Document:

Exhibit
4.1

 

EXECUTION COPY

Published CUSIP Numbers

Senior Credit Facilities: [41043JAD3]

Revolving Facility: [41043JAE1]

Term B Facility: [41043JAF8]

 

CREDIT AGREEMENT

 

Dated as of December 1, 2010

 

among

 

HANGER ORTHOPEDIC GROUP, INC.,

as Borrower

 

VARIOUS FINANCIAL INSTITUTIONS,

as Lenders

 

BANK OF AMERICA, N.A.,

as Administrative Agent, Issuer and Swing Line Lender

 

JEFFERIES FINANCE LLC,

as Syndication Agent,

 

ROYAL BANK OF CANADA,

SUNTRUST BANK

and

OPPENHEIMER & CO. INC.,

as Co-Documentation Agents,

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

JEFFERIES FINANCE LLC,

OPPENHEIMER & CO. INC.

SUNTRUST ROBINSON HUMPHREY, INC.

and

RBC CAPITAL MARKETS(1),

as Joint Bookrunners,

 

and

 

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

and

JEFFERIES FINANCE LLC,

as Joint Lead Arrangers

 

(1)                                  RBC Capital
Markets is a marketing name for the corporate and investment banking
activities of Royal Bank of Canada and its subsidiaries.

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  
	
   

  
	
  DEFINITIONS

  
	
   

  
	
  1.01

  	
   

  	
  Certain Defined Terms

  	
  1

  
	
  1.02

  	
   

  	
  Other Interpretive Provisions

  	
  33

  
	
  1.03

  	
   

  	
  Accounting Principles

  	
  34

  
	
  1.04

  	
   

  	
  Currency Equivalents Generally

  	
  34

  
	
  1.05

  	
   

  	
  Letter of Credit Amounts

  	
  34

  
	
  1.06

  	
   

  	
  Times of Day

  	
  35

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  
	
   

  
	
  THE
  CREDITS

  
	
   

  	
   

  	
   

  	
   

  
	
  2.01

  	
   

  	
  The Credits

  	
  35

  
	
  2.02

  	
   

  	
  Loan Accounts

  	
  35

  
	
  2.03

  	
   

  	
  Procedure for Borrowing

  	
  35

  
	
  2.04

  	
   

  	
  Conversion and Continuation Elections

  	
  37

  
	
  2.05

  	
   

  	
  The Swing Line Loans

  	
  38

  
	
  2.06

  	
   

  	
  Procedure for Swing Line Loans

  	
  38

  
	
  2.07

  	
   

  	
  Voluntary Termination or Reduction of Revolving Commitments

  	
  40

  
	
  2.08

  	
   

  	
  Optional Prepayments

  	
  40

  
	
  2.09

  	
   

  	
  Mandatory Prepayments of Loans

  	
  41

  
	
  2.10

  	
   

  	
  Repayment

  	
  42

  
	
  2.11

  	
   

  	
  Interest

  	
  42

  
	
  2.12

  	
   

  	
  Fees

  	
  42

  
	
  2.13

  	
   

  	
  Computation of Fees and Interest

  	
  43

  
	
  2.14

  	
   

  	
  Payments by the Borrower

  	
  43

  
	
  2.15

  	
   

  	
  Payments by the Lenders to the Agent

  	
  44

  
	
  2.16

  	
   

  	
  Sharing of Payments, Etc.

  	
  44

  
	
  2.17

  	
   

  	
  Amendments Effecting a Maturity Extension

  	
  45

  
	
  2.18

  	
   

  	
  Increase in Term Facility

  	
  46

  
	
  2.19

  	
   

  	
  Term Loan Repurchases

  	
  48

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  
	
   

  
	
  THE
  LETTERS OF CREDIT

  
	
   

  	
   

  	
   

  	
   

  
	
  3.01

  	
   

  	
  The Letter of Credit Subfacility

  	
  49

  
	
  3.02

  	
   

  	
  Issuance, Amendment and Renewal of Letters of Credit

  	
  51

  
	
  3.03

  	
   

  	
  Risk Participations, Drawings and Reimbursements

  	
  52

  
	
  3.04

  	
   

  	
  Repayment of Participations

  	
  54

  
	
  3.05

  	
   

  	
  Role of the Issuers

  	
  54

  
	
  3.06

  	
   

  	
  Obligations Absolute

  	
  55

  
	
  3.07

  	
   

  	
  Backup Support

  	
  56

  
	
  3.08

  	
   

  	
  Letter of Credit Fees

  	
  56

  

 

i

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  3.09

  	
   

  	
  Applicability of ISP98 and UCP

  	
  57

  
	
  3.10

  	
   

  	
  Cash Collateral

  	
  57

  
	
  3.11

  	
   

  	
  Defaulting Lenders

  	
  58

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  
	
   

  
	
  TAXES,
  YIELD PROTECTION AND ILLEGALITY

  
	
   

  	
   

  	
   

  	
   

  
	
  4.01

  	
   

  	
  Taxes

  	
  59

  
	
  4.02

  	
   

  	
  Illegality

  	
  60

  
	
  4.03

  	
   

  	
  Increased Costs and Reduction of Return

  	
  61

  
	
  4.04

  	
   

  	
  Funding Losses

  	
  62

  
	
  4.05

  	
   

  	
  Inability to Determine Rates

  	
  63

  
	
  4.06

  	
   

  	
  Certificates of Lenders

  	
  63

  
	
  4.07

  	
   

  	
  Replacement of Lenders

  	
  63

  
	
  4.08

  	
   

  	
  Survival

  	
  64

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  
	
   

  
	
  CONDITIONS
  PRECEDENT

  
	
   

  	
   

  	
   

  	
   

  
	
  5.01

  	
   

  	
  Conditions to Effectiveness and Initial Credit Extension

  	
  64

  
	
  5.02

  	
   

  	
  Conditions to All Credit Extensions

  	
  66

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  
	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  
	
   

  	
   

  	
   

  	
   

  
	
  6.01

  	
   

  	
  Corporate Existence and Power

  	
  67

  
	
  6.02

  	
   

  	
  Corporate Authorization; No Contravention

  	
  67

  
	
  6.03

  	
   

  	
  Governmental and Third-Party Authorization

  	
  67

  
	
  6.04

  	
   

  	
  Binding Effect

  	
  67

  
	
  6.05

  	
   

  	
  Litigation

  	
  68

  
	
  6.06

  	
   

  	
  No Default

  	
  68

  
	
  6.07

  	
   

  	
  ERISA Compliance

  	
  68

  
	
  6.08

  	
   

  	
  Use of Proceeds; Margin Regulations

  	
  69

  
	
  6.09

  	
   

  	
  Ownership of Property; Liens; Investments

  	
  69

  
	
  6.10

  	
   

  	
  Taxes

  	
  69

  
	
  6.11

  	
   

  	
  Financial Statements; No Material Adverse Effect

  	
  69

  
	
  6.12

  	
   

  	
  Environmental Matters

  	
  70

  
	
  6.13

  	
   

  	
  Regulated Entities

  	
  70

  
	
  6.14

  	
   

  	
  Capitalization; Subsidiaries

  	
  70

  
	
  6.15

  	
   

  	
  Insurance

  	
  70

  
	
  6.16

  	
   

  	
  Compliance with Laws

  	
  70

  
	
  6.17

  	
   

  	
  Intellectual Property, Licenses, Etc.

  	
  70

  
	
  6.18

  	
   

  	
  Collateral Documents

  	
  70

  
	
  6.19

  	
   

  	
  Solvency

  	
  71

  
	
  6.20

  	
   

  	
  Labor Matters

  	
  71

  
	
  6.21

  	
   

  	
  Full Disclosure

  	
  71

  
	
  6.22

  	
   

  	
  OFAC

  	
  71

  

 

ii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  
	
   

  
	
  AFFIRMATIVE
  COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  7.01

  	
   

  	
  Financial Statements; Projections

  	
  71

  
	
  7.02

  	
   

  	
  Certificates; Other Information

  	
  72

  
	
  7.03

  	
   

  	
  Notices

  	
  74

  
	
  7.04

  	
   

  	
  Preservation of Corporate Existence, Etc.

  	
  74

  
	
  7.05

  	
   

  	
  Maintenance of Property

  	
  75

  
	
  7.06

  	
   

  	
  Insurance

  	
  75

  
	
  7.07

  	
   

  	
  Payment of Taxes

  	
  75

  
	
  7.08

  	
   

  	
  Compliance with Laws

  	
  75

  
	
  7.09

  	
   

  	
  Inspection of Property and Books and Records

  	
  76

  
	
  7.10

  	
   

  	
  Environmental Laws

  	
  76

  
	
  7.11

  	
   

  	
  Use of Proceeds

  	
  76

  
	
  7.12

  	
   

  	
  Guarantors

  	
  76

  
	
  7.13

  	
   

  	
  Further Assurances

  	
  76

  
	
  7.14

  	
   

  	
  Covenant to Give Security

  	
  77

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  
	
   

  
	
  NEGATIVE
  COVENANTS

  
	
   

  	
   

  	
   

  	
   

  
	
  8.01

  	
   

  	
  Liens

  	
  80

  
	
  8.02

  	
   

  	
  Disposition of Assets

  	
  82

  
	
  8.03

  	
   

  	
  Consolidations and Mergers

  	
  83

  
	
  8.04

  	
   

  	
  Investments

  	
  83

  
	
  8.05

  	
   

  	
  Indebtedness

  	
  85

  
	
  8.06

  	
   

  	
  Transactions with Affiliates

  	
  86

  
	
  8.07

  	
   

  	
  Burdensome Agreements

  	
  87

  
	
  8.08

  	
   

  	
  Restricted Payments; Prepayment of Specified Indebtedness

  	
  88

  
	
  8.09

  	
   

  	
  Consolidated Leverage Ratio

  	
  89

  
	
  8.10

  	
   

  	
  Consolidated Interest Coverage Ratio

  	
  89

  
	
  8.11

  	
   

  	
  Capital Expenditures

  	
  90

  
	
  8.12

  	
   

  	
  Swap Contracts

  	
  90

  
	
  8.13

  	
   

  	
  Change in Nature of Business

  	
  90

  
	
  8.14

  	
   

  	
  Amendments of Organization Documents

  	
  90

  
	
  8.15

  	
   

  	
  Accounting Changes

  	
  90

  
	
  8.16

  	
   

  	
  Amendment, Etc. of Related Documents

  	
  90

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  
	
   

  
	
  EVENTS OF
  DEFAULT

  
	
   

  	
   

  	
   

  	
   

  
	
  9.01

  	
   

  	
  Event of Default

  	
  90

  
	
  9.02

  	
   

  	
  Remedies

  	
  92

  
	
  9.03

  	
   

  	
  Rights Not Exclusive

  	
  93

  

 

iii

 

	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  
	
   

  
	
  THE AGENT

  
	
   

  	
   

  	
   

  	
   

  
	
  10.01

  	
   

  	
  Appointment and Authority

  	
  93

  
	
  10.02

  	
   

  	
  Rights as a Lender

  	
  93

  
	
  10.03

  	
   

  	
  Exculpatory Provisions

  	
  93

  
	
  10.04

  	
   

  	
  Reliance by Agent

  	
  94

  
	
  10.05

  	
   

  	
  Delegation of Duties

  	
  94

  
	
  10.06

  	
   

  	
  Resignation of Agent

  	
  95

  
	
  10.07

  	
   

  	
  Non-Reliance on Agent and Other Lenders

  	
  95

  
	
  10.08

  	
   

  	
  No Other Duties, Etc.

  	
  95

  
	
  10.09

  	
   

  	
  Agent May File Proofs of Claim

  	
  96

  
	
  10.10

  	
   

  	
  Collateral and Guaranty Matters

  	
  96

  
	
  10.11

  	
   

  	
  Withholding Tax

  	
  97

  
	
  10.12

  	
   

  	
  Cash Management Agreements and Rate Swap Documents

  	
  98

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  
	
   

  
	
  MISCELLANEOUS

  
	
   

  	
   

  	
   

  	
   

  
	
  11.01

  	
   

  	
  Amendments and Waivers

  	
  98

  
	
  11.02

  	
   

  	
  Notices

  	
  100

  
	
  11.03

  	
   

  	
  No Waiver; Cumulative Remedies

  	
  101

  
	
  11.04

  	
   

  	
  Costs and Expenses; Indemnification

  	
  101

  
	
  11.05

  	
   

  	
  Marshalling; Payments Set Aside

  	
  103

  
	
  11.06

  	
   

  	
  Successors and Assigns

  	
  103

  
	
  11.07

  	
   

  	
  Assignments, Participations, Etc.

  	
  104

  
	
  11.08

  	
   

  	
  Confidentiality

  	
  108

  
	
  11.09

  	
   

  	
  Set-off

  	
  108

  
	
  11.10

  	
   

  	
  Automatic Debits of Fees

  	
  109

  
	
  11.11

  	
   

  	
  Notification of Addresses, Lending Offices, Etc.

  	
  109

  
	
  11.12

  	
   

  	
  Counterparts

  	
  109

  
	
  11.13

  	
   

  	
  Severability

  	
  109

  
	
  11.14

  	
   

  	
  No Third Parties Benefited

  	
  109

  
	
  11.15

  	
   

  	
  Governing Law and Jurisdiction

  	
  110

  
	
  11.16

  	
   

  	
  WAIVER OF JURY TRIAL

  	
  110

  
	
  11.17

  	
   

  	
  Entire Agreement

  	
  110

  
	
  11.18

  	
   

  	
  USA PATRIOT Act Notice

  	
  110

  
	
  11.19

  	
   

  	
  No Fiduciary or Implied Duties

  	
  111

  

 

iv

 

	
  SCHEDULES

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1.01(a)

  	
   

  	
  Existing
  Letters of Credit

  
	
  Schedule
  1.01(b)

  	
   

  	
  Existing
  Seller Notes

  
	
  Schedule
  2.01

  	
   

  	
  Commitments
  and Percentages

  
	
  Schedule
  2.19

  	
   

  	
  Auction
  Procedures

  
	
  Schedule
  6.07

  	
   

  	
  ERISA

  
	
  Schedule
  6.10

  	
   

  	
  Taxes

  
	
  Schedule
  6.12

  	
   

  	
  Environmental
  Matters

  
	
  Schedule
  6.14

  	
   

  	
  Capitalization;
  Subsidiaries and Minority Interests

  
	
  Schedule
  7.11

  	
   

  	
  Refinancing
  Indebtedness

  
	
  Schedule
  7.14

  	
   

  	
  Post-Closing
  Deliverables

  
	
  Schedule
  8.01

  	
   

  	
  Permitted
  Liens

  
	
  Schedule
  8.04

  	
   

  	
  Permitted
  Investments

  
	
  Schedule
  8.05

  	
   

  	
  Indebtedness

  
	
  Schedule
  8.07

  	
   

  	
  Burdensome
  Agreements

  
	
  Schedule
  11.02

  	
   

  	
  Agent’s
  Office; Certain Addresses for Notices

  
	
   

  	
   

  	
   

  
	
  EXHIBITS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Form of
  Notice of Borrowing

  
	
  Exhibit B

  	
   

  	
  Form of
  Notice of Conversion/Continuation

  
	
  Exhibit C

  	
   

  	
  Form of
  Compliance Certificate

  
	
  Exhibit D

  	
   

  	
  Form of
  Assignment and Assumption

  
	
  Exhibit E

  	
   

  	
  Form of
  Note

  
	
  Exhibit F

  	
   

  	
  Form of
  Security Agreement

  
	
  Exhibit G

  	
   

  	
  Opinion
  Matters - Counsel to Loan Parties

  
	
  Exhibit H

  	
   

  	
  Form of
  Solvency Certificate

  

 

v

 

CREDIT AGREEMENT

 

This
CREDIT AGREEMENT is entered into as of December 1, 2010 among Hanger
Orthopedic Group, Inc., a Delaware corporation (the “Borrower”),
the financial institutions from time to time party to this Agreement
(collectively, the “Lenders” and each, a “Lender”) and Bank of
America, N.A., as Agent, Issuer and Swing Line Lender.

 

PRELIMINARY STATEMENTS:

 

Pursuant
to the Credit Agreement, dated as of May 26, 2006 (as amended,
supplemented or otherwise modified prior to the Effective Date, the “Existing
Credit Agreement”), among the Borrower, certain lenders party thereto and
Citicorp North America, Inc., as administrative agent,, the lenders under
the Existing Credit Agreement agreed to make extensions of credit to the
Borrower on the terms and conditions set forth therein, including making loans
(the “Existing Loans”) to the Borrower.

 

Speed
Acquisition Vehicle, Inc., a Delaware corporation and a direct
wholly-owned subsidiary of the Borrower (the “Merger Sub”), was
organized by the Borrower to acquire control of Accelerated Care Plus Corp., a
Delaware corporation (the “Acquired Business”).

 

Pursuant to the Agreement and Plan of Merger dated October 18,
2010 (the “Merger Agreement”) among the Borrower, the Merger
Sub, the Acquired Business and the shareholders of the Acquired Business named
therein, the Borrower and the Merger Sub have agreed to consummate a merger
(the “Merger”) with the Acquired Business in
which the Merger Sub shall be merged with and into the Acquired Business with
the Acquired Business surviving such merger as a wholly-owned subsidiary of the
Borrower.

 

The
proceeds of the borrowings hereunder will be used to refinance in full all
Existing Loans, to fund a portion of the consideration payable in connection
with the Merger and to provide ongoing working capital and for other general
corporate purposes of the Borrower and its Subsidiaries.

 

In furtherance of the foregoing, the Borrower has
requested that the lenders provide a term B loan facility in the amount of
$300,000,000 and a revolving credit facility in the amount of $100,000,000, and
the Lenders have indicated their willingness to lend and the Issuer has
indicated its willingness to issue letters of credit, in each case, on the
terms and subject to the conditions set forth herein.

 

In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

1.01         Certain
Defined Terms.  The following terms
have the following meanings:

 

“Acquisition”
means any transaction or series of related transactions for the purpose of or
resulting, directly or indirectly, in (a) the acquisition of all or
substantially all of the assets of a Person, or of any business or division of
a Person; (b) the acquisition of in excess of 50% of the capital stock,
partnership interests, membership interests or other equity interests of any
Person, or otherwise causing any Person to become a Subsidiary; or (c) a
merger or consolidation or any other combination with another Person (other than
a Person that is the Borrower or a Subsidiary); provided that the
Borrower or a Subsidiary is the surviving entity.

 

 

“Act”
has the meaning specified in Section 11.18.

 

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

 

“Affiliate”
means, as to any Person, any other Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such
Person.  A Person shall be deemed to
control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, membership interests, by contract, or otherwise.

 

“Affiliated
Debt Fund” means any investment fund managed or advised by Affiliates of
Ares that is a bona fide debt fund that extends credit or buys loans or debt
securities of companies generally as part of its ordinary course of business.

 

“Agent”
means Bank of America in its capacity as administrative agent for the Lenders
hereunder, and any successor Agent arising under Section 10.06.

 

“Agent-Related
Persons” means, collectively, Bank of America (and any successor Agent
arising under Section 10.06), together with its Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of the foregoing.

 

“Agent’s
Payment Office” means the address for payments set forth on Schedule
11.02, or such other address as the Agent may from time to time specify.

 

“Aggregate
Revolving Commitment” means the aggregate amount of the Revolving
Commitments of the Lenders.

 

“Agreement”
means this Credit Agreement.

 

“Applicable ECF Percentage”:  (i) for the fiscal year ending December 31,
2011, 50% and (ii) for any fiscal year ending thereafter (a) 50% if
the Consolidated Leverage Ratio as of the last day of such fiscal year is
greater than or equal to 3.0 to 1.0, (b) 25% if the Consolidated Leverage
Ratio as of the last day of such fiscal year is less than 3.0 to 1.00 but greater
than or equal to 2.75 to 1.00 and (c) 0% if the Consolidated Leverage
Ratio as of the last day of such fiscal year is less than 2.75 to 1.00.

 

“Applicable
Rate” means:

 

(A) until
the date of delivery of financial statements for the fiscal quarter ended March 31,
2011, for (x) Base Rate Loans, 2.75%, (y) LIBOR Rate Loans, 3.75% and
(z) Commitment Fees, 0.625% and (B) thereafter, the applicable rate
determined based on the Consolidated Leverage Ratio set forth in the most
recent Compliance Certificate as set forth below:

 

2

 

	
  Level

  	
   

  	
  Consolidated

  Leverage

  Ratio

  	
   

  	
  Applicable

  Rate for

  Revolving Loans

  that are

  LIBOR Rate

  Loans

  	
   

  	
  Applicable

  Rate for

  Swing Line

  Loans and

  Revolving

  Loans that are

  Base Rate

  Loans

  	
   

  	
  Applicable

  Rate for Term

  Loans that are

  LIBOR Rate

  Loans

  	
   

  	
  Applicable Rate

  for Term Loans

  that are Base

  Rate Loans

  	
   

  	
  Commitment

  Fee

  
	
  I

  	
   

  	
  > 3.00x

  	
   

  	
  3.75%

  	
   

  	
  2.75%

  	
   

  	
  3.75%

  	
   

  	
  2.75%

  	
   

  	
  0.625%

  
	
  II

  	
   

  	
  < 3.00x and > 2.50x

  	
   

  	
  3.25%

  	
   

  	
  2.25%

  	
   

  	
  3.75%

  	
   

  	
  2.75%

  	
   

  	
  0.625%

  
	
  III

  	
   

  	
  < 2.50x and > 2.00x

  	
   

  	
  3.00%

  	
   

  	
  2.00%

  	
   

  	
  3.50%

  	
   

  	
  2.50%

  	
   

  	
  0.500%

  
	
  IV

  	
   

  	
  < 2.00x

  	
   

  	
  2.75%

  	
   

  	
  1.75%

  	
   

  	
  3.50%

  	
   

  	
  2.50%

  	
   

  	
  0.500%

  

 

If,
as a result of any restatement of or other adjustment to the financial
statements of the Borrower, (a) the Consolidated Leverage Ratio as
calculated by the Borrower as of any applicable date was inaccurate and (b) a
proper calculation of the Consolidated Leverage Ratio would have resulted in
different pricing for any period, then (i) if the proper calculation of
the Consolidated Leverage Ratio would have resulted in higher pricing for such
period, the Borrower shall automatically and retroactively be obligated to pay
to the Agent for the benefit of the applicable Lenders, promptly following
demand by the Agent (accompanied by supporting materials (which may be in the
form of financial statements prepared by the Borrower or the Independent
Auditor)), an amount equal to the excess of the amount of interest and fees
that should have been paid for such period over the amount of interest and fees
actually paid for such period; and (ii) if the proper calculation of the
Consolidated Leverage Ratio would have resulted in lower pricing for such
period, the applicable Lenders shall have no obligation to repay any interest
or fees to the Company; provided that if, as a result of any restatement
or other adjustment to the financial statements of the Borrower a proper
calculation of the Consolidated Leverage Ratio would have resulted in higher
pricing for one or more periods and lower pricing for one or more other periods
(due to the shifting of income or expenses from one period to another period or
any similar reason), then the amount payable by the Borrower pursuant to clause (i) above
shall be based upon the excess, if any, of the amount of interest and fees that
should have been paid for all applicable periods over the amount of interest
and fees paid for all such periods.

 

“Applicable
Percentage” means (a) in respect of the Term B Facility, with respect
to any Term B Lender at any time, the percentage (carried out to the ninth
decimal place) of the Term B Facility represented by (i) on the Effective
Date, such Term B Lender’s Term B Commitment at such time and (ii) thereafter,
the principal amount of such Term B Lender’s Term B Loans at such time (subject
to adjustment as provided in Section 3.11), (b) in respect of
any Incremental Term Facility, with respect to any Incremental Term Lender
under such Incremental Term Facility at any time, the percentage (carried out
to the ninth decimal place) of such Incremental Term Facility represented by (i) on
the applicable Incremental Effective Date, such Incremental Term Lender’s
Incremental Term Commitment at such time and (ii) thereafter, the
principal amount of such Incremental Term Lender’s Incremental Term Loans at
such time (subject to adjustment as provided in Section 3.11), and (c) in
respect of the Revolving Credit Facility, with respect to any Revolving Lender
at any time, the percentage (carried out to the ninth decimal place) of the
Revolving Credit Facility represented by such Revolving Lender’s Revolving
Commitment at such time (subject to adjustment as provided in Section 3.11).  If the commitment of each Lender to make
Loans and the obligation of the Issuer to Issue Letters of Credit have been
terminated pursuant to Section 9.02, or if the Commitments have
expired, then the Applicable Percentage of each Lender in respect of the
applicable facility shall be determined based on the Applicable Percentage of
such Lender in respect of such facility most recently in effect, giving effect
to any subsequent assignments.  The
initial Applicable Percentage of each Lender in respect of each facility is set
forth opposite the name of such Lender on Schedule 2.01 or in the
Assignment and Assumption pursuant to which such Lender becomes a party hereto,
as applicable.

 

“Applicable
Threshold Price” has the meaning specified in Schedule 2.19.

 

3

 

“Approved
Fund” means any Fund 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.

 

“Ares”:  Ares Management LLC or any of its Affiliates,
any investment fund solely managed by any such Persons or any Affiliate of any
such investment fund.

 

“Assignee”
has the meaning specified in Section 11.07(a).

 

“Assignee
Group” means two or more Eligible Assignees that are Affiliates of one
another or two or more Approved Funds managed by the same investment advisor or
by affiliated investment advisors.

 

“Assignment
and Assumption” means an assignment and assumption entered into by a Lender
and an Eligible Assignee (with the consent of any party whose consent is
required by Section 11.07(a)), and accepted by the Agent,
substantially in the form of Exhibit D or any other form approved
by the Agent.

 

“Attorney
Costs” means and includes all reasonable fees and disbursements of any law
firm or other external counsel.

 

“Auction”
has the meaning specified in Section 2.19(a).

 

“Auction
Amount” has the meaning specified in Schedule 2.19.

 

“Auction
Assignment and Assumption” has the meaning specified in Schedule 2.19.

 

“Auction
Manager” has the meaning specified in Section 2.19(a).

 

“Auction
Notice” has the meaning specified in Schedule 2.19.

 

“Audited Financial
Statements” means (a) as to the Borrower and its Subsidiaries
other than the Acquired Business and its Subsidiaries, the audited consolidated
balance sheet of the Borrower
and its Subsidiaries for the fiscal year ended December 31, 2009, and the related consolidated statements of
income or operations, shareholders’ equity and cash flows for such fiscal year
of the Borrower and its
Subsidiaries, including the notes thereto, and (b) as to the Acquired
Business and its Subsidiaries, the consolidated balance sheet of the Acquired
Business as of the end of the fiscal year ended December 31, 2009, and
related consolidated statements of operations, cash flows and shareholders’
equity for such fiscal year, accompanied by the unqualified opinions of
Berberich Trahan & Co., P.A.

 

“Auto-Extension
Letter of Credit” has the meaning specified in Section 3.02(d).

 

“Available
Amount” means, at any time, the sum of:

 

(i) the cumulative portion of Excess Cash Flow for each fiscal year of
the Borrower ending prior to such time for which internal financial statements
are available, commencing with the fiscal year ending December 31, 2011,
that is not required to be applied to repay Term Loans pursuant to Section 2.09(b);
plus

 

(ii) the amount of Net Cash Proceeds from any issuance or sale (other
than to a Subsidiary) of Equity Interests (other than Disqualified Equity
Interests) of the Borrower received following the Effective Date and prior to
or simultaneously with such time; plus

 

4

 

(iii) $15,000,000; plus

 

(iv) all cash returns of principal or capital cash dividends and other
cash returns received by a Loan Party on or after the Effective Date with
respect to Investments existing on the Effective Date and described on Schedule 8.04;
minus

 

(v) the aggregate amount of Investments made following the Effective
Date and prior to such time in reliance on Section 8.04(m) (net
of any cash return to the Borrower and its Subsidiaries in respect of such
Investments); minus

 

(vi) the aggregate amount of Restricted Payments made following the
Effective Date and prior to such time in reliance on Section 8.08(a)(vi);
minus

 

(vii) the aggregate amount of Specified Indebtedness prepaid, redeemed or
repurchased following the Effective Date and prior to such time in reliance on Section 8.08(b)(ii).

 

“Available
Liquidity” means, on any day, the sum of (a) unrestricted cash and
Cash Equivalents on hand of the Borrower and its Subsidiaries on such day that
is free of all Liens other than any Lien permitted by clauses (b), (c) and
(j) of Section 8.01, plus (b) the actual
aggregate amount by which the Aggregate Revolving Commitments, on such day,
exceeds the Total Revolving Usage.

 

“Backup
Support” means, with respect to any Letter of Credit, to Cash Collateralize
such Letter of Credit or to deliver to the Agent a letter of credit, from a
financial institution and in a form reasonably satisfactory to the Agent and
the applicable Issuer, to support the Borrower’s obligations with respect to
such Letter of Credit.

 

“Bank
of America” means Bank of America, N.A., a national banking association.

 

“Bankruptcy
Code” means the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101, et seq.).

 

“Base
Rate” means for any day a fluctuating rate per annum equal to the highest
of (a) the Federal Funds Rate plus 1/2 of 1%; (b) the rate of
interest in effect for such day as publicly announced from time to time by Bank
of America as its “prime rate”; and (c) the sum of 1.00% and the LIBOR
Rate (without giving effect to any rounding provided for in the definition of “LIBOR
Rate”) that would be applicable for an Interest Period of one month beginning
on such day (or if such day is not a Business Day, the immediately preceding
Business Day).  The “prime rate” referred
to in clause (b) above is a rate set by Bank of America based
upon various factors, including Bank of America’s costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate.  Any change in such prime rate
announced by Bank of America shall take effect at the opening of business on
the day specified in the public announcement of such change.

 

“Base
Rate Loan” means a Loan or an L/C Advance that bears interest based on the
Base Rate.

 

“Borrower”
has the meaning specified in the Preamble.

 

“Borrowing”
means a borrowing hereunder consisting of Loans of the same Class and Type
made to the Borrower on the same day by the applicable Lenders and, in the case
of LIBOR Rate Loans, having the same Interest Period.  The making of a Swing Line Loan shall not
constitute a Borrowing.

 

“Borrowing
Date” means any date on which a Borrowing occurs under Section 2.03.

 

5

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required by law to close or are in fact
closed, in the state where the Agent’s Payment Office is located and, if the
applicable Business Day relates to any LIBOR Rate Loan, means such a day on
which dealings are carried on in the London dollar interbank market.

 

“Capital
Adequacy Regulation” means any guideline, request or directive of any
central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.

 

“Capital
Expenditures” means, with respect to any Person and its Subsidiaries
for any period, any expenditure on a consolidated basis in respect of the
purchase or other acquisition of any fixed or capital asset (excluding
(i) normal replacements and maintenance which are properly charged to
current operations and (ii) Permitted Acquisitions).

 

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

 

“Capital
Stock” means (a) in the case of a corporation, corporate stock; (b) in
the case of an association or similar business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock; (c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited); and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.

 

“Cash
Collateralize” means to pledge and deposit with or deliver to the Agent,
for the benefit of the Agent, the Issuers, the Swing Line Lender and the
Revolving Lenders, as applicable, as additional collateral for the L/C
Obligations, Obligations in respect of Swing Line Loans or obligations of
Lenders to fund participations in respect of any thereof (as the context may
require), cash or deposit account balances, in each case pursuant to
documentation in form and substance reasonably satisfactory to the Agent, the
Issuers and the Swing Line Lender, as applicable (which documents are hereby
consented to by the Revolving Lenders).  “Cash
Collateral” shall have a meaning correlative to the foregoing and shall
include the proceeds of such cash collateral.

 

“Cash
Equivalents” means:

 

(a)                          marketable direct
obligations issued by, or unconditionally guaranteed by, the United States
government or issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing within one year from the
date of acquisition;

 

(b)                         demand deposits, certificates
of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of one year or less from the date of acquisition issued by
any Lender or by any commercial bank organized under the laws of the United
States of America or any state thereof having combined capital and surplus of
not less than $500,000,000;

 

(c)                          commercial paper of an
issuer rated at least A-2 by S&P or P 2 by Moody’s, or carrying an
equivalent rating by a nationally recognized rating agency, if both of the two
named rating

 

6

 

agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition;

 

(d)                         repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b) of
this definition, having a term of not more than 30 days with respect to
securities issued or fully guaranteed or insured by the United States
government;

 

(e)                          securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed by
any state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as
the case may be) are rated at least A by S&P or A by Moody’s;

 

(f)                            securities with maturities
of six months or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition; and

 

(g)                         shares of money market
mutual or similar funds which invest exclusively in assets satisfying the requirements
of clauses (a) through (f) of this definition;

 

provided, however,
that, with respect to any Foreign Subsidiary, “Cash Equivalents” shall also
include:  (x) direct obligations of
the sovereign nation (or any agency thereof) in which such Foreign Subsidiary
is organized and is conducting business or in obligations fully and
unconditionally guaranteed by such sovereign nation (or any agency thereof), in
each case maturing within one year after such date, (y) investments of the
type and maturity described in clauses (a) through (f) above
of foreign obligors, which investments or obligors (or the parents of such
obligors) have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies and (z) shares of money market mutual
or similar funds which invest exclusively in assets otherwise satisfying the
requirements of this definition (including this proviso).

 

“Cash
Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, credit or debit card,
purchasing card, electronic funds transfer and other cash management
arrangements.

 

“Change
of Control” means the occurrence of any of the following:  (a) any person or group of persons
(within the meaning of the Exchange Act) other than the Permitted Holder shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 of
the SEC under the Exchange Act) of 35% or more of the issued and outstanding
Voting Stock of the Borrower or (b) during any period of twelve
consecutive calendar months, individuals who, at the beginning of such period,
constituted the board of directors of the Borrower (together with any new
directors whose election by the board of directors of the Borrower or whose
nomination for election by the stockholders of the Borrower was approved by a
vote of at least a majority of the directors then still in office who either
were directors at the beginning of such period or whose elections or nomination
for election was previously so approved) cease for any reason other than death
or disability to constitute a majority of the directors then in office; provided
that it shall not constitute a Change of Control under clause (a) above
solely because Ares ceases to be a Permitted Holder at a time when it owns 35%
or more of the issued and outstanding Voting Stock of the Borrower, unless Ares
thereafter acquires beneficial ownership or voting control of additional
Capital Stock of the Borrower.

 

7

 

“Class”
means, with respect to any Loan, its characterization as a Revolving Loan, a
Term B Loan, or any Incremental Term Loan outstanding under a particular
Incremental Term Facility or a Loan modified pursuant to a particular Extension
Amendment.

 

“Closing
Fee” has the meaning specified in Section 2.12(c).

 

“Code”
means the Internal Revenue Code of 1986, and regulations promulgated
thereunder.

 

“Co-Documentation
Agents” means Oppenheimer & Co. Inc., Royal Bank of Canada and
SunTrust Bank, each in their capacity as co-documentation agents.

 

“Collateral”
means all of the “Collateral” and “Mortgaged Property” referred to in the
Collateral Documents and all other property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien now or hereafter exists in favor of the Secured Creditors, or the
Agent on behalf of the Secured Creditors.

 

“Collateral
Documents” means the Security Agreement, each Mortgage and any other
agreement pursuant to which any Loan Party grants collateral to the Agent for
the benefit of the Secured Creditors.

 

“Commitment”
means a Revolving Commitment, a Term Commitment or a Swing Line Commitment, as
the context may require.

 

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

 

“Consolidated
Current Assets” means, of any Person at any date, all amounts (other than
cash and Cash Equivalents) 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 such Person and its Subsidiaries at such date.

 

“Consolidated
Current Liabilities” means, of any Person at any date, 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
such Person and its Subsidiaries at such date, but excluding Indebtedness.

 

“Consolidated
EBITDA” means, of any Person for any period, Consolidated Net Income of
such Person and its Subsidiaries for such period plus without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) taxes based on
income or in lieu of income taxes, (b) Consolidated Interest Expense of
such Person and its Subsidiaries, amortization or write-off of debt discount
and debt issuance costs and commissions, discounts and other fees and charges
associated with Indebtedness, (c) depreciation and amortization expense, (d) amortization
and impairment of intangibles (including, but not limited to, goodwill) and
organization costs, (e) any extraordinary, unusual or non-recurring
expenses or losses (including, whether or not otherwise includable as a
separate item in the statement of such Consolidated Net Income for such period,
losses on sales of assets outside of the ordinary course of business and loss
on early retirement of debt), (f) to the extent reimbursed during such
period, expenses covered by indemnification provisions in any agreements in connection
with Permitted Acquisitions, (g) to the extent covered by insurance and
reimbursed during such period, expenses with respect to liability or casualty
events or business interruption, (h) the amount of any non-recurring
restructuring charges or reserves deducted from such Consolidated Net Income
for such period, including any non-recurring costs incurred in connection with
the closure and/or consolidation of facilities and (i) any other non-cash
charges minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) interest income
(except to the extent deducted in determining Consolidated Interest Expense), (b) any
extraordinary, unusual or non-recurring income or

 

8

 

gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the sales
of assets outside of the ordinary course of business and gain on early of
retirement of debt) and (c) any other non-cash income increasing such
Consolidated Net Income for such period, other than the accrual of revenue in
the ordinary course of business, all as determined on a consolidated basis.

 

“Consolidated
Interest Coverage Ratio” means, as of the end of any period of four
consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated
EBITDA of the Borrower and its Subsidiaries for such period to (b) Consolidated
Interest Expense of the Borrower and its Subsidiaries for such period.

 

“Consolidated
Interest Expense” means, of any Person for any period, total interest
expense (including that attributable to Capital Lease Obligations) of such
Person and its Subsidiaries for such period with respect to all outstanding
Indebtedness of such Person and its Subsidiaries (including all commissions,
discounts and other fees and charges owed by such Person with respect to
letters of credit and bankers’ acceptance financing and net costs of such
Person under Swap Contracts in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP but excluding the
equity component of derivatives), excluding amortization and write-off of debt
discount and debt issuance costs, commissions, discounts and other fees and
charges associated with Indebtedness and the amortization of the equity
component of any convertible debt instrument.

 

“Consolidated
Leverage Ratio” means, as of the end of any period of four consecutive
fiscal quarters of the Borrower, the ratio of (a) Consolidated Total Debt
as of the end of such period to (b) Consolidated EBITDA of the Borrower
and its Subsidiaries for such period.

 

“Consolidated
Net Income” means, of any Person for any period, the consolidated net
income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided,
that in calculating Consolidated Net Income of the Borrower and its
consolidated Subsidiaries for any period, there shall be excluded (a) the
income (or deficit) of any Person accrued prior to the date it becomes a
Subsidiary of the Borrower or is merged into or consolidated with the Borrower
or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) solely for purposes of
determining the Available Amount and Excess Cash Flow, the undistributed
earnings of any Subsidiary of the Borrower to the extent that the declaration
or payment of dividends or similar distributions by such Subsidiary is not at
the time permitted by the terms of any Contractual Obligation (other than under
any Loan Document) or Requirement of Law applicable to such Subsidiary unless
such restriction with respect to the payment of dividends or similar
distributions has been legally waived; provided that Consolidated Net
Income of the Borrower will be increased by the amount of dividends,
distributions and other payments actually paid in cash to any Loan Party, to
the extent not already included therein.

 

“Consolidated
Total Debt” means, at any date, the excess of (A) the aggregate
principal amount of all Indebtedness (other than Indebtedness described in
clause (f) of the definition thereof) of the Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP over (B) the
lesser of (i) $30,000,000 and (ii) the aggregate amount of
unrestricted cash and Cash Equivalents of the Borrower and its Subsidiaries, on
a consolidated basis, on such date.

 

“Consolidated
Working Capital”  at any date, the
difference of (a) Consolidated Current Assets of the Borrower on such date
less (b) Consolidated Current Liabilities of the Borrower on such date.

 

9

 

“Contingent
Obligation” means, as to any Person and without duplication, any direct or
indirect liability of that Person, whether or not contingent, with or without
recourse, (a) with respect to any Indebtedness, lease, dividend, letter of
credit or other obligation (the “primary obligations”) of another Person
(the “primary obligor”), including any obligation of that Person (i) to
purchase, repurchase or otherwise acquire such primary obligations or any
security therefor; (ii) to advance or provide funds for the payment or
discharge of any such primary obligation, or to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency or any balance sheet item, level of income or financial condition of
the primary obligor; (iii) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation; or (iv) otherwise to assure or hold harmless the holder of any
such primary obligation against loss in respect thereof (each, a “Guaranty
Obligation”); (b) with respect to any Surety Instrument issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments; (c) to purchase any materials,
supplies or other property from, or to obtain the services of, another Person
if the relevant contract or other related document or obligation requires that
payment for such materials, supplies or other property, or for such services,
shall be made regardless of whether delivery of such materials, supplies or
other property is ever made or tendered, or such services are ever performed or
tendered; or (d) in respect of any Swap Contract (other than in respect of
ordinary course foreign currency hedging arrangements).  The amount of any Contingent Obligation shall
(w) in the case of Guaranty Obligations, be deemed equal to the lesser of (i) the
stated or determinable amount of the primary obligation in respect of which
such Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof, and (ii) the
stated amount of the guaranty, (x) in the case of Contingent Obligations
in respect of Swap Contracts, be deemed equal to the aggregate Swap Termination
Value of such Swap Contracts, (y) in the case of Contingent Obligations in
respect of Surety Instruments other than Non-Surety L/C’s, be deemed equal to
the probable amount of the expected liability thereunder, and (z) in the
case of Contingent Obligations in respect of Non-Surety L/C’s, be deemed equal
to (i) the face amount of outstanding Non-Surety L/C’s which are not
Letters of Credit and (ii) the outstanding amount of L/C Obligations in
respect of Non-Surety L/C’s which are Letters of Credit pursuant to Article III.

 

“Contractual
Obligation” means, as to any Person, any provision of any security issued
by such Person or of any agreement, undertaking, contract, indenture, mortgage,
deed of trust or other instrument, document or agreement to which such Person is
a party or by which it or any of its property is bound.

 

“Conversion/Continuation
Date” means any date on which, under Section 2.04, the Borrower
(a) converts Revolving Loans or Term Loans of one Type to the other Type
or (b) continues LIBOR Rate Loans for a new Interest Period.

 

“Credit
Extension” means and includes (a) the making of any Loan hereunder and
(b) the Issuance of any Letter of Credit hereunder.

 

“Debtor
Relief Laws” means the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.

 

“Default”
means any event or circumstance which, with the giving of notice, the lapse of
time, or both, would (if not cured or otherwise remedied during such time)
constitute an Event of Default.

 

“Defaulting
Lender” means, subject to Section 3.11(b), any Lender that (a) has
failed to perform any of its funding obligations hereunder, including in
respect of its Loans or participations in respect of Letters of Credit or Swing
Line Loans, within three Business Days of the date required to be funded by it

 

10

 

hereunder,
unless such obligation is the subject of a good faith dispute as to the
satisfaction of one or more conditions precedent to funding (specifically identified
and including the particular Default, if any); (b) has notified the
Borrower, the Agent or any Lender that it does not intend to comply with its
funding obligations or has made a public statement to that effect with respect
to its funding obligations hereunder or generally under other agreements in
which it commits to extend credit; (c) has failed, within three Business
Days after request by the Agent or the Borrower, to confirm in a manner
satisfactory to the Agent (or the Borrower, as applicable) that it will comply
with, and is financially able to meet, its funding obligations; or (d) has,
or has a direct or indirect parent company that is or will be, (i) the
subject of a proceeding under any Debtor Relief Law, (ii) has or will have
a receiver, conservator, trustee, administrator, assignee for the benefit of
creditors or similar Person charged with reorganization or liquidation of its
business or a custodian appointed for it, or (iii) taken any action in
furtherance of, or indicated its consent to, approval of or acquiescence in any
such proceeding or appointment (provided that (x) a Lender shall
not be a Defaulting Lender solely by virtue of the ownership or acquisition of
any equity interest in, or the exercise of control (outside of the context of a
proceeding of the type described in clause (d) above) of, that
Lender or any direct or indirect parent company thereof by a Governmental
Authority and (y) as of any date of determination, the determination of
whether any Lender is a Defaulting Lender hereunder shall not take into
account, and shall not otherwise impair, any amounts funded by such Lender
through an SPC pursuant to Section 11.07(h)), in each case, as the
Agent may reasonably determine based solely on the foregoing.

 

“Discount
Range” has the meaning specified in Schedule 2.19.

 

“Disposition”
has the meaning specified in Section 8.02.

 

“Disqualified
Equity Interest” means any Equity Interest that, by its terms (or by the
terms of any security into which it is convertible, or for which it is exchangeable,
in each case at the option of the holder of the Equity Interest), or upon the
happening of any event, (a)(i) matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, or (ii) is redeemable
at the option of the holder of the Equity Interest, in whole or in part, in
each case under this clause (a) except (A) to the extent
maturing or redeemable for Equity Interests that are not Disqualified Equity
Interests and/or (B) maturing or redeemable as a result of a change of
control or asset sale so long as the rights of the holders thereof upon such
event are subject to the prior payment in full of the Loans and/or
(C) with respect to Equity Interests held by employees, officers or
directors that mature and/or are redeemable upon termination of employment, or
(b) provides for the scheduled payment of dividends in cash on or prior to
the date on which all Commitments and Term Loans outstanding at the time such
Equity Interest is issued terminate and mature.

 

“Dollars,”
“dollars” and “$” each mean lawful money of the United States.

 

“Domestic
Subsidiary” means a Subsidiary organized under the laws of (a) the
United States or any political subdivision thereof, or any agency, department
or instrumentality thereof, or (b) any state of the United States.

 

“Effective
Date” means the date on which all conditions precedent set forth in Section 5.01
are satisfied or waived by the Required Lenders.

 

“Eligible
Assignee” means any Person that meets the requirements to be an assignee
under Sections 11.07(a)(iii) and (v) (subject to
such consents, if any, as may be required under Section 11.07(a)(iii)).

 

11

 

“Environmental
Claims” means all claims, however asserted, by any Governmental Authority
or other Person alleging potential liability or responsibility for violation of
any Environmental Law, or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), investigation, cleanup,
removal, remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based upon the
presence, placements, discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or non-sudden, accidental or
non-accidental, placements, spills, leaks, discharges, emissions or releases)
of any Hazardous Material at, in, or from any property, whether or not owned by
the Borrower or any Subsidiary or taken as collateral, or in connection with
any operations of the Borrower.

 

“Environmental
Laws” means all federal, state, local or foreign (but only in those foreign
jurisdictions where the Borrower and/or any Subsidiary has material operations)
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, land use and related
health and safety matters, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, the Federal Water
Pollution Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances Control Act and
the Emergency Planning and Community Right-to-Know Act.

 

“Environmental
Permit” means any permit, approval, identification number, license or other
authorization required under any Environmental Law.

 

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

 

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

 

“ERISA
Affiliate” means any trade or business (whether or not incorporated) under
common control with the Borrower within the meaning of Section 414(b) or
(c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).

 

“ERISA
Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a
withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which such entity was a “substantial
employer” as defined in Section 4001(a)(2) of ERISA or a cessation of
operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan
is in reorganization, in each case the liability with respect to which has not
been satisfied; (d) the filing of a notice of intent to terminate a
Pension Plan that has any Unfunded Pension Liability; (e) the treatment of
a Pension Plan amendment that has any Unfunded Pension Liability as a
termination under Section 4041 or 4041A of ERISA; (f) the institution
by the PBGC of proceedings to terminate a Pension Plan; (g) the determination
that any Pension Plan is considered an at-risk plan or a plan in endangered or
critical status within the meaning of Sections 430, 431 and 432 of the
Code or Sections 303, 304 and 305 of ERISA; (h) an event or condition
which might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan; or (i) the imposition of any liability
under Title IV of ERISA,

 

12

 

other
than PBGC premiums due but not delinquent under Section 4007 of ERISA,
upon the Borrower or any ERISA Affiliate.

 

“Event
of Default” means any of the events or circumstances specified as such in Section 9.01.

 

“Excess
Cash Flow” means, for any fiscal year of the Borrower, the excess, if any,
of (a) the sum, without duplication, of (i) Consolidated Net Income
of the Borrower for such fiscal year, (ii) the amount of all non-cash
charges (including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) the amount of the decrease, if any, in
Consolidated Working Capital for such fiscal year, (iv) the aggregate net
amount of loss on the Disposition of property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent deducted in arriving at such
Consolidated Net Income and (v) the net increase during such fiscal year
(if any) in deferred tax accounts of the Borrower minus (b) the
sum, without duplication, of (i) the amount of all non-cash credits, gains
and income included in arriving at such Consolidated Net Income, (ii) the
aggregate amount actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (minus the
principal amount of Indebtedness incurred and minus the amount of any
such expenditures financed with the proceeds of any Disposition or Recovery
Event to the extent financed in accordance with clause (a)(x) of
the definition of “Net Cash Proceeds” to finance such expenditures), (iii) the
aggregate amount of all payments and prepayments of Revolving Loans and Swing
Line Loans during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Commitments and all payments and
prepayments of Indebtedness (other than optional prepayments of Term Loans) of
the Borrower and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (iv) the
aggregate amount of all cash consideration paid in connection with Permitted
Acquisitions during such fiscal year other than those funded from the proceeds
of Indebtedness, (v) the amount of the increase, if any, in Consolidated
Working Capital for such fiscal year, (vi) the aggregate net amount of
gain on the Disposition of property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent included in arriving at such Consolidated Net Income,
and (vii) the net decrease during such fiscal year (if any) in deferred
tax accounts of the Borrower.

 

“Exchange
Act” means the Securities Exchange Act of 1934 and the regulations
promulgated thereunder.

 

“Existing
Credit Agreement” has the meaning specified in the recitals.

 

“Existing
Letters of Credit” means the existing letters of credit set forth on Schedule
1.01(a).

 

“Existing
Loans” has the meaning specified in the recitals.

 

“Existing
Seller Notes” means the promissory notes listed on Schedule 1.01(b).

 

“Expiration
Time” has the meaning specified in Schedule 2.19.

 

“Extending
Lenders” has the meaning specified in Section 2.17(a).

 

“Extension
Amendment” has the meaning specified in Section 2.17(a)

 

“Extension
Offer” has the meaning specified in Section 2.17(a).

 

13

 

“FASB
ASC” means the Accounting Standards Codification of the Financial
Accounting Standards Board.

 

“Federal
Funds Rate” means, for any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if no such rate is so published on such
next succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%)
charged to Bank of America on such day on such transactions as determined by
the Agent.

 

“Fee
Letter” means the fee letter dated as of October 18, 2010 among the
Borrower and the Agent.

 

“Foreign
Lender” has the meaning specified in Section 10.11(a).

 

“Foreign
Subsidiary” means a Subsidiary which is not a Domestic Subsidiary.

 

“FRB”
means the Board of Governors of the Federal Reserve System, and any
Governmental Authority succeeding to any of its principal functions.

 

“Fronting
Exposure” means, at any time there is a Defaulting Lender, (a) with
respect to the Issuer, such Defaulting Lender’s Applicable Percentage of the
outstanding L/C Obligations other than L/C Obligations as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof; and (b) with
respect to the Swing Line Lender, such Defaulting Lender’s Applicable
Percentage of Swing Line Loans other than Swing Line Loans as to which such
Defaulting Lender’s participation obligation has been reallocated to other
Lenders or Cash Collateralized in accordance with the terms hereof.

 

“Fund”
means any Person (other than a natural person) that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course.

 

“Further
Taxes” means any and all present or future taxes, levies, assessments,
imposts, duties, deductions, fees, withholdings or similar charges (including,
net income taxes and franchise taxes), and all liabilities with respect
thereto, imposed by any jurisdiction on account of amounts payable or paid
pursuant to Section 4.01.

 

“GAAP”
means, subject to Section 1.03, generally accepted accounting
principles set forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to the
circumstances as of the date of determination.

 

“Governmental
Authority” means (a) any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing; and (b) the
National Association of Insurance Commissioners.

 

14

 

“Guaranteed
Obligations” means (a) the full and prompt payment when due (whether
at the stated maturity, by acceleration or otherwise) of the principal and
interest (whether such interest is allowed as a claim in a bankruptcy
proceeding with respect to the Borrower or otherwise) of each Loan made under
this Agreement to the Borrower, together with all other Obligations (including
obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities (including indemnities,
fees and interest thereon) of the Borrower to the Agent or any Lender now
existing or hereafter incurred under, arising out of or in connection with this
Agreement or any other Loan Documents and the due performance and compliance with
all terms, conditions and agreements contained in the Loan Documents by the
Borrower; and (b) the full and prompt payment when due (whether by
acceleration or otherwise) of all Obligations (including obligations which, but
for the automatic stay under Section 362(a) of the Bankruptcy Code or
similar proceeding under applicable law, would become due) of the Borrower or
any Subsidiary owing under any Rate Swap Document or Cash Management Agreement
entered into by the Borrower or any Subsidiary with any Lender or any Affiliate
thereof (even if such Lender subsequently ceases to be a Lender under this
Agreement for any reason) so long as such Lender or Affiliate participates in
such Rate Swap Document or Cash Management Agreement and their subsequent
assigns, if any, whether now in existence or hereafter arising, and the due
performance and compliance with all terms, conditions and agreements contained
therein.

 

“Guarantor”
means, at any time, any Subsidiary that is a party to the Security Agreement at
such time.

 

“Guaranty
Obligation” has the meaning specified in the definition of “Contingent
Obligation.”

 

“Hazardous
Materials” means all those substances that are regulated by, or which may
form the basis of liability or a standard of conduct under, any Environmental
Law, including any substance identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous constituent, special waste,
hazardous substance, hazardous material, or toxic substance, or petroleum or
petroleum-derived substance or waste.

 

“Honor
Date” has the meaning specified in Section 3.03(b).

 

“Incremental
Term Commitment” means, as to any Incremental Term Lender, such Incremental
Term Lender’s obligation to fund an Incremental Term Loan pursuant to Section 2.18,
and related Incremental Term Joinder Agreement.

 

“Incremental
Term Facility” means, at any time and as to any particular Class of
Incremental Term Loans, the aggregate principal amount of the Incremental Term
Loans of all Incremental Term Lenders outstanding at such time.

 

“Incremental
Term Joinder Agreement” has the meaning specified in Section 2.18(b)(ii)(A).

 

“Incremental
Effective Date” means, as to any particular Class of Incremental Term
Loans, the effective date of the applicable Incremental Term Joinder Agreement
executed and delivered by the relevant parties (in accordance with Section 2.18)
to institute such Class of Incremental Term Loans.

 

“Incremental
Term Lenders” has the meaning specified in Section 2.18(b)(ii)(A).

 

“Incremental
Term Loans” has the meaning specified in Section 2.18(a).

 

15

 

“Incremental
Term Maturity Date” means, as to any particular Class of Incremental
Term Loans, the stated maturity date for such Incremental Term Loans in the applicable
Incremental Term Joinder Agreement.

 

“Incremental
Term Percentage” means, as to any Incremental Term Lender, the percentage
which (a) the Incremental Term Commitment of such Lender as to the
particular Class of Incremental Term Loans (or, after the applicable
Incremental Effective Date, the principal amount of such Lender’s applicable
Incremental Term Loan) is of (b) the aggregate amount of Incremental Term
Commitments as to the particular Class of Incremental Term Loans (or,
after the applicable Incremental Effective Date, the aggregate principal amount
of all applicable Incremental Term Loans).

 

“Indebtedness”:  of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of property or
services (other than trade and similar accounts payable and accrued expenses
incurred in the ordinary course of such Person’s business and accrued pension
costs and other employee benefit and compensation obligations arising in the
ordinary course of business), (c) all obligations of such Person evidenced
by notes, bonds, debentures or other similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (e) all
Capital Lease Obligations of such Person, (f) all obligations of such
Person, contingent or otherwise, as an account party or applicant under
acceptance, letter of credit or similar facilities, (g) all obligations of
such Person to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (h) all Guaranty Obligations of such Person
in respect of obligations of the kind referred to in clauses (a) through
(g) above; (i) all obligations of the kind referred to in clauses (a) through
(h) above secured by (or for which the holder of such obligation
has an existing right, contingent or otherwise, to be secured by) any Lien on
property (including accounts and contract rights) owned by such Person, whether
or not such Person has assumed or become liable for the payment of such
obligation and (j) for the purposes of Section 9.01(e) only,
all obligations of such Person in respect of Hedge Agreements.  The Indebtedness of any Person shall include
the Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person’s ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness expressly provides
that such Person is not liable therefor. 
The amount of Indebtedness of the Borrower and its Subsidiaries shall be
calculated without duplication of Guaranty Obligations of the Borrower or any
Subsidiary in respect thereof.  If any
Indebtedness is limited to recourse against a particular asset or assets, the
amount of the Indebtedness shall be equal to the lesser of the amount of such
Indebtedness and the fair market value of such asset or assets at the date of
determination of the amount of such Indebtedness.  “Indebtedness” shall not include (x) any
customary contingent earnout or holdback in connection with an acquisition,
(y) any obligations of the Borrower or its Subsidiaries in respect of
customer advances received and held in the ordinary course of business and
(z) performance bonds or performance guarantees (or bank guarantees or
letters of credit in lieu thereof) entered into in the ordinary course of
business.

 

“Indemnitee”
has the meaning specified in Section 11.04(b).

 

“Indenture”
means that certain Indenture, dated as of November 2, 2010, among the
Borrower, as issuer, the guarantors from time to time party thereto and
Wilmington Trust Company, as trustee.

 

“Independent
Auditor” has the meaning specified in Section 7.01(a).

 

“Insolvency
Proceeding” means, with respect to any Person, (a) any case, action or
proceeding with respect to such Person before any court or other Governmental
Authority relating to bankruptcy, reorganization, 

 

16

 

insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors; or (b) any
general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors, in each case, undertaken
under U.S. Federal, state or foreign law, including the Bankruptcy Code.

 

“Intellectual
Property Security Agreement” has the meaning specified in Section 5.01(d).

 

“Interest
Payment Date” means, as to any LIBOR Rate Loan, the last day of each
Interest Period applicable to such Loan and, as to any Base Rate Loan, the last
Business Day of each calendar quarter; provided that if any Interest
Period for an LIBOR Rate Loan exceeds three months, the date that falls three
months after the beginning of such Interest Period and after each Interest
Payment Date thereafter is also an Interest Payment Date.

 

“Interest
Period” means, as to each LIBOR Rate Loan, the period commencing on the
date such LIBOR Rate Loan is disbursed or converted to or continued as an LIBOR
Rate Loan and ending on the date one, two, three or six (or, if available to
all Lenders, nine or twelve) months thereafter, as selected by the Borrower in
its Notice of Borrowing or Notice of Conversion/Continuation, or such other
period as requested by the Borrower and agreed to by all applicable Lenders; provided
that:

 

(a)                                  any Interest
Period that would otherwise end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding Business Day;

 

(b)                                 any Interest
Period that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last Business Day of the
calendar month at the end of such Interest Period; and

 

(c)                                  no Interest
Period for any Loan shall extend beyond the Revolving Maturity Date or Term
Maturity Date, as applicable, for the applicable Class of Loans.

 

“Internal
Control Event” means a material weakness in the Borrower’s internal
controls over financial reporting as described in the Securities Laws.

 

“Investment”
has the meaning specified in Section 8.04.

 

“IP Rights”
has the meaning specified in Section 6.17.

 

“IRS”
means the Internal Revenue Service, and any Governmental Authority succeeding
to any of its principal functions under the Code.

 

“ISP98”
has the meaning specified in Section 3.09.

 

“Issuance
Date” has the meaning specified in Section 3.01(a).

 

“Issue”
means, with respect to any Letter of Credit, to issue or to extend the expiry
of, or to renew or increase the amount of, such Letter of Credit; and the terms
“Issued,” “Issuing” and “Issuance” have corresponding
meanings.

 

17

 

“Issuer”
means Bank of America or, after the Effective Date, any other Revolving Lender
selected by the Borrower and approved by the Agent (such approval not to be
unreasonably withheld or delayed) that has agreed to act as issuer of such
Letter of Credit hereunder.

 

“Issuer
Documents” means, with respect to any Letter of Credit, the L/C
Application, and any other document, agreement and instrument entered into by
the Issuer and the Borrower (or any Subsidiary) or in favor of the Issuer and
relating to such Letter of Credit.

 

“Joint
Bookrunners” means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Jefferies Finance LLC, Oppenheimer & Co., Inc.,
SunTrust Robinson Humphrey, Inc. and RBC Capital Markets, in their
capacity as joint bookrunners.

 

“Joint
Lead Arrangers” means Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Jefferies Finance LLC, in their capacity as joint lead
arrangers.

 

“L/C
Advance” means with respect to any Revolving Lender, a Revolving Lender’s
participation in any L/C Borrowing in accordance with its Revolving Percentage.

 

“L/C
Amendment Application” means an application form for amendment of
outstanding standby or commercial documentary letters of credit as shall at any
time be in use by the applicable Issuer, with such modifications as the
Borrower and such Issuer may reasonably approve.

 

“L/C
Application” means an application form for issuances of standby or
commercial documentary letters of credit as shall at any time be in use by the
applicable Issuer, with such modifications as the Borrower and such Issuer may
reasonably approve.

 

“L/C
Borrowing” means an extension of credit resulting from a drawing under any
Letter of Credit which shall not have been reimbursed on the date when made or
converted into a Borrowing of Revolving Loans under Section 3.03(b).

 

“L/C
Commitment” means the commitment of the Issuers to Issue, and the
commitment of the Revolving Lenders severally to participate in, Letters of
Credit from time to time pursuant to Article III, in an aggregate
amount not to exceed on any date $35,000,000. 
The L/C Commitment is a part of the Aggregate Revolving Commitment,
rather than a separate, independent commitment.

 

“L/C
Obligations” means at any time the sum, without duplication, of (a) the
Stated Amount of all outstanding Letters of Credit plus (b) the
amount of all unreimbursed drawings under all Letters of Credit, including all
outstanding L/C Borrowings.  For purposes
of computing the amount available to be drawn under any Letter of Credit, the
amount of such Letter of Credit shall be determined in accordance with Section 1.05.  For all purposes of this Agreement, if on any
date of determination a Letter of Credit has expired by its terms but any
amount may still be drawn thereunder by reason of the operation of Rule 3.14
of ISP98, such Letter of Credit shall be deemed to be “outstanding” in the
amount so remaining available to be drawn.

 

“L/C-Related
Documents” means the Letters of Credit, the L/C Applications, the L/C
Amendment Applications and any other document relating to any Letter of Credit,
including any standard form document used by any Issuer for letter of credit
issuances.

 

“Lender”
has the meaning specified in the introductory clause hereto.

 

18

 

“Lending
Office” means, as to any Lender, the office or offices of such Lender
specified as its “Lending Office” on Schedule 11.02, or such other
office or offices as such Lender may from time to time notify the Borrower and
the Agent.

 

“Letter
of Credit” means any letter of credit Issued by an Issuer pursuant to Article III and shall include the Existing Letters
of Credit.  A Letter of Credit may be a commercial letter
of credit or a standby letter of credit.

 

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

 

“Letter
of Credit Fee” has the meaning specified in Section 3.08(a).

 

“LIBOR
Rate” means:

 

(a)                                  for any
Interest Period with respect to an LIBOR Rate Loan, the rate per annum equal to
the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published
by Reuters (or other commercially available source providing quotations of BBA
LIBOR as designated by the Agent from time to time) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, for deposits in Dollars (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period.  If such rate is not available at such time
for any reason, then the “LIBOR Rate” for such Interest Period shall be the
rate per annum determined by the Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the LIBOR Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the
London interbank Eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of such Interest
Period; provided that, notwithstanding the foregoing, the LIBOR Rate
shall not be deemed to be less than 1.50% per annum with respect to the Term B
Loans; and

 

(b)                                 for any
interest calculation with respect to a Base Rate Loan on any date, the rate per
annum equal to (i) BBA LIBOR, at approximately 11:00 a.m., London
time determined two London Banking Days prior to such date for Dollar deposits
being delivered in the London interbank market for a term of one month
commencing that day or (ii) if such published rate is not available at
such time for any reason, the rate per annum determined by the Agent to be the
rate at which deposits in Dollars for delivery on the date of determination in
same day funds in the approximate amount of the Base Rate Loan being made or maintained
and with a term equal to one month would be offered by Bank of America’s London
Branch to major banks in the London interbank Eurodollar market at their
request at the date and time of determination; provided that,
notwithstanding the foregoing, the LIBOR Rate shall not be deemed to be less
than 1.50% with respect to the Term B Loans.

