subsidiary or any ERISA Affiliate of its
intention to appoint a trustee to administer any Plan; that the US Borrower,
any Subsidiary or any ERISA Affiliate has failed to make a required installment
or other payment pursuant to Section 412 of the Code with respect to a
Plan; or that the US Borrower, any Subsidiary or any ERISA Affiliate has
incurred or will incur (or has been notified in writing that it will incur) any
liability (including any contingent or secondary liability) to or on account of
a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of the Code.

 

9.8.          Good Repair. 
Each of the US Borrower and the UK Borrower will, and will cause each of
the Restricted Subsidiaries to, ensure that its properties and equipment used
or useful in its business in whomsoever’s possession they may be to the extent
that it is within the control of such party to cause same, are kept in good
repair, working order and condition, normal wear and tear excepted, and that
from time to time there are made in such properties and equipment all needful
and proper repairs, renewals, replacements, extensions, additions, betterments
and improvements thereto, to the extent and in the manner customary for
companies in similar businesses and consistent with third party leases, except
in each case to the extent the failure to do so could not be reasonably
expected to have a Material Adverse Effect.

 

9.9.          Transactions with Affiliates.  Each of the US Borrower and the UK Borrower
will conduct, and cause each of the Restricted Subsidiaries to conduct, all
transactions with any of its Affiliates on terms that are substantially as
favorable to the US Borrower, the UK Borrower or such Restricted Subsidiary as
it would obtain in a comparable arm’s-length transaction with a Person that is
not an Affiliate; provided, that the foregoing restrictions shall not
apply to (a) the payment of customary annual fees to KKR, DLJ Merchant
Banking and/or their respective Affiliates for management, consulting and
financial services rendered to the Parent Companies, Holdings, the US Borrower,
the UK Borrower and the Subsidiaries and investment banking fees paid to KKR,
DLJ Merchant Banking and/or their respective Affiliates for services rendered
to the Parent Companies, Holdings, the US Borrower, the UK Borrower and the
Subsidiaries in connection with divestitures, acquisitions, financings and
other transactions, (b) customary fees paid to members of the Board of
Directors (in their capacity as such) of the Parent Companies, Holdings, the US
Borrower, the UK Borrower and the Subsidiaries and (c) transactions
permitted by Section 10.6.

 

9.10.        End of Fiscal Years; Fiscal Quarters.  The US Borrower will, for financial reporting
purposes, cause (a) its, and each of its Subsidiaries’, fiscal years to
end on December 31 of each year and (b) its, and each of its
Subsidiaries’, fiscal quarters to end on dates consistent with such fiscal
year-end and the US Borrower’s past practice; provided, however,
that the US Borrower may, upon written notice to the Administrative Agent,
change the financial reporting convention specified above to any other
financial reporting convention reasonably acceptable to the Administrative
Agent, in which case the US Borrower and the Administrative Agent will, and are
hereby authorized by the

 

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Lenders
to, make any adjustments to this Agreement that are necessary in order to
reflect such change in financial reporting.

 

9.11.        Additional Guarantors and Grantors.  (a)   
Except as provided in Section 10.1(j) or (k), the US Borrower
will, except to the extent prohibited by applicable law or to the extent that
it would result in material adverse tax consequences for Parent and its
Subsidiaries, taken as a whole, cause (i) any direct or indirect Domestic
Subsidiary (other than any Unrestricted Subsidiary) formed or otherwise
purchased or acquired after the Funding Date (including pursuant to a Permitted
Acquisition) and (ii) any Subsidiary (other than any Unrestricted
Subsidiary) that is not a Domestic Subsidiary on the Funding Date but
subsequently becomes a Domestic Subsidiary (other than any Unrestricted
Subsidiary), in each case to execute a supplement to each of the Guarantee and
the Security Agreement, substantially in the form of Annex B or Annex 1, as
applicable, to the respective agreement in order to become a Guarantor under
the Guarantee and a grantor under the Security Agreement.  The US Borrower will, and will cause each of
the Restricted Subsidiaries to, use commercially reasonable efforts to
structure the ownership of any such Domestic Subsidiary so as to avoid any such
legal prohibition or material adverse tax consequences described in the
immediately preceding sentence that may result from such ownership structure.

 

(b)  Each of the US Borrower and the UK
Borrower will, except to the extent prohibited by applicable law or to the
extent that it would result in material adverse tax consequences for Parent and
its Subsidiaries, taken as a whole, cause (i) any direct or indirect
Subsidiary of the US Borrower (other than any Unrestricted Subsidiary or
Foreign Joint Venture) incorporated under the laws of any of England and Wales,
Scotland, Germany, Italy, Canada or Singapore that is formed or otherwise
purchased or acquired after the Closing Date (including pursuant to a Permitted
Acquisition) and (ii) any member of the Rockwood Group (other than an
Unrestricted Subsidiary or Foreign Joint Venture) that is not incorporated
under the laws of any such country on the Closing Date but subsequently becomes
incorporated under such laws, in each case to execute a supplement to the
applicable Foreign Security Documents in form and substance reasonably
satisfactory to the Administrative Agent (or guarantee and security
arrangements in relation to the Obligations of the UK Borrower, as the case may
be, in a form and to an extent agreed between the US Borrower and the
Administrative Agent, but to be substantially consistent (taking into account
the scope of customary collateral arrangements in the applicable jurisdiction)
with the scope of the guarantee and collateral arrangements entered into
pursuant to the Foreign Subsidiary Guarantees and the Foreign Security
Documents), in order to become a Foreign Subsidiary Guarantor and a grantor
under the applicable Foreign Security Documents; provided, that the US
Borrower and the UK Borrower shall not be required to comply with the
requirements of subclause (i) above with respect to any Permitted
Acquisition of such direct or indirect Subsidiary of the US Borrower to the
extent that the aggregate amount of (x) all Indebtedness incurred pursuant
to Section 10.1(j) and (k) and outstanding at such time pursuant
to which the US Borrower or the UK Borrower, as the case may be, has utilized
(and at such time continues to utilize) the proviso to Section 10.1(j)(i)(y) or
10.1(k)(i)(y), respectively, and (y) the fair market value at the time
such investment was made of all investments made pursuant to Section 10.5(j) as
to which the US Borrower or the UK Borrower, as the case

 

129

 

may be, has utilized (and at such time continues to utilize) the
proviso thereto, does not exceed the Guarantee and Collateral Exception Amount
in effect at such time.

 

(c)  Each of the US Borrower and the UK
Borrower will cause each Foreign Subsidiary that is a Restricted Foreign
Subsidiary or that is required to become a Restricted Foreign Subsidiary for an
investment to constitute a Permitted Acquisition, in each case that makes an
investment constituting a Permitted Acquisition pursuant to Section 10.5(j) to
enter into guarantee and security arrangements in relation to the Obligations
of the UK Borrower in respect of the capital stock and/or assets acquired
pursuant to such Permitted Acquisition to the extent the target of such
Permitted Acquisition is incorporated under the laws of (or has assets located
in) any of England and Wales, Scotland, Germany, Italy, Canada or Singapore, in
a form and to an extent agreed between the US Borrower and the Administrative
Agent, but to be substantially consistent (taking into account the scope of
customary collateral arrangements in the applicable jurisdiction) with the
scope of the guarantee and collateral arrangements entered into pursuant to the
Foreign Subsidiary Guarantees and the Foreign Security Documents, and to comply
with Section 9.15 in respect of such arrangements; provided, that (i) no
such Restricted Foreign Subsidiary shall be required to enter into such
arrangements to the extent that such arrangements would (x) be prohibited
by the law of the jurisdiction of incorporation or formation of such Restricted
Subsidiary or of the entity whose capital stock is acquired or (y) have
material adverse tax consequences for any of the Parent Companies, Holdings,
the US Borrower or any of the Restricted Subsidiaries and (ii) the US
Borrower and the UK Borrower shall not be required to comply with the
requirements of this clause (c) with respect to any Permitted Acquisition
of any such Restricted Foreign Subsidiary to the extent that the aggregate
amount of (x) all Indebtedness incurred pursuant to Section 10.1(j) and
(k) and outstanding at such time pursuant to which the US Borrower or the
UK Borrower, as the case may be, has utilized (and at such time continues to
utilize) the proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y),
respectively, and (y) the fair market value at the time such investment
was made of all investments made pursuant to Section 10.5(j) as to
which the US Borrower or the UK Borrower, as the case may be, has utilized (and
at such time continues to utilize) the proviso thereto, does not exceed the
Guarantee and Collateral Exception Amount in effect at such time.

 

9.12.        Pledges of Additional Stock and Evidence of Indebtedness.  (a)   
The US Borrower will, except to the extent prohibited by applicable law
or to the extent that it would result in material adverse tax consequences for
Parent and its Subsidiaries, taken as a whole, pledge, and, if applicable, will
cause each Domestic Subsidiary to pledge, to the Administrative Agent, for the
benefit of the Secured Parties, (i) all the capital stock of each Domestic
Subsidiary (other than any Unrestricted Subsidiary) and each Foreign Subsidiary
(other than an Unrestricted Subsidiary or any capital stock representing in
excess of 65% of the issued and outstanding capital stock in any Foreign
Subsidiary) held by the US Borrower or a Domestic Subsidiary, in each case,
formed or otherwise purchased or acquired after the Funding Date, in each case
pursuant to a supplement to the Pledge Agreement in form and substance
reasonably satisfactory to the Administrative Agent, (ii) all evidences of
Indebtedness in excess of $5,000,000 received by the US Borrower or any of the
Domestic Subsidiaries (other than any Unrestricted

 

130

 

Subsidiary)
in connection with any disposition of assets pursuant to Section 10.4(b),
in each case pursuant to a supplement to the Pledge Agreement, substantially in
the form of Annex A thereto and (iii) any global promissory notes executed
after the Funding Date evidencing Indebtedness of any of Holdings, the US
Borrower and each Subsidiary that is owing to any of the US Borrower or any
Domestic Subsidiary (other than any Unrestricted Subsidiary), in each case
pursuant to a supplement to the Pledge Agreement, substantially in the form of
Annex A thereto; provided, that the US Borrower and any such Domestic
Subsidiary shall not be required to comply with the requirements of this clause
(a) with respect to any Permitted Acquisition of (1) any such Foreign
Subsidiary or (2) any such Domestic Subsidiary to the extent in the case
of this subclause (2) that Indebtedness is incurred pursuant to Section 10.1(j) or
(k) in connection therewith, in each case, to the extent that the
aggregate amount of (x) all Indebtedness incurred pursuant to Section 10.1(j) and
(k) and outstanding at such time pursuant to which the US Borrower or the
UK Borrower, as the case may be, has utilized (and at such time continues to
utilize) the proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y),
respectively, and (y) the fair market value at the time such investment
was made of all investments made pursuant to Section 10.5(j) as to
which the US Borrower or the UK Borrower, as the case may be, has utilized (and
at such time continues to utilize) the proviso thereto, does not exceed the
Guarantee and Collateral Exception Amount in effect at such time.  The US Borrower will, and will cause each of
the Restricted Subsidiaries to, use commercially reasonable efforts to
structure the ownership of any such Domestic Subsidiary so as to avoid any such
legal prohibition or material adverse tax consequences described in the
immediately preceding sentence that may result from such ownership structure.

 

(b)  The US Borrower will pledge, and,
if applicable, will cause each Subsidiary (other than any Foreign Joint Venture
or any Subsidiary of such a Foreign Joint Venture) to pledge, to the
Administrative Agent, for the benefit of the Lenders to the UK Borrower, (i) all
the capital stock of each Subsidiary of the UK Borrower and of any Foreign
Subsidiary Guarantor owned or held by the US Borrower or any Restricted
Subsidiary, in each case formed or otherwise purchased or acquired after the
Closing Date to the extent such Subsidiary is incorporated under the laws of
any of England and Wales, Scotland, Germany, Italy, Canada or Singapore, in
each case pursuant to a supplement to the applicable Foreign Security Documents
in form and substance reasonably satisfactory to the Administrative Agent (or
pledge arrangements in relation to the Obligations of the UK Borrower, in a
form and to an extent agreed between the US Borrower and the Administrative
Agent, but to be substantially consistent (taking into account the scope of
customary collateral arrangements in the applicable jurisdiction) with the
scope of the pledge arrangements entered into pursuant to the Foreign Security
Documents) and (ii) all evidences of Indebtedness with a Dollar Equivalent
in excess of $5,000,000 received by any of the Foreign Subsidiary Guarantors in
connection with any disposition of assets pursuant to Section 10.4(b), in
each case pursuant to a supplement to the applicable Foreign Security Documents
in form and substance reasonably satisfactory to the Administrative Agent (or
pledge arrangements in relation to the Obligations of the UK Borrower, in a
form and to an extent agreed between the US Borrower and the Administrative
Agent, but to be substantially consistent (taking into account the scope of
customary collateral arrangements in the applicable jurisdiction) with the
scope of the pledge arrangements entered into pursuant to the Foreign Security
Documents); provided, 

 

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that the US Borrower and any such Subsidiary shall not be required to
comply with the requirements of subclause (i) above with respect to any
Permitted Acquisition of any such Subsidiary of the UK Borrower or of any such
Foreign Subsidiary Guarantor to the extent that the aggregate amount of (x) all
Indebtedness incurred pursuant to Section 10.1(j) and (k) and
outstanding at such time pursuant to which the US Borrower or the UK Borrower,
as the case may be, has utilized (and at such time continues to utilize) the
proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y), respectively, and (y) the
fair market value at the time such investment was made of all investments made
pursuant to Section 10.5(j) as to which the US Borrower or the UK
Borrower, as the case may be, has utilized (and at such time continues to
utilize) the proviso thereto, does not exceed the Guarantee and Collateral
Exception Amount in effect at such time.

 

(c)  Holdings will pledge to the
Administrative Agent, for the benefit of the Lenders, all capital stock of the
US Borrower acquired by it after the Funding Date (including any capital stock
issued in connection with (i) PIK Proceeds Equity Contributions, (ii) loans
and advances made pursuant to Section 10.5(c)(i) and (iii) dividends
paid by the Borrower solely in its capital stock pursuant to Section 10.6)
and the US Borrower will pledge to the Administrative Agent, for the benefit of
the Secured Parties, pursuant to the Pledge Agreement or the UK Pledge
Agreements, as the case may be, all capital stock of the UK Borrower acquired
by it after the Funding Date.

 

(d)  The US Borrower and the UK Borrower
agree that all Indebtedness in excess of $5,000,000 of any of the US Borrower
and each Subsidiary that is owing to any Credit Party party to the Pledge
Agreement shall be evidenced by one or more global promissory notes.

 

9.13.        Use of Proceeds. 
The US Borrower and the UK Borrower will use the Letters of Credit and
the proceeds of all Revolving Credit Loans, all Extended Revolving Credit Loans
and Swingline Loans solely for general corporate purposes.  The US Borrower and the UK Borrower will use
the proceeds of all Term Loans (other than any Term Loans funded under the
Tranche A Term Loan Commitment pursuant to Section 2.1(a)(i) or Section 2.1(a)(ii),
as applicable, after the Funding Date, any Tranche E Term Loans funded pursuant
to Section 2.1(a)(iv) on the Third Amendment Effective Date, any
Tranche G Term Loans funded pursuant to Section 2.1(a)(v) on the
Fourth Amendment Effective Date, any Tranche H Term Loans deemed made pursuant
to Section 2.1(a)(vi) on the Restatement Date and any Tranche I Term
Loans deemed made pursuant to Section 2.1(a)(vii) on the Restatement
Date), together with the proceeds of the Acquisition Equity Contribution and
the borrowings under the Senior Subordinated Loan Agreement, to pay the
consideration for the Acquisition, to refinance the 2003 Credit Agreement, PIK
Notes (and related fees and prepayment premiums) of PIK Holdco and certain
existing Indebtedness of the Target and to pay Transaction Expenses.  The US Borrower and the UK Borrower will use
the proceeds of all Tranche A-1 Term Loans and/or Tranche A-2 Term Loans that
are funded after the Funding Date pursuant to Section 2.1(a)(iii) solely
for general corporate purposes.  The US
Borrower will (i) use the proceeds of all Tranche E Term Loans funded on
the Third Amendment Effective Date solely to repay in full the outstanding
principal amount of those existing term loans designated as “Tranche D Term
Loans” under the Credit Agreement immediately prior to

 

132

 

the
Third Amendment Effective Date and to pay fees and expenses in connection with
such prepayments and with the Third Amendment, (ii) use the proceeds of
all Tranche G Term Loans funded on the Fourth Amendment Effective Date solely
to repay in full the outstanding principal amount of those existing term loans
designated as “Tranche F Term Loans” under the Credit Agreement immediately
prior to the Fourth Amendment Effective Date and to pay fees and expenses in
connection with such prepayments and with the Fourth Amendment, (iii) use
the aggregate amount of all Tranche H Term Loans deemed made on the Restatement
Date solely to convert a portion of the outstanding principal amount of those
existing term loans designated as “Tranche E Term Loans” under the Credit
Agreement immediately prior to the Restatement Date, (iv) use the
aggregate amount of all Tranche I Term Loans deemed made on the Restatement
Date solely to convert a portion of the outstanding principal amount of those
existing term loans designated as “Tranche G Term Loans” under the Credit
Agreement immediately prior to the Restatement Date and (v) use the
proceeds of all Incremental Refinancing Term Loans to solely repay Tranche A-1
Term Loans, Tranche A-2 Term Loans, Tranche E Term Loans and Tranche G Term
Loans as required by Section 5.2.

 

9.14.        Changes in Business. 
The US Borrower, the UK Borrower and the Subsidiaries, taken as a whole,
will not fundamentally and substantively alter the character of their business,
taken as a whole, from the business conducted by the US Borrower, the UK
Borrower and the Subsidiaries, taken as a whole, on the Funding Date and other
business activities incidental or related to any of the foregoing.

 

9.15.        Further Assurances. 
(a)    Each of Holdings, the
US Borrower and the UK Borrower will, and will cause each other Credit 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, in
order to effectuate the transactions contemplated by the Credit Documents and
in order to grant, preserve, protect and perfect the validity and priority of
the security interests created or intended to be created by the Security
Agreement, the Pledge Agreement, any Foreign Security Document or any Mortgage,
all at the expense of Holdings, the US Borrower and the Restricted
Subsidiaries.

 

(b)  If any assets
(including any real estate or improvements thereto or any interest therein)
with a book value or fair market value in excess of $5,000,000 are acquired by
the US Borrower, the UK Borrower or any other Credit Party after the Closing
Date (other than assets constituting Collateral under the Security Agreement or
any Foreign Security Document that become subject to the Lien of the Security
Agreement or the applicable Foreign Security Documents, as the case may be,
upon acquisition thereof) that are of the nature secured by the Security
Agreement, any Foreign Security Document or any Mortgage, as the case may be,
the US Borrower will notify the Administrative Agent and the Lenders thereof, and,
if requested by the Administrative Agent or the Required Lenders, the US
Borrower will cause such assets to be subjected to a Lien securing the
applicable Obligations and will take, and cause the other Credit Parties to
take, such actions as shall be necessary or reasonably requested by the

 

133

 

Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all
at the expense of the Credit Parties. 
Any Mortgage delivered to the Administrative Agent in accordance with
the preceding sentence shall be accompanied by (x) a policy or policies of
title insurance issued by a nationally recognized title insurance company
insuring the Lien of each Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as expressly
permitted by Section 10.2, together with such endorsements, coinsurance
and reinsurance as the Administrative Agent may reasonably request and (y) an
opinion of local counsel to the Borrower (or in the event a Subsidiary of the
Borrower is the Mortgagor, to such Subsidiary) substantially in the form of Exhibit O-12.

 

(c)  The US Borrower further agrees
that, as promptly as practicable after the Funding Date it shall cause
Brockhues to enter into the German Conditional Security Agreements
substantially in the form attached hereto as Exhibit C-6 immediately upon
satisfaction of either of the following conditions:

 

(i)  Silo Pigmente GmbH and Rockwood
Pigmente Holding GmbH hold together 100% of the partners’ interests (or,
following the change of legal status of Brockhues to a stock corporation, 100%
of the shares) in Brockhues; or

 

(ii)  the legal obligation in the
Federal Republic of Germany changes to the effect that in the reasonable
judgment of the US Borrower, in consultation with the Administrative Agent, the
execution of the German Conditional Security Agreements by Brockhues is
possible without running material legal risks under German law.

 

9.16.        UK Borrower. 
The US Borrower shall ensure that the UK Borrower is on the Funding
Date, and shall at all times thereafter be, a direct wholly owned Subsidiary of
the US Borrower, and Holdings and the US Borrower agree that the UK Borrower is
not permitted to be sold, transferred or otherwise disposed of pursuant to Section 10.4.

 

9.17.        Sale and Purchase Agreement.  The US Borrower and any applicable Restricted
Subsidiary shall not amend or waive any of the terms of the Sale and Purchase
Agreement in any way that would reasonably be expected to be materially adverse
to the interests of the Lenders.  The US
Borrower and any applicable Restricted Subsidiary shall consult with the Agents
in connection with any litigation or arbitration proceeding to which it is a party
involving the Sale and Purchase Agreement.

 

9.18.        Post-Closing Obligations.  (a)   
To the extent any of the documents listed in Sections 6.1(e) to 6.1(w) inclusive,
Sections 6.2(b) to 6.2(h) inclusive, Sections 6.2(k) and 6.2
(l), Sections 6.3(c) to 6.3(k) inclusive and Sections 6.6 to 6.8
inclusive shall not be delivered on or prior to the Funding Date or any of the
other documents or actions required to be delivered or taken pursuant to Section 6
shall not be delivered or taken on or prior to the Funding Date, each of the US
Borrower and the UK Borrower (as applicable) shall, on or prior to the Funding
Date, prepare a schedule (the “Post-Closing Schedule”), substantially in
the form of Exhibit T, identifying such

 

134

 

documents
that are not delivered and/or actions that are not taken and shall (i) deliver,
or cause the applicable Subsidiaries to deliver, the documents listed on the
Post-Closing Schedule to the Administrative Agent within 30 days following the
Funding Date and (ii) take, or cause the applicable Subsidiaries to take,
each of the actions specified in Section 6.2 within 30 days following the
Funding Date; provided, that, without
the consent of any Lender, the Administrative Agent and/or the Collateral Agent
may (in their respective sole discretion) within 30 days following the Funding
Date extend such 30 day period on a one-time basis for an additional period not
to exceed 30 days.  It is understood and
agreed that any period available for the delivery of documents and the taking
of actions provided by this Section 9.18 shall not be in addition to, and
shall run concurrently with, any Clean-Up Period provided in Section 7.4.

 

(b)  Each of Holdings, the US Borrower
and the UK Borrower shall, as promptly as practicable after the Funding Date
(but in any event, no later than October 31, 2004), cause (i) the
Singapore Guarantee and the Singapore Security Agreement to be executed by the
Singapore Guarantors and the other Restricted Subsidiaries party thereto, (ii) the
Singapore Pledge Agreements to be executed by the US Borrower and (iii) Section 9.15(a) to
be complied with in respect of such collateral. 
Concurrently with the delivery of the Singapore Guarantee, the Singapore
Security Agreement and the Singapore Pledge Agreements, the Administrative
Agent shall have received an executed legal opinion of Allen &
Gledhill (or such other counsel acceptable to the Administrative Agent, acting
reasonably), in form and substance acceptable to the Administrative Agent,
acting reasonably, delivered to the Administrative Agent and for the benefit of
the Lenders to the US Borrower and the UK Borrower.  Concurrently with the delivery of the
Singapore Pledge Agreements, all outstanding equity interests in whatever form
owned by or on behalf of each pledgor under the Singapore Pledge Agreements
shall have been pledged pursuant to the Singapore Pledge Agreements and the
Administrative Agent shall have received all certificates representing
securities pledged under the Singapore Pledge Agreements, accompanied by
instruments of transfer and undated stock powers endorsed in blank.

 

(c)  The US Borrower agrees that, as
promptly as practicable after the Funding Date (but in any event, no later than
October 31, 2004), it shall cause Rockwood Specialties GmbH to exercise
its voting rights in each of Silo Pigmente GmbH and Rockwood Pigmente Holding
GmbH to the effect that:

 

(i)  a partners’ resolution of Brockhues
shall be passed to resolve that Silo Pigmente GmbH and Rockwood Pigmente
Holding GmbH may pledge all of the partners’ interests in Brockhues owned by
them in favor of the Administrative Agent; and

 

(ii)  Silo Pigmente GmbH and Rockwood
Pigmente Holding GmbH shall pledge all of the partners’ interests in Brockhues
owned by them in the form substantially set forth in Exhibit C-7 hereto
following the partners’ resolution described in clause (i) above.

 

135

 

SECTION 10.         Negative Covenants

 

Each of Holdings (with respect to Section 10.3(B) and
Section 10.6 only), the US Borrower and the UK Borrower hereby covenant
and agree that on the Funding Date and thereafter, for so long as this
Agreement is in effect and until the Commitments, the Swingline Commitment and
each Letter of Credit have terminated and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations incurred hereunder, are
paid in full:

 

10.1.        Limitation on Indebtedness.  The US Borrower and the UK Borrower will not,
and will not permit any of the Restricted Subsidiaries to, create, incur,
assume or suffer to exist any Indebtedness, except:

 

(a)  Indebtedness arising under the Credit
Documents and arising under any Revolver Refinancing Indebtedness;

 

(b)  Indebtedness of (i) the US Borrower
to any Subsidiary of the US Borrower and (ii) any Subsidiary to the US
Borrower or any other Restricted Subsidiary of the US Borrower;

 

(c)  Indebtedness in respect of any bankers’
acceptance, letter of credit, warehouse receipt or similar facilities entered
into in the ordinary course of business;

 

(d)  except as provided in clauses (j) and
(k) below, Guarantee Obligations incurred by (i) Restricted
Subsidiaries in respect of Indebtedness of the US Borrower or other Restricted
Subsidiaries that is permitted to be incurred under this Agreement and (ii) the
US Borrower in respect of Indebtedness of the Restricted Subsidiaries that is
permitted to be incurred under this Agreement; provided, that there
shall be no Guarantee Obligations (a) by a Restricted Foreign Subsidiary
of any Indebtedness of the US Borrower and (b) in respect of the
Permitted Subordinated Debt, Permitted Senior Subordinated Debt or Permitted
Additional Notes, unless such Guarantee Obligations are made by a Guarantor
(other than Holdings) and such Guarantee is unsecured and subordinated (other
than in the case of Permitted Additional Notes which are senior notes) to the
Obligations to the same extent as the applicable Permitted Subordinated Debt or
Permitted Senior Subordinated Debt, as the case may be;

 

(e)  Guarantee Obligations incurred in the
ordinary course of business in respect of obligations to suppliers, customers,
franchisees, lessors and licensees;

 

(f)  (i) Indebtedness (including
Indebtedness arising under Capital Leases) incurred within 270 days of the
acquisition, construction or improvement of fixed or capital assets to finance
the acquisition, construction or improvement of such fixed or capital assets or
otherwise incurred in respect of Capital Expenditures permitted by Section 10.11,
(ii) Indebtedness arising under Capital Leases entered into in connection
with Permitted Sale Leasebacks and (iii) Indebtedness arising under
Capital Leases, other than Capital Leases in effect on the Fourth Amendment
Effective Date and Capital Leases entered into pursuant to 

 

136

 

subclauses (i) and (ii) above; provided, that the
aggregate amount of Indebtedness incurred pursuant to this subclause (iii) shall
not exceed $75,000,000 at any time outstanding, and (iv) any refinancing,
refunding, renewal or extension of any Indebtedness specified in
subclause (i), (ii) or (iii) above; provided  further,
that the principal amount thereof is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal
or extension;

 

(g)  Indebtedness outstanding on the Closing
Date and listed on Schedule 10.1, and any refinancing, refunding, renewal
or extension thereof; provided, that (i) the principal amount
thereof is not increased above the principal amount thereof outstanding
immediately prior to such refinancing, refunding, renewal or extension, except
to the extent otherwise permitted hereunder and (ii) the direct and
contingent obligors with respect to such Indebtedness are not changed;

 

(h)  Indebtedness in respect of Hedge
Agreements;

 

(i)  Indebtedness in respect of (i) Permitted
Subordinated Debt, and (ii) Permitted Senior Subordinated Debt and (iii) Permitted
Additional Notes, in each case, subject, in the case of any Guarantee
Obligations in respect thereof, to clause (d) above;

 

(j)  (i) Indebtedness of a Person or
Indebtedness attaching to assets of a Person that, in either case, becomes a
Restricted Subsidiary or Indebtedness attaching to assets that are acquired by
the US Borrower or any Restricted Subsidiary, in each case after the Closing
Date as the result of a Permitted Acquisition; provided, that (w) such
Indebtedness existed at the time such Person became a Restricted Subsidiary or
at the time such assets were acquired and, in each case, was not created in
anticipation thereof, (x) such Indebtedness is not guaranteed in any
respect by the US Borrower or any Restricted Subsidiary (other than any such
Person that so becomes a Restricted Subsidiary), (y)(A) the capital stock
of such Person is pledged to the Administrative Agent to the extent required
under Section 9.11 or Section 9.12 and (B) such Person executes
a supplement to each of the Guarantee, the Security Agreement, the applicable
Foreign Guarantee and/or the applicable Foreign Security Documents and the
Pledge Agreement (or alternative guarantee and security arrangements in
relation to the Obligations) to the extent required under Sections 9.11 or
9.12, as applicable; provided, that the requirements of this
subclause (y) shall not apply to an aggregate amount at any time
outstanding of up to (and including) the Guarantee and Collateral Exception
Amount at such time of the aggregate of (1) such Indebtedness and (2) all
Indebtedness as to which the proviso to clause (k)(i)(y) below then
applies, and (z) in respect of any such Indebtedness incurred on and after
the Fourth Amendment Effective Date, the aggregate amount of such Indebtedness
and all Indebtedness incurred under clause (k) below, when taken
together, does not exceed $450,000,000 in the aggregate at any time
outstanding, and (ii) any refinancing, refunding, renewal or extension of
any Indebtedness specified in

 

137

 

subclause (i) above; provided, that except to the
extent otherwise permitted hereunder, (x) the principal amount of any such
Indebtedness is not increased above the principal amount thereof outstanding
immediately prior to such refinancing, refunding, renewal or extension and (y) the
direct and contingent obligors with respect to such Indebtedness are not
changed;

 

(k)  (i) Indebtedness of the US Borrower
or any Restricted Subsidiary incurred to finance a Permitted Acquisition; provided,
that (x) such Indebtedness is not guaranteed in any respect by any
Restricted Subsidiary (other than any Person acquired (the “acquired Person”)
as a result of such Permitted Acquisition or the Restricted Subsidiary so
incurring such Indebtedness) or, in the case of Indebtedness of any Restricted
Subsidiary, by the US Borrower, (y)(A) the US Borrower or such Restricted
Subsidiary pledges the capital stock of such acquired Person to the
Administrative Agent to the extent required under Section 9.11 or Section 9.12
and (B) such acquired Person executes a supplement to the Guarantee, the
Security Agreement, the applicable Foreign Guarantee and/or the applicable
Foreign Security Documents and the Pledge Agreement (or alternative guarantee
and security arrangements in relation to the Obligations) to the extent
required under Sections 9.11 or 9.12, as applicable; provided, that
the requirements of this subclause (y) shall not apply to an
aggregate amount at any time outstanding of up to (and including) the amount of
the Guarantee and Collateral Exception Amount at such time of the aggregate of (1) such
Indebtedness and (2) all Indebtedness as to which the proviso to
clause (j)(i)(y) above then applies, and (z) in respect of any
such Indebtedness incurred on and after the Fourth Amendment Effective Date,
the aggregate amount of such Indebtedness and all Indebtedness assumed or
permitted to exist under clause (j) above, when taken together, does
not exceed $450,000,000 in the aggregate at any time outstanding, and (ii) any
refinancing, refunding, renewal or extension of any Indebtedness specified in
subclause (i) above; provided, that (x) the principal
amount of any such Indebtedness is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal
or extension and (y) the direct and contingent obligors with respect to
such Indebtedness are not changed, except to the extent otherwise permitted
hereunder;