 

“LIBOR
Rate Loan” means a Loan that bears interest based on the LIBOR Rate (other
than a Base Rate Loan that bears interest pursuant to clause (c) of
the definition of “Base Rate”).

 

“Lien”
means any security interest, mortgage, deed of trust, pledge, hypothecation,
assignment for security, charge or deposit arrangement, encumbrance, lien
(statutory or other) or similar interest of any kind or nature whatsoever in respect
of any property (including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the interest of a lessor
under a capital lease, any financing lease having substantially the same
economic effect as any of the foregoing and any 

 

19

 

contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under an operating lease).

 

“Loan”
means an extension of credit by a Lender to the Borrower under Article II
or Article III in the form of a Revolving Loan, a Swing Line Loan,
a Term Loan or an L/C Advance, as the context requires.

 

“Loan
Documents” means this Agreement, the Notes, the Fee Letter, the L/C-Related
Documents, the Collateral Documents, any agreement creating or perfecting
rights in Cash Collateral pursuant to the provisions of Section 3.10
and all other documents delivered to the Agent or any Lender in connection
herewith.

 

“Loan
Party” means the Borrower and each Guarantor.

 

“Margin
Stock” means “margin stock” as such term is defined in Regulation T, U or X
of the FRB.

 

“Material
Adverse Effect” means a material adverse effect on (a) the business,
consolidated financial condition, results of operations, assets or liabilities
of the Borrower and its Subsidiaries taken as a whole, (b) the validity or
enforceability of this Agreement or any of the other Loan Documents against any
Loan Party or the rights or remedies of the Agent or the Lenders against any
Loan Party hereunder or thereunder or (c) the ability of any Loan Party to
perform its obligations under any Loan Documents to which it is a party.

 

“Material
Disposition” means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in the disposition by the
Borrower or a Subsidiary of (a) all or substantially all of the assets of
a Subsidiary, or of any business or division of the Borrower or a Subsidiary;
or (b) all of the Equity Interests of a Subsidiary (to the extent owned by
the Borrower and/or its Subsidiaries) to a Person that is not a Subsidiary.

 

“Material
Domestic Subsidiary” means, at any time, each Domestic Subsidiary other
than (a) any Domestic Subsidiary which has been designated by the Borrower
as an “Immaterial Subsidiary” which, together with all other Domestic
Subsidiaries so designated at such time, has (i) total (gross) revenues
(after eliminating intercompany revenues) for the preceding four fiscal quarter
period determined on a Pro Forma Basis less than 10% of the total (gross)
revenues of the Borrower and its Domestic Subsidiaries for such period and (ii) total
assets (after eliminating intercompany items) of less than 10% of the total
assets of the Borrower and its Domestic Subsidiaries as of the last day of such
period based upon the Borrower’s most recent annual or quarterly financial
statements delivered to the Agent pursuant to Section 7.01; and (b) any
Securitization Subsidiary.

 

“Merger
Agreement” has the meaning specified in the recitals.

 

“Merger
Agreement Representations” means the representations and warranties made by
or with respect to the Acquired Business and its Subsidiaries in the Merger
Agreement as are material to the interests of the Lenders, but only to the
extent that the Borrower has (or any of the Borrower’s Subsidiaries has) the
right to terminate the Borrower’s (or such Subsidiary’s) obligations under the
Merger Agreement, or to decline to consummate the Merger pursuant to the Merger
Agreement, as a result of a breach of such representations and warranties in
the Merger Agreement.

 

“MNPI”
means material non-public information with respect to the Borrower or any of
its Subsidiaries or the Term Loans.

 

20

 

“Moody’s”
means Moody’s Investors Service Inc. or its successors.

 

“Mortgage”
means any deed of trust, trust deed, deed to secure debt, mortgage, leasehold
mortgage or leasehold deed of trust delivered from time to time pursuant to Section 7.14.

 

“Mortgaged
Property” means any real property of the Borrower or any Guarantor having a
book or fair market value of $5,000,000 or more, as to which the Agent for the
benefit of the Secured Creditors shall be granted a Lien pursuant to one or
more Mortgages.

 

“Multiemployer
Plan” means a “multiemployer plan”, within the meaning of
Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes, is making, or is obligated to make contributions or, during
the preceding three calendar years, has made, or been obligated to make,
contributions.

 

“Multiple
Employer Plan” means a Plan which has two or more contributing sponsors
(including the Borrower or any ERISA Affiliate) at least two of whom are not
under common control, as such a plan is described in Section 4064 of
ERISA.

 

“Net
Cash Proceeds” means:

 

(a)                                  with respect to
any Disposition or Recovery Event, the aggregate cash proceeds (including cash
proceeds received by way of deferred payment of principal pursuant to a note,
installment receivable or otherwise, but only as and when received) received by
the Borrower or any Subsidiary (other than from the Borrower or any Subsidiary)
pursuant to such Disposition or Recovery Event, net of (i) the direct
costs relating to such Disposition or Recovery Event (including sales commissions
and legal, accounting and investment banking fees), (ii) taxes paid or
reasonably estimated by the Borrower to be payable as a result thereof
(including taxes that are or would be payable upon repatriation of such
proceeds to the United States), after taking into account any available tax
credits or deductions and any tax sharing arrangements, (iii) amounts
required to be applied to the repayment of any Indebtedness secured by a Lien
on the asset subject thereto (other than Indebtedness hereunder), (iv) the
amount of any reserve established in accordance with GAAP in respect of,
without duplication, (x) earn-outs and other purchase price adjustments
associated with the purchase price of the asset subject to such Disposition and
(y) liabilities associated with such asset that are retained by the
Borrower or such Subsidiary, including pension and post-employment benefit
liabilities, liabilities related to environmental matters and indemnification
obligations, and (v) proceeds that are within 365 days after such
Disposition or Recovery Event either (x) reinvested by the Borrower or the
applicable Subsidiary in long-term assets useful in the business of the
Borrower or the applicable Subsidiary or otherwise as expressly contemplated by
this Agreement or (y) applied towards the purchase price of an
Acquisition, to the extent that the Borrower would be permitted to pay cash to
consummate such an Acquisition as of the date of such Disposition or Recovery
Event; provided, that no amounts that would otherwise constitute Net
Cash Proceeds from a Disposition or series of related Dispositions shall
constitute Net Cash Proceeds unless the aggregate fair market value of the
assets disposed of in connection with such Disposition or series of related
Dispositions exceeds $5,000,000; and

 

(b)                                 with respect to
any issuance of any Indebtedness, the aggregate cash proceeds received by the
Borrower or any Subsidiary (from a Person other than the Borrower or any
Subsidiary) pursuant to such transaction, net of (i) the direct costs
relating to such transaction (including sales and underwriter’s discounts and
commissions and legal, accounting and investment banking fees) and (ii) in
the case of any issuance by a Foreign Subsidiary, deductions in respect of
taxes 

 

21

 

that
are or would be payable upon repatriation of such proceeds to the United
States, after taking into account any available tax credits or deductions and
any tax sharing arrangements.

 

“Non-Surety
L/C’s” means letters of credit which are not Surety L/C’s.

 

“Note”
has the meaning specified in Section 2.02(b).

 

“Notice
of Borrowing” means a notice substantially in the form of Exhibit A.

 

“Notice
of Conversion/Continuation” means a notice substantially in the form of Exhibit B.

 

“Obligations”
means all advances, debts, liabilities, obligations, covenants and duties
arising under any Loan Document, Rate Swap Document or Cash Management
Agreement, in any case, owing by the Borrower to any Lender, any Affiliate of a
Lender that is a party to any such Rate Swap Document or Cash Management
Agreement, the Agent or any other Indemnitee, in each case, whether direct or
indirect (including those acquired by assignment), absolute or contingent, due
or to become due, or now existing or hereafter arising.

 

“Organization
Documents” means, for any corporation or other organization, as applicable,
the certificate or articles of incorporation or formation, the bylaws, limited
partnership agreement, limited liability company agreement, any certificate of
determination or instrument relating to the rights of preferred shareholders of
such corporation and any shareholder rights agreement or other similar
agreement.

 

“Other
Taxes” means any present or future stamp, court or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to, this Agreement or
any other Loan Documents.

 

“Outstanding Amount”
means (a) with respect to Term Loans, Revolving Loans and Swing Line Loans
on any date, the aggregate outstanding principal amount thereof after giving
effect to any borrowings and prepayments or repayments of Term Loans, Revolving
Loans and Swing Line Loans, as the case may be, occurring on or prior to such
date; and (b) with respect to any L/C Obligations on any date, the amount
of such L/C Obligations on such date after giving effect to any issuance,
amendment or renewal of any Letter of Credit occurring on or prior to such date
and any other changes in the aggregate amount of the L/C Obligations on or
prior to such date, including as a result of any reimbursements by the Borrower
of Unreimbursed Amounts.

 

“Outstanding
Securitization Amount” means, with respect to any Permitted Securitization,
the maximum amount advanced to a Securitization Subsidiary in respect of
accounts receivable or other financial assets and related assets transferred to
such Securitization Subsidiary by the Borrower or any Subsidiary.

 

“Participant”
has the meaning specified in Section 11.07(c).

 

“PBGC”
means the Pension Benefit Guaranty Corporation, or any Governmental Authority
succeeding to any of its principal functions under ERISA.

 

“PCAOB”
means the Public Company Accounting Oversight Board.

 

“Pension
Act” means the Pension Protection Act of 2006.

 

22

 

“Pension
Funding Rules” means the rules of the Code and ERISA regarding minimum
required contributions (including any installment payment thereof) to Pension
Plans and set forth in, with respect to plan years ending prior to the
effective date of the Pension Act, Section 412 of the Code and
Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter,
Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303,
304 and 305 of ERISA.

 

“Pension
Plan” means any employee pension benefit plan (including a Multiple
Employer Plan or a Multiemployer Plan) that is maintained or is contributed to
by the Borrower and any ERISA Affiliate, or with respect to which the Borrower
or any ERISA Affiliate has any liability and is either covered by Title IV of
ERISA or is subject to the minimum funding standards under Section 412 of
the Code.

 

“Percentage”
means a Revolving Percentage or a Term Percentage, as the context requires.

 

“Perfection Certificate” means a
certificate in the form attached to the Security Agreement, as the same shall
be supplemented from time to time by a Perfection Certificate Supplement or
otherwise.

 

“Perfection Certificate Supplement”
means a certificate supplement in the form attached to the Security Agreement.

 

“Permitted
Acquisition” means an Acquisition by the Borrower or any Subsidiary; provided
that (i) any Person acquired in a Permitted Acquisition shall be in a line
of business consistent with the requirements of Section 8.13; (ii) at
the time such Acquisition is consummated and upon giving effect thereto, either
(x) the Consolidated Leverage Ratio as of the last day of the most recent
fiscal quarter of the Borrower ended prior to such Acquisition is less than
3.75 to 1.0, giving pro forma effect to the applicable Acquisition (each a “Qualified
Acquisition”), or (y) the consideration paid in connection with all
such Acquisitions that are not Qualified Acquisitions (including all
transaction costs and all Indebtedness incurred or assumed in connection
therewith, but excluding the issuance of Equity Interests of the Borrower)
shall not exceed (A) after the Effective Date and through and including December 31,
2011, $80,000,000 in the aggregate, and (B) during each fiscal year
thereafter, $60,000,000 in the aggregate; provided, however,
that, in the case of each of the foregoing clause (A) and clause (B),
any excess of such amount over the amount expended may be carried over for
expenditure in the next following fiscal year (except that no more than
$40,000,000 may be carried over into the fiscal year ending December 31,
2012) and, if any such amount is so carried over, it will be deemed used in the
applicable subsequent fiscal year before the amount permitted based on the
amount determined without giving effect to this proviso; (iii) Available
Liquidity is at least $30,000,000; (iv) the Borrower shall be in
compliance with the covenants set forth in Sections 8.09 and 8.10,
as of the most recently completed period ending prior to such Acquisition for
which internal financial statements are available; and (v) at the time of
such Acquisition both before and upon giving effect thereto, no Default or
Event of Default shall have occurred and be continuing.

 

“Permitted
Additional Debt” means unsecured Indebtedness of the Borrower; provided
that (i) no Default or Event of Default has occurred and is continuing at
the time such Indebtedness is incurred, (ii) upon giving effect to the
incurrence of such Indebtedness and the application of proceeds therefrom, (x) the
Borrower would be in compliance with the financial covenants set forth in Section 8.09
and Section 8.10 and (y) the Borrower’s Consolidated Leverage
Ratio (excluding, for purposes of this calculation, up to $10,000,000 of Seller
Notes or Subordinated Indebtedness) as of the last day of the Borrower’s most
recent fiscal quarter for which internal financial statements are available would
be 0.25x less than the maximum permitted Consolidated Leverage Ratio applicable
on such date pursuant to Section 8.09, (iii) no portion of the
principal amount of such Indebtedness matures or is mandatorily repurchasable
or redeemable (other than following an event of default thereunder or on a
change of control or Disposition on terms not materially less favorable to the
Lenders than the corresponding provisions of the Indenture governing 

 

23

 

the
Senior Notes) by the Borrower or any of its Subsidiaries prior to the date that
is 91 days following the final maturity date of all Classes of Commitments and
Term Loans outstanding at the time such Indebtedness is incurred and (iv) of
which no Subsidiary of the Borrower other than a Guarantor is liable either
directly or through a Contingent Obligation in respect of such Indebtedness.

 

“Permitted
Amendments” has the meaning specified in Section 2.17(a).

 

“Permitted
Earn-Out Obligations” means obligations of the Borrower or any of its
Subsidiaries incurred in connection with a Permitted Acquisition which (i) are
not secured and are subordinated to the Obligations on terms customary for
senior subordinated high yield debt securities (as determined in good faith by
the Borrower) and (ii) are payable solely by the Borrower or such
Subsidiaries in the event that certain future performance goals are achieved in
the business acquired in such Permitted Acquisition; provided that the
aggregate amount of all Permitted Earn-Out Obligations outstanding at any time
shall not exceed $30,000,000.

 

“Permitted
Holder”:  Ares, unless Ares does not
have a representative on the Borrower’s board of directors as a result of (x) the
resignation by such representative without Ares nominating a replacement Ares
designee, (y) the failure of the Ares representative (or a replacement
nominee of Ares) to stand for election or (z) the failure of the Ares
designee to be elected to the Borrower’s board of directors if Ares failed to
vote in favor of such nominee.

 

“Permitted
Liens” has the meaning specified in Section 8.01.

 

“Permitted
Refinancing Indebtedness”: 
Indebtedness (including, with respect to any Guaranty Obligation, the
refinancing of the underlying indebtedness and the incurrence of a Guaranty
Obligation with respect to the new indebtedness) incurred in exchange for, or
the proceeds of which are used to redeem or refinance in whole or in part, any
Indebtedness of the Borrower or any of its Subsidiaries (the “Refinanced
Indebtedness”); to the extent that:

 

(a)                                  the principal
amount (and accreted value, in the case of Indebtedness issued at a discount)
of the Permitted Refinancing Indebtedness does not exceed the principal amount
(and accreted value, as the case may be) of the Refinanced Indebtedness plus
the amount of accrued and unpaid interest on the Refinanced Indebtedness, any
premiums and/or consent fees paid to the holders of the Refinanced Indebtedness
and expenses incurred in connection with the incurrence of the Permitted
Refinancing Indebtedness;

 

(b)                                 the Permitted
Refinancing Indebtedness does not include Indebtedness of a Person that is not
a Loan Party that refinances Refinanced Indebtedness of a Loan Party;

 

(c)                                  if the
Refinanced Indebtedness was Subordinated Indebtedness then such Permitted
Refinancing Indebtedness, by its terms, is subordinate in right of payment to
the Obligations under this Agreement;

 

(d)                                 the Permitted
Refinancing Indebtedness has a final stated maturity either (a) no earlier
than the Refinanced Indebtedness being repaid or (b) after the maturity
date of all outstanding Commitments and Term Loans at the time such Permitted
Refinancing Indebtedness is incurred;

 

(e)                                  the portion, if
any, of the Permitted Refinancing Indebtedness that is scheduled to mature on or
prior to the maturity date of all then outstanding Term Loans has a Weighted
Average Life to Maturity at the time such Permitted Refinancing Indebtedness is
incurred that is equal

 

24

 

to
or greater than the Weighted Average Life to Maturity of the portion of the
Refinanced Indebtedness being repaid that is scheduled to mature on or prior to
the maturity date of all then outstanding Term Loans; and

 

(f)                                    such Permitted
Refinancing Indebtedness is not secured by any Liens on any assets of the
Borrower or any of its Subsidiaries other than the type of assets (and proceeds
thereof) that secured the Refinanced Indebtedness.

 

“Permitted
Securitization” means any program providing for (a) the sale,
contribution and/or transfer to a Securitization Subsidiary, in one or more
related transactions, of accounts receivable or other financial assets
(including rights in respect of capitalized leases) and related rights and
assets of the Borrower or any of its Subsidiaries in transactions intended to
constitute (and opined by nationally-recognized outside legal counsel in
connection therewith to constitute) true sales or true contributions to such
Securitization Subsidiary and (b) the provision of financing to the
Securitization Subsidiary secured by the assets so sold, whether in the form of
secured loans or the acquisition of undivided interests in such assets.

 

“Permitted
Seller Notes” means promissory notes issued by the Borrower or any of its
Subsidiaries to sellers of stock or assets in one or more Permitted
Acquisitions, which promissory notes shall be (i) unsecured and
(ii) Subordinated Indebtedness, in an aggregate outstanding amount not to
exceed at the time of incurrence thereof the greater of (i) $10,000,000 or
(ii) 1.0% of consolidated total assets of the Borrower as shown on the
most recent quarterly or annual (as the case may be) consolidated balance sheet
of the Borrower, and Permitted Refinancing Indebtedness in respect thereof;

 

“Person”
means an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.

 

“Plan”
means any employee benefit plan within the meaning of Section 3(3) of
ERISA (including a Pension Plan), maintained for employees of the Borrower or
any ERISA Affiliate or any such plan to which the Borrower or any ERISA
Affiliate is required to contribute on behalf of any of its employees.

 

“Pro
Forma Basis”: as to any Person, for any events as described below that
occur subsequent to the commencement of a period for which the financial effect
of such events is being calculated, and giving effect to the events for which
such calculation is being made, such calculation as will give pro forma effect
to such events as if such events occurred on the first day of the four
consecutive fiscal quarter period ended on or before the occurrence of such
event (the “Reference Period”):  (i) in
making any determination of Consolidated EBITDA, effect shall be given to any
Material Disposition, Acquisition and Restricted Payment, in each case that
occurred during the Reference Period (or, except in the case of testing actual
compliance with Section 8.09 and Section 8.10,
occurring during the Reference Period or thereafter and through and including
the date upon which the relevant transaction is consummated), (ii) in
making any determination on a Pro Forma Basis, (x) all Indebtedness
(including Indebtedness issued, incurred or assumed as a result of, or to
finance, any relevant transactions and for which the financial effect is being
calculated, whether incurred under this Agreement or otherwise, but excluding
normal fluctuations in revolving Indebtedness, in each case not to finance any Acquisition)
issued, incurred, assumed or permanently repaid during the Reference Period
(or, except in the case of testing actual compliance with Section 8.09
and Section 8.10, occurring during the Reference Period or
thereafter and through and including the date upon which the relevant
transaction is consummated) shall be deemed to have been issued, incurred,
assumed or permanently repaid at the beginning of such period and (y) the
interest expense of such person attributable to interest on any Indebtedness,
for which pro forma effect is being given as provided in preceding clause (x),
bearing floating interest rates shall be 

 

25

 

computed
on a pro forma basis as if the rates that would have been in effect during the
period for which pro forma effect is being given had been actually in effect
during such periods.

 

Pro
forma calculations made pursuant to the definition of the term “Pro Forma Basis”
shall be determined in good faith by a Responsible Officer of the Borrower and
may include adjustments to give appropriate effect to cost savings and
synergies that are directly attributable to the relevant transaction, factually
supportable and expected to have a continuing impact on the financial results
of the Borrower and its Subsidiaries. 
The Borrower shall deliver to the Agent a certificate of a financial
officer of Borrower setting forth calculations of any such pro forma
adjustments supporting them in reasonable detail; provided that no
adjustments for synergies or cost savings shall be made with respect to such
relevant transaction after the end of the first four consecutive fiscal
quarters ended following such transaction.

 

“Proceeding”
has the meaning specified in Section 11.04(b).

 

“Proceeds
Application” has the meaning specified in Section 2.09(c).

 

“Projections”
has the meaning specified in Section 7.01(d).

 

“Qualifying
Bid” has the meaning specified in Schedule 2.19.

 

“Rate
Swap Documents” means, collectively, all Swap Contracts entered into
between (a) the Borrower or any Subsidiary and (b) any Lender (or any
Affiliate thereof).

 

“Recovery
Event”:  any cash settlement of or
cash payment in respect of any property or casualty insurance claim or any
condemnation proceeding, in each case received by the Borrower or any
Subsidiary, relating to any asset of the Borrower or any of its Subsidiaries, provided,
in each case, that such settlement or payment is in excess of $5,000,000.

 

“Refinancing” means the refinancing on the
Effective Date of certain outstanding Indebtedness of the Borrower and its
Subsidiaries as set forth on Schedule 7.11 and the termination of all
commitments with respect thereto.

 

“Related Documents” means the Merger Agreement and any alterations, amendments, changes,
supplements, consents or waivers thereof.

 

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

 

“Remarketing
Agreements” means agreements guaranteeing the residual or future resale
value of products sold or leased by the Borrower or any of its Subsidiaries.

 

“Reportable
Event” means any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.

 

“Repricing Transaction” means the
incurrence by any Loan Party of any Indebtedness (including any new or
additional term loans under this Agreement after the Effective Date) (i) having
or resulting in an effective weighted average yield (to be determined at the
reasonable discretion of the Agent consistent with generally accepted financial
practice, after giving effect to margins, upfront or similar fees or original
issue discount shared with all lenders or holders thereof, but excluding the
effect of any arrangement, 

 

26

 

structuring,
syndication or other fees payable in connection therewith that are not shared
with all lenders or holders thereof) as of the date of such incurrence that is,
or could be by the express terms of such Indebtedness (and not by virtue of any
fluctuation in the LIBOR Rate or Base Rate), less than the effective weighted
average yield of (to be determined at the reasonable discretion of the Agent,
on the same basis as above) the Term B Loans as of the date of such incurrence
and (ii) the proceeds of which are used to repay, in whole or in part,
principal of such outstanding Term B Loans; provided, however,
that if all of the Obligations are paid in connection with an Acquisition or
Change of Control that would not be permitted under this Agreement (before
giving effect to a termination hereof made in contemplation of such
transaction), such transaction shall not constitute a “Repricing Transaction”
hereunder.

 

“Required
Incremental Term Lenders” means at any time Incremental Term Lenders under
the applicable Incremental Term Facility having aggregate Incremental Term Percentages
under such Term Facility in excess of 50%.

 

“Required
Lenders” means at any time Lenders having aggregate Total Percentages in
excess of 50%.

 

“Required
Revolving Lenders” means at any time Revolving Lenders having aggregate
Revolving Percentages in excess of 50%.

 

“Required
Term B Lenders” means at any time Term B Lenders having aggregate Term B
Percentages in excess of 50%.

 

“Required
Term Lenders” means at any time Term Lenders having aggregate Term
Percentages in excess of 50%.

 

“Requirement
of Law” means, as to any Person, any law (statutory or common), treaty, rule or
regulation or determination of an arbitrator or of a Governmental Authority, in
each case applicable to or binding upon the Person or any of its property or to
which the Person or any of its property is subject.

 

“Responsible
Officer” means the chief executive officer, the president, the chief
financial officer, the treasurer or the chief accounting officer of the
Borrower or other person authorized by the Board of Directors of the Borrower
to execute any of the Loan Documents, and solely for purposes of the delivery
of incumbency certificates pursuant to Section 5.01, the secretary
or any assistant secretary of the Borrower, or any other officer having
substantially the same authority and responsibility, and, for purposes of Sections 7.03,
9.01(b) and 9.01(i), shall also include the general counsel
of the Borrower.

 

“Restricted
Payment” means any dividend or other distribution (whether in cash,
securities or other property) with respect to any Capital Stock of any Person
or any of its Subsidiaries, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, defeasance, acquisition, cancellation or
termination of any such Capital Stock, or on account of any return of capital
to any Person’s stockholders, partners or members (or the equivalent of any
thereof), or any option, warrant or other right to acquire any such Capital
Stock.

 

“Return
Bid” has the meaning specified in Schedule 2.19.

 

“Revolving
Commitment” means, for any Revolving Lender, the amount set forth on Schedule
2.01 under the heading “Revolving Commitment”, as such amount may be
reduced pursuant to Section 2.07, or reduced or increased as a
result of one or more assignments pursuant to Section 11.07.

 

27

 

“Revolving
Credit Facility” means, at any time, the aggregate amount of the Revolving
Lenders’ Revolving Credit Commitments at such time.

 

“Revolving
Lender” means, at any time, any Lender that has a Revolving Commitment
and/or outstanding Revolving Loans at such time.

 

“Revolving
Loan” has the meaning specified in Section 2.01(a).

 

“Revolving
Maturity Date” means the earlier to occur of (a) December 1, 2015
and (b) the date on which the Revolving Loans become due and payable
pursuant to Section 9.02.

 

“Revolving
Percentage” means, as to any Lender, the percentage which (a) the
Revolving Commitment of such Lender (or, after termination of the Revolving
Commitments, the principal amount of such Lender’s Revolving Loans plus such
Lender’s participation interests in the principal amount of all Swing Line
Loans and the Stated Amount of all Letters of Credit) is of (b) the Aggregate
Revolving Commitment (or, after termination of the Revolving Commitments, the
Total Revolving Usage); provided that the Revolving Percentage shall be
subject to adjustments as provided in Section 3.11.

 

“Revolving
Termination Date” means the earlier to occur of:

 

(a)                                  December 1,
2015; and

 

(b)                                 the date on
which the Revolving Commitments terminate (or are reduced to zero) in
accordance with the provisions of this Agreement.

 

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

 

“Sarbanes-Oxley”
means the Sarbanes-Oxley Act of 2002.

 

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

 

“Secured
Creditors” means and includes the Agent, the Lenders and each Person (other
than the Borrower or any of its Subsidiaries) which is a party to a Rate Swap
Document or Cash Management Agreement, in each case if such Person is or at the
time of entry into such Rate Swap Document or Cash Management Agreement, as
applicable, was a Lender or an Affiliate of a Lender.

 

“Securities
Laws” means the Securities Act of 1933, the Securities Exchange Act of
1934, Sarbanes-Oxley, and the applicable accounting and auditing principles,
rules, standards and practices promulgated, approved or incorporated by the SEC
or the PCAOB.

 

“Securitization
Obligations” means the aggregate investment or claim held at any time by
all purchasers, assignees or transferees of (or of interests in), or holders of
obligations that are supported or secured by, accounts receivable, lease
receivables and other rights to payment in connection with Permitted
Securitizations.

 

“Securitization
Subsidiary” means one or more special purpose, bankruptcy remote,
Wholly-Owned Subsidiaries of the Borrower which in each case is formed for the
sole and exclusive purpose of engaging in activities in connection with the
purchase, contribution, transfer, sale and financing of assets and related
rights in connection with and pursuant to a Permitted Securitization.

 

28

 

“Security
Agreement” means a guarantee and collateral agreement among the Borrower,
the Guarantors and the Agent substantially in the form of Exhibit F.

 

“Seller
Notes” means the Existing Seller Notes and the Permitted Seller Notes.

 

“Senior
Notes means the $200,000,000 original aggregate principal amount of 7 1/8%
Senior Notes due 2018 issued by the Borrower on November 2, 2010.

 

“Senior
Secured Leverage Ratio” means, as of any date of determination, the ratio
of (a) Consolidated Total Debt (but excluding for this purpose, any amount
of Indebtedness to the extent that it is unsecured and excluding any cash
proceeds from Incremental Term Loans) to (b) Consolidated EBITDA
for the most recently ended period of four fiscal quarters for which financial
statements are available.

 

“Solvent”
and “Solvency” mean,
with respect to any Person on any date of determination, that on such date
(a) the “present fair saleable value” of the property of such Person is
greater than the total amount of liabilities of such Person, contingent or
otherwise, of such Person, as such quoted terms are determined in accordance
with laws generally governing insolvency of debtors, (b) the present fair
salable value of the assets of such Person is not less than the amount that
will be required to pay the probable liability of such Person on its debts as
they become absolute and matured, (c) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person’s
ability to pay such debts and liabilities as they mature, (d) such Person
is not engaged in business or a transaction, and is not about to engage in
business or a transaction, for which such Person’s property would constitute an
unreasonably small capital, and (e) such Person is able to pay its debts
and liabilities, contingent obligations and other commitments as they mature in
the ordinary course of business.  The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

 

“Specified
Default” means (a) a Default under Section 9.01(a),
(b) a Default under Section 9.01(f) or (g), in
either case, with respect to the Borrower, or (c) any Event of Default.

 

“Specified
Indebtedness” means (i) any Subordinated Indebtedness (other than
Subordinated Indebtedness owing to the Borrower or a Subsidiary), (ii) the
Senior Notes, (iii) any Permitted Additional Debt and (iv) any
Permitted Refinancing Indebtedness in respect of the Senior Notes or Permitted
Additional Debt.

 

“Specified
Representations” means the representations and warranties set forth in Sections 6.01,
6.02, 6.03, 6.04, 6.05(a), 6.08, 6.11(a),
6.11(b), 6.13, 6.18 and 6.19.

 

“Standard
Securitization Undertakings” means representations, warranties, covenants,
repurchase obligations, indemnities and similar obligations entered into by the
Borrower or any of its Subsidiaries, which the Borrower has determined in good
faith to be customary, necessary or advisable in a Permitted Securitization.

 

“Stated
Amount” means, with respect to any Letter of Credit, the maximum amount
available to be drawn under such Letter of Credit during the remaining term
thereof under any and all circumstances.

 

“Subsidiary”
of a Person means any corporation, association, partnership, limited liability
company, joint venture or other business entity of which more than 50% of the
voting stock, membership interests or other equity interests is owned or
controlled directly or indirectly by such Person, or one or 

 

29

 

more
of the Subsidiaries of such Person, or a combination thereof.  Unless the context otherwise clearly
requires, references herein to a “Subsidiary” refer to a Subsidiary of the
Borrower.

 

“Subordinated
Indebtedness” means any Indebtedness of any Loan Party that is expressly
subordinated in terms of lien priority or payment priority to the Indebtedness
incurred under this Agreement.

 

“Supported
Letter of Credit” means a Letter of Credit for which the Borrower has
provided Backup Support in an amount equal to the sum of (a) the Stated
Amount of such Letter of Credit and (b) all fees that will be payable with
respect to such Letter of Credit assuming such Letter of Credit is drawn in
full on the scheduled expiration date therefor. 
Notwithstanding anything in this Agreement to the contrary, the
participation of any Revolving Lender in any Supported Letter of Credit shall
terminate on the Revolving Maturity Date and all Backup Support for each such
Letter of Credit shall be solely for the benefit of the Issuer.

 

“Surety
Bonds” means all bonds issued for the account of the Borrower or any of its
Subsidiaries to assure the performance thereby (or to the extent issued in the
ordinary course of business, any other Person) under any contract entered into
in the ordinary course of business.

 

“Surety
Instruments” means all letters of credit (including standby and
commercial), banker’s acceptances, bank guaranties, shipside bonds, Surety
Bonds, Remarketing Agreements and similar instruments.

 

“Surety
L/C’s” means letters of credit which are issued for the account of the Borrower
or any of its Subsidiaries to provide credit support, in the ordinary course of
business, for (a) a contract bid by such Person, (b) the performance
by such Person under any contract, (c) any warranty extended by such
Person, (d) the repayment of advance payments made to such Person and (e) self-insurance
or fully-fronted insurance with respect to the Borrower or any of its
Subsidiaries.

 

“Swap
Contract” means any agreement, whether or not in writing, relating to any
transaction that is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap or option, bond,
note or bill option, interest rate option, forward foreign exchange
transaction, cap, collar or floor transaction, currency swap, cross-currency
rate swap, swaption, currency option or any other, similar transaction
(including any option to enter into any of the foregoing) or any combination of
the foregoing, and, unless the context otherwise clearly requires, any master
agreement relating to or governing any or all of the foregoing.

 

“Swap
Termination Value” means, in respect of any one or more Swap Contracts,
after taking into account the effect of any legally enforceable netting
agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s) determined
in accordance therewith, such termination value(s); and (b) for any date
prior to the date referenced in subsection (a) the amount(s) determined
as the mark-to-market value(s) for such Swap Contracts, as determined by
the Borrower based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Swap Contracts (which may
include any Lender).

 

“Swing
Line Commitment” means at any time, the obligation of the Swing Line Lender
to make Swing Line Loans pursuant to Section 2.05.  The Swing Line Commitment is a part of the
Aggregate Revolving Commitment, rather than a separate, independent commitment.

 

“Swing
Line Lender” means Bank of America, in its capacity as provider of the
Swing Line Loans.

 

30

 

“Swing
Line Loan” has the meaning provided in Section 2.06(a).

 

“Swing Line Loan
Notice” means a notice of a borrowing of Swing Line Loans pursuant
to Section 2.06(b), which, if in writing, shall be substantially in
a form supplied by the Swing Line Lender.

 

“Swing
Line Rate” means, at any time, for any Swing Line Loan the Base Rate plus
the Applicable Rate.

 

“Swing Line
Sublimit” means an amount equal to the lesser of (a) $25,000,000
and (b) the Aggregate Revolving Commitment.  The Swing Line Sublimit is part of, and not
in addition to, the Aggregate Revolving Commitment.

 

“Syndication
Agent” means Jefferies Finance LLC, in its capacity as syndication agent
for the Lenders hereunder.

 

“Taxes”
means any and all present or future taxes, levies, assessments, imposts,
duties, deductions, fees, withholdings or similar charges, and all liabilities
with respect thereto, excluding, in the case of each Lender and the Agent,
respectively, taxes (including income taxes and franchise taxes) imposed on or
measured by its net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender or the Agent, as the case may be,
is organized or maintains a lending office.

 

“Term
B Commitment” means, as to any Term B Lender, such Term B Lender’s
obligation to fund a Term B Loan pursuant to Section 2.01(b).  The amount of the Term B Commitment of each
Term B Lender as of the Effective Date is set forth across from such Lender’s
name on Schedule 2.01 under the heading “Term B Commitment”.

 

“Term
B Facility” means, at any time, the aggregate principal amount of the Term
B Loans of all Term B Lenders outstanding at such time.

 

“Term
B Lender” means, at any time, any Lender that holds a Term B Commitment or
a Term B Loan at such time.

 

“Term
B Loans” has the meaning specified in Section 2.01(b).

 

“Term
B Maturity Date” means the earlier to occur of (a) December 1,
2016 and (b) the date on which the Term B Loans become due and payable
pursuant to Section 9.02.

 

“Term
B Percentage” means, as to any Term B Lender, the percentage which (a) the
Term B Commitment of such Lender (or, after the Effective Date, the principal
amount of such Lender’s Term B Loan) is of (b) the aggregate amount of
Term B Commitments (or, after the Effective Date, the aggregate principal
amount of all Term B Loans).

 

“Term
Commitment” means, as the context may require, either a Term B Commitment
or an Incremental Term Commitment.

 

“Term
Facility” means, at any time, the Term B Facility and each applicable
Incremental Term Facility.

 

“Term
Facility Increase Effective Date” has the meaning specified in Section 2.18(b).

 

31

 

“Term
Lender” means, at any time and as the context may require, a Term B Lender
and/or an Incremental Term Lender.

 

“Term
Loan” means, at any time and as the context may require, a Term B Loan
and/or an Incremental Term Loan.

 

“Term
Maturity Date” means, as the context may require, the Term B Maturity Date
and/or the applicable Incremental Term Maturity Date.

 

“Term
Percentage” means, as the context may require, the Term B Percentage and/or
the applicable Incremental Term Percentage.

 

“Threshold
Amount” means, at any time, $20,000,000.

 

“Total
Percentage” means, as to any Lender, the percentage which (a) the
Revolving Commitment of such Lender (or, after the termination of the Revolving
Commitments, the sum of the unpaid principal amount of the Revolving Loans of
such Lender plus the participations of such Lender in all Letters of
Credit and Swing Line Loans) plus the unpaid principal amount of the
Term Loans of such Lender is of (b) the sum of the Revolving Commitment
(or, after the termination of the Revolving Commitments, the Total Revolving
Usage) plus the unpaid principal amount of all Term Loans; provided that
if and so long as any Lender is a Defaulting Lender, such Lender’s Total
Percentage shall be deemed for purposes of this definition to be reduced to the
extent of the defaulted amount, and the Total Percentage of the applicable
Issuer or Swing Line Lender, as applicable, shall be deemed for purposes of
this definition to be increased to such extent.

 

“Total
Revolving Usage” means, at any time, the sum at such time of (a) the
principal amount of all outstanding Revolving Loans and Swing Line Loans plus
(b) the amount of all L/C Obligations.

 

“Transaction”
means, collectively, (a) the consummation of the Merger, (b) the
entering into by the Loan Parties and their applicable Subsidiaries of the Loan
Documents and the Related Documents to which they are or are intended to be a
party, (c) the Refinancing and (d) the payment of the fees and
expenses incurred in connection with the consummation of the foregoing.

 

“Type”
of Loan means the status of such Loan as a Base Rate Loan or an LIBOR Rate
Loan.

 

“UCC”
means the Uniform Commercial Code as in effect in the State of New York; provided that, if
perfection or the effect of perfection or non-perfection or the priority of any
security interest in any Collateral is governed by the Uniform Commercial Code
as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in
effect from time to time in such other jurisdiction for purposes of the
provisions hereof relating to such perfection, effect of perfection or
non-perfection or priority.

 

“Unfunded
Pension Liability” means, with respect to any Plan, the excess of such Plan’s
benefit liabilities under Section 4001(a)(16) of ERISA, over the current
value of such Plan’s assets, determined in accordance with the assumptions used
for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.

 

“United
States” and “U.S.” each means the United States of America.

 

“Unreimbursed
Amount” has the meaning specified in Section 3.03(b).

 

32

 

“Voting
Stock” of any Person as of any date means the Capital Stock of such Person
that is entitled to vote in the election of the board of directors (or other
governing body) of such Person.

 

“Weighted
Average Life to Maturity” means, when applied to any Indebtedness at any
date, the number of years obtained by dividing (1) the sum of the products
obtained by multiplying (a) the amount of each then remaining installment,
sinking fund, serial maturity or other required payment of principal, including
payment at final maturity, in respect thereof by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment by (2) the then outstanding principal amount of
such Indebtedness.

 

“Wholly-Owned
Subsidiary” means any corporation in which (other than directors’
qualifying shares required by law) 100% of the capital stock of each class
having ordinary voting power, and 100% of the capital stock of every other
class, in each case (or, in the case of Persons other than corporations,
membership interests or other equity interests), at the time as of which any
determination is being made, is owned, beneficially and of record, by the
Borrower, or by one or more of the other Wholly-Owned Subsidiaries, or both.

 

1.02                           Other Interpretive
Provisions.

 

(a)                                  The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.

 

(b)                                 Section, subsection,
clause, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

 

(c)                                  (i) The term “documents”
includes any and all instruments, documents, agreements, certificates,
indentures, notices and other writings, however evidenced.

 

(ii)                                                                                  The term “including”
is not limiting and means “including without limitation.”

 

(iii)                                                                               In the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including”; the words “to” and “until” each
mean “to but excluding,” and the word “through” means “to and including.”

 

(d)                                 Unless otherwise expressly
provided herein, (i) references to agreements (including this Agreement)
and other contractual instruments shall be deemed to include all subsequent
amendments and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.

 

(e)                                  The captions and headings of
this Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.

 

(f)                                    This Agreement and other
Loan Documents may use several different limitations, tests or measurements to
regulate the same or similar matters. 
All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.

 

(g)                                 This Agreement and the other
Loan Documents are the result of negotiations among and have been reviewed by
counsel to the Agent, the Borrower and the other parties, and are the products
of 

 

33

 

all parties. 
Accordingly, they shall not be construed against the Lenders or the
Agent merely because of the Agent’s or Lenders’ involvement in their
preparation.

 

1.03                           Accounting Principles.

 

(a)                                  Unless the context otherwise
clearly requires, all accounting terms not expressly defined herein shall be
construed, and all financial computations required under this Agreement shall
be made, in accordance with GAAP. 
Notwithstanding the foregoing, for purposes of determining compliance
with any covenant (other than any covenant requiring the delivery of financial
statements) contained herein, Indebtedness shall be deemed to be carried
at 100% of the outstanding principal amount thereof, and the effect of FASB ASC
825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

 

(b)                                 References herein to “fiscal
year” and “fiscal quarter” refer to such fiscal periods of the Borrower.

 

(c)                                  For purposes of calculations
made pursuant to the terms of this Agreement, GAAP will be deemed to treat
operating leases in a manner consistent with their current treatment under
generally accepted accounting principles as of September 30, 2010,
notwithstanding any modifications or interpretive changes thereto that may
occur thereafter.

 

(d)                                 If any change in GAAP occurs
after the date of this Agreement and such change results in a material
variation in the method of calculation of financial covenants or other terms of
this Agreement or in what Subsidiaries are consolidated for financial reporting
purposes, then the Borrower, the Agent and the Lenders agree to amend such
provisions of this Agreement so as to equitably reflect such change so that the
criteria for evaluating the Borrower’s financial condition will be the same
after such change as if such change had not occurred and until such amendments
are made such change in GAAP shall be disregarded for purposes of determining
compliance with this Agreement.

 

(e)                                  All calculations of the
Consolidated Interest Coverage Ratio, Consolidated Leverage Ratio and Senior
Secured Leverage Ratio shall be made on a Pro Forma Basis.

 

(f)                                    Prior to delivery of the
Borrower’s financial statements for the fiscal year ending December 31,
2010, any requirement to satisfy a minimum Consolidated Interest Coverage Ratio
or maximum Consolidated Leverage Ratio by reference to Section 8.09
or Section 8.10, shall refer to the applicable required ratio on December 31,
2010 based on the financial results of the Borrower through September 30,
2010 and determined on a Pro Forma Basis.

 

1.04                           Currency Equivalents
Generally.  For all
purposes of this Agreement (but not for purposes of the preparation of any
financial statements, any schedules pertaining to Foreign Subsidiaries or any compliance
certificates delivered pursuant hereto), the equivalent in any currency of an
amount in Dollars, and the equivalent in Dollars of an amount in any other
currency, shall be determined based on the applicable foreign exchange rate.

 

1.05                           Letter of Credit Amounts.  Unless otherwise specified herein, the amount
of a Letter of Credit at any time shall be deemed to be the Stated Amount of
such Letter of Credit in effect at such time; provided that with respect
to any Letter of Credit that, by its terms or the terms of any Issuer Document
related thereto, provides for one or more automatic increases in the Stated
Amount thereof, the amount of such Letter of Credit shall be deemed to be the
maximum Stated Amount of such Letter of Credit after giving effect to all such
increases, if such maximum Stated Amount is in effect at such time.

 

34

 

1.06                           Times of Day.  Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

 

ARTICLE II

 

THE CREDITS

 

2.01                           The Credits.

 

(a)                                  Each Revolving Lender
severally agrees, on the terms and conditions set forth herein, to make loans
to the Borrower (each such loan, a “Revolving Loan”) from time to time
on any Business Day during the period from the Effective Date to the Revolving
Termination Date in an aggregate amount not at any time exceeding such Lender’s
Revolving Commitment; provided that (a) the Total Revolving Usage
shall not at any time exceed the Aggregate Revolving Commitment; and (b) the
sum of (i) the principal amount of all outstanding Revolving Loans of any
Revolving Lender plus (ii) such Revolving Lender’s Revolving
Percentage of (x) all outstanding Swing Line Loans and (y) the amount
of all L/C Obligations shall not at any time exceed such Revolving Lender’s
Revolving Commitment.  Subject to the
foregoing and the other terms and conditions hereof, the Borrower may borrow
under this Section 2.01(a), prepay under Section 2.08
and reborrow under this Section 2.01(a).

 

(b)                                 Each Term B Lender will make
a term loan (each a “Term B Loan”) to the Borrower on the Effective Date
in the amount of such Lender’s Term B Commitment.  Amounts repaid with respect to Term B Loans
may not be reborrowed.

 

2.02                           Loan Accounts.

 

(a)                                  The Loans made by each
Lender and the Letters of Credit Issued by each Issuer shall be evidenced by
one or more accounts or records maintained by such Lender or Issuer, as the
case may be, in the ordinary course of business.  The accounts or records maintained by the
Agent, each Issuer and each Lender shall be conclusive absent manifest error of
the amount of the Loans made by the applicable Lenders to the Borrower and the
Letters of Credit, and the interest and payments thereon.  Any failure so to record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Loans or any
Letter of Credit.

 

(b)                                 The Borrower shall, at the
request of any Lender, issue to such Lender a single note (each a “Note”),
substantially in the form of Exhibit E, to evidence such Lender’s
Loans to the Borrower.  Each Lender may,
instead of or in addition to maintaining a loan account, endorse on the
schedule annexed to its Note the date, amount and maturity of each Loan made by
it and the amount of each payment of principal made by the Borrower with
respect thereto.  Each such Lender is
irrevocably authorized by the Borrower to endorse its Note and each Lender’s
record shall be conclusive absent manifest error; provided that the
failure of a Lender to make, or an error in making, a notation thereon with
respect to any Loan shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any such Note to such Lender.

 

2.03                           Procedure for Borrowing.

 

(a)                                  Each Borrowing shall be made
upon the Borrower’s irrevocable notice to the Agent, which may be given by
telephone.  Each such notice must be
received by the Agent prior to 11:00 a.m. (Eastern time) (i) three
Business Days prior to the requested Borrowing Date, in the case of LIBOR Rate
Loans, and (ii) on the requested Borrowing Date, in the case of Base Rate
Loans)  (provided, however, that if the Borrower wishes to request
LIBOR Rate Loans having an Interest Period other than one, two, 

 

35

 

three or six months in
duration as provided in the definition of “Interest Period,” the applicable
notice must be received by the Agent not later than 11:00 a.m. four
Business Days prior to the requested date of such Borrowing, whereupon the
Agent shall give prompt notice to the applicable Lenders of such request and
determine whether the requested Interest Period is acceptable to all of them
and not later than 11:00 a.m., three Business Days before the requested
date of such Borrowing, the Agent shall notify the Borrower (which notice may
be by telephone) whether or not the requested Interest Period has been
consented to by all the Lenders). Each telephonic notice by
the Borrower pursuant to this Section 2.03(a) must be
confirmed promptly by delivery to the Agent of a written Notice of Borrowing,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Notice of Borrowing shall specify:

 

(A)                              the amount of
such Borrowing, which shall (unless such Borrowing is being requested (or
deemed to be requested) pursuant to Section 2.06(b) or 3.03(b))
be an amount not less than $5,000,000 (in the case of a LIBOR Rate Loan) or a
whole multiple of $1,000,000 in excess thereof, or $500,000 (in the case of a
Base Rate Loan) or a whole multiple of $100,000 in excess thereof;

 

(B)                                the requested
Borrowing Date, which shall be a Business Day;

 

(C)                                the Class and
Type of Loans comprising such Borrowing (and if the Borrower fails to specify a
Type of Loan in a Notice of Borrowing, then the applicable Loans shall be made
as Base Rate Loans); and

 

(D)                               with respect to
LIBOR Rate Loans, the duration of the Interest Period applicable to such Loans
included in such notice (and, if a Notice of Borrowing fails to specify the
duration of the Interest Period for any Borrowing of LIBOR Rate Loans, such
Interest Period shall be one month).

 

(b)                                 The Agent will promptly
notify each applicable Lender of its receipt of any Notice of Borrowing and (i) in
respect of Borrowings of any Class of Term Loans, the amount of each
applicable Term Lender’s pro rata share of such Borrowing (based on its
Commitment for the applicable Class of Term Loans) and (ii) in
respect of Borrowings of Revolving Loans, the amount of such Lender’s Revolving
Percentage of such Borrowing.

 

(c)                                  Each Lender will make the
amount of its applicable share of each Borrowing available to the Agent for the
account of the Borrower at the Agent’s Payment Office by 1:00 p.m.
(Eastern time) on the Borrowing Date in funds immediately available to the
Agent.  The proceeds of all such Loans
will then be made available to the Borrower by the Agent at such office by
crediting the account of the Borrower on the books of Bank of America with the
aggregate of the amounts made available to the Agent by the Lenders.

 

(d)                                 After giving effect to any
Borrowing there may not be more than 10 different Interest Periods in effect.

 

(e)                                  The Borrower hereby
authorizes the Lenders and the Agent to accept Notices of Borrowing based on
telephonic notices made by any person or persons the Agent or any Lender in
good faith believes to be acting on behalf of the Borrower.  The Borrower agrees to deliver promptly to
the Agent a written confirmation of each telephonic notice, signed by a
Responsible Officer or an authorized designee. 
If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, the records of the Agent and the
Lenders shall govern absent manifest error.

 

36

 

2.04                           Conversion and Continuation
Elections.

 

(a)                                  The Borrower may, with
respect to Loans, upon irrevocable notice to the Agent in accordance with Section 2.04(b):

 

(i)                                     elect to
convert Loans from one Type to the other Type; provided that (x) any
partial conversion of Loans shall be in (A) an aggregate amount not less
than $5,000,000 and (B) an integral multiple of $1,000,000 and (y) any
conversion of LIBOR Rate Loans into Base Rate Loans may occur only on the last
day of the applicable Interest Period therefor; or

 

(ii)                                  elect as of the
last day of the applicable Interest Period, to continue any LIBOR Rate Loans
having Interest Periods expiring on such day (or any part thereof in an
aggregate amount that is not less than $5,000,000 (or such lesser amount agreed
to by the Agent));

 

provided that if at any
time the aggregate amount of LIBOR Rate Loans in respect of any Borrowing is
reduced, by payment, prepayment or conversion of part thereof to be less than
$5,000,000, such LIBOR Rate Loans shall be converted into Base Rate Loans on
the last day of the Interest Period therefor.

 

(b)                                 The Borrower shall deliver a
Notice of Conversion/Continuation to be received by the Agent not later than
11:00 a.m. (Eastern time) at least (i) three Business Days in advance
of the Conversion/Continuation Date, if the applicable Loans are to be converted
into or continued as LIBOR Rate Loans and (ii) on the
Conversion/Continuation Date, if the applicable Loans are to be converted into
Base Rate Loans, specifying:

 

(A)                              the proposed
Conversion/Continuation Date;

 

(B)                                the aggregate
amount of Loans to be converted or continued;

 

(C)                                the Type of
Loans resulting from the proposed conversion or continuation; and

 

(D)                               other than in
the case of conversions into Base Rate Loans, the duration of the requested
Interest Period.

 

(c)                                  If upon the expiration of any
Interest Period applicable to LIBOR Rate Loans, the Borrower has failed to
select timely a new Interest Period to be applicable to such LIBOR Rate Loans,
as the case may be, then the Borrower shall be deemed to have elected to
convert such Loans to Base Rate Loans.

 

(d)                                 The Agent will promptly
notify each applicable Lender of its receipt of a Notice of
Conversion/Continuation, or, if no timely notice is provided by the Borrower,
of the details of any automatic conversion to Base Rate Loans.  All conversions and continuations shall be
made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.

 

(e)                                  Unless the Required
Revolving Lenders or Required Term Lenders of the relevant Class of Term
Loans, as applicable, otherwise consent, during the existence of a Specified
Default, the Borrower may not elect to have a Revolving Loan or a Term Loan of
such Class converted into or continued as an LIBOR Rate Loan.

 

(f)                                    After giving effect to any
conversion or continuation of Loans, unless the Agent shall otherwise consent,
there may not be more than 10 different Interest Periods in effect.

 

37

 

(g)                                 The Borrower hereby
authorizes the Lenders and the Agent to accept Notices of
Conversion/Continuation based on telephonic notices made by any Person, the
Agent or any Lender in good faith believes to be acting on behalf of the
Borrower.  The Borrower agrees to deliver
promptly to the Agent a written confirmation of each telephonic notice, signed
by a Responsible Officer or an authorized designee.  If the written confirmation differs in any
material respect from the action taken by the Agent and the Lenders, the
records of the Agent and the Lenders shall govern absent manifest error.

 

2.05                           The Swing Line Loans.  Subject to the terms and conditions hereof,
the Swing Line Lender may in its sole discretion make Swing Line Loans to the
Borrower from time to time prior to the Revolving Termination Date in an
aggregate principal amount at any one time outstanding not to exceed
$25,000,000; provided that after giving effect to any such Swing Line
Loan, the Total Revolving Usage shall not exceed the Aggregate Revolving
Commitment.  Prior to the Revolving
Termination Date, the Borrower may use the Swing Line Commitment by borrowing,
prepaying the Swing Line Loans in whole or in part, and reborrowing, all in
accordance with the terms and conditions hereof.  All Swing Line Loans shall bear interest at
the Swing Line Rate and shall not be entitled to be converted into Loans that
bear interest at any other rate.

 

2.06                           Procedure for Swing Line
Loans.

 

(a)                                  The Swing Line.  Subject to the terms and conditions set forth
herein, the Swing Line Lender, in reliance upon the agreements of the other
Lenders set forth in this Section 2.06, may, in its sole
discretion, make loans (each such loan, a “Swing Line Loan”) to the Borrower
from time to time on any Business Day prior to the Revolving Termination Date
in an aggregate amount not to exceed at any time outstanding the amount of the
Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when
aggregated with the Applicable Revolving Credit Percentage of the Outstanding
Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing
Line Lender, may exceed the amount of such Lender’s Revolving Credit
Commitment; provided, however, that after giving effect to any
Swing Line Loan, (i) the Total Revolving Usage shall not exceed the
Aggregate Revolving Commitments at such time, and (ii) the aggregate
Outstanding Amount of the Revolving Loans of any Revolving Lender at such time,
plus such Revolving Lender’s Applicable Percentage of the Outstanding
Amount of all L/C Obligations at such time, plus such Revolving Lender’s
Applicable Percentage of the Outstanding Amount of all Swing Line Loans at such
time shall not exceed such Lender’s Revolving Commitment.  Within the foregoing limits, and subject to
the other terms and conditions hereof, the Borrower may borrow under this Section 2.06,
prepay under Section 2.08, and reborrow under this Section 2.06.  Each Swing Line Loan shall bear interest only
at the Swing Line Rate.  Immediately upon
the making of a Swing Line Loan, each Revolving Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Swing Line
Lender a risk participation in such Swing Line Loan in an amount equal to the
product of such Revolving Lender’s Applicable Percentage times the
amount of such Swing Line Loan.

 

(b)                                 Borrowing Procedures.  Each borrowing of Swing Line Loans shall be
made upon the Borrower’s irrevocable notice to the Swing Line Lender and the
Agent, which may be given by telephone. 
Each such notice must be received by the Swing Line Lender and the Agent
not later than 1:00 p.m. on the requested borrowing date, and shall
specify (i) the amount to be borrowed, which shall be a minimum of
$100,000, and (ii) the requested borrowing date, which shall be a Business
Day.  Each such telephonic notice must be
confirmed promptly by delivery to the Swing Line Lender and the Agent of a
written Swing Line Loan Notice, appropriately completed and signed by a
Responsible Officer of the Borrower. 
Promptly after receipt by the Swing Line Lender of any telephonic Swing
Line Loan Notice, the Swing Line Lender will confirm with the Agent (by
telephone or in 

 

38

 

writing) that the Agent has also received such Swing
Line Loan Notice and, if not, the Swing Line Lender will notify the Agent (by
telephone or in writing) of the contents thereof.  Unless the Swing Line Lender has received
notice (by telephone or in writing) from the Agent (including at the request of
any Revolving Lender) prior to 2:00 p.m. on the date of the proposed Swing
Line Loan (A) directing the Swing Line Lender not to make such Swing Line
Loan as a result of the limitations set forth in the proviso to the first
sentence of Section 2.06(a), or (B) that one or more of the
applicable conditions specified in Article V is not then satisfied,
then, subject to the terms and conditions hereof, the Swing Line Lender will,
not later than 3:00 p.m. on the borrowing date specified in such Swing
Line Loan Notice, make the amount of its Swing Line Loan available to the
Borrower.

 

(c)                                  Refinancing of Swing Line
Loans.  (i)  The Swing Line
Lender at any time in its sole and absolute discretion may request, on behalf
of the Borrower (which hereby irrevocably authorizes the Swing Line Lender to
so request on its behalf), that each Revolving Lender make a Base Rate Loan in
an amount equal to such Lender’s Applicable Percentage of the amount of Swing
Line Loans then outstanding.  Such
request shall be made in writing (which written request shall be deemed to be a
Notice of Borrowing for purposes hereof) and in accordance with the
requirements of Section 2.03, without regard to the minimum and
multiples specified therein for the principal amount of Base Rate Loans, but
subject to the unutilized portion of the Revolving Credit Facility and the
conditions set forth in Section 5.02.  The Swing Line Lender shall furnish the
Borrower with a copy of the applicable Borrowing Notice promptly after
delivering such notice to the Agent. 
Each Revolving Lender shall make an amount equal to its Applicable
Percentage of the amount specified in such Borrowing Notice available to the
Agent in immediately available funds (and the Agent may during a Specified
Default apply Cash Collateral available with respect to the applicable Swing Line
Loan) for the account of the Swing Line Lender at the Agent’s Payment Office
not later than 1:00 p.m. on the day specified in such Borrowing Notice,
whereupon, subject to Section 2.06(c)(2), each Revolving Lender
that so makes funds available shall be deemed to have made a Base Rate Loan to
the Borrower in such amount.  The Agent
shall remit the funds so received to the Swing Line Lender.

 

(ii)                                                                                  If for any
reason any Swing Line Loan cannot be refinanced by such a Borrowing of
Revolving Loans in accordance with Section 2.06(c)(1), the request
for Base Rate Loans submitted by the Swing Line Lender as set forth herein
shall be deemed to be a request by the Swing Line Lender that each of the
Revolving Lenders fund its risk participation in the relevant Swing Line Loan
and each Revolving Lender’s payment to the Agent for the account of the Swing
Line Lender pursuant to Section 2.06(c)(1) shall be deemed
payment in respect of such participation.

 

(iii)                                                                               If any
Revolving Lender fails to make available to the Agent for the account of the
Swing Line Lender any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.06(c) by the time
specified in Section 2.06(c)(1), the Swing Line Lender shall be
entitled to recover from such Lender (acting through the Agent), on demand,
such amount with interest thereon for the period from the date such payment is
required to the date on which such payment is immediately available to the
Swing Line Lender at a rate per annum equal to the greater of the Federal Funds
Rate and a rate determined by the Swing Line Lender in accordance with banking
industry rules on interbank compensation, plus any administrative,
processing or similar fees customarily charged by the Swing Line Lender in
connection with the foregoing.  If such
Lender pays such amount (with interest and fees as aforesaid), the amount so
paid shall constitute such Lender’s Revolving Loan included in the relevant
Borrowing or funded participation in the relevant Swing Line Loan, as the case
may be.  A certificate of the Swing Line
Lender submitted to any Lender (through the Agent) with respect to any amounts
owing under this clause (3) shall be conclusive absent
manifest error.

 

(iv)                                                                              Each Revolving
Lender’s obligation to make Revolving Loans or to purchase and fund risk
participations in Swing Line Loans pursuant to this Section 2.06(c) shall
be absolute and unconditional and shall not be affected by any circumstance,
including (A) any setoff, counterclaim, recoupment, 

 

39

 

defense or other right which such Lender may have
against the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default, or (C) any
other occurrence, event or condition, whether or not similar to any of the
foregoing; provided, however, that each Revolving Lender’s
obligation to make Revolving Loans pursuant to this Section 2.06(c) is
subject to the conditions set forth in Section 5.02.  No such funding of risk participations shall
relieve or otherwise impair the obligation of the Borrower to repay Swing Line
Loans, together with interest as provided herein.

 

(d)                                 Repayment of Participations.  (i)  At any time after any Revolving
Lender has purchased and funded a risk participation in a Swing Line Loan, if
the Swing Line Lender receives any payment on account of such Swing Line Loan,
the Swing Line Lender will distribute to such Revolving Lender its Applicable
Percentage thereof in the same funds as those received by the Swing Line
Lender.

 

(ii)                                                                                  If any payment received by the Swing Line
Lender in respect of principal or interest on any Swing Line
Loan is required to be returned by the Swing Line Lender under any of the
circumstances described in Section 11.05 (including pursuant to any
settlement entered into by the Swing Line Lender in its discretion), each
Revolving Lender shall pay to the Swing Line Lender its Applicable Percentage
thereof on demand of the Agent, plus interest thereon from the date of
such demand to the date such amount is returned, at a rate per annum equal to
the Federal Funds Rate.  The Agent will
make such demand upon the request of the Swing Line Lender.  The obligations of the Lenders under this
clause shall survive the payment in full of the Obligations and the termination
of this Agreement.

 

(e)                                  Interest for Account of
Swing Line Lender.  The Swing
Line Lender shall be responsible for invoicing the Borrower for interest on the
Swing Line Loans.  Until each Revolving
Lender funds its Base Rate Loan or risk participation pursuant to this Section 2.06
to refinance such Revolving Lender’s Applicable Percentage of any Swing Line
Loan, interest in respect of such Applicable Percentage shall be solely for the
account of the Swing Line Lender.

 

(f)                                    Payments Directly to Swing
Line Lender.  The
Borrower shall make all payments of principal and interest in respect of the
Swing Line Loans directly to the Swing Line Lender.

 

2.07                           Voluntary Termination or
Reduction of Revolving Commitments.

 

The
Borrower may, upon not less than three Business Days’ prior notice to the Agent
(which notice may be conditioned upon the consummation of replacement
financing), terminate the Revolving Commitments, or permanently reduce the
Aggregate Revolving Commitment by $2,000,000 or any higher integral multiple of
$1,000,000; provided that the Aggregate Revolving Commitment shall not
be reduced to an amount less than the Total Revolving Usage.  Once reduced in accordance with this Section 2.07,
the Aggregate Revolving Commitment may not be increased.  Any reduction of the Aggregate Revolving
Commitment shall be applied to reduce the Revolving Commitment of each
Revolving Lender according to its Applicable Percentage.

 

2.08                           Optional Prepayments.

 

(a)                                  Subject to Section 4.04,
the Borrower may, at any time or from time to time, upon not less than two
Business Days’ irrevocable notice to the Agent (which notice may be conditioned
upon the consummation of replacement financing), in respect of LIBOR Rate
Loans, and in respect of Base Rate Loans, by not later than 10:30 a.m.
(Eastern time) on the prepayment date, prepay Loans in whole or in part, in an
aggregate minimum amount that is not less than $2,000,000 (or such lesser
amount agreed to by the Agent).  Such
notice of prepayment shall specify the date and amount of such prepayment,
which Loans are to be prepaid and the Class(es) and Type(s) of such Loans
to be prepaid and, in the case of a 

 

40

 

prepayment of Term Loans, the installments to which
such prepayment shall be applied.  The
Agent will promptly notify each Lender of its receipt of any such notice, and
of such Lender’s Percentage of such prepayment, subject to Section 3.11,
if applicable.  If such notice is given
by the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified
therein, together, in the case of LIBOR Rate Loans, with accrued interest to
each such date on the amount prepaid and any amounts required pursuant to Section 4.04.

 

(b)                                 In the case of prepayments
pursuant to Section 2.08(a), if the Borrower makes any prepayment
of Term Loans in connection with any Repricing Transaction, the Borrower shall
pay to the Agent, for the ratable account of each of the applicable Term
Lenders, (i) if such prepayment and refinancing occurs prior to the first
anniversary of the Effective Date, a prepayment premium of 1% of the amount of
the Term Loans being prepaid or, (ii) in the case of any such prepayment
and refinancing thereafter, (ii) 0% of the amount of the Term Loans being
prepaid.

 

2.09                           Mandatory Prepayments of
Loans.

 

(a)                                  If the Agent notifies the
Borrower at any time that the Total Revolving Usage at such time exceeds the
Aggregate Revolving Commitment then in effect, then, within two Business Days
after receipt of such notice, the Borrower shall prepay Loans and/or the
Borrower shall Cash Collateralize (or provide other Backup Support for) the L/C
Obligations in an aggregate amount sufficient to reduce the Total Revolving
Usage as of such date of payment to an amount not to exceed 100% of the
Aggregate Revolving Commitment then in effect.