 

(l)  (i) Indebtedness of Restricted
Foreign Subsidiaries existing as of the Fourth Amendment Effective Date and any
refinancing, refunding, renewal or extension thereof; provided, that the
principal amount thereof is not increased above the principal amount thereof
outstanding as of the Fourth Amendment Effective Date and (ii)(x) Indebtedness
of Restricted Foreign Subsidiaries incurred after the Fourth Amendment
Effective Date in an aggregate amount at any time outstanding not to exceed
$150,000,000;

 

(m)  (i) Indebtedness incurred in connection
with any Permitted Sale Leaseback and (ii) any refinancing, refunding,
renewal or extension of any Indebtedness specified in subclause (i) above;
provided, that, except to the extent otherwise permitted hereunder, (x) the
principal amount of any such Indebtedness is not increased above the principal
amount thereof outstanding immediately prior

 

138

 

to such refinancing, refunding, renewal or extension and (y) the
direct and contingent obligors with respect to such Indebtedness are not
changed;

 

(n)  (i) additional Indebtedness incurred
and outstanding pursuant to this clause (n) prior to the Restatement Date,
(ii) additional Indebtedness incurred after the Restatement Date in an
aggregate amount not to exceed $1,000,000,000 at any time outstanding; provided,
that with respect to any Indebtedness incurred pursuant to this subclause (ii) of
this clause (n) on or after the Restatement Date the Net Cash Proceeds
therefrom are (A) applied, immediately after the receipt thereof, to the
prepayment of Term Loans in accordance with Section 5.2 to the extent
required thereby or (B) to the extent not required to be so applied, used
solely for Permitted Acquisitions or other general corporate purposes of the
Borrowers and the Subsidiaries; provided, further that any Net
Cash Proceeds of such Indebtedness applied, immediately after the receipt
thereof, to the prepayment of Term Loans in accordance with Section 5.2
will not reduce the portion of such $1,000,000,000 available pursuant to this
subclause (ii) of this clause (n) and (iii) any refinancing,
refunding, renewal or extension of any Indebtedness specified in sub-clauses (i) and
(ii) above; provided, that in the case of any such refinancing,
refunding, renewal or extension relating to Indebtedness under sub-clause (i),
the principal amount thereof is not increased above the principal amount
thereof outstanding as of the Restatement Date;

 

(o)  Indebtedness in respect of Permitted
Additional Subordinated Notes to the extent that the Net Cash Proceeds
therefrom are, immediately after the receipt thereof, applied to the prepayment
of Term Loans in accordance with Section 5.2;

 

(p)  the incurrence by the US Borrower or any
Restricted Subsidiary of Indebtedness represented by letters of credit, bank
guarantees or other similar instruments; provided, that such
Indebtedness shall not exceed $50,000,000 in the aggregate at any time
outstanding; and

 

(q)  Indebtedness incurred by the US Borrower
to the extent that the Net Cash Proceeds therefrom are, immediately after the
receipt thereof, applied solely to the prepayment of Tranche A-1 Term Loans,
Tranche A-2 Term Loans, Tranche E Term Loans and Tranche G Term Loans in
accordance with Section 5.2; provided, that (A) the terms of
such Indebtedness will not provide for any scheduled repayment, mandatory
redemption or sinking fund obligations prior to the Tranche I Term Loan
Maturity Date (other than customary offers to repurchase upon a change of
control, asset sale or event of loss and customary acceleration rights after an
event of  default) and (B) no
Subsidiary of the US Borrower (other than the UK Borrower) is a borrower or
guarantor with respect to such Indebtedness unless such Subsidiary is a Credit
Party which shall have previously or substantially concurrently guaranteed the
Obligations.

 

10.2.        Limitation on Liens. 
The US Borrower and the UK Borrower will not, and will not permit any of
the Restricted Subsidiaries to, create, incur, assume or 

 

139

 

suffer
to exist any Lien upon any property or assets of any kind (real or personal,
tangible or intangible) of the US Borrower or any Restricted Subsidiary,
whether now owned or hereafter acquired, except:

 

(a)  Liens arising under the Credit Documents;

 

(b)  Permitted Liens;

 

(c)  Liens securing Indebtedness permitted
pursuant to Section 10.1(f); provided, that such Liens attach at
all times only to the assets so financed;

 

(d)  Liens existing on the Closing Date and
listed on Schedule 10.2;

 

(e)  the replacement, extension or renewal of
any Lien permitted by clauses (a) through (d) above and clauses (f) and
(g) of this Section 10.2 upon or in the same assets theretofore
subject to such Lien or the replacement, extension or renewal (without increase
in the amount or change in any direct or contingent obligor except to the
extent otherwise permitted hereunder) of the Indebtedness secured thereby;

 

(f)  Liens existing on the assets of any Person
that becomes a Restricted Subsidiary, or existing on assets acquired, pursuant
to a Permitted Acquisition to the extent the Liens on such assets secure
Indebtedness permitted by Section 10.1(j); provided, that such
Liens attach at all times only to the same assets that such Liens attached to,
and secure only the same Indebtedness that such Liens secured, immediately
prior to such Permitted Acquisition;

 

(g)  (i) Liens placed upon the capital
stock of any Restricted Subsidiary acquired pursuant to a Permitted Acquisition
to secure Indebtedness of the US Borrower or any other Restricted Subsidiary
incurred pursuant to Section 10.1(k) in connection with such
Permitted Acquisition and (ii) Liens placed upon the assets of such
Restricted Subsidiary to secure a guarantee by such Restricted Subsidiary or any
such Indebtedness of the US Borrower or any other Restricted Subsidiary;

 

(h)  (i) Liens existing as of the Fourth
Amendment Effective Date and any replacement, extension or renewal (without
increase in the amount or change in any direct or contingent obligor except to
the extent otherwise permitted hereunder) of the Indebtedness secured thereby
and (ii) additional Liens incurred after the Fourth Amendment Effective
Date so long as the aggregate principal amount of the obligations so secured
does not exceed $75,000,000 at any time outstanding;

 

(i)  Liens securing Indebtedness permitted
pursuant to Section 10.1(p); provided, that if such Liens shall
exist on any Collateral, the beneficiaries thereof (or an agent on their
behalf) shall have entered into an intercreditor agreement with the Collateral
Agent that is reasonably satisfactory to the Collateral Agent;

 

140

 

(j)  Liens securing Revolver Refinancing
Indebtedness permitted pursuant to Section 10.1(a); and

 

(k)  Liens securing Indebtedness permitted
pursuant to Section 10.1(q); provided, that such Liens may be
either a first priority Lien on the Collateral that is pari passu with the Lien
securing the Obligations or a Lien ranking junior to the Lien on the Collateral
securing the Obligations (but may not be secured by any other assets that are
not Collateral) and, in any such case, the beneficiaries thereof (or an agent
on their behalf) shall have entered into an intercreditor agreement with the
Collateral Agent that is reasonably satisfactory to the Collateral Agent.

 

10.3.        Limitation on Fundamental Changes.  (A) Except as expressly permitted by Section 10.4
or 10.5, each of the US Borrower and the UK Borrower will not, and will not
permit any of the Restricted Subsidiaries to, enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all its business units,
assets or other properties, except that:

 

(a)  any Subsidiary of the US Borrower or any
other Person may be merged or consolidated with or into the US Borrower; provided,
that (i) the US Borrower shall be the continuing or surviving corporation
or the Person formed by or surviving any such merger or consolidation (if other
than the US Borrower) shall be an entity organized or existing under the laws
of the United States, any state thereof, the District of Columbia or any
territory thereof (the US Borrower or such Person, as the case may be, being
herein referred to as the “Successor Borrower”), (ii) the Successor
Borrower (if other than the US Borrower) shall expressly assume all the
obligations of the US Borrower under this Agreement and the other Credit
Documents pursuant to a supplement hereto or thereto in form reasonably
satisfactory to the Administrative Agent, (iii) no Default or Event of
Default would result from the consummation of such merger or consolidation, (iv) the
Successor Borrower shall be in compliance, on a pro  forma basis
after giving effect to such merger or consolidation, with the covenants set
forth in Sections 10.9 and 10.10, as such covenants are recomputed as at
the last day of the most recently ended Test Period under such Section as
if such merger or consolidation had occurred on the first day of such Test
Period, (v) each Guarantor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the Guarantee confirmed that its
Guarantee shall apply to the Successor Borrower’s obligations under this
Agreement, (vi) each Subsidiary grantor and each Subsidiary pledgor,
unless it is the other party to such merger or consolidation, shall have by a
supplement to the Security Agreement or the Pledge Agreement, as applicable,
confirmed that its obligations thereunder shall apply to the Successor Borrower’s
obligations under this Agreement, (vii) each mortgagor of a Mortgaged
Property, unless it is the other party to such merger or consolidation, shall
have by an amendment to or restatement of the applicable Mortgage confirmed
that its obligations thereunder shall apply to the Successor Borrower’s
obligations under this Agreement, and (viii) the US Borrower shall have
delivered to the Administrative Agent an officer’s certificate and an opinion

 

141

 

of counsel, each stating that such merger or consolidation and such
supplement to this Agreement or any Security Document comply with this
Agreement; provided  further, that if the foregoing are satisfied,
the Successor Borrower (if other than the US Borrower) will succeed to, and be
substituted for, the US Borrower under this Agreement;

 

(b)  any Subsidiary of the UK Borrower or any
other Person may be merged or consolidated with or into the UK Borrower, provided,
that (i) the UK Borrower shall be the continuing or surviving corporation
or the Person formed by or surviving any such merger or consolidation (if other
than the UK Borrower) shall be a corporation organized or existing under the
laws of England and Wales (the UK Borrower or such Person, as the case may be,
being herein referred to as the “Successor UK Borrower”), (ii) the
Successor UK Borrower (if other than the UK Borrower) shall expressly assume
all the obligations of the UK Borrower under this Agreement and the other
Credit Documents pursuant to a supplement hereto or thereto in form reasonably
satisfactory to the Administrative Agent, (iii) no Default or Event of
Default would result from the consummation of such merger or consolidation, (iv) the
US Borrower shall be in compliance, on a pro  forma basis after
giving effect to such merger or consolidation, with the covenants set forth in
Sections 10.9 and 10.10, as such covenants are recomputed as at the last
day of the most recently ended Test Period under such Section as if such
merger or consolidation had occurred on the first day of such Test Period, (v) the
US Borrower, each Guarantor and each Foreign Subsidiary Guarantor, unless it is
the other party to such merger or consolidation, shall have by a supplement to
the Guarantee or Foreign Subsidiary Guarantee, as the case may be, confirmed
that its Guarantee or Foreign Subsidiary Guarantee, as the case may be, shall
apply to the Successor UK Borrower’s obligations under this Agreement, (vi) each
grantor and each pledgor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the applicable Security Document
confirmed that its obligations thereunder shall apply to the Successor UK
Borrower’s obligations under this Agreement, (vii) each mortgagor of a
Mortgaged Property, unless it is the other party to such merger or
consolidation, shall have by an amendment to or restatement of the applicable
Mortgage confirmed that its obligations thereunder shall apply to the Successor
UK Borrower’s obligations under this Agreement, and (viii) the UK Borrower
shall have delivered to the Administrative Agent an officer’s certificate and
an opinion of counsel, each stating that such merger or consolidation, such
supplement to this Agreement or any Security Document and such amendment or
restatement to any applicable Mortgage, as the case may be, comply with this
Agreement; provided  further, that if the foregoing are satisfied,
the Successor UK Borrower (if other than the UK Borrower) will succeed to, and
be substituted for, the UK Borrower under this Agreement;

 

(c)  any Subsidiary of the US Borrower (other
than the UK Borrower) or any other Person may be merged or consolidated with or
into any one or more Subsidiaries of the US Borrower (other than the UK
Borrower); provided, that (i) in the case of any merger or
consolidation involving one or more Restricted Subsidiaries, (A) a
Restricted Subsidiary shall be the continuing or surviving

 

142

 

corporation or (B) the US Borrower shall take all steps necessary
to cause the Person formed by or surviving any such merger or consolidation (if
other than a Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in
the case of any merger or consolidation involving one or more Guarantors and/or
Foreign Subsidiary Guarantors, as the case may be, a Guarantor or Foreign
Subsidiary Guarantor, as the case may be, shall be the continuing or surviving
corporation or the Person formed by or surviving any such merger or
consolidation (if other than a Guarantor or Foreign Subsidiary Guarantor, as
the case may be) shall execute a supplement to the Guarantee Agreement, the
Pledge Agreement and the Security Agreement and any applicable Mortgage or the
analogous Foreign Security Documents, as the case may be, in form and substance
reasonably satisfactory to the Administrative Agent in order to become a
Guarantor or Foreign Subsidiary Guarantor, as the case may be, and pledgor,
mortgagor and grantor of Collateral for the benefit of the Secured Parties, (iii) no
Default or Event of Default would result from the consummation of such merger
or consolidation, (iv) the US Borrower shall be in compliance, on a pro
forma basis after giving effect to such merger or consolidation, with
the covenants set forth in Sections 10.9 and 10.10, as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Section as if such merger or consolidation had occurred on the first day
of such Test Period, and (v) the US Borrower shall have delivered to the
Administrative Agent an Officers’ Certificate stating that such merger or
consolidation and such supplements to any Security Document comply with this
Agreement;

 

(d)  any Restricted Subsidiary that is not a
Guarantor or a Foreign Subsidiary Guarantor may sell, lease, transfer or
otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the US Borrower, the UK Borrower, a Guarantor, a Foreign
Subsidiary Guarantor or any other Restricted Subsidiary of the US Borrower;

 

(e)  any Guarantor or any Foreign Subsidiary
Guarantor may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the US Borrower, the UK
Borrower or any other Guarantor or Foreign Subsidiary Guarantor; and

 

(f)  any Restricted Subsidiary (other than the
UK Borrower) may liquidate or dissolve if (x) the US Borrower determines
in good faith that such liquidation or dissolution is in the best interests of
the US Borrower and is not materially disadvantageous to the Lenders and (y) to the extent such Restricted
Subsidiary is a Credit Party, any assets or business not otherwise disposed of
or transferred in accordance with Section 10.4 or 10.5, or, in the case of
any such business, discontinued, shall be transferred to, or otherwise owned or
conducted by, another Credit Party after giving effect to such liquidation or
dissolution.