 

(b)                                 Within five Business Days
after financial statements have been delivered pursuant to Section 7.01(a) and
the related Compliance Certificate has been delivered pursuant to Section 7.02(b) for
any fiscal year of the Borrower, commencing with the fiscal year ending December 31,
2011, the Borrower shall make a prepayment of Term Loans in an amount equal to
the excess (if any) of (A) the Applicable ECF Percentage of Excess Cash
Flow for such fiscal year over (B) the aggregate principal amount
of Term Loans prepaid pursuant to Section 2.08(a) (such
prepayments to be applied as set forth in subsection (d) below).

 

(c)                                  If the Borrower or any
Subsidiary receives any Net Cash Proceeds from any of the following events, the
Borrower shall, for so long as any Term Loans are outstanding, apply such Net
Cash Proceeds at the following times and in the order of application set forth
in subsection (d) below (any such application, a “Proceeds
Application”):

 

(i)                                     Within five
Business Days following the receipt of any Net Cash Proceeds from any
Disposition (other than a Disposition of the type described in Section 8.02(a) through
8.02(i)) or Recovery Event (in each case excluding, for the avoidance of
doubt, amounts reinvested or to be reinvested as contemplated by the definition
of “Net Cash Proceeds”), the Borrower shall make a Proceeds Application in an
amount equal to the amount of such Net Cash Proceeds.

 

(ii)                                  Within five
Business Days following the receipt of any Net Cash Proceeds from (x) the
issuance of any Indebtedness (other than Indebtedness permitted by Section 8.05)
or (y) any increase in the Outstanding Securitization Amount above the
highest Outstanding Securitization Amount, if any, previously in effect, the
Borrower shall make a Proceeds Application in an amount equal to the amount of
such Net Cash Proceeds.

 

(d)                                 Except to the extent any
Incremental Term Joinder Agreement or Extension Amendment provides that the
Term Loans established thereby shall receive a lesser amount from any
prepayment pursuant to clause (b) or (c) above,
each prepayment pursuant to clause (b) or (c) above
shall be applied ratably 

 

41

 

to the Term Loan(s) of each Class in
proportion to the original principal amounts thereof, and shall be applied
ratably to the remaining installments thereof.

 

2.10                           Repayment.

 

(a)                                  The Borrower shall repay all
Revolving Loans and Swing Line Loans on the Revolving Maturity Date.

 

(b)                                 The Borrower shall repay to
the Agent for the ratable account of the Term B Lenders (i) on the last
Business Day of each March, June, September and December prior to the
Term B Maturity Date, commencing March 31, 2011, an aggregate amount equal
to 0.25% of the aggregate principal amount of all Term B Loans outstanding on
the Effective Date (which payments shall be reduced as a result of the
application of prepayments in accordance with the order of priority set forth
in Sections 2.08 and 2.09, as applicable) and (ii) on
the Term B Maturity Date, the aggregate principal amount of all Term B Loans
outstanding on such date.

 

2.11                           Interest.

 

(a)                                  Each Revolving Loan and each
Term B Loan shall bear interest on the outstanding principal amount thereof
from the applicable Borrowing Date at a rate per annum equal to (i) the
LIBOR Rate plus the Applicable Rate or (ii) the Base Rate plus
the Applicable Rate, as the case may be (and subject to the Borrower’s right to
convert Loans from one Type to the other).

 

(b)                                 Interest on each Revolving
Loan and Term B Loan shall be paid in arrears on each Interest Payment Date and
on (i) the Revolving Maturity Date, in the case of Revolving Loans or (ii) the
Term B Maturity Date, in the case of Term B Loans.  Interest on LIBOR Rate Loans shall also be
paid on the date of any prepayment thereof for the portion of the Loans so
prepaid.  During the existence of any
Event of Default, interest on all Loans shall be paid on demand of the Agent at
the request or with the consent of the Required Lenders.

 

(c)                                  Notwithstanding Section 2.11(a),
(i) while an Event of Default under Section 9.01(a) exists,
(ii) upon the request of the Required Lenders while any other Event of
Default exists or (iii) after acceleration, the Borrower shall pay
interest (after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all outstanding Loans, at a rate
per annum determined by adding 2% per annum to the applicable interest rate
otherwise then in effect for such Loans.

 

(d)                                 Anything herein to the
contrary notwithstanding, the obligations of the Borrower to any Lender
hereunder shall be subject to the limitation that payments of interest shall
not be required for any period for which interest is computed hereunder to the
extent (but only to the extent) that contracting for or receiving such payment
by such Lender would be contrary to the provisions of any law applicable to
such Lender limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Lender, and in such event the
Borrower shall pay such Lender interest at the highest rate permitted by
applicable law.

 

2.12                           Fees.  In addition to certain fees described in Section 3.08:

 

(a)                                  Agency Fees.  The Borrower shall pay the Agent such fees as
are required by the Fee Letter or as otherwise agreed to by the Borrower and
the Agent from time to time in connection herewith.  Such fees shall be fully earned when paid.

 

42

 

(b)                                 Commitment Fees.  The Borrower shall pay to the Agent for the
account of each Revolving Lender a commitment fee (a “Commitment Fee”)
on the average daily unused portion of such Revolving Lender’s Revolving
Commitment, computed on a quarterly basis in arrears on the last Business Day
of each calendar quarter based upon the daily utilization for that quarter as
calculated by the Agent, equal to the Applicable Rate.  For purposes of calculating utilization under
this subsection, the Revolving Commitments shall be deemed used to the extent
of the principal amount of Revolving Loans then outstanding (excluding any
outstanding Swing Line Loans), plus the amount of all L/C Obligations
then outstanding.  Commitment Fees shall
accrue from the Effective Date to the Revolving Termination Date and shall be
due and payable quarterly in arrears on the last Business Day of each calendar
quarter commencing on March 31, 2011 through the Revolving Termination Date,
with the final payment to be made on the Revolving Termination Date; provided
that, in connection with any reduction or termination of Revolving Commitments
under Section 2.07, the accrued Commitment Fee calculated for the
period ending on such date shall also be paid on the date of such reduction or
termination, with the following quarterly payment being calculated on the basis
of the period from such reduction or termination date to such quarterly payment
date.  The Commitment Fees provided in
this subsection shall accrue at all times after the above-mentioned
commencement date, including at any time during which one or more conditions in
Article V are not met.

 

(c)                                  Upfront Fees.  The Borrower agrees to pay on the Closing
Date to each Lender party to this Agreement on the Closing Date, as fee
compensation for the funding of such Lender’s Term Loan and making of such
Lender’s Revolving Commitment, a closing fee (the “Closing Fee”)
in an amount equal to (x) 1.50% of the stated principal amount of such Lender’s
Revolving Commitment on the Closing Date and (y) 0.50% of the stated
principal amount of such Lender’s Term Loan made on the Closing Date.  Such Closing Fee will be in all respects
fully earned, due and payable on the Closing Date and non-refundable and
non-creditable thereafter and, in the case of the Term Loans, such Closing Fee
shall be netted against Term Loans made by such Lender.

 

2.13                           Computation of Fees and
Interest.

 

(a)                                  Interest on any Loan bearing
interest based upon the Base Rate shall be computed for the actual number of
days elapsed on the basis of a year of 365 or 366 days, as applicable.  All other computations of fees and interest
shall be made on the basis of a 360-day year and actual days elapsed (which
results in more interest being paid than if computed on the basis of a 365-day
year).  Interest and fees shall accrue
during each period during which interest or such fees are computed from the
first day thereof to the last day thereof.

 

(b)                                 Each determination of an
interest rate by the Agent shall be conclusive and binding on the Borrower and
the applicable Lenders in the absence of demonstrable error.

 

2.14                           Payments by the Borrower.

 

(a)                                  All payments to be made by
the Borrower shall be made without set-off, recoupment or counterclaim.  Except as otherwise specified herein, all
payments by the Borrower shall be made to the Agent for the account of the
applicable Lenders at the Agent’s Payment Office no later than 11:00 a.m.
(Eastern time) on the date specified herein. 
All such payments shall be made in funds immediately available to the
Agent and in Dollars.  The Agent will
promptly distribute to each applicable Lender its applicable share of such
payment which, except as otherwise expressly provided herein, shall be based
upon such Lender’s Percentage of the Loans in respect of which such payment has
been made.  Any payment 

 

43

 

received by the Agent later than 1:00 p.m.
(Eastern time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue.

 

(b)                                 Subject to the provisions
set forth in the definition of “Interest Period” herein, whenever any payment
is due on a day other than a Business Day, such payment shall be made on the
following Business Day, and such extension of time shall in such case be
included in the computation of interest or fees, as the case may be.

 

(c)                                  Unless the Agent shall have
received notice from the Borrower prior to the time at which any payment is due
to the Agent for the account of the Lenders or the Issuer hereunder that the
Borrower will not make such payment, the Agent may assume that the Borrower has
made such payment on such date in accordance herewith and may, in reliance upon
such assumption, distribute to the applicable Lenders or the Issuer, as the
case may be, the amount due.  In such
event, if the Borrower has not in fact made such payment, then each of the
applicable Lenders or the Issuer, as the case may be, severally agrees to repay
to the Agent forthwith on demand the amount so distributed to such Lender or
the Issuer, in immediately available funds with interest thereon, for each day
from and including the date such amount is distributed to it to but excluding
the date of payment to the Agent, at the greater of the Federal Funds Rate and
a rate determined by the Agent in accordance with banking industry rules on
interbank compensation.

 

2.15                           Payments by the Lenders to
the Agent.

 

(a)                                  Unless the Agent receives
notice from a Lender on or prior to the Effective Date or, with respect to any
Borrowing of Revolving Loans after the Effective Date, at least one Business
Day prior to the date of such Borrowing, that such Lender will not make
available as and when required hereunder to the Agent for the account of the
Borrower the amount of that Lender’s Percentage of such Borrowing, the Agent
may assume that each Lender has made such amount available to the Agent in
immediately available funds on the Borrowing Date and the Agent may (but shall not
be so required), in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. 
If and to the extent any Lender shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Borrower such amount, that Lender shall
on the Business Day following such Borrowing Date make such amount available to
the Agent, together with interest at the Federal Funds Rate for each day during
such period.  A notice of the Agent
submitted to any Lender with respect to amounts owing under this subsection (a) shall
be conclusive, absent manifest error.  If
such amount is so made available, such payment to the Agent shall constitute
such Lender’s Loan on the date of Borrowing for all purposes of this
Agreement.  If such amount is not made
available to the Agent on the Business Day following the Borrowing Date, the
Agent will notify the Borrower of such failure to fund and, upon demand by the
Agent, the Borrower shall pay such amount to the Agent for the Agent’s account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the interest rate applicable at the
time to the Loans comprising such Borrowing.

 

(b)                                 The failure of any
applicable Lender to make any Loan on any Borrowing Date shall not relieve any
other applicable Lender of any obligation hereunder to make a Loan on such
Borrowing Date, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on any Borrowing Date.

 

2.16                           Sharing of Payments, Etc.  If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it
any payment (whether voluntary, involuntary, through the exercise of any right
of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Lender shall immediately (a) notify the
Agent of such fact and (b) purchase

 

44

 

from the other applicable Lenders such
participations in the Loans made by them as shall be necessary to cause such
purchasing Lender to share the excess payment pro rata with each of them; provided
that if all or any portion of such excess payment is thereafter recovered from
the purchasing Lender, such purchase shall to that extent be rescinded and each
other applicable Lender shall repay to the purchasing Lender the purchase price
paid therefor, together with an amount equal to such paying Lender’s ratable
share (according to the proportion of (i) the amount of such paying Lender’s
required repayment to (ii) the total amount so recovered from the purchasing
Lender) of any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered.  The Borrower agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to Section 11.09) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
The Agent will keep records (which shall be conclusive and binding in
the absence of manifest error) of participations purchased under this Section
and will in each case notify the applicable Lenders following any such
purchases or repayments.

 

2.17                           Amendments Effecting a
Maturity Extension.  In
addition, notwithstanding any other provision of this Agreement to the contrary:

 

(a)                                  The Borrower
may, by written notice to the Agent (who shall forward such notice to all
applicable Lenders), make an offer (each such offer, an “Extension Offer”)
on a pro rata basis to all the Lenders of any Class (including any tranche of
Incremental Term Loans) to make one or more amendments or modifications to
allow the maturity of the Loans and/or Commitments of the Extending Lenders (as
defined below) to be extended, and, in connection with such extension, to (i)
reduce, eliminate or otherwise modify the scheduled amortization of the
applicable Loans of the Extending Lenders, (ii) increase the Applicable Rates
and/or fees payable with respect to the applicable Loans and/or Commitments of
the Extending Lenders and the payment of additional fees or other consideration
to the Extending Lenders, and/or (iii) change such additional terms and
conditions of this Agreement solely as applicable to the Extending Lenders
(such additional changed terms and conditions (to the extent not otherwise approved
by the requisite Lenders under Section 11.01) to be effective only
during the period following the original maturity date prior to its extension
by such Extending Lenders) (collectively, “Permitted Amendments”)
pursuant to procedures reasonably acceptable to each of the Agent and the
Borrower.  Such notice shall set forth
(i) the terms and conditions of the requested Permitted Amendment and (ii) the
date on which such Permitted Amendment is requested to become effective (which
shall not be less than 3 Business Days after the date of such notice).  To the extent not otherwise approved by the
requisite Lenders under Section 11.01, Permitted Amendments shall
become effective only with respect to the Loans and/or Commitments of the
Lenders that accept the Extension Offer (such Lenders, the “Extending
Lenders”) and, in the case of any Extending Lender, only with respect to
such Lender’s Loans and/or Commitments as to which such Lender’s acceptance has
been made.  The Borrower, each other Loan
Party and each Extending Lender shall execute and deliver to the Agent an
extension amendment to this Agreement (an “Extension Amendment”) and
such other documentation as the Agent shall reasonably specify to evidence the
acceptance of the Permitted Amendments and the terms and conditions
thereof.  The Agent shall promptly notify
each Lender as to the effectiveness of the Extension Amendment.  Each of the parties hereto hereby agrees
that, upon the effectiveness of the Extension Amendment, this 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 Extending Lenders as to which
such Lenders’ acceptance has been made. 
The Borrower may effectuate no more than two Extension Amendments as to
each Class of Loans.

 

45

 

(b)                                 Any amendment
or waiver of any provision of this Agreement or any other Loan Document, or
consent to any departure by any Loan Party therefrom, made to effect any
Permitted Amendment that by its express terms amends or modifies the rights or
duties under this Agreement or such other Loan Document of one or more Classes
of Lenders (but not of one or more other Classes of Lenders) may be effected by
an agreement or agreements in writing signed by the Agent, the Borrower or the
applicable Loan Party, as the case may be, and the requisite percentage in
interest of each affected Class of Lenders that would be required to consent
thereto under Section 11.01 as if all such affected Classes of
Lenders were the only Lenders hereunder at the time.

 

(c)                                  This Section
shall supersede any provisions of this Agreement to the contrary, including Section 11.01,
it being understood, however, that nothing in this Section shall impair or
limit the effectiveness of any amendment effectuated in accordance with Section 11.01
(including, without limitation, any amendment effectuated simultaneously with
any Permitted Amendment).

 

2.18                           Increase in Term Facility.

 

(a)                                  Request for Increase.  Provided there exists no Default or Event of
Default, upon notice to the Agent (which shall promptly notify the Term
Lenders) and without requiring the consent of any of the Lenders other than as
specifically set forth in this Section, the Borrower may from time to time,
request an increase in the Term Loans, in the form of either (i) an increase in
the Term Commitments then in effect under this Agreement or (ii) the addition
of one or more term loan facilities pursuant to which the Borrower may borrow a
new tranche of term loans (“Incremental Term Loans”), by an aggregate
amount for all such requests not exceeding $150,000,000; provided that
any such request for an increase shall be in a minimum amount of $25,000,000
(or, if less, the amount representing all remaining availability under this
sentence) and whole multiples of $1,000,000 in excess thereof.  At the time of sending such notice, the
Borrower (in consultation with the Agent) shall specify the time period within
which each Term Lender is requested to respond (which shall in no event be less
than five Business Days from the date of delivery of such notice to the Term
Lenders).

 

(b)                                 Conditions, etc. to Increase.

 

(i)                                                                                     The Agent and
the Borrower shall determine the effective date (the “Term Facility Increase
Effective Date”), and the Borrower shall determine (with the approval of
the Agent (such approval not to be unreasonably withheld or delayed) in the
case of any new Lender) the final allocation of such increase, and the
amortization schedule for such Term Loans after giving effect to such
increase.  The Borrower shall determine,
together with the Term Lenders (including any new Term Lenders) participating
in such increase, the interest rate, upfront fees and original issue discount,
if any, for any increase under this Section, and this Agreement shall be
amended, as appropriate, to reflect such terms (without the consent of any
other Lender but with the consent of the Agent (such consent not to be
unreasonably withheld or delayed)).  The
Agent shall promptly notify the Borrower and the Term Lenders of the final
allocation of such increase and the Term Facility Increase Effective Date.  No existing Lender shall be obligated to
participate in any such increase and only shall be bound by a written
commitment with respect thereto.

 

(ii)                                                                                  The Borrower
may, at any time, upon prior written notice to the Agent, institute a new
tranche of Incremental Term Loans in accordance with clause (a); provided
that

 

(A)                              the Borrower
(in consultation and coordination with the Agent) shall obtain commitments for
the amount of the Incremental Term Loans from the Term Lenders or other
Eligible 

 

46

 

Assignees selected by the Borrower and
reasonably acceptable to the Agent, which Lenders (collectively, “Incremental
Term Lenders”) shall join in this Agreement as Incremental Term Lenders by
executing a joinder agreement reasonably acceptable to the Agent and the
Borrower (an “Incremental Term Joinder Agreement)”;

 

(B)                                no Default or
Event of Default shall exist and be continuing at the time of such Incremental
Term Loans;

 

(C)                                a Responsible
Officer of the Borrower shall deliver to the Agent a certificate demonstrating
that, upon giving effect to the borrowing of such Incremental Term Loans and
the use of proceeds therefrom,, the Borrower would be in compliance with the
covenants set forth in Sections 8.09 and 8.10, and the
Senior Secured Leverage Ratio is equal to or less than 2.75 to 1.00, as of the
most recent fiscal quarter for which the Borrower was required to deliver
financial statements pursuant to Section 7.01(a) or (b);

 

(D)                               the maturity
date for Incremental Term Loans shall be as set forth in the Incremental Term
Joinder Agreement, provided that such maturity date shall not be earlier
than the then latest scheduled Term Maturity Date;

 

(E)                                 the scheduled
principal amortization payments under the Incremental Term Loans shall be as
set forth in the Incremental Term Joinder Agreement; provided that the
Weighted Average Life to Maturity of the Incremental Term Loans shall not be
less than the Weighted Average Life to Maturity of any then outstanding Class
of Term Loans;

 

(F)                                 the interest
rates, fees (including upfront fees and/or original issue discount
arrangements) and other pricing terms applicable to the Incremental Term Loans
shall be determined by the Borrower and the lenders thereof; provided
that in the event that the interest rate margins applicable to any such Incremental
Term Loans are greater than the Applicable Rates for the Term B Facility by
more than 50 basis points, then the Applicable Rates for the Term B Facility
shall be increased to the extent necessary so that the interest rate margins
for such Incremental Term Loans are 50 basis points greater than the Applicable
Rates for the Term B Facility; provided, further, that, in
determining the applicable interest rate margins for such Incremental Term
Loans and the Term B Facility, (I) original issue discount (“OID”) or
upfront fees (which shall be deemed to constitute like amounts of OID) payable
by the Borrower to the Lenders under the Term B Facility or any Incremental
Term Loans in the initial primary syndication thereof shall be included (with
OID being equated to interest based on an assumed four-year life to maturity),
(II) customary arrangement or commitment fees payable to any of the Joint
Lead Arrangers (or their respective affiliates) in connection with the Term B
Facility or to one or more arrangers (or their Affiliates) of any Incremental
Term Loans shall be excluded, and (III) if such Incremental Term Loans include
an interest rate floor greater than the interest rate floor applicable to the
Term B Facility, such increased amount shall be equated to the applicable
interest rate margin for purposes of determining whether an increase to the
interest margins for the Term B Facility shall be required, to the extent an
increase in the interest rate floor for the Term B Facility would cause an
increase in the interest rate then in effect thereunder, and in such case the
interest rate floor (but not the interest margins for the Term B Facility)
applicable to the Term B Facility shall be increased by such amount;

 

(G)                                as a condition
precedent to such institution of any new tranche of Incremental Term Loans and
the effectiveness of the Incremental Term Joinder Agreement, the Borrower shall
deliver to the Agent a certificate of each Loan Party, dated as of the date of
such institution and effectiveness, signed by a Responsible Officer of such
Loan Party (I) certifying and attaching 

 

47

 

the resolutions adopted by such Loan Party
approving or consenting to the Incremental Term Loans, and (II) certifying
that, before and after giving effect to the Incremental Term Loans, (x) the
representations and warranties contained in Article VI are true and
correct in all material respects on and as of the date of the making of the
Incremental Term Loans, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they are true
and correct in all material respects as of such earlier date and (y) no Default
or Event of Default exists or would result from the making of such Incremental
Term Loans; and

 

(H)                               except as
otherwise specifically provided in clauses (D) through (G)
above, the terms of the Incremental Term Facility shall be substantially
identical to the terms applicable to the Term B Facility as reasonably
determined by the Agent.

 

The
foregoing shall not impair the effectiveness of any other amendment of this
Agreement, including any such amendment entered into simultaneously with the
institution of the new tranche of Incremental Term Loans, in accordance with Section 11.01.

 

(c)                                  Conflicting Provisions.  This Section shall supersede any provisions
in Section 2.16 or 11.01 to the contrary (subject to the
last sentence of clause (b) above).

 

2.19                           Term Loan Repurchases.

 

(a)                                  Notwithstanding anything to
the contrary contained in any Loan Document, the Borrower may conduct reverse
Dutch auctions from time to time in order to purchase Term Loans (each, an “Auction”)
(each such Auction to be managed exclusively by the Agent (if it consents to do
so in its sole discretion) or another investment bank(s) of recognized standing
selected by the Borrower following consultation with the Agent (in such
capacity, the “Auction Manager”)) in an aggregate amount not to exceed
$60,000,000, so long as the following conditions are satisfied:

 

(i)                                     each Auction
shall be conducted in accordance with the procedures, terms and conditions set
forth in this Section and Schedule 2.19;

 

(ii)                                  no Default or
Event of Default shall have occurred and be continuing on the date of the
delivery of each Auction Notice and at the time of purchase of any Term Loans
in connection with any Auction;

 

(iii)                               the minimum
principal amount (calculated on the face amount thereof) of Term Loans that the
Borrower offers to purchase in any such Auction shall be no less than $10,000,000
(unless another amount is agreed to by the Agent);

 

(iv)                              both
immediately before and after giving effect to any purchase of Term Loans
pursuant to this Section, (A) the Borrower shall be in compliance with the
covenants set forth in Sections 8.09 and 8.10 as of the last
day of the most recent fiscal quarter for which internal financial statements
are available, and (B) Available Liquidity would exceed the Aggregate Revolving
Commitment;

 

(v)                                 the aggregate
principal amount (calculated on the face amount thereof) of all Term Loans so
purchased by the Borrower shall automatically be cancelled and retired by the
Borrower on the settlement date of the relevant purchase (and may not be
resold);

 

(vi)                              no more than
one Auction may be ongoing at any one time;

 

48

 

(vii)                           the Borrower
shall represent and warrant that no Loan Party shall have any MNPI that both
(A) has not been previously disclosed in writing to the Agent and the
Lenders (other than because such Lender does not wish to receive such MNPI)
prior to such time and (B) could reasonably be expected to be material to
a Lender’s decision to participate in the Auction; and

 

(viii)                        at the time of
each purchase of Term Loans through an Auction, the Borrower shall have
delivered to the Auction Manager an officer’s certificate of a Responsible
Officer certifying as to compliance with the preceding clauses (i)
through (vii).

 

(b)                                 The Borrower must terminate
an Auction if it fails to satisfy one or more of the conditions set forth above
which are required to be met at the time which otherwise would have been the
time of purchase of Term Loans pursuant to the respective Auction.  If the Borrower commences any Auction (and
all relevant requirements set forth above which are required to be satisfied at
the time of the commencement of the respective Auction have in fact been
satisfied), and if at such time of commencement the Borrower reasonably
believes that all required conditions set forth above which are required to be
satisfied at the time of the purchase of Term Loans pursuant to such Auction
shall be satisfied, then the Borrower shall have no liability to any Term
Lender or any other Person for any termination of the respective Auction as a
result of its failure to satisfy one or more of the conditions set forth above
which are required to be met at the time which otherwise would have been the
time of purchase of Term Loans pursuant to the respective Auction, and any such
failure shall not result in any Default or Event of Default hereunder.  With respect to all purchases of Term Loans
made by the Borrower pursuant to this Section, (i) the Borrower shall pay on
the settlement date of each such purchase all accrued and unpaid interest
(except to the extent otherwise set forth in the relevant offer documents), if
any, on the purchased Term Loans up to the settlement date of such purchase and
(ii) such purchases (and the payments made by the Borrower and the cancellation
of the purchased Term Loans, in each case in connection therewith) shall not be
subject to the terms and conditions of Section 2.08 or 2.09.

 

(c)                                  The Agent and the Lenders
hereby consent to the Auctions and the other transactions contemplated by this
Section (provided that no Lender shall have any obligation to
participate in any such Auctions) and hereby waive the requirements of any
provision of any Loan Document that may otherwise prohibit any Auction or any
other transaction contemplated by this Section, including Sections 2.08,
2.09 and 2.16 (it being understood that purchases of Term Loans
by the Borrower shall not constitute Investments).  The Auction Manager acting in its capacity as
such hereunder shall be entitled to the benefits of the provisions of Article X
and Section 11.04  mutatis mutandis
as if each reference therein to the “Agent” were a reference to the Auction
Manager, and the Agent shall cooperate with the Auction Manager as reasonably
requested by the Auction Manager in order to enable it to perform its
responsibilities and duties in connection with each Auction.

 

ARTICLE III

 

THE LETTERS OF CREDIT

 

3.01                           The Letter of Credit
Subfacility.

 

(a)                                  On the terms and conditions
set forth herein (i) the Issuer agrees (and each Revolving Lender acknowledges
that such agreement is made in reliance upon the agreements of the Revolving
Lenders set forth in this Article III), (A) from time to time on any
Business Day, during the period from the Effective Date to the day which is
five days prior to the Revolving Termination Date, to Issue Letters of Credit for
the account of the Borrower (or jointly for the account of the Borrower and any
of its Subsidiaries) in an aggregate Outstanding 

 

49

 

Amount at any one time that, together with the
aggregate Outstanding Amount of all other outstanding Letters of Credit issued
pursuant hereto (including the Existing Letters of Credit), does not exceed the
L/C Commitment, and to amend or renew Letters of Credit previously issued by
it, in accordance with Sections 3.02(c) and 3.02(d), and (B)
to honor drafts under the Letters of Credit; and (ii) the Revolving Lenders
severally agree to participate in Letters of Credit (including the Existing
Letters of Credit); provided that no Issuer shall be obligated to Issue,
and no Revolving Lender shall be obligated to participate in, any Letter of
Credit if as of the date of Issuance of such Letter of Credit (the “Issuance
Date”) (1) the Outstanding Amount of all L/C Obligations, plus the
Outstanding Amount of all Revolving Loans and Swing Line Loans exceeds the
Aggregate Revolving Commitment or (2) the participation of any Revolving Lender
in the Outstanding Amount of all L/C Obligations plus the principal
amount of the Revolving Loans of such Revolving Lender and such Revolving
Lender’s Revolving Percentage of the Outstanding Amount of Swing Line Loans
exceeds such Lender’s Revolving Commitment. 
Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and, accordingly, the Borrower may, during the foregoing period,
obtain Letters of Credit to replace Letters of Credit which have expired or
which have been drawn upon and reimbursed. 
Each of the Existing Letters of Credit shall be deemed to be Letters of
Credit Issued hereunder on the Effective Date.

 

(b)                                 No Issuer shall issue any
Letter of Credit if:

 

(i)                                     subject to Section
3.02(d), the expiry date of the requested Letter of Credit would occur more
than twelve months after the date of issuance or last extension, unless the
Required Revolving Lenders have approved such expiry date; or

 

(ii)                                  the expiry date
of the requested Letter of Credit would occur after the Revolving Maturity
Date, unless (x) all the Revolving Lenders and the Issuer have approved such
expiry date or (y) such Letter of Credit is cash collateralized or becomes a
Supported Letter of Credit on terms and pursuant to arrangements satisfactory
to the Issuer.

 

(c)                                  No Issuer shall be under any
obligation to Issue any Letter of Credit if:

 

(i)                                     any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain such Issuer from Issuing such Letter of
Credit, or any Requirement of Law applicable to such Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such Issuer shall prohibit, or request that such Issuer
refrain from, the Issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuer with respect to such
Letter of Credit any restriction, reserve or capital requirement (for which
such Issuer is not otherwise compensated hereunder) not in effect on the
Effective Date, or shall impose upon such Issuer any unreimbursed loss, cost or
expense which was not applicable on the Effective Date and which such Issuer in
good faith deems material to it;

 

(ii)                                  such Issuer has
received written notice from any Revolving Lender, the Agent or the Borrower,
on or prior to the Business Day prior to the requested date of Issuance of such
Letter of Credit, that one or more of the applicable conditions contained in Article V
is not then satisfied;

 

(iii)                               any requested
Letter of Credit does not provide for drafts, or is not otherwise in form and
substance acceptable to such Issuer, or the Issuance of a Letter of Credit
shall violate any applicable policies of such Issuer;

 

(iv)                              such Letter of
Credit is to be denominated in a currency other than Dollars; or

 

50

 

(v)                                 any Revolving
Lender is at that time a Defaulting Lender, unless the Issuer has entered into
arrangements, including the delivery of Cash Collateral, with the Borrower or
such Revolving Lender to eliminate the Issuer’s actual or potential Fronting
Exposure (after giving effect to Section 3.11(a)(iv)) with respect
to the Defaulting Lender arising from either the Letter of Credit then proposed
to be issued or that Letter of Credit and all other L/C Obligations as to which
the Issuer has actual or potential Fronting Exposure, as it may elect in its
sole discretion.

 

(d)                                 Each Issuer shall act on
behalf of the Revolving Lenders with respect to any Letters of Credit Issued by
it and the documents associated therewith, and the Issuer shall have all of the
benefits and immunities (A) provided to the Agent in Article X with
respect to any acts taken or omissions suffered by the Issuer in connection
with Letters of Credit Issued by it or proposed to be Issued by it and Issuer
Documents pertaining to such Letters of Credit as fully as if the term “Agent”
as used in Article X included the Issuer with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the Issuer.

 

3.02                           Issuance, Amendment and
Renewal of Letters of Credit.

 

(a)                                  Each Letter of Credit shall
be Issued upon the irrevocable written request of the Borrower received by the
applicable Issuer (with a copy sent by such Issuer to the Agent) at least three
days (or such shorter time as such Issuer may agree in a particular instance in
its sole discretion) prior to the proposed date of Issuance.  Each such request for Issuance of a Letter of
Credit shall be by facsimile, confirmed immediately in an original writing (if
required by the applicable Issuer), in the form of an L/C Application (or such
other form as shall be acceptable to such Issuer), or shall be by online letter
of credit software acceptable to such Issuer, and shall specify in form and
detail satisfactory to such Issuer: (i) the proposed date of Issuance of such
Letter of Credit (which shall be a Business Day); (ii) the face amount of such
Letter of Credit; (iii) the expiry date of such Letter of Credit; (iv) the name
and address of the beneficiary thereof; (v) the documents to be presented by
the beneficiary of such Letter of Credit in case of any drawing thereunder;
(vi) the full text of any certificate to be presented by the beneficiary in
case of any drawing thereunder; and (vii) such other matters as such Issuer may
require.

 

(b)                                 At least two Business Days
prior to the Issuance of any Letter of Credit (or such shorter time as the
Agent may agree in a particular instance in its sole discretion), the
applicable Issuer will confirm with the Agent (by telephone or in writing) that
the Agent has received a copy of the L/C Application or L/C Amendment
Application and, if not, such Issuer will provide the Agent with a copy
thereof.  Unless the applicable Issuer
has received notice on or before the Business Day immediately preceding the
date such Issuer is to issue a requested Letter of Credit from the Agent (A)
directing such Issuer not to issue such Letter of Credit because such issuance
is not then permitted under Section 3.01(a) as a result of the
limitations set forth in clauses (1) and (2) thereof or Section
3.01(b)(ii); or (B) that one or more conditions specified in Article V
are not then satisfied; then, subject to the terms and conditions hereof, such
Issuer shall, on the requested date, issue a Letter of Credit for the account
of the Borrower in accordance with such Issuer’s usual and customary business
practices.

 

(c)                                  From time to time while a
Letter of Credit is outstanding and prior to the Revolving Termination Date,
the applicable Issuer will, upon the written request of the Borrower received
by such Issuer (with a copy sent by such Issuer to the Agent) at least three
days (or such shorter time as such Issuer may agree in a particular instance in
its sole discretion) prior to the proposed date of amendment, amend any Letter
of Credit issued by it.  Each such
request for amendment of a Letter of Credit shall be made by facsimile,
confirmed immediately in an original writing (if required by the applicable
Issuer), made in the form of an L/C Amendment Application or through on-line letter
of credit software acceptable to such Issuer, and shall specify in form and
detail satisfactory to such Issuer:  (i)
the Letter of Credit to be 

 

51

 

amended; (ii) the proposed date of amendment of such
Letter of Credit (which shall be a Business Day); (iii) the nature of the
proposed amendment; and (iv) such other matters as such Issuer may
require.  No Issuer shall be under any
obligation to amend any Letter of Credit if: 
(A) such amendment would extend the expiry date for, or increase the
amount of, such Letter of Credit and such Issuer would have no obligation at
such time to issue such Letter of Credit in its amended form under the terms of
this Agreement; or (B) the beneficiary of such Letter of Credit does not accept
such amendment (and no Issuer shall so amend any Letter of Credit if such
Issuer has received a notice of the type described in the second sentence of Section 3.02(b)).  The Agent will promptly notify the Revolving
Lenders of the receipt by it of any L/C Application or L/C Amendment
Application.

 

(d)                                 If the Borrower so requests
in any applicable L/C Application, the Issuer may, in its sole discretion,
agree to Issue a Letter of Credit that has automatic extension provisions
(each, an “Auto-Extension Letter of
Credit”); provided that any such Auto-Extension Letter of
Credit must permit the Issuer to prevent any such extension at least once in
each twelve-month period (commencing with the date of Issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the “Non-Extension Notice Date”)
in each such twelve-month period to be agreed upon at the time such Letter of
Credit is Issued.  Unless otherwise
directed by the Issuer, the Borrower shall not be required to make a specific
request to the Issuer for any such extension. 
Once an Auto-Extension Letter of Credit has been issued, the Revolving
Lenders shall be deemed to have authorized (but may not require) the Issuer to
permit the extension of such Letter of Credit at any time to an expiry date not
later than the Revolving Maturity Date; provided, however, that
the Issuer shall not permit any such extension if (A) the Issuer has determined
that it would not be permitted (and shall be under no obligation to permit such
extension if the Issuer has determined that it would have no obligation at such
time to issue such Letter of Credit in its revised form (as extended) under the
terms hereof) (by reason of the provisions of clause Section 3.01(b) or (c)
or otherwise), or (B) it has received notice (which may be by telephone or in
writing) on or before the day that is seven Business Days before the
Non-Extension Notice Date (1) from the Agent that the Required Revolving
Lenders have elected not to permit such extension or (2) from the Agent, any
Revolving Lender or the Borrower that one or more of the applicable conditions
specified in Section 5.02 is not then satisfied, and in each such case
directing the Issuer not to permit such extension.

 

(e)                                  This Agreement shall control
in the event of any conflict with any L/C-Related Document (other than any
Letter of Credit).

 

(f)                                    Each Issuer (other than any
Affiliate of the Agent) will also deliver to the Agent:

 

(i)                                     concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit; and

 

(ii)                                  no later than
the third Business Day following the last day of each month, a schedule of the
Letters of Credit issued by it, in form and substance reasonably satisfactory
to Agent, showing the date of issuance of each Letter of Credit, the account
party, the original face amount (if any), the expiration date, and the
reference number of any Letter of Credit outstanding at any time during such
month, and showing the aggregate amount (if any) payable by the Borrower to
such Issuer during such month.

 

3.03                           Risk Participations,
Drawings and Reimbursements.

 

(a)                                  Immediately upon the
Issuance of a Letter of Credit by an Issuer, each Revolving Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
such Issuer a participation in such Letter of Credit and each drawing
thereunder in an amount equal to the product of (i) 

 

52

 

the Revolving Percentage of such Revolving Lender,
times (ii) the maximum amount available to be drawn under such Letter of Credit
and the amount of such drawing, respectively. 
For purposes of Section 2.01, each Issuance of a Letter of
Credit shall be deemed to utilize the Revolving Commitment of each Revolving
Lender by an amount equal to the amount of such participation.

 

(b)                                 Upon receipt from the
beneficiary of any Letter of Credit of any notice of a drawing under such
Letter of Credit, the Issuer shall notify the Borrower and the Agent
thereof.  Not later than 1:00 p.m. on the
date of any payment by the Issuer under a Letter of Credit (each such date, an “Honor
Date”), the Borrower shall reimburse the Issuer in an amount equal to the
amount of such drawing; provided that, if the Borrower does not receive
notice prior to 10:00 a.m. on such Honor Date of such payment by the Issuer,
the Borrower shall reimburse the Issuer not later than 1:00 p.m. on the first
Business Day following the Business Day upon which the Borrower receives such
notice.  If the Borrower fails to so
reimburse the Issuer by such time, the Agent shall promptly notify each
Revolving Lender of the Honor Date, the amount of the unreimbursed drawing (the
“Unreimbursed Amount”), and the amount of such Lender’s Applicable
Percentage thereof.  In the event the
Borrower does not reimburse the Issuer for any drawing under any Letter of
Credit on the Honor Date such amount shall bear interest at the rate applicable
to Base Rate Loans until reimbursed and if the Borrower fails to reimburse the
Issuer at the time provided above, the Borrower shall be deemed to have
requested a Borrowing of Base Rate Loans to be disbursed at such time in an
amount equal to the Unreimbursed Amount, without regard to the minimum and
multiples specified in Section 2.03 for the principal amount of
Base Rate Loans, but subject to the amount of the unutilized portion of the
Aggregate Revolving Commitment and the conditions set forth in Section 5.02
(other than the delivery of a Notice of Borrowing).  Any notice given by the Issuer or the Agent
pursuant to this Section 3.03(b) may be given by telephone if immediately
confirmed in writing in accordance with Section 11.02; provided
that the lack of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.

 

(c)                                  Each Revolving Lender shall
upon any notice pursuant to Section 3.03(b) make available to the
Agent (and the Agent may during a Specified Default apply Cash Collateral
provided for this purpose) for the account of the relevant Issuer an amount in
immediately available funds equal to its Revolving Percentage of the amount of
the drawing, whereupon the participating Revolving Lenders shall (subject to Section 3.03(d))
each be deemed to have made a Revolving Loan consisting of a Base Rate Loan to
the Borrower in that amount.  If any
Revolving Lender so notified fails to make available to the Agent for the
account of the relevant Issuer the amount of such Revolving Lender’s Revolving
Percentage of the amount of the drawing by no later than 12:00 noon (Eastern
time) on the Honor Date, then, without limiting the other provisions of this
Agreement, interest shall accrue on such Revolving Lender’s obligation to make
such payment, from the Honor Date to the date such Revolving Lender makes such
payment, at a rate per annum equal to the Federal Funds Rate in effect from
time to time during such period.  The
Agent will promptly give notice of the occurrence of the Honor Date, but
failure of the Agent to give any such notice on the Honor Date or in sufficient
time to enable any Revolving Lender to effect such payment on such date shall
not relieve such Revolving Lender from its obligations under this Section 3.03.

 

(d)                                 With respect to any
unreimbursed drawing that is not converted into Revolving Loans consisting of
Base Rate Loans to the Borrower in whole or in part, because of the Borrower’s
failure to satisfy the conditions set forth in Section 5.02 or for
any other reason, the Borrower shall be deemed to have incurred from the
applicable Issuer an L/C Borrowing in the amount of such drawing, which L/C
Borrowing shall be due and payable on demand (together with interest) and shall
bear interest at a rate per annum equal to the Base Rate plus the Applicable
Rate plus 2.0% per annum, and each Revolving Lender’s payment to such
Issuer pursuant to Section 3.03(c) shall be deemed payment in
respect of its participation in such L/C Borrowing and shall constitute an L/C
Advance from such Revolving Lender in satisfaction of its participation
obligation under this Section 3.03.

 

53

 

(e)                                  Each Revolving Lender’s
obligation in accordance with this Agreement to make the Revolving Loans or L/C
Advances, as contemplated by this Section 3.03, as a result of a
drawing under a Letter of Credit, shall be absolute and unconditional and
without recourse to the applicable Issuer and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against such Issuer, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Default, an Event of Default or a Material Adverse Effect; or
(iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing; provided that each Revolving Lender’s
obligation to make Revolving Loans under this Section 3.03 is
subject to the conditions set forth in Section 5.02.

 

3.04                           Repayment of Participations.

 

(a)                                  Upon (and only upon) receipt
by the Agent for the account of the applicable Issuer of immediately available
funds from the Borrower (i) in reimbursement of any payment made by such Issuer
under the Letter of Credit with respect to which any Revolving Lender has paid
the Agent for the account of such Issuer for such Revolving Lender’s
participation in the Letter of Credit pursuant to Section 3.03 or
(ii) in payment of interest thereon, the Agent will promptly pay to each
Revolving Lender, for the account of such Issuer, the amount of such Revolving
Lender’s Revolving Percentage of such funds, and such Issuer shall receive the
amount of the Revolving Percentage of such funds of any Revolving Lender that
did not so pay the Agent for the account of such Issuer.

 

(b)                                 If the Agent or an Issuer is
required at any time to return to the Borrower, or to a trustee, receiver,
liquidator, custodian, or any official in any Insolvency Proceeding, any
portion of the payments made by the Borrower to the Agent for the account of
such Issuer pursuant to Section 3.04(a) in reimbursement of a
payment made under the applicable Letter of Credit or interest or fee thereon,
each Revolving Lender shall, on demand of the Agent, forthwith return to the
Agent or such Issuer the amount of its Revolving Percentage of any amounts so
returned by the Agent or such Issuer plus interest thereon from the date
such demand is made to the date such amounts are returned by such Revolving
Lender to the Agent or such Issuer, at a rate per annum equal to the Federal
Funds Rate in effect from time to time.

 

3.05                           Role of the Issuers.

 

(a)                                  Each Lender and the Borrower
agree that, in paying any drawing under a Letter of Credit, the applicable
Issuer shall not have any responsibility to obtain any document (other than any
sight draft and certificates expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document.

 

(b)                                 No Agent-Related Person nor
any of the respective correspondents, participants or assignees of the Issuers
shall be liable to any Lender for: (i) any action taken or omitted in
connection herewith at the request or with the approval of the Revolving
Lenders (including the Required Revolving Lenders or all Revolving Lenders, as
applicable); (ii) any action taken or omitted in the absence of gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any L/C-Related Document.

 

(c)                                  The Borrower hereby assumes
all risks of the acts or omissions of any beneficiary or transferee with
respect to its use of any Letter of Credit; provided that this
assumption is not intended to, and shall not, preclude the Borrower’s pursuing
such rights and remedies as it may have against the beneficiary or transferee
at law or under any other agreement.  No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of any Issuer, shall be liable or responsible for any of the matters
described in clauses (i) through (vi) of Section 3.06;
provided that anything in such clauses to the contrary notwithstanding,
the Borrower may have a claim against an Issuer, and an Issuer may be liable

 

54

 

to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by such Issuer’s
willful misconduct or gross negligence, such Issuer’s willful failure to pay
under any Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit or such other actions or omissions as may be agreed
between the Borrower and such Issuer (it being understood that any such claim
shall be solely against the applicable Issuer and shall not affect the Borrower’s
obligations hereunder to the other parties hereto).  In furtherance and not in limitation of the
foregoing: (i) any Issuer may accept documents that appear on their face to be
in order, without responsibility for further investigation, regardless of any
notice or information to the contrary; and (ii) no Issuer shall be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.

 

3.06                           Obligations Absolute.  The obligations of the Borrower under this
Agreement and any L/C-Related Document to reimburse the applicable Issuer for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under all
circumstances, including the following:

 

(i)                                     any lack of validity
or enforceability of this Agreement or any L/C-Related Document;

 

(ii)                                  any change in
the time, manner or place of payment of, or in any other term of, all or any of
the obligations of the Borrower in respect of any Letter of Credit or any other
amendment or waiver of or any consent to departure from all or any of the
L/C-Related Documents;

 

(iii)                               the existence
of any claim, set-off, defense or other right that the Borrower may have at any
time against any beneficiary or any transferee of any Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be acting),
such Issuer or any other Person, whether in connection with this Agreement, the
transactions contemplated hereby or by the L/C-Related Documents or any
unrelated transaction;

 

(iv)                              any draft,
demand, certificate or 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; or any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any Letter of Credit;

 

(v)                                 any payment by
such Issuer under any Letter of Credit against presentation of a draft or
certificate that does not strictly comply with the terms of any Letter of
Credit; or any payment made by such Issuer under any Letter of Credit to any
Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee
for the benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of any Letter of Credit,
including any arising in connection with any Insolvency Proceeding;

 

(vi)                              any exchange,
release or non-perfection of any collateral, or any release or amendment or
waiver of or consent to departure from any other guarantee, for all or any of
the obligations of the Borrower in respect of any Letter of Credit; or

 

55

 

(vii)                           any other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute a
defense available to, or a discharge of, the Borrower or a guarantor.

 

The
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will promptly notify the Issuer.

 

3.07                           Backup Support.  The Borrower will, not later than five
Business Days prior to the scheduled Revolving Termination Date (or, if
earlier, the date of termination or reduction to zero of the Aggregate
Revolving Commitment), cause each Letter of Credit to be a Supported Letter of
Credit.

 

3.08                           Letter of Credit Fees.

 

(a)                                  The Borrower shall pay to
the Agent for the account of each of the Revolving Lenders a letter of credit
fee with respect to the Letters of Credit (the “Letter of Credit Fee”)
equal to (i) for each performance standby Letter of Credit with respect to
nonfinancial contractual obligations equal to 50% of the Applicable Rate
applicable to Revolving Loans that are LIBOR Rate Loans times the daily
amount available to be drawn under such Letter of Credit, and (ii) for each
other Letter of Credit equal to the Applicable Rate applicable to Revolving
Loans that are LIBOR Rate Loans times the daily amount available to be
drawn under such Letter of Credit, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon Letters of Credit
outstanding for that quarter as calculated by the Agent; provided that
any Letter of Credit Fees otherwise payable for the account of a Defaulting
Lender with respect to any Letter of Credit as to which such Defaulting Lender
has not provided Cash Collateral satisfactory to the Issuer pursuant to this Article III
shall be payable, to the maximum extent permitted by applicable law, to the
other Revolving Lenders in accordance with the upward adjustments in their
respective Revolving Percentage allocable to such Letter of Credit pursuant to Section 3.11(a)(iv),
with the balance of such fee, if any, payable to the Issuer for its own
account; and provided, further, that while an Event of Default
under Section 9.01(a) exists or upon the request of the Required
Lenders while any other Event of Default exists, such Letter of Credit Fees
shall be increased by adding 2% per annum to the Applicable Rate applicable to
Revolving Loans then in effect for such Letters of Credit.  Such letter of credit fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
during which Letters of Credit are outstanding, commencing on the first such
quarterly date to occur after the Effective Date, through the Revolving Maturity
Date (or such later date upon which the outstanding Letters of Credit shall
expire), with the final payment to be made on the Revolving Maturity Date (or
such later expiration date).

 

(b)                                 The Borrower shall pay to
each Issuer, for its own account, a fronting fee with respect to each Letter of
Credit in the amount of 0.25% per annum of the daily amount available to be
drawn under such Letter of Credit, computed on a quarterly basis in arrears on
the last Business Day of each calendar quarter based upon Letters of Credit
outstanding for that quarter as calculated by the Agent.  Such fee shall be due and payable quarterly
in arrears on the last Business Day of each calendar quarter during which
Letters of Credit are outstanding, commencing on the first such quarterly date
to occur after the Effective Date, through the Revolving Maturity Date, with
the final payment to be made on the Revolving Maturity Date.

 

(c)                                  The Borrower shall pay to
each Issuer from time to time on demand the normal issuance, presentation, amendment
and other processing fees, and other standard costs and charges, of such Issuer
relating to letters of credit as from time to time in effect.

 

56

 

3.09                           Applicability of ISP98 and
UCP.  Unless otherwise expressly
agreed by the applicable Issuer and the Borrower when a Letter of Credit is
issued (including any such agreement applicable to an Existing Letter of
Credit), (a) the rules of the “International Standby Practices 1998” published
by the Institute of International Banking Law & Practice (or such later
version thereof as may be in effect at the time of issuance) (“ISP98”)
shall apply to each standby Letter of Credit, and (b) the rules of the Uniform
Customs and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce at the time of issuance (the “UCP”)
shall apply to each commercial Letter of Credit (it being understood that the
Borrower may request that any particular Letter of Credit be governed by either
ISP98 or the UCP, as selected by the Borrower).

 

3.10                           Cash Collateral.

 

(a)                                  Upon the request of the
Agent or the Issuer (i) if the Issuer has honored any full or partial drawing
request under any Letter of Credit and such drawing has resulted in an L/C
Borrowing, or (ii) if, as of the expiry date for any Letter of Credit, any L/C
Obligation with respect to such Letter of Credit for any reason remains
outstanding, the Borrower shall, in each case, immediately Cash Collateralize
(or, solely with respect to clause (ii), provide other Backup
Support) in the amount of the then outstanding amount of all L/C Obligations in
respect of such Letter of Credit.  At any
time that there shall exist a Defaulting Lender, promptly upon the request of
the Agent, the Issuer or the Swing Line Lender, the Borrower shall deliver to
the Agent Cash Collateral in an amount sufficient to cover all Fronting
Exposure (after giving effect to Section 3.11(a)(iv) and any Cash
Collateral provided by the Defaulting Lender).

 

(b)                                 All Cash Collateral shall be
maintained in blocked, interest bearing deposit accounts at the Agent.  The Borrower, and to the extent provided by
any Lender, such Lender, hereby grants to (and subjects to the control of) the Agent,
for the benefit of the Agent, the Issuer and the Lenders (including the Swing
Line Lender), and agrees to maintain, a first priority security interest
(subject to any Lien permitted pursuant to Section 8.01(c) or (j))
in all such cash, deposit accounts and all balances therein, and all other
property so provided as collateral pursuant hereto, and in all proceeds of the
foregoing, all as security for the obligations to which such Cash Collateral
may be applied pursuant to Section 3.10(c).  If at any time the Agent determines that Cash
Collateral is subject to any right or claim (subject to any Lien permitted
pursuant to Section 8.01(c) or (j)) of any Person other than
the Agent as herein provided, or that the total amount of such Cash Collateral
is less than the applicable Fronting Exposure and other obligations secured
thereby, the Borrower or the relevant Defaulting Lender will, promptly upon
demand by the Agent (which demand shall include a reasonably detailed
accounting of the amount so demanded), pay or provide to the Agent additional Cash
Collateral in an amount sufficient to eliminate such deficiency.

 

(c)                                  Notwithstanding anything to
the contrary contained in this Agreement, Cash Collateral provided under any of
this Article III or Section 2.06, 2.09 or 9.02
in respect of Letters of Credit or Swing Line Loans shall be held and applied
to the satisfaction of the specific L/C Obligations, Swing Line Loans,
obligations to fund participations therein (including, as to Cash Collateral
provided by a Defaulting Lender, any interest accrued on such obligation) and
other obligations for which the Cash Collateral was so provided, prior to any
other application of such property as may be provided for herein.

 

(d)                                 Cash Collateral (or the
appropriate portion thereof) provided to reduce Fronting Exposure or other
obligations shall be released promptly following (i) the elimination of the
applicable Fronting Exposure or other obligations giving rise thereto
(including by the termination of Defaulting Lender status of the applicable
Lender (or, as appropriate, its assignee following compliance with Section 11.07(a)(vii)))
or (ii) the Agent’s good faith determination that there exists excess Cash
Collateral; provided that (x) that Cash Collateral furnished by or on
behalf of a Loan Party shall not be released during the continuance of a
Default or Event of Default, and (y) the Person providing Cash Collateral and
the 

 

57

 

Issuer or the Swing Line Lender, as applicable, may
agree that Cash Collateral shall not be released but instead held to support
future anticipated Fronting Exposure or other obligations.

 

3.11                           Defaulting Lenders.

 

(a)                                  Notwithstanding anything to
the contrary contained in this Agreement, if any Lender becomes a Defaulting
Lender, then, until such time as that Lender is no longer a Defaulting Lender,
to the extent permitted by applicable law:

 

(i)                                     Such Defaulting
Lender’s right to approve or disapprove any amendment, waiver or consent with
respect to this Agreement shall be restricted as set forth in Section 11.01.

 

(ii)                                  Any payment of
principal, interest, fees or other amounts received by the Agent for the
account of such Defaulting Lender (whether voluntary or mandatory, at maturity,
pursuant to Article IX or otherwise, and including any amounts made
available to the Agent by such Defaulting Lender pursuant to Section 11.09),
shall be applied at such time or times as may be reasonably determined by the
Agent as follows (and, in any case, when due): first, to the payment of
any amounts owing by such Defaulting Lender to the Agent hereunder; second,
to the payment on a pro rata basis of any amounts owing by such Defaulting
Lender to any Issuer or Swing Line Lender hereunder; third, if so
determined by the Agent or requested by any Issuer or Swing Line Lender, to be
held as Cash Collateral for future funding obligations of such Defaulting
Lender of any participation in any Swing Line Loan or Letter of Credit; fourth,
as the Borrower may request (so long as no Specified Default exists), to the
funding of any Loan in respect of which such Defaulting Lender has failed to
fund its portion thereof as required by this Agreement, as determined by the
Agent; fifth, if so determined by the Agent and the Borrower, to be held
in a non-interest bearing deposit account and released in order to satisfy
obligations of such Defaulting Lender to fund Loans under this Agreement; sixth,
to the payment of any amounts owing to the Lenders or any Issuer or Swing Line
Lender as a result of any final and nonappealable judgment of a court of
competent jurisdiction obtained by any Lender, Issuer or Swing Line Lender
against such Defaulting Lender as a result of such Defaulting Lender’s breach
of its obligations under this Agreement; seventh, so long as no
Specified Default exists, to the payment of any amounts owing to the Borrower
as a result of any final and nonappealable judgment of a court of competent
jurisdiction obtained by the Borrower against such Defaulting Lender as a
result of such Defaulting Lender’s breach of its obligations under this
Agreement; and eighth, to such Defaulting Lender or as otherwise
directed by a court of competent jurisdiction; provided that if (x) such
payment is a payment of the principal amount of any Loans or L/C Borrowings in
respect of which such Defaulting Lender has not fully funded its appropriate
share and (y) such Loans or L/C Borrowings were made at a time when the
conditions set forth in Section 5.02 were satisfied or waived, such
payment shall be applied solely to pay the Loans of, and L/C Borrowings owed
to, all non-Defaulting Lenders on a pro rata basis prior to being applied to
the payment of any Loans of, or L/C Borrowings owed to, such Defaulting
Lender.  Any payments, prepayments or
other amounts paid or payable to a Defaulting Lender that are applied (or held)
to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant
to this Section 3.11(a)(ii) shall be deemed paid to and redirected
by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(iii)                               Such Defaulting
Lender (x) shall not be entitled to receive any commitment fee pursuant to Section 2.12(b)
for any period during which such Lender is a Defaulting Lender (and the
Borrower shall not be required to pay any such fee that otherwise would have been
required to have been paid to such Defaulting Lender) and (y) shall be limited
in its right to receive Letter of Credit Fees as provided in Section 3.08.

 

58

 

(iv)                              During any
period in which there is a Defaulting Lender, for purposes of computing the
amount of the obligation of each non-Defaulting Lender to acquire, refinance or
fund participations in Letters of Credit or Swing Line Loans pursuant to this Article III
and Section 2.06, the “Revolving Percentage” of each non-Defaulting
Lender shall be computed without giving effect to the Revolving Commitment of
such Defaulting Lender; provided that (x) each such reallocation shall
be given effect only if, at the date the applicable Lender becomes a Defaulting
Lender, no Default or Event of Default exists, and (y) the aggregate obligation
of each non-Defaulting Lender to acquire, refinance or fund participations in
Letters of Credit and Swing Line Loans shall not exceed the positive
difference, if any, of (1) the Revolving Commitment of such non-Defaulting
Lender minus (2) the aggregate outstanding amount of the Revolving Loans
of such Lender.

 

(b)                                 The Agent agrees to promptly
notify the Borrower upon any Lender’s becoming a Defaulting Lender (but the
Agent shall have no liability for any failure to give, or any delay in giving,
any such notice).  If the Borrower, the
Agent, the Issuers and the Swing Line Lenders agree in writing in their sole
discretion that a Defaulting Lender should no longer be deemed to be a
Defaulting Lender, the Agent will promptly so notify the parties hereto,
whereupon as of the effective date specified in such notice and subject to any
conditions set forth therein (which may include arrangements with respect to
any Cash Collateral), such Lender will, to the extent applicable, purchase that
portion of outstanding Loans of the other Lenders or take such other actions as
the Agent may determine to be necessary to cause the Revolving Loans and funded
and unfunded participations in Letters of Credit and Swing Line Loans to be
held on a pro rata basis by the Lenders in accordance with their Revolving
Percentages (without giving effect to Section 3.11(a)(iv) as to
such Lender), whereupon such Lender will cease to be a Defaulting Lender; provided
that no adjustments will be made retroactively with respect to fees accrued or
payments made by or on behalf of the Borrower while such Lender was a
Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder
from Defaulting Lender to Lender will constitute a waiver or release of any
claim of any party hereunder arising from such Lender’s having been a
Defaulting Lender.

 

ARTICLE IV

 

TAXES, YIELD PROTECTION AND
ILLEGALITY

 

4.01                           Taxes.

 

(a)                                  Any and all payments by the
Borrower to each Lender or the Agent under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or withholding
for, any Taxes.  In addition, the
Borrower shall pay all Other Taxes.

 

(b)                                 If the Borrower shall be
required by law to deduct or withhold any Taxes, Other Taxes or Further Taxes
from or in respect of any sum payable hereunder to any Lender or the Agent,
then:

 

(i)                                     the sum payable
shall be increased as necessary so that, after making all required deductions
and withholdings (including deductions and withholdings applicable to
additional sums payable under this Section), such Lender or the Agent, as the
case may be, receives and retains an amount equal to the sum it would have
received and retained had no such deductions or withholdings been made;

 

(ii)                                  the Borrower
shall make such deductions and withholdings;

 

59

 

(iii)                               the Borrower
shall pay the full amount deducted or withheld to the relevant taxing authority
or other authority in accordance with applicable law; and

 

(iv)                              the Borrower
shall also pay to each Lender or the Agent for the account of such Lender, at
the time interest is paid, Further Taxes in the amount that such Lender
specifies as necessary to preserve the after-tax yield such Lender would have
received if such Taxes, Other Taxes or Further Taxes had not been imposed.

 

(c)                                  The Borrower agrees to
indemnify and hold harmless each Lender and the Agent for the full amount of
(i) Taxes, (ii) Other Taxes, and (iii) Further Taxes in the amount that such
Lender or the Agent, respectively, specifies as necessary to preserve the
after-tax yield the Lender would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed, and any liability (including penalties
(except to the extent arising from the gross negligence or willful misconduct
of such Lender or the Agent, respectively), interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes,
Other Taxes or Further Taxes were correctly or legally asserted.  Payment under this indemnification shall be
made within 30 days after the date such Lender or the Agent makes written
demand therefor.

 

(d)                                 Within 30 days after the
date of any payment by the Borrower of Taxes, Other Taxes or Further Taxes, the
Borrower shall furnish to each applicable Lender or the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of payment
satisfactory to such Lender or the Agent.

 

(e)                                  If the Borrower is required
to pay any amount to any Lender or the Agent for the account of such Lender
pursuant to subsection (b) or (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the sole judgment of such Lender is not otherwise
disadvantageous to such Lender.

 

(f)                                    Each Lender shall, promptly
upon request by the Borrower, deliver to the Borrower copies of all completed
and executed forms reasonably deemed necessary by the Borrower in connection
with the payment of amounts demanded by such Lender pursuant to the foregoing subsection
(c).

 

(g)                                 FATCA.  In addition, each Lender, on or prior to the
date on which such Lender becomes a Lender hereunder and from time to time
thereafter either upon the request of the Agent or their respective agents or
upon expiration or obsolescence of any previously delivered documentation,
shall furnish the Agent with any documentation that is required under the Code
or applicable Treasury regulations to enable the Borrower or the Agent to
determine their duties and liabilities with respect to any Taxes they may be
required to withhold in respect of Section 1471 or 1472 of the Code; provided
that the furnishing of such documentation would not result in a material
adverse consequence to such Lender.  In the
event that either (i) the documentation required to be delivered pursuant to
the immediately preceding sentence fails to establish a complete exemption from
withholding of amounts under Section 1471 and 1472 or (ii) no such
required documentation is delivered, the Borrower shall not be obligated to pay
any additional amounts to any Lender pursuant to clause (b)(iv), or
to indemnify any Lender pursuant to clause (c), in respect of any
such withholding imposed under Sections 1471 or 1472.

 

4.02                           Illegality.

 

(a)                                  If any Lender determines
that the introduction after the date hereof of any Requirement of Law, or any
change after the date hereof in any Requirement of Law or in the interpretation
or administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental 

 

60

 

Authority has asserted that it is unlawful, for any
Lender or its applicable Lending Office to make, maintain or fund Loans whose
interest rate is determined by reference to the LIBOR Rate, or to determine or
charge interest rates based upon the LIBOR Rate, or any Governmental Authority
has imposed material restrictions on the authority of such Lender to purchase
or sell, or to take deposits of, Dollars in the interbank market, then, on
notice thereof by the Lender to the Borrower through the Agent, (i) any
obligation of that Lender to make or continue LIBOR Rate Loans or to convert
Base Rate Loans to LIBOR Rate Loans shall be suspended, and (ii) if such notice
asserts the illegality of such Lender making or maintaining Base Rate Loans the
interest rate on which is determined by reference to the LIBOR Rate component
of the Base Rate, the interest rate on which Base Rate Loans of such Lender
shall, if necessary to avoid such illegality, be determined by the Agent
without reference to the LIBOR Rate component of the Base Rate, in each case
until such Lender notifies the Agent and the Borrower that the circumstances
giving rise to such determination no longer exist, at which time such Lender
shall promptly notify the Agent and the Borrower, and such Lender’s obligation
to make LIBOR Rate Loans shall be reinstated.

 

(b)                                 If a Lender determines that
it is unlawful to maintain any LIBOR Rate Loan, the Borrower shall, upon the
receipt by the Borrower of notice of such fact and demand from such Lender
(with a copy to the Agent), (x) prepay in full such LIBOR Rate Loans of that
Lender then outstanding, together with interest accrued thereon and amounts
required under Section 4.04, either on the last day of the Interest
Period thereof, if the Lender may lawfully continue to maintain such LIBOR Rate
Loans to such day, or immediately, if the Lender may not lawfully continue to
maintain such LIBOR Rate Loan and (y) if such notice asserts the illegality of
such Lender determining or charging interest rates based upon the LIBOR Rate,
the Agent shall during the period of such suspension compute the Base Rate
applicable to such Lender without reference to the LIBOR Rate component thereof
until the Agent is advised in writing by such Lender that it is no longer
illegal for such Lender to determine or charge interest rates based upon the
LIBOR Rate, at which time such Lender shall promptly notify the Agent and the
Borrower, and the Agent shall return to computing interest rates based upon the
LIBOR Rate for such Lender.  If the
Borrower is required to so prepay any LIBOR Rate Loan, then concurrently with
such prepayment, the Borrower shall borrow from the affected Lender, in the
amount of such repayment, a Base Rate Loan (the interest rate on which Base
Rate Loans of such Lender shall, if necessary to avoid such illegality, be
determined by the Agent without reference to the LIBOR Rate component of the
Base Rate).