 

(B) Holdings will not engage in any
business or activity other than (a) the ownership of all the outstanding
shares of capital stock of the US Borrower, (b) maintaining its corporate
existence, (c) participating in tax, accounting and other 

 

143

 

administrative matters as a
member of the consolidated group of Parent, (d) the performance of the
Credit Documents to which it is a party, (e) making any Dividend permitted
by Section 10.6 or holding any cash received in connection with Dividends
made by the US Borrower in accordance with Section 10.6 pending
application thereof by Holdings in the manner contemplated by Section 10.6,
(f) the performance of the 2011 Senior Notes Indenture, (g) the
issuance of PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock and
the performance under such PIK Refinancing Indebtedness or PIK Refinancing
Preferred Stock, (h) so long as no Default or Event of Default has
occurred and is continuing, the prepayment, repurchase, retirement or
redemption of the 2011 Senior Notes, PIK Refinancing Indebtedness and/or PIK
Refinancing Preferred Stock (x) from the proceeds of Dividends received in
accordance with Section 10.6(g) and (y) from the amount of any
capital contributions made in cash to Holdings from and including the Business
Day immediately following the Closing Date through and including the date of
such redemption, repurchase or retirement, including contributions with the
proceeds from any issuance of equity securities by any of the Parent Companies
or Holdings and (i) activities incidental to the businesses or activities
described in clauses (a) to (h) of this Section 10.3(B).  Holdings will not own or acquire any assets
(other than shares of capital stock of the US Borrower, cash and Permitted
Investments) or incur any liabilities (other than liabilities under the Credit
Documents, liabilities under its guarantee of the Subordinated Notes and the
Senior Subordinated Notes (provided, that Holdings shall not guarantee
the Subordinated Notes or the Senior Subordinated Notes unless (x) Holdings
also has guaranteed the Obligations pursuant to the Guarantee, (y) such
guarantee of the Subordinated Notes or the Senior Subordinated Notes is
unsecured and subordinated to such guarantee of the Obligations on terms no
less favorable to the Lenders than the subordination provisions of the
Subordinated Notes or the Senior Subordinated Notes, as the case may be, and (z) such
guarantee of the Subordinated Notes or the Senior Subordinated Notes provides
for the release and termination thereof, without action by any party, upon any
release and termination of such guarantee of the Obligations), liabilities
under the 2011 Senior Notes Indenture, liabilities in respect of PIK
Refinancing Indebtedness or PIK Refinancing Preferred Stock and liabilities
imposed by law, including tax liabilities, and other liabilities incidental to
its existence and business and activities permitted by this Agreement).

 

10.4.        Limitation on Sale of Assets.  Each of the US Borrower and the UK Borrower
will not, and will not permit any of the Restricted Subsidiaries to, (i) convey,
sell, lease, assign, transfer or otherwise dispose of any of its property,
business or assets (including receivables and leasehold interests), whether now
owned or hereafter acquired (other than any such sale, transfer, assignment or
other disposition resulting from any casualty or condemnation of any assets of
the US Borrower or the Restricted Subsidiaries) or (ii) sell to any Person
(other than the US Borrower, a Guarantor or a Restricted Foreign Subsidiary)
any shares owned by it of any Restricted Subsidiary’s capital stock, except
that:

 

(a)  the US Borrower and the Restricted
Subsidiaries may sell, transfer or otherwise dispose of used or surplus equipment,
vehicles, inventory and other assets in the ordinary course of business;

 

144

 

(b)  the US Borrower and the Restricted
Subsidiaries may sell, transfer or otherwise dispose of other assets (other
than accounts receivable) for fair value, provided, that in the case of
any such sale, transfer or other disposition on and after the Restatement Date (i) the
amount of any such sale, transfer or disposal, together with the aggregate
amount of any previous sales, transfers and disposals made by the US Borrower
and the Restricted Subsidiaries, taken as a whole, pursuant to this
clause (b) on and after the Restatement Date, shall not exceed in the
aggregate an amount equal to 20% of Consolidated Total Assets as of March 31,
2009, (ii) any consideration in excess of $5,000,000 received by the US
Borrower or any Guarantor in connection with such sales, transfers and other
dispositions of assets pursuant to this clause (b) that is in the
form of Indebtedness shall be pledged to the Administrative Agent pursuant to Section 9.12,
(iii) with respect to any such sale, transfer or disposition (or series of
related sales, transfers or dispositions) in an aggregate amount in excess of
$25,000,000 the US Borrower shall be in compliance, on a pro  forma
basis after giving effect to such sale, transfer or disposition, with the
covenants set forth in Sections 10.9 and 10.10, as such covenants are
recomputed as at the last day of the most recently ended Test Period under such
Sections as if such sale, transfer or disposition had occurred on the first day
of such Test Period and (iv) after giving effect to any such sale,
transfer or disposition, no Default or Event of Default shall have occurred and
be continuing;

 

(c)  the US Borrower and the Restricted
Subsidiaries may make sales of assets to the US Borrower or to any Restricted
Subsidiary; provided, that any such sales to Restricted Foreign
Subsidiaries shall be for fair value;

 

(d)  any Restricted Subsidiary may effect any
transaction permitted by Section 10.3;

 

(e)  in addition to selling or transferring
accounts receivable pursuant to the other provisions hereof, the US Borrower
and the Restricted Subsidiaries may (i) sell or discount without recourse
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof and (ii) sell or transfer
accounts receivable and related rights pursuant to customary receivables
financing facilities or factoring arrangements; provided, that the aggregate
amount of accounts receivable subject to such receivables financing facilities
or factoring arrangements at any one time shall not exceed $200,000,000 or any
greater amount so long as any Net Cash Proceeds in respect of accounts
receivable in excess of $200,000,000 subject to such receivables financing
facilities or factoring arrangements at any one time are promptly applied to
prepay the Term Loans in the manner set forth in Sections 5.2(c) and (d);
and

 

(f)  the sale of the Groupe Novasep segment.

 

10.5.        Limitation on Investments.  The US Borrower will not, and will not permit
any of the Restricted Subsidiaries to, make any advance, loan, extensions of 

 

145

 

credit
or capital contribution to, or purchase any stock, bonds, notes, debentures or
other securities of or any assets of, or make any other investment in, any
Person, except:

 

(a)  extensions of trade credit and asset
purchases in the ordinary course of business;

 

(b)  Permitted Investments;

 

(c)  loans and advances to officers, directors
and employees of Parent or any of its Subsidiaries (i) to finance the
purchase of capital stock of Parent (provided, that the amount of such
loans and advances used to acquire such capital stock shall be contributed by
Holdings to the US Borrower in cash as common equity using the proceeds of
prior contributions of common equity by Parent to PIK Holdco and by PIK Holdco
to Holdings, respectively) and (ii) for additional purposes not
contemplated by subclause (i) above in an aggregate principal amount
at any time outstanding with respect to this clause (ii) not
exceeding $25,000,000;

 

(d)  investments existing on the Closing Date
and listed on Schedule 10.5, and any extensions, renewals or reinvestments
thereof, so long as the aggregate amount of all investments pursuant to this
clause (d) is not increased at any time above the amount of such
investments existing on the Closing Date;

 

(e)  investments in Hedge Agreements permitted
by Section 10.1(h);

 

(f)  investments received in connection with
the bankruptcy or reorganization of suppliers or customers and in settlement of
delinquent obligations of, and other disputes with, customers arising in the
ordinary course of business;

 

(g)  investments to the extent that payment for
such investments is made solely with capital stock of any of the Parent
Companies;

 

(h)  investments constituting non-cash proceeds
of sales, transfers and other dispositions of assets to the extent permitted by
Section 10.4;

 

(i)  investments in any Guarantor (other than
Holdings), the US Borrower, the UK Borrower or any Foreign Subsidiary
Guarantor, and investments (other than investments representing a Permitted
Acquisition or any other acquisition, by merger or otherwise, of any assets or
capital stock or other equity interests of any Person who is not, immediately
prior to such acquisition, a Restricted Subsidiary) by any Restricted
Subsidiary that is not a US Subsidiary Guarantor or a Foreign Subsidiary
Guarantor in another Restricted Subsidiary that is not a US Subsidiary
Guarantor or a Foreign Subsidiary Guarantor;

 

(j)  investments constituting Permitted
Acquisitions; provided, that, in the case of any Permitted Acquisition
on or after the Restatement Date the aggregate amount of any such investment,
as valued at the fair market value of such

 

146

 

investment at the time each such investment is made, made by the US
Borrower or any Restricted Subsidiary in any Restricted Foreign Subsidiary, to
the extent that such Restricted Foreign Subsidiary does not become a Foreign
Subsidiary Guarantor pursuant to Section 9.11 and does not enter into the
guarantee and collateral arrangements contemplated thereby, shall not exceed
the Available Amount at the time of such investment plus an amount equal
to any repayments, interest, returns, profits, distributions, income and
similar amounts actually received in cash in respect of any such investment
(which amount shall not exceed the amount of such investment valued at the fair
market value of such investment at the time such investment was made);

 

(k)  investments in the equity interests of one
or more newly formed persons that are received in consideration of the
contribution by the US Borrower or its applicable Restricted Subsidiaries of
assets (including capital stock) to such person or persons; provided,
that, in the case of any such investment made on or after the Fourth Amendment
Effective Date (i) the fair market value of such assets, determined on
arms-length basis, so contributed pursuant to this paragraph (k) shall not
in the aggregate exceed $150,000,000, (ii) with respect to investments in
Foreign Joint Ventures, the sum of all investments in Foreign Joint Ventures
made pursuant to this Section 10.5(k) prior to the date thereof and
all investment in Foreign Joint Ventures made pursuant to Section 10.5(m)(ii) below
prior to the date thereof, when taken together, as valued at the fair market
value of such investment at the time each such investment is made, does not
exceed $250,000,000 plus an amount equal to any repayments, interest,
returns, profits, distributions, income and similar amounts actually received
in cash in respect of any such investment (which amount shall not exceed the
amount of such investment valued at the fair market value of such investment at
the time such investment was made) in the aggregate and (iii) in respect
of each such contribution, an Authorized Officer of the US Borrower shall
certify, in a form to be agreed upon by the US Borrower and the
Administrative Agent (x) after giving effect to such contribution, no
Default or Event of Default shall have occurred and be continuing, (y) the
fair market value of the assets so contributed and (z) that the
requirements of paragraph (i) of this proviso remain satisfied;

 

(l)  investments made to repurchase or retire
common stock of Parent owned by any employee stock ownership plan or key
employee stock ownership plan of the Parent Companies, Holdings or the US
Borrower;

 

(m)  (i) additional investments (including
investments in Minority Investments and Unrestricted Subsidiaries) made under
this clause (m) prior to the Restatement Date or (ii) such additional
investments (including investments in Minority Investments and Unrestricted
Subsidiaries) made thereafter, as valued at the fair market value of such
investment at the time each such investment is made, in an aggregate amount at
the time of such investment not in excess of the Available Amount at such time plus
an amount equal to any repayments, interest, returns, profits, distributions,
income and similar amounts actually received in cash in respect of any such
investment (which amount shall not exceed the 

 

147

 

amount of such investment valued at the fair market value of such
investment at the time such investment was made); provided, that with
respect to investments in Foreign Joint Ventures made on or after the
Restatement Date, the sum of all investments in Foreign Joint Ventures made pursuant
to Section 10.5 (k) above prior to the date thereof and all
investment in Foreign Joint Ventures made pursuant to this Section 10.5(m)(ii) prior
to the date thereof, when taken together, as valued at the fair market value of
such investment at the time each such investment is made, does not exceed
$250,000,000 plus an amount equal to any repayments, interest, returns,
profits, distributions, income and similar amounts actually received in cash in
respect of any such investment (which amount shall not exceed the amount of
such investment valued at the fair market value of such investment at the time
such investment was made) in the aggregate;

 

(n)  investments permitted under Section 10.6;
and

 

(o)  contributions
to a “rabbi” trust within the meaning of Revenue Procedure 92-64 or
contributions to a trust which is qualified under Section 401(a) of
the Code or other grantor trust subject to the claims of creditors in the case
of a bankruptcy of the US Borrower.

 

10.6.        Limitation on Dividends.  Neither Holdings nor the US Borrower will
declare or pay any dividends (other than, (a) in respect of Holdings,
dividends payable solely in its capital stock or rights, warrants or options to
purchase its capital stock and (b) in respect of the US Borrower, dividends
payable solely in its capital stock) or return any capital to its stockholders
or make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire,
directly or indirectly, for consideration, any shares of any class of its
capital stock or the capital stock of any direct or indirect parent now or
hereafter outstanding (or any options or warrants or stock appreciation rights
issued with respect to any of its capital stock), or set aside any funds for
any of the foregoing purposes, or permit any of the Restricted Subsidiaries to
purchase or otherwise acquire for consideration (other than in connection with
an investment permitted by Section 10.5) any shares of any class of the capital
stock of Holdings or the US Borrower, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued with respect to any of
its capital stock) (all of the foregoing “Dividends”); provided,
that, so long as no Default or Event of Default exists or would exist after
giving effect thereto subject to the last sentence of this Section, (a) each
of Holdings and the US Borrower may redeem in whole or in part any of its
capital stock for another class of capital stock or rights to acquire its
capital stock or with proceeds from substantially concurrent equity
contributions or issuances of new shares of its capital stock; provided,
that such other class of capital stock contains terms and provisions at least
as advantageous to the Lenders in all respects material to their interests as
those contained in the capital stock redeemed thereby, (b) Holdings may
repurchase shares of its capital stock (or any options or warrants or stock
appreciation rights issued with respect to any of its capital stock) held by
officers, directors and employees of Parent and its Subsidiaries, with the
proceeds of dividends from the US Borrower which shall also be permitted, so
long as such repurchase is pursuant to, and in accordance with the terms of, management
and/or

 

148

 

employee
stock plans, stock subscription agreements or shareholder agreements, (c) the
US Borrower and the Restricted Subsidiaries may make investments permitted by Section 10.5,
(d) each of Holdings and the US Borrower may pay dividends to, seriatim,
Holdings and any Parent Company; provided, that (i) the aggregate
amount of such dividends (without duplication) paid pursuant to this
clause (d) shall not at any time exceed 50% of Cumulative
Consolidated Net Income Available to Stockholders at such time less the amount
of dividends previously paid pursuant to this clause (d) following
the last day of the most recent fiscal quarter for which Section 9.1
Financials have been delivered to the Lenders under Section 9.1 and (ii) at
the time of the payment of any such dividends and after giving effect thereto,
the Consolidated Total Debt to Consolidated EBITDA Ratio on the date of such
payment of such dividends shall be less than 3.50:1.00, (e) each of the US
Borrower and Holdings may declare and pay dividends and/or make distributions
on its capital stock, as applicable, the proceeds of which will be used by
Parent solely to pay taxes of Parent, PIK Holdco, Holdings, the US Borrower and
the Subsidiaries as part of a consolidated tax filing group, along with
franchise taxes, administrative and similar expenses related to its existence
and ownership of PIK Holdco, Holdings, the US Borrower, as applicable; provided,
that the amount of such dividends does not exceed in any fiscal year the amount
of such taxes and expenses payable for such fiscal year (it being understood
that such expenses shall in no event exceed $5,000,000 in the aggregate per
fiscal year, except that such expenses may exceed $5,000,000 in fiscal year
2007; provided, that such expenses for the period from the Fourth
Amendment Effective Date to December 31, 2007 shall in no event exceed
$5,000,000 in the aggregate), (f) the US Borrower may declare and pay
dividends and/or make distributions on its capital stock, the proceeds of which
will be used by Holdings on and after August 15, 2007 solely to pay cash
interest, if any, of the 2011 Senior Notes as and to the extent that payment of
such interest in cash is required by the 2011 Senior Notes Indenture, (g) the
US Borrower and Holdings may declare and pay dividends and/or make
distributions on its capital stock, as applicable, from Available Excess Cash
Flow, the proceeds of which will be used by Holdings and PIK Holdco solely to
redeem, repurchase or retire 2011 Senior Notes, PIK Notes, PIK Refinancing
Preferred Stock or PIK Refinancing Indebtedness if (x) at the time of the
payment of such dividends and after giving effect thereto the Consolidated
Total Debt to Consolidated EBITDA Ratio on the date of such payment of such
dividends shall be less than 2.25 to 1.00 and (y) the
US Borrower applies an amount equal to the proceeds used for such redemption,
repurchase or retirement of 2011 Senior Notes, PIK Notes, PIK Refinancing
Preferred Stock or PIK Refinancing Indebtedness
to prepay Term Loans outstanding hereunder in accordance with Section 5.1
hereof on the date of any such redemption, repurchase or retirement of 2011
Senior Notes, PIK Notes, PIK Refinancing Preferred Stock or PIK Refinancing Indebtedness (except to the extent that the US Borrower has already applied not
less than 50.0% of the cumulative amount of Excess Cash Flow for all fiscal
years completed after the Closing Date and prior to the date of such
redemption, repurchase or retirement of 2011 Senior Notes, PIK Notes, PIK Refinancing
Preferred Stock  or PIK
Refinancing Indebtedness pursuant to Section 5.1
or Section 5.2 hereof) and (h) Holdings may issue PIK
Refinancing Indebtedness or PIK 

 

149

 

Refinancing
Preferred Stock in exchange for, or declare and pay dividends and/or make
distributions on its capital stock from the proceeds of the issuance by
Holdings of any PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock
to the extent such proceeds are utilized by PIK Holdco substantially
simultaneously with such issuance to redeem, repurchase or retire, PIK Notes or
Permitted Additional PIK Notes of PIK Holdco that are being refinanced or
replaced by such PIK Refinancing Indebtedness or PIK Refinancing Preferred
Stock.  Notwithstanding anything
contained in this Section 10.6 to the contrary, on and after the
Restatement Date until after the first anniversary of the Restatement Date,
neither Holdings nor the US Borrower will be permitted to declare or pay any
Dividends that would otherwise be permitted by subsections (d) and (g) described
above.

 

10.7.        Limitations on Debt Payments and Amendments.  (a)   
Neither the US Borrower nor any Restricted Subsidiary will prepay,
repurchase or redeem or otherwise defease any Senior Subordinated Notes or any
Subordinated Notes as applicable (it being understood that any payment of
principal prior to May 15, 2011, in the case of Subordinated Notes shall
be deemed a prepayment for purposes of this Section 10.7); provided,
however, that the US Borrower may prepay, repurchase or redeem Senior
Subordinated Notes and/or Subordinated Notes (x) so long as no Default or
Event of Default has occurred and is continuing, for an aggregate price not in
excess of the Available Amount at the time of such prepayment, repurchase or
redemption; provided, that to the extent the Available Amount so
utilized is attributable to Excess Cash Flow in accordance with clause (a)(iii) of
the definition of “Available Amount”, the US Borrower applies an amount equal
to the proceeds used for such prepayment, repurchase or redemption of Senior
Subordinated Notes and/or Subordinated Notes to prepay Term Loans outstanding
hereunder in accordance with Section 5.1 hereof on the date of any such
prepayment, repurchase or redemption of Senior Subordinated Notes and/or
Subordinated Notes (except to the extent that the US Borrower has already
applied not less than 50.0% of the cumulative amount of Excess Cash Flow for
all fiscal years completed after the Closing Date and prior to the date of such
prepayment, repurchase or redemption of Senior Subordinated Notes and/or
Subordinated Notes pursuant to Section 5.1 or Section 5.2 hereof), (y) so
long as no Event of Default described in Section 11.1 or 11.5 has occurred
and is continuing,  with the proceeds of subordinated Indebtedness that (1) is
permitted by Section 10.1 and (2) has terms material to the interests
of the Lenders not materially less advantageous to the Lenders than those of
the Senior Subordinated Notes and/or Subordinated Notes, as the case may be or (z) so
long as no Default or Event of Default has occurred and is continuing, in the
case of the Subordinated Notes only, at any time on or after May 15, 2007
(it being understood that any such prepayment, repurchase or redemption
pursuant to this sub-clause (z) shall be made without utilization of the
Available Amount).

 

(b)  The US Borrower will not waive,
amend, modify, terminate or release the Senior Subordinated Notes Indenture,
the Senior Subordinated Loan Agreement or the Subordinated Note Indenture, to
the extent that any such waiver, amendment, modification, termination or
release would be adverse to the Lenders in any material respect; provided,
that this clause (b) shall not prohibit the repayment of obligations under
the Senior Subordinated Loan Agreement with the Net Cash Proceeds from the
issuance of the Senior Subordinated Notes.

 

150

 

10.8.                        Limitations on
Sale Leasebacks.  The US
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
enter into or effect any Sale Leasebacks, other than Permitted Sale Leasebacks.

 

10.9.                        Senior Secured
Debt to Consolidated EBITDA Ratio.  The US Borrower will not permit the Senior
Secured Debt to Consolidated EBITDA Ratio for any Test Period ending during any
period set forth below to be greater than the ratio set forth below opposite
such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  Restatement Date to and including March 31, 2010

  	
   

  	
  4.40 to 1.00

  	
   

  
	
  April 1, 2010 to and including September 30, 2010

  	
   

  	
  4.25 to 1.00

  	
   

  
	
  October 1, 2010 and thereafter

  	
   

  	
  4.00 to 1.00

  	
   

  

 

10.10.                  Consolidated EBITDA to
Consolidated Interest Expense Ratio.  The US Borrower will not permit the
Consolidated EBITDA to Consolidated Interest Expense Ratio for any Test Period
ending during any period set forth below to be less than the applicable ratio
set forth below opposite such period:

 

	
  Period

  	
   

  	
  Ratio

  	
   

  
	
  October 1, 2004 to March
  31, 2005

  	
   

  	
  1.60 to 1.00

  	
   

  
	
  April 1, 2005 to September
  30, 2005

  	
   

  	
  1.70
  to 1.00

  	
   

  
	
  October 1, 2005 to March
  31, 2007

  	
   

  	
  1.75
  to 1.00

  	
   

  
	
  April 1, 2007 to March 31,
  2008

  	
   

  	
  1.85
  to 1.00

  	
   

  
	
  April 1, 2008 to December
  31, 2008

  	
   

  	
  1.95
  to 1.00

  	
   

  
	
  January 1, 2009 and
  thereafter

  	
   

  	
  2.00
  to 1.00

  	
   

  

 

10.11.                  Capital Expenditures.  The US Borrower and the UK Borrower will not,
and will not permit any of the Restricted Subsidiaries to, make any Capital
Expenditures (other than Permitted Acquisitions that constitute Capital
Expenditures), that would cause the aggregate amount of such Capital
Expenditures made by the US Borrower and the Restricted Subsidiaries in any
fiscal year of the US Borrower set forth below to exceed the sum of (a) the
greater of (i) the amount set forth in the table below opposite such
fiscal year and (ii) an amount equal to 10% multiplied by Consolidated Net
Sales for such fiscal year (such greater amount, the “Permitted Capital
Expenditure Amount”) and (b) the Available Amount as of the last day
of such fiscal year (provided, that no portion of the Available Amount
may be used for Capital Expenditures until the entire amount of the sum of (i) the
Permitted Capital Expenditure Amount for such year and (ii) the
carry-forward amount (as defined below in this Section 10.11) for such
year shall have been used to make Capital Expenditures).

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  January 1, 2004 to December 31, 2004

  	
   

  	
  $

  	
  275,000,000

  	
   

  
	
  January 1, 2005 to December 31, 2005

  	
   

  	
  $

  	
  275,000,000

  	
   

  
	
  January 1, 2006 to December 31, 2006

  	
   

  	
  $

  	
  240,000,000

  	
   

  

 

151

 

	
  Period

  	
   

  	
  Amount

  	
   

  
	
  January 1, 2007 to December 31, 2007

  	
   

  	
  $

  	
  225,000,000

  	
   

  
	
  January 1, 2008 to December 31, 2008

  	
   

  	
  $

  	
  225,000,000

  	
   

  
	
  January 1, 2009 to December 31, 2009

  	
   

  	
  $

  	
  225,000,000

  	
   

  
	
  January 1, 2010 to December 31, 2010

  	
   

  	
  $

  	
  225,000,000

  	
   

  
	
  January 1, 2011 and thereafter

  	
   

  	
  $

  	
  225,000,000

  	
   

  

 

To the extent that Capital Expenditures
(other than Permitted Acquisitions that constitute Capital Expenditures) made
by the US Borrower and the Restricted Subsidiaries during any fiscal year are
less than the Permitted Capital Expenditure Amount for such fiscal year, 100%
of such unused amount (each such amount, a “carry-forward amount”) may
be carried forward to the immediately succeeding fiscal year and utilized to
make such Capital Expenditures in such succeeding fiscal year in the event the
amount set forth above for such succeeding fiscal year has been used (it being
understood and agreed that (a) no carry-forward amount may be carried
forward beyond the first two fiscal years immediately succeeding the fiscal
year in which it arose, (b) no portion of the carry-forward amount
available for any fiscal year may be used until the entire amount of the
Permitted Capital Expenditure Amount for such fiscal year (without giving
effect to such carry-forward amount) shall have been used to make Capital
Expenditures and (c) if the carry-forward amount available for any fiscal
year is the sum of amounts carried forward from each of the two immediately
preceding fiscal years, no portion of such carry-forward amount from the
earlier of the two immediately preceding fiscal years may be used until the
entire portion of such carry-forward amount from the more recent immediately
preceding fiscal year shall have been used for such Capital Expenditures made in
such fiscal year).

 

SECTION 11.         Events of Default

 

Upon the occurrence of any of the following
specified events (each an “Event of Default”):

 

11.1.                        Payments.  The US Borrower or the UK Borrower shall (a) default
in the payment when due of any principal of the Loans or (b) default, and
such default shall continue for five or more days, in the payment when due of
any interest on the Loans or any Fees or any Unpaid Drawings or of any other
amounts owing hereunder or under any other Credit Document; or

 

11.2.                        Representations,
etc.  Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any Security
Document or any certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or

 

11.3.                        Covenants.  Any Credit Party shall (a) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 9.1(e), Section 9.16, Section 9.18 or Section 10
or (b) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Section 11.1 or
11.2 or clause (a) of this Section 11.3) contained in this Agreement,
or any Security Document and such default shall continue unremedied for a
period of at 

 

152

 

least
30 days after receipt of written notice by the US Borrower from the
Administrative Agent or the Required Lenders; or

 

11.4.                        Default Under Other
Agreements.  Any of
Holdings, the US Borrower, the UK Borrower 
or any of the Restricted Subsidiaries shall (i) default in any
payment with respect to any Indebtedness (other than the Obligations) in excess
of $30,000,000 in the aggregate, for Holdings, the US Borrower, the UK
Borrower  and such Subsidiaries, beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created or (ii) default in the observance or
performance of any agreement or condition relating to any such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or (except in the case of Indebtedness consisting of any Hedge
Agreement) any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the holder or
holders of such Indebtedness (or a trustee or agent on behalf of such holder or
holders) to cause, any such Indebtedness to become due prior to its stated
maturity; or (b) without limiting the provisions of clause (a) above,
any such Indebtedness (other than Indebtedness consisting of any Hedge
Agreement) shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment or as a mandatory
prepayment, prior to the stated maturity thereof; or

 

11.5.                        Bankruptcy,
etc.  Any of Holdings, the US
Borrower, the UK Borrower or any Specified Subsidiary shall commence a
voluntary case concerning itself under (a) Title 11 of the United States
Code entitled “Bankruptcy,” or (b) in the case of the UK Borrower and any
Foreign Subsidiary that is a Specified Subsidiary, the bankruptcy and/or
insolvency legislation of its jurisdiction of incorporation, in each case as
now or hereafter in effect, or any successor thereto (collectively, the “Bankruptcy
Code”); or an involuntary case is commenced against any of Holdings, the US
Borrower, the UK Borrower or any Specified Subsidiary and the petition is not
controverted within 10 days after commencement of the case; or an involuntary
case is commenced against any of Holdings, the US Borrower, the UK Borrower or
any Specified Subsidiary and the petition is not dismissed within 60 days after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) or
similar person is appointed for, or takes charge of, all or substantially all
of the property of any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary; or any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary; or there is commenced against any of the US Borrower, the
UK Borrower or any Specified Subsidiary any such proceeding that remains
undismissed for a period of 60 days; or any of the Holdings, the US Borrower,
the UK Borrower or any Specified Subsidiary is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or any of the Holdings, the US Borrower, the UK
Borrower or any 

 

153

 

Specified
Subsidiary makes a general assignment for the benefit of creditors; or any
corporate action is taken by any of Holdings, the US Borrower, the UK Borrower
or any Specified Subsidiary for the purpose of effecting any of the foregoing;
or

 

11.6.                        ERISA.  Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under Section 412
of the Code; any Plan is or shall have been terminated or is the subject of
termination proceedings under ERISA (including the giving of written notice
thereof); an event shall have occurred or a condition shall exist in either
case entitling the PBGC to terminate any Plan or to appoint a trustee to
administer any Plan (including the giving of written notice thereof); any Plan
shall have an accumulated funding deficiency (whether or not waived); any of
Holdings, the US Borrower or any Subsidiary or any ERISA Affiliate has incurred
or is likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971
or 4975 of the Code (including the giving of written notice thereof); (b) there
could result from any event or events set forth in clause (a) of this Section 11.6
the imposition of a lien, the granting of a security interest, or a liability,
or the reasonable likelihood of incurring a lien, security interest or liability;
and (c) such lien, security interest or liability will or would be
reasonably likely to have a Material Adverse Effect; or

 

11.7.                        Guarantee.  The Guarantee or any material provision
thereof shall cease to be in full force or effect or any Guarantor thereunder
or any Credit Party shall deny or disaffirm in writing any Guarantor’s
obligations under the Guarantee (other than pursuant to the terms thereof); or

 

11.8.                        Pledge
Agreement.  The Pledge
Agreement or any material provision thereof shall cease to be in full force or
effect (other than pursuant to the terms hereof or thereof or as a result of
acts or omissions of the Administrative Agent or any Lender) or any pledgor
thereunder or any Credit Party shall deny or disaffirm in writing any pledgor’s
obligations under the Pledge Agreement (other than pursuant to the terms
thereof); or

 

11.9.                        Security
Agreement.  The
Security Agreement or any material provision thereof shall cease to be in full
force or effect (other than pursuant to the terms hereof or thereof or as a
result of acts or omissions of the Administrative Agent or any Lender) or any
grantor thereunder or any Credit Party shall deny or disaffirm in writing any
grantor’s obligations under the Security Agreement (other than pursuant to the
terms thereof); or

 

11.10.                  Mortgages.  Any Mortgage or any material provision of any
Mortgage shall cease to be in full force or effect (other than pursuant to the
terms hereof or thereof or as a result of acts or omissions of the
Administrative Agent or any Lender) or any Mortgagor thereunder or any Credit
Party shall deny or disaffirm in writing any Mortgagor’s obligations under any
Mortgage (other than pursuant to the terms thereof); or

 

154

 

11.11.                  Foreign Guarantees.  Any Foreign Guarantee or any material
provision of any Foreign Guarantee shall cease to be in full force or effect or
any grantor thereunder or any Credit Party shall deny or disaffirm in writing
any grantor’s obligations under any Foreign Guarantee (other than pursuant to
the terms thereof); or

 

11.12.                  Foreign Security Documents.  Any Foreign Security Document or any material
provision of any Foreign Security Document shall cease to be in full force or
effect (other than pursuant to the terms hereof or thereof or as a result of
acts or omissions of the Administrative Agent or any Lender) or any grantor
thereunder or any Credit Party shall deny or disaffirm in writing any grantor’s
obligations under any Foreign Security Document (other than pursuant to the
terms thereof); or

 

11.13.                  Subordination.  The Obligations of the US Borrower and the UK
Borrower, or the obligations of Holdings or any Subsidiaries pursuant to the
Guarantee or any of the Foreign Subsidiary Guarantees, shall cease to
constitute senior Indebtedness under the subordination provisions of any
document or instrument evidencing the Subordinated Notes, the Senior
Subordinated Notes, any loans under the Senior Subordinated Loan Agreement or
any other permitted subordinated Indebtedness or such subordination provisions
shall be invalidated or otherwise cease to be legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their terms;
or

 

11.14.                  Judgments.  One or more judgments or decrees shall be
entered against the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries involving a liability of $30,000,000 or more in the aggregate for
all such judgments and decrees for the US Borrower and the Restricted
Subsidiaries (to the extent not paid or fully covered by insurance provided by
a carrier not disputing coverage) and any such judgments or decrees shall not
have been satisfied, vacated, discharged or stayed or bonded pending appeal
within 60 days from the entry thereof; or

 

11.15.                  Change of Control.  A Change of
Control shall occur;

 

then, and in any such
event, and at any time thereafter, in each case subject to Section 7.4, if
any Event of Default shall then be continuing, the Administrative Agent shall,
upon the written request of the Required Lenders, by written notice to the US
Borrower, take any or all of the following actions, without prejudice to the
rights of the Administrative Agent or any Lender to enforce its claims against
the US Borrower and the UK Borrower, except as otherwise specifically provided
for in this Agreement (provided, that, if an Event of Default specified
in Section 11.5 shall occur with respect to the US Borrower, the UK
Borrower or any Specified Subsidiary, the result that would occur upon the
giving of written notice by the Administrative Agent as specified in clauses
(i), (ii) and (iv) below shall occur automatically without the giving
of any such notice):  (i) declare
the Total Term Loan Commitment, the Total Revolving Credit Commitment and the
Total Extended Revolving Credit Commitment terminated, whereupon the
Commitments and Swingline Commitment, if any, of each Lender or the Swingline
Lender, as the case may be, shall forthwith terminate immediately and any Fees
theretofore accrued shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all

 

155

 

Loans and all Obligations
owing hereunder and thereunder to be, whereupon the same shall become,
forthwith due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the US Borrower and the UK
Borrower; (iii) terminate any Letter of Credit that may be terminated in
accordance with its terms; and/or (iv) direct the US Borrower and the UK
Borrower to pay (and the US Borrower and the UK Borrower agree that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 11.5 with respect to the US Borrower, the UK Borrower or any
Specified Subsidiary, it will pay) to the Administrative Agent at the
Administrative Agent’s Office such additional amounts of cash, to be held as
security for the US Borrower’s and the UK Borrower’s respective reimbursement
obligations for Drawings that may subsequently occur thereunder, equal to the
aggregate Stated Amount of all Letters of Credit issued and then outstanding.