 

(c)                                  If the obligation of any
Lender to make or maintain LIBOR Rate Loans has been so terminated or
suspended, the Borrower may elect, by giving notice to the Lender through the
Agent that all Loans which would otherwise be made or maintained by the Lender
as LIBOR Rate Loans shall be instead made or maintained as Base Rate Loans.

 

(d)                                 Before giving any notice to
the Agent under this Section, the affected Lender shall designate a different
Lending Office with respect to its LIBOR Rate Loans if such designation will
avoid the need for giving such notice or making such demand and will not, in
the good faith judgment of such Lender, be illegal or otherwise disadvantageous
to such Lender.

 

4.03                           Increased Costs and
Reduction of Return.

 

(a)                                  If any Lender determines in
good faith that, due to either (i) the introduction of or any change (other
than any change by way of imposition of or increase in reserve requirements
included in the calculation of the LIBOR Rate) in or in the interpretation of
any law or regulation made after the Effective Date or (ii) the compliance by
that Lender with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to such Lender of agreeing to make or making, funding
or maintaining any Loans the interest on which is determined by reference to
the LIBOR Rate or participating in Letters of Credit, as applicable, or 

 

61

 

any reduction in the amount of any sum received or
receivable by such Lender hereunder, or, in the case of any Issuer, any
increase in the cost to such Issuer of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit or any reduction in
the amount of any sum received or receivable by such Issuer hereunder, then the
Borrower shall be liable for, and shall from time to time, within 10 days after
demand (with a copy of such demand to be sent to the Agent), pay to the Agent
for the account of such Lender, additional amounts as are sufficient to
compensate such Lender for such increased costs or reduction.

 

(b)                                 If any Lender shall have
determined that (i) the introduction of any Capital Adequacy Regulation made
after the Effective Date, (ii) any change in any Capital Adequacy Regulation
made after the Effective Date, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof made after the Effective Date, or (iv) compliance by such Lender (or
its Lending Office) or any corporation controlling such Lender with any Capital
Adequacy Regulation made after the Effective Date, affects or would affect the
amount of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender and (taking into consideration such Lender’s
or such corporation’s policies with respect to capital adequacy and such Lender’s
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, loans, letters of credit,
credits or obligations under this Agreement, then, within 10 days after demand
of such Lender to the Borrower through the Agent, the Borrower shall pay to
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such increase.

 

4.04                           Funding Losses.  The Borrower shall reimburse each Lender upon
demand and hold each Lender harmless from any loss or expense which such Lender
may sustain or incur as a consequence of:

 

(a)                                  the failure of
the Borrower to make on a timely basis any payment of principal of any LIBOR
Rate Loan;

 

(b)                                 the failure of
the Borrower to borrow, continue or convert a Loan after the Borrower has given
(or is deemed to have given) a Notice of Borrowing or a Notice of
Conversion/Continuation;

 

(c)                                  the failure of
the Borrower to make any prepayment in accordance with any notice delivered
under Section 2.08;

 

(d)                                 any
continuation, conversion, prepayment (including pursuant to Section 2.09)
or other payment of an LIBOR Rate Loan on a day that is not the last day of the
relevant Interest Period;

 

(e)                                  any assignment
of a LIBOR Rate Loan on a day other than the last day of the relevant Interest
Period as a result of a request by the Borrower pursuant to Section 4.07;
or

 

(f)                                    the automatic
conversion under Section 2.04 of any LIBOR Rate Loan to a Base Rate
Loan on a day that is not the last day of the relevant Interest Period;

 

including
any such loss or expense arising from the liquidation or reemployment of funds
obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.  For purposes of calculating amounts payable
by the Borrower to the Lenders under this Section and under Section 4.03(a),
each LIBOR Rate Loan made by a Lender (and each related reserve, special
deposit or similar requirement) shall be conclusively deemed to have been
funded at the LIBOR Rate used in determining the LIBOR Rate for such LIBOR Rate
Loan by a matching deposit or other borrowing 

 

62

 

in
the interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such LIBOR Rate Loan was in fact so funded.

 

4.05                           Inability to Determine Rates.  If the Agent determines that for any reason
that (a) deposits are not being offered to banks in the offshore interbank
eurodollar market for the applicable amount and Interest Period of such LIBOR
Rate Loan, (b) adequate and reasonable means do not exist for determining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR
Rate Loan or in connection with an existing or proposed Base Rate Loan, or (c)
the LIBOR Rate applicable pursuant to Section 2.11(a) for any
requested Interest Period with respect to a proposed LIBOR Rate Loan does not
adequately and fairly reflect the cost to the applicable Lenders of funding
such Loan, the Agent will promptly so notify the Borrower and each applicable
Lender.  Thereafter, (x) the obligation
of the Lenders to make or maintain LIBOR Rate Loans hereunder shall be suspended,
and (y) in the event of a determination described in the preceding sentence
with respect to the LIBOR Rate component of the Base Rate, the utilization of
the LIBOR Rate component in determining the Base Rate shall be suspended, in
each case until the Agent revokes such notice in writing, at which time neither
the obligation referred to in clause (x) nor the utilization
referred to in clause (y) shall be suspended.  Upon receipt of such notice, the Borrower may
revoke any Notice of Borrowing or Notice of Conversion/Continuation then submitted
by it.  If the Borrower does not revoke
such Notice, then the applicable Lenders shall make, convert or continue the
Loans, as proposed by the Borrower, in the amount specified in the applicable
notice submitted by the Borrower, but such Loans shall be made, converted or
continued as Base Rate Loans instead of LIBOR Rate Loans, as the case may be,
and such Loans shall be assumed by the Borrower.  The Agent shall, promptly following its
determination that the reason for any suspension under this Section no longer
exists, deliver a notice of revocation of such suspension to the Borrower and
each applicable Lender.

 

4.06                           Certificates of Lenders.  Any Lender claiming reimbursement or
compensation under this Article IV shall deliver to the Borrower
(with a copy to the Agent) contemporaneously with the demand for payment a
certificate setting forth in reasonable detail the basis for, and a calculation
of, the amount payable to such Lender hereunder and such certificate shall be
conclusive and binding on the Borrower in the absence of manifest error.

 

4.07                           Replacement of Lenders.  If any Lender requests compensation under Section 4.03,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section 4.02, if any Lender is a Defaulting Lender,
if any Lender cannot make or maintain LIBOR Rate Loans under Section 4.02,
if any Lender requests payment pursuant to Section 4.01 in an
amount materially higher than amounts requested by other Lenders generally or if any other circumstance exists hereunder
that gives the Borrower the right to replace a Lender as a party hereto,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 11.07), all of its interests, rights
and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:

 

(a)                                  the Borrower
shall have paid to the Agent the assignment fee specified in
Section 11.07(a);

 

(b)                                 such Lender
shall have received payment of an amount equal to 100% of the outstanding
principal of its Loans and L/C Advances and, other than in the case of a
Defaulting Lender, any premium thereon (assuming for this purpose that the
Loans of such Lender were being prepaid) from the assignee and any amounts
payable by the Borrower pursuant to Section 4.01, 4.02 or 4.03 from the
Borrower (it being understood that the Assignment and Assumption 

 

63

 

relating to such assignment shall provide that any
interest and fees that accrued prior to the effective date of the assignment
shall be for the account of the replaced Lender and such amounts that accrue on
and after the effective date of the assignment shall be for the account of the
replacement Lender);

 

(c)                                  in the case of
any such assignment resulting from a claim for compensation under Section 4.03
or payments required to be made pursuant to Section 4.01, such
assignment will result in a reduction in such compensation or payments
thereafter;

 

(d)                                 such assignment
does not conflict with applicable laws; and

 

(e)                                  if such
assignment is as a result of a failure of a Term B Lender to consent to a
reduction in the interest rate of its Term B Loans prior to the first
anniversary of the Closing Date, the Borrower shall have paid such Term B
Lender a fee equal to 1.0% of the principal amount of its Term B Loans.

 

Each
Lender agrees that, if the Borrower elects to replace such Lender in accordance
with this Section 4.07, it shall promptly execute and deliver to
the Agent an Assignment and Assumption to evidence the assignment and shall
deliver to the Agent any Note (if Notes have been issued in respect of such
Lender’s Loans) subject to such Assignment and Assumption; provided that
the failure of any such Lender to execute an Assignment and Assumption shall
not render such assignment invalid and such assignment shall be recorded in the
Register.

 

4.08                           Survival.  The agreements and obligations of the
Borrower in this Article IV shall survive the payment of all other
Obligations, and the Borrower will not have an obligation to pay any amount
hereunder unless a demand is made within 180 days after the date upon which the
Agent’s or applicable Lender’s right to reimbursement arises.

 

ARTICLE V

 

CONDITIONS PRECEDENT

 

5.01                           Conditions to Effectiveness
and Initial Credit Extension.  This Agreement shall not become effective,
and no Lender or Issuer shall be required to make the initial Credit Extension
hereunder, unless and until the Agent shall have received all of the following,
in form and substance satisfactory to the Agent, and in the case of documents,
in the number of originals requested by the Agent (except that only one
original of each requested Note shall be signed):

 

(a)                                  This Agreement
executed by each party thereto.

 

(b)                                 The Security
Agreement duly executed by the Borrower and each Guarantor (as amended, the “Security Agreement”),
together with:

 

(i)                                     UCC-1 Financing Statements in form appropriate for filing under the UCC
of all jurisdictions in which any Loan Party is organized in form satisfactory
to the Agent;

 

(ii)                                  copies of UCC
tax and judgment lien searches, or equivalent reports in such jurisdictions as
the Agent may reasonably request; and

 

64

 

(iii)                               a Perfection
Certificate (as defined in the Security Agreement), duly executed by each of
the Loan Parties.

 

(c)                                  a Patent
Security Agreement and Trademark Security Agreement (as each such term is
defined in the Security Agreement and to the extent applicable), duly executed
by each applicable Loan Party in appropriate form for filing with the United
States Patent & Trademark Office, as applicable (each, an “Intellectual
Property Security Agreement”).

 

(d)                                 [Reserved].

 

(e)                                  Such certificates of resolutions or other action, incumbency certificates
and/or other certificates of Responsible Officers of each Loan Party as the
Agent may reasonably request evidencing the identity, authority and capacity of
each Responsible Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents to which such Loan
Party is a party or is to be a party.

 

(f)                                    Such documents
and certifications as the Agent may reasonably request to evidence that each
Loan Party is duly organized or formed, and validly existing, in good standing
(or similar status) in its jurisdiction of organization.

 

(g)                                 A favorable
opinion of Foley & Lardner LLP, counsel to the Loan Parties, addressed to
the Agent and the Lenders, as to the matters set forth in Exhibit G.

 

(h)                                 A certificate
signed by a Responsible Officer of the Borrower certifying (A) that the
conditions specified in Sections 5.02(b) and (c) have been
satisfied  and (B) that (i) the Company (as defined in the Merger
Agreement) has not become subject to any action or event which resulted in or
may likely result in a “Company Material Adverse Effect” (as defined in the
Merger Agreement) and (ii) other than changes or effects prior to October
18, 2010 in connection with specific events (and not general economic or
industry conditions) applicable specifically to the Borrower and/or its
Subsidiaries as disclosed in the Borrower’s SEC filings (form 10-K, 10-Q and
8-K) prior to October 18, 2010 (but, for the avoidance of doubt, not excluding
any changes or effects subsequent to such disclosure or the subsequent
worsening of any condition beyond what was described in such SEC filings),
there has been no change, occurrence or development since the date of the
Audited Financial Statements of the Borrower and its Subsidiaries (other than
the Acquired Business and its Subsidiaries), that either individually or in the
aggregate, could reasonably be expected to have a “Material Adverse Effect”
(both before and after giving effect to the Transaction) on the Borrower and
its Subsidiaries (other than the Acquired Business and its Subsidiaries), taken
as a whole.

 

(i)                                     A certificate
attesting to the Solvency of the Loan Parties, taken as a whole, before and
after giving effect to the Transaction, from its Chief Financial Officer,
substantially in the form of Exhibit H.

 

(j)                                     Evidence
reasonably satisfactory to the Agent that all insurance required to be
maintained pursuant to the Loan Documents has been obtained and is in effect,
together with the certificates of insurance, naming the Agent, on behalf of the
Secured Creditors, as an additional insured or loss payee, as the case may be,
under all insurance policies (including any flood insurance policies)
maintained with respect to the assets and properties of the Loan Parties that
constitutes Collateral.

 

65

 

(k)                                  Evidence
reasonably satisfactory to the Agent that the Existing Credit Agreement has
been, or concurrently with the Effective Date is being, terminated (subject to
the survival of any provisions thereof that expressly survive such termination)
and all Liens securing obligations under the Existing Credit Agreement have
been, or concurrently with the Effective Date are being, released.

 

(l)                                     Evidence reasonably
satisfactory to the Agent that the Merger shall be consummated pursuant to the
Merger Agreement substantially concurrently with the funding of the Term B
Loans on the Effective Date without any waiver or amendment thereof that is
materially adverse to the Lenders without the written consent of the Required
Lenders.

 

Without
limiting the generality of the provisions of Section 10.04, for
purposes of determining compliance with the conditions specified in this Section 5.01,
each Lender that has signed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender unless the Agent shall have received notice from
such Lender prior to the proposed Effective Date specifying its objection
thereto.  The Agent shall promptly notify
the Borrower and the Lenders of the occurrence of the Effective Date, which
notice shall be conclusive and binding.

 

5.02                           Conditions to All Credit
Extensions.  The
obligation of each Lender to make any Loan to be made by it and the obligation
of any Issuer to Issue any Letter of Credit is subject to the satisfaction of
the following conditions precedent on the relevant Borrowing Date or Issuance
Date:

 

(a)                                  Notice,
Application.  The Agent
shall have received a Notice of Borrowing or in the case of any Issuance of any
Letter of Credit, the applicable Issuer and the Agent shall have received an
L/C Application or L/C Amendment Application, as required under Section 3.02;

 

(b)                                 Continuation of
Representations and Warranties.  The representations and warranties in Article VI
shall be true and correct in all material respects on and as of such Borrowing
Date or Issuance Date with the same effect as if made on and as of such
Borrowing Date or Issuance Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall be true
and correct as of such earlier date); provided, however, that
with respect to such representations and warranties to be made on the Effective
Date and solely as they relate to the Acquired Business and its Subsidiaries
(and not to the Borrower or any of its other Subsidiaries), only the Merger
Agreement Representations and the Specified Representations shall be required
to be true and correct in all material respects as of the Effective Date; and

 

(c)                                  No Existing
Default.  No Default or Event of Default
shall exist or shall result from such Borrowing or Issuance (in each case
excluding a Default or Event of Default resulting from the breach of a
representation or warranty relating to the Acquired Business or any of its
Subsidiaries that is not a condition to the Credit Extensions made on the
Effective Date pursuant to the proviso to clause (b) above).

 

Each
Notice of Borrowing submitted by the Borrower hereunder and each L/C
Application or L/C Amendment Application submitted by the Borrower hereunder
shall constitute a representation and warranty by the Borrower hereunder, as of
the date of each such notice and as of each Borrowing Date or Issuance Date, as
applicable, that the conditions in this Section 5.02 are satisfied.

 

66

 

ARTICLE VI

 

REPRESENTATIONS AND WARRANTIES

 

The
Borrower represents and warrants to the Agent and each Lender as follows:

 

6.01                           Corporate Existence and
Power.  The Borrower and each of its
Subsidiaries:

 

(a)                                  is a
corporation or other entity duly organized, validly existing and, to the extent
applicable to such entity, in good standing under the laws of the jurisdiction
of its incorporation or organization;

 

(b)                                 has the power
and authority and all governmental licenses, authorizations, consents and
approvals to (i) own or lease its assets and to carry on its business and (ii)
in the case of each Loan Party, to execute, deliver, and perform its
obligations under the Loan Documents and Related Documents to which it is a
party and consummate the Transaction;

 

(c)                                  is duly
qualified as a foreign entity in each state in the United States and is
licensed and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification or license; and

 

(d)                                 is in compliance
with all Requirements of Law;

 

except,
in each case referred to in subsection (a) (except as it relates to the
Borrower), (b)(i), (c) or (d), to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.

 

6.02                           Corporate Authorization; No
Contravention.  The
execution, delivery and performance by each Loan Party of each Loan Document to
which such Person is party have been duly authorized by all necessary corporate
or other action, and do not and will not:

 

(a)                                  contravene the
terms of any of such Person’s Organization Documents;

 

(b)                                 conflict with
or result in any breach or contravention of, or the creation of any Lien under,
any document evidencing any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or

 

(c)                                  violate any
Requirement of Law.

 

6.03                           Governmental and Third-Party
Authorization.  No
approval, consent, exemption, authorization, or other action by, or notice to,
or filing with, any Governmental Authority or any other Person (except those
that have been obtained and remain in effect and disclosure filings that are
required to be made with the SEC in connection with the Transaction) is
necessary or required to be made or obtained by any Loan Party in connection
with the execution, delivery or performance by, or enforcement against, any
Loan Party of this Agreement or any other Loan Document or Related Document, or
for the consummation of the Transaction.

 

6.04                           Binding Effect.  This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. 
This Agreement constitutes, and each other Loan Document when so
delivered will constitute, a legal, valid and binding obligation of such Loan
Party, enforceable against each Loan Party that is party thereto 

 

67

 

in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors’ rights generally or by equitable
principles relating to enforceability.

 

6.05                           Litigation.  There are no actions, suits or proceedings
pending or, to the best knowledge of any Loan Party, threatened in writing, at
law, in equity, in arbitration or before any Governmental Authority, against
the Borrower, or any of its Subsidiaries or any of their respective properties:

 

(a)                                  which pertain
to this Agreement, any other Loan Document or any of the transactions
contemplated hereby; or

 

(b)                                 as to which,
individually or in the aggregate, there exists a substantial likelihood of an
adverse determination, which determination could reasonably be expected to have
a Material Adverse Effect.

 

6.06                           No Default.  Neither the Borrower nor any of its
Subsidiaries is in default under or with respect to any Contractual Obligation
which, individually or together with all such defaults, could reasonably be
expected to have a Material Adverse Effect.

 

6.07                           ERISA Compliance.  Except as specifically disclosed in Schedule
6.07:

 

(a)                                  Each Plan is in
compliance with the applicable provisions of ERISA, the Code and other federal
or state law, except where the failure to be in compliance could not reasonably
be expected to have a Material Adverse Effect. 
Each Pension Plan which is intended to be a qualified plan under
Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service to the effect that the form of such Pension
Plan is qualified under Section 401(a) of the Code and the trust related
thereto has been determined by the Internal Revenue Service to be exempt from
federal income tax under Section 501(a) of the Code, except to the extent
that the failure to receive such letter could not reasonably be expected to
have a Material Adverse Effect, and, to the best knowledge of the Borrower,
nothing has occurred that would cause the loss of such tax-qualified status,
except to the extent that such loss would not reasonably be expected to have a
Material Adverse Effect.

 

(b)                                 There are no
pending or, to the best knowledge of Borrower, threatened (in writing) claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.  There has been
no prohibited transaction or violation of the fiduciary responsibility rules
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect.

 

(c)                                  Except to the
extent that the following could not reasonably be expected to have a Material
Adverse Effect, (i) no ERISA Event has occurred, and neither the Borrower nor
any ERISA Affiliate is aware of any fact, event or circumstance that could
reasonably be expected to constitute or result in an ERISA Event with respect
to any Pension Plan; (ii) the Borrower and each ERISA Affiliate has met all
applicable requirements under the Pension Funding Rules in respect of each
Pension Plan, and no waiver of the minimum funding standards under the Pension
Funding Rules has been applied for or obtained; (iii) neither the Borrower nor
any ERISA Affiliate has incurred any liability to the PBGC other than for the
payment of premiums, and there are no premium payments which have become due
that are unpaid; (iv) neither the Borrower nor any ERISA Affiliate has engaged
in a transaction that could reasonably be expected to subject to Section 4069
or Section 4212(c) of ERISA; and (v) no Pension Plan has been terminated
by the plan 

 

68

 

administrator thereof nor by the PBGC, and no event
or circumstance has occurred or exists that could reasonably be expected to
cause the PBGC to institute proceedings under Title IV of ERISA to terminate
any Pension Plan.

 

(d)                                 Neither the
Borrower nor any ERISA Affiliate maintains or contributes to, or has any
material unsatisfied obligation to contribute to, or material liability under,
any active or terminated Pension Plan other than (i) on the Effective Date,
those listed on Schedule 6.07 hereto, and (ii) thereafter, any Pension
Plan with respect to which the Borrower provides notice to Agent pursuant to Section 7.03(d)(ii)
hereto.

 

6.08                           Use of Proceeds; Margin
Regulations.  The
proceeds of the Loans are to be used solely for the purposes set forth in and
permitted by Section 7.11. 
Neither the Borrower nor any other Loan Party is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock and no proceeds from any
extension of credit under this Agreement shall be used, directly or indirectly,
for purposes of purchasing or carrying Margin Stock in violation of Regulations
T, U or X of the FRB.

 

6.09                           Ownership of Property;
Liens; Investments.  Each Loan
Party has good record and marketable title in fee simple to, or valid leasehold
or other valid contractual interests in, all real property necessary or used in
the ordinary conduct of its business, except for such defects in title or
interest as could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.

 

6.10                           Taxes.  Except as disclosed on Schedule 6.10,
the Borrower and its Subsidiaries have filed all Federal and other material tax
returns and reports required to be filed, and have paid all Federal and other
material taxes shown on such returns and reports and all material assessments
imposed by any governmental authority, except for taxes and assessments that
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against
the Borrower or any of its Subsidiaries that would have a Material Adverse
Effect.

 

6.11                           Financial Statements; No
Material Adverse Effect.

 

(a)                                  The Audited Financial
Statements with respect to the Borrower, and, to the Borrower’s knowledge, the
Audited Financial Statements with respect to the Acquired Business (i) were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise noted therein; (ii) fairly present in all
material respects the consolidated financial condition of the Borrower and its
Subsidiaries or the Acquired Business and its Subsidiaries, as the case may be,
as of the date thereof and their results of operations for the period covered
thereby in accordance with GAAP consistently applied throughout the periods
covered thereby, except as otherwise expressly noted therein; and (iii) show
all material Indebtedness and other material liabilities, direct or contingent,
of the Borrower and its Subsidiaries or the Acquired Business and its
Subsidiaries, as the case may be, as of the date thereof, including liabilities
for Taxes, material commitments and Indebtedness, in each case to the extent
required by GAAP.

 

(b)                                 The unaudited consolidated
balance sheets with respect to the Borrower and, to the Borrower’s knowledge,
with respect to the Acquired Business, in each case, dated March 31, 2010, June
30, 2010 and September 30, 2010, and the related consolidated statements of
income or operations and cash flows for the fiscal quarter ended on that date,
in each case, (x) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby (except as indicated in such statements
or in the notes thereto), and (y) fairly present in all material respects the
consolidated financial condition of the Borrower and its Subsidiaries or the
Acquired Business and its Subsidiaries, as the case may be, as of the 

 

69

 

date thereof and their results of operations for the
period covered thereby, subject, in the case of clauses (x) and (y),
to the absence of footnotes and to normal year-end audit adjustments.

 

(c)                                  Since the date of the
Audited Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.

 

6.12                           Environmental Matters.  The Borrower and its Subsidiaries conduct in
the ordinary course of business (in a manner sufficient to enable the Borrower
to make the representation and warranty set forth in this Section 6.12)
a review of the effect of existing Environmental Laws and Environmental Claims
on their respective businesses, operations and properties, and as a result
thereof the Borrower has reasonably concluded that, except for matters for
which adequate reserves are maintained or as specifically disclosed in Schedule
6.12, the aggregate effects of such Environmental Laws and Environmental
Claims could not reasonably be expected to have a Material Adverse Effect.

 

6.13                           Regulated Entities.  None of the Borrower, any Person controlling
the Borrower, or any Subsidiary, is an “Investment Company” within the meaning
of the Investment Company Act of 1940.

 

6.14                           Capitalization; Subsidiaries.  As of the Effective Date, the Borrower has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
6.14 hereto and has no equity investments in any other corporation or
entity other than those specifically disclosed in part (b) of Schedule 6.14.

 

6.15                           Insurance.  Except to the extent the failure to be so
insured could not reasonably be expected to have a Material Adverse Effect, the
properties of the Borrower and its Subsidiaries are self-insured in a manner
permitted under Section 7.06 or otherwise insured with financially
sound and reputable insurance companies not Affiliates of the Borrower in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and are similarly situated.

 

6.16                           Compliance with Laws.  Each Loan Party is in compliance in all
material respects with the Requirements of Law (including, without limitation,
the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001)) and all orders, writs, injunctions and decrees applicable to it or to
its properties, except in such instances in which (a) such Requirement of Law
or order, writ, injunction or decree is being contested in good faith by
appropriate action or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.

 

6.17                           Intellectual Property,
Licenses, Etc.  Each Loan
Party owns, or possesses the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses
and other intellectual property rights (collectively, “IP Rights”) that
are reasonably necessary for the operation of their respective businesses,
without conflict with the rights of any other Person except as would not,
either individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

 

6.18                           Collateral Documents.  The provisions of the Collateral Documents
are effective to create in favor of the Agent for the benefit of the Secured
Creditors a legal, valid and enforceable first priority Lien (subject to Liens
permitted by Section 8.01) on all right, title and interest of the
respective Loan Parties in the Collateral. 
Except for filings completed prior to the Effective Date and as
contemplated hereby 

 

70

 

and by the Collateral Documents, no filing or other
action will be necessary to perfect or protect such Liens.

 

6.19                           Solvency.  The Loan Parties, on a consolidated basis,
are Solvent.

 

6.20                           Labor Matters.  There are no collective bargaining agreements
or Multiemployer Plans covering the employees of the Borrower or any other Loan
Party as of the Effective Date and, as of the Effective Date, neither the
Borrower nor any other Loan Party has suffered any strikes, walkouts, work
stoppages or other similar material labor difficulty within the last five
years.

 

6.21                           Full Disclosure.  None of the representations or warranties
made by any Loan Party in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of any Loan Party in connection with the Loan Documents
contains any untrue statement of a material fact or omits any material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they are made, not misleading as of
the time when made or delivered (it being understood that any projections and
forecasts provided by the Borrower or any of its Subsidiaries are based on good
faith estimates and assumptions believed by the Borrower or such Subsidiary to
be reasonable as of the date of the applicable projections or forecasts and
that actual results during the periods covered by any such projections and
forecasts may differ from projected or forecasted results).

 

6.22                           OFAC.  No Loan Party (i) is a person whose property
or interest in property is blocked or subject to blocking pursuant to Section 1
of Executive Order 13224 of September 23, 2001 Blocking Property and
Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or
Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) knowingly engaged in any
dealings or transactions prohibited by Section 2 of such executive order, or
otherwise knowingly associated with any such person in any manner violative of
Section 2, or (iii) is a person on the list of Specially Designated Nationals
and Blocked Persons or subject to the limitations or prohibitions under any
other U.S. Department of Treasury’s Office of Foreign Assets Control regulation
or executive order.

 

ARTICLE VII

 

AFFIRMATIVE COVENANTS

 

So
long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation (other than any contingent indemnification or similar obligation not
yet due and payable, and any Obligations arising under any Rate Swap Document
or Cash Management Agreement) shall remain unpaid or unsatisfied, or any Letter
of Credit (other than any Supported Letter of Credit) shall remain outstanding,
unless the Required Lenders waive compliance in writing:

 

7.01                           Financial Statements;
Projections.  The
Borrower shall deliver to the Agent (which shall promptly make available to
each Lender):

 

(a)                                  as soon as
available, but not later than 90 days after the end of each fiscal year
(commencing with the fiscal year ending December 31, 2010), a copy of the
audited consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such year and the related consolidated statements of income,
shareholders’ equity and cash flows for such year, setting forth in each case
in comparative form the figures for the previous fiscal year, and accompanied
by the report of PricewaterhouseCoopers LLP or another nationally-recognized
independent public accounting firm (the “Independent Auditor”) which
report shall (i) state that such consolidated financial statements present
fairly the financial position for the periods indicated in conformity 

 

71

 

with GAAP, (ii) to the extent required to be
provided pursuant to the rules and regulations of the SEC, include the
attestation report of the Independent Auditor on management’s assessment of the
effectiveness of the Borrower’s internal controls over financial reporting as
of the end of such fiscal year as set forth in the Borrower’s report on Form
10-K for such fiscal year and (iii) not be qualified as to “going concern” or
qualified or limited because of a restricted or limited examination by the
Independent Auditor of any material portion of the Borrower’s or any Subsidiary’s
records; provided that if the Independent Auditor’s report with respect
to such consolidated financial statements is a combined report (that is, one
report containing both an opinion on such consolidated financial statements and
an opinion on internal controls over financial reporting), then such report may
include a qualification or limitation relating to the Borrower’s system of
internal controls over financial reporting due to the exclusion of any acquired
business from the Independent Auditor’s management report on internal controls
over financial reporting to the extent such exclusion is permitted under
provisions published by the SEC or other applicable Governmental Authority;

 

(b)                                 as soon as
available, but not later than 45 days after the end of each of the first three
fiscal quarters of each fiscal year (commencing with the fiscal quarter ending
March 31, 2011), a copy of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal quarter and the
related consolidated statements of income, shareholders’ equity and cash flows
for the period commencing on the first day and ending on the last day of such
fiscal quarter, together with a consolidating income statement for such period,
and certified by a Responsible Officer as fairly presenting, in accordance with
GAAP (subject to good faith year-end and audit adjustments and the absence of
footnotes), the financial position and the results of operations of the
Borrower and its Subsidiaries; and

 

(c)                                  as soon as
available, and in any event no later than 60 days after the end of each fiscal
year of the Borrower commencing with the fiscal year ending December 31, 2011,
a detailed consolidated budget for the then current fiscal year (including a
projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, and the related consolidated statements
of projected cash flow, projected changes in financial position and projected
income and a description of the underlying assumptions applicable thereto)
(collectively, the “Projections”), which Projections shall in each case
be accompanied by a certificate of a Responsible Officer stating that such
Projections are based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect.

 

7.02                           Certificates; Other
Information.  The
Borrower shall furnish to the Agent (which shall promptly make available to
each Lender):

 

(a)                                  concurrently
with the delivery of the financial statements referred to in Section 7.01(a),
a certificate of the Independent Auditor stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of
Default, except as specified in such certificate (it being understood that such
certificate shall be limited to the items, if any, that independent certified
public accountants are permitted to cover in such certificates pursuant to
their professional standards and customs of the profession);

 

(b)                                 concurrently
with the delivery of the financial statements referred to in Sections 7.01(a)
and (b), a Compliance Certificate executed by a Responsible Officer
(which delivery may, unless the Agent or a Lender requests executed originals,
be by electronic communication 

 

72

 

including fax or email and shall be deemed to be an
original authentic counterpart thereof for all purposes);

 

(c)                                  concurrently
with the delivery of the financial statements referred to in Section 7.01(a),
a consolidating income statement for such year (which need not be audited)
setting forth in comparative form the figures for the previous fiscal year;

 

(d)                                 promptly,
copies of all financial statements and reports that the Borrower sends to its
shareholders generally, and copies of all registration statements (other than
Exhibits thereto and any registration statements on Form S-8 or its equivalent)
and final reports on Forms 10-K and 10-Q that the Borrower shall have filed
with the SEC;

 

(e)                                  promptly after
the assertion or occurrence thereof, notice of any action or proceeding against
or of any noncompliance by any Loan Party or any of its Subsidiaries with any
Environmental Law or Environmental Permit that could reasonably be expected to
have a Material Adverse Effect; and

 

(f)                                    promptly, such
additional information regarding the business, financial position or
organizational affairs of the Borrower or any Subsidiary as the Agent, at the
request of any Lender, may from time to time reasonably request.

 

Documents
required to be delivered pursuant to Section 7.01, Section 7.02(b)
or Section 7.02(d) (to the extent any such documents are included
in materials otherwise filed with the SEC) may be delivered electronically and
if so delivered, shall be deemed to have been delivered on the date (i) on
which the Borrower posts such documents, or provides a link thereto on the
Borrower’s website on the Internet at the website address listed on Schedule
11.02; or (ii) on which such documents are posted on the Borrower’s behalf
on an Internet or intranet website, if any, to which each Lender and the Agent
have access (whether a commercial, third-party website or whether sponsored by
the Agent); provided that the Borrower shall notify (which may be by
facsimile or electronic mail) the Agent (which shall notify each Lender) of the
posting of any such document and, promptly upon request by the Agent, provide
to the Agent by electronic mail an electronic version (i.e., a soft copy) of
any such document specifically requested by the Agent.  The Agent shall have no obligation to request
the delivery or to maintain copies of the documents referred to above, and in
any event shall have no responsibility to monitor compliance by the Borrower
with any such request for delivery, and each Lender shall be solely responsible
for requesting delivery to it or maintaining its copies of such documents.

 

The
Borrower hereby acknowledges that (a) MLPF&S and/or Bank of America will
make available to the Lenders and the Issuers materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, “Borrower
Materials”) to Lenders and potential Lenders by posting the Borrower
Materials on IntraLinks or another similar electronic system (the “Platform”)
and (b) certain of the Lenders or potential Lenders may be “public-side”
Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a “Public
Lender”).  The Borrower hereby agrees
that it will use commercially reasonable efforts to identify that portion of
the Borrower Materials that may be distributed to the Public Lenders and that
(w) all Borrower Materials that are made available to Public Lenders shall be
clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that
the word “PUBLIC” shall appear prominently on the first page thereof; (x) by
marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have
authorized MLPF&S, Bank of America, the Lenders and the proposed Lenders to
treat the Borrower Materials as not containing any material non-public
information with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws, it being understood that
certain of the Borrower Materials may be subject to the confidentiality
requirements of Section 11.08; (y) all Borrower Materials marked “PUBLIC”

 

73

 

are
permitted to be made available through a portion of the Platform designated “Public
Investor;” and (z) MLPF&S and Bank of America shall treat the Borrower
Materials that are not marked “PUBLIC” as being suitable only for posting on,
and shall only post the Borrower Materials on, the portion of the Platform not
designated “Public Investor.” 
Notwithstanding the foregoing, the Borrower shall be under no obligation
to mark the Borrower Materials “PUBLIC”.

 

7.03                           Notices.  The Borrower shall notify the Agent (and the
Agent shall promptly thereafter notify each Lender):

 

(a)                                  promptly after
a Responsible Officer obtains knowledge thereof, of the occurrence of any
Default or Event of Default;

 

(b)                                 promptly after
a Responsible Officer obtains knowledge thereof, of any matter that has
resulted or could reasonably be expected to result in a Material Adverse
Effect;

 

(c)                                  promptly after
a Responsible Officer obtains knowledge thereof, of the determination by the
Independent Auditor or the Borrower of the occurrence or existence of an
Internal Control Event that could reasonably be expected to have a Material
Adverse Effect;

 

(d)                                 promptly, but
in no event more than 10 days after such event becomes known to a Responsible
Officer, (i) the occurrence of any ERISA Event that could reasonably be
expected to result in liability to the Borrower and its Subsidiaries in excess
of the Threshold Amount in the aggregate, and deliver to the Agent and each
Lender a copy of any notice with respect to such event that is filed with a
Governmental Authority and any notice delivered by a Governmental Authority to
the Borrower or any ERISA Affiliate with respect to such ERISA Event; and (ii)
to the extent not previously disclosed on Schedule 6.07, the name of any
Pension Plan which the Borrower or any ERISA Affiliate begins to maintain or to
which it begins to contribute, or with respect to which the Borrower or an
ERISA Affiliate assumes or incurs any material liability or material
unsatisfied obligation to contribute; and

 

(e)                                  of any material
change in accounting policies or financial reporting practices by any Loan
Party or any Subsidiary thereof impacting any financial covenant calculations
herein (it being understood that disclosure of any such change in the Borrower’s
SEC filings shall be deemed to satisfy the requirements of this Section 7.03).

 

Each
notice under this Section shall be accompanied by a written statement by a
Responsible Officer setting forth details of the occurrence referred to
therein, and stating what action the Borrower or any affected Subsidiary
proposes to take with respect thereto and at what time.  Each notice under Section 7.03(a)
shall describe with particularity any and all clauses or provisions of this
Agreement or other Loan Document that have been breached or violated.

 

7.04                           Preservation of Corporate
Existence, Etc.  Except as
otherwise expressly permitted hereby, the Borrower shall, and shall cause each
Loan Party to:

 

(a)                                  preserve and
maintain in full force and effect its corporate or other organizational
existence and good standing (if applicable) under the laws of its state or
jurisdiction of formation, except in a transaction permitted by Section 8.02
or Section 8.03 or as otherwise permitted herein; provided, however,
that the Borrower may consummate the Merger;

 

(b)                                 preserve and
maintain in full force and effect all governmental rights, privileges,
qualifications, permits, licenses, approvals and franchises necessary or
desirable in the normal

 

74

 

conduct of its business except (i) in
connection with transactions permitted by Sections 8.02 and 8.03
and/or (ii) for any of the foregoing the expiration or termination of
which could not reasonably be expected to have a Material Adverse Effect;

 

(c)           use reasonable efforts, in
the ordinary course of business, to preserve its business organization and
goodwill except to the extent otherwise permitted herein; and

 

(d)           preserve or renew all of its
registered patents, trademarks, trade names and service marks, the
non-preservation of which could reasonably be expected to have a Material
Adverse Effect.

 

7.05         Maintenance of Property.  The Borrower shall maintain, and shall cause
each Subsidiary to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted, and make all necessary repairs thereto and renewals and
replacements thereof except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

 

7.06         Insurance.

 

(a)           Except to the extent the failure to so maintain
could not reasonably be expected to have a Material Adverse Effect, the
Borrower shall maintain, and shall cause each Subsidiary to maintain, with
financially sound and reputable independent insurers, insurance with respect to
its properties and business against loss or damage of the kinds customarily
insured against by Persons engaged in the same or similar business, of such
types and in such amounts as are customarily carried under similar
circumstances by such other Persons; provided that self insurance of
risks and in amounts customary in the Borrower’s and its Subsidiaries’ industry
shall be permitted; provided, further, that all such insurance
shall (i) provide for not less than 30 days’ prior notice to the Agent of
termination, lapse or cancellation of such insurance, (ii) name the Agent
as additional insured on behalf of the Secured Creditors (in the case of
liability insurance) or loss payee (in the case of property insurance), as
applicable and (iii) be reasonably satisfactory in all other respects to
the Agent.

 

(b)           With respect to each Mortgaged Property, the
Borrower shall obtain flood insurance in such total amount as the Agent or the
Required Lenders may from time to time reasonably require if at any time the
area in which any improvements are located on any Mortgaged Property is
designated a “flood hazard area” in any Flood Insurance Rate Map published by
the Federal Emergency Management Agency (or any successor agency), and
otherwise comply with the National Flood Insurance Program as set forth in the
Flood Disaster Protection Act of 1973, as amended from time to time.

 

7.07         Payment of Taxes.  The Borrower shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
Federal and other material tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate reserves
in accordance with GAAP are being maintained by the Borrower or such
Subsidiary.

 

7.08         Compliance with Laws.  The Borrower shall comply, and shall cause
each Subsidiary to comply, with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including ERISA and the
Federal Fair Labor Standards Act), except (a) such as may be contested in
good faith or as to which a bona fide dispute may exist or (b) to the
extent non-compliance could not reasonably be expected to have a Material
Adverse Effect.

 

75

 

7.09         Inspection of Property and Books and Records.  The Borrower shall maintain, and shall cause
each Subsidiary to maintain, books of record and account sufficient to permit
the preparation of consolidated financial statements in conformity with
GAAP.  The Borrower shall permit, and
shall cause each Loan Party to permit, representatives and independent
contractors of the Agent or any Lender to visit and inspect any of their
respective properties, to examine their respective corporate, financial and
operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, all at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Borrower, all at the expense of such
Lender or, if applicable, the Agent; provided that when an Event of
Default exists the Agent or any Lender may do any of the foregoing at the
expense of the Borrower at any time during normal business hours and without
advance notice.

 

7.10         Environmental Laws.  The Borrower shall, and shall cause each
Subsidiary to, (i) conduct its operations and keep and maintain its
property in compliance with all Environmental Laws and Environmental Permits
and (ii) obtain and renew all Environmental Permits necessary for its
operations and properties, the violation of or failure to obtain or renew which
could reasonably be expected to have a Material Adverse Effect.

 

7.11         Use of Proceeds.  The Borrower shall use the proceeds of the
Loans (a) to finance the Merger and the Refinancing, and to pay fees and
expenses incurred in connection with the Transaction and (b) with respect
to the Revolving Loans, for working capital and for general corporate purposes
not in contravention of any Requirement of Law or of any Loan Document.  Neither the Borrower nor any of its
Subsidiaries shall use the proceeds of the Loans, directly or indirectly, to
purchase or carry Margin Stock in violation of Regulation T, U or X of the
FRB.   Neither the Borrower nor any of
its Subsidiaries shall use the proceeds of the Loans, directly or indirectly,
for any payments to any governmental official or employee, political party,
official of a political party, candidate for political office, or anyone else
acting in an official capacity, in order to obtain, retain or direct business or
obtain any improper advantage, in violation of the United States Foreign
Corrupt Practices Act of 1977, as amended.

 

7.12         Guarantors.  The Borrower shall take all steps necessary
to ensure that not later than 45 days after the Borrower creates or acquires
(directly or indirectly) any Material Domestic Subsidiary and not later than 45
days after the last day of any fiscal quarter during which any previously owned
or acquired Subsidiary becomes a Material Domestic Subsidiary, such Material
Domestic Subsidiary becomes a party to the Security Agreement.  For the avoidance of doubt, the Borrower may
from time to time add any of its Subsidiaries as a party to the Security
Agreement even if not required pursuant to this Section 7.12.

 

7.13         Further Assurances.

 

(a)           The Borrower shall take, execute and deliver, and
cause each other Loan Party to take, execute and deliver, any and all such
further acts, security agreements, assignments, financing statements and
continuations thereof, termination statements, certificates, control agreements
and other instruments, that the Agent may reasonably request from time to time
in order to preserve and protect the Liens of the Collateral Documents.

 

(b)           Notwithstanding anything to the contrary in the Loan
Documents, (i) no amount due from or other obligation of the Borrower
shall be (directly or indirectly) secured by an asset of any Foreign Subsidiary
and no Foreign Subsidiary or Subsidiary that is a “controlled foreign
corporation” under Section 957 of the Code shall be required to become a
Guarantor, (ii) neither the Borrower nor any Domestic Subsidiary shall be
required to pledge more than 65% of the Equity Interests in any Foreign
Subsidiary and (iii) no Loan Party shall be required to pledge Margin
Stock.

 

76

 

(c)           Notwithstanding any other provision of this
Agreement or any other Loan Document, during the 60-day period (or such longer
period as the Agent agrees in its sole and complete discretion) following the
date on which any Person becomes a party to, or the Equity Interests of any
Person are pledged pursuant to, any Collateral Document, the Agent and such
Person (or any other applicable Loan Party) may (i) enter into such
amendments and supplements (including updates of the schedules) to any
Collateral Document as are necessary or appropriate to cause the
representations and warranties therein to be accurate and complete with respect
to such Person and (ii) modify the covenants and other provisions thereof
in such manner as the Agent deems necessary or appropriate to accommodate the
addition of such Person as a party to, or the pledge of such Person’s Equity
Interests under, such Collateral Document (and neither the inaccuracy or
incompleteness of any applicable representation or warranty nor any
non-compliance with any applicable covenant or other provision in any
applicable Loan Document shall give rise to a Default or Event of Default prior
to the end of such period so long as such inaccuracy, incompleteness or
non-compliance does not impair the Agent’s Lien for the benefit of the Secured
Creditors on any material portion of the applicable Collateral or the Agent’s
rights for the benefit of the Secured Creditors with respect thereto in any
material respect).

 

(d)           The Borrower shall deliver, or cause to be
delivered, within ten (10) Business Days of the Closing Date, the
certificates representing the Equity Interests listed on Schedule 7.14(d).

 

7.14         Covenant to Give Security.

 

(a)           At the time any Subsidiary (or such later time as
set forth below) is required to execute a joinder to the Security Agreement
pursuant to Section 7.12, the Borrower shall, at the Borrower’s
expense:

 

(i)            promptly after such joinder
is provided, cause such Subsidiary to duly execute and deliver to the Agent
deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold
mortgages, leasehold deeds of trust, Security Agreement Supplements, Perfection
Certificates, Intellectual Property Security Agreements and other security
and pledge agreements, as specified by and in form and substance reasonably
satisfactory to the Agent (including delivery of all certificates, if any,
representing the Equity Interests in and of such Subsidiary, and other
instruments of the type specified in Section 5.01(b)), securing
payment of all the Obligations of such Subsidiary under the Loan Documents and
constituting Liens on all such real and personal properties (subject to the
threshold amounts set forth in clause (b) below),

 

(ii)           promptly after such joinder
is provided, cause such Subsidiary to take whatever action (including the
recording of mortgages, the filing of UCC financing statements, the giving of
notices and the endorsement of notices on title documents) may be necessary or
advisable in the reasonable opinion of the Agent to vest in the Agent (or in
any representative of the Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the deeds of trust, trust deeds,
deeds to secure debt, mortgages, leasehold mortgages, leasehold deeds of trust,
Security Agreement Supplements, Intellectual Property Security Agreements
and security and pledge agreements delivered pursuant to this Section 7.14,
and

 

(iii)          deliver to the Agent,
promptly after the request of the Agent in its reasonable discretion, a signed
copy of a favorable opinion, in form reasonably satisfactory to the Agent and
addressed to the Agent and the other Secured Creditors, of counsel for the Loan
Parties as to the matters contained in clauses (i) and (ii) above
and Section 7.12, and as to such other matters as the Agent may
reasonably request, and

 

77

 

(iv)          as promptly as practicable
after such joinder is provided, deliver, upon the request of the Agent in its
reasonable discretion, to the Agent with respect to each parcel of real
property owned or held by the entity that is the subject of such formation or
acquisition and that is required to become a Mortgaged Property hereunder title
policies, surveys and engineering, soils and other reports, and environmental
assessment reports, each in scope, form and substance reasonably satisfactory
to the Agent; provided, however, that to the extent that any Loan Party or any of its
Subsidiaries shall have otherwise received any of the foregoing items with
respect to such real property, such items shall, promptly after the receipt
thereof, be delivered to the Agent and such delivery shall satisfy the delivery
requirement under this clause (iv).

 

(b)           Upon the acquisition of any property constituting
Collateral with an aggregate book or fair market value in excess of $5,000,000
by any Loan Party, if such property, in the reasonable judgment of the Agent,
shall not already be subject to a perfected first priority security interest
(subject to Permitted Liens) in favor of the Agent for the benefit of the
Secured Creditors, then the Borrower shall, at the Borrower’s expense:

 

(i)            promptly after such
acquisition, cause the applicable Loan Party to duly execute and deliver to the
Agent deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold
mortgages, leasehold deeds of trust, Security Agreement Supplements, Intellectual
Property Security Agreements, Security Agreements and other security and pledge
agreements, as specified by and in form and substance reasonably satisfactory
to the Agent, securing payment of all the Obligations of the applicable Loan
Party under the Loan Documents and constituting Liens on all such properties,

 

(ii)           promptly after such
acquisition, cause the applicable Loan Party to take whatever action (including
the recording of mortgages, the filing of UCC financing statements, the giving
of notices and the endorsement of notices on title documents) may be necessary
or advisable in the reasonable opinion of the Agent to vest in the Agent (or in
any representative of the Agent designated by it) valid and subsisting Liens on
such property, and

 

(iii)          deliver to the Agent,
promptly after the request of the Agent in its reasonable discretion, a signed
copy of a favorable opinion, in form reasonably satisfactory to the Agent and
addressed to the Agent and the other Secured Creditors, of counsel for the Loan
Parties as to the matters contained in clauses (i) and (ii) above
and as to such other matters as the Agent may reasonably request, and

 

(iv)          as promptly as practicable
after any acquisition of a real property that is required to become a Mortgaged
Property hereunder, deliver to the Agent (x) a completed “Life-of-Loan”
Federal Emergency Management Agency Standard Flood Hazard Determination with
respect to each Mortgaged Property (together with a notice about special flood
hazard area status and flood disaster assistance duly executed by the Borrower
and each Loan Party relating thereto) and (y) upon the request of the
Agent in its reasonable discretion, to the Agent with respect to such real
property title policies, surveys and engineering, soils and other reports, and
environmental assessment reports, each in scope, form and substance
satisfactory to the Agent, provided, however, that to the extent
that any Loan Party or any of its Subsidiaries shall have otherwise received
any of the foregoing items with respect to such real property, such items
shall, promptly after the receipt thereof, be delivered to the Agent and such
delivery shall satisfy the delivery requirement under this clause(iv).

 

78

 

(c)           Promptly upon the request of the Agent following the
occurrence and during the continuance of an Event of Default, the Borrower
shall, at the Borrower’s expense:

 

(i)            furnish to the Agent a
description of the material owned real and personal properties of the Loan
Parties in detail reasonably satisfactory to the Agent,

 

(ii)           duly execute and deliver,
and cause each Loan Party (if it
has not already done so) to duly execute and deliver, to the Agent deeds of
trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages,
leasehold deeds of trust, Security Agreement Supplements, Intellectual
Property Security Agreements and other security and pledge agreements, as
specified by and in form and substance reasonably satisfactory to the Agent
(including delivery of all certificates, if any, representing the Equity
Interests in and of such Subsidiary, and other instruments of the type
specified in Section 5.01(b)), securing payment of all the
Obligations of the applicable Loan
Party under the Loan Documents and constituting Liens on all such
properties (subject to the threshold amounts set forth in clause (b) above),

 

(iii)          take, and cause each Loan Party to take, whatever
action (including the recording of mortgages, the filing of UCC financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the reasonable opinion of the Agent
to vest in the Agent (or in any representative of the Agent designated by it)
valid and subsisting Liens on the properties purported to be subject to the
deeds of trust, trust deeds, deeds to secure debt, mortgages, leasehold mortgages,
leasehold deeds of trust, Security Agreement Supplements, Intellectual
Property Security Agreements and security and pledge agreements delivered
pursuant to this Section 7.14, and

 

(iv)          deliver to the Agent a
signed copy of a favorable opinion, in form reasonably satisfactory to the
Agent and addressed to the Agent and the other Secured Creditors, of counsel
for the Loan Parties as to the matters contained in clauses (ii) and
(iii) above, and as to such other matters as the Agent may
reasonably request, and

 

(v)           as promptly as practicable
after such request, deliver, upon the request of the Agent in its reasonable
discretion, to the Agent with respect to each parcel of real property owned or
held by the Borrower and its Subsidiaries that is required to become a
Mortgaged Property hereunder, title policies, surveys and engineering, soils
and other reports, and environmental assessment reports, each in scope, form
and substance reasonably satisfactory to the Agent; provided, however, that to the extent that any Loan
Party or any of its Subsidiaries shall have otherwise received any of the
foregoing items with respect to such real property, such items shall, promptly
after the receipt thereof, be delivered to the Agent and such delivery shall
satisfy the delivery requirement under this clause (v).

 

ARTICLE VIII

 

NEGATIVE COVENANTS

 

So
long as any Lender shall have any Commitment hereunder, or any Loan or other
Obligation (other than any contingent indemnification or similar obligation not
yet due and payable, and any Obligations arising under any Rate Swap Document
or Cash Management Agreement) shall remain unpaid or unsatisfied, or any Letter
of Credit (other than any Supported Letter of Credit) shall remain outstanding:

 

79

 

8.01         Liens.  The Borrower shall not, and shall not permit
any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of its property,
whether now owned or hereafter acquired, other than the following (“Permitted
Liens”):

 

(a)           any Lien existing on
property of the Borrower or any Subsidiary on the Effective Date and set forth
in Schedule 8.01 securing (i) Indebtedness (or commitments therefor)
outstanding on the Effective Date and (ii) any Permitted Refinancing
Indebtedness in respect of Indebtedness described in subclause (i);

 

(b)           any Lien created under any
Loan Document, any Lien securing any Swap Contract permitted hereunder and any
Lien securing a Cash Management Agreement entered into in the ordinary course
of business;

 

(c)           Liens for taxes, fees,
assessments or other governmental charges which are not delinquent for more
than 90 days or remain payable without penalty, or if and to the extent that
non-payment thereof is permitted by Section 7.07; provided
that no notice of lien has been filed or recorded under the Code;

 

(d)           carriers’, warehousemen’s,
mechanics’, landlords’, materialmen’s, repairmen’s or other similar Liens
arising in the ordinary course of business which are not delinquent or remain
payable without penalty or which are being contested in good faith and by
appropriate proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property subject thereto;

 

(e)           Liens (other than any Lien
imposed by ERISA) consisting of pledges or deposits required in the ordinary
course of business in connection with workers’ compensation, unemployment and
other insurance and other social security legislation;

 

(f)            Liens on the property of the
Borrower or its Subsidiaries securing (i) the non-delinquent performance
of bids, trade contracts (other than for borrowed money), leases and statutory
obligations, (ii) Contingent Obligations in connection with Surety Bonds
and appeal bonds and (iii) other non-delinquent obligations of a like
nature, in each case, incurred in the ordinary course of business (and treating
as non-delinquent any delinquency which is being contested in good faith and by
appropriate actions, which actions have the effect of preventing the forfeiture
or sale of the property subject thereto);

 

(g)           Liens consisting of judgment
or judicial attachment liens not constituting a Default under Section 9.01(i);
provided that the enforcement of such Liens is effectively stayed;

 

(h)           easements, rights-of-way,
restrictions and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the businesses of the
Borrower and its Subsidiaries;

 

(i)            Liens securing Indebtedness
permitted by Section 8.05(c); provided, in each case, that
(i) no such Lien shall at any time encumber any property other than the
property financed by such Indebtedness (or the Indebtedness which was
refinanced in the case of Permitted Refinancing Indebtedness), improvements
thereon, replacements thereof and proceeds thereof (provided that
individual financings permitted by this subsection (i) provided
by one Person (or an Affiliate thereof) may be cross-collateralized to other
financings provided by such Person and its Affiliates

 

80

 

that are permitted by this subsection (i)),
and (ii) the Indebtedness secured thereby shall not exceed the cost of the
property being acquired on the date of acquisition;

 

(j)            Liens arising solely by
virtue of any statutory or common law provision or otherwise created in the
ordinary course of business relating to banker’s liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution, including to facilitate the operation
of cash pooling, interest set-off and/or sweep accounts; provided that (i) such
deposit account is not a dedicated cash collateral account and is not subject
to restrictions against access by the Borrower or any Subsidiary in excess of
those set forth by regulations promulgated by the FRB and (ii) such deposit
account is not intended by the Borrower or any Subsidiary to provide collateral
to the depository institution;

 

(k)           Liens securing reimbursement
obligations incurred in the ordinary course of business for letters of credit
or banker’s acceptances, which Liens encumber only goods, or documents of title
covering goods, which are purchased in transactions for which such letters of
credit or banker’s acceptances are issued;

 

(l)            Liens securing Indebtedness
permitted by Section 8.05(h) so long as such Liens (i) attach
only to specific assets (or assets of a Person that is not, and is not required
to become, a Subsidiary Guarantor) acquired in a Permitted Acquisition
(including through the acquisition of a Person that becomes a Subsidiary) and
not to any other property of the Borrower or any of its other Subsidiaries and (ii) were
not created in contemplation thereof;

 

(m)          Liens securing Indebtedness
or other obligations of the Borrower and its Subsidiaries not to exceed in the
aggregate, at any time outstanding, $40,000.000;

 

(n)           Liens in favor of customs or
revenue authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods incurred in the ordinary
course of business;

 

(o)           leases, subleases, licenses
or sublicenses (including, in the case of licenses and sublicenses, of
intellectual property) granted to others in the ordinary course of business
which do not materially interfere with the ordinary conduct of the business of
the Borrower or any Subsidiary and do not secure any Indebtedness;

 

(p)           Liens (i) of a
collecting bank arising under Section 4-210 of the UCC on items in the
ordinary course of collection, and (ii) encumbering reasonable customary
initial deposits and margin deposits and attaching to commodity trading
accounts or other brokerage accounts incurred in the ordinary course of
business and not for speculative purposes;

 

(q)           any interest or title of (i) an
owner of equipment or inventory on loan or consignment to the Borrower or any
of its Subsidiaries and Liens arising from precautionary UCC financing
statement filings made in respect of operating leases entered into by the
Borrower or any Subsidiary in the ordinary course of business; and (ii) a
lessor or secured by a lessor’s interest under any lease permitted hereunder;

 

(r)            options, put and call
arrangements, rights of first refusal and similar rights relating to
Investments in joint ventures, partnerships and the other similar Investments
permitted by Section 8.04;

 

81

 

(s)           contractual rights of
set-off and similar rights securing Swap Contracts so long as any related
Indebtedness is permitted to be incurred hereunder;

 

(t)            rights of first refusal,
put, call and similar rights arising in connection with repurchase agreements
that constitute Investments permitted hereunder;

 

(u)           Liens on assets of a
Securitization Subsidiary securing Securitization Obligations in connection
with a Permitted Securitization; and

 

(v)           any extension, renewal or
substitution of or for any Lien permitted by subsection (l) of
this Section, to the extent that (i) the amount of the Indebtedness or
other obligation or liability secured by the applicable Lien shall not exceed
the Indebtedness or other obligation or liability existing immediately prior to
such extension, renewal or substitution and (ii) the scope of the property
subject to such Lien is not increased.

 

Any
Lien permitted above on any property may extend to the identifiable proceeds of
such property.

 

8.02         Disposition of Assets.  The Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, sell, assign, lease,
convey, transfer or otherwise dispose of (whether in one or a series of related
transactions) any of its property (any such transaction, excluding, for the
avoidance of doubt, (i) any issuance by the Borrower of its own Equity
Interests or any other Loan Party of its Equity Interests to any other Loan
Party and (ii) any involuntary disposition or disposition as to which a Recovery
Event occurs, a “Disposition”), including accounts and notes receivable,
with or without recourse, and the Capital Stock in any Subsidiary, or enter
into any agreement to do any of the foregoing, except:

 

(a)           Dispositions of inventory in
the ordinary course of business and Dispositions of used, worn-out, obsolete or
surplus assets;

 

(b)           Dispositions of equipment,
to the extent that such equipment is exchanged for credit against the purchase
price of similar replacement equipment or the proceeds of such Disposition are
reasonably promptly applied to the purchase price of such replacement
equipment;

 

(c)           Dispositions (i) between
and among Loan Parties, (ii) from any Subsidiary that is not a Loan Party
to the Borrower or any other Subsidiary and (iii) that are permitted under
Section 8.03 (other than Section 8.03(b));

 

(d)           Dispositions of cash and
Cash Equivalents and the making of Investments permitted by Section 8.04;

 

(e)           the granting of
non-exclusive licenses of patents, trademarks and copyrights by the Borrower or
any Subsidiary;

 

(f)            Dispositions of past due
accounts receivable without credit recourse in transactions that do not
constitute securitizations in connection with the compromise or collection
thereof, in each case in the ordinary course of business;

 

(g)           Dispositions in the ordinary
course of business of tangible property as part of a like-kind exchange under
Section 1031 of the Code;

 

82

 

(h)           Dispositions in the ordinary
course of business consisting of the abandonment of intellectual property
rights that, in the reasonable good faith determination of the applicable Loan
Party, are not material to the conduct of its business;

 

(i)            Dispositions of accounts
receivable, lease receivables, other financial assets and other rights and
related assets pursuant to a Permitted Securitization; and

 

(j)            Dispositions that are not
permitted by the foregoing provisions of this Section 8.02; provided
that (i) any such Disposition is made for fair market value, (ii) no
Event of Default shall exist at the time of or shall exist upon consummation of
any such Disposition, (iii) at least 75% of the consideration for such
Disposition, in the case of any Disposition involving assets with a fair market
value in excess of $5,000,000, is payable in cash or Cash Equivalents and (iv) the
aggregate value of all assets disposed of by the Borrower and its Subsidiaries
pursuant to this subsection (j) shall not exceed during any
fiscal year, in the aggregate, $50,000,000; provided, however,
that any portion of the maximum amount permitted as described in clause (iv) above
may, if not used in the fiscal year for which it is permitted above, be carried
over for expenditure in the next following fiscal year; and provided, further,
if any such amount is so carried over, it will be deemed used in the applicable
subsequent fiscal year before the amount permitted based on the amount
determined without giving effect to this proviso or the preceding proviso.

 

8.03         Consolidations and Mergers.  The Borrower shall not, and shall not permit
any Subsidiary to, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), except that:

 

(a)           (i) any Subsidiary of
the Borrower may be merged or consolidated with or into the Borrower; provided
that the Borrower shall be the continuing or surviving corporation, (ii) any
Subsidiary of the Borrower may be merged or consolidated with or into any
Guarantor; provided that either (x) the Guarantor shall be the
continuing or surviving corporation or (y) simultaneously with such
transaction, the continuing or surviving corporation shall become a Guarantor
and (iii) any Subsidiary of the Borrower that is not a Guarantor may be
merged or consolidated with or into any other Subsidiary of the Borrower that
is not a Guarantor or any other Subsidiary of the Borrower that is a Guarantor
if such Guarantor is the surviving entity or the Borrower if the Borrower is
the surviving entity;

 

(b)           any Subsidiary of the
Borrower may Dispose of any or all of its assets (upon voluntary liquidation or
otherwise) in a Disposition permitted by Section 8.02 or to the
Borrower or any Guarantor;

 

(c)           any Investment expressly
permitted by Section 8.04 may be structured as a merger,
consolidation or amalgamation, subject to clause (a)(i) above; and

 

(d)           the Borrower may consummate,
or cause the consummation of, the Merger.

 

8.04         Investments.  The Borrower shall not, and shall not permit
any Subsidiary to, make any advance, loan, extension of credit (by way of
guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, “Investments”), except:

 

(a)           extensions of trade credit
in the ordinary course of business;

 

83

 

(b)           Investments in Cash
Equivalents;

 

(c)           loans and advances to
officers and employees of the Borrower and its Subsidiaries in the ordinary
course of business (including for travel, entertainment and relocation
expenses) in an aggregate amount not to exceed $5,000,000 at any one time
outstanding;

 

(d)           Capital Expenditures permitted
by Section 8.11;

 

(e)           Investments by (i) any
Loan Party in any other Loan Party (including in any joint venture that is a
Subsidiary), (ii) by any Subsidiary that is not a Loan Party in the
Borrower or any other Subsidiary and (iii) by the Loan Parties in
Subsidiaries that are not Loan Parties in an aggregate principal amount not to
exceed $15,000,000;

 

(f)            any endorsement of a check
or other medium of payment for deposit or collection through normal banking
channels or any similar transaction in the normal course of business;

 

(g)           Permitted Acquisitions and
the Merger;

 

(h)           any Investment received in
consideration for a Disposition permitted by Section 8.02(j);

 

(i)            Investments consisting of
the transfer of Capital Stock or Indebtedness of a Foreign Subsidiary to the
Borrower or any other Subsidiary of the Borrower;

 

(j)            other Investments in an
aggregate amount outstanding pursuant to this subsection (j) not
to exceed $30,000,000 outstanding at any time;

 

(k)           Investments (including debt
obligations) received in connection with the bankruptcy or reorganization of
suppliers and customers of the Borrower or any of its Subsidiaries and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers of the Borrower or any of its Subsidiaries arising in
the ordinary course of business;

 

(l)            Investments constituting
Swap Contracts entered into in compliance with Section 8.12 hereof;

 

(m)          so long as (x) no
Default or Event of Default has occurred and is continuing and (y) the
Borrower would be in compliance on a pro forma basis with each of the covenants
set forth in Sections 8.09 and 8.10 as of the last day of the most recent
quarter for which internal financial statements are available on the date any
such Investment is made, Investments in an aggregate amount equal to the
portion, if any, of the Available Amount on such date that the Borrower elects
to apply pursuant to this subsection (m);

 

(n)           Investments in joint
ventures in an aggregate amount outstanding from time to time of up to
$25,000,000;

 

(o)           Investments and Guaranty
Obligations consisting of Indebtedness incurred in accordance with Section 8.05(b) or
(e);

 

(p)           Acquisitions made as a
reinvestment of the proceeds of any Disposition or Recovery Event as contemplated
by the definition of “Net Cash Proceeds”;

 

84

 

(q)                                 Investments
(i) by the Borrower or any of its Subsidiaries in the Borrower or any
Person that, prior to such Investment, is a Guarantor and (ii) by any
Foreign Subsidiary in any other Foreign Subsidiary;

 

(r)                                    Investments
existing on the Effective Date and described on Schedule 8.04; and

 

(s)                                  (i) Investments
in a Securitization Subsidiary in connection with a Permitted Securitization; provided
that any such Investment in a Securitization Subsidiary is in the form of a
contribution of additional assets in connection with a Permitted Securitization
or as common equity or subordinated indebtedness, and (ii) payments of
fees and purchases of a Securitization Subsidiary’s assets pursuant to a
repurchase obligation pursuant to Standard Securitization Undertakings, in each
case in connection with a Permitted Securitization.