 

SECTION 12.         The Administrative Agent

 

12.1.                        Appointment.  Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Credit Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Administrative Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Credit Document or otherwise
exist against the Administrative Agent. 
Neither Co-Syndication Agent, in its capacity as such, shall have any
obligations, duties or responsibilities under this Agreement.

 

12.2.                        Delegation of
Duties.  The Administrative Agent may
execute any of its duties under this Agreement and the other Credit Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.

 

12.3.                        Exculpatory
Provisions.  Neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Credit Document (except for its or
such Person’s own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the US Borrower, the UK Borrower, any
Guarantor, any Foreign Subsidiary Guarantor, any other Credit Party or any
officer thereof contained in this Agreement or any other Credit Document or in
any certificate, report, statement or other document referred to or provided
for in, or received by the Administrative Agent under or in

 

156

 

connection
with, this Agreement or any other Credit Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Credit Document or for any failure of the US Borrower, the UK
Borrower, any Guarantor, any Foreign Subsidiary Guarantor or any other Credit
Party to perform its obligations hereunder or thereunder.  The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Credit Document, or to inspect the properties, books or
records of the US Borrower or the UK Borrower.

 

12.4.                        Reliance by
Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and statements
of legal counsel (including counsel to the US Borrower and/or the UK Borrower),
independent accountants and other experts selected by the Administrative
Agent.  The Administrative Agent may deem
and treat the Lender specified in the Register with respect to any amount owing
hereunder as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent.  The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Credit Document unless it shall first receive such
advice or concurrence of the Required Lenders as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.  The
Administrative Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Credit Documents in accordance
with a request of the Required Lenders, and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and
all future holders of the Loans.

 

12.5.                        Notice of Default.  The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender or the US Borrower referring to this Agreement, describing such Default
or Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders; provided, that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders (except
to the extent that this Agreement requires that such action be taken only with
the approval of the Required Lenders or each of the Lenders, as applicable).

 

157

 

12.6.                        Non-Reliance on
Administrative Agent and Other Lenders.  Each Lender expressly acknowledges that
neither the Administrative Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the US Borrower, the UK Borrower, any
Guarantor, any Foreign Subsidiary Guarantor or any other Credit Party, shall be
deemed to constitute any representation or warranty by the Administrative Agent
to any Lender.  Each Lender represents to
the Administrative Agent 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 appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the US Borrower, the UK Borrower, any
Guarantor, any Foreign Subsidiary Guarantor and any other Credit Party and made
its own decision to make its Loans hereunder and enter into this
Agreement.  Each Lender also represents
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
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Credit Documents, and to make such investigation as it deems
necessary to inform itself as to the business, operations, property, financial
and other condition and creditworthiness of the US Borrower, the UK Borrower,
any Guarantor, any Foreign Subsidiary Guarantor and any other Credit
Party.  Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, assets, operations, properties, financial
condition, prospects or creditworthiness of the US Borrower, the UK Borrower,
any Guarantor, any Foreign Subsidiary Guarantor or any other Credit Party that
may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

12.7.                        Indemnification.  The Lenders agree to indemnify the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the US Borrower or the UK Borrower and without limiting the obligation of the
US Borrower and the UK Borrower to do so), ratably according to their
respective portions of the Total Credit Exposure in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their respective portions of the Total
Credit Exposure in effect immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (including at any time following the payment of the Loans) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Credit Documents or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or any action
taken or omitted by the Administrative Agent under or in connection with any of
the foregoing; provided, that no Lender shall be liable for the payment
of any portion of such liabilities, obligations, losses, damages,

 

158

 

penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s gross negligence or willful misconduct.  The agreements in this Section 12.7
shall survive the payment of the Loans and all other amounts payable hereunder.

 

12.8.                        Administrative
Agent in its Individual Capacity.  The Administrative Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with the US Borrower, the UK Borrower, any Guarantor, any Foreign
Subsidiary Guarantor and any other Credit Party as though the Administrative
Agent were not the Administrative Agent hereunder and under the other Credit
Documents.  With respect to the Loans
made by it, the Administrative Agent shall have the same rights and powers under
this Agreement and the other Credit Documents as any Lender and may exercise
the same as though it were not the Administrative Agent, and the terms “Lender”
and “Lenders” shall include the Administrative Agent in its individual
capacity.

 

12.9.                        Successor Agent.  The Administrative Agent may resign as
Administrative Agent upon 20 days’ prior written notice to the Lenders and the
US Borrower.  If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the other Credit
Documents, then the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the
US Borrower (which approval shall not be unreasonably withheld), whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans.  After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section 12 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement and the other Credit Documents.

 

12.10.                  Withholding Tax.  To
the extent required by any applicable law, the Administrative Agent may
withhold from any interest payment to any Lender an amount equivalent to any
applicable withholding tax.  If the
Internal Revenue Service or any other Governmental Authority asserts a claim
that the Administrative Agent did not properly withhold tax from amounts paid
to or for the account of any Lender because the appropriate form was not
delivered or was not properly executed or because such Lender failed to notify
the Administrative Agent of a change in circumstance which rendered the
exemption from, or reduction of, withholding tax ineffective or for any other
reason, such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including any penalties or interest and together with all expenses
(including legal expenses, allocated internal costs and out-of-pocket expenses)
incurred.  For the avoidance of doubt,
the foregoing shall have no effect on any obligations of the Borrowers
hereunder.

 

159

 

SECTION 13.         Collateral Allocation Mechanism

 

13.1.                        Implementation
of CAM.  (a)    On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Section 11, (ii) the Lenders shall automatically and
without further act (and without regard to the provisions of Section 14.6)
be deemed to have exchanged interests in the Credit Facilities such that in
lieu of the interest of each Lender in each Credit Facility in which it shall
participate as of such date (including such Lender’s interest in the Specified
Obligations of each Credit Party in respect of each such Credit Facility), such
Lender shall hold an interest in every one of the Credit Facilities (including
the Specified Obligations of each Credit Party in respect of each such Credit
Facility and each L/C Reserve Account established pursuant to Section 13.2
below), whether or not such Lender shall previously have participated therein,
equal to such Lender’s CAM Percentage thereof and (iii) simultaneously
with the deemed exchange of interests pursuant to clause (ii) above, in
the case of any CAM Dollar Lender that has prior to the date thereof notified
the Administrative Agent and the US Borrower in writing that it has elected to
have this clause (iii) apply to it, the interests in the Loans to be
received by such CAM Dollar Lender in such deemed exchange shall, automatically
and with no further action required, be converted into the Dollar Equivalent,
determined using the Exchange Rate calculated as of such date, of such amount
and on and after such date all amounts accruing and owed to such CAM Dollar
Lender in respect of such Obligations shall accrue and be payable in Dollars at
the rate otherwise applicable hereunder; provided, that such CAM
Exchange will not affect the aggregate amount of the Obligations of the US
Borrower and the UK Borrower to the Lenders under the Credit Documents.  Each Lender and each Credit Party hereby
consents and agrees to the CAM Exchange, and each Lender agrees that the CAM
Exchange shall be binding upon its successors and assigns and any person that
acquires a participation in its interests in any Credit Facility.  Each Credit Party agrees from time to time to
execute and deliver to the Administrative Agent all promissory notes and other
instruments and documents as the Administrative Agent shall reasonably request
to evidence and confirm the respective interests of the Lenders after giving effect
to the CAM Exchange, and each Lender agrees to surrender any promissory notes
originally received by it in connection with its Loans hereunder to the
Administrative Agent against delivery of new promissory notes evidencing its
interests in the Credit Facilities; provided, however, that the
failure of any Credit Party to execute or deliver or of any Lender to accept
any such promissory note, instrument or document shall not affect the validity
or effectiveness of the CAM Exchange.

 

(b)  As a result of the CAM Exchange,
upon and after the CAM Exchange Date, each payment received by the
Administrative Agent pursuant to any Credit Document in respect of the
Specified Obligations, and each distribution made by the Administrative Agent
pursuant to any Credit Document in respect of the Specified Obligations, shall
be distributed to the Lenders pro  rata in accordance with their
respective CAM Percentages.  Any direct
payment received by a Lender upon or after the CAM Exchange Date, including by
way of setoff, in respect of a Specified Obligation shall be paid over to the
Administrative Agent for distribution to the Lenders in accordance herewith.

 

160

 

13.2.                        Letters of
Credit.  (a)    In the event that on the CAM Exchange Date
any Letter of Credit shall be outstanding and undrawn in whole or in part, or
any amount drawn under a Letter of Credit shall constitute an Unpaid Drawing,
each Lender in respect of Unpaid Drawings on Letters of Credit shall, before
giving effect to the CAM Exchange, promptly pay over to the Administrative
Agent, in immediately available funds and in the currency that such Letters of
Credit are denominated, an amount equal to such Lender’s Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, (as notified to such Lender by the Administrative Agent), of such
Letter of Credit’s undrawn face amount or (to the extent it has not already
done so) such Letter of Credit’s Unpaid Drawing, as the case may be, together
with interest thereon from the CAM Exchange Date to the date on which such
amount shall be paid to the Administrative Agent at the rate that would be
applicable at the time to an Extended Revolving Credit Loan or, with respect to
Letters of Credit issued under the Revolving Credit Commitments, a Revolving
Credit Loan, that is an ABR Loan in a principal amount equal to such amount, as
the case may be.  The Administrative
Agent shall establish a separate account or accounts for each Lender (each, an “L/C
Reserve Account”) for the amounts received with respect to each such Letter
of Credit pursuant to the preceding sentence. 
The Administrative Agent shall deposit in each Lender’s L/C Reserve
Account such Lender’s CAM Percentage of the amounts received from the Lenders
as provided above.  The Administrative
Agent shall have sole dominion and control over each L/C Reserve Account, and
the amounts deposited in each L/C Reserve Account shall be held in such
L/C Reserve Account until withdrawn as provided in paragraph (b), (c), (d) or
(e) below.  The Administrative Agent
shall maintain records enabling it to determine the amounts paid over to it and
deposited in the L/C Reserve Accounts in respect of each Letter of Credit and
the amounts on deposit in respect of each Letter of Credit attributable to each
Lender’s CAM Percentage.  The amounts
held in each Lender’s L/C Reserve Account shall be held as a reserve against
the Letter of Credit Exposure, shall be the property of such Lender, shall not
constitute Loans to or give rise to any claim of or against any Credit Party
and shall not give rise to any obligation on the part of the US Borrower or the
UK Borrower to pay interest to such Lender, it being agreed that the
reimbursement obligations in respect of Letters of Credit shall arise only at
such times as drawings are made thereunder, as provided in Section 3.

 

(b)  In the event that after the CAM
Exchange Date any drawing shall be made in respect of a Letter of Credit, the
Administrative Agent shall, at the request of the Letter of Credit Issuer
withdraw from the L/C Reserve Account of each Lender any amounts, up to the
amount of such Lender’s CAM Percentage of such drawing, deposited in respect of
such Letter of Credit and remaining on deposit and deliver such amounts to the
Letter of Credit Issuer in satisfaction of the reimbursement obligations of the
Lenders under Section 3 (but not of the US Borrower and the UK Borrower
under Section 3, respectively).  In
the event any Lender shall default on its obligation to pay over any amount to
the Administrative Agent in respect of any Letter of Credit as provided in this
Section 13.2, the Letter of Credit Issuer shall, in the event of a drawing
thereunder, have a claim against such Lender to the same extent as if such
Lender had defaulted on its obligations under Section 2.05(e), but shall
have no claim against any other Lender in respect of such defaulted amount,
notwithstanding the exchange of interests in the reimbursement obligations
pursuant to Section 13.1.  Each
other Lender shall have a 

 

161

 

claim against such defaulting Lender for any damages sustained by it as
a result of such default, including, in the event such Letter of Credit shall
expire undrawn, its CAM Percentage of the defaulted amount.

 

(c)  In the event that after the CAM
Exchange Date any Letter of Credit shall expire undrawn, the Administrative
Agent shall withdraw from the L/C Reserve Account of each Lender the amount
remaining on deposit therein in respect of such Letter of Credit and distribute
such amount to such Lender.

 

(d)  With the prior written approval of
the Administrative Agent and the Letter of Credit Issuer, any Lender may
withdraw the amount held in its L/C Reserve Account in respect of the undrawn
amount of any Letter of Credit.  Any
Lender making such a withdrawal shall be unconditionally obligated, in the
event there shall subsequently be a drawing under such Letter of Credit, to pay
over to the  Administrative Agent, for
the account of the Letter of Credit Issuer on demand, its CAM Percentage of
such drawing.

 

(e)  Pending the withdrawal by any
Lender of any amounts from its L/C Reserve Account as contemplated by the above
paragraphs, the Administrative Agent will, at the direction of such Lender and
subject to such rules as the Administrative Agent may prescribe for the
avoidance of inconvenience, invest such amounts in Permitted Investments.  Each Lender that has not withdrawn the
amounts in its L/C Reserve Account as provided in paragraph (d) above
shall have the right, at intervals reasonably specified by the Administrative
Agent, to withdraw the earnings on investments so made by the Administrative
Agent with amounts in its L/C Reserve Account and to retain such earnings for
its own account.