 

The
amount of any Investment shall be calculated under this Section 8.04
net of any cash returns of principal and capital cash dividends and other cash
returns received by a Loan Party on or after the Effective Date in respect of
such Investment.

 

8.05                           Indebtedness.  The Borrower shall not, and shall not permit
any Subsidiary to, create, incur, assume, suffer to exist or otherwise become
or remain directly or indirectly liable with respect to any Indebtedness, other
than:

 

(a)                                  Indebtedness
pursuant to any Loan Document;

 

(b)                                 Indebtedness of
(i) any Loan Party to any other Loan Party and (ii) any Subsidiary
that is not a Loan Party to the Borrower or any Subsidiary;

 

(c)                                  Indebtedness
(including Capital Lease Obligations) incurred to finance the acquisition of
fixed or capital assets and Permitted Refinancing Indebtedness in respect
thereof in an aggregate principal amount not to exceed $20,000,000 at any one
time outstanding;

 

(d)                                 (i) the
Senior Notes (and Guaranty Obligations of any Guarantor in respect thereof), (ii) Indebtedness
outstanding on the date hereof and listed on Schedule 8.05 and (iii) any
Permitted Refinancing Indebtedness in respect of any of the foregoing
Indebtedness;

 

(e)                                  Guaranty
Obligations made in the ordinary course of business by the Borrower or any of
its Subsidiaries of obligations of the Borrower or any Subsidiary;

 

(f)                                    Contingent
Obligations consisting of purchase price adjustments and Permitted Earn-Out
Obligations;

 

(g)                                 Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of
business, in each case, so long as such Indebtedness is extinguished within 5
Business Days of the incurrence thereof;

 

(h)                                 (i) Indebtedness
assumed in connection with, or of a Person existing at the time it became a
Subsidiary in connection with, a Permitted Acquisition; provided that
such Indebtedness existing prior to such Permitted Acquisition and was not
created in contemplation thereof and (ii) Permitted Refinancing
Indebtedness in respect of Indebtedness permitted by subclause (i) above,
in an aggregate principal amount for all such Indebtedness outstanding in
reliance on this clause (h) at any time not to exceed $20,000,000;

 

85

 

(i)                                     Permitted
Additional Debt and Permitted Refinancing Indebtedness in respect thereof;

 

(j)                                     Indebtedness
constituting Permitted Seller Notes and Existing Seller Notes and Permitted
Refinancing Indebtedness in respect thereof;

 

(k)                                  Indebtedness
arising under Swap Contracts entered into in accordance with Section 8.12
and Indebtedness arising under Cash Management Agreements in the ordinary
course of business;

 

(l)                                     Indebtedness
incurred by a Securitization Subsidiary in a Permitted Securitization that is
not recourse (except for Standard Securitization Undertakings) to the Borrower
or any of its Subsidiaries (other than a Securitization Subsidiary); provided
that the Borrower would be in compliance on a Pro Forma Basis with Section 8.09
and Section 8.10 hereof;

 

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

 

(n)                                 Indebtedness
incurred in the ordinary course of business with respect to surety and appeal
bonds, performance and insurance bonds and other similar obligations;

 

(o)                                 Indebtedness of
any Foreign Subsidiary under lines of credit and overdraft facilities extended
by any Person to such Foreign Subsidiary, provided, that, in each case,
the proceeds of such Indebtedness are used for such Foreign Subsidiary’s
working capital and general corporate purposes and provided, further,
that the aggregate principal amount of all Indebtedness permitted under this
clause at any time outstanding shall not exceed the Dollar equivalent of
$3,000,000; and

 

(p)                                 additional
Indebtedness of the Borrower and any of its Subsidiaries in an aggregate
principal amount (for the Borrower and all Subsidiaries) not to exceed
$40,000,000 at any one time outstanding.

 

8.06                           Transactions
with Affiliates.  The
Borrower shall not, and shall not permit any Subsidiary to, enter into any
transaction with any Affiliate of the Borrower (other than the Borrower or a
Subsidiary), except upon fair and reasonable terms no less favorable to the
Borrower or such Subsidiary as could be obtained in a comparable arm’s-length
transaction with a Person not an Affiliate of the Borrower and except for the
following:

 

(a)                                  any employment
or severance agreement and any amendment thereto entered into by the Borrower
or any Subsidiary in the ordinary course of business;

 

(b)                                 the payment of
reasonable directors’ fees and benefits; provided that the amount of
such fees and benefits paid to any Affiliate does not exceed the amount of such
fees and benefits paid to any Person that is not otherwise an Affiliate of the
Borrower;

 

(c)                                  the provision
of officers’ and directors’ indemnification and insurance in the ordinary
course of business to the extent permitted by applicable law;

 

86

 

(d)                                 the payment of
employee salaries, bonuses and employee benefits in the ordinary course of
business;

 

(e)                                  any Investment
permitted under Section 8.04 and any Restricted Payment permitted
under Section 8.08;

 

(f)                                    any
contribution of capital to the Borrower;

 

(g)                                 sales or leases
of goods to Affiliates in the ordinary course of business for less than fair
market value, but not for less than cost; and

 

(h)                                 transactions
effected as part of a Permitted Securitization.

 

8.07                           Burdensome
Agreements.  The
Borrower shall not, and shall not permit any Subsidiary (excluding any
Securitization Subsidiary) to, be a party to any Contractual Obligation (other
than (x) this Agreement or any other Loan Document and (y) any
financial covenant in any other agreement evidencing Indebtedness permitted
hereunder) that limits the ability of any Subsidiary to (a) make
Restricted Payments to the Borrower or any Guarantor or to make an equity
investment in the Borrower or any Guarantor, (b) create, incur, assume or
suffer to exist Liens on property of such Person to secure any of the
Obligations or Guaranteed Obligations, (c) transfer property of such
Person to the Borrower or any Guarantor or (d) guarantee any of the
Obligations or Guaranteed Obligations, except for:

 

(i)                                     any restriction
in effect on the date hereof and set forth on Schedule 8.07;

 

(ii)                                  any restriction
in effect at the time any Person becomes a Subsidiary (including in connection
with a Permitted Acquisition) and not entered into in contemplation of such
Person becoming a Subsidiary of the Borrower;

 

(iii)                               restrictions of
the type described in clause (b) incurred or provided in favor of any
holder of obligations secured by a Lien permitted under Section 8.01
that are applicable to the property subject to such Liens;

 

(iv)                              customary
provisions in joint venture agreements and other similar agreements applicable
to joint ventures permitted under Section 8.04 and applicable
solely to such joint venture;

 

(v)                                 customary
restrictions in leases, subleases, licenses or asset sale agreements otherwise
permitted hereunder so long as such restrictions relate solely to the assets or
entities subject thereto;

 

(vi)                              customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or any such Subsidiary;

 

(vii)                           restrictions on
cash or other deposits imposed by customers under contracts entered into in the
ordinary course of business and not otherwise prohibited hereunder;

 

(viii)                        restrictions in
agreements relating to Indebtedness of a Subsidiary that is not a Subsidiary
Guarantor that, in the good faith judgment of the Borrower, are customary for
financings of such type or that are reasonably required to obtain such
financing;

 

(ix)                                restrictions
that relate to assets or a Subsidiary to be sold of pending the closing of the
sale of such assets or Subsidiary;

 

87

 

(x)                                   restrictions
that arise solely as a result of a Requirement of Law; and

 

(xi)                                restrictions
arising from amendments, replacements or renewals of any agreement containing
restrictions described in clause (i) through (x) above that are not
materially more restrictive than the restrictions being replaced.

 

8.08                           Restricted
Payments; Prepayment of Specified Indebtedness.

 

(a)                                  The Borrower
shall not, and shall not permit any Subsidiary to, declare or make any
Restricted Payment except that:

 

(i)                                     the Borrower
may pay dividends and make distributions payable solely in Capital Stock (other
than Disqualified Capital Stock) of the Borrower;

 

(ii)                                  the Borrower or
any Subsidiary may make cash payments in lieu of issuance of fractional shares
in connection with the exercise of warrants, options or other securities
convertible into or exchangeable for Capital Stock of the Borrower on any of
its Subsidiaries;

 

(iii)                               any Subsidiary
may make such Restricted Payments to its equity owners generally on a pro rata
basis;

 

(iv)                              the Borrower
may purchase the Borrower’s common stock or common stock options from present
or former officers, directors or employees of the Borrower or any Subsidiary
upon the death, disability or termination of employment of such officer,
director or employee, provided that the aggregate amount of payments under
this subclause (iv) shall not exceed $3,000,000 in any
twelve-month period;

 

(v)                                 the Borrower
may make additional Restricted Payments (including the payment of dividends and
redemption of Capital Stock) in an aggregate amount that, when aggregated with
the amount applied to make prepayments of Specified Indebtedness pursuant to Section 8.08(b)(iii),
does not exceed $20,000,000 during the term of this Agreement, provided
that, if, after giving pro forma effect to the making of such Restricted
Payments, the Consolidated Leverage Ratio as of the last day of the most recent
quarter for which internal financial statements are available on the date of
such Restricted Payment is less than 4.5 to 1.0, such amount shall be increased
to $30,000,000;

 

(vi)                              so long as (x) no
Event of Default exists or would result therefrom and (y) the Borrower
would be in compliance on a pro forma basis with each of the covenants set
forth in Sections 8.09 and 8.10 as of the last day of the
most recent quarter for which internal financial statements are available on
the date any such Restricted Payment is made and (z) the Consolidated
Leverage Ratio as of such date would be less than 3.75 to 1.0, Restricted
Payments from the Available Amount; and

 

(vii)                           the Borrower
may make repurchases of Capital Stock deemed to occur upon exercise of stock
options or warrants if such Capital Stock represents a portion of the exercise
price of such options or warrants and may repurchase restricted common stock
held by present or former officers, directors or employees to the extent
representing such Person’s tax liability for vested restricted stock;

 

;
provided that notwithstanding the foregoing, any dividend or
distribution permitted by clause (v) or (vi) above shall be permitted
to be made pursuant to such clause notwithstanding the occurrence or 

 

88

 

continuance
of a Default or Event of Default so long as such dividend or distribution would
have been permitted on the date such dividend or distribution is declared and
such dividend or distribution occurs within 60 days from the date of
declaration.

 

(b)                                 The Borrower
shall not, and shall not permit any Subsidiary to, make any optional or
voluntary payment, prepayment, acquire, repurchase or redemption of, or
otherwise optionally or voluntarily defease or segregate funds with respect to,
any Specified Indebtedness, except the Borrower and its Subsidiaries may make (i) payments,
prepayments, acquisitions, repurchases or redemptions (x) from the
proceeds of (or in exchange for) Permitted Refinancing Indebtedness or (y) in
exchange for Capital Stock (other than Disqualified Capital Stock) of the
Borrower, (ii) so long as (x) no Event of Default exists or would
exist after giving effect thereto and (y) the Borrower would be in
compliance on a pro forma basis with each of the covenants set forth in Sections 8.09
and 8.10 as of the last day of the most recent quarter for which
internal financial statements are available on the date any such payment is
made, payments in respect of Specified Indebtedness in an aggregate amount
equal to the portion, if any, of the Available Amount that the Borrower elects
to apply pursuant to this Section 8.08(b)(ii); (iii) other
payments of Specified Indebtedness in an aggregate amount that, when aggregated
with the amount applied to make Restricted Payments pursuant to Section 8.08(a)(v),
does not exceed $20,000,000 during the term of this Agreement, provided
that, if, after giving pro forma effect to the making of such payment, the
Consolidated Leverage Ratio as of the last day of the most recent quarter for
which internal financial statements are available on the date such payment is
made is less than 4.5 to 1.0, such amount shall be increased to $30,000,000 and
(iv) so long as no Event of Default shall have occurred and be continuing
on the date of such payment, prepayment, acquisition, repurchase or other
defeasance or would exist upon giving effect thereto, and the Borrower would be
in compliance on a pro forma basis with each of the covenants set forth in Sections 8.09
and 8.10 as of the last day of the most recent quarter for which
internal financial statements are available on the date thereof, the Borrower
and its Subsidiaries may pay, prepay, acquire, repurchase or otherwise satisfy
any Seller Notes.

 

8.09                           Consolidated
Leverage Ratio.

 

The Borrower will not permit the Consolidated Leverage Ratio as of the
end of any fiscal quarter of the Borrower ending during a period set forth
below to exceed the ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Consolidated Leverage Ratio

  
	
  Effective Date through December 31,
  2011

  	
   

  	
  5.00:1.00

  
	
  January 1, 2012 through
  September 30, 2012

  	
   

  	
  4.50:1.00

  
	
  October 1, 2012 through
  September 30, 2013

  	
   

  	
  4.00:1.00

  
	
  October 1, 2013 and thereafter

  	
   

  	
  3.75:1.00

  

 

8.10                           Consolidated
Interest Coverage Ratio.

 

The Borrower will not permit the Consolidated Interest Coverage Ratio
as of the end of any fiscal quarter of the Borrower ending with the last day of
any fiscal quarter ending during a period set forth below to be less than the
ratio set forth below opposite such period:

 

	
  Period

  	
   

  	
  Consolidated Interest Coverage

  Ratio

  
	
  Effective Date through September 30,
  2011

  	
   

  	
  3.00:1.00

  
	
  October 1, 2011 through
  September 30, 2012

  	
   

  	
  3.25:1.00

  

 

89

 

	
  Period

  	
   

  	
  Consolidated Interest Coverage

  Ratio

  
	
  October 1, 2012 and
  thereafter

  	
   

  	
  3.50:1.00

  

 

 

8.11                           Capital
Expenditures.  The
Borrower shall not make or become legally obligated to make any Capital
Expenditure, except for (a) Capital Expenditures not exceeding, in the
aggregate for the Borrower and its Subsidiaries during each fiscal year, an
amount equal to 7.5% of the consolidated net revenues of the Borrower for the
preceding fiscal year; provided, however, that up to $15,000,000
of the maximum amount permitted as described above may, if not expended in the
fiscal year for which it is permitted above, be carried over for expenditure in
the next following fiscal year; and provided, further, if any
such amount is so carried over, it will be deemed used in the applicable
subsequent fiscal year before the amount permitted based on the amount
determined without giving effect to this proviso or the preceding proviso; and
(b) Capital Expenditures made as reinvestments of the proceeds of Dispositions
and Recovery Events as contemplated by the definition of “Net Cash Proceeds”.

 

8.12                           Swap Contracts.  The Borrower shall not, and shall not permit
any Subsidiary to, enter into any Swap Contract, other than Swap Contracts
incurred to hedge bona fide business risks and not for speculative purposes.

 

8.13                           Change in
Nature of Business.  The
Borrower shall not, and shall not permit any Subsidiary to, engage in any
material line of business outside of the healthcare industry or substantially
different from those lines of business conducted by the Borrower and its
Subsidiaries on the date hereof or any business reasonably related or
incidental thereto.

 

8.14                           Amendments of
Organization Documents.  The
Borrower shall not amend any of its Organization Documents in any manner that
would be reasonably likely to result in a Material Adverse Effect.

 

8.15                           Accounting
Changes.  The Borrower shall not make
any change in its fiscal year.

 

8.16                           Amendment, Etc.
of Related Documents. The Borrower shall not (a) amend, modify or change
in any manner any term or condition of any Related Document or give any
consent, waiver or approval thereunder, (b) waive any default under or any
breach of any term or condition of any Related Document or (c) take any
other action in connection with any Related Document that would impair the
value of the interest or rights of any Loan Party thereunder or that would
impair the rights or interests of the Agent or any Lender or (d) amend,
modify or change in any manner any term or condition of any Specified
Indebtedness, except for any refinancing, refunding, renewal or extension
thereof permitted by Section 8.05, and except, in the case of each
of clauses (a) through (d), as would not be materially
adverse to the Lenders (it being understood that changes to interest rates and
payments of consent fees shall not be deemed to be materially adverse to the
Lenders).

 

ARTICLE IX

 

EVENTS OF DEFAULT

 

9.01                           Event of
Default.  Any of the following shall
constitute an “Event of Default”:

 

(a)                                  Non-Payment.  The Borrower fails to pay (i) when and
as required to be paid herein, any amount of principal of any Loan or of any
L/C Obligation or deposit any funds as

 

90

 

Cash Collateral in respect
of L/C Obligations, or (ii) within five days after the same becomes due,
any interest, fee or any other amount payable hereunder or under any other Loan
Document; or

 

(b)                                 Representation
or Warranty.  Any
representation or warranty by any Loan Party made or deemed made herein or in
any other Loan Document, or contained in any certificate, document or financial
or other statement by any Loan Party or any Responsible Officer, furnished at
any time under this Agreement, or in or under any other Loan Document, is
incorrect in any material respect on or as of the date made or deemed made; or

 

(c)                                  Specific
Defaults.  The
Borrower fails to perform or observe any term, covenant or agreement contained
in 7.03(a), 7.04 (with respect to the Borrower), 7.11 or in any provision of
Article VIII; or

 

(d)                                 Other Defaults.  The Borrower or any other Loan Party fails to
perform or observe any other term or covenant contained in this Agreement or
any other Loan Document to which such Person is a party, and such default shall
continue unremedied for a period of 30 days after the date upon which written
notice thereof is given to the Borrower by the Agent or any Lender; or

 

(e)                                  Cross-Default.  Any Loan Party (i) fails to make any
payment in respect of any Indebtedness or Guaranty Obligation (including
Indebtedness in respect of Swap Contracts but excluding intercompany
Indebtedness), having an aggregate principal amount (including undrawn
committed or available amounts and including amounts owing to all creditors
under any combined or syndicated credit arrangement) in excess of the Threshold
Amount when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document
on the date of such failure; or (ii) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition exist, under
any agreement or instrument relating to any such Indebtedness or Guaranty
Obligation (excluding intercompany Indebtedness), and such failure continues
after the applicable grace or notice period, if any, specified in the relevant
document on the date of such failure if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause such
Indebtedness to be declared to be due and payable, or to be required to be
repurchased, prior to its stated maturity, or such Guaranty Obligation to
become payable or cash collateral in respect thereof to be demanded; or

 

(f)                                    Insolvency;
Voluntary Proceedings.  Any
Loan Party (i) ceases or fails to be solvent, or generally fails to pay,
or admits in writing its inability to pay, its debts as they become due,
subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself;
or (iv) takes any action to effectuate or authorize any of the foregoing;
or

 

(g)                                 Involuntary
Proceedings.  (i) Any
involuntary Insolvency Proceeding is commenced or filed against any Loan Party,
or any writ, judgment, warrant of attachment, execution or similar process, is
issued or levied against a substantial part of any Loan Party’s properties, and
any such proceeding or petition shall not be dismissed, or such writ, judgment,
warrant of attachment, execution or similar process shall not be released,
vacated or fully bonded within 60 days after commencement, filing or levy; (ii) any
Loan Party admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under

 

91

 

non-U.S. law) is ordered in
any Insolvency Proceeding; or (iii) any Loan Party acquiesces in the
appointment of a receiver, trustee, custodian, conservator, liquidator,
mortgagee in possession (or agent therefor), or other similar Person for itself
or a substantial portion of its property or business; or

 

(h)                                 ERISA.  (i) An ERISA Event shall occur with
respect to a Pension Plan or, to the knowledge of the Borrower, Multiemployer
Plan which has resulted or could reasonably be expected to result in liability
of the Borrower or any ERISA Affiliate under Title IV of ERISA to such Pension
Plan or Multiemployer Plan or to the PBGC in an aggregate amount for all such
Pension Plans and Multiemployer Plans in excess of the Threshold Amount; or (ii) the
Borrower or any ERISA Affiliate shall fail to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

 

(i)                                     Judgments.  (i) One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards is entered
against the Borrower or any Subsidiary thereof and known to a Responsible
Officer involving in the aggregate a liability (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents or
conditions, in excess of the Threshold Amount, or (ii) one or more
non-monetary final judgments is entered against the Borrower or any Subsidiary
that has, or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and, in either case the same shall remain
unsatisfied, unvacated and unstayed pending appeal or otherwise for a period of
30 days after the entry thereof; or

 

(j)                                     Change of
Control.  There occurs any Change of
Control; or

 

(k)                                  Invalidity of
Loan Documents.  Any Loan
Document is for any reason partially (including with respect to future
advances) or wholly revoked or invalidated, or otherwise ceases to be in full
force and effect (other than in accordance with its terms); any Loan Party (or
any Person acting on behalf of any Loan Party) contests in any manner the
validity or enforceability of any Loan Document to which it is a party or
denies that it has any further liability or obligation thereunder; any Loan
Party (or any Person acting on behalf of any Loan Party) contests in any manner
the validity, perfection or priority of any Lien on a material portion of the
Collateral purported to be covered thereby; or any Collateral Document after
delivery thereof shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority Lien (subject to
Liens permitted by Section 8.01) on a material portion of the
Collateral purported to be covered thereby.

 

9.02                           Remedies.  If any Event of Default has occurred and is
continuing, the Agent shall, at the request of, or may, with the consent of,
the Required Lenders:

 

(a)                                  declare the
Commitments of the applicable Lenders to make Loans and any obligation of the
Issuers to Issue Letters of Credit to be terminated, whereupon such Commitments
and obligation shall be terminated;

 

(b)                                 declare an
amount equal to the maximum aggregate amount that is or at any time thereafter
may become available for drawing under any outstanding Letters of Credit
(whether or not any beneficiary shall have presented, or shall be entitled at
such time to present, the drafts or other documents required to draw under such
Letters of Credit) to be immediately due and payable, and declare the unpaid
principal amount of all outstanding Loans, all interest accrued and unpaid
thereon, and all other amounts owing or payable hereunder or under any other
Loan 

 

92

 

Document to be immediately
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower;

 

(c)                                  require that
the Borrower Cash Collateralize the L/C Obligations and the Swing Line Loans
(in an amount equal to the then outstanding amount thereof); and

 

(d)                                 exercise on behalf
of itself and the Lenders all rights and remedies available to it and the
Lenders under the Loan Documents or applicable law;

 

provided that upon the
occurrence of any event specified in subsection (f) or (g) of
Section 9.01 with respect to the Borrower (or, in the case of clause (i) of
subsection (g), upon the expiration of the 60-day period mentioned
therein), any obligation of each Lender to make Loans and any obligation of
each Issuer to Issue Letters of Credit shall automatically terminate and the
unpaid principal amount of all outstanding Loans and all interest and other
amounts as aforesaid shall automatically become due and payable without further
act of the Agent, any Issuer or any Lender.

 

9.03                           Rights Not
Exclusive.  The rights
provided for in this Agreement and the other Loan Documents are cumulative and
are not exclusive of any other rights, powers, privileges or remedies provided
by law or in equity, or under any other instrument, document or agreement now
existing or hereafter arising.

 

ARTICLE X

 

THE AGENT

 

10.01                     Appointment and
Authority.  Each of the
Lenders and the Issuers hereby irrevocably appoints Bank of America to act on
its behalf as the Agent hereunder and under the other Loan Documents and
authorizes the Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Agent by the terms hereof or thereof, together
with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are
solely for the benefit of the Agent, the Lenders and the Issuers, and neither
the Borrower nor any other Loan Party shall have rights as a third party
beneficiary of any of such provisions.

 

10.02                     Rights as a
Lender.  The Person serving as the
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving
as the Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept
deposits from, lend money to, act as the financial advisor or in any other
advisory capacity for and generally engage in any kind of business with the
Borrower or any Subsidiary or other Affiliate thereof as if such Person were
not the Agent hereunder and without any duty to account therefor to the
Lenders.

 

10.03                     Exculpatory
Provisions.  The Agent
shall not have any duties or obligations except those expressly set forth
herein and in the other Loan Documents. 
Without limiting the generality of the foregoing, the Agent:

 

(a)                                  shall not be
subject to any fiduciary or other implied duties, regardless of whether a
Default or an Event of Default has occurred and is continuing;

 

(b)                                 shall not have
any duty to take any discretionary action or exercise any discretionary powers,
except discretionary rights and powers expressly contemplated hereby or by the
other

 

93

 

Loan Documents that the
Agent is required to exercise as directed in writing by the Required Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents); provided that the
Agent shall not be required to take any action that, in its opinion or the
opinion of its counsel, may expose the Agent to liability or that is contrary
to any Loan Document or applicable law; and

 

(c)                                  shall not,
except as expressly set forth herein and in the other Loan Documents, have any
duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Borrower or any of its Affiliates that is
communicated to or obtained by the Person serving as the Agent or any of its
Affiliates in any capacity.

 

The Agent shall not be liable for any action taken or not taken by it (i) with
the consent or at the request of the Required Lenders (or such other number or
percentage of the Lenders as shall be necessary, or as the Agent shall believe
in good faith shall be necessary, under the circumstances as provided in Sections 9.02
and 11.01) or (ii) in the absence of its own gross negligence or
willful misconduct.  The Agent shall be
deemed not to have knowledge of any Default or Event of Default unless and
until notice describing such Default or Event of Default is given to the Agent
by the Borrower, a Lender or an Issuer.

 

The Agent shall not be responsible for or have any duty to ascertain or
inquire into (i) any statement, warranty or representation made in or in
connection with this Agreement or any other Loan Document; (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith; (iii) the performance
or observance of any of the covenants, agreements or other terms or conditions
set forth herein or therein or the occurrence of any Default or Event of
Default; (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement, any other Loan Document or any other agreement, instrument
or document; or (v) the satisfaction of any condition set forth in Article V
or elsewhere herein, other than to confirm receipt of items expressly required
to be delivered to the Agent.

 

10.04                     Reliance by
Agent.  The Agent shall be entitled to
rely upon, and shall not incur any liability for relying upon, any notice,
request, certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or
other distribution) believed by it to be genuine and to have been signed, sent
or otherwise authenticated by the proper Person.  The Agent also may rely upon any statement
made to it orally or by telephone and believed by it to have been made by the
proper Person, and shall not incur any liability for relying thereon.  In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or an Issuer,
the Agent may presume that such condition is satisfactory to such Lender or
such Issuer unless the Agent shall have received notice to the contrary from
such Lender or such Issuer prior to the making of such Loan or the issuance of
such Letter of Credit.  The Agent may
consult with legal counsel (who may be counsel for the Borrower), independent
accountants and other experts selected by it, and shall not be liable for any
action taken or not taken by it in accordance with the advice of any such
counsel, accountants or experts.

 

10.05                     Delegation of
Duties.  The Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub agents appointed by the
Agent.  The Agent and any such sub agent
may perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. 
The exculpatory provisions of this Article shall apply to any such
sub agent and to the Related Parties of the Agent and any such sub agent, and
shall apply to their respective activities in connection with the syndication
of the credit facilities provided for herein as well as activities as Agent.

 

94

 

10.06                     Resignation of
Agent.  The Agent may at any time give
notice of its resignation to the Lenders, the Issuers and the Borrower.  Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed and which
consent shall not be required during the existence of an Event of Default), to
appoint a successor, which shall be a bank with an office in the United States,
or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so
appointed by the Required Lenders and consented to by the Borrower (such
consent not to be unreasonably withheld or delayed) and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may on behalf of the Lenders and the
Issuers, appoint a successor Agent meeting the qualifications set forth above; provided
that if the Agent shall notify the Borrower and the Lenders that no qualifying
Person has accepted such appointment, then such resignation shall nonetheless
become effective in accordance with such notice and (1) the retiring Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents and (2) all payments, communications and
determinations provided to be made by, to or through the Agent shall instead be
made by or to each Lender and each Issuer directly, until such time as the
Required Lenders appoint a successor Agent as provided for above in this
Section.  Upon the acceptance of a
successor’s appointment as Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Agent, and the retiring Agent shall be discharged from
all of its duties and obligations hereunder or under the other Loan Documents
(if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor.  After the retiring Agent’s resignation
hereunder and under the other Loan Documents, the provisions of this Article and
Section 11.04 shall continue in effect for the benefit of such
retiring Agent, its sub agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while the retiring
Agent was acting as Agent.

 

Any resignation by Bank of America as Agent pursuant to this Section shall
also constitute its resignation as an Issuer and Swing Line Lender.  Upon the acceptance of a successor’s
appointment as Agent hereunder, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring Issuer and Swing Line Lender, (b) the retiring Issuer and Swing
Line Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (c) the
successor Issuer shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring Issuer to effectively assume the
obligations of the retiring Issuer with respect to such Letters of Credit.

 

10.07                     Non-Reliance on
Agent and Other Lenders.  Each
Lender and each Issuer acknowledges that it has, independently and without
reliance upon the Agent or any other Lender or any of their Related Parties and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement.  Each Lender and each Issuer also acknowledges
that it will, independently and without reliance upon the Agent or any other
Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make
its own decisions in taking or not taking action under or based upon this
Agreement, any other Loan Document or any related agreement or any document
furnished hereunder or thereunder.

 

10.08                     No Other Duties, Etc.  Anything herein to the contrary
notwithstanding, no Person listed on the cover page hereof or elsewhere
herein as a Joint Lead Arranger, a Joint Bookrunner, the Syndication Agent or a
Co-Documentation Agent shall have any powers, duties or responsibilities under
this Agreement or any of the other Loan Documents, except in its capacity, as
applicable, as a Lender or an Issuer hereunder.

 

95

 

10.09                     Agent May File
Proofs of Claim.  In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Agent (irrespective of whether the
principal of any Loan or L/C Obligation shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise

 

(a)                                  to file and
prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Loans, L/C Obligations and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders, the Issuers and the Agent
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Lenders, the Issuers and the Agent and their respective
agents and counsel and all other amounts due the Lenders, the Issuers and the
Agent under Sections 2.12, 3.08 and 11.04) allowed in
such judicial proceeding; and

 

(b)                                 to collect and
receive any monies or other property payable or deliverable on any such claims
and to distribute the same;

 

and
any custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender and each Issuer to make such payments to the Agent and, if the Agent
shall consent to the making of such payments directly to the Lenders and the
Issuers, to pay to the Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Agent and its agents and counsel,
and any other amounts due the Agent under Sections 2.12 and 11.04.

 

Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender or any
Issuer any plan of reorganization, arrangement, adjustment or composition
affecting the Obligations or the rights of any Lender or to authorize the Agent
to vote in respect of the claim of any Lender in any such proceeding.

 

10.10                     Collateral and
Guaranty Matters.  The Agent
shall, and the Lenders and the Issuers irrevocably authorize the Agent to, at
the sole cost and expense of the Borrower:

 

(a)                                  release any
Lien on any property granted to or held by the Agent under any Loan Document (i) upon
termination of the Revolving Commitments and payment in full in cash of all
Obligations (other than contingent indemnification obligations, and any
Obligations arising under any Rate Swap Document or Cash Management Agreement)
and the expiration or termination of all Letters of Credit (other than
Supported Letters of Credit), (ii) that is Disposed of or to be Disposed
of as part of or in connection with any Disposition or Investment permitted
hereunder or under any other Loan Document or (iii) subject to Section 11.01,
if approved, authorized or ratified in writing by the Required Lenders;

 

(b)                                 subordinate any
Lien on any property granted to or held by the Agent under any Loan Document to
the holder of any Lien on such property that is permitted by Section 8.01(i);
and

 

(c)                                  release any
Guarantor from its obligations under the Security Agreement if, after giving
effect to such release, the Borrower is in compliance with Section 7.12.

 

96

 

Upon request by the Agent at any time, the Required Lenders will
confirm in writing the Agent’s authority to release or subordinate its interest
in particular types or items of property, or to release any Guarantor from its
obligations under the Security Agreement pursuant to this Section 10.10.

 

10.11                     Withholding Tax.

 

(a)                                  (i)  If
any Lender is a “foreign corporation, partnership or trust” within the meaning
of the Code (a “Foreign Lender”) and such Lender claims exemption from,
or a reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code, such Lender agrees with and in favor of the Agent and the Borrower, to
deliver to the Agent and the Borrower:

 

(A)                              if such Lender
claims an exemption from, or a reduction of, withholding tax under a United
States tax treaty, two properly completed and executed copies of IRS Form W-8BEN
before the payment of any interest in the first calendar year and before the
payment of any interest in each third succeeding calendar year during which
interest may be paid under this Agreement;

 

(B)                                if such Lender
claims that interest paid under this Agreement is exempt from United States
withholding tax because it is effectively connected with a United States trade
or business of such Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement; and

 

(C)                                such other form
or forms as may be required under the Code or other laws of the United States
as a condition to exemption from, or reduction of, United States withholding
tax.

 

Each
such Lender agrees to promptly notify the Agent and the Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.

 

(ii)                                  If any Foreign
Lender claims exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of
“portfolio interest”, such Lender agrees with and in favor of the Agent and the
Borrower to deliver to the Agent and the Borrower a Form W-8, or any
subsequent versions thereof or successors thereto (and, if such Lender delivers
a Form W-8, a certificate representing that such 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 Borrower and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)).

 

(b)                                 If any Lender
claims exemption from, or reduction of, withholding tax under a United States
tax treaty by providing IRS Form W-8BEN and such Lender sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of the Borrower owing to such Lender, such Lender agrees to notify
the Agent of the percentage amount in which it is no longer the beneficial
owner of such Obligations.  To the extent
of such percentage amount, the Agent will treat such Lender’s IRS Form W-8BEN
as no longer valid.

 

(c)                                  If any Lender
claiming exemption from United States withholding tax by filing IRS Form W-8ECI
with the Agent sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of the Borrower owing to such Lender,
such Lender agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the
Code.

 

97

 

(d)                                 If any Lender
is entitled to a reduction in the applicable withholding tax, the Agent may
withhold from any interest payment to such Lender an amount equivalent to the
applicable withholding tax after taking into account such reduction.  However, if the forms or other documentation
required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest payment
to such Lender not providing such forms or other documentation an amount
equivalent to the applicable withholding tax imposed by Sections 1441 and
1442 of the Code, without reduction.

 

(e)                                  If the IRS or
any other Governmental Authority of the United States or other jurisdiction
asserts a claim that the 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 Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly,
by the Agent as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to the
Agent under this Section, together with all costs and expenses (including
Attorney Costs).  The obligation of the
Lenders under this subsection shall survive the payment of all Obligations and
the resignation or replacement of the Agent.

 

10.12                     Cash Management
Agreements and Rate Swap Documents.  No Secured Creditor (in its capacity as a
party to a Cash Management Agreement and/or Rate Swap Document) that obtains
the benefits of the remedies and application of proceeds provisions contained
in any Loan Document by virtue of the provisions hereof shall have any right to
notice of any action or to consent to, direct or object to any action hereunder
or under any other Loan Document or otherwise in respect of the Collateral
(including the release or impairment of any Collateral) other than in its
capacity as a Lender and, in such case, only to the extent expressly provided
in the Loan Documents.  Notwithstanding
any other provision of this Article X to the contrary, the Agent
shall not be required to verify the payment of, or that other satisfactory
arrangements have been made with respect to, Obligations arising under Cash
Management Agreements and Rate Swap Documents unless the Agent has received
written notice of such Obligations, together with such supporting documentation
as the Agent may request, from the applicable Lender (or Affiliate thereof)
that is party to such Cash Management Agreement or Rate Swap Document, as
applicable and as the case may be.

 

ARTICLE XI

 

MISCELLANEOUS

 

11.01                     Amendments and
Waivers.  Except as expressly provided
elsewhere in any Loan Document, no amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower or any other Loan Party therefrom, shall be effective
unless the same shall be in writing and signed by the Required Lenders (or by
the Agent at the written request of the Required Lenders) and the Borrower and
acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that:

 

(a)                                  no such waiver,
amendment, or consent shall, unless in writing and signed by each Lender
directly affected thereby and the Borrower and acknowledged by the Agent, do
any of the following:

 

(i)                                     increase or
extend the Commitment of such Lender (or reinstate any Commitment of such
Lender terminated pursuant to Section 9.02), except as otherwise
provided in Sections 2.17 and 2.18 with respect to increases
or extensions of the Commitments;

 

98

 

(ii)                                  postpone or
delay any date fixed by this Agreement or any other Loan Document for any
payment of principal, interest, fees, reimbursement obligations with respect to
Letters of Credit or other amounts due to such Lender hereunder or under any
other Loan Document, including any mandatory prepayment required pursuant to Section 2.09(a),
or reduce any scheduled or mandatory payment of principal of any Loan;

 

(iii)                               reduce or
forgive the principal of, or the rate of interest specified herein on any Loan,
any reimbursement obligations with respect to Letters of Credit or (subject to clause (viii) of
the proviso following clause (vii) below) any fees or other
amounts payable hereunder or under any other Loan Document;

 

(iv)                              reduce the
percentage specified in the definition of “Required Lenders” or the definition
of “Total Percentage”;

 

(v)                                 amend this
Section, Section 2.16 or any provision herein providing for consent
or other action by all Lenders;

 

(vi)                              release all or
substantially all of the Guarantors from their obligations under the Security
Agreement (other than pursuant to a transaction expressly permitted hereunder)
or amend or consent to any waiver of Section 7.12 in a manner that
would adversely affect any Lender; or

 

(vii)                           release all or
substantially all of the collateral subject to the Collateral Documents;

 

and,
provided, further, that (i) no amendment, waiver or consent
shall affect the rights or duties of any Issuer under this Agreement or any
L/C-Related Document relating to any Letter of Credit Issued or to be Issued by
it without the written consent of such Issuer; (ii) no amendment, waiver
or consent shall affect the rights or duties of the Agent under this Agreement
or any other Loan Document without the written consent of the Agent; (iii) no
amendment, waiver or consent shall affect the rights or duties of the Swing
Line Lender under this Agreement or any other Loan Document without the written
consent of the Swing Line Lender; (iv) no amendment, waiver or consent
shall (A) change the definition of “Supported Letter of Credit” or (B) change
the provisions of Section 3.07 without, in each case, the written
consent of the Required Revolving Lenders; (v) no amendment, waiver or
consent shall obligate any Revolving Lender to make a Revolving Loan during the
existence of an Event of Default without the written consent of the Required
Revolving Lenders; (vi) no change, directly or indirectly, in the
definition of “Required Revolving Lenders”, “Required Term Lenders”, “Required
Term B Lenders” or “Required Incremental Term Lenders” shall be effective
unless in writing and signed by each Revolving Lender, each Term Lender (in the
case of any amendment to “Required Term Lenders”) or each Term Lender under the
applicable Term Facility (in the case of any amendment to either “Required Term
B Lenders” or “Required Incremental Term Lenders”), respectively; (vii) no
amendment, waiver or consent shall modify the allocation of any payment between
the Classes of Term Loans without the consent of the Required Term Lenders (in
making such calculation, disregarding for purposes of this clause (vii) any
Term Loans other than any Class which is to receive a lesser payment); and
(viii) any Rate Swap Document, any Cash Management Agreement and the Fee
Letter may be amended, or rights or privileges thereunder waived, in a writing
executed by the parties thereto. 
Notwithstanding the foregoing, upon the execution and delivery of all
documentation required by Section 2.17 or 2.18, as
applicable, to be delivered in connection with an Extension Amendment or an
increase to the Term Commitments, as the case may be, this Agreement and each
other applicable Loan Document (if any) shall be deemed amended without further
action by any party to reflect, as applicable, the new Lenders and their new
Commitments and any increase or extension in the Commitment or Loans of any
existing Lender.

 

99

 

Notwithstanding anything to the contrary herein, no Defaulting Lender
shall have any right to approve or disapprove any amendment, waiver or consent
hereunder (and any amendment, waiver or consent which by its terms requires the
consent of all Lenders or each affected Lender may be effected with the consent
of the applicable Lenders other than Defaulting Lenders), except that (x) the
Commitment of any Defaulting Lender may not be increased or extended without
the consent of such Lender and (y) any waiver, amendment or modification
requiring the consent of all Lenders or each affected Lender that by its terms
affects any Defaulting Lender more adversely (other than as a result of the
relative size of its Commitment) than other affected Lenders shall require the
consent of such Defaulting Lender.

 

Notwithstanding any provision herein to the contrary, and in each case
subject to Section 2.18, this Agreement may be amended with the
written consent of the Agent and the Borrower (in each case, such consent not
to be unreasonably withheld or delayed) (i) to add one or more additional
term loan facilities to this Agreement (and to make any necessary or desirable
changes to implement such additional term loan facilities) and to permit the
extensions of credit and all related obligations and liabilities arising in
connection therewith from time to time outstanding to share ratably (or on a
basis subordinated to the existing facilities hereunder) in the benefits of
this Agreement and the other Loan Documents with the obligations and
liabilities from time to time outstanding in respect of the existing facilities
hereunder, and (ii) in connection with the foregoing, to permit, as deemed
appropriate by the Agent and approved by the Borrower, the Lenders providing
such additional credit facilities to participate in any required vote or action
required to be approved by the Required Lenders or by any other number,
percentage or class of Lenders hereunder.

 

If any Lender does not consent to a proposed amendment, waiver, consent
or release with respect to any Loan Document that requires the consent of each
Lender or each Lender directly affected thereby and that has been approved by
the Required Lenders, the Borrower may replace such non-consenting Lender in
accordance with Section 11.07.

 

11.02                     Notices.

 

(a)                                  Except as
otherwise provided herein, all notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by (i) facsimile transmission, provided
that any matter transmitted by the Borrower by facsimile (A) shall be
immediately confirmed by a telephone call to the recipient at the number
specified on Schedule 11.02 (or, in the case of a Lender other than Bank
of America, in such Lender’s Administrative Questionnaire), and (B) shall
be followed promptly by delivery of a hard copy original thereof, and (ii) electronic
transmission, as more fully set forth in clause (c) below) and
mailed, faxed or delivered, to the address or facsimile number specified for
notices on Schedule 11.02 (or, in the case of a Lender other than Bank
of America, in such Lender’s Administrative Questionnaire then in effect for
the delivery of notices that may contain material non-public information
relating to the Borrower); or, as directed to the Borrower or the Agent, to
such other address as shall be designated by such party in a written notice to
the other parties, and as directed to any other party, at such other address as
shall be designated by such party in a written notice to the Borrower and the
Agent.

 

(b)                                 All such
notices, requests and communications shall, when transmitted by overnight
delivery, or faxed, be effective when delivered for overnight (next-day)
delivery, or transmitted in legible form by facsimile machine, respectively, or
if mailed or delivered, upon delivery; provided that notices pursuant to
Article II, III or X to the Agent shall not be
effective until actually received by the Agent, and notices pursuant to Article III
to any Issuer shall not be effective until actually received by such Issuer at
the address specified on Schedule 11.02 (or, in the case of an Issuer
other than Bank of America, in such Issuer’s Administrative Questionnaire); and
provided, further, that if such notice or other communication 

 

100

 

is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at
the opening of business on the next business day for the recipient.

 

(c)                                  Notices and
other communications to the Lenders and the Issuers hereunder may be delivered
or furnished by electronic communication (including e-mail and Internet or
intranet websites, but only by e-mail as to any electronic communications to
any Issuer) pursuant to procedures approved by the Agent, provided that
the foregoing shall not apply to notices to any Lender or Issuer pursuant to Article II
if such Lender or Issuer, as applicable, has notified the Agent that it is
incapable of receiving notices under such Article by electronic
communication.  The Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it; provided
that approval of such procedures may be limited to particular notices or
communications.  Unless the Agent
otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement); provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or
communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail
address as described in the foregoing clause (i) of
notification that such notice or communication is available and identifying the
website address therefor.

 

(d)                                 Any agreement
of the Agent and the Lenders herein to receive certain notices by telephone,
facsimile or electronic transmission is solely for the convenience and at the
request of the Borrower.  The Agent and
the Lenders shall be entitled to rely on the authority of any Person
identifying himself or herself as, and reasonably appearing to be, a Person
authorized by the Borrower to give such notice and the Agent and the Lenders
shall not have any liability to the Borrower or other Person on account of any
action taken or not taken by the Agent or the Lenders in good faith in reliance
upon such telephonic, facsimile or electronic notice.  The obligation of the Borrower to repay the
Loans and L/C Obligations shall not be affected in any way or to any extent by
any failure by the Agent and the Lenders to receive written confirmation of any
telephonic, facsimile or electronic notice or the receipt by the Agent and the
Lenders of a confirmation which is at variance with the terms understood by the
Agent and the Lenders to be contained in the telephonic, facsimile or
electronic notice.

 

11.03                     No Waiver;
Cumulative Remedies.  No failure
to exercise and no delay in exercising, on the part of the Agent or any Lender,
any right, remedy, power or privilege hereunder, 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.

 

11.04                     Costs and
Expenses; Indemnification.

 

(a)                                  The Borrower
shall pay (i) all reasonable and documented out of pocket expenses
incurred by the Agent and its Affiliates (including the reasonable fees,
charges and disbursements of counsel for the Agent), in connection with the
syndication of the credit facilities provided for herein, the preparation, due
diligence, negotiation, execution and delivery of this Agreement and the other
Loan Documents or any amendments, modifications or waivers of the provisions
hereof or thereof (whether or not the transactions contemplated hereby or
thereby shall be consummated); (ii) all reasonable out of pocket expenses
incurred by the Issuers in connection with the issuance, amendment, renewal or
extension of any Letter of Credit or any demand for payment thereunder; and (iii) all
out of pocket expenses incurred by the Agent, any Lender or any Issuer
(including the fees, charges and disbursements of one counsel for the 

 

101

 

Agent, the Lenders and the Issuers in the
aggregate), in connection with the enforcement or protection of their
respective rights during the existence of any Default or Event of Default (A) in
connection with this Agreement and the other Loan Documents, including their
rights under this Section, or (B) in connection with the Loans made or
Letters of Credit issued hereunder, including all such out of pocket expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans or Letters of Credit.

 

(b)                                 The Borrower
shall indemnify the Agent, each Agent-Related Person, each Joint Lead Arranger,
each Lender, each Issuing Bank and each of the Related Parties of such Person
(each such Person being called an “Indemnitee”) against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses (including the fees, charges and disbursements of one counsel
for all Indemnitees (except to the extent that separate counsel would be
required as the result of any conflict of interest)), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower or any other Loan Party arising out of, or awarded against any
Indemnitee, promptly following written demand therefor setting forth in
reasonable detail a description of such claims, damages, losses, liabilities
and expenses, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith) (i) the
execution or delivery of this Agreement, any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, including the
Transaction (including, without limitation, any litigation or proceeding
brought by the Acquired Business, its stockholders or Affiliates) or, in the
case of the Agent (and any sub-agent thereof) and its Related Parties only, the
administration of this Agreement and the other Loan Documents); (ii) any
Loan or Letter of Credit or the use or proposed use of the proceeds therefrom
(including any refusal by an Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit but excluding,
solely as between the Borrower and such Issuer and without affecting the
liability of the Borrower to any other Indemnitee, any action or omission for
which such Issuer has agreed in writing it is not entitled to indemnification
hereunder); (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Claim related in any way to the Borrower
or any of its Subsidiaries; or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not,
as to any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (A) arise from disputes between
Indemnitees not in the Indemnitees’ capacities as Joint Lead Arrangers or
Agent, that does not arise or result from any act or omission by the Borrower
or any Subsidiary thereof; (B) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of such Indemnitee; or (C) result
from a claim brought by the Borrower or any other Loan Party against an Indemnitee
for breach in bad faith of such Indemnitee’s obligations hereunder or under any
other Loan Document, if the Borrower or such Loan Party has obtained a final
and nonappealable judgment in its favor on such claim as determined by a court
of competent jurisdiction.  In the case
of any claim, litigation, investigation or proceeding (any of the foregoing, a “Proceeding”)
to which the indemnity in this Section applies, such indemnity shall be
effective whether or not such Proceeding is brought by the Borrower, its equity
holders or creditors, whether or not an Indemnitee is otherwise a party thereto
and whether or not any aspect of the Transaction is consummated.  The Borrower shall not, without the prior
written consent of an Indemnitee (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened Proceeding
against an Indemnitee in respect of which indemnity could have been sought
under this Section 11.04(b) by such Indemnitee unless such
settlement (i) includes an unconditional release of such 

 

102

 

Indemnitee from all liability or claims that are the
subject matter of such Proceeding and (ii) does not include any statement
as to any admission.

 

(c)                                  To the extent that
the Borrower for any reason fails to indefeasibly pay any amount required under
subsection (a) or (b) to be paid by it to any
Agent-Related Person or any Related Party of such Agent-Related Person, each
Lender severally agrees to pay to such Agent-Related Person such Lender’s Total
Percentage (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount, provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such
Agent-Related Person in its capacity as such, or against any Related Party
acting for such Agent-Related Person in connection with such capacity.  The obligations of the Lenders under this subsection (c) (i) are
subject to the provisions of Section 2.16 and (ii) shall not
in any way limit the obligations of the Borrower under this Section 11.04.

 

(d)                                 To the fullest
extent permitted by applicable law, the Borrower shall not assert, and hereby
waives, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. 
No Indemnitee shall be liable for any damages arising from the use by
third parties of any information or other materials obtained through IntraLinks
or other similar information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby
or thereby, other than for direct, actual damages resulting from the gross
negligence or willful misconduct of such Indemnitee as determined by a final,
non-appealable judgment of a court of competent jurisdiction.

 

(e)                                  The obligations
in this Section shall survive payment of all other Obligations.  At the election of any Indemnitee, the
Borrower shall defend such Indemnitee using legal counsel satisfactory to such
Indemnitee in such Person’s sole discretion, at the sole cost and expense of
the Borrower.  All amounts owing under
this Section shall be paid within 30 days after demand (which demand shall
be accompanied by a statement from the applicable Indemnitee setting forth such
amounts in reasonable detail).

 

11.05                     Marshalling;
Payments Set Aside.  Neither the
Agent nor the Lenders shall be under any obligation to marshal any assets in
favor of the Borrower or any other Person or against or in payment of any or
all of the Obligations.  To the extent
that the Borrower makes a payment to the Agent or the Lenders, or the Agent or
the Lenders exercise their right of set-off, and such payment or the proceeds
of such set-off or any part thereof are subsequently invalidated, declared to
be fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Agent or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
Insolvency Proceeding or otherwise, then (a) to the extent of such
recovery the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such set-off had not occurred, and (b) each Lender
severally agrees to pay to the Agent upon demand its applicable Percentage of
any amount so recovered from or repaid by the Agent.

 

11.06                     Successors and
Assigns.  The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns, except that the Borrower may not
assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of the Agent and each Lender.

 

103

 

11.07                     Assignments,
Participations, Etc.

 

(a)                                  Assignments by
Lenders.  Any Lender may at any time
assign to one or more Eligible Assignees (each an “Assignee”) all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment(s) and the Loans (including for purposes of this
Section 11.07(a), participations in L/C Obligations and in Swing
Line Loans) at the time owing to it); provided that any such assignment
shall be subject to the following conditions:

 

(i)                                     Minimum Amounts.

 

(A)                              in the case of (1) an
assignment of the entire remaining amount of the assigning Lender’s Loans of a
particular Class at the time owing to it and the related Commitment (if
any) or (2) an assignment to an Affiliate of a Lender, no minimum amount
need be assigned; and

 

(B)                                in any case not
described in clause (A) above, the aggregate amount of the
Commitment (which for this purpose includes Loans outstanding thereunder) or,
if the Commitment is not then in effect, the principal outstanding balance of
the Loans of the assigning Lender subject to each such assignment, determined
as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Agent or, if “Trade Date” is specified in the Assignment and
Assumption, as of the Trade Date, shall not be less than (1) $5,000,000,
in the case of any assignment of Revolving Loans and/or Revolving Commitments
or (2) $1,000,000, in the case of any assignment in respect of Term Loans
and/or Term Commitments, unless each of the Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower otherwise consents (each
such consent not to be unreasonably withheld or delayed); provided that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee (or
to an Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount has
been met;

 

(ii)                                  Proportionate
Amounts.  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 with respect to the Loans or the
Commitment assigned, except that this clause (ii) shall not
(A) apply to the Swing Line Lender’s rights and obligations in respect of
Swing Line Loans or (B) prohibit any Lender from assigning all or a
portion of its rights and obligations among the separate credit facilities
hereunder on a non-pro rata basis;

 

(iii)                               Required
Consents.  No consent
shall be required for any assignment except to the extent required by clause (i)(B) above
and, in addition:

 

(A)                              the consent of
the Borrower (such consent not to be unreasonably withheld or delayed) shall be
required unless (1) an Event of Default has occurred and is continuing at the
time of such assignment or (2) such assignment is to a Lender or an
Affiliate of the assigning Lender or an Approved Fund; provided, that if
the Borrower fails to respond to a request for a consent to the assignment
within ten Business Days following the date such request is received by the
Borrower, then the Borrower shall be deemed to have consented to such
assignment;

 

(B)                                the consent of
the Agent (such consent not to be unreasonably withheld or delayed) shall be
required for assignments in respect of (i) any Term Commitment or
Revolving Commitment if such assignment is to a Person that is not a Lender
with a Commitment in respect of the applicable facility, an Affiliate of such
Lender or an Approved Fund with respect to such Lender or (ii) any Term Loan
to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund;
and

 

104

 

(C)           the consent of each Issuer and the Swing Line Lender (such
consents not to be unreasonably withheld or delayed) shall be required for any
assignment in respect of Revolving Loans and/or Revolving Commitments to an
Assignee other than a Revolving Lender.

 

(iv)          Assignment and Assumption.  The parties to each assignment shall execute
and deliver to the Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; provided that the Agent may,
in its sole discretion, elect to waive such processing and recordation fee in
the case of any assignment.  The
Assignee, if it shall not be a Lender, shall deliver to the Agent an
Administrative Questionnaire.

 

(v)           No Assignment to Certain Persons.  No such assignment shall be made (A) to
the Borrower or any Affiliate (other than an Affiliated Debt Fund) or
Subsidiary of the Borrower or (B) to any Defaulting Lender or any of its
Subsidiaries (except by the Defaulting Lender itself), or any Person who, upon
becoming a Lender hereunder, would constitute any of the foregoing Persons
described in this clause (B).

 

(vi)          No Assignment to Natural Persons.  No such assignment shall be made to a natural
person.

 

(vii)         Certain Additional Payments.  In connection with any assignment of rights
and obligations of any Defaulting Lender hereunder, no such assignment shall be
effective unless and until, in addition to the other conditions thereto set
forth herein, the parties to the assignment shall make such additional payments
to the Agent in an aggregate amount sufficient, upon distribution thereof as
appropriate (which may be outright payment, purchases by the assignee of
participations or subparticipations, or other compensating actions, including
funding, with the consent of the Borrower and the Agent, the applicable pro
rata share of Loans previously requested but not funded by the Defaulting
Lender, to each of which the applicable assignee and assignor hereby
irrevocably consent), to (x) pay and satisfy in full all payment
liabilities then owed by such Defaulting Lender to the Agent or any Lender
hereunder (and interest accrued thereon) and (y) acquire (and fund as
appropriate) its full pro rata share of all Loans and participations in Letters
of Credit and Swing Line Loans in accordance with its Applicable
Percentage.  Notwithstanding the
foregoing, in the event that any assignment of rights and obligations of any
Defaulting Lender hereunder shall become effective under applicable law without
compliance with the provisions of this paragraph, then the assignee of such
interest shall be deemed to be a Defaulting Lender for all purposes of this
Agreement until such compliance occurs.

 

Subject
to acceptance and recording thereof by the Agent pursuant to subsection (b) below,
from and after the effective date specified in each Assignment and Assumption,
the Assignee thereunder shall be a party to this Agreement and, to the extent
of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption, be released from its obligations under this Agreement (and, in the
case of an Assignment and Assumption covering all 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 4.01,
4.03, 4.04 and 11.04 with respect to facts and
circumstances occurring prior to the effective date of such assignment).  Upon request, the Borrower (at its expense)
shall execute and deliver a Note to the Assignee.  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection 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 subsection (c) below.

 

105

 

(b)           Register.  The Agent, acting solely for this purpose as
an agent of the Borrower (and such agency being solely for tax purposes), shall
maintain at the Agent’s Payment Office a copy of each Assignment and Assumption
delivered to it and a register for the recordation of the names and addresses
of the Lenders, and the Commitments of, and principal amounts of the Loans and
L/C Obligations 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 Borrower, the Agent 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.  In addition, the Agent shall maintain on the
Register information regarding the designation, and revocation of designation,
of any Lender as a Defaulting Lender. 
The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.

 

(c)           Participations.  Any Lender may at any time, without the
consent of, or notice to, the Borrower or the Agent, sell participations to any
Person (other than a natural person, a Defaulting Lender, the Borrower or any
Affiliate or Subsidiary of the Borrower) (each, a “Participant”) in all
or a portion of such Lender’s rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans (including such
Lender’s participations in L/C Obligations and/or Swing Line Loans) owing to
it); provided that (i) such Lender’s obligations under this
Agreement shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations; and (iii) the Borrower, the Agent, the Lenders and the Issuer
shall continue to deal solely and directly with such Lender in connection with
such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; provided that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, waiver or other
modification described in the first proviso to Section 11.01 that
affects such Participant.  Subject to subsection (d) below,
the Borrower agrees that each Participant shall be entitled to the benefits of Sections 4.01
and 4.03 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 11.07(a).  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.09
as though it were a Lender, provided such Participant agrees to be
subject to Section 2.16 as though it were a Lender.  Each Lender that sells a participating
interest under this clause (c) shall, as agent of the Borrower
solely for the purposes of this clause (c), record in book entries
maintained by such Lender the name and the amount of the participating interest
of each Participant entitled to receive payments in respect of such
participating interests.

 

(d)           Limitations
upon Participant Rights.  A
Participant shall not be entitled to receive any greater payment under Section 4.01
or 4.03 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.01
unless the Borrower is notified of the participation sold to such Participant
and such Participant agrees, for the benefit of the Borrower, to comply with Section 10.11
as though it were a Lender.

 

(e)           Certain
Pledges.  Any Lender may, without the
consent of the Agent or the Borrower, at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (including
under its Note, if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or Assignee for such
Lender as a party hereto.

 

106

 

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

 

(g)           Resignation
as an Issuer or Swing Line Lender after Assignment.  Notwithstanding anything to the contrary
contained herein, if at any time any Revolving Lender acting as an Issuer or
the Swing Line Lender assigns all of its Revolving Commitment and Revolving
Loans pursuant to subsection (a) above, such Person may, as
applicable, (i) upon 30 days’ notice to the Borrower, the Lenders and the
Agent, resign as an Issuer and/or (ii) upon 30 days’ notice to the
Borrower and the Agent, resign as the Swing Line Lender.  In the event of any such resignation of an
Issuer or the Swing Line Lender, the Borrower shall be entitled to appoint from
among the Revolving Lenders (with the consent of such appointee) a successor
Issuer or Swing Line Lender hereunder, as applicable; provided that no
failure by the Borrower to appoint any such successor shall affect the resignation
of such Person as an Issuer or as the Swing Line Lender, as the case may
be.  If a Person resigns as an Issuer, it
shall retain all the rights, powers, privileges and duties of an Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as an Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans or
fund risk participations in unreimbursed amounts under Letters of Credit pursuant
to Section 3.03).  If a
Person resigns as the Swing Line Lender, it shall retain all the rights of the
Swing Line Lender provided for hereunder with respect to Swing Line Loans made
by it and outstanding as of the effective date of such resignation, including
the right to require the Lenders to make Base Rate Loans or fund risk
participations in outstanding Swing Line Loans pursuant to Section 2.06(c).  Upon the appointment of a successor Issuer, (a) such
successor Issuer shall succeed to and become vested with all of the rights,
powers, privileges and duties of the retiring Issuer and (b) such
successor Issuer shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other
arrangements satisfactory to the retiring Issuer to effectively assume the
obligations of such retiring Issuer with respect to such Letters of
Credit.  Upon the appointment of a
successor Swing Line Lender, such successor shall succeed to and become vested
with all of the rights, powers, privileges and duties of the retiring Swing
Line Lender.

 

(h)           Special
Purpose Funding Vehicles. 
Notwithstanding anything to the contrary contained herein, any Lender (a
“Granting Lender”) may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Agent and the Borrower (an “SPC”) the option to provide all
or any part of any Loan that such Granting Lender is obligated to make pursuant
to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Loan, and (ii) if an SPC
elects not to exercise such option or otherwise fails to make all or any part
of such Loan, the Granting Lender shall be obligated to make such Loan pursuant
to the terms hereof; provided that nothing contained hereing shall make any SPC
a “Lender” for purposes of this Agreement, obligate the Borrower or any other
Loan Party to deal with such SPC directly, obligate the Borrower or any other
Loan Party to any greater extent than they were obligated to the Granting
Lender or increase costs or expenses of the Borrower or any other Loan
Party.  Each party hereto hereby agrees
that (i) each SPC shall be entitled to the benefits of Sections 4.01
and 4.03 to the same extent as a Participant (as set forth above), (ii) no
SPC shall be liable for any indemnity or similar payment obligation under this
Agreement for which a Lender would be liable, and (iii) the Granting
Lender shall for all purposes, including the approval of any amendment, waiver
or other modification of any provision of any Loan Document, remain the lender
of record hereunder.  The making of a
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if, such Loan were made by such Granting Lender.  In

 

107

 

furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other senior debt of any SPC, it will
not institute against, or join any other Person in instituting against, such
SPC any bankruptcy, reorganization, arrangement, insolvency, or liquidation
proceeding under the laws of the United States or any State thereof.  Notwithstanding anything to the contrary
contained herein, any SPC may (i) with notice to, but without prior
consent of the Borrower and the Agent and with the payment of a processing fee
in the amount of $3,500 (which processing fee may be waived by the Agent in its
sole discretion), assign all or any portion of its right to receive payment
with respect to any Loan to the Granting Lender and (ii) disclose on a
confidential basis any non-public information relating to its funding of Loans
to any rating agency, commercial paper dealer or provider of any surety or
guarantee or credit or liquidity enhancement to such SPC.

 

11.08       Confidentiality.  Each Lender agrees to maintain the
confidentiality of all information provided to it by or on behalf of the
Borrower or any Subsidiary thereof, or by the Agent on the Borrower’s or such
Subsidiary’s behalf, under this Agreement or any other Loan Document, and
neither it nor any of its Affiliates shall use any such information other than
in connection with or in enforcement of this Agreement and the other Loan
Documents or in connection with other business now or hereafter existing or
contemplated with the Borrower or any Subsidiary thereof; except to the extent
such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Lender or its Affiliates, or (ii) was
or becomes available on a non-confidential basis from a source other than the
Borrower or a Subsidiary thereof, provided that such source is not bound
by a confidentiality agreement with the Borrower known to the Lender; provided
that any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which the Lender
is subject or in connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection
with any litigation or proceeding involving the Borrower to which the Agent,
any Lender or their respective Affiliates may be party; (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (F) to such Lender’s independent auditors,
trustees and other professional advisors; (G) to any Participant or
Assignee, actual or potential, any Eligible Assignee invited to be a Lender
pursuant to Section 2.18 or to any direct, indirect, actual or
prospective counterparty to any swap, derivative or securitization transaction
related to the Obligations, provided that, in each case, such Person
agrees in writing to keep such information confidential to the same extent
required of the Lenders hereunder; (H) as to any Lender or its Affiliate,
as expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Borrower or any Subsidiary thereof is
party with such Lender or such Affiliate; (I) to its Affiliates, provided
that such Affiliate is advised of the confidentiality requirements set forth
herein and agrees in writing (for the benefit of the Borrower) to keep such
information confidential to the same extent required hereunder (it being
understood that each Lender shall be liable for the breach by any of its
Affiliates of any such confidentiality requirement); and (J) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about such Lender’s investment portfolio in connection with ratings issued with
respect to such Lender.  Each Lender
will, so long as not prohibited from doing so by any Requirement of Law, notify
the Borrower of any request for information of the type referred to in clause (B) or
(C) above prior to disclosing such information so that the Borrower
may seek appropriate relief from any applicable court or other Governmental
Authority.

 

11.09       Set-off.  In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender and each of its Affiliates is authorized at any time
and from time to time, without prior notice to the Borrower, any such notice
being waived by the Borrower to the fullest extent permitted by law, to set off
and apply any and all deposits

 

108

 

(general or special, time or demand, provisional or
final) at any time held by, and other indebtedness at any time owing by, such
Lender or such Affiliate to or for the credit or the account of the Borrower
against any and all Obligations and/or Guaranteed Obligations owing to such
Lender or such Affiliate, now or hereafter existing, irrespective of whether or
not the Agent or such Lender shall have made demand under this Agreement or any
Loan Document and although such Obligations and/or Guaranteed Obligations may
be denominated in a different currency, contingent or unmatured.  Each Lender agrees promptly to notify the
Borrower and the Agent after any such set-off and application made by such
Lender or such Affiliate; provided that the failure to give such notice
shall not affect the validity of such set-off and application; and provided,
further, that in the event that any Defaulting Lender shall exercise any
such right of setoff, (x) all amounts so set off shall be paid over
immediately to the Agent for further application in accordance with the
provisions of Section 3.11 and, pending such payment, shall be
segregated by such Defaulting Lender from its other funds and deemed held in
trust for the benefit of the Agent and the Lenders, and (y) the Defaulting
Lender shall provide promptly to the Agent a statement describing in reasonable
detail the Obligations and/or Guaranteed Obligations owing to such Defaulting
Lender as to which it exercised such right of setoff.

 

11.10       Automatic
Debits of Fees.  With respect to any
commitment fee, arrangement fee, letter of credit fee or other fee, or any
other cost or expense (including Attorney Costs) due and payable to the Agent,
any Issuer or Bank of America under the Loan Documents, the Borrower hereby
irrevocably authorizes Bank of America to debit any deposit account of the
Borrower with Bank of America in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed such fee or other cost
or expense (it being understood and agreed that the Agent may from time to time
in its sole discretion agree to any other methods of payment); provided
that so long as no Event of Default has occurred and is continuing, Bank of
America has given notice to the Borrower thereof not later than the date prior
to the date of such debit.  If there are
insufficient funds in such deposit accounts to cover the amount of the fee or
other cost or expense then due, such debits will be reversed so as not to
create an overdraft (in whole or in part, in Bank of America’s sole discretion)
and such amount not debited shall be deemed to be unpaid.  No such debit under this Section shall
be deemed a set-off.

 

11.11       Notification
of Addresses, Lending Offices, Etc. 
Each Lender shall notify the Agent in writing of any changes in the
address to which notices to the Lender should be directed, of addresses of any
Lending Office, of payment instructions in respect of all payments to be made
to it hereunder and of such other administrative information as the Agent shall
reasonably request.

 

11.12       Counterparts.  This Agreement may be executed in any number
of separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.

 

11.13       Severability.  The illegality or unenforceability of any
provision of this Agreement or any instrument or agreement required hereunder
shall not in any way affect or impair the legality or enforceability of the
remaining provisions of this Agreement or any instrument or agreement required
hereunder.  Without limiting the
foregoing provisions of this Section 11.13, if and to the extent
that the enforceability of any provisions in this Agreement relating to
Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in
good faith by the Agent or any Issuer or Swing Line Lender, as applicable, then
such provisions shall be deemed to be in effect only to the extent not so
limited.

 

11.14       No
Third Parties Benefited.  This
Agreement is made and entered into for the sole protection and legal benefit of
the Borrower, the Lenders, the Joint Lead Arrangers, the Syndication Agent and
the Agent-Related Persons, and their permitted successors and assigns, and no
other Person shall be a direct

 

109

 

or indirect legal beneficiary of, or have any direct
or indirect cause of action or claim in connection with, this Agreement or any
of the other Loan Documents.

 

11.15       Governing
Law and Jurisdiction.

 

(a)           THIS
AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW
PROVISIONS THEREOF); PROVIDED THAT THE BORROWER, THE AGENT AND THE LENDERS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

(b)           ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF
THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN THE
BOROUGH OF MANHATTAN IN NEW YORK CITY, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER, THE AGENT AND THE LENDERS CONSENT, FOR THEMSELVES AND
IN RESPECT OF THEIR RESPECTIVE PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE
COURTS.  THE BORROWER, THE AGENT AND THE
LENDERS IRREVOCABLY WAIVE ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH
ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO.  THE BORROWER, THE AGENT
AND THE LENDERS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.

 

11.16       WAIVER
OF JURY TRIAL.  THE BORROWER, THE
LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT
BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR ANY AGENT-RELATED PERSON,
PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS,
OR OTHERWISE.  THE BORROWER, THE LENDERS
AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED
BY A COURT TRIAL WITHOUT A JURY.  WITHOUT
LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO
A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION,
COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO
CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. 
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

 

11.17       Entire
Agreement.  This Agreement, together
with the other Loan Documents, embodies the entire agreement and understanding
among the Borrower, the Lenders and the Agent, and supersedes all prior or
contemporaneous agreements and understandings of such Persons, verbal or
written, relating to the subject matter hereof and thereof.

 

11.18       USA
PATRIOT Act Notice.  Each Lender that
is subject to the Act (as hereinafter defined) and the Agent (for itself and
not on behalf of any Lender) hereby notifies the Borrower that pursuant

 

110

 

to the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”),
it is required to obtain, verify and record information that identifies the
Borrower, which information includes the name and address of the Borrower and
other information that will allow such Lender or the Agent, as applicable, to
identify the Borrower in accordance with the Act.

 

11.19       No
Fiduciary or Implied Duties.  The
Borrower acknowledges and agrees, and acknowledges its Affiliates’
understanding, that in acting as a Lead Agent, no Lead Agent will have
responsibility except as set forth in this Agreement and shall in no event be
subject to any fiduciary or other implied duties.  The Borrower waives and releases, to the
fullest extent permitted by law, any claims that it may have against any Lead
Agent with respect to any breach or alleged breach of agency or fiduciary duty.

 

[signature pages follow]

 

111

 

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

 

	
   

  	
  HANGER
  ORTHOPEDIC GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Thomas E. Hartman

  
	
   

  	
   

  	
  Name:
  Thomas E. Hartman

  
	
   

  	
   

  	
  Title:
  Assistant Secretary

  

 

 

	
   

  	
  BANK
  OF AMERICA, N.A., as Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kristin Thennes

  
	
   

  	
   

  	
  Name:
  Kristine Thennes

  
	
   

  	
   

  	
  Title:
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BANK
  OF AMERICA, N.A., as a Lender, as an

  
	
   

  	
  Issuer
  and as Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Sophia Love

  
	
   

  	
   

  	
  Name:
  Sophia Love

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

	
   

  	
  JEFFERIES
  FINANCE LLC, as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  E. Joseph Hess

  
	
   

  	
   

  	
  Name:
  E. Joseph Hess

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  SUNTRUST
  BANK, as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  C. David Yates

  
	
   

  	
   

  	
  Name:
  C. David Yates

  
	
   

  	
   

  	
  Title:
  Managing Director

  

 

 

	
   

  	
  CIBC, Inc.,
  as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Caroline Adams

  
	
   

  	
   

  	
  Name:
  Caroline Adams

  
	
   

  	
   

  	
  Title:
  CIBC, Inc. Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CIBC, Inc.,
  as a Lender,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eoin Roche

  
	
   

  	
   

  	
  Name:
  Eoin Roche

  
	
   

  	
   

  	
  Title:
  Executive Director

  

 

 

	
   

  	
  ROYAL
  BANK OF CANADA, as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Mustafa Topiwalla

  
	
   

  	
   

  	
  Name:
  Mustafa Topiwalla

  
	
   

  	
   

  	
  Title:
  Authorized Signatory

  

 

 

	
   

  	
  GENERAL
  ELECTRIC CAPITAL CORPORATION,

  as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Ryan Guenin

  
	
   

  	
   

  	
  Name:
  Ryan Guenin

  
	
   

  	
   

  	
  Title:
  Duly Authorized Signatory

  

 

 

	
   

  	
  STEARNS
  BANK, N.A., as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Eric Cook

  
	
   

  	
   

  	
  Name:
  Eric Cook

  
	
   

  	
   

  	
  Title:
  Vice President

  

 

 

	
   

  	
  THE
  F&M BANK & TRUST COMPANY, as a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Kevin Howell

  
	
   

  	
   

  	
  Name:
  Kevin Howell

  
	
   

  	
   

  	
  Title:
  Director

  

 

 

	
   

  	
  CALIFORNIA
  FIRST LEASING CORPORATION, as

  a Lender,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael L. McClenidon

  
	
   

  	
   

  	
  Name:
  Michael L. McClenidon

  
	
   

  	
   

  	
  Title:
  Senior Vice President

  

 

 

SCHEDULE 1.01(A)

 

EXISTING LETTERS OF CREDIT

 

	
  Beneficiary

  	
   

  	
  Issuing Bank

  	
   

  	
  Invoice

  Reference #

  	
   

  	
  Bank of

  America

  Reference

  #

  	
   

  	
  Issue Date

  	
   

  	
  Original

  Issue

  Amount

  	
   

  	
  Amount

  Outstanding

  	
   

  	
  Expiration

  Date

  	
   

  
	
  Federal
  Insurance Company

  	
   

  	
  Bank of

  America, N.A.

  	
   

  	
  CSS584022

  	
   

  	
  68030661

  	
   

  	
  8/31/2006

  	
   

  	
  $

  	
  800,000

  	
   

  	
  $

  	
  100,000

  	
   

  	
  1/3/2011

  	
   

  
	
  Federal
  Insurance Company

  	
   

  	
  Bank of

  America, N.A.

  	
   

  	
  CSS584022

  	
   

  	
  68030661

  	
   

  	
  8/31/2006

  	
   

  	
  $

  	
  800,000

  	
   

  	
  $

  	
  300,000

  	
   

  	
  1/3/2011

  	
   

  
	
  Aetna
  Health Management, LLLC

  	
   

  	
  Bank of

  America, N.A.

  	
   

  	
  CSS584023

  	
   

  	
  68030662

  	
   

  	
  9/1/2005

  	
   

  	
  $

  	
  330,000

  	
   

  	
  $

  	
  330,000

  	
   

  	
  4/1/2011

  	
   

  
	
  The
  Travlers Indemnity Company

  	
   

  	
  Bank of

  America, N.A.

  	
   

  	
  CSS595901

  	
   

  	
  68030746

  	
   

  	
  1/3/2007

  	
   

  	
  $

  	
  730,000

  	
   

  	
  $

  	
  2,470,000

  	
   

  	
  1/3/2011

  	
   

  
	
  Geary
  Associates, LLC

  	
   

  	
  Bank of

  America, N.A.

  	
   

  	
  CSS596050

  	
   

  	
  68030751

  	
   

  	
  1/17/2007

  	
   

  	
  $

  	
  64,998

  	
   

  	
  $

  	
  45,415

  	
   

  	
  1/3/2011

  	
   

  

 

 

SCHEDULE 1.01(B)

 

EXISTING SELLER NOTES

 

HANGER ORTHOPEDIC GROUP, INC.

Projected Seller Notes Balance as of 12/1/2010

 

	
   

  	
   

  	
  Original

  Principal

  	
   

  	
  Note Inception

  Date

  	
   

  	
  Principal Payable

  	
   

  	
  Interest

  Rate

  	
   

  	
  Maturity

  Date

  	
   

  	
  Balance as of

  12/1/2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Surefit Note

  	
   

  	
  3,000,000

  	
   

  	
  07/01/2007

  	
   

  	
  annually

  	
   

  	
  6.00

  	
  %

  	
  07/01/2012

  	
   

  	
  1,305,722

  	
   

  
	
  Beverly Hills Prosthetics-Orthotics Inc

  	
   

  	
  335,500

  	
   

  	
  02/20/2008

  	
   

  	
  quarterly

  	
   

  	
  6.00

  	
  %

  	
  02/20/2013

  	
   

  	
  163,323

  	
   

  
	
  Certified Orthotic Prosthetic

  	
   

  	
  200,000

  	
   

  	
  09/09/2008

  	
   

  	
  annually

  	
   

  	
  5.00

  	
  %

  	
  09/09/2013

  	
   

  	
  125,800

  	
   

  
	
  Colorado Professional Medical - Dana Johnson

  	
   

  	
  30,000

  	
   

  	
  02/12/2008

  	
   

  	
  quarterly

  	
   

  	
  6.50

  	
  %

  	
  02/12/2013

  	
   

  	
  13,747

  	
   

  
	
  Colorado Professional Medical - John Nitta

  	
   

  	
  30,000

  	
   

  	
  02/12/2008

  	
   

  	
  quarterly

  	
   

  	
  6.50

  	
  %

  	
  02/12/2013

  	
   

  	
  13,747

  	
   

  
	
  Colorado Professional Medical - John Nitta (EO)

  	
   

  	
  17,500

  	
   

  	
  01/28/2009

  	
   

  	
  quarterly

  	
   

  	
  6.50

  	
  %

  	
  01/28/2013

  	
   

  	
  10,395

  	
   

  
	
  Colorado Professional Medical - Lora Quirk

  	
   

  	
  540,000

  	
   

  	
  02/12/2008

  	
   

  	
  quarterly

  	
   

  	
  6.50

  	
  %

  	
  02/12/2013

  	
   

  	
  247,458

  	
   

  
	
  Colorado Professional Medical - Lora Quirk (EO)

  	
   

  	
  332,500

  	
   

  	
  01/28/2009

  	
   

  	
  quarterly

  	
   

  	
  6.50

  	
  %

  	
  01/28/2013

  	
   

  	
  197,513

  	
   

  
	
  Custom Footwear - Ernesto Castro

  	
   

  	
  180,000

  	
   

  	
  01/22/2007

  	
   

  	
  annually

  	
   

  	
  6.50

  	
  %

  	
  01/22/2012

  	
   

  	
  78,859

  	
   

  
	
  Custom Orthopedics of Wyoming

  	
   

  	
  500,000

  	
   

  	
  10/06/2009

  	
   

  	
  annually

  	
   

  	
  3.50

  	
  %

  	
  10/06/2014

  	
   

  	
  329,933

  	
   

  
	
  Danforth

  	
   

  	
  2,730,000

  	
   

  	
  12/31/1996

  	
   

  	
  semi-annually

  	
   

  	
  6.00

  	
  %

  	
  12/31/2011

  	
   

  	
  273,000

  	
   

  
	
  Dynamic O&P - Dibello Management Svcs

  	
   

  	
  20,000

  	
   

  	
  06/16/2010

  	
   

  	
  semi-annually

  	
   

  	
  3.00

  	
  %

  	
  06/15/2012

  	
   

  	
  20,000

  	
   

  
	
  Dynamic O&P - Thomas V. Dibello

  	
   

  	
  1,980,000

  	
   

  	
  06/16/2010

  	
   

  	
  semi-annually

  	
   

  	
  3.00

  	
  %

  	
  06/15/2012

  	
   

  	
  1,980,000

  	
   

  
	
  First Coast O&P (Travgav)

  	
   

  	
  120,000

  	
   

  	
  12/09/2008

  	
   

  	
  annually

  	
   

  	
  6.00

  	
  %

  	
  12/08/2012

  	
   

  	
  92,569

  	
   

  
	
  Inline O&P

  	
   

  	
  150,000

  	
   

  	
  05/18/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  05/18/2013

  	
   

  	
  114,676

  	
   

  
	
  Maine Artificial Limb Co

  	
   

  	
  500,000

  	
   

  	
  10/28/2008

  	
   

  	
  semi-annually

  	
   

  	
  5.50

  	
  %

  	
  10/28/2012

  	
   

  	
  263,551

  	
   

  
	
  Manhasset Orthotics-Prosthetics

  	
   

  	
  400,000

  	
   

  	
  09/08/2008

  	
   

  	
  quarterly

  	
   

  	
  6.00

  	
  %

  	
  09/08/2012

  	
   

  	
  211,896

  	
   

  
	
  MHC Prosthetics

  	
   

  	
  900,000

  	
   

  	
  11/27/2007

  	
   

  	
  annually

  	
   

  	
  6.00

  	
  %

  	
  11/27/2012

  	
   

  	
  391,717

  	
   

  
	
  Nebraska O&P Services, Inc. - Brad C.
  Rosenberger

  	
   

  	
  300,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  300,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Brandon M.
  Quick

  	
   

  	
  150,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  150,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Cory J
  Schutte

  	
   

  	
  300,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  300,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Jerry L. Kassebaum

  	
   

  	
  300,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  300,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Julian A.
  Wells

  	
   

  	
  75,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  75,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Randall D.
  Brown

  	
   

  	
  300,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  300,000

  	
   

  
	
  Nebraska O&P Services, Inc. - Raymond L.
  Lines

  	
   

  	
  75,000

  	
   

  	
  12/15/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/15/2013

  	
   

  	
  75,000

  	
   

  
	
  NWPOC - Jan Hattingh

  	
   

  	
  750,000

  	
   

  	
  03/24/2009

  	
   

  	
  semi-annually

  	
   

  	
  5.00

  	
  %

  	
  03/24/2013

  	
   

  	
  485,956

  	
   

  
	
  Orthopedic Rehab Products

  	
   

  	
  400,000

  	
   

  	
  12/31/2008

  	
   

  	
  semi-annually

  	
   

  	
  5.00

  	
  %

  	
  12/30/2012

  	
   

  	
  259,176

  	
   

  
	
  Orthotic-Prosthetic Center

  	
   

  	
  200,000

  	
   

  	
  12/18/2007

  	
   

  	
  annually

  	
   

  	
  6.00

  	
  %

  	
  12/18/2012

  	
   

  	
  126,913

  	
   

  
	
  Paris O&P

  	
   

  	
  750,000

  	
   

  	
  06/18/2007

  	
   

  	
  annually

  	
   

  	
  7.00

  	
  %

  	
  06/18/2012

  	
   

  	
  330,719

  	
   

  
	
  Specialized P&O Tech (SPOT)

  	
   

  	
  600,000

  	
   

  	
  10/29/2007

  	
   

  	
  annually

  	
   

  	
  6.00

  	
  %

  	
  10/29/2012

  	
   

  	
  261,144

  	
   

  
	
  Spectrum Prosthetics &
  Orthotics, Inc

  	
   

  	
  100,000

  	
   

  	
  12/16/2009

  	
   

  	
  annually

  	
   

  	
  4.00

  	
  %

  	
  12/16/2011

  	
   

  	
  100,000

  	
   

  
	
  Wasatch Orthotics & Pedorthics

  	
   

  	
  700,000

  	
   

  	
  07/16/2010

  	
   

  	
  semi-annually

  	
   

  	
  4.00

  	
  %

  	
  07/16/2013

  	
   

  	
  700,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sub Total HPO

  	
   

  	
  16,965,500

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  9,597,817

  	
   

  

 

 

SCHEDULE 2.01

 

COMMITMENTS AND PERCENTAGES

 

	
  Revolving Lender

  	
   

  	
  Revolving Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  $

  	
  25,000,000.00

  	
   

  	
  25.00

  	
  %

  
	
  Jefferies
  Finance LLC

  	
   

  	
  19,000,000.00

  	
   

  	
  19.00

  	
  %

  
	
  SunTrust
  Bank

  	
   

  	
  12,500,000.00

  	
   

  	
  12.50

  	
  %

  
	
  CIBC
  Inc.

  	
   

  	
  8,500,000.00

  	
   

  	
  8.50

  	
  %

  
	
  Royal
  Bank of Canada

  	
   

  	
  5,000,000.00

  	
   

  	
  5.00

  	
  %

  
	
  General
  Electric Capital Corporation

  	
   

  	
  15,000,000.00

  	
   

  	
  15.00

  	
  %

  
	
  Stearns
  Bank, N.A.

  	
   

  	
  7,500,000.00

  	
   

  	
  7.50

  	
  %

  
	
  The
  F&M Bank & Trust Company

  	
   

  	
  5,000,000.00

  	
   

  	
  5.00

  	
  %

  
	
  California
  First Leasing Corporation

  	
   

  	
  2,500,000.00

  	
   

  	
  2.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  100,000,000.00

  	
   

  	
  100

  	
  %

  

 

	
  Term B Lender

  	
   

  	
  Term B Commitment

  	
   

  	
  Pro Rata Share

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  $

  	
  300,000,000.00

  	
   

  	
  100.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  300,000,000.00

  	
   

  	
  100

  	
  %

  

 

 

SCHEDULE 2.19

 

AUCTION PROCEDURES

 

This Schedule is intended to summarize certain basic terms
of the reverse Dutch auction procedures pursuant to and in accordance with the
terms and conditions of Section 2.19 of the Agreement, of which
this Schedule is a part. It is not intended to be a definitive statement of all
of the terms and conditions of a reverse Dutch auction, the definitive terms
and conditions for which shall be set forth in the applicable offering
document. None of the Agent, the Auction Manager or any other Agent-Related
Person, or any of their respective affiliates makes any recommendation pursuant
to any offering document as to whether or not any Term Lender should sell its
Term Loans to the Borrower pursuant to any offering documents, nor shall the
decision by the Agent, the Auction Manager or any other Agent-Related Person
(or any of their affiliates) in its respective capacity as a Term Lender to
sell its Term Loans to the Borrower be deemed to constitute such a recommendation.
Each Term Lender should make its own decision on whether to sell any of its
Term Loans and, if it decides to do so, the principal amount of and price to be
sought for such Term Loans. In addition, each Term Lender should consult its
own attorney, business advisor or tax advisor as to legal, business, tax and
related matters concerning each Auction and the relevant offering documents.

 

Capitalized terms not otherwise defined in this Schedule
have the meanings assigned to them in the Agreement.

 

(a)           Notice Procedures.  In
connection with each Auction, the Borrower will provide notification to the
Auction Manager (for distribution to the Term Lenders holding the applicable
Term Loans that will be the subject of such Auction) (each, an “Auction
Notice”). Each Auction Notice shall contain (i) the maximum principal
amount (calculated on the face amount thereof) of the Term Loans that the
Borrower offers to purchase in such Auction (the “Auction Amount”),
which shall be no less than $10,000,000 (unless another amount is agreed to by
the Agent); (ii) the range of discounts to par (the “Discount Range”),
expressed as a range of prices per $1,000 (in increments of $5), at which the
Borrower would be willing to purchase Term Loans in such Auction; and
(iii) the date on which such Auction will conclude, on which date Return
Bids (as defined below) will be due by 1:00 p.m. (as such date and time
may be extended by the Auction Manager at the request of the Borrower, such
time the “Expiration Time”).  Such Expiration Time may be extended
for a period not exceeding three (3) Business Days upon notice by the
Borrower to the Auction Manager received not less than 24 hours before the
original Expiration Time; provided, that only one extension per offer
shall be permitted. An Auction shall be regarded as a “failed auction” in the
event that either (i) the Borrower withdraws such Auction in accordance
with the terms hereof or (ii) the Expiration Time occurs with no
Qualifying Bids (as defined below) having been received.  In the event of
a failed auction, the Borrower shall not be permitted to deliver a new Auction
Notice prior to the date occurring three (3) Business Days after such
withdrawal or Expiration Time, as the case may be.  Notwithstanding
anything to the contrary contained herein, the Borrower shall not initiate any
Auction by delivering an Auction Notice to the Auction Manager until after the
conclusion (whether successful or failed) of the previous Auction (if any),
whether such conclusion occurs by withdrawal of such previous Auction or the
occurrence of the Expiration Time of such previous Auction.

 

 

(b)           Reply Procedures.  In
connection with any Auction, each Term Lender wishing to participate in such
Auction shall, prior to the Expiration Time, provide the Auction Manager with a
notice of participation, in the form included in the respective offering
document (each, a “Return Bid”) which shall specify (i) a discount
to par that must be expressed as a price per $1,000 (in increments of $5) in
principal amount of the applicable Term Loans (the “Reply Price”) within
the Discount Range and (ii) the principal amount of such Term Loans, in an
amount not less than $500,000 or an integral multiple of $100,000 in excess
thereof, that such Term Lender offers for sale at its Reply Price (the “Reply
Amount”). A Term Lender may submit a Reply Amount that is less than the
minimum amount and incremental amount requirements described above only if the
Reply Amount comprises the entire amount of the applicable Term Loans held by
such Term Lender.  Term Lenders may only submit one Return Bid per Auction
but each Return Bid may contain up to three (3) component bids, each of
which may result in a separate Qualifying Bid and each of which will not be
contingent on any other component bid submitted by such Term Lender resulting
in a Qualifying Bid.  In addition to the Return Bid, the participating
Term Lender must execute and deliver, to be held by the Auction Manager, an
assignment and acceptance in the form included in the offering document (each,
an “Auction Assignment and Assumption”). The Borrower will not purchase
any Term Loans at a price that is outside of the applicable Discount Range, nor
will any Return Bids (including any component bids specified therein) submitted
at a price that is outside such applicable Discount Range be considered in any
calculation of the Applicable Threshold Price.

 

(c)           Acceptance Procedures. 
Based on the Reply Prices and Reply Amounts received by the Auction Manager,
the Auction Manager, in consultation with the Borrower, will calculate the
lowest purchase price (the “Applicable Threshold Price”) for such
Auction within the Discount Range for such Auction that will allow the Borrower
to complete the Auction by purchasing the full Auction Amount (or such lesser
amount of Term Loans for which the Borrower has received Qualifying Bids). The
Borrower shall purchase the applicable Term Loans from each Term Lender whose
Return Bid is within the Discount Range and contains a Reply Price that is
equal to or less than the Applicable Threshold Price (each, a “Qualifying
Bid”). All applicable Term Loans included in Qualifying Bids (including
multiple component Qualifying Bids contained in a single Return Bid) received
at a Reply Price lower than the Applicable Threshold Price will be purchased at
such applicable Reply Prices and shall not be subject to proration.

 

(d)           Proration Procedures. 
All Term Loans offered in Return Bids (or, if applicable, any component
thereof) constituting Qualifying Bids at the Applicable Threshold Price will be
purchased at the Applicable Threshold Price; provided that if the
aggregate principal amount (calculated on the face amount thereof) of all
applicable Term Loans for which Qualifying Bids have been submitted in any
given Auction at the Applicable Threshold Price would exceed the remaining
portion of the Auction Amount (after deducting all applicable Term Loans to be
purchased at prices below the Applicable Threshold Price), the Borrower shall
purchase the Term Loans for which the Qualifying Bids submitted were at the
Applicable Threshold Price ratably based on the respective principal amounts
offered and in an aggregate amount equal to the amount necessary to complete
the purchase of the Auction Amount.  No Return Bids or any component thereof
will be accepted above the Applicable Threshold Price.

 

 

(e)           Notification Procedures. 
The Auction Manager will calculate the Applicable Threshold Price and post the
Applicable Threshold Price and proration factor onto an internet or intranet
site (including IntraLinks or another electronic workspace) in accordance with
the Auction Manager’s standard dissemination practices by 3:00 p.m. (local
time) on the same Business Day as the date the Return Bids were due (as such
due date may be extended in accordance with this Schedule).  The Auction
Manager will insert the principal amount of the applicable Term Loans to be
assigned and the applicable settlement date into each applicable Auction
Assignment and Assumption received in connection with a Qualifying Bid. 
Upon the request of the submitting Term Lender, the Auction Manager will
promptly return any Auction Assignment and Assumption received in connection
with a Return Bid that is not a Qualifying Bid.

 

(f)            Auction Assignment and Assumption. 
Each Auction Notice and Auction Assignment and Assumption shall contain the
following representations and warranties by the Borrower:

 

“No Default or Event of Default has occurred and is
continuing, or would result from this Auction.

 

As of the date hereof, except as previously disclosed in
writing to the Agent and the Lenders, the Borrower represents and warrants that
no Loan Party has any MNPI that both (a) has not been previously disclosed
in writing to the Agent and the Lenders (other than because any such Lender
does not wish to receive such MNPI) prior to the date hereof and (b) could
reasonably be expected to be material to a Lender’s decision to participate in
the Auction.”

 

(g)           Additional Procedures. 
Once initiated by an Auction Notice, the Borrower may withdraw an Auction only
in the event that, as of such time, no Qualifying Bid has been received by the
Auction Manager or the Borrower has failed, or in good faith believes it will
fail, to satisfy one or more of the conditions set forth in Section 2.19
of the Agreement which are required to be met at the time which otherwise would
have been the time of purchase of the Term Loans pursuant to the respective
Auction. Furthermore, in connection with any Auction with respect to particular
Term Loans, upon submission by a Term Lender of a Return Bid, such Term Lender
will not have any withdrawal rights.  Any Return Bid (including any
component bid thereof) delivered to the Auction Manager may not be modified,
revoked, terminated or cancelled by a Term Lender. However, an Auction may
become void if the conditions to the purchase of the applicable Term Loans by
the Borrower required by the terms and conditions of Section 2.19
of the Agreement are not met.  The purchase price in respect of each
Qualifying Bid for which purchase by the Borrower is required in accordance
with the foregoing provisions shall be paid directly by the Borrower to the
respective assigning Term Lender on a settlement date as determined jointly by
the Borrower and the Auction Manager (which shall be not later than ten
(10) Business Days after the date Return Bids are due). The Borrower shall
execute each applicable Auction Assignment and Assumption received in
connection with a Qualifying Bid.  All questions as to the form of documents
and validity and eligibility of Term Loans that are the subject of an Auction
will be determined by the Auction Manager, in consultation with the Borrower,
and their determination will be final and binding so long as such determination
is not inconsistent with the terms of Section 2.19 of the Agreement
or this Schedule. The Auction Manager’s

 

 

interpretation
of the terms and conditions of the offering document, in consultation with the
Borrower, will be final and binding so long as such interpretation is not inconsistent
with the terms of Section 2.19 of the Agreement or this
Schedule.  None of the Agent, the Auction Manager, any other Agent-Related
Person or any of their respective affiliates assumes any responsibility for the
accuracy or completeness of the information concerning the Borrower, the other
Loan Parties, or any of their affiliates (whether contained in an offering
document or otherwise) or for any failure to disclose events that may have
occurred and may affect the significance or accuracy of such information.

 

This
Schedule shall not require the Borrower to initiate any Auction or the Agent or
any Agent-Related Person to act as Auction Manager.

 

 

SCHEDULE 6.07

 

ERISA

 

NONE

 

 

SCHEDULE 6.10

 

TAXES

 

NONE

 

 

SCHEDULE 6.12

 

ENVIRONMENTAL MATTERS

 

NONE

 

 

SCHEDULE 6.14

 

CAPITALIZATION; SUBSIDIARIES AND
MINORITY INTERESTS

 

(a) Subsidiaries

 

Hanger
Prosthetics & Orthotics, Inc.

Hanger
Prosthetics & Orthotics West, Inc.

Eugene
Teufel & Son Orthotics & Prosthetics, Inc.

OPNET, Inc.

Southern
Prosthetic Supply, Inc.

ABi
Orthotic/Prosthetic Laboratories, Ltd.

Hanger
Prosthetics & Orthotics East, Inc.

Inline
Orthotic and Prosthetic Systems

Creative
Orthotics & Prosthetics, Inc.

Nebraska
Orthotic & Prosthetic Services, Inc.

Innovative
Neurotronics, Inc.

Orthopedic
Rehabilitation Products, Ltd.

Linkia,
LLC

The
Brace Shop Prosthetic Orthotic Centers, Inc.

Hattingh
Holdings, Inc.

Elite
Care, Incorporated

Colorado
Professional Medical, Inc.

Dosteon
Solutions, LLC

Advanced
Prosthetics of America, Inc.

DDOPP
Holding LLC

DiBello’s
Dynamic Orthotics and Prosthetics Partnership, Ltd.

Accelerated
Care Plus Corp. (effective upon consummation of the Merger)

Wasatch
Orthotics & Pedorthics, LLC

ACP
Medical Supply Corporation (effective upon consummation of the Merger)

Hanger
Europe, N.V.

Speed
Acquisition Vehicle, Inc.(1)

 

 

(b) Other Equity Interests

 

NONE

 

(1)  On the Effective Date, Speed
Acquisition Vehicles, Inc. is merging with and into Accelerated Care Plus
Corp.

 

 

SCHEDULE 7.11

 

REFINANCING INDEBTEDNESS

 

Credit
Agreement, dated as of May 26, 2006 (as amended, supplemented or otherwise
modified from time to time), among the Borrower, certain lenders party thereto
and Citicorp North America, Inc., as administrative agent.

 

 

SCHEDULE 7.14(d)

 

POST-CLOSING COLLATERAL

 

Accelerated
Care Plus Corp.

 

ACP
Medical Supply Corporation

 

 

SCHEDULE 8.01

 

PERMITTED LIENS

 

	
  Debtor

  	
   

  	
  Secured Party

  	
   

  	
  UCC Filing

  Number

  	
   

  	
  Collateral

  
	
  Hanger
  Prosthetics & Orthotics East, Inc.

  	
   

  	
  Cummings

  Properties, LLC

  	
   

  	
  20310593

  	
   

  	
  All
  office and other equipment, furniture, inventory and other property, whether
  existing or after acquired, of Debtor located at all premises leased by
  Secured Party to Debtor, now or hereafter

  
	
  Hattingh
  Holdings, Inc.

  	
   

  	
  Puget
  Sound

  Leasing Co., Inc.

  	
   

  	
  2006-138-1100-4

  	
   

  	
  1)
  omega diamond kane w/toasted almond desk; 1) omega dynasty cherry file
  cabinet

  
	
  Hattingh
  Holdings, Inc.

  	
   

  	
  Puget
  Sound

  Leasing Co., Inc.

  	
   

  	
  2006-138-1101-1

  	
   

  	
  1
  set omega oyster finish with coffee glaze cabinets

  
	
  Southern
  Prosthetic Supply, Inc.

  	
   

  	
  GreatAmerica

  Leasing Corporation

  	
   

  	
  007-2006-13428

  	
   

  	
  2)
  intertel axxess 256 cabinet w/ voicemail and all products, proceeds and
  attachments

  
	
  Southern
  Prosthetic Supply, Inc.

  	
   

  	
  GreatAmerica

  Leasing Corporation

  	
   

  	
  007-2008-026244

  	
   

  	
  Inter-tel
  telephone system- Florida; inter-tel telephone system - Georgia; and all
  products, proceeds and attachments

  

 

 

SCHEDULE 8.04

 

PERMITTED INVESTMENTS

 

Hanger
Orthopedic Group, Inc.’s 60% ownership interest in Hanger
Europe, N.V., a Belgian limited liability company

 

 

SCHEDULE 8.05

 

INDEBTEDNESS

 

$200,000,000
aggregate principal amount of 71/8% Senior Notes due 2018 issued under the
Indenture, dated as of November 2, 2010, among the Borrower, each of the
subsidiary guarantors party thereto and Wilmington Trust Company, as trustee.

 

$2,557,000
aggregate principal amount of 101/4% Senior Notes due 2014 issued under the
Indenture, dated as of May 26, 2006, among the Borrower, the subsidiary
guarantors party thereto and Wilmington Trust Company, as trustee, such 101/4% Senior Notes due 2014 to
be redeemed in full on December 2, 2010.

 

 

SCHEDULE 8.07

 

BURDENSOME AGREEMENTS

 

Indenture,
dated as of May 26, 2006, among the Borrower, the subsidiary guarantors
party thereto and Wilmington Trust Company, as trustee, relating to the
Borrower’s 101/4% Senior
Notes due 2014, and the notes issued thereunder and agreements relating
thereto, such Indenture scheduled to be terminated on December 2, 2010.

 

Amended
and Restated Preferred Stock Purchase Agreement, dated as of May 25, 2006,
among the Borrower, Ares Corporate Opportunities Fund, L.P. and the
initial purchasers identified therein.

 

Indenture,
dated as of November 2, 2010, among the Borrower, each of the subsidiary
guarantors party thereto and Wilmington Trust Company, as trustee, relating to
the Borrower’s 71/8% Senior
Notes due 2018, and the notes issued thereunder and agreements relating
thereto.

 

 

SCHEDULE 11.02

 

AGENT’S OFFICE,

CERTAIN ADDRESSES FOR NOTICES

 

BORROWER:

 

Hanger
Orthopedic Group, Inc.

10910
Domain Dr., Suite 300

Austin,
Texas 78758

Attention:
Thomas E. Hartman, Vice President and General Counsel

Telephone:
(512) 777-3740

Facsimile:
(512) 777-3779

Electronic
Mail: thartman@hanger.com

 

 

Hanger
Orthopedic Group, Inc.

10910
Domain Dr., Suite 300

Austin,
Texas 78758

Attention:
George E. McHenry, Executive Vice President,

Chief
Financial Officer and Secretary

Telephone:
(512) 777-3600

Facsimile:
(512) 777-3779

Electronic
Mail: gmchenry@hanger.com

 

 

Copies
of material notices, including notices of any Default, to:

 

Foley &
Lardner LLP

777
E. Wisconsin Avenue

Milwaukee,
Wisconsin 53202

Attention:
Patricia J. Lane

Telephone:
(414) 297-5635

Facsimile:
(414) 297-4900

Electronic
Mail: plane@foley.com

 

 

ADMINISTRATIVE
AGENT:

 

Administrative
Agent’s Office  

(for payments and Requests for Credit Extensions):

Bank
of America, N.A.

Bank
of America Plaza

901
Main Street

Mail
Code TX1-492-14-12

Dallas,
TX 75202-3714

Attention:
Ramon Presas

Telephone:
(214) 209-9262

Facsimile:
(214) 290-8364

Electronic
Mail: ramon.presas@baml.com

Account
No.:  

Attn:
Corporate Credit Services

Ref:  Hanger Orthopedic Group, Inc.

ABA#
026-009-593

 

 

Other
Notices as Administrative Agent:

Bank
of America, N.A.

Agency Management

 

Primary                 Christine
Trotter

Agency
Officer

Bank
of America

135
South LaSalle Street

Chicago, Illinois  60603

Mail
Code: IL4-135-05-41

Telephone:  (312) 828-4172

Fax:             (877)
207-0702

Email:  Christine.Trotter@baml.com

 

 

Secondary             Charlene Wright-Jones

Agency
Officer

Bank
of America

135
South LaSalle Street

Chicago, Illinois  60603

Mail
Code: IL4-135-05-41

Telephone:  (312) 828-3935

Fax:             (877)
206-8427

Email: charlene.wright-jones@baml.com

 

 

LETTERS
OF CREDIT ISSUER:

 

Bank
of America, N.A.

Trade
Operations

1000
W Temple Street

Mail
Code:  CA9-705-07-05

Los
Angeles, CA 90012-1514

 

 

	
  Standby

  	
   

  	
  Manuel
  Banuelos

  
	
   

  	
   

  	
  Telephone:
  (213) 481-7837

  
	
   

  	
   

  	
  Fax:
  (213) 457-8841

  
	
   

  	
   

  	
  Electronic
  Mail: manuel.banuelos@baml.com

  
	
   

  	
   

  	
   

  
	
  Commercial

  	
   

  	
  Jay
  Mendon

  
	
   

  	
   

  	
  Telephone:
  (213) 580-8351

  
	
   

  	
   

  	
  Fax:
  (213) 457-8841

  
	
   

  	
   

  	
  Electronic
  Mail: jay.mendon@baml.com

  

 

SWING
LINE LENDER:

 

Bank
of America, N.A.

Bank
of America Plaza

901
Main Street

Mail
Code TX1-492-14-12

Dallas,
TX 75202-3714

Attention:
Ramon Presas

Telephone:
(214) 209-9262

Facsimile:
(214) 290-8364

Electronic
Mail: ramon.presas@baml.com

Account
No.:  

Attn:
Corporate Credit Services

Ref:  Hanger Orthopedic Group, Inc.

ABA#
026-009-593

 

 

EXHIBIT A

 

FORM OF NOTICE OF BORROWING

[Date]

 

Bank
of America, N.A., as Agent

for
the Lenders party to the Credit

Agreement
referred to below

[901
Main Street

Mail
Code TX1-492-14-14

Dallas,
Texas 75202]

 

Attn: Senior Agency Officer

 

Ladies and Gentlemen:

 

The undersigned refers to the Credit Agreement dated as of December 1,
2010 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”; capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement)
among Hanger Orthopedic Group, Inc., a Delaware corporation (the “Borrower”),
the financial institutions from time to time party thereto (collectively, the “Lenders”)
and Bank of America, N.A., as administrative agent for the Lenders (the “Agent”), Issuer
and Swing Line Lender, and hereby gives you notice pursuant to Section 2.03
of the Credit Agreement that the undersigned hereby requests a Borrowing under
the Credit Agreement.  Set forth below is
the information relating to such Borrowing as required by subsection 2.03(a) of
the Credit Agreement:

 

(i)           The aggregate
amount of the proposed Borrowing is
$                  .

 

(ii)          The requested
Borrowing Date for the proposed Borrowing (which is a Business Day) is
                          ,
        .

 

(iii)         The Class of
Loans comprising the proposed Borrowing is [Revolving][Term] Loans and the Type
of Loans comprising the proposed Borrowing is [Base] [LIBOR] Rate  Loans.

 

(iv)         The duration of
the Interest Period for each LIBOR Rate Loan made as part of the proposed
Borrowing, if applicable, is         
months (which shall be 1, 2, 3 or 6 (or, if available to all Lenders, 9 or 12)
months) or such other period as required by the Borrower and agreed to by all
applicable Lenders.

 

The undersigned hereby certifies that the following statements will be
true on the date of the proposed Borrowing, before and after giving effect
thereto and to the application of the proceeds therefrom:

 

 

(a)           The
representations and warranties in Article VI of the Credit Agreement are
true and correct in all material respects as though made on and as of the date
of such proposed Borrowing (except to the extent such representations and
warranties expressly refer to an earlier date, in which case such
representations and warranties are true and correct as of such earlier date);
provided that with respect to such representations and warranties to be made on
the Effective Date and solely as they relate to the Acquired Business and its
Subsidiaries (and not the Borrower or any of its other Subsidiaries), only the
Merger Agreement Representations and the Specified Representations shall be
required to be true and correct in all material respects as of the Effective
Date; and

 

(b)           No Default or
Event of Default has occurred and is continuing, or would result from such
proposed Borrowing (excluding a Default or Event of Default resulting from the
breach of a representation or warranty relating to the Acquired Business or any
of its Subsidiaries that is not a condition to the Credit Extensions made on
the Effective Date pursuant to the proviso in clause (a) above).

 

 

Very truly yours,

 

 

	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT B

 

FORM OF NOTICE OF CONVERSION/CONTINUATION

 

[Date]

 

Bank of America, N.A., as Agent

for the Lenders party to the Credit

Agreement referred to below

[231 South LaSalle Street

Mail Code IL1-231-08-30

Chicago, Illinois 60604]

 

Attn: Senior Agency Officer

 

Ladies and Gentlemen:

 

The undersigned refers to the Credit Agreement dated as of December 1,
2010 (as amended, restated, extended, supplemented or otherwise modified from
time to time, the “Credit Agreement”; capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement)
among Hanger Orthopedic Group, Inc., a Delaware corporation (the “Borrower”),
the financial institutions from time to time party thereto (collectively, the “Lenders”)
and Bank of America, N.A., as administrative agent for the Lenders (the “Agent”), Issuer
and Swing Line Lender, and hereby gives you notice pursuant to Section 2.04
of the Credit Agreement that the undersigned hereby requests a [conversion]
[continuation] of Loans under the Credit Agreement.  Set forth below is the information relating
to such [conversion] [continuation] as required by subsection 2.04(b) of
the Credit Agreement:

 

(i)             The date of the
proposed [conversion] [continuation] is
                              ,
         (which shall be a Business
Day).

 

(ii)            The aggregate
amount of the Loans proposed to be [converted] [continued] is
$                              .
[Specify which part is to be converted and which part is to be continued, if
appropriate.]

 

(iii)           The Loans to be
[continued] [converted] are [Base Rate Loans] [LIBOR Rate Loans] and the Loans
resulting from the proposed [conversion] [continuation] will be [Base Rate
Loans] [LIBOR Rate Loans].

 

(iv)           The duration of
the requested Interest Period for each LIBOR Rate Loan made as part of the
proposed [conversion] [continuation] is       
months (which shall be 1, 2, 3 or 6 (or, if available to all Lenders, 9 or 12)
months) or such other period as required by the Borrower if agreed to by all
applicable Lenders.

 

The undersigned hereby certifies that before and after giving effect to
the proposed [conversion] [continuation] and to the application of the proceeds
therefrom, no 

 

 

Default or Event of Default has occurred and is continuing or would
result from such proposed [conversion] [continuation].

 

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  [BORROWER]

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

EXHIBIT C

 

FORM OF COMPLIANCE CERTIFICATE

 

Financial
Statement Date: 
                ,                  

 

Bank of America, N.A., as Agent

for the Lenders party to the Credit

Agreement referred to below

[231 South LaSalle Street

Mail Code IL1-231-08-30

Chicago, Illinois 60604]

 

Attn:  Senior Agency Officer

 

Ladies and Gentlemen:

 

This certificate is furnished to you by Hanger Orthopedic Group, Inc.,
a Delaware corporation (the “Borrower”), pursuant to Section 7.02(b) of
the Credit Agreement dated as of December 1, 2010 among the Borrower, the
financial institutions from time to time party thereto (collectively, the “Lenders”),
Bank of America, N.A., as administrative agent for the Lenders (the “Agent”), Issuer
and Swing Line Lender (as amended, restated, extended, supplemented or
otherwise modified from time to time, the “Credit Agreement”),
concurrently with the delivery of the financial statements required pursuant to
Section 7.01 of the Credit Agreement. Capitalized terms used but not
defined herein (including on Schedule 1 hereto) shall have the meanings
given to them in the Credit Agreement.

 

The undersigned, on behalf of the Borrower, hereby certifies that:

 

1.             the financial
data and computations set forth in Schedule 1 below, evidencing compliance with
the covenants set forth in Sections 8.09 and 8.10 of the Credit Agreement, are
true and correct as of
                                  ,
         (the “Computation Date”); and

 

2.             to the
knowledge of the undersigned, no Default or Event of Default has occurred and
is continuing.

 

The foregoing certifications, together with the computations set forth
in Schedule 1 hereto and the financial statements delivered with
this Compliance Certificate in support hereof, are made and delivered as of
this             
day of
                              ,
          .

 

 

IN WITNESS WHEREOF, the undersigned has
executed this Certificate as of                                       ,                       .

 

 

	
   

  	
   HANGER
  ORTHOPEDIC GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

SCHEDULE 1

 

Computations

 

Period:  Last day of fiscal
quarter ended
                          ,
201     (the “Computation Date”).

 

	
  I.

  	
  Section 8.09 Consolidated Leverage Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1. 

  	
  Maximum permitted:

  	
   

  	
  :1.0

  	
   

  
	
   

  	
  2. 

  	
  Actual:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) 

  	
  For
  the period of four consecutive fiscal quarters ending on the Computation Date
  (the “Measurement Period”), the excess of (A) the aggregate
  principal amount of all Indebtedness (other than Indebtedness described in
  clause (f) of the definition thereof) of the Borrower and its
  Subsidiaries, determined on a consolidated basis in accordance with GAAP over
  (B) the lesser of (i) $30,000,000 and (ii) the aggregate
  amount of unrestricted cash and Cash Equivalents of the Borrower and its
  Subsidiaries, on a consolidated basis:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (b) 

  	
  Consolidated
  EBITDA for the Measurement Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (c) 

  	
  Consolidated
  Leverage Ratio (ratio of (a) to (b)):

  	
   

  	
  :1.0

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II. 

  	
  Section 8.10 Consolidated Interest Coverage
  Ratio

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  1. 

  	
  Minimum required:

  	
   

  	
  :1.0

  	
   

  
	
   

  	
  2. 

  	
  Actual:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a) 

  	
  Consolidated
  EBITDA for the Measurement Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (b) 

  	
  Cash
  Interest Expense for the Measurement Period:

  	
   

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
  Consolidated
  Interest Coverage Ratio (ratio of (a) to (b)):

  	
   

  	
  : 1.0

  	
   

  

 

 

EXHIBIT D

 

FORM OF ASSIGNMENT AND ASSUMPTION

 

This
Assignment and Assumption (this “Assignment and Assumption”) is dated as
of the Effective Date set forth below (the “Effective Date”) and is
entered into by and between [the][each](1) Assignor identified in item 1
below ([the][each, an] “Assignor”) and [the][each](2) Assignee
identified in item 2 below ([the][each, an] “Assignee”).  [It is understood and agreed that the rights
and obligations of [the Assignors] [the Assignees](3) hereunder are
several and not joint.](4)  Capitalized terms used but not defined herein
shall have the meanings given to them in the Credit Agreement identified in
item 5 below (the “Credit Agreement”), receipt of a copy of which is
hereby acknowledged by [the] [each] Assignee. 
The Standard Terms and Conditions set forth in Annex 1 attached hereto
(the “Standard Terms and Conditions”) are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Assumption as if set forth herein in full.

 

For
an agreed consideration, [the][each] Assignor hereby irrevocably sells and
assigns to [the Assignee][the respective Assignees], and [the][each] Assignee
hereby irrevocably purchases and assumes from [the Assignor][the respective
Assignors], subject to and in accordance with the Standard Terms and Conditions
and the Credit Agreement, as of the Effective Date inserted by the Agent as
contemplated below (i) all of [the Assignor’s][the respective Assignors’]
rights and obligations in [its capacity as a Lender][their respective
capacities as Lenders] under the Credit Agreement and any other documents or
instruments delivered pursuant thereto to the extent related to the amount and
percentage interest identified below of all of such outstanding rights and
obligations of [the Assignor][the respective Assignors] under the respective
facilities identified below (including, without limitation, the Letters of
Credit and the Swing Line Loans included in such facilities(5)) and (ii) to
the extent permitted to be assigned under applicable law, all claims, suits,
causes of action and any other right of [the Assignor (in its capacity as a
Lender)][the respective Assignors (in their respective capacities as Lenders)]
against any Person, whether known or unknown, arising under or in connection
with the Credit Agreement, any other documents or instruments delivered
pursuant thereto or the loan transactions governed thereby or in any way based
on or related to any of the foregoing, including, but not limited to, contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity related to the rights and obligations sold and assigned
pursuant to clause (i) above (the rights and 

 

(1) 
For bracketed language here and elsewhere in this form relating to the
Assignor(s), if the assignment is from a single Assignor, choose the first
bracketed language.  If the assignment is
from multiple Assignors, choose the second bracketed language.

(2) 
For bracketed language here and elsewhere in this form relating to the
Assignee(s), if the assignment is to a single Assignee, choose the first
bracketed language.  If the assignment is
to multiple Assignees, choose the second bracketed language.

(3) 
Select as appropriate.

(4) 
Include bracketed language if there are either multiple Assignors or multiple
Assignees.

(5) 
Include all applicable subfacilities.

 

 

obligations
sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to
clauses (i) and (ii) above being referred to herein collectively as [the][an]
“Assigned Interest”).  Each such
sale and assignment is without recourse to [the][any] Assignor and, except as
expressly provided in this Assignment and Assumption, without representation or
warranty by [the][any] Assignor.

 

	
  1.

  	
   

  	
  Assignor[s]:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Assignee[s]:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [for
  each Assignee, indicate [Affiliate][Approved Fund] of [identify
  Lender]]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Borrower:

  	
   

  	
  Hanger
  Orthopedic Group, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Agent:

  	
   

  	
  Bank
  of America, N.A., as the administrative agent under the Credit Agreement

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Credit
  Agreement:

  	
   

  	
  Credit
  Agreement dated as of December 1, 2010 among Hanger Orthopedic
  Group, Inc., a Delaware corporation (the “Borrower”), the
  financial institutions from time to time party thereto (collectively, the “Lenders”)
  and Bank of America, N.A., as administrative agent for the Lenders

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Assigned
  Interest[s]:

  	
   

  	
   

  

 

	
  Assignor[s](6)

  	
   

  	
  Assignee[s](7)

  	
   

  	
  Facility

  Assigned(8)

  	
   

  	
  Aggregate

  Amount of

  Commitment/Loans

  for all Lenders(9)

  	
   

  	
  Amount of

  Commitment

  /Loans

  Assigned

  	
   

  	
  Percentage

  Assigned of

  Commitment/

  Loans(10)

  	
   

  	
  CUSIP

   Number

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
  $

  	
   

  	
   

  	
   

  	
  %

  	
   

  	
   

  

 

[7.          Trade Date:              ](11)

 

(6) 
List each Assignor, as appropriate.

(7) 
List each Assignee, as appropriate.

(8) 
Fill in the appropriate terminology for the types of facilities under the
Credit Agreement that are being assigned under this Assignment (e.g. “Revolving
Commitment”, “Term Commitment”, etc.).

(9) 
Amounts in this column and in the column immediately to the right to be
adjusted by the counterparties to take into account any payments or prepayments
made between the Trade Date and the Effective Date.

(10) 
Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans of
all Lenders thereunder.

(11)  To be completed if the Assignor and the
Assignee intend that the minimum assignment amount is to be determined as of
the Trade Date.

 

 

Effective
Date:
                                    ,
201     [TO BE INSERTED BY AGENT AND WHICH SHALL BE THE
EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

 

 

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

 

	
   

  	
  ASSIGNOR

  
	
   

  	
  [NAME
  OF ASSIGNOR]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  ASSIGNEE

  
	
   

  	
  [NAME
  OF ASSIGNEE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
  [Consented
  to and](12) Accepted:

  	
   

  
	
   

  	
   

  
	
  BANK
  OF AMERICA, N.A., as Agent

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [Consented to:](13)

  	
   

  
	
   

  	
   

  	
   

  
	
  HANGER ORTHOPEDIC GROUP, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

(12)  To be added only if the consent of the Agent
is required by the terms of the Credit Agreement.

(13)  To be added, as applicable, only if the
consent of the Borrower and/or other parties (e.g. Swing Line
Lender, Issuer) is required by the terms of the Credit Agreement.

 

 

	
  [BANK
  OF AMERICA, N.A., as Swing Line Lender]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
  [ISSUER]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

 

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION AGREEMENT

 

Credit
Agreement dated as of December 1, 2010 among Hanger Orthopedic Group, Inc.,
a Delaware corporation (the “Borrower”), the financial institutions from
time to time party thereto (collectively, the “Lenders”) and Bank of
America, N.A., as administrative agent for the Lenders.

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

 

1.         Representations and
Warranties.

 

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

 

1.2.      Assignee.  [The][Each] Assignee (a) represents and
warrants that (i) it has full power and authority, and has taken all
action necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby and to become a Lender under
the Credit Agreement, (ii) it is an Eligible Assignee that meets all the
requirements to be an assignee under Section 11.07(a)(iii), (v),
(vi) and (vii) of the Credit Agreement (subject to such
consents, if any, as may be required under Section 11.07(a)(iii) of
the Credit Agreement), (iii) from and after the Effective Date, it shall
be bound by the provisions of the Credit Agreement as a Lender thereunder and,
to the extent of [the][the relevant] Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it is sophisticated with respect
to decisions to acquire assets of the type represented by [the][such] Assigned
Interest and either it, or the Person exercising discretion in making its
decision to acquire [the][such] Assigned Interest, is experienced in acquiring
assets of such type, (v) it has received a copy of the Credit Agreement,
and has received or has been accorded the opportunity to receive copies of the
most recent financial statements delivered pursuant to Section 7.01
thereof, as applicable, and such other documents and information as it deems
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it
has, independently and without reliance upon the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Assignment and Assumption
and to purchase [the][such] Assigned Interest, and (vii) if it is a
Foreign Lender, attached hereto is any documentation required to be delivered
by it pursuant to the terms of the Credit Agreement, duly completed and
executed by 

 

 

[the][such] Assignee; and (b) agrees that (i) it will,
independently and without reliance upon the Agent, [the][any] Assignor or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

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

 

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

 

 

EXHIBIT E

 

FORM OF NOTE

 

	
   

  	
  , 20      

  

 

FOR
VALUE RECEIVED, HANGER ORTHOPEDIC GROUP, INC. (the “Borrower”)
HEREBY PROMISES TO PAY to the order of                                       (the
“Lender”) the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower pursuant to the Credit Agreement referred to below (as
shown in the records of the Lender or, at the Lender’s option, on the schedule
attached hereto and any continuation thereof).

 

The
undersigned further promises to pay interest on the unpaid principal amount of
each Loan evidenced hereby from the date of such Loan until such Loan is paid
in full, payable at the rates and at the times set forth in the Credit
Agreement referred to below.

 

Both
principal and interest shall be payable in accordance with the Credit Agreement
referred to below to Bank of America, N.A., as administrative agent (in such
capacity, the “Agent”), on behalf of the Lender, at the main office of
the Agent in [Dallas, Texas] in immediately available funds.

 

This Note is a Note referred to in, and is entitled to the benefits of,
the Credit Agreement dated as of November [  ], 2010 among [the Borrower] [Hanger
Orthopedic Group, Inc., a Delaware corporation], the financial institutions
from time to time party thereto (including the Lender) and Bank of America,
N.A., as Agent (as amended, restated, modified or supplemented from time to
time, the “Credit Agreement”), and the other Loan Documents. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Credit Agreement. The Credit Agreement, among other things, contains provisions
for acceleration of the maturity hereof upon the happening of certain stated
events and also for prepayments on account of principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.

 

THIS
NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW
OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAW PROVISIONS
THEREOF); PROVIDED THAT THE BORROWERS, THE AGENT AND THE LENDERS SHALL RETAIN
ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

 

The
Borrower hereby waives presentment, demand, protest or notice of any kind in
connection with this Note.

 

	
   

  	
  HANGER
  ORTHOPEDIC GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

 

Schedule A

 

Promissory
Note

 

Dated
                        ,
201     payable to the order of

 

[Lender]

 

PRINCIPAL
PAYMENTS

 

	
  Date

  	
   

  	
  Class

  	
   

  	
  Amount of

  Principal

  Borrowed

  	
   

  	
  Amount of

  Principal Repaid

  	
   

  	
  Unpaid Principal

  Balance

  	
   

  	
  Notation

  Made By

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

EXHIBIT F

 

FORM OF SECURITY AGREEMENT

 

 

Exhibit F

	
   

  

 

GUARANTEE AND COLLATERAL AGREEMENT

 

made by

 

HANGER ORTHOPEDIC GROUP, INC.,

as Borrower,

 

and certain of its Subsidiaries

in favor of

 

BANK OF AMERICA, N.A.,

as Administrative Agent

 

Dated as of December 1, 2010

 

	
   

  

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1. DEFINED TERMS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1

  	
  Definitions

  	
  1

  
	
  1.2

  	
  Other Definitional Provisions

  	
  6

  
	
   

  	
   

  	
   

  
	
  SECTION 2. GUARANTEE

  	
  6

  
	
   

  	
   

  	
   

  
	
  2.1

  	
  Guarantee

  	
  6

  
	
  2.2

  	
  Right of Contribution

  	
  8

  
	
  2.3

  	
  Subrogation

  	
  8

  
	
  2.4

  	
  Amendments, etc. with respect to the Borrower
  Obligations

  	
  8

  
	
  2.5

  	
  Guarantee Absolute and Unconditional

  	
  9

  
	
  2.6

  	
  Reinstatement

  	
  10

  
	
  2.7

  	
  Payments

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 3. GRANT OF SECURITY
  INTEREST

  	
  11

  
	
   

  	
   

  	
   

  
	
  SECTION 4. REPRESENTATIONS
  AND WARRANTIES

  	
  12

  
	
   

  	
   

  	
   

  
	
  4.1

  	
  Representations in Credit Agreement

  	
  12

  
	
  4.2

  	
  Title; No Other Liens

  	
  12

  
	
  4.3

  	
  Perfected First Priority Liens

  	
  12

  
	
  4.4

  	
  Jurisdiction of Organization; Chief Executive Office

  	
  12

  
	
  4.5

  	
  [Reserved]

  	
  12

  
	
  4.6

  	
  Farm Products

  	
  12

  
	
  4.7

  	
  Investment Property

  	
  13

  
	
  4.8

  	
  Receivables

  	
  13

  
	
  4.9

  	
  Intellectual Property

  	
  13

  
	
   

  	
   

  	
   

  
	
  SECTION 5. COVENANTS

  	
  14

  
	
   

  	
   

  	
   

  
	
  5.1

  	
  Covenants in Credit Agreement

  	
  14

  
	
  5.2

  	
  Delivery of Instruments and Chattel Paper

  	
  14

  
	
  5.3

  	
  Maintenance of Insurance

  	
  14

  
	
  5.4

  	
  Payment of Obligations

  	
  15

  
	
  5.5

  	
  Maintenance of Perfected Security Interest; Further
  Documentation

  	
  15

  
	
  5.6

  	
  Changes in Name, etc.

  	
  16

  
	
  5.7

  	
  Notices

  	
  16

  
	
  5.8

  	
  Investment Property

  	
  16

  
	
  5.9

  	
  Receivables

  	
  17

  
	
  5.10

  	
  Intellectual Property

  	
  18

  
	
  5.11

  	
  Commercial Tort Claims

  	
  19

  
	
   

  	
   

  	
   

  
	
  SECTION 6. REMEDIAL
  PROVISIONS

  	
  19

  
	
   

  	
   

  	
   

  
	
  6.1

  	
  Certain Matters Relating to Receivables

  	
  19

  
	
  6.2

  	
  Communications with Obligors; Grantors Remain Liable

  	
  20

  
	
  6.3

  	
  Pledged Stock

  	
  20

  
	
  6.4

  	
  Proceeds to be Turned Over To Administrative Agent

  	
  21

  
	
  6.5

  	
  Application of Proceeds

  	
  21

  
	
  6.6

  	
  Code and Other Remedies

  	
  22

  
	
  6.7

  	
  Sale of Pledged Stock

  	
  23

  

 

i

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  6.8

  	
  Deficiency

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 7. THE
  ADMINISTRATIVE AGENT

  	
  23

  
	
   

  	
   

  	
   

  
	
  7.1

  	
  Administrative Agent’s Appointment as
  Attorney-in-Fact, etc.

  	
  23

  
	
  7.2

  	
  Duty of Administrative Agent

  	
  25

  
	
  7.3

  	
  Execution of Financing Statements

  	
  25

  
	
  7.4

  	
  Authority of Administrative Agent

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 8. MISCELLANEOUS

  	
  26

  
	
   

  	
   

  	
   

  
	
  8.1

  	
  Amendments in Writing

  	
  26

  
	
  8.2

  	
  Notices

  	
  26

  
	
  8.3

  	
  No Waiver by Course of Conduct; Cumulative Remedies

  	
  26

  
	
  8.4

  	
  Enforcement Expenses; Indemnification

  	
  26

  
	
  8.5

  	
  Successors and Assigns

  	
  27

  
	
  8.6

  	
  Set-Off

  	
  27

  
	
  8.7

  	
  Counterparts

  	
  27

  
	
  8.8

  	
  Severability

  	
  27

  
	
  8.9

  	
  Section Headings

  	
  27

  
	
  8.10

  	
  Integration

  	
  27

  
	
  8.11

  	
  GOVERNING LAW

  	
  27

  
	
  8.12

  	
  Submission To Jurisdiction; Waivers

  	
  28

  
	
  8.13

  	
  Acknowledgements

  	
  28

  
	
  8.14

  	
  Additional Grantors

  	
  28

  
	
  8.15

  	
  Releases

  	
  28

  
	
  8.16

  	
  WAIVER OF JURY TRIAL

  	
  29

  
	
  8.17

  	
  Effectiveness of ACP Execution

  	
  29

  

 

	
  Schedules

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule
  1

  	
  Notice
  Address of Guarantors

  	
   

  
	
  Schedule
  2

  	
  Description
  of Pledged Securities

  	
   

  
	
  Schedule
  3

  	
  Filings
  and Other Actions Required to Perfect Security Interest

  	
   

  
	
  Schedule
  4

  	
  Jurisdiction
  of Organization, Identification Number and Location of Chief Executive
  Office

  	
   

  
	
  Schedule
  5

  	
  [Reserved]

  	
   

  
	
  Schedule
  6

  	
  [Reserved]

  	
   

  
	
  Schedule
  7

  	
  Intellectual
  Property

  	
   

  
	
  Schedule
  8

  	
  Intellectual
  Property Matters

  	
   

  
	
  Schedule
  9

  	
  Deposit
  Accounts

  	
   

  
	
   

  	
   

  	
   

  
	
  Annexes

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Annex
  I

  	
  Assumption
  Agreement

  	
   

  
	
  Annex
  II

  	
  [Reserved]

  	
   

  
	
  Annex
  III

  	
  Form of
  Patent Security Agreement

  	
   

  
	
  Annex
  IV

  	
  Form of
  Trademark Security Agreement

  	
   

  

 

ii

 

GUARANTEE
AND COLLATERAL AGREEMENT, dated as of December 1, 2010, made by each of
the signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of BANK of AMERICA,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of December 1, 2010, (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement,”), among HANGER ORTHOPEDIC GROUP, INC., a Delaware
corporation (the “Borrower”), the several banks and other financial
institutions or entities from time to time parties to the Credit Agreement (the
“Lenders”) and the Administrative Agent.