 

13.3.                        Net Payments
Upon Implementation of CAM Exchange.  Notwithstanding any other provision of this
Agreement, if, as a direct result of the implementation of the CAM Exchange,
the US Borrower or the UK Borrower is required to withhold Non-Excluded Taxes
from amounts payable to the Administrative Agent, any Lender or any Participant
hereunder, the amounts so payable to the Administrative Agent, such Lender or
such Participant shall be increased to the extent necessary to yield to the
Administrative Agent, such Lender or such Participant (after payment of all
Non-Excluded Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Agreement; provided, however,
that the US Borrower and the UK Borrower shall not be required to increase any
such amounts payable to such Lender or Participant under this Section 13.3
(but, rather, shall be required to increase any such amounts payable to such
Lender or Participant to the extent required by Section 5.4) if such
Lender or Participant was prior to or on the CAM Exchange Date already a Lender
or Participant with respect to such US Borrower or UK Borrower.  If a Non-U.S. Lender (or Non-U.S.
Participant), in its good faith judgment, is eligible for an exemption from, or
reduced rate of, U.S. Federal withholding tax on payments by the US Borrower
under this Agreement, the US Borrower shall not be required to increase any
such amounts payable to such Non-U.S. Lender (or Non-U.S. Participant) if such
Non-U.S. Lender (or Non-U.S. Participant) fails to comply with the requirements
of paragraph (b) of Section 5.4. 
Upon a CAM Exchange, a Lender (or Participant) will use commercially

 

162

 

reasonable
efforts, and complete any procedural formalities necessary, to become an
Eligible Lender with respect to the UK Borrower and, if such Lender (or
Participant) fails to do so, the UK Borrower shall not be required to increase
any such amounts payable to such Lender (or Participant).  If the US Borrower or the UK Borrower, as the
case may be, fails to pay any such Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, such US Borrower or
UK Borrower shall indemnify the Administrative Agent, the Lenders and the
Participants for any incremental taxes, interest, costs or penalties that may
become payable by the Administrative Agent, such Lenders or such Participants
as a result of any such failure.

 

SECTION 14.         Miscellaneous

 

14.1.                        Amendments and
Waivers.  Neither this Agreement nor any
other Credit Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 14.1.  The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent may, from
time to time, (a) enter into with the relevant Credit Party or Credit
Parties written amendments, supplements or modifications hereto and to the
other Credit Documents for the purpose of adding any provisions to this
Agreement or the other Credit Documents or changing in any manner the rights of
the Lenders or of the Credit Parties hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative
Agent, as the case may be, may specify in such instrument, any of the
requirements of this Agreement or the other Credit Documents or any Default or
Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall directly (i) forgive
any portion of any Loan or extend the final scheduled maturity date of any Loan
or reduce the stated rate, or forgive any portion, or extend the date for the
payment, of any interest or fee payable hereunder (other than as a result of
waiving the applicability of any post-default increase in interest rates) or extend
the final expiration date of any Lender’s Commitment or extend the final
expiration date of any Letter of Credit beyond the L/C Maturity Date or
increase the aggregate amount of the Commitments of any Lender, in each case
without the written consent of each Lender directly and adversely affected
thereby, or (ii) amend, modify or waive any provision of this Section 14.1
or reduce the percentages specified in the definitions of the terms “Required
Lenders”, “Required Revolving Credit Lenders”,  “Required Extended Revolving Credit Lenders”, “Required
Tranche A Lenders”, “Required Tranche E Lenders”, “Required Tranche G Lenders”,
“Required Tranche H Lenders”, “Required Tranche I Lenders” or consent to the
assignment or transfer by the US Borrower or the UK Borrower of its rights and
obligations under any Credit Document to which it is a party (except as
permitted pursuant to Section 10.3), in each case without the written
consent of each Lender directly and adversely affected thereby, or (iii) amend,
modify or waive any provision of Section 12 without the written consent of
the then-current Administrative Agent, or (iv) amend, modify or waive any
provision of Section 3 without the written consent of the Letter of Credit
Issuer, or (v) amend, modify or waive any provisions hereof relating to
Swingline Loans without the written consent of the Swingline Lender, or (vi) change
any Revolving Credit Commitment or Extended Revolving Credit Commitment to a
Term

 

163

 

Loan
Commitment, or change any Term Loan Commitment to a Revolving Credit Commitment
or an Extended Revolving Credit Commitment, in each case without the prior
written consent of each Lender directly and adversely affected thereby, or (vii) release
all or substantially all of the Guarantors under the Guarantee (except as
expressly permitted by the Guarantee Agreement), release all or substantially
all of the Foreign Subsidiary Guarantors under any Foreign Subsidiary Guarantee
(except as permitted by any Foreign Subsidiary Guarantee) or release all or
substantially all of the Collateral under the Pledge Agreement, the Security
Agreement, the Foreign Security Documents and the Mortgages, in each case
without the prior written consent of each Lender, or (viii) decrease any
Tranche A-1 Repayment Amount, extend any scheduled Tranche A-1
Repayment Date or decrease the amount or allocation of any mandatory prepayment
to be received by any Lender holding any Tranche A-1 Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a
proportionate decrease in mandatory prepayments to be allocated to other Term
Loans pursuant to Section 5.2(c)), in each case without the written
consent of the Required Tranche A Lenders, or (ix) decrease any
Tranche A-2 Repayment Amount, extend any scheduled Tranche A-2
Repayment Date or decrease the amount or allocation of any mandatory prepayment
to be received by any Lender holding any Tranche A-2 Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a
proportionate decrease in mandatory prepayments to be allocated to other Term
Loans pursuant to Section 5.2(c)), in each case without the written
consent of the Required Tranche A Lenders, or (x) decrease any
Tranche E Repayment Amount, extend any scheduled Tranche E Repayment
Date or decrease the amount or allocation of any mandatory prepayment to be
received by any Lender holding any Tranche E Term Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a
proportionate decrease in mandatory prepayments to be allocated to other Term
Loans pursuant to Section 5.2(c)), in each case without the written
consent of the Required Tranche E Term Loan Lenders, or (xi) decrease
any Tranche G Repayment Amount, extend any scheduled Tranche G
Repayment Date or decrease the amount or allocation of any mandatory prepayment
to be received by any Lender holding any Tranche G Term Loans (other than
a decrease in such mandatory prepayment amount that is accompanied by a proportionate
decrease in mandatory prepayments to be allocated to other Term Loans pursuant
to Section 5.2(c)), in each case without the written consent of the
Required Tranche G Term Loan Lenders, or (xii) decrease any
Tranche H Repayment Amount, extend any scheduled Tranche H Repayment
Date or decrease the amount or allocation of any mandatory prepayment to be
received by any Lender holding any Tranche H Term Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a proportionate
decrease in mandatory prepayments to be allocated to other Term Loans pursuant
to Section 5.2(c)), in each case without the written consent of the
Required Tranche H Term Loan Lenders, (xiii) decrease any
Tranche I Repayment Amount, extend any scheduled Tranche I Repayment
Date or decrease the amount or allocation of any mandatory prepayment to be
received by any Lender holding any Tranche I Term Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a proportionate
decrease in mandatory prepayments to be allocated to other Term Loans pursuant
to Section 5.2(c)), in each case without the written consent of the
Required Tranche I Term Loan Lenders; and; provided  further,
that at any time that no Default or

 

164

 

Event
of Default has occurred and is continuing, the Revolving Credit Commitment of
any Lender may be increased to finance a Permitted Acquisition, with the
consent of such Lender, the US Borrower and the Administrative Agent (which
consent, in the case of the Administrative Agent, shall not be unreasonably
withheld) and without the consent of the Required Lenders, so long as (i) the
Increased Commitment Amount at such time, when added to the amount of
Indebtedness incurred pursuant to Section 10.1(k) and outstanding at
such time, does not exceed the limits set forth therein, (ii) the US
Borrower or its applicable Restricted Subsidiary shall pledge the capital stock
of any person acquired pursuant thereto to the Administrative Agent for the
benefit of the Lenders to the extent required under Section 9.12 and (iii) to
the extent determined by the Administrative Agent to be necessary to ensure pro
rata borrowings commencing with the initial borrowing after giving
effect to such increase, the US Borrower shall prepay any Eurodollar Loans
outstanding immediately prior to such initial borrowing; as used herein, the “Increased
Commitment Amount” means, at any time, the aggregate amount of all
increases pursuant to this proviso made at or prior to such time less the
aggregate amount of all voluntary reductions of the Revolving Credit
Commitments made prior to such time and provided  further, that
without the consent of any Lender, the relevant Credit Party or Credit Parties
and the Administrative Agent and/or Collateral Agent may (in their respective
sole discretion, or shall, to the extent required by any other Credit Document)
enter into any amendment, modification or waiver of any Credit Document, or
enter into any new agreement or instrument, to effect the granting, perfection,
protection, expansion or enhancement of any security interest in any Collateral
or additional property to become Collateral for the benefit of the Secured
Parties, or as required by local law to give effect to, or protect any security
interest for the benefit of the Secured Parties, in any property or so that the
security interests therein comply with applicable law.  Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the affected Lenders
and shall be binding upon the US Borrower, the UK Borrower, such Lenders, the
Administrative Agent and all future holders of the affected Loans.  In the case of any waiver, the US Borrower,
the Lenders and the Administrative Agent shall be restored to their former
positions and rights hereunder and under the other Credit Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing, it being understood that no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.  Upon any sale or other transfer
to any Person (other than the US Borrower and any Restricted Domestic
Subsidiary) by any Credit Party of any Collateral that is permitted under the
Credit Agreement, the relevant Credit Party, together with the Administrative
Agent and/or Collateral Agent, shall be permitted, without consent of any
Lender, to amend, modify or waive any provision of the Pledge Agreement, the
Security Agreement, the Foreign Security Documents or the Mortgages, as
applicable, to the extent necessary to effect release of the security interest
in such Collateral.

 

14.2.                        Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the US Borrower, the
UK Borrower and the Administrative Agent, and as set 

 

165

 

forth
on Schedule 1.1(c) in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:

 

	
  The US Borrower and the UK Borrower:

  	
   

  	
  Rockwood Specialties
  Group, Inc.

  
	
   

  	
   

  	
  100 Overlook Center

  
	
   

  	
   

  	
  Princeton, NJ 08540

  
	
   

  	
   

  	
  Attention: 

  	
  Tom Riordan

  
	
   

  	
   

  	
  Fax: 

  	
  +1-609-514-8722

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kohlberg Kravis
  Roberts & Co., L.P.

  
	
   

  	
   

  	
  9 West 57th Street

  
	
   

  	
   

  	
  Suite 4200

  
	
   

  	
   

  	
  New York, NY 10019

  
	
   

  	
   

  	
  Attention: 

  	
  Brian Carroll

  
	
   

  	
   

  	
  Fax: 

  	
  +1-212-750-0003

  
	
   

  	
   

  	
   

  
	
  The Administrative Agent:

  	
   

  	
  Credit Suisse

  
	
   

  	
   

  	
  Eleven Madison Avenue

  
	
   

  	
   

  	
  New York, NY 10010

  
	
   

  	
   

  	
  Attention: 

  	
  Carloyn Tee

  
	
   

  	
   

  	
  Fax: 

  	
  +1-212-325-8304

  
	
   

  	
   

  	
   

  

 

provided, that any
notice, request or demand to or upon the Administrative Agent or the Lenders
pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not be effective
until received.

 

Notices and other communications to the
Lenders and the Letter of Credit Issuer hereunder may be delivered or furnished
by electronic communication (including e-mail and Internet or intranet
websites) pursuant to procedures approved by the Administrative Agent and, with
regard to Letters of Credit, the Letter of Credit Issuer.  The Administrative Agent or the Borrowers
may, in their 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.

 

14.3.                        No Waiver;
Cumulative Remedies.  No failure
to exercise and no delay in exercising, on the part of the Administrative Agent
or any Lender, any right, remedy, power or privilege hereunder or under the
other Credit Documents shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.  The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.

 

166

 

14.4.        Survival of Representations and Warranties.  All representations and warranties made
hereunder, in the other Credit Documents and in any document, certificate or
statement delivered pursuant hereto or in connection herewith shall survive the
execution and delivery of this Agreement and the making of the Loans hereunder.

 

14.5.        Payment of Expenses and Taxes.  The US Borrower and the UK Borrower agree (a) to
pay or reimburse the Agents for all their reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Credit Documents and any other documents prepared in connection herewith
or therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees, disbursements
and other charges of counsel to the Agents, (b) to pay or reimburse each
Lender and the Administrative Agent for all its reasonable and documented costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Credit Documents and any such other
documents, including the reasonable fees, disbursements and other charges of
counsel to each Lender and of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold harmless each Lender and the Administrative Agent
from, any and all recording and filing fees and any and all liabilities with
respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold harmless each Lender and the Administrative Agent and
their respective directors, officers, employees, trustees and agents from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including reasonable and documented fees, disbursements and
other charges of counsel, with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Credit Documents
and any such other documents, including any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law or
any actual or alleged presence of Hazardous Materials applicable to the
operations of the US Borrower, any of its Subsidiaries or any of the Real
Estate (all the foregoing in this clause (d), collectively, the “indemnified
liabilities”); provided, that the US Borrower and the UK Borrower
shall have no obligation hereunder to the Administrative Agent or any Lender
nor any of their respective directors, officers, employees, trustees and agents
with respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of the party to be indemnified or (ii) disputes
among the Administrative Agent, the Lenders and/or their transferees.  The agreements in this Section 14.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

14.6.        Successors and Assigns; Participations and Assignments.  (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 Letter of Credit Issuer that
issues any Letter of Credit), except that 

 

167

 

(i)
other than as provided in Section 10.3, the US Borrower and the UK
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 US Borrower or the UK 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,
expressed 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 Letter of Credit Issuer that issues any Letter
of Credit), Participants (to the extent provided in paragraph (c) of this
Section) and, to the extent expressly contemplated hereby, the Related Parties
of each of the Administrative Agent, the Letter of Credit Issuer 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 Commitments and the Loans at the time owing
to it) with the prior written consent (such consent not be unreasonably
withheld; it being understood that, without limitation, the US Borrower shall
have the right to withhold its consent to any assignment if, in order for such
assignment to comply with applicable law, the US Borrower would be required to
obtain the consent of, or make any filing or registration with, any
Governmental Authority) of:

 

(A) the US Borrower; provided, that no
consent of the US Borrower shall be required for an assignment to a Lender, an
Affiliate of a Lender (unless increased costs would result therefrom except if
an Event of Default under Section 11.1 or Section 11.5 has occurred
and is continuing), an Approved Fund or, if an Event of Default under Section 11.1
or Section 11.5 has occurred and is continuing, any other assignee; and

 

(B) the Administrative Agent and, in the case
of an assignment of a Extended Revolving Credit Commitment, the Letter of
Credit Issuer; provided, that no consent of the Administrative Agent
shall be required for an assignment of any Term Loan to a Lender, an Affiliate
of a Lender or an Approved Fund.

 

(ii) Assignments shall be subject to the
following additional conditions:

 

(A) except in the case of an assignment to a
Lender, 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 Lender subject to
each such assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative Agent) shall
not be less than the Dollar Equivalent of $5,000,000 or, in the case of a
Tranche E Term Loan Commitment, Tranche G Term Loan Commitment, Tranche H Term
Loan Commitment,

 

168

 

Tranche
I Term Loan Commitment, Tranche E Term Loan, Tranche G Term Loan, Tranche H
Term Loan or Tranche I Term Loan, the Dollar Equivalent of $1,000,000 unless each
of the US Borrower and the Administrative Agent otherwise consents; provided,
that no such consent of the US Borrower shall be required if an Event of
Default under Section 11.1 or Section 11.5 has occurred and is
continuing;

 

(B) 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 the assignment of a proportionate part of all the
assigning Lender’s rights and obligations in respect of one Class of
Commitments or Loans; provided  further, however, that any
assignment of any right or interest in a Tranche A-1 Term Loan, a Tranche A-2
Term Loan or a Tranche A Term Loan Commitment (collectively, “Tranche A
Loans”) shall be accompanied by, and shall not be permitted to be made
independently of, an assignment of a proportionate amount of such Lender’s
other Tranche A Loans;

 

(C) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance
(such Assignment and Acceptance to be (x) electronically executed and
delivered to the Administrative Agent via an electronic settlement system then
acceptable to the Administrative Agent, which shall initially be the settlement
system of ClearPar, LLC or (y) manually executed and delivered together
with a processing and recordation fee of $3,500; provided, that only one
such fee shall be payable in the event of simultaneous assignments to or from
two or more Approved Funds); and

 

(D) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire in a
form approved by the Administrative Agent.