 

W I T N E S S E D:

 

WHEREAS,
pursuant to the Credit Agreement, the Lenders have severally agreed to make
extensions of credit to the Borrower upon the terms and subject to the
conditions set forth therein;

 

WHEREAS,
the Borrower is a member of an affiliated group of companies that includes each
other Grantor;

 

WHEREAS,
the proceeds of the extensions of credit under the Credit Agreement will be
used in part to enable the Borrower to make valuable transfers to one or more
of the other Grantors in connection with the operation of their respective
businesses;

 

WHEREAS,
certain of the Qualified Counterparties may enter into Specified Agreements
with one or more of the Grantors;

 

WHEREAS,
the Borrower and the other Grantors are engaged in related businesses, and each
Grantor will derive substantial direct and indirect benefit from the extensions
of credit under the Credit Agreement and from the Specified Agreements; and

 

WHEREAS,
it is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement that
the Grantors shall have executed and delivered this Agreement to the
Administrative Agent;

 

NOW,
THEREFORE, in consideration of the premises and to induce the Administrative
Agent and the Lenders to enter into the Credit Agreement and to induce the
Lenders to make their respective extensions of credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
benefit of the Secured Creditors, as follows:

 

SECTION 1.  DEFINED TERMS

 

1.1                                 Definitions.

 

(a)                                  Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement and the following
terms are used herein as defined in the New York UCC:  Accounts, Certificated Security, Chattel
Paper, Commercial Tort Claims, Documents, Equipment, Farm Products, General
Intangibles, Goods, Instruments, Inventory, Letter-of-Credit Rights
and Supporting Obligations.

 

(b)                                 The following
terms shall have the following meanings:

 

“Agreement”:  this
Guarantee and Collateral Agreement, as the same may be amended, supplemented or
otherwise modified from time to time.

 

 

“Borrower Credit Agreement Obligations”:  the collective reference to the unpaid
principal of and interest on the Loans and reimbursement obligations under
Letters of Credit and all other obligations and liabilities of the Borrower
(including interest and fees accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and such reimbursement
obligations and interest and fees accruing at the then applicable rate provided
in the Credit Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
and fees is allowed in such proceeding) to the Administrative Agent or any
Lender, whether direct or indirect, absolute or contingent, due or to become
due, or now existing or hereafter incurred, which may arise under, out of, or
in connection with, the Credit Agreement, this Agreement, or the other Loan
Documents, or any Letter of Credit, or any other document made, delivered or given
in connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including all fees and disbursements of counsel to the
Administrative Agent or to the Lenders that are required to be paid by the
Borrower pursuant to the terms of any of the foregoing agreements).

 

“Borrower Hedge Agreement Obligations”:  the collective reference to all obligations
and liabilities of the Borrower (including interest and fees accruing at the
then applicable rate provided in any Specified Agreement after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
to any Qualified Counterparty, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, any Specified Agreement or any
other document made, delivered or given in connection therewith, in each case
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including all fees and disbursements
of counsel to the relevant Qualified Counterparty that are required to be paid
by the Borrower pursuant to the terms of any Specified Agreement).

 

“Borrower Obligations”: 
the collective reference to (i) the Borrower Credit Agreement
Obligations, (ii) the Borrower Hedge Agreement Obligations, but only to
the extent that, and only so long as, the Borrower Credit Agreement Obligations
are secured and guaranteed pursuant hereto, and (iii) all other
obligations and liabilities of the Borrower, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this Agreement
(including all fees and disbursements of counsel to the Administrative Agent or
to the Secured Creditors that are required to be paid by the Borrower pursuant
to the terms of this Agreement).

 

“Collateral”:  as defined
in Section 3.

 

“Collateral Account”:  any
collateral account established by the Administrative Agent as provided in Section 6.1
or 6.4.

 

“Copyrights”:  all
copyrights arising under the laws of the United States, any other country or
any political subdivision thereof, whether registered, including any renewals
thereof, or unregistered and whether published or unpublished (including those
listed in Schedule 7), all registrations and recordings thereof, and all
applications in connection therewith, including all registrations, recordings
and applications in the United States Copyright Office.

 

2

 

“Copyright Licenses”:  any
written agreement naming any Grantor as licensor or licensee (including those
listed in Schedule 7), granting any right under any Copyright, including
the grant of rights to manufacture, distribute, exploit and sell materials
derived from any Copyright.

 

“Deposit Account”:  as
defined in the Uniform Commercial Code of any applicable jurisdiction and, in
any event, including any demand, time, savings, passbook or like account
maintained with a depositary institution.

 

“Excluded Account” shall mean (i) any Deposit Account
maintained with Bank of America, N.A., (ii) any Deposit Account the
balance of which is swept at the end of each Business Day into another Deposit
Account that is subject to Administrative Agent’s control (within the meaning
of Section 9-104  of the applicable
Uniform Commercial Code), and (iii) any Deposit Account the average daily
available balance of which in the aggregate, together with the average daily
available balance of all such other Deposit Accounts of all Grantors excluded
pursuant to this clause (iii), shall not exceed $5,000,000.

 

“Excluded Assets”:  the
collective reference to (i) any contract, General Intangible, Copyright
License, Patent License or Trademark License (“Intangible Assets”), or
other asset upon which a Lien is permitted pursuant to Section 8.01(f) of
the Credit Agreement in each case to the extent the grant by the relevant
Grantor of a security interest pursuant to this Agreement in such Grantor’s
right, title and interest in such Intangible Asset or other asset (A) is
prohibited by provisions of any contract, agreement, instrument or indenture
governing such Intangible Asset or other asset, or (B) would give any
other party to such contract, agreement, instrument or indenture a right to
terminate its obligations thereunder, or (C) is permitted only with the
consent of another party, if such consent has not been obtained, in each case
unless such prohibition, right or requirement to obtain consent is rendered
ineffective pursuant to Sections 9-406(d), 9-407(a), 9-408(a) or
9-409 of any applicable Uniform Commercial Code (or any successor provision or
provisions) or, if determined by a court of competent jurisdiction, any other
applicable law (including the Bankruptcy Code) or principles of equity, (ii) assets
owned by any Grantor on the date hereof or hereafter acquired and any proceeds
thereof that are subject to a Lien securing a purchase money obligations or
Capital Lease Obligations permitted to be incurred pursuant to the provisions
of the Credit Agreement (and including any refinancing thereof permitted
pursuant to the Credit Agreement) (including cross-collateralization to other
purchase money obligation or Capital Lease Obligation permitted by the Credit
Agreement and provided by the same Person and its Affiliates) to the extent and
for so long as the contract or other agreement in which such Lien is granted
(or the documentation providing for such purchase money obligation or Capital
Lease Obligation) prohibits the creation of any other Lien on such assets and
proceeds, (iii) any property of a person existing at the time such person
is (or the assets of such person are) acquired or merged with or into or
consolidated with any Grantor that is subject to a Lien permitted by Section 8.01(l) of
the Credit Agreement (and including any refinancing thereof) to the extent and
for so long as the contract or other agreement in which such Lien is granted
prohibits the creation of any other Lien on such property, (iv) any
intent-to-use trademark application to the extent and for so long as creation
by a Grantor of a security interest therein would result in the loss by such
Grantor of any material rights therein, (v) any Equity Interests of a
Foreign Subsidiary to the extent and for so long as the pledge thereof to the
Administrative Agent could result in adverse tax consequences to the Borrower; provided that this clause (v) shall
not apply to (A) Voting Stock of any Subsidiary which is a first-tier
controlled foreign corporation (as defined in Section 957(a) of the
Code) representing 66% of the total voting power of all outstanding Voting
Stock of such Subsidiary and (B) 100% of the Equity Interests not
constituting Voting Stock of any such Subsidiary, except that any such Equity Interests
constituting “stock entitled to vote” within the meaning of Treasury Regulation
Section 1.956-2(c)(2) shall be treated as Voting Stock for purposes

 

3

 

of
this clause (v); (vi) any rights or property to the extent that any
law or governmental regulation prohibits the creation or perfection of a
security interest therein; provided, that in any event any Receivable or
any money or other amounts due or to become due under any such contract,
agreement, instrument or indenture shall not be Excluded Assets to the extent
that any of the foregoing is (or if it contained a provision limiting the
transferability or pledge thereof would be) subject to Section 9-406 of
the New York UCC, and (vii) Foreign Subsidiary Voting Stock excluded from
the definition of “Pledged Stock” set forth in this Section 1.1.

 

“Foreign Subsidiary”:  any
Subsidiary organized under the laws of any jurisdiction outside the United
States of America.

 

“Foreign Subsidiary Voting Stock”:  the voting Capital Stock of any Foreign
Subsidiary.

 

“Grantor Obligations”: with respect to the Borrower, means
Borrower Obligations and with respect to any Guarantor, means such Guarantor’s
Obligations.

 

“Guarantor Hedge Agreement Obligations”:  the collective reference to all obligations
and liabilities of a Guarantor (including interest accruing at the then
applicable rate provided in any Specified Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to such Guarantor, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to any
Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, any Specified Agreement or any other document
made, delivered or given in connection therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including all fees and disbursements of counsel
to the relevant Qualified Counterparty that are required to be paid by such
Guarantor pursuant to the terms of any Specified Agreement).

 

“Guarantor Obligations”: 
with respect to any Guarantor, the collective reference to (i) any
Guarantor Hedge Agreement Obligations of such Guarantor, but only to the extent
that, and only so long as, the other Obligations of such Guarantor are secured
and guaranteed pursuant hereto, and (ii) all obligations and liabilities
of such Guarantor which may arise under or in connection with this Agreement
(including Section 2) or any other Loan Document to which such Guarantor
is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or otherwise
(including all fees and disbursements of counsel to the Administrative Agent or
to any Secured Creditors that are required to be paid by such Guarantor pursuant
to the terms of this Agreement or any other Loan Document).

 

“Guarantors”:  the
collective reference to each Grantor other than the Borrower.

 

“Intellectual Property”: 
the collective reference to all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, inventions, processes, designs, formulae, trade secrets and
know-how, computer software (including data and related documentation), other
than off-the-shelf software, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.

 

“Intercompany Note”:  any
promissory note evidencing loans made by any Grantor to the Borrower or any of
its Subsidiaries.

 

4

 

“Investment Property”: 
the collective reference to (i) all “investment property” as such
term is defined in Section 9-102(a)(49) of the New York UCC (other than
any Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Stock” in this Section 1.1) and (ii) whether or not constituting “investment
property” as so defined, all Pledged Notes and all Pledged Stock.

 

“Issuers”:  the collective
reference to each issuer of any Investment Property.

 

“Licensed Intellectual Property”:  as defined in Section 4.10.

 

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

 

“Obligations”:  (i) in
the case of the Borrower, the Borrower Obligations, and (ii) in the case
of each Guarantor, its Guarantor Obligations.

 

“Patents”:  (i) all
letters patent, including any reissues or extensions, of the United States, any
other country or any political subdivision thereof, all reissues and extensions
thereof and all goodwill associated therewith, including any of the foregoing
referred to in Schedule 7, and (ii) all applications for letters
patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including any of the foregoing
referred to in Schedule 7.

 

“Patent License”:  any
agreement, whether written or oral, providing for the grant by or to any
Grantor of any right to manufacture, use or sell any invention covered in whole
or in part by a Patent, including any of the foregoing referred to in Schedule
7.

 

“Pledged Notes”:  all
promissory notes listed on Schedule 2, all Intercompany Notes at any
time issued to any Grantor and all other promissory notes issued to or held by
any Grantor (other than promissory notes issued in connection with extensions
of trade credit by any Grantor in the ordinary course of business).

 

“Pledged Securities”:  the
collective reference to the Pledged Notes and the Pledged Stock.

 

“Pledged Stock”:  the
shares of Capital Stock held by any Grantor (including those listed on Schedule
2), together with any other shares, stock certificates, options or rights
of any nature whatsoever in respect of the Capital Stock of any Person that may
be issued or granted to, or held by, any Grantor while this Agreement is in
effect; provided that in no event shall more than 66% of the total outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be required to be
pledged hereunder.

 

“Proceeds”:  all “proceeds”
as such term is defined in Section 9-102(a)(64) of the Uniform Commercial
Code in effect from time to time in the State of New York and, in any event,
including all dividends or other income from the Investment Property,
collections thereon or distributions or payments with respect thereto.

 

“Qualified Counterparty”: 
with respect to any Specified Agreement, any counterparty thereto that,
at the time such Specified Agreement was entered into, was a Lender or an
Affiliate of a Lender.

 

5

 

“Receivable”:  any right
to payment for goods sold, leased, licensed, assigned or otherwise disposed of,
or for services rendered, whether or not such right is evidenced by an
Instrument or Chattel Paper and whether or not it has been earned by
performance (including any Account).

 

“Securities Act”:  the
Securities Act of 1933, as amended.

 

“Specified Agreement”: 
any Rate Swap Document or Cash Management Agreement entered into by (i) the
Borrower or any Guarantor and (ii) any Qualified Counterparty.

 

“Trademarks”:  all
registered and unregistered trademarks, trade names, corporate names, company
names, business names, Internet domain names, fictitious business names,
trade styles, service marks, logos and other source or business identifiers,
including any renewals thereof, and all goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office, any State thereof or any other country or
any political subdivision thereof, or otherwise, and all common-law rights
related thereto, including any of the foregoing referred to in Schedule 7.

 

“Trademark License”:  any
agreement, whether written or oral, providing for the grant by or to any
Grantor of any right to use any Trademark, including any of the foregoing
referred to in Schedule 7.

 

“Vehicles”:  all cars,
trucks, trailers, construction and earth moving equipment and other vehicles
covered by a certificate of title law of any state and all tires and other
appurtenances to any of the foregoing.

 

1.2                                 Other
Definitional Provisions.

 

(a)                                  The words “hereof,”
“herein,” “hereto” 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 and Schedule
references are to this Agreement unless otherwise specified.

 

(b)                                 The meanings
given to terms defined herein shall be equally applicable to both the singular
and plural forms of such terms.

 

(c)                                  The terms “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation.”

 

(d)                                 Where the
context requires, terms relating to the Collateral or any part thereof, when
used in relation to a Grantor, shall refer to such Grantor’s Collateral or the
relevant part thereof.

 

SECTION 2.  GUARANTEE

 

2.1                                 Guarantee.

 

(a)                                  (i)  The
Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantee to the Administrative Agent, for the ratable benefit of the Secured
Creditors and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Borrower when due
(whether at stated maturity, by acceleration or otherwise) of the Borrower
Obligations (other than, in the case of each Guarantor, Borrower Obligations
arising pursuant to clause (ii) of 

 

6

 

this Section 2.1(a) in respect of
Guarantor Hedge Agreement Obligations in respect of which such Guarantor is a
primary obligor).

 

(ii)                                  The Borrower hereby
unconditionally and irrevocably guarantees to the Administrative Agent, for the
ratable benefit of the Secured Creditors and their respective successors,
endorsees, transferees and assigns, the prompt and complete payment and
performance by each Guarantor when due (whether at stated maturity, by
acceleration or otherwise) of the Guarantor Hedge Agreement Obligations of such
Guarantor.

 

(b)                                 Anything herein
or in any other Loan Document to the contrary notwithstanding, (i) the
maximum liability of each Guarantor hereunder and under the other Loan
Documents shall in no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to fraudulent
conveyances or transfers or the insolvency of debtors (after giving effect to
the right of contribution established in Section 2.2) and (ii) the
maximum liability of the Borrower under this Section 2 shall in no event
exceed the amount which can be guaranteed by the Borrower under applicable
federal and state laws relating to fraudulent conveyances or transfers or the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

 

(c)                                  (i)  Each
Guarantor agrees that the Borrower Obligations may at any time and from time to
time exceed the amount of the liability of such Guarantor hereunder without
impairing the guarantee of such Guarantor contained in this Section 2 or
affecting the rights and remedies of the Administrative Agent or any other
Secured Creditor hereunder.

 

(ii)                                  The Borrower agrees that the
Guarantor Hedge Agreement Obligations may at any time and from time to time
exceed the amount of the liability of the Borrower under this Section 2
without impairing the guarantee of the Borrower contained in this Section 2
or affecting the rights and remedies of the Administrative Agent or any other
Secured Creditor hereunder.

 

(d)                                 Subject to Section 8.15
hereof, the guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations (other than Borrower
Obligations arising under Section 2.1(a)(ii) hereof) and the
obligations of each Guarantor under the guarantee contained in this Section 2
(other than Guarantor Obligations in respect of Borrower Obligations arising
under Section 2.1(a)(ii) hereof) shall have been satisfied by full
and final payment in cash, no Letter of Credit shall be outstanding (unless
cash collateralized on terms acceptable to the L/C Issuer or such Letter of
Credit becomes a Supported Letter of Credit) and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrower may be free from any Borrower Obligations and any or all of the
Guarantors may be free from their respective Guarantor Hedge Agreement
Obligations.

 

(e)                                  No payment made
by the Borrower, any of the Guarantors, any other guarantor or any other Person
or received or collected by the Administrative Agent or any Secured Creditor
from the Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of or in payment of
the Borrower Obligations or the Guarantor Hedge Agreement Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Borrower or any Guarantor under this Section 2 which shall,
notwithstanding any such payment (other than any payment made by the Borrower
or such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations or any payment received or collected from the Borrower or
such Guarantor in respect of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations, respectively), remain liable for the Borrower
Obligations and the Guarantor Hedge Agreement Obligations up to the maximum
liability of the Borrower or such Guarantor hereunder until the Borrower
Obligations and the Guarantor Hedge Agreement Obligations

 

7

 

are fully and finally paid in cash, no Letter of
Credit shall be outstanding and the Commitments are terminated.

 

2.2                                 Right of
Contribution.

 

(a)                                  Each Guarantor
hereby agrees that to the extent that a Guarantor shall have paid more than its
proportionate share of any payment made hereunder or the Guarantor Hedge
Agreement Obligations, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid
its proportionate share of such payment.

 

(b)                                 The Borrower and
each Guarantor agrees that to the extent that the Borrower or any Guarantor
shall have paid more than its proportionate share of any payment made hereunder
in respect of any Guarantor Hedge Agreement Obligation of any other Guarantor,
the Borrower or such Guarantor, as the case may be, shall be entitled to seek
and receive contribution from and against the Borrower and any other Guarantor
which has not paid its proportionate share of such payment.

 

(c)                                  The Borrower’s
and each Guarantor’s right of contribution under this Section 2.2 shall be
subject to the terms and conditions of Section 2.3.  The provisions of this Section 2.2 shall
in no respect limit the obligations and liabilities of the Borrower or any
Guarantor to the Administrative Agent and the Secured Creditor, and the
Borrower and each Guarantor shall remain liable to the Administrative Agent and
the Secured Creditor for the full amount guaranteed by the Borrower or such
Guarantor hereunder.

 

2.3                                 Subrogation.  Notwithstanding any payment made by the
Borrower or any Guarantor hereunder or any set- off or application of funds of
the Borrower or any Guarantor by the Administrative Agent or any Secured
Creditor, neither the Borrower nor any Guarantor shall be entitled to be
subrogated to any of the rights of the Administrative Agent or any Secured
Creditor against the Borrower or any other Guarantor or any collateral security
or guarantee or right of offset held by the Administrative Agent or any Secured
Creditor for the payment of the Borrower Obligations or the Guarantor Hedge
Agreement Obligations, nor shall the Borrower or any Guarantor seek or be
entitled to seek any contribution or reimbursement from the Borrower or any
other Guarantor in respect of payments made by the Borrower or such Guarantor hereunder,
until all amounts owing to the Administrative Agent and the Secured Creditors
by the Borrower on account of the Borrower Obligations are fully and finally
paid in cash, no Letter of Credit shall be outstanding (unless cash
collateralized on terms acceptable to the L/C Issuer or such Letter of Credit
becomes a Supported Letter of Credit) and the Commitments are terminated.  If any amount shall be paid to the Borrower
or any Guarantor on account of such subrogation rights at any time when all of
the Borrower Obligations shall not have been fully and finally paid in cash,
such amount shall be held by the Borrower or such Guarantor in trust for the
Administrative Agent and the Secured Creditors, segregated from other funds of
the Borrower or such Guarantor, and shall, forthwith upon receipt by the
Borrower or such Guarantor, be turned over to the Administrative Agent in the
exact form received by the Borrower or such Guarantor (duly indorsed by the
Borrower or such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations or the Guarantor Hedge Agreement
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.

 

2.4                                 Amendments, etc.
with respect to the Borrower Obligations.  The Borrower and each Guarantor shall remain
obligated hereunder notwithstanding that, without any reservation of rights
against the Borrower or any Guarantor and without notice to or further assent
by the Borrower or any Guarantor, any demand for payment of any of the Borrower
Obligations or Guarantor Hedge Agreement Obligations made by the Administrative
Agent or any Secured Creditor may be rescinded by the Administrative Agent or
such Secured Creditor and any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations continued, and the Borrower Obligations or Guarantor
Hedge Agreement Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor

 

8

 

or right of offset with respect thereto, may, from
time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any Secured Creditor (with the consent of such of the Borrower and the
Guarantors as shall be required thereunder), and the Specified Agreements, the
Credit Agreement and the other Loan Documents and any other documents executed
and delivered in connection therewith may be amended, modified, supplemented or
terminated, in whole or in part, as the Administrative Agent (or the Required
Lenders or all Lenders, as the case may be) may (with the consent of such of
the Borrower and the Guarantors as shall be required thereunder) deem advisable
from time to time, and any collateral security, guarantee or right of offset at
any time held by the Administrative Agent or any Secured Creditor for the
payment of the Borrower Obligations or Guarantor Hedge Agreement Obligations
may (with the consent of such of the Borrower and the Guarantor as shall be
required thereunder) be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor any
Secured Creditor shall, except to the extent set forth in, and for the benefit
of the parties to, the agreements and instruments governing such Lien or
guarantee, have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Borrower Obligations or Guarantor
Hedge Agreement Obligations or for the guarantees contained in this Section 2
or any property subject thereto.

 

2.5                                 Guarantee
Absolute and Unconditional.

 

(a)                                  Each Guarantor
waives any and all notice of the creation, renewal, extension or accrual of any
of the Borrower Obligations (other than any notice with respect to any
Guarantor Hedge Agreement Obligation with respect to which such Guarantor is a
primary obligor and to which it is entitled pursuant to the applicable
Specified Agreement) and notice of or proof of reliance by the Administrative
Agent or any Secured Creditor upon the guarantee contained in this Section 2
or acceptance of the guarantee contained in this Section 2; the Borrower
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Secured Creditors, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
the guarantee contained in this Section 2. 
Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Borrower or any of
the Guarantors with respect to the Borrower Obligations (other than any
diligence, presentment, protest, demand or notice with respect to any Guarantor
Hedge Agreement Obligation with respect to which such Guarantor is a primary
obligor and to which it is entitled pursuant to the applicable Specified
Agreement).  Each Guarantor understands
and agrees that the guarantee of such Guarantor contained in this Section 2
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to (a) the validity or enforceability of the Credit
Agreement or any other Loan Document, any of the Borrower Obligations or any
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Secured Creditor, (b) any defense, set-off or counterclaim (other than
a defense of payment or performance) which may at any time be available to or
be asserted by the Borrower or any other Person against the Administrative
Agent or any Secured Creditor, or (c) any other circumstance whatsoever
(with or without notice to or knowledge of the Borrower or such Guarantor)
which constitutes, or might be construed to constitute, an equitable or legal
discharge of the Borrower for the Borrower Obligations, or of such Guarantor
under the guarantee of such Guarantor contained in this Section 2, in
bankruptcy or in any other instance. 
When making any demand hereunder or otherwise pursuing its rights and
remedies hereunder against any Guarantor, the Administrative Agent or any
Secured Creditor may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
the Borrower, any other Guarantor or any

 

9

 

other Person or against any collateral security or
guarantee for the Borrower Obligations or any right of offset with respect
thereto, and any failure by the Administrative Agent or any Secured Creditor to
make any such demand, to pursue such other rights or remedies or to collect any
payments from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of the Borrower, any other Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve any Guarantor of any obligation or liability under this Section 2,
and shall not impair or affect the rights and remedies, whether express,
implied or available as a matter of law, of the Administrative Agent or any
Secured Creditor against any Guarantor. 
For the purposes hereof “demand” shall include the commencement and
continuance of any legal proceedings.

 

(b)                                 The Borrower
waives any and all notice of the creation, renewal, extension or accrual of any
of the Guarantor Hedge Agreement Obligations and notice of or proof of reliance
by the Administrative Agent or any Secured Creditor upon the guarantee by the
Borrower contained in this Section 2 or acceptance of the guarantee by the
Borrower contained in this Section 2; the Guarantor Hedge Agreement
Obligations, and any of them, shall conclusively be deemed to have been
created, contracted or incurred, or renewed, extended, amended or waived, in
reliance upon the guarantee by the Borrower contained in this Section 2;
and all dealings between the Borrower and any of the Guarantors, on the one
hand, and the Administrative Agent and the Secured Creditors, on the other
hand, with respect to any Guarantor Hedge Agreement Obligation likewise shall
be conclusively presumed to have been had or consummated in reliance upon the
guarantee by the Borrower contained in this Section 2.  The Borrower waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Borrower with respect to the Guarantor Hedge Agreement Obligations.  The Borrower understands and agrees that the guarantee
by the Borrower contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Guarantor Hedge Agreement Obligations or any
other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or
any Secured Creditor, (b) any defense, set-off or counterclaim (other than
a defense of payment or performance) which may at any time be available to or
be asserted by any Person against the Administrative Agent or any Secured
Creditor, or (c) any other circumstance whatsoever (with or without notice
to or knowledge of the Borrower or any Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the applicable
Guarantor for the applicable Guarantor Hedge Agreement Obligations, or of the
Borrower under its guarantee contained in this Section 2, in bankruptcy or
in any other instance.  When making any
demand under this Section 2 or otherwise pursuing its rights and remedies
under this Section 2 against the Borrower, the Administrative Agent or any
Secured Creditor may, but shall be under no obligation to, make a similar
demand on or otherwise pursue such rights and remedies as it may have against
any Guarantor or any other Person or against any collateral security or
guarantee for the Guarantor Hedge Agreement Obligations or any right of offset
with respect thereto, and any failure by the Administrative Agent or any Secured
Creditor to make any such demand, to pursue such other rights or remedies or to
collect any payments from any Guarantor or any other Person or to realize upon
any such collateral security or guarantee or to exercise any such right of
offset, or any release of any Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not relieve the
Borrower of any obligation or liability under this Section 2, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Administrative Agent or any Secured
Creditor against the Borrower under this Section 2.  For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

2.6                                 Reinstatement.  The guarantee contained in this Section 2
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Borrower Obligations or
Guarantor Hedge Agreement Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Secured Creditor upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or any Guarantor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Borrower or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.

 

10

 

2.7                                 Payments.  The Borrower and each Guarantor hereby
guarantees that payments by it hereunder will be paid to the Administrative
Agent without set-off or counterclaim (i) in the case of obligations in respect
of Borrower Obligations arising under the Credit Agreement or any other Loan
Document in Dollars at the Agent’s Payment Office specified in the Credit
Agreement and (ii) in the case of obligations in respect of any Borrower Hedge
Agreement Obligations or any Guarantor Hedge Agreement Obligations, in the
currency and at the place specified in the applicable Specified Agreement.

 

SECTION 3.  GRANT OF SECURITY INTEREST

 

Each
Grantor hereby assigns and transfers to the Administrative Agent, and hereby
grants to the Administrative Agent, for the benefit of the Secured Creditors, a
security interest in, all of the following property now owned or at any time
hereafter acquired by such Grantor or in which such Grantor now has or at any
time in the future may acquire any right, title or interest (collectively, but
excluding the Excluded Assets, the “Collateral”), as collateral security
for the prompt and complete payment and performance when due (whether at the
stated maturity, by acceleration or otherwise) of such Grantor’s Obligations:

 

(a)                                  all Accounts;

 

(b)                                 all Chattel
Paper;

 

(c)                                  all Deposit
Accounts;

 

(d)                                 all Documents;

 

(e)                                  all Equipment;

 

(f)                                    all General
Intangibles;

 

(g)                                 all
Instruments;

 

(h)                                 all
Intellectual Property;

 

(i)                                     all Inventory;

 

(j)                                     all Investment
Property;

 

(k)                                  all
Letter-of-Credit Rights;

 

(l)                                     all Commercial
Tort Claims to the extent they have been notified to the Administrative Agent
pursuant to Section 5.11;

 

(m)                               all Goods and
other property not otherwise described above;

 

(n)                                 all books and
records pertaining to the Collateral; and

 

(o)                                 to the extent
not otherwise included, all Proceeds and products of any and all of the
foregoing, all Supporting Obligations in respect of any of the foregoing and
all collateral security and guarantees given by any Person with respect to any
of the foregoing; provided that the Collateral shall not include any
Excluded Assets.

 

11

 

SECTION 4.  REPRESENTATIONS AND WARRANTIES

 

To
induce the Administrative Agent and the Lenders to enter into the Credit
Agreement and to induce the Lenders to make their respective extensions of
credit to the Borrower thereunder, each Grantor hereby represents and warrants
to the Administrative Agent and each Lender that:

 

4.1                                 Representations
in Credit Agreement.  In the case
of each Guarantor, the representations and warranties set forth in Article VI
of the Credit Agreement as they relate to such Guarantor or to the Loan
Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the Administrative
Agent and each Lender shall be entitled to rely on each of them as if they were
made by such Guarantor and fully set forth herein, provided that each
reference in each such representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 4.1, be deemed to be a reference to
such Guarantor’s knowledge.

 

4.2                                 Title; No Other
Liens.  Except for the security
interest granted to the Administrative Agent for the benefit of the Secured
Creditors pursuant to this Agreement and the other Liens permitted to exist on
the Collateral by the Credit Agreement, such Grantor owns each item of the
Collateral free and clear of any and all Liens. 
On the date hereof, no financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Secured Creditors, pursuant to this
Agreement or as are permitted by the Credit Agreement.  For the avoidance of doubt, it is understood
and agreed that any Grantor may, as part of its business, grant licenses to
third parties to use Intellectual Property owned or developed by a
Grantor.  For purposes of this Agreement
and the other Loan Documents, such licensing activity shall not constitute a “Lien”
on Intellectual Property.

 

4.3                                 Perfected First
Priority Liens.  Except for
Deposit Accounts and for securities accounts, assets credited thereto and
security entitlements in respect thereof, in each case as to which Section
5.5 hereof does not require the delivery of a control agreement, the
security interests granted pursuant to this Agreement (a) upon completion of
the filings and other actions specified on Schedule 3 (which, in the
case of all filings and other documents referred to on said Schedule and
required to be delivered hereunder, have been delivered to the Administrative
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral for which a lien can be perfected
by the filing of a financing statement or by possession, control or filings
with the USPTO or the United States Copyright Office in favor of the
Administrative Agent, for the benefit of the Secured Parties, as collateral
security for such Grantor’s Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting
to purchase any Collateral from such Grantor and except buyers in the ordinary
course that take free of liens pursuant to the UCC and (b) are prior to all
other Liens on the Collateral in existence on the date hereof except for Liens
permitted by the Credit Agreement.

 

4.4                                 Jurisdiction of
Organization; Chief Executive Office.  On the date hereof, such Grantor’s correct
legal name, jurisdiction of organization, organizational identification number
(if any) from its jurisdiction of organization, and the location of such
Grantor’s chief executive office or sole place of business, as the case may be,
are specified on Schedule 4.  On
the date hereof, such Grantor has furnished to the Administrative Agent a
certified charter, certificate of incorporation or other organization document
and good standing certificate as of a date which is recent to the date hereof.

 

4.5                                 [Reserved].

 

4.6                                 Farm Products.  None of the Collateral constitutes, or is the
Proceeds of, Farm Products.

 

12

 

4.7                                 Investment
Property.

 

(a)                                  The shares of
Pledged Stock pledged by such Grantor hereunder constitute all the issued and
outstanding shares of all classes of the Capital Stock of each Issuer owned by
such Grantor (other than any shares that constitute Excluded Assets) or, in the
case of Foreign Subsidiary Voting Stock, if less, 66% of the outstanding
Foreign Subsidiary Voting Stock of each relevant Issuer.

 

(b)                                 All the shares
of the Pledged Stock have been duly and validly issued and are fully paid and
nonassessable.

 

(c)                                  Each of the
Pledged Notes issued by any Loan Party and to such Grantor’s knowledge, each of
the Pledged Notes issued by any other Person, constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.

 

(d)                                 Such Grantor is
the record and beneficial owner of, and has good and marketable title to, the
Investment Property pledged by it hereunder, free of any and all Liens or
options in favor of, any other Person, except the security interest created by
this Agreement and Liens permitted by the Credit Agreement.

 

4.8                                 Receivables.

 

(a)                                  No amount
payable to such Grantor under or in connection with any Receivable is evidenced
by any Instrument or Chattel Paper which has not been (or will be) delivered to
the Administrative Agent to the extent required by Section 5.2.

 

(b)                                 Excluding
obligors with respect to Medicare and Medicaid Receivables, none of the
obligors on any Receivable is a Governmental Authority, except for Receivables
constituting not more than 5% of the face amount of all Receivables.

 

(c)                                  The amounts
represented by such Grantor to the Secured Creditors from time to time as owing
to such Grantor in respect of the Receivables will at such times be accurate in
all material respects.

 

4.9                                 Intellectual
Property.

 

(a)                                  Schedule 7 lists the
registered Intellectual Property (other than trade secrets) owned by such
Grantor in its own name on the date hereof that is registered or applied for
with the United States Patent and Trademark Office or United States Copyright
Office.

 

(b)                                 On the date
hereof, all material Intellectual Property of such Grantor described on Schedule
7 is in compliance in all material respects with applicable legal
requirements (including payment of maintenance fees and the like) and, to the
best of such Grantor’s knowledge, all such rights are valid, subsisting, and
enforceable, except in each case to the extent the failure to be in such
compliance would not have a Material Adverse Effect.

 

(c)                                  On the date
hereof, to the best of such Grantor’s knowledge, the conduct by such Grantor of
its business does not infringe upon, misappropriate, constitute an unauthorized
use of or otherwise violate the Intellectual Property rights of any other
Person except to the extent such violation would not have a Material Adverse
Effect.  Except as set forth in Schedule
8, no claim or demand of any Person has

 

13

 

been made in writing, nor is there any proceeding
that is pending or to the knowledge of such Grantor threatened in writing,
which (in any such case) (i) challenges the rights of such Grantor in respect
of any Intellectual Property or (ii) asserts that such Grantor is infringing
upon, misappropriating, making an unauthorized use of or otherwise violating or
in conflict with, or is required to pay any royalty, license fee, charge or
other amount with regard to, any Intellectual Property, except with respect to
clause (i) or (ii) as would not have a Material Adverse Effect.

 

(d)                                 Except as set
forth in Schedule 7, on the date hereof, none of the Intellectual
Property is the subject of any licensing or franchise agreement pursuant to
which such Grantor is the licensor or franchisor.

 

(e)                                  None of the
Intellectual Property described in Schedule 8 is subject to any
outstanding order, ruling, decree, judgment or stipulation which would limit,
cancel or call into question the validity of, or such Grantor’s rights in, the
Intellectual Property in any respect that could reasonably be expected to have
a Material Adverse Effect.

 

(f)                                    Except as set
forth in Schedule 8, no action or proceeding is pending, or, to the
knowledge of such Grantor, threatened, on the date hereof (i) seeking to limit,
cancel or question the validity of any material Intellectual Property or such
Grantor’s ownership interest therein, or (ii) which is reasonably expected to
have a material adverse effect on the value of any Intellectual Property.

 

SECTION 5.  COVENANTS

 

Each
Grantor covenants and agrees with the Administrative Agent and the Secured
Creditors that, from and after the date of this Agreement until the Obligations
(other than any contingent indemnification or similar obligation not yet due
and payable, and any Obligation owing under any Rate Swap Document or Cash
Management Agreement) shall have been paid in full, no Letter of Credit shall
be outstanding (unless cash collateralized on terms acceptable to the L/C
Issuer or such Letter of Credit becomes a Supported Letter of Credit) and the
Commitments shall have terminated:

 

5.1                                 Covenants in
Credit Agreement.  In the case
of each Guarantor, such Guarantor shall take, or shall refrain from taking, as
the case may be, each action that is necessary to be taken or not taken by it,
as the case may be, so that no Default or Event of Default is caused by the
failure to take such action or to refrain from taking such action by such
Guarantor or any of its Subsidiaries.

 

5.2                                 Delivery of
Instruments and Chattel Paper.  If any amount payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, such Instrument, Certificated Security
or Chattel Paper shall be immediately delivered to the Administrative Agent,
duly indorsed in a manner satisfactory to the Administrative Agent, to be held
as Collateral pursuant to this Agreement; provided, that the Grantors
shall not be obligated to deliver to the Administrative Agent any Instruments
or Chattel Paper held by any Grantor at any time to the extent that the
aggregate face amount of all such Instruments and Chattel Paper held by such
Grantor at such time does not exceed $2,000,000.

 

5.3                                 Maintenance of
Insurance.

 

(a)                                  Except to the
extent the failure to so maintain could not reasonably be expected to have a
Material Adverse Effect, each Grantor shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by

 

14

 

such other Persons; provided that self
insurance of risks and in amounts customary in the Borrower’s and its
Subsidiaries’ industry shall be permitted; provided, further,
that all such insurance shall (i) provide for not less than 30 days’ prior
notice to the Administrative Agent of termination, lapse or cancellation of
such insurance, (ii) name the Administrative Agent as additional insured
on behalf of the Secured Creditors (in the case of liability insurance) or loss
payee (in the case of property insurance), as applicable and (iii) be reasonably
satisfactory in all other respects to the Administrative Agent.

 

(b)                                 Upon the
Administrative Agent’s request, the Borrower shall deliver to the
Administrative Agent a report of a reputable insurance broker with respect to
such insurance and such supplemental reports with respect thereto as the
Administrative Agent may from time to time reasonably request.

 

5.4                                 Payment of
Obligations.  Such
Grantor will pay and discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all material taxes,
assessments and governmental charges or levies imposed upon the Collateral
unless the same is being contested in good faith by appropriate action and
reserves in conformity with GAAP with respect thereto have been provided on the
books of such Grantor.

 

5.5                                 Maintenance of
Perfected Security Interest; Further Documentation.

 

(a)                                  Such Grantor
shall maintain the security interest created by this Agreement as a perfected
security interest having at least the priority described in Section 4.3 and
shall defend such security interest against the claims and demands of all
Persons whomsoever (other than those holding Liens permitted by the Credit
Agreement).

 

(b)                                 In addition to
the obligations of the Borrower under the Credit Agreement, after the
occurrence and during the continuance of an Event of Default, such Grantor will
furnish to the Administrative Agent and the Lenders from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor and such other reports in connection with the
Collateral as the Administrative Agent may reasonably request, all in
reasonable detail.

 

(c)                                  To each Grantor’s
knowledge, each of such Grantor’s Deposit Accounts existing on the date hereof
is set forth on Schedule 9 and such Grantor will on the Closing Date
execute and deliver to the Administrative Agent Deposit Account control
agreements in favor of the Administrative Agent with respect to each such
Deposit Account (other than the Excluded Accounts) in a form reasonably
satisfactory to the Administrative Agent.

 

(d)                                 Such Grantor
will execute and deliver to the Administrative Agent from time to time,
promptly (and in any event within 45 days) after opening any new Deposit
Account (other than an Excluded Account), a Deposit Account control agreement
in favor of the Administrative Agent with respect to such new Deposit Account
(other than an Excluded Account) in a form reasonably satisfactory to the
Administrative Agent.

 

(e)                                  At any time and
from time to time, upon the written request of the Administrative Agent, and at
the sole expense of such Grantor, such Grantor will promptly and duly execute
and deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including (i) the filing of any financing
or continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any jurisdiction with respect to the security interests
created hereby and (ii) in the case of Investment Property, Deposit Accounts
and Letter-of-Credit Rights, taking, to the extent required by the Credit
Agreement or herein,

 

15

 

any actions necessary to enable the Administrative
Agent to obtain “control” (within the meaning of the applicable Uniform
Commercial Code) with respect thereto.

 

5.6                                 Changes in Name,
etc.  Such Grantor will not, except
upon 15 days’ prior written notice to the Administrative Agent and delivery to
the Administrative Agent of all additional executed financing statements and
other documents reasonably requested by the Administrative Agent to maintain
the validity, perfection and priority of the security interests provided for
herein:

 

(a)                                  change its
jurisdiction of organization or the location of its chief executive office or
sole place of business from that referred to in Section 4.4; or

 

(b)                                 change its
name.

 

5.7                                 Notices.  Such Grantor will advise the Administrative
Agent and the Lenders promptly, in reasonable detail, of:

 

(a)                                  any Lien (other
than security interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would adversely affect the ability of
the Administrative Agent to exercise any of its remedies hereunder; and

 

(b)                                 the occurrence
of any other event which could reasonably be expected to have a material
adverse effect on the aggregate value of the Collateral or on the security
interests created hereby.

 

5.8                                 Investment
Property.

 

(a)                                  If such Grantor
shall become entitled to receive or shall receive any certificate (including
any certificate representing a dividend or a distribution in connection with
any reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer pledged hereunder, whether in addition to, in
substitution of, as a conversion of, or in exchange for, any shares of the
Pledged Stock, or otherwise in respect thereof, such Grantor shall accept the
same as the agent of the Administrative Agent and the Secured Creditors, hold
the same in trust for the Administrative Agent and the Secured Creditors and
deliver the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor to the Administrative Agent, if
required, together with an undated stock power covering such certificate duly
executed in blank by such Grantor and with, if the Administrative Agent so
requests, signature guaranteed, to be held by the Administrative Agent, subject
to the terms hereof, as additional collateral security for the Obligations.  Any sums paid upon or in respect of
Investment Property pledged hereunder upon the liquidation or dissolution of
any Issuer other than a Grantor shall be paid over to the Administrative Agent
to be held by it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of
Investment Property, or any property shall be distributed upon or with respect
to the Investment Property not issued by a Grantor pursuant to the
recapitalization or reclassification of the capital of such Issuer or pursuant
to the reorganization thereof, the property so distributed shall, unless
otherwise subject to a perfected security interest in favor of the
Administrative Agent, be delivered to the Administrative Agent to be held by it
hereunder as additional collateral security for the Obligations.  If any sums of money or property so paid or
distributed in respect of Investment Property pledged hereunder shall be
received by such Grantor, such Grantor shall, until such money or property is
paid or delivered to the Administrative Agent, hold such money or property in
trust for the Secured Creditors, segregated from other funds of such Grantor,
as additional collateral security for the Obligations.  Notwithstanding the foregoing, the Grantors
shall not be required to pay over to the Administrative Agent or deliver to the
Administrative Agent as Collateral any proceeds of any liquidation or
dissolution of any Issuer, or any 

 

16

 

distribution of capital or property in respect of
any Investment Property, to the extent that (i) such liquidation, dissolution
or distribution, if treated as a Disposition of the relevant Issuer or of such
Investment Property, would be permitted by the Credit Agreement and (ii) the
proceeds thereof are applied toward prepayment of Loans and reduction of
Commitments to the extent required by the Credit Agreement.  For the avoidance of doubt, nothing under
this Section 5.8(a) shall apply to any Excluded Assets.

 

(b)                                 Without the
prior written consent of the Administrative Agent, such Grantor will not with
respect to any Investment Property constituting Collateral (i) vote to
enable, or take any other action to permit, any Issuer to issue any stock or
other equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any stock or
other equity securities of any nature of any Issuer, unless such securities are
delivered to the Administrative Agent, concurrently with the issuance thereof,
to be held by the Administrative Agent as Collateral, (ii) sell, assign,
transfer, exchange, or otherwise dispose of, or grant any option with respect
to, the Investment Property or Proceeds thereof (except pursuant to a
transaction permitted (or not prohibited) by the Credit Agreement), (iii)
create, incur or permit to exist any Lien with respect to, any of the
Investment Property or Proceeds thereof, or any interest therein, except for
Permitted Liens or (iv) enter into any agreement or undertaking restricting the
right or ability of such Grantor or the Administrative Agent to sell, assign or
transfer any of the Pledged Securities or Proceeds thereof other than in
connection with a transaction permitted by the Credit Agreement.

 

(c)                                  In the case of
each Grantor which is an Issuer with respect to any Investment Property
constituting Collateral, such Issuer agrees that (i) it will be bound by the
terms of this Agreement relating to the Pledged Securities issued by it and
will comply with such terms insofar as such terms are applicable to it, (ii) it
will notify the Administrative Agent promptly in writing of the occurrence of
any of the events described in Section 5.8(a) with respect to the Pledged
Securities issued by it and (iii) the terms of Sections 6.3(c) and 6.7 shall
apply to it, mutatis mutandis, with respect
to all actions that may be required of it pursuant to Section 6.3(c) or 6.7
with respect to the Pledged Securities issued by it.

 

(d)                                 Each Issuer
with respect to any Investment Property constituting Collateral that is a
partnership or a limited liability company (i) confirms that none of the terms
of any equity interest issued by it provides that such equity interest is a “security”
within the meaning of Sections 8-102 and 8-103 of the New York UCC (a “Security”),
(ii) agrees that it will take no action to cause or permit any such equity
interest to become a Security, (iii) agrees that it will not issue any
certificate representing any such equity interest and (iv) agrees that if,
notwithstanding the foregoing, any such equity interest shall be or become a
Security, such Issuer will (and the Grantor that holds such equity interest
hereby instructs such Issuer to) comply with instructions originated by the Administrative
Agent with respect to such equity interests (or with respect to any additions
thereto or replacements or proceeds thereof whether now existing or hereafter
acquired) during the continuance of an Event of Default, without further
consent by such Grantor.

 

5.9                                 Receivables.

 

(a)                                  Other than in
the ordinary course of business consistent with its past practice, or otherwise
in its best business judgment, such Grantor will not (i) grant any extension of
the time of payment of any Receivable, (ii) compromise or settle any Receivable
for less than the full amount thereof, (iii) release, wholly or partially, any
Person liable for the payment of any Receivable, (iv) allow any credit or
discount whatsoever on any Receivable or (v) amend, supplement or modify any
Receivable in any manner that could adversely affect the value thereof.

 

(b)                                 Such Grantor
will deliver to the Administrative Agent a copy of each material demand, notice
or document received by it that questions or calls into doubt the validity or
enforceability of more

 

17

 

than 5% of the aggregate amount of the then
outstanding Receivables (excluding Medicare and Medicaid Receivables).

 

5.10                           Intellectual
Property.

 

(a)                                  Such Grantor
(either itself or through licensees) will (i) continue to use each material
Trademark owned by it in each international class for the goods and/or services
set forth in its applications or registrations to maintain such Trademark in
full force, free from any claim of abandonment for non-use, (ii) maintain the
past quality of products and services offered under such Trademark, (iii) use
such Trademark with the appropriate notice of registration and all other
notices and legends required by applicable Requirements of Law, (iv) not adopt
or use any mark which is confusingly similar or a colorable imitation of such
Trademark unless the Administrative Agent, for the ratable benefit of the
Secured Creditors, shall obtain a perfected security interest in such mark
pursuant to this Agreement, and (v) not (and not authorize any licensee or
sublicensee thereof to) knowingly do any act or knowingly omit to do any act
whereby such Trademark may become invalidated or impaired in any way; unless,
in each case, such Grantor, in the exercise of its best business judgment,
deems it not commercially reasonable to do so under the circumstances.

 

(b)                                 Such Grantor
(either itself or through licensees) will not knowingly do any act, or
knowingly omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public; unless such Grantor, in the exercise of
its best business judgment, deems it commercially reasonable to do so under the
circumstances.

 

(c)                                  Such Grantor
(either itself or through licensees) (i) will not (and will not permit any
licensee or sublicensee thereof to) knowingly do any act or knowingly omit to
do any act whereby any material portion of the Copyrights may become
invalidated or otherwise impaired and (ii) will not knowingly do any act
whereby any material portion of the Copyrights may fall into the public domain
unless, in each case, such Grantor, in the exercise of its best business
judgment, deems it commercially reasonable to do so under the circumstances.

 

(d)                                 Such Grantor
(either itself or through licensees) will not do any act that knowingly uses
any material Intellectual Property to infringe the intellectual property rights
of any other Person.

 

(e)                                  Such Grantor
will promptly notify the Administrative Agent and the Lenders in writing if it
knows that any application or registration relating to any material
Intellectual Property owned by it may become forfeited, abandoned or dedicated
to the public, or of any adverse determination or development (including the
institution of, or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States Copyright
Office or any court or tribunal in any country) regarding such Grantor’s
ownership of, or the validity of, any material Intellectual Property owned by
it or such Grantor’s right to register the same or to own and maintain the
same.

 

(f)                                    Whenever such
Grantor, either by itself or through any agent, employee, licensee or designee,
shall file an application for the registration of any Intellectual Property
with the United States Patent and Trademark Office, the United States Copyright
Office or any similar office or agency in any other country or any political
subdivision thereof, such Grantor shall report such filing to the
Administrative Agent within 30 Business Days after the last day of the fiscal
quarter in which such filing occurs. 
Upon request of the Administrative Agent, such Grantor shall execute,
deliver and authorize the recording of any and all agreements, instruments,
documents, and papers as the Administrative Agent may request to evidence the
Administrative Agent’s and the Secured Creditors’ security interest in any
Copyright, Patent or Trademark and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby.

 

18

 

(g)                                 Such Grantor
will, at its own expense, take all steps which such Grantor shall reasonably
deem appropriate under the circumstances, which may include any proceeding
before the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, to maintain and pursue each application relating
to any material Intellectual Property (and to obtain the relevant registration)
and to maintain each registration of the material Intellectual Property,
including filing of applications for renewal, affidavits of use and affidavits
of incontestability.

 

(h)                                 In the event
that any other Person infringes upon, misappropriates, makes an unauthorized
use of or otherwise violates any material Intellectual Property, such Grantor
shall (i) take such actions as such Grantor shall reasonably deem appropriate
under the circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof.

 

(i)                                     Such Grantor
shall execute and deliver to the Administrative Agent in form and substance
reasonably acceptable to the Administrative Agent and suitable for filing in
the United States Patent and Trademark Office, (i) a patent security agreement
in the form attached hereto as Annex III for all Patents owned by such Grantor
and (ii) a trademark security agreement in the form attached hereto as Annex IV
for all Trademarks owned by such Grantor.

 

5.11                           Commercial Tort
Claims.  If any Grantor shall at any
time commence a suit, action or proceeding with respect to any Commercial Tort
Claim held by it with a value which such Grantor reasonably believes to be of
$1,000,000 or more, such Grantor shall promptly notify the Administrative Agent
thereof in a writing signed by such Grantor and describing the details thereof
and shall grant to the Administrative Agent for the benefit of the Secured
Creditors in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Agreement, with such writing to be in form
and substance reasonably satisfactory to the Administrative Agent.

 

SECTION 6.  REMEDIAL PROVISIONS

 

6.1                                 Certain Matters
Relating to Receivables.

 

(a)                                  The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default, to make test verifications of
the Receivables in any manner and through any medium that it reasonably
considers advisable, and each Grantor shall furnish all such assistance and
information as the Administrative Agent may require in connection with such
test verifications.  At any time and from
time to time after the occurrence and during the continuance of an Event of
Default, upon the Administrative Agent’s request and at the expense of the
relevant Grantor, such Grantor shall cause independent public accountants or
others satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Receivables.

 

(b)                                 The
Administrative Agent hereby authorizes each Grantor to collect such Grantor’s
Receivables, subject to the Administrative Agent’s direction and control (to
the extent permitted by applicable law) after the occurrence and during the
continuance of an Event of Default, and (to the extent permitted by applicable
law) the Administrative Agent may curtail or terminate said authority at any
time after the occurrence and during the continuance of an Event of Default;
provided that Medicare and Medicaid Receivables shall be in the sole dominion
and control of the Grantor.  If required
by the Administrative Agent (to the extent permitted by applicable law and
governmental regulation) at any time after the occurrence and during the
continuance of an Event of Default, any payments of Receivables, when collected
by any Grantor, (i) shall be forthwith (and, in any event, within two Business Days)
deposited by such Grantor

 

19

 

in the exact form received, duly indorsed by such
Grantor to the Administrative Agent if required, in a Collateral Account
maintained under the sole dominion and control of the Administrative Agent,
subject to withdrawal by the Administrative Agent for the account of the
Secured Creditors only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the Administrative Agent and
the Secured Creditors, segregated from other funds of such Grantor.  Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.

 

(c)                                  At the
Administrative Agent’s request (to the extent permitted by applicable law), at
any time after the occurrence and during the continuation of an Event of
Default, each Grantor shall deliver to the Administrative Agent all original
and other documents evidencing, and relating to, the agreements and
transactions which gave rise to the Receivables, including all original orders,
invoices and shipping receipts.

 

(d)                                 At any time
after the occurrence and during the continuance of an Event of Default, each
Grantor will cooperate with the Administrative Agent to establish a system of
lockbox accounts, under the sole dominion and control of the Administrative
Agent (to the extent permitted by applicable law), into which all Receivables
shall be paid and from which all collected funds will be transferred to a
Collateral Account.

 

6.2                                 Communications
with Obligors; Grantors Remain Liable.

 

(a)                                  The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Receivables.

 

(b)                                 Upon the
request of the Administrative Agent (to the extent permitted by applicable law)
at any time after the occurrence and during the continuance of an Event of
Default, each Grantor shall notify obligors on the Receivables that the
Receivables have been assigned to the Administrative Agent for the ratable
benefit of the Secured Creditors and that payments in respect thereof shall be
made directly to the Administrative Agent.

 

(c)                                  Anything herein
to the contrary notwithstanding, each Grantor shall remain liable under each of
the Receivables (or any agreement giving rise thereto) to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto.  Neither the Administrative
Agent nor any Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out
of this Agreement or the receipt by the Administrative Agent or any Secured
Creditor of any payment relating thereto, nor shall the Administrative Agent or
any Secured Creditor be obligated in any manner to perform any of the
obligations of any Grantor under or pursuant to any Receivable (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

 

6.3                                 Pledged Stock.

 

(a)                                  Unless an Event
of Default shall have occurred and be continuing and the Administrative Agent
shall have given notice to the relevant Grantor of the Administrative Agent’s
intent to exercise its corresponding rights pursuant to Section 6.3(b), each
Grantor shall be permitted to receive all cash dividends

 

20

 

paid in respect of the Pledged Stock and all
payments made in respect of the Pledged Notes, in each case paid in the normal
course of business of the relevant Issuer, to the extent permitted by the
Credit Agreement, and to exercise all voting and corporate rights with respect
to the Pledged Securities; provided, however, that no vote shall
be cast or corporate right exercised or other action taken which, in the
Administrative Agent’s reasonable judgment, would impair the Collateral or
which would be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document.

 

(b)                                 If an Event of
Default shall occur and be continuing and the Administrative Agent shall give
notice of its intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Administrative Agent shall have the right to receive any and
all cash dividends, payments or other Proceeds paid in respect of the Pledged
Securities constituting Collateral and make application thereof to the
Obligations in the order set forth in Section 6.5, and (ii) any or all of the
Pledged Securities constituting Collateral shall be registered in the name of
the Administrative Agent or its nominee, and the Administrative Agent or its
nominee may thereafter exercise (x) all voting, corporate and other rights
pertaining to such Pledged Securities at any meeting of shareholders of the
relevant Issuer or Issuers or otherwise and (y) any and all rights of
conversion, exchange and subscription and any other rights, privileges or
options pertaining to such Pledged Securities as if it were the absolute owner
thereof (including the right to exchange at its discretion any and all of the
Pledged Securities upon the merger, consolidation, reorganization, recapitalization
or other fundamental change in the corporate structure of any Issuer, or upon
the exercise by any Grantor or the Administrative Agent of any right, privilege
or option pertaining to such Pledged Securities, and in connection therewith,
the right to deposit and deliver any and all of the Pledged Securities with any
committee, depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may determine), all
without liability except to account for property actually received by it, but
the Administrative Agent shall have no duty to any Grantor to exercise any such
right, privilege or option and shall not be responsible for any failure to do
so or delay in so doing.

 

(c)                                  Each Grantor
hereby authorizes and instructs each Issuer of any Pledged Securities pledged
by such Grantor hereunder to (i) comply with any instruction received by it
from the Administrative Agent in writing that (x) states that an Event of
Default has occurred and is continuing and (y) is otherwise in accordance with
the terms of this Agreement, without any other or further instructions from
such Grantor, and each Grantor agrees that each Issuer shall be fully protected
in so complying, and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Securities directly to
the Administrative Agent.

 

6.4                                 Proceeds to be
Turned Over To Administrative Agent.  In addition to the rights of the
Administrative Agent and the Secured Creditors specified in Section 6.1 with
respect to payments of Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of cash, checks and
Instruments shall be held by such Grantor in trust for the Administrative Agent
and the Secured Creditors, segregated from other funds of such Grantor, and
shall, forthwith upon receipt by such Grantor, be turned over to the
Administrative Agent in the exact form received by such Grantor (duly indorsed
by such Grantor to the Administrative Agent, if required).  All Proceeds received by the Administrative
Agent hereunder shall be held by the Administrative Agent in a Collateral
Account maintained under its sole dominion and control.  All Proceeds while held by the Administrative
Agent in a Collateral Account (or by such Grantor in trust for the
Administrative Agent and the Secured Creditors) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.

 

6.5                                 Application of
Proceeds.  At such
intervals as may be agreed upon by the Borrower and the Administrative Agent,
or, if an Event of Default shall have occurred and be continuing, at any time
at the Administrative Agent’s election, the Administrative Agent may apply all
or any part of Proceeds constituting

 

21

 

Collateral, whether or not held in any Collateral
Account, and any proceeds of the guarantee set forth in Section 2, in payment
of the Obligations in the following order:

 

First, to pay incurred and unpaid fees and expenses of
the Administrative Agent under the Loan Documents;

 

Second, to the Administrative Agent, for application by it
towards payment of amounts then due and owing and remaining unpaid in respect
of the Obligations, pro  rata among the Secured Creditors
according to the amounts of the Obligations then due and owing and remaining
unpaid to the Secured Creditors;

 

Third, to the Administrative Agent, for application by it
towards prepayment of the Obligations, pro  rata among the Secured
Creditors according to the amounts of the Obligations then held by the Secured
Creditors; and

 

Fourth, any balance of such Proceeds remaining after the
Obligations shall have been paid in full, no Letters of Credit shall be
outstanding and the Commitments shall have terminated shall be paid over to the
Borrower or to whomsoever may be lawfully entitled to receive the same.

 

6.6                                 Code and Other
Remedies.  If an Event
of Default shall occur and be continuing, the Administrative Agent, on behalf
of the Secured Creditors, may exercise, in addition to all other rights and
remedies granted to them in this Agreement and in any other instrument or
agreement securing, evidencing or relating to the Obligations, all rights and
remedies of a secured party under the New York UCC or any other applicable
law.  Without limiting the generality of
the foregoing, the Administrative Agent, without demand of performance or other
demand, presentment, protest, advertisement or notice of any kind (except any
notice required by law referred to below) to or upon any Grantor or any other
Person (all and each of which demands, defenses, advertisements and notices are
hereby waived), may in such circumstances forthwith collect, receive,
appropriate and realize upon the Collateral, or any part thereof, and/or may
forthwith sell, lease, assign, give option or options to purchase, or otherwise
dispose of and deliver the Collateral or any part thereof (or contract to do
any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker’s board or office of the Administrative Agent or
any Secured Creditor or elsewhere, subject to applicable law, upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk.  The Administrative Agent or any
Secured Creditor shall have the right upon any such public sale or sales, and,
to the extent permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity of redemption in any Grantor, which right or equity is hereby waived and
released.  Each Grantor further agrees,
at the Administrative Agent’s request, to assemble the Collateral and make it
available to the Administrative Agent at places which the Administrative Agent
shall reasonably select, whether at such Grantor’s premises or elsewhere.  The Administrative Agent shall apply the net
proceeds of any action taken by it pursuant to this Section 6.6 with respect to
any Grantor’s Collateral, after deducting all reasonable costs and expenses of
every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral of such Grantor or in any way relating to
the Collateral of such Grantor or the rights of the Administrative Agent and
the Secured Creditors hereunder with respect thereto, including reasonable
attorneys’ fees and disbursements, to the payment in whole or in part of the
Obligations of such Grantor, in the order specified in Section 6.5, and only
after such application and after the payment by the Administrative Agent of any
other amount required by any provision of law, including Section 9- 615(a)(3)
of the New York UCC, need the Administrative Agent account for the surplus, if
any, to any Grantor.  To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any Secured Creditor
arising out of the exercise by them of any rights 

 

22

 

hereunder.  If
any notice of a proposed sale or other disposition of Collateral shall be required
by law, such notice shall be deemed reasonable and proper if given at least 10
days before such sale or other disposition.

 

6.7                                 Sale of Pledged
Stock.

 

(a)                                  Each Grantor
recognizes that the Administrative Agent may be unable to effect a public sale
of any or all the Pledged Stock, by reason of certain prohibitions contained in
the Securities Act and applicable state securities laws or otherwise, and may
be compelled to resort to one or more private sales thereof to a restricted
group of purchasers which will be obliged to agree, among other things, to
acquire such securities for their own account for investment and not with a
view to the distribution or resale thereof. 
Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner.  The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the period of time
necessary to permit the Issuer thereof to register such securities for public
sale under the Securities Act, or under applicable state securities laws, even
if such Issuer would agree to do so.

 

(b)                                 Each Grantor
agrees to use its best efforts to do or cause to be done all such other acts as
may be necessary to make such sale or sales of all or any portion of the
Pledged Stock pursuant to this Section 6.7 valid and binding and in compliance
with any and all other applicable Requirements of Law.  Each Grantor further agrees that a breach of
any of the covenants contained in this Section 6.7 will cause irreparable
injury to the Administrative Agent and the Secured Creditors, that the
Administrative Agent and the Secured Creditors have no adequate remedy at law
in respect of such breach and, as a consequence, that each and every covenant
contained in this Section 6.7 shall be specifically enforceable against such
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.

 

6.8                                 Deficiency.  Each Grantor shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay its Obligations and the reasonable fees and
disbursements of any attorneys employed by the Administrative Agent or any
Secured Creditor to collect such deficiency.

 

SECTION 7.  THE ADMINISTRATIVE AGENT

 

7.1                                 Administrative
Agent’s Appointment as Attorney-in-Fact, etc.

 

(a)                                  Each Grantor
hereby irrevocably constitutes and appoints the Administrative Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following:

 

(i)                                     in the name of
such Grantor or its own name, or otherwise, take possession of and indorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Receivable or with respect to any other
Collateral and file any claim or take any other action or proceeding in any
court of law or equity or otherwise deemed

 

23

 

appropriate by the
Administrative Agent for the purpose of collecting any and all such moneys due
under any Receivable or with respect to any other Collateral whenever payable
(to the extent permitted by applicable law);

 

(ii)                                  in the case of
any Intellectual Property, execute and deliver, and have recorded, any and all
agreements, instruments, documents and papers as the Administrative Agent may
request to evidence the Administrative Agent’s and the Secured Creditors’
security interest in such Intellectual Property and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby;

 

(iii)                               pay or
discharge taxes and Liens levied or placed on or threatened against the Collateral,
effect any repairs or any insurance called for by the terms of this Agreement
and pay all or any part of the premiums therefor and the costs thereof;

 

(iv)                              execute, in
connection with any sale provided for in Section 6.6 or 6.7, any indorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral;

 

(v)                                 (1) direct any
party liable for any payment under any of the Collateral to make payment of any
and all moneys due or to become due thereunder directly to the Administrative
Agent or as the Administrative Agent shall direct (to the extent permitted by
applicable law); (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral (to the extent
permitted by applicable law); (3) sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications, notices and other documents in connection
with any of the Collateral; (4) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or proceeding brought
against such Grantor with respect to any Collateral; (6) settle, compromise or
adjust any such suit, action or proceeding and, in connection therewith, give
such discharges or releases as the Administrative Agent may deem appropriate;
(7) assign any Copyright, Patent or Trademark (along with the goodwill of the
business to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner, as
the Administrative Agent shall in its sole discretion determine; and (8)
generally, sell, transfer, pledge and make any agreement with respect to or
otherwise deal with any of the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes, and do,
at the Administrative Agent’s option and such Grantor’s expense, at any time,
or from time to time, all acts and things which the Administrative Agent deems
necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Creditors’ security interests therein
and to effect the intent of this Agreement, all as fully and effectively as
such Grantor might do; and

 

(vi)                              license or
sublicense whether on an exclusive or non-exclusive basis, any Intellectual
Property for such term and on such conditions and in such manner as the
Administrative Agent shall in its sole judgment determine and, in connection
therewith, such Grantor hereby grants to the Administrative Agent for the
benefit of the Secured Creditors a royalty-free, world- wide irrevocable
license of its Intellectual Property.

 

Anything
in this Section 7.1(a) to the contrary notwithstanding, the Administrative
Agent agrees that it will not exercise any rights under the power of attorney
provided for in this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing, and then subject to applicable law.

 

24

 

(b)                                 If any Grantor
fails to perform or comply with any of its agreements contained herein, the
Administrative Agent, at its option, but without any obligation so to do, may
perform or comply, or otherwise cause performance or compliance, with such agreement.

 

(c)                                  The expenses of
the Administrative Agent incurred in connection with actions undertaken as
provided in this Section 7.1, together with interest thereon at a rate per
annum equal to the rate per annum at which interest would then be payable on
past due Revolving Credit Loans that are Base Rate Loans under the Credit
Agreement, from the date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

 

(d)                                 Each Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done
by virtue hereof.  All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until this Agreement is terminated and the
security interests created hereby are released.

 

7.2                                 Duty of
Administrative Agent.  The
Administrative Agent’s sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the New York UCC or otherwise, shall be to deal with it in the same manner
as the Administrative Agent deals with similar property for its own
account.  Neither the Administrative
Agent, any Secured Creditor nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. 
The powers conferred on the Administrative Agent and the Secured
Creditors hereunder are solely to protect the Administrative Agent’s and the
Secured Creditors’ interests in the Collateral and shall not impose any duty
upon the Administrative Agent or any Secured Creditor to exercise any such
powers.  The Administrative Agent and the
Secured Creditors shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

 

7.3                                 Execution of
Financing Statements.  Pursuant to
any applicable law, each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording documents or
instruments with respect to the Collateral without the signature of such
Grantor in such form and in such offices as the Administrative Agent determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement.  Each Grantor authorizes
the Administrative Agent to use the collateral description “all personal
property” or “all assets” or words of similar effect in any such financing
statements, with the Excluded Assets described as an exclusion from the
collateral described therein.  Each
Grantor hereby ratifies and authorizes the filing by the Administrative Agent
of any financing statement with respect to the Collateral made prior to the
date hereof.

 

7.4                                 Authority of
Administrative Agent.  Each
Grantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Agreement with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the Secured Creditors, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Creditors with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any

 

25

 

inquiry respecting such authority.  Notwithstanding any other provision herein or
in any Loan Document, the only duty or responsibility of the Administrative
Agent to any Qualified Counterparty under this Agreement is the duty to remit
to such Qualified Counterparty any amounts to which it is entitled pursuant to
Section 6.5.

 

SECTION 8.  MISCELLANEOUS

 

8.1                                 Amendments in
Writing.  None of the terms or provisions
of this Agreement may be waived, amended, supplemented or otherwise modified
except in accordance with Section 11.01 of the Credit Agreement.  No consent of any Qualified Counterparty
shall be required for any waiver, amendment, supplement or other modification
to this Agreement.

 

8.2                                 Notices.  All notices, requests and demands to or upon
the Administrative Agent or any Grantor hereunder shall be effected in the
manner provided for in Section 11.02 of the Credit Agreement; provided
that any such notice, request or demand to or upon any Guarantor shall be
addressed to such Guarantor at its notice address set forth on Schedule 1.

 

8.3                                 No Waiver by
Course of Conduct; Cumulative Remedies.  Neither the Administrative Agent nor any
Secured Creditor shall by any act (except by a written instrument pursuant to
Section 8.1), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default.  No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Creditor, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise
of any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or any
Secured Creditor of any right or remedy hereunder on any one occasion shall not
be construed as a bar to any right or remedy which the Administrative Agent or
such Secured Creditor would otherwise have on any future occasion.  The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

 

8.4                                 Enforcement
Expenses; Indemnification.

 

(a)                                  Each Guarantor
agrees to pay, or reimburse each Secured Creditor and the Administrative Agent
for, all its reasonable costs and expenses incurred in collecting against such
Guarantor under the guarantee contained in Section 2 or otherwise enforcing or
preserving any rights under this Agreement and the other Loan Documents to
which such Guarantor is a party, including the reasonable fees and
disbursements of counsel to each Secured Creditor and of counsel to the
Administrative Agent to the same extent the Borrower is required to do so
pursuant to the Credit Agreement.

 

(b)                                 Each Guarantor
agrees to pay, and to save the Administrative Agent and the Secured Creditors
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this Agreement to the
same extent the Borrower is required to do so pursuant to the Credit Agreement.

 

(c)                                  Each Guarantor
agrees to pay, and to save the Administrative Agent and the Secured Creditors
harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement to the extent the Borrower
would be required to do so pursuant to Section 11.04 of the Credit Agreement.

 

26

 

(d)                                 The agreements
in this Section shall survive repayment of the Obligations and all other
amounts payable under the Credit Agreement and the other Loan Documents.

 

8.5                                 Successors and
Assigns.  This Agreement shall be
binding upon the successors and assigns of each Grantor and shall inure to the
benefit of the Administrative Agent and the Secured Creditors and their
successors and assigns; provided that no Grantor may assign, transfer or
delegate any of its rights or obligations under this Agreement without the
prior written consent of the Administrative Agent.

 

8.6                                 Set-Off.  Each Grantor hereby irrevocably authorizes
the Administrative Agent and each Secured Creditor at any time and from time to
time while an Event of Default shall have occurred and be continuing pursuant
to Section 11.09 of the Credit Agreement, without prior notice to such Grantor
or any other Grantor, any such notice being expressly waived by each Grantor to
set-off and appropriate and apply any 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 the Administrative Agent or such Secured Creditor to or for the credit
or the account of such Grantor, or any part thereof in such amounts as the
Administrative Agent or such Secured Creditor may elect, against and on account
of the obligations and liabilities of such Grantor to the Administrative Agent
or such Secured Creditor hereunder and claims of every nature and description
of the Administrative Agent or such Secured Creditor against such Grantor, in
any currency, whether arising hereunder, under the Credit Agreement, any other
Loan Document or otherwise, as the Administrative Agent or such Secured
Creditor may elect, whether or not the Administrative Agent or any Secured
Creditor has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured.  The Administrative Agent and each Secured
Creditor shall notify such Grantor promptly of any such set-off and the
application made by the Administrative Agent or such Secured Creditor of the
proceeds thereof, provided that the failure to give such notice shall
not affect the validity of such set-off and application.  The rights of the Administrative Agent and
each Secured Creditor under this Section are in addition to other rights and
remedies (including other rights of set-off) which the Administrative Agent or
such Secured Creditor may have.

 

8.7                                 Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts
(including by telecopy), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

 

8.8                                 Severability.  Any provision of this Agreement which 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.

 

8.9                                 Section
Headings.  The Section
headings used in this Agreement are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the
interpretation hereof.

 

8.10                           Integration.  This Agreement and the other Loan Documents
represent the agreement of the Grantors, the Administrative Agent and the
Secured Creditors with respect to the subject matter hereof and thereof, and
there are no promises, undertakings, representations or warranties by the
Administrative Agent or any Secured Creditor relative to subject matter hereof
and thereof not expressly set forth or referred to herein or in the other Loan
Documents.

 

8.11                           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

27

 

8.12                           Submission To
Jurisdiction; Waivers.  Each
Grantor hereby irrevocably and unconditionally:

 

(a)                                  submits for
itself and its property in any legal action or proceeding relating to this
Agreement and the other Loan 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 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 such Grantor at its address referred to in
Section 8.2 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 any special,
exemplary, punitive or consequential damages.

 

8.13                           Acknowledgements.  Each Grantor hereby acknowledges that:

 

(a)                                  it has been
advised by counsel in the negotiation, execution and delivery of this Agreement
and the other Loan Documents to which it is a party;

 

(b)                                 neither the
Administrative Agent nor any Secured Creditor has any fiduciary relationship
with or duty to any Grantor arising out of or in connection with this Agreement
or any of the other Loan Documents, and the relationship between the Grantors,
on the one hand, and the Administrative Agent and Secured Creditors, 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 Loan Documents or otherwise exists by
virtue of the transactions contemplated hereby among the Secured Creditors or
among the Grantors and the Secured Creditors.

 

8.14                           Additional
Grantors.  Each
Subsidiary of the Borrower that is required to become or otherwise becomes a
party to this Agreement pursuant to Section 7.12 of the Credit Agreement shall
become a Grantor for all purposes of this Agreement upon execution and delivery
by such Subsidiary of an Assumption Agreement in the form of Annex I hereto.

 

8.15                           Releases.

 

(a)                                  At such time as
the Loans, the reimbursement obligations under any Letter of Credit and the
other Obligations (other than Borrower Hedge Agreement Obligations and
Guarantor Hedge Agreement Obligations, any contingent indemnification or
similar obligation not yet due and payable and any

 

28

 

obligation owing under any Rate Swap Document or
Cash Management Agreement) shall have been paid in full, the Commitments have
been terminated and no Letters of Credit shall be outstanding (unless cash
collateralized on terms acceptable to the L/C Issuer or such Letter of Credit
becomes a Supported Letter of Credit), the Collateral shall be released from
the Liens created hereby, and this Agreement and all obligations (other than
those expressly stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery of any
instrument or performance of any act by any party, and all rights to the
Collateral shall revert to the Grantors. 
At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination.

 

(b)                                 If any of the
Collateral shall be sold, transferred or otherwise disposed of by any Grantor
other than to another Grantor in a transaction permitted by the Credit
Agreement or any Grantor is not required to be a party hereto pursuant to
Section 7.12 of the Credit Agreement, then (x) automatically and without any
further action the Liens created hereby on such Collateral shall be released
and (y) the Administrative Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases or other
documents reasonably necessary or desirable for the release of the Liens
created hereby on such Collateral.  At
the sole expense of the Borrower, a Guarantor shall be released from its obligations
hereunder in the event that (x) all the Capital Stock of such Guarantor shall
be sold, transferred or otherwise disposed of in a transaction permitted by the
Credit Agreement; provided that the Borrower shall have delivered to the
Administrative Agent, at least five Business Days prior to the date of the
proposed release, a written request for release identifying the relevant
Guarantor and the terms of the sale or other disposition in reasonable detail,
including the price thereof in connection therewith, together with a
certification by the Borrower stating that such transaction is in compliance
with the Credit Agreement and the other Loan Documents, or (y) such Guarantor
is not required to be a party hereto pursuant to Section 7.12 of the Credit Agreement;
provided, that such release shall occur automatically and without any
action other than the delivery by the Borrower to the Administrative Agent of a
certification stating that such Guarantor is not required to be a party hereto
pursuant to Section 7.12 of the Credit Agreement.

 

(c)                                  No consent of
any Qualified Counterparty shall be required for any release of Collateral or
Guarantors pursuant to this Section.

 

8.16                           WAIVER OF JURY
TRIAL.  EACH GRANTOR AND, BY
ACCEPTANCE OF THE BENEFITS HEREOF, EACH AGENT AND EACH SECURED CREDITOR, HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

 

8.17                           Effectiveness
of ACP Execution.  The execution
and delivery of this Agreement by each of Accelerated Care Plus Corp. and ACP
Medical Supply Corporation are effective as of the consummation of the
Merger.[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

29

 

IN
WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

 

	
   

  	
   

  	
  HANGER
  ORTHOPEDIC GROUP, INC.,

  
	
   

  	
   

  	
  as
  Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

30

 

	
   

  	
   

  	
  DOSTEON
  SOLUTIONS, LLC

  
	
   

  	
   

  	
  INNOVATIVE
  NEUROTRONICS, INC.

  
	
   

  	
   

  	
  HANGER
  PROSTHETICS & ORTHOTICS, INC.

  
	
   

  	
   

  	
  SOUTHERN
  PROSTHETIC SUPPLY, INC.

  
	
   

  	
   

  	
  OPNET,
  INC.

  
	
   

  	
   

  	
  LINKIA,
  LLC

  
	
   

  	
   

  	
  ABI
  ORTHOTIC/PROSTHETIC LABORATORIES, LTD.

  
	
   

  	
   

  	
  EUGENE
  TEUFEL & SON ORTHOTICS &

  
	
   

  	
   

  	
  PROSTHETICS,
  INC.

  
	
   

  	
   

  	
  THE
  BRACE SHOP PROSTHETIC ORTHOTIC

  
	
   

  	
   

  	
  CENTERS,
  INC.

  
	
   

  	
   

  	
  HANGER
  PROSTHETICS & ORTHOTICS WEST, INC.

  
	
   

  	
   

  	
  HANGER
  PROSTHETICS & ORTHOTICS EAST, INC.

  
	
   

  	
   

  	
  ELITE
  CARE, INCORPORATED

  
	
   

  	
   

  	
  INLINE
  ORTHOTIC AND PROSTHETIC SYSTEMS

  
	
   

  	
   

  	
  CREATIVE
  ORTHOTICS & PROSTHETICS, INC.

  
	
   

  	
   

  	
  NEBRASKA
  ORTHOTIC & PROSTHETIC SERVICES, INC.

  
	
   

  	
   

  	
  ORTHOPEDIC
  REHABILITATION PRODUCTS, LTD.

  
	
   

  	
   

  	
  HATTINGH
  HOLDINGS, INC.

  
	
   

  	
   

  	
  COLORADO
  PROFESSIONAL MEDICAL, INC.

  
	
   

  	
   

  	
  ADVANCED
  PROSTHETICS OF AMERICA, INC.

  
	
   

  	
   

  	
  DDOPP
  HOLDING LLC

  
	
   

  	
   

  	
  DIBELLO’S
  DYNAMIC ORTHOTICS AND PROSTHETICS

  
	
   

  	
   

  	
  PARTNERSHIP, LTD.

  
	
   

  	
   

  	
  WASATCH
  ORTHOTHICS & PEDORTHICS, LLC

  
	
   

  	
   

  	
  ACCELERATED
  CARE PLUS CORP.

  
	
   

  	
   

  	
  ACP
  MEDICAL SUPPLY CORPORATION,

  
	
   

  	
   

  	
  as
  Grantor and Guarantor

  

 

 

	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  	
  Title:

  

 

31

 

EXHIBIT G

 

OPINION MATTERS - COUNSEL TO LOAN PARTIES

 

 

EXHIBIT H

 

FORM OF SOLVENCY CERTIFICATE

 

I,
the undersigned, Chief Financial Officer of Hanger Orthopedic Group, Inc.,
a Delaware corporation (the “Borrower”), DO HEREBY CERTIFY  on behalf of Borrower that:

 

1.             This certificate is furnished
pursuant to Section 5.01(i) of the Credit Agreement , ((as in effect
on the date of this certificate) the capitalized terms defined therein being
used herein as therein defined) dated as of December 1, 2010 among
Borrower, the Lenders, and Bank of America, N.A., as Agent, Issuer and
Swing Line Lender.

 

2.             Immediately before and immediately
after giving effect to the Transaction the Loan Parties, taken as a whole, are
and will be Solvent.

 

[Signature
Page Follows]

 

 

IN
WITNESS WHEREOF, I have hereunto set my hand this 1st day of December,
2010.

 

	
   

  	
  HANGER
  ORTHOPEDIC GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Financial OfficerExhibit 10.1

 

THE SECURITIES REPRESENTED BY THIS DOCUMENT
AND THE SHARES ISSUABLE UPON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE HOLDER EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT OR AN EXEMPTION
THEREFROM AS CONFIRMED BY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER
SAID SECURITIES ACT, PROVIDED THAT NO SUCH OPINION WILL BE REQUIRED IN
CONNECTION WITH A SALE PURSUANT TO RULE 144 UNDER THE SECURITIES ACT IF THE
HOLDER PROVIDES TO THE MAKER A CUSTOMARY REPRESENTATION LETTER.  HEDGING TRANSACTIONS INVOLVING THOSE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.

 

SENIOR SECURED CONVERTIBLE
PROMISSORY NOTE

 

$         
          , 2010

 

FOR VALUE RECEIVED, the undersigned TechniScan, Inc.,
a Delaware corporation (“Maker”), does hereby promise, in accordance
with the Note and Warrant Purchase Agreement dated as of the date hereof (the “Purchase
Agreement”), to pay to the order of
         (together with his heirs,  successors and assigns, “Payee”) at
the address of Payee set forth in the Purchase Agreement (or at such other
place as Payee may designate from time to time in writing to Maker, in
immediately available funds of official currency of the United States, the
principal sum of         Dollars
($      ), or so much as may be outstanding
hereunder from time to time, together with interest thereon from the date of
this Senior Secured Convertible Promissory Note (this “Note”), as
provided herein.  Capitalized terms used
and not otherwise defined herein have the meanings set forth in the Purchase
Agreement.

 

This Note is one of a series of
convertible promissory notes of like tenor and ranking (except as otherwise
provided in the Purchase Agreement and the Security Documents) (collectively,
the “Notes”) made by Maker in favor of certain investors (collectively,
the “Investors”).  This Note is
one of the Second Lien Notes referenced in the Purchase Agreement.

 

By acceptance of this Note, Payee
agrees that it will promptly deliver and surrender this Note (or a lost Note
affidavit in the form attached hereto as Exhibit A) to Maker upon full
payment thereof.

 

1.             Principal Balance.  This Note evidences a loan up to the maximum
principal sum specified above, less the aggregate amount of all principal
repayments made under this Note by Maker to Payee.

 

2.             Interest Rate.  Interest
shall be payable on the unpaid principal balance of this Note, as the same may
exist from time to time, from the date of issuance until paid or converted in
full, in accordance with the terms herein and shall be payable (i) on the
Maturity Date (as defined below), (ii) on any earlier date of payment or
conversion of principal (in whole or in part and, if in part, as to the portion
paid or converted) and (iii) following the Maturity Date or any earlier
date of demand for payment or conversion of principal in accordance with the
terms hereof (each, an “Initial Interest Payment Date”), on the last day of
each calendar quarter (each of the foregoing an “Interest Payment Date”),
provided that if any such day is not a business day, the interest payment due
on such date shall be payable on (and shall include interest accrual through)
the next succeeding business day. 
Interest accruing on any portion of the principal of this Note (from the
date of issuance hereof) as to which Maker does not timely satisfy its payment
or conversion obligations in accordance with the terms hereof shall at the
option of Payee be paid in additional Notes (each of which, if Payee is a
Priority Investor, shall be a First Lien Note) having terms identical

 

 

to this Note (and providing for
immediate effectiveness of all provisions hereof that are applicable hereunder
on or after the Maturity Date), provided that Maker shall have the right to
satisfy the interest accrued through the Initial Interest Payment Date in cash,
provided that timely payment is made, notwithstanding any exercise of such
option by Payee. Payee may with respect to any Interest Payment Date after the
Initial Interest Payment Date elect payment of interest in additional Notes
even if cash payment of such interest is tendered by Maker.  Interest shall accrue on the unpaid principal
balance hereof at the rate of 10% per annum from and including the date hereof
to but excluding the Maturity Date. 
Interest shall accrue on any principal balance that is not paid on the
earlier of the Maturity Date and the date of an Event of Default shall accrue
at the rate of 24% per annum (the “Default Rate”) from and including the
Maturity Date or the date of such Event of Default to but excluding the date of
payment.  Notwithstanding the foregoing,
if any portion of the unpaid principal balance of this Note is converted into
shares (“Shares”) of Maker’s common stock, par value of $0.001 per share
(“Common Stock”) pursuant to the terms hereof, interest shall be payable
with respect to such principal portion at the rate of 12% per annum from and
including the date hereof to but excluding the earlier of the Maturity Date and
the date of conversion, provided that any principal amount that is not
converted on or prior to the earlier of the Maturity Date and the date of an
Event of Default shall be payable at the Default Rate from and including the
Maturity Date or the date of such Event of Default to but excluding the date of
conversion.  In no event, however, shall
interest be payable at a rate higher than the highest rate permitted by
applicable law.  Interest on the
principal balance outstanding will be calculated on the basis of the actual
number of days elapsed over an assumed year consisting of 365 days, to the date
of receipt by Payee at the place of payment designated herein of any interest
and/or principal.

 

3.             Payment Terms.  Any outstanding principal balance and accrued
unpaid interest shall be paid to Payee in full no later than January 31,
2011; provided, however, at the option of Maker, if prior to January 31,
2011 Maker (a) issues to Payee shares of Common Stock equal to 10% of the
then outstanding principal sum under this Note, as evidenced by a stock
certificate in Payee’s name representing such shares, having the same
restrictions on sale or transfer as the shares of Common Stock issued to the
Lead Investor on October 28, 2010 and (b) delivers to Payee a Warrant
to purchase such number of shares of Common Stock equal to the then outstanding
principal sum under this Note divided by the then current Warrant Price (as
defined in Warrant #       in the name of Payee),
then any outstanding principal balance and accrued unpaid interest shall be
paid to Payee in full no later than April 15, 2011 (the “Maturity Date”).

 

4.             Conversion Rights.

 

(a)           In
the event Maker consummates a Qualified prior to the Maturity Date, Maker has
the option, upon written notice to Payee prior to the first closing of the Qualified
Financing and each subsequent closing of the Qualified Financing, to:  (i) require Payee to convert the
principal amount of this Note and accrued and unpaid interest thereon (the “Convertible
Amount”) in whole or in part into QF Securities (as defined below) at the same
price and on the same terms as other investors in the Qualified Financing in
lieu of having Maker repay this Note pursuant to Section 3 above; (ii) immediately
repay any portion of the unconverted principal amount of this Note and pay
accrued and unpaid interest thereon to the date of payment; and/or (iii) require
Payee to continue to hold the portion of this Note that is not required to be
converted or repaid.  For purposes
herein, a “Qualified Financing” shall mean the sale by Maker of either Shares
and/or other securities that are convertible into or exercisable for Shares
(collectively, “QF Securities”) for cash for investment purposes, pursuant to
which Maker receives gross proceeds (subject only to customary selling
commissions and transaction expenses) of not less than FIVE MILLION DOLLARS
($5,000,000) at the first closing thereof (of which a majority of the amount
invested at such first closing and in the aggregate must be invested by persons
unaffiliated with Maker).  For the
avoidance of doubt, if Payee is required to convert any portion of the
Convertible Amount pursuant to clause (i) above, Payee shall be entitled
to receive the number and type of QF Securities as would be received in
exchange for a cash investment in the Qualified Financing equal to the
Convertible Amount and shall be entitled to retain the warrants being acquired
by Payee pursuant to the Purchase Agreement. 
No fractional QF Securities will be issued in connection with any
conversion of the Conversion Amount, but instead will be rounded up to the
nearest whole QF Security.  The date
notice of conversion of all or any portion of the Note (is given by Maker to
Payee pursuant to this Section 4(a) or given by Payee to Maker as
elsewhere provided in the Note) is referred to as the “Conversion Date”.

 

(b)           Beginning
on the day following the Maturity Date, the Convertible Amount is convertible
at any time at the option of Payee by notice to Maker into that number of
Shares equal to the Convertible Amount 

 

 

divided by $2.68, subject to
adjustment as provided in the remaining provisions of this Note (the “Conversion
Price”).  The Shares or other
securities into which this Note is convertible (and any Shares issued upon
conversion or exercise of any such other securities) are referred to as the “Conversion
Securities”.  Except in connection
with a Qualified Financing, Payee may elect to convert this Note in part under
any provision hereof permitting conversion and may elect multiple conversions,
provided that Payee shall not without Maker’s consent be permitted to convert
less than the lesser of (i) $100,000 in principal and (ii) the
remaining unconverted principal amount of this Note, in each case together with
all accrued and unpaid interest on such principal amount to be converted.

 

(c)           Beginning
on the day following the Maturity Date, in the event that the Maker’s Shares,
on the Trading Day prior to any Conversion Date, closed at a price per Share
that is lower than ten percent (10%) higher than the then applicable Conversion
Price, then Payee shall have the right exercisable by notice to Maker to
convert the Convertible Amount into Shares at the lower of the then applicable
Conversion Price and a price per Share that is twenty percent (20%) lower than
the arithmetic mean of the three lowest prices at which any Shares are traded
during ten consecutive Trading Days ending on the Trading Day prior to the
Conversion Date (or, if the Shares did not trade on any such Trading Day, the
arithmetic mean of the three lowest prices at which any Shares are traded
during the most recent ten Trading Days on which the Shares traded, provided
that no Trading Day that is more than 20 Trading Days prior to the Conversion
Date shall be taken into account).  If
there has been no trading in the Shares during the 20 Trading Days prior to the
Conversion Date, in the event that the Maker’s Shares, on the Trading Day prior
to the Conversion Date, closed at a price per Share that is lower than ten
percent (10%) higher than the then applicable Conversion Price, then Payee
shall have the right exercisable by notice to Maker to convert the Convertible
Amount into Shares at the lower of the then applicable Conversion Price and a
price per Share that is twenty percent (20%) lower than the fair market value
of one Share as determined in good faith by the Board and the Lead
Investor.  As used herein, “Trading
Day” means (i) a day on which the Common Stock is traded on a national
securities exchange or quoted on the OTC Bulletin Board, or (ii) if the Common
Stock is not traded on a national securities exchange or quoted on the OTC
Bulletin Board, a day on which the Common Stock is quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices) or in the “pink sheets”; provided, however, that in the event
that the Common Stock is not listed or quoted as set forth in (i) or (ii) hereof,
then Trading Day shall mean any day except Saturday, Sunday and any day which
shall be a legal holiday or a day on which banking institutions in the State of
New York are authorized or required by law or other government action to close.

 

(d)           Upon
conversion of any portion of this Note and delivery of the Conversion
Securities in accordance with the terms hereof, the portion of the principal
balance of this Note so converted and all accrued interest due thereon as of
the date of conversion will be deemed paid in full, and upon conversion of all
outstanding principal and interest the Note will be deemed cancelled and of no
force or effect.

 

(e)           Not
later than three (3) Trading Days after any Conversion Date, Maker or its
designated transfer agent, as applicable, shall, if requested by Payee, issue
and deliver to the Depository Trust Company (“DTC”) account on Payee’s
behalf via the Deposit Withdrawal Agent Commission System (“DWAC”) as
specified in the conversion notice, registered in the name of Payee or its
designee, the number of Conversion Securities to which Payee shall be
entitled.  Otherwise, not later than three (3) Trading Days
after any Conversion Date, Maker shall deliver to Payee by express courier a
certificate or certificates representing the number of Conversion Securities
being acquired upon the conversion (the “Delivery Date”), which shall be
free of restrictive legends unless the Conversion Securities have not been
registered for resale and are not eligible for resale pursuant to Rule 144
without regard to volume limitations, manner-of-sale restrictions or current
public information requirements.  If in the case of any Conversion
Notice the Conversion Securities are not delivered to or as directed by Payee
by the Delivery Date, Payee shall be entitled by written notice to Maker at any
time on or before its receipt of such Conversion Securities thereafter, to
rescind such conversion, whereupon Maker and Payee shall each be restored to
their respective positions immediately prior to the Conversion Date, except
that any amounts described in Section 4(f) shall be payable through
the date notice of rescission is given to Maker and any amounts described in Section 4
(g) shall nevertheless be payable.

 

(f)            Maker
understands that a delay in the delivery of the Conversion Securities upon
conversion of this Note beyond the Delivery Date could result in economic loss
to Payee.  If Maker fails to deliver to Payee such Conversion
Securities via DWAC (or, if applicable, certificates) by the Delivery Date,
Maker shall 

 

 

pay to Payee, in cash, an amount per
Trading Day for each Trading Day until such Conversion Securities are delivered
via DWAC or certificates are delivered, together with interest on such amount
at a rate of 10% per annum, accruing until such amount and any accrued interest
thereon is paid in full, equal to (A) 1% of the aggregate principal amount
of the Note requested to be converted for the first five (5) Trading Days
after the Delivery Date and (ii) 2% of the aggregate principal amount of
the Note requested to be converted for each Trading Day thereafter (payable as
liquidated damages and not as a penalty).  Nothing herein shall limit
Payee’s right to pursue actual damages for Maker’s failure to deliver
certificates representing Conversion Securities upon conversion within the
period specified herein and Payee shall have the right to pursue all remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief).

 

(g)           In
addition to any other rights available to Payee, if Maker fails to cause its
transfer agent to transmit via DWAC or, if applicable, transmit to Payee a
certificate or certificates representing the shares of Common Stock issuable
upon conversion of this Note on or before the Delivery Date, and if after such
date Payee is required by its broker to purchase (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by
Payee of Conversion Securities issuable upon conversion of this Note which
Payee anticipated receiving upon such exercise (a “Buy-In”), then Maker
shall (1) pay in cash to Payee the amount by which (x) Payee’s total
purchase price (including brokerage commissions, if any) for the Conversion
Securities so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Conversion Securities issuable upon conversion of this Note that
Maker was required to deliver to Payee in connection with the conversion at
issue times (B) the price(s) at which the sell order(s) giving
rise to such purchase obligation were executed, and (2) at the option of
Payee, either reinstate the portion of the Note for which such conversion was
not honored or deliver to Payee the number of Conversion Securities that would
have been issued had Maker timely complied with its conversion and delivery
obligations hereunder.  For example, if Payee purchases Conversion
Securities having a total purchase price of $11,000 to cover a Buy-In with
respect to an attempted conversion into Conversion Securities with an aggregate
sale price giving rise to such purchase obligation of $10,000, under clause (1) of
the immediately preceding sentence the Issuer shall be required to pay Payee
$1,000.  Payee shall provide Maker
written notice indicating the amounts payable to Payee in respect of the Buy-In,
together with applicable confirmations and other evidence reasonably requested
by Maker.  Nothing herein shall limit Payee’s right to pursue any
other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief
with respect to Maker’s failure to timely deliver certificates representing
Conversion Securities upon conversion of this Note as required pursuant to the
terms hereof.

 

(h)           Notwithstanding
anything to the contrary set forth in this Note, at no time may Payee convert
all or a portion of this Note if the number of Conversion Securities to be
issued pursuant to such conversion would exceed, when aggregated with all other
Conversion Securities owned by Payee at such time, the number of Conversion
Securities which would result in Payee beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the rules thereunder)
more than 4.9% of all of the Common Stock outstanding at such time; provided,
however, that upon Payee providing Maker with sixty-one (61) days’
notice that Payee would like to waive this Section 4(h) with regard
to any or all Conversion Securities issuable upon conversion of this Note, this
Section 4(h) will be of no force or effect with regard to all or a
portion of the Note referenced in such notice.

 

(i)            Notwithstanding
anything to the contrary set forth in this Note, at no time may Payee convert
all or a portion of this Note if the number of Conversion Securities to be issued
pursuant to such conversion, when aggregated with all other Conversion
Securities owned by Payee at such time, would result in Payee beneficially
owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) in excess of 9.9% of all of the
Common Stock outstanding at such time; provided, however, that
upon Payee providing Maker with sixty-one (61) days’ notice that Payee would
like to waive Section 4(i) of this Note with regard to any or all
Conversion Securities issuable upon conversion of this Note, this Section 4(i) shall
be of no force or effect with regard to all or a portion of the Note referenced
in such notice.

 

5.             Additional Matters Relating to Conversion; Inability to Convert. (a) Until the Note has been paid in full or converted
in full, the Conversion Price shall be subject to adjustment from time to time
as follows (but shall not be increased, other than pursuant to Section 5(a)(i) hereof):

 

 

(i) If
Maker shall effect a stock split of the outstanding Common Stock, the
applicable Conversion Price in effect immediately prior to the stock split
shall be proportionately decreased. If Maker shall combine the outstanding
shares of Common Stock, the applicable Conversion Price in effect immediately
prior to the combination shall be proportionately increased.

 

(ii) If
the Maker shall at any time make or issue or set a record date for the
determination of holders of securities entitled to receive a dividend or other
distribution payable in shares of Common Stock, then, and in each event, the
applicable Conversion Price in effect immediately prior to such event shall be
decreased as of the time of such issuance or, in the event such record date
shall have been fixed, as of the close of business on such record date, by
multiplying, the applicable Conversion Price then in effect by a fraction:

 

(1) the
numerator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date; and

 

(2) the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date plus the number of shares of Common Stock issuable
in payment of such dividend or distribution.

 

(iii) If
the Maker shall at any time make or issue or set a record date for the
determination of holders of securities entitled to receive a dividend or other
distribution or securities or other property other than as described in
paragraph (ii) above or in paragraph (vii) below, then, and in each
event, an appropriate revision to the applicable Conversion Price shall be made
and provision shall be made (by adjustments of the Conversion Price or otherwise)
so that Payee shall receive upon conversion hereof, in addition to the number
of Shares receivable thereon, the securities (of Maker or any other applicable
issuer) and other property which they would have received had this Note been
converted on the date of such event and had they thereafter, during the period
from the date of such event to and including the Conversion Date, retained such
securities and other property (together with any distributions payable thereon
during such period), giving application to all adjustments called for during
such period under this Section 5(a) with respect to the rights of
Payee.

 

(iv) If
the Shares issuable upon conversion of this Note shall be changed to the same
or different number of shares of any class or classes of stock or other
securities, whether by reclassification, exchange, substitution or otherwise
(other than as provided in paragraphs (i) through (iii) above or (v) below),
then an appropriate revision to the Conversion Price shall be made and provisions
shall be made (by adjustments of the Conversion Price or otherwise) so that
Payee shall have the right thereafter to convert this Note into the kind and
amount of shares of stock and other securities receivable upon
reclassification, exchange, substitution or other change, by holders of the
number of Shares into which such Note might have been converted immediately
prior to such reclassification, exchange, substitution or other change, all
subject to further adjustment as provided herein.

 

(v) If
at any time or form time to time there shall be a capital reorganization of
Maker (other than as described in paragraphs (i) through (iv) above)
or there shall be a Liquidity Event (as defined below), then without limitation
of Maker’s obligations under Section 6(a), as a part of such capital
reorganization or Liquidity Event, provision shall be made (by adjustments of
the Conversion Price or otherwise) so that Payee shall have the right
thereafter to convert this Note into the kind and amount of shares of stock and
other securities or property of Maker or any successor corporation that would
have been receivable in respect of the aggregate Shares into which such 

 

 

Note
might have been converted immediately prior to such capital reorganization or
Liquidity Event, all subject to further adjustment as provided herein.

 

(vi) In
the event Maker, shall, at any time, from time to time, issue or sell any
additional shares of Common Stock (other than as provided in paragraphs (i) through
(v) above, but including in any Qualified Financing) (“Additional
Shares of Common Stock”), at a price per share less than the Conversion
Price then in effect or without consideration, then the Conversion Price upon
each such issuance shall be reduced to a price equal to the consideration per
share paid for such Additional Shares of Common Stock.  No adjustment of the Conversion Price shall
be made under this Section 5(a)(vi) upon the issuance of any
Additional Shares of Common Stock which are issued pursuant to the exercise or
conversion of any Common Stock Equivalents if any such adjustment shall
previously have been made upon the issuance of such Common Stock Equivalents or
upon the issuance of any warrant or other rights therefor pursuant to Section 4(a)(vii).

 

(vii) If
(A) Maker shall issue or sell (including in any Qualified Financing) any
securities convertible into or exchangeable for, directly or indirectly, Common
Stock (“Convertible Securities”) or (B) any rights or warrants or
options to purchase any such Common Stock or Convertible Securities
(collectively, the “Common Stock Equivalents”) shall be issued or sold,
and the price per share for which Additional Shares of Common Stock may be
issuable pursuant to any such Common Stock Equivalent shall be less than the
applicable Conversion Price then in effect, or if, after any such issuance of
Common Stock Equivalents, the price per share for which Additional Shares of
Common Stock may be issuable thereafter is amended or adjusted, and such price
as so amended shall be less than the applicable Conversion Price in effect at
the time of such amendment or adjustment, then the applicable Conversion Price
upon each such issuance or amendment shall be reduced to a price equal to the
lowest price per share for which Additional Shares of Common Stock may be
issuable pursuant to such Common Stock Equivalent.

 

(viii) 
If, at any time after any adjustment of the Conversion Price then in effect
shall have been made pursuant to Section 4(a)(vii) as the result of
any issuance of warrants, other rights or Common Stock Equivalents, and such
warrants or other rights, or the right of conversion or exchange in such other
Common Stock Equivalents, shall expire, and all or a portion of such warrants
or other rights, or the right of conversion or exchange with respect to all or
a portion of such other Common Stock Equivalents, as the case may be shall not
have been exercised, such previous adjustment shall be rescinded and annulled
and the Additional Shares of Common Stock which were deemed to have been issued
by virtue of the computation made in connection with the adjustment so
rescinded and annulled shall no longer be deemed to have been issued by virtue
of such computation. Upon the occurrence of an event set forth in this Section 4(a)(viii),
there shall be a recomputation made of the effect of such Common Stock
Equivalents on the basis of treating the number of Additional Shares of Common
Stock or other property, if any, theretofore actually issued or issuable
pursuant to the previous exercise of any such warrants or other rights or any
such right of conversion or exchange, as having been issued on the date or
dates of any such exercise and for the consideration actually received and
receivable therefor.

 

(ix)   If Maker shall, directly or indirectly
through a Subsidiary or otherwise, purchase, redeem or otherwise acquire any
shares of Common Stock at a price per share greater than the Per Share Market
Value, then the Conversion Price upon each such purchase, redemption or
acquisition shall be adjusted to that price determined by multiplying such
Conversion Price by a fraction (i) the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
purchase, redemption or acquisition minus the number of shares of Common Stock
which the aggregate consideration for the total number of such shares of Common
Stock so 

 

 

purchased,
redeemed or acquired would purchase at the Per Share Market Value; and (ii) the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such purchase, redemption or acquisition. For the purposes of
this subsection 4(a)(ix), a purchase, redemption or acquisition of a Common
Stock Equivalent shall be deemed to be a purchase of the underlying Common
Stock, and the computation herein required shall be made on the basis of the
full exercise, conversion or exchange of such Common Stock Equivalent on the
date as of which such computation is required hereby to be made, whether or not
such Common Stock Equivalent is actually exercisable, convertible or
exchangeable on such date.  For purposes
of this Agreement, “Per Share Market Value” means on any particular date
(a) the last trading price on any national securities exchange on which
the Common Stock is listed, or, if there is no such price, the closing bid
price for a share of Common Stock in the over-the-counter market, as reported
by the OTC Bulletin Board or in the National Quotation Bureau Incorporated (or
similar organization or agency succeeding to its functions of reporting prices)
at the close of business on such date, or (b) if the Common Stock is not
then traded on any national securities exchange or reported by the OTC Bulletin
Board or the National Quotation Bureau Incorporated (or similar organization or
agency succeeding to its functions of reporting prices), then the average of
the “Pink Sheet” quotes for the Common Stock on such date, or (c) if the
Per Share Market Value cannot be determined as aforesaid, the fair market value
of a share of Common Stock on such date as determined by the Board of Directors
of Maker and the Lead Investor in good faith, without discount for lack of
liquidity or minority interest.

 

(x) 
In case any Shares or any Common Stock Equivalents shall be issued or sold in
connection with any merger or consolidation in which Maker is the surviving
corporation (other than any consolidation or merger in which the previously
outstanding Shares shall be changed to or exchanged for the stock or other
securities of another corporation), the amount of consideration therefor shall
be, deemed to be the fair value, as determined reasonably and in good faith by
the Board of Directors of Maker, of such portion of the assets and business of
the nonsurviving corporation as such Board may determine to be attributable to
such Shares or Common Stock Equivalents.

 

(xi) 
Anything herein to the contrary notwithstanding, Maker shall not be required to
make any adjustment to the Conversion Price in connection with a Permitted
Financing.

 

(xii) 
To the extent that any Additional Shares of Common Stock or any Common Stock
Equivalents (or any warrants or other rights therefor) shall be issued for cash
consideration, the consideration received by Maker therefor shall be the amount
of the cash received by Maker therefor, or, if such Additional Shares of Common
Stock or Common Stock Equivalents are offered by Maker for subscription, the
subscription price, or, if such Additional Shares of Common Stock or Common
Stock Equivalents are sold to underwriters or dealers for public offering
without a subscription offering, the initial public offering price (in any such
case subtracting any amounts paid or receivable for accrued interest or accrued
dividends and without taking into account any compensation, discounts or expenses
paid or incurred by Maker for and in the underwriting of, or otherwise in
connection with, the issuance thereof). To the extent that such issuance shall
be for a consideration other than cash, then, except as herein otherwise
expressly provided, the amount of such consideration shall be deemed to be the
fair value of such consideration at the time of such issuance as mutually
determined in good faith by the Board of Directors of Maker and the Lead
Investor. The consideration for each Additional Share of Common Stock issuable
pursuant to any warrants or other rights to subscribe for or purchase the same
shall be the consideration received by Maker for issuing all such warrants or
other rights divided by the number of shares of Common Stock issuable upon the exercise
of such warrants or 

 

 

rights;
plus the additional consideration payable to Maker upon exercise of such
warrant or other right for one share of Common Stock. The consideration for any
Additional Shares of Common Stock issuable pursuant to the terms of any Common
Stock Equivalents shall be the consideration received by Maker for issuing such
Common Stock Equivalent, divided by the number of shares of Common Stock
issuable upon the conversion or other exercise of such Common Stock Equivalent,
plus the additional consideration, if any, payable to Maker upon the exercise
of the right of conversion or exchange in such Common Stock Equivalent for one
share of Common Stock. In case of the issuance at any time of any Additional
Shares of Common Stock or Common Stock Equivalents in payment or satisfaction
of any dividends upon any class of stock other than Common Stock, Maker shall
be deemed to have received for such Additional Shares of Common Stock or Common
Stock Equivalents a consideration equal to the amount of such dividend so paid
or satisfied.

 

(xiii) 
If Maker shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment
shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.

 

(b) 
Maker shall not, by amendment of its certificate of incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by Maker, but will at all times in good faith, assist in
the carrying out of all the provisions of this Note, including the conversion
provisions hereof.  If any event shall
occur which is dilutive to the holder of this Note but which is not accounted
for in the preceding provisions of this Section 5, the principles of this Section 5
shall be applied to that event in as nearly an equivalent manner as may be
practicable in order to confer upon Payee the protections intended to be
provided hereby.

 

(c) Upon
occurrence of each adjustment or readjustment of the Conversion Price or number
of Shares issuable upon conversion of this Note, Maker at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to Payee a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based. Notwithstanding the foregoing, Maker shall not be
obligated to deliver a certificate unless such certificate would reflect an
increase or decrease of at least one percent (1%) of such adjusted amount (but
such increase or decrease shall nevertheless be efffective).

 

(d) Maker
shall pay any and all issue and other taxes, excluding federal, state or local
income taxes, that may be payable in respect of any issue or delivery of Shares
on conversion of this Note pursuant thereto; provided, however, that Maker
shall not be obligated to pay any transfer taxes resulting from any transfer
requested by Payee in connection with any such conversion.

 

(e) Maker shall at all times
when this Note shall be outstanding, reserve and keep available out of its
authorized but unissued Common Stock the total number of Shares for which this
Note and all interest accrued thereon are at any time convertible (without
regard to limitations on exercisability set forth in Sections 4(h) and
4(i)).

 

(f) 
If, upon Maker’s receipt of a conversion notice, Maker cannot issue Conversion
Shares registered for resale under the Registration Statement for any reason in
full satisfaction of such conversion, including, without limitation, because
Maker (w) does not have a sufficient number of Shares authorized and
available, (x) is otherwise prohibited by applicable law or by the rules or
regulations of any stock exchange, interdealer quotation system or other
self-regulatory organization with jurisdiction over Maker or any of its
securities from issuing all of the Shares 

 

 

which
are to be issued to Payee pursuant to a conversion notice or (y) fails to
have a sufficient number of Shares registered for resale under the Registration
Statement, then Maker shall issue as many registered Shares as it is able to
issue in accordance with Payee’s conversion notice and, with respect to the
unconverted portion of this Note, Payee, solely at Payee’s option, can elect
to:

 

(i) require
Maker to prepay that portion of this Note for which Maker is unable to issue
registered Shares in accordance with Payee’s conversion notice at a price per
share equal to the Triggering Event Prepayment Price (as defined below) as of
the requested conversion date;

 

(ii) if
Maker’s inability to fully convert is pursuant to clause (y) above,
require Maker to issue restricted Shares;

 

(iii) rescind
its conversion notice and retain the Note; and

 

(iv) exercise
Buy-In rights in accordance with the terms of Section 4(g) of this
Note.

 

6.             Additional Prepayment Provisions.  (a)  Notwithstanding anything contained
herein to the contrary, this Note is subject to prepayment in whole at any time
at the sole and absolute option of Maker, upon five Trading Days’ prior written
notice to Payee provided that the Equity Conditions are satisfied at the time
the prepayment notice is given to Payee and continue to be satisfied during
such five Trading Day Period.  The
conversion rights of Payee shall continue to be exercisable during such five
Trading Day Period and thereafter until payment is made.  In the event of prepayment pursuant to this Section 6(a),
Maker shall pay to Payee 110% of the outstanding principal balance of the Note,
plus any accrued interest due thereon as of the date of such prepayment.  Any prepayment by Maker pursuant to this Section 6(a) must
be made in connection with the prepayment in whole of all Notes issued by
Maker.  As used herein, “Equity
Conditions” means during the period in question that (i) Maker shall
have duly honored all conversions as to which a Conversion Notice was given by
Payee, (ii) (A) there is an effective Registration Statement pursuant
to which Payee is permitted to utilize the prospectus thereunder to resell all
of the Conversion Securities or (B) all of the Registrable Securities may
be resold pursuant to Rule 144 without volume limitations, manner-of-sale
restrictions or current public information requirements as determined by the
counsel to Maker pursuant to a written opinion letter to such effect, addressed
and acceptable to the Transfer Agent and Payee, (iii) the Common Stock is
listed on at least one of the OTC Bulletin Board, the American Stock Exchange,
the Nasdaq Global Select Market, the Nasdaq Select Market, the Nasdaq Capital
Market or The New York Stock Exchange, Inc. and all of the Registrable
Securities are listed or quoted for trading on such market (and Maker believes,
in good faith, that trading of the Common Stock on at least one such market
will continue uninterrupted for the foreseeable future), (iv) there is a
sufficient number of authorized but unissued and otherwise unreserved shares of
Common Stock for the issuance of all of the Registrable Securities, (v) the
issuance of the shares in question to Payee would not violate the limitations
set forth in Section 4(h) and 4(i) herein and (vi) Payee is
not in possession of any information provided by Maker that constitutes, or may
constitute, material non-public information. 
Prepayment under any provision of this Note shall not impair Payee’s
right to liquidated damages or other amounts due in excess of the prepayment
amount and all such amounts must be paid as part of the prepayment.

 

 

(b)  After a Triggering Event
(as defined below), Payee shall have the right, at Payee’s option, to require
Maker to prepay (a “Triggering Event Repayment”) all or a portion of
this Note in cash at a price equal to the sum of (i) the greater of (A) one
hundred and twenty five percent (125%) of the aggregate principal amount of
this Note plus all accrued and unpaid interest and (B) the aggregate
principal amount of this Note plus all accrued but unpaid interest hereon,
divided by the Conversion Price on (x) the date Triggering Event
Prepayment is demanded or otherwise due or (y) the date the Triggering
Event Prepayment is made in full, whichever is less, multiplied by the VWAP on (x) the
date Triggering Event Prepayment is demanded or otherwise due or (y) the
date the Triggering Event Prepayment is made in full, whichever is greater, and
(ii) all other amounts, costs, expenses and liquidated damages due in
respect of this Note and the other Transaction Documents (the “Triggering
Event Prepayment Price”).  Maker
acknowledges that to the extent the Triggering Event Prepayment Price exceeds
the then outstanding principal of and accrued and unpaid interest under this
Note, such excess shall be paid as liquidated damages, and not as a penalty, in
recognition of the uncertainty inherent in calculating the damages suffered by
Payee upon the occurrence of a Triggering Event.  For purposes of this Note, “VWAP”
means, for any date, (i) the daily volume weighted average price of the
Common Stock for such date on a national securities exchange or the OTC
Bulletin Board as reported by Bloomberg Financial L.P. (based on a Trading Day
from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (ii) if
the Common Stock is not then listed or quoted on a national securities exchange
or the OTC Bulletin Board and if prices for the Common Stock are then reported
in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (iii) in
all other cases, the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Lead Investor and
reasonably acceptable to Maker.  A “Triggering
Event” shall be deemed to have occurred at the time of any of the following
events:

 

(i) the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, the American Stock Exchange, the Nasdaq Global Select Market, the Nasdaq
Select Market, the Nasdaq Capital Market or The New York Stock Exchange, Inc.;

 

(ii) Maker
fails to or is unable to (including by reason of Maker having insufficient
authorized capital), or notifies Payee, including by way of public
announcement, at any time, that it does not intend to, comply with proper
requests for conversion of Notes or the exercise of warrants acquired by the
Investors under the Purchase Agreement;

 

(iii) the
Maker’s failure to comply with a Conversion Notice tendered in accordance with
the provisions of this Note within three (3) Trading Days after the
Conversion Notice is given;

 

(iv) (A) Maker
fails to be subject to the reporting requirements of Section 13 or 15(d) of
the Exchange Act or otherwise to comply with any of the conditions set forth in
Rule 144(i) under the Securities Act, (B) on or after the
Maturity Date, the Common Stock is not registered under Section 12(g) of
the Exchange Act or (C) on or after Maturity Date, there is not available
with respect to the Common Stock in each State of the United States an
exemption from all blue sky and other trading limitations for secondary
transactions;

 

 

(v) the
Registration Statement fails to become effective for any reason prior to the
Maturity Date;

 

(vi)   so long as any Notes are outstanding, the
effectiveness of the Registration Statement, after it becomes effective, (a) lapses
for any reason (including, without limitation, the issuance of a stop order) or
(b) after the Registration Statement becomes effective, it is unavailable
to the Holder for sale of the shares of Common Stock, and such lapse or
unavailability continues for a period of five (5) consecutive Trading Days
or for more than an aggregate of ten (10) Trading Days in any 365-day
period;

 

(vii) any
event described in clause (w), (x) or (y) of Section 5(f).

 

(c)  If Maker shall fail to
make any prepayment required to be made pursuant to Section 4(a), Section 5(f),
Section 6(b) or Section 7 within five (5) business days
following Maker’s receipt of Payee’s notice requesting prepayment, or if Maker
fails to prepay the Note within five (5) business days following Payee’s
receipt of Maker’s notice electing prepayment pursuant to Section 6(a), in
addition to any remedy Payee may have under this Note and the Purchase
Agreement, such unpaid amount shall bear interest at the rate of two percent
(2%) per month (prorated for partial months) until paid in
full.  Until the prepayment is made in full to Payee, Payee shall not
be prevented from converting the Note into Conversion Securities by virtue of
any prepayment demand or election (whether Payee or Maker is in possession of
the Note).

 

7.             Liquidity Event.  If a Liquidity Event (as defined herein)
occurs while this Note is outstanding, Maker will pay to Payee 110% of the
outstanding principal balance of the Note, plus any accrued interest due
thereon as of the date of the closing of such Liquidity Event.  For purposes herein, a “Liquidity Event”
shall mean any of the following:  (a) a
merger of Maker with or into any other Person (as defined herein), if, and only
if, after such merger holders of a majority of the Maker’s voting securities
immediately prior to the merger do not hold a majority of the voting securities
of the successor entity; (b) a sale or conveyance of all or substantially
all of Maker’s assets or common stock to any other Person; or (c) the
closing of a purchase, tender or exchange offer made to the holders of more
than fifty percent (50%) of the outstanding shares of Common Stock in which
more than fifty percent (50%) of the outstanding shares of Common Stock were
tendered and accepted.  For purposes
herein, “Person” is defined as an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture, or
governmental body.

 

8.             Events of Default.  Any of the following shall constitute an “Event of Default”
under this Note, and shall give rise to the remedies provided in Section 9
herein.

 

(a)           Maker
defaults in the payment of principal of or
interest on this Note when due, including upon any prepayment provided for
herein.

 

(b)           The
failure of any applicable Registration Statement (as defined in the
Registration Rights Agreement) to be filed with the Commission on or prior to
the date that is ten (10) days after the applicable Filing Deadline (as
defined in the Registration Rights Agreement) or the failure of the applicable
Registration 

 

 

Statement to be declared effective
by the Commission on or prior to the date that is ten (10) days after the
applicable Effectiveness Date (as defined in the Registration Rights
Agreement).

 

(c)           While
the applicable Registration Statement is required to be maintained effective
pursuant to the terms of the Registration Rights Agreement, the effectiveness
of the applicable Registration Statement lapses for any reason (including,
without limitation, the issuance of a stop order) or such Registration
Statement (or the prospectus contained therein) is unavailable to any holder of
Registrable Securities (as defined in the Registration Rights Agreement) for
sale of all of such holder’s Registrable Securities in accordance with the
terms of the Registration Rights Agreement, and such lapse or unavailability
continues for a period of five (5) consecutive Trading Days or for more
than an aggregate of ten (10) Trading Days in any 365-day period.

 

(d)           The
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, the American Stock Exchange, the Nasdaq Global Select Market, the Nasdaq
Select Market, the Nasdaq Capital Market or The New York Stock Exchange, Inc.
for a period of five (5) consecutive Trading Days or for more than an
aggregate of ten (10) Trading Days in any 365-day period.

 

(e)           Maker
fails to or is unable to (including by reason of Maker having insufficient
authorized capital), or notifies Payee, including by way of public announcement,
at any time, that it does not intend to, comply with proper requests for
conversion of Notes or the exercise of warrants acquired by the Investors under
the Purchase Agreement.

 

(f)            Maker
fails to instruct its transfer agent to remove any legends from Conversion
Securities eligible to be sold under Rule 144 of the Securities Act and
issue such unlegended certificates to Payee (or Payee’s transferee, if such
request is made in connection with a transfer of Conversion Securities), or to
cause to be provided to such transfer agent any opinion of counsel and/or
certification of Maker required in order for such transfer agent to comply with
such instructions, within three (3) Trading Days of Payee’s request so
long as Payee has provided a customary representation letter to Maker that
provides a reasonable basis to conclude, to the extent such conclusion is
dependent upon matters to be confirmed by the Investor, that such shares of
Common Stock can be sold pursuant to Rule 144.

 

(g)           Any
provision of any Transaction Document shall at any time for any reason (other
than pursuant to the express terms thereof) in any material respect cease to be
valid and binding on or enforceable against the parties thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or
a proceeding shall be commenced by Maker or any subsidiary of Maker or any
governmental authority having jurisdiction over any of them, seeking to
establish the invalidity or unenforceability thereof, or Maker or any subsidiary
of Maker shall deny in writing that it has any liability or obligation
purported to be created under any Transaction Document.

 

(h)           The
Security Documents shall for any reason fail or cease to create (i) a
valid and perfected first priority security interest in the Collateral (as
defined in the Security Agreement) in favor of the Collateral Agent on behalf
of the First Lien Noteholders or (ii) a valid and perfected second
priority security interest in the Collateral in favor of the Collateral Agent
on behalf of the Second Lien Noteholders.

 

(i)            Maker
or any of its subsidiaries shall be a party to or otherwise participate in or
recommend a transaction that, if consummated, would constitute a Liquidity
Event in which holders of Shares are to receive or may elect to receive
consideration other than cash or securities of a publicly traded corporation
whose common stock is quoted or listed for trading on at least one of the OTC
Bulletin Board, the American Stock Exchange, the Nasdaq Global Select Market,
the Nasdaq Select Market, the Nasdaq Capital Market or The New York Stock
Exchange, Inc. or in which the Successor Entity has not agreed to assume
in writing all obligations of Maker hereunder; or, other than pursuant to a
permitted Liquidity Event, Maker or any of its subsidiaries shall 

 

 

directly or indirectly transfer
sell, lease  or otherwise dispose of any
of its assets or rights other than sales of inventory in the ordinary course of
business.  For purposes herein, “Successor
Entity” means the Person (or,
if so elected by Payee, the parent entity) formed by, resulting from or
surviving any Liquidity Event or the Person (or, if so elected by Payee, the
parent entity) with which such Liquidity Event shall have been or is
anticipated to be entered into.

 

(j)            Maker
defaults in the compliance with any other
term contained in this Note or any other Transaction Document (which default is
not described in paragraphs (a) through (i) above) and such default
is not remedied or waived within 10 business days after receipt by Maker of
notice from Payee of such default.

 

(k)           Maker
or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of
Regulation S-X) shall be subject to a Bankruptcy Event.  For purposes hereof, “Bankruptcy Event”
means any of the following events: (a) Maker or any Significant Subsidiary
thereof commences a case or other proceeding under any bankruptcy,
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
relating to Maker or any Significant Subsidiary thereof, (b) there is
commenced against Maker or any Significant Subsidiary thereof any such case or
proceeding that is not dismissed within 60 days after commencement, (c) Maker
or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or
any order of relief or other order approving any such case or proceeding is
entered, (d) Maker or any Significant Subsidiary thereof suffers any
appointment of any custodian or the like for it or any substantial part of its
property that is not discharged or stayed within 60 calendar days after such
appointment, (e) Maker or any Significant Subsidiary thereof makes a
general assignment for the benefit of creditors, (f) Maker or any
Significant Subsidiary thereof calls a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of its debts, or (g) Maker
or any Significant Subsidiary thereof, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the foregoing
or takes any corporate or other action for the purpose of effecting any of the
foregoing.

 

(l)            A
final judgment or judgments for the payment of money aggregating in excess of
$150,000 are rendered against Maker and/or any subsidiary of Maker and which
judgments are not, within thirty (30) days after the entry thereof, bonded,
discharged or stayed pending appeal, or are not discharged within thirty (30)
days after the expiration of such stay; provided, however, any judgment which
is covered by insurance or an indemnity from a credit worthy party shall not be
included in calculating the $150,000 amount set forth above so long as Maker
provides the Holder a written statement from such insurer or indemnity provider
(which written statement shall be reasonably satisfactory to the Holder) to the
effect that such judgment is covered by insurance or an indemnity and Maker or
such subsidiary of Maker (as the case may be) will receive the proceeds of such
insurance or indemnity within thirty (30) days of the issuance of such
judgment.

 

(m)          The
Company and/or any subsidiary of Maker, individually or in the aggregate,
either (i) fails to pay, when due, or within any applicable grace period,
any payment with respect to any Indebtedness in excess of $150,000 due to any
third party (other than, with respect to unsecured Indebtedness only, payments contested
by Maker and/or such subsidiary of Maker (as the case may be) in good faith by
proper proceedings and with respect to which adequate reserves have been set
aside for the payment thereof in accordance with GAAP) or is otherwise in
breach or violation of any agreement for monies owed or owing in an amount in
excess of $150,000, which breach or violation permits the other party thereto
to declare a default or otherwise accelerate amounts due thereunder, or (ii) suffer
to exist any other circumstance or event that would, with or without the
passage of time or the giving of notice, result in a default or event of
default under any agreement binding Maker or any subsidiary of Maker, which
default or event of default would or is likely to have a material adverse
effect on the business, assets, operations (including results thereof),
liabilities, properties, condition (including financial condition) or prospects
of Maker or any of its Subsidiaries, individually or in the aggregate.

 

 

9.             Remedies on Event of Default; Power to Confess Judgment.  (a)  If any Event of Default will occur,
Payee shall, in addition to any and all other available rights and remedies,
have the right, at Payee’s option, to: (a) declare the entire unpaid
outstanding principal balance of this Note, together with all interest accrued
thereon, and all other sums due by Maker hereunder (including without
limitation any applicable prepayment premium or liquidated damages if such
Event of Default is an event otherwise giving rise to payment of such
prepayment premium or liquidated damages), to be immediately due and payable
without presentment, demand, protest, or notice, all of which are hereby
expressly unconditionally and irrevocably waived by Maker, provided that upon
the occurrence of an Event of Default described in Section 8(k), the
entire unpaid outstanding principal balance of this Note, together with all
interest accrued thereon, and all other sums due by Maker hereunder, shall be
immediately due and payable without any declaration or other act by Payee; and (b) pursue
any and all available remedies for the collection of such principal and
interest and all other sums due by Maker hereunder and to enforce its rights as
described herein and in the Security Documents; and in such case Payee may also
recover all costs of suit and other expenses in connection therewith, including
reasonable attorney’s fees for collection and the right to equitable relief to
enforce Payee’s rights as set forth herein without the requirement to post any
bond or other financial surety.  The
remedies provided in this Note may be exercised by Payee without notice to
Maker (to the extent permitted by law and except as notice is herein expressly
required), and will be in addition to and not in substitution for the rights
and remedies which would otherwise be vested in Payee for the recovery of
damages or otherwise in the event of a breach of any of the undertakings of
Maker hereunder.  No failure by Payee to
exercise and no delay in exercising any right, power or privilege under this
Note will operate as a waiver thereof, nor will any single or partial exercise
of any right, power or privilege hereunder preclude any other, further or
additional exercise thereof. 
Notwithstanding the foregoing, the exercise of remedies by Payee shall
in all respects be subject to Sections 7.16 through 7.18 of the Purchase Agreement.

 

(b) Maker hereby empowers any attorney
of any court of record, after the occurrence of any Event of Default hereunder,
to appear for Maker and, with or without complaint filed, confess judgment, or
a series of judgments, against the Maker in favor of Payee or any holder hereof
for the entire principal balance of this Note, all accrued interest and all
other amounts due hereunder, together with costs of suit and an attorney’s
commission equal to twenty (20%) of such principal and interest added as a
reasonable attorneys’ fee (provided, however, that Payee shall only seek to
recover those reasonable attorneys’ fees incurred by it from time to time), and
for doing so, this Note or a copy verified by affidavit shall be a sufficient
warrant.  Maker hereby forever waives and
releases all errors in said proceedings and all rights of appeal and all relief
from any and all appraisement, stay or exemption laws of any state now in force
or hereafter enacted.  Interest on any
such judgment shall accrue at the Default Rate

 

No single exercise of the foregoing
power to confess judgment, or a series of judgments, shall be deemed to exhaust
the power, whether or not any such exercise shall be held by any court to be
invalid, voidable, or void, but the power shall continue undiminished and it
may be exercised from time to time as often as Payee shall elect until such
time as Payee shall have received payment in full of the debt, interest and
costs.  Notwithstanding the attorney’s
commission provided for in the preceding paragraph (which is included in the warrant
for purposes of establishing a sum certain), the amount of attorneys’ fees that
Payee may recover from Maker shall not exceed the actual attorneys’ fees
incurred by Payee.

 

10.          Governing Law; Venue; Waiver of Jury Trial.   This Note shall be governed by and construed
in accordance with the laws of the State of Delaware applied to contracts to be
performed wholly within the State of Delaware, without regard to conflicts of
laws principles.  Any judicial proceeding
brought against Maker with respect to this Note or any related agreement may be
brought in any court located in the State of Delaware, United States of
America, and, by execution and delivery of this Note, Maker accepts for itself
and in connection with its 

 

 

properties, generally and unconditionally,
the non-exclusive jurisdiction of the aforesaid courts, and irrevocably agrees
to be bound by any judgment rendered thereby in connection with this Note.  Maker hereby waives personal service of any
and all process upon it and consents that all such service of process may be
made by registered mail (return receipt requested) directed to Maker at its
address set forth in the Note Purchase Agreement and service so made shall be
deemed completed five (5) days after the same shall have been so deposited
in the mails of the United States of America. 
Nothing herein shall affect the right to serve process in any manner
permitted by law or shall limit the right of Payee to bring proceedings against
Maker in the courts of any other jurisdiction. 
Maker waives any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens.  Any judicial proceeding by Maker against
Payee involving, directly or indirectly, any matter or claim in any way arising
out of, related to or connected with this Note or any related agreement, shall
be brought only in a federal or state court located in the State of Delaware.

 

MAKER HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(A) ARISING UNDER THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR NOTE
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED
WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF
THEM WITH RESPECT TO THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED
HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE AND EACH PARTY HEREBY
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS NOTE MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES HERETO TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY.

 

11.          Amendment.  Neither
any provision of this Note nor any performance hereunder may be amended or
waived orally, but only by an agreement in writing and signed by the party
against whom enforcement of any waiver, change, modification or discharge is
sought.

 

12.          Security Interest.  This Note is secured by the Security
Documents.

 

13.          Binding Effect.  The rights and obligations of Maker under
this Note will be binding upon its successors, assigns, heirs, administrators
and transferees.

 

14.          Notices.  All notices and other communications required
or permitted hereunder will be provided and become effective as set forth in Section 7.4
of the Purchase Agreement.

 

EXECUTED as of the date first set forth above.

 

	
   

  	
  MAKER:

  
	
   

  	
   

  
	
   

  	
  TECHNISCAN, INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Steven K. Passey

  
	
   

  	
   

  	
  Steven K. Passey, Chief Financial
  Officer

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