 

For the purpose of this Section 14.6(b),
the term “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person
(other than a natural person) that is engaged in making, purchasing, holding or
investing in bank loans and similar extensions of credit in the ordinary course
of its business and that is administered or managed by (a) a Lender, (b) an
Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

(iii)  Subject to acceptance and
recording thereof pursuant to paragraph (b)(v) of this Section, from
and after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of
a Lender under this Agreement, and the assigning Lender thereunder shall,

 

169

 

to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of 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 2.10, 2.11, 3.5, 5.4 and 14.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 14.6
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.

 

(iv)  The Administrative Agent, acting
for this purpose as an agent of the US Borrower and the UK Borrower, shall
maintain at the Administrative Agent’s Office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans and any payment made by the Letter of Credit Issuer under any Letter of
Credit owing to, each Lender pursuant to the terms hereof from time to time
(the “Register”).  The entries in
the Register shall be conclusive, and the US Borrower, the UK Borrower, the
Administrative Agent, the Letter of Credit Issuer 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 US Borrower, the UK Borrower, the
Letter of Credit Issuer and by the Administrative Agent on behalf of 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 Acceptance 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 and any written
consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Acceptance 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 US Borrower, the UK Borrower, the Administrative Agent, the
Letter of Credit Issuer or the Swingline Lender, sell participations to one or
more banks or other entities (each, a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or
a portion of its Commitments 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 US Borrower, the UK Borrower,
the Administrative Agent, the Letter of Credit Issuer 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 or

 

170

 

any other Credit Document; 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 14.1 that affects such
Participant.  Subject to
paragraph (c)(ii) of this Section, the US Borrower and the UK
Borrower agree that each Participant shall be entitled to the benefits of
Sections 2.10, 2.11 and 5.4 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this
Section.  To the extent permitted by law,
each Participant also shall be entitled to the benefits of Section 14.8(b) as
though it were a Lender; provided, such Participant agrees to be subject
to Section 14.8(a) as though it were a Lender.

 

(ii)  A Participant shall not be
entitled to receive any greater payment under Section 2.10 or 5.4 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 US Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lender
if it were a Lender shall not be entitled to the benefits of Section 5.4
unless the US Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the US Borrower and
the UK Borrower, to comply with Section 5.4(b) as though it were a
Lender.

 

(d)  Any Lender may, without the consent
of the Borrower or the Administrative Agent, at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided, that no
such pledge or assignment of a security interest shall release a Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.  In order
to facilitate such pledge or assignment, the US Borrower and the UK Borrower
hereby agree that, upon request of any Lender at any time and from time to time
after the US Borrower has made its initial borrowing hereunder, the US Borrower
or the UK Borrower, as the case may be, shall provide to such Lender, at the US
Borrower’s or the UK Borrower’s own expense, a promissory note, substantially
in the form of Exhibit R-1, R-2, R-3, R-4, R-5, R-6, R-7 or R-8, as the
case may be, evidencing the Tranche A-1 Term Loans, Tranche A-2 Term
Loans, Tranche E Term Loans, Tranche G Term Loans, Tranche H Term Loans,
Tranche I Term Loans, Revolving Credit Loans, Extended Revolving Credit Loans
and Swingline Loans, respectively, owing to such Lender.

 

(e)  Subject to Section 14.16, the
US Borrower and the UK Borrower authorize each Lender to disclose to any
Participant, secured creditor of such Lender or assignee (each, a “Transferee”)
and any prospective Transferee any and all financial information in such Lender’s
possession concerning the US Borrower and its Affiliates that has been
delivered to such Lender by or on behalf of the US Borrower and its Affiliates
pursuant to this Agreement or which has been delivered to such Lender by or on
behalf of the US Borrower and its Affiliates in connection with such Lender’s
credit evaluation of the US Borrower and its Affiliates prior to becoming a
party to this Agreement; provided, that neither the Administrative Agent
nor any Lender shall provide

 

171

 

to any Transferee or
prospective Transferee any of the Confidential Information unless such person
shall have previously executed a Confidentiality Agreement in the form of Exhibit S.

 

14.7.        Replacements of Lenders under Certain Circumstances.  The US Borrower (on its own behalf and on
behalf of the UK Borrower) shall be permitted to replace any Lender that (a) requests
reimbursement for amounts owing pursuant to Section 2.10, 2.11, 3.5 or
5.4, (b) is affected in the manner described in Section 2.10(a)(iii) and
as a result thereof any of the actions described in such Section is
required to be taken or (c) becomes a Defaulting Lender, with a
replacement bank or other financial institution; provided, that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event
of Default shall have occurred and be continuing at the time of such
replacement, (iii) the US Borrower and/or the UK Borrower, as applicable,
shall repay (or the replacement bank or institution shall purchase, at par) all
Loans and other amounts (other than any disputed amounts, pursuant to Section 2.10,
2.11, 3.5 or 5.4, as the case may be) owing to such replaced Lender prior to
the date of replacement, (iv) the replacement bank or institution, if not
already a Lender, and the terms and conditions of such replacement, shall be
reasonably satisfactory to the Administrative Agent, (v) the replaced
Lender shall be obligated to make such replacement in accordance with the
provisions of Section 14.6 (provided, that the US Borrower shall be
obligated to pay the registration and processing fee referred to therein) and (vi) any
such replacement shall not be deemed to be a waiver of any rights that the US
Borrower, the UK Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

 

14.8.        Adjustments; Set-off. 
(a)    If any Lender (a “benefited
Lender”) shall at any time receive any payment of all or part of its Loans,
or interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings of
the nature referred to in Section 11.5, or otherwise), in a greater
proportion than any such payment to or collateral received by any other Lender,
if any, in respect of such other Lender’s Loans, or interest thereon, such
benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender’s Loan, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of
such excess payment or benefits is thereafter recovered from such benefited
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.

 

(b)  After the occurrence and during the
continuance of an Event of Default, in addition to any rights and remedies of
the Lenders provided by law, each Lender shall have the right, without prior
notice to the US Borrower or the UK Borrower, any such notice being expressly
waived by the US Borrower and the UK Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the US Borrower or
the UK Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any

 

172

 

and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of the US Borrower or the UK
Borrower, as the case may be.  Each
Lender agrees promptly to notify the US Borrower or the UK Borrower, as the
case may be, and the Administrative Agent after any such set-off and
application made by such Lender; provided, that the failure to give such
notice shall not affect the validity of such set-off and application.

 

14.9.        Counterparts. 
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by facsimile or
other electronic transmission), and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the US Borrower and the Administrative
Agent.

 

14.10.      Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

14.11.      Integration.  This Agreement and the other Credit Documents
represent the agreement of the US Borrower, the UK Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Credit Documents.

 

14.12.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

14.13.      Submission to Jurisdiction; Waivers.  The US Borrower and the UK Borrower each
hereby irrevocably and unconditionally:

 

(a)  submits for itself and its property
in any legal action or proceeding relating to this Agreement and the other
Credit Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general jurisdiction of
the courts of the State of New York, the courts of the United States of
America for the Southern District of New York and appellate courts from
any thereof;

 

(b)  consents that any such action or
proceeding may be brought in such courts and waives any objection that it may
now or hereafter have to the venue of any 

 

173

 

such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;

 

(c)  agrees that service of process in
any such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the US Borrower at its address set forth in Section 14.2
or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;

 

(d)  agrees that nothing herein shall affect
the right to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction; and

 

(e)  waives, to the maximum extent not
prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section 14.13 any special,
exemplary, punitive or consequential damages.

 

14.14.      Acknowledgments.  The US Borrower and the UK Borrower each
hereby acknowledge that:

 

(a)  it has been advised by counsel in
the negotiation, execution and delivery of this Agreement and the other Credit
Documents;

 

(b)  neither the Administrative Agent
nor any Lender has any fiduciary relationship with or duty to the US Borrower
or the UK Borrower arising out of or in connection with this Agreement or any
of the other Credit Documents, and the relationship between Administrative
Agent and Lenders, on one hand, and the US Borrower or the UK Borrower, on the
other hand, in connection herewith or therewith is solely that of debtor and creditor;
and

 

(c)  no joint venture is created hereby
or by the other Credit Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among the US Borrower,
the UK Borrower and the Lenders.

 

14.15.     WAIVERS OF JURY TRIAL.  THE US BORROWER, THE UK BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

14.16.      Confidentiality.  The Administrative Agent and each Lender
shall hold all non-public information furnished by or on behalf of the US
Borrower or the UK Borrower in connection with such Lender’s evaluation of
whether to become a Lender hereunder or obtained by such Lender or the
Administrative Agent pursuant to the requirements of this Agreement (“Confidential
Information”), confidential in accordance with its customary procedure for
handling confidential information of this nature and (in the case of a Lender
that is a bank) in accordance with safe and sound banking practices

 

174

 

and
in any event may make disclosure as required or requested by any governmental
agency or representative thereof or pursuant to legal process or to such Lender’s
or the Administrative Agent’s attorneys, professional advisors or independent
auditors or Affiliates; provided, that unless specifically prohibited by
applicable law or court order, each Lender and the Administrative Agent shall
notify the US Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure
of such information; and provided  further, that in no event shall
any Lender or the Administrative Agent be obligated or required to return any
materials furnished by the US Borrower or any Subsidiary of the US
Borrower.  Each Lender and the
Administrative Agent agrees that it will not provide to prospective Transferees
or to prospective direct or indirect contractual counterparties in swap
agreements to be entered into in connection with Loans made hereunder any of
the Confidential Information unless such Person shall have previously executed
a Confidentiality Agreement in the form of Exhibit S.

 

14.17.      Judgment Currency.  (a)   
The obligations of the US Borrower and the UK Borrower hereunder and
under the other Loan Documents to make payments in Dollars or in the Foreign
Currencies, as the case may be (the “Obligation Currency”), shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery results in the effective
receipt by the Administrative Agent or a Lender of the full amount of the
Obligation Currency expressed to be payable to the Administrative Agent or
Lender under this Agreement or the other Credit Documents.  If, for the purpose of obtaining or enforcing
judgment against the US Borrower, the UK Borrower or any other Credit Party in
any court or in any jurisdiction, it becomes necessary to convert into or from
any currency other than the Obligation Currency (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the conversion shall be made, at the Dollar Equivalent of
such amount, in each case, as of the date immediately preceding the day on
which the judgment is given (such Business Day being hereinafter referred to as
the “Judgment Currency Conversion Date”).

 

(b)  If there is a change in the rate of
exchange prevailing between the Judgment Currency Conversion Date and the date
of actual payment of the amount due, the US Borrower and the UK Borrower each
covenant and agree to pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount), as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.

 

(c)  For purposes of determining the
Dollar Equivalent, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.

 

175

 

14.18.      Permitted Amendments.  (a)   
The US Borrower may, by written notice to the Administrative Agent from
time to time, make one or more offers to all Lenders holding Extended Revolving
Credit Commitments to make one or more Permitted Amendments pursuant to
procedures reasonably specified by the Administrative Agent and reasonably
acceptable to the US Borrower.  Such
notice shall set forth (i) the terms and conditions of the requested
Permitted Amendments and (ii) the date on which each such Permitted
Amendment is requested to become effective (which shall not be less than 10
Business Days no more than 30 Business Days after the date of such notice).  Only those Lenders holding Extended Revolving
Credit Commitments that consent to such Permitted Amendment (“Accepting
Lenders”) will have the maturity of their Extended Revolving Credit
Commitments extended and be entitled to receive any increase in the Applicable
ABR Margin or Applicable Eurodollar Margin and any fees, in each case, as
provided therein.

 

(b)  The US Borrower, the UK Borrower,
Holdings and each Accepting Lender shall execute and deliver to the
Administrative Agent such documentation as the Administrative Agent shall
reasonably specify to evidence the acceptance of the Permitted Amendments and
the terms and conditions thereof.  The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Permitted Amendment.  Each of the
parties hereto hereby agrees that, upon the effectiveness of any Permitted
Amendment, the Agreement shall be deemed amended to the extent (but only to the
extent) necessary to reflect the existence and terms of the Permitted Amendment
evidenced thereby and only with respect to the Loans and Commitments of the
Accepting Lenders (including any amendments necessary to treat the Loans and
Commitments of the Accepting Lenders in a manner consistent with the other
Loans and Commitments under this Agreement). 
Notwithstanding the foregoing, no Permitted Amendment shall become
effective under this Section 14.18 unless the Administrative Agent, to the
extent so reasonably requested by the Administrative Agent, shall have received
legal opinions, board resolutions and officer’s certificates consistent with
those delivered on the Restatement Date.

 

14.19.      Effect of the Amendment and Restatement.  (a)  On the Restatement 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 and shall be deemed replaced and superseded in all respects by
this Agreement, except to evidence (i) the incurrence by the Borrowers of
the Obligations under and as defined in the Existing Credit Agreement (whether
or not such Obligations are contingent as of the Restatement Date), (ii) the
representations and warranties made by the Borrowers prior to the Restatement
Date (which representations and warranties made prior to the Restatement Date
shall not be superseded or rendered ineffective by this Agreement as they
pertain to the period prior to the Restatement Date) and (iii) any action
or omission performed or required to be performed pursuant to such Existing
Credit Agreement prior to the Restatement Date (including any failure, prior to
the Restatement Date, to comply with the covenants contained in Existing Credit
Agreement).  The parties hereto
acknowledge and agree that (a) this Agreement and the other Credit
Documents, whether executed and delivered in connection herewith or otherwise,
do not constitute a novation or termination of the Obligations under the

 

176

 

Existing Credit Agreement or
the other Credit Documents as in effect prior to the Restatement Date and which
remain outstanding as of the Restatement Date, (b) the Obligations under
the Existing Credit Agreement and the other Security Documents are in all
respects continuing (as amended and restated hereby and which are in all
respects hereinafter subject to the terms herein) and (c) the Liens and
security interests as granted under the applicable Credit Documents securing
payment of such Obligations are in all respects continuing and in full force
and effect and are reaffirmed hereby.

 

(b)  On and after the Restatement Date, (i) all
references to the Existing Credit Agreement or the Credit Agreement in the
Credit 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 section (or subsection) of the Existing Credit Agreement or
the Credit Agreement in any Credit 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 Restatement 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.

 

(c)  This amendment and restatement is
limited as written and is not a consent to any other amendment, restatement or
waiver or other modification, whether or not similar and, except as expressly
provided herein or in any other Credit Document, all terms and conditions of
the Credit Documents remain in full force and effect unless otherwise
specifically amended hereby or by any other Credit Document.

 

(d)  Except to the extent specifically
amended on the Restatement Date, this amendment and restatement shall not
alter, modify or in any way amend the schedules and exhibits to the Existing
Credit Agreement (and such schedules and exhibits shall continue to be
schedules and exhibits hereto).

 

[Signature pages follow]

 

177

 

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

 

 

	
   

  	
  ROCKWOOD
  SPECIALTIES GROUP, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas J. Riordan

  
	
   

  	
   

  	
  Name:
  Thomas J. Riordan

  
	
   

  	
   

  	
  Title:
    Senior Vice President, Law and
  Administration

  
	
   

  	
   

  	
   

  
	
   

  	
  ROCKWOOD
  SPECIALTIES LIMITED

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas J. Riordan

  
	
   

  	
   

  	
  Name:
  Thomas J. Riordan

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  
	
   

  	
  ROCKWOOD
  SPECIALTIES INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas J. Riordan

  
	
   

  	
   

  	
  Name:
  Thomas J. Riordan

  
	
   

  	
   

  	
  Title:   Senior Vice President, Law and
  Administration

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE, 

  Cayman Islands Branch, as Administrative Agent, Collateral Agent, Letter of
  Credit Issuer and Swingline Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Karl M. Studer

  
	
   

  	
   

  	
  Name:
  Karl M. Studer

  
	
   

  	
   

  	
  Title:   Director

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Jay Chall

  
	
   

  	
   

  	
  Name:
  Jay Chall

  
	
   

  	
   

  	
  Title:   Director

  

 

[Signature
Page to Amended and Restated Credit Agreement]

 

178

